Document:

Supplemental Agreement dated June 11, 2009 to a loan agreement

 Exhibit 4.25 
 Private & Confidential 
 Dated 11 June 2009 
 SUPPLEMENTAL AGREEMENT 
 relating to a 
 loan of up to US$101,150,000 
 to 
 TEAM-UP OWNING COMPANY LIMITED 
 and 
 ORPHEUS OWNING COMPANY LIMITED 
 provided by 

 THE BANKS AND FINANCIAL INSTITUTIONS SET OUT IN SCHEDULE 1 
 Arranger, Agent, Security Agent and Account Bank 
 DNB NOR BANK ASA 
 Swap Provider 
 DNB NOR BANK ASA 

 

 

 Contents 
  

			
	Clause	  	Page
		
	 1       Definitions
	  	2
		
	 2       Agreement of Creditors
	  	4
		
	 3       Amendments
	  	5
		
	 4       Representations and warranties
	  	9
		
	 5       Conditions
	  	10
		
	 6       Relevant Parties’ confirmation
	  	11
		
	 7       Expenses
	  	11
		
	 8       Miscellaneous and notices
	  	12
		
	 9       Applicable law
	  	12
		
	Schedule 1 The Banks	  	14
		
	Schedule 2 Documents and evidence required as conditions precedent	  	15
		
	Schedule 3 Form of Charter Assignment	  	17

 THIS SUPPLEMENTAL AGREEMENT is dated 11 June 2009 and made BETWEEN: 
  

	(1)	TEAM-UP OWNING COMPANY LIMITED, a corporation incorporated under the laws of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (“Team-Up”); 

  

	(2)	ORPHEUS OWNING COMPANY LIMITED, a corporation incorporated under the laws of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (“Orpheus” and, together with Team-Up, the “Borrowers”); 

  

	(3)	DRYSHIPS INC., a corporation incorporated under the laws of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Marshall Islands MH96960 (the “Corporate Guarantor”); 

  

	(4)	CARDIFF MARINE INC., a corporation incorporated in the Republic of Liberia, whose registered office is at 80 Broad Street, Monrovia, Liberia (the
“Manager”); 

  

	(5)	THE BANKS AND FINANCIAL INSTITUTIONS whose names and addresses are set out in schedule 1 (together the “Banks” and each a
“Bank”); 

  

	(6)	DNB NOR BANK ASA, a company incorporated in Norway with its registered office at Stranden 21, P.O. Box 1171 Sentrum N-0107 Oslo, Norway, acting for the purposes
of this Agreement through its branch at 20 St. Dunstan’s Hill, London EC3R 8HY, England as arranger (in such capacity the “Arranger”), agent (in such capacity the “Agent”), security agent (in such capacity the
“Security Agent”) and account bank (in such capacity the “Account Bank”); and 

  

	(7)	DNB NOR BANK ASA, a company incorporated in Norway with its registered office at Stranden 21, P.O. Box 1171 Sentrum N-0107 Oslo, Norway, acting for the purposes
of this Agreement through its branch at 20 St. Dunstan’s Hill, London EC3R 8HY, England as swap provider (in such capacity the “Swap Provider”). 

 WHEREAS: 
  

	(A)	this Agreement is supplemental to: 

  

	 	(a)	a loan agreement dated 4 December 2007 (the “Principal Agreement”) made between the Borrowers as joint and several borrowers, the Banks as
lenders, the Arranger, the Agent, the Security Agent, the Account Bank and the Swap Provider, pursuant to which the Banks agreed (inter alia) to advance (and have advanced) by way of loan to the Borrowers, upon the terms and conditions
therein contained, the principal sum of One hundred and one million one hundred and fifty thousand Dollars ($101,150,000) of which the principal amount outstanding at the date hereof is $85,525,000; and 

  

	 	(b)	a corporate guarantee dated 4 December 2007 (the “Principal Corporate Guarantee”) made between the Corporate Guarantor and the Security Agent in
respect of the obligations of the Borrowers to the Creditors under the Principal Agreement and the Master Swap Agreement; 

  

	(B)	this Agreement sets out the terms and conditions upon which the Creditors agree, at the request of the Borrowers: 

  

	 	(a)	to waive the application of clause 8.2.1 of the Principal Agreement for a certain period specified herein; 

  

	 	(b)	to waive the application of clause 5.3 of the Principal Corporate Guarantee for a certain period specified herein; 

  

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	 	(c)	to certain other amendments to the terms and conditions applicable to the Loan, the Principal Agreement and the Principal Corporate Guarantee and agreed to by the
Borrowers, the Corporate Guarantor and the Creditors; and 

  

	 	(d)	to certain consequential changes to the Principal Agreement and the Principal Corporate Guarantee required in connection with the above and agreed to by the Borrowers,
the Corporate Guarantor and the Creditors. 

 NOW IT IS HEREBY AGREED as follows: 
  

	1.	Definitions 

  

	1.1	Defined expressions 

 Words and expressions defined in the Principal Agreement shall unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Agreement. 
  

	1.2	Definitions 

 In this
Agreement, unless the context otherwise requires: 
 “Avoca Charter” means the charter contract dated
3 September 2008 in respect of Avoca made between Cosco Qingdao (Qingdao Ocean Shipping Company, Limited) of the Republic of China as charterer and Orpheus as owner, which contract is, on the date of this Agreement, incorporated in a
recapitulation email dated 3 September 2008 addressed by Simpson Spence & Young (being the said charterer’s brokers) acting on behalf of the said charterer to Orpheus; 
 “Avoca Charter Assignment” means the first priority assignment of the Avoca Charter executed or (as the context may require)
to be executed by Orpheus in favour of the Security Agent in the form set out in schedule 3; 
 “Charter
Assignments” means, together, the Avoca Charter Assignment and the Saldanha Charter Assignment and “Charter Assignment” means either of them; 
 “Charters” means, together, the Avoca Charter and the Saldanha Charter and “Charter” means either of them; 
 “Corporate Guarantee” means the Principal Corporate Guarantee as amended by this Agreement; 
 “Effective Date” means the date falling no later than 12 June 2009, on which the Agent notifies the Borrowers in
writing that it has received the documents and evidence specified in clause 5 and schedule 2 in a form and substance satisfactory to it; 
 “Loan Agreement” means the Principal Agreement as amended by this Agreement; 
 “Relevant Documents” means, together, this Agreement and the Charter Assignments; 
 “Relevant Parties” means, together, the Borrowers, the Manager and the Corporate Guarantor; 
 “Saldanha Charter” means the charter contract dated 25 June 2008 in respect of Saldanha made between Cosco Bulk Carriers Co. Ltd. of the Republic of China as charterer and Team-Up as
owner, which contract is, on the date of this Agreement, incorporated in a recapitulation email dated 25 June 2008 addressed by Genoa Sea Brokers SPA (being the said charterer’s brokers) acting on behalf of the said charterer to Team-Up;

  

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 “Saldanha Charter Assignment” means the first priority assignment of the
Saldanha Charter executed or (as the context may require) to be executed by Team-Up in favour of the Security Agent in the form set out in schedule 3; and 
 “Waiver Period” means the period of twenty four (24) months commencing on 19 May 2009. 
  

	1.3	Principal Agreement and Principal Corporate Guarantee 

  

	1.3.1	References in the Principal Agreement to “this Agreement” shall, with effect from the Effective Date and unless the context otherwise requires, be references
to the Principal Agreement as amended by this Agreement and words such as “herein”, “hereof”, “hereunder”, “hereafter”, “hereby” and “hereto”, where they appear in the Principal Agreement,
shall be construed accordingly. 

  

	1.3.2	References in the Principal Corporate Guarantee to “this Guarantee”, shall with effect from the Effective Date and unless the context otherwise requires, be
references to the Principal Corporate Guarantee as amended by this Agreement and words such as “herein”, “hereof”, “hereunder”, “hereafter”, “hereby” and “hereto”, where they appear in the
Principal Corporate Guarantee, shall be construed accordingly. 

  

	1.4	Headings 

 Clause headings
and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement. 
  

	1.5	Construction of certain terms 

 In this Agreement, unless the context otherwise requires: 
  

	1.5.1	references to clauses and schedules are to be construed as references to clauses of, and schedules to, this Agreement and references to this Agreement includes its
schedules; 

  

	1.5.2	references to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that
document as in force for the time being and as amended in accordance with terms thereof, or, as the case may be, with the agreement of the relevant parties; 

  

	1.5.3	references to a “regulation” include any present or future regulation, rule, directive, requirement, request or guideline (whether or not having the
force of law) of any agency, authority, central bank or government department or any self-regulatory or other national or supra-national authority; 

  

	1.5.4	words importing the plural shall include the singular and vice versa; 

  

	1.5.5	references to a time of day are to London time; 

  

	1.5.6	references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity;

  

	1.5.7	references to a “guarantee” include references to an indemnity or other assurance against financial loss including, without limitation, an obligation
to purchase assets or services as a consequence of a default by any other person to pay any Indebtedness and “guaranteed” shall be construed accordingly; and 

  

	1.5.8	references to any enactment shall be deemed to include references to such enactment as re-enacted, amended or extended. 

  

 3 

	2	Agreement of Creditors 

  

	2.1	The Creditors and the Relevant Parties hereby agree and acknowledge that: 

  

	 	(a)	on the date of this Agreement the Security Value is less than the Security Requirement and that the Banks are entitled under clause 8.2.1 of the Principal Agreement to
require from the Borrowers that such deficiency be remedied in the manner specified therein; and 

  

	 	(b)	the Corporate Guarantor is in breach of the financial covenants set out in clause 5.3 of the Principal Corporate Guarantee. 

 The Borrowers and the other Relevant Parties have requested that the Creditors waive (i) the application of clause 8.2.1 of the
Principal Agreement and clause 5.3 of the Principal Corporate Guarantee and (ii) the current breach of clause 5.3 of the Principal Corporate Guarantee. 
  

	2.2	The Banks, relying upon the representations and warranties on the part of the Relevant Parties contained in clause 4, agree with the Borrowers and the Corporate
Guarantor that, subject to the terms and conditions of this Agreement and in particular, but without prejudice to the generality of the foregoing, fulfilment on or before 12 June 2009 of the conditions contained in clause 5 and schedule 2, the
Creditors, with effect on the Effective Date: 

  

	2.2.1	waive for the Waiver Period: 

  

	 	(a)	the application of clause 8.2.1 of the Loan Agreement Provided however that, for the avoidance of doubt, such waiver shall not prejudice the Banks’
right to demand compliance by the Borrowers, and the Borrowers’ obligation to comply, with such clause immediately after the end of Waiver Period; and 

  

	 	(b)	the application of clause 5.3 of the Corporate Guarantee Provided however that, for the avoidance of doubt, such waiver shall not prejudice the Security
Agent’s and/or the Agent’s and/or the Banks’ right to demand compliance by the Corporate Guarantor, and the Corporate Guarantor’s obligation to comply, with such clause immediately after the end of the Waiver Period,

 Provided further that, within thirty (30) days from the cancellation, frustration or
termination (other than expiry by mere effluxion of same) of either Charter, the waivers of the application of clause 8.2.1 of the Loan Agreement and clause 5.3 of the Corporate Guarantee contained in this clause 2.2.1 shall immediately cease, and
such clauses shall apply with immediate effect unless within such thirty (30) day period: 
  

	 	(i)	the Borrowers and the Corporate Guarantor have presented in writing to the Agent an alternative remedial plan for the purpose of ensuring compliance with clause 8.2.1
of the Loan Agreement and clause 5.3 of the Corporate Guarantee at all times until all amounts owing under the Security Documents have been repaid in full; and 

  

	 	(ii)	the Agent has advised in writing the Borrowers and the Corporate Guarantor that such plan is in all respects acceptable and satisfactory to the Agent in its absolute
and unfettered discretion and the Relevant Parties or any other persons have complied in full with any terms imposed by the Agent in its absolute and unfettered discretion as a condition to accepting such plan; 

  

	2.2.2	waive the breach of clause 5.3 of the Corporate Guarantee existing on the date of this Agreement Provided however that, for the avoidance of doubt, such
waiver shall not prejudice the Security Agent’s and/or the Agent’s and/or the Banks’ right to demand compliance by the Corporate Guarantor, and the Corporate Guarantor’s obligation to comply, with such clause at any time in the
future (but subject to the terms of clause 2.2.1 above); 

  

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	2.2.3	consent and agree to the amendment of the Principal Agreement on the terms set out in clause 3.1; and 

  

	2.2.4	consent and agree to the amendment of the Principal Corporate Guarantee on the terms set out in clause 3.2. 

  

	3	Amendments 

  

	3.1	Amendments to Principal Agreement and Principal Corporate Guarantee 

 The Principal Agreement shall, with effect on and from the Effective Date, be (and it is hereby) amended in accordance with the following provisions (and the Principal Agreement (as so amended) will
continue to be binding upon each of the parties hereto upon such terms as so amended): 
  

	3.1.1	by inserting in clause 1.2 of the Principal Agreement the following new definitions of “Avoca Charter”, “Avoca Charter Assignment”,
“Avoca Charterer”, “Basel 2 Accord”, “Basel 2 Approach”, “Basel 2 Regulation”, “Capital Adequacy Law”, “Charter Assignments”,
“Charters”, “Excess Cash”, “Excess Cash Calculation Date”, “Long-Term Charter”, “Saldanha Charter”, “Saldanha Charter Assignment”,
“Saldanha Charterer”, “Security Period” and “Supplemental Agreement” in the correct alphabetical order: 

 ““Avoca Charter” means the charter contract dated 3 September 2008 in respect of Avoca made between the Avoca Charterer as charterer and the Avoca Borrower as owner, which
contract is, on the date of the Supplemental Agreement, incorporated in a recapitulation email dated 3 September 2008 addressed by Simpson Spence & Young (being the Avoca Charterer’s brokers) acting on behalf of the Avoca
Charterer to the Avoca Borrower;”; 
 ““Avoca Charter Assignment” means the first priority charter
assignment of the Avoca Charter executed or (as the context may require) to be executed by the Avoca Borrower in favour of the Security Agent in the form set out in schedule 3 of the Supplemental Agreement;”; 
 ““Avoca Charterer” means Cosco Qingadao (Qingdao Ocean Shipping Company, Limited) of the People’s Republic of
China and includes its successors in title;”; 
 ““Basel 2 Accord” means the “International
Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement;”; 
 ““Basel 2 Approach” means either the Standardised Approach or the relevant Internal Ratings Based Approach (each as
defined in the Basel 2 Accord) adopted by a Bank (or its holding company) for the purposes of implementing or complying with the Basel 2 Accord;”; 
 ““Basel 2 Regulation” means (a) any law or regulation implementing the Basel 2 Accord or (b) any Basel 2 Approach adopted by a Bank;”; 
 ““Capital Adequacy Law” means any law or any regulation (whether or not having the force of law, but, if not having the
force of law, with which a Bank or, as the case may be, its holding company habitually complies), including (without limitation) those relating to Taxation, capital adequacy, liquidity, reserve assets, cash ratio deposits and special deposits or
other banking or monetary controls or requirements which affect the manner in which a Bank allocates capital resources to its obligations hereunder (including, without limitation, those resulting from the implementation or application of or
compliance with the Basel 2 Accord or any Basel 2 Regulation);”; 
 ““Charter Assignments” means,
together, the Avoca Charter Assignment and the Saldanha Charter Assignment and “Charter Assignment” means either of them;”; 
  

 5 

 ““Charters” means, together, the Avoca Charter and the Saldanha
Charter and “Charter” means either of them;”; 
 ““Excess Cash” means, in relation to an
Operating Account as at each Excess Cash Calculation Date, the funds (as determined by the Agent in its absolute discretion) in excess of $3,500,000 standing to the credit of such Operating Account on such date; 
 ““Excess Cash Calculation Date” means each of 31 March, 30 June, 30 September and 31 December of
each calendar year (but commencing with 30 June 2009);” 
 ““Long-Term Charter” means, in respect
of a Ship, any time or voyage charterparty of that Ship for a term which exceeds or by virtue of any optional extensions therein contained might exceed twelve (12) months’ duration and which is entered into by the relevant Borrower with a
charterer of its Ship at any time during the Security Period, and it includes each Charter;”; 
 ““Saldanha
Charter” means the charter contract dated 25 June 2008 in respect of Saldanha made between the Saldanha Charterer as charterer and the Saldanha Borrower as owner, which contract is, on the date of the Supplemental Agreement,
incorporated in a recapitulation email dated 25 June 2008 addressed by Genoa Sea Brokers SPA (being the Saldanha Charterer’s brokers) acting on behalf of the Saldanha Charterer to the Saldanha Borrower;”; 
 ““Saldanha Charter Assignment” means the first priority charter assignment of the Saldanha Charter executed or (as the
context may require) to be executed by the Saldanha Borrower in favour of the Security Agent in the form set out in schedule 3 of the Supplemental Agreement;”; 
 ““Saldanha Charterer” means Cosco Bulk Carriers Co. Ltd. of the People’s Republic of China and includes its successors in title;”; 
 ““Security Period” means the period commencing on the date of this Agreement and ending when all moneys owing under
this Agreement and the other Security Documents have been repaid in full;”; 
 ““Supplemental
Agreement” means the agreement dated 11 June 2009 made between (inter alios) the Borrowers and the Creditors supplemental to this Agreement;”; 
  

	3.1.2	by deleting the definition of “Equity Ratio” in clause 1.2 of the Principal Agreement in its entirety; 

  

	3.1.3	by deleting the definition of “Margin” in clause 1.2 of the Principal Agreement and by inserting in its place the following new definition of
“Margin”: 

 ““Margin” means two per cent (2%) per annum;”;

  

	3.1.4	by deleting the definitions of “Margin Calculation Date”, “Margin Period” and “Measurement Period” in clause 1.2 of
the Principal Agreement in their entirety; 

  

	3.1.5	by inserting the words“, the Supplemental Agreement, the Charter Assignments,” after the words “this Agreement”, in the first line of the definition
of “Security Documents” in clause 1.2 of the Principal Agreement; 

  

	3.1.6	by inserting the words “, the Charters, any other Long-Term Charter” after the words “the Management Agreements” in the first line of the definition
of “Underlying Documents” in clause 1.2 of the Principal Agreement; 

  

	3.1.7	by inserting at the end of clause 1.4.3 of the Principal Agreement the following words: “and, for the avoidance of doubt, shall include any Basel 2
Regulation”; 

  

	3.1.8	by deleting clause 3.1.2 in its entirety, by deleting the heading “General” in the existing clause 3.1.1 and by renumbering the existing clause 3.1.1 as
clause 3.1; 

  

 6 

	3.1.9	by adding after the word “agree” in the penultimate line of clause 3.2 of the Principal Agreement the following new words: 

 “Provided that the Borrowers may not select more than three (3) Interest Periods having a duration of one (1) month within the
same calendar year”; 
  

	3.1.10	by amending the words “pursuant to clauses 4.3, 8.3.1(a) or 12.1” in the fifteenth line of clause 3.4 of the Principal Agreement to read “pursuant to
clauses 4.3, 8.3.1(a), 8.4 or 12.1”; 

  

	3.1.11	by adding after the words “proportionately.” in the penultimate line of clause 4.5 of the Principal Agreement and immediately before the subsequent sentence,
the following new sentence: 

 “Any amount prepaid pursuant to clause 8.4 shall be applied in reducing
proportionately those repayment instalments under clause 4.1 (including the Balloon Instalments) which fall due on or after 23 July 2012.”; 
  

	3.1.12	by deleting clauses 7.2.13(b) and 7.2.13(c) in their entirety and by inserting a “.” instead of the “;” at the end of the remaining clause
7.2.13(a); 

  

	3.1.13	by deleting clause 8.1.14 of the Principal Agreement in its entirety and by replacing it with the following new clause 8.1.14: 

  

	 	“8.1.14	Charters 

 without prejudice to
the rights of the Banks under the provisions of the relevant Ship Security Documents, advise the Agent promptly of any Long-Term Charter in respect of a Ship (other than the Charters) and (a) forthwith after its execution deliver a certified
copy of each such Long-Term Charter to the Agent, (b) forthwith following demand by the Agent execute an assignment of such Long-Term Charter in favour of the Security Agent in the form or substantially the form of the Charter Assignments and
any notice of assignment required in connection therewith and immediately after the Agent’s demand following an Event of Default give such notice to the relevant charterer and procure that within seven (7) days after the service of such
notice of assignment on such charterer, the relevant charterer provides its acknowledgement of such notice in writing and in the form required by such assignment and (c) pay all legal and other costs incurred by the Agent or any other Creditor
in connection with any such charter assignments; and”; 
  

	3.1.14	by deleting clause 8.3.12 in its entirety and by replacing it with the following new clause 8.3.12: 

  

	 	“8.3.12	Share capital and distribution 

 purchase or otherwise acquire for value any shares of their capital or declare or pay any dividends or distribute any of their present or future assets, undertaking, rights or revenues to any of their shareholders;”; 
  

	3.1.15	by inserting after clause 8.3.16 of the Principal Agreement the following new clause 8.4: 

  

	 	“8.4	Excess Cash recapture 

  

	 	8.4.1	On the first Interest Payment Date falling after each Excess Cash Calculation Date, the Borrowers shall prepay to the Agent (for the account of the Banks) such part of
the Loan as is equal to the aggregate amount of the Excess Cash in relation to each of the Operating Accounts as at such Excess Cash Calculation Date. From each such Excess Cash Calculation Date until the due date of the relevant prepayment, the
Borrowers undertake to maintain in each Operating Account, a minimum cash balance of no less than the amount to be prepaid on such date of prepayment. 

  

	 	8.4.2	The provisions of clause 4.4 and any relevant provisions of clause 4.5 shall apply to any prepayments made under this clause 8.4. 

  

 7 

	 	8.4.3	Notwithstanding the provisions of this clause 8.4, the provisions of clause 14.3 shall continue to apply at all times (but, in relation to withdrawals under clause
14.3.4, subject always to the prohibitions and restrictions of clause 8.3.12).”; 

  

	3.1.16	by amending the words “under clauses 8.1.5, 8.2 or 8.3” in the eighth and ninth lines of clause 10.1.3 of the Principal Agreement to read “under clauses
8.1.5, 8.2, 8.3 or 8.4”; 

  

	3.1.17	by deleting clause 10.1.28 of the Principal Agreement in its entirety and by replacing it with the following new clause 10.1.28: 

 “10.1.28 Shareholdings: there is any change in the legal and/or ultimate beneficial ownership of any of the shares in any of the
Borrowers, the Corporate Guarantor, the Manager or any of them such that either of the Borrowers ceases to be a wholly-owned direct subsidiary of the Corporate Guarantor; or”; 
  

	3.1.18	by inserting after clause 10.1.32 of the Principal Agreement the following new clause 10.1.33 and by deleting the symbol “.” at the end of clause 10.1.32 of
the Principal Agreement and replacing it with the words “; or”: 

  

	 	“10.1.33	Termination of Charter: either Charter is cancelled or terminated or becomes frustrated for any reason whatsoever (other than expiry by effluxion of time or the
relevant Ship becoming a Total Loss) unless within thirty (30) days of any such event occurring: 

  

	 	(a)	the Borrowers and the Corporate Guarantor have presented to the Agent in writing an alternative remedial plan for the purpose of ensuring compliance with clause 8.2.1
of this Agreement and clause 5.3 of the Corporate Guarantee at all times throughout the Security Period; and 

  

	 	(b)	the Agent has advised the Borrowers and the Corporate Guarantor in writing that such plan is in all respects acceptable and satisfactory to the Agent in its absolute
and unfettered discretion and the Borrowers or any other persons have complied in full with any terms imposed by the Agent in its absolute and unfettered discretion as a condition to accepting such plan;”; 

  

	3.1.19	by amending the words “under clauses 4.2, 4.3, 4.4, 8.2.1 or 12.1” in the first and beginning of the second line of clause 11.1.3 to read “under clauses
4.2, 4.3, 4.4, 8.2.1, 8.4 or 12.1”; and 

  

	3.1.20	by deleting in clause 12.2 of the Principal Agreement the words “any law or any regulation, request or requirement (whether or not having the force of law, but, if
not having the force of law, with which a Bank or, as the case may be, its holding company habitually complies), including (without limitation) those relating to Taxation, capital adequacy, liquidity, reserve assets, cash ratio deposits and special
deposits” and by inserting in their place the words “any Capital Adequacy Law or of compliance by a Bank with any Capital Adequacy Law”. 

  

	3.2	Amendments to Principal Corporate Guarantee 

 The Principal Corporate Guarantee shall with effect on and from the Effective Date be (and it is hereby) amended in accordance with the following provisions (and the Principal Corporate Guarantee (as so
amended) will continue to be binding upon each of the parties hereto upon such terms as so amended): 
  

	3.2.1	by deleting clauses 4.2.7(b) and 4.2.7(c) in their entirety and by inserting a “.” instead of the “;” at the end of the remaining clause 4.2.7(a);

  

	3.2.2	by adding after the words “and operating vessels” in the penultimate line of clause 5.2.1 of the Principal Corporate Guarantee the words “as well as of
making other investments in the shipping and oil gas industry”; 

  

 8 

	3.2.3	by inserting at the end of clause 5.2.2 of the Principal Corporate Guarantee the following words: 

 “save for (a) the reorganisation and spin-off of the drillship activities of the Group into another company and the subsequent
listing of that company and such business on NYSE or NASDAQ and (b) the redomiciliation of that company owing such business to the Marshall Islands, in each case as described and carried out in the manners described and disclosed in writing, by
or on behalf of the Guarantor to the Agent prior to the date of the Supplemental Agreement;”; and 
  

	3.2.4	by deleting clause 5.2.6 of the Principal Corporate Guarantee in its entirety and by replacing it with the following new clause 5.2.6: 

  

	 	5.2.6	Share Capital and distribution 

  

	 	(a)	during the period from 19 May 2009 until 19 May 2011, purchase or otherwise acquire for value any shares of its capital or declare, pay or make any cash
dividends or cash distributions to any of its shareholders; and 

  

	 	(b)	from 20 May 2011 and at all times thereafter, purchase or otherwise acquire for value any shares of its capital or declare, pay or make any cash dividends or cash
distributions to any of its shareholders Provided always that the Guarantor may declare, pay or make any cash dividends or cash distributions to any of its shareholders if (i) the aggregate cash dividends or cash distributions in respect
of any financial year do not exceed fifty per cent (50%) of its Net Income for such financial year, (ii) the Guarantor is not in any breach of any of the undertakings expressed to be assumed by it in clause 5.3 and (iii) no other
Event of Default shall have occurred at the time of or would occur as a result of, declaration, payment or making of such cash dividends or cash distributions.”. 

  

	3.3	Continued force and effect 

 Save as amended by this Agreement, the provisions of the Principal Agreement, the Principal Corporate Guarantee and the other Security Documents shall continue in full force and effect and (a) the Principal Agreement and this Agreement
shall be read and construed as one instrument and (b) the Principal Corporate Guarantee and this Agreement shall be read and construed as one instrument. 
  

	4	Representations and warranties 

  

	4.1	Primary representations and warranties 

 Each Relevant Party represents and warrants to the Creditors that: 
  

	4.1.1	Existing representations and warranties 

 the representations and warranties set out in clause 7 of the Principal Agreement and clause 4 of the Principal Corporate Guarantee were true and correct on the date of the Principal Agreement and the Principal Corporate Guarantee,
respectively, and are true and correct, including to the extent that they may have been or shall be amended by this Agreement, as if made at the date of this Agreement with reference to the facts and circumstances existing at such date; 

 

	4.1.2	Corporate power 

 each of the
Relevant Parties has power to execute, deliver and perform its obligations under the Relevant Documents to which it is or is to be a party; all necessary corporate, shareholder and other action has been taken by each of the Relevant Parties to
authorise the execution, delivery and performance of the Relevant Documents to which it is or is to be a party; 
  

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	4.1.3	Binding obligations 

 the
Relevant Documents to which it is or is to be a party constitute valid and legally binding obligations of each of the Relevant Parties enforceable in accordance with their terms; 
  

	4.1.4	No conflict with other obligations 

 the execution, delivery and performance of the Relevant Documents to which it is or is to be a party by each of the Relevant Parties will not (i) contravene any existing law, statute, rule or regulation or any judgment, decree or
permit to which any of the Relevant Parties is subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which any of the Relevant Parties is a party or is
subject or by which any of the Relevant Parties or any of its property is bound or (iii) contravene or conflict with any provision of the constitutional documents of any of the Relevant Parties or (iv) result in the creation or imposition
of or oblige any of the Relevant Parties to create any Encumbrance on any of their undertakings, assets, rights or revenues of any of the Relevant Parties; 
  

	4.1.5	No filings required 

 it is not
necessary to ensure the legality, validity, enforceability or admissibility in evidence of any of the Relevant Documents that they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere
in any Relevant Jurisdiction or that any stamp, registration or similar tax or charge be paid in any Relevant Jurisdiction on or in relation to the Relevant Documents and each of the Relevant Documents is in proper form for its enforcement in the
courts of the Relevant Jurisdiction; 
  

	4.1.6	Choice of law 

 the choice of
English law to govern the Relevant Documents and the submissions by the Relevant Parties to the non-exclusive jurisdiction of the English courts are valid and binding; and 
  

	4.1.7	Consents obtained 

 every
consent, authorisation, licence or approval of, or registration or declaration to, governmental or public bodies or authorities or courts required by any of the Relevant Parties in connection with the execution, delivery, validity, enforceability or
admissibility in evidence of the Relevant Documents to which it is or is to be a party or the performance by each Relevant Party of its obligations under such document has been obtained or made and is in full force and effect and there has been no
default in the observance of any conditions or restrictions (if any) imposed in, or in connection with, any of the same. 
  

	4.2	Repetition of representations and warranties 

 Each of the representations and warranties contained in clause 4.1 of this Agreement, clause 7 of the Principal Agreement (as amended by this Agreement) and clause 4 of the Principal Corporate Guarantee
shall be deemed to be repeated by each Relevant Party on the Effective Date as if made with reference to the facts and circumstances existing on such day. 
  

	5	Conditions 

  

	5.1	Documents and evidence 

 The
agreements and waivers of the Creditors referred to in clause 2 shall be subject to the receipt by the Agent or its duly authorised representative of the documents and evidence specified in schedule 2 in form and substance satisfactory to the Agent.

  

 10 

	5.2	General conditions precedent 

 The agreements and the waivers of the Creditors referred to in clause 2 shall be further subject to: 
  

	5.2.1	the representations and warranties in clause 4 being true and correct on the Effective Date as if each were made with respect to the facts and circumstances existing at
such time; and 

  

	5.2.2	no Default (other than those described in clause 2.1) having occurred and continuing at the time of the Effective Date. 

  

	5.3	Waiver of conditions precedent 

 The conditions specified in this clause 5 are inserted solely for the benefit of the Creditors and may be waived by the Agent in whole or in part with or without conditions. 
  

	6	Relevant Parties’ confirmation 

  

	6.1	Security Documents 

 Each
of the Relevant Parties acknowledges and agrees, for the avoidance of doubt, that: 
  

	6.1.1	each of the Security Documents to which it is a party, and its obligations thereunder, shall remain in full force and effect notwithstanding the amendments made to the
Principal Agreement and the Principal Corporate Guarantee by this Agreement and the waivers and other amendments agreed by the Creditors in this Agreement; and 

  

	6.1.2	with effect from the Effective Date, references to “the Agreement” or “the Loan Agreement” or the “Corporate Guarantee” or the
“Guarantee” in any of the other Security Documents to which it is a party shall henceforth be references to the Principal Agreement and the Principal Corporate Guarantee, respectively, as each amended by this Agreement and, in each case,
as from time to time hereafter amended. 

  

	7	Expenses 

  

	7.1	Expenses 

 The Borrowers
jointly and severally agree to pay to the Agent on a full indemnity basis on demand all expenses (including legal and out-of-pocket expenses) incurred by the Creditors: 
  

	7.1.1	in connection with the negotiation, preparation, execution and, where relevant, registration of the Relevant Documents and of any amendment or extension of, or the
granting of any waiver or consent under, the Relevant Documents; and 

  

	7.1.2	in contemplation of, or otherwise in connection with, the enforcement of, or preservation of any rights under the Relevant Documents or otherwise in respect of the
monies owing and obligations incurred under the Relevant Documents, together with interest at the rate referred to in clause 3.4 of the Principal Agreement from the date on which such expenses were incurred to the date of payment (as well after as
before judgement). 

  

	7.2	Value Added Tax 

 All
expenses payable pursuant to this clause 7 shall be paid together with value added tax or any similar tax (if any) properly chargeable thereon. 
  

 11 

	7.3	Stamp and other duties 

 The Borrowers jointly and severally agree to pay to the Agent on demand all stamp, documentary, registration or other like duties or taxes (including any duties or taxes payable by the Creditors or any of them) imposed on or in connection
with this Agreement and shall indemnify the Creditors against any liability arising by reason of any delay or omission by the Borrowers to pay such duties or taxes. 
  

	8	Miscellaneous and notices 

  

	8.1	Notices 

 The provisions
of clause 17.1 of the Principal Agreement shall extend and apply to the giving or making of notices or demands hereunder as if the same were expressly stated herein and for this purpose any notices to be sent to the Corporate Guarantor or the
Manager shall be sent to the address of the Corporate Guarantor referred to in clause 8.1 of the Principal Corporate Guarantee: 
  

	8.2	Counterparts 

 This
Agreement may be executed in any number of counterparts and by the different parties on separate counterparts, each of which when so executed and delivered shall be an original but all counterparts shall together constitute one and the same
instrument. 
  

	8.3	Joint and several liability 

 Notwithstanding anything to the contrary contained in this Agreement, the agreements, obligations and liabilities of the Borrowers herein contained are joint and several and shall be construed accordingly. Each of the Borrowers agrees and
consents to be bound by this Agreement notwithstanding that the other Borrower which was intended to sign or be bound may not do so or be effectual bound and notwithstanding that this Agreement may be invalid or unenforceable against the other
Borrower whether or not the deficiency is known to the Creditors or any of them. The Banks shall be at liberty to release either of the Borrowers from this Agreement and to compound with or otherwise vary the liability or to grant time and
indulgence to make other arrangements with either of the Borrowers without prejudicing or affecting the rights and remedies of the Creditors or any of them against the other Borrower. 
  

	9	Applicable law 

  

	9.1	Law 

 This Agreement (and
any non-contractual obligation connected with it) is governed by, and shall be construed in accordance with, English law. 
  

	9.2	Submission to jurisdiction 

 Each of the Relevant Parties agrees, for the benefit of each Creditor, that any legal action or proceedings arising out of or in connection with this Agreement (or any non-contractual obligation connected with it) against any of their
assets may be brought in the English courts. Each of the Relevant Parties irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers Ince & Co. at present of International
House, 1 St. Katharine’s Way, London E1W 1AY, England to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not
be construed so as to) limit the right of any Creditor to take proceedings against any of the Relevant Parties in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking
of proceedings in any other jurisdiction, whether concurrently or not. Each of the Relevant Parties further agrees that only the courts of England and not those of any other state shall have jurisdiction to determine any claim which any of the
Relevant Parties may have against any Creditor arising out of or in connection with this Agreement (or any non-contractual obligation connected with it). 
  

 12 

	9.3	Contracts (Rights of Third Parties) Act 1999 

 No term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement. 
 IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed as a deed on the date first above written.

  

 13 

 Schedule 1 
 The Banks 
  

							
		 	DnB NOR Bank ASA	 	20 St. Dunstan’s Hill	 	
		 		 	London EC3R 8HY	 	
		 		 	England	 	
				
		 		 	Fax no:  +44 207 626 5956	 	
		 		 	Att:        Shipping Department	 	

  

 14 

 Schedule 2 
 Documents and evidence required as conditions precedent 
 (referred to in clause 5.1) 
  

	1	Corporate authorisations 

 In relation to each of the Relevant Parties: 
  

	 	(a)	Constitutional documents 

 copies certified by an officer of each of the Relevant Parties, as a true, complete and up to date copies, of all documents which contain or establish or relate to the constitution of that party or a secretary’s certificate confirming
that there have been no changes or amendments to the constitutional documents certified copies of which were previously delivered to the Agent pursuant to the Principal Agreement; 
  

	 	(b)	Resolutions 

 copies of
resolutions of each of its board of directors and its shareholders approving this Agreement and the other Relevant Documents and the terms and conditions hereof and thereof and authorising the signature, delivery and performance of each such
party’s obligations thereunder, certified (in a certificate dated no earlier than five (5) Banking Days prior to the date of this Agreement) by an officer of such Relevant Party as: 
  

	 	(1)	being true and correct; 

  

	 	(2)	being duly passed at meetings of the directors of such Relevant Party and, as the case may be, of the shareholders of such Relevant Party each duly convened and held;

  

	 	(3)	not having been amended, modified or revoked; and 

  

	 	(4)	being in full force and effect, 

 together with originals or certified copies of any powers of attorney issued by any party pursuant to such resolutions; and 
  

	 	(c)	Certificate of incumbency 

 a list of directors and officers of each Relevant Party specifying the names and positions of such persons, certified (in a certificate dated no earlier than five (5) Banking Days prior to the date of this Agreement) by an officer of
such Relevant Party to be true, complete and up to date; 
  

	2	Consents 

 a certificate
(dated no earlier than five (5) Banking Days prior to the date of this Agreement) from an officer of each of the Relevant Parties stating that no consents, authorisations, licences or approvals are necessary for such Relevant Party to
authorise, or are required by each of the Relevant Parties or any other party (other than the Creditors) in connection with, the execution, delivery, and performance of this Agreement and the other Relevant Documents to which such Relevant Party is
or is to be a party; 
  

 15 

	3	Relevant Documents 

 the
Charter Assignments and any notices of assignment required thereunder, each by the relevant Borrower duly executed; 
  

	4	Charters 

 a copy of each
Charter; 
  

	5	Legal opinions 

 such
legal opinions in relation to the laws of the Republic of the Marshall Islands and the laws of the Republic of Liberia and any other legal opinions as the Agent shall in its absolute discretion require; and 
  

	6	Process agent 

 a letter
from each Relevant Party’s agent for receipt of service of proceedings accepting its appointment under this Agreement and the other Relevant Documents to which such Relevant Party is or is to be a party as such Relevant Party’s process
agent. 
  

 16 

 Schedule 3 
 Form of Charter Assignment 
  

 17 

 Private & Confidential 
 Dated     June 2009 
 TEAM-UP OWNING COMPANY LIMITED 
 and 
 DNB NOR BANK ASA 
  
  
 CHARTER
ASSIGNMENT 
 m.v. Saldanha 
  

 

 

 

 Contents 
  

			
	Clause	  	Page
		
	 1       Definitions
	  	2
		
	 2       Warranty
	  	4
		
	 3       Assignment and application of money
	  	4
		
	 4       Undertakings
	  	5
		
	 5       Continuing security
	  	6
		
	 6       Powers of Mortgagee
	  	7
		
	 7       Attorney
	  	7
		
	 8       Further assurance
	  	8
		
	 9       Notices
	  	8
		
	 10     Law, jurisdiction and other provisions
	  	8
		
	Schedule 1 Forms of Notice of Assignment of Charter	  	10

 THIS ASSIGNMENT is made the      day of June 2009 BETWEEN: 
  

	1	TEAM-UP OWNING COMPANY LIMITED, a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Marshall Islands MH96960 (the “Owner”); and 

  

	2	DNB NOR BANK ASA, a company incorporated in Norway with its registered office at Stranden 21, P.O. Box 1171 Sentrum N-0107 Oslo, Norway, acting for the purposes
of this Assignment through its branch at 20 St. Dunstan’s Hill, London EC3R 8HY, England as security agent and trustee for and on behalf of the other Secured Creditors (as this term is defined herebelow) (the “Mortgagee”).

 WHEREAS: 
  

	(A)	by a charterparty contract dated 25 June 2008 made between (1) Cosco Bulk Carriers Co. Ltd. of the People’s Republic of China (the
“Charterer”) and (2) the Owner, which contract is on the date of this Agreement, incorporated in a recapitulation email dated 25 June 2008 addressed by Genoa Sea Brokers SPA the Charterer’s brokers acting on behalf of
the Charterer to the Owner (the “Charter”), the Owner agreed to let to the Charterer, and the Charterer agreed to take on time charter, for the period and upon the terms and conditions therein mentioned, the Ship (as hereinafter
defined); 

  

	(B)	by a loan agreement dated 4 December 2007 as amended from time to time (the “Loan Agreement”) and made between (1) the Owner and Orpheus
Owning Company Limited as joint and several borrowers (therein and herein together referred to as the “Borrowers”), (2) DnB NOR Bank ASA as arranger, (3) DnB NOR Bank ASA as agent (in such capacity the
“Agent”), security agent, swap provider (in such capacity the “Swap Provider”) and account bank and (4) the banks and financial institutions referred to in schedule 1 thereto as lenders (the
“Banks” and, together with the Agent and the Swap Provider, the “Secured Creditors”), the Banks agreed (inter alia) to advance by way of loan to the Borrowers, jointly and severally, upon the terms and conditions
therein contained, the principal sum of up to One hundred and one million one hundred and fifty thousand Dollars ($101,150,000); 

  

	(C)	by a 1992 ISDA Master Agreement (including the schedule thereto) dated as of 4 December 2007 (the “Master Swap Agreement”) and made between the
Borrowers and the Swap Provider, the Swap Provider agreed the terms and conditions upon which it would enter into (inter alia) interest rate swap or other derivative transactions with the Borrowers in respect of the Loan, whether in whole or in part
as the case may be from time to time; 

  

	(D)	pursuant to clause 16.14 of the Loan Agreement, each of the Secured Creditors has appointed the Mortgagee as its security agent and trustee and pursuant to a Trust Deed
dated 4 December 2007 and executed by the Mortgagee (as trustee) in favour of the Secured Creditors, the Mortgagee agreed to hold, receive, administer and enforce this Assignment as security agent and trustee for and on behalf of itself and the
Secured Creditors; 

  

	(E)	pursuant to the Loan Agreement, the Owner has executed in favour of the Mortgagee a first priority statutory Maltese mortgage dated 13 December 2007 (the
“Mortgage”) on the motor vessel Saldanha documented in the name of the Owner under the laws and flag of Malta under Official Number 9268992 (the “Ship”) as security for the payment by the Owner of the
Outstanding Indebtedness (as that expression is defined in the Deed of Covenant) (as defined below); 

  

	(F)	pursuant to the Loan Agreement, the Owner has executed in favour of the Mortgagee a deed of covenant dated 13 December 2007 (the “Deed of
Covenant”) collateral to the Mortgage, whereby the Owner has assigned and agreed to assign to the Mortgagee the Earnings and Insurances of, and any Requisition Compensation for, the Ship as security for the payment by the Owner of the
Outstanding Indebtedness; and 

  

 1 

	(G)	this Assignment is a charter assignment referred to in clause 8.1.14 of the Loan Agreement in respect of the Ship and is supplemental to the Loan Agreement, the Master
Swap Agreement, the Mortgage and the Deed of Covenant and to the security thereby created and shall nonetheless continue in full force and effect notwithstanding any discharge of the Mortgage. 

 NOW THIS ASSIGNMENT WITNESSES AND IT IS HEREBY AGREED as follows: 
  

	1	Definitions 

  

	1.1	Defined expressions 

 Words and expressions defined in the Deed of Covenant (whether expressly or by reference to the Mortgage and/or the Loan Agreement) shall, unless otherwise defined in this Assignment, or the context otherwise requires, have the same
meanings when used in this Assignment. 
  

	1.2	Definitions 

 In this
Assignment, unless the context otherwise requires: 
 “Agent” includes its successors in title and its
replacements; 
 “Assigned Property” means all of the Owner’s right, title and interest in and to:

  

	 	(a)	the Charter Earnings; and 

  

	 	(b)	all other Charter Rights; 

 “Banks” includes their successors in title and Transferee Banks; “Charter” means the charterparty referred to in Recital (A) hereto; 
 “Charter Earnings” means all money whatsoever payable by the Charterer to the Owner under or pursuant to the Charter and/or
any guarantee, security or other assurance given to the Owner at any time in respect of the Charterer’s obligations under or pursuant to the Charter including (but without prejudice to the generality of the foregoing) all claims for damages in
respect of any breach by the Charterer of the Charter; 
 “Charterer” includes the successors in title of the
Charterer; 
 “Charter Rights” means all of the rights of the Owner under or pursuant to the Charter and any
guarantee, security or other assurance given to the Owner at any time in respect of the Charterer’s obligations under or pursuant to the Charter including (without limitation) the right to receive the Charter Earnings; 
 “Collateral Instrument” means any note, bill of exchange, certificate of deposit and other negotiable and non-negotiable
instruments, guarantees, indemnities and other assurances against financial loss and any other documents or instruments which contain or evidence an obligation (with or without security) to pay, discharge or be responsible directly or indirectly
for, any indebtedness or liabilities of the Borrowers or either of them or any other person liable under the Security Documents and includes any documents or instruments creating or evidencing a mortgage, charge (whether fixed or floating), pledge,
lien, hypothecation, assignment, trust arrangement or security interest of any kind; 
 “Loan” means the
aggregate principal amount advanced by the Banks to the Borrowers pursuant to the Loan Agreement or, as the context may require, the amount thereof at any time outstanding; 
 “Loan Agreement” means the agreement dated 4 December 2007 mentioned in Recital (B) hereto as amended and
supplemented from time to time; 
  

 2 

 “Master Swap Agreement” means the agreement referred to in recital
(B) hereto; 
 “Master Swap Agreement Liabilities” means at any relevant time all liabilities, actual or
contingent, present or future, owing by the Borrowers to the Swap Provider under the Master Swap Agreement; 
 “Mortgagee” includes its successors in title and its replacements; 
 “Operating
Account” means an interest bearing Dollar account of the Owner opened by the Owner with the Account Bank and with account number 63519002 and includes any sub-accounts thereof and any other account designated in writing by the Mortgagee to
be an Operating Account for the purposes of this Assignment; 
 “Outstanding Indebtedness” means the aggregate
of the Loan and interest accrued and accruing thereon, the Master Swap Agreement Liabilities, the Expenses and all other sums of money from time to time owing to the Mortgagee, the Secured Creditors or any of them, whether actually or contingently,
under the Loan Agreement and the other Security Documents or any of them; 
 “Owner” includes its successors in
title; 
 “Security Documents” means the Loan Agreement, the Master Swap Agreement, the Mortgage, the Deed of
Covenant, this Assignment and any other document which is defined as such in the Loan Agreement and such other documents as may have been or may hereafter be executed to guarantee and/or secure all or any part of the Loan, interest thereon, the
Master Swap Agreement Liabilities, and other moneys from time to time owing by the Borrowers or either of them or any other Security Parties pursuant to the Loan Agreement or the Master Swap Agreement or the Security Documents or any of them
(whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement); 
 “Security Party” means the Owner, the other Borrower and any other party who may at any time be a party to any of the Security Documents (other than the Creditors); 
 “Security Period” means the period commencing on the date hereof and terminating upon discharge of the security created by
the Security Documents by payment of all moneys payable thereunder; and 
 “Swap Provider” includes its
successors in title. 
  

	1.3	Headings 

 Clause headings
and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Assignment. 
  

	1.4	Construction of certain terms 

 The provisions of clause 1.6 of the Deed of Covenant shall apply mutatis mutandis to this Assignment as if set out herein and as if references therein to “this Deed” were references to this Assignment. 
  

	1.5	Conflict with Deed of Covenant 

 This Assignment shall be read together with the Deed of Covenant but in case of any conflict between the two instruments the provisions of the Deed of Covenant shall prevail. 
  

 3 

	2	Warranty 

 The Owner
hereby represents and warrants to the Mortgagee that: 
  

	2.1	the Owner is the sole, legal and beneficial owner of the whole of the Assigned Property free from all Encumbrances and other interests and rights of every kind;

  

	2.2	the copy of the Charter delivered by the Owner to the Mortgagee is a true and complete copy of such document (in the form of the recapitulation e-mail referred to in
Recital (A)), the Charter constitutes the valid and binding obligations of the parties thereto enforceable in accordance with its terms, is in full force and effect and there have been no amendments or variations thereof or defaults thereunder;

  

	2.3	the Ship has been delivered to and accepted by the Charterer for service under the Charter; and 

  

	2.4	there are no commissions, rebates, premiums or other payments in connection with the Charter other than as disclosed by the Owner to the Mortgagee in writing prior to
the date hereof. 

  

	3	Assignment and application of money 

  

	3.1	Assignment 

 By way of
security for the Outstanding Indebtedness, the Owner with full title guarantee hereby assigns and agrees to assign to the Mortgagee absolutely all its rights title and interest to the Assigned Property and all its benefits and interests present and
future therein Provided however that the Charter Earnings shall be payable to the Operating Account until such time as an Event of Default shall occur and be continuing and the Mortgagee shall direct to the contrary whereupon the Owner shall
forthwith, and the Mortgagee may at any time thereafter, instruct the persons from whom the Charter Earnings are then payable to pay the same to the Mortgagee or as it may direct and any Charter Earnings then in the hands of the Owner’s brokers
or other agents shall be deemed to have been received by them for the use and on behalf of the Mortgagee. 
  

	3.2	Notice 

 The Owner hereby
covenants and undertakes with the Mortgagee that it will forthwith after the Mortgagee’s demand following an Event of Default give written notice of the assignment contained in clause 3.1 to the Charterer in the form set out in schedule 1 and
will procure that within seven (7) days after the giving of such notice the Charterer delivers to the Mortgagee a copy thereof with the acknowledgement thereof set out in such schedule duly executed by the Charterer. 
  

	3.3	Application 

 All moneys
received by the Mortgagee in respect of the Assigned Property shall be held and applied by it in accordance with the terms of clauses 8.1 and 8.3 of the Deed of Covenant. 
  

	3.4	Shortfalls 

 In the event
that the balance referred to in clause 8.1 of the Deed of Covenant is insufficient to pay in full the whole of the Outstanding Indebtedness, the Mortgagee shall be entitled to collect the shortfall from the Owner or any other person liable for the
time being therefor. 
  

	3.5	Use of Owner’s name 

 The Owner covenants and undertakes with the Mortgagee to do or permit to be done each and every act or thing which the Mortgagee may from time to time require to be done for the purpose of enforcing the Mortgagee’s rights under this
Assignment and to allow its name to be used as and when required by the Mortgagee for that purpose in each case following an Event of Default. 
  

 4 

	3.6	Reassignment 

 Upon
payment and discharge in full to the satisfaction of the Mortgagee of the Outstanding Indebtedness the Mortgagee (acting on the instructions of the Majority Banks) shall, at the request and cost of the Owner, re-assign the Assigned Property to the
Owner or as it may direct. 
  

	4	Undertakings 

  

	4.1	Covenants and undertakings 

 The Owner hereby covenants and undertakes with the Mortgagee that throughout the Security Period: 
  

	4.1.1	Negative undertakings 

 it will
not, without the previous written consent of the Mortgagee (acting on the instructions of the Majority Banks): 
  

	 	(a)	Variations 

 agree to any
variation of the charterhire payable under the Charter or the duration of the Charter or any other material variation of the Charter; or 
  

	 	(b)	Releases and waivers 

 release
the Charterer from any of the Charterer’s obligations under the Charter or waive any breach of the Charterer’s obligations thereunder or consent to any such act or omission of the Charterer as would otherwise constitute such breach;

  

	 	(c)	Termination or extension 

 terminate the Charter for any reason whatsoever; or 
  

	 	(d)	Consents 

 grant any consent
which may be required from the Owner under the Charter; 
  

	4.1.2	Performance of Charter obligations 

 it will perform its obligations under the Charter and use its best endeavours to procure that the Charterer shall perform its obligations under the Charter; 
  

	4.1.3	Information 

 it will supply to
the Mortgagee all information, accounts and records that may be necessary or of assistance to enable the Mortgagee to verify the amount of all payments of charterhire and any other amount payable under the Charter; and 
  

	4.1.4	Original Charter 

 it will
provide the Mortgagee with a certified true copy of the executed Charter as soon as it becomes available in the form of a charterparty and with an original executed Charter forthwith following the Mortgagee’s demand. 
  

	4.2	Withdrawal 

 The Owner
hereby covenants and undertakes with the Mortgagee that, in the event of any payment of charterhire or other amount owing to the Owner not being made by the Charterer on the due date (as such due date is determined pursuant to the terms of the
Charter) and the

  

 5 

 
Owner has sent to the Charterer notice that it has failed to make proper and timely payment and, as a result the Owner has the right to withdraw the Ship from service of the Charterer under the
Charter, the Owner will, if so directed by the Mortgagee, exercise such right at such time and in such manner as the Mortgagee shall so direct. 
  

	5	Continuing security 

  

	5.1	Continuing security 

 The
security created by this Assignment shall: 
  

	5.1.1	be held by the Mortgagee as a continuing security for the payment of the Outstanding Indebtedness and the performance and observance of and compliance with all of the
covenants, terms and conditions in the Security Documents contained, express or implied and that the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby secured (or by
any settlement of accounts between the Owner or any other person who may be liable to the Mortgagee and/or the Secured Creditors in respect of the Outstanding Indebtedness or any part thereof and the Mortgagee and/or the Secured Creditors or any of
them); 

  

	5.1.2	be in addition to, and shall not in any way prejudice or affect and may be enforced by the Mortgagee without prior recourse to the security created by any of the other
Security Documents or by any present or future Collateral Instruments, right or remedy held by or available to the Mortgagee and/or the Secured Creditors or any right or remedy of the Mortgagee and/or the Secured Creditors thereunder; and

  

	5.1.3	not in any way be prejudiced or affected by the existence of any of the other Security Documents or any such Collateral Instrument, rights or remedies or by the same
becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by the Mortgagee dealing with, exchanging, varying or failing to perfect or enforce any of the same or giving time for payment or performance or indulgence or
compounding with any person liable. 

  

	5.2	Rights additional 

 All
the rights, remedies and powers vested in the Mortgagee hereunder shall be an addition to and not a limitation of any and every other right, power or remedy vested in the Mortgagee and/or the Secured Creditors or any of them under the Loan
Agreement, this Assignment, the other Security Documents or any Collateral Instrument or at law and that all the powers so vested in the Mortgagee and/or the Secured Creditors may be exercised from time to time and as often as the Mortgagee and/or
the Secured Creditors may deem expedient. 
  

	5.3	No enquiry 

 The Mortgagee
shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it under the Mortgage and/or this Assignment or to make any claim or take any action to collect any moneys hereby assigned or to enforce any rights
or benefits hereby assigned to the Mortgagee or to which the Mortgagee may at any time be entitled under the Mortgage and/or this Assignment. 
  

	5.4	Obligations of the Owner 

 The Owner shall remain liable to perform all the obligations assumed by it in relation to the Assigned Property and the Mortgagee shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in
the event of any failure by the Owner to perform its obligations in respect thereof. 
  

 6 

	5.5	Discharge of Mortgage 

 Notwithstanding that this Assignment is expressed to be supplemental to the Loan Agreement, the Master Swap Agreement and the Mortgage, it shall continue in full force and effect after any discharge of the Loan Agreement, the Master Swap
Agreement or the Mortgage. 
  

	6	Powers of Mortgagee 

  

	6.1	Protective action 

 The
provisions of clause 6.1 of the Deed of Covenant shall apply mutatis mutandis to this Assignment as if set out herein and as if references therein to “this Deed” were references to this Assignment. 
  

	6.2	Powers on Event of Default 

 Upon the happening of an Event of Default, the Mortgagee shall become forthwith entitled, as and when it may see fit, to exercise in relation to the Assigned Property or any part thereof all or any of the rights, powers and remedies
possessed by it as assignee and/or chargee of the Assigned Property (whether at law, by virtue of this Assignment or otherwise) and in particular (without limiting the generality of the foregoing): 
  

	6.2.1	to collect, recover, compromise and give a good discharge for, all claims then outstanding or thereafter arising in respect of the Charter and/or the property hereby
assigned or any part thereof, and to take over or institute (if necessary using the name of the Owner) all such proceedings in connection therewith as the Mortgagee in its absolute discretion thinks fit; 

  

	6.2.2	to discharge, compound, release or compromise claims in respect of the Charter and/or the Assigned Property or any part thereof which have given or may give rise to any
charge or lien or other claim on the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof or which are or may be enforceable by proceedings against the Ship, her Earnings, Insurances or Requisition Compensation or any part
thereof; and 

  

	6.2.3	to recover from the Owner on demand all Expenses incurred or paid by the Mortgagee in connection with the exercise of the powers (or any of them) referred to in this
clause 6.2. 

  

	6.3	Liability of Mortgagee 

 The Mortgagee shall not be liable as mortgagee in possession in respect of any of the Assigned Property to account or be liable for any loss upon realisation or for any neglect or default of any nature whatsoever in connection therewith for
which a mortgagee in possession may be liable as such. 
  

	7	Attorney 

  

	7.1	Appointment 

 By way of
security, the Owner hereby irrevocably appoints the Mortgagee to be its attorney generally for and in the name and on behalf of the Owner, and as the act and deed or otherwise of the Owner to execute, seal and deliver and otherwise perfect and do
all such deeds, assurances, agreements, instruments, acts and things (including, without limiting the generality of the foregoing, to ask, require, demand, receive, compound and give acquittance for any and all moneys and claims for moneys due and
to become due under or arising out of the Charter, to endorse any cheque or other instrument or orders in connection therewith and to file any claims or take any action or institute any proceedings which the Mortgagee may deem to be necessary or
advisable and otherwise to do any and all things which the Owner itself could do in relation to the Assigned Property) which may be required for the full exercise of all or any of the rights, powers or remedies conferred hereby or which may be
deemed proper in or in connection with all or any of the purposes aforesaid. The power hereby conferred shall be a general power of

  

 7 

 
attorney under the Powers of Attorney Act 1971, and the Owner ratifies and confirms, and agrees to ratify and confirm, any deed, assurance, agreement, instrument, act or thing which the Mortgagee
may execute or do pursuant thereto Provided always that such power shall not be exercisable by or on behalf of the Mortgagee until the happening of any Event of Default. 
  

	7.2	Exercise of power 

 The
exercise of such power by or on behalf of the Mortgagee shall not put any person dealing with the Mortgagee upon any enquiry as to whether any Event of Default has happened, nor shall such person be in any way affected by notice that no such event
has happened, and the exercise by the Mortgagee of such power shall be conclusive evidence of its right to exercise the same. 
  

	7.3	Filings 

 The Owner hereby
irrevocably appoints the Mortgagee to be its attorney in its name and on its behalf and as its act and deed or otherwise, to agree the form of and to execute and do all deeds, instrument, acts and things in order to file, record, register or enrol
this Assignment and/or any notice and/or acknowledgement of the assignment herein contained in any court, public office or elsewhere which the Mortgagee may in its discretion consider necessary or advisable, now or in the future, to ensure the
legality, validity, enforceability or admissibility in evidence thereof and any other assurance, document, act or thing required to be executed by the Owner pursuant to clause 8. 
  

	8	Further assurance 

 The
Owner hereby further undertakes at its own expense from time to time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the opinion of the Mortgagee may be necessary or desirable for
the purpose of more effectually assigning, mortgaging and charging the Assigned Property or perfecting the security constituted or intended to be constituted by this Assignment. 
  

	9	Notices 

 The provisions
of clause 17.1 of the Loan Agreement shall apply mutatis mutandis in respect of any certificate, notice, demand or other communication given or made under this Assignment as if set out herein and as if references therein to the “Borrowers or
either of them” and “the Security Agent” were references to the Owner and the Mortgagee, respectively. 
  

	10	Law, jurisdiction and other provisions 

  

	10.1	Law 

 This Assignment and
any non-contractual obligations in connection with this Assignment are governed by, and shall be construed in accordance with, English law. 
  

	10.2	Submission to jurisdiction 

 For the benefit of the Mortgagee, the parties hereto irrevocably agree that any legal action or proceedings in connection with this Assignment (including any non-contractual obligations in connection with this Assignment) may be brought in
the English courts or in the courts of any other country chosen by the Mortgagee, each of which shall have jurisdiction to settle any disputes arising out of or in connection with this Assignment (including any non-contractual obligations in
connection with this Assignment). The Owner irrevocably and unconditionally submits to the jurisdiction of the English courts and the courts of any country chosen by the Mortgagee and irrevocably designates, appoints and empowers Ince & Co.
at present of International House, 1 St. Katharine’s Way, London E1W 1AY, England to receive, for it and on its behalf, service of process issued out of the English courts in any legal action or proceedings arising out of or in connection with
this Assignment (including any non-contractual obligations in connection with this Assignment). The submission to such jurisdiction shall not (and shall not be

  

 8 

 
construed so as to) limit the right of the Mortgagee to take proceedings against the Owner in any other court of competent jurisdiction nor shall the taking of proceedings by the Mortgagee in any
one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. The parties further agree that only the courts of England and not those of any other State shall have jurisdiction to determine any
claim which the Owner may have against the Mortgagee arising out of, or in connection with, this Assignment (including any non-contractual obligations in connection with this Assignment). 
  

	10.3	Counterparts 

 This
Assignment may be entered into in the form of two counterparts, each executed by one of the parties, and provided all the parties shall so execute this Assignment, each of the executed counterparts, when duly exchanged or delivered, shall be deemed
to be an original but, taken together, they shall constitute one instrument. 
  

	10.4	English language 

 All
certificates, instruments and other documents to be delivered under or supplied in connection with this Assignment or the Charter shall be in the English language or shall be accompanied by a certified English translation upon which the recipient
shall be entitled to rely. 
  

	10.5	Severability of provisions 

 Each of the provisions of this Assignment are severable and distinct from the others and if at any time one or more of such provisions is or becomes invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Assignment shall not in any way be affected or impaired thereby. 
  

	10.6	Contracts (Rights of Third Parties) Act 1999 

 No term of this Assignment is enforceable under the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Assignment. 
 IN WITNESS whereof this Assignment has been duly executed as a deed the day and year first above written. 
  

 9 

 Schedule 1 
 Forms of Notice of Assignment of Charter 
  

	To:	Cosco Bulk Carriers Co. Ltd. 

 People’s Republic of China 
 m.v. Saldanha 
 We refer to the charterparty contract dated 25 June 2008 made between (1) you, Cosco Bulk Carriers Co. Ltd. of the People’s Republic of China (the “Charterer”) and
(2) us, Team-Up Owning Company Limited of the Marshall Islands (the “Owner”), which contract is on the date of this Agreement, incorporated in a recapitulation email dated 25 June 2008 addressed by Genoa Sea Brokers SPA
the Charterer’s brokers acting on behalf of the Charterer to the Owner, whereby we agreed to let and you agreed to take on time charter, for the period and upon the terms and conditions therein mentioned, the motor vessel Saldanha, registered
in our name under the flag of Malta (the “Ship”) (the “Charter”). 
 NOW WE HEREBY GIVE YOU NOTICE: 

  

	1	that by an Assignment dated [—] 2009 (the “Assignment”) made between us and DnB NOR Bank ASA of 20
St. Dunstan’s Hill, London EC3R 8HY, England (the “Assignee”) as security agent and trustee for certain banks and financial institutions, we have assigned to the Assignee all our rights title and interest to and in any moneys
whatsoever payable to us under the Charter and all other rights and benefits whatsoever accruing to us under the Charter including (but without prejudice to the generality of the foregoing) all claims for damages in respect of any breach by you of
the Charter; 

  

	2	that you are hereby irrevocably authorised and instructed to pay such moneys as aforesaid to our bank account with account number 63519002 held with the Assignee or to
such other account as the Assignee may from time to time direct; and 

  

	3	that the said Assignment includes provisions that no variations shall be made to the charterhire payable under the Charter or the duration of the Charter or any other
material variation of the Charter (nor shall you be released from your obligations thereunder) without the previous written consent of the Assignee and we shall remain liable to perform all our obligations under the Charter and the Assignee shall be
under no obligation of any kind whatsoever in respect thereof. 

 The authority and instructions herein contained cannot be
revoked or varied by us without the consent of the Assignee. 
 This letter and any non-contractual obligations in connection with this letter
are governed by, and shall be construed in accordance with, English law. 
  

	
	
	  
	For and on behalf of
	TEAM-UP OWNING COMPANY LIMITED

 Dated: [—] 
  

 10 

 Form of Charterer’s Consent and Agreement 
 (on duplicate) 
 To: DnB NOR Bank ASA 

To: Team-Up Owning Company Limited 
 We
acknowledge receipt of the notice set out above and consent to the assignment referred to therein and, in consideration of US$10 and other good and valuable consideration (the receipt and adequacy of which we hereby acknowledge), we hereby undertake
with, and confirm to, the Assignee as follows: 
  

	(a)	to pay all amounts due from us under the Charter in full in Dollars (and without any set-off or counterclaim whatsoever and free and clear of any deductions or
withholdings) to your account held with DnB NOR Bank ASA at 20 St. Dunstan’s Hill, London EC3R 8HY, England with account number 63519002 or to the order of the Assignee; 

  

	(b)	to permit the Assignee to enforce all other rights and benefits whatsoever accrued or accruing to the Owner under the Charter and for this purpose to take over or
institute proceedings in respect thereof; 

  

	(c)	not, without the prior written consent of the Assignee to agree, to any variation of the Charter; 

  

	(d)	to perform our obligations under the Charter; and 

  

	(e)	that we have not received any notice of any prior charge, assignment or encumbrance over the Owner’s right, title and interest in and to the Charter.

 This letter and any non-contractual obligations in connection with this letter are governed by, and shall be construed in
accordance with, English law. 
  

			
	 By:
	 	  

		 	for and on behalf of
		 	COSCO BULK CARRIERS CO. LTD.
	
	 Date: [—]

  

 11 

							
	EXECUTED as a DEED	 	)	    		 	
	by	 	)	    		 	
	for and on behalf of	 	)	    	  
	 	
	TEAM-UP OWNING COMPANY LIMITED	 	)	    	Attorney-in-fact	 	
	in the presence of:	 	)	    		 	
				
	  
	 		    		 	
	Witness	 		    		 	
	Name:	 		    		 	
	Address:	 		    		 	
	Occupation:	 		    		 	
				
	EXECUTED as a DEED	 	)	    		 	
	by	 	)	    		 	
	for and on behalf of	 	)	    	  
	 	
	DNB NOR BANK ASA	 	)	    	Attorney-in-fact	 	
	in the presence of:	 	)	    		 	
				
	  
	 		    		 	
	Witness	 		    		 	
	Name:	 		    		 	
	Address:	 		    		 	
	Occupation:	 		    		 	

  

 12 

 Private & Confidential 
 Dated      June 2009 
 ORPHEUS OWNING COMPANY LIMITED 
 and 
 DNB NOR BANK ASA 
  
  
 CHARTER
ASSIGNMENT 
 m.v. Avoca 
  
  

 

 

 Contents 
  

					
	Clause	  	Page
			
	1	  	Definitions	  	2
			
	2	  	Warranty	  	3
			
	3	  	Assignment and application of money	  	4
			
	4	  	Undertakings	  	5
			
	5	  	Continuing security	  	6
			
	6	  	Powers of Mortgagee	  	7
			
	7	  	Attorney	  	7
			
	8	  	Further assurance	  	8
			
	9	  	Notices	  	8
			
	10	  	Law, jurisdiction and other provisions	  	8
		
	Schedule 1 Forms of Notice of Assignment of Charter	  	10

 THIS ASSIGNMENT is made the      day of June 2009 BETWEEN: 
  

	1	ORPHEUS OWNING COMPANY LIMITED, a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Marshall Islands MH96960 (the “Owner”); and 

  

	2	DNB NOR BANK ASA, a company incorporated in Norway with its registered office at Stranden 21, P.O. Box 1171 Sentrum N-0107 Oslo, Norway, acting for the purposes
of this Assignment through its branch at 20 St. Dunstan’s Hill, London EC3R 8HY, England as security agent and trustee for and on behalf of the other Secured Creditors (as this term is defined herebelow) (the “Mortgagee”).

 WHEREAS: 
  

	(A)	by a charterparty contract dated 3 September 2008 made between (1) Cosco Qingdao (Qingdao Ocean Shipping Company, Limited) of the People’s Republic of
China (the “Charterer”) and (2) the Owner, which contract is on the date of this Agreement, incorporated in a recapitulation email dated 3 September 2008 addressed by Simpson Spence & Young the Charterer’s
brokers acting on behalf of the Charterer to the Owner (the “Charter”), the Owner agreed to let to the Charterer, and the Charterer agreed to take on time charter, for the period and upon the terms and conditions therein mentioned,
the Ship (as hereinafter defined); 

  

	(B)	by a loan agreement dated 4 December 2007 as amended from time to time (the “Loan Agreement”) and made between (1) the Owner and Team-Up
Owning Company Limited as joint and several borrowers (therein and herein together referred to as the “Borrowers”), (2) DnB NOR Bank ASA as arranger, (3) DnB NOR Bank ASA as agent (in such capacity the
“Agent”), security agent, swap provider (in such capacity the “Swap Provider”) and account bank and (4) the banks and financial institutions referred to in schedule 1 thereto as lenders (the
“Banks” and, together with the Agent and the Swap Provider, the “Secured Creditors”), the Banks agreed (inter alia) to advance by way of loan to the Borrowers, jointly and severally, upon the terms and conditions
therein contained, the principal sum of up to One hundred and one million one hundred and fifty thousand Dollars ($101,150,000); 

  

	(C)	by a 1992 ISDA Master Agreement (including the schedule thereto) dated as of 4 December 2007 (the “Master Swap Agreement”) and made between the
Borrowers and the Swap Provider, the Swap Provider agreed the terms and conditions upon which it would enter into (inter alia) interest rate swap or other derivative transactions with the Borrowers in respect of the Loan, whether in whole or in part
as the case may be from time to time; 

  

	(D)	pursuant to clause 16.14 of the Loan Agreement, each of the Secured Creditors has appointed the Mortgagee as its security agent and trustee and pursuant to a Trust Deed
dated 4 December 2007 and executed by the Mortgagee (as trustee) in favour of the Secured Creditors, the Mortgagee agreed to hold, receive, administer and enforce this Assignment as security agent and trustee for and on behalf of itself and the
Secured Creditors; 

  

	(E)	pursuant to the Loan Agreement, the Owner has executed in favour of the Mortgagee a first priority statutory Maltese mortgage dated 29 January 2008 (the
“Mortgage”) on the motor vessel Avoca documented in the name of the Owner under the laws and flag of Malta under Official Number 9310446 (the “Ship”) as security for the payment by the Owner of the
Outstanding Indebtedness (as that expression is defined in the Deed of Covenant) (as defined below); 

  

	(F)	pursuant to the Loan Agreement, the Owner has executed in favour of the Mortgagee a deed of covenant dated 29 January 2008 (the “Deed of
Covenant”) collateral to the Mortgage, whereby the Owner has assigned and agreed to assign to the Mortgagee the Earnings and Insurances of, and any Requisition Compensation for, the Ship as security for the payment by the Owner of the
Outstanding Indebtedness; and 

  

	(G)	this Assignment is a charter assignment referred to in clause 8.1.14 of the Loan Agreement in respect of the Ship and is supplemental to the Loan Agreement, the Master
Swap Agreement, the Mortgage and the Deed of Covenant and to the security thereby created and shall nonetheless continue in full force and effect notwithstanding any discharge of the Mortgage. 

  

 1 

 NOW THIS ASSIGNMENT WITNESSES AND IT IS HEREBY AGREED as follows: 
  

	1	Definitions 

  

	1.1	Defined expressions 

 Words and expressions defined in the Deed of Covenant (whether expressly or by reference to the Mortgage and/or the Loan Agreement) shall, unless otherwise defined in this Assignment, or the context otherwise requires, have the same
meanings when used in this Assignment. 
  

	1.2	Definitions 

 In this
Assignment, unless the context otherwise requires: 
 “Agent” includes its successors in title and its
replacements; 
 “Assigned Property” means all of the Owner’s right, title and interest in and to:

  

	 	(a)	the Charter Earnings; and 

  

	 	(b)	all other Charter Rights; 

 “Banks” includes their successors in title and Transferee Banks; 
 “Charter” means
the charterparty referred to in Recital (A) hereto; 
 “Charter Earnings” means all money whatsoever
payable by the Charterer to the Owner under or pursuant to the Charter and/or any guarantee, security or other assurance given to the Owner at any time in respect of the Charterer’s obligations under or pursuant to the Charter including (but
without prejudice to the generality of the foregoing) all claims for damages in respect of any breach by the Charterer of the Charter; 
 “Charterer” includes the successors in title of the Charterer; 
 “Charter Rights”
means all of the rights of the Owner under or pursuant to the Charter and any guarantee, security or other assurance given to the Owner at any time in respect of the Charterer’s obligations under or pursuant to the Charter including (without
limitation) the right to receive the Charter Earnings; 
 “Collateral Instrument” means any note, bill of
exchange, certificate of deposit and other negotiable and non-negotiable instruments, guarantees, indemnities and other assurances against financial loss and any other documents or instruments which contain or evidence an obligation (with or without
security) to pay, discharge or be responsible directly or indirectly for, any indebtedness or liabilities of the Borrowers or either of them or any other person liable under the Security Documents and includes any documents or instruments creating
or evidencing a mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement or security interest of any kind; 
 “Loan” means the aggregate principal amount advanced by the Banks to the Borrowers pursuant to the Loan Agreement or, as the context may require, the amount thereof at any time
outstanding; 
 “Loan Agreement” means the agreement dated 4 December 2007 mentioned in Recital
(B) hereto as amended and supplemented from time to time; 
 “Master Swap Agreement” means the agreement
referred to in recital (B) hereto; 
  

 2 

 “Master Swap Agreement Liabilities” means at any relevant time all
liabilities, actual or contingent, present or future, owing by the Borrowers to the Swap Provider under the Master Swap Agreement; 
 “Mortgagee” includes its successors in title and its replacements; 
 “Operating
Account” means an interest bearing Dollar account of the Owner opened by the Owner with the Account Bank and with account number 63520002 and includes any sub-accounts thereof and any other account designated in writing by the Mortgagee to
be an Operating Account for the purposes of this Assignment; 
 “Outstanding Indebtedness” means the aggregate
of the Loan and interest accrued and accruing thereon, the Master Swap Agreement Liabilities, the Expenses and all other sums of money from time to time owing to the Mortgagee, the Secured Creditors or any of them, whether actually or contingently,
under the Loan Agreement and the other Security Documents or any of them; 
 “Owner” includes its successors in
title; 
 “Security Documents” means the Loan Agreement, the Master Swap Agreement, the Mortgage, the Deed of
Covenant, this Assignment and any other document which is defined as such in the Loan Agreement and such other documents as may have been or may hereafter be executed to guarantee and/or secure all or any part of the Loan, interest thereon, the
Master Swap Agreement Liabilities, and other moneys from time to time owing by the Borrowers or either of them or any other Security Parties pursuant to the Loan Agreement or the Master Swap Agreement or the Security Documents or any of them
(whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement); 
 “Security Party” means the Owner, the other Borrower and any other party who may at any time be a party to any of the Security Documents (other than the Creditors); 
 “Security Period” means the period commencing on the date hereof and terminating upon discharge of the security created by
the Security Documents by payment of all moneys payable thereunder; and 
 “Swap Provider” includes its
successors in title. 
  

	1.3	Headings 

 Clause headings
and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Assignment. 
  

	1.4	Construction of certain terms 

 The provisions of clause 1.6 of the Deed of Covenant shall apply mutatis mutandis to this Assignment as if set out herein and as if references therein to “this Deed” were references to this Assignment. 
  

	1.5	Conflict with Deed of Covenant 

 This Assignment shall be read together with the Deed of Covenant but in case of any conflict between the two instruments the provisions of the Deed of Covenant shall prevail. 
  

	2	Warranty 

 The Owner
hereby represents and warrants to the Mortgagee that: 
  

	2.1	the Owner is the sole, legal and beneficial owner of the whole of the Assigned Property free from all Encumbrances and other interests and rights of every kind;

  

 3 

	2.2	the copy of the Charter delivered by the Owner to the Mortgagee is a true and complete copy of such document (in the form of the recapitulation email referred to in
Recital (A)), the Charter constitutes the valid and binding obligations of the parties thereto enforceable in accordance with its terms, is in full force and effect and there have been no amendments or variations thereof or defaults thereunder;

  

	2.3	the Ship has been delivered to and accepted by the Charterer for service under the Charter; and 

  

	2.4	there are no commissions, rebates, premiums or other payments in connection with the Charter other than as disclosed by the Owner to the Mortgagee in writing prior to
the date hereof. 

  

	3	Assignment and application of money 

  

	3.1	Assignment 

 By way of
security for the Outstanding Indebtedness, the Owner with full title guarantee hereby assigns and agrees to assign to the Mortgagee absolutely all its rights title and interest to the Assigned Property and all its benefits and interests present and
future therein Provided however that the Charter Earnings shall be payable to the Operating Account until such time as an Event of Default shall occur and be continuing and the Mortgagee shall direct to the contrary whereupon the Owner shall
forthwith, and the Mortgagee may at any time thereafter, instruct the persons from whom the Charter Earnings are then payable to pay the same to the Mortgagee or as it may direct and any Charter Earnings then in the hands of the Owner’s brokers
or other agents shall be deemed to have been received by them for the use and on behalf of the Mortgagee. 
  

	3.2	Notice 

 The Owner hereby
covenants and undertakes with the Mortgagee that it will forthwith after the Mortgagee’s demand following an Event of Default give written notice of the assignment contained in clause 3.1 to the Charterer in the form set out in schedule 1 and
will procure that within seven (7) days after the giving of such notice the Charterer delivers to the Mortgagee a copy thereof with the acknowledgement thereof set out in such schedule duly executed by the Charterer. 
  

	3.3	Application 

 All moneys
received by the Mortgagee in respect of the Assigned Property shall be held and applied by it in accordance with the terms of clauses 8.1 and 8.3 of the Deed of Covenant. 
  

	3.4	Shortfalls 

 In the event
that the balance referred to in clause 8.1 of the Deed of Covenant is insufficient to pay in full the whole of the Outstanding Indebtedness, the Mortgagee shall be entitled to collect the shortfall from the Owner or any other person liable for the
time being therefor. 
  

	3.5	Use of Owner’s name 

 The Owner covenants and undertakes with the Mortgagee to do or permit to be done each and every act or thing which the Mortgagee may from time to time require to be done for the purpose of enforcing the Mortgagee’s rights under this
Assignment and to allow its name to be used as and when required by the Mortgagee for that purpose in each case following an Event of Default. 
  

	3.6	Reassignment 

 Upon
payment and discharge in full to the satisfaction of the Mortgagee of the Outstanding Indebtedness the Mortgagee (acting on the instructions of the Majority Banks) shall, at the request and cost of the Owner, re-assign the Assigned Property to the
Owner or as it may direct. 
  

 4 

	4	Undertakings 

  

	4.1	Covenants and undertakings 

 The Owner hereby covenants and undertakes with the Mortgagee that throughout the Security Period: 
  

	4.1.1	Negative undertakings 

 it will
not, without the previous written consent of the Mortgagee (acting on the instructions of the Majority Banks): 
  

	 	(a)	Variations 

 agree to any
variation of the charterhire payable under the Charter of the duration of the Charter or any other material variation of the Charter; or 
  

	 	(b)	Releases and waivers 

 release
the Charterer from any of the Charterer’s obligations under the Charter or waive any breach of the Charterer’s obligations thereunder or consent to any such act or omission of the Charterer as would otherwise constitute such breach;

  

	 	(c)	Termination or extension 

 terminate the Charter for any reason whatsoever; or 
  

	 	(d)	Consents 

 grant any consent
which may be required from the Owner under the Charter; 
  

	4.1.2	Performance of Charter obligations 

 it will perform its obligations under the Charter and use its best endeavours to procure that the Charterer shall perform its obligations under the Charter; 
  

	4.1.3	Information 

 it will supply to
the Mortgagee all information, accounts and records that may be necessary or of assistance to enable the Mortgagee to verify the amount of all payments of charterhire and any other amount payable under the Charter; and 
  

	4.1.4	Original Charter 

 it will
provide the Mortgagee with a certified true copy of the executed Charter as soon as it becomes available in the form of a charterparty and with an original executed Charter forthwith following the Mortgagee’s demand. 
  

	4.2	Withdrawal 

 The Owner
hereby covenants and undertakes with the Mortgagee that, in the event of any payment of charterhire or other amount owing to the Owner not being made by the Charterer on the due date (as such due date is determined pursuant to the terms of the
Charter) and the Owner has sent to the Charterer notice that it has failed to make proper and timely payment and, as a result the Owner has the right to withdraw the Ship from service of the Charterer under the Charter, the Owner will, if so
directed by the Mortgagee, exercise such right at such time and in such manner as the Mortgagee shall so direct. 
  

 5 

	5	Continuing security 

  

	5.1	Continuing security 

 The
security created by this Assignment shall: 
  

	5.1.1	be held by the Mortgagee as a continuing security for the payment of the Outstanding Indebtedness and the performance and observance of and compliance with all of the
covenants, terms and conditions in the Security Documents contained, express or implied and that the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby secured (or by
any settlement of accounts between the Owner or any other person who may be liable to the Mortgagee and/or the Secured Creditors in respect of the Outstanding Indebtedness or any part thereof and the Mortgagee and/or the Secured Creditors or any of
them); 

  

	5.1.2	be in addition to, and shall not in any way prejudice or affect and may be enforced by the Mortgagee without prior recourse to the security created by any of the other
Security Documents or by any present or future Collateral Instruments, right or remedy held by or available to the Mortgagee and/or the Secured Creditors or any right or remedy of the Mortgagee and/or the Secured Creditors thereunder; and

  

	5.1.3	not in any way be prejudiced or affected by the existence of any of the other Security Documents or any such Collateral Instrument, rights or remedies or by the same
becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by the Mortgagee dealing with, exchanging, varying or failing to perfect or enforce any of the same or giving time for payment or performance or indulgence or
compounding with any person liable. 

  

	5.2	Rights additional 

 All
the rights, remedies and powers vested in the Mortgagee hereunder shall be an addition to and not a limitation of any and every other right, power or remedy vested in the Mortgagee and/or the Secured Creditors or any of them under the Loan
Agreement, this Assignment, the other Security Documents or any Collateral Instrument or at law and that all the powers so vested in the Mortgagee and/or the Secured Creditors may be exercised from time to time and as often as the Mortgagee and/or
the Secured Creditors may deem expedient. 
  

	5.3	No enquiry 

 The Mortgagee
shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it under the Mortgage and/or this Assignment or to make any claim or take any action to collect any moneys hereby assigned or to enforce any rights
or benefits hereby assigned to the Mortgagee or to which the Mortgagee may at any time be entitled under the Mortgage and/or this Assignment. 
  

	5.4	Obligations of the Owner 

 The Owner shall remain liable to perform all the obligations assumed by it in relation to the Assigned Property and the Mortgagee shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in
the event of any failure by the Owner to perform its obligations in respect thereof. 
  

	5.5	Discharge of Mortgage 

 Notwithstanding that this Assignment is expressed to be supplemental to the Loan Agreement, the Master Swap Agreement and the Mortgage, it shall continue in full force and effect after any discharge of the Loan Agreement, the Master Swap
Agreement or the Mortgage. 
  

 6 

	6	Powers of Mortgagee 

  

	6.1	Protective action 

 The
provisions of clause 6.1 of the Deed of Covenant shall apply mutatis mutandis to this Assignment as if set out herein and as if references therein to “this Deed” were references to this Assignment. 
  

	6.2	Powers on Event of Default 

 Upon the happening of an Event of Default, the Mortgagee shall become forthwith entitled, as and when it may see fit, to exercise in relation to the Assigned Property or any part thereof all or any of the rights, powers and remedies
possessed by it as assignee and/or chargee of the Assigned Property (whether at law, by virtue of this Assignment or otherwise) and in particular (without limiting the generality of the foregoing): 
  

	6.2.1	to collect, recover, compromise and give a good discharge for, all claims then outstanding or thereafter arising in respect of the Charter and/or the property hereby
assigned or any part thereof, and to take over or institute (if necessary using the name of the Owner) all such proceedings in connection therewith as the Mortgagee in its absolute discretion thinks fit; 

  

	6.2.2	to discharge, compound, release or compromise claims in respect of the Charter and/or the Assigned Property or any part thereof which have given or may give rise to any
charge or lien or other claim on the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof or which are or may be enforceable by proceedings against the Ship, her Earnings, Insurances or Requisition Compensation or any part
thereof; and 

  

	6.2.3	to recover from the Owner on demand all Expenses incurred or paid by the Mortgagee in connection with the exercise of the powers (or any of them) referred to in this
clause 6.2. 

  

	6.3	Liability of Mortgagee 

 The Mortgagee shall not be liable as mortgagee in possession in respect of any of the Assigned Property to account or be liable for any loss upon realisation or for any neglect or default of any nature whatsoever in connection therewith for
which a mortgagee in possession may be liable as such. 
  

	7	Attorney 

  

	7.1	Appointment 

 By way of
security, the Owner hereby irrevocably appoints the Mortgagee to be its attorney generally for and in the name and on behalf of the Owner, and as the act and deed or otherwise of the Owner to execute, seal and deliver and otherwise perfect and do
all such deeds, assurances, agreements, instruments, acts and things (including, without limiting the generality of the foregoing, to ask, require, demand, receive, compound and give acquittance for any and all moneys and claims for moneys due and
to become due under or arising out of the Charter, to endorse any cheque or other instrument or orders in connection therewith and to file any claims or take any action or institute any proceedings which the Mortgagee may deem to be necessary or
advisable and otherwise to do any and all things which the Owner itself could do in relation to the Assigned Property) which may be required for the full exercise of all or any of the rights, powers or remedies conferred hereby or which may be
deemed proper in or in connection with all or any of the purposes aforesaid. The power hereby conferred shall be a general power of attorney under the Powers of Attorney Act 1971, and the Owner ratifies and confirms, and agrees to ratify and
confirm, any deed, assurance, agreement, instrument, act or thing which the Mortgagee may execute or do pursuant thereto Provided always that such power shall not be exercisable by or on behalf of the Mortgagee until the happening of any Event of
Default. 
  

 7 

	7.2	Exercise of power 

 The
exercise of such power by or on behalf of the Mortgagee shall not put any person dealing with the Mortgagee upon any enquiry as to whether any Event of Default has happened, nor shall such person be in any way affected by notice that no such event
has happened, and the exercise by the Mortgagee of such power shall be conclusive evidence of its right to exercise the same. 
  

	7.3	Filings 

 The Owner hereby
irrevocably appoints the Mortgagee to be its attorney in its name and on its behalf and as its act and deed or otherwise, to agree the form of and to execute and do all deeds, instrument, acts and things in order to file, record, register or enrol
this Assignment and/or any notice and/or acknowledgement of the assignment herein contained in any court, public office or elsewhere which the Mortgagee may in its discretion consider necessary or advisable, now or in the future, to ensure the
legality, validity, enforceability or admissibility in evidence thereof and any other assurance, document, act or thing required to be executed by the Owner pursuant to clause 8. 
  

	8	Further assurance 

 The
Owner hereby further undertakes at its own expense from time to time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the opinion of the Mortgagee may be necessary or desirable for
the purpose of more effectually assigning, mortgaging and charging the Assigned Property or perfecting the security constituted or intended to be constituted by this Assignment. 
  

	9	Notices 

 The provisions
of clause 17.1 of the Loan Agreement shall apply mutatis mutandis in respect of any certificate, notice, demand or other communication given or made under this Assignment as if set out herein and as if references therein to the
“Borrowers or either of them” and “the Security Agent” were references to the Owner and the Mortgagee, respectively. 
  

	10	Law, jurisdiction and other provisions 

  

	10.1	Law 

 This Assignment and
any non-contractual obligations in connection with this Assignment are governed by, and shall be construed in accordance with, English law. 
  

	10.2	Submission to jurisdiction 

 For the benefit of the Mortgagee, the parties hereto irrevocably agree that any legal action or proceedings in connection with this Assignment (including any non-contractual obligations in connection with this Assignment) may be brought in
the English courts or in the courts of any other country chosen by the Mortgagee, each of which shall have jurisdiction to settle any disputes arising out of or in connection with this Assignment (including any non-contractual obligations in
connection with this Assignment). The Owner irrevocably and unconditionally submits to the jurisdiction of the English courts and the courts of any country chosen by the Mortgagee and irrevocably designates, appoints and empowers Ince & Co.
at present of International House, 1 St. Katharine’s Way, London E1W 1AY, England to receive, for it and on its behalf, service of process issued out of the English courts in any legal action or proceedings arising out of or in connection with
this Assignment (including any non-contractual obligations in connection with this Assignment). The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Mortgagee to take proceedings against the
Owner in any other court of competent jurisdiction nor shall the taking of proceedings by the Mortgagee in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. The parties further
agree that only the courts of England and not those of any other State shall have jurisdiction to determine any claim which the Owner may have against the Mortgagee arising out of, or in connection with, this Assignment (including any
non-contractual obligations in connection with this Assignment). 
  

 8 

	10.3	Counterparts 

 This
Assignment may be entered into in the form of two counterparts, each executed by one of the parties, and provided all the parties shall so execute this Assignment, each of the executed counterparts, when duly exchanged or delivered, shall be deemed
to be an original but, taken together, they shall constitute one instrument. 
  

	10.4	English language 

 All
certificates, instruments and other documents to be delivered under or supplied in connection with this Assignment or the Charter shall be in the English language or shall be accompanied by a certified English translation upon which the recipient
shall be entitled to rely. 
  

	10.5	Severability of provisions 

 Each of the provisions of this Assignment are severable and distinct from the others and if at any time one or more of such provisions is or becomes invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Assignment shall not in any way be affected or impaired thereby. 
  

	10.6	Contracts (Rights of Third Parties) Act 1999 

 No term of this Assignment is enforceable under the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Assignment. 
 IN WITNESS whereof this Assignment has been duly executed as a deed the day and year first above written. 
  

 9 

 Schedule 1 
 Forms of Notice of Assignment of Charter 
  

	To:	Cosco Qingdao (Qingdao Ocean Shipping Company, Limited) 

 People’s Republic of China 
 m.v. Avoca 
 We refer to the charterparty contract dated 3 September 2008 made between (1) you, Cosco Qingdao (Qingdao Ocean Shipping Company, Limited) of the
People’s Republic of China (the “Charterer”) and (2) us, Orpheus Owning Company Limited of the Marshall Islands (the “Owner”), which contract is on the date of this Agreement, incorporated in a
recapitulation email dated 3 September 2008 addressed by Simpson Spence & Young the Charterer’s brokers acting on behalf of the Charterer to the Owner, whereby we agreed to let and you agreed to take on time charter, for the
period and upon the terms and conditions therein mentioned, the motor vessel Avoca, registered in our name under the flag of Malta (the “Ship”) (the “Charter”). 
 NOW WE HEREBY GIVE YOU NOTICE: 
  

	1	that by an Assignment dated [—] 2009 (the “Assignment”) made between us and DnB NOR Bank ASA of 20
St. Dunstan’s Hill, London EC3R 8HY, England (the “Assignee”) as security agent and trustee for certain banks and financial institutions, we have assigned to the Assignee all our rights title and interest to and in any moneys
whatsoever payable to us under the Charter and all other rights and benefits whatsoever accruing to us under the Charter including (but without prejudice to the generality of the foregoing) all claims for damages in respect of any breach by you of
the Charter; 

  

	2	that you are hereby irrevocably authorised and instructed to pay such moneys as aforesaid to our bank account with account number 63520002 held with the Assignee or to
such other account as the Assignee may from time to time direct; and 

  

	3	that the said Assignment includes provisions that no variations shall be made to the charterhire payable under the Charter or the duration of the Charter or any other
material variation of the Charter (nor shall you be released from your obligations thereunder) without the previous written consent of the Assignee and we shall remain liable to perform all our obligations under the Charter and the Assignee shall be
under no obligation of any kind whatsoever in respect thereof. 

 The authority and instructions herein contained cannot be
revoked or varied by us without the consent of the Assignee. 
 This letter and any non-contractual obligations in connection with this letter
are governed by, and shall be construed in accordance with, English law. 
  

	
	
	  
	For and on behalf of
	ORPHEUS OWNING COMPANY LIMITED

 Dated: [—] 
  

 10 

 Form of Charterer’s Consent and Agreement 
 (on duplicate) 
  

	To:	DnB NOR Bank ASA 

  

	To:	Orpheus Owning Company Limited 

 We acknowledge
receipt of the notice set out above and consent to the assignment referred to therein and, in consideration of US$10 and other good and valuable consideration (the receipt and adequacy of which we hereby acknowledge), we hereby undertake with, and
confirm to, the Assignee as follows: 
  

	(a)	to pay all amounts due from us under the Charter in full in Dollars (and without any set-off or counterclaim whatsoever and free and clear of any deductions or
withholdings) to your account held with DnB NOR Bank ASA at 20 St. Dunstan’s Hill, London EC3R 8HY, England with account number 63520002 or to the order of the Assignee; 

  

	(b)	to permit the Assignee to enforce all other rights and benefits whatsoever accrued or accruing to the Owner under the Charter and for this purpose to take over or
institute proceedings in respect thereof; 

  

	(c)	not, without the prior written consent of the Assignee to agree, to any variation of the Charter; 

  

	(d)	to perform our obligations under the Charter; and 

  

	(e)	that we have not received any notice of any prior charge, assignment or encumbrance over the Owner’s right, title and interest in and to the Charter.

 This letter and any non-contractual obligations in connection with this letter are governed by, and shall be construed in
accordance with, English law. 
  

			
	 By:
	 	  

		 	for and on behalf of
		 	COSCO QINGDAO (QINGDAO OCEAN SHIPPING COMPANY, LIMITED)
	
	 Date: [—]

  

 11 

							
	EXECUTED as a DEED	 	)	    		 	
	by	 	)	    		 	
	for and on behalf of	 	)	    	  
	 	
	ORPHEUS OWNING COMPANY LIMITED	 	)	    	Attorney-in-fact	 	
	in the presence of:	 	)	    		 	
				
	  
	 		    		 	
	Witness	 		    		 	
	Name:	 		    		 	
	Address:	 		    		 	
	Occupation:	 		    		 	
				
	EXECUTED as a DEED	 	)	    		 	
	by	 	)	    		 	
	for and on behalf of	 	)	    	  
	 	
	DNB NOR BANK ASA	 	)	    	Attorney-in-fact	 	
	in the presence of:	 	)	    		 	
				
	  
	 		    		 	
	Witness	 		    		 	
	Name:	 		    		 	
	Address:	 		    		 	
	Occupation:	 		    		 	

  

 12 

									
	 EXECUTED as a DEED
	 	)	    	 /s/ Illegible
 Attorney-in-fact
	 	
	by	 	Alexandros Mylonas	 	)	    	 	
	for and on behalf of	 	)	    	 	
	TEAM-UP OWNING COMPANY LIMITED	 	)	    	 	
	as Borrower	 	)	    	 	
	in the presence of:	 	)	    	 	
				
	 /s/ Leila Sum
	 		    		 	
	Witness	 		 		    		 	
	Name:	 	LEILA SUM	 		    		 	
	Address:	 	NORTON ROSE LLP	 		    		 	
	Occupation:	 	TRAINEE SOLICITOR	 		    		 	
				
	EXECUTED as a DEED	 	)	    	 /s/ Illegible
 Attorney-in-fact
	 	
	by	 		 	)	    	 	
	for and on behalf of	 	)	    	 	
	ORPHEUS OWNING COMPANY LIMITED	 	)	    	 	
	as Borrower	 	)	    	 	
	in the presence of:	 	)	    	 	
				
	 /s/ Leila Sum
	 		    		 	
	Witness	 		 		    		 	
	Name:	 	LEILA SUM	 		    		 	
	Address:	 	NORTON ROSE LLP	 		    		 	
	Occupation:	 	TRAINEE SOLICITOR	 		    		 	
				
	EXECUTED as a DEED	 	)	    	 /s/ Illegible
 Attorney-in-fact
	 	
	by	 		 	)	    	 	
	for and on behalf of	 	)	    	 	
	DRYSHIPS INC.	 	)	    	 	
	as Corporate Guarantor	 	)	    	 	
	in the presence of:	 	)	    	 	
				
	 /s/ Leila Sum
	 		    		 	
	Name:	 	LEILA SUM	 		    		 	
	Address:	 	NORTON ROSE LLP	 		    		 	
	Occupation:	 	TRAINEE SOLICITOR	 		    		 	
				
	EXECUTED as a DEED	 	)	    	 /s/ Illegible
 Attorney-in-fact
	 	
	by	 		 	)	    	 	
	for and on behalf of	 	)	    	 	
	CARDIFF MARINE INC.	 	)	    	 	
	as Manager	 	)	    	 	
	in the presence of:	 	)	    	 	
				
	 /s/ Leila Sum
	 		    		 	
	Witness	 		 		    		 	
	Name:	 	LEILA SUM	 		    		 	
	Address:	 	NORTON ROSE LLP	 		    		 	
	Occupation:	 	TRAINEE SOLICITOR	 		    		 	

  

 18 

									
	SIGNED by	 	MARIA GRATZI	 	)	 	 /s/ Maria Gratzi
 Attorney-In-fact
	 	
	for and on behalf of	 	)	 	 	
	DNB NOR BANK ASA	 	)	 	 	
	as Arranger, Agent, Security Agent,	 	)	 	 	
	Swap Provider and Account Bank	 		 		 	
	  
 In the presence of: LEILA SUM, TRAINEE SOLICITOR,
NORTON ROSE LLP

				
	 /s/ Leila Sum
	 		 	 /s/ Maria Gratzi
 Attorney-in-fact
	 	
	SIGNED by	 	MARIA GRATZI	 	)	 	 	
	for and on behalf of	 	)	 	 	
	DNB NOR RANK ASA	 	)	 	 	
	as Bank	 	)	 	 	
	  
 In the presence of: LEILA SUM, TRAINEE
SOLICITOR, NORTON ROSE LLP

				
	 /s/ Leila Sum
	 		 		 	

  

 19Construction and Sale Contract of Drillship Hull No. 1838

 Exhibit 4.28 
 CONTRACT 
 FOR 
 CONSTRUCTION AND SALE 
 OF 
 A DRILLSHIP 
 (HULL NO. 1838) 
 BETWEEN 
 DRILLSHIP PAROS OWNERS INC. 
 AND 
 SAMSUNG HEAVY INDUSTRIES CO., LTD.

  

 INDEX 
  

			
	 	  	PAGE
		
	 ARTICLE I - DESCRIPTION AND CLASS
	  	6
	 1. Description:
	  	6
	 2. Dimensions and Characteristics:
	  	6
	 3. The Classification, Rules and Regulations:
	  	7
	 4. HSE Analysis, studies and assessments
	  	7
	 5. Subcontracting
	  	8
	 6. Registration:
	  	8
	 ARTICLE II - CONTRACT PRICE AND TERMS OF PAYMENT
	  	9
	 1. Contract Price:
	  	9
	 2. Adjustment of Contract Price:
	  	9
	 3. Currency:
	  	9
	 4. Terms of Payment:
	  	9
	 5. Method of Payment:
	  	11
	 6. Notice of Payment before Delivery:
	  	11
	 7. Expenses:
	  	12
	 8. Prepayment:
	  	12
	 ARTICLE III - ADJUSTMENT OF CONTRACT PRICE
	  	13
	 1. Delivery:
	  	13
	 2. Speed:
	  	14
	 3. Fuel Consumption for the Diesel Generator Prime Drivers:
	  	15
	 4. Variable Load Capacity:
	  	15
	 5. Effect of Rescission:
	  	16
	 ARTICLE IV - APPROVAL OF PLANS AND DRAWINGS AND INSPECTION DURING CONSTRUCTION
	  	17
	 1. Approval of Plans and Drawings:
	  	17
	 2. Appointment of BUYER’s Supervisor:
	  	17
	 3. Inspection by the Supervisor:
	  	18
	 4. Facilities:
	  	19
	 5. Liability of BUILDER:
	  	19
	 6. Responsibility of BUYER:
	  	20
	 7. Delivery and Construction Schedule:
	  	21
	 ARTICLE V - MODIFICATIONS, CHANGES AND EXTRAS
	  	22
	 1. How Effected:
	  	22
	 2. Changes in Rules of Classification Society, Regulations, etc.:
	  	23
	 3. Substitution of Materials:
	  	24
	 ARTICLE VI - TRIALS AND ACCEPTANCE
	  	25

  

 2 

			
	 1. Notice:
	  	25
	 2. Weather Condition:
	  	25
	 3. How Conducted:
	  	26
	 4. Method of Acceptance or Rejection
	  	26
	 5. Effect of Acceptance:
	  	27
	 6. Disposition of Surplus Consumable Stores:
	  	28
	 ARTICLE VII - DELIVERY
	  	29
	 1. Time and Place:
	  	29
	 2. When and How Effected:
	  	29
	 3. Documents to be delivered to BUYER:
	  	29
	 4. Tender of DRILLSHIP:
	  	30
	 5. Title and Risk:
	  	31
	 6. Removal of DRILLSHIP:
	  	31
	 ARTICLE VIII - DELAYS AND EXTENSION OF TIME FOR DELIVERY (FORCE MAJEURE)
	  	32
	 1. Causes of Delay (Force Majeure):
	  	32
	 2. Notice of Delay:
	  	33
	 3. Definition of Permissible Delay:
	  	33
	 4. Right to Rescind for Excessive Delay:
	  	33
	 ARTICLE IX - WARRANTY OF QUALITY
	  	35
	 1. Guarantee:
	  	35
	 2. Notice of Defects:
	  	35
	 3. Remedy of Defects:
	  	35
	 4. Extent of BUILDER’s Responsibility
	  	37
	 ARTICLE X - RESCISSION BY BUYER
	  	38
	 1. Notice:
	  	38
	 2. Refundment by BUILDER:
	  	38
	 3. Discharge of Obligations:
	  	39
	 ARTICLE XI - BUYER’S DEFAULT
	  	40
	 1. Definition of Default:
	  	40
	 2. Effect of Default on or before Delivery of DRILLSHIP:
	  	40
	 3. Disposal of DRILLSHIP:
	  	41
	 ARTICLE XII - ARBITRATION
	  	42
	 1. Decision by the Classification Society:
	  	42
	 2. Proceedings of Arbitration in London UK:
	  	42
	 3. Notice of Award:
	  	43
	 4. Expenses:
	  	43
	 5. Entry in Court:
	  	43
	 6. Alteration of Delivery Date:
	  	43

  

 3 

			
	 ARTICLE XIII - SUCCESSOR AND ASSIGNS
	  	44
	 ARTICLE XIV - TAXES AND DUTIES
	  	45
	 1. Taxes and Duties Incurred in Korea:
	  	45
	 2. Taxes and Duties Incurred Outside Korea:
	  	45
	 ARTICLE XV - PATENTS, TRADEMARKS, COPYRIGHTS, ETC.
	  	46
	 1. Patents:
	  	46
	 2. General Plans, Specifications and Working Drawings:
	  	46
	 ARTICLE XVI - BUYER’S SUPPLIES
	  	47
	 1. Responsibility of BUYER:
	  	47
	 2. Responsibility of BUILDER:
	  	48
	 3. Title:
	  	48
	 ARTICLE XVII - INSURANCE
	  	49
	 1. Extent of Insurance Coverage:
	  	49
	 2. Application of the Recovered Amounts:
	  	49
	 3. Termination of BUILDER’s Obligation to Insure:
	  	50
	 ARTICLE XVIII - NOTICE
	  	51
	 1. Address:
	  	51
	 2. Language:
	  	51
	 3. Effective Date of Notice:
	  	52
	 ARTICLE XIX - EFFECTIVE DATE OF CONTRACT
	  	53
	 ARTICLE XX - INTERPRETATION
	  	54
	 1. Laws Applicable:
	  	54
	 2. Discrepancies:
	  	54
	 3. Entire Agreement:
	  	54
	 4. Amendments and Supplements:
	  	54
	 ARTICLE XXI - CONFIDENTIALITY
	  	55
		
	 EXHIBIT “1” VESSEL SPECIFICATION
	  	57
	 EXHIBIT “2” TOPSIDE SPECIFICATION
	  	58
	 EXHIBIT “3” DELIVERY AND CONSTRUCTION SCHEDULE
	  	59
	 EXHIBIT “4” LETTER OF REFUNDMENT GUARANTEE NO
	  	60
	 EXHIBIT “5” PERFORMANCE GUARANTEE
	  	63
	 EXHIBIT “6” OPTIONAL ITEMS
	  	64

  

 4 

 This Contract, made and entered into on this 17th day of September 2007 by and between DRILLSHIP PAROS OWNERS INC., a
corporation incorporated and existing under the laws of Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (hereinafter called the “BUYER”), on the one
part and SAMSUNG HEAVY INDUSTRIES CO., LTD., a corporation incorporated and existing under the laws of the Republic of Korea and having its registered office at 34th Floor, Samsung Life Insurance Seocho Tower 1321-15, Seocho-Dong, Seocho-Gu, Seoul,
Korea 137-857 (hereinafter called the “BUILDER”), on the other part. 
 W I T N E S S E T H: 
 In consideration of the mutual covenants herein contained, the BUILDER acknowledges that the Contract is a turn key contract for the construction and sale of
a drillship constructed and tested out to be fully ready to drill and fully functioning in accordance with and subject to the terms and conditions of this Contract and Specifications and the BUILDER agrees as described in the Specifications to
design, construct, build, launch, equip, test and complete One (1) Drillship composed of a hull part as described in the specification attached hereto as Exhibit “1” of this Contract (hereinafter referred to as the “VESSEL”)
and topside part as described in the specification attached hereto as Exhibit “2” of this Contract (hereinafter referred to as “TOPSIDE”) (the VESSEL and TOPSIDE being hereinafter collectively referred to as the
“DRILLSHIP”) and in accordance with the Delivery and Construction Schedule attached hereto as Exhibit “3” (said Exhibits 1 through 3 (including all amendments, additions, deletions and variations incorporated into the
Specifications for HN. 1674 up to the Effective Date of this Contract) being hereinafter collectively called the “Specifications”) which Specifications have been initialed by representatives of the parties hereto for identification and
which Specifications hereby are each incorporated herein by reference hereto and made an integral part of this Contract, at the BUILDER’s shipyard located in Geoje Island, Korea (hereinafter referred to as the “Shipyard”) and to
deliver and sell the same to the BUYER, and the BUYER hereby agrees to purchase and accept delivery of the DRILLSHIP from the BUILDER, upon the terms and conditions hereinafter set forth. 
  

 5 

 ARTICLE I - DESCRIPTION AND CLASS 
  

	1.	Description: 

 The DRILLSHIP,
having the BUILDER’s Hull No. 1838, shall be designed, constructed, built, launched, equipped, tested, completed and delivered in accordance with the provisions of this Contract, and the Specifications. To the extent not defined in the
Specifications, the DRILLSHIP’s construction is to meet the first-class international shipbuilding and construction standards and practices, including without limitation such standards and practices relating to BUILDER’s Quality Assurance
Programs. 
  

	2.	Dimensions and Characteristics: 

  

			
	Length, overall	 	Max. 228 meters
	Length, between perpendiculars	 	abt. 219.4 meters
	Breadth, moulded	 	abt. 42 meters
	Depth, moulded	 	abt. 19 meters
	Scantling draft, moulded	 	abt. 13 meters

 Speed, guaranteed: The
trial speed shall not be less than 12.0 knots on the transit draught of 8.5 meters and at total thruster motor output of 28,700 KW. 
 Guaranteed Fuel Consumption, Diesel Generator Prime Drivers (in relation to each engine): The fuel consumption shall be not more than the engine manufacturers’ nominal fuel consumption plus five percent (5) % with engine driven
pumps at manufacturer’s shop trial, burning marine diesel having the lower calorific value of 10,200 kCal/kg, at 85% MCR under the environment condition of ISO 3046/1-1986 specified in the Specifications. 
 Guaranteed Variable Load Capacity: The variable load capacity of the DRILLSHIP will be not less than 20,000 metric tons for drilling and
survival conditions without extended well test oil on board as specified in the Specifications. 
 The details of the
aforementioned particulars, as well as the definitions and the methods of measurements and calculations shall be as indicated in the Specifications. 
  

 6 

	3.	The Classification, Rules and Regulations: 

 The DRILLSHIP, including its machinery, equipment and outfittings shall be constructed and classified in accordance with the rules and regulations (the editions and amendments thereto being in force) as
of the signing date of this Contract and under special survey of American Bureau of Shipping (hereinafter called the “Classification Society”), and shall be distinguished in the register by the symbol of 

Al 

, “Drilling Unit”, 

AMS,

 ACCU, 

DPS-3, NBLES, SH-DLA, 

CDS. 
 Decisions of the Classification Society as to compliance or non-compliance with the
classification rules and regulations shall be final and binding upon both parties hereto. Details of its notation shall be in accordance with the Specifications. 
 The DRILLSHIP shall also comply with the rules, regulations and requirements of the regulatory bodies as described and listed in the Specifications. 
 The DRILLSHIP will be built and delivered (i) in accordance with the terms of this Contract and the Specifications, (ii) in full
compliance and certification to and with the IMO MODU code with amendments, (iii) in full compliance with the regulations, provisions, and requirements included in the Specifications, (iv) in full compliance with the requirements of the
Classification Society so as to be classed with the Classification Society as a MODU, and (v) so that the DRILLSHIP will be approved to operate in the United States Gulf of Mexico/the Outer Continental Shelf of the United States, the waters
outside West Africa, Central Africa, South Africa, South America, South East Asia, UK, Australia, South Atlantic and in the Mediterranean. The BUILDER will take all action necessary, and remedy at its cost and expense, any deficiency that
constitutes a failure to comply with the above requirements. 
 All fees and charges incidental to the Classification Society and
in respect to compliance with the above referred rules, regulations and requirements, as well as all DRILLSHIP design fees and/or royalties (except any royalties for the BUYER’s Supplies), shall be for account of the BUILDER. 
  

	4.	HSE Analysis, studies and assessments 

 The BUYER shall perform HSE Analysis, studies and assessments such as HAZID’s, Risk Analysis, HAZOP’s, Readability and Vulnerability analysis, Working Environment assessment of the DRILLSHIP. 
  

 7 

 If the finding of such HSE Analysis, studies and assessments demand changes to the design,
layout and construction of the DRILLSHIP to make the DRILLSHIP meet the requirements of the Contract, then the BUILDER shall implement such changes in accordance with the findings. 
 Should the findings lead the BUYER to request changes to the Contract then a Variation Order shall be in accordance with Article V.

 The BUILDER shall be responsible for obtaining the Classification Society’s approval of all required plans and drawings
of the DRILLSHIP. 
  

	5.	Subcontracting 

 The BUILDER may,
at its sole discretion and responsibility, subcontract any portion of the construction work of the DRILLSHIP, provided that the work is carried out at a reputable yard in Korea or at the BUILDER’s wholly owned subsidiaries at Ningbo and
Rongcheng in China, where the aggregate value of the works or services to be subcontracted equals or is below Five million five hundred thousand United States Dollars (US$ 5,500,000) but if exceeding such value the BUILDER shall obtain in writing
the prior approval of the BUYER (whose approval shall not be unreasonably withheld), but any subcontracting shall always be subject to the condition that the BUILDER shall ensure that the rights of the BUYER and the requirements in the Contract are
satisfied and provided for in such work. The BUILDER shall not be relieved from any of its obligations and liabilities under the Contract and shall be responsible for all work, acts, omissions and defaults of any subcontractors as fully as if they
were the work, acts, omissions or defaults of the BUILDER. 
  

	6.	Registration: 

 The DRILLSHIP, at
the time of its delivery and acceptance, shall be registered at the port of registry by the BUYER under the Malta flag at the BUYER’s expenses. 
 (End of Article) 
  

 8 

 ARTICLE II - CONTRACT PRICE AND TERMS OF PAYMENT 
  

	1.	Contract Price: 

 The Contract
price of the DRILLSHIP, net receivable by the BUILDER and exclusive of the BUYER’s Supplies (as defined in Paragraph 1 of Article XVI hereof) is Six Hundred Seven Million Three Hundred Seventy Thousand United States Dollars (US$ 607,370,000)
(hereinafter referred to as the “Contract Price”). The Contract Price shall be subject to upward or downward adjustment, if any, as hereinafter set forth in this Contract. 
  

	2.	Adjustment of Contract Price: 

 Increase or decrease of the Contract Price, if any, due to adjustments thereof made in accordance with the provisions of this Contract shall be adjusted by way of addition to or subtraction from the Contract Price upon delivery of the
DRILLSHIP in the manner as hereinafter provided at article III. 
 The BUYER has the right to exercise the purchase the option as
per Exhibit “6” within 3 months after the date of the signing contract. Should the BUYER exercise one of the options, the payment terms of the exercised option items shall be same with that of the Contract, provided that the amount of the
first installment shall be paid at the same time of the second installment is due, and the BUILDER will reissue a Refundment Guarantee covering full amount of the adjusted Contract Price to replace the old Refundment Guarantee. 
  

	3.	Currency: 

 Any and all payments
by the BUYER to the BUILDER, or vice versa if any, which are due under this Contract shall be made in United States Dollars. 
  

	4.	Terms of Payment: 

 The Contract
Price shall be due and payable by the BUYER to the BUILDER in the installments as follows: 
  

	 	(a)	First Installment: 

 The First
Installment amounting to Ninety One Million One Hundred Five Thousand Five Hundred United States Dollars (15%, US$ 91,105,500), less the amount of Five Million United States Dollars (US$ 5,000,000) already paid by the BUYER to the BUILDER as
Commitment Fee, making the net sum for this first installment Eighty Six Million One Hundred Five Thousand Five Hundred United States Dollars (US$ 86,105,500) shall be due and payable within five (5) banking days after the receipt of the
original Refundment Guarantee. 
  

 9 

	 	(b)	Second Installment: 

 The Second
Installment amounting to Ninety One Million One Hundred Five Thousand Five Hundred United States Dollars (15%, US$ 91,105,500) shall be due and payable within three (3) banking days six months after the Effective Date of the Contract upon
receipt of the BUILDER’s invoice therefore. 
  

	 	(c)	Third Installment: 

 The Third
Installment amounting to Ninety One Million One Hundred Five Thousand Five Hundred United States Dollars (15%, US$ 91,105,500) shall be due and payable within three (3) banking days from the receipt of the BUILDER’s invoice and a telefax
notice from the BUILDER, countersigned by the classification surveyor, certifying that steel cutting for the Drillship has commence but not earlier than 19 months after the second installment. 
  

	 	(d)	Fourth Installment: 

 The Fourth
Installment amounting to Ninety One Million One Hundred Five Thousand Five Hundred United States Dollars (15%, US$ 91,105,500) shall be due and payable within three (3) banking days from the receipt of the BUILDER’s invoice and a telefax
notice from the Builder, countersigned by the classification surveyor, certifying that keel laying for the DRILLSHIP has commenced but not earlier than 4 months after the third installment. 
  

	 	(e)	Fifth Installment: 

 The Fifth
Installment amounting to Two Hundred and Forty Two Million Nine Hundred Forty Eight Thousand United States Dollars (40%, US$ 242,948,000) plus or minus any adjustment of the Contract Price under and pursuant to the provisions of this Contract, shall
be due and payable upon delivery of the DRILLSHIP or upon tender for delivery of the DRILLSHIP referred to in Paragraph 4 of Article VII of this Contract. 
  

 10 

	5.	Method of Payment: 

  

	 	(a)	First Installment: 

 Within five
(5) banking days after the receipt of the original Refundment Guarantee, the BUYER shall remit by telegraphic transfer the first installment to the account to be specified in advance in writing by the BUILDER. 
  

	 	(b)	Second, Third and Fourth Installments: 

 Upon the due date of the second, third and fourth installments, in accordance with Article II, 4 (b), (c) and (d) as appropriate, the BUYER shall remit by telegraphic transfer each of the respective installments to the account to
be specified in advance in writing by the BUILDER. 
  

	 	(c)	Fifth Installment: 

 At least
three (3) banking days prior to the anticipated delivery date of the DRILLSHIP, the BUYER shall remit by telegraphic transfer the fifth installment to the bank specified in advance in writing by the BUILDER in the name of the BUYER’s bank
with instructions of the amount so remitted to be payable to the BUILDER against a copy of PROTOCOL OF DELIVERY and ACCEPTANCE OF THE DRILLSHIP signed by the BUYER and the BUILDER. 
 Simultaneously with each of all such payment, the BUYER shall cause the BUYER’s BANK to advise the BUILDER’s BANK of the details of
such payments by authenticated bank cable or telefax. 
 No payment due under this Contract shall be delayed, suspended or
withheld by the BUYER on account of any dispute or disagreement between the parties hereto. Any claim that the BUYER may have against the BUILDER hereunder shall be settled and liquidated separately from any payment by the BUYER to the BUILDER
hereunder. 
  

	6.	Notice of Payment before Delivery: 

 With the exception of the first installment, the BUILDER shall give the BUYER Ten (10) banking days prior notice in writing or telefax or telex of the anticipated due date and amount of each installment payable on or before delivery of
the DRILLSHIP. 
  

 11 

	7.	Expenses: 

 Expenses and bank
charges for remitting payments and any taxes, duties, expenses and fees referred to in paragraph 2 of Article XIV of this Contract connected with such payment shall be for account of the BUYER. 
  

	8.	Prepayment: 

 Prepayment of any
installment due on or before delivery of the DRILLSHIP shall be subject to mutual agreement between the parties hereto. 
 (End of
Article) 
  

 12 

 ARTICLE III - ADJUSTMENT OF CONTRACT PRICE 
 The Contract Price shall be subject to adjustment, as hereinafter set forth, in the event of the following contingencies (it being understood by both parties that any reduction of the Contract Price is by
way of liquidated damages and not by way of penalty): 
  

	1.	Delivery: 

  

	 	(a)	 No adjustment shall be made and the Contract Price shall remain unchanged for the first 30 days of delay in delivery of the DRILLSHIP beyond the
Delivery Date as defined in Article VII hereof (ending as of twelve o’clock midnight of the 31st day of delay). 

  

	 	(b)	 If the delivery of the DRILLSHIP is delayed more than 30 days after the Delivery Date, then, in such event, beginning at twelve o’clock midnight
of the 31st day after the Delivery Date, the Contract
Price shall be reduced by the sum of Hundred and twenty thousand United States Dollars (US$ 120,000) for each full day for which thereafter delivery is delayed. 

 However, the total reduction in the Contract Price pursuant to this Paragraph (b) shall not be more than as would be
the case for a delay of 180 days counting from midnight of the 31st day after the Delivery Date at the above specified rate of reduction. 
  

	 	(c)	However, if the delay in delivery of the DRILLSHIP should continue for a period of 210 days from the Delivery Date in Paragraph 1 of Article VII, then in such event,
and after such period has expired, the BUYER may, at its option, rescind this Contract in accordance with the provisions of Article X hereof. 

 The BUILDER may, at any time after the expiration of the aforementioned 210 days of delay in delivery, if the BUYER has not served notice of rescission as provided in Article X hereof, demand in writing
that the BUYER shall make an election, in which case the BUYER shall, within Twenty (20) days after such demand is received by the BUYER, notify the BUILDER of its intention either to rescind this Contract or to consent to the acceptance of the
DRILLSHIP at a specified future date which date BUILDER represents to BUYER is the earliest date BUILDER can deliver the DRILLSHIP to BUYER under this Contract, based on the circumstances then known. If the BUYER shall not make an election within
Twenty (20) days as

  

 13 

 
provided hereinabove, the BUYER shall be deemed to have accepted such extension of the delivery date to the future delivery date indicated by the BUILDER and it being understood by the parties
hereto that if the DRILLSHIP is not delivered by such specified date, the BUYER shall have the same right of rescission upon the same terms and conditions as hereinabove provided. 
  

	 	(d)	If, at the time of actual delivery the BUYER has entered into an unconditional charter contract providing for the immediate deployment of the DRILLSHIP to provide
services in return for the payment of cash consideration upon delivery of the DRILLSHIP (the “Delivery Contract”), and, should Delivery occur before twelve o’clock midnight on the Delivery Date and the third party accepts to take such
early delivery under the Delivery Contract, then in such event, the final installment of the Contract Price shall be increased by the sum of Seventy five thousand United States Dollars (US$ 75,000) for each full day of early delivery, beginning at
the time of actual delivery of the DRILLSHIP until twelve o’clock midnight on March 31, 2011, provided that the aggregate increases to the Contract Price for early delivery of the DRILLSHIP shall not exceed Three million United States
Dollars (US$ 3,000,000) (the “Bonus”). 

  

	 	(e)	For the purpose of this Article, the delivery of the DRILLSHIP shall be deemed to be delayed when and if the DRILLSHIP, after taking into account all postponements of
the Delivery Date by reason of permissible delay as defined in Article VIII and/or any other reason under this Contract, is not delivered by the date upon which delivery is required under the terms of this Contract. 

  

	2.	Speed: 

  

	 	(a)	The Contract Price shall not be affected or changed by reason of the trial speed (as determined according to the Specifications) being less than the guaranteed speed,
if such variation is not more than 0.5 knots. 

  

	 	(b)	However, commencing with and including such deficiency of 0.5 knots in trial speed below the guaranteed speed of the DRILLSHIP, the Contract Price shall be reduced by
Eighty thousand United States Dollars (US$ 80,000) for each 0.1 knot below the guaranteed speed. 

  

	 	(c)	 If the deficiency in the speed upon final sea trial is more than one (1) knot below the guaranteed speed of the DRILLSHIP, then the BUYER may, at
its option, reject the

  

 14 

	 	 
DRILLSHIP and rescind this Contract in accordance with the provisions of Article X hereof, or may accept the DRILLSHIP at a reduction in the Contract Price at a rate of One Hundred Thousand
United States Dollars (U$ 100,000) for each 0.1 knot below 11.5 knots. 

  

	3.	Fuel Consumption for the Diesel Generator Prime Drivers: 

  

	 	(a)	The Contract Price shall not be affected or changed in case the actual fuel consumption for each engine, as determined by the shop trial as specified in the
Specifications, is not more than one percent (1%) in excess of the Guaranteed Fuel Consumption specified in Paragraph 3 of Article I. 

  

	 	(b)	However, in the event that the actual fuel consumption of any engine at the shop trial is in excess of one percent (1%) of the Guaranteed Fuel Consumption, the
Contract Price shall be reduced by the sum of Forty thousand United States Dollars (US$ 40,000) for each one percent (1%) per engine by which the actual fuel consumption of any engine exceeds the Guaranteed Fuel Consumption plus One percent
(1%). 

  

	 	(c)	The BUYER has an option to reject the DRILLSHIP and rescind the Contract in accordance with the provisions of Paragraphs 2, 3 and 4 of Article X – RESCISSION BY
BUYER hereof in the event the actual fuel consumption of any engine is more than five percent (5%) in excess of the Guaranteed Fuel Consumption. 

  

	4.	Variable Load Capacity: 

  

	 	(a)	In the event that the actual Variable Load Capacity of the DRILLSHIP is more than 500 metric tons below the Guaranteed Variable Deck Load Capacity of the DRILLSHIP,
then the Contract Price shall be reduced by Four thousand United States Dollars (US$ 4,000) per each metric ton of the shortfall below 19,500 metric tons. 

  

	 	(b)	In the event that the actual Variable Load Capacity of the DRILLSHIP is more than 1,500 metric tons below the Guaranteed Variable Load Capacity of the DRILLSHIP, then
the BUYER may at its option reject the DRILLSHIP and rescind the Contract in accordance with the provisions of Paragraphs 2, 3 and 4 of Article X – RESCISSION BY BUYER hereof or accept the DRILLSHIP at a reduction in the Contract Price of Four
million United States Dollars (US$ 4,000,000). 

  

 15 

	5.	Effect of Rescission: 

 It is
expressly understood and agreed by the parties that in any case, if the BUYER rescinds this Contract under this Article, the BUYER shall not be entitled to any liquidated damages, or any other recourse unless by means of the provisions of Article X
hereof. 
 (End of Article) 
  

 16 

 ARTICLE IV - APPROVAL OF PLANS AND DRAWINGS AND INSPECTION DURING CONSTRUCTION 
  

	1.	Approval of Plans and Drawings: 

 Approved plans and drawings of the BUILDER’s HN. 1674 (including all amendments, additions, deletions and variations incorporated into the Specification up to the date of this Contract signing) shall be deemed to be approved by the
BUYER and shall be applied to the Drillship. The BUILDER shall be exempted from the approval of the BUYER for the plans and drawings in accordance with the Specifications. All plans and drawings, which are modified by the BUILDER shall, however, be
subject to approval by the BUYER in accordance with Article V. 
  

	2.	Appointment of BUYER’s Supervisor: 

 The BUYER may send to and maintain at the Shipyard, at the BUYER’s own cost and expense, one supervisor (herein called the “Supervisor”) who shall be duly authorized in writing by the BUYER, which authorization shall be
described in a separate letter to be sent to the BUILDER prior to the Supervisor’s arrival, to act on behalf of the BUYER in connection with the modifications of the Specifications, adjustments of the Contract Price and Delivery Date in
writing, approval of the plans and drawings, attendance to the tests and inspections relating to the DRILLSHIP, its machinery, equipment and outfittings, and any other matters for which he is specifically authorized by the BUYER. The Supervisor may
appoint assistant(s) to attend at the Shipyard for the purposes as aforesaid. In the event that assignment, novation or resale occurs under the Article XIII and as a result, BUYER’s Supervisor is changed during the construction of the
DRILLSHIP, any and all matters determined by mutual agreement between the BUYER’s Supervisor and the BUILDER prior to the dispatch of a new Supervisor shall be accepted and complied by the new Supervisor. In case two or more Supervisors are
dispatched to the Shipyard and authorized to perform the supervision, each of them will form uniform opinions between them to keep the design and specifications so as not to adversely affect the Contract Price and Delivery of the DRILLSHIP. In the
event of any additional costs attributable to dispatch of two or more Supervisors due to resale, novation, charter or any other occurrence otherwise resulting from the BUYER side, such costs shall be solely borne by the BUYER and the BUYER shall
reimburse and hold harmless the BUILDER from any such costs and expenses. 
  

 17 

	3.	Inspection by the Supervisor: 

 The necessary inspections of the DRILLSHIP, its machinery, equipment and outfittings shall be carried out by the Classification Society, other regulatory bodies and/or the Supervisor throughout the entire period of construction in order to
ensure that the design, construction, building, launching, equipping, testing and completion of the DRILLSHIP is duly performed in accordance with the Contract and the Specifications. 
 The BUILDER shall give a written notice to the Supervisors reasonably in advance of the date and place of tests and inspections for the
convenience of their attendance. Failure of the Supervisors to be present at such tests and inspections after due notice to them as above provided, shall be deemed to be a waiver of their right to be present. In such cases, the BUYER shall be
obliged to accept the results of such tests and inspections on the basis of the BUILDER’s certificate subject to acceptance by the Classification Society. 
 Whether or not the Supervisors have been present, the BUILDER shall promptly deliver to the BUYER or the Supervisors a copy of the results of all tests and inspections. 
 For tests or inspections outside the Shipyard sufficient advance notice to allow for the Supervisor to arrange transportation shall be given.
This advance notice should not be less than three (3) days for tests or inspection that require air travel for attendance. 
 The inspection schedule must be reasonable at all times in order to allow the Supervisor to carry out their duties properly and inspections must be spread over reasonable time, but in follow building schedule at the same rate. 

BUILDER may request BUYER’s Supervisor to attend the inspection and tests during public holidays and weekends and/or Company holidays
in order to keep BUILDER’s construction schedule. BUYER’s Supervisor shall fully cooperate with BUILDER and promptly attend such inspection/tests including those for surface preparation and painting work, which are especially vulnerable to
weather condition and time interval. However, BUILDER shall keep such inspection and tests to a minimum and only when the inspection and tests affect BUILDER’s construction schedule. The BUILDER’s prior notice of such inspection/test
schedule shall be informed to the BUYER’s Supervisor one (1) day in advance as a minimum. 
  

 18 

 If any of the BUYER’s Supervisors discover any construction, material or workmanship
which is not deemed to conform to the requirements of this Contract and/or the Specifications, the BUYER’s Supervisors shall promptly give the BUILDER a notice in writing that such alleged non-conformity exists. Upon receipt of such notice from
the BUYER’s Supervisor, the BUILDER shall correct such non-conformity, if the BUILDER agrees to his view. Any disagreement shall be resolved in accordance with Paragraph 1 of Article XII and shall to the extent possible not prevent the progress
of the construction and the timely delivery of the DRILLSHIP. 
 If, following such disagreement, the Classification Society or
the arbitrator enters a determination in favor of the BUYER, then in such case the BUILDER shall immediately correct such non-conformity subject to Article VI 4. (b). If the Classification Society or the arbitrator enters a determination in favor of
the BUILDER, then the time for delivery of the DRILLSHIP shall be extended for the period of any actual delay in construction, if any, occasioned by such proceedings (but not by any time by which the period is extended owing to the BUILDER’s
own default), and the BUYER shall pay the BUILDER interest at the rate of five percent (5%) per annum on the outstanding Instalments of the Contract Price for the said period of delay. 
 In working hours during construction of the DRILLSHIP until delivery thereof, the BUYER’s Supervisors shall, subject to the reasonable
requirements of the Shipyard’s work program and safety control, be permitted free and ready access to the DRILLSHIP, her machinery and equipment, and to any other place where work on the DRILLSHIP is being done, or materials are being processed
or stored in connection with the construction of the DRILLSHIP, including the yards, workshops, stores and offices of the BUILDER, and the premises of subcontractors of the BUILDER, who are doing work or storing materials in connection with the
DRILLSHIP’s construction. 
  

	4.	Facilities: 

 The BUILDER shall
furnish the Supervisor and his assistant(s) with adequate office space and such other reasonable facilities according to the BUILDER’s practice at or in the immediate vicinity of the Shipyard as may be necessary to enable them to effectively
carry out their duties. The BUYER shall pay for all such facilities other than office space at the BUILDER’s normal rate of charge. 
  

 19 

	5.	Liability of BUILDER: 

 The
BUILDER agrees to fully protect, defend, indemnify and hold BUYER harmless from and against all liabilities, obligations, claims or actions for personal injury or death arising out of performance by BUILDER or BUYER of their obligations hereunder
prior to the acceptance by BUYER of the DRILLSHIP, and asserted by or on behalf of, 
  

	 	(i)	any employee, agent, contractor, or subcontractor of BUILDER, or 

  

	 	(ii)	any employee of any agent, contractor, or subcontractor of BUILDER, regardless of the basis of such claims and even if such claims should arise out of the sole or
concurrent fault or negligence of BUYER, or any employee, agent, contractor or subcontractor of BUYER. 

 Similarly, the BUYER agrees to fully protect, defend, indemnify and hold BUILDER harmless from and against all liabilities, obligations, claims or actions for personal injury or death arising out of performance by BUILDER or BUYER of their
obligations hereunder prior to the acceptance by BUYER of the DRILLSHIP, and asserted by or on behalf of, 
  

	 	(i)	any employee, agent, contractor, or subcontractor of BUYER, or 

  

	 	(ii)	any employee of any agent, contractor, or subcontractor of BUYER, regardless of the basis of such claims and even if such claims should arise out of the sole or
concurrent fault or negligence of BUILDER, or any employee, agent or subcontractor of BUILDER. 

  

	6.	Responsibility of BUYER: 

 The
BUYER shall undertake and assure that the Supervisor shall carry out his duties hereunder in accordance with the normal shipbuilding practice of the BUILDER, which BUILDER represents and confirms is in all material respects in accordance with normal
shipbuilding practice and in such a way so as to avoid any unnecessary increase in building cost, delay in the construction of the DRILLSHIP, and/or any disturbance in the construction schedule of the BUILDER. 
 The BUILDER has the right to request the BUYER to replace the Supervisor who is deemed unsuitable and unsatisfactory for the proper progress
of the DRILLSHIP’s design, construction, building, launching, equipping, and completion. The BUYER shall investigate the situation by sending its representative(s) to the Shipyard if necessary, and if the BUYER considers that such
BUILDER’s request is justified, the BUYER shall effect such replacement as soon as conveniently possible. 
  

 20 

	7.	Delivery and Construction Schedule: 

 Attached hereto as Exhibit “3” is a tentative Delivery and Construction Schedule, and within one hundred and eighty (180) days after the date of this Contract, BUILDER shall deliver or cause to be delivered to BUYER a final
Delivery and Construction Schedule (herein, as from time to time amended with notice to the BUYER, referred to as the “Schedule”), prepared in reasonable detailed schedule and setting forth the estimated time table for the design,
construction, building, launching, equipping, testing and completion of the DRILLSHIP, it being understood that the Schedule may be used by BUYER for purposes of verifying and measuring the progress being made under the terms of this Contract. In
the event the actual progress of the construction of the DRILLSHIP is lagging behind the Schedule, the BUILDER shall issue a recovery plan to overcome such lagging so that the planned Delivery Date shall not be affected. 
 During the course of performance of this Contract the BUILDER shall submit to the BUYER on a monthly basis; 
  

	a)	a status report on the DRILLSHIP’s construction as compared with the Schedule; 

  

	b)	a report setting out the actual progress in performance of this Contract during the previous month as compared with the Schedule, including monthly progress photographs
illustrating the progress of the construction; 

  

	c)	a list of modifications or changes (if any) agreed during the previous month; 

  

	d)	a document register showing the status of document preparation and planned and actual completion of documents. 

 (End of Article) 
  

 21 

 ARTICLE V - MODIFICATIONS, CHANGES AND EXTRAS 
  

	1.	How Effected: 

 The
Specifications may be modified and/or changed by written agreement of the parties, however, that any modifications and/or changes requested by the BUYER or an accumulation of such modifications and/or changes will not adversely affect the
BUILDER’s planning or program in relation to the BUILDER’s other commitments and if the BUYER shall assent to adjustment of the Contract Price, time for delivery of the DRILLSHIP, other terms and conditions of this Contract and the
Specifications occasioned by or resulting from such modifications and/or changes. The BUILDER hereby agrees to exert its best efforts to accommodate such reasonable request by the BUYER so that the said changes and/or modifications may be made at a
reasonable cost and within the shortest period of time that is reasonably possible. 
 Any such agreement for modifications
and/or changes shall include an agreement as to the increase or decrease, if any, in the Contract Price of the DRILLSHIP together with an agreement as to any extension or reduction in the time of delivery, or any other alterations in this Contract
or the Specifications occasioned by such modifications and/or changes. 
 The aforementioned agreement to modify and/or change
the Specifications may be effected by an exchange of letters signed by the authorized representatives of the parties hereto, or telefax confirmed in writing, manifesting such agreement. Such letters and confirmed message exchanged by the parties
hereto pursuant to the foregoing shall constitute an amendment of the Specifications, and such letters and message shall be incorporated into this Contract and made a part hereof. 
 The failure of the parties to agree on the increase or decrease in the Contract Price, or extension or reduction in the time of delivery, if
any, for any modifications or changes requested by the BUYER shall not prevent the BUILDER from performing any agreed work so as not to prevent the proper progress of the DRILLSHIP’s design, construction, building, launching, equipping, testing
and completion, but shall be dealt with in accordance with Article XII. 
  

 22 

 The BUILDER may make minor changes to the Specifications, if found necessary for
introduction of improved production methods or otherwise, provided that the BUILDER shall first obtain the BUYER’s approval that shall not be unreasonably withheld. 
  

	2.	Changes in Rules of Classification Society, Regulations, etc.: 

 If, after the Effective Date of this Contract, any requirements as to Classification Society, or as to the rules and regulations to which the construction of the DRILLSHIP is required to conform, are
altered or changed by the Classification Society or regulatory bodies authorized to make such alterations or changes, either of the parties hereto, upon receipt of information thereof, shall transmit such information in full to the other party in
writing within fourteen (14) days after receipt of the said information and thereafter the BUYER shall instruct the BUILDER in writing if such alterations or changes shall be made in the DRILLSHIP or not, in the BUYER’s sole discretion.

  

	 	(a)	However, if such alterations or changes are compulsory for the construction of DRILLSHIP, the BUILDER shall incorporate such alterations or changes into the
construction of the DRILLSHIP, provided that the parties shall agree on any increase or decrease in the Contract Price, extension or reduction in time of delivery of the DRILLSHIP and other terms and conditions of this Contract and the
Specifications occasioned by or resulting from such alterations or changes. 

  

	 	(b)	If such alterations or changes are not compulsory for the construction of the DRILLSHIP, but the BUYER desires to incorporate such alterations or changes into the
construction of the DRILLSHIP, then the BUYER shall notify the BUILDER in writing of such intention within fourteen (14) days after receipt of the said information. The BUILDER shall accept such alterations or changes, provided that the parties
shall agree on any increase or decrease in the Contract Price, extension or reduction in time of delivery of the DRILLSHIP and other terms and conditions of this Contract and the Specifications occasioned by or resulting from such alterations or
changes. 

 Such agreement of the BUYER shall be effected in the same manner as provided in Paragraph 1 of this
Article for modifications and/or changes of the Specifications. The failure of the parties to agree on the increase or decrease in the Contract Price, or extension or reduction in the time of delivery, if any, for any modifications or changes
requested by the BUYER shall not prevent the BUILDER from performing any agreed work so as not to prevent the proper progress of the DRILLSHIP’s design, construction, building, launching, equipping, testing and completion, but shall be dealt
with in accordance with Article XII. 
  

 23 

	3.	Substitution of Materials: 

 In
the event that any of the materials required by the Specifications or otherwise under this Contract for the construction of the DRILLSHIP can not be procured in time to effect timely delivery of the DRILLSHIP, or are in short supply, (other than as
the result of any neglect or omission on the part of the BUILDER) the BUILDER may, provided the BUYER so agrees in writing, supply other materials and equipment of the best available and like quality, capable of meeting the requirements of the
Classification Society and of the rules, regulations, requirements and recommendations with which the construction of the DRILLSHIP must comply. Any agreement as to such substitution of materials shall be effected in the manner as provided in
Paragraph 1 of this Article, and shall, likewise, include decrease or increase in the Contract Price and other terms and conditions of this Contract affected by such substitution. 
 (End of Article) 
  

 24 

 ARTICLE VI - TRIALS AND ACCEPTANCE 
  

	1.	Notice: 

 The sea trial shall
start when the DRILLSHIP is reasonably completed in all material respects according to the Specifications, and otherwise any and all tests or trials shall be performed and notified as per the Specifications. 
 The BUILDER shall give the BUYER at least Thirty (30) days estimated prior notice and seven (7) days confirming prior notice in
writing or by telefax confirmed in writing of the time and place of the sea trial of the DRILLSHIP, and the BUYER shall promptly acknowledge receipt of such notice. The BUYER shall have its representative and his assistant(s) on board the DRILLSHIP
to witness such sea trial. 
 Failure in attendance of the BUYER’s representative at the sea trial of the DRILLSHIP for any
reason whatsoever after due notice to the BUYER as above provided shall be deemed to be a waiver by the BUYER of its right to have its representative on board the DRILLSHIP at the sea trial, and the BUILDER may conduct the sea trial without
attendance of the BUYER’s representative, and in such case the BUYER shall be obligated to accept the DRILLSHIP on the basis of certificates of the Classification Society and a certificate of the BUILDER stating that the DRILLSHIP, upon sea
trial, is found to conform to this Contract and the Specifications. 
  

	2.	Weather Condition: 

 The sea
trial and any other tests and trials of the DRILLSHIP as per the Specifications shall be carried out under the weather condition that is deemed favorable enough by the judgment of both the BUYER and the BUILDER and as per the Specifications. In the
event of unfavorable weather on the date specified for the sea trial or other tests and trials as per the Specifications, the same shall take place on the first available day thereafter that the weather condition permits. It is agreed that, if
during the sea trial or other tests and trials of the DRILLSHIP as per the Specifications, the weather should suddenly become so unfavorable that orderly conduct of the test or trial can no longer be continued, the test or trial shall be
discontinued and postponed until the first favorable day next following, unless the BUYER shall assent in writing to acceptance of the DRILLSHIP on the basis of the tests and trials already made before such discontinuance has occurred. 

 

 25 

 Any delay of sea trial caused by such unfavorable weather condition shall operate to
postpone the Delivery Date by the period of the delay involved and such delay shall be deemed as permissible delay in the delivery of the DRILLSHIP. 
  

	3.	How Conducted: 

  

	 	(a)	The sea trial and any other tests and trials as per the Specifications shall be conducted in the manner prescribed in the Specifications, and shall prove full
fulfillment of the performance requirements for the trial run as set forth in the Specifications. 

  

	 	(b)	All risk and expenses in connection with the sea trial and any other tests and trials are to be for account of the BUILDER and the BUILDER shall provide, at its own
expense, fuel oil, lubes, stores and the necessary crew to comply with conditions of safe navigation. 

  

	 	(c)	Notwithstanding above (b), the BUYER shall provide drilling crews at it’s own expense during tests and trials for drilling system. The crews shall perform the
tests and trials under the BUILDER’s responsibility and risk and familiarized themselves with the system for the final take over of the Drillship. 

  

	4.	Method of Acceptance or Rejection. 

  

	 	(a)	Upon completion of the sea trial, the BUILDER shall give the BUYER a notice by telefax of completion of the trial run, as and if the BUILDER considers that the results
of trial run indicate conformity of the DRILLSHIP to this Contract and the Specifications. The BUYER shall, within Five (5) days after receipt of such notice from the BUILDER, notify the BUILDER by telefax of its acceptance or rejection of the
DRILLSHIP’s conformity to this Contract and Specifications. 

  

	 	(b)	However, if the result of the sea trial is unacceptable, or if the DRILLSHIP, or any part or equipment thereof, (except a defect in the BUYER’s supplies not being
the responsibility of the BUILDER) does not conform to the requirements of this Contract and/or the Specifications, or if the BUILDER is in agreement to nonconformity as specified in the BUYER’s notice of rejection, then, the BUILDER shall take
necessary steps to correct such non-conformity. 

  

 26 

 Upon completion of correction of such non-conformity, and re-test or trial if necessary, the
BUILDER shall give the BUYER notice thereof by telefax confirmed in writing. 
 The BUYER shall, within Five (5) days after
receipt of such notice from the BUILDER, notify the BUILDER of its acceptance or rejection of the DRILLSHIP. 
  

	 	(c)	In the event that the BUYER rejects the DRILLSHIP, the BUYER shall indicate in detail in its notice of rejection in what respect the DRILLSHIP, or any part or equipment
thereof (except a defect in the BUYER’s supplies not the responsibility of the BUILDER) does not conform to this Contract and/or the Specifications. 

  

	 	(d)	In the event that the BUYER fails to notify the BUILDER by telefax confirmed in writing of the acceptance of or the rejection together with the reason therefore of the
DRILLSHIP within the period as provided in the above Sub-paragraph (a) or (b), the BUYER shall be deemed to have accepted the trial results and/or the DRILLSHIP, as appropriate. 

  

	 	(e)	Any dispute between the BUILDER and the BUYER as to the conformity or nonconformity of the DRILLSHIP to the requirements of this Contract and/or the Specifications
shall be submitted for final decision in accordance with Article XII hereof. 

  

	 	(f)	The BUYER shall not be entitled to refuse acceptance of the DRILLSHIP by reason of any minor or insubstantial non-conformity with this Contract and the Specifications.
For the purpose of this Sub-paragraph, a minor or insubstantial nonconformity shall mean a non-conformity that does not impair the safe or efficient operation of the DRILLSHIP and shall exclude any non-conformities affecting compliance with the
rules and regulations of the Classification Society and other relevant Regulatory Bodies of the DRILLSHIP as defined in the Specifications. The BUILDER shall remain obliged to correct and/or remedy such minor or insubstantial non-conformities as
soon as reasonably possible following delivery of the DRILLSHIP. 

  

	5.	Effect of Acceptance: 

 Acceptance of the DRILLSHIP as above provided shall be final and binding so far as conformity of the DRILLSHIP to this Contract and the Specifications is concerned and

  

 27 

 
shall preclude the BUYER from refusing formal delivery of the DRILLSHIP as hereinafter provided, if the BUILDER complies with all other procedural requirements for delivery as provided in Article
VII hereof. However, the BUYER’s acceptance of the DRILLSHIP shall not affect the BUYER’s rights under Article IX hereof. 
  

	6.	Disposition of Surplus Consumable Stores: 

 Any fuel oil furnished and paid for by the BUILDER for sea trial remaining on board including in systems and pipes of the DRILLSHIP, at the time of acceptance of the DRILLSHIP by the BUYER, shall be
bought by the BUYER from the BUILDER at the BUILDER’s purchase price for such supply in Korea and payment by the BUYER thereof shall be made at the time of delivery of the DRILLSHIP. 
 The BUILDER shall pay the BUYER at the time of delivery of the DRILLSHIP an amount for the consumed quantity during sea trial of any
lubricating oil and greases which were furnished and paid for by the BUYER, if any, at the BUYER’s purchase price thereof. 
 (End of Article) 
  

 28 

 ARTICLE VII - DELIVERY 
  

	1.	Time and Place: 

 The DRILLSHIP
shall be delivered by the BUILDER to the BUYER at the Shipyard on or before March 31, 2011 (unless delays occur in the construction of the DRILLSHIP or in any performance required under this Contract due to causes which under the terms of this
Contract permit postponement of the date of delivery, in which event, the aforementioned date for delivery of the DRILLSHIP shall be changed accordingly) or, such earlier date after completion of the DRILLSHIP according to this Contract and the
Specifications. 
 The aforementioned date, or such earlier or later date to which the requirement of delivery is advanced or
postponed pursuant to this Contract, is herein called the “Delivery Date”. 
  

	2.	When and How Effected: 

 Provided
that the BUILDER and the BUYER shall have fulfilled all of their obligations stipulated under this Contract, the delivery of the DRILLSHIP shall be effected forthwith by the concurrent delivery by each of the parties hereto to the other of the
PROTOCOL OF DELIVERY AND ACCEPTANCE, acknowledging delivery of the DRILLSHIP by the BUILDER and acceptance thereof by the BUYER. 
  

	3.	Documents to be delivered to BUYER: 

 Upon delivery and acceptance of the DRILLSHIP, the BUILDER shall deliver to the BUYER the following documents, which shall accompany the PROTOCOL OF DELIVERY AND ACCEPTANCE. 
  

	 	(a)	PROTOCOL OF TRIALS of the DRILLSHIP made pursuant to the Specifications. 

  

	 	(b)	PROTOCOL OF INVENTORY of the equipment of the DRILLSHIP, including spare parts and the like, as specified in the Specifications. 

  

	 	(c)	PROTOCOL OF STORES OF CONSUMABLE NATURE referred to under paragraph 6 of Article VI hereof. 

  

 29 

	 	(d)	ALL CERTIFICATES including the BUILDER’s CERTIFICATE required to be furnished upon delivery of the DRILLSHIP pursuant to this Contract and the Specifications.

 It is agreed that if, through no fault on the part of the BUILDER, the Classification certificates and/or other
certificates are not available at the time of delivery of the DRILLSHIP, provisional certificates shall be accepted by the BUYER, provided that the BUILDER shall furnish the BUYER with the formal certificates as promptly as possible after such
certificates have been issued. 
 Application and certificate for statutory inspections for the registry of the DRILLSHIP shall
be arranged by the BUYER at its expense. 
  

	 	(e)	DECLARATION OF WARRANTY of the BUILDER that the DRILLSHIP is delivered to the BUYER free and clear of any liens, charges, claims, mortgages, or other encumbrances upon
the BUYER’s title thereto, and in particular that the DRILLSHIP is absolutely free of all burdens in the nature of imposts, taxes or charges imposed by Korean Governmental Authorities or any other Authorities, as well as all liabilities of the
BUILDER to its subcontractors, employees and crew, and of all the liabilities arising from the operation of the DRILLSHIP in trial runs, or otherwise, prior to delivery. 

  

	 	(f)	DRAWINGS AND PLANS and any other technical documentation pertaining to the DRILLSHIP as stipulated in the Specifications 

  

	 	(g)	COMMERCIAL INVOICE. 

  

	 	(h)	Bill of Sale to be notarized and apostiled 

  

	 	(i)	Builder’s Resolution of Board of Directors to be notarized and apostiled 

  

	 	(j)	Power of Attorney to be notarized and apostiled 

  

	 	(k)	Goodstanding Certificate 

  

	 	(1)	Confirmation by ABS to Malta Maritime Authority 

  

	 	(m)	Builder’s Certificate 

  

	4.	Tender of DRILLSHIP: 

 If the
BUYER fails to take delivery of the DRILLSHIP after completion thereof according to this Contract and the Specifications without any justifiable reason, the BUILDER shall have the right to tender delivery of the DRILLSHIP after accomplishment of all
BUILDER’s obligations as provided herein. 
  

 30 

	5.	Title and Risk: 

 Title to and
risk of loss of the DRILLSHIP shall pass to the BUYER only upon the delivery and acceptance thereof having been completed as stated above; it being expressly understood that, until such delivery is effected, title to and risk of damage to or loss of
the DRILLSHIP and her equipment shall be in the BUILDER. 
  

	6.	Removal of DRILLSHIP: 

 The BUYER
shall take possession of the DRILLSHIP immediately upon delivery and acceptance thereof and shall remove the DRILLSHIP from the premises of the Shipyard within Three (3) days after delivery and acceptance thereof is effected. 
 If the BUYER shall not remove the DRILLSHIP from the premises of the Shipyard within the aforesaid Three (3) days, in such event, the
BUYER shall pay to the BUILDER the reasonable mooring charges of the DRILLSHIP. 
 (End of Article) 
  

 31 

 ARTICLE VIII - DELAYS AND EXTENSION OF TIME FOR DELIVERY (FORCE MAJEURE) 
  

	1.	Causes of Delay (Force Majeure): 

 If, at any time either the construction or delivery of the DRILLSHIP or any performance required hereunder as a prerequisite to the delivery thereof is delayed by any of the following events; namely war, acts of state or government,
blockade, revolution, insurrections, mobilization, civil commotion, riots, strikes, sabotage, lockouts, Acts of God or the public enemy, plague or other epidemics, quarantines, prolonged failure of electric current, freight embargoes, or defects in
major forgings or castings, if any, or shortage of materials, machinery or equipment in inability to obtain delivery or delays in delivery of materials, machinery or equipment other than resulting from any act, omission or improvidence of the
BUILDER or its agents, employees or Subcontractors, provided that at the time of ordering the same could reasonably be expected by the BUILDER to be delivered in time, or defects in materials, machinery or equipment which could not have been
detected by the BUILDER using reasonable care, or earthquakes, tidal waves, typhoons, hurricanes, prolonged or unusually severe weather conditions or delay in the construction of the BUILDER’s other new-building projects in the same dry-dock
due to any such causes as described in this Article which in turn delay the keel laying and eventual delivery of the DRILLSHIP in view of the Shipyard’s overall building program or the BUILDER’s performance under this Contract, or by
destruction of the premises or works of the BUILDER or its sub-contractors, or of the DRILLSHIP, or any part thereof, by fire, landslides, flood, lightning, explosion, or other causes beyond the control of the BUILDER, or its sub-contractors, as the
case may be, or for any other causes which, under terms of this Contract, authorize and permit extension of the time for delivery of the DRILLSHIP, then, in the event of delays due to the happening of any of the aforementioned contingencies, the
Delivery Date of the DRILLSHIP under this Contract shall be extended for a period of time which shall not exceed the total accumulated time of all such delays. 
 The BUILDER’s entitlement to extension of the Delivery Date due to any of the aforesaid events shall, however, always be subject to the delay, or any part of the delay, not being caused by the
BUILDER’s error, neglect, act or omission or that of its agents, employees or Subcontactors, and that the BUILDER having taken all reasonable steps to mitigate the effect of the event upon the Delivery Date. 
  

 32 

	2.	Notice of Delay: 

 Within Ten
(10) days after the date of occurrence of any cause of delay, on account of which the BUILDER claims that it is entitled under this Contract to a postponement of the Delivery Date, the BUILDER shall notify the BUYER in writing or by telefax
confirmed in writing of the date when such cause of delay occurred. Likewise, within Ten (10) days after the date of ending of such cause of delay, the BUILDER shall notify the BUYER in writing or by telefax confirmed in writing of the date
when such cause of delay ended. 
 The BUILDER shall also notify promptly the BUYER of the period, by which in their opinion the
Delivery Date is postponed by reason of such cause of delay. If the BUILDER does not give the timely advice as above, the BUILDER shall lose the right to claim such delays as permissible delay. 
 Failure of the BUYER to acknowledge to the BUILDER’s claim for postponement of the Delivery Date within Ten (10) days after receipt
by the BUYER of such notice of claim shall be deemed to be a waiver by the BUYER of its right to object to such postponement of the Delivery Date. 
  

	3.	Definition of Permissible Delay: 

 Delays on account of such causes as specified in Paragraph 1 of this Article and any other delay of a nature which under the terms of this Contract permits postponement of the Delivery Date shall be understood to be permissible delays and
are to be distinguished from unauthorized delays on account of which the Contract Price is subject to adjustment as provided for in Article III hereof. 
  

	4.	Right to Rescind for Excessive Delay: 

 If the total accumulated time of all delays claimed by the BUILDER on account of the causes specified in Paragraph 1 of this Article, excluding other delays of the nature which under the terms of this Contract permit postponement of the
Delivery Date, amounts to Two Hundred and Ten (210) days or more, then, in such event, the BUYER may rescind this Contract in accordance with the provisions of Article X hereof. 
 The BUILDER may, at any time after the accumulated time of the aforementioned delays justifying rescission by the BUYER, demand in writing
that the BUYER shall

  

 33 

 
make an election, in which case the BUYER shall, within Fourteen (14) working days after such demand is received by the BUYER either notify the BUILDER of its intention to rescind this
Contract, or consent to a postponement of the Delivery Date to an agreed specific future date, which date BUILDER represents to BUYER is the earliest date BUILDER can deliver the DRILLSHIP to BUYER, based on the circumstances then known, it being
understood by the parties hereto that if the DRILLSHIP is not delivered by such future date, the BUYER shall have the same right of rescission upon the same terms and conditions as hereinabove provided. 
 (End of Article) 
  

 34 

 ARTICLE IX - WARRANTY OF QUALITY 
  

	1.	Guarantee: 

 The BUILDER, for the
period of Twelve (12) months after delivery of the DRILLSHIP (hereinafter called “Guarantee Period”), guarantees the DRILLSHIP and her engines, including all parts and equipment manufactured, furnished or installed by the BUILDER or
its subcontractors under this Contract, and including the machinery, equipment and appurtenances thereof (including the installation work performed or required to be performed by BUILDER under this Contract for the BUYER supplied or furnished
equipment), under the Contract but excluding any item which is supplied or designated by the BUYER or by any other bodies on behalf of the BUYER, against all defects discovered within the Guarantee Period which are due to defective material, design
and/or poor workmanship or negligent or other improper acts or omissions on the part of the BUILDER or its subcontractors (hereinafter called the “Defect” or “Defects”) and are not a result of accident, ordinary wear and tear,
misuse, mismanagement, negligent or other improper acts or omissions or neglect on the part of the BUYER, its employee or agents. 
  

	2.	Notice of Defects: 

 The BUYER
shall notify the BUILDER in writing, or by telefax confirmed in writing, of any Defect for which claim is made under this guarantee, as promptly as possible after discovery thereof. The BUYER’s written notice shall describe the nature, cause
and extent of the Defects. 
 The BUILDER shall have no obligation for any Defect discovered prior to the expiry date of the
Guarantee Period, unless notice of such Defect is received by the BUILDER not later than Fourteen (14) working days after the expiry of the Guarantee Period. 
  

	3.	Remedy of Defects: 

  

	 	(a)	The BUILDER shall remedy, at its expense, any Defect against which the DRILLSHIP is guaranteed under this Article, by making all necessary repairs or replacements at
the Shipyard. 

  

 35 

	 	(b)	However, if it is impracticable to bring the DRILLSHIP to the Shipyard, the BUYER may cause the necessary repairs or replacements to be made elsewhere which is deemed
suitable for the purpose, provided that, in such event, the BUILDER may forward or supply replacement parts or materials to the nearest airport or port from the DRILLSHIP, unless forwarding or supplying thereof would impair or delay the operation or
working schedule of the DRILLSHIP. In the event that the BUYER proposes to cause the necessary repairs or replacements for the DRILLSHIP to be made at any other shipyard or works than the Shipyard, the BUYER shall first, but in all events as soon as
possible, give the BUILDER notice in writing or by telefax confirmed in writing of the time and place when and where such repairs will be made, and if the DRILLSHIP is not thereby delayed, or her operation or working schedule is not thereby
impaired, the BUILDER shall have the right to verify by its own representative(s) the nature, cause and extent of the Defects complained of. The BUILDER shall, in such case, promptly advise the BUYER by telefax or telex after such examination has
been completed, of its acceptance or rejection of the Defects as ones that are covered by the guarantee herein provided. Upon the BUILDER’s acceptance of the Defects as justifying remedy under this Article, or upon award of the arbitration so
determining, the BUILDER shall compensate the BUYER for such repairs or replacements a sum equal to the necessary and reasonable cost of making the same repairs or replacements in a competent shipyard at a reasonable location, at the prices
prevailing at the time of such repairs or replacements are made. The reimbursement of the cost incurred in relation to guarantee works shall be paid after the repairs or replacements are made but if not made or the costs incurred for each such
repair or replacement is below US$ 100,000, such costs shall be paid at the expiration of the guarantee period. 

  

	 	(c)	The BUILDER guarantees repairs or replacements to the DRILLSHIP made under the guarantee in paragraph 1 of this Article for a further period of Twelve (12) months
from the date of completion of such repair or replacement. In any case, the maximum guarantee period shall not exceed Eighteen (18) months. 

  

	 	(d)	In any case, the DRILLSHIP shall be taken, at the BUYER’s cost and responsibility, to the place elected, ready in all respects for such repairs or replacement.

  

	 	(e)	Any dispute under this Article shall be referred to arbitration in accordance with the provisions of Article XII hereof. 

  

 36 

	4.	Extent of BUILDER’s Responsibility 

  

	 	(a)	The BUILDER shall have no responsibility or liability for any other defect whatsoever in the DRILLSHIP than the Defects specified in Paragraph 1 of this Article. Nor
the BUILDER shall in any circumstance be responsible or liable for any consequential or special loss, damage or expense including but not limited to loss of time, loss of profit of earning or demurrage directly or indirectly occasioned to the BUYER
by reason of the Defects specified in Paragraph 1 of this Article or due to repairs or other works done to the DRILLSHIP to remedy such Defects. 

  

	 	(b)	The BUILDER shall not be responsible for any defect in any part of the DRILLSHIP which may, subsequently to delivery of the DRILLSHIP, have been replaced or repaired in
any way by any other contractor, or for any defect which have been caused or aggravated by omission or improper use and maintenance of the DRILLSHIP on the part of the BUYER, its servants or agents or by ordinary wear and tear or by any other reason
beyond control of the BUILDER. 

  

	 	(c)	The guarantee contained as hereinabove in this Article replaces and excludes any other liability, guarantee, warranty and/or condition imposed or implied by the law,
customary, statutory or otherwise, by reason of the construction and sale of the DRILLSHIP by the BUILDER for and to the BUYER. 

 (End of Article) 
  

 37 

 ARTICLE X - RESCISSION BY BUYER 
  

	1.	Notice: 

 The payments made by
the BUYER prior to delivery of the DRILLSHIP shall be in the nature of advances to the BUILDER, and in the event that the DRILLSHIP is rejected by the BUYER or the Contract is rescinded by the BUYER in accordance with the terms of this Contract
under and pursuant to any of the provisions of this Contract specifically permitting the BUYER to do so, then the BUYER shall notify the BUILDER in writing or by telefax confirmed in writing, and such rescission shall be effective as of the date
when notice thereof is received by the BUILDER. 
  

	2.	Refundment by BUILDER: 

 In case
the BUILDER receives the notice stipulated in Paragraph 1 of this Article, the BUILDER shall promptly refund to the BUYER the full amount of all sums paid by the BUYER to the BUILDER on account of the DRILLSHIP, together with the interest thereon,
unless the BUILDER proceeds to the arbitration under the provisions of Article XII hereof. The BUILDER shall also return any BUYER’s Supplies, or if such cannot be returned, the BUILDER shall pay to the BUYER an amount equal to the BUYER’s
costs for such equipment. 
 In the event of such rescission by the BUYER, the BUILDER shall pay the BUYER interest at the rate
of six percent (6%) per annum on the amount required herein to be refunded to the BUYER, computed from the respective dates on which such sums were paid by the BUYER to the BUILDER to the date of remittance by transfer of such refund to the
BUYER by the BUILDER, provided, however, that if the said rescission by the BUYER is made under the provisions of Paragraph 4 of Article VIII hereof, then in such event the BUILDER shall pay the BUYER interest at the rate of four and a half percent
(4.5%) per annum on the sums refundable. 
 As security for refund of installments prior to delivery of the DRILLSHIP, the
BUILDER shall furnish to BUYER, prior to the due date of the first installment, with an irrevocable letter of guarantee covering the amount of such pre-delivery installments and issued by KEXIM, KDB, or a bank acceptable to the BUYER in favour of
the BUYER. Such letter of guarantee shall have substantially the same form and substance as Exhibit “4” annexed hereto. 
  

 38 

	3.	Discharge of Obligations: 

 Upon
such refund by the BUILDER to the BUYER, all obligations, duties and liabilities of each of the parties hereto to the other under this Contract shall be forthwith completely discharged, without prejudice, however, to any claims either party may have
resulting from the other party’s breach of any of its obligations under this Contract. 
 (End of Article) 
  

 39 

 ARTICLE XI - BUYER’S DEFAULT 
  

	1.	Definition of Default: 

 The
BUYER shall be deemed to be in default of its performance of obligations under this Contract in the following cases: 
  

	 	(a)	If the first installment is not paid in full by the BUYER within Five (5) banking days in New York after the signing of the Contract and the receipt of original
Refundment Guarantee or if any of the second, third or fourth installment is not paid in full by the BUYER to the BUILDER within Three (3) banking days in New York after such installment becomes due and payable as provided in Article II hereof;
or 

  

	 	(b)	If a performance guarantee by Cardiff Marine Inc. is not presented to the BUILDER within 5 banking days from the Effective Date of this Contract.

  

	 	(c)	If the fifth installment, after adjustment pursuant to the relevant provisions of this Contract, is not paid in full by the BUYER to the BUILDER concurrently with the
delivery of the DRILLSHIP as provided in Article II hereof; or 

  

	 	(d)	If the BUYER, when the DRILLSHIP is duly tendered for delivery by the BUILDER in accordance with the provisions of this Contract, fails to accept the DRILLSHIP within
Five (5) days from the tendered date without any specific and valid ground thereof under this Contract. 

  

	2.	Effect of Default on or before Delivery of DRILLSHIP: 

  

	 	(a)	Should the BUYER make default in payment of any installment of the Contract Price on or before delivery of the DRILLSHIP, the BUYER shall pay the installment(s) in
default plus accrued interest thereon at the rate of six percent (6%) per annum computed from the due date of such installment provided in Paragraph 4 of Article II hereof up to the date when the BUILDER receives the payment, and, for the
purpose of Paragraph 1 of Article VII hereof, the Delivery Date of the DRILLSHIP shall be automatically extended by a period of continuance of such default by the BUYER. 

 In any event of default by the BUYER, the BUYER shall also pay all charges and expenses incurred to the BUILDER in direct consequence of such
default. 
  

 40 

	 	(b)	If any default by the BUYER continues for a period of Fifteen (15) days, the BUILDER may, at its option, rescind this Contract by giving notice of such effect to
the BUYER by telefax confirmed in writing. 

 Upon dispatch by the BUILDER of such notice of rescission, this
Contract shall be forthwith rescinded and terminated. In the event of such rescission of this Contract, the BUILDER shall be entitled to retain any installment or installments already paid by the BUYER to the BUILDER on account of this Contract and
the BUYER’s Supplies already delivered to the Shipyard, if any. 
  

	3.	Disposal of DRILLSHIP: 

  

	 	(a)	In the event that this Contract is rescinded by the BUILDER under the provisions of Paragraph 2(b) of this Article, the BUILDER may, at its sole discretion, either
complete the DRILLSHIP and sell the same, or sell the DRILLSHIP in its incomplete state, free of any right or claim of the BUYER. Such sale of the DRILLSHIP by the BUILDER shall be either by public auction or private contract at the BUILDER’s
sole discretion and on such terms and conditions as the BUILDER shall deem fit. 

  

	 	(b)	In the event of such sale of the DRILLSHIP, the amount of the sale received by the BUILDER shall be applied firstly to all expenses attending such sale or otherwise
incurred to the BUILDER as a result of the BUYER’s default, secondly to the payment of all costs and expenses of construction of the DRILLSHIP incurred to the BUILDER less BUYER’s Supplies and the installments already paid by the BUYER,
and then to the compensation to the BUILDER for a reasonable cost due to rescission of this Contract, and finally to the repayment to the BUYER if any balance is obtained. 

  

	 	(c)	If the proceeds of sale are insufficient to pay such total costs and loss of profit as aforesaid, the BUYER shall promptly pay the deficiency to the BUILDER upon
request. 

 (End of Article) 
  

 41 

 ARTICLE XII - ARBITRATION 
  

	1.	Decision by the Classification Society: 

 If any dispute arises between the parties hereto in regard to the design and/or construction of the DRILLSHIP, its machinery and equipment, and/or in respect of the materials and/or workmanship thereof and/or thereon, and/or in respect of
interpretations of this Contract or the Specifications, the parties may by mutual agreement refer the dispute to the Classification Society or to such other expert as may be mutually agreed between the parties hereto, and whose decision shall be
final, conclusive and binding upon the parties hereto. 
  

	2.	Proceedings of Arbitration in London UK.: 

 In the event that the parties hereto do not agree to settle a dispute according to Paragraph 1 of this Article and/or in the event of any other dispute of any kind whatsoever between the parties and
relating to this Contract, including any dispute regarding its validity and existence, or its rescission or any stipulation herein, such dispute shall be submitted to arbitration in London. 
 If the dispute or difference does not exceed the sum of Five Hundred Thousand United States Dollars (US$ 500,000) the arbitration shall be
conducted in accordance with the London Maritime Arbitrators Association’s Small Claims Procedure current at the time when the arbitration proceedings are commenced. 
 For disputes of value above Five Hundred Thousand United States Dollars (US$ 500,000) each party shall appoint an arbitrator and in the event that they cannot agree, the two arbitrators so appointed shall
appoint an Umpire. 
 If the two arbitrators are unable to agree upon an Umpire within Twenty (20) days after appointment of
the second arbitrator, either of the said two arbitrators may apply to the President for the time being of the London Maritime Arbitrators Association to appoint the Umpire, and the two arbitrators and the Umpire shall constitute the Arbitration
Board. 
 Such arbitration shall be in accordance with and subject to the provisions of the British Arbitration Act 1996, or any
statutory modification or re-enactment thereof for the time being in force. 
  

 42 

 Either party may demand arbitration of any such dispute by giving notice to the other party.
Any demand for arbitration by either of the parties hereto shall state the name of the arbitrator appointed by such party and shall also state specifically the question or questions as to which such party is demanding arbitration. 
 Within Fourteen (14) days after receipt of notice of such demand for arbitration, the other party shall in turn appoint a second
arbitrator and give notice in writing of such appointment to the party demanding arbitration. If a party fails to appoint an arbitrator as aforementioned within Fourteen (14) days following receipt of notice of demand for arbitration by the
other party, the party failing to appoint an arbitrator shall be deemed to have accepted and appointed, as its own arbitrator, the arbitrator appointed by the party demanding arbitration and the arbitration shall proceed before this sole arbitrator
who alone in such event shall constitute the Arbitration Board. 
 The award of the Arbitration Board shall be final and binding
on both parties. 
  

	3.	Notice of Award: 

 The award
decision shall immediately be communicated to the BUYER and the BUILDER by facsimile and confirmed in writing. 
  

	4.	Expenses: 

 The Arbitration Board
shall determine which party shall bear the expenses of the arbitration or the portion of such expenses that each party shall bear. 
  

	5.	Entry in Court: 

 In case of
failure by either party to respect the award of the arbitration, the judgment may be entered in any proper court having jurisdiction thereof. 
  

	6.	Alteration of Delivery Date: 

 In
the event of reference to arbitration of any dispute arising out of matters occurring prior to delivery of the DRILLSHIP, the award may include any adjustment of the Delivery Date that the Arbitration Board may deem appropriate. 
 (End of Article) 
  

 43 

 ARTICLE XIII - SUCCESSOR AND ASSIGNS 
 The BUILDER agrees that, prior to delivery of the DRILLSHIP, this Contract may, with the prior written approval of the BUILDER, which the BUILDER shall not unreasonably withhold, be transferred to and the
title thereof may be taken by another company. 
 In the event of any assignment or novation pursuant to the terms of this Contract, the
assignee shall succeed to all of the rights and obligations of the assignor under this Contract and the assignor shall remain responsible for the fulfillment of this Contract. 
 In the event of the assignment or novation from the BUYER to any other individual or company pursuant to this provision, the BUILDER shall be entitled to request issuance of a Performance Guarantee from
the BUYER having identical form and contents as Exhibit “5” annexed hereto. 
 In the event of any resale, assignment or novation of
the Contract, any and all matters determined by mutual agreement between the BUYER and the BUILDER prior to the resale, assignment or novation of the Contract shall be accepted and complied by the New BUYER (i.e., assignee). If the New BUYER or its
Supervisor makes unreasonable requests that may have a significant impact on the delivery schedule of the DRILLSHIP and/or costs of construction (including, without limitation to, request for substantial change of ship type or excessive revision of
design specification, etc.), the BUILDER shall be entitled to withhold its consent to the resale, assignment or novation of the Contract but in such situation the BUILDER may grant at its option consent to such resale, assignment or novation if the
New BUYER will bear any and all direct and indirect costs attributable to such requests and changes resulting therefrom. 
 (End
of Article) 
  

 44 

 ARTICLE XIV - TAXES AND DUTIES 
  

	1.	Taxes and Duties Incurred in Korea: 

 The BUILDER shall bear and pay all taxes, duties, stamps and fees incurred in Korea in connection with execution and/or performance of this Contract as the BUILDER, except for any taxes and duties imposed in Korea upon the BUYER’s
Supplies. 
  

	2.	Taxes and Duties Incurred Outside Korea: 

 The BUYER shall bear and pay all taxes, duties, stamps and fees incurred outside Korea in connection with execution and/or performance of this Contract as the BUYER, except for taxes and duties imposed upon those items to be procured by the
BUILDER for construction. 
 (End of Article) 
  

 45 

 ARTICLE XV - PATENTS, TRADEMARKS, COPYRIGHTS, ETC. 
  

	1.	Patents: 

 BUILDER agrees to
defend, indemnify and hold BUYER harmless from any liability or claims of infringement of patent rights, utility model rights, trade mark rights or copyrights, or any other intellectual property rights of any third party relating to the construction
and supply of the DRILLSHIP. 
 With regard to the performance of the current Contract, notwithstanding anything to the contrary
herein, BUYER shall defend, indemnify and hold BUILDER harmless from any liability or claims of infringement of patent rights, utility model rights, trade mark rights or copyrights, or any other intellectual property rights of any third party
related to (i) process supplied by BUYER, (ii) BUYER’s Supplies and (iii) any construction, operation or use of the drilling system. 
 Except as otherwise provided for in this Contract, nothing contained herein shall be construed as transferring any rights in any patent, trademarks or copyrights utilized in the performance of this
Contract. 
  

	2.	General Plans, Specifications and Working Drawings: 

 The BUILDER retains all rights with respect to the Specifications, and plans and working drawings, technical descriptions, calculations, test results and other data, information and documents concerning
the design and construction of the DRILLSHIP, and the BUYER undertakes therefore not to disclose the same or divulge any information contained therein to any third parties, without the prior written consent of the BUILDER, such consent not to be
unreasonably withheld, except where it is necessary for usual operation, repair and maintenance of the DRILLSHIP. 
 (End of
Article) 
  

 46 

 ARTICLE XVI - BUYER’S SUPPLIES 
  

	1.	Responsibility of BUYER: 

  

	 	(a)	The BUYER shall, at its own risk, cost and expense, supply and deliver to the BUILDER all of the items to be furnished by the BUYER as specified in the Specifications
(herein called the BUYER’s Supplies) at warehouse or other storage of the Shipyard in the complete, proper condition ready for installation in or on the DRILLSHIP, in accordance with the time schedule designated and advised by the BUILDER to
the BUYER. 

  

	 	(b)	In order to facilitate installation by the BUILDER of the BUYER’s Supplies in or on the DRILLSHIP, the BUYER shall furnish the BUILDER with necessary
specifications, plans, drawings, instruction books, manuals, test reports and certificates required by the rules and regulations of the Specifications. If so requested by the BUILDER, the BUYER, without any charge to the BUILDER, shall cause the
representatives of the manufacturers of the BUYER’s Supplies to advise the BUILDER in installation thereof in or on the DRILLSHIP. 

  

	 	(c)	Any and all of the BUYER’s Supplies shall be subject to the BUILDER’s reasonable right of rejection, as and if they are found to be unsuitable or in improper
condition for installation. 

  

	 	(d)	A delivery Schedule of the BUYER’s Supplies, if any of such have effect on the BUILDER’s construction of the DRILLSHIP, shall be finalized and settled within
one hundred and fifty (150) calendar days from the date of the Contract signing. Should the BUYER fail to deliver any of the BUYER’s Supplies within the time designated, the Delivery Date shall be automatically extended for a period that
actually caused the delay in the delivery of the DRILLSHIP. 

  

	 	(e)	If delay in delivery of any of the BUYER’s Supplies, having effect on the BUILDER’s construction of the DRILLSHIP, exceeds thirty (30) days, then, the
BUILDER shall be entitled to proceed with construction of the DRILLSHIP without installation thereof in or on the DRILLSHIP as hereinabove provided, and the BUYER shall accept and take delivery of the DRILLSHIP so constructed, unless such delay is
caused by Force Majeure in which case the provision Paragraph 1(d) of this Article shall apply. 

  

 47 

	2.	Responsibility of BUILDER: 

 The
BUILDER shall be responsible for storing and handling with reasonable care of the BUYER’s Supplies after delivery thereof at the Shipyard, and shall, at its own cost and expense, install them in or on the DRILLSHIP, unless otherwise provided
herein or agreed by the parties hereto, provided, always, that the BUILDER shall not be responsible for quality, efficiency and/or performance of any of the BUYER’s Supplies. 
 It will be the BUILDER’s responsibility to the BUYER to: (i) if applicable, assemble the BUYER’s Supplies; (ii) test the
BUYER’s Supplies as necessary or appropriate; (iii) install the BUYER’s Supplies on the DRILLSHIP, in modules, as required, or otherwise as required, and to integrate the BUYER’s Supplies into the overall designed system of the
DRILLSHIP. In no event will BUILDER charge any additional cost for any of the above. The BUILDER will perform above works under guidance of BUYER and the Vendors representative when required. Any rework involved due to no fault of the BUILDER shall
be to BUYER’s cost and responsibility. 
  

	3.	Title: 

 Title to the
BUYER’s Supplies shall at all times remain with the BUYER during the Contract; however, the BUILDER shall have the risk of loss of or damage to such BUYER’s Supplies from the time set out in subparagraph 1(a) of this Article until delivery
of the DRILLSHIP. 
 (End of Article) 
  

 48 

 ARTICLE XVII - INSURANCE 
  

	1.	Extent of Insurance Coverage: 

 From the time of the keel-laying until delivery of the DRILLSHIP, the BUILDER shall, at its own cost and expense fully insure the DRILLSHIP and all machinery, materials and equipment delivered to the Shipyard for the DRILLSHIP, including
BUYER’s Supplies, built into or installed in or upon the DRILLSHIP against all risks under the “Institute Clauses for Builder’s Risks” with first class insurance company or underwriters in Korea. From the time of the first
arrival of the BUYER’s Supplies in Korea until delivery of the DRILLSHIP, the BUILDER shall keep the BUYER’s Supplies fully insured with the aforementioned insurance companies or underwriters to cover BUILDER’s Risk. 
 The BUILDER shall promptly furnish the BUILDER with certified copies in the English language of the insurance policies taken out. 

 

	2.	Application of the Recovered Amounts: 

 In the event that the DRILLSHIP shall be damaged from any insured cause at any time before delivery of the DRILLSHIP, and in the further event that such damage shall not constitute an actual or constructive total loss of the DRILLSHIP, the
amount received in respect of the insurance shall be applied by the BUILDER in repair of such damage, satisfactory to the Classification Society and its requirements, and the BUYER shall accept the DRILLSHIP under this Contract if completed in
accordance with this Contract and the Specifications, however, subject to the extension of delivery time under Article VIII hereof (except in case of negligence of the BUILDER). 
 Should the DRILLSHIP from any cause become an actual or constructive total loss, the BUILDER shall by the mutual agreement between the
parties hereto, either: 
  

	 	(a)	Proceed in accordance with the terms of this Contract, in which case the amount received in respect of the insurance shall be applied to the construction and repair of
damage of the DRILLSHIP, provided the parties hereto shall have first agreed thereto in writing and to such reasonable extension of delivery time as may be necessary for the completion of such reconstruction and repair; or 

 

 49 

	 	(b)	Refund promptly to the BUYER the full amount of all sums paid by the BUYER to the BUILDER as installments in advance of delivery of the DRILLSHIP, and deliver to the
BUYER all BUYER’s Supplies (or the insurance proceeds paid with respect thereto), in which case this Contract shall be deemed to be automatically terminated and shall be deemed rescinded for purposes of Article X hereof and all rights, duties,
liabilities and obligations of each of the parties to the other shall forthwith cease and terminate. 

 If the
parties fail to reach such agreement within Sixty (60) days after the DRILLSHIP is determined to be an actual or constructive total loss, the provisions of sub-paragraph 2 (b) as above shall apply. 
  

	3.	Termination of BUILDER’s Obligation to Insure: 

 The BUILDER shall be under no obligation to insure the DRILLSHIP hereunder after delivery thereof and acceptance by the BUYER. 
 (End of Article) 
  

 50 

 ARTICLE XVIII - NOTICE 
  

	1.	Address: 

 Any and all notices
and communications in connection with this Contract shall be addressed as follows: 
  

			
	To the BUYER:
	Drillship Paros Owners Inc. c/o Cardiff Marine Inc.
	80 Kifissias Avenue,
	GR- 151 25 Amaroussion,
	Greece
	Fax no. (+30)210 8090205
	E-mail:	 	 finance@cardiff.gr for the attention of Mr. Aristidis Ioannidis
 newbuildings@cardiff.gr for the attention of Mr. George Kourelis

	
	To the BUILDER:
	Samsung Heavy Industries Co., Ltd.
	34th Floor, Samsung Life Insurance Seocho Tower 1321-15,
	Seocho-Dong, Seocho-Gu, Seoul, Korea 137-857
	Seoul, Korea 135-080
	Facsimile No.: (+82) 2 3458 7369
	Telephone No.: (+82)2 3458 73137
	E-mail: harris.lee@samsung.com
	
	or preferably to its Geoje Yard:
	
	Samsung Heavy Industries Co., Ltd.
	P.O. Box Gohyun 9
	530, Jangpyung-ri, Sinhyun-up,
	Geoje-city, Gyungnam, Korea
	Facsimile No.: (+82 55 630 6070)

  

	2.	Language: 

 Any and all notices
and communications in connection with this Contract shall be written in the English language. 
  

 51 

	3.	Effective Date of Notice: 

 The
notice in connection with this Contract shall become effective from the date when such notice is received by the BUYER or by the BUILDER except otherwise described in the Contract. 
 (End of Article) 
  

 52 

 ARTICLE XIX - EFFECTIVE DATE OF CONTRACT 
 This Contract shall become effective upon signing by the parties hereto. 
 (End of
Article) 
  

 53 

 ARTICLE XX - INTERPRETATION 
  

	1.	Laws Applicable: 

 The parties
hereto agree that the validity and the interpretation of this Contract and of each Article and part thereof shall be governed by the laws of England. 
  

	2.	Discrepancies: 

 All general
language or requirements embodied in the Specifications are intended to amplify, explain and implement the requirements of this Contract. However, in the event that any language or requirements so embodied permit an interpretation inconsistent with
any provision of this Contract, then, in each and every such event, the applicable provisions of this Contract shall prevail and govern. In the event of conflict between the Specifications and Plans, the Specifications shall prevail and govern.

  

	3.	Entire Agreement: 

 This Contract
contains the entire agreement and understanding between the parties hereto and supersedes all prior negotiations, representations, undertakings and agreements on any subject matter of this Contract. 
  

	4.	Amendments and Supplements: 

 Any
supplement, memorandum of understanding or amendment, whatsoever form it may be relating to this Contract, to be made and signed among parties hereof after signing this Contract, shall be the integral part of this Contract and shall be predominant
over the respective corresponding Article and/or Paragraph of this Contract. 
 (End of Article) 
  

 54 

 ARTICLE XXI - CONFIDENTIALITY 
 BUILDER and BUYER agree that the terms and conditions of this Contract shall remain confidential and neither party shall disclose any such terms and conditions of this Contract to any third party without
first obtaining the prior written consent of the other, provided however, that either party shall be entitled to disclose any or all of the terms and conditions of the Contract to the extent it is necessary to do so to implement, effectuate and
comply with the terms of the Contract or to otherwise exercise any right or discharge any obligation that party may have pursuant to this Contract or any laws, rules and regulations. 
 (End of Article) 
  

 55 

 IN WITNESS WHEREOF, the parties hereto have caused this Contract to be duly executed on the day and year
first above written. 
  

									
	 BUYER:
	 		 	BUILDER:
			
	 For and on behalf of the BUYER:
	 		 	For and on behalf of the BUILDER:
	 DRILLSHIP PAROS OWNERS INC.
	 		 	SAMSUNG HEAVY INDUSTRIES CO., LTD
			
	 /s/ George Economou
	 		 	 /s/ J.W. Kim

	 By:
	 	Mr. George Economou	 		 	By:	 	Mr. J.W. Kim
	 Title:
	 	Authorized Signatory	 		 	Title:	 	President & CEO

  

									
	 WITNESSED BY
	 		 	WITNESSED BY
			
	 /s/ Aristidis Ioannidis
	 		 	 /s/ H.Y. Lee

	By:	 	Mr. Aristidis Ioannidis	 		 	By:	 	H.Y. Lee
	Title:	 	General Manager of Cardiff Marine Inc.	 		 	Title:	 	Chief Marketing Officer

  

 56 

 EXHIBIT “1” VESSEL SPECIFICATION 
 The Vessel Specification of this Contract for HN. 1838 shall be based on AFC(Approved For Construction) Drawings and Specifications of
HN.1674 as of the date of this Contract signing including all amendments, additions, deletions and variations (identified by italic boldic characters which shall prevail the Specification of HN. 1674) incorporated into the Specification (Doc. No.
SP07146.FS02 of September 14th, 2007) and
Manufacturer List (Doc. No. SPO7146.ML02 of September 14th 2007) 
  

 57 

 EXHIBIT “2” TOPSIDE SPECIFICATION 
 The Topside Specification of this Contract for HN. 1838 shall be based on AFC (Approved for Construction) Drawings and Specifications of
HN. 1674 as of the date of this Contract signing including all amendments, additions, deletions and variations incorporated into the Specification (Doc. No. SP07146.FS01 of September 14th, 2007). 
  

 58 

 EXHIBIT “3” DELIVERY AND CONSTRUCTION SCHEDULE 

 

 

  

							
	 Drilling Package Delivery (DES Geoje)
	 		 	
		 	 2009-11-01
	 		 	Bulk tanks, Pumps for reserve & waste
		 	 2009-12-01
	 		 	Equipment in the Mud Process, Subsea Control & Mud Module
		 	 2009-12-01
	 		 	BOP & Diverter Control System
		 	 2010-01-01
	 		 	Equipment on Drillfloor, Catwalks, Utility winches
		 	 2010-02-15
	 		 	Derrick & Derrick Component, Hoists, Riser Tensioners, BOP Teststump
		 	 2010-04-15
	 		 	BOP/X-mas tree skidding system, Guidance system, LIR
		 	 2010-06-15
	 		 	Knuckle boom Cranes. BOP Cranes, Loose Equipment
		 	 2010-10-15
	 		 	BOP
		 	 2010-11-15
	 		 	Riser System

  

 59 

 EXHIBIT “4” LETTER OF REFUNDMENT GUARANTEE NO. 
 Gentlemen: 
 We hereby open our
irrevocable letter of guarantee No. in favor of Drillship Paros Owners Inc. (hereinafter called the “BUYER”) for account of Samsung Heavy Industries, Seoul, Korea as follows in consideration of the Drillship contract dated 17th September 2007 (hereinafter called the “Contract”)
made by and among the BUYER and Samsung Heavy Industries Co., Ltd. (hereinafter called the “BUILDER”) for the construction of one (1) Drillship composed of hull part and topside part, having BUILDER’S Hull No.1838 (hereinafter
called the “DRILLSHIP”). 
 If in connection with the terms of the Contract the BUYER shall become entitled to a refund of the advance
payment(s) made to the BUILDER prior to the delivery of the DRILLSHIP, we hereby irrevocably guarantee as primary obligor and not merely as surety the repayment of the same to the BUYER immediately on demand USD 91,105,500 (Say United States Dollars
Ninety One Million One Hundred Five Thousand Five Hundred only) together with interest thereon at the rate of six percent (6%) per annum from the date following the date of receipt by the BUILDER to the date of remittance by telegraphic
transfer of such refund. 
 The amount of this guarantee will be automatically increased, not more than three (3) times, upon
BUILDER’S receipt of the respective installment: each time by the amount of instalment of USD 91,105,500, USD 91,105,500 and USD 91,105,500 respectively, plus interest thereon as provided in the Contract, but in any eventuality the amount of
this guarantee shall not exceed the total sum of USD 364,422,000 (Say United States Dollars Three Hundred Sixty Four Million Four Hundred Twenty Two Thousand only) plus interest thereon at the rate of six per cent (6%) per annum from the date
following the date of BUILDER’S receipt of each installment to the date of remittance by telegraphic transfer of the refund. 
 In case any
refund is made to you by the BUILDER or by us under this guarantee, our liability hereunder shall be automatically reduced by the amount of such refund. 
 In the event of cancellation of the Contract being based on delays due to force majeure or other causes beyond the control of the BUILDER, as required by Article X of the Contract, interest shall be paid
at the rate of Four and a half percent (4.5%) per annum from the date of following the date of Builder’s receipt of each installment to the date of remittance by telegraphic transfer of the refund. 
  

 60 

 This letter of guarantee is available against BUYER’S simple receipt and signed statement certifying
that BUYER’S demand for refund has been made in conformity with Article X of the Contract and the BUILDER has failed to make the refund within Thirty (30) days after your demand to the BUILDER. Refund shall be made to you by telegraphic
transfer in United States Dollars in freely transferable funds and free and clear of and without deduction for and on account of any set off, counterclaim or present or future tax, levy, impost, duty, charge, fee or other withholding of any nature
whatsoever imposed and by whomsoever on yourselves. In the event we are required by law to make any deduction or withholding from any payment to be made by it pursuant to this letter of guarantee, we will pay to you whatever additional amount (after
taking into account any additional taxes on, or deductions or withholdings from, or restrictions or conditions on, that additional amount) is necessary to ensure that, after making the deduction or withholding, you receive a net sum equal to the sum
which you would have received had no deduction or withholding been made. 
 This letter of guarantee shall expire and become null and void upon
receipt by the BUYER of the sum guaranteed hereby or upon acceptance by the BUYER of delivery of the DRILLSHIP in accordance with the terms of the Contract and, in either case, this letter of guarantee shall be returned to us. This guarantee is
valid from the date of this letter of guarantee until delivery or in the event of delayed delivery until such time as the DRILLSHIP is delivered by the BUILDER to the BUYER in accordance with the terms of the Contract. 
 Notwithstanding the provisions hereinabove, in case we receive notification from you or the BUILDER confirmed by the Arbitration Board stating that your
claim to cancel the Contract or your claim for refundment thereunder has been disputed and referred to Arbitration in accordance with the provisions of the Contract, the period of validity of this guarantee shall be extended until Sixty
(60) days after the final award shall be rendered in the Arbitration and a copy thereof acknowledged by the Arbitration Board. In such case, this guarantee shall not be available unless and until such acknowledged copy of the final award in the
Arbitration justifying your claim is presented to us. 
 This guarantee shall not be affected by any extension of time or concession granted by
the BUYER to the BUILDER or any delay or failure of the BUYER in enforcing its rights under the Contract. 
  

 61 

 The BUYER shall have the right to assign this guarantee and all of its benefits to any assignee to whom the
Contract is assigned. 
 This guarantee shall be governed by the laws of England and the undersigned hereby submits to the
non-exclusive jurisdiction of the courts of England. If we receive written or telefaxed notice from you or the BUILDER that there exists an arbitration between you and BUILDER or that you have made a formal demand of us under this Letter of
Guarantee we shall within thirty (30) days of receipt of such notice irrevocably appoint an agent for service of process in respect of any proceedings in England and notify you of such appointment and undertake that, throughout the terms of
this Letter of Guarantee, we will retain such agent in England for such purposes. If we fail to make such appointment and/or give such notification within thirty (30) day period we hereby appoint and be deemed to have appointed the London
branch of our bank currently at 1st Floor, Boston House
63-64 New Broad Street, London EC2M 1JJ United Kingdom. 
 Any notice or demand under this Letter of Guarantee required to be given by
yourselves to us shall be addressed to us as follows: 
 Address: 16-1, Yoido-Dong, Yeongdeungpo-Gu, Seoul 150-996 Korea 
 Tel: +82-2-3779-6318 
 Fax: +82-2-3779-6745

  

	
	 Very truly yours,

	
	 The Export-Import Bank of Korea

  

 62 

 EXHIBIT “5” PERFORMANCE GUARANTEE 
 Messrs. 
 Samsung Heavy Industries Co., Ltd. 
 34th
Floor, Samsung Life Insurance Seocho Tower 
 1324-15, Seocho-Dong, Seocho-Gu,

 Seoul, Republic of Korea 137-857 
 In consideration of the assignment of a certain shipbuilding contract dated September 17th 2007 (hereinafter called the “Contract”) by us to (hereinafter called the “BUYER”), for the
construction of one (1) Drillship having your Hull No. 1838 (hereinafter called the “Drillship”) providing among other things for payment of the Contract Price amounting to United States Dollars Six Hundred Seven Million Three
Hundred Seventy Thousand (US$ 607,370,000); 
 We, the undersigned, hereby irrevocably and unconditionally guarantee to you, your successors,
and assigns the due and faithful performance by the BUYER of its all liabilities and responsibilities under the Contract and any supplement, amendment, change or modification hereafter made thereto, including but not limited to, due and prompt
payment of the Contract Price by the BUYER to you, your successors, and assigns under the Contract and any supplement, amendment, change or modification as aforesaid (hereby expressly waiving notice of any such supplement, amendment, change or
modification as may be agreed to by the BUYER and confirming that this guarantee shall be fully applicable to the Contract as so supplemented, amended, changed or modified). 
 This Performance Guarantee shall be governed by the laws of England. 
  

	
	 GUARANTOR: CARDIFF MARINE INC.

	 BY:

	 TITLE:

	 WITNESS:

  

 63 

 EXHIBIT “6” OPTIONAL ITEMS 
  

						
	 No
	  	 Items
	  	Amount
	1.1	  	Dual Drilling (Aux Rig):	  	US$	13,750,000
		  	 a)      Travelling block
	  		
		  	 b)      Retractable dolly
	  		
		  	 c)      Elevated backup tong
	  		
		  	 d)      Drawworks
	  		
		  	 e)      Drill line & Reel
	  		
		  	 f)      Deadline Anchor
	  		
		  	 g)      Top drive
	  		
		  	 h)      Mud standpipes manifold
	  		
		  	 i)       Cement standpipe manifold
	  		
	1.2	  	False rotary table in Aux well centre	  	US$	 750,000
	2	  	Personnel elevator in the Derrick	  	US$	 952,000
	3	  	Additional 3,000 ft of Riser	  	US$	15,000,000
	4	  	7th Shale shaker	  	U$	425,000
	5	  	Cutting dryer / Modification of conveyors	  	US$	 1,060,000

 Details for
the above optional items are included in the Drillship Specification (Doc. No. SP07146.FS01 and Doc. No. SP07146.FS02 of September 14th 2007) 
  

 64

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