EX-4.2



 Exhibit 4.2 

Printed by BIMCO’s idea 
  

													
	



		



		
SHIPMAN 2009
 STANDARD SHIP MANAGEMENT
AGREEMENT
  
 PART I

	



		1.		Place and date of Agreement		2.		 Date of commencement of Agreement (Cls. 2, 12, 21 and 25)
  

		 Copenhagen, May 13th, 2014

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

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

				(i)		 Name: KNOT Shuttle Tankers 21 AS
  
				(i)		Name: KNOT Management Denmark A/S
				(ii)		 Place of registered office: c/o Knutsen NYK Offshore Tankers
  
				(ii)		Place of registered office:
				(iii)		 Law of registry: Norway
  
				(iii)		Law of registry: Denmark
		5.		 The Company (with reference to the ISM/ISPS Codes) (state name and IMO Unique Company Identification
number. If the Company is a third party then also state registered office and principal place of business) (Cls. 1 and 9(c)(i))

 
		6.		 Technical Management (state “yes” or
“no” as agreed) (Cl. 4)
 No

				(i)		 Name:
  
		7.		 Crew Management (state “yes” or
“no” as agreed) (Cl. 5(a))
 No

				(ii)		 IMO Unique Company Identification number:
  
						 
				(iii)		 Place of registered office:
  
		8.		 Commercial Management (state “yes” or
“no” as agreed) (Cl. 6)
 Yes

				(iv)		 Principal place of business:
  
						 
		9.		 Chartering Services period (only to be filled in if “yes” stated in
Box 8) (Cl.6(a))
 Yes

 
		10.		Crew Insurance arrangements (state “yes” or “no” as agreed)
										(i)		 Crew Insurances* (Cl. 5(b)): No

 

										(ii)		 Insurance for persons proceeding to sea onboard
(Cl. 5(b)(i)): No
  

										 *only to apply if Crew Management (Cl.
5(a)) agreed (see Box 7)
  

		11.		 Insurance arrangements (state “yes” or “no” as agreed)
(Cl. 7)
 No
		12.		 Optional Insurances (state optional insurance(s)
as agreed, such as
 piracy, kidnap and ransom, loss of hire and FD & D) (CI. 10(a)(iv))

 

		13.		Interest (state rate of interest to apply after due date to outstanding sums) (Cl. 9(a))		14.		 Annual management fee (state annual amount) (Cl. 12(a))
 USD 289,721 (to be increased by 4 per cent annually, first increase on 1 January 2015)

 

		15.		Manager’s nominated account (C1.12(a))		16.		 Daily rate (state rate for days in excess of
those agreed in budget) (Cl. 12(c))
  

						17.		 Lay-up period / number of months (CI.12(d))
  

		18.		Minimum contract period (state number of months) (Cl. 21(a))		19.		 Management fee on termination (state number of
months to apply) (Cl. 22(g))
  

		20.		Severance Costs (state maximum amount) (Cl. 22(h)(ii))		21.		 Dispute Resolution (state alternative Cl. 23(a), 23(b) or 23(c); if Cl. 23(c) place of arbitration must be stated)
(Cl. 23)
 Danish law, Danish arbitration

 

		22.		Notices (state full style contact details for serving notice and communication to the Owners) (Cl. 24)		23.		 Notices (state
full style contact details for serving notice and communication to the Managers) (Cl. 24)
  

		  
 It is mutually agreed between the party stated in
Box 3 and the party stated in Box 4 that this Agreement consisting of PART I and PART II as well as Annexes “A” (Details of Vessel or Vessels), “B” (Details
of Crew), “C” (Budget), “D” (Associated Vessels) and “E” (Fee Schedule) 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”, “D” and “E” shall prevail over those of PART II to the extent of such conflict but no further.

 

		 Signature(s) (Owners)
  
		Signature(s) (Managers)
		 /s/ Karl Gerhard Bråstein Dahl

 
		/s/ Karl Gerhard Bråstein Dahl
		
			  
 Continued

This document is a computer generated SHIPMAN 2009 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible. In
the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of
discrepancies between the original BIMCO approved document and this computer generated document.










 Printed by BIMCO’s idea 

 



 



 
  
 



 



 ANNEX “A” (DETAILS OF VESSEL OR VESSELS) 

TO THE BIMCO STANDARD SHIP MANAGEMENT AGREEMENT 
 CODE NAME: SHIPMAN 2009 

 
 Date of Agreement: 

Name of Vessel(s): Costco Nantong Shipyard Hull No 266 (to be named Dan Sabia) 
  

			
	Particulars of Vessel(s):    
	Type		: Double Hull Shuttle Tanker
	Year of built		: 2012
	Flag		: DIS
	Class		: DNV
	DWT		: 59.000
	Cargo gear		: 3x1500 m3/h vertical single stage centrifugal pump elec. driven
	Main engine type		: 2-stoke low speed diesel, MAN B&W 6850MC-7

 
 


  
 Continued 

This document is a computer generated SHIPMAN 2009 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible.
In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of
discrepancies between the original BIMCO approved document and this computer generated document. 









 Printed by BIMCO’s idea 

 



 



 
  
 



 



 ANNEX “B” (DETAILS OF CREW) 

TO THE BIMCO STANDARD SHIP MANAGEMENT AGREEMENT 
 CODE NAME: SHIPMAN 2009 

 
 Date of Agreement: 

Details of Crew: 
  

					
	Number		Rank		Nationality
	OFFICERS				
			
	1		Master (0IM)		EU
	1		Chief Officer (SDPO)		EU
	1		2nd Officer (SDPO)		EU
	1		2nd Officer (DPO)		EU
	1		2nd Officer (DPO)		EU
	0,5		2nd Officer (DPO)*		EU
	I		Chief Engineer		EU
	1		2nd Engineer		EU
	1		3rd Engineer		EU
	1		4th Engineer		PHIL
	1		Electrician (DP)		EU
		
	Total officers onboard 10,5		
		
	* Supernumerary dual officer position		
		
	RATINGS		
			
	1		Bosun		PHIL
	1		Pumpman		PHIL
	1		AB		PHIL
	1		AB		PHIL
	1		OS		PHIL
	1		Motorman		PHIL
	1		Wiper		PHIL
	1		Fitter		PHIL
	1		Cook		PHIL
	1		MESSMAN		PHIL
		
	Total ratings onboard 10		
		
	TOTAL CREW 20,5 PERSONS ONBOARD		
			
	Numbers		Rank		Nationality

 
 


  
 Continued 

This document is a computer generated SHIPMAN 2009 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible.
In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of
discrepancies between the original BIMCO approved document and this computer generated document. 









 Printed by BIMCO’s idea 

 



 



 
  
 



 



 ANNEX “C” (BUDGET) 
 TO THE
BIMCO STANDARD SHIP MANAGEMENT AGREEMENT 
 CODE NAME: SHIPMAN 2009 

 
 Date of Agreement: 

Managers’ initial budget with effect from the commencement date of this Agreement (see Box 2): 
 TBA 

 


  
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In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of
discrepancies between the original BIMCO approved document and this computer generated document. 









 Printed by BIMCO’s idea 

 



 



 
  
 



 



 ANNEX “D” (ASSOCIATED VESSELS) 

TO THE BIMCO STANDARD SHIP MANAGEMENT AGREEMENT 
 CODE NAME: SHIPMAN 2009 

 
 NOTE: PARTIES SHOULD BE AWARE THAT BY COMPLETING THIS ANNEX
“D” THEY WILL BE SUBJECT TO THE PROVISIONS OF SUB-CLAUSE 22(b)(i) OF THIS AGREEMENT. 

Date of Agreement: 
 Details of Associated Vessels:


 


  
 Continued 

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In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of
discrepancies between the original BIMCO approved document and this computer generated document. 









 Printed by BIMCO’s idea 

 



 



 
  
 



 



 ANNEX “E” (FEE SCHEDULE) 
 TO
THE BIMCO STANDARD SHIP MANAGEMENT AGREEMENT 
 CODE NAME: SHIPMAN 2009 

 

 


  
 Continued 

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In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of
discrepancies between the original BIMCO approved document and this computer generated document. 








 PART II 

SHIPMAN 2009 
 Standard ship management
agreement 
  

	
	  
 SECTION 1 – Basis of the Agreement

 


  

					
	1. Definitions		 	1	  
		
	 In this Agreement save where the context otherwise requires, the following words and expressions shall have
		 	2	  
	 the meanings hereby assigned to them:
		 	3	  
		
	 “Company” (with reference to the ISM Code and the ISPS Code) means the organization identified in Box 5
		 	4	  
	 or any replacement organization appointed by the Owners from time to time (see Sub-clauses 9(b)(i) or
9(c)
		 	5	  
	 (ii), whichever is applicable).
		 	6	  
		
	 “Crew” means the personnel of the numbers, rank and nationality specified in Annex “B” hereto.
		 	7	  
		
	 “Crew Insurances” means insurance of liabilities in respect of crew risks which shall include but not be limited
		 	8	  
	 to death, permanent disability, sickness, injury, repatriation, shipwreck unemployment indemnity and loss
		 	9	  
	 of personal effects (see Sub-clause 5(b) (Crew Insurances) and Clause 7 (Insurance
Arrangements) and
		 	10	  
	 Clause 10 (Insurance Policies) and Boxes 10 and
11).
		 	11	  
		
	 “Crew Support Costs” means all expenses of a general nature which are not particularly referable to any
		 	12	  
	 individual vessel for the time being managed by the Managers and which are incurred by the Managers for the
		 	13	  
	 purpose of providing an efficient and economic management service and, without prejudice to the generality
		 	14	  
	 of the foregoing, shall include the cost of crew standby pay, training schemes for officers and ratings, cadet
		 	15	  
	 training schemes, sick pay, study pay, recruitment and interviews.
		 	16	  
		
	 “Flag State” means the State whose flag the Vessel is flying.
		 	17	  
		
	 “ISM Code” means the International Management Code for the Safe Operation of Ships and for Pollution
		 	18	  
	 Prevention and any amendment thereto or substitution therefor.
		 	19	  
		
	 “ISPS Code” means the International Code for the Security of Ships and Port Facilities and the relevant
		 	20	  
	 amendments to Chapter XI of SOLAS and any amendment thereto or substitution therefor.
		 	21	  
		
	 “Managers” means the party identified in Box 4.
		 	22	  
		
	 “Management Services” means the services specified in SECTION 2 - Services (Clauses 4 through
7) as
		 	23	  
	 indicated affirmatively in Boxes 6 through 8, 10 and 11, and all other functions performed by the Managers
		 	24	  
	 under the terms of this Agreement.
		 	25	  
		
	 “Owners” means the party identified in Box 3.
		 	26	  
		
	 “Severance Costs” means the costs which are legally required to be paid to the Crew as a result of the early
		 	27	  
	 termination of any contracts for service on the Vessel.
		 	28	  
		
	 “SMS” means the Safety Management System (as defined by the ISM Code).
		 	29	  
		
	 “STCW 95” means the International Convention on Standards of Training, Certification and Watchkeeping
		 	30	  
	 for Seafarers, 1978, as amended in 1995 and any amendment thereto or substitution therefor.
		 	31	  
		
	 “Vessel’ means the vessel or vessels details of which are set out in Annex “A” attached hereto.
		 	32	  
		
	2. Commencement and Appointment		 	33	  
		
	 With effect from the date stated in Box 2 for the commencement of the Management Services and continuing
		 	34	  
	 unless and until terminated as provided herein, the Owners hereby appoint the Managers and the Managers
		 	35	  
	 hereby agree to act as the Managers of the Vessel in respect of the Management Services.
		 	36	  
		
	3. Authority of the Managers		 	37	  
		
	 Subject to the terms and conditions herein provided, during the period of this Agreement the Managers shall
		 	38	  
	 carry out the Management Services in respect of the Vessel as agents for and on behalf of the Owners. The
		 	39	  
	 Managers shall have authority to take such actions as they may from time to time in their absolute discretion
		 	40	  
	 consider to be necessary to enable them to perform the Management Services in accordance with sound
		 	41	  
	 ship management practice, including but not limited to compliance with all relevant rules and regulations.
		 	42	  


  
 1 









 PART II 

SHIPMAN 2009 
 Standard ship management
agreement 
  


	
	  
 SECTION 2 – Services

 


  

					
	4. Technical Management		 	43	  
		
	 (only applicable if agreed according to Box 6).
		 	44	  
	 The Managers shall provide technical management which includes, but is not limited to, the following
		 	45	  
	 services:
		 	46	  
		
	 (a) ensuring that the Vessel complies with the requirements of the law of the Flag State;
		 	47	  
		
	 (b) ensuring compliance with the ISM Code;
		 	48	  
		
	 (c) ensuring compliance with the ISPS Code;
		 	49	  
		
	 (d) providing competent personnel to supervise the maintenance and general efficiency of the vessel;
		 	50	  
		
	 (e) arranging and supervising dry dockings, repairs, alterations and the maintenance of the Vessel to the
		 	51	  
	 standards agreed with the Owners provide that the Managers shall be entitled to incur the necessary
		 	52	  
	 expenditure to ensure that the Vessel will comply with all requirements and recommendations of the
		 	53	  
	 classification society, and with the law of the Flag State and of the places where the Vessel is required to
		 	54	  
	 trade;
		 	55	  
		
	 (f) arranging the supply of necessary stores, spares and lubricating oil;
		 	56	  
		
	 (g) appointing surveyers and technical consultants as the Managers may consider form time to time to be
		 	57	  
	 necessary;
		 	58	  
		
	 (h) in accordance with the Owners’ instructions, supervising the sale and physical delivery of the Vessel
		 	59	  
	 under the sale agreement. However services under this Sub-clause 4(h) shall not include negotiation of the
		 	60	  
	 sale agreement or transfer of ownership of the Vessel;
		 	61	  
		
	 (i) arranging for the supply of provisions unless provided by the Owners; and
		 	62	  
		
	 (j) arranging for the sampling and testing of bunkers.
		 	63	  
		
	5. Crew Management and Crew Insurances		 	64	  
		
	 (a) Crew Management
		 	65	  
	 (only applicable if agreed according to Box 7)
		 	66	  
	 The Managers shall provide suitably qualified Crew who shall comply with the requirements of STCW 95.
		 	67	  
	 The provision of such crew management services includes, but is not limited to, the following services:
		 	68	  
		
	 (i)      selecting, engaging and
providing for the administration of the Crew, including, as applicable, payroll
		 	69	  
	 arrangements, pension arrangements, tax, social security contributions and other mandatory dues related
		 	70	  
	 to their employment payable in each Crew member’s country of domicile;
		 	71	  
		
	 (ii)     ensuring that the applicable
requirements of the law of the Flag State in respect of rank, qualification
		 	72	  
	 and certification of the Crew and employment regulations, such as Crew’s tax and social insurances, are
		 	73	  
	 satisfied;
		 	74	  
		
	 (iii)    ensuring that all Crew have passed a
medical examination with a qualified doctor certifying that they are
		 	75	  
	 fit for the duties for which they are engaged and are in possession of valid medical certificates issued in
		 	76	  
	 accordance with appropriate Flag State requirements or such higher standard of medical examination
		 	77	  
	 as may be agreed with the Owners. In the absence of applicable Flag State requirements the medical
		 	78	  
	 certificate shall be valid at the time when the respective Crew member arrives on board the Vessel and
		 	79	  
	 shall be maintained for the duration of the service on board the Vessel;
		 	80	  
		
	 (iv)    ensuring that the Crew shall have a
common working language and a command of the English language
		 	81	  
	 of a sufficient standard to enable them to perform their duties safely;
		 	82	  
		
	 (v)     arranging transportation of the
Crew, including repatriation;
		 	83	  
		
	 (vi)    training of the
Crew;
		 	84	  


  
 2 









 PART II 

SHIPMAN 2009 
 Standard ship management
agreement 
  


					
		
	 (vii)    conducting union negotiations;
and
		 	85	  
		
	 (viii)  if the Managers are the Company, ensuring that the
Crew, on joining the Vessel, are given proper
		 	86	  
	 familiarization with their duties in relation to the Vessel’s SMS and that instructions which are
essential
		 	87	  
	 to the SMS are identified, documented and given to the Crew prior to calling.
		 	88	  
		
	 (ix)    if the Managers are not the
Company:
		 	89	  
		
	 (1)    ensuring that the Crew, before joining
the Vessel, are given proper familiarisation with their duties
		 	90	  
	 in relation to the ISM Code; and
		 	91	  
		
	 (2)    instructing the Crew to obey all
reasonable orders of the Company in connection with the operation
		 	92	  
	 of the SMS.
		 	93	  
		
	 (x)     Where Managers are not providing
technical management services in accordance with Clause 4
		 	94	  
	 (Technical Management):
		 	95	  
		
	 (1)    ensuring that no person connected to the
provision and the performance of the crew management
		 	96	  
	 services shall proceed to sea on board the Vessel without the prior consent of the Owners (such consent)
		 	97	  
	 not to be unreasonably withheld); and
		 	98	  
		
	 (2)    ensuring that in the event that the
Owners’ drug and alcohol policy requires measures to be taken
		 	99	  
	 prior to the Crew joining the Vessel, implementing such measures;
		 	100	  
		
	 (b) Crew Insurances
		 	101	  
	 (only applicable if Sub-clause 5(a) applies and if agreed according to Box 10)
		 	102	  
	 The Managers shall throughout the period of this Agreement provide the following services:
		 	103	  
		
	 (i)      arranging Crew Insurances in
accordance with the best practice of prudent managers of vessels of a
		 	104	  
	 similar type to the Vessel, with sound and reputable insurance companies, underwriters or associations.
		 	105	  
	 insurance for any other persons proceeding to see onboard the Vessel may be separately agreed by
		 	106	  
	 the Owners and the Managers (see Box 10);
		 	107	  
		
	 (ii)     ensuring that the Owners are aware
of the terms, conditions, exceptions and limits of liability of the
		 	108	  
	 insurances in Sub-clause 5(b)(i);
		 	109	  
		
	 (iii)    ensuring that all premiums or calls in
respect of the insurances in Sub-clause 5(b)(i) are paid by their
		 	110	  
	 due date;
		 	111	  
		
	 (iv)    if obtainable at no additional cost,
ensuring that insurance in Sub-clause 5(b)(i) name the Owners as
		 	112	  
	 a joint assured with full cover and, unless otherwise agreed, on terms such that Owners shall be under
		 	113	  
	 no liability in respect of premiums or calls arising in connection with such insurances.
		 	114	  
		
	 (v)     providing written evidence, to the
reasonable satisfaction of the Owners, of the Managers’ compliance with
		 	115	  
	 their obligations under Sub-clauses 5(b)(ii), and 5(b)(iii) within a reasonable time of the commencement
		 	116	  
	 of this Agreement, and of each renewal date and, if specifically requested, of each payment date of the
		 	117	  
	 insurances in Sub-clause 5(b)(i).
		 	118	  
		
	6. Commercial Management		 	119	  
		
	 (only applicable if agreed according to Box 8).
		 	120	  
	 The Managers shall provide the following services for the Vessel in accordance with the Owners’ instructions,
		 	121	  
	 which shall include but not be limited to:
		 	122	  
		
	 (a) seeking and negotiating employment for the Vessel and the conclusion (including the execution thereof)
		 	123	  
	 of charter parties or other contracts relating to the employment of the Vessel. If such a contrast exceeds the
		 	124	  
	 period states in Box 9, consent thereto in writing shall first be obtained from the Owners;
		 	125	  
		
	 (b) arranging for the provision of bunker fuels of the quality specified by the Owners as required for the
		 	126	  
	 Vessel’s trade;
		 	127	  
		
	 (c) voyage estimating and accounting and calculation of hire, freights, demurrage and/or despatch monies
		 	128	  
	 due from or due to the charterers of the Vessel; assisting in the collection of any sums due to the Owners
		 	129	  
	 related to the commercial operation of the Vessel in accordance with Clause 11 (Income Collected and
		 	130	  


  
 3 









 PART II 

SHIPMAN 2009 
 Standard ship management
agreement 
  


					
	 Expenses Paid on Behalf of Owners);
		 	131	  
		
	 If any of the services under Sub-clauses 6(a), 6(b) and
6(c) are to be excluded from the Management Fee, remuneration
		 	132	  
	 for these services must be stated in Annex E (Fee Schedule). See Sub-clause 12(e).
		 	133	  
		
	 (d) issuing voyage instructions;
		 	134	  
		
	 (e) appointing agents;
		 	135	  
		
	 (f) appointing stevedores; and
		 	136	  
		
	 (g) arranging surveys associated with the commercial operation of the Vessel.
		 	137	  
		
	7. Insurance Arrangements		 	138	  
		
	 (only applicable if agreed according to Box 11).
		 	139	  
	 The Managers shall arrange insurances in accordance with Clause 10 (Insurance Policies), on such terms as
		 	140	  
	 the Owners shall have instructed or agreed, in particular regarding conditions, insured values, deductibles,
		 	141	  
	 franchises and limits of liability.
		 	142	  


  
 4 









 PART II 

SHIPMAN 2009 
 Standard ship management
agreement 
  


	
	  
 SECTION 3 – Obligations

 


  

					
	8. Managers’ Obligations		 	143	  
		
	 (a) The Managers undertake to use their best endeavours to provide the Management Services as agents
		 	144	  
	 for and on behalf of the Owners in accordance with sound ship management practice and to protect and
		 	145	  
	 promote the interests of the Owners in all matters relating to the provision of services hereunder.
		 	146	  
		
	 Provided however, that in the performance of their management responsibilities under this Agreement, the
		 	147	  
	 Managers shall be entitled to have regard to their overall responsibility in relation to all vessels as may from
		 	148	  
	 time to time be entrusted to their management and in particular, but without prejudice to the generality of
		 	149	  
	 the foregoing, the Managers shall be entitled to allocate available supplies, manpower and services in such
		 	150	  
	 manner as in the prevailing circumstances the Managers in their absolute discretion consider to be fair and
		 	151	  
	 reasonable.
		 	152	  
		
	 (b) Where the Managers are providing technical management services in accordance with Clause 4 (Technical
		 	153	  
	 Management), they shall procure that the requirements of the Flag State are satisfied and they shall agree
		 	154	  
	 to be appointed as the Company, assuming the responsibility for the operation of the Vessel and taking over
		 	155	  
	 the duties and responsibilities imposed by the ISM Code and the ISPS Code, if applicable.
		 	156	  
		
	9. Owners’ Obligations		 	157	  
		
	 (a) The Owners shall pay all sums due to the Managers punctually in accordance with the terms of this
		 	158	  
	 Agreement. In the event of payment after the due date of any outstanding sums the Manager shall be entitled
		 	159	  
	 to charge interest at the rate stated in Box 13.
		 	160	  
		
	 (b) Where the Managers are providing technical management services in accordance with Clause 4 (Technical
		 	161	  
	 Management), the Owners shall:
		 	162	  
		
	 (i)      report (or where the Owners
are not the registered owners of the Vessel procure that the registered
		 	163	  
	 owners report) to the Flag State administration the details of the Managers as the Company as required
		 	164	  
	 to comply with the ISM and ISPS Codes;
		 	165	  
		
	 (ii)     procure that any officers and
ratings supplied by them or on their behalf comply with the requirements
		 	166	  
	 of STCW 95; and
		 	167	  
		
	 (iii)    instruct such officers and ratings to
obey all reasonable orders of the Managers (in their capacity as the
		 	168	  
	 Company) in connection with the operation of the Managers’ safety management system.
		 	169	  
		
	 (c) Where the Managers are not providing technical management services in accordance with Clause 4
		 	170	  
	 (Technical Management), the Owners shall:
				
		
	 (i)      procure that the requirements of the Flag State are satisfied and notify the Managers upon execution
of
		 	172	  
	 this Agreement of the name and contact details of the organization that will be the Company by completing
		 	173	  
	 Box 5;
		 	174	  
		
	 (ii)     if the Company changes at any time during this Agreement, notify the Managers in a timely manner of
		 	175	  
	 the name and contact details of the new organization;
		 	176	  
		
	 (iii)    procure that the details of the Company, including any change thereof, are reported to the Flag State
		 	177	  
	 administration as required to comply with the ISM and ISPS Codes. The Owners shall advise the Managers
		 	178	  
	 in a timely manner when the Flag State administration has approved the Company; and
		 	179	  
		
	 (iv)    unless otherwise agreed, arrange for the supply of provisions at their own expense.
		 	180	  
		
	 (d) Where the Managers are providing crew management services in accordance with Sub-clause 5(a) the
		 	181	  
	 Owners shall:
		 	182	  
		
	 (i)      inform the Managers prior to
ordering the Vessel to any excluded or additional premium area under
		 	183	  
	 any of the Owners’ Insurance by reason of war risks and/or piracy or like perils and pay whatever
		 	184	  
	 additional costs may property be incurred by the Managers as a consequence of such orders including,
		 	185	  
	 if necessary, the costs of replacing any member of the Crew. Any delays resulting from negotiation
		 	186	  
	 with or replacement of any member of the Crew as a result of the Vessel being ordered to such an area
		 	187	  


  
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	 shall be for the Owners’ account. Should the Vessel be within an area which becomes an excluded or
		 	188	  
	 additional premium area the above provisions relating to cost and delay shall apply;
		 	189	  
		
	 (ii)     agree with the Managers prior to
any change of flag of the Vessel and pay whatever additional costs
		 	190	  
	 may properly be incurred by the Managers as a consequence of such change. If agreement cannot be
		 	191	  
	 reached then either party may terminate this Agreement in accordance with Sub-clause 22(e); and
		 	192	  
		
	 (iii)    provide, at no cost to the Managers, in
accordance with the requirements of the law of the Flag State,
		 	193	  
	 or higher standard, as mutually agreed, adequate Crew accommodation and living standards.
		 	194	  
		
	 (e) Where the Managers are not the Company, the Owners shall ensure that Crew are property familiarized
		 	195	  
	 with their duties in accordance with the Vessel’s SMS and that instructions which are essential to the
SMS
		 	196	  
	 are identified, documented and given to the Crew prior to sailing.
		 	197	  


  
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agreement 
  


	
	  
 SECTION 4 – Insurance. Budgets, Income, Expenses and
Fees
  


  

					
	10. Insurance Policies		 	198	  
		
	 The Owners shall procure, whether by instructing the Managers under Clause 7 (Insurance Arrangements)
		 	199	  
	 or otherwise, that throughout the period of this Agreement:
		 	200	  
		
	 (a) at the Owners’ expense, the Vessel is insured for not less than its sound market value or entered for its
		 	201	  
	 full gross tonnage, as the case may be for:
		 	202	  
		
	 (i) hull and machinery marine risks (including but not limited to crew negligence) and excess liabilities;
		 	203	  
		
	 (ii) protection and indemnity risks (including but not limited to pollution risks, diversion expenses and,
		 	204	  
	 except to the extent insured separately by the Managers in accordance with Sub-clause 5(b)(i), Crew
		 	205	  
	 Insurances);
		 	206	  
		
	 NOTE: If the Managers are not providing crew management services under Sub-clause 5(a) (Crew
		 	207	  
	 Management) or have agreed not to provide Crew Insurances separately in accordance with Sub-clause
		 	208	  
	 5(b)(i), then such insurances must be included in the protection and indemnity risks cover for the Vessel (see
		 	209	  
	 Sub-clause 10(a)(ii) above).
		 	210	  
		
	 (iii)    war risks (including but not limited to blocking and trapping, protection and indemnity, terrorism and
crew
		 	211	  
	 risks); and
		 	212	  
		
	 (iv)    such optional insurances as may be agreed (such as piracy, kidnap and ransom, loss of hire and
		 	213	  
	 FD & D) (see Box 12)
		 	214	  
		
	 Sub-clauses 10(a)(i) through 10(a)(iv) all in accordance with the best practice of prudent
owners of vessels
		 	215	  
	 of a similar type to the Vessel, with sound and reputable insurance companies, underwriters or associations
		 	216	  
	 (“the Owners’ Insurances”);
		 	217	  
		
	 (b) all premiums and calls on the Owners’ Insurances are paid by their due date;
		 	218	  
	 (c) the Owners’ Insurances name the Managers and, subject to underwriters’ agreement, any third party
		 	219	  
	 designated by the Managers as a joint assured, with full cover. It is understood that in some cases, such as
		 	220	  
	 protection and indemnity, the normal terms for such cover may impose on the Managers and any such third
		 	221	  
	 party a liability in respect of premiums or calls arising in connection with the Owners’ Insurances.
		 	222	  
		
	 If obtainable at no additional cost, however, the Owners shall procure such insurances on terms such that
		 	223	  
	 neither the Managers nor any such third party shall be under any liability in respect of premiums or calls arising
		 	224	  
	 in connection with the Owners’ Insurances. In any event, on termination of this Agreement in accordance
		 	225	  
	 with Clause 21 (Duration of the Agreement) and Clause 22 (Termination), the Owners shall
procure that the
		 	226	  
	 Managers and any third party designated by the Managers as joint assured shall cease to be joint assured
		 	227	  
	 and, if reasonably achievable, that they shall be released from any and all liability for premiums and calls
		 	228	  
	 that may arise in relation to the period of this Agreement; and
		 	229	  
		
	 (d) written evidence is provided, to the reasonable satisfaction of the Managers, of the Owners’ compliance
		 	230	  
	 with their obligations under this Clause 10 within a reasonable time of the commencement of the Agreement,
		 	231	  
	 and of each renewal date and, if specifically requested, of each payment date of the Owners’ Insurances.
		 	232	  
		
	11. Income Collected and Expenses Paid on Behalf of Owners		 	233	  
		
	 (a) Except as provided in Sub-clause 11(c) all monies collected by the Managers under the terms of this
		 	234	  
	 Agreement (other than monies payable by the Owners to the Managers) and any interest thereon shall be
		 	235	  
	 held to the credit of the Owners in a separate bank account.
		 	236	  
		
	 (b) All expenses incurred by the Managers under the terms of this Agreement on behalf of the Owners
		 	237	  
	 (including expenses as provided in Clause 12(c)) may be debited against the Owners in the account referred to
		 	238	  
	 under Sub-clause 11(a) but shall in any event remain payable by the Owners to the Managers on demand.
		 	239	  
		
	 (c) All monies collected by the Managers under Clause 6 (Commercial Management) shall be paid into a
		 	240	  
	 bank account in the name of the Owners or as may be otherwise advised by the Owners in writing.
		 	241	  
		
	12. Management Fee and Expenses		 	242	  


  
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	 (a) The Owners shall pay to the Managers an annual management fee as stated in Box 14 for their services
		 	243	  
	 as Managers under this Agreement, which shall be payable in equal monthly instalments in advance, the first
		 	244	  
	 instalment (pro rata if appropriate) being payable on the commencement of this Agreement (see Clause 2
		 	245	  
	 (Commencement and Appointment) and Box 2) and subsequent instalments being payable at the beginning
		 	246	  
	 of every calendar month. The management fee shall be payable to the Managers’ nominated account stated
		 	247	  
	 in Box 15.
		 	248	  
		
	 (b) The management fee shall be subject to an annual review and the proposed fee shall be presented in
		 	249	  
	 the annual budget in accordance with Sub-clause 13(a).
		 	250	  
		
	 (c) The Managers shall, at no extra cost to the Owners, provide their own office accommodation, office staff,
		 	251	  
	 facilities and stationery. Without limiting the generality of this Clause 12 (Management Fee and Expenses) the
		 	252	  
	 Owners shall reimburse the Managers for postage and communication expenses, travelling expenses, and
		 	253	  
	 other out of pocket expenses properly incurred by the Managers in pursuance of the Management Services.
		 	254	  
	 Any days used by the Managers’ personnel travelling to or from or attending on the Vessel or otherwise used
		 	255	  
	 in connection with the Management Services in excess of those agreed in the budget shall be charged at
		 	256	  
	 the daily rate stated in Box 16.
		 	257	  
		
	 (d) If the Owners decide to layup the Vessel and such layup lasts for more than the number of months
		 	258	  
	 stated in Box 17, an appropriate reduction of the Management Fee for the period exceeding such period
		 	259	  
	 until one month before the Vessel is again put into service shall be mutually agreed between the parties. If
		 	260	  
	 the Managers are providing crew management services in accordance with Sub-clause 5(a), consequential
		 	261	  
	 costs of reduction and reinstatement of the Crew shall be for the Owners’ account. If agreement cannot be
		 	262	  
	 reached then either party may terminate this Agreement in accordance with Sub-clause 22(e).
		 	263	  
		
	 (e) Save as otherwise provided in this Agreement, all discounts and commissions obtained by the Managers
		 	264	  
	 in the course of the performance of the Management Services shall be credited to the Owners.
		 	265	  
		
	13. Budgets and Management of Funds		 	266	  
		
	 (a) The Managers’ initial budget is set out in Annex “C” hereto. Subsequent budgets shall be for twelve
		 	267	  
	 month periods and shall be prepared by the Managers and presented to the Owners not less than three
		 	268	  
	 months before the end of the budget year.
		 	269	  
		
	 (b) The Owners shall state to the Managers in a timely manner, but in any event within one month of
		 	270	  
	 presentation, whether or not they agree to each proposed annual budget. The parties shall negotiate in good
		 	271	  
	 faith and if they fail to agree on the annual budget, including the management fee, either party may terminate
		 	272	  
	 this Agreement in accordance with Sub-clause 22(e).
		 	273	  
		
	 (c) Following the agreement of the budget, the Managers shall prepare and present to the Owners their
		 	274	  
	 estimate of the working capital requirement for the Vessel and shall each month request the Owners in writing
		 	275	  
	 to pay the funds required to run the Vessel for the ensuing month, including the payment of any occasional or
		 	276	  
	 extraordinary item of expenditure, such as emergency repair costs, additional insurance premiums, bunkers
		 	277	  
	 or provisions. Such funds shall be received by the Managers within ten running days after the receipt by the
		 	278	  
	 Owners of the Managers’ written request and shall be held to the credit of the Owners in a separate bank
		 	279	  
	 account.
		 	280	  
		
	 (d) The Managers shall at all times maintain and keep true and correct accounts in respect of the Management
		 	281	  
	 Services in accordance with the relevant International Financial Reporting Standards or such other standard
		 	282	  
	 as the parties may agree, including records of all costs and expenditure incurred, and produce a comparison
		 	283	  
	 between budgeted and actual income and expenditure of the Vessel in such form and at such intervals as
		 	284	  
	 shall be mutually agreed.
		 	285	  
		
	 The Managers shall make such accounts available for inspection and auditing by the Owners and/or their
		 	286	  
	 representatives in the Managers’ offices or by electronic means, provided reasonable notice is given by the
		 	287	  
	 Owners.
		 	288	  
		
	 (e) Notwithstanding anything contained herein, the Managers shall in no circumstances be required to use
		 	289	  
	 or commit their own funds to finance the provision of the Management Services.
		 	290	  


  
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agreement 
  


	
	  
 SECTION 5 – Legal, General and Duration of
Agreement
  


  

					
	14. Trading Restrictions		 	291	  
		
	 If the Managers are providing crew management services accordance with Sub-clause 5(a) (Crew
		 	292	  
	 Management), the Owners and the Managers will, prior to the commencement of this Agreement, agree on any
		 	293	  
	 trading restrictions to the Vessel that may result from the terms and conditions of the Crew’s employment
		 	294	  
		
	15. Replacement		 	295	  
		
	 If the Managers are providing crew management services in accordance with Sub-clause 5(a) (Crew
		 	296	  
	 Management), the Owners may require the replacement, at their own expense, at the next reasonable
		 	297	  
	 opportunity, of any member of the Crew found on reasonable grounds to be unsuitable for service. If the
		 	298	  
	 Managers have failed to fulfil their obligations in providing suitable qualified Crew within the meaning of Sub-
		 	299	  
	 clause 5(a) (Crew Management), then such replacement shall be at the Managers’ expense.
		 	300	  
		
	16. Managers’ Right to Sub-Contract		 	301	  
		
	 The Managers shall not have the right to subcontract any of their obligations hereunder
without the prior written
		 	302	  
	 consent of the Owners which shall not be unreasonably withheld. In the event of such a sub-contract the
Managers
		 	303	  
	 shall remain fully liable for the due performance of their obligations under this Agreement.
		 	304	  
		
	17. Responsibilities		 	305	  
		
	 (a) Force Majeure
				
			 	306	  
	 Neither party shall be liable for any loss, damage or delay due to any of the following force majeure events
		 	307	  
	 and/or conditions to the extent that the party invoking force majeure is prevented or hindered from
		 	308	  
	 performing any or all of their obligations under this Agreement, provided they have made all
		 	309	  
	 reasonable efforts to avoid, minimize or prevent the effect of such events and/or conditions:
		 	310	  
		
	 (i)      acts of God;
		 	311	  
		
	 (ii)     any Government requisition, control, intervention, requirement or interference;
		 	312	  
		
	 (iii)    any circumstances arising out of war, threatened act of war or warlike operations, acts of terrorism,
		 	313	  
	 sabotage or piracy, or the consequences thereof;
		 	314	  
		
	 (iv)    riots, civil commotion, blockades or embargoes;
		 	315	  
		
	 (v)     epidemics;
		 	316	  
		
	 (vi)    earthquakes, landslides, floods or other extraordinary weather conditions;
		 	317	  
		
	 (vii)    strikes, lockouts or other industrial action, unless limited to the employees (which shall not include the
		 	318	  
	 Crew) of the party seeking to invoke force majeure;
		 	319	  
		
	 (viii)  fire, accident, explosion except where caused by negligence of the party seeking to invoke force majeure;
		 	320	  
	 and
		 	321	  
		
	 (ix)    any other similar cause beyond the reasonable control of either party.
		 	322	  
		
	 (b) Liability to Owners
		 	323	  
		
	 (i)      Without prejudice to Sub-clause 17(a), the Managers shall be under no
liability whatsoever to the Owners
		 	324	  
	 for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect, (including but
		 	325	  
	 not limited to loss of profit arising out of or in connection with detention of or delay to the Vessel) and
		 	326	  
	 howsoever arising in the course of performance of the Management Services UNLESS same is proved
		 	327	  
	 to have resulted solely from the negligence, gross negligence or wilful default of the Managers or their
		 	328	  
	 employees or agents, or sub-contractors employed by them in connection with the Vessel, in which case
		 	329	  
	 (save where loss, damage, delay or expense has resulted from the Managers’ personal act or omission
		 	330	  
	 committed with the intent to cause same or recklessly and with knowledge that such loss, damage,
		 	331	  
	 delay or expense would probably result) the Managers’ liability for each incident or series of incidents
		 	332	  
	 giving rise to a claim or claims shall never exceed a total of ten (10) times the annual management fee
		 	333	  
	 payable hereunder.
		 	334	  
		
	 (ii)     Acts or omissions of the Crew Notwithstanding anything that may appear to the contrary in this
		 	335	  


  
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	 Agreement, the Managers shall not be liable for any acts or omissions of the Crew, even if such acts
		 	336	  
	 or omissions are negligent, grossly negligent or wilful, except only to the extent that they are shown to
		 	337	  
	 have resulted from a failure by the Managers to discharge their obligations under Clause 5(a) (Crew
		 	338	  
	 Management), in which case their liability shall be limited in accordance with the terms of this Clause
		 	339	  
	 17 (Responsibilities).
		 	340	  
		
	 (c) Indemnity
		 	341	  
		
	 Except to the extent and solely for the amount therein set out that the Managers would be liable under
		 	342	  
	 Sub-clause 17(b), the Owners hereby undertake to keep the Managers and their employees,
		 	343	  
	 agents and sub-contractors indemnified and to hold them harmless against all actions, proceedings, claims,
		 	344	  
	 demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or
		 	345	  
	 suffered by them arising out of or in connection with the performance of this Agreement, and against and in
		 	346	  
	 respect of all costs, loss, damages and expenses (including legal costs and expenses on a full indemnity
		 	347	  
	 basis) which the Managers may suffer or incur (either directly or indirectly) in the course of the performance
		 	348	  
	 of this Agreement.
		 	349	  
		
	 (d) “Himalaya”
		 	350	  
		
	 It is hereby expressly agreed that no employee or agent of the Managers (including every
		 	351	  
	 sub-contractor from time to time employed by the Managers) shall in any circumstances whatsoever be
		 	352	  
	 under any liability whatsoever to the Owners for any loss, damage or delay of whatsoever kind arising or
		 	353	  
	 resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in
		 	354	  
	 connection with his employment and, without prejudice to the generality of the foregoing provisions in this
		 	355	  
	 Clause 17 (Responsibilities), every exemption, limitation, condition and liberty herein contained and every
		 	356	  
	 right, exemption from liability, defence and immunity of whatsoever nature applicable to the Managers or to
		 	357	  
	 which the Managers are entitled hereunder shall also be available and shall extend to protect every such
		 	358	  
	 employee or agent of the Managers acting as aforesaid and for the purpose of all the foregoing provisions
		 	359	  
	 of this Clause 17 (Responsibilities) the Managers are or shall be deemed to be acting as agent or trustee
		 	360	  
	 on behalf of and for the benefit of all persons who are or might be their servants or agents from time to time
		 	361	  
	 (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be
		 	362	  
	 parties to this Agreement.
		 	363	  
		
	 18. General Administration
		 	364	  
		
	 (a) The Managers shall keep the Owners and, if appropriate, the Company informed in a timely manner of
		 	365	  
	 any incident of which the Managers become aware which gives or may give rise to delay to the Vessel or
		 	366	  
	 claims or disputes involving third parties.
		 	367	  
		
	 (b) The Managers shall handle and settle all claims and disputes arising out of the Management Services
		 	368	  
	 hereunder, unless the Owners instruct the Managers otherwise. The Managers shall keep the Owners
		 	369	  
	 appropriately informed in a timely manner throughout the handling of such claims and disputes.
		 	370	  
		
	 (c) The Owners may request the Managers to bring or defend other actions, suits or proceedings related
		 	371	  
	 to the Management Services, on terms to be agreed.
		 	372	  
		
	 (d) The Managers shall have power to obtain appropriate legal or technical or other outside expert advice in
		 	373	  
	 relation to the handling and settlement of claims in relation to Sub-clauses 18(a) and 18(b)
and disputes and
		 	374	  
	 any other matters affecting the interests of the Owners in respect of the Vessel, unless the Owners instruct
		 	375	  
	 the Managers otherwise.
		 	376	  
		
	 (e) On giving reasonable notice, the Owners may request, and the Managers shall in a timely manner make
		 	377	  
	 available, all documentation, information and records in respect of the matters covered by this Agreement
		 	378	  
	 either related to mandatory rules or regulations or other obligations applying to the Owners in respect of
		 	379	  
	 the Vessel (including but not limited to STCW 95, the ISM Code and ISPS Code) to the extent permitted by
		 	380	  
	 relevant legislation.
		 	381	  
		
	 On giving reasonable notice, the Managers may request, and the Owners shall in a timely manner make
		 	382	  
	 available, all documentation, information and records reasonably required by the Managers to enable them
		 	383	  
	 to perform the Management Services.
		 	384	  
		
	 (f) The Owners shall arrange for the provision of any necessary guarantee bond or other security.
		 	385	  


  
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	 (g) Any costs incurred by the Managers in carrying out their obligations according to this Clause 18 (General
		 	386	  
	 Administration) shall be reimbursed by the Owners.
		 	387	  
		
	19. Inspection of Vessel		 	388	  
		
	 The Owners may at any time after giving reasonable notice to the Managers inspect the Vessel for any reason
		 	389	  
	 they consider necessary.
		 	390	  
		
	20. Compliance with Laws and Regulations		 	391	  
		
	 The parties will not do or permit to be done anything which might cause any breach or infringement of the
		 	392	  
	 laws and regulations of the Flag State, or of the places where the Vessel trades.
		 	393	  
		
	21. Duration of the Agreement		 	394	  
		
	 (a) This Agreement shall come into effect at the date stated in Box 2 and shall continue until terminated by
		 	395	  
	 either party by giving notice to the other; in which event this Agreement shall terminate upon the expiration
		 	396	  
	 of the later of the number of months stated in Box 18 or a period of two (2) months from the date on which
		 	397	  
	 such notice is received, unless terminated earlier in accordance with Clause 22 (Termination).
		 	398	  
		
	 (b) Where the Vessel is not at a mutually convenient port or place on the expiry of such period, this Agreement
		 	399	  
	 shall terminate on the subsequent arrival of the Vessel at the next mutually convenient port or place.
		 	400	  
		
	22. Termination		 	401	  
		
	 (a) Owners’ or Managers’ default
		 	402	  
		
	 If either party fails to meet their obligations under this Agreement, the other party may give notice to the
		 	403	  
	 party in default requiring them to remedy it. In the event that the party in default fails to remedy it within a
		 	404	  
	 reasonable time to the reasonable satisfaction of the other party, that party shall be entitled to terminate this
		 	405	  
	 Agreement with immediate effect by giving notice to the party in default.
		 	406	  
		
	 (b) Notwithstanding Sub-clause 22(a):
		 	407	  
		
	 (i)      The Managers shall be entitled to terminate the Agreement with immediate effect by giving notice to
the
		 	408	  
	 Owners if any monies payable by the Owners and/or the owners of any associated vessel, details of
		 	409	  
	 which are listed in Annex “D”, shall not have been received in the Managers’ nominated account within
		 	410	  
	 ten days (10) of receipt by the Owners of the Managers’ written request, or if the Vessel is repossessed by
		 	411	  
	 the Mortgagee(s).
		 	412	  
		
	 (ii)     If the Owners proceed with the employment of or continue to employ the Vessel in the carriage of
		 	413	  
	 contraband, blockade running, or in an unlawful trade, or on a voyage which in the reasonable opinion
		 	414	  
	 of the Managers is unduly hazardous or improper, the Managers may give notice of the default to the
		 	415	  
	 Owners, requiring them to remedy it as soon as practically possible. In the event that the Owners fail to
		 	416	  
	 remedy it within a reasonable time to the satisfaction of the Managers, the Managers shall be entitled
		 	417	  
	 to terminate the Agreement with immediate effect by notice.
		 	418	  
		
	 (iii)    If either party fails to meet their respective obligations under Sub-clause
5(b) (Crew Insurances) and
		 	419	  
	 Clause 10 (Insurance Policies), the other party may give notice to the party in default requiring them to
		 	420	  
	 remedy it within ten (10) days, failing which the other party may terminate this Agreement with immediate
		 	421	  
	 effect by giving notice to the party in default.
		 	422	  
		
	 (c) Extraordinary Termination
		 	423	  
		
	 This Agreement shall be deemed to be terminated in the case of the sale of the Vessel or, if the Vessel
		 	424	  
	 becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisitioned
		 	425	  
	 or has been declared missing or, if bareboat chartered, unless otherwise agreed, when the bareboat charter
		 	426	  
	 comes to an end.
		 	427	  
		
	 (d) For the purpose of Sub-clause 22(c) hereof:
		 	428	  
		
	 (i) the date upon which the Vessel is to be treated as having been sold or otherwise disposed of shall be
		 	429	  
	 the date on which the Vessel’s owners cease to be the registered owners of the Vessel;
		 	430	  
		
	 (ii) the Vessel shall be deemed to be lost either when it has become an actual total loss or agreement has
		 	431	  
	 been reached with the Vessel’s underwriters in respect of its constructive total loss or if such agreement
		 	432	  
	 with the Vessel’s underwriters is not reached it is adjudged by a competent tribunal that a constructive
		 	433	  


  
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	 loss of the Vessel has occurred; and
		 	434	  
		
	 (iii)    the date upon which the Vessel is to be treated as declared missing shall be ten (10) days after the
Vessel
		 	435	  
	 was last reported or when the Vessel is recorded as missing by the Vessel’s underwriters, whichever
		 	436	  
	 occurs first. A missing vessel shall be deemed lost in accordance with the provisions of Sub-clause 22(d)
		 	437	  
	 (ii)
		 	438	  
		
	 (e) In the event the parties fail to agree the annual budget in accordance with Sub-clause 13(b) or to agree
		 	439	  
	 a change of flag in accordance with Sub-clause 9(d)(ii) or to agree to a reduction in the Mangement Fee in
		 	440	  
	 accordance with Sub-clause 12(d), either party may terminate this Agreement by giving the other party not
		 	441	  
	 less than one month’s notice, the result of which will be the expiry of the Agreement at the end of the current
		 	442	  
	 budget period or on expiry of the notice period, whichever is the later.
		 	443	  
		
	 (f) This Agreement shall terminate forthwith in the event of an order being made or resolution passed
		 	444	  
	 for the winding up, dissolution, liquidation or bankruptcy of either party (otherwise than for the purpose of
		 	445	  
	 reconstruction or amalgamation) or if a receiver or administrator is appointed, or if it suspends payment,
		 	446	  
	 ceases to carry on business or makes any special arrangement or composition with its creditors.
		 	447	  
		
	 (g) In the event of the termination of this Agreement for any reason other than default by the Managers the
		 	448	  
	 management fee payable to the Managers according to the provisions of Clause 12 (Management Fee and
		 	449	  
	 Expenses), shall continue to be payable for a further period of the number of months stated in Box 19 as
		 	450	  
	 from the effective date of termination. If Box 19 is left blank then ninety (90) days shall apply.
		 	451	  
		
	 (h) In addition, where the Managers provide Crew for the Vessel in accordance with Clause 5(a) (Crew
		 	452	  
	 Management):
		 	453	  
		
	 (i)      the Owners shall continue to pay Crew Support Costs during the said further period of the number
of
		 	454	  
	 months stated in Box 19; and
		 	455	  
		
	 (ii)     the Owners shall pay an equitable proportion of any Severance Costs which may be incurred, not
		 	456	  
	 exceeding the amount stated in Box 20. The Managers shall use their reasonable endeavours to minimise
		 	457	  
	 such Severance Costs.
		 	458	  
		
	 (i) On the termination, for whatever reason, of this Agreement, the Managers shall release to the Owners,
		 	459	  
	 if so requested, the originals where possible, or otherwise certified copies, of all accounts and all documents
		 	460	  
	 specifically relating to the Vessel and its operation.
		 	461	  
		
	 (j) The termination of this Agreement shall be without prejudice to all rights accrued due between the parties
		 	462	  
	 prior to the date of termination.
		 	463	  
		
	23. BIMCO Dispute Resolution Clause		 	464	  
		
	 (a) This Agreement shall be governed by and construed in accordance with EnglishDanish law
and any dispute
		 	465	  
	 arising out of or in connection with this Agreement shall be referred to arbitration in
LondonCopenhagen in accordance
		 	466	  
	 with the Arbitration Act 1996Danish Institute of Arbitration in Copenhagen (Copenhagen
Arbitration) or any statutory
		 	467	  
	 modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
		 	468	  
		
	 The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA)
		 	469	  
	 Terms Rules of Procedure of Copenhagen Arbitration current at the time when the
arbitration proceedings are
		 	470	  
	 commenced.
				
		
	 The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its
		 	471	  
	 arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint
		 	472	  
	 its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole
		 	473	  
	 arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the
		 	474	  
	 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so
		 	475	  
	 within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any
		 	476	  
	 further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party
		 	477	  
	 accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by
		 	478	  
	 agreement.
		 	479	  
		
	 Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the
		 	480	  


  
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	 appointment of a sole arbitrator.
		 	481	  
		
	 In cases where neither the claim nor any counterclaim exceeds the sum of USD50,000 (or such other sum
		 	482	  
	 as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims
		 	483	  
	 Procedure current at the time when the arbitration proceedings are commenced.
		 	484	  
		
	 (b) This Agreement shall be governed by and construed in accordance with Title 9 of the United States Code
		 	485	  
	 and the Maritime Law of the United States and any dispute arising out of or in connection with this Agreement
		 	486	  
	 shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the
		 	487	  
	 third by the two so chosen, their decision or that of any two of them shall be final, and for the purposes of
		 	488	  
	 enforcing any award, judgment may be entered on an award by any court of competent jurisdiction. The
		 	489	  
	 proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc.
		 	490	  
		
	 In cases where neither the claim nor any counterclaim exceeds the sum of USD50,000 (or such other sum
		 	491	  
	 as the parties may agree) the arbitration shall be conducted in accordance with the Shortened Arbitration
		 	492	  
	 Procedure of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings
		 	493	  
	 are commenced.
		 	494	  
		
	 (c) This Agreement shall be governed by and construed in accordance with the laws of the place mutually
		 	495	  
	 agreed by the parties and any dispute arising out of or in connection with this Agreement shall be referred
		 	496	  
	 to arbitration at a mutually agreed place, subject to the procedures applicable there.
		 	497	  
		
	 (d) Notwithstanding Sub-clauses 23(a), 23(b) or
23(c) above, the parties may agree at any time to refer to
		 	498	  
	 mediation any difference and/or dispute arising out of or in connection with this Agreement.
		 	499	  
		
	 (i)      In the case of a dispute in respect of which arbitration has been commenced under Sub-clauses 23(a);
		 	500	  
	 23(b) or 23(c) above, the following shall apply:
		 	501	  
		
	 (ii)     Either party may at any time and from time to time elect to refer the dispute or part of the dispute
to
		 	502	  
	 mediation by service on the other party of a written notice (the “Mediation Notice”) calling on the other
		 	503	  
	 party to agree to mediation.
		 	504	  
		
	 (iii)    The other party shall thereupon within 14 calendar days of receipt of the Mediation Notice confirm that
		 	505	  
	 they agree to mediation, in which case the parties shall thereafter agree a mediator within a further 14
		 	506	  
	 calendar days, failing which on the application of either party a mediator will be appointed promptly by
		 	507	  
	 the Arbitration Tribunal (“the Tribunal”) or such person as the Tribunal may designate for that purpose.
		 	508	  
	 The mediation shall be conducted in such place and in accordance with such procedure and on such
		 	509	  
	 terms as the parties may agree or, in the event of disagreement, as may be set by the mediator.
		 	510	  
		
	 (iv)    If the other party does not agree to mediate, that fact may be brought to the attention of the Tribunal
		 	511	  
	 and may be taken into account by the Tribunal when allocating the costs of the arbitration as between
		 	512	  
	 the parties.
		 	513	  
		
	 (v)     The mediation shall not affect the right of either party to seek such relief or take such steps as it
considers
		 	514	  
	 necessary to protect its interest.
		 	515	  
		
	 (vi)    Either party may advise the Tribunal that they have agreed to mediation. The arbitration procedure shall
		 	516	  
	 continue during the conduct of the mediation but the Tribunal may take the mediation timetable into
		 	517	  
	 account when setting the timetable for steps in the arbitration.
		 	518	  
		
	 (vii)    Unless otherwise agreed or specified in the mediation terms, each party shall bear its own costs incurred
		 	519	  
	 in the mediation and the parties shall share equally the mediator’s costs and expenses.
		 	520	  
		
	 (viii)  The mediation process shall be without prejudice and confidential and no information or documents
		 	521	  
	 disclosed during it shall be revealed to the Tribunal except to the extent that they are disclosable under
		 	522	  
	 the law and procedure governing the arbitration.
		 	523	  
		
	 (Note: The parties should be aware that the mediation process may not necessarily interrupt time limits.)
		 	524	  
		
	 (e) If Box 21 in Part I is not appropriately filled in, Sub-clause 23(a) of this Clause shall
apply.
		 	525	  
		
	 Note: Sub-clauses 23(a), 23(b) and 23(c) are
alternatives; indicate alternative agreed in Box 21. Sub-clause
		 	526	  


  
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	 23(d) shall apply in all cases.
		 	527	  
		
	24. Notices		 	528	  
		
	 (a) All notices given by either party or their agents to the other party or their agents in accordance with the
		 	529	  
	 provisions of this Agreement shall be in writing and shall, unless specifically provided in this Agreement to
		 	530	  
	 the contrary, be sent to the address for that other party as set out in Boxes 22 and 23 or as appropriate or
		 	531	  
	 to such other address as the other party may designate in writing.
		 	532	  
		
	 A notice may be sent by registered or recorded mail, facsimile, electronically or delivered by hand in accordance
		 	533	  
	 with this Sub-clause 24(a) 
		 	534	  
		
	 (b) Any notice given under this Agreement shall take effect on receipt by the other party and shall be deemed
		 	535	  
	 to have been received:
		 	536	  
		
	 (i)      if posted, on the seventh (7th) day after posting;
		 	537	  
		
	 (ii)     if sent by facsimile or electronically, on the day of transmission; and
		 	538	  
		
	 (iii)    if delivered by hand, on the day of delivery.
		 	539	  
		
	 And in each case proof of posting, handing in or transmission shall be proof that notice has been given,
		 	540	  
	 unless proven to the contrary.
		 	541	  
		
	25. Entire Agreement		 	542	  
		
	 This Agreement constitutes the entire agreement between the parties and no promise, undertaking,
		 	543	  
	 representation, warranty or statement by either party prior to the date stated in Box 2 shall affect this
		 	544	  
	 Agreement. Any modification of this Agreement shall not be of any effect unless in writing signed by or on
		 	545	  
	 behalf of the parties.
		 	546	  
		
	26. Third Party Rights		 	547	  
		
	 Except to the extent provided in Sub-clauses 17(c) (Indemnity) and 17(d) (Himalaya), no third
parties may
		 	548	  
	 enforce any term of this Agreement.
		 	549	  
		
	27. Partial Validity		 	550	  
		
	 If any provision of this Agreement is or becomes or is held by any arbitrator or other competent body to be
		 	551	  
	 illegal, invalid or unenforceable in any respect under any law or jurisdiction, the provision shall be deemed
		 	552	  
	 to be amended to the extent necessary to avoid such illegality, invalidity or unenforceability, or, if such
		 	553	  
	 amendment is not possible, the provision shall be deemed to be deleted from this Agreement to the extent
		 	554	  
	 of such illegality, invalidity or unenforceability, and the remaining provisions shall continue in full force and
		 	555	  
	 effect and shall not in any way be affected or impaired thereby.
		 	556	  
		
	28. Interpretation		 	557	  
		
	 In this Agreement:
		 	558	  
		
	 (a) Singular/Plural
		 	559	  
	 The singular includes the plural and vice versa as the context admits or requires.
		 	560	  
		
	 (b) Headings
		 	561	  
	 The index and headings to the clauses and appendices to this Agreement are for convenience only and shall not affect
		 	562	  
	 its construction or interpretation.
		 	563	  
		
	 (c) Day
		 	564	  
	 “Day” means a calendar day unless expressly stated to the contrary.
		 	565	  
		
	29. BIMCO MLC Clause for SHIPMAN 2009 For the purposes of this Clause:				
		
	 “MLC” means the International Labour Organisation (ILO) Maritime Labour Convention (MLC 2006) and any amendment thereto or substitution thereof.
				
		
	 “Shipowner shall mean the party named as “shipowner” on the Maritime Labour Certificate for the Vessel.
				
		
	 (a) Subject to Clause 3 (Authority of the Managers), the Managers shall, to the extent of their Management Services, assume the Shipowner’s duties and
responsibilities imposed by the MLC for the Vessel, on behalf of the Shipowner.
				


  
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	 (b) The Owners shall ensure compliance with the MLC in respect of any crew members supplied by them or on their behalf.
		
		
	 (c) The Owners shall procure, whether by instructing the Managers under Clause 7 (Insurance Arrangements) orotherwise, insurance cover or financial security to
satisfy the Shipowners financial security obligations under the MLC.
		


  
 15 








 Addendum number 1 to the Standard Ship Management Agreement dated 13.05.2014 

With effect from May 1st 2015 KNOT Management Denmark A/S and KNOT Shuttle Tankers 21 AS have agreed to adjust
the management fee and a New Box 14 have been agreed to be: 
 USD 46,080 (to be increased by 4 per cent annually, first time from
January 1st 2016). 
 Copenhagen/Haugesund,
March 19th 2015 
 /s/ Trygve Seglem 

KNOT Shuttle Tankers 21 AS 
 Owners 

By Director Trygve Seglem 
 /s/ Karl Gerhard Bråstein Dahl 

KNOT Management Denmark A/S 
 Managers 

By Chairman of the Board Karl Gerhard Bråstein Dahl