COMMERCIAL MANAGEMENT AGREEMENT
THIS AGREEMENT is made on this
5th
day of September 2008.
BETWEEN:
(1) OCEANAUT INC. (the “Company”) a
company incorporated in Xxxxxxxx Islands whose registered office
is at Trust Company Complex, Ajeltake Island, X.X.Xxx 0000,
Xxxxxx, Xxxxxxxx Xxxxxxx, XX 00000 , for its own behalf and as
agent for and on behalf of the Shipowning Subsidiaries;
(2) Excel Maritime Carriers Ltd. (the “Commercial
Manager”) a company incorporated in Liberia whose
registered address is at 00 Xxxxx Xxxxxx Xxxxxxxx, Xxxxxxx;
WHEREAS
The Company wishes to appoint the Commercial Manager to provide
all necessary commercial management services to the Company and
its various shipowning subsidiaries from time to time (the
“Shipowning Subsidiaries” and together with the
Company the “Group” and any of them a
“member of the Group”), seeking and negotiating
employment for the Group’s vessels and the conclusion of
charterparties or other contracts relating to the employment of
all the vessels owned by the Shipowning Subsidiaries of the
Company from time to time (the “Vessels” and
each a “Vessel”) . For the purpose of this
agreement “Subsidiary” means any company the share
capital of which is from time to time directly or indirectly
owned by more than 51% by the Company.
NOW THEREFORE IT IS HEREBY AGREED:
| 1. | Appointment and Services |
1.1 In consideration of the payment of the fees hereinafter
described, the Company as principal and as agent for and on
behalf of the Shipowning Subsidiaries hereby appoints the
Commercial Manager exclusively to provide commercial management
services (the “Services”) to the Group, which
shall include the following functions:
(a) providing chartering services in accordance with the
Company’s instructions which include, but are not limited
to, seeking and negotiating employment for the Vessels and
subject to the Company’s approval the conclusion (including
the execution thereof) of charter parties or other contracts
relating to the employment of the Vessels, provided that the
Commercial Manager is authorised to conclude employment for the
Vessels of up to five (5) months duration on commercially
reasonable terms.
1.2 Subject to the terms and conditions herein provided,
during the period of this Agreement, the Commercial Manager
shall carry out the Services as agents for and on behalf of the
Company and the Shipowning Subsidiaries. The Commercial Manager
shall have authority to take such actions as it may from time to
time in its absolute discretion consider to be necessary to
enable it to perform the Services.
1.3 The Commercial Manager in the performance of the
Services shall be entitled to have regard to its overall
responsibilities in relation to all vessels as may from time to
time be entrusted to its management and in particular, but
without prejudice to the generality of the foregoing, the
Commercial Manager shall be entitled to allocate available
resources and services in such manner as in the prevailing
circumstances the Commercial Manager in its absolute discretion
consider to be fair and reasonable.
1.4 The Company shall procure forthwith that each
Shipowning Subsidiary (including such entities as may become
subsidiaries of the Company from time to time) shall evidence
its agreement to be bound by the terms and conditions of this
Agreement by executing a deed of accession to this Agreement in
the form of Schedule 1.
| 2. | Duration |
Subject to the Shareholder Approval being obtained by the
Company, this Agreement shall be effective as of the signing of
this Agreement and shall continue for an initial period of three
(3) years and shall be automatically extended for
successive one year periods, unless three (3) months
written notice by either party is given prior to the
commencement of the next period.
| 3. | Fees |
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3.1 For services performed hereunder by the Commercial
Manager, the Company shall pay, or procure that the relevant
Shipowning Subsidiary pays, to the Commercial Manager a
commission fee of one and a quarter percent (1.25%) calculated
on the collected gross hire/ freight/ demurrage payable when the
relevant hire/ freight/ demurrage are collected.
3.2 The management fee under Clause 3.1 shall be paid
to the Commercial Manager within three (3) business days
upon collection by the Company
and/or its
Technical Manager.
3.3 Payment shall be made to the Commercial Manager’s
bank account as follows:
Name of
Account: [ ]
Name of
Bank: [ ]
Bank Sort
Code: [ ]
SWIFT
Account: [ ]
or to such other account as the Commercial Manager may nominate
by notice in writing to the Company from time to time.
3.4 The Company shall provide the Commercial Manager, if so
requested, with reasonable access to all documents relating to
the calculation and collection of the earnings of the Vessels.
| 4. | Insurances |
4.1 The Company shall procure that, throughout the period of
this Agreement,
(a) at no expense to the Commercial Manager, the Vessels
are insured for not less than their sound market value or
entered for their full gross tonnage, as the case may be for:
(i) usual hull and machinery marine risks (including crew
negligence) and excess liabilities;
(ii) protection and indemnity risks (including pollution
risks and crew insurances); and
(iii) war risks (including protection and indemnity and
crew risks),
in accordance with the best practice of prudent owners of ships
of a similar type to the Vessels, with first class insurance
companies, underwriters or associations (the “Shipowning
Subsidiaries’ Insurances”);
(b) all premiums and calls on the Shipowning
Subsidiaries’ Insurances are paid promptly by their due
date;
(c) the Shipowning Subsidiaries’ Insurances name the
Commercial Manager and, subject to underwriters’ agreement,
any third party designated by the Commercial Manager as a joint
assured, with full cover, with the Company procuring on behalf
of the relevant Shipowning Subsidiary cover in respect of each
of the insurances specified in sub-clause 6.1, if
reasonably obtainable, on terms such that neither the Commercial
Manager nor any such third party shall be under any liability in
respect of premiums or calls arising in connection with the
Shipowning Subsidiaries’ Insurances;
(d) written evidence is provided, to the reasonable
satisfaction of the Commercial Manager, of compliance with the
obligations under Clause 4 within a reasonable time from
the commencement of this Agreement, and of each renewal date
and, if specifically requested, of each payment date of the
Shipowning Subsidiaries’ Insurances.
| 5. | Expenses Paid on Behalf of the Company and/or any Shipowning Subsidiary |
5.1 Any expenses incurred by the Commercial Manager under
the terms of this Agreement on behalf of a member of the Group
shall be paid to the Commercial Manager by the Company against
supporting vouchers.
5.2 Notwithstanding anything contained herein to the
contrary, the Commercial Manager shall in no circumstances be
required to use or commit its own funds to finance the provision
of the Services.
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| 6. | Commercial Manager’s Right to Sub-Contract |
6.1 The Commercial Manager shall not have the right to
sub-contract any part of its obligations hereunder, provided
that, in the event of such a sub-contract the Manager shall
remain fully liable for the due performance of their obligations
under this Agreement.
| 7. | Responsibilities |
7.1 “Force Majeure Event” —
Neither any member of the Group nor the Manager shall be under
any liability for any failure to perform any of their
obligations hereunder by reason of any cause whatsoever of any
nature or kind beyond their reasonable control. Force majeure
will only relieve a party from any obligation to the extent that
the event actually prevents performance of the obligation and
has not been caused by that party’s default. The party
claiming force majeure must notify the other party of the
commencement and the end of the force majeure events, and take
all reasonable steps to mitigate the effects thereof.
7.2 The Commercial Manager, without prejudice to
Clause 7.1, shall be under no liability whatsoever to any
member of the Group 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 performance of the Services UNLESS the same is
proven to have resulted solely from the gross negligence or
wilful default of the Commercial Manager or its employees, or
agents or sub-contractors employed by it, in which case the
Commercial Manager’s liability for all incidents or series
of incidents arising in any calendar year shall never exceed a
total of ten (10) times the actual annual management fee
paid in that year hereunder.
7.3 (Indemnity) Except to the extent and
solely for the amount therein set out that the Manager would be
liable under Clause 7.2, the members of the Group hereby
undertake to keep the Commercial Manager and its employees,
agents and sub-contractors indemnified and to hold them harmless
against all actions, proceedings, claims, demands or liabilities
whatsoever or howsoever arising which may be brought against
them or incurred or suffered by them or any of them arising out
of or in connection with the performance of the Agreement, and
against and in respect of all costs, losses, damages and
expenses (including legal costs and expenses on a full indemnity
basis) which the Commercial Manager may suffer or incur (either
directly or indirectly) in the course of the performance of this
Agreement, except where such costs, losses, damages and expenses
have been occasioned by the Commercial Manager’s own gross
negligence or wilful default.
7.4 (“Himalaya Clause”) It is
hereby expressly agreed that no employee or agent of the
Commercial Manager (including every sub- contractor from time to
time employed by the Commercial Manager) shall in any
circumstances whatsoever be under any liability whatsoever to
any member of the Group for any loss, damage or delay of
whatsoever kind arising or resulting directly or indirectly from
any act, neglect or default on his part while acting in the
course of or in connection with his employment and, without
prejudice to the generality of the foregoing provisions in this
Clause 7, every exemption, limitation, condition and
liberty herein contained and every right, exemption from
liability, defence and immunity of whatsoever nature applicable
to the Commercial Manager or to which the Commercial Manager is
entitled hereunder shall also be available and shall extend to
protect every such employee or agent of the Commercial Manager
acting as aforesaid and each such employee and agent shall have
the right under the Contracts (Rights of Third Parties) Xxx 0000
to enforce and to enjoy the benefit of this Clause 7.
| 8. | Duration of the Agreement and Termination |
8.1 This Agreement shall come into effect on the day and
year referred in Clause 2 and shall continue until it is
terminated:
(a) by the either party in accordance with Clause 2;
(b) by the Commercial Manager forthwith on the giving of
written notice to the Company if:
(i) any moneys payable by any member of the Group under
this Agreement shall not have been received in the Commercial
Manager’s nominated account within ten (10) calendar
days of receipt by the Company of the Commercial Manager’s
written request; or
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(ii) any Vessel is repossessed by a secured creditor.
(c) by either the Company or the Commercial Manager at any
time on the giving of notice if the other is in breach of any
material term of this Agreement and that breach is not remedied,
within 10 Business Days of the terminating party giving notice
to the party in breach, to the satisfaction of the terminating
party (acting reasonably).
8.2 This Agreement shall be deemed to be terminated
(a) in relation to a Vessel (and the Shipowning Subsidiary
which is the owner of that Vessel) in the case of the sale of
that Vessel or if that Vessel becomes a total loss or is
declared as a constructive or compromised or arranged total loss
or is requisitioned. The Vessel shall not be deemed to be lost
unless either she has become an actual total loss or agreement
has been reached with her underwriters in respect of her
constructive, compromised or arranged total loss or if such
agreement with her underwriters is not reached it is adjudged by
a competent tribunal that a constructive loss of the Vessel has
occurred;
(b) in the event of an order being made or resolution
passed for the winding up, dissolution, liquidation or
bankruptcy of either party (otherwise than for the purpose of
reconstruction or amalgamation) or if a receiver is appointed,
or if it suspends payment, ceases to carry on business or makes
any special arrangement or composition with its creditors.
| 9. | Limitation of Liability |
9.1 The Commercial Manager shall not be liable for any
indirect or consequential losses for any reason whatsoever.
| 10. | Payment Netting and Set Off |
All amounts due under this Agreement shall be paid in full
without any deduction or withholding other than as required by
law. All amounts referred to in this Agreement are expressed
exclusive of any value added tax in any applicable jurisdiction.
No member of the Group shall be entitled to assert any credit,
set-off or counterclaim against the Commercial Manager in order
to justify withholding payment of any such amount in whole or in
part.
| 11. | Notices |
All notices, requests, consents and other communications under
this Agreement shall be in writing and shall be deemed delivered
(a) upon delivery when delivered personally, (b) upon
receipt if by facsimile transmission (with confirmation of
receipt thereof), or (c) one business day after being sent
via a reputable nationwide overnight courier service
guaranteeing next business day delivery, in each case to the
intended recipient as set forth below:
If to Oceanaut Inc.:
Oceanaut Inc
00xx Xx Xxxxxxxx Xxxx Xxxxxx — Lamia & Xxxxxxx xxxxxx
000 00 Xxx Xxxxxxx
Xxxxxx, Xxxxxx
Facsimile: x00 000 00 00 000
Attention: Chief Executive Officer
00xx Xx Xxxxxxxx Xxxx Xxxxxx — Lamia & Xxxxxxx xxxxxx
000 00 Xxx Xxxxxxx
Xxxxxx, Xxxxxx
Facsimile: x00 000 00 00 000
Attention: Chief Executive Officer
If to Excel Maritime Carriers Ltd.:
Par La Ville Place
14 Par La Xxxxx Xxxx
XX 0000 Xxxxxxxx
Xxxxxxx
Xxxxxxxxx: Xxxxxxx Xxxxxxxx
14 Par La Xxxxx Xxxx
XX 0000 Xxxxxxxx
Xxxxxxx
Xxxxxxxxx: Xxxxxxx Xxxxxxxx
Any party may change the address to which notices, requests,
consents or other communications hereunder are to be delivered
by giving the other parties notice in the manner set forth in
this clause.
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| 12. | Governing Law and Dispute Resolution |
This Agreement shall be governed by and construed in accordance
with English law and any dispute arising out of or in connection
with this Agreement shall be referred to arbitration in London
in accordance with the Arbitration Xxx 0000, or any statutory
modification or re-enactment thereof save to the extent
necessary to give effect to the provisions of this Clause. The
Arbitration shall be conducted in accordance with the London
Maritime Arbitrators Association (LMAA) terms current at the
time when the arbitration proceedings are commenced. The
reference shall be to three arbitrators. Each party to appoint
one arbitrator and the two so appointed to appoint the third who
shall act as chairman of the Tribunal. On the receipt by one
party of the nomination in writing of the other party’s
arbitrator, that party shall appoint their arbitrator within
fourteen days, failing which the single arbitrator shall act as
sole arbitrator and any decision of the sole arbitrator shall be
binding in both parties. The two arbitrators so appointed shall
appoint the third arbitrator within fourteen days.
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IN WITNESS WHEREOF, the parties hereinabove have caused this
Agreement to be signed in duplicate by their respective and duly
authorized representatives as of the date first written
hereinabove.
OCEANAUT INC.
| By: |
/s/ Xxxxxxx Panayotides |
Name: Xxxxxxx Panayotides
| Title: | President, Chief Executive Officer and Director |
| By: |
/s/ Xxxxxxxx Xxxxxxx |
Name: Xxxxxxxx Xxxxxxx
| Title: | President, Chief Executive Officer and Director |
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Schedule 1
Deed of
Accession
[ ]
200[ ]
From: [ ]
To: [ ]
Dear Sirs,
| Re: | Commercial Management Agreement of even [ ] and made between ] (1) Oceanaut Inc. (the “Company”) and (2)[ ] (the “Manager”) |
We refer to the Commercial Management Agreement (the
“Agreement”). We are a Shipowning Subsidiary as
defined in the Agreement and are to become owners of the vessel
“[ ]”
(the “Vessel”).
We hereby confirm that:
(a) the Company has entered into the Agreement as our
agent, for and on our behalf; and
(b) we are bound to observe the terms and conditions of the
Agreement as if we were a named signatory therein.
We confirm that we are the Company’s principal in respect
of the Agreement as it relates to the Vessel and ourselves. We
hereby confirm that the Company has full authority on our behalf
(i) to execute the Agreement and any agreement or addendum
supplemental thereto, (ii) to give to the Manager any
instructions required of us under the Agreement, (iii) to
exercise any of our rights under the Agreement and (iv) to
act in accordance with the terms contained in the Agreement,
both on our behalf and on all matters relating to us, which are
the subject of the Agreement and as they relate to the Vessel.
We hereby confirm that we will be bound by any actions taken by
the Company under the Agreement on our behalf and we hereby
confirm and ratify any such actions taken by the Company.
The terms and provisions of this letter shall be governed by and
construed in accordance with English law, and this letter is
being executed as a deed on the date first above written.
Yours faithfully,
For and on behalf of
[ ]
In the presence of:
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