exv10w14






Exhibit 10.14




DATED 23 January 2009




DRYSHIPS INC.




- to -




DVB BANK SE





 







GUARANTEE AND INDEMNITY





 







STEPHENSON HARWOOD

One, St Paul’s Churchyard

London EC4M 8SH

Tel: +44 020 7329 4422

Fax: +44 020 7329 7100

(Ref: F21.054)











 









 








CONTENTS




	 	 	 	 	 
	 	 	Page	 
	1 Definitions and Interpretation
	 	 	2	 
	 
	 	 	 	 
	2 Representations and Warranties
	 	 	3	 
	 
	 	 	 	 
	3 Guarantee and Indemnity
	 	 	5	 
	 
	 	 	 	 
	4 Preservation of Guarantor’s Liability
	 	 	5	 
	 
	 	 	 	 
	5 Preservation of Finance Parties’ Rights
	 	 	7	 
	 
	 	 	 	 
	6 Undertakings
	 	 	9	 
	 
	 	 	 	 
	7 Payments
	 	 	12	 
	 
	 	 	 	 
	8 Currency
	 	 	14	 
	 
	 	 	 	 
	9 Set-Off
	 	 	14	 
	 
	 	 	 	 
	10 Application of Moneys
	 	 	15	 
	 
	 	 	 	 
	11 Partial Invalidity
	 	 	15	 
	 
	 	 	 	 
	12 Further Assurance
	 	 	16	 
	 
	 	 	 	 
	13 Miscellaneous
	 	 	16	 
	 
	 	 	 	 
	14 Notices
	 	 	16	 
	 
	 	 	 	 
	15 Counterparts
	 	 	17	 
	 
	 	 	 	 
	16 Law and Jurisdiction
	 	 	17	 






 









 






GUARANTEE AND INDEMNITY



Dated: 23 January 2009




BY:





	(1)	 	DRYSHIPS INC., a company incorporated according to the law of the Marshall Islands
whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, Marshall Islands MH 96960 (the “Guarantor”)





IN FAVOUR OF:





	(2)	 	DVB BANK SE (as universal successor in title of DVB BANK AG), acting as security
agent through its office at Platz der Republik 6, D-60325 Frankfurt am Main, Federal
Republic of Germany (the “Security Agent”).





WHEREAS:





	(A)	 	Each of the banks listed in Schedule 1 to the Loan Agreement (as defined below) (collectively
the “Lenders”) has agreed to lend to Drillship Hydra Owners Inc. and Drillship Paros Owners
Inc. on a joint and several basis (together, the “Borrowers”) its participation in a loan not
exceeding two hundred and thirty million Dollars ($230,000,000) (the “Loan”) on the terms and
subject to the conditions set out in a loan agreement dated 10 September 2007, as amended and
supplemented by a first supplemental agreement dated 10 January 2008, and as further amended
and supplemented by a second supplemental agreement dated 23 January 2009, each made between
the Borrowers (as borrowers), the Lenders (as lenders), the arrangers listed in Schedule 1 to
the Loan Agreement (as arrangers), DVB Bank SE as agent for the Lenders (the “Agent”), and the
Security Agent (as security agent and underwriter) (the “Loan Agreement”).






	(B)	 	Pursuant to the Loan Agreement, and as a condition precedent to the several obligations of
the Lenders to continue to make the Loan available to the Borrowers, the Borrowers have,
amongst other things, agreed to procure that the Guarantor execute and deliver this Guarantee
and Indemnity in favour of the Security Agent as security agent for the Finance Parties.




 









 










THIS DEED WITNESSES as follows:





	1	 	Definitions and Interpretation






	 	1.1	 	In this Guarantee and Indemnity:
	 
	 	 	 	“Default Rate” means interest at the rate calculated in accordance with clause 7.9
of the Loan Agreement.
	 
	 	 	 	“GAAP” means generally accepted accounting principles in the United States of
America.
	 
	 	 	 	“Guarantor’s Liabilities” means all of the liabilities and obligations of the
Guarantor to any of the Finance Parties under or pursuant to this Guarantee and
Indemnity, from time to time, whether in respect of principal, interest, costs or
otherwise and whether present, future, actual or contingent.
	 
	 	 	 	“Indebtedness” means the aggregate from time to time of: the amount of the Loan
outstanding; all accrued and unpaid interest on the Loan; and all other sums of any
nature (together with all accrued and unpaid interest on any of those sums) payable
by the Borrowers or any of them to any of the Finance Parties under all or any of
the Finance Documents.
	 
	 	 	 	“Original Financial Statements” means the audited consolidated financial statements
of the Guarantor for the financial year ended 31 December 2007.
	 
	 	1.2	 	Unless otherwise specified in this Guarantee and Indemnity, or unless the
context otherwise requires, all words and expressions defined in the Loan Agreement
shall have the same meaning when used in this Guarantee and Indemnity.
	 
	 	1.3	 	In this Guarantee and Indemnity:






	 	1.3.1	 	words denoting the plural number include the singular and vice versa;
	 
	 	1.3.2	 	words denoting persons include corporations, partnerships,
associations of persons (whether incorporated or not) or governmental or
quasi-governmental bodies or authorities and vice versa;
	 
	 	1.3.3	 	references to Clauses are references to clauses of this
Guarantee and Indemnity;




 









 






	 	1.3.4	 	references to this Guarantee and Indemnity include the
recitals to this Guarantee and Indemnity;
	 
	 	1.3.5	 	the headings and contents page(s) are for the purpose of
reference only, have no legal or other significance, and shall be ignored in
the interpretation of this Guarantee and Indemnity;
	 
	 	1.3.6	 	references to any document (including, without limitation,
to any of the Finance Documents) are, unless the context otherwise requires,
references to that document as amended, supplemented, novated or replaced from
time to time;
	 
	 	1.3.7	 	references to statutes or provisions of statutes are
references to those statutes, or those provisions, as from time to time
amended, replaced or re-enacted; and
	 
	 	1.3.8	 	references to any Finance Party include its successors,
transferees and assignees.






	2	 	Representations and Warranties






	 	 	The Guarantor represents and warrants to the Security Agent at the date of this Guarantee
and Indemnity and (by reference to the facts and circumstances then pertaining) on each day
throughout the Facility Period that:






	 	2.1	 	all representations and warranties given by the Borrowers in the Loan Agreement
in respect of the Guarantor and/or this Guarantee and Indemnity are and will remain
correct and none of them is or will become misleading; and
	 
	 	2.2	 	the Guarantor is a corporation, duly incorporated and validly existing under
the law of its jurisdiction of incorporation and has the power to own its assets and to
carry on its business as it is being conducted; and
	 
	 	2.3	 	the Guarantor has the power to enter into and perform this Guarantee and
Indemnity and has taken all necessary action to authorise its entry into and
performance of this Guarantee and Indemnity; and
	 
	 	2.4	 	the Guarantor is not insolvent or in liquidation or administration or subject
to any other formal or informal insolvency procedure, and no receiver, administrator,




 









 






	 	 	 	receiver, administrator, liquidator, trustee or analogous officer has been appointed in
respect of the Guarantor or all or any part of its assets; and
	 
	 	2.5	 	this Guarantee and Indemnity constitutes legal, valid, binding and enforceable obligations of
the Guarantor; and
	 
	 	2.6	 	all consents, licences, approvals and authorisations of, or registrations with or
declarations to, any governmental authority, bureau or agency which may be required in
connection with the entry into, performance, validity or enforceability of this Guarantee and
Indemnity have been obtained or made and remain in full force and effect and the Guarantor is
not aware of any event or circumstance which could reasonably be expected adversely to affect
the right of the Guarantor to hold and/or obtain renewal of any such consents, licences,
approvals or authorisations; and
	 
	 	2.7	 	no litigation, arbitration or administrative proceeding of or before any court, arbitral body
or agency which if adversely determined, might reasonably be expected to have a material
adverse effect on the business or financial condition of the Guarantor have (to the best of
the Guarantor’s knowledge and belief) been started or threatened against the Guarantor; and
	 
	 	2.8	 	the entry into and performance of this Guarantee and Indemnity will not conflict with the
constitutional documents of the Guarantor or any law or regulation or document applicable to,
or binding on, the Guarantor or any of its assets; and
	 
	 	2.9	 	the Guarantor is not required to make any deduction or withholding from any payment which it
may be obliged to make to any Finance Party under or pursuant to this Guarantee and Indemnity;
and
	 
	 	2.10	 	it is not necessary to ensure the legality, validity, enforceability or admissibility in
evidence of this Guarantee and Indemnity that it be filed, recorded or enrolled with any court
or other authority in any country or that any stamp, registration or similar tax be paid on or
in relation to this Guarantee and Indemnity; and
	 
	 	2.11	 	the Guarantor is not in breach of, or default under, any agreement of any sort binding on
it or on all or any part of its assets; and




 









 












	 	2.12	 	the Guarantor is not aware of any material facts or circumstances which have
not been disclosed to the Security Agent and which might, if disclosed, have adversely
affected the decision of a person considering whether or not to make loan facilities of
the nature contemplated by the Loan Agreement available to the Borrowers; and
	 
	 	2.13	 	the Guarantor has received a copy of the Loan Agreement and approves of, and
agrees to, the terms and conditions of the Loan Agreement.






	3	 	Guarantee and Indemnity






	 	 	The Guarantor:






	 	3.1	 	irrevocably and unconditionally guarantees the due and punctual payment of
each and every part of the Indebtedness in accordance with the terms of the Finance
Documents so that, if any of the Indebtedness is not paid when it is due and payable,
whether on maturity or otherwise, the Guarantor will, immediately on demand, make such
payment to the Security Agent in the manner specified by the Security Agent, together
with interest on the amount demanded at the
rate accruing on the same under the Loan Agreement from the date of demand until
the date of payment, both before and after judgment; and
	 
	 	3.2	 	agrees, as a separate and independent obligation, that, if any of the
Indebtedness is not recoverable from the Guarantor under Clause 3.1 for any reason,
the Guarantor will be liable as a principal debtor by way of indemnity for the same
amount as that for which the Guarantor would have been liable had that Indebtedness
been recoverable, and agrees to discharge its liability under this Clause 3.2 by
making payment to the Security Agent immediately on demand together with interest on
the amount demanded at the rate accruing on the same under the Loan Agreement from the
date of demand until the date of payment, both before and after judgment.






	4	 	Preservation of Guarantor’s Liability






	 	4.1	 	This Guarantee and Indemnity is a continuing security for the full amount of
the Indebtedness from time to time until the expiry of the Facility Period.




 









 






	 	4.2	 	Any Finance Party may without the Guarantor’s consent and without notice to the Guarantor and
without in any way releasing or reducing the Guarantor’s Liabilities:






	 	4.2.1	 	amend, vary, novate, or replace any of the Finance Documents (other than
this Guarantee and Indemnity); and/or
	 
	 	4.2.2	 	agree with the Borrowers to increase or reduce the amount of the Loan, or
vary the terms and conditions for its repayment or prepayment (including, without
limitation, the rate and/or method of calculation of interest payable on the Loan);
and/or
	 
	 	4.2.3	 	allow any time or other indulgence to any of the other Security Parties
under or in connection with any of the Finance Documents; and/or
	 
	 	4.2.4	 	renew, vary, release or refrain from enforcing any of the Finance Documents
(other than this Guarantee and Indemnity); and/or
	 
	 	4.2.5	 	compound with any of the other Security Parties; and/or
	 
	 	4.2.6	 	enter into, renew, vary or terminate any other agreement or arrangement with
any of the other Security Parties; and/or
	 
	 	4.2.7	 	do or omit or neglect to do anything which might, but for this provision,
operate to release or reduce the liability of the Guarantor under this Guarantee and
Indemnity.






	 	4.3	 	The Guarantor’s Liabilities shall not be affected by:






	 	4.3.1	 	the absence of, or any defective, excessive or irregular exercise of, any of
the powers of any of the other Security Parties; nor
	 
	 	4.3.2	 	any security given or payment made to any Finance Party by any of the other
Security Parties being avoided or reduced under any law (whether English or foreign)
relating to bankruptcy or insolvency or analogous circumstance in force from time to
time; nor
	 
	 	4.3.3	 	any change in the constitution of the Guarantor or of any of the other
Security Parties or of any Finance Party or the absorption of or





 









 





	 	 	 	amalgamation by any
Finance Party in or with any other entity or the acquisition of all or any part of the
assets or undertaking of any Finance Party by any other entity; nor
	 
	 	4.3.4	 	the liquidation, administration, receivership, bankruptcy or
insolvency of the Guarantor or any of the other Security Parties; nor
	 
	 	4.3.5	 	any of the Finance Documents (other than this Guarantee and
Indemnity) being defective, void or unenforceable, or the failure of any other
person to provide any Finance Party with any security, guarantee or indemnity
envisaged by the Loan Agreement; nor
	 
	 	4.3.6	 	any composition, assignment or arrangement being made by any
of the other Security Parties with any of its creditors; nor
	 
	 	4.3.7	 	anything which would, but for this provision, have released
or reduced the liability of the Guarantor to any Finance Party.






	 	4.4	 	Any Finance Party may continue the account(s) of the Borrowers or open one or
more new accounts for the Borrowers notwithstanding any demand under this Guarantee
and Indemnity, and the Guarantor’s liability at the date of demand shall not be
released or affected by any subsequent payment into or out of any of the Borrowers’
accounts with any Finance Party.






	5	 	Preservation of Finance Parties’ Rights






	 	5.1	 	This Guarantee and Indemnity is in addition to any other security, guarantee or
indemnity now or in the future held by any of the Finance Parties in respect of the
Indebtedness, whether from the Borrowers or any of them, the Guarantor or any other
person, and shall not merge with, prejudice or be prejudiced by, any such security,
guarantee or indemnity or any contractual or legal right of any of the Finance Parties.
	 
	 	5.2	 	Any release, settlement, discharge or arrangement relating to the Guarantor’s
Liabilities shall be conditional on no payment, assurance or security received by any
Finance Party in respect of the Indebtedness being avoided or reduced under any law
(whether English or foreign) in force from time to time relating to bankruptcy,
insolvency or any (in the opinion of the Security Agent) analogous






 









 






	 	 	 	circumstance, and,
after any such avoidance or reduction, each Finance Party shall be entitled to exercise
all of its rights, powers, discretions and remedies under or pursuant to this Guarantee
and Indemnity and/or any other rights, powers, discretions or remedies which it would
otherwise have been entitled to exercise, as if no release, settlement, discharge or
arrangement had taken place.
	 
	 	5.3	 	Following the full payment of the Indebtedness, the Security Agent shall be entitled to
retain this Guarantee and Indemnity and any security which it may hold for the Guarantor’s
Liabilities until the Security Agent is satisfied in its discretion that no Finance Party will
have to make any payment under any law referred to in Clause 5.2.
	 
	 	5.4	 	Until the expiry of the Facility Period the Guarantor shall not:






	 	5.4.1	 	be entitled to participate in any sums received by any Finance Party in
respect of any of the Indebtedness; nor
	 
	 	5.4.2	 	be entitled to participate in any security held by any Finance Party in
respect of any of the Indebtedness nor stand in the place of, or be subrogated for,
any Finance Party in respect of any such security; nor
	 
	 	5.4.3	 	take any step to enforce any claim against any of the other Security Parties
(or their respective estates or effects), nor claim or exercise any right of set off
or counterclaim against any of the other Security Parties, nor make any claim in the
bankruptcy or liquidation of any of the other Security Parties, in respect of any sums
paid by the Guarantor to any Finance Party or in respect of any sum which includes the
proceeds of realisation of any security at any time held by any Finance Party in
respect of any of the Guarantor’s Liabilities; nor
	 
	 	5.4.4	 	take any steps to enforce any other claim which it may have against any of
the other Security Parties without the prior written consent of the Security Agent,
and then only on such terms and subject to such conditions as the Security Agent may
impose.






	 	5.5	 	Any Finance Party may, but shall not be obliged to, resort for its own benefit to
any other means of payment at any time and in any order it thinks fit without
releasing or reducing the Guarantor’s Liabilities.




 









 






	 	5.6	 	Any Finance Party may enforce this Guarantee and Indemnity either before or
after resorting to any other means of payment without entitling the Guarantor to any
benefit from or share in any such other means of payment until the expiry of the
Facility Period.
	 
	 	5.7	 	The Guarantor agrees that it is, and will throughout the Facility Period
remain, a principal debtor in respect of the Guarantor’s Liabilities.
	 
	 	5.8	 	No failure to exercise, nor any delay in exercising, on the part of any
Finance Party, any right or remedy under this Guarantee and Indemnity shall operate as
a waiver, nor shall any single or partial exercise of any right or remedy prevent any
further or other exercise or the exercise of any other right or remedy. The rights and
remedies provided in this Guarantee and Indemnity are cumulative and not exclusive of
any rights or remedies provided by law.






	6	 	Undertakings






	 	6.1	 	The Guarantor shall pay to the Security Agent on demand on a full indemnity
basis all costs and expenses incurred by any Finance Party in or about or incidental to
the exercise by it of its rights under this Guarantee and Indemnity, together with
interest at the Default Rate on the amount demanded from the date of demand until the
date of payment, both before and after judgment, which interest shall be compounded
with the amount demanded at the end of such periods as the Security Agent may
reasonably select.
	 
	 	6.2	 	The Guarantor has not taken, and will not take without the prior written
consent of the Security Agent (and then only on such terms and subject to such
conditions as the Security Agent may impose), any security from any of the other
Security Parties in connection with this Guarantee and Indemnity, and any security
taken by the Guarantor notwithstanding this Clause shall be held by the Guarantor in
trust for the Finance Parties absolutely as a continuing security for the Guarantor’s
Liabilities.
	 
	 	6.3	 	The Guarantor will observe and perform any and all covenants and undertakings
in the Loan Agreement whose observance and performance by the Guarantor the Borrowers
have undertaken to procure.




 









 






	 	6.4	 	The Guarantor covenants with and undertakes to the Security Agent that all its claims against
the Borrowers and the Collateral Owners are fully subordinated to the Indebtedness and any
sums owned to the Guarantor are full subordinated to the Indebtedness.
	 
	 	6.5	 	The Guarantor will not without the Security Agent’s prior written consent:






	 	6.5.1	 	enter into any amalgamation, demerger, merger or corporate reconstruction
other than the corporate reconstruction allowing only Primelead to cease being a
Subsidiary of the Guarantor; nor
	 
	 	6.5.2	 	make any substantial change to the general nature of its business from that
carried on at the date of this Guarantee and Indemnity; nor
	 
	 	6.5.3	 	engage in any business other than that advised to the Security Agent at the
date of this Guarantee and Indemnity.






	 	6.6	 	The Guarantor covenants that, throughout the Facility Period (with such
covenants being assessed on a group basis to include all subsidiaries of the
Guarantor (if any) whose results are consolidated into the results of the
Guarantor), the Group’s financial condition, as evidenced by the most recent
Financial Statements, shall be such that, on a combined basis:






	 	(a)	 	the Group maintains a Market Adjusted Equity Ratio not lower
than 0.3:1 for each financial year during the Facility Period; and
	 
	 	(b)	 	the Group maintains an Interest Coverage Ratio of not lower
than 3:1; and
	 
	 	(c)	 	the Group maintains a Market Value Adjusted Net Worth, which
is not lower than five hundred million Dollars ($500,000,000).






	 	 	 	The financial covenants contained in this Clause 6.6 shall be tested semi-annually on the
basis of the annual or semi-annual Financial Statements provided under Clause 6.7.
	 
	 	6.7	 	The Guarantor shall supply to the Security Agent as soon as the same become
available, but in any event within 180 days after every 31 December of each of its
financial years, its combined annual audited Financial Statements for that




 









 






	 	 	 	financial year and within 120 days after every 31 December and 30 June of each of its
respective financial half-years its semi-annual unaudited Financial Statements and
management accounts for that financial half-year (together with updated details of all
off-balance sheet, time-charter hire commitments and annual cash flow information upon the
Agent’s first request in writing).
	 
	 	6.8	 	Each set of Financial Statements by the Guarantor under Clause 6.8:






	 	6.8.1	 	shall be certified by a director or officer or other authorised signatory of
the Guarantor as fairly representing its financial condition as at the date at which
those Financial Statements were drawn up; and
	 
	 	6.8.2	 	shall be prepared using GAAP, accounting practices and financial reference
periods consistent with those applied in the preparation of the Original Financial
Statements unless, in relation to any set of Financial Statements, the Guarantor
notifies the Security Agent that there has been a change in GAAP, the accounting
practices or reference periods and the Guarantor’s auditors deliver to the Security
Agent:






	 	(a)	 	a description of any change necessary for those Financial
Statements to reflect the GAAP, accounting practices and reference periods
upon which the Original Financial Statements were prepared; and
	 
	 	(b)	 	sufficient information, in form and substance as may be
reasonably required by the Security Agent, to enable the Security Agent to
make an accurate comparison between the financial position indicated in those
Financial Statements and that indicated in the Original Financial Statements.






	 	6.9	 	The Guarantor shall supply to the Security Agent:






	 	6.9.1	 	all documents dispatched by the Guarantor to its shareholders (or any class
of them) or its creditors generally at the same time as they are dispatched; and
	 
	 	6.9.2	 	promptly upon becoming aware of them, details of any litigation, arbitration
or administrative proceedings which are current, threatened or




 









 






	 	 	 	pending against any of
the Security Parties and which might, if adversely determined, have a material adverse
effect on the business or financial condition of any of the Security Parties; and
	 
	 	6.9.3	 	promptly, such further information regarding the financial
condition, business and operations of any of the Security Parties.






	 	6.10	 	The Guarantor will permit the inspection of its financial records and
accounts from time to time by the Security Agent or its nominee.






	7	 	Payments






	 	7.1	 	All amounts payable by the Guarantor under or pursuant to this Guarantee and
Indemnity shall be paid to such accounts at such banks as the Security Agent may from
time to time direct to the Guarantor in the relevant currency in same day funds for
immediate value. Payment shall be deemed to have been received on the date on which the
Security Agent receives authenticated advice of receipt, unless that advice is received
by the Security Agent on a day other than a Business Day or at a time of day (whether on
a Business Day or not) when the Security Agent in its discretion considers that it is
impossible or impracticable to utilise the amount received for value that same day, in
which event the payment in question shall be deemed to have been received on the
Business Day next following the date of receipt of advice by the Security Agent.
	 
	 	7.2	 	All payments to be made by the Guarantor pursuant to this Guarantee and Indemnity
shall, subject only to Clause 7.3, be made free and clear of and without deduction for
or on account of any taxes or other deductions, withholdings, restrictions, conditions
or counterclaims of any nature, and the
Guarantor will not claim any equity in respect of any payment due from it to any
Finance Party under or in relation to this Guarantee and Indemnity.
	 
	 	7.3	 	If at any time any law requires (or is interpreted to require) the Guarantor to
make any deduction or withholding from any payment, or to change the rate or manner in
which any required deduction or withholding is made, the Guarantor will promptly notify
the Security Agent and, simultaneously with making that payment, will pay whatever
additional amount (after taking into account any additional taxes on, or deductions or
withholdings from, or restrictions or




 









 






	 	 	 	conditions on, that additional amount) is
necessary to ensure that, after making the deduction or withholding, each relevant
Finance Party receives a net sum equal to the sum which it would have received had no
deduction or withholding been made.
	 
	 	7.4	 	If at any time the Guarantor is required by law to make any deduction or withholding from any
payment to be made by it pursuant to this Guarantee and Indemnity, the Guarantor will pay the
amount required to be deducted or withheld to the relevant authority within the time allowed
under the applicable law and will, no later than thirty days after making that payment,
deliver to the Security Agent an original receipt issued by the relevant authority, or other
evidence acceptable to the Security Agent, evidencing the payment to that authority of all
amounts required to be deducted or withheld.
	 
	 	7.5	 	If the Guarantor pays any additional amount under Clause 7.3, and a Finance Party
subsequently receives a refund or allowance from any tax authority which that Finance Party
identifies as being referable to that increased amount so paid by the Guarantor, that Finance
Party shall, as soon as reasonably practicable, pay to the Guarantor an amount equal to the
amount of the refund or allowance received, if and to the extent that it may do so without
prejudicing its right to retain that refund or allowance and without putting itself in any
worse financial position than that in which it would have been had the relevant deduction or
withholding not been required to have been made. Nothing in this Clause 7.5 shall be
interpreted as imposing any obligation on any Finance Party to apply for any refund or
allowance nor as restricting in any way the manner in which any Finance Party organises its
tax affairs, nor as imposing on any Finance Party any obligation to disclose to the Guarantor
any information regarding its tax affairs or tax computations.
	 
	 	7.6	 	Any certificate or statement signed by an authorised signatory of the Security Agent
purporting to show the amount of the Indebtedness or of the Guarantor’s Liabilities (or any
part of any of them) or any other amount referred to in any of the Finance Documents shall,
save for manifest error or on any question of law, be conclusive evidence as against the
Guarantor of that amount.




 









 












	8	 	Currency






	 	8.1	 	The Guarantor’s liability under this Guarantee and Indemnity is to discharge
the Indebtedness in the currency in which it is expressed to be payable (the “Agreed
Currency”).
	 
	 	8.2	 	If at any time any Finance Party receives (including by way of set off) any
payment by or on behalf of the Guarantor in a currency other than the Agreed Currency,
that payment shall take effect as a payment to that Finance Party of the amount in the
Agreed Currency which that Finance Party is able to purchase (after deduction of any
relevant costs) with the amount of the payment so received in accordance with its
usual practice.
	 
	 	8.3	 	To the extent that any payment to any Finance Party (whether by the Guarantor
or any other person and whether under any judgment or court order or otherwise) in a
currency other than the Agreed Currency shall on actual conversion into the Agreed
Currency fall short of the relevant amount of the Indebtedness expressed in the Agreed
Currency, then the Guarantor as a separate and independent obligation will indemnify
that Finance Party against the shortfall.






	9	 	Set-Off






	 	9.1	 	The Guarantor irrevocably authorises each Finance Party at any time to set off
without notice any sums then due and payable by the Guarantor to that Finance Party
under this Guarantee and Indemnity (irrespective of the branch or office, currency or
place of payment) against any credit balance from time to time standing on any account
of the Guarantor (whether current or otherwise, whether or not subject to notice and
whether or not that credit balance is then due to
the Guarantor) with any branch of that Finance Party in or towards satisfaction of
the Guarantor’s Liabilities and, in the name of that Finance Party or the Guarantor,
to do all acts (including, without limitation, purchasing or converting or
exchanging any currency) which may be required to effect such set-off.
	 
	 	9.2	 	Despite any term to the contrary in relation to any deposit or credit balance
at any time on any account of the Guarantor with any Finance Party, no such deposit or
credit balance shall be repayable or capable of being assigned, mortgaged, charged or
otherwise disposed of or dealt with by the Guarantor until the




 









 






	 	 	 	Guarantor’s Liabilities have been discharged in full, but each Finance Party may
from time to time permit the withdrawal of all or any part of any such deposit or
balance without affecting the continued application of this Clause.






	10	 	Application of Moneys






	 	10.1	 	All sums which any Finance Party (other than the Security Agent) receives
(including by way of set off) under or in connection with this Guarantee and
Indemnity, otherwise than by payment from the Security Agent, shall be paid to the
Security Agent immediately on receipt, and that payment to the Security Agent shall be
deemed to have been made by the Guarantor rather than by the receiving Finance Party.
	 
	 	10.2	 	All sums which the Security Agent receives under or in connection with this
Guarantee and Indemnity shall, unless otherwise agreed by the Security Agent or
otherwise provided in the Loan Agreement, be applied by the Security Agent in or
towards satisfaction, or by way of retention on account, of the Guarantor’s
Liabilities, in such manner as the Security Agent may in its discretion determine.
	 
	 	10.3	 	The Security Agent may place any money received by it under or in connection
with this Guarantee and Indemnity to the credit of a suspense account on such terms
and subject to such conditions as the Security Agent may in its discretion determine
for so long as the Security Agent thinks fit without any obligation in the meantime to
apply that money in or towards discharge of the Indebtedness, and, despite such
payment, the Security Agent may claim against any of the other Security Parties or
prove in the bankruptcy, liquidation or insolvency of any of the other Security
Parties for the whole of the Indebtedness at the date of the Security Agent’s demand
for payment pursuant to this Guarantee and Indemnity, together with all interest,
commission, charges and expenses accruing subsequently.






	11	 	Partial Invalidity






	 	 	If, at any time, any provision of this Guarantee and Indemnity is or becomes illegal,
invalid or unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the legality, validity
or




 









 












	 	 	enforceability of such provision under the law of any other jurisdiction will in any way be
affected or impaired.






	12	 	Further Assurance






	 	 	The Guarantor agrees that from time to time on the written request of the Security Agent it
will immediately execute and deliver to the Security Agent all further documents which the
Security Agent may require for the purpose of perfecting or protecting the security
intended to be created by this Guarantee and Indemnity.






	13	 	Miscellaneous






	 	13.1	 	All the covenants and agreements of the Guarantor in this Guarantee and
Indemnity shall bind the Guarantor and its successors and permitted assignees and
shall inure to the benefit of the Finance Parties and their respective successors,
transferees and assignees.
	 
	 	13.2	 	The representations and warranties on the part of the Guarantor contained in
this Guarantee and Indemnity shall survive the execution of this Guarantee and
Indemnity.
	 
	 	13.3	 	No variation or amendment of this Guarantee and Indemnity shall be valid
unless in writing and signed on behalf of the Guarantor and the Security Agent.
	 
	 	13.4	 	Other than the Finance Parties, a person who is not a party to this Guarantee
and Indemnity has no right under the Contracts (Rights of Third Parties) Act 1999 to
enforce or to enjoy the benefit of any term of this Guarantee and Indemnity.






	14	 	Notices






	 	 	The provisions of clause 18 of the Loan Agreement shall apply (mutatis mutandis) to this
Guarantee and Indemnity as if it were set out in full with references to this Guarantee and
Indemnity substituted for references to the Loan Agreement and with references to the
Guarantor substituted for references to the Borrowers.






 











 






	15	 	Counterparts
	 
	 	 	This Guarantee and Indemnity may be executed in any number of counterparts, and this has the
same effect as if the signatures on the counterparts were on a single copy of this Guarantee
and Indemnity.
	 
	16	 	Law and Jurisdiction






	 	16.1	 	This Guarantee and Indemnity shall in all respects be governed by and
interpreted in accordance with English law.
	 
	 	16.2	 	For the exclusive benefit of the Security Agent, the Guarantor irrevocably
agrees that the courts of England are to have jurisdiction to settle any disputes which
may arise out of or in connection with this Guarantee and Indemnity and that any
proceedings may be brought in those courts.
	 
	 	16.3	 	Nothing contained in this Clause shall limit the right of the Security Agent to
commence any proceedings against the Guarantor in any other court of competent
jurisdiction nor shall the commencement of any proceedings against the Guarantor in one
or more jurisdictions preclude the commencement of any proceedings in any other
jurisdiction, whether concurrently or not.
	 
	 	16.4	 	The Guarantor irrevocably waives any objection which it may now or in the
future have to the laying of the venue of any proceedings in any court referred to in
this Clause and any claim that those proceedings have been brought in an inconvenient
or inappropriate forum, and irrevocably agrees that a judgment in any proceedings
commenced in any such court shall be conclusive and binding on it and may be enforced
in the courts of any other jurisdiction.
	 
	 	16.5	 	Without prejudice to any other mode of service allowed under any relevant law,
the Guarantor:






	 	16.5.1	 	irrevocably appoints Ince Process Agents, of International House, 1 St.
Katharine’s Way, London ElW 1AY, United Kingdom, c/o Mr M. Volikas as its
agent for service of process in relation to any proceedings before the English
courts; and
	 
	 	16.5.2	 	agrees that failure by a process agent to notify the Guarantor of the process
will not invalidate the proceedings concerned.




 









 











IN WITNESS of which this Guarantee and Indemnity has been duly executed and delivered as a deed the
day and year first before written.




	 	 	 	 	 	 	 

	SIGNED and DELIVERED

	 	 	)	 	 	
	as a DEED

	 	 	)	 	 	 
	by DRYSHIPS INC.

	 	 	)	 	 	 
	acting by

	 	 	)	 	 	 
	Eugenia
Papapontikou

	 	 	)	 	 	/s/ Eugenia Papapontikou
	its duly authorised attorney-in-fact

	 	 	)	 	 	 
	in the presence of:

	 	 	)	 	 	 
	/s/ Constantinos Karachalios
     Stephenson Herwood