Exhibit 10.4


 


Dated
[     ]


 


 


 


[
    ]


 


and


 


INTERNATIONAL
TANKER MANAGEMENT LTD. (ITM)


 


SHIP
MANAGEMENT AGREEMENT


in respect
of the Vessel [       ]


 



    	 



    	 



    




Contents


 


	 	 	Page
	 	 	 
	1.	DEFINITIONS AND INTERPRETATION	3
	 	 	 
	2.	APPOINTMENT OF MANAGERS	7
	 	 	 
	3.	MANAGEMENT SERVICES	7
	 	 	 
	4.	MANAGERS’ OBLIGATIONS	16
	 	 	 
	5.	OWNERS’ OBLIGATIONS	17
	 	 	 
	6.	INSURANCE POLICIES	17
	 	 	 
	7.	MANAGEMENT FEE	18
	 	 	 
	8.	VESSEL EXPENSES	19
	 	 	 
	9.	MANAGERS’ RIGHT TO SUB-CONTRACT	20
	 	 	 
	10.	RESPONSIBILITIES	20
	 	 	 
	11.	DOCUMENTATION	23
	 	 	 
	12.	DEPLOYMENT OF THE VESSEL	24
	 	 	 
	13.	AUDITING	24
	 	 	 
	14.	INSPECTION OF VESSEL	25
	 	 	 
	13.	COMPLIANCE WITH LAWS AND REGULATIONS ETC	25
	 	 	 
	16.	DURATION OF THE AGREEMENT	25
	 	 	 
	17.	TERMINATION	25
	 	 	 
	18.	CONFIDENTIALITY	26
	 	 	 
	19.	MISCELLANEOUS	26
	 	 	 
	20.	LAW AND ARBITRATION	27
	 	 	 
	21.	NOTICES AND BANK ACCOUNTS	28




 



    	 



    	 



    




THIS
SHIP MANAGEMENT AGREEMENT is made on [     ]


 


BETWEEN:


 


		(1)	[    
                                         ]a company incorporated in and having its registered office in [     ]
                                         (the “Owners”); and



 


		(2)	INTERNATIONAL
                                         TANKER MANAGEMENT LTD., whose principal place of business is at Victoria Place,
                                         31 Victoria Street, Hamilton HM 10, Bermuda, represented by its Branch Office at 809
                                         Executive Heights (Damac Bldg.), P.O. Box 24415, Tecom, Dubai, United Arab Emirates (hereinafter
                                         called “ the Managers”).





 


WHEREAS:


 


		(A)	The Owners
                                         are the registered owner of the Oil/Chemical tanker vessel[ ] (the “Vessel”)
                                         as more particularly described in Annex “A” hereto and wish to engage the
                                         Managers to manage and operate the Vessel;



 


		(B)	The Managers,
                                         being fully experienced, qualified and able vessel managers, wish to manage and operate
                                         the Vessel subject to, and in accordance with, the terms set out in this Agreement.



 


IT IS
AGREED AS FOLLOWS:


 


		1.	DEFINITIONS
                                         AND INTERPRETATION



		1.1	Definitions



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


“Affiliate”
means any entity which, directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common
Control with that party;


“Annual
Budget” shall have the meaning ascribed to it in Clause 3.3.2 below;


“Agreement”
means this ship management agreement including the Annexes attached hereto as amended from time to time in accordance with the
terms hereof;


“Communication
Expenses” means the costs incurred by the Managers in performing the Management Services and for the account of the
Owners in respect of all communications between the shore and the Vessel as detailed in the Annual Budget;


“Control”
and “Controlled” mean the holding of power to direct or cause the direction of management, policies and decisions
of a company, corporation, partnership or other entity including, without limitation, through control by direct or indirect means
of not less than fifty per cent (50%) of the voting rights in such company, corporation, partnership or other entity;



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“Charter”
means the charter agreement dated [   ] between [insert charter details]


“Charterers”
means [insert name and address] or any future charterers of the Vessel notified to the Managers pursuant to Clause 5.3;


“Crew”
means the Officers and Ratings;


“Crew
Insurances” means insurances against crew risks which shall include, but not be limited to, death, sickness, repatriation,
injury, shipwreck and loss of personal effects;


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


“Dollar”
or “US$” means the currency of the United States of America;


“EDP
Expenses” means the costs of any new computer software or hardware (including licensing, maintenance, installation and
training costs) that may be installed or developed, in relation to the Vessel;


“Effective
Date” means the date on which this Agreement becomes effective, being the [date that the Vessel is delivered to the
Owners] or such other date as may be agreed between the parties;


“Emergency
Situation” means an emergency situation that:


		(i)	involves
                                         a threat to human life;



		(ii)	involves
                                         a risk of loss of the Vessel or its cargo or of serious damage to the Vessel or its cargo



		(iii)	involves
                                         a risk of the Vessel and/or its cargo causing serious environmental damage; or



		(iv)	involves
                                         a risk of the Vessel and/or its cargo, being stolen, impounded or seized.



“General
Expenses” mean costs and expenses incurred by the Managers in performing the Management Services and for the account
of the Owners, in respect of postage, reasonable travelling expenses, administration and translation of SOPEP and other out of
pocket expenses, as more particularly detailed in the Annual Budget;


“HSE
Report” means a report on the health, safety and environmental status of the Vessel (together with relevant statistics)
and including details of any specific health, safety and/or environmental incidents prepared in accordance with Clause 3.4.9;



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“ISM
Code” means the International Management Code for the Safe Operation of Ships and for Pollution Prevention as adopted
by the International Maritime Organisation (IMO) by resolution A.741(18) as amended from time to time;


“Maintenance
Schedule” means a schedule referred to in Clause 3.2.1(c) detailing the maintenance required for the Vessel for the
period up to the next special survey by the Vessel’s classification society and thereafter for each subsequent five (5)
year period.


“Management
Fee” means the fee payable by the Owners to the Managers in consideration of the Management Services, as specified in
Clauses 7.1 to 7.3 and as adjusted pursuant to Clause 7.4;


“Management
Services” means the services specified in Clause 3;


“Managers’
Account” means the bank account in the name of the Managers as specified in Clause 0, or such other bank account of
the Managers as may be notified to the Owners from time to time;


“Officers”
means the Master and the officers (including, but not limited to, the Senior Officers) of the Vessel, whose numbers, rank and
nationality are currently specified in Annex “B” attached hereto;


“Operational
Costs” means costs and expenses incurred by the Managers on behalf of the Owners to operate and maintain the Vessel
including Communication Expenses, General Expenses and EDP Expenses;


 


“Owners’
Insurances” means the insurance policies to be procured by the Owners in respect of the Vessel and as described in Clause
6;


 


“Permanent
Instructions” means the instructions relating to the operational procedures for communications between the Charterers
and the Crew as currently specified in Annex “D” attached hereto which may be amended pursuant to Clause 12.2;


“Ratings”
means the ratings of the Vessel, whose numbers, rank and nationality are currently specified in Annex “B” attached
hereto;


“Review
Date” means the one year anniversary from the Effective Date;


“Senior
Officer” means the following positions or roles on the Vessel:


		(i)	the
                                         Master;



		(ii)	the
                                         Chief Engineer;



		(iii)	the
                                         Chief Officer; or



		(iv)	the
                                         Second Engineer.







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


“SMS”
means a safety management system which complies with all relevant laws, rules and regulations, and with all the codes, guidelines
and standards recommended by the International Maritime Organisation (including without limitation, the ISM Code) any relevant
flag state and the classification society, which may from time to time be applicable to the Vessel and/or the Owners and/or the
Managers, and which is otherwise appropriate having regard to the Managers’ obligations under this Agreement;


“SOPEP”
means the shipboard oil pollution emergency plan in the form approved by the Marine Environment Protection Committee of the International
Maritime Organisation pursuant to the requirements of Regulations 25 of Annex 1 of the International Convention of the Protection
of Pollution from Ships, 1973, as modified by the Protocol of 1989 relating thereto, as amended (MARPOL 73/78); and that may be
further amended from time to time.


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


“Supplementary
Budget” shall have the meaning ascribed to it in Clause 3.3.4 below;


“Vessel
Account” means a bank account in the name of the Vessel opened and operated in accordance with Clause 8.4, the details
of which shall be notified to the Owners from time to time;


“Vessel
Condition Report” means a report detailing the physical condition, the progress of the Maintenance Schedule and the
performance of the Vessel;


“Vessel
Data” means all records, invoices, logs, certificates and performance and maintenance data relating to the Vessel and
all correspondence and documentation generated, collected or compiled during the provision of the Management Services by either
former managers of the Vessel and given to the Managers, or by the Managers, to enable the Owners to effectively operate, manage
or sell the Vessel, but excluding the Managers internal correspondence and any correspondence (other than invoices) between the
Managers and their suppliers.


“Working
Day” means a day when most banks are open for business in London, New York, Piraeus and Singapore.


		1.2	Interpretation



		1.2.1	“Owners”,
                                         “Managers” and “Charterers” include their respective successors
                                         and assigns;



		1.2.2	Clause
                                         headings are inserted for convenience and shall be ignored in construing this Agreement.



		1.2.3	Unless
                                         the context otherwise requires, words denoting the singular number include the plural
                                         number and vice versa.




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		1.2.4	References
                                         to clauses and annexes are to Clauses and Annexes of this Agreement except where otherwise
                                         expressly stated.



		1.2.5	Reference
                                         to any document includes the same as varied, supplemented or replaced from time to time.



		1.2.6	References
                                         to any enactment include any re-enactments, amendments and extensions thereof.



		2.	APPOINTMENT
                                         OF MANAGERS



		2.1	From
                                         the Effective Date and continuing, unless and until terminated as provided herein, the
                                         Owners hereby appoint the Managers and the Managers hereby agree to act as managers of
                                         the Vessel.



		2.2	Subject
                                         to the terms and conditions contained herein, during the period of this Agreement, the
                                         Managers shall carry out the Management Services as agents for and on behalf of the Owners.
                                         The Managers shall have authority to take such actions as they may from time to time
                                         consider necessary or reasonable to enable them to perform their duties and obligations
                                         as set out in this Agreement in accordance with sound ship management practice within
                                         the limits of authority delegated to them hereunder. Without prejudice to the authority
                                         granted to the Managers in accordance with the foregoing provision, the Managers will
                                         keep the Owners fully informed about all such steps taken by the Managers.



		3.	MANAGEMENT
                                         SERVICES



		3.1	Crew
                                         Management



		3.1.1	The
                                         Managers shall provide suitably and adequately qualified and licensed Crew for the Vessel
                                         in accordance with any lawful requirements of the Owners and the provisions of the STCW
                                         95.



		3.1.2	The
                                         Managers shall be responsible for:



		(a)	selecting
                                         and engaging the Crew (subject to the provisions of Clause 3.1.6 below) for the Vessel
                                         including payroll arrangements, pension administration, and insurances for the Crew other
                                         than those mentioned in Clause 6;



		(b)	ensuring
                                         at all times the availability and supply of an adequate complement of Crew relative to
                                         the particular operational status of the Vessel;



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



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



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



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



		(g)	training
                                         the Crew and supervising their efficiency and competence;



		(h)	[whenever
                                         the Vessel is operational, issuing instructions to the Master in accordance with the
                                         requirements of the Charterers, to trade along the most geographically direct, economical
                                         and safe route (except for any justifiable deviation allowed under English common law
                                         or the Hague Visby Rules and including all deviations that may be necessary in an Emergency
                                         Situation) and ensuring the Vessel is worked at a fuel-efficient speed consistent both
                                         with port arrival instructions given by the Owners and/or Charterers and with sea conditions;]



		(i)	issuing
                                         instructions to the Master to keep full and correct log books and furnishing the Owners
                                         with true and accurate copies of such log books when required;



		(j)	ensuring
                                         at all times compliance with the ITF requirements of minimum wage for the Crew and conducting
                                         union negotiations (if applicable);



		(k)	operating
                                         a drug and alcohol policy, prepared by the Managers and approved by the Owners (such
                                         approval not to be unreasonably withheld or delayed); such policy to include as a minimum
                                         the OCIMF guidelines for the control of drugs and alcohol on board the Vessel; and



		(l)	attendance
                                         to all matters pertaining to welfare and amenities.



		3.1.3	The
                                         Managers shall appoint a superintendent to advise on the operation, maintenance and repair
                                         of the Vessel, the cost of which shall be included in the Management Fee. Should the
                                         Owners have reason to be dissatisfied with the superintendent so appointed, they shall
                                         raise their complaint with the Managers. The Managers shall investigate any such complaint
                                         promptly and, should the complaint prove to be well founded, the Managers shall replace
                                         such superintendent at no extra cost to the Owners.



		3.1.4	Should
                                         the Owners have any reason to be dissatisfied with any of the Crew, they shall raise
                                         their complaint with the Managers. The Managers shall investigate the complaint promptly
                                         and, should the complaint be well founded, the Managers shall replace the Crew member
                                         in question and undertake changes in the appointment of the Crew as the Owners may reasonably
                                         require.
	 	 	 




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		3.1.5	For
                                         the avoidance of doubt, the Managers shall be empowered to conclude or enter into contracts
                                         of employment with the Crew for and on behalf of the Owners, subject to Owner’s
                                         prior approval of such contracts of employment.. [and shall indemnify and hold harmless
                                         the Owners against all actions, proceedings, claims, demands or liabilities whatsoever
                                         and howsoever arising from the Managers’ breach of this Clause 3.1.5 or in relation
                                         to any disputes relating to Crew contracts of employment.]



		3.1.6	Notwithstanding
                                         Clause 3.1.2(a), the Managers may not appoint any Senior Officer without the prior approval
                                         of the Owners (which shall not be unreasonably withheld or delayed), except that in the
                                         event that a shortage of Senior Officers would be likely to result:



		(a)	in
                                         the Vessel going off hire under its Charter; or



		(b)	an
                                         Emergency Situation;



and
in such circumstances it is not practical for the Managers to wait for Owners approval, the Managers may make such temporary appointments
as they deem necessary. The Owners reserve the right to interview all candidates for Senior Officer positions.


		3.2	Technical
                                         Management



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



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



		(b)	all
                                         maintenance and work for the Vessel so as to ensure that the Vessel complies with the
                                         law of the flag of the Vessel and of the places where she trades and all requirements
                                         and recommendations of the classification society;



		(c)	preparing
                                         the Maintenance Schedule and an annual update thereto (such update to be submitted each
                                         year on or around the anniversary upon which the Vessel was classified by its classification
                                         society) for approval by the Owners (such approval not to be unreasonably withheld or
                                         delayed);



		(d)	subject
                                         to Owners consent and approval, arrangement and supervision of dry dockings, repairs,
                                         alterations and the upkeep of the Vessel in accordance with sound ship management practice,
                                         provided that the Owners shall allocate sufficient funds and approve the relevant Annual
                                         Budget to ensure that Managers can incur the necessary expenditure, to ensure that the
                                         Vessel will comply with the law of the flag of the Vessel and of the places where she
                                         trades, and all requirements and recommendations of the classification society;



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		(e)	investigating
                                         and reporting to Owners any technical faults or problems material to the operation and
                                         performance of the Vessel and arranging for their satisfactory repair in consultation
                                         with the Owners;



 


		(f)	arrange
                                         for the victualling and storing of the Vessel appropriate to the declared operational
                                         status of the Vessel and place and effect payment for contracts for nitrogen, fuel, lubricating
                                         oil, paints and all consumable materials where they are not for the Charterers’ account,
                                         together with any other contracts that may be agreed with the Owners from time to time
                                         in accordance with Clause 3.2.2;



 


		(g)	appointment
                                         of surveyors and technical consultants as the Managers may consider from time to time
                                         to be necessary or reasonable.



 


		(h)	development,
                                         implementation of and maintenance of a SMS and obtaining and maintaining valid certificates
                                         evidencing compliance with this Clause, including without limitation, a valid document
                                         of compliance in relation to itself and a valid safety management certificate in respect
                                         of the Vessel as required by the ISM Code;



 


		(i)	provide
                                         the Owners with copies of any and all documents of compliance and safety management certificates
                                         as described in Clause 3.2.1(h) upon issuance;



 


		(j)	keep
                                         or procure that there is kept on board the Vessel at all times a copy of all documents
                                         of compliance and the original of any such safety management certificates as described
                                         in Clause 3.2.1(h);



 


		(k)	arrangement
                                         of periodic analysis by third parties of the bunker fuel and reporting the results of
                                         such analysis to the Owners (the costs being included in the Vessel’s running costs);



 


		(l)	noting
                                         requirements resulting from safety and any external ship inspections and implementing
                                         these insofar as they affect the safety and operation of the Vessel (such implementation
                                         to be at the Owners’ expense);



 


		(m)	implementing
                                         safety recommendations issued in terms of all international conventions and amendments
                                         (at the Owners’ expense);



 


		(n)	arrange,
                                         where necessary or as and when required by the Owners for the superintendent or other
                                         staff of the Managers to visit the Vessel;



 


		(o)	ensure
                                         that maritime, safety and cargo custody standards are in accordance with sound international
                                         chemical tanker shipping practice and are maintained by the Crew whenever such personnel
                                         are serving on board the Vessel;



 


		(p)	arrange
                                         and effect payment on behalf of the Owners for the towage of the Vessel when appropriate;



 






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		(q)	arrange,
                                         maintain and effect payment on behalf of the Owners for suitable moorings for the Vessel
                                         for lay-up at such locations as may from time to time be mutually agreed relative to
                                         the Vessel’s positioning requirements of the Owners;



 


		(r)	handle
                                         port disbursement accounts where these are not for the Charterers’ account;



 


		(s)	manage
                                         and operate the Vessel on behalf of the Owners in any part of the world, provided that
                                         the Vessel shall only be employed in lawful trades, as the Owners may direct, between
                                         good and safe ports and place where she can always be safely afloat, and further provided
                                         that the Vessel shall not trade to ports or areas where, at the time in question, there
                                         are expected to be or may be hostilities, wars, warlike operations, civil commotions
                                         or revolutions, unless with Managers’ prior written agreement, which shall not be unreasonably
                                         withheld or delayed.



 


		(t)	Approval
                                         by the Owners of any extraordinary and/or non-budgeted expenditure in excess of US$5,000.



 


Managers
shall at all times have the right to refuse to carry out any instructions from the Owners or the Charterers to trade or lay up
the Vessel if Managers can clearly demonstrate that by doing so, it would contravene any applicable laws and regulations of the
Vessel’s flag, the classification society or of the places she trades.


 


Furthermore,
Managers shall not be held to be in breach of this Agreement, or shall be liable to the Owner in any
respect should at any time the Vessel fail to conform to its class standards or fail to conform to statutory or international
standards, except to the extent that such failures result from the gross negligence or breach of this Agreement
by the Managers.


  


		3.2.2	Procurement



 


Subject
to the terms of this Agreement, the Managers shall have discretion to procure all stores, spares, equipment, provisions, oils,
fuels and any other goods, materials or services to be supplied to the Vessel by the Managers in performance of its Management
Services from whatever source or supplier it may deem appropriate provided that:


 


		(a)	the
                                         Managers use all reasonable efforts to achieve the lowest prices available; and



 


		(b)	the
                                         Owners are provided with on-line electronic link to Managers’ procurement system giving
                                         the Owners access to all relevant information including but not limited to correspondence
                                         with the Vessel and/or sources and or suppliers, orders and invoices; and



 






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		(c)	the
                                         Owners reserve the right to require the Managers to procure such goods, materials and
                                         services from sources or suppliers it may notify to the Managers from time to time provided
                                         that:



 


		(i)	the
                                         Owners shall not unreasonably interfere with the aforementioned Managers’ procurement
                                         processes;



 


		(ii)	the
                                         Owners may not force the Managers to breach the terms of any existing procurement contract;
                                         and



 


		(iii)	the
                                         Owners have due regard to the interests of the Managers in fostering good long-term relationships
                                         with suppliers;



 


and
where the Owners utilise its rights under this Clause 3.2.2(c) against the recommendation of the Managers, the Managers shall
in no circumstances be liable for the quality of the goods, materials and services so provided.


 


		3.3	Accounting,
                                         Budgeting, and Reporting



 


		3.3.1	The
                                         Managers shall:



 


		(a)	provide
                                         an accounting system in respect of the Vessel which meets the reasonable requirements
                                         of the Owners and in the form set out in Annex “E” and provide regular accounting
                                         services and supply regular accounting reports and records; and



 


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



 


		3.3.2	The
                                         Managers shall present to the Owners annually a budget in respect of the estimated costs
                                         of operating the Vessel for the following twelve months as the Owners (acting reasonably)
                                         require in the form set out in Annex “F” (the “Annual Budget”).
                                         The initial Annual Budget shall be for the period from the Effective Date to the Review
                                         Date with twelve (12) month Annual Budgets thereafter ending on the anniversary date
                                         of the Effective Date. The initial Annual Budget has been approved by the Owners and
                                         is attached hereto at Annex “C”. Subsequent Annual Budgets shall be prepared
                                         by the Managers for approval by the Owners not less than three (3) months before the
                                         anniversary date of the Effective Date.



 


		3.3.3	The
                                         Owners shall indicate to the Managers their acceptance and approval of the Annual Budget
                                         within one month of presentation and in the absence of any such indication the Managers
                                         shall be entitled to assume that the Owners have accepted the Annual Budget as provided.
                                         However should the Owners indicate to the Managers that they do not accept and approve
                                         the Annual Budget and the parties cannot mutually agree an amended budget within ten
                                         (10) days of the Owners non approval then the Owners shall have the right to terminate
                                         this Agreement by giving the Managers sixty (60) days written notice.



 






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		3.3.4	If
                                         after the approval of the Annual Budget pursuant to Clauses 3.3.2 and 3.3.3, the Owners
                                         or Managers anticipate material changes in the Operational Costs (or in respect of the
                                         initial Annual Budget set out in Annex “C”, if the Managers believe such initial
                                         Annual Budget is inaccurate or unworkable), then the Managers shall prepare a supplementary
                                         budget reflecting such changes (the “Supplementary Budget”) for
                                         approval by the Owners and the Owners shall indicate their approval or non-approval of
                                         a Supplementary Budget within fifteen (15) Working Days of it being presented to them
                                         (and in the absence of any such indication, the Managers shall be entitled to assume
                                         that the Owners have accepted a Supplementary Budget. Upon approval by the Owners, a
                                         Supplementary Budget shall be treated as the Annual Budget for the year in question or
                                         the remainder thereof. However should the Owners indicate that they do not approve the
                                         Supplementary Budget, then the Owners shall have the right to terminate this Agreement
                                         by giving the Managers sixty (60) days written notice.



 


		3.3.5	For
                                         the avoidance of doubt, the Managers shall not incur expenditure in respect of the Vessel
                                         in excess of the Annual Budget (with due consideration to the fact that expenditure may
                                         be phased over varying periods or may fluctuate from month to month, notwithstanding
                                         that such expenditure was budgeted for in the Annual Budget) or incur expenditure that
                                         has not been accounted for in any Annual Budget without the prior consent of the Owners
                                         (which shall not be unreasonably withheld or delayed).



 


		3.3.6	The
                                         Managers shall:



 


		(a)	by
                                         the fifteenth (15th) Working Day of the month provide the Owners with a Vessel
                                         Condition Report in respect of the previous month in such form as the Owners (acting
                                         reasonably) may require;



 


		(b)	by
the fifteenth (15th) Working Day of [July], the Managers shall provide the Owners with a Vessel Condition Report in
respect of the previous 6 months (or in the first year of this Agreement the period between the Effective Date and the fifteenth
(15th) Working Day of [July]), in such form as the Owners (acting reasonably may require);



 


		(c)	by
                                         the fifteenth (15th) Working Day of each month provide the Owners with a comparison
                                         between the budgeted Operational Costs as set out in the Annual Budget and actual Operational
                                         Costs in respect of the previous month (in accordance with the form set out in Annex “E”) In addition the Managers shall provide a narrative report on such comparisons
                                         on a monthly basis.;



 


		(d)	by
                                         the fifteenth (15th) Working Day of each month provide the Owners with a request
                                         for funds based upon an estimate of the funding requirements of the Vessel that are required
                                         in respect of the next month together with any requests for approval of expenditure pursuant
                                         to Clause 3.3.5 and any proposed amendments to the Annual Budget pursuant to Clause 3.3.4.



 






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		3.4	Health
                                         and Safety and Environmental Protection



 


		3.4.1	The
                                         Managers shall operate a management system to comply, and to ensure that the Vessel and
                                         the Crew comply, with all applicable health, safety and environmental laws and regulations
                                         and nothing in this Clause 3.4 shall derogate from the obligations of Managers to comply
                                         with its statutory responsibilities insofar as they relate to the other Management Services.



 


		3.4.2	The
                                         Managers shall, in relation to all persons affected or likely to be affected by the execution
                                         of the Management Services, take such steps as are reasonably practicable to ensure their
                                         health and safety.



 


		3.4.3	The
                                         Managers shall make available for inspection by the Owners at all reasonable times all
                                         registers, records and other documentation concerning health and safety and/or environmental
                                         matters relating to the Management Services.



 


		3.4.4	At
                                         the Owner’s request, the Managers shall send to the Owners a copy of every notice
                                         or other communication received from or sent to any person or body concerning health
                                         and safety and/or environmental matters relating to the Management Services and shall
                                         co-operate with the Owners in respect of all such health and safety and/or environmental
                                         matters.



 


		3.4.5	The
                                         Managers shall use their reasonable endeavours to prevent noxious or offensive emissions
                                         (including noise) from the Vessel.



 


		3.4.6	The
                                         Managers shall not treat, keep or dispose of any waste produced and/or carried by the
                                         Managers as a result of the Management Services in a manner likely to cause harm to the
                                         health and safety of any person or harm to the environment (as far as the same may be
                                         reasonably practical) and shall comply with every statutory duty which is relevant.



 


		3.4.7	During
                                         the execution of the Management Services, the Managers shall take such steps as are reasonably
                                         practicable to avoid (or where avoidance is not possible, to minimise) harm to the environment.



 


		3.4.8	The
                                         Managers will prepare and obtain all necessary approvals for a SOPEP. The SOPEP will
                                         be written in the English language and will be reviewed and updated from time to time.
                                         If required, the Managers will arrange for the translation of the SOPEP into another
                                         language. The Managers will also undertake regular training of the Crew in the use of
                                         SOPEP including drills to ensure that the SOPEP functions as expected and that contact
                                         and information details specified are accurate.



 


		3.4.9	The
                                         Managers shall prepare a HSE Report in such form and detail as the Owners (acting reasonably)
                                         require, to be submitted to the Owners on the fifteenth (15th) Working Day
                                         of [April, July, October and January] of each year of this Agreement in respect of the
                                         previous three (3) months.



 






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		3.5	Operations



 


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



 


		3.5.2	[Monitoring
                                         voyage instructions and liaising as appropriate with the Owners, the Owners’ brokers
                                         and charterers.]



 


		3.5.3	[Appointment
                                         of agents.]



 


		3.5.4	[Appointment
                                         of mooring line/terminal/dock workers, tug boats and pilots for whose acts, failures
                                         and/or omissions the Managers shall remain directly responsible even if such third parties
                                         are employed and paid for by Charterers and the Managers hereby indemnify the Owners
                                         against all losses, claims, responsibilities and liabilities arising in any way whatsoever
                                         from the appointment or employment of such third parties who although employed by Charterers
                                         shall be deemed to be the servants of the Managers.]



 


		3.5.5	[Arrangement
                                         of surveying of cargoes.]



 


		3.6	Insurance
                                         Arrangements



 


		3.6.1	If
                                         required by the Owners, the Managers shall arrange insurances in accordance with Clause
                                         6, on such terms and conditions as the Owners shall have instructed or agreed, in particular
                                         regarding conditions, insured values and deductibles.



 


		3.6.2	The
                                         Managers shall immediately inform and keep the Owners informed of any incident which
                                         gives or may give rise to claims or disputes relating to the insurances effected in accordance
                                         with Clause 6.



 


		3.6.3	The
                                         Owners shall in their sole discretion instruct the Managers on a case-by-case basis and
                                         in consultation with the Owners to, handle and/or settle all insurance, average and salvage
                                         claims in connection with the Vessel. Any external costs reasonably incurred by the Managers
                                         in handling or settling claims in accordance with this Clause shall be paid by or for
                                         the account of the Owners. Until notified to the contrary, the Managers shall handle
                                         all insurance claims in respect of the Vessel including but not limited to claims relating
                                         to the Crew, the cargo or damage to third parties.



 


		3.7	Sale
                                         or Purchase of the Vessel



 


The
Managers shall, if requested, provide Owners with technical assistance in connection with any sale of the Vessel. Any reasonable
external costs or out-of-pocket expenses incurred by the Managers in providing such technical/legal assistance shall be paid by
or for the account of the Owners provided that the Managers supply the Owners with the appropriate supporting vouchers and/or
in other such evidence to such costs and expenses. The Owners will, however, be solely responsible for agreeing the terms of any
agreement regulating any sale of the vessel.


 






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		3.8	General
                                         Administration



 


		3.8.1	[The
                                         Owners shall, in their sole discretion and upon such terms and conditions as the Owners
                                         shall specify, instruct the Managers on a case-by-case basis to, handle and/or settle
                                         all claims relating to the Vessel including but without limitation any claims involving
                                         the Charterers.]



 


		3.8.2	The
                                         Managers shall keep the Owners informed regarding any incident of which the Managers
                                         become aware which gives or may give rise to claims or disputes involving the Charterers
                                         or other third parties.



 


		3.8.3	[The
                                         Owners shall, in their sole discretion instruct the Managers on a case-by-case basis
                                         to, bring or defend actions, suits or proceedings in connection with matters entrusted
                                         to the Managers pursuant to this Agreement.]



 


		3.8.4	[Subject
                                         to Clause 3.8.1, the Managers shall have power to obtain legal, technical or other outside
                                         expert advice in relation to the handling and settlement of any claims and disputes or
                                         all other matters affecting the interests of the Owners in respect of the Vessel.]



 


		3.8.5	[The
                                         Owners shall arrange for the provision of any necessary guarantee bond or other security
                                         in connection with any such claims.]



 


		3.8.6	[Any
                                         external costs reasonably incurred by the Managers in carrying out their obligations
                                         in accordance with this Clause 3.8 shall be paid by or for the account of the Owners
                                         provided that the Owners have instructed the Managers in accordance with Clause 3.8.1.]



 


		4.	MANAGERS’
                                         OBLIGATIONS



 


		4.1	The
                                         Managers shall provide the agreed Management Services as agents for and on behalf of
                                         the Owners in a timely and efficient manner in accordance with sound ship management
                                         practice and to protect and promote the interests of the Owners in all matters relating
                                         to the provision of the Management Services hereunder.



 


		4.2	The
                                         Managers shall procure that the requirements of the law of the flag of the Vessel are
                                         satisfied and they shall in particular be deemed to be the “Company” as defined
                                         by the ISM Code, assuming the responsibility for the operation of the Vessel and taking
                                         over the duties and responsibilities imposed by the ISM Code when applicable.



 


		4.3	In
                                         addition to the specific obligations to keep the Owners informed hereunder, the Managers
                                         shall keep the Owners informed of all relevant information regarding the Vessel and the
                                         performance of the Management Services which the Owners may, acting reasonably, specify
                                         from time to time.



 


		4.4	When
                                         the Manager becomes aware of an Emergency Situation, it shall immediately contact the
                                         Owners and keep the Owners informed in respect of such Emergency Situation.



 






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		4.5	If,
                                         in an Emergency Situation, the Managers (and/or the Master) are required
                                         pursuant to this Agreement to solicit an approval from the Owners, but in such circumstances
                                         it is not practical to wait for such approval, then notwithstanding any other term in
                                         this Agreement, the Managers (and/or the Master) may take whatever action
                                         they may deem necessary to deal with such Emergency Situation.[The Owner’s agree
                                         to be bound by any such decision.]



 


		5.	OWNERS’
                                         OBLIGATIONS



 


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



 


		5.2	The
                                         Owners shall provide prompt responses to any requests made by the Managers pursuant to
                                         this Agreement.



 


		5.3	The
                                         Owners shall (subject to any confidentiality restrictions) provide the Managers with
                                         any relevant information relating to Charters or Charterers and shall notify the Managers
                                         upon a change of Charterers or upon any new Charter in respect of the Vessel.



 


		5.4	The
                                         Owners shall use best endeavours (and subject to any confidentiality restrictions) to
                                         ensure that the Charterers shall keep the Managers informed of the relevant terms of
                                         any supply contract, charter party, contract of affreightment, contract of insurance
                                         and any other document relating to the Vessel and its cargo that the Managers may reasonably
                                         require in order to perform their obligations hereunder.



 


		6.	INSURANCE
                                         POLICIES



 


		6.1	The
                                         Owners shall procure, by instructing the Managers or otherwise, that throughout the period
                                         of this Agreement:



 


		(i)	at
                                         the Owners’ expense, the Vessel is insured for usual hull and machinery marine risks
                                         (including crew negligence) and war risks in accordance with the best practice of prudent
                                         owners of vessels of a similar type to the Vessel, with first class insurance companies,
                                         underwriters or associations;



 


		(ii)	at
                                         the Owners’ expense, the Vessel is insured against Protection and Indemnity risks (including
                                         pollution risks and Crew Insurances) and arrange for the Managers to be included as named
                                         co-assured, and provide the Managers with Certificates of Entry to evidence that such
                                         insurances have been effected;



 


		(iii)	at
                                         the Owners’ expense, the Vessel carries a Certificate of Financial Responsibility as
                                         required by the United States Offshore Pollution Act 1990 and is insured against such
                                         other risks (including Freight, Demurrage and Defence) that are appropriate to the Vessel’s
                                         trade.



 


		(iv)	all
                                         premiums and calls on the Owners’ Insurances are paid promptly by their due date;



 


		(v)	the
                                         Owners’ Insurances name the Owners and the Managers as co-assured, with full cover, with
                                         the Owners obtaining cover in respect of each of the insurances specified in Clause 6.1
                                         on terms whereby the Owners are liable in respect of premiums or calls arising in connection
                                         with the Owners’ Insurances; and



 



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



 


		6.2	Insofar
                                         as it affects the superintendent and other shore staff employed by the Managers in connection
                                         with this Agreement, the Managers shall procure and maintain at their own expense appropriate
                                         insurance cover with first class insurers in respect of death, disease or injury to such
                                         superintendents or shore staff, and such insurance shall comply with all applicable law
                                         and shall contain a waiver of the insurer’s subrogation rights.



 


		7.	MANAGEMENT
                                         FEE



 


		7.1	Subject
                                         to any adjustment in accordance with the provisions of Clause 7.2 the Owners shall pay
                                         to the Managers for the provision of Management Services, an annual management fee of
                                         One Hundred and Fifty Five Thousand Dollars (US$155,000) (the “Management
                                         Fee”) which shall be paid by quarterly instalments in advance, the first
                                         payment in respect of the first quarter of this Agreement being payable within seven
                                         (7) Working Days of the Effective Date and subsequent instalments being payable by the
                                         fifteenth (15th) Working Day of each applicable quarter provided that where
                                         a payment is due in respect of any part of a quarter that payment shall be paid on a
                                         pro-rata basis, such sums to be paid into the Managers’ Account.



 


The
Management Fee is payable as from the date one month prior to the ’Effective Date’, i.e. one month prior to the date
that the vessel is delivered to the Owners.


 


		7.2	If,
                                         during any calendar month, the Vessel is in:



 


		(i)	“deep”
                                         lay-up (that is with sea chests sealed off and all systems drained down) the Management
                                         Fee shall be Dollars U S 1,500 (U.S. Dollars One Thousand Five Hundred only) per month
                                         and pro rata in respect of any part month; or



 


		(ii)	a
                                         partially manned stand-by condition, during a period of lay-up (other than deep lay-up)
                                         or during reactivation periods or during any period where the Managers are preparing
                                         to take over management of the Vessel from a third party the Management Fee shall be
                                         Dollars U S 3,000/- (U.S. Dollars Three Thousand Only) per month and pro rata in respect
                                         of any part month.



 


		7.3	The
                                         Management Fee is exclusive of value added tax and any other sales or services tax that
                                         that may be applicable. The Managers warrant that at the Effective Date, no such taxes
                                         are payable in respect of the Management Fee under English Law.



 






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		7.4	In
                                         the event of this Agreement being terminated by the Owners or the Managers in accordance
                                         with the provisions of Clause 17.3 or 17.4, the Management Fee payable to the Managers
                                         according to the provisions of Clauses 7.1 and/or 7.2, shall continue to be payable for
                                         a further period of three calendar months as from the termination date. In addition,
                                         provided that the Managers provide Crew for the Vessel in accordance with Clause 3.1:




 


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



 


		(ii)	the
                                         Owners shall pay any reasonable Severance Costs which may materialise provided the Managers
                                         have used reasonable endeavours to mitigate such obligations to the Crew.



 


		7.5	Unless
                                         otherwise agreed in writing all discounts and commissions obtained by the Managers in
                                         the course of the management of the Vessel shall be credited to the Owners.



 


		7.6	If
                                         the Managers’ superintendents or other staff spend more than 15 days visiting the Vessel
                                         in any calendar year, (or pro rata for part of a calendar year), including
                                         time spent travelling, visits and travelling time in excess of 15 days shall be charged
                                         at the rate of US$750 per day.



 


Furthermore,
it is agreed that if accidents, major repair works or other extraordinary circumstances increase Managers workload beyond what
could have been reasonably expected, the Owner will pay a reasonable additional remuneration to the Manager taking into consideration
any superintendence attendance fee recovered from underwriters.


 


		8.	VESSEL
                                         EXPENSES



 


		8.1	Upon
                                         receipt of a request for funds for the Vessel pursuant to Clause 3.3.6(d) the Owners
                                         shall pay such funds into the Vessel Account, provided that such request is made in respect
                                         of items and amounts accounted for in the Annual Budget.



 


		8.2	In
                                         the event that the Managers request funds from the Owners pursuant to Clause 3.3.6(d)
                                         but the Owners are not obliged to pay such funds pursuant to Clause 8.1, then the Owners
                                         may refuse to provide such funds provided that, in such circumstances, the Managers shall
                                         not be liable for any losses or damages incurred by the Owners as a result of such refusal
                                         and in any event, the Owners shall not unreasonably refuse to pay or delay the payment
                                         of such sums.



 


		8.3	All
                                         sums payable by the Owners in respect of requests made by the Managers pursuant to Clauses
                                         8.1 and 8.2 shall be paid into the Vessel Account by the end of the calendar month in
                                         which such request was made.



 


		8.4	The
                                         Managers shall open the Vessel Account and communicate the details of the Vessel Account
                                         to the Owners prior to the Effective Date. The Vessel Account shall be an account that
                                         only contains monies payable into such Vessel Account pursuant to this Agreement. All
                                         monies paid into the Vessel Account (including interest, if payable) shall be held on
                                         trust for and to the credit of the Owners and the Managers may only utilise funds in
                                         the Vessel Account for the proper performance of the Management Services hereunder. The
                                         Managers shall provide full details of all transactions in relation to the Vessel Account
                                         and shall procure that monthly Vessel Account bank statements are provided to the Owners
                                         for each month of this Agreement.



 


		8.5	For
                                         the avoidance of doubt Communication Expenses, General Expenses and EDP Expenses shall
                                         be for the account of the Owners and paid into the Vessel Account as a monthly lump sum
                                         amount. The Managers shall, at no extra cost to the Owners, provide their own office
                                         accommodation, office staff, office equipment and facilities.



 






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



 


		9.	MANAGERS’
                                         RIGHT TO SUB-CONTRACT



 


		9.1	The
                                         Managers shall not have the right to sub-contract any of their obligations in this Agreement,
                                         without the prior written consent of the Owners.



 


		9.2	Notwithstanding
                                         any sub-contract the Managers shall remain fully liable for the due performance of their
                                         obligations under this Agreement.



 


		10.	RESPONSIBILITIES



 


		10.1	Force
                                         Majeure



 


		10.1.1	Neither
                                         the Owners, nor the Managers shall be liable for any loss or damage or total or partial
                                         failure to perform this Agreement (other than a failure to perform an obligation to pay
                                         money) caused wholly or partly by any circumstances or things beyond the reasonable control
                                         of the Owners or the Managers, as the case may be, including (without limiting the generality
                                         of the foregoing) acts of God, fires, floods, epidemics, quarantine restrictions, wars,
                                         insurrections, riots, violent demonstrations, acts and omissions of civil or military
                                         authority or of usurped power, requisition or hire by any governmental or other competent
                                         authority and embargoes.



 


		10.1.2	The
                                         party invoking force majeure will advise the other party of the force majeure event at
                                         the earliest opportunity and also advise same party of the likely duration of such force
                                         majeure situation.



 


		10.2	Liability
                                         to Owners



 


		10.2.1	[The
                                         Managers shall be under no liability to the Owners for any loss, damage, delay or expense,
                                         whether direct or indirect, (including but not limited to loss of profit arising out
                                         of or in connection with detention of or delay to the Vessel) in the course of performance
                                         of the Management Services UNLESS same is proved to have resulted from the breach of
                                         this Agreement, the negligence or wilful default of the Managers or their employees,
                                         or agents or sub-contractors employed by them in connection with the Vessel.]



 


		10.2.2	[Notwithstanding
                                         anything herein contained in the contrary, the Managers shall not be liable for any of
                                         the actions of the Crew, even if such actions are negligent, except only (i) to the extent
                                         that they are shown to have resulted from a failure by the Managers to discharge their
                                         obligations under Clause 3.1 and/or (ii) on each and every occasion that there is loss
                                         of time (whether by way of interruption in the Vessel’s service or from reduction in
                                         the Vessel’s performance or in any other manner) or other loss, damage, delay, liability
                                         or expense of whatsoever nature, whether direct or indirect, (including but not limited
                                         to loss of profit arising out of or in connection with detention of or delay to the Vessel)
                                         due to industrial action, refusal to sail, breach of orders or neglect of duty on the
                                         part of the Master, officers or crew; and/or (iii) any loss, damage, delay, fine or expense
                                         of whatsoever nature, whether direct or indirect (including but not limited to loss of
                                         profit arising out of or in connection with detention of or delay to the Vessel) arising
                                         out of or in connection with any smuggling incident by the Master, officers or crew.]



 






    	20



    	 



    

 


		10.2.3	[Notwithstanding
                                         anything herein contained in the contrary, the Managers shall be liable for any loss,
                                         damage, delay or expense of whatsoever nature, whether direct or indirect, (including
                                         but not limited to loss of profit arising out of or in connection with detention of or
                                         delay to the Vessel) arising out of or in connection with the nationality of the crew.]



 


		10.2.4	[without
                                         prejudice to sub-clause 10.1 the Managers shall be under no liability whatsoever to the
                                         Owners for any loss, damage, delay or expense of whatsoever nature, whether direct or
                                         indirect, (including but not limited to loss of profit arising out of or in connection
                                         with detention of or delay to the Vessel) and howsoever arising in the course of performance
                                         of the Management Services UNLESS same is proved to have resulted solely from the negligence,
                                         gross negligence or willful default of the Managers or their employees, or agents or
                                         sub-contractors employed by them in connection with the Vessel, in which case (save where
                                         loss, damage, delay or expense has resulted from the Managers’ personal act or
                                         omission committed with the intent to cause same or recklessly and with knowledge that
                                         such loss, damage, delay or expense would probably result) the Managers’ liability
                                         for each incident or series of incidents giving rise to a claim or claims shall never
                                         exceed a total of ten times the annual management fee payable hereunder.]



 


		10.2.5	[Without
                                         prejudice to Clause 10.1, the Managers shall be under no liability to the Owners for
                                         any loss, damage, delay or expense, whether direct or indirect (including but not limited
                                         to loss of profit arising out of or in connection with detention of or delay to the Vessel)
                                         arising in the course of performance of the Management Services UNLESS same is proved
                                         to have resulted from the negligence, gross negligence or wilful default of the Managers
                                         or their employees, or agents or sub-contractors employed by them in connection with
                                         the Vessel, in which case the Managers’ liability for each claim shall not exceed a total
                                         of ten times the annual management fee payable hereunder.  For the avoidance of
                                         doubt, such limit of liability shall not apply in the event of loss, damage, delay or
                                         expense whether direct or indirect (including but not limited to loss of profit arising
                                         out of or in connection with detention of or delay to the Vessel) which has been caused
                                         by or resulted from the Managers’ intentional act or omission or any act or omission
                                         committed recklessly and/or with knowledge that such loss, damage, delay or expense whether
                                         direct or indirect would probably result”.]



 


Without
prejudice to Clause 10.1, the Managers shall be under no liability whatsoever to the Owners for any loss, damage, delay or expense
of whatsoever nature, whether direct or indirect, (including but not limited to loss of profit arising out of or in connection
with detention of or delay to the Vessel) and howsoever arising in the course of performance of the Management Services.]


 






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			[UNLESS
                                         same is proved to have resulted solely from the negligence, gross negligence or wilful
                                         default of the Managers or their employees or agents, or sub-contractors employed by
                                         them in connection with the Vessel, in which case (save where loss, damage, delay or
                                         expense has resulted from the Managers’ personal act or omission committed with the intent
                                         to cause same or recklessly and with knowledge that such loss, damage, delay or expense
                                         would probably result) the Managers’ liability for each incident or series of incidents
                                         giving rise to a claim or claims shall never exceed a total of ten times the annual management
                                         fee payable hereunder for Basic Services.



 


			[Notwithstanding
                                         anything that may appear to the contrary in this Agreement, the Managers shall not be
                                         responsible for any of the actions of the Crew even if such actions are negligent, grossly
                                         negligent or wilful, except only to the extent that they are shown to have resulted solely
                                         from a failure to discharge their obligations under Clause 3.1 in which case their liability
                                         shall be limited in accordance with the terms of this Clause 10.]



 


		10.2.6	[Notwithstanding
                                         anything that may appear to the contrary in this Agreement, the Managers shall not be
                                         liable for any of the actions of the Crew, even if such actions are negligent, grossly
                                         negligent or willful, except only to the extent that they are shown to have resulted
                                         from a failure by the Managers to discharge their obligations under sub-clause 3.1, in
                                         which case their liability shall be limited in accordance with the terms of this Clause
                                         10..]



 


		10.2.7	[Notwithstanding
                                         anything herein contained in the contrary, the Managers shall not be liable for any of
                                         the actions of the crew, even if such actions are negligent, grossly negligent or wilful,
                                         except to the extent that they are shown to have resulted from a failure by the Managers
                                         to discharge their obligations under Clause 3.1, in which case the Managers’ liability
                                         for each claim /series of claims arising from same incident  shall not exceed
                                         a total of ten times the annual management fee payable hereunder.  For the avoidance
                                         of doubt, such limit of liability shall not apply in the event of loss, damage, delay
                                         or expense whether direct or indirect (including but not limited to loss of profit arising
                                         out of or in connection with detention of or delay to the Vessel) which has been caused
                                         by or resulted from the Managers’ intentional act or omission or any act or omission
                                         committed recklessly and/or with knowledge that such loss, damage, delay or expense whether
                                         direct or indirect would probably result”.]



 


		10.2.5	Without
                                         prejudice to Clause 10.1, the Managers shall be under no liability to the Owners for
                                         any loss, damage, delay or expense of whatsoever nature, whether direct or indirect (including
                                         but not limited to loss of profit arising out of or in connection with detention of or
                                         delay to the Vessel) and howsoever arising in the course of performance of the Management
                                         Services UNLESS same is proved to have resulted from the negligence, gross negligence
                                         or wilful default of the Managers or their employees, or agents or sub-contractors employed
                                         by them in connection with the Vessel, in which case (save where loss, damage, delay
                                         or expense has resulted from the Managers’ personal act or omission committed with
                                         the intent to cause same or recklessly and with the knowledge that such loss, damage,
                                         delay or expense would probably result) the Managers’ liability for each claim or series
                                         of claims arising from the same incident or series of incidents giving rise to a claim
                                         or claims shall not exceed a total of ten times the annual management fee payable hereunder. 
                                         



 






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		10.3	Indemnity



 


Except
to the extent and solely for the amount that the Managers would be liable under Clause 10.2, the Owners hereby undertake to keep
the Managers and their employees, agents and sub-contractors indemnified and to hold them harmless against all actions, proceedings,
claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them
arising out of or in connection with the performance of the Agreement, and against and in respect of all costs, losses, damages
and expenses (including legal costs and expenses on a full indemnity basis) which the Managers may suffer or incur (either directly
or indirectly) in the course of the performance of this Agreement.


 


		10.4	“Himalaya”



 


It
is hereby expressly agreed that no employee or agent of the Managers (including sub-contractors from time to time employed by
the Managers) shall in any circumstances whatsoever be under any liability whatsoever to the Owners for any loss, damage or delay
of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the
course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Clause
10, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defence and
immunity of whatsoever nature applicable to the Managers or to which the Managers are entitled hereunder shall also be available
and shall extend to protect every such employee or agent of the Managers acting as aforesaid and for the purpose of all the foregoing
provisions of this Clause 10 the Managers are or shall be deemed to be acting as agent or trustee on behalf of and for the benefit
of all persons who are or might be their servants or agents from time to time (including sub-contractors as aforesaid) and all
such persons shall to this extent be or be deemed to be parties to this Agreement.


 


		11.	DOCUMENTATION



 


		11.1	The
                                         Managers shall make available, upon Owners’ request, all documentation and records relating
                                         to the performance of the Management Services, the SMS and/or the Crew which the Owners
                                         require in order to demonstrate compliance with the ISM Code and STCW 95, or to defend
                                         or prosecute a claim against a third party or otherwise.



 


		11.2	All
                                         Vessel Data is and shall remain the property of the Owners and shall be made available
                                         to the Owners by the Managers on the Owners’ request. Upon termination of this Agreement
                                         for any reason, the Managers shall promptly provide the Owners with all the Vessel Data,
                                         whether onboard the Vessel or otherwise.



 


		11.3	The
                                         Managers shall retain and properly store all Vessel Data in accordance with sound ship
                                         management practice. If, in the Managers’ opinion, certain Vessel Data should be destroyed,
                                         then the Managers shall first offer to return that Vessel Data (at the Owners’ expense)
                                         to the Owners, and in the event that the Owners decline such offer, the Managers may
                                         destroy such Vessel Data.



 






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		12.	DEPLOYMENT
                                         OF THE VESSEL



 


		12.1	The
                                         Managers shall ensure that, during the term of this agreement, , the Crew of the Vessel
                                         shall comply with the Permanent Instructions.



 


		12.2	The
                                         Owners may change the terms of the Permanent Instructions, or upon the execution of a
                                         new Charter replace the existing Permanent Instructions with new Permanent Instructions
                                         with the consent of the Managers which shall not be unreasonably withheld or delayed.



 


		12.3	In
                                         the event that the Managers or the Crew receive instructions from the Charterers, that
                                         in the opinion of the Managers, conflict with instructions provided by the Owners or
                                         which go beyond the scope of authority of the Charterers (to the extent such scope of
                                         authority has been disclosed by the Owners to the Managers), the Managers shall immediately
                                         notify the Owners of the same. In such circumstances, the Owners’ instructions shall
                                         always take precedence over the Charters’ instructions.



 


		12.4	Except
                                         for the purposes of saving life, the Vessel shall not, unless expressly authorised by
                                         the Owners, undertake attempts of salvage.



 


		12.5	If:



 


		(i)	the
                                         Vessel undertakes attempts at salvage pursuant to Clause 12.4; or



 


		(ii)	the
                                         Vessel requests that a third party attempts salvage of the Vessel;



 


then
subject to Clause 4.5 and without prejudice to the Master of the Vessel’s overriding right to take whatever action he may deem
necessary to preserve life or prevent the loss of the Vessel, all salvage arranged shall be under the terms of the current “Lloyds
Open Form No Cure – No Pay” agreement.


 


		12.6	Any
                                         proceeds arising from salvage of third party property shall be for the benefit of the
                                         Owners.



 


		12.7	Notwithstanding
                                         any other provision of this Agreement, the Managers shall not (and shall procure that
                                         the Crew shall not), without the written consent of the Owners, sign any bill of lading
                                         on behalf of the Owners.



 


		13.	AUDITING



 


		13.1	The
                                         Managers shall prepare the Annual Budget and accounts (as referred to in Clause 3.3.1
                                         above) and shall make the same available for inspection and auditing by the Owners at
                                         such times as may be mutually agreed.



 


		13.2	Where
                                         staff or auditors of the Owners visit the premises of the Managers for the purpose of
                                         carrying out an audit, the Managers shall provide office space and facilities to such
                                         staff or auditors at no extra cost to the Owners.



 






    	24



    	 



    

 


		14.	INSPECTION
                                         OF VESSEL



 


		14.1	The
                                         Owners shall have the right at any time to inspect the Vessel for any reason they consider
                                         necessary.



 


		15.	COMPLIANCE
                                         WITH LAWS AND REGULATIONS ETC.



 


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



 


		16.	DURATION
                                         OF THE AGREEMENT



 


		16.1	This
                                         Agreement shall come into effect on the Effective Date and shall continue until terminated
                                         in accordance with Clauses 17 and 3.3.3 and 3.3.4 or otherwise provided for within the
                                         terms of this Agreement.



 


		17.	TERMINATION



 


		17.1	If
                                         the Managers:



 


		(i)	fail
                                         to meet any material obligation under this Agreement; or



 


		(ii)	fail
                                         to meet any obligation under this Agreement that has a material adverse effect upon the
                                         Owners;



 


then
the Owners may give notice to the Managers of the default, requiring them to remedy it (if such default is capable of being remedied)
as soon as practically possible. In the event that the default is not capable of being remedied or the Managers fail to remedy
the default within a reasonable time to the satisfaction of the Owners, the Owners shall be entitled to terminate this Agreement
by giving the Managers sixty (60) days’ written notice.


 


		17.2	The
                                         Owners may also terminate this Agreement by giving the Managers sixty (60) days’ written
                                         notice in the event that the Managers, in the reasonable opinion of the Owners, fail
                                         to manage the Vessel in accordance with sound ship management practice.



 


		17.3	The
                                         Managers shall be entitled to terminate the Agreement by notice in writing if any moneys
                                         payable by the Owners to the Managers have not been received into the Managers’ Account
                                         within sixty (60) days (excluding Saturdays, Sundays and public holidays) of payment
                                         having been requested in writing by the Managers.



 


		17.4	This
                                         Agreement shall be deemed to be terminated:



 


		(i)	in
                                         the case of the sale of the Vessel other than a sale or transfer to an Affiliate of the
                                         Owners; or



 


		(ii)	if
                                         the Vessel becomes a total loss or is declared as a constructive or compromised or arranged
                                         total loss or is requisitioned for hire.



 






    	25



    	 



    

 


		17.5	For
                                         the purpose of Clause 17.4 hereof:



 


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



 


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



 


		17.6	Either
                                         party shall be entitled to terminate this Agreement by giving notice in writing to the
                                         other party forthwith in the event of an order being made or resolution passed for the
                                         winding up, dissolution, liquidation or bankruptcy of the other party (otherwise than
                                         of the purpose of a solvent reconstruction or amalgamation) or if a receiver or similar
                                         officer is appointed of the whole or a material part of its assets or if it suspends
                                         payment, ceases to carry on business or makes any special arrangement or composition
                                         with its creditors.



 


		17.7	The
                                         Managers and the Owners shall each have the right to terminate this Agreement at any
                                         time and for any reason by giving the other party not less than three (3) months’ written
                                         notice of their intention to terminate this Agreement except that no such termination
                                         may be made pursuant to this Clause until eighteen (18) months after the Effective Date.
                                         This should be without prejudice to Manager, for failure to provide proper funding by
                                         Owners.



 


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



 


		18.	CONFIDENTIALITY



 


		18.1	Save
                                         for the purposes of enforcing or carrying out as may be necessary the rights or obligations
                                         of the Managers hereunder, the Managers agree to maintain and to use all reasonable endeavours
                                         to procure that their officers and employees maintain confidentiality and secrecy in
                                         respect of all information relating to the Owners’ business received by the Managers
                                         directly or indirectly pursuant to this Agreement.



 


		18.2	As
                                         between the Owners and the Managers, the Owners hereby agree and acknowledge that all
                                         title and property in and to the management manuals of the managers and other written
                                         materials of the managers concerning management functions and activities is vested in
                                         the Managers and the Owners agree not to disclose the same to any third party and, on
                                         the termination of this Agreement, to return all such manuals and other materials to
                                         the Managers. For the purposes of this Clause 18 reference to the “Managers”
                                         includes the parent, subsidiary and associated companies of the managers and any third
                                         parties providing Management Services.



 


		19.	MISCELLANEOUS



 


		19.1	A
                                         person who is not a party to this Agreement may not enforce, or otherwise have the benefit
                                         of, any provision of this Agreement under the Contracts (Rights of Third Parties) Act
                                         1999, but this provision does not affect any right or remedy of a third party which exists
                                         or is available apart from that Act.



 






    	26



    	 



    

 


		19.2	The
                                         Owner may at any time assign or transfer to an Affiliate its rights and obligations
                                         under this Agreement without the consent of the Managers.



 


		19.3	The
                                         Owner may at any time assign or transfer to a third party its rights and obligations
                                         under this Agreement provided that they first obtain the written consent of the Managers.
                                         Such consent shall not be unreasonably withheld and shall not be conditioned or delayed
                                         and the parties agree to promptly execute any novation or transfer documentation to give
                                         effect to such an assignment or transfer.



 


		20.	LAW
                                         AND ARBITRATION



 


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



 


		20.2	The
                                         arbitration shall be construed and conducted in accordance with the London Maritime Arbitrators
                                         Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.
                                         The language used for such arbitration shall be English and the arbitration shall be
                                         conducted in London.



 


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



 


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



 






    	27



    	 



    

 






	21.	NOTICES
                                         AND BANK ACCOUNTS
	 	 
	21.1	Any
                                         notice to be given by either party to the other party pursuant to this Agreement shall
                                         be in writing and shall be effective upon delivery pursuant to Clause 21.2 and shall
                                         be sent by fax, registered mail or by personal service to the following addresses:











 





for
the Owners:


 


[      ]


  


for
the Managers:


 


INTERNATIONAL
TANKER MANAGEMENT LTD. (ITM)


 


C/O
International Tanker Management Ltd., Dubai Branch


 


809
Executive Heights (Damac Bldg.), Tecom


 


P.O.
Box 24415, Dubai, United Arab Emirates


 


Fax
No: 00971-4-4403600


 


Tel.
No: 00971-4-4403605


 


Email:
itm.dubai@tankermanager.com


 


Attention:
Mr. Lars Modin


 


		21.2	Any
                                         notice given pursuant to this Agreement that is:



 


(i)          given
by personal service is deemed to be delivered at the time of delivery;


 


(ii)         sent
by registered mail is deemed to be served ten (10) days after posting; or


 


(iii)        sent
by fax is deemed to be received on the date of transmission.


 




    	28



    	 



    

  


		21.3	  For
                                         the purposes of this Agreement, the Managers’ Account currently has the following
                                         details:



 


	 	Account Holder	:	ITML-PYEP	 
	 	 	 	 	 
	 	Bank	:	Nordea Bank Finland PLC, London branch	 
	 	 	 	 	 
	 	Swift Code	:	NDEAGB2L	 
	 	 	 	 	 
	 	Account Number	:	50211080	]
	 	 	 	 	 
	 	Currency	:	U.S. Dollars	 









 


IN
WITNESS whereof the parties have duly signed this Agreement the day and year first above written.  





	 	 	 	 	 
	SIGNED for and on behalf	 	 	)
	of [	]	)	 	 
	by	 	 	 	)
	 	 	 	 	)
	in the presence of	 	 	)
	 	 	 	 	 
	SIGNED for and on behalf	 	 	)
	of INTERNATIONAL TANKER MANAGEMENT LTD.	)
	by	Lars Modin	 	 	)
	 	 	 	 	)
	in the presence of	 	 	)













 




    	29



    	 



    




 


ANNEX
“A” 


 


DETAILS
OF VESSEL 


	 	 
	Vessel Name	:
	Registered Owner	:
	Year Built	:
	Port of Registry	:
	Flag	:
	IMO No.	:
	Type	:
	DWT	:
	GRT	:
	Lightship	:
	Class	:
	P&I	: BRITANNIA







  




    	 



    	 



    




  


ANNEX
“B” 


 


DETAILS
OF CREW 


OFFICERS


  


RATINGS


 



    	 



    	 



    




  


ANNEX
“C” 


 


INITIAL
BUDGET 


 



    	 



    	 



    




 


ANNEX
“D” 


PERMANENT
INSTRUCTIONS] 


 


Note:
Not Applicable


 


 



    	 



    	 



    





 


ANNEX
“E” 


FORM
OF ACCOUNTING SYSTEM 


 



    	 



    	 



    




 


ANNEX
“F” 


FORM
OF BUDGET


  


 Note:
As per the Format of the Initial Budget