FOR VESSELS AS PER ATTACHMENT
1. Date of Agreement THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)
STANDARD SHIP MANAGEMENT AGREEMENT
CODE NAME: "XXXXXXX"
PART 1
2. Owners (name, place of registered office and law 3. Managers (name, place of registered office and law of
of registry) registry)
[Subsidiary of SEACOR] [Subsidiary of SMIT]
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Name Name
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Place of registered office Place of registered office
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Law of registry Law or registry
4. Day and year of commencement of Agreement (Cl.
2.1.)
5. Crewing (state "yes" or "no" as agreed) (Cl. 6. Technical Management (state "yes" or "no" as agreed) (Cl.
2.3.(i) and CL. 3) 2.3.(ii) and Cl. 4)
7. Insurance (state "yes" or "no" as agreed (Cl. 8. Freight Management (state "yes" or "no" as agreed (Cl.
2.3.(iii)) and Cl. 5) 2.3.(iv) and Cl. 6)
9. Accounting (state "yes" or "no" as agreed) (Cl. 10. Chartering (state "yes" or "no" as agreed, if "yes", also
2.3.(v) and Cl. 7) state period of employment) (Cl. 2.3.(vi) and Cl. 8)
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period of employment in excess of which owners' prior
consent shall first be obtained
11. Sale or purchase of vessel (state "yes" or "no" 12. Provisions (state "yes" or "no" as agreed (Cl. 2.3.(viii)
as agreed) (Cl. 2.3.(vii) and Cl. 9) and Cl. 10)
13. Bunkering (state "yes" or "no" as agreed)(Cl 14. Operation (state "yes" or "no" as agreed) (Cl. 2.3.(x) and
2.3.(ix) and Cl. 11) Cl. 12)
15. Annual management fee (state lump sum amount) 16. Redundancy costs (state maximum amount) (Cl. 15.3(b))
(Cl. 15.1)
17. Day and year of termination of Agreement (Cl.
23.1.)
18. Law of Arbitration (state 24.1., 24.2. or 24.3. of Cl. 24, as agreed; if 24.3. agreed also state place of
arbitration)(If Box 18 not filled in 24.1. shall apply) (Cl. 24)
See Clause 24.1
19. Notices (state postal and cable address, telex 20. Notices (state postal and cable address, telex and telefax
and telefax number for service of notice and number for service of notice and communication to the
communication to the Owners) (Cl. 25) ------
------------- Managers) (Cl. 25)
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It is mutually agreed between the party mentioned in Box 2 (hereinafter called "the Owners") and the party mentioned
in Box 3 (hereinafter called "the Managers") that this Agreement consisting of PART I and PART II as well as ANNEX "A"
or ANNEX "B" (as applicable) and ANNEX "C" attached hereto, shall be performed subject to the conditions contained
herein. In the event of a conflict of conditions, the provisions of PART I shall prevail over those in PART II and
ANNEX "A" or "ANNEX "B" (as applicable) and ANNEX "C" to the extent of such conflict but no further.
Signature(s)(Owners) Signature(s)(Managers)
ATTACHMENT
Following vessels are included in the Management Agreement commencing
19th December 1966, between:
[Subsidiary of SEACOR]
AND
[Subsidiary of SMIT]
Vessels:
Signature(s) (Owners) Signature(s) (Managers)
NYFS11...:\93\73293\0013\1711\AGED236U.070
Smit Internationale NV hereby guarantees to the Owners the performance
of the Managers under Clause 18.5 of Part II of this Ship Management
Agreement.
Smit Internationale NV
By:________________________
authorized signatory
PART II
SHIP MANAGEMENT AGREEMENT
This Management Agreement is entered into between [Subsidiary of
SEACOR], acting as agent for and on behalf of the vessel owners listed on
Schedule A hereto (the "Owners") and [Subsidiary of SMIT] (herein the
"Managers")
From time to time, the Owners may add vessels, subject to
acceptance by the Managers, for management under this Agreement, upon
30 days' prior written notice, specifying the date of delivery to the
Managers hereunder and the expected area of operation to be serviced,
subject to the further terms and provisions hereof. In addition, the
Owners may from time to time remove vessels from management hereunder
upon like notice, subject to the further terms and provisions hereof.
Definitions
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In this Agreement save where the context otherwise requires,
the following words and expressions shall have the meanings hereby
assigned to them.
"Affiliate" -- shall mean, as to any Person, any other
Person which, directly or indirectly, controls, is controlled by or is
under common control with such Person. For the purposes of this
definition, "control" means the possession of the power to direct or
cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the ownership of 50% of the voting
securities of any Person does not, in and of itself, constitute
control.
"Competitive Basis" shall mean, when used with reference to
the provision of management of services hereunder, the performance of
services at a cost competitive with third party costs for equivalent
management services in the geographic regions where each Vessel is
operated, including, but not limited to, management fees and operating
expenses (running costs) taking into account considerations of flag
and crew nationality for each Vessel when compared with other vessels
employed in comparable service and trading in the same geographic
region. Such considerations shall be based on a comparison with
similar vessels sailing under a Northern European registry, such as
the Netherlands, Norway, Isle of Man or the United Kingdom, with
officers and crew of Northern European nationality. The reference
herein to "third party" shall be deemed to be a reference to other
ship managers or vessel operators who provide
comparable services and meet comparable standards as are required by
customers and regulatory authorities in the areas of operation of each
Vessel, including the standards set forth in clause 2.2 hereof.
"Offshore Vessel" shall mean any platform supply vessel,
offshore supply vessel, towing supply vessel, anchor handling towing
supply vessel, crew boat, as those terms are commonly used in the
offshore trades.
"Person" shall mean an individual, firm, corporation,
general or limited partnership, limited liability company, limited
liability partnership, joint venture, trust, governmental authority or
body, association, unincorporated organization or other entity.
"Purchase Agreement" shall mean that certain Asset Purchase
Agreement, dated December 19, 1996, by and among SEACOR Holdings,
Inc., certain of its subsidiaries named therein and SMIT
Internationale, N.V. and certain of its subsidiaries named therein.
"Vessel" (or collectively "Vessels") shall mean (a) any
Offshore Vessels acquired pursuant to the Purchase Agreement which are
operating in the North Sea and (b) any Offshore Vessels owned or
bareboat chartered by any of the Owners which are under charter or
other contract for use in the North Sea and have been offered to the
Managers for management services to be rendered on a Competitive Basis
hereunder and the Managers and the Owners have reached agreement
thereon.
I. Marginal Headings
-----------------
The Marginal Headings of this Agreement are for
identification only and shall not be deemed to be part hereof or be
taken into consideration in the interpretation or construction of this
Agreement.
II. Appointment of the Managers
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A. With effect from the day and year stated in Box 4 and
continuing unless and until terminated as provided herein, the Owners
hereby appoint the Managers and the Managers hereby agree to act as
the Managers of the Vessels.
B. The Managers undertake to use their best endeavours to
provide the Management Services specified in sub-clause 2.3 on behalf
of the Owners in accordance with sound ship management
practice consistent with the current standards and procedures of the
Managers and to protect and promote the interests of the Owners in all
matters relating to the provision of services hereunder. For the
purposes of this Agreement, "sound ship management practice" shall
also include compliance with the ISM code as and when required by the
terms thereof, and in the case of VB, obtaining ISO 9002 certification
for onshore operations and vessel operations in areas where compliance
is expected and required by law or regulation or charterers no later
than June 30, 1997 or such later date as agreed between the Owners and
the Managers but in no event later than December 31, 1997. SVB hereby
agrees to obtain and then maintain such ISO 9002 certification as
aforesaid and to comply with the ISM Code as and when required by the
terms thereof.
In the performance of their management responsibilities
under this Agreement, the Managers shall be entitled to have regard to
their overall responsibility in relation to any vessels as may from
time to time be entrusted to their management. In particular, but
without prejudice to the generality of the foregoing, the Managers
shall be entitled to allocate available supplies, manpower and
services in such manner as in the prevailing circumstances the
Managers consider to be fair and reasonable; provided that the
Managers shall not give preference in any respect to other vessels
owned, operated or managed by the Managers, it being understood that
the Managers shall, in so far as practical, ensure a fair distribution
of available manpower, supplies and services to all vessels including
the Owners' Vessels.
C. Subject to the terms and conditions herein provided,
during the period of this Agreement, the Managers shall carry out, as
agents for and on behalf of the Owners, such of the following
functions in respect of each Vessel as shall have been indicated
affirmatively in Boxes 5 to 14 in PART I:
*) a. Crewing (see Clause 3)
*) b. Technical Management (see Clause 4)
*) c. Insurance (see Clause 5)
*) d. Accounting (see Clause 7)
*) e. Provisions (see Clause 10)
*) f. Bunkering (see Clause 11)
*) g. Operation (see Clause 12)
and shall have authority to take such actions as the Managers may from
time to time in their absolute discretion consider to be necessary to
enable them to perform this Agreement in accordance with sound ship
management practice.
2.3. (i) to (x) are options to be agreed, and Boxes 5 to 14
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in PART I should be filled in with either "yes" or "no" accordingly.
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D. In accepting their appointment as the Managers
hereunder, the Managers further acknowledge, undertake and agree:
1. to manage the Vessels efficiently for the Owners so far
as reasonably practicable in accordance with the policies and
instructions, if any, given from time to time by the Owners to
the Managers, to the extent deemed reasonably necessary by the
Owners, and accepted by the Managers, such acceptance not to be
unreasonably withheld, and shall protect and promote the
interests of the Owners in all matters relating to the Vessels
and the management, crewing, operation, maintenance, survey and
repair of the Vessels;
2. to perform all duties to be performed under and pursuant
hereto in such a manner as to provide the Owners with services on
a Competitive Basis and that this undertaking is of the essence
in this Agreement;
3. to comply, for the benefit of the Owners, with the
provisions concerning "non-competition" with the Owners in the
Offshore Vessel business as specifically provided in the Purchase
Agreement.
III. Crewing (only applicable if 2.3(i) agreed to according
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to Box 5)
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The Managers shall ensure that each Vessel will be operated
at all times with adequate and properly qualified Crew as required by
the Owners and in accordance with the laws, rules and regulations of
the state of registry where such Vessel is flagged, provision of which
shall include but not be limited to the following:
a. experienced Master and Chief Engineer who are
familiar with the types of operations in which such Vessel will
be engaged and furthermore, deck ratings shall be experienced in
anchor handling and towing operations and be familiar with cargo
loading and discharging procedures alongside offshore
installations and the Chief Officer shall also have such
qualifications when and to the extent required by the anticipated
operations;
b. arrangement of transportation of the Crew,
including repatriation (provided that the Owners reserve the
right to designate the principal carriers to be used);
c. recruiting, selecting and training of the Crew;
d. supervision of the efficiency of the Crew and
administration of all other crew matters such as planning for the
xxxxxxx of each Vessel for minimum 12 months period (if
practically possible);
e. payroll arrangements;
f. arrangement and administration of pensions and
Crew insurance to the extent not covered by p&i. insurance and
any national social security system (or equivalent) applicable to
the Crew;
g. enforcement of Crew discipline;
h. negotiation of terms and conditions of employment
of the Crew, being mindful that the level of labor costs must be
similar to that of the Owners' competitors;
i. enforcement of appropriate standing orders;
j. take all appropriate action to reduce the number
of sick leave days;
k. safety training, and full compliance with safety
rules; and
l. encourage among the Crew good customer relations
in order to ensure satisfactory service to the Owners' customers.
It is understood that all Crew will be selected and employed
by the Managers but the Master shall be deemed to be under the control
and direction of the Owners. The Owners and the Managers agree to
cooperate fully in directing the Masters and the Owners confirm that
they have appointed the Managers to act as their agents to direct the
Master. The Owners shall have the right at any time to refuse any
officers or crew on board any Vessel managed hereunder upon written
notice from the Owners to the Managers, such notice to state the
grounds therefor, including but not limited to, the fact that the
Owners' customer has requested the replacement of any such member of
the Crew. In the event any member of the Crew is replaced for cause,
the cost of replacement of such crew member, including travel and
wages incurred in order to replace such crew member, shall be for the
account of the Managers.
The Owners shall reimburse the Managers for the costs
incurred for the Crew after the date hereof by payment for each Master
and each member of the Crew on board each Vessel based on the wage
scales listed in Annex "A" hereto for the first year.
In connection therewith and as a part of the invoicing procedure for
such reimbursement, the Managers shall provide to the Owners a
detailed list of the names, position held, dates of service on board
such Vessel and traveling to and from such Vessel, and wage system and
nationality, where applicable, of each Master and member of the Crew
for which reimbursement is sought.
It is further understood and agreed for all purposes of this
Agreement, that under no circumstances shall the Owners be liable for
any employee costs relating to employee benefit arrangements of the
Crew for all periods of employment prior to the date hereof, including
but not limited to, accumulated severance pay, sick leave, vacation
pay, and retirement, all such costs to remain the sole responsibility
of the Managers. It is further understood and agreed that, other than
for the reimbursement of costs to the Managers as set forth in the
immediately preceding paragraph, the Owners shall not be liable for
any costs of whatsoever kind and nature relating to employment of
personnel under or pursuant to this Agreement.
If the Owners decide to reduce the xxxxxxx for any Vessel
during any period prior to the termination or expiration of this
Agreement, due to lay-up or otherwise, the Owners shall notify the
Managers of such reduction and the Managers shall promptly reduce the
xxxxxxx of such Vessel as instructed by the Owners. The crew level is
to be discussed between the Managers and the Owners. The Managers
shall do their utmost to re-deploy or find alternative employment for
any seafarer where possible during any periods when crew level is
reduced for a Vessel or Vessels.
IV. Technical Management (only applicable if 2.3.(ii)
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agreed according to Box 6)
--------------------------
A. In general, the Managers shall provide technical
management which includes, but is not limited to, the following
functions:
a. provision of competent personnel to supervise the
maintenance and general efficiency of each Vessel;
b. arrangement and supervision of drydockings,
repairs, and the upkeep of each Vessel to the reasonable
standards applicable in the industry; provided that the
Managers shall ensure that each Vessel will comply with all
requirements and recommendations of the classification
society, and with the laws and regulations of the country of
registry of such Vessel and of the places where she trades;
c. arrangement of the supply of necessary stores,
spares and lubricating oil;
d. appointment of surveyors and technical consultants
as the Managers may consider from time to time to be
necessary;
e. when requested by the Owners, arrangement and
supervision of alterations to a Vessel, provided that the
Owners and the Managers shall have agreed as to the costs to
be incurred and any additional compensation payable to the
Managers.
B. In carrying out the duties set forth in Clause 4.1, the
Managers shall arrange all such matters pertaining thereto consistent
with the following additional requirements (which shall not be deemed
to be limiting in any way):
a. any drydocking and other scheduled maintenance and
repair shall be scheduled in consultation with the Owners
and consistent with the Owners' contract requirements;
b. the drydocking schedule for the Vessels previously
delivered to the Owners and attached hereto as Annex "B"
shall not be varied except with the express prior written
consent of the Owners;
c. the Managers will prepare and submit work
specifications and cost estimates for drydocking, major
repair, alterations (including conversions and refits and
other structural and non-structural alterations) to any
Vessel if requested by the Owners and agreed to by the
Managers pursuant to sub-clause 4.1(v), and a list of
contractors from whom the Managers intend to invite tenders
for approval to the Owners at least 30 days prior to the
date scheduled to invite tenders for the performance of such
work. Any contractors who are finally invited to tender
shall include any contractors specifically designated by the
Owners and reasonably acceptable to the Managers. The
Managers shall also evaluate the tenders received in
response to the foregoing but the Owners shall finally
select the yard and subcontractors to be awarded the work to
be performed. Except in the case of an emergency, the
Managers shall deliver to the Owners all information
pertaining to the foregoing at least 15 days prior to the
date the Owners must give approval;
d. a representative designated by the Owners, in
addition to the Managers, shall be present during any
drydocking or major repairs and negotiation and final
settlement of shipyard invoices shall be carried out by
such Owners' representative in full cooperation with the
Managers;
e. in the event an emergency arises requiring
immediate repairs to a Vessel, the Managers shall notify the
Owners' local designated representative immediately, and, if
practicable, agree any actions to be taken, such local
representative shall be designated in accordance with clause
25;
f. when appointing surveyors and technical
consultants, the Managers shall obtain the prior approval of
the Owners (including approval of any anticipated expense)
unless such approval shall have already been given in
connection with the approval of the budget;
g. annually, for a period of 2 to 4 man-days, inspect
each Vessel thoroughly for its nautical and technical status
and the performance of the Crew and, in connection
therewith, provide written visit reports to the Owners
promptly after such inspection for discussion and
evaluation;
h. with respect to any Vessel, shall not extend the time
for compliance with any recommendations from the
classification society or correction of any deficiency noted
by any authority having jurisdiction over such Vessel,
without first obtaining the written consent of the Owners;
i. conduct main engine overhauls as and when required
on a regular basis in accordance with established past
practices or as required by the Owners or in order to
maintain class, estimates of both cost and timing for such
overhauls to be included in the annual budget; and
j. shall not defer the undertaking of any material
expense from one year to the next without the prior approval
of the Owners.
The Managers will use their best endeavors to ensure that
each Vessel is operational and running efficiently. The Managers
shall continue to maintain the Vessels in all material respects
consistent with their past practices.
V. Insurance (only applicable if 2.3.(iii) agreed according
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to Box 7); Compliance and Administration
----------------------------------------
A. Marine insurance covering hull and machinery, p&i, and
other such risks that may be required by the Owners will be provided
by the Owners, at Owners' cost; provided, that, in any event, Crew
Insurance which is to be provided by the Managers
pursuant to sub-clause 3(vi) shall be subject to the approval of the
Owners.
B. The Managers, at their sole cost and expense, will
secure and at all times maintain such other insurance as is
commercially prudent for businesses operating in the same businesses
as the Managers.
C. All insurances procured by the Owners shall be in the
name of the Owners and shall name the Managers as named assureds and
any relevant insurance procured by the Managers shall name the Owners
as named assureds; provided that, unless the Managers give their
express prior consent, no liability to pay premiums or p&i calls shall
be imposed on the Managers (except for such insurance as required by
clause 5.2 which the Managers are required to maintain for their own
account hereunder) notwithstanding the restrictions on p&i cover which
would thereby result.
D. The Owners agree to deliver copies of their insurance
policies and vessel charters (without charter hire and payment terms)
as promptly as possible. Such insurance policies and vessel charters
shall be held in the strictest confidence and shall not be divulged to
third parties or Affiliates of the Managers without the prior written
approval of the Owners.
E. The Managers shall not do any act or suffer any act to
be done whereby any insurance on any of the Vessels shall or may be
suspended, impaired or defeated, and will not suffer a Vessel to carry
cargo not permitted, or to be operated in any geographical area where
it would not be covered under the insurance policies in effect without
first notifying the Owners so that they may arrange or authorize the
Managers to obtain insurance coverage satisfactory to the Owners. The
Managers shall promptly advise the Owners n writing of any other act
or omission on the part of the Managers of which they have knowledge
and which might invalidate or render unenforceable, in whole or in
part, any insurance on any of the Vessels. The Managers shall
promptly notify the Owners of any incident falling under these
insurance requirements or under notification requirements, of which
they have knowledge, of any charter agreement under which a Vessel is
employed.
F. The Managers will receive, handle, supervise and arrange
for the adjustment of hull, p&i and other insurance claims and settle
such claims with the prior written approval of the Owners. The
Managers shall advise the Owners of any claims promptly after the
receipt thereof, shall provide the Owners with
estimates of potential costs to be incurred by the Owners for such
claims, and shall keep the Owners fully informed as to the status of
such claims. Upon settlement of claims, the Owners shall make any
payments required directly when due.
VI. Freight Management (only applicable if 2.3.(iv) agreed
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according to Box 8) N/A
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VII. Accounting (only applicable if 2.3.(v) agreed
---------------------------------------------
according to Box 9)
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A. In general, the Managers shall
a. establish an accounting system which meets the
requirements of the Owners, which the Owners shall provide
in writing to the Managers, and provide regular accounting
services, supply regular reports and records in accordance
therewith;
b. maintain the records of all costs and expenditures
incurred hereunder as well as data necessary or proper for
the settlement of accounts between the parties.
B. The Managers shall keep proper books, records, and
accounts in such currencies as is required by Clause 15, and where
required by local law, in accordance with such law and local generally
accepted accounting principles, and in a form prescribed by the Owners
to enable them to comply with the requirements of the United States
generally accepted accounting principles ("US GAAP") (such form will
include a schedule of cash disbursements and a schedule for
commitments made for the purposes of accrual accounting) and
supporting documentation, including vouchers, in the English language
(and, if unobtainable in the English language, after using every
effort to obtain agreement from vendors or subcontractors to render
invoices in the English language, additionally provide a full
translation or at least a reasonable summary translation thereof) (all
of which books, records, accounts and supporting documentation shall
be the property of the Owners), relating to the management and
operation of the Vessels and shall make the same available for
inspection and audit on behalf of the Owners upon their request and
during normal business hours. The Managers will also provide, upon
notice from the Owners, in addition to the Monthly Reports referred to
in Clause 14 below, such special reports, memoranda of any facts and
transactions, which in the reasonable opinion of the Owners, affects
the results or the performance of the services or activities under
this Agreement.
C. Whenever the Managers use any Affiliate of the Managers
to render any services or to furnish any stores, supplies, equipment,
provisions, materials or facilities that are for the account of the
Owners under the terms of this Agreement, the Managers shall also, as
a condition to such employment, obtain from such Affiliate its
agreement to comply with the Owners' requests for reasonable
supporting information.
D. Upon termination or expiration of this Agreement, in
addition to the redelivery of the Vessels to the Owners, the Managers
shall turn over to the Owners, at a place to be designated by the
Owners (transportation cost to be Owners' expense), all other property
of whatsoever kind then in the possession of the Managers pursuant to
this Agreement, except that in the case of vouchers or other
documentation which are required by law to be retained by the
Managers, then only copies of such vouchers or other documentation
shall be delivered to the Owners pursuant hereto. The Managers shall
also remain responsible to provide to the Owners a final accounting
hereunder.
E. The Managers shall provide to the Owners accurate
financial reports in the form prescribed pursuant hereto, and, as
specified in Clause 14, on a monthly basis and in no event later than
the 10th calendar day of each month beginning on February 10, 1997;
provided that the first financial report to be provided hereunder
shall be delivered on or about January 10, 1997 for the period
beginning on the date hereof and ending on December 31, 1996, in such
form as the Managers have routinely in the past provided such reports
to other clients or customers or as otherwise agreed between the
Owners and the Managers. It is expressly understood and agreed by the
Managers that timely accurate reporting is essential under this
Agreement in order to enable the Owners, who are members of a group of
companies belonging to a US public company, to file financial reports
with the United States government as mandated by US laws.
All reports to be delivered hereunder shall be delivered in
accordance with the provisions of Clause 25.
[Note: for Budgets, Monthly Advances and Reports and
Management of Funds, see Clauses 14 and 15]
VIII. Chartering (only applicable if 2.3.(vi) agreed
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according to Box 10) N/A
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IX. Sale or Purchase of Vessel (only applicable if
2.3.(vii) agreed according to Box 11) N/A
X. Provisions (only applicable if 2.3(viii) agreed
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according to Box 12
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The Managers shall arrange for the supply of provisions and
will set up a system that ensures that the Owners will be charged an
amount which does not exceed the actual amount agreed per man per day
under any subcontracts, where applicable, for the supply of such
provisions. Copies of such contracts to be provided to the Owners for
approval in connection with the approval of the annual budget. Any
cost overrun on the agreed amount pursuant hereto and included in the
budget will be for the account of the Managers, unless prior consent
is obtained from the Owners which shall not be unreasonably withheld.
The Managers shall provide the Owners with full supporting
documentation relating to meals and accommodation provided to any
charterers' personnel on board each Vessel, including the name and
company of each such person.
XI. Bunkering (only applicable if 2.3.(ix) agreed according
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to Box 13)
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The Managers shall arrange, subject to prior approval of the
Owners, for the provision of bunker fuel, lubricants and greases of
the right quality and quantity as specified by the Owners as required
for each Vessel's trade, shall give due regard for any requirements of
such Vessel's charterer to use its grades of lubricating oil or fuel
oil, and where such provision is for the Owners' account and in excess
of US$5,000, the Managers shall also obtain competitive tenders as
required by sub-clause 14.1(b) hereof, unless the Owners provide the
Managers with notice in writing that they intend to make their own
arrangements for such fuel, lubricants or greases.
XII. Operation (only applicable if 2.3.(x) agreed according
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to Box 14)
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The Managers shall provide for the operation of each Vessel,
as required by the Owners, including, but not limited to, the
following functions:
a. implementation of routine planned maintenance and
all matters necessary to maintain the seaworthiness and
operational efficiency of such Vessel;
b. compliance with reporting procedures and
document, invoice and cost control systems as
established by the Managers with the approval of the Owners;
c. management of a spare parts program to be
submitted to and approved by the Owners;
d. provision of logistic shore support through the
Owners' appointed ship's agent;
e. prompt reporting to the Owners of all incidents,
near-misses and accidents relating to or connected with any
such Vessel which may result in injury, death or claims by
any person. Prompt reporting to the Owners shall also be
required in the case of any damage to the Vessel, any
equipment or other property, or any other vessel which could
result in an insurance claim; provided that similar damage
which can reasonably be estimated not to result in an
insurance claim need only be included in the monthly report;
f. subject to the provisions of sub-clause 4.1(v),
supply and installation of additional equipment when
requested by the Owners;
g. provision of day-to-day nautical and technical
advice in view of problems encountered or anticipated with
any Vessel;
h. within the Managers' capabilities, provision of
assistance for commercial proposal information;
i. provision of accounts and supplementary
documents to the Owners such as:
* fuel consumption and costs
* list of meals and lodging for crew members
and charterers' personnel
* lists of lost and damaged materials (incl.
costs)
* additional equipment costs
* further documents required for reclaim from
the Owners' customers;
j. maintenance of spare parts inventory, including
renewals and replacement of parts, consistent with past
practices of the Mangers and approved by the Owners;
k. maintain safety records and statistics and report
all lost time accidents to be submitted as part of monthly
reports, except that groundings, collisions, loss or damage
to vessels, equipment or cargo to be reported in writing
within 24 hours of occurrence;
l. investigation and reporting of lost time accidents
or damage to vessels, equipment or cargo
after prompt interview of the Crew and recommendations as to
future prevention of like occurrences;
m. provision of copies to the Owners of safety manuals
and accident reporting procedures and any amendments
thereto;
n. attendance at any charterer's safety meetings after
notice from the Owners, in which case the Managers shall be
reimbursed for reasonable travel and lodging out of pocket
expense;
o. general nautical voyage instructions to such
Vessel; and
p. compliance with terms of insurance policies as
provided in sub-clause 5.4.
XIII. Insurance Policies
------------------
See clause 5
XIV. Budgets and Competitive Tenders; Management of Funds
----------------------------------------------------
A. 1. The Managers shall present to the Owners annually a
budget for the following twelve months in such form as the Owners
reasonably require consistent with the Owners' budgeting practices.
The budget for the first year hereof is set out in Annex "B" hereto.
Subsequent annual budgets shall be prepared by the Mangers and
submitted to the Owners not less than three months before the
anniversary date of the commencement of this Agreement (see Clause
2.1. and Box 4). The annual budget prepared by the Managers shall
include a plan and budget for the maintenance of the Vessels at such
times as are consistent with the anticipated or projected employment
of the Vessels, which the Owners shall provide to the Managers, upon
their request, in connection with the preparation of such budget. The
budget shall also detail each projected operating expense and the
currency in which such expenses will be payable and shall include
projected monthly advances to the Managers based on the anticipated
operation of each Vessel, including estimates of funds required in
each currency. In the event the Managers wish to engage any Affiliate
of the Managers to render any services or to furnish any stores,
supplies, equipment, provisions, materials or facilities that are for
the account of the Owners, then the Managers shall disclose the
details of the pricing thereof, provide sufficient information to the
Owners to assess whether such pricing is competitive in the area of
operation of the Vessels, and will be subject to the approval of the
Owners.
2. For any items in the budget or any expenditure later
arising exceeding US$5,000 (or equivalent in any other currency)
(including, but not limited to, stores, spares and lubricating
oils as may be required by clause 11) the Managers shall obtain
competitive tenders from at least three reliable sources at the
appropriate time and shall fully consult with the Owners as to
the selection of the contractors requested to tender and shall
obtain the Owners' prior written approval for the selection of
the contractor finally awarded the contract, subject to any
further specific requirements of the Owners as set forth in this
Agreement or otherwise at the time of preparation of the budget.
In the event that, after due investigation, the Managers
determine there are fewer than three reliable sources from whom
to seek tenders, the Managers shall promptly advise the Owners
and the reasons therefor.
3. Except for the estimated costs of periodic scheduled
drydocking which shall be executed in accordance with agreed
budgets, the annual budget shall not increase significantly from
year to year, it being the intention of the parties that the
Managers continue to maintain and operate the Vessels consistent
with past practices and shall use their best endeavors to ensure
that all expenses associated with the Vessels will remain
relatively constant from year to year with no material
deviations.
4. Acceptance by the Owners of a budget or the actual
expenditures in any one year shall in no way bind the Owners to
accept a similar budget or expenditures in any subsequent year
and shall not serve to waive the Owners' rights to challenge or
disapprove, in any subsequent year, any or all expenses which are
set forth in a budget or are actually incurred even if such
budgeted or actual expenses were approved in any previous year.
B. The Owners shall indicate to the Managers their
acceptance and approval of the annual budget within 45 days after
receipt thereof from the Managers and in the absence of any indication
from the Owners, the Managers shall be entitled to assume that the
Owners have accepted the said budget.
C. Following the agreement of the budget, the Managers
shall prepare and present to the Owners their estimate of the funds
requirement of each Vessel and the Managers shall each month up-date
this estimate. Based thereon, the Managers shall notify the Owners no
later than the 20th calendar day of each month for the funds required
to run such Vessel for the ensuing
month and the reimbursement of the Managers for the costs of the
Masters and the Crew for the then current month, including the payment
of any occasional or extraordinary item of expenditure, such as
emergency repair costs, additional insurance premiums, or bunkers and
specifying the currency in which they expect expenditures to be made;
provided that, in the event, the amount specified exceeds the budgeted
monthly expenditure by more than $5,000 (or equivalent in other
currencies), then the Managers shall provide a reasonable explanation
of such overrun. Such funds shall be made available by the Owners by
transfer to the appropriate Owners' accounts in order to make payments
in a timely manner and in accordance with the provisions of clause
15.2; provided that, with respect to reimbursement of the costs for
the Masters and Crew to the Managers, such funds shall be received by
the Managers within 7 calendar days after the receipt of such request
and shall be held to the credit of the Owners in a separate account as
provided in Clause 15.1.
D. In the event that an unanticipated expense of an
emergency or of an unusual nature arises in connection with the
operation of any Vessel for which no provision has been made in the
operating budget, the Managers shall notify the Owners immediately,
and upon receipt of such notice, the Owners shall promptly arrange for
the payment to the Managers of an amount equal to the expense which
the Managers are required to incur. To the extent feasible, the
Managers will consult with the Owners before incurring such expense.
In the event that the Owners advise the Managers that a
Vessel will be temporarily unemployed, the Managers will cooperate
fully with the Owners to reduce the costs of crewing, operating, and
maintaining such Vessel for such period of unemployment as may be
reasonably requested by the Owners.
E. The Managers shall promptly account to the Owners for
the amount of all discounts, rebates and commissions received from
third parties in connection with the performance or provision of
services hereunder, including, but not limited to, any such discounts,
rebates or commissions given on travel costs incurred hereunder,
provided that, to the extent any such discount, rebate or commission
is provided by, increased or varied by a third party based on volume
and such volume is due to the Owners' consumption combined with the
consumption by the Managers for themselves or others or the Managers'
Affiliates in other activities, then such discounts, rebates and
commissions will be allocated pro rata among the Owners, the Managers
and the Managers' Affiliates. The Managers agree to afford to the
Owners, if possible, the advantage of any existing or future
contracts of the Managers for the purchase or rental of materials,
fuel, supplies, facilities, services or equipment if this may be done
without unreasonably interfering with the requirements of other
vessels owned or operated by the Managers or their Affiliates.
F. The Managers shall provide reports to the Owners on a
monthly basis for each Vessel and for all Vessels collectively (the
"Monthly Operating Reports") which report shall set forth for the
preceding calendar month and on a year to date basis (1) revenues, if
any, received by the Managers or any affiliates of the Managers, (2)
operating expenses, (3) management fees, all as prescribed under
clause 7; and such operating information, as may be reasonably
requested by the Owners, including but not limited to, summaries of
Vessel downtime, special events, lost time accident statistics, names
of all officers and crew members for each vessel who have served on
board such vessel during the previous month, and if specially
required, fuel and lube consumption, average speed and weather,
maintenance performed while under voyage, together with all
appropriate supporting documentation and deck and engine room logs
(such Monthly Operating Reports to be in a form satisfactory to the
Owners). The Monthly Operating Reports shall be delivered to the
Owners no later than the 10th day of each month for the preceding
----------------------------------------------------------
month with supporting documentation (which shall be in the English
-----
language) to follow no later than 10 days thereafter. The Monthly
Operating Reports shall include a comparison of actual expenditures to
the operating budget and shall be presented showing the month's
performance as well as cumulative year to date on a calendar basis.
The Monthly Operating Reports shall also include a statement relating
to each Vessel and the Vessels collectively detailing cash received
and disbursed along with accounts receivable, accounts payable and
accrued expenses (namely, the commitments made for purposes of accrual
accounting specified in sub-clause 7.2), to enable the Owners to
comply with the requirements of US GAAP, said statement to be
reconciled with the other Monthly Operating Reports.
At the end of each calendar quarter, there shall be a
reconciliation between the parties of amounts due to and from the
other and actual cash receipts, if any, and advances made pursuant to
clause 14.3 for said quarter and any over or under payments shall be
settled within 20 days following the end of such quarter.
G. The Managers shall not be required to use or commit
their own funds to finance the provision of the Management
Services. The Managers shall always provide adequate notice to the
Owners as provided for herein.
XV. Income Collected and Expenses Paid on Behalf of the
---------------------------------------------------
Owners
------
A. All moneys collected by the Managers under the terms of
this Agreement and any interest thereon shall be held to the credit of
the Owners in a separate bank account in the name of the Owners with
the Managers named as agent.
B. All expenses incurred by the Managers under the terms of
this Agreement on behalf of the Owners (but not including (a) the
management fees payable hereunder, which shall be invoiced and payable
separately to the Managers in accordance with Clause 16, (b)
reimbursement of the costs for the Masters and Crew to the Managers
and (c) certain other expenses which may be agreed between the Owners
and the Managers) shall be paid by the Managers, but only with the
countersignature of the Owners from accounts maintained by the Owners,
after the Managers shall have prepared and submitted disbursement
vouchers or similar requests for payment, together with the invoice to
be paid and any other supporting documentation, and the Owners shall
have approved such disbursements. The amounts referred to in (b) and
(c) in the parenthetical in the preceding sentence may be debited
against the Owners from the account referred to under Clause 15.1, but
in any event shall remain payable by the Owners to the Managers.
C. The Managers will use their best efforts to maintain all
funds received from the Owners in accounts in currencies designated by
the Owners based on anticipated operating expenses to be incurred in
such currencies and to effect disbursements on behalf of the Owners
from the currency account in which such expenses are payable. The
Managers will not convert funds in any currency account from that
currency to any other without the prior approval of the Owners. The
Management Fees payable hereunder shall be payable in the currency
specified in Xxx 00.
XVI. Management Fee
--------------
A. The Owners shall pay to the Managers for their services
as Managers under this Agreement an annual basic Management Fee in the
lump sum amount per Vessel as stated in Box 15 which shall be payable
in equal quarterly installments in advance, the first installment
being payable on the commencement
of this Agreement (see Clause 2.1 and Box 4) and subsequent
installments being payable quarterly thereafter.
B. The Managers shall, at no extra cost to the Owners,
provide their own office accommodation, office staff and stationary.
The Management Fee shall also include any charges for general
corporate overhead and general and administrative expenses of the
Managers and all services required for the performance of this
Agreement, other than those which are specific disbursements for each
Vessel, such as postage and communication expenses, travelling
expenses, and other out of pocket expenses, all properly incurred and
substantiated with supporting documentation, by the Managers in
pursuance of the Management Services.
C. In the event the appointment of the Managers is
terminated early by the Owners or the Managers in accordance with the
provisions of sub-clauses 23.2 or 23.3 other than by reason of default
by the Managers, or if a Vessel is lost, sold, otherwise disposed of
or withdrawn from management under this agreement due to the
relocation of such Vessel for commercial reasons to another geographic
region and the Owners do not substitute another Offshore Vessel
hereunder, the Management Fee payable to the Managers according to the
provisions of sub-clause 16.1 shall continue to be payable for a
further period of (a) three additional months in the case of
termination under sub-clause 23.2 (relating to default by the Owners),
or (b) one additional month for one to two vessels, two additional
months for three to five vessels, or three additional months if more
than five vessels, in the case of termination under sub-clause 23.3
(relating to loss, sale, other disposition or relocation of a
vessel(s)); provided that, such additional management fee shall not be
payable to the Managers if the management of such Vessel is
transferred to an Affiliate of the Managers.
D. While this Agreement remains in effect, if the Owners
decide to lay-up a Vessel and such lay-up lasts for more than three
months, the Management Fee shall be reduced by 50% for the period
exceeding three months until one month before the Vessel is again put
into service.
E. From time to time, the Owners may add Offshore Vessels
for management hereunder subject to the Managers' acceptance thereof,
and as provided in sub-clause 16.3 may remove Vessels from management
hereunder; provided that with respect to each Vessel added hereunder,
such addition shall be subject to agreement between the Owners and the
Managers as to the terms and conditions under which such Vessel shall
be managed pursuant
hereto, but the general terms, provisions and conditions hereof shall
always apply.
XVII. The Managers' Right to Sub-Contract
-----------------------------------
The Managers shall not sub-contract any of their obligations
hereunder to a third party without the consent of the Owners.
XVIII. Responsibilities
----------------
A. Force Majeure - Neither the Owners nor the Managers
-------------
shall be under any liability for any failure to perform any of their
obligations hereunder by reason of any cause whatsoever of any nature
or kind beyond their reasonable control.
B. Liability to the Owners - Without prejudice to sub
-----------------------
-clause 18.1, the Managers shall be under no liability whatsoever to
the Owners for any loss, damage, delay or expense of whatsoever
nature, whether direct or indirect (including, but not limited to,
loss of profit arising out of or in connection with detention of or
delay to the Vessel) and howsoever arising in the course of
performance of the Management Services.
Unless the same is proved to have resulted solely from the
negligence of the Managers or their employees or agents, or sub-
contractors employed by them in connection with any Vessel, in which
case (save where loss, damage, delay or expense has resulted from the
Managers' gross negligence or wilfull misconduct) the Managers'
liability for each incident or series of incidents giving rise to a
claim or claims shall never exceed a total of five times the annual
management fee payable for such vessel hereunder.
C. Indemnity - Except to the extent and solely for the
---------
amount therein set out that the Managers would be liable under sub-
clause 18.2. The Owners hereby undertake to keep the Managers and
their employees, agents and sub-contractors indemnified and to hold
them harmless against all actions, proceedings, claims, demands or
liabilities whatsoever or howsoever arising which may be brought
against them or incurred or suffered by them arising out of or in
connection with the performance of the Agreement, and against and in
respect of all costs, loss, damages and expenses (including customary
legal costs and expenses in the circumstances on a full indemnity
basis) which the Managers may suffer or incur (either directly of
indirectly) in the course of the performance of this Agreement.
D. "Himalaya". - It is hereby expressly agreed that no
--------
employee, crew member, or agent of the Managers (including every sub-
contractor from time to time employed by the Managers) shall in any
circumstances whatsoever be under any liability whatsoever to the
Owners for any loss, damage or delay of whatsoever kind arising or
resulting directly or indirectly from any act, neglect or default on
his part while acting in the course of or in connection with his
employment and, without prejudice to the generality of the foregoing
provisions in this Clause, every exemption, limitation, condition and
liberty herein contained and every right, exemption from liability,
defence and immunity of whatsoever nature applicable to the Managers
or to which the Managers are entitled hereunder shall also be
available and shall extend to protect every such employee or agent of
the Managers acting as aforesaid and for the purpose of all the
foregoing provisions of this Clause 18 the Managers are or shall be
deemed to be acting as agent or trustee on behalf of and for the
benefit of all persons who are or might be his 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.
E. The Managers agree to indemnify and hold the Owners
harmless from and against any and all liabilities, obligations,
damages, losses, deficiencies, costs, penalties, interest and expenses
arising out of, based upon, attributable to or resulting from any
claims made by any Crew xxxxxxx any Vessel (whether employed by the
Managers or engaged by the Managers on the basis of any other
arrangement) arising out of such employment or engagement or as a
result of the transactions contemplated by this agreement.
XIX. General Administration
----------------------
A. The Managers shall handle and settle all claims arising
out of the Management Services hereunder and keep the Owners informed
regarding any incident of which the Managers become aware which gives
or may give rise to claims or disputes.
B. The Managers shall, as instructed by the Owners, bring
or defend actions, suits or proceedings in connection with matters
entrusted to the Managers according to this Agreement.
C. The Managers shall obtain legal or technical or other
outside expert advice in relation to the handling and settlement of
claims and disputes or all other matters affecting the interest of the
Owners in respect of any Vessel only after prior consultation with and
approval by the Owners.
D. If the circumstances so require, the Owners shall
arrange for the provision of any necessary guarantee bond or other
security.
E. Any reasonable costs incurred by the Managers in
carrying out their obligations according to Clause 19 shall be
reimbursed by the Owners, so long as the Owners shall have approved
the same.
XX. Auditing
--------
The Managers shall at all times maintain and keep true and
correct accounts and shall make the accounts available for inspection
and auditing by the Owners upon request by the Owners and during
normal business hours.
XXI. Inspection of Vessel
--------------------
The Owners shall have the right at any time after giving
reasonable notice to the Managers to inspect any Vessel for any reason
they consider necessary.
XXII. Compliance with Law and Regulations
-----------------------------------
The Managers will not do or permit anything to be done which
might cause any breach or infringement of the laws and regulations of
the country of registry of the Vessel, and of the places where she
trades.
The Managers shall not operate the Vessels in any manner
which would cause the Owners to violate US laws and regulation
applicable to the Owners; provided that the Owners shall have provided
the Managers with notice and copies of such laws and regulations or
the Managers shall otherwise have actual knowledge of the same.
Should implementation or compliance with such laws and regulations
cause a material increase in expenses to the Managers, then Owners and
Managers shall agree on an appropriate adjustment in fees or
reimbursement relating to such increase in expenses.
The Managers may refuse to carry out any instructions of the
Owners which are unlawful or do not comply with the requirements of
the flag of a Vessel.
XXIII. Duration of the Agreement
-------------------------
A. This Agreement shall come into effect on the date stated
in Box 4 and shall continue until the date stated in Box
17. The Owners' shall have the option, upon 90 days' notice prior to
the expiration date, to extend this Agreement to further periods of
one year each on terms to be mutually agreed by the parties hereto.
B. Termination by Default. - The Managers shall be entitled
----------------------
to terminate the Agreement by notice in writing if any moneys payable
by the Owners of any Vessel, whether under this or any other
Management Agreement shall not have been received in the Managers'
nominated account within ten days of payment having been requested in
writing by the Managers.
The Managers shall also be entitled to terminate the
Agreement by notice in writing if after receipt of written notice of
objection thereto from the Managers the Owners of any Vessel whether
under this or any other Management Agreement proceed with employment
of or continue to employ such Vessel in a trade or in a manner which
is, in the opinion of the Managers, likely to be detrimental to their
reputation as Managers or (otherwise than by virtue of ordinary
business competition) be prejudicial to the commercial interest of the
Managers.
This Agreement shall terminate forthwith in the event of an
order being made or resolution passed for the winding up, dissolution,
liquidation or bankruptcy of either party (otherwise than for the
purpose of reconstruction or amalgamation) or if a receiver is
appointed, or if it suspends payment, ceases to carry on business or
makes any special arrangement or composition with its creditors.
C. Extraordinary Termination. - This Agreement shall be
-------------------------
deemed to be terminated with respect to a Vessel, in the case of the
sale of any Vessel or if any Vessel becomes a total loss or is
declared as a constructive or compromised or arranged total loss or
title thereto is requisitioned.
D. For the purpose of sub-clause 23.3 hereof
1. the date upon which such Vessel is to be treated as
having been sold or otherwise disposed of shall be the
date on which the Owners cease to be registered as the
Owners of such Vessel.
2. such Vessel shall not be deemed to be lost unless
either she is an actual total loss, in which case, it
shall be the date on which she was last heard from, 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
total loss of the Vessel has occurred.
E. The termination of this Agreement shall be without
prejudice to all rights accrued between the parties prior to the date
of termination.
F. The Owners' Right to Terminate. In the event that (1)
------------------------------
the Managers shall fail to provide the services contemplated hereby in
such a manner as to provide the Owners with such services on a
Competitive Basis, (2) the Managers fail to deliver accurate financial
accounts in a form prescribed by the Owners and on the time schedule
identified in Clause 14.6 hereof, which is designed to permit the
Owners, as members of a group belonging to a US public company, to
file financial reports with the United States Government, as mandated
by US securities laws, (3) the Managers or any of their Affiliates
breaches the provisions of Section 8.1 of the Purchase Agreement, (4)
the Managers or any of their Affiliates breaches the provisions of
Section 4 of that certain agreement, dated December 19, 1996, among
SMIT Internationale N.V., for itself and as agent for its direct and
indirect subsidiaries and SEACOR Holdings, Inc., for itself and as
agent for its direct and indirect subsidiaries, (5) except for
emergencies, the Managers consistently or materially overrun the
budget without first obtaining the prior written approval of the
Owners, or (6) any other material default hereunder where the Managers
shall have failed to remedy the same after 45 days' prior written
notice from the Owners, then the Owners shall have the right to
terminate this Agreement at any time upon 30 days' notice to the
Managers, whereupon, this Agreement shall terminate and the Managers
shall redeliver the Vessels and all property of the Owners to the
Owners forthwith and as instructed in such notice.
XXIV. Law and Arbitration
-------------------
*) A. This Agreement shall be governed by English law and,
unless otherwise mutually agreed, any dispute arising out of this
Agreement shall be referred to arbitration in London, one arbitrator
being appointed by each party, in accordance with the Arbitration Acts
1950 and 1979 or any statutory modification or re-enactment thereof
for the time being in force. 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
decision of the single Arbitrator appointed shall apply. If two
Arbitrators properly
appointed shall not agree they all appoint an umpire whose decision
shall be final.
*) 24.1, 24.2 and 24.3 are alternatives; indicate alternative
----------------------------------------------------------
agreed in Box 18.
----------------
XXV. Notices and Representatives
---------------------------
A. Any communication may be sent by telex, telefax (with
confirmation), registered or recorded mail or by personal service.
B. The address of the Parties for service of such
communication shall be as stated n Boxes 19 and 20, respectively.
C. Each of the Parties hereto shall appoint and designate
in writing, which may be changed from time to time upon further
written notice, to the other an official representative and alternate
representative who shall coordinate all communications and decisions
hereunder. Initially, such representatives shall be as stated in
Boxes 19 and 20, respectively.
D. The designated representative to contact in the case of
an emergency shall be provided to the other party hereto by written
notice from and to those persons designated pursuant to sub-clause
25.3.
E. Until further written notice pursuant subclauses 25.1
and 25.2, the monthly reports provided for herein shall be delivered
by the due date to:
[Address of Subsidiary of SEACOR]
26. English Language
----------------
All reports, correspondence, vouchers for expenses and
disbursements and other pertinent documents to be provided hereunder
to the Owners, including, but not limited to, purchase orders, shall
be presented to the Owners in the English language, unless otherwise
specifically provided elsewhere in this Agreement.
