PROGRESS AS PROMISED. Plans for our Infinity class vessels progressing as-planned. A MESSAGE FROM OUR PRESIDENT GEMINI CHARTER TO FEMA

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1 INSIDER ISSUE 8 WINTER 2017 A MESSAGE FROM OUR PRESIDENT GEMINI CHARTER TO FEMA PROGRESS AS PROMISED Plans for our Infinity class vessels progressing as-planned. SunStone Ships, Inc Biscayne Boulevard, PHB Miami, Florida tel: fax:

2 Th e B e s t Way To P r e d i c t Th e F u t u r e I s To C r e at e It A LETTER FROM THE EDITOR To our OWNERS, CLIENTS, SUPPLIERS, COLLEAGUES and FRIENDS; M/V VICTORY II M/V OCEAN ATLANTIC Introducing INFINITY, a brand new class of expedition cruise vessels joining the SunStone fleet starting in 2019 SunStone currently has 10 vessels in its managed fleet, and has M/V SEA SPIRIT ordered four new INFINITY class vessels with options for an additional six. As the largest tonnage provider for the expedition M/V VICTORY I market, SunStone offers vessels on charter to cruise companies, tour-operators and travel companies World-Wide. Let s not look behind. That s not where we re going! ANONYMOUS SunStone specializes in commercial management of passenger ships and is responsible for the buying, selling and chartering of the M/V OCEAN DIAMOND SunStone fleet. Embark on a never-ending exploration of the globe, M/V SILVER DISCOVERER with the direction and hands-on experience of SunStone Ships. Follow the Sun M/V OCEAN ENDEAVOUR Here s to EVERYONE S continued growth, success, and smooth sailing in 2018! M/V SEA ENDURANCE Sincerely, G U I D A N C E I N N OVAT I O N S E R V I C E M/V OCEAN ADVENTURER Wherever Your Destination SunStone Can Take You There. M/V OCEAN NOVA Charmaine Morris, Executive Services Administrator Winter 2017 SU N STO N E I N SI D E R 3

3 TABLE OF CONTENTS The farther back you can look, the farther forward you are likely to see. WINSTON CHURCHILL 9 PRESIDENT'S MESSAGE INSIDE SunStone President s Message Holiday Party The SunStone Team Gemini Charter Farewell Charmaine 6 Greg Mortimer SMA-China Fleet Update Vessels for Sale or Charter Portfolio of Ships A t the end of the year we always like to look at the year in review, and evaluate the good and the bad! 2017 for the SunStone fleet was both challenging and positive saw the largest number of ship conversions and upgrades in the Company s history. Looking in the rearview mirror, admittedly we overestimated our own capabilities, as well as that of some of our contractors and partners within the industry. It was also the year in which we planned changes in the management of CMI, which did not make the process any easier. However, on the positive side, the SunStone Fleet is now in its best condition ever, and combined with the very good market for expedition cruises, gives a bright outlook for the future. In 2018 we will continue some vessel upgrades; however not to the magnitude as in 2017 and in the spring OCEAN DIAMOND, SEA DISCOVERER and SEA ENDURANCE will undergo larger upgrades. At this time all vessels are on charter and existing charters are continually being extended as reported in the following pages. The entire cruise industry is doing well; the expedition market is especially booming and it is our expectation that the next two to three years will see a shortage in available tonnage for this market segment. Winston Churchill wrote quite a number of amazing quotes in his many speeches to the public as well as in the political arena, and especially during WWII; one such quote being in 1940 when he said, The farther back you can look, the farther forward you are likely to see. In SunStone, aboard the vessels, as well as shoreside and in our associated companies, CMI and CMIL, there is vast experience with many of our colleagues having 20, 30 and 40 years in the cruise industry. Many of us not only have the experience, but have actually worked together as colleagues for over 20 years. This makes the group able to look back, not only over the last year, but for several years, at shipmanagement in general, the cruise industry and the expedition cruise market. It is my opinion that, like Mr. Churchill said, this give us the experience to also look forward and shape the future accordingly. As you read this the holiday season is in the past and we have moved into 2018 at high speed. I would like to take this opportunity to thank everyone on the ships and in the shorebased organizations for a job well done in 2017 and wish all our colleagues and friends in the industry, all the best for S U N STO NE I NS I D ER Winter Niels-Erik Lund President, CEO Winter 2017 SU N STO N E I N SI D E R 5

4 HOLIDAY PARTY S U N STO NE I NS I D ER Winter 2017

5 THE SUNSTONE TEAM NIELS-ERIK LUND PRESIDENT/CEO SUNSTONE SHIPS, INC. CAPTAIN RODOLFO SPINELLI CO-CEO SUNSTONE MARINE ADVISORS Has the overall responsibility for the supervision of the newbuilding series INFINITY in China. Captain Spinelli has relocated to China with his family where he will live for the next few years overseeing this project. CAPTAIN JOHN KAFOUROS CO-CEO SUNSTONE MARINE ADVISORS John is stationed in the Miami office, taking care of the aspects relating to the owners, charterers and partners for the newbuilding series as related to Tillberg Design, Ulstein Design and Solutions and Makinen. ANTONIO SUAREZ VICE PRESIDENT, FINANCE SUNSTONE MARINE ADVISORS ALAN PRITZKER VICE PRESIDENT, FINANCE-SUNSTONE SHIPS Gemini FEMA Charter To In November SunStone negotiated a short-term charter for the CELESTYAL NEFELI, now renamed GEMINI, for relief work in the Caribbean. The vessel s management was taken over by CMI and in early December the GEMINI was positioned to St. Thomas and on December 21, was delivered on charter to house up to 1000 FEMA workers. KENNETH ENGSTROM CONSULTANT Fleet technical and insurance matters for the SunStone group CHARMAINE MORRIS CONSULTANT Administrative supervisor for the SunStone group 8 S U N STO NE I NS I D ER Winter 2017 SunStone is currently negotiating 2018 summer season charters for the vessel, as well as long-term employment.

6 {FA R E W E L L, C H A R M A I N E } and best wishes Niels-Erik Lund, President & CEO Back in 1983 I worked for Charmaine was instrumental in looking at more exciting and DFDS in Copenhagen - a large, all of this. interesting positions utilizing her talents. old, publicly listed shipping company - where I was Director In 2012 ISP was sold to a German of Finance. DFDS had a cruise private equity firm and at the end In November Charmaine found a company in Miami, called of 2013, Charmaine and I moved position as Executive Assistant to Scandinavian World Cruises. to the newly established company, the President of THE WORLD and Unfortunately this company was SUNSTONE SHIPS. resigned from SunStone, but is still Plans for our Infinity class vessels progressing as-planned. assisting the company on a part- operating with very large losses and I was asked to move to Miami Over the years Charmaine has time basis, where she continues and head up the company - with been responsible for our inhouse to be responsible for our Cocktail the objective of turning it around. magazines; first ISPieces and now Reception in early December, as In January 1983 I moved to Miami the SunStone Insider. She is the well as assisting SunStone will and, at the time, there were more brain behind the rebuilding of administrative functions. than 100 persons employed in our office facilities, which today the SWC offices in Miami. Among houses, CMI, CMIL, Victory I would like to take this them, was a young woman with Cruise Lines and SunStone Ships. opportunity to thank Charmaine the name Charmaine Morris, who In addition to her day-to-day for being an amazing colleague became my assistant in tasks in SunStone, she has been and friend for more than 30 years. responsible for all special events Without her we would not have We worked together in SWC such as our famous December had the success we had in both ISP until 1988 when I founded Cocktail Reception, and has and SunStone, and for sure, there ISP and luckily Charmaine taken care of large delegations would not be our very nice offices was willing to move with me of visitors. and the great holiday receptions. to become part of building International Shipping Partners. PROGRESS AS PROMISED As SunStone has no day-today functions, the operation In ISP Charmaine and I worked is very small and Charmaine s together, just the two of us in the responsibilities have been beginning, but shortly thereafter reduced. Over the past year she the company started expanding has not had enough challenges and ISP Leisure was formed, we nor exciting work, which we have opened an office in the UK and discussed and she has been IN OUR LAST ISSUE, we announced the formation of SunStone Marine Advisors (SMA), who are overseeing our Infinity class new build project. On the following pages, you ll learn about two more major milestones: Our first charterer of an Infinity-class vessel, Aurora Expeditions has named their vessel SMA has opened a China office to oversee the building of the vessels We would like to wish Charmaine the very best in her new endeavors and we will continue to keep in touch; who knows, our paths may cross again in the future. 10 S U N S TONE I NS I DER Winter 2017 Winter 2017 SU N STO N E I N SI D E R 11

7 PROGRESS AS PROMISED Aurora Expeditions, Australia s leading expedition cruise company, has announced that its new world-class expedition ship will be named Greg Mortimer in honor of the Australian adventurer and cofounder of Aurora Expeditions. As the first Australian to reach the summits of Mount Everest, K2, Annapurna II and Chongtar in the Himalaya all without supplementary oxygen and mounts Vinson and Minto in Antarctica, Greg Mortimer has accomplished many adventurous feats in often dangerous places in his lifetime but concedes the naming of the new Aurora Expeditions ship is at the edge of his comfort zone. Mortimer was also the first Australian to climb Antarctica s highest peak, Vinson Massif (1988) and the first to climb Mount Minto in the Admiralty Mountains 12 S U N S TONE I NS I DER Winter 2017 of Antarctica (1988). He trained as a geochemist and geologist, has worked as a survival-training instructor and as a Scientific Affairs Adviser for the New Zealand Antarctic Division. Mortimer is the recipient of a Medal of the Order of Australia (OAM) and three Australian Geographic Society medals. THE GREG MORTIMER, with its cutting edge design, features safe return to port (SRF) a feature only required for much larger vessels. The SRP allows the vessel to safely return to port with passenger and full services if one of the vessels main systems is off line. The vessel is also equipped with virtual anchoring which keeps the vessel in position without the need to drop anchor. The vessel also features a very spacious dressing room and zodiac boarding area as well as a kayak storage and boarding area. With side ports located on the port and starboard sides of the vessel it can facilitate loading and offloading of four zodiacs at the same time. A boarding area aft on also offer passengers quick and safe boarding onto kayaks. In late January 2018 the SMA building team in charge of the construction of THE GREG MORTIMER, are preparing to inspect the newly constructed mock-up cabins. JUNE 2018 will see the official keel laying for the expedition vessel THE GREG MORTIMER. Winter 2017 SU N STO N E I N SI D E R 13

8 PROGRESS AS PROMISED Conference room (left) The SMA Team We employed the first full time member of the team, Document Controller Ms. Vivian Chen, in October Vivan, who was born in China, has degrees in Accounting and English Language from the Nantong Vocational College and is fluent in English, Mandarin and Cantonese, joins the project after being Document Controller for Dana Petroleum and Seadrill Management. Inspection team offices (above) In addition to Vivian, in December 2017 Capt. Alberto Santamaria joined us in the capacity of Site Team Leader for Project Infinity. Ms. Vivian Chen Born in Chiriqui, Republic of Panama, Capt. Santamaria studied at, and graduated from the Murmansk State Marine Academy in Russia, where he received a Masters Degree in Technical Science for Nautical Engineering, specializing in Industrial Navigation. He is fluent in Spanish, English and Russian languages and also speaks basic Mandarin. After sailing as Deck Officer and Master onboard passenger ships for over ten years, he joined the Maritime Holdings Group and Seahawk Group of Companies ashore. Amongst other projects, Capt. Santamaria managed the eight-month conversion of the M.S. CT Neptune at Yulian Shipyard in Southern China. Capt. Alberto Santamaria SUNSTONE MARINE ADVISORS OFFICE OPENS AT CMHI Capt. Rodolfo Spinelli and Capt. John Kafouros at CMHI Booth in Marintec As the final design phase of the first of the series in the Project Infinity, the M.S. Greg Mortimer is under full steam ahead, SunStone Marine Advisors have now enlarged its foot print in the yard. In October 2017 SunStone Marine Advisors opened the Project Infinity Office in the China Merchants Heavy Industries (CMHI) Shipyard Facility in Jiangsu, China, in preparation for the full site inspection team. It is expected that at the height of the project the site office will engage of a full time staff of fifteen inspectors and engineers for the first vessel, as SunStone Marine Advisors will be key to delivering the M.S. Greg Mortimer according to schedule and with the highest standard expected by the Charterer. SMA China Activities As part of the activities supporting SMA and the New Building Program, SMA Directors Capt. Kafouros and Capt. Spinelli also attended Marinetec Conference and Exhibition in Shanghai in early December 2017, where they meet with representatives of Bureau Veritias, CMHI and several vendors that will be involved in the Project Infinity program. 14 SUNSTONE INSIDER Winter 2017 Winter 2017 SUNSTONE INSIDER 15

9 FLEET UPDATE FLEET UPDATE SEA ENDURANCE / Long-term charter signed For most of 2017 SunStone negotiated a long-term charter for the SEA ENDURANCE and in December, a five-year, bareboat/hire purchase contract was signed with the Norwegian company, Arctic Sea Explorer with a delivery December 31, Albatros Travel, who currently has the SEA ENDURANCE on charter for the 2018 summer season, have turned over all their sub-charters and bookings for this period so that the vessel can perform all its scheduled cruises. It was agreed that CMI and CMIL will continue as the Technical and Hotel Managers, respectively, so there are no changes for the 2018 season. SILVER DISCOVERER / Charter Extension In November 2017, SunStone negotiated an extension of the SILVER DISCOVERER charter to Silversea. So far the charter is extended to end July 2019, and further extensions are being discussed. By the end of January, Silversea will make the decision as to the continuation of a long-term charter of the vessel; alternatively the SILVER DISCOVERER will be made available for sale or charter as of August 2019 for a delivery in Singapore, and listed on the SunStone website. SEA SPIRIT / Charter Extension Over the last three years the SEA SPIRIT has been fully upgraded in all interior spaces and has been on charter to Poseidon Expedition for a number of years. Poseidon has decided to keep the vessel and so far, the charter has been extended until May Arctic Sea Explorer have stated that they will most likely expand the season, thereby incorporating cruises in the north in early spring and late fall. Otherwise, the vessel will continue its Svalbard and Arctic itineraries for the foreseeable future. SEA DISCOVERER to be renamed VICTORY II on charter to Victory Cruise Lines SunStone have arranged a long-term charter contract of the SEA DISCOVERER to Victory Cruise Lines. In spring 2018 the vessel will be renamed VICTORY II and upgraded to the same standards as the VICTORY I; however with additional features such as a fully-enclosed Aft Deck, making this restaurant area usable for parties, group activities and various food events. A contract has been signed with Makinen, Finland, who will be responsible for the interior upgrade. OCEAN ENDEAVOUR / Charter Extension The SEA DISCOVERER will be delivered to Victory Cruise Lines this Summer in Halifax, where it will start Great Lakes cruises, operating alongside its sister ship, VICTORY I. In November SunStone finalized the extension of the OCEAN ENDEAVOUR charter to Quark Expeditions for winter season 2019/2020, where the vessel will operate cruises from Ushuaia as in previous years. Quark Expeditions continue to be very pleased with the OCEAN ENDEAVOUR product. 16 SUNSTONE INSIDER Winter 2017 Winter 2017 SUNSTONE INSIDER 17

10 VESSELS VESSELS FOR SALE OR CHARTER GEMINI This 900-passenger cruise vessel was redelivered in December after its charter to Celestyal Cruises operating as the CELESTYAL OUR MANAGED FLEET NEFELI. The vessel has since been chartered out as an accommodation vessel for relief work in the Caribbean. She is available for sale or charter with a delivery early fall In this issue of the SUNSTONE INSIDER and NEW HORIZONS, a combined fleet list will be presented for the SunStone ships, CMI and CMIL, a total of 15 vessels. OCEAN ATLANTIC The OCEAN ATLANTIC is currently on charter to Albatros Travel for winter seasons and for summer seasons starting in 2019, is available for the entire 2018 summer season or short term charters during summer The Fleet List will now show which company is involved in the various aspects of ships management. SunStone is the commercial manager for most of the vessels; CMI the technical managers for most of the vessels, as well as the administrative manager for most of the shipowning entities; and CMIL having the hotel concession on a number of the vessels.. OTHER VESSELS Several other vessels in the SunStone fleet have separate winter and summer charters and very often there are one to two month periods between seasons when the vessels go between the two Polar Regions, during which they are available for short term or specific voyage charters, typically in European waters. KEY Administrative by CMI = A Questions regarding charters or the acquisition of vessels in the fleet should be addressed to nlund@sunstoneships.com. 18 S U N S TONE I NS I DER Winter 2017 Commercial by SunStone = C Hotel Management by CMIL = H Technical Management by CMI = T Consulting Services = S Winter 2017 SU N STO N E I N SI D E R 19

11 M/V WORLD ODYSEEY T M/V SEA DISCOVERER GT ITC, NT 8402 GT 4954, NT M M Breadth 23 M Breadth M 5.79 M 4.02 M 21 KN 13 KN 709 passengers / 342 cabins 220 passengers / 110 cabins M/V OCEAN NOVA ACHT 20 S U N S TONE I NS I DER Winter 2017 CHT M/V SEA SPIRIT ACHT GT 2,183, NT 786 GT 4200, NT M M Breadth M M 3.40 M 4.20 M 13 KN 14 KN 98 passengers 127 passengers / 60 cabins Winter 2017 SU N STO N E I N SI D E R 21

12 M/V OCEAN DIAMOND ACH M/V POLAR PIONEER GT 8282, NT 2676 GT M 71.6 M Breadth 16.0 M 12.8 M 4.82 M 4.5 M 16 KN 10 KN 252 passengers / 113 cabins 54 passengers Russia M/V SEA ENDURANCE ACHT 22 S U N S TONE I NS I DER Winter 2017 H M/V SILVER DISCOVERER AC GT 1268, NT 405 GT 5218, NT M M 11 M 15.4 M 3.5 M 4.3 M 13 KN 18 KN 60 passengers / 26 cabins 132 passengers / 64 cabins Winter 2017 SU N STO N E I N SI D E R 23

13 M/V VICTORY I ACHT M/V GRAND CELEBRATION GT 4954, NT 1486 GT 47263, NT M M Breadth M M 3.89 M 7.60 M 13 KN 21 KN 224 passengers / 110 cabins 1908 pax / 751 cabins M/V OCEAN ADVENTURER ACHT 24 S U N S TONE I NS I DER Winter 2017 T M/V OCEAN ENDEAVOUR ACHT GT 4614, NT 1443 GT 12907, NT M M 16.2 M 21.0 M 4.34 M 5.57 M 17.2 KN 16 KN 160 passengers / 61 cabins 300 passengers / 164 cabins Winter 2017 SU N STO N E I N SI D E R 25

14 M/V FREEWINDS T M/V GEMINI GT 9780, NT 3699 GT ITC, NT M M M 22.5 M 5.51 M 5.50 M 13 KN 17.5 KN 392 passengers 960 passengers / 400 cabins M/V OCEAN ATLANTIC ACHT 26 S U N S TONE I NS I DER Winter 2017 AT M/V AMERICANA A GT 12798, NT 3883 GT 2354, NT M 68 M Breadth M Breadth M 5.64 M 3.0 M 17 KN 11 KN 240 passengers / 128 cabins 138 passengers / 69 cabins USA Winter 2017 SU N STO N E I N SI D E R 27