Document:

Exhibit 4.22

	
1. Date of Agreement

 

 

Vessel's Name:

	 	
THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT

CODE NAME: "SHIPMAN 98"

Part I

	
2. Owners (name, place of registered office and law of registry) (Cl. 1)

	 	
3. Managers (name, place of registered office and law of registry)(Cl. 1)

	 	 	 	 	 
	 	 	 	 	 
	 	
Name

	 	 	
Name

	 		 	 	
TMS OFFSHORE SERVICES LTD.

	 	 	 	 	 
	 	
Place of registered office

	 	 	
Place of registered office

	 		 	 	
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960

	 	 	 	 	 
	 	
Law of Registry

	 	 	
Law of Registry

	 		 	 	
Republic of Marshall Islands

	
4. Day and year of comencement of Agreement (Cl. 2)

DATE OF PRESENT AGREEMENT AS PER BOX 1

 

 

	
5. Crew Management (state "yes" or "no" as agreed) (Cl. 3.1)

YES

 

 

	 	
6. Technical Management (state "yes" or "no" as agreed) (Cl. 3.2)

YES

 

 

	
7. Commercial Management (state "yes" or "no" as agreed) (Cl. 3.3)

YES

 

 

	 	
8. Insurance Arrangements (state "yes" or "no" as agreed) (Cl. 3.4)

YES

 

 

	
9. Accounting Services (state "yes" or "no" as agreed) (Cl. 3.5)

YES

 

 

	 	
10. Sale or Purchase of the Vessel (state "yes" or "no" as agreed) (Cl. 3.6)

YES

	
11. Provisions (state "yes" or "no" as agreed) (Cl. 3.7)

YES

 

 

	 	
12. Bunkering (state "yes" or "no" as agreed) (Cl. 3.8)

YES

 

 

	
13. Chartering Services Period (only to be filled in if "yes" stated in Box 7) (Cl. 3.3(i))

Ten Years from date indicated in Box 4

 

 

	 	
14. Owners' Insurance (state alternative (i), (ii) or (iii) of Cl. 6.3)

6.3(ii)

 

 

	
15. Annual Management Fee (state annual amount) (Cl. 8.1)

As per Agreement dated 9th December 2016 between Inter alia the Managers and Dryships Inc.

 

 

	 	
16. Severance Costs (state maximum amount) (Cl. 8.4(ii))

As per applicable Collective Bargaining Agreement (CBA)

 

 

	
17. Day and year of termination of Agreement (Cl. 17)

Ten Years from date indicated in Box 4

 

	 	
18. Law and Arbitration (state alternative 19.1, 19.2 or 19.3; if 19.3 place of arbitration must be stated) (Cl. 19)

19.1

	
19. Notices (state postal and cable address, telex and telefax number for serving notice and communication to the Owners) (Cl. 20)

 

	 	
20. Notices (state postal and cable address, telex and telefax number for serving notice and communication to the Managers) (Cl. 20)

TMS OFFSHORE SERVICES LTD. Athens Shipmanagement Office

11 Fragkokklisias Street, 151 25 Marousi

Tel: +30 216 2002900

Email: operations@tms-offshore.com

 

	
 

It is mutually agreed between the party slated in Box 2 and the party slated in Box 3 that this Agreement consisting of PART I and PART II as well as Annexes "A" (Details of Vessel), "B" (Details of Crew) and "C" (Budget) and "D" (Associated vessels) attached hereto, shall be performed subject to the conditions contained herein. In the event of a conflict of conditions, the provisions of PART I and Annexes "A", "B", "C" and "D" shall prevail over those of PART II to the extent of such conflict but no further.

 

	 	 	 
	
Signature(s) (Owners)

 

 

 

	 	
Signature(s) (Managers)

 

ANNEX "A" (DETAILS OF VESSEL OR VESSELS) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

	 
	 

Date of Agreement:

Name of Vessel(s): 

	
Particulars of Vessel(s)

	 
	 
	 
	 
	 
	 
	 

ANNEX "B" (DETAILS OF CREW) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

	 
	 

Date of Agreement:

Details of Crew:

N/A

	 	 	 
	 	 	 
	 	 	 
	
Numbers

	
Rank

	
Nationality

	 	 	 
	 	 	 
	 	 	 

ANNEX "C" (BUDGET) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

	 
	 

See Box 15 and Clause 9

Managers' Budget for the first year with effect from the Commencement Date of this Agreement:

	
 

	 	 
	
 

	 	 	 
	
 

	 	 	 
	
 

	 	 	 
	
 

	 	 	 
	
 

	 	 	 
	
 

	 	 	 
	
 

	 	 	 
	
 

	 	 
	
DAILY AMOUNT DURING LAY-UP

	
 

	 
	
 

	 	 

NOTE:

ANNEX "D" (ASSOCIATED VESSELS) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

	 
	 

NOTE: PARTIES SHOULD BE AWARE THAT BY COMPLETING THIS ANNEX "D" THEY WILL BE SUBJECT TO THE PROVISIONS OF SUB-CLAUSE 18.1(i) OF THIS AGREEMENT.

Date of Agreement:

Details of Associated Vessels:

PART II

"SHIPMAN 98" Standard Ship Management Agreement

1. Definitions

In this Agreement save where the context otherwise requires, the following words and expressions shall have the meanings hereby assigned to them.

"Owners" means the party identified in Box 2.

"Managers" means the party identified in Box 3.

"Vessel" means the vessel or vessels details of which are set out in Annex "A" attached hereto.

"Crew" means the Master, officers and ratings of the numbers, rank and nationality specified in Annex "B" attached hereto.

"Crew Support Costs" means all expenses of a general nature which are not particularly referable to any individual vessel for the time being managed by the Managers and which are incurred by the Managers for the purpose of providing an efficient and economic management service and, without prejudice to the generality of the foregoing, shall include the cost of crew standby pay, training schemes for officers and ratings, cadet training schemes, sick pay, study pay, recruitment and interviews.

"Severance Costs" means the costs which the employers are legally obliged to pay to or in respect of the Crew as a result of the early termination of any employment contract for service on the Vessel.

"Crew Insurances" means insurances against crew risks which shall include but not be limited to death, sickness, repatriation, injury, shipwreck unemployment indemnity and loss of personal effects.

"Management Services" means the services specified in sub- clauses 3.1 to 3.8 as indicated affirmatively in Boxes 5 to 12.

"ISM Code" means the International Management Code for the Safe Operation of Ships and for Pollution Prevention as adopted by the International Maritime Organization (IMO) by resolution A.741(18) or any subsequent amendment thereto.

"STCW 95" means the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, as amended in 1995 or any subsequent amendment thereto.

2. Appointment of Managers

With effect from the day and year stated in Box 4 and continuing unless and until terminated as provided herein, the Owners hereby appoint the Managers and the Managers hereby agree to act as the Managers of the Vessel.

3. Basis of Agreement

Subject to the terms and conditions herein provided, during the period of this Agreement, the Managers shall carry out Management Services in respect of the Vessel as agents for and on behalf of the Owners. The Managers shall have authority to take such actions as they may from time to time in their absolute discretion consider to be necessary to enable them to perform this Agreement in accordance with sound ship management practice.

3.1 Crew Management

(only applicable if agreed according to Box 5)

The Managers shall provide suitably qualified Crew for the Vessel as required by the Owners in accordance with the STCW 95 requirements, provision of which includes but is not limited to the following functions:

(i) selecting and engaging the Vessel's Crew, including payroll arrangements, pension administration, and insurances for the Crew other than those mentioned in Clause 6;

(ii) ensuring that the applicable requirements of the law of the flag of the Vessel are satisfied in respect of manning levels, rank, qualification and certification of the Crew and employment regulations including Crew's tax, social insurance, discipline and other requirements;

(iii) ensuring that all members of the Crew have passed a medical examination with a qualified doctor certifying that they are fit for the duties for which they are engaged and are in possession of valid medical certificates issued in accordance with appropriate flag State requirements. In the absence of applicable flag State requirements the medical certificate shall be dated not more than three months prior to the respective Crew members leaving their country of domicile and maintained for the duration of their service on board the Vessel;

(iv) ensuring that the Crew shall have a command of the English language of a sufficient standard to enable them to perform their duties safely;

(v)  arranging transportation of the Crew, including repatriation;

(vi) training of the Crew and supervising their efficiency;

(vii) conducting union negotiations;

(viii) operating the Managers' drug and alcohol policy unless otherwise agreed.

3.2 Technical Management

(only applicable if agreed according to Box 6)

The Managers shall provide technical management which includes, but is not limited to, the following functions:

(i)  provision of competent personnel to supervise the maintenance and general efficiency of the Vessel;

(ii) arrangement and supervision of dry dockings, repairs, alterations and the upkeep of the Vessel to the standards  required by the Owners provided that the Managers shall be entitled to incur the necessary expenditure to ensure that the Vessel will comply with the law of the flag of the Vessel and of the places where she trades, and all  requirements and recommendations of the classification society;

(iii) Arrangement of the supply of necessary stores, spares and lubricating oil;

(iv) appointment of surveyors and technical consultants as the Managers may consider from time to time to be necessary;

(v) development, implementation and maintenance of a Safety Management System (SMS) in accordance with the ISM Code (see sub-clauses 4.2 and 5.3).

(vi) supervisions of vessels under construction at the specific request of the Owners and after approval by the Owner of the relevant budget submitted by the Managers.

3.3 Commercial Management

(only applicable if agreed according to Box 7)

The Managers shall provide the commercial operation of the Vessel, as required by the Owners, which includes, but is not limited to, the following functions:

(i) providing chartering services in accordance with the Owners' instructions which include, but are not limited to, seeking and negotiating employment for the Vessel and the conclusion (including the execution thereof) of charter parties or other contracts relating to the employment of the Vessel. If such a contract exceeds the period stated in Box 13, consent thereto in writing shall first be obtained from the Owners.

(ii) arranging of the proper payment to Owners or their nominees of all hire and/or freight revenues or other moneys of whatsoever nature to which Owners may be entitled arising out of the employment of or otherwise in connection with the Vessel.

(iii) providing voyage estimates and accounts and calculating of hire, freights, demurrage and/or despatch moneys due from or due to the charterers of the Vessel;

(iv) issuing of voyage instructions;

(v) appointing agents;

(vi) appointing stevedores;

(vii) arranging surveys associated with the commercial operation of the Vessel.

3.4 Insurance Arrangements

(only applicable if agreed according to Box 8)

The Managers shall arrange insurances in accordance with

Clause 6, on such terms and conditions as the Owners shall have instructed or agreed, in particular regarding conditions, insured values, deductibles and franchises.

3.5 Accounting Services

(only applicable if agreed according to Box 9)

The Managers shall:

(i) establish an accounting system which meets the requirements of the Owners and provide regular accounting services, supply regular reports and records,

(ii) maintain the records of all costs and expenditure incurred as well as data necessary or proper for the settlement of accounts between the parties.

3.6 Sale or Purchase of the Vessel

(only applicable if agreed according to Box 10)

The Managers shall, in accordance with the Owners' instructions, supervise the sale or purchase of the Vessel, including the performance of any sale or purchase agreement, but not negotiation of the same.

3.7 Provisions (only applicable if agreed according to Box 11)

The Managers shall arrange for the supply of provisions.

3.8 Bunkering (only applicable if agreed according to Box 12)

The Managers shall arrange for the provision of bunker fuel of the quality specified by the Owners as required for the Vessel's trade.

4. Managers' Obligations

4.1 The Managers undertake to use their best endeavours to provide the agreed Management Services as agents for and on behalf of the Owners in accordance with sound ship management practice and to protect and promote the interests of the Owners in all matters relating to the provision of services hereunder. Provided, however, that the Managers in the performance of their management responsibilities under this Agreement shall be entitled to have regard to their overall responsibility in relation to all vessels as may from time to time be entrusted to their management and in particular, but without prejudice to the generality of the foregoing, the Managers shall be entitled to allocate available supplies, manpower and services in such manner as in the prevailing circumstances the Managers in their absolute discretion consider to be fair and reasonable.

4.2 Where the Managers are providing Technical Management in accordance with sub-clause 3.2, they shall procure that the requirements of the law of the flag of the Vessel are satisfied and they shall in particular be deemed to be the "Company" as defined by the ISM Code, assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code when applicable.

5. Owners' Obligations

5.1 The Owners shall pay all sums due to the Managers punctually in accordance with the terms of this Agreement.

5.2 Where the Managers are providing Technical Management in accordance with sub-clause 3.2, the Owners shall:

(i)   procure that all officers and ratings supplied by them or on their behalf comply with the requirements of STCW 95;

(ii)   instruct such officers and ratings to obey all reasonable orders of the Managers in connection with the operation of the Managers' safety management system.

5.3 Where the Managers are not providing Technical Management in accordance with sub-clause 3.2, the Owners shall procure that the requirements of the law of the flag of the Vessel are satisfied and that they, or such other entity as may be appointed by them and identified to the Managers, shall be deemed to be the "Company" as defined by the ISM Code assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code when applicable.

6. Insurance Policies

The Owners shall procure, whether by instructing the Managers under sub-clause 3.4 or otherwise, that throughout the period of this Agreement:

6.1 at the Owners' expense, the Vessel is insured for not less than her sound market value or entered for her full gross tonnage, as the case may be for:

(i) usual hull and machinery marine risks (including crew negligence) and excess liabilities;

(ii) protection and indemnity risks (including pollution risks and Crew Insurances); and

(iii) war risks (including protection and indemnity and crew risks) in accordance with the best practice of prudent owners of vessels of a similar type to the Vessel, with first class insurance companies, underwriters or associations ("the Owners' Insurances");

(iv)  Freight, Demurrage and Defense Insurance

(v)  Certificate of Financial Responsibility

(vi)  Crew Personal Accident and Sundries Insurance cover

(vii)  Any other insurance required by law

(viii)  Any insurance that can be arranged and not included in the above but is requested by the Owners in writing

6.2 all premiums, deductibles, supplementary calls and/or excess supplementary calls and release calls on the Owners' Insurances are paid promptly by their due date,

6.3 the Owners' Insurances name the Managers and, subject to underwriters' agreement, any third party designated by the Managers as a joint assured, with full cover, with the Owners obtaining cover in respect of each of the insurances specified in sub-clause 6.1:

(i)   on terms whereby the Managers and any such third party are liable in respect of premiums or calls arising in connection with the Owners' Insurances; or

(ii) if reasonably obtainable, on terms such that neither the Managers nor any such third party shall be under any liability in respect of premiums or calls arising in connection with the Owners' Insurances; or

(iii) on such other terms as may be agreed in writing. Indicate alternative (i), (ii) or (iii) in Box 14. If Box 14 is left blank then (i) applies.

6.4 written evidence is provided, to the reasonable satisfaction of the Managers, of their compliance with their obligations under Clause 6 within a reasonable time of the commencement of the Agreement, and of each renewal date and, if specifically requested, of each payment date of the Owners' Insurances.

7. Income Collected and Expenses Paid on Behalf of Owners

7.1 All moneys collected by the Managers under the terms of this Agreement (other than moneys payable by the Owners to the Managers) and any interest thereon shall be held to the credit of the Owners in a separate bank account.

7.2 All expenses incurred by the Managers under the terms of this Agreement on behalf of the Owners (including expenses as provided in Clause 8) may be debited against the Owners in the account referred to under sub-clause 7.1 but shall in any event remain payable by the Owners to the Managers on demand.

8. Management Fee

8.1(a) The Owners shall pay to the Managers for their services as Managers under this Agreement an annual a daily management fee as stated in Box 15 which shall be payable by equal monthly installments in advance, the first installment being payable on the commencement of this Agreement (see Clause 2 and Box 4) and subsequent installments being payable every month.

8.1(b)  The Owners shall place with the Manager for the duration of this Agreement an amount equal to three months of management fee stated in Box 15 as security.

Upon termination of this Agreement, all moneys remaining within the security or any portion thereof, if the amounts due to the Manager pursuant with the obligations set forth in the management agreement and their addenda (if any) is less than the security amount paid as per above shall be returned to the Owner subject to the terms and conditions of this agreement.  It is being understood that in event of default from the part of the Owner is forfeited in favor of the Manager without prejudice to any rights which the Manager may have against the Owner in law or in equity.

8.2 The management fee shall be subject to an annual a review on the anniversary date of the Agreement and the for each calendar year and will be automatically adjusted to the Greek CPI index for the previous year.  It is understood that any such increase will not be less than 3% and not more than 5%.  The proposed fee shall be presented in the annual budget referred to in sub-C clause 9.1 clause 9.1

8.3 The Managers shall, at no extra cost to the Owners, provide their own office accommodation, office staff, facilities and stationery. Without limiting the generality of Clause 7 the Owners shall reimburse the Managers for postage and communication expenses, travelling expenses, and other out of pocket expenses properly incurred by the Managers in pursuance of the Management Services.

8.4 In the event of the appointment of the Managers being terminated for any reason other than clause 18.2 by the Owners or the Managers in accordance with the provisions of Clauses 17 and .18 other than by reason of default by the Managers, or if the Vessel is lost, sold or otherwise disposed of, the "management fee" shall be payable to the Managers according to the provisions of sub-clause 8.1 shall continue to be payable for a further period of three (3) calendar months as from the termination date. In addition, provided that the Managers provide Crew for the Vessel in accordance with sub- clause 3.1:

(i) the Owners shall continue to pay Crew Support Costs during the said further period of three (3) calendar months and

(ii) the Owners shall pay an equitable proportion of any Severance Costs which may materialize, not exceeding the amount stated in Box 16.

8.5 If the Owners decide to lay-up the Vessel whilst this Agreement remains in force and such lay-up lasts for more than three months, an appropriate reduction of the management fee for the period exceeding three months until one month before the Vessel is again put into service shall be mutually agreed between the parties.

8.6 Unless otherwise agreed in writing all discounts and commissions obtained by the Managers in the course of the management of the Vessel shall be credited to the Owners.  For the avoidance of doubt, it is understood that insurance is charged on a gross rate basis.

8.7 In case of vessels under construction, no management fee will be charged by the Managers until the vessel's delivery to the Owners.  However, inc ase Owners instruct the Managers to supervise vessels under construction as per Clause 3.2(vi) then the Managers will be due an upfront fee equal to 10% of the budget approved by the Owners.  Such fee, will be payable in USD.  For the avoidance of any doubt the rest of the paragraphs of Clause 8 to remain in force.

9. Budgets and Management of Funds

9.1 On or before November 30 of each calendar year Tthe Managers shall present to the Owners annually a budget (see Annex "C") for the following twelve monthsnext calendar year in such form as the Owners reasonably require. The budget for the first year hereof is set out in Annex "C" hereto.  Subsequent annual budgets shall be prepared by the Managers and submitted to the Owners not less than three months before the anniversary date of the commencement of this Agreement (see Clause 2 and Box 4).

9.2 The Owners shall indicate to the Managers their acceptance and approval of the annual budget within one month of presentation and in the absence of any such indication the Managers shall be entitled to assume that the Owners have accepted the proposed budget.

9.3 The Owner shall place with the Manager for the duration of this Agreement an amount equal to three months running expenses as working capital reserve.  For calculation purposes the reserve will be based on the agreed budgeted daily average cost as per the respective management agreement.  Upon termination of this Agreement all moneys remaining within the working capital reserve shall be returned to the Owner subject to the terms and conditions of this agreement. Following the agreement of the budget, the Managers shall prepare and present to the Owners their estimate of the working capital requirement of the Vessel and the Managers shall each month up-date this estimate. Based thereon, the Managers shall each month request the Owners in writing for the funds required to run the Vessel for the ensuing month, including the payment of any occasional or extraordinary item of expenditure, such as emergency repair costs, additional insurance premiums, bunkers or provisions. Such funds shall be received by the Managers within ten running days after the receipt by the Owners of the Managers' written request and shall be held to the credit of the Owners in a separate bank account.

9.4 The Managers shall produce a comparison between budgeted and actual income and expenditure of the Vessel in such form as required by the Owners monthly on a yearly basis or at such other intervals as mutually agreed.

9.5 Notwithstanding anything contained herein to the contrary, the Managers shall in no circumstances be required to use or commit their own funds to finance the provision of the Management Services.

10. Managers' Right to Sub-Contract

The Managers shall not have the right to sub-contract any of their obligations hereunder, including those mentioned in sub- clause 3.1 without the prior written consent of the Owners which shall not be unreasonably withheld. In the event of such a sub- contract the Managers shall remain fully liable for the due performance of their obligations under this Agreement.

11. Responsibilities

11.1 Force Majeure - Neither the Owners nor the Managers shall be under any liability for any failure to perform any of their obligations hereunder by reason of any cause whatsoever of any nature or kind beyond their reasonable control.  For the avoidance of any doubt financial force majeure does not apply.

11.2 Liability to Owners  - (i) Without prejudice to sub-clause 11.1, the Managers shall be under no liability whatsoever to the  Owners for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect, (including but not limited to loss of profit arising out of or in connection with detention of or delay to the Vessel) and howsoever arising in the course of performance of the Management Services UNLESS same is proved to have resulted solely from the negligence, gross negligence or wilful default of the Managers or their employees, or agents or sub-contractors employed by them in connection with the Vessel, in which case (save where loss, damage, delay or expense has resulted from the Managers' personal act or omission committed with the intent to cause same or recklessly and with knowledge that such loss, damage, delay or expense would probably result) the Managers' liability for each incident or series of incidents giving rise to a claim or claims shall never exceed a total of ten times the annual management fee payable hereunder.

(ii) Notwithstanding anything that may appear to the contrary in this Agreement, the Managers shall not be liable for any of the

actions of the Crew, even if such actions are negligent, grossly negligent or wilful, except only to the extent that they are shown to have resulted from a failure by the Managers to discharge their obligations under sub-clause 3.1, in which case their liability shall be limited in accordance with the terms of this Clause 11. XXX

11.3 Indemnity - Except to the extent and solely for the amount therein set out that the Managers would be liable under sub- clause 11.2, the Owners hereby undertake to keep the Managers and their employees, agents and sub-contractors indemnified and to hold them harmless against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of the Agreement, and against and in respect of all costs, losses, damages and expenses (including legal costs and expenses on a full indemnity basis) which the Managers may suffer or incur (either directly or indirectly) in the course of the performance of this Agreement.

11.4 "Himalaya" - It is hereby expressly agreed that no employee or agent of the Managers (including every sub- contractor from time to time employed by the Managers) shall in any circumstances whatsoever be under any liability whatsoever to the Owners for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Clause 11, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defence and immunity of whatsoever nature applicable to the Managers or to which the Managers are entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Managers acting as aforesaid and for the purpose of all the foregoing provisions of this Clause 11 the Managers are or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be their servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.

12. Documentation

Where the Managers are providing Technical Management in accordance with sub-clause 3.2 and/or Crew Management in accordance with sub-clause 3.1, they shall make available, upon Owners' request, all documentation and records related to the Safety Management System (SMS) and/or the Crew which the Managers need in order to demonstrate compliance with the ISM Code and STCW 95 or to defend a claim against a third party.

13. General Administration

13.1 The Managers shall handle and settle all claims arising out of the Management Services hereunder and keep the Owners informed regarding any incident of which the Managers become aware which gives or may give rise to claims or disputes involving third parties.

13.2 The Managers shall, as instructed by the Owners, bring or defend actions, suits or proceedings in connection with matters entrusted to the Managers according to this Agreement.

13.3 The Managers shall also have power to obtain legal or technical or other outside expert advice in relation to the handling and settlement of claims and disputes or all other matters affecting the interests of the Owners in respect of the Vessel.

13.4 The Owners shall arrange for the provision of any necessary guarantee bond or other security.

13.5 Any costs reasonably incurred by the Managers in carrying out their obligations according to Clause 13 shall be reimbursed by the Owners.

14. Auditing

The Managers shall at all times maintain and keep true and correct accounts in accordance with sound accounting practice and an adequate and effective system of internal controls and procedures and shall make the same available for permit the inspection and auditing by the Owners at such times as may be mutually agreed. On the termination, for whatever reasons, of this Agreement, the Managers shall release to the Owners, if so requested, the originals where possible, or otherwise certified copies, of all such accounts and all documents specifically relating to the Vessel and her operation.

15. lnspection of Vessel

The Owners shall have the right at any time after giving reasonable notice to the Managers to inspect the Vessel for any reason they consider necessary.

16. Compliance with Laws and Regulations

The Managers will not do or permit to be done anything which might cause any breach or infringement of the laws and regulations of the Vessel's flag, or of the places where she trades.

17. Duration of the Agreement

This Agreement shall come into effect on the day and year stated in Box 4 and shall continue until the date stated in Box 17. Thereafter it shall automatically renew for a five-year period and shall thereafter be extended in additional five-year increments if notice of termination is not provided by the Owners in the fourth quarter of the year immediately proceeding the end of the respective term. continue until terminated by either party giving to the other notice in writing, in which event the Agreement shall terminate upon the expiration of a period of  two twelve months from the date upon which such notice was given.

18. Termination

18.1 Owners' default

(i) The Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing if any moneys payable by the Owners under this Agreement and/or the Owners of any associated vessel, details of which are listed in Annex "D", shall not have been received in the Managers' nominated account within ten (10) running days of receipt by the Owners of the Managers written request or if the Vessel is repossessed by the Mortgagees.

(ii) If the Owners:

(a) fail to meet their obligations under sub-clauses 5.2 and 5.3 of this Agreement for any reason within their control, or

(b) proceed with the employment of or continue to employ the Vessel in the carriage of contraband, blockade  running, or in an unlawful trade, or on a voyage which in the reasonable opinion of the Managers is unduly hazardous or improper, the Managers may give notice of the default to the Owners, requiring them to remedy it as soon as practically possible. In the event that the Owners fail to remedy it within a reasonable time to the satisfaction of the Managers, the Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing.

18.2 Managers' Default

If the Managers fail to meet their obligations under Clauses 3 and 4 of this Agreement for any reason within the control of the Managers, the Owners may give notice to the Managers of the default, requiring them to remedy it as soon as practically possible. In the event that the Managers fail to remedy it within a reasonable time to the satisfaction of the Owners, the Owners shall be entitled to terminate the Agreement with immediate effect        by notice in writing.

18.3 Extraordinary Termination

This Agreement shall be deemed to be terminated in the case of the sale of the Vessel or if the Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisitioned.

18.4 For the purpose of sub-clause 18.3 hereof

(i)  the date upon which the Vessel is to be treated as having been sold or otherwise disposed of shall be the date on which the Owners cease to be registered as Owners of the Vessel;

(ii) the Vessel shall not be deemed to be lost unless either she has become an actual total loss or agreement has been reached with her underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with her underwriters is not reached it is adjudged by a competent tribunal that a constructive loss of the Vessel has occurred.

18.5 This Agreement shall terminate forthwith in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of either party (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver is appointed, or if it suspends payment, ceases to carry on business or makes any special arrangement or composition with its creditors.

18.6 The termination of this Agreement shall be without prejudice to all rights accrued due between the parties prior to the date of termination.

18.7 Termination After Change or Control

This Agreement will terminate automatically immediately after a change of control (as defined below) of the Owners and/or of the Owners ultimate parent. Upon such termination, the Owners will be required to pay the Manager the Termination Payment in a single installment.

For the purpose of this Agreement "Change of Control" means the occurrence of any of the following:

(i) The acquisition by any individual, entity or group beneficial ownership of fifty (50) percent (%) or more of either (A) the then-outstanding shares of stock of the Owner and/or the Owners ultimate parent or (B) the combined voting power of the then-outstanding voting securities of the Owner and/or the Owners ultimate parent entitled to vote generally in the election of directors;

(ii) The consummation of a reorganization, merger or consolidation of Owner and/or the Owners ultimate parent or the sale or other disposition of all or substantially all of the assets of Owner and/or Owners ultimate parent.

(iii) The approval by the shareholders of Owner and/or the Owners and/or the Owners ultimate parent of a complete liquidation or dissolution of Owner and/or the Owners ultimate parent.

19. Law and Arbitration

19.1 This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.

The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.

Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

In cases where neither the claim nor any counterclaim exceeds the sum of USD50.000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

19.2 This Agreement shall be governed by and construed in accordance with Title 9 of the United States Code and the Maritime Law of the United States and any dispute arising out of or in connection with this Agreement shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for the purposes of enforcing any award, judgement may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc.

In cases where neither the claim nor any counterclaim  exceeds the sum of USD50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced.

19.3 This Agreement shall be governed by and construed  in accordance with the laws of the place mutually agreed by the parties and any dispute arising out of or in connection with this Agreement shall be referred to arbitration at a mutually agreed place, subject to the procedures applicable there.

19.4 If Box 18 in Part I is not appropriately filled in, sub-clause 19.1 of this Clause shall apply.

Note: 19.1, 19.2 and 19.3 are alternatives; indicate alternative agreed in Box 18.

20. Notices

20.1 Any notice to be given by either party to the other party shall be in writing and may be sent by fax, telex, registered or recorded mail or by personal service.

20.2 The address of the Parties for service of such communication shall be as stated in Boxes 19 and 20, respectively.

21. Other Fees

21.1 Incentive Fee

At their sole discretion the Owners on an annual basis in order to provide the Managers with a performance incentive, may make a payment to the Managers of an incentive fee in addition to the management fee.

21.2 Chartering

One and a quarter per cent (1.25%) of all monies earned by the Vessel.  Such fee will be payable in USD.  For the avoidance of any doubt and regardless of Clause 8.5, chartering commissions shall survive the termination of this agreement under all circumstances until the termination of the charter party in force at the time or termination of any other employment arranged

previous to the termination date.

21.3 Sale and Purchase

One percent (1%) of any sale of the Vessel uncluding 1% for the initial purchase of the Vessel, including vessels under construction.  Such fee will be payable in USD.Exhibit 4.35

  

	
 

 

REVOLVING FACILITY AGREEMENT

 

 

Among

DRYSHIPS INC.,

 as Borrower

and

SIERRA INVESTMENTS INC.,

 as Lender

Dated as of 23rd May 2017

REVOLVING FACILITY AGREEMENT

THIS REVOLVING FACILITY AGREEMENT (this "Agreement"), dated as of 23rd May 2017 (the "Effective Date"), is made by and among DRYSHIPS INC., a corporation organized under the laws of the Republic of the Marshall Islands (the "Borrower") and SIERRA INVESTMENTS INC., a corporation organized under the laws of the Republic of the Marshall Islands (the "Lender").

W I T N E S S E T H:

WHEREAS, the Lender is willing to make available to the Borrower a facility not exceeding the Commitment as defined below in order to provide the Borrower with working capital for its general working purposes.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Borrower and the Lender hereby agree as follows:

		1.	
DEFINITIONS

Capitalized terms used herein but not otherwise defined herein shall have the meanings specified in this Section 1.

"Agreement" has the meaning specified in the preamble hereof.

"Borrower" has the meaning specified in the preamble hereof.

"Business Day" means any day (other than a Saturday or Sunday) on which banks are open for general business in London, Athens, Malta and New York.

"Change of Control" means the occurrence of any of the following:

(a)          the sale, transfer, conveyance or other disposition (other than by way of amalgamation, merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Borrower, in either case, to any "person", other than to a Permitted Holder;

(b)          the Borrower is liquidated or dissolved or adopts a plan relating to the liquidation or dissolution of the Borrower; or

(c)          the consummation of any transaction or any series of transactions (including, without limitation, any merger, consolidation or other business combination), the result of which is that any "person", other than a Permitted Holder, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the voting stock of the Borrower, measured by voting power rather than number of shares.

"Commitment" means, on any date, Two Hundred Million Dollars (US$200,000,000).

"Commitment Termination Date" has the meaning specified in Section 2.01 hereof.

"Default" means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

"Effective Date" has the meaning specified in the preamble hereof.

"Equity Interests" shall mean shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any Person, and any option, warrant or other right entitling the holder thereof to purchase or otherwise acquire any such equity interest.

"Event of Default" has the meaning specified in Section 9 hereof.

"Facility Documents" means this Agreement and the Note.

"Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business), (t) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all guarantees by such Person of Indebtedness of others, (h) all capital lease obligations of such Person, (i) all synthetic lease obligations of such Person, (j) net obligations of such Person under any hedging agreements, (k) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any equity interests of such Person or any other Person or any warrants, rights or options to acquire such equity interests, valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (I) all obligations of such Person as an account party in respect of letters of credit and (m) all obligations of such Person in respect of bankers' acceptances.  The Indebtedness of any Person shall include the Indebtedness of any partnership in which such Person is a general partner.

"Lender" has the meaning specified in the preamble hereof.

"LIBOR Rate" means, in relation to any Loan, (a) the applicable Screen Rate, (b) if no Screen Rate is available for the Interest Period of such Loan, the applicable Interpolated Screen Rate; or (c) if no Screen Rate is available for the currency or the Interest Period of such Loan and it is not possible to calculate an Interpolated Screen Rate for such Loan, then the Reference Bank Rate, each as of 11:00 a.m., London time, on the Quotation Day for dollars for such Loan

and for a period equal in length to the Interest Period of such Loan and, if any such rate is below zero, LIBOR Rate shall be deemed to be zero; provided that notwithstanding the foregoing, for purposes of this Agreement, the LIBOR Rate for any Loan shall not ever be less than one percent (1.00%).

"Lien" means a mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having the effect of conferring security.

"Loans" has the meaning specified in Section 2.01 hereof.

"Interpolated Screen Rate" means, in relation to LIBOR Rate for any Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:

(a) the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of such Loan; and

(b) the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of such Loan,

each as of 11:00 a.m., London time, on the Quotation Day for the currency of such Loan.

"Interest Period" means, as to any Loan, the period beginning on (and including) the date on which such Loan is made or continued and shall end on (but exclude) the day which numerically corresponds to such date six months thereafter (or, if such month has no numerically corresponding day, on the last Business Day of such month); provided that:

(a) Loans shall have one Interest Period only at any time;

(b) if such Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next following Business Day (unless such next following Business Day is the first Business Day of a calendar month, in which case such Interest Period shall end on the Business Day next preceding such numerically corresponding day); and

(c)          no Interest Period for any Loan may end later than the Maturity Date.

"Material Adverse Effect" means (a) a material adverse effect on the operations, business, properties or financial condition of the Borrower, (b) a material impairment of the rights and remedies of the Lender under any Facility Document, or of the ability of the Borrower to perform its obligations under any Facility Document to which it is a party or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Borrower of any Facility Document to which it is a party.

"Maturity Date" has the meaning specified in Section 3.01 hereof.

"Note" has the meaning specified in Section 2.03 hereof.

"Obligations" means, collectively, (a) all Indebtedness, debts, liabilities, indemnities, covenants, and other obligations of the Borrower (including interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) under or in connection with (i) this Agreement and any Loans hereunder, (ii) any Note or other evidence of Indebtedness of the Borrower now or hereafter issued in connection with this Agreement or (iii) the other Facility Documents, in each case with respect to this clause (a) whether now existing or hereafter arising, due or to become due, direct or indirect, matured or unmatured, liquidated or unliquidated, absolute or contingent, and howsoever evidenced, held or acquired, of any kind or nature, each as may be amended, restated, supplemented or otherwise modified from time to time, and (b) all reasonable out-of-pocket expenses and charges, legal and otherwise, incurred by the Lender in collecting or enforcing any of such amounts set forth in clause (a).

"Permitted Holder" means Mr. George Economou, Mr. Anthony Kandylidis, or any spouse or member of their respective immediate families, any of his or their Affiliates, or any Person that is controlled, directly or indirectly, by any such Permitted Holder.

"Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, limited liability company or government or other entity.

"Quotation Day" means, in relation to any Interest Period for which an interest rate is to be determined, the first day of that period.

"Reference Bank Rate" means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Lender at its request by the Reference Banks as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in dollars for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period.

"Reference Banks" means any bank or financial institutions as may be appointed by the Lender in consultation with the Borrower.

"Screen Rate" means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for dollars for the relevant Interest Period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service that publishes that rate from time to time in place of Reuters.  If such page or service ceases to be available, the Lender may specify another page or service displaying the relevant rate after consultation with the Borrower.

"Semi-Annual Payment Date" means the last day of June and December, or, if any such day is not a Business Day, the next succeeding Business Day.

"Subsidiary" means, with respect to any specified Person, (i) any corporation, limited liability company, association or other business entity (other than a partnership) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders' agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, limited liability company, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and (ii) any partnership of which (a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof), whether in the form of general, special or limited partnership interests or otherwise, or (b) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

"Vessel" shall mean one or more shipping or drilling vessels or drilling rigs, whose primary purpose is the maritime transportation of cargo or the exploration and production drilling for crude oil or hydrocarbons, or which are otherwise engaged, used or useful in the Borrower's business, in each case together with all related spares, equipment and any additions or improvements.

		2.	
COMMITMENT AND LOANS; BORROWING PROCEDURES; NOTES

Section 2.01  Commitment.  Subject to the terms of this Agreement and from time to time on any Business Day occurring from and after the Effective Date until one month prior to the Maturity Date (the "Commitment Termination Date"), the Lender agrees that it will make loans ("Loans") to the Borrower on such Business Day in such amount as requested by the Borrower that shall not exceed the then available amount of the Commitment.  The Lender shall not be permitted or required to make any Loan if, after giving effect thereto, the aggregate principal amount of all outstanding Loans would exceed the amount of the Commitment.  On the terms and subject to the conditions hereof, the Borrower may from time to time borrow, prepay and reborrow Loans up to the then available amount of the Commitment.

Section 2.02  Method of Advances.  The Borrower shall request each Loan by delivering to the Lender a written borrowing request by 10:00 a.m., London time, not less than one (1) Business Day prior to the requested Business Day of disbursement, or such other period as may be agreed between the Borrower and the Lender, in a minimum amount of $5,000,000 and an integral multiple of $1,000,000 or, if less, in the then available amount of the Commitment (or in any other amount as may be agreed between the Borrower and the Lender from time to time).  Such borrowing request shall specify an Interest Period applicable to such Loan.  On or before 11:00 a.m. on the date of each disbursement, and so long as such borrowing request complies with the requirements under this Agreement (including, but not limited to, the aggregate principal borrowing limit set forth in Section 2.01), the Lender shall make available the amount of the Loan by depositing by wire transfer the same in immediately available funds

by in the bank account of the Borrower or such other account, as specified in such borrowing request.

Section 2.03  Notes.  The Borrower agrees that, upon the request by the Lender, the Borrower will execute and deliver to the Lender a promissory note in the form attached hereto as Exhibit A (the "Note") evidencing the Loans made by, and payable to, the Lender in a maximum principal amount equal to the Commitment.  The Borrower hereby irrevocably authorizes the Lender to make (or cause to be made) appropriate notations on the grid attached to the Note (or on any continuation of such grid), which notations, if made, shall evidence, among others, the date of, the outstanding principal amount of, and the interest rate and applicable Interest Period of each Loan.  Such notations shall be conclusive and binding on the Borrower absent manifest error; provided that the failure of the Lender to make any such notations shall not limit or otherwise affect any obligations of the Borrower.

		3.	
MATURITY, PAYMENT AND PREPAYMENT; FEES

Section 3.01  Maturity.  The Borrower shall repay the aggregate principal amount of all outstanding Loans, together with interest as calculated in accordance with Section 4.01, to the Lender on 31't December 2021 (the "Maturity Date").  With 7 days' prior written notice to the Lender, the Borrower shall have the option to extend the Maturity Date until 31s` December 2022 .

Section 3.02  Optional Prepayment.  The Borrower may, at its option, at any time prepay in whole or in part any Loan without any premium or penalty, together with interest as calculated in accordance with Section 4.01, in a minimum amount of $5,000,000 and an integral multiple of $1,000,000, or in any other amount as may be agreed between the Borrower and the Lender from time to time.

Section 3.03  Mandatory Prepayment.

(a)          Upon the occurrence of a Change of Control, the Borrower shall, substantially simultaneously with such occurrence (and in any event not later than the first Business Day next following), pay all Loans and other amounts outstanding hereunder (the "Prepaid Amount") in full, plus 20% of such Prepaid Amount.

Section 3.04  Arrangement Fee.  The Borrower shall pay to the Lender on the Effective Date an arrangement fee of 1.0% of the initial Commitment in effect on the Effective Date.

Section 3.05  Commitment Fee.  The Borrower agrees to pay to the Lender, for the period commencing on the Effective Date and continuing through the Commitment Termination Date, a commitment fee in an amount equal to 1.00% per annum on the sum of the average daily unused portion of the Commitment.  All commitment fees payable pursuant to this Section 3.05 shall be calculated on a year comprised of 360 days and payable by the Borrower in arrears on the Effective Date and thereafter on each Semi-Annual Payment Date, commencing

with the first Semi-Annual Payment Date following the Effective Date, and on the Commitment Termination Date.

Section 3.06  Termination Fees.  In the event the Borrower refinances and terminates (the "Termination") the facility under this Agreement by entering into a new agreement with a different lender and applying the proceeds thereof to pay off all Loans and other amounts outstanding hereunder (the "Paid-off Amount") in full, in addition to the Paid-off Amount, the Borrower shall pay to the Lender (i) 5% of the Paid-off Amount if the Termination occurs during the first year after the Effective Date, (ii) 3% of the Paid-off Amount if the Termination occurs during the second year after the Effective Date and (iii) 1% of the Paid-off Amount if the Termination occurs during the third year after the Effective Date (collectively, the "Termination Fees").

Section 3.07  Payment.  Except to the extent otherwise agreed between the Borrower and the Lender, all payments of principal of, and interest on, the Loans to be made by the Borrower under this Agreement shall be made in United States Dollars, in immediately available funds, without set-off or counterclaim, to the Lender.

		4.	
INTEREST

Section 4.01  Interest Rate.  The unpaid principal of each Loan shall bear interest, during each Interest Period applicable thereto, equal to the sum of the LIBOR Rate for such Interest Period plus six and a half percent (6.50%) per annum until the date upon which all amounts owing under such Loan have been repaid in full.  All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days and be payable in arrears on each Semi-annual Payment Date.  Payments due on other than a Business Day shall (except as otherwise required by clause (b) of the definition of "Interest Period") be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees in connection with that payment.

Section 4.02  Default Rate.  On and after the date any Event of Default has occurred and for so long as such Event of Default is continuing, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on all outstanding Loans at a rate per annum equal to the rate of interest that otherwise would be applicable to such Loan plus 2% per annum.

		5.	
CONDITIONS PRECEDENT TO THE EFFECTIVE DATE.

Section 5.01  Effective Date.  The effectiveness of this Agreement shall be subject to the satisfaction of each of the following conditions precedent:

(a)          The Lender shall have received executed counterparts of this Agreement, duly executed and delivered by an authorized officer of the Borrower.

(b)          The Lender shall have received any fees, costs and expenses due from the Borrower pursuant to Section 3.04 and 10 hereof.

Section 5.02  All Loans.  The obligation of the Lender to make any Loan shall be subject to the satisfaction of each of the following conditions precedent:

(a)          Both before and after giving effect to any Loan, (i) the representations and warranties set forth in each Facility Document shall be true and correct in all material respects with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date), in each case other than representations and warranties that are subject to a Material Adverse Effect or a materiality qualifier, in which case such representations and warranties shall be (or shall have been) true and correct in all respects, and (ii) no Default shall have then occurred and be continuing.

(b)          The Lender shall have received a borrowing request in accordance with Section 2.02, executed and delivered by an authorized officer or attorney-in-fact of the Borrower.  Each of the delivery of a borrowing request and the acceptance by the Borrower of the proceeds of such Loan shall constitute a representation and warranty by the Borrower that on the date of such Loan (both immediately before and after giving effect to such Loan and the application of the proceeds thereof) the statements made in Section 6 hereof are true and correct.

		6.	
REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lender that, as of the Effective Date and as of the date of each disbursement:

Section 6.01  Existence and Power.  It is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has full power, authority and legal right to execute, deliver and perform this Agreement and each of the Facility Documents to which it is a party.

Section 6.02  Authority.  The execution and delivery by it of this Agreement and each of the other Facility Documents to which it is or will be a party, and the performance by it of its obligations hereunder and thereunder (a) have been duly authorized by all necessary corporate action on its part; (b) do not violate any provision of its organizational documents or any laws of the Marshall Islands or any other applicable jurisdiction, or any governmental rule, regulation or order thereunder, or of any indenture, agreement or other instrument, license, judgment or order applicable to it or by which its properties are bound; and (c) do not breach, create a default under (with or without any passage of time or giving of notice or both) or result in the creation or imposition of any Lien upon any of its revenues, assets or properties under, any agreement, contract or instrument by which any of its revenues, assets or properties may be bound or affected.

Section 6.03  Governmental Approvals.  No authorization, consent, approval, order, license or permit from, or filing registration or qualification with, any governmental

agency is required to authorize or permit the execution, deliver and performance by it of the Facility Documents.

Section 6.04  Binding Obligations.  Each Facility Document constitutes the legal, valid and binding obligations of the Borrower enforceable in accordance with its terms, enforceable against the Borrower in accordance with its terms.

Section 6.05  Trade names and Place of Business.  (a) The Borrower has no trade names, fictitious names, assumed names or "doing business as" names or other names under which it has done or is doing business and (ii) the registered office of the Borrower is the address set forth on the signature pages hereto or such other address of which the Borrower has notified the Lender.

		7.	
COVENANTS OF THE BORROWER

Section 7.01  Use of Proceeds.  The Borrower will apply the proceeds of each Loan for the purposes referred in the Recitals of this Agreement.

Section 7.02  Notices.  As soon as possible and in any event within three (3) Business Days after the Borrower obtains knowledge thereof, the Borrower will notify the Lender of:

(a)          the occurrence of a Default or an Event of Default, along with a detailed description thereof and the action that the Borrower has taken and proposes to take with respect thereto; and

(b)          the occurrence of any default or event of default under any agreement or other contractual obligation to which the Borrower is a party, which could reasonably be expected to have a material adverse effect on the rights and remedies of the Lender under any Facility Document or the ability of the Borrower to perform its obligations under any Facility Document.

Section 7.03  Maintenance of Existence; Compliance with Contracts, Laws, etc.  The Borrower will preserve and maintain its legal existence, perform in all material respects their obligations under material agreements to which the Borrower is a party, and comply in all material respects with all applicable laws, rules, regulations and orders, including the payment (before the same become delinquent), of all taxes, imposed upon the Borrower or upon its property except to the extent being diligently contested in good faith by appropriate proceedings.

Section 7.04  Maintenance of Properties.  The Borrower will maintain, preserve, protect and keep its respective properties in good repair, working order and condition (ordinary wear and tear excepted), and make necessary repairs, renewals and replacements so that the business carried on by the Borrower may be properly conducted at all times, unless the Borrower determines in good faith that the continued maintenance of such property is no longer

economically desirable, necessary or useful to the business of the Borrower or any of its Subsidiaries.

		8.	
WITHHOLDING; GROSS-UP

Section 8.01 Withholding.  If any withholding or deduction from any payment to be made by the Borrower under this Agreement is required in respect of any taxes pursuant to any applicable law, rule or regulation, the Borrower will: (a) pay to the relevant authority the full amount required to be so withheld or deducted; (b) promptly forward to the Lender an official receipt or other documentation satisfactory to the Lender evidencing such payment to such authority; and (c) make such payment to the Lender net of any such withholding deduction.

Section 8.02 Gross-Up.  If the Borrower makes a payment under Section 8.01, and the Lender is subsequently unable to obtain a credit or a refund in the full amount of such withholding or deduction, the Lender will so notify the Borrower.  In that case, the Borrower must pay to the Lender, on demand, such additional amount as is necessary to ensure that the net amount received by the Lender with respect of such payment is equal to the full amount the Lender would have received had no such withholding or deduction been required.  If the Lender is entitled to an exemption from or reduction of withholding tax with respect to payments made under any this Agreement, the Lender shall deliver to the Borrower, at the time or times reasonably requested by the Borrower, such properly completed and executed documentation reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate of withholding.  No additional amounts shall be payable under this Section 8.02 with respect to (a) taxes imposed on or measured by net income (however denominated), franchise taxes, and branch profits taxes, in each case, imposed as a result of the Lender being organized under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing such tax (or any political subdivision thereof), (b) any taxes imposed on the Lender by reason of its failure to deliver documentation to the Borrower pursuant to the immediately preceding sentence or (c) any U.S. federal withholding taxes imposed under Sections 1471 through 1474 of the United States Internal Revenue Code of 1986, as amended.

		9.	
EVENTS OF DEFAULT

Each of the following events or occurrences described in this Section 9 shall constitute an "Event of Default":

(a)          Non-payment.  Failure of the Borrower to pay when due any principal, interest or fee amount payable under this Agreement or the Note at the place at and in the currency in which it is expressed to be payable, unless such failure is cured within three (3) Business Days of its due date.

(b)          Cross-Acceleration.  The occurrence of any event or condition that results in any indebtedness of the Borrower in excess of $10,000,000 under any agreement of the Borrower becoming due prior to its scheduled maturity or requires the prepayment, repurchase, redemption or defeasance thereof prior to its scheduled maturity.

(c)          Bankruptcy, Insolvency, etc.  The Borrower shall:

(i)          become insolvent or generally fail to pay, or admit in writing its inability or unwillingness generally to pay, debts as they become due;

(ii)          apply for, consent to, or acquiesce in the appointment of a trustee, receiver, sequestrator or other custodian for any substantial part of the property of any thereof, or make a general assignment for the benefit of creditors;

(iii)          in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for a substantial part of the property of any thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 60 days; provided that the Borrower hereby expressly authorizes the Lender to appear in any court conducting any relevant proceeding during such 60-day period to preserve, protect and defend their rights under the Facility Documents;

(iv)          permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law or any dissolution, winding up or liquidation proceeding, in respect thereof, and, if any such case or proceeding is not commenced by the Borrower, such case or proceeding shall be consented to or acquiesced in by the Borrower or shall result in the entry of an order for relief or shall remain for 60 days undismissed; provided that the Borrower hereby expressly authorizes the Lender to appear in any court conducting any such case or proceeding during such 60-day period to preserve, protect and defend their rights under the Facility Documents; or

(v)          take any action authorizing, or in furtherance of, any of the foregoing.

(d)          Others.  Failure by the Borrower to duly perform or observe any agreement contained in any Facility Document unless such failure is cured after 30 days after the earlier to occur of notice thereof given to the Borrower by the Lender or the date on which the Borrower has knowledge of such default.

Upon the occurrence and continuation of any Event of Default, the Lender may by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Lender to enforce its claims against the Borrower:

(x)          declare the Lender's obligation to make Loans terminated, whereupon such obligation shall forthwith terminate immediately; and

(y)          declare the principal of, and any accrued interest in respect of, the Loans and all obligations and damages owing by the Borrower to the Lender under this Agreement to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower;

Provided that if any Event of Default described in clause (c) of Section 9 with respect to the Borrower shall occur, the Commitment (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of all outstanding Loans and all other obligations under this Agreement shall automatically be and become immediately due and payable, without notice or demand to any Person.

		10.	
PAYMENT OF COSTS AND EXPENSES

Until all of the obligations of the Borrower are satisfied in full, the Borrower agrees to pay on demand all expenses of the Lender in connection with:

(a)          the negotiation, preparation, execution and delivery of each Facility Document, including schedules and exhibits, and any amendments, waivers, consents, supplements or other modifications to any Facility Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated;

(b)          the filing, registration or recording of any Facility Document and all amendments, supplements, amendment and restatements and other modifications to any thereof, searches made following the Effective Date in jurisdictions have been recorded and any and all other documents or instruments of further assurance required to be filed or recorded by the terms of any Facility Document;

(c)          the preparation and review of the form of any document or instrument relevant to any Facility Document; and

(d)          any fees and expenses that the Lender incurs on the Effective Date and will incur thereafter with respect to any Facility Document.

The Borrower further agrees to pay, and to hold the Lender harmless from all liability for, any stamp or other taxes that may be payable in connection with the execution or delivery of each Facility Document, the Loans or the issuance of the Note.  The Borrower also agrees to reimburse the Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys' fees and expenses of counsel to the Lender) incurred by the Lender in connection with (x) the negotiation of any restructuring or "work-out" with the Borrower, whether or not consummated, of any obligations under the Facility Documents and (y) the enforcement of any obligations under the Facility Documents

		11.	
OTHER ACTIONS

Each of the parties hereby undertakes to the other that it will do all such acts and things and execute all such instruments and documents as may be necessary to carry into effect or to give legal effect to the provisions of this Agreement and the other Facility Documents.

		12.	
NOTICES

All notices under this Agreement shall be in writing and shall be deemed effective when delivered via courier, or transmitted by any standard form of telecommunication to the applicable address or facsimile number set forth below (or such other addresses as one party identifies to the other in writing):

If to the Lender:

Sierra Investments Inc.

do MARE SERVICES LIMITED

5/1 Merchants Stree, Valletta VLT

1171, Malta

Attn: Mare Services Limited

Tel: (+356) 21 222 097

Fax: (+356) 21 249 950

E-mail: info@cefaiadvocater.com

If to the Borrower:

DryShips Inc.

Athens licenced shipping office

109 Kifissias Avenue and Sina Street

151 24, Marousi

Athens, Greece

Attention: Dimitris Dreliozis

Facsimile. (+30) 216 2006 241

Email: finance@dryships.com

		13.	
PARTIAL INVALIDITY AND WAIVER

The illegality, or unenforceability of any provision of this Agreement under the law of any jurisdiction shall not affect its legality, validity or enforceability under the law of any other jurisdiction nor the legality, validity or enforceability of any other provision.

		14.	
ASSIGNMENT

Neither party is permitted to transfer any of its rights, benefits and obligations hereunder without the prior written consent of the other party except that the Lender may assign this Agreement, or any portion of this Agreement to Lender's lender or other financing party in connection with a credit facility of Lender.

		15.	
AMENDMENTS; NO WAIVER

(a)          Except as otherwise provided in this Agreement, the terms and conditions of this Agreement may only be changed, modified or altered by a written agreement signed by each of the parties to this Agreement.

(b)          No delay, failure or discontinuance of the Lender in exercising any right, power or remedy under any of the Facility Documents shall affect or operate as a waiver of such right, power or remedy; nor shall any single or partial exercise of any such right, power or remedy preclude, waive or otherwise affect any other or further exercise thereof or the exercise of any other right, power or remedy.  Any waiver, permit, consent or approval of any kind by the Lender of any breach of or default under any of the Facility Documents must be in writing and shall be effective only to the extent set forth in such writing.

		16.	
COUNTERPARTS

This Agreement may be executed in any number of counterparts, and all such counterparts taken together shall be deemed to constitute one and the same instrument.

		17.	
GOVERNING LAW

This Agreement and the Notes shall be governed by and construed in accordance with the laws of England State

		18.	
SUBMISSION TO JURISDICTION

Any disputes which may arise out of or in connection with this Agreement shall be referred to arbitration in London, United Kingdom in accordance with the rules of London Maritime Arbitrators Association (LMAA).

The remainder of this page was left blank intentionally

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and date first set forth above.

	 	
DRYSHIPS INC., as Borrower

	 
	 	 	 
	 	 	 
	 	
By:

	
/s/ Dimitris Dreliozis

	 
	 	 	
Name:

	
Dimitris Dreliozis

	 
	 	 	
Title:

	
Vice President of Finance

	 

	 	
SIERRA INVESTMENTS INC., as Lender

	 
	 	 	 
	 	 	 
	 	
By:

	
/s/ Savas Tournis

	 
	 	 	
Name:

	
Savas Tournis

	 
	 	 	
Title:

	
Attorney in Fact

	 

EXIIIBIT A

FORM OF PROMISSORY NOTE

	
$200,000,000

	
Dated:________, 201_

FOR VALUE RECEIVED, the undersigned, DryShips Inc., a Marshall Islands corporation (the "Borrower") HEREBY PROMISES TO PAY to Sierra Investments Inc., a Marshall Islands corporation, and its registered assigns (the "Lender"), the principal sum of TWO HUNDRED MILLION U.S. DOLLARS ($200,000,000) or, if less, the principal amount that is outstanding on the Maturity Date; provided, however, that such payment shall be in the amount necessary to repay in full the unpaid principal amount hereof together with interest on the principal amount hereof from time to time outstanding from the date hereof until such principal amount is paid in full.  Both principal and interest are payable to the Lender in U.S. Dollars.

This Promissory Note is one of the Notes issued pursuant to the Revolving Facility Agreement, dated      May 2017 among the Borrower and the Lender (as amended, restated, supplemented or otherwise modified from time to time, the "Agreement") and is subject to and entitled to the benefits of the Facility Agreement.  Capitalized terms that are not defined in this Promissory Note have the meanings given to them in the Agreement.

The principal amount of indebtedness evidenced hereby shall be payable in the amounts and on the dates specified in the Facility Agreement, the terms of which are incorporated herein by reference.  Interest thereon shall be paid until such principal amount is paid in full at such interest rates and at such times, and pursuant to such calculations, as are specified in the Agreement.

During the continuance of any one or more Events of Default as specified in the Agreement, all amounts then remaining unpaid on this Promissory Note shall become, or may be declared to be, immediately due and payable, all as provided in the Agreement.

Upon the failure of the Borrower to pay the Lender when due and payable any and all amounts payable by the Borrower to the Lender under the provisions of this Promissory Note, the entire unpaid amount of this Promissory Note then outstanding shall become immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are expressly waived, and without any action on the part of the Lender.  If this Promissory Note is referred to an attorney for collection or enforcement, the Borrower shall pay all costs and expenses of collection or enforcement, including attorneys' fees.

Any disputes which may arise out of or in connection with this Agreement shall be referred to arbitration in London, United Kingdom in accordance with the rules of London Maritime Arbitrators Association (LMAA).  By execution and delivery of this Promissory Note, the Borrower consents, for itself and in respect of its property, to the jurisdiction referred above.

The Borrower irrevocably waives any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any action or proceeding in such jurisdiction in respect of this Promissory Note or other document related thereto.

No failure on the part of the Lender to exercise, and no delay in exercising, any right, power or privilege hereunder shall operate as a waiver thereof or a consent thereto; nor shall a single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

THIS PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF ENGLAND.

	 	 	
DRYSHIPS INC.

	 	 	 
	 	 	 	
By:

	 
	 	 	 	
Name:

	 
	 	 	 	
Its:

	 

	
Date

	
Principal Amount of Loans

	
Interest Period and Interest Rate with Respect Thereto

	
Principal Amount of Loans Repaid

	
Unpaid Principal  Amount of Loans

	
Notation Made By

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