EXHIBIT 10(c)(1)
----------------
MANAGEMENT AGREEMENT made and entered into as of the 1st day
of January, 1985, by and between LION INSURANCE COMPANY LTD., a
Bermuda corporation ("Lion"), and MARITIME OVERSEAS CORPORATION,
a New York corporation ("MOC").
W I T N E S S E T H:
WHEREAS, MOC is a corporation engaged in rendering
management and administrative services; and
WHEREAS, Lion desires to employ MOC to perform certain
management and administration services for Lion and MOC is
willing to perform such services, on the terms herein provided.
NOW THEREFORE, in consideration of the mutual covenants
herein contained, it is agreed as follows:
1. Appointment of MOC - Lion appoints MOC as its agent to
perform the duties and provide the services described in this
Agreement, in accordance with such directions and instructions as
Lion may issue from time to time, and upon the terms and
conditions herein provided.
2. Acceptance of Appointment - MOC accepts such
appointment and undertakes to perform the duties and provide the
services described in this Agreement in accordance with such
reasonable directions and instructions as Lion may issue from
time to time, and upon the terms and conditions herein provided.
MOC shall exercise reasonable care in the performance of its
duties under this Agreement. Nothing in this Agreement shall be
deemed to grant to MOC any interest in the profits resulting from
its operation or as creating any relationship other than that of
principal and agent.
3. Duties of MOC - For the account of Lion, in accordance
with such directions, orders, forms and methods of supervision
and inspection as Lion may from time to time issue, in an
economical and efficient manner, and exercising due diligence to
protect and safeguard the interests of Lion, in connection with
the duties prescribed in this Agreement, MOC shall:
(a) Supervise the performance of all underwriting functions
in connection with risks submitted to Lion including,
but not limited to, such functions as the handling of
policy terms and conditions, premium rates and loss
settlements.
(b) Supervise the preparation, audit and processing as
necessary of all insurance documentation to be issued
by Lion such as policies, reinsurance contracts,
binders and endorsements.
(c) Supervise the preparation of all experience statistics
required by Lion.
(d) Supervise the preparation of all quarterly and annual
insurance statements required by Lion.
(e) Supervise the complete insurance accounting service,
including but not limited to the establishment of all
necessary reserves such as those for unearned premiums,
loss reserves and reserves for expenses.
(f) Supervise the preparation of all tax statements and
returns required of Lion with respect to premiums and
all other taxes.
(g) Supervise the preparation and maintenance of complete
books and records with respect to all aspects of Lion's
operations, including books and records necessary for
the annual financial statements and audit of Lion and
quarterly financial statements; such financial
statements shall include figures showing the earned
premium rates to incurred claims ratio for Lion.
(h) Advise Lion periodically, at such intervals and with
such frequency as Lion may specify, as to the amount of
reserves and other funds available for investment from
time to time by Lion, and advise Lion with respect to
investments.
(i) Assist in obtaining and maintaining in force, except
for the percentage of risk retained by Lion,
reinsurance with financially responsible reinsurers, of
all risks insured by Lion.
In connection with the performance of its duties under this
Agreement, MOC shall, from time to time, consult with members of
its legal department, and, upon instructions of Lion, shall
retain independent counsel for the account of Lion.
Nothing in this Agreement shall be deemed to obligate MOC to
expend its own funds in the payment of any amounts to be
disbursed for the account of Lion, it being understood that all
such funds shall be provided by Lion as herein set forth.
4. Office and Staff - MOC shall at all times maintain
appropriate offices, facilities and staff in order to perform
properly the duties and services set forth in this Agreement.
5. Compensation - (a) For the duties and services to be
performed hereunder MOC shall receive a fee for each year in an
amount to equal to eight percent (8%) of Lion's Gross Revenues
for that year. Anything herein to the contrary notwithstanding,
the total fee payable hereunder to MOC for any year may not
exceed ninety percent (90%) of Lion's Net Income for that year
before deductions for the fee.
Lion's Gross Revenues and Net Income for any year shall
be determined on an accrual basis in accordance with generally
accepted accounting principles applied on a consistent basis from
year to year.
(b) The parties shall agree upon an estimated fee for
each calendar year or portion thereof that this Agreement is in
effect, during the ninety days immediately preceding the
commencement of that year. MOC shall be entitled to receive
advances during the year based on the estimated fee. Promptly
after the final determination of Lion's Gross Revenues and Net
Income for the year, the fee shall be finally fixed, based on
Lion's Gross Revenues and Net Income for that year, and the
amount by which the fee as finally determined exceeds or is less
than the amounts advanced to MOC shall be paid by Lion or
refunded by MOC, as the case may be.
6. Expenses - The fees set forth in Section 5 of this
Agreement shall not include, and Lion shall promptly reimburse
MOC for, all amounts incurred, expended or disbursed by MOC for
the account of Lion pursuant to this Agreement or otherwise.
7. Indemnification of MOC - Lion shall indemnify, hold
harmless and defend MOC against any and all claims and demands
(including costs and reasonable lawyers' fees in defending such
claims and demands), whether or not any such claims or demands be
found to be valid, of whatsoever kind or nature and by whomsoever
asserted, and whether or not such claim or damage is caused by
MOC's negligence (but not arising out of MOC's gross negligence
or wilful misconduct), arising out of or in any way connected
with the performance of MOC's services in good faith hereunder.
MOC shall be under no responsibility or liability for
loss of profits, or otherwise, to Lion, arising out of any act or
omission involving any error of judgement or any negligence
(other than gross negligence or wilful misconduct) on the part of
its officers or employees, selected with due care, or otherwise
in connection with the performance of MOC's duties under this
Agreement.
MOC shall promptly notify Lion of any claim or demand
in respect of which MOC may be indemnified hereunder and shall co-
operate with Lion in the defense thereof.
8. Force Majeure - MOC shall be under no liability of any
kind or nature whatsoever in the event that it should fail to
perform any services hereunder if such failure is directly or
indirectly caused by war, war-like activities, government order,
supervening illegality, or any labor shortage, labor trouble,
strike or lock-out, or any shortage of material or Act of God or
any other cause whatsoever beyond MOC's control, whether or not
of the same or similar nature.
9. Dealings with Affiliates - If MOC shall utilize any
related or affiliated company to render any services or to
furnish any facilities in connection with the performance of its
duties under this Agreement, it shall disclose such relationship
to Lion.
10. Directions and Approvals - In acting under this
Agreement, MOC may accept and rely upon directions or approvals
made or given on behalf of Lion by any officer of Lion or by any
other person designated by Lion to give such directions and
approvals, unless and until MOC shall have received written
notice from Lion of the revocation or limitation of the authority
of such persons to act on behalf of Lion.
11. Term of Agreement - (a) This Agreement shall continue
to and including December 31, 1986. This Agreement shall be
automatically renewed for successive terms of one (1) year each,
unless, at least thirty (30) days prior to the expiration of the
initial term or the then current renewal term, either party shall
give written notice to the other electing to terminate this
Agreement at the expiration of the then current term.
(b) The termination of this Agreement shall not
relieve either party of liability for the performance of
obligations incurred by said party during the effective period of
the Agreement which have not been performed at the time of its
termination.
12. Assignment - This Agreement shall not be assigned by
either party without the consent in writing of the other.
13. Notices - All notices, demands, requests, approvals and
other communications ("Notices") which are given or required to
be given under, or with respect to, this Agreement, shall be sent
by registered or certified mail, postage prepaid, (except in case
of emergency or urgency when they shall be sent by telex, cable
or telegram and confirmed by such registered or certified mail),
addressed to the party for whom intended at its address specified
below or to such other address as such party shall hereafter
specify by like Notice.
Notices to Lion shall be addressed, until further notice, as
follows:
c/o Overseas Shipholding Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Notices to MOC shall be addressed, until further notice, as
follows:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
14. Entire Agreement and Amendments - This Agreement sets
forth the entire understanding of the parties relating to the
subject matter hereof and supersedes all other proposals and
agreements, oral or written, between the parties concerning the
subject matter hereof. None of the terms or provisions hereof
shall be modified, and this Agreement may not be amended, except
by a written instrument signed by the party against which such
modification or amendment is to be enforced.
15. Waiver - No waiver of any provision of this Agreement
shall be effective unless in writing signed by the waiving party
and no waiver of any breach or default hereunder shall constitute
a waiver of any other subsequent breach or default, whether of
the same or different nature.
16. Governing Law - This Agreement shall be governed and
construed in accordance with the laws of the State of New York.
17. Parties in Interest - This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective successors and assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their duly authorized officers as of the day
and year first above written.
LION INSURANCE COMPANY LTD.
By:
-------------------------
MARITIME OVERSEAS CORPORATION
By:
-------------------------
