EXHIBIT 10.4
Explanatory Note: We are including a form of this
agreement because all of the NSSPL contracts are
identical except for the name, date, pricing terms,
and vessel description.
FORM OF
SHIP TECHNICAL MANAGEMENT AGREEMENT
This Agreement is made on the [date] between [name of customer], a company
organized and existing under the laws of Singapore and having its registered
office at 456 Alexandra Road, #06-00 NOL Building Singapore 119962 (hereinafter
called "the Owner") and Neptune Shipmanagement Services (Pte) Ltd (NSSPL) a
company organised and existing under the laws of Singapore and havings its
registered office at 456 Alexandra Road, #15-00 NOL Building, Singapore, 119962
(hereinafter called "the Manager") of the other part.
WHEREAS:
(1) The Owner is the disponent owner of the motor vessel [vessel name] official
number [vessel number] (hereinafter called "the Vessel") and registered in
Singapore.
(2) The Owner is desirous of appointing the Manager to act as its Manager for
the management of the Vessel under the following terms and conditions.
NOW IT IS HEREBY AGREED as follows:
1. APPOINTMENT
a) The Owner hereby appoints the Manager as Ship's Technical Manager for the
management of the Vessel and the Manager hereby accepts such appointment
under the terms and conditions herein provided. This Agreement is not
intended to be and shall not be construed as a demise or charter of the
Vessel by the Owner to the Manager.
b) The services to be done or rendered by the Manager in its abovementioned
capacity are those usually and customarily performed or rendered by Ship's
Technical Managers.
The Manager shall perform its services with due care, diligence, skill and
dispatch and shall comply with any specific instructions of the Owner as
and when issued to it. Such services shall include, but not be limited to
the following activities:
(i) To exercise due diligence to maintain the Vessel in an efficient, clean
and seaworthy condition in respect of the Vessel's hull, machinery,
accommodation, tackles, apparels, furniture and equipment.
(ii) To take or defend such legal proceedings as may be necessary in respect
of the Vessel.
(iii) To obtain quotations from shipyards, ship repairers, and other
contractors for repairs/installation works to be carried out as directed
by Owners and surveyors; and to place orders for such work/equipment as
may be necessary.
(iv) To maintain the Vessel in Class and to ensure that all trading and Class
certificates are valid at all times.
(v) To ensure that the Vessel complies with all statutory requirements.
(vi) To keep the Vessel's equipment and machinery at all times in complete
seaworthiness, repair and in such conditions so as to comply with the
requirements of the Vessel's classification society.
(vii) To carry out all other reasonable acts usually performed by Ship's
Technical Managers on behalf of the Owner of a ship.
(viii) To protect the interests of the Owner in all matters relating to the
efficient operation and management of the ship.
(ix) To arrange and supervise the dry docking of the Vessel including repairs,
running maintenance, surveys, additions/alterations and modifications
carried out on the Vessel.
2. DUTIES AND RESPONSIBILITIES OF THE MANAGER
The Manager shall carry out and perform the following services for the
Vessel.
a) To maintain and preserve the Vessel in good, clean, efficient and
seaworthy condition.
b) To engage such qualified and competent persons such as Master, officers
and crew necessary and sufficient for the safe navigation and maintenance
of the Vessel and to replace such persons if they are found to be
disqualified, incompetent or unhealthy. Certificated officers shall hold
qualifying certificates issued by their respective countries or other
certificates recognized by the Maritime And Port Authority of Singapore.
c) To pay for such expenses as crew wages, overtime, victuals, standby
wages, medical and vacation as well as costs incurred for airfares, car
and launch hire, hotel accommodation and agency fee related to crew
joining and repatriation. The manager shall not claim from the owner for
the aforesaid expenses as they are covered by the lump sum fee payable by
the Owner under Clause (8) of the Agreement.
d) To supply deck, engine and cabin stores and replenish lubricating oils
necessary for the Vessel's safe navigation, efficient operation and
trading and to pay for such expenses, which are for the Manager's account
as such expenses are covered by the lump sum fee
payable by the Owner under Clause (8) of the Agreement.
e) To do usual maintenance and repairs if necessary and to carry out surveys
as required by Vessel's Classification Surveyors, Governmental and Port
Authorities.
For normal wear and tear and negligence of the crew, the Manager shall
pay for such expenses relating to maintenance, repair charges, spare
parts and survey fees and shall not claim from the Owner the aforesaid
expenses as they are covered by the lump sum fee payable by the Owner
under Clause (8) of the Agreement. For all exceptional and unusual
repairs (including, but not limited to those resulting from heavy damages
to hull and/or machineries), the Manager shall obtain the prior
authorization of the Owner with respect to every decision concerning the
damage repair.
The Vessel hull/machinery insurance deductible of US$[amount of
deductible] accident or occurrence shall be borne by the Managers.
f) To inspect the Vessel and keep the Owner informed in a written report of
the Vessel's conditions and performance at least once every six months;
and to validate all certificates and licenses so as to comply with
regulations of international shipping or maritime laws.
g) To obtain legal advice in relation to disputes on matters affecting the
interest of the Owner in respect of the Vessel.
3. INSURANCE
The Owner shall arrange for insurance coverage on the Vessel in respect
of its Hull and Machinery and P & I Insurance. The Manager shall be
included as an additional assured. The Owner shall be responsible for the
recovery from Underwriters of all repair expenses incurred by average
damages after presentation of all necessary documents by the Manager. The
Owner shall also handle all claims for both Hull and Machinery and P & I
and the Manager shall assist in arranging attendance by surveyors,
superintendents, P & I representatives, etc. as appropriate and providing
all necessary information requested by the relevant parties. P & I
compensations for crew injuries, illness and loss of life shall be
covered in accordance with the maritime and labor laws and any collective
labor agreement of the crew's country. The beneficiary of all policies
shall be the Owner or assignees of the Owner. The Manager shall report to
the Owner, at the Owner's request, on handling and settling of insurance
claims.
4. LIABILITIES
a) The Owner hereby undertakes at all times to keep the Manager
indemnified and to hold them harmless against all actions,
proceedings, claims, demands or liabilities whatsoever which may be
brought against or incurred by the Manager in relation to any and
every thing done or caused to be done in the course of or in the
provision of the services hereby contracted for and against all costs
and expenses (legal or otherwise) or damages which the Manager may
suffer or incur in defending or settling the same.
b) As between the parties hereto any superintendent , master, officer or
crew member employed on the Vessel or in connection with the provision
the services hereby contracted for and any superintendent or other
employee or agent of the Manager while on board or in attendance on the
Vessel shall be deemed to be the servant of the Owner and
(i) The Manager shall be under no liability to the Owner in respect of
any act, omission, default or negligence of any such person as
aforesaid
(ii) The Owner shall indemnify the Manager and hold them harmless against
all liabilities whatsoever which the Manager may incur towards third
parties (including all costs and expenses incurred in connection
with any proceedings brought by such third parties, howsoever
arising) by reason of any such act default or negligence as
aforesaid
Provided however that the provisions of this Clause shall not apply if it be
affirmatively established that the person who was guilty of such act default or
neglect as aforesaid was a person who was not competent to undertake the duties
for which he was engaged by the Manager and that the relevant act omission,
default or neglect, whether willful or otherwise, was directly occasioned by his
want of competence only and that there was a failure on the part of the Manager
to exercise reasonable care and diligence in relation to the engagement of the
person concerned. Provided that the Manager shall not be liable for any sum
exceeding one year's shipmanagment fee.
Without prejudice to Clause 19, The Manager shall not be liable to the Owners
for any loss, damage delay or expense of whatsoever nature, whether direct or
indirect, including but not limited to any loss arising out of or in connection
with the detention or delay to the Vessel and howsoever arising in the course of
performance of the Management services.
5. DRYDOCKING
The Manager shall give the Owner at least four (4) months' notice of their
intention to dry dock the Vessel and the date of dry docking to be mutually
agreed. Such notice shall include among other appropriate information,
comprehensive specification, repair, damage report, reports of
special/regular inspection and recommendation for renewal/improvement,
alteration of the Vessel and provide wherever possible a cost estimate on
the above for Owner's approval. The Manager shall be reimbursed by the
Owner on a cost recovery basis for all expenses relation to dry dock, dry
docking paints, docking underwater spare parts, maintenance and repairs,
survey and other related expenses.
6. MODIFICATIONS
Any modification of the Vessel or fitting of additional equipment as
required by the Owner, classification surveyors or government authorities
shall be for the account of the Owner. However, prior to undertaking any
modification work on the Vessel, the Manager has to obtain Owner's
approval.
7. CREW SPECIAL ALLOWANCE
The crew shall perform when so required and the Owner shall pay extra crew
special work allowance to the crew for hold/tank cleaning work where manual
debunking is required and other special cargo work authorized by the Owner.
8. MANAGER'S REMUNERATION
In consideration of the hereinbefore mentioned services provided by the
Manager, the Owner agrees to pay the Manager a fixed lump sum fee monthly
in advance commencing from the date on which the Manager assumes the
management of the Vessel, as per the Owner's instructions. Thereafter,
payment shall be made on the same date of each subsequent month so long as
the Agreement shall remain in force. The amount of the lurnpsum fee shall
be agreed upon and shall be set out in Schedule 1 attached hereto.
It is agreed that at the commencement of the agreement, the Owners shall
provide the Managers with a bank guarantee equivalent to two (2) months
lump sum fee, which guarantee the Managers shall be entitled to call upon
in the event of non-receipt of the monthly lump sum fee payment at the
stipulated time.
The Manager shall submit a draft budget to the Owner three months before
the commencement of any renewal of this Agreement, for the Owners approval.
The Manager shall be entitled to treat the said proposed budget as approved
if the Owner fails to reply within thirty days of receipt of the said
budget.
9. VESSEL CONDITION AND INVENTORY
Upon assumption of the management of the Vessel on [date], the Vessel shall
be in good running and working condition in respect to main engine, its
auxiliaries and other machinery, navigation equipment, cargo gears, etc.
Upon termination of this Agreement, they shall be in likewise conditions
except for normal wear and tear. A level of Inventory of spare parts and
lubricants shall be set at the time the Manager assumes the management of
the Vessel and upon termination the Vessel shall have the same quantities
as presented on the day the Manager assumes the management of the Vessel.
If at time of termination there is any difference above or less in respect
to the inventories set at time the Manager assumes management of the
Vessel, the Manager will debit or respectively credit the Owner with the
amount of the difference calculated at market price at time and place of
termination.
10 PRECOMMENCEMENT EXPENSES FOR NEW VESSEL
The Owner shall reimburse the Manager for all expenses incurred on
presentation of invoices, receipts, and vouchers in respect of expenses
incurred prior to the date a new Vessel enters service enumerated herein as
follows subject to prior approval of Owner.
i) crew initial joining expenses;
ii) standby allowance for officers sent to the ship or shipyard in
advance for purpose of familiarization;
iii) initial Owner's stores, comprising of deck, engine and cabin stores,
and lubricants.
11. VESSEL'S INSPECTION
The Owner and its representative shall have the right to conduct
inspections of the Vessel at any time, subject to reasonable notice to the
Manager of such intention. The Manager shall cooperate, assist and provide
any information enquired by the said parties, as far as is reasonable.
12. DECISION MAKING
Subject to the Owner's absolute right to issue any specific instructions as
provided in Section 1(b), the Manager shall have the authority to decide
matters relating to the Ship's Technical Management but prime consideration
in all decisions shall be to preserve the Vessel always in good and
seaworthy condition.
13. PERIOD OF APPOINTMENT AND TERMINATION
This Agreement shall remain in force for the period from the date the
Manager assumes the management of the Vessel as per the Owner's
instructions until 31st December 2001, unless the Vessel is sold or laid
up, in which case Section 16 shall apply. Thereafter, the Agreement shall
be extended on a calendar year basis, unless terminated by either party
giving two months' notice in writing before the expiry of each term.
If upon termination of the Agreement, the Vessel is at sea or at a port
where repatriation of crew is considered as inconvenient and costly, the
Manager shall agree to continue with the Vessel's management until the
Vessel arrives at a convenient and safe port, however such extension shall
not be more than 30 days. In event of such extension, all expenses incurred
by the Manager including an additional fee derived by prorating the lump
sum fee according to the term of such extension, shall be for the account
of the Owner. The cost of crew's travel and repatriation upon termination
shall be paid by the Owner.
14. OPERATING IN A WAR ZONE
In the event that the Vessel is operated in a WAR ZONE whereby the Manager
has incurred extra expenses this is to be reimbursed by the Owner on actual
cost basis with prior consultation as far as is practicable.
15. MISCELLANEOUS EXPENSES
In the event where the Master requires the services of the following for
safety reasons, such expenses incurred therefore shall be for the Owner's
account provided prior approval from the Owner shall be obtained.
a) Weather routing or meteorological information;
b) Pilotage in non-compulsory areas such as the North Sea, the Barrier
Reef and the Japan Inland Sea;
c) Watchmen or security guards in accordance with local requirements.
d) Charterers requirements if applicable.
e) Federal and local and/or state government requirements
16. CANCELLATION
Upon the premature termination of this agreement other than by reason of
default of the Manager, or if the Vessel is lost, sold or otherwise
disposed of, the lump sum monthly fee shall continue to be payable to the
Managers, for a further period of three calendar months.
In addition, the Owner shall reimburse the Manager such expenses which the
Manager is to pay to the crew costs for a further period of three calendar
months and other parties as a result of such cancellation. In addition, the
Owners shall pay an equitable proportion for any redundancy costs which may
materialize as a result of such termination not exceeding a ceiling often
times the monthly lump sum fee.
In the event that the Vessel is laid up, both parties shall meet to revise
this Agreement, however, the Owner shall compensate the Manager for such
expenses which the Manager is liable to pay to the officers, crew and other
parties, resulting from the premature termination of their employment. The
cost of the crew's travel and repatriation upon termination shall be
provided for by the Owner.
The Manager shall be entitled to terminate this Agreement if
a) the Owner after receipt of written notice of objection thereto from the
Manager proceeds with employment of or continues to employ the Vessel in a
trade or in a manner which is in the opinion of the Manager likely to be
detrimental to its reputation as Manager or (otherwise than by virtue of
ordinary business competition) be prejudicial to the commercial interest of
the Manager.
b) if any moneys payable by the Owner shall not have been received within ten
days of a written request for the same.
17. ASSIGNMENT
This Agreement shall not be assigned by either party without the consent in
writing of the other party.
18. LOSS OF TIME
In the event of interruptions, detentions, or stoppages in the Vessel/t/s
navigation in excess of the allowable time limit per Addendum or operation
due to the following reasons, the Technical Manager shall refund the
management fee~ payment referred to in Clause (8)
in this Agreement and Clause (1) of the Schedule 1 to the Owner on a pro-
rata basis for such time lost;
a) Deficiency of crew members, stores, spares and lubricants; or
b) Strike by officers or crew; or
c) Unlawful activities of officers or crew; or
d) Non-validity of essential certificates or licenses as required by
regulations of international shipping or maritime laws or Classification
Society.
No refund shall be given for loss of time due to landing of sick crew
members or engaging in rescue operation.
19. 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.
20. ARBITRATION AND APPLICABLE LAW
Any dispute arising in connection with this Agreement shall be referred to
arbitration in Singapore in accordance with the Arbitration Act (Cap 16) of
Singapore.
SCHEDULE 1
In consideration of the services as enumerated in Clause (1) and (2) provided by
the Manager to the Owner, the Owner shall pay to the Manager a lump sum fee of a
total sum of USD[amount of fee] or USD[amount of fee] month as per attached
Addendum giving a breakdown of expenses.
Such fee shall include ship's operating cost related to technical functions,
comprising crew wages and allowance, crew messing, crew medical, deck stores,
engine stores, cabin stores, spare parts, lubricants, normal repair and survey,
postage, telegram, telex, telephone, water and miscellaneous expenses; vessel's
technical management and accounting functions.
In addition to the above, a lump sum fee of USD[amount of fee] per year shall be
paid by [name of customer] to the manager on monthly basis to cover Damage
repair costs on H & M insurance deductible of USD[amount of deductible] per
incident.
IN WITNESS WHEREOF the hereto have caused this Agreement to be executed the date
and year first above written
Signed by
For and on behalf of
In the presence of
Signed by
Mr. Kim Tau Kok
For and on behalf of
Neptune Shipmanagement Services
(Pte) Ltd
in the presence of
Ms Susan Chng
ADDENDUM TO
Shipmanagement Agreement dated [date] between [name of customer] and Neptune
Shipmanagement Services (Pte) Ltd (NSSPL) in connection with the management of
[name of vessel].
_________________________________________________________________
a) For the purposes of clarification, it is hereby mutually declared and
agreed between the parties that the breakdown of the fixed lumpsum fee for
the period [date] to [date] is as follows:-
US$
Manning
Stores
Repairs & Maintenance
Communications
Miscellaneous
Lubricants
Shipmanagement Fees
TOTAL
b) In addition, a lumsum fee of USD[amount of fee] per year shall be paid by
[name of customer] to the Manager on a monthly basis to cover Damage repair
costs on H&M insurance deductible of USD[amount of deductible] per incident.
c) Allowable stoppage time : [number] Hours per year
d) Complement : [number] Persons
IN WITNESS WHEREOF the parties hereto have caused this Addendum to be executed
the date and year first above written
Signed by
For and on behalf of
In the presence of
Signed by
Mr. Kim Tau Kok
For and on behalf of
Neptune Shipmanagement Services
(Pte) Ltd
in the presence of
Ms Susan Chng