Document:

Exhibit 10.2 - Form of Executive Officer Severance Agreement

EXHIBIT 10.2

FORM OF EXECUTIVE OFFICER SEVERANCE AGREEMENT

March __, 2014

(Addressee)

Re:    Executive Officer Severance Agreement

Dear (Addressee):

Reference is made to the agreement between us, dated [date of Executive Officer's original Severance Agreement and any amendments thereto] (the “Prior Agreement”), setting forth the extent to which benefits will be provided to you in the event of termination, under certain circumstances, of your employment with AK Steel Corporation (the “Company”), AK Steel Holding Corporation (“Holding”) or any of their respective subsidiaries, affiliates, or successors (hereinafter collectively referred to as “AKS”).  Upon your execution of this letter agreement (the “Agreement”), the Prior Agreement shall be deemed superseded in its entirety and no longer in effect.  This Agreement sets forth your obligations and commitments in exchange for continued employment with AKS, the compensation and benefits you receive during such employment, and the promise and/or receipt of severance benefits if your employment terminates under certain circumstances.  It establishes time limits for asserting certain claims under this Agreement or arising out of your employment relationship with AKS.  It also requires that certain claims be resolved through arbitration rather than through litigation.  This Agreement is not, however, an employment agreement and nothing in this Agreement shall be construed as a contract or promise of continued employment with AKS.  As an “at-will” employee, your employment may be terminated by you or AKS at any time.    
A.      Effective Date; Term; Renewal.  This Agreement is effective as of March __, 2014 (the “Effective Date”).  Except for the Change of Control Agreement between you and AKS dated March __, 2014 (“Change of Control Agreement”), this Agreement supersedes any other severance agreement between you and AKS, and any severance plan, arrangement, policy or practice of AKS.  The term of this Agreement shall be the ________ year period beginning on the Effective Date and ending on the first anniversary of the Effective Date. [for the CEO and certain other Executive Officers who entered into their initial Severance Agreement more than five years ago - the term is one year; for all other Executive Officers, each of whom entered into their initial Severance Agreement less than five years ago - the term is equal to the balance of their original five year term]  This Agreement shall be automatically renewed annually thereafter for a renewal period of one year, unless written notice of non-renewal is given by you or by AKS at least ninety days prior to the expiration of the term, including any renewal periods.  Notwithstanding the expiration of this Agreement, the terms of Sections F, G and H (including Exhibit A) shall continue to be effective to the extent and as stated therein.

B.    Date of Termination; Notice Period; Severance Pay Period.  The date upon which the termination of your employment becomes effective is referred to in this Agreement as your "Date of Termination."  The period between the date a party provides notice of termination under this Agreement and the Date of Termination is referred to as the "Notice Period."  AKS may relieve you of your employment duties at any time during a Notice Period; provided however, during any Notice Period, you shall continue to receive your full salary and Employment Benefits (as defined in Section E(2)(c) below).  The period of time after your Date of Termination equal to the number of months of base salary paid to you under this Agreement as severance benefits is referred to as the “Severance Pay Period.”  

C.    Circumstances of Termination Covered by this Agreement.  While the Change of Control Agreement applies to the termination of your employment with AKS under certain circumstances involving a Change of Control (as defined in such agreement), this Agreement applies to the termination of your employment with AKS under the following circumstances not involving a Change of Control:

1.    Involuntary Termination without Cause.  AKS may terminate your employment without Cause at any time upon written notice given to you by AKS not less than thirty days prior to the Date of Termination.  

2.     Involuntary Termination for Cause.  AKS may terminate your employment for Cause, but only upon written notice specifying the facts or circumstances constituting such Cause, which notice may be given on or at any time prior to the Date of Termination.  Any of the following circumstances shall constitute “Cause” for purposes of this Agreement: (a) you are convicted of, or enter a plea of guilty or nolo contendere, to a misdemeanor involving moral turpitude or to a felony, (b) you engage in fraud, misappropriation or embezzlement with respect to AKS, (c) your willful failure, gross negligence or gross misconduct in the performance of your assigned duties for AKS, or (d) your breach of a fiduciary duty to AKS.

3.    Voluntary Termination.  You may voluntarily terminate your employment upon written notice given to AKS by you not less than thirty days prior to the Date of Termination.  

D.    Circumstances of Termination Not Covered by this Agreement.   This Agreement does not provide severance benefits for, nor, as the case may be, affect the benefits you otherwise may receive outside of this Agreement in connection with the termination of your employment with AKS for reasons relating to: (1) your early or normal retirement from AKS under the terms of any tax-qualified “pension benefit plan” as defined in the Employee Retirement Income Security Act of 1974, as amended (“ERISA”); (2) your retirement from AKS under any mandatory retirement policy applicable to executive officers of AKS; (3) total and permanent disability under the AKS long-term disability plan or policy; or (4) your death.  Nothing in this Agreement shall affect your rights under any such “pension benefit plan”; any “welfare benefit plan” as defined in ERISA, including but not limited to any medical, surgical, hospitalization, or long-term disability benefits; or any non-qualified pension or deferred compensation plan or arrangement.

E.    Severance Benefits.

1.    Basic Severance Benefits.  If your employment with AKS is involuntarily terminated without Cause by AKS pursuant to Section C(1), AKS will pay you, regardless of whether or not you execute a Release of Claims (as defined in Section E(2) below), severance pay equal to your base salary for a period of six months from your Date of Termination.  The aggregate of such severance pay shall be paid to you in a single, undiscounted lump sum payment within ten days following your Date of Termination.  

2.    Supplemental Severance Benefits.  If your employment with AKS is involuntarily terminated without Cause pursuant to Section C(1), and you execute and provide to AKS within sixty days after your Date of Termination a complete, full and effective (i.e. no longer revocable) release of all claims against AKS that is in a form reasonable and customary (“Release of Claims”), then  you shall be entitled, in addition to the severance pay provided under Section E(1) above, to the following supplemental benefits:

a.    Additional Base Salary.  Severance pay based upon your base salary shall be paid for an additional ______ [for the CEO - eighteen; for all other Executive Officers - twelve] months beyond the period paid pursuant to Section E(1).  Such additional base salary payable as severance shall be paid to you in a single, undiscounted lump sum payment within ten days after the effective date of your Release of Claims; provided however, if such payment could be made in more than one taxable year depending on when you sign the Release of Claims, the ten-day limit for payment does not apply; under such circumstances payment still will be made within 70 days of your Date of Termination, but payment automatically will be made as soon as administratively feasible in the later taxable year regardless of when you sign the Release of Claims, but in no event after March 15th of such later taxable year.

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b.    Lump Sum and MIP Payments. You will receive a lump-sum payment which shall be separate from, but in [for the CEO - an amount equal to one and one-half times; for all other Executive Officers - an amount equal to] your assigned target under the AK Steel Corporation Annual Management Incentive Plan (“MIP”) for the calendar year during which your Date of Termination occurs.  Payment of this lump sum amount will be made within ten days after the effective date of your Release of Claims; provided however, if such payment could be paid in more than one taxable year depending on when you sign the Release of Claims, the ten-day limit for payment does not apply; under such circumstances payment still will be made within 70 days of your Date of Termination, but payment automatically will be made as soon as administratively feasible in the later taxable year regardless of when you sign the Release of Claims, but in no event after March 15th of such later taxable year.  You also will receive on a prorated basis the MIP incentive award, if any, to which you otherwise would be entitled for the calendar year during which your Date of Termination occurs.  The amount of such prorated MIP incentive award shall reflect the percentage of your actual period of participation in the MIP prior to termination during such calendar year.  Payment of any such prorated MIP incentive award will be made within ten days after the later of: (i) the date that any awards under the MIP with respect to such calendar year are paid to participants under the MIP, or (ii) the effective date of your Release of Claims; provided however, if the date under (ii) is the operative payment date and such payment could be paid in more than one taxable year depending on when you sign the Release of Claims, the ten-day limit for payment does not apply; under such circumstances payment still will be made within 70 days of your Date of Termination, but payment automatically will be made as soon as administratively feasible in the later taxable year regardless of when you sign the Release of Claims, but in no event after March 15th of such later taxable year.

c.    Employment Benefits.  During the Severance Pay Period, your Employment Benefits (as defined below) shall continue; provided, however, that you shall not:

i.    accumulate vacation pay for periods after the Date of Termination;

ii.    qualify during the Severance Pay Period for sickness and accident, salary continuation, and long-term disability plan benefits if you were not eligible for these benefits on the Date of Termination;

iii.    be eligible to continue to make contributions to any Internal Revenue Code § 401(k) plan maintained by AKS or qualify for a share of any employer contribution made to any tax-qualified defined contribution plan; or

iv.    be eligible to accumulate service for pension plan purposes; and 

provided, further, that if, during the Severance Pay Period, you are eligible to receive life insurance, medical, hospital and other health insurance benefits (“Life and Health Insurance”) either based upon employment with another employer or based upon benefits available to you as a retiree of another employer, the obligations of AKS to continue to provide you with Life and Health Insurance shall be limited solely to those benefits necessary to assure that, together with the corresponding benefits provided to you under any other plans, you receive total benefits comparable to those to which you were entitled at the Date of Termination.  You must report to the Vice President, Human Resources of the Company your eligibility for another employer’s active or retiree Life and Health Insurance within ten days after becoming eligible. 

“Employment Benefits” means the employee benefits plans, policies, and practices of AKS (excluding any severance policies and practices other than this Agreement) that generally apply to executive officers of AKS in accordance with the terms thereof as they may be amended from time to time.  It is expressly understood and agreed that the AK Steel Corporation Executive Minimum and Supplemental Retirement Plan is not an Employment Benefit as defined in this section.  Your Employment Benefits may be modified 

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from time to time after the date hereof without violation of this Agreement if the changes apply generally to other members of management of AKS.

d.    COBRA.  You shall qualify for full COBRA health benefit continuation coverage upon the expiration of the Severance Pay Period.

3.    Mitigation.  You shall not be required to mitigate the amount of any payment provided for in this Section E by seeking other employment or otherwise, nor shall the amount of any such payment or benefits be reduced by any compensation or benefits earned by you as the result of employment by another employer (except as expressly provided in Section E(2)(c)) or by retirement benefits, or be offset against any amount claimed to be owed by you to AKS.

4.    Deferrals.  For purposes of calculating any amount due under this Agreement, the effect of any deferral of income shall be disregarded and all sums due shall be calculated as if no such deferral had been made.

5.    No Duplication of Benefits.  You shall not be entitled to severance benefits both under this Agreement and under the Change of Control Agreement in connection with the termination of your employment with AKS.

6.    Involuntary Termination for Cause; Voluntary Termination.  In the event your employment with AKS ends as a result of involuntary termination for Cause pursuant to Section C(2) or voluntary termination pursuant to Section C(3), you shall not be entitled to any benefits under this Agreement, but you nevertheless shall be eligible for any benefits provided in accordance with the plans and practices which apply to employees generally.

		
	F.
	Executive Responsibilities.

1.    Confidentiality.  During your employment with AKS and subsequent to the termination of that employment for any reason, you will not disclose to any person or use for the benefit of yourself or any other person or entity any trade secret, proprietary or other confidential information of AKS (hereinafter referred to as “AKS Confidential Information”) without the prior written consent of the Vice President, Human Resources of the Company.  Upon termination of your employment with AKS  for any reason, you will immediately deliver to AKS any and all AKS Confidential Information which you have in your possession or control in tangible form.  For purposes of this Section F, it is expressly understood and agreed that the term AKS Confidential Information shall include, but not be limited to, all information not already in the public domain relating to AKS operating practices and procedures, customer lists, product marketing, sales, sales prices, costs, margins, discounts, rebates, profits, shipments, product mix, research, technical support, business plans and operating results.  You will deliver this AKS Confidential Information to AKS in whatever format in which you have it, including but not limited to paper, email or other electronic storage media.  You will also deliver to AKS any and all AKS property, including but not limited to, company credit cards, property access keys and cards, planners, day books, customer lists, laboratory notebooks, cellular phones, computers, software and other electronic devices.  You agree that you remain bound by the Employee Invention and Confidential Information Agreement which you executed.

2.    Restrictive Covenants.  In exchange for AKS’s agreement to provide you with the severance benefits opportunities set out in this Agreement (including, in particular, the opportunity to receive the severance pay set out at Section E(1) of this Agreement) and the compensation provided to you as an executive officer, you agree that, during your employment at AKS and for a period of one year following the termination of your employment with AKS for any reason, you will not, directly or indirectly, do any of the following:

a.    serve as an employee, employer, consultant, agent, principal, partner, owner, officer, or director of any business engaged directly or indirectly in competition with AKS, including but not limited to a business engaged in the research, development, manufacturing, marketing or sale of carbon, electrical or stainless steel, steel pipe or tubing products, or any other metal or non-metal products that are competitive with AKS products, or that has an intent or plan to engage in such business during the one-year period following the date when your employment with AKS terminates.  

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b.    solicit or communicate with, any customer or supplier of AKS with whom you had any contact during the 24 months prior to the termination of your employment with AKS, for the purpose of diverting AKS business or otherwise competing with AKS for your benefit or the benefit of another entity for which you serve as an employee, employer, consultant, agent, principal, partner, owner, officer or director; or

c.    utilize or disclose any trade secret, proprietary or other confidential information of AKS, except in furtherance of your duties for AKS; or

d.    solicit, cause or encourage any employee of AKS to resign his or her employment with AKS.

3.    Injunctive Relief.  You recognize and acknowledge that your involvement in decision making processes which involve AKS’s proprietary and confidential information and your access to confidential competitive information will be such that, in the event of a breach of the Confidentiality (Section F(1)) or Covenant Not to Compete (Section F(2)) provisions of this Agreement, monetary damages would be an insufficient remedy for AKS, and that AKS would be entitled to injunctive relief in the appropriate court to restrain the breach and otherwise enforce these provisions without proof of actual damages.   You further agree that these provisions will be governed by Ohio law both as to interpretation and performance.  Any action or other  legal proceeding under these provisions or any action or legal proceeding regarding the enforceability of these provisions will be brought exclusively in an appropriate court of competent jurisdiction located in Butler County, Ohio (if the action is brought in state court), or in the Southern District of Ohio (if such action is brought in federal court).

4.    Conflicts of Interest.  You agree for so long as you are employed by AKS to avoid dealings and situations which would create a conflict of interest with AKS.  In this regard, you agree to comply with all AKS policies regarding conflicts of interest.  You further agree to immediately report to the Vice President, Human Resources of the Company, any conflict or potential conflict of interest with AKS.  

5.    Cooperation.  For a period of one year following your Date of Termination, you agree to cooperate in good faith with AKS with respect to pending or potential claims or litigation involving AKS as to which you have personal knowledge.  Such cooperation shall include meeting with AKS and its representatives, upon reasonable request, for purposes of (a) providing information based upon your personal knowledge in connection with any investigation by AKS, and (b) preparing for and providing deposition and/or trial testimony.

G.      Time Limits for Bringing Claims; Arbitration of Claims.  This section establishes time limits for bringing claims for severance benefits under this Agreement (“Severance Claims”) and any claims or controversies arising out of or relating to your employment relationship with AKS or the termination of that relationship (“Employment Claims”), excluding claims for workers’ compensation and unemployment compensation benefits and excluding the right of AKS to seek injunctive or other equitable relief to enforce the terms of Section F.  The Agreement also provides that Severance Claims and Employment Claims must be resolved through the arbitration process set forth in this Agreement.

1.    Time Limit for Severance Claims and Employment Claims.  Severance Claims must be filed within one year from the Date of Termination.  Employment Claims must be filed within one year after the occurrence of the action or actions upon which the claim is based.  You agree to waive any statute of limitations to the contrary. 

2.    Arbitration of Severance Claims and Employment Claims.  Severance Claims and Employment Claims shall be submitted to individual, final and binding arbitration, subject to the Rules of Arbitration attached to this Agreement as Exhibit A.  Employment Claims subject to arbitration include, but are not limited to, allegations of unlawful discrimination based on race, sex, religion, age, national origin, disability, and retaliation and any other claim of a violation of a right created or protected by local, state, or federal law. 

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You and AKS agree that it is the intention of you and AKS to avoid litigation in court of Severance Claims and Employment Claims and you and AKS, therefore, specifically waive any right you or AKS would otherwise have to have Severance and Employment Claims decided by a judge or jury.  

You and AKS agree that this agreement to arbitrate and the arbitration award are enforceable under and subject to the Federal Arbitration Act, 9 U.S.C. § 1 et. seq.  You and AKS consent that judgment upon the arbitration award may be entered in an appropriate court of competent jurisdiction located in Butler County, Ohio or in the United States District Court for the Southern District of Ohio. 

H.     Miscellaneous.

1.    Notices.  Notices required or permitted under this Agreement shall be in writing and shall be deemed to have been given when personally delivered or mailed by United States certified mail, return receipt requested, postage prepaid, addressed to the intended recipient at its, his or her last known address.  Notices to AKS shall be marked for the attention of the Vice President, Human Resources of the Company.

2.    Modification; Waiver.  No provision of this Agreement may be waived, modified or discharged except pursuant to a written instrument signed by you and the Chairman of the Board or the Chief Executive Officer of AKS.  You and AKS do not waive, nor shall this Agreement be construed to waive, any right which is not subject to waiver as a matter of law.

3.    Successors.  AKS will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of AKS to expressly assume and agree to perform this Agreement in the same manner and to the same extent that AKS would be required to perform it if no such succession had taken place. 

4.    Inurement.  This Agreement shall inure to the benefit of and be enforceable by you and your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If you should die while any amount would still be payable to you hereunder had you continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee, or, if there is no such devisee, legatee or designee, to your estate.

5.    Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

6.    Severability; Validity.  The provisions of the Agreement (including Exhibit A) are severable and the validity or unenforceability of any provision shall not affect the validity or enforceability of any other provision, with the following exception.  If a court rules in an action to which you are a party that the provisions of Section G (2) regarding the agreement to waive the right to have Severance Claims or Employment Claims decided by judge or jury are unenforceable, any and all rights created by Section G (2) of the Agreement and Exhibit A to the Agreement will be voided retroactively, and the proceeds of any arbitration award involving you and AKS must be returned to the party from which they originated.

7.    Choice of Law; Forum Selection.  This Agreement shall be governed by the laws of the United States and the laws of the State of Ohio, both as to interpretation and performance.  Any action or other legal proceeding not subject to arbitration under this Agreement or any action or legal proceeding regarding the enforceability of this Agreement shall be brought exclusively in an appropriate court of competent jurisdiction located in Butler County, Ohio (if the action is brought in state court) or in the Southern District of Ohio (if such action is brought in federal court).  Any action brought within such courts shall not be transferred or removed by you to any other state or federal court.

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8.    Withholding and Deductions.  It is understood and agreed that the payment of severance benefits under this Agreement will be subject to withholding for taxes and other deductions.  It further is understood and agreed that, to the extent that this Agreement provides for payment of specified amounts of severance benefits, such amounts are before such tax withholdings and deductions. 

Sincerely,
		
	Accepted and agreed to this ____ day
	AK STEEL HOLDING CORPORATION

________________, 2014.                

By:___________________________
_________________________________          
(Name of Executive Officer)                          
                              
AK STEEL CORPORATION

By:___________________________
     

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EXECUTIVE OFFICER SEVERANCE AGREEMENT
Exhibit A
Rules for Arbitration

(1)  Location.  The arbitration hearing (“Hearing”) will take place in West Chester, Ohio, unless the parties mutually agree to another location.

(2)  Governing Rules.  The arbitration process will be governed by the Employment Arbitration Rules and Mediation Procedures (“National Rules”) of the American Arbitration Association (“AAA”) except to the extent they are modified by the Agreement and this Exhibit A to the Agreement.  You have the opportunity to review these rules online at any time at www.adr.org.

(3)  Notice.  Either you or AKS may initiate the arbitration process by filing a written demand for monetary or non-monetary relief and notice of intent to arbitrate (“Notice”) with any regional office of the AAA and paying the filing fee as set out in the National Rules.  The Notice must be filed within the time limits established in Section G(1) of the Agreement.  The date the Notice is considered “filed” for purposes of Section G(1) of the Agreement and this rule is the date the Notice is received in a AAA regional office.
 
(4)  Fees; Expenses.  You and AKS will share equally any AAA administrative fee other than the filing fee.  The Company will pay all of the arbitrator’s fees.  You and AKS will bear your own litigation costs and expenses (including attorneys fees), unless the arbitrator awards attorneys fees to a prevailing party in accordance with the law applicable to the matter in dispute. 

(5)  Arbitrators.  You and AKS will agree upon an arbitrator selected from a panel of arbitrators chosen by and maintained at the headquarters office of the AAA in New York.  Arbitrators on this panel will have the following three qualifications: (a) membership on the AAA’s National Employment Dispute roster; (b) membership on AAA’s labor-management roster;  and (c) at least fifteen years experience as an arbitrator.  After the filing of a written notice of intent to arbitrate, the AAA will send simultaneously to you and AKS an identical list of names of ten persons chosen from the panel.  You and AKS will have ten days from the transmittal date in which to strike any names objected to, number the remaining names in order of preference, and return the list to the AAA.  If no arbitrator is acceptable to both you and AKS or the person who has been approved on both lists and selected by the AAA cannot serve promptly, another list or lists will be sent out by the AAA in accordance with the above procedure until an arbitrator is agreed upon by you and AKS.

(6)  Pre-Hearing Matters.  Any pre-hearing disputes will be presented to the arbitrator for expeditious, final and binding resolution.

(7)  Remedies; Relief.  The remedy and relief which may be granted by the arbitrator is that which the arbitrator deems just and equitable considering what would have been available to the parties had the matter been heard in court. 

(8)  Discovery - Obtaining Information.  You and AKS recognize that a primary benefit each derives from entering into the Agreement is that we avoid the delay and costs normally associated with litigation.  Therefore, you and AKS agree that neither party will be entitled to conduct any discovery prior to the Hearing except that:

(a)  AKS will furnish you with copies of all non-privileged documents in your personnel file;

(b)  if you are pursuing a claim against AKS for discharge, you will furnish AKS with records of your earnings and benefits relating to your subsequent employment and all documents relating to your efforts to obtain subsequent employment;

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(c)  AKS and you will exchange no later than seven days prior to the Hearing copies of all documents which either party intends to introduce as evidence at the Hearing and a list of witnesses either party intends to present at the Hearing;

(d)  you will be allowed (at your expense) to take the deposition of your immediate supervisor and the individual who made the decision which resulted in your claim (if that individual is not your immediate supervisor) for a period not to exceed two hours each, and AKS will be allowed (at its expense) to depose you for a period not to exceed two hours; and

(e)  either you or AKS may ask the arbitrator to grant additional discovery to the extent permitted by the National Rules if it is demonstrated that such discovery is necessary for a fair arbitration and no less expensive alternative for exchanging the information exists.

Nothing herein will prevent either you or AKS from taking the deposition of any witness where:  (a) the sole purpose for taking the deposition is to use the deposition in lieu of the witness testifying at the hearing; and (b) the witness is, in good faith, unavailable to testify in person at the hearing due to poor health, residency and employment more than fifty miles from the hearing site, conflicting travel plans or other comparable reason.

(9)  Post-Hearing Briefs.  You and AKS will have the opportunity to submit to the arbitrator a post-hearing brief in support of your respective positions. 

(10)  Confidentiality.  All aspects of the procedure under the Agreement, including the hearing, the record of the proceedings, and the arbitrator’s decision are confidential and will not be open to the public, except (a) to the extent you and AKS agree otherwise in writing, (b) as may be appropriate in any subsequent proceedings between you and AKS, (c) either party may disclose the decision of the arbitrator to his or its attorneys, accountants, other professional advisors, and/or spouse as long as they agree to keep it confidential; or (d) as may otherwise be appropriate in response to a governmental agency or legal process, or to comply with applicable legal, accounting, financial or insurance rules, regulations or requirements.  

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Exhibit 4.8

 

 

ADMINISTRATIVE SERVICES AGREEMENT

 

THIS ADMINISTRATIVE SERVICES AGREEMENT (as the same may be amended or modified from time to time, the "Agreement"), dated as of March 1, 2013, is made by and between DIANA CONTAINERSHIPS INC., a Marshall Islands corporation (the "Company"), and UNITIZED OCEAN TRANSPORT LIMITED, a Marshall Islands corporation and a wholly-owned subsidiary of the Company (the "Manager").

 

WHEREAS, the Company is in the business of acquiring, owning and operating a fleet of containerships (each a "Vessel" and collectively the "Vessels"), indirectly through separate wholly-owned subsidiaries (each a "Vessel Owning Subsidiary" and collectively the "Vessel Owning Subsidiaries");

 

WHEREAS, each Vessel Owning Subsidiary has entered into, and any Vessel Owning Subsidiary acquired or formed in the future will enter into, separate commercial and technical management agreements with the Manager pursuant to which the Manager will provide each Vessel Owning Subsidiary with commercial and technical management services for each owned Vessel;

 

WHEREAS, the Company desires to enter into this Agreement with the Manager to engage the Manager to provide certain administrative services to the Company, and the Manager desires to provide such administrative services to the Company, on the terms and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and premises of the Parties hereto and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

1.           DEFINITIONS AND INTERPRETATION

 

1.1 Certain Definitions. In this Agreement, including the recitals hereto, unless the context requires otherwise, the following terms shall have the respective meanings set forth below:

 

"Administrative Management Services" has the meaning ascribed to such term in Section 3.

 

"Affiliates" means, with respect to any Person as at any particular date, any other Persons that directly or indirectly, through one or more intermediaries, are Controlled by, Control or are under common Control with the Person in question, and "Affiliate" means any one of them.

 

"Applicable Laws" means, in respect of any Person, property, transaction or event, all laws, statutes, ordinances, regulations, municipal by-laws, treaties, judgments and decrees applicable to that Person, property, transaction or event, all applicable official directives, rules, consents, approvals, authorizations, guidelines, orders, codes of practice and policies of any Governmental Authority having authority over that Person, property, transaction or event and having the force of law, and all general principles of common law and equity.

 

  

 

  

"Approved Budget" has the meaning ascribed to such term in Section 3.4(c).

 

"Board of Directors" means the board of directors of the Company, as the same may be constituted from time to time.

 

"Books and Records" means all books of accounts and records, including tax records, sales and purchase records, Vessel records, computer software, formulae, business reports, plans and projections and all other documents, files, correspondence and other information of the Company with respect to the Vessels or the Business (whether or not in written, printed, electronic or computer printout form).

 

"Business" means the Company's business of owning, operating and/or chartering or re-chartering containerships to other Persons and any other lawful act or activity customarily conducted in conjunction therewith.

 

"Business Day" means a day other than a Saturday, Sunday or statutory holiday on which the banks in New York, New York are required to close.

 

"Charter" means a charter party agreement between a Company (or a Vessel Owning Subsidiary of the Company) and any Person that relates to any of the Vessels (including any voyage or spot charters), and "Charters" means all such charter party agreements.

 

"Charterer" means any Person that has entered or enter into, or assumed or assume the obligations under, by novation or otherwise, a Charter with a Company (or a Vessel Owning Subsidiary of the Company).

 

"Chief Financial Officer" means the chief financial officer of the Company.

 

"Common Shares" has the meaning ascribed to such term in the recitals to this Agreement.

 

"Company Indemnified Persons" has the meaning ascribed to such term in Section 7.3.

 

"Confidential Information" means all nonpublic or proprietary information or data (including all oral and visual information or data recorded in writing or in any other medium or by any other method) relating to a Disclosing Party that is obtained from the Disclosing Party or any third party on the Disclosing Party's behalf, at any time before, simultaneously with, or after the execution of this Agreement; and, without prejudice to the general nature of the foregoing definition, the term Confidential Information shall include, but not by way of limitation, (i) information regarding the Disclosing Party's existing or proposed operations, business plans, market opportunities, and business affairs and (ii) any information ascertainable by inspection of Confidential Information disclosed to the Receiving Party or by the analysis of any materials supplied to the Receiving Party. Notwithstanding the foregoing, Confidential Information shall not include any information which (x) is public knowledge at the time of disclosure or which subsequently becomes public knowledge other than as a result of a breach of this Agreement; (y) the Receiving Party can show was made available to it by some other Person who had a right to do so and who was not subject to any obligation of confidentiality or restricted use regarding such information; or (z) was developed by the Receiving Party independently without use of any confidential information provided hereunder or by a third party in breach of its confidentiality obligations.

 

 

 

  

2

  

 

 

"Control" or "Controlled" means, with respect to any Person, the right to elect or appoint, directly or indirectly, a majority of the directors of such Person or a majority of the Persons who have the right, including any contractual right, to manage and direct the business, affairs and operations of such Person, or the possession of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of Voting Securities, by contract, or otherwise.

 

"Containership" means a cargo ship designed and built to transport containerized cargoes.

 

"Costs and Expenses" has the meaning ascribed to such term in Section 6.1.

 

"Credit Facility" means any credit facility agreement to which any Company or any Subsidiary of the Company may be a party from time to time.

 

"Disclosing Party" means a Party who has disclosed Confidential Information hereunder to the other Party or on whose behalf Confidential Information has been disclosed to the other Party.

 

"Dividend" means any cash dividend paid by the Company on all outstanding Common Stock.

 

"Draft Budget" has the meaning ascribed to such term in Section 3.4(a).

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

 

"Fiscal Quarter" means a fiscal quarter for the Company.

 

"Fiscal Year" means the fiscal year of the Company, being the twelve-month period ending December 31.

 

"Force Majeure Event" has the meaning ascribed to such term in Section 9.2.

 

"GAAP" means generally accepted accounting principles consistently applied in the United States.

 

"Governmental Authority" means any domestic or foreign government, including any federal, provincial, state, territorial or municipal government, any multinational or supranational organization, any government agency (including the SEC), any tribunal, labor relations board, commission or stock exchange (including the New York Stock Exchange), and any other authority or organization exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, government.

 

"Initial Term" has the meaning ascribed to such term in Section 8.1.

 

  

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"Legal Action" means any action, claim, complaint, demand, suit, judgment, investigation or proceeding, pending or threatened, by any Person or before any Governmental Authority.

 

"Lenders" means the lenders, facility agent, security trustee, swap banks, swap agent or other financial institution contemplated by any Credit Facility.

 

"Losses" means losses, expenses, costs, liabilities and damages, excluding lost profits and consequential damages, but including interest charges, penalties, fines and monetary sanctions.

 

"Management Fee" has the meaning ascribed to such term in Section 6.1.

 

"Manager Indemnified Persons" has the meaning ascribed to such term in Section 7.2.

 

"Manager Misconduct" has the meaning ascribed to such term in Section 7.1(a).

 

"Manager's Personnel" means all individuals who are employed by or have entered into consulting arrangements with the Manager or any subcontractor under Section 2.3.

 

"Other Financing Agreements" has the meaning ascribed to such term in Section 3.2(b).

 

"Parties" means the Company and the Manager.

 

"Person" means an individual, corporation, limited liability company, partnership, joint venture, trust or trustee, unincorporated organization, association, Governmental Authority or other entity.

 

"President" means the chief executive officer of the Company.

 

"Purpose" has the meaning ascribed to such term in Section 9.3(a).

 

"Questioned Items" has the meaning ascribed to such term in Section 3.4(b).

 

"Receiving Party" means a Party to whom Confidential Information of a Disclosing Party has been disclosed hereunder.

 

"Renewal Term" has the meaning ascribed to such term in Section 8.2.

 

"SEC" means the United States Securities and Exchange Commission.

 

"Subsidiary" means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Persons Controlled by such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Person Controlled by such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, one or more Persons Controlled by such Person, or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Persons Controlled by such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.

 

 

 

  

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"Term" means the Initial Term and any Renewal Term, in each case subject to any early termination of this Agreement as permitted herein.

 

"Voting Securities" means securities of all classes of a Person entitling the holders thereof to vote on a regular basis in the election of members of the board of directors or other governing body of such Person.

 

1.2 Construction. In this Agreement, unless the context requires otherwise:

 

(a) references to laws and regulations refer to such laws and regulations as they may be amended from time to time, and references to particular provisions of a law or regulation include any corresponding provisions of any succeeding law or regulation;

 

(b) references to money refer to legal currency of the United States;

 

(c) "including" means "including, without limitation," whether or not so expressed;

 

(d) words importing the singular include the plural and vice versa, and words importing gender include all genders; and

 

(e) a reference to an "approval," "authorization," "consent," "notice" or "agreement" means an approval, authorization, consent, notice or agreement, as the case may be, in writing.

 

1.3 Headings. All article or section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof.

 

2.           ENGAGEMENT OF MANAGER

 

2.1 Engagement. The Company hereby engages the Manager to provide, upon the Company's request, the Administrative Management Services specified in Section 3, below, and the Manager hereby accepts such engagement, all in accordance with the terms of this Agreement. The Company and the Manager each acknowledge that to the extent set out in this Agreement, the Manager is acting solely on behalf of, as agent of and for the account of the Company. The Manager shall advise Persons with whom it deals on behalf of the Company that it is conducting such business for and on behalf of the Company.

 

2.2 Powers and Duties of the Manager. The Manager has the power and authority to take such actions on its own behalf or on behalf of the Company as it from time to time considers necessary or appropriate to enable it to perform its obligations under this Agreement, subject to customary oversight and supervision of the Company, its Board of Directors and its executive officers.

 

 

 

  

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2.3 Ability to Subcontract. The Manager may subcontract any of its duties and obligations hereunder to provide Administrative Management Services to any of its Affiliates without the consent of the Company and may subcontract its duties and obligations hereunder to provide Administrative Management Services to Persons that are not Affiliates with the prior written consent of the Company.  In the event of any subcontract by the Manager, the Manager shall promptly notify the Company thereof and shall remain fully liable for the due performance of its obligations under this Agreement.

 

2.4 Outside Activities. The Company acknowledges that the Manager may engage in business activities in addition to those relating to the Company provided that such activities do not interfere with the Manager's provision of the Administrative Management Services.

 

2.5 Authority of the Parties. Each Party represents to the other that it is duly authorized with full power and authority to execute, deliver and perform its obligations under this Agreement. The Company represents that the engagement of the Manager has been duly authorized by the Company and is in accordance with all governing documents of the Company.

 

2.6 Inspection of Books and Records. At all reasonable times and on reasonable notice, any Person authorized by the Company may inspect, examine, copy and audit the Books and Records of the Company kept by the Manager pursuant to this Agreement.

 

3.           ADMINISTRATIVE SERVICES

 

The Manager shall provide to the Company the services described in this Section 3 (collectively, the "Administrative Management Services").

 

3.1 Accounting and Records. The Manager shall, on behalf of the Company, establish an accounting system, including the development, implementation, maintenance and monitoring of internal control over financial reporting and disclosure controls and procedures, and maintain Books and Records, with such modifications as may be necessary to comply with Applicable Laws. The Books and Records shall contain particulars of receipts and disbursements relating to the Company's assets and liabilities and shall be kept pursuant to normal commercial practices that will permit financial statements to be prepared for the Company in accordance with GAAP. The Books and Records shall be the property of the Company but shall be kept at the Manager's primary office or such other place as the Company and the Manager may mutually agree. Upon expiration or termination of this Agreement, all of the Books and Records shall, at the direction of the Company, be provided to the Company or a new manager pursuant to Section 8.4(b).

 

3.2 Reporting Requirements. The Manager shall prepare and deliver to the Company the following reports, which the Manager shall use its reasonable best efforts to prepare and deliver within the time periods specified below or, if not so specified, within the time period requested by the relevant party:

 

  

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(a) a quarterly report to be delivered within 45 days of the end of each Fiscal Quarter setting out the interim financial results of the Company for such quarter and for the applicable Fiscal Year through the end of such Fiscal Quarter;

 

(b) a draft of the reports, certificates, documents and other information required under any Credit Facility and any other financing arrangements of the Company ("Other Financing Agreements") to be delivered at least two Business Days prior to their required delivery to the Lenders or lenders under Other Financing Agreements;

 

(c) as and when requested by the Company, draft reports regarding financial and other information required in connection with Applicable Laws (including annual and other reports that may be required to be filed under the Exchange Act and all other Applicable Laws); and

 

(d) as and when reasonably requested by the Company from time to time, such other reports with respect to financial and other information of the Company.

 

3.3 Financial Statements and Tax Returns. At the instruction of the Company, the Manager shall prepare and deliver for review by the Company and the Audit Committee of the Board of Directors the following which the Manager shall use its reasonable best efforts to prepare and deliver within the time periods specified below or, if not so specified, within the time period requested by the relevant party:

 

(a) within 30 days of the end of each Fiscal Quarter, unaudited financial statements of the Company for such Fiscal Quarter, to be reviewed by the external auditors of the Company, prepared in accordance with GAAP and the rules and regulations of the SEC, on a consolidated basis with all Subsidiaries of the Company;

 

(b) within 90 days of the end of each Fiscal Year, financial statements of the Company for such Fiscal Year, to be audited by the external auditors of the Company, prepared in accordance with GAAP and the rules and regulations of the SEC, on a consolidated basis with all Subsidiaries of the Company; and

 

(c) tax returns for the Company and all of its Subsidiaries required to be filed by Applicable Laws.

 

Notwithstanding the foregoing, in the event that the Company's reporting obligations are accelerated under the Exchange Act beyond what such obligations are as of the date of this Agreement, the Manager shall use its reasonable best efforts to provide to the Company the financial statements referred to in clauses (a) and (b) above within such periods as shall be required for the Company to comply with any reporting requirements under the Exchange Act or other similar applicable laws and regulations.

 

In addition, the Manager shall attend to the time calculation and payment of all taxes payable by the Company. At the instruction of the Company, the Manager shall cause the Company's external accountants to review the Company's unaudited financial statements, audit the Company's annual financial statements and finalize tax returns. The Manager shall make available to the Company's accountants the relevant Books and Records for the Company and shall assist the accountants in their duties.

 

  

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3.4 Budgets and Corporate Planning.

 

(a) Draft Budgets

 

On or before December 15 of each year, the Manager, in consultation with the Company, shall prepare and submit to the Board of Directors a detailed draft budget for the next Fiscal Year in a format acceptable to the Board of Directors and generally used by the Manager, which shall include: (1) a statement of estimated revenue and expenses, including Costs and Expenses; and (2) a proposed budget for capital expenditures, repairs and alterations, including proposed expenditures in respect of drydockings, together with an analysis as to when and why such expenditures, repairs and alterations may be required (the "Draft Budget").

 

(b) Process for Finalizing the Draft Budget.

 

For a period of seven (7) days after receipt of the Draft Budget, the Board of Directors may request further details and submit written comments on the Draft Budget. If, after reviewing the Draft Budget, the Company does not agree with any term thereof, the Company shall, within the same seven (7) day period, give the Manager notice of such disagreements and terms (the "Questioned Items") and a proposal for resolution of each such Questioned Item. The Company and the Manager shall endeavor to resolve any such differences between them with respect to the Questioned Items. In resolving any Questioned Item, the Company and the Manager shall consider, among other things, the Company's obligations under any relevant Charter, Credit Facility, or Other Financing Agreement.

 

(c) Approved Budget.

 

The Manager shall use its commercially reasonable efforts to prepare and deliver to the Company a revised budget that has been approved by the Board of Directors (the "Approved Budget") by December 31 of the preceding Fiscal Year. However, the Company acknowledges that the Approved Budget is only an estimate of the performance of the Vessels and the Manager makes no assurance, representation or warranty that the actual performance of the Vessels in the applicable Fiscal Year will correspond to the estimates contained in the Approved Budget for such Fiscal Year. The Parties acknowledge that any projections contained in the Approved Budget are subject to and may be affected by changes in financial, economic and other conditions and circumstances beyond the control of the Parties.

 

(d) Amendments to Approved Budget.

 

The Manager may, from time to time, in any Fiscal Year propose amendments to the Approved Budget upon at least fifteen (15) days prior notice to the Company, in which event the Company shall have the right to approve the amendments in accordance with the process set out in Section 3.4(b), with the relevant time periods being amended accordingly. Whenever, due to circumstances beyond the reasonable control of the Manager, emergency expenditures are required to ensure that any Vessels are operated and maintained as required under any applicable Charters, the Manager may make such emergency expenditures and reasonably request prompt reimbursement thereof, to the extent that such items are the responsibility of the Company, even if such expenditures are not included or reflected in the Approved Budget.

 

  

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3.5 Legal and Securities Compliance Services.

 

(a) Responsibilities of the Manager.

 

The Manager shall assist the Company with the following items, whether or not related to any of the Vessels:

 

(i) compliance with all Applicable Laws, including all relevant securities laws and the rules and regulations of the SEC and any securities exchange upon which the Company's securities are listed;

 

(ii) arranging for the provision of advisory services to the Company with respect to the Company's obligations under applicable securities laws in the United States and disclosure and reporting obligations under applicable securities laws, including the preparation for review, approval and filing by the Company of reports and other documents with the SEC and all other applicable regulatory authorities;

 

(iii) maintaining the Company's corporate existence and good standing in all necessary jurisdictions and assisting in all other corporate and regulatory compliance matters; and

 

(iv) conducting investor relations functions on behalf of the Company.

 

(b) Administration and Settlement of Legal Actions.

 

If any Legal Action is commenced against or is required to be commenced in favor of the Company or any Vessel Owning Subsidiary, the Manager shall arrange for the commencement or defense of such Legal Action, as the case may be, in the name of, on behalf of and at the expense of the Company or Vessel Owning Subsidiary, including retaining and instructing legal counsel, investigating the substance of the Legal Action and entering pleadings with respect to the Legal Action. The Manager shall assist the Company in administering and supervising any such Legal Actions and shall keep the Company advised of the status thereof.

 

(c) Interaction with Regulatory Authorities.

 

Notwithstanding anything in this Section 3 or otherwise, the Manager shall not act for or on behalf of the Company in its relationships with regulatory authorities except to the extent specifically authorized by the Company from time to time.

 

3.6 Bank Accounts.

 

(a) Administration by Manager.

 

The Manager shall oversee banking services for the Company and shall establish in the name of the Company banking accounts with such financial institutions as the Company may request. The Manager shall administer and manage all of the Company's cash and accounts, including making any deposits and withdrawals reasonably necessary for the management of its business and day-to-day operations. The Manager shall promptly deposit all moneys payable to the Company and received by the Manager into a bank account held in the name of the Company.

 

 

 

  

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(b) Payments from Operating Account.

 

The Company shall ensure that all charter hire associated with each Charter is paid by the applicable Charterer into the operating account. Unless otherwise instructed by the Company, the Manager shall instruct the financial institutions at which the accounts have been established to pay from the operating account, as and when required, amounts payable under any Credit Facility or Other Financing Agreement.

 

3.7 Other Administrative Management Services.

 

The Manager shall:

 

(a) develop, maintain and monitor internal audit controls, disclosure controls and information technology for the Company;

 

(b) assist with arranging board meetings and preparing board and committee meeting materials, including, as applicable, agendas, discussion papers, analyses and reports;

 

(c) prepare and provide such reports and accounting information so as to permit the Board of Directors to determine the amount of the cash available for the payment of dividends to the Company's shareholders, and to assist the Company in making arrangements with the Company's transfer agent for the payment of dividends, if any, to the shareholders;

 

(d) obtain, on behalf of the Company, general insurance, director and officer liability insurance and other insurance of the Company not related to the Vessels that would normally be obtained for a company in a similar business to that of the Company;

 

(e) administer payroll services, benefits and directors fees, as applicable, for the officers, other employees or directors of the Company;

 

(f) provide office space and office equipment for personnel of the Company at the location of the Manager or as otherwise reasonably designated by the Company, and clerical, secretarial, accounting and administrative assistance as may be reasonably necessary;

 

(g) provide all administrative services required in connection with any Credit Facility or Other Financing Agreement;

 

(h) negotiate and arrange for interest rate swap agreements, foreign currency contracts and forward exchange contracts;

 

(i) monitor the performance of investment managers;

 

(j) at the request and under the direction of the Company, handle all administrative and clerical matters in respect of (i) the call and arrangement of all annual and special meetings of shareholders, (ii) the preparation of all materials (including notices of meetings and proxy or similar materials) in respect thereof and (iii) the submission of all such materials to the Company in sufficient time prior to the dates upon which they must be mailed, filed or otherwise relied upon so that the Company has full opportunity to review, approve, execute and return them to the Manager for filing or mailing or other disposition as the Company may require or direct;

 

 

  

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(k) provide, at the request and under the direction of the Company, such communications to the transfer agent for the Company as may be necessary or desirable;

 

(l) make recommendations to the Company for the appointment of auditors, accountants, legal counsel and other accounting, financial or legal advisers, and technical, commercial, marketing or other independent experts; provided, however, that nothing herein shall permit the Manager to engage any such adviser or expert for the Company without the Company's specific approval;

 

(m) attend to all matters necessary for any reorganization, bankruptcy or insolvency petitions or proceedings, liquidation, dissolution or winding up of the Company;

 

(n) attend to all other administrative matters necessary to ensure the professional management of the Company's business or as reasonably requested by the Company from time to time.

 

4.           EMPLOYEES AND MANAGER'S PERSONNEL

 

4.1 Manager's Personnel. The Manager shall provide the Administrative Management Services hereunder through the Manager's Personnel. The Manager shall be responsible for all aspects of the employment or other relationship of the Manager's Personnel as required in order for the Manager to perform its obligations hereunder, including recruitment, training, staffing levels, compensation and benefits, supervision, discipline and discharge, and other terms and conditions of employment or contract. However, the Manager shall remain directly responsible and liable to the Company to carry out all of its obligations under this Agreement, whether performed directly or subcontracted to another Person, and the Manager shall be responsible for the compensation and reimbursement of all such other Persons.

 

5.           COVENANTS OF THE MANAGER

 

The Manager hereby agrees and covenants with the Company that, during the Term, the Manager shall:

 

(a) exercise all due care, skill and diligence in carrying out its duties under this Agreement as required by Applicable Laws;

 

(b) provide the President, the Chief Financial Officer, and the Board of Directors with all information in relation to the performance of the Manager's obligations under this Agreement as the President, the Chief Financial Officer, or the Board of Directors may reasonably request;

 

(c) use its reasonable best efforts to have all material property of the Company clearly identified as such, held separately from property of the Manager and, where applicable, in safe custody;

 

 

 

  

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(d) use its reasonable best efforts to have all property of the Company (other than money to be deposited to any bank account of the Company) transferred to or otherwise held in the name of the Company or any nominee or custodian appointed by the Company;

 

(e) use its reasonable best efforts to cause (i) the Company to own or possess all licenses that are necessary and used in the operation of its business as of the date hereof, (ii) all such licenses to be in full force and effect at all times, and (iii) all required filings with respect to such licenses to be timely made and all required applications for renewal thereof to be timely filed;

 

(f) use its reasonable best efforts to retain at all times a qualified staff so as to maintain a level of expertise sufficient to provide the Administrative Management Services; and

 

(g) use its reasonable best efforts to keep full and proper books, records and accounts showing clearly all transactions relating to its provision of Administrative Management Services in accordance with established general commercial practices and in accordance with GAAP, and allow the Company and its representatives to audit and examine such books, records and accounts at any time during customary business hours.

 

6.           MANAGER'S COMPENSATION AND REIMBURSEMENT

 

6.1 Fees for Administrative Management Services; Reimbursement. In consideration for the provision of the Administrative Management Services by the Manager to the Company, the Company shall pay the Manager a monthly management fee (the "Management Fee") in the amount of US$10,000.00 (ten thousand United States dollars) in accordance with Section 6.2.  In addition, the Company shall reimburse the Manager for all of the reasonable direct and indirect costs and expenses incurred by the Manager and its Affiliates in providing the Administrative Management Services (the "Costs and Expenses").

 

6.2 Invoicing. The Manager shall, in good faith, determine the expenses related to the Administrative Management Services that are allocable to the Company in any reasonable manner determined by the Manager and shall provide to the Company on a quarterly basis an invoice for the reasonable costs and expenses to be paid pursuant to Section 6.1, which invoice shall contain a description in reasonable detail of the costs and expenses that comprise the aggregate amount of the payment being invoiced.  The Manager shall maintain the records of all costs and expenses incurred, including any invoices, receipts and supplementary materials as are necessary or proper for the settlement of accounts between the Parties. The Company shall pay such invoices within thirty (30) days of receipt, unless the invoice is being disputed in accordance with this Agreement.

 

7.           LIABILITY OF THE MANAGER; INDEMNIFICATION

 

7.1 Liability of the Manager. The Manager shall not be liable to the Company for any Loss arising from the Administrative Management Services unless and to the extent that such Loss resulted from:

 

(a) the fraud, gross negligence, recklessness or willful misconduct of the Manager or any of its Affiliates (other than the Company) or any of their respective employees, agents or subcontractors ("Manager Misconduct"); or

 

 

 

  

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(b) any breach of this Agreement by the Manager or any of its Affiliates (other than the Company).

 

7.2 Manager Indemnification. The Company shall indemnify and hold harmless the Manager and its directors, officers, employees, subcontractors and Affiliates (the "Manager Indemnified Persons") from and against any and all Losses incurred or suffered by the Manager Indemnified Persons by reason of or arising from or in connection with their performance of this Agreement or any third-party Legal Action brought or threatened against such Manager Indemnified Persons in connection with their performance of this Agreement, other than for any Losses to the extent related to or that resulted from:

 

(a) any liabilities or obligations that the Manager has agreed to pay or for which the Manager is otherwise expressly responsible under this Agreement;

 

(b) Manager Misconduct; or

 

(c) any breach of this Agreement by the Manager or any of its Affiliates (other than the Company).

 

7.3 Company Indemnification. The Manager shall indemnify and hold harmless the Company and the Company's directors, officers, employees, subcontractors and Affiliates (the "Company Indemnified Persons") from and against any and all Losses incurred or suffered by the Company Indemnified Persons, to the extent related to or that resulted from:

 

(a) any liabilities or obligations that the Manager has agreed to pay or for which the Manager is otherwise expressly responsible under this Agreement;

 

(b) Manager Misconduct; or

 

(c) any breach of this Agreement by the Manager or any of its Affiliates (other than the Company).

 

8.           TERM AND TERMINATION

 

8.1 Initial Term. The initial term of this Agreement shall commence on the date hereof and end on the first anniversary of the date hereof, unless terminated earlier pursuant to this Agreement (the "Initial Term").

 

8.2 Renewal Term. This Agreement will, without any further act or formality on the part of either Party, on the expiration of the Initial Term or any Renewal Term, be automatically renewed for a further term of twelve (12) months (each a "Renewal Term") unless terminated in accordance with Section 8.3.

 

8.3 Termination. This Agreement may be terminated by either party upon not less than thirty (30) days prior written notice, or may be terminated immediately (i) at the election of the Company if, at any time, the Company ceases to own all of the issued and outstanding common shares of the Manager, (ii) at the election of the Company if, at any time, the Manager materially breaches this Agreement or (iii) at the election of the Manager if, at any time, the Company materially breaches the Agreement.

 

 

 

  

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8.4 Effects of Termination or Expiry of this Agreement. (a) If the Manager terminates this Agreement, the Company shall have the option to require the Manager to continue to provide Administrative Management Services to the Company, for the fee described in Section 6.1, for up to a ninety (90) day period from the date that the Manager provides notice of termination of this Agreement.

 

(b) Upon termination or expiry of this Agreement, this Agreement will be void and there shall be no liability on the part of any Party (or their respective officers, directors, employees or Affiliates) except that the obligation of the Company to pay to the Manager or its Affiliates the amounts accrued but outstanding under Section 6 and the terms and conditions set forth in Sections 7 and 9.3 shall survive such termination. After a written notice of termination has been given under this Section 8 or upon expiry, the Company may direct the Manager to, at the cost of the Company, undertake any actions reasonably necessary to transfer any aspect of the ownership or control of the assets of the Company to the Company or to any nominee of the Company and to do all other things reasonably necessary to bring the appointment of the Manager to an end at the appropriate time, and the Manager shall promptly comply with all such reasonable directions. Upon termination or expiry of this Agreement, the Manager shall promptly deliver to any new manager or the Company any Books and Records held by the Manager under this Agreement and shall execute and deliver such instruments and do such things as may reasonably be required to permit the new manager of the Company to assume its responsibilities.

 

9.           GENERAL

 

9.1 Assignment; Binding Effect. The Parties may not assign any of their respective rights under this Agreement in whole or in part without the prior written consent of the other Party, which consent may be withheld in the sole discretion of such other Party. This Agreement is binding upon and inures to the benefit of the Parties and their successors and permitted assigns.

 

9.2 Force Majeure. Neither of the Parties shall be under any liability for any failure to perform any of their obligations hereunder if any of the following occurs (each a "Force Majeure Event"):

 

(a) any event, cause or condition which is beyond the reasonable control of either or both of the Parties and which prevents either or both of the Parties from performing any of their respective obligations under this Agreement;

 

(b) acts of God, including fire, explosions, unusually or unforeseeably bad weather conditions, epidemic, lightening, earthquake or tsunami;

 

(c) acts of public enemies, including war or civil disturbance, vandalism, sabotage, terrorism, blockade or insurrection;

 

(d) acts of a Governmental Authority, including injunction or restraining orders issued by any judicial, administrative or regulatory authority, expropriation or requisition;

 

 

 

  

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(e) government rule, regulation or legislation, embargo or national defense requirement; or

 

(f) labor troubles or disputes, strikes or lockouts, including any failure to settle or prevent such event which is in the control of any Party.

 

A Party shall give written notice to the other Party promptly upon the occurrence of a Force Majeure Event.

 

9.3 Confidentiality. (a) Each Receiving Party agrees:

 

(i) to use any Confidential Information solely to carry out its obligations or exercise its rights under this Agreement (the "Purpose") and for no other purpose;

 

(ii) to copy and make other works based on Confidential Information only as strictly necessary for the Purpose;

 

(iii) to maintain the confidentiality of the Confidential Information using at least the same degree of care that the Receiving Party uses for its own confidential or proprietary information of a similar nature, but no less than reasonable care;

 

(iv) to reveal any Confidential Information to any third party without the prior written consent of the Disclosing Party, except that if the Receiving Party is required by law, court or administrative order or regulation to reveal any Confidential Information, the Receiving Party is permitted to do so, provided that the Receiving Party gives the Disclosing Party reasonable prior written notice (if permitted) of the required disclosure and cooperate with the Disclosing Party at its expense in seeking a protective order or other relief;

 

(v) to limit disclosure of the Confidential Information to such of the Company's or the Manager's officers and employees as is necessary for the Purpose;

 

(vi) to inform each officer and employee who receives any Confidential Information of the restrictions as to use and disclosure of Confidential Information contained herein and to be responsible for any breach of such restrictions by any such persons; and

 

(vii) forthwith upon the Disclosing Party's request, to procure the return of all Confidential Information together with any copies, abstracts, or other works which contain or are based on any of the Confidential Information; provided that, notwithstanding the foregoing, the Receiving Party shall be permitted to retain Confidential Information to the extent it is required to retain such Confidential Information pursuant to law, court or administrative order or regulation.

 

(b) Each Receiving Party further acknowledges that any breach of the provisions of this Agreement would result in serious damage being sustained by the Disclosing Party, and as a result hereby unconditionally agrees:

 

 

  

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(i) to be responsible for losses, damages or expenses (including without limitation attorneys' fees and expenses) that have been determined to have been caused by any such breach; and

 

(ii) that the Disclosing Party shall be entitled to equitable relief (including without limitation injunctive relief) in relation to any threatened or actual breach of the provisions of this Agreement without any requirement of posting a bond and without limiting any other remedy that may be available to the Disclosing Party.

 

9.4 Notices. Each notice, consent or request required to be given to a Party pursuant to this Agreement must be given in writing. A notice may be given by delivery to an individual or by fax, and shall be validly given if delivered on a Business Day to an individual at the following address, or, if transmitted on a Business Day, by fax or email addressed to the following Party:

 

	
If to the Company:

 

Diana Containerships Inc.

 

 

With Copy to:

Gary J.Wolfe, Esq.

Seward & Kissel LLP

One Battery Park Plaza

New York, New York 10004

(212) 574 1223 (telephone number)

(212) 480 8421 (facsimile number)

 

 

	
If to the Manager:

 

Unitized Ocean Transport Limited

 

 

With Copy to:

Gary J.Wolfe, Esq.

Seward & Kissel LLP

One Battery Park Plaza

New York, New York 10004

(212) 574 1223 (telephone number)

(212) 480 8421 (facsimile number)

 

or to any other address or fax number that the Party so designates by notice given in accordance with this Section. Any notice

 

(a) if validly delivered on a Business Day, shall be deemed to have been given when delivered; and

 

(b) if validly transmitted by fax on a Business Day, shall be deemed to have been given on that Business Day.

 

9.5 Third Party Rights. The provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no shareholder, employee, agent of any Party or any other Person shall have the right to enforce any provision of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement.

 

9.6 No Joint Venture. Nothing in this Agreement is intended to create or shall be construed as creating a joint venture or partnership between the Parties, and this Agreement shall not be deemed for any purpose to constitute any Party a partner of any other Party to this Agreement in the conduct of any business or otherwise or as a member of a joint venture or joint enterprise with any other Party to this Agreement.

 

 

 

  

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9.7 Severability. Each provision of this Agreement is severable. If any provision of this Agreement is or becomes illegal, invalid or unenforceable in any jurisdiction, the illegality, invalidity or unenforceability of that provision will not affect:

 

(a) the legality, validity or enforceability of the remaining provisions of this Agreement; or

 

(b) the legality, validity or enforceability of that provision in any other jurisdiction;

 

except that if:

 

(x) on the reasonable construction of this Agreement as a whole, the applicability of the other provision presumes the validity and enforceability of the particular provision, the other provision will be deemed also to be invalid or unenforceable; and

 

(y) as a result of the determination by a court of competent jurisdiction that any part of this Agreement is unenforceable or invalid and, as a result of this Section 9.7, the basic intentions of the Parties in this Agreement are entirely frustrated, the Parties shall use commercially reasonable efforts to amend, supplement or otherwise vary this Agreement to confirm their mutual intention in entering into this Agreement.

 

9.8 Governing Law; Jurisdiction; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts executed in and to be performed in that state, and each party hereto agrees to submit to the non-exclusive jurisdiction of the federal or state courts located in the City, County and State of New York as regards any claim or matter arising under or in connection with this Agreement. Each of the Parties hereby irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this agreement or the transactions contemplated hereby, in the federal or state courts located in the City, County and State of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum or seek to change the venue from any such court.

 

9.9 Amendments. No amendment, supplement, modification or restatement of any provision of this Agreement shall be binding unless it is in writing and signed by each Person that is a Party to this Agreement at the time of the amendment, supplement, modification or restatement.

 

9.10 Entire Agreement. This Agreement constitutes the entire agreement among the Parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.

 

9.11 Waiver. No failure by any Party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or of any other covenant, duty, agreement or condition. Any waiver must be specifically stated as such in writing.

 

9.12 Counterparts. This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the Parties.

 

[Remainder of This Page Intentionally Left Blank]

 

  

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IN WITNESS WHEREOF, this Administrative Services Agreement has been duly executed by the Parties as of the date first written above.

 

 

 

 

DIANA CONTAINERSHIPS INC.

 

 

 

        /s/Symeon Palios   

Name: Symeon Palios

Title: Director, Chief Executive Officer and Chairman of the Board

 

 

 

UNITIZED OCEAN TRANSPORT LIMITED

 

 

        /s/Semiramis Paliou               

Name: Semiramis Paliou

Title: Director and President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Administrative Services Agreement]

 

 

 

SK 26949 0001 1463506

  

18

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