Costamare Inc 6-K, filed Aug 10, 2021
Costamare Inc. (CMRE)
About this 6-K
Costamare Inc filed this 6-K on August 10, 2021.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Translation of registrant’s name into English)
(Address of principal executive office)
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase
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101.LAB
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XBRL Taxonomy Extension Label Linkbase
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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COSTAMARE INC.
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By:
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/s/ Gregory G. Zikos
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Name:
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Gregory G. Zikos
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Title:
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Chief Financial Officer
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Exhibit 99.1
COSTAMARE INC.
Condensed Consolidated Balance Sheets
As of December 31, 2020 and June 30, 2021
(Expressed in thousands of U.S. dollars)
| December 31, 2020 | June 30, 2021 | |||||||
| ASSETS | (Unaudited) | |||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents (Note 1) | $ | $ | ||||||
| Restricted cash (Note 1) | ||||||||
| Accounts receivable, net | ||||||||
| Inventories (Note 6) | ||||||||
| Due from related parties (Note 3) | ||||||||
| Fair value of derivatives (Notes 19 and 20) | ||||||||
| Insurance claims receivable | ||||||||
| Time charter assumed (Note 13) | ||||||||
| Investment in equity securities (Note 5) | ||||||||
| Prepayments and other assets | ||||||||
| Vessels held for sale (Note 7) | ||||||||
| Total current assets | ||||||||
| FIXED ASSETS, NET: | ||||||||
| Right-of-use assets (Note 12) | ||||||||
| Vessels and advances, net (Note 7) | ||||||||
| Total fixed assets, net | ||||||||
| OTHER NON-CURRENT ASSETS: | ||||||||
| Equity method investments (Notes 2 and 10) | ||||||||
| Accounts receivable, net, non-current (Note 3) | ||||||||
| Deferred charges, net (Note 8) | ||||||||
| Restricted cash, non-current (Note 1) | ||||||||
| Time charter assumed, non-current (Note 13) | ||||||||
| Fair value of derivatives, non-current (Notes 19 and 20) | ||||||||
| Debt securities, held to maturity (Net of allowance for credit losses of as of December 31, 2020) (Note 5) | ||||||||
| Other non-current assets (Note 5) | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Current portion of long-term debt, net of deferred financing costs (Note 11) | $ | $ | ||||||
| Accounts payable | ||||||||
| Due to related parties (Note 3) | ||||||||
| Finance lease liabilities, net (Note 12) | ||||||||
| Accrued liabilities | ||||||||
| Unearned revenue (Note 13) | ||||||||
| Fair value of derivatives (Notes 19 and 20) | ||||||||
| Other current liabilities (Note 3 and Note 10) | ||||||||
| Total current liabilities | ||||||||
| NON-CURRENT LIABILITIES: | ||||||||
| Long-term debt, net of current portion and deferred financing costs (Note 11) | ||||||||
| Finance lease liabilities, net of current portion (Note 12) | ||||||||
| Fair value of derivatives, non-current portion (Notes 19 and 20) | ||||||||
| Unearned revenue, net of current portion (Note 13) | ||||||||
| Total non-current liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES (Note 14) | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred stock (Note 15) | ||||||||
| Common stock (Note 15) | ||||||||
| Additional paid-in capital (Note 15) | ||||||||
| Retained earnings / (Accumulated deficit) | ( | ) | ||||||
| Accumulated other comprehensive loss (Notes 19 and 21) | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
COSTAMARE INC.
Unaudited Condensed Consolidated Statements of Operations
For the six-month periods ended June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data)
| For the six-month period ended June 30, | ||||||||
| 2020 | 2021 | |||||||
| REVENUES: | ||||||||
| Voyage revenue | $ | $ | ||||||
| EXPENSES: | ||||||||
| Voyage expenses | ( | ) | ( | ) | ||||
| Voyage expenses-related parties (Note 3) | ( | ) | ( | ) | ||||
| Vessels’ operating expenses | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| General and administrative expenses – related parties (Note 3) | ( | ) | ( | ) | ||||
| Management fees-related parties (Note 3) | ( | ) | ( | ) | ||||
| Amortization of dry-docking and special survey costs (Note 8) | ( | ) | ( | ) | ||||
| Depreciation (Notes 7, 12 and 21) | ( | ) | ( | ) | ||||
| Gain on sale of vessels, net (Note 7) | ||||||||
| Loss on vessels held for sale (Note 7) | ( | ) | ||||||
| Vessels’ impairment loss (Notes 7 and 8) | ( | ) | ||||||
| Foreign exchange gains / (losses), net | ( | ) | ||||||
| Operating income / (loss) | ( | ) | ||||||
| OTHER INCOME / (EXPENSES): | ||||||||
| Interest income | ||||||||
| Interest and finance costs (Note 17) | ( | ) | ( | ) | ||||
| Income from equity method investments (Note 10) | ||||||||
| Fair value measurement of equity securities (Note 5) | ||||||||
| Other, net | ||||||||
| Loss on derivative instruments, net (Note 19) | ( | ) | ( | ) | ||||
| Total other income / (expenses), net | ( | ) | ||||||
| Net Income / (Loss) | $ | ( | ) | $ | ||||
| Earnings allocated to Preferred Stock (Note 16) | ( | ) | ( | ) | ||||
| Gain on retirement of Preferred Stock (Note 16) | ||||||||
| Net income / (Loss) available to Common Stockholders | ( | ) | ||||||
| Earnings / (losses) per common share, basic and diluted (Note 16) | $ | ( | ) | $ | ||||
| Weighted average number of shares, basic and diluted (Note 16) | ||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
COSTAMARE INC.
Unaudited Condensed Consolidated Statements of Comprehensive Income / (Loss)
For the six-month periods ended June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars)
| For the six-month period ended June 30, | ||||||||
| 2020 | 2021 | |||||||
| Net income / (loss) for the period | $ | ( | ) | $ | ||||
| Other comprehensive income: | ||||||||
| Unrealized gain / (loss) on cash flow hedges, net (Notes 19 and 21) | ( | ) | ||||||
| Effective portion of changes in fair value of cash flow hedges (Note 19 and 21) | ( | ) | ||||||
| Amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to Depreciation (Note 21) | ||||||||
| Other comprehensive loss for the period | $ | ( | ) | $ | ( | ) | ||
| Total comprehensive income / (loss) for the period | $ | ( | ) | $ | ||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
COSTAMARE INC.
Unaudited Condensed Consolidated Statements of Stockholders’ Equity
For the six-month periods ended June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data)
| Preferred Stock (Series E) | Preferred Stock (Series D) | Preferred Stock (Series C) | Preferred Stock (Series B) | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| # of shares | Par value | # of shares | Par value | # of shares | Par value | # of shares | Par value | # of shares | Par value | Additional Paid-in Capital | Accumulated Other Comprehensive Income / (Loss) | Retained Earnings/ (Accumulated Deficit) | Total | |||||||||||||||||||||||||||||||||||||||||||
| BALANCE, January 1, 2020 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| - Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| - Adoption of new accounting policy (Note 5) | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| - Issuance of common stock (Notes 3 and 15) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| -Retirement of Preferred Stock (Note 15) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| - Dividends - Common stock (Note 15) | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| - Dividends - Preferred stock (Note 15) | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| - Other comprehensive loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| BALANCE, June 30, 2020 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||||||||
| BALANCE, January 1, 2021 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||||||||
| - Net income | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| - Issuance of common stock (Notes 3 and 15) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| - Dividends - Common stock (Note 15) | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| - Dividends - Preferred stock (Note 15) | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| -Gain from common control transaction (Note 3) | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| - Other comprehensive loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| BALANCE, June 30, 2021 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
COSTAMARE INC.
Unaudited Condensed Consolidated Statements of Cash Flows
For the six-month periods ended June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars)
| For the six-month period ended June 30, | ||||||||
| 2020 | 2021 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net income / (loss): | $ | ( | ) | $ | ||||
| Adjustments to reconcile net income / (loss) to net cash provided by operating activities: | ||||||||
| Depreciation | ||||||||
| Credit loss provision | ( | ) | ||||||
| Amortization of debt discount | ( | ) | ( | ) | ||||
| Amortization and write-off of financing costs | ||||||||
| Amortization of deferred dry-docking and special survey costs | ||||||||
| Amortization of assumed time charter | ( | ) | ||||||
| Fair value measurement of equity securities | ( | ) | ||||||
| Equity based payments | ||||||||
| Loss on derivative instruments, net | ||||||||
| Gain on sale of vessels, net | ( | ) | ( | ) | ||||
| Loss on vessels held for sale | ||||||||
| Vessels impairment loss | ||||||||
| Income from equity method investments | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Due from related parties | ||||||||
| Inventories | ( | ) | ( | ) | ||||
| Insurance claims receivable | ( | ) | ( | ) | ||||
| Prepayments and other | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Due to related parties | ( | ) | ||||||
| Accrued liabilities | ||||||||
| Unearned revenue | ( | ) | ( | ) | ||||
| Other current liabilities | ( | ) | ||||||
| Dividend from equity method investees | ||||||||
| Dry-dockings | ( | ) | ( | ) | ||||
| Accrued charter revenue | ||||||||
| Net Cash provided by Operating Activities | ||||||||
| Cash Flows From Investing Activities: | ||||||||
| Return of capital from equity method investments | ||||||||
| Debt securities capital redemption | ||||||||
| Proceeds from the settlement of insurance claims | ||||||||
| Cash acquired through asset acquisition | ||||||||
| Vessel acquisition and advances/Additions to vessel cost | ( | ) | ( | ) | ||||
| Proceeds from the sale of vessels, net | ||||||||
| Net Cash provided by / (used in) Investing Activities | ( | ) | ||||||
| Cash Flows From Financing Activities: | ||||||||
| Proceeds from long-term debt and finance leases | ||||||||
| Repayment of long-term debt and finance leases | ( | ) | ( | ) | ||||
| Payment of financing costs | ( | ) | ( | ) | ||||
| Retirement of preferred stock | ( | ) | ||||||
| Dividends paid | ( | ) | ( | ) | ||||
| Net Cash provided by / (used in) Financing Activities | ( | ) | ||||||
| Net increase in cash, cash equivalents and restricted cash | ||||||||
| Cash, cash equivalents and restricted cash at beginning of the period | ||||||||
| Cash, cash equivalents and restricted cash at end of the period | $ | $ | ||||||
| Supplemental Cash Information: | ||||||||
| Cash paid during the period for interest, net of capitalized interest | $ | $ | ||||||
| Non-Cash Investing and Financing Activities: | ||||||||
| Dividend reinvested in common stock of the Company | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
1. Basis of Presentation and General Information:
The accompanying consolidated financial statements include the accounts of Costamare Inc. (“Costamare”) and its wholly-owned subsidiaries (collectively, the “Company”). Costamare is organized under the laws of the Republic of the Marshall Islands.
On November 4, 2010, Costamare completed its initial public offering (“Initial Public Offering”) in the United States under the United States Securities Act of 1933, as amended (the “Securities Act”). During the six-month period ended June 30, 2021, the Company issued
As of June 30, 2021, the Company owned and/or operated a fleet of
At June 30, 2021, Costamare had
Revenues for the six-month periods ended June 30, 2020 and 2021, derived from significant charterers individually accounting for 10% or more of revenues (in percentages of total revenues) were as follows:
| 2020 | 2021 | |||||||
| A | % | % | ||||||
| B | % | % | ||||||
| C | % | % | ||||||
| D | % | % | ||||||
| E | % | % | ||||||
| Total | % | % | ||||||
The reconciliation of the cash, cash equivalents and restricted cash at end of six-month periods ended June 30, 2020 and 2021 is presented in the table below:
| 2020 | 2021 | |||||||
| Reconciliation of cash, cash equivalents and restricted cash | ||||||||
| Cash and cash equivalents | ||||||||
| Restricted cash – current portion | ||||||||
| Restricted cash – non-current portion | ||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | ||||||
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all the information and notes required by U.S. GAAP for annual financial statements. These statements and the accompanying notes should be read in conjunction with the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2020, filed with the SEC on March 1, 2021.
These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the periods presented. Operating results for the six-month period ended June 30, 2021, are not necessarily indicative of the results that might be expected for the fiscal year ending December 31, 2021.
The outbreak of the COVID-19 virus has had a negative effect on the global economy and, during the first half of 2020, adversely impacted the international container shipping industry. From the onset of the outbreak through most of the second quarter of 2020, time charter rates for container vessels had a sizable drop. However, since June 2020, time charter rates across all sizes of container vessels have improved significantly due to the increased demand for containerized goods coupled with inefficiencies in the global supply chain caused by the pandemic. The Company will continue to monitor the development of the COVID-19 pandemic and its potential direct or indirect negative effects on the containership and dry bulk markets and will provide further updates on the situation if market circumstances warrant it.
The Company will continue monitoring the situation and will evaluate any future estimates and assumptions that require increased judgment when needed.
2. Significant Accounting Policies and Recent Accounting Pronouncements:
A discussion of the Company’s significant accounting policies can be found in Note 2 of the Company’s Consolidated Financial Statements included in the Annual Report on Form 20-F for the year ended December 31, 2020. There have been no material changes to these policies in the six-month period ended June 30, 2021, except for as discussed below:
Significant accounting policies:
(i) Vessels, Net: Vessels are stated at cost, which consists of the contract price and any material expenses incurred upon acquisition (initial repairs, improvements and delivery expenses, interest and on-site supervision costs incurred during the construction periods). Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise these amounts are charged to expense as incurred.
The cost of each of the Company’s vessels is depreciated from the date of acquisition on a straight-line basis over the vessel’s remaining estimated economic useful life, after considering the estimated residual value, which is equal to the product of vessels’ lightweight tonnage and estimated scrap rate.
Management estimates the useful life of the Company’s container and dry bulk vessels to be
If the estimated economic lives assigned to the Company’s vessels prove to be too long because of unforeseen events such as an extended period of weak markets, the broad imposition of age restrictions by the Company’s customers’, new regulations, or other future events, the remaining estimated useful life of any affected vessel is adjusted accordingly.
(ii) Impairment of Long-lived Assets: The Company reviews its vessels for impairment whenever events or changes in circumstances indicate that the carrying amount of a vessel might not be recoverable. The Company considers information, such as vessel sales and purchases, business plans and overall market conditions in order to determine if an impairment might exist.
If the Company determines that an impairment indicator is present, or if circumstances indicate that an impairment may exist, the Company then performs an analysis to determine whether an impairment loss should be recognized. The Company proceeds to Step 1 of the impairment analysis whereby it computes estimates of the future undiscounted net operating cash flows for each vessel based on assumptions regarding time charter rates, vessels’ operating expenses, vessels’ capital expenditures, vessels’ residual value, fleet utilization and the estimated remaining useful life of each vessel.
Container vessels: The future undiscounted net operating cash flows are determined as the sum of (x) (i) the charter revenues from existing time charters for the fixed fleet days and (ii) an estimated daily time charter rate for the unfixed days (based on the most recent ten year historical average rates after eliminating outliers and without adjustment for any growth rate) over the remaining estimated life of the vessel, assuming an estimated fleet utilization rate, less (y) (i) expected outflows for vessels’ operating expenses assuming an expected increase in expenses of
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
Dry bulk vessels: The future undiscounted net operating cash flows are determined as the sum of (x) (i) the charter revenues from existing time charters for the fixed fleet days and (ii) an estimated daily time charter rate for the unfixed days (using the most recent 10 year average of historical 1 year time charter rates available for each type of dry bulk vessel over the remaining estimated life of each vessel, net of commissions), assuming an estimated fleet utilization rate, less (y) (i) expected outflows for vessels’ operating expenses assuming an expected increase in expenses of
The assumptions used to develop estimates of future undiscounted net operating cash flows are based on historical trends as well as future expectations. If those future undiscounted net operating cash flows are greater than a vessel’s carrying value, there are no impairment indications for such vessel. If those future undiscounted net operating cash flows are less than a vessel’s carrying value, the Company proceeds to Step 2 of the impairment analysis for such vessel.
In Step 2 of the impairment analysis, the Company determines the fair value of the vessels that failed Step 1 of the impairment analysis, based on management estimates and assumptions, making use of available market data and taking into consideration third party valuations. Therefore, the Company has categorized the fair value of the vessels as Level 2 in the fair value hierarchy. The difference between the carrying value of the vessels that failed Step 1 of the impairment analysis and their fair value as calculated in Step 2 of the impairment analysis is recognized in the Company’s accounts as an impairment loss.
The review of the carrying amounts in connection with the estimated recoverable amount of the Company’s vessels as of December 31, 2020 and June 30, 2021 resulted in an impairment loss of $
(iii) Segment reporting: The Company determined that currently it operates under two reportable segments: (1) a container vessels segment, as a provider of worldwide marine transportation services by chartering its container vessels, and (2) a dry bulk vessels segment, as a provider of dry bulk commodities transportation services by chartering its dry bulk vessels. The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company's consolidated financial statements.
(iv) Accounting for transactions under common control: A common control transaction is any transfer of net assets or exchange of equity interests between entities or businesses that are under common control by an ultimate parent or controlling shareholder before and after the transaction. Common control transactions may have characteristics that are similar to business combinations but do not meet the requirements to be accounted for as business combinations because, from the perspective of the ultimate parent or controlling shareholder, there has not been a change in control over the acquiree. Due to the fact common control transactions do not result in a change of control at the ultimate parent or controlling shareholder level, the Company does not account for that at fair value. Rather, common control transactions are accounted for at the carrying amount of the net assets or equity interests transferred.
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
New Accounting Pronouncements - Not Yet Adopted
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. ASU 2020-04 applies to contracts that reference the London Inter-bank offered Rate (“LIBOR”) or another reference rate expected to be terminated because of reference rate reform. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848). The amendments in this Update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in this Update to the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. The amendments in this Update apply to all entities that elect to apply the optional guidance in Topic 848. ASU 2020-04 and ASU 2021-01 can be adopted as of March 12, 2020 through December 31, 2022. As of June 30, 2021, the Company has not yet elected any optional expedients provided in the standard. The Company will apply the accounting relief as relevant contract and hedge accounting relationship modifications are made during the reference rate reform transition period. The Company is in the process of assessing the impact of the standard adoption on the consolidated financial statements.
3. Transactions with Related Parties:
(a) Costamare Shipping Company S.A. (“Costamare Shipping”) and Costamare Shipping Services Ltd. (“Costamare Services”): Costamare Shipping is a ship management company wholly owned by Mr. Konstantinos Konstantakopoulos, the Company’s Chairman and Chief Executive Officer. Costamare Shipping provides the Company, pursuant to a Framework Agreement dated November 2, 2015 as amended and restated on January 17, 2020 and as further amended and restated on June 28, 2021 (the “Framework Agreement”), with general administrative and certain commercial services as well as technical, crewing, provisioning, bunkering, sale and purchase, chartering, accounting, insurance and administrative services in respect of the Company’s containerships in exchange for a daily fee for each containership. The Company amended and restated the Framework Agreement in 2020 to allow Costamare Shipping to retain certain relevant payouts from insurance providers and in 2021 to allow Costamare Shipping to provide services in relation to other types of vessels (including dry bulk vessels), in addition to container vessels. Costamare Services, a company controlled by the Company’s Chairman and Chief Executive Officer and members of his family, provides, pursuant to a Services Agreement dated November 2, 2015 as amended and restated on June 28, 2021 (the “Services Agreement”), the Company’s vessel-owning subsidiaries with crewing, commercial and administrative services. Effective July 1, 2019, the Services Agreement has been amended to increase the fees paid by each vessel-owning subsidiary of the Company to
On November 27, 2015, the Company amended and restated the Registration Rights Agreement entered into in connection with the Company’s Initial Public Offering, to extend registration rights to Costamare Shipping and Costamare Services each of which have received or may receive shares of its common stock as fee compensation.
Pursuant to the Framework Agreement and the Services Agreement, Costamare Shipping and Costamare Services received (i) for each vessel a daily fee of $
The Company is able to terminate the Framework Agreement and/or the Services Agreement, subject to a termination fee, by providing written notice to Costamare Shipping or Costamare Services, as applicable, at least 12 months before the end of the subsequent one-year term. The termination fee is equal to (a) the number of full years remaining prior to December 31, 2025, times (b) the aggregate fees due and payable to Costamare Shipping or Costamare Services, as applicable, during the 12-month period ending on the date of termination (without taking into account any reduction in fees under the Framework Agreement to reflect that certain obligations have been delegated to a sub-manager or a sub-provider, as applicable); provided that the termination fee will always be at least two times the aggregate fees over the 12-month period described above.
In 2013, Costamare Shipping entered into a co-operation agreement (the “Co-operation Agreement”) with third-party ship managers V.Ships Greece Ltd. (“V.Ships Greece”), pursuant to which the two companies established a ship management cell (the “Cell”) under V.Ships Greece. The Cell offered technical, crewing, provisioning, bunkering, sale and purchase and accounting services, as well as certain commercial and insurance services to certain of the Company’s container vessels, pursuant to separate management agreements entered into between V.Ships Greece and the ship-owning company of the respective container vessel, for a daily management fee. The Cell also offered ship management services to third-party owners. Effective April 1, 2019, the Company terminated its agreement with Costamare Shipping, whereby Costamare Shipping passed to the Company the net profit, if any, it received pursuant to the Co-operation Agreement as a refund or reduction of the management fees payable by the Company to Costamare Shipping under the Framework Agreement. Following the termination of the Co-operation Agreement on October 16, 2020, V.Ships Greece continues to provide the same management services to the Company’s vessels (as well as to vessels acquired under the Framework Deed and to third party vessels). As at June 30, 2021, V.Ships Greece provided services to
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
Management fees charged by Costamare Shipping in the six-month periods ended June 30, 2020 and 2021, amounted to $
During the six-month periods ended June 30, 2020 and 2021, Costamare Shipping charged in aggregate to the companies established pursuant to the Framework Deed (Notes 9 and 10) the amounts of $
The balance due from Costamare Shipping at December 31, 2020, amounted to $
(b) Shanghai Costamare Ship Management Co., Ltd. (“Shanghai Costamare”): Shanghai Costamare was initially owned (indirectly)
(c) Blue Net Chartering GmbH & Co. KG (“BNC”) and Blue Net Asia Pte., Ltd. (“BNA”): On January 1, 2018, Costamare Shipping appointed, on behalf of the vessels it manages, BNC, a company
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
(d) Longshaw Maritime Investments S.A. (“Longshaw”): On June 14, 2021, the Company entered into a Shares Purchase Agreement (‘’SPA’’) with Longshaw, a related party entity controlled by the Company’s Chairman and Chief Executive Officer, Mr. Konstantinos Konstantakopoulos, for the acquisition of all of its equity interest in
(e) Other related parties' transactions: On November 3, 2010, the Company and the Company's Chairman and Chief Executive Officer, Mr. Konstantinos Konstantakopoulos, entered into a Restrictive Covenant Agreement (the "Original RCA"), pursuant to which the activities of Mr. Konstantakopoulos with respect to the container vessel sector, because of his capacity as a director or officer of the Company, were restricted. In July 2021, the Original RCA was amended and restated, and Mr. Konstantakopoulos agreed to similarly restrict his activities in the dry bulk sector.
4. Segmental Financial Information
Since June 14, 2021 (Note 3(d)), the Company has
The tables below present information about the Company's reportable segments as of June 30, 2021, and for the six-month period then ended. The Company measures segment performance based on net income. Items included in the segment net income are allocated to the extent that the items are directly or indirectly attributable to the segments. Items are allocated by indirect calculation and the allocation keys are defined on the basis of each segment’s drawing on key resources. The Other segment includes items that due to their nature are not allocated to any of the Company’s reportable segments. As of June 30, 2021 and for the six-month period then ended, Other segment includes equity securities investment fair value measurement related balance and income as well as equity method investments’ balances and income. Summarized financial information concerning each of the Company's reportable segments is as follows:
| For the six-month period ended June 30, 2021 | ||||||||||||||||
| Container vessels segment | Dry bulk vessels segment | Other | Total | |||||||||||||
| Voyage revenue | $ | $ | $ | $ | ||||||||||||
| Net Income | $ | $ | $ | $ | ||||||||||||
| Total Assets | $ | $ | $ | $ | ||||||||||||
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
5. Current Assets: Investments in Equity securities / Non-current Assets: Debt Securities, Held to Maturity, and Other Non-Current Assets
In 2014, Zim Integrated Services (“Zim”) agreed with its creditors, including vessel and container lenders, ship-owners, shipyards, unsecured lenders and bond holders, to restructure its debt. Based on this agreement, the Company received Zim shares representing approximately
The Company accounts on a quarterly basis, for the unwinding of the interest on the Series 1 and Series 2 Notes, until the book value of the instruments equals their face value on maturity. During the six-month period ended June 30, 2021, the Company recorded $
During the year ended December 31, 2016, the Company received $
In March 2021, the Company received $
The Series 1 and Series 2 Notes were carried at amortized cost in the accompanying 2020 consolidated balance sheet (Note 20(c)). These financial instruments were not measured at fair value on a recurring basis.
On January 28, 2021, Zim completed its initial public offering in the United States under the United States Securities Act of 1933, as amended. Since then, the Company classifies the equity securities of Zim that it owned at Fair Value through Net Income as the Company did not have the ability to exercise significant influence on matters at Zim, and there is readily available fair value for these securities. The Company records the subsequent changes in fair value in the consolidated statements of operations based on the closing price of Zim ordinary shares on the New York Stock Exchange (NYSE) on each reporting date (Level 1 inputs of the fair value hierarchy).
6. Inventories:
Inventories in the accompanying consolidated balance sheets relate to bunkers, lubricants and spare parts on board the vessels.
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
7. Vessels and advances, net:
The amounts in the accompanying consolidated balance sheets are as follows:
| Vessel Cost | Accumulated Depreciation | Net Book Value | ||||||||||
| Balance, January 1, 2021 | $ | $ | ( | ) | $ | |||||||
| Depreciation | - | ( | ) | ( | ) | |||||||
| Vessel acquisitions, advances and other vessels’ costs | - | |||||||||||
| Vessel sales, transfers and other movements | ( | ) | ( | ) | ||||||||
| Balance, June 30, 2021 | $ | $ | ( | ) | $ | |||||||
During the six-month period ended June 30, 2021, the Company (i) acquired the secondhand container vessels Aries, Argus, Glen Canyon, Androusa, Norfolk, Porto Cheli, Porto Kagio and Porto Germeno with an aggregate TEU capacity of
Furthermore, during the six-month period ended June 30, 2021, the Company purchased from York (Notes 9 and 10) the equity interest held by York (in the range from
During the six-month period ended June 30, 2021, the Company agreed to acquire (i) the 2009-built,
During the six-month period ended June 30, 2021, the Company sold the container vessels Halifax Express, which was held for sale at December 31, 2020 and Prosper, which was held for sale at March 31, 2021 and recognized a net gain of $
On March 24, 2021, the Company decided to make arrangements to sell the container vessel Venetiko, and on June 10, 2021, the container vessels ZIM Shanghai and ZIM New York, respectively (Note 22(f)). At these dates, the Company concluded that all the criteria required by the relevant accounting standard, ASC 360-10-45-9, for the classification of the
During the six-month period ended June 30, 2020, the Company acquired the 2009-built container vessel,
During the six-month period ended June 30, 2020, the Company sold the container vessel Neapolis and recognized a gain of $
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
As of June 30, 2020, the fair market value of the container vessels Zagora, Kokura, Kawasaki and Singapore Express based on their estimated sale price, net of commissions (Level 2 inputs of the fair value hierarchy) was $
Fifty- of the Company’s vessels, with a total carrying value of $
8. Deferred Charges, net:
Deferred charges, net include the unamortized dry-docking and special survey costs. The amounts in the accompanying consolidated balance sheets are as follows:
| Balance, January 1, 2021 | $ | |||
| Additions | ||||
| Amortization | ( | ) | ||
| Write-off and other movements (Note 7) | ( | ) | ||
| Balance, June 30, 2021 | $ |
During the six-month period ended June 30, 2021,
9. Costamare Ventures Inc.:
On May 18, 2015, the Company, along with its wholly-owned subsidiary, Costamare Ventures Inc. (“Costamare Ventures”), amended and restated the Framework Deed, which was further amended on June 12, 2018 (the “Framework Deed”) with York Capital Management Global Advisors LLC and its affiliate Sparrow Holdings, L.P. (collectively, “York”) to invest jointly in the acquisition and construction of container vessels. Under the Framework Deed, the decisions regarding vessel acquisitions are made jointly by Costamare Ventures and York and the Company reserves the right to acquire any vessels that York decides not to pursue. The commitment period ended on May 15, 2020 and the termination of the Framework Deed will occur on May 15, 2024, or upon the occurrence of certain extraordinary events as described therein.
On termination and on the occurrence of certain extraordinary events, Costamare Ventures may elect to divide the vessels owned by all such vessel-owning entities between itself and York to reflect their cumulative participation in all such entities. Costamare Shipping provides ship management and administrative services to the vessels acquired under the Framework Deed, with the right to subcontract to V.Ships Greece.
As at June 30, 2021, the Company holds
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
10. Equity Method Investments:
The companies accounted for as equity method investments, all of which are incorporated in the Marshall Islands, are as follows:
| Entity | Vessel | Participation % June 30, 2021 | Date Established /Acquired | |||
| Steadman Maritime Co. | | | | |||
| Marchant Maritime Co. (*) | - | - | | |||
| Horton Maritime Co. (*) | - | - | | |||
| Smales Maritime Co. | - | | | |||
| Geyer Maritime Co. | | | | |||
| Goodway Maritime Co. | | | | |||
| Platt Maritime Co. | | | | |||
| Sykes Maritime Co. | | | |
(*) Dissolved on June 21, 2021
During the year ended December 31, 2020, the Company received, in the form of a special dividend, $
During the year ended December 31, 2020, the Company received in the form of a special dividend, $
During the year ended December 31, 2020, the Company received the amount of $
On November 12, 2018, Costamare entered into a share purchase agreement (the “Share Purchase Agreement”) to acquire the ownership interest held by York in
On July 17, 2019, the Company elected to pay part of the previously agreed deferred price for the acquisition of the
On March 22, 2021, March 24, 2021 and March 29, 2021, the Company entered into three share purchase agreements to acquire the ownership interest (in the range of
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
For the six-month periods ended June 30, 2020 and 2021, the Company recorded net income of $
The summarized combined financial information of the companies accounted for as equity method investment is as follows:
| December 31, 2020 | June 30, 2021 | |||||||
| Current assets | $ | $ | ||||||
| Non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| Current liabilities | $ | $ | ||||||
| Non-current liabilities | ||||||||
| Total liabilities | $ | $ | ||||||
| Six-month period ended June 30, | ||||||||
| 2020 | 2021 | |||||||
| Voyage revenue | $ | $ | ||||||
| Net income | $ | $ | ||||||
11. Long-Term Debt:
The amounts shown in the accompanying consolidated balance sheets consist of the following:
| Borrower(s) | December 31, 2020 | June 30, 2021 | ||||||||||
| A. | Term Loans: | |||||||||||
| 1. | Montes Shipping Co. and Kelsen Shipping Co. | |||||||||||
| 2. | Uriza Shipping S.A. | |||||||||||
| 3. | Costis Maritime Corporation, Christos Maritime Corporation and Capetanissa Maritime Corporation | |||||||||||
| 4. | Rena Maritime Corporation, Finch Shipping Co. and Joyner Carriers S.A. | |||||||||||
| 5. | Nerida Shipping Co. | |||||||||||
| 6. | Costamare Inc. | |||||||||||
| 7. | Singleton Shipping Co. and Tatum Shipping Co. | |||||||||||
| 8. | Reddick Shipping Co. and Verandi Shipping Co. | |||||||||||
| 9. | Costamare. Inc. | |||||||||||
| 10. | Bastian Shipping Co. and Cadence Shipping Co. | |||||||||||
| 11. | Adele Shipping Co. | |||||||||||
| 12. | Costamare Inc. | |||||||||||
| 13. | Quentin Shipping Co. and Sander Shipping Co. | |||||||||||
| 14. | Costamare Inc. | |||||||||||
| 15. | Capetanissa Maritime Corporation et al. | |||||||||||
| 16. | Caravokyra Maritime Corporation et al. | |||||||||||
| 17. | Achilleas Maritime Corporation et al. | |||||||||||
| 18. | Kelsen Shipping Co. | |||||||||||
| 19. | Uriza Shipping S.A. | |||||||||||
| 20. | Berg Shipping Co. | |||||||||||
| 21. | Reddick Shipping Co. and Verandi Shipping Co. | |||||||||||
| 22. | Evantone Shipping Co. and Fortrose Shipping Co. | |||||||||||
| 23. | Ainsley Maritime Co. and Ambrose Maritime Co. | |||||||||||
| 24. | Hyde Maritime Co. and Skerrett Maritime Co. | |||||||||||
| 25. | Kemp Maritime Co. | |||||||||||
| 26. | Vernes Shipping Co. | |||||||||||
| 27. | Achilleas Maritime Corporation et al. | |||||||||||
| 28. | Novara et al. | |||||||||||
| Total Term Loans | $ | $ | ||||||||||
| B. | Other financing arrangements | |||||||||||
| C. | Unsecured Bond Loan | |||||||||||
| Total long-term debt | $ | $ | ||||||||||
| Less: Deferred financing costs | ( | ) | ( | ) | ||||||||
| Total long-term debt, net | ||||||||||||
| Less: Long-term debt current portion | ( | ) | ( | ) | ||||||||
| Add: Deferred financing costs, current portion | ||||||||||||
| Total long-term debt, non-current, net | $ | $ | ||||||||||
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
A. Term Loans:
1. In December 2007, Montes Shipping Co. and Kelsen Shipping Co. entered into a loan agreement with a bank for an amount of up to $
2. On May 6, 2016, Uriza Shipping S.A., entered into a loan agreement with a bank for an amount of up to $
3. In May 2008, Costis Maritime Corporation and Christos Maritime Corporation entered into a loan agreement with a bank for an amount of up to $
4. In February 2006, Rena Maritime Corporation entered into a loan agreement with a bank for an amount of up to $
5. On August 1, 2017, Nerida Shipping Co. entered into a loan agreement with a bank for an amount of up to $
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
6. On March 7, 2018, the Company entered into a loan agreement with a bank for an amount of $
7. On July 17, 2018, Tatum Shipping Co. and Singleton Shipping Co. entered into a loan agreement with a bank for an amount of up to $
8. On October 26, 2018, Reddick Shipping Co. and Verandi Shipping Co., entered into a loan agreement with a bank for an amount of up to $
9. On November 27, 2018, the Company entered into a loan agreement with a bank for an amount of $
10. On June 18, 2019, Bastian Shipping Co. and Cadence Shipping Co., entered into a loan agreement with a bank for an amount of up to $
11. On June 24, 2019, Adele Shipping Co. entered into a loan agreement with a bank for an amount of up to $
12. On June 28, 2019, the Company entered into a loan agreement with a bank for an amount of up to $
13. On July 18, 2019, the Company entered into a loan agreement with a bank for an amount of up to $
14. On February 13, 2020, the Company entered into a loan agreement with a bank for an amount of up to $
15. On April 24, 2020, Capetanissa Maritime Corporation, Christos Maritime Corporation, Costis Maritime Corporation, Joyner Carriers S.A. and Rena Maritime Corporation, entered into a loan agreement with a bank for an amount of up to $
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
16. On May 29, 2020, Caravokyra Maritime Corporation, Costachille Maritime Corporation, Kalamata Shipping Corporation, Marina Maritime Corporation, Navarino Maritime Corporation and Merten Shipping Co., entered into a loan agreement with a bank for an amount of up to $
17. On June 11, 2020, Achilleas Maritime Corporation, Angistri Corporation, Fanakos Maritime Corporation, Fastsailing Maritime Co., Flow Shipping Co., Idris Shipping Co., Leroy Shipping Co., Lindner Shipping Co., Miko Shipping Co., Spedding Shipping Co., Takoulis Maritime Corporation and Timpson Shipping Co., entered into a loan agreement with a bank for an amount of up to $
18. On December 15, 2020, Kelsen Shipping Co. entered into a loan agreement with a bank for an amount of $
19. On November 10, 2020, Uriza Shipping S.A. entered into a loan agreement with a bank for an amount of $
20. On January 27, 2021, Berg Shipping Co. entered into a loan agreement with a bank for an amount of $
21. On March 16, 2021, Reddick Shipping Co. and Verandi Shipping Co. entered into a loan agreement with a bank for an amount of $
22. On March 18, 2021, Evantone Shipping Co. and Fortrose Shipping Co. entered into a loan agreement with a bank for an amount of $
23. On March 19, 2021, Ainsley Maritime Co. and Ambrose Maritime Co. entered into a loan agreement with a bank for an amount of $
24. On March 24, 2021, Hyde Maritime Co. and Skerrett Maritime Co. entered into a loan agreement with a bank for an amount of $
25. On March 29, 2021, Kemp Maritime Co. entered into a loan agreement with a bank for an amount of $
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
26. On March 29, 2021, Vernes Shipping Co. entered into a loan agreement with a bank for an amount of $
27. On June 1, 2021, Achilleas Maritime Corporation, Angistri Corporation, Fanakos Maritime Corporation, Fastsailing Maritime Co., Lindner Shipping Co., Miko Shipping Co., Saval Shipping Co., Spedding Shipping Co., Tanera Shipping Co., Timpson Shipping Co. and Wester Shipping Co., entered into a loan agreement with a bank for an amount of up to $
28. On June 7, 2021, Novara Shipping Co., Finney Shipping Co., Alford Shipping Co. and Nisbet Shipping Co. entered into a loan agreement with a bank for an amount of up to $
The term loans discussed above bear interest at LIBOR plus a spread and are secured by, inter alia, (a) first-priority mortgages over the financed vessels, (b) first priority assignments of all insurances and earnings of the mortgaged vessels and (c) corporate guarantees of Costamare or its subsidiaries, as the case may be. The loan agreements contain usual ship finance covenants, including restrictions as to changes in management and ownership of the vessels, as to additional indebtedness and as to further mortgaging of vessels, as well as minimum requirements regarding hull Value Maintenance Clauses in the range of
B. Other Financing Arrangements
1. In August 2018, the Company, through five wholly-owned subsidiaries, entered into five pre and post-delivery financing agreements with a financial institution for the five newbuild containerships (Note 7). The Company is required to repurchase each underlying vessel at the end of the lease and as such it has assessed that under ASC 606, the advances paid for the vessels under construction are not derecognized and the amounts received are accounted for as financing arrangements. The financing arrangements bear fixed interest and the interest expense incurred for the six-month period ended June 30, 2021 amounted to $
2. On November 12, 2018, the Company, as discussed in Notes 7 and 10 above, entered into a Share Purchase Agreement with York. As at that date, the Company assumed the financing agreements that the five ship-owning companies had entered into for their vessels along with the obligation to pay the remaining part of the consideration under the provisions of the Share Purchase Agreement within the next 18 months from the date of the transaction. According to the financing arrangements, the Company is required to repurchase each underlying vessel at the end of the lease and as such it has assessed that under ASC 606 and ASC 840 the assumed financial liability is accounted for as a financing arrangement. The amount payable to York has been accounted for under ASC 480-Distinguishing liabilities from equity and has been measured under ASC 835-30- Imputation of interest in accordance with the interest method. On May 12, 2020, the outstanding amount of the Company’s obligation to York was fully repaid. As at June 30, 2021, the aggregate outstanding amount of the five financing arrangements is repayable in various installments from July 2021 to October 2028 and a balloon payment for each of the five financing arrangements of $
As of June 30, 2021, the aggregate outstanding balance of the financing arrangements under (1) and (2) above was $
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
C. Unsecured Bond Loan (“Bond Loan”)
In May 2021, the Company, through its wholly owned subsidiary, Costamare Participations Plc (the “Issuer”), issued of unsecured bonds to investors (the “Bond Loan”) and listed the bonds on the Athens Exchange. The Bond Loan will mature in May 2026 and carries a coupon of
The Bond Loan can be called in part (pro-rata) or in full by Costamare Participations Plc on any coupon payment date, after the second anniversary and until 6 months prior to maturity. If the Bond Loan is redeemed (in part or in full) on i) the 5th and/or 6th coupon payment date, bondholders will receive a premium of
As of June 30, 2021, the outstanding balance of the bond amounted to $
The annual repayments under the Term Loans, Other Financing Arrangements and Unsecured bond after June 30, 2021, are in the aggregate as follows:
| Year ending December 31, | Amount | |||
| 2021 | $ | |||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| 2026 and thereafter | ||||
| Total | $ | |||
The interest rate of Costamare’s long-term debt as at December 31, 2020 and June 30, 2021, was in the range of
Total interest expense incurred on long-term debt including the effect of the hedging interest rate swaps and cross currency rate swap (discussed in Notes 17 and 19) and capitalized interest for the six-month periods ended June 30, 2020 and 2021, amounted to $
D. Deferred Financing Costs
The amounts of financing costs included in the loan balances and finance lease liabilities (Note 12) are as follows:
| Balance, January 1, 2021 | $ | |||
| Additions | ||||
| Amortization and write-off | ( | ) | ||
| Transfers and other movements | ||||
| Balance, June 30, 2021 | $ | |||
| Less: Current portion of financing costs | ( | ) | ||
| Financing costs, non-current portion | $ |
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
Financing costs represent legal fees and fees paid to the lenders for the conclusion of the Company’s financing. The amortization and write-off of loan financing costs is included in interest and finance costs in the accompanying consolidated statements of operations (Note 17).
12. Right-of-Use Assets and Finance Lease Liabilities:
Between January and April 2014, the Company took delivery of the newbuild vessels MSC Azov, MSC Ajaccio and MSC Amalfi. Upon the delivery of each vessel, the Company agreed with a financial institution to refinance the then outstanding balance of the loans relating to these vessels by entering into a -year sale and leaseback transaction for each vessel. The shipbuilding contracts were novated to the financial institution for an amount of $
On June 24, 2019, Adele Shipping Co. signed a loan agreement with a bank for the purpose of financing the acquisition cost of the MSC Azov (Note 11.A.11). On July 12, 2019, the Company drew down the amount of $
On July 6, 2016 and July 15, 2016, the Company agreed with a financial institution to refinance the then outstanding balance of the loans relating to the MSC Athos and the MSC Athens, by entering into a -year sale and leaseback transaction for each vessel. In May 2019, a supplemental agreement was signed to the existing sale and leaseback facility with the financial institution for an additional amount of up to $
On June 19, 2017, the Company entered into -year sale and leaseback transactions with a financial institution for the Leonidio and Kyparissia.
The sale and leaseback transactions were classified as finance leases. As the fair value of each vessel sold was in excess of its carrying amount, the difference between the sale proceeds and the carrying amount was classified as prepaid lease rentals or as unearned revenue. At January 1, 2019, as a result of the adoption of ASC 842 Leases, the balance of Prepaid lease rentals of $
The total value of the vessels, at the inception of the finance lease transactions, was $
The finance lease liabilities amounting to $
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
The annual lease payments under the finance leases after June 30, 2021, are in the aggregate as follows:
| Year ending December 31, | Amount | |||
| 2021 | $ | |||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| Total | $ | |||
| Less: Amount of interest (Leonidio and Kyparissia) | ( | ) | ||
| Total lease payments | $ | |||
| Less: Financing costs, net | ( | ) | ||
| Total lease payments, net | $ | |||
The total finance lease liabilities, net of related financing costs, are presented in the accompanying December 31, 2020 and June 30, 2021 consolidated balance sheet as follows:
| December 31, 2020 | June 30, 2021 | |||||||
| Finance lease liabilities – current | $ | $ | ||||||
| Less: current portion of financing costs | ( | ) | ( | ) | ||||
| Finance lease liabilities – non-current | ||||||||
| Less: non-current portion of financing costs | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
13. Accrued Charter Revenue, Current and Non-Current, Unearned Revenue, Current and Non-Current and Time Charter Assumed, Current and Non-Current:
(a) Accrued Charter Revenue, Current and Non-Current: The amounts presented as current and non-current accrued charter revenue in the accompanying consolidated balance sheets as of December 31, 2020 and June 30, 2021, reflect revenue earned, but not collected, resulting from charter agreements providing for varying annual charter rates over their terms, which were accounted for on a straight-line basis at their average rates.
As at December 31, 2020, the net accrued charter revenue, totaling ($
| Year ending December 31, | Amount | |||
| 2021 | $ | ( | ) | |
| 2022 | ( | ) | ||
| 2023 | ( | ) | ||
| 2024 | ( | ) | ||
| 2025 | ( | ) | ||
| 2026 and thereafter | ( | ) | ||
| Total | $ | ( | ) | |
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
(b) Unearned Revenue, Current and Non-Current: The amounts presented as current and non-current unearned revenue in the accompanying consolidated balance sheets as of December 31, 2020 and June 30, 2021, reflect: (a) cash received prior to the balance sheet date for which all criteria to recognize as revenue have not been met, (b) any unearned revenue resulting from charter agreements providing for varying annual charter rates over their term, which were accounted for on a straight-line basis at their average rate and (c) the unamortized balance of the Time charter assumed liability associated with the acquisition of four out of the five vessels discussed in Note 7 and 10, with charter parties assumed at values below their fair market value at the date of delivery of the vessels. During the six-month period ended June 30, 2021, the amortization of the liability amounted to $
| December 31, 2020 | June 30, 2021 | |||||||
| Hires collected in advance | $ | $ | ||||||
| Charter revenue resulting from varying charter rates | ||||||||
| Unamortized balance of charters assumed | ||||||||
| Total | $ | $ | ||||||
| Less current portion | ( | ) | ( | ) | ||||
| Non-current portion | $ | $ | ||||||
(c) Time Charter Assumed, Current and Non-Current: On November 12, 2018, the Company purchased from York its
14. Commitments and Contingencies:
(a) Time charters: As at June 30, 2021, the Company has entered into time charter arrangements for all of its container and dry bulk vessels in operation, including the two secondhand container vessels and seven dry bulk vessels that the Company had agreed to acquire during the six-month period ended June 30, 2021 (Note 7), with international operators, but excluding
| Year ending December 31, | Amount | |||
| 2021 | $ | |||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| 2026 and thereafter | ||||
| Total | $ | |||
(b) Capital Commitments: As of June 30, 2021, the Company had capital commitments of approximately $
(c) Debt guarantees with respect to entities formed under the Framework Deed: As of June 30, 2021, following the transaction discussed in Note 10, Costamare does not guarantee any loan with respect to entities formed under the Framework Deed. As of December 31, 2020 Costamare had agreed to guarantee
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
(d) Other: Various claims, suits, and complaints, including those involving government regulations, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the income of the Company’s vessels. Currently, management is not aware of any such claims not covered by insurance or contingent liabilities, which should be disclosed, or for which a provision has not been established in the accompanying consolidated financial statements.
The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Currently, management is not aware of any such claims or contingent liabilities not covered by insurance which should be disclosed or for which a provision should be established in the accompanying consolidated financial statements.
The Company is covered for liabilities associated with the vessels’ operations up to the customary limits provided by the Protection and Indemnity (“P&I”) Clubs, members of the International Group of P&I Clubs.
15. Common Stock and Additional Paid-In Capital:
(a) Common Stock: During each of the six-month periods ended June 30, 2020 and 2021, the Company issued
On July 6, 2016, the Company implemented the Plan. The Plan offers holders of Company common stock the opportunity to purchase additional shares by having their cash dividends automatically reinvested in the Company’s common stock. Participation in the Plan is optional, and shareholders who decide not to participate in the Plan will continue to receive cash dividends, as declared and paid in the usual manner. During the year ended December 31, 2020, the Company issued
On July 25, 2019,
As of June 30, 2021, the aggregate issued share capital was
(b) Preferred Stock: During the six-month period ended June 30, 2020, the Company repurchased and retired
(c) Additional Paid-in Capital: The amounts shown in the accompanying consolidated balance sheets, as additional paid-in capital include: (i) payments made by the stockholders at various dates to finance vessel acquisitions in excess of the amounts of bank loans obtained, (ii) the difference between the par value of the shares issued in the Initial Public Offering in November 2010 and the offerings in March 2012, October 2012, August 2013, January 2014, May 2015, December 2016, May 2017 and January 2018 and the net proceeds received from the issuance of such shares excluding the shares bought back during the year ended December 31, 2020, (iii) the difference between the par value and the fair value of the shares issued to Costamare Shipping and Costamare Services (Note 3) and (iv) the difference between the par value of the shares issued under the Plan.
(d) Dividends declared and / or paid: During the six-month period ended June 30, 2020, the Company declared and paid to its common stockholders $
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
During the six-month period ended June 30, 2020, the Company declared and paid to its holders of Series B Preferred Stock (i) $
During the six-month period ended June 30, 2020, the Company declared and paid to its holders of Series C Preferred Stock (i) $
During the six-month period ended June 30, 2020, the Company declared and paid to its holders of Series D Preferred Stock (i) $
During the six-month period ended June 30, 2020, the Company declared and paid to its holders of Series E Preferred Stock (i) $
16. Earnings / (losses) per share
All common shares issued are Costamare common stock and have equal rights to vote and participate in dividends. Profit or loss attributable to common equity holders is adjusted by the contractual amount of dividends on Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock that should be paid for the period and the gain which resulted from the repurchase of the preferred shares within the period. Dividends paid or accrued on Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock during the six-month periods ended June 30, 2020 and 2021, amounted to $
| For the six-month period ended June 30, | ||||||||
| 2020 | 2021 | |||||||
| Basic LPS | Basic EPS | |||||||
| Net income /(loss) | $ | ( | ) | $ | ||||
| Less: paid and accrued earnings allocated to Preferred Stock | ( | ) | ( | ) | ||||
| Add: gain from retirement of Preferred Stock | ||||||||
| Net income / (loss) available to common stockholders | ( | ) | ||||||
| Weighted average number of common shares, basic and diluted | ||||||||
| Earnings / (losses) per common share, basic and diluted | $ | ( | ) | $ | ||||
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
17. Interest and Finance Costs:
The interest and finance costs in the accompanying consolidated statements of operations are as follows:
| For the six-month period ended June 30, | ||||||||
| 2020 | 2021 | |||||||
| Interest expense | $ | $ | ||||||
| Interest capitalized | ( | ) | ( | ) | ||||
| Swap effect | ||||||||
| Amortization and write-off of financing costs | ||||||||
| Bank charges and other financing costs | ||||||||
| Total | $ | $ | ||||||
18. Taxes:
Under the laws of the countries of incorporation for the vessel-owning companies and/or of the countries of registration of the vessels, the companies are not subject to tax on international shipping income; however, they are subject to registration and tonnage taxes, which are included in Vessel operating expenses in the accompanying consolidated statements of operations.
The vessel-owning companies with vessels that have called on the United States during the relevant year of operation are obliged to file tax returns with the Internal Revenue Service. The applicable tax is
19. Derivatives:
(a) Interest rate and Cross-currency rate swaps that meet the criteria for hedge accounting: The Company manages its exposure to floating interest rates by entering into interest rate and cross-currency rate swap agreements with varying start and maturity dates.
These interest rate swaps are designed to hedge the variability of interest cash flows arising from floating rate debt, attributable to movements in three-month or six-month USD LIBOR. According to the Company’s Risk Management Accounting Policy, after putting in place the formal documentation at the inception of the hedging relationship, as required by ASC 815, following the adoption of ASU 2017-12, these interest rate swaps qualified for hedge accounting. The change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in “Other Comprehensive Income” and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in Interest and finance cost. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in Loss on derivative instruments.
During the six-month period ended June 30, 2021, the Company entered into three interest rate swap agreements with an aggregate notional amount of $
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
During the six-month period ended June 30, 2021, the Company entered into two cross-currency swap agreements which converted the Company’s variability of the interest and principal payments in Euro into USD functional currency cash flows with respect to the Unsecured Bond (Note 11(c)), in order to hedge its exposure to fluctuations deriving from Euro. The two cross-currency swaps are designated as cash flow hedging Instruments for accounting purposes. As of June 30, 2021, the notional amount of the two CCSs were $
| Effective date | Termination date | Notional amount (Non-amortizing) on effective date in Euro | Notional amount (Non-amortizing) on effective date in USD | Fixed rate (Costamare receives in Euro) | Fixed rate (Costamare pays in USD) | Fair value June 30, 2021 (in USD) | ||||||||||||||||
| 21/5/2021 | 21/11/2025 | € | $ | % | % | $ | ( | ) | ||||||||||||||
| 25/5/2021 | 21/11/2025 | € | $ | % | % | $ | ( | ) | ||||||||||||||
| Total fair value | $ | ( | ) | |||||||||||||||||||
During the year ended December 31, 2020, the Company entered into five interest rate swap agreements with an aggregate notional amount of $
At December 31, 2020 the Company had interest rate swap agreements with an outstanding notional amount of $
The estimated net amount that is expected to be reclassified within the next 12 months from Accumulated Other Comprehensive Income / (Loss) to earnings in respect of the settlements on interest rate swaps amounts to $
(b) Interest rate swaps that do not meet the criteria for hedge accounting:
During the year ended December 31, 2020, the Company entered into five interest rate swap agreements with an aggregate notional amount of $
(c) Foreign currency agreements: As of June 30, 2021, the Company was engaged in
As of December 31, 2020, the Company was engaged in
The total change of forward contracts fair value for the six-month period ended June 30, 2021, was a loss of $
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
| The Effect of Derivative Instruments for the six-month periods ended | ||||||||
| June 30, 2020 and 2021 | ||||||||
| Derivatives in ASC 815 Cash Flow Hedging Relationships | ||||||||
| Amount of Gain / (Loss) Recognized in Accumulated OCI on Derivative | ||||||||
| 2020 | 2021 | |||||||
| Interest rate and cross-currency rate swaps | $ | ( | ) | $ | ( | ) | ||
| Reclassification to Interest and finance costs | ||||||||
| Total | $ | ( | ) | $ | ( | ) | ||
| Derivatives Not Designated as Hedging Instruments under ASC 815 | |||||||||
| Location of Gain / (Loss) Recognized in Income on Derivative | Amount of Gain / (Loss) Recognized in Income on Derivative | ||||||||
| 2020 | 2021 | ||||||||
| Non-hedging interest rate swaps | Loss on derivative instruments, net | $ | ( | ) | $ | ( | ) | ||
| Forward contracts | Loss on derivative instruments, net | ( | ) | ||||||
| Total | $ | ( | ) | $ | ( | ) | |||
The realized loss on non-hedging interest rate swaps included in “Loss on derivative instruments, net” amounted to for the six-month periods ended June 30, 2020 and 2021, respectively.
20. Financial Instruments:
(a) Interest rate risk: The Company’s interest rates and loan repayment terms are described in Note 11.
(b) Concentration of credit risk: Financial instruments which potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable, net (included in current and non-current assets), equity method investments, equity securities, debt securities and derivative contracts (interest rate swaps and foreign currency contracts). The Company places its cash and cash equivalents, consisting mostly of deposits, with established financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company is exposed to credit risk in the event of non-performance by the counterparties to its derivative instruments; however, the Company limits its exposure by diversifying among counterparties with high credit ratings. The Company limits its credit risk with accounts receivable and debt securities by performing ongoing credit evaluations of its customers’ and investees’ financial condition, receives charter hires in advance and generally does not require collateral for its accounts receivable.
(c) Fair value: The carrying amounts reflected in the accompanying consolidated balance sheet of financial assets, except debt securities, and accounts payable approximate their respective fair values due to the short maturity of these instruments. The fair value of long-term bank loans with variable interest rates approximates the recorded values, generally due to their variable interest rates. The fair value of other financing arrangements with fixed interest rates discussed in Note 11.B and the term loan with fixed interest rates discussed in Note 11.A.24, the fair value of the interest rate swap agreements, the cross-currency rate swap agreements and the foreign currency agreements discussed in Note 19 are determined through Level 2 of the fair value hierarchy as defined in FASB guidance for Fair Value Measurements and are derived principally from publicly available market data and in case there is no such data available, interest rates, yield curves and other items that allow value to be determined.
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
The fair value of the Company’s other financing arrangements with fixed interest rates discussed in Note 11.B and the term loan with fixed interest rates discussed in Note 11.A.24, approximate the recorded values and are estimated based on the future swap curves currently available and remaining maturities as well as taking into account the Company’s creditworthiness.
The fair value of the interest rate swap and cross-currency rate swap agreements discussed in Note 19(a) and (b) equates to the amount that would be paid or received by the Company to cancel the agreements. As at December 31, 2020 and June 30, 2021, the fair value of these swaps in aggregate amounted to a liability of $
The fair value of the Bond Loan discussed in Note 11.C determined through Level 1 of the fair value hierarchy as at June 30, 2021, amounted to $
The fair value of the forward contracts discussed in Note 19(c) determined through Level 2 of the fair value hierarchy as at December 31, 2020 and June 30, 2021, amounted to an asset of $
The following tables summarize the hierarchy for determining and disclosing the fair value of assets and liabilities by valuation technique on a recurring basis as of the valuation date:
| December 31, 2020 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | |||||||||||||
| Recurring measurements: | ||||||||||||||||
| Forward contracts-asset position | $ | $ | $ | $ | ||||||||||||
| Interest rate swaps-liability position | ( | ) | ( | ) | ||||||||||||
| Total | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| June 30, 2021 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | |||||||||||||
| Recurring measurements: | ||||||||||||||||
| Forward contracts- liability position | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Interest rate swaps-liability position | ( | ) | ( | ) | ||||||||||||
| Interest rate swaps-asset position | ||||||||||||||||
| Cross-currency rate swaps-liability position | ( | ) | ( | ) | ||||||||||||
| Investment in equity securities-asset position | ||||||||||||||||
| Total | $ | $ | $ | ( | ) | $ | ||||||||||
Assets measured at fair value on a non-recurring basis:
During the year ended December 31, 2020,
21. Comprehensive Income:
During the six-month period ended June 30, 2020, Other comprehensive income decreased with net losses of $
COSTAMARE INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020 and 2021
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
During the six-month period ended June 30, 2021, Other comprehensive income decreased with net losses of $
As at June 30, 2020 and 2021, Comprehensive income / (loss) amounted to a loss of $
22. Subsequent Events:
| a. | Declaration and payment of dividends (common stock): On |
| b. | Declaration and payment of dividends (preferred stock Series B, Series C, Series D and Series E): On |
| c. | New loan facilities: (i) In July 2021, the Company entered into a revolving loan facility agreement with a bank for an amount of up to $ |
| d. | Vessels acquisitions: In July 2021, the Company entered into Memorandum of Agreements to acquire eight secondhand dry bulk vessels (Atlantic Merida (tbr Merida), Atlantic Progress (tbr Progress), Darya Lakshmi (tbr Bermondi), Ming Yuan (tbr Miner), Bulk Uruguay (tbr Uruguay), Bulk Curacao (tbr Curacao), MS Charm (tbr Charm) and Great Resource (tbr Resource)) with a capacity of | |
| e. | Vessels deliveries: In July 2021 the Company took delivery (i) of eight secondhand dry bulk vessels (Sauvan, Seabird, Eracle, Peace, Pride, Acuity, Manzanillo and Alliance) pursuant to the SPA with Longshaw (Note 3(d) and Note 7) with an aggregate DWT capacity of | |
| f. | Vessels sale: On July 28, 2021, the Company agreed to sell the container vessels ZIM Shanghai and ZIM New York, with an aggregate TEU capacity of |
Exhibit 99.2
|
COSTAMARE INC.
- and -
KONSTANTINOS KONSTANTAKOPOULOS
____________________
FIRST AMENDED AND RESTATED RESTRICTIVE COVENANT AGREEMENT
____________________
|
THIS FIRST AMENDED AND RESTATED RESTRICTIVE COVENANT AGREEMENT (this “Agreement”) is made on July 1, 2021,
BY AND BETWEEN:
(1) COSTAMARE INC., a Marshall Islands corporation (the “Company”); and
(2) KONSTANTINOS KONSTANTAKOPOULOS (“KK”).
WHEREAS, the Company and KK previously entered into that certain Restrictive Covenant Agreement, dated as of November 3, 2010 (the “Original RCA”), pursuant to which the activities of KK with respect to the Container Vessel Business (as defined below), because of his capacity as a director or officer of the Company, were restricted, on the terms and conditions set out in the Original RCA, to prohibit certain activities that may compete with the Container Vessel Business of the Company.
WHEREAS, the Company and its Board of Directors have determined it is in the best interest of the Company and its shareholders to enter into the Dry Bulk Business (as defined below) and potentially acquire Dry Bulk Vessels (as defined below).
WHEREAS, the Company wishes to limit the activities of KK in the Dry Bulk Business and the Container Vessel Business, because of his capacity as a director or officer of the Company, on the terms and conditions set out in this Agreement to prohibit certain activities that may compete with the business of the Company.
NOW, THEREFORE, in consideration of the terms and conditions set forth below and other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereto agree to amend and restate the Original RCA in its entirety as follows:
ARTICLE I
INTERPRETATION
SECTION 1.1. In this Agreement, unless the context otherwise requires:
|
(a) |
“Affirmative Response” shall have the meaning set forth in Section 4.1(b). |
|
|
(b) |
“Agreement” shall have the meaning set forth in the preamble. |
|
|
(c) |
“Board of Directors” means the board of directors of the Company as the same may be constituted from time to time. |
|
(d) |
“Break Up Costs” means the aggregate amount of any and all costs including any taxes, registration fees, administrative expenses, severance costs, and other similar costs and expenses that would be required to transfer Covered Vessels, any related portion of a Covered Vessel Business that also owns non-Covered Vessel assets to the Company separately from its other assets, in each case as the case may be. |
|
|
(e) |
“Business Day” means a day (excluding Saturdays and Sundays) on which banks are open for business in Monaco, Athens, Greece and New York, New York. |
|
|
(f) |
“Company” shall have the meaning set forth in the preamble. |
|
|
(g) |
“Competitive Activities” shall have the meaning set forth in Section 3.1. |
|
|
(h) |
“Conflicts Committee” shall have the meaning set forth in Section 4.1(b). |
|
|
(i) |
“Container Vessel” means any ocean-going vessel (whether in its construction phase or operational) that is intended to be used primarily to transport containerized cargoes. |
|
|
(j) |
“Container Vessel Business” means any business involved in the ownership of Container Vessels. |
|
|
(k) |
“Covered Opportunity” shall have the meaning set forth in Section 4.1(a). |
|
|
(l) |
“Covered Vessel” means a Container Vessel or a Dry Bulk Vessel. |
|
|
(m) |
“Covered Vessel Business” means any business involved in the ownership of Covered Vessels. |
|
|
(n) |
“Dry Bulk Vessel” means any ocean-going vessel (whether in its construction phase or operational) that is intended to be used primarily to transport large volumes of cargo in bulk cargo form. |
|
|
(o) |
“Dry Bulk Vessel Business” means any business involved in the ownership of Dry Bulk Vessels. |
|
|
(p) |
“Effective Date” means the date of this Agreement set forth in the preamble. |
|
|
(q) |
“Independent Directors” means those members of the Board of Directors that qualify as independent directors within the meaning of Rule 10A-3 promulgated under the U.S. Securities Exchange Act of 1934, as amended and the listing criteria of the New York Stock Exchange. |
|
(r) |
“KK” shall have the meaning set forth in the preamble. |
|
|
(s) |
“Management Agreement” means (i) the Amended and Restated Framework Agreement, dated June 28, 2021, between the Company and Costamare Shipping Company S.A. and (ii) the Amended and Restated Services Agreement among Costamare Shipping Services Ltd. and the Company’s vessel-owning subsidiaries, dated June 28, 2021. |
|
|
(t) |
“Negative Response” shall have the meaning set forth in Section 4.1(b). |
|
|
(u) |
“Restricted Period” shall mean the period commencing on the Effective Date and ending six months following the later of (i) the termination of KK’s service with the Company as a director and (ii) the termination of KK’s service with the Company as an officer. |
SECTION 1.2. The headings of this Agreement are for ease of reference and do not limit or otherwise affect the meaning hereof.
SECTION 1.3. All the terms of this Agreement, whether or not so expressed, shall be binding upon the parties hereto and their respective successors and assigns.
SECTION 1.4. Unless the context otherwise requires, words in the singular include the plural and vice versa.
ARTICLE II
PRIORITY CHARTERING
SECTION 2.1. KK acknowledges and agrees that during the Restricted Period, if a Covered Vessel owned, directly or indirectly, by the Company meets the criteria for a charter being made available to a Covered Vessel majority owned, directly or indirectly, by KK, the Company’s Covered Vessel shall be offered such charter and the Company shall have 48 hours from such offer being received to accept such offer, failing which such charter shall be then offered to the relevant Covered Vessel.
ARTICLE III
NON-COMPETITION
SECTION 3.1. During the Restricted Period, KK shall not, subject to Section 3.2 hereof, directly or indirectly, engage in (a) the ownership of any Covered Vessel other than through the Company or (b) the acquisition of any shareholding in any Container Vessel Business or Dry Bulk Vessel Business other than through the Company (together, (a) and (b) are defined as the “Competitive Activities”).
SECTION 3.2. Notwithstanding the foregoing, KK may engage in Competitive Activities in the following circumstances:
|
(a) |
with respect to the Container Vessels and the Dry Bulk Vessels listed in Appendix A hereto; |
|
|
(b) |
with respect to any Covered Opportunity (as defined below), in compliance with the right of first refusal procedures set forth in Section 4.1; |
|
|
(c) |
passive ownership of up to 19.99% of the outstanding voting securities of any publicly traded company which is a Container Vessel Business; and |
|
|
(d) |
passive ownership of up to 19.99% of the outstanding voting securities of any publicly traded company which is a Dry Bulk Vessel Business. |
ARTICLE IV
RIGHT OF FIRST REFUSAL PROCEDURES
SECTION 4.1. Set forth below are the right of first refusal procedures applicable to a Covered Opportunity.
|
(a) |
Prior to finalizing any contract to acquire or construct any Covered Vessel or to acquire control of any Covered Vessel Business (any of the foregoing a “Covered Opportunity”), KK shall (i) deliver a notice to the Company advising it of the details of the Covered Opportunity, including its terms and conditions and (ii) offer to the Company, which offer may be subject to the finalization of the terms and conditions and the closing of any such Covered Opportunity, (1) such Covered Opportunity on such terms and conditions or (2) in the case of a Covered Vessel Business that owns non-Covered Vessel assets, the Covered Vessels and such related portion of the business for fair market value plus any Break Up Costs. |
|
|
(b) |
Within three Business Days after receipt of the notice referred to in Section 4.1(a), a committee composed of Independent Directors (the “Conflicts Committee”) shall deliver a notice to KK that the Company (i) intends to pursue the Covered Opportunity (an “Affirmative Response”) or (ii) declines to pursue the Covered Opportunity and consents to KK pursuing the Covered Opportunity within 180 days on terms and conditions materially not more favorable than those offered to the Company (a “Negative Response”). |
|
(c) |
In the event of an Affirmative Response, the Company and KK shall negotiate in good faith the terms and conditions of an agreement for the consummation of the Covered Opportunity based on the terms and conditions set forth in the notice referred to in Section 4.1(a). |
|
|
(d) |
In the event of a Negative Response or in the event the Company and KK are unable to agree on the terms and conditions of an agreement for the consummation of the Covered Opportunity, then KK may consummate the Covered Opportunity within 180 days after date of the Negative Response on terms and conditions materially not more favorable than those offered to the Company. If such Covered Opportunity is not consummated within 180 days after the date of the Negative Response then KK shall not thereafter engage in such Covered Opportunity without first offering it to the Company in the manner provided above. |
SECTION 4.2. KK and the Company acknowledge that all potential transfers pursuant to this Article IV are subject to obtaining any and all written consents of governmental authorities and non-affiliated third parties.
ARTICLE V
NOTICES
SECTION 5.1. All notices, consents and other communications hereunder, or necessary to exercise any rights granted hereunder, shall be in writing, sent either by prepaid registered mail or telefax, and will be validly given if delivered on a Business Day to a party at its respective address set forth below:
Costamare Inc.
7 rue du Gabian
MC 98000 Monaco
Attention: General Counsel
Telefax: +377 93 25 09 42
Konstantinos Konstantakopoulos
c/o Costamare Shipping Company S.A.
60 Zephyrou Street & Syngrou Avenue
Athens, Greece
Telefax: +30 210 9409081
ARTICLE VI
APPLICABLE LAW AND JURISDICTION
SECTION 6.1. This Agreement and any non-contractual obligations connected with it shall be governed by, and construed in accordance with, the laws of England.
ARTICLE VII
ARBITRATION
SECTION 7.1. Any dispute arising out of or in connection with this Agreement and any non-contractual obligations connected with it 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 Article VII. 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.
SECTION 7.2. The reference shall be to three arbitrators. One arbitrator is to be appointed by each party and a third arbitrator shall be appointed by the two arbitrators so appointed, failing which the third arbitrator shall be appointed by the President of the LMAA at the time. 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. When all three arbitrators have been appointed, their decision or that of any two of them shall be final and binding on both parties. For the purpose of enforcing any award, this Agreement may be made a rule of the court. Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. This Agreement constitutes the sole understanding and agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements or understandings, written or oral, with respect thereto, with the exception of the Management Agreements. This Agreement may not be amended, waived or discharged except by an instrument in writing executed by the party against whom enforcement of such amendment, waiver or discharge is sought.
SECTION 8.2. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement is adjudicated to be invalid or unenforceable, such provision will be deemed amended to delete therefrom the portion thus adjudicated as invalid or unenforceable, such deletion to apply only with respect to the operation of such provision in the particular jurisdiction in which such adjudication is made.
SECTION 8.3. This Agreement may be executed in one or more written counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.
[Remainder of page intentionally left blank.]
IN WITNESS whereof the undersigned have executed this Agreement as of the date first above written.
| COSTAMARE INC. | |
| By: /s/ Gregory Zikos | |
| Name: Gregory Zikos | |
| Title: Chief Financial Officer, Director | |
| KONSTANTINOS KONSTANTAKOPOULOS | |
| /s/ Konstantinos V. Konstantakopoulos |
[Signature Page to the Konstantinos Konstantakopoulos First Amended and Restated Restrictive Covenant Agreement]
Exhibit 99.3
|
THE COMPANIES SET OUT IN SCHEDULE A
- and –
COSTAMARE SHIPPING SERVICES LTD.
SERVICES AGREEMENT
|
TABLE OF CONTENTS
| Page | |
| ARTICLE I INTERPRETATION | 1 |
| ARTICLE II APPOINTMENT | 6 |
| ARTICLE III THE PARTY SUBSIDIARIES’ GENERAL OBLIGATIONS | 7 |
| ARTICLE IV THE SERVICE PROVIDER’S GENERAL OBLIGATIONS | 8 |
| ARTICLE V REPRESENTATION AND OTHER ADMINISTRATIVE SERVICES | 9 |
| ARTICLE VI - INTENTIONALLY OMITTED | 11 |
| ARTICLE VII BROKING AND OTHER COMMERCIAL SERVICES | 11 |
| ARTICLE VIII SERVICEs FEES AND EXPENSES | 12 |
| ARTICLE IX CORPORATE PLANNING AND EXPENSES | 16 |
| ARTICLE X LIABILITY AND INDEMNITY | 17 |
| ARTICLE XI RIGHTS OF THE SERVICE PROVIDER AND RESTRICTIONS ON THE SERVICE PROVIDER’S AUTHORITY | 19 |
| ARTICLE XII TERMINATION OF THIS AGREEMENT | 20 |
| ARTICLE XIII ADDITION AND RESIGNATION OF SUBSIDIARIES | 23 |
| ARTICLE XIV NOTICES | 23 |
| ARTICLE XV APPLICABLE LAW | 24 |
| ARTICLE XVI ARBITRATION | 24 |
| ARTICLE XVII MISCELLANEOUS | 25 |
| SCHEDULE A SUBSIDIARIES | 27 |
| SCHEDULE B FORM OF ACCESSION LETTER | 30 |
| SCHEDULE C FORM OF RESIGNATION LETTER | 31 |
THIS SERVICES AGREEMENT (this “Agreement”) is made on the 2nd day of November 2015 as amended and restated on 28 June 2021, BY AND BETWEEN:
(1) THE COMPANIES SET OUT IN SCHEDULE A (the “Original Party Subsidiaries” and each an “Original Party Subsidiary”); and
(2) COSTAMARE SHIPPING SERVICES LTD., a corporation organized and existing under the laws of the Republic of the Marshall Islands (the “Service Provider”).
WHEREAS:
(A) Each Original Party Subsidiary owns one Ship (as defined below) and is a wholly-owned (direct or indirect) Subsidiary of Costamare Inc., a Marshall Islands corporation (the “Parent”).
(B) The Service Provider has the benefit of experience in the representation of shipowning companies, the offering of charter broking, insurance broking and sale and purchase broking services and the offering of certain other services.
(C) Each Original Party Subsidiary and the Service Provider desire to adopt this Agreement pursuant to which the Service Provider shall represent each Original Party Subsidiary in its dealings with third parties and provide commercial, broking, administrative and certain other services to each such Original Party Subsidiary as specified herein.
(D) The amendments effected by means of the restatement of this Agreement on 28 June 2021 are deemed to have taken effect on 15 June 2021.
NOW, THEREFORE, THE PARTIES HEREBY AGREE:
ARTICLE I
INTERPRETATION
SECTION 1.1. In this Agreement, unless the context otherwise requires:
“Accession Letter” means a letter substantially in the form set out in Schedule B.
“Additional Party Subsidiary” shall have the meaning set forth in Section 13.1.
“Affiliates” means, with respect to any person as to any particular date, any other persons that directly or indirectly, through one or more intermediaries, are Controlled by, Control or are under common Control with the person in question, and Affiliates means any of them.
“Agreement” shall have the meaning set forth in the preamble.
“Annual Period” shall have the meaning set forth in Section 8.4.
“Applicable Fraction” means, in relation to a Payment Date, a fraction having as numerator number 1 and as denominator a number equal to the number of the Party Subsidiaries as of such Payment Date.
“Beneficial Owner” has the meaning set forth in Rule 13d-3 under the Exchange Act. For purposes of this definition, such person or group shall be deemed to Beneficially Own any outstanding voting securities of a company held by any other company that is Controlled by such person or group. The term “Beneficially Own” and similar capitalized terms shall have analogous meanings.
“Bluenet Entity” means each of:
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(a) |
Blue Net Chartering GmbH & Co. KG of Elbchaussee 277, 22605 Hamburg, Germany; and |
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(b) |
Blue Net Chartering Asia Pte. Ltd of 3 Pickering Street, #02-17ll8 Nankin Row, Singapore 048660. |
“Board of Directors” means the board of directors of the Parent as the same may be constituted from time to time.
“Business Days” means a day (excluding Saturdays and Sundays) on which banks are open for business in Monaco, Athens, Greece, and New York, New York, USA.
“Change in Control of the Service Provider” means (a) a sale of all or substantially all of the assets or property of the Service Provider necessary for the performance of the Service Provider’s services under this Agreement, (b) a sale of the Service Provider’s shares that would result in Konstantakopoulos Entities Beneficially Owning, directly or indirectly, less than 50.1% of the total voting power of the outstanding voting securities of the Service Provider or (c) a merger, consolidation or similar transaction, that would result in Konstantakopoulos Entities Beneficially Owning, directly or indirectly, less than 50.1% of the total voting power of the outstanding voting securities of the resulting entity following such transaction.
“Change in Control of the Parent” means the occurrence of any of the following events: (a) if any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act or any successor provisions to either of the foregoing), including a group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(10) under the Exchange Act (other than one or more Konstantakopoulos Entities) (collectively, an “Acquiring Person”) becomes the Beneficial Owner, directly or indirectly, of 40% or more of the total voting power of the outstanding voting securities of the Parent, which voting power represents a higher percentage than that of the Konstantakopoulos Entities, collectively; or (b) the approval by the shareholders of the Parent of a proposed merger, consolidation or similar transaction, as a result of which any Acquiring Person becomes the Beneficial Owner, directly or indirectly, of 40% or more of the total voting power of the outstanding voting securities of the resulting entity following such transaction, which voting power represents a higher percentage than that of the Konstantakopoulos Entities, collectively; or (c) a change in directors after which a majority of the members of the Board of Directors are not Continuing Directors.
“Continuing Directors” means, as of any date of determination, any member of the Board of Directors who (i) was a member of the Board of Directors immediately after 2 November 2015, or (ii) was nominated for election or elected to the Board of Directors with the approval of a majority of the directors then still in office or who were either directors immediately after 2 November 2015 or whose nomination or election was previously so approved.
“Control” or “Controlled” means, with respect to any person, the right to elect or appoint, directly or indirectly, a majority of the directors of such person or a majority of the persons who have the right, including any contractual right, to manage and direct the business, affairs and operations of such person or the possession of the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, by contract or otherwise.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Force Majeure” shall have the meaning set forth in Section 10.1.
“Initial Term” shall have the meaning set forth in Section 12.1.
“Konstantakopoulos Entities” means:
(a) Konstantinos Konstantakopoulos, Christos Konstantakopoulos, Achillefs Konstantakopoulos or Vassileios Konstantakopoulos;
(b) any spouse or lineal descendant of any of the individuals set out in paragraph (a) above;
(c) any person Controlled by, or under common Control with, any such individual or combination of such individuals as set out in paragraphs (a) and (b) above; and
(d) any trust or foundation where any of the individuals as set out in paragraphs (a) and (b) above or any person as set out in paragraph (c) is, in each case, a beneficiary.
“Newbuild” means a new vessel to be or which has just been constructed, or is under construction, pursuant to a shipbuilding contract or other related agreement entered into by the relevant Party Subsidiary.
“Party Subsidiaries” means, at any time, the Original Party Subsidiaries and the Additional Party Subsidiaries, without reference to any of the Original Party Subsidiaries or Additional Party Subsidiaries that has ceased to be a Party Subsidiary in accordance with Section 13.2 and “Party Subsidiary” shall be construed accordingly.
“Payment Date” means the first Business Day falling immediately before each of 30 March, 30 June, 30 September and 30 December of each calendar year.
“Registration Rights Agreement” means the amended and restated registration rights agreement made or (as the context may require) to be made between the Parent and the stockholders named therein.
“Related Service Provider” means any Konstantakopoulos Entity or any Affiliate thereof, in each case, appointed as Sub-Provider in accordance with the terms of this Agreement.
“Resignation Letter” means a letter substantially in the form set out in Schedule C.
“Resigning Party Subsidiary” shall have meaning set forth in Section 13.2.
“Service Provider” shall have the meaning set forth in the preamble.
“Service Provider Related Parties” shall have the meaning set forth in Section 10.2.
“Services” shall have the meaning set forth in Section 2.2.
“Services Fee” shall have the meaning set forth in Section 8.1.
“Ship” means any ocean-going vessel (whether in its construction phase or operational) that is intended to be used primarily to transport cargoes or goods (in dry, liquid, gas or in bulk or containerized or in any other form whatsoever).
“Sub-Provider” shall have the meaning set forth in Section 2.3.
“Subsequent Term” shall have the meaning set forth in Section 12.1.
“Subsidiary” means a subsidiary within the meaning of section 1159 of the Companies Act 2006.
“Vessel” means any Ship owned or operated by a Party Subsidiary and “Vessels” means together all or any of them.
“V.Ships” means V.Ships Greece Ltd, Par-La Ville Place 14, Par-La Ville Road, Hamilton HM08, Bermuda and includes its successors in title and permitted assignees.
SECTION 1.2. The headings of this Agreement are for ease of reference and do not limit or otherwise affect the meaning hereof.
SECTION 1.3. All the terms of this Agreement, whether so expressed or not, shall be binding upon the parties hereto and their respective successors and assigns.
SECTION 1.4. Unless otherwise specified, all references to money refer to the legal currency of the United States of America.
SECTION 1.5. Unless the context otherwise requires, words in the singular include the plural and vice versa.
SECTION 1.6. The words “include”, “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation” and shall not be construed to limit any general statement which it follows to the specific or similar items or matters immediately following it.
SECTION 1.7. Any reference to “person” includes an individual, body corporate, limited liability company, partnership, joint venture, cooperative, trust or unincorporated organization, association, trustee, domestic or foreign government or any agency or instrumentality thereof, or any other entity recognized by law.
SECTION 1.8. Any reference to an enactment shall be deemed to include reference to such enactment as re-enacted, amended or extended.
SECTION 1.9. Any reference to (or to any specified provision of) this Agreement or any other document shall be construed as reference to this Agreement, that provision or that document as in force for the time being and as amended in accordance with the terms thereof, or, as the case may be, with the agreement of the relevant parties.
SECTION 1.10. Any reference to clauses, appendices and schedules shall be construed as reference to clauses of, appendices to and schedules to this Agreement and references to this Agreement includes its appendices and schedules.
ARTICLE II
APPOINTMENT
SECTION 2.1. The Service Provider is hereby appointed by each Party Subsidiary as its:
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(a) |
representative; |
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|
(b) |
crewing manager; |
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|
(c) |
sale and purchase broker (including newbuildings); |
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(d) |
chartering broker; |
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|
(e) |
marine insurance broker and advisor; and |
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|
(f) |
average adjuster advisor, |
and hereby accepts such appointment on the terms and conditions of this Agreement.
SECTION 2.2. The Service Provider agrees to provide the services specified in Articles V, VI and VII of this Agreement (collectively the “Services”). The Party Subsidiaries and the Service Provider each hereby agree that in the performance of this Agreement, the Service Provider is acting solely on behalf of, as agent of and for the account of, the relevant Party Subsidiary. The Service Provider may advise persons with whom it deals on behalf of any Party Subsidiary that it is conducting such business for and on behalf of, such Party Subsidiary.
SECTION 2.3. The Service Provider may upon notice to the Party Subsidiaries appoint any person (a “Sub-Provider”) at any time throughout the duration of this Agreement to discharge any of the Service Provider’s duties under this Agreement, provided that if such person is not a Related Service Provider or V.Ships, the Service Provider shall obtain the written consent of the Party Subsidiaries prior to such appointment (such consent shall not be unreasonably withheld or delayed). The Service Provider shall appoint a Sub-Provider either by entering into an agreement (such agreement to be on terms to be agreed between the parties thereto and only in respect of such of the Services that the Service Provider wishes such Sub-Provider to discharge) directly with such Sub-Provider (for the avoidance of doubt, unless otherwise agreed in writing, no Party Subsidiary shall have any responsibility for any fees or costs incurred under any such agreement) or by directing such Sub-Provider to enter into an agreement directly with the relevant Party Subsidiary (such agreement to be on terms to be agreed between the parties thereto and only in respect of such of the Services that the Service Provider wishes such Sub-Provider to discharge). Upon request, each Party Subsidiary shall provide written confirmation to the Service Provider or, as the case may be, a Sub-Provider, that such Party Subsidiary and its Vessel are being provided certain Services by the Service Provider or, as the case may be, the relevant Sub-Provider.
SECTION 2.4. The Service Provider’s power to delegate performance of any provision of this Agreement, including delegation by directing a Sub-Provider to enter into an agreement directly with a Party Subsidiary in accordance with Section 2.3, shall not limit the Service Provider’s liability to the Party Subsidiaries to perform this Agreement with the intention that the Service Provider shall remain responsible to the Party Subsidiaries for the due and timely performance of all duties and responsibilities of the Service Provider hereunder, PROVIDED HOWEVER, that to the extent that any Sub-Provider has performed any such duty, the Service Provider shall not be under any obligation to perform again the same duty.
ARTICLE III
THE PARTY SUBSIDIARIES’ GENERAL OBLIGATIONS
SECTION 3.1. The Party Subsidiaries shall notify the Service Provider as soon as possible of any purchase of any vessel (whether the same is a second-hand vessel or a Newbuild), the delivery of any Newbuild from the relevant builder or intermediate seller to the relevant Party Subsidiary, the sale of any Vessel, the purchase or creation of any direct or indirect subsidiary of the Parent or the sale or divestiture of any Party Subsidiary.
SECTION 3.2. The Party Subsidiaries shall promptly amend Schedule A to be reflective of any Resigning Party Subsidiary, Automatic Resigning Party Subsidiary or Additional Party Subsidiary PROVIDED HOWEVER that failure to do so shall not affect which Subsidiary of the Parent is actually a Party Subsidiary at any given time.
SECTION 3.3. The Party Subsidiaries shall pay punctually all sums due to the Service Provider under this Agreement in accordance with the terms hereof.
SECTION 3.4. Each Party Subsidiary shall procure that any Subsidiary of the Parent which owns or operates a Ship shall become party to this Agreement. Each Party Subsidiary agrees that, save for any Konstantakopoulos Entity or any Affiliate thereof, or either Bluenet Entity it has engaged the Service Provider or any Sub-Provider to provide the Services on an exclusive basis and, without receiving the prior written approval of the Service Provider or before it has lawfully terminated this Agreement in accordance with its terms, it will not engage any other entity to provide any of the Services (unless such engagement only becomes effective after the termination of this Agreement).
ARTICLE IV
THE SERVICE PROVIDER’S GENERAL OBLIGATIONS
SECTION 4.1. In the exercise of its duties hereunder, the Service Provider shall act in accordance with the reasonable policies, guidelines and instructions from time to time communicated to it in writing by any Party Subsidiary.
SECTION 4.2. For each Party Subsidiary or its Vessel or, as the case may be, Newbuild, the Service Provider shall act and do all and/or any of the acts or things described in this Agreement applicable to each such Party Subsidiary, Vessel or Newbuild in the name and/or on behalf of the relevant Party Subsidiary.
SECTION 4.3. The Service Provider shall exercise commercially reasonable care to cause all material property of any Party Subsidiary to be clearly identified as such, held separately from the property of the Service Provider and, where applicable, held in safe custody.
SECTION 4.4. The Service Provider shall exercise commercially reasonable care to cause adequate manpower to be employed by it to perform its obligations under this Agreement, PROVIDED HOWEVER, that the Service Provider, in the performance of its responsibilities under this Agreement, shall be entitled to have regard to its overall responsibilities in relation to the servicing of its clients and in particular, without prejudice to the generality of the foregoing, the Service Provider shall be entitled to allocate available resources and services in such manner as in the prevailing circumstances the Service Provider considers to be fair and reasonable.
SECTION 4.5. Notwithstanding anything to the contrary contained in this Agreement, the Service Provider agrees that any and all decisions of a material nature relating to any Party Subsidiary or its Vessel or Newbuild shall be reserved to such Party Subsidiary.
SECTION 4.6. During the term hereof, the Service Provider shall promote the business of the Party Subsidiaries in accordance with the directions of the authorized representative or, as the case may be, representatives of the respective Party Subsidiary and shall at all times use commercially reasonable efforts to conform to and comply with the lawful and reasonable directions, regulations or recommendations made by such authorized representative or, as the case may be, representatives, and in the absence of any specific directions or recommendations as aforesaid and, subject to the terms and conditions of this Agreement, shall provide general administrative and advisory services in connection with the business of the Party Subsidiary always to the extent permitted by the Service Provider’s constitutional documents and governmental licenses/authorizations.
SECTION 4.7. The Service Provider, in the performance of its responsibilities under this Agreement, shall exercise commercially reasonable care to cause any purchases of products or services from any of its Affiliates to be on terms no less favorable to the Service Provider than the market prices for products or services that the Service Provider could obtain on an arm’s length basis from unrelated parties.
SECTION 4.8. During the term hereof, the Service Provider agrees that it will provide the Services to the Party Subsidiaries on an exclusive basis and, without receiving the prior consent of the Party Subsidiaries, it will not provide any Services or other services contemplated herein to any entity other than to the Konstantakopoulos Entities or any Affiliates thereof.
SECTION 4.9. If a Vessel (which expression for the purposes of this Section shall include any Newbuild to be acquired by a Party Subsidiary) and a Ship directly or indirectly owned or operated by an unaffiliated third party are both available and meet the criteria for a charter being fixed by the Service Provider, the Vessel shall be offered such charter first and the relevant Party Subsidiary shall have 48 hours from such offer being received to accept such offer, failing which such charter shall be then offered to the relevant third party.
SECTION 4.10. The Service Provider shall at all times maintain appropriate and necessary accounts and records as regards the Services and shall make the same available for inspection and auditing by the Party Subsidiaries at such times as may be mutually agreed by the Service Provider, on the one hand, and the Party Subsidiaries, on the other hand.
ARTICLE V
REPRESENTATION AND OTHER ADMINISTRATIVE SERVICES
SECTION 5.1. The Service Provider shall provide certain representation and other administrative services to the Party Subsidiaries (in the case of paragraphs (a)(i), (ii), (vi) and (vii), (b), (c) and (d) upon request by the relevant Party Subsidiary), including the following:
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(a) |
representing each Party Subsidiary generally in its dealings and relations with third parties, including: |
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| (i) | keeping all books and records of things done and transactions performed on behalf of any such Party Subsidiary as it may require from time to time, including, but not limited to, liaising with accountants, lawyers and other professional advisors; | |
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(ii) |
maintaining the general ledgers of any such Party Subsidiary; |
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(iii) |
establishing bank accounts with such financial institutions as a Party Subsidiary may request, managing, administering and reconciling of such Party Subsidiary’s bank accounts; |
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(iv) |
providing assistance in negotiating loan and credit terms with lenders and monitoring and administration of compliance with any applicable financing terms and conditions in effect with investors, banks or other financial institutions; |
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(v) |
assisting with arranging board meetings of each such Party Subsidiary, director accommodation and travel for such board meetings and preparing meeting materials and detailed papers and agendas for scheduled meetings of the board of directors of any Party Subsidiary (and any and all committees thereof) that, where applicable, contain such information as is reasonably available to the Service Provider to enable the relevant board of directors (and any such committees) to base their opinion; |
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| (vi) | preparation of periodic consolidated financial statements of the Party Subsidiaries, including, but not limited to, those required for governmental and regulatory or self-regulatory agency filings and reports to shareholders, arranging of the auditing and/or review of any such financial statements and the provision of related data processing services; | |
| (vii) | preparing and providing (or procuring, at the relevant Party Subsidiary’s cost, a third party service provider to prepare and provide) tax returns required by any law or regulatory authority; | |
| (b) | arranging for the provision of advisory services (either directly or, at the relevant Party Subsidiary’s cost, through a third party service provider) to ensure that such Party Subsidiary is in compliance with all applicable laws, including all relevant securities laws; | |
| (c) | assisting the Party Subsidiaries in establishing and maintaining a system of internal controls sufficient to satisfy any applicable law or regulatory requirements; and | |
| (d) | negotiating the terms and thereafter arranging for cash management services, in each case with a third party provider at the cost of such Party Subsidiary. |
ARTICLE VI- INTENTIONALLY OMITTED
ARTICLE VII
BROKING AND OTHER COMMERCIAL SERVICES
SECTION 7.1. The Service Provider shall provide to the Party Subsidiaries, upon request by the relevant Party Subsidiary, one or more of the following broking and other commercial services:
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(a) |
providing charter broking and other chartering services and all matters related thereto, including seeking and negotiating employment for each Vessel and the conclusion (including the execution thereof) of charter parties or other contracts relating to the employment of such Vessel, whether on a voyage, time, demise, contract of affreightment or other basis (if such contract exceeds a period of 36 months, consent in writing shall first be obtained from the relevant Party Subsidiary); |
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(b) |
arranging of the proper payment to the relevant Party Subsidiary or its nominees of all hire and/or freight revenues or other moneys of whatsoever nature to which such Party Subsidiary may be entitled arising out of the employment or otherwise in connection with the relevant Vessel; |
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(c) |
providing voyage estimates and accounts and calculating of hire, freights, demurrage and/or dispatch moneys due from or due to the charterers of a Vessel; |
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(d) |
issuing to the crew of a Vessel appropriate voyage instructions and monitoring voyage performance; |
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(e) |
appointing agents in any port of the world, handling payments to such agents and auditing the expenses thereof; |
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(f) |
carrying out the necessary communications with the shippers, charterers and others involved with the receiving and handling of a Vessel at the relevant loading and discharging ports; |
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(g) |
invoicing on behalf of the relevant Party Subsidiary all freights, hires, demurrage, outgoing claims, refund of taxes, balances of disbursements, statements of account and other sums due to a Party Subsidiary and account receivables arising from the operation of a Vessel and, upon the request of the relevant Party Subsidiary, issuing releases on behalf of such Party Subsidiary upon receipt of payment or settlement of any such amounts; |
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(h) |
preparing off-hire statements and/or hire statements; |
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(i) |
providing marine insurance broking and advisory services and all matters related thereto, including seeking and negotiating insurance cover for each Vessel, the conclusion (including the execution thereof) of the relevant insurance contacts or entries for such Vessel, and the payment of the relevant insurance premiums or P&I calls (either directly or by employing the services (at the relevant Party Subsidiary’s cost) of a third party broker); |
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(j) |
providing ship sale and purchase broking services and all matters related thereto, including the seeking and the negotiation of any sale and purchase agreement of a Vessel (whether a second-hand or Newbuild), the supervision of such sale or purchase and the performance of any sale or purchase agreement (either directly or by employing the services (at the relevant Party Subsidiary’s cost) of a third party broker); |
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(k) |
providing newbuilding, conversion and shiprepair broking services and all matters related thereto (either directly or by employing the services (at the relevant Party Subsidiary’s cost) of a third party broker); |
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(l) |
providing average adjusting services and all matters related thereto in relation to a Vessel; and |
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(m) |
managing relationships between any Party Subsidiary and any existing or potential charterers, shipbuilders, shiprepair yards, insurers, lenders, shipmanagers, manning agents and other shipping industry service providers/participants. |
ARTICLE VIII
SERVICES FEES AND EXPENSES
SECTION 8.1. In consideration of the Service Provider providing the Services to each Party Subsidiary, each such Party Subsidiary shall pay the Service Provider the following fees (together, the “Services Fees” and, on a per Party Subsidiary/Vessel basis, the “Service Fee”):
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(a) |
monthly in arrears, a fee in United States Dollars equal to 0.60% calculated on the aggregate of the gross freight, demurrage, charter hire, ballast bonus or other income obtained for the employment of the Vessel of the relevant Party Subsidiary during the term hereof, payable to the Service Provider, only to the extent such freight, demurrage, charter hire, ballast bonus or other income, as the case may be, is received as revenue; and |
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(b) |
on each Payment Date falling after the date of this Agreement a fee equal to the Applicable Fraction of US$625,000 payable in cash; and |
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(c) |
on each Payment Date falling after the date of this Agreement, a fee in United States Dollars (the “Relevant Fee”) equal to the Applicable Fraction of: |
A x B
PROVIDED HOWEVER, that the Service Provider has the right to request in writing (the “Share Request”) to receive from each Party Subsidiary instead of the Relevant Fee payable by such Party Subsidiary for such Payment Date, a number of common stock of the Parent equal to the Applicable Fraction of B for such Payment Date. Upon receipt of a Share Request by a Party Subsidiary, such Party Subsidiary shall pay the appropriate Relevant Fee to the Parent and shall procure that the Parent shall as soon as possible (i) deliver the relevant common stock to the Service Provider, (ii) advise the Transfer Agent accordingly and (ii) deliver to the Service Provider a duly executed Registration Rights Agreement providing for the transferability of such common stock to any of the Konstantakopoulos Entities PROVIDED HOWEVER FURTHER that Service Provider is aware and acknowledges that there are limitations and restrictions on the circumstances under which it may offer to sell, transfer or otherwise dispose of the common stock to be acquired by it including certain restrictions on transfer under the applicable securities laws.
SECTION 8.2. For the purposes of Section 8.1, the following terms shall have the following meanings:
“A” is, in relation to a Payment Date, the average of the closing price of the common stock of the Parent on the New York Stock Exchange for the ten trading days ending on such Payment Date.
“B” is Y x 0.2%.
“Y” is, in relation to a Payment Date, the number of validly issued, fully paid and non-assessable shares of the common stock of the Parent outstanding as of 1 January 2015, as such number may be increased by a stock split or, as the case may be, may be reduced by a reverse stock split of the Parent’s common stock as of such Payment Date. For the avoidance of doubt, there were 74,800,000 shares of issued and outstanding common stock of the Parent as of January 1, 2015.
SECTION 8.3. The Services Fees will be fixed throughout the term of this Agreement and shall not be subject to adjustment for Euro/U.S. Dollar exchange rate fluctuations or inflation, save that the Service Fee for each Vessel payable pursuant to Section 8.1(b) may be adjusted pursuant to Section 8.4.
SECTION 8.4. The Services Fees payable pursuant to Section 8.1(b), for the 12-month period starting on January 1, 2016 and for each subsequent 12-month period falling thereafter (each such 12-month period referred to hereinafter as an “Annual Period”) will, in each case, be adjusted upwards with effect from the beginning of such Annual Period if:
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(a) |
the average of the Euro/U.S. Dollar exchange rates during the 12-month period ending on the last day of the month of September falling before the commencement date of such Annual Period (such average being the average over the applicable period, as calculated by the Service Provider from the Euro Foreign Exchange Reference Rate published daily at 15:00 CET by the European Central Bank on www.ecb.int) evidence that the Euro has strengthened against the U.S. Dollar by more than five per cent (5%) from: |
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(i) |
in the case of the first Annual Period starting on the day falling immediately after 31 December 2015, the rate existing on the business day immediately prior to the date of this Agreement, and |
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(ii) |
in the case of each subsequent Annual Period, the previous Euro/U.S. Dollar average calculated for the purposes of this Section 8.4 in respect of the immediately previous Annual Period, |
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| by the average percentage amount by which the Euro has in each such case so strengthened against the U.S. Dollar; and/or | ||
| (b) | the Service Provider has incurred a material unforeseen increase in the cost of providing the Services, by an amount to be agreed between the Service Provider and the Party Subsidiaries, each acting in a commercially reasonable manner. | |
SECTION 8.5. The Service Provider shall, subject to Section 8.6, pay for all usual office expenses incurred by it as the Service Provider.
SECTION 8.6. Each Party Subsidiary hereby acknowledges that any capital expenditure, financial costs, operating expenses for its Vessel and any general and administrative expenses of such Party Subsidiary whatsoever are not covered by the Service Fee and any such expenditure, costs and expenses shall be paid fully by the relevant Party Subsidiary, whether directly to third parties (which for the avoidance of doubt shall include any Sub-Provider) or by payment to such third parties through the Service Provider and to the extent incurred by the Service Provider, shall be reimbursed to it by such Party Subsidiary. The said capital expenditure, financial costs, operating expenses for each Party Subsidiary and its Vessel and general and administrative expenses of each Party Subsidiary include, without limiting the generality of the foregoing, items such as:
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(a) |
fees, interest, principal and any other costs due to a Party Subsidiary’s financiers and their respective advisors; |
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(b) |
all voyage expenses and vessel operating and maintenance expenses relating to the operation and management of a Vessel (including crew costs, surveyor’s attendance fees, bunkers, lubricant oils, spares, survey fees, classification society fees, maintenance and repair costs, vetting expenses, etc.); |
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(c) |
any commissions, fees, remuneration or disbursements due to lawyers, brokers, agents, surveyors, consultants, financial advisors, investment bankers, insurance advisors or any other third parties whatsoever appointed by the Service Provider whether in its name or on behalf and/or in the name of any Party Subsidiary; |
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(d) |
any commissions, fees, remuneration or disbursements due to lawyers, brokers, agents, surveyors, consultants, financial advisors, investment bankers, insurance advisors or any other third parties (other than, if applicable, a Related Service Provider) whatsoever sub-contracted to the Service Provider in the normal and reasonable course of meeting the Service Provider’s duties and obligations under this Agreement including the duties provided in Articles V, VI and VII of this Agreement; |
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(e) |
applicable deductibles, insurance premiums and/or P&I calls; |
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(f) |
compensation expenses for employees other than of the Service Provider; |
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(g) |
postage, communication, traveling, lodging, victualling, overtime, out of office compensation and out of pocket expenses of the Service Provider and/or its personnel, incurred in pursuance of the Services; and |
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(h) |
any other out of pocket expenses that are incurred by the Service Provider in the performance of the Services pursuant to this Agreement. |
SECTION 8.7. The Service Provider shall have the right to demand the Service Fee payable in relation to each Party Subsidiary and its Vessel from either all the Party Subsidiaries or such Party Subsidiary. By written notice to the Party Subsidiaries, the Service Provider may direct the Party Subsidiaries to pay any amounts owing by the Service Provider to any Sub-Provider pursuant to a subcontract of any provisions of this Agreement, directly to the relevant Sub-Provider.
SECTION 8.8. In the event that this Agreement is terminated, other than by reason of default by the Service Provider, the Services Fees payable to the Service Provider under Section 8.1 shall be payable for a further period of three months from the termination date. The fees payable for the said three months shall be paid in one lump sum in advance on the termination of this Agreement.
ARTICLE IX
CORPORATE PLANNING AND EXPENSES
SECTION 9.1. The Service Provider 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.
SECTION 9.2. Insofar as any moneys are collected from third parties by the Service Provider under the terms of this Agreement (other than moneys payable by a Party Subsidiary to the Service Provider), such moneys and any interest thereon shall be held to the credit of the relevant Party Subsidiary in a separate bank account in the name thereof. Interest on any such bank account shall be for the benefit of the relevant Party Subsidiary.
SECTION 9.3. Notwithstanding anything contained herein to the contrary, the Service Provider shall in no circumstances be required to use or commit its own funds to finance the provision of the Services.
SECTION 9.4. To the extent that a Related Service Provider has been appointed in accordance with the terms of Section 2.3, it is agreed by the Party Subsidiaries and the Service Provider for the benefit of such Related Service Provider that the provisions of Article VIII shall apply to such Related Service Provider as if such provisions were repeated herein, but with references to:
|
(a) |
the “Service Provider” being deemed as references to the relevant Related Service Provider; |
|
|
(b) |
the “Services” being deemed as references to the services to be performed by such Related Service Provider under the relevant services agreement; |
|
|
(c) |
the “Vessels” being deemed as references to the Vessels being services by such Related Service Provider under a services agreement entered into directly with the relevant Party Subsidiaries; |
|
|
(d) |
the “Party Subsidiaries” being deemed as references to the relevant Party Subsidiaries; and |
|
|
(e) |
references to “this Agreement” being deemed as references to any services agreement signed by such Related Service Provider directly with the relevant Party Subsidiaries. |
ARTICLE X
LIABILITY AND INDEMNITY
SECTION 10.1. Save for the obligation of the Party Subsidiaries to pay any moneys or common stock due to the Service Provider hereunder, neither any Party Subsidiary nor the Service Provider shall be under any liability to the other for any failure to perform any of their obligations hereunder by reason of Force Majeure. “Force Majeure” shall mean any cause whatsoever of any nature or kind beyond the reasonable control of the relevant Party Subsidiary or the Service Provider, including, without limitation, acts of God, acts of civil or military authorities, acts of war or public enemy, acts of any court, regulatory agency or administrative body having jurisdiction, insurrections, riots, strikes or other labor disturbances, embargoes or other causes of a similar nature.
SECTION 10.2. The Service Provider, including its officers, directors, employees, shareholders, agents, sub-contractors and any Sub-Provider (the “Service Provider Related Parties”) shall be under no liability whatsoever to any Party Subsidiary or to any third party (including the crew of a Vessel) for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect (including but not limited to loss of profit arising out of or in connection with detention of or delay to a Vessel), and howsoever arising in the course of the performance of this Agreement, unless and to the extent that the same is proved to have resulted solely from the gross negligence or willful misconduct of the Service Provider, its officers, employees, agents, sub-contractors or any Sub-Provider.
SECTION 10.3. Notwithstanding anything that may appear to the contrary in this Agreement, the Service Provider shall not be liable for any of the actions of the crew of a Vessel, even if such actions are negligent, grossly negligent or willful, except only to the extent that they are shown to have resulted from a failure by the Service Provider to discharge its obligations under Article VI, in which case the Service Provider’s liability shall be limited in accordance with the terms of this Article X.
SECTION 10.4. The Party Subsidiaries shall indemnify and hold harmless the Service Provider Related Parties against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of this Agreement and against and in respect of any loss, damage, delay or expense of whatsoever nature (including legal costs and expenses on a full indemnity basis), whether direct or indirect, incurred or suffered by any Service Provider Related Party arising out of or in connection with the performance of this Agreement, unless incurred or suffered due to the gross negligence or willful misconduct of any Service Provider Related Party.
SECTION 10.5. It is hereby expressly agreed that no employee or agent of the Service Provider (including any sub-contractor from time to time employed by the Service Provider) shall in any circumstances whatsoever be under any liability whatsoever to any Party Subsidiary or any third party for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in connection with his employment or agency and, without prejudice to the generality of the foregoing provisions in this Article X, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defense and immunity of whatsoever nature applicable to the Service Provider or to which the Service Provider is entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Service Provider acting as aforesaid, and for the purpose of all the foregoing provisions of this Article X, the Service Provider is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be the Service Provider’s servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement. Nothing in this Section 10.5 shall be construed so as to further limit any liability the Service Provider may have to the Party Subsidiaries under Section 10.2.
SECTION 10.6. The provisions of this Article X shall survive any termination of this Agreement.
ARTICLE XI
RIGHTS OF THE SERVICE PROVIDER AND RESTRICTIONS ON THE SERVICE PROVIDER’S AUTHORITY
SECTION 11.1. Except as may be provided in this Agreement or in any separate written agreement between any Party Subsidiary and the Service Provider or a Sub-Provider, the Service Provider and any Sub-Provider shall be an independent contractor and not the agent of any Party Subsidiary and shall have no right or authority to incur any obligation on behalf of any Party Subsidiary or to bind any Party Subsidiary in any way whatsoever. Nothing in this Agreement shall be deemed to make the Service Provider or any Sub-Provider or any of their subsidiaries or employees an employee, joint venturer or partner of any Party Subsidiary.
SECTION 11.2. Each Party Subsidiary acknowledges that the Service Provider or, as the case may be, any Sub-Provider shall have no responsibility hereunder, direct or indirect, with regard to the formulation of the business plans, policies, management or strategies (financial, tax, legal or otherwise) of any Party Subsidiary, which is solely the responsibility of each respective Party Subsidiary. Each Party Subsidiary shall set its corporate policies independently through its respective board of directors and executive officers and nothing contained herein shall be construed to relieve such directors or officers of each respective Party Subsidiary from the performance of their duties or to limit the exercise of their powers.
SECTION 11.3. Notwithstanding the other provisions of this Agreement:
|
(a) |
the Service Provider or, as the case may be, any Sub-Provider may act with respect to a Party Subsidiary upon any advice, resolutions, requests, instructions, recommendations, direction or information obtained from such Party Subsidiary or any banker, accountant, broker, lawyer or other person acting as agent of or adviser to such Party Subsidiary and the Service Provider or, as the case may be, the relevant Sub-Provider shall incur no liability to such Party Subsidiary for anything done or omitted or suffered in good faith in reliance upon such advice, instruction, resolution, recommendation, direction or information made or given by such Party Subsidiary or its agents, in the absence of gross negligence or willful misconduct by the Service Provider or, as the case may be, the relevant Sub-Provider or their respective servants, and shall not be responsible for any misconduct, mistake, oversight, error of judgment, neglect, default, omission, forgetfulness or want of prudence on the part of any such banker, accountant, broker, lawyer, agent or adviser or other person as aforesaid; |
|
|
(b) |
the Service Provider or, as the case may be, a Sub-Provider shall not be under any obligation to carry out any request, resolution, instruction, direction or recommendation of any Party Subsidiary or its agents if the performance thereof is or would be illegal or unlawful; and |
|
|
(c) |
the Service Provider or, as the case may be, the relevant Sub-Provider shall incur no liability to any Party Subsidiary for doing or failing to do any act or thing which it shall be required to do or perform or forebear from doing or performing by reason of any provision of any law or any regulation or resolution made pursuant thereto or any decision, order or judgment of any court or any lawful request, announcement or similar action of any person or body exercising or purporting to exercise the legitimate authority of any government or of any central or local governmental institution in each case where the above entity has jurisdiction. |
ARTICLE XII
TERMINATION OF THIS AGREEMENT
SECTION 12.1. This Agreement shall be effective as of the 2 November 2015 and, subject to Sections 12.2, 12.3, 12.4 and 12.5, shall continue until December 31, 2015 (the “Initial Term”). Thereafter the term of this Agreement shall be extended on a year-to-year basis for up to fifteen times (each a “Subsequent Term”) unless the Party Subsidiaries, at least 12 months prior to the end of the then current term, give written notice to the Service Provider that they wish to terminate this Agreement at the end of the then current term. In no event will the term of this Agreement extend beyond the date falling ten years after the last day of the Initial Term.
SECTION 12.2. The Party Subsidiaries shall be entitled to terminate this Agreement by notice in writing to the Service Provider if:
|
(a) |
the Service Provider defaults in the performance of any material obligation under this Agreement, subject to a cure right of 20 Business Days following written notice by the Party Subsidiaries; |
|
|
(b) |
any moneys due and payable to the Party Subsidiaries or third parties by the Service Provider under this Agreement is not paid or accounted for within 10 Business Days following written notice by the Party Subsidiaries; |
|
(c) |
there is a Change in Control of the Service Provider; or |
|
|
(d) |
the Service Provider is convicted of, enters a plea of guilty or nolo contendere with respect to, or enters into a plea bargain or settlement admitting guilt for a crime (including, for the avoidance of doubt, fraud), which conviction, plea bargain or settlement is demonstrably and materially injurious to the Party Subsidiaries, PROVIDED ALWAYS, such crime is not a misdemeanor and PROVIDED ALWAYS further that such crime has been committed solely and directly by an officer or director of the Service Provider acting within the terms of his or her employment or office. |
SECTION 12.3. The Service Provider shall be entitled to terminate this Agreement by notice in writing to the Party Subsidiaries if:
|
(a) |
any moneys payable by a Party Subsidiary under this Agreement is not paid when due or if due on demand within 20 Business Days following demand by the Service Provider; |
|
|
(b) |
a Party Subsidiary defaults in the performance of any other material obligations under this Agreement, subject to a cure right of 20 Business Days following written notice by the Service Provider; or |
|
|
(c) |
there is a Change in Control of the Parent. |
SECTION 12.4. Either party (the Party Subsidiaries acting as one) shall be entitled to terminate this Agreement by notice in writing to the other party if:
|
(a) |
the other party ceases to conduct business, or all or substantially all of the equity-interests, properties or assets of such other party are sold, seized or appropriated which, in the case of seizure or appropriation, is not discharged within 20 Business Days; |
|
|
(b) |
(i) the other party files a petition under any bankruptcy law, makes an assignment for the benefit of its creditors, seeks relief under any law for the protection of debtors or adopts a plan of liquidation; (ii) a petition is filed against the other party seeking to have it declared insolvent or bankrupt and such petition is not dismissed or stayed within 90 Business Days of its filing; (iii) the other party shall admit in writing its insolvency or its inability to pay its debts as they mature; (iv) an order is made for the appointment of a liquidator, manager, receiver or trustee of the other party of all or a substantial part of its assets; (v) if an encumbrancer takes possession of or a receiver or trustee is appointed over the whole or a substantial part of the other party’s undertaking, property or assets; or (vi) if an order is made or a resolution is passed for the other party’s winding up; OR |
|
(c) |
the other party is prevented from performing its obligations hereunder, in any material respect, by reasons of Force Majeure for a period of two or more consecutive months. |
SECTION 12.5. Upon the effective date of termination pursuant to this Article XII, the Service Provider shall promptly terminate its services hereunder, after taking reasonable commercial steps to minimize any interruption to the business of the Party Subsidiaries.
SECTION 12.6. Upon termination, the Service Provider shall, as promptly as possible, submit a final accounting of funds received and disbursed under this Agreement and of any remaining Service Fee and/or any other funds due from any Party Subsidiary, calculated pro rata to the date of termination, and any non-disbursed funds of any Party Subsidiary in the Service Provider’s possession or control will be paid by the Service Provider as directed by such Party Subsidiary promptly upon the Service Provider’s receipt of all sums then due to it under this Agreement, if any.
SECTION 12.7. Upon termination of this Agreement, the Service Provider shall release to the Party Subsidiaries the originals where possible, or otherwise certified copies, of all such accounts and all documents specifically relating to a Party Subsidiary or its Vessel or the provision of the Services.
SECTION 12.8. Upon termination of this Agreement either by the Service Provider for any reason (other than pursuant to Section 12.4(c)) or by the Party Subsidiaries pursuant to Section 12.1, the Party Subsidiaries shall be liable to pay to the Service Provider as liquidated damages an amount in U.S. Dollars equal to the lesser of (a) ten times and (b) the number of full years remaining prior to the date falling ten years after the last day of the Initial Term times, in each case, the aggregate fees due and payable to the Service Provider under the terms of this Agreement during the 12-month period ending on the date of termination of this Agreement, PROVIDED ALWAYS, that the amount of liquidated damages payable thereunder shall never be less than two times the aggregate fees due and payable to the Service Provider under the terms of this Agreement during the 12-month period ending on the date of termination of this Agreement.
SECTION 12.9. The provisions of this Article XII shall survive any termination of this Agreement.
ARTICLE XIII
ADDITION AND RESIGNATION OF SUBSIDIARIES
SECTION 13.1. Any Subsidiary of the Parent owning or operating a Ship or having contracted a Newbuild and not already a Party Subsidiary, shall request it becomes a party to this Agreement (the “Additional Party Subsidiary”) as soon as possible after becoming the owner or operator of such Vessel or, as the case may be, contracting such Newbuild. The Additional Party Subsidiary shall become a party to this Agreement upon it and the Service Provider both executing a duly completed Accession Letter.
SECTION 13.2. Any Party Subsidiary may request that it ceases to be a party to this Agreement (the “Resigning Party Subsidiary”) by delivering to the Service Provider a duly completed and executed Resignation Letter. The Resigning Party Subsidiary shall cease to be a Party Subsidiary and shall have no further rights or obligations under this Agreement upon the Service Provider accepting such Resignation Letter by counter-signing the same.
SECTION 13.3. Unless the parties hereto agree otherwise, any Party Subsidiary whose Vessel (including any Newbuild) is sold or becomes a total loss or of whose newbuilding contract is terminated or cancelled (the “Automatic Resigning Party Subsidiary”), shall be deemed to have resigned from this Agreement as of the date of such sale, loss, termination or cancellation without the need for any Resignation Letter to be delivered in accordance with Section 13.2, upon which the Automatic Resigning Party Subsidiary shall cease to be a Party Subsidiary and shall have no further rights or obligations under this Agreement (unless the parties hereto have agreed otherwise in writing).
ARTICLE XIV
NOTICES
SECTION 14.1. All notices, consents and other communications hereunder, or necessary to exercise any rights granted hereunder, shall be in writing, sent either by prepaid registered mail or telefax, and will be validly given if delivered on a Business Day:
|
(a) |
in relation to a Party Subsidiary, at: |
c/o Costamare Inc.
Guildo Pastor Center,
7 rue du Gabian
98000 Monaco
Telefax: +377
Attention: Gerant
|
(b) |
in relation to the Service Provider at: |
Costamare Shipping Services Ltd.
60 Zephyrou Street & Syngrou Avenue, Palaio Faliro, Athens, Greece
Telefax: +30 210 9409081
Attention: General Manager
ARTICLE XV
APPLICABLE LAW
SECTION 15.1. This Agreement and any non-contractual obligations connected with it shall be governed by, and construed in accordance with, the laws of England.
SECTION 15.2. Except for Sections 2.2, 8.6 and 8.7 and Articles X and XI which can be relied on by a Sub-Provider (other than V.Ships) and Sections 2.2, 8.6, 8.7 and 9.4 and Articles X and XI which can be relied on by a Related Service Provider, no other term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
ARTICLE XVI
ARBITRATION
SECTION 16.1. All disputes arising out of this Agreement and/or any non-contractual obligations connected with it shall be arbitrated in London in the following manner. One arbitrator is to be appointed by each of the Service Provider and the Party Subsidiaries (acting as one) and a third by the two so chosen. Their decision or that of any two of them shall be final. The arbitrators shall be commercial persons, conversant with shipping matters. Such arbitration is to be conducted in accordance with the London Maritime Arbitration Association (LMAA) Terms current at the time when the arbitration proceedings are commenced and in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof.
SECTION 16.2. In the event that a party hereto shall state a dispute and designate an arbitrator in writing, the other party shall have 10 Business Days to designate its own arbitrator. If such other party fails to designate its own arbitrator within such period, the arbitrator appointed by the first party can render an award hereunder.
SECTION 16.3. Until such time as the arbitrators finally close the hearings, either party shall have the right by written notice served on the arbitrators and on the other party to specify further disputes or differences under this Agreement for hearing and determination.
SECTION 16.4. The arbitrators may grant any relief, and render an award, which they or a majority of them deem just and equitable and within the scope of this Agreement, including but not limited to the posting of security. Awards pursuant to this Article XVI may include costs and judgments may be entered upon any award made herein in any court having jurisdiction.
ARTICLE XVII
MISCELLANEOUS
SECTION 17.1. This Agreement constitutes the sole understanding and agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements or understandings, written or oral, with respect thereto. This Agreement may not be amended, waived or discharged except by an instrument in writing executed by the party against whom enforcement of such amendment, waiver or discharge is sought.
SECTION 17.2. During the term hereof, the Service Provider will not provide services hereunder through, or otherwise cause any Party Subsidiary to have, an office or fixed place of business in the United States.
SECTION 17.3. This Agreement may be executed in one or more written counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.
IN WITNESS WHEREOF the undersigned have executed this Agreement as of the date first above written.
|
EACH OF THE SUBSIDIARIES SET OUT IN SCHEDULE A |
|||
|
by: |
|||
| /s/ Anastassios Gabrielides | |||
| Name: Anastassios Gabrielides | |||
| Title: Attorney in Fact | |||
|
COSTAMARE SHIPPING SERVICES LTD. |
|||
|
by: |
|||
| /s/ Athanasios Beis | |||
| Name: Athanasios Beis | |||
| Title: President | |||
SCHEDULE A
SUBSIDIARIES
|
# |
OWNING COMPANY |
|
1 |
ACHILLEAS MARITIME CORPORATION |
|
2 |
ADELE SHIPPING CO. |
|
3 |
AINSLEY MARITIME CO. |
|
4 |
ALFORD SHIPPING CO. |
|
5 |
AMBROSE MARITIME CO. |
|
6 |
ANDATI MARINE CORP. |
|
7 |
ANGISTRI CORPORATION |
|
8 |
ASTIER MARINE CORP. |
|
9 |
AUBER MARINE CORP. |
|
10 |
BABRON MARINE CORP. |
|
11 |
BAGARY MARINE CORP. |
|
12 |
BAILS SHIPPING CO. |
|
13 |
BARKLEY SHIPPING CO. |
|
14 |
BARRAL MARINE CORP. |
|
15 |
BASTIAN SHIPPING CO. |
|
16 |
BEARDMORE MARITIME CO. |
|
17 |
BENEDICT MARITIME CO. |
|
18 |
BERG SHIPPING CO. |
|
19 |
BERNIS MARINE CORP. |
|
20 |
BERTRAND MARITIME CO. |
|
21 |
BLONDEL MARINE CORP. |
|
22 |
BRIANDE MARINE CORP. |
|
23 |
CADENCE SHIPPING CO. |
|
24 |
CAMARAT MARINCE CORP. |
|
25 |
CAPETANISSA MARITIME CORPORATION |
|
26 |
CARAVOKYRA MARITIME CORPORATION |
|
27 |
CARRADE MARINE CORP. |
|
28 |
CARRAN SHIPPING CO. |
|
29 |
CAVALAIRE MARINE CORP. |
|
30 |
CHRISTOS MARITIME CORPORATION |
|
31 |
CONLEY SHIPPING CO. |
|
32 |
COSTACHILLE MARITIME CORPORATION |
|
33 |
COSTIS MARITIME CORPORATION |
|
34 |
DINO SHIPPING CO. |
|
35 |
DUVAL SHIPPING CO. |
|
36 |
EVANTONE SHIPPING CO. |
|
37 |
FABRON MARINE CORP. |
|
38 |
FAIRBANK MARITIME CO. |
|
39 |
FANAKOS MARITIME CORPORATION |
|
40 |
FASTSAILING MARITIME CO |
|
41 |
FERRAGE MARINE CORP. |
|
42 |
FINNEY SHIPPING CO. |
|
43 |
FIRMINO SHIPPING CO. |
|
44 |
FONTAINE MARINE CORP. |
|
45 |
FORTOSE SHIPPING CO. |
|
46 |
GAMBETTA MARINE CORP. |
|
47 |
GRENETA MARINE CORP. |
|
48 |
HARDEN SHIPPING CO. |
|
49 |
HARDISTY SHIPPING CO. |
|
50 |
HOLLER SHIPPING CO. |
|
51 |
HYDE MARITIME CO. |
|
52 |
JODIE SHIPPING CO. |
|
53 |
JOYNER CARRIERS S.A. |
|
54 |
KALAMATA SHIPPING CORPORATION |
|
55 |
KAYLEY SHIPPING CO. |
|
56 |
KELSEN SHIPPING CO. |
|
57 |
KEMP MARITIME CO. |
|
58 |
LINDNER SHIPPING CO. |
|
59 |
LONGLEY SHIPPING CO. |
|
60 |
MADELIA SHIPPING CO. |
|
61 |
MARALDI MARINE CORP. |
|
62 |
MARINA MARITIME CORPORATION |
|
63 |
MERTEN SHIPPING CO. |
|
64 |
MIKO SHIPPING CO. |
|
65 |
NAVARINO MARITIME CORPORATION |
|
66 |
NERIDA SHIPPING CO. |
|
67 |
NISBET SHIPPING CO. |
|
68 |
NOVARA SHIPING CO. |
|
69 |
LENVAL SHIPING CO. |
|
70 |
PEDDAR SHIPPING CO. |
|
71 |
PERCY SHIPPING CO. |
|
72 |
PLANGE SHIPPING CO. |
|
73 |
QUENTIN SHIPPING CO. |
|
74 |
RADER SHIPPING CO. |
|
75 |
RAYMOND SHIPPING CO. |
|
76 |
REDDICK SHIPPING CO. |
|
77 |
RENA MARITIME CORPORATION |
|
78 |
RIVOLI MARINE CORP. |
|
79 |
ROCKWELL SHIPPING CO. |
|
80 |
SANDER SHIPPING CO. |
|
81 |
SAUVAN MARINE CORP. |
|
82 |
SAVAL SHIPPING CO. |
|
83 |
SCHOFIELD MARITIME CO. |
|
84 |
SIMONE SHIPPING CO. |
|
85 |
SINGLETON SHIPPING CO. |
|
86 |
SKERRETT MARITIME CO. |
|
87 |
SMOLETT MARINE CORP. |
|
88 |
SPEDDING SHIPPING CO. |
|
89 |
TANERA SHIPPING CO. |
|
90 |
TATUM SHIPPING CO. |
|
91 |
TERANCE SHIPPING CO. |
|
92 |
TERRON MARINE CORP. |
|
93 |
TIMPSON SHIPPING CO. |
|
94 |
UNDINE SHIPPING CO. |
|
95 |
URIZA SHIPPING S.A. |
|
96 |
VAILLANT MARINE CORP. |
|
97 |
VALROSE MARINE CORP. |
|
98 |
VERANDI SHIPPING CO. |
|
99 |
VERNES SHIPPING CO. |
|
100 |
VIRNA SHIPPING CO. |
|
101 |
WESTER SHIPPING CO. |
SCHEDULE B
FORM OF ACCESSION LETTER
To: COSTAMARE SHIPPING SERVICES LTD.
From: [additional Party Subsidiary]
Dated:
Dear Sirs,
Services Agreement dated [ ] (the “Agreement”)
|
1 |
We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession Letter. |
|
2 |
[Subsidiary] agrees to become an Additional Party Subsidiary and to be bound by the terms of the Agreement as an Additional Party Subsidiary pursuant to Section 13.1 of the Agreement. [Subsidiary] is a company duly incorporated under the laws of [name of relevant jurisdiction]. |
|
3 |
This Accession Letter and any non-contractual obligations arising out of or in connection with it are governed by and shall be construed in accordance with English law. |
|
4 |
This Accession Letter is entered into by deed. |
|
COSTAMARE SHIPPING SERVICES LTD. |
[Subsidiary] |
SCHEDULE C
FORM OF RESIGNATION LETTER
To: COSTAMARE SHIPPING SERVICES LTD.
From: [resigning Party Subsidiary]
Dated:
Dear Sirs,
Services Agreement dated [ ] (the “Agreement”)
|
1 |
We refer to the Agreement. This is a Resignation Letter. Terms defined in the Agreement have the same meaning in this Resignation Letter unless given a different meaning in this Resignation Letter. |
|
2 |
Pursuant to Section 13.2 of the Agreement, we request that [resigning Party Subsidiary] be released from its obligations as a Party Subsidiary under the Agreement. |
|
3 |
This Resignation Letter and any non-contractual obligations arising out of or in connection with are governed by and shall be construed in accordance with English law. |
|
[Subsidiary] |
|
………………………………………………. By: |
I hereby acknowledge receipt of this Resignation Letter and accept the request set out in clause 2 hereof.
|
COSTAMARE SHIPPING SERVICES LTD. |
|
………………………………………………. By: |
Exhibit 99.4
|
COSTAMARE INC.
- and –
COSTAMARE SHIPPING COMPANY S.A.
FRAMEWORK AGREEMENT
|
TABLE OF CONTENTS
| Page | |||
| ARTICLE I | INTERPRETATION | 1 | |
| ARTICLE II | APPOINTMENT | 6 | |
| ARTICLE III | THE PARENT’S GENERAL OBLIGATIONS | 8 | |
| ARTICLE IV | THE MANAGER’S GENERAL OBLIGATIONS | 9 | |
| ARTICLE V | ADMINISTRATIVE SERVICES | 10 | |
| ARTICLE VI | COMMERCIAL SERVICES | 11 | |
| ARTICLE VII | INTENTIONALLY OMITTED | 12 | |
| ARTICLE VIII | INTENTIONALLY OMITTED | 12 | |
| ARTICLE IX | MANAGEMENT FEES AND EXPENSES | 12 | |
| ARTICLE X | BUDGETS, CORPORATE PLANNING AND EXPENSES | 15 | |
| ARTICLE XI | LIABILITY AND INDEMNITY | 18 | |
| ARTICLE XII | RIGHTS OF THE MANAGER AND RESTRICTIONS ON THE MANAGER’S AUTHORITY | 19 | |
| ARTICLE XIII | TERMINATION OF THIS AGREEMENT | 21 | |
| ARICLE XIV | NOTICES | 23 | |
| ARTICLE XV | APPLICABLE LAW | 24 | |
| ARTICLE XVI | ARBITRATION | 24 | |
| ARTICLE XVII | MISCELLANEOUS | 25 | |
| APPENDIX I | FORM OF SHIPMANAGEMENT AGREEMENT | ||
| APPENDIX II | FORM OF SUPERVISION AGREEMENT |
THIS FRAMEWORK AGREEMENT (this “Agreement”) is made on the 2nd day of November 2015 as amended and restated on 17 January, 2020 and as further amended and restated on 28 June 2021, BY AND BETWEEN:
(1) COSTAMARE INC., a Marshall Islands corporation (the “Parent”); and
(2) COSTAMARE SHIPPING COMPANY S.A., a company organized and existing under the laws of the Republic of Panama (the “Manager”).
WHEREAS:
(A) The Parent wholly owns (directly or indirectly) the entities set out in Schedule A, as such Schedule A may be amended from time to time (the “Subsidiaries”), each of which owns or operates or has agreed to purchase a Ship (as defined below) (together the “Vessels” and each a “Vessel”).
(B) The Manager has the benefit of experience in the technical and commercial management of Ships and representation of shipowning companies generally.
(C) The Parent and the Manager desire to adopt this Agreement, pursuant to which the Manager shall, either directly and/or through a Submanager (as defined below), provide certain ship management services to the Subsidiaries as specified herein.
(D) The amendments effected by means of the restatement of this Agreement on 28 June 2021 are deemed to have taken effect on 15 June 2021.
NOW, THEREFORE, THE PARTIES HEREBY AGREE:
ARTICLE I
INTERPRETATION
SECTION 1.1. In this Agreement, unless the context otherwise requires:
“Affiliates” means, with respect to any person as to any particular date, any other persons that directly or indirectly, through one or more intermediaries, are Controlled by, Control or are under common Control with the person in question, and Affiliates means any of them.
“Agreement” shall have the meaning set forth in the preamble.
“Annual Period” shall have the meaning set forth in Section 9.2.
“Approved Budget” shall have the meaning set forth in Section 10.3.
“Beneficial Owner” has the meaning set forth in Rule 13d-3 under the Exchange Act. For purposes of this definition, such person or group shall be deemed to Beneficially Own any outstanding voting securities of a company held by any other company that is Controlled by such person or group. The term “Beneficially Own” and similar capitalized terms shall have analogous meanings.
“Bluenet Entity” means each of:
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a) |
Blue Net Chartering GmbH & Co. KG of Elbchaussee 277, 22605 Hamburg, Germany; and |
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b) |
Blue Net Chartering Asia Pte. Ltd of 3 Pickering Street, #02-17ll8 Nankin Row, Singapore 048660. |
“Board of Directors” means the board of directors of the Parent as the same may be constituted from time to time.
“Business Days” means a day (excluding Saturdays and Sundays) on which banks are open for business in Monaco; Athens, Greece; and New York, New York, USA.
“Change in Control of the Manager” means (a) a sale of all or substantially all of the assets or property of the Manager necessary for the performance of the Services, (b) a sale of the Manager’s shares that would result in Konstantinos Konstantakopoulos Beneficially Owning, directly or indirectly, less than 50.1% of the total voting power of the outstanding voting securities of the Manager or (c) a merger, consolidation or similar transaction, that would result in Konstantinos Konstantakopoulos Beneficially Owning, directly or indirectly, less than 50.1% of the total voting power of the outstanding voting securities of the resulting entity following such transaction.
“Change in Control of the Parent” means the occurrence of any of the following events: (a) if any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act or any successor provisions to either of the foregoing), including a group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(10) under the Exchange Act (other than one or more Konstantakopoulos Entities) (collectively, an “Acquiring Person”) becomes the Beneficial Owner, directly or indirectly, of 40% or more of the total voting power of the outstanding voting securities of the Parent, which voting power represents a higher percentage than that of the Konstantakopoulos Entities, collectively; or (b) the approval by the shareholders of the Parent of a proposed merger, consolidation or similar transaction, as a result of which any Acquiring Person becomes the Beneficial Owner, directly or indirectly, of 40% or more of the total voting power of the outstanding voting securities of the resulting entity following such transaction, which voting power represents a higher percentage than that of the Konstantakopoulos Entities, collectively; or (c) a change in directors after which majority of the members of the Board of Directors are not Continuing Directors.
“Consent of the Parent” means the prior written consent of the majority of the Independent Directors of the Parent.
“Continuing Directors” means, as of any date of determination, any member of the Board of Directors who (i) was a member of the Board of Directors immediately after the date of this Agreement, or (ii) was nominated for election or elected to the Board of Directors with the approval of a majority of the board of directors then still in office or who were either directors immediately after the date of this Agreement or whose nomination or election was previously so approved.
“Control” or “Controlled” means, with respect to any person, the right to elect or appoint, directly or indirectly, a majority of the directors of such person or a majority of the persons who have the right, including any contractual right, to manage and direct the business, affairs and operations of such person or the possession of the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, by contract or otherwise.
“Crew” shall have the meaning set forth in clause 1 of each Shipmanagement Agreement.
“Draft Budget” shall have the meaning set forth in Section 10.1.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Executive Officers” means the Chief Executive Officer, the Chief Operating Officer (if any) and the Chief Financial Officer of the Parent.
“Force Majeure” shall have the meaning set forth in Section 11.1.
“Independent Directors” means those members of the Board of Directors that qualify as independent directors within the meaning of Rule 10A-3 promulgated under the Exchange Act and the listing criteria of the New York Stock Exchange.
“Initial Term” shall have the meaning set forth in Section 13.1.
“Insurance Broker” means each insurance or re-insurance broker, sub-broker or agent thereof providing marine insurance or re-insurance broking and/or advisory services to the Parent and/or any Subsidiary and/or a Vessel and “Insurance Brokers” means, together, all or any of them.
“Insurances” means in relation to a Vessel or the Parent or a Subsidiary:
(a) all policies and contracts of insurance or re-insurance; and
(b) all entries in a protection and indemnity or war risks or other mutual insurance association,
in the name of such person or persons in respect of or in connection with such Vessel or its owner and includes all benefits thereof (including the right to receive claims and to return of premiums).
“Insurer” means, in relation to the Parent and/or any Subsidiary and/or a Vessel, each insurance company, reinsurance company, protection and indemnity association and/or mutual association or other person offering any kind of Insurance to the Parent and/or such Subsidiary and/or such Vessel or in which the Parent and/or such Subsidiary is a member, partner or shareholder of and “Insurers” means, together, all or any of them.
“Konstantakopoulos Entities” means:
(a) Konstantinos Konstantakopoulos, Christos Konstantakopoulos, Achillefs Konstantakopoulos or Vassileios Konstantakopoulos;
(b) any spouse or lineal descendant of any of the individuals set out in paragraph (a) above;
(c) any person Controlled by, or under common Control with, any such individual or combination of such individuals as set out in paragraphs (a) and (b) above; and
(d) any trust or foundation where any of the individuals as set out in paragraphs (a) and (b) above or any person as set out in paragraph (c) is, in each case, a beneficiary.
“Management Fee” shall have the meaning set forth in Section 9.1.
“Management Services” shall have, in relation to a Vessel, the meaning set forth in clause 1 of the Shipmanagement Agreement applicable to such Vessel.
“Manager” shall have the meaning set forth in the preamble.
“Manager Related Parties” shall have the meaning set forth in Section 11.2.
“Newbuild” means a new vessel to be or which has just been constructed, or is under construction, pursuant to a shipbuilding contract or other related agreement entered into by the relevant Subsidiary.
“Parent” shall have the meaning set forth in the preamble.
“Questioned Items” shall have the meaning set forth in Section 10.2.
“Related Manager” means any Konstantakopoulos Entity or any Affiliate thereof, in each case, appointed as Submanager in accordance with the terms of this Agreement.
“Services” shall have the meaning set forth in Section 2.2.
“Ship” means any ocean-going vessel (whether in its construction phase or operational) that is intended to be used primarily to transport cargoes or goods (in dry, liquid, gas or in bulk or containerized on in any other form whatsoever).
“Shipmanagement Agreement” shall have the meaning set forth in Section 3.2.
“STCW 95” means the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, as amended in 1995 or any subsequent amendment thereto.
“Submanager” shall have the meaning set forth in Section 2.3.
“Subsequent Term” shall have the meaning set forth in Section 13.1.
“Subsidiaries” shall have the meaning set forth in the recitals.
“Supervision Agreement” shall have the meaning set forth in Section 3.3.
“Term” shall have the meaning set forth in Section 13.1.
“Vessels” shall have the meaning set forth in the recitals.
“V.Ships” means V.Ships Greece Ltd, Par-La Ville Place 14, Par-La Ville Road, Hamilton HM08, Bermuda and includes its successors in title and permitted assignees.
“V.Ships (UK)” means V.Ships UK Ltd, a company duly incorporated and existing under the laws of England and Wales and having its registered office at 63 Queen Victoria Street, London, EC4N 4UA, United Kingdom.
“York” means York Capital Management Global Advisors LLC, Sparrow Holdings, L.P., Bluebird Holdings, L.P. and certain affiliated funds on whose behalf York Capital Management Global Advisors LLC has entered into the Framework Deed between the Parent, Costamare Ventures Inc. and York dated 15 May 2013 as amended and restated from time to time.
SECTION 1.2. The headings of this Agreement are for ease of reference and do not limit or otherwise affect the meaning hereof.
SECTION 1.3. All the terms of this Agreement, whether so expressed or not, shall be binding upon the parties hereto and their respective successors and assigns.
SECTION 1.4. In the event of any conflict between this Agreement, any Shipmanagement Agreement or any Supervision Agreement, the provisions of this Agreement shall prevail.
SECTION 1.5. Unless otherwise specified, all references to money refer to the legal currency of the United States of America.
SECTION 1.6. Unless the context otherwise requires, words in the singular include the plural and vice versa.
SECTION 1.6. Unless the context otherwise requires, words in the singular include the plural and vice versa.
SECTION 1.7. The words “include”, “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation” and shall not be construed to limit any general statement which it follows to the specific or similar items or matters immediately following it.
SECTION 1.8. Any reference to “person” includes an individual, body corporate, limited liability company, partnership, joint venture, cooperative, trust or unincorporated organization, association, trustee, domestic or foreign government or any agency or instrumentality thereof, or any other entity recognized by law.
SECTION 1.9. Any reference to an enactment shall be deemed to include reference to such enactment as re-enacted, amended or extended.
SECTION 1.10. Any reference to (or to any specified provision of) this Agreement or any other document shall be construed as reference to this Agreement, that provision or that document as in force for the time being and as amended in accordance with the terms thereof, or, as the case may be, with the agreement of the relevant parties.
SECTION 1.11. Any reference to clauses, appendices and schedules shall be construed as reference to clauses of, appendices to and schedules to this Agreement and references to this Agreement includes its appendices and schedules.
ARTICLE II
APPOINTMENT
SECTION 2.1. The Parent shall procure that the Manager shall be appointed by (a) each Subsidiary pursuant to the provisions of Section 3.3 as the technical and/or commercial manager of each such Subsidiary’s Vessel on the terms and conditions of the relevant Shipmanagement Agreement and (b) each Subsidiary to be acquiring a Newbuild, pursuant to the provisions of Section 3.4 as the supervisor of the construction thereof on the terms and conditions of the relevant Supervision Agreement.
SECTION 2.2. The Manager agrees to provide:
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(a) |
the services specified in Articles V and VI of this Agreement; |
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(b) |
the services specified in each Supervision Agreement; and |
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(c) |
the Management Services in respect of each Vessel specified |
in each Shipmanagement Agreement (the services to be provided under Sections 2.2(a), 2.2(b) and 2.2(c) collectively the “Services”).
The Parent and the Manager each hereby agree that in the performance of this Agreement, any Supervision Agreement or any Shipmanagement Agreement, the Manager or, as the case may be, any Submanager, is acting solely on behalf of, as agent of and for the account of, the relevant Subsidiary. The Manager or, as the case may be, the relevant Submanager may advise persons with whom it deals on behalf of the relevant Subsidiary that it is conducting such business for and on behalf of such Subsidiary.
SECTION 2.3. The Manager may upon notice to the Parent appoint any person (a “Submanager”) at any time throughout the duration of this Agreement to discharge any of the Manager’s duties under this Agreement or a Shipmanagement Agreement or a Supervision Agreement, provided that if such person is not a Related Manager or V.Ships, the Manager shall obtain the written Consent of the Parent prior to such appointment (such Consent of the Parent shall not be unreasonably withheld or delayed). The Manager shall appoint a Submanager either by entering into a management agreement or supervision agreement (such management agreement or supervision agreement to be on terms to be agreed between the parties thereto and only in respect of the services that the Manager wishes such Submanager to discharge) directly with such Submanager (for the avoidance of doubt, unless otherwise agreed in writing, no Subsidiary shall have any responsibility for any fees or costs incurred under any such management agreement or supervision agreement) or by directing such Submanager to enter into a management agreement or supervision agreement directly with the relevant Subsidiary (such management agreement or supervision agreement to be on terms to be agreed between the parties thereto and only in respect of the services that the Manager wishes such Submanager to discharge). The Parent shall procure that each Subsidiary shall provide written confirmation to the Manager or, as the case may be, a Submanager, that such member’s Vessel is commercially and/or technically managed by the Manager or, as the case may be, the relevant Submanager.
SECTION 2.4. The Manager’s power to delegate performance of any provision of this Agreement, including delegation by directing a Submanager to enter into a management agreement or supervision agreement directly with a Subsidiary in accordance with Section 2.3, shall not limit the Manager’s liability to perform this Agreement with the intention that the Manager shall remain responsible for the due and timely performance of all duties and responsibilities of the Manager hereunder, PROVIDED HOWEVER, that to the extent that any Submanager has performed any such duty, the Manager shall not be under any obligation to perform again the same duty.
ARTICLE III
THE PARENT’S GENERAL OBLIGATIONS
SECTION 3.1. The Parent shall notify the Manager as soon as possible of any purchase of any vessel by a Subsidiary (whether the same is a second-hand vessel or a Newbuild), the delivery of any Newbuild from the relevant builder or intermediate seller to the relevant Subsidiary to take ownership of such Newbuild, the sale of any Vessel, the purchase or creation of any direct or indirect subsidiary of the Parent or the sale or divestiture of any Subsidiary and shall promptly amend Schedule A, to be reflective of any such development. Such amended Schedule A shall be effective on any such day as mutually agreed by the Parent and the Manager, which date shall be no later than five Business Days after delivery of such amended Schedule A to the Manager by the Parent.
SECTION 3.2. For each Vessel the Parent shall cause the relevant Subsidiary to enter into with the Manager, and the Manager shall enter into with such Subsidiary, a contract substantially in the form attached as Appendix I (each a “Shipmanagement Agreement” and, collectively, the “Shipmanagement Agreements”), with such alterations and additions as are appropriate.
SECTION 3.3. For each Newbuild the Parent shall cause the relevant Subsidiary to enter into with the Manager, and the Manager shall enter into with such Subsidiary, a contract substantially in the form attached as Appendix II (each a “Supervision Agreement” and, collectively, the “Supervision Agreements”) with such alterations and additions as are appropriate.
SECTION 3.4. The Parent shall procure that each relevant Subsidiary (a) performs its obligations under any Shipmanagement Agreement or any Supervision Agreement to which it is a party and (b) does not take any action or omit to take any action the effect of which is to cause the Subsidiaries or the Manager or a Submanager to be in breach of this Agreement, any Shipmanagement Agreement and/or any Supervision Agreement.
SECTION 3.5. The Parent agrees that, save for any Konstantakopoulos Entity, any Affiliate thereof, either Bluenet Entity or, in respect of the crewing arrangements of some of the Vessels, V.Ships (UK) Ltd., the Manager has been engaged to provide the Services on an exclusive basis and, without receiving the prior written approval of the Manager or before it has lawfully terminated this Agreement in accordance with its terms, it will procure that no Subsidiary shall engage any other entity to provide any of the Services (unless such engagement only becomes effective after the termination of this Agreement).
ARTICLE IV
THE MANAGER’S GENERAL OBLIGATIONS
SECTION 4.1. In the exercise of its duties hereunder, the Manager shall act in accordance with the reasonable policies, guidelines and instructions from time to time communicated to it in writing by any Subsidiary.
SECTION 4.2. For each Vessel or, as the case may be, Newbuild the Manager shall act and do all and/or any of the acts or things described in this Agreement and the relevant Shipmanagement Agreement or Supervision Agreement applicable to each such Vessel or Newbuild in the name and/or on behalf of the relevant Subsidiary or Subsidiaries.
SECTION 4.3. The Manager acknowledges that the services it will provide pursuant to the Shipmanagement Agreements or the Supervision Agreements are not limited to the services described in such agreements and include those set forth in this Agreement.
SECTION 4.4. The Manager shall exercise commercially reasonable care to cause all material property of any Subsidiary to be clearly identified as such, held separately from the property of the Manager and, where applicable, held in safe custody.
SECTION 4.5. The Manager shall exercise commercially reasonable care to cause adequate manpower to be employed by it to perform its obligations under this Agreement, PROVIDED HOWEVER, that the Manager, in the performance of its responsibilities under this Agreement, shall be entitled to have regard to its overall responsibilities in relation to the servicing of its clients and in particular, without prejudice to the generality of the foregoing, the Manager shall be entitled to allocate available resources and services in such manner as in the prevailing circumstances the Manager considers to be fair and reasonable.
SECTION 4.6. The Manager, in the performance of its responsibilities under this Agreement, any Supervision Agreement or any Shipmanagement Agreement, shall exercise commercially reasonable care to cause any purchases of products or services from any of its Affiliates to be on terms no less favorable to the Manager than the market prices for products or services that the Manager could obtain on an arm’s length basis from unrelated parties.
SECTION 4.7. During the term hereof, the Manager agrees that it will provide the Services to the Subsidiaries on an exclusive basis and, without receiving the prior Consent of the Parent, it will not provide any Services or other services contemplated herein to any entity other than the Subsidiaries, any Konstantakopoulos Entity or any Affiliate thereof; provided, however, the Manager may also provide the Services to entities formed pursuant to the Framework Deed between the Parent, Costamare Ventures Inc. and York dated 15 May 2013 as amended from time to time.
SECTION 4.8. If a Vessel (which expression for the purposes of this Section shall include any Newbuild to be acquired by a Subsidiary) and a Ship directly or indirectly owned or operated by a third party are both available and meet the criteria for a charter being fixed by the Manager, the Vessel shall be offered such charter first and the Parent shall have 48 hours from such offer being received to accept such offer, failing which such charter shall be then offered to the relevant third party.
SECTION 4.9. The Manager shall at all times maintain appropriate and necessary accounts and records as regards the Services and shall make the same available for inspection and auditing by the Parent at such times as may be mutually agreed by the Manager, on the one hand, and the Parent, on the other hand.
ARTICLE V
ADMINISTRATIVE SERVICES
SECTION 5.1. The Manager shall provide certain general administrative services to the Subsidiaries, including, but not limited to, the following (in the case of paragraphs (a) to (e) and paragraph (i) below, upon the request of the Parent):
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(a) |
keeping all books and records of things done and transactions performed on behalf of any Subsidiary and/or the Parent (as the case may be) as it may require from time to time, including, but not limited to, liaising with accountants, lawyers and other professional advisors and maintaining the necessary technical infrastructure such as computer network, PCs etc.; |
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(b) |
except as otherwise contemplated herein, representing any Subsidiary generally in its dealings and relations with third parties; |
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(c) |
maintaining the general ledgers of the Subsidiaries and/or the Parent (as the case may be), preparation of periodic consolidated financial statements of the Parent and/or the Subsidiaries (as the case may be), including, but not limited to, those required for governmental and regulatory or self-regulatory agency filings and reports to shareholders, arranging of the auditing and/or review of any such financial statements and the provision of related data processing services; |
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(d) |
preparing and providing (or procuring, at the relevant Subsidiary’s cost, a third party service provider to prepare and provide) tax returns required by any law or regulatory authority; |
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(e) |
arranging for the provision of advisory services (either directly or, at the relevant Subsidiary’s cost, through a third party service provider) to ensure such Subsidiary is in compliance with all applicable laws, including all relevant securities laws; |
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(f) |
either directly or, at the relevant Subsidiary’s cost, through a third party service provider (such as by appointing lawyers), providing for the presentation, negotiation, settlement, prosecution or defense of any claim, demand or petition on behalf of such Subsidiary arising in connection with the business of such Subsidiary for an amount not exceeding US$1,000,000 or its equivalent, including the pursuit by such Subsidiary of any rights of indemnification or reimbursement; |
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(g) |
administering payroll services, benefits and director’s or consultant’s fees, as applicable, for any person providing services of an employee, officer, consultant or director of a Subsidiary; |
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(h) |
handling general and administrative expenses of each Subsidiary; |
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(i) |
assisting each Subsidiary and/or the Parent (as the case may be) in establishing and maintaining a system of internal controls sufficient to satisfy any applicable law or regulatory requirements; and |
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(j) |
maintaining, at the relevant Subsidiary’s cost, such Subsidiary’s corporate existence, qualification and good standing in all necessary jurisdictions and assisting in all other corporate and regulatory compliance requirements. |
ARTICLE VI
COMMERCIAL SERVICES
SECTION 6.1. In addition to any commercial services provided under clause 3.3 of each Shipmanagement Agreement, the Manager shall provide the following commercial services to the Subsidiaries:
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(a) |
performing class records review and physical inspections in respect of any vessel considered for purchase by a Subsidiary; |
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(b) |
at the request of the relevant Subsidiary, providing administrative services in connection with the purchase of a second-hand vessel or the acquisition and sale of a Newbuild, in either case by such Subsidiary; |
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(c) |
managing relationships between the Subsidiaries and any existing or potential charterers, shipbuilders, insurers, lenders, shipmanagers and other shipping industry service providers/participants; |
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(d) |
at the request of a Subsidiary, providing certain services in connection with such Subsidiary taking physical delivery of a vessel, registering a vessel under a ship register, tendering physical delivery of a Vessel or deleting a Vessel from the applicable port of registry, in each case on behalf of such Subsidiary. |
ARTICLE VII
INTENTIONALLY OMITTED
ARTICLE VIII
INTENTIONALLY OMITTED
ARTICLE IX
MANAGEMENT FEES AND EXPENSES
SECTION 9.1. In consideration of the Manager providing the Services to the Subsidiaries, the Parent shall pay the Manager the following fees (together, the “Management Fees” and, on a per Vessel basis, the “Management Fee”):
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(a) |
subject to Sections 9.2 and 9.3, a fee of US$956 per day per Vessel during the term of this Agreement payable monthly in arrears (pro rated to reflect the actual number of days that the relevant Subsidiary owns or charters-in each Vessel during the applicable month), unless a Vessel is chartered-out to a third party on a bareboat charter basis, in which case the fee payable to the Manager for such Vessel during the term of this Agreement shall be, subject to Sections 9.2 and 9.3, US$478 per day, PROVIDED HOWEVER, that when in respect of certain services to a Vessel the Manager appoints a Submanager in accordance with Section 2.3 and such Submanager enters into a management agreement directly with the relevant Subsidiary (the “direct agreement”), the fees payable by the Parent and/or such Subsidiary under this Agreement and/or any relevant Shipmanagement Agreement in respect of such Vessel pursuant to Section 9.1(a) shall be US$956 per day, or as the case may be, US$478 per day minus, in each case, the fees per day payable by such Subsidiary to such Submanager under the relevant direct agreement in respect of such Vessel; |
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(b) |
a fee equal to 0.15% calculated on the aggregate of the gross freight, demurrage, charter hire, ballast bonus or other income obtained for the employment of each Vessel during the term of this Agreement, payable to the Manager monthly in arrears, only to the extent such freight, demurrage, charter hire, ballast bonus or other income, as the case may be, is received as revenue; and |
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(c) |
subject to Sections 9.2 and 9.3, a fee of US$787,405 per Newbuild under construction for the services rendered by the Manager under the Supervision Agreement in respect of such Newbuild, payable in accordance with the terms of such Supervision Agreement. |
SECTION 9.2. The Management Fees will be fixed and shall not be subject to adjustment for Euro/U.S. Dollar exchange rate fluctuations or inflation for the term of this Agreement, save that for the 12-month period starting on January 1, 2016 and for each subsequent 12-month period falling thereafter (each such 12-month period referred to hereinafter as an “Annual Period”), the Management Fee for each Vessel payable pursuant to Section 9.1(a) or Section 9.1(c) will be adjusted pursuant to Section 9.3.
SECTION 9.3. The Management Fee for each Vessel payable pursuant to Section 9.1(a) or Section 9.1(c), for the Annual Period commencing on January 1, 2016 and each subsequent Annual Period thereafter, will, in each case, be adjusted upwards with effect from the beginning of such Annual Period if:
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(a) |
the average of the Euro/U.S. Dollar exchange rates during the 12-month period ending on the last day of the month of September falling before the commencement date of such Annual Period (such average being the average over the applicable period, as calculated by the Manager from the Euro Foreign Exchange Reference Rate published daily at 15:00 CET by the European Central Bank on www.ecb.int) evidence that the Euro has strengthened against the U.S. Dollar by more than five per cent (5%) from: |
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(i) |
in the case of the first Annual Period starting on January 1, 2016, the rate existing on the business day immediately prior to the date of this Agreement, and |
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(ii) |
in the case of each subsequent Annual Period, the previous Euro/U.S. Dollar average calculated for the purposes of this Section 9.3 in respect of the immediately previous Annual Period, |
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| by the average percentage amount by which the Euro has in each such case so strengthened against the U.S. Dollar; and/or | ||
| (b) | the Manager has incurred a material unforeseen increase in the cost of providing the Services, by an amount to be agreed between the Manager and the Parent, each acting in a commercially reasonable manner. | |
SECTION 9.4. The Manager shall, subject to Section 9.5, pay for all usual office expenses incurred by it as the Manager.
SECTION 9.5. The Parent hereby acknowledges that any capital expenditure, financial costs, operating expenses for each Vessel and any general and administrative expenses of the Subsidiaries whatsoever are not covered by the Management Fees and any such expenditure, costs and expenses shall be paid fully by the Parent or the applicable Subsidiary, whether directly to third parties (which for the avoidance of doubt shall include any Submanager) or by payment to such third parties through the Manager and, without prejudice to Section 10.8, to the extent incurred by the Manager, shall be reimbursed to it by the Parent and/or any Subsidiary the Manager seeks, in its discretion, reimbursement from. The said capital expenditure, financial costs, operating expenses for each Vessel and general and administrative expenses of the Subsidiaries include, without limiting the generality of the foregoing, items such as:
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(a) |
fees, interest, principal and any other costs due to the Subsidiaries’ financiers and their respective advisors; |
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(b) |
all voyage expenses and vessel operating and maintenance expenses relating to the operation and management of the Vessels (including Crew costs, surveyor’s attendance fees, bunkers, lubricant oils, spares, survey fees, classification society fees, maintenance and repair costs, vetting expenses, etc.); |
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(c) |
any commissions, fees, remuneration or disbursements due to lawyers, brokers, agents, surveyors, consultants, financial advisors, investment bankers, insurance advisors or any other third parties whatsoever appointed by the Manager whether in its name or on behalf and/or in the name of any Subsidiary; |
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(d) |
any commissions, fees, remuneration or disbursements due to lawyers, brokers, agents, surveyors, consultants, financial advisors, investment bankers, insurance advisors or any other third parties (other than, if applicable, a Related Manager) whatsoever sub-contracted to the Manager in the normal and reasonable course of meeting the Manager’s duties and obligations under this Agreement or any Shipmanagement Agreement or any Supervision Agreement including the duties provided in Articles V and VI of this Agreement; |
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(e) |
applicable deductibles, insurance premiums and/or P&I calls; |
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(f) |
postage, communication, traveling, lodging, victualling, overtime, out of office compensation and out of pocket expenses of the Manager and/or its personnel, incurred in pursuance of the Services; and |
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(g) |
any other out of pocket expenses that are incurred by the Manager in the performance of the Services pursuant to this Agreement, any Supervision Agreement or any Shipmanagement Agreement. |
SECTION 9.6. The Manager shall have the right to demand the Management Fee payable in relation to each Vessel from either the Parent or the Subsidiary owning such Vessel under the terms of the relevant Shipmanagement Agreement. By written notice to the Parent, the Manager may direct the Parent to pay any amounts owing by the Manager to any Submanager pursuant to a subcontract of any provisions of this Agreement or any Shipmanagement Agreement or any Supervision Agreement, directly to the relevant Submanager. Notwithstanding anything to the contrary contained, provided or implied in this Agreement, any Supervision Agreement or any Shipmanagement Agreement, the Manager shall be entitled to receive and retain any address commission, other commission, credit (whether discretionary or not), continuity credit (whether annual, semi-annual or other), dividend, distribution, charge, fee (whether advisory or otherwise), interest, premium refund, return premium, allowance, discount, rebate or other similar amount payable to, declared (including by way of set-off, combination of accounts or otherwise) in favour of or allocated in favour of the Parent, any Subsidiary or any other assured, co-assured, joint assured or member by an Insurer in relation to or in connection with the relevant Insurances, unless the Manager expressly directs otherwise. In addition the Parent shall, and shall procure that each Subsidiary shall, instruct the relevant Insurers and Insurance Brokers to hold on behalf of and/or pass to the Manager any such commissions, credits, fees, allowances, discounts, rebates etc.
SECTION 9.7. In the event that a Shipmanagement Agreement is terminated, other than by reason of default by the Managers, the Management Fee payable to the Manager under Section 9.1(a) for the Vessel subject to such Shipmanagement Agreement shall be payable in respect of such Vessel for a further period of three months from the termination date. The fees payable for the said three months shall be paid in one lump sum in advance on the termination of the relevant Shipmanagement Agreement. In addition the relevant Subsidiary shall pay any Severance Costs (as such term is defined in the relevant Shipmanagement Agreement) for the relevant Vessel which may materialize.
ARTICLE X
BUDGETS, CORPORATE PLANNING AND EXPENSES
SECTION 10.1. On or before October 1 of each calendar year, the Manager shall prepare and submit to the Executive Officers a detailed draft budget for the next calendar year in a format acceptable to the Executive Officers and the Board of Directors and generally used by the Manager which shall include a statement of estimated revenue and out-of-pocket expenses in providing the Services (the “Draft Budget”).
SECTION 10.2. For a period of 20 days after receipt of the Draft Budget, the Executive Officers, from time to time, may request further details and submit written comments on the Draft Budget. If the Executive Officers do not agree with any item of the Draft Budget, they will, within the same 20-day period, give the Manager notice of any inquiries to the Draft Budget, which notice will include the list of items under consideration (the “Questioned Items”) and a proposal for the resolution of each such Questioned Item. The Executive Officers and the Manager will endeavor to resolve any such differences between them with respect to the Questioned Items, failing which the relevant Questioned Items shall be left as presented by the Manager. If the Executive Officers do not present any Questioned Items within such 20-day period, they will be deemed to have accepted the Draft Budget and such Draft Budget shall be deemed to be the Approved Budget (as defined in Section 10.3).
SECTION 10.3. By November 15 of the relevant calendar year (or such later date as the Manager and the Board of Directors deem appropriate), and to the extent that changes are required to the Draft Budget pursuant to Section 10.2, the Manager will prepare and deliver to the Parent a revised budget that has been approved by the Executive Officers (the “Approved Budget”). However, the Parent acknowledges that the Approved Budget is only an estimate of the performance of the Vessels and/or the Subsidiaries and the Manager makes no assurance, representation or warranty that the actual performance of the Vessels and/or the Subsidiaries in any relevant calendar year will correspond to the estimates contained in the Approved Budget for that calendar year. Notwithstanding the provisions of Section 10.2 and this Section 10.3, the Approved Budget for the 2015 calendar year shall be the 2015 revised budget that has been previously approved by the Parent.
SECTION 10.4. The Manager may, from time to time, in any calendar year propose amendments to the Approved Budget upon 15 days notice to the Parent, in which event the Executive Officers will have the right to approve the amendments in accordance with the process set out in Section 10.2 with the relevant time periods being amended accordingly.
SECTION 10.5. Once the Approved Budget has been delivered, the Manager shall prepare and present to the Parent its estimate of the working capital requirements of the Vessels and the Subsidiaries and the Manager shall each month update this estimate. Based thereon, the Manager shall each month make a request to the Parent and/or, as the case may be, the relevant Subsidiaries, in writing for the funds required to provide the Services to the Subsidiaries and to operate each Vessel for the ensuing month, including the payment of any occasional or extraordinary item of expenditure, such as emergency repair costs, additional insurance premiums, bunkers or provisions. The Manager may also make a request in writing to the Parent and/or, as the case may be, the relevant Subsidiaries, at any time for funds required for the payment of any occasional or extraordinary item of expenditure, such as emergency repair costs, additional insurance premiums, bunkers or provisions. Such funds shall be received by the Manager within ten calendar days after the receipt by the Parent or, as the case may be, the relevant Subsidiary of the Manager’s written request and shall be held in a separate bank account in the name of the Manager or, if requested by the Manager, in the name of the Parent or of the relevant Subsidiary.
At the end of each quarter or, if the Manager from time to time so requires, month, the Manager shall preliminarily reconcile the amounts advanced to it by the Parent or, as the case may be, the relevant Subsidiary, with the amounts actually expended by it for the operation of each of the Vessels and/or the Subsidiaries, and (a) the Manager shall remit to the Parent, or credit to the Parent amounts to be advanced to it hereunder for future months, any unused portion of the amounts previously advanced by the Parent or, as the case may be, the relevant Subsidiary, or (b) the Parent shall pay to the Manager any amounts properly expended by the Manager in excess of the amounts previously advanced by the Parent or, as the case may be, the relevant Subsidiary. The Parent and the Manager shall reconcile any amounts due to the Parent by the Manager or due to the Manager by the Parent for each fiscal year of the Parent as promptly as practicable following the close of each such fiscal year. Without prejudice to Section 10.8, any expenses incurred by the Manager under the terms of this Agreement on behalf of any Subsidiary may be debited against the account of the respective Subsidiary, but shall in any event remain payable by the Parent and the relevant Subsidiary to the Manager on demand.
SECTION 10.6. The Manager shall also maintain the records of all costs and expenses incurred, including any invoices, receipts and supplementary materials as are necessary or proper for the settlement of accounts.
SECTION 10.7. Insofar as any moneys are collected from third parties by the Manager under the terms of any Shipmanagement Agreement and/or any Supervision Agreement (other than moneys payable by a Subsidiary to the Manager), such moneys and any interest thereon shall be held to the credit of the relevant Subsidiary in a separate bank account in the name thereof. Interest on any such bank account shall be for the benefit of the relevant Subsidiary.
SECTION 10.8. Notwithstanding anything contained herein to the contrary, the Manager shall in no circumstances be required to use or commit its own funds to finance the provision of the Services.
SECTION 10.9. To the extent that a Related Manager has been appointed in accordance with the terms of Section 2.3, it is agreed by the Parent and the Manager for the benefit of such Related Manager that the provisions of Article X shall apply to such Related Manager as if such provisions were repeated herein, but with references to:
|
(a) |
the “Manager” being deemed as references to the relevant Related Manager; |
|
|
(b) |
the “Services” being deemed as references to the services to be performed by such Related Manager under the relevant management agreement; |
|
|
(c) |
the “Vessels” being deemed as references to the Vessels being managed by such Related Manager under a management agreement entered into directly with the relevant Subsidiaries; |
|
(d) |
the “Parent” being deemed as references to the relevant Subsidiaries; and |
|
|
(e) |
references to “this Agreement, any Shipmanagement Agreement and/or any Supervision Agreement” being deemed as references to any management agreement signed by such Related Manager directly with the relevant Subsidiaries members. |
ARTICLE XI
LIABILITY AND INDEMNITY
SECTION 11.1. Save for the obligation of the Parent to pay any moneys due to the Manager hereunder, neither any Subsidiary nor the Manager shall be under any liability to the other for any failure to perform any of their obligations hereunder by reason of Force Majeure. “Force Majeure” shall mean any cause whatsoever of any nature or kind beyond the reasonable control of the relevant Subsidiary or the Manager, including, without limitation, acts of God, acts of civil or military authorities, acts of war or public enemy, acts of any court, regulatory agency or administrative body having jurisdiction, insurrections, riots, strikes or other labor disturbances, embargoes or other causes of a similar nature.
SECTION 11.2. The Manager, including its officers, directors, employees, shareholders, agents, sub-contractors and any Submanager (the “Manager Related Parties”) shall be under no liability whatsoever to the Parent, any Subsidiary or to any third party (including the Crew) for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect (including but not limited to loss of profit arising out of or in connection with detention of or delay to a Vessel), and howsoever arising in the course of the performance of this Agreement, any Shipmanagement Agreement or any Supervision Agreement, unless and to the extent that the same is proved to have resulted solely from the gross negligence or willful misconduct of the Manager, its officers, employees, agents, sub-contractors or any Submanager.
SECTION 11.3. Notwithstanding anything that may appear to the contrary in this Agreement or any Shipmanagement Agreement, the Manager shall not be liable for any of the actions of the Crew, even if such actions are negligent, grossly negligent or willful, except only to the extent that they are shown to have resulted from a failure by the Manager to discharge its obligations under clause 3.1 of each Shipmanagement Agreement, in which case the Manager’s liability shall be limited in accordance with the terms of this Article XI.
SECTION 11.4. The Parent shall indemnify and hold harmless the Manager Related Parties against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of this Agreement, any Shipmanagement Agreement or any Supervision Agreement and against and in respect of any loss, damage, delay or expense of whatsoever nature (including legal costs and expenses on a full indemnity basis), whether direct or indirect, incurred or suffered by any Manager Related Party arising out of or in connection with the performance of this Agreement, any Shipmanagement Agreement and any Supervision Agreement, unless incurred or suffered due to the gross negligence or willful misconduct of any Manager Related Party.
SECTION 11.5. It is hereby expressly agreed that no employee or agent of the Manager (including any sub-contractor from time to time employed by the Manager) shall in any circumstances whatsoever be under any liability whatsoever to the Parent, any Subsidiary or any third party for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in connection with his employment or agency and, without prejudice to the generality of the foregoing provisions in this Article XI, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defense and immunity of whatsoever nature applicable to the Manager or to which the Manager is entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Manager acting as aforesaid, and for the purpose of all the foregoing provisions of this Article XI, the Manager is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be the Manager’s servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement. Nothing in this Section 11.5 shall be construed so as to further limit any liability the Manager may have to the Subsidiaries under Section 11.2.
SECTION 11.6. The provisions of this Article XI shall survive any termination of this Agreement.
ARTICLE XII
RIGHTS OF THE MANAGER AND RESTRICTIONS ON THE MANAGER’S AUTHORITY
SECTION 12.1. Except as may be provided in this Agreement or in any separate written agreement between the Parent or any Subsidiary and the Manager or a Submanager, the Manager and any Submanager shall be an independent contractor and not the agent of the Parent or any Subsidiary and shall have no right or authority to incur any obligation on behalf of the Parent or any Subsidiary or to bind the Parent and/or any Subsidiary in any way whatsoever. Nothing in this Agreement shall be deemed to make the Manager or any Submanager or any of their subsidiaries or employees an employee, joint venturer or partner of the Parent or any Subsidiary.
SECTION 12.2. The Parent acknowledges that the Manager or, as the case may be, any Submanager shall have no responsibility hereunder, direct or indirect, with regard to the formulation of the business plans, policies, management or strategies (financial, tax, legal or otherwise) of the Parent or any Subsidiary, which is solely the responsibility of the Parent and each respective Subsidiary. The Parent and each Subsidiary shall set its corporate policies independently through its respective board of directors and executive officers and nothing contained herein shall be construed to relieve such directors or officers from the performance of their duties or to limit the exercise of their powers.
SECTION 12.3. Notwithstanding the other provisions of this Agreement:
|
(a) |
the Manager or, as the case may be, any Submanager may act with respect to a Subsidiary upon any advice, resolutions, requests, instructions, recommendations, direction or information obtained from such Subsidiary or any banker, accountant, broker, lawyer or other person acting as agent of or adviser to such Subsidiary and the Manager or, as the case may be, the relevant Submanager shall incur no liability to such Subsidiary for anything done or omitted or suffered in good faith in reliance upon such advice, instruction, resolution, recommendation, direction or information made or given by such Subsidiary or its agents, in the absence of gross negligence or willful misconduct by the Manager or, as the case may be, the relevant Submanager or their respective servants, and shall not be responsible for any misconduct, mistake, oversight, error of judgment, neglect, default, omission, forgetfulness or want of prudence on the part of any such banker, accountant, broker, lawyer, agent or adviser or other person as aforesaid; |
|
|
(b) |
the Manager or, as the case may be, a Submanager shall not be under any obligation to carry out any request, resolution, instruction, direction or recommendation of the Parent or any Subsidiary or their respective agents if the performance thereof is or would be illegal or unlawful; and |
|
|
(c) |
the Manager or, as the case may be, the relevant Submanager shall incur no liability to the Parent or any Subsidiary for doing or failing to do any act or thing which it shall be required to do or perform or forebear from doing or performing by reason of any provision of any law or any regulation or resolution made pursuant thereto or any decision, order or judgment of any court or any lawful request, announcement or similar action of any person or body exercising or purporting to exercise the legitimate authority of any government or of any central or local governmental institution in each case where the above entity has jurisdiction. |
ARTICLE XIII
TERMINATION OF THIS AGREEMENT
SECTION 13.1. This Agreement shall be effective as of the date hereof and, subject to Sections 13.2, 13.3, 13.4 and 13.5, shall continue until December 31, 2015 (the “Initial Term”). Thereafter the term of this Agreement shall be extended on a year-to-year basis for up to fifteen times (each a “Subsequent Term”) unless the Parent, at least 12 months prior to the end of the then current term, gives written notice to the Manager that it wishes to terminate this Agreement at the end of the then current term. In no event will the term of this Agreement (the “Term”) extend beyond the date falling ten years after the last day of the Initial Term.
SECTION 13.2. The Parent shall be entitled to terminate this Agreement by notice in writing to the Manager if:
|
(a) |
the Manager defaults in the performance of any material obligation under this Agreement, subject to a cure right of 20 Business Days following written notice by the Parent, PROVIDED ALWAYS, that any default of the Manager to perform any of its obligations under a particular Shipmanagement Agreement or any Supervision Agreement, shall not, in itself, entitle the Parent to terminate this Agreement pursuant to this Section 13.2(a) and shall only allow the relevant Subsidiary to terminate the relevant Shipmanagement Agreement or Supervision Agreement; |
|
|
(b) |
any moneys due and payable to the Parent or third parties by the Manager under this Agreement is not paid or accounted for within 10 Business Days following written notice by the Parent; |
|
|
(c) |
there is a Change in Control of the Manager; or |
|
|
(d) |
the Manager is convicted of, enters a plea of guilty or nolo contendere with respect to, or enters into a plea bargain or settlement admitting guilt for a crime (including, for the avoidance of doubt, fraud), which conviction, plea bargain or settlement is demonstrably and materially injurious to the Parent, PROVIDED ALWAYS, such crime is not a misdemeanor and PROVIDED ALWAYS further that such crime has been committed solely and directly by an officer or director of the Manager acting within the terms of his or her employment or office. |
SECTION 13.3. The Manager shall be entitled to terminate this Agreement by notice in writing to the Parent if:
|
(a) |
any moneys payable by the Parent under this Agreement is not paid when due or if due on demand within 20 Business Days following demand by the Manager; |
|
|
(b) |
the Parent defaults in the performance of any other material obligations under this Agreement, subject to a cure right of 20 Business Days following written notice by the Manager; or |
|
|
(c) |
there is a Change in Control of the Parent; |
SECTION 13.4. Either party shall be entitled to terminate this Agreement by notice in writing to the other party if:
|
(a) |
the other party ceases to conduct business, or all or substantially all of the equity-interests, properties or assets of such other party are sold, seized or appropriated which, in the case of seizure or appropriation, is not discharged within 20 Business Days; |
|
|
(b) |
(i) the other party files a petition under any bankruptcy law, makes an assignment for the benefit of its creditors, seeks relief under any law for the protection of debtors or adopts a plan of liquidation; (ii) a petition is filed against the other party seeking to have it declared insolvent or bankrupt and such petition is not dismissed or stayed within 90 Business Days of its filing; (iii) the other party shall admit in writing its insolvency or its inability to pay its debts as they mature; (iv) an order is made for the appointment of a liquidator, manager, receiver or trustee of the other party of all or a substantial part of its assets; (v) if an encumbrancer takes possession of or a receiver or trustee is appointed over the whole or a substantial part of the other party’s undertaking, property or assets; or (vi) if an order is made or a resolution is passed for the other party’s winding up; |
|
|
(c) |
the other party is prevented from performing its obligations hereunder, in any material respect, by reasons of Force Majeure for a period of two or more consecutive months; or |
|
|
(d) |
all Supervision Agreements and all Shipmanagement Agreements are terminated in accordance with the respective terms thereof. |
SECTION 13.5. Upon the effective date of termination pursuant to this Article XIII, the Manager shall promptly terminate its services hereunder, after taking reasonable commercial steps to minimize any interruption to the business of the Subsidiaries.
SECTION 13.6. Upon termination, the Manager shall, as promptly as possible, submit a final accounting of funds received and disbursed under this Agreement, any Supervision Agreement and/or any Shipmanagement Agreement and of any remaining Management Fees and/or any other funds due from the Parent or any other Subsidiary, calculated pro rata to the date of termination, and any non-disbursed funds of any Subsidiary in the Manager’s possession or control will be paid by the Manager as directed by such Subsidiary promptly upon the Manager’s receipt of all sums then due to it under this Agreement, any Supervision Agreement and/or any Management Agreement, if any.
SECTION 13.7. Upon termination of this Agreement, the Manager shall release to the relevant Subsidiaries the originals where possible, or otherwise certified copies, of all such accounts and all documents specifically relating to each Vessel or the provision of the Services.
SECTION 13.8. Upon termination of this Agreement either by the Manager for any reason (other than pursuant to Section 13.4(c)) or by the Parent pursuant to Section 13.1, the Parent shall be liable to pay to the Manager as liquidated damages an amount in U.S. Dollars equal to the lesser of (a) ten times and (b) the number of full years remaining prior to the date falling ten years after the last day of the Initial Term times, in each case, the aggregate fees due and payable to the Manager under the terms of this Agreement during the 12-month period ending on the date of termination of this Agreement (without taking into account any reduction to the fees payable to the Manager under Section 9.1(a) in the event that a Submanager has been appointed as provided therein), PROVIDED ALWAYS, that the amount of liquidated damages payable hereunder shall never be less than two times the aggregate fees due and payable to the Manager under the terms of this Agreement during the 12-month period ending on the date of termination of this Agreement.
SECTION 13.9. The provisions of this Article XIII shall survive any termination of this Agreement.
ARTICLE XIV
NOTICES
SECTION 14.1. All notices, consents and other communications hereunder, or necessary to exercise any rights granted hereunder, shall be in writing, sent either by prepaid registered mail or telefax, and will be validly given if delivered on a Business Day to an individual at the following address:
Costamare Inc.
Guildo Pastor Center
7 rue Gabian
98000 Monaco
Telefax: to be advised
Attention: Gerant
Costamare Shipping Company S.A.
60 Zephyrou Street & Syngrou
Avenue, Palaio Faliro, Athens, Greece
Telefax: +30 210 9409051
Attention: General Manager
ARTICLE XV
APPLICABLE LAW
SECTION 15.1. This Agreement and any non-contractual obligations connected with it shall be governed by, and construed in accordance with, the laws of England.
SECTION 15.2. Except for Sections 2.3, 3.5, 9.5 and 9.6 and Articles XI and XII which can be relied on by a Submanager (other than V.Ships) and Sections 2.3, 3.5, 9.5, 9.6 and 10.9 and Articles XI and XII which can be relied on by a Related Manager, no other term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
ARTICLE XVI
ARBITRATION
SECTION 16.1. All disputes arising out of this Agreement and/or any non-contractual obligations connected with it shall be arbitrated in London in the following manner. One arbitrator is to be appointed by each of the parties hereto and a third by the two so chosen. Their decision or that of any two of them shall be final. The arbitrators shall be commercial persons, conversant with shipping matters. Such arbitration is to be conducted in accordance with the London Maritime Arbitration Association (LMAA) Terms current at the time when the arbitration proceedings are commenced and in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof.
SECTION 16.2. In the event that a party hereto shall state a dispute and designate an arbitrator in writing, the other party shall have 10 Business Days to designate its own arbitrator. If such other party fails to designate its own arbitrator within such period, the arbitrator appointed by the first party can render an award hereunder.
SECTION 16.3. Until such time as the arbitrators finally close the hearings, either party shall have the right by written notice served on the arbitrators and on the other party to specify further disputes or differences under this Agreement for hearing and determination.
SECTION 16.4. The arbitrators may grant any relief, and render an award, which they or a majority of them deem just and equitable and within the scope of this Agreement, including but not limited to the posting of security. Awards pursuant to this Article XVI may include costs and judgments may be entered upon any award made herein in any court having jurisdiction.
ARTICLE XVII
MISCELLANEOUS
SECTION 17.1. This Agreement constitutes the sole understanding and agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements or understandings, written or oral, with respect thereto. This Agreement may not be amended, waived or discharged except by an instrument in writing executed by the party against whom enforcement of such amendment, waiver or discharge is sought.
SECTION 17.2. During the term hereof, the Manager will not provide services hereunder through, or otherwise cause any Subsidiary to have, an office or fixed place of business in the United States.
SECTION 17.3. This Agreement may be executed in one or more written counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF the undersigned have executed this Agreement as of the date first above written.
| COSTAMARE INC. | ||
| By: | /s/ Konstantinos Konstantakopoulos | |
| Name: Konstantinos Konstantakopoulos | ||
| Title: Director | ||
| COSTAMARE SHIPPING COMPANY S.A. | ||
| By: | /s/ Georgios Tsiaras | |
| Title: Name: Georgios Tsiaras | ||
| Title: Director | ||
SCHEDULE A
SUBSIDIARIES
|
# |
OWNING COMPANY |
VESSEL |
FLAG |
|
1 |
ACHILLEAS MARITIME CORPORATION |
KOBE |
Liberian |
|
2 |
ADELE SHIPPING CO. |
MSC AZOV |
Malta |
|
3 |
AINSLEY MARITIME CO. |
CAPE KORTIA |
Malta |
|
4 |
ALFORD SHIPPING CO. |
DYROS* |
Hong Kong* |
|
5 |
AMBROSE MARITIME CO. |
CAPE SOUNIO |
Malta |
|
6 |
ANDATI MARINE CORP. |
VERITY* |
Marshall Islands* |
|
7 |
ANGISTRI CORPORATION |
ZIM NEW YORK |
Hong Kong |
|
8 |
ASTIER MARINE CORP. |
PARITY* |
Marshall Islands* |
|
9 |
AUBER MARINE CORP. |
MANZANILLO* |
Marshall Islands* |
|
10 |
BABRON MARINE CORP. |
PEACE* |
Marshall Islands* |
|
11 |
BAGARY MARINE CORP. |
SERENA* |
Liberia* |
|
12 |
BAILS SHIPPING CO. |
VOLANS |
Liberian |
|
13 |
BARKLEY SHIPPING CO. |
YM TRIUMPH |
Liberian |
|
14 |
BARRAL MARINE CORP. |
DAWN* |
Liberia* |
|
15 |
BASTIAN SHIPPING CO. |
MSC AJACCIO |
Malta |
|
16 |
BEARDMORE MARITIME CO. |
TALOS |
Malta |
|
17 |
BENEDICT MARITIME CO. |
TRITON |
Malta |
|
18 |
BERG SHIPPING CO. |
NEOKASTRO |
Liberian |
|
19 |
BERNIS MARINE CORP. |
BERNIS* |
Marshall Islands* |
|
20 |
BERTRAND MARITIME CO. |
TITAN |
Malta |
|
21 |
BLONDEL MARINE CORP. |
SEABIRD* |
Liberia* |
|
22 |
BRIANDE MARINE CORP. |
KONSTANTINOS* |
Liberia* |
|
23 |
CADENCE SHIPPING CO. |
MSC AMALFI |
Malta |
|
24 |
CAMARAT MARINCE CORP. |
TITAN* |
Liberia |
|
25 |
CAPETANISSA MARITIME CORPORATION |
BEIJING |
Malta |
|
26 |
CARAVOKYRA MARITIME CORPORATION |
COSCO HELLAS |
Malta |
|
27 |
CARRADE MARINE CORP. |
Not determined* |
Not determined* |
|
28 |
CARRAN SHIPPING CO. |
MICHIGAN |
Malta |
|
29 |
CAVALAIRE MARINE CORP. |
DISCOVERY* |
Liberia* |
|
30 |
CHRISTOS MARITIME CORPORATION |
SEALAND WASHINGTON |
Hong Kong |
|
31 |
CONLEY SHIPPING CO. |
YM TRUTH |
Liberian |
|
32 |
COSTACHILLE MARITIME CORPORATION |
YANTIAN |
Malta |
| 33 | COSTIS MARITIME CORPORATION | YORK | Liberian |
|
34 |
DINO SHIPPING CO. |
SEALAND MICHIGAN |
Hong Kong |
|
35 |
DUVAL SHIPPING CO. |
SCORPIUS |
Liberian |
|
36 |
EVANTONE SHIPPING CO. |
ARGUS |
Liberia |
|
37 |
FABRON MARINE CORP. |
ERACLE* |
Liberia* |
|
38 |
FAIRBANK MARITIME CO. |
THESEUS |
Malta |
|
39 |
FANAKOS MARITIME CORPORATION |
OAKLAND |
Hong Kong |
|
40 |
FASTSAILING MARITIME CO |
ZIM SHANGHAI |
Hong Kong |
|
41 |
FERRAGE MARINE CORP. |
ATHENA* |
Liberia* |
|
42 |
FINNEY SHIPPING CO. |
GIALOVA* |
Hong Kong* |
|
43 |
FIRMINO SHIPPING CO. |
YM TOTALITY |
Liberian |
|
44 |
FONTAINE MARINE CORP. |
ACUITY* |
Marshall Islands* |
|
45 |
FORTOSE SHIPPING CO. |
ARIES |
Panama |
|
46 |
GAMBETTA MARINE CORP. |
PRIDE* |
Marshall Islands* |
|
47 |
GRENETA MARINE CORP. |
GRENETA* |
Liberia* |
|
48 |
HARDEN SHIPPING CO. |
YM TARGET |
Malta |
|
49 |
HARDISTY SHIPPING CO. |
ETOILE |
Malta |
|
50 |
HOLLER SHIPPING CO. |
VELA |
Liberian |
|
51 |
HYDE MARITIME CO. |
CAPE TAINARO |
Malta |
|
52 |
JODIE SHIPPING CO. |
MSC ATHENS |
Malta |
|
53 |
JOYNER CARRIERS S.A. |
MESSINI |
Liberian |
|
54 |
KALAMATA SHIPPING CORPORATION |
MAERSK KOLKATA |
Hong Kong |
|
55 |
KAYLEY SHIPPING CO. |
MSC ATHOS |
Malta |
|
56 |
KELSEN SHIPPING CO. |
KURE |
Liberian |
|
57 |
KEMP MARITIME CO. |
CAPE AKRITAS |
Malta |
|
58 |
LINDNER SHIPPING CO. |
VENETIKO |
Liberian |
|
59 |
LONGLEY SHIPPING CO. |
YM TIPTOP |
Malta |
|
60 |
MADELIA SHIPPING CO. |
ULSAN |
Hong Kong |
|
61 |
MARALDI MARINE CORP. |
AEOLIAN* |
Liberia* |
|
62 |
MARINA MARITIME CORPORATION |
COSCO NINGBO |
Malta |
|
63 |
MERTEN SHIPPING CO. |
MAERSK KALAMATA |
Hong Kong |
|
64 |
MIKO SHIPPING CO. |
SEALAND ILLINOIS |
Hong Kong |
|
65 |
NAVARINO MARITIME CORPORATION |
MAERSK KINGSTON |
Hong Kong |
|
66 |
NERIDA SHIPPING CO. |
MAERSK KOWLOON |
Liberian |
|
67 |
NISBET SHIPPING CO. |
NORFOLK |
Liberia |
|
68 |
NOVARA SHIPING CO. |
ANDROUSA |
Liberia |
|
69 |
LENVAL SHIPING CO. |
ADVENTURE* |
Liberia* |
|
70 |
PEDDAR SHIPPING CO. |
VULPECULA |
Liberian |
|
71 |
PERCY SHIPPING CO. |
LUEBECK |
Liberian |
|
72 |
PLANGE SHIPPING CO. |
KYPARISSIA |
Malta |
|
73 |
QUENTIN SHIPPING CO. |
VALOR |
Malta |
|
74 |
RADER SHIPPING CO. |
VIRGO |
Malta |
|
75 |
RAYMOND SHIPPING CO. |
VALUE |
Malta |
|
76 |
REDDICK SHIPPING CO. |
MAERSK KLEVEN |
Liberian |
|
77 |
RENA MARITIME CORPORATION |
COSCO GUANGZHOU |
Malta |
|
78 |
RIVOLI MARINE CORP. |
ALLIANCE |
Liberia |
|
79 |
ROCKWELL SHIPPING CO. |
TRADER |
Hong Kong |
|
80 |
SANDER SHIPPING CO. |
VALIANT |
Malta |
|
81 |
SAUVAN MARINE CORP. |
SAUVAN* |
Liberia* |
|
82 |
SAVAL SHIPPING CO. |
PORTO CHELI |
Liberia |
|
83 |
SCHOFIELD MARITIME CO. |
TAURUS |
Malta |
|
84 |
SIMONE SHIPPING CO. |
LEONIDIO |
Malta |
|
85 |
SINGLETON SHIPPING CO. |
MARATHOPOLIS |
Malta |
|
86 |
SKERRETT MARITIME CO. |
CAPE ARTEMISIO |
Malta |
|
87 |
SMOLETT MARINE CORP. |
PEGASUS |
Marshall Islands |
|
88 |
SPEDDING SHIPPING CO. |
LAKONIA |
Hong Kong |
|
89 |
TANERA SHIPPING CO. |
PORTO GERMENO* |
Liberia* |
|
90 |
TATUM SHIPPING CO. |
MEGALOPOLIS |
Malta |
|
91 |
TERANCE SHIPPING CO. |
VALENCE |
Malta |
|
92 |
TERRON MARINE CORP. |
FARMER* |
Liberia* |
|
93 |
TIMPSON SHIPPING CO. |
AREOPOLIS |
Liberian |
|
94 |
UNDINE SHIPPING CO. |
VANTAGE |
Malta |
|
95 |
URIZA SHIPPING S.A. |
NAVARINO |
Hong Kong |
|
96 |
VAILLANT MARINE CORP. |
COMITY |
Marshall Islands |
|
97 |
VALROSE MARINE CORP. |
BUILDER |
Liberia |
|
98 |
VERANDI SHIPPING CO. |
MAERSK KOTKA |
Liberian |
|
99 |
VERNES SHIPPING CO. |
GLEN CANYON |
Liberia |
|
100 |
VIRNA SHIPPING CO. |
MSC METHONI |
Liberian |
|
101 |
WESTER SHIPPING CO. |
PORTO KAGIO |
Liberia |
(*) Vessels have not been delivered yet; vessel name and flag as indicated by Owning Company
APPENDIX I
FORM OF SHIP MANAGEMENT AGREEMENT
|
1. Date of Agreement [to be dated the date of execution] |
THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)
STANDARD SHIP MANAGEMENT AGREEMENT
CODE NAME: “SHIPMAN 98” |
Part I |
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 |
2. Owners (name, place of registered office and law of registry) (Cl. 1)
Name [name of relevant Subsidiary] Place of registered office [to be completed] Law of registry [to be completed] |
3. Managers (name, place of registered office and law of registry) (Cl. 1)
Name Costamare Shipping Company S.A. Place of registered office Panama City, Republic of Panama Law of registry Republic of Panama |
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4. Day and year of commencement of Agreement (Cl. 2) [to be completed on execution]
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5. Crew Management (state “yes” or “no” as agreed) (CI. 3.1) YES
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6. Technical Management (state “yes” or “no” as agreed) (Cl. 3.2) YES |
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7. Commercial Management (state “yes” or “no” as agreed) (Cl. 3.3) YES
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8. Insurance Arrangements (state “yes” or “no” as agreed) (Cl. 3.4) YES |
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9. Accounting Services (state “yes” or “no” as agreed) (Cl. 3.5) YES
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10. Sale or purchase of the Vessel (state “yes” or “no” as agreed) (Cl. 3.6) YES |
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11. Provisions (state “yes” or “no” as agreed) (Cl. 3.7) YES
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12. Bunkering (state “yes” or “no” as agreed) (Cl. 3.8) YES |
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13. Chartering Services Period (only to be filled in if “yes” stated in Box 7) (Cl. 3.3(i)) 36 months (including any optional extensions applicable)
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14. Owners’ Insurance (state alternative (i), (ii) or (iii) of Cl. 6.3) Clause 6.3(ii) |
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15. See Clause 8.1
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16. Severance Costs (state maximum amount) (Cl. 8.4(ii) not applicable |
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17. Day and year of termination of Agreement (Cl. 17) see Clause 17
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18. Law and Arbitration (state alternative 19.1, 19.2 or 19.3; if 19.3 place of see Clause 19.1
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19. Notices (state postal notice and communication to the Owners) (Cl. 20) c/o Costamare Inc. Guildo Pastor Center 7 rue de Gabian 98000 Monaco
Telefax: to be advised Attention: Gerant
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20. Notices (state postal 60 Zephyrou Street & Syngrou Avenue Athens, Greece
Telefax: +30 210 940 9051 Attention: Managing Director |
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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 Annex “A” (Details of Vessel), “B” (Details of Crew), “C” (Budget) and “D” (Associated vessels) attached hereto, shall be performed subject to the conditions contained herein. In the event of a conflict of conditions, the provisions of PART I and Annex “A”, “B”, “C” and “D” shall prevail over those of PART II to the extent of such conflict but no further..
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Signature(s) (Owners) [name of relevant Subsidiary] |
Signature(s) (Managers) COSTAMARE SHIPPING COMPANY S.A. |
This document is a computer generated SHIPMAN 98 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of discrepancies between the original BIMCO approved document and the computer generated document.
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ANNEX “A” (DETAILS OF VESSEL OR VESSELS) TO THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO) STANDARD SHIP MANAGEMENT AGREEMENT - CODE NAME: “SHIPMAN 98” |
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| Date of Agreement: | ||
| Name of Vessel(s): | ||
| Particulars of Vessel(s): | ||
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_______ |
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_______ |
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_______ |
_______ |
_______ |
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_______ |
_______ |
_______ |
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_______ |
_______ |
_______ |
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_______ |
_______ |
_______ |
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_______ |
_______ |
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_______ |
_______ |
_______ |
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_______ |
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_______ |
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_______ |
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| _______ | |
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| _______ | |
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PART II
“SHIPMAN 98” Standard Ship Management Agreement
|
1. Definitions |
1 |
|
In this Agreement save where the context otherwise requires, |
2 |
|
the following words and expressions shall have the meanings |
3 |
|
hereby assigned to them. |
4 |
|
“Owners” means the party identified in Box 2. |
5 |
|
“Managers” means the party identified in Box 3. |
6 |
|
“Vessel” means the vessel or vessels details of which are set out |
7 |
|
in Annex “A” attached hereto. |
8 |
|
“Business Days” shall have the same meaning as ascribed thereto |
|
|
in Section 1.1 of the Framework Agreement. |
8 |
|
“Crew” means the Master, officers and ratings employed on the |
9 |
|
Vessel from time to time |
|
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|
10 |
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11 |
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12 |
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13 |
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14 |
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|
15 |
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16 |
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17 |
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18 |
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“Related Manager” shall have the meaning as ascribed thereto |
19 |
|
in Section 1.1 of the Framework Agreement. |
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|
“Severance Costs” means the costs which the employers are |
|
|
legally obliged to pay to or in respect of the Crew as a result of |
20 |
|
the early termination of any employment contract for service on |
21 |
|
the Vessel. |
22 |
|
“Crew Insurances” means insurances against crew risks which |
23 |
|
shall include but not be limited to death, sickness, repatriation, |
24 |
|
injury, shipwreck unemployment indemnity and loss of personal |
25 |
|
effects. |
26 |
|
“Framework Agreement” means the agreement dated |
|
|
2 November 2015 made between the Parent and the Managers as amended and restated from time to time. |
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|
“Management Services” means the services specified in sub- |
27 |
|
clauses 3.1 to 3.8 as indicated affirmatively in Boxes 5 to 12. |
28 |
|
“ISM Code” means the International Management Code for the |
29 |
|
Safe Operation of Ships and for Pollution Prevention as adopted |
30 |
|
by the International Maritime Organization (IMO) by resolution |
31 |
|
A.741(18) or any subsequent amendment thereto. |
32 |
|
“ISPS Code” means the International Ship and Port Facility. |
|
|
Security Code constituted pursuant to resolution A.924(22) of |
|
|
the International Maritime Organisation now set out in Chapter |
|
|
XI-2 of the International Convention for the Safety of Life at Sea |
|
|
(SOLAS) 1974 (as amended) and the mandatory ISPS Code as |
|
|
adopted by a Diplomatic Conference of the International |
|
|
Maritime Organisation on Maritime Security in December 2002 |
|
|
and includes any amendments or extensions to it and any |
|
|
regulation issued pursuant to it. |
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|
“Parent” means Costamare Inc. of Trust Company |
|
|
Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the |
|
|
Marshall Islands MH96960. |
|
|
“STCW 95” means the International Convention on Standards |
33 |
|
of Training, Certification and Watchkeeping for Seafarers, 1978, |
34 |
|
as amended in 1995 or any subsequent amendment thereto. |
35 |
|
2. Appointment of Managers |
36 |
|
With effect from the day and year stated in Box 4 and continuing |
37 |
|
unless and until terminated as provided herein, the Owners |
38 |
|
hereby appoint the Managers as the technical and commercial |
39 |
|
managers of the Vessel and the Managers hereby agree |
|
|
to act as the technical and commercial |
40 |
|
3. Basis of Agreement |
|
|
Subject to the terms and conditions herein provided, during the |
42 |
|
period of this Agreement, the Managers shall carry out |
43 |
|
Management Services in respect of the Vessel as agents for |
44 |
|
and on behalf of the Owners. |
45 |
|
T he Managers shall have authority |
|
|
to take such actions as they may from time to time in their absolute |
46 |
|
discretion consider to be necessary to enable them to perform |
47 |
|
this Agreement in accordance with sound ship management |
48 |
|
practice. |
49 |
|
3.1 Crew Management |
50 |
|
(only applicable if agreed according to Box 5) |
51 |
|
The Managers shall provide suitably qualified Crew for the Vessel |
52 |
|
as required by the Owners in accordance with the STCW 95 |
53 |
|
requirements, provision of which includes but is not limited to |
54 |
|
the following functions: |
55 |
|
(i) selecting and engaging the Vessel’s Crew, including payroll |
56 |
|
arrangements, pension administration, and insurances for |
57 |
|
the Crew other than those mentioned in Clause 6; |
58 |
|
(ii) ensuring that the applicable requirements of the law of the |
58 |
|
flag of the Vessel are satisfied in respect of manning levels, |
60 |
|
rank, qualification and certification of the Crew and |
61 |
|
employment regulations including Crew’s tax, social |
62 |
|
insurance, discipline and other requirements; |
63 |
|
(iii) ensuring that all members of the Crew have passed a medical |
64 |
|
examination with a qualified doctor certifying that they are fit |
65 |
|
for the duties for which they are engaged and are in possession |
66 |
|
of valid medical certificates issued in accordance with |
67 |
|
appropriate flag State requirements. In the absence of |
68 |
|
applicable flag State requirements the medical certificate shall |
69 |
|
be dated not more than three months prior to the respective |
70 |
|
Crew members leaving their country of domicile and |
71 |
|
maintained for the duration of their service on board the Vessel; |
72 |
|
(iv) ensuring that the Crew shall have a command of the English |
73 |
|
language of a sufficient standard to enable them to perform |
74 |
|
their duties safely; |
75 |
|
(v) arranging transportation of the Crew, including |
76 |
|
repatriation, board and lodging as and when required at rates and |
|
|
types of accommodations as customary in the industry; |
|
|
(vi) training of the Crew and supervising their efficiency; |
77 |
|
(vii) keeping and maintaining full and complete records of any |
78 |
|
labor agreements which may be entered into with the Crew and, |
|
|
if applicable, conducting union negotiations; |
|
|
(viii) operating the Managers’ drug and alcohol policy unless |
79 |
|
otherwise agreed in writing. |
80 |
|
3.2 Technical Management |
81 |
|
(only applicable if agreed according to Box 6) |
82 |
|
The Managers shall provide technical management which |
83 |
|
includes, but is not limited to, the following functions: |
84 |
|
(i) provision of competent personnel to supervise the |
85 |
|
maintenance and general efficiency of the Vessel; |
86 |
|
(ii) arrangement and supervision of dry dockings, repairs, |
87 |
|
alterations and the upkeep of the Vessel to the standards |
88 |
|
required by the Owners provided that the Managers shall |
89 |
|
be entitled to incur the necessary expenditure to ensure |
90 |
|
that the Vessel will comply with the law of the flag of the |
91 |
|
Vessel and of the places where she trades, and all |
92 |
|
requirements and recommendations of the classification |
93 |
|
society; |
94 |
|
(iii) arrangement of the supply of necessary stores, spares and |
95 |
|
lubricating oil; |
96 |
|
(iv) appointment of surveyors and technical consultants as the |
97 |
|
Managers may consider from time to time to be necessary; |
98 |
|
(v) development, implementation and maintenance of a Safety |
99 |
|
Management System (SMS) in accordance with the ISM |
100 |
|
Code (see sub-clauses 4.2 and 5.3) and of a security system in |
101 |
|
accordance with the ISPS Code; |
|
|
(vi) handling any claims against the builder of the Vessel |
This document is a computer generated SHIPMAN 98 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of discrepancies between the original BIMCO approved document and the computer generated document.
PART II
“SHIPMAN 98” Standard Ship Management Agreement
|
arising out of the relevant shipbuilding contract, |
|
|
if applicable; and |
|
|
(vii) on request by the Owners, providing the Owners with a |
|
|
copy of any inspection report, survey, valuation or any other |
|
|
similar report prepared by any shipbrokers, surveyors, the |
|
|
Class etc.. |
|
|
3.3 Commercial Management |
102 |
|
(only applicable if agreed according to Box 7) |
103 |
|
The Managers shall provide the commercial operation of the |
104 |
|
Vessel, as required by the Owners, which includes, but is not |
105 |
|
limited to, the following functions: |
106 |
|
(i) providing chartering services in accordance with the Owners’ |
107 |
|
instructions which include, but are not limited to, seeking |
108 |
|
and negotiating employment for the Vessel and the conclusion |
109 |
|
(including the execution thereof) of charter parties or other |
110 |
|
contracts relating to the employment of the Vessel, whether on a |
111 |
|
voyage, time, demise, contract of affreightment or other |
|
|
basis. If such a |
|
|
contract exceeds the period |
112 |
|
stated in Box 13, consent thereto |
|
|
in writing shall first be obtained from the Owners. |
113 |
|
(ii) arranging of the proper payment to Owners or their nominees |
114 |
|
of all hire and/or freight revenues or other moneys of |
115 |
|
whatsoever nature to which Owners may be entitled arising |
116 |
|
out of the employment of or otherwise in connection with the |
117 |
|
Vessel; |
118 |
|
(iii) providing voyage estimates and accounts and calculating of |
119 |
|
hire, freights, demurrage and/or dispatch moneys due from |
120 |
|
or due to the charterers of the Vessel; |
121 |
|
(iv) issuing to the Crew |
122 |
|
monitoring voyage performance; |
|
|
(v) appointing agents; |
123 |
|
(vi) appointing stevedores; |
124 |
|
(vii) arranging surveys associated with the commercial operation |
125 |
|
of the Vessel; |
126 |
|
(viii) carrying out the necessary communications with the |
|
|
shippers, charterers and others involved with the receiving |
|
|
and handling of the Vessel at the relevant loading and |
|
|
discharging ports, including sending any notices required |
|
|
under the terms of the Vessel’s employment at the time; |
|
|
(ix) invoicing on behalf of the Owners all freights, hires, |
|
|
demurrages, outgoing claims, refund of taxes, balances of |
|
|
disbursements, statements of account and other sums due |
|
|
to the Owners and account receivables arising from the |
|
|
operation of the Vessel and, upon the request of the Owners, |
|
|
issuing releases on behalf of the Owners upon receipt of |
|
|
payment or settlement of any such amounts; |
|
|
(x) preparing off-hire statements and/or hire statements; |
|
|
(xi) procuring and arranging for port entrance and clearance, |
|
|
pilots, consular approvals and other services necessary for |
|
|
the management and safe operation of the Vessel; and |
|
|
(xii) reporting to the Owners of any major casualties, |
|
|
damages received or caused by the Vessel or any major |
|
|
release or discharge of oil or other hazardous material not in |
|
|
compliance with any laws. |
|
|
3.4 Insurance Arrangements’ |
127 |
|
(only applicable if agreed according to Box 8) |
128 |
|
The Managers shall arrange insurances in accordance with |
129 |
|
Clause 6, on such terms and conditions as the Owners shall |
130 |
|
have instructed or agreed, in particular regarding underwriters |
131 |
|
conditions, |
|
|
insured values, deductibles and franchises. |
132 |
|
3.5 Accounting Services |
133 |
|
(only applicable if agreed according to Box 9) |
134 |
|
Without prejudice to the relevant provisions of the |
135 |
|
Framework Agreement and, in particular, but without |
|
|
limitation, Section 4.9, Section 5.1 and Section 10.6 thereof, |
|
|
|
|
|
(I) establish an accounting system which meets the |
136 |
|
requirements of the Owners and provide regular accounting |
137 |
|
services, supply regular reports and records, |
138 |
|
(ii) maintain the records of all costs and expenditure incurred |
139 |
|
as well as data necessary or proper for the settlement of |
140 |
|
accounts between the parties. |
141 |
|
3.6 Sale or Purchase of the Vessel |
142 |
|
(only applicable if agreed according to Box 10) |
143 |
|
The Managers shall, in accordance with the Owners’ instructions, |
144 |
|
supervise the sale or purchase of the Vessel, including the |
145 |
|
performance of any sale or purchase agreement, but not |
146 |
|
negotiation of the same. The Managers shall, on the request of |
147 |
|
the Owners, either directly or by employing the services of a |
|
|
broker, endeavor to procure a buyer for the Vessel at a price |
|
|
and otherwise on terms acceptable to the Owners. |
|
|
3.7 Provisions (only applicable if agreed according to Box 11) |
148 |
|
The Managers shall arrange for the supply of provisions. |
149 |
|
3.8 Bunkering (only applicable if agreed according to Box 12) |
150 |
|
The Managers shall arrange for the provision of bunker fuel of the |
151 |
|
quality specified by the Owners as required for the Vessel’s trade. |
152 |
|
4. Managers’ Obligations |
153 |
|
4.1 Without prejudice to the relevant provisions of the Framework |
154 |
|
Agreement and in particular, but without limitation |
|
|
to the foregoing, the provisions of Section 2.3, Section 4.1 and |
|
|
Section 4.5 thereof, the Managers undertake to |
|
|
use their |
|
|
provide the agreed Management Services as agents for and on |
155 |
|
behalf of the Owners in accordance with sound ship management |
156 |
|
practice and to protect and promote the interests of the Owners in |
157 |
|
all matters relating to the provision of services hereunder. |
158 |
|
Provided, however, that the Managers in the performance of their |
159 |
|
management responsibilities under this Agreement shall be entitled |
160 |
|
to have regard to their overall responsibility in relation to all vessels |
161 |
|
as may from time to time be entrusted to their management and |
162 |
|
in particular, but without prejudice to the generality of the foregoing, |
163 |
|
the Managers shall be entitled to allocate available supplies, |
164 |
|
manpower and services in such manner as in the prevailing |
165 |
|
circumstances the Managers in their absolute discretion consider |
166 |
|
to be fair and reasonable. |
167 |
|
4.2 Where the Managers are providing Technical Management |
168 |
|
in accordance with sub-clause 3.2, they shall procure that the |
169 |
|
requirements of the law of the flag of the Vessel are satisfied and |
170 |
|
they shall in particular be deemed to be the “Company’ as defined |
171 |
|
by the ISM Code, assuming the responsibility for the operation of |
172 |
|
the Vessel and taking over the duties and responsibilities imposed |
173 |
|
by the ISM Code and/or the ISPS Code when applicable. |
174 |
|
5. Owners’ Obligations |
175 |
|
5.1 Without prejudice to the relevant provisions of the Framework |
176 |
|
Agreement, |
|
|
the Managers punctually |
|
|
in accordance with the terms of this Agreement. |
177 |
|
5.2 Where the Managers are providing Technical Management |
178 |
|
in accordance with sub-clause 3.2, the Owners shall: |
179 |
|
(i) procure that all officers and ratings supplied by them or on |
180 |
|
their behalf comply with the requirements of STCW 95; |
181 |
|
(ii) instruct such officers and ratings to obey all reasonable orders |
182 |
|
of the Managers in connection with the operation of the |
183 |
|
Managers’ safety management system. |
184 |
This document is a computer generated SHIPMAN 98 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of discrepancies between the original BIMCO approved document and the computer generated document.
PART II
“SHIPMAN 98” Standard Ship Management Agreement
|
5.3 Where the Managers are not providing Technical Management |
185 |
|
in accordance with sub-clause 3.2, the Owners shall procure that |
186 |
|
the requirements of the law of the flag of the Vessel are satisfied |
187 |
|
and that they, or such other entity as may be appointed by them |
188 |
|
and identified to the Managers, shall be deemed to be the |
189 |
|
“Company” as defined by the ISM Code assuming the responsibility |
190 |
|
for the operation of the Vessel and taking over the duties and |
191 |
|
responsibilities imposed by the ISM Code when applicable. |
192 |
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6.Insurance Policies |
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The Owners shall procure, whether by instructing the Managers |
194 |
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under sub-clause 3.4 or otherwise, that throughout the period of |
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this Agreement: |
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6.1 at the Owners’ expense, the Vessel is insured for not less |
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than her sound market value or entered for her full gross tonnage, |
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as the case may be for: |
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(i) usual hull and machinery marine risks (including crew |
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negligence) and excess liabilities; |
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(ii) protection and indemnity risks (including pollution risks and |
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Crew insurances); |
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(iii) war risks (including protection and indemnity and crew risks); |
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and |
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(iv) any other insurance that the Owners determine or the |
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Managers advise them in writing that, in either case, it is |
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prudent or, as the case may be, appropriate on the basis of |
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prevailing market practices to be obtained in respect of the |
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Vessel, its freight/hire or any third party liabilities, |
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in each case in accordance with the best practice of prudent owners |
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of |
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vessels of a similar type to the Vessel, with first class insurance |
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companies, underwriters or associations (“the Owners’ |
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Insurances”); |
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6.2 all premiums and calls and applicable deductibles and/or |
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franchises on the Owners’ Insurances are paid |
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promptly by their due date, |
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6.3 the Owners’ Insurances name the Managers and, subject |
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to underwriters’ agreement, any third party designated by the |
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Managers as a joint assured, with full cover, with the Owners |
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obtaining cover in respect of each of the insurances specified in |
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sub-clause 6.1: |
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(i) on terms whereby the Managers and any such third party |
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are liable in respect of premiums or calls arising in connection |
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with the Owners’ Insurances; or |
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(ii) if reasonably obtainable, on terms such that neither the |
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Managers nor any such third party shall be under any |
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liability in respect of premiums or calls arising in connection |
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with the Owners’ Insurances; or |
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(iii) on such other terms as may be agreed in writing. |
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Indicate alternative (i), (ii) or (iii) in Box 14. If Box 14 is left |
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blank then (i) applies. |
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6.4 written evidence is provided, to the reasonable satisfaction |
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of the Managers, of their compliance with their obligations under |
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Clause 6 within a reasonable time of the commencement of |
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the Agreement, and of each renewal date and, If specifically |
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requested, of each payment date of the Owners’ Insurances, |
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7. Income Collected and Expenses Paid on Behalf of Owners |
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7.1 Without prejudice to the provisions of Section 10.7 of the |
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Framework Agreement, all moneys collected by the |
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Managers under the terms of |
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this Agreement (other than moneys payable by the Owners to |
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the Managers) and any interest thereon shall be held to the |
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credit of the Owners in a separate bank account. |
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7.2 Without prejudice to the provisions of Section 9.7, Section |
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10.5 and Section 10.8 of the Framework Agreement, |
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expenses incurred by the Managers under the terms |
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of this Agreement on behalf of the Owners (including expenses |
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as provided in Clause 8) may be debited against the Owners |
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in the account referred to under sub-clause 7.1 but shall in any |
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event remain payable by the Owners to the Managers on |
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demand. For the avoidance of doubt, the Managers can make |
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such demand on the Owners as well as on the Parent as |
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provided in Section 10.5 of the Framework Agreement. |
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Furthermore and without prejudice to the generality of the |
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provisions of this Clause 7, the Managers shall, subject to being |
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placed in funds by the Owners or the Parent, arrange for the |
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payment of all ordinary charges incurred in connection with the |
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Management Services, including, but not limited to, all canal |
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tolls, port charges, any amounts due to any governmental |
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authority with respect to the Crew and all duties and taxes in |
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respect of the Vessel, the cargo, hire or freight (whether levied |
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against the Owners, the Parent or the Vessel), insurance |
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premiums, advances of balances of disbursements, invoices for |
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bunkers, stores, spares, provisions, repairs and any other |
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material and/or service in respect of the Vessel. |
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8. Management Fees |
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8.1 The Owners shall pay to the Managers for their services |
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as Managers under this Agreement |
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fees as stated in |
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Framework Agreement -which shall be payable |
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in accordance with the provisions of Article IX of the Framework |
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Agreement. |
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8.2 The management fees shall be subject to |
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in accordance with the provisions of Sections 9.2 and 9.3 of the |
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Framework Agreement |
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8.3 |
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shall reimburse the Managers for postage and communication |
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expenses, travelling expenses, and other out of pocket |
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expenses properly incurred by the Managers in pursuance of |
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the Management Services. |
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8.4 The provisions of Section 9.4, Section 9.5, Section 9.6 and |
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Section 9.7 of the Framework Agreement shall be |
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deemed as incorporated herein mutatis mutandis. |
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8.5 The Managers have the right to demand the payment of any |
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of the management fees and expenses payable under this |
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Agreement either from the Parent or the Owners. Payment of |
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any such fees or expenses or any part thereof by either the |
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Parent or the Owners shall prevent the Managers from making a |
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claim on the other person for the same amount to the extent |
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that the same has been already paid to the Managers. |
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This document is a computer generated SHIPMAN 98 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of discrepancies between the original BIMCO approved document and the computer generated document.
PART II
“SHIPMAN 98” Standard Ship Management Agreement
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9. Budgets and Management of Funds |
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9.1 The Owners are aware that the Managers will be preparing |
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budgets in connection with, inter alia, the provision of the |
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Management Services which the Managers will be submitting |
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for approval to the Parent in accordance with the provisions of |
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Article X of the Framework Agreement. |
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the right of the Managers to ask for funds in relation to the Management Services directly from the Parent in accordance with the relevant provisions of the Framework Agreement, the Managers shall |
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each month request the Owners in writing for the funds required |
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to run the Vessel for the ensuing month, including the payment |
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of any occasional or extraordinary item of expenditure, such as |
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emergency repair costs, additional insurance premiums, bunkers |
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or provisions. Such funds shall be received by the Managers |
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within ten running days after the receipt by the Owners of the |
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Managers’ written request and shall be held |
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or, if requested by the Managers, in the name of the Owners. |
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9.5 Notwithstanding anything contained herein to the contrary, |
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the Managers shall in no circumstances be required to use or |
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commit their own funds to finance the provision of the |
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Management Services. |
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10.Managers’ Right to Sub-Contract |
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Except to a Related Manager or V.Ships Greece Ltd. (where the Manager may subcontract any of their obligations hereunder, without need of obtaining the Owners’ consent for doing so), or as provided in the Framework Agreement, shall not have the right to sub-contract any of |
319 |
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their obligations hereunder, including those mentioned in sub- |
320 |
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clause 3.1, without the prior written consent of the Owners which |
321 |
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shall not be unreasonably withheld and which shall be promptly responded to. In the event of such a sub- |
322 |
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contract the Managers shall remain fully liable for the due |
323 |
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performance of their obligations under this Agreement. |
324 |
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11. Responsibilities |
325 |
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The parties agree that the provisions of Sections 11.1 to 11.5 (inclusive) of the Framework Agreement, shall apply to this Agreement mutatis mutandis, save that references therein to “any Shipmanagement Agreement or any Supervision Agreement” shall be omitted and references to “Parent”, “any Subsidiary”, “Manager”, “any Submanager”, “a Vessel”, “Section”, “Management Fees”, “each Shipmanagement Agreement”, “Subsidiaries” and “Article Xl” shall be construed as references to the Owners, the Owners, the Managers, any submanager, the Vessel, Clause, management fee, this Agreement, the Owners and Clause 11, respectively, when used herein. |
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This document is a computer generated SHIPMAN 98 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of discrepancies between the original BIMCO approved document and the computer generated document.
PART II
“SHIPMAN 98” Standard Ship Management Agreement
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12. Documentation |
389 |
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Without prejudice to the relevant provisions of the Framework Agreement, Technical Management in |
390 |
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accordance with sub-clause 3.2 and/or Crew Management in |
391 |
|
accordance with sub-clause 3.1, they shall make available, |
392 |
|
upon Owners’ request, all documentation and records related |
393 |
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to the Safety Management System (SMS) and/or the Crew |
394 |
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which the Owners need in order to demonstrate compliance |
395 |
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with the ISM Code, the ISPS Code and STCW 95 or to defend a |
396 |
|
a third party. |
397 |
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13. General Administration |
398 |
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13.1 Without prejudice to the provisions of Article V of the Framework Agreement, , Managers shall handle and settle all claims arising |
399 |
|
out of the Management Services hereunder and keep the Owners |
400 |
|
informed regarding any incident of which the Managers become |
401 |
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aware which gives or may give rise to material claims or disputes involving |
402 |
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third parties. |
403 |
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13.2 The Managers shall, as instructed by the Owners under this Agreement , bring |
404 |
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or defend actions, suits or proceedings in connection with matters |
405 |
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entrusted to the Managers according to this Agreement. |
406 |
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13.3 The Managers shall also have power to obtain legal or |
407 |
|
technical or other outside expert advice in relation to the handling |
408 |
|
and settlement of claims and disputes or all other matters |
409 |
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effecting the interests of the Owners in respect of the Vessel. |
410 |
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13.4 The Owners shall arrange for the provision of any |
411 |
|
necessary guarantee bond or other security. |
412 |
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13.5 Any costs |
413 |
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carrying out their obligations according to Clause 13 shall be |
414 |
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reimbursed by the Owners. |
415 |
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14.Auditing |
416 |
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The Managers shall at all times maintain and keep true and |
417 |
|
correct accounts and shall make the same available for inspection |
418 |
|
and auditing by the Owners at such times as may be mutually |
419 |
|
agreed. On the termination, for whatever reasons, of this |
420 |
|
Agreement, the Managers shall release to the Owners, if so |
421 |
|
requested, the originals where possible, or otherwise certified |
422 |
|
copies, of all such accounts and all documents specifically relating |
423 |
|
to the Vessel and her operation. For the avoidance of any doubt, |
424 |
|
this Clause is in addition to and not in substitution of the |
|
|
relevant provisions of the Framework Agreement. |
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15.Inspection of Vessel |
425 |
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The Owners shall have the right at any time after giving |
426 |
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reasonable notice to the Managers to inspect the Vessel for any |
427 |
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reason they consider necessary. |
428 |
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16.Compliance with Laws and Regulations |
429 |
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The Managers will not do or permit to be done anything which |
430 |
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might cause any breach or infringement of the laws and |
431 |
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regulations of the Vessel’s flag, or of the places where she trades. |
432 |
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17.Duration of the Agreement |
433 |
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This Agreement shall come into effect on the day and year stated |
434 |
|
in Box 4 and shall continue until the date the Framework |
435 |
|
Agreement is terminated in accordance with the provisions of |
|
|
Article XIII thereof, unless this Agreement is terminated earlier |
|
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in accordance with the provision of Clause 18 hereof |
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436 |
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437 |
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438 |
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439 |
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18.Termination |
440 |
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18.1 Owners’ default |
441 |
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(i) The Managers shall be entitled to terminate the Agreement |
442 |
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with immediate effect by notice in writing if any moneys |
443 |
|
payable by the Owners under this Agreement |
444 |
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|
445 |
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|
446 |
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nominated account within |
447 |
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receipt by |
|
|
the Owners of the Managers written request or if the Vessel |
448 |
|
is repossessed by the Mortgagees. |
449 |
|
(ii) if the Owners: |
450 |
|
(a) fall to meet their obligations under sub-clauses 5.2 |
451 |
|
and 5.3 of this Agreement for any reason within their |
452 |
|
control, or |
453 |
|
(b) proceed with the employment of or continue to employ |
454 |
|
the Vessel in the carriage of contraband, blockade |
455 |
|
running, or in an unlawful trade, or on a voyage which |
456 |
|
in the reasonable opinion of the Managers is unduly |
457 |
|
hazardous or improper, |
458 |
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the Managers may give notice of the default to the Owners, |
459 |
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requiring them to remedy it as soon as practically possible. |
460 |
|
In the event that the Owners fall to remedy it within |
461 |
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|
462 |
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of the Managers’ written request to the satisfaction of the |
|
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Managers, the |
|
|
Managers shall be entitled to terminate the Agreement |
463 |
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with immediate effect by notice In writing. |
464 |
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18.2 Managers’ Default |
465 |
|
If the Managers fail to meet their obligations under Clauses 3 |
466 |
|
and 4 of this Agreement for any reason within the control of the |
467 |
|
Managers, the Owners may give notice to the Managers of the |
468 |
|
default, requiring them to remedy it within 20 Business Days |
469 |
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470 |
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471 |
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Owners |
|
|
shall be entitled to terminate the Agreement with immediate effect |
472 |
|
by notice in writing. |
473 |
|
18.3 Extraordinary Termination |
474 |
|
This Agreement shall be deemed to be terminated in the case of |
475 |
|
the sale of the Vessel or if the Vessel becomes a total loss or is |
476 |
|
declared as a constructive or compromised or arranged total |
477 |
|
loss or is requisitioned. |
478 |
|
18.4 For the purpose of sub-clause 18.3 hereof |
479 |
|
(i) the date upon which the Vessel is to be treated as having |
480 |
|
been sold or otherwise disposed of shall be the date on |
481 |
|
which the Owners cease to be registered as Owners of |
482 |
|
the Vessel; |
483 |
This document is a computer generated SHIPMAN 98 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of discrepancies between the original BIMCO approved document and the computer generated document.
PART II
“SHIPMAN 98” Standard Ship Management Agreement
|
(ii) the Vessel shall not be deemed to be lost unless either |
484 |
|
she has become an actual total loss or agreement has |
485 |
|
been reached with her underwriters in respect of her |
486 |
|
constructive, compromised or arranged total loss or if such |
487 |
|
agreement with her underwriters is not reached it is |
488 |
|
adjudged by a competent tribunal that a constructive loss |
489 |
|
of the Vessel has occurred. |
490 |
|
18.5 The parties agree that the provisions of Sections 13.4(a) to |
491 |
|
13.4(d) (inclusive) of the Framework Agreement, shall |
|
|
apply to this Agreement mutatis mutandis. |
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492 |
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493 |
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494 |
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495 |
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496 |
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497 |
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18.6 The termination of this Agreement shall be without |
498 |
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prejudice to all rights accrued due between the parties prior to |
496 |
|
the date of termination. |
500 |
|
19.Law and Arbitration |
501 |
|
19.1 This Agreement and any non-contractual obligations |
502 |
|
connected with it shall be governed by and construed in |
|
|
accordance with English law. All disputes arising out of this Agreement and/or any non-contractual obligations connected with it shall be arbitrated in London in the following manner. One arbitrator is to be appointed by each of the parties hereto and a third by the two so chosen. Their decision or that of any two of them shall be final. The arbitrators shall be commercial persons, conversant with shipping matters. Such arbitration is to be conducted in accordance with the London Maritime Arbitration Association (LMAA) Terms current at the time when the arbitration proceedings are commenced and in accordance with the Arbitration Act 1996 or any statutory modification or re- enactment thereof. In the event that a party hereto shall state a dispute and designate an arbitrator in writing, the other party shall have 10 Business Days to designate its own arbitrator. If such other party fails to designate its own arbitrator within such period, the arbitrator appointed by the first party can render an award hereunder. Until such time as the arbitrators finally close the hearings, either party shall have the right by written notice served on the arbitrators and on the other party to specify further disputes or differences under this Agreement for hearing and determination. The arbitrators may grant any relief, and render an award, which they or a majority of them deem just and equitable and within the scope of this Agreement, including but not limited to the posting of security. Awards pursuant to this Clause 19.1 may include costs and judgments may be entered upon any award made herein in any court having jurisdiction.
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19.4 If Box 18 in Part I is not appropriately filled in, sub- |
560 |
|
clause 19.1 of this Clause shall apply. |
561 |
|
Note: 19.1, 19.2 and 19.3 are alternatives; indicate |
562 |
|
alternative agree in Box 18. |
563 |
|
20.Notices |
564 |
|
20.1 Any notice to be given by either party to the other |
565 |
|
Party shall be in writing and may be sent by fax, |
566 |
|
Registered or recorded mail or by personal service. |
567 |
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20.2 The address of the Parties for service of such |
568 |
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communication shall be as stated in Boxes 19 and 20, |
569 |
|
respectively. |
570 |
This document is a computer generated SHIPMAN 98 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of discrepancies between the original BIMCO approved document and the computer generated document.
APPENDIX II
FORM OF SUPERVISION AGREEMENT
THIS AGREEMENT is made the ____ day of , 20[ • ] BETWEEN:
(1) [name of relevant Subsidiary], a company incorporated under the laws of [•], whose registered office is [ADDRESS] (the “Owner”); and
(2) COSTAMARE SHIPPING COMPANY S.A., a company incorporated under the laws of Panama, whose registered office is at [ADDRESS] (the “Construction Supervisor”).
WHEREAS:
By a shipbuilding contract dated (the “Shipbuilding Contract”) and made between [•1 (the “Builder”) and the Owner, the Builder agreed to construct, to the order of the Owner, and sell to the Owner, a [•] vessel, known during construction as Hull No.[•] (the “Vessel”);
IT IS NOW AGREED as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Except as otherwise defined herein, all terms defined in the Shipbuilding Contract shall have the same respective meanings when used herein.
SECTION 1.2. In this Agreement, unless the context otherwise requires, the following expressions shall have the following meanings:
“Business Day” means a day, other than a Saturday or Sunday or a public holiday, on which major retail banks in Monaco, New York City and Athens Greece, and (in respect of any payments which are to be made to the Builder) [•], are open for non-automated customer services;
“Framework Agreement” means the agreement dated 2 November 2015 made between the Parent and the Construction Supervisor.
“Owner’s Supplies” means all of the items to be furnished to the Vessel by the Owner in accordance the relevant provisions of the Shipbuilding Contract.
“Parent” means Costamare Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and includes its successors in title.
“Spares” means the items to be designated as spares by the parties hereto at the time of the delivery of the Vessel.
“Supervision Period” means the period from the execution of this Agreement to and including the earlier of (i) the date of delivery of the Vessel pursuant to the Shipbuilding Contract and (ii) the date this Agreement is terminated.
ARTICLE II
APPOINTMENT
SECTION 2.1. The Owner hereby appoints the Construction Supervisor, and the Construction Supervisor hereby agrees to act as the Owner’s supervisor towards the Builder and as the “Owner’s Representative” under the Shipbuilding Contract for the duration of the Supervision Period and to perform the duties and rights which rest with the Owner regarding the construction and delivery of the Vessel in accordance with all of the provisions of the Shipbuilding Contract. The Owner shall be responsible for, inter alia, determining the general policy of supervision of construction of the Vessel and the scope of activities of the Construction Supervisor and, in the performance of its duties under this Agreement, the Construction Supervisor shall at all times act strictly in accordance with any instructions or directions given to it by the Owner regarding such general policy or, in the absence of such instructions or directions, in accordance with the standards of a prudent supervisor providing services of the type to be provided under this Agreement, having due regard to the Owner’s interest. Any instructions so given shall be consistent with the nature and scope of the supervision services required to be performed by the Construction Supervisor under this Agreement and shall not require the Construction Supervisor to do or omit to do anything which may be contrary to any applicable law of any jurisdiction or which is inconsistent or contrary to any of the rights and duties of the Owner under the Shipbuilding Contract. Upon appointment the Owner shall furnish the Construction Supervisor with a full and complete copy of the Shipbuilding Contract (which for the avoidance of doubt shall include the Specifications and the Plans).
SECTION 2.2. Specific Powers and Duties of the Construction Supervisor. Without prejudice to the generality of the appointment made under Section 2.1, and (where applicable) by way of addition to the rights, powers and duties so conferred, the Construction Supervisor shall, subject to this Section 2.2 and to Articles III and IV, have and be entrusted with the following rights, powers and duties in relation to the Shipbuilding Contract and the Vessel:
(a) to review, comment on, agree and approve the lists of plans and the drawings referred to; to attend the testing of the Vessel’s machinery, outfitting and equipment and to request any tests or inspections which the Construction Supervisor may consider appropriate or desirable and to review and comment on the results of all tests and inspections to the extent this is possible under the terms of the Shipbuilding Contract; to carry out such inspections and give such advice or suggestions to the Builder as the Construction Supervisor may consider appropriate and as the terms of the Shipbuilding Contract allow him to do; and to give notice to the Builder in the event that the Construction Supervisor discovers any construction, material or workmanship which the Construction Supervisor believes does not or will not conform to the requirements of the Shipbuilding Contract and the specifications again provided the terms of the Shipbuilding Contract allows for such notice to be given;
(b) to appoint a representative of the Construction Supervisor for the purposes specified under Article [•] of the Shipbuilding Contract;
(c) if any alteration or addition to the Shipbuilding Contract becomes obligatory or desirable, to consult with the Builder and make recommendations to the Owner as to whether or not acceptance should be given to any proposal notified to the Owner by the Builder;
(d) to request and agree to any minor alterations, additions or modifications to the Vessel or the specifications and any substitute materials to the extent this is possible under the terms of the Shipbuilding Contract, which the Construction Supervisor may consider appropriate or desirable, provided that if the cost of such variations or substitute materials would have the effect of altering the Contract Price (as defined in the Shipbuilding Contract) by more than three per cent (3%) from the Contract Price on the date hereof or the amount of any of the installments of the Contract Price due under the Shipbuilding Contract prior to the delivery of the Vessel, the Construction Supervisor shall notify the same to the Owner in writing and obtain the Owner’s instructions before taking any action in relation thereto; to receive from and transmit to the Builder information relating to the requirements of the classification society and to give instructions and agree with the Builder regarding alterations, additions or changes in connection with such requirements; and to approve the substitution of materials as requested by the Builder;
(e) to attend and witness the trials of the Vessel to the extent this is possible under the terms of the Shipbuilding Contract;
(f) to determine whether the Vessel has been designed, constructed, equipped and completed in accordance with, and complies with, the Shipbuilding Contract and the Specifications and Plans (each as defined in the Shipbuilding Contract); to give the Builder a notice of acceptance or (as the case may be) rejection of the Vessel, to require or request any further test and inspection of the Vessel to the extent this is possible under the terms of the Shipbuilding Contract, and to give and receive any further or other notice relative to such matters and generally to advise the Owner in respect of all such matters;
(g) to sign on behalf of the Owner any protocols as to sea trials, consumable stores, delivery and acceptance or otherwise, having first ascertained with the Owner the appropriateness of so doing;
(h) to accept on behalf of the Owner the documents specified in Article [•], Paragraph [•] of the Shipbuilding Contract to be delivered by the Builder at delivery of the Vessel under the Shipbuilding Contract and to confirm receipt thereof to the Owner;
(i) to give and receive on behalf of the Owner any notice contemplated by the Shipbuilding Contract, provided that the Construction Supervisor shall not have authority to give on behalf of the Owner any notice which the Owner may be entitled to give to cancel, repudiate or rescind the Shipbuilding Contract without the prior written consent of the Owner; and
(j) to purchase, after being placed in funds by the Owner, all Owner’s Supplies as agent of the Owner and supply and deliver the same together with all necessary specifications, plans, drawings, instruction books, manuals, test reports and certificates to the Builder as provided in the Shipbuilding Contract, and provide to the Owner a list of all such Owner’s Supplies as soon as possible.
SECTION 2.3. The Construction Supervisor shall discharge its responsibilities under this Clause 2 as the Owner’s agent.
SECTION 2.4. In the event that the Construction Supervisor uses own funds to purchase Owner’s Supplies, the cost of supplying and delivering Owner’s Supplies pursuant to relevant terms of the Shipbuilding Contract shall be reimbursed by the Owner to the Construction Supervisor on the date the Construction Supervisor submits to the Owner supporting invoices in respect of such cost.
ARTICLE III
CONSTRUCTION SUPERVISOR’S DUTIES
REGARDING CONSTRUCTION
SECTION 3.1. The Construction Supervisor undertakes with the Owner with respect to the Shipbuilding Contract:
(a) to notify the Owner in writing promptly on becoming aware of any likely change to any of the dates on which any installment under the Shipbuilding Contract is expected to be due;
(b) to (i) notify the Owner in writing of the expected date on which the launching or, as the case may be, sea trials of the Vessel is or are to take place and (ii) promptly on the same day as the launching or, as the case may be, sea trials of the Vessel takes or take place to confirm that the launching or, as the case may be, sea trials of the Vessel has or have taken place and, where relevant, that the amount specified in such confirmation is due and payable;
(c) to (i) advise the Owner in writing, four (4) Business Days prior to the date on which the delivery installment under the Shipbuilding Contract is anticipated to become due, of the times and amounts of payments to be made to the Builder under the Shipbuilding Contract and any amount due to the Construction Supervisor for Owner’s Supplies not already settled and (ii) promptly confirm the same on the day on which such installment becomes due (and being the date the same is required to be paid to the account referred to in the relevant term of the Shipbuilding Contract);
(d) not to accept the Vessel or delivery of the Vessel on the Owner’s behalf without the Owner’s prior written approval and unless the Construction Supervisor shall have previously certified to the Owner in writing, in the form of the certificate set out in Schedule 1 to this Agreement, that:
(i) the Vessel has been duly completed and is ready for delivery to and acceptance by the Owner in or substantially in accordance with the Shipbuilding Contract and the Specifications and Plans;
(ii) there is, to the best of the Construction Supervisor’s knowledge and belief having made due enquiry with the Builder, no lien or encumbrance on the Vessel other than the lien in favor of the Builder in respect of the delivery installment of the Contract Price due in accordance with the terms of the Shipbuilding Contract; and
(iii) the Vessel is recommended for classification by the relevant classification society provided for in the Shipbuilding Contract (and the Construction Supervisor shall attach to its certificate the provisional certificate of such classification society recommending such classification of the Vessel or a duplicate or photocopy of such provisional certificate or otherwise provide evidence of such classification to the Owner);
(e) on receipt thereof from the Builder promptly to deliver the documents specified in Article [•], Paragraph [•] of the Shipbuilding Contract to the Owner or as the Owner may direct; and
(f) solely with the prior written approval of the Owner, to request from or agree with the Builder any material alterations, additions or modifications to the Vessel.
ARTICLE IV
CONSTRUCTION SUPERVISOR’S GENERAL OBLIGATIONS
SECTION 4.1. The Construction Supervisor undertakes to the Owner, with respect to the exercise and performance of its rights, powers and duties as the Owner’s representative under this Agreement, as follows:
(a) it will exercise commercially reasonable efforts to cause the due and punctual observance and performance of all conditions, duties and obligations imposed on the Owner by the Shipbuilding Contract (other than to pay the Contract Price) and will not without the prior written consent of the Owner:
(i) exercise any rights of the Owner to cancel, repudiate or rescind the Shipbuilding Contract;
(ii) waive, modify or suspend any provision of the Shipbuilding Contract if as a result of such waiver, modification or suspension the Owner will or may suffer any adverse consequences; and
(b) it will, at its own expense, keep all necessary and proper books, accounts, records and correspondence files relating to its duties and activities under this Agreement and shall send quarterly reports to the Owner concerning the progress of the design and construction of the Vessel and keep the Owner promptly informed of any deviations from the building program.
ARTICLE V
LIABILITY AND INDEMNITY
SECTION 5.1. Save for the obligation of the Owner to pay any moneys due to the Construction Supervisor hereunder, neither the Owner nor the Construction Supervisor shall be under any liability to the other for any failure to perform any of their obligations hereunder by reason of Force Majeure. “Force Majeure” shall mean any cause whatsoever of any nature or kind beyond the reasonable control of the Owner or the Construction Supervisor, including, without limitation, acts of God, acts of civil or military authorities, acts of war or public enemy, acts of any court, regulatory agency or administrative body having jurisdiction, insurrections, riots, strikes or other labor disturbances, embargoes or other causes of a similar nature.
SECTION 5.2. The Construction Supervisor, including its officers, directors, employees, shareholders, agents and any sub-contractors (the “Construction Supervisor Related Parties”), shall be under no liability whatsoever to the Owner or to any third party (including the Builder) for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect (including but not limited to loss of profit arising out of or in connection with the delayed or non-conforming delivery of the Vessel), and howsoever arising in the course of the performance of this Agreement, unless and to the extent that the same is proved to have resulted solely from the gross negligence or willful misconduct of the Construction Supervisor, its officers, employees, agents or any of its sub-contractors in which case (save where loss, damage, delay or expense, has resulted from the Construction Supervisor’s personal act or omission committed with the intent to cause same) the Construction Supervisor’s liability for each incident or series of incidents giving rise to claim or claims shall never exceed a total of ten times the fees payable hereunder.
SECTION 5.3. The Owner shall indemnify and hold harmless the Construction Supervisor Related Parties against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of this Agreement and against and in respect of any loss, damage, delay or expense of whatsoever nature (including legal costs and expenses on a full indemnity basis), whether direct or indirect, incurred or suffered by any Construction Supervisor Related Party in the performance of this Agreement, unless incurred or suffered due to the gross negligence or willful misconduct of any Construction Supervisor Related Party.
SECTION 5.4. It is hereby expressly agreed that no employee or agent of the Construction Supervisor (including any sub-contractor from time to time employed by the Construction Supervisor) shall in any circumstances whatsoever be under any liability whatsoever to the Owner or any third party for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Article V, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defense and immunity of whatsoever nature applicable to the Construction Supervisor or to which the Construction Supervisor is entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Construction Supervisor acting as aforesaid, and for the purpose of all the foregoing provisions of this Article V, the Construction Supervisor is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be their servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.
SECTION 5.5. The provisions of this Article V shall survive any termination of this Agreement.
ARTICLE VI
FEES
SECTION 6.1. In consideration of the performance of the duties assigned to the Construction Supervisor in this Agreement, the Owner shall pay to the Construction Supervisor the sum of US$787,405 for its total supervision costs in connection with the supervision of the construction of the Vessel, plus any expenses incurred under the Shipbuilding Contract against presentation of supporting invoices from the Construction Supervisor which the Construction Supervisor shall supply to the Owner at the same time as payment is requested. The fee payable hereunder to the Construction Supervisor shall include all costs which are incurred by the Construction Supervisor in connection with the ordinary exercise and performance by the Construction Supervisor of the rights, powers and duties entrusted to it pursuant to this Agreement. The supervision fee will be paid in two equal installments as follows:
(a) US$393,702.50 on the execution of this Agreement; and
(b) US$393,702.50 upon the Construction Supervisor advising the Owner of the completion of the sea trial run of the Vessel.
For the avoidance of doubt, the Construction Supervisor can demand payment of the fee and other amounts payable hereunder from the Parent pursuant to the relevant provisions of the Framework Agreement.
ARTICLE VII
COMMENCEMENT - TERMINATION
SECTION 7.1. This Agreement shall come into effect on the date hereof and shall continue until the delivery of the Vessel in accordance with the Shipbuilding Contract unless terminated earlier pursuant to the terms of Section 7.2, Section 7.3, Section 7.4 or Section 7.5.
SECTION 7.2. The Owner shall be entitled to terminate this Agreement by notice in writing to the Construction Supervisor if the Construction Supervisor defaults in the performance of any material obligation under this Agreement, subject to a cure right of 20 Business Days following written notice by the Owner.
SECTION 7.3. This Agreement shall terminate automatically if:
(a) the Shipbuilding Contract is cancelled, rescinded or terminated; or
(b) the Framework Agreement is terminated.
SECTION 7.4. The Construction Supervisor shall be entitled to terminate this Agreement by notice in writing to the Owner if:
(a) any moneys payable by the Owner under this Agreement is not paid when due or if due on demand within 10 Business Days following demand by the Construction Supervisor; or
(b) the Owner defaults in the performance of any other material obligations under this Agreement, subject to a cure right of 20 Business Days following written notice by the Construction Supervisor.
SECTION 7.5. Either party shall be entitled to terminate this Agreement immediately if:
(a) the other party ceases to conduct business, or all or substantially all of the equity-interests, properties or assets of either such party is sold, seized or appropriated; or
(b) (i) the other party files a petition under any bankruptcy law, makes an assignment for the benefit of its creditors, seeks relief under any law for the protection of debtors or adopts a plan of liquidation; (ii) a petition is filed against the other party seeking to have it declared insolvent or bankrupt and such petition is not dismissed or stayed within 40 Business Days of its filing; (iii) the other party shall admit in writing its insolvency or its inability to pay its debts as they mature; (iv) an order is made for the appointment of a liquidator, manager, receiver or trustee of the other party of all or a substantial part of its assets; (v) an encumbrancer takes possession of or a receiver or trustee is appointed over the whole or any part of the other party’s undertaking, property or assets; or (vi) an order is made or a resolution is passed for the other party’s winding up;
(c) a distress, execution, sequestration or other process is levied or enforced upon or sued out against the other party’s property which is not discharged within 20 Business Days;
(d) the other party ceases or threatens to cease wholly or substantially to carry on its business otherwise than for the purpose of a reconstruction or amalgamation without insolvency previously approved by the terminating party;
or
(e) the other party is prevented from performing its obligations hereunder by reasons of Force Majeure for a period of two or more consecutive months.
SECTION 7.6. In the event of termination due to the Construction Supervisor’s default, then it shall not be entitled to receive any payment in respect of the fees and other amounts described in Article VI becoming due and payable after the date of such termination.
ARTICLE VIII
EMPLOYEES
SECTION 8.1. None of the employees and/or sub-contractors of the Construction Supervisor shall constitute, for the purposes of this Agreement, sub-agents of the Owner. The Construction Supervisor, in its capacity as employer and contractor (and not in its capacity as agent for the Owner), shall (a) be responsible for the salaries, expenses and costs in respect of each of its employees and sub-contractors (not in its capacity as agent for the Owner) and (b) save for the provisions of Article V, indemnify its employees and sub-contractors for any liabilities and losses incurred by such employees and sub-contractors.
ARTICLE IX
GOVERNING LAW - ARBITRATION
SECTION 9.1. This Agreement and any non-contractual matters connected with it shall be governed by and be construed in accordance with the laws of England.
SECTION 9.2. All disputes arising out of this Agreement shall be arbitrated in London in the following manner. One arbitrator is to be appointed by each of the parties hereto and a third by the two so chosen. Their decision or that of any two of them shall be final and, for the purpose of enforcing any award, this Agreement may be made a rule of the court. The arbitrators shall be commercial persons, conversant with shipping matters. Such arbitration is to be conducted in accordance with the rules of the London Maritime Arbitration Association terms current at the time when the arbitration proceedings are commenced and in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof.
SECTION 9.3. In the event that a party hereto shall state a dispute and designate an arbitrator in writing, the other party shall have 20 Business Days to designate its own arbitrator. If such other party fails to designate its own arbitrator within such period, the arbitrator appointed by the first party can render an award hereunder.
SECTION 9.4. Until such time as the arbitrators finally close the hearings, either party shall have the right by written notice served on the arbitrators and on the other party to specify further disputes or differences under this Agreement for hearing and determination.
SECTION 9.5. The arbitrators may grant any relief, and render an award, which they or a majority of them deem just and equitable and within the scope of this Agreement, including but not limited to the posting of security. Awards pursuant to this Article IX may include costs, including a reasonable allowance for attorneys’ fees, and judgments may be entered upon any award made herein in any court having jurisdiction.
ARTICLE X
COUNTERPARTS
SECTION 10.1. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.
ARTICLE XI
NOTICES
SECTION 11.1. Every notice or other communication under this Agreement shall:
(a) be in writing delivered personally or by first-class prepaid letter (airmail if available) or facsimile transmission or other means of telecommunication (other than telex) in permanent written form;
(b) be deemed to have been received, in the case of a letter, when delivered personally or three (3) days after it has been put into the post and, in the case of a facsimile transmission or other means of telecommunication (other than telex) in permanent written form, at the time of dispatch (provided that if the date of dispatch is a Saturday or Sunday or a public holiday in the country of the addressee or if the time of dispatch is after the close of business in the country of the addressee it shall be deemed to have been received at the opening of business on the next day which is not a Saturday or Sunday or public holiday); and
(c) be sent to:
(i) the Construction Supervisor at:
Costamare Shipping Company S.A.
60 Zephyrou Street & Syngrou Avenue
Athens, Greece
Facsimile No.: +30 210 940 9051
Attention: Chief Executive Officer
(ii) the Owner at:
c/o Costamare Inc.
Guildo Pastor Center
7 rue de Gabian
Monaco 98000
Facsimile No.: to be advissed
Attention: Gerant
or to such other address and/or numbers for a party as is notified by such party to the other party under this Agreement.
SECTION 11.2. Each communication and document made or delivered by one party to another pursuant to this Agreement shall be in the English language.
SECTION 11.3. This Agreement shall not create benefits on behalf of any other person not a party to this Agreement, and this Agreement shall be effective only as between the parties hereto, their successors and permitted assigns.
IN WITNESS of which this Agreement has been duly executed the day and year first before written.
For the Owner
For the Construction Supervisor
SCHEDULE 1
FORM OF CONSTRUCTION CERTIFICATE
[On the letterhead of the Construction Supervisor]
[Vessel Owner] (the “Owner”)
[Address]
Facsimile: [ ]
Attention: [ ]
Date:
Dear Sirs,
[Name of Builder] (the “Builder”), [Name of Vessel] (the “Vessel”)
We refer to the construction supervision agreement dated [ ] between the Owner and us (the “Supervision Agreement”).
Words and expressions defined in the Supervision Agreement (whether expressly or by incorporation by reference to another document) shall have the same meaning where used in this certificate.
We hereby certify, pursuant to Section 3.1(d) of the Supervision Agreement, as follows:
(1) the Vessel has been duly completed and is ready for delivery to and acceptance by the Owner in or substantially in accordance with the Shipbuilding Contract and the Specifications and Plans; and
(2) the Vessel is recommended for classification by [Name of the classification society] (the “Classification Society”).
With respect to paragraph (ii) above, please find attached to this certificate the provisional certificate of the Classification Society recommending such classification of the Vessel / a duplicate or photocopy of the provisional certificate of the Classification Society recommending such classification of the Vessel / the following evidence of the Classification Society’s recommendation of such classification of the Vessel [ ].
| Yours faithfully, | ||
| for and on behalf of | ||
| COSTAMARE SHIPPING COMPANY S.A. |