Document:

EX-10.3

 Exhibit 10.3 
  

							
		 	SHIP MANAGEMENT AGREEMENT	 		 	 THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT
 CODE NAME:
“SHIPMENT 98”                                     PART
I

			
	 1.
  

 
	 	 Date of Agreement
  

27 th June 2011
  
	 	 Name of Vessel
  

NB 2531
  

	 2.
  
	 	 Owners (name, place of registered office and law of registry (Cl. 1)

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

 

	 Name
  
	 	 Name
  

		 	 Knutsen Shuttle Tankers 14 AS
  
	 		 	 Knutsen OAS Shipping AS
  

	 Place of registered office
  
	 	 Place of registered office
  

		 	 Smedasundet 40, 5529 Haugesund
  
	 		 	 Smedasundet 40, 5529 Haugesund
  

	 Law of registry
  
	 	 Law of registry
  

		 	 Norway
  
	 		 	 Norway
  

	 4.
  

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

27th June 2011
  

	 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)

 
 No
  
	 	 8.
  

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

(Cl. 3.4)
  

Yes
  

	 9.
  

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

(Cl. 3.5)
  

Yes
  
	 	 10.
  

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

 
 No
  

	 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(l))

 
 Yes
  
	 	 14.
  

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

 
 Yes
  

	 15.
  

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

USD 365.000
  
	 	 16.
  

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

A maximum of USD 50.000
  

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

 

	 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)

 

		 	 Knutsen Shuttle Tankers 14 AS
 Smedasundet 40,
Postboks 2017
 5504 Haugesund
 Tlf 52 70 40 00 Fax 52 70 40
40
	 		 	 Knutsen OAS Shipping AS
 Smedasundet 40,
Postboks 2017
 5504 Haugesund
 Tlf 52 70 40 00 Fax 52 70 40
40

	
	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) 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” and “B”,
“C” and “D” shall prevail over those of PART II to the extent of such conflict but no further.
			
	 Signature(s) (Owners)

Knutsen Shuttle Tankers 14 AS
  

/s/ TRYGVE SEGLEM
	 		 	 Signature(s) (Owners)

Knutsen OAS Shipping AS
  

/s/ TRYGVE SEGLEM

 PART II 

“Shipman 98” Standard Ship Management Agreement 

 

 1. Definitions 

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

“Owners” means the party identified in Box 2. 

“Managers” means the party identified in Box 3. 

“Vessel” means the vessel or vessels, details of which are set out in Annex “A” attached hereto. 

“Crew” means the Master, officers and ratings of the numbers, rank and nationality specified in Annex “B” attached hereto. 

“Crew Support Costs” means all expenses of a general nature which are not particularly referable to any individual vessel for the time being
managed by the Managers and which are incurred by the Managers for the purpose of providing an efficient and economic management service and, without prejudice to the generality of the foregoing, shall include the cost of crew standby pay, training
schemes for officers and ratings, cadet training schemes, sick pay, study pay, recruitment and interviews. 
 “Severance Costs” means the
costs which the employers are legally obliged to pay to or in respect of the Crew as a result of the early termination of any employment contract for service on the Vessel. 

“Crew Insurances” means insurances against crew risks which shall include but not be limited to death, sickness, repatriation, injury,
shipwreck unemployment indemnity and loss of personal effects. 
 “Management Services” means the services specified in sub-clauses 3.1 to
3.8 as indicated affirmatively in Boxes 5 to 12. 
 “ISM Code” means the International Management Code for the Safe Operation of Ships and
for Pollution Prevention as adopted by the International Maritime Organization (IMO) by resolution A.741(18) or any subsequent amendment thereto. 

“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. 
 2. Appointment of Managers 

With effect from the day and year stated in Box 4 and continuing unless and until terminated as provided herein, the Owners hereby appoint the Managers, and
the Managers hereby agree to act, as the Managers of the Vessel. 
 3. Basis of Agreement 

Subject to the terms and conditions herein provided, during the period of this Agreement, the Managers shall carry out Management Services in respect of the
Vessel as agents for and on behalf of the Owners. The Managers shall have authority to take such actions as they may from time to time in their absolute discretion consider to be necessary to enable them to perform this Agreement in accordance with
sound ship management practice. 
 3.1 Crew Management 

(only applicable if agreed according to Box 5) 
 The
Managers shall provide suitably qualified Crew for the Vessel as required by the Owners in accordance with the STCW 95 requirements, provision of which includes but is not limited to the following functions: 

 

	(i)	selecting and engaging the Vessel’s Crew, including payroll arrangements, pension administration, and insurances for the Crew other than those mentioned in Clause 6; 

 

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

  

	(iii)	ensuring that all members of the Crew have passed a medical examination with a qualified doctor certifying that they are fit for the duties for which they are engaged and are in possession of valid medical certificates
issued in accordance

	 	
with appropriate flag State requirements. In the absence of applicable flag State requirements the medical certificate shall be dated not more than three months prior to the respective Crew
members leaving their country of domicile and maintained for the duration of their service on board the Vessel; 

  

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

 

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

  

	(vi)	training of the Crew and supervising their efficiency; 

  

	(vii)	conducting union negotiations; 

  

	(viii)	operating the Managers’ drug and alcohol policy unless otherwise agreed. 

 3.2 Technical Management

 (only applicable if agreed according to Box 6) 

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

 

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

  

	(ii)	arrangement and supervision of dry dockings, repairs, alterations and the upkeep of the Vessel to the standards required by the Owners, provided that the Managers shall be entitled to incur the necessary expenditure to
ensure that the Vessel will comply with the law of the flag of the Vessel and of the places where she trades, and all requirements and recommendations of the classification society. 

 

	(iii)	arrangement of the supply of necessary stores, spares and lubricating oil; 

  

	(iv)	appointment of surveyors and technical consultants as the Managers may consider from time to time to be necessary; 

  

	(v)	development, implementation and maintenance of a Safety Management System (SMS) in accordance with the ISM Code (see sub-clauses 4.2 and 5.3). 

3.3 Commercial Management 
 (only applicable if agreed
according to Box 7) 
 The Managers shall provide the commercial operation of the Vessel, as required by the Owners, which includes, but is not limited
to, the following functions: 
  

	(i)	providing chartering services in accordance with the Owners’ instructions which include, but are not limited to, seeking and negotiating employment for the Vessel and the conclusion (including the execution
thereof) of charter parties or other contracts relating to the employment of the Vessel. If such a contract exceeds the period stated in Box 13, consent thereto in writing shall first be obtained from the Owners. 

 

	(ii)	arranging of the proper payment to Owners or their nominees of all hire and/or freight revenues or other moneys of whatsoever nature to which Owners may be entitled arising out of the employment of or otherwise in
connection with the Vessel. 

  

	(iii)	providing voyage estimates and accounts and calculating of hire, freights, demurrage and/or despatch moneys due from or due to the charterers passengers of the Vessel; 

 

	(iv)	issuing of voyage instructions; 

  

	(v)	appointing agents; 

  

	(vi)	appointing stevedores; 

  

	(vii)	arranging surveys associated with the commercial operation of the Vessel. 

 3.4 Insurance Arrangements

 (only applicable if agreed according to Box 8) 

The Managers shall arrange insurances in accordance with Clause 6, or such terms and conditions as the Owners shall have instructed or agreed, in particular
regarding conditions, insured values, deductibles and franchises. 

 

 PART II 

“Shipman 98” Standard Ship Management Agreement 

 

 3.5 Accounting Services 

(only applicable if agreed according to Box 9) 
 The
Managers shall: 
  

	(i)	establish an accounting system which meets the requirements of the Owners and provide regular accounting services, supply regular reports and records, 

 

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

3.6 Sale or Purchase of the Vessel 
 (only applicable
if agreed according to Box 10) 
 The Managers shall, in accordance with the Owners’ instructions, supervise the sale or purchase of the Vessel,
including the performance of any sale or purchase agreement, but not negotiation of the same. 
 3.7 Provisions (only applicable if agreed
according to Box 11)
 The Managers shall arrange for the supply of provisions. 

3.8 Bunkering (only applicable if agreed according to Box 12) 

The Managers shall arrange for the provision of bunker, of the quality specified by the Owners as required for the Vessel’s trade. 

4. Managers’ Obligations 
 4.1 The Managers
undertake to use their best endeavours to provide the agreed Management Services as agents for and on behalf of the Owners in accordance with sound ship management practice and to protect and promote the interests of the Owners in all matters
relating to the provision of services hereunder. 
 Provided, however, that the Managers in the performance of their management responsibilities
under this Agreement shall be entitled to have regard to their overall responsibility in relation to all vessels as may from time to time be entrusted to their management and in particular, but without prejudice to the generality of the foregoing,
the Managers shall be entitled to allocate available supplies, manpower and services in such manner as in the prevailing circumstances the Managers in their absolute discretion consider to be fair and reasonable. 

4.2 Where the Managers are providing Technical Management in accordance with sub-clause 3.2, they shall procure that the requirements of the law of the
flag of the Vessel am satisfied and they shall in particular be deemed to be the “Company” as defined by the ISM Code, assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities
imposed by the ISM Code when applicable. 
 5. Owners’ Obligations 

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

5.2 Where the Managers are providing Technical Management in accordance with sub-clause 3.2, the Owners shall: 

 

	(i)	procure that all officers and ratings supplied by them or on their behalf comply with the requirements of STCW 95; 

  

	(ii)	instruct such officers and ratings to obey all reasonable orders of the Managers in connection with the operation of the Managers’ safety management system. 

5.3 Where the Managers are not providing Technical Management in accordance with sub-clause 3.2, the Owners shall procure that the requirements of the
law of the flag of the Vessel are satisfied and that they, or such other entity as may be appointed by them and identified to the Managers, shall be deemed to be the “Company” as defined by the ISM Code assuming the responsibility for the
operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code when applicable.

 6. Insurance Policies 

The Owners shall procure, whether by instructing the Managers under sub-clause 3.4 or otherwise, that throughout the period of this Agreement: 

6.1 at the Owners’ expense, the Vessel is insured for not less than her sound market value or entered for her full gross tonnage, as the case may
be for: 
  

	(i)	usual hull and machinery marine risks (including crew negligence) and excess liabilities; 

  

	(ii)	protection and indemnity risks (including pollution risks and Crew Insurances); and 

  

	(iii)	war risks (Including protection and indemnity and crew risks) in accordance with the best practice of prudent owners of vessels of a similar type to the Vessel, with first class insurance companies, underwriters or
associations (“the Owners’ Insurances”); 

 6.2 all premiums and calls on the Owners’ Insurances are paid promptly
by their due date, 
 6.3 the Owners’ Insurances name the Managers and, subject to underwriters’ agreement, any third party
designated by the Managers as a joint assured, with full cover, with the Owners obtaining cover in respect of each of the insurances specified in sub-clause 6.1: 
  

	(i)	on terms whereby the Managers and any such third party are liable in respect of premiums or calls arising in connection with the Owners’ Insurances; or 

 

	(ii)	if reasonably obtainable, on terms such that neither the Managers nor any such third party shall be under any liability in respect of premiums or calls arising in connection with the Owners’ Insurances; or

  

	(iii)	on such other terms as may be agreed in writing. 

 Indicate alternative (i), (ii) or (iii) in Box
14. If Box 14 is left blank then (i) applies 
 6.4 written evidence is provided, to the reasonable satisfaction of the Managers, of their
compliance with their obligations under Clause 6 within a reasonable time of the commencement of the Agreement, and of each renewal date and, if specifically requested, of each payment date of the Owners’ Insurances. 

7. Income Collected and Expenses Paid on Behalf of Owners 

7.1 All moneys collected by the Managers under the terms of this Agreement (other than moneys payable by the Owners to the Managers) and any interest
thereon shall be held to the credit of the Owners in a separate bank account. 
 7.2 All expenses incurred by the Managers under the terms of
this Agreement on behalf of the Owners (including expenses as provided in Clause 8) may be debited against the Owners in the account referred to under sub-clause 7.1 but shall in any event remain payable by the Owners to the Managers on demand.

 8. Management Fee 
 8.1 The Owners shall
pay to the Managers for their services as Managers under this Agreement an annual management fee as stated In Box 15 which shall be payable, by equal monthly instalments in advance, the first Instalment being payable on the commencement of this
Agreement (see Clause 2 and Box 4) and subsequent instalments being payable every month. 
 8.2 The management fee shall be subject to an
annual review on the anniversary date of the Agreement and the proposed fee shall be presented In the annual budget referred to in sub-clause 9.1. 

8.3 The Managers shall, at no extra cost to the Owners, provide their own office accommodation, office staff, facilities and stationery. Without
limiting the generality of Clause 7 the Owners shall reimburse the Managers for postage and communication expenses, travelling expenses, and other out of pocket expenses properly incurred by the Managers in pursuance of the Management
Services. 
 8.4 In the event of the appointment of the Managers being terminated by the Owners or the Managers in accordance with the
provisions of Clauses 17 and 18 other than by reason of default by  

 

 PART II 

“Shipman 98” Standard Ship Management Agreement 

 

 
the Managers, or if the Vessel is lost, sold or otherwise disposed of, the “management fee” payable to the Managers according to the provisions of sub-clause 8.1, shall continue to be
payable for a further period of three calendar months as from the termination date. In addition, provided that the Managers provide Crew for the Vessel in accordance with sub-clause 3.1: 

 

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

  

	(ii)	the Owners shall pay an equitable proportion of any Severance Costs which may materialize, not exceeding the amount stated in Box 16. 

8.5 If the Owners decide to lay-up the Vessel whilst this Agreement remains in force and such lay-up lasts for more than three months, an appropriate
reduction of the management fee for the period exceeding three months until one month before the Vessel is again put into service shall be mutually agreed between the parties. 

8.6 Unless otherwise agreed in writing all discounts and commissions obtained by the Managers in the course of the management of the Vessel shall be
credited to the Owners. 
 9. Budgets and Management of Funds 

9.1 The Managers shall present to the Owners annually a budget for the following twelve months in such form as the Owners require. The budget for the
first year hereof is set out in Annex “C” hereto. Subsequent annual budgets shall be prepared by the Managers and submitted to the Owners by 15 November each year not less than three months before the anniversary date of the
commencement of this Agreement (see Clause 2 and Box 4). 
 9.2 The Owners shall indicate to the Managers their acceptance and approval of the
annual budget within one month of presentation and in the absence of any such indication the Managers shall be entitled to assume that the Owners have accepted the proposed budget. 

9.3 Following the agreement of the budget, the Managers shall prepare and present to the Owners their estimate of the working capital requirement of
the Vessel and the Managers shall each month update this estimate. Based thereon, the Managers shall each month request the Owners in writing for the funds required to run the 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. Such funds shall be received by the Managers within ten running days after the receipt by the Owners of the Managers’
written request and shall be held to the credit of the Owners in a separate bank account. 
 9.4 The Managers shall produce a comparison
between budgeted and actual income and expenditure of the Vessel, in such form as required by the Owners, monthly or at such other intervals as mutually agreed. 

9.5 Notwithstanding anything contained herein to the contrary, the Managers shall in no circumstances be required to use or commit their own funds to
finance the provision of the Management Services. 
 10. Managers’ Right to Sub-Contract 

The Managers shall not have the right to sub-contract any of their obligations hereunder, including those mentioned in sub-clause 3.1, without the prior
written consent of the Owners, which shall not be unreasonably withheld. In the event of such a sub-contract, the Managers shall remain fully liable for the due performance of their obligations under this Agreement. 

11. Responsibilities 
 11.1
Force Majeure – Neither the Owners nor the Managers shall be under any liability for any failure to perform any of their obligations hereunder by reason of any cause whatsoever of any nature or kind beyond their reasonable
control. 
 11.2 Liability to Owners – (i) Without prejudice to sub-clause 11.1, the Managers
shall be under no liability whatsoever to the Owners for any loss, damage, delay or expense of whatsoever

 
nature, whether direct or indirect, (including but not limited to loss of profit arising out of or in connection with detention of or delay to the Vessel) and howsoever arising in the course
of performance of the Management Services UNLESS same is proved to have resulted solely from the negligence, gross negligence or wilful default of the Managers or their employees, or agents or sub-contractors employed by them in connection
with the Vessel, in which case (save where loss, damage, delay or expense has resulted from the Managers’ personal act or omission committed with the intent to cause same or recklessly and with knowledge that such loss, damage, delay or expense
would probably result) the Managers’ liability for each incident or series of incidents giving rise to a claim or claims shall never exceed; a total of ten times the annual management fee payable hereunder. 

 

	(ii)	Notwithstanding anything that may appear to the contrary in this Agreement, the Managers shall not be liable for any of the actions of the Crew, even if such actions are negligent, grossly negligent or wilful,
except only to the extent that they are shown to have resulted from a failure by the Managers to discharge their obligations under sub-clause 3.1, in which case their liability shall be limited in accordance with the terms of this Clause 11.

 11.3 Indemnity – Except to the extent and solely for the amount therein set out that the Managers
would be liable under sub-clause 11.2, the Owners hereby undertake to keep the Managers and their employees, agents and sub-contractors indemnified and to hold them harmless against all actions, proceedings, claims, demands or liabilities whatsoever
or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of the Agreement, and against and in respect of all costs, losses, damages and expenses (including legal
costs and expenses on a full indemnity basis) which the Managers may suffer or incur (either directly or indirectly) in the course of the performance of this Agreement. 

11.4 “Himalaya” – It is hereby expressly agreed that no employee or agent of the Managers (including every sub-contractor from
time to time employed by the Managers) shall in any circumstances whatsoever be under any liability whatsoever to the Owners for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or
default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Clause 11, every exemption, limitation, condition and liberty herein contained and
every right, exemption from liability, defence and immunity of whatsoever nature applicable to the Managers or to which the Managers are entitled hereunder shall also be available and shall extend to protect every such employee or agent of the
Managers acting as aforesaid and for the purpose of all the foregoing provisions of this Clause 11 the Managers are or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be their
servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement. 

12. Documentation 
 Where the Managers are providing
Technical Management in accordance with sub-clause 3.2 and/or Crew Management in accordance with sub-clause 3.1, they shall make available, upon Owners’ request, all documentation and records related to the Safety Management System (SMS) and/or
the Crew which the Owners need in order to demonstrate compliance with the ISM Code and STCW 95 or to defend a claim against a third party. 
 13.
General Administration 
 13.1 The Managers shall handle and settle all claims arising out of the Management Services hereunder and keep the
Owners informed regarding any incident of which the Managers become aware which gives or may give rise to claims or disputes involving third parties.

 

 PART II 

“Shipman 98” Standard Ship Management Agreement 

 

 13.2 The Managers shall, as instructed by the Owners, bring or defend actions, suits or proceedings in
connection with matters entrusted to the Managers according to this Agreement. 
 13.3 The Managers shall also have power to obtain legal or
technical or other outside expert advice in relation to the handling and settlement of claims and disputes or all other matters affecting the interests of the Owners in respect of the Vessel. 

13.4 The Owners shall arrange for the provision of any necessary guarantee bond or other security. 

13.5 Any costs reasonably incurred by the Managers in carrying out their obligations according to Clause 13 shall be reimbursed by the Owners.

 14. Auditing 
 The Managers shall at all times
maintain and keep true and correct accounts and shall make the same available for inspection and auditing by the Owners at such limes as may be mutually agreed. On the termination, for whatever reasons, of this Agreement, the Managers shall release
to the Owners, if so requested, the originals where possible, or otherwise certified copies, of all such accounts and all documents specifically relating to the Vessel and her operation. 

15. Inspection of Vessel 
 The Owners shall have the right
at any time after giving reasonable notice to the Managers to inspect the Vessel for any reason they consider necessary. 
 16. Compliance with Laws and
Regulations 
 The Managers will not do or permit to be done anything which might cause any breach or infringement of the laws and regulations of the
Vessel’s flag, or of the places where she trades. 
 17. Duration of the Agreement 

This Agreement shall come into effect on the day and year stated in Box 4 and shall continue until the date stated in Box 17. Thereafter it shall continue
until terminated by either party giving to the other notice in writing, in which event the Agreement shall terminate upon the expiration of a period of three months from the date upon which such notice was given. 

18. Termination 
 18.1
Owners’ Default 
  

	(i)	The Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing if any moneys payable by the Owners under this Agreement and/or the owners of any associated vessel, details of which
are listed in Annex “D”, shall not have been received in the Managers’ nominated account within ten running days of receipt by the Owners of the Manager’s written request or if the Vessel is repossessed by the Mortgagees.

  

	(ii)	If the Owners: 

  

	 	(a)	fail to meet their obligations under sub-clauses 5.2 and 5.3 of this Agreement for any reason within their control, or 

  

	 	(b)	proceed with the employment of or continue to employ the Vessel in the carriage of contraband, blockade running, or an unlawful trade, or on a voyage which in the reasonable opinion of the Managers is unduly hazardous
or improper, 

 the Managers may give notice of the default to the Owners, requiring them to remedy it as soon as practically possible. In the
event that the Owners fail to remedy it within a reasonable time to the satisfaction of the Managers, the Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing. 

18.2 Manager’s Default 

If the Managers fail to meet their obligations under Clauses 3 and 4 of this Agreement for any reason within the control of the Managers, the Owners may give
notice to the Managers of the default, requiring them to remedy it as soon as practically possible. In the event that the Managers fail to remedy it within a reasonable time to the satisfaction of the Owners, the Owners shall be entitled to
terminate the Agreement with immediate effect by notice in writing. 

 18.3 Extraordinary Termination 

This Agreement shall be deemed to be terminated in the case of the sale of the Vessel or if the Vessel becomes a total loss or is declared as a constructive or
compromised or arranged total loss or is requisitioned. 
 18.4 For the purpose of sub-clause 18.3 hereof 

 

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

 

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

18.5 This Agreement shall terminate forthwith in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or
bankruptcy of either party (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver is appointed, or if it suspends payment, ceases to carry on business or makes any special arrangement or composition with its
creditors. 
 18.6 The termination of this Agreement shall be without prejudice to all rights accrued due between the parties prior to the
date of termination. 
 19. Law and Arbitration 

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

The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration
proceedings are commenced. 
 The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its
arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole
arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has
done so within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the
other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement. 
 Nothing herein shall
prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator. 
 In cases where neither the claim
nor any counterclaim exceeds the sum of €50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are
commenced. 
 19.2 This Agreement shall be governed by and construed in accordance with Title 9 of the United States Code and the Maritime Law of the
United States and any dispute arising out of or in connection with this Agreement shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any
two of them shall be final, and for the purposes of enforcing any award, judgement may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime
Arbitrators, Inc. 

 

 PART II 

“Shipman 98” Standard Ship Management Agreement 

 

 In cases where neither the claim nor any counterclaim exceeds the sum of USD 50,000 (or such other sum as the
parties may agree) the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced. 

19.3 This Agreement shall be governed by and construed in accordance with the laws of the place mutually agreed by the parties and any dispute arising
out of or in connection with this Agreement shall be referred to arbitration at a mutually agreed place, subject to the procedures applicable there.  

19.4 If Box 18 in Part I is not appropriately filled in, sub-clause 19.1 of this Clause shall apply. 

Note: 19.1, 19.2 and 19.3 are alternatives; indicate alternative agreed in Box 18. 

20. Notices 
 20.1 Any notice to be given by either
party to the other party shall be in writing and may be sent by fax, telex, registered or recorded mail or by personal service. 
 20.2 The
address of the·Parties for service of such communication shall be as stated in Boxes 19 and 20, respectively.

 

 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:	 		  	27.06.2011
			
	Name of Vessel(s):	 		  	NB 2531 Hyundai Heavy Industries Co., Ltd
			
	Particulars of Vessel(s):	 		  	Shuttle Tanker

 Date of Agreement 27th June 2011- Re: NB 2531 Hyundai Heavy Industries Co., Ltd 

Clauses 
 Clause 17 

This Agreement shall come into effect on the day stated in Box 4 and shall continue until terminated by either party giving to the other notice in writing, in
which event the Agreement shall terminate upon the expiration of a period of six months from the date upon which such notice was given. 
 The Owner may
only terminate this Agreement if so decided in the Company meeting in accordance with the Company Agreement. Documentation for such decision shall be presented to Manager along with the termination letter. 

Clause 19 
 The Ship Management Agreement shall be
governed by Norwegian Law and the parties accept Haugesund City Court as proper legal venue for for the settlement of any controversy or dispute that may araise in connection with, or as a result of this contract that cannot be resolved by mutual
agreement between the parties hereto. 

 ADDENDUM NO. 1 

TO 
 SHIP MANAGEMENT
AGREEMENT 
 NB 2531 

“HILDA KNUTSEN” 

This Addendum No. 1 (this “Addendum”) to the Ship Management Agreement (the “Agreement”),
dated June 27, 2011, between Knutsen Shuttle Tankers 14 AS, a Norwegian private limited liability company (the “Owners”), and Knutsen OAS Shipping AS, a Norwegian private limited liability company (the “Prior
Managers”), is made as of June 30, 2014, between the Owners, the Prior Managers and KNOT Management AS, a Norwegian private limited liability company (the “Managers”). 

RECITALS 
 WHEREAS, the
Owners, the Prior Managers and the Managers desire that as of July 1, 2012 (the “Substitution Effective Date”), the Managers shall be substituted for the Prior Managers under the Agreement, whereupon the Prior Managers
shall be relieved of their rights, obligations and liabilities thereunder, and the Managers shall assume the same; and 

WHEREAS, the Owners and the Managers wish to amend certain provisions of the Agreement and agree that such amendments shall take
effect as of either the Substitution Effective Date or the date (the “Transfer Effective Date”) on which the shares in the Owner have been transferred to KNOT Shuttle Tankers AS, a Norwegian limited liability company, as
indicated. 
 AGREEMENT 

NOW, THEREFORE, for and in consideration of good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the
parties’ execution and delivery hereof, the parties agree as follows: 
 Section 1. Substitution for Prior Owners.
With effect as of the Substitution Effective Date, each party to this Addendum agrees that: (a) the Managers shall be substituted for the Prior Managers as the “Managers” in the Agreement, and the Agreement shall be construed and
treated in all respects as if the Managers were named therein instead of the Prior Managers; (b) the Managers shall assume all rights, obligations and liabilities of the Prior Managers under the Agreement and (c) the Owners shall be
released from all rights, obligations and liabilities owed to the Prior Managers under the Agreement, and the Owners shall release the Prior Managers from all rights, obligations and liabilities under the Agreement. 

Section 2. Amendments to the Agreement as of the Substitution Effective Date. With effect as of the Substitution Effective
Date, the Agreement shall be modified as follows: 
 2.1 Box 3, Name of the Agreement is hereby amended and restated in its
entirety to read as follows: 
 “KNOT Management AS” 

	 	2.2	Box 3, Place of registered office is hereby amended and restated in its entirety to read as follows: 

“Smedasundet 40, 5529 Haugesund” 
  

	 	2.3	Box 3, Law of registry is hereby amended and restated in its entirety to read as follows: 

“Norway” 

Section 3. Amendments to the Agreement as of the Transfer Effective Date. With effect as of the Transfer Effective Date, the
Agreement shall be modified as follows: 
  

	 	3.1	Box 1, Name of Vessel is hereby amended and restated in its entirety to read as follows: 

“Hilda Knutsen” 
  

	 	3.2	Box 13 of the Agreement is hereby amended and restated in its entirety to read as follows: 

“Until the Agreement is terminated” 
  

	 	3.3	Box 14 of the Agreement is hereby amended and restated in its entirety to read as follows: 

“(ii)” 
  

	 	3.4	Box 17 of the Agreement is hereby amended and restated in its entirety to read as follows: 

“One year after commencement” 
  

	 	3.5	Box 18 of the Agreement is hereby amended and restated in its entirety to read as follows: 

“19.3 Norwegian law, Haugesund as place of arbitration” 

3.6 The paragraph located above the signature block on page 1 of the Agreement is hereby amended and restated in its entirety to read as
follows: 
 “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) and “C” (Budget) 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” and “C” shall prevail over those of PART II to the extent of such conflict but no further.” 

  
 2 

	 	3.7	Sub-clause 3.2 of the Agreement is hereby amended and restated in its entirety to read as follows: 

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

 

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

  

	 	(ii)	arrangement and supervision of dry dockings, repairs, alterations and the upkeep of the Vessel to the standards required by the Owners, provided that the Managers shall be entitled to incur the necessary expenditure to
ensure that the Vessel will comply with the law of the flag of the Vessel and of the places where she trades and all requirements and recommendations of the classification society; 

 

	 	(iii)	arrangement of the supply of necessary stores, spares and lubricating oil; 

  

	 	(iv)	appointment of surveyors and technical consultants as the Managers may consider from time to time to be necessary; 

  

	 	(v)	development, implementation and maintenance of a Safety Management System (SMS) in accordance with the ISM Code (see sub-clauses 4.2 and 5.3); 

 

	 	(vi)	arrangement of the lay-up of the Vessel; and 

  

	 	(vii)	arrangement of the loading and discharging and all related matters, subject to the provisions of the time charter. 

  

	 	3.8	Sub-clause 9.3 of the Agreement is hereby amended and restated in its entirety to read as follows: 

“Following the agreement of the budget, the Managers shall prepare and present to the Owners their estimate of the working capital
requirement of the Vessel and the Managers shall each quarter update this estimate. Based thereon, the Managers shall each quarter request the Owners in writing for the funds required to run the Vessel for the ensuing quarter, including 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 Managers within 60 running days after the receipt by the Owners of the
Managers’ written request and shall be held to the credit of the Owners in a separate bank account.” 
  

	 	3.9	Sub-clause 11.2(i) of the Agreement is hereby amended and restated in its entirety to read as follows: 

“Without prejudice to sub-clause 11.1, the Managers shall be under no liability whatsoever to the Owners for any loss, damage, delay or
expense of whatsoever nature, whether direct or indirect, including, but not limited to, loss of profit arising out of or in connection with detention of or delay to the Vessel and howsoever arising in the course of performance of the Management
Services (such loss, damage, delay or expense, a “Loss”); provided, however, that if such Loss is proved to be caused by or due to the fraud, gross negligence or willful misconduct of the Managers, the Managers shall be liable for
any claim or claims in connection with such Loss in an amount not to exceed ten times the annual management fee payable hereunder.” 

  
 3 

 3.10 Sub-clause 18.1(i) of the Agreement is hereby amended and restated in its entirety to
read as follows: 
 “The Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing if any
moneys payable by the Owners under this Agreement shall not have been received in the Managers’ nominated account within 60 running days of receipt by the Owners of the Managers’ written request or if the Vessel is repossessed by the
Mortgagees.” 
 3.11 Annex “A” of the Agreement is hereby amended and restated in its entirety in the form attached
hereto as Exhibit A. 
 3.12 The Agreement is hereby amended by adding Annex “B,” in the form attached hereto as
Exhibit B, and Annex “C,” in the form attached hereto as Exhibit C, at the end thereof. 
 Section 4. No
Other Changes. Except as specifically set forth in this Addendum, the terms and provisions of the Agreement shall remain unmodified, and the Agreement is hereby confirmed by the parties in full force and effect as amended herein. The
Agreement (as amended by this Addendum) constitutes the entire understanding of the parties with respect to the subject matter thereof, and no other covenants have been made by either party to the other. 

Section 5. Counterparts. This Addendum may be executed in one or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. 

Section 6. Severability. If any provision of this Addendum is held to be unenforceable under applicable law, such provision
shall be excluded from this Addendum and the balance of this Addendum shall be interpreted as if such provision was so excluded and shall be enforceable in accordance with its terms. 

[Signature Page Follows.] 

  
 4 

 IN WITNESS WHEREOF, the parties have executed this Addendum as of the date first above written. 

 

			
	OWNERS
	
	KNUTSEN SHUTTLE TANKERS 14 AS
		
	By:	 	 /s/ TRYGVE SEGLEM

	Name:	 	Trygve Seglem
	Title:	 	Chairman
	
	PRIOR MANAGERS
	
	KNUTSEN OAS SHIPPING AS
		
	By:	 	 /s/ TRYGVE SEGLEM

	Name:	 	Trygve Seglem
	Title:	 	Chairman
	
	MANAGERS
	
	KNOT MANAGEMENT AS
		
	By:	 	 /s/ TRYGVE SEGLEM

	Name:	 	Trygve Seglem
	Title:	 	Chairman

 Signature Page to 

Addendum No. 1 to Ship Management Agreement 

 EXHIBIT A 

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

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO) 

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

 
 Hilda Knutsen 

 

			
	Main Particulars	 	
		
	 Owner
	 	Knutsen Shuttle Tankers 14 AS
		
	 Operator
	 	KNOT Management AS
		
	 Classification / Notation
	 	DNV +1A1, ICE-1C, WINTERIZED COLD (-15â„ƒ, -35â„ƒ), CSR, Tanker for Oil ESP, BOW LOADING, SPM, COMF-V(3)C(3), HELDK-SH (CAA-N), OPP-F, E0, ESV-DP(HIL), F-AMC, CCO, DYNPOS-AUTR (A), NAUT-AW, VCS-2,
CLEAN DESIGN, COAT-PSPC(B), CSA-FLS2, PLUS, BIS, TMON
		
	 Flag / Register
	 	UK
		
	 Home Port
	 	ABERDEEN
		
	 IMO Number
	 	9630030
		
	 Service Speed
	 	13,5 (Charter Party Speed)
		
	Main Dimensions	 	
		
	 Length overall
	 	275,70 m
		
	 Length between Perpendiculars
	 	256,00 m
		
	 Breath (Moulded)
	 	46,033 m
		
	 Depth (Moulded)
	 	22,70
		
	 Keel to masthead
	 	58,145 m
		
	 Ballast parallel body length Total/ Bow-mid manifold/stern-mid manifold
	 	81,81 / 40,16 / 41,65

									
	 Summer deadweight (SDWT) parallel body length Total/

Bow-mid manifold/stern-mid manifold
	 	100,18 / 41,65 / 58,53
		
	Manifold arrangement	 	 Arrangement:
 4x 400 mm (16
“) ANSI (port side & starboard side)

					
	Draft/Displacement/Deadweight	 	Loadline	 	Draft	 	Displacement	 	    Deadweight
		 	Summer:	 	15,23 metres	 	148,773 MT	 	    119,997 MT
		 	Winter:	 	15,199 metres	 	148,437 MT	 	119,337 MT
		 	Tropical:	 	15,845 metres	 	155,453 MT	 	160,532 MT
		 	Lightship:	 	3,419 Metres	 	28,776 MT	 	
		 	Normal Ballast	 	7,910 Metres	 	71,819 MT	 	42,719 MT
		
	Gross tonnage	 	80,850
		
	Net tonnage	 	36,065
		
	Machinery	 	
		
	Main engine	 	 Hyundai-Man B&W MAN
  

2x MAN 6S70ME-C, Effect: 2 x 13545 Bhp / 2 x 9960 KW

		
	Propeller	 	KAWASAKI HEAVY INDUSTRIES controllable pitch propeller
		
	Boilers (Maker / Type / Pressure / Capacity))	 	 2x Aalborg Mission OL
 18 bars
/35000kg/hr

		
	Alternators	 	 4-stroke, trunk piston in line type

2x 3960 KW Hyundai Himsen 9H32/40
 2x 4480 KW Hyundai Himsen
8H32/40

		
	Steering gear (Maker / Type)	 	Rolls Royce /Electro hydraulic rotary vane type with electric pump control
		
	Bow Thrusters	 	Brunvoll 2 x 2200 KW + AZIMUT 2 x AR100 LTC +
		
	Stern Thrusters	 	Brunvoll 2 x 2200 KW + AZIMUT 2xAR100 LNC (KT2600-AU100TC)
					
	Cargo Equipment	 		 		 		 	
		
	Cargo tanks	 	 No of tanks: 12 + 2 slops
 No of
grades: 2
 98% capacity, cargo tanks:     137 515,6 m3

98% slop tanks capacity:            2 454,0 m3

Total 98% capacity:                139 969,6 m3

		
	Cargo pumps (Type/Maker/Capacity/head)	 	4x centrifugal / 3 000 m3/h
		
	Spray/stripping pumps (Maker/Capacity/head)	 	CSP 300/600m3/h

  
 7 

			
		
	Ballast pumps (Type/Maker/Capacity)	 	Centrifugal/4 000m3/h 25 m
		
	High duty Compressor (Type/Maker/Capacity)	 	N/A
		
	Low duty Compressor (Type/Maker/Capacity	 	N/A
		
	Mooring equipment	 	
		
	Mooring Winches (Type/Maker/heaving power/break capacity	 	8 x Hydraulic double drum / Pusnes / 25 t / 80 t
		
	 Mooring ropes on drums

/No/diameter/material/length/Breaking strength
	 	 Wire (rope tails)
 16 /38 mm/ wire+(rope
tail) / 275 m+(11m)/100 t

  
 8 

 EXHIBIT B 

ANNEX “B” (MANNING) TO 
 THE BALTIC AND
INTERNATIONAL MARITIME COUNCIL (BIMCO) 
 STANDARD SHIP MANAGEMENT AGREEMENT-CODE NAME: “SHIPMAN 98” 

 
  

HILDA KNUTSEN 

 

									
	 	  	 Budget 2014

On board vs on leave

	 	  	No	  	Nat	  	No	  	Nat.
	Master/Kaptein	  	1	  	Nor	  	1	  	Nor
	Ch.off/Ovstm	  	1	  	Nor	  	1	  	Nor
	Ch.off.jr/Ovstm.jr	  	1	  	Nor	  	1	  	Nor
	2.off/1.stm	  	1	  	Nor	  	1	  	Nor
	2.off.jr/1.stm.jr	  		  		  		  	
	3.off/2.stm	  	1	  	Nor	  	1	  	Nor
	3.off.jr/2.stm.jr	  		  		  		  	
					
	Ch.eng/Mask.sj	  	1	  	Nor	  	1	  	Nor
	Cargo Eng./Cargomask.	  		  		  		  	
	2.eng/1.mask.	  	1	  	Fil	  	1	  	Fil
	2.eng.jr/1.mask.jr	  		  		  		  	
	3.eng/2.mask	  	1	  	Fil	  	1	  	Fil
	4.eng/3.mask	  	1	  	Fil	  	1	  	Fil
					
	Electr/Elektriker	  	1	  	Fil	  	1	  	Fil
	Electr ass/Elektr.ass.	  	1	  	Fil	  	1	  	Fil
	Bosun/Arb.leder	  	1	  	Fil	  	1	  	Fil
	Pumpman/Pumpemann	  	1	  	Fil	  	1	  	Fil
	AB/Matros	  	3	  	Fil	  	3	  	Fil
	OS/Lettmatros	  	1	  	Fil	  	1	  	Fil
					
	Motorman/Motormann	  	2	  	Fil	  	2	  	Fil
	Fitter/Reparatør	  	1	  	Fil	  	1	  	Fil
	Oiler/Smører	  		  		  		  	
	Wiper/Smører	  	1	  	Fil	  	1	  	Fil
					
	Ch.stwrd/Forpl.sj	  	1	  	Fil	  	1	  	Fil
	Clerk (Ch.cook/Kokk)	  		  		  		  	
	Messman/Messegutt	  	1	  	Fil	  	1	  	Fil
	Stew/Forpl.ass	  		  		  		  	
	Boy/Messegutt	  	1	  	Fil	  	1	  	Fil
					
	Sup.Num./Painter Cleaner	  		  		  		  	
	Sup.Num.	  		  		  		  	
		  	  
	  		  	  
	  	
	On board	  	24	  		  	24	  	
		  	  
	  		  	  
	  	

 

 

  
 9 

 EXHIBIT C 

ANNEX “C” (BUDGET) TO 
 THE BALTIC AND
INTERNATIONAL MARITIME COUNCIL (BIMCO) 
 STANDARD SHIP MANAGEMENT AGREEMENT-CODE NAME: “SHIPMAN 98” 

 
  

Manager’s Budget for 2014: 
 HILDA KNUTSEN 

 

									
	DESCRIPTION	  	USD PER DAY	 	  	USD PER YEAR	 
	 1. Technical Expences
	  	 	3 307,67	  	  	 	1 207 300	  
	 2. Victually
	  	 	369,86	  	  	 	135 000	  
	 3. Lubrication oils
	  	 	493,15	  	  	 	180 000	  
	 4. Manning
	  	 	10 553,12	  	  	 	3 851 845	  
	 5. Insurance
	  	 	1 504,36	  	  	 	549 093	  
	 6. Management fee
	  	 	1 218,41	  	  	 	444 721	  
		  	  
	  
	 	  	  
	  
	 
	 Total
	  	 	17 446,57	  	  	 	6 367 959,05	  

  
 10EX-10.4

 Exhibit 10.4 
  

							
		 	SHIP MANAGEMENT AGREEMENT	 		 	 THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO) STANDARD SHIP MANAGEMENT AGREEMENT

CODE NAME: “SHIPMENT 98”
                    PART I

				
	 1.
  

 
	 	 Date of Agreement
  

27 th June 2011
  
	 		 	 Name of Vessel
  

NB 2532
  

	 2.
  
	 	 Owners (name, place of registered office and law of registry (Cl. 1)

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

 

	Name	 	Name
		 	  
 Knutsen Shuttle Tankers 15 AS

 
	 		 	  
 Knutsen OAS Shipping AS

 

	Place of registered office	 	Place of registered office
		 	  
 Smedasundet 40, 5529 Haugesund

 
	 		 	  
 Smedasundet 40, 5529 Haugesund

 

	Law of registry	 	Law of registry
		 	  
 Norway

 
	 		 	  
 Norway

 

	 4.
  

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

27th June 2011
  

	 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)

 
 No
  
	 	 8.
  

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

 
 Yes
  

	 9.
  

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

 
 Yes
  
	 	 10.
  

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

 
 No
  

	 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))

 
 Yes
  
	 	 14.
  

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

 
 Yes
  

	 15.
  

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

USD 365.000
  
	 	 16.
  

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

A maximum of USD 50.000
  

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

 

	 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)
				
		 	 Knutsen Shuttle Tankers 15 AS
 Smedasundet 40,
Postboks 2017
 5504 Haugesund
 Tif 52 70 40 00 Fax 52 70 40
40
	 		 	 Knutsen OAS Shipping AS
 Smedasundet 40,
Postboks 2017
 5504 Haugesund
 Tlf 52 70 40 00 Fax 52 70 40
40

 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) 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” and “B”, “C” and “D” shall prevail over those of PART II to the extent of such conflict but no further. 

			
		
	 Signature(s) (Owners)

Knutsen Shuttle Tankers 15 AS
  

/s/ TRYGVE SEGLEM
	 	 Signature(s) (Owners)

Knutsen OAS Shipping AS
  

/s/ TRYGVE SEGLEM

 PART II 

“Shipman 98” Standard Ship Management Agreement 

 

 1. Definitions 

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

“Owners” means the party identified in Box 2. 

“Managers” means the party identified in Box 3. 

“Vessel” means the vessel or vessels, details of which are set out in Annex “A” attached hereto. 

“Crew” means the Master, officers and ratings of the numbers, rank and nationality specified in Annex “B” attached hereto. 

“Crew Support Costs” means all expenses of a general nature which are not particularly referable to any individual vessel for the time being
managed by the Managers and which are incurred by the Managers for the purpose of providing an efficient and economic management service and, without prejudice to the generality of the foregoing, shall include the cost of crew standby pay, training
schemes for officers and ratings, cadet training schemes, sick pay, study pay, recruitment and interviews. 
 “Severance Costs” means the
costs which the employers are legally obliged to pay to or in respect of the Crew as a result of the early termination of any employment contract for service on the Vessel. 

“Crew Insurances” means insurances against crew risks which shall include but not be limited to death, sickness, repatriation, injury,
shipwreck unemployment indemnity and loss of personal effects. 
 “Management Services” means the services specified in sub-clauses 3.1 to
3.8 as indicated affirmatively in Boxes 5 to 12. 
 “ISM Code” means the International Management Code for the Safe Operation of Ships and
for Pollution Prevention as adopted by the International Maritime Organization (IMO) by resolution A.741(18) or any subsequent amendment thereto. 

“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. 
 2. Appointment of Managers 

With effect from the day and year stated in Box 4 and continuing unless and until terminated as provided herein, the Owners hereby appoint the Managers, and
the Managers hereby agree to act, as the Managers of the Vessel. 
 3. Basis of Agreement 

Subject to the terms and conditions herein provided, during the period of this Agreement, the Managers shall carry out Management Services in respect of the
Vessel as agents for and on behalf of the Owners. The Managers shall have authority to take such actions as they may from time to time in their absolute discretion consider to be necessary to enable them to perform this Agreement in accordance with
sound ship management practice. 
 3.1 Crew Management 

(only applicable if agreed according to Box 5) 
 The
Managers shall provide suitably qualified Crew for the Vessel as required by the Owners in accordance with the STCW 95 requirements, provision of which includes but is not limited to the following functions: 

 

	(i)	selecting and engaging the Vessel’s Crew, including payroll arrangements, pension administration, and insurances for the Crew other than those mentioned in Clause 6; 

 

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

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

  

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

 

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

  

	(vi)	training of the Crew and supervising their efficiency; 

  

	(vii)	conducting union negotiations; 

  

	(viii)	operating the Managers’ drug and alcohol policy unless otherwise agreed. 

 3.2 Technical Management

 (only applicable if agreed according to Box 6) 

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

 

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

  

	(ii)	arrangement and supervision of dry dockings, repairs, alterations and the upkeep of the Vessel to the standards required by the Owners, provided that the Managers shall be entitled to incur the necessary expenditure to
ensure that the Vessel will comply with the law of the flag of the Vessel and of the places where she trades, and all requirements and recommendations of the classification society. 

 

	(iii)	arrangement of the supply of necessary stores, spares and lubricating oil; 

  

	(iv)	appointment of surveyors and technical consultants as the Managers may consider from time to time to be necessary; 

  

	(v)	development, implementation and maintenance of a Safety Management System (SMS) in accordance with the ISM Code (see sub-clauses 4.2 and 5.3). 

3.3 Commercial Management 
 (only applicable if agreed
according to Box 7) 
 The Managers shall provide the commercial operation of the Vessel, as required by the Owners, which includes, but is not limited
to, the following functions: 
  

	(i)	providing chartering services in accordance with the Owners’ instructions which include, but are not limited to, seeking and negotiating employment for the Vessel and the conclusion (including the execution
thereof) of charter parties or other contracts relating to the employment of the Vessel. If such a contract exceeds the period stated in Box 13, consent thereto in writing shall first be obtained from the Owners. 

 

	(ii)	arranging of the proper payment to Owners or their nominees of all hire and/or freight revenues or other moneys of whatsoever nature to which Owners may be entitled arising out of the employment of or otherwise in
connection with the Vessel. 

  

	(iii)	providing voyage estimates and accounts and calculating of hire, freights, demurrage and/or despatch moneys due from or due to the charterers passengers of the Vessel; 

 

	(iv)	issuing of voyage instructions; 

  

	(v)	appointing agents; 

  

	(vi)	appointing stevedores; 

  

	(vii)	arranging surveys associated with the commercial operation of the Vessel. 

 

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 3.4 Insurance Arrangements 

(only applicable if agreed according to Box 8) 
 The
Managers shall arrange insurances in accordance with Clause 6, or such terms and conditions as the Owners shall have instructed or agreed, in particular regarding conditions, insured values, deductibles and franchises. 

3.5 Accounting Services 
 (only applicable if agreed
according to Box 9) 
 The Managers shall: 
  

	(i)	establish an accounting system which meets the requirements of the Owners and provide regular accounting services, supply regular reports and records, 

 

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

3.6 Sale or Purchase of the Vessel 
 (only applicable
if agreed according to Box 10) 
 The Managers shall, in accordance with the Owners’ instructions, supervise the sale or purchase of the Vessel,
including the performance of any sale or purchase agreement, but not negotiation of the same. 
 3.7 Provisions (only applicable if agreed
according to 
 Box 11) 

The Managers shall arrange for the supply of provisions. 
 3.8
Bunkering (only applicable if agreed according to 
 Box 12) 

The Managers shall arrange for the provision of bunker, of the quality specified by the Owners as required for the Vessel’s trade. 

4. Managers’ Obligations 
 4.1 The Managers
undertake to use their best endeavours to provide the agreed Management Services as agents for and on behalf of the Owners in accordance with sound ship management practice and to protect and promote the interests of the Owners in all matters
relating to the provision of services hereunder. 
 Provided, however, that the Managers in the performance of their management responsibilities under this
Agreement shall be entitled to have regard to their overall responsibility in relation to all vessels as may from time to time be entrusted to their management and in particular, but without prejudice to the generality of the foregoing, the Managers
shall be entitled to allocate available supplies, manpower and services in such manner as in the prevailing circumstances the Managers in their absolute discretion consider to be fair and reasonable. 

4.2 Where the Managers are providing Technical Management in accordance with sub-clause 3.2, they shall procure that the requirements of the law of the
flag of the Vessel am satisfied and they shall in particular be deemed to be the “Company” as defined by the ISM Code, assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities imposed by
the ISM Code when applicable. 
 5. Owners’ Obligations 

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

5.2 Where the Managers are providing Technical Management in accordance with sub-clause 3.2, the Owners shall: 

 

	(i)	procure that all officers and ratings supplied by them or on their behalf comply with the requirements of STCW 95; 

  

	(ii)	instruct such officers and ratings to obey all reasonable orders of the Managers in connection with the operation of the Managers’ safety management system. 

5.3 Where the Managers are not providing Technical Management in accordance with sub-clause 3.2, the Owners shall procure that the requirements of the
law of the flag of the Vessel are satisfied and that they, or such other entity as may be appointed by them and identified to the Managers, shall be deemed to be the “Company” as defined by the ISM Code assuming the responsibility for the
operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code when applicable.

 6. Insurance Policies 

The Owners shall procure, whether by instructing the Managers under sub-clause 3.4 or otherwise, that throughout the period of this Agreement: 

6.1 at the Owners’ expense, the Vessel is insured for not less than her sound market value or entered for her full gross tonnage, as the case may
be for: 
  

	(i)	usual hull and machinery marine risks (including crew negligence) and excess liabilities; 

  

	(ii)	protection and indemnity risks (including pollution risks and Crew Insurances); and 

  

	(iii)	war risks (Including protection and indemnity and crew risks) in accordance with the best practice of prudent owners of vessels of a similar type to the Vessel, with first class insurance companies, underwriters or
associations (“the Owners’ Insurances”); 

 6.2 all premiums and calls on the Owners’ Insurances are paid promptly
by their due date, 
 6.3 the Owners’ Insurances name the Managers and, subject to underwriters’ agreement, any third party designated by
the Managers as a joint assured, with full cover, with the Owners obtaining cover in respect of each of the insurances specified in sub-clause 6.1: 
  

	(i)	on terms whereby the Managers and any such third party are liable in respect of premiums or calls arising in connection with the Owners’ Insurances; or 

 

	(ii)	if reasonably obtainable, on terms such that neither the Managers nor any such third party shall be under any liability in respect of premiums or calls arising in connection with the Owners’ Insurances; or

  

	(iii)	on such other terms as may be agreed in writing. 

 Indicate alternative (i), (ii) or (iii) in Box
14. If Box 14 is left blank then (i) applies 
 6.4 written evidence is provided, to the reasonable satisfaction of the Managers, of their
compliance with their obligations under Clause 6 within a reasonable time of the commencement of the Agreement, and of each renewal date and, if specifically requested, of each payment date of the Owners’ Insurances. 

7. Income Collected and Expenses Paid on Behalf of Owners 

7.1 All moneys collected by the Managers under the terms of this Agreement (other than moneys payable by the Owners to the Managers) and any interest
thereon shall be held to the credit of the Owners in a separate bank account. 
 7.2 All expenses incurred by the Managers under the terms of this
Agreement on behalf of the Owners (including expenses as provided in Clause 8) may be debited against the Owners in the account referred to under sub-clause 7.1 but shall in any event remain payable by the Owners to the Managers on demand. 

8. Management Fee 
 8.1 The Owners shall pay to the
Managers for their services as Managers under this Agreement an annual management fee as stated In Box 15 which shall be payable, by equal monthly instalments in advance, the first Instalment being payable on the commencement of this Agreement (see
Clause 2 and Box 4) and subsequent instalments being payable every month. 
 8.2 The management fee shall be subject to an annual review on the
anniversary date of the Agreement and the proposed fee shall be presented In the annual budget referred to in sub-clause 9.1. 
 8.3 The Managers
shall, at no extra cost to the Owners, provide their own office accommodation, office staff, facilities and stationery. Without limiting the generality of Clause 7 the Owners

 

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“Shipman 98” Standard Ship Management Agreement 

 

 
shall reimburse the Managers for postage and communication expenses, travelling expenses, and other out of pocket expenses properly incurred by the Managers in pursuance of the Management
Services. 
 8.4 In the event of the appointment of the Managers being terminated by the Owners or the Managers in accordance with the provisions of
Clauses 17 and 18 other than by reason of default by the Managers, or if the Vessel is lost, sold or otherwise disposed of, the “management fee” payable to the Managers according to the provisions of sub-clause 8.1, shall continue to be
payable for a further period of three calendar months as from the termination date. In addition, provided that the Managers provide Crew for the Vessel in accordance with sub-clause 3.1: 

 

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

  

	(ii)	the Owners shall pay an equitable proportion of any Severance Costs which may materialize, not exceeding the amount stated in Box 16. 

8.5 If the Owners decide to lay-up the Vessel whilst this Agreement remains in force and such lay-up lasts for more than three months, an appropriate
reduction of the management fee for the period exceeding three months until one month before the Vessel is again put into service shall be mutually agreed between the parties. 

8.6 Unless otherwise agreed in writing all discounts and commissions obtained by the Managers in the course of the management of the Vessel shall be
credited to the Owners. 
 9. Budgets and Management of Funds 

9.1 The Managers shall present to the Owners annually a budget for the following twelve months in such form as the Owners require. The budget for the
first year hereof is set out in Annex “C” hereto. Subsequent annual budgets shall be prepared by the Managers and submitted to the Owners by 15 November each year not less than three months before the anniversary date of the
commencement of this Agreement (see Clause 2 and Box 4). 
 9.2 The Owners shall indicate to the Managers their acceptance and approval of the annual
budget within one month of presentation and in the absence of any such indication the Managers shall be entitled to assume that the Owners have accepted the proposed budget. 

9.3 Following the agreement of the budget, the Managers shall prepare and present to the Owners their estimate of the working capital requirement of
the Vessel and the Managers shall each month update this estimate. Based thereon, the Managers shall each month request the Owners in writing for the funds required to run the 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. Such funds shall be received by the Managers within ten running days after the receipt by the Owners of the Managers’
written request and shall be held to the credit of the Owners in a separate bank account. 
 9.4 The Managers shall produce a comparison between
budgeted and actual income and expenditure of the Vessel, in such form as required by the Owners, monthly or at such other intervals as mutually agreed. 

9.5 Notwithstanding anything contained herein to the contrary, the Managers shall in no circumstances be required to use or commit their own funds to
finance the provision of the Management Services. 
 10. Managers’ Right to Sub-Contract 

The Managers shall not have the right to sub-contract any of their obligations hereunder, including those mentioned in sub-clause 3.1, without the prior
written consent of the Owners, which shall not be unreasonably withheld. In the event of such a sub-contract, the Managers shall remain fully liable for the due performance of their obligations under this Agreement.

 11. Responsibilities 

11.1 Force Majeure – Neither the Owners nor the Managers shall be under any liability for any failure to perform any of their
obligations hereunder by reason of any cause whatsoever of any nature or kind beyond their reasonable control. 
 11.2 Liability to
Owners – (i) Without prejudice to sub-clause 11.1, the Managers shall be under no liability whatsoever to the Owners for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect, (including but not
limited to loss of profit arising out of or in connection with detention of or delay to the Vessel) and howsoever arising in the course of performance of the Management Services UNLESS same is proved to have resulted solely from the
negligence, gross negligence or wilful default of the Managers or their employees, or agents or sub-contractors employed by them in connection with the Vessel, in which case (save where loss, damage, delay or expense has resulted from the
Managers’ personal act or omission committed with the intent to cause same or recklessly and with knowledge that such loss, damage, delay or expense would probably result) the Managers’ liability for each incident or series of incidents
giving rise to a claim or claims shall never exceed; a total of ten times the annual management fee payable hereunder. 
  

	(ii)	Notwithstanding anything that may appear to the contrary in this Agreement, the Managers shall not be liable for any of the actions of the Crew, even if such actions are negligent, grossly negligent or wilful, except
only to the extent that they are shown to have resulted from a failure by the Managers to discharge their obligations under sub-clause 3.1, in which case their liability shall be limited in accordance with the terms of this Clause 11.

 11.3 Indemnity – Except to the extent and solely for the amount therein set out that the Managers would be liable
under sub-clause 11.2, the Owners hereby undertake to keep the Managers and their employees, agents and sub-contractors indemnified and to hold them harmless against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever
arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of the Agreement, and against and in respect of all costs, losses, damages and expenses (including legal costs and
expenses on a full indemnity basis) which the Managers may suffer or incur (either directly or indirectly) in the course of the performance of this Agreement. 

11.4 “Himalaya” – It is hereby expressly agreed that no employee or agent of the Managers (including every sub-contractor from
time to time employed by the Managers) shall in any circumstances whatsoever be under any liability whatsoever to the Owners for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or
default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Clause 11, every exemption, limitation, condition and liberty herein contained and
every right, exemption from liability, defence and immunity of whatsoever nature applicable to the Managers or to which the Managers are entitled hereunder shall also be available and shall extend to protect every such employee or agent of the
Managers acting as aforesaid and for the purpose of all the foregoing provisions of this Clause 11 the Managers are or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be their
servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.

 

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 12. Documentation 

Where the Managers are providing Technical Management in accordance with sub-clause 3.2 and/or Crew Management in accordance with sub-clause 3.1, they shall
make available, upon Owners’ request, all documentation and records related to the Safety Management System (SMS) and/or the Crew which the Owners need in order to demonstrate compliance with the ISM Code and STCW 95 or to defend a claim
against a third party. 
 13. General Administration 

13.1 The Managers shall handle and settle all claims arising out of the Management Services hereunder and keep the Owners informed regarding any
incident of which the Managers become aware which gives or may give rise to claims or disputes involving third parties. 
 13.2 The Managers shall,
as instructed by the Owners, bring or defend actions, suits or proceedings in connection with matters entrusted to the Managers according to this Agreement. 

13.3 The Managers shall also have power to obtain legal or technical or other outside expert advice in relation to the handling and settlement of
claims and disputes or all other matters affecting the interests of the Owners in respect of the Vessel. 
 13.4 The Owners shall arrange for the
provision of any necessary guarantee bond or other security. 
 13.5 Any costs reasonably incurred by the Managers in carrying out their obligations
according to Clause 13 shall be reimbursed by the Owners. 
 14. Auditing 

The Managers shall at all times maintain and keep true and correct accounts and shall make the same available for inspection and auditing by the Owners at such
limes as may be mutually agreed. On the termination, for whatever reasons, of this Agreement, the Managers shall release to the Owners, if so requested, the originals where possible, or otherwise certified copies, of all such accounts and all
documents specifically relating to the Vessel and her operation. 
 15. Inspection of Vessel 

The Owners shall have the right at any time after giving reasonable notice to the Managers to inspect the Vessel for any reason they consider necessary. 

16. Compliance with Laws and Regulations 
 The Managers
will not do or permit to be done anything which might cause any breach or infringement of the laws and regulations of the Vessel’s flag, or of the places where she trades. 

17. Duration of the Agreement 
 This Agreement shall come
into effect on the day and year stated in Box 4 and shall continue until the date stated in Box 17. Thereafter it shall continue until terminated by either party giving to the other notice in writing, in which event the Agreement shall terminate
upon the expiration of a period of three months from the date upon which such notice was given. 
 18. Termination 

18.1 Owners’ Default 
  

	(i)	The Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing if any moneys payable by the Owners under this Agreement and/or the owners of any associated vessel, details of which
are listed in Annex “D”, shall not have been received in the Managers’ nominated account within ten running days of receipt by the Owners of the Manager’s written request or if the Vessel is repossessed by the Mortgagees.

	(ii)	If the Owners: 

  

	 	(a)	fail to meet their obligations under sub-clauses 5.2 and 5.3 of this Agreement for any reason within their control, or 

  

	 	(b)	proceed with the employment of or continue to employ the Vessel in the carriage of contraband, blockade running, or an unlawful trade, or on a voyage which in the reasonable opinion of the Managers is unduly hazardous
or improper, 

 the Managers may give notice of the default to the Owners, requiring them to remedy it as soon as practically possible. In the
event that the Owners fail to remedy it within a reasonable time to the satisfaction of the Managers, the Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing. 

18.2 Manager’s Default 
 If the
Managers fail to meet their obligations under Clauses 3 and 4 of this Agreement for any reason within the control of the Managers, the Owners may give notice to the Managers of the default, requiring them to remedy it as soon as practically
possible. In the event that the Managers fail to remedy it within a reasonable time to the satisfaction of the Owners, the Owners shall be entitled to terminate the Agreement with immediate effect by notice in writing. 

18.3 Extraordinary Termination 
 This
Agreement shall be deemed to be terminated in the case of the sale of the Vessel or if the Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisitioned. 

18.4 For the purpose of sub-clause 18.3 hereof 
  

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

 

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

18.5 This Agreement shall terminate forthwith in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or
bankruptcy of either party (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver is appointed, or if it suspends payment, ceases to carry on business or makes any special arrangement or composition with its creditors.

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

 19. Law and Arbitration 
 19.1 This Agreement
shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory
modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause. 
 The arbitration shall be conducted in
accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced. 
 The
reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its
own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within
the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the

 

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14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as
sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement. 

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

In cases where neither the claim nor any counterclaim exceeds the sum of €50,000 (or such other sum as the parties may agree) the arbitration shall be
conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced. 
 19.2 This
Agreement shall be governed by and construed in accordance with Title 9 of the United States Code and the Maritime Law of the United States and any dispute arising out of or in connection with this Agreement shall be referred to three persons at New
York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for the purposes of enforcing any award, judgement may be entered on an award by any court of
competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc. 
 In cases where
neither the claim nor any counterclaim exceeds the sum of USD 50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators, Inc.
current at the time when the arbitration proceedings are commenced. 
 19.3 This Agreement shall be governed by and construed in accordance with the
laws of the place mutually agreed by the parties and any dispute arising out of or in connection with this Agreement shall be referred to arbitration at a mutually agreed place, subject to the procedures applicable there. 

19.4 If Box 18 in Part I is not appropriately filled in, sub-clause 19.1 of this Clause shall apply. 

Note: 19.1, 19.2 and 19.3 are alternatives; indicate alternative agreed in Box 18. 

20. Notices 
 20.1 Any notice to be given by either
party to the other party shall be in writing and may be sent by fax, telex, registered or recorded mail or by personal service. 
 20.2 The address
of the·Parties for service of such communication shall be as stated in Boxes 19 and 20, respectively.

 

 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:	 		  	27.06.2011
			
	Name of Vessel(s):	 		  	NB 2532 Hyundai Heavy Industries Co., Ltd
			
	Particulars of Vessel(s):	 		  	Shuttle Tanker

 Date of Agreement 27th June 2011 – Re: NB 2532 Hyundai Heavy Industries Co., Ltd 

Clauses 
 Clause 17 

This Agreement shall come into effect on the day stated in Box 4 and shall continue until terminated by either party giving to the other notice in writing, in
which event the Agreement shall terminate upon the expiration of a period of six months from the date upon which such notice was given. 
 The Owner may
only terminate this Agreement if so decided in the Company meeting in accordance with the Company Agreement. Documentation for such decision shall be presented to Manager along with the termination letter. 

Clause 19 
 The Ship Management Agreement shall be
governed by Norwegian Law and the parties accept Haugesund City Court as proper legal venue for for the settlement of any controversy or dispute that may araise in connection with, or as a result of this contract that cannot be resolved by mutual
agreement between the parties hereto. 

 ADDENDUM NO. 1 

TO 
 SHIP MANAGEMENT
AGREEMEN 
 TNB 2532 

“TORILL KNUTSEN” 

This Addendum No. 1 (this “Addendum”) to the Ship Management Agreement (the “Agreement”),
dated June 27, 2011, between Knutsen Shuttle Tankers 15 AS, a Norwegian private limited liability company (the “Owners”), and Knutsen OAS Shipping AS, a Norwegian private limited liability company (the “Prior
Managers”), is made as of June 30, 2014, between the Owners, the Prior Managers and KNOT Management AS, a Norwegian private limited liability company (the “Managers”). 

RECITALS 

WHEREAS, the Owners, the Prior Managers and the Managers desire that as of July 1, 2012 (the “Substitution
Effective Date”), the Managers shall be substituted for the Prior Managers under the Agreement, whereupon the Prior Managers shall be relieved of their rights, obligations and liabilities thereunder, and the Managers shall assume the
same; and 
 WHEREAS, the Owners and the Managers wish to amend certain provisions of the Agreement and agree
that such amendments shall take effect as of either the Substitution Effective Date or the date (the “Transfer Effective Date”) on which the shares in the Owner have been transferred to KNOT Shuttle Tankers AS, a Norwegian
limited liability company, as indicated. 
 AGREEMENT 

NOW, THEREFORE, for and in consideration of good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the
parties’ execution and delivery hereof, the parties agree as follows: 
 Section 1. Substitution for Prior Owners.
With effect as of the Substitution Effective Date, each party to this Addendum agrees that: (a) the Managers shall be substituted for the Prior Managers as the “Managers” in the Agreement, and the Agreement shall be construed and
treated in all respects as if the Managers were named therein instead of the Prior Managers; (b) the Managers shall assume all rights, obligations and liabilities of the Prior Managers under the Agreement and (c) the Owners shall be
released from all rights, obligations and liabilities owed to the Prior Managers under the Agreement, and the Owners shall release the Prior Managers from all rights, obligations and liabilities under the Agreement. 

Section 2. Amendments to the Agreement as of the Substitution Effective Date. With effect as of the Substitution Effective
Date, the Agreement shall be modified as follows: 
 2.1 Box 3, Name of the Agreement is hereby amended and restated in its
entirety to read as follows: 
 “KNOT Management AS” 

	 	2.2	Box 3, Place of registered office is hereby amended and restated in its entirety to read as follows: 

“Smedasundet 40, 5529 Haugesund” 
  

	 	2.3	Box 3, Law of registry is hereby amended and restated in its entirety to read as follows: 

“Norway” 

Section 3. Amendments to the Agreement as of the Transfer Effective Date. With effect as of the Transfer Effective Date, the
Agreement shall be modified as follows: 
  

	 	3.1	Box 1, Name of Vessel is hereby amended and restated in its entirety to read as follows: 

“Torill Knutsen” 

3.2 Box 13 of the Agreement is hereby amended and restated in its entirety to read as follows: 

“Until the Agreement is terminated” 
  

	 	3.3	Box 14 of the Agreement is hereby amended and restated in its entirety to read as follows: 

“(ii)” 
  

	 	3.4	Box 17 of the Agreement is hereby amended and restated in its entirety to read as follows: 

“One year after commencement” 
  

	 	3.5	Box 18 of the Agreement is hereby amended and restated in its entirety to read as follows: 

“19.3 Norwegian law, Haugesund as place of arbitration” 
  

	 	3.6	The paragraph located above the signature block on page 1 of the Agreement is hereby amended and restated in its entirety to read as follows: 

“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) and “C” (Budget) 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” and “C” shall prevail over those of PART II to the extent of such conflict but no further.” 

  
 2 

	 	3.7	Sub-clause 3.2 of the Agreement is hereby amended and restated in its entirety to read as follows: 

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

 

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

  

	 	(ii)	arrangement and supervision of dry dockings, repairs, alterations and the upkeep of the Vessel to the standards required by the Owners, provided that the Managers shall be entitled to incur the necessary expenditure to
ensure that the Vessel will comply with the law of the flag of the Vessel and of the places where she trades and all requirements and recommendations of the classification society; 

 

	 	(iii)	arrangement of the supply of necessary stores, spares and lubricating oil; 

  

	 	(iv)	appointment of surveyors and technical consultants as the Managers may consider from time to time to be necessary; 

  

	 	(v)	development, implementation and maintenance of a Safety Management System (SMS) in accordance with the ISM Code (see sub-clauses 4.2 and 5.3); 

 

	 	(vi)	arrangement of the lay-up of the Vessel; and 

  

	 	(vii)	arrangement of the loading and discharging and all related matters, subject to the provisions of the time charter. 

  

	 	3.8	Sub-clause 9.3 of the Agreement is hereby amended and restated in its entirety to read as follows: 

“Following the agreement of the budget, the Managers shall prepare and present to the Owners their estimate of the working capital
requirement of the Vessel and the Managers shall each quarter update this estimate. Based thereon, the Managers shall each quarter request the Owners in writing for the funds required to run the Vessel for the ensuing quarter, including 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 Managers within 60 running days after the receipt by the Owners of the
Managers’ written request and shall be held to the credit of the Owners in a separate bank account.” 
  

	 	3.9	Sub-clause 11.2(i) of the Agreement is hereby amended and restated in its entirety to read as follows: 

“Without prejudice to sub-clause 11.1, the Managers shall be under no liability whatsoever to the Owners for any loss, damage, delay or
expense of whatsoever nature, whether direct or indirect, including, but not limited to, loss of profit arising out of or in connection with detention of or delay to the Vessel and howsoever arising in the course of performance of the Management
Services (such loss, damage, delay or expense, a “Loss”); provided, however, that if such Loss is proved to be caused by or due to the fraud, gross negligence or willful misconduct of the Managers, the Managers shall be liable for any
claim or claims in connection with such Loss in an amount not to exceed ten times the annual management fee payable hereunder.” 

  
 3 

	 	3.10	Sub-clause 18.1(i) of the Agreement is hereby amended and restated in its entirety to read as follows: 

“The Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing if any moneys payable by the Owners
under this Agreement shall not have been received in the Managers’ nominated account within 60 running days of receipt by the Owners of the Managers’ written request or if the Vessel is repossessed by the Mortgagees.” 

 

	 	3.11	Annex “A” of the Agreement is hereby amended and restated in its entirety in the form attached hereto as Exhibit A. 

 

	 	3.12	The Agreement is hereby amended by adding Annex “B,” in the form attached hereto as Exhibit B, and Annex “C,” in the form attached hereto as Exhibit C, at the end thereof.

 Section 4. No Other Changes. Except as specifically set forth in this Addendum, the terms and provisions
of the Agreement shall remain unmodified, and the Agreement is hereby confirmed by the parties in full force and effect as amended herein. The Agreement (as amended by this Addendum) constitutes the entire understanding of the parties with respect
to the subject matter thereof, and no other covenants have been made by either party to the other. 
 Section 5.
Counterparts. This Addendum may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and
delivered to the other party, it being understood that all parties need not sign the same counterpart. 
 Section 6.
Severability. If any provision of this Addendum is held to be unenforceable under applicable law, such provision shall be excluded from this Addendum and the balance of this Addendum shall be interpreted as if such provision was so
excluded and shall be enforceable in accordance with its terms. 
 [Signature Page Follows.] 

  
 4 

 IN WITNESS WHEREOF, the parties have executed this Addendum as of the date first above written. 

 

			
	OWNERS
	
	KNUTSEN SHUTTLE TANKERS 15 AS
		
	By:	 	 /s/ TRYGVE SEGLEM

	Name:	 	Trygve Seglem
	Title:	 	Chairman
	
	PRIOR MANAGERS
	
	KNUTSEN OAS SHIPPING AS
		
	By:	 	 /s/ TRYGVE SEGLEM

	Name:	 	Trygve Seglem
	Title:	 	Chairman
	
	MANAGERS
	
	KNOT MANAGEMENT AS
		
	By:	 	 /s/ TRYGVE SEGLEM

	Name:	 	Trygve Seglem
	Title:	 	Chairman

 Signature Page to 

Addendum No. 1 to Ship Management Agreement 

 EXHIBIT A 

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

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO) 

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

 
 Torill Knutsen 

 

			
	 Main Particulars
	 	
		
	Owner	 	Knutsen Shuttle Tankers 15 AS
		
	Operator	 	KNOT Management AS
		
	Classification / Notation	 	DNV +1A1, ICE-1C, WINTERIZED COLD (-15â„ƒ, -35â„ƒ), CSR, Tanker for Oil ESP, BOW LOADING, SPM, COMF-V(3)C(3), HELDK-SH (CAA-N), OPP-F, E0, ESV-DP(HIL), F-AMC, CCO, DYNPOS-AUTR (A), NAUT-AW, VCS-2,
CLEAN DESIGN, COAT-PSPC(B), CSA-FLS2, PLUS, BIS, TMON
		
	Flag / Register	 	UK
		
	Home Port	 	ABERDEEN
		
	IMO Number	 	9630030
		
	Service Speed	 	13,5 (Charter Party Speed)
		
	Main Dimensions	 	
		
	Length overall	 	275,70 m
		
	Length between Perpendiculars	 	256,00 m
		
	Breath (Moulded)	 	46,033 m
		
	Depth (Moulded)	 	22,70
		
	Keel to masthead	 	58,145 m
		
	Ballast parallel body length Total/ Bow-mid manifold/stern-mid manifold	 	81,81 / 40,16 / 41,65

															
		
	Summer deadweight (SDWT) parallel body length Total/ Bow-mid manifold/stern-mid manifold	  	100,18 / 41,65 / 58,53	  
		
	Manifold arrangement	  	Arrangement:
 4x 400 mm (16 “) ANSI (port side & starboard side)
	  
   

					
	Draft/Displacement/Deadweight	  	Loadline	  	 	Draft	  	 	 	Displacement	  	  	 	Deadweight	  
		  	Summer:	  	 	15,23 metres	  	 	 	148,773 MT	  	  	 	119,997 MT	  
		  	Winter:	  	 	15,199 metres	  	 	 	148,437 MT	  	  	 	119,337 MT	  
		  	Tropical:	  	 	15,845 metres	  	 	 	155,453 MT	  	  	 	160,532 MT	  
		  	Lightship:	  	 	3,419 Metres	  	 	 	28,776 MT	  	  			
		  	Normal Ballast	  	 	7,910 Metres	  	 	 	71,819 MT	  	  	 	42,719 MT	  
		
	Gross tonnage	  	80,850	  
		
	Net tonnage	  	36,065	  
		
	Machinery	  		
		
	Main engine	  	 Hyundai-Man B&W MAN 
 2x MAN 6S70ME-C, Effect: 2 x
13545 Bhp / 2 x 9960 KW
	    
   

		
	Propeller	  	KAWASAKI HEAVY INDUSTRIES controllable pitch propeller	     
		
	Boilers (Maker / Type / Pressure / Capacity))	  	2x Aalborg Mission OL
 18 bars /35000kg/hr
	  
   

		
	Alternators	  	4-stroke, trunk piston in line type
 2x 3960 KW Hyundai Himsen 9H32/40

2x 4480 KW Hyundai Himsen 8H32/40
	  
   

  

		
	Steering gear (Maker / Type)	  	Rolls Royce /Electro hydraulic rotary vane type with electric pump control	     
		
	Bow Thrusters	  	Brunvoll 2 x 2200 KW + AZIMUT 2 x AR100 LTC +	  
		
	Stern Thrusters	  	Brunvoll 2 x 2200 KW + AZIMUT 2xAR100 LNC (KT2600-AU100TC)	     
		
	Cargo Equipment	  		
			
	Cargo tanks	  	No of tanks: 12 + 2 slops	  	 			
		  	No of grades: 2	  	 			
		  	98% capacity, cargo tanks:	  	 	 	137 515,6 m3                        	  
		  	98% slop tanks capacity:	  	 	 	2 454,0 m3                        	  
		  	Total 98% capacity:	  	 	 	139 969,6 m3                        	  
		
	Cargo pumps (Type/Maker/Capacity/head)	  	4x centrifugal / 3 000 m3/h	  
		
	Spray/stripping pumps (Maker/Capacity/head)	  	CSP 300/600m3/h	  

  
 7 

			
		
	Ballast pumps (Type/Maker/Capacity)	 	Centrifugal/4 000m3/h 25 m
		
	High duty Compressor (Type/Maker/Capacity)	 	N/A
		
	Low duty Compressor (Type/Maker/Capacity	 	N/A
		
	Mooring equipment	 	
		
	Mooring Winches (Type/Maker/heaving power/break capacity	 	8 x Hydraulic double drum / Pusnes / 25 t / 80 t
		
	Mooring ropes on drums /No/diameter/material/length/Breaking strength	 	 Wire (rope tails)
  

16 /38 mm/ wire+(rope tail) / 275 m+(11m)/100 t

  
 8 

 EXHIBIT B 

ANNEX “B” (MANNING) TO 
 THE BALTIC AND
INTERNATIONAL MARITIME COUNCIL (BIMCO) 
 STANDARD SHIP MANAGEMENT AGREEMENT-CODE NAME: “SHIPMAN 98” 

 
  

TORILL KNUTSEN 

 

									
	 	  	 Budget 2014

On board vs on leave

	 	  	No	  	Nat	  	No	  	Nat.
	Master/Kaptein	  	1	  	Nor	  	1	  	Nor
	Ch.off/Ovstm	  	1	  	Nor	  	1	  	Nor
	Ch.off.jr/Ovstm. jr	  	1	  	Nor	  	1	  	Nor
	2.off/1.stm	  	1	  	Nor	  	1	  	Nor
	2.off.jr/1.stm.jr	  		  		  		  	
	3.off/2.stm	  	1	  	Nor	  	1	  	Nor
	3.off.jr/2.stm.jr	  		  		  		  	
					
	Ch.eng/Mask.sj	  	1	  	Nor	  	1	  	Nor
	Cargo Eng./Cargomask.	  		  		  		  	
	2.eng/1.mask.	  	1	  	Fil	  	1	  	Fil
	2.eng.jr/1.mask.jr	  		  		  		  	
	3.eng/2.mask	  	1	  	Fil	  	1	  	Fil
	4.eng/3.mask	  	1	  	Fil	  	1	  	Fil
					
	Electr/Elektriker	  	1	  	Fil	  	1	  	Fil
	Electr ass/Elektr.ass.	  	1	  	Fil	  	1	  	Fil
	Bosun/Arb.leder	  	1	  	Fil	  	1	  	Fil
	Pumpman/Pumpemann	  	1	  	Fil	  	1	  	Fil
	AB/Matros	  	3	  	Fil	  	3	  	Fil
	OS/Lettmatros	  	1	  	Fil	  	1	  	Fil
					
	Motorman/Motormann	  	2	  	Fil	  	2	  	Fil
	Fitter/Reparatør	  	1	  	Fil	  	1	  	Fil
	Oiler/Smører	  		  		  		  	
	Wiper/Smører	  	1	  	Fil	  	1	  	Fil
					
	Ch.stwrd/Forpl.sj	  	1	  	Fil	  	1	  	Fil
	Clerk (Ch.cook/Kokk)	  		  		  		  	
	Messman/Messegutt	  	1	  	Fil	  	1	  	Fil
	Stew/Forpl.ass	  		  		  		  	
	Boy/Messegutt	  	1	  	Fil	  	1	  	Fil
					
	Sup.Num./Painter Cleaner	  		  		  		  	
	Sup.Num.	  		  		  		  	
		  	  
	  		  	  
	  	
	On board	  	24	  		  	24	  	
		  	  
	  		  	  
	  	

 

 

  
 9 

 EXHIBIT C 

ANNEX “C” (BUDGET) TO 
 THE BALTIC AND
INTERNATIONAL MARITIME COUNCIL (BIMCO) 
 STANDARD SHIP MANAGEMENT AGREEMENT-CODE NAME: “SHIPMAN 98” 

 
  

Manager’s Budget for 2014: 
 TORILL KNUTSEN 

 

									
	DESCRIPTION	  	USD PER DAY	 	  	USD PER YEAR	 
	 1. Technical Expences
	  	 	3 318,90	  	  	 	1 211 400	  
	 2. Victually
	  	 	369,86	  	  	 	135 000	  
	 3. Lubrication oils
	  	 	493,15	  	  	 	180 000	  
	 4. Manning
	  	 	10 553,12	  	  	 	3 851 845	  
	 5. Insurance
	  	 	1 346,22	  	  	 	491 370	  
	 6. Management fee
	  	 	1 218,41	  	  	 	444 721	  
		  	  
	  
	 	  	  
	  
	 
	 Total
	  	 	17 299,66	  	  	 	6 314 336	  

  
 10

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