Exhibit 10.1


 



	
  

 
	
 COSTAMARE INC.

 
	
  

 
	
 - and -

 
	
  

 
	
 COSTAMARE SHIPPING COMPANY S.A.

 
	
  

 
	
 MANAGEMENT AGREEMENT

 






 











TABLE OF CONTENTS


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Page

 
	
  

 	
  

 	

 


 
	
  

 
	
 ARTICLE I INTERPRETATION

 	
  

 	
 1

 
	
 ARTICLE II APPOINTMENT

 	
  

 	
 5

 
	
 ARTICLE III THE PARENT’S GENERAL
 OBLIGATIONS

 	
  

 	
 7

 
	
 ARTICLE IV THE MANAGER’S GENERAL
 OBLIGATIONS

 	
  

 	
 8

 
	
 ARTICLE V ADMINISTRATIVE SERVICES

 	
  

 	
 10

 
	
 ARTICLE VI COMMERCIAL SERVICES

 	
  

 	
 13

 
	
 ARTICLE VII INSURANCE

 	
  

 	
 13

 
	
 ARTICLE VIII AVAILABILITY OF OFFICERS AND
 EMPLOYEES

 	
  

 	
 14

 
	
 ARTICLE IX MANAGEMENT FEES AND EXPENSES

 	
  

 	
 14

 
	
 ARTICLE X BUDGETS, CORPORATE PLANNING AND
 EXPENSES

 	
  

 	
 18

 
	
 ARTICLE XI LIABILITY AND INDEMNITY

 	
  

 	
 20

 
	
 ARTICLE XII RIGHTS OF THE MANAGER AND
 RESTRICTIONS ON THE MANAGER’S AUTHORITY

 	
  

 	
 21

 
	
 ARTICLE XIII TERMINATION OF THIS AGREEMENT

 	
  

 	
 23

 
	
 ARTICLE XIV NOTICES

 	
  

 	
 25

 
	
 ARTICLE XV APPLICABLE LAW

 	
  

 	
 26

 
	
 ARTICLE XVI ARBITRATION

 	
  

 	
 26

 
	
 ARTICLE XVII MISCELLANEOUS

 	
  

 	
 27

 
	
  

 	
  

 	
  

 
	
 APPENDIX I

 	
 Form of
 Shipmanagement Agreement

 	
  

 	
  

 
	
 APPENDIX II

 	
 Form of
 Supervision Agreement

 	
  

 	
  

 


-i-






THIS MANAGEMENT
AGREEMENT (this “Agreement”) is made on the       day of November, 2010, BY AND BETWEEN:


                    (1)
COSTAMARE INC., a company organized and existing under the laws of the Republic
of the Marshall Islands (the “Parent”); and


                    (2)
COSTAMARE SHIPPING COMPANY S.A., a company organized and existing under the
laws of the Republic of Panama (the “Manager”).


                    WHEREAS:


                    (A)
The Parent wholly owns (i) the corporations set out in Schedule A hereto, as
such Schedule A may be amended from time to time (the “Shipowning
Subsidiaries”), each of which owns one or more Container Vessels (as
defined below) (the “Vessels”) and (ii) the corporations set out in
Schedule B hereto, as such Schedule B may be amended from time to time
(together with the Shipowning Subsidiaries, the “Subsidiaries”).


                    (B)
The Manager has the benefit of experience in the technical and commercial
management of Container Vessels and administration of shipowning companies
generally.


                    (C)
The Parent and the Manager desire to adopt this Agreement, pursuant to which
the Manager shall represent the Group (as defined below) in its dealings with
third parties and either directly or through a Submanager (as defined below)
provide technical, commercial, administrative and certain other services to the
members of the Group as specified herein in connection with the management and
administration of the business of the members of the Group.


                    NOW,
THEREFORE, THE PARTIES HEREBY AGREE:


ARTICLE I


INTERPRETATION


                    SECTION
1.1. In this Agreement, unless the context otherwise requires:


                    “Affiliates”
means, with respect to any person as to any particular date, any other persons
that directly or indirectly, through one or more intermediaries, are Controlled
by, Control or are under common Control with the person in question, and
Affiliates means any of them.


                    “Agreement”
shall have the meaning set forth in the preamble.


                    “Annual
Period” shall have the meaning set forth in Section 9.2.


                    “Approved
Budget” shall have the meaning set forth in Section 10.3.






2


                    “Beneficial
Owner” has the meaning set forth in Rule 13d-3 under the Exchange Act. For
purposes of this definition, such person or group shall be deemed to
Beneficially Own any outstanding voting securities of a company held by any
other company (the “parent company”) that is Controlled by such person or
group. The term “Beneficially Own” and similar capitalized terms shall have
analogous meanings.


                    “Board
of Directors” means the board of directors of the Parent as the same may be
constituted from time to time.


                    “Business
Days” means a day (excluding Saturdays and Sundays) on which banks are open
for business in Athens, Greece; and New York, New York.


                    “Change
in Control of the Manager” means (a) a sale of all or substantially all of
the assets or property of the Manager necessary for the performance of the
Manager’s services under this Agreement, (b) a sale of the Manager’s shares
that would result in Konstantinos Konstantakopoulos Beneficially Owning,
directly or indirectly, less than 50.1% of the total voting power of the
outstanding voting securities of the Manager or (c) a merger, consolidation or
similar transaction, that would result in Konstantinos Konstantakopoulos
Beneficially Owning, directly or indirectly, less than 50.1% of the total
voting power of the outstanding voting securities of the resulting entity
following such transaction.


                    “Change
in Control of the Parent” means the occurrence of any of the following
events: (a) if any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act or any successor provisions to either of
the foregoing), including a group acting for the purpose of acquiring, holding,
voting or disposing of securities within the meaning of Rule 13d-5(b)(10) under
the Exchange Act (other than one or more Konstantakopoulos Entities)
(collectively, an “Acquiring Person”) becomes the Beneficial Owner, directly or
indirectly, of 40% or more of the total voting power of the outstanding voting
securities of the Parent, which voting power represents a higher percentage
than that of the Konstantakopoulos Entities, collectively; or (b) the approval
by the shareholders of the Parent of a proposed merger, consolidation or
similar transaction, as a result of which any Acquiring Person becomes the
Beneficial Owner, directly or indirectly, of 40% or more of the total voting
power of the outstanding voting securities of the resulting entity following
such transaction, which voting power represents a higher percentage than that
of the Konstantakopoulos Entities, collectively; or (c) a change in directors
after which a majority of the members of the Board of Directors are not
Continuing Directors.


                    “Consent
of the Parent” means the prior written consent of a majority of the
Independent Directors of the Parent.


                    “Container
Vessel” means any ocean-going vessel (whether in its construction phase or
operational) that is intended to be used primarily to transport containerized
cargoes.






3


                    “Continuing
Directors” means, as of any date of determination, any member of the Board
of Directors who (i) was a member of the Board of Directors immediately after
the Effective Date, or (ii) was nominated for election or elected to the Board
of Directors with the approval of a majority of the directors then still in
office or who were either directors immediately after the Effective Date or
whose nomination or election was previously so approved.


                    “Control”
or “Controlled” means, with respect to any person, the right to elect or
appoint, directly or indirectly, a majority of the directors of such person or
a majority of the persons who have the right, including any contractual right,
to manage and direct the business, affairs and operations of such person or the
possession of the power to direct or cause the direction of the management and
policies of a person, whether through ownership of voting securities, by
contract or otherwise.


                    “Crew”
shall have the meaning set forth in clause 1 of each Shipmanagement Agreement.


                    “Draft
Budget” shall have the meaning set forth in Section 10.1.


                    “Effective
Date” means the date upon which the initial public offering of the Parent
is consummated.


                    “Exchange
Act” means the U.S. Securities Exchange Act of 1934, as amended.


                    “Executive
Officers” means the Chief Executive Officer, the Chief Operating Officer
(if any) and the Chief Financial Officer of the Parent.


                    “Fixed
Period” shall have the meaning set forth in Section 9.2.


                    “Force
Majeure” shall have the meaning set forth in Section 11.1.


                    “Group”
means, at any time, the Parent and the Subsidiaries at such time taking into
account the Schedule A and Schedule B in effect at such time and “member of the
Group” shall be construed accordingly.


                    “Independent
Directors” means those members of the Board of Directors that qualify as
independent directors within the meaning of Rule 10A-3 promulgated under the
Exchange Act and the listing criteria of the New York Stock Exchange.


                    “Initial
Term” shall have the meaning set forth in Section 13.1.


                    “Konstantakopoulos
Entities” means:


	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Konstantinos
 Konstantakopoulos, Vasileios Konstantakopoulos, Christos Konstantakopoulos or
 Achillefs Konstantakopoulos; 

 










4



	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 any spouse
 or lineal descendant of any of the individuals set out in paragraph (a)
 above; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 any person
 Controlled by, or under common Control with, any such individual or
 combination of such individuals as set out in paragraphs (a) and (b) above.

 




                    “Management
Fee” shall have the meaning set forth in Section 9.1.


                    “Management
Services” shall have, in relation to a Vessel, the meaning set forth in
clause 1 of the Shipmanagement Agreement applicable to such Vessel.


                    “Manager”
shall have the meaning set forth in the preamble.


                    “Manager
Related Parties” shall have the meaning set forth in Section 11.2.


                    “Newbuild”
means a new vessel to be or which has just been constructed, or is under
construction, pursuant to a shipbuilding contract or other related agreement
entered into by the relevant member of the Group.


                    “Parent”
shall have the meaning set forth in the preamble.


                    “Questioned
Items” shall have the meaning set forth in Section 10.2.


                    “Related
Manager” means each of CIEL Shipmanagement S.A., Shanghai Costamare Ship
Management Co., Ltd. or any Affiliate of a Konstantakopoulos Entity appointed
as Submanager in accordance with the terms of this Agreement.


                    “Services”
shall have the meaning set forth in Section 2.3.


                    “Shipmanagement
Agreement” shall have the meaning set forth in Section 3.2.


                    “Shipowning
Subsidiaries” shall have the meaning set forth in the recitals.


                    “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.


                    “Submanager”
shall have the meaning set forth in Section 2.4.


                    “Subsequent
Term” shall have the meaning set forth in Section 13.1.


                    “Subsidiaries”
shall have the meaning set forth in the recitals.


                    “Supervision
Agreement” shall have the meaning set forth in Section 3.3.


                    “Term”
shall have the meaning set forth in Section 13.1.






5


                    “Vessels”
shall have the meaning set forth in the recitals.


                    SECTION
1.2. The headings of this Agreement are for ease of reference and do not limit
or otherwise affect the meaning hereof.


                    SECTION
1.3. All the terms of this Agreement, whether so expressed or not, shall be
binding upon the parties hereto and their respective successors and assigns.


                    SECTION
1.4. In the event of any conflict between this Agreement, any Shipmanagement
Agreement or any Supervision Agreement, the provisions of this Agreement shall
prevail.


                    SECTION
1.5. Unless otherwise specified, all references to money refer to the legal
currency of the United States of America.


                    SECTION
1.6. Unless the context otherwise requires, words in the singular include the
plural and vice versa.


                    SECTION
1.7. The words “include”, “includes” and “including” when used herein shall be
deemed in each case to be followed by the words “without limitation” and shall
not be construed to limit any general statement which it follows to the
specific or similar items or matters immediately following it.


                    SECTION
1.8. Any reference to “person” includes an individual, body corporate, limited
liability company, partnership, joint venture, cooperative, trust or
unincorporated organization, association, trustee, domestic or foreign
government or any agency or instrumentality thereof, or any other entity
recognized by law.


                    SECTION
1.9. Any reference to an enactment shall be deemed to include reference to such
enactment as re-enacted, amended or extended.


                    SECTION
1.10. Any reference to (or to any specified provision of) this Agreement or any
other document shall be construed as reference to this Agreement, that
provision or that document as in force for the time being and as amended in
accordance with the terms thereof, or, as the case may be, with the agreement
of the relevant parties.


                    SECTION
1.11. Any reference to clauses, appendices and schedules shall be construed as
reference to clauses of, appendices to and schedules to this Agreement and
references to this Agreement includes its appendices and schedules.


ARTICLE II


APPOINTMENT


                    SECTION
2.1. The Manager is hereby appointed by the Parent as the administrative
manager of the Group and hereby accepts such appointment on the terms and
conditions of this Agreement.






6


                    SECTION
2.2. The Manager shall be appointed by (a) each Shipowning Subsidiary pursuant
to the provisions of Section 3.3 hereof as the technical and commercial manager
of each such Shipowning Subsidiary’s Vessel on the terms and conditions of the
relevant Shipmanagement Agreement and this Agreement and (b) each member of the
Group to be acquiring a Newbuild, as the supervisor of the construction thereof
on the terms and conditions of the relevant Supervision Agreement and this
Agreement.


                    SECTION
2.3. The Manager agrees to provide:


	
  

 	
  

 
	
  

 	
           (a)
 the services specified in Articles V, VI, VII and VIII of this Agreement;

 
	
  

 	
  

 
	
  

 	
           (b)
 the services specified in each Supervision Agreement; and

 
	
  

 	
  

 
	
  

 	
           (c)
 the Management Services (as such term is defined in clause 1 of each
 Shipmanagement Agreement) in respect of each Vessel specified in each
 Shipmanagement Agreement (the services to be provided under Sections 2.3(a),
 2.3(b) and 2.3(c) collectively the “Services”).

 
	
  

 	
  

 
	
  

 	
 The Parent
 and the Manager each hereby agree that in the performance of this Agreement,
 any Supervision Agreement or any Shipmanagement Agreement, the Manager or, as
 the case may be, any Submanager, is acting solely on behalf of, as agent of
 and for the account of, the Parent or any other relevant member of the Group.
 The Manager or, as the case may be, the relevant Submanager may advise
 persons with whom it deals on behalf of the Parent or any other member of the
 Group that it is conducting such business for and on behalf of the Parent or,
 as the case may be, a member of the Group.

 



                    SECTION
2.4. The Manager may upon notice to the Parent appoint any person (a “Submanager”)
at any time throughout the duration of this Agreement to discharge any of the
Manager’s duties under this Agreement or a Shipmanagement Agreement or a
Supervision Agreement, provided that if such person is not a Related Manager,
the Manager shall obtain the written Consent of the Parent prior to such
appointment (such Consent of the Parent shall not be unreasonably withheld or
delayed). The Manager shall appoint a Submanager either by entering into a
management agreement or supervision agreement (such management agreement or
supervision agreement to be on terms to be agreed between the parties thereto
and only in respect of the services that the Manager wishes such Submanager to
discharge) directly with such Submanager (for the avoidance of doubt, unless
otherwise agreed in writing, no member of the Group shall have any
responsibility for any fees or costs incurred under any such management
agreement or supervision agreement) or by directing such Submanager to enter
into a management agreement or supervision agreement directly with the relevant
member of the Group (such management agreement or supervision agreement to be
on terms to be agreed between the parties thereto and only in respect of the
services that the Manager wishes such Submanager to discharge). Any Submanager
shall agree to the terms and conditions 





7


of this
Agreement to the extent applicable to it, prior to performing any services for
any member of the Group. The Parent shall procure that each member of the Group
shall provide written confirmation to the Manager or, as the case may be, a
Submanager, that such member’s Vessel is commercially and/or technically
managed by the Manager or, as the case may be, the relevant Submanager.


                    SECTION
2.5. The Manager’s power to delegate performance of any provision of this
Agreement, including delegation by directing a Submanager to enter into a
management agreement or supervision agreement directly with a member of the
Group in accordance with Section 2.4, shall not limit the Manager’s liability
to the Parent to perform this Agreement with the intention that the Manager
shall remain responsible to the Parent for the due and timely performance of
all duties and responsibilities of the Manager hereunder, PROVIDED HOWEVER,
that to the extent that any Submanager has performed any such duty, the Manager
shall not be under any obligation to perform again the same duty.


ARTICLE III


THE PARENT’S GENERAL OBLIGATIONS


                    SECTION
3.1. The Parent shall notify the Manager as soon as possible of any purchase of
any vessel (whether the same is a second-hand vessel or a Newbuild), the
delivery of any Newbuild from the relevant builder or intermediate seller to
the relevant member of the Group to take ownership of such Newbuild, the sale
of any Vessel, the purchase or creation of any direct or indirect subsidiary of
the Parent or the sale or divestiture of any Subsidiary and shall promptly
amend Schedule A and Schedule B hereto, as applicable, to be reflective of any
such development. Such amended Schedule A or Schedule B shall be effective on
any such day as mutually agreed by the Parent and the Manager, which date shall
be no later than five Business Days after delivery of such amended
Schedule A and/or Schedule B to the Manager by the Parent.


                    SECTION
3.2. For each Vessel the Parent shall cause the relevant Shipowning Subsidiary
to enter into with the Manager, and the Manager shall enter into with such
Shipowning Subsidiary, a contract substantially in the form attached hereto as
Appendix I (each a “Shipmanagement Agreement” and, collectively,
the “Shipmanagement Agreements”), with such alterations and additions as
are appropriate; PROVIDED HOWEVER, that any alterations or additions
which materially vary from such form shall require the approval of the Board of
Directors.


                    SECTION
3.3. For each Newbuild the Parent shall cause the relevant Shipowning
Subsidiary to enter into with the Manager, and the Manager shall enter into
with such Shipowning Subsidiary, a contract substantially in the form attached
hereto as Appendix II (each a “Supervision Agreement” and,
collectively, the “Supervision Agreements”), with such alterations and
additions as are appropriate; PROVIDED HOWEVER, that any alterations or
additions which materially vary from such form shall require the approval of
the Board of Directors.





8


                    SECTION
3.4. The Parent shall pay punctually all sums due to the Manager under this
Agreement, any Shipmanagement Agreement and/or any Supervision Agreement to
which the Manager is a party in accordance with the respective terms thereof.


                    SECTION
3.5. The Parent shall procure that each other member of the Group (a) performs
its obligations under any Shipmanagement Agreement or any Supervision Agreement
to which it is a party and (b) does not take any action or omit to take any
action the effect of which is to cause the Parent or the Manager or a
Submanager to be in breach of this Agreement, any Shipmanagement Agreement
and/or any Supervision Agreement.


                    SECTION
3.6. The Parent agrees that it has engaged the Manager to provide the Services
on an exclusive basis and, without receiving the prior written approval of the
Manager or before it has lawfully terminated this Agreement in accordance with
its terms, it will not engage any other entity to provide any of the Services.


ARTICLE IV


THE MANAGER’S GENERAL OBLIGATIONS


                    SECTION
4.1. In the exercise of its duties hereunder, the Manager shall act in
accordance with the reasonable policies, guidelines and instructions from time
to time communicated to it in writing by any member of the Group.


                    SECTION
4.2. For each Vessel or, as the case may be, Newbuild the Manager shall act and
do all and/or any of the acts or things described in this Agreement and the
relevant Shipmanagement Agreement or Supervision Agreement applicable to each
such Vessel or Newbuild in the name and/or on behalf of the Parent and/or the
relevant Subsidiary or Subsidiaries.


                    SECTION
4.3. The Manager acknowledges that the services it will provide pursuant to the
Shipmanagement Agreements or the Supervision Agreements are not limited to the
services described in such agreements and include those set forth in this
Agreement.


                    SECTION
4.4. The Manager shall exercise commercially reasonable care to cause all
material property of any member of the Group to be clearly identified as such,
held separately from the property of the Manager and, where applicable, held in
safe custody.


                    SECTION
4.5. The Manager shall exercise commercially reasonable care to cause adequate
manpower to be employed by it to perform its obligations under this Agreement, PROVIDED
HOWEVER, that the Manager, in the performance of its responsibilities under
this Agreement, shall be entitled to have regard to its overall
responsibilities in relation to the management of its clients and in
particular, without prejudice to the generality of the foregoing, the Manager
shall be entitled to allocate






9


available
resources and services in such manner as in the prevailing circumstances the
Manager considers to be fair and reasonable.


                    SECTION
4.6. Notwithstanding anything to the contrary contained in this Agreement or
any Shipmanagement Agreement or any Supervision Agreement, the Manager agrees
that any and all decisions of a material nature relating to the Parent, any
Subsidiary, any Vessel or any Newbuild under construction shall be reserved to
the Parent, such decisions including, but not being limited to:


	
  

 	
  

 
	
  

 	
           (a)
 the purchase and/or sale of shares in any entity or other assets of a
 material nature;

 
	
  

 	
  

 
	
  

 	
           (b)
 the purchase, formation or dissolution of subsidiaries;

 
	
  

 	
  

 
	
  

 	
           (c)
 the entry into guarantees or loans or other forms of financing and any and
 all financial undertakings and commitments connected therewith; and

 
	
  

 	
  

 
	
  

 	
           (d)
 the presentation, negotiation, settlement, prosecution or defense of any
 claim, demand or petition for an amount exceeding US$1,000,000 or its
 equivalent.

 



                    SECTION
4.7. During the Term, the Manager shall promote the business of the Group in
accordance with the directions of the authorized representative or, as the case
may be, representatives of the respective member of the Group and shall at all
times use commercially reasonable efforts to conform to and comply with the
lawful and reasonable directions, regulations or recommendations made by such
authorized representative or, as the case may be, representatives, and in the
absence of any specific directions or recommendations as aforesaid and, subject
to the terms and conditions of this Agreement, shall provide general
administrative and advisory services in connection with the management of the
business of the Group.


                    SECTION
4.8. The Manager, in the performance of its responsibilities under this
Agreement, any Supervision Agreement or any Shipmanagement Agreement, shall
exercise commercially reasonable care to cause any purchases of products or
services from any of its Affiliates to be on terms no less favorable to the
Manager than the market prices for products or services that the Manager could
obtain on an arm’s length basis from unrelated parties.


                    SECTION
4.9. During the term hereof, the Manager agrees that it will provide the
Services to the Group on an exclusive basis and, without receiving the prior
Consent of the Parent, it will not provide any Services or other services
contemplated herein to any entity other than the Parent and each Subsidiary.


                    SECTION
4.10. If a Vessel (which expression for the purposes of this Section shall
include any Newbuild to be acquired by a member of the Group) and a Container
Vessel directly or indirectly owned or operated by a third party are both
available and meet the criteria for a charter being fixed by the Manager, the
Vessel shall be 





10


offered such
charter first and the Parent shall have 48 hours from such offer being received
to accept such offer, failing which such charter shall be then offered to the
relevant third party.


                    SECTION
4.11. The Manager shall at all times maintain appropriate and necessary
accounts and records as regards the Services and shall make the same available
for inspection and auditing by the Parent at such times as may be mutually
agreed by the Manager, on the one hand, and the Parent, on the other hand.


ARTICLE V


ADMINISTRATIVE SERVICES


                    SECTION
5.1. The Manager shall provide certain general administrative services to the
Group, including, but not limited to, the following:


	
  

 	
  

 
	
  

 	
           (a)
 keeping all books and records of things done and transactions performed on
 behalf of any member of the Group as it may require from time to time,
 including, but not limited to, liaising with accountants, lawyers and other
 professional advisors;

 
	
  

 	
  

 
	
  

 	
           (b)
 except as otherwise contemplated herein, representing any member of the Group
 generally in its dealings and relations with third parties;

 
	
  

 	
  

 
	
  

 	
           (c)
 maintaining the general ledgers of the Group, establishing bank accounts with
 such financial institutions as the Parent may request, managing,
 administering and reconciling of the Group’s bank accounts, preparation of
 periodic consolidated financial statements of the Group, including, but not
 limited to, those required for governmental and regulatory or self-regulatory
 agency filings and reports to shareholders, arranging of the auditing and/or
 review of any such financial statements and the provision of related data
 processing services;

 
	
  

 	
  

 
	
  

 	
           (d)
 providing assistance in the preparation of periodic and other reports, proxy
 statements, registration statements and other documents and reports required
 by applicable law (including rules and regulations promulgated by the U.S.
 Securities and Exchange Commission) or the rules of any securities exchange
 or inter-dealer quotation system on which the securities of the Parent or any
 member of the Group may be listed or quoted;

 
	
  

 	
  

 
	
  

 	
           (e)
 preparing and providing (or procuring, at the Parent’s cost, a third party
 service provider to prepare and provide) tax returns required by any law or
 regulatory authority and developing, maintaining and monitoring internal
 audit controls, disclosure controls and information technology for the Group;

 









11


	
  

 	
  

 
	
  

 	
           (f)
 arranging for the provision of advisory services (either directly or, at the
 Parent’s cost, through a third party service provider) to ensure the Group is
 in compliance with all applicable laws, including all relevant securities
 laws, including the preparation for review, approval and filing by the Parent
 of reports and other documents with the U.S. Securities and Exchange
 Commission, any securities exchange on which its shares are listed and all other
 regulatory authorities having jurisdiction over the Parent or with other
 securities exchanges on which the Parent’s securities are listed;

 
	
  

 	
  

 
	
  

 	
           (g)
 either directly or, at the Parent’s cost, through a third party service
 provider (such as by appointing lawyers), providing for the presentation,
 negotiation, settlement, prosecution or defense of any claim, demand or
 petition on behalf of any member of the Group arising in connection with the
 business of any member of the Group for an amount not exceeding US$1,000,000
 or its equivalent, including the pursuit by any member of the Group of any
 rights of indemnification or reimbursement;

 
	
  

 	
  

 
	
  

 	
           (h)
 providing assistance in negotiating loan and credit terms with lenders and
 monitoring and administration of compliance with any applicable financing
 terms and conditions in effect with investors, banks or other financial
 institutions;

 
	
  

 	
  

 
	
  

 	
           (i)
 assisting with arranging board meetings, director accommodation and travel
 for board meetings and preparing meeting materials and detailed papers and
 agendas for scheduled meetings of the Board of Directors or the board of
 directors of any other member of the Group (and any and all committees
 thereof) that, where applicable, contain such information as is reasonably
 available to the Manager to enable the Board of Directors or such other board
 of directors (and any such committees) to base their opinion;

 
	
  

 	
  

 
	
  

 	
           (j)
 preparing or causing to be prepared reports to be considered by the Board of
 Directors (or any applicable committee thereof) in accordance with the
 Parent’s internal policies and procedures on any acquisition, investment or
 sale of any part of the business;

 
	
  

 	
  

 
	
  

 	
           (k)
 administering payroll services, benefits and director’s or consultant’s fees,
 as applicable, for any employee, officer, consultant or director of the
 Group;

 
	
  

 	
  

 
	
  

 	
           (l)
 handling general and administrative expenses of the Parent, which are related
 to its operation as public company and, upon being placed by the Parent in
 funds in accordance with the terms of this Agreement, arranging for the
 payment of the same;

 









12


	
  

 	
  

 
	
  

 	
           (m)
 either directly or, at the Parent’s cost, through a third party service
 provider (such as by appointing lawyers), handling all administrative and
 clerical matters in respect of (i) the calling and arrangement of all annual
 and/or special meetings of shareholders of the Parent, (ii) the
 preparation of all materials (including notices of meetings and information
 circulars) in respect thereof and (iii) the submission of all such materials
 to the Parent in sufficient time prior to the dates upon which they must be
 mailed, filed or otherwise relied upon so that the Parent has full
 opportunity to review, approve, execute and return them to the Manager for
 filing or mailing or other disposition as the Parent may require or direct;

 
	
  

 	
  

 
	
  

 	
           (n)
 providing, at the request and under the direction of the Parent, such
 communications to the transfer agent for the Parent as may be necessary or
 desirable;

 
	
  

 	
  

 
	
  

 	
           (o)
 assisting the Parent in establishing and maintaining a system of internal
 controls sufficient to satisfy applicable regulatory requirements;

 
	
  

 	
  

 
	
  

 	
           (p)
 providing the Group with office accommodation, office staff (including
 secretarial and administrative assistance), facilities and stationery;

 
	
  

 	
  

 
	
  

 	
           (q)
 maintaining, at the Parent’s cost, the Parent’s and each other member’s of
 the Group corporate existence, qualification and good standing in all
 necessary jurisdictions and assisting in all other corporate and regulatory
 compliance requirements;

 
	
  

 	
  

 
	
  

 	
           (r)
 at the Parent’s cost, assisting in all corporate and regulatory compliance
 requirements for incorporating a new entity that will be owned (inter alios)
 by a member of the Group and/or for dissolving any member of the Group, in
 all necessary jurisdictions;

 
	
  

 	
  

 
	
  

 	
           (s)
 at the request of the Parent, negotiating the terms and thereafter arranging
 for cash management services and/or hedging arrangements, in each case with a
 third party provider at the cost of the Parent;

 
	
  

 	
  

 
	
  

 	
           (t)
 at the request of the Parent, monitoring the performance of investment
 managers; and

 
	
  

 	
  

 
	
  

 	
           (u)
 providing any such other administrative services as the Parent, the Executive
 Officers or any other representative of the Parent may request and the
 Manager may agree to provide from time to time.

 










13 


ARTICLE VI


COMMERCIAL SERVICES


                    SECTION
6.1. In addition to any commercial services provided under clause 3.3 of each
Shipmanagement Agreement, the Manager shall provide the following commercial
services to the Group: 


	
  

 	
  

 
	
  

 	
           (a)
 performing class records review and physical inspections in respect of any
 vessel considered for purchase by a member of the Group; 

 
	
  

 	
  

 
	
  

 	
           (b)
 at the request and under the direction of the Parent, providing
 administrative services in connection with the purchase of a second-hand
 vessel or the acquisition and sale of a Newbuild, in either case by any
 member of the Group, including, if specifically instructed by the Parent in
 writing, signing any agreed form of memorandum of agreement, shipbuilding
 contract or other similar contract for and on behalf of the relevant member
 of the Group; 

 
	
  

 	
  

 
	
  

 	
           (c)
 managing relationships between the Parent and any existing or potential
 charterers, shipbuilders, insurers, lenders, investors, fund managers, shareholders
 and other shipping industry service providers/participants; and 

 
	
  

 	
  

 
	
  

 	
           (d)
 at the request of the Parent, providing certain services in connection with a
 member of the Group taking physical delivery of a vessel, registering a
 vessel under a ship register, tendering physical delivery of a Vessel or
 deleting a Vessel from the applicable port of registry, in each case on
 behalf of the relevant member of the Group. 

 


ARTICLE VII


INSURANCE


                    SECTION
7.1. In addition to any insurance requirements provided in clause 3.4 of each
Shipmanagement Agreement, the Manager shall: 


	
  

 	
  

 
	
  

 	
           (a)
 arrange either directly or, through insurance brokers appointed by the
 Manager, Directors & Officers’ liability insurance for the Board of
 Directors with such insurance companies, at such rates and otherwise on such
 other terms as the Parent shall have instructed and/or agreed upon; 

 
	
  

 	
  

 
	
  

 	
           (b)
 on request, provide the Parent with a copy of any insurance claims and any
 reports prepared by the relevant insurers; and 

 









14 


	
  

 	
  

 
	
  

 	
           (c)
 subject to having been placed in funds on time by the Parent, take
 commercially reasonable care to cause all premiums on the Parent’s Directors
 & Officers’ liability insurance are paid in a timely fashion. 

 


ARTICLE VIII


AVAILABILITY OF OFFICERS AND EMPLOYEES


                    SECTION
8.1. The Manager shall make available to the Parent all such officers, managers
and employees, including any of the Executive Officers, that the Parent and the
Manager agree shall be made available, PROVIDED ALWAYS, that any
remuneration of any officers, managers, employees or Executive Officers made
available by the Manager to any member of the Group, shall be paid by the
Parent to the Manager according to terms to be agreed at the time. 


                    SECTION
8.2. The Executive Officers are entitled to direct the Manager to remove and
replace any individual serving as an officer or any senior manager serving as
head of a business unit, in either case, of any member of the Group, other than
an Executive Officer, from such position. The Board of Directors, in its sole
discretion, shall be entitled to direct the Manager to remove any individual
made available to the Parent by the Manager serving as an Executive Officer
from such position and to appoint such other individual to serve as successor
as the Board of Directors shall approve. Furthermore, the Manager agrees that
it will not remove any individuals serving as officers or senior managers of
any member of the Group from their respective positions without the prior
written consent of the Executive Officers (such consent not to be unreasonably
withheld or unduly delayed) and, in the case of any Executive Officer, the
Board of Directors. If any officer or senior manager who is made available to
the Parent by the Manager resigns, is terminated or otherwise vacates his or
her office, the Manager shall, as soon as practicable after acceptance of any
resignation or after termination, use reasonable best efforts to identify
suitable candidates for replacement of such officer. 


                    SECTION
8.3. The Parent may employ directly any other officers, senior managers or
employees as it may deem necessary that will not be subject to this Agreement. 


                    SECTION
8.4. The Manager will report to the Parent and the Board of Directors through
any one of the Executive Officers. 


ARTICLE IX


MANAGEMENT FEES AND EXPENSES


                    SECTION
9.1. In consideration of the Manager providing the Services to the Group, the
Parent shall pay the Manager the following fees (together, the “Management
Fees” and, on a per Vessel basis, the “Management Fee”): 


	
  

 	
  

 
	
  

 	
 (a) subject
 to Sections 9.2 and 9.3, a fee of US$850 per day per Vessel, payable monthly
 in arrears (pro rated to reflect the number of 

 










15 


	
  

 	
  

 
	
  

 	
 days that
 the Parent (or any Subsidiary) owns or charters-in each Vessel during the
 applicable month), unless a Vessel is chartered-out to a third party on a
 bareboat charter basis, in which case the fee payable to the Manager for such
 Vessel shall be, subject to Sections 9.2 and 9.3, US$425 per day, PROVIDED
 HOWEVER, that when in respect of certain services to a Vessel the Manager
 appoints a Submanager in accordance with Section 2.4 and such Submanager
 enters into a management agreement directly with the relevant member of the
 Group (the “direct agreement”), the fees payable by the Parent and/or
 such member of the Group under this Agreement and/or any relevant
 Shipmanagement Agreement in respect of such Vessel pursuant to Section 9.1(a)
 shall be US$850 per day, or as the case may be, US$425 per day minus, in each
 case, the fees per day payable by such member of the Group to such Submanager
 under the relevant direct agreement in respect of such Vessel; 

 
	
  

 	
  

 
	
  

 	
           (b)
 a fee equal to 0.75% calculated on the aggregate of the gross freight,
 demurrage, charter hire, ballast bonus or other income obtained for the
 employment of each Vessel during the term of this Agreement, payable to the
 Manager monthly in arrears, only to the extent such freight, demurrage,
 charter hire, ballast bonus or other income, as the case may be, is received
 as revenue; 

 
	
  

 	
  

 
	
  

 	
           (c)
 subject to Sections 9.2 and 9.3, a fee of US$700,000 per Newbuild under
 construction for the services rendered by the Manager under the Supervision
 Agreement in respect of such Newbuild, payable in accordance with the terms
 of such Supervision Agreement. 

 



                    SECTION
9.2. The Management Fees will be fixed for the period commencing on the date of
this Agreement and ending on the last day of the calendar year falling two
years after the date of this Agreement (the “Fixed Period”) and shall
not be subject to adjustment for Euro/U.S. Dollar exchange rate fluctuations or
inflation until the last day of the Fixed Period. For the 12-month period
starting on the day falling immediately after the end of the Fixed Period and
for each subsequent 12-month period falling thereafter (each such 12-month
period referred to hereinafter as an “Annual Period”), the Management
Fee for each Vessel payable pursuant to Section 9.1(a) or Section 9.1(c) will
be adjusted upwards with effect from the beginning of such Annual Period by
application, to the relevant per Vessel amount, of a percentage figure equal to
four per cent (4%), PROVIDED ALWAYS, that in the event of any of the
provisions of Section 9.3 applying, further increases may be applied to such
Management Fees as determined pursuant to Section 9.3. 


                    SECTION
9.3. The Management Fees for each Vessel payable pursuant to Section 9.1(a) or
Section 9.1(c), for the Annual Period commencing on the day falling immediately
after the end of the Fixed Period and each subsequent Annual Period thereafter,
will, in each case, be further adjusted upwards with effect from the beginning
of such Annual Period if: 





16


	
  
 	
  
 
	
  
 	
           (a)
 the average of the Euro/U.S. Dollar exchange rates during the 12-month period
 ending on the last day of the month of September falling before the
 commencement date of such Annual Period (such average being the average over
 the applicable period, as calculated by the Manager from the Euro Foreign
 Exchange Reference Rate published daily at 15:00 CET by the European Central
 Bank on www.ecb.int) evidence that the Euro has strengthened against the U.S.
 Dollar by more than five per cent (5%) from: 
 
	
  
 	
  
 
	
  
 	
           (i)
 in the case of the first Annual Period starting on the day falling
 immediately after the end of the Fixed Period, the rate existing on the
 business day immediately prior to the date of this Agreement, and 
 
	
  
 	
  
 
	
  
 	
           (ii)
 in the case of each subsequent Annual Period, the previous Euro/U.S. Dollar
 average calculated for the purposes of this Section 9.3 in respect of the
 immediately previous Annual Period, by the
 average percentage amount by which the Euro has in each such case so
 strengthened against the U.S. Dollar; and/or
 
	
  
 	
  
 
	
  
 	
           (b)
 the Manager has incurred a material unforeseen increase in the cost of
 providing the Services, by an amount to be agreed between the Manager and the
 Parent, each acting in a commercially reasonable manner. 
 



                    SECTION
9.4. The Manager shall, subject to Section 9.5, pay for all usual office
expenses incurred by it as the Manager. 


                    SECTION
9.5. The Parent hereby acknowledges that any capital expenditure, financial
costs, operating expenses for each Vessel and any general and administrative
expenses of the Group whatsoever are not covered by the Management Fees and any
such expenditure, costs and expenses shall be paid fully by the Parent or the
applicable member of the Group, whether directly to third parties (which for
the avoidance of doubt shall include any Submanager) or by payment to such
third parties through the Manager and, without prejudice to Section 10.8, to
the extent incurred by the Manager, shall be reimbursed to it by the Parent
and/or any member of the Group the Manager seeks, in its discretion,
reimbursement from. The said capital expenditure, financial costs, operating
expenses for each Vessel and general and administrative expenses of the Group
include, without limiting the generality of the foregoing, items such as: 


	
  

 	
  

 
	
  

 	
           (a)
 fees, interest, principal and any other costs due to the Group’s financiers
 and their respective advisors; 

 
	
  

 	
  

 
	
  

 	
           (b)
 all voyage expenses and vessel operating and maintenance expenses relating to
 the operation and management of the Vessels (including Crew costs, surveyor’s
 attendance fees, bunkers, lubricant oils, spares, survey fees, classification
 society fees, maintenance and repair costs, vetting expenses, etc.); 

 










17 


	
  

 	
  

 
	
  

 	
           (c)
 any commissions, fees, remuneration or disbursements due to lawyers, brokers,
 agents, surveyors, consultants, financial advisors, investment bankers,
 insurance advisors or any other third parties whatsoever appointed by the
 Manager whether in its name or on behalf and/or in the name of any member of
 the Group; 

 
	
  

 	
  

 
	
  

 	
           (d)
 any commissions, fees, remuneration or disbursements due to lawyers, brokers,
 agents, surveyors, consultants, financial advisors, investment bankers,
 insurance advisors or any other third parties (other than, if applicable, a
 Related Manager) whatsoever sub-contracted to the Manager in the normal and
 reasonable course of meeting the Manager’s duties and obligations under this
 Agreement or any Shipmanagement Agreement or any Supervision Agreement
 including the duties provided in Articles V, VI and VII of this Agreement; 

 
	
  

 	
  

 
	
  

 	
           (e)
 applicable deductibles, insurance premiums (including Directors &
 Officers’ liability insurance) and/or P&I calls; 

 
	
  

 	
  

 
	
  

 	
           (f)
 compensation expenses for employees who are not provided by the Manager or
 which are provided by the Manager pursuant to Section 8.1; 

 
	
  

 	
  

 
	
  

 	
           (g)
 postage, communication, traveling, lodging, victualling, overtime, out of
 office compensation and out of pocket expenses of the Manager and/or its
 personnel, incurred in pursuance of the Services; and 

 
	
  

 	
  

 
	
  

 	
           (h)
 any other out of pocket expenses that are incurred by the Manager in the
 performance of the Services pursuant to this Agreement, any Supervision
 Agreement or any Shipmanagement Agreement. 

 



                    SECTION
9.6. The Manager shall have the right to demand the Management Fee payable in
relation to each Vessel from either the Parent or the Shipowning Subsidiary
owning such Vessel under the terms of the relevant Shipmanagement Agreement. By
written notice to the Parent, the Manager may direct the Parent to pay any
amounts owing by the Manager to any Submanager pursuant to a subcontract of any
provisions of this Agreement or any Shipmanagement Agreement or any Supervision
Agreement, directly to the relevant Submanager. 


                    SECTION
9.7. In the event that a Shipmanagement Agreement is terminated, other than by
reason of default by the Managers, the Management Fee payable to the Manager
under Section 9.1(a) for the Vessel subject to such Shipmanagement Agreement
shall be payable in respect of such Vessel for a further period of three months
from the termination date. The fees payable for the said three months shall be
paid in one lump sum in advance on the termination of the relevant
Shipmanagement Agreement. In addition the relevant member of the Group shall
pay any Severance Costs (as such term is defined in the relevant Shipmanagement
Agreement) for the relevant Vessel which may materialize. 






18


ARTICLE X


BUDGETS, CORPORATE PLANNING AND EXPENSES


                    SECTION
10.1. On or before October 1 of each calendar year, the Manager shall prepare
and submit to the Executive Officers a detailed draft budget for the next
calendar year in a format acceptable to the Executive Officers and the Board of
Directors and generally used by the Manager which shall include a statement of
estimated revenue and out-of-pocket expenses in providing the Services (the “Draft
Budget”).


                    SECTION
10.2. For a period of 20 days after receipt of the Draft Budget, the Executive
Officers, from time to time, may request further details and submit written
comments on the Draft Budget. If the Executive Officers do not agree with any
item of the Draft Budget, they will, within the same 20-day period, give the
Manager notice of any inquiries to the Draft Budget, which notice will include
the list of items under consideration (the “Questioned Items”) and a
proposal for the resolution of each such Questioned Item. The Executive
Officers and the Manager will endeavor to resolve any such differences between
them with respect to the Questioned Items, failing which the relevant
Questioned Items shall be left as presented by the Manager. If the Executive
Officers do not present any Questioned Items within such 20-day period, they
will be deemed to have accepted the Draft Budget and, such Draft Budget, shall
be deemed to be the Approved Budget (as defined in Section 10.3 below).


                    SECTION
10.3. By November 15 of the relevant calendar year (or such later date as the
Manager and the Board of Directors deem appropriate), and to the extent that
changes are required to the Draft Budget pursuant to Section 10.2, the Manager
will prepare and deliver to the Parent a revised budget that has been approved
by the Executive Officers (the “Approved Budget”). However, the Parent
acknowledges that the Approved Budget is only an estimate of the performance of
the Vessels and/or the Group and the Manager makes no assurance, representation
or warranty that the actual performance of the Vessels and/or the Group in any
relevant calendar year will correspond to the estimates contained in the
Approved Budget for that calendar year.


                    SECTION
10.4. The Manager may, from time to time, in any calendar year propose
amendments to the Approved Budget upon 15 days notice to the Parent, in which
event the Executive Officers will have the right to approve the amendments in
accordance with the process set out in Section 10.2 with the relevant time
periods being amended accordingly.


                    SECTION
10.5. Once the Approved Budget has been delivered, the Manager shall prepare
and present to the Parent its estimate of the working capital requirements of
the Vessels and the Group and the Manager shall each month update this
estimate. Based thereon, the Manager shall each month make a request to the
Parent and/or, as the case may be, the relevant members of the Group, in
writing for the funds required to provide the Services to the Group and to
operate each Vessel for the ensuing month, including the payment of any
occasional or extraordinary item of expenditure, such as emergency repair
costs, additional insurance premiums, bunkers or provisions. The





19


Manager may also make a request in writing to the Parent and/or, as the case may be,
the relevant members of the Group, at any time for funds required for the
payment of any occasional or extraordinary item of expenditure, such as
emergency repair costs, additional insurance premiums, bunkers or provisions.
Such funds shall be received by the Manager within ten calendar days after the
receipt by the Parent or, as the case may be, the relevant member of the Group
of the Manager’s written request and shall be held in a separate bank account
in the name of the Manager or, if requested by the Manager, in the name of the
Parent or of the relevant member of the Group.


At the end of
each quarter or, if the Manager from time to time so requires, month, the
Manager shall preliminarily reconcile the amounts advanced to it by the Parent
or, as the case may be, the relevant member of the Group, with the amounts
actually expended by it for the operation of each of the Vessels and/or the
Group, and (a) the Manager shall remit to the Parent, or credit to the
Parent amounts to be advanced to it hereunder for future months, any unused
portion of the amounts previously advanced by the Parent or, as the case may
be, the relevant member of the Group, or (b) the Parent shall pay to the Manager
any amounts properly expended by the Manager in excess of the amounts
previously advanced by the Parent or, as the case may be, the relevant member
of the Group. The Parent and the Manager shall reconcile any amounts due to the
Parent by the Manager or due to the Manager by the Parent for each fiscal year
of the Parent as promptly as practicable following the close of each such
fiscal year. Without prejudice to Section 10.8, any expenses incurred by the
Manager under the terms of this Agreement on behalf of any member of the Group
may be debited against the account of the respective member of the Group, but
shall in any event remain payable by the Parent and the relevant member of the
Group to the Manager on demand.


                    SECTION
10.6. The Manager shall also maintain the records of all costs and expenses
incurred, including any invoices, receipts and supplementary materials as are
necessary or proper for the settlement of accounts.


                    SECTION
10.7. Insofar as any moneys are collected from third parties by the Manager
under the terms of this Agreement, any Shipmanagement Agreement and/or any
Supervision Agreement (other than moneys payable by a member of the Group to
the Manager), such moneys and any interest thereon shall be held to the credit
of the relevant member of the Group in a separate bank account in the name
thereof. Interest on any such bank account shall be for the benefit of the
relevant member of the Group.


                    SECTION
10.8. Notwithstanding anything contained herein to the contrary, the Manager
shall in no circumstances be required to use or commit its own funds to finance
the provision of the Services.


                    SECTION
10.9. To the extent that a Related Manager has been appointed in accordance
with the terms of Section 2.4, it is agreed by the Parent and the Manager for
the benefit of such Related Manager that the provisions of Article X shall
apply to such Related Manager as if such provisions were repeated herein, but
with references to:





20


	
  

 	
  

 
	
  

 	
           (a)
 the “Manager” being deemed as references to the relevant Related Manager;

 
	
  

 	
  

 
	
  

 	
           (b)
 the “Services” being deemed as references to the services to be performed by
 such Related Manager under the relevant management agreement;

 
	
  

 	
  

 
	
  

 	
           (c)
 the “Vessels” being deemed as references to the Vessels being managed by such
 Related Manager under a management agreement entered into directly with the
 relevant Group members;

 
	
  

 	
  

 
	
  

 	
           (d)
 the “Parent” being deemed as references to the relevant Group members; and

 
	
  

 	
  

 
	
  

 	
           (e)
 references to “this Agreement, any Shipmanagement Agreement and/or any
 Supervision Agreement” being deemed as references any management agreement
 signed by such Related Manager directly with the relevant Group members.

 


ARTICLE XI


LIABILITY AND INDEMNITY


                    SECTION
11.1. Save for the obligation of the Parent to pay any moneys due to the
Manager hereunder, neither any member of the Group nor the Manager shall be
under any liability to the other for any failure to perform any of their
obligations hereunder by reason of Force Majeure. “Force Majeure” shall
mean any cause whatsoever of any nature or kind beyond the reasonable control
of the relevant member of the Group or the Manager, including, without
limitation, acts of God, acts of civil or military authorities, acts of war or
public enemy, acts of any court, regulatory agency or administrative body
having jurisdiction, insurrections, riots, strikes or other labor disturbances,
embargoes or other causes of a similar nature.


                    SECTION
11.2. The Manager, including its officers, directors, employees, shareholders,
agents, sub-contractors and any Submanager (the “Manager Related Parties”),
shall be under no liability whatsoever to any member of the Group or to any
third party (including the Crew) 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 a
Vessel), and howsoever arising in the course of the performance of this
Agreement, any Shipmanagement Agreement or any Supervision Agreement, unless
and to the extent that the same is proved to have resulted solely from the
gross negligence or willful misconduct of the Manager, its officers, employees,
agents, sub-contractors or any Submanager.


                    SECTION
11.3. Notwithstanding anything that may appear to the contrary in this
Agreement or any Shipmanagement Agreement, the Manager 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 





21


Manager to
discharge its obligations under clause 3.1 of each Shipmanagement Agreement, in
which case the Manager’s liability shall be limited in accordance with the
terms of this Article XI.


                    SECTION
11.4. The Parent shall indemnify and hold harmless the Manager Related Parties
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 this Agreement,
any Shipmanagement Agreement or any Supervision Agreement and against and in
respect of any loss, damage, delay or expense of whatsoever nature (including
legal costs and expenses on a full indemnity basis), whether direct or
indirect, incurred or suffered by any Manager Related Party arising out of or
in connection with the performance of this Agreement, any Shipmanagement
Agreement and any Supervision Agreement, unless incurred or suffered due to the
gross negligence or willful misconduct of any Manager Related Party.


                    SECTION
11.5. It is hereby expressly agreed that no employee or agent of the Manager
(including any sub-contractor from time to time employed by the Manager) shall
in any circumstances whatsoever be under any liability whatsoever to any member
of the Group or any third party 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 or agency and, without prejudice to the generality of the foregoing
provisions in this Article XI, every exemption, limitation, condition and
liberty herein contained and every right, exemption from liability, defense and
immunity of whatsoever nature applicable to the Manager or to which the Manager
is entitled hereunder shall also be available and shall extend to protect every
such employee or agent of the Manager acting as aforesaid, and for the purpose
of all the foregoing provisions of this Article XI, the Manager is 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 the Manager’s 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. Nothing
in this Section 11.5 shall be construed so as to further limit any liability
the Manager may have to the Group under Section 11.2 hereof.


                    SECTION
11.6. The provisions of this Article XI shall survive any termination of
this Agreement.


ARTICLE XII


RIGHTS OF THE MANAGER AND RESTRICTIONS ON THE
MANAGER’S AUTHORITY


                    SECTION
12.1. Except as may be provided in this Agreement or in any separate written
agreement between the Parent or any other member of the Group and the Manager
or a Submanager, the Manager and any Submanager shall be an independent
contractor and not the agent of the Parent or any other member of the Group and
shall have no right or authority to incur any obligation on behalf of any
member of the Group or to






22


bind any
member of the Group in any way whatsoever. Nothing in this Agreement shall be
deemed to make the Manager or any Submanager or any of their subsidiaries or
employees an employee, joint venturer or partner of any member of the Group.


                    SECTION
12.2. The Parent acknowledges that the Manager or, as the case may be, any
Submanager shall have no responsibility hereunder, direct or indirect, with
regard to the formulation of the business plans, policies, management or
strategies (financial, tax, legal or otherwise) of any member of the Group,
which is solely the responsibility of each respective member of the Group. Each
member of the Group shall set its corporate policies independently through its
respective board of directors and executive officers and nothing contained
herein shall be construed to relieve such directors or officers of each
respective member of the Group from the performance of their duties or to limit
the exercise of their powers.


                    SECTION
12.3. Notwithstanding the other provisions of this Agreement:


	
  

 	
  

 
	
  

 	
           (a)
 the Manager or, as the case may be, any Submanager may act with respect to a
 member of the Group upon any advice, resolutions, requests, instructions,
 recommendations, direction or information obtained from such member of the
 Group or any banker, accountant, broker, lawyer or other person acting as
 agent of or adviser to such member of the Group and the Manager or, as the
 case may be, the relevant Submanager shall incur no liability to such member
 of the Group for anything done or omitted or suffered in good faith in
 reliance upon such advice, instruction, resolution, recommendation, direction
 or information made or given by such member of the Group or its agents, in
 the absence of gross negligence or willful misconduct by the Manager or, as
 the case may be, the relevant Submanager or their respective servants, and
 shall not be responsible for any misconduct, mistake, oversight, error of
 judgment, neglect, default, omission, forgetfulness or want of prudence on
 the part of any such banker, accountant, broker, lawyer, agent or adviser or
 other person as aforesaid;

 
	
  

 	
  

 
	
  

 	
           (b)
 the Manager or, as the case may be, a Submanager shall not be under any
 obligation to carry out any request, resolution, instruction, direction or
 recommendation of any member of the Group or its agents if the performance
 thereof is or would be illegal or unlawful; and

 
	
  

 	
  

 
	
  

 	
           (c)
 the Manager or, as the case may be, the relevant Submanager shall incur no liability
 to any member of the Group for doing or failing to do any act or thing which
 it shall be required to do or perform or forebear from doing or performing by
 reason of any provision of any law or any regulation or resolution made
 pursuant thereto or any decision, order or judgment of any court or any
 lawful request, announcement or similar action of any person or body
 exercising or purporting to exercise the legitimate authority of any government or of any central or local

 









23


	
  

 	
  

 
	
  

 	
 governmental institution in each case where the
 above entity has jurisdiction.

 


ARTICLE XIII


TERMINATION OF THIS AGREEMENT


                    SECTION
13.1. This Agreement shall be effective as of the Effective Date and, subject
to Sections 13.2, 13.3, 13.4 and 13.5, shall continue until the last day
of the calendar year falling five years after the calendar year that the
Effective Date falls in (the “Initial Term”). Thereafter the term of
this Agreement shall be extended on a year-to-year basis for up to five times
(each a “Subsequent Term”) unless the Parent, at least 12 months prior
to the end of the then current term, gives written notice to the Manager that
it wishes to terminate this Agreement at the end of the then current term. In
no event will the term of this Agreement (the “Term”) extend beyond the
date falling five years after the last day of the Initial Term.


                    SECTION
13.2. The Parent shall be entitled to terminate this Agreement by notice in
writing to the Manager if:


	
  

 	
  

 
	
  

 	
           (a)
 the Manager defaults in the performance of any material obligation under this
 Agreement, subject to a cure right of 20 Business Days following written
 notice by the Parent, PROVIDED ALWAYS, that any default of the Manager
 to perform any of its obligations under a particular Shipmanagement Agreement
 or any Supervision Agreement, shall not, in itself, entitle the Parent to
 terminate this Agreement pursuant to this Section 13.2(a) and shall only
 allow the relevant member of the Group to terminate the relevant Shipmanagement
 Agreement or Supervision Agreement;

 
	
  

 	
  

 
	
  

 	
           (b)
 any moneys due and payable to the Parent or third parties by the Manager
 under this Agreement is not paid or accounted for within 10 Business Days
 following written notice by the Parent;

 
	
  

 	
  

 
	
  

 	
           (c)
 there is a Change of Control of the Manager; or

 
	
  

 	
  

 
	
  

 	
           (d)
 the Manager is convicted of, enters a plea of guilty or nolo contendere with
 respect to, or enters into a plea bargain or settlement admitting guilt for a
 crime (including, for the avoidance of doubt, fraud), which conviction, plea
 bargain or settlement is demonstrably and materially injurious to the Parent,
 PROVIDED ALWAYS, such crime is not a misdemeanor and PROVIDED
 ALWAYS further that such crime has been committed solely and directly by
 an officer or director of the Manager acting within the terms of its
 employment or office.

 



                    SECTION
13.3. The Manager shall be entitled to terminate this Agreement by notice in
writing to the Parent if:





24


	
  

 	
  

 
	
  

 	
           (a)
 any moneys payable by the Parent under this Agreement is not paid when due or
 if due on demand within 20 Business Days following demand by the Manager;

 
	
  

 	
  

 
	
  

 	
           (b)
 the Parent defaults in the performance of any other material obligations
 under this Agreement, subject to a cure right of 20 Business Days following
 written notice by the Manager; or

 
	
  

 	
  

 
	
  

 	
           (c)
 there is a Change in Control of the Parent.

 



                    SECTION
13.4. Either party shall be entitled to terminate this Agreement by notice in
writing to the other party if:


	
  

 	
  

 
	
  

 	
           (a)
 the other party ceases to conduct business, or all or substantially all of
 the equity-interests, properties or assets of such other party are sold,
 seized or appropriated which, in the case of seizure or appropriation, is not
 discharged within 20 Business Days;

 
	
  

 	
  

 
	
  

 	
           (b)
 (i) the other party files a petition under any bankruptcy law, makes an
 assignment for the benefit of its creditors, seeks relief under any law for
 the protection of debtors or adopts a plan of liquidation; (ii) a petition is
 filed against the other party seeking to have it declared insolvent or
 bankrupt and such petition is not dismissed or stayed within 90 Business Days
 of its filing; (iii) the other party shall admit in writing its insolvency or
 its inability to pay its debts as they mature; (iv) an order is made for the
 appointment of a liquidator, manager, receiver or trustee of the other party
 of all or a substantial part of its assets; (v) if an encumbrancer takes possession
 of or a receiver or trustee is appointed over the whole or a substantial part
 of the other party’s undertaking, property or assets; or (vi) if an order is
 made or a resolution is passed for the other party’s winding up;

 
	
  

 	
  

 
	
  

 	
           (c)
 the other party is prevented from performing its obligations hereunder, in
 any material respect, by reasons of Force Majeure for a period of two or more
 consecutive months; or

 
	
  

 	
  

 
	
  

 	
           (d)
 all Supervision Agreements and all Shipmanagement Agreements are terminated
 in accordance with the respective terms thereof.

 



                    SECTION
13.5. Upon the effective date of termination pursuant to this
Article XIII, the Manager shall promptly terminate its service hereunder,
after taking reasonable commercial steps to minimize any interruption to the
business of the members of the Group.


                    SECTION
13.6. Upon termination, the Manager shall, as promptly as possible, submit a
final accounting of funds received and disbursed under this Agreement, any
Supervision Agreement and/or any Shipmanagement Agreement and of any remaining





25


Management
Fees and/or any other funds due from the Parent or any other member of the
Group, calculated pro rata to the date of termination, and any non-disbursed
funds of any member of the Group in the Manager’s possession or control will be
paid by the Manager as directed by such member of the Group promptly upon the
Manager’s receipt of all sums then due to it under this Agreement, any
Supervision Agreement and/or any Management Agreement, if any.


                    SECTION
13.7. Upon termination of this Agreement, the Manager shall release to the
Parent the originals where possible, or otherwise certified copies, of all such
accounts and all documents specifically relating to each Vessel or the
provision of the Services.


                    SECTION
13.8. Upon termination of this Agreement either by the Manager for any reason
(other than pursuant to Section 13.4(c)) or by the Parent pursuant to Section
13.1, the Parent shall be liable to pay to the Manager as liquidated damages an
amount in U.S. Dollars equal to the lesser of (a) five times and (b) the number
of full years remaining prior to the date falling five years after the last day
of the Initial Term times, in each case, the aggregate fees due and payable to
the Manager under the terms of this Agreement during the 12-month period ending
on the date of termination of this Agreement (without taking into account any
reduction to the fees payable to the Manager under Section 9.1(a) in the event
that a Submanager has been appointed as provided therein), PROVIDED ALWAYS,
that the amount of liquidated damages payable thereunder shall never be less
than two times the aggregate fees due and payable to the Manager under the
terms of this Agreement during the 12-month period ending on the date of
termination of this Agreement.


                    SECTION
13.9. The provisions of this Article XIII shall survive any termination of
this Agreement.


ARTICLE XIV

NOTICES


                    SECTION
14.1. All notices, consents and other communications hereunder, or necessary to
exercise any rights granted hereunder, shall be in writing, sent either by
prepaid registered mail or telefax, and will be validly given if delivered on a
Business Day to an individual at the following address:


	
  

 	
  

 
	
  

 	
 Costamare
 Inc.

 
	
  

 	
 60 Zephyrou
 Street & Syngrou Avenue

 
	
  

 	
 Palaio
 Faliro, Athens, Greece

 
	
  

 	
  

 
	
  

 	
 Telefax: +30
 210 9406454

 
	
  

 	
 Attention:
 CEO

 
	
  

 	
  

 
	
  

 	
 Costamare
 Shipping Company S.A.

 
	
  

 	
 60 Zefyrou
 Street & Syngrou Avenue,

 
	
  

 	
 Palaio
 Faliro, Athens, Greece

 










26


                          Telefax: +30 210 9409081 

                          Attention:
Managing Director


ARTICLE XV


APPLICABLE LAW


                    SECTION
15.1. This Agreement and any non-contractual obligations connected with it
shall be governed by, and construed in accordance with, the laws of England. 


                    SECTION
15.2. Except for Sections 2.3, 3.5, 9.5 and 9.6 and Articles XI and XII which
can be relied by a Submanager and Sections 2.3, 3.5, 9.5, 9.6 and 10.9 and
Articles XI and XII which can be relied by a Related Manager, no other term of
this Agreement is enforceable under the Contracts (Rights of Third Parties) Act
1999 by a person who is not a party to this Agreement. 


ARTICLE XVI


ARBITRATION


                    SECTION
16.1. All disputes arising out of this Agreement and/or any non-contractual
obligations connected with it shall be arbitrated in London in the following
manner. One arbitrator is to be appointed by each of the parties hereto and a
third by the two so chosen. Their decision or that of any two of them shall be
final. The arbitrators shall be commercial persons, conversant with shipping
matters. Such arbitration is to be conducted in accordance with the London
Maritime Arbitration Association (LMAA) Terms current at the time when the
arbitration proceedings are commenced and in accordance with the Arbitration
Act 1996 or any statutory modification or re-enactment thereof. 


                    SECTION
16.2. In the event that a party hereto shall state a dispute and designate an
arbitrator in writing, the other party shall have 10 Business Days to designate
its own arbitrator. If such other party fails to designate its own arbitrator
within such period, the arbitrator appointed by the first party can render an
award hereunder. 


                    SECTION
16.3. Until such time as the arbitrators finally close the hearings, either
party shall have the right by written notice served on the arbitrators and on
the other party to specify further disputes or differences under this Agreement
for hearing and determination. 


                    SECTION
16.4. The arbitrators may grant any relief, and render an award, which they or
a majority of them deem just and equitable and within the scope of this
Agreement, including but not limited to the posting of security. Awards
pursuant to this Article XVI may include costs and judgments may be entered
upon any award made herein in any court having jurisdiction. 






27


ARTICLE XVII


MISCELLANEOUS


                    SECTION
17.1. This Agreement constitutes the sole understanding and agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements or understandings, written or oral, with respect thereto. This
Agreement may not be amended, waived or discharged except by an instrument in
writing executed by the party against whom enforcement of such amendment,
waiver or discharge is sought. 


                    SECTION
17.2. During the term hereof, the Manager will not provide services hereunder
through, or otherwise cause any member of the Group to have, an office or fixed
place of business in the United States. 


                    SECTION
17.3. This Agreement may be executed in one or more written counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one instrument. 


                    IN
WITNESS WHEREOF the undersigned have executed this Agreement as of the date
first above written. 


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 COSTAMARE
 INC.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 by

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	

 


 	

 


 	

 


 
	
  

 	
  

 	
 Name:

 	
 Konstantinos
 Konstantakopoulos

 
	
  

 	
  

 	
 Title:

 	
 CEO

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 COSTAMARE
 SHIPPING COMPANY

 
	
  

 	
 S.A.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 by

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	

 


 	

 


 	

 


 
	
  

 	
  

 	
 Name:
 Diamantis Manos

 
	
  

 	
  

 	
 Title:
 Director

 










SCHEDULE A


SHIPOWNING SUBSIDIARIES



	
 1) Achilleas
Maritime Corporation 

 
	
 2) Alexia
 Transport Corp. 

 
	
 3) Angistri
 Corporation 

 
	
 4) Bullow
 Investments Inc. 

 
	
 5) Burton
 Shipping Co. 

 
	
 6)
 Capetanissa Maritime Corporation 

 
	
 7)
 Caravokyra Maritime Corporation 

 
	
 8) Christos
 Maritime Corporation 

 
	
 9)
 Costachille Maritime Corporation 

 
	
 10) Costis
 Maritime Corporation 

 
	
 11) Denor
 Shipping Co. 

 
	
 12) Dino
 Shipping Co. 

 
	
 13) Fanakos
 Maritime Corporation 

 
	
 14)
 Fastsailing Maritime Co. 

 
	
 15) Flow
 Shipping Co. 

 
	
 16) Grappa Shipping
 Co. 

 
	
 17)
 Guildmore Navigation S.A. 

 
	
 18) Honaker
 Shipping Company 

 
	
 19) Kalamata
 Shipping Corporation 

 
	
 20) Kelsen
 Shipping Co. 

 
	
 21) Lang
 Shipping Co. 

 
	
 22) Lege
 Shipping Co. 

 
	
 23) Lytton
 Shipping Co. 

 
	
 24) Marathos
 Shipping Inc. 

 
	
 25) Marina
 Maritime Corporation 

 
	
 26) Marvista
 Maritime Inc. 

 
	
 27) Mas
 Shipping Co. 

 
	
 28) Mera
 Shipping Co. 

 
	
 29) Merin
 Shipping Co. 

 










2


	
  

 
	
 30) Merten
 Shipping Co. 

 
	
 31) Miko
 Shipping Co. 

 
	
 32) Montes
 Shipping Co. 

 
	
 33) Navarino
 Maritime Corporation 

 
	
 34) Ray
 Shipping Co. 

 
	
 35) Rena
 Maritime Corporation 

 
	
 36) Sims
 Shipping Co. 

 
	
 37) Takoulis
 Maritime Corporation 

 
	
 38) West End
 Shipping Co. Ltd. 

 
	
 39) Venor
 Shipping Co. 

 
	
 40) Volk
 Shipping Co. 

 
	
 41) Uriza
 Shipping Co. 

 










SCHEDULE B


NON-SHIPOWNING SUBSIDIARIES


	
  
 
	
 1. Brookes
 Shipping Co. 
 
	
 2. Cagney
 Shipping Co. 
 
	
 3. Convey
 Shipping Co. 
 
	
 4. Cornas
 Shipping Co. 
 
	
 5. Davies
 Shipping Co. 
 
	
 6. Douro
 Shipping Co. 
 
	
 7. Dome
 Shipping Co. 
 
	
 8. Idea
 Shipping Co. 
 
	
 9. Erin
 Shipping Co. 
 
	
 10. Nigel
 Shipping Co. 
 
	
 11. Ronda
 Shipping Co. 
 
	
 12. Royce
 Shipping Co. 
 
	
 13. Madelia
 Shipping Co. 
 
	
 14. Mabel
 Shipping Co. 
 
	
 15. Warrick
 Shipping Co. 
 
	
 16. Sea Elf
 Maritime Inc 
 
	
 17. Simone
 Shipping Co. 
 
	
 18. Adele
 Shipping Co. 
 
	
 19. Bastian
 Shipping Co. 
 
	
 20. Cadence
 Shipping Co. 
 
	
 21. Daina
 Shipping Co. 
 
	
 22. Edith
 Shipping Co. 
 
	
 23. Fay
 Shipping Co. 
 










APPENDIX I


FORM OF SHIPMANAGEMENT AGREEMENT





	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Approved by

 	
  

 	
  

 
	
  

 	
  

 	
 the Documentary Committee of The

 	
  

 	
 Approved by

 
	
 Printed by BIMCO’s idea

 	
  

 	
 Japan Shipping Exchange Inc., Tokyo

 	
  

 	
 the International Ship Managers’
 Association (ISMA)

 




 


	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 Date of Agreement

  [to be dated the
 date of execution]

 	
  

 	
 THE BALTIC AND INTERNATIONAL MARITIME
 COUNCIL (BIMCO)

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 STANDARD SHIP MANAGEMENT AGREEMENT

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 CODE NAME: “SHIPMAN 98”

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 PART I

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.

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

 	
  

 	
 3.

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

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Name

 	
  

 	
  

 	
 Name

 	
  

 
	
  

 	
  

 	
  [name of relevant member of the Group]

 	
  

 	
  

 	
 Costamare Shipping Company S.A.

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Place of registered office

 	
  

 	
  

 	
 Place of registered office

 	
  

 
	
  

 	
  

 	
  [to be completed]

 	
  

 	
  

 	
 Panama City, Republic of Panama

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Law of registry

 	
  

 	
  

 	
 Law of registry

 	
  

 
	
  

 	
  

 	
  [to be completed]

 	
  

 	
  

 	
 Republic of Panama

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 Day and year of commencement of
 Agreement (Cl. 2)

  [to be completed
 on execution]

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 Crew Management (state “yes” or
 “no” as agreed) (Cl. 3.1)

 YES

 	
  

 	
 6.

 	
 Technical Management (state “yes” or “no” as agreed) (Cl. 3.2)

 YES

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 7.

 	
 Commercial Management (state “yes”
 or “no” as agreed) (Cl. 3.3)

 YES

 	
  

 	
 8.

 	
 Insurance Arrangements (state “yes” or “no” as agreed) (Cl. 3.4)

 YES

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 9.

 	
 Accounting Services (state “yes” or
 “no” as agreed) (CI. 3.5)

 YES

 	
  

 	
 10.

 	
 Sale or purchase of the Vessel (state “yes” or “no” as
 agreed) (Cl. 3.6) 

 YES

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 11.

 	
 Provisions (state “yes” or “no” as
 agreed) (Cl. 3.7)

 YES

 	
  

 	
 12.

 	
 Bunkering (state “yes” or “no” as agreed) (Cl. 3.8) 

 YES

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 13.

 	
 Chartering Services Period (only to
 be filled in if “yes” stated in Box 7) (Cl. 3.3(i))
36 months (including any optional extensions applicable) and with a gross daily rate (or time charter equivalent) of US$[   ]

 	
  

 	
 14.

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

 Clause 6.3(ii)

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 15.

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

 See Clause 8.1

 	
  

 	
 16.

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

 not applicable

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 17.

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

 see Clause 17

 	
  

 	
 18.

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

  see Clause 19.1

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 19.

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

 	
  

 	
 20.

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



 	
  

 
	
  

 	
  

 	
 C/o Costamare Inc.

 	
  

 	
  

 	
 60 Zephyrou Street & Syngrou Avenue

 	
  

 
	
  

 	
  

 	
 60 Zephyrou Street & Syngrou Avenue

 	
  

 	
  

 	
 Athens, Greece

 	
  

 
	
  

 	
  

 	
 Athens, Greece

 	
  

 	
  

 	
 Telefax: + 30 210 940 9051

 	
  

 
	
  

 	
  

 	
 Telefax: + 30 210 940 6454 

 	
  

 	
  

 	
 Attention: Chief Executive Officer

 	
  

 
	
  

 	
  

 	
 Attention: Chief Executive Officer

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Signature(s) (Owners)

 	
  

 	
 Signature(s) (Managers)

 	
  

 
	
  

 	
  

 	
  [name of
 relevant member of the Group]

 	
  

 	
  

 	
 COSTAMARE SHIPPING COMPANY S.A.

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 




This document is a computer generated SHIPMAN 98 form printed by
authority of BIMCO. Any insertion or deletion to the form must be clearly
visible. In the event of any modification made to the pre-printed text of this
document which is not clearly visible, the text of the original BIMCO approved
document shall apply. BIMCO assumes no responsibility for any loss, damage or
expense as a result of discrepancies between the original BIMCO approved
document and this computer generated document.


A-A-1







Printed by BIMCO’s idea


	
  

 
	
 ANNEX
 “A” (DETAILS OF VESSEL OR VESSELS) TO

 
	
 THE
 BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

 
	
 STANDARD
 SHIP MANAGEMENT AGREEMENT - CODE NAME: “SHIPMAN 98”

 
	
  

 
	 

 
	
  

 
	
 Date of Agreement:

 
	
  [to
 be completed]

 
	
 Name of Vessel(s):

 
	
  [to be completed]

 
	
 Particulars of Vessel(s):

 
	
  [to be completed]

 








This document is a computer
generated SHIPMAN 98 form printed by authority of BIMCO. Any insertion or
deletion to the form must be clearly visible. In the event of any modification
made to the pre-printed text of this document which is not clearly visible, the
text of the original BIMCO approved document shall apply. BIMCO assumes no
responsibility for any loss, damage or expense as a result of discrepancies
between the original BIMCO approved document and this computer generated
document.


A-A-2










	
  

 
	
 ANNEX “B” (DETAILS OF CREW) TO  

 
	
 THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)  

 
	
 STANDARD SHIP MANAGEMENT AGREEMENT - CODE NAME: “SHIPMAN 98” 

 
	
  

 
	 

 



Date of Agreement:


Details of Crew:


	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Numbers

 	
  

 	
 Rank

 	
  

 	
 Nationality

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 
	
 ______

 	
  

 	
 ______

 	
  

 	
 ______

 



This
document is a computer generated SHIPMAN 98 form printed by authority of BIMCO.
Any insertion or deletion to the form must be clearly visible. In the event of
any modification made to the pre-printed text of this document which is not
clearly visible, the text of the original BIMCO approved document shall apply.
BIMCO assumes no responsibility for any loss, damage or expense as a result of
discrepancies between the original BIMCO approved document and this computer
generated document. 


A-A-3







Printed by BIMCO’s idea


	
  

 
	
 ANNEX “C” (BUDGET) TO

 
	
 THE BALTIC AND INTERNATIONAL MARITIME
 COUNCIL (BIMCO)

 
	
 STANDARD SHIP MANAGEMENT AGREEMENT - CODE
 NAME: “SHIPMAN 98”

 
	
  

 
	 

 



Date of Agreement:



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





This
document is a computer generated SHIPMAN 98 form printed by authority of BIMCO.
Any insertion or deletion to the form must be clearly visible. In the event of
any modification made to the pre-printed text of this document which is not
clearly visible, the text of the original BIMCO approved document shall apply.
BIMCO assumes no responsibility for any loss, damage or expense as a result of
discrepancies between the original BIMCO approved document and this computer
generated document. 


A-A-4










	
  

 
	
 ANNEX “D” (ASSOCIATED VESSELS) TO

 
	
 THE BALTIC AND INTERNATIONAL MARITIME
 COUNCIL (BIMCO)

 
	
 STANDARD SHIP MANAGEMENT AGREEMENT - CODE
 NAME: “SHIPMAN 98”

 
	
  

 
	 

 



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


Date of Agreement:


	
  

 



Details of Associated Vessels:


	
  

 



This
document is a computer generated SHIPMAN 98 form printed by authority of BIMCO.
Any insertion or deletion to the form must be clearly visible. In the event of
any modification made to the pre-printed text of this document which is not
clearly visible, the text of the original BIMCO approved document shall apply.
BIMCO assumes no responsibility for any loss, damage or expense as a result of discrepancies
between the original BIMCO approved document and this computer generated
document. 


A-A-5







PART II

“SHIPMAN 98” Standard Ship Management Agreement



	
  

 	
  

 	
  

 	
  

 
	
 1. 

 	
 Definitions

 	
  

 	
 1

 
	
  

 	
 In this Agreement save where the
 context otherwise requires,

 	
  

 	
 2

 
	
  

 	
 the following words and
 expressions shall have the meanings

 	
  

 	
 3

 
	
  

 	
 hereby assigned to them.

 	
  

 	
 4

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Owners” means the party identified in Box 2.

 	
  

 	
 5

 
	
  

 	
  “Managers” means the party identified in Box 3.

 	
  

 	
 6

 
	
  

 	
  “Vessel” means the vessel or vessels details of which are set

 	
  

 	
 7

 
	
  

 	
 out in Annex “A” attached hereto.

 	
  

 	
 8

 
	
  

 	
  “Business Day” shall have the same meaning as ascribed

 	
  

 	
  

 
	
  

 	
 thereto in Section 1.1 of the Group Management Agreement.

 	
  

 	
  

 
	
  

 	
  “Crew” means the Master, officers and ratings employed on the

 	
  

 	
 9

 
	
  

 	
 Vessel from time to timeof the numbers,

 	
  

 	
  

 
	
  

 	
 rank
 and nationality specified in Annex “B” attached hereto.

 	
  

 	
 10

 
	
  

 	
 “Crew Support Costs” means all expenses of a general nature

 	
  

 	
 11

 
	
  

 	
 which
 are not particularly referable to any individual vessel for

 	
  

 	
 12

 
	
  

 	
 the
 time being managed by the Managers and which are incurred

 	
  

 	
 13

 
	
  

 	
 by
 the Managers for the purpose of providing an efficient and

 	
  

 	
 14

 
	
  

 	
 economic
 management service and, without prejudice to the

 	
  

 	
 15

 
	
  

 	
 generality
 of the foregoing, shall include the cost of crew standby

 	
  

 	
 16

 
	
  

 	
 pay,
 training schemes for officers and ratings, cadet training

 	
  

 	
 17

 
	
  

 	
 schemes,
 sick pay, study pay, recruitment and interviews.

 	
  

 	
 18

 
	
  

 	
  “Related Manager” shall have the meaning
 as ascribed thereto

 	
  

 	
 19

 
	
  

 	
 in Section 1.1 of the Group Management
 Agreement.

 	
  

 	
  

 
	
  

 	
  “Severance
 Costs” means the costs which the
 employers are

 	
  

 	
  

 
	
  

 	
 legally obliged to pay to or in
 respect of the Crew as a result of

 	
  

 	
 20

 
	
  

 	
 the early termination of any
 employment contract for service on

 	
  

 	
 21

 
	
  

 	
 the Vessel.

 	
  

 	
 22

 
	
  

 	
  “Crew
 Insurances” means insurances against
 crew risks which

 	
  

 	
 23

 
	
  

 	
 shall include but not be limited
 to death, sickness, repatriation,

 	
  

 	
 24

 
	
  

 	
 injury, shipwreck unemployment indemnity
 and loss of personal

 	
  

 	
 25

 
	
  

 	
 effects.

 	
  

 	
 26

 
	
  

 	
  “Group Management Agreement” means the agreement dated [ ]

 	
  

 	
  

 
	
  

 	
 2010 made between the Parent and the Managers.

 	
  

 	
  

 
	
  

 	
  “Management
 Services” means the services
 specified in sub-

 	
  

 	
 27

 
	
  

 	
 clauses 3.1 to 3.8 as indicated
 affirmatively in Boxes 5 to 12.

 	
  

 	
 28

 
	
  

 	
  “ISM Code” means the International Management Code for the

 	
  

 	
 29

 
	
  

 	
 Safe Operation of Ships and for
 Pollution Prevention as adopted

 	
  

 	
 30

 
	
  

 	
 by the International Maritime
 Organization (IMO) by resolution

 	
  

 	
 31

 
	
  

 	
 A.741(18) or any subsequent
 amendment thereto.

 	
  

 	
 32

 
	
  

 	
  “ISPS Code” means the International Ship and Port Facility

 	
  

 	
  

 
	
  

 	
 Security Code constituted pursuant to resolution A.924(22)
 of

 	
  

 	
  

 
	
  

 	
 the International Maritime Organisation now set out in
 Chapter

 	
  

 	
  

 
	
  

 	
 XI-2 of the International Convention for the Safety of Life
 at Sea

 	
  

 	
  

 
	
  

 	
  (SOLAS) 1974 (as amended) and the mandatory ISPS Code as

 	
  

 	
  

 
	
  

 	
 adopted by a Diplomatic Conference of the International

 	
  

 	
  

 
	
  

 	
 Maritime Organisation on Maritime Security in December 2002

 	
  

 	
  

 
	
  

 	

 and includes any amendments or extensions to it and any

 	
  

 	
  

 
	
  

 	
 regulation issued pursuant to it.

 	
  

 	
  

 
	
  

 	
  “Parent” means Costamare Inc. of Trust Company Complex,

 	
  

 	
  

 
	
  

 	
 Ajeltake Road, Ajeltake Island, Majuro, Republic of the
 Marshall

 	
  

 	
  

 
	
  

 	
 Islands MH96960.

 	
  

 	
  

 
	
  

 	
  “STCW 95” means the International Convention on Standards

 	
  

 	
 33

 
	
  

 	
 of Training, Certification and
 Watchkeeping for Seafarers, 1978,

 	
  

 	
 34

 
	
  

 	
 as amended in 1995 or any
 subsequent amendment thereto.

 	
  

 	
 35

 
	
  

 	
  

 	
  

 	
  

 
	
 2.

 	
 Appointment of
 Managers

 	
  

 	
 36

 
	
  

 	
 With effect from the day and year
 stated in Box 4 and continuing

 	
  

 	
 37

 
	
  

 	
 unless and until terminated provided herein, the Owners

 	
  

 	
 38

 
	
  

 	
 hereby appoint the Managers as the
technical and commercial managers of the Vessel and
 the Managers hereby agree

 	
  

 	
 39

 
	
  

 	
 to act as the technical and commercial Mmanagers of the Vessel.

 	
  

 	
 40

 
	
  

 	
  

 	
  

 	
  

 
	
 3.

 	
 Basis of
 Agreement

 	
  

 	
 41

 
	
  

 	
 Subject to the terms and
 conditions herein provided, during the

 	
  

 	
 42

 
	
  

 	
 period of this Agreement, the
 Managers shall carry out

 	
  

 	
 43

 
	
  

 	
 Management Services in respect of
 the Vessel as agents for

 	
  

 	
 44

 
	
  

 	
 and on behalf of the Owners. Subject to Section 4.6 of
 the Group

 	
  

 	
 45

 
	
  

 	
 Management Agreement, Tthe
 Managers shall have authority

 	
  

 	
  

 
	
  

 	
 to take such actions as they may
 from time to time in their absolute

 	
  

 	
 46

 
	
  

 	
 discretion consider to be
 necessary to enable them to perform

 	
  

 	
 47

 
	
  

 	
 this Agreement in accordance with
 sound ship management

 	
  

 	
 48

 
	
  

 	
 practice.

 	
  

 	
 49

 








	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.1

 	
 Crew Management

 	
  

 	
 50

 
	
  

 	
 (only applicable if agreed according to Box 5)

 	
  

 	
 51

 
	
  

 	
 The Managers shall provide
 suitably qualified Crew for the Vessel

 	
  

 	
 52

 
	
  

 	
 as required by the Owners in
 accordance with the STCW 95

 	
  

 	
 53

 
	
  

 	
 requirements, provision of which
 includes but is not limited to

 	
  

 	
 54

 
	
  

 	
 the following functions:

 	
  

 	
 55

 
	
  

 	
  (i)

 	
 selecting and engaging the
 Vessel’s Crew, including payroll

 	
  

 	
 56

 
	
  

 	
  

 	
 arrangements, pension
 administration, and insurances for

 	
  

 	
 57

 
	
  

 	
  

 	
 the Crew other than those
 mentioned in Clause 6;

 	
  

 	
 58

 
	
  

 	
  (ii)

 	
 ensuring that the applicable
 requirements of the law of the

 	
  

 	
 59

 
	
  

 	
  

 	
 flag of the Vessel are satisfied
 in respect of manning levels,

 	
  

 	
 60

 
	
  

 	
  

 	
 rank, qualification and
 certification of the Crew and

 	
  

 	
 61

 
	
  

 	
  

 	
 employment regulations including
 Crew’s tax, social

 	
  

 	
 62

 
	
  

 	
  

 	
 insurance, discipline and other
 requirements;

 	
  

 	
 63

 
	
  

 	
  (iii)

 	
 ensuring that all members of the
 Crew have passed a medical

 	
  

 	
 64

 
	
  

 	
  

 	
 examination with a qualified
 doctor certifying that they are fit

 	
  

 	
 65

 
	
  

 	
  

 	
 for the duties for which they are
 engaged and are in possession

 	
  

 	
 66

 
	
  

 	
  

 	
 of valid medical certificates
 issued in accordance with

 	
  

 	
 67

 
	
  

 	
  

 	
 appropriate flag State
 requirements. In the absence of

 	
  

 	
 68

 
	
  

 	
  

 	
 applicable flag State
 requirements the medical certificate shall

 	
  

 	
 69

 
	
  

 	
  

 	
 be dated not more than three months
 prior to the respective

 	
  

 	
 70

 
	
  

 	
  

 	
 Crew members leaving their
 country of domicile and

 	
  

 	
 71

 
	
  

 	
  

 	
 maintained for the duration of
 their service on board the Vessel;

 	
  

 	
 72

 
	
  

 	
  (iv)

 	
 ensuring that the Crew shall have
 a command of the English

 	
  

 	
 73

 
	
  

 	
  

 	
 language of a sufficient standard
 to enable them to perform

 	
  

 	
 74

 
	
  

 	
  

 	
 their duties safely;

 	
  

 	
 75

 
	
  

 	
  (v)

 	
 arranging transportation of the
 Crew, including repatriation,

 	
  

 	
 76

 
	
  

 	
 board and lodging as and when required at rates and types
 of

 	
  

 	
  

 
	
  

 	
 accommodations as customary in the industry;

 	
  

 	
  

 
	
  

 	
  (vi)

 	
 training of the Crew and
 supervising their efficiency;

 	
  

 	
 77

 
	
  

 	
  (vii)

 	
 keeping and maintaining full and complete records of any

 	
  

 	
 78

 
	
  

 	
 labor agreements which may be entered into with the Crew
 and,

 	
  

 	
  

 
	
  

 	
 if applicable, conducting union negotiations;

 	
  

 	
  

 
	
  

 	
  (viii)

 	
 operating the Managers’ drug and
 alcohol policy unless

 	
  

 	
 79

 
	
  

 	
  

 	
 otherwise agreed in writing.

 	
  

 	
 80

 
	
  

 	
  

 	
  

 	
  


 	
  

 
	
  

 	
 3.2

 	
 Technical
 Management

 	
  

 	
 81

 
	
  

 	
 (only applicable if agreed according to Box 6)

 	
  

 	
 82

 
	
  

 	
 The Managers shall provide
 technical management which

 	
  

 	
 83

 
	
  

 	
 includes, but is not limited to,
 the following functions:

 	
  

 	
 84

 
	
  

 	
  (i)

 	
 provision of competent personnel
 to supervise the

 	
  

 	
 85

 
	
  

 	
  

 	
 maintenance and general
 efficiency of the Vessel;

 	
  

 	
 86

 
	
  

 	
  (ii)

 	
 arrangement and supervision of
 dry dockings, repairs,

 	
  

 	
 87

 
	
  

 	
  

 	
 alterations and the upkeep of the
 Vessel to the standards

 	
  

 	
 88

 
	
  

 	
  

 	
 required by the Owners provided
 that the Managers shall

 	
  

 	
 89

 
	
  

 	
  

 	
 be entitled to incur the
 necessary expenditure to ensure

 	
  

 	
 90

 
	
  

 	
  

 	
 that the Vessel will comply with
 the law of the flag of the

 	
  

 	
 91

 
	
  

 	
  

 	
 Vessel and of the places where
 she trades, and all

 	
  

 	
 92

 
	
  

 	
  

 	
 requirements and recommendations
 of the classification

 	
  

 	
 93

 
	
  

 	
  

 	
 society;

 	
  

 	
 94

 
	
  

 	
 (iii)

 	
 arrangement of the supply of necessary stores, spares and

 	
  

 	
 95

 
	
  

 	
  

 	
 lubricating oil;

 	
  

 	
 96

 
	
  

 	
  (iv) 

 	
 appointment of surveyors and
 technical consultants as the

 	
  

 	
 97

 
	
  

 	
  

 	
 Managers may consider from time
 to time to be necessary;

 	
  

 	
 98

 
	
  

 	
  (v)

 	
 development, implementation and
 maintenance of a Safety

 	
  

 	
 99

 
	
  

 	
  

 	
 Management System (SMS) in
 accordance with the ISM

 	
  

 	
 100

 
	
  

 	
  

 	
 Code (see sub-clauses 4.2 and 5.3) and of a security system
 in

 	
  

 	
 101

 
	
  

 	
  

 	
 accordance with the ISPS Code;

 	
  

 	
  

 
	
  

 	
  

 	
  (vi) handling any claims against the builder of the Vessel

 	
  

 	
  

 
	
  

 	
  

 	
 arising out of the relevant shipbuilding contract, if

 	
  

 	
  

 
	
  

 	
  

 	
 applicable; and

 	
  

 	
  

 
	
  

 	
  

 	
  (vii) on request by the Owners, providing the Owners with a

 	
  

 	
  

 
	
  

 	
  

 	
 copy of any inspection report, survey, valuation or any
 other

 	
  

 	
  

 
	
  

 	
  

 	
 similar report prepared by any shipbrokers, surveyors, the

 	
  

 	
  

 
	
  

 	
  

 	
 Class etc..

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.3

 	
 Commercial
 Management

 	
  

 	
 102

 
	
  

 	
  (only
 applicable if agreed according to Box 7)

 	
  

 	
 103

 
	
  

 	
 The Managers shall provide the commercial operation of the

 	
  

 	
 104

 
	
  

 	
 Vessel, as required by the Owners, which includes, but is not

 	
  

 	
 105

 
	
  

 	
 limited
 to, the following functions:

 	
  

 	
 106

 
	
  

 	
 (i)

 	
 providing
 chartering services in accordance with the Owners’

 	
  

 	
 107

 









This document is a computer generated SHIPMAN 98 form printed by
authority of BIMCO. Any insertion or deletion to the form must be clearly
visible. In the event of any modification made to the pre-printed text of this
document which is not clearly visible, the text of the original BIMCO approved
document shall apply. BIMCO assumes no responsibility for any loss, damage or
expense as a result of discrepancies between the original BIMCO approved
document and this computer generated document. 


A-A-6







PART II

“SHIPMAN 98” Standard Ship Management Agreement



	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	

 instructions which include, but are not limited to, seeking

 	
  

 	
 108

 
	
  

 	
  

 	
 and
 negotiating employment for the Vessel and the conclusion

 	
  

 	
 109

 
	
  

 	
  

 	
 (including
 the execution thereof) of charter parties or other

 	
  

 	
 110

 
	
  

 	
  

 	
 contracts
 relating to the employment of the Vessel, whether on a voyage, time, demise, contract of affreightment or other basis. If such a

 	
  

 	
 111

 
	
  

 	
  

 	
 contract
exceeds the period  and is for a rate that is less than the rate, in either case,  stated in  Box 13,
consent thereto 

 	
  

 	
 112

 
	
  

 	
  

 	
 in
 writing shall first be obtained from the Owners.   

 	
  

 	
 113

 
	
  

 	
 (ii)

 	
 arranging
 of the proper payment to Owners or their nominees

 	
  

 	
 114

 
	
  

 	
  

 	
 of
 all hire and/or freight revenues or other moneys of

 	
  

 	
 115

 
	
  

 	
  

 	
 whatsoever
 nature to which Owners may be entitled arising

 	
  

 	
 116

 
	
  

 	
  

 	
 out
 of the employment of or otherwise in connection with the

 	
  

 	
 117

 
	
  

 	
  

 	
 Vessel;.

 	
  

 	
 118

 
	
  

 	
 (iii)

 	
 providing
 voyage estimates and accounts and calculating of

 	
  

 	
 119

 
	
  

 	
  

 	
 hire,
 freights, demurrage and/or despatch moneys due from

 	
  

 	
 120

 
	
  

 	
  

 	
 or
 due to the charterers of the Vessel;

 	
  

 	
 121

 
	
  

 	
 (iv)

 	
 issuing to the Crew of appropriate voyage instructions and monitoring voyage performance;

 	
  

 	
 122

 
	
  

 	
  (v)

 	
 appointing agents;

 	
  

 	
 123

 
	
  

 	
  (vi) 

 	
 appointing stevedores;

 	
  

 	
 124

 
	
  

 	
  (vii)

 	
 arranging surveys associated with
 the commercial operation

 	
  

 	
 125

 
	
  

 	
  

 	
 of the Vessel;

 	
  

 	
 126

 
	
  

 	
  

 	
 (viii) carrying out the necessary communications with the
shippers, charterers and others involved with the
receiving and handling of the Vessel at the relevant
loading and discharging ports, including sending any
notices required under the terms of the Vessel’s
employment at the time; (ix) invoicing on behalf of the
Owners all freights, hires, demurrages, outgoing claims,
refund of taxes, balances of disbursements, statements of
account and other sums due to the Owners and account
receivables arising from the operation of the Vessel and,
upon the request of the Owners, issuing releases on
behalf of the Owners upon receipt of payment or
settlement of any such amounts; (x) preparing off-hire
statements and/or hire statements; (xi) procuring and
arranging for port entrance and clearance, pilots,
consular approvals and other services necessary for the
management and safe operation of the Vessel; and (xii)
reporting to the Owners of any major casualties, damages
received or caused by the Vessel or any major release or
discharge of oil or other hazardous material not in
compliance with any laws. 

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.4

 	
 Insurance
 Arrangements’

 	
  

 	
 127

 
	
  

 	
  (only
 applicable if agreed according to Box 8)

 	
  

 	
 128

 
	
  

 	
 The Managers shall arrange
 insurances in accordance with

 	
  

 	
 129

 
	
  

 	
 Clause 6, on such terms and
 conditions as the Owners shall

 	
  

 	
 130

 
	
  

 	
 have instructed or agreed, in
particular regarding  underwriters, 
conditions, 

 	
  

 	
 131

 
	
  

 	
 insured values, deductibles and
 franchises.

 	
  

 	
 132

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.5

 	
 Accounting
 Services

 	
  

 	
 133

 
	
  

 	
  (only
 applicable if agreed according to Box 9)

 	
  

 	
 134

 
	
  

 	
 Without prejudice to the relevant provisions of the Group

 	
  

 	
 135

 
	
  

 	
 Management Agreement and, in particular, but without

 	
  

 	
  

 
	
  

 	
 limitation, Section 4.11, Section 5.1 and Section 10.6 thereof,Tthe Managers 

 	
  

 	
  

 
	
  

 	
 shall:

 	
  

 	
  

 
	
  

 	
  (i)

 	
 establish an accounting system
 which meets the

 	
  

 	
 136

 
	
  

 	
  

 	
 requirements of the Owners and
 provide regular accounting

 	
  

 	
 137

 
	
  

 	
  

 	
 services, supply regular reports
 and records,

 	
  

 	
 138

 
	
  

 	
  (ii)

 	
 maintain the records of all costs
 and expenditure incurred

 	
  

 	
 139

 
	
  

 	
  

 	
 as well as data necessary or
 proper for the settlement of

 	
  

 	
 140

 
	
  

 	
  

 	
 accounts between the parties.

 	
  

 	
 141

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.6

 	
 Sale or Purchase
 of the Vessel

 	
  

 	
 142

 
	
  

 	
  (only
 applicable if agreed according to Box 10) 

 	
  

 	
 143

 
	
  

 	
 The Managers shall, in accordance
 with the Owners’ instructions,

 	
  

 	
 144

 
	
  

 	
 supervise
 the sale or purchase of the Vessel, including the

 	
  

 	
 145

 
	
  

 	
 performance of any sale or purchase agreement, but not

 	
  

 	
 146

 
	
  

 	
 negotiation of the same.  The Managers shall, on the request of the 

 	
  

 	
 147

 
	
  

 	
 Owners, either directly or by employing the services of a broker, 

 	
  

 	
  

 
	
  

 	
 endeavor to procure a buyer for the Vessel at a price and 

 	
  

 	
  

 
	
  

 	
 otherwise on terms acceptable to the Owners. 

 	
  

 	
  

 
	
  

 	
 3.7

 	
 Provisions  (only applicable if agreed according to Box 11)

 	
  

 	
 148

 







	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 The Managers shall arrange for
 the supply of provisions.

 	
  

 	
 149

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.8

 	
 Bunkering (only applicable if
agreed according to  Box 12 ) 

 	
  

 	
 150

 
	
  

 	
 The Managers shall arrange for
 the provision of bunker fuel of the

 	
  

 	
 151

 
	
  

 	
 quality specified by the Owners
 as required for the Vessel’s trade.

 	
  

 	
 152

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.

 	
 Managers’
 Obligations

 	
  

 	
 153

 
	
  

 	
 4.1

 	
 Without prejudice to the relevant provisions of the Group 

 	
  

 	
 154

 
	
  

 	
 Management Agreement and in particular, but without limitation 

 	
  

 	
  

 
	
  

 	
 to the foregoing, the provisions of Section 2.3, Section 4.1, 

 	
  

 	
  

 
	
  

 	
 Section 4.5 and Section 4.7 thereof, Tthe Managers undertake to

 	
  

 	
  

 
	
  

 	
 use their best endeavours commercially reasonable efforts to

 	
  

 	
  

 
	
  

 	
 provide the agreed Management
 Services as agents for and on

 	
  

 	
 155

 
	
  

 	
 behalf of the Owners in
 accordance with sound ship management

 	
  

 	
 156

 
	
  

 	
 practice and to protect and
 promote the interests of the Owners in

 	
  

 	
 157

 
	
  

 	
 all matters relating to the
 provision of services hereunder.

 	
  

 	
 158

 
	
  

 	
 Provided, however, that the
 Managers in the performance of their

 	
  

 	
 159

 
	
  

 	
 management responsibilities under
 this Agreement shall be entitled

 	
  

 	
 160

 
	
  

 	
 to have regard to their overall
 responsibility in relation to all vessels

 	
  

 	
 161

 
	
  

 	
 as may from time to time be
 entrusted to their management and

 	
  

 	
 162

 
	
  

 	
 in particular, but without
 prejudice to the generality of the foregoing,

 	
  

 	
 163

 
	
  

 	
 the Managers shall be entitled to
 allocate available supplies,

 	
  

 	
 164

 
	
  

 	
 manpower and services in such
 manner as in the prevailing

 	
  

 	
 165

 
	
  

 	
 circumstances the Managers in
 their absolute discretion consider

 	
  

 	
 166

 
	
  

 	
 to be fair and reasonable.

 	
  

 	
 167

 
	
  

 	
 4.2

 	
 Where the Managers are providing
 Technical Management

 	
  

 	
 168

 
	
  

 	
 in accordance with sub-clause 3.2, they shall procure
 that the

 	
  

 	
 169

 
	
  

 	
 requirements of the law of the
 flag of the Vessel are satisfied and 

 	
  

 	
 170

 
	
  

 	
 they shall in particular be
 deemed to be the “Company” as defined

 	
  

 	
 171

 
	
  

 	
 by the ISM Code, assuming the
 responsibility for the operation of

 	
  

 	
 172

 
	
  

 	
 the Vessel and taking over the
 duties and responsibilities imposed

 	
  

 	
 173

 
	
  

 	
 by the ISM Code and/or the ISPS Code when applicable.

 	
  

 	
 174

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.

 	
 Owners’
 Obligations

 	
  

 	
 175

 
	
  

 	
 5.1

 	
 Without prejudice to the relevant provisions of the Group 

 	
  

 	
 176

 
	
  

 	
 Management Agreement, Tthe Owners shall pay all sums due to 

 	
  

 	
  

 
	
  

 	
 the Managers punctually

 	
  

 	
  

 
	
  

 	
 in accordance with the terms of
 this Agreement.

 	
  

 	
 177

 
	
  

 	
 5.2

 	
 Where the Managers are providing
 Technical Management

 	
  

 	
 178

 
	
  

 	
 in accordance with sub-clause 3.2, the Owners shall:

 	
  

 	
 179

 
	
  

 	
  (i)

 	
 procure that all officers and
 ratings supplied by them or on

 	
  

 	
 180

 
	
  

 	
  

 	
 their behalf comply with the
 requirements of STCW 95;

 	
  

 	
 181

 
	
  

 	
  (ii)

 	
 instruct such officers and
 ratings to obey all reasonable orders

 	
  

 	
 182

 
	
  

 	
  

 	
 of the Managers in connection
 with the operation of the

 	
  

 	
 183

 
	
  

 	
  

 	
 Managers’ safety management
 system.

 	
  

 	
 184

 
	
  

 	
 5.3

 	
 Where the Managers are not
 providing Technical Management

 	
  

 	
 185

 
	
  

 	
 in accordance with sub-clause 3.2, the Owners shall
 procure that

 	
  

 	
 186

 
	
  

 	
 the requirements of the law of
 the flag of the Vessel are satisfied

 	
  

 	
 187

 
	
  

 	
 and that they, or such other
 entity as may be appointed by them

 	
  

 	
 188

 
	
  

 	
 and identified to the Managers,
 shall be deemed to be the

 	
  

 	
 189

 
	
  

 	
 “Company” as defined by the ISM
 Code assuming the responsibility

 	
  

 	
 190

 
	
  

 	
 for the operation of the Vessel
 and taking over the duties and

 	
  

 	
 191

 
	
  

 	
 responsibilities imposed by the
 ISM Code when applicable.

 	
  

 	
 192

 
	
  

 	
  

 	
  

 	
  

 
	
 6.

 	
 Insurance
 Policies

 	
  

 	
 193

 
	
  

 	
 The Owners shall procure, whether by instructing the Managers

 	
  

 	
 194

 
	
  

 	
 under sub-clause 3.4 or otherwise, that throughout the period of

 	
  

 	
 195

 
	
  

 	
 this Agreement:

 	
  

 	
 196

 
	
  

 	
 6.1

 	
 at the Owners’ expense, the
 Vessel is insured for not less

 	
  

 	
 197

 
	
  

 	
 than her sound market value or
 entered for her full gross tonnage,

 	
  

 	
 198

 
	
  

 	
 as the case may be for:

 	
  

 	
 199

 
	
  

 	
  (i)

 	
 usual hull and machinery marine
 risks (including crew

 	
  

 	
 200

 
	
  

 	
  

 	
 negligence) and excess
 liabilities;

 	
  

 	
 201

 
	
  

 	
  (ii)

 	
 protection and indemnity risks
 (including pollution risks and

 	
  

 	
 202

 
	
  

 	
  

 	
 Crew Insurances);and

 	
  

 	
 203

 
	
  

 	
  (iii)

 	
 war risks (including protection
 and indemnity and crew risks);

 	
  

 	
 204

 
	
  

 	
 and

 	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 any other insurance that the Owners determine
or the Managers advise them in writing that, in either case, it is prudent or, as the
case may be, appropriate on the basis of prevailing market practices to be obtained in respect of the Vessel, its freight/hire or any
third party liabilities,

 	
  

 	
  

 
	
  

 	
 in each case in
 accordance with the best practice of prudent owners

 	
  

 	
 205

 
	
  

 	
 of

 	
  

 	
  

 	
  

 








This
document is a computer generated SHIPMAN 98 form printed by authority of BIMCO.
Any insertion or deletion to the form must be clearly visible. In the event of
any modification made to the pre-printed text of this document which is not
clearly visible, the text of the original BIMCO approved document shall apply.
BIMCO assumes no responsibility for any loss, damage or expense as a result of
discrepancies between the original BIMCO approved document and this computer
generated document.


A-A-7






PART II

“SHIPMAN 98” Standard Ship Management Agreement


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 vessels of a similar type to the
 Vessel, with first class insurance

 	
  

 	
 206

 
	
  

 	
 companies, underwriters or
 associations (“the Owners’

 	
  

 	
 207

 
	
  

 	
 Insurances”);

 	
  

 	
 208

 
	
  

 	
 6.2

 	
 all premiums and calls and applicable deductibles
 and/or

 	
  

 	
 209

 
	
  

 	
 franchises on the
 Owners’ Insurances are paid

 	
  

 	
  

 
	
  

 	
 promptly by their due date,

 	
  

 	
 210

 
	
  

 	
 6.3

 	
 the Owners’ Insurances name the
 Managers and, subject

 	
  

 	
 211

 
	
  

 	
 to underwriters’ agreement, any
 third party designated by the

 	
  

 	
 212

 
	
  

 	
 Managers as a joint assured, with
 full cover, with the Owners

 	
  

 	
 213

 
	
  

 	
 obtaining cover in respect of
 each of the insurances specified in

 	
  

 	
 214

 
	
  

 	
 sub-clause 6.1:

 	
  

 	
 215

 
	
  

 	
  (i)

 	
 on terms whereby the Managers and
 any such third party

 	
  

 	
 216

 
	
  

 	
  

 	
 are liable in respect of premiums
 or calls arising in connection

 	
  

 	
 217

 
	
  

 	
  

 	
 with the Owners’ Insurances; or

 	
  

 	
 218

 
	
  

 	
  (ii)

 	
 if reasonably obtainable, on
 terms such that neither the

 	
  

 	
 219

 
	
  

 	
  

 	
 Managers nor any such third party
 shall be under any

 	
  

 	
 220

 
	
  

 	
  

 	
 liability in respect of premiums
 or calls arising in connection

 	
  

 	
 221

 
	
  

 	
  

 	
 with the Owners’ Insurances; or

 	
  

 	
 222

 
	
  

 	
  (iii)

 	
 on such other terms as may be
 agreed in writing. 

 	
  

 	
 223

 
	
  

 	
 Indicate
 alternative (i), (ii) or (iii) in Box 14. If Box 14 is left

 	
  

 	
 224

 
	
  

 	
 blank then (i)
 applies.

 	
  

 	
 225

 
	
  

 	
 6.4

 	
 written evidence is provided, to
 the reasonable satisfaction

 	
  

 	
 226

 
	
  

 	
 of the Managers, of their
 compliance with their obligations under

 	
  

 	
 227

 
	
  

 	
 Clause
 6 within a reasonable time of the
 commencement of

 	
  

 	
 228

 
	
  

 	
 the Agreement, and of each
 renewal date and, if specifically

 	
  

 	
 229

 
	
  

 	
 requested, of each payment date
 of the Owners’ Insurances.

 	
  

 	
 230

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.

 	
 Income Collected
 and Expenses Paid on Behalf of Owners

 	
  

 	
 231

 
	
  

 	
 7.1

 	
 Without prejudice to the provisions of Section 10.7 of the 

 	
  

 	
 232

 
	
  

 	
 Group Management Agreement, Aall moneys collected by the  

 	
  

 	
  

 
	
  

 	
 Managers under the terms of

 	
  

 	
  

 
	
  

 	
 this Agreement (other than moneys payable by the Owners to

 	
  

 	
 233

 
	
  

 	
 the Managers) and any interest
 thereon shall be held to the

 	
  

 	
 234

 
	
  

 	
 credit of the Owners in a
 separate bank account.

 	
  

 	
 235

 
	
  

 	
 7.2

 	
 Without prejudice to the provisions of Section 9.7, Section 

 	
  

 	
 236

 
	
  

 	
 10.5 and Section 10.8 of the Group Management Agreement, Aall

 	
  

 	
  

 
	
  

 	
 expenses incurred by the Managers
 under the terms

 	
  

 	
  

 
	
  

 	
 of this Agreement on behalf of
 the Owners (including expenses

 	
  

 	
 237

 
	
  

 	
 as provided in Clause 8) may be
 debited against the Owners

 	
  

 	
 238

 
	
  

 	
 in the account referred to under
 sub-clause 7.1 but shall in any

 	
  

 	
 239

 
	
  

 	
 event remain payable by the
 Owners to the Managers on

 	
  

 	
 240

 
	
  

 	
 demand. For the avoidance of doubt, the Managers can make

 	
  

 	
 241

 
	
  

 	
 such demand on the Owners as well as on the Parent as

 	
  

 	
  

 
	
  

 	
 provided in Section 10.5 of the Group Management Agreement.

 	
  

 	
  

 
	
  

 	
 Furthermore and without prejudice to the generality of the

 	
  

 	
  

 
	
  

 	
 provisions of this Clause 7, the Managers shall, subject to
 being

 	
  

 	
  

 
	
  

 	
 placed in funds by the Owners or the Parent, arrange for
 the

 	
  

 	
  

 
	
  

 	
 payment of all ordinary charges incurred in connection with
 the

 	
  

 	
  

 
	
  

 	
 Management Services, including, but not limited to, all canal

 	
  

 	
  

 
	
  

 	
 tolls, port charges, amounts due to any governmental

 	
  

 	
  

 
	
  

 	
 authority with respect to the Crew and all duties and taxes in

 	
  

 	
  

 
	
  

 	
 respect of the Vessel, the cargo, hire or freight (whether levied

 	
  

 	
  

 
	
  

 	
 against the Owners, the Parent or the Vessel), insurance

 	
  

 	
  

 
	
  

 	

 premiums, advances of balances of disbursements, invoices for

 	
  

 	
  

 
	
  

 	
 bunkers, stores, spares, provisions, repairs and any other

 	
  

 	
  

 
	
  

 	
 material and/or service in respect of the
 Vessel.

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 8.

 	
 Management Fee

 	
  

 	
 242

 
	
  

 	
 8.1

 	
 The Owners shall pay to the Managers
 for their services

 	
  

 	
 243

 
	
  

 	
 as Managers under this Agreement an annual the management

 	
  

 	
 244

 
	
  

 	
 fees as stated in Box 15 Section 9.1(a) and Section 9(b) of the

 	
  

 	
 245

 
	
  

 	
 Group Management Agreement which shall be payable by equal

 	
  

 	
  

 
	
  

 	
 monthly instalments in advance, the first instalment being monthly

 	
  

 	
 246

 
	
  

 	
 in accordance with the provisions of Article IX of the Group 

 	
  

 	
  

 
	
  

 	
 Management Agreement. 

 	
  

 	
  

 
	
  

 	
 payable on the
 commencement of this Agreement (see Clause

 	
  

 	
 247

 
	
  

 	
 2 and Box 4) and subsequent
 instalments being payable every 

 	
  

 	
 248

 
	
  

 	
 month.

 	
  

 	
 249

 
	
  

 	
 8.2

 	
 The  management fee
 shall be subject to an annual review

 	
  

 	
 250

 
	
  

 	
 in accordance with the provisions of Sections 9.2 and 9.3 of the 

 	
  

 	
 251

 
	
  

 	
 Group Management Agreement on the anniversary date of the

 	
  

 	
  

 
	
  

 	
 Agreement and the proposed

 	
  

 	
  

 
	
  

 	
 fee shall be presented in the
 annual budget referred to in sub-

 	
  

 	
 252

 
	
  

 	
 clause
 9.1.

 	
  

 	
 253

 
	
  

 	
 8.3

 	
 The Managers shall, at no extra
 cost to the Owners, provide

 	
  

 	
 254

 
	
  

 	
 their own office accommodation,
 office staff, facilities and

 	
  

 	
 255

 
	
  

 	
 stationery. Without limiting the
 generality of Clause 7 the Owners

 	
  

 	
 256

 







	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 shall reimburse the Managers for
 postage and communication

 	
  

 	
 257

 
	
  

 	
 expenses, travelling expenses,
 and other out of pocket

 	
  

 	
 258

 
	
  

 	
 expenses properly incurred by the
 Managers in pursuance of

 	
  

 	
 259

 
	
  

 	
 the Management Services.

 	
  

 	
 260

 
	
  

 	
 8.4

 	
 The provisions of Section 9.4, Section 9.5, Section 9.6 and Section 9.7
 of

 	
  

 	
 261

 
	
  

 	
 the Group Management Agreement shall be deemed as

 	
  

 	
  

 
	
  

 	
 incorporated herein mutatis mutandis.

 	
  

 	
  

 
	
  

 	
 8.5

 	
 The Managers have the right to demand the payment of any

 	
  

 	
  

 
	
  

 	
 of the management fees and expenses payable under this

 	
  

 	
  

 
	
  

 	
 Agreement either from the Parent or the Owners. Payment of

 	
  

 	
  

 
	
  

 	
 any such fees or expenses or any part thereof by either the

 	
  

 	
  

 
	
  

 	
 Parent or the Owners shall prevent the Managers from making
 a

 	
  

 	
  

 
	
  

 	
 claim on the other person for the same amount to the extent

 	
  

 	
  

 
	
  

 	
 that the same has been already paid to the Managers.

 	
  

 	
  

 
	
  

 	
 In
 the event of the appointment of the Managers being

 	
  

 	
  

 
	
  

 	
 terminated
 by the Owners or the Managers in accordance with

 	
  

 	
 262

 
	
  

 	
 the
 provisions of Clauses 17 and 18 other than by reason of

 	
  

 	
 263

 
	
  

 	
 default
 by the Managers, or if the Vessel is lost, sold or otherwise

 	
  

 	
 264

 
	
  

 	
 Disposed
 of, the “management fee” payable to the Managers

 	
  

 	
 265

 
	
  

 	
 According
 to the provisions of sub-clause 8.1, shall continue to

 	
  

 	
 266

 
	
  

 	
 be
 payable for a further period of three calendar months as

 	
  

 	
 267

 
	
  

 	
 from
 the termination date. In addition, provided that the

 	
  

 	
 268

 
	
  

 	
 Managers
 provide Crew for the Vessel in accordance with sub-

 	
  

 	
 269

 
	
  

 	
 clause- 3,1:

 	
  

 	
 270

 
	
  

 	
 (i)    

 	
 the
 Owners shall continue to pay Crew Support Costs during

 	
  

 	
 271

 
	
  

 	
  

 	
 the
 said further period of three calendar months and

 	
  

 	
 272

 
	
  

 	
 (ii)    

 	
 the
 Owners shall pay an equitable proportion of any 

 	
  

 	
 273

 
	
  

 	
  

 	
 Severance
 Costs which may materialize, not exceeding

 	
  

 	
 274

 
	
  

 	
  

 	
 the
 amount stated in Box 16.

 	
  

 	
 275

 
	
  

 	
 8.5    

 	
 If
 the Owners decide to lay up the Vessel whilst this

 	
  

 	
 276

 
	
  

 	
 Agreement
 remains in force and such lay up lasts for more

 	
  

 	
 277

 
	
  

 	
 than
 three months, an appropriate reduction of the management

 	
  

 	
 278

 
	
  

 	
 fee
 for the period exceeding three months until one month

 	
  

 	
 279

 
	
  

 	
 before
 the Vessel is again put into service shall be mutually

 	
  

 	
 280

 
	
  

 	
 agreed
 between the parties.

 	
  

 	
 281

 
	
  

 	
 8.6     Unless
 otherwise agreed in writing all discounts and

 	
  

 	
 282

 
	
  

 	
 commissions
 obtained by the Managers in the course of the

 	
  

 	
 283

 
	
  

 	
 management
 of the Vessel shall be credited to the Owners.

 	
  

 	
 284

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 9.

 	
 Budgets and
 Management of Funds

 	
  

 	
 285

 
	
  

 	
 9.1

 	
 The Owners are aware that the Managers will be preparing

 	
  

 	
 286

 
	
  

 	
 budgets in connection with, inter alia, the provision of the

 	
  

 	
  

 
	
  

 	
 Management Services which the Managers will
 be submitting 

 	
  

 	
  

 
	
  

 	
 for approval to the Parent in accordance with
 the provisions of

 	
  

 	
  

 
	
  

 	
 Article X of the Group Management Agreement.The Managers

 	
  

 	
  

 
	
  

 	
 shall present to the Owners annually a

 	
  

 	
  

 
	
  

 	
  budget for the following twelve
 months in such form as the

 	
  

 	
 287

 
	
  

 	
  Owners require. The budget for the first year hereof is set
 out

 	
  

 	
 288

 
	
  

 	
 in
 Annex “C” hereto. Subsequent annual budgets shall be

 	
  

 	
 289

 
	
  

 	
 prepared by the Managers and submitted
 to the Owners not

 	
  

 	
 290

 
	
  

 	
 less
 than three months before the anniversary date of the

 	
  

 	
 291

 
	
  

 	
 commencement
 of this Agreement (see Clause 2 and Box 4).

 	
  

 	
 292

 
	
  

 	
 9.2     The Owners shall
 indicate to the Managers their acceptance

 	
  

 	
 293

 
	
  

 	
 and approval of the annual budget
 within one month of

 	
  

 	
 294

 
	
  

 	
 presentation and in the absence
 of any such indication the

 	
  

 	
 295

 
	
  

 	
 Managers shall be entitled to
 assume that the Owners have

 	
  

 	
 296

 
	
  

 	
 accepted the proposed budget.

 	
  

 	
 297

 
	
  

 	
 9.3     Following
 the agreement of the budget, the Managers shall

 	
  

 	
 298

 
	
  

 	
 prepare
 and present to the Owners their estimate of the working

 	
  

 	
 299

 
	
  

 	
 capital
 requirement of the Vessel and the Managers shall each 

 	
  

 	
 300

 
	
  

 	
 month
 up date this estimate. Based thereon, Without
 prejudice to

 	
  

 	
 301

 
	
  

 	
 the right of the Managers to ask for funds in relation to
 the

 	
  

 	
  

 
	
  

 	
 Management Services directly from the Parent in accordance

 	
  

 	
  

 
	
  

 	
 with the relevant provisions of the Group Management

 	
  

 	
  

 
	
  

 	
 Agreement, the
 Managers shall

 	
  

 	
  

 
	
  

 	
 each month request the Owners in
 writing for the funds required

 	
  

 	
 302

 
	
  

 	
 to run the Vessel for the ensuing
 month, including the payment

 	
  

 	
 303

 
	
  

 	
 of any occasional or
 extraordinary item of expenditure, such as

 	
  

 	
 304

 
	
  

 	
 emergency repair costs,
 additional insurance premiums, bunkers

 	
  

 	
 305

 
	
  

 	
 or provisions. Such funds shall
 be received by the Managers

 	
  

 	
 306

 
	
  

 	
 within ten running days after the
 receipt by the Owners of the

 	
  

 	
 307

 
	
  

 	
 Managers’ written request and
 shall be held to the credit of
 the

 	
  

 	
 308

 
	
  

 	
 Owners in a separate bank account in the name of the Managers

 	
  

 	
 309

 
	
  

 	
 or, if requested by the Managers, in the name of the
 Owners.

 	
  

 	
  

 
	
  

 	
 9.4     The
 Managers shall produce a comparison between

 	
  

 	
 310

 








This
document is a computer generated SHIPMAN 98 form printed by authority of BIMCO.
Any insertion or deletion to the form must be clearly visible. In the event of
any modification made to the pre-printed text of this document which is not
clearly visible, the text of the original BIMCO approved document shall apply.
BIMCO assumes no responsibility for any loss, damage or expense as a result of
discrepancies between the original BIMCO approved document and this computer
generated document.


A-A-8






PART II

“SHIPMAN 98” Standard Ship Management Agreement


	
  

 	
  

 	
  


 	
  

 	
  

 
	
  

 	
 budgeted
 and actual income and expenditure of the Vessel in

 	
  

 	
 311

 
	
  

 	
 such
 form as required by the Owners monthly or at such other

 	
  

 	
 312

 
	
  

 	
 intervals
 as mutually agreed.

 	
  

 	
 313

 
	
  

 	
 9.5

 	
 Notwithstanding anything
 contained herein to the contrary,

 	
  

 	
 314

 
	
  

 	
 the Managers shall in no
 circumstances be required to use or

 	
  

 	
 315

 
	
  

 	
 commit their own funds to finance
 the provision of the

 	
  

 	
 316

 
	
  

 	
 Management Services.

 	
  

 	
 317

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.

 	
 Managers’ Right
 to Sub-Contract

 	
  

 	
 318

 
	
  

 	
 Except to a Related Manager (where the Manager may

 	
  

 	
 319

 
	
  

 	
 subcontract any of their obligations hereunder, without
 need of

 	
  

 	
  

 
	
  

 	
 obtaining the Owner’s consent for doing so), Tthe
 Managers

 	
  

 	
  

 
	
  

 	
 shall not have the right to
 sub-contract any of

 	
  

 	
  

 
	
  

 	
 their obligations hereunder,
 including those mentioned in sub-

 	
  

 	
 320

 
	
  

 	
 clause 3.1, without the prior written consent
 of the Owners which

 	
  

 	
 321

 
	
  

 	
 shall not be unreasonably
 withheld and
 which shall be promptly

 	
  

 	
 322

 
	
  

 	
 responded to. In the
 event of such a sub-

 	
  

 	
  

 
	
  

 	
 contract the Managers shall
 remain fully liable for the due

 	
  

 	
 323

 
	
  

 	
 performance of their obligations
 under this Agreement. 

 	
  

 	
 324

 
	
  

 	
  

 	
  

 	
  

 
	
 11.

 	
 Responsibilities

 	
  

 	
 325

 
	
  

 	
  

 	
  

 	
  

 	
 326

 
	
  

 	
 The parties agree that the provisions of Sections 11.1 to
 11.5

 	
  

 	
  

 
	
  

 	
  (inclusive) of the Group Management Agreement, shall apply
 to

 	
  

 	
  

 
	
  

 	
 this Agreement mutatis mutandis, save that references
 therein

 	
  

 	
  

 
	
  

 	
 to “any Shipmanagement Agreement or any Supervision

 	
  

 	
  

 
	
  

 	
 Agreement” shall be omitted and references to “Parent”,
 “any

 	
  

 	
  

 
	
  

 	
 member of the Group”, “Manager”, “any Submanager”, “a

 	
  

 	
  

 
	
  

 	
 Vessel”, “Section”, “Management Fees”, “each

 	
  

 	
  

 
	
  

 	
 Shipmanagement Agreement”, “Group” and “Article XI” shall
 be

 	
  

 	
  

 
	
  

 	
 construed as references to the Owners, the Owners, the

 	
  

 	
  

 
	
  

 	
 Managers, any submanager, the Vessel, Clause, management

 	
  

 	
  

 
	
  

 	
 fee, this Agreement, the Owners and Clause 11,
 respectively,

 	
  

 	
  

 
	
  

 	
 when used herein.

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 11.1

 	
 Force Majeure - Neither the Owners nor the Managers

 	
  

 	
  

 
	
  

 	
 shall
 be under any liability for any failure to perform any of their

 	
  

 	
 327

 
	
  

 	
 obligations
 hereunder by reason of any cause whatsoever of

 	
  

 	
 328

 
	
  

 	
 any
 nature or kind beyond their reasonable control.

 	
  

 	
 329

 
	
  

 	
 11.2 

 	
 Liability to Owners - (i) Without prejudice to sub-clause

 	
  

 	
 330

 
	
  

 	
 11.1,
 the Managers shall be under no liability whatsoever to the

 	
  

 	
 331

 
	
  

 	
 Owners
 for any loss, damage, delay or expense of whatsoever

 	
  

 	
 332

 
	
  

 	
 nature,
 whether direct or indirect (including but not limited to

 	
  

 	
 333

 
	
  

 	
 loss
 of profit arising out of or in connection with detention of or

 	
  

 	
 334

 
	
  

 	
 delay
 to the Vessel) and howsoever arising in the course of

 	
  

 	
 335

 
	
  

 	
 performance
 of the Management Services UNLESS
 same is

 	
  

 	
 336

 
	
  

 	
 proved
 to have resulted solely from the negligence, gross

 	
  

 	
 337

 
	
  

 	
 negligence
 or wilful default of the Managers or their employees,

 	
  

 	
 338

 
	
  

 	
 or
 agents or sub-contractors employed by them in connection

 	
  

 	
 339

 
	
  

 	
 with
 the Vessel, in which case (save where loss, damage, delay

 	
  

 	
 340

 
	
  

 	
 or
 expense has resulted from the Managers’ personal act or

 	
  

 	
 341

 
	
  

 	
 omission
 committed with the intent to cause same or recklessly

 	
  

 	
 342

 
	
  

 	
 and
 with knowledge that such loss, damage, delay or expense

 	
  

 	
 343

 
	
  

 	
 would
 probably result) the Managers’ liability for each incident

 	
  

 	
 344

 
	
  

 	
 or
 series of incidents giving rise to a claim or claims shall never

 	
  

 	
 345

 
	
  

 	
 Exceed
 a total of ten times the annual management fee payable

 	
  

 	
 346

 
	
  

 	
 hereunder.

 	
  

 	
 347

 
	
  

 	
 (ii) Notwithstanding anything that may appear to the contrary
 in 

 	
  

 	
 348

 
	
  

 	
 this
 Agreement, the Managers shall not be liable for any of the

 	
  

 	
 349

 
	
  

 	
 actions
 of the Crew, even if such actions are negligent, grossly

 	
  

 	
 350

 
	
  

 	
 negligent
 or wilful, except only to the extent that they are shown

 	
  

 	
 351

 
	
  

 	
 to
 have resulted from a failure by the Managers to discharge

 	
  

 	
 352

 
	
  

 	
 their
 obligations under sub-clause 3.1, in which case their liability

 	
  

 	
 353

 
	
  

 	
 shall
 be limited in accordance with the terms of this Clause 11.

 	
  

 	
 354

 
	
  

 	
 11.3 

 	
 Indemnity - Except to the extent and solely for
 the amount

 	
  

 	
 355

 
	
  

 	
 therein
 set out that the Managers would be liable under sub-

 	
  

 	
 356

 
	
  

 	
 clause
 11.2, the Owners hereby undertake to keep the Managers

 	
  

 	
 357

 
	
  

 	
 and
 their employees, agents and sub-contractors indemnified

 	
  

 	
 358

 
	
  

 	
 and
 to hold them harmless against all actions, proceedings,

 	
  

 	
 359

 
	
  

 	
 claims,
 demands or liabilities whatsoever or howsoever arising

 	
  

 	
 360

 
	
  

 	
 which
 may be brought against them or incurred or suffered by

 	
  

 	
 361

 
	
  

 	
 them
 arising out of or in connection with the performance of the

 	
  

 	
 362

 
	
  

 	
 Agreement,
 and against and in respect of all costs, losses,

 	
  

 	
 363

 







	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 damages
 and expenses (including legal costs and expenses on

 	
  

 	
 364

 
	
  

 	
 a
 full indemnity basis) which the Managers may suffer or incur

 	
  

 	
 365

 
	
  

 	
 (either
 directly or indirectly) in the course of the performance of

 	
  

 	
 366

 
	
  

 	
 this
 Agreement.

 	
  

 	
 367

 
	
  

 	
 11.4

 	
 “Himalaya” It is hereby expressly agreed that no

 	
  

 	
 368

 
	
  

 	
 employee
 or agent of the Managers (including every sub-

 	
  

 	
 369

 
	
  

 	
 contractor
 from time to time employed by the Managers) shall in

 	
  

 	
 370

 
	
  

 	
 Any
 circumstances whatsoever be under any liability whatsoever

 	
  

 	
 371

 
	
  

 	
 to
 the Owners for any loss, damage or delay of whatsoever kind

 	
  

 	
 372

 
	
  

 	
 arising
 or resulting directly or indirectly from any act, neglect or

 	
  

 	
 373

 
	
  

 	
 default
 on his part while acting in the course of or in connection

 	
  

 	
 374

 
	
  

 	
 with
 his employment and, without prejudice to the generality of

 	
  

 	
 375

 
	
  

 	
 the
 foregoing provisions in this Clause 11, every exemption,

 	
  

 	
 376

 
	
  

 	
 limitation,
 condition and liberty herein contained and every right,

 	
  

 	
 377

 
	
  

 	
 exemption
 from liability, defence and immunity of whatsoever

 	
  

 	
 378

 
	
  

 	
 nature
 applicable to the Managers or to which the Managers are

 	
  

 	
 379

 
	
  

 	
 entitled
 hereunder shall also be available and shall extend to

 	
  

 	
 380

 
	
  

 	
 protect
 every such employee or agent of the Managers acting

 	
  

 	
 381

 
	
  

 	
 as
 aforesaid and for the purpose of all the foregoing provisions 

 	
  

 	
 382

 
	
  

 	
 of
 this Clause 11 the Managers are or shall be deemed to be

 	
  

 	
 383

 
	
  

 	
 acting
 as agent or trustee on behalf of and for the benefit of all

 	
  

 	
 384

 
	
  

 	
 persons
 who are or might be their servants or agents from time

 	
  

 	
 385

 
	
  

 	
 to
 time (including sub-contractors as aforesaid) and all such

 	
  

 	
 386

 
	
  

 	
 persons
 shall to this extent be or be deemed to be parties to this

 	
  

 	
 387

 
	
  

 	
 Agreement.

 	
  

 	
 388

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 12.

 	
 Documentation

 	
  

 	
 389

 
	
  

 	
 Without prejudice to the relevant provisions of the Group 

 	
  

 	
 390

 
	
  

 	
 Management Agreement, Wwhere the Managers are providing

 	
  

 	
  

 
	
  

 	
 Technical Management in

 	
  

 	
  

 
	
  

 	
 accordance with sub-clause 3.2 and/or Crew
 Management in

 	
  

 	
 391

 
	
  

 	
 accordance with sub-clause 3.1, they shall make
 available,

 	
  

 	
 392

 
	
  

 	
 upon Owners’ request, all
 documentation and records related

 	
  

 	
 393

 
	
  

 	
 to the Safety Management System
 (SMS) and/or the Crew

 	
  

 	
 394

 
	
  

 	
 which the Owners need in order to
 demonstrate compliance

 	
  

 	
 395

 
	
  

 	
 with the ISM Code, the ISPS Code and
 STCW 95 or to defend a

 	
  

 	
 396

 
	
  

 	
 claim against

 	
  

 	
  

 
	
  

 	
 a third party.

 	
  

 	
 397

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 13.

 	
 General
 Administration

 	
  

 	
 398

 
	
  

 	
 3.1 

 	
 Without prejudice to the provisions of Article V of the 

 	
  

 	
 399

 
	
  

 	
 Group Management Agreement, but subject to the provisions of

 	
  

 	
  

 
	
  

 	
 Section 4.6 of the Group Management Agreement, Tthe

 	
  

 	
  

 
	
  

 	
 Managers shall handle and settle all claims arising

 	
  

 	
  

 
	
  

 	
 out of the Management Services
 hereunder and keep the Owners

 	
  

 	
 400

 
	
  

 	
 informed regarding any incident
 of which the Managers become

 	
  

 	
 401

 
	
  

 	
 aware which gives or may give
 rise to material claims or disputes

 	
  

 	
 402

 
	
  

 	
 involving

 	
  

 	
  

 
	
  

 	
 third parties.

 	
  

 	
 403

 
	
  

 	
 13.2

 	
 The Managers shall, as instructed
 by the Owners under
 this

 	
  

 	
 404

 
	
  

 	
 Agreement and/or, as the case may be, Section 4.6 of the Group

 	
  

 	
  

 
	
  

 	
 Management Agreement, bring

 	
  

 	
  

 
	
  

 	
 or defend actions, suits or
 proceedings in connection with matters

 	
  

 	
 405

 
	
  

 	
 entrusted to the Managers
 according to this Agreement.

 	
  

 	
 406

 
	
  

 	
 13.3

 	
 The Managers shall also have
 power to obtain legal or

 	
  

 	
 407

 
	
  

 	
 technical or other outside expert
 advice in relation to the handling

 	
  

 	
 408

 
	
  

 	
 and settlement of claims and
 disputes or all other matters

 	
  

 	
 409

 
	
  

 	
 affecting the interests of the
 Owners in respect of the Vessel.

 	
  

 	
 410

 
	
  

 	
 13.4

 	
 The Owners shall arrange for the
 provision of any 

 	
  

 	
 411

 
	
  

 	
 necessary guarantee bond or other
 security.

 	
  

 	
 412

 
	
  

 	
 13.5

 	
 Any costs reasonably incurred by the Managers in

 	
  

 	
 413

 
	
  

 	
 carrying out their obligations
 according to Clause 13 shall be

 	
  

 	
 414

 
	
  

 	
 reimbursed by the Owners.

 	
  

 	
 415

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 14.

 	
 Auditing

 	
  

 	
 416

 
	
  

 	
 The Managers shall at all times
 maintain and keep true and

 	
  

 	
 417

 
	
  

 	
 correct accounts and shall make
 the same available for inspection

 	
  

 	
 418

 
	
  

 	
 and auditing by the Owners at
 such times as may be mutually

 	
  

 	
 419

 
	
  

 	
 agreed. On the termination, for
 whatever reasons, of this

 	
  

 	
 420

 
	
  

 	
 Agreement, the Managers shall
 release to the Owners, if so

 	
  

 	
 421

 
	
  

 	
 requested, the originals where
 possible, or otherwise certified

 	
  

 	
 422

 
	
  

 	
 copies, of all such accounts and
 all documents specifically relating

 	
  

 	
 423

 
	
  

 	
 to the Vessel and her operation. For the avoidance of any
 doubt,

 	
  

 	
 424

 
	
  

 	
 this Clause is in addition to and not in substitution of
 the

 	
  

 	
  

 








This document is a computer
generated SHIPMAN 98 form printed by authority of BIMCO. Any insertion or
deletion to the form must be clearly visible. In the event of any modification
made to the pre-printed text of this document which is not clearly visible, the
text of the original BIMCO approved document shall apply. BIMCO assumes no
responsibility for any loss, damage or expense as a result of discrepancies
between the original BIMCO approved document and this computer generated
document. 


A-A-9







PART II 

“SHIPMAN 98” Standard Ship Management Agreement




	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 relevant provisions of the Group Management Agreement.

 	
  

 	
  

 
	
 15.

 	
 Inspection of
 Vessel

 	
  

 	
 425

 
	
  

 	
 The Owners shall have the right
 at any time after giving

 	
  

 	
 426

 
	
  

 	
 reasonable notice to the Managers
 to inspect the Vessel for any

 	
  

 	
 427

 
	
  

 	
 reason they consider necessary.

 	
  

 	
 428

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.

 	
 Compliance with
 Laws and Regulations

 	
  

 	
 429

 
	
  

 	
 The Managers will not do or
 permit to be done anything which

 	
  

 	
 430

 
	
  

 	
 might cause any breach or
 infringement of the laws and

 	
  

 	
 431

 
	
  

 	
 regulations of the Vessel’s flag,
 or of the places where she trades.

 	
  

 	
 432

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 17.

 	
 Duration of the
 Agreement

 	
  

 	
 433

 
	
  

 	
 This Agreement shall come into
 effect on the day and year stated

 	
  

 	
 434

 
	
  

 	
 in Box 4 and shall continue until the date the Group
 Management

 	
  

 	
 435

 
	
  

 	
 Agreement is terminated in accordance with the provisions
 of

 	
  

 	
  

 
	
  

 	
 Article XIII thereof, unless this Agreement is terminated
 earlier

 	
  

 	
  

 
	
  

 	
 in accordance with the provision of Clause 18 hereofthe date

 	
  

 	
  

 
	
  

 	
 stated
 in Box 17.

 	
  

 	
  

 
	
  

 	
 Thereafter
 it shall continue until terminated by either party giving

 	
  

 	
 436

 
	
  

 	
 to
 the other notice in writing, in which event the Agreement shall

 	
  

 	
 437

 
	
  

 	
 terminate
 upon the expiration of a period of two months from the

 	
  

 	
 438

 
	
  

 	
 date
 upon which such notice was given.

 	
  

 	
 439

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 18. 

 	
 Termination 

 	
  

 	
 440

 
	
  

 	
 18.1

 	
  Owners’ default

 	
  

 	
 441

 
	
  

 	
 (i)  

 	
 The Managers shall be entitled to
 terminate the Agreement

 	
  

 	
 442

 
	
  

 	
  

 	
 with immediate effect by notice
 in writing if any moneys

 	
  

 	
 443

 
	
  

 	
  

 	
 payable by the Owners under this
 Agreement and/or the

 	
  

 	
 444

 
	
  

 	
  

 	
 owners
 of any associated vessel, details of which are listed

 	
  

 	
 445

 
	
  

 	
  

 	
 in
 Annex “D”, shall not have been received in the Managers’

 	
  

 	
 446

 
	
  

 	
  

 	
 nominated account within ten20 running Business dDays of

 	
  

 	
 447

 
	
  

 	
  

 	
 receipt by

 	
  

 	
  

 
	
  

 	
  

 	
 the Owners of the Managers
 written request or if the Vessel

 	
  

 	
 448

 
	
  

 	
  

 	
 is repossessed by the Mortgagees.

 	
  

 	
 449

 
	
  

 	
 (ii) 

 	
 If the Owners:

 	
  

 	
 450

 
	
  

 	
  

 	
 (a) 

 	
 fail to meet their obligations under
 sub-clauses 5.2

 	
  

 	
 451

 
	
  

 	
  

 	
  

 	
 and 5.3 of this Agreement for any reason
 within their

 	
  

 	
 452

 
	
  

 	
  

 	
  

 	
 control, or

 	
  

 	
 453

 
	
  

 	
  

 	
 (b) 

 	
 proceed with the employment of or
 continue to employ

 	
  

 	
 454

 
	
  

 	
  

 	
  

 	
 the Vessel in the carriage of
 contraband, blockade

 	
  

 	
 455

 
	
  

 	
  

 	
  

 	
 running, or in an unlawful trade,
 or on a voyage which

 	
  

 	
 456

 
	
  

 	
  

 	
  

 	
 in the reasonable opinion of the
 Managers is unduly

 	
  

 	
 457

 
	
  

 	
  

 	
  

 	
 hazardous or improper,

 	
  

 	
 458

 
	
  

 	
  

 	
 the Managers may give notice of
 the default to the Owners,

 	
  

 	
 459

 
	
  

 	
  

 	
 requiring them to remedy it as
 soon as practically possible.

 	
  

 	
 460

 
	
  

 	
  

 	
 In the event that the Owners fail
 to remedy it within a

 	
  

 	
 461

 
	
  

 	
  

 	
 reasonable
 time 20 Business Days of receipt by the Owners

 	
  

 	
 462

 
	
  

 	
  

 	
 of the Managers’ written request to the satisfaction of the

 	
  

 	
  

 
	
  

 	
  

 	
 Managers, the

 	
  

 	
  

 
	
  

 	
  

 	
 Managers shall be entitled to
 terminate the Agreement

 	
  

 	
 463

 
	
  

 	
  

 	
 with immediate effect by notice
 in writing.

 	
  

 	
 464

 
	
  

 	
 18.2 

 	
  Managers’
Default 

 	
  

 	
 465

 
	
  

 	
 If the Managers fail to meet
 their obligations under Clauses
 3

 	
  

 	
 466

 
	
  

 	
 and 4 of this Agreement for any reason
 within the control of the

 	
  

 	
 467

 
	
  

 	
 Managers, the Owners may give
 notice to the Managers of the

 	
  

 	
 468

 
	
  

 	
 default, requiring them to remedy
 it within 20
 Business Daysas

 	
  

 	
 469

 
	
  

 	
 soon
 as practically

 	
  

 	
  

 
	
  

 	
 possible. In the event that the Managers fail to remedy it within a

 	
  

 	
 470

 
	
  

 	
 reasonable
 timesuch period to the
 satisfaction of the Owners, the

 	
  

 	
 471

 
	
  

 	
 Owners

 	
  

 	
  

 
	
  

 	
 shall be entitled to terminate
 the Agreement with immediate effect

 	
  

 	
 472

 
	
  

 	
 by notice in writing.

 	
  

 	
 473

 
	
  

 	
 18.3 

 	
  Extraordinary
Termination 

 	
  

 	
 474

 
	
  

 	
 This Agreement shall be deemed to
 be terminated in the case of

 	
  

 	
 475

 
	
  

 	
 the sale of the Vessel or if the
 Vessel becomes a total loss or is

 	
  

 	
 476

 
	
  

 	
 declared as a constructive or
 compromised or arranged total

 	
  

 	
 477

 
	
  

 	
 loss or is requisitioned.

 	
  

 	
 478

 
	
  

 	
 18.4 

 	
  For the purpose of sub-clause 18.3 hereof

 	
  

 	
 479

 
	
  

 	
 (i)

 	
 the date upon which the Vessel is
 to be treated as having

 	
  

 	
 480

 
	
  

 	
  

 	
 been sold or otherwise disposed
 of shall be the date on

 	
  

 	
 481

 
	
  

 	
  

 	
 which the Owners cease to be
 registered as Owners of

 	
  

 	
 482

 
	
  

 	
  

 	
 the Vessel;

 	
  

 	
 483

 
	
  

 	
 (ii) 

 	
 the Vessel shall not be deemed to
 be lost unless either

 	
  

 	
 484

 








	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 she has become an actual total
 loss or agreement has

 	
  

 	
 485

 
	
  

 	
  

 	
 been reached with her
 underwriters in respect of her

 	
  

 	
 486

 
	
  

 	
  

 	
 constructive, compromised or
 arranged total loss or if such

 	
  

 	
 487

 
	
  

 	
  

 	
 agreement with her underwriters is
 not reached it is

 	
  

 	
 488

 
	
  

 	
  

 	
 adjudged by a competent tribunal
 that a constructive loss

 	
  

 	
 489

 
	
  

 	
  

 	
 of the Vessel has occurred.

 	
  

 	
 490

 
	
  

 	
 18.5 

 	
  The parties agree that the provisions of Sections 13.4(a)
 to

 	
  

 	
 491

 
	
  

 	
 13.4 (d) (inclusive) of the Group Management Agreement,
 shall

 	
  

 	
  

 
	
  

 	
 apply to this Agreement mutatis mutandis. This
 Agreement shall

 	
  

 	
  

 
	
  

 	
 terminate
 forthwith in the event of

 	
  

 	
  

 
	
  

 	
 an
 order being made or resolution passed for the winding up,

 	
  

 	
 492

 
	
  

 	
 dissolution,
 liquidation or bankruptcy of either party (otherwise

 	
  

 	
 493

 
	
  

 	
 than
 for the purpose of reconstruction or amalgamation) or if a

 	
  

 	
 494

 
	
  

 	
 receiver
 is appointed, or if it suspends payment, ceases to carry

 	
  

 	
 495

 
	
  

 	
 on
 business or makes any special arrangement or composition

 	
  

 	
 496

 
	
  

 	
 with
 its creditors.

 	
  

 	
 497

 
	
  

 	
 18.6 

 	
  The termination of this Agreement
 shall be without

 	
  

 	
 498

 
	
  

 	
 prejudice to all rights accrued
 due between the parties prior to

 	
  

 	
 499

 
	
  

 	
 the date of termination.

 	
  

 	
 500

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 19. 

 	
 Law and Arbitration 

 	
  

 	
 501

 
	
  

 	
 19.1 

 	
  This Agreement and any non-contractual
 obligations

 	
  

 	
 502

 
	
  

 	
 connected with it shall be
 governed by and construed in

 	
  

 	
  

 
	
  

 	
 accordance with English law. All disputes arising out
 of this

 	
  

 	
 503

 
	
  

 	
 Agreement and/or any non-contractual obligations connected

 	
  

 	
  

 
	
  

 	
 with it shall be arbitrated in London in the following
 manner.

 	
  

 	
  

 
	
  

 	
 One arbitrator is to be appointed by each of the parties
 hereto

 	
  

 	
  

 
	
  

 	
 and a third by the two so chosen. Their decision or that of
 any

 	
  

 	
  

 
	
  

 	
 two of them shall be final. The arbitrators shall be
 commercial

 	
  

 	
  

 
	
  

 	
 persons, conversant with shipping matters. Such arbitration
 is

 	
  

 	
  

 
	
  

 	
 to be conducted in accordance with the London Maritime

 	
  

 	
  

 
	
  

 	
 Arbitration Association (LMAA) Terms current at the time
 when

 	
  

 	
  

 
	
  

 	
 the arbitration proceedings are commenced and in accordance

 	
  

 	
  

 
	
  

 	
 with the Arbitration Act 1996 or any statutory modification
 or re-

 	
  

 	
  

 
	
  

 	
 enactment thereof. In the event that a party hereto shall
 state a

 	
  

 	
  

 
	
  

 	
 dispute and designate an arbitrator in writing, the other
 party

 	
  

 	
  

 
	
  

 	
 shall have 10 Business Days to designate its own
 arbitrator. If

 	
  

 	
  

 
	
  

 	
 such other party fails to designate its own arbitrator
 within such

 	
  

 	
  

 
	
  

 	
 period, the arbitrator appointed by the first party can
 render an

 	
  

 	
  

 
	
  

 	
 award hereunder. Until such time as the arbitrators finally
 close

 	
  

 	
  

 
	
  

 	
 the hearings, either party shall have the right by written
 notice

 	
  

 	
  

 
	
  

 	
 served on the arbitrators and on the other party to specify

 	
  

 	
  

 
	
  

 	
 further disputes or differences under this Agreement for
 hearing

 	
  

 	
  

 
	
  

 	
 and determination. The arbitrators may grant any relief,
 and

 	
  

 	
  

 
	
  

 	
 render an award, which they or a majority of them deem just
 and

 	
  

 	
  

 
	
  

 	
 equitable and within the scope of this Agreement, including
 but

 	
  

 	
  

 
	
  

 	
 not limited to the posting of security. Awards pursuant to
 this

 	
  

 	
  

 
	
  

 	
 Clause 19.1 may include costs and judgments may be entered

 	
  

 	
  

 
	
  

 	
 upon any award made herein in any court having jurisdiction.

 	
  

 	
  

 
	
  

 	
 and
 any dispute arising out of or

 	
  

 	
  

 
	
  

 	
 in
 connection with this Agreement shall be referred to arbitration

 	
  

 	
 504

 
	
  

 	
 in
 London in accordance with the Arbitration Act 1996- or

 	
  

 	
 505

 
	
  

 	
 any
 statutory modification or re-enactment thereof save to

 	
  

 	
 506

 
	
  

 	
 the
 extent necessary to give effect to the provisions of this

 	
  

 	
 507

 
	
  

 	
 Clause.

 	
  

 	
 508

 
	
  

 	
 The
 arbitration shall be conducted in accordance with the

 	
  

 	
 509

 
	
  

 	
 London
 Maritime Arbitrators Association (LMAA) Terms

 	
  

 	
 510

 
	
  

 	
 current
 at the time when the arbitration proceedings are

 	
  

 	
 511

 
	
  

 	
 commenced.

 	
  

 	
 512

 
	
  

 	
 The
 reference shall be to three arbitrators. A party wishing

 	
  

 	
 513

 
	
  

 	
 to
 refer a dispute to arbitration shall appoint its arbitrator

 	
  

 	
 514

 
	
  

 	
 and
 send notice of such appointment in writing to the other

 	
  

 	
 515

 
	
  

 	
 party
 requiring the other party to appoint its own arbitrator

 	
  

 	
 516

 
	
  

 	
 within
 14 calendar days of that notice and stating that it will

 	
  

 	
 517

 
	
  

 	
 appoint
 its arbitrator as sole arbitrator unless the other party

 	
  

 	
 518

 
	
  

 	
 appoints
 its own arbitrator and gives notice that it has done

 	
  

 	
 519

 
	
  

 	
 so
 within the 14 days specified. If the other party does not

 	
  

 	
 520

 
	
  

 	
 appoint
 its own arbitrator and give notice that it has done so

 	
  

 	
 521

 
	
  

 	
 within
 the 14 days specified, the party referring a dispute to

 	
  

 	
 522

 
	
  

 	
 arbitration
 may, without the requirement of any further prior

 	
  

 	
 523

 
	
  

 	
 notice
 to the other party, appoint its arbitrator as sole

 	
  

 	
 524

 
	
  

 	
 arbitrator
 and shall advise the other party accordingly. The

 	
  

 	
 525

 
	
  

 	
 award
 of a sole arbitrator shall be binding on both parties

 	
  

 	
 526

 









This
document is a computer generated SHIPMAN 98 form printed by authority of BIMCO.
Any insertion or deletion to the form must be clearly visible. In the event of
any modification made to the pre-printed text of this document which is not
clearly visible, the text of the original BIMCO approved document shall apply.
BIMCO assumes no responsibility for any loss, damage or expense as a result of
discrepancies between the original BIMCO approved document and this computer
generated document.


A-A-10







PART II

“SHIPMAN 98” Standard Ship Management Agreement




	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 as
 if he had been appointed by agreement.

 	
  

 	
 527

 
	
  

 	
 Nothing
 herein shall prevent the parties agreeing in writing

 	
  

 	
 528

 
	
  

 	
 to
 vary these provisions to provide for the appointment of a

 	
  

 	
 529

 
	
  

 	
 sole
 arbitrator.

 	
  

 	
 530

 
	
  

 	
 In
 cases where neither the claim nor any counterclaim

 	
  

 	
 531

 
	
  

 	
 exceeds
 the sum of USD50,000 (or such other sum as the

 	
  

 	
 532

 
	
  

 	
 parties
 may agree) the arbitration shall be conducted in

 	
  

 	
 533

 
	
  

 	
 accordance
 with the LMAA Small Claims Procedure current

 	
  

 	
 534

 
	
  

 	
 at
 the time when the arbitration proceedings are commenced.

 	
  

 	
 535

 
	
  

 	
 19.2

 	
  This
 Agreement shall be governed by and construed

 	
  

 	
 536

 
	
  

 	
 in
 accordance with Title 9 of the United States Code and

 	
  

 	
 537

 
	
  

 	
 the
 Maritime Law of the United States and any dispute

 	
  

 	
 538

 
	
  

 	
 arising
 out of or in connection with this Agreement shall be

 	
  

 	
 539

 
	
  

 	
 referred
 to three persons at New York, one to be appointed

 	
  

 	
 540

 
	
  

 	
 by
 each of the parties hereto, and the third by the two so

 	
  

 	
 541

 
	
  

 	
 chosen;
 their decision or that of any two of them shall be

 	
  

 	
 542

 
	
  

 	
 final,
 and for the purposes of enforcing any award,

 	
  

 	
 543

 
	
  

 	
 judgement
 may be entered on an award by any court of

 	
  

 	
 544

 
	
  

 	
 competent
 jurisdiction. The proceedings shall be conducted

 	
  

 	
 545

 
	
  

 	
 in
 accordance with the rules of the Society of Maritime

 	
  

 	
 546

 
	
  

 	
 Arbitrators,
 Inc.

 	
  

 	
 547

 
	
  

 	
 In
 cases where neither the claim nor any counterclaim

 	
  

 	
 548

 
	
  

 	
 exceeds
 the sum of USD50,000 (or such other sum as the

 	
  

 	
 549

 
	
  

 	
 parties
 may agree) the arbitration shall be conducted in

 	
  

 	
 550

 
	
  

 	
 accordance
 with the Shortened Arbitration Procedure of the

 	
  

 	
 551

 
	
  

 	
 Society
 of Maritime Arbitrators, Inc. current at the time when

 	
  

 	
 552

 
	
  

 	
 the
 arbitration proceedings are commenced.

 	
  

 	
 553

 
	
  

 	
 19.3

 	
 This
 Agreement shall be governed by and construed

 	
  

 	
 554

 
	
  

 	
 in
 accordance with the laws of the place mutually agreed by

 	
  

 	
 555

 
	
  

 	
 the
 parties and any dispute arising out of or in connection

 	
  

 	
 556

 
	
  

 	
 with
 this Agreement shall be referred to arbitration at a

 	
  

 	
 557

 
	
  

 	
 mutually
 agreed place, subject to the procedures applicable

 	
  

 	
 558

 
	
  

 	
 there.

 	
  

 	
 559

 
	
  

 	
 19.4

 	
  If Box 18 in Part I is not appropriately
 filled in, sub-

 	
  

 	
 560

 
	
  

 	
 clause 19.1 of this Clause shall apply.

 	
  

 	
 561

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Note: 19.1, 19.2 and 19.3 are alternatives;
 indicate

 	
  

 	
 562

 
	
  

 	
 alternative agreed in Box 18.

 	
  

 	
 563

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 20. 

 	
 Notices 

 	
  

 	
 564

 
	
  

 	
 20.1 

 	
  Any notice to be given by either
 party to the other

 	
  

 	
 565

 
	
  

 	
 party shall be in writing and may
 be sent by fax, telex,

 	
  

 	
 566

 
	
  

 	
 registered or recorded mail or by
 personal service.

 	
  

 	
 567

 
	
  

 	
 20.2 

 	
  The address of the Parties for
 service of such

 	
  

 	
 568

 
	
  

 	
 communication shall be as stated
 in Boxes 19 and 20,

 	
  

 	
 569

 
	
  

 	
 respectively.

 	
  

 	
 570

 















This document is a computer
generated SHIPMAN 98 form printed by authority of BIMCO. Any insertion or
deletion to the form must be clearly visible. In the event of any modification
made to the pre-printed text of this document which is not clearly visible, the
text of the original BIMCO approved document shall apply. BIMCO assumes no
responsibility for any loss, damage or expense as a result of discrepancies
between the original BIMCO approved document and this computer generated
document. 



A-A-11





APPENDIX II


FORM OF SUPERVISION AGREEMENT


THIS AGREEMENT is
made the _____ day of [   ], 20[   ] BETWEEN:



	
  

 	
  

 
	
 (1)

 	
  [name of relevant member of the Group], a
 company incorporated under the laws of [ ], whose registered office is
 [ADDRESS] (the “Owner”); and 

 
	
  

 	
  

 
	
 (2)

 	
 COSTAMARE SHIPPING COMPANY S.A., a company
 incorporated under the laws of [ ], whose registered office is at [ADDRESS]
 (the “Construction Supervisor”). 

 



               WHEREAS:



               By
a shipbuilding contract dated            (the “Shipbuilding Contract”) and made
between [ ] (the “Builder”) and the Owner, the Builder agreed to
construct, to the order of the Owner, and sell to the Owner, a [ ] container
vessel, known during construction as Hull No.[ ] (the “Vessel”); 


               IT
IS NOW AGREED as follows: 


ARTICLE I


DEFINITIONS


               SECTION
1.1. Except as otherwise defined herein, all terms defined in the Shipbuilding
Contract shall have the same respective meanings when used herein. 


               SECTION
1.2. In this Agreement, unless the context otherwise requires, the following
expressions shall have the following meanings: 


               “Business
Day” means a day, other than a Saturday or Sunday or a public holiday, on
which major retail banks in New York City and Athens Greece, and (in respect of
any payments which are to be made to the Builder) [ ], are open for
non-automated customer services; 


               “Group
Management Agreement” means the agreement dated [    ] 2010 made between the
Parent and the Construction Supervisor. 


               “Owner’s
Supplies” means all of the items to be furnished to the Vessel by the Owner
in accordance the relevant provisions of the Shipbuilding Contract. 


               “Parent”
means Costamare Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, Marshall Islands MH96960 and includes its successors in title. 


A-II-1





               
“Spares” means the items to be designated as spares by the parties
hereto at the time of the delivery of the Vessel. 


               “Supervision
Period” means the period from the execution of this Agreement
to and including the earlier of (i) the date of delivery of the Vessel pursuant
to the Shipbuilding Contract and (ii) the date this Agreement is terminated. 


ARTICLE II


APPOINTMENT


               SECTION
2.1. The Owner hereby appoints the Construction Supervisor, and the
Construction Supervisor hereby agrees to act as the Owner’s supervisor towards
the Builder and as the “Owner’s Representative” under the Shipbuilding
Contract for the duration of the Supervision Period and to perform the duties
and rights which rest with the Owner regarding the construction and delivery of
the Vessel in accordance with all of the provisions of the Shipbuilding
Contract. The Owner shall be responsible for, inter
alia, determining the general policy of supervision of construction
of the Vessel and the scope of activities of the Construction Supervisor and,
in the performance of its duties under this Agreement, the Construction
Supervisor shall at all times act strictly in accordance with any instructions
or directions given to it by the Owner regarding such general policy or, in the
absence of such instructions or directions, in accordance with the standards of
a prudent supervisor providing services of the type to be provided under this
Agreement, having due regard to the Owner’s interest. Any instructions so given
shall be consistent with the nature and scope of the supervision services
required to be performed by the Construction Supervisor under this Agreement and
shall not require the Construction Supervisor to do or omit to do anything
which may be contrary to any applicable law of any jurisdiction or which is
inconsistent or contrary to any of the rights and duties of the Owner under the
Shipbuilding Contract. Upon appointment the Owner shall furnish the
Construction Supervisor with a full and complete copy of the Shipbuilding
Contract (which for the avoidance of doubt shall include the Specifications and
the Plans). 


               SECTION
2.2. Specific Powers and Duties of the Construction Supervisor. Without
prejudice to the generality of the appointment made under  Section
2.1, and (where applicable) by way of addition to the rights, powers and duties
so conferred, the Construction Supervisor shall, subject to this Section 2.2
and to Articles III and IV, have and be entrusted with the following rights,
powers and duties in relation to the Shipbuilding Contract and the Vessel: 


	
  

 	
  

 	
  

 
	
  

 	
      (a) to
 review, comment on, agree and approve the lists of plans and the drawings
 referred to; to attend the testing of the Vessel’s machinery, outfitting and
 equipment and to request any tests or inspections which the Construction
 Supervisor may consider appropriate or desirable and to review and comment on
 the results of all tests and inspections to the extent this is possible under
 the terms of the Shipbuilding Contract; to carry out such inspections and
 give such advice or suggestions to the Builder as the Construction Supervisor
 may consider

 


A-II-2









	
  

 	
  

 	
  

 
	
  

 	
 appropriate
 and as the terms of the Shipbuilding Contract allow him to do; and to give
 notice to the Builder in the event that the Construction Supervisor discovers
 any construction, material or workmanship which the Construction Supervisor
 believes does not or will not conform to the requirements of the Shipbuilding
 Contract and the specifications again provided the terms of the Shipbuilding
 Contract allows for such notice to be given; 

 
	
  

 	
  

 	
  

 
	
  

 	
       (b)     to
 appoint a representative of the Construction Supervisor for the purposes
 specified under Article [ ]; 

 
	
  

 	
  

 	
  

 
	
  

 	
       (c)     if
 any alteration or addition to the Shipbuilding Contract becomes obligatory or
 desirable, to consult with the Builder and make recommendations to the Owner
 as to whether or not acceptance should be given to any proposal notified to
 the Owner by the Builder; 

 
	
  

 	
  

 	
  

 
	
  

 	
      
 (d)     to request and agree to any minor
 alterations, additions or modifications to the Vessel or the specifications
 and any substitute materials to the extent this is possible under the terms
 of the Shipbuilding Contract, which the Construction Supervisor may consider
 appropriate or desirable, provided that if the cost of such variations or
 substitute materials would have the effect of altering the Contract Price (as
 defined in the Shipbuilding Contract) by more than three per cent (3%) from
 the Contract Price on the date hereof or the amount of any of the
 installments of the Contract Price due under the Shipbuilding Contract prior
 to the delivery of the Vessel, the Construction Supervisor shall notify the
 same to the Owner in writing and obtain the Owner’s instructions before
 taking any action in relation thereto; to receive from and transmit to the
 Builder information relating to the requirements of the classification
 society and to give instructions and agree with the Builder regarding
 alterations, additions or changes in connection with such requirements; and
 to approve the substitution of materials as requested by the Builder; 

 
	
  

 	
  

 	
  

 
	
  

 	
      
 (e)     to attend and witness the trials of the
 Vessel to the extent this is possible under the terms of the Shipbuilding
 Contract; 

 
	
  

 	
  

 	
  

 
	
  

 	
      
 (f)     to determine whether the Vessel has been
 designed, constructed, equipped and completed in accordance with, and
 complies with, the Shipbuilding Contract and the Specifications and Plans
 (each as defined in the Shipbuilding Contract); to give the Builder a notice
 of acceptance or (as the case may be) rejection of the Vessel, to require or
 request any further test and inspection of the Vessel to the extent this is
 possible under the terms of the Shipbuilding Contract, and to give and
 receive any further or other notice relative to such matters and generally to
 advise the Owner in respect of all such matters; 

 
	
  

 	
  

 	
  

 
	
  

 	
      
 (g)     to sign on behalf of the Owner any protocols
 as to sea trials, consumable stores, delivery and acceptance or otherwise,
 having first ascertained with the Owner the appropriateness of so doing; 

 


A-II-3









	
  

 	
  

 	
  

 
	
  

 	
       (h) to
 accept on behalf of the Owner the documents specified in Article [ ],
 Paragraph [ ] of the Shipbuilding Contract to be delivered by the Builder at
 delivery of the Vessel under the Shipbuilding Contract and to confirm receipt
 thereof to the Owner; 

 
	
  

 	
  

 	
  

 
	
  

 	
       (i) to give and receive on behalf of the Owner
 any notice contemplated by the Shipbuilding Contract, provided that the
 Construction Supervisor shall not have authority to give on behalf of the
 Owner any notice which the Owner may be entitled to give to cancel, repudiate
 or rescind the Shipbuilding Contract without the prior written consent of the
 Owner; and 

 
	
  

 	
  

 	
  

 
	
  

 	
       (j) to purchase, after being placed in funds by
 the Owner, all Owner’s Supplies as agent of the Owner and supply and deliver
 the same together with all necessary specifications, plans, drawings,
 instruction books, manuals, test reports and certificates to the Builder as
 provided in the Shipbuilding Contract, and provide to the Owner a list of all
 such Owner’s Supplies as soon as possible. 

 



                 SECTION
2.3. The Construction Supervisor shall discharge its responsibilities under
this Clause 2 as the Owner’s agent. 


                 SECTION
2.4. In the event that the Construction Supervisor uses own funds to purchase
Owner’s Supplies, the cost of supplying and delivering Owner’s Supplies
pursuant to relevant terms of the Shipbuilding Contract shall be reimbursed by
the Owner to the Construction Supervisor on the date the Construction
Supervisor submits to the Owner supporting invoices in respect of such cost. 


ARTICLE III


CONSTRUCTION SUPERVISOR’S DUTIES
 REGARDING
CONSTRUCTION


                 SECTION
3.1. The Construction Supervisor undertakes with the Owner with respect to the
Shipbuilding Contract: 


	
  

 	
  

 	
  

 
	
  

 	
      (a) to
 notify the Owner in writing promptly on becoming aware of any likely change
 to any of the dates on which any installment under the Shipbuilding Contract
 is expected to be due; 

 
	
  

 	
  

 	
  

 
	
  

 	
      (b) to
 (i) notify the Owner in writing of the expected date on which the launching
 or, as the case may be, sea trials of the Vessel is or are to take place and
 (ii) promptly on the same day as the launching or, as the case may be, sea
 trials of the Vessel takes or take place to confirm that the launching or, as
 the case may be, sea trials of the Vessel has or have taken place and, where
 relevant, that the amount specified in such confirmation is due and payable; 

 
	
  

 	
  

 	
  

 
	
  

 	
      (c) to
 (i) advise the Owner in writing, four (4) Business Days prior to
 the date on which the delivery installment under the Shipbuilding Contract is
 anticipated to become due, of the times and amounts of payments to be made to
 

 


A-II-4









	
  

 	
  

 	
  

 
	
  

 	
 the Builder
 under the Shipbuilding Contract and any amount due to the Construction
 Supervisor for Owner’s Supplies not already settled and (ii) promptly confirm
 the same on the day on which such installment becomes due (and being the date
 the same is required to be paid to the account referred to in the relevant
 term of the Shipbuilding Contract); 

 
	
  

 	
  

 	
  

 
	
  

 	
      (d)     not
 to accept the Vessel or delivery of the Vessel on the Owner’s behalf without
 the Owner’s prior written approval and unless the Construction Supervisor
 shall have previously certified to the Owner in writing, in the form of the
 certificate set out in Schedule 1 to this Agreement, that: 

 
	
  

 	
  

 	
  

 
	
  

 	
           (i)     the
 Vessel has been duly completed and is ready for delivery to and acceptance by
 the Owner in or substantially in accordance with the Shipbuilding Contract
 and the Specifications and Plans; 

 
	
  

 	
  

 	
  

 
	
  

 	
           (ii)     there
 is, to the best of the Construction Supervisor’s knowledge and belief having
 made due enquiry with the Builder, no lien or encumbrance on the Vessel other
 than the lien in favor of the Builder in respect of the delivery installment
 of the Contract Price due in accordance with the terms of the Shipbuilding
 Contract; and 

 
	
  

 	
  

 	
  

 
	
  

 	
           (iii)     the
 Vessel is recommended for classification by the relevant classification
 society provided for in the Shipbuilding Contract (and the Construction
 Supervisor shall attach to its certificate the provisional certificate of
 such classification society recommending such classification of the Vessel or
 a duplicate or photocopy of such provisional certificate or otherwise provide
 evidence of such classification to the Owner); 

 
	
  

 	
  

 	
  

 
	
  

 	
      (e)     on
 receipt thereof from the Builder promptly to deliver the documents specified
 in Article [ ], Paragraph [ ] of the Shipbuilding Contract to the Owner or as
 the Owner may direct; and 

 
	
  

 	
  

 	
  

 
	
  

 	
      (f)     solely
 with the prior written approval of the Owner, to request from or agree with
 the Builder any material alterations, additions or modifications to the
 Vessel. 

 


ARTICLE IV


CONSTRUCTION SUPERVISOR’S GENERAL OBLIGATIONS


               SECTION
4.1. The Construction Supervisor undertakes to the Owner, with respect to the
exercise and performance of its rights, powers and duties as the Owner’s
representative under this Agreement, as follows: 


A-II-5









	
  

 	
  

 	
  

 
	
  

 	
      (a)     it
 will exercise commercially reasonable efforts to cause the due and punctual
 observance and performance of all conditions, duties and obligations imposed
 on the Owner by the Shipbuilding Contract (other than to pay the Contract
 Price) and will not without the prior written consent of the Owner: 

 
	
  

 	
  

 	
  

 
	
  

 	
           (i) exercise
 any rights of the Owner to cancel, repudiate or rescind the Shipbuilding
 Contract; 

 
	
  

 	
  

 	
  

 
	
  

 	
           (ii) waive,
 modify or suspend any provision of the Shipbuilding Contract if as a result
 of such waiver, modification or suspension the Owner will or may suffer any
 adverse consequences; and 

 
	
  

 	
  

 
	
  

 	
      (b)     it
 will, at its own expense, keep all necessary and proper books, accounts,
 records and correspondence files relating to its duties and activities under
 this Agreement and shall send quarterly reports to the Owner concerning the
 progress of the design and construction of the Vessel and keep the Owner
 promptly informed of any deviations from the building program. 

 


ARTICLE V


LIABILITY AND INDEMNITY


               SECTION
5.1. Save for the obligation of the Owner to pay any moneys due to the
Construction Supervisor hereunder, neither the Owner nor the Construction
Supervisor shall be under any liability to the other for any failure to perform
any of their obligations hereunder by reason of Force Majeure. “Force
Majeure” shall mean any cause whatsoever of any nature or kind beyond the
reasonable control of the Owner or the Construction Supervisor, including,
without limitation, acts of God, acts of civil or military authorities, acts of
war or public enemy, acts of any court, regulatory agency or administrative
body having jurisdiction, insurrections, riots, strikes or other labor
disturbances, embargoes or other causes of a similar nature. 


               SECTION
5.2. The Construction Supervisor, including its officers, directors, employees,
shareholders, agents and any sub-contractors (the “Construction Supervisor
Related Parties”), shall be under no liability whatsoever to the Owner or
to any third party (including the Builder) 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 the delayed or
non-conforming delivery of the Vessel), and howsoever arising in the course of
the performance of this Agreement, unless and to the extent that the same is
proved to have resulted solely from the gross negligence or willful misconduct
of the Construction Supervisor, its officers, employees, agents or any of its
sub-contractors in which case (save where loss, damage, delay or expense, has
resulted from the Construction Supervisor’s personal act or omission committed
with the intent to cause same) the Construction Supervisor’s liability for each
incident or series of incidents giving rise to claim or claims shall never
exceed a total of ten times the fees payable hereunder. 


A-II-6





               SECTION
5.3. The Owner shall indemnify and hold harmless the Construction Supervisor
Related Parties 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
this Agreement and against and in respect of any loss, damage, delay or expense
of whatsoever nature (including legal costs and expenses on a full indemnity
basis), whether direct or indirect, incurred or suffered by any Construction
Supervisor Related Party in the performance of this Agreement, unless incurred
or suffered due to the gross negligence or willful misconduct of any
Construction Supervisor Related Party. 


               SECTION
5.4. It is hereby expressly agreed that no employee or agent of the
Construction Supervisor (including any sub-contractor from time to time
employed by the Construction Supervisor) shall in any circumstances whatsoever
be under any liability whatsoever to the Owner or any third party 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 Article V, every exemption, limitation,
condition and liberty herein contained and every right, exemption from
liability, defense and immunity of whatsoever nature applicable to the
Construction Supervisor or to which the Construction Supervisor is entitled
hereunder shall also be available and shall extend to protect every such
employee or agent of the Construction Supervisor acting as aforesaid, and for
the purpose of all the foregoing provisions of this Article V, the Construction
Supervisor is 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. 


               SECTION
5.5. The provisions of this Article V shall survive any termination of this
Agreement. 


ARTICLE VI


FEES


               SECTION
6.1. In consideration of the performance of the duties assigned to the
Construction Supervisor in this Agreement, the Owner shall pay to the
Construction Supervisor the sum of US$700,000 for its total supervision costs
in connection with the supervision of the construction of the Vessel, plus any
expenses incurred under the Shipbuilding Contract against presentation of
supporting invoices from the Construction Supervisor which the Construction
Supervisor shall supply to the Owner at the same time as payment is requested.
The fee payable hereunder to the Construction Supervisor shall include all
costs which are incurred by the Construction Supervisor in connection with the
ordinary exercise and performance by the Construction Supervisor of the rights,
powers and duties entrusted to it pursuant to this Agreement. The supervision
fee will be paid in two equal installments as follows: 


	
  

 	
  

 
	
  

 	
 (a)
 US$350,000 on execution of this Agreement; and 

 


A-II-7









	
  

 	
  

 
	
  

 	
 (b)
 US$350,000 upon the Construction Supervisor advising the Owner of the
 completion of the sea trial run of the Vessel. 

 



For the
avoidance of doubt, the Construction Supervisor can demand payment of the fee
and other amounts payable hereunder from the Parent pursuant to the relevant
provisions of the Group Management Agreement. 


ARTICLE VII


COMMENCEMENT - TERMINATION


               SECTION
7.1. This Agreement shall come into effect on the date hereof and shall
continue until the delivery of the Vessel in accordance with the Shipbuilding
Contract unless terminated earlier pursuant to the terms of Section 7.2,
Section 7.3, Section 7.4 or Section 7.5 hereof. 


               SECTION
7.2. The Owner shall be entitled to terminate this Agreement by notice in
writing to the Construction Supervisor if the Construction Supervisor defaults
in the performance of any material obligation under this Agreement, subject to
a cure right of 20 Business Days following written notice by the Owner. 


               SECTION
7.3. This Agreement shall terminate automatically if: 

               (a) the Shipbuilding
Contract is cancelled, rescinded or terminated; or 

               (b) the Group Management
Agreement is terminated. 


               SECTION
7.4. The Construction Supervisor shall be entitled to terminate this Agreement
by notice in writing to the Owner if: 


	
  

 	
  

 	
  

 
	
  

 	
      (a)
 any moneys payable by the Owner under this Agreement is not paid when due or
 if due on demand within 10 Business Days following demand by the Construction
 Supervisor; or 

 
	
  

 	
  

 	
  

 
	
  

 	
      (b)
 the Owner defaults in the performance of any other material obligations under
 this Agreement, subject to a cure right of 20 Business Days following written
 notice by the Construction Supervisor; or 

 
	
  

 	
  

 	
  

 
	
                SECTION
 7.5. Either party shall be entitled to terminate this Agreement immediately
 if:

 
	
  

 	
  

 	
  

 
	
  

 	
      (a)
 the other party ceases to conduct business, or all or substantially all of
 the equity-interests, properties or assets of either such party is sold,
 seized or appropriated; or 

 
	
  

 	
  

 	
  

 
	
  

 	
      (b)
 (i) the other party files a petition under any bankruptcy law, makes an
 assignment for the benefit of its creditors, seeks relief under any law for
 the protection of debtors or adopts a plan of liquidation; (ii) a petition is
 filed against 

 


A-II-8









	
  

 	
  

 	
  

 
	
  

 	
 the other
 party seeking to have it declared insolvent or bankrupt and such petition is
 not dismissed or stayed within 40 Business Days of its filing; (iii) the
 other party shall admit in writing its insolvency or its inability to pay its
 debts as they mature; (iv) an order is made for the appointment of a
 liquidator, manager, receiver or trustee of the other party of all or a
 substantial part of its assets; (v) or if an encumbrancer takes possession of
 or a receiver or trustee is appointed over the whole or any part of the other
 party’s undertaking, property or assets; or (vi) if an order is made or a
 resolution is passed for the other party’s winding up; or 

 
	
  

 	
  

 	
  

 
	
  

 	
      (c)
 a distress, execution, sequestration or other process is levied or enforced
 upon or sued out against the other party’s property which is not discharged
 within 20 Business Days; or 

 
	
  

 	
  

 	
  

 
	
  

 	
      (d)
 the other party ceases or threatens to cease wholly or substantially to carry
 on its business otherwise than for the purpose of a reconstruction or
 amalgamation without insolvency previously approved by the terminating party;
 or 

 
	
  

 	
  

 	
  

 
	
  

 	
      (e)
 the other party is prevented from performing its obligations hereunder by
 reasons of Force Majeure for a period of two or more consecutive months. 

 



               SECTION
7.6. In the event of termination due to the Construction Supervisor’s default,
then it shall not be entitled to receive any payment in respect of the fees and
other amounts described in Article VI becoming due and payable after the date
of such termination. 


ARTICLE VIII

EMPLOYEES


               SECTION
8.1. None of the employees and/or sub-contractors of the Construction
Supervisor shall constitute, for the purposes of this Agreement, sub-agents of
the Owner. The Construction Supervisor, in its capacity as employer and
contractor (and not in its capacity as agent for the Owner), shall (a) be
responsible for the salaries, expenses and costs in respect of each of its
employees and sub-contractors (not in its capacity as agent for the Owner) and
(b) save for the provisions of Article V hereof, indemnify its employees and
sub-contractors for any liabilities and losses incurred by such employees and
sub-contractors. 


ARTICLE IX


GOVERNING LAW - ARBITRATION


               SECTION
9.1. This Agreement shall be governed by and be construed in accordance with
the laws of England. 


               SECTION
9.2. All disputes arising out of this Agreement shall be arbitrated in London
in the following manner. One arbitrator is to be appointed by each of the
parties hereto and a third by the two so chosen. Their decision or that of any
two 


A-II-9





of them shall
be final and, for the purpose of enforcing any award, this Agreement may be
made a rule of the court. The arbitrators shall be commercial persons,
conversant with shipping matters. Such arbitration is to be conducted in
accordance with the rules of the London Maritime Arbitration Association terms
current at the time when the arbitration proceedings are commenced and in
accordance with the Arbitration Act 1996 or any statutory modification or
re-enactment thereof. 


               SECTION
9.3. In the event that the a party hereto shall state a dispute and designate
an arbitrator in writing, the other party shall have 20 Business Days to designate
its own arbitrator. If such other party fails to designate its own arbitrator
within such period, the arbitrator appointed by the first party can render an
award hereunder. 


               SECTION
9.4. Until such time as the arbitrators finally close the hearings, either
party shall have the right by written notice served on the arbitrators and on
the other party to specify further disputes or differences under this Agreement
for hearing and determination. 


               SECTION
9.5. The arbitrators may grant any relief, and render an award, which they or a
majority of them deem just and equitable and within the scope of this
Agreement, including but not limited to the posting of security. Awards
pursuant to this Article IX may include costs, including a reasonable allowance
for attorneys’ fees, and judgments may be entered upon any award made herein in
any court having jurisdiction. 


ARTICLE X


COUNTERPARTS


               SECTION
10.1. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument. 


ARTICLE XI


NOTICES


               SECTION
11.1. Every notice or other communication under this Agreement shall: 


	
  

 	
  

 	
  

 
	
  

 	
      (a)
 be in writing delivered personally or by first-class prepaid letter (airmail
 if available) or facsimile transmission or other means of telecommunication
 (other than telex) in permanent written form; 

 
	
  

 	
  

 	
  

 
	
  

 	
      (b)
 be deemed to have been received, in the case of a letter, when delivered
 personally or three (3) days after it has been put into the post and, in the
 case of a facsimile transmission or other means of telecommunication (other
 than telex) in permanent written form, at the time of dispatch (provided that
 if the date of dispatch is a Saturday or Sunday or a public holiday in the
 country of the addressee or if the time of dispatch is after the close of
 business in the country of 

 


A-II-10





the addressee
it shall be deemed to have been received at the opening of business on the next
day which is not a Saturday or Sunday or public holiday); and 


	
  

 	
  

 	
  

 
	
  

 	
 (c)  be
 sent: 

 
	
  

 	
  

 	
  

 
	
  

 	
      (i)
 to the Construction Supervisor at: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 COSTAMARE
 SHIPPING COMPANY S.A.

 60 Zephyrou Street & Syngrou Avenue

 17564

 Athens, Greece

 Telephone No.: +30 210-949-0000

Fax No.: +30 210-940-6454

 
	
  

 	
  

 	
  

 
	
  

 	
      (ii)
 to the Owner at: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 COSTAMARE INC.

 60 Zephyrou Street & Syngrou Avenue

 17564

 Athens, Greece

 Telephone No.: +30 210-949-0000

Fax No.: +30 210-940-6454

Attention: Chief Executive Officer

 



or to such
other address and/or numbers for a party as is notified by such party to the
other party under this Agreement. 


               SECTION
11.2. Each communication and document made or delivered by one party to another
pursuant to this Agreement shall be in the English language. 


               SECTION
11.3. This Agreement shall not create benefits on behalf of any other person
not a party to this Agreement, and this Agreement shall be effective only as
between the parties hereto, their successors and permitted assigns. 


A-II-11





               IN
WITNESS of which this Agreement has been duly executed
the day and year first before written. 


For the Owner 


For the Construction Supervisor 


A-II-12





SCHEDULE 1


FORM OF CONSTRUCTION CERTIFICATE


 [On the letterhead of the Construction
Supervisor]


[Vessel Owner]
(the “Owner”)

[Address] 
Facsimile: [  ]

Attention: [  ] 


Date: _________________ 


Dear Sirs, 


 [Name of Builder] (the “Builder”),
[Name of Vessel] (the “Vessel”) 


               We
refer to the construction supervision agreement dated [  ] between the Owner and
us (the “Supervision Agreement”). 


               Words
and expressions defined in the Supervision Agreement (whether expressly or by incorporation
by reference to another document) shall have the same meaning where used in
this certificate. 


               We
hereby certify, pursuant to Section 3.1(d) of the Supervision Agreement, as
follows: 


	
  

 	
  

 
	
 (i)

 	
 the Vessel
 has been duly completed and is ready for delivery to and acceptance by the
 Owner in or substantially in accordance with the Shipbuilding Contract and
 the Specifications and Plans; and 

 
	
  

 	
  

 
	
  (ii)

 	
 the Vessel
 is recommended for classification by [Name of the classification society] (the
 “Classification Society”). 

 




S-1-1






               With
respect to paragraph (ii) above, please find attached to this certificate the
provisional certificate of the Classification Society recommending such
classification of the Vessel / a duplicate or photocopy of the provisional
certificate of the Classification Society recommending such classification of the Vessel / the following evidence of the Classification Society’s
  recommendation of such classification of the Vessel [  ]. 

	
  

 	
  

 
	
  

 	
 Yours
 faithfully,

 
	
  

 	
  

 
	
  

 	

 


 
	
  

 	
 for and on
 behalf of

 
	
  

 	
 COSTAMARE SHIPPING COMPANY S.A.

 


S-1-2