Costamare Inc. (Form: 20-F, Received: 04/27/2016 08:04:57)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

F ORM 20-F


(Mark One)
o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
x		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
o		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COSTAMARE INC.
(Exact name of Registrant as specified in its charter)

NOT APPLICABLE
(Translation of Registrant’s name into English)

Republic of The Marshall Islands
(Jurisdiction of incorporation or organization)
7 Rue du Gabian
MC 98000 Monaco
(Address of principal executive offices)
Anastassios Gabrielides, Secretary
7 rue du Gabian
MC 98000 Monaco
Telephone: +377 93 25 09 40 Facsimile: +377 93 25 09 42
(Name, Address, Telephone Number and Facsimile Number of Company contact person)

SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:


Title of Each Class		Name of Each Exchange on Which Registered
Common Stock, $0.0001 par value per share		New York Stock Exchange
Preferred stock purchase rights		New York Stock Exchange
Series B Preferred Shares, $0.0001 par value per share		New York Stock Exchange
Series C Preferred Shares, $0.0001 par value per share		New York Stock Exchange
Series D Preferred Shares, $0.0001 par value per share		New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION PURSUANT TO SECTION 15(d) OF THE ACT: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

75,398,400 shares of Common Stock
2,000,000 Series B Preferred Shares, $0.0001 par value per share
4,000,000 Series C Preferred Shares, $0.0001 par value per share
4,000,000 Series D Preferred Shares, $0.0001 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o		Accelerated filer x		Non-accelerated filer o

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.

U.S. GAAP x International Financial Reporting Standards as issued by the International Accounting Standards Board o Other o

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 o Item 18 o

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

TABLE OF CONTENTS


		Page
ABOUT THIS REPORT		ii
FORWARD-LOOKING STATEMENTS		ii
PART I		1
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1
ITEM 3.	KEY INFORMATION	1
ITEM 4.	INFORMATION ON THE COMPANY	36
ITEM 4.A.	UNRESOLVED STAFF COMMENTS	54
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	55
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	89
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	93
ITEM 8.	FINANCIAL INFORMATION	101
ITEM 9.	THE OFFER AND LISTING	102
ITEM 10.	ADDITIONAL INFORMATION	104
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	120
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	121
PART II		122
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	122
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	122
ITEM 15.	CONTROLS AND PROCEDURES	122
ITEM 16.A.	AUDIT COMMITTEE FINANCIAL EXPERT	123
ITEM 16.B.	CODE OF ETHICS	123
ITEM 16.C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	123
ITEM 16.D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	124
ITEM 16.E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	124
ITEM 16.F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	125
ITEM 16.G.	CORPORATE GOVERNANCE	125
ITEM 16.H.	MINE SAFETY DISCLOSURE	125
PART III		126
ITEM 17.	FINANCIAL STATEMENTS	126
ITEM 18.	FINANCIAL STATEMENTS	126
ITEM 19.	EXHIBITS	126
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		F-1

ABOUT THIS REPORT

In this annual report, unless otherwise indicated:

•

“Costamare”, the “Company”, “we”, “our”, “us” or similar terms when used in a historical context refer to Costamare Inc., or any one or more of its subsidiaries or their predecessors, or to such entities collectively, except that when such terms are used in this annual report in reference to the common stock, the 7.625% Series B Cumulative Redeemable Perpetual Preferred Stock (the “Series B Preferred Stock”), the 8.50% Series C Cumulative Redeemable Perpetual Preferred Stock (the “Series C Preferred Stock”) or the 8.75% Series D Cumulative Redeemable Perpetual Preferred Stock (the “Series D Preferred Stock” and, together with the Series B Preferred Stock and the Series C Preferred Stock, the “Preferred Stock”), they refer specifically to Costamare Inc.;

•

currency amounts in this annual report and the accompanying prospectus are in U.S. dollars; and

•

all data regarding our fleet and the terms of our charters is as of April 20, 2016; 18 of our 72 containerships, including 12 newbuilds on order, have been acquired pursuant to the Framework Deed dated May 15, 2013 (the “Original Framework Deed”), as amended and restated on May 18, 2015 (as amended and restated, the “Framework Deed”), between the Company and its wholly-owned subsidiary, Costamare Ventures Inc. (“Costamare Ventures”), on the one hand, and York Capital Management Global Advisors LLC and an affiliated fund (collectively, together with the funds it manages or advises, “York”), on the other, by vessel-owning joint venture entities in which we hold a minority equity interest (any such entity, referred to as a “Joint Venture entity”, and any such jointly-owned vessel, including any vessel under construction, referred to as a “Joint Venture vessel”). See “Item 4. Information on the Company—B. Business Overview—Our Fleet, Acquisitions and Newbuild Vessels”.

We use the term “twenty foot equivalent unit” (“TEU”), the international standard measure of containers, in describing the capacity of our containerships.

FORWARD-LOOKING STATEMENTS

All statements in this annual report (and in the documents incorporated by reference herein) that are not statements of historical fact are “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. The disclosure and analysis set forth in this annual report includes assumptions, expectations, projections, intentions and beliefs about future events in a number of places, particularly in relation to our operations, cash flows, financial position, plans, strategies, business prospects, changes and trends in our business and the markets in which we operate. These statements are intended as “forward- looking statements”. In some cases, predictive, future-tense or forward-looking words such as “believe”, “intend”, “anticipate”, “estimate”, “project”, “forecast”, “plan”, “potential”, “may”, “should”, “could” and “expect” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. In addition, we and our representatives may from time to time make other oral or written statements which are forward-looking statements, including in our periodic reports that we file with the U.S. Securities and Exchange Commission (“SEC”), other information sent to our security holders, and other written materials. We caution that these and other forward-looking statements included in this annual report (and in the documents incorporated by reference herein) represent our estimates and assumptions as of the date of this annual report (and in the documents incorporated by reference herein) or the date on which such oral or written statements are made, as applicable, about factors that are beyond our ability to control or predict, and are not intended to give any assurance as to future results.

Factors that might cause future results to differ include, but are not limited to, the following:

•

general market conditions and shipping industry trends, including charter rates, vessel values and factors affecting supply and demand;

•

future supply of, and demand for, ocean-going containership shipping services;

•

our continued ability to enter into time charters with existing customers as well as new customers, including re-chartering of vessels upon the expiry of existing charters;

•

our ability to finance or refinance our existing vessels or future acquisitions;

•

our contracted charter revenue;

•

the effect of the worldwide economic slowdown;

•

disruption in the operation of certain of our managers located in Greece due to the continuing economic crisis or political unrest;

•

future operating or financial results and future revenues and expenses;

•

our future financial condition and liquidity, including our ability to make required payments under our credit facilities, comply with our loan covenants and obtain additional financing in the future to fund capital expenditures, acquisitions and other corporate activities, and funding by banks of their financial commitments;

•

the overall health and condition of the U.S. and global financial markets;

•

fluctuations in interest rates and currencies, including the value of the U.S. dollar relative to other currencies;

•

technological advancements and opportunities for the profitable operations of containerships;

•

the financial health of our counterparties, both to our time charters and our credit facilities, and the ability of such counterparties to perform their obligations;

•

future, pending or recent acquisitions of vessels or other assets, business strategy, areas of possible expansion and expected capital spending or operating expenses;

•

our expectations relating to dividend payments and our ability to make such payments;

•

our expectations about availability of existing vessels to acquire or newbuilds to purchase, the time that it may take to construct and take delivery of new vessels, including our newbuild vessels currently on order, or the useful lives of our vessels;

•

the availability of key employees and crew, the length and number of off-hire days, dry-docking requirements and fuel and insurance costs;

•

our anticipated general and administrative expenses;

•

our ability to leverage to our advantage our managers’ relationships and reputation within the container shipping industry;

•

our ability to maintain long-term relationships with major liner companies;

•

the expiration dates and extensions of charters;

•

our fees and expenses payable under our management and services agreements (as discussed below), as amended from time to time;

•

expected compliance with financing agreements and the expected effect of restrictive covenants in such agreements;

•

environmental and regulatory conditions, including changes in laws and regulations or actions taken by regulatory authorities;

•

expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standards imposed by our charterers applicable to our business;

•

requirements imposed by classification societies;

•

any malfunction or disruption of information technology systems and networks that our operations rely on or any impact of a possible cybersecurity breach;

•

risks inherent in vessel operation, including terrorism, piracy and discharge of pollutants;

•

potential disruption of shipping routes due to accidents, political events, piracy or acts by terrorists;

iii

•

potential liability from future litigation;

•

our cooperation with our joint venture partners and any expected benefits from such joint venture arrangement;

•

our business strategy and other plans and objectives for future operations; and

•

other factors discussed in “Item 3. Key Information—D. Risk Factors” of this annual report.

We undertake no obligation to update or revise any forward-looking statements contained in this annual report, whether as a result of new information, future events, a change in our views or expectations or otherwise. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

A. Selected Financial Data

The following table presents selected consolidated financial and other data of Costamare for each of the five years in the five-year period ended December 31, 2015. The table should be read together with “Item 5. Operating and Financial Review and Prospects”. The selected consolidated financial data of Costamare is a summary of and is derived from our audited consolidated financial statements and notes thereto, which have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Our audited consolidated statements of income, stockholders’ equity and cash flows for the years ended December 31, 2013, 2014 and 2015 and the consolidated balance sheets at December 31, 2014 and 2015, together with the notes thereto, are included in “Item 18. Financial Statements” and should be read in their entirety.


	Year Ended December 31,
	2011				2012				2013				2014				2015
	(Expressed in thousands of U.S. dollars, except for share and per share data)
STATEMENT OF INCOME
Revenues:
Voyage revenue		$	382,155			$	386,155			$	414,249			$	483,995			$	490,378
Expenses:
Voyage expenses			4,218				5,533				3,484				3,608				2,831
Voyage expenses—related parties			2,877				2,873				3,139				3,629				3,673
Vessels’ operating expenses			110,359				112,462				115,998				120,815				117,193
General and administrative expenses			4,958				4,045				8,517				7,708				8,775
General and administrative expenses–non-cash component			—				—				—				—				8,623
Management fees—related parties			15,349				15,171				16,580				18,469				18,877
Amortization of dry-docking and special survey costs			8,139				8,179				8,084				7,814				7,425
Depreciation			78,803				80,333				89,958				105,787				101,645
Amortization of prepaid lease rentals			—				—				—				4,024				4,982
(Gain) / Loss on sale of vessels, net			(13,077	)			2,796				(518	)			(2,543	)			(1,688	)
Foreign exchange (gains) / losses, net			(133	)			(110	)			(8	)			(7	)			129

Operating income		$	170,662			$	154,873			$	169,015			$	214,691			$	217,913

Other Income / (expenses):
Interest income		$	477			$	1,495			$	543			$	815			$	1,373
Interest and finance costs			(75,441	)			(74,734	)			(74,533	)			(95,562	)			(92,276	)
Swaps breakage cost			—				—				—				(10,192	)			—
Equity in net earnings of investments			—				—				692				(3,428	)			(529	)
Other, net			603				(43	)			822				3,294				427
Gain / (Loss) on derivative instruments, net			(8,709	)			(462	)			6,548				5,469				16,856
Total other income (expenses)		$	(83,070	)		$	(73,744	)		$	(65,928	)		$	(99,604	)		$	(74,149	)

Net Income		$	87,592			$	81,129			$	103,087			$	115,087			$	143,764

Earnings allocated to Preferred Stock		$	—			$	—			$	(1,536	)		$	(11,909	)		$	(17,903	)


	Year Ended December 31,
	2011				2012				2013				2014				2015
	(Expressed in thousands of U.S. dollars, except for share and per share data)
Net income available to Common Stockholders		$	87,592			$	81,129			$	101,551			$	103,178			$	125,861

Earnings per common share, basic and diluted		$	1.45			$	1.20			$	1.36			$	1.38			$	1.68
Weighted average number of shares, basic and diluted			60,300,000				67,612,842				74,800,000				74,800,000				75,027,474
OTHER FINANCIAL DATA
Net cash provided by operating activities		$	195,179			$	168,114			$	186,681			$	243,270			$	244,663
Net cash (used in) investing activities			(283,758	)			(236,509	)			(621,056	)			(119,263	)			(42,984	)
Net cash (used in) / provided by financing activities			26,801				237,720				260,433				(104,297	)			(214,663	)
Net increase / (decrease) in cash and cash equivalents			(61,778	)			169,325				(173,942	)			19,710				(12,984	)
Dividends and distributions paid			(61,506	)			(73,089	)			(81,515	)			(93,074	)			(102,287	)
Ratio of earnings to fixed charges ⁽¹⁾			2.16				2.00				2.19				2.25				2.83
Ratio of earnings to fixed charges and preferred stock dividends ⁽¹⁾			2.16				2.00				2.14				1.99				2.31
BALANCE SHEET DATA (at year end)
Total current assets		$	138,851			$	299,924			$	136,563			$	157,975			$	145,056
Total assets			1,982,545				2,311,334				2,685,842				2,714,740				2,638,561
Total current liabilities			226,589				249,411				294,980				290,376				271,966
Total long-term debt, including current portion			1,443,420				1,561,889				1,867,576				1,519,941				1,323,091
Common stock			6				8				8				8				8
Total stockholders’ equity/net assets			329,986				520,452				656,949				802,642				963,510

	Average for the Year Ended December 31,
	2011				2012				2013				2014				2015
FLEET DATA
Number of vessels			47.8				46.8				49.6				54.5				54.9
TEU capacity			231,990				237,975				263,899				317,006				320,140

⁽¹⁾

For purposes of calculating these ratios:

•

“earnings” consist of pre-tax income from continuing operations (which includes non-cash unrealized gains and losses on derivative financial instruments not designated as a hedge) plus fixed charges, net of capitalized interest and capitalized amortization of deferred financing fees;

•

“fixed charges” represent interest incurred (whether expensed or capitalized) and amortization of deferred financing costs (whether expensed or capitalized) and accretion of discount; and

•

“preferred stock dividends” refers to the amount of pre-tax earnings that is accrued for dividends on outstanding preferred stock. Beginning on August 7, 2013, we had 2,000,000 shares of Series B Preferred Stock outstanding, beginning on January 21, 2014, we had 4,000,000 shares of Series C Preferred Stock outstanding and beginning on May 13, 2015, we had 4,000,000 shares of Series D Preferred Stock outstanding.

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Risks Inherent in Our Business

Our profitability and growth depends upon world and regional demand for chartering containerships, and weakness in the global economy may impede our ability to generate cash flows, maintain liquidity and continue to grow our business.

The ocean-going container shipping industry is both cyclical and volatile in terms of charter rates and profitability. According to Clarkson Research, containership charter rates peaked in 2005, with the Containership Timecharter Rate Index (a per TEU weighted average of 6-12 month time charter rates of Panamax and smaller vessels (1993=100)) reaching 172 points in March and April 2005, and generally stayed strong until the middle of 2008, when the effects of the economic crisis began to affect global container trade, driving the Containership Timecharter Rate Index to a 10-year low of 32 points in the period from November 2009 to January 2010. As of the end of December 2015, the Containership Timecharter Rate Index stood at 43 points.

According to Clarkson Research, demand for containerships declined significantly, following the onset of the global economic downturn. After growing by just 4.0% in 2008, container trade contracted by 9.2% in 2009 before rebounding by 13.8% in 2010. While container trade grew by a CAGR of 5.3% per annum between 2010 and 2013 and is estimated to have risen by 5.4% in 2014 and a further 2.5% in 2015, such projections are subject to a wide range of risks. In 2015, worldwide trade volumes increased, but containership supply continued to exceed demand during the year as more large vessels were delivered. In addition, according to Clarkson Research, as of December 2015, the containership order-book represented 19% of the existing fleet capacity, 87% of which was for vessels with carrying capacity in excess of 8,000 TEU, both increasing the expected future supply of larger vessels and having a spillover effect on the market segment for smaller vessels. An oversupply in the containership market may negatively affect time charter rates for both short- and long-term periods as well as box freight rates charged by liner companies to shippers.

Freight rates have become more volatile since the downturn in 2009 and, despite some short-term improvements, freight rates have remained under pressure. Starting from the second half of 2014, liner companies, to which we seek to charter our containerships, have benefited from the recent collapse in the price of oil. Relatively weak trade growth coupled with the on-going delivery of high capacity containerships has placed significant pressure on certain trade routes as well. The continuation of such low freight rates or any further declines in freight rates, coupled with a sudden increase in oil price, would negatively affect liner companies and could lower prevailing charter rates. Weak or volatile conditions in the containership sector may affect our ability to generate cash flows and maintain liquidity, as well as adversely affect our ability to obtain financing.

The factors affecting the supply and demand for containerships are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable. The factors that influence demand for containership capacity include:

•

supply and demand for products shipped in containers;

•

changes in global production of products transported by containerships;

•

global and regional economic and political conditions;

•

developments in international trade;

•

environmental and other regulatory developments;

•

the distance container cargo products are to be moved by sea;

•

changes in seaborne and other transportation patterns;

•

port and canal congestion; and

•

currency exchange rates.

The factors that influence the supply of containership capacity include:

•

the availability of financing;

•

the price of steel and other raw materials;

•

the number of newbuild vessel deliveries;

•

the availability of shipyard capacity;

•

the scrapping rate of older containerships;

•

the number of containerships that are out of service;

•

changes in environmental and other regulations that may limit the useful lives of containerships;

•

the price of fuel; and

•

the economics of slow steaming.

Our ability to re-charter our containerships upon the expiration or termination of their current time charters and to charter our containerships for which we have not yet secured charters, including the five newbuilds, four of which are expected to be delivered in 2016, and the charter rates payable under any renewal options or replacement or new time charters will depend upon, among other things, the prevailing state of the containership charter market, which can be affected by consumer demand for products shipped in containers. If the charter market is depressed when our containerships’ time charters expire or when we are otherwise seeking new charters, we may be forced to charter our containerships at reduced or even unprofitable rates, or we may not be able to charter them at all and/or we may be forced to scrap them, which may reduce or eliminate our earnings or make our earnings volatile.

Our liner company customers have been placed under significant financial pressure, thereby increasing our charter counterparty risk.

The continuing weakness in demand for container shipping services and the oversupply of large containerships (as well as potential oversupply of smaller size vessels due to a cascading effect) places our liner company customers under financial pressure. Any future declines in demand could result in worsening financial challenges to our liner company customers and may increase the likelihood of one or more of our customers being unable or unwilling to pay us contracted charter rates. We expect to generate most of our revenues from these charters and if our charterers fail to meet their obligations to us, we will sustain significant losses which could have a material adverse effect on our financial condition and results of operations.

In 2014, one of our charterers, Zim Integrated Shipping Services (“ZIM”), finalized the terms of a comprehensive financial restructuring plan with its shareholders and its creditors, including vessel and container lenders, ship-owners, shipyards, unsecured lenders and bond holders. Under the related agreement, the Company was granted charter extensions and issued equity securities and unsecured interest bearing notes. If the fair value of the ZIM equity and debt securities fall below their carrying values, we may be required to record an impairment charge in our financial statements, which could adversely affect our results of operations. In addition, there can be no assurance that there will be no further concessions or modification to the charter arrangements with ZIM. See “Item 4. Information on the Company—B. Business Overview—Our Fleet, Acquisitions and Newbuild Vessels”.

An oversupply of containership capacity may prolong or further depress the current low charter rates and adversely affect our ability to charter our containerships at profitable rates or at all.

From 2005 through the first quarter of 2010, the containership order-book was at historically high levels as a percentage of the in-water fleet. Although order-book volumes have decreased as deliveries of previously ordered containerships increased substantially, some renewed ordering in late 2012 of mainly larger vessels maintained the order-book at average levels. According to Clarkson Research, as of December 2015, the containership order-book represented 19% of the existing fleet capacity, 87% of which was for vessels with carrying capacity in excess of 8,000 TEU. An oversupply of large newbuild vessel and/or re-chartered containership capacity entering the market, combined with any further decline in the demand for containerships, may prolong or further depress the

current low charter rates and may decrease our ability to charter our containerships when we are seeking new or replacement charters other than for unprofitable or reduced rates, or we may not be able to charter our containerships at all.

Weak economic conditions throughout the world, particularly the Asia Pacific region, and renewed terrorist activity and the growing refugee crises which could affect European Union economies, could have a material adverse effect on our business, financial condition and results of operations.

The global economy remains relatively weak, when compared to the period prior to the 2008-2009 financial crisis. The current global recovery is proceeding at varying speeds across regions and is still subject to downside economic risks stemming from factors like fiscal fragility in advanced economies, high sovereign debt levels, highly accommodative macroeconomic policies, the significant fall in the price of crude oil and other commodities and persistent difficulties in access to credit and equity financing as well as political risks such as the continuing war in Syria and renewed terrorist attacks around the world.

Concerns regarding new terrorist threats from groups in Europe and the growing refugee crisis may disrupt financial markets, and may lead to weaker consumer demand in the European Union, the United States, and other parts of the world which could have a material adverse effect on our business. The deterioration in the global economy has caused, and may continue to cause, a decrease in worldwide demand for certain goods shipped in containerized form.

In addition, we anticipate that a significant number of port calls made by our containerships will continue to involve the loading or unloading of container cargoes in ports in the Asia Pacific region. In recent years, China has been one of the world’s fastest growing economies in terms of gross domestic product, which has had a significant impact on shipping demand. However, if China’s growth in gross domestic product declines and other countries in the Asia Pacific region experience slower or negative economic growth in the future, this may negatively affect the fragile recovery of the economies of the United States and the European Union, and thus, may negatively impact container shipping demand. For example, the possibility of the introduction of impediments to trade within the European Union member countries in response to increasing terrorist activities, and the possibility of market reforms to float the Chinese renminbi, either of which development could weaken the Euro against the Chinese renminbi, could adversely affect consumer demand in the European Union. Moreover, the revaluation of the renminbi may negatively impact the United States’ demand for imported goods, many of which are shipped from China in containerized form. Such weak economic conditions could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

The continuing financial crisis and possible political unrest in Greece may affect the ability of certain of our managers which have offices in Greece to operate efficiently.

Although to date, the continuing economic crisis in Greece has not affected our managers’ ability to pay employees, has not forced us to default on any obligations and has not had any other material impact on our operations, a default by Greece on its sovereign debt or the exit of Greece from the eurozone may have a material adverse effect on our operations in the future and may limit the ability of our two managers with offices in Greece to operate. These limitations may include:

•

the ability of our managers with offices in Greece to continue to pay wages to their employees and to pay suppliers for goods and services;

•

the ability of our Greek suppliers to fully perform their contracts, including the delivery of supplies to our managers’ offices in Greece and to our vessels in Greek ports;

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the ability of our Greek-based seafarers or shore employees to travel to and from our vessels;

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delays or other disruptions in the operation of our fleet, including of the vessels in our fleet flying the Greek flag; and

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increased taxes and compliance costs due to increased bureaucracy or changes in the government.

As a result of the ongoing economic slump in Greece and the capital controls imposed by the government in June 2015, our operations in Greece may be subjected to new regulations that may require us to incur new or additional compliance or other administrative costs and may require that we pay to the Greek government new taxes or other fees. Furthermore, renewed political uncertainty and social unrest due to the worsening economic conditions and the growing refugee population in the country may undermine Greece’s political and economic stability and may lead it to exit the eurozone, which may adversely affect our operations and those of our managers located in Greece. We also face the risk that enhanced capital controls, strikes, work stoppages, civil unrest and violence within Greece may disrupt our shoreside operations and those of our managers located in Greece.

Disruptions in world financial markets and the resulting governmental action could have a material adverse impact on our results of operations, financial condition and cash flows.

Global financial markets and economic conditions have been severely disrupted and volatile in recent years and remain subject to significant vulnerabilities, such as the deterioration of fiscal balances and the rapid accumulation of public debt, continued deleveraging in the banking sector and a limited supply of credit. Credit markets as well as the debt and equity capital markets were exceedingly distressed during 2008 and 2009 and have been volatile since that time. The continuing refugee crisis in the European Union, the economic crisis in Greece, the continuing war in Syria and advances of ISIS and other terrorist organizations in the Middle East have led to increased volatility in global credit and equity markets. These issues, along with the re-pricing of credit risk and the difficulties currently experienced by financial institutions have made, and will likely continue to make, it difficult to obtain financing. As a result of the disruptions in the credit markets and higher capital requirements, many lenders have increased margins on lending rates, enacted tighter lending standards, required more restrictive terms (including higher collateral ratios for advances, shorter maturities and smaller loan amounts), or have refused to refinance existing debt at all. Furthermore, certain banks that have historically been significant lenders to the shipping industry have reduced or ceased lending activities in the shipping industry. Additional tightening of capital requirements and the resulting policies adopted by lenders, could further reduce lending activities. We may experience difficulties obtaining financing commitments or be unable to fully draw on the capacity under our committed term loans in the future if our lenders are unwilling to extend financing to us or unable to meet their funding obligations due to their own liquidity, capital or solvency issues. We cannot be certain that financing will be available on acceptable terms or at all. If financing is not available when needed, or is available only on unfavorable terms, we may be unable to meet our future obligations as they come due. Our failure to obtain such funds could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders. In the absence of available financing, we also may be unable to take advantage of business opportunities or respond to competitive pressures.

We are dependent on our charterers and other counterparties fulfilling their obligations under agreements with us, and their inability or unwillingness to honor these obligations could significantly reduce our revenues and cash flow.

Payments to us by our charterers under time charters are and will be our sole source of operating cash flow. Many of our charterers finance their activities through cash from operations, the incurrence of debt or the issuance of equity. Since 2008, there has been a significant decline in the credit markets and the availability of credit, and the equity markets have been volatile. The combination of a reduction of cash flow resulting from lower demand for our ships due to declines in world trade, a reduction in borrowing bases under any credit facilities and the lack of availability of debt or equity financing may result in a significant reduction in the ability of our charterers to make charter payments to us. Additionally, we could lose a time charter if the charterer exercises certain specified, limited termination rights.

If we lose a time charter because the charterer is unable to pay us or for any other reason, we may be unable to re-deploy the related vessel on similarly favorable terms or at all. Also, we will not receive any revenues from such a vessel while it is un-chartered, but we will be required to pay expenses necessary to maintain and insure the vessel and service any indebtedness on it. The combination of any surplus of containership capacity and the expected increase in the size of the world containership fleet over the next few years may make it difficult to secure substitute employment for any of our containerships if our counterparties fail to perform their obligations under the currently arranged time charters, and any new charter arrangements we are able to secure may be at lower rates. Furthermore, the surplus of containerships available at lower charter rates and lack of demand for our customers’ liner services could negatively affect our charterers’ willingness to perform their obligations under our time charters, particularly if the charter rates in such time charters are significantly above the prevailing market rates. Accordingly we may have to grant concessions to our charterers in the form of lower charter rates for the remaining duration of the relevant charter or part thereof, or to agree to re-charter vessels coming off charter at reduced rates compared to the charter then ended. While we have agreed in certain cases to charter rate re-arrangements entailing reductions for specified periods, we have been compensated for these adjustments by, among other things, subsequent rate increases, so that the aggregate payments under the charters are not materially reduced, and in some cases we also have arranged for term extensions. However, there is no assurance that any future charter re-arrangements will be on similarly favorable terms.

The loss of any of our charterers, time charters or vessels, or a decline in payments under our time charters, could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

We may, among other things, enter into shipbuilding contracts, provide performance guarantees relating to shipbuilding contracts or to charters, enter into credit facilities or other financing arrangements, accept commitment letters from banks, or enter into insurance contracts and interest or exchange rate swaps. Such agreements expose us to counterparty credit risk. The ability and willingness of each of our counterparties to perform its obligations under a contract with us will depend upon a number of factors that are beyond our control and may include, among other things, general economic conditions, the state of the capital markets, the condition of the ocean-going container shipping industry and charter hire rates. Should a counterparty fail to honor its obligations under agreements with us, we could sustain significant losses, which in turn could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

A limited number of customers operating in a consolidating industry comprise a large part of our revenues. The loss of these customers could adversely affect our results of operations, cash flows and competitive position.

Our customers in the containership sector consist of a limited number of liner companies. A.P. Moller-Maersk A/S (“A.P. Moller-Maersk”), Mediterranean Shipping Company, S.A. (“MSC”), members of the Evergreen Group (“Evergreen”), Hapag Lloyd Aktiengesellschaft (“Hapag Lloyd”) and Cosco Container Lines Co., Ltd. (“COSCO”) together represented 93%, 94% and 95% of our revenue in 2013, 2014 and 2015, respectively. We expect that a limited number of leading liner companies will continue to generate a substantial portion of our revenues. The cessation of business with these liner companies or their failure to fulfill their obligations under the time charters for our containerships could have a material adverse effect on our business, financial condition and results of operations, as well as our cash flows, including cash available for dividends to our stockholders. In addition, any consolidations or alliances involving our customers could further increase the concentration of our business. We could lose a customer or the benefits of our time charter arrangements for many different reasons, including if the customer is unable or unwilling to make charter hire or other payments to us because of a deterioration in its financial condition, disagreements with us or otherwise. If any of these customers terminate its charters, chooses not to re-charter our ships after charters expire or is unable to perform under its charters and we are not

able to find replacement charters on similar terms, we will suffer a loss of revenues that could have a material adverse effect on our business, results of operations and financial condition and our ability to pay dividends to our stockholders. See “Item 4. Information on the Company—B. Business Overview—Our Fleet, Acquisitions and Newbuild Vessels”.

A decrease in the level of China’s export of goods or an increase in trade protectionism could have a material adverse impact on our charterers’ business and, in turn, could cause a material adverse impact on our results of operations, financial condition and cash flows.

China exports considerably more goods than it imports. Our containerships are deployed on routes involving containerized trade in and out of emerging markets, and our charterers’ container shipping and business revenue may be derived from the shipment of goods from the Asia Pacific region, including China, to various overseas export markets including the United States and Europe. Any reduction in or hindrance to the output of China-based exporters could have a material adverse effect on the growth rate of China’s exports and on our charterers’ business. For instance, the government of China has implemented economic policies aimed at increasing domestic consumption of Chinese-made goods. This may have the effect of reducing the supply of goods available for export and may, in turn, result in a decrease of demand for container shipping. Additionally, though in China there is an increasing level of autonomy and a gradual shift in emphasis to a “market economy” and enterprise reform, many of the reforms, particularly some limited price reforms that result in the prices for certain commodities being principally determined by market forces, are unprecedented or experimental and may be subject to revision, change or abolition. The level of imports to and exports from China could be adversely affected by changes to these economic reforms by the Chinese government, as well as by changes in political, economic and social conditions or other relevant policies of the Chinese government.

In addition, China recently enacted a new tax for non-resident international transportation enterprises engaged in the provision of services of passengers or cargo, among other items, in and out of China using their own, chartered or leased vessels, including any stevedore, warehousing and other services connected with the transportation. The new regulation broadens the range of international transportation companies which may find themselves liable for Chinese enterprise income tax on profits generated from international transportation services passing through Chinese ports. This tax or similar regulations by China may reduce our operating results and may also result in an increase in the cost of goods exported from China and the risks associated with exporting goods from China, as well as a decrease in the quantity of goods to be shipped from or through China, which would have an adverse impact on our charterers’ business, operating results and financial condition and could thereby affect their ability to make timely charter hire payments to us and to renew and increase the number of their time charters with us.

Our operations expose us to the risk that increased trade protectionism will adversely affect our business. If global economic recovery is undermined by downside risks and the economic downturn continues, governments may turn to trade barriers to protect their domestic industries against foreign imports, thereby depressing the demand for shipping. Specifically, increasing trade protectionism in the markets that our charterers serve has caused and may continue to cause an increase in (i) the cost of goods exported from China, (ii) the length of time required to deliver goods from China and the costs of such delivery and (iii) the risks associated with exporting goods from China, as well as a decrease in the quantity of goods to be shipped.

Any increased trade barriers or restrictions on trade, especially trade with China, would have an adverse impact on our charterers’ business, operating results and financial condition and could thereby affect their ability to make timely charter hire payments to us and to renew and increase the number of their time charters with us. This could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

We conduct a substantial amount of business in China. The legal system in China has inherent uncertainties that could limit the legal protections available to us and could have a material adverse impact on our business, results of operations, financial condition and cash flows.

The Chinese legal system is based on written statutes and their legal interpretation by the Standing Committee of the National People’s Congress. Prior court decisions may be cited for reference but have limited precedential value. Since 1979, the Chinese government has been developing a comprehensive system of commercial laws, and considerable progress has been made in introducing laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade. However, because these laws and regulations are relatively new, there is a general lack of internal guidelines or authoritative interpretive guidance, and because of the limited number of published cases and their non-binding nature, interpretation and enforcement of these laws and regulations involve uncertainties. We do a substantial amount of business in China, including through one of our managers, Shanghai Costamare Ship Management Co., Ltd. (“Shanghai Costamare”), a Chinese corporation which, as of April 20, 2016, operated 15 vessels that were exclusively manned by Chinese crews (including two vessels purchased pursuant to the Framework Deed with York), which exposes us to potential litigation in China. Additionally, we have charters with COSCO, a Chinese corporation, two of the newbuilding vessels acquired pursuant to the Framework Deed with York are being built at Chinese shipyards, and we have entered into sale and leaseback transactions in respect of 10 vessels (including seven vessels purchased under the Framework Deed) with certain Chinese financial institutions. Although the related charters, shipbuilding agreements and sale and leaseback agreements are governed by English law, we may have difficulties enforcing a judgment rendered by an English court (or other non-Chinese court) in China. Such charters, shipbuilding agreements and sale and leaseback agreements, and any additional agreements that we enter into with Chinese counterparties, may be subject to new regulations in China that may require us to incur new or additional compliance or other administrative costs and pay new taxes or other fees to the Chinese government. Changes in laws and regulations, including with regards to tax matters, and their implementation by local authorities could affect our vessels chartered to Chinese customers as well as our vessels calling to Chinese ports, our vessels being built at Chinese shipyards and the financial institutions with whom we have entered into sale and leaseback transactions, and could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

We may be unable to obtain additional debt financing for future acquisitions of vessels and to fund payments in respect of the newbuild orders.

We intend to borrow against unencumbered containerships in our existing fleet and vessels we may acquire in the future as part of our growth plan. Our ability to borrow against the ships in our existing fleet and any ships we may acquire in the future largely depends on the value of the ships, which in turn depends in part on charter hire rates and the creditworthiness of our charterers. The actual or perceived credit quality of our charterers, and any defaults by them, and any decline in the market value of our fleet may materially affect our ability to obtain the additional capital resources that we will require to purchase additional vessels or may significantly increase our costs of obtaining such capital. Our inability to obtain additional financing or committing to financing on unattractive terms could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

We have not obtained financing for five newbuilds ordered pursuant to the Framework Deed. The ownership structure under the Framework Deed, the lack of time charters for these five newbuilds and the current weak economic conditions which have reduced available financing may make it more difficult or expensive to obtain third party debt financing for these newbuilds.

Our ability to pay dividends or to redeem our Preferred Stock may be limited by the amount of cash we generate from operations following the payment of fees and expenses, by the establishment of any reserves, by restrictions in our debt instruments and by additional factors unrelated to our profitability.

The declaration and payment of dividends (including cumulative dividends payable with respect to our Preferred Stock) is subject to the discretion of our board of directors and the requirements of Marshall Islands law. The timing and amount of any dividends declared will depend on, among other things (a) our earnings, financial condition, cash flow and cash requirements, (b) our liquidity, including our ability to obtain debt and equity financing on acceptable terms as contemplated by our vessel acquisition strategy, (c) restrictive covenants in our existing and future debt instruments and (d) provisions of Marshall Islands law governing the payment of dividends.

The international containership industry is highly volatile, and we cannot predict with certainty the amount of cash, if any, that will be available for distribution as dividends or to redeem our Preferred Stock in any period. Also, there may be a high degree of variability from period to period in the amount of cash, if any, that is available for the payment of dividends or the redemption of our Preferred Stock and our obligation to pay dividends to holders of our Preferred Stock will reduce the amount of cash available for the payment of dividends to holders of our common stock. The amount of cash we generate from and use in our operations and the actual amount of cash we will have available for dividends and redemptions may fluctuate significantly based upon, among other things:

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the charter hire payments we obtain from our charters as well as our ability to charter or re-charter our vessels and the charter rates obtained;

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the due performance by our charterers of their obligations;

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our fleet expansion strategy and associated uses of our cash and our financing requirements;

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delays in the delivery of newbuild vessels and the beginning of payments under charters relating to those vessels;

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the level of our operating costs, such as the costs of crews, vessel maintenance, lubricants and insurance;

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the number of unscheduled off-hire days for our fleet and the timing of, and number of days required for, scheduled dry-docking of our containerships;

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prevailing global and regional economic and political conditions;

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changes in interest rates;

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currency exchange rate fluctuations;

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the effect of governmental regulations and maritime self-regulatory organization standards on the conduct of our business;

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the level of capital expenditures we make, including for maintaining or replacing vessels and complying with regulations;

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our debt service requirements, including fluctuations in interest rates, and restrictions on distributions contained in our debt instruments;

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fluctuations in our working capital needs;

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our ability to make, and the level of, working capital borrowings;

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changes in the basis of taxation of our activities in various jurisdictions;

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modification or revocation of our dividend policy by our board of directors;

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the dividend policy adopted by Costamare Ventures and the vessel-owning entities for the Joint Venture vessels; and

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the amount of any cash reserves established by our board of directors.

The amount of cash we generate from our operations may differ materially from our net income or loss for the period, which will be affected by non-cash items. We may incur other expenses or

liabilities that could reduce or eliminate the cash available for distribution as dividends or redemptions.

In addition, our credit facilities and other financing agreements prohibit the payment of dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends.

For more information regarding our financing arrangements, please read “Item 5. Operating and Financial Review and Prospects”.

In addition, Marshall Islands law generally prohibits the payment of dividends other than from surplus (retained earnings and the excess of consideration received for the sale of shares above the par value of the shares) or if there is no surplus, from the net profits for the current and prior fiscal year, or while a company is insolvent or if it would be rendered insolvent by the payment of such a dividend. We may not have sufficient surplus or net profits in the future to pay dividends, and our subsidiaries may not have sufficient funds, surplus or net profits to make distributions to us. As a result of these and other factors, we may pay dividends during periods when we record losses and may not pay dividends during periods when we record net income. We can give no assurance that dividends will be paid in the future or the amounts of dividends which may be paid.

We may have difficulty properly managing our growth through acquisitions of new or secondhand vessels and we may not realize expected benefits from these acquisitions, which may negatively impact our cash flows, liquidity and our ability to pay dividends to our stockholders.

We intend to grow our business by ordering newbuild vessels and through selective acquisitions of high-quality secondhand vessels to the extent that they are available. Our future growth will primarily depend on:

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the operations of the shipyards that build any newbuild vessels we may order;

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the availability of long-term employment for our vessels;

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locating and identifying suitable high-quality secondhand vessels;

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obtaining newbuild contracts at acceptable prices;

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obtaining required financing on acceptable terms;

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consummating vessel acquisitions;

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enlarging our customer base;

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hiring additional shore-based employees and seafarers;

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continuing to meet technical and safety performance standards; and

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managing joint ventures or significant acquisitions and integrating the new ships into our fleet.

During periods in which charter rates are high, ship values are generally high as well, and it may be difficult to consummate ship acquisitions or enter into shipbuilding contracts at favorable prices. In addition, any vessel acquisition may not be profitable at or after the time of acquisition and may not generate cash flows sufficient to justify the investment. We may not be successful in executing any future growth plans and we cannot give any assurance that we will not incur significant expenses and losses in connection with such growth efforts. Other risks associated with vessel acquisitions that may harm our business, financial condition and operating results include the risks that we may:

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fail to realize anticipated benefits, such as new customer relationships, cost-savings or cash flow enhancements;

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be unable to hire, train or retain qualified shore-based and seafaring personnel to manage and operate our growing business and fleet;

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decrease our liquidity by using a significant portion of available cash or borrowing capacity to finance acquisitions;

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significantly increase our interest expense or financial leverage if we incur additional debt to finance acquisitions;

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incur or assume unanticipated liabilities, losses or costs associated with any vessels or businesses acquired; or

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incur other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges.

Unlike newbuild vessels, secondhand vessels typically do not carry warranties as to their condition. While we generally inspect existing vessels prior to purchase, such an inspection would normally not provide us with as much knowledge of a vessel’s condition as we would possess if it had been built for us and operated by us during its life. Repairs and maintenance costs for secondhand vessels are difficult to predict and may be substantially higher than for vessels we have operated since they were built. These costs could decrease our cash flows, liquidity and our ability to pay dividends to our stockholders.

Our operations and results and our ability to expand our fleet may be adversely affected by the Framework Deed or by a default by our partner under the Framework Deed.

The joint venture governed by the Framework Deed is the exclusive joint venture of the Company for the acquisition of new vessels during a commitment period ending May 18, 2020, unless terminated earlier in certain circumstances (although we may acquire vessels outside the joint venture where York rejects a vessel acquisition opportunity). If York decides to participate in a new vessel acquisition, we will hold a 25% to 75% equity interest in such vessel. See “Item 4. Information on the Company—B. Business Overview—Our Fleet, Acquisitions and Newbuild Vessels”.

The operation of the Framework Deed may increase certain administrative burdens, delay decision-making, make it more difficult to obtain debt financing or complicate the operation of the vessels acquired under the Framework Deed. For example, the Framework Deed requires that decisions regarding the Joint Venture vessel’s acquisition be made jointly by Costamare and York. If York fails to cooperate in the acquisition process, we may not be able to consummate the acquisition in a timely and cost-effective manner. In addition, our managers may face conflicts of interest in the course of managing both our wholly-owned vessels and the Joint Venture vessels, the outcome of which may favor the Joint Venture vessels.

Furthermore, if York was to delay or default in meeting its commitments under the Framework Deed to provide equity or under any guarantee it provides to support a shipbuilding contract, a charter or a financing agreement, or if York fails to provide any supplemental funding that may be required under the Framework Deed or otherwise due to adverse economic conditions, our commercial relations with shipbuilders, charterers and financial institutions could be adversely affected. Under such circumstances, we may be required to provide additional funding, we may have to unwind a Joint Venture investment at an unfavorable price or we may have to terminate the Framework Deed.

Delay in the delivery of our newbuild vessels on order, or any future newbuild vessel orders, could adversely affect our earnings.

The expected delivery dates under our current shipbuilding contracts for newbuild vessels, and any additional shipbuilding contracts we may enter into in the future, may be delayed for reasons not under our control, including, among other things:

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quality or engineering problems;

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changes in governmental regulations or maritime self-regulatory organization standards;

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work stoppages or other labor disturbances at the shipyard;

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bankruptcy of or other financial crisis involving the shipyard;

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a backlog of orders at the shipyard;

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any delay or default by our joint venture partner in meeting its financial commitments;

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political, social or economic disturbances;

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weather interference or a catastrophic event, such as a major earthquake or fire, or other accident;

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requests for changes to the original vessel specifications;

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shortages of or delays in the receipt of necessary construction materials, such as steel;

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an inability to obtain requisite permits or approvals;

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financial instability of the lenders under our committed credit facilities, resulting in potential delay or inability to draw down on such facilities; and

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financial instability of the charterers under our agreed time charters for the newbuild vessels, resulting in potential delay or inability to charter the newbuild vessels;

A delay by the seller in the delivery date of a newbuild vessel will reduce our expected income from that vessel and, if the vessel is already chartered, may lead the charterer of such vessel to claim damages or to cancel the relevant charter. If the seller of any newbuild vessel we have contracted to purchase is not able to deliver the vessel to us as agreed, or if we cancel a purchase agreement because a seller has not met his obligations, it may result in a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

Our managers may be unable to attract and retain qualified, skilled employees or crew on our behalf necessary to operate our business or may pay rising crew and other vessel operating costs.

Acquiring and renewing long-term time charters with leading liner companies depend on a number of factors, including our ability to man our containerships with suitably experienced, high-quality masters, officers and crews. Our success will depend in large part on our managers’ ability to attract, hire, train and retain highly skilled and qualified personnel. In recent years, the limited supply of and the increased demand for well-qualified crew, due to the increase in the size of the global shipping fleet, has created upward pressure on crewing costs, which we bear under our time charters. Changing conditions in the home country of our seafarers, such as increases in the local general living standards or changes in taxation, may make serving at sea less appealing and thus further reduce the supply of crew and/or increase the cost of hiring competent crew. Unless we are able to increase our hire rates to compensate for increases in crew costs and other vessel operating costs such as insurance, repairs and maintenance, and lubricants, our business, results of operations, financial condition and our profitability may be adversely affected. In addition, any inability we experience in the future to attract, hire, train and retain a sufficient number of qualified employees could impair our ability to manage, maintain and grow our business. If we cannot attract and retain sufficient numbers of quality onboard seafaring personnel, our fleet utilization will decrease, which could also have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

Fuel price fluctuations may have an adverse effect on our profits.

The cost of fuel is a significant factor in negotiating charter rates and can affect us in both direct and indirect ways. This cost will be borne by us when our containerships are employed on voyage charters or contracts of affreightment. We currently have no voyage charters or contracts of affreightment, but we may enter into such arrangements in the future, and to the extent we do so, an increase in the price of fuel beyond our expectations may adversely affect our profitability. Even where the cost of fuel is borne by the charterer, which is the case with all of our existing time charters, that cost will affect the level of charter rates that charterers are prepared to pay. Rising costs of fuel will make our older and less fuel efficient vessels less competitive compared to the more fuel efficient newer vessels and may limit their employment opportunities and force us to employ them at a discount compared to the charter rates commanded by more fuel efficient vessels

or not at all. Falling costs of fuel may lead our charterers to abandon slow steaming, thereby releasing additional capacity into the market and exerting downward pressure on charter rates or may lead our charterers to employ older, less fuel efficient vessels which may drive down charter rates and make it more difficult for us to secure employment for our newer vessels.

The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geo-political developments, supply and demand for oil, actions by members of the OPEC and other oil and gas producers, economic or other sanctions levied against oil and gas producing countries, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns and regulations.

Reliance on suppliers may limit our ability to obtain supplies and services when needed.

We rely on a significant number of third party suppliers of consumables, spare parts and equipment to operate, maintain, repair and upgrade our fleet of ships. Delays in delivery or unavailability or poor quality of supplies could result in off-hire days due to consequent delays in the repair and maintenance of our fleet or lead to our time charters being terminated. This would negatively impact our revenues and cash flows. Cost increases could also negatively impact our future operations.

We must make substantial capital expenditures to maintain the operating capacity of our fleet and acquire vessels, which may reduce or eliminate the amount of cash for dividends to our stockholders.

We must make substantial capital expenditures to maintain the operating capacity of our fleet and replace, over the long-term, the operating capacity of our fleet and we generally expect to finance these maintenance capital expenditures with cash balances or credit facilities. In addition, we will need to make substantial capital expenditures to acquire vessels in accordance with our growth strategy. These expenditures could increase as a result of, among other things: the cost of labor and materials; customer requirements; the size of our fleet; the cost of replacement vessels; the length of charters; governmental regulations and maritime self-regulatory organization standards relating to safety, security or the environment; competitive standards; and the age of our ships. Significant capital expenditures, including to maintain and replace, over the long-term, the operating capacity of our fleet, may reduce or eliminate the amount of cash available for distribution to our stockholders.

The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings.

In general, the cost of maintaining a vessel in good operating condition increases with the age of the vessel. As our fleet ages, we will incur increased costs. Older vessels may require longer and more expensive dry-dockings, resulting in more off-hire days and reduced revenue. Older vessels are typically less fuel efficient and more costly to maintain than more recently constructed vessels due to improvements in engine technology. In addition, older vessels are often less desirable to charterers. Governmental regulations and safety or other equipment standards related to the age of a vessel may also require expenditures for alterations or the addition of new equipment to our vessels and may restrict the type of activities in which our containerships may engage.

Unless we set aside reserves or are able to borrow funds for vessel replacement, at the end of the useful lives of our vessels our revenue will decline, which would adversely affect our business, results of operations and financial condition.

Our current fleet of 72 containerships, including 12 newbuild vessels on order, as of April 20, 2016, of which 18 of our containerships, including 12 newbuilds are Joint Venture vessels, had an average age (weighted by TEU capacity) of 8.3 years. See “Item 4. Information on the Company—B. Business Overview—Our Fleet, Acquisitions and Newbuild Vessels”. Unless we maintain reserves or are able to borrow or raise funds for vessel replacement, we will be unable to replace the older vessels in our fleet. Our cash flows and income are dependent on the revenues earned by the chartering of our containerships. The inability to replace the vessels in our fleet upon the expiration of their useful lives could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

Containership values decreased significantly since 2008 and have remained at depressed levels through 2015. Containership values may decrease further and over time may fluctuate substantially. If these values are low at a time when we are attempting to dispose of a vessel, we could incur a loss.

Containership values can fluctuate substantially over time due to a number of different factors, including:

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prevailing economic conditions in the markets in which containerships operate;

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reduced demand for containerships, including as a result of a substantial or extended decline in world trade;

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increases in the supply of containership capacity;

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changes in prevailing charter hire rates;

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the physical condition, size, age and technical specification of the ships;

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the costs of building new vessels; and

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the cost of retrofitting or modifying existing ships to respond to technological advances in vessel design or equipment, changes in applicable environmental or other regulations or standards, customer requirements or otherwise.

If the market values of our vessels further deteriorate, we may be required to record an impairment charge in our financial statements, which could adversely affect our results of operations. In addition, any such deterioration in the market values of our vessels could trigger a breach under our credit facilities, which could adversely affect our operations. If a charter expires or is terminated, we may be unable to re-charter the vessel at an acceptable rate and, rather than continue to incur costs to maintain the vessel, may seek to dispose of it. Our inability to dispose of the containership at a reasonable price could result in a loss on its sale and could materially and adversely affect our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

Our growth depends on our ability to expand relationships with existing charterers, establish relationships with new customers and obtain new time charters, for which we will face substantial competition from new entrants and established companies with significant resources.

One of our principal objectives is to acquire additional containerships in conjunction with entering into additional long-term, fixed-rate charters for these vessels. The process of obtaining new long-term, fixed-rate charters is highly competitive and generally involves an intensive screening process and competitive bids, and often extends for several months. Generally, we compete for charters based upon charter rate, customer relationships, operating expertise, professional reputation and containership specifications, including size, age and condition.

In addition, as vessels age, it can be more difficult to employ them on profitable time charters, particularly during periods of decreased demand in the charter market. Accordingly, we may find it difficult to continue to find profitable employment for our vessels as they age.

We face substantial competition from a number of experienced companies, including state-sponsored entities and financial organizations. Some of these competitors have significantly greater financial resources than we do, and can therefore operate larger fleets and may be able to offer better charter rates. In the future, we may also face competition from reputable, experienced and well-capitalized marine transportation companies, including state-sponsored entities, that do not currently own containerships, but may choose to do so. Any increased competition may cause greater price competition for time charters, as well as for the acquisition of high-quality secondhand vessels and newbuild vessels. Further, since the charter rate is generally considered to be one of the principal factors in a charterer’s decision to charter a vessel, the rates offered by our competitors can place downward pressure on rates throughout the charter market. As a result of these factors, we may be unable to charter our containerships, expand our relationships with existing customers or to obtain new customers on a profitable basis, if at all, which could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

Due to our lack of diversification, adverse developments in the containership transportation business could reduce our ability to service our debt obligations and pay dividends to our stockholders.

We rely exclusively on the cash flow generated from charters for our containerships. Due to our lack of diversification, an adverse development in the container shipping industry would have a significantly greater impact on our financial condition and results of operations than if we maintained more diverse assets or lines of business. An adverse development could also impair our ability to service debt or pay dividends to our stockholders.

We may have more difficulty entering into long-term, fixed-rate time charters if a more active short-term or spot container shipping market develops

One of our principal strategies is to enter into long-term, fixed-rate time charters in both strong and weak charter rate environments, although in weaker charter rate environments we would generally expect to target somewhat shorter charter terms. In a weak economic environment when more containerships become available for the spot or short-term charter market and the demand for long-term charters falls, we expect to have difficulty entering into additional multi-year, fixed-rate time charters for our containerships due to the increased supply of containerships and the possibility of lower rates in the spot market. We then have to charter more of our containerships for shorter periods upon expiration or early termination of the current charters or for any ships for which we have not secured charters. As a result, our revenues, cash flows and profitability would then reflect fluctuations in the short-term charter market and become more volatile. It may also become more difficult or expensive to finance or re-finance vessels that do not have long-term employment at fixed rates. In addition, an active short-term or spot charter market may require us to enter into charters based on changing market prices, as opposed to contracts based on fixed rates, which could result in a decrease in our revenues and cash flows, including our ability to pay dividends to our stockholders, if we enter into charters during periods when the market price for container shipping is depressed.

We may be unable to charter our vessels at profitable rates, if at all, when we are seeking new or replacement charters.

As of April 20, 2016, the current time charters for 18 of our 60 containerships in the water, including the charters for our four Joint Venture vessels in the water, will expire before the end of 2016 while four of our vessels are not employed. We have options to extend the charters for two of the vessels whose charters are scheduled to expire in 2016 for successive one year periods. In addition, we have not yet secured employment for five newbuilds ordered pursuant to the

Framework Deed, four of which are scheduled to be delivered during 2016. While we generally expect to be able to obtain time charters for our vessels within a reasonable period prior to their time charter expiry or delivery, as applicable, we cannot be assured that this will occur in any particular case, or at all. The current weak economic conditions have reduced the demand for long-term time charters. In addition, even if a short-term time charter is secured it may be at unprofitable rates and may not be continuous, leaving the vessels idle for some days in between charters.

If we are unable to re-charter these containerships or obtain new time charters at favorable rates, it could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

We are a holding company and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations and to make dividend payments.

We are a holding company and our subsidiaries conduct all of our operations and own all of our operating assets, including our ships. We have no significant assets other than the equity interests in our subsidiaries. As a result, our ability to pay our obligations and to make dividend payments depends entirely on our subsidiaries and their ability to distribute funds to us. The ability of a subsidiary to make these distributions could be affected by a claim or other action by a third party, including a creditor, or by the law of their respective jurisdiction of incorporation which regulates the payment of dividends. If we are unable to obtain funds from our subsidiaries, our board of directors may exercise its discretion not to declare or pay dividends.

Our credit facilities or other financing arrangements contain payment obligations and restrictive covenants that may limit our liquidity and our ability to expand our fleet. A failure by us to meet our obligations under our credit facilities could result in an event of default under such credit facilities and foreclosure on our vessels.

Our credit facilities impose certain operating and financial restrictions on us. These restrictions in our existing credit facilities generally limit Costamare Inc., and our subsidiaries’ ability to, among other things:

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pay dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends;

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purchase or otherwise acquire for value any shares of our subsidiaries’ capital;

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make or repay loans or advances, other than repayment of the credit facilities;

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make investments in or provide guarantees to other persons;

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sell or transfer significant assets, including any vessel or vessels mortgaged under the credit facilities, to any person, including Costamare Inc. and our subsidiaries;

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create liens on assets; or

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allow the Konstantakopoulos family’s direct or indirect holding in Costamare Inc. to fall below 40% of the total issued share capital.

Our existing credit facilities also require Costamare Inc. and certain of our subsidiaries to maintain the aggregate of (a) the market value, primarily on a charter inclusive basis, of the mortgaged vessel or vessels and (b) the market value of any additional security provided to the lenders, above a percentage ranging between 80% to 125% of the then outstanding amount of the credit facility and any related swap exposure.

Costamare Inc. is required to maintain compliance with the following financial covenants:

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the ratio of our total liabilities (after deducting all cash and cash equivalents) to market value adjusted total assets (after deducting all cash and cash equivalents) may not exceed 0.75:1;

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the ratio of EBITDA over net interest expense must be equal to or higher than 2.5:1;

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the aggregate amount of all cash and cash equivalents may not be less than the greater of (i) $30 million or (ii) 3% of the total debt; provided , however , that under three of our credit facilities, a minimum cash amount equal to 3% of the loan outstanding must be maintained in accounts with the lender;

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the market value adjusted net worth must at all times exceed $500 million; and

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the ratio of net funded debt to total net assets may not exceed 80% on a charter inclusive valuation basis.

A failure to meet our payment and other obligations could lead to defaults under our credit facilities. Our lenders could then accelerate our indebtedness and foreclose on the vessels in our fleet securing those credit facilities, which could result in the acceleration of other indebtedness that we may have at such time and the commencement of similar foreclosure proceedings by other lenders. If any of these events occur, we cannot guarantee that our assets will be sufficient to repay in full all of our outstanding indebtedness and we may be unable to find alternative financing. Even if we could obtain alternative financing, such financing may not be on terms that are favorable or acceptable. The loss of these vessels would have a material adverse effect on our operating results and financial condition. For additional information see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities and Finance Leases”.

Substantial debt levels may limit our ability to obtain additional financing and pursue other business opportunities.

As of December 31, 2015, we had outstanding indebtedness of approximately $1.56 billion, including the obligations under our finance leases, and we expect to incur additional indebtedness as we grow our fleet. This level of debt could have important consequences to us, including the following:

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our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms;

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we may need to use a substantial portion of our cash from operations to make principal and interest payments on our debt, thereby reducing the funds that would otherwise be available for operations, future business opportunities and dividends to our stockholders;

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our debt level could make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our business or the economy generally; and

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our debt level may limit our flexibility in responding to changing business and economic conditions.

Our ability to service our debt depends upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control. We may not be able to refinance all or part of our maturing debt on favorable terms, or at all. If our operating income is not sufficient to service our current or future indebtedness, we will be forced to take actions such as reducing or discontinuing dividend payments, reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing our debt, or seeking additional equity capital or bankruptcy protection. We may not be able to effect any of these remedies on satisfactory terms, or at all.

In the future we may change our operational and financial model by replacing amortizing debt in favor of non-amortizing debt with a higher fixed or floating rate without shareholder approval, which may increase our risk of defaulting on our indebtedness if market conditions become unfavorable.

The derivative contracts we have entered into to hedge our exposure to fluctuations in interest rates could result in higher than market interest rates and reductions in our stockholders’ equity, as well as charges against our income.

We have entered into interest rate swaps generally for purposes of managing our exposure to fluctuations in interest rates applicable to indebtedness under our credit facilities which were advanced at floating rates based on LIBOR. As of December 31, 2015, the aggregate notional amount of interest rate swaps relating to our fleet as of such date was $1.11 billion. As of December 31, 2015, our outstanding lease obligations of $233.6 million were under fixed interest rates. We unwound three interest rate swaps in 2014 in connection with the refinancing of the underlying credit facility through the sale and leaseback transaction entered into with affiliates of CDB Leasing Company Ltd. (“CLC”). See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities and Finance Leases—CLC Sale and Leaseback”. From time to time we also enter into certain currency hedges. However, there is no assurance that our derivative contracts or any that we enter into in the future will provide adequate protection against adverse changes in interest rates or currency exchange rates or that our bank counterparties will be able to perform their obligations. In addition, as a result of the implementation of new regulation of the swaps markets in the United States, the European Union and elsewhere over the next few years, the cost of interest rate and currency hedges may increase or suitable hedges may not be available.

While we monitor the credit risks associated with our bank counterparties, there can be no assurance that these counterparties would be able to meet their commitments under our derivative contracts or any future derivate contract. Our bank counterparties include financial institutions that are based in European Union countries that have faced and continue to face severe financial stress due to the ongoing sovereign debt crisis. The potential for our bank counterparties to default on their obligations under our derivative contracts may be highest when we are most exposed to the fluctuations in interest and currency rates such contracts are designed to hedge, and several or all of our bank counterparties may simultaneously be unable to perform their obligations due to the same events or occurrences in global financial markets.

To the extent our existing interest rate swaps do not, and future derivative contracts may not, qualify for treatment as hedges for accounting purposes we would recognize fluctuations in the fair value of such contracts in our income statement. In addition, changes in the fair value of our derivative contracts are recognized in “Accumulated Other Comprehensive Loss” on our balance sheet, and can affect compliance with the net worth covenant requirements in our credit facilities. Changes in the fair value of our derivative contracts that do not qualify for treatment as hedges for accounting and financial reporting purposes affect, among other things, our net income, earnings per share and EBITDA coverage ratio. For additional information see “Item 5. Operating and Financial Review and Prospects”.

Because we generate all of our revenues in United States dollars but incur a significant portion of our expenses in other currencies, exchange rate fluctuations could hurt our results of operations.

Fluctuations in currency exchange rates may have a material impact on our financial performance. We generate all of our revenues in United States dollars and for the year ended December 31, 2015, we incurred a substantial portion of our vessels’ operating expenses in currencies other than United States dollars. This difference could lead to fluctuations in net income due to changes in the value of the United States dollar relative to other currencies, in particular the Euro. Expenses incurred in foreign currencies against which the United States dollar falls in value could increase, thereby decreasing our net income. While we hedge some of this exposure from time to time, our U.S. dollar denominated results of operations and financial condition and ability to pay dividends could suffer from adverse currency exchange rate movements.

Increased competition in technology and innovation could reduce our charter hire income and the value of our vessels.

The charter rates and the value and operational life of a vessel are determined by a number of factors, including the vessel’s efficiency, operational flexibility and physical life. Efficiency includes

speed and fuel economy. Flexibility includes the ability to enter harbors, utilize related docking facilities and pass through canals and straits. Physical life is related to the original design and construction, maintenance and the impact of the stress of operations. If new ship designs currently promoted by shipyards as being more fuel efficient perform as promoted, or if new containerships are built in the future that are more efficient or flexible or have longer physical lives than our vessels, competition from these more technologically advanced containerships could adversely affect our ability to re-charter, the amount of charter hire payments that we receive for our containerships once their current time charters expire and the resale value of our containerships. This could adversely affect our revenues and cash flows, and our ability to service our debt or pay dividends to our stockholders.

We are subject to regulation and liability under environmental and operational safety laws that could require significant expenditures and affect our cash flows and net income.

Our business and the operation of our vessels are materially affected by environmental regulation in the form of international, national, state and local laws, regulations, conventions, treaties and standards in force in international waters and the jurisdictions in which our containerships operate, as well as in the country or countries of their registration, including those governing the management and disposal of hazardous substances and wastes, the cleanup of oil spills and other contamination, air emissions, water discharges and ballast water management. We may incur substantial costs in complying with these requirements, including costs for ship modifications and changes in operating procedures. Because such conventions, laws and regulations are often revised, it is difficult to predict the ultimate cost of compliance with such requirements or their impact on the resale value or useful lives of our containerships.

Environmental requirements can also affect the resale value or useful lives of our vessels, require a reduction in cargo capacity, vessel modifications or operational changes or restrictions, lead to decreased availability of, or more costly insurance coverage for, environmental matters or result in the denial of access to certain jurisdictional waters or ports. Under local, national and foreign laws, as well as international treaties and conventions, we could incur material liabilities, including cleanup obligations and claims for natural resource damages, personal injury and/or property damages in the event that there is a release of petroleum or other hazardous materials from our vessels or otherwise in connection with our operations. Violations of, or liabilities under, environmental requirements can also result in substantial penalties, fines and other sanctions, including criminal sanctions, and, in certain instances, seizure or detention of our containerships. Events of this nature or additional environmental conventions, laws and regulations could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

The operation of vessels is based on the requirements set forth in the International Safety Management Code (the “ISM Code”). The ISM Code requires vessel managers to develop and maintain an extensive “Safety Management System” (“SMS”) that includes the adoption of a safety and environmental protection policy, sets forth instructions and procedures for safe vessel operation and describes procedures for dealing with emergencies. The ISM Code requires that vessel operators obtain a Safety Management Certificate (“SMC”) for each vessel they operate from the government of the vessel’s flag state. The certificate verifies that the vessel operates in compliance with its approved SMS. No vessel can obtain a certificate unless the flag state has issued a document of compliance with the ISM Code to the vessel’s manager. Failure to comply with the ISM Code may lead to withdrawal of the permit to operate or manage the vessels, subject us to increased liability, decrease or suspend available insurance coverage for the affected vessels, or result in a denial of access to, or detention in, certain ports. Each of the containerships in our fleet and each of our affiliated managers and third party managers are ISM Code-certified. However, there can be no assurance that such certifications can be maintained indefinitely.

Governmental regulation of the shipping industry, particularly in the areas of safety and environmental requirements, can be expected to become stricter in the future. In addition, we believe that the heightened environmental, quality and security concerns of insurance underwriters,

regulators and charterers will lead to additional requirements, including enhanced risk assessment and security requirements and greater inspection and safety requirements for vessels. In complying with new environmental laws and regulations and other requirements that may be adopted, we may have to incur significant capital and operational expenditures to keep our containerships in compliance, or even to scrap or sell certain containerships altogether. For additional information see “Item 4. Information on the Company—B. Business Overview—Risk of Loss and Liability Insurance—Environmental and Other Regulations”.

The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.

We expect that our vessels will call in ports in South America and other areas where smugglers attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To the extent our vessels are found with contraband, whether inside or attached to the hull of our vessel and whether with or without the knowledge of any of our crew, we may face governmental or other regulatory claims or penalties which could have an adverse effect on our business, results of operations, cash flows, financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and cause disruption of our containership business.

International container shipping is subject to security and customs inspection and related procedures in countries of origin, destination, and certain trans-shipment points. These inspection procedures can result in cargo seizure, delays in the loading, offloading, trans-shipment, or delivery of containers, and the levying of customs duties, fines and other penalties against us.

Since the events of September 11, 2001, United States authorities have substantially increased container inspections. Government investment in non-intrusive container scanning technology has grown and there is interest in electronic monitoring technology, including so-called “e-seals” and “smart” containers, that would enable remote, centralized monitoring of containers during shipment to identify tampering with or opening of the containers, along with potentially measuring other characteristics such as temperature, air pressure, motion, chemicals, biological agents and radiation. Also, as a response to the events of September 11, 2001, additional vessel security requirements have been imposed, including the installation of security alert and automatic identification systems on board vessels. Following the recent terrorist attacks in Paris and elsewhere there has been a heightened level of security and new security procedures could be introduced.

It is unclear what additional changes, if any, to the existing inspection and security procedures may ultimately be proposed or implemented in the future, or how any such changes will affect the industry. It is possible that such changes could impose additional financial and legal obligations on us. Furthermore, changes to inspection and security procedures could also impose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of goods in containers uneconomical or impractical. Any such changes or developments could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

The operation of our vessels is also affected by the requirements set forth in the International Ship and Port Facilities Security Code (the “ISPS Code”). The ISPS Code requires vessels to develop and maintain a ship security plan that provides security measures to address potential threats to the security of ships or port facilities. Although each of our containerships is ISPS Code-certified, any failure to comply with the ISPS Code or maintain such certifications may subject us to increased liability and may result in denial of access to, or detention in, certain ports. Furthermore, compliance with the ISPS Code requires us to incur certain costs. Although such costs have not been material to date, if new or more stringent regulations relating to the ISPS Code are adopted by the International Maritime Organization (“IMO”) and the flag states, these requirements could require significant additional capital expenditures or otherwise increase the costs of our operations.

We rely on our information systems to conduct our business, and failure to protect these systems against security breaches could adversely affect our business and results of operations. Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed.

The efficient operation of our business is dependent on computer hardware and software systems. Information systems are vulnerable to security breaches by computer hackers and cyber terrorists. We rely on industry accepted security measures and technology to securely maintain confidential and proprietary information maintained on our information systems. However, these measures and technology may not adequately prevent security breaches. In addition, the unavailability of the information systems or the failure of these systems to perform as anticipated for any reason could disrupt our business and could result in decreased performance and increased operating costs, causing our business and results of operations to suffer. Any significant interruption or failure of our information systems or any significant breach of security could adversely affect our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

Governments could requisition our vessels during a period of war or emergency, resulting in loss of earnings.

A government of the jurisdiction where one or more of our containerships are registered could requisition for title or seize our containerships. Requisition for title occurs when a government takes control of a vessel and becomes its owner. Also, a government could requisition our containerships for hire. Requisition for hire occurs when a government takes control of a ship and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency, although governments may elect to requisition vessels in other circumstances. Although we would expect to be entitled to compensation in the event of a requisition of one or more of our vessels, the amount and timing of payment, if any, would be uncertain. Government requisition of one or more of our containerships may cause us to breach covenants in certain of our credit facilities, and could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

The global financial markets continue to experience economic instability resulting from terrorist attacks, regional armed conflicts and general political unrest.

Terrorist attacks in certain parts of the world, such as the attacks on the United States on September 11, 2001 or more recently in Paris, and the continuing response of the United States and other countries to these attacks, as well as the threat of future terrorist attacks, continue to cause uncertainty and volatility in the world financial markets and may affect our business, results of operations and financial condition. In addition, current conflicts in Syria and Iraq and general political unrest in Ukraine may lead to additional regional conflicts and acts of terrorism around the world, which may contribute to further economic instability in the global financial markets. Political tension or conflicts in the Asia Pacific Region such as in the South China Sea and North Korea may also destabilize markets and reduce the demand for our services. These uncertainties, as well as future hostilities or other political instability in regions where our vessels trade, could also affect trade volumes and patterns and adversely affect our operations, our ability to obtain financing and otherwise have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

Acts of piracy on ocean-going vessels have recently increased in frequency, which could adversely affect our business.

Acts of piracy have historically affected ocean-going vessels trading in certain regions of the world, such as the South China Sea and the Gulf of Aden off the coast of Somalia. Piracy continues to occur in the Gulf of Aden off the coast of Somalia and increasingly in the Gulf of Guinea. Although both the frequency and success of attacks have diminished recently, we still consider

potential acts of piracy to be a material risk to the international container shipping industry, and protection against this risk requires vigilance. Our vessels regularly travel through regions where pirates are active. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on our results of operations, financial condition and ability to pay dividends. Crew costs could also increase in such circumstances. We may not be adequately insured to cover losses from acts of terrorism, piracy, regional conflicts and other armed actions.

Risks inherent in the operation of ocean-going vessels could affect our business and reputation, which could adversely affect our expenses, net income, cash flow and stock price.

The operation of ocean-going vessels carries inherent risks. These risks include the possibility of:

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marine disaster;

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piracy;

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environmental accidents;

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grounding, fire, explosions and collisions;

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cargo and property loss or damage;

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business interruptions caused by mechanical failure, human error, war, terrorism, disease and quarantine, political action in various countries, or adverse weather conditions; and

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work stoppages or other labor problems with crew members serving on our containerships, some of whom are unionized and covered by collective bargaining agreements.

Such occurrences could result in death or injury to persons, loss of property or environmental damage, delays in the delivery of cargo, loss of revenues from or termination of charter contracts, governmental fines, penalties or restrictions on conducting business, litigation with our employees, customers or third parties, higher insurance rates, and damage to our reputation and customer relationships generally. Although we maintain hull and machinery and war risks insurance, as well as protection and indemnity insurance, which may cover certain risks of loss resulting from such occurrences, our insurance coverage may be subject to caps or not cover such losses, and any of these circumstances or events could increase our costs or lower our revenues. The involvement of our vessels in an environmental disaster may harm our reputation as a safe and reliable vessel owner and operator. Any of these results could have a material adverse effect on business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

On October 5, 2011, our vessel Rena ran aground on the Astrolabe Reef off New Zealand and sustained significant damage. The vessel was determined to be a constructive total loss for insurance purposes. While we anticipate that our insurance policies will cover most costs and losses associated with the incident, such insurance may not be sufficient to cover all risks. As a result, claims against us or our subsidiaries as a result of the grounding of the Rena could have a material adverse effect on our business.

Our insurance may be insufficient to cover losses that may occur to our property or result from our operations.

The operation of any vessel includes risks such as mechanical failure, collision, fire, contact with floating objects, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherent possibility of a marine disaster, including oil spills and other environmental mishaps. There are also liabilities arising from owning and operating vessels in international trade. We procure insurance for our fleet of containerships in relation to risks commonly insured against by vessel owners and operators. Our current insurance includes (i) hull and machinery insurance covering damage to our and third-party vessels’ hulls and machinery from, among other things, collisions and contact with fixed and floating objects, (ii) war risks insurance covering losses associated with the outbreak or escalation of hostilities and (iii) protection and indemnity insurance (which includes environmental damage) covering, among other things, third-party and crew liabilities such as

expenses resulting from the injury or death of crew members, passengers and other third parties, the loss or damage to cargo, third-party claims arising from collisions with other vessels, damage to other third-party property and pollution arising from oil or other substances.

We can give no assurance that we are adequately insured against all risks or that our insurers will pay a particular claim. Even if our insurance coverage is adequate to cover our losses, we may not be able to obtain a timely replacement containership in the event of a loss of a containership. Under the terms of our credit facilities, we are subject to restrictions on the use of any proceeds we may receive from claims under our insurance policies. Furthermore, in the future, we may not be able to obtain adequate insurance coverage at reasonable rates for our fleet. For example, more stringent environmental regulations have led to increased costs for, and in the future may result in the lack of availability of, insurance against risks of environmental damage or pollution. We may also be subject to calls, or premiums, in amounts based not only on our own claim records but also the claim records of all other members of the protection and indemnity associations through which we receive indemnity insurance coverage. There is no cap on our liability exposure for such calls or premiums payable to our protection and indemnity association. Our insurance policies also contain deductibles, limitations and exclusions which, although we believe are standard in the shipping industry, may nevertheless increase our costs. A catastrophic oil spill or marine disaster could exceed our insurance coverage, which could have a material adverse effect on our business, results of operations and financial condition and our ability to pay dividends to our stockholders. Any uninsured or underinsured loss could harm our business and financial condition. In addition, the insurance may be voidable by the insurers as a result of certain actions, such as vessels failing to maintain required certification.

We do not carry loss of hire insurance. Loss of hire insurance covers the loss of revenue during extended vessel off-hire periods, such as those that occur during an unscheduled dry-docking due to damage to the vessel from accidents. Accordingly, any loss of a vessel or any extended period of vessel off-hire, due to an accident or otherwise, could have a material adverse effect on our business, results of operations and financial condition and our ability to pay dividends to our stockholders.

Our charterers may engage in legally permitted trading in locations which may still be subject to sanctions or boycott, such as Iran, Syria and Sudan. Our insurers may be contractually or by operation of law prohibited from honoring our insurance contract for such trading, which could result in reduced insurance coverage for losses incurred by the related vessels. Furthermore, our insurers and we may be prohibited from posting or otherwise be unable to post security in respect of any incident in such locations, resulting in the loss of use of the relevant vessel and negative publicity for our Company which could negatively impact our business, results of operations, cash flows and share price.

Maritime claimants could arrest our vessels, which could interrupt our cash flows.

Crew members, suppliers of goods and services to a vessel, shippers or receivers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages, including, in some jurisdictions, for debts incurred by previous owners. In many jurisdictions, a maritime lien-holder may enforce its lien by arresting a vessel. The arrest or attachment of one or more of our vessels, if such arrest or attachment is not timely discharged, could cause us to default on a charter or breach covenants in certain of our credit facilities, could interrupt our cash flows and could require us to pay large sums of money to have the arrest or attachment lifted. Any of these occurrences could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

In addition, in some jurisdictions, such as South Africa, under the “sister ship” theory of liability, a claimant may arrest both the vessel that is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner. Claimants could try to assert “sister ship” liability against one containership in our fleet for claims relating to another of our containerships.

Compliance with safety and other requirements imposed by classification societies may be very costly and may adversely affect our business.

The hull and machinery of every commercial vessel must be classed by a classification society. The classification society certifies that the vessel has been built and maintained in accordance with the applicable rules and regulations of the classification society. Moreover, every vessel must comply with all applicable international conventions and the regulations of the vessel’s flag state as verified by a classification society. Finally, each vessel must successfully undergo periodic surveys, including annual, intermediate and special surveys.

If any vessel does not maintain its class, it will lose its insurance coverage and be unable to trade, and the vessel’s owner will be in breach of relevant covenants under its financing arrangements. Failure to maintain the class of one or more of our containerships could have a material adverse effect on our financial condition and results of operations, as well as our cash flows, including cash available to pay dividends to stockholders.

Our business depends upon certain members of our senior management who may not necessarily continue to work for us.

Our future success depends to a significant extent upon our chairman and chief executive officer, Konstantinos Konstantakopoulos, certain members of our senior management and our managers. Mr. Konstantakopoulos has substantial experience in the container shipping industry and has worked with us and our managers for many years. He, our managers and certain of our senior management team are crucial to the execution of our business strategies and to the growth and development of our business. If these individuals were no longer to be affiliated with us or our managers, or if we were to otherwise cease to receive services from them, we may be unable to recruit other employees with equivalent talent and experience, which could have a material adverse effect on our financial condition and results of operations.

Our arrangements with our chief executive officer restrict his ability to compete with us, and such restrictive covenants generally may be unenforceable.

Konstantinos Konstantakopoulos, our chairman and chief executive officer, entered into a restrictive covenant agreement with us on November 3, 2010, under which, except for in certain limited circumstances, he is precluded during the term of his service and for six months thereafter from owning containerships and from acquiring or investing in a business that owns such vessels without first offering the same to us. It also requires him to offer certain charters to our vessels where the charter is suitable for both our vessel and a vessel he owns outside of Costamare. In addition, the restrictive covenant agreement is governed by English law, and English law generally does not favor the enforcement of such restrictions which are considered contrary to public policy and facially are void for being in restraint of trade. Our ability to enforce these restrictions, should it ever become necessary, will depend upon us establishing that there is a legitimate proprietary interest that is appropriate to protect, and that the protection sought is no more than is reasonable, having regard to the interests of the parties and the public interest. We cannot give any assurance that a court would enforce the restrictions as written by way of an injunction or that we could necessarily establish a case for damages as a result of a violation of the restrictive covenants agreement.

We depend on our managers to operate and expand our business and compete in our markets.

Pursuant to the Framework Agreement between Costamare Shipping Company S.A. (“Costamare Shipping”) and us dated November 2, 2015 (the “Framework Agreement”), the Services Agreement between Costamare Shipping Services Ltd. (“Costamare Services”) and our vessel-owning subsidiaries dated November 2, 2015 (the “Services Agreement”) and the individual ship-management agreements pertaining to each vessel, our managers provide us with, among other things, certain commercial, technical and administrative services. See “Item 4. Information on the Company—B. Business Overview—Management of Our Fleet” and “Item 7. Major Shareholders and

Related Party Transactions—B. Related Party Transactions—Management and Services Agreements”. Our operational success and ability to execute our growth strategy depends significantly upon our managers’ satisfactory performance of these services. Our business will be harmed if such entities fail to perform these services satisfactorily or if they stop providing these services. Costamare Shipping, one of our managers, also owns the Costamare trademarks, which consist of the name “COSTAMARE” and the Costamare logo, and has agreed to license each trademark to us on a royalty free basis for the life of the Framework Agreement. If the Framework Agreement or the Services Agreement were to be terminated or if their terms were to be altered, our business could be adversely affected, as we may not be able to immediately replace such services, and even if replacement services were immediately available, the terms offered could be less favorable than the ones offered by our managers.

Our ability to compete for and enter into new time charters and to expand our relationships with our existing charterers depends largely on our relationship with our managers and their reputation and relationships in the shipping industry. If our managers suffer material damage to their reputation or relationships, it may harm the ability of us or our subsidiaries to:

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renew existing charters upon their expiration;

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obtain new charters;

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successfully interact with shipyards;

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obtain financing and other contractual arrangements with third parties on commercially acceptable terms (therefore potentially increasing operating expenditure for the fleet);

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maintain satisfactory relationships with our charterers and suppliers;

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operate our fleet efficiently; or

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successfully execute our business strategies.

If our ability to do any of the things described above is impaired, it could have a material adverse effect on our financial condition and results of operations, as well as our cash flows.

We may not realize expected benefits from the Co-operation Agreement with V.Ships Greece, which may negatively impact our business.

On January 7, 2013, Costamare Shipping entered into a Co-operation Agreement (the “Co-operation Agreement”) with V.Ships Greece Ltd. (“V.Ships Greece”), a member of V.Group, pursuant to which the two companies established a ship-management cell (the “Cell”) under V.Ships Greece to serve as sub-manager of certain of our vessels. See “Item 4. Information on the Company—B. Business Overview—Management of Our Fleet”. Costamare Shipping passes to us the net profit, if any, it receives from V.Ships Greece pursuant to the Co-operation Agreement as a refund or reduction of the management fees payable by us to Costamare Shipping. We may not realize the anticipated benefits of the arrangement with V.Ships Greece, which include the Cell’s effective management of certain of our vessels, the generation of net profit by the Cell, a portion of which is passed on to us, and the reduction of our ship-management expenditures. Also, Costamare Shipping or V.Ships Greece may terminate the Co-operation Agreement upon six months’ notice.

Our managers are privately held companies and there is little or no publicly available information about them.

The ability of our managers to continue providing services for our benefit will depend in part on their own financial strength. Circumstances beyond our control could impair our managers’ financial strength, and because they are privately held companies, information about their financial strength is not publicly available. As a result, an investor in our stock might have little advance warning of problems affecting any of our managers, even though these problems could have a material adverse effect on us. As part of our reporting obligations as a public company, we will disclose information regarding our managers that has a material impact on us to the extent that we become aware of such information.

Our chairman and chief executive officer has affiliations with our managers and others that could create conflicts of interest between us and our managers or other entities in which he has an interest.

Costamare Shipping and Costamare Services, which provide services to us and/or to our vessel-owning subsidiaries under the Framework Agreement and the Services Agreement, are controlled by our chairman and chief executive officer, Konstantinos Konstantakopoulos or his family. While we believe that the terms of the Framework Agreement and the Services Agreement are consistent with normal commercial practice of the industry, the agreements were not negotiated at arms’ length by non-related third parties. Accordingly, the terms may be less favorable to the Company than if such terms were obtained from a non-related third party. Additionally, Konstantinos Konstantakopoulos directly or indirectly controls our affiliated managers and is our chairman and chief executive officer and the owner of approximately 22.27% of our common stock, and this relationship could create conflicts of interest between us, on the one hand, and our affiliated managers, on the other hand. These conflicts, which are addressed in the Framework Agreement, the Services Agreement and the restrictive covenant agreement between us and our chairman and chief executive officer, may arise in connection with the chartering, purchase, sale and operation of the vessels in our fleet versus vessels owned or chartered-in by other companies affiliated with our managers or our chairman and chief executive officer. These conflicts of interest may have an adverse effect on our results of operations. See “Item 4. Information on the Company—B. Business Overview—Management of Our Fleet” and “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Restrictive Covenant Agreements”.

Additionally, Konstantinos Konstantakopoulos holds a passive interest in certain companies controlled by the family of Dimitrios Lemonidis that own seven containerships comparable to 16 of our vessels (including 5 vessels acquired under the Framework Agreement) and may acquire additional vessels. These vessels may compete with the Company’s vessels for chartering opportunities. These investments were entered into following the review and approval of our Audit Committee and Board of Directors.

Certain of our managers are permitted to, and are actively seeking to, provide management services to vessels owned by third parties that compete with us, which could result in conflicts of interest or otherwise adversely affect our business.

Shanghai Costamare is not prohibited from providing management services to vessels owned by third parties, including related parties, that may compete with us for charter opportunities. The Cell under V.Ships Greece provides and actively seeks to provide management services to vessels owned by third parties that may compete with us. Costamare Shipping provides management services in respect of the Joint Venture vessels that are similar to and compete with our vessels. Our managers’ provision of management services to third parties, including related parties, that may compete with our vessels could give rise to conflicts of interest or adversely affect the ability of these managers to provide the level of service that we require. Conflicts of interest with respect to certain services, including sale and purchase and chartering activities, among others, may have an adverse effect on our results of operations. Shanghai Costamare has only provided management services to third parties in a limited number of cases in the past and currently does not provide any such services to third parties.

Our vessels may call at ports located in countries that are subject to restrictions imposed by the United States government, the European Union, the United Nations and other governments, which could negatively affect the trading price of our shares of common stock.

The United States, the European Union, the United Nations and other governments and their agencies impose sanctions and embargoes on certain countries and maintain lists of countries, individuals or entities they consider to be state sponsors of terrorism, involved in prohibited development of certain weapons or engaged in human rights violations. From time to time on charterers’ instructions, our vessels have called and may again call at ports located in countries subject to sanctions and embargoes imposed by the United States, the European Union, the United

Nations and other governments and their agencies, including ports in Iran, Syria, Sudan and Yemen. The sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time.

For example, in 2010, the United States enacted the Comprehensive Iran Sanctions Accountability and Divestment Act (“CISADA”), which expanded the scope of the former Iran Sanctions Act. Among other things, CISADA expands the application of the prohibitions to non-U.S. companies, such as the Company, and introduces limits on the ability of companies and persons to do business or trade with Iran when such activities relate to the investment, supply or export of refined petroleum or petroleum products. In 2012, President Obama signed Executive Order 13608 which prohibits foreign persons from violating or attempting to violate, or causing a violation of any sanctions in effect against Iran or facilitating any deceptive transactions for or on behalf of any person subject to U.S. sanctions. The Secretary of the Treasury may prohibit any transactions or dealings, including any U.S. capital markets financing, involving any person found to be in violation of Executive Order 13608. Also in 2012, the U.S. enacted the Iran Threat Reduction and Syria Human Rights Act of 2012 (the “ITRA”), which created new sanctions and strengthened existing sanctions. Among other things, the ITRA intensifies existing sanctions regarding the provision of goods, services, infrastructure or technology to Iran’s petroleum or petrochemical sector. The ITRA also includes a provision requiring the President of the United States to impose five or more sanctions from Section 6(a) of the Iran Sanctions Act, as amended, on a person the President determines is a controlling beneficial owner of, or otherwise owns, operates, or controls or insures a vessel that was used to transport crude oil from Iran to another country and (1) if the person is a controlling beneficial owner of the vessel, the person had actual knowledge the vessel was so used or (2) if the person otherwise owns, operates, or controls, or insures the vessel, the person knew or should have known the vessel was so used. Such a person could be subject to a variety of sanctions, including exclusion from U.S. capital markets, exclusion from financial transactions subject to U.S. jurisdiction, and exclusion of that person’s vessels from U.S. ports for up to two years. The ITRA also includes a requirement that issuers of securities must disclose to the SEC in their annual and quarterly reports filed after February 6, 2013 if the issuer or “any affiliate” has “knowingly” engaged in certain sanctioned activities involving Iran during the timeframe covered by the report. Finally, in January 2013, the U.S. enacted the Iran Freedom and Counter-Proliferation Act of 2012 (the “IFCA”), which expanded the scope of U.S. sanctions on any person that is part of Iran’s energy, shipping or shipbuilding sector and operators of ports in Iran, and imposes penalties on any person who facilitates or otherwise knowingly provides significant financial, material or other support to these entities.

On January 16, 2016, the United States suspended certain sanctions against Iran applicable to non-U.S. companies, such as us, pursuant to the nuclear agreement reached between Iran, China, France, Germany, Russia, the United Kingdom, the United States and the European Union. To implement these changes, beginning on January 16, 2016, the United States waived enforcement of many of the sanctions against Iran’s energy and petrochemical sectors described above, among other things, including certain provisions of CISADA, ITRA, and IFCA. While non-U.S. companies including our charterers may now engage in certain business or trade with Iran that was previously prohibited, the U.S. has the ability to reimpose sanctions against Iran if, in the future, Iran does not comply with its obligations under the nuclear agreement.

From January 2011 through December 2015, vessels in our fleet made a total of 132 calls to ports in Iran, Syria and Sudan, representing approximately 0.65% of our approximately 20,298 calls on worldwide ports. Although we believe that we are in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation could result in fines or other penalties, could limit our ability to trade to the United States and other countries or charter our vessels, could limit our ability to obtain financing and could result in some investors deciding, or being required, to divest their interest, or not to invest, in the Company. In addition, if we have a casualty in sanctioned locations, including Iran, our underwriters may not provide required security

which could lead to the detention and subsequent loss of our vessel and the imprisonment of our crew, and our insurance policies may not cover the costs and losses associated with the incident. Additionally, some investors may decide to divest their interest, or not to invest, in the Company simply because we do business with companies that do business in sanctioned countries. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that may involve our vessels, and those violations could in turn negatively affect our reputation. Investor perception of the value of our common stock may also be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.

Failure to comply with the U.S. Foreign Corrupt Practices Act and other anti-bribery legislation in other jurisdictions could result in fines, criminal penalties, contract terminations and an adverse effect on our business.

We may operate in a number of countries through the world, including countries known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”). We are subject, however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees and agents may take actions determined to be in violation of such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.

We are a Marshall Islands corporation, and the Marshall Islands does not have a well developed body of corporate law or a bankruptcy act, and, as a result, stockholders may have fewer rights and protections under Marshall Islands law than under the laws of a jurisdiction in the United States.

Our corporate affairs are governed by our articles of incorporation and bylaws and by the Marshall Islands Business Corporations Act (the “BCA”). The provisions of the BCA are similar to provisions of the corporation laws of a number of states in the United States, most notably Delaware. The BCA also provides that it is to be applied and construed to make it uniform with the laws of Delaware and other states of the United States that have substantially similar laws. In addition, so long as it does not conflict with the BCA or decisions of the Marshall Islands courts, the BCA is to be interpreted according to the non-statutory law (or case law) of the State of Delaware and other states of the United States that have substantially similar laws. There have been, however, few court cases in the Marshall Islands interpreting the BCA, in contrast to Delaware, which has a well-developed body of case law interpreting its corporate law statutes. Accordingly, we cannot predict whether Marshall Islands courts would reach the same conclusions as the courts in Delaware or such other states of the United States. For example, the rights and fiduciary responsibilities of directors under the laws of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in the relevant U.S. jurisdictions. Stockholder rights may differ as well. As a result, our public stockholders may have more difficulty in protecting their interests in the face of actions by the management, directors or controlling stockholders than would stockholders of a corporation incorporated in a U.S. jurisdiction.

The Marshall Islands has no established bankruptcy act, and as a result, any bankruptcy action involving our company would have to be initiated outside the Marshall Islands, and our public stockholders may find it difficult or impossible to pursue their claims in such other jurisdictions.

It may be difficult or impossible to enforce service of process and enforcement of judgments against us and our officers and directors.

We are a Marshall Islands corporation and all of our subsidiaries are, and will likely be, incorporated in jurisdictions outside the United States. In addition, our executive offices are located outside of the United States in Monaco. All of our directors and officers reside outside of the United States, and all or a substantial portion of our assets and the assets of most of our officers and directors are, and will likely be, located outside of the United States. As a result, it may be difficult or impossible for U.S. investors to serve legal process within the United States upon us or any of these persons or to enforce a judgment against us for civil liabilities in U.S. courts. In addition, you should not assume that courts in the countries in which we or our subsidiaries are incorporated or where our or our subsidiaries’ assets are located (1) would enforce judgments of U.S. courts obtained in actions against us or our subsidiaries based upon the civil liability provisions of applicable U.S. Federal and state securities laws or (2) would enforce, in original actions, liabilities against us or our subsidiaries based on those laws.

There is also substantial doubt that the courts of the Marshall Islands or Monaco would enter judgments in original actions brought in those courts predicated on U.S. Federal or state securities laws.

Risks Relating to our Securities

The price of our securities may be volatile.

The price of our equity securities may be volatile and may fluctuate due to various factors including:

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actual or anticipated fluctuations in quarterly and annual results;

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fluctuations in the seaborne transportation industry, including fluctuations in the containership market;

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mergers and strategic alliances in the shipping industry;

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changes in governmental regulations or maritime self-regulatory organization standards;

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shortfalls in our operating results from levels forecasted by securities analysts;

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our payment of dividends;

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announcements concerning us or our competitors;

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general economic conditions;

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terrorist acts;

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future sales of our stock or other securities;

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investors’ perceptions of us and the international container shipping industry;

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the general state of the securities markets; and

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other developments affecting us, our industry or our competitors.

The containership sector of the shipping industry has been highly unpredictable and volatile. Securities markets worldwide are experiencing significant price and volume fluctuations. The market price for our securities may also be volatile. This market volatility, as well as general economic, market or political conditions, could reduce the market price of our securities in spite of our operating performance. Consequently, you may not be able to sell our securities at prices equal to or greater than those at which you pay or paid.

Our management is required to devote substantial time to complying with public company regulations.

As a public company, we incur significant legal, accounting and other expenses. In addition, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) as well as rules subsequently adopted by the SEC and the New York Stock Exchange (“NYSE”), including the Dodd-Frank Wall Street Reform and

Consumer Protection Act of 2010, have imposed various requirements on public companies, including changes in corporate governance practices. Our directors, management and other personnel devote a substantial amount of time to comply with these requirements and compliance with these rules and regulations relating to public companies result in legal and financial compliance costs.

Sarbanes-Oxley requires, among other things, that we maintain and periodically evaluate our internal control over financial reporting and disclosure controls and procedures. In particular, under Section 404 of Sarbanes-Oxley, we are required to include in each of our annual reports on Form 20-F a report containing our management’s assessment of the effectiveness of our internal control over financial reporting and a related attestation of our independent auditors. We have undertaken the required review to comply with Section 404, including the documentation, testing and review of our internal controls under the direction of our management. While we did not identify any material weaknesses or significant deficiencies in our internal controls under the current assessment, we cannot be certain at this time that all our controls will be considered effective in future assessments. Therefore, we can give no assurances that our internal control over financial reporting will satisfy the new regulatory requirements in the future.

We are a “foreign private issuer” and “controlled company” under the NYSE rules, and as such we are entitled to exemption from certain NYSE corporate governance standards, and you may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements.

We are a “foreign private issuer” under the securities laws of the United States and the rules of the NYSE. Under the securities laws of the United States, “foreign private issuers” are subject to different disclosure requirements than U.S. domiciled registrants, as well as different financial reporting requirements. Under the NYSE rules, a “foreign private issuer” is subject to less stringent corporate governance requirements. Subject to certain exceptions, the rules of the NYSE permit a “foreign private issuer” to follow its home country practice in lieu of the listing requirements of the NYSE. In addition, members of the Konstantakopoulos family continue to own, in the aggregate, a majority of our outstanding common stock. As a result, we are a “controlled company” within the meaning of the NYSE corporate governance standards. Under the NYSE rules, a company of which more than 50% of the voting power is held by another company or group is a “controlled company” and may elect not to comply with certain NYSE corporate governance requirements, including (1) the requirement that a majority of the board of directors consist of independent directors, (2) the requirement that the nominating committee be composed entirely of independent directors and have a written charter addressing the committee’s purpose and responsibilities, (3) the requirement that the compensation committee be composed entirely of independent directors and have a written charter addressing the committee’s purpose and responsibilities and (4) the requirement of an annual performance evaluation of the nominating and corporate governance and compensation committees. As permitted by these exemptions, as well as by our bylaws and the laws of the Marshall Islands, we currently have a board of directors with a majority of non-independent directors, an audit committee comprised solely of two independent directors and a combined corporate governance, nominating and compensation committee with one non-independent director serving as a committee chairman. As a result, non-independent directors, including members of our management who also serve on our board of directors, may, among other things, fix the compensation of our management, make stock and option awards and resolve governance issues regarding our company. Accordingly, in the future you may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements.

Future sales of our equity securities could cause the market price of our securities to decline.

Sales of a substantial number of shares of our equity securities in the public market, or the perception that these sales could occur, may depress the market price for our securities. These sales could also impair our ability to raise additional capital through the sale of our equity securities in the future.

Subject to the rules of the NYSE, in the future, we may issue additional shares of common stock, and other equity securities of equal or senior rank, without stockholder approval, in a number of circumstances.

The issuance by us of additional shares of common stock or other equity securities of equal or senior rank would have the following effects:

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our existing stockholders’ proportionate ownership interest in us will decrease;

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the dividend amount payable per share on our securities may be lower;

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the relative voting strength of each previously outstanding share may be diminished; and

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the market price of our securities may decline.

Our stockholders also may elect to sell large numbers of shares held by them from time to time. The number of shares of common stock and Preferred Stock available for sale in the public market will be limited by restrictions applicable under securities laws, and agreements that we and our executive officers, directors and existing stockholders may enter into with the underwriters at the time of an offering. Subject to certain exceptions, these agreements generally restrict us and our executive officers, directors and existing stockholders from directly or indirectly offering, selling, pledging, hedging or otherwise disposing of our equity securities or any security that is convertible into or exercisable or exchangeable for our equity securities and from engaging in certain other transactions relating to such securities for an agreed period after the date of an offering prospectus without the prior written consent of the underwriters.

Our Preferred Stock is subordinated to our debt obligations and pari passu with each other, and your interests could be diluted by the issuance of additional shares of preferred stock, including additional Series B, Series C and Series D Preferred Stock, and by other transactions.

Our Preferred Stock is subordinated to all of our existing and future indebtedness. As of December 31, 2015, we had outstanding indebtedness, including our lease obligations, of approximately $1.56 billion. Our existing indebtedness restricts, and our future indebtedness may include restrictions on, our ability to pay dividends to preferred stockholders. Our charter currently authorizes the issuance of up to 100 million shares of preferred stock in one or more classes or series. Of this preferred stock, 80 million shares remain available for issuance after giving effect to the designation of 10 million shares as Series A Participating Preferred Stock in connection with our adoption of a stockholder rights plan, the issuance of two million shares as Series B Preferred Stock, the issuance of four million shares as Series C Preferred Stock and the issuance of four million shares as Series D Preferred Stock. The issuance of additional preferred stock on a parity with or senior to our Preferred Stock would dilute the interests of the holders of our Preferred Stock, and any issuance of preferred stock senior to or on a parity with our Preferred Stock or of additional indebtedness could affect our ability to pay dividends on, redeem or pay the liquidation preference on our Preferred Stock. No provisions relating to our Preferred Stock protect the holders of our Preferred Stock in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all our assets or business, which might adversely affect the holders of our Preferred Stock.

Holders of Preferred Stock have extremely limited voting rights.

Our common stock is the only class of our stock carrying full voting rights. Holders of the Preferred Stock generally have no voting rights except (1) in respect of amendments to the Articles of Incorporation which would adversely alter the preferences, powers or rights of the Preferred Stock or (2) in the event that the Company proposes to issue any parity stock if the cumulative dividends payable on outstanding Preferred Stock are in arrears or any senior stock. However, if and whenever dividends payable on the Preferred Stock are in arrears for six or more quarterly periods, whether or not consecutive, holders of Preferred Stock (for this purpose the Series B, Series C and Series D Preferred Stock will vote together as a single class with all other classes or series of parity stock upon which like voting rights have been conferred and are exercisable) will be entitled to elect one additional director to serve on our board of directors, and the size of our board of directors will

be increased as needed to accommodate such change (unless the size of our board of directors already has been increased by reason of the election of a director by holders of parity stock upon which like voting rights have been conferred and with which the Preferred Stock voted as a class for the election of such director). The right of such holders of Preferred Stock to elect a member of our board of directors will continue until such time as all accumulated and unpaid dividends on the Preferred Stock have been paid in full.

The Preferred Stock represents perpetual equity interests and you will have no right to receive any greater payment than the liquidation preference regardless of the circumstances.

The Preferred Stock represents perpetual equity interests in us and, unlike our indebtedness, will not give rise to a claim for payment of a principal amount at a particular date. As a result, holders of the Preferred Stock may be required to bear the financial risks of an investment in the Preferred Stock for an indefinite period of time.

The payment due to a holder of Preferred Stock upon a liquidation is fixed at the redemption preference of $25.00 per share plus accumulated and unpaid dividends to the date of liquidation. If, in the case of our liquidation, there are remaining assets to be distributed after payment of this amount, you will have no right to receive or to participate in these amounts. Furthermore, if the market price for your Preferred Stock is greater than the liquidation preference, you will have no right to receive the market price from us upon our liquidation.

Members of the Konstantakopoulos family are our principal existing stockholders and will control the outcome of matters on which our stockholders are entitled to vote; their interests may be different from yours.

Members of the Konstantakopoulos family own, directly or indirectly, approximately 65.0% of our outstanding common stock, in the aggregate. These stockholders will be able to control the outcome of matters on which our stockholders are entitled to vote, including the election of our entire board of directors and other significant corporate actions. The interests of each of these stockholders may be different from yours.

Anti-takeover provisions in our organizational documents could make it difficult for our stockholders to replace or remove our current board of directors or could have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of the shares of our common stock.

Several provisions of our articles of incorporation and bylaws could make it difficult for our stockholders to change the composition of our board of directors in any one year, preventing them from changing the composition of our management. In addition, the same provisions may discourage, delay or prevent a merger or acquisition that stockholders may consider favorable.

These provisions:

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authorize our board of directors to issue “blank check” preferred stock without stockholder approval;

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provide for a classified board of directors with staggered, three-year terms;

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prohibit cumulative voting in the election of directors;

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authorize the removal of directors only for cause and only upon the affirmative vote of the holders of a majority of the outstanding stock entitled to vote for those directors;

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prohibit stockholder action by written consent unless the written consent is signed by all stockholders entitled to vote on the action; and

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establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings.

We have adopted a stockholder rights plan pursuant to which our board of directors may cause the substantial dilution of the holdings of any person that attempts to acquire us without the approval of our board of directors.

These anti-takeover provisions, including the provisions of our stockholder rights plan, could substantially impede the ability of public stockholders to benefit from a change in control and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium.

Tax Risks

In addition to the following risk factors, you should read “Item 10. Additional Information—E. Tax Considerations—Marshall Islands Tax Considerations”, “Item 10. Additional Information—E. Tax Considerations—Liberian Tax Considerations” and “Item 10. Additional Information—E. Tax Considerations—United States Federal Income Tax Considerations” for a more complete discussion of the material Marshall Islands, Liberian and U.S. Federal income tax consequences of owning and disposing of our common stock and Preferred Stock.

We may have to pay tax on U.S.-source income, which would reduce our earnings.

Under the United States Internal Revenue Code of 1986, as amended (the “Code”), the U.S. source gross transportation income of a ship-owning or chartering corporation, such as ourselves, is subject to a 4% U.S. Federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the Treasury Regulations promulgated thereunder. U.S. source gross transportation income consists of 50% of the gross shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States.

We believe that we have qualified and currently intend to continue to qualify for this statutory tax exemption for the foreseeable future. However, no assurance can be given that this will be the case. If we or our subsidiaries are not entitled to this exemption under Section 883 for any taxable year, we or our subsidiaries would be subject for those years to a 4% U.S. Federal income tax on our U.S. source gross transportation income. The imposition of this taxation could have a negative effect on our business and would result in decreased earnings available for distribution to our stockholders. Some of our time charters contain provisions pursuant to which charterers undertake to reimburse us for the 4% gross basis tax on our U.S. source gross transportation income. For a more detailed discussion, see “Item 10. Additional Information—E. Tax Considerations—United States Federal Income Tax Considerations—Taxation of Our Shipping Income”.

If we were treated as a “passive foreign investment company”, certain adverse U.S. Federal income tax consequences could result to U.S. stockholders.

A foreign corporation will be treated as a “passive foreign investment company” (“PFIC”), for U.S. Federal income tax purposes if at least 75% of its gross income for any taxable year consists of certain types of “passive income”, or at least 50% of the average value of the corporation’s assets produce or are held for the production of those types of “passive income”. For purposes of these tests, “passive income” includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties that are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute “passive income”. U.S. stockholders of a PFIC are subject to a disadvantageous U.S. Federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC, and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC. If we are treated as a PFIC for any taxable year, we will provide information to U.S. stockholders who request such information to enable them to make certain elections to alleviate certain of the adverse U.S. Federal income tax consequences that would arise as a result of holding an interest in a PFIC.

Based on our proposed method of operation, we do not believe that we will be a PFIC with respect to any taxable year. In this regard, we intend to treat the gross income we derive or are deemed to derive from our time chartering activities as services income, rather than rental income. Accordingly, we believe that our income from our time chartering activities does not constitute “passive income”, and the assets that we own and operate in connection with the production of that income do not constitute passive assets. Our counsel, Cravath, Swaine & Moore LLP, is of the opinion that we should not be a PFIC based on certain assumptions made by them as well as certain representations we made to them regarding the composition of our assets, the source of our income, and the nature of our operations.

There is, however, no legal authority under the PFIC rules addressing our proposed method of operation. Accordingly, no assurance can be given that the U.S. Internal Revenue Service (the “IRS”) or a court of law will accept our position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any future taxable year if there were to be changes in the nature and extent of our operations.

If the IRS were to find that we are or have been a PFIC for any taxable year, U.S. stockholders would face adverse tax consequences. Under the PFIC rules, unless those stockholders make certain elections available under the Code, such stockholders would be liable to pay U.S. Federal income tax at the then prevailing income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of our common stock or Preferred Stock, as if the excess distribution or gain had been recognized ratably over the stockholder’s holding period. Please read “Item 10. Additional Information—E. Tax Considerations—United States Federal Income Tax Considerations—Taxation of United States Holders—PFIC Status” for a more detailed discussion of the U.S. Federal income tax consequences to U.S. stockholders if we are treated as a PFIC.

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

Costamare Inc. was incorporated in the Republic of The Marshall Islands on April 21, 2008 under the Marshall Islands Business Corporations Act, for the purpose of completing a reorganization of 53 ship-owning companies then owned by our chief executive officer and other members of the Konstantakopoulos family under a single corporate holding company. We are controlled by members of the Konstantakopoulos family, which has a long history of operating and investing in the international shipping industry, including a long history of vessel ownership. We were founded in 1974 and initially owned and operated drybulk carrier vessels. In 1984 we became the first Greek-owned company to enter the containership market and, since 1992, we have focused exclusively on containerships. After assuming management of our company in 1998, Konstantinos Konstantakopoulos has concentrated on building a large, modern and reliable containership fleet run and supported by highly skilled, experienced and loyal personnel. He founded the management company Shanghai Costamare in 2005, and the manning agency C-Man Maritime Inc. (“C-Man Maritime”) in 2006. Under Konstantinos Konstantakopoulos’s leadership, we have continued to foster a company culture focusing on excellent customer service, industry leadership and innovation.

In November 2010, we completed an initial public offering of our common stock in the United States and our common stock began trading on the NYSE on November 4, 2010 under the ticker symbol “CMRE”. On March 27, 2012 and October 19, 2012, we completed two follow-on public offerings of our common stock. On August 7, 2013, we completed a public offering of our Series B Preferred Stock, on January 21, 2014, we completed a public offering of our Series C Preferred Stock and on May 13, 2015, we completed a public offering of our Series D Preferred Stock.

Under the Framework Deed entered into in May 2013 and amended and restated in May 2015, we have agreed with York to invest in newbuild and secondhand container vessels through jointly held companies, thereby increasing our ability to expand our operations while diversifying our risk. The joint venture established by the Framework Deed is expected to be each party’s exclusive joint venture for the acquisition of vessels in the containership industry during the commitment period ending May 18, 2020, unless terminated earlier in certain circumstances (although we may acquire vessels outside the joint venture where York rejects a vessel acquisition opportunity). If York decides to participate in a new vessel acquisition, we will hold a 25% to 75% equity interest in such vessel. As of April 20, 2016, the joint venture had executed transactions with capital expenditure commitments of approximately $1.2 billion. As of the same date, Costamare and York had made payments of approximately $476.5 million (which amount includes the financing obtained through the CLC Sale and Leaseback) and obtained committed financing for $428.2 million of the remaining $691.0 million through sale and leaseback transactions. As part of the Framework Deed, we hold a minority stake in the existing Joint Venture vessels and expect to hold a stake of 25% to 75% in future Joint Venture vessels. For more information on the Company’s capital expenditures and divestitures see Note 6 to our consolidated financial statements included elsewhere in this annual report.

We maintain our principal executive offices at 7 Rue du Gabian, MC 98000 Monaco. Our telephone number at that address is +377 93 25 09 40. Our registered address in the Marshall Islands is Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960. The name of our registered agent at such address is The Trust Company of the Marshall Islands, Inc.

B. Business Overview

General

We are an international owner of containerships, chartering our vessels to many of the world’s largest liner companies. As of April 20, 2016, we had a fleet of 72 containerships with a total capacity in excess of 467,000 TEU, including 12 newbuilds on order, making us one of the largest public containership companies in the world based on total TEU capacity. At that date, our fleet

consisted of (i) 60 vessels in the water, aggregating approximately 333,000 TEU and (ii) 12 newbuild vessels aggregating approximately 134,000 TEU that are scheduled to be delivered to us through the second quarter of 2018, based on the current shipyard schedule. As of December 31, 2015, 18 of our containerships, including 12 newbuilds, had been acquired pursuant to the Framework Deed with York by vessel-owning joint venture entities in which we hold a minority equity interest. See “—Our Fleet, Acquisitions and Newbuild Vessels”.

Our strategy is to time-charter our containerships to a geographically diverse, financially strong and loyal group of leading liner companies. We aim to operate our containerships under long-term, fixed-rate time charters, to the extent available, to avoid seasonal variations in demand. Our containerships have a record of low unscheduled off-hire days, with fleet utilization levels, excluding scheduled dry dockings, of 99.9%, 99.8% and 99.7% in 2013, 2014 and 2015, respectively. Over the last three years our largest customers by revenue were A.P. Moller-Maersk, MSC, Evergreen, Hapag Lloyd and COSCO. As of April 20, 2016, the average (weighted by TEU capacity) remaining time-charter duration for our fleet of 72 containerships was approximately 3.7 years, based on the remaining fixed terms and assuming the exercise of any owner’s options and the non-exercise of any charterer’s options under our containerships’ charters. As of April 20, 2016, our fixed-term charters represented an aggregate of approximately $1.8 billion of contracted revenue, assuming the earliest redelivery dates possible and 365 revenue days per annum per containership (which amount includes our ownership percentage of contracted revenue for the Joint Venture vessels (currently $395.4 million)) and the exercise of the owner’s unilateral extension options. Ten of these charters include an option exercisable by either party to extend the term: five wholly-owned vessels for two one-year periods at the same charter rate, which represents $152.2 million of potential contracted revenue, and five Joint Venture vessels for a three-year period and a subsequent two-year period at the same charter rate, which represents $170.5 million of potential contracted revenue that is attributable to our share of the relevant vessel-owning entities. In addition, we have charters for two wholly-owned vessels, which include an option to extend the charters for subsequent one-year periods at market rate plus $1,100 per vessel per day. See “Item 4. Information on the Company—B. Business Overview—Our Fleet, Acquisitions and Newbuild Vessels—Our Fleet”.

As described below, our vessels are managed by Costamare Shipping which is controlled by our chairman and chief executive officer. Costamare Shipping may subcontract certain services to other affiliated managers (such as Shanghai Costamare), or to V.Ships Greece or, subject to our consent, to other third party managers. We believe that having several management companies, both affiliate and third party, provides us with a deep pool of operational management in multiple locations with market-specific experience and relationships, as well as the geographic flexibility needed to manage and crew our large and diverse fleet so as to provide a high level of service, while remaining cost-effective.

Our Fleet, Acquisitions and Newbuild Vessels

Our Fleet

The tables below provide additional information, as of April 20, 2016, about our fleet of 72 containerships, including 12 newbuilds on order. The tables include the vessels acquired pursuant to the Framework Deed with York and the vessels subject to sale and leaseback transactions.



	Vessel Name	Charterer	Year Built		Capacity (TEU)		Time Charter Term ⁽¹⁾	Current Daily Charter Rate (U.S. dollars)		Expiration of Charter ⁽¹⁾	Average Daily Charter Rate Until Earliest Expiry of Charter (U.S. dollars) ⁽²⁾

1	COSCO GUANGZHOU	COSCO		2006		9,469	12 years		36,400	December 2017		36,400

2	COSCO NINGBO	COSCO		2006		9,469	12 years		36,400	January 2018		36,400

3	COSCO YANTIAN	COSCO		2006		9,469	12 years		36,400	February 2018		36,400

4	COSCO BEIJING	COSCO		2006		9,469	12 years		36,400	April 2018		36,400

5	COSCO HELLAS	COSCO		2006		9,469	12 years		37,519	May 2018		37,519



	Vessel Name	Charterer	Year Built		Capacity (TEU)		Time Charter Term ⁽¹⁾	Current Daily Charter Rate (U.S. dollars)			Expiration of Charter ⁽¹⁾	Average Daily Charter Rate Until Earliest Expiry of Charter (U.S. dollars) ⁽²⁾

6	MSC AZOV**	MSC		2014		9,403	10 years		43,000		November 2023		43,000

7	MSC AJACCIO**	MSC		2014		9,403	10 years		43,000		February 2024		43,000

8	MSC AMALFI**	MSC		2014		9,403	10 years		43,000		March 2024		43,000

9	MSC ATHENS	MSC		2013		8,827	10 years		42,000		January 2023		42,000

10	MSC ATHOS	MSC		2013		8,827	10 years		42,000		February 2023		42,000

11	VALOR	Evergreen		2013		8,827	7.0 years ⁽ⁱ⁾		41,700		April 2020 ⁽ⁱ⁾		41,700

12	VALUE	Evergreen		2013		8,827	7.0 years ⁽ⁱ⁾		41,700		April 2020 ⁽ⁱ⁾		41,700

13	VALIANT	Evergreen		2013		8,827	7.0 years ⁽ⁱ⁾		41,700		June 2020 ⁽ⁱ⁾		41,700

14	VALENCE	Evergreen		2013		8,827	7.0 years ⁽ⁱ⁾		41,700		July 2020 ⁽ⁱ⁾		41,700

15	VANTAGE	Evergreen		2013		8,827	7.0 years ⁽ⁱ⁾		41,700		September 2020 ⁽ⁱ⁾		41,700

16	NAVARINO	PIL		2010		8,531	1.0 year		10,500		November 2016 ⁽ⁱⁱ⁾		10,500

17	MAERSK KAWASAKI ⁽ⁱⁱⁱ⁾	A.P. Moller-Maersk		1997		7,403	10 years		37,000		December 2017		37,000

18	MAERSK KURE ⁽ⁱⁱⁱ⁾	A.P. Moller-Maersk		1996		7,403	10 years		37,000		December 2017		37,000

19	MAERSK KOKURA ⁽ⁱⁱⁱ⁾	A.P. Moller-Maersk		1997		7,403	10 years		37,000		February 2018		37,000

20	MSC METHONI	MSC		2003		6,724	10 years		29,000		September 2021		29,000

21	SEALAND NEW YORK	A.P. Moller-Maersk		2000		6,648	11 years		26,100		March 2018		26,100

22	MAERSK KOBE	A.P. Moller-Maersk		2000		6,648	11 years		26,100		May 2018		26,100

23	SEALAND WASHINGTON	A.P. Moller-Maersk		2000		6,648	11 years		26,100		June 2018		26,100

24	SEALAND MICHIGAN	A.P. Moller-Maersk		2000		6,648	11 years		26,100		August 2018		26,100

25	SEALAND ILLINOIS	A.P. Moller-Maersk		2000		6,648	11 years		26,100		October 2018		26,100

26	MAERSK KOLKATA	A.P. Moller-Maersk		2003		6,644	11 years		26,100		November 2019		26,100

27	MAERSK KINGSTON	A.P. Moller-Maersk		2003		6,644	11 years		38,461	⁽⁴⁾	February 2020		26,161

28	MAERSK KALAMATA	A.P. Moller-Maersk		2003		6,644	11 years		38,418	⁽⁵⁾	April 2020		26,533

29	VENETIKO			2003		5,928

30	ENSENADA EXPRESS ^(*)			2001		5,576

31	MSC ROMANOS	MSC		2003		5,050	5.3 years		28,000		November 2016		28,000

32	ZIM NEW YORK	ZIM		2002		4,992	14 years		14,534		September 2016 ⁽⁶⁾		14,534

33	ZIM SHANGHAI	ZIM		2002		4,992	14 years		14,534		September 2016 ⁽⁶⁾		14,534

34	ZIM PIRAEUS	ZIM		2004		4,992	10 years		12,500		July 2016		12,500

35	OAKLAND EXPRESS	Hapag Lloyd		2000		4,890	8.0 years		30,500		September 2016		30,500

36	HALIFAX EXPRESS	Hapag Lloyd		2000		4,890	8.0 years		30,500		October 2016		30,500

37	SINGAPORE EXPRESS	Hapag Lloyd		2000		4,890	8.0 years		30,500		July 2016		30,500

38	MSC MANDRAKI	MSC		1988		4,828	7.8 years		20,000		August 2017		20,000

39	MSC MYKONOS	MSC		1988		4,828	8.2 years		20,000		September 2017		20,000

40	MSC ULSAN	MSC		2002		4,132	5.3 years		16,500		March 2017		16,500

41	MSC KORONI	MSC		1998		3,842	9.5 years		13,500	⁽⁷⁾	September 2018		13,500

42	ITEA	Hapag-Lloyd		1998		3,842	0.1 years		6,250		May 2016		6,250

43	KARMEN	Evergreen		1991		3,351	1.9 years		6,500		June 2016		7,250

44	MARINA	Evergreen		1992		3,351	0.5 years		8,800		May 2016		8,800

45	LAKONIA	Evergreen		2004		2,586	2.0 years		8,600		February 2017		8,600

46	ELAFONISOS ^(*)	CMA CGM		1999		2,526	0.3 years		6,000		May 2016		6,000

47	AREOPOLIS	Evergreen		2000		2,474	0.3 years		5,950		June 2016		5,950

48	MONEMVASIA ^(*)(iv)	A.P. Moller-Maersk		1998		2,472	0.1 years		8,750		May 2016		8,750

49	MESSINI	Evergreen		1997		2,458	3.3 years		6,000		August 2016		6,000

50	MSC REUNION	MSC		1992		2,024	9.0 years		11,200	⁽⁸⁾	July 2017		8,019

51	MSC NAMIBIA II	MSC		1991		2,023	9.8 years		11,200	⁽⁹⁾	July 2017		7,837



	Vessel Name	Charterer	Year Built		Capacity (TEU)		Time Charter Term ⁽¹⁾	Current Daily Charter Rate (U.S. dollars)			Expiration of Charter ⁽¹⁾	Average Daily Charter Rate Until Earliest Expiry of Charter (U.S. dollars) ⁽²⁾

52	MSC SIERRA II	MSC		1991		2,023	8.7 years		11,200	⁽¹⁰⁾	June 2017		7,569

53	MSC PYLOS	MSC		1991		2,020	6.0 years		6,300		January 2017		6,300

54	PADMA ^(*)	Yang Ming		1998		1,645	1.2 years		7,400	⁽¹¹⁾	August 2016		7,256

55	NEAPOLIS ^(****)			2000		1,645

56	ARKADIA ^(*)	Evergreen		2001		1,550	2.0 years		10,600		August 2017		10,600

57	PROSPER ^(****)			1996		1,504

58	ZAGORA	MSC		1995		1,162	5.8 years		7,400	⁽¹²⁾	June 2017		6,321

59	PETALIDI ^(*)	CMA CGM		1994		1,162	2.0 years		7,600		June 2016		7,600

60	STADT LUEBECK	CMA CGM		2001		1,078	2.7 years		8,000	⁽¹³⁾	May 2016		8,000

Newbuilds



	Vessel Name	Shipyard	Capacity (TEU)	Charterer	Expected Delivery ⁽³⁾

1	NCP0113 ^(*)	Hanjin Subic Bay	11,010		2nd Quarter 2016

2	NCP0114 ^(*)	Hanjin Subic Bay	11,010		2nd Quarter 2016

3	NCP0115 ^(*)	Hanjin Subic Bay	11,010		3rd Quarter 2016

4	NCP0116 ^(*)	Hanjin Subic Bay	11,010		3rd Quarter 2016

5	NCP0152 ^(*)	Hanjin Subic Bay	11,010		1st Quarter 2017

6	S2121 ^()(**)	Samsung Heavy	14,354	Evergreen	2nd Quarter 2016

7	S2122 ^()(**)	Samsung Heavy	14,354	Evergreen	2nd Quarter 2016

8	S2123 ^()(**)	Samsung Heavy	14,354	Evergreen	3rd Quarter 2016

9	S2124 ^()(**)	Samsung Heavy	14,354	Evergreen	3rd Quarter 2016

10	S2125 ^()(**)	Samsung Heavy	14,354	Evergreen	4th Quarter 2016

11	YZJ1206 ^()(**)	Jiangsu New Yangzi	3,800	Hamburg Süd	1st Quarter 2018

12	YZJ1207 ^()(**)	Jiangsu New Yangzi	3,800	Hamburg Süd	2nd Quarter 2018

⁽¹⁾

Charter terms and expiration dates are based on the earliest date charters could expire. Amounts set out for current daily charter rate are the amounts contained in the charter contracts.

⁽²⁾

This average rate is calculated based on contracted charter rates for the days remaining between April 20, 2016 and the earliest expiration of each charter. Certain of our charter rates change until their earliest expiration dates, as indicated in the footnotes below.

⁽³⁾

Based on latest shipyard production schedule, subject to change.

⁽⁴⁾

This charter rate changes on April 28, 2016 to $26,100 per day until the earliest redelivery date.

⁽⁵⁾

This charter rate changes on June 11, 2016 to $26,100 per day until the earliest redelivery date.

⁽⁶⁾

The amounts in the table reflect the current charter terms, giving effect to our agreement with Zim under the 2014 restructuring plan. Based on this agreement, we have been granted charter extensions and have been issued equity securities representing 1.2% of Zim’s equity and approximately $8.2 million in interest bearing notes maturing in 2023. In July the Company exercised its option to extend the charters of Zim New York and Zim Shanghai for one year pursuant to its option to extend the charter of two of the three vessels chartered to Zim for successive one year periods at market rate plus $1,100 per day per vessel while the notes remain outstanding. The rate for the first year has been determined at $14,534 per day.

⁽⁷⁾

As from December 1, 2012 until redelivery, the charter rate is to be a minimum of $13,500 per day plus 50% of the difference between the market rate and the charter rate of $13,500. The market rate is to be determined annually based on the Hamburg ConTex type 3500 TEU index published on October 1 of each year until redelivery.

⁽⁸⁾

This charter rate changes on August 27, 2016 to $6,800 per day until the earliest redelivery date.

⁽⁹⁾

This charter rate changes on August 2, 2016 to $6,800 per day until the earliest redelivery date.

⁽¹⁰⁾

This charter rate changes on July 1, 2016 to $6,800 per day until the earliest redelivery date.

⁽¹¹⁾

This charter rate changes on June 1, 2016 to $6,200 per day until the earliest redelivery date.

⁽¹²⁾

The charter rate will be $8,000 per day provided that the vessel trades within the Red Sea once every 20 days, while it will change to $7,400 for non-Red Sea trading. As of April 20, 2016, the vessel is earning $8,000 per day.

⁽ⁱ⁾

Assumes exercise of owner’s unilateral options to extend the charter of these vessels for two one year periods at the same charter rate. The charterer also has corresponding options to unilaterally extend the charter for the same periods at the same charter rate.

⁽ⁱⁱ⁾

The charterer has a unilateral option to extend the charter of the vessel for a period of 12 months.

⁽ⁱⁱⁱ⁾

The charterer has a unilateral option to extend the charter of the vessel for two periods of 30 months each +/-90 days on the final period performed, at a rate of $41,700 per day.

^(iv)

We have entered into a five year charter agreement with Maersk upon the expiry of the current charter agreement, at a rate of $9,250 daily.

^(*)

Denotes vessels acquired pursuant to the Framework Deed with York. The Company holds an equity interest ranging between 25% and 49% in each of the vessel-owning entities.

^(**)

Denotes vessels subject to the sale and leaseback transaction with CLC. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities and Finance Leases—CLC Sale and Leaseback”.

^(***)

Denotes vessels acquired pursuant to the Framework Deed which are subject to sale and leaseback transactions with Chinese financial institutions.

^(****)

Denotes vessels undergoing repairs as of April 20, 2016.

Framework Deed

Under the terms of the Original Framework Deed, (i) York agreed to invest up to $250 million in mutually agreed vessel acquisitions and we agreed to invest a minimum of $75 million with an option to invest up to $240 million in these transactions and (ii) depending on the amount the Company elected to invest in any acquisition, the Company expected to hold between 25% and 49% of the equity in the relevant vessel-owning entity and York would hold the balance. The Original Framework Deed was amended and restated on May 18, 2015. Pursuant to the amended Framework Deed, there are no minimum or maximum amounts to be invested by Costamare Ventures and York and both Costamare Ventures and York can invest between 25% and 75% of the equity in the affiliate ship-owning companies. As of April 20, 2016, York has invested $163.2 million and we have invested $112.3 million for the acquisition of six secondhand vessels and entering into contracts for 12 newbuild vessels. Costamare Shipping provides ship-management services to the Joint Venture vessels, with the right either to subcontract to V.Ships Greece and/or Shanghai Costamare or to direct a vessel-owning entity to contract directly for certain ship-management services with V.Ships Greece. The Framework Deed will terminate on May 18, 2024 or upon the occurrence of certain extraordinary events. At that time, Costamare Ventures can elect to divide the vessels owned by all such vessel-owning entities between itself and York to reflect their cumulative participation in all such entities. We expect to account for the entities formed under the Framework Deed as equity investments.

Six vessels, totaling approximately 14,930 TEU, have been acquired under the Framework Deed with York to date. In addition, pursuant to the Framework Deed, jointly-owned entities have entered into shipbuilding contracts for the construction of 12 container vessels of approximately 134,000 TEU capacity, to be delivered by the second quarter of 2018, for a total purchase price of approximately $1.1 billion. The Company holds an equity interest ranging between 25% and 49% in each of the Joint Venture entities.

Chartering of Our Fleet

We aim to deploy our containership fleet principally under long-term, fixed-rate time charters with leading liner companies that operate on regularly scheduled routes between large commercial ports. As of April 20, 2016, the average (weighted by TEU capacity) remaining time-charter duration for our fleet of 72 containerships, including our contracted newbuild vessels and the existing vessels and newbuild vessels acquired pursuant to the Framework Deed, was approximately 3.7 years, based on the remaining fixed terms and assuming the exercise of any owner’s options and the non-exercise of any charterer’s options under our containerships’ charters.

A time charter is a contract to charter a vessel for a fixed period of time at a set daily rate and can last from a few days up to several years. Under our time charters the charterer pays for most voyage expenses, which generally include, among other things, fuel costs, port and canal charges, pilotages, towages, agencies, commissions, extra war risks insurance and any other expenses related to the cargoes, and we pay for vessel operating expenses, which generally include, among other costs, costs for crewing, provisions, stores, lubricants, insurance, maintenance and repairs, dry-docking and intermediate and special surveys.

Our Customers

Since 2006, our customers have included many of the leading international liner companies, including the current charterers A.P. Moller-Maersk, COSCO, Evergreen, Hapag Lloyd, Hamburg Süd, Sea Consortium, Yan Ming, MSC, CMA CGM S.A. (“CMA CGM”), Pacific International Lines (“PIL”) and ZIM. A.P. Moller-Maersk, MSC, Evergreen, Hapag Lloyd and COSCO together represented 93%, 94% and 95% of our revenue in 2013, 2014 and 2015, respectively.

Management of Our Fleet

Costamare Shipping is the head manager for our containerships and provides us with general administrative services and certain commercial and technical services pursuant to the Framework Agreement. Costamare Shipping is a ship management company established in 1974 and is controlled by our chairman and chief executive officer. Costamare Shipping has over 30 years of experience in managing containerships of all sizes, developing specifications for newbuild vessels and supervising the construction of such newbuild vessels in reputable shipyards in the Far East. Costamare Shipping has long established relationships with major liner companies, financial institutions and suppliers and we believe is recognized in the containership shipping industry as a leading containership manager. Prior to November 2, 2015, Costamare Shipping provided our fleet with general administrative services and certain commercial and technical services pursuant to the Group Management Agreement between us and Costamare Shipping, dated November 3, 2010, as amended on March 3, 2015 (the “Group Management Agreement”).

Costamare Shipping may subcontract certain of its obligations to other affiliated sub-managers (such as Shanghai Costamare), to V.Ships Greece or, subject to our consent, to another third party sub-manager or direct that such related or third party sub-manager enter into a direct ship-management contract with the relevant vessel-owning subsidiary. As discussed below these arrangements will not result in any increase in the aggregate amount of management fees we pay. In return for these services, we pay the management fees described below in this section. Costamare Shipping, itself or through Shanghai Costamare or V.Ships Greece, provides our fleet with technical, crewing, commercial, provisioning, bunkering, sale and purchase, chartering, accounting, insurance and administrative services pursuant to the Framework Agreement and separate ship-management agreements between each of our vessel-owning subsidiaries and Costamare Shipping and, in certain cases, V.Ships Greece.

Shanghai Costamare, which was established in February 2005, is owned (indirectly) 70% by our chairman and chief executive officer, and (indirectly) 30% by a Chinese national who is Shanghai Costamare’s general manager. Shanghai Costamare was established to service the needs of our fleet of containerships when operating in the Far East and South East Asia regions in an efficient and cost-effective manner by providing, among other services, manning services in China, and a valuable

interface with Chinese shipyards, charterers, ship-owners, financial institutions and containership service providers. Shanghai Costamare provides these services for a fixed daily fee, pursuant to separate ship-management agreements between Costamare Shipping and Shanghai Costamare.

Costamare Services is a service provider which has been established in May 2015, and is controlled by our chairman and chief executive officer and members of his family. Costamare Services builds on the long-running relationships established by Costamare Shipping with our charterers. Costamare Services provides our vessel-owning subsidiaries with crewing, commercial and administrative services, including broking and representation, pursuant to the Services Agreement.

Our chairman and chief executive officer and our chief financial officer supervise, in conjunction with our board of directors, the services provided by our managers and Costamare Services. Costamare Shipping and Costamare Services report to our board of directors through our chairman and chief executive officer and our chief financial officer, each of whom is appointed by our board of directors.

In 2013 Costamare Shipping entered into a Co-operation Agreement with V.Ships Greece, a member of V.Group, one of the largest providers of ship-management services worldwide, pursuant to which the two companies established the Cell within V.Ships Greece to provide management services to certain of our containerships. The Cell also offers ship-management services to third-party owners, including two Joint Venture vessels in our fleet. The net profit from the operation of the Cell relating to the Company’s containerships is passed on to Costamare Shipping to the extent it exceeds $20,000 per vessel while the net profit from the operation of the Cell related to third-party owners is split equally between V.Ships Greece and Costamare Shipping. Costamare Shipping passes to us the net profit, if any, it receives pursuant to the Co-operation Agreement as a refund or reduction of the management fees payable by us to Costamare Shipping under the Framework Agreement (prior to November 2, 2015, the management fees that were payable under the Group Management Agreement). Costamare Shipping’s share of the Cell’s net profit was $718,000 and $391,560 for the years ended December 31, 2015 and December 31, 2014, respectively. We expect Costamare Shipping to pay to us its $718,000 share of the Cell’s net profit by the end of the first quarter of 2016. Costamare Shipping has certain control rights regarding the employment and dismissal of the Cell’s personnel, the appointment of the Cell’s senior managers and the management of vessels owned by third parties. Costamare Shipping or V.Ships Greece may terminate the Co-operation Agreement upon six months’ notice. Although the Cell is operated pursuant to the Co-operation Agreement between Costamare Shipping and V.Ships Greece, it is not controlled by Costamare Shipping and we do not consider it to be an affiliated manager.

We believe that having multiple management companies provides us with a deep pool of operational management in multiple locations with market-specific experience and relationships, as well as the geographic flexibility needed to manage and crew our large and diverse fleet so as to provide a high level of service, while remaining cost-effective. For example, Shanghai Costamare employs Chinese nationals with the language skills and local knowledge we believe are necessary to establish and grow meaningful relationships with Chinese shipyards, charterers, ship-owners, financial institutions and containership service providers. The Cell under V.Ships Greece provides added operational flexibility and economies of scale while maintaining a high level of management services.

We believe that our affiliated managers, Costamare Shipping and Shanghai Costamare, and our service provider Costamare Services, are well regarded in the industry and are using innovative practices and technological advancement to maximize efficiency in the operation of our fleet of containerships. ISM certification is in place for our fleet of containerships and our managers, with Costamare Shipping, our head manager under the Framework Agreement, having obtained such certification in 1998, three years ahead of the deadline set by the IMO. Costamare Shipping, Shanghai Costamare and V.Ships Greece, as well as our fleet of containerships are also certified in accordance with ISO 9001-2008 and ISO 14001-2004 relating to quality management and environmental standards. In 2013, the Company received the Lloyd’s List Greek shipping award for Dry Cargo Company of the Year. Costamare Shipping received that same award in 2004. Additionally, in 2014, the Company received the Lloyd’s List Company of the Year award. As of

April 20, 2016, our affiliated managers did not manage containerships other than those owned by us and vessel-owning entities formed under the Framework Deed.

As of April 20, 2016,

•

Costamare Shipping provided commercial and insurance services to all of our containerships, as well as technical, crewing, provisioning, bunkering, sale and purchase and accounting services to 22 of our containerships;

•

Shanghai Costamare provided technical, crewing, provisioning, bunkering, sale and purchase and accounting services to 15 of our containerships including two Joint Venture vessels; and

•

V.Ships Greece provided technical, crewing, provisioning, bunkering, sale and purchase and accounting services, as well as certain commercial services, to 23 of our containerships including four Joint Venture vessels.

Costamare Shipping has agreed that during the term of the Framework Agreement, it will not provide any management services to any entity other than our subsidiaries and entities established pursuant to the Framework Deed, without our prior written approval, which we may provide under certain circumstances. Costamare Services has agreed that during the term of the Services Agreement, it will not provide services to any entity other than our subsidiaries, entities established pursuant to the Framework Deed and entities affiliated with the our chairman and chief executive officer or his family, without our prior written approval. In November 2015, Costamare Shipping entered into an agreement with Marcas Ltd. (“Marcas”), a company which negotiates marine supply contracts on behalf of vessel owners and vessel management companies. We believe that we will benefit from this agreement, which requires Costamare Shipping and Marcas to cooperate and combine their various strengths in order to achieve the best possible service and price combination with suppliers for us. Any supplier brokerage fees that Marcas receives with respect to supplies purchased by our vessel-owning subsidiaries will be paid to Costamare Shipping, which will in turn be credited by Costamare Shipping to our vessel-owning entities against their respective vessels’ operating expenses. Our vessel-owning entities will pay the annual membership fee payable by Costamare Shipping to Marcas.

Shanghai Costamare is not contractually prohibited from providing management services to third parties. In the past, Shanghai Costamare has only provided services to third parties on a limited basis and there is no current plan to change that practice. Shanghai Costamare currently provides services to two Joint Venture vessels. The Co-operation Agreement anticipates that the Cell will continue to actively seek to provide ship-management services to third-party owners in order to capitalize on the ship-management expertise of the Cell and the economies of scale brought by the affiliation with V.Group. However, as noted above, Costamare Shipping has agreed to pass to us the net profit, if any, it receives from the Cell.

Under the restrictive covenant agreement between the Company and Konstantinos Konstantakopoulos, during the period of his employment or service with the Company and for six months thereafter, he has agreed to restrictions on his ownership of any containerships or the acquisition, investment in or control of any business involved in the ownership or operation of containerships, subject to certain exceptions. Konstantinos Konstantakopoulos has also agreed that if one of our containerships and a containership owned by him are both available and meet the criteria for an available charter, our containerships will receive such charter. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Restrictive Covenant Agreements”.

the fee payable to the sub-manager or sub-provider under the relevant direct agreement. As a result, these arrangements will not result in any increase in the aggregate management fees and services fees that we pay. Moreover, in the case of the Co-operation Agreement, the management fees we pay are reduced by any net profit received by Costamare Shipping from the Cell’s operation. In addition to management fees, we pay for any capital expenditures, financial costs, operating expenses and any general and administrative expenses, including payments to third parties, including specialist providers, in accordance with the Framework Agreement and the relevant separate ship-management agreements or supervision agreements.

Costamare Shipping received in 2015 and continues to receive in 2016 a fee of $956 per day or, in the case of a containership subject to a bareboat charter, $478 per day, for each containership, pro rated for the calendar days we own each containership. In 2014, such amounts were $919 and $460, respectively. We also paid to Costamare Shipping in 2015 and continue to pay in 2016 a flat fee of $787,405 per newbuild vessel for the supervision of the construction of any newbuild vessel that we may contract. Costamare Shipping also received in the first three quarters of 2015 a monthly fee of 0.75% on all gross freight, demurrage, charter hire and ballast bonus or other income earned with respect to each containership in our fleet until the third quarter of 2015. Starting in the fourth quarter of 2015, Costamare Shipping received, and continues to receive, a fee of 0.15% on all gross freight, demurrage, charter hire and ballast bonus or other income earned with respect to each containership in our fleet. Costamare Shipping received for the first three quarters of 2015, a quarterly fee of (i) $625,000 ($2.5 million annually) and (ii) 149,600 shares (which is equal to 0.2% of the issued and outstanding Costamare common stock as of January 1, 2015), which fee included payment for the services of our executive officers (prior to 2015, we paid Costamare Shipping $1.0 million annually for such services). Starting in the fourth quarter of 2015 Costamare Services received and continues to receive from our container-shipowning subsidiaries a monthly fee of 0.60% on all gross freight, demurrage, charter hire and ballast bonus or other income earned with respect to each containership in our fleet and a quarterly fee of (i) $625,000 and (ii) an amount equal to the value of 149,600 shares (0.2% of the issued and outstanding Costamare common stock as of January 1, 2015), based on the average closing price of our common stock on the NYSE for the ten days ending on the thirtieth day of the last month of each quarter; provided that Costamare Services may elect to receive 149,600 shares instead of the fee under (ii). We have reserved a number of shares of common stock to cover the fees to be paid to Costamare Services under (ii) through December 31, 2020. During the year ended December 31, 2014 and December 31, 2015, Costamare Shipping charged in aggregate to the companies established pursuant to the Framework Deed $1.57 million and $1.86 million, respectively, for services provided in accordance with the relevant management agreements. For the year ended December 31, 2015 we paid aggregate fees of approximately $5.07 million and issued in aggregate 448,800 shares to Costamare Shipping under the Group Management Agreement and the Framework Agreement and paid aggregate fees of approximately $1.11 million and issued in aggregate 149,600 shares to Costamare Services under the Services Agreement.

The current terms of the Framework Agreement and the Services Agreement expire on December 31, 2016 and automatically renew for 9 consecutive one-year periods until December 31, 2025, at which point the Framework Agreement and the Services Agreement will expire. The daily fee for each containership, the supervision fee in respect of each containership under construction and the quarterly fee payable to Costamare Shipping under the Framework Agreement and the quarterly fee payable to Costamare Services under the Services Agreement (other than the portion of the fee in clause (ii) above which is calculated on the basis of our share price) will be annually adjusted to reflect any strengthening of the Euro against the U.S. dollar and/or material unforeseen cost increases. We are able to terminate the Framework Agreement or the Services Agreement, subject to a termination fee, by providing written notice to Costamare Shipping or Costamare Services, as applicable, at least 12 months before the end of the subsequent one-year term. The termination fee is equal to (a) the number of full years remaining prior to December 31, 2025, times (b) the aggregate fees due and payable to Costamare Shipping or Costamare Services, as applicable, during the 12-month period ending on the date of termination (without taking into account any reduction in fees under the Framework Agreement to reflect that certain obligations have been

delegated to a sub-manager or a sub-provider, as applicable); provided that the termination fee will always be at least two times the aggregate fees over the 12-month period described above. Information about other termination events under the Management Agreements is set forth in “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Management Agreements—Term and Termination Rights”.

Pursuant to the terms of the Framework Agreement, the separate ship-management agreements and supervision agreements and the Services Agreement, liability of our affiliated managers and Costamare Services to us is limited to instances of gross negligence or willful misconduct on the part of the affiliated managers or Costamare Services. Further, we are required to indemnify our affiliated managers and Costamare Services for liabilities incurred by the managers in performance of the Framework Agreement, separate ship-management agreements, supervision agreements, and the Services Agreement, in each case except in instances of gross negligence or willful misconduct on the part of our affiliated managers or Costamare Services.

Competition

We operate in markets that are highly competitive and based primarily on supply and demand. Generally, we compete for charters based upon charter rate, customer relationships, operating expertise, professional reputation and containership specifications, size, age and condition. Competition for providing containership services comes from a number of experienced shipping companies, including state-sponsored entities. In addition, in recent years, there have been other entrants in the market, such as leasing companies and private equity firms who have significant capital to invest in vessel ownership, which has provided for additional competition in the sector.

Participants in the container shipping industry include “liner” shipping companies, who operate container shipping services and own containerships, containership owners, often known as “charter owners”, who own containerships and charter them out to liner companies, and shippers who require the seaborne movement of containerized goods. Historically, a significant share of the world’s containership capacity has been owned by the liner companies, but since the 1990s there has been an increasing trend for the liner companies to charter-in a larger proportion of the capacity that they operate as a way of retaining some degree of flexibility with regard to capital spending levels over time given the significant costs associated with purchasing vessels.

We believe that the containership sector of the international shipping industry is characterized by the significant time required to develop the operating expertise and professional reputation necessary to obtain and retain customers. We believe that our development of a large fleet of containerships with varying TEU capacities has enhanced our relationship with our principal charterers by enabling them to serve the East-West, North-South and Intra-regional trade routes efficiently, while enabling us to operate in the different rate environments prevailing for those routes. We also believe that our focus on customer service and reliability enhances our relationships with our charterers. In the past decade, we have had successful chartering relationships with the majority of the top 20 liner companies by TEU capacity.

In the past, we have been able to address the periodic scarcity of secondhand containerships available for acquisition in the open market though the acquisition of containerships mainly from our liner company customers in privately negotiated sales. In connection with these acquisitions, we then typically charter back the vessels to these customers. We believe we have been able to pursue these privately negotiated acquisitions because of our long-standing customer relations, which we do not believe new entrants have. We also believe that our focus on customer service and reliability will enhance our relationships with charterers.

Crewing and Shore Employees

service onboard the containerships in our fleet. Costamare Shipping, Costamare Services and Shanghai Costamare each employed approximately 100, 10 and 30 people, respectively, all of whom were shore-based. In addition, our affiliated managers are responsible for recruiting, either directly or through a crewing agent, the senior officers and all other crew members for our containerships that they manage. Recruiting is arranged directly through our managers’ crewing offices in Athens, Greece and Shanghai, China, and indirectly through our related crewing agent, C-Man Maritime, in the Philippines, and independent manning agents in Romania and Bulgaria. The senior officers and other crew members for our containerships managed by V.Ships Greece are arranged in part through C-Man Maritime and in part through V.Ships Greece (which utilizes the global V.Group network) under the Co-operation Agreement. We believe the streamlining of crewing arrangements through our managers ensures that all of our vessels will be crewed with experienced crews that have the qualifications and licenses required by international regulations and shipping conventions. We have not experienced any material work stoppages due to labor disagreements during the past three years.

Permits and Authorizations

We are required by various governmental and other agencies to obtain certain permits, licenses, certificates and financial assurances with respect to each of our vessels. The kinds of permits, licenses, certificates and financial assurances required by governmental and other agencies depend upon several factors, including the commodity being transported, the waters in which the vessel operates, the nationality of the vessel’s crew and the type and age of the vessel. All permits, licenses, certificates and financial assurances currently required to operate our vessels have been obtained (exclusive of cargo- specific documentation, for which charterers or shippers are responsible). Additional laws and regulations, environmental or otherwise, may be adopted which could limit our ability to do business or increase the cost of doing business.

Risk of Loss and Liability Insurance

General

The operation of any vessel includes risks such as mechanical failure, collision, property loss or damage, cargo loss or damage and business interruption due to a number of reasons, including political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental mishaps, as well as other liabilities arising from owning and operating vessels in international trade. The U.S. Oil Pollution Act of 1990 (“OPA 90”), which imposes under certain circumstances, unlimited liability upon owners, operators and demise charterers of vessels trading in the United States exclusive economic zone for certain oil pollution accidents in the United States, has made liability insurance more expensive for ship-owners and operators trading in the United States market.

We maintain hull and machinery marine risks insurance and hull and machinery war risks insurance for our fleet of containerships to cover normal risks in our operations and in amounts that we believe to be prudent to cover such risks. In addition, we maintain protection and indemnity insurance up to the maximum insurable limit available at any given time. While we believe that our insurance coverage will be adequate, not all risks can be insured, and there can be no guarantee that we will always be able to obtain adequate insurance coverage at reasonable rates or at all, or that any specific claim we may make under our insurance coverage will be paid. In addition, our insurers may not be contractually obligated or may be prohibited from posting security or covering costs or losses associated with certain incidents (for example, casualties in sanctioned locations like Iran).

Hull & Machinery Marine Risks Insurance, Hull & Machinery War Risks Insurance and Loss of Hire Insurance

We maintain hull and machinery marine risks insurance and hull and machinery war risks insurance, which cover the risk of particular average, general average, 4/4ths collision liability, contact with fixed and floating objects and actual or constructive total loss in accordance with the

Nordic Marine Insurance Plan. Each of our containerships is insured up to what we believe to be at least its fair market value, after meeting certain deductibles.

We do not and will not obtain loss of hire insurance (or any other kind of business interruption insurance) covering the loss of revenue during off-hire periods for any of our vessels because we believe that this type of coverage is not economical and is of limited value to us, in part because historically our vessels have had a very limited number of off-hire days.

Protection and Indemnity Insurance—Pollution Coverage

Protection and indemnity insurance is usually provided by a protection and indemnity association (a “P&I association”) and covers third-party liability, crew liability and other related expenses resulting from the injury or death of crew, passengers and other third parties, the loss or damage to cargo, third-party claims arising from collisions with other vessels (to the extent not recovered by the hull and machinery policies), damage to other third-party property, pollution arising from oil or other substances and salvage, towing and other related costs, including wreck removal.

Our protection and indemnity insurance is provided by a P&I association which is a member of the International Group of P&I Clubs (“International Group”). The 13 P&I associations that comprise the International Group insure approximately 90% of the world’s commercial blue-water tonnage and have entered into a pooling agreement to reinsure each association’s liabilities. Insurance provided by a P&I association is a form of mutual indemnity insurance.

Our protection and indemnity insurance coverage is currently subject to a limit of about $5 billion per vessel per incident except that for pollution the limit is set at $1 billion per vessel per incident, and for war risks the limit is set at $500 million per vessel per incident.

As a member of a P&I association, which is a member of the International Group, we will be subject to calls payable to the P&I association based on the International Group’s claim records as well as the claim records of all other members of the P&I association of which we are a member.

On October 5, 2011, our vessel Rena ran aground on the Astrolabe Reef off New Zealand and sustained significant damage. The vessel was determined to be a constructive total loss for insurance purposes. On October 1, 2012, we announced that Daina Shipping Co., our subsidiary that owned the Rena, entered into a settlement agreement with the New Zealand government in respect of certain matters arising from the Rena’s grounding. On October 26, 2012, Daina Shipping Co. pleaded guilty in a New Zealand court to a strict liability criminal charge of discharging harmful substances and was fined NZ$300,050. While we anticipate that our insurance policies will cover most costs and losses associated with the incident, such insurance may not be sufficient to cover all risks.

Inspection by Classification Societies

Every seagoing vessel must be “classed” by a classification society. The classification society certifies that the vessel is “in class”, signifying that the vessel has been built and maintained in accordance with the rules of the classification society and complies with applicable rules and regulations of the vessel’s country of registry and the international conventions of which that country is a member. In addition, where surveys are required by international conventions and corresponding laws and ordinances of a flag state, the classification society will undertake them on application or by official order, acting on behalf of the authorities concerned.

The classification society also undertakes on request other surveys and checks that are required by regulations and requirements of the flag state. These surveys are subject to agreements made in each individual case and/or to the regulations of the country concerned.

For maintenance of the class, regular and extraordinary surveys of hull and machinery, including the electrical plant and any special equipment classed, are required to be performed as follows:

Annual Surveys. For seagoing ships, annual surveys are conducted for the hull and the machinery, including the electrical plant, and where applicable, on special equipment classed at

intervals of 12 months from the date of commencement of the class period indicated in the certificate.

Intermediate Surveys. Extended annual surveys are referred to as intermediate surveys and typically are conducted two and one-half years after commissioning and each class renewal. Intermediate surveys may be carried out on the occasion of the second or third annual survey.

Class Renewal Surveys. Class renewal surveys, also known as special surveys, are carried out on the ship’s hull and machinery, including the electrical plant, and on any special equipment classed at the intervals indicated by the character of classification for the hull. During the special survey, the vessel is thoroughly examined, including audio-gauging to determine the thickness of the steel structures. Should the thickness be found to be less than class requirements, the classification society would prescribe steel renewals. The classification society may grant a one-year grace period for completion of the special survey. Substantial amounts of funds may have to be spent for steel renewals to pass a special survey if the vessel experiences excessive wear and tear. In lieu of the special survey every four or five years, depending on whether a grace period is granted, a ship-owner has the option of arranging with the classification society for the vessel’s hull or machinery to be on a continuous survey cycle, in which every part of the vessel would be surveyed within a five-year cycle. At a ship-owner’s application, the surveys required for class renewal may be split according to an agreed schedule to extend over the entire period of class. This process is referred to as continuous class renewal. All areas subject to surveys as defined by the classification society are required to be surveyed at least once per class period, unless shorter intervals between surveys are otherwise prescribed. The period between two consecutive surveys of each area must not exceed five years.

All vessels are also dry-docked at least once every five years for inspection of their underwater parts and for repairs related to such inspections. If any defects are found, the classification surveyor will issue a “recommendation” which must be rectified by the ship-owner within prescribed time limits.

Insurance underwriters make it a condition for insurance coverage that a vessel be certified as “in class” by a classification society which is a member of the International Association of Classification Societies (“IACS”). All of our vessels are certified as being “in class” by members of IACS.

The following table lists the dates by which we expect to carry out the next dry-dockings and special surveys for the vessels in our current vessel fleet:

Dry-docking Schedule ⁽¹⁾


	2016		2017		2018		2019		2020
Number of vessels		8		7		18		13		14

⁽¹⁾

Excludes the 12 newbuild vessels that we have agreed to acquire pursuant to the Framework Deed with York.

Environmental and Other Regulations

Government regulation affects the ownership and operation of our vessels in a significant manner. We are subject to international conventions and national, port state and local laws and regulations applicable to international waters and/or territorial waters of the countries in which our vessels may operate or are registered, including those governing the management and disposal of hazardous substances and wastes, the cleanup of oil spills and the management of other contamination, air emissions, and grey water and ballast water discharges. These laws and regulations include OPA 90, the U.S. Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), the U.S. Clean Water Act (“CWA”), the U.S. Clean Air Act (“CAA”) and regulations adopted by the IMO, including the International Convention for Prevention of Pollution from Ships (“MARPOL”) and the International Convention for Safety of Life at Sea (“SOLAS”), as well as regulations enacted by the European Union and other international, national and local regulatory bodies. Compliance with these laws, regulations and other requirements entails

significant expense, including vessel modifications and implementation of certain operating procedures.

A variety of governmental and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities Port State Control (such as the U.S. Coast Guard, harbor master or equivalent), classification societies, flag state administration (country of registry) and charterers. Certain of these entities require us to obtain permits, licenses, financial assurances and certificates for the operation of our vessels. Failure to maintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of operation of one or more of our vessels in one or more ports.

We believe that the heightened level of environmental and quality concerns among insurance underwriters, regulators and charterers is leading to greater inspection and safety requirements for all vessels and may accelerate the scrapping of older vessels throughout the container shipping industry. Increasing environmental concerns have created a demand for vessels that conform to the strictest environmental standards. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with U.S. and international regulations. Our affiliated managers and V.Ships Greece are certified in accordance with ISO 9001-2008 and ISO 14001-2004 (relating to quality management and environmental standards, respectively). We believe that operation of our vessels are in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses, certificates and other authorizations necessary for their operation.

Our containerships are subject to standards imposed by the IMO, the United Nations agency for maritime safety and the prevention of pollution by ships. The IMO has adopted regulations that are designed to reduce pollution in international waters, both from accidents and from routine operations, and has negotiated international conventions that impose liability for oil pollution in international waters and a signatory’s territorial waters. For example, Annex VI to MARPOL, which became effective on May 19, 2005, sets limits on sulfur oxide and nitrogen oxide emissions from vessel exhausts and prohibits deliberate emissions of ozone depleting substances, such as chlorofluorocarbons. Annex VI also includes a global cap on the sulfur content of fuel oil. In addition, amendments to Annex VI that entered into force in July 2010 seek to reduce air pollution from vessels by, among other things, establishing a series of progressive requirements to further limit the sulfur content of fuel oil that will be phased in through 2020 and by establishing new tiers of nitrogen oxide emission standards for new marine diesel engines, depending on their date of installation. Annex VI also provides for the establishment of special areas, known as Emission Control Areas, where more stringent controls on sulphur and other emissions apply. Currently, the Baltic Sea, the North Sea, certain coastal areas of North America and the U.S. Caribbean Sea are within designated Emission Control Areas, and additional Emission Control Areas could be established in the future. All our existing containerships are generally compliant with current Annex VI requirements. However, if new Emission Control Areas are approved by the IMO or other new or more stringent air emission requirements are adopted by the IMO or the states where we expect to operate, compliance with these requirements could entail significant additional capital expenditures, operational changes or otherwise increase the costs of our operations.

The International Convention on Civil Liability for Bunker Oil Pollution Damage (the “Bunker Convention”), which became effective in November 2008, imposes strict liability on vessel owners for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention also requires registered owners of vessels over 1,000 gross tons to maintain insurance in specified amounts to cover liability for bunker fuel pollution damage. Each of our containerships has been issued a certificate attesting that insurance is in force in accordance with the Bunker Convention. In 2004, the IMO also adopted the International Convention for the Control and Management of Ships’ Ballast Water and Sediments (the “BWM Convention”). The BWM Convention’s implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits. The BWM Convention will not enter into force until 12 months after it has been ratified by 30 states, the combined merchant fleets of which represent not less than 35% of the gross tonnage of the world’s

merchant shipping. As of March 8, 2016, the date of the most recent related IMO report, 49 countries representing 34.82% of the world’s shipping tonnage had ratified the BWM Convention.

The operation of our vessels is based on the requirements set forth in the ISM Code. The ISM Code requires vessel managers to develop and maintain an extensive SMS that includes the adoption of a safety and environmental protection policy, sets forth instructions and procedures for safe vessel operation and describes procedures for dealing with emergencies. The ISM Code requires that vessel operators obtain a SMC for each vessel they operate from the government of the vessel’s flag state. The certificate verifies that the vessel operates in compliance with its approved SMS. No vessel can obtain a certificate unless the flag state has issued a document of compliance with the ISM Code to the vessel’s manager. Failure to comply with the ISM Code may lead to withdrawal of the permit to manage or operate the vessels, subject such party to increased liability, decrease or suspend available insurance coverage for the affected vessels, or result in a denial of access to, or detention in, certain ports. Each of the container ships in our fleet and each of our affiliated managers and third party managers are ISM Code-certified.

United States Requirements

OPA 90 established an extensive regulatory and liability regime for the protection of the environment from oil spills and cleanup of oil spills. OPA 90 applies to discharges of any oil from a vessel, including discharges of fuel and lubricants. OPA 90 affects all owners and operators whose vessels trade in the United States, its territories and possessions or whose vessels operate in U.S. waters, which include the United States’ territorial sea and its two hundred nautical mile exclusive economic zone. While we do not carry oil as cargo, we do carry fuel in our containerships, making them subject to the requirements of OPA 90.

Under OPA 90, vessel owners, operators and bareboat charterers are “responsible parties” and are jointly, severally and strictly liable (unless the discharge of pollutants results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges, of pollutants from their vessels, including bunkers. OPA 90 defines these other damages broadly to include:

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natural resource damages and the costs of assessment thereof;

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real and personal property damage;

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net loss of taxes, royalties, rents, fees and other lost revenues;

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lost profits or impairment of earning capacity due to property or natural resource damages; and

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net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources.

OPA 90 preserves the right to recover damages under other existing laws, including maritime tort law.

U.S. Coast Guard regulations limit OPA 90 liability to the greater of $1,000 per gross ton or $854,400 per incident for non-tank vessels, subject to periodic adjustments of such limits. These limits of liability do not apply if an incident was directly caused by violation of applicable U.S. safety, construction or operating regulations or by a responsible party’s gross negligence or willful misconduct, or if the responsible party fails or refuses to report the incident or to cooperate and assist in connection with oil removal activities.

CERCLA applies to spills or releases of hazardous substances other than petroleum or petroleum products whether on land or at sea. CERCLA imposes joint and several liability, without regard to fault, on the owner or operator of a vessel, vehicle or facility from which there has been a release, along with other specified parties. Costs recoverable under CERCLA include cleanup and removal costs, natural resource damages and governmental oversight costs. Liability under CERCLA is generally limited to the greater of $300 per gross ton or $5.0 million for vessels carrying any hazardous substances, such as cargo or residue, or $0.5 million for any other vessel, per release of or incident involving hazardous substances. These limits of liability do not apply if the incident is

caused by gross negligence, willful misconduct or a violation of certain regulations, in which case liability is unlimited.

All owners and operators of vessels over 300 gross tons are required to establish and maintain with the U.S. Coast Guard evidence of financial responsibility sufficient to meet their potential liabilities under OPA 90 and CERCLA. Under the U.S. Coast Guard regulations, vessel owners and operators may evidence their financial responsibility by providing proof of insurance, surety bond, guarantee, letter of credit or self-insurance. An owner or operator of a fleet of vessels is required only to demonstrate evidence of financial responsibility in an amount sufficient to cover the vessel in the fleet having the greatest maximum liability under OPA 90 and CERCLA. Under the self-insurance provisions, the vessel owner or operator must have a net worth and working capital, measured in assets located in the United States against liabilities located anywhere in the world, that exceeds the applicable amount of financial responsibility.

The U.S. Coast Guard’s regulations concerning certificates of financial responsibility provide, in accordance with OPA 90, that claimants may bring suit directly against an insurer or guarantor that furnishes certificates of financial responsibility. In the event that such insurer or guarantor is sued directly, it is prohibited from asserting any contractual defense that it may have had against the responsible party and is limited to asserting those defenses available to the responsible party and the defense that the incident was caused by the willful misconduct of the responsible party. Certain organizations, which had typically provided certificates of financial responsibility under pre-OPA 90 laws, including the major P&I associations, have declined to furnish evidence of insurance for vessel owners and operators if they are subject to direct actions or required to waive insurance policy defenses. This requirement may have the effect of limiting the availability of the type of vessel coverage required by the U.S. Coast Guard and could increase our costs of obtaining this insurance for our fleet, as well as the costs of our competitors that also require such coverage.

OPA 90 specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, and some states have enacted legislation providing for unlimited liability for oil spills. In some cases, states which have enacted such legislation have not yet issued implementing regulations defining vessels owners’ responsibilities under these laws. We intend to comply with all applicable state regulations in the ports where our vessels call.

We will maintain, for each of our containerships, oil pollution liability coverage insurance in the amount of $1.0 billion per vessel per incident. In addition, we carry hull and machinery and protection and indemnity insurance to cover the risks of fire and explosion. Although our containerships will only carry bunker fuel, a spill of oil from one of our vessels could be catastrophic under certain circumstances. Losses as a result of fire or explosion could also be catastrophic under some conditions. While we believe that our present insurance coverage is adequate, not all risks can be insured, and if the damages from a catastrophic spill exceeded our insurance coverage, the payment of those damages could have an adverse effect on our business or the results of our operations.

Title VII of the Coast Guard and Maritime Transportation Act of 2004 (the “CGMTA”) amended OPA 90 to require the owner or operator of any non-tank vessel of 400 gross tons or more that carries oil of any kind as a fuel for main propulsion, including bunker fuel, to prepare and submit a response plan for each vessel. These vessel response plans include detailed information on actions to be taken by vessel personnel to prevent or mitigate any discharge or substantial threat of such a discharge of oil from the vessel due to operational activities or casualties. Where required, each of our containerships has an approved response plan.

The CWA prohibits the discharge of oil or hazardous substances in navigable waters and imposes liability in the form of penalties for any unauthorized discharges. It also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under the more recently enacted OPA 90 and CERCLA, discussed above. The U.S. Environmental Protection Agency (the “EPA”) regulates the discharge of ballast water and other substances under the CWA. EPA regulations require vessels 79 feet in length or longer (other than commercial fishing vessels) to obtain coverage under a Vessel General Permit (“VGP”) authorizing discharges of

ballast waters and other wastewaters incidental to the operation of vessels when operating within the three-mile territorial waters or inland waters of the United States. The VGP requires vessel owners and operators to comply with a range of best management practices and reporting and other requirements for a number of incidental discharge types. The current VGP, which became effective in December 2013 and will expire in December 2018, contains stringent requirements, including numeric ballast water discharge limits (that generally align with the most recent U.S. Coast Guard standards issued in 2012), requirements to ensure that the ballast water treatment systems are functioning correctly, and more stringent effluent limits for oil to sea interfaces and exhaust gas scrubber wastewater. We have obtained coverage under the current version of the VGP for all of our containerships that operate in U.S. waters. We do not believe that any material costs associated with meeting the requirements under the VGP will be material.

U.S. Coast Guard regulations adopted under the 1996 U.S. National Invasive Species Act (“NISA”) also impose mandatory ballast water management practices for all vessels equipped with ballast water tanks entering or operating in U.S. waters. Amendments to these regulations, which became effective in June 2012, established maximum acceptable discharge limits for various invasive species and/or requirements for active treatment of ballast water. The U.S. Coast Guard ballast water standards are consistent with requirements under the BWM Convention. Several states, including Michigan and California, have adopted legislation or regulations relating to the permitting and management of ballast water discharges. California has extended its ballast water management program to the regulation of “hull fouling” organisms attached to vessels and adopted regulations limiting the number of organisms in ballast water discharges. Other states could adopt similar requirements that could increase the costs of operation in state waters.

The EPA has adopted standards under the CAA that pertain to emissions from vessel vapor control and recovery and other operations in regulated port areas and emissions from model year 2004 and later large marine diesel engines. Several states also regulate emissions from vapor control and recovery under authority of State Implementation Plans adopted under the CAA. On April 30, 2010, the EPA promulgated regulations that impose more stringent standards for emissions of particulate matter, sulfur oxides and nitrogen oxides from new Category 3 marine diesel engines on vessels constructed on or after January 1, 2016 and registered or flagged in the U.S. and implement the new MARPOL Annex VI requirements for U.S. and foreign flagged ships entering U.S. ports or operating in U.S. internal waters. The EPA is also considering a petition from a number of environmental groups that requests the EPA to impose more stringent emissions limits on foreign-flagged vessels operating in U.S. waters. California has adopted emission limits for auxiliary diesel engines of ocean-going vessels operating within 24 miles of the California coast and requires operators to use low sulfur content fuel. If new or more stringent regulations relating to emissions from marine diesel engines or port operations by ocean-going vessels are adopted by the EPA or states, these requirements could require significant capital expenditures or otherwise increase the costs of our operations.

European Union Requirements

The European Union has also adopted legislation that (1) requires member states to refuse access to their ports to certain sub-standard vessels, according to vessel type, flag and number of previous detentions, (2) obliges member states to inspect at least 25% of foreign vessels using their ports annually and provides for increased surveillance of vessels posing a high risk to maritime safety or the marine environment, (3) provides the European Union with greater authority and control over classification societies, including the ability to seek to suspend or revoke the authority of negligent societies and (4) requires member states to impose criminal sanctions for certain pollution events, such as the unauthorized discharge of tank washings.

Other Regional Requirements

The environmental protection regimes in certain other countries, such as Canada, resemble those of the United States. To the extent we operate in the territorial waters of such countries or enter their ports, our containerships would typically be subject to the requirements and liabilities

imposed in such countries. Other regions of the world also have the ability to adopt requirements or regulations that may impose additional obligations on our containerships and may entail significant expenditures on our part and may increase the costs of our operations. These requirements, however, would apply to the industry operating in those regions as a whole and would also affect our competitors.

Greenhouse Gas Regulations

Currently, emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which entered into force in 2005 and required adopting countries to implement national programs to reduce greenhouse gas emissions. The Kyoto Protocol was extended to 2020 at the 2012 United Nations Climate Change Conference, with the hope that a new climate change treaty would be adopted by 2015 and enter into force by 2020.

International or multinational bodies or individual countries may adopt climate change initiatives. For example, the Marine Environment Protection Committee (“MEPC”) of the IMO adopted two new sets of mandatory requirements to address greenhouse gas emissions from ships at its July 2011 meeting. The Energy Efficiency Design Index requires a minimum energy efficiency level per capacity mile and is applicable to new vessels, and the Ship Energy Efficiency Management Plan is applicable to currently operating vessels. The requirements entered into force in January 2013 and could cause us to incur additional compliance costs. The IMO is also considering the development of a market-based mechanism for greenhouse gas emissions from ships, but it is difficult to accurately predict the likelihood that such a standard might be adopted or its potential impact on our operations at this time.

In June 2013, the European Commission developed a strategy to integrate maritime emissions into the overall European Union Strategy to reduce greenhouse gas emissions. If the strategy is adopted by the European Parliament and Council, large vessels entering European Union ports would be required to monitor, report and verify their carbon dioxide emissions beginning in January 2018. In December 2013, the European Union environmental ministers discussed draft rules to implement monitoring and reporting of carbon dioxide emissions from ships. In the United States, the EPA has issued a finding that greenhouse gases endanger the public health and safety and has adopted regulations under the CAA to limit greenhouse gas emissions from certain mobile sources and proposed regulations to limit greenhouse gas emissions from large stationary sources. Although the mobile source emissions do not apply to greenhouse gas emissions from ships, the EPA may, in the future, decide to regulate greenhouse gas emissions from ocean-going vessels. Any passage of climate control legislation or other regulatory initiatives by the IMO, the European Union, the United States or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol, that restrict emissions of greenhouse gases could require us to make significant financial expenditures that we cannot predict with certainty at this time. Even in the absence of climate control legislation and regulations, our business and operations may be materially affected to the extent that climate change results in sea level changes or more intense weather events.

The State of California has mandated that ships, instead of relying on their shipboard power, must use shore power while breathed through a process known as Cold Ironing or Alternative Maritime Power. The regulation was phased in starting in 2014. Our vessels, which are affected by the State of California regulations, have or will have the necessary installation. It is expected that the cost of modifications needed for older vessels will be borne in part by the charterers of each vessel, but it is difficult to predict the exact impact on our operations.

Vessel Security Regulations

A number of initiatives have been introduced in recent years intended to enhance vessel security. On November 25, 2002, the Maritime Transportation Security Act of 2002 (the “MTSA”) was signed into law. To implement certain portions of the MTSA, the U.S. Coast Guard issued regulations in July 2003 requiring the implementation of certain security requirements aboard vessels

operating in waters subject to the jurisdiction of the United States. Similarly, in December 2002, amendments to SOLAS created a new chapter of the convention dealing specifically with maritime security. This new chapter came into effect in July 2004 and imposes various detailed security obligations on vessels and port authorities, most of which are contained in the newly created ISPS Code. Among the various requirements are:

•

on-board installation of automatic information systems to enhance vessel-to-vessel and vessel-to-shore communications;

•

on-board installation of ship security alert systems;

•

the development of ship security plans; and

•

compliance with flag state security certification requirements.

The U.S. Coast Guard regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures; provided such vessels have on board a valid “International Ship Security Certificate” that attests to the vessel’s compliance with SOLAS security requirements and the ISPS Code. We have implemented the various security measures required by the IMO, SOLAS and the ISPS Code and have approved ISPS certificates and plans certified by the applicable flag state on board all our containerships.

C. Organizational Structure

Costamare Inc. is a holding company incorporated in the Republic of The Marshall Islands which, as of April 20, 2016, has 92 subsidiaries, 87 of which are incorporated in Liberia and 5 which are incorporated in the Republic of The Marshall Islands. Of our Liberian subsidiaries, 54 either own vessels in our fleet or are parties to contracts to obtain newbuild vessels and the remaining subsidiaries are dormant. Our subsidiaries are wholly-owned by us. A list of our subsidiaries as of April 20, 2016 is set forth in Exhibit 8.1 to this annual report.

D. Property, Plant and Equipment

We have no freehold or material leasehold interest in any real property. We occupy office space at 7 Rue du Gabian, MC 98000 Monaco. Other than our vessels, we do not have any material property. Our vessels are subject to priority mortgages, which secure our obligations under our various credit facilities. For further details regarding our credit facilities, refer to “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities”.

ITEM 4.A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this annual report. This discussion includes forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report, our actual results may differ materially from those anticipated in these forward-looking statements. Please see the section “Forward-Looking Statements” at the beginning of this annual report.

Overview

We are an international owner of containerships, chartering our vessels to many of the world’s largest liner companies. As of April 20, 2016, we had a fleet of 72 containerships aggregating in excess of 467,000 TEU, including 12 newbuilds on order, making us one of the largest public containership companies in the world based on total TEU capacity. At that date, our fleet consisted of (i) 60 vessels in the water, aggregating approximately 333,000 TEU and (ii) 12 newbuild vessels aggregating approximately 134,000 TEU that are scheduled to be delivered to us through the second quarter of 2018, based on the current shipyard schedule. As of December 31, 2015, 18 of our containerships, including 12 newbuilds, had been acquired pursuant to the Framework Deed with York by vessel-owning joint venture entities in which we hold a minority equity interest. See “Item 4. Information on the Company—B. Business Overview—Our Fleet, Acquisitions and Newbuild Vessels”.

Our strategy is to deploy our containerships on long-term, fixed-rate time charters to take advantage of the stable cash flows and high utilization rates typically associated with long-term time charters. Time-chartered containerships are generally employed on long-term charters to liner companies that charter-in vessels on a long-term basis as part of their business strategies.

As of April 20, 2016, the average (weighted by TEU capacity) remaining time-charter duration for our fleet of 72 containerships was approximately 3.7 years, based on the remaining fixed terms and assuming the exercise of any owner’s options and the non-exercise of any charterer’s options under our containerships’ charters. As of December 31, 2015, our fixed-term charters represented an aggregate of $1.7 billion of contracted revenue, assuming the earliest redelivery dates possible and 365 revenue days per annum per containership (which amount includes our ownership percentage of contracted revenue for the existing Joint Venture vessels). See the table entitled “Contracted Revenue and Days From Time Charters as of December 31, 2015” in “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Results of Operations—Voyage Revenue”. As of April 20, 2016, our fixed-term charters represented an aggregate of $1.8 billion of contracted revenue, assuming the earliest redelivery dates possible and 365 revenue days per annum per containership (which amount includes our ownership percentage of contracted revenue for the existing Joint Venture vessels (currently $395.4 million)) and the exercise of the owner’s unilateral extension options. Ten of these charters include an option exercisable by either party to extend their term: five vessels for two one-year periods at the same charter rate, which represents an additional $152.2 million of potential contracted revenue, and five Joint Venture vessels for a three-year period and a subsequent two-year period at the same charter rate, which represents an additional $170.5 million of potential contracted revenue that is attributable to our share of the relevant vessel-owning entities. In addition, we have charters for two wholly-owned vessels, which include an option to extend the charters for subsequent one-year periods at market rate plus $1,100 per vessel per day. See “Item 4. Information on the Company—B. Business Overview—Our Fleet, Acquisitions and Newbuild Vessels—Our Fleet”.

The table below provides additional information about the charter coverage for our fleet of containerships as of December 31, 2015. Except as indicated in the footnotes, it does not reflect events occurring after that date, including any charter contract we entered into after that date. It excludes all days attributable to the operation of the vessels purchased pursuant to the Framework Deed which includes five vessels in the water and 12 newbuilds on order and one secondhand vessel to be delivered. The table assumes the earliest redelivery dates possible under our containerships’

charters. See “Item 4. Information on the Company—B. Business Overview—Our Fleet, Acquisitions and Newbuild Vessels”.



	2016			2017			2018			2019			2020			2021			2022			2023			2024

No. of Vessels whose Charters Expire ⁽¹⁾		22	⁽²⁾		7			16			1			2			1			—			3			2

TEU of Expiring Charters		78,110			40,649			126,496			6,644			13,288			6,724			—			27,057			18,806

Contracted Days		15,030			10,669			5,568			3,238			2,358			2,084			1,825			1,150			108

Available Days		4,734			9,041			13,412			15,742			16,674			15,071			14,965			15,640			16,728

Contracted/Total Days ⁽³⁾		76.0	%		54.1	%		29.3	%		17.1	%		12.4	%		12.1	%		10.9	%		6.8	%		0.6	%

⁽¹⁾

This excludes all vessels purchased pursuant to the Framework Deed.

⁽²⁾

Includes three vessels which, as of December 31, 2015, had no employment. One such vessel was undergoing repairs at that time.

⁽³⁾

Total days are calculated on the assumption that the vessels will continue trading until the age of 30 years old, unless the vessel will exceed 30 years of age at the expiry of its current time charter, in which case we assume that the vessel continues trading until that expiry date.

Our containership fleet is currently under time charters with nine different charterers. For the three years ended December 31, 2015, our largest customers by revenue were A.P. Moller-Maersk, MSC, Evergreen, Hapag Lloyd and COSCO; together these five customers represented 93%, 94% and 95% of our revenue in 2013, 2014 and 2015, respectively.

We dry-dock our vessels when the next survey (dry-dock survey or special survey) is scheduled to become due, ranging from 30 to 60 months. We have dry-docked 29 vessels over the past 3 years, and we plan to dry-dock eight vessels in 2016 and seven vessels in 2017. Information about our fleet dry-docking schedule through 2016 is set forth in a table in “Item 4. Information on the Company—B. Business Overview—Risk of Loss and Liability Insurance—Inspection by Classification Societies”.

Our Managers and Service Providers

Costamare Shipping provides us with general administrative services and certain commercial services as well as technical, commercial, insurance, accounting, provisioning, sale and purchase, chartering, crewing, bunkering and administrative services in respect of our containerships pursuant to the Framework Agreement. Costamare Services provides our vessel-owning subsidiaries with crewing, commercial and administrative services pursuant to the Services Agreement. In the event that Costamare Shipping or Costamare Services decide to delegate certain or all of the services they have agreed to perform under the Framework Agreement or the Services Agreement, respectively, either through (i) subcontracting to a sub-manager or sub-provider or (ii) by directing such sub-manager or sub-provider to enter into a direct agreement with the relevant vessel-owning subsidiary, then, in the case of subcontracting under (i), Costamare Shipping or Costamare Services, as applicable, will be responsible for paying the fee charged by the relevant sub-manager or sub-provider for providing such services and, in the case of a direct agreement under (ii), the fee received by Costamare Shipping or Costamare Services, as applicable, will be reduced by the fee payable to the sub-manager or sub-provider under the relevant direct agreement. As a result, these arrangements will not result in any increase in the aggregate management fees and services fees that we pay. Moreover, in the case of the Co-operation Agreement, the management fees we pay are reduced by any net profit received by Costamare Shipping from the Cell’s operation. In addition to management fees, we pay for any capital expenditures, financial costs, operating expenses and any general and administrative expenses, including payments to third parties, including specialist providers, in accordance with the Framework Agreement and the relevant separate ship-management agreements or supervision agreements. Our chairman and chief executive officer and our chief financial officer supervise, in conjunction with our board of directors, the services provided by our managers and Costamare Services. Costamare Shipping received in 2015 and continues to receive in 2016 a fee of $956 per day or, in the case of a containership subject to a bareboat charter, $478 per day, for each containership, pro rated for the calendar days we own each containership. In 2014, such amounts were $919 and $460, respectively. We also paid to Costamare Shipping in 2015 and

continue to pay in 2016 a flat fee of $787,405 per newbuild vessel for the supervision of the construction of any newbuild vessel that we may contract. Costamare Shipping also received in the first three quarters of 2015 a monthly fee of 0.75% on all gross freight, demurrage, charter hire and ballast bonus or other income earned with respect to each containership in our fleet until the third quarter of 2015. Starting in the fourth quarter of 2015, Costamare Shipping received, and continues to receive, a fee of 0.15% on all gross freight, demurrage, charter hire and ballast bonus or other income earned with respect to each containership in our fleet. Costamare Shipping received for the first three quarters of 2015, a quarterly fee of (i) $625,000 ($2.5 million annually) and (ii) 149,600 shares (which is equal to 0.2% of the issued and outstanding Costamare common stock as of January 1, 2015), which fee included payment for the services of our executive officers (prior to 2015, we paid Costamare Shipping $1.0 million annually for such services). Starting in the fourth quarter of 2015 Costamare Services received and continues to receive from our container-shipowning subsidiaries a monthly fee of 0.60% on all gross freight, demurrage, charter hire and ballast bonus or other income earned with respect to each containership in our fleet and a quarterly fee of (i) $625,000 and (ii) an amount equal to the value of 149,600 shares (0.2% of the issued and outstanding Costamare common stock as of January 1, 2015), based on the average closing price of our common stock on the NYSE for the ten days ending on the thirtieth day of the last month of each quarter; provided that Costamare Services may elect to receive 149,600 shares instead of the fee under (ii). We have reserved a number of shares of common stock to cover the fees to be paid to Costamare Services under (ii) through December 31, 2020. During the year ended December 31, 2014 and December 31, 2015, Costamare Shipping charged in aggregate to the companies established pursuant to the Framework Deed $1.57 million and $1.86 million, respectively, for services provided in accordance with the relevant management agreements. For the year ended December 31, 2015 we paid aggregate fees of approximately $5.07 million and issued in aggregate 448,800 shares to Costamare Shipping under the Group Management Agreement and the Framework Agreement and paid aggregate fees of approximately $1.11 million and issued in aggregate 149,600 shares to Costamare Services under the Services Agreement.

the Services Agreement, in each case except in instances of gross negligence or willful misconduct on the part of our affiliated managers or Costamare Services.

Costamare Shipping is providing management services to the Joint Venture vessels under separate management agreements with each vessel-owning entity formed under the Framework Deed pursuant to which Costamare Shipping provides technical, crew, crew insurance, commercial, general and administrative and insurance services directly or through Shanghai Costamare or V.Ships Greece as sub-managers, provided that Shanghai Costamare or V.Ships Greece may be directed to enter into a direct management agreement with each vessel-owning entity and, in respect of the newbuild vessels under construction, into a supervision agreement with the respective vessel-owning entity. During the year ended December 31, 2015, Costamare Shipping charged in aggregate to the companies established pursuant to the Framework Deed the amount of $1.86 million for services provided in accordance with the respective management agreements.

A. Operating Results

Factors Affecting Our Results of Operations

Our financial results are largely driven by the following factors:

•

Number of Vessels in Our Fleet. The number of vessels in our fleet is a key factor in determining the level of our revenues. Aggregate expenses also increase as the size of our fleet increases. Vessel acquisitions and dispositions give rise to gains and losses and other onetime items. During 2007 and 2008, we increased the number of vessels in our fleet so that on October 31, 2008 our fleet consisted of 53 containerships. Thereafter, from 2009 through the first half of 2010, in response to the global economic recession, we reduced our fleet through dispositions to 41 vessels. Beginning in the second half of 2010, when the market started to recover and vessel prices were at an attractive point, we have substantially grown our fleet to a total of 72 vessels as of April 20, 2016, including 12 newbuild vessels on order. Eighteen of our containerships, including 12 newbuilds, have been acquired pursuant to the Framework Deed with York by vessel-owning joint venture entities in which we hold a minority equity interest.

•

Charter Rates. The charter rates we obtain for our vessels also drive our revenues. Charter rates are based primarily on demand and supply of containership capacity at the time we enter into the charters for our vessels. Demand and supply can fluctuate significantly over time as a result of changing economic conditions affecting trade flow between ports served by liner companies and the industries which use liner shipping services. Vessels operated under long-term charters are less susceptible to cyclical containership charter rates than vessels operated on shorter-term charters, such as spot charters. We are exposed to varying charter rate environments when our chartering arrangements expire and we seek to deploy our containerships under new charters. As illustrated in the table above under “—Overview”, the staggered maturities of our containership charters aim to reduce our exposure to any one particular rate environment and point in the shipping cycle. See “—Voyage Revenue”.

•

Utilization of Our Fleet. Due to the long-term time charters under which they generally operate, our containerships have consistently been deployed at high utilization. Nevertheless, the amount of time our vessels spend dry-docked undergoing repairs, maintenance or upgrade work affects our results of operations. Historically, our fleet has had a limited number of unscheduled off-hire days. In 2013, 2014 and 2015 our fleet utilization based on unscheduled off-hire days as a percentage of total operating days for each year was 99.9%, 99.8% and 99.7%, respectively. However, an increase in annual off- hire days could reduce our utilization. The efficiency with which suitable employment is secured, the ability to minimize off-hire days and the amount of time spent positioning vessels also affects our results of operations. If the utilization pattern of our containership fleet changes, our financial results would be affected.

•

Expenses and Other Costs. Our ability to control our fixed and variable expenses is critical to our ability to maintain acceptable profit margins. These expenses include commission

expenses, crew wages and related costs, the cost of insurance, expenses for repairs and maintenance, the cost of spares and consumable stores, lubricating oil costs, tonnage taxes and other miscellaneous expenses. In addition, factors beyond our control, such as developments relating to market premiums for insurance and the value of the U.S. dollar compared to currencies in which certain of our expenses, primarily crew wages, are paid, can cause our vessel operating expenses to increase. We proactively manage our foreign currency exposure by entering into Euro/dollar forward contracts covering our Euro-denominated operating expenses.

Voyage Revenue

Our operating revenues are driven primarily by the number of vessels in our fleet, the amount of daily charter hire that our vessels earn under time charters and the number of operating days during which our vessels generate revenues. These factors are, in turn, affected by our decisions relating to vessel acquisitions and dispositions, the amount of time that we spend positioning our vessels, the amount of time that our vessels spend dry-docked undergoing repairs, maintenance and upgrade work, the age, condition and specifications of our vessels and the levels of supply and demand in the containership charter market.

Charter revenues are generated from fixed-rate time charters and are recorded on a straight-line basis over the term of each time charter (excluding the effect of any options to extend the term). Revenues do not include any revenues for the existing Joint Venture vessels. Revenues derived from time charters with escalating rates are accounted for as operating leases and thus are recognized on a straight-line basis as the average revenue over the rental periods of such agreements, as service is performed, by dividing (i) the aggregate contracted revenues until the earliest expiration date of the time charter by (ii) the total contracted days until the earliest expiration date of the time charter. Some of our charters provide that the charter rate will be adjusted to a market rate for the final months of their respective terms. For purposes of determining the straight-line revenue amount, we exclude these periods and treat the charter as expiring at the end of the last fixed rate period. Our revenues will be affected by the acquisition of any additional vessels in the future subject to time charters, as well as by the disposition of any existing vessel in our fleet. Our revenues will also be affected if any of our charterers cancel a time charter or if we agree to renegotiate charter terms during the term of a charter resulting in aggregate revenue reduction. Our time charter arrangements have been contracted in varying rate environments and expire at different times. Generally, we do not employ our vessels under voyage charters under which a ship-owner, in return for a fixed sum, agrees to transport cargo from one or more loading ports to one or more destinations and assumes all vessel operating costs and voyage expenses.

According to Clarkson Research, the first half of 2007 saw the containership charter market recover to rate levels similar to those seen in late 2005 and early 2006. However, the onset of the global economic downturn and the resulting slowdown in container trade growth created a relative oversupply of capacity, leading to a rapid decrease in containership earnings in the latter half of 2008, which continued in the first half of 2009, with earnings remaining depressed during the rest of the year. In 2010, containership charter rates registered and upward trend over the years as a whole and made further gains in early 2011 before decreasing sharply in the second half of 2011. The time charter rates and charter free vessel values remained at low levels through 2014. While in the first half of 2015 charter rates showed an improvement, the continuous decrease in containership demand, combined with the deliveries of many larger newbuilds resulted in the deterioration of rates and values across all types of vessels to historically low figures. While charter rates and the level of demand for containerships are historically volatile, and there can be no assurance that either will improve, we believe that any continued improvement in the global economy and demand for containerships will lead to an improvement in charter rates over time.

The table below provides additional information about our expected revenues based on contracted charter rates as of December 31, 2015. Although these expected revenues are based on contracted charter rates, any contract is subject to various risks, including performance by the counterparties or an early termination of the contract pursuant to its terms. If the charterers are

unable to make charter payments to us, if we agree to renegotiate charter terms at the request of a charterer or if contracts are prematurely terminated for any reason, our results of operations and financial condition may be materially adversely affected. Historically, we have had no defaults or early terminations by charterers, although in certain cases we have agreed to changes in charter terms.

Contracted Revenue and Days From Time Charters as of December 31, 2015*


	On and After January 1,
	2016				2017				2018				2019				2020 and thereafter				Total
	(Expressed in thousands of U.S. dollars, except days and percentages)
Contracted Revenues ⁽¹⁾⁽²⁾		$	446,325			$	371,984			$	198,759			$	122,306			$	310,852			$	1,450,226
Fleet Contracted Days ⁽²⁾			15,030				10,669				5,568				3,238				7,525				42,030
Percentage of fleet contracted days/Total days ⁽²⁾			76.0	%			54.1	%			29.3	%			17.1	%			8.7	%			25.6	%

⁽¹⁾

Annual revenue calculations are based on: (a) an assumed 365 revenue days per vessel per annum, (b) the earliest redelivery dates possible under our containerships’ charters and (c) non-exercise of the owner’s options to extend the terms of those charters. The contracted revenues for the three vessels subject to the CLC Sale and Leaseback are included in the revenue calculations.

⁽²⁾

Some of our charters provide that the charter rate will be adjusted to a market rate for the final months of their respective terms. For purposes of determining contracted revenues and the number of days, we exclude these periods and treat the charter as expiring at the end of the last fixed rate period. Total days are calculated on the assumption that the vessels will continue trading until the age of 30 years old, unless the vessel will exceed 30 years of age at the expiry of its current time charter, in which case we assume that the vessel continues trading until that expiry date.

The revenues and days in the above table exclude the revenues and contracted days of any of the vessels purchased pursuant to the Framework Deed.

Voyage Expenses

Voyage expenses include port and canal charges, bunker (fuel) expenses, address commissions and brokerage commissions. Under our time charter arrangements, charterers bear the voyage expenses other than address and brokerage commissions. As such, voyage expenses represent a relatively small portion of our vessels’ overall expenses. During 2014 and 2015, brokerage and address commissions represented 33% and 48% of voyage expenses respectively.

These commissions do not include the fees we pay to our manager, which are described below under “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Management and Services Agreements”.

Vessels’ Operating Expenses

Vessels’ operating expenses include crew wages and related costs, the cost of insurance, expenses for repairs and maintenance, the cost of spares and consumable stores, lubricant costs, statutory and classification expenses and other miscellaneous expenses. Aggregate expenses increase as the size of our fleet increases. We expect that insurance costs, dry-docking and maintenance costs will increase as our vessels age. Factors beyond our control, some of which may affect the shipping industry in general—for instance, developments relating to market premiums for insurance and changes in the market price of lubricants due to increases in oil prices—may also cause vessel operating expenses to increase. In addition, a substantial portion of our vessel operating expenses, primarily crew wages, are in currencies other than the U.S. dollar (mainly in Euro), and any gain or loss we incur as a result of the U.S. dollar fluctuating in value against these currencies is included in vessel operating expenses. As of December 31, 2015, approximately 36.6% of our outstanding accounts payable were denominated in currencies other than the U.S. dollar (mainly in Euro). We fund our managers with the amounts they will need to pay our fleet’s vessel operating expenses. Under our time charter arrangements, we generally pay for vessel operating expenses.

General and Administrative Expenses

General and administrative expenses mainly include legal, accounting and advisory fees. We also incur additional general and administrative expenses as a public company. The primary components of general and administrative expenses consist of the expenses associated with being a public company, which include the preparation of disclosure documents, legal and accounting costs, investor relation costs, incremental director and officer liability insurance costs, director and executive compensation and costs related to compliance with Sarbanes-Oxley and Dodd-Frank Act.

Management Fees

In 2013, we paid to our managers a daily management fee of $884 per day per vessel. Such fee increased to $919 per day per vessel beginning January 1, 2014, and further increased to $956 per day per vessel beginning January 1, 2015. The total management fees paid by us to our managers during the years ended December 31, 2013, 2014 and 2015 amounted to $16.6 million, $18.5 million and $18.9 million, respectively. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Management and Services Agreements” for more information regarding management fees.

Amortization of Dry-docking and Special Survey Costs

All vessels are dry-docked at least once every five years for inspection of their underwater parts and for repairs related to such inspections. We follow the deferral method of accounting for special survey and dry-docking costs whereby actual costs incurred (mainly shipyard costs, paints and class renewal expenses) are deferred and amortized on a straight-line basis over the period through the date the next survey is scheduled to become due. If a survey is performed prior to the scheduled date, the remaining unamortized balances are immediately written off. Unamortized balances of vessels that are sold are written off and included in the calculation of the resulting gain or loss in the period of the vessel’s sale.

Depreciation

We depreciate our containerships on a straight-line basis over their estimated remaining useful economic lives. For years prior to January 1, 2007, we estimated this to be 25 years. As of January 1, 2007, we determined the estimated useful lives of our containerships to be 30 years from their initial delivery from the shipyard. This change was made to reflect our experience, market conditions and the current practice in the containership industry. Depreciation is based on cost, less the estimated scrap value of the vessels.

Gain / (Loss) on Sale/Disposal of Vessels

The gain or loss on the sale of a vessel is presented in a separate line item in our consolidated statements of income. In 2013, 2014 and 2015, we sold three, three and one vessels, respectively.

Foreign Exchange Gains / (Losses)

Our functional currency is the U.S. dollar because our vessels operate in international shipping markets, and therefore transact business mainly in U.S. dollars. Our books of accounts are maintained in U.S. dollars. Transactions involving other currencies are converted into U.S. dollars using the exchange rates in effect at the time of the transactions. The gain or loss derives from the different foreign currency exchange rates between the time that a cost is recorded in our books and the time that the cost is paid. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated into U.S. dollars at the year-end exchange rates. Resulting gains or losses are reflected as foreign exchange gains / (losses) in our consolidated statement of income.

Other, Net

Other expenses represent primarily non-recurring items that are not classified under the other categories of our consolidated income statement. Such expenses may, for instance, result from various potential claims against our Company, or from payments we are effecting on behalf of charterers that cannot meet their obligations.

Interest Income, Interest and Finance Costs

We incur interest expense on outstanding indebtedness under our existing credit facilities which we include in interest expense. Finance costs also include financing and legal costs in connection with establishing and amending those facilities, which are deferred and amortized to interest and finance costs during the life of the related debt using the effective interest method. Unamortized fees relating to loans repaid or refinanced, meeting the criteria of debt extinguishment, are expensed in the period the repayment or refinancing is made. Further, we earn interest on cash deposits in interest-bearing accounts and on interest-bearing securities, which we include in interest income. We will incur additional interest expense in the future on our outstanding borrowings and under future borrowings. For a description of our existing credit facilities and our new committed term loan please read “—B. Liquidity and Capital Resources—Credit Facilities”.

Equity in Net Earnings of Investments

Based on the Framework Deed we currently hold a minority interest in the equity of certain ship-owning companies. We account for these entities as equity investments. Equity in net earnings of investments represents our share of the earnings or losses of these entities for the reported period. For a description of the Framework Deed please see “Item 4. Information on the Company—B. Business Overview—Our Fleet, Acquisitions and Newbuild Vessels—Framework Deed”.

Gain / (Loss) on Derivative Instruments

We enter into interest rate swap contracts to manage our exposure to fluctuations of interest rate risks associated with specific borrowings. All derivatives are recognized in the consolidated financial statements at their fair value. On the inception date of the derivative contract, we designate the derivative as a hedge of a forecasted transaction or the variability of cash flow to be paid (“cash flow hedge”). Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in Other comprehensive income until earnings are affected by the forecasted transaction or the variability of cash flow and are then reported in earnings. Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in earnings in the period in which those fair value changes have occurred. For a description of our existing interest rate swaps, please read “Item 11. Quantitative and Qualitative Disclosures About Market Risk—A. Quantitative Information About Market Risk—Interest Rate Risk”.

Results of Operations

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

During the year ended December 31, 2015 and 2014, we had an average of 54.9 and 54.5 vessels, respectively in our fleet. In the year ended December 31, 2015, pursuant to the Framework Agreement with York, a jointly-owned vessel entity took delivery of the secondhand vessel Arkadia with a TEU capacity of 1,550 and we sold the vessel MSC Challenger with a TEU capacity of 2,633. In the year ended December 31, 2014, we took delivery of the newbuild vessels MSC Azov , MSC Ajaccio and MSC Amalfi with an aggregate TEU capacity of 28,209 and the secondhand vessels Neapolis , Areopolis and Lakonia with an aggregate TEU capacity of 6,705 and we sold the vessels Konstantina , MSC Kyoto and Akritas with an aggregate TEU capacity of 10,379. Furthermore, pursuant to the Framework Agreement with York, a jointly-owned vessel entity took delivery of the

secondhand vessel Elafonisos with a TEU capacity of 2,526. In the year ended December 31, 2015 and 2014, our fleet ownership days totaled 20,038 and 19,885 days, respectively. Ownership days are the primary driver of voyage revenue and vessels operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.


	Year ended December 31,								Change				Percentage Change
	2014				2015				Change				Percentage Change
	(Expressed in millions of U.S. dollars, except percentages)
Voyage revenue		$	484.0			$	490.4			$	6.4			1.3	%
Voyage expenses			(3.6	)			(2.8	)			(0.8	)		(22.2	%)
Voyage expenses—related parties			(3.6	)			(3.7	)			0.1			2.8	%
Vessels’ operating expenses			(120.8	)			(117.2	)			(3.6	)		(3.0	%)
General and administrative expenses			(7.7	)			(8.8	)			1.1			14.3	%
Management fees—related parties			(18.5	)			(18.9	)			0.4			2.2	%
General and administrative expenses—non-cash component			—				(8.6	)			8.6			100.0	%
Amortization of dry-docking and special survey costs			(7.8	)			(7.4	)			(0.4	)		(5.1	%)
Depreciation			(105.8	)			(101.6	)			(4.2	)		(4.0	%)
Amortization of prepaid lease rentals			(4.0	)			(5.0	)			1.0			25.0	%
Gain on sale / disposal of vessels			2.5				1.7				(0.8	)		(32.0	%)
Foreign exchange losses			—				(0.1	)			0.1			100.0	%
Interest income			0.8				1.3				0.5			62.5	%
Interest and finance costs			(95.6	)			(92.3	)			(3.3	)		(3.5	%)
Swaps breakage cost			(10.2	)			—				(10.2	)		(100.0	%)
Equity loss on investments			(3.4	)			(0.5	)			(2.9	)		(85.3	%)
Other			3.3				0.4				(2.9	)		(87.9	%)
Gain on derivative instruments			5.5				16.9				11.4			207.3	%

Net Income		$	115.1			$	143.8


Fleet operational data	Year ended December 31,				Change			Percentage Change
	2014		2015
Average number of vessels		54.5		54.9		0.4			0.7	%
Ownership days		19,885		20,038		153			0.8	%
Number of vessels underwent dry-docking		11		10		(1	)

The Company reports its financial results in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial measures additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. The table below sets out our Voyage revenue adjusted on a cash basis and the corresponding reconciliation to Voyage revenue for the twelve- month periods ended December 31, 2015 and December 31, 2014. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.


	Year ended December 31,						Change				Percentage Change
	2014			2015			Change				Percentage Change
	(Expressed in millions of U.S. dollars, except percentages)
Voyage revenue		$	484.0		$	490.4		$	6.4			1.3	%
Accrued charter revenue ⁽¹⁾			7.0			2.6			(4.4	)		(62.9	%)
Voyage revenue adjusted on a cash basis ⁽²⁾		$	491.0		$	493.0		$	2.0			0.4	%

⁽¹⁾

Accrued charter revenue represents the difference between cash received during the period and revenue recognized on a straight-line basis. In the early years of a charter with escalating charter rates, voyage revenue will exceed cash received during the period.

⁽²⁾

Voyage revenue adjusted on a cash basis represents Voyage revenue after adjusting for non-cash “Accrued charter revenue” recorded under charters with escalating charter rates. Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. GAAP. We believe that the presentation of Voyage revenue adjusted on a cash basis is useful to investors because it presents the charter revenue for the relevant period based on the then-current daily charter rates. The increases or decreases in daily charter rates under our charter party agreements are described in the notes to the table in “Item 4. Information On The Company—Business Overview—Our Fleet, Acquisitions and Newbuild Vessels”.

Voyage Revenue

Voyage revenue increased by 1.3%, or $6.4 million, to $490.4 million during the year ended December 31, 2015, from $484.0 million during the year ended December 31, 2014. This increase was mainly attributable to (i) revenue earned by the three newbuild vessels and three secondhand vessels delivered to us during the year ended December 31, 2014 and (ii) increased charter rates in certain of our vessels during the year ended December 31, 2015, compared to the year ended December 31, 2014; partly offset by revenue not earned by vessels which were sold for demolition during the year ended December 31, 2014 and increased off-hire days, mainly due to scheduled dry-dockings during the year ended December 31, 2015, compared to the year ended December 31, 2014.

Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”), increased by 0.4%, or $2.0 million, to $493.0 million during the year ended December 31, 2015, from $491.0 million during the year ended December 31, 2014. This increase was mainly attributable to (i) revenue earned by the three newbuild vessels and three secondhand vessels delivered to us during the year ended December 31, 2014 and (ii) increased charter rates in certain of our vessels during the year ended December 31, 2015, compared to the year ended December 31, 2014; partly offset by revenue not earned by vessels which were sold for demolition during the year ended December 31, 2014 and increased off-hire days, mainly due to scheduled dry-dockings during the year ended December 31, 2015, compared to the year ended December 31, 2014.

Voyage Expenses

Voyage expenses decreased by 22.2%, or $0.8 million, to $2.8 million during the year ended December 31, 2015, from $3.6 million during the year ended December 31, 2014. Voyage expenses mainly include (i) off-hire expenses of our vessels, mainly related to fuel consumption and (ii) third party commissions.

Voyage Expenses—Related Parties

Voyage expenses — related parties were $3.7 million and $3.6 million during the years ended December 31, 2015 and 2014, respectively and represent fees of 0.75% on voyage revenues charged to us by Costamare Shipping and Costamare Services in accordance with (i) the Group Management Agreement until November 2, 2015 and (ii) the Framework Agreement and the Services Agreement from November 2, 2015.

Vessels’ Operating Expenses

Vessels’ operating expenses, which also includes the realized gain / (loss) under derivative contracts entered into in relation to foreign currency exposure, decreased by 3.0% or $3.6 million to $117.2 million during the year ended December 31, 2015, from $120.8 million during the year ended December 31, 2014.

General and Administrative Expenses

General and administrative expenses increased by 14.3% or $1.1 million, to $8.8 million during the year ended December 31, 2015, from $7.7 million during the year ended December 31, 2014. The increase is mainly attributable to costs incurred by our subsidiary, Costamare Partners LP,

which were transferred to our consolidated income statement during the year ended December 31, 2015.

Management Fees—Related Parties

Management fees paid to our managers increased by 2.2%, or $0.4 million, to $18.9 million during the year ended December 31, 2015, from $18.5 million during the year ended December 31, 2014, pursuant to the Group Management Agreement and the Framework Agreement and the Services Agreement, as applicable. The increase was primarily attributable to (i) the upward adjustment by 4% of the management fee for each vessel (effective January 1, 2015), as provided under the Group Management Agreement in effect at such time and (ii) the increased average number of vessels during the year ended December 31, 2015, compared to the year ended December 31, 2014.

General and Administrative Expenses—Non-Cash Component

General and administrative expenses — non-cash component for the year ended December 31, 2015, amounted to $8.6 million, representing the value of the shares issued to our manager on March 31, 2015, on June 30, 2015 and September 30, 2015, pursuant to the Group Management Agreement, and the value of the shares issued to Costamare Services issued on December 31, 2015, pursuant to the Services Agreement. No amounts were incurred in 2014.

Amortization of Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs for the years ended December 31, 2015 and 2014 were $7.4 million and $7.8 million, respectively. During the year ended December 31, 2014, eleven vessels, underwent and completed their special survey. During the year ended December 31, 2015, ten vessels, underwent and completed their special survey.

Depreciation

Depreciation expense decreased by 4.0%, or $4.2 million, to $101.6 million during the year ended December 31, 2015, from $105.8 million during the year ended December 31, 2014. The decrease was mainly attributable to the depreciation expense not charged for the vessels sold for demolition during the year ended December 31, 2014 and to a change in the estimated scrap value of vessels, which had a favorable effect of $5.4 million for the year ended December 31, 2015; partly offset by the depreciation expense charged for the three newbuild and three secondhand vessels delivered to us during the year ended December 31, 2014.

Amortization of Prepaid lease rentals

Amortization of the prepaid lease rentals was $5.0 million and $4.0 million during the years ended December 31, 2015 and 2014, respectively.

Gain on Sale / Disposal of Vessels

During the year ended December 31, 2015, we recorded a gain of $1.7 million from the sale of one vessel. During the year ended December 31, 2014, we recorded a net gain of $2.5 million from the sale of three vessels.

Interest Income

During the years ended December 31, 2015 and 2014, interest income was $1.3 million and $0.8 million, respectively.

Interest and Finance Costs

Interest and finance costs decreased by 3.5%, or $3.3 million, to $92.3 million during the year ended December 31, 2015, from $95.6 million during the year ended December 31, 2014. The decrease was partly attributable to the decreased loan interest expense charged to the consolidated statement of income resulting from the decrease in the outstanding loan amount and a reduction in the write off of finance costs relating to loan refinancing during 2015; partially offset by the fact that the 2014 period benefited from the capitalization of interest associated with the delivery of vessels during that period, which did not recur during 2015.

Equity Loss on Investments

During the year ended December 31, 2015, the equity loss on investments was $0.5 million. The equity loss on investments represents our share of the net losses of nineteen jointly owned companies pursuant to the Framework Agreement with York. We hold a range of 25% to 49% of the capital stock of these companies. The net loss of $0.5 million is mainly attributable to General and administrative expenses of $0.8 million incurred by 12 jointly-owned companies that had vessels under construction during the year ended December 31, 2015.

Gain on Derivative Instruments

The fair value of our interest rate derivative instruments which were outstanding as of December 31, 2015, equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2015, the fair value of these interest rate derivative instruments in aggregate amounted to a liability of $52.1 million. The effective portion of the change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in OCI while the ineffective portion is recorded in the consolidated statements of income. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in the consolidated statement of income. For the year ended December 31, 2015, a net gain of $11.3 million has been included in OCI and a net gain of $18.2 million has been included in Gain on derivative instruments in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the year ended December 31, 2015. Furthermore, during the year ended December 31, 2014, we terminated three interest rate derivative instruments that qualified for hedge accounting and we paid the counterparty breakage costs of $10.2 million, in aggregate and has been included in Swaps breakage cost in the 2014 consolidated statement of income.

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

During the year ended December 31, 2014 and 2013, we had an average of 54.5 and 49.6 vessels, respectively, in our fleet. In the year ended December 31, 2014, we accepted delivery of the newbuild vessels MSC Azov , MSC Ajaccio and MSC Amalfi with an aggregate TEU capacity of 28,209 and the secondhand vessels Neapolis , Areopolis and Lakonia with an aggregate TEU capacity of 6,705 and we sold the vessels Konstantina , MSC Kyoto and Akritas with an aggregate TEU capacity of 10,379. Furthermore, pursuant to the Framework Deed with York, a jointly-owned vessel entity accepted delivery of the secondhand vessel Elafonisos with a TEU capacity of 2,526. In the year ended December 31, 2013 we accepted delivery of the newbuild vessels MSC Athens , MSC Athos , Valor , Value , Valiant , Valence and Vantage with an aggregate TEU capacity of 61,789 and the secondhand vessel Venetiko with a TEU capacity of 5,928 and we sold three vessels, the MSC Washington, MSC Austria and MSC Antwerp with an aggregate TEU capacity of 11,343. In the years ended December 31, 2014 and 2013, our fleet ownership days totaled 19,885 and 18,119 days, respectively. Ownership days, in combination with the level of daily charter hire that our vessels earn under time charters, are the primary drivers of voyage revenue and vessels’ operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.


	Year ended December 31,								Change				Percentage Change
	2013				2014				Change				Percentage Change
	(Expressed in millions of U.S. dollars, except percentages)
Voyage revenue		$	414.2			$	484.0			$	69.8			16.9	%
Voyage expenses			(3.5	)			(3.6	)			0.1			2.9	%
Voyage expenses—related parties			(3.1	)			(3.6	)			0.5			16.1	%
Vessels operating expenses			(116.0	)			(120.8	)			4.8			4.1	%
General and administrative expenses			(8.5	)			(7.7	)			(0.8	)		(9.4	%)
Management fees—related parties			(16.6	)			(18.5	)			1.9			11.4	%
Amortization of dry-docking and special survey costs			(8.1	)			(7.8	)			(0.3	)		(3.7	%)
Depreciation			(89.9	)			(105.8	)			15.9			17.7	%
Amortization of prepaid lease rentals			—				(4.0	)			4.0			100.0	%
Gain on sale of vessels			0.5				2.5				2.0			400.0	%
Interest income			0.6				0.8				0.2			33.3	%
Interest and finance costs			(74.5	)			(95.6	)			21.1			28.3	%
Equity gain / (loss) on investments			0.7				(3.4	)			(4.1	)		(585.7	%)
Swaps breakage cost			—				(10.2	)			10.2			100.0	%
Other, net			0.8				3.3				2.5			312.5	%
Gain on derivative instruments			6.5				5.5			$	(1.0	)		(15.4	%)

Net Income		$	103.1			$	115.1


Fleet operational data	Year ended December 31,				Change		Percentage Change
	2013		2014
Average number of vessels		49.6		54.5		4.9		9.9	%
Ownership days		18,119		19,885		1,766		9.7	%
Number of vessels underwent dry-docking		8		11		3

The Company reports its financial results in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial measures additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. The table below sets out our Voyage revenue adjusted on a cash basis and the corresponding reconciliation to Voyage revenue for the twelve- month periods ended December 31, 2014 and December 31, 2013. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.


	Year ended December 31,						Change				Percentage Change
	2013			2014			Change				Percentage Change
	(Expressed in millions of U.S. dollars, except percentages)
Voyage revenue		$	414.2		$	484.0		$	69.8			16.9	%
Accrued charter revenue ⁽¹⁾			15.0			7.0			(8.0	)		(53.3	%)
Voyage revenue adjusted on a cash basis ⁽²⁾		$	429.2		$	491.0		$	61.8			14.4	%

⁽¹⁾

⁽²⁾

Voyage Revenue

Voyage revenue increased by 16.9%, or $69.8 million, to $484.0 million during the year ended December 31, 2014, from $414.2 million during the year ended December 31, 2013. This increase was mainly attributable to: (i) revenue earned by the seven and three newbuild vessels delivered to us during the year ended December 31, 2013 and the six-month period ended June 30, 2014, respectively; partly offset by (ii) decreased charter rates in certain of our vessels during the year ended December 31, 2014, compared to the year ended December 31, 2013, and (iii) revenues not earned by vessels which were sold for scrap during the year ended December 31, 2013 and the year ended December 31, 2014.

Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”), increased by 14.4%, or $61.8 million, to $491.0 million during the year ended December 31, 2014, from $429.2 million during the year ended December 31, 2013. This increase was mainly attributable to: (i) revenue earned by the seven and three newbuild vessels delivered to us during the year ended December 31, 2013 and the six-month period ended June 30, 2014, respectively; partly offset by (ii) decreased charter rates in certain of our vessels during the year ended December 31, 2014, compared to the year ended December 31, 2013, and (iii) revenues not earned by vessels which were sold for scrap during the year ended December 31, 2013 and the year ended December 31, 2014.

Voyage Expenses

Voyage expenses increased by 2.9%, or $0.1 million, to $3.6 million during the year ended December 31, 2014, from $3.5 million during the year ended December 31, 2013. Voyage expenses mainly include: (i) off-hire expenses of our vessels, mainly related to fuel consumption and (ii) third party commissions.

Voyage Expenses—Related Parties

Voyage expenses—related parties increased by 16.1%, or $0.5 million to $3.6 million during the year ended December 31, 2014, from $3.1 million during the year ended December 31, 2013, and represent fees of 0.75% on voyage revenues charged to us by Costamare Shipping as provided under our group management agreement.

Vessels’ Operating Expenses

Vessels’ operating expenses, which also includes the realized gain / (loss) under derivative contracts entered into in relation to foreign currency exposure, increased by 4.1% or $4.8 million to $120.8 million during the year ended December 31, 2014, from $116.0 million during the year ended December 31, 2013. The increase was mainly attributable to the increased ownership days of our fleet during the year ended December 31, 2014, compared to the year ended December 31, 2013.

General and Administrative Expenses

General and administrative expenses decreased by 9.4% or $0.8 million, to $7.7 million during the year ended December 31, 2014, from $8.5 million during the year ended December 31, 2013. General and administrative expenses for the years ended December 31, 2014 and December 31, 2013, include $1.0 million in each period for the services of the Company’s officers in aggregate charged to us by Costamare Shipping as provided under our group management agreement.

Management Fees—Related Parties

Management fees paid to our managers increased by 11.4%, or $1.9 million, to $18.5 million during the year ended December 31, 2014, from $16.6 million during the year ended December 31, 2013. The increase was primarily attributable to: (i) the annual upward adjustment by 4% of the management fee for each vessel (effective January 1, 2014), as then provided under our group

management agreement and (ii) the increased average number of vessels during the year ended December 31, 2014, compared to the year ended December 31, 2013.

Amortization of Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs for the year ended December 31, 2014 and 2013 was $7.8 million and $8.1 million, respectively. During the year ended December 31, 2014 and 2013, eleven and eight vessels, respectively, underwent and completed their special survey.

Depreciation

Depreciation expense increased by 17.7%, or $15.9 million, to $105.8 million during the year ended December 31, 2014, from $89.9 million during the year ended December 31, 2013. The increase was mainly attributable to the depreciation expense charged for the seven newbuild vessels delivered to us during the year ended December 31, 2013 and for the three newbuild vessels delivered to us during the six-month period ended June 30, 2014, partly offset by the depreciation expense not charged for the three and three vessels sold for scrap during the year ended December 31, 2013 and 2014, respectively.

Amortization of Prepaid lease rentals

The amount of $4.0 million relates to the amortization of the prepaid lease rentals during the year ended December 31, 2014.

Gain on Sale of Vessels

During the year ended December 31, 2014, we recorded a net gain of $2.5 million from the sale of three vessels. During the year ended December 31, 2013, we recorded a net gain of $0.5 million from the sale of three vessels.

Interest Income

During the year ended December 31, 2014 and 2013, interest income was $0.8 million and $0.6 million, respectively.

Interest and Finance Costs

Interest and finance costs increased by 28.3%, or $21.1 million, to $95.6 million during the year ended December 31, 2014, from $74.5 million during the year ended December 31, 2013. The increase was mainly attributable to the increased interest expense charged to the consolidated statement of income in relation with the loan facilities of the seven and three newbuild vessels which were delivered to us during the year ended December 31, 2013 and the six-month period ended June 30, 2014, respectively and the write-off of deferred finance costs due to the refinancing of one of our bank loans; partly offset by the decreased loan commitment fees charged to us during the year ended December 31, 2014, compared to the year ended December 31, 2013.

Equity Gain / (Loss) on Investments

The equity gain / (loss) on investments represents our share of the net results of fourteen jointly-owned companies pursuant to the Framework Deed with York. We hold a range of 25% to 49% of the capital stock of each company. The equity gain / (loss) on investments was $3.4 million (loss) and $0.7 million (gain) for the years ended December 31, 2014 and 2013, respectively. The difference is mainly attributable to our share of $6.1 million in an unrealized loss deriving from a swap option agreement entered into by a jointly-owned company.

Gain on Derivative Instruments

The fair value of our 22 interest rate derivative instruments which were outstanding as of December 31, 2014, equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2014, the fair value of these 22 interest rate derivative instruments in aggregate amounted to a liability of $73.9 million. The effective portion of the change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in “Other Comprehensive Income” (“OCI”) while the ineffective portion is recorded in the consolidated statement of income. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in the consolidated statement of income. For the year ended December 31, 2014, a net gain of $22.6 million has been included in OCI and a net gain of $6.7 million has been included in Gain on derivative instruments in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the year ended December 31, 2014.

B. Liquidity and Capital Resources

In the past, our principal sources of funds have been operating cash flows and long-term bank borrowings. Our principal uses of funds have been capital expenditures to establish, grow and maintain our fleet, comply with international shipping standards, environmental laws and regulations, fund working capital requirements and pay dividends. In monitoring our working capital needs, we project our charter hire income and vessels’ maintenance and running expenses, as well as debt service obligations, and seek to maintain adequate cash reserves in order to address any budget overruns.

Our primary short-term liquidity need is to fund our vessel operating expenses and payment of quarterly dividends on our outstanding preferred and common stock. Our long-term liquidity needs primarily relate to additional vessel acquisitions in the containership sectors and debt repayment. We anticipate that our primary sources of funds will be cash from operations and undrawn borrowing capacity under our committed credit facilities, along with borrowings under new credit facilities that we intend to obtain from time to time in connection with vessel acquisitions. We believe that these sources of funds will be sufficient to meet our short-term and long-term liquidity needs, including our agreements, subject to certain conditions, to acquire newbuild vessels, although there can be no assurance that we will be able to obtain future debt financing on terms acceptable to us.

In addition, since our initial public offering in 2010, we have completed several equity offerings. On March 27, 2012, the Company completed a follow-on public equity offering in which we issued 7,500,000 shares of common stock at a public offering price of $14.10 per share. The net proceeds of this offering were $100.6 million. On October 19, 2012, the Company completed a second follow-on public equity offering in which we issued 7,000,000 shares of common stock at a public offering price of $14.00 per share. The net proceeds of this offering were $93.5 million. On August 7, 2013, the Company completed a public equity offering of 2,000,000 shares of Series B Preferred Stock at a public offering price of $25.00 per share. The net proceeds of this offering were $48.0 million. On January 21, 2014, the Company completed a public equity offering of 4,000,000 shares of Series C Preferred Stock at a public offering price of $25.00 per share. The net proceeds of this offering were $96.5 million. On May 13, 2015, the Company completed a public equity offering of 4,000,000 shares of Series D Preferred Stock at a public offering price of $25.00 per share. The net proceeds of this offering were $96.6 million. As of April 20, 2016, we had available $100 million under a Form F-3 shelf registration statement for future issuances of securities in the public market.

As at December 31, 2015, we had total cash liquidity of $162.8 million, consisting of cash, cash equivalents and restricted cash.

As at April 20, 2016, we had three series of preferred stock outstanding, $50 million aggregate liquidation preference of the Series B Preferred Stock, $100 million aggregate liquidation preference of the Series C Preferred Stock and $100 million aggregate liquidation preference of the Series D Preferred Stock. The Series B Preferred Stock carry an annual dividend rate of 7.625% per $25.00 of liquidation preference per share and are redeemable by us at any time on or after August 6, 2018. The Series C Preferred Stock carry an annual dividend rate of 8.50% per $25.00 of liquidation

preference per share and are redeemable by us at any time on or after January 21, 2019. The Series D Preferred Stock carry an annual dividend rate of 8.75% per $25.00 of liquidation preference per share and are redeemable by us at any time on or after May 13, 2020.

As at December 31, 2015, we had an aggregate of $1.56 billion of indebtedness outstanding under various credit agreements, including the obligations under our lease agreements. As of April 20, 2016, we had outstanding commitments relating to the 12 contracted newbuilds under our Framework Deed aggregating approximately $282.3 million payable in installments until the vessels are delivered through the second quarter of 2018, out of which $177.8 million will be funded through committed sale and leaseback transactions. These amounts represent our interest in the relevant Joint Venture entities with York. Furthermore, as of April 20, 2016, the vessels shown in the table below were free of debt.

Unencumbered Vessels in the water as of April 20, 2016 ^(*)


Vessel Name	Year Built		TEU Capacity
Navarino		2010		8,531
Venetiko		2003		5,928
MSC Itea		1998		3,842
Lakonia		2004		2,586
Areopolis		2000		2,474
Messini		1997		2,458
Neapolis		2000		1,645

^(*)

Does not include three secondhand vessels acquired and five newbuilds on order under the Framework Deed, which are also free of debt.

Our common stock dividend policy impacts our future liquidity needs. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividend Policy”. We paid our first cash dividend since becoming a public company in November 2010 on February 4, 2011 in an amount of $0.25 per share of common stock. We have subsequently paid dividends to holders of our common stock of $0.25 per share on May 12, 2011 and August 9, 2011, and $0.27 per share on November 7, 2011, February 8, 2012, May 9, 2012, August 7, 2012, November 6, 2012, February 13, 2013, May 8, 2013, August 7, 2013, November 6, 2013 and February 4, 2014, $0.28 per share on May 13, 2014, August 6, 2014, November 5, 2014 and February 4, 2015 and $0.29 per share on May 6, 2015, August 5, 2015, November 4, 2015 and February 4, 2016.

Our preferred stock dividend payment obligations also impact our future liquidity needs. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Preferred Stock Dividend Requirements”. We paid dividends to holders of our Series B Preferred Stock of $0.3654 per share on October 15, 2013 and $0.476563 per share on January 15, 2014, April 15, 2014, July 15, 2014, October 15, 2014, January 15, 2015, April 15, 2015, July 15, 2015, October 15, 2015 and January 15, 2016. We paid dividends to holders of our Series C Preferred Stock of $0.495833 per share on April 15, 2014 and $0.531250 per share on July 15, 2014, October 15, 2014, January 15, 2015, April 15, 2015, July 15, 2015, October 15, 2015 and January 15, 2016. We paid dividends to holders of our Series D Preferred Stock of $0.376736 per share on July 15, 2015 and $0.546875 per share on October 15, 2015 and January 15, 2016.

In 2010, we did not declare any dividends. In 2009, we declared dividends from our retained earnings to our existing stockholders of $40.2 million, of which $30.2 million were paid in 2009 and $10.0 million were paid on January 14, 2010.

The dividends and distributions paid during the years ended December 31, 2011, 2012, 2013, 2014 and 2015, were funded in part by borrowings and in part by cash from operations. On a cumulative basis for the entire period, cash flow from operating activities exceeded the aggregate amount of dividends and distributions.

Working Capital Position

We have historically financed our capital requirements with cash flow from operations, equity contributions from stockholders and long-term bank debt. Our main uses of funds have been capital expenditures for the acquisition of new vessels, expenditures incurred in connection with ensuring that our vessels comply with international and regulatory standards, repayments of bank loans and payments of dividends. We will require capital to fund ongoing operations, the construction of our new vessels, the acquisition cost of any secondhand vessels we agree to acquire in the future and debt service. Working capital, which is current assets minus current liabilities, including the current portion of long-term debt, was negative $126.9 million at December 31, 2015 and negative $132.4 million at December 31, 2014.

We anticipate that internally generated cash flow will be sufficient to fund the operations of our fleet, including our working capital requirements. See “—Credit Facilities”.

Cash Flows

Years ended December 31, 2013, 2014 and 2015


	Year ended December 31,
	2013				2014				2015
	(Expressed in millions of U.S. dollars)
Condensed cash flows
Net Cash Provided by Operating Activities		$	186.7			$	243.3			$	244.7
Net Cash Used in Investing Activities			(621.1	)			(119.3	)			(43.0	)
Net Cash Provided by/(Used in) Financing Activities			260.4				(104.3	)			(214.7	)

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities increased by $1.4 million to $244.7 million for the year ended December 31, 2015, compared to $243.3 for the year ended December 31, 2014. The increase was primarily attributable to the (i) increased cash from operations of $2.0 million, (ii) decreased payments for interest (including swap payments) during the period of $7.6 million and (iii) decreased special survey costs of $0.7 million; partly offset by the unfavorable change in working capital position, excluding the current portion of long-term debt and the accrued charter revenue (representing the difference between cash received in that period and revenue recognized on a straight-line basis) of $9.8 million.

Net cash flows provided by operating activities increased by $56.6 million to $243.3 million for the year ended December 31, 2014, compared to $186.7 million for the year ended December 31, 2013. The increase was primarily attributable to: (a) increased cash from operations of $61.8 million due to cash generated from the charters of the seven and three newbuild vessels delivered to us during the year ended December 31, 2013 and the six-month period ended June 30, 2014, respectively and (b) a favorable change in working capital position, excluding the current portion of long-term debt and the accrued charter revenue (representing the difference between cash received in that period and revenue recognized on a straight-line basis) of $29.3 million; partly offset by increased dry-docking payments of $4.0 million and increased payments for interest (including swap payments) of $12.9 million.

Net Cash Used in Investing Activities

Net cash used in investing activities was $43.0 million in the year ended December 31, 2015, which mainly consisted of $38.8 million in advance payments for the construction of five newbuild vessels, ordered pursuant to the Framework Agreement with York and $3.2 million, paid for the acquisition of a secondhand vessel pursuant to the Framework Agreement, $0.6 million for advance payment for the acquisition of one secondhand vessel pursuant to the Framework Agreement and $4.7 million we received from the sale for scrap of MSC Challenger .

Net cash used in investing activities was $119.3 million in the year ended December 31, 2014, which consisted of: (a) $59.1 million for capitalized costs and advance payments for the construction and delivery of three newbuild vessels, (b) $29.0 million in payments primarily for the acquisition of three secondhand vessels, (c) $53.3 million (net of $31.8 million we received as dividend distributions) in payments, pursuant to the Framework Deed with York, to hold an equity interest ranging from 25% to 49% in jointly-owned companies and (d) $22.1 million we received from the sale for scrap of Konstantina , MSC Kyoto and Akritas .

Net cash used in investing activities was $621.1 million in the year ended December 31, 2013, which consisted primarily of (a) $590.4 million advance payments for the construction and purchase of 10 newbuild vessels, (b) $51.9 million in payments for the acquisition of four secondhand vessels, (c) $8.7 million in payments, pursuant to the Framework Deed with York, to hold a minority equity interest in jointly-owned companies, (d) $13.9 million net proceeds we received from the sale for scrap of MSC Antwerp and MSC Austria (including $0.6 million in payments for expenses related to the sale of MSC Washington ) and (e) $16.0 million we received, pursuant to the Framework Deed with York, for York’s 51% equity interest in the ship-owning companies of the vessels Petalidi , Ensenada Express and Padma (ex. X-Press Padma ) and for initial working capital for such ship-owning companies.

Net Cash Provided by/(Used in) Financing Activities

Net cash used in financing activities was $214.7 million in the year ended December 31, 2015, which mainly consisted of (a) $196.9 million of indebtedness that we repaid, (b) $13.5 million we repaid relating to our sale and leaseback agreements, (c) $86.2 million we paid for dividends to holders of our common stock for the fourth quarter of 2014, first quarter of 2015, second quarter of 2015 and third quarter of 2015, and (d) $3.8 million we paid for dividends to holders of our Series B Preferred Stock and $8.5 million we paid for dividends to holders of our Series C Preferred Stock, both for the periods from October 15, 2014 to January 14, 2015, January 15, 2015 to April 14, 2015, April 15, 2015 to July 14, 2015 and July 15, 2015 to October 14, 2015 and $3.7 million we paid for dividends to holders of our Series D Preferred Stock for the period from May 13, 2015 to July 14, 2015 and July 15, 2015 to October 14, 2015 and (e) $96.6 million net proceeds we received from our public offering in May 2015 of 4.0 million shares of our Series D Preferred Stock, net of underwriting discounts and expenses incurred in the offering.

Net cash used in financing activities was $104.3 million in the year ended December 31, 2014, which mainly consisted of: (a) $356.6 million of indebtedness that we repaid, (b) $9.0 million we drew down from one of our credit facilities, (c) $256.7 million we received from the CLC Sale and Leaseback, (d) $9.6 million we repaid from the CLC Sale and Leaseback, (e) $83.0 million we paid for dividends to holders of our common stock for the fourth quarter of 2013, the first quarter of 2014, the second quarter of 2014 and the third quarter of 2014, (f) $3.8 million we paid for dividends to holders of our Series B Preferred Stock for the period from October 15, 2013 to October 14, 2014, and $6.2 million we paid for dividends to holders of our Series C Preferred Stock for the period from the original issuance of the Series C preferred Stock on January 21, 2014 to October 14, 2014, and (g) $96.5 million net proceeds we received from our public offering in January 2014 of 4.0 million shares of our Series C Preferred Stock, net of underwriting discounts and expenses incurred in the offering.

Net cash provided by financing activities was $260.4 million in the year ended December 31, 2013, which mainly consisted of (a) $163.7 million of indebtedness that we repaid, (b) $469.4 million we drew down from four of our credit facilities, (c) $80.8 million we paid for dividends to our stockholders for the fourth quarter of the year ended December 31, 2012, and the first, second and third quarters of 2013, (d) $48.0 million net proceeds we received from our public offering in August 2013 of 2.0 million shares of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Shares, net of underwriting discounts and expenses incurred in the offering and (e) $0.7 million we paid for dividends to holders of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Shares for the period from August 6, 2013 to October 14, 2013.

Credit Facilities and Capital Leases:

We operate in a capital-intensive industry, which requires significant amounts of investment, and we fund a portion of this investment through long-term bank debt. We, either as guarantor or direct borrower, and certain of our subsidiaries as borrowers or guarantors, have entered into a number of credit facilities and capital leases in order to finance the acquisition of the vessels owned by our subsidiaries and for general corporate purposes. The obligations under our credit facilities and capital leases are secured by, among other things, first priority mortgages over the vessels owned by the respective borrower subsidiaries, charter assignments, first priority assignments of all insurances and earnings of the mortgaged vessels and guarantees by Costamare Inc.

The following summarizes certain terms of our existing credit facilities and capital leases discussed below as at December 31, 2015:

Facility

Outstanding
Principal
Amount

Interest Rate ⁽¹⁾

Maturity

Repayment profile

(Expressed in thousands
of U.S. dollars)

CLC Sale & Leaseback

233,624

Fixed Rate

2024

Bareboat structure–fixed daily charter with balloon

DnB—Quentin

193,545

LIBOR + Margin ⁽²⁾

2020

Straight-line amortization with balloon

DnB—Raymond

126,878

LIBOR + Margin ⁽²⁾

2020

Straight-line amortization with balloon

ING

111,417

LIBOR + Margin ⁽²⁾

2021

Straight-line amortization with balloon

RBS

60,463

LIBOR + Margin ⁽²⁾

2020

⁽³⁾

Straight-line amortization with balloon

Costamare ⁽⁴⁾

495,993

LIBOR + Margin ⁽²⁾

2018

Straight-line amortization with balloon

Credit Agricole—Costis ⁽⁵⁾

82,500

LIBOR + Margin ⁽²⁾

2018

Straight-line amortization with balloon

Unicredit

68,170

LIBOR + Margin ⁽²⁾

2018

Variable installments with balloon

HSBC—Mas

30,625

LIBOR + Margin ⁽²⁾

2018

Variable installments with balloon

Credit Agricole—Capetanissa

45,000

LIBOR + Margin ⁽²⁾

2018

Straight-line amortization with balloon

RBS—Rena

42,500

LIBOR + Margin ⁽²⁾

2018

Straight-line amortization with balloon

Alpha—Montes

66,000

LIBOR + Margin ⁽²⁾

2020

⁽⁶⁾

Variable installments with balloon

⁽¹⁾

The interest rates of long-term debt at December 31, 2015 ranged from 1.113% to 6.75%, and the weighted average interest rate as at December 31, 2015 was 4.22%.

⁽²⁾

The interest rate margin at December 31, 2015 ranged from 0.7% to 2.9%, and the weighted average interest rate margin as at December 31, 2015, was 1.6%.

⁽³⁾

The year 2020 represents the latest possible maturity under the facility, under the MSC Ulsan tranche.

⁽⁴⁾

Bank Syndicate: Commerzbank AG, Unicredit Bank AG, Credit Suisse, HSH Nordbank AG and BNP—Paribas S.A. (ex. Fortis Bank S.A./N.V.).

⁽⁵⁾

On December 12, 2012, the loan agreement with Emporiki Bank was transferred and assigned to Credit Agricole Corporate and Investment Bank (ex. Calyon) (“Credit Agricole”).

⁽⁶⁾

On January 27, 2016, we entered into a supplemental agreement with the bank in order to extend the repayment schedule to 10 consecutive semi-annual variable installments from June 2016 until December 2020 and a balloon payment of $12,000 payable together with the last installment.

The principal financial and other covenants and events of default under each credit facility are also discussed below.

CLC Sale and Leaseback

In January, March and April 2014, our subsidiaries, Adele Shipping Co., Bastian Shipping Co. and Cadence Shipping Co. entered into novation agreements with CLC, whereby they novated to CLC the shipbuilding contracts for the construction of Hulls H1068A, H1069A and H1070A, and entered into bareboat charter agreements (collectively, the “CLC Sale and Leaseback”), whereby our subsidiaries agreed to bareboat charter in the vessels upon delivery for a period of 10 years. Our subsidiaries used a portion of the proceeds from the CLC Sale and Leaseback to prepay the balance of the CEXIM—Adele credit facility (described below) which had been used to finance the predelivery price of the respective hulls.

Under the terms of the CLC Sale and Leaseback, the vessels were each sold for an amount of $85.6 million and our subsidiaries must each pay a fixed daily charter rate on a quarterly basis for 10 years and a final installment of $25.7 million.

The obligations under the CLC Sale and Leaseback are guaranteed by Costamare Inc. and are secured by a first priority mortgage over the vessels, charter assignments, account assignments and general assignments of earnings, insurances and requisition compensation.

As of April 20, 2016, there was $230.1 million outstanding under the CLC Sale and Leaseback, and, as of the same date there was no undrawn available credit.

DnB — Quentin

On August 16, 2011, our subsidiaries, Quentin Shipping Co., Undine Shipping Co., and Sander Shipping Co., as borrowers, entered into a seven-year loan for up to $229.2 million, with DnB NOR Bank ASA, ING Bank, ABN Amro Bank and Bank of America N.A., which we refer to in this section as the “DnB—Quentin credit facility”. The purpose of this facility was to finance part of the acquisition and construction cost of Hulls S4020, S4022 and S4024, and the facility is divided into three tranches, one for each newbuild vessel. On July 3, 2013, we entered into the first supplemental agreement with the lenders which amended the repayment schedule and added V.Ships Greece as an approved manager. On September 13, 2013, we entered into the second supplemental agreement with the lenders which further amended the repayment schedule (as reflected below).

The interest rate under the DnB—Quentin credit facility is LIBOR plus an agreed margin. The credit facility provides that the borrowers must repay the loan by twenty-eight consecutive quarterly installments, the first twenty-seven (1-27) in the amount of $1.3 million per tranche each, commencing at the time of delivery of Hulls S4020, S4022 and S4024, and the amount of the twenty-eighth installment shall be $42.0 million per tranche.

The obligations under the DnB—Quentin credit facility are guaranteed by Costamare Inc. and are secured by assignment of refund guarantees and shipbuilding contracts, a first priority mortgage over the vessels upon delivery, charter assignments, account assignments, master agreement assignment and general assignments of earnings, insurances and requisition compensation.

As of April 20, 2016, there was $188.5 million outstanding under the DnB—Quentin credit facility, and, as of the same date there was no undrawn available credit.

DnB — Raymond

On October 12, 2011, our subsidiaries, Raymond Shipping Co. and Terance Shipping Co., as borrowers, entered into a seven-year loan for up to $152.8 million, with DnB NOR Bank ASA, Mega International Commercial Bank Co., Ltd., Cathay United Bank, Chinatrust Commercial Bank, Hua Nan Commercial Bank, Ltd. and Land Bank of Taiwan, which we refer to in this section as the “DnB—Raymond credit facility”. The purpose of this facility was to finance part of the acquisition and construction cost of Hulls S4021 and S4023, and the facility is divided into two tranches, one for each newbuild vessel.

The interest rate under the DnB—Raymond credit facility is LIBOR plus an agreed margin. The credit facility provides that the borrowers must repay the loan by twenty-eight consecutive quarterly installments, the first twenty-seven (1-27) in the amount of $1.4 million per tranche each,

commencing at the time of delivery of Hulls S4021 and S4023, and the amount of the twenty-eighth installment shall be $39.6 million per tranche.

The obligations under the DnB—Raymond credit facility are guaranteed by Costamare Inc. and are secured by assignment of refund guarantees and shipbuilding contracts, a first priority mortgage over the vessels upon delivery, charter assignments, account assignments, master agreement assignment and general assignments of earnings, insurances and requisition compensation.

As of April 20, 2016, there was $124.1 million outstanding under the DnB-Raymond credit facility, and, as of the same date there was no undrawn available credit.

ING

On April 7, 2011, Costamare Inc., as borrower, entered into an eight-year loan, for up to $140.0 million, with ING Bank N.V., London Branch, which we refer to in this section as the “ING credit facility”. The purpose of this facility was to finance part of the acquisition and construction cost of Hulls S4010 and S4011, and the facility is divided into two tranches, one for each newbuild vessel. On April 8, 2013, we executed a supplemental agreement that amended the repayment schedule of the loan. On July 24, 2015, we executed a supplemental agreement under which the lender agreed to a change of flag of the financed vessels.

The interest rate under the ING credit facility is LIBOR plus an agreed margin. The credit facility provides that the borrower must repay the loan by 16 consecutive semiannual installments, the first fifteen (1-15) in the amount of 1/30 of the loan outstanding, commencing at the time of delivery of Hulls S4010 and S4011, and the amount of the sixteenth and final installment shall be equal to 15/30 of the loan outstanding at the time of delivery of Hulls S4010 and S4011.

The obligations under the ING credit facility are guaranteed by Jodie Shipping Co. and Kayley Shipping Co. Our obligations under the ING credit facility are secured by assignment of refund guarantees and shipbuilding contracts, a first priority mortgage over the vessels upon delivery, charter assignments, account assignments, master agreement assignment and general assignments of earnings, insurances and requisition compensation.

On April 20, 2016, there was $107.0 million outstanding under the ING credit facility, and, as of same date, there was no undrawn available credit.

RBS

On November 19, 2010, Costamare Inc., as borrower, entered into a $120.0 million term loan facility with The Royal Bank of Scotland plc (the “RBS credit facility”), which was available for drawing for up to 18 months. The loan tranches have maturities ranging from three to seven years.

We have used the RBS credit facility to finance part of the acquisition cost of five secondhand vessels, the MSC Methoni , the MSC Romanos , the MSC Ulsan , the MSC Koroni (ex. Koroni ) and the MSC Itea (ex. Kyparissia ).

The interest rate under the RBS facility is LIBOR plus an agreed margin. The RBS facility provides for different repayment of each of the five tranches.

The MSC Methoni tranche will be repaid by thirty-two consecutive quarterly payments, the first thirty-one (1-31) in the amount of $1.05 million and a final installment in the amount of $1.05 million, together with a balloon payment in the amount of $8.4 million.

The MSC Romanos tranche will be repaid by thirty-two consecutive quarterly payments, the first thirty-one (1-31) in the amount of $0.96 million and a final installment in the amount of $0.96 million, together with a balloon payment in the amount of $7.7 million.

The MSC Ulsan tranche will be repaid by thirty-two consecutive quarterly payments, the first thirty-one (1-31) in the amount of $0.53 million and a final installment in the amount of $0.53 million, together with a balloon payment in the amount of $4.2 million.

The MSC Koroni (ex. Koroni ) and MSC Itea (ex. Kyparissia ) tranches will each be repaid by twelve consecutive quarterly payments, the first eleven (1-11) in the amount of $0.47 million per tranche and a final installment in the amount of $0.47 million, together with a balloon payment in

the amount of $1.9 million per tranche. In May 2014, the Company repaid the outstanding amount at the time under the MSC Koroni (ex. Koroni ) tranche, repaying $4.2 million. In May 2015, the Company repaid the outstanding amount at the time under the MSC Itea (ex. Kyparissia ) tranche, repaying $2.3 million.

The obligations under the RBS credit facility are guaranteed by the various owners of the mortgaged vessels. Our obligations under the RBS credit facility is secured by mortgages over each financed vessel, account charges, charter assignments, swap assignment and general assignments of earnings, insurances and requisition compensation.

As of April 20, 2016, there was $56.9 million outstanding under the RBS credit facility, and, as of the same date there was no undrawn available credit.

Costamare

On July 22, 2008, Costamare Inc., as borrower, entered into a ten-year, $1.0 billion credit facility comprised of a $700.0 million term loan facility and a $300.0 million revolving credit facility, which we refer to in this section as the “Costamare credit facility”. The purpose of the revolving credit facility was to finance part of the acquisition costs of vessels to be acquired or part of the market value of vessels owned by our subsidiaries. The purpose of the term loan facility was to finance general corporate and working capital purposes. On April 23, 2010, we entered into the first supplemental agreement with the lenders which released two of our subsidiary guarantors and the mortgages over their vessels, and replaced them with mortgages over one other vessel. On June 22, 2010, we entered into the second supplemental agreement with the lenders, which modified certain covenants (as detailed below). On September 6, 2011, we entered into a third supplemental agreement documenting the amalgamation of the Costamare credit facility’s compounds and the fixing of the remaining installment payments. On December 17, 2012, we entered into a fourth supplemental agreement which released two of our subsidiary guarantors and the mortgages over their vessels, and replaced them with mortgages over two other vessels. On May 28, 2013, we entered into a fifth supplemental agreement under which the lenders agreed to the change of flags of five of the Company’s vessels and to the transfer of the technical management of two of the Company’s vessels to V.Ships Greece. On August 30, 2013, we entered into a sixth supplemental agreement which released one of the Company’s subsidiary guarantors and the mortgage over its vessel, and replaced it with mortgages over two other vessels. On July 2, 2014, we entered into a seventh supplemental agreement in connection with the ZIM restructuring. On August 25, 2015 we entered into an eighth supplemental agreement under which the lenders agreed to a change of flags of six of the Company’s vessels and to the transfer of the technical management of three of the Company’s vessels to Shanghai Costamare.

The interest rate under the Costamare credit facility is LIBOR plus an agreed margin. The Costamare credit facility provides for repayment by forty consecutive quarterly installments, the first four (1-4) in the amount of $6.5 million and the next eight (5-12) in the amount of $9.0 million. The final twenty-eight (13-40) installments, and the balloon installment repayable together with the fortieth (40th) installment, are to be calculated by using a formula that takes into account the then outstanding amount of this facility and the TEU weighted age of the mortgaged vessels. Following the date of payment of the twelfth installment on June 30, 2011, the term loan facility and the revolving credit facility were combined, the final twenty-eight (13-40) installments were fixed in the amount of $22.5 million each, and the balloon installment was fixed in the amount of $271.3 million.

The obligations under the Costamare credit facility are guaranteed by the various owners of the mortgaged vessels. Our obligations under this credit facility are secured by mortgages over the vessels owned by our subsidiaries, who are the guarantors, and general assignments of earnings, insurances and requisition compensation, account pledges, charter assignments and a master agreement assignment.

As of April 20, 2016, there was $473.5 million outstanding under the Costamare credit facility, and, as of same date, there was no undrawn available credit.

Credit Agricole—Costis (ex. Emporiki-Costis)

On May 12, 2008, our subsidiaries, Christos Maritime Corporation and Costis Maritime Corporation, as joint and several borrowers, entered into a ten-year, $150.0 million credit facility with Emporiki Bank of Greece S.A., which we refer to in this section as the “Credit Agricole—Costis credit facility”. The loan is divided into two tranches: a Tranche A loan in the amount of $75.0 million to Christos Maritime Corporation, and a Tranche B loan in the amount of $75.0 million to Costis Maritime Corporation. The purpose of this facility was to finance part of the market value of two vessels, the Sealand Washington and the Sealand New York . On January 28, 2009, we entered into a first supplemental agreement to temporarily increase the margin and on November 19, 2012, we entered into a second supplemental agreement to change the applicable law. On August 9, 2013, we entered into a third supplemental agreement in order to reflag the two vessels and change their management to V.Ships Greece. On September 14, 2015, we entered into a fourth supplemental agreement to execute a pledge deposit in favor of the lender.

The interest rate under the Credit Agricole—Costis credit facility is LIBOR plus an agreed margin. The Credit Agricole—Costis credit facility provides that our subsidiaries, jointly and severally, repay the loan by twenty consecutive semi-annual payments, the first nineteen (1-19) in the amount of $2.25 million for each tranche, and a final twentieth installment in the amount of $2.25 million, together with a balloon payment in the amount of $30.0 million for each tranche.

The obligations under the Credit Agricole—Costis credit facility are guaranteed by Costamare Inc. and are secured by first priority mortgages over the vessels Sealand Washington and Sealand New York , account pledges, general assignments of earnings, insurances and requisition compensation, and charter assignments.

On December 12, 2012, the loan agreement was assigned and transferred from Emporiki Bank of Greece S.A. to Credit Agricole.

As of April 20, 2016, there was $82.5 million outstanding under the Credit Agricole—Costis credit facility, and, as of same date, there was no undrawn available credit.

Unicredit

On October 6, 2011, Costamare Inc., as borrower, entered into a $120.0 million loan facility with Unicredit Bank AG, which we refer to in this section as the Unicredit credit facility. The purpose of the facility is to partly finance the aggregate market values of eleven of our existing containerships. Furthermore, on June 29, 2012, the Company entered into a supplemental agreement for a further amount of $11.3 million to finance the acquisition of the vessel the Stadt Luebeck . On April 8, 2013, we entered into a second supplemental agreement to substitute one of the vessels financed under the facility with another vessel, and on August 29, 2013, we entered into a third supplemental agreement to substitute two of the vessels financed under the facility with two other vessels. On April 11, 2014, we entered into a fourth supplemental agreement to obtain an additional advance for the acquisition of a secondhand vessel and on May 28, 2014, we entered into a fifth supplemental agreement to substitute one of the vessels financed under the facility with a different vessel. On February 5, 2015, we entered into a side letter under which the lender accepted the replacement of the charterer of one of the Company’s vessels. On July 29, 2015, we entered into a side letter to transfer the technical management of one of the Company’s vessels to Shanghai Costamare.

The interest rate under the Unicredit credit facility is LIBOR plus an agreed margin. After the prepayments with the proceeds of the disposals of the Konstantina and the Akritas, the repayment schedule was changed so that starting from September 23, 2014 the loan will be repaid by nineteen consecutive quarterly payments, the first five (1-5) in the amount of $4.3 million, the next thirteen (6-18) in the amount of $2.7 million, and a final installment in the amount of $2.7 million, together with a balloon payment in the amount of $39.5 million.

Our obligations under the Unicredit credit facility are secured by guarantees of the various owners of the mortgaged vessels, mortgages over each financed vessel, account charges, charter assignments, swap assignment and general assignments of earnings, insurances and requisition compensation.

As of April 20, 2016, there was $65.5 million outstanding under the Unicredit credit facility, and, as of the same date there was no undrawn available credit.

HSBC — Mas

On January 30, 2008, our subsidiary, Mas Shipping Co., as borrower, entered into a ten-year, $75.0 million credit facility with HSBC Bank, which we refer to in this section as the “HSBC—Mas credit facility”. The purpose of this facility was to finance part of the purchase price of a vessel, the Maersk Kokura . On February 5, 2015, we entered into a side letter under which the lender accepted the replacement of the charterer of Maersk Kokura .

The interest rate under the HSBC—Mas credit facility is LIBOR plus an agreed margin. The repayment terms provide for Mas Shipping Co. to pay HSBC by twenty consecutive semi-annual installments, the first two (1-2) in the amount of $1.0 million, the following two (3-4) in the amount of $1.5 million, the following two (5-6) each in the amount of $2.0 million, the following four (7-10) in the amount of $3.75 million, the following two (11-12) in the amount of $4.0 million, and the following eight (13-20) in the amount of $4.13 million, plus a balloon payment payable together with the twentieth installment in the amount of $10.0 million.

The obligations under the HSBC—Mas credit facility are guaranteed by Costamare Inc. and are secured by a first priority mortgage over the vessel, Maersk Kokura , an account pledge, a general assignment of earnings, insurances, requisition compensation and charter rights.

As of April 20, 2016, there was $26.5 million outstanding under the HSBC—Mas credit facility, and, as of same date, there was no undrawn available credit.

Credit Agricole — Capetanissa

On June 29, 2006, our subsidiary, Capetanissa Maritime Corporation, as borrower, entered into a twelve-year, $90.0 million credit facility with Credit Agricole, which we refer to in this section as the “Credit Agricole — Capetanissa credit facility”. The purpose of this facility was to finance part of the acquisition and collateral cost of a vessel, the Cosco Beijing . On July 27, 2015, we executed a supplemental agreement under which the lender agreed to a change of flag of the vessel.

The interest rate under the Credit Agricole—Capetanissa credit facility is LIBOR plus an agreed margin. The Credit Agricole—Capetanissa credit facility provides that Capetanissa Maritime Corporation must repay the loan by twenty-four consecutive semi-annual installments in the amount of $2.5 million, plus a balloon payment payable together with the twenty-fourth installment in the amount of $30.0 million.

The obligations under the Credit Agricole—Capetanissa credit facility are guaranteed by Costamare Inc. and are secured by a first priority mortgage over the vessel, Cosco Beijing , an account pledge, and a general assignment of earnings, insurances, requisition compensation and charter rights.

As of April 20, 2016, there was $42.5 million outstanding under the Credit Agricole—Capetanissa credit facility, and, as of same date, there was no undrawn available credit.

RBS — Rena

On February 17, 2006, our subsidiary, Rena Maritime Corporation, as borrower, entered into a twelve-year, $90.0 million credit facility with The Royal Bank of Scotland plc, which we refer to in this section as the “RBS — Rena credit facility”. The purpose of this facility was to finance part of the purchase price of a vessel, the Cosco Guangzhou , at a contract price of $90.8 million. On August 27, 2015, we executed a supplemental agreement under which the lender agreed to a change of flag of the vessel.

The interest rate under the RBS — Rena credit facility is LIBOR plus an agreed margin. The RBS — Rena credit facility provides for twenty-four semi-annual installments in the amount of $2.5 million each, plus a balloon payment of $30.0 million together with the twenty-fourth installment.

The obligations under the RBS — Rena credit facility are guaranteed by Costamare Inc. and are secured by a first priority mortgage over the vessel Cosco Guangzhou , an account charge and a general assignment of our earnings, insurances and requisition compensation of the vessel.

As of April 20, 2016, there was $40.0 million outstanding under the RBS — Rena credit facility, and, as of same date, there was no undrawn available credit.

Alpha — Montes

On December 7, 2007, our subsidiaries, Montes Shipping Co. and Kelsen Shipping Co., as joint and several borrowers, entered into a ten-year, $150.0 million credit facility with Alpha Bank A.E., which we refer to in this section as the “Alpha—Montes credit facility”. The lender assigned its obligations under the Alpha—Montes credit facility to Alpha Shipping Finance Limited in 2014. The loan is divided into two tranches: Tranche A in the amount of $75.0 million to Montes Shipping Co. and Tranche B in the amount of $75.0 million to Kelsen Shipping Co. The purpose of this facility was to finance part of the acquisition costs of two vessels, the Maersk Kawasaki and the Maersk Kure .

The interest rate under the Alpha—Montes credit facility is LIBOR plus an agreed margin. The Alpha—Montes credit facility initially provided that our subsidiaries repay the loan, jointly and severally, by twenty consecutive semi-annual payments, the first six (1-6) in the amount of $4.0 million each, the next fourteen (7-20) in the amount of $6.0 million each, plus a balloon payment, payable together with the twentieth installment, in the amount of $42.0 million. On January 27, 2016, we entered into a supplemental agreement with the bank in order to extend the repayment schedule under the Alpha—Montes credit facility to ten consecutive semi-annual variable installments from June 2016 until December 2020 and a balloon payment of $12.0 million payable together with the last installment.

The obligations under the Alpha—Montes credit facility are guaranteed by Costamare Inc. and are secured by first priority mortgages over the vessels, the Maersk Kawasaki and the Maersk Kure , general assignments of earnings, insurances, requisition compensation and charter assignments.

As of April 20, 2016, there was $66.0 million outstanding under Tranche A and Tranche B in aggregate, of the Alpha—Montes credit facility, and, as of same date, there was no undrawn available credit.

CEXIM — Adele

On January 14, 2011, our subsidiaries, Adele Shipping Co., Bastian Shipping Co. and Cadence Shipping Co., as borrowers, entered into a ten-year loan, which also provides for a Lenders’ early repayment option in year seven, for up to $203.3 million, with The Export-Import Bank of China, DnB NOR Bank ASA, and China Everbright Bank, which we refer to in this section as the “CEXIM—Adele credit facility”. The purpose of this facility was to finance part of the acquisition and construction cost of Hulls H1068A, H1069A, and H1070A, and the facility was divided into three tranches, one for each newbuild vessel. In January, March and April 2014, concurrently with the delivery of each vessel, the subsidiaries used a portion of the proceeds from the CLC Sale and Leaseback to prepay the balance of the CEXIM—Adele credit facility which had been used to finance the predelivery price of the respective hulls.

Covenants and Events of Default

The credit facilities impose certain operating and financial restrictions on us. These restrictions in our existing credit facilities generally limit Costamare Inc. and our subsidiaries’ ability to, among other things:

•

pay dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends;

•

purchase or otherwise acquire for value any shares of the subsidiaries’ capital;

•

make or repay loans or advances, other than repayment of the credit facilities;

•

make investments in other persons;

•

sell or transfer significant assets, including any vessel or vessels mortgaged under the credit facilities, to any person, including Costamare Inc. and our subsidiaries;

•

create liens on assets; or

•

allow the Konstantakopoulos family’s direct or indirect holding in Costamare Inc. to fall below 40% of the total issued share capital.

Our existing credit facilities also require Costamare Inc. and certain of our subsidiaries to maintain the aggregate of (a) the market value, primarily on an inclusive charter basis, of the mortgaged vessel or vessels and (b) the market value of any additional security provided to the lenders, above a percentage ranging between 80% to 125% of the then outstanding amount of the credit facility and any related swap exposure.

The minimum value covenant must be determined at the expense of the borrower at any such time as the lenders may request.

Costamare Inc. is required to maintain compliance with the following financial covenants:

•

the ratio of our total liabilities (after deducting all cash and cash equivalents) to market value adjusted total assets (after deducting all cash and cash equivalents) may not exceed 0.75:1;

•

the ratio of EBITDA over net interest expense must be equal to or higher than 2.5:1;

•

the aggregate amount of all cash and cash equivalents may not be less than the greater of (i) $30 million or (ii) 3% of the total debt; provided, however, that under two of our credit facilities, a minimum cash amount equal to 3% of the loan outstanding must be maintained in accounts with the lender;

•

the market value adjusted net worth must at all times exceed $500 million; and

•

the ratio of net funded debt to total net assets must be less than 80% on a charter inclusive valuation basis.

Our credit facilities contain customary events of default, including nonpayment of principal or interest, breach of covenants or material inaccuracy of representations, default under other indebtedness in excess of a threshold and bankruptcy.

The Company is not in default under any of its credit facilities.

Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

The shipping industry is a capital intensive industry, requiring significant amounts of investment. Much of this investment is provided in the form of long-term debt. Our debt usually contains interest rates that fluctuate with the financial markets. Increasing interest rates could adversely impact future earnings.

Our interest expense is affected by changes in the general level of interest rates, particularly LIBOR. As an indication of the extent of our sensitivity to interest rate changes, an increase of 100 basis points would have decreased our net income and cash flows during the year ended December 31, 2015 by approximately $3.7 million based upon our debt level during 2015.

For more information on our interest rate risk see “Item 11. Quantitative and Qualitative Disclosures About Market Risk—A. Quantitative Information About Market Risk—Interest Rate Risk”.

Interest Rate Swaps

We have entered into interest rate swap agreements converting floating interest rate exposure into fixed interest rates in order to economically hedge our exposure to fluctuations in prevailing market interest rates. For more information on our interest rate swap agreements, refer to Notes 2, 19 and 20 to our financial statements included at the end of this annual report.

Foreign Currency Exchange Risk

We generate all of our revenue in U.S. dollars, but a substantial portion of our vessel operating expenses, primarily crew wages, are in currencies other than U.S. dollars (mainly in Euro), and any gain or loss we incur as a result of the U.S. dollar fluctuating in value against those currencies is included in vessel operating expenses. As of December 31, 2015, approximately 36.6% of our outstanding accounts payable were denominated in currencies other than the U.S. dollar (mainly in Euro). We hold cash and cash equivalents mainly in U.S. dollars.

As of December 31, 2015, the Company was engaged in 16 Euro/U.S. dollar contracts totaling $20 million at an average forward rate of Euro/U.S. dollar 1.0725, expiring in monthly intervals up to August 2016.

As of December 31, 2014, the Company was engaged in nine Euro/U.S. dollar contracts totaling $22.5 million at an average forward rate of Euro/U.S. dollar 1.273, expiring in monthly intervals up to September 2015.

As of December 31, 2013, the Company was not engaged in any Euro/U.S. dollar foreign currency agreements.

We recognize these financial instruments on our balance sheet at their fair value. These foreign currency forward contracts do not qualify as hedging instruments, and thus we recognize changes in their fair value in our earnings.

Capital Expenditures

On September 21, 2010, we contracted for the construction and purchase of three newbuild vessels, which were delivered in January, March and April 2014. On January 28, 2011, we contracted for two additional newbuild vessels, which were delivered in March 2013. On April 20, 2011, we contracted for the construction and purchase of five additional newbuild vessels, which were delivered between June and November 2013. From 2013 through today, pursuant to the Framework Deed with York, jointly-owned entities entered into shipbuilding contracts for the construction of 12 container vessels to be delivered by second quarter 2018. The Company has agreed to participate in each of the newbuilding contracts by investing between 25% and 75% of the share capital in the jointly-owned entities. The total aggregate price for the 12 newbuild vessels on order, of approximately 134,000 TEU capacity in aggregate, is $1.1 billion, payable in installments until delivery.

As of April 20, 2016, our share of the outstanding commitments relating to the 12 contracted newbuilds aggregating approximately $282.4 million payable in installments until the vessels are delivered through the second quarter of 2018, out of which $177.8 million will be funded through committed sale and leaseback transactions. These amounts represent our interest in the relevant jointly-owned entities with York. In addition, dry-docking expenses totaled approximately $9.5 million in 2015, excluding off-hire costs.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of those financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure at the date of our financial statements. Actual results may differ from these estimates under different assumptions and conditions. Critical accounting policies are those that reflect significant judgments of uncertainties and potentially result in materially different results under different assumptions and conditions. We describe below what we believe are our most critical accounting policies, because they generally involve a comparatively higher degree of judgment in their application. For a description of all our significant accounting policies, see Note 2 to our consolidated financial statements included elsewhere in this annual report.

Vessel Impairment

We evaluate the carrying amounts of our vessels to determine if events have occurred that would require modification to their carrying values or useful lives. In evaluating useful lives and carrying values of long-lived assets, we review certain indicators of potential impairment, such as undiscounted projected operating cash flows, vessel sales and purchases, business plans and overall market conditions.

The economic and market conditions as at December 31, 2014 and 2015, including the significant disruptions in the global credit markets in the prior years, had broad effects on participants in a wide variety of industries. Time charter rates and charter free vessel values continued to decline during 2014 and 2015 as reduced demand for transportation services occurred during a time of increased supply of vessels, conditions that we consider to be indicators of possible impairment.

In developing estimates of future undiscounted cash flows, we make assumptions and estimates about the vessels’ future performance, with the significant assumptions being related to time charter rates, vessels’ operating expenses, vessels’ capital expenditures, vessels’ residual value, fleet utilization and the estimated remaining useful life of each vessel. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends as well as future expectations.

We determine undiscounted projected net operating cash flows for each vessel and compare it to the vessel’s carrying value. To the extent impairment indicators are present, the undiscounted projected net operating cash flows are determined by considering the charter revenues from existing time charters for the fixed fleet days and an estimated daily time charter rate for the unfixed days (based on the most recent ten year historical average rates) over the remaining estimated life of the vessel assumed to be 30 years from the delivery of the vessel from the shipyard, expected outflows for vessels’ operating expenses assuming an expected increase in expenses based on our historical data and an average inflation rate of 2.76% (in line with the average world Consumer Price Index forecasted), planned dry-docking and special survey expenditures, management fees expenditures and fleet utilization of 99.2% (excluding the scheduled off-hire days for planned dry-dockings and special surveys which are determined separately ranging from 16 to 30 days depending on the size and age of each vessel) based on historical experience. We consider the most recent ten year historical average rates to be a reasonable estimation of expected future charter rates over the remaining useful life of our vessels since such historical average represents a full shipping cycle that captures the highs and lows of the market. We utilize the standard deviation in order to eliminate the outliers in the period before computing the historic ten year average rates. The salvage value used in the impairment test is estimated at approximately $300 per lightweight ton in accordance with the vessels’ depreciation policy.

Based on our analysis, the undiscounted projected net operating cash flows for each vessel were in excess compared to each vessel’s carrying value, and accordingly, no impairment of vessels existed as of December 31, 2014 and 2015.

As noted above, we determine projected cash flows for unfixed days using an estimated daily time charter rate based on the most recent 10 year historical average rates. We consider this approach to be reasonable and appropriate. However, charter rates are subject to change based on a variety of factors that we cannot control and we note that charter rates over the last few years have been, on average, below their historical 10 year average. If as at December 31, 2014 and 2015, we were to utilize an estimated daily time charter equivalent for our vessels’ unfixed days based on the most recent five year, three year or one year historical average rates without adjusting for inflation (or another growth assumption), the results would be the following:


	December 31, 2014					December 31, 2015
	No. of Vessels ^(*)		Amount ($ US Million) ^(**)			No. of Vessels ^(*)		Amount ($ US Million) ^(**)
5-year historical average rate		5		$	30		3		$	8
3-year historical average rate		9			72		5			16
1-year historical average rate		17			131		10			14

(*)

Number of vessels the carrying value of which would not have been recovered.

(**)

Aggregate carrying value that would not have been recovered.

An internal analysis, which used a discounted cash flow model utilizing inputs and assumptions based on market observations as of December 31, 2015, suggests that 25 of our 54 vessels in the water may have current market values below their carrying values (17 of our 55 vessels in the water as at December 31, 2014). However, we believe that, with respect to these 25 vessels, all of which are currently under time charters, we will recover their carrying values through the end of their useful lives, based on their undiscounted cash flows. We currently do not expect to sell any of these vessels, or otherwise dispose of them, significantly before the end of their estimated useful life.

Although we believe that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective. There can be no assurance as to how long charter rates and vessel values will remain at their current low levels or whether they will improve by any significant degree. Charter rates may remain at depressed levels for some time which could adversely affect our revenue and profitability, and future assessments of vessel impairment.

While the Company intends to continue to hold and operate its vessels, the following table presents information with respect to the carrying amount of the Company’s vessels and indicates whether their estimated market values based on an internal discounted cash flow analysis are below their carrying values as of December 31, 2015 and 2014. The carrying value of each of the Company’s vessels does not necessarily represent its fair market value or the amount that could be obtained if the vessel were sold. The Company’s estimates of market values assume that the vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified as being in class without recommendations of any kind. In addition, because vessel values are highly volatile, these estimates may not be indicative of either the current or future prices that the Company could achieve if it were to sell any of the vessels. The Company would not record an impairment for any of the vessels for which the fair market value is below its carrying value unless and until the Company either determines to sell the vessel for a loss or determines that the vessel’s carrying amount is not recoverable. The Company believes that the undiscounted projected net operating cash flows over the estimated remaining useful lives for those vessels that have experienced declines in estimated market values below their carrying values exceed such vessels’ carrying values as of December 31, 2015, and accordingly has not recorded an impairment charge.



	Vessel	Capacity (TEU)	Built	Acquisition Date	Carrying Value December 31, 2014 ($ US Million) ⁽¹⁾		Carrying Value December 31, 2015 ($ US Million) ⁽¹⁾

1	Cosco Hellas	9,469	2006	July 2006		70.5		67.6

2	Cosco Guangzhou	9,469	2006	February 2006		69.3		67.6

3	Cosco Beijing	9,469	2006	June 2006		70.2		67.4

4	Cosco Yantian	9,469	2006	April 2006		70.0		67.2

5	Cosco Ningbo	9,469	2006	March 2006		69.5		67.7

6	MSC Azov	9,403	2014	January 2014		83.1		80.6

7	MSC Ajaccio	9,403	2014	March 2014		83.6		81.0

8	MSC Amalfi	9,403	2014	April 2014		83.9		81.3

9	MSC Athens	8,827	2013	March 2013		93.3		90.3

10	MSC Athos	8,827	2013	April 2013		92.9		90.0

11	Valor	8,827	2013	June 2013		93.6		90.7

12	Value	8,827	2013	June 2013		93.6		90.6

13	Valiant	8,827	2013	August 2013		94.6		91.6

14	Valence	8,827	2013	September 2013		95.0		92.0

15	Vantage	8,827	2013	November 2013		94.9		92.0

16	Navarino,*	8,531	2010	May 2010		105.3		102.2

17	Maersk Kure,*	7,403	1996	December 2007		65.2		60.1

18	Maersk Kokura,*	7,403	1997	February 2008		67.9		63.1

19	Maersk Kawasaki,*	7,403	1997	December 2007		68.1		63.3



	Vessel	Capacity (TEU)	Built	Acquisition Date	Carrying Value December 31, 2014 ($ US Million) ⁽¹⁾		Carrying Value December 31, 2015 ($ US Million) ⁽¹⁾

20	MSC Methoni	6,724	2003	October 2011		53.0		50.5

21	Sealand Michigan	6,648	2000	October 2000		35.2		34.5

22	Sealand Illinois	6,648	2000	December 2000		36.5		34.6

23	Sealand NY	6,648	2000	May 2000		34.0		33.1

24	Sealand Washington	6,648	2000	August 2000		35.7		33.8

25	Maersk Kobe	6,648	2000	June 2000		34.4		33.5

26	Maersk Kalamata	6,644	2003	June 2003		44.6		42.5

27	Maersk Kingston	6,644	2003	April 2003		44.4		42.3

28	Maersk Kolkata	6,644	2003	January 2003		44.0		41.8

29	Venetiko**	5,928	2003	January 2013		20.8		20.2

30	MSC Romanos,*	5,050	2003	August 2011		48.1		45.8

31	Zim Shanghai	4,992	2002	October 2002		32.0		30.3

32	Zim New York	4,992	2002	September 2002		31.8		30.2

33	Zim Pireaus,*	4,992	2004	May 2004		32.4		30.9

34	Halifax Express**	4,890	2000	November 2000		28.4		28.0

35	Oakland Express**	4,890	2000	October 2000		29.7		28.0

36	Singapore Express,*	4,890	2000	August 2000		27.8		27.2

37	MSC Mykonos	4,828	1988	January 2005		16.1		13.2

38	MSC Mandraki**	4,828	1988	October 2004		16.6		13.9

39	MSC Ulsan,*	4,132	2002	February 2012		27.1		25.7

40	MSC Koroni	3,842	1998	May 2012		11.4		10.9

41	MSC Itea,*	3,842	1998	May 2012		11.4		10.8

42	Karmen,*	3,351	1991	November 2010		9.4		8.6

43	Marina,*	3,351	1992	February 2011		8.7		8.0

44	MSC Challenger	2,633	1986	May 1998		3.1		—

45	Lakonia	2,586	2004	December 2014		8.2		8.8

46	Areopolis,*	2,474	2000	May 2014		9.3		9.7

47	Messini,*	2,458	1997	August 2012		6.4		6.0

48	MSC Reunion**	2,024	1992	March 2011		8.1		7.2

49	MSC Namibia II**	2,023	1991	March 2011		7.8		7.1

50	MSC Sierra II**	2,023	1991	March 2011		8.0		7.1

51	MSC Pylos**	2,020	1991	January 2011		5.9		5.5

52	Neapolis,*	1,645	2000	April 2014		10.4		9.8

53	Prosper,*	1,504	1996	March 2011		8.2		7.5

54	Zagora,*	1,162	1995	January 2011		6.4		7.3

55	Stadt Luebeck,*	1,078	2001	August 2012		10.3		9.8

				TOTAL		2,370.1		2,270.4

⁽¹⁾

For impairment test calculation, Carrying Value includes the unamortized balance of dry-docking cost as at December 31, 2014 and 2015.

Indicates container vessels which we believe, as of December 31, 2014, may have market values below their carrying values. As of December 31, 2014, we believe that the aggregate carrying value of these 17 vessels was $147.7 million more than their market value.

Indicates container vessels which we believe, as of December 31, 2015, may have market values below their carrying values. As of December 31, 2015, we believe that the aggregate carrying value of these 25 vessels was $277.7 million more than their market value.

Vessels are stated at cost, which consists of the contract price and any material expenses incurred upon acquisition (initial repairs, improvements and delivery expenses, interest and on-site supervision costs incurred during the construction periods). Subsequent expenditures for conversions

and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels.

We review for impairment long-lived assets held and used whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In this respect, we review our fleet for impairment on a vessel by vessel basis. When the estimate of undiscounted projected net operating cash flows, excluding interest charges, expected to be generated by the use of the vessel is less than its carrying amount, we evaluate the vessel for impairment loss. The impairment loss is determined by the difference between the carrying amount of the vessel and the fair value of the vessel. If our estimate of undiscounted projected net operating cash flows for any vessel is lower than the vessel’s carrying value, the carrying value is written down, by recording an impairment loss to operations, to the vessel’s fair market value if the fair market value is lower than the vessel’s carrying value.

Vessel Lives and Depreciation

We depreciate our vessels based on a straight-line basis over the expected useful life of each vessel, which is 30 years from the date of their initial delivery from the shipyard, which we believe is within industry standards and represents the most reasonable useful life for each of our vessels. Depreciation is based on the cost of the vessel less its estimated residual value which is equal to the product of vessels’ lightweight tonnage and estimated scrap rate (approximately $300 per lightweight ton). Secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful lives. A decrease in the useful life of a vessel or in its residual value would have the effect of increasing the annual depreciation charge. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its useful life is adjusted to end at the date such regulations become effective.

Voyage Revenue Recognition

Revenues are generated from time charters and are usually paid 15 days in advance. Time charters with the same charterer are accounted for as separate agreements according to the terms and conditions of each agreement. Time charter revenues over the term of the time charter are recorded as service is provided, when they become fixed and determinable. Revenues from time charters providing for varying annual rates are accounted for as operating leases and thus recognized on a straight-line basis as the average revenue over the rental periods of such agreements, as service is performed. Some of our time charters provide that the charter rate will be adjusted to a market rate for the final months of their respective terms. For purposes of determining the straight-line revenue amount, we exclude these periods and treat the charter as expiring at the end of the last fixed rate period. A voyage is deemed to commence upon the completion of discharge of the vessel’s previous cargo and is deemed to end upon the completion of discharge of the current cargo, provided an agreed non-cancelable time charter between the Company and the charterer is in existence, the charter rate is fixed or determinable and collectability is reasonably assured. Unearned revenue includes cash received prior to the balance sheet date for which all criteria to recognize as revenue have not been met, including any unearned revenue resulting from time charters providing for varying annual rates, which are accounted for on a straight-line basis. Unearned revenue also includes the unamortized balance of the liability associated with the acquisition of secondhand vessels with time charters attached that were acquired at values below fair market value at the date the acquisition agreement is consummated.

Derivative Financial Instruments

We enter into interest rate swap contracts to manage our exposure to fluctuations of interest rate risks associated with specific borrowings. Interest rate differentials paid or received under these swap agreements are recognized as part of interest expense related to the hedged debt. All derivatives are recognized in the consolidated financial statements at their fair value. On the inception date of the derivative contract, we designate the derivative as a hedge of a forecasted transaction or the variability of cash flow to be paid. Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in other comprehensive income until earnings are affected by the forecasted transaction or the variability of cash flow and are then reported in earnings. Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in earnings in the period in which those fair value changes have occurred. Realized gains or losses on early termination of the derivative instruments are also classified in earnings in the period of termination of the respective derivative instrument. We may redesignate an undesignated hedge after its inception as a hedge but then will consider its non-zero value at redesignation in its assessment of effectiveness of the cash flow hedge.

We formally document all relationships between hedging instruments and hedged terms, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as cash flow hedges to specific forecasted transactions or variability of cash flow.

We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flow of hedged items. We consider a hedge to be highly effective if the change in fair value of the derivative hedging instrument is within 80% to 125% of the opposite change in the fair value of the hedged item attributable to the hedged risk. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, we discontinue hedge accounting prospectively, in accordance with ASC 815 “Derivatives and Hedging”.

We also enter forward exchange rate contracts to manage our exposure to currency exchange risk on certain foreign currency liabilities. We have not designated these forward exchange rate contracts for hedge accounting.

C. Research and Development, Patents and Licenses, etc.

We incur from time to time expenditures relating to inspections for acquiring new vessels. Such expenditures are insignificant and are expensed as they are incurred.

D. Trend Information

In 2015, total seaborne container trade demand grew at around 2%, the lowest level since the end of the global financial crisis in 2009, when global growth had turned negative. In spite of elevated optimism at the start of 2015, economic growth projections have been regularly downgraded due to soft consumer demand in the western world and increased downward volatility in commodities emerging market currencies and global capital markets.

Total containership supply grew at around 8% due to increased deliveries of big vessels and reduced demolition activity. Increased supply combined with subdued demand resulted in strong downward pressure throughout the industry. Liner companies’ initial efforts to deal with the developing imbalance failed to restore any pricing equilibrium and they were forced to rationalize their vessel operations through widespread cascading, canceling of scheduled sailings and even idling of vessels.

As a result of the contraction of seaborne containership demand and the growth of containership supply, demand for containership transportation services declined during the year and resulted in historically low charter rates for all types of vessels and the highest number of idle vessels since 2010, which stood at 7% of total fleet at the end of the 2015. Given that ordering of new vessels continued during 2015 at the same high rate of the last few years, if there is no

materially improved containership demand and demolition activity there will be more negative pressure across the industry.

E. Off-Balance Sheet Arrangements

As of December 31, 2015, we did not have any off-balance sheet arrangements.

F. Tabular Disclosure of Capital Obligations

Our contractual obligations as of December 31, 2015 were:


	Payments Due by Period ⁽⁵⁾
	Total			Less than 1 year			1-3 years			3-5 years			More than 5 years
	(Expressed in thousands of U.S. dollars)
Long-term debt obligations ⁽¹⁾		$	1,556,715		$	199,793		$	781,545		$	358,844		$	216,533
Interest on long-term debt obligations ⁽²⁾			261,166			75,268			107,797			49,840			28,261
Payments to our manager ⁽³⁾			190,196			24,742			46,268			42,961			76,225
Investments in Affiliates ⁽⁴⁾			108,331			83,779			24,552			—			—

Total		$	2,116,408		$	383,582		$	960,162		$	451,645		$	321,019

⁽¹⁾

Includes obligations under finance leases.

⁽²⁾

We expect to be obligated to make the interest payments set forth in the above table with respect to our long-term debt obligations and finance leases. The interest payments are based on annual assumed all-in rates calculated for the unhedged portion of our debt obligations based on the forward yield curve and on the average yearly debt outstanding. With respect to interest payments under our lease obligations, these have been based on the repayment schedules agreed with the financing institution upon the commencement of the bareboat charters.

⁽³⁾

This amount assumes that we will cease paying our managers any fees in connection with the management of a vessel once the vessel exceeds 30 years of age, unless the vessel will exceed 30 years of age at the expiry of its current time charter, in which case we assume that we will pay the manager a fee for the management of that vessel until its charter expires. Payments to our managers include (a) a daily management fee of $956 per day per vessel, (b) total of 0.75% fee on charter revenues earned and (c) total fees of $2.5 million.. Payments to our manager exclude the value of the shares of our common stock issued to the manager in exchange for its services. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Management and Services Agreements”. The above represent total fees paid to Costamare Shipping and Costamare Services.

⁽⁴⁾

This amount represents our share of the remaining capital commitments with regards to the newbuild vessels on order under our Framework Deed with York.

⁽⁵⁾

These amounts exclude the following preferred stock dividend payment obligations (assumes that dividends are paid until earliest date for company to redeem shares):


Total		Less than 1 year		1-3 years		3-5 years
(Expressed in thousands of U.S. dollars)
$	77,485	$	21,063	$	41,172	$	15,250

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The following table sets forth information regarding our directors and executive officers. The business address of each of our executive officers and directors listed below is 7 Rue du Gabian, MC 98000 Monaco. Our telephone number at that address is +377 93 25 09 40. Our board of directors will be elected annually on a staggered basis, and each elected director will hold office for a three-year term. The following directors or nominees for director have been determined by our board of directors to be independent under the standards of the NYSE and the rules and regulations of the SEC: Vagn Lehd Møller and Charlotte Stratos. Officers are elected from time to time by vote of our board of directors and hold office until a successor is elected and qualified.


Name	Age	Position
Konstantinos Konstantakopoulos	46	Chief Executive Officer, Chairman of the Board and Class III Director
Gregory Zikos	47	Chief Financial Officer and Class II Director
Vagn Lehd Møller	69	Class II Director
Charlotte Stratos	61	Class III Director
Konstantinos Zacharatos	43	Class I Director
Anastassios Gabrielides	51	General Counsel and Secretary

The term of our Class I director expires in 2017, the term of our Class II directors expires in 2018 and the term of our Class III directors expires in 2016.

Konstantinos Konstantakopoulos is our Chief Executive Officer and Chairman of our board of directors. Mr. Konstantakopoulos also serves as President, Chief Executive Officer and a director of Costamare Shipping, our head manager, which he wholly owns. He also controls, together with members of his family, Costamare Services, a service provider to our vessel-owning subsidiaries. In 2005, Mr. Konstantakopoulos founded another of our managers, Shanghai Costamare, of which he is the controlling stockholder. Mr. Konstantakopoulos also owns, indirectly, 25% of C-Man Maritime, a vessel manning agency which he founded in 2006. Mr. Konstantakopoulos has served on the board of directors of the Union of Greek Shipowners since 2006. Mr. Konstantakopoulos studied engineering at Université Paul Sabatier in France.

Gregory Zikos is our Chief Financial Officer and a member of our board of directors. Prior to joining us in 2007, Mr. Zikos was employed at DryShips, Inc., a public shipping company, as the Chief Financial Officer from 2006 to 2007. From 2004 to 2006, Mr. Zikos was employed with J&P Avax S.A., a real estate investment and construction company, where he was responsible for project and structured finance debt transactions. From 2000 to 2004, Mr. Zikos was employed at Citigroup (London), global corporate and investment banking group, where he was involved in numerous European leveraged and acquisition debt financing transactions. Mr. Zikos practiced law from 1994 to 1998, during which time he advised financial institutions and shipping companies in debt and acquisition transactions. Mr. Zikos holds an M.B.A. in finance from Cornell University, an L.L.M. from the University of London King’s College, and a bachelor of laws, with merits, from the University of Athens.

Vagn Lehd Møller is a member of our board of directors. From 1963 to 2007, Mr. Møller worked with A.P. Møller-Maersk A/S where he eventually served as Executive Vice President and Chief Operations Officer of the world’s largest liner company, Maersk Line. Mr. Møller was instrumental in the purchase and integration of Sea-land Services by A.P. Møller-Maersk A/S in 2000 and of P&O Nedlloyd in 2005. Since March 2012 and July 2012, respectively, Mr. Møller has served as chairman of the boards of DBB Jack-up Services A/S and Jack-up Invest Co2 A/S, both Danish companies investing in jack-up vessels chartered to off-shore windmill companies. From March 2010 to October 2015, Mr. Møller served on the boards of directors for Scan Global Logistics A/S and Scan Global Holdings A/S, both Danish based internal logistics companies, and he was elected chairman of the boards of directors of both companies in January 2011. From April 2015, Mr. Møller has been a member of the Board of The Survey Association A/S, a Danish based marine surveyor company.

Charlotte Stratos is a member of our board of directors. Since 2008, Ms. Stratos has served as a Senior Advisor to Morgan Stanley’s Investment Banking Division-Global Transportation team. From 1987 to 2007, Ms. Stratos served as Managing Director and Head of Global Greek Shipping for Calyon Corporate and Investment Bank of the Credit Agricole Group. From 1976 to 1987, Ms. Stratos served in various roles with Bankers Trust Company, including Advisor to the Shipping Department and Vice President of Greek shipping finance. Ms. Stratos currently serves as an independent director for Hellenic Carriers Ltd. and Gyroscopic Fund, a hedge fund company.

Konstantinos Zacharatos is a member of our board of directors. Mr. Zacharatos served as our General Counsel and Secretary until April 2013. Mr. Zacharatos has also served as the Vice Chairman of Shanghai Costamare since its incorporation in 2005. Mr. Zacharatos joined Costamare Shipping in 2000, became a member of the board of directors of Costamare Shipping in June 2010 and has also been responsible for the legal affairs of Costamare Shipping, Costamare Services, CIEL, Shanghai Costamare and C-Man Maritime. Mr. Zacharatos has previously been the legal adviser of Costaterra S.A., a Greek property company. Prior to joining Costamare Shipping and Costaterra S.A., Mr. Zacharatos was employed with Pagoropoulos & Associates, a law firm. Mr. Zacharatos holds an L.L.M. and an L.L.B. from the London School of Economics and Political Science.

Anastassios Gabrielides is our General Counsel and Secretary. Mr. Gabrielides has served as a director and secretary of Costamare Services since May 2015. Prior to joining us in 2013, Mr. Gabrielides worked for Allseas Marine SA, a ship management company. From 2004 to 2011, Mr. Gabrielides served at the Hellenic Capital Markets Commission, the Greek securities regulator, first as Vice Chairman (2004 to 2009) and then as Chairman (2009 to 2011). Mr. Gabrielides practiced law in Athens from 1999 to 2004, specializing in securities, banking and finance and corporate law. Mr. Gabrielides also worked for the Alexander S. Onassis Foundation from 1991 to 1999 in various posts and was a member of the Executive Committee. Mr. Gabrielides has been a member of the board of supervisors of the European Securities and Markets Authority and has been a member of the Greek FIY. Mr. Gabrielides holds L.L.M. degrees from Harvard Law School and the London School of Economics, a law degree from Athens University Law School, and a B.A. in economics from the American College of Greece, Deree College.

B. Compensation of Directors and Senior Management

Non-executive directors receive annual fees in the amount of $65,000, plus reimbursement for their out-of-pocket expenses. Our officers who serve as our directors do not receive additional compensation for their service as directors. We do not have any service contracts with our non-executive directors that provide for benefits upon termination of their services.

C. Board Practices

We have five members on our board of directors. The board of directors may change the number of directors to not less than three, nor more than 15, by a vote of a majority of the entire board. Each director shall be elected to serve until the third succeeding annual meeting of stockholders and until his or her successor shall have been duly elected and qualified, except in the event of death, resignation or removal. A vacancy on the board created by death, resignation, removal (which may only be for cause), or failure of the stockholders to elect the entire class of directors to be elected at any election of directors or for any other reason, may be filled only by an affirmative vote of a majority of the remaining directors then in office, even if less than a quorum, at any special meeting called for that purpose or at any regular meeting of the board of directors.

reporting requirements. Under the NYSE rules, a “foreign private issuer” is subject to less stringent corporate governance requirements. Subject to certain exceptions, the rules of the NYSE permit a “foreign private issuer” to follow its home country practice in lieu of the listing requirements of the NYSE. In addition, members of the Konstantakopoulos family own, in the aggregate, a majority of our outstanding common stock. As a result, we are a “controlled company” within the meaning of the NYSE corporate governance standards. Under the NYSE rules, a company of which more than 50% of the voting power is held by another company or group is a “controlled company” and may elect not to comply with certain NYSE corporate governance requirements, including (1) the requirement that a majority of the board of directors consist of independent directors, (2) the requirement that the nominating committee be composed entirely of independent directors and have a written charter addressing the committee’s purpose and responsibilities, (3) the requirement that the compensation committee be composed entirely of independent directors and have a written charter addressing the committee’s purpose and responsibilities and (4) the requirement of an annual performance evaluation of the nominating and corporate governance and compensation committees. As permitted by these exemptions, as well as by our bylaws and the laws of the Marshall Islands, we currently have a board of directors with a majority of non-independent directors and a combined corporate governance, nominating and compensation committee with one non-independent director serving as a committee member. As a result, non-independent directors, including members of our management who also serve on our board of directors, may, among other things, fix the compensation of our management, make stock and option awards and resolve governance issues regarding our company. In addition, we currently have an audit committee composed solely of two independent committee members, whereas a domestic public company would be required to have three such independent members. Accordingly, in the future you may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements.

Corporate Governance

The board of directors and our Company’s management engage in an ongoing review of our corporate governance practices in order to oversee our compliance with the applicable corporate governance rules of the NYSE and the SEC.

We have adopted a number of key documents that are the foundation of the Company’s corporate governance, including:

•

a Code of Business Conduct and Ethics for all officers and employees, which incorporates a Code of Ethics for directors and a Code of Conduct for corporate officers;

•

a Corporate Governance, Nominating and Compensation Committee Charter; and

•

an Audit Committee Charter.

These documents and other important information on our governance are posted on our website and may be viewed at http://www.costamare.com . We will also provide a paper copy of any of these documents upon the written request of a stockholder. Stockholders may direct their requests to the attention of our Secretary, Anastassios Gabrielides, 7 Rue du Gabian, MC 98000 Monaco.

Committees of the Board of Directors

Audit Committee

Our audit committee consists of Vagn Lehd Møller and Charlotte Stratos. Ms. Stratos is the chairman of the committee. The audit committee is responsible for:

•

the appointment, compensation, retention and oversight of independent auditors and approving any non-audit services performed by such auditors;

•

assisting the board in monitoring the integrity of our financial statements, the independent auditors’ qualifications and independence, the performance of the independent accountants and our internal audit function and our compliance with legal and regulatory requirements;

•

annually reviewing an independent auditors’ report describing the auditing firm’s internal quality-control procedures, and any material issues raised by the most recent internal quality control review, or peer review, of the auditing firm;

•

discussing the annual audited financial and quarterly statements with management and the independent auditors;

•

discussing earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies;

•

discussing policies with respect to risk assessment and risk management;

•

meeting separately, and periodically, with management, internal auditors and the independent auditors;

•

reviewing with the independent auditors any audit problems or difficulties and management’s responses;

•

setting clear hiring policies for employees or former employees of the independent auditors;

•

annually reviewing the adequacy of the audit committee’s written charter, the scope of the annual internal audit plan and the results of internal audits;

•

establishing procedures for the consideration of all related-party transactions, including matters involving potential conflicts of interest or potential usurpations of corporate opportunities;

•

reporting regularly to the full board of directors; and

•

handling such other matters that are specifically delegated to the audit committee by the board of directors from time to time.

Corporate Governance, Nominating and Compensation Committee

Our corporate governance, nominating and compensation committee consists of Konstantinos Konstantakopoulos, Vagn Lehd Møller and Charlotte Stratos. Mr. Konstantakopoulos is the chairman of the committee. The corporate governance, nominating and compensation committee is responsible for:

•

nominating candidates, consistent with criteria approved by the full board of directors, for the approval of the full board of directors to fill board vacancies as and when they arise, as well as putting in place plans for succession, in particular, of the chairman of the board of directors and executive officers;

•

selecting, or recommending that the full board of directors select, the director nominees for the next annual meeting of stockholders;

•

developing and recommending to the full board of directors corporate governance guidelines applicable to us and keeping such guidelines under review;

•

overseeing the evaluation of the board and management; and

•

handling such other matters that are specifically delegated to the corporate governance, nominating and compensation committee by the board of directors from time to time.

D. Employees

We have four shore-based officers, our chairman and chief executive officer, our chief financial officer, our general counsel and secretary, and our chief operating officer. These officers are employed and compensated for their services by Costamare Shipping or Costamare Services. As of December 31, 2015, approximately 2,000 people served in a pool of personnel who rotate their service onboard the containerships in our fleet. Costamare Shipping, Costamare Services and Shanghai Costamare each employed approximately 100, 10 and 30 people, respectively, all of whom were shore-based. In addition, our affiliated managers are responsible for recruiting, either directly or through a crewing agent, the senior officers and all other crew members for our containerships that they manage. Costamare Shipping and Shanghai Costamare control the selection and

employment of seafarers for our containerships, directly through their crewing offices in Athens, Greece and Shanghai, China, and indirectly through our related crewing agent in the Philippines, C-Man Maritime, and independent manning agents in Romania and Bulgaria. The seafarers for our containerships managed by V.Ships Greece are arranged in part through C-Man Maritime and in part through V.Ships Greece (which utilizes the global V.Group network) under the Co-operation Agreement. We have not experienced any material work stoppages due to labor disagreements during the past three years.

E. Share Ownership

The common stock beneficially owned by our directors and executive officers and/or entities affiliated with these individuals is disclosed in “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders” below.

Equity Compensation Plans

We have not adopted any equity compensation plans.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

The following table and the footnotes below set forth certain information regarding the beneficial ownership of our outstanding common stock and Preferred Stock as of April 20, 2016 held by:

•

each person or entity that we know beneficially owns 5% or more of our common stock;

•

each of our officers and directors; and

•

all our directors and officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC. In general, a person who has voting power or investment power with respect to securities is treated as a beneficial owner of those securities.

Beneficial ownership does not necessarily imply that the named person has the economic or other benefits of ownership. For purposes of this table, shares subject to options, warrants or rights or shares exercisable within 60 days of April 20, 2016 are considered as beneficially owned by the person holding those options, warrants or rights. Each stockholder is entitled to one vote for each share held. The applicable percentage of ownership of each stockholder is based on 75,548,000 shares of common stock, 2,000,000 shares of Series B Preferred Stock, 4,000,000 Series C Preferred Stock and 4,000,000 Series D Preferred Stock outstanding as of April 20, 2016. Information for certain holders is based on their latest filings with the SEC or information delivered to us. Except as noted below, the address of all stockholders, officers and directors identified in the table and the accompanying footnotes below is in care of our principal executive offices.


Identity of Person or Group	Shares of Common Stock Beneficially Held
Identity of Person or Group	Number of Shares			Percentage
Officers and Directors
Konstantinos Konstantakopoulos ⁽¹⁾		16,673,599			22.07	%
Gregory Zikos			*			*
Konstantinos Zacharatos		—			—
Vagn Lehd Møller			*			*
Charlotte Stratos		—			—
Anastassios Gabrielides ⁽²⁾		—			—
All officers and directors as a group (five persons)		16,896,744			22.37	%
5% Beneficial Owners
Christos Konstantakopoulos ⁽³⁾		16,150,000			21.38	%
Achillefs Konstantakopoulos ⁽⁴⁾		16,299,601			21.58	%
Morgan Stanley ⁽⁵⁾		3,923,804			5.20	%

⁽¹⁾

Konstantinos Konstantakopoulos, our chairman and chief executive officer, owns 9,074,916 shares of common stock directly and 7,598,683 shares of common stock indirectly through entities controlled by Mr. Konstantakopoulos.

⁽²⁾

Anastassios Gabrielides, our General Counsel and Secretary, holds less than 1% of our issued and outstanding Series C Preferred Stock and Series D Preferred Stock.

⁽³⁾

Christos Konstantakopoulos, the brother of our chairman and chief executive officer, owns 9,074,917 shares of common stock directly and 7,075,083 shares of common stock indirectly through an entity controlled by Mr. Konstantakopoulos. He also holds 40,000 shares of Series C Preferred Stock directly, or 1.00% of the issued and outstanding shares of Series C Preferred Stock.

⁽⁴⁾

Achillefs Konstantakopoulos, the brother of our chairman and chief executive officer, owns 9,074,917 shares of common stock directly and 7,224,684 shares of common stock indirectly through entities controlled by Mr. Konstantakopoulos. He also holds 30,203 shares of Series B Preferred Stock, 80,390 shares of Series C Preferred Stock and 102,300 shares of Series D Preferred Stock directly, or 1.51%, 2.01% and 2.56% of the issued and outstanding shares of Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, respectively. His immediate family also holds 25,650 shares of Series B Preferred Stock, or 1.28% of the issued and outstanding shares of Series B Preferred Stock, and 4,400 shares of Series D Preferred Stock, or 0.11% of the issued and outstanding shares of Series D Preferred Stock.

⁽⁵⁾

As of December 31, 2015, based on a Schedule 13G filed with the SEC on February 14, 2013, as amended by Amendment No. 1 filed with the SEC on February 10, 2014, Amendment No. 2 filed with the SEC on February 17, 2015 and Amendment No. 3 filed with the SEC on February 11, 2016. The report indicated sole voting power as to 294,626 shares, shared voting power as to 3,359,802 shares, and shared dispositive power as to 3,923,804 shares, by Morgan Stanley, a parent holding company.

Owns less than 1% of our issued and outstanding shares.

In November 2010, we completed a registered public offering of our shares of common stock and our common stock began trading on the NYSE. Our major stockholders have the same voting rights as our other stockholders. As of April 20, 2016, we had approximately 15,455 stockholders of record.

Holders of our Preferred Stock generally have no voting rights except (1) in respect of amendments to the Articles of Incorporation which would adversely alter the preferences, powers or rights of the Preferred Stock or (2) in the event that the Company proposes to issue any parity stock if the cumulative dividends payable on outstanding Preferred Stock are in arrears or any senior stock. However, whenever dividends payable on the Preferred Stock are in arrears for six or more quarterly periods, whether or not consecutive, holders of Preferred Stock (voting together as a class with all other classes or series of parity stock upon which like voting rights have been conferred and are exercisable) will be entitled to elect one additional director to serve on our board of directors until such time as all accumulated and unpaid dividends on the Preferred Stock have been paid in full.

B. Related Party Transactions

Management Affiliations

Each of our containerships is currently managed by Costamare Shipping, which may subcontract certain services to other affiliated managers (such as Shanghai Costamare), or to V.Ships Greece or, subject to our consent, other third party sub-managers, pursuant to the Framework Agreement and one or more ship-management agreements between the relevant vessel owning entity and the relevant manager. Our affiliated managers and Costamare Services are controlled by our chairman and chief executive officer and members of his family.

Management and Services Agreements

On March 3, 2015, we amended and restated our Group Management Agreement with Costamare Shipping. On November 2, 2015, we terminated the Group Management Agreement and we entered into the Framework Agreement with Costamare Shipping and our vessel-owning subsidiaries entered into the Services Agreement with Costamare Services, a newly formed entity and affiliate of Costamare Shipping. The same services that were provided by Costamare Shipping pursuant to the Group Management Agreement continue to be provided by either Costamare Shipping or Costamare Services under the Framework Agreement and the Services Agreement, and the aggregate fees paid by us to Costamare Shipping and Costamare Services under the Framework Agreement and the Services Agreement are substantially the same as the aggregate fees that were paid to Costamare Shipping pursuant to the Group Management Agreement.

Costamare Shipping is the head manager for our containerships and provides us with general administrative services and certain commercial and technical services pursuant to the Framework Agreement. Costamare Shipping, itself or through Shanghai Costamare, V.Ships Greece or in certain cases, subject to our consent, another third party sub-manager, provides our fleet of containerships with technical, crewing, commercial, provisioning, bunkering, sale and purchase, chartering, accounting, insurance and administrative services pursuant to the Framework Agreement sand separate ship-management agreements between each of our vessel-owning subsidiaries and Costamare Shipping and, in certain cases, V.Ships Greece. Costamare Services provides our vessel-owning subsidiaries with crewing, commercial and administrative services pursuant to the Services Agreement. Costamare Shipping, itself or through or together with a sub-manager, controls the selection and employment of seafarers for our containerships, directly through their crewing offices in Athens, Greece and Shanghai, China, and indirectly through our related crewing agent in the Philippines, C-Man Maritime, and independent manning agents in Romania and Bulgaria. The seafarers for our containerships managed by V.Ships Greece are arranged in part through C-Man Maritime and in part through V.Ships Greece (which utilizes the global V.Group network) under the Co-operation Agreement. In return for these services, we pay the fees described below.

Reporting Structure

Our chairman and chief executive officer and our chief financial officer supervise, in conjunction with our board of directors, the management of our operations and the provision of services to our fleet by Costamare Shipping, Costamare Services and Shanghai Costamare, as well as any third party managers, including V.Ships Greece. Costamare Shipping and Costamare Services report to us and our board of directors through our chairman and chief executive officer and chief financial officer, each of which is appointed by our board of directors.

Compensation of Our Manager and Services Provider

Costamare Shipping is providing us with general administrative services and certain commercial and technical services as well as technical, crewing, commercial, provisioning, bunkering, sale and purchase, chartering, accounting, insurance and administrative services in respect of our containerships. Costamare Services provides our vessel-owning subsidiaries with crewing, commercial and administrative services pursuant to the Services Agreement.

In the event that Costamare Shipping or Costamare Services decide to delegate certain or all of the services they have agreed to perform under the Framework Agreement or the Services Agreement, respectively, either through (i) subcontracting to a sub-manager or sub-provider or (ii) by directing such sub-manager or sub-provider to enter into a direct agreement with the relevant vessel-owning subsidiary, then, in the case of subcontracting under (i), Costamare Shipping or Costamare Services, as applicable, will be responsible for paying the fee charged by the relevant sub-manager or sub-provider for providing such services and, in the case of a direct agreement under (ii), the fee received by Costamare Shipping or Costamare Services, as applicable, will be reduced by the fee payable to the sub-manager or sub-provider under the relevant direct agreement. As a result, these arrangements will not result in any increase in the aggregate management fees and services fees that we pay. Moreover, in the case of the Co-operation Agreement, the management fees we pay are reduced by any net profit received by Costamare Shipping from the Cell’s operation. In addition to management fees, we pay for any capital expenditures, financial costs, operating expenses and any general and administrative expenses, including payments to third parties, including specialist providers, in accordance with the Framework Agreement and the relevant separate ship-management agreements or supervision agreements.

Costamare Shipping received in 2015 and continues to receive in 2016 a fee of $956 per day or, in the case of a containership subject to a bareboat charter, $478 per day, for each containership, pro rated for the calendar days we own each containership. In 2014, such amounts were $919 and $460, respectively. We also paid to Costamare Shipping in 2015 and continue to pay in 2016 a flat fee of $787,405 per newbuild vessel for the supervision of the construction of any newbuild vessel that we may contract. Prior to 2015, the supervision fee was annually adjusted upward by 4%. Costamare Shipping also received in the first three quarters of 2015 a monthly fee of 0.75% on all gross freight, demurrage, charter hire and ballast bonus or other income earned with respect to each containership in our fleet until the third quarter of 2015. Starting in the fourth quarter of 2015, Costamare Shipping received, and continues to receive, a fee of 0.15% on all gross freight, demurrage, charter hire and ballast bonus or other income earned with respect to each containership in our fleet. Costamare Shipping received for the first three quarters of 2015, a quarterly fee of (i) $625,000 ($2.5 million annually) and (ii) 149,600 shares (which is equal to 0.2% of the issued and outstanding Costamare common stock as of January 1, 2015), which fee included payment for the services of our executive officers (prior to 2015, we paid Costamare Shipping $1.0 million annually for such services). Starting in the fourth quarter of 2015 Costamare Services received and continues to receive from our container-shipowning subsidiaries a monthly fee of 0.60% on all gross freight, demurrage, charter hire and ballast bonus or other income earned with respect to each containership in our fleet and a quarterly fee of (i) $625,000 and (ii) an amount equal to the value of 149,600 shares (0.2% of the issued and outstanding Costamare common stock as of January 1, 2015), based on the average closing price of our common stock on the NYSE for the ten days ending on the thirtieth day of the last month of each quarter; provided that Costamare Services may elect to receive 149,600 shares instead of the fee under (ii). We have reserved a number of shares of common stock to cover the fees to be paid to Costamare Services under (ii) through December 31, 2020. During the year ended December 31, 2014 and December 31, 2015, Costamare Shipping charged in aggregate to the companies established pursuant to the Framework Deed $1.57 million and $1.86 million, respectively, for services provided in accordance with the relevant management agreements. For the year ended December 31, 2015 we paid aggregate fees of approximately $5.07 million and issued in aggregate 448,800 shares to Costamare Shipping under the Group Management Agreement and the Framework Agreement and paid aggregate fees of approximately $1.11 million and issued in aggregate 149,600 shares to Costamare Services under the Services Agreement.

Term and Termination Rights

Subject to the termination rights described below, the current term of the Framework Agreement and Service Agreement expires on December 31, 2016. The Framework Agreement and Service Agreement automatically renew for nine consecutive one-year periods until December 31, 2025, at which point the agreement will expire. In addition to the termination provisions outlined

below, we are able to terminate the Framework Agreement and Service Agreement, subject to a termination fee, by providing 12 months’ written notice to Costamare Shipping or Costamare Services, as applicable, that we wish to terminate the applicable agreement at the end of the then-current term.

Our Manager’s Termination Rights. Costamare Shipping or Costamare Services may terminate the Framework Agreement or Services Agreement, respectively, prior to the end of its term if:

•

any moneys payable by us under the applicable agreement have not been paid when due or if on demand within 20 business days of payment having been demanded;

•

if we materially breach the agreement and we have failed to cure such breach within 20 business days after we are given written notice from Costamare Shipping or Costamare Services, as applicable; or

•

there is a change of control of our Company or the vessel-owning subsidiaries, as applicable.

Our Termination Rights. We or our vessel-owning subsidiaries may terminate the Framework Agreement or the Services Agreement, respectively, prior to the end of its term in the following circumstances:

•

any moneys payable by Costamare Shipping or Costamare Services under or pursuant to the applicable agreement are not paid or accounted for within 10 business days after receiving written notice from us;

•

Costamare Shipping or Costamare Services, as applicable materially breaches the agreement and has failed to cure such breach within 20 business days after receiving written notice from us;

•

there is a change of control of Costamare Shipping or Costamare Services, as applicable; or

•

Costamare Shipping or Costamare Services, as applicable, is convicted of, enters a plea of guilty or nolo contendere with respect to, or enters into a plea bargain or settlement admitting guilt for a crime (including fraud), which conviction, plea bargain or settlement is demonstrably and materially injurious to Costamare, if such crime is not a misdemeanor and such crime has been committed solely and directly by an officer or director of Costamare Shipping or Costamare Services, as applicable, acting within the terms of its employment or office.

Mutual Termination Rights. Either we or Costamare Shipping may terminate the Framework Agreement, and either Costamare Services or our vessel-owning subsidiaries may terminate the Services Agreement if:

•

the other party ceases to conduct business, or all or substantially all of the equity interests, properties or assets of the other party are sold, seized or appropriated which, in the case of seizure or appropriation, is not discharged within 20 business days;

•

the other party files a petition under any bankruptcy law, makes an assignment for the benefit of its creditors, seeks relief under any law for the protection of debtors or adopts a plan of liquidation, or if a petition is filed against such party seeking to have it declared insolvent or bankrupt and such petition is not dismissed or stayed within 90 business days of its filing, or such party admits in writing its insolvency or its inability to pay its debts as they mature, or if an order is made for the appointment of a liquidator, manager, receiver or trustee of such party of all or a substantial part of its assets, or if an encumbrancer takes possession of or a receiver or trustee is appointed over the whole or any part of such party’s undertaking, property or assets or if an order is made or a resolution is passed for Costamare Shipping’s, Costamare Services’s or our winding up;

•

the other party is prevented from performing any obligations under the applicable agreement by any cause whatsoever of any nature or kind beyond the reasonable control of such party respectively for a period of two consecutive months or more (“Force Majeure”); or

•

in the case of the Framework Agreement, all supervision agreements and all ship-management agreements are terminated in accordance with their respective terms.

If Costamare Shipping or Costamare Services terminates the Framework Agreement or the Services Agreement, as applicable, for any reason other than Force Majeure, or if we terminate either agreement pursuant to our ability to terminate with 12 months’ written notice, we will be obliged to pay to Costamare Shipping or Costamare Services, as applicable, a termination fee equal to (a) the number of full years remaining prior to December 31, 2025, times (b) the aggregate fees due and payable to Costamare Shipping or Costamare Services, as applicable, during the 12-month period ending on the date of termination (without taking into account any reduction in fees under the Framework Agreement to reflect that certain obligations have been delegated to a sub-manager); provided that the termination fee will always be at least two times the aggregate fees over the 12-month period described above. In addition, the individual ship-management agreements to which our vessels are subject may be terminated by either us or the applicable manager if the vessel is sold, becomes a total loss or is requisitioned.

Non-competition

Costamare Shipping has agreed that during the term of the Framework Agreement, and Costamare Services has agreed that during the term of the Services Agreement, they will not provide similar services to any entity other than our subsidiaries and entities established pursuant to the Framework Deed and, in the case of Costamare Services, to entities affiliated with our chairman and chief executive officer, without our prior written approval, which we may provide under certain circumstances. We believe we will derive significant benefits from our exclusive relationship with Costamare Shipping and Costamare Services.

We have agreed to Costamare Shipping entering into an agreement with Marcas, a company which negotiates marine supply contracts on behalf of vessel owners and vessel management companies, in order to achieve the best possible service and price combination with suppliers for us. Any supplier brokerage fees that Marcas receives with respect to supplies purchased by our vessel-owning subsidiaries will be paid to Costamare Shipping, which will in turn be credited by Costamare Shipping to our vessel-owning entities against their respective vessels’ operating expenses. Our vessel-owning entities will pay the annual membership fee payable by Costamare Shipping to Marcus.

Restrictive Covenant Agreements

Under the restrictive covenant agreements entered into with us, during the period of Konstantinos Konstantakopoulos’s and Konstantinos Zacharatos’s employment or service with us and for six months thereafter, each has agreed to restrictions on his ownership of any containerships and on the acquisition of any shareholding in a business involved in the ownership of containerships (such activities are referred to here as “the restricted activities”), subject to the exceptions described below.

Each of Konstantinos Konstantakopoulos and Konstantinos Zacharatos are permitted to engage in the restricted activities in the following circumstances: (a) pursuant to his involvement with us, (b) with respect to certain permitted acquisitions (as described below) and (c) pursuant to his passive ownership of up to, in the case of Konstantinos Konstantakopoulos, 19.99% of the outstanding voting securities of any publicly traded company, and in the case of Konstantinos Zacharatos, 20% of the outstanding voting securities of any publicly traded or private company, in each case that is engaged in the containership business.

As noted above, Konstantinos Konstantakopoulos and Konstantinos Zacharatos are permitted to engage in restricted activities with respect to two types of permitted acquisitions, including: (1) the acquisition of a containership or an acquisition or investment in a containership business, on terms and conditions that are not materially more favorable, than those first offered to us and refused by an independent conflicts committee of our directors, and/or (2) the acquisition of a business that includes containerships. Under this second type of permitted acquisition, we must be given the opportunity to buy the containerships or containership businesses included in the acquisition, in each case for its fair market value plus certain break-up costs.

Each of Konstantinos Konstantakopoulos and Konstantinos Zacharatos has also agreed that if one of our containerships and a containership majority-owned by him are both available and meet the criteria for an available charter, our containership will be offered such charter.

Registration Rights Agreement

We entered into a registration rights agreement with the stockholders named therein (the “Registration Rights Holders”) on November 3, 2010, pursuant to which we granted the Registration Rights Holders and their transferees the right, under certain circumstances and subject to certain restrictions to require us to register under the Securities Act shares of our common stock held by those persons. On November 27, 2015, the Company and the Registration Rights Holders entered into an amended and restated registration rights agreement to extend registration rights to Costamare Shipping and Costamare Services, each of which have received or may receive shares of our common stock as fee compensation under the Group Management Agreements (prior to November 2, 2015) or under the Services Agreement. Under the registration rights agreement, the Registration Rights Holders and their transferees have the right to request us to register the sale of shares held by them on their behalf and may require us to make available shelf registration statements permitting sales of shares into the market from time to time over an extended period. In addition, those persons have the ability to exercise certain piggyback registration rights in connection with registered offerings initiated by us. The Registration Rights Holders own a total of approximately 49 million shares entitled to these registration rights.

Trademark License Agreement

Under the trademark license agreement entered into with us on November 3, 2010, during the term of the Group Management Agreements and following its termination, and pursuant to the Addendum entered into on February 29, 2016, the term of the Framework Agreement, Costamare Shipping, one of our managers, has agreed to grant us a non-transferable, royalty free license and right to use the Costamare Inc. trademarks, which consist of the name “COSTAMARE” and the Costamare logo in connection with the operation of our containership business. We will pay no additional consideration for this license and right. Costamare Shipping retains the right to use the trademarks in its own business or to maintain existing, or grant new, licenses or rights permitting any other person to use the trademarks, provided that in all such cases the use, maintenance or grant must be consistent with the license and right granted to us under the licensing agreement.

Grant of Rights and Issuance of Common Stock

On July 14, 2010, the Company offered all stockholders of record as of the close of business on July 14, 2010 (the “Record Date”), the right (collectively, the “Rights”) to subscribe for and purchase up to 32 shares of common stock, par value $0.0001 per share, for each share held by such stockholder as of the Record Date. The subscription price for each share purchased pursuant to the exercise of Rights was $0.10 per share.

On March 27, 2012, the Company completed a follow-on public equity offering in which we issued 7,500,000 shares at a public offering price of $14.10 per share. The net proceeds of the follow-on offering were $100.6 million. Members of the Konstantakopoulos family purchased 750,000 shares in the offering.

On October 19, 2012, the Company completed a second follow-on public equity offering in which we issued 7,000,000 shares at a public offering price of $14.00 per share. The net proceeds of the follow-on offering were $93.5 million. Members of the Konstantakopoulos family purchased 700,000 shares in the offering.

Other Transactions

Konstantinos Konstantakopoulos holds a passive minority interest in certain companies controlled by the family of Dimitrios Lemonidis that own five containerships comparable to 16 of our vessels (including five vessels acquired under the Framework Deed) and may acquire additional vessels. Konstantinos Zacharatos holds a passive minority interest in certain companies controlled by the family of Mr. Lemonidis that own three containerships comparable to three of our vessels and may acquire additional vessels. These vessels may compete with the Company’s vessels for chartering opportunities. These investments were entered into in accordance with the terms of the restrictive covenant agreements referenced above following the review and approval of our Audit Committee and Board of Directors.

On January 7, 2013, Costamare Shipping entered into the Co-operation Agreement with V.Ships Greece, pursuant to which the two companies established the Cell under V.Ships Greece. See “Item 4. Information on the Company—B. Business Overview—Management of Our Fleet”. The Co-operation Agreement anticipates that the Cell will actively seek to provide ship-management services to third-party owners in order to capitalize on the ship-management expertise of the Cell and the economies of scale brought by the affiliation with V.Group. However, as noted above, Costamare Shipping has agreed to pass to us the net profit, if any, it receives from the Cell.

Under the Framework Deed entered into on May 15, 2013 and amended and restated on May 18, 2015, we have agreed with York to jointly invest in newbuild and secondhand container vessels through jointly held companies in which we hold a minority stake. The joint venture established by the Framework Deed is expected to be each party’s exclusive joint venture for the acquisition of vessels in the containership industry during the commitment period ending May 18, 2020, unless terminated earlier in certain circumstances (although we may acquire vessels outside the joint venture where York rejects a vessel acquisition opportunity). If York decides to participate in a new vessel acquisition, we will hold a 25% to 75% equity interest in such vessel. As of April 20, 2016, Costamare and York executed transactions with capital expenditure commitments of approximately $1.2 billion. As part of the Framework Deed, we hold a minority stake in the existing Joint Venture vessels and expect to hold a stake of 25% to 75% in future Joint Venture vessels. Eighteen of our containerships, including 12 newbuilds and six existing Joint Venture vessels, have been acquired pursuant to the Framework Deed. Each vessel is a cellular containership, meaning it is a dedicated container vessel. See “Item 4. Information on the Company—B. Business Overview—Our Fleet, Acquisitions and Newbuild Vessels”.

Under the Framework Agreement, Costamare Shipping provides management services to the Joint Venture vessels and Costamare Shipping has entered into separate management agreements with each vessel-owning entity formed under the Framework Deed pursuant to which Costamare Shipping provides technical, crew, crew insurance, commercial, general and administrative and insurance services directly or through Shanghai Costamare or V.Ships Greece as sub-managers, provided that Shanghai Costamare or V.Ships Greece may be directed to enter into a direct management agreement with each vessel-owning entity and, in respect of the newbuild vessels under construction, into a supervision agreement with the respective vessel-owning entity. During the year ended December 31, 2015, Costamare Shipping charged in aggregate to the companies established pursuant to the Framework Deed the amount of $1.86 million for services provided in accordance with the respective management agreements.

For a description of additional related party transactions, see Note 3 to our consolidated financial statements included elsewhere in this annual report.

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Procedures for Review and Approval of Related Party Transactions

Related party transactions, which means transactions in which the Company or one of its subsidiaries is a participant and any of the Company’s directors, nominees for director, executive officers, employees, significant stockholders or members of their immediate families (other than immediate family members of employees who are not executive officers) have a direct or indirect interest, will be subject to review and approval or ratification by the board of directors and the audit committee, and will be evaluated pursuant to procedures established by the board of directors.

Where appropriate, such transactions will be subject to the approval of our independent directors, including appropriate matters arising under the Framework Agreement and Services Agreement, including the amendment and restatement of such agreement and any other agreements with entities controlled by our chairman and chief executive officer.

C. Interests of Experts and Counsel

Not applicable.

ITEM 8. FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

See “Item 18. Financial Statements” below.

Legal Proceedings

We have not been involved in any legal proceedings that we believe may have a significant effect on our business, financial position, results of operations or liquidity, and we are not aware of any proceedings that are pending or threatened that may have a material effect on our business, financial position, results of operations or liquidity. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally property damage and personal injury claims. We expect that these claims would be covered by insurance, subject to customary deductibles. However, those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources.

Preferred Stock Dividend Requirements

Dividends on Preferred Stock are payable quarterly on each of January 15, April 15, July 15 and October 15, as and if declared by our board of directors out of legally available funds for such purpose. The dividend rate for the Series B Preferred Stock is 7.625% per annum per $25.00 of liquidation preference per share (equal to $1.90625 per annum per share). The dividend rate for the Series C Preferred Stock is 8.50% per annum per $25.00 of liquidation preference per share (equal to $2.125 per annum per share). The dividend rate for the Series D Preferred Stock is 8.75% per annum per $25.00 of liquidation preference per share (equal to $2.1875 per annum per share). The dividend rates are not subject to adjustment. We paid dividends to holders of our Series B Preferred Stock of $0.3654 per share on October 15, 2013 and $0.476563 per share on January 15, 2014, April 15, 2014, July 15, 2014, October 15, 2014, January 15, 2015, April 15, 2015, July 15, 2015, October 15, 2015, January 15, 2016 and April 15, 2016. We paid dividends to holders of our Series C Preferred Stock of $0.495833 per share on April 15, 2014 and $0.531250 per share on July 15, 2014, October 15, 2014, January 15, 2015, April 15, 2015, July 15, 2015, October 15, 2015, January 15, 2016 and April 15, 2016. We paid dividends to holders of our Series D Preferred Stock of $0.376736 per share on July 15, 2015 and $0.546875 per share on October 15, 2015, January 15, 2016 and April 15, 2016. Our Preferred Stock dividend payment obligations impact our future liquidity needs.

Common Stock Dividend Policy

We paid our first cash dividend since becoming a public company in November 2010 on February 4, 2011 in an amount of $0.25 per share of common stock. We have subsequently paid

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dividends to holders of our common stock of $0.25 per share on May 12, 2011 and August 9, 2011, and $0.27 per share on November 7, 2011, February 8, 2012, May 9, 2012, August 7, 2012, November 6, 2012, February 13, 2013, May 8, 2013, August 7, 2013, November 6, 2013 and February 4, 2014, $0.28 per share on May 13, 2014, August 6, 2014, November 5, 2014 and February 4, 2015 and $0.29 per share on May 6, 2015, August 5, 2015, November 4, 2015 and February 4, 2016.

We currently intend to pay dividends in amounts that will allow us to retain a portion of our cash flows to fund vessel, fleet or company acquisitions that we expect to be accretive to earnings, and cash flows and for debt repayment and dry-docking costs, as determined by management and our board of directors. Declaration and payment of any dividend is subject to the discretion of our board of directors and the requirements of Marshall Islands law. The timing and amount of dividend payments will be dependent upon our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in our credit facilities, the provisions of Marshall Islands law affecting the payment of distributions to stockholders and other factors. We cannot assure you that we will be able to pay regular quarterly dividends in the amounts stated above or elsewhere in this annual report, and dividends may be discontinued at any time at the discretion of our board of directors. Our ability to pay dividends may be limited by the amount of cash we can generate from operations following the payment of fees and expenses and the establishment of any reserves, as well as additional factors unrelated to our profitability. We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations and to make dividend payments.

Set out below is a table showing the dividends and distributions paid in 2011, 2012, 2013, 2014 and 2015.


	Year ended December 31,
	2011			2012			2013			2014			2015			Total
	(Expressed in millions of U.S. dollars)
Common Stock dividends paid		$	61.5		$	73.1		$	80.8		$	83.0		$	86.3		$	384.7
Preferred Stock dividends paid			—			—			0.7			10.1			16.0			26.8

*Total*		$	61.5		$	73.1		$	81.5		$	93.1		$	102.3		$	411.5

B. Significant Changes

See “Item 18. Financial Statements—Note 21. Subsequent Events” below.

ITEM 9. THE OFFER AND LISTING

Trading on the New York Stock Exchange

Our common stock has been trading on the NYSE under the symbol “CMRE” since November 4, 2010. The following table shows the high and low closing sales prices for our common stock during the indicated periods.

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	Price Range
	High			Low
2011		$	18.11		$	11.39
2012			16.05			12.35
2013			18.92			14.44
2014			24.36			17.61
2015			20.35			8.82
First Quarter 2014			21.50			17.80
Second Quarter 2014			23.50			20.60
Third Quarter 2014			24.36			21.96
Fourth Quarter 2014			21.77			17.61
First Quarter 2015			19.79			16.00
Second Quarter 2015			20.35			17.24
Third Quarter 2015			18.50			11.68
Fourth Quarter 2015			14.93			8.82
August 2015			16.78			14.01
September 2015			14.80			11.68
October 2015			14.93			12.05
November 2015			14.35			12.05
December 2015			11.91			8.82
January 2016			9.62			6.23
February 2016			7.43			6.24
March 2016			9.40			7.62
April 2016 (April 1, 2016 to April 26, 2016)			10.70			8.85

Our Series B Preferred Stock has been trading on the NYSE under the symbol “CMRE PRB” since August 7, 2013. The following table shows the high and low closing sales prices for our Series B Preferred Stock during the indicated periods.


	Price Range
	High			Low
2013 (August 7, 2013 to December 31, 2013)		$	24.90		$	22.20
2014			25.93			22.80
2015			26.20			15.07
First Quarter 2014			24.43			22.80
Second Quarter 2014			25.18			24.05
Third Quarter 2014			25.93			24.88
Fourth Quarter 2014			25.69			24.00
First Quarter 2015			26.20			23.70
Second Quarter 2015			26.02			20.81
Third Quarter 2015			22.19			20.51
Fourth Quarter 2015			22.68			15.07
August 2015			22.04			20.58
September 2015			22.09			20.51
October 2015			22.68			20.58
November 2015			21.02			17.95
December 2015			18.51			15.07
January 2016			17.30			11.96
February 2016			16.78			15.05
March 2016			18.00			16.79
April 2016 (April 1, 2016 to April 26, 2016)			19.25			17.45

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Our Series C Preferred Stock has been trading on the NYSE under the symbol “CMRE PRC” since January 22, 2014. The following table shows the high and low closing sales prices for our Series C Preferred Stock during the indicated periods.


	Price Range
	High			Low
2014 (January 22, 2014 to December 31, 2014)		$	24.90		$	24.55
2015			27.09			15.93
First Quarter 2014			25.12			24.55
Second Quarter 2014			26.27			25.11
Third Quarter 2014			26.59			25.85
Fourth Quarter 2014			26.30			24.85
First Quarter 2015			27.00			25.24
Second Quarter 2015			27.09			23.36
Third Quarter 2015			24.79			21.90
Fourth Quarter 2015			23.06			15.93
August 2015			24.34			22.72
September 2015			23.97			21.90
October 2015			23.06			21.69
November 2015			22.35			18.55
December 2015			19.70			15.93
January 2016			18.55			12.49
February 2016			16.93			14.54
March 2016			18.26			16.44
April 2016 (April 1, 2016 to April 26, 2016)			18.52			17.80

Our Series D Preferred Stock has been trading on the NYSE under the symbol “CMRE PRD” since May 15, 2015. The following table shows the high and low closing sales prices for our Series D Preferred Stock during the indicated periods.


	Price Range
	High			Low
2015 (May 15, 2015 to December 31, 2015)		$	25.05		$	15.82
Second Quarter 2015 (May 15, 2015 to June 30, 2015)			25.05			23.19
Third Quarter 2015			24.54			21.38
Fourth Quarter 2015			23.09			15.82
August 2015			24.15			21.38
September 2015			23.22			21.49
October 2015			23.09			22.09
November 2015			22.81			19.53
December 2015			20.00			15.82
January 2016			18.80			12.70
February 2016			16.91			15.43
March 2016			18.28			16.70
April 2016 (April 1, 2016 to April 26, 2016)			18.85			18.00

ITEM 10. ADDITIONAL INFORMATION

A. Share Capital

Under our articles of incorporation, our authorized capital stock consists of 1,000,000,000 shares of common stock, par value $0.0001 per share, of which, as of December 31, 2015, 75,398,400 shares were issued and outstanding, and 100,000,000 shares of preferred stock, par value $0.0001 per share, issuable in series of which, as of December 31, 2015: no shares of Series A Preferred Stock were issued and outstanding, although 10,000,000 shares have been designated Series A Participating Preferred Stock in connection with our adoption of a stockholder rights plan as described below under “—Stockholder Rights Plan”; 2,000,000 shares of Series B Preferred Stock were issued and outstanding; 4,000,000 shares of Series C Preferred Stock were issued and outstanding; and

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4,000,000 shares of Series D Preferred Stock were issued and outstanding. All of our shares of stock are in registered form.

Please see Note 15 to our financial statements included at the end of this annual report for a discussion of the history of our share capital.

B. Memorandum and Articles of Association

Our purpose, as stated in our articles of incorporation, is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the BCA. Our articles of incorporation and bylaws do not impose any limitations on the ownership rights of our stockholders.

Under our bylaws, annual stockholder meetings will be held at a time and place selected by our board of directors. The meetings may be held inside or outside of the Marshall Islands. Special meetings may be called by the chairman of the board of directors, the chief executive officer or a majority of the board of directors. Our board of directors may set a record date between 15 and 60 days before the date of any meeting to determine the stockholders that will be eligible to receive notice and vote at the meeting. Our bylaws permit stockholder action by unanimous written consent.

We are registered in the Republic of the Marshall Islands at The Trust Company of the Marshall Islands, Inc., Registrar of Corporation for non-resident corporations, under registration number 29593.

Directors

Under our bylaws, our directors are elected by a plurality of the votes cast at each annual meeting of the stockholders by the holders of shares entitled to vote in the election. There is no provision for cumulative voting.

Pursuant to the provisions of our bylaws, the board of directors may change the number of directors to not less than three, nor more than 15, by a vote of a majority of the entire board. Each director shall be elected to serve until the third succeeding annual meeting of stockholders and until his or her successor shall have been duly elected and qualified, except in the event of death, resignation or removal. A vacancy on the board created by death, resignation, removal (which may only be for cause), or failure of the stockholders to elect the entire class of directors to be elected at any election of directors or for any other reason may be filled only by an affirmative vote of a majority of the remaining directors then in office, even if less than a quorum, at any special meeting called for that purpose or at any regular meeting of the board of directors. The board of directors has the authority to fix the amounts which shall be payable to the non-employee members of our board of directors for attendance at any meeting or for services rendered to us.

Common Stock

Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of shares of common stock are entitled to receive ratably all dividends, if any, declared by our board of directors out of funds legally available for dividends. Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of our common stock will be entitled to receive pro rata our remaining assets available for distribution. Holders of common stock do not have conversion, redemption or preemptive rights to subscribe to any of our securities. All outstanding shares of common stock are fully paid and non-assessable. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of any shares of preferred stock which we may issue in the future. Our common stock is not subject to any sinking fund provisions and no holder of any shares will be required to make additional contributions of capital with respect to our shares in the future. There are no provisions in our articles of incorporation or bylaws discriminating against a stockholder because of his or her ownership of a particular number of shares.

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We are not aware of any limitations on the rights to own our common stock, including rights of non-resident or foreign stockholders to hold or exercise voting rights on our common stock, imposed by foreign law or by our articles of incorporation or bylaws.

Preferred Stock

Our articles of incorporation authorize our board of directors, without any further vote or action by our stockholders, to issue up to 100,000,000 shares of blank check preferred stock, of which 10,000,000 shares have been designated Series A Participating Preferred Stock in connection with our adoption of a stockholder rights plan as described below under “—Stockholder Rights Plan”, 2,000,000 shares have been designated Series B Cumulative Redeemable Perpetual Preferred Stock, 4,000,000 shares have been designated Series C Cumulative Redeemable Perpetual Preferred Stock and 4,000,000 shares have been designated Series D Cumulative Redeemable Perpetual Preferred Stock, and to determine, with respect to any series of preferred stock established by our board of directors, the terms and rights of that series, including:

•

the designation of the series;

•

the number of shares of the series;

•

the preferences and relative, participating, option or other special rights, if any, and any qualifications, limitations or restrictions of such series; and

•

the voting rights, if any, of the holders of the series.

Stockholder Rights Plan

Each share of our common stock includes a right that entitles the holder to purchase from us a unit consisting of one-thousandth of a share of our Series A participating preferred stock at a purchase price of $25.00 per unit, subject to specified adjustments. The rights are issued pursuant to a stockholder rights agreement between us and American Stock Transfer & Trust Company, as rights agent. Until a right is exercised, the holder of a right will have no rights to vote or receive dividends or any other stockholder rights.

The rights may have anti-takeover effects. The rights will cause substantial dilution to any person or group that attempts to acquire us without the approval of our board of directors. As a result, the overall effect of the rights may be to render more difficult or discourage any attempt to acquire us. Because our board of directors can approve a redemption of the rights for a permitted offer, the rights should not interfere with a merger or other business combination approved by our board of directors. The adoption of the rights agreement was approved by our existing stockholders prior to our initial public offering in November 2010.

We have summarized the material terms and conditions of the rights agreement and the rights below. For a complete description of the rights, we encourage you to read the stockholder rights agreement, which we have filed as an exhibit to this annual report.

Detachment of rights

The rights are attached to all certificates representing our outstanding common stock and will attach to all common stock certificates we issue prior to the rights distribution date that we describe below. The rights are not exercisable until after the rights distribution date and will expire at the close of business on the tenth anniversary date of the adoption of the rights plan, unless we redeem or exchange them earlier as described below. The rights will separate from the common stock and a rights distribution date will occur, subject to specified exceptions, on the earlier of the following two dates:

•

10 days following the first public announcement that a person or group of affiliated or associated persons or an “acquiring person” has acquired or obtained the right to acquire beneficial ownership of 15% or more of our outstanding common stock; or

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•

10 business days following the start of a tender or exchange offer that would result, if closed, in a person becoming an “acquiring person”.

Our controlling stockholders are excluded from the definition of “acquiring person” for purposes of the rights, and therefore their ownership or future share acquisitions cannot trigger the rights. Specified “inadvertent” owners that would otherwise become an acquiring person, including those who would have this designation as a result of repurchases of common stock by us, will not become acquiring persons as a result of those transactions.

Our board of directors may defer the rights distribution date in some circumstances, and some inadvertent acquisitions will not result in a person becoming an acquiring person if the person promptly divests itself of a sufficient number of shares of common stock.

Until the rights distribution date:

•

our common stock certificates will evidence the rights, and the rights will be transferable only with those certificates; and

•

any new shares of common stock will be issued with rights, and new certificates will contain a notation incorporating the rights agreement by reference.

As soon as practicable after the rights distribution date, the rights agent will mail certificates representing the rights to holders of record of common stock at the close of business on that date. As of the rights distribution date, only separate rights certificates will represent the rights.

We will not issue rights with any shares of common stock we issue after the rights distribution date, except as our board of directors may otherwise determine.

Flip-in event

A “flip-in event” will occur under the rights agreement when a person becomes an acquiring person. If a flip-in event occurs and we do not redeem the rights as described under the heading “—Redemption of rights” below, each right, other than any right that has become void, as described below, will become exercisable at the time it is no longer redeemable for the number of shares of common stock, or, in some cases, cash, property or other of our securities, having a current market price equal to two times the exercise price of such right.

If a flip-in event occurs, all rights that then are, or in some circumstances that were, beneficially owned by or transferred to an acquiring person or specified related parties will become void in the circumstances which the rights agreement specifies.

Flip-over event

A “flip-over event” will occur under the rights agreement when, at any time after a person has become an acquiring person:

•

we are acquired in a merger or other business combination transaction; or

•

50% or more of our assets, cash flows or earning power is sold or transferred.

If a flip-over event occurs, each holder of a right, other than any right that has become void as we describe under the heading “—Flip-in event” above, will have the right to receive the number of shares of common stock of the acquiring company having a current market price equal to two times the exercise price of such right.

Antidilution

The number of outstanding rights associated with our common stock is subject to adjustment for any stock split, stock dividend or subdivision, combination or reclassification of our common stock occurring prior to the rights distribution date. With some exceptions, the rights agreement does not require us to adjust the exercise price of the rights until cumulative adjustments amount to at least 1% of the exercise price. It also does not require us to issue fractional shares of our preferred stock that are not integral multiples of one one-hundredth of a share, and, instead, we may make a cash

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adjustment based on the market price of the common stock on the last trading date prior to the date of exercise. The rights agreement reserves us the right to require, prior to the occurrence of any flip-in event or flip-over event that, on any exercise of rights, a number of rights must be exercised so that we will issue only whole shares of stock.

Redemption of rights

At any time until 10 days after the date on which the occurrence of a flip-in event is first publicly announced, we may redeem the rights in whole, but not in part, at a redemption price of $0.01 per right. The redemption price is subject to adjustment for any stock split, stock dividend or similar transaction occurring before the date of redemption. At our option, we may pay that redemption price in cash, shares of common stock or any other consideration our board of directors may select. The rights are not exercisable after a flip-in event until they are no longer redeemable. If our board of directors timely orders the redemption of the rights, the rights will terminate on the effectiveness of that action.

Exchange of rights

We may, at our option, exchange the rights (other than rights owned by an acquiring person or an affiliate or an associate of an acquiring person, which have become void), in whole or in part. The exchange must be at an exchange ratio of one share of common stock per right, subject to specified adjustments at any time after the occurrence of a flip-in event and prior to:

•

any person other than our existing stockholder becoming the beneficial owner of common stock with voting power equal to 50% or more of the total voting power of all shares of common stock entitled to vote in the election of directors; or

•

the occurrence of a flip-over event.

Amendment of terms of rights

While the rights are outstanding, we may amend the provisions of the rights agreement only as follows:

•

to cure any ambiguity, omission, defect or inconsistency;

•

to make changes that do not adversely affect the interests of holders of rights, excluding the interests of any acquiring person; or

•

to shorten or lengthen any time period under the rights agreement, except that we cannot change the time period when rights may be redeemed or lengthen any time period, unless such lengthening protects, enhances or clarifies the benefits of holders of rights other than an acquiring person.

At any time when no rights are outstanding, we may amend any of the provisions of the rights agreement, other than decreasing the redemption price.

Dissenters’ Rights of Appraisal and Payment

Under the BCA, our stockholders have the right to dissent from various corporate actions, including any merger or sale of all, or substantially all, of our assets not made in the usual course of our business, and receive payment of the fair value of their shares. In the event of any amendment of our articles of incorporation, a stockholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissenting stockholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting stockholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the high court of the Republic of the Marshall Islands or in any appropriate court in any jurisdiction in which our shares are primarily traded on a local or national securities exchange. The value of the shares of the dissenting

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stockholder is fixed by the court after reference, if the court so elects, to the recommendations of a court-appointed appraiser.

Stockholders’ Derivative Actions

Under the BCA, any of our stockholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the stockholder bringing the action is a holder of common stock both at the time the derivative action is commenced and at the time of the transaction to which the action relates.

Limitations on Liability and Indemnification of Officers and Directors

The BCA authorizes corporations to limit or eliminate the personal liability of directors and officers to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties. Our articles of incorporation include a provision that eliminates the personal liability of directors for monetary damages for actions taken as a director to the fullest extent permitted by law.

Our bylaws provide that we must indemnify our directors and officers to the fullest extent authorized by law. We are also expressly authorized to advance certain expenses (including attorneys’ fees and disbursements and court costs) to our directors and officers and carry directors’ and officers’ insurance providing indemnification for our directors, officers and certain employees for some liabilities. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors and executive officers.

The limitation of liability and indemnification provisions in our articles of incorporation and bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, stockholders’ investments may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.

Anti-Takeover Effect of Certain Provisions of Our Articles of Incorporation and Bylaws

Several provisions of our articles of incorporation and bylaws, which are summarized in the following paragraphs, may have anti-takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our board of directors to maximize stockholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover provisions could also delay, defer or prevent (a) the merger or acquisition of our company by means of a tender offer, a proxy contest or otherwise that a stockholder might consider in its best interest, including attempts that may result in a premium over the market price for the shares held by the stockholders, and (b) the removal of incumbent officers and directors.

Blank check preferred stock

Under the terms of our articles of incorporation, our board of directors has authority, without any further vote or action by our stockholders, to issue up to 100,000,000 shares of blank check preferred stock, of which 10,000,000 shares have been designated Series A Participating Preferred Stock, in connection with our adoption of a stockholder rights plan as described above under “—Stockholder Rights Plan”, 2,000,000 shares have been designated Series B Cumulative Redeemable Perpetual Preferred Stock, 4,000,000 shares have been designated Series C Cumulative Redeemable Perpetual Preferred Stock and 4,000,000 shares have been designated Series D Cumulative Redeemable Perpetual Preferred Stock. Our board of directors may issue shares of

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preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.

Classified board of directors

Our articles of incorporation provide for a board of directors serving staggered, three-year terms. Approximately one-third of our board of directors will be elected each year. This classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of our company. It could also delay stockholders who do not agree with the policies of the board of directors from removing a majority of the board of directors for two years.

Election and removal of directors

Our articles of incorporation prohibit cumulative voting in the election of directors. Our bylaws require parties other than the board of directors to give advance written notice of nominations for the election of directors. Our articles of incorporation and bylaws also provide that our directors may be removed only for cause. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.

Holders of the Preferred Stock generally have no voting rights except (1) in respect of amendments to the Articles of Incorporation which would adversely alter the preferences, powers or rights of the Preferred Stock or (2) in the event that the Company proposes to issue any parity stock if the cumulative dividends payable on outstanding Preferred Stock are in arrears or any senior stock. However, if and whenever dividends payable on the Preferred Stock are in arrears for six or more quarterly periods, whether or not consecutive, holders of Preferred Stock (for this purpose the Series B and Series C Preferred Stock will vote together as a single class with all other classes or series of parity stock upon which like voting rights have been conferred and are exercisable) will be entitled to elect one additional director to serve on our board of directors, and the size of our board of directors will be increased as needed to accommodate such change (unless the size of our board of directors already has been increased by reason of the election of a director by holders of parity stock upon which like voting rights have been conferred and with which the Preferred Stock voted as a class for the election of such director). The right of such holders of Preferred Stock to elect a member of our board of directors will continue until such time as all accumulated and unpaid dividends on the Preferred Stock have been paid in full.

Calling of special meeting of stockholders

Our articles of incorporation and bylaws provide that special meetings of our stockholders may only be called by our chairman of the board of directors, chief executive officer or by either, at the request of a majority of our board of directors.

Advance notice requirements for stockholder proposals and director nominations

Our bylaws provide that stockholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of stockholders must provide timely notice of their proposal in writing to the corporate secretary.

Generally, to be timely, a stockholder’s notice must be received at our offices not less than 90 days nor more than 120 days prior to the first anniversary date of the previous year’s annual meeting. Our bylaws also specify requirements as to the form and content of a stockholder’s notice. These provisions may impede stockholders’ ability to bring matters before an annual meeting of stockholders or to make nominations for directors at an annual meeting of stockholders.

C. Material Contracts

The following is a summary of each material contract outside the ordinary course of business to which we are a party, for the two years immediately preceding the date of this annual report. Such

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summaries are not intended to be complete and reference is made to the contracts themselves, which are exhibits to this annual report.

(a)

Form of Ship Management Agreement between Costamare Shipping Company S.A. and Shanghai Costamare Ship Management Co., Ltd., please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Management and Services Agreements”.

(b)

Restrictive Covenant Agreement dated November 3, 2010, between Costamare Inc. and Konstantinos Konstantakopoulos, please see “Item 7. Major Shareholders and Related Party Transactions—Related Party Transactions—Restrictive Covenant Agreements”.

(c)

Stockholder Rights Agreement dated October 19, 2010, between Costamare Inc. and American Stock Transfer & Trust Company, LLC, as Rights Agent. For a description of the Stockholder Rights Agreement, please see “Item 10. Additional Information—B. Memorandum and Articles of Association—Stockholder Rights Plan”.

(d)

Trademark License Agreement dated November 3, 2010 between Costamare Inc. and Costamare Shipping Company S.A. and the Addendum thereto dated February 29, 2016, please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Trademark License Agreement”.

(e)

Facility Agreement dated July 22, 2008 (the “Facility Agreement”), relating to a loan facility of US$1,000,000,000 comprising (i) a term loan facility of up to US$700,000,000 and (ii) a revolving credit facility of up to US$300,000,000 among the lenders and financial institutions set out on Schedule I thereto, Commerzbank AG as successor to Deutsche Schiffsbank Aktiengessellschaft, as joint arranger, agent, swap bank and security agent, Bayerische Hypo-Und Vereinsbank Aktiengessellschaft, as joint arranger, swap bank and account bank, HSH Nordbank AG, as swap bank, and Costamare Inc., as borrower, please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities”.

(f)

Restrictive Covenant Agreement dated July 24, 2012, between Costamare Inc. and Konstantinos Zacharatos, please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Restrictive Covenant Agreements”.

(g)

Form of Ship Management Agreement between Costamare Shipping Company S.A. and V.Ships Greece Ltd., please see “Item 4. Information on the Company—B. Business Overview—Management of Our Fleet”.

(h)

Agreement Relating to Group Management Agreement and Ship-management Agreements between Costamare Shipping Company S.A. and Costamare Inc. dated January 22, 2013, please see “Item 4. Information on the Company—B. Business Overview—Management of Our Fleet”.

(i)

Amended and Restated Management Agreement dated March 3, 2015, between Costamare Shipping Company S.A. and Costamare Inc. For a description of the Group Management Agreement, please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Management and Services Agreement”.

(j)

Framework Deed dated May 15, 2013 as amended and restated on May 18, 2015, between Sparrow Holdings, L.P., York Capital Management Global Advisors LLC, Costamare Inc. and Costamare Ventures Inc., please see “Item 4. Information on the Company—B. Business Overview—Our Fleet, Acquisitions and Newbuild Vessels—Framework Deed”.

(k)

Framework Agreement dated November 2, 2015, by and between Costamare Inc. and Costamare Shipping Company S.A., please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Management and Services Agreement”.

(l)

Services Agreement dated November 2, 2015, by and between the subsidiaries of Costamare Inc. set out in Schedule A thereto and Costamare Shipping Services Ltd., please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Management and Services Agreement”.

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(m)

Agreement Relating to Framework Agreement and Ship-management Agreements between Costamare Shipping Company S.A. and Costamare Inc., dated November 2, 2015

(n)

Amended and Restated Registration Rights Agreement dated as of November 27, 2015, between Costamare Inc. and the Stockholders named therein, please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Registration Rights Agreement”.

D. Exchange Controls and Other Limitations Affecting Security Holders

Under Marshall Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of our common stock.

E. Tax Considerations

Marshall Islands Tax Considerations

We are a non-resident domestic Marshall Islands corporation. Because we do not, and we do not expect that we will, conduct business or operations in the Marshall Islands, under current Marshall Islands law we are not subject to tax on income or capital gains and our stockholders (so long as they are not citizens or residents of the Marshall Islands) will not be subject to Marshall Islands taxation or withholding on dividends and other distributions (including upon a return of capital) we make to our stockholders. In addition, so long as our stockholders are not citizens or residents of the Marshall Islands, our stockholders will not be subject to Marshall Islands stamp, capital gains or other taxes on the purchase, holding or disposition of our common stock or Preferred Stock, and our stockholders will not be required by the Republic of the Marshall Islands to file a tax return relating to our common stock or Preferred Stock.

Each stockholder is urged to consult their tax counselor or other advisor with regard to the legal and tax consequences, under the laws of pertinent jurisdictions, including the Marshall Islands, of their investment in us. Further, it is the responsibility of each stockholder to file all state, local and non- U.S., as well as U.S. Federal tax returns that may be required of them.

Liberian Tax Considerations

The Republic of Liberia enacted a new income tax act effective as of January 1, 2001 (the “New Act”). In contrast to the income tax law previously in effect since 1977, the New Act does not distinguish between the taxation of “non-resident” Liberian corporations, such as our Liberian subsidiaries, which conduct no business in Liberia and were wholly exempt from taxation under the prior law, and “resident” Liberian corporations, which conduct business in Liberia and are (and were under the prior law) subject to taxation.

The New Act was amended by the Consolidated Tax Amendments Act of 2011, which was published and became effective on November 1, 2011 (the “Amended Act”). The Amended Act specifically exempts from taxation non-resident Liberian corporations such as our Liberian subsidiaries that engage in international shipping (and are not engaged in shipping exclusively within Liberia) and that do not engage in other business or activities in Liberia other than those specifically enumerated in the Amended Act. In addition, the Amended Act made such exemption from taxation retroactive to the effective date of the New Act.

If, however, our Liberian subsidiaries were subject to Liberian income tax under the Amended Act, they would be subject to tax at a rate of 35% on their worldwide income. As a result, their, and subsequently our, net income and cash flow would be materially reduced. In addition, as the ultimate stockholder of the Liberian subsidiaries, we would be subject to Liberian withholding tax on dividends paid by our Liberian subsidiaries at rates ranging from 15% to 20%.

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United States Federal Income Tax Considerations

The following discussion of U.S. Federal income tax matters is based on the Code, judicial decisions, administrative pronouncements, and existing and proposed regulations issued by the U.S. Department of the Treasury, all of which are subject to change, possibly with retroactive effect. This discussion does not address any U.S. state or local tax matters. You are encouraged to consult your own tax advisor regarding the particular United States Federal, state and local and foreign income and other tax consequences of acquiring, owning and disposing of our common stock or Preferred Stock that may be applicable to you.

Taxation of Our Shipping Income

Subject to the discussion of “effectively connected” income below, unless exempt from U.S. Federal income tax under the rules contained in Section 883 of the Code and the Treasury Regulations promulgated thereunder, a non-U.S. corporation is, under the rules of Section 887 of the Code, subject to a 4% U.S. Federal income tax in respect of its U.S. source gross transportation income (without the allowance for deductions).

For this purpose, U.S. source gross transportation income includes 50% of the shipping income that is attributable to transportation that begins or ends (but that does not both begin and end) in the United States. Shipping income attributable to transportation exclusively between non-U.S. ports is generally not subject to any U.S. Federal income tax.

“Shipping income” means income that is derived from:

(a)

the use of vessels;

(b)

the hiring or leasing of vessels for use on a time, operating or bareboat charter basis;

(c)

the participation in a pool, partnership, strategic alliance, joint operating agreement or other joint venture it directly or indirectly owns or participates in that generates such income; or

(d)

the performance of services directly related to those uses.

Under Section 883 of the Code and the Treasury Regulations promulgated thereunder, a non-U.S. corporation will be exempt from U.S. Federal income tax on its U.S. source gross transportation income if:

(a)

it is organized in a foreign country (or the “country of organization”) that grants an “equivalent exemption” to U.S. corporations; and

(b)

either

(i)

more than 50% of the value of its stock is owned, directly or indirectly, by individuals who are “residents” of our country of organization or of another foreign country that grants an “equivalent exemption” to U.S. corporations; or

(ii)

its stock is “primarily and regularly traded on an established securities market” in its country of organization, in another country that grants an “equivalent exemption” to U.S. corporations, or in the United States.

We believe that we have qualified and currently intend to continue to qualify for this statutory tax exemption for the foreseeable future. However, no assurance can be given that this will be the case in the future. If we or our subsidiaries are not entitled to this exemption under Section 883 for any taxable year, we or our subsidiaries would be subject for those years to a 4% U.S. Federal income tax on our U.S. source gross transportation income, subject to the discussion of “effectively connected” income below. Since we expect that no more than 50% of our gross shipping income would be treated as U.S. source gross transportation income, we expect that the effective rate of U.S. Federal income tax on our gross transportation income would not exceed 2%. Many of our time charters contain provisions pursuant to which charterers undertake to reimburse us for the 4% gross basis tax on our U.S. source gross transportation income.

To the extent exemption under Section 883 is unavailable, our U.S. source gross transportation income that is considered to be “effectively connected” with the conduct of a U.S. trade or business would be subject to the U.S. corporate income tax currently imposed at rates of up to 35% (net of

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applicable deductions). In addition, we may be subject to the 30% U.S. “branch profits” tax on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of our U.S. trade or business.

Our U.S. source gross transportation income would be considered “effectively connected” with the conduct of a U.S. trade or business only if:

(a)

we had, or were considered to have, a fixed place of business in the United States involved in the earning of U.S. source gross transportation income; and

(b)

substantially all of our U.S. source gross transportation income was attributable to regularly scheduled transportation, such as the operation of a vessel that followed a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.

We believe that we will not meet these conditions because we will not have, or permit circumstances that would result in us having, such a fixed place of business in the United States or any vessel sailing to or from the United States on a regularly scheduled basis.

In addition, income attributable to transportation that both begins and ends in the United States is not subject to the tax rules described above. Such income is subject to either a 30% gross-basis tax or to U.S. corporate income tax on net income at rates of up to 35% (and the branch profits tax discussed above). Although there can be no assurance, we do not expect to engage in transportation that produces shipping income of this type.

Taxation of Gain on Sale of Assets

Regardless of whether we qualify for the exemption under Section 883 of the Code, we will not be subject to U.S. Federal income taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States (as determined under U.S. tax principles). In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel (and risk of loss with respect to the vessel) passes to the buyer outside of the United States. We expect that any sale of a vessel will be so structured that it will be considered to occur outside of the United States.

Taxation of United States Holders

You are a “U.S. holder” if you are a beneficial owner of our common stock or our Preferred Stock and you are a U.S. citizen or resident, a U.S. corporation (or other U.S. entity taxable as a corporation), an estate the income of which is subject to U.S. Federal income taxation regardless of its source, or a trust if (i) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of that trust or (ii) the trust has a valid election in effect to be treated as a U.S. person for U.S. Federal income tax purposes.

If a partnership holds our common stock or Preferred Stock, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding our common stock, you should consult your tax advisor.

Distributions on Our Common Stock and Preferred Stock

Subject to the discussion of PFICs below, any distributions with respect to our common stock or Preferred Stock that you receive from us will generally constitute dividends, which may be taxable as ordinary income or “qualified dividend income” as described below, to the extent of our current or accumulated earnings and profits (as determined under U.S. tax principles). Distributions in excess of our earnings and profits will be treated first as a nontaxable return of capital to the extent of your tax basis in our common stock or Preferred Stock (on a dollar-for-dollar basis) and thereafter as capital gain.

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Because we are not a U.S. corporation, if you are a U.S. corporation (or a U.S. entity taxable as a corporation), you will not be entitled to claim a dividends-received deduction with respect to any distributions you receive from us.

Dividends paid with respect to our common stock or Preferred Stock will generally be treated as “passive category income” for purposes of computing allowable foreign tax credits for U.S. foreign tax credit purposes.

If you are an individual, trust or estate, dividends you receive from us should be treated as “qualified dividend income”, provided that:

(a)

the common stock or Preferred Stock is readily tradable on an established securities market in the United States (such as the NYSE);

(b)

we are not a PFIC for the taxable year during which the dividend is paid or the immediately preceding taxable year (see the discussion below under “—PFIC Status”);

(c)

you own our common stock or our Preferred Stock for more than 60 days in the 121-day period beginning 60 days before the date on which the common stock or Preferred Stock becomes ex-dividend;

(d)

you are not under an obligation to make related payments with respect to positions in substantially similar or related property; and

(e)

certain other conditions are met.

Qualified dividend income is taxed at a preferential maximum rate of 15% or 20%, depending on the income level of the taxpayer.

Special rules may apply to any “extraordinary dividend”. Generally, an extraordinary dividend is a dividend in an amount that is equal to (or in excess of) 10% of your adjusted tax basis (or fair market value in certain circumstances) in a share of our common stock (5% in the case of Preferred Stock). If we pay an extraordinary dividend on our common stock or Preferred Stock that is treated as qualified dividend income and if you are an individual, estate or trust, then any loss derived by you from a subsequent sale or exchange of such common stock or Preferred Stock will be treated as long-term capital loss to the extent of such dividend.

There is no assurance that dividends you receive from us will be eligible for the preferential rates applicable to qualified dividend income. Dividends you receive from us that are not eligible for the preferential rates will be taxed at the ordinary income rates.

Sale, Exchange or Other Disposition of Common Stock and Preferred Stock

Provided that we are not a PFIC for any taxable year, you generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common stock or Preferred Stock in an amount equal to the difference between the amount realized by you from such sale, exchange or other disposition and your tax basis in such stock. Such gain or loss will be treated as long-term capital gain or loss if your holding period is greater than one year at the time of the sale, exchange or other disposition. Such capital gain or loss will generally be treated as U.S. source income or loss, as applicable, for U.S. foreign tax credit purposes. Your ability to deduct capital losses against ordinary income is subject to limitations.

Unearned Income Medicare Contribution Tax

Each U.S. holder who is an individual, estate or trust will generally be subject to a 3.8% Medicare tax on the lesser of (i) such U.S. holder’s “net investment income” for the relevant taxable year and (ii) the excess of such U.S. holder’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000, depending on the individual’s circumstances). For this purpose, net investment income generally includes dividends on and capital gains from the sale, exchange or other disposition of our common stock or Preferred Stock, subject to certain exceptions. You are encouraged to consult your own tax

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advisor regarding the applicability of the Medicare tax to your income and gains from your ownership of our common stock or Preferred Stock.

PFIC Status

Special U.S. Federal income tax rules apply to you if you hold stock in a non-U.S. corporation that is classified as a PFIC for U.S. Federal income tax purposes. In general, we will be treated as a PFIC in any taxable year in which, after applying certain look-through rules, either:

(a)

at least 75% of our gross income for such taxable year consists of “passive income” (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or

(b)

at least 50% of the average value of our assets during such taxable year consists of “passive assets” (i.e., assets that produce, or are held for the production of, passive income).

For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share of the income and assets, respectively, of any of our subsidiary corporations in which we own at least 25% of the value of the subsidiary’s stock. Income we earned, or are deemed to earn, in connection with the performance of services will not constitute passive income. By contrast, rental income will generally constitute passive income (unless we are treated under certain special rules as deriving our rental income in the active conduct of a trade or business).

There are legal uncertainties involved in determining whether the income derived from time chartering activities constitutes rental income or income derived from the performance of services. In Tidewater Inc. v. United States , 565 F.2d 299 (5th Cir. 2009), the Fifth Circuit held that income derived from certain time chartering activities should be treated as rental income rather than services income for purposes of a foreign sales corporation provision of the Code. In a recent published guidance, however, the IRS states that it disagrees with the holding in Tidewater , and specifies that time charters should be treated as service contracts. Since we have chartered all our vessels to unrelated charterers on the basis of time charters and since we expect to continue to do so, we believe that we are not now and have never been a PFIC. Our counsel, Cravath, Swaine & Moore LLP, has provided us with an opinion that we should not be a PFIC based on certain representations we made to them, including the representation that Costamare Shipping, which manages the Company’s vessels, is not related to any charterer of the vessels, and of certain assumptions made by them, including the assumption that time charters of the Company will be arranged in a manner substantially similar to the terms of its existing time charters. However, we have not sought, and we do not expect to seek, an IRS ruling on this matter. As a result, the IRS or a court could disagree with our position. No assurance can be given that this result will not occur. In addition, although we intend to conduct our affairs in a manner to avoid, to the extent possible, being classified as a PFIC with respect to any taxable year, we cannot assure you that the nature of our operations will not change in the future, or that we can avoid PFIC status in the future.

As discussed below, if we were to be treated as a PFIC for any taxable year, you generally would be subject to one of three different U.S. Federal income tax regimes, depending on whether or not you make certain elections. Additionally, starting in 2013, for each year during which you own our common stock, we are a PFIC and the total value of all PFIC stock that you directly or indirectly own exceeds certain thresholds, you will be required to file IRS Form 8621 with your U.S. Federal income tax return to report your ownership of our common stock.

The PFIC rules are complex, and you are encouraged to consult your own tax advisor regarding the PFIC rules, including the annual PFIC reporting requirement.

Taxation of U.S. Holders That Make a Timely QEF Election

If we were a PFIC and if you make a timely election to treat us as a “Qualifying Electing Fund” for U.S. tax purposes (a “QEF Election”), you would be required to report each year your pro rata share of our ordinary earnings and our net capital gain for our taxable year that ends with or within your taxable year, regardless of whether we make any distributions to you. Such income inclusions would not be eligible for the preferential tax rates applicable to qualified dividend income.

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Your adjusted tax basis in our common stock or Preferred Stock would be increased to reflect such taxed but undistributed earnings and profits. Distributions of earnings and profits that had previously been taxed would result in a corresponding reduction in your adjusted tax basis in our common stock or Preferred Stock and would not be taxed again once distributed. You would generally recognize capital gain or loss on the sale, exchange or other disposition of our common stock or Preferred Stock. Even if you make a QEF Election for one of our taxable years, if we were a PFIC for a prior taxable year during which you held our common stock or Preferred Stock and for which you did not make a timely QEF Election, you would also be subject to the more adverse rules described below under “Taxation of U.S. Holders That Make No Election”. Additionally, to the extent any of our subsidiaries is a PFIC, your election to treat us as a “Qualifying Electing Fund” would not be effective with respect to your deemed ownership of the stock of such subsidiary and a separate QEF Election with respect to such subsidiary is required.

You would make a QEF Election by completing and filing IRS Form 8621 with your U.S. Federal income tax return for the year for which the election is made in accordance with the relevant instructions. If we were to become aware that we were to be treated as a PFIC for any taxable year, we would notify all U.S. holders of such treatment and would provide all necessary information to any U.S. holder who requests such information in order to make the QEF Election described above with respect to us and the relevant subsidiaries.

Taxation of U.S. Holders That Make a Timely “Mark-to-Market” Election

Alternatively, if we were to be treated as a PFIC for any taxable year and, as we believe, our common stock or Preferred Stock is treated as “marketable stock”, you would be allowed to make a “mark-to-market” election with respect to our common stock or Preferred Stock, provided you complete and file IRS Form 8621 with your U.S. Federal income tax return for the year for which the election is made in accordance with the relevant instructions. If that election is made, you generally would include as ordinary income in each taxable year the excess, if any, of the fair market value of our common stock or Preferred Stock at the end of the taxable year over your adjusted tax basis in our common stock or Preferred Stock. You also would be permitted an ordinary loss in respect of the excess, if any, of your adjusted tax basis in our common stock or Preferred Stock over its fair market value at the end of the taxable year (but only to the extent of the net amount previously included in income as a result of the mark-to-market election). Your tax basis in our common stock or Preferred Stock would be adjusted to reflect any such income or loss amount. Gain realized on the sale, exchange or other disposition of our common stock or Preferred Stock would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the common stock or Preferred Stock would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included by you. However, to the extent any of our subsidiaries is a PFIC, your “mark-to-market” election with respect to our common stock or Preferred Stock would not apply to your deemed ownership of the stock of such subsidiary.

Taxation of U.S. Holders That Make No Election

Finally, if we were treated as a PFIC for any taxable year and if you did not make either a QEF Election or a “mark-to-market” election for that year, you would be subject to special rules with respect to (a) any excess distribution (that is, the portion of any distributions received by you on our common stock or Preferred Stock in a taxable year in excess of 125% of the average annual distributions received by you in the three preceding taxable years, or, if shorter, your holding period for our common stock or Preferred Stock) and (b) any gain realized on the sale, exchange or other disposition of our common stock or Preferred Stock. Under these special rules:

(i)

the excess distribution or gain would be allocated ratably over your aggregate holding period for our common stock or Preferred Stock;

(ii)

the amount allocated to the current taxable year would be taxed as ordinary income; and

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(iii)

the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.

If you died while owning our common stock or Preferred Stock, your successor generally would not receive a step-up in tax basis with respect to such stock for U.S. tax purposes.

United States Federal Income Taxation of Non-U.S. Holders

You are a “non-U.S. holder” if you are a beneficial owner of our common stock (other than a partnership for U.S. tax purposes) and you are not a U.S. holder.

Distributions on Our Common Stock and Preferred Stock

You generally will not be subject to U.S. Federal income or withholding taxes on a distribution received from us with respect to our common stock or Preferred Stock, unless the income arising from such distribution is effectively connected with your conduct of a trade or business in the United States. If you are entitled to the benefits of an applicable income tax treaty with respect to that income, such income generally is taxable in the United States only if it is attributable to a permanent establishment maintained by you in the United States.

Sale, Exchange or Other Disposition of Our Common Stock and Preferred Stock

You generally will not be subject to U.S. Federal income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of our common stock or Preferred Stock, unless:

(a)

the gain is effectively connected with your conduct of a trade or business in the United States. If you are entitled to the benefits of an applicable income tax treaty with respect to that gain, that gain generally is taxable in the United States only if it is attributable to a permanent establishment maintained by you in the United States; or

(b)

you are an individual who is present in the United States for 183 days or more during the taxable year of disposition and certain other conditions are met.

Gain that is effectively connected with the conduct of a trade or business in the United States (or so treated) generally will be subject to U.S. Federal income tax, net of certain deductions, at regular U.S. Federal income tax rates. If you are a corporate non-U.S. holder, your earnings and profits that are attributable to the effectively connected income (subject to certain adjustments) may be subject to an additional U.S. branch profits tax at a rate of 30% (or such lower rate as may be specified by an applicable tax treaty).

United States Backup Withholding and Information Reporting

In general, if you are a non-corporate U.S. holder, dividend payments (or other taxable distributions) made within the United States will be subject to information reporting requirements and backup withholding tax if you:


	(1)		fail to provide us with an accurate taxpayer identification number;

	(2)		are notified by the IRS that you have failed to report all interest or dividends required to be shown on your Federal income tax returns; or

	(3)		in certain circumstances, fail to comply with applicable certification requirements.

If you are a non-U.S. holder, you may be required to establish your exemption from information reporting and backup withholding by certifying your status on IRS Form W-8BEN, W-8BEN-E, W-8ECI or W-8IMY, as applicable.

If you sell our common stock or Preferred Stock to or through a U.S. office or broker, the payment of the sales proceeds is subject to both U.S. backup withholding and information reporting

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unless you certify that you are a non-U.S. person, under penalties of perjury, or you otherwise establish an exemption. If you sell our common stock or Preferred Stock through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to you outside the United States, then information reporting and backup withholding generally will not apply to that payment.

However, U.S. information reporting requirements (but not backup withholding) will apply to a payment of sales proceeds, even if that payment is made outside the United States, if you sell our common stock or Preferred Stock through a non-U.S. office of a broker that is a U.S. person or has certain other connections with the United States. Backup withholding tax is not an additional tax. Rather, you generally may obtain a refund of any amounts withheld under backup withholding rules that exceed your income tax liability by accurately completing and timely filing a refund claim with the IRS.

U.S. individuals who hold certain specified foreign assets with values in excess of certain dollar thresholds are required to report such assets on IRS Form 8938 with their U.S. Federal income tax return, subject to certain exceptions (including an exception for foreign assets held in accounts maintained by U.S. financial institutions). Stock in a foreign corporation, including our common stock or Preferred Stock, is a specified foreign asset for this purpose. Penalties apply for failure to properly complete and file Form 8938. You are encouraged to consult with your tax advisor regarding the filing of this form.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on Display

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In accordance with these requirements, we file reports and other information as a foreign private issuer with the SEC. You may inspect and copy our public filings without charge at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. You may obtain copies of all or any part of such materials from the SEC upon payment of prescribed fees. You may also inspect reports and other information regarding registrants, such as us, that file electronically with the SEC without charge at a website maintained by the SEC at http://www.sec.gov .

I. Subsidiary Information

Not applicable.

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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A. Quantitative Information About Market Risk

Interest Rate Risk

The following table sets forth the sensitivity of our long-term debt, including the effect on our consolidated statement of income of our derivative contracts to a 100 basis points increase in LIBOR during the next five years on the same basis.

Net Difference in Earnings and Cash Flows (in millions of U.S. dollars):


Year	Amount
2016		1.8
2017		2.1
2018		1.3
2019		0.4
2020		0.1

Interest Rate Swaps

According to our long-term strategic plan to maintain stability in our interest rate exposure, we have decided to minimize our exposure to floating interest rates by entering into interest rate swap agreements. To this effect, we have entered into interest rate swap transactions with varying start and maturity dates, in order to proactively and efficiently manage our floating rate exposure. We have not held or issued derivative financial instruments for trading or other speculative purposes.

ASC 815, “Derivatives and Hedging”, established accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. All derivatives are recognized in the consolidated financial statements at their fair value. On the inception date of the derivative contract, and an ongoing basis, and after putting in place the formal documentation required by ASC 815 in order to designate these derivatives as hedging instruments, we designate the derivative as a hedge of a forecasted transaction or the variability of cash flow to be paid. Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge is recorded in other comprehensive income until earnings are affected by the forecasted transaction or the variability of cash flow and are then reported in earnings. Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in earnings in the period in which those fair value changes have occurred.

(a) Interest rate swaps that meet the criteria for hedge accounting: These interest rate swaps are designed to hedge the variability of interest cash flows arising from floating rate debt, attributable to movements in three-month or six-month LIBOR. According to our Risk Management Accounting Policy, after putting in place the formal documentation required by ASC 815 in order to designate these swaps as hedging instruments as from their inception, these interest rate swaps qualified for hedge accounting. Accordingly, only hedge ineffectiveness amounts arising from the differences in the change in fair value of the hedging instrument and the hedged item are recognized in earnings. Assessment and measurement of the effectiveness of these interest rate swaps are performed at each reporting period. For qualifying cash flow hedges, the fair value gain or loss associated with the effective portion of the cash flow hedge is recognized initially in “Other comprehensive income”

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within stockholders’ equity and recognized in the consolidated statement of income in the periods when the hedged item affects profit or loss. Any ineffective portion of the gain or loss on the hedging instrument is recognized in the consolidated statement of income immediately.

At December 31, 2014 and 2015, we had interest rate swap agreements with an outstanding notional amount of $1,030.6 million and $904.6 million, respectively. The fair value of these interest rate swaps outstanding at December 31, 2014 and 2015, amounted to a liability of $55.4 million and a liability of $39.7 million, respectively and these are included in the related consolidated balance sheets. The maturity of these interest rate swaps range between June 2018 and January 2021.

(b) Interest rate swaps that do not meet the criteria for hedge accounting: As of December 31, 2014 and 2015, we had interest rate swap agreements with an outstanding notional amount of $217.5 million and $207.4 million, respectively for the purpose of managing risks associated with the variability of changing LIBOR-related interest rates. Such agreements did not meet hedge accounting criteria and, therefore, changes in their fair value are reflected in earnings. The fair value of these interest rate swaps at December 31, 2014 and 2015, was a liability of $18.5 million and a liability of $12.5 million, respectively and these are included in the related consolidated balance sheets. The maturity of these interest rate swaps range between February 2017 and August 2020.

Foreign Currency Exchange Risk

As of December 31, 2015, the Company was engaged in 16 Euro/U.S. dollar contracts totaling $20.0 million at an average forward rate of Euro/U.S. dollar 1.0725 expiring in monthly intervals up to August 2016.

As of December 31, 2014, the Company was engaged in nine Euro/U.S. dollar contracts totaling $22.5 million at an average forward rate of Euro/U.S. dollar 1.273 expiring in monthly intervals up to September 2015.

As of December 31, 2013, the Company had no outstanding Euro/U.S. dollar foreign currency agreements.

Inflation

We do not consider inflation to be a significant risk to our business in the current environment and foreseeable future.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

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PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Please see “Item 5—Operating and Financial Review and Prospects—B. Liquidity and Capital Resources”.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

A. Material Modifications to the Rights of Security Holders

We adopted a stockholder rights plan on October 19, 2010 that authorizes the issuance to our existing stockholders of preferred share rights and additional shares of common stock if any third party seeks to acquire control of a substantial block of our common stock. See “Item 10. Additional Information—B. Memorandum and Articles of Association—Stockholder Rights Plan” included in this annual report for a description of the stockholder rights plan.

ITEM 15. CONTROLS AND PROCEDURES

A. Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2015. Based on our evaluation, the chief executive officer and the chief financial officer have concluded that our disclosure controls and procedures were effective as of December 31, 2015.

B. Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act and for the assessment of the effectiveness of internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In making its assessment of our internal control over financial reporting as of December 31, 2015, management, including the chief executive officer and chief financial officer, used the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (“COSO”).

Management concluded that, as of December 31, 2015, our internal control over financial reporting was effective. Ernst & Young (Hellas) Certified Auditors-Accountants S.A., our

122

independent registered public accounting firm, has audited the financial statements included herein and our internal control over financial reporting and has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 31, 2015, which is incorporated by reference into Item 15.C below.

C. Attestation Report of the Registered Public Accounting Firm

The attestation report on the Company’s internal control over financial reporting issued by the registered public accounting firm that audited the consolidated financial statements, Ernst & Young (Hellas) Certified Auditors-Accountants S.A., appears under Item 18 and such report is incorporated herein by reference.

D. Changes in Internal Control Over Financial Reporting

During the period covered by this annual report, we have made no changes to our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

ITEM 16.A. AUDIT COMMITTEE FINANCIAL EXPERT

Our Audit Committee consists of two independent directors, Vagn Lehd Møller and Charlotte Stratos, who is the chairman of the committee. Our board of directors has determined that Charlotte Stratos, whose biographical details are included in “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management”, qualifies as an audit committee financial expert as defined under current SEC regulations.

ITEM 16.B. CODE OF ETHICS

We have adopted a Code of Business Conduct and Ethics for all officers and employees of our Company, a copy of which is posted on our website, and may be viewed at http://costamare.irwebpage.com/ethics.html .

We will also provide a paper copy of this document free of charge upon written request by our stockholders. Stockholders may direct their requests to the attention of Anastassios Gabrielides, Secretary, Costamare Inc., 7 Rue du Gabian, MC 98000 Monaco. No waivers of the Code of Business Conduct and Ethics have been granted to any person during the fiscal year ended December 31, 2015.

ITEM 16.C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Ernst & Young (Hellas) Certified Auditors-Accountants S.A., an independent registered public accounting firm, has audited our annual financial statements acting as our independent auditor for the fiscal years ended December 31, 2014 and 2015.

The chart below sets forth the total amount billed and accrued for Ernst & Young (Hellas) Certified Auditors-Accountants S.A. services performed in 2015 and 2014 and breaks down these amounts by the category of service.

2015

2014

Audit fees

€ 579,075

€ 782,250

Tax fees

€ 7,400

€ 9,700

Total fees

€ 586,475

€ 791,950

Audit Fees

Audit fees represent compensation for professional services rendered for the audit of the consolidated financial statements of the Company, for the audit of internal control over financial reporting as of December 31, 2015 and for the review of the quarterly financial information, as well as in connection with the review of the registration statements and related consents and comfort letters and any other audit services required for SEC or other regulatory filings. Audit fees in

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connection with our Series C Preferred Stock offering completed in January 2014 amounted to € 20,000 and are included in the 2014 total fees in the aforementioned table. Audit fees in connection with Costamare Partners LP’s registration statement on Form F-1 filed with the SEC in October 2014, as amended in October 2014 and November 2014, amounted to € 225,000 and are included in the 2014 total fees in the aforementioned table. Audit fees in connection with our Series D Preferred Stock offering completed in May 2015 amounted to € 20,000 and are included in the 2015 total fees in the aforementioned table. Audit fees in connection with Costamare Partners LP’s registration statement on Form F-1, as amended in January 2015, June 2015 and August 2015, and withdrawn in November 2015, amounted to € 51,500 and are included in the 2015 total fees in the aforementioned table.

Tax fees

The full amount of tax fees in 2014 and 2015 relates to tax compliance assurance services in respect of the U.S. tax earnings and profits computation for the years ended December 31, 2014 and December 31, 2015.

Audit-related fees

No audit-related fees were billed in 2014 and 2015.

Pre-approval Policies and Procedures

The audit committee charter sets forth our policy regarding retention of the independent auditors, giving the audit committee responsibility for the appointment, compensation, retention and oversight of the work of the independent auditors. The audit committee charter provides that the committee is responsible for reviewing and approving in advance the retention of the independent auditors for the performance of all audit and lawfully permitted non-audit services. The chairman of the audit committee or, in the absence of the chairman, any member of the audit committee designated by the chairman, has authority to approve in advance any lawfully permitted non-audit services and fees. The audit committee is authorized to establish other policies and procedures for the pre-approval of such services and fees. Where non-audit services and fees are approved under delegated authority, the action must be reported to the full audit committee at its next regularly scheduled meeting.

ITEM 16.D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

None.

ITEM 16.E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Set forth below are the payments of common shares received in 2015 by Costamare Shipping and Costamare Services, which are controlled by our chief executive officer and chairman, Konstantinos Konstantakopoulos, or his family pursuant to the Group Management Agreement and Services Agreement in exchange for services provided to the Company and the Company’s vessel-owning subsidiaries.


Period	Total Number of Shares Purchased		Average Price Paid per Share ($) ⁽¹⁾		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs

March 2015		149,600		—		—		—
June 2015		149,600		—		—		—
September 2015		149,600		—		—		—
December 2015		149,600		—		—		—

Total		598,400

⁽¹⁾

These shares were issued by the Company pursuant to the Services Agreement in exchange for services provided to the Company’s vessel-owning subsidiaries.

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ITEM 16.F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not Applicable.

ITEM 16.G. CORPORATE GOVERNANCE

Statement of Significant Differences Between our Corporate Governance Practices and the New York Stock Exchange Corporate Governance Standards for U.S. Non-Controlled Issuers

Overview

Pursuant to certain exceptions for foreign private issuers and controlled companies, we are not required to comply with certain of the corporate governance practices followed by U.S. and non-controlled companies under the NYSE listing standards. However, pursuant to Section 303A.11 of the NYSE Listed Company Manual and the requirements of Form 20-F, we are required to state any significant differences between our corporate governance practices and the practices required by the NYSE. We believe that our established practices in the area of corporate governance are in line with the spirit of the NYSE standards and provide adequate protection to our stockholders. The significant differences between our corporate governance practices and the NYSE standards applicable to listed U.S. companies are set forth below.

Independent Directors

Pursuant to NYSE Rule 303A.01, the NYSE requires that listed companies have a majority of independent directors. As permitted under Marshall Islands law and our bylaws, our board of directors consists of a majority of non-independent directors.

Corporate Governance, Nominating and Compensation Committee

NYSE Rules 303A.04 and 303A.05 require that a listed U.S. company have a nominating/corporate governance committee and a compensation committee, each composed entirely of independent directors. As permitted under Marshall Islands law, we have a combined corporate governance, nominating and compensation committee, which at present is composed wholly of two independent directors and one non-independent director.

NYSE Rules 303A.02 and 303A.05, contains independence requirements for compensation committee directors and compensation committee advisers for U.S. listed companies, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Marshall Islands law does not have similar requirements, therefore we may not adhere to these new requirements.

Audit Committee

Pursuant to NYSE Rule 303A.07, the NYSE requires that the audit committee of a listed U.S. company have a minimum of three members. As permitted under Marshall Islands law, our audit committee consists of two members.

ITEM 16.H. MINE SAFETY DISCLOSURE

Not Applicable.

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PART III

ITEM 17. FINANCIAL STATEMENTS

Not Applicable.

ITEM 18. FINANCIAL STATEMENTS

Reference is made to pages F-1 through F-40 included herein by reference.

ITEM 19. EXHIBITS


Exhibit No.		Description
1.1		Second Amended and Restated Articles of Incorporation ⁽¹⁾

1.2		First Amended and Restated Bylaws ⁽¹⁾

4.1		Form of Ship Management Agreement between Costamare Shipping Company S.A. and Shanghai Costamare Ship Management Co., Ltd. ⁽²⁾

4.2		Form of Restrictive Covenant Agreement between Costamare Inc. and Konstantinos Konstantakopoulos ⁽²⁾

4.3		Form of Stockholders Rights Agreement between Costamare Inc. and American Stock Transfer & Trust Company, LLC ⁽²⁾

4.4		Form of Trademark License Agreement between Costamare Inc. and Costamare Shipping Company S.A. ⁽²⁾

4.5		Facility Agreement dated July 22, 2008 (the “Facility Agreement”) relating to a loan facility of US$1,000,000,000 comprising (i) a term loan facility of up to US$700,000,000 and (ii) a revolving credit facility of up to US$300,000,000 among the lenders and financial institutions set out on Schedule I thereto, Commerzbank AG as successor to Deutsche Schiffsbank Aktiengessellschaft, as joint arranger, agent, swap bank and security agent, Bayerische Hypo-Und Vereinsbank Aktiengessellschaft, as joint arranger, swap bank and account bank, HSH Nordbank AG, as swap bank, and the Company, as borrower ⁽²⁾

4.6		Form of Restrictive Covenant Agreement between Costamare Inc. and Konstantinos Zacharatos ⁽¹⁾

4.7		Form of Ship Management Agreement between Costamare Shipping Company S.A. and V.Ships Greece Ltd. ⁽¹⁾

4.8		Agreement Relating to Group Management Agreement and Ship-management Agreements between Costamare Shipping Company S.A. and Costamare Inc., dated January 22, 2013 ⁽¹⁾

4.9		Amended and Restated Management Agreement between Costamare Inc. and Costamare Shipping Company S.A., dated March 3, 2015

4.10		Framework Deed dated May 15, 2013 as amended and restated on May 18, 2015, between Sparrow Holdings, L.P., York Capital Management Global Advisors LLC, Costamare Inc. and Costamare Ventures Inc.

4.11		Framework Agreement dated November 2, 2015, by and between Costamare Inc. and Costamare Shipping Company S.A.

4.12		Services Agreement dated November 2, 2015, by and between the subsidiaries of Costamare Inc. set out in Schedule A thereto and Costamare Shipping Services Ltd.

4.13		Agreement Relating to Framework Agreement and Ship-management Agreements between Costamare Shipping Company S.A. and Costamare Inc., dated November 2, 2015

4.14		Amended and Restated Registration Rights Agreement dated as of November 27, 2015, between Costamare Inc. and the Stockholders named therein

4.15		Addendum dated February 29, 2016 to the Trademark License Agreement dated November 3, 2010, between Costamare Inc. and Costamare Shipping Company S.A.

8.1		List of Subsidiaries of Costamare Inc.

126


Exhibit No.		Description

12.1		Rule 13a-14(a)/15d-14(a) Certification of Costamare Inc.’s Chief Executive Officer

12.2		Rule 13a-14(a)/15d-14(a) Certification of Costamare Inc.’s Chief Financial Officer

13.1		Costamare Inc. Certification of Konstantinos Konstantakopoulos, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002

13.2		Costamare Inc. Certification of Gregory Zikos, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002

15.1		Consent of Independent Registered Public Accounting Firm

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase

⁽¹⁾

Previously filed as an exhibit to Costamare Inc.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed with the SEC on March 1, 2013 and hereby incorporated by reference to such Annual Report.

⁽²⁾

Previously filed as an exhibit to Costamare Inc.’s Registration Statement on Form F-1 (File No. 333-170033), declared effective by the SEC on November 3, 2010, and hereby incorporated by reference to such Registration Statement.

⁽³⁾

Previously filed as an exhibit to Costamare Inc.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on February 29, 2012 and hereby incorporated by reference to such Annual Report.

⁽⁴⁾

Previously filed as an exhibit to Costamare Inc.’s Report on Form 6-K for the month of May 2013, filed with the SEC on May 29, 2013 and hereby incorporated by reference to such Report.

⁽⁵⁾

Previously filed as an exhibit to Costamare Inc.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014 and hereby incorporated by reference to such Annual Report.

The registrant hereby agrees to furnish to the SEC upon request a copy of any instrument relating to long-term debt that does not exceed 10% of the total assets of the Company and its subsidiaries.

127

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.


		COSTAMARE INC.,

		By		/s/ Konstantinos Konstantakopoulos
				Name: Konstantinos Konstantakopoulos
				Title: Chief Executive Officer

Dated: April 27, 2016

128

COSTAMARE INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


	Page
Report of Independent Registered Public Accounting Firm		F-2
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting		F-3
Consolidated Balance Sheets as of December 31, 2014 and 2015		F-4
Consolidated Statements of Income for the years ended December 31, 2013, 2014 and 2015		F-5
Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2014 and 2015		F-6
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2013, 2014 and 2015		F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2014 and 2015		F-8
Notes to Consolidated Financial Statements		F-9

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of COSTAMARE INC.

We have audited the accompanying consolidated balance sheets of COSTAMARE INC. as of December 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of COSTAMARE INC. at December 31, 2015 and 2014, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), COSTAMARE INC.’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated April 27, 2016, expressed an unqualified opinion thereon.

/s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.
Athens, Greece
April 27, 2016

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Board of Directors and Stockholders of COSTAMARE INC.

We have audited COSTAMARE INC.’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). COSTAMARE INC.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

In our opinion, COSTAMARE INC. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of COSTAMARE INC. as of December 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2015, of COSTAMARE INC. and our report dated April 27, 2016, expressed an unqualified opinion thereon.

/s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.
Athens, Greece
April 27, 2016

F-3

COSTAMARE INC.
CONSOLIDATED BALANCE SHEETS


	As of December 31,
	2014				2015
	(Expressed in thousands of U.S. dollars)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	113,089			$	100,105
Restricted cash			14,264				14,007
Accounts receivable			2,365				1,111
Inventories (Note 5)			11,565				10,578
Due from related parties (Notes 3 and 9)			4,447				6,012
Fair value of derivatives (Notes 18 and 19)			—				352
Insurance claims receivable			1,759				3,906
Prepaid lease rentals (Note 11)			4,982				4,982
Accrued charter revenue (Note 12)			511				457
Prepayments and other			4,993				3,546

Total current assets			157,975				145,056

FIXED ASSETS, NET:
Capital leased assets (Note 11)			250,547				242,966
Vessels, net (Note 6)			2,098,820				2,004,650

Total fixed assets, net			2,349,367				2,247,616

NON-CURRENT ASSETS:
Investment in affiliates (Note 9)			73,579				117,931
Prepaid lease rentals, non-current (Note 11)			40,811				35,829
Accounts receivable, non-current, net (Note 3)			1,425				1,425
Deferred charges, net (Note 7)			28,675				28,815
Restricted cash			49,818				48,708
Accrued charter revenue, non-current (Note 12)			1,025				569
Other non-current assets (Note 4)			12,065				12,612

Total assets		$	2,714,740			$	2,638,561

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt (Note 10)		$	192,951			$	185,259
Accounts payable			6,296				4,047
Due to related parties (Note 3)			—				371
Capital lease obligations (Note 11)			13,508				14,534
Accrued liabilities			19,119				15,225
Unearned revenue (Note 12)			12,929				18,356
Fair value of derivatives (Notes 18 and 19)			43,287				32,462
Other current liabilities			2,286				1,712

Total current liabilities			290,376				271,966

NON-CURRENT LIABILITIES:
Long-term debt, net of current portion (Note 10)			1,326,990				1,137,832
Capital lease obligations, net of current portion (Note 11)			233,625				219,090
Fair value of derivatives, net of current portion (Notes 18 and 19)			31,653				19,655
Unearned revenue, net of current portion (Note 12)			29,454				26,508

Total non-current liabilities			1,621,722				1,403,085

COMMITMENTS AND CONTINGENCIES (Note 13)			—				—
STOCKHOLDERS’ EQUITY:
Preferred stock (Note 14)			—				—
Common stock (Note 14)			8				8
Additional paid-in capital (Note 14)			858,665				963,904
Retained earnings			103				44,247
Accumulated other comprehensive loss (Notes 18 and 20)			(56,134	)			(44,649	)

Total stockholders’ equity			802,642				963,510

Total liabilities and stockholders’ equity		$	2,714,740			$	2,638,561

The accompanying notes are an integral part of these consolidated financial statements.

F-4

COSTAMARE INC.
CONSOLIDATED STATEMENTS OF INCOME


	For the years ended December 31,
	2013				2014				2015
	(Expressed in thousands of U.S. dollars, except share and per share data)
REVENUES:
Voyage revenue		$	414,249			$	483,995			$	490,378
EXPENSES:
Voyage expenses			(3,484	)			(3,608	)			(2,831	)
Voyage expenses-related parties (Note 3)			(3,139	)			(3,629	)			(3,673	)
Vessels’ operating expenses			(115,998	)			(120,815	)			(117,193	)
General and administrative expenses			(7,517	)			(6,708	)			(6,275	)
General and administrative expenses–related parties (Note 3)			(1,000	)			(1,000	)			(11,123	)
Management fees-related parties (Note 3)			(16,580	)			(18,469	)			(18,877	)
Amortization of dry-docking and special survey costs (Note 7)			(8,084	)			(7,814	)			(7,425	)
Depreciation (Notes 6, 11 and 20)			(89,958	)			(105,787	)			(101,645	)
Amortization of prepaid lease rentals (Note 11)			—				(4,024	)			(4,982	)
Gain on sale / disposal of vessels, net (Note 6)			518				2,543				1,688
Foreign exchange (losses) / gains, net			8				7				(129	)

Operating income			169,015				214,691				217,913

OTHER INCOME / (EXPENSES):
Interest income			543				815				1,373
Interest and finance costs (Note 16)			(74,533	)			(95,562	)			(92,276	)
Swaps breakage costs (Note 18)			—				(10,192	)			—
Equity (loss) / gain on investments (Note 9)			692				(3,428	)			(529	)
Other, net			822				3,294				427
Gain on derivative instruments, net (Note 18)			6,548				5,469				16,856

Total other expenses			(65,928	)			(99,604	)			(74,149	)

Net Income		$	103,087			$	115,087			$	143,764

Earnings allocated to Preferred Stock (Note 15)			(1,536	)			(11,909	)			(17,903	)

Net income available to Common Stockholders			101,551				103,178				125,861

Earnings per common share, basic and diluted (Note 15)		$	1.36			$	1.38			$	1.68

Weighted average number of shares, basic and diluted			74,800,000				74,800,000				75,027,474

The accompanying notes are an integral part of these consolidated financial statements.

F-5

COSTAMARE INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	For the years ended December 31,
	2013				2014				2015
	(Expressed in thousands of U.S. dollars)
Net income for the year		$	103,087			$	115,087			$	143,764

Other comprehensive income / (loss)
Unrealized gain on cash flow hedges, net (Notes 18 and 20)			70,886				22,802				11,382
Net settlements on interest rate swaps qualifying for cash flow hedge (Notes 10 and 20)			(3,253	)			(489	)			—
Amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to Depreciation (Note 20)			55				103				103
Amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to Prepaid lease rentals (Note 11)			—				6,604				—

Other comprehensive income for the year		$	67,688			$	29,020			$	11,485

Total comprehensive income for the year		$	170,775			$	144,107			$	155,249

The accompanying notes are an integral part of these consolidated financial statements.

F-6

COSTAMARE INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the years ended December 31, 2013, 2014 and 2015


	Preferred Stock (Series D)					Preferred Stock (Series C)					Preferred Stock (Series B)					Common Stock					Additional Paid-in Capital				Accumulated Other Comprehensive Loss				Retained Earnings / (Accumulated Deficit)				Total
	# of shares		Par value			# of shares		Par value			# of shares		Par value			# of shares		Par value
	(Expressed in thousands of U.S. dollars, except share and per share data)
BALANCE, January 1, 2013		—		$	—		—		$	—		—		$	—		74,800,000		$	8		$	714,100			$	(152,842	)		$	(40,814	)		$	520,452
- Net income		—			—		—			—		—			—		—			—			—				—				103,087				103,087
- Preferred stock Series B issuance		—			—		—			—		2,000,000			—		—			—			48,425				—				—				48,425
- Preferred stock Series B expenses		—			—		—			—		—			—		—			—			(383	)			—				—				(383	)
- Dividends - Common stock		—			—		—			—		—			—		—			—			—				—				(80,784	)			(80,784	)
- Dividends - Preferred stock		—			—		—			—		—			—		—			—			—				—				(1,536	)			(1,536	)
- Other comprehensive income		—			—		—			—		—			—		—			—			—				67,688				—				67,688

BALANCE, December 31, 2013		—		$	—		—		$	—		2,000,000		$	—		74,800,000		$	8		$	762,142			$	(85,154	)		$	(20,047	)		$	656,949

- Net income		—			—		—			—		—			—		—			—			—				—				115,087				115,087
- Preferred stock Series C issuance		—			—		4,000,000			—		—			—		—			—			96,850				—				—				96,850
- Preferred stock Series C expenses		—			—		—			—		—			—		—			—			(327	)			—				—				(327	)
- Dividends - Common stock		—			—		—			—		—			—		—			—			—				—				(83,028	)			(83,028	)
- Dividends - Preferred stock		—			—		—			—		—			—		—			—			—				—				(11,909	)			(11,909	)
- Other comprehensive income		—			—		—			—		—			—		—			—			—				29,020				—				29,020

BALANCE, December 31, 2014		—		$	—		4,000,000		$	—		2,000,000		$	—		74,800,000		$	8		$	858,665			$	(56,134	)		$	103			$	802,642

- Net income		—			—		—			—		—			—		—			—			—				—				143,764				143,764
- Preferred stock Series D issuance		4,000,000			—		—			—		—			—		—			—			96,850				—				—				96,850
- Preferred stock Series D expenses		—			—		—			—		—			—		—			—			(234	)			—				—				(234	)
- Issuance of common stock (Note 3)		—			—		—			—		—			—		598,400			—			8,623				—				—				8,623
- Dividends - Common stock		—			—		—			—		—			—		—			—			—				—				(86,280	)			(86,280	)
- Dividends - Preferred stock		—			—		—			—		—			—		—			—			—				—				(13,340	)			(13,340	)
- Other comprehensive income		—			—		—			—		—			—		—			—			—				11,485				—				11,485

BALANCE, December 31, 2015		4,000,000		$	—		4,000,000		$	—		2,000,000		$	—		75, 398,400		$	8		$	963,904			$	(44,649	)		$	44,247			$	963,510

The accompanying notes are an integral part of these consolidated financial statements.

F-7

COSTAMARE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the years ended December 31,
	2013				2014				2015
	(Expressed in thousands of U.S. dollars)
Cash Flows From Operating Activities:
Net income:		$	103,087			$	115,087			$	143,764
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			89,958				105,787				101,645
Allowance for doubtful amounts			3,703				2,888				—
Amortization of debt discount			—				—				(798	)
Amortization of prepaid lease rentals			—				4,024				4,982
Amortization and write-off of financing costs			1,569				4,107				1,896
Amortization of deferred dry-docking and special survey			8,084				7,814				7,425
Equity based payments			—				—				8,623
Net settlements on interest rate swaps qualifying for cash flow hedge			(3,253	)			(489	)			—
Gain on derivative instruments, net			(6,548	)			(5,469	)			(16,856	)
Gain on sale / disposal of vessels, net			(518	)			(2,543	)			(1,688	)
Equity loss / (gain) on investments			(692	)			3,428				529
Changes in operating assets and liabilities:
Accounts receivable			(22,737	)			13,705				1,254
Due from related parties			(63	)			(1,768	)			(1,565	)
Inventories			(1,607	)			(560	)			987
Insurance claims receivable			25				(330	)			(2,147	)
Prepayments and other			(854	)			(2,543	)			1,447
Accounts payable			(68	)			482				(2,249	)
Due to related parties			—				—				371
Accrued liabilities			4,337				2,731				4,087
Unearned revenue			3,194				900				373
Other current liabilities			277				(854	)			(574	)
Dry-dockings			(6,189	)			(10,150	)			(9,461	)
Accrued charter revenue			14,976				7,023				2,618

Net Cash provided by Operating Activities			186,681				243,270				244,663

Cash Flows From Investing Activities:
Investment in affiliates			(8,707	)			(85,103	)			(44,881	)
Proceeds from the sale of subsidiary			16,044				—				—
Dividend from affiliate			—				31,828				—
Advances for vessel acquisitions			(590,431	)			(59,058	)			—
Vessels acquisitions / Additions to vessel cost			(51,853	)			(28,984	)			(2,758	)
Proceeds from the sale of vessels, net			13,891				22,054				4,655

Net Cash used in Investing Activities			(621,056	)			(119,263	)			(42,984	)

Cash Flows From Financing Activities:
Capital lease proceeds			—				256,716				—
Capital lease repayment			—				(9,583	)			(13,509	)
Offering proceeds, net of related expenses			48,042				96,523				96,616
Proceeds from long-term debt			469,356				9,000				—
Repayment of long-term debt			(163,669	)			(356,635	)			(196,850	)
Payment of financing costs			(210	)			(2,055	)			—
Dividends paid			(81,515	)			(93,074	)			(102,287	)
(Increase) / Decrease in restricted cash			(11,571	)			(5,189	)			1,367

Net Cash provided by / (used in) Financing Activities			260,433				(104,297	)			(214,663	)

Net increase / (decrease) in cash and cash equivalents			(173,942	)			19,710				(12,984	)
Cash and cash equivalents at beginning of the year			267,321				93,379				113,089

Cash and cash equivalents at end of the year		$	93,379			$	113,089			$	100,105

Supplemental Cash Information:
Cash paid during the year for interest		$	31,215			$	46,043			$	45,213

The accompanying notes are an integral part of these consolidated financial statements.

F-8

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

1. Basis of Presentation and General Information:

The accompanying consolidated financial statements include the accounts of Costamare Inc. (“Costamare”) and its wholly-owned subsidiaries (collectively, the “Company”). Costamare was formed on April 21, 2008, under the laws of the Republic of the Marshall Islands.

Costamare was incorporated as part of a reorganization to acquire the ownership interest in 53 ship-owning companies owned by the Konstantakopoulos family (Vasileios Konstantakopoulos and his three sons Messrs. Konstantinos Konstantakopoulos, Achillefs Konstantakopoulos and Christos Konstantakopoulos, together the “Family”). The reorganization was completed in November 2008. On November 4, 2010, Costamare completed its initial public offering (“Initial Public Offering”) in the United States under the United States Securities Act of 1933, as amended (the “Securities Act”). On March 27, 2012 and on October 19, 2012, the Company completed two follow-on public offerings in the United States under the Securities Act and issued 7,500,000 shares and 7,000,000 shares, respectively, par value $0.0001, at a public offering price of $14.10 per share and $14.00 per share, respectively, increasing the issued share capital to 74,800,000 shares. On March 31, 2015, June 30, 2015, September 30, 2015 and December 31, 2015, the Company issued 598,400 shares, in aggregate, to Costamare Shipping Company S.A. and Costamare Shipping Services Ltd. (Note 3) in accordance with (i) the Group Management Agreement until November 2, 2015, and (ii) the Services Agreement (Note 3) from November 2, 2015, increasing the issued share capital to 75,398,400 shares. At December 31, 2015, members of the Family owned, directly or indirectly, approximately 65.0% of the outstanding common shares, in the aggregate. Furthermore, on (i) August 7, 2013, the Company completed a public offering of 2,000,000 shares of its 7.625% Series B Cumulative Redeemable Perpetual Preferred Stock (the “Series B Preferred Stock”), par value $0.0001, at a public offering price of $25.00 per share, (ii) on January 21, 2014, the Company completed a public offering of 4,000,000 shares of its 8.50% Series C Cumulative Redeemable Perpetual Preferred Stock (the “Series C Preferred Stock”), par value $0.0001, at a public offering price of $25.00 per share and, (iii) on May 13, 2015, the Company completed a public offering of 4,000,000 shares of its 8.75% Series D Cumulative Redeemable Perpetual Preferred Stock (the “Series D Preferred Stock”), par value $0.0001, at a public offering price of $25.00 per share.

As of December 31, 2014 and 2015, the Company owned and/or operated a fleet of 55 and 54 container vessels, respectively, with a total carrying capacity of approximately 320,407 twenty-foot equivalent units (“TEU”) and 317,774 TEU, respectively, through wholly-owned subsidiaries incorporated in the Republic of Liberia. The Company provides worldwide marine transportation services by chartering its container vessels to some of the world’s leading liner operators under long, medium and short-term time charters.

At December 31, 2015, Costamare had 92 wholly-owned subsidiaries, all incorporated in the Republic of Liberia, except for five incorporated in the Republic of the Marshall Islands.

2. Significant Accounting Policies and Recent Accounting Pronouncements:

(a) Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements include the accounts of Costamare and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

Costamare as the holding company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity. Under Accounting Standards Codification (“ASC”) 810 “Consolidation,” (formerly Accounting Research Bulletin (“ARB”) No. 51) a voting interest entity is an entity in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right

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COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

to make financial and operating decisions. Costamare consolidates voting interest entities in which it owns all, or at least a majority (generally, greater than 50%), of the voting interest. Variable interest entities (“VIE”) are entities as defined under ASC 810-10, that in general either do not have equity investors with voting rights or that have equity investors that do not provide sufficient financial resources for the entity to support its activities. A controlling financial interest in a VIE is present when a company absorbs a majority of an entity’s expected losses, receives a majority of an entity’s expected residual returns, or both. The company with a controlling financial interest, known as the primary beneficiary, is required to consolidate the VIE. The Company evaluates all arrangements that may include a variable interest in an entity to determine if it may be the primary beneficiary, and would be required to include assets, liabilities and operations of a VIE in its consolidated financial statements. As of December 31, 2014 and 2015 no such interest existed.

(b) Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(c) Comprehensive Income / (Loss): In the statement of comprehensive income, the Company presents the change in equity (net assets) during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by shareholders and distributions to shareholders. The Company follows the provisions of ASC 220 “Comprehensive Income”, and presents items of net income, items of other comprehensive income (“OCI”) and total comprehensive income in two separate but consecutive statements. Reclassification adjustments between OCI and net income are required to be presented separately on the statement of comprehensive income.

(d) Foreign Currency Translation: The functional currency of the Company is the U.S. dollar because the Company’s vessels operate in international shipping markets and, therefore, primarily transact business in U.S. dollars. The Company’s books of accounts are maintained in U.S. dollars. Transactions involving other currencies during the year are converted into U.S. dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated into U.S. dollars at the year-end exchange rates. Resulting gains or losses are reflected separately in the accompanying consolidated statements of income.

(e) Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents. Cash also includes other kinds of accounts that have the general characteristics of demand deposits in that the customer may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty.

(f) Restricted Cash: Restricted cash is additional minimum cash deposits required to be maintained with certain banks under the Company’s borrowing arrangements. Restricted cash includes bank deposits and deposits in so-called “retention accounts” that are required under the Company’s borrowing arrangements which are used to fund the loan installments coming due. The funds can only be used for the purposes of loan repayment.

(g) Accounts Receivable, net: The amount shown as receivables, at each balance sheet date, mainly includes receivables from charterers for hire, net of any provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. The provision established for doubtful accounts as of December 31, 2014 and 2015, is $0.

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COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

(h) Inventories: Inventories consist of bunkers, lubricants and spare parts which are stated at the lower of cost or market on a consistent basis. Cost incurred to bring inventories to their present location and condition is determined by the first in, first out method.

(i) Insurance Claims Receivable: The Company records insurance claim recoveries for insured losses incurred on damage to fixed assets and for insured crew medical expenses. Insurance claim recoveries are recorded, net of any deductible amounts, at the time the Company’s fixed assets suffer insured damages or when crew medical expenses are incurred, recovery is probable under the related insurance policies and the claim is not subject to litigation.

(j) Vessels, Net: Vessels are stated at cost, which consists of the contract price and any material expenses incurred upon acquisition (initial repairs, improvements and delivery expenses, interest and on-site supervision costs incurred during the construction periods). Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise these amounts are charged to expense as incurred.

The cost of each of the Company’s vessels is depreciated from the date of acquisition on a straight-line basis over the vessel’s remaining estimated economic useful life, after considering the estimated residual value which is equal to the product of vessels’ lightweight tonnage and estimated scrap rate, which up until December 31, 2014, was estimated to be approximately $0.250 per lightweight ton. In order to align the scrap rate estimates with the current historical average scrap rate, effective from January 1, 2015, the Company adjusted the estimated scrap rate used to calculate the vessels’ salvage value from $0.250 to $0.300 per lightweight ton. The impact of the increase in the estimated scrap rate is a decrease in depreciation expense prospectively. The effect of this change in accounting estimate, which did not require retrospective adoption as per ASC 250 “Accounting Changes and Error Corrections,” was to decrease depreciation expense by $5,388 and increase net income by $5,388 or $0.07 per common share, basic and diluted, for the year ended December 31, 2015.

Management estimates the useful life of the Company’s vessels to be 30 years from the date of initial delivery from the shipyard. Secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful life. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the date such regulations are adopted.

(k) Accrued Charter Revenue/Unearned Revenue: The Company records identified assets or liabilities associated with the acquisition of a vessel at fair value, determined by reference to market data. The Company values any asset or liability arising from the market value of the time charters assumed when a vessel is acquired from entities that are not under common control. This policy does not apply when a vessel is acquired from entities that are under common control. The amount to be recorded as an asset or liability at the date of vessel delivery is based on the difference between the current fair market value of the charter and the net present value of future contractual cash flows. When the present value of the contractual cash flows of the time charter assumed is greater than its current fair value, the difference is recorded as accrued charter revenue. When the opposite situation occurs, any difference, capped to the vessel’s fair value on a charter free basis, is recorded as unearned revenue. Such assets and liabilities, respectively, are amortized as a reduction of, or an increase in, revenue over the period of the time charter assumed.

(l) Impairment of Long-Lived Assets: The Company uses ASC 360 “Property plant and equipment”, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The standard requires that long-lived assets and certain identifiable intangibles held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

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COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

As of December 31, 2014 and 2015, the Company concluded that, as conditions in the worldwide shipping industry remain depressed, indicators existed which triggered the existence of potential impairment of its long-lived assets. As a result, the Company performed an impairment assessment of the Company’s long-lived assets by comparing the undiscounted projected net operating cash flows for each vessel to its respective carrying value. The Company’s strategy is mainly to charter its vessels under long-term, fixed or variable rate time charters, providing the Company with contracted future cash flows.

In developing estimates of future undiscounted cash flows, the Company makes assumptions and estimates about the vessels’ future performance, with the significant assumptions being related to time charter rates, vessels’ operating expenses, vessels’ capital expenditures, vessels’ residual value, fleet utilization and the estimated remaining useful life of each vessel. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends as well as future expectations.

The Company determines undiscounted projected net operating cash flows for each vessel and compares it to the vessel’s carrying value. To the extent impairment indicators are present, the undiscounted projected net operating cash flows are determined by considering the charter revenues from existing time charters for the fixed fleet days and an estimated daily time charter rate for the unfixed days (based on the most recent ten year historical average rates) over the remaining estimated life of the vessel assumed to be 30 years from the delivery of the vessel from the shipyard, expected outflows for vessels’ operating expenses assuming an expected increase in expenses based on the Company’s historical data and an average inflation rate of 2.76% (in line with the average world Consumer Price Index forecasted), planned dry-docking and special survey expenditures, management fees expenditures and fleet utilization of 99.2% (excluding the scheduled off-hire days for planned dry-dockings and special surveys which are determined separately ranging from 16 to 30 days depending on the size and age of each vessel) based on historical experience. The Company considers the most recent ten year historical average rates to be a reasonable estimation of expected future charter rates over the remaining useful life of the Company’s vessels since such historical average represents a full shipping cycle that captures the highs and lows of the market. The Company utilizes the standard deviation in order to eliminate the outliers in the period before computing the historic ten year average rates. The salvage value used in the impairment test is estimated at approximately $0.300 per light weight ton in accordance with the vessels’ depreciation policy.

The Company’s assessment concluded that no impairment of vessels existed as of December 31, 2013, 2014 and 2015, as the undiscounted projected net operating cash flows per vessel exceeded the carrying value of each vessel. No impairment loss was recorded in 2013, 2014 or 2015.

(m) Accounting for Special Survey and Dry-docking Costs: The Company follows the deferral method of accounting for special survey and dry-docking costs whereby actual costs incurred are deferred and are amortized on a straight-line basis over the period through the date the next survey is scheduled to become due. Costs deferred are limited to actual costs incurred at the yard and parts used in the dry-docking or special survey. If a survey is performed prior to the scheduled date, the remaining unamortized balances are immediately written off. Unamortized balances of vessels that are sold are written-off and included in the calculation of the resulting gain or loss in the period of the vessel’s sale. Furthermore, unamortized dry-docking and special survey balances of vessels that are classified as Assets held for sale and are not recoverable as of the date of such classification are immediately written-off to the consolidated statement of income.

(n) Financing Costs: Costs associated with new loans or refinancing of existing loans, including fees paid to lenders or required to be paid to third parties on the lender’s behalf for obtaining new loans or refinancing existing loans, are recorded as deferred charges. Such fees are deferred and amortized to interest and finance costs during the life of the related debt using the effective interest

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COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

method. Unamortized fees relating to loans repaid or refinanced, meeting the criteria of debt extinguishment, are expensed in the period the repayment or refinancing is made.

(o) Concentration of Credit Risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents, accounts receivable (included in current and non-current assets), investments in affiliates, equity securities, debt securities and derivative contracts (interest rate swaps and foreign currency contracts). The Company places its cash and cash equivalents, consisting mostly of deposits, with high credit rated financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company is exposed to credit risk in the event of non-performance by counterparties to derivative instruments; however, the Company limits its exposure by diversifying among counterparties with high credit ratings. The Company limits its credit risk with accounts receivable, investments in affiliates and equity and debt securities by performing ongoing credit evaluations of its customers’, affiliates’ and investees’ financial condition and generally does not require collateral for its accounts receivable.

(p) Voyage Revenues: Voyage revenues are generated from time charter agreements and are usually paid 15 days in advance. Time charter agreements with the same charterer are accounted for as separate agreements according to the terms and conditions of each agreement. Time charter revenues over the term of the charter are recorded as service is provided, when they become fixed and determinable.

Revenues from time charter agreements providing for varying annual rates are accounted for as operating leases and thus recognized on a straight-line basis as the average revenue over the rental periods of such agreements, as service is performed. A voyage is deemed to commence upon the completion of discharge of the vessel’s previous cargo and the sea passage for the next fixed cargo and is deemed to end upon the completion of discharge of the current cargo, provided an agreed non-cancelable charter agreement between the Company and the charterer is in existence, the charter rate is fixed or determinable and collectability is reasonably assured. Unearned revenue includes cash received prior to the balance sheet date for which all criteria to recognize as revenue have not been met, including any unearned revenue resulting from charter agreements providing for varying annual rates, which are accounted for on a straight-line basis. Unearned revenue also includes the unamortized balance of the liability associated with the acquisition of second-hand vessels with time charters attached which were acquired at values below fair market value at the date the acquisition agreement is consummated.

Revenues for 2013, 2014 and 2015, derived from significant charterers individually accounting for 10% or more of revenues (in percentages of total revenues) were as follows:


	2013		2014		2015
A		24%		29%		31%
B		31%		26%		26%
C		16%		14%		13%
D		13%		18%		18%

Total		84%		87%		88%

(q) Voyage Expenses: Voyage expenses primarily consist of port, canal and bunker expenses that are unique to a particular charter and are paid for by the charterer under time charter arrangements or by the Company under voyage charter arrangements and commissions and fees, which are always paid for by the Company, regardless of the charter type. All voyage and vessel operating expenses are expensed as incurred, except for commissions. Commissions are deferred over the related voyage charter period to the extent revenue has been deferred since commissions are earned as the Company’s revenues are earned.

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COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

(r) Repairs and Maintenance: All repair and maintenance expenses, including underwater inspection expenses, are expensed in the year incurred. Such costs are included in vessel operating expenses in the accompanying consolidated statements of income.

(s) Derivative Financial Instruments: The Company enters into interest rate swap contracts to manage its exposure to fluctuations of interest rate risks associated with specific borrowings. Interest rate differentials paid or received under these swap agreements are recognized as part of the interest expense related to the hedged debt. All derivatives are recognized in the consolidated financial statements at their fair value. On the inception date of the derivative contract, the Company designates the derivative as a hedge of a forecasted transaction or the variability of cash flow to be paid (“cash flow” hedge). Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in the consolidated statement of comprehensive income until earnings are affected by the forecasted transaction or the variability of cash flow and are then reported in earnings. Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in earnings in the period in which those fair value changes have occurred. Realized gains or losses on early termination of the derivative instruments are also classified in earnings in the period of termination of the respective derivative instrument. The Company may re-designate an undesignated hedge after its inception as a hedge but then will consider its non-zero value at re-designation in its assessment of effectiveness of the cash flow hedge.

The Company formally documents all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions.

This process includes linking all derivatives that are designated as cash flow hedges to specific forecasted transactions or variability of cash flow.

The Company also formally assesses, both at the hedge’s inception and, on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flow of hedged items. The Company considers a hedge to be highly effective if the change in fair value of the derivative hedging instrument is within 80% to 125% of the opposite change in the fair value of the hedged item attributable to the hedged risk. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively, in accordance with ASC 815 “Derivatives and Hedging”.

The Company also enters into forward exchange rate contracts to manage its exposure to currency exchange risk on certain foreign currency liabilities. The Company has not designated these forward exchange rate contracts for hedge accounting.

(t) Earnings per Share: Basic earnings per share are computed by dividing net income attributable to common equity holders by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised. The Company had no dilutive securities outstanding during the three-year period ended December 31, 2015. Earnings per share attributable to common equity holders are adjusted by the contractual amount of dividends related to the preferred stock holders that accrue for the period.

(u) Fair Value Measurements: The Company adopted, as of January 1, 2008, ASC 820 “Fair Value Measurements and Disclosures”, which defines and provides guidance as to the measurement of fair value. This standard creates a hierarchy of measurement and indicates that, when possible, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets and the lowest priority (Level 3) to unobservable data,

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COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

for example, the reporting entity’s own data. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy. The standard applies when assets or liabilities in the financial statements are to be measured at fair value, but does not require additional use of fair value beyond the requirements in other accounting principles (Notes 18 and 19).

ASC 825 “Financial Instruments”, permits companies to report certain financial assets and financial liabilities at fair value. ASC 825 was effective for the Company as of January 1, 2008, at which time the Company could elect to apply the standard prospectively and measure certain financial instruments at fair value. The Company has evaluated the guidance contained in ASC 825, and has elected not to report any existing financial assets or liabilities at fair value that are not already so reported; therefore, the adoption of the statement had no impact on its financial position and results of operations. The Company retains the ability to elect the fair value option for certain future assets and liabilities acquired under this standard.

(v) Segment Reporting: The Company reports financial information and evaluates its operations by charter revenues and not by the length of ship employment for its customers, i.e., spot or time charters. The Company does not use discrete financial information to evaluate the operating results for each such type of charter. Although revenue can be identified for these types of charters, management cannot and does not identify expenses, profitability or other financial information for these charters. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide (subject to certain agreed exclusions) and, as a result, the disclosure of geographic information is impracticable. As a result, management, including the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet and thus the Company has determined that it operates under one reportable segment.

(w) Investments in Affiliates: Investments in the common stock of entities, in which the Company has significant influence over operating and financial policies, are accounted for using the equity method. Under this method, the investment in the affiliate is initially recorded at cost and is adjusted to recognize the Company’s share of the earnings or losses of the investee after the acquisition date and is adjusted for impairment whenever facts and circumstances indicate that a decline in fair value below the cost basis is other than temporary. The amount of the adjustment is included in the determination of net income / (loss). Dividends received from an affiliate reduce the carrying amount of the investment. When the Company’s share of losses in an affiliate equals or exceeds its interest in the affiliate, the Company does not recognize further losses unless the Company has incurred obligations or made payments on behalf of the affiliate.

(x) Capital leases: Financial Accounting Standards Board (“FASB”) ASC 840 classifies leases as capital or operating. Capital leases are accounted for as the acquisition of an asset and the incurrence of an obligation by the lessee and as a sale or financing by the lessor. All other leases are accounted for as operating leases. The determination of whether an arrangement is (or contains) a capital lease is based on the substance of the arrangement at the inception date and is assessed in accordance with the criteria set in ASC 840-10-25-1.

Capital leases are capitalized at the commencement of the lease at the lower between the fair value of the leased asset and the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability. Finance charges are recognized in finance costs in the consolidated statement of income. The lease payments are allocated between liability and finance costs to achieve a constant rate on the capital balance outstanding. If the lease agreement transfers the ownership of the leased asset to the lessee, then the asset is depreciated over its useful economic life (estimated at 30 years), otherwise it is depreciated over the lease term.

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COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

For sale and lease back transactions, when the fair value of the asset sold is more than its carrying amount, any indicated loss on the sale is in substance a prepayment of rent and thus, in accordance with ASC 840-40-35-4, the Company defers this prepaid rental and amortizes it over the lease term. In case the fair value of the asset sold is less than its carrying amount, any indicated loss on the sale is recognized in the consolidated statement of income as incurred.

Operating lease payments are recognized as an operating expense in the consolidated statement of income on a straight-line basis over the lease term.

(y) Investments in Equity and Debt Securities: The Company classifies debt securities and equity securities pursuant to the provisions of ASC 320-10-25-1 “Investments–Debt and Equity Securities”, into one of the following three categories:

a. Trading securities: If the Company acquires a security with the intent of selling it in the near term, the security is classified as trading,

b. Available-for-sale securities: Investments in debt securities and equity securities that have readily determinable fair values not classified as trading securities or as held-to-maturity securities are classified as available-for-sale securities and,

c. Held-to-maturity securities: Investments in debt securities are classified as held-to-maturity only if the Company has the positive intent and ability to hold these securities to maturity.

In order to determine the applicable category, the Company considers the following: (i) if the Company intends to sell the security, (ii) whether it is more likely than not that the Company will be required to sell the security before the recovery of its (entire) cost, and (iii) whether the security has a readily determinable fair value or not.

Debt and equity securities which are decided on inception to be accounted for as trading securities or available-for-sale securities are initially recognized at cost and subsequently are measured at fair value. Declines in the fair value of trading securities are recognized in earnings, while declines in the fair value of available-for-sale securities are recorded in Other Comprehensive Income and affect earnings when the securities are disposed. Held-to-maturity debt securities are initially recognized at cost and subsequently are measured at amortized cost, less impairment. The amortized cost is adjusted for amortization of premiums and accretion of discounts to maturity. Management evaluates debt securities held-to-maturity for other than temporary impairment at each reporting date. In evaluating whether a decline in value is other than temporary, the Company considers several factors including, but not limited, to the following: (i) the extent of the duration of the decline; (ii) the reasons for the decline in value and (iii) the financial condition of and near-term prospects of the issuer. An investment in debt or equity securities is considered impaired if the fair value of the investment is less than its carrying value, in which case, the Company recognizes in earnings an impairment loss equal to the difference between their carrying value and their fair value.

Equity securities with no readily determinable fair value, which relate to an entity in which the Company does not have the ability to exercise significant influence, are accounted for pursuant to the provisions of ASC 325-20 “Investments - Other–Cost Method Investments”. The Company initially recognizes such equity securities at cost. Subsequently, any dividends distributed by the investee to the Company are recognized as income when received, but only to the extent they represent net accumulated earnings of the investee since the Company’s initial recognition of the investment. Net accumulated earnings are recognized as income by the Company only if they are distributed to the investor as dividends. Any dividends received in excess of net accumulated earnings are recognized as a reduction in the carrying amount of the investment. Management evaluates the equity securities for other-than-temporary-impairment at each reporting date. An investment in cost method equity securities is considered impaired if the fair value of the investment is less than its carrying value, in which case the Company recognizes in earnings an impairment loss equal to the difference between their carrying value and their fair value. Consideration is given to

F-16

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

significant deterioration in the earnings performance, or business prospects of the investee, significant adverse change in the regulatory, economic, or technological environment of the investee, significant adverse change in the general market condition in which the investee operates, as well as factors that raise significant concerns about the investee’s ability to continue as a going concern.

(z) Stock Based Compensation: The Company accounts for stock based payment awards granted to Costamare Shipping Company S.A. and Costamare Shipping Services Ltd. (Note 3 and 14a), for the services provided by these entities, following the guidance in ASC 505-50 “Equity Based Payments to Non-Employees”. The fair value of the stock based payment awards is recognized in the line item General and administrative expenses - related parties in the consolidated statements of income.

New accounting pronouncements

Debt issuance costs : In April 2015, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03–Interest–Imputation of Interest to simplify the presentation of debt issuance costs. Current guidance generally requires entities to capitalize costs paid to third parties that are directly related to issuing debt and that otherwise wouldn’t be incurred and present those amounts separately as deferred charges (i.e., assets). However, the discount or premium resulting from the difference between the net proceeds received upon debt issuance and the amount payable at maturity is presented as a direct deduction from or an addition to the face amount of the debt. The new guidance simplifies financial reporting by eliminating the different presentation requirements for debt issuance costs and debt discounts or premiums.

The guidance is effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Upon adoption, an entity must apply the new guidance retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company is planning to apply ASU No. 2015-03 as of January 1, 2016.

Inventories: In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory to simplify the measurement of inventory using first-in, first out (FIFO) or average cost method. According to this ASU an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling price less reasonably predictable costs of completion, disposal and transportation. This update is effective for public entities with reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company believes that the implementation of this update will not have any material impact on its financial statements and has not elected the early adoption.

Consolidation : In February 2015, the FASB issued ASU No. 2015-02 Consolidation (Topic 810), Amendments to the Consolidation Analysis. The guidance eliminates the deferral of FAS 167, which has allowed entities with interests in certain investment funds to follow the previous consolidation guidance in FIN 46(R), and makes other changes to both the variable interest model and the voting model. While the guidance is aimed at asset managers, it will affect all reporting entities that have variable interests in other legal entities (e.g., limited partnerships, similar entities and certain corporations). In some cases, consolidation conclusions will change. In other cases, reporting entities will need to provide additional disclosures about entities that currently aren’t considered variable interest entities (“VIEs”) but will be considered VIEs under the new guidance provided they have a variable interest in those VIEs. The guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. A reporting entity must apply the amendments using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of

F-17

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

the beginning of the period of adoption or apply the amendments retrospectively. The Company is currently evaluating the impact, if any, of the adoption of this new standard.

Revenue from Contracts with Customers: On August 12, 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers”, which amends ASU No. 2014-09 (issued by the FASB on May 28, 2014 and which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This standard is effective for public entities with reporting periods beginning after December 15, 2017. Early application is permitted only as of annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. The Company is currently evaluating the impact, if any, of the adoption of this new standard.

Leases: In February 2016, the FASB issued ASU No. 2016-02 “Leases”, which improves transparency and comparability among companies by requiring lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. The new lease standard does not substantially change lessor accounting. It also requires additional disclosures about leasing arrangements. For public companies, the new standard is effective for interim and annual periods beginning after December 15, 2018 and requires a modified retrospective approach to adoption. Early adoption is permitted. The Company has not yet determined what impact, if any, the adoption of the new standard will have on its consolidated financial position, results of operations or cash flows.

Going Concern: In August 2014, the FASB issued ASU No. 2014-15–“Presentation of Financial Statements - Going Concern”. ASU 2014-15 provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 requires an entity’s management to evaluate at each reporting period based on the relevant conditions and events that are known at the date the financial statements are issued, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and to disclose the necessary information. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.

3. Transactions with Related Parties:

(a) Costamare Shipping Company S.A. (the “Manager” or “Costamare Shipping”) and Costamare Shipping Services Ltd. ( “Costamare Services”): Costamare Shipping is a ship management company wholly-owned by Mr. Konstantinos Konstantakopoulos, the Company’s Chief Executive Officer and, as such, is not part of the consolidated group of the Company, but is a related party. Costamare Shipping provides the Company with general administrative services and certain commercial and technical services.

Costamare Shipping, itself or through Shanghai Costamare Ship Management Co., Ltd. (“Shanghai Costamare”), which is also controlled by Mr. Konstantakopoulos, or through or together with third party sub-managers, provides technical, crewing, commercial, provisioning, bunkering, sale and purchase, chartering, accounting, insurance and administrative services in exchange for a daily fee for each containership.

On March 3, 2015, the Company entered into an amended and restated management agreement with Costamare Shipping (the “Group Management Agreement”) which, among other things, extended the term of the agreement such that it automatically renewed for 10 consecutive one-year periods until December 31, 2025 (rather than five consecutive periods until December 31, 2020), removed the annual 4% increase of the fee payable in respect of each containership managed by

F-18

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

Costamare Shipping and in respect of the flat fee for the supervision of each newbuild ordered by the Company and, beginning in the first quarter of 2015, provided for an annual fee to Costamare Shipping of $2,500 and 598,400 shares (which is equal to 0.8% of the issued and outstanding Company common stock as of January 1, 2015) payable quarterly in arrears. No separate payment is made for the services of the Company’s executive officers (prior to 2015, the Company paid Costamare Shipping $1,000 annually for such services). The Group management Agreement has been terminated on November 2, 2015.

On November 2, 2015, the Company entered into a Framework Agreement with Costamare Shipping (the “Framework Agreement”) and its vessel-owning subsidiaries entered into a Services Agreement with Costamare Services (the “Services Agreement”), a company controlled by the Company’s Chairman and Chief Executive Officer and members of his family. On November 27, 2015, the Company amended and restated the Registration Rights Agreement entered into in connection with the Company’s initial public offering, to extend registration rights to Costamare Shipping and Costamare Services each of which have received or may receive shares of our common stock as fee compensation under the Group Management Agreement (until November 2, 2015) or the Services Agreement.

Under the Group Management Agreement until November 2, 2015 and the Framework Agreement and the Services Agreement from November 2, 2015, Costamare Shipping and Costamare Services received (i) for each containership which is not subject to a bareboat charter a daily fee of $0.956 since January 1, 2015 ($0.919 for 2014) and for each containership subject to a bareboat charter a daily fee of $0.478 since January 1, 2015 ($0.460 for 2014), in each case prorated for the calendar days the Company owned each containership and for the three-month period following the date of the sale of a vessel, (ii) a flat fee of $787.4 for the supervision of the construction of any newbuild vessel contracted by the Company, (iii) a fee of 0.75% on all gross freight, demurrage, charter hire, ballast bonus or other income earned with respect to each containership in the Company’s fleet and, (iv) an annual fee of $2,500 and 598,400 shares as noted above. Fees under (i) and (ii) may be annually adjusted upwards to reflect any strengthening of the Euro against the U.S. dollar and/or material unforeseen cost increases.

After the initial term of the Framework Agreement and the Services Agreement, which expired on December 31, 2015, the Company is able to terminate both agreements, subject to a termination fee, by providing written notice to Costamare Shipping or Costamare Services, as applicable, at least 12 months before the end of the subsequent one-year term. The termination fee is equal to (a) the number of full years remaining prior to December 31, 2025, times (b) the aggregate fees due and payable to Costamare Shipping or Costamare Services, as applicable, during the 12-month period ending on the date of termination (without taking into account any reduction in fees under the Framework Agreement to reflect that certain obligations have been delegated to a sub-manager or a sub-provider, as applicable); provided that the termination fee will always be at least two times the aggregate fees over the 12-month period described above.

On January 7, 2013, Costamare Shipping entered into a co-operation agreement (the “Co-operation Agreement”) with third-party ship managers V.Ships Greece Ltd. (“V.Ships Greece”), pursuant to which the two companies established a ship management cell (the “Cell”) under V.Ships Greece. Since April 2013, the Cell provides technical, crewing, provisioning, bunkering, sale and purchase and accounting services, as well as certain commercial and insurance services to certain of the Company’s container vessels, pursuant to separate management agreements entered into between V.Ships Greece and the ship-owning company of the respective container vessel, for a daily management fee.

The Cell also offers ship management services to third-party owners. Costamare Shipping passes to the Company the net profit, if any, it receives pursuant to the Co-operation Agreement as a refund or reduction of the management fees payable by the Company to Costamare Shipping under

F-19

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

the Group Management Agreement until November 2, 2015 and the Framework Agreement from November 2, 2015 onwards. The net profits earned during the year ended December 31, 2014 and 2015, amounted to $392 and $718, respectively, and are included as a reduction in management fees–related parties in the accompanying consolidated statements of income. As at December 31, 2015, the Cell provided technical, crewing, provisioning, bunkering, sale and purchase and accounting services, as well as certain commercial management services to 19 of Costamare’s vessels.

Management fees charged by Costamare Shipping in the years ended December 31, 2013, 2014 and 2015, amounted to $15,570, $18,642 and $19,411, respectively and are included in Management fees-related parties in the accompanying consolidated statements of income. In addition, Costamare Shipping and Costamare Services as from November 2, 2015, charged (i) $3,673 for the year ended December 31, 2015 ($3,629 for the year ended December 30, 2014 and $3,139 for the year ended December 30, 2013), representing a fee of 0.75% on all gross revenues, as provided in the Group Management Agreement and from November 2, 2015, the Framework Agreement and the Services Agreement, as applicable, which is separately reflected as Voyage expenses-related parties in the accompanying consolidated statement of income for the year ended December 31, 2015, (ii) $2,500, which is included in General and administrative expenses–related parties in the accompanying consolidated statement of income for the year ended December 31, 2015 ($1,000 for the year ended December 31, 2014 and $1,000 for the year ended December 31, 2013) and (iii) $8,623 representing the fair value of 598,400 shares, which is included in General and administrative expenses - related parties in the accompanying consolidated statement of income for the year ended December 31, 2015. During 2014, the Manager charged $1,050 supervision fees for three newbuild vessels, which were included in Advances for vessels acquisition. Furthermore, in accordance with the management agreement with V.Ships Greece, V.Ships Greece has been provided with the amount of $1,425 ($75 per vessel) as working capital security, which is included in Accounts receivable, non-current, in the accompanying 2014 and 2015 consolidated balance sheets.

During the years ended December 31, 2013, 2014 and 2015, the Manager charged in aggregate to the companies established pursuant to the Framework Agreement (Notes 8 and 9) the amount of $1,070, $1,572 and $1,856, respectively for services provided in accordance with the respective management agreements.

The balance due from the Manager at December 31, 2014 and 2015, amounted to $576 and $3,728, respectively, and is included in Due from related parties in the accompanying consolidated balance sheets. The balance due to Costamare Services at December 31, 2015, amounted to $371 and is reflected as Due to related parties in the accompanying 2015 consolidated balance sheet.

(b) Ciel Shipmanagement S.A.: CIEL, a company incorporated in the Republic of Liberia, is wholly-owned by Mr. Konstantinos Konstantakopoulos, the Company’s Chairman and Chief Executive Officer. CIEL is not part of the consolidated group of the Company. CIEL provided the Company’s vessels, through to April 2013, certain ship management services such as technical support and maintenance, financial and accounting services. From April 2013 until November 2, 2015, CIEL provided services in respect of the Rena . Management fees charged by CIEL in the years ended December 31, 2013, 2014 and 2015, amounted to $1,010, $219 and $184, respectively and are included in Management fees-related parties in the accompanying consolidated statements of income. The balance due from CIEL at December 31, 2014 and 2015 amounted to $593 and $606, respectively and is included in Due from related parties in the accompanying consolidated balance sheets.

(c) Shanghai Costamare Ship Management Co. Ltd.: Shanghai Costamare is owned (indirectly) 70% by the Company’s Chairman and Chief Executive Officer and 30% (indirectly) by Shanghai Costamare’s General Manager, Mr. Shen Xiao Dong. Shanghai Costamare is a company incorporated in the Peoples’ Republic of China and is not part of the consolidated group of the Company but is an affiliated manager. The technical, crewing, provisioning, bunkering, sale and

F-20

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

purchase and accounting services, as well as certain commercial services of certain of the Company’s vessels have been subcontracted from the Manager to Shanghai Costamare. As of December 31, 2015, Shanghai Costamare provided such services to thirteen (eleven as of December 31, 2014) of the Company’s containerships. There was no balance due from/to Shanghai Costamare at both December 31, 2014 and 2015.

4. Other non-current assets:

As of July 16, 2014, Zim Integrated Services (“Zim”) and its creditors including vessel and container lenders, ship-owners, shipyards, unsecured lenders and bond holders, entered into definitive documentation to restructure its debt. Based on this agreement, the Company received equity securities representing 1.2% of Zim’s equity and $8,229 aggregate principal amount of unsecured interest bearing Zim notes maturing in 2023 consisting of $1,452 of 3.0% Series 1 Notes due 2023 amortizing subject to available cash flows in accordance with a corporate mechanism and $6,777 of 5.0% Series 2 Notes due 2023 non-amortizing (of the 5% interest, 3% is payable quarterly in cash and 2% interest is accrued quarterly with deferred cash payment on maturity) in exchange for amounts owed by Zim to the Company under their charter agreements. The Company calculated the fair value of the instruments received by Zim based on the agreement discussed above, available information on Zim and other similar contracts with similar terms, maturities and interest rates, and recorded at fair value of $676 in relation to the Series 1 Notes, $3,567 in relation to the Series 2 Notes and $7,802 in relation to its equity participation in Zim. The difference between the aggregate fair value of the debt and equity securities received from Zim and the then net carrying value of the amounts due from Zim of $2,888 was written-off and was included in General and administrative expenses in the 2014 consolidated statement of income.

On a quarterly basis, the Company will account for the fair value unwinding of the Series 1 and Series 2 Notes, until the book value of the instruments equals their face value on maturity. During the year ended December 31, 2015, the Company recorded $798 in relation to their fair value unwinding, which is included in “Interest income” in the consolidated statement of income for the year ended December 31, 2015. The Company has classified such debt and equity securities under other non-current assets, since it has no intention to sell the securities in the near term. The Series 1 and Series 2 Zim Notes are carried at amortized cost in the accompanying consolidated balance sheet as at December 31, 2015, which approximates their fair value as of such date. These financial instruments are not measured at fair value on a recurring basis. The equity securities are carried at cost in the accompanying consolidated balance sheet as at December 31, 2015, which approximates the fair value of the instruments at inception considering that it relates to a nonmonetary exchange (as described above). No dividends have been received from Zim since July 16, 2014. As of December 31, 2015, the Company has assessed for other than temporary impairment of its investment in Zim and has concluded that no impairment existed.

5. Inventories:

Inventories of $11,565 and $10,578 in the accompanying balance sheets at December 31, 2014 and 2015, respectively relate to bunkers, lubricants and spare parts.

F-21

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

6. Vessels, Net:

The amounts in the accompanying consolidated balance sheets are analyzed as follows:


	Vessel Cost			Accumulated Depreciation			Net Book Value
Balance, January 1, 2013		2,304,036			(721,691	)		1,582,345

Depreciation		—			(89,903	)		(89,903	)
Vessel acquisitions and other vessels’ costs		51,853			—			51,853
Transfer from advances for vessel acquisitions		689,112			—			689,112
Derecognition of vessels		(29,659	)		53			(29,606	)
Disposals		(54,343	)		37,930			(16,413	)

Balance, December 31, 2013		2,960,999			(773,611	)		2,187,388

Depreciation		—			(99,515	)		(99,515	)
Vessel acquisitions and other vessels’ costs		28,984			—			28,984
Disposals		(36,543	)		18,506			(18,037	)

Balance, December 31, 2014		2,953,440			(854,620	)		2,098,820

Depreciation		—			(93,961	)		(93,961	)
Other vessels’ costs		2,758			—			2,758
Disposals		(6,156	)		3,189			(2,967	)

Balance, December 31, 2015		2,950,042			(945,392	)		2,004,650

On September 21, 2010, the Company through its three wholly-owned subsidiaries, Adele Shipping Co., Bastian Shipping Co. and Cadence Shipping Co., contracted with a shipyard for the construction and purchase of three newbuild vessels (Hulls H1068A, H1069A and H1070A), each of approximately 9,403 TEU capacity at a contract price per newbuild vessel of $95,080. The newbuilds MSC Azov (Hull H1068A), MSC Ajaccio (Hull H1069A) and MSC Amalfi (Hull H1070A) were delivered to the Company on January 14, 2014, March 14, 2014 and April 28, 2014, respectively. The Company agreed with a financial institution to refinance the then outstanding balance of the loans relating to MSC Azov , MSC Ajaccio and MSC Amalfi under a ten-year sale and leaseback transaction. Under the sale and leaseback transaction, the vessels were chartered back to the Company on a bareboat basis and remained on time charter with its initial time charterer (Note 11).

During the year ended December 31, 2013, the Company took delivery from the shipyard of the seven newbuild container vessels MSC Athens , MSC Athos , Valor , Value , Valiant , Valence and Vantage at an aggregate cost of $689,112. Furthermore, during the year ended December 31, 2013, the Company acquired the four secondhand container vessels Venetiko , Petalidi , Ensenada Express and Padma (ex. X-Press Padma ) at an aggregate price of $51,853. On July 12, 2013, pursuant to the Framework Deed (Notes 8 and 9), York (as defined below) participated with a 51% interest in the share capital of the ship-owning companies of the vessels Petalidi , Ensenada Express and Padma (Note 9).

During the year ended December 31, 2013, the Company sold for scrap the container vessels MSC Washington , MSC Austria and MSC Antwerp at an aggregate price of $23,809 and recognized a net gain of $518, which is separately reflected in Gain on sale / disposal of vessels, net in the accompanying 2013 consolidated statement of income.

During the year ended December 31, 2014, the Company acquired the three secondhand vessels Neapolis, Areopolis and Lakonia at an aggregate price of $27,740.

During the year ended December 31, 2014, the Company sold for demolition the container vessel Konstantina , MSC Kyoto and Akritas at an aggregate price of $24,329 and recognized a net

F-22

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

gain of $2,543, which is separately reflected in Gain on sale / disposal of vessels, net in the accompanying 2014 consolidated statement of income.

During the year ended December 31, 2015, the Company sold for demolition the container vessel MSC Challenger at a price of $5,022 and recognized a gain of $1,688, which is separately reflected in Gain on sale / disposal of vessels, net in the accompanying 2015 consolidated statement of income.

Forty-four of the Company’s vessels, with a total carrying value of $1,839,665 as of December 31, 2015, have been provided as collateral to secure the long-term debt discussed in Note 10. This excludes the three vessels under the sale and leaseback transaction described in Note 11.

7. Deferred Charges:

The amounts in the accompanying consolidated balance sheets are analyzed as follows:


	Financing Costs			Dry-docking and Special Survey Costs			Total
Balance, January 1, 2013		11,313			22,786			34,099

Additions		210			6,189			6,399
Amortization		(1,569	)		(8,084	)		(9,653	)
Derecognition of deferred charges		—			(553	)		(553	)
Write-off		—			(428	)		(428	)

Balance, December 31, 2013		9,954			19,910			29,864

Additions		2,055			10,150			12,205
Amortization		(2,084	)		(7,814	)		(9,898	)
Write-off		(2,023	)		(1,473	)		(3,496	)

Balance, December 31, 2014		7,902			20,773			28,675

Additions		—			9,461			9,461
Amortization		(1,896	)		(7,425	)		(9,321	)

Balance, December 31, 2015		6,006			22,809			28,815

Financing costs represent fees paid to the lenders for the conclusion of the Company’s financing. The amortization of loan financing costs is included in interest and finance costs in the accompanying consolidated statements of income (Note 16).

During the years ended December 31, 2013, 2014 and 2015, eight, eleven and ten vessels, respectively, underwent their special surveys. The amortization of the dry-docking and special survey costs is separately reflected in the accompanying consolidated statements of income.

8. Costamare Ventures Inc.:

On May 15, 2013, the Company, along with its wholly-owned subsidiary, Costamare Ventures Inc. (“Costamare Ventures”), entered into a Framework Deed (the “Framework Deed”) with York Capital Management Global Advisors LLC and its affiliate Sparrow Holdings, L.P. (collectively, “York”) to invest jointly in the acquisition and construction of container vessels. Under the Framework Deed the decisions regarding vessel acquisitions will be made jointly by Costamare Ventures and York and the Company reserves the right to acquire any vessels that York decides not to pursue.

Under the terms of the Framework Deed, York agreed to invest up to $250 million in mutually agreed vessel acquisitions and Costamare Ventures agreed to invest a minimum of $75 million with

F-23

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

an option to invest up to $240 million in these transactions. Depending on the amount Costamare Ventures elected to invest, it was expected that it would hold between 25% and 49% of the equity in the entities that would be formed under the Framework Deed (the “affiliate ship-owning companies”) and York would hold the balance. The Framework Deed was to terminate on its sixth anniversary or upon the occurrence of certain extraordinary events as described therein.

The Framework Deed was amended and restated by an Amendment and Restatement Deed dated May 18, 2015 (the “Restated Framework Deed”). Pursuant to the Restated Framework Deed, there is no minimum and maximum amount to be invested by Costamare Ventures or York, both Costamare Ventures and York can invest between 25% and 75% of the equity in the affiliate ship-owning companies, the commitment period has been extended up to May 18, 2020 and the termination of the Restated Framework Deed will occur on May 18, 2024, or upon the occurrence of certain extraordinary events as described therein.

On termination, Costamare Ventures may elect to divide the vessels owned by all such vessel-owning entities between itself and York to reflect their cumulative participation in all such entities. Costamare Shipping provides shipmanagement and administrative services to the vessels acquired under the Framework Deed, with the right to subcontract to V.Ships Greece and/or Shanghai Costamare. As at December 31, 2015, the Company holds a range of 25% to 49% of the capital stock of nineteen jointly-owned companies formed pursuant to the Restated Framework Deed with York (Note 9). The Company accounts for the entities formed under the Restated Framework Deed as equity investments.

9. Investment in Affiliates:

The affiliate companies, all of which are incorporated in the Marshall Islands and are accounted for under the equity method, are as follows:


Entity	Vessel/Hull	Participation % December 31, 2015	Date Established/ Acquired
Steadman Maritime Co.	Ensenada Express	49%	July 1, 2013
Marchant Maritime Co.	Padma	49%	July 8, 2013
Horton Maritime Co.	Petalidi	49%	June 26, 2013
Smales Maritime Co.	Elafonisos	49%	June 6, 2013
Geyer Maritime Co.	Arkadia	49%	May 18, 2015
Goodway Maritime Co.	Monemvasia	49%	September 22, 2015
Kemp Maritime Co.	Hull NCP0113	49%	June 6, 2013
Hyde Maritime Co.	Hull NCP0114	49%	June 6, 2013
Skerrett Maritime Co.	Hull NCP0152	49%	December 23, 2013
Ainsley Maritime Co.	Hull NCP0115	25%	June 25, 2013
Ambrose Maritime Co.	Hull NCP0116	25%	June 25, 2013
Benedict Maritime Co.	Hull HN2121	40%	October 16, 2013
Bertrand Maritime Co.	Hull HN2122	40%	October 16, 2013
Beardmore Maritime Co.	Hull HN2123	40%	December 23, 2013
Schofield Maritime Co.	Hull HN2124	40%	December 23, 2013
Fairbank Maritime Co.	Hull HN2125	40%	December 23, 2013
Platt Maritime Co.	Hull YZJ1206	49%	May 18, 2015
Sykes Maritime Co.	Hull YZJ1207	49%	May 18, 2015
Connell Maritime Co.	n/a	40%	December 18, 2013

F-24

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

On July 12, 2013, in accordance with the Framework Deed, York contributed $16,044, in the aggregate, in order to acquire a 51% equity interest in the affiliate ship-owning companies Steadman Maritime Co., Marchant Maritime Co. and Horton Maritime Co., and for initial working capital of such affiliate ship-owning companies (Note 6). There was no difference between: (a) the aggregate of the fair value of the consideration received and the fair value of the retained investment, as compared with (b) the carrying amount of the former subsidiaries assets and liabilities, in each case at the date the subsidiaries were deconsolidated.

In July 2013, Costamare Ventures participated with a 49% interest in the equity of Kemp Maritime Co. and Hyde Maritime Co. who entered into ship-building contracts for the construction of two 11,000 TEU container vessels, by contributing in aggregate $34,709 and $921 during the years ended December 31, 2014 and 2015, respectively.

During the years ended December 31, 2014 and 2015, Costamare Ventures participated with a 25% interest in the equity of Ainsley Maritime Co. and Ambrose Maritime Co., who entered into ship-building contracts for the construction of two 11,000 TEU container vessels, by contributing $8,767 and $13,200 in the aggregate for the years ended December 31, 2014 and 2015, respectively.

During the year ended December 31, 2014, Costamare Ventures participated with a 40% interest in the equity of Benedict Maritime Co., Bertrand Maritime Co., Beardmore Maritime Co., Schofield Maritime Co. and Fairbank Maritime Co., who entered into ship-building contracts for the construction of five 14,000 TEU container vessels, by contributing $30,305, in the aggregate. In December 2014, these five companies novated their ship-building contracts to a financial institution and agreed to lease back the vessels upon their delivery from the shipyard for a period of 12 years. Upon novation of the contracts, the Company received the amount of $23,400 in the form of a dividend. During the year ended December 31, 2015, Costamare Ventures contributed $1,090 in the aggregate to such companies.

During the year ended December 31, 2014, Costamare Ventures participated with a 40% interest in the equity of Connell Maritime Co. by contributing the amount of $6,669 and with 49% in the equity of Smales Maritime Co. by contributing the amount of $4,654 for the acquisition of the secondhand vessel Elafonisos of which $251 was refunded to the Company during the year ended December 31, 2015. Furthermore, during the year ended December 31, 2015, Costamare Ventures participated with 49% in the equity of Geyer Maritime Co. by contributing the amount of $3,212 for the acquisition of the secondhand vessel Arkadia .

In March 2015, Costamare Ventures participated with a 49% interest in the equity of Skerrett Maritime Co., which entered into a ship-building contract for the construction of an 11,000 TEU container vessel. During the year ended December 31, 2015, Costamare Ventures contributed in aggregate, the amount of $21,662. In October 2015, Costamare Ventures participated with 49% in the equity of Goodway Maritime Co. by contributing the amount of $637 as advance, for the acquisition of the secondhand vessel Monemvasia , which was delivered in February 2016 (Note 21(d)) .

During the year ended December 31, 2015, Costamare Ventures participated with a 49% interest in the equity of Platt Maritime Co. and Sykes Maritime Co., who entered into ship-building contracts for the construction of two 3,800 TEU container vessels, by contributing $4,410, in the aggregate. In December 2015, these two companies novated their ship-building contracts to a financial institution and agreed to lease back the vessels upon their delivery from the shipyard for a period of seven years. Upon novation of the contracts, the Company received the amount of $2,744 (Note 21(c)).

For the years ended December 31, 2013, 2014 and 2015, the Company recorded net gains of $692, net losses of $3,428 and net losses of $529, respectively, which are separately reflected as Equity (loss) /gain on investments in the accompanying consolidated statements of income.

F-25

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

Furthermore, during the year ended December 31, 2014, eight affiliate ship-owning companies declared dividends to their shareholders and Costamare Ventures received the amount of $31,828 (which includes the amount of $23,400, described above), which is included in Investments in affiliates in the accompanying 2014 consolidated balance sheet.

In addition, Costamare Ventures has provided Marchant Maritime Co., Horton Maritime Co. and Steadman Maritime Co. with certain cash advances. As of December 31, 2014 and 2015, the aggregate balance due from the three companies, amounted to $3,278 and $1,678, respectively and are included in Due from related parties in the accompanying consolidated balance sheets.

The summarized combined financial information of the affiliates is as follows:


	December 31,
	2014		2015
Non-current assets		177,220		290,805
Current assets		13,267		11,969

		190,487		302,774

Current liabilities		6,283		5,335

Years ended
December 31,

2014

2015

Voyage revenue

12,449

14,218

Net loss

(6,360

)

(1,669

)

10. Long-Term Debt:

The amounts shown in the accompanying consolidated balance sheets consist of the following:


Borrower(s)			December 31, 2014			December 31, 2015
1.	Credit Facility			585,883			495,993

2.	Term Loans:
	1.	Costis Maritime Corporation and Christos Maritime Corporation		91,500			82,500
	2.	Mas Shipping Co.		38,875			30,625
	3.	Montes Shipping Co. and Kelsen Shipping Co.		78,000			66,000
	4.	Capetanissa Maritime Corporation		50,000			45,000
	5.	Rena Maritime Corporation		47,500			42,500
	6.	Costamare Inc.		73,414			60,463
	7.	Adele Shipping Co., Bastian Shipping Co. and Cadence Shipping Co.		—			—
	8.	Costamare Inc.		120,330			111,417
	9.	Undine Shipping Co., Quentin Shipping Co. and Sander Shipping Co.		208,826			193,545
	10.	Raymond Shipping Co. and Terance Shipping Co.		137,793			126,878
	11.	Costamare Inc.		87,820			68,170

				934,058			827,098

		Total		1,519,941			1,323,091
		Less-current portion		(192,951	)		(185,259	)

		Long-term portion		1,326,990			1,137,832

F-26

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

1. Credit Facility:

On July 22, 2008, the Company signed a loan agreement with a consortium of banks, for a $1,000,000 Credit Facility (the “Facility”) for general corporate and working capital purposes. The Company used $631,340 of the proceeds from the Facility to repay the then existing indebtedness. The Facility bears interest at the 3, 6, 9 or 12 months (at the Company’s option) LIBOR plus margin.

The outstanding balance of the Facility as of December 31, 2015, is repayable in 10 equal, consecutive quarterly installments, of $22,473 each plus a balloon payment of $271,263 payable together with the last installment.

The Facility, as of December 31, 2015, was secured with, among others, first priority mortgages over 18 of the Company’s vessels, first priority assignment of vessels’ insurances and earnings, charter party assignments, first priority pledges over the operating accounts and corporate guarantees of 18 ship-owning companies.

The Facility and certain of the term loans described under Note 10.2 below include among others, financial covenants requiring: (i) the ratio of Total Liabilities (after deducting cash and cash equivalents) to Market Value Adjusted Total Assets (after deducting cash and cash equivalents) not to exceed 0.75 to 1.00, (ii) minimum liquidity of the greater of $30,000 or 3% of the total debt of the Company, (iii) the ratio of EBITDA to net interest expense not to be less than 2.50 to 1.00, (iv) Market Value Adjusted Net Worth, defined as the amount by which the Market Value Adjusted Total Assets exceed the Total Liabilities, to exceed $500,000. The Company’s other term loans described under Note 10.2 below also contain financial covenants requiring the ratio of net funded debt to total net assets ratio not to exceed 80% on a charter inclusive valuation basis as well as financial covenants that are either equal to or less stringent than the foregoing financial covenants.

2. Term loans:

1. In May 2008, Costis Maritime Corporation and Christos Maritime Corporation entered into a loan agreement with a bank for an amount of up to $150,000 in the aggregate ($75,000 each) on a joint and several basis in order to partly finance the acquisition cost of the vessels Sealand New York and Sealand Washington . As at December 31, 2015, the outstanding balance of the loan of $82,500 is repayable in 5 equal semi-annual installments of $4,500, each from May 2016 to May 2018 and a balloon payment of $60,000 payable together with the last installment.

2. In January 2008, Mas Shipping Co. entered into a loan agreement with a bank for an amount of up to $75,000 in order to partly finance the acquisition cost of vessel Maersk Kokura . As at December 31, 2015, the outstanding balance of the loan of $30,625 is repayable in 5 equal semi-annual installments of $4,125, each from February 2016 to February 2018 and a balloon payment of $10,000 payable together with the last installment.

3. In December 2007, Montes Shipping Co. and Kelsen Shipping Co. entered into a loan agreement with a bank for an amount of up to $150,000 in the aggregate ($75,000 each) on a joint and several basis in order to partly finance the acquisition cost of the vessels Maersk Kawasaki and Maersk Kure . As at December 31, 2015, the outstanding balance of the loan of $66,000 is repayable in 4 equal semi-annual installments of $6,000 each from June 2016 to December 2017 and a balloon payment of $42,000 payable together with the last installment.

4. In June 2006, Capetanissa Maritime Corporation entered into a loan agreement with a bank for an amount of up to $90,000, in order to partly finance the acquisition cost of the vessel Cosco Beijing . As at December 31, 2015, the outstanding balance of the loan of $45,000 is repayable in 6 equal semi-annual installments of $2,500 each from February 2016 to August 2018 and a balloon payment of $30,000 payable together with the last installment.

F-27

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

5. In February 2006, Rena Maritime Corporation entered into a loan agreement with a bank for an amount of up to $90,000 in order to partly finance the acquisition cost of the vessel Cosco Guangzhou . As at December 31, 2015, the outstanding balance of the loan of $42,500 is repayable in 5 equal semi-annual installments of $2,500 each from February 2016 to February 2018 and a balloon payment of $30,000 payable together with the last installment.

6. On November 19, 2010, Costamare entered into a term loan agreement with a consortium of banks for an amount of up to $120,000, which was available for drawing for a period up to 18 months. As of December 31, 2015, the Company had drawn the amount of $38,500 (tranche a), the amount of $42,000 (tranche b), the amount of $21,000 (tranche c), the amount of $7,470 (tranche d) and the amount of $7,470 (tranche e) under this term loan agreement in order to finance part of the acquisition cost of MSC Romanos , MSC Methoni , MSC Ulsan , MSC Koroni (ex. Koroni ) and MSC Itea (ex. Kyparissia ), respectively. As at December 31, 2015, the outstanding balance of the tranche (a) of the loan of $22,138 is repayable in 15 equal quarterly installments of $962.5 from February 2016 to August 2019 and a balloon payment of $7,700 payable together with the last installment. As at December 31, 2015, the outstanding balance of the tranche (b) of the loan of $25,200 is repayable in 16 equal quarterly installments of $1,050 from January 2016 to October 2019 and a balloon payment of $8,400 payable together with the last installment. As at December 31, 2015, the outstanding balance of the tranche (c) of the loan of $13,125 is repayable in 17 equal quarterly installments of $525 from February 2016 to February 2020 and a balloon payment of $4,200 payable together with the last installment. On May 21, 2014, the then outstanding balance of $4,202 of the tranche (d) of the loan was fully repaid and on May 29, 2015, the then outstanding balance of $2,334 of the tranche (e) of the loan was fully repaid.

7. On January 14, 2011, Adele Shipping Co., Bastian Shipping Co. and Cadence Shipping Co., wholly-owned subsidiaries of Costamare, concluded a credit facility with a consortium of banks, as joint-and-several borrowers, for an amount of up to $203,343 to finance part of the acquisition and construction cost of Hulls H1068A, H1069A and H1070A. The drawdown of the facility was made in three tranches, one for each hull. As of December 31, 2013, the Company had drawn the amount of $48,765 (tranche (a) - H1068A), $48,765 (tranche (b) - H1069A) and $48,765 (tranche (c) - H1070A), in order to partly finance the second installment and fully finance the third and fourth pre- delivery installment of hulls H1068A, H1069A and H1070A. The newbuilds MSC Azov (Hull H1068A), MSC Ajaccio (Hull H1069A) and MSC Amalfi (Hull H1070A) were delivered to the Company, on January 14, 2014, March 14, 2014 and April 28, 2014, respectively and at the same time the Company agreed the sale and leaseback of such vessels and repaid the then outstanding balance of the three tranches (Note 11).

8. On April 7, 2011, Costamare, as borrower, concluded a credit facility with a bank, for an amount up to the lesser of $140,000 and 70% of the contract price of the vessels, to finance part of the acquisition and construction cost of Hulls S4010 and S4011. Through December 31, 2013, the Company had drawn $133,700 in the aggregate, in order to partly finance the installments of Hulls S4010 ( MSC Athens ), which was delivered to the Company on March 14, 2013 and S4011 ( MSC Athos ), which was delivered to the Company on April 8, 2013. As at December 31, 2015, the outstanding balance of the loan of $111,417 is repayable in 11 equal semi-annual installments of $4,456.7 from January 2016 until January 2021 and a balloon payment of $62,393.3 payable together with the last installment.

9. On August 16, 2011, Undine Shipping Co., Quentin Shipping Co. and Sander Shipping Co., wholly-owned subsidiaries of Costamare concluded a credit facility with a consortium of banks, as joint-and-several borrowers, for an amount of up to $229,200 to finance part of the acquisition and construction cost of Hulls S4020, S4022 and S4024. The drawdown of the facility was made in three tranches. As at December 31, 2015, the outstanding balance of the tranches (a) and (b) of $127,332 relating to Hull S4020 ( Valor ) and Hull S4022 ( Valiant ), is repayable in 18 equal quarterly

F-28

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

installments for each tranche of $1,273.4 from January 2016 to June 2020 and a balloon payment for each tranche of $40,744.8 payable together with the last installment. As at December 31, 2015, the outstanding balance of the tranche (c) of $66,213 relating to Hull S4024 ( Vantage ) is repayable in 20 equal quarterly installments of $1,273.4 and a balloon payment payable together with the last installment of $40,744.8 from February 2016 to November 2020.

10. On October 12, 2011, Raymond Shipping Co. and Terance Shipping Co. wholly-owned subsidiaries of the Company concluded a credit facility with a bank, as joint and several borrowers, for an amount of up to $152,800 to finance part of the construction and acquisition cost of Hulls S4021 and S4023. As at December 31, 2015, the outstanding balance of the tranche (a) of $62,757 relating to Hull S4021 ( Value ), is repayable in 18 equal quarterly installments of $1,364.3 from March 2016 to June 2020 and a balloon payment of $38,199.6 payable together with the last installment. As at December 31, 2015, the outstanding balance of tranche (b) of the loan of $64,121 relating to Hull S4023 ( Valence ) is repayable in 19 equal quarterly installments of $1,364.3 from February 2016 to August 2020 and a balloon payment of $38,199.6 payable together with the last installment.

11. On October 6, 2011, the Company concluded a loan facility with a bank for an amount of up to $120,000, in order to partly finance the aggregate market value of eleven vessels in its fleet. In March 2012, the Company drew the amount of $113,700. Furthermore, on June 29, 2012, the Company entered into a supplemental agreement for a further amount of $11,300 to finance the acquisition of the vessel Stadt Luebeck, which was drawn down in August 2012 upon the delivery of the vessel. In April 11, 2014, the Company entered into another supplemental agreement, for a further amount of $9,000 to partly finance the acquisition of the vessel Neapolis , which was drawn down in April 2014 upon the delivery of the vessel. In May 2014, the Company repaid the amount of $6,495 due to the sale of Konstantina . Furthermore in September 2014 the Company repaid the amount of $6,000 due to the sale of Akritas . In November 2015, the Company repaid the amount of $3,900 due to the sale of MSC Challenger . As at December 31, 2015, the outstanding balance of $68,170 is repayable in 12 equal quarterly installments of $2,715 from March 2016 to December 2018 and a balloon payment of $35,590 payable together with the last installment.

The term loans discussed above bear interest at LIBOR plus a spread and are secured by, inter alia, (a) first priority mortgages over the financed vessels, (b) first priority assignments of all insurances and earnings of the mortgaged vessels and (c) corporate guarantees of Costamare or its subsidiaries, as the case may be. The loan agreements contain usual ship finance covenants, including restrictions as to changes in management and ownership of the vessels, additional indebtedness, mortgaging of vessels, as well as minimum requirements regarding hull Value Maintenance Clauses (“VMC”) in the range of 80% to 125% and restrictions in dividend payments if an event of default has occurred and is continuing or would occur as a result of the payment of such dividend.

The annual principal payments required to be made after December 31, 2015, giving effect of the supplemental agreement of the loan discussed in Note 21(e), are as follows:


Year ending December 31,	Amount
2016		185,259
2017		185,259
2018		564,046
2019		70,396
2020		251,281
2021		66,850

		1,323,091

F-29

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

The interest rates of Costamare’s long-term debt at December 31, 2013, 2014 and 2015, were in the range of 1.25%-6.75%, 1.03%-6.75% and 1.11%-6.75%, respectively. The weighted average interest rate as at December 31, 2013, 2014 and 2015, was 4.3%, 4.2% and 4.2%, respectively.

Total interest expense incurred on long-term debt (including the effect of the interest rate swaps discussed in Note 16) for the years ended December 31, 2013, 2014 and 2015, amounted to $81,471, $77,655 and $72,384, respectively and is included in Interest and finance costs in the accompanying consolidated statements of income. Of the above amount incurred in 2013, $11,098 was capitalized and is included (a) in Vessels, net ($7,845) and, (b) in the statement of comprehensive income ($3,253), representing net settlements on interest rate swaps qualifying for cash flow hedge. Of the above amount incurred in 2014, $1,795 was capitalized and is included (a) in Vessels, net ($1,306) and, (b) in the statement of comprehensive income ($489), representing net settlements on interest rate swaps qualifying for cash flow hedge.

11. Capital Leased Assets and Capital Lease Obligations:

The newbuild vessels MSC Azov , MSC Ajaccio and MSC Amalfi were delivered to the Company on January 14, 2014, March 14, 2014 and April 28, 2014, respectively (Note 6). At the same time, the Company agreed with a financial institution to refinance the then outstanding balance of the loans relating to MSC Azov , MSC Ajaccio and MSC Amalfi , by entering into a ten-year sale and leaseback transaction for each vessel upon their respective deliveries. The shipbuilding contracts for these vessels were novated to a financial institution for an amount of $85,572 each which took delivery of the vessels and the vessels were leased back for a period of ten years.

The sale and leaseback transactions were classified as capital leases. Furthermore, as the fair value of each vessel sold was in excess of its carrying amount, the difference between the sale proceeds and the carrying amount was considered as prepaid lease rentals. In this respect, an aggregate amount of $49,817 (including the net settlements on interest rate swaps qualifying for hedge accounting of $6,604) was transferred to prepaid lease rentals.

The total value of the three vessels at the inception of the capital lease transactions amounted to $256,716. The depreciation charged during the years ended December 31, 2014 and 2015, amounted to $6,169 and $7,581, respectively, and are included in Depreciation in the accompanying consolidated statements of income. As of December 31, 2015, the net book value of the three vessels amounted to $242,966 and is separately reflected as Capital leased assets, in the accompanying 2015 consolidated balance sheet.

The balance of prepaid lease rentals, as of December 31, 2014 and 2015, is analyzed as follows:


	December 31, 2014			December 31, 2015
Prepaid lease rentals		49,817			45,793
Less: Amortization of prepaid lease rentals		(4,024	)		(4,982	)

Prepaid lease rentals		45,793			40,811
Less: current portion		(4,982	)		(4,982	)

Non-current portion		40,811			35,829

The capital lease obligations amounting to $233,624 as at December 31, 2015, are scheduled to expire through 2024 and include a bargain purchase option to repurchase the vessels at any time during the charter period. Total interest expenses incurred on capital leases for the years ended December 31, 2014 and 2015 amounted to $14,793 and $17,131, respectively and are included in Interest and finance costs in the accompanying consolidated statements of income.

F-30

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

The annual lease payments in aggregate required under the capital leases after December 31, 2015, are as follows:


Year ending December 31,	Amount
2016		30,783
2017		30,698
2018		30,698
2019		30,699
2020		30,783
2021 and thereafter		176,769

Total		330,430

Less: Amount of interest		(96,806	)

Total lease payments		233,624

The total capital lease obligations are presented in the accompanying December 31, 2015, consolidated balance sheet as follows:


Capital lease obligation–current					14,534
Capital lease obligation–non current					219,090

					233,624

12. Accrued Charter Revenue, Current and Non-Current and Unearned Revenue, Current and Non-Current:

(a) Accrued charter revenue, Current and Non-Current: The amounts presented as current and non-current accrued charter revenue in the accompanying consolidated balance sheets as of December 31, 2014 and 2015, reflect revenue earned, but not collected, resulting from charter agreements providing for varying annual charter rates over their term, which were accounted for on a straight-line basis at their average rates. As at December 31, 2014, the net accrued charter revenue, totaling to ($32,751) comprises $511 separately reflected in Current assets, $1,025 separately reflected in Non- current assets, and ($34,287) (discussed in (b) below) included in Unearned revenue in current and non-current liabilities in the accompanying 2014 consolidated balance sheet. As at December 31, 2015, the net accrued charter revenue, totaling to ($35,369) comprises $457 separately reflected in Current assets, $569 separately reflected in Non-current assets, and ($36,395) (discussed in (b) below) included in Unearned revenue in current and non-current liabilities in the accompanying 2015 consolidated balance sheet. The maturities of the net accrued charter revenue as of December 31 of each year presented below are as follows:


Year ending December 31,	Amount
2016		(9,430	)
2017		(11,336	)
2018		(8,919	)
2019		(5,684	)

		(35,369	)

(b) Unearned Revenue, Current and Non-Current: The amounts presented as current and non-current unearned revenue in the accompanying consolidated balance sheets as of December 31, 2014 and 2015, reflect: (a) cash received prior to the balance sheet date for which all criteria to recognize as revenue have not been met and, (b) any unearned revenue resulting from charter agreements

F-31

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

providing for varying annual charter rates over their term, which were accounted for on a straight-line basis at their average rate.


	December 31, 2014			December 31, 2015
Hires collected in advance		8,096			8,469
Charter revenue resulting from varying charter rates		34,287			36,395

Total		42,383			44,864
Less current portion		(12,929	)		(18,356	)

Non-current portion		29,454			26,508

13. Commitments and Contingencies:

(a) Time charters: As at December 31, 2015, the Company has entered into time charter arrangements on all of its vessels in operation, with the exception of three vessels, with international liner operators. These arrangements as at December 31, 2015, have remaining terms of up to 99 months. After December 31, 2015, future minimum contractual charter revenues assuming 365 revenue days per annum per vessel and the earliest redelivery dates possible, based on vessels’ committed, non-cancelable, time charter contracts, are as follows:


Year ending December 31,	Amount
2016		446,325
2017		371,984
2018		198,759
2019		122,306
2020		93,841

2021 and thereafter		217,011

		1,450,226

(b) Pursuant to the Restated Framework Deed the Company has a contractual commitment of approximately $108,330 representing 49% of the remaining construction cost of five vessels under construction, 40% of the remaining construction cost of five vessels under construction and 25% of the construction cost of two vessels under construction (Note 9). Additionally, the Company has an outstanding commitment of approximately $2,548 representing 49% of the remaining purchase price of the vessel Monemvasia (ex. Helgoland Trader ), which was paid upon delivery of the vessel (Note 21(d)).

(c) Other: Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company’s vessels. Currently, management is not aware of any such claims not covered by insurance or contingent liabilities, which should be disclosed, or for which a provision has not been established in the accompanying consolidated financial statements.

The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Currently, management is not aware of any other claims or contingent liabilities which should be disclosed or for which a provision should be established in the accompanying consolidated financial statements.

F-32

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

The Company is covered for liabilities associated with the individual vessels’ actions to the maximum limits as provided by Protection and Indemnity (P&I) Clubs, members of the International Group of P&I Clubs.

14. Common Stock, Preferred Stock and Additional Paid-In Capital:

(a) Common Stock: From inception through July 11, 2010, the authorized common stock of Costamare consisted of 2,000,000 shares with a par value of $0.0001 per share out of which 1,000,000 shares were issued to the Family. On July 12, 2010, the Company’s articles of incorporation were amended. Under the amended articles of incorporation, the Company’s authorized capital stock consists of 1,000,000,000 shares of common stock, par value $0.0001 per share and 100,000,000 preferred shares, par value $0.0001 per share of which no shares were issued. Of these preferred shares, 10,000,000 shares have been designated Series A Participating Preferred Stock in connection with the adoption of a stockholder rights plan. All shares of stock are in registered form.

On July 20, 2010, pursuant to a rights offering authorized by the Board of Directors on July 14, 2010, the Company issued 24,000,000 shares of common stock in exchange of $2,400, increasing the issued share capital of the Company to 25,000,000 shares of common stock.

On October 19, 2010, within the context of the Initial Public Offering completed in November 2010, the Company effected a dividend of 0.88 shares for each share of common stock outstanding on the record date of August 27, 2010 (the “Stock Split”). As a result of this dividend, the Company issued 22,000,000 additional shares in respect of its 25,000,000 shares of the then outstanding common stock.

On November 4, 2010, the Company completed its Initial Public Offering in the United States under the Securities Act. In this respect 13,300,000 common shares at par value $0.0001 were issued at a public offering price of $12.00 per share, increasing the issued share capital to 60,300,000 shares. The net proceeds of the Initial Public Offering were $145,543.

On March 27, 2012, the Company completed a follow-on public equity offering in the United States under the Securities Act. In this respect 7,500,000 shares at par value $0.0001 were issued at a public offering price of $14.10 per share, increasing the issued share capital to 67,800,000 shares. The net proceeds of the follow-on offering were $100,584.

On October 19, 2012, the Company completed a follow-on public equity offering in the United States under the Securities Act. In this respect 7,000,000 shares at par value $0.0001 were issued at a public offering price of $14.00 per share, increasing the issued share capital to 74,800,000 shares. The net proceeds of the follow-on offering were $93,547.

On March 31, 2015, June 30, 2015 and September 30, 2015, the Company issued 448,800 shares, in aggregate, at par value of $0.0001 to Costamare Shipping pursuant to the Group Management Agreement (Note 3). Furthermore, on December 31, 2015, the Company issued 149,600 shares, at par value of $0.0001 to Costamare Services pursuant to the Services Agreement (Note 3). The fair value of such shares was calculated based on the closing trading price at the date of issuance. There were no share based payment awards outstanding at the end of 2015.

(b) Preferred Stock: On August 7, 2013, the Company issued 2,000,000, Series B Preferred Stock in the United States under the Securities Act, which pay dividends of 7.625% per annum in arrears on a quarterly basis (equal to $1.90625 per annum per share) at $25 per share. At any time after August 6, 2018, the Series B Preferred Stock may be redeemed, at the Company’s election at a price of $25 of liquidation preference per share. The net proceeds from the offering were $48,042.

On January 22, 2014, the Company issued 4,000,000, Series C Preferred Stock in the United States under the Securities Act, which pay dividends of 8.50% per annum in arrears on a quarterly basis (equal to $2.125 per annum per share) at $25 per share. At any time after

F-33

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

January 21, 2019, the Series C Preferred Stock may be redeemed, at the Company’s election at a price of $25 of liquidation preference per share. The net proceeds from the offering were $96,523.

On May 13, 2015, the Company issued 4,000,000, Series D Preferred Stock in the United States under the Securities Act, which pay dividends of 8.75% per annum in arrears on a quarterly basis (equal to $2.1875 per annum per share) at $25 per share. At any time after May 13, 2020, the Series D Preferred Stock may be redeemed, at the Company’s election at a price of $25 of liquidation preference per share. The net proceeds from the offering were $96,616.

(c) Additional Paid-in Capital: The amounts shown in the accompanying consolidated balance sheets, as additional paid-in capital, include: (i) payments made by the stockholders at various dates to finance vessel acquisitions in excess of the amounts of bank loans obtained, (ii) advances for working capital purposes, (iii) the difference between the par value of the shares issued in the Initial Public Offering in November 2010 and the offerings in March 2012, October 2012, August 2013, January 2014, May 2015 and the net proceeds received from the issuance of such shares and (iv) the difference between the par value and the fair value of the shares issued to Costamare Shipping and Costamare Services (Note 3).

(d) Dividends declared and / or paid : During the year ended December 31, 2014, the Company declared and paid to its common stockholders (i) $20,196 or $0.27 per common share for the fourth quarter of 2013, (ii) $20,944 or $0.28 per common share for the first quarter of 2014, (iii) $20,944 or $0.28 per common share for the second quarter of 2014 and (iv) $20,944 or $0.28 per common share for the third quarter of 2014. During the year ended December 31, 2015, the Company declared and paid to its common stockholders (i) $20,944 or $0.28 per common share for the fourth quarter of 2014, (ii) $21,736 or $0.29 per common share for the first quarter of 2015, (iii) $21,779 or $0.29 per common share for the second quarter of 2015 and (iv) $21,822 or $0.29 per common share for the third quarter of 2015. During the year ended December 31, 2014, the Company declared and paid to its holders of Series B Preferred Stock $953 or $0.476563 per share for the period from October 15, 2013 to January 14, 2014, $953 or $0.476563 per share for the period from January 15, 2014 to April 14, 2014, $953 or $0.476563 per share for the period from April 15, 2014 to July 14, 2014 and $953 or $0.476563 per share for the period from July 15, 2014 to October 14, 2014. During the year ended December 31, 2015, the Company declared and paid to its holders of Series B Preferred Stock $953 or $0.476563 per share for the period from October 15, 2014 to January 14, 2015, $953 or $0.476563 per share for the period from January 15, 2015 to April 14, 2015, $953 or $0.476563 per share for the period from April 15, 2015 to July 14, 2015 and $953 or $0.476563 per share for the period from July 15, 2015 to October 14, 2015. During the year ended December 31, 2014, the Company declared and paid to its holders of Series C Preferred Stock $1,983 or $0.495833 per share for the period from January 22, 2014 to April 14, 2014, $2,125 or $0.531250 per share for the period from April 15, 2014 to July 14, 2014 and $2,125 or $0.531250 per share for the period from July 15, 2014 to October 14, 2014. During the year ended December 31, 2015, the Company declared and paid to its holders of Series C Preferred Stock $2,125 or $0.531250 per share for the period from October 15, 2014 to January 14, 2015, $2,125 or $0.531250 per share for the period from January 15, 2015 to April 14, 2015, $2,125 or $0.531250 per share for the period from April 15, 2015 to July 14, 2015 and $2,125 or $0.531250 per share for the period from July 15, 2015 to October 14, 2015. During the year ended December 31, 2015, the Company declared and paid to its holders of Series D Preferred Stock $1,506 or $0.376736 per share for the period from May 13, 2015 to July 14, 2015 and $2,188 or $0.546875 per share for the period from July 15, 2015 to October 14, 2015.

15. Earnings per share (EPS)

All common shares issued are Costamare common stock and have equal rights to vote and participate in dividends. In August 2013, the Company issued Series B Preferred Stock, receiving an annual dividend of 7.625% in arrears on the 15th day of January, April, July and October of each

F-34

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

year. In January 2014, the Company issued Series C Preferred Stock, receiving an annual dividend of 8.50% in arrears on the 15th day of January, April, July and October of each year. Additionally, in May 2015, the Company issued Series D Preferred Stock, receiving an annual dividend of 8.75% in arrears on the 15th day of January, April, July and October of each year. Profit or loss attributable to common equity holders is adjusted by the contractual amount of dividends on Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock that should be paid for the period. Dividends paid or accrued on Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock during the years ended December 31, 2013, 2014 and 2015, amounted to $1,536, $11,909 and $17,903, respectively.


	December 31,
	2013				2014				2015
	Basic EPS				Basic EPS				Basic EPS
Net income		$	103,087			$	115,087			$	143,764
Less: paid and accrued earnings allocated to Preferred Stock			(1,536	)			(11,909	)			(17,903	)

Net income available to common stockholders			101,551				103,178				125,861

Weighted average number of common shares, basic and diluted			74,800,000				74,800,000				75,027,474

Earnings per common share, basic and diluted		$	1.36			$	1.38			$	1.68

16. Interest and Finance Costs:

The amounts in the accompanying consolidated statements of income are analyzed as follows:


	2013			2014			2015
Interest expense		33,018			46,345			45,070
Interest capitalized		(11,098	)		(1,795	)		—
Swap effect		48,453			46,103			44,445
Amortization and write-off of financing costs		1,569			4,107			1,896
Commitment fees		2,283			506			600
Bank charges and other		308			296			265

		74,533			95,562			92,276

The Swap effect includes non-hedging instruments’ interest amounting to $5,531, $10,313 and $12,645 for the years ended December 31, 2013, 2014 and 2015, respectively.

17. Taxes:

Under the laws of the countries of the companies’ incorporation and/or vessels’ registration, the companies are not subject to tax on international shipping income; however, they are subject to registration and tonnage taxes, which are included in Vessel operating expenses in the accompanying consolidated statements of income.

The vessel owning companies with vessels that have called on the United States during the relevant year of operation are obliged to file tax returns with the Internal Revenue Service. The applicable tax is 50% of 4% of U.S. related gross transportation income unless an exemption applies. Management believes that based on current legislation the relevant vessel owning companies are entitled to an exemption because they satisfy the relevant requirements, namely that (i) the related vessel owning companies are incorporated in a jurisdiction granting an equivalent exemption

F-35

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

to U.S. corporations and (ii) over 50% of the ultimate stockholders of the vessel owning companies are residents of a country granting an equivalent exemption to U.S. persons.

18. Derivatives:

(a) Interest rate swaps that meet the criteria for hedge accounting: The Company, according to its long-term strategic plan to maintain stability in its interest rate exposure, has decided to minimize its exposure to floating interest rates by entering into interest rate swap agreements. To this effect, the Company has entered into interest rate swap transactions with varying start and maturity dates, in order to manage its floating rate exposure.

These interest rate swaps are designed to hedge the variability of interest cash flows arising from floating rate debt, attributable to movements in three-month or six-month USD LIBOR. According to the Company’s Risk Management Accounting Policy, after putting in place the formal documentation required by ASC 815 in order to designate these swaps as hedging instruments as from their inception, these interest rate swaps qualified for hedge accounting. Accordingly, only hedge ineffectiveness amounts arising from the differences in the change in fair value of the hedging instrument and the hedged item are recognized in the Company’s earnings. Assessment and measurement of the effectiveness of these interest rate swaps are performed at each reporting period. For qualifying cash flow hedges, the fair value gain or loss associated with the effective portion of the cash flow hedge is recognized initially in “Other comprehensive income” and recognized to the consolidated statement of income in the periods when the hedged item affects profit or loss. Any ineffective portion of the gain or loss on the hedging instrument is recognized in the consolidated statement of income immediately.

At December 31, 2014 and 2015, the Company had interest rate swap agreements with an outstanding notional amount of $1,030,642 and $904,627, respectively. The fair value of these interest rate swaps outstanding at December 31, 2014 and 2015, amounted to a liability of $55,422 and a liability of $39,654, respectively and these are included in the accompanying consolidated balance sheets. The maturity of these interest rate swaps range between June 2018 and January 2021.

During the years ended December 31, 2013, 2014 and 2015, the realized ineffectiveness on the interest rate swaps discussed under (a) above was a gain of $254, a gain of $645 and a loss of $60, respectively and are included in Gain on derivative instruments, net in the accompanying consolidated statements of income.

During the year ended December 31, 2014, the Company terminated three interest rate derivative instruments and paid the counterparty breakage costs of $10,192 in aggregate and is reflected in the Swaps breakage costs in the accompanying 2014 consolidated statement of income.

The estimated net amount that is expected to be reclassified within the next 12 months from Accumulated Other Comprehensive Loss to earnings in respect of the settlements on interest rate swaps amounts to $22,118.

(b) Interest rate swaps that do not meet the criteria for hedge accounting: As of December 31, 2014 and 2015, the Company had interest rate swap agreements with an outstanding notional amount of $217,533 and $207,439, respectively for the purpose of managing risks associated with the variability of changing LIBOR-related interest rates. Such agreements did not meet hedge accounting criteria and, therefore, changes in its fair value are reflected in earnings. The fair value of these interest rate swaps at December 31, 2014 and 2015, was a liability of $18,509 and a liability of $12,463, respectively and these are included in Fair value of derivatives in the accompanying consolidated balance sheets. The maturity of these interest rate swaps range between February 2017 and August 2020.

F-36

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

(c) Foreign currency agreements: As of December 31, 2015, the Company was engaged in 16 Euro/U.S. dollar forward agreements totaling $20,000 at an average forward rate of Euro/U.S. dollar 1.0725 expiring in monthly intervals up to August 2016.

As of December 31, 2014, the Company was engaged in nine Euro/U.S. dollar forward agreements totaling $22,500 at an average forward rate of Euro/U.S. dollar 1.273 expiring in monthly intervals up to September 2015.

As of December 31, 2013, the Company had no outstanding Euro/USD foreign currency agreements.

The total change of forward contracts fair value for the year ended December 31, 2015, was a gain of $1,361 (loss of $1,009 for the year ended December 31, 2014 and a loss of $165 for the year ended December 31, 2013) and is included in Gain on derivative instruments, net in the accompanying 2015 consolidated statement of income.


The Effect of Derivative Instruments for the years ended December 31, 2013, 2014 and 2015

Derivatives in ASC 815 Cash Flow Hedging Relationships

	Amount of Gain / (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)								Location of Gain / (Loss) Recognized in Income on Derivative (Ineffective Portion)	Amount of Gain / (Loss) Recognized in Income on Derivative (Ineffective Portion)
	2013		2014			2015				2013		2014		2015
Interest rate swaps		27,964		(12,988	)		(20,418	)	Gain on derivative instruments, net		254		645		(60	)
Reclassification to Interest and finance costs		42,922		35,790			31,800				—		—		—

Total		70,886		22,802			11,382				254		645		(60	)


Derivatives Not Designated as Hedging Instruments and Ineffectiveness of Hedging Instruments under ASC 815

	Location of Gain / (Loss) Recognized in Income on Derivative	Amount of Gain / (Loss) Recognized in Income on Derivative
		2013			2014			2015
Non hedging interest rate swaps	Gain on derivative instruments, net		6,459			5,833			15,555
Ineffective portion of hedging interest rate swaps	Gain on derivative instruments, net		254			645			(60	)
Forward contracts	Gain on derivative instruments, net		(165	)		(1,009	)		1,361

Total			6,548			5,469			16,856

19. Financial Instruments:

(a) Interest rate risk: The Company’s interest rates and loan repayment terms are described in Note 10.

(b) Concentration of credit risk: Financial instruments which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents, accounts receivable (included in current and non-current assets), investments in affiliates, equity securities, debt securities and derivative contracts (interest rate swaps and foreign currency contracts). The Company places its cash and cash equivalents, consisting mostly of deposits, with high credit rated

F-37

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company is exposed to credit risk in the event of non-performance by counterparties to derivative instruments; however, the Company limits its exposure by diversifying among counterparties with high credit ratings. The Company limits its credit risk with accounts receivable, investments in affiliates and equity and debt securities by performing ongoing credit evaluations of its customers’, affiliates’ and investees’ financial condition and generally does not require collateral for its accounts receivable.

(c) Fair value: The carrying amounts reflected in the accompanying consolidated balance sheet of financial assets and accounts payable approximate their respective fair values due to the short maturity of these instruments. The fair value of long-term bank loans with variable interest rates approximate the recorded values, generally due to their variable interest rates. The fair value of the interest rate swap agreements and the foreign currency agreements discussed in Note 18 above are determined through Level 2 of the fair value hierarchy as defined in FASB guidance for Fair Value Measurements and are derived principally from or corroborated by observable market data, interest rates, yield curves and other items that allow value to be determined.

The fair value of the interest rate swap agreements discussed in Note 18(a) and (b) equates to the amount that would be paid by the Company to cancel the agreements. As at December 31, 2014 and 2015, the fair value of these interest rate swaps in aggregate amounted to a liability of $73,931 and $52,117, respectively.

The fair market value of the forward contracts discussed in Note 18(c) determined through Level 2 of the fair value hierarchy as at December 31, 2014 and 2015, amounted to a liability of $1,009 and an asset of $352, respectively.

The following tables summarize the hierarchy for determining and disclosing the fair value of assets and liabilities by valuation technique on a recurring basis as of the valuation date.


	December 31, 2014			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)
Recurring measurements:
Forward contracts—liability position		(1,009	)		—		(1,009	)		—
Interest rate swaps—liability position		(73,931	)		—		(73,931	)		—

Total		(74,940	)		—		(74,940	)		—


	December 31, 2015			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)
Recurring measurements:
Forward contracts—asset position		352			—		352			—
Interest rate swaps—liability position		(52,117	)		—		(52,117	)		—

Total		(51,765	)		—		(51,765	)		—

20. Comprehensive Income:

During the year ended December 31, 2013, Other comprehensive income increased with net gains of $67,688 relating to (i) the change of the fair value of derivatives that qualify for hedge accounting (gain of $27,964), net of the settlements to net income of derivatives that qualify for hedge accounting (gain of $42,922), (ii) the Net settlements on interest rate swaps qualifying for cash

F-38

COSTAMARE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2013, 2014 and 2015
(Expressed in thousands of U.S. dollars, except share and per share data)

flow hedge associated with vessels under construction ($3,253) and, (iii) the amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to depreciation ($55). During the year ended December 31, 2014, Other comprehensive income increased with net gains of $29,020 relating to (i) the change of the fair value of derivatives that qualify for hedge accounting (loss of $12,988), net of the settlements to net income of derivatives that qualify for hedge accounting (gain of $35,790), (ii) the Net settlements on interest rate swaps qualifying for cash flow hedge associated with vessels under construction ($489), (iii) the amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to depreciation ($103) and (iv) the amounts reclassified from net settlements on interest rate swaps qualifying for hedge accounting to Prepaid lease rentals ($6,604). During the year ended December 31, 2015, Other comprehensive income increased with net gains of $11,485 relating to (i) the change of the fair value of derivatives that qualify for hedge accounting (loss of $20,418), net of the settlements to net income of derivatives that qualify for hedge accounting (gain of $31,800) and (ii) the amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to depreciation ($103). During the years ended December 31, 2013, 2014 and 2015, Comprehensive income amounted to $170,775, $144,107 and $155,249, respectively. The estimated net amount that is expected to be reclassified within the next 12 months from Accumulated Other Comprehensive Loss to earnings in respect of the net settlements on interest rate swaps amounts to $22,118.

21. Subsequent Events:

(a) Declaration of Dividends (common stock): i) On January 4, 2016, the Company declared a dividend for the fourth quarter ended December 31, 2015, of $0.29 per share on our common stock, paid on February 4, 2016, to stockholders of record on January 21, 2016 and ii) On April 1, 2016, the Company declared a dividend for the first quarter ended March 31, 2016, of $0.29 per share on our common stock, payable on May 4, 2016, to stockholders of record on April 19, 2016.

(b) Declaration and Payment of Dividends (preferred stock Series B, Series C and Series D): i) On January 4, 2016, the Company declared a cash dividend of $953 or $0.476563 per share on its Series B Preferred Stock, a cash dividend of $2,125 or $0.531250 per share on its Series C Preferred Stock and a cash dividend of $2,188 or $0.546875 per share on its Series D Preferred Stock, paid on January 15, 2016, to holders of record on January 14, 2016 and ii) On April 1, 2016, the Company declared a cash dividend of $953 or $0.476563 per share on its Series B Preferred Stock, a cash dividend of $2,125 or $0.531250 per share on its Series C Preferred Stock and a cash dividend of $2,188 or $0.546875 per share on its Series D Preferred Stock, payable on April 15, 2016, to holders of record on April 14, 2016.

(c) Investments in affiliates: Platt Maritime Co. and Sykes Maritime Co. novated their ship-building contracts to a financial institution and agreed to lease back the vessels upon their delivery from the shipyard for a period of seven years. On February 11, 2016 and upon novation of the contracts, the Company received the amount of $2,744 in the form of a dividend.

(d) Vessel acquisition: On February 18, 2016, pursuant to the Amended Deed Agreement with York, the Company took delivery of the 1998-built, 2,472 TEU containership Monemvasia (ex. Helgoland Trader ) by contributing in aggregate the amount of $2,925.

(e) Amendment of term loan: On January 27, 2016, Kelsen Shipping Co. and Montes Shipping Co. entered into a supplemental agreement with the bank in order to reschedule the repayment of the outstanding loan amount of $66,000 (Note 10.2.3) by extending the repayment, in 10 consecutive semi- annual variable installments from June 2016 until December 2020 and a balloon payment of $12,000 payable together with the last installment.

(f) Issuance of common shares: On March 31, 2016, the Company issued 149,600 shares to Costamare Services, pursuant to the Services Agreement (Note 3).

F-39

Exhibit 4.9

EXECUTION VERSION

COSTAMARE INC.

- and –

COSTAMARE SHIPPING COMPANY S.A.

AMENDED and RESTATED

MANAGEMENT AGREEMENT

TABLE OF CONTENTS

		Page

ARTICLE I	INTERPRETATION	1
ARTICLE II	APPOINTMENT	6
ARTICLE III	THE PARENT’S GENERAL OBLIGATIONS	8
ARTICLE IV	THE MANAGER’S GENERAL OBLIGATIONS	9
ARTICLE V	ADMINISTRATIVE SERVICES	11
ARTICLE VI	COMMERCIAL SERVICES	14
ARTICLE VII	INSURANCE	14
ARTICLE VIII	OFFICERS AND EMPLOYEES	15
ARTICLE IX	MANAGEMENT FEES AND EXPENSES	15
ARTICLE X	BUDGETS, CORPORATE PLANNING AND EXPENSES	19
ARTICLE XI	LIABILITY AND INDEMNITY	21
ARTICLE XII	RIGHTS OF THE MANAGER AND RESTRICTIONS ON THE MANAGER’S AUTHORITY	23
ARTICLE XIII	TERMINATION OF THIS AGREEMENT	24
ARTICLE XIV	NOTICES	27
ARTICLE XV	APPLICABLE LAW	27
ARTICLE XVI	ARBITRATION	27
ARTICLE XVII	MISCELLANEOUS	28

APPENDIX I	Form of Shipmanagement Agreement

APPENDIX II	Form of Supervision Agreement

THIS AMENDED AND RESTATED MANAGEMENT AGREEMENT (this “ Agreement ”) is made on the 3rd day of March, 2015, BY AND BETWEEN :

(1) COSTAMARE INC., a company organized and existing under the laws of the Republic of the Marshall Islands (the “ Parent ”); and

(2) COSTAMARE SHIPPING COMPANY S.A., a company organized and existing under the laws of the Republic of Panama (the “ Manager ”).

WHEREAS :

(A) The Parent and the Manager desire to amend and restate the original management agreement made on the 3rd day of November, 2010 as amended and/or supplemented from time to time until the date of this Agreement (the “ Original Agreement ”).

(B) The Parent wholly owns (i) the corporations set out in Schedule A, as such Schedule A may be amended from time to time (the “ Shipowning Subsidiaries ”) , each of which owns one or more Container Vessels (as defined below) (the “ Vessels ”) and (ii) the corporations set out in Schedule B, as such Schedule B may be amended from time to time (together with the Shipowning Subsidiaries, the “ Subsidiaries ”).

(C) The Manager has the benefit of experience in the technical and commercial management of Container Vessels and administration of shipowning companies generally.

(D) The Parent and the Manager desire to adopt this Agreement, which will amend and restate in full the Original Agreement, pursuant to which the Manager shall represent the Group (as defined below) in its dealings with third parties and either directly or through a Submanager (as defined below) provide technical, commercial, administrative and certain other services to the members of the Group as specified herein in connection with the management and administration of the business of the members of the Group.

NOW, THEREFORE, THE PARTIES HEREBY AGREE:

ARTICLE I

INTERPRETATION

SECTION 1.1. This Agreement amends and restates in its entirety the Original Agreement between the Parent and the Manager. This Agreement shall become effective as of the date hereof.

SECTION 1.2. In this Agreement, unless the context otherwise requires:

“ Affiliates ” means, with respect to any person as to any particular date, any other persons that directly or indirectly, through one or more intermediaries, are

Controlled by, Control or are under common Control with the person in question, and Affiliates means any of them.

“ Agreement ” shall have the meaning set forth in the preamble.

“ Annual Period ” shall have the meaning set forth in Section 9.2.

“ Approved Budget ” shall have the meaning set forth in Section 10.3.

“ Beneficial Owner ” has the meaning set forth in Rule 13d-3 under the Exchange Act. For purposes of this definition, such person or group shall be deemed to Beneficially Own any outstanding voting securities of a company held by any other company (the “parent company”) that is Controlled by such person or group. The term “Beneficially Own” and similar capitalized terms shall have analogous meanings.

“ Board of Directors ” means the board of directors of the Parent as the same may be constituted from time to time.

“ Business Days ” means a day (excluding Saturdays and Sundays) on which banks are open for business in Athens, Greece; and New York, New York.

“ Change in Control of the Manager ” means (a) a sale of all or substantially all of the assets or property of the Manager necessary for the performance of the Manager’s services under this Agreement, (b) a sale of the Manager’s shares that would result in Konstantinos Konstantakopoulos Beneficially Owning, directly or indirectly, less than 50.1% of the total voting power of the outstanding voting securities of the Manager or (c) a merger, consolidation or similar transaction, that would result in Konstantinos Konstantakopoulos Beneficially Owning, directly or indirectly, less than 50.1% of the total voting power of the outstanding voting securities of the resulting entity following such transaction.

“ Change in Control of the Parent ” means the occurrence of any of the following events: (a) if any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act or any successor provisions to either of the foregoing), including a group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(10) under the Exchange Act (other than one or more Konstantakopoulos Entities) (collectively, an “Acquiring Person”) becomes the Beneficial Owner, directly or indirectly, of 40% or more of the total voting power of the outstanding voting securities of the Parent, which voting power represents a higher percentage than that of the Konstantakopoulos Entities, collectively; or (b) the approval by the shareholders of the Parent of a proposed merger, consolidation or similar transaction, as a result of which any Acquiring Person becomes the Beneficial Owner, directly or indirectly, of 40% or more of the total voting power of the outstanding voting securities of the resulting entity following such transaction, which voting power represents a higher percentage than that of the Konstantakopoulos Entities, collectively; or (c) a change in directors after which a majority of the members of the Board of Directors are not Continuing Directors.

“ Consent of the Parent ” means the prior written consent of the majority of the Independent Directors of the Parent.

“ Container Vessel ” means any ocean-going vessel (whether in its construction phase or operational) that is intended to be used primarily to transport containerized cargoes.

“ Continuing Directors ” means, as of any date of determination, any member of the Board of Directors who (i) was a member of the Board of Directors immediately after the Effective Date, or (ii) was nominated for election or elected to the Board of Directors with the approval of a majority of the directors then still in office or who were either directors immediately after the Effective Date or whose nomination or election was previously so approved.

“ Control ” or “ Controlled ” means, with respect to any person, the right to elect or appoint, directly or indirectly, a majority of the directors of such person or a majority of the persons who have the right, including any contractual right, to manage and direct the business, affairs and operations of such person or the possession of the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, by contract or otherwise.

“ Crew ” shall have the meaning set forth in clause 1 of each Shipmanagement Agreement.

“ Draft Budget ” shall have the meaning set forth in Section 10.1.

“ Effective Date ” means the date upon which the initial public offering of the Parent is consummated.

“ Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended.

“ Executive Officers ” means the Chief Executive Officer, the Chief Operating Officer (if any) and the Chief Financial Officer of the Parent.

“ Fixed Period ” shall have the meaning set forth in Section 9.2.

“ Force Majeure ” shall have the meaning set forth in Section 11.1.

“ General Partner ” means Costamare Partners GP LLC, a Marshall Islands limited liability company, as general partner of the Partnership.

“ Group ” means, at any time, the Parent and the Subsidiaries at such time taking into account the Schedule A and Schedule B in effect at such time and “member of the Group” shall be construed accordingly.

“ Independent Directors ” means those members of the Board of Directors that qualify as independent directors within the meaning of Rule 10A-3 promulgated under the Exchange Act and the listing criteria of the New York Stock Exchange.

“ Initial Term ” shall have the meaning set forth in Section 13.1.

“ Konstantakopoulos Entities ” means:

	(a)	Konstantinos Konstantakopoulos, Christos Konstantakopoulos, Achillefs Konstantakopoulos or Vassileios Konstantakopoulos;

	(b)	any spouse or lineal descendant of any of the individuals set out in paragraph (a) above; and

	(c)	any person Controlled by, or under common Control with, any such individual or combination of such individuals as set out in paragraphs (a) and (b) above.

“ Management Fee ” shall have the meaning set forth in Section 9.1.

“ Management Services ” shall have, in relation to a Vessel, the meaning set forth in clause 1 of the Shipmanagement Agreement applicable to such Vessel.

“ Manager ” shall have the meaning set forth in the preamble.

“ Manager Related Parties ” shall have the meaning set forth in Section 11.2.

“ Newbuild ” means a new vessel to be or which has just been constructed, or is under construction, pursuant to a shipbuilding contract or other related agreement entered into by the relevant member of the Group.

“ Omnibus Agreement ” means that certain Omnibus Agreement, dated as of October 1, 2014, among the Parent, Costamare Ventures Inc., the Partnership, the General Partner, Costamare Partners Holdings LLC, Sparrow Holdings, L.P. and Bluebird Holdings, L.P. and York Capital Management Global Advisors LLC, as such agreement may be amended, supplemented or restated from time to time.

“ Original Agreement ” shall have the meaning set forth in the preamble.

“ Parent ” shall have the meaning set forth in the preamble.

“ Partnership ” means Costamare Partners LP, a Marshall Islands limited partnership.

“ Partnership Group ” means, at any time, the Partnership, the General Partner and the direct or indirect subsidiaries of the Partnership at that time listed in

Schedule A and Schedule B of the Partnership Management Agreement in effect at such time and “member of the Partnership Group” shall be construed accordingly.

“ Partnership Management Agreement ” means the management agreement made or (as the case may be) to be made, between the Partnership, the General Partner and the Manager.

“ Questioned Items ” shall have the meaning set forth in Section 10.2.

“ Related Manager ” means Shanghai Costamare Ship Management Co., Ltd. or any Affiliate of a Konstantakopoulos Entity appointed as Submanager in accordance with the terms of this Agreement.

“ Rena Shipmanagement Agreement ” means the shipmanagement agreement between the Manager and Daina Shipping Co. dated November 22, 2010 as amended and/or supplemented from time to time.

“ Services ” shall have the meaning set forth in Section 2.3.

“ Shipmanagement Agreement ” shall have the meaning set forth in Section 3.2.

“ Shipowning Subsidiaries ” shall have the meaning set forth in the recitals.

“ STCW 95 ” means the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, as amended in 1995 or any subsequent amendment thereto.

“ Submanager ” shall have the meaning set forth in Section 2.4.

“ Subsequent Term ” shall have the meaning set forth in Section 13.1.

“ Subsidiaries ” shall have the meaning set forth in the recitals.

“ Supervision Agreement ” shall have the meaning set forth in Section 3.3.

“ Term ” shall have the meaning set forth in Section 13.1.

“ Vessels ” shall have the meaning set forth in the recitals.

“ V.Ships ” means V.Ships Greece Ltd, Par-La Ville Place 14, Par-La Ville Road, Hamilton HM08, Bermuda and includes its successors in title and permitted assignees.

SECTION 1.3. The headings of this Agreement are for ease of reference and do not limit or otherwise affect the meaning hereof.

SECTION 1.4. All the terms of this Agreement, whether so expressed or not, shall be binding upon the parties hereto and their respective successors and assigns.

SECTION 1.5. In the event of any conflict between this Agreement, any Shipmanagement Agreement or any Supervision Agreement, the provisions of this Agreement shall prevail.

SECTION 1.6. Unless otherwise specified, all references to money refer to the legal currency of the United States of America.

SECTION 1.7. Unless the context otherwise requires, words in the singular include the plural and vice versa.

SECTION 1.8. The words “include”, “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation” and shall not be construed to limit any general statement which it follows to the specific or similar items or matters immediately following it.

SECTION 1.9. Any reference to “person” includes an individual, body corporate, limited liability company, partnership, joint venture, cooperative, trust or unincorporated organization, association, trustee, domestic or foreign government or any agency or instrumentality thereof, or any other entity recognized by law.

SECTION 1.10. Any reference to an enactment shall be deemed to include reference to such enactment as re-enacted, amended or extended.

SECTION 1.11. Any reference to (or to any specified provision of) this Agreement or any other document shall be construed as reference to this Agreement, that provision or that document as in force for the time being and as amended in accordance with the terms thereof, or, as the case may be, with the agreement of the relevant parties.

SECTION 1.12. Any reference to clauses, appendices and schedules shall be construed as reference to clauses of, appendices to and schedules to this Agreement and references to this Agreement includes its appendices and schedules.

ARTICLE II

APPOINTMENT

SECTION 2.1. The Manager is hereby appointed by the Parent as the administrative manager of the Group and hereby accepts such appointment on the terms and conditions of this Agreement.

SECTION 2.2. The Manager shall be appointed by (a) each Shipowning Subsidiary pursuant to the provisions of Section 3.3 as the technical and/or commercial manager of each such Shipowning Subsidiary’s Vessel on the terms and conditions of the relevant Shipmanagement Agreement and this Agreement and (b) each member of the Group to be acquiring a Newbuild, as the supervisor of the construction thereof on the terms and conditions of the relevant Supervision Agreement and this Agreement.

SECTION 2.3. The Manager agrees to provide:

(a) the services specified in Articles V, VI, VII and VIII of this Agreement;

(b) the services specified in each Supervision Agreement; and

(c) the Management Services (as such term is defined in clause 1 of each Shipmanagement Agreement) in respect of each Vessel specified in each Shipmanagement Agreement (the services to be provided under Sections 2.3(a), 2.3(b) and 2.3(c) collectively the “ Services ”).

The Parent and the Manager each hereby agree that in the performance of this Agreement, any Supervision Agreement or any Shipmanagement Agreement, the Manager or, as the case may be, any Submanager, is acting solely on behalf of, as agent of and for the account of, the Parent or any other relevant member of the Group. The Manager or, as the case may be, the relevant Submanager may advise persons with whom it deals on behalf of the Parent or any other member of the Group that it is conducting such business for and on behalf of the Parent or, as the case may be, a member of the Group.

SECTION 2.4. The Manager may upon notice to the Parent appoint any person (a “ Submanager ”) at any time throughout the duration of this Agreement to discharge any of the Manager’s duties under this Agreement or a Shipmanagement Agreement or a Supervision Agreement, provided that if such person is not a Related Manager or V.Ships, the Manager shall obtain the written Consent of the Parent prior to such appointment (such Consent of the Parent shall not be unreasonably withheld or delayed). The Manager shall appoint a Submanager either by entering into a management agreement or supervision agreement (such management agreement or supervision agreement to be on terms to be agreed between the parties thereto and only in respect of the services that the Manager wishes such Submanager to discharge) directly with such Submanager (for the avoidance of doubt, unless otherwise agreed in writing, no member of the Group shall have any responsibility for any fees or costs incurred under any such management agreement or supervision agreement) or by directing such Submanager to enter into a management agreement or supervision agreement directly with the relevant member of the Group (such management agreement or supervision agreement to be on terms to be agreed between the parties thereto and only in respect of the services that the Manager wishes such Submanager to discharge). Any Submanager (other than V.Ships) shall agree to the terms and conditions of this Agreement to the extent applicable to it, prior to performing any services for any member of the Group. The Parent shall procure that each member of the Group shall provide written confirmation to the Manager or, as the case may be, a Submanager, that such member’s Vessel is commercially and/or technically managed by the Manager or, as the case may be, the relevant Submanager.

SECTION 2.5. The Manager’s power to delegate performance of any provision of this Agreement, including delegation by directing a Submanager to enter into a management agreement or supervision agreement directly with a member of the Group in accordance with Section 2.4, shall not limit the Manager’s liability to the Parent

to perform this Agreement with the intention that the Manager shall remain responsible to the Parent for the due and timely performance of all duties and responsibilities of the Manager hereunder, PROVIDED HOWEVER , that to the extent that any Submanager has performed any such duty, the Manager shall not be under any obligation to perform again the same duty.

ARTICLE III

THE PARENT’S GENERAL OBLIGATIONS

SECTION 3.1. The Parent shall notify the Manager as soon as possible of any purchase of any vessel (whether the same is a second-hand vessel or a Newbuild), the delivery of any Newbuild from the relevant builder or intermediate seller to the relevant member of the Group to take ownership of such Newbuild, the sale of any Vessel, the purchase or creation of any direct or indirect subsidiary of the Parent or the sale or divestiture of any Subsidiary and shall promptly amend Schedule A and Schedule B, as applicable, to be reflective of any such development. Such amended Schedule A or Schedule B shall be effective on any such day as mutually agreed by the Parent and the Manager, which date shall be no later than five Business Days after delivery of such amended Schedule A and/or Schedule B to the Manager by the Parent.

SECTION 3.2. For each Vessel the Parent shall cause the relevant Shipowning Subsidiary to enter into with the Manager, and the Manager shall enter into with such Shipowning Subsidiary, a contract substantially in the form attached as Appendix I (each a “ Shipmanagement Agreement ” and, collectively, the “ Shipmanagement Agreements ”), with such alterations and additions as are appropriate; PROVIDED HOWEVER , that any alterations or additions which materially vary from such form shall require the approval of the Board of Directors.

SECTION 3.3. For each Newbuild the Parent shall cause the relevant Shipowning Subsidiary to enter into with the Manager, and the Manager shall enter into with such Shipowning Subsidiary, a contract substantially in the form attached as Appendix II (each a “ Supervision Agreement ” and, collectively, the “ Supervision Agreements ”) with such alterations and additions as are appropriate; PROVIDED HOWEVER , that any alterations or additions which materially vary from such form shall require the approval of the Board of Directors.

SECTION 3.4. The Parent shall pay punctually all sums due to the Manager under this Agreement, any Shipmanagement Agreement and/or any Supervision Agreement to which the Manager is a party in accordance with the respective terms thereof.

SECTION 3.5. The Parent shall procure that each other member of the Group (a) performs its obligations under any Shipmanagement Agreement or any Supervision Agreement to which it is a party and (b) does not take any action or omit to take any action the effect of which is to cause the Parent or the Manager or a Submanager

to be in breach of this Agreement, any Shipmanagement Agreement and/or any Supervision Agreement.

SECTION 3.6. The Parent agrees that it has engaged the Manager to provide the Services on an exclusive basis and, without receiving the prior written approval of the Manager or before it has lawfully terminated this Agreement in accordance with its terms, it will not engage any other entity to provide any of the Services.

ARTICLE IV

THE MANAGER’S GENERAL OBLIGATIONS

SECTION 4.1. In the exercise of its duties hereunder, the Manager shall act in accordance with the reasonable policies, guidelines and instructions from time to time communicated to it in writing by any member of the Group.

SECTION 4.2. For each Vessel or, as the case may be, Newbuild the Manager shall act and do all and/or any of the acts or things described in this Agreement and the relevant Shipmanagement Agreement or Supervision Agreement applicable to each such Vessel or Newbuild in the name and/or on behalf of the Parent and/or the relevant Subsidiary or Subsidiaries.

SECTION 4.3. The Manager acknowledges that the services it will provide pursuant to the Shipmanagement Agreements or the Supervision Agreements are not limited to the services described in such agreements and include those set forth in this Agreement.

SECTION 4.4. The Manager shall exercise commercially reasonable care to cause all material property of any member of the Group to be clearly identified as such, held separately from the property of the Manager and, where applicable, held in safe custody.

SECTION 4.5. The Manager shall exercise commercially reasonable care to cause adequate manpower to be employed by it to perform its obligations under this Agreement, PROVIDED HOWEVER , that the Manager, in the performance of its responsibilities under this Agreement, shall be entitled to have regard to its overall responsibilities in relation to the management of its clients and in particular, without prejudice to the generality of the foregoing, the Manager shall be entitled to allocate available resources and services in such manner as in the prevailing circumstances the Manager considers to be fair and reasonable.

SECTION 4.6. Notwithstanding anything to the contrary contained in this Agreement or any Shipmanagement Agreement or any Supervision Agreement, the Manager agrees that any and all decisions of a material nature relating to the Parent, any Subsidiary, any Vessel or any Newbuild under construction shall be reserved to the Parent, such decisions including, but not being limited to:

(a) the purchase and/or sale of shares in any entity or other assets of a material nature;

(b) the purchase, formation or dissolution of subsidiaries;

(c) the entry into guarantees or loans or other forms of financing and any and all financial undertakings and commitments connected therewith; and

(d) the presentation, negotiation, settlement, prosecution or defense of any claim, demand or petition for an amount exceeding US$1,000,000 or its equivalent.

SECTION 4.7. During the Term, the Manager shall promote the business of the Group in accordance with the directions of the authorized representative or, as the case may be, representatives of the respective member of the Group and shall at all times use commercially reasonable efforts to conform to and comply with the lawful and reasonable directions, regulations or recommendations made by such authorized representative or, as the case may be, representatives, and in the absence of any specific directions or recommendations as aforesaid and, subject to the terms and conditions of this Agreement, shall provide general administrative and advisory services in connection with the management of the business of the Group.

SECTION 4.8. The Manager, in the performance of its responsibilities under this Agreement, any Supervision Agreement or any Shipmanagement Agreement, shall exercise commercially reasonable care to cause any purchases of products or services from any of its Affiliates to be on terms no less favorable to the Manager than the market prices for products or services that the Manager could obtain on an arm’s length basis from unrelated parties.

SECTION 4.9. During the term hereof, the Manager agrees that it will provide the Services to the Partnership Group and Parent and their respective subsidiaries on an exclusive basis and, without receiving the prior Consent of the Parent, it will not provide any Services or other services contemplated herein to any entity other than the Partnership Group, the Parent and the Subsidiaries.

SECTION 4.10. If a Vessel (which expression for the purposes of this Section shall include any Newbuild to be acquired by a member of the Group) and a Container Vessel directly or indirectly owned or operated by a third party are both available and meet the criteria for a charter being fixed by the Manager, the Vessel shall be offered such charter first and the Parent shall have 48 hours from such offer being received to accept such offer, failing which such charter shall be then offered to the relevant third party. If a Vessel and a Container Vessel directly or indirectly owned or operated by the Partnership are both available and meet the criteria for a charter being fixed by the Manager, the Vessel shall be offered such charter first, provided that such Vessel shall be subject to the terms of the Omnibus Agreement, as applicable.

SECTION 4.11. The Manager shall at all times maintain appropriate and necessary accounts and records as regards the Services and shall make the same available for inspection and auditing by the Parent at such times as may be mutually agreed by the Manager, on the one hand, and the Parent, on the other hand.

ARTICLE V

ADMINISTRATIVE SERVICES

SECTION 5.1. The Manager shall provide certain general administrative services to the Group, including, but not limited to, the following:

(a) keeping all books and records of things done and transactions performed on behalf of any member of the Group as it may require from time to time, including, but not limited to, liaising with accountants, lawyers and other professional advisors;

(b) except as otherwise contemplated herein, representing any member of the Group generally in its dealings and relations with third parties;

(c) maintaining the general ledgers of the Group, establishing bank accounts with such financial institutions as the Parent may request, managing, administering and reconciling of the Group’s bank accounts, preparation of periodic consolidated financial statements of the Group, including, but not limited to, those required for governmental and regulatory or self-regulatory agency filings and reports to shareholders, arranging of the auditing and/or review of any such financial statements and the provision of related data processing services;

(d) providing assistance in the preparation of periodic and other reports, proxy statements, registration statements and other documents and reports required by applicable law (including rules and regulations promulgated by the U.S. Securities and Exchange Commission) or the rules of any securities exchange or inter-dealer quotation system on which the securities of the Parent or any member of the Group may be listed or quoted;

(e) preparing and providing (or procuring, at the Parent’s cost, a third party service provider to prepare and provide) tax returns required by any law or regulatory authority and developing, maintaining and monitoring internal audit controls, disclosure controls and information technology for the Group;

(f) arranging for the provision of advisory services (either directly or, at the Parent’s cost, through a third party service provider) to ensure the Group is in compliance with all applicable laws, including all relevant securities laws, including the preparation for review, approval

and filing by the Parent of reports and other documents with the U.S. Securities and Exchange Commission, any securities exchange on which its shares are listed and all other regulatory authorities having jurisdiction over the Parent or with other securities exchanges on which the Parent’s securities are listed;

(g) either directly or, at the Parent’s cost, through a third party service provider (such as by appointing lawyers), providing for the presentation, negotiation, settlement, prosecution or defense of any claim, demand or petition on behalf of any member of the Group arising in connection with the business of any member of the Group for an amount not exceeding US$1,000,000 or its equivalent, including the pursuit by any member of the Group of any rights of indemnification or reimbursement;

(h) providing assistance in negotiating loan and credit terms with lenders and monitoring and administration of compliance with any applicable financing terms and conditions in effect with investors, banks or other financial institutions;

(i) assisting with arranging board meetings, director accommodation and travel for board meetings and preparing meeting materials and detailed papers and agendas for scheduled meetings of the Board of Directors or the board of directors of any other member of the Group (and any and all committees thereof) that, where applicable, contain such information as is reasonably available to the Manager to enable the Board of Directors or such other board of directors (and any such committees) to base their opinion;

(j) preparing or causing to be prepared reports to be considered by the Board of Directors (or any applicable committee thereof) in accordance with the Parent’s internal policies and procedures on any acquisition, investment or sale of any part of the business;

(k) administering payroll services, benefits and director’s or consultant’s fees, as applicable, for any employee, officer, consultant or director of the Group;

(l) handling general and administrative expenses of the Parent, which are related to its operation as public company and, upon being placed by the Parent in funds in accordance with the terms of this Agreement, arranging for the payment of the same;

(m) either directly or, at the Parent’s cost, through a third party service provider (such as by appointing lawyers), handling all administrative and clerical matters in respect of (i) the calling and arrangement of all annual and/or special meetings of shareholders of the

Parent, (ii) the preparation of all materials (including notices of meetings and information circulars) in respect thereof and (iii) the submission of all such materials to the Parent in sufficient time prior to the dates upon which they must be mailed, filed or otherwise relied upon so that the Parent has full opportunity to review, approve, execute and return them to the Manager for filing or mailing or other disposition as the Parent may require or direct;

(n) providing, at the request and under the direction of the Parent, such communications to the transfer agent for the Parent as may be necessary or desirable;

(o) assisting the Parent in establishing and maintaining a system of internal controls sufficient to satisfy applicable regulatory requirements;

(p) providing the Group with office accommodation, office staff (including secretarial and administrative assistance), facilities and stationery;

(q) maintaining, at the Parent’s cost, the Parent’s and each other member’s of the Group corporate existence, qualification and good standing in all necessary jurisdictions and assisting in all other corporate and regulatory compliance requirements;

(r) at the Parent’s cost, assisting in all corporate and regulatory compliance requirements for incorporating a new entity that will be owned (inter alios) by a member of the Group and/or for dissolving any member of the Group, in all necessary jurisdictions;

(s) at the request of the Parent, negotiating the terms and thereafter arranging for cash management services and/or hedging arrangements, in each case with a third party provider at the cost of the Parent;

(t) at the request of the Parent, monitoring the performance of investment managers; and

(u) providing any such other administrative services as the Parent, the Executive Officers or any other representative of the Parent may request and the Manager may agree to provide from time to time.

ARTICLE VI

COMMERCIAL SERVICES

SECTION 6.1. In addition to any commercial services provided under clause 3.3 of each Shipmanagement Agreement, the Manager shall provide the following commercial services to the Group:

(a) performing class records review and physical inspections in respect of any vessel considered for purchase by a member of the Group;

(b) at the request and under the direction of the Parent, providing administrative services in connection with the purchase of a second-hand vessel or the acquisition and sale of a Newbuild, in either case by any member of the Group, including, if specifically instructed by the Parent in writing, signing any agreed form of memorandum of agreement, shipbuilding contract or other similar contract for and on behalf of the relevant member of the Group;

(c) managing relationships between the Parent and any existing or potential charterers, shipbuilders, insurers, lenders, investors, fund managers, shareholders and other shipping industry service providers/participants; and

(d) at the request of the Parent, providing certain services in connection with a member of the Group taking physical delivery of a vessel, registering a vessel under a ship register, tendering physical delivery of a Vessel or deleting a Vessel from the applicable port of registry, in each case on behalf of the relevant member of the Group.

ARTICLE VII

INSURANCE

SECTION 7.1. In addition to any insurance requirements provided in clause 3.4 of each Shipmanagement Agreement, the Manager shall:

(a) arrange either directly or, through insurance brokers appointed by the Manager, Directors & Officers’ liability insurance for the Board of Directors with such insurance companies, at such rates and otherwise on such other terms as the Parent shall have instructed and/or agreed upon;

(b) on request, provide the Parent with a copy of any insurance claims and any reports prepared by the relevant insurers; and

(c) subject to having been placed in funds on time by the Parent, take commercially reasonable care to cause all premiums on the Parent’s Directors & Officers’ liability insurance are paid in a timely fashion.

ARTICLE VIII

OFFICERS AND EMPLOYEES

SECTION 8.1. The Manager shall make available to the Parent all such officers, managers and employees, including any of the Executive Officers, that the Parent and the Manager agree shall be made available.

SECTION 8.2. The Executive Officers are entitled to direct the Manager to remove and replace any individual serving as an officer or any senior manager serving as head of a business unit, in either case, of any member of the Group, other than an Executive Officer, from such position. The Board of Directors, in its sole discretion, shall be entitled to direct the Manager to remove any individual made available to the Parent by the Manager serving as an Executive Officer from such position and to appoint such other individual to serve as successor as the Board of Directors shall approve. Furthermore, the Manager agrees that it will not remove any individuals serving as officers or senior managers of any member of the Group from their respective positions without the prior written consent of the Executive Officers (such consent not to be unreasonably withheld or unduly delayed) and, in the case of any Executive Officer, the Board of Directors. If any officer or senior manager who is made available to the Parent by the Manager resigns, is terminated or otherwise vacates his or her office, the Manager shall, as soon as practicable after acceptance of any resignation or after termination, use reasonable best efforts to identify suitable candidates for replacement of such officer.

SECTION 8.3. The Parent may employ directly any other officers, senior managers or employees as it may deem necessary that will not be subject to this Agreement.

SECTION 8.4. The Manager will report to the Parent and the Board of Directors through any one of the Executive Officers.

ARTICLE IX

MANAGEMENT FEES AND EXPENSES

SECTION 9.1. In consideration of the Manager providing the Services to the Group, the Parent shall pay the Manager the following fees (together, the “ Management Fees ” and, on a per Vessel basis, the “ Management Fee ”):

(a) subject to Sections 9.2 and 9.3, a fee of US$956 per day per Vessel, payable monthly in arrears (pro rated to reflect the actual number of days that the Parent (or any Subsidiary) owns or charters-in each Vessel during the applicable month), unless a Vessel is chartered-out to a third party on a bareboat charter basis, in which case the fee

payable to the Manager for such Vessel shall be, subject to Sections 9.2 and 9.3, US$478 per day, PROVIDED HOWEVER , that when in respect of certain services to a Vessel the Manager appoints a Submanager in accordance with Section 2.4 and such Submanager enters into a management agreement directly with the relevant member of the Group (the “ direct agreement ”), the fees payable by the Parent and/or such member of the Group under this Agreement and/or any relevant Shipmanagement Agreement in respect of such Vessel pursuant to Section 9.1(a) shall be US$956 per day, or as the case may be, US$478 per day minus, in each case, the fees per day payable by such member of the Group to such Submanager under the relevant direct agreement in respect of such Vessel;

(b) a fee equal to 0.75% calculated on the aggregate of the gross freight, demurrage, charter hire, ballast bonus or other income obtained for the employment of each Vessel during the term of this Agreement, payable to the Manager monthly in arrears, only to the extent such freight, demurrage, charter hire, ballast bonus or other income, as the case may be, is received as revenue;

(c) subject to Sections 9.2 and 9.3, a fee of US$787,405 per Newbuild under construction for the services rendered by the Manager under the Supervision Agreement in respect of such Newbuild, payable in accordance with the terms of such Supervision Agreement; and

(d) an annual fee payable to the Manager (or its designee) quarterly in arrears of (i) US$2,500,000 payable in cash and (ii) 598,400 validly issued, fully paid and nonassessable shares of the common stock of Parent par value $0.0001 per share (the “ Shares ”) payable in kind, PROVIDED HOWEVER, that Manager is aware and acknowledges that there are limitations and restrictions on the circumstances under which it may offer to sell, transfer or otherwise dispose of the Shares to be acquired by it including certain restrictions on transfer under the applicable securities laws.

The fee payable to the Manager pursuant to clause (d) above will be effective as of January 1, 2015.

SECTION 9.2. The Management Fees will be fixed for the period commencing on the date of this Agreement and ending on December 31, 2015 (the “ Fixed Period ”) and shall not be subject to adjustment for Euro/U.S. Dollar exchange rate fluctuations or inflation. For the 12-month period starting on January 1, 2016 and for each subsequent 12-month period falling thereafter (each such 12-month period referred to hereinafter as an “ Annual Period ”), the Management Fee for each Vessel payable pursuant to Section 9.1(a) or Section 9.1(c) will be adjusted pursuant to Section 9.3.

SECTION 9.3. The Management Fees for each Vessel payable pursuant to Section 9.1(a) or Section 9.1(c), for the Annual Period commencing on the day falling immediately after the end of the Fixed Period and each subsequent Annual Period thereafter, will, in each case, be further adjusted upwards with effect from the beginning of such Annual Period if:

(a) the average of the Euro/U.S. Dollar exchange rates during the 12-month period ending on the last day of the month of September falling before the commencement date of such Annual Period (such average being the average over the applicable period, as calculated by the Manager from the Euro Foreign Exchange Reference Rate published daily at 15:00 CET by the European Central Bank on www.ecb.int) evidence that the Euro has strengthened against the U.S. Dollar by more than five per cent (5%) from:

(i) in the case of the first Annual Period starting on the day falling immediately after the end of the Fixed Period, the rate existing on the business day immediately prior to the date of this Agreement, and

(ii) in the case of each subsequent Annual Period, the previous Euro/U.S. Dollar average calculated for the purposes of this Section 9.3 in respect of the immediately previous Annual Period,

by the average percentage amount by which the Euro has in each such case so strengthened against the U.S. Dollar; and/or

(b) the Manager has incurred a material unforeseen increase in the cost of providing the Services, by an amount to be agreed between the Manager and the Parent, each acting in a commercially reasonable manner.

SECTION 9.4. The Manager shall, subject to Section 9.5, pay for all usual office expenses incurred by it as the Manager.

SECTION 9.5. The Parent hereby acknowledges that any capital expenditure, financial costs, operating expenses for each Vessel and any general and administrative expenses of the Group whatsoever are not covered by the Management Fees and any such expenditure, costs and expenses shall be paid fully by the Parent or the applicable member of the Group, whether directly to third parties (which for the avoidance of doubt shall include any Submanager) or by payment to such third parties through the Manager and, without prejudice to Section 10.8, to the extent incurred by the Manager, shall be reimbursed to it by the Parent and/or any member of the Group the Manager seeks, in its discretion, reimbursement from. The said capital expenditure, financial costs, operating expenses for each Vessel and general and administrative expenses of the Group include, without limiting the generality of the foregoing, items such as:

(a) fees, interest, principal and any other costs due to the Group’s financiers and their respective advisors;

(b) all voyage expenses and vessel operating and maintenance expenses relating to the operation and management of the Vessels (including Crew costs, surveyor’s attendance fees, bunkers, lubricant oils, spares, survey fees, classification society fees, maintenance and repair costs, vetting expenses, etc.);

(c) any commissions, fees, remuneration or disbursements due to lawyers, brokers, agents, surveyors, consultants, financial advisors, investment bankers, insurance advisors or any other third parties whatsoever appointed by the Manager whether in its name or on behalf and/or in the name of any member of the Group;

(d) any commissions, fees, remuneration or disbursements due to lawyers, brokers, agents, surveyors, consultants, financial advisors, investment bankers, insurance advisors or any other third parties (other than, if applicable, a Related Manager) whatsoever sub-contracted to the Manager in the normal and reasonable course of meeting the Manager’s duties and obligations under this Agreement or any Shipmanagement Agreement or any Supervision Agreement including the duties provided in Articles V, VI and VII of this Agreement;

(e) applicable deductibles, insurance premiums (including Directors & Officers’ liability insurance) and/or P&I calls;

(f) compensation expenses for employees who are not provided by the Manager pursuant to Section 8.1;

(g) postage, communication, traveling, lodging, victualling, overtime, out of office compensation and out of pocket expenses of the Manager and/or its personnel, incurred in pursuance of the Services; and

(h) any other out of pocket expenses that are incurred by the Manager in the performance of the Services pursuant to this Agreement, any Supervision Agreement or any Shipmanagement Agreement.

SECTION 9.6. The Manager shall have the right to demand the Management Fee payable in relation to each Vessel from either the Parent or the Shipowning Subsidiary owning such Vessel under the terms of the relevant Shipmanagement Agreement. By written notice to the Parent, the Manager may direct the Parent to pay any amounts owing by the Manager to any Submanager pursuant to a subcontract of any provisions of this Agreement or any Shipmanagement Agreement or any Supervision Agreement, directly to the relevant Submanager.

SECTION 9.7. In the event that a Shipmanagement Agreement is terminated, other than by reason of default by the Managers, the Management Fee

payable to the Manager under Section 9.1(a) for the Vessel subject to such Shipmanagement Agreement shall be payable in respect of such Vessel for a further period of three months from the termination date. The fees payable for the said three months shall be paid in one lump sum in advance on the termination of the relevant Shipmanagement Agreement. In addition the relevant member of the Group shall pay any Severance Costs (as such term is defined in the relevant Shipmanagement Agreement) for the relevant Vessel which may materialize.

SECTION 9.8. Notwithstanding (a) any contrary provision of Section 9.1 of this Agreement and (b) the m.v. Rena becoming a constructive total loss, the fees set out in Section 9.1 shall continue to be payable with respect to the m.v. Rena until the termination of the Rena Shipmanagement Agreement.

ARTICLE X

BUDGETS, CORPORATE PLANNING AND EXPENSES

SECTION 10.1. On or before October 1 of each calendar year, the Manager shall prepare and submit to the Executive Officers a detailed draft budget for the next calendar year in a format acceptable to the Executive Officers and the Board of Directors and generally used by the Manager which shall include a statement of estimated revenue and out-of-pocket expenses in providing the Services (the “ Draft Budget ”).

SECTION 10.2. For a period of 20 days after receipt of the Draft Budget, the Executive Officers, from time to time, may request further details and submit written comments on the Draft Budget. If the Executive Officers do not agree with any item of the Draft Budget, they will, within the same 20-day period, give the Manager notice of any inquiries to the Draft Budget, which notice will include the list of items under consideration (the “ Questioned Items ”) and a proposal for the resolution of each such Questioned Item. The Executive Officers and the Manager will endeavor to resolve any such differences between them with respect to the Questioned Items, failing which the relevant Questioned Items shall be left as presented by the Manager. If the Executive Officers do not present any Questioned Items within such 20-day period, they will be deemed to have accepted the Draft Budget and, such Draft Budget, shall be deemed to be the Approved Budget (as defined in Section 10.3 below).

SECTION 10.3. By November 15 of the relevant calendar year (or such later date as the Manager and the Board of Directors deem appropriate), and to the extent that changes are required to the Draft Budget pursuant to Section 10.2, the Manager will prepare and deliver to the Parent a revised budget that has been approved by the Executive Officers (the “ Approved Budget ”). However, the Parent acknowledges that the Approved Budget is only an estimate of the performance of the Vessels and/or the Group and the Manager makes no assurance, representation or warranty that the actual performance of the Vessels and/or the Group in any relevant calendar year will correspond to the estimates contained in the Approved Budget for that calendar year. Notwithstanding the provisions of Section 10.2 and this Section 10.3, the Approved

Budget for the 2015 calendar year shall be the 2015 revised budget that has been previously approved by the Executive Officers pursuant to the Original Agreement.

SECTION 10.4. The Manager may, from time to time, in any calendar year propose amendments to the Approved Budget upon 15 days notice to the Parent, in which event the Executive Officers will have the right to approve the amendments in accordance with the process set out in Section 10.2 with the relevant time periods being amended accordingly.

SECTION 10.5. Once the Approved Budget has been delivered, the Manager shall prepare and present to the Parent its estimate of the working capital requirements of the Vessels and the Group and the Manager shall each month update this estimate. Based thereon, the Manager shall each month make a request to the Parent and/or, as the case may be, the relevant members of the Group, in writing for the funds required to provide the Services to the Group and to operate each Vessel for the ensuing month, including the payment of any occasional or extraordinary item of expenditure, such as emergency repair costs, additional insurance premiums, bunkers or provisions. The Manager may also make a request in writing to the Parent and/or, as the case may be, the relevant members of the Group, at any time for funds required for the payment of any occasional or extraordinary item of expenditure, such as emergency repair costs, additional insurance premiums, bunkers or provisions. Such funds shall be received by the Manager within ten calendar days after the receipt by the Parent or, as the case may be, the relevant member of the Group of the Manager’s written request and shall be held in a separate bank account in the name of the Manager or, if requested by the Manager, in the name of the Parent or of the relevant member of the Group.

At the end of each quarter or, if the Manager from time to time so requires, month, the Manager shall preliminarily reconcile the amounts advanced to it by the Parent or, as the case may be, the relevant member of the Group, with the amounts actually expended by it for the operation of each of the Vessels and/or the Group, and (a) the Manager shall remit to the Parent, or credit to the Parent amounts to be advanced to it hereunder for future months, any unused portion of the amounts previously advanced by the Parent or, as the case may be, the relevant member of the Group, or (b) the Parent shall pay to the Manager any amounts properly expended by the Manager in excess of the amounts previously advanced by the Parent or, as the case may be, the relevant member of the Group. The Parent and the Manager shall reconcile any amounts due to the Parent by the Manager or due to the Manager by the Parent for each fiscal year of the Parent as promptly as practicable following the close of each such fiscal year. Without prejudice to Section 10.8, any expenses incurred by the Manager under the terms of this Agreement on behalf of any member of the Group may be debited against the account of the respective member of the Group, but shall in any event remain payable by the Parent and the relevant member of the Group to the Manager on demand.

SECTION 10.6. The Manager shall also maintain the records of all costs and expenses incurred, including any invoices, receipts and supplementary materials as are necessary or proper for the settlement of accounts.

SECTION 10.7. Insofar as any moneys are collected from third parties by the Manager under the terms of this Agreement, any Shipmanagement Agreement and/or any Supervision Agreement (other than moneys payable by a member of the Group to the Manager), such moneys and any interest thereon shall be held to the credit of the relevant member of the Group in a separate bank account in the name thereof. Interest on any such bank account shall be for the benefit of the relevant member of the Group.

SECTION 10.8. Notwithstanding anything contained herein to the contrary, the Manager shall in no circumstances be required to use or commit its own funds to finance the provision of the Services.

SECTION 10.9. To the extent that a Related Manager has been appointed in accordance with the terms of Section 2.4, it is agreed by the Parent and the Manager for the benefit of such Related Manager that the provisions of Article X shall apply to such Related Manager as if such provisions were repeated herein, but with references to:

(a) the “Manager” being deemed as references to the relevant Related Manager;

(b) the “Services” being deemed as references to the services to be performed by such Related Manager under the relevant management agreement;

(c) the “Vessels” being deemed as references to the Vessels being managed by such Related Manager under a management agreement entered into directly with the relevant Group members;

(d) the “Parent” being deemed as references to the relevant Group members; and

(e) references to “this Agreement, any Shipmanagement Agreement and/or any Supervision Agreement” being deemed as references to any management agreement signed by such Related Manager directly with the relevant Group members.

ARTICLE XI

LIABILITY AND INDEMNITY

SECTION 11.1. Save for the obligation of the Parent to pay any moneys due to the Manager hereunder, neither any member of the Group nor the Manager shall be under any liability to the other for any failure to perform any of their obligations hereunder by reason of Force Majeure. “ Force Majeure ” shall mean any cause whatsoever of any nature or kind beyond the reasonable control of the relevant member of the Group or the Manager, including, without limitation, acts of God, acts of civil or military authorities, acts of war or public enemy, acts of any court, regulatory agency or administrative body having jurisdiction, insurrections, riots, strikes or other labor disturbances, embargoes or other causes of a similar nature.

SECTION 11.2. The Manager, including its officers, directors, employees, shareholders, agents, sub-contractors and any Submanager (the “ Manager Related Parties ”) shall be under no liability whatsoever to any member of the Group or to any third party (including the Crew) for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect (including but not limited to loss of profit arising out of or in connection with detention of or delay to a Vessel), and howsoever arising in the course of the performance of this Agreement, any Shipmanagement Agreement or any Supervision Agreement, unless and to the extent that the same is proved to have resulted solely from the gross negligence or willful misconduct of the Manager, its officers, employees, agents, sub-contractors or any Submanager.

SECTION 11.3. Notwithstanding anything that may appear to the contrary in this Agreement or any Shipmanagement Agreement, the Manager shall not be liable for any of the actions of the Crew, even if such actions are negligent, grossly negligent or willful, except only to the extent that they are shown to have resulted from a failure by the Manager to discharge its obligations under clause 3.1 of each Shipmanagement Agreement, in which case the Manager’s liability shall be limited in accordance with the terms of this Article XI.

SECTION 11.4. The Parent shall indemnify and hold harmless the Manager Related Parties against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of this Agreement, any Shipmanagement Agreement or any Supervision Agreement and against and in respect of any loss, damage, delay or expense of whatsoever nature (including legal costs and expenses on a full indemnity basis), whether direct or indirect, incurred or suffered by any Manager Related Party arising out of or in connection with the performance of this Agreement, any Shipmanagement Agreement and any Supervision Agreement, unless incurred or suffered due to the gross negligence or willful misconduct of any Manager Related Party.

SECTION 11.5. It is hereby expressly agreed that no employee or agent of the Manager (including any sub-contractor from time to time employed by the Manager) shall in any circumstances whatsoever be under any liability whatsoever to any member of the Group or any third party for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in connection with his employment or agency and, without prejudice to the generality of the foregoing provisions in this Article XI, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defense and immunity of whatsoever nature applicable to the Manager or to which the Manager is entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Manager acting as aforesaid, and for the purpose of all the foregoing provisions of this Article XI, the Manager is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be the Manager’s servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be

parties to this Agreement. Nothing in this Section 11.5 shall be construed so as to further limit any liability the Manager may have to the Group under Section 11.2.

SECTION 11.6. The provisions of this Article XI shall survive any termination of this Agreement.

ARTICLE XII

RIGHTS OF THE MANAGER AND RESTRICTIONS ON THE MANAGER’S AUTHORITY

SECTION 12.1. Except as may be provided in this Agreement or in any separate written agreement between the Parent or any other member of the Group and the Manager or a Submanager, the Manager and any Submanager shall be an independent contractor and not the agent of the Parent or any other member of the Group and shall have no right or authority to incur any obligation on behalf of any member of the Group or to bind any member of the Group in any way whatsoever. Nothing in this Agreement shall be deemed to make the Manager or any Submanager or any of their subsidiaries or employees an employee, joint venturer or partner of any member of the Group.

SECTION 12.2. The Parent acknowledges that the Manager or, as the case may be, any Submanager shall have no responsibility hereunder, direct or indirect, with regard to the formulation of the business plans, policies, management or strategies (financial, tax, legal or otherwise) of any member of the Group, which is solely the responsibility of each respective member of the Group. Each member of the Group shall set its corporate policies independently through its respective board of directors and executive officers and nothing contained herein shall be construed to relieve such directors or officers of each respective member of the Group from the performance of their duties or to limit the exercise of their powers.

SECTION 12.3. Notwithstanding the other provisions of this Agreement:

(a) the Manager or, as the case may be, any Submanager may act with respect to a member of the Group upon any advice, resolutions, requests, instructions, recommendations, direction or information obtained from such member of the Group or any banker, accountant, broker, lawyer or other person acting as agent of or adviser to such member of the Group and the Manager or, as the case may be, the relevant Submanager shall incur no liability to such member of the Group for anything done or omitted or suffered in good faith in reliance upon such advice, instruction, resolution, recommendation, direction or information made or given by such member of the Group or its agents, in the absence of gross negligence or willful misconduct by the Manager or, as the case may be, the relevant Submanager or their respective servants, and shall not be responsible for any misconduct, mistake, oversight, error of judgment, neglect, default, omission, forgetfulness or

want of prudence on the part of any such banker, accountant, broker, lawyer, agent or adviser or other person as aforesaid;

(b) the Manager or, as the case may be, a Submanager shall not be under any obligation to carry out any request, resolution, instruction, direction or recommendation of any member of the Group or its agents if the performance thereof is or would be illegal or unlawful; and

(c) the Manager or, as the case may be, the relevant Submanager shall incur no liability to any member of the Group for doing or failing to do any act or thing which it shall be required to do or perform or forebear from doing or performing by reason of any provision of any law or any regulation or resolution made pursuant thereto or any decision, order or judgment of any court or any lawful request, announcement or similar action of any person or body exercising or purporting to exercise the legitimate authority of any government or of any central or local governmental institution in each case where the above entity has jurisdiction.

ARTICLE XIII

TERMINATION OF THIS AGREEMENT

SECTION 13.1. This Agreement shall be effective as of the Effective Date and, subject to Sections 13.2, 13.3, 13.4 and 13.5, shall continue until December 31, 2015 (the “ Initial Term ”). Thereafter the term of this Agreement shall be extended on a year-to-year basis for up to ten times (each a “ Subsequent Term ”) unless the Parent, at least 12 months prior to the end of the then current term, gives written notice to the Manager that it wishes to terminate this Agreement at the end of the then current term. In no event will the term of this Agreement (the “ Term ”) extend beyond the date falling ten years after the last day of the Initial Term.

SECTION 13.2. The Parent shall be entitled to terminate this Agreement by notice in writing to the Manager if:

(a) the Manager defaults in the performance of any material obligation under this Agreement, subject to a cure right of 20 Business Days following written notice by the Parent, PROVIDED ALWAYS , that any default of the Manager to perform any of its obligations under a particular Shipmanagement Agreement or any Supervision Agreement, shall not, in itself, entitle the Parent to terminate this Agreement pursuant to this Section 13.2(a) and shall only allow the relevant member of the Group to terminate the relevant Shipmanagement Agreement or Supervision Agreement;

(b) any moneys due and payable to the Parent or third parties by the Manager under this Agreement is not paid or accounted for within 10 Business Days following written notice by the Parent;

(d) the Manager is convicted of, enters a plea of guilty or nolo contendere with respect to, or enters into a plea bargain or settlement admitting guilt for a crime (including, for the avoidance of doubt, fraud), which conviction, plea bargain or settlement is demonstrably and materially injurious to the Parent, PROVIDED ALWAYS , such crime is not a misdemeanor and PROVIDED ALWAYS further that such crime has been committed solely and directly by an officer or director of the Manager acting within the terms of its employment or office.

SECTION 13.3. The Manager shall be entitled to terminate this Agreement by notice in writing to the Parent if:

(a) any moneys payable by the Parent under this Agreement is not paid when due or if due on demand within 20 Business Days following demand by the Manager;

(b) the Parent defaults in the performance of any other material obligations under this Agreement, subject to a cure right of 20 Business Days following written notice by the Manager; or

SECTION 13.4. Either party shall be entitled to terminate this Agreement by notice in writing to the other party if:

(a) the other party ceases to conduct business, or all or substantially all of the equity-interests, properties or assets of such other party are sold, seized or appropriated which, in the case of seizure or appropriation, is not discharged within 20 Business Days;

(b) (i) the other party files a petition under any bankruptcy law, makes an assignment for the benefit of its creditors, seeks relief under any law for the protection of debtors or adopts a plan of liquidation; (ii) a petition is filed against the other party seeking to have it declared insolvent or bankrupt and such petition is not dismissed or stayed within 90 Business Days of its filing; (iii) the other party shall admit in writing its insolvency or its inability to pay its debts as they mature; (iv) an order is made for the appointment of a liquidator, manager, receiver or trustee of the other party of all or a substantial part of its assets; (v) if an encumbrancer takes possession of or a receiver or trustee is appointed over the whole or a substantial part of the other party’s undertaking,

property or assets; or (vi) if an order is made or a resolution is passed for the other party’s winding up;

(c) the other party is prevented from performing its obligations hereunder, in any material respect, by reasons of Force Majeure for a period of two or more consecutive months; or

(d) all Supervision Agreements and all Shipmanagement Agreements are terminated in accordance with the respective terms thereof.

SECTION 13.5. Upon the effective date of termination pursuant to this Article XIII, the Manager shall promptly terminate its service hereunder, after taking reasonable commercial steps to minimize any interruption to the business of the members of the Group.

SECTION 13.6. Upon termination, the Manager shall, as promptly as possible, submit a final accounting of funds received and disbursed under this Agreement, any Supervision Agreement and/or any Shipmanagement Agreement and of any remaining Management Fees and/or any other funds due from the Parent or any other member of the Group, calculated pro rata to the date of termination, and any non-disbursed funds of any member of the Group in the Manager’s possession or control will be paid by the Manager as directed by such member of the Group promptly upon the Manager’s receipt of all sums then due to it under this Agreement, any Supervision Agreement and/or any Management Agreement, if any.

SECTION 13.7. Upon termination of this Agreement, the Manager shall release to the Parent the originals where possible, or otherwise certified copies, of all such accounts and all documents specifically relating to each Vessel or the provision of the Services.

SECTION 13.8. Upon termination of this Agreement either by the Manager for any reason (other than pursuant to Section 13.4(c)) or by the Parent pursuant to Section 13.1, the Parent shall be liable to pay to the Manager as liquidated damages an amount in U.S. Dollars equal to the lesser of (a) ten times and (b) the number of full years remaining prior to the date falling ten years after the last day of the Initial Term times, in each case, the aggregate fees due and payable to the Manager under the terms of this Agreement during the 12-month period ending on the date of termination of this Agreement (without taking into account any reduction to the fees payable to the Manager under Section 9.1(a) in the event that a Submanager has been appointed as provided therein), PROVIDED ALWAYS, that the amount of liquidated damages payable thereunder shall never be less than two times the aggregate fees due and payable to the Manager under the terms of this Agreement during the 12-month period ending on the date of termination of this Agreement.

SECTION 13.9. The provisions of this Article XIII shall survive any termination of this Agreement.

ARTICLE XIV

NOTICES

SECTION 14.1. All notices, consents and other communications hereunder, or necessary to exercise any rights granted hereunder, shall be in writing, sent either by prepaid registered mail or telefax, and will be validly given if delivered on a Business Day to an individual at the following address:

Costamare Inc.

60 Zephyrou Street & Syngrou Avenue

Palaio Faliro, Athens, Greece

Telefax: +30 210 9406454

Attention: CEO

Costamare Shipping Company S.A.

60 Zephyrou Street & Syngrou

Avenue, Palaio Faliro, Athens, Greece

Telefax: +30 210 9409081

Attention: General Manager

ARTICLE XV

APPLICABLE LAW

SECTION 15.1. This Agreement and any non-contractual obligations connected with it shall be governed by, and construed in accordance with, the laws of England.

SECTION 15.2. Except for Sections 2.3, 3.5, 9.5 and 9.6 and Articles XI and XII which can be relied by a Submanager (other than V.Ships) and Sections 2.3, 3.5, 9.5, 9.6 and 10.9 and Articles XI and XII which can be relied by a Related Manager, no other term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.

ARTICLE XVI

ARBITRATION

SECTION 16.1. All disputes arising out of this Agreement and/or any non-contractual obligations connected with it shall be arbitrated in London in the following manner. One arbitrator is to be appointed by each of the parties hereto and a third by the two so chosen. Their decision or that of any two of them shall be final. The arbitrators shall be commercial persons, conversant with shipping matters. Such arbitration is to be conducted in accordance with the London Maritime Arbitration Association (LMAA) Terms current at the time when the arbitration proceedings are

commenced and in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof.

SECTION 16.2. In the event that a party hereto shall state a dispute and designate an arbitrator in writing, the other party shall have 10 Business Days to designate its own arbitrator. If such other party fails to designate its own arbitrator within such period, the arbitrator appointed by the first party can render an award hereunder.

SECTION 16.3. Until such time as the arbitrators finally close the hearings, either party shall have the right by written notice served on the arbitrators and on the other party to specify further disputes or differences under this Agreement for hearing and determination.

SECTION 16.4. The arbitrators may grant any relief, and render an award, which they or a majority of them deem just and equitable and within the scope of this Agreement, including but not limited to the posting of security. Awards pursuant to this Article XVI may include costs and judgments may be entered upon any award made herein in any court having jurisdiction.

ARTICLE XVII

MISCELLANEOUS

SECTION 17.1. This Agreement constitutes the sole understanding and agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements or understandings, written or oral, with respect thereto. This Agreement may not be amended, waived or discharged except by an instrument in writing executed by the party against whom enforcement of such amendment, waiver or discharge is sought.

SECTION 17.2. During the term hereof, the Manager will not provide services hereunder through, or otherwise cause any member of the Group to have, an office or fixed place of business in the United States.

SECTION 17.3. This Agreement may be executed in one or more written counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

IN WITNESS WHEREOF the undersigned have executed this Agreement as of the date first above written.

	COSTAMARE INC.

	by:
		/s/ Konstantinos Konstantakopoulos
		Name: Konstantinos Konstantakopoulos
		Title: CEO

	COSTAMARE SHIPPING COMPANY
	S.A.

	by:
		/s/ Diamantis Manos
		Name: Diamantis Manos
		Title: Director

SCHEDULE A

SHIPOWNING SUBSIDIARIES

1.	Achilleas Maritime Corporation

2.	Adele Shipping Co.

3.	Alexia Transport Corp.

4.	Angistri Corporation

5.	Bastian Shipping Co.

6.	Bullow Investments Inc.

7.	Cadence Shipping Co.

8.	Cagney Shipping Co.

9.	Capetanissa Maritime Corporation

10.	Caravokyra Maritime Corporation

11.	Christos Maritime Corporation

12.	Costachille Maritime Corporation

13.	Costis Maritime Corporation

14.	Dino Shipping Co.

15.	Edith Shipping Co.

16.	Fanakos Maritime Corporation

17.	Fastsailing Maritime Co.

18.	Fay Shipping Co.

19.	Finch Shipping Co.

20.	Flow Shipping Co.

21.	Haley Shipping Co.

22.	Idris Shipping Co.

23.	Jodie Shipping Co.

24.	Joyner Carriers S.A.

25.	Kalamata Shipping Corporation

26.	Kayley Shipping Co.

27.	Kelsen Shipping Co.

28.	Lang Shipping Co.

29.	Leroy Shipping Co.

30.	Lindner Shipping Co.

31.	Madelia Shipping Co.

32.	Mansel Shipping Co.

33.	Marathos Shipping Co.

34.	Marina Maritime Corporation

35.	Mas Shipping Co.

36.	Merten Shipping Co.

37.	Miko Shipping Co.

38.	Montes Shipping Co.

39.	Navarino Maritime Corporation

40.	Nicky Shipping Co.

41.	Odette Shipping Co.

42.	Percy Shipping Co.

43.	Quentin Shipping Co.

44.	Raymond Shipping Co.

45.	Rena Maritime Corporation

46.	Sander Shipping Co.

47.	Takoulis Maritime Corporation

48.	Timpson Shipping Co.

49.	Terance Shipping Co.

50.	Undine Shipping Co.

51.	Uriza Shipping Co.

52.	Valli Shipping Co.

53.	Virna Shipping Co.

54.	Waldo Shipping Co.

55.	Spedding Shipping Co.

SCHEDULE B

NON-SHIPOWNING SUBSIDIARIES

1.	Brookes Shipping Co.

2.	Burton Shipping Co.

3.	Convey Shipping Co.

4.	Cornas Shipping Co.

5.	Daina Shipping Co.

6.	Davies Shipping Co.

7.	Denor Shipping Co.

8.	Dome Shipping Co.

9.	Douro Shipping Co.

10.	Erin Shipping Co.

11.	Gavin Shipping Co.

12.	Grappa Shipping Co.

13.	Guildmore Navigation S.A.

14.	Honaker Shipping Company

15.	Idea Shipping Co.

16.	Lege Shipping Co.

17.	Lytton Shipping Co.

18.	Mabel Shipping Co.

19.	Marvista Shipping Co.

20.	Mera Shipping Co.

21.	Merin Shipping Co.

22.	Nigel Shipping Co.

23.	Ray Shipping Co.

24.	Ronda Shipping Co.

25.	Royce Shipping Co.

26.	Sea Elf Maritime Inc

27.	Sims Shipping Co.

28.	Simone Shipping Co.

29.	Venor Shipping Co.

30.	Volk Shipping Co.

31.	Warrick Shipping Co.

32.	West End Shipping Co. Ltd.

PART II
“SHIPMAN 98” Standard Ship Management Agreement

APPENDIX I

FORM OF SHIP MANAGEMENT AGREEMENT

1.	Date of Agreement [to be dated the date of execution]		THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO) STANDARD SHIP MANAGEMENT AGREEMENT CODE NAME: “SHIPMAN 98”
			Part I
2.	Owners (name, place of registered office and law of registry) ( Cl. 1 )	3.	Managers (name, place of registered office and law of registry) ( Cl. 1 )

	Name		Name
	[name of relevant member of the Group]		Costamare Shipping Company S.A.
	Place of registered office		Place of registered office
	[to be completed]		Panama City, Republic of Panama
	Law of registry		Law of registry
	[to be completed]		Republic of Panama
4.	Day and year of commencement of Agreement ( Cl. 2 ) [to be completed on execution]
5.	Crew Management (state “yes” or “no” as agreed) ( CI. 3.1 ) YES	6.	Technical Management (state “yes” or “no” as agreed) ( Cl. 3.2 ) YES
7.	Commercial Management (state “yes” or “no” as agreed) ( Cl. 3.3 ) YES	8.	Insurance Arrangements (state “yes” or “no” as agreed) ( Cl. 3.4 ) YES
9.	Accounting Services (state “yes” or “no” as agreed) ( Cl. 3.5 ) YES	10.	Sale or purchase of the Vessel (state “yes” or “no” as agreed) ( Cl. 3.6 ) YES
11.	Provisions (state “yes” or “no” as agreed) ( Cl. 3.7 ) YES	12.	Bunkering (state “yes” or “no” as agreed) ( Cl. 3.8 ) YES
13.	Chartering Services Period (only to be filled in if “yes” stated in Box 7) ( Cl. 3.3(i) ) 36 months (including any optional extensions applicable) and with a gross daily rate (or time charter equivalent) of US$[ ]	14.	Owners’ Insurance (state alternative ( i ), ( ii ) or ( iii ) of Cl. 6.3 ) Clause 6.3(ii)
15.	~~Annual~~ Management Fee (state ~~annual~~ amount) ( Cl. 8.1 ) See Clause 8.1	16.	Severance Costs (state maximum amount) ( Cl. 8.4(ii ) not applicable
17.	Day and year of termination of Agreement ( Cl. 17 ) see Clause 17	18.	Law and Arbitration (state alternative 19.1 , 19.2 or 19.3 ; if 19.3 place of arbitration must be stated) (Cl. 19) see Clause 19.1
19.	Notices (state postal ~~and-cable~~ -address ~~, telex~~ and telefax number for serving notice and communication to the Owners) ( Cl. 20 ) c/o Costamare Inc. 60 Zephyrou Street & Syngrou Avenue Athens, Greece Telefax: + 30 210 940 6454 Attention: Chief Executive Officer	20.	Notices (state postal ~~and cable~~ address ~~, telex~~ and telefax number for serving notice and communication to the Managers) ( Cl. 20 ) 60 Zephyrou Street & Syngrou Avenue Athens, Greece Telefax: +30 210 940 9051 Attention: Chief Executive Officer

It is mutually agreed between the party stated in Box 2 and the party stated in Box 3 that this Agreement consisting of PART I and PART II as well as Annexes “A” (Details of Vessel ~~), “B” (Details of Crew),~~ ~~“C” (Budget) and “D” (Associated vessels)~~ attached hereto, shall be performed subject to the conditions contained herein. In the event of a conflict of conditions, the provisions of PART I and Annexes “A” ~~, “B” , “C” and “D”~~ shall prevail over those of PART II to the extent of such conflict but no further. .

Signature(s) (Owners)

[name of relevant member of the Group]

Signature(s) (Managers)

COSTAMARE SHIPPING COMPANY S.A.

PART II
“SHIPMAN 98” Standard Ship Management Agreement

1.	Definitions	1

	In this Agreement save where the context otherwise requires,	2
	the following words and expressions shall have the meanings	3

	hereby assigned to them.	4
	“ Owners ” means the party identified in Box 2 .	5
	“ Managers ” means the party identified in Box 3 .	6
	“ Vessel ” means the vessel or vessels details of which are set out	7
	in Annex “A” attached hereto.	8
	“Business Day” shall have the same meaning as ascribed thereto
	In Section 1.2 of the Group Management Agreement.	8
	*“ Crew* ” means the Master, officers and ratings employed on the**	9
	Vessel from time to time ~~of the numbers,~~
	~~rank and nationally specified in Annex “B”~~ ~~attached hereto~~ .	10
	~~“Crew support Code” means all expenses of a general nature~~	11
	~~which are not particularly referable to any individual vessel for~~	12
	~~the time being managed by the Managers and which are incurred~~	13
	~~by the Managers for the purpose of providing an efficient and~~	14
	~~economic management service and, without prejudice to the~~	15
	~~generality of the foregoing, shall include the cost of crew standby~~	16
	~~pay, training schemes for officers and ratings, cadet training~~	17
	~~schemes, sick pay, study pay, recruitment and interviews.~~	18
	*“Related Manager” shall have the meaning as ascribed thereto*	19
	*in Section 1.2 of the Group Management Agreement.*
	“ Severance Costs ” means the costs which the employers are
	legally obliged to pay to or in respect of the Crew as a result of	20
	the early termination of any employment contract for service on	21
	the Vessel.	22
	“ Crew Insurances ” means insurances against crew risks which	23
	shall include but not be limited to death, sickness, repatriation,	24
	injury, shipwreck unemployment indemnity and loss of personal	25
	effects.	26
	“Group Management Agreement” means the agreement dated 3 November 2010 as amended and restated [ ] March 2015
	made between the Parent and the Managers.
	“ Management Services ” means the services specified in sub-	27
	clauses 3.1 to 3.8 as indicated affirmatively in Boxes 5 to 12 .	28
	“ ISM Code ” means the International Management Code for the	29
	Safe Operation of Ships and for Pollution Prevention as adopted	30
	by the International Maritime Organization (IMO) by resolution	31
	A.741(18) or any subsequent amendment thereto.	32

	“ISPS Code” means the International Ship and Port Facility.
	Security Code constituted pursuant to resolution A.924(22) of
	the International Maritime Organisation now set out in Chapter
	XI-2 of the International Convention for the Safety of Life at Sea
	(SOLAS) 1974 (as amended) and the mandatory ISPS Code as
	adopted by a Diplomatic Conference of the International
	Maritime Organisation on Maritime Security in December 2002
	and includes any amendments or extensions to it and any
	regulation issued pursuant to it.
	“Parent” means Costamare Inc. of Trust Company Complex,
	Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall
	Islands MH96960.
	“ STCW 95 ” means the International Convention on Standards	33
	of Training, Certification and Watchkeeping for Seafarers, 1978,	34
	as amended in 1995 or any subsequent amendment thereto.	35


2.	Appointment of Managers	36

	With effect from the day and year stated in Box 4 and continuing	37
	unless and until terminated as provided herein, the Owners	38
	hereby appoint the Managers as the technical and commercial	39
	managers of the Vessel and the Managers hereby agree
	to act as the technical and commercial M managers of the Vessel.	40

3.	Basis of Agreement

	Subject to the terms and conditions herein provided, during the	42
	period of this Agreement, the Managers shall carry out	43
	Management Services in respect of the Vessel as agents for	44
	and on behalf of the Owners. Subject to Section 4.6 of the Group	45
	Management Agreement, T t he Managers shall have authority

practice.		49


3.1 Crew Management		50

(only applicable if agreed according to Box 5 )		51
The Managers shall provide suitably qualified Crew for the Vessel		52
as required by the Owners in accordance with the STCW 95		53
requirements, provision of which includes but is not limited to		54
the following functions:		55
(i)	selecting and engaging the Vessel’s Crew, including payroll	56
	arrangements, pension administration, and insurances for	57
	the Crew other than those mentioned in Clause 6 ;	58
(ii)	ensuring that the applicable requirements of the law of the	58
	flag of the Vessel are satisfied in respect of manning levels,	60
	rank, qualification and certification of the Crew and	61
	employment regulations including Crew’s tax, social	62
	insurance, discipline and other requirements;	63
(iii)	ensuring that all members of the Crew have passed a medical	64
	examination with a qualified doctor certifying that they are fit	65
	for the duties for which they are engaged and are in possession	66
	of valid medical certificates issued in accordance with	67
	appropriate flag State requirements. In the absence of	68
	applicable flag State requirements the medical certificate shall	69
	be dated not more than three months prior to the respective	70
	Crew members leaving their country of domicile and	71
	maintained for the duration of their service on board the Vessel;	72
(iv)	ensuring that the Crew shall have a command of the English	73
	language of a sufficient standard to enable them to perform	74
	their duties safely;	75
(v)	arranging transportation of the Crew, including	76
repatriation, board and lodging as and when required at rates and
types of accommodations as customary in the industry;
(vi)	training of the Crew and supervising their efficiency;	77

(vii)	keeping and maintaining full and complete records of any	78
labor agreements which may be entered into with the Crew and,
if applicable, conducting union negotiations;
(viii)	operating the Managers’ drug and alcohol policy unless	79
	otherwise agreed in writing.	80

3.2 Technical Management		81

(only applicable if agreed according to Box 6 )		82
The Managers shall provide technical management which		83
includes, but is not limited to, the following functions:		84
(i)	provision of competent personnel to supervise the	85
	maintenance and general efficiency of the Vessel;	86
(ii)	arrangement and supervision of dry dockings, repairs,	87
	alterations and the upkeep of the Vessel to the standards	88
	required by the Owners provided that the Managers shall	89
	be entitled to incur the necessary expenditure to ensure	90
	that the Vessel will comply with the law of the flag of the	91
	Vessel and of the places where she trades, and all	92
	requirements and recommendations of the classification	93
	society;	94
(iii)	arrangement of the supply of necessary stores, spares and	95
	lubricating oil;	96
(iv)	appointment of surveyors and technical consultants as the	97

	Managers may consider from time to time to be necessary;	98

(v)	development, implementation and maintenance of a Safety	99
	Management System (SMS) in accordance with the ISM	100
	Code (see sub-clauses 4.2 and 5.3 ) and of a security system in	101
	accordance with the ISPS Code;
	(vi) handling any claims against the builder of the Vessel
	arising out of the relevant shipbuilding contract,
	if applicable; and

	(vii) on request by the Owners, providing the Owners with a
	copy of any inspection report, survey, valuation or any other
	similar report prepared by any shipbrokers, surveyors, the
	Class etc..

PART II
“SHIPMAN 98” Standard Ship Management Agreement

	to take such actions as they may from time to time in their absolute	46

	discretion consider to be necessary to enable them to perform	47
	this Agreement in accordance with sound ship management	48

3.3 Commercial Management	102

(only applicable if agreed according to Box 7 )	103
The Managers shall provide the commercial operation of the	104

PART II
“SHIPMAN 98” Standard Ship Management Agreement

	Vessel,- ~~as-required-by-the-Owners,~~ which includes, but is not		105
	limited to, the following functions:		106
	(1)	providing chartering services ~~in-accordance with the Owners’~~	107
		~~institutions~~ which include, but are not limited to, seeking	108
		and negotiating employment for the Vessel and the conclusion	109
		(including the execution thereof) of charter parties or other	110
		contracts relating to the employment of the Vessel, whether on a	111
		voyage, time, demise, contract of affreightment or other
		basis. If such a
		contract exceeds the period and is for a rate that is less than	112
		the rate, in either case, stated in Box 13 , consent thereto
		in writing shall first be obtained from the Owners.	113
	(ii)	arranging of the proper payment to Owners or their nominees	114
		of all hire and/or freight revenues or other moneys of	115
		whatsoever nature to which Owners may be entitled arising	116
		out of the employment of or otherwise in connection with the	117
		Vessel; .	118
	(iii)	providing voyage estimates and accounts and calculating of	119
		hire, freights, demurrage and/or dispatch moneys due from	120
		or due to the charterers of the Vessel;	121
	(iv)	issuing to the Crew of appropriate voyage instructions and	122
	monitoring voyage performance;
	(v)	appointing agents;	123
	(vi)	appointing stevedores;	124
	(vii)	arranging surveys associated with the commercial operation	125
		of the Vessel;	126
		(viii) carrying out the necessary communications with the
		shippers, charterers and others involved with the receiving
		and handling of the Vessel at the relevant loading and
		discharging ports, including sending any notices required
		under the terms of the Vessel’s employment at the time;
		(ix) invoicing on behalf of the Owners all freights, hires,
		demurrages, outgoing claims, refund of taxes, balances of
		disbursements, statements of account and other sums due
		to the Owners and account receivables arising from the
		operation of the Vessel and, upon the request of the Owners,
		issuing releases on behalf of the Owners upon receipt of
		payment or settlement of any such amounts;
		(x) preparing off-hire statements and/or hire statements;
		(xi) procuring and arranging for port entrance and clearance,
		pilots, consular approvals and other services necessary for
		the management and safe operation of the Vessel; and
		(xii) reporting to the Owners of any major casualties,
		damages received or caused by the Vessel or any major
		release or discharge of oil or other hazardous material not in
		compliance with any laws.
3.4 Insurance Arrangements’			127
( only applicable if agreed according to Box 8 )			128
The Managers shall arrange insurances in accordance with			129
Clause 6, on such terms and conditions as the Owners shall			130
have instructed or agreed, in particular regarding underwriters			131
conditions,
insured values, deductibles and franchises.			132

3.5 Accounting Services			133
( only applicable if agreed according to Box 9 )			134
Without prejudice to the relevant provisions of the Group			135
Management Agreement and, in particular, but without
limitation, Section 4.11, Section 5.1 and Section 10.6 thereof,
T the Managers shall:
(I)	establish an accounting system which meets the		136
	requirements of the Owners and provide regular accounting		137
	services, supply regular reports and records,		138
(ii)	maintain the records of all costs and expenditure incurred		139
	as well as data necessary or proper for the settlement of		140
	accounts between the parties.		141

3.6 Sale or Purchase of the Vessel			142
( only applicable if agreed according to Box 10 )			143
The Managers shall, in accordance with the Owners’ instructions,			144
supervise the sale or purchase of the Vessel, including the			145
performance of any sale or purchase agreement, but not			146

	negotiation of the same. The Managers shall, on the request of		147
	the Owners, either directly or by employing the services of a
	broker, endeavor to procure a buyer for the Vessel at a price
	and otherwise on terms acceptable to the Owners.
	3.7 Provisions ( only applicable if agreed according to Box 11 )		148
	The Managers shall arrange for the supply of provisions.		149

	3.8 Bunkering ( only applicable if agreed according to Box 12 )		150
	The Managers shall arrange for the provision of bunker fuel of the		151
	quality specified by the Owners as required for the Vessel’s trade.		152

4.	Managers’ Obligations		153
	4.1 Without prejudice to the relevant provisions of the Group		154
	Management Agreement and in particular, but without limitation
	to the foregoing, the provisions of Section 2.3, Section 4.1,
	Section 4.5 and Section 4.7 thereof, the Managers undertake to
	use their ~~best-endeavors~~ commercially reasonable efforts to
	provide the agreed Management Services as agents for and on		155
	behalf of the Owners in accordance with sound ship management		156
	practice and to protect and promote the interests of the Owners in		157
	all matters relating to the provision of services hereunder.		158
	Provided, however, that the Managers in the performance of their		159
	management responsibilities under this Agreement shall be entitled		160
	to have regard to their overall responsibility in relation to all vessels		161
	as may from time to time be entrusted to their management and		162
	in particular, but without prejudice to the generality of the foregoing,		163
	the Managers shall be entitled to allocate available supplies,		164
	manpower and services in such manner as in the prevailing		165
	circumstances the Managers in their absolute discretion consider		166
	to be fair and reasonable.		167
	4.2 Where the Managers are providing Technical Management		168
	in accordance with sub-clause 3.2 , they shall procure that the		169
	requirements of the law of the flag of the Vessel are satisfied and		170
	they shall in particular be deemed to be the “Company’ as defined		171
	by the ISM Code, assuming the responsibility for the operation of		172
	the Vessel and taking over the duties and responsibilities imposed		173
	by the ISM Code and/or the ISPS Code when applicable.		174



5.	Owners’ Obligations		175
	5.1 Without prejudice to the relevant provisions of the Group		176
	Management Agreement, T the Owners shall pay all sums due to
	the Managers punctually
	in accordance with the terms of this Agreement.		177
	5.2 Where the Managers are providing Technical Management		178
	in accordance with sub-clause 3.2 , the Owners shall:		179
	(i)	procure that all officers and ratings supplied by them or on	180
		their behalf comply with the requirements of STCW 95;	181
	(ii)	instruct such officers and ratings to obey all reasonable orders	182
		of the Managers in connection with the operation of the	183
		Managers’ safety management system.	184
	5.3 Where the Managers are not providing Technical Management		185
	in accordance with sub-clause 3.2 , the Owners shall procure that		186
	the requirements of the law of the flag of the Vessel are satisfied		187
	and that they, or such other entity as may be appointed by them		188
	and identified to the Managers, shall be deemed to be the		189
	“Company” as defined by the ISM Code assuming the responsibility		190
	for the operation of the Vessel and taking over the duties and		191
	responsibilities imposed by the ISM Code when applicable.		192



6.	Insurance Policies		193
	The Owners shall procure, ~~whether-~~ by instructing the Managers		194
	under sub-clause 3.4 ~~or otherwise~~ , that throughout the period of		195
	this Agreement:		196
	6.1 at the Owners’ expense, the Vessel is insured for not less		197
	than her sound market value or entered for her full gross tonnage,		198
	as the case may be for:		199
	(i)	usual hull and machinery marine risks (including crew	200
		negligence) and excess liabilities;	201
	(ii)	protection and indemnity risks (including pollution risks and	202

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“SHIPMAN 98” Standard Ship Management Agreement

		Crew insurances); ~~and~~	203
	(iii)	war risks (including protection and indemnity and crew risks);	204
	and
	(iv)	any other insurance that the Owners determine or the
	Managers advise them in writing that, in either case, it is
	prudent or, as the case may be, appropriate on the basis of
	prevailing market practices to be obtained in respect of the
	Vessel, its freight/hire or any third party liabilities,

	in each case in accordance with the best practice of prudent owners		205
	of
	vessels of a similar type to the Vessel, with first crass insurance		206
	companies, underwriters or associations (“the Owners’		207
	Insurances”);		208
	6.2 all premiums and calls and applicable deductibles and/or		209
	franchises on the Owners’ Insurances are paid
	promptly by their due date,		210
	6.3 the Owners’ Insurances name the Managers and, subject		211
	to underwriters’ agreement, any third party designated by the		212
	Managers as a joint assured, with full cover, with the Owners		213
	obtaining cover in respect of each of the insurances specified in		214
	sub-clause 6.1 :		215
	(i)	on terms whereby the Managers and any such third party	216
		are liable in respect of premiums or calls arising in connection	217
		with the Owners’ Insurances; or	218
	(ii)	if reasonably obtainable, on terms such that neither the	219
		Managers nor any such third party shall be under any	220
		liability in respect of premiums or calls arising in connection	221
		with the Owners’ Insurances; or	222
	(iii) on such other terms as may be agreed in writing.		223
	Indicate alternative (i), (ii) or (iii) in Box 14 . If Box 14 is left		224
	blank then (i) applies.		225
	6.4 written evidence is provided, to the reasonable satisfaction		226
	of the Managers, of their compliance with their obligations under		227
	Clause 6 within a reasonable time of the commencement of		228
	the Agreement, and of each renewal date and, If specifically		229
	requested, of each payment date of the Owners’ Insurances,		230

7.	Income Collected and Expenses Paid on Behalf of Owners		231
	7.1 Without prejudice to the provisions of Section 10.7 of the		232
	Group Management Agreement, A all moneys collected by the
	Managers under the terms of
	this Agreement (other than moneys payable by the Owners to		233
	the Managers) and any interest thereon shall be held to the		234
	credit of the Owners in a separate bank account.		235
	7.2 Without prejudice to the provisions of Section 9.7, Section		236
	10.5 and Section 10.8 of the Group Management Agreement, A all
	expenses incurred by the Managers under the terms
	of this Agreement on behalf of the Owners (including expenses		237
	as provided in Clause 8 ) may be debited against the Owners		238
	in the account referred to under sub-clause 7.1 but shall in any		239
	event remain payable by the Owners to the Managers on		240
	demand. For the avoidance of doubt, the Managers can make		241
	such demand on the Owners as well as on the Parent as
	provided in Section 10.5 of the Group Management Agreement.
	Furthermore and without prejudice to the generality of the
	provisions of this Clause 7, the Managers shall, subject to being
	placed in funds by the Owners or the Parent, arrange for the
	payment of all ordinary charges incurred in connection with the
	Management Services, including, but not limited to, all canal
	tolls, port charges, any amounts due to any governmental
	authority with respect to the Crew and all duties and taxes in
	respect of the Vessel, the cargo, hire or freight (whether levied
	against the Owners, the Parent or the Vessel), insurance
	premiums, advances of balances of disbursements, invoices for
	bunkers, stores, spares, provisions, repairs and any other
	material and/or service in respect of the Vessel.
8	Management Fee		242
	8.1 The Owners shall pay to the Managers for their services		243
	as Managers under this Agreement ~~an-annual~~ the management		244
	fees as stated in ~~Box 15~~ Section 9.1(a) and Section 9(b) of the		245
	Group Management Agreement -which shall be payable ~~by-equal~~
	~~monthly installments in advance, the first installment being~~ monthly		246

	in accordance with the provisions of Article IX of the Group
	Management Agreement.
	~~payable on the commencement of the Agreement (see Clause~~	247
	~~2 and Box 4 ) and subsequent installments being payable every~~	248
	~~month.~~	249
	8.2 The management fee shall be subject to ~~an annual~~ -review	250
	in accordance with the provisions of Sections 9.2 and 9.3 of the	251
	Group Management Agreement ~~the anniversary date of the~~
	~~Agreement and the proposed~~
	~~fee shall be presented in the annual budget referred to in sub-~~	252
	~~clause 9.1~~ .	253
	8.3 ~~The Managers shall, at no extra cost to the Owners, provide~~	254
	~~their own office accommodation, office staff, facilities and~~	255
	~~stationery.~~ Without limiting the generality of Clause 7 the Owners	256
	shall reimburse the Managers for postage and communication	257
	expenses, travelling expenses, and other out of pocket	258
	expenses properly incurred by the Managers in pursuance of	259
	the Management Services.	260
	8.4 The provisions of Section 9.4, Section 9.5, Section 9.6 and	261
	Section 9.7 of the Group Management Agreement shall be
	deemed as incorporated herein mutatis mutandis.
	8.5 The Managers have the right to demand the payment of any
	of the management fees and expenses payable under this
	Agreement either from the Parent or the Owners. Payment of
	any such fees or expenses or any part thereof by either the
	Parent or the Owners shall prevent the Managers from making a
	claim on the other person for the same amount to the extent
	that the same has been already paid to the Managers.
	~~in the event of the appointment of the Managers being~~
	~~terminated by the Owners of the Managers in accordance with~~	262
	~~the provisions of Clauses 17 and 18 other than by reason of~~	263
	~~default by the Managers, or if the Vessel is lost, sold or otherwise~~	264
	~~Disposed of, the “management fee” payable to the Managers~~	265
	~~According to the provisions of sub-clause 8.1 , shall continue to~~	266
	~~be payable for a further period of three calendar months as~~	267
	~~from the termination date. In addition, provided that the~~	268
	~~Managers provide Crew for the Vessel in accordance with sub-~~	269
	~~clause 3.1 .~~	270
	~~(i) the Owners shall continue to pay Crew Support Costs during~~	271
	~~the said further period of three calendar months and~~	272
	~~(ii) the Owners shall pay an equitable proportion of any~~	273
	~~Severance Costs which may materialize, not exceeding~~	274
	~~the amount stated in Box 16 .~~	275
	~~8.5~~ ~~If the Owners decide to lay up the Vessel whilst this~~	276
	~~Agreement remain in force and such lay up lasts for more~~	277
	~~than three months, an appropriate reduction of the management~~	278
	~~fee for the period exceeding three months until one month~~	279
	~~before the Vessel is again put into service shall be mutually~~	280
	~~agreed between the parties.~~	281
	~~8.6~~ ~~Unless otherwise agreed in writing all discounts and~~	282
	~~commissions obtained by the Managers in the course of the~~	283
	~~management of the Vessel shall be credited to the Owners~~	284

9.	Budgets and Management of Funds	285
	9.1 The Owners are aware that the Managers will be preparing	286
	budgets in connection with, inter alia, the provision of the
	Management Services which the Managers will be submitting
	for approval to the Parent in accordance with the provisions of
	Article X of the Group Management Agreement. The Managers
	~~shall present to the Owners annually a~~
	~~budget for the following twelve months in such form as the~~	287
	~~Owners require. The budget for the first year hereof is set out~~	288
	~~in Annex “C” hereto. Subsequent annual budgets shall be~~	289
	~~prepared by the Managers and submitted to the Owners not~~	290
	~~less than three months before the anniversary date of the~~	291
	~~commencement of this Agreement (see Clause 2 and Box 4 ).~~	292
	~~9.2~~ ~~The Owners shall indicate to the Managers their acceptance~~	293
	~~and approval of the annual budget within one month of~~	294
	~~presentation and in the absence of any such indication the~~	295
	~~Managers shall be entitled to assume that the Owners have~~	296
	~~accepted the proposed budget.~~	297
	~~9.3~~ ~~Following the agreement of the budget, the Managers shall~~	298

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“SHIPMAN 98” Standard Ship Management Agreement

~~prepare and present to the Owners their estimate of the working~~		299
~~capital requirement of the Vessel and the Managers shall each~~		300
~~month up date this estimate. Based thereon,~~ Without prejudice to the right of the Managers to ask for funds in relation to the Management Services directly from the Parent in accordance with the relevant provisions of the Group Management Agreement, the Managers shall		301
each month request the Owners in writing for the funds required		302
to run the Vessel for the ensuing month, including the payment		303
of any occasional or extraordinary item of expenditure, such as		304
emergency repair costs, additional insurance premiums, bunkers		305
or provisions. Such funds shall be received by the Managers		306
within ten running days after the receipt by the Owners of the		307
Managers’ written request and shall be held ~~to the credit of the~~		308
~~Owners~~ in a separate bank account in the name of the Managers or, if requested by the Managers, in the name of the Owners.		309
~~9.4~~ ~~The Managers shall produce a comparison between~~		310
~~budgeted and actual income and expenditure of the Vessel in~~		311
~~such form as required by the Owners monthly or at such other~~		312
~~intervals as mutually agreed.~~		313
9.5 Notwithstanding anything contained herein to the contrary,		314
the Managers shall in no circumstances be required to use or		315
commit their own funds to finance the provision of the		316
Management Services.		317

10.	Managers’ Right to Sub-Contract	318
	Except to a Related Manager or V.Ships Greece Ltd. (where the Manager may subcontract any of their obligations hereunder, without need of obtaining the Owners’ consent for doing so), T the Managers shall not have the right to sub-contract any of	319
	their obligations hereunder, including those mentioned in sub-	320
	clause 3.1 , without the prior written consent of the Owners which	321
	shall not be unreasonably withheld and which shall be promptly responded to. In the event of such a sub-	322
	contract the Managers shall remain fully liable for the due	323
	performance of their obligations under this Agreement	324

11.	Responsibilities	325
		326
	The parties agree that the provisions of Sections 11.1 to 11.5 (inclusive) of the Group Management Agreement, shall apply to this Agreement mutatis mutandis, save that references therein to “any Shipmanagement Agreement or any Supervision Agreement” shall be omitted and references to “Parent-, “any member of the Group”, “Manager”, “any Submanager”, “a Vessel”, “Section”, “Management Fees”, “each Shipmanagement Agreement”, “Group” and “Article Xl” shall be construed as references to the Owners, the Owners, the Managers, any submanager, the Vessel, Clause, management fee, this Agreement, the Owners and Clause 11, respectively, when used herein.

	11.1 Force Majeure ~~- Neither the Owners nor the Managers~~
	~~shall be under any liability for any failure to perform any of their~~	327
	~~obligations hereunder by reason of any cause whatsoever of~~	328
	~~any nature or kind beyond their reasonable control~~	329
	11.2 Liability to Owners ~~– (i) Without prejudice to sub-clause~~	330
	~~11.1, the Managers shall be under no liability whatsoever to the~~	331
	~~Owners for any loss, damage, delay or expense of whatsoever~~	332
	~~nature, whether direct or indirect, (including but not limited to~~	333
	~~loss of profit arising out of or in connection with detention of or~~	334
	~~delay to the Vessel) and howsoever arising in the course of~~	335
	~~performance of the Management Services UNLESS same is~~	336
	~~proved to have resulted solely from the negligence, gross~~	337
	~~negligence or wilful default of the Managers or their employees,~~	338
	~~or agents or sub-contractors employed by them in connection~~	339
	~~with the Vessel, in which case (save where loss, damage, delay~~	340
	~~or expense has resulted from the Managers’ personal act or~~	341
	~~omission committed with the intent to cause same or recklessly~~	342
	~~and with knowledge that such loss, damage, delay or expense~~	343
	~~would probably result) the Managers’ liability for each incident~~	344
	~~or series of incidents giving rise to a claim or claims shall never~~	345

	~~Exceed a total of ten times the annual management fee payable~~	346
	~~hereunder,~~	347
	~~(ii) Notwithstanding anything that may appear to the contrary in~~	348
	~~this Agreement, the Managers shall not be liable for any of the~~	349
	~~actions of the Crew, even if such actions are negligent, grossly~~	350
	~~negligent or wilful, except only to the extent that they are shown~~	351
	~~to have resulted from a failure by the Managers to discharge~~	352
	~~their obligations under sub clause~~ ~~3.1~~ ~~, in which case their liability~~	353
	~~shall be limited in accordance with the terms of this~~ ~~Clause 11~~ .	354
	11.3 Indemnity ~~– Except to the extent and solely for the amount~~	355
	~~therein set out that the Managers would be liable under sub-~~	356
	~~clause~~ ~~11.2~~ ~~, the Owners hereby undertake to keep the Managers~~	357
	~~and their employees, agents and sub-contractors indemnified~~	358
	~~and to hold them harmless against all actions, proceedings,~~	359
	~~claims, demands or liabilities whatsoever or howsoever arising~~	360
	~~which may be brought against them or incurred or suffered by~~	361
	~~them arising out of or in connection with the performance of the~~	362
	~~Agreement, and against and in respect of all costs, losses,~~	363
	~~damages and expenses including legal costs and expenses on~~	364
	~~a full indemnity basis) which the Managers may suffer or incur~~	365
	~~(either directly or indirectly) in the course of the performance of~~	366
	~~this Agreement.~~	367
	11.4 “Himalaya” ~~– It is hereby expressly agreed that no~~	368
	~~employee or agent of the Managers (including every sub-~~	369
	~~contractor from time to time employed by the Managers) shall in~~	370
	~~Any circumstances whatsoever be under any liability whatsoever~~	371
	~~to the Owners for any loss, damage or delay of whatsoever kind~~	372
	~~arising or resulting directly or indirectly from any act, neglect or~~	373
	~~default on his part while acting in the course of or in connection~~	374
	~~with his employment and, without prejudice to the generality of~~	375
	~~the foregoing provisions in this~~ ~~Clause 11~~ ~~, every exemption,~~	376
	~~limitation, condition and liberty herein contained and every right,~~	377
	~~exemption from liability, defence and immunity of whatsoever~~	378
	~~nature applicable to the Managers or to which the Managers are~~	379
	~~entitled hereunder shall also be available and shall extend to~~	380
	~~protest every such employee or agent of the Managers acting~~	381
	~~as aforesaid and for the purpose of all the foregoing provisions~~	382
	~~of this~~ ~~Clause 11~~ ~~the Managers are or shall be deemed to be~~	383
	~~acting as agent or trustee on behalf of and for the benefit of all~~	384
	~~persons who are or might be their servants or agents from time~~	385
	~~to time (including sub-contractors as aforesaid) and all such~~	386
	~~persons shall to this extent be or be deemed to be parties to this~~	387
	~~Agreement.~~	388

12.	Documentation	389
	Without prejudice to the relevant provisions of the Group Management Agreement, W where the Managers are providing Technical Management in	390
	accordance with sub-clause 3.2 and/or Crew Management in	391
	accordance with sub-clause 3.1 , they shall make available,	392
	upon Owners’ request, all documentation and records related	393
	to the Safety Management System (SMS) and/or the Crew	394
	which the Owners need in order to demonstrate compliance	395
	with the ISM Code, the ISPS Code and STCW 95 or to defend a claim against	396
	a third party.	397

13.	General Administration	398
	13.1 Without prejudice to the provisions of Article V of the Group Management Agreement, but subject to the provisions of Section 4.6 of the Group Management Agreement, T the Managers shall handle and settle all claims arising	399
	out of the Management Services hereunder and keep the Owners	400
	informed regarding any incident of which the Managers become	401
	aware which gives or may give rise to material claims or disputes involving	402
	third parties.	403
	13.2 The Managers shall, as instructed by the Owners under this Agreement and/or, as the case may be, Section 4.6 of the Group Management Agreement, bring	404
	or defend actions, suits or proceedings in connection with matters	405
	entrusted to the Managers according to this Agreement.	406

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“SHIPMAN 98” Standard Ship Management Agreement

	13.3 The Managers shall also have power to obtain legal or			407
	technical or other outside expert advice in relation to the handling			408
	and settlement of claims and disputes or all other matters			409
	effecting the interests of the Owners in respect of the Vessel.			410
	13.4 The Owners shall arrange for the provision of any			411
	necessary guarantee bond or other security.			412
	13.5 Any costs ~~reasonably~~ -incurred by the Managers in			413
	carrying out their obligations according to Clause 13 shall be			414
	reimbursed by the Owners.			415

14.	Auditing			416
	The Managers shall at all times maintain and keep true and			417
	correct accounts and shall make the same available for inspection			418
	and auditing by the Owners at such times as may be mutually			419
	agreed. On the termination, for whatever reasons, of this			420
	Agreement, the Managers shall release to the Owners, if so			421
	requested, the originals where possible, or otherwise certified			422
	copies, of all such accounts and all documents specifically relating			423
	to the Vessel and her operation. For the avoidance of any doubt,			424
	this Clause is in addition to and not in substitution of the
	relevant provisions of the Group Management Agreement ,.
15.	Inspection of Vessel			425
	The Owners shall have the right at any time after giving			426
	reasonable notice to the Managers to inspect the Vessel for any			427
	reason they consider necessary.			428

16.	Compliance with Laws and Regulations			429
	The Managers will not do or permit to be done anything which			430
	might cause any breach or infringement of the laws and			431
	regulations of the Vessel’s flag, or of the places where she trades.			432

17.	Duration of the Agreement			433
	This Agreement shall come into effect on the day and year stated			434
	in Box 4 and shall continue until the date the Group Management			435
	Agreement is terminated in accordance with the provisions of
	Article XIII thereof, unless this Agreement is terminated earlier
	in accordance with the provision of Clause 18 hereof ~~the date~~
	~~stated in~~ ~~Box 17~~ .
	~~Thereafter it shall continue until terminated by either party giving~~			436
	~~to the other notice in writing, in which event the Agreement shall~~			437
	~~terminate upon the expiration of a period of two months from the~~			438
	~~date upon which such notice was given.~~			439

18.	Termination			440
	18.1 *Owners’ default*			441
	(i)	The Managers shall be entitled to terminate the Agreement		442
		with immediate effect by notice in writing if any moneys		443
		payable by the Owners under this Agreement ~~and/or the~~		444
		~~owners of-any associated vessel, details of which are listed~~		445
		in ~~Annex “D”~~ , shall not have been received in the Managers’		446
		nominated account within ~~ten~~ 20 ~~running~~ Business d Days of		447
		receipt by
		the Owners of the Managers written request or if the Vessel		448
		is repossessed by the Mortgagees.		449
	(ii)	if the Owners:		450
		(a)	fall to meet their obligations under 5 sub-clauses 5.2	451
			and 5.3 of this Agreement for any reason within their	452
			control, or	453
		(b)	proceed with the employment of or continue to employ	454
			the Vessel in the carriage of contraband, blockade	455
			running, or in an unlawful trade, or on a voyage which	456
			in the reasonable opinion of the Managers is unduly	457
			hazardous or improper,	458
		the Managers may give notice of the default to the Owners,		459
		requiring them to remedy it as soon as practically possible.		460
		In the event that the Owners fall to remedy it within a		461
		~~reasonable time~~ 20 Business Days of receipt by the Owners		462
		of the Managers’ written request to the satisfaction of the
		Managers, the
		Managers shall be entitled to terminate the Agreement		463

		with immediate effect by notice In writing.	464
	18.2 Managers’ Default		465
	If the Managers fail to meet their obligations under Clauses 3		466
	and 4 of this Agreement for any reason within the control of the		467
	Managers, the Owners may give notice to the Managers of the		468
	default, requiring them to remedy it within 20 Business Days as		469
	~~soon as practically~~
	~~possible~~ . In the event that the Managers fail to remedy it within a		470
	~~Reasonable time~~ such period to the satisfaction of the Owners, the		471
	Owners
	shall be entitled to terminate the Agreement with immediate effect		472
	by notice in writing.		473
	18.3 Extraordinary Termination		474
	This Agreement shall be deemed to be terminated in the case of		475
	the sale of the Vessel or if the Vessel becomes a total loss or is		476
	declared as a constructive or compromised or arranged total		477
	loss or is requisitioned.		478
	18.4 For the purpose of sub-clause 18.3 hereof		479
	(i)	the date upon which the Vessel is to be treated as having	480
		been sold or otherwise disposed of shall be the date on	481
		which the Owners cease to be registered as Owners of	482
		the Vessel;	483
	(ii)	the Vessel shall not be deemed to be lost unless either	484
		she has become an actual total loss or agreement has	485
		been reached with her underwriters in respect of her	486
		constructive, compromised or arranged total loss or if such	487
		agreement with her underwriters is not reached it is	488
		adjudged by a competent tribunal that a constructive loss	489
		of the Vessel has occurred.	490
	18.5 The parties agree that the provisions of Sections 13.4(a) to		491
	13.4(d) (inclusive) of the Group Management Agreement, shall
	apply to this Agreement mutatis mutandis. ~~This agreement shall~~
	~~terminate forthwith in the event of~~
	~~an order being made or resolution passed for the winding up,~~		492
	~~dissolution, liquidation or bankruptcy of other party (otherwise~~		493
	~~than for the purpose of reconstruction or amalgamation) or if a~~		494
	~~receiver is appointed, or if it suspends payment, ceases to~~		495
	~~on business or makes any special arrangement or composition~~		496
	~~carry with its creditors.~~		497
	18.6 The termination of this Agreement shall be without		498
	prejudice to all rights accrued due between the parties prior to		496
	the date of termination.		500

19.	Law and Arbitration		501
	19.1 This Agreement and any non-contractual obligations		502
	connected with it shall be governed by and construed in
	accordance with English law. All disputes arising out of this		503
	Agreement and/or any non-contractual obligations connected
	with it shall be arbitrated in London in the following manner.
	One arbitrator is to be appointed by each of the parties hereto
	and a third by the two so chosen. Their decision or that of any
	two of them shall be final. The arbitrators shall be commercial
	persons, conversant with shipping matters. Such arbitration is
	to be conducted in accordance with the London Maritime
	Arbitration Association (LMAA) Terms current at the time when
	the arbitration proceedings are commenced and in accordance
	with the Arbitration Act 1996 or any statutory modification or re-
	enactment thereof. In the event that a party hereto shall state a
	dispute and designate an arbitrator in writing, the other party
	shall have 10 Business Days to designate its own arbitrator. If
	such other party fails to designate its own arbitrator within such
	period, the arbitrator appointed by the first party can render an
	award hereunder. Until such time as the arbitrators finally close
	the hearings, either party shall have the right by written notice
	served on the arbitrators and on the other party to specify
	further disputes or differences under this Agreement for hearing
	and determination. The arbitrators may grant any relief, and
	render an award, which they or a majority of them deem just and
	equitable and within the scope of this Agreement, including but
	not limited to the posting of security. Awards pursuant to this
	Clause 19.1 may include costs and judgments may be entered
	upon any award made herein in any court having jurisdiction.
	~~and any dispute arising out of or~~
	~~in connection with this Agreement shall be referred to arbitration~~		504

	~~in London in accordance with the Arbitration Act 1996 or~~	505
	~~any statutory modification or re-enactment thereof save to~~	506
	~~the extent necessary to give effect to the provisions of this~~	507
	~~Clause.~~	508
	~~The arbitration shall be conducted in accordance with the~~	509
	~~London Maritime Arbitrators Association (LMAA) Terms~~	510
	~~current at the time when the arbitration proceedings are~~	511
	~~commenced.~~	512
	~~The reference shall be to three arbitrators. A party wishing~~	513
	~~to refer a dispute to arbitration shall appoint its arbitrator~~	514
	~~and send notice of such appointment in writing to the other~~	515
	~~party requiring the other party to appoint its own arbitrator~~	516
	~~within 14 calendar days of that notice and stating that it will~~	517
	~~appoint its arbitrator as sole arbitrator unless the other party~~	518
	~~appoints its own arbitrator and gives notice that it has done~~	519
	~~so within the 14 days specified. If the other party does not~~	520
	~~appoint its own arbitrator and give notice that it has done so~~	521
	~~within the 14 days specified, the part referring a dispute to~~	522
	~~arbitration may, without the requirement of any further prior~~	523
	~~notice to the other party, appoint its arbitrator as sole~~	524
	~~arbitrator and shall advise the other party accordingly. The~~	525
	~~award of a sole arbitrator shall be binding on both parties~~	526
	~~as if he had been appointed by agreement.~~	527
	~~Nothing herein shall prevent the parties agreeing in writing~~	528
	~~to vary these provisions to provide for the appointment of a~~	529
	~~sole arbitrator.~~	530
	~~In cases where neither the claim nor any counterclaim~~	531
	~~exceeds the sum of USD50,000 (or such other sum as the~~	532
	~~parties may agree) the arbitration shall be conducted in~~	533
	~~accordance with the LMAA Small Claims Procedure current~~	534
	~~at the time when the arbitration proceedings are commenced.~~	535
	~~19.2~~ ~~This Agreement shall be governed by and construed~~	536
	~~in accordance with Title 9 of the United States code and~~	537
	~~the Maritime Law of the United States and any dispute~~	538

	~~arising out of or in connection with this Agreement shall be~~	539
	~~referred to three persons at New York, one to be appointed~~	540
	~~by each of the parties hereto, and the third by the two so~~	541
	~~chosen; their decision or that of any two of them shall be~~	542
	~~final, and for the purposes of enforcing any award,~~	543
	~~judgement may be entered on an award by any court of~~	544
	~~competent jurisdiction. The proceedings shall be conducted~~	545
	~~in accordance with the rules of the Society of Maritime~~	546
	~~Arbitrators, Inc.~~	547
	~~In cases where neither the claim nor any counterclaim~~	548
	~~exceeds the sum of USD50,000 (or such other sum as the~~	549
	~~parties may agree) the arbitration shall be conducted in~~	550
	~~accordance with the Shortened Arbitration Procedure of the~~	551
	~~Society of Maritime Arbitrators, Inc. current at the time when~~	552
	~~the arbitration proceedings are commenced.~~	553
	~~19.3~~ ~~This Agreement shall be governed by and construed~~	554
	~~in accordance with the laws of the place mutually agreed by~~	555
	~~the parties and any dispute arising out of or in connection~~	556
	~~with this Agreement shall be referred to arbitration at a~~	557
	~~mutually agreed place, subject to the procedures applicable~~	558
	~~there.~~	559
	19.4 If Box 18 in Part I is not appropriately filled in, sub-	560
	clause 19.1 of this Clause shall apply.	561

	Note: 19.1 , 19.2 and 19.3 are alternatives; indicate	562
	alternative agree in Box 18 .	563

20.	Notices	564
	20.1 Any notice to be given by either party to the other	565
	Party shall be in writing and may be sent by fax, ~~telex,~~	566
	Registered or recorded mail or by personal service.	567
	20.2 The address of the Parties for service of such	568
	communication shall be as stated in Boxes 19 and 20 ,	569
	respectively.	570

This document is a computer generated SHIPMAN 98 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no responsibility for any loss, damage or expense as a result of discrepancies between the original BIMCO approved document and the computer generated document.

APPENDIX II

FORM OF SUPERVISION AGREEMENT

THIS AGREEMENT is made the ____ day of , 20[ • ] BETWEEN:

(1)	[name of relevant member of the Group], a company incorporated under the laws of [•], whose registered office is [ADDRESS] (the “ Owner ”); and

(2)	COSTAMARE SHIPPING COMPANY S.A., a company incorporated under the laws of [•], whose registered office is at [ADDRESS] (the “ Construction Supervisor ”).

WHEREAS:

By a shipbuilding contract dated (the “ Shipbuilding Contract ”) and made between [•1 (the “ Builder ”) and the Owner, the Builder agreed to construct, to the order of the Owner, and sell to the Owner, a [•] container vessel, known during construction as Hull No.[•] (the “ Vessel ”);

IT IS NOW AGREED as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1. Except as otherwise defined herein, all terms defined in the Shipbuilding Contract shall have the same respective meanings when used herein.

SECTION 1.2. In this Agreement, unless the context otherwise requires, the following expressions shall have the following meanings:

“ Business Day ” means a day, other than a Saturday or Sunday or a public holiday, on which major retail banks in New York City and Athens Greece, and (in respect of any payments which are to be made to the Builder) [•], are open for non-automated customer services;

“ Group Management Agreement ” means the agreement dated [ ] 2010 made between the Parent and the Construction Supervisor.

“ Owner’s Supplies ” means all of the items to be furnished to the Vessel by the Owner in accordance the relevant provisions of the Shipbuilding Contract.

“ Parent ” means Costamare Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and includes its successors in title.

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“ Spares ” means the items to be designated as spares by the parties hereto at the time of the delivery of the Vessel.

“ Supervision Period ” means the period from the execution of this Agreement to and including the earlier of (i) the date of delivery of the Vessel pursuant to the Shipbuilding Contract and (ii) the date this Agreement is terminated.

ARTICLE II

APPOINTMENT

SECTION 2.1. The Owner hereby appoints the Construction Supervisor, and the Construction Supervisor hereby agrees to act as the Owner’s supervisor towards the Builder and as the “ Owner’s Representative ” under the Shipbuilding Contract for the duration of the Supervision Period and to perform the duties and rights which rest with the Owner regarding the construction and delivery of the Vessel in accordance with all of the provisions of the Shipbuilding Contract. The Owner shall be responsible for, inter alia, determining the general policy of supervision of construction of the Vessel and the scope of activities of the Construction Supervisor and, in the performance of its duties under this Agreement, the Construction Supervisor shall at all times act strictly in accordance with any instructions or directions given to it by the Owner regarding such general policy or, in the absence of such instructions or directions, in accordance with the standards of a prudent supervisor providing services of the type to be provided under this Agreement, having due regard to the Owner’s interest. Any instructions so given shall be consistent with the nature and scope of the supervision services required to be performed by the Construction Supervisor under this Agreement and shall not require the Construction Supervisor to do or omit to do anything which may be contrary to any applicable law of any jurisdiction or which is inconsistent or contrary to any of the rights and duties of the Owner under the Shipbuilding Contract. Upon appointment the Owner shall furnish the Construction Supervisor with a full and complete copy of the Shipbuilding Contract (which for the avoidance of doubt shall include the Specifications and the Plans).

SECTION 2.2. Specific Powers and Duties of the Construction Supervisor . Without prejudice to the generality of the appointment made under Section 2.1, and (where applicable) by way of addition to the rights, powers and duties so conferred, the Construction Supervisor shall, subject to this Section 2.2 and to Articles III and IV, have and be entrusted with the following rights, powers and duties in relation to the Shipbuilding Contract and the Vessel:

(a) to review, comment on, agree and approve the lists of plans and the drawings referred to; to attend the testing of the Vessel’s machinery, outfitting and equipment and to request any tests or inspections which the Construction Supervisor may consider appropriate or desirable and to review and comment on the results of all tests and inspections to the extent this is possible under the terms of the Shipbuilding Contract; to carry out such inspections and give such advice or suggestions to the Builder as the Construction Supervisor may consider

A-II- 2

appropriate and as the terms of the Shipbuilding Contract allow him to do; and to give notice to the Builder in the event that the Construction Supervisor discovers any construction, material or workmanship which the Construction Supervisor believes does not or will not conform to the requirements of the Shipbuilding Contract and the specifications again provided the terms of the Shipbuilding Contract allows for such notice to be given;

(b) to appoint a representative of the Construction Supervisor for the purposes specified under Article [•];

(c) if any alteration or addition to the Shipbuilding Contract becomes obligatory or desirable, to consult with the Builder and make recommendations to the Owner as to whether or not acceptance should be given to any proposal notified to the Owner by the Builder;

(d) to request and agree to any minor alterations, additions or modifications to the Vessel or the specifications and any substitute materials to the extent this is possible under the terms of the Shipbuilding Contract, which the Construction Supervisor may consider appropriate or desirable, provided that if the cost of such variations or substitute materials would have the effect of altering the Contract Price (as defined in the Shipbuilding Contract) by more than three per cent (3%) from the Contract Price on the date hereof or the amount of any of the installments of the Contract Price due under the Shipbuilding Contract prior to the delivery of the Vessel, the Construction Supervisor shall notify the same to the Owner in writing and obtain the Owner’s instructions before taking any action in relation thereto; to receive from and transmit to the Builder information relating to the requirements of the classification society and to give instructions and agree with the Builder regarding alterations, additions or changes in connection with such requirements; and to approve the substitution of materials as requested by the Builder;

(e) to attend and witness the trials of the Vessel to the extent this is possible under the terms of the Shipbuilding Contract;

(f) to determine whether the Vessel has been designed, constructed, equipped and completed in accordance with, and complies with, the Shipbuilding Contract and the Specifications and Plans (each as defined in the Shipbuilding Contract); to give the Builder a notice of acceptance or (as the case may be) rejection of the Vessel, to require or request any further test and inspection of the Vessel to the extent this is possible under the terms of the Shipbuilding Contract, and to give and receive any further or other notice relative to such matters and generally to advise the Owner in respect of all such matters;

(g) to sign on behalf of the Owner any protocols as to sea trials, consumable stores, delivery and acceptance or otherwise, having first ascertained with the Owner the appropriateness of so doing;

A-II- 3

(h) to accept on behalf of the Owner the documents specified in Article [•], Paragraph [•] of the Shipbuilding Contract to be delivered by the Builder at delivery of the Vessel under the Shipbuilding Contract and to confirm receipt thereof to the Owner;

(i) to give and receive on behalf of the Owner any notice contemplated by the Shipbuilding Contract, provided that the Construction Supervisor shall not have authority to give on behalf of the Owner any notice which the Owner may be entitled to give to cancel, repudiate or rescind the Shipbuilding Contract without the prior written consent of the Owner; and

(j) to purchase, after being placed in funds by the Owner, all Owner’s Supplies as agent of the Owner and supply and deliver the same together with all necessary specifications, plans, drawings, instruction books, manuals, test reports and certificates to the Builder as provided in the Shipbuilding Contract, and provide to the Owner a list of all such Owner’s Supplies as soon as possible.

SECTION 2.3. The Construction Supervisor shall discharge its responsibilities under this Clause 2 as the Owner’s agent.

SECTION 2.4. In the event that the Construction Supervisor uses own funds to purchase Owner’s Supplies, the cost of supplying and delivering Owner’s Supplies pursuant to relevant terms of the Shipbuilding Contract shall be reimbursed by the Owner to the Construction Supervisor on the date the Construction Supervisor submits to the Owner supporting invoices in respect of such cost.

ARTICLE III

CONSTRUCTION SUPERVISOR’S DUTIES
REGARDING CONSTRUCTION

SECTION 3.1. The Construction Supervisor undertakes with the Owner with respect to the Shipbuilding Contract:

(a) to notify the Owner in writing promptly on becoming aware of any likely change to any of the dates on which any installment under the Shipbuilding Contract is expected to be due;

(b) to (i) notify the Owner in writing of the expected date on which the launching or, as the case may be, sea trials of the Vessel is or are to take place and (ii) promptly on the same day as the launching or, as the case may be, sea trials of the Vessel takes or take place to confirm that the launching or, as the case may be, sea trials of the Vessel has or have taken place and, where relevant, that the amount specified in such confirmation is due and payable;

(c) to (i) advise the Owner in writing, four (4) Business Days prior to the date on which the delivery installment under the Shipbuilding Contract is anticipated to become due, of the times and amounts of payments to be made to

A-II- 4

the Builder under the Shipbuilding Contract and any amount due to the Construction Supervisor for Owner’s Supplies not already settled and (ii) promptly confirm the same on the day on which such installment becomes due (and being the date the same is required to be paid to the account referred to in the relevant term of the Shipbuilding Contract);

(d) not to accept the Vessel or delivery of the Vessel on the Owner’s behalf without the Owner’s prior written approval and unless the Construction Supervisor shall have previously certified to the Owner in writing, in the form of the certificate set out in Schedule 1 to this Agreement, that:

(i) the Vessel has been duly completed and is ready for delivery to and acceptance by the Owner in or substantially in accordance with the Shipbuilding Contract and the Specifications and Plans;

(ii) there is, to the best of the Construction Supervisor’s knowledge and belief having made due enquiry with the Builder, no lien or encumbrance on the Vessel other than the lien in favor of the Builder in respect of the delivery installment of the Contract Price due in accordance with the terms of the Shipbuilding Contract; and

(iii) the Vessel is recommended for classification by the relevant classification society provided for in the Shipbuilding Contract (and the Construction Supervisor shall attach to its certificate the provisional certificate of such classification society recommending such classification of the Vessel or a duplicate or photocopy of such provisional certificate or otherwise provide evidence of such classification to the Owner);

(e) on receipt thereof from the Builder promptly to deliver the documents specified in Article [•], Paragraph [•] of the Shipbuilding Contract to the Owner or as the Owner may direct; and

(f) solely with the prior written approval of the Owner, to request from or agree with the Builder any material alterations, additions or modifications to the Vessel.

ARTICLE IV

CONSTRUCTION SUPERVISOR’S GENERAL OBLIGATIONS

SECTION 4.1. The Construction Supervisor undertakes to the Owner, with respect to the exercise and performance of its rights, powers and duties as the Owner’s representative under this Agreement, as follows:

(a) it will exercise commercially reasonable efforts to cause the due and punctual observance and performance of all conditions, duties and obligations imposed on the Owner by the Shipbuilding Contract (other than to pay the Contract Price) and will not without the prior written consent of the Owner:

A-II- 5

(i) exercise any rights of the Owner to cancel, repudiate or rescind the Shipbuilding Contract;

(ii) waive, modify or suspend any provision of the Shipbuilding Contract if as a result of such waiver, modification or suspension the Owner will or may suffer any adverse consequences; and

(b) it will, at its own expense, keep all necessary and proper books, accounts, records and correspondence files relating to its duties and activities under this Agreement and shall send quarterly reports to the Owner concerning the progress of the design and construction of the Vessel and keep the Owner promptly informed of any deviations from the building program.

ARTICLE V

LIABILITY AND INDEMNITY

SECTION 5.1. Save for the obligation of the Owner to pay any moneys due to the Construction Supervisor hereunder, neither the Owner nor the Construction Supervisor shall be under any liability to the other for any failure to perform any of their obligations hereunder by reason of Force Majeure. “ Force Majeure ” shall mean any cause whatsoever of any nature or kind beyond the reasonable control of the Owner or the Construction Supervisor, including, without limitation, acts of God, acts of civil or military authorities, acts of war or public enemy, acts of any court, regulatory agency or administrative body having jurisdiction, insurrections, riots, strikes or other labor disturbances, embargoes or other causes of a similar nature.

SECTION 5.2. The Construction Supervisor, including its officers, directors, employees, shareholders, agents and any sub-contractors (the “ Construction Supervisor Related Parties ”), shall be under no liability whatsoever to the Owner or to any third party (including the Builder) for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect (including but not limited to loss of profit arising out of or in connection with the delayed or non-conforming delivery of the Vessel), and howsoever arising in the course of the performance of this Agreement, unless and to the extent that the same is proved to have resulted solely from the gross negligence or willful misconduct of the Construction Supervisor, its officers, employees, agents or any of its sub-contractors in which case (save where loss, damage, delay or expense, has resulted from the Construction Supervisor’s personal act or omission committed with the intent to cause same) the Construction Supervisor’s liability for each incident or series of incidents giving rise to claim or claims shall never exceed a total of ten times the fees payable hereunder.

SECTION 5.3. The Owner shall indemnify and hold harmless the Construction Supervisor Related Parties against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of this Agreement and against and in respect of any loss, damage, delay or expense of

A-II- 6

whatsoever nature (including legal costs and expenses on a full indemnity basis), whether direct or indirect, incurred or suffered by any Construction Supervisor Related Party in the performance of this Agreement, unless incurred or suffered due to the gross negligence or willful misconduct of any Construction Supervisor Related Party.

SECTION 5.4. It is hereby expressly agreed that no employee or agent of the Construction Supervisor (including any sub-contractor from time to time employed by the Construction Supervisor) shall in any circumstances whatsoever be under any liability whatsoever to the Owner or any third party for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Article V, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defense and immunity of whatsoever nature applicable to the Construction Supervisor or to which the Construction Supervisor is entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Construction Supervisor acting as aforesaid, and for the purpose of all the foregoing provisions of this Article V, the Construction Supervisor is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be their servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.

SECTION 5.5. The provisions of this Article V shall survive any termination of this Agreement.

ARTICLE VI

FEES

SECTION 6.1. In consideration of the performance of the duties assigned to the Construction Supervisor in this Agreement, the Owner shall pay to the Construction Supervisor the sum of US$787,405 for its total supervision costs in connection with the supervision of the construction of the Vessel, plus any expenses incurred under the Shipbuilding Contract against presentation of supporting invoices from the Construction Supervisor which the Construction Supervisor shall supply to the Owner at the same time as payment is requested. The fee payable hereunder to the Construction Supervisor shall include all costs which are incurred by the Construction Supervisor in connection with the ordinary exercise and performance by the Construction Supervisor of the rights, powers and duties entrusted to it pursuant to this Agreement. The supervision fee will be paid in two equal installments as follows:

(a) US$393,702.50 on the execution of this Agreement; and

(b) US$393,702.50 upon the Construction Supervisor advising the Owner of the completion of the sea trial run of the Vessel.

A-II- 7

For the avoidance of doubt, the Construction Supervisor can demand payment of the fee and other amounts payable hereunder from the Parent pursuant to the relevant provisions of the Group Management Agreement.

ARTICLE VII

COMMENCEMENT - TERMINATION

SECTION 7.1. This Agreement shall come into effect on the date hereof and shall continue until the delivery of the Vessel in accordance with the Shipbuilding Contract unless terminated earlier pursuant to the terms of Section 7.2, Section 7.3, Section 7.4 or Section 7.5.

SECTION 7.2. The Owner shall be entitled to terminate this Agreement by notice in writing to the Construction Supervisor if the Construction Supervisor defaults in the performance of any material obligation under this Agreement, subject to a cure right of 20 Business Days following written notice by the Owner.

SECTION 7.3. This Agreement shall terminate automatically if:

(a) the Shipbuilding Contract is cancelled, rescinded or terminated; or

(b) the Group Management Agreement is terminated.

SECTION 7.4. The Construction Supervisor shall be entitled to terminate this Agreement by notice in writing to the Owner if:

(a) any moneys payable by the Owner under this Agreement is not paid when due or if due on demand within 10 Business Days following demand by the Construction Supervisor; or

(b) the Owner defaults in the performance of any other material obligations under this Agreement, subject to a cure right of 20 Business Days following written notice by the Construction Supervisor.

SECTION 7.5. Either party shall be entitled to terminate this Agreement immediately if:

(a) the other party ceases to conduct business, or all or substantially all of the equity-interests, properties or assets of either such party is sold, seized or appropriated; or

A-II- 8

party shall admit in writing its insolvency or its inability to pay its debts as they mature; (iv) an order is made for the appointment of a liquidator, manager, receiver or trustee of the other party of all or a substantial part of its assets; (v) an encumbrancer takes possession of or a receiver or trustee is appointed over the whole or any part of the other party’s undertaking, property or assets; or (vi) an order is made or a resolution is passed for the other party’s winding up;

(c) a distress, execution, sequestration or other process is levied or enforced upon or sued out against the other party’s property which is not discharged within 20 Business Days;

(d) the other party ceases or threatens to cease wholly or substantially to carry on its business otherwise than for the purpose of a reconstruction or amalgamation without insolvency previously approved by the terminating party;

(e) the other party is prevented from performing its obligations hereunder by reasons of Force Majeure for a period of two or more consecutive months.

SECTION 7.6. In the event of termination due to the Construction Supervisor’s default, then it shall not be entitled to receive any payment in respect of the fees and other amounts described in Article VI becoming due and payable after the date of such termination.

ARTICLE VIII

EMPLOYEES

SECTION 8.1. None of the employees and/or sub-contractors of the Construction Supervisor shall constitute, for the purposes of this Agreement, sub-agents of the Owner. The Construction Supervisor, in its capacity as employer and contractor (and not in its capacity as agent for the Owner), shall (a) be responsible for the salaries, expenses and costs in respect of each of its employees and sub-contractors (not in its capacity as agent for the Owner) and (b) save for the provisions of Article V, indemnify its employees and sub-contractors for any liabilities and losses incurred by such employees and sub-contractors.

ARTICLE IX

GOVERNING LAW - ARBITRATION

SECTION 9.1. This Agreement shall be governed by and be construed in accordance with the laws of England.

A-II- 9

be made a rule of the court. The arbitrators shall be commercial persons, conversant with shipping matters. Such arbitration is to be conducted in accordance with the rules of the London Maritime Arbitration Association terms current at the time when the arbitration proceedings are commenced and in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof.

SECTION 9.3. In the event that a party hereto shall state a dispute and designate an arbitrator in writing, the other party shall have 20 Business Days to designate its own arbitrator. If such other party fails to designate its own arbitrator within such period, the arbitrator appointed by the first party can render an award hereunder.

SECTION 9.4. Until such time as the arbitrators finally close the hearings, either party shall have the right by written notice served on the arbitrators and on the other party to specify further disputes or differences under this Agreement for hearing and determination.

SECTION 9.5. The arbitrators may grant any relief, and render an award, which they or a majority of them deem just and equitable and within the scope of this Agreement, including but not limited to the posting of security. Awards pursuant to this Article IX may include costs, including a reasonable allowance for attorneys’ fees, and judgments may be entered upon any award made herein in any court having jurisdiction.

ARTICLE X

COUNTERPARTS

SECTION 10.1. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.

ARTICLE XI

NOTICES

SECTION 11.1. Every notice or other communication under this Agreement shall:

(a) be in writing delivered personally or by first-class prepaid letter (airmail if available) or facsimile transmission or other means of telecommunication (other than telex) in permanent written form;

(b) be deemed to have been received, in the case of a letter, when delivered personally or three (3) days after it has been put into the post and, in the case of a facsimile transmission or other means of telecommunication (other than telex) in permanent written form, at the time of dispatch (provided that if the date of dispatch is a Saturday or Sunday or a public holiday in the country of the addressee or if the time of dispatch is after the close of business in the country of the addressee it shall be deemed to have been received at the opening of business on the next day which is not a Saturday or Sunday or public holiday); and

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(c)	be sent:

	(i)	to the Construction Supervisor at:

		Costamare Shipping Company S.A.
		[•l
		Facsimile No.: [•]
		Attention: [•]

	(ii)	to the Owner at:

		C/o Costamare Inc.
		[•]Athens, Greece
		Facsimile No.: +30 210 [•]
		Attention: [•]

or to such other address and/or numbers for a party as is notified by such party to the other party under this Agreement.

SECTION 11.2. Each communication and document made or delivered by one party to another pursuant to this Agreement shall be in the English language.

SECTION 11.3. This Agreement shall not create benefits on behalf of any other person not a party to this Agreement, and this Agreement shall be effective only as between the parties hereto, their successors and permitted assigns.

A-II- 11

IN WITNESS of which this Agreement has been duly executed the day and year first before written.

For the Owner

For the Construction Supervisor

A-II- 12

SCHEDULE 1

FORM OF CONSTRUCTION CERTIFICATE

[On the letterhead of the Construction Supervisor]

[Vessel Owner] (the “ Owner ”)
[Address]
Facsimile: [ ]
Attention: [ ]

Date:

Dear Sirs,

[Name of Builder] (the “ Builder ”), [Name of Vessel] (the “ Vessel ”)

We refer to the construction supervision agreement dated [ ] between the Owner and us (the “ Supervision Agreement ”).

Words and expressions defined in the Supervision Agreement (whether expressly or by incorporation by reference to another document) shall have the same meaning where used in this certificate.

We hereby certify, pursuant to Section 3.1(d) of the Supervision Agreement, as follows:

(1)	the Vessel has been duly completed and is ready for delivery to and acceptance by the Owner in or substantially in accordance with the Shipbuilding Contract and the Specifications and Plans; and

(ii)	the Vessel is recommended for classification by [Name of the classification society] (the “ Classification Society ”).

With respect to paragraph (ii) above, please find attached to this certificate the provisional certificate of the Classification Society recommending such classification of the Vessel / a duplicate or photocopy of the provisional certificate of the Classification Society recommending such classification of the Vessel / the following evidence of the Classification Society’s recommendation of such classification of the Vessel [ ].

	Yours faithfully,


	for and on behalf of
	COSTAMARE SHIPPING COMPANY S.A.

S-1- 13

Exhibit 4.10

PRIVILEGED & CONFIDENTIAL

EXECUTION VERSION

DATED 15 May 2013 as amended and restated on 18 MAY 2015

(1)

sparrow holdings, L.P.

(2)

CostamarE VENTURES InC.

FRAMEWORK DEED

CONTENTS

clause

1.	interpretation	1
2.	SCOPE OF BUSINESS	9
3.	CAPITAL COMMITMENTS	9
4.	Investment procedure	10
5.	OPERATION and governance OF EACH SPV	15
6.	appointment of Auditors	17
7.	EXCLUDED MATTERS	17
8.	split of the JV Fleet	19
9.	FINANCIAL MATTERS	22
10.	ACCOUNTING MATTERS	23
11.	budget and business plan	24
12.	DISTRibutions	25
13.	TAXATION	27
14.	TRANSFER OF SHARES	28
15.	strategic transaction	29
16.	EXCLUSIVITY, NON-COMPETE and Non-solicitation	29
17.	CONFIDENTIALITY	35
18.	termination ANd winding up	36
19.	Guarantees, indemnities and other ASSURANCE	38
20.	Representation and WARRANTIES	39
21.	power of attorney by way of security	40
22.	GENERAL	41
23.	ENTIRE AGREEMENT	42
24.	SEVERABILITY	42
25.	counterparts	42
26.	WAIVER	42
27.	FURTHER ASSURANCE	42
28.	RIGHTS OF THIRD PARTIES	42
29.	COSTS AND EXPENSES	42
30.	Non Advisory	43
31.	SERVICE OF NOTICES	44
32.	GOVERNING LAW and jurisdiction	45
Schedule 1-List of York Funds		47
Schedule 2-Form of Business Plan		48
Schedule 3- Form of Budget		49
Schedule 4- Example of IRR calculation		50

THIS DEED dated 15 May 2013 as amended and restated on 18 May 2015

BETWEEN:

SPARROW HOLDINGS, L.P., an exempted limited partnership formed under the laws of the Cayman Islands (“ York ”);

YORK CAPITAL MANAGEMENT GLOBAL ADVISORS LLC, a limited liability company incorporated under the laws of the State of New York (the “ Fund Manager ”), on behalf of itself and the York Funds (as such term is defined below);

COSTAMARE INC., a corporation incorporated under the laws of the Republic of the Marshall Islands and, as of the date of this Agreement, listed in the New York Stock Exchange under the symbol “CMRE” (the “ Parent ”); and

COSTAMARE VENTURES INC., a corporation incorporated under the laws of the Republic of the Marshall Islands (“ Costamare ”).

For the avoidance of any doubt, this Agreement shall apply to the Fund Manager and the Parent only where explicitly stated so herein.

BACKGROUND

The Parties (as such term is defined in clause 1) intend to engage in the business (the “ Business ”) of co-investing in one or more limited liability corporations formed in the Republic of the Marshall Islands (each an “ SPV ” and collectively the “ SPVs ”) pursuant to the terms of this Agreement, as amended from time to time, that will each have the exclusive purpose of acquiring, maintaining, operating and disposing of an ocean-going vessel (whether in its construction phase or operational) that is intended to be used to transport containerized cargoes (each, a “ Vessel ” and collectively, the “ Vessels ”).

The Parties (as such term is defined in clause 1) intend that they will co-invest in Vessels by each subscribing, or procuring that one of its wholly owned subsidiaries will subscribe, for Shares (as defined in clause 1) for cash in an SPV. Each Vessel will be acquired and shall be owned by a newly and separately incorporated SPV.

This framework agreement, executed as a deed (the “ Agreement ”) sets out the terms pursuant to which the Parties (as such term is defined in clause 1) will pursue the Business and co-invest in the SPVs.

IT IS AGREED as follows:

1.	interpretation

Definitions

In this Agreement:

	Action	has the meaning ascribed thereto in clause 1.1K;

	Affiliate	means, in respect of a non-natural person, any person Controlling,

	Controlled by or under common Control with that person;

Bluebird	means Bluebird Holdings, L.P., an exempted limited partnership formed under the laws of the Cayman Islands;

Board	has, in respect of an SPV, the meaning ascribed thereto in clause 5.2;

Budget	means, in respect of an SPV and/or its Vessel, the budget prepared by Costamare Shipping in relation to such SPV and/or Vessel in accordance with clause 11;

Business Day	means a day on which banks in the city of London (England), the city of New York (USA), and the city of Athens (Greece) are open for business generally;

Business Plan	means, in respect of an SPV and/or its Vessel, the business plan prepared by Costamare in relation to such SPV and/or Vessel in accordance with clause 11;

Commitment Period	means the period commencing on the Effective Date and ending on the earlier of:

	(a)	15 May 2020;

	(b)	the date that this Agreement is terminated pursuant to clauses 18.1D, 18.2 or 18.3;

	(c)	the date that York serves notice on Costamare pursuant to clause 3.10;

	(d)	the date that Costamare serves notice on York pursuant to clause 3.11; and

	(e)	the date that York does not participate in an Investment Opportunity presented to it in accordance with clause 2.1, which has an acquisition price which, when aggregated with all other Investment Opportunities presented to it in accordance with clause 2.1 on or after 16 May 2015 and in which York has elected not to participate, equals or exceeds US$500,000,000 unless agreed otherwise in writing by Costamare.

Commitments	means, together, the Costamare Commitment and the York Commitment and Commitment means either of them;

Container Entity	means a business or company which the majority of its value is attributable to Vessels owned by such business or company, as determined by a valuation to be obtained from an independent and reputable third party valuer appointed by York and CMRE acting jointly or, if York and CMRE do not agree the identity of such valuer within 5 Business Days (from the first date on which York

		or CMRE has suggested a valuer) either York or CMRE may ask the president for the time being of the Institute of Chartered Accountants in England to appoint a valuer and such appointment shall be binding on both York and CMRE;

	Control	means in relation to a non-natural person, the ability of any person directly or indirectly to: - appoint and/or remove: (a) a majority of the board of directors; or (b) any other body or entity that by operation of law or otherwise is entitled to direct the activities, of such non-natural person (including a general partner or trustee); - exercise, or direct the exercise of, more than 50% of the voting rights of that body corporate or firm; or - direct or otherwise control its day to day affairs, and Controlling and Controlled shall be construed accordingly;
	Controlling Equity Stake	means, in respect of a company, business or any non-natural person, such equity stake which provides its holder with Control over such company, business or non-natural person.

	Costamare Commitment	means the US$ amount that Costamare shall elect to invest for the purposes of the Business in accordance with this Agreement;

	Costamare Director	means, in relation to an SPV, a director of such SPV appointed by the relevant Costamare Shareholder of such SPV;

	Costamare Option	has the meaning ascribed thereto in clause 3.6;

	Costamare Option Notice	has the meaning ascribed thereto in clause 3.7;

	Costamare Partners	means Costamare Partners LP, a limited partnership formed under the laws of the Republic of the Marshall Islands;

	Costamare Shareholder	means, in relation to an SPV, Costamare or any wholly-owned direct subsidiary of Costamare which Costamare elects by notice to York to be the shareholder of such SPV;

	Costamare Shareholder Shares	means, in relation to an SPV, shares of all classes in the capital of such SPV created or in issue for the time being and registered in the name of the relevant Costamare Shareholder.

	Costamare Shipping	means Costamare Shipping Co. S.A. of Panama City, Republic of Panama;

Costamare Split Right	has the meaning ascribed thereto in clause 8;

Deemed Sale	has the meaning ascribed thereto in clause 8.6;

Default Interest Rate	means 20 per cent, calculated on a daily basis and compounded quarterly;

Director	means, in relation to an SPV, a York Director or a Costamare Director of such SPV and Directors shall be construed accordingly;

Effective Date	means the later of:

	(a)	the date of this Agreement; and

	(b)	the date all conditions precedent set out in clause 22.7 have been satisfied.

Excluded Matters	means, together, the matters set out in clause 7;

Fourth Anniversary	means the date falling four years after the end of the Commitment Period;

Fund Manager	includes its successors in title;

Group	means, in relation to any person that is a non-natural person, that person and its Affiliates, and member of a Group shall be construed accordingly;

Investment Notice	means, in relation to an SPV, a written notice issued by the Board or, as the case may be, a Director of such SPV to the Shareholders of such SPV to contribute or procure the contribution of capital to such SPV;

Investment Opportunity	has the meaning ascribed thereto in clause 2.1;

IRR or Internal Rate of Return	means, at any relevant time in respect of a York Shareholder, the annualized internal rate of return in respect of such Shareholder’s Commitment actually invested at the time in accordance with this Agreement, calculated using the then most current version of Microsoft Excel software’s “XIRR” function (which for purposes of clarity shall be net of costs, fees and expenses, if any) computed from the dates of such Shareholder making such investment until the dates of such distributions in respect thereof under clause 12.3, which annualised internal rate when applied to the relevant cash flow streams produces a net present value equal to zero. For the avoidance of doubt, such calculations shall be

		made following the example set out in Schedule 4;

	JV Fleet	means, at any relevant time, all Vessels which are owned by any SPV at that time;

	LCIA Rules	means the rules of the London Court of International Arbitration;

	Losses	has the meaning ascribed thereto in clause 1.1K

	Management Agreement	means, in respect of an SPV and its Vessel, each agreement to be entered into by such SPV with the relevant Manager in respect of such Vessel in the agreed form and, if more than one for a Vessel, Management Agreements shall mean, together, both or all of them;

	Manager	means, in respect of an SPV and its Vessel, Costamare Shipping and/or, if so directed by Costamare in accordance with clause 4.2E, V.Ships Greece Ltd. Or, such other manager as shall be appointed by such SPV from time to time;

	Manager Matters	means, in relation to an SPV and any relevant Management Agreement, the matters set out in such Management Agreement for the relevant Manager to decide in accordance with the terms of such Management Agreement;

	Newbuild Vessel	a Vessel that is newly constructed and is acquired or ordered by an SPV prior to or simultaneously with completion of its construction;

	Non- Controlling Equity Stake	means, in respect of a company, business or any non-natural person, such equity stake, which does not provide its holder with Control over such company, business or non-natural person.

	Other Relevant Vessels	has the meaning ascribed thereto in clause 7.2;

	Parent	includes its successors in title;

	Party	means Costamare or York and “Parties” means, together, both of them;

	Public Offering	means an offering of securities to the public;

	Relevant Sale	has the meaning ascribed thereto in clause 7.1;

	Relevant Shares	has the meaning ascribed thereto in clause 7.2A;

	Relevant Vessel	has the meaning ascribed thereto in clause 7.1;

	Remaining Vessels	has the meaning ascribed thereto in clause 8.3B;

	Replacement Value Period	has the meaning ascribed thereto in clause 7.1;

	Sale Notice	has the meaning ascribed thereto in clause 7.1;

	Sale Notice Period	has the meaning ascribed thereto in clause 7.1;

	Service Providers	means such persons as may be appointed to act as service providers to an SPV;

	Shares	means, in relation to an SPV, the York Shareholder Shares and the Costamare Shareholder Shares in such SPV;

	Shareholders	means, in relation to an SPV, the York Shareholder and the Costamare Shareholder of such SPV for the time being and Shareholder , in relation to an SPV, shall mean either of them;

	Shareholders’ Agreement	means, in relation to an SPV, the shareholders’ agreement to be entered into between the relevant Shareholders and, where the York Shareholder in not York or the Costamare Shareholder is not Costamare, York and/or Costamare, respectively, as guarantors;

	Sister Vessel and Sister Vessels	have each the meaning ascribed thereto in clause 8.3A;

	Split Proposal	has the meaning ascribed thereto in clause 8.2;

	subsidiary	means a subsidiary undertaking (as defined in section 1162 of the Companies Act 2006) or a subsidiary (as defined in section 1159 of the Companies Act 2006);

	Supervision Agreement	means, in respect of a Newbuild Vessel, a supervision agreement in the agreed form;

	Strategic Transaction	means a Public Offering, a Trade Sale or other transaction agreed between the Parties whereby the Shareholders are able, directly or indirectly, to realise all or a majority of their investment in the Business;

	Trade Sale	a sale of the Vessels or the Business to a buyer whether by means of an asset sale or the sale of the Shares of the SPVs or a combination thereof, in each case agreed by the relevant

		Shareholders unanimously;

	Unallocated Sister Vessel	has the meaning ascribed thereto in clause 8.3A;

	US GAAP	means generally accepted accounting principles in the United States of America;

	York Commitment	means the US$ amount that York shall invest for the purposes of the Business in accordance with this Agreement;

	York Director	means, in relation to an SPV, a director of such SPV appointed by York the relevant York Shareholder of such SPV;

	York Funds	means together the investment funds managed or advised by the Fund Manager or one of its Affiliates and being detailed in Schedule 1, as amended from time to time;

	York Shareholder	means, in relation to an SPV, York and/or a wholly owned direct subsidiary thereof; and

	York Shareholder Shares	means, in relation to an SPV, shares of all classes in the capital of such SPV created or in issue for the time being and registered in the name of the relevant York Shareholder.

Interpretation

In this Agreement:

1.1

a reference to:

a statute or statutory provision includes a reference to:

(i)

that statute or provision as amended, re-enacted, replaced or modified from time to time; and

(ii)

any order, statutory instrument, regulation or other subordinate legislation made from time to time under the relevant statute;

“writing” is a reference to any mode of representing or reproducing words in a visible, non-transitory form (and includes a reference to e-mail or other mode of representing or reproducing words in electronic form);

an agreement or obligation for a Party to “procure” any action or inaction of another person under this Agreement shall be construed as an agreement or obligation for such Party to exercise its voting rights, discretions and other powers in respect of its interest in that other person or otherwise under this Agreement, and the agreement pursuant to which that Party or its Affiliate is appointed in such manner so as to procure (insofar as possible) such action or inaction (as the case may be);

a person shall include any natural person, legal person or other entity (whether or not having a legal personality) and a reference to a non-natural person is a reference to any person (as so defined) other than an individual;

a “change of Control” shall occur if a person who Controls any company or undertaking ceases to do so, or if another person acquires Control of it;

the singular includes the plural and vice versa;

the masculine includes the feminine and vice versa;

a clause or a Schedule is a reference to a clause of or a schedule to this Agreement;

any phrase introduced by the terms ‘including’ or ‘in particular’, or any similar expression, shall be construed as illustrative and not limiting of any preceding words;

a month means a calendar month, a quarter means a calendar quarter and a year means a calendar year;

indemnify any person against any circumstance shall mean indemnifying it and each of its Affiliates and keeping it and each of its Affiliates harmless, on an after-tax basis, from all Actions made against it or any of its Affiliates and all Losses suffered or incurred by it or any of its Affiliates as a consequence of that circumstance, and Action shall include any action, proceedings, claim, demand and other legal recourse brought against the party to whom such indemnity is given (the indemnified party ) in respect of the subject matter in relation to which such indemnity is given and Losses shall include any liability, damage, loss, compensation, award, cost, expense, charge, fine, penalty and outgoing suffered or incurred by the indemnified party in respect thereof; and

“agreed form” means:

(i)

where a document has already been executed by all of the relevant parties, such document in its executed form;

(ii)

prior to the execution of a document, the form of such document separately agreed in writing between the Parties as the form in which that document is to be executed;

1.2

headings are used for convenience only and shall not affect the interpretation of this Agreement; and

1.3

each of the Schedules forms part of this Agreement.

2.	SCOPE OF BUSINESS

2.1

Costamare hereby undertakes during the Commitment Period to procure that Costamare Shipping shall present to York any opportunities for the acquisition of Vessels or shares in companies that own Vessels that Costamare Shipping has

identified during such period (each an “ Investment Opportunity ” and together the “ Investment Opportunities ”).

2.2

The acquisition of a Vessel and, if relevant, the incorporation of the relevant SPV for all transactions that will be governed by this Agreement shall require the unanimous approval in writing of both Parties.

2.3

The business of each SPV shall be to acquire, maintain, operate, and/or dispose of a single Vessel with the objective of maximising the value of the relevant Shareholders’ investment in such SPV.

2.4

The Parties will invest in the Business in accordance with this Agreement.

3.	CAPITAL COMMITMENTS

3.1

York agrees to invest its Commitment as calculated in accordance with this clause 3 and in accordance with the terms of this Agreement.

3.2

Costamare agrees to invest its Commitment as calculated in accordance with this clause 3 and in accordance with the terms of this Agreement.

3.3

Costamare and York will capitalize and initially own the SPVs directly or through wholly-owned direct subsidiaries, always in accordance with the terms of this Agreement. In the event that a York Shareholder of an SPV is a subsidiary of York, then York will be a party to the Shareholders’ Agreement of such SPV so as to guarantee the performance of such subsidiary under such Shareholders’ Agreement. In the event that a Costamare Shareholder of an SPV is a subsidiary of Costamare, then Costamare will be a party to the Shareholders’ Agreement of such SPV so as to guarantee the performance of such subsidiary under such Shareholders’ Agreement.

3.4

Subject to clauses 3.6 to 3.8, in relation to an SPV agreed to be incorporated up to (and including) 14 May 2015 (other than in relation to an SPV to be incorporated pursuant to a Permitted Transaction which shall be dealt with under clause 16):

York will, or will procure that another York Shareholder will, subscribe for Shares in such SPV representing in aggregate seventy-five percent (75%) of the equity required for the purchase of the Vessel to be acquired by such SPV; and

Costamare will, or will procure that another Costamare Shareholder will, subscribe for Shares in such SPV representing the remaining twenty-five percent (25%) of the equity required for the purchase of such Vessel.

3.5

Subject to clauses 3.6 to 3.8, in relation to an SPV agreed to be incorporated on or after 15 May 2015 (other than in relation to an SPV to be incorporated pursuant to a Permitted Transaction which shall be dealt with under clause 16):

Costamare will, or will procure that another Costamare Shareholder will, subscribe for Shares in such SPV representing in aggregate between twenty-five percent (25%) and seventy-five percent (75%) of the equity required for the purchase of the Vessel to be acquired by such SPV. Costamare shall stipulate the exact percentage of equity it wishes to subscribe for, when the

relevant Investment Opportunity is presented to York for the purposes of clause 4.1; and

York will, or will procure that another York Shareholder will, subscribe for Shares in such SPV representing the remaining of the equity required for the purchase of such Vessel following the subscription of the relevant Costamare Shareholder under clause 3.5A.

3.6

Costamare may at its sole discretion decide to increase the relevant Costamare Shareholder’s percentage participation in the Shares of an SPV up to a maximum percentage of:

in the case of an SPV incorporated and subscribed for in accordance with clause 3.4, forty-nine percent (49%),

in the case of an SPV incorporated and subscribed for in accordance with clause 3.5, the lesser of (i) seventy-five percent (75%) and (ii) a percentage representing an increase of thirty per cent (30%) of the percentage shareholding participation already subscribed for in such SPV in accordance with clause 3.5,

and in each case, shall be required to contribute an equivalent percentage of the equity required for the purchase of the Vessel to be acquired by such SPV (each such right to increase the relevant Costamare’s Shareholder percentage participation in the Shares of such SPV, a “ Costamare Option ”) by serving notice on York in accordance with clause 3.7.

3.7

Each time that Costamare wishes to exercise a Costamare Option under clauses 3.6A and/or 3.6B, Costamare shall send written notice to York specifying the exact percentage of Shares to which it wishes to increase the relevant Costamare Shareholder’s ownership of the respective SPV (the “ Costamare Option Notice ”). A Costamare Option Notice shall be transmitted:

in the case of an SPV acquiring a Newbuild Vessel, within three (3) months from the date the SPV enters into a shipbuilding contract or, as the case may be, a memorandum of agreement for the acquisition of such Newbuild Vessel;

in the case of an SPV acquiring a Vessel other than a Newbuild Vessel, within one (1) month from the date the SPV enters into the memorandum of agreement to acquire such Vessel.

The provision of a Costamare Option Notice in accordance with this clause shall be irrevocable and in each case, Costamare shall procure that the relevant Costamare Shareholder shall complete the purchase of the relevant Shares within fifteen (15) Business Days of delivery of the relevant Costamare Option Notice. For the avoidance of doubt, no more than one Costamare Option Notice may be delivered with respect to each SPV.

3.8

In the event that Costamare exercises a Costamare Option in respect of an SPV:

prior to the relevant Shareholders having subscribed for and been issued with Shares in such SPV in accordance with clauses 3.4 or 3.5, the Board of that

SPV shall adjust the number of Shares to be subscribed for by each Shareholder and the required Shareholders’ respective capital contributions in the Investment Notice for that SPV in accordance with the percentages set out in the Costamare Option Notice (by issuing the number of Shares stipulated therein to Costamare Shareholder and the remaining number of Shares to the York Shareholder);

after the relevant Shareholders having subscribed for and paid for Shares in such SPV in accordance with clauses 3.4 or 3.5 (with the first payment made for, or in respect of, these Shares by the relevant York Shareholder being the “ Initial Contribution ”), then Costamare shall procure that the relevant Costamare Shareholder shall purchase, and York shall procure that the relevant York Shareholder shall sell, such number of the York Shareholder Shares in such SPV as required for such Costamare Shareholder to meet its respective percentage specified in the Costamare Option Notice, and at a purchase price equal to: the aggregate of the purchase price paid by the York Shareholder for such Shares and the proportion of any capital contributions (by way of equity injection, shareholder loans or otherwise) made by the York Shareholder into the relevant SPV corresponding to those Shares following the Initial Contribution.

3.9

Unless otherwise agreed between the Parties, all subscriptions for Shares in an SPV shall be in cash and each Shareholder of an SPV shall subscribe at the same price per Share for such SPV.

3.10

The Commitment Period shall terminate upon York serving notice to this effect on Costamare within ten (10) Business Days of York becoming aware that:

Costamare Shipping has been subject to a change of Control;

Mr. Konstantinos Konstantakopoulos ceases to be involved in the day to day operational activities of Costamare for a period exceeding 120 consecutive days; or

it has the right to terminate this Agreement pursuant to clause 18.3.

3.11

The Commitment Period shall terminate upon Costamare serving notice to this effect on York within ten (10) Business Days of Costamare becoming aware that:

the York Funds (either any one of them or all of them together) no longer own all the interests in York;

any two of Mr. James Dinan, Mr. William Vrattos and Mr. Akbar Rafiq are no longer involved in the business decisions of York, Bluebird or the Fund Manager (or their respective successors, permitted assigns or permitted transferees), (provided however that a termination notice following Costamare’s becoming aware of the event described in this sub-paragraph B may only be served by Costamare on or after 15 May 2015); or

it has the right to terminate this Agreement pursuant to clause 18.3.

3.12

Subject always to clauses 3.10 and 3.11, to the extent that in relation to an Investment Opportunity which has been approved in accordance with this Agreement any part of the acquisition price of the Vessel relating to such Investment Opportunity remains outstanding at the end of the Commitment Period, then, notwithstanding the end of the Commitment Period, the relevant Commitments required to be invested for the purposes of such Investment Opportunity shall be available or (if not yet contributed by the Shareholders) be contributed by the Shareholders for investment even after the end of the Commitment Period for as long as it is needed for the relevant Investment Opportunity to be completed.

4.	Investment procedure

4.1

Other than in relation to a Permitted Transaction under clause 16, within five (5) Business Days of presentation of an Investment Opportunity and the related Business Plan by Costamare, York will notify Costamare in writing if (i) it approves of the relevant Investment Opportunity and the relevant Business Plan, in which case the remaining of this clause 4 shall apply or (ii) it rejects the relevant Investment Opportunity and/or the relevant Business Plan, in which case clauses 16.4 and 16.5 shall apply (but for the purposes of clause 16.4, it shall be deemed that the five (5) Business Days period provided therein has lapsed when York rejects the relevant Investment Opportunity under this clause 4.1).

4.2

Within three (3) Business Days of approval of an Investment Opportunity and any Business Plan by York as set out in clause 4.1, the Parties shall promptly name the Shareholders to incorporate the SPV to implement the relevant Investment Opportunity and procure that such Shareholders shall:

proceed with the incorporation of the relevant SPV with Shares being issued to the relevant Shareholders in accordance with clause 3;

appoint in relation to such SPV a Board in accordance with the provisions of clause 5;

enter into a Shareholders’ Agreement;

procure that the relevant SPV’s constitutional documents reflect, to the extent permitted by law, the provisions of such Shareholders’ Agreement;

procure that the relevant SPV enters into a Management Agreement with Costamare Shipping and/or, if directed by Costamare in writing, V.Ships Greece Ltd.; and

if a Newbuild Vessel is to be acquired, procure that the relevant SPV enters into a Supervision Agreement with Costamare Shipping,

Provided however that any of the actions set out above may be omitted in respect of an Investment Opportunity to the extent any such action has been completed in connection with a previous non-finalised Investment Opportunity.

4.3

As soon as possible after the matters set out in clause 4.2 being implemented, (a) the Board of the relevant SPV shall procure that such SPV enters into a definitive agreement with the relevant counterparty in connection with the relevant Investment

Opportunity in respect of which such SPV has been incorporated and (b) the Shareholders of such SPV or, as the context may require, the Board of such SPV shall prepare and/or obtain and/or provide any other documentation required for the execution of such Investment Opportunity as set out in its Business Plan.

4.4

Within three (3) Business Days of the relevant definitive agreement being entered into by an SPV in accordance with clause 4.3, the Board of such SPV or, failing that, any Director of such SPV, shall issue such SPV’s first Investment Notice setting out the capital contribution of the relevant Shareholders and the timing of such contribution. The Parties agree that:

once the relevant SPV has been incorporated to acquire a Vessel:

(i)

the first Investment Notice issued in respect of such SPV shall:

(1)

be for the full amount of the first instalment of the acquisition price of such Vessel as set out in the Business Plan for such Vessel and which is not at the time of the relevant Investment Notice to be funded by funds other than the relevant Shareholders’ equity under this Agreement; and

(2)

require that the relevant contributions are paid to such SPV not later than five (5) Business Days after the relevant notice is delivered to the Parties;

(ii)

any subsequent Investment Notices in respect of such SPV shall:

(1)

be for the full amount of the instalment of the acquisition price of such Vessel then due and for which no other Investment Notice has been issued and which is not at the time of relevant Investment Notice to be funded by funds other than the relevant Shareholders’ equity under this Agreement; and

(2)

require that the relevant contributions are paid to such SPV not later than two (2) Business Days after the relevant notice is delivered to the Parties;

in all other cases, any Investment Notice shall be issued by the relevant Board only and shall be in an amount and for a timing as such Board may unanimously agree; and

upon an Investment Notice being issued, the Parties shall procure that the relevant Shareholders shall capitalize the relevant SPV in a proportion pro rata to their respective shareholding in that SPV at the relevant time in accordance with the terms of this Agreement and the applicable Shareholders’ Agreement.

4.5

In the event that a Shareholder fails to satisfy its required capital contribution pursuant to an Investment Notice (the “ Non-Participating Shareholder ”), within ten (10) Business Days of such failure, the other relevant Shareholder shall have the right, at its sole discretion and without prejudice to any rights it may have in respect of the

Non-Participating Shareholder’s failure to perform its obligations in respect of the relevant SPV:

to advance the corresponding amount in debt to the SPV, such advance to be subject to:

(i)

carrying interest at the Default Interest Rate;

(ii)

ranking ahead of any other Shareholder of such SPV or unsecured debt of such SPV; and

(iii)

being repaid prior to any distributions being made to the Shareholders of such SPV in accordance with the terms of this Agreement and the relevant Shareholders’ Agreement; or

to terminate this Agreement in accordance with clause 18.3B; or

to do nothing in relation to such failure.

4.6

Any capital contribution made to an SPV that has called for a Vessel acquisition and is not invested on or prior to thirty (30) days from the date of such capital contribution shall be returned to the relevant Shareholders within three (3) Business Days thereafter, unless the said Shareholders agree otherwise in writing. Any capital returned to the Shareholders in accordance with this clause shall not be distributed pursuant to clause 12.3.

5.	OPERATION and governance OF EACH SPV

5.1

An SPV will have no employees, other than the crew employed on its Vessel.

5.2

Each SPV shall have a five (5) person Board of Directors (in respect of such SPV, the “ Board ”), made up of three York Directors and two Costamare Directors.

5.3

The relevant York Shareholder shall have the right to appoint and maintain in office in each SPV, three York Directors.

5.4

The relevant Costamare Shareholder shall have the right to appoint and maintain in office in each SPV, two Costamare Directors.

5.5

Each of the Shareholders of an SPV shall procure that, at all times during the continuance of this Agreement, there shall be appointed by it and maintained in office as Directors the number of Directors set out in clauses 5.3 and 5.4 respectively. Each Shareholder of an SPV agrees not to appoint a Director under this clause 5 without the other Shareholder’s prior consent, unless the York Director to be appointed is an employee of the Fund Manager or the Costamare Director to be appointed is an employee of Costamare or the Manager. Save with the written consent of each of the Shareholders of an SPV, no Director of an SPV shall be appointed otherwise than pursuant to clause 5.3 or clause 5.4.

5.6

Each Shareholder of an SPV shall have the right to remove any Director of an SPV appointed by it and appoint another Director in his place. Any such appointment or removal shall be effected by giving notice in writing (signed by a director or the

secretary of the Shareholder lodging the notice) to the secretary of the SPV at its registered office or at a Board meeting, and shall take effect (subject to any contrary intention expressed in the notice) when the notice is so delivered.

5.7

If a York Shareholder removes a York Director from his office, the York Shareholder shall be responsible for and shall indemnify the relevant Costamare Shareholder and the relevant SPV against any claim by such Director arising out of such removal, whether for unfair or wrongful dismissal or otherwise. The same provision shall apply, mutatis mutandis, if a Costamare Shareholder shall remove a Director appointed by it.

5.8

The Board of each SPV shall procure that such SPV obtains a market-standard Directors’ and Officers’ insurance policy that would cover all members of the Board of such SPV for their entire time in office.

5.9

The members of the Board of an SPV shall not be entitled to any remuneration in their capacity as Directors of such SPV or to any travel or other out-of-pocket expenses.

5.10

The Chairman of the Board shall be appointed by the York Directors (and, for the avoidance of doubt, shall be a York Director), but shall not have a second or casting vote.

5.11

A quorum of the Board of an SPV shall consist of two Directors, at least one of whom shall be a York Director of such SPV and at least one of whom shall be a Costamare Director of such SPV.

5.12

Board meetings shall be held at least once every quarter and may be attended via telephone. At least five (5) Business Days’ written notice of a Board meeting of an SPV shall be given to each Director of such SPV, provided that a Board meeting of an SPV may be convened by giving not less than 48 hours’ notice if the interests of such SPV would be likely to be adversely affected to a material extent if the business to be transacted at such Board meeting were not dealt with as a matter of urgency, or on less than 48 hours’ notice if all Directors of the said SPV agree. An agenda identifying in reasonable detail the issues to be considered by the Directors of the relevant SPV at any such meeting (and copies of any relevant papers to be discussed at the meeting) shall be distributed in advance of the meeting to all such Directors not less than two (2) Business days prior to the date fixed for such meeting. In lieu of a quarterly board meeting provided for in this clause 5.12, the Directors may act with respect to any matters that may be addressed at such quarterly board meeting by execution and delivery of a unanimous written consent of the Board.

5.13

Any Director may call a meeting of the Board on which he holds office with reasonable advance notice.

5.14

The Board of each SPV shall have the sole authority to manage such SPV, except that all Manager Matters in respect of such SPV shall remain the responsibility of and at the discretion of the relevant Manager during its appointment, in accordance with the terms of the relevant Management Agreement relating to such SPV.

5.15

Except for decisions concerning Excluded Matters and Manager Matters, the Board of an SPV shall unanimously decide on all issues governing the affairs of such SPV. Only the Excluded Matters in connection with an SPV shall require a simple majority

vote of its Board. The Manager Matters relating to an SPV shall be decided by the relevant Manager and not the Board of such SPV.

5.16

With respect to each SPV, the Parties shall or, if applicable, shall procure that each Shareholder of such SPV shall use all reasonable endeavours to procure that its respective appointees to the Board of such SPV shall ensure (to the extent that they are able) that the said SPV operates in compliance with:

its Business Plan;

its Budget;

its Articles of Incorporation and by-laws;

the relevant Management Agreement or, if applicable, Management Agreements;

its Supervision Agreement, if any;

its Shareholders’ Agreement; and

this Agreement.

5.17

The Shareholders of an SPV shall use all reasonable endeavours to ensure that their respective appointees as Directors shall attend each Board meeting of such SPV and to procure that a quorum (in accordance with the provisions of this Agreement and the relevant Shareholders’ Agreement) is present throughout each such meeting.

5.18

In the event that a Director is of the opinion that there is a conflict between his fiduciary duties to the relevant SPV and his role as an appointed Director of a Shareholder of such SPV in voting on any particular matter being considered by the Board of such SPV, he may require that such matter is instead determined by the Shareholders of such SPV either in writing or at a meeting of the said Shareholders. In such circumstances the Directors of such SPV shall not be required to vote on that particular matter and shall await the determination of the Shareholders of such SPV, provided however that in respect of any Excluded Matter, the Shareholders of such SPV shall be voting in accordance with the same voting requirements applicable herein for such Excluded Matter.

5.19

For the avoidance of doubt, the foregoing provisions of this clause 5 shall apply equally to each SPV, as if references to the Board, to a Board meeting, to a York Director and to a Costamare Director were references to the board of directors of such SPV, to a meeting of such board, to a director of such SPV appointed by the relevant York Shareholder and to a director of such SPV appointed by the relevant Costamare Shareholder respectively.

5.20

The Parties will procure that the provisions of this Agreement are contained in the Shareholders’ Agreement for each SPV and each Party will exercise its voting rights (or procure the exercise of any voting rights within its direct or indirect control) in relation to the SPV to give effect to the corporate governance and other terms and requirements contained in this clause 5.

6.	appointment of Auditors

6.1

The Parties shall procure that each SPV shall appoint as its auditors Ernst & Young, Greece, but not any of its partners which is at the time of appointment acting for the Parent and its subsidiaries.

6.2

The Parties shall procure that all SPVs appoint the same auditor.

7.	EXCLUDED MATTERS

7.1

The following matters shall be deemed Excluded Matters and decided upon a simple majority of the Board of the relevant SPV:

the sale of its Vessel to an independent third party at arm’s length terms, provided always that the period for Costamare exercising the Costamare Option or, as the case may be, the Costamare Split Right for such SPV, has expired (being the 10 Business Days Periods referred to in clause 8.1 and any applicable subsequent period, to the extent Costamare has (or is deemed to have) elected to exercise its Split Right), or the Option Right has been cancelled or terminated (in each case, in accordance with this Agreement and the Omnibus Agreement), and that the following procedure is applied in the order set out below prior to any such decision being resolved:

(i)

first, upon the relevant York Shareholder’s transmittal of written notice (the “ Sale Notice ”) to the relevant Costamare Shareholder of its intent to demand that the Board of the relevant SPV procures the sale (the “ Relevant Sale ”) of its Vessel (the “ Relevant Vessel ”), the relevant Costamare Shareholder shall have five (5) Business Days to accept or reject the Sale Notice (the “ Sale Notice Period ”);

(ii)

second, if the relevant Costamare Shareholder rejects the Sale Notice or the Sale Notice Period lapses without response, then the Shareholders of the relevant SPV and, if applicable, the Parties shall work together for fifteen (15) Business Days following the earlier of the rejection of the Sale Notice and the end of the Sale Notice Period (the “ Replacement Value Period ”) to determine, to the extent possible and taking into account the parameters set forth in clause 7.2, the number of York Shareholder Shares in one or more of the remaining SPVs to be transferred to the relevant Costamare Shareholder (the “ Relevant Shares ”) in exchange for its Shares in such SPV; and

(iii)

third, if the Replacement Value Period lapses without the relevant Shareholders and, if applicable, the Parties agreeing the Relevant Shares in accordance with clause 7.1A(ii), then the Costamare Split Right under clause 8.1C shall be deemed as having been exercised by Costamare on the last day of the Replacement Value Period (without any action required on the part of Costamare), unless the Parties agree otherwise in writing;

the termination of its Management Agreement in accordance with its terms for cause (as such term is defined in the Management Agreement); and

the liquidation, dissolution or winding up of the affairs of such SPV in connection with the sale of its Vessel in accordance with clause 7.1A.

7.2

For purposes of determining the Relevant Shares, the Shareholders of the relevant SPV and, if applicable, the Parties will:

attempt to allocate to the relevant Costamare Shareholder in the order set out below:

(i)

first, York Shareholder Shares in any SPVs owning Sister Vessels to the Relevant Vessel; and

(ii)

second, if there are no more York Shareholder Shares in SPVs owning Sister Vessels to allocate as per paragraph (i) above, York Shareholder Shares in any other SPVs;

take into account, among other things:

(i)

the market value of the Relevant Vessel and of any other Vessel owned by an SPV the Shares of which form part of the Relevant Shares (the “ Other Relevant Vessels ”), in each case as determined by a valuation obtained by an independent and reputable third-party ship valuer jointly appointed by the Parties (each such valuation to take into account the value of any charter or other employment agreement of the relevant Vessel in excess of twelve months at the time such valuation is obtained (without taking into account any options of the charterer of the Relevant Vessel to extend contained therein));

(ii)

the counterparty risk of the charterer of the Relevant Vessel and of the Other Relevant Vessels; and

(iii)

the liabilities and/or any other assets of all relevant SPVs.

7.3

If the Costamare Split Right is deemed to have been exercised pursuant to clause 7.1A(iii) or is otherwise validly exercised in accordance with clause 8, the Board of an SPV shall not be entitled to resolve upon a simple majority for the sale of its Vessel.

7.4

If the Shareholders of the relevant SPV and, if applicable, the Parties agree the Relevant Shares in connection with a Relevant Sale, such Relevant Sale shall not take place prior to all steps necessary for such Relevant Shares to be transferred to the relevant Costamare Shareholder or as Costamare may otherwise direct have been completed.

7.5

The Parties will procure that the provisions of clauses 7.1, 7.2, 7.3 and 7.4 are contained in the Shareholders Agreement for each SPV.

8.	split of the JV Fleet

8.1

Notwithstanding clause 7.1, the Parties agree that:

at any time that Costamare has the right to terminate this Agreement pursuant to clause 18.2;

on the Fourth Anniversary;

at any time that a Replacement Value Period lapses without the Shareholders of the relevant SPV and, if applicable, the Parties, reaching agreement on the Relevant Shares in respect of a Relevant Sale; or

at any time that Costamare has the right to terminate this Agreement pursuant to clause 18.3,

Costamare will have ten (10) Business Days from:

(i)

in the case of clause 8.1A, the right under clause 18.2 accruing;

(ii)

in the case of clause 8.1B, the Fourth Anniversary;

(iii)

in the case of clause 8.1C, the last day of the relevant Replacement Value Period;

(iv)

in the case of clause 8.1D and in the event clause 18.3A applies, becoming aware of the right to terminate under clause 18.3A;

(v)

in the case of clause 8.1D and in the event clause 18.3B applies, the right under clause 18.3B accruing; or

(vi)

in the case of clause 8.1D and in the event clause 18.3C applies, the right under clause 18.3C accruing,

to elect to divide the JV Fleet in accordance with clauses 8.2 and 8.3 (the “ Costamare Split Right ”). For the avoidance of any doubt, in the event clause 7.1A(iii) is triggered, the Costamare Split Right shall be deemed as having been exercised by Costamare on the last day of the Replacement Value Period (without any action required on the part of Costamare and without the need for the ten (10) Business Days provided for in this clause to elapse). Also, for the avoidance of doubt, each Party shall be taking 100 percent ownership of its allocated SPV/Vessel after the allocation steps described in clause 8.3.

8.2

Costamare shall have forty five (45) days from the date it exercises the Costamare Split Right within which to prepare a proposal for consideration by York, specifying the value of each parcel and of each Vessel in such parcel (on terms consistent with clause 7.2B) (the “ Split Proposal ”). If Costamare fails to deliver to York the Split Proposal within such period, then the Board of each SPV shall be entitled to resolve the sale of its Vessel to an unrelated third party and on arm’s length terms, upon simple majority and without any further delay. Following delivery of the Split Proposal by Costamare to York, York shall then have forty five (45) days within which to respond to Costamare’s proposal and, in the case of clause 8.3B, choose a parcel. If York fails within such period to:

respond in respect of Costamare’s allocation pursuant to clause 8.3A, York shall be deemed to have accepted such allocation; and

choose a parcel under clause 8.3B within the above period Costamare may choose which parcel York is to receive.

8.3

In preparing the Split Proposal, Costamare shall apply the following procedure:

First, with respect to Vessels of same characteristics (i.e., vessels of same type, same year of construction, and with similar nature of charter and charterer) (together the “ Sister Vessels ” and each a “ Sister Vessel ”), Costamare will propose a split of such Sister Vessels in two parcels, each parcel to be prepared on the basis of the relevant Shareholders’ relevant cumulative percentage of shareholding in the SPVs owning the Sister Vessels to be split pursuant to this clause. To the extent that any Sister Vessel cannot be allocated in full as per this clause 8.3A to a parcel (such Sister Vessel, shall be referred to as the “ Unallocated Sister Vessel ”), the relevant Shareholders’ shareholding in the relevant SPV shall not be taken into account in deciding the split of the Sister Vessels under this clause 8.3A and Costamare shall include the Unallocated Sister Vessel in the parcels to be prepared in accordance with the principles set out in clause 8.3B.

Second, with respect to any Vessels that are not Sister Vessels or are an Unallocated Sister Vessel (together the “ Remaining Vessels ”), Costamare shall divide them in two parcels as most nearly reflect a fifty percent share of the Remaining Vessels at the time, both in terms of value and type of Vessel and nature of charter and charterer.

8.4

To the extent that the value of the relevant percentage shareholding of the York Shareholders (the “ York Shareholding ”) or the Costamare Shareholders (the “ Costamare Shareholding ”), respectively, in the Remaining Vessels at the time (as if all SPVs owning Remaining Vessels at the time were held by a holding company and the Shareholders of each SPV were holding their share in the SPVs through such holding) is in excess of the value of the parcel that such Shareholders (the “ reduced Shareholders ”) are to receive pursuant to this clause 8.3B (the “ excess value ”), the other Shareholders (the “ increased Shareholders ”) shall in their sole discretion:

(i)

either pay to the reduced Shareholders an additional cash consideration in United States Dollars equal to the excess value (the “ Cash Balancing Payment ”); or

(ii)

satisfy the Cash Balancing Payment in kind by transferring to the reduced Shareholders ownership of a Vessel or Vessels of value equal to the Cash Balancing Payment and verified by an independent ship valuer appointed jointly by the Parties (the “ In-Kind Balancing Payment ”), provided however that any such transfer to effect an In-Kind Balancing Payment shall not result in the reduced Shareholder owning less than 100% of any Vessel or any Vessel-owning entity; or

(iii)

satisfy the Cash Balancing Payment partly in cash and party by an In-Kind Balancing Payment (the “ Mixed Balancing Payment ”, and together with the Cash Balancing Payment and the In-Kind Balancing Payment, the “ Balancing Payments ” and each a “ Balancing Payment ”), provided however that any Mixed Balancing Payment

shall not result in the reduced Shareholder owning less than 100% of any Vessel or any Vessel-owning entity.

8.5

In the event that there is to be a split of the JV Fleet at the time in accordance with clause 8.1, then the Parties will promptly upon (and in any event within thirty days of) determination of which parcel each Party is to receive under clauses 8.1 and 8.3, procure that the relevant Shareholders complete such Share transfers as are required to ensure that after such transfers each Party or its nominees owns one hundred percent (100%) of the SPVs of the Vessels allocated to it and any Balancing Payments required under clause 8.4 shall be made.

8.6

Following the exercise by Costamare of the Costamare Split Right under clause 8.1, the Costamare Shareholders shall continue to be entitled to receive distributions pursuant to clause 12.3 attributed to the Costamare Incentive Allocations from the SPVs of the Vessels which have been allocated to York pursuant to this clause 8, always up to the Costamare Shareholding and until the earlier of (i) the sale to an unrelated third party on arm’s length terms of the last of the Vessels which have been allocated to York pursuant to this clause 8 and (ii) the Fourth Anniversary. If York sells a Vessel it has been allocated in accordance with the terms of this clause 8 prior to the Fourth Anniversary, the value of such Vessel for the purpose of calculating the Parties’ entitlements to distributions pursuant to clause 12.3 will be the purchase price provided for such Vessel in the relevant sale contract. To the extent that York fails to sell a Vessel it has been allocated in accordance with the terms of this clause 8 by the Fourth Anniversary, such Vessel shall be deemed as being sold to a third party on the Fourth Anniversary (a “ Deemed Sale ”) and the value of such Vessel for the purpose of calculating the Parties’ entitlements to distributions pursuant to clause 12.3 in respect of a Deemed Sale shall be the market value of such Vessel on the Fourth Anniversary as determined by an independent ship valuer (on terms consistent with clause 7.2B(i)) appointed jointly by the Parties for such purpose at the time.

8.7

Subject always to this Agreement being terminated pursuant to clause 18.2B, in the event that following the exercise of a Costamare Split Right, more Vessels are acquired by SPVs under this Agreement (such Vessels, the “ post split Vessels ”), the provisions of clauses 8.1, 8.2, 8.3, 8.4, 8.5 and 8.6 shall continue to apply for any such post split Vessels.

9.	FINANCIAL MATTERS

9.1

The Parties agree that an SPV, in addition to the proceeds of the subscriptions for Shares referred to in clause 3, shall use reasonable endeavours to obtain finance by way of commercial borrowing from third parties on an arm’s length basis for working capital, acquisition of Vessel or other purposes, in accordance with its Business Plan or Budget.

9.2

No Shareholder shall pledge, charge, create a mortgage or otherwise encumber its Shares in an SPV (other than pursuant to a floating charge granted over its entire assets and undertaking).

9.3

No Shareholder shall enter into any derivative arrangements pursuant to which it transfers some or all of the economic rights attaching to its Shares in an SPV or is required to make payments calculated by reference to the returns generated by the economic rights attaching to its Shares in an SPV.

9.4

The Parties will procure that the provisions of this clause 9 are contained in the Shareholders’ Agreement for each SPV.

10.	ACCOUNTING MATTERS

10.1

The Parties shall procure that each SPV shall at all times maintain accurate and complete accounting and other financial records in accordance with the requirements of all applicable laws and US GAAP.

10.2

In addition to the information required by clause 11.4, the Board shall procure that each SPV shall prepare and deliver (or cause to be prepared and delivered) to its respective Shareholders:

unaudited financial statements of that SPV in respect of each quarter, without accompanying notes, in a format agreed by the relevant Shareholders within 60 days of the end of the quarter in question;

a monthly cash flow statement in a form agreed by the relevant Shareholders within 15 days of the end of the month in question;

audited financial statements of that SPV in respect of each fiscal year within 120 days of the end of such fiscal year; and

such other information in relation to the financial position and affairs of that SPV as each Shareholder may from time to time reasonably require.

10.3

Each SPV shall have a financial year ending on 31 December.

10.4

Each Shareholder of an SPV and its authorised representatives shall be allowed access at all reasonable times to examine the books and records of such SPV.

10.5

Each Shareholders of an SPV shall have the right to arrange or conduct an audit or review of any financial information relating to such SPV (at such Shareholder’s own cost) at any time during the course of a financial year.

10.6

The Parties will procure that the provisions of this clause 10 are contained in the Shareholders’ Agreement for each SPV.

11.	budget and business plan

11.1

Each time an Investment Opportunity is presented pursuant to clause 2.1, Costamare shall also prepare a Business Plan in relation to such Investment Opportunity in the form set out in Schedule 2 and deliver the same to York in accordance with the provisions of clause 4.1.

11.2

Once an SPV has been incorporated and a Vessel has been acquired, Costamare shall procure that the relevant Manager prepares a Budget for each financial year in relation to such SPV and its Vessel (starting from the calendar year the relevant Vessel is acquired) in the form set out in Schedule 3. The first Budget of an SPV shall be submitted to the Board of such SPV no later than the commencement of operations of the Vessel of such SPV, and shall require approval by way of a unanimous vote of the relevant Board. Each subsequent Budget of an SPV shall be submitted not later than

60 days before the commencement of the financial year for which the relevant Budget has been prepared for and shall also require approval by way of unanimous vote of the relevant Board.

11.3

Costamare shall also procure that the relevant Manager prepares when necessary a variance report on the then current Budget of the relevant SPV (indicating the actual current position of such SPV (accepting that such information is not prepared to an audit standard) in relation to each line item of such Budget) on a quarterly basis during each financial year. Any such variance report shall be submitted to the Board of such SPV as soon as it is available. Within 14 days of receipt of the relevant variance report, any Director shall be entitled to request such further information as may reasonably be required to enable him or her to reach an informed view as to the content, reasonableness and prudence of the variance report in question.

11.4

The Board of each SPV will regularly review the Budget for such SPV during the course of the financial year of such SPV. Each Board may propose changes to the Budget relevant to it during the course of the relevant financial year, any such changes shall require approval by way of a unanimous vote of the relevant Board. The Parties agree that the relevant Manager may revise the Budget of a Vessel at any time, provided that Costamare furnishes to the Board of the relevant SPV a revised Budget for such Vessel, as soon as practicable after the relevant revisions are determined by the relevant Manager.

11.5

The provisions of clause 30 shall be deemed incorporated mutatis mutandis in any Business Plan or Budget delivered under this Agreement and the person preparing any such Business Plan or Budget shall bear no responsibility whatsoever to any SPV, their respective Shareholders, the Parties or otherwise.

12.	DISTRibutions

12.1

Unless otherwise determined by unanimous consent of the Board of an SPV, upon the sale or total loss of its Vessel, the relevant SPV shall declare and pay a cash dividend to its Shareholders as soon as reasonably practicable, and in any event within thirty (30) days after receipt of the relevant sale or insurance proceeds, equal to the maximum amount permitted by law after the Board deducts from the said proceeds all actual and contingent liabilities of such SPV at the time. Any other income of an SPV, net of reasonable reserves to be established by a unanimous decision of the Board, will be distributed to its Shareholders on the basis of such Shareholders’ agreement regarding dividend policy at the time of incorporating such SPV.

12.2

The Parties will establish a committee consisting of one appointee by each Party that will supervise any distribution of dividends or any other payments by an SPV to its Shareholders (the “ Distributions Committee ”). For purposes of calculating such distributions, the Distributions Committee will aggregate the financial results of all SPVs and will maintain an aggregate IRR calculation for the entire Business and all SPVs.

12.3

For all purposes, distributions from all SPVs (including all net proceeds received by the Shareholders from a Strategic Transaction (whether in cash or deemed as realised in cash) in accordance with clause 12.6) will be aggregated and distributions will be made as follows:

First, one hundred percent (100%) to the Shareholders on a pro rata basis until they have received an amount equal to their total drawn down and invested Commitments;

Second, one hundred percent (100%) to the Shareholders on a pro rata basis until they have received a return equal to ten percent (10%) Internal Rate of Return (the “ First Preferred Return ”) on their total drawn down and invested Commitments;

Third, with respect to any distributions after the First Preferred Return has been met and up to the Shareholders receiving a return equal to fifteen percent (15%) Internal Rate of Return on their total drawn down and invested Commitments (the “ Second Preferred Return ”), ninety percent (90%) to all the Shareholders on a pro rata basis and ten percent (10%) to the Costamare Shareholders (the “ Costamare First Step Incentive Allocation ”) on a pro rata basis;

Fourth, with respect to any distributions after the Second Preferred Return has been met and up to the Shareholders receiving a return equal to twenty percent (20%) Internal Rate of Return on their total drawn down and invested Commitments (the “ Third Preferred Return ”), eighty-two and a half percent (82.5%) to all the Shareholders on a pro rata basis and seventeen and a half percent (17.5%) to the Costamare Shareholders (the “ Costamare Second Step Incentive Allocation ”) on a pro rata basis;

Fifth, with respect to any distributions after the Third Preferred Return has been met and up to the Shareholders receiving a thirty-five percent (35%) Internal Rate of Return on their total drawn down and invested Commitments

(the “ Fourth Preferred Return ”), eighty percent (80%) to all the Shareholders on a pro rata basis and twenty percent (20%) to the Costamare Shareholders (the “ Costamare Third Step Incentive Allocation ”) on a pro rata basis; and

Finally, with respect to any distributions after the Fourth Preferred Return has been met (the “ Fifth Preferred Return ”; and, together with the Second Preferred Return, the Third Preferred Return and the Fourth Preferred Return, the “ Preferred Returns ”), seventy percent (70%) to all the Shareholders on a pro rata basis and thirty percent (30%) to the Costamare Shareholders (the “ Costamare Fourth Step Incentive Allocation ”, and together with the Costamare First Step Incentive Allocation, Costamare Second Step Incentive Allocation, and Costamare Third Step Incentive Allocation, the “ Costamare Incentive Allocations ”) on a pro rata basis.

12.4

The Parties will procure that the Shareholders and Directors of each SPV will take all necessary steps to ensure that the Costamare Incentive Allocations are properly allocated to the relevant Costamare Shareholders and that distributions to the relevant Costamare Shareholders in respect of the Costamare Incentive Allocations are paid simultaneously with any distributions paid to Shareholders in respect of their Preferred Returns.

12.5

Except as otherwise expressly provided herein, without the unanimous approval of the Board of an SPV, no distribution shall be made in any form other than cash prior to the dissolution of such SPV.

12.6

In the event that a Strategic Transaction is consummated, the net proceeds of such Strategic Transaction, after payment of all reasonable and documented fees and expenses incurred in connection with it, shall be distributed pursuant to clause 12.3. When as part of the consideration payable under a Strategic Transaction the York Shareholders do not receive cash for some or all of their Shares, the remaining shares held by the York Shareholders (or their substitutes pursuant to clause 15.2) in the case of a Public Offering or the shares or units in any listed entity received by the York Shareholders as part of the sale consideration (if the parties agree for the consideration not to be wholly in cash) in the case of any other Strategic Transaction, shall, in each case, be treated as being realised at the average of the closing price of such shares or units on the primary exchange on which they are listed for the ten trading days following such listing or other transaction, and shall be considered as a distribution under clause 12.3 together with any distributions made in respect of these shares or units held by the Shareholders (or any of their substitutes pursuant to clause 15.2) in the listed entity and any cash that the York Shareholders may have received due to such Public Offering or other Strategic Transaction. To the extent that a payment attributed to the Costamare Incentive Allocations (the “ Payment ”) is due to the Costamare Shareholders under clause 12.3 after such Public Offering or other Strategic Transaction and any deemed realisation, then York and/or the York Shareholders shall make a “fraction” of such Payment in cash and the remainder of such Payment shall be made in shares of the relevant listed entity immediately after the end of the ten trading days following such listing or, as the case may be, such other transaction, whereupon York and/or the York Shareholders shall deliver to Costamare or to its order such number of shares or units as their value equals such remainder. The Parties agree to procure that the Parties and all Shareholders at the time shall take whatever steps are required for the provisions of this clause 12.6 to be

given full effect. For the purposes of this clause “fraction” shall mean (i) in the case of a Public Offering, a fraction having as numerator the number of shares sold by the York Shareholders in the relevant Public Offering and as denominator the number of shares held by the York Shareholders immediately prior to such Public Offering being consummated and (ii) in the case of any other Strategic Transaction where part of the consideration is paid in shares and/or units of a listed entity, a fraction having as numerator the value of the shares and/or units received by the York Shareholders in relation to such Strategic Transaction and as denominator the aggregate of the value of the shares and/or units and the cash received by the York Shareholders in relation to such Strategic Transaction.

12.7

Each time the Costamare Split Right is exercised pursuant to clause 8.1, the provisions of clause 8.6 shall apply as regards any payments to be made to the relevant Shareholders under clause 12.3, including any payments attributed to the Costamare Incentive Allocations, and such payments shall be made, as applicable, either at the time of the sale of a Vessel or at the time of the Deemed Sale of a Vessel.

12.8

On an annual basis following the termination of the Commitment Period, as well upon completion of a Strategic Transaction or termination of this Agreement, the Parties shall determine whether on an aggregate basis taking into account all amounts realised and distributed, they have received the correct amounts pursuant to clause 12.3, including with respect to any amounts owed to Costamare Shareholders pursuant to the Costamare Incentive Allocations, and if there has been any overpayment the Shareholders receiving such overpayment shall make such payments to the other Shareholders, as are required to ensure that after receipt of such payments each Shareholder has on an aggregate basis received the amounts it should have received under clause 12.3.

12.9

Notwithstanding anything to the contrary contained herein but always subject to clauses 12.7 and 12.8, no Distribution shall be made if, after giving effect to the Distribution, (i) the relevant SPV would not be able to pay its debts as they become due in the usual course of business; or (ii) such Distribution is otherwise contrary to applicable law.

13.

TAXATION

13.1

The Parties agree that each SPV shall be incorporated in the Republic of the Marshall Islands for so long as they may lawfully do so, subject to contrary tax advice.

13.2

The Board of each SPV shall procure that, to the extent possible, the auditors appointed pursuant to clause 6.1 shall be instructed for and on behalf of each SPV to (i) determine whether such SPV shall be treated as a “passive foreign investment company” for purposes of the United States Internal Revenue Code of 1986, as amended (the “Code”) and (ii) facilitate a Shareholder in seeking to make and maintain a valid qualified electing fund election (within the meaning of Section 1295 of the Code) for such SPV characterised as a passive foreign investment company (within the meaning of Section 1297 of the Code).

13.3

The Parties agree that, to the extent requested by any Shareholder, the Board of each SPV shall make on behalf of the SPV a protective “check-the-box” election to classify the SPV as a corporation for U.S. tax purposes, provided that any request by

Costamare for the Board of an SPV to make an election to classify such SPV as a partnership for U.S. tax purposes shall prevail.

14.	TRANSFER OF SHARES

14.1

Save as permitted by this clause, no Shareholder shall sell, transfer, or otherwise dispose of any Share, or any interest in any Share (including any voting right attached to it), enter into any agreement in respect of the votes attaching to any Share or enter into any agreement, conditional or otherwise, to do any of the foregoing. The SPV shall procure that the Board declines to approve for registration any transfer of Shares which does not comply with the provisions of this clause 14.

14.2

Subject always to clause 14.3, a Shareholder (the “ Transferor ”) may sell, transfer or otherwise dispose of any of its Shares:

to an Affiliate of the Transferor (subject to clauses 14.4 and 14.5); or

to any person with the written consent of the other Shareholder.

14.3

It shall be a condition of any allotment, issue or transfer of a Share in an SPV or any interest therein to a person who is not a party to this Agreement that such person (the “ Transferee ”) shall duly adhere to and become a party to the Shareholder Agreement of such SPV (as a Shareholder of such SPV) by executing a deed of adherence to the Shareholder Agreement, and the relevant SPV shall not register the Transferee or otherwise admit such Transferee as a Shareholder of such SPV unless and until such deed of adherence has been so executed by the Transferee to the reasonable satisfaction of the Parties to this Agreement.

14.4

Where a Shareholder (the “ Original Shareholder ”) has transferred Shares to an Affiliate pursuant to clause 14.2A, such Affiliate shall, if it ceases to be an Affiliate of the Original Shareholder, be obliged, as soon as practicable and in any case within five (5) Business Days after such cessation, to transfer its Shares in the SPV back to the Original Shareholder (or, if the Original Shareholder so notifies the SPV, to any continuing Affiliate of such Original Shareholder). As security for such obligation, each Affiliate which becomes a Shareholder irrevocably appoints the SPV (which accepts such appointment) as its attorney to execute any such transfer on its behalf (whether as transferor or transferee) at such consideration as the relevant Original Shareholder shall notify to the relevant SPV. In order that such SPV is able to monitor whether any obligations arise in relation to this clause 14.4, each Affiliate which has become a Shareholder shall notify the relevant SPV and the other Shareholders of such SPV forthwith if it ceases to be an Affiliate of the Original Shareholder or if its Transferee ceases to be an Affiliate of it, and the relevant Original Shareholder shall each provide the SPV and other Shareholders with such evidence as may be reasonably required to ensure that no obligations have arisen in relation to it pursuant to this clause 14.4.

14.5

Where an Affiliate has acquired Shares pursuant to a transfer (or subsequent transfer or a series of transfers) under clause 14.2A, the relevant Shareholder of whom the Transferee is an Affiliate shall remain liable for the performance by such Affiliate of its obligations under this Agreement and/or the relevant Shareholders’ Agreement, in the event that such Affiliate fails to perform any of them, as if such failure were its own.

14.6

Clause 14 shall not apply to any procedure pursuant to clause 8.

14.7

The Parties will procure that the provisions of this clause 14 are contained in the Shareholders’ Agreement of each SPV.

15.	strategic transaction

15.1

In connection with any proposed Strategic Transaction and to the extent necessary to facilitate such Strategic Transaction, the Parties may mutually agree to: (1) form a corporation (the assets of which would consist of interests in the SPVs) or amend this Agreement to provide for a conversion in accordance with the relevant laws of the SPVs to a corporation or such other capital structure as the Parties may determine; (2) distribute equity interests in the resulting company to the relevant Shareholders at the time in percentage interests consistent with such Shareholders’ respective interests in the SPVs; (3) form a subsidiary holding company and distribute its shares to the Parties; (4) move the SPVs or any successors to another jurisdiction to facilitate any of the foregoing; or (5) take such other steps as the Parties deem necessary to create a suitable vehicle for a Strategic Transaction, in each such case in accordance with the relevant laws of the SPVs, and in each case for the express purpose of a Strategic Transaction.

15.2

If the Parties undertake Strategic Transaction pursuant to clause 15.1, the Parties shall take such actions as may be reasonably required and otherwise cooperate in good faith with the relevant Shareholders and the Boards of the SPVs in connection with consummating the Strategic Transaction and to take any other actions required in order to effectuate the Strategic Transaction.

15.3

For the avoidance of doubt, no Strategic Transaction can be pursued unless the Parties and the relevant Shareholders at the time agree in writing that such Strategic Transaction may be pursued.

16.	EXCLUSIVITY, NON-COMPETE and Non-solicitation

16.1

The Parties’ relationship with respect to the Business will be on an exclusive basis during the Commitment Period and neither York and the York Shareholders nor Costamare and the Costamare Shareholders will be permitted to acquire Vessels in the container industry, whether directly or indirectly, whether alone or with any other partner or co-investor during the Commitment Period other than in accordance with this Agreement, provided however , that nothing in this Agreement shall be interpreted to preclude: (i) the Parties from investing in Non-Controlling Equity Stakes of other container shipping companies (unless such investment is done in the form of arrangements of the nature described in the Background Section of this Agreement) or (ii) York or any of its Affiliates from investing in the debt of other container shipping companies or any other person (whether or not as part of a loan-to-own strategy or with the aim to enter into debt-to-equity swaps or other forms of debt or capital restructuring of that business or person and the entry into any related transactions) (with each of the investments described in (i) and (ii) being, a “ Permitted Transaction ”); or (iii) any member of the Group of the Parent acquiring a Vessel owned (in accordance with the terms of this Agreement) by another member of the Group of the Parent or (iv) any member of the Group of York acquiring a Vessel owned (in accordance with the terms of this Agreement) by another member of the

Group of York (with each of the investments described in (iii) and (iv) being, an “ In-house Transaction ”).

No Party shall be in breach of (or subject to the terms of) this clause 16 or be otherwise in breach of (or subject to the terms of) this Agreement, where it acquires an interest in a Vessel or relevant SPV: (i) upon enforcement of security or in satisfaction of a judgment; (ii) following the exercise or realisation of any of its rights as a creditor to a business or any person (including, without limitation, by way or, or as a result of, debt-to-equity swaps; loan-to own-strategies or any other form of debt or capital restructuring); or (iii) by way of any other arrangement or transaction having a similar effect, but in the cases of (ii) and (iii) subject to clause 16.2.

16.2

Subject to clause 16.6, if, as a result of the exercise or realisation of any of its rights as a creditor to a business or any other person (including, without limitation, by way or, or as a result of, debt-to-equity swaps, loan-to-own strategies or any other form of debt or capital restructuring or any other arrangement or transaction having a similar effect), York acquires one or more Vessels or a Controlling Equity Stake in a Container Entity, York shall provide a notice to Costamare (the “ Offer Notice ”) within 7 Business Days following the transfer of title in all such Vessels or Controlling Equity Stake to York, proposing that all such Vessels or Controlling Equity Stake shall be acquired from York by the Business at the Relevant Price (as defined in clause 16.4).

16.3

Costamare shall have the right, at its sole discretion, to determine whether or not the Business should acquire the Vessel(s) or the Controlling Equity Stake in accordance with the above, by providing a notice (the “ Acceptance Notice ”) within five (5) Business Days of receipt of the Offer Notice, failing which such right will expire. The Acceptance Notice shall set out: (i) the percentage of equity not exceeding 49% (the “ Required Shares ”) that Costamare wishes to subscribe for in the relevant SPV which will acquire the Vessels or the Controlling Equity Stake from York; and (ii) the date on which the acquisition will be exercised (including the manner and date or dates, as the case may be, for payment of the relevant proportion of the Relevant Price (as defined in clause 16.4) for the Required Shares by Costamare to York) (the “ Exercise Date ”) which shall be no later than five (5) Business Days after the incorporation of the SPV in accordance with clause 16.5. Payment of the relevant proportion of the Relevant Price should be made by Costamare at the same time and, if practicable, in the same manner as the payment from York, being not earlier than five (5) Business Days after the incorporation of the SPV, provided however that if payment of the relevant proportion of the Relevant Price is to be made in instalments, any failure by Costamare to make the first such instalment shall cause Costamare’s right to participate in the acquisition to lapse.

16.4

For the purpose of this clause 16, the Relevant Price means:

where York acquires Vessel(s), the higher of:

(i)

the aggregate of the fair market value of each of the Vessels, as determined by a valuation obtained by an independent and reputable third-party ship valuer jointly appointed by the Parties (each such valuation to take into account the value of any charter or other employment agreement of the relevant Vessel(s) in excess of twelve months at the time such valuation is obtained (without taking into

account any options of the charterer of a Vessel to extend contained therein); and

(ii) the aggregate of all the amounts invested by York (or its Affiliates): (1) in the acquisition of the debt of the relevant business or person referred to in clause 16.2 (including the purchase price of such debt and any related expenses, advisers’ fees and other costs less any earlier recoveries of principal of such debt (whether by way of repayment, realization or otherwise) and disregarding any interest paid in respect of such debt by that business of person); and (2) in the realisation or exercise of its rights as a creditor (including any related expenses, advisers’ fees and other costs) (all such amounts being the “ Debt Investment ”). If as a result of the realization or exercise of its rights as a creditor to the relevant business or person (referred to in clause 16.2), York received other assets or interests in addition to the Vessels, the amount of Debt Investment to be taken into account for the purpose of this sub-clause 16.3, shall be: (1) in respect of the purchase price of the debt and the related expenses or earlier principal recoveries, the amount attributable to the Vessels calculated pro rata on the basis of the fair market value of the Vessels and all the other assets and interests received by York or its Affiliates following such realization or exercise or rights (with the fair market value of the Vessels being calculated on the basis set out in (i) above); and (2) in respect of all other amounts invested or spent in the realisation of the assets and all the related expenses, such amounts as may be attributable to the Vessels (on a pro rata basis or otherwise, as applicable).

where York acquires a Controlling Equity Stake in a Container Entity, the higher of:

(i)

the fair market value of such equity stake, which if not agreed by the Parties, shall be determined by a valuation obtained by an independent and reputable third-party accountant jointly appointed by the Parties; and

(ii)

the Debt Investment (as defined in the first paragraph of clause 16.4A(ii)), provided that if the Container Entity owns other assets and interests in addition to the Vessels, the amount of Debt Investment to be taken into account for the purposes of this paragraph clause 16.4B(ii) shall be calculated pro rata on the basis of the fair market value of the Vessels and all the other assets and interests owned by the Container Entity at the time (with the market value of the Vessels being calculated on the basis set out in clause 16.4A(i) above).

16.5

Within three (3) Business Days of receipt by York of an Acceptance Notice as set out in clause 16.3, the Parties shall promptly name the Shareholders to incorporate the SPV to acquire the Vessel(s) or the Controlling Equity and procure that such Shareholders shall:

proceed with the incorporation of the relevant SPV with the Required Shares being issued to the Costamare Shareholder (subject to clause 3.6) and all the other Shares being issued to the York Shareholder;

appoint in relation to such SPV a Board in accordance with the provisions of clause 5;

enter into a Shareholders’ Agreement;

procure that the relevant SPV’s constitutional documents reflect, to the extent permitted by law, the provisions of such Shareholders’ Agreement;

procure that the relevant SPV enters into a Management Agreement with Costamare Shipping and/or, if directed by Costamare in writing, V.Ships Greece Ltd (provided that terms of the Management Agreement are not materially worse than the terms of the management agreements in place (if any) in respect of such Vessel); and

if a Newbuild Vessel is acquired by York as a result of such realization or exercise of rights, procure that the relevant SPV enters into a Supervision Agreement with Costamare Shipping,

16.6

Notwithstanding clauses 16.2 to 16.5 (and subject to clause 16.7), York shall not be required to offer the Vessels or the Controlling Equity Stake referred to in clause 16.2 to Costamare or the Business, if:

where York acquires Vessel(s) in accordance with the above:

(i)

York (together with its Affiliates) do not solely own such Vessel(s) and/or are subject to the consent of any third party for the transfer of the title, rights or interest in the Vessel(s); and

Where York acquires a Controlling Equity Stake in a Container Entity in accordance with the above:

(i)

the sale of the Controlling Equity Stake is restricted by regulation, the by-laws or such Container Entity or any other any contractual obligations relating to such equity stake or to the debt or capital restructuring (as a result of which York has acquired such equity stake), unless York has entered into such contractual arrangements for the purpose of avoiding the need to submit an Offer Notice in accordance with clause 16.2; or

(ii)

the sale of the equity stake is subject to any pre-emptive rights of any third party;

(iii)

the consent of any third party is otherwise required for the transfer of the title, rights or interest in the equity stake.

16.7

If, pursuant to clause 16.6, York is not required to offer the relevant Vessels or the Controlling Equity Stake to the Business due to the requirement to obtain the consent of any third party(ies), York shall (to the extent reasonably practicable) use reasonable

efforts to obtain such consent from the relevant third party(ies) provided that, for the avoidance of doubt, York shall not be required to pay any fees, incur any material costs or enter into any significant process to obtain such consent. Following the receipt of such consent, if York still owns the relevant Vessel or Controlling Equity Stake (and subject always to clause 16.6), York shall be required to offer the same to the Business within 7 Business Days of obtaining the required consents, in accordance with clauses 16.2 to 16.5 which shall apply mutatis mutandis.

16.8

To the extent reasonably practicable York shall use reasonable efforts to negotiate the contractual arrangements relating to the realisation or exercise of its rights referred to in clause 16.2 so as to allow it make an offer to the Business in respect of the relevant Vessel or Controlling Equity Stake without the need for a consent from any third party.

16.9

To the extent York owns a Vessel or a Controlling Equity Stake in a Container Entity which is not required to be offered to the Business in accordance with clause 16.6, York shall use reasonable efforts to procure (in so far as it is lawfully able to do so) the engagement of the Manager to provide management services for that Vessel (or a Vessel owned by the Container Entity) provided that:

if the Vessel is already subject to a management agreement with a third party, York (or the Container Entity) shall not be required to terminate, or procure the termination of, such agreement and/or take any steps which might reasonably be expected to require the payment of any penalties or break fees (unless Costamare agrees to reimburse and indemnify York for any such fees or penalties on terms satisfactory to York); and

the terms of the management agreement proposed by Costamare are not materially worse than the terms of the Management Agreements entered into pursuant to the Framework Deed and if the Vessel is already subject to a management agreement with a third party, the terms proposed by Costamare are not materially worse than those under the management agreement in place with the third party.

16.10

If York wishes to invest in a debt of any person and such investment is reasonably likely (at the time of such investment) to result in York owning a Vessel or a Controlling Equity Stake in a Container Entity, York shall provide Costamare with:

a notice (an “ Investment Offer Notice ”):

(i)

setting out the name of the company, business or person who is the borrower of such debt;

(ii)

setting out the principal terms of the investment;

(iii)

the proposed date by which the investment is to be made; and

(iv)

proposing that the debt investment shall be made through the Business,

provided that: (i) York shall not be required to provide or disclose the name of such person if such disclosure is restricted under the terms of any confidentiality

arrangements with a third party provided that to the extent reasonably practicable, York shall use reasonable efforts to negotiate such agreement and/or to obtain the required consents to allow the disclosure of such details to Costamare; and (ii) to the extent York incurred or paid (or is required to pay) fees or any material costs in obtaining such information, Costamare is willing to share such costs equally with York.

16.11

Costamare shall have the right, at its sole discretion, to determine whether or not the Business should invest in the debt on the terms set out in the Investment Offer Notice by providing an acceptance notice (the “ Investment Acceptance Notice ”) within five (5) Business Days of receipt of the Investment Offer Notice. An Investment Acceptance Notice shall also set out the percentage of equity not exceeding 49% that Costamare wishes to subscribe for in the relevant SPV which will acquire the debt. Following the receipt of an Investment Acceptance Notice, the Parties shall act in accordance with clause 16.5 (excluding paragraphs E and F of that clause and as if references in that clause to an “Acceptance Notice” were references to the “Investment Acceptance Notice”) and Costamare shall act in accordance with clauses 3.2, 3.3, 3.9 and 3.12 as such clauses relate to Costamare only.

16.12

If, acting in good faith, York considers that following the procedure set out in clauses 16.10 or 16.11 may jeopardise its ability to invest in such debt, York shall be entitled to purchase the debt and subsequently propose it to the Business in accordance with clauses 16.10 and 16.11 which shall apply mutatis mutandis.

16.13

If Costamare rejects the offer under the Investment Offer Notice or does not provide an Investment Acceptance Notice in accordance with clause 16.11 or does not provide the funds to the SPV for the investment in the debt by the time agreed to by the Parties, York shall be entitled to carry out the investment in the debt on substantially the same terms as set out in the Investment Offer Notice and any subsequent related investment (on such terms as York may see fit) in the debt of such person without the need to offer it to the Business.

16.14

If during this Agreement and in connection with its equity investment in a container shipping company (the “ Investee ”) and other than pursuant to a Permitted Transaction, York or the Fund Manager or their respective Affiliates or employees or officers is to become a member of the Investee’s board of directors, York will provide notice thereof to Costamare. If Costamare objects to such board membership and York nevertheless informs Costamare in writing that it intends for such person to join the Investee’s board, Costamare will have a period of up to two (2) weeks following such notification from York to terminate this Agreement. York will not be in breach of this clause merely by York or the Fund Manager exercising non-voting observer rights in respect of board meetings.

16.15

Notwithstanding anything in this Agreement, the Parties agree that after the Effective Date and until the end of the Commitment Period and other than pursuant to a Permitted Transaction or pursuant to an In-house Transaction, neither Party will acquire a Vessel without first making it available, in accordance with the terms of this Agreement, for acquisition by the Business (the Party presenting such Vessel for acquisition, the “ Offering Party ” and the other Party, the “ Non-Offering Party ”).

16.16

The exercise of this right of first refusal shall be at the Non-Offering Party’s sole and absolute discretion. The Non-Offering Party shall exercise this right within five (5)

Business Days, failing which such right will expire (and if the Offering Party acquires the Vessel prior to the expiry of the five (5) Business Day Period, it shall be deemed to have given the Non-Offering Party the option to have an SPV acquire the relevant Vessel for the Business on the same terms (including as to price) as the Offering Party, which shall be exercised within the same five (5) Business Day Period). In the event that the Non-Offering Party does not exercise its right of first refusal, the Offering Party shall be permitted to acquire the Vessel, provided however , that such acquisition is on terms no more favourable to the Offering Party than those offered to the Business.

16.17

Either Party to this Agreement shall retain the right to purchase any Vessel that the other Party has previously rejected under this Agreement upon the same terms as were rejected (including as to price), provided however that in the event that York is the purchaser of such Vessel, Costamare will agree to provide management services for that Vessel on materially the same terms as any relevant Management Agreement, should York elect to engage Costamare for such services.

16.18

During the term of the Agreement Costamare will, where it wishes to charter a vessel of the same type as a Vessel that is available for charter by the Business, provide the Business with an indicative arm’s length charter bid on prevailing market terms, and, unless York objects within five (5) Business Days, the Vessel shall be chartered to Costamare on such terms. Costamare shall provide York with such information as it may reasonably require to verify that the terms of the charter are arm’s length market terms.

16.19

All promises and obligations of a Party under this clause 16 shall equally apply to the Parent and the Fund Manager (for itself and on behalf of the York Funds), respectively, as if they are direct promises and obligations of the Parent, the Fund Manager and/or the York Funds, respectively.

16.20

The Parties will procure that the relevant provisions of this clause 16 are contained in the Shareholders’ Agreement of each SPV. For the avoidance of doubt, any investment between York and Costamare in an SPV in accordance with this clause 16 shall be subject to the provisions of clause 5.

17.	CONFIDENTIALITY

17.1

Each Party shall keep and treat as strictly confidential and not at any time disclose or make known in any way to any person who is not a Party, or use for a purpose other than the performance of its obligations under this Agreement, any information which it now possesses or which may come within its knowledge during the term of this Agreement, in relation to or connected with or arising out of this Agreement or the matters contained in it, the existence of this Agreement or the business, activities or affairs of any other Party (together “ Confidential Information ”) or, through any failure to exercise all due care, cause any unauthorised disclosure of any Confidential Information and will make every effort to prevent the use or disclosure of such information, except that these restrictions do not apply to the disclosure of Confidential Information if and to the extent that:

disclosure is required by law or for the purpose of any judicial proceedings or requested by any regulatory authority, government body or recognised securities exchange, including the NYSE (each a “ Disclosure ”), provided

however, that prior to such a Disclosure and to the extent permitted by law and, in the case of a Disclosure other than the Disclosure in relation to the entry into this Agreement, practicable, the Parties shall consult with each other and shall give due consideration to the other Party’s reasonable comments regarding the content, timing and manner of the Disclosure;

the information is or becomes publicly available other than as a result of a breach of any undertaking or duty of confidentiality by any Party or Affiliate of a Party;

as a result of the Public Offering of the common units of Costamare Partners or any other Affiliate of the Parent;

the information is disclosed on a strictly confidential basis by a Party to its advisers, auditors and other professional service providers for the purposes of the Business;

disclosure is by a Party to a member of its Group, provided that it shall procure that such Group member shall keep such information confidential upon the terms of this clause 17; or

the relevant Parties have given their prior written consent to the contents and manner of the disclosure.

17.2

The provisions of this clause 17, to the extent that they relate to general commercial information, shall continue in force in accordance with their terms until the termination of this Agreement.

17.3

The provisions of this clause 17, to the extent that they relate to confidential know-how or information in relation to a Party, shall continue in force in accordance with their terms for the continuance of this Agreement and following its termination.

17.4

All promises and obligations of a Party under this clause 17 shall equally apply to the Parent and the Fund Manager (for itself and on behalf of the York Funds), respectively, as if they are direct promises and obligations of the Parent and the Fund Manager and/or the York Funds, respectively.

17.5

The Parties will procure that the provisions of this clause 17 are contained in the Shareholders’ Agreement of each SPV.

18.	termination ANd winding up

18.1

This Agreement shall automatically terminate:

on the date falling fifteen (15) Business Days after the end of the Commitment Period, if no SPV has been incorporated or is in existence at the time;

upon the last SPV being wound up in accordance with the terms of this Agreement, provided that the Commitment Period has in the meantime expired;

upon the completion of a Strategic Transaction for all the Business, provided that the Commitment Period has in the meantime expired; and

upon all Shares in all SPVs being held only by York Shareholders or, as the case may be, Costamare Shareholders.

18.2

This Agreement may be terminated by Costamare by notice to York to this effect:

in accordance with the provisions of clause 16.14; or

in the event that Costamare has exercised its Costamare Split Right,

provided however, that in the case of clause 18.2A, it shall remain in effect until all then-existing SPVs are wound up.

18.3

This Agreement may be terminated by either Party at any time:

after the other Party, the Parent, the Fund Manager, and/or any of the York Funds that at the relevant time is invested in York shall have a liquidator or trustee appointed or an administrative receiver, receiver or manager appointed over the whole or substantially the whole of its assets or undertaking or shall suffer any similar event in any jurisdiction (and, in the case of any York Funds formed as limited partnerships, if the relevant limited partnership agreement is terminated), and such event is continuing;

the relevant Shareholder of an SPV fails to provide its capital contribution in such SPV in accordance with the relevant Investment Notice issued pursuant to clause 4.5; or

the relevant Shareholder of an SPV fails to provide or procure the provision of the relevant Shareholder Support (as such term is defined below) pursuant to clause 19,

provided however, that, in each case, this Agreement shall remain in effect until all then-existing SPVs are wound up.

18.4

Each Party undertakes that it will notify the other Party promptly upon the occurrence of any of the events specified in clause 18.3A.

18.5

The provisions of this clause 18 shall be without prejudice to any right or obligation of any Party or a Shareholder arising under this Agreement or another agreement and shall not affect any provision of this Agreement which is expressly or by implication provided to come into effect upon, or to continue in effect after, such termination.

18.6

Save as otherwise agreed by the Parties by an instrument in writing and unless Costamare exercises its Costamare Split Right in accordance with clause 8.1A, on the Fourth Anniversary or in the event that this Agreement is terminated pursuant to clauses 18.2 and/or 18.3, all then existing SPVs shall be wound up immediately, except to the extent necessary to allow an orderly winding up of their affairs, including the liquidation of their assets as promptly as practicable and dissolution of the entities. In case of such dissolution, distributions will be made according to clause 12.

18.7

Without prejudice to clause 18.5, clauses 1, 12, 17.3, 18.7, 23, 26, 28, 31, and 32 shall survive termination of the Agreement.

19.	Guarantees, indemnities and other ASSURANCE

19.1

This clause 19 shall apply in respect of the provision of any guarantee, indemnity or other assurance which a third party may require in respect of the indebtedness or other obligations of any SPV (including such support by any other member of the Group of a Party as a Business Plan may set out or the Parties may have agreed in writing) (“ Shareholder Support” ).

19.2

If the Business Plan of an SPV or the financing in relation thereto or any other transaction agreed in either case by the Board of such SPV, requires that the Shareholders of such SPV should provide or procure the provision of any Shareholder Support, then such Board or, failing that, any Director of such SPV, may, by giving not less than 5 Business Days’ written notice to the Shareholders of such SPV, require that each of the relevant Shareholders provides or procures the provision of Shareholder Support pro rata to such Shareholders’ shareholding participation to such SPV (taking into account the exercise (if any) of a Costamare Option in relation to such SPV), but otherwise on the same terms and in the same manner.

19.3

Any Shareholder Support provided pursuant to this clause 19 shall be provided to the relevant SPV without charge and on such other terms as the requiring Shareholder may reasonably determine.

19.4

For so long as a Shareholder of an SPV has failed (such Shareholder, a “ failing Shareholder ”) to provide or procure the provision of the relevant Shareholder Support, and notwithstanding any other provisions of this Agreement, such Shareholder shall not be entitled to exercise any of its rights under this Agreement with respect to that SPV.

19.5

The Shareholders of an SPV shall bear the aggregate amount of any Actions or Losses suffered or incurred by them or either of them or by a member of a Shareholder’s Group pursuant to any Shareholder Support in respect of such SPV (irrespective of whether such Shareholder Support is given on a joint, several or joint and several basis) given by them or either of them or a member of such Shareholder’s Group pursuant to this clause 19, and each such Shareholder of an SPV shall, subject to clause ‎19.6, indemnify the other accordingly.

19.6

If any Actions or Losses as are referred to in clause‎ 19.5 are suffered or incurred solely as a result of a default by one Shareholder of an SPV or by a member of the Group of such Shareholder, then the whole of any such Actions and Losses shall be borne by such Shareholder which shall indemnify the other Shareholder of such SPV and the relevant SPV accordingly.

19.7

Any payments to be made pursuant to clause19.5 or clause 19.6 shall be made forthwith on demand.

19.8

Nothing in this Agreement shall operate to deprive either of the Shareholders of an SPV of any rights or remedies available to it at law against the other Shareholder of such SPV, except insofar as any rights or remedies are inconsistent with or expressly excluded by the terms of this Agreement.

19.9

Save as otherwise provided in this clause 19 neither of the Shareholders of an SPV shall be obliged to give any Shareholder Support in respect of the liabilities or obligations of such SPV.

19.10

References in this clause19 to any Shareholder Support being given by a Shareholder of an SPV shall include any Shareholder Support which is still outstanding and was given or procured by a previous shareholder of such SPV through whom previous shareholder that Shareholder derives its title to its Shares in such SPV, and references in clause‎19.6 to a default of a Shareholder of an SPV include a default by any such previous shareholder or a member of its Group.

19.11

The Parties will procure that the provisions of this clause 19 are contained in the Shareholders’ Agreement of each SPV.

20.	Representation and WARRANTIES

20.1

Each Party represents and warrants to the other that:

	A.	it is duly organised, validly existing and (to such extent such concept is relevant under its jurisdiction) in good standing under the laws of its jurisdiction of incorporation or formation, with all requisite power and authority to enter into and perform its obligations under this Agreement;

this Agreement has been duly authorised, executed and delivered by such Party, constitutes the legal, binding obligations of such Party and is enforceable in accordance with its terms except insofar as enforcement may be limited by bankruptcy, insolvency or other laws relating to or affecting enforcement of creditors’ rights or general principles of equity;

it has and shall maintain any authorisations, consents or approvals required from any governmental authority or other person for such Party to enter into and perform its obligations as envisaged by this Agreement;

all corporate, partnership or other actions on the part of such Party necessary for the authorisation, execution and delivery of this Agreement, and the consummation of the transactions and agreements contemplated hereby, have been taken; and

neither the execution and delivery of this Agreement by such Party nor the consummation of the transactions or agreements contemplated herein, conflict with or contravene the provisions of such Party’s organisational documents or any agreement or instrument by which it or its properties are bound, or any law, rule or regulation, order or decree to which its or its properties are subject.

20.2

The Fund Manager further represents and warrants to Costamare that:

the York Funds are managed, sponsored or advised by the Fund Manager or its Affiliates and that they shall remain so throughout this Agreement;

throughout the Commitment Period, it shall procure that the York Funds will invest in York and shall capitalize York when and as needed so that York

invests its funds in the Business by co-investing with Costamare in SPVs in accordance with the terms of this Agreement; and

it has full discretionary management authority to:

(i)

determine whether a York Fund will invest its funds in York and procure that York invests its funds in an SPV;

(ii)

to direct a York Fund to invest in York and procure that York subscribes in the Shares of an SPV and sign this Agreement and/or any of the relevant documents in respect of an SPV; and

(iii)

to procure the appointment of decision-making persons in York and procure that York appoints Directors in each SPV and to change the same as and when required in accordance with this Agreement and the relevant Shareholders’ Agreement,

and that it shall maintain such authority throughout this Agreement.

20.3

The Fund Manager further represents and warrants to Costamare that York will have no other shareholders, partners or members other than one or more of the York Funds.

20.4

The Parent further represents and warrants to York that it is, and will remain throughout the period of this Agreement, the sole shareholder of Costamare with full authority to appoint and/or change the directors of Costamare.

21.	power of attorney by way of security

21.1

Costamare hereby irrevocably appoints York (and will procure that, to the extent required, any Costamare Shareholder also appoints York) as its respective attorney to execute and deliver the documents required to be executed and delivered pursuant to clauses 7.4, 8.5, 12.4 and 15.2 (as the case may be) and for the purposes set out therein and, if required, Costamare (or will procure that the relevant Costamare Shareholder) will ratify such signature or action by its attorney. The power of attorney in this clause is deemed to be coupled with an interest and given by way of security for the obligations of Costamare and/or the Costamare Shareholder of each SPV under this Agreement.

21.2

York hereby irrevocably appoints Costamare (and will procure that, to the extent required, any York Shareholder also appoints Costamare) as its respective attorney to execute and deliver the documents required to be executed and delivered pursuant to clauses 7.4, 8.5 and 15.2 (as the case may be) and for the purposes set out therein and, if required, York (or will procure that the relevant York Shareholder) will ratify such signature or action by its attorney. The power of attorney in this clause is deemed to be coupled with an interest and given by way of security for the obligations York and/or the York Shareholder of each SPV under this Agreement.

22.

GENERAL

22.1

The Parties shall not engage in any activity, practice or conduct which would constitute an offence under any anti-bribery or corruption law applicable to that Party,

including, to the extent applicable, but not limited to the UK Bribery Act 2010 and the US Foreign Corrupt Practices Act 1977 (together “ Applicable Law ”).

22.2

The Parties have and shall maintain in place, adequate procedures designed to prevent any associated person from undertaking any conduct that may give rise to an offence under any Applicable Law.

22.3

Each Party undertakes to the other Party that all actions required of it under this Agreement shall be carried out in a timely manner.

22.4

If there shall be any conflict between the provisions of this Agreement and the provisions of the constitutional documents or the Shareholders’ Agreement of an SPV, then as between the Parties the provisions of this Agreement shall prevail.

22.5

Save as expressly contemplated by this Agreement, this Agreement is personal to the Parties, the Parent and the Fund Manager and none of them may assign, mortgage, charge or sub-license any of its rights under this Agreement, or sub-contract or otherwise delegate any of its obligations under this Agreement, except with the prior written consent of the other Party.

22.6

Nothing in this Agreement shall create, or be deemed to create, a partnership at law, or the relationship of principal and agent, between the Parties or any of them.

22.7

This Agreement shall come into force and effect upon all the following conditions precedent being satisfied by no later than 19 May 2013 or such other later date as may have been agreed by the Parties in writing (19 May 2013 or any agreed later date, the “ Last Date ”):

(A)

both Parties confirming in writing that they have taken all necessary corporate action to approve this Agreement and the matters contemplated herein;

(B)

Costamare confirming to York in writing that it has received satisfactory to it advice by U.S. and Marshall Islands counsel in connection with this Agreement and the matters contemplated herein;

(C)

York confirming to Costamare in writing that it has received satisfactory to it advice by Marshall Islands counsel in connection with this Agreement and the matters contemplated herein; and

(D)

the Parties agreeing the pro-forma Management Agreement, the pro-forma Supervision Agreement, the pro-forma Shareholders’ Agreement, the pro-forma constitutional documents of each SPV and any other documents that need to be agreed thereunder or in relation thereto.

In the event that any of the above conditions are not satisfied by 12:00 p.m. GMT on the Last Date, this Agreement shall never come into effect and neither the Parties nor the Parent nor the Fund Manager shall incur any liability or obligation against each other hereunder or in relation hereto.

23.	ENTIRE AGREEMENT

23.1

This Agreement, each Shareholders’ Agreement, the constitutional documents of each SPV and any other documents referred to in this Agreement constitute the entire agreement between the Parties and, as the case may be, the relevant Shareholders and supersede and extinguish all previous drafts, agreements, arrangements and understandings between them, whether written or oral, relating to its subject matter.

23.2

No amendment shall be made to this Agreement save by instrument in writing signed by the Parties and, to the extent it concerns, rights or obligations of the Parent and/or the Fund Manager (for itself and on behalf of the York Funds), the Parent and/or the Fund Manager, respectively.

24.	SEVERABILITY

If any provision of this Agreement is held by any court or other competent authority to be void, invalid or unenforceable in whole or in part, this Agreement shall continue to be valid as to its other provisions and the remainder of the affected provisions; and the Parties and, to the extent required, the Parent and the Fund Manager, agree to negotiate in good faith such suitable alternative provision replicating as nearly as possible the intention of such invalid provision, being in the case of a provision held void by a competent authority a provision which is acceptable to the relevant competent authority.

25.	counterparts

This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original of this Agreement, but all the counterparts shall together constitute the same Agreement.

26.

WAIVER

No failure or delay by any Party in exercising any of its rights under this Agreement shall be deemed to be a waiver of such rights and no waiver of a breach of any provision of this Agreement shall be deemed to be a waiver of any subsequent breach of the same or any other provision.

27.	FURTHER ASSURANCE

Each Party shall from time to time (both during the continuance of this Agreement and after its termination) do all such acts and execute all such documents as may be reasonably necessary in order to give effect to the provisions of this Agreement.

28.	RIGHTS OF THIRD PARTIES

28.1

No term of this Agreement shall be enforceable under the Contracts (Rights of Third Parties) Act 1999 by any person (a “ Third Party ”) other than the Parties to this Agreement.

28.2

The consent of a Third Party shall not be required for any amendment to or termination of this Agreement.

29.	COSTS AND EXPENSES

	29.1	Subject to clauses 29.2 and 29.3, Costamare and York shall bear on a pro rata basis in accordance with their respective shareholdings in the first SPV, the aggregate documented costs and expenses, including any advisors’ fees, legal or otherwise (the “ Expenses ”) incurred by the Parties in connection with the negotiation and execution of the Term Sheet dated 19 March 2013, this Agreement and any related documentation, including but not limited to any Management Agreement, any Supervision Agreement and any Shareholders’ Agreement in relation to the first SPV.

29.2

In the event that either Party (the “ Overpaying Party ”) has paid more than its share of the Expenses as provided in clause 29.1, then the other Party shall reimburse to the Overpaying Party such amount in dollars as is required for each Party to have borne the relevant Expenses at the time on the basis of the percentages set out in clause 29.1. Any such reconciliation shall be performed at the time this Agreement is executed and when a Vessel is acquired by the first SPV to be incorporated pursuant to this Agreement and the other Party shall promptly thereafter reimburse the Overpaying Party.

29.3

On the earlier of (i) the incorporation of the fifth SPV and (ii) the incorporation of the last SPV to be incorporated within the Commitment Period, the Parties shall re-calculate the allocation of the Expenses this time on the basis of their respective shareholdings as at such later date and as if all SPVs at the time were held by a holding company and the Shareholders of each SPV were holding their shares in the SPVs through such holding. In the event that either Party (the “ Recalculation Overpaying Party ”) following such recalculation has paid more than its share of the Expenses as provided in this clause 29.3, then the other Party shall promptly reimburse to the Recalculation Overpaying Party such amount in dollars as is required for each Party to have borne the relevant Expenses at the time on the basis of the percentages set out in this clause 29.3.

29.4

Following any re-calculation pursuant to clause 29.3, the Parties shall transfer the Expenses to be amortised across the SPVs incorporated at the time of such re-calculation.

29.5

With respect to common costs and expenses relating to SPVs other than the first SPV, the Parties will be responsible on a pro rata basis in accordance with their Commitments for that specific SPV and such amounts shall be included in the Investment Notices to Parties.

29.6

Without prejudice to the provisions of clauses 29.4 and 29.5, York shall be reimbursed by each SPV in connection with any due diligence expenses (including advisors’ fees, and any other applicable costs) incurred by it in relation to its evaluation of the formation of the relevant SPV and corresponding Vessel acquisition, as agreed with Costamare on a case by case basis but not in excess of US$100,000 per SPV.

30.	Non Advisory

Neither Party nor the Parent nor the Fund Manager assumes any responsibility to give, nor shall it give or be deemed to be giving, tax, regulatory or investment advice to the other Party or, as the case may be, the Parent and/or the Fund Manager in connection with any aspect of

the Business. In particular, without prejudice to the generality of the foregoing no recommendation by Costamare, the Parent or any Manager in connection with the acquisition or disposal of a Vessel nor the preparation and/or contents of a Business Plan for an Investment Opportunity or the Budget for an SPV/Vessel shall constitute or be actionable as investment advice.

31.	SERVICE OF NOTICES

31.1

Any notice or other communication to be given or served under or in connection with this Agreement shall be in writing and transmitted by email, as well as in one of the following delivery methods:

delivered by hand;

sent by airmail or international courier (in each case, pre-paid); or

sent by fax.

to the party due to receive the notice at the following address or fax number or email address:

in the case of York and the Fund Manager,

c/o York Capital Management Europe (UK) Advisors LLP

23 Saville Row, 4th Floor

London W1S 2ET

England

email: sparrow@yorkcapital.com

fax: +44(0) 20 7907 5601;

in the case of Costamare and the Parent,

c/o Costamare Shipping Company S.A.

60 Zephyrou Street & Syngrou Avenue

175 64 Athens

Greece

email: ventures@costamare.com

fax: +30 210 940 9051,

or at such other address or fax number or email address as may previously have been specified by that party by notice given in accordance with this clause.

31.2

A notice is deemed to be given or served:

if delivered by hand, at the time it is left at the address;

if sent by pre-paid airmail or international courier, on the fourth Business Day after despatch;

if sent by fax, on receipt of a clear transmission report; and

if sent by email, when received.

31.3

In the case of a notice given or served by fax, email or by hand, where this occurs after 5.00 pm on a Business Day, or on a day which is not a Business Day, the date of service shall be deemed to be the next Business Day.

32.	GOVERNING LAW and jurisdiction

32.1

This Agreement and any dispute or claim (whether contractual or otherwise) arising out of or in connection with it, including any question regarding its existence, validity or termination, is governed by and shall be construed in accordance with English law and shall be referred to and finally resolved by arbitration under the LCIA Rules, which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be three and Costamare and, if a co-plaintiff or (as the case may be) co-defendant in the relevant proceedings, the Parent shall be entitled to jointly appoint one arbitrator and York and, if a co-plaintiff or (as the case may be) co-defendant in the relevant proceedings, the Fund Manager (as well as the York Funds) shall be entitled to jointly appoint one arbitrator, with the third arbitrator being appointed by the LCIA Court, in accordance with LCIA Rules. The seat, or legal place, of arbitration shall be London and the language to be used in the arbitral proceedings shall be English.

32.2

York and the Fund Manager each irrevocably appoints York Capital Management Europe (UK) Advisors LLP at present of 23 Saville Row, 4th Floor, London W1S 2ET, England and Costamare and the Parent each irrevocably appoints Mr Richard Coleman c/o H. Clarkson and Co. Ltd. at present of 3 Lower Thames Street, London EC3R 6HE, England to be its agent for the receipt of any claim form, application notice, order, judgment or other document (each, a “ Service Document ”) relating to any proceeding, suit or action arising out of or in connection with this Agreement (“ Proceedings ”). Each Party, the Parent, and the Fund Manager agree that any Service Document may be effectively served on it in connection with Proceedings in England and Wales by service on its agent effected in any manner permitted by this Agreement, the LCIA Rules or the Civil Procedure Rules (as applicable).

32.3

If the agent at any time ceases for any reason to act as such, the relevant party shall appoint a replacement agent having an address for service in England and shall notify the other parties to this Agreement of the name and address of the replacement agent. Failing such appointment and notification, a Party shall be entitled by notice to the other parties to this Agreement to appoint a replacement agent to act on behalf of such other party and shall notify the other parties of the appointment. The provisions of this clause applying to service on an agent apply equally to service on a replacement agent.

THIS AGREEMENT has been executed as a deed on the date stated at the beginning of this agreement .

Executed and delivered as a deed by	)
SPARROW HOLDINGS, L.P.	)
acting by York Global Finance Manager, LLC	)
its General Partner acting by:	)	Name .... John J. Fosina .....................................
	)	Title .... Chief Financial Officer ...........................

Executed and delivered as a deed by	)
COSTAMARE VENTURES INC.	)
acting by:	)
	)	Name .... Anastassios Gabrielides ................
	)	Title .... Secretary / Director ........................

Executed and delivered as a deed solely	)
with respect to provisions applicable to it by	)
YORK CAPITAL MANAGEMENT	)
GLOBAL ADVISORS, LLC (on behalf of	)	Name .... John J. Fosina .....................................
itself and as agent for the York Funds) acting by:	)	Title .... Chief Financial Officer ...........................

Executed and delivered as a deed solely	)
with respect to provisions applicable to it by	)
COSTAMARE INC.	)
acting by:	)	Name .... Anastassios Gabrielides .....................
	)	Title .... General Counsel / Secretary ...........

Schedule 1-List of York Funds

York Capital Management, L.P.

York Multi-Strategy Master Fund, L.P.

York Credit Opportunities Fund, L.P.

York Credit Opportunities Investments Master Fund, L.P.

York European Opportunities Investments Master Fund, L.P.

York European Focus Master Fund, L.P.

York European Distressed Credit Fund, L.P.

York European Distressed Credit Fund II, L.P.

Schedule 2-Form of Business Plan

The Business Plan prepared in respect of an SPV and its Vessel shall include:

a)	summary of proposal e.g. funding or investment, trigger points, conditions, guarantees etc.;

b)	purchase price of such Vessel and payment terms thereof;

details of such Vessel;

any existing draft documentation with respect to the acquisition of the Vessel;

in the event of a Newbuild Vessel, details of any documentation and arrangements with the relevant builder, including any performance guarantees that may be required;

valuation report prepared by an independent shipbroker appointed by Costamare;

details of any proposed financing and relevant documentation, including any performance guarantees that may be required;

details of strategy for operating the Vessel including details of any charter contracts; and

IRR / cashflow and assumptions.

Schedule 3- Form of Budget

The Budget prepared by Costamare Shipping for an SPV and its Vessel shall include:

a breakdown of the projected operating costs of the Vessel and the relevant SPV;

a schedule of all fees and expenses that may be charged to or be claimed from the SPV including the proposed fees and expenses of all Service Providers;

an estimate of the working capital requirements of the SPV incorporated within a cash flow statement; and

an estimate of all expected cash flows and revenues of the SPV prior to any applicable financing costs.

Schedule 4- Example of IRR calculation

	A	B	C	D
1	IRR Example
2
3	Date	Capital In	Distribution/Proceeds	Net Cash
4	30/6/2013	-5.000.000,00		-5.000.000,00
5	30/9/2013		300.000,00	300.000,00
6	31/12/2013		300.000,00	300.000,00
7	31/3/2014		300.000,00	300.000,00
8	30/6/2014		300.000,00	300.000,00
9	30/9/2014		300.000,00	300.000,00
10	31/12/2014		5.000.000,00	5.000.000,00
11
12			IRR	22,0%

	A	B	C	D
1	IRR Example
2
3	Date	Capital In	Distribution/Proceeds	Net Cash
4	30/6/2013	-5000000		=+C4+B4
5	30/9/2013		300000	=+C5+B5
6	31/12/2013		300000	=+C6+B6
7	31/3/2014		300000	=+C7+B7
8	30/6/2014		300000	=+C8+B8
9	30/9/2014		300000	=+C9+B9
10	31/12/2014		5000000	=+C10+B10
11
12			IRR	=+XIRR(D4:D10;A4:A10)

Exhibit 4.11

COSTAMARE INC.

- and –

COSTAMARE SHIPPING COMPANY S.A.

FRAMEWORK AGREEMENT

TABLE OF CONTENTS

		Page

ARTICLE I	INTERPRETATION	1

ARTICLE II	APPOINTMENT	6

ARTICLE III	THE PARENT’S GENERAL OBLIGATIONS	7

ARTICLE IV	THE MANAGER’S GENERAL OBLIGATIONS	8

ARTICLE V	ADMINISTRATIVE SERVICES	9

ARTICLE VI	COMMERCIAL SERVICES	10

ARTICLE VII	INTENTIONALLY OMITTED	11

ARTICLE VIII	INTENTIONALLY OMITTED	11

ARTICLE IX	MANAGEMENT FEES AND EXPENSES	11

ARTICLE X	BUDGETS, CORPORATE PLANNING AND EXPENSES	14

ARTICLE XI	LIABILITY AND INDEMNITY	17

ARTICLE XII	RIGHTS OF THE MANAGER AND RESTRICTIONS ON THE MANAGER’S AUTHORITY	18

ARTICLE XIII	TERMINATION OF THIS AGREEMENT	19

ARICLE XIV	NOTICES	22

ARTICLE XV	APPLICABLE LAW	22

ARTICLE XVI	ARBITRATION	23

ARTICLE XVII	MISCELLANEOUS	23

APPENDIX I	FORM OF SHIPMANAGEMENT AGREEMENT

APPENDIX II	FORM OF SUPERVISION AGREEMENT

THIS FRAMEWORK AGREEMENT (this “ Agreement ”) is made on the 2nd day of November 2015, BY AND BETWEEN :

(1) COSTAMARE INC., a Marshall Islands corporation (the “ Parent ”); and

(2) COSTAMARE SHIPPING COMPANY S.A., a company organized and existing under the laws of the Republic of Panama (the “ Manager ”).

WHEREAS :

(A) The Parent wholly owns the entities set out in Schedule A, as such Schedule A may be amended from time to time (the “ Subsidiaries ”), each of which owns or operates or has agreed to purchase one or more Container Vessels (as defined below) (the “ Vessels ”).

(B) The Manager has the benefit of experience in the technical and commercial management of Container Vessels and representation of shipowning companies generally.

(C) The Parent and the Manager desire to adopt this Agreement, pursuant to which the Manager shall, either directly and/or through a Submanager (as defined below), provide certain ship management services to the Subsidiaries as specified herein.

NOW, THEREFORE, THE PARTIES HEREBY AGREE:

ARTICLE I

INTERPRETATION

SECTION 1.1. In this Agreement, unless the context otherwise requires:

“ Affiliates ” means, with respect to any person as to any particular date, any other persons that directly or indirectly, through one or more intermediaries, are Controlled by, Control or are under common Control with the person in question, and Affiliates means any of them.

“ Agreement ” shall have the meaning set forth in the preamble.

“ Annual Period ” shall have the meaning set forth in Section 9.2.

“ Approved Budget ” shall have the meaning set forth in Section 10.3.

company (the “parent company”) that is Controlled by such person or group. The term “Beneficially Own” and similar capitalized terms shall have analogous meanings.

“ Board of Directors ” means the board of directors of the Parent as the same may be constituted from time to time.

“ Business Days ” means a day (excluding Saturdays and Sundays) on which banks are open for business in Monaco; Athens, Greece; and New York, New York, USA.

“ Change in Control of the Manager ” means (a) a sale of all or substantially all of the assets or property of the Manager necessary for the performance of the Services, (b) a sale of the Manager’s shares that would result in Konstantinos Konstantakopoulos Beneficially Owning, directly or indirectly, less than 50.1% of the total voting power of the outstanding voting securities of the Manager or (c) a merger, consolidation or similar transaction, that would result in Konstantinos Konstantakopoulos Beneficially Owning, directly or indirectly, less than 50.1% of the total voting power of the outstanding voting securities of the resulting entity following such transaction.

“ Change in Control of the Parent ” means the occurrence of any of the following events: (a) a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act or any successor provision to either of the foregoing), including a group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(10) under the Exchange Act (other than one or more Konstantakopoulos Entities) (collectively, an “Acquiring Person”) becomes the Beneficial Owner, directly or indirectly, of 40% or more of the total voting power of the outstanding voting securities of the Parent, which voting power represents a higher percentage than that of the Konstantakopoulos Entities, collectively; or (b) the approval by the shareholders of the Parent of a proposed merger, consolidation or similar transaction, as a result of which any Acquiring Person become the Beneficial Owner, directly or indirectly, of 40% or more of the total voting power of the outstanding voting securities of the resulting entity following such transaction, which voting power represents a higher percentage than that of the Konstantakopoulos Entities, collectively; or (c) a change in directors after which majority of the members of the Board are not Continuing Directors.

“ Consent of the Parent ” means the prior written consent of the majority of the Independent Directors of the Parent.

“ Container Vessel ” means any ocean-going vessel (whether in its construction phase or operational) that is intended to be used primarily to transport containerized cargoes.

“ Continuing Directors ” means, as of any date of determination, any member of the Board of Directors who (i) was a member of the Board of Directors immediately after the date of this Agreement, or (ii) was nominated for election or elected to the Board of Directors with the approval of the board of directors then still in

office or who were either directors immediately after the date of this Agreement or whose nomination or election was previously so approved.

“ Costamare Partners ” means Costamare Partners LP a Marshall Islands limited partnership.

“ Crew ” shall have the meaning set forth in clause 1 of each Shipmanagement Agreement.

“ Draft Budget ” shall have the meaning set forth in Section 10.1.

“ Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended.

“ Executive Officers ” means the Chief Executive Officer, the Chief Operating Officer (if any) and the Chief Financial Officer of the Parent.

“ Force Majeure ” shall have the meaning set forth in Section 11.1.

“ General Partner ” means Costamare Partners GP LLC a Marshall Islands limited liability company, as general partner of Costamare Partners.

“ Initial Term ” shall have the meaning set forth in Section 13.1.

“ Konstantakopoulos Entities ” means:

(a)

Konstantinos Konstantakopoulos, Christos Konstantakopoulos, Achillefs Konstantakopoulos or Vassileios Konstantakopoulos;

(b)

any spouse or lineal descendant of any of the individuals set out in paragraph (a) above; and

(c)

any person Controlled by, or under common Control with, any such individual or combination of such individuals as set out in paragraphs (a) and (b) above.

“ Management Fee ” shall have the meaning set forth in Section 9.1.

“ Management Services ” shall have, in relation to a Vessel, the meaning set forth in clause 1 of the Shipmanagement Agreement applicable to such Vessel.

“ Manager ” shall have the meaning set forth in the preamble.

“ Manager Related Parties ” shall have the meaning set forth in Section 11.2.

“ Omnibus Agreement ” means that certain Omnibus Agreement, dated as of October 1, 2014, among the Parent, Costamare Ventures Inc., Costamare Partners, the General Partner, Costamare Partners Holdings LLC and York, as such agreement may be amended, supplemented or restated from time to time.

“ Parent ” shall have the meaning set forth in the preamble.

“ Questioned Items ” shall have the meaning set forth in Section 10.2.

“ Related Manager ” means Shanghai Costamare Ship Management Co., Ltd. or any Affiliate of a Konstantakopoulos Entity appointed as Submanager in accordance with the terms of this Agreement.

“ Services ” shall have the meaning set forth in Section 2.2.

“ Shipmanagement Agreement ” shall have the meaning set forth in Section 3.2.

“ STCW 95 ” means the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, as amended in 1995 or any subsequent amendment thereto.

“ Submanager ” shall have the meaning set forth in Section 2.3.

“ Subsequent Term ” shall have the meaning set forth in Section 13.1.

“ Subsidiaries ” shall have the meaning set forth in the recitals.

“ Supervision Agreement ” shall have the meaning set forth in Section 3.3.

“ Term ” shall have the meaning set forth in Section 13.1.

“ Vessels ” shall have the meaning set forth in the recitals.

“ V.Ships ” means V.Ships Greece Ltd, Par-La Ville Place 14, Par-La Ville Road, Hamilton HM08, Bermuda and includes its successors in title and permitted assignees.

“ York ” means York Capital Management Global Advisors LLC, Sparrow Holdings, L.P., Bluebird Holdings, L.P. and certain affiliated funds on whose behalf York Capital Management Global Advisors LLC has entered into the Omnibus Agreement.

SECTION 1.2. The headings of this Agreement are for ease of reference and do not limit or otherwise affect the meaning hereof.

SECTION 1.3. All the terms of this Agreement, whether so expressed or not, shall be binding upon the parties hereto and their respective successors and assigns.

SECTION 1.4. In the event of any conflict between this Agreement, any Shipmanagement Agreement or any Supervision Agreement, the provisions of this Agreement shall prevail.

SECTION 1.5. Unless otherwise specified, all references to money refer to the legal currency of the United States of America.

SECTION 1.6. Unless the context otherwise requires, words in the singular include the plural and vice versa.

SECTION 1.7. The words “include”, “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation” and shall not be construed to limit any general statement which it follows to the specific or similar items or matters immediately following it.

SECTION 1.8. Any reference to “person” includes an individual, body corporate, limited liability company, partnership, joint venture, cooperative, trust or unincorporated organization, association, trustee, domestic or foreign government or any agency or instrumentality thereof, or any other entity recognized by law.

SECTION 1.9. Any reference to an enactment shall be deemed to include reference to such enactment as re-enacted, amended or extended.

SECTION 1.10. Any reference to (or to any specified provision of) this Agreement or any other document shall be construed as reference to this Agreement, that provision or that document as in force for the time being and as amended in accordance with the terms thereof, or, as the case may be, with the agreement of the relevant parties.

SECTION 1.11. Any reference to clauses, appendices and schedules shall be construed as reference to clauses of, appendices to and schedules to this Agreement and references to this Agreement includes its appendices and schedules.

ARTICLE II

APPOINTMENT

SECTION 2.1. The Parent shall procure that the Manager shall be appointed by (a) each Subsidiary pursuant to the provisions of Section 3.3 as the technical and/or commercial manager of each such Subsidiary’s Vessel on the terms and conditions of the relevant Shipmanagement Agreement and (b) each Subsidiary to be acquiring a Newbuild, pursuant to the provisions of Section 3.4 as the supervisor of the construction thereof on the terms and conditions of the relevant Supervision Agreement.

SECTION 2.2. The Manager agrees to provide:

(a) the services specified in Articles V and VI of this Agreement;

(b) the services specified in each Supervision Agreement; and

(c) the Management Services in respect of each Vessel specified in each Shipmanagement Agreement (the services to be provided under Sections 2.2(a), 2.2(b) and 2.2(c) collectively the “ Services ”).

The Parent and the Manager each hereby agree that in the performance of this Agreement, any Supervision Agreement or any Shipmanagement Agreement, the Manager or, as the case may be, any Submanager, is acting solely on behalf of, as agent of and for the account of, the relevant Subsidiary. The Manager or, as the case may be, the relevant Submanager may advise persons with whom it deals on behalf of the relevant Subsidiary that it is conducting such business for and on behalf of such Subsidiary.

SECTION 2.3. The Manager may upon notice to the Parent appoint any person (a “ Submanager ”) at any time throughout the duration of this Agreement to discharge any of the Manager’s duties under this Agreement or a Shipmanagement Agreement or a Supervision Agreement, provided that if such person is not a Related Manager or V.Ships, the Manager shall obtain the written Consent of the Parent prior to such appointment (such Consent of the Parent shall not be unreasonably withheld or delayed). The Manager shall appoint a Submanager either by entering into a management agreement or supervision agreement (such management agreement or supervision agreement to be on terms to be agreed between the parties thereto and only in respect of the services that the Manager wishes such Submanager to discharge) directly with such Submanager (for the avoidance of doubt, unless otherwise agreed in writing, no Subsidiary shall have any responsibility for any fees or costs incurred under any such management agreement or supervision agreement) or by directing such Submanager to enter into a management agreement or supervision agreement directly with the relevant Subsidiary (such management agreement or supervision agreement to be on terms to be agreed between the parties thereto and only in respect of the services that the Manager wishes such Submanager to discharge). The Parent shall procure that each Subsidiary

shall provide written confirmation to the Manager or, as the case may be, a Submanager, that such member’s Vessel is commercially and/or technically managed by the Manager or, as the case may be, the relevant Submanager.

SECTION 2.4. The Manager’s power to delegate performance of any provision of this Agreement, including delegation by directing a Submanager to enter into a management agreement or supervision agreement directly with a Subsidiary in accordance with Section 2.3, shall not limit the Manager’s liability to perform this Agreement with the intention that the Manager shall remain responsible for the due and timely performance of all duties and responsibilities of the Manager hereunder, PROVIDED HOWEVER , that to the extent that any Submanager has performed any such duty, the Manager shall not be under any obligation to perform again the same duty.

ARTICLE III

THE PARENT’S GENERAL OBLIGATIONS

SECTION 3.1. The Parent shall notify the Manager as soon as possible of any purchase of any vessel by a Subsidiary (whether the same is a second-hand vessel or a Newbuild), the delivery of any Newbuild from the relevant builder or intermediate seller to the relevant Subsidiary to take ownership of such Newbuild, the sale of any Vessel, the purchase or creation of any direct or indirect subsidiary of the Parent or the sale or divestiture of any Subsidiary and shall promptly amend Schedule A, to be reflective of any such development. Such amended Schedule A shall be effective on any such day as mutually agreed by the Parent and the Manager, which date shall be no later than five Business Days after delivery of such amended Schedule A to the Manager by the Parent.

SECTION 3.2. For each Vessel the Parent shall cause the relevant Subsidiary to enter into with the Manager, and the Manager shall enter into with such Subsidiary, a contract substantially in the form attached as Appendix I (each a “ Shipmanagement Agreement ” and, collectively, the “ Shipmanagement Agreements ”), with such alterations and additions as are appropriate.

SECTION 3.3. For each Newbuild the Parent shall cause the relevant Subsidiary to enter into with the Manager, and the Manager shall enter into with such Subsidiary, a contract substantially in the form attached as Appendix II (each a “ Supervision Agreement ” and, collectively, the “ Supervision Agreements ”) with such alterations and additions as are appropriate.

SECTION 3.4. The Parent shall procure that each relevant Subsidiary (a) performs its obligations under any Shipmanagement Agreement or any Supervision Agreement to which it is a party and (b) does not take any action or omit to take any action the effect of which is to cause the Subsidiaries or the Manager or a Submanager to be in breach of this Agreement, any Shipmanagement Agreement and/or any Supervision Agreement.

SECTION 3.5. The Parent agrees that, save for any Konstantakopoulos Entity Affiliate, the Manager has been engaged to provide the Services on an exclusive basis and, without receiving the prior written approval of the Manager or before it has lawfully terminated this Agreement in accordance with its terms, it will procure that no Subsidiary shall engage any other entity to provide any of the Services (unless such engagement only becomes effective after the termination of this Agreement).

ARTICLE IV

THE MANAGER’S GENERAL OBLIGATIONS

SECTION 4.4. The Manager shall exercise commercially reasonable care to cause all material property of any Subsidiary to be clearly identified as such, held separately from the property of the Manager and, where applicable, held in safe custody.

SECTION 4.5. The Manager shall exercise commercially reasonable care to cause adequate manpower to be employed by it to perform its obligations under this Agreement, PROVIDED HOWEVER , that the Manager, in the performance of its responsibilities under this Agreement, shall be entitled to have regard to its overall responsibilities in relation to the servicing of its clients and in particular, without prejudice to the generality of the foregoing, the Manager shall be entitled to allocate available resources and services in such manner as in the prevailing circumstances the Manager considers to be fair and reasonable.

SECTION 4.6. The Manager, in the performance of its responsibilities under this Agreement, any Supervision Agreement or any Shipmanagement Agreement, shall exercise commercially reasonable care to cause any purchases of products or services from any of its Affiliates to be on terms no less favorable to the Manager than the market prices for products or services that the Manager could obtain on an arm’s length basis from unrelated parties.

SECTION 4.7. During the term hereof, the Manager agrees that it will provide the Services to the Subsidiaries on an exclusive basis and, without receiving the prior Consent of the Parent, it will not provide any Services or other services contemplated herein to any entity other than the Subsidiaries; provided, however, the Manager may also provide the Services to (i) entities formed pursuant to the Framework Agreement between the Parent, Costamare Ventures Inc. and York dated 15 May 2013 as amended from time to time and (ii) to subsidiaries of Costamare Partners.

SECTION 4.8. If a Vessel (which expression for the purposes of this Section shall include any Newbuild to be acquired by a Subsidiary) and a Container Vessel directly or indirectly owned or operated by a third party are both available and meet the criteria for a charter being fixed by the Manager, the Vessel shall be offered such charter first and the Parent shall have 48 hours from such offer being received to accept such offer, failing which such charter shall be then offered to the relevant third party. If a Vessel and a Container Vessel directly or indirectly owned or operated by Costamare Partners are both available and meet the criteria for a charter being fixed by the Manager, the Container Vessel owned or operated by Costamare Partners shall be offered such charter first, provided that such Container Vessel shall be subject to the terms of the Omnibus Agreement, as applicable.

SECTION 4.9. The Manager shall at all times maintain appropriate and necessary accounts and records as regards the Services and shall make the same available for inspection and auditing by the Parent at such times as may be mutually agreed by the Manager, on the one hand, and the Parent, on the other hand.

ARTICLE V

ADMINISTRATIVE SERVICES

SECTION 5.1. The Manager shall provide certain general administrative services to the Subsidiaries, including, but not limited to, the following (in the case of paragraphs (a) to (e) and paragraph (i) below, upon the request of the Parent):

(a) keeping all books and records of things done and transactions performed on behalf of any Subsidiary and/or the Parent (as the case may be) as it may require from time to time, including, but not limited to, liaising with accountants, lawyers and other professional advisors and maintaining the necessary technical infrastructure such as computer network, PCs etc.;

(b) except as otherwise contemplated herein, representing any Subsidiary generally in its dealings and relations with third parties;

(c) maintaining the general ledgers of the Subsidiaries and/or the Parent (as the case may be), preparation of periodic consolidated financial statements of the Parent and/or the Subsidiaries (as the case may be), including, but not limited to, those required for governmental and

regulatory or self-regulatory agency filings and reports to shareholders, arranging of the auditing and/or review of any such financial statements and the provision of related data processing services;

(d) preparing and providing (or procuring, at the relevant Subsidiary’s cost, a third party service provider to prepare and provide) tax returns required by any law or regulatory authority;

(e) arranging for the provision of advisory services (either directly or, at the relevant Subsidiary’s cost, through a third party service provider) to ensure such Subsidiary is in compliance with all applicable laws, including all relevant securities laws;

(f) either directly or, at the relevant Subsidiary’s cost, through a third party service provider (such as by appointing lawyers), providing for the presentation, negotiation, settlement, prosecution or defense of any claim, demand or petition on behalf of such Subsidiary arising in connection with the business of such Subsidiary for an amount not exceeding US$1,000,000 or its equivalent, including the pursuit by such Subsidiary of any rights of indemnification or reimbursement;

(g) administering payroll services, benefits and director’s or consultant’s fees, as applicable, for any person providing services of an employee, officer, consultant or director of a Subsidiary;

(h) handling general and administrative expenses of each Subsidiary;

(i) assisting each Subsidiary and/or the Parent (as the case may be) in establishing and maintaining a system of internal controls sufficient to satisfy any applicable law or regulatory requirements; and

(j) maintaining, at the relevant Subsidiary’s cost, such Subsidiary’s corporate existence, qualification and good standing in all necessary jurisdictions and assisting in all other corporate and regulatory compliance requirements.

ARTICLE VI

COMMERCIAL SERVICES

SECTION 6.1. In addition to any commercial services provided under clause 3.3 of each Shipmanagement Agreement, the Manager shall provide the following commercial services to the Subsidiaries:

(a) performing class records review and physical inspections in respect of any vessel considered for purchase by a Subsidiary;

(b) at the request of the relevant Subsidiary, providing administrative services in connection with the purchase of a second-hand vessel or the acquisition and sale of a Newbuild, in either case by such Subsidiary;

(c) managing relationships between the Subsidiaries and any existing or potential charterers, shipbuilders, insurers, lenders, shipmanagers and other shipping industry service providers/participants;

(d) at the request of a Subsidiary, providing certain services in connection with such Subsidiary taking physical delivery of a vessel, registering a vessel under a ship register, tendering physical delivery of a Vessel or deleting a Vessel from the applicable port of registry, in each case on behalf of such Subsidiary.

ARTICLE VII

INTENTIONALLY OMITTED

ARTICLE VIII

INTENTIONALLY OMITTED

ARTICLE IX

MANAGEMENT FEES AND EXPENSES

SECTION 9.1. In consideration of the Manager providing the Services to the Subsidiaries, the Parent shall pay the Manager the following fees (together, the “ Management Fees ” and, on a per Vessel basis, the “ Management Fee ”):

(a) subject to Sections 9.2 and 9.3, a fee of US$956 per day per Vessel during the term of this Agreement payable monthly in arrears (pro rated to reflect the actual number of days that the relevant Subsidiary owns or charters-in each Vessel during the applicable month), unless a Vessel is chartered-out to a third party on a bareboat charter basis, in which case the fee payable to the Manager for such Vessel during the term of this Agreement shall be, subject to Sections 9.2 and 9.3, US$478 per day, PROVIDED HOWEVER , that when in respect of certain services to a Vessel the Manager appoints a Submanager in accordance with Section 2.3 and such Submanager enters into a management agreement directly with the relevant Subsidiary (the “ direct agreement ”), the fees payable by the Parent and/or such Subsidiary under this Agreement and/or any relevant Shipmanagement Agreement in respect of such Vessel pursuant to Section 9.1(a) shall be US$956 per day, or as the case may be, US$478 per day minus, in each case, the fees per day payable by such Subsidiary

to such Submanager under the relevant direct agreement in respect of such Vessel;

(b) a fee equal to 0.15% calculated on the aggregate of the gross freight, demurrage, charter hire, ballast bonus or other income obtained for the employment of each Vessel during the term of this Agreement, payable to the Manager monthly in arrears, only to the extent such freight, demurrage, charter hire, ballast bonus or other income, as the case may be, is received as revenue; and

SECTION 9.2. The Management Fees will be fixed and shall not be subject to adjustment for Euro/U.S. Dollar exchange rate fluctuations or inflation for the term of this Agreement, save that for the 12-month period starting on January 1, 2016 and for each subsequent 12-month period falling thereafter (each such 12-month period referred to hereinafter as an “ Annual Period ”), the Management Fee for each Vessel payable pursuant to Section 9.1(a) or Section 9.1(c) will be adjusted pursuant to Section 9.3.

SECTION 9.3. The Management Fee for each Vessel payable pursuant to Section 9.1(a) or Section 9.1(c), for the Annual Period commencing on January 1, 2016 and each subsequent Annual Period thereafter, will, in each case, be adjusted upwards with effect from the beginning of such Annual Period if:

(i) in the case of the first Annual Period starting on January 1, 2016, the rate existing on the business day immediately prior to the date of this Agreement, and

(ii) in the case of each subsequent Annual Period, the previous Euro/U.S. Dollar average calculated for the purposes of this Section 9.3 in respect of the immediately previous Annual Period,

by the average percentage amount by which the Euro has in each such case so strengthened against the U.S. Dollar; and/or

SECTION 9.4. The Manager shall, subject to Section 9.5, pay for all usual office expenses incurred by it as the Manager.

SECTION 9.5. The Parent hereby acknowledges that any capital expenditure, financial costs, operating expenses for each Vessel and any general and administrative expenses of the Subsidiaries whatsoever are not covered by the Management Fees and any such expenditure, costs and expenses shall be paid fully by the Parent or the applicable Subsidiary, whether directly to third parties (which for the avoidance of doubt shall include any Submanager) or by payment to such third parties through the Manager and, without prejudice to Section 10.8, to the extent incurred by the Manager, shall be reimbursed to it by the Parent and/or any Subsidiary the Manager seeks, in its discretion, reimbursement from. The said capital expenditure, financial costs, operating expenses for each Vessel and general and administrative expenses of the Subsidiaries include, without limiting the generality of the foregoing, items such as:

(a) fees, interest, principal and any other costs due to the Subsidiaries’ financiers and their respective advisors;

(e) applicable deductibles, insurance premiums and/or P&I calls;

(f) postage, communication, traveling, lodging, victualling, overtime, out of office compensation and out of pocket expenses of the Manager and/or its personnel, incurred in pursuance of the Services; and

(g) any other out of pocket expenses that are incurred by the Manager in the performance of the Services pursuant to this Agreement, any Supervision Agreement or any Shipmanagement Agreement.

SECTION 9.6. The Manager shall have the right to demand the Management Fee payable in relation to each Vessel from either the Parent or the Subsidiary owning such Vessel under the terms of the relevant Shipmanagement Agreement. By written notice to the Parent, the Manager may direct the Parent to pay any amounts owing by the Manager to any Submanager pursuant to a subcontract of any provisions of this Agreement or any Shipmanagement Agreement or any Supervision Agreement, directly to the relevant Submanager.

SECTION 9.7. In the event that a Shipmanagement Agreement is terminated, other than by reason of default by the Managers, the Management Fee payable to the Manager under Section 9.1(a) for the Vessel subject to such Shipmanagement Agreement shall be payable in respect of such Vessel for a further period of three months from the termination date. The fees payable for the said three months shall be paid in one lump sum in advance on the termination of the relevant Shipmanagement Agreement. In addition the relevant Subsidiary shall pay any Severance Costs (as such term is defined in the relevant Shipmanagement Agreement) for the relevant Vessel which may materialize.

ARTICLE X

BUDGETS, CORPORATE PLANNING AND EXPENSES

deemed to have accepted the Draft Budget and, such Draft Budget, shall be deemed to be the Approved Budget (as defined in Section 10.3).

SECTION 10.3. By November 15 of the relevant calendar year (or such later date as the Manager and the Board of Directors deem appropriate), and to the extent that changes are required to the Draft Budget pursuant to Section 10.2, the Manager will prepare and deliver to the Parent a revised budget that has been approved by the Executive Officers (the “ Approved Budget ”). However, the Parent acknowledges that the Approved Budget is only an estimate of the performance of the Vessels and/or the Subsidiaries and the Manager makes no assurance, representation or warranty that the actual performance of the Vessels and/or the Subsidiaries in any relevant calendar year will correspond to the estimates contained in the Approved Budget for that calendar year. Notwithstanding the provisions of Section 10.2 and this Section 10.3, the Approved Budget for the 2015 calendar year shall be the 2015 revised budget that has been previously approved by the Parent.

SECTION 10.5. Once the Approved Budget has been delivered, the Manager shall prepare and present to the Parent its estimate of the working capital requirements of the Vessels and the Subsidiaries and the Manager shall each month update this estimate. Based thereon, the Manager shall each month make a request to the Parent and/or, as the case may be, the relevant Subsidiaries, in writing for the funds required to provide the Services to the Subsidiaries and to operate each Vessel for the ensuing month, including the payment of any occasional or extraordinary item of expenditure, such as emergency repair costs, additional insurance premiums, bunkers or provisions. The Manager may also make a request in writing to the Parent and/or, as the case may be, the relevant Subsidiaries, at any time for funds required for the payment of any occasional or extraordinary item of expenditure, such as emergency repair costs, additional insurance premiums, bunkers or provisions. Such funds shall be received by the Manager within ten calendar days after the receipt by the Parent or, as the case may be, the relevant Subsidiary of the Manager’s written request and shall be held in a separate bank account in the name of the Manager or, if requested by the Manager, in the name of the Parent or of the relevant Subsidiary.

advanced by the Parent or, as the case may be, the relevant Subsidiary. The Parent and the Manager shall reconcile any amounts due to the Parent by the Manager or due to the Manager by the Parent for each fiscal year of the Parent as promptly as practicable following the close of each such fiscal year. Without prejudice to Section 10.8, any expenses incurred by the Manager under the terms of this Agreement on behalf of any Subsidiary may be debited against the account of the respective Subsidiary, but shall in any event remain payable by the Parent and the relevant Subsidiary to the Manager on demand.

SECTION 10.7. Insofar as any moneys are collected from third parties by the Manager under the terms of any Shipmanagement Agreement and/or any Supervision Agreement (other than moneys payable by a Subsidiary to the Manager), such moneys and any interest thereon shall be held to the credit of the relevant Subsidiary in a separate bank account in the name thereof. Interest on any such bank account shall be for the benefit of the relevant Subsidiary.

SECTION 10.8. Notwithstanding anything contained herein to the contrary, the Manager shall in no circumstances be required to use or commit its own funds to finance the provision of the Services.

SECTION 10.9. To the extent that a Related Manager has been appointed in accordance with the terms of Section 2.3, it is agreed by the Parent and the Manager for the benefit of such Related Manager that the provisions of Article X shall apply to such Related Manager as if such provisions were repeated herein, but with references to:

(a) the “Manager” being deemed as references to the relevant Related Manager;

(b) the “Services” being deemed as references to the services to be performed by such Related Manager under the relevant management agreement;

(c) the “Vessels” being deemed as references to the Vessels being managed by such Related Manager under a management agreement entered into directly with the relevant Subsidiaries;

(d) the “Parent” being deemed as references to the relevant Subsidiaries; and

ARTICLE XI

LIABILITY AND INDEMNITY

SECTION 11.1. Save for the obligation of the Parent to pay any moneys due to the Manager hereunder, neither any Subsidiary nor the Manager shall be under any liability to the other for any failure to perform any of their obligations hereunder by reason of Force Majeure. “ Force Majeure ” shall mean any cause whatsoever of any nature or kind beyond the reasonable control of the relevant Subsidiary or the Manager, including, without limitation, acts of God, acts of civil or military authorities, acts of war or public enemy, acts of any court, regulatory agency or administrative body having jurisdiction, insurrections, riots, strikes or other labor disturbances, embargoes or other causes of a similar nature.

SECTION 11.2. The Manager, including its officers, directors, employees, shareholders, agents, sub-contractors and any Submanager (the “ Manager Related Parties ”) shall be under no liability whatsoever to the Parent, any Subsidiary or to any third party (including the Crew) for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect (including but not limited to loss of profit arising out of or in connection with detention of or delay to a Vessel), and howsoever arising in the course of the performance of this Agreement, any Shipmanagement Agreement or any Supervision Agreement, unless and to the extent that the same is proved to have resulted solely from the gross negligence or willful misconduct of the Manager, its officers, employees, agents, sub-contractors or any Submanager.

SECTION 11.5. It is hereby expressly agreed that no employee or agent of the Manager (including any sub-contractor from time to time employed by the

Manager) shall in any circumstances whatsoever be under any liability whatsoever to the Parent, any Subsidiary or any third party for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in connection with his employment or agency and, without prejudice to the generality of the foregoing provisions in this Article XI, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defense and immunity of whatsoever nature applicable to the Manager or to which the Manager is entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Manager acting as aforesaid, and for the purpose of all the foregoing provisions of this Article XI, the Manager is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be the Manager’s servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement. Nothing in this Section 11.5 shall be construed so as to further limit any liability the Manager may have to the Subsidiaries under Section 11.2.

SECTION 11.6. The provisions of this Article XI shall survive any termination of this Agreement.

ARTICLE XII

RIGHTS OF THE MANAGER AND RESTRICTIONS ON THE MANAGER’S AUTHORITY

SECTION 12.1. Except as may be provided in this Agreement or in any separate written agreement between the Parent or any Subsidiary and the Manager or a Submanager, the Manager and any Submanager shall be an independent contractor and not the agent of the Parent or any Subsidiary and shall have no right or authority to incur any obligation on behalf of the Parent or any Subsidiary or to bind the Parent and/or any Subsidiary in any way whatsoever. Nothing in this Agreement shall be deemed to make the Manager or any Submanager or any of their subsidiaries or employees an employee, joint venturer or partner of the Parent or any Subsidiary.

SECTION 12.2. The Parent acknowledges that the Manager or, as the case may be, any Submanager shall have no responsibility hereunder, direct or indirect, with regard to the formulation of the business plans, policies, management or strategies (financial, tax, legal or otherwise) of the Parent or any Subsidiary, which is solely the responsibility of the Parent and each respective Subsidiary. The Parent and each Subsidiary shall set its corporate policies independently through its respective board of directors and executive officers and nothing contained herein shall be construed to relieve such directors or officers from the performance of their duties or to limit the exercise of their powers.

SECTION 12.3. Notwithstanding the other provisions of this Agreement:

(a) the Manager or, as the case may be, any Submanager may act with respect to a Subsidiary upon any advice, resolutions, requests,

instructions, recommendations, direction or information obtained from such Subsidiary or any banker, accountant, broker, lawyer or other person acting as agent of or adviser to such Subsidiary and the Manager or, as the case may be, the relevant Submanager shall incur no liability to such Subsidiary for anything done or omitted or suffered in good faith in reliance upon such advice, instruction, resolution, recommendation, direction or information made or given by such Subsidiary or its agents, in the absence of gross negligence or willful misconduct by the Manager or, as the case may be, the relevant Submanager or their respective servants, and shall not be responsible for any misconduct, mistake, oversight, error of judgment, neglect, default, omission, forgetfulness or want of prudence on the part of any such banker, accountant, broker, lawyer, agent or adviser or other person as aforesaid;

(b) the Manager or, as the case may be, a Submanager shall not be under any obligation to carry out any request, resolution, instruction, direction or recommendation of the Parent or any Subsidiary or their respective agents if the performance thereof is or would be illegal or unlawful; and

(c) the Manager or, as the case may be, the relevant Submanager shall incur no liability to the Parent or any Subsidiary for doing or failing to do any act or thing which it shall be required to do or perform or forebear from doing or performing by reason of any provision of any law or any regulation or resolution made pursuant thereto or any decision, order or judgment of any court or any lawful request, announcement or similar action of any person or body exercising or purporting to exercise the legitimate authority of any government or of any central or local governmental institution in each case where the above entity has jurisdiction.

ARTICLE XIII

TERMINATION OF THIS AGREEMENT

SECTION 13.1. This Agreement shall be effective as of the date hereof and, subject to Sections 13.2, 13.3, 13.4 and 13.5, shall continue until December 31, 2015 (the “ Initial Term ”). Thereafter the term of this Agreement shall be extended on a year-to-year basis for up to ten times (each a “ Subsequent Term ”) unless the Parent, at least 12 months prior to the end of the then current term, gives written notice to the Manager that it wishes to terminate this Agreement at the end of the then current term. In no event will the term of this Agreement (the “ Term ”) extend beyond the date falling ten years after the last day of the Initial Term.

SECTION 13.2. The Parent shall be entitled to terminate this Agreement by notice in writing to the Manager if:

(a) the Manager defaults in the performance of any material obligation under this Agreement, subject to a cure right of 20 Business Days following written notice by the Parent, PROVIDED ALWAYS , that any default of the Manager to perform any of its obligations under a particular Shipmanagement Agreement or any Supervision Agreement, shall not, in itself, entitle the Parent to terminate this Agreement pursuant to this Section 13.2(a) and shall only allow the relevant Subsidiary to terminate the relevant Shipmanagement Agreement or Supervision Agreement;

(b) any moneys due and payable to the Parent or third parties by the Manager under this Agreement is not paid or accounted for within 10 Business Days following written notice by the Parent;

SECTION 13.3. The Manager shall be entitled to terminate this Agreement by notice in writing to the Parent if:

(a) any moneys payable by the Parent under this Agreement is not paid when due or if due on demand within 20 Business Days following demand by the Manager;

(b) the Parent defaults in the performance of any other material obligations under this Agreement, subject to a cure right of 20 Business Days following written notice by the Manager; or

SECTION 13.4. Either party shall be entitled to terminate this Agreement by notice in writing to the other party if:

(b) (i) the other party files a petition under any bankruptcy law, makes an assignment for the benefit of its creditors, seeks relief under any

law for the protection of debtors or adopts a plan of liquidation; (ii) a petition is filed against the other party seeking to have it declared insolvent or bankrupt and such petition is not dismissed or stayed within 90 Business Days of its filing; (iii) the other party shall admit in writing its insolvency or its inability to pay its debts as they mature; (iv) an order is made for the appointment of a liquidator, manager, receiver or trustee of the other party of all or a substantial part of its assets; (v) if an encumbrancer takes possession of or a receiver or trustee is appointed over the whole or a substantial part of the other party’s undertaking, property or assets; or (vi) if an order is made or a resolution is passed for the other party’s winding up;

(c) the other party is prevented from performing its obligations hereunder, in any material respect, by reasons of Force Majeure for a period of two or more consecutive months; or

(d) all Supervision Agreements and all Shipmanagement Agreements are terminated in accordance with the respective terms thereof.

SECTION 13.5. Upon the effective date of termination pursuant to this Article XIII, the Manager shall promptly terminate its services hereunder, after taking reasonable commercial steps to minimize any interruption to the business of the Subsidiaries.

SECTION 13.6. Upon termination, the Manager shall, as promptly as possible, submit a final accounting of funds received and disbursed under this Agreement, any Supervision Agreement and/or any Shipmanagement Agreement and of any remaining Management Fees and/or any other funds due from the Parent or any other Subsidiary, calculated pro rata to the date of termination, and any non-disbursed funds of any Subsidiary in the Manager’s possession or control will be paid by the Manager as directed by such Subsidiary promptly upon the Manager’s receipt of all sums then due to it under this Agreement, any Supervision Agreement and/or any Management Agreement, if any.

SECTION 13.7. Upon termination of this Agreement, the Manager shall release to the relevant Subsidiaries the originals where possible, or otherwise certified copies, of all such accounts and all documents specifically relating to each Vessel or the provision of the Services.

Agreement (without taking into account any reduction to the fees payable to the Manager under Section 9.1(a) in the event that a Submanager has been appointed as provided therein), PROVIDED ALWAYS, that the amount of liquidated damages payable hereunder shall never be less than two times the aggregate fees due and payable to the Manager under the terms of this Agreement during the 12-month period ending on the date of termination of this Agreement.

SECTION 13.9. The provisions of this Article XIII shall survive any termination of this Agreement.

ARTICLE XIV

NOTICES

Costamare Inc.

Guildo Pastor Center

7 rue Gabian

98000 Monaco

Telefax: to be advised

Attention: Gerant

Costamare Shipping Company S.A.
60 Zephyrou Street & Syngrou Avenue,
Palaio Faliro, Athens, Greece

Telefax: +30 210 9409051

Attention: General Manager

ARTICLE XV

APPLICABLE LAW

SECTION 15.1. This Agreement and any non-contractual obligations connected with it shall be governed by, and construed in accordance with, the laws of England.

SECTION 15.2. Except for Sections 2.3, 3.5, 9.5 and 9.6 and Articles XI and XII which can be relied on by a Submanager (other than V.Ships) and Sections 2.3, 3.5, 9.5, 9.6 and 10.9 and Articles XI and XII which can be relied on by a Related Manager, no other term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.

ARTICLE XVI

ARBITRATION

ARTICLE XVII

MISCELLANEOUS

SECTION 17.2. During the term hereof, the Manager will not provide services hereunder through, or otherwise cause any Subsidiary to have, an office or fixed place of business in the United States.

SECTION 17.3. This Agreement may be executed in one or more written counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

[ Remainder of page intentionally left blank ]

IN WITNESS WHEREOF the undersigned have executed this Agreement as of the date first above written.

COSTAMARE INC.

By:	/s/ Konstantinos V. Konstantakopoulos
	Name:	Konstantions V. Konstantakopoulos
	Title:	Chief Executive Officer

COSTAMARE SHIPPING COMPANY S.A.

By:	/s/ Diamantis Manos
	Name:	Diamantis Manos
	Title:	Vice President

[ Signature page to the Framework Agreement ]

SCHEDULE A

SUBSIDIARIES

	Subsidiaries	Vessel	Flag
1	ACHILLEAS MARITIME CORPORATION	MAERSK KOBE	MALTA
2	ADELE SHIPPING CO.	MSC AZOV	MALTA
3	ALEXIA TRANSPORT CORP.	ZIM PIRAEUS	HONG KONG
4	ANGISTRI CORPORATION	ZIM NEW YORK	HONG KONG
5	BASTIAN SHIPPING CO.	MSC AJACCIO	MALTA
6	BULLOW INVESTMENTS INC.	MSC MYKONOS	GREEK
7	CADENCE SHIPPING CO.	MSC AMALFI	MALTA
8	CAGNEY SHIPPING CO.	MSC ROMANOS	HONG KONG
9	CAPETANISSA MARITIME CORPORATION	COSCO BEIJING	MALTA
10	CARAVOKYRA MARITIME CORPORATION	COSCO HELLAS	MALTA
11	CHRISTOS MARITIME CORPORATION	SEALAND WASHINGTON	MALTA
12	COSTACHILLE MARITIME CORPORATION	COSCO YANTIAN	MALTA
13	COSTIS MARITIME CORPORATION	SEALAND NEW YORK	MALTA
14	DINO SHIPPING CO.	SEALAND MICHIGAN	MALTA
15	EDITH SHIPPING CO.	KARMEN	LIBERIAN
16	FANAKOS MARITIME CORPORATION	OAKLAND EXPRESS	HONG KONG
17	FASTSAILING MARITIME CO	ZIM SHANGHAI	HONG KONG
18	FAY SHIPPING CO.	MARINA	MALTA
19	FINCH SHIPPING CO.	NEAPOLIS	LIBERIAN
20	FLOW SHIPPING CO.	HALIFAX EXPRESS	HONG KONG
21	HALEY SHIPPING CO.	MSC PYLOS	LIBERIAN
22	IDRIS SHIPPING CO.	ZAGORA	MALTA
23	JODIE SHIPPING CO.	MSC ATHENS	MALTA
24	JOYNER CARRIERS S.A.	MESSINI	LIBERIAN
25	KALAMATA SHIPPING CORPORATION	MAERSK KOLKATA	MALTA
26	KAYLEY SHIPPING CO.	MSC ATHOS	MALTA
27	KELSEN SHIPPING CO.	MAERSK KURE	GREEK
28	LANG SHIPPING CO.	MSC CHALLENGER	HONG KONG
29	LEROY SHIPPING CO.	PROSPER	LIBERIAN
30	LINDNER SHIPPING CO.	VENETIKO	LIBERIAN
31	MADELIA SHIPPING CO.	MSC ULSAN	HONG KONG
32	MANSEL SHIPPING CO.	MSC SIERRA II	LIBERIAN

S-A- 1

33	MARATHOS SHIPPING INC.	MSC MANDRAKI	Greek
34	MARINA MARITIME CORPORATION	COSCO NINGBO	Malta
35	MAS SHIPPING CO.	MAERSK KOKURA	Greek
36	MERTEN SHIPPING CO.	MAERSK KALAMATA	Malta
37	MIKO SHIPPING CO.	SEALAND ILLINOIS	Malta
38	MONTES SHIPPING CO.	MAERSK KAWASAKI	Greek
39	NAVARINO MARITIME CORPORATION	MAERSK KINGSTON	Malta
40	NICKY SHIPPING CO.	MSC REUNION	Liberian
41	ODETTE SHIPPING CO.	MSC NAMIBIA II	Liberian
42	PERCY SHIPPING CO.	STADT LUEBECK	Liberian
43	QUENTIN SHIPPING CO.	VALOR	Malta
44	RAYMOND SHIPPING CO.	VALUE	Malta
45	RENA MARITIME CORPORATION	COSCO GUANGZHOU	Malta
46	SANDER SHIPPING CO.	VALIANT	Malta
47	SPEDDING SHIPPING CO.	LAKONIA	Hong Kong
48	TAKOULIS MARITIME CORPORATION	SINGAPORE EXPRESS	Hong Kong
49	TERANCE SHIPPING CO.	VALENCE	Malta
50	TIMPSON SHIPPING CO.	AREOPOLIS	Liberian
51	UNDINE SHIPPING CO.	VANTAGE	Malta
52	URIZA SHIPPING S.A.	NAVARINO	Malta
53	VALLI SHIPPING CO.	MSC ITEA	Liberian
54	VIRNA SHIPPING CO.	MSC METHONI	Liberian
55	WALDO SHIPPING CO.	MSC KORONI	Liberian

S-A- 2

APPENDIX I

FORM OF SHIP MANAGEMENT AGREEMENT

1.	Date of Agreement [to be dated the date of execution]		THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO) STANDARD SHIP MANAGEMENT AGREEMENT CODE NAME: “SHIPMAN 98”
			Part I
2.	Owners (name, place of registered office and law of registry) ( Cl. 1 )	3.	Managers (name, place of registered office and law of registry) ( Cl. 1 )

	Name		Name
	[name of relevant Subsidiary]		Costamare Shipping Company S.A.
	Place of registered office		Place of registered office
	[to be completed]		Panama City, Republic of Panama
	Law of registry		Law of registry
	[to be completed]		Republic of Panama
4.	Day and year of commencement of Agreement ( Cl. 2 ) [to be completed on execution]
5.	Crew Management (state “yes” or “no” as agreed) ( CI. 3.1 ) YES	6.	Technical Management (state “yes” or “no” as agreed) ( Cl. 3.2 ) YES
7.	Commercial Management (state “yes” or “no” as agreed) ( Cl. 3.3 ) YES	8.	Insurance Arrangements (state “yes” or “no” as agreed) ( Cl. 3.4 ) YES
9.	Accounting Services (state “yes” or “no” as agreed) ( Cl. 3.5 ) YES	10.	Sale or purchase of the Vessel (state “yes” or “no” as agreed) ( Cl. 3.6 ) YES
11.	Provisions (state “yes” or “no” as agreed) ( Cl. 3.7 ) YES	12.	Bunkering (state “yes” or “no” as agreed) ( Cl. 3.8 ) YES
13.	Chartering Services Period (only to be filled in if “yes” stated in Box 7) ( Cl. 3.3(i) ) 36 months (including any optional extensions applicable)	14.	Owners’ Insurance (state alternative ( i ), ( ii ) or ( iii ) of Cl. 6.3 ) Clause 6.3(ii)
15.	~~Annual~~ Management Fee (state ~~annual~~ amount) ( Cl. 8.1 ) See Clause 8.1	16.	Severance Costs (state maximum amount) ( Cl. 8.4(ii ) not applicable
17.	Day and year of termination of Agreement ( Cl. 17 ) see Clause 17	18.	Law and Arbitration (state alternative 19.1 , 19.2 or 19.3 ; if 19.3 place of arbitration must be stated) (Cl. 19) see Clause 19.1
19.	Notices (state postal ~~and-cable~~ -address ~~, telex~~ and telefax number for serving notice and communication to the Owners) ( Cl. 20 ) c/o Costamare Inc. Guildo Pastor Center 7 rue de Gabian 98000 Monaco Telefax: to be advised Attention: Gerant	20.	Notices (state postal ~~and cable~~ address ~~, telex~~ and telefax number for serving notice and communication to the Managers) ( Cl. 20 ) 60 Zephyrou Street & Syngrou Avenue Athens, Greece Telefax: +30 210 940 9051 Attention: Managing Director

It is mutually agreed between the party stated in Box 2 and the party stated in Box 3 that this Agreement consisting of PART I and PART II as well as Annex “A” (Details of Vessel) ~~, “B” (Details of Crew),~~ ~~“C” (Budget) and “D” (Associated vessels)~~ attached hereto, shall be performed subject to the conditions contained herein. In the event of a conflict of conditions, the provisions of PART I and Annex “A” ~~, “B” , “C” and “D”~~ shall prevail over those of PART II to the extent of such conflict but no further. .

Signature(s) (Owners)

[name of relevant Subsidiary]

Signature(s) (Managers)

COSTAMARE SHIPPING COMPANY S.A.

A-I- 1

ANNEX “A” (DETAILS OF VESSEL OR VESSELS) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT - CODE NAME: “SHIPMAN 98”

Date of Agreement:

Name of Vessel(s):

Particulars of Vessel(s):

A-I- 2

~~ANNEX “B” (DETAILS OF CREW) TO~~

~~THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)~~

~~STANDARD SHIP MANAGEMENT AGREEMENT - CODE NAME: “SHIPMAN 98”~~

~~Date of Agreement:~~

~~_______~~

~~Name of Vessel(s):~~

~~_______~~

~~Numbers~~	~~Rank~~	~~Nationality~~
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______
_______	_______	_______

A-I- 3

~~ANNEX “C” (BUDGET) TO~~

~~THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)~~

~~STANDARD SHIP MANAGEMENT AGREEMENT - CODE NAME: “SHIPMAN 98”~~

~~Date of Agreement:~~

~~_______~~

~~Managers’ Budget for the first year with effect from the Commencement Date of this Agreement:~~

_______

A-I- 4

~~ANNEX “D” (ASSOCIATED VESSELS) TO~~

~~THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)~~

~~STANDARD SHIP MANAGEMENT AGREEMENT - CODE NAME: “SHIPMAN 98”~~

~~NOTE: PARTIES SHOULD BE AWARE THAT BY COMPLETING THIS ANNEX “D” THEY WILL BE SUBJECT TO THE PROVISIONS OF SUB-CLAUSE 18.1(i) OF THIS AGREEMENT.~~

~~Date of Agreement:~~

~~_______~~

~~Details of Associated Vessels:~~

_______

A-I- 5

PART II
“SHIPMAN 98” Standard Ship Management Agreement

1. Definitions	1
In this Agreement save where the context otherwise requires,	2
the following words and expressions shall have the meanings	3
hereby assigned to them.	4
“ Owners ” means the party identified in Box 2 .	5
“ Managers ” means the party identified in Box 3 .	6
“ Vessel ” means the vessel or vessels details of which are set out	7
in Annex “A” attached hereto.	8
“Business Days” shall have the same meaning as ascribed thereto
in Section 1.1 of the Framework Agreement.	8
*“ Crew* ” means the Master, officers and ratings employed on the**	9
Vessel from time to time ~~of the numbers,~~
~~rank and nationally specified in Annex “B” attached hereto~~ .	10
~~“Crew support Code” means all expenses of a general nature~~	11
~~which are not particularly referable to any individual vessel for~~	12
~~the time being managed by the Managers and which are incurred~~	13
~~by the Managers for the purpose of providing an efficient and~~	14
~~economic management service and, without prejudice to the~~	15
~~generality of the foregoing, shall include the cost of crew standby~~	16
~~pay, training schemes for officers and ratings, cadet training~~	17
~~schemes, sick pay, study pay, recruitment and interviews.~~	18
*“Related Manager” shall have the meaning as ascribed thereto*	19
*in Section 1.1 of the Framework Agreement.*
“ Severance Costs ” means the costs which the employers are
legally obliged to pay to or in respect of the Crew as a result of	20
the early termination of any employment contract for service on	21
the Vessel.	22
“ Crew Insurances ” means insurances against crew risks which	23
shall include but not be limited to death, sickness, repatriation,	24
injury, shipwreck unemployment indemnity and loss of personal	25
effects.	26
“Framework Agreement” means the agreement dated
2 November 2015 made between the Parent and the Managers.
“ Management Services ” means the services specified in sub-	27
clauses 3.1 to 3.8 as indicated affirmatively in Boxes 5 to 12 .	28
“ ISM Code ” means the International Management Code for the	29
Safe Operation of Ships and for Pollution Prevention as adopted	30
by the International Maritime Organization (IMO) by resolution	31
A.741(18) or any subsequent amendment thereto.	32
“ISPS Code” means the International Ship and Port Facility.
Security Code constituted pursuant to resolution A.924(22) of
the International Maritime Organisation now set out in Chapter
XI-2 of the International Convention for the Safety of Life at Sea
(SOLAS) 1974 (as amended) and the mandatory ISPS Code as
adopted by a Diplomatic Conference of the International
Maritime Organisation on Maritime Security in December 2002
and includes any amendments or extensions to it and any
regulation issued pursuant to it.
“Parent” means Costamare Inc. of Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the
Marshall Islands MH96960.
“ STCW 95 ” means the International Convention on Standards	33
of Training, Certification and Watchkeeping for Seafarers, 1978,	34
as amended in 1995 or any subsequent amendment thereto.	35

2. Appointment of Managers	36
With effect from the day and year stated in Box 4 and continuing	37
unless and until terminated as provided herein, the Owners	38
hereby appoint the Managers as the technical and commercial	39
managers of the Vessel and the Managers hereby agree
to act as the technical and commercial M managers of the Vessel.	40

3. Basis of Agreement
Subject to the terms and conditions herein provided, during the	42
period of this Agreement, the Managers shall carry out	43
Management Services in respect of the Vessel as agents for	44
and on behalf of the Owners.	45
T he Managers shall have authority
to take such actions as they may from time to time in their absolute	46

discretion consider to be necessary to enable them to perform	47
this Agreement in accordance with sound ship management	48
practice.	49

3.1 Crew Management	50
(only applicable if agreed according to Box 5 )	51
The Managers shall provide suitably qualified Crew for the Vessel	52
as required by the Owners in accordance with the STCW 95	53
requirements, provision of which includes but is not limited to	54
the following functions:	55
(i) selecting and engaging the Vessel’s Crew, including payroll	56
arrangements, pension administration, and insurances for	57
the Crew other than those mentioned in Clause 6 ;	58
(ii) ensuring that the applicable requirements of the law of the	58
flag of the Vessel are satisfied in respect of manning levels,	60
rank, qualification and certification of the Crew and	61
employment regulations including Crew’s tax, social	62
insurance, discipline and other requirements;	63
(iii) ensuring that all members of the Crew have passed a medical	64
examination with a qualified doctor certifying that they are fit	65
for the duties for which they are engaged and are in possession	66
of valid medical certificates issued in accordance with	67
appropriate flag State requirements. In the absence of	68
applicable flag State requirements the medical certificate shall	69
be dated not more than three months prior to the respective	70
Crew members leaving their country of domicile and	71
maintained for the duration of their service on board the Vessel;	72
(iv) ensuring that the Crew shall have a command of the English	73
language of a sufficient standard to enable them to perform	74
their duties safely;	75
(v) arranging transportation of the Crew, including	76
repatriation, board and lodging as and when required at rates and
types of accommodations as customary in the industry;
(vi) training of the Crew and supervising their efficiency;	77
(vii) keeping and maintaining full and complete records of any	78
labor agreements which may be entered into with the Crew and,
if applicable, conducting union negotiations;
(viii) operating the Managers’ drug and alcohol policy unless	79
otherwise agreed in writing.	80

3.2 Technical Management	81
(only applicable if agreed according to Box 6 )	82
The Managers shall provide technical management which	83
includes, but is not limited to, the following functions:	84
(i) provision of competent personnel to supervise the	85
maintenance and general efficiency of the Vessel;	86
(ii) arrangement and supervision of dry dockings, repairs,	87
alterations and the upkeep of the Vessel to the standards	88
required by the Owners provided that the Managers shall	89
be entitled to incur the necessary expenditure to ensure	90
that the Vessel will comply with the law of the flag of the	91
Vessel and of the places where she trades, and all	92
requirements and recommendations of the classification	93
society;	94
(iii) arrangement of the supply of necessary stores, spares and	95
lubricating oil;	96
(iv) appointment of surveyors and technical consultants as the	97
Managers may consider from time to time to be necessary;	98
(v) development, implementation and maintenance of a Safety	99
Management System (SMS) in accordance with the ISM	100
Code (see sub-clauses 4.2 and 5.3 ) and of a security system in	101
accordance with the ISPS Code;
(vi) handling any claims against the builder of the Vessel
arising out of the relevant shipbuilding contract,
if applicable; and
(vii) on request by the Owners, providing the Owners with a
copy of any inspection report, survey, valuation or any other
similar report prepared by any shipbrokers, surveyors, the
Class etc..

A-I- 6

PART II
“SHIPMAN 98” Standard Ship Management Agreement

3.3 Commercial Management	102
(only applicable if agreed according to Box 7 )	103
The Managers shall provide the commercial operation of the	104
Vessel, as required by the Owners, which includes, but is not	105
limited to, the following functions:	106
(i) providing chartering services in accordance with the Owners’	107
instructions which include, but are not limited to, seeking	108
and negotiating employment for the Vessel and the conclusion	109
(including the execution thereof) of charter parties or other	110
contracts relating to the employment of the Vessel, whether on a	111
voyage, time, demise, contract of affreightment or other
basis. If such a
contract exceeds the period	112
stated in Box 13 , consent thereto
in writing shall first be obtained from the Owners.	113
(ii) arranging of the proper payment to Owners or their nominees	114
of all hire and/or freight revenues or other moneys of	115
whatsoever nature to which Owners may be entitled arising	116
out of the employment of or otherwise in connection with the	117
Vessel; .	118
(iii) providing voyage estimates and accounts and calculating of	119
hire, freights, demurrage and/or dispatch moneys due from	120
or due to the charterers of the Vessel;	121
(iv) issuing to the Crew of appropriate voyage instructions and	122
monitoring voyage performance;
(v) appointing agents;	123
(vi) appointing stevedores;	124
(vii) arranging surveys associated with the commercial operation	125
of the Vessel;	126
(viii) carrying out the necessary communications with the
shippers, charterers and others involved with the receiving
and handling of the Vessel at the relevant loading and
discharging ports, including sending any notices required
under the terms of the Vessel’s employment at the time;
(ix) invoicing on behalf of the Owners all freights, hires,
demurrages, outgoing claims, refund of taxes, balances of
disbursements, statements of account and other sums due
to the Owners and account receivables arising from the
operation of the Vessel and, upon the request of the Owners,
issuing releases on behalf of the Owners upon receipt of
payment or settlement of any such amounts;
(x) preparing off-hire statements and/or hire statements;
(xi) procuring and arranging for port entrance and clearance,
pilots, consular approvals and other services necessary for
the management and safe operation of the Vessel; and
(xii) reporting to the Owners of any major casualties,
damages received or caused by the Vessel or any major
release or discharge of oil or other hazardous material not in
compliance with any laws.
3.4 Insurance Arrangements’	127
( only applicable if agreed according to Box 8 )	128
The Managers shall arrange insurances in accordance with	129
Clause 6, on such terms and conditions as the Owners shall	130
have instructed or agreed, in particular regarding underwriters	131
conditions,
insured values, deductibles and franchises.	132

3.5 Accounting Services	133
( only applicable if agreed according to Box 9 )	134
Without prejudice to the relevant provisions of the	135
Framework Agreement and, in particular, but without
limitation, Section 4.9, Section 5.1 and Section 10.6 thereof,
T the Managers shall:
(I) establish an accounting system which meets the	136
requirements of the Owners and provide regular accounting	137
services, supply regular reports and records,	138
(ii) maintain the records of all costs and expenditure incurred	139
as well as data necessary or proper for the settlement of	140
accounts between the parties.	141

3.6 Sale or Purchase of the Vessel	142
( only applicable if agreed according to Box 10 )	143
The Managers shall, in accordance with the Owners’ instructions,	144
supervise the sale or purchase of the Vessel, including the	145
performance of any sale or purchase agreement, but not	146
negotiation of the same. The Managers shall, on the request of	147
the Owners, either directly or by employing the services of a
broker, endeavor to procure a buyer for the Vessel at a price
and otherwise on terms acceptable to the Owners.
3.7 Provisions ( only applicable if agreed according to Box 11 )	148
The Managers shall arrange for the supply of provisions.	149

3.8 Bunkering ( only applicable if agreed according to Box 12 )	150
The Managers shall arrange for the provision of bunker fuel of the	151
quality specified by the Owners as required for the Vessel’s trade.	152

4. Managers’ Obligations	153
4.1 Without prejudice to the relevant provisions of the Framework	154
Agreement and in particular, but without limitation
to the foregoing, the provisions of Section 2.3, Section 4.1 and
Section 4.5 thereof, the Managers undertake to
use their ~~best-endeavors~~ commercially reasonable efforts to
provide the agreed Management Services as agents for and on	155
behalf of the Owners in accordance with sound ship management	156
practice and to protect and promote the interests of the Owners in	157
all matters relating to the provision of services hereunder.	158
Provided, however, that the Managers in the performance of their	159
management responsibilities under this Agreement shall be entitled	160
to have regard to their overall responsibility in relation to all vessels	161
as may from time to time be entrusted to their management and	162
in particular, but without prejudice to the generality of the foregoing,	163
the Managers shall be entitled to allocate available supplies,	164
manpower and services in such manner as in the prevailing	165
circumstances the Managers in their absolute discretion consider	166
to be fair and reasonable.	167
4.2 Where the Managers are providing Technical Management	168
in accordance with sub-clause 3.2 , they shall procure that the	169
requirements of the law of the flag of the Vessel are satisfied and	170
they shall in particular be deemed to be the “Company’ as defined	171
by the ISM Code, assuming the responsibility for the operation of	172
the Vessel and taking over the duties and responsibilities imposed	173
by the ISM Code and/or the ISPS Code when applicable.	174



5. Owners’ Obligations	175
5.1 Without prejudice to the relevant provisions of the Framework	176
Agreement, T the Owners shall pay all sums due to
the Managers punctually
in accordance with the terms of this Agreement.	177
5.2 Where the Managers are providing Technical Management	178
in accordance with sub-clause 3.2 , the Owners shall:	179
(i) procure that all officers and ratings supplied by them or on	180
their behalf comply with the requirements of STCW 95;	181
(ii) instruct such officers and ratings to obey all reasonable orders	182
of the Managers in connection with the operation of the	183
Managers’ safety management system.	184
5.3 Where the Managers are not providing Technical Management	185
in accordance with sub-clause 3.2 , the Owners shall procure that	186
the requirements of the law of the flag of the Vessel are satisfied	187
and that they, or such other entity as may be appointed by them	188
and identified to the Managers, shall be deemed to be the	189
“Company” as defined by the ISM Code assuming the responsibility	190
for the operation of the Vessel and taking over the duties and	191
responsibilities imposed by the ISM Code when applicable.	192


6.Insurance Policies	193
The Owners shall procure, whether by instructing the Managers	194
under sub-clause 3.4 or otherwise, that throughout the period of	195

A-I- 7

PART II
“SHIPMAN 98” Standard Ship Management Agreement

this Agreement:	196
6.1 at the Owners’ expense, the Vessel is insured for not less	197
than her sound market value or entered for her full gross tonnage,	198
as the case may be for:	199
(i) usual hull and machinery marine risks (including crew	200
negligence) and excess liabilities;	201
(ii) protection and indemnity risks (including pollution risks and	202
Crew insurances); ~~and~~	203
(iii) war risks (including protection and indemnity and crew risks);	204
and
(iv) any other insurance that the Owners determine or the
Managers advise them in writing that, in either case, it is
prudent or, as the case may be, appropriate on the basis of
prevailing market practices to be obtained in respect of the
Vessel, its freight/hire or any third party liabilities,
	205
in each case in accordance with the best practice of prudent owners
of
vessels of a similar type to the Vessel, with first class insurance	206
companies, underwriters or associations (“the Owners’	207
Insurances”);	208
6.2 all premiums and calls and applicable deductibles and/or	209
franchises on the Owners’ Insurances are paid
promptly by their due date,	210
6.3 the Owners’ Insurances name the Managers and, subject	211
to underwriters’ agreement, any third party designated by the	212
Managers as a joint assured, with full cover, with the Owners	213
obtaining cover in respect of each of the insurances specified in	214
sub-clause 6.1 :	215
(i) on terms whereby the Managers and any such third party	216
are liable in respect of premiums or calls arising in connection	217
with the Owners’ Insurances; or	218
(ii) if reasonably obtainable, on terms such that neither the	219
Managers nor any such third party shall be under any	220
liability in respect of premiums or calls arising in connection	221
with the Owners’ Insurances; or	222
(iii) on such other terms as may be agreed in writing.	223
Indicate alternative (i), (ii) or (iii) in Box 14 . If Box 14 is left	224
blank then (i) applies.	225
6.4 written evidence is provided, to the reasonable satisfaction	226
of the Managers, of their compliance with their obligations under	227
Clause 6 within a reasonable time of the commencement of	228
the Agreement, and of each renewal date and, If specifically	229
requested, of each payment date of the Owners’ Insurances,	230

7. Income Collected and Expenses Paid on Behalf of Owners	231
7.1 Without prejudice to the provisions of Section 10.7 of the	232
Framework Agreement, all moneys collected by the
Managers under the terms of
this Agreement (other than moneys payable by the Owners to	233
the Managers) and any interest thereon shall be held to the	234
credit of the Owners in a separate bank account.	235
7.2 Without prejudice to the provisions of Section 9.7, Section	236
10.5 and Section 10.8 of the Framework Agreement, A ll
expenses incurred by the Managers under the terms
of this Agreement on behalf of the Owners (including expenses	237
as provided in Clause 8 ) may be debited against the Owners	238
in the account referred to under sub-clause 7.1 but shall in any	239
event remain payable by the Owners to the Managers on	240
demand. For the avoidance of doubt, the Managers can make	241
such demand on the Owners as well as on the Parent as
provided in Section 10.5 of the Framework Agreement.
Furthermore and without prejudice to the generality of the
provisions of this Clause 7, the Managers shall, subject to being
placed in funds by the Owners or the Parent, arrange for the
payment of all ordinary charges incurred in connection with the
Management Services, including, but not limited to, all canal
tolls, port charges, any amounts due to any governmental
authority with respect to the Crew and all duties and taxes in
respect of the Vessel, the cargo, hire or freight (whether levied

against the Owners, the Parent or the Vessel), insurance
premiums, advances of balances of disbursements, invoices for
bunkers, stores, spares, provisions, repairs and any other
material and/or service in respect of the Vessel.
8. Management Fees	242
8.1 The Owners shall pay to the Managers for their services	243
as Managers under this Agreement ~~an-annual~~ the management	244
fees as stated in ~~Box 15~~ Section 9.1(a) and Section 9.1(b) of the	245
Framework Agreement -which shall be payable ~~by-equal~~
~~monthly installments in advance, the first installment being~~ monthly	246
in accordance with the provisions of Article IX of the Framework
Agreement.
~~payable on the commencement of the Agreement (see~~ ~~Clause~~	247
2 ~~and~~ ~~Box 4~~ ~~) and subsequent installments being payable every~~	248
~~month.~~	249
8.2 The management fees shall be subject to ~~an annual~~ -review	250
in accordance with the provisions of Sections 9.2 and 9.3 of the	251
Framework Agreement ~~the anniversary date of the~~
~~Agreement and the proposed~~
~~fee shall be presented in the annual budget referred to in sub-~~	252
~~clause 9.1~~ .	253
8.3 ~~The Managers shall, at no extra cost to the Owners, provide~~	254
~~their own office accommodation, office staff, facilities and~~	255
~~stationery.~~ Without limiting the generality of Clause 7 the Owners	256
shall reimburse the Managers for postage and communication	257
expenses, travelling expenses, and other out of pocket	258
expenses properly incurred by the Managers in pursuance of	259
the Management Services.	260
8.4 The provisions of Section 9.4, Section 9.5, Section 9.6 and	261
Section 9.7 of the Framework Agreement shall be
deemed as incorporated herein mutatis mutandis.
8.5 The Managers have the right to demand the payment of any
of the management fees and expenses payable under this
Agreement either from the Parent or the Owners. Payment of
any such fees or expenses or any part thereof by either the
Parent or the Owners shall prevent the Managers from making a
claim on the other person for the same amount to the extent
that the same has been already paid to the Managers.
~~in the event of the appointment of the Managers being~~
~~terminated by the Owners of the Managers in accordance with~~	262
~~the provisions of Clauses~~ 17 ~~and~~ 18 ~~other than by reason of~~	263
~~default by the Managers, or if the Vessel is lost, sold or otherwise~~	264
~~Disposed of, the “management fee” payable to the Managers~~	265
~~According to the provisions of sub-clause~~ ~~8.1~~ ~~, shall continue to~~	266
~~be payable for a further period of three calendar months as~~	267
~~from the termination date. In addition, provided that the~~	268
~~Managers provide Crew for the Vessel in accordance with sub-~~	269
~~clause~~ ~~3.1~~ .	270
~~(i) the Owners shall continue to pay Crew Support Costs during~~	271
~~the said further period of three calendar months and~~	272
~~(ii) the Owners shall pay an equitable proportion of any~~	273
~~Severance Costs which may materialize, not exceeding~~	274
~~the amount stated in~~ ~~Box 16~~ .	275
~~8.5~~ ~~If the Owners decide to lay up the Vessel whilst this~~	276
~~Agreement remain in force and such lay up lasts for more~~	277
~~than three months, an appropriate reduction of the management~~	278
~~fee for the period exceeding three months until one month~~	279
~~before the Vessel is again put into service shall be mutually~~	280
~~agreed between the parties.~~	281
~~8.6~~ ~~Unless otherwise agreed in writing all discounts and~~	282
~~commissions obtained by the Managers in the course of the~~	283
~~management of the Vessel shall be credited to the Owners~~	284

9. Budgets and Management of Funds	285
9.1 The Owners are aware that the Managers will be preparing	286
budgets in connection with, inter alia, the provision of the
Management Services which the Managers will be submitting
for approval to the Parent in accordance with the provisions of
Article X of the Framework Agreement. ~~The Managers~~
~~shall present to the Owners annually a~~

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~~budget for the following twelve months in such form as the~~	287
~~Owners require. The budget for the first year hereof is set out~~	288
in ~~Annex “C”~~ ~~hereto. Subsequent annual budgets shall be~~	289
~~prepared by the Managers and submitted to the Owners not~~	290
~~less than three months before the anniversary date of the~~	291
~~commencement of this Agreement (see Clause~~ 2 ~~and~~ ~~Box 4~~ ).	292
~~9.2~~ ~~The Owners shall indicate to the Managers their acceptance~~	293
~~and approval of the annual budget within one month of~~	294
~~presentation and in the absence of any such indication the~~	295
~~Managers shall be entitled to assume that the Owners have~~	296
~~accepted the proposed budget.~~	297
~~9.3~~ ~~Following the agreement of the budget, the Managers shall~~	298
~~prepare and present to the Owners their estimate of the working~~	299
~~capital requirement of the Vessel and the Managers shall each~~	300
~~month up date this estimate. Based thereon,~~ Without prejudice to the right of the Managers to ask for funds in relation to the Management Services directly from the Parent in accordance with the relevant provisions of the Framework Agreement, the Managers shall	301
each month request the Owners in writing for the funds required	302
to run the Vessel for the ensuing month, including the payment	303
of any occasional or extraordinary item of expenditure, such as	304
emergency repair costs, additional insurance premiums, bunkers	305
or provisions. Such funds shall be received by the Managers	306
within ten running days after the receipt by the Owners of the	307
Managers’ written request and shall be held ~~to the credit of the~~	308
~~Owners~~ in a separate bank account in the name of the Managers or, if requested by the Managers, in the name of the Owners.	309
~~9.4~~ ~~The Managers shall produce a comparison between~~	310
~~budgeted and actual income and expenditure of the Vessel in~~	311
~~such form as required by the Owners monthly or at such other~~	312
~~intervals as mutually agreed.~~	313
9.5 Notwithstanding anything contained herein to the contrary,	314
the Managers shall in no circumstances be required to use or	315
commit their own funds to finance the provision of the	316
Management Services.	317

10. Managers’ Right to Sub-Contract	318
Except to a Related Manager or V.Ships Greece Ltd. (where the Manager may subcontract any of their obligations hereunder, without need of obtaining the Owners’ consent for doing so), or as provided in the Framework Agreement, T the Managers shall not have the right to sub-contract any of	319
their obligations hereunder, including those mentioned in sub-	320
clause 3.1 , without the prior written consent of the Owners which	321
shall not be unreasonably withheld and which shall be promptly responded to. In the event of such a sub-	322
contract the Managers shall remain fully liable for the due	323
performance of their obligations under this Agreement.	324

11. Responsibilities	325
The parties agree that the provisions of Sections 11.1 to 11.5 (inclusive) of the Framework Agreement, shall apply to this Agreement mutatis mutandis, save that references therein to “any Shipmanagement Agreement or any Supervision Agreement” shall be omitted and references to “Parent”, “any Subsidiary”, “Manager”, “any Submanager”, “a Vessel”, “Section”, “Management Fees”, “each Shipmanagement Agreement”, “Subsidiaries” and “Article Xl” shall be construed as references to the Owners, the Owners, the Managers, any submanager, the Vessel, Clause, management fee, this Agreement, the Owners and Clause 11, respectively, when used herein.

11.1 Force Majeure ~~- Neither the Owners nor the Managers~~
~~shall be under any liability for any failure to perform any of their~~	327
~~obligations hereunder by reason of any cause whatsoever of~~	328
~~any nature or kind beyond their reasonable control~~	329
11.2 Liability to Owners ~~– (i) Without prejudice to sub-clause~~	330

~~11.1, the Managers shall be under no liability whatsoever to the~~	331
~~Owners for any loss, damage, delay or expense of whatsoever~~	332
~~nature, whether direct or indirect, (including but not limited to~~	333
~~loss of profit arising out of or in connection with detention of or~~	334
~~delay to the Vessel) and howsoever arising in the course of~~	335
~~performance of the Management Services UNLESS same is~~	336
~~proved to have resulted solely from the negligence, gross~~	337
~~negligence or wilful default of the Managers or their employees,~~	338
~~or agents or sub-contractors employed by them in connection~~	339
~~with the Vessel, in which case (save where loss, damage, delay~~	340
~~or expense has resulted from the Managers’ personal act or~~	341
~~omission committed with the intent to cause same or recklessly~~	342
~~and with knowledge that such loss, damage, delay or expense~~	343
~~would probably result) the Managers’ liability for each incident~~	344
~~or series of incidents giving rise to a claim or claims shall never~~	345
~~Exceed a total of ten times the annual management fee payable~~	346
~~hereunder,~~	347
~~(ii) Notwithstanding anything that may appear to the contrary in~~	348
~~this Agreement, the Managers shall not be liable for any of the~~	349
~~actions of the Crew, even if such actions are negligent, grossly~~	350
~~negligent or wilful, except only to the extent that they are shown~~	351
~~to have resulted from a failure by the Managers to discharge~~	352
~~their obligations under sub clause~~ ~~3.1~~ ~~, in which case their liability~~	353
~~shall be limited in accordance with the terms of this~~ ~~Clause 11~~ .	354
11.3 Indemnity ~~– Except to the extent and solely for the amount~~	355
~~therein set out that the Managers would be liable under sub-~~	356
~~clause~~ ~~11.2~~ ~~, the Owners hereby undertake to keep the Managers~~	357
~~and their employees, agents and sub-contractors indemnified~~	358
~~and to hold them harmless against all actions, proceedings,~~	359
~~claims, demands or liabilities whatsoever or howsoever arising~~	360
~~which may be brought against them or incurred or suffered by~~	361
~~them arising out of or in connection with the performance of the~~	362
~~Agreement, and against and in respect of all costs, losses,~~	363
~~damages and expenses including legal costs and expenses on~~	364
~~a full indemnity basis) which the Managers may suffer or incur~~	365
~~(either directly or indirectly) in the course of the performance of~~	366
~~this Agreement.~~	367
11.4 “Himalaya” ~~– It is hereby expressly agreed that no~~	368
~~employee or agent of the Managers (including every sub-~~	369
~~contractor from time to time employed by the Managers) shall in~~	370
~~Any circumstances whatsoever be under any liability whatsoever~~	371
~~to the Owners for any loss, damage or delay of whatsoever kind~~	372
~~arising or resulting directly or indirectly from any act, neglect or~~	373
~~default on his part while acting in the course of or in connection~~	374
~~with his employment and, without prejudice to the generality of~~	375
~~the foregoing provisions in this~~ ~~Clause 11~~ ~~, every exemption,~~	376
~~limitation, condition and liberty herein contained and every right,~~	377
~~exemption from liability, defence and immunity of whatsoever~~	378
~~nature applicable to the Managers or to which the Managers are~~	379
~~entitled hereunder shall also be available and shall extend to~~	380
~~protest every such employee or agent of the Managers acting~~	381
~~as aforesaid and for the purpose of all the foregoing provisions~~	382
~~of this~~ ~~Clause 11~~ ~~the Managers are or shall be deemed to be~~	383
~~acting as agent or trustee on behalf of and for the benefit of all~~	384
~~persons who are or might be their servants or agents from time~~	385
~~to time (including sub-contractors as aforesaid) and all such~~	386
~~persons shall to this extent be or be deemed to be parties to this~~	387
~~Agreement.~~	388

12. Documentation	389
Without prejudice to the relevant provisions of the Framework Agreement, W where the Managers are providing Technical Management in	390
accordance with sub-clause 3.2 and/or Crew Management in	391
accordance with sub-clause 3.1 , they shall make available,	392
upon Owners’ request, all documentation and records related	393
to the Safety Management System (SMS) and/or the Crew	394
which the Owners need in order to demonstrate compliance	395
with the ISM Code, the ISPS Code and STCW 95 or to defend a claim against	396

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a third party.	397

13. General Administration	398
13.1 Without prejudice to the provisions of Article V of the Framework Agreement, , T the Managers shall handle and settle all claims arising	399
out of the Management Services hereunder and keep the Owners	400
informed regarding any incident of which the Managers become	401
aware which gives or may give rise to material claims or disputes involving	402
third parties.	403
13.2 The Managers shall, as instructed by the Owners under this Agreement , bring	404
or defend actions, suits or proceedings in connection with matters	405
entrusted to the Managers according to this Agreement.	406
13.3 The Managers shall also have power to obtain legal or	407
technical or other outside expert advice in relation to the handling	408
and settlement of claims and disputes or all other matters	409
effecting the interests of the Owners in respect of the Vessel.	410
13.4 The Owners shall arrange for the provision of any	411
necessary guarantee bond or other security.	412
13.5 Any costs ~~reasonably~~ -incurred by the Managers in	413
carrying out their obligations according to Clause 13 shall be	414
reimbursed by the Owners.	415

14. Auditing	416
The Managers shall at all times maintain and keep true and	417
correct accounts and shall make the same available for inspection	418
and auditing by the Owners at such times as may be mutually	419
agreed. On the termination, for whatever reasons, of this	420
Agreement, the Managers shall release to the Owners, if so	421
requested, the originals where possible, or otherwise certified	422
copies, of all such accounts and all documents specifically relating	423
to the Vessel and her operation. For the avoidance of any doubt,	424
this Clause is in addition to and not in substitution of the
relevant provisions of the Framework Agreement.

15. Inspection of Vessel	425
The Owners shall have the right at any time after giving	426
reasonable notice to the Managers to inspect the Vessel for any	427
reason they consider necessary.	428

16. Compliance with Laws and Regulations	429
The Managers will not do or permit to be done anything which	430
might cause any breach or infringement of the laws and	431
regulations of the Vessel’s flag, or of the places where she trades.	432

17. Duration of the Agreement	433
This Agreement shall come into effect on the day and year stated	434
in Box 4 and shall continue until the date the Framework	435
Agreement is terminated in accordance with the provisions of
Article XIII thereof, unless this Agreement is terminated earlier
in accordance with the provision of Clause 18 hereof ~~the date~~
~~stated in~~ ~~Box 17~~ .
~~Thereafter it shall continue until terminated by either party giving~~	436
~~to the other notice in writing, in which event the Agreement shall~~	437
~~terminate upon the expiration of a period of two months from the~~	438
~~date upon which such notice was given.~~	439

18. Termination	440
18.1 Owners’ default	441
(i) The Managers shall be entitled to terminate the Agreement	442
with immediate effect by notice in writing if any moneys	443
payable by the Owners under this Agreement ~~and/or the~~	444
~~owners of-any associated vessel, details of which are listed~~	445
in ~~Annex “D”~~ , shall not have been received in the Managers’	446
nominated account within ~~ten~~ 20 ~~running~~ Business d Days of	447
receipt by
the Owners of the Managers written request or if the Vessel	448

is repossessed by the Mortgagees.	449
(ii) if the Owners:	450
(a) fall to meet their obligations under sub-clauses 5.2	451
and 5.3 of this Agreement for any reason within their	452
control, or	453
(b) proceed with the employment of or continue to employ	454
the Vessel in the carriage of contraband, blockade	455
running, or in an unlawful trade, or on a voyage which	456
in the reasonable opinion of the Managers is unduly	457
hazardous or improper,	458
the Managers may give notice of the default to the Owners,	459
requiring them to remedy it as soon as practically possible.	460
In the event that the Owners fall to remedy it within a	461
~~reasonable time~~ 20 Business Days of receipt by the Owners	462
of the Managers’ written request to the satisfaction of the
Managers, the
Managers shall be entitled to terminate the Agreement	463
with immediate effect by notice In writing.	464
18.2 Managers’ Default	465
If the Managers fail to meet their obligations under Clauses 3	466
and 4 of this Agreement for any reason within the control of the	467
Managers, the Owners may give notice to the Managers of the	468
default, requiring them to remedy it within 20 Business Days as	469
~~soon as practically~~
~~possible~~ . In the event that the Managers fail to remedy it within a	470
~~Reasonable time~~ such period to the satisfaction of the Owners, the	471
Owners
shall be entitled to terminate the Agreement with immediate effect	472
by notice in writing.	473
18.3 Extraordinary Termination	474
This Agreement shall be deemed to be terminated in the case of	475
the sale of the Vessel or if the Vessel becomes a total loss or is	476
declared as a constructive or compromised or arranged total	477
loss or is requisitioned.	478
18.4 For the purpose of sub-clause 18.3 hereof	479
(i) the date upon which the Vessel is to be treated as having	480
been sold or otherwise disposed of shall be the date on	481
which the Owners cease to be registered as Owners of	482
the Vessel;	483
(ii) the Vessel shall not be deemed to be lost unless either	484
she has become an actual total loss or agreement has	485
been reached with her underwriters in respect of her	486
constructive, compromised or arranged total loss or if such	487
agreement with her underwriters is not reached it is	488
adjudged by a competent tribunal that a constructive loss	489
of the Vessel has occurred.	490
18.5 The parties agree that the provisions of Sections 13.4(a) to	491
13.4(d) (inclusive) of the Framework Agreement, shall
apply to this Agreement mutatis mutandis. ~~This agreement shall~~
~~terminate forthwith in the event of~~
~~an order being made or resolution passed for the winding up,~~	492
~~dissolution, liquidation or bankruptcy of other party (otherwise~~	493
~~than for the purpose of reconstruction or amalgamation) or if a~~	494
~~receiver is appointed, or if it suspends payment, ceases to~~	495
~~on business or makes any special arrangement or composition~~	496
~~carry with its creditors.~~	497
18.6 The termination of this Agreement shall be without	498
prejudice to all rights accrued due between the parties prior to	496
the date of termination.	500

19. Law and Arbitration	501
19.1 This Agreement and any non-contractual obligations	502
connected with it shall be governed by and construed in
accordance with English law. All disputes arising out of this Agreement and/or any non-contractual obligations connected with it shall be arbitrated in London in the following manner. One arbitrator is to be appointed by each of the parties hereto and a third by the two so chosen. Their decision or that of any two of them shall be final. The arbitrators shall be commercial persons, conversant with shipping matters. Such arbitration is to be conducted in accordance with the London Maritime	503

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Arbitration Association (LMAA) Terms current at the time when the arbitration proceedings are commenced and in accordance with the Arbitration Act 1996 or any statutory modification or re- enactment thereof. In the event that a party hereto shall state a dispute and designate an arbitrator in writing, the other party shall have 10 Business Days to designate its own arbitrator. If such other party fails to designate its own arbitrator within such period, the arbitrator appointed by the first party can render an award hereunder. Until such time as the arbitrators finally close the hearings, either party shall have the right by written notice served on the arbitrators and on the other party to specify further disputes or differences under this Agreement for hearing and determination. The arbitrators may grant any relief, and render an award, which they or a majority of them deem just and equitable and within the scope of this Agreement, including but not limited to the posting of security. Awards pursuant to this Clause 19.1 may include costs and judgments may be entered upon any award made herein in any court having jurisdiction. ~~and any dispute arising out of or~~
~~in connection with this Agreement shall be referred to arbitration~~	504
~~in London in accordance with the Arbitration Act 1996 or~~	505
~~any statutory modification or re-enactment thereof save to~~	506
~~the extent necessary to give effect to the provisions of this~~	507
~~Clause.~~	508
~~The arbitration shall be conducted in accordance with the~~	509
~~London Maritime Arbitrators Association (LMAA) Terms~~	510
~~current at the time when the arbitration proceedings are~~	511
~~commenced.~~	512
~~The reference shall be to three arbitrators. A party wishing~~	513
~~to refer a dispute to arbitration shall appoint its arbitrator~~	514
~~and send notice of such appointment in writing to the other~~	515
~~party requiring the other party to appoint its own arbitrator~~	516
~~within 14 calendar days of that notice and stating that it will~~	517
~~appoint its arbitrator as sole arbitrator unless the other party~~	518
~~appoints its own arbitrator and gives notice that it has done~~	519
~~so within the 14 days specified. If the other party does not~~	520
~~appoint its own arbitrator and give notice that it has done so~~	521
~~within the 14 days specified, the part referring a dispute to~~	522
~~arbitration may, without the requirement of any further prior~~	523
~~notice to the other party, appoint its arbitrator as sole~~	524
~~arbitrator and shall advise the other party accordingly. The~~	525
~~award of a sole arbitrator shall be binding on both parties~~	526
~~as if he had been appointed by agreement.~~	527
~~Nothing herein shall prevent the parties agreeing in writing~~	528
~~to vary these provisions to provide for the appointment of a~~	529
~~sole arbitrator.~~	530
~~In cases where neither the claim nor any counterclaim~~	531
~~exceeds the sum of USD50,000 (or such other sum as the~~	532
~~parties may agree) the arbitration shall be conducted in~~	533
~~accordance with the LMAA Small Claims Procedure current~~	534
~~at the time when the arbitration proceedings are commenced.~~	535
~~19.2~~ ~~This Agreement shall be governed by and construed~~	536
~~in accordance with Title 9 of the United States code and~~	537
~~the Maritime Law of the United States and any dispute~~	538
~~arising out of or in connection with this Agreement shall be~~	539

~~referred to three persons at New York, one to be appointed~~	540
~~by each of the parties hereto, and the third by the two so~~	541
~~chosen; their decision or that of any two of them shall be~~	542
~~final, and for the purposes of enforcing any award,~~	543
~~judgement may be entered on an award by any court of~~	544
~~competent jurisdiction. The proceedings shall be conducted~~	545
~~in accordance with the rules of the Society of Maritime~~	546
~~Arbitrators, Inc.~~	547
~~In cases where neither the claim nor any counterclaim~~	548
~~exceeds the sum of USD50,000 (or such other sum as the~~	549
~~parties may agree) the arbitration shall be conducted in~~	550
~~accordance with the Shortened Arbitration Procedure of the~~	551
~~Society of Maritime Arbitrators, Inc. current at the time when~~	552
~~the arbitration proceedings are commenced.~~	553
~~19.3~~ ~~This Agreement shall be governed by and construed~~	554
~~in accordance with the laws of the place mutually agreed by~~	555
~~the parties and any dispute arising out of or in connection~~	556
~~with this Agreement shall be referred to arbitration at a~~	557
~~mutually agreed place, subject to the procedures applicable~~	558
~~there.~~	559
19.4 If Box 18 in Part I is not appropriately filled in, sub-	560
clause 19.1 of this Clause shall apply.	561

Note: 19.1 , 19.2 and 19.3 are alternatives; indicate	562
alternative agree in Box 18 .	563

20. Notices	564
20.1 Any notice to be given by either party to the other	565
Party shall be in writing and may be sent by fax, ~~telex,~~	566
Registered or recorded mail or by personal service.	567
20.2 The address of the Parties for service of such	568
communication shall be as stated in Boxes 19 and 20 ,	569
respectively.	570

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APPENDIX II

FORM OF SUPERVISION AGREEMENT

THIS AGREEMENT is made the ____ day of , 20[ • ] BETWEEN:

(1)

[name of relevant Subsidiary], a company incorporated under the laws of [•], whose registered office is [ADDRESS] (the “ Owner ”); and

(2)

COSTAMARE SHIPPING COMPANY S.A., a company incorporated under the laws of Panama, whose registered office is at [ADDRESS] (the “ Construction Supervisor ”).

WHEREAS:

IT IS NOW AGREED as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1. Except as otherwise defined herein, all terms defined in the Shipbuilding Contract shall have the same respective meanings when used herein.

SECTION 1.2. In this Agreement, unless the context otherwise requires, the following expressions shall have the following meanings:

“ Business Day ” means a day, other than a Saturday or Sunday or a public holiday, on which major retail banks in Monaco, New York City and Athens Greece, and (in respect of any payments which are to be made to the Builder) [•], are open for non-automated customer services;

“ Framework Agreement ” means the agreement dated 2 November 2015 made between the Parent and the Construction Supervisor.

“ Owner’s Supplies ” means all of the items to be furnished to the Vessel by the Owner in accordance the relevant provisions of the Shipbuilding Contract.

“ Parent ” means Costamare Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and includes its successors in title.

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“ Spares ” means the items to be designated as spares by the parties hereto at the time of the delivery of the Vessel.

ARTICLE II

APPOINTMENT

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(b) to appoint a representative of the Construction Supervisor for the purposes specified under Article [•] of the Shipbuilding Contract;

(e) to attend and witness the trials of the Vessel to the extent this is possible under the terms of the Shipbuilding Contract;

(g) to sign on behalf of the Owner any protocols as to sea trials, consumable stores, delivery and acceptance or otherwise, having first ascertained with the Owner the appropriateness of so doing;

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SECTION 2.3. The Construction Supervisor shall discharge its responsibilities under this Clause 2 as the Owner’s agent.

ARTICLE III

CONSTRUCTION SUPERVISOR’S DUTIES
REGARDING CONSTRUCTION

SECTION 3.1. The Construction Supervisor undertakes with the Owner with respect to the Shipbuilding Contract:

(a) to notify the Owner in writing promptly on becoming aware of any likely change to any of the dates on which any installment under the Shipbuilding Contract is expected to be due;

(c) to (i) advise the Owner in writing, four (4) Business Days prior to the date on which the delivery installment under the Shipbuilding Contract is

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anticipated to become due, of the times and amounts of payments to be made to the Builder under the Shipbuilding Contract and any amount due to the Construction Supervisor for Owner’s Supplies not already settled and (ii) promptly confirm the same on the day on which such installment becomes due (and being the date the same is required to be paid to the account referred to in the relevant term of the Shipbuilding Contract);

(i) the Vessel has been duly completed and is ready for delivery to and acceptance by the Owner in or substantially in accordance with the Shipbuilding Contract and the Specifications and Plans;

(e) on receipt thereof from the Builder promptly to deliver the documents specified in Article [•], Paragraph [•] of the Shipbuilding Contract to the Owner or as the Owner may direct; and

(f) solely with the prior written approval of the Owner, to request from or agree with the Builder any material alterations, additions or modifications to the Vessel.

ARTICLE IV

CONSTRUCTION SUPERVISOR’S GENERAL OBLIGATIONS

(a) it will exercise commercially reasonable efforts to cause the due and punctual observance and performance of all conditions, duties and obligations

A-II- 5

imposed on the Owner by the Shipbuilding Contract (other than to pay the Contract Price) and will not without the prior written consent of the Owner:

(i) exercise any rights of the Owner to cancel, repudiate or rescind the Shipbuilding Contract;

(ii) waive, modify or suspend any provision of the Shipbuilding Contract if as a result of such waiver, modification or suspension the Owner will or may suffer any adverse consequences; and

ARTICLE V

LIABILITY AND INDEMNITY

SECTION 5.3. The Owner shall indemnify and hold harmless the Construction Supervisor Related Parties against all actions, proceedings, claims, demands

A-II- 6

or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of this Agreement and against and in respect of any loss, damage, delay or expense of whatsoever nature (including legal costs and expenses on a full indemnity basis), whether direct or indirect, incurred or suffered by any Construction Supervisor Related Party in the performance of this Agreement, unless incurred or suffered due to the gross negligence or willful misconduct of any Construction Supervisor Related Party.

SECTION 5.5. The provisions of this Article V shall survive any termination of this Agreement.

ARTICLE VI

FEES

(a)

US$393,702.50 on the execution of this Agreement; and

A-II- 7

(b)

US$393,702.50 upon the Construction Supervisor advising the Owner of the completion of the sea trial run of the Vessel.

ARTICLE VII

COMMENCEMENT - TERMINATION

SECTION 7.3. This Agreement shall terminate automatically if:

(a) the Shipbuilding Contract is cancelled, rescinded or terminated; or

(b) the Framework Agreement is terminated.

SECTION 7.4. The Construction Supervisor shall be entitled to terminate this Agreement by notice in writing to the Owner if:

(a) any moneys payable by the Owner under this Agreement is not paid when due or if due on demand within 10 Business Days following demand by the Construction Supervisor; or

(b) the Owner defaults in the performance of any other material obligations under this Agreement, subject to a cure right of 20 Business Days following written notice by the Construction Supervisor.

SECTION 7.5. Either party shall be entitled to terminate this Agreement immediately if:

(a) the other party ceases to conduct business, or all or substantially all of the equity-interests, properties or assets of either such party is sold, seized or appropriated; or

(b) (i) the other party files a petition under any bankruptcy law, makes an assignment for the benefit of its creditors, seeks relief under any law for the

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protection of debtors or adopts a plan of liquidation; (ii) a petition is filed against the other party seeking to have it declared insolvent or bankrupt and such petition is not dismissed or stayed within 40 Business Days of its filing; (iii) the other party shall admit in writing its insolvency or its inability to pay its debts as they mature; (iv) an order is made for the appointment of a liquidator, manager, receiver or trustee of the other party of all or a substantial part of its assets; (v) an encumbrancer takes possession of or a receiver or trustee is appointed over the whole or any part of the other party’s undertaking, property or assets; or (vi) an order is made or a resolution is passed for the other party’s winding up;

(c) a distress, execution, sequestration or other process is levied or enforced upon or sued out against the other party’s property which is not discharged within 20 Business Days;

(e) the other party is prevented from performing its obligations hereunder by reasons of Force Majeure for a period of two or more consecutive months.

ARTICLE VIII

EMPLOYEES

ARTICLE IX

GOVERNING LAW - ARBITRATION

SECTION 9.1. This Agreement and any non-contractual matters connected with it shall be governed by and be construed in accordance with the laws of England.

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SECTION 9.2. All disputes arising out of this Agreement shall be arbitrated in London in the following manner. One arbitrator is to be appointed by each of the parties hereto and a third by the two so chosen. Their decision or that of any two of them shall be final and, for the purpose of enforcing any award, this Agreement may be made a rule of the court. The arbitrators shall be commercial persons, conversant with shipping matters. Such arbitration is to be conducted in accordance with the rules of the London Maritime Arbitration Association terms current at the time when the arbitration proceedings are commenced and in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof.

ARTICLE X

COUNTERPARTS

SECTION 10.1. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.

ARTICLE XI

NOTICES

SECTION 11.1. Every notice or other communication under this Agreement shall:

A-II- 10

telex) in permanent written form, at the time of dispatch (provided that if the date of dispatch is a Saturday or Sunday or a public holiday in the country of the addressee or if the time of dispatch is after the close of business in the country of the addressee it shall be deemed to have been received at the opening of business on the next day which is not a Saturday or Sunday or public holiday); and

(c)	be sent to:

	(i)	the Construction Supervisor at:

		Costamare Shipping Company S.A. 60 Zephyrou Street & Syngrou Avenue

		Athens, Greece

		Facsimile No.: + 30 210 940 9051 Attention: Chief Executive Officer

	(ii)	the Owner at:

		c/o Costamare Inc. Guildo Pastor Center 7 rue de Gabian Monaco 98000

		Facsimile No.: to be advissed Attention: Gerant

or to such other address and/or numbers for a party as is notified by such party to the other party under this Agreement.

SECTION 11.2. Each communication and document made or delivered by one party to another pursuant to this Agreement shall be in the English language.

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IN WITNESS of which this Agreement has been duly executed the day and year first before written.

For the Owner

For the Construction Supervisor

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SCHEDULE 1

FORM OF CONSTRUCTION CERTIFICATE
[On the letterhead of the Construction Supervisor]

[Vessel Owner] (the “ Owner ”)
[Address]
Facsimile: [ ]
Attention: [ ]

Date:

Dear Sirs,

[Name of Builder] (the “ Builder ”), [Name of Vessel] (the “ Vessel ”)

We refer to the construction supervision agreement dated [ ] between the Owner and us (the “ Supervision Agreement ”).

Words and expressions defined in the Supervision Agreement (whether expressly or by incorporation by reference to another document) shall have the same meaning where used in this certificate.

We hereby certify, pursuant to Section 3.1(d) of the Supervision Agreement, as follows:

(1)

the Vessel has been duly completed and is ready for delivery to and acceptance by the Owner in or substantially in accordance with the Shipbuilding Contract and the Specifications and Plans; and

(ii)

the Vessel is recommended for classification by [Name of the classification society] (the “ Classification Society ”).

Yours faithfully,

for and on behalf of

COSTAMARE SHIPPING COMPANY S.A.

A-II- 13

Exhibit 4.12

THE COMPANIES SET OUT IN SCHEDULE A

- and -

COSTAMARE SHIPPING SERVICES LTD.

SERVICES AGREEMENT

TABLE OF CONTENTS

		Page

ARTICLE I	INTERPRETATION	1

ARTICLE II	APPOINTMENT	5

ARTICLE III	THE PARTY SUBSIDIARIES’ GENERAL OBLIGATIONS	7

ARTICLE IV	THE SERVICE PROVIDER’S GENERAL OBLIGATIONS	7

ARTICLE V	REPRESENTATION AND OTHER ADMINISTRATIVE SERVICES	9

ARTICLE VI	CREWING SERVICES	10

ARTICLE VII	BROKING AND OTHER COMMERCIAL SERVICES	11

ARTICLE VIII	SERVICEs FEES AND EXPENSES	13

ARTICLE IX	CORPORATE PLANNING AND EXPENSES	16

ARTICLE X	LIABILITY AND INDEMNITY	17

ARTICLE XI	RIGHTS OF THE MANAGER AND RESTRICTIONS ON THE MANAGER’S AUTHORITY	19

ARTICLE XII	TERMINATION OF THIS AGREEMENT	20

ARTICLE XIII	ADDITION AND RESIGNATION OF SUBSIDIARIES	23

ARTICLE XIV	NOTICES	23

ARTICLE XV	APPLICABLE LAW	24

ARTICLE XVI	ARBITRATION	24

ARTICLE XVII	MISCELLANEOUS	25

SCHEDULE A	SUBSIDIARIES	27

SCHEDULE B	FORM OF ACCESSION LETTER	30

SCHEDULE C	FORM OF RESIGNATION LETTER	31

THIS SERVICES AGREEMENT (this “ Agreement ”) is made on the 2nd day of November 2015, BY AND BETWEEN :

(1) THE COMPANIES SET OUT IN SCHEDULE A (the “ Original Party Subsidiaries ” and each an “ Original Party Subsidiary ”); and

(2) COSTAMARE SHIPPING SERVICES LTD., a company organized and existing under the laws of the Republic of the Marshall Islands (the “ Service Provider ”).

WHEREAS :

(A) Each Original Party Subsidiary owns one Container Vessel (as defined below) and is a wholly-owned Subsidiary of Costamare Inc., a Marshall Islands corporation (the “ Parent ”).

(B) The Service Provider has the benefit of experience in the representation of shipowning companies, the offering of charter broking, insurance broking and sale and purchase broking services and the offering of certain other services.

(C) Each Original Party Subsidiary and the Service Provider desire to adopt this Agreement pursuant to which the Service Provider shall represent each Original Party Subsidiary in its dealings with third parties and provide commercial, broking, administrative and certain other services to each such Original Party Subsidiary as specified herein.

NOW, THEREFORE, THE PARTIES HEREBY AGREE:

ARTICLE I

INTERPRETATION

SECTION 1.1. In this Agreement, unless the context otherwise requires:

“ Accession Letter ” means a letter substantially in the form set out in Schedule B.

“ Additional Party Subsidiary ” shall have the meaning set forth in Section 13.1.

“ Agreement ” shall have the meaning set forth in the preamble.

“ Annual Period ” shall have the meaning set forth in Section 8.4.

“ Applicable Fraction ” means, in relation to a Payment Date, a fraction having as numerator number 1 and as denominator a number equal to the number of the Party Subsidiaries as of such Payment Date.

“ Board of Directors ” means the board of directors of the Parent as the same may be constituted from time to time.

“ Business Days ” means a day (excluding Saturdays and Sundays) on which banks are open for business in Monaco, Athens, Greece, and New York, New York, USA.

“ Change in Control of the Service Provider ” means (a) a sale of all or substantially all of the assets or property of the Service Provider necessary for the performance of the Service Provider’s services under this Agreement, (b) a sale of the Service Provider’s shares that would result in Konstantakopoulos Entities Beneficially Owning, directly or indirectly, less than 50.1% of the total voting power of the outstanding voting securities of the Service Provider or (c) a merger, consolidation or similar transaction, that would result in Konstantakopoulos Entities Beneficially Owning, directly or indirectly, less than 50.1% of the total voting power of the outstanding voting securities of the resulting entity following such transaction.

“ Container Vessel ” means any ocean-going vessel (whether in its construction phase or operational) that is intended to be used primarily to transport containerized cargoes.

“ Effective Date ” means the date of this Agreement.

“ Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended.

“ Force Majeure ” shall have the meaning set forth in Section 10.1.

“ Initial Term ” shall have the meaning set forth in Section 12.1.

“ Konstantakopoulos Entities ” means:

(a)

Konstantinos Konstantakopoulos, Christos Konstantakopoulos, Achillefs Konstantakopoulos or Vassileios Konstantakopoulos;

(b)

any spouse or lineal descendant of any of the individuals set out in paragraph (a) above; and

(c)

any person Controlled by, or under common Control with, any such individual or combination of such individuals as set out in paragraphs (a) and (b) above.

“ Omnibus Agreement ” means that certain Omnibus Agreement, dated as of October 1, 2014, among ( inter alios ) the Parent, the Partnership and Costamare Partners Holdings LLC, as such agreement may be amended, supplemented or restated from time to time.

“ Partnership ” means Costamare Partners LP, a Marshall Islands limited partnership.

“ Partnership Group ” means, at any time, the Subsidiaries of the Partnership at such time and “member of the Partnership Group” shall be construed accordingly.

“ Party Subsidiaries ” means, at any time, the Original Party Subsidiaries and the Additional Party Subsidiaries, without reference to any of the Original Party Subsidiaries or Additional Party Subsidiaries that has ceased to be a Party Subsidiary in accordance with Section 13.2 and “ Party Subsidiary ” shall be construed accordingly.

“ Payment Date ” means the first Business Day falling immediately before each of 30 March, 30 June, 30 September and 30 December of each calendar year.

“ Registration Rights Agreement ” means the amended and restated registration rights agreement made or (as the context may require) to be made between the Parent and the stockholders named therein.

“ Related Service Provider ” means any Affiliate of a Konstantakopoulos Entity appointed as Sub-Provider in accordance with the terms of this Agreement.

“ Resignation Letter ” means a letter substantially in the form set out in Schedule C.

“ Resigning Party Subsidiary ” shall have meaning set forth in Section 13.2.

“ Service Provider ” shall have the meaning set forth in the preamble.

“ Service Provider Related Parties ” shall have the meaning set forth in Section 10.2.

“ Services ” shall have the meaning set forth in Section 2.2.

“ Services Fee ” shall have the meaning set forth in Section 8.1.

“ Sub-Provider ” shall have the meaning set forth in Section 2.3.

“ Subsequent Term ” shall have the meaning set forth in Section 12.1.

“ Subsidiary ” means a subsidiary within the meaning of section 1159 of the Companies Act 2006.

“ Vessel ” means any Container Vessel owned or operated by a Party Subsidiary and “ Vessels ” means together all or any of them.

“ V.Ships ” means V.Ships Greece Ltd, Par-La Ville Place 14, Par-La Ville Road, Hamilton HM08, Bermuda and includes its successors in title and permitted assignees.

SECTION 1.2. The headings of this Agreement are for ease of reference and do not limit or otherwise affect the meaning hereof.

SECTION 1.3. All the terms of this Agreement, whether so expressed or not, shall be binding upon the parties hereto and their respective successors and assigns.

SECTION 1.4. Unless otherwise specified, all references to money refer to the legal currency of the United States of America.

SECTION 1.5. Unless the context otherwise requires, words in the singular include the plural and vice versa.

SECTION 1.6. The words “include”, “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation” and shall not be construed to limit any general statement which it follows to the specific or similar items or matters immediately following it.

SECTION 1.7. Any reference to “person” includes an individual, body corporate, limited liability company, partnership, joint venture, cooperative, trust or unincorporated organization, association, trustee, domestic or foreign government or any agency or instrumentality thereof, or any other entity recognized by law.

SECTION 1.8. Any reference to an enactment shall be deemed to include reference to such enactment as re-enacted, amended or extended.

SECTION 1.9. Any reference to (or to any specified provision of) this Agreement or any other document shall be construed as reference to this Agreement, that provision or that document as in force for the time being and as amended in accordance with the terms thereof, or, as the case may be, with the agreement of the relevant parties.

SECTION 1.10. Any reference to clauses, appendices and schedules shall be construed as reference to clauses of, appendices to and schedules to this Agreement and references to this Agreement includes its appendices and schedules.

ARTICLE II

APPOINTMENT

SECTION 2.1. The Service Provider is hereby appointed by each Party Subsidiary as its:

(a) representative;

(b) crewing manager;

(d) chartering broker;

(e) marine insurance broker and advisor; and

(f) average adjuster advisor,

and hereby accepts such appointment on the terms and conditions of this Agreement.

SECTION 2.2. The Service Provider agrees to provide the services specified in Articles V, VI, VII of this Agreement (collectively the “ Services ”). The Party Subsidiaries and the Service Provider each hereby agree that in the performance of this Agreement, the Service Provider is acting solely on behalf of, as agent of and for the account of, the relevant Party Subsidiary. The Service Provider may advise persons with whom it deals on behalf of any Party Subsidiary that it is conducting such business for and on behalf of, such Party Subsidiary.

SECTION 2.3. The Service Provider may upon notice to the Party Subsidiaries appoint any person (a “ Sub-Provider ”) at any time throughout the duration of this Agreement to discharge any of the Service Provider’s duties under this Agreement, provided that if such person is not a Related Service Provider or V.Ships, the Service Provider shall obtain the written consent of the Party Subsidiaries prior to such appointment (such consent shall not be unreasonably withheld or delayed). The Service Provider shall appoint a Sub-Provider either by entering into an agreement (such agreement to be on terms to be agreed between the parties thereto and only in respect of such of the Services that the Service Provider wishes such Sub-Provider to discharge) directly with such Sub-Provider (for the avoidance of doubt, unless otherwise agreed in writing, no Party Subsidiary shall have any responsibility for any fees or costs incurred under any such agreement) or by directing such Sub-Provider to enter into an agreement directly with the relevant Party Subsidiary (such agreement to be on terms to be agreed between the parties thereto and only in respect of such of the Services that the Service Provider wishes such Sub-Provider to discharge). Upon request, each Party Subsidiary shall provide written confirmation to the Service Provider or, as the case may be, a Sub-Provider, that such Party Subsidiary and its Vessel are being provided certain Services by the Service Provider or, as the case may be, the relevant Sub-Provider.

SECTION 2.4. The Service Provider’s power to delegate performance of any provision of this Agreement, including delegation by directing a Sub-Provider to enter into an agreement directly with a Party Subsidiary in accordance with Section 2.3, shall not limit the Service Provider’s liability to the

Party Subsidiaries to perform this Agreement with the intention that the Service Provider shall remain responsible to the Party Subsidiaries for the due and timely performance of all duties and responsibilities of the Service Provider hereunder, PROVIDED HOWEVER , that to the extent that any Sub-Provider has performed any such duty, the Service Provider shall not be under any obligation to perform again the same duty.

ARTICLE III

THE PARTY SUBSIDIARIES’ GENERAL OBLIGATIONS

SECTION 3.1. The Party Subsidiaries shall notify the Service Provider as soon as possible of any purchase of any vessel (whether the same is a second-hand vessel or a Newbuild), the delivery of any Newbuild from the relevant builder or intermediate seller to the relevant Party Subsidiary, the sale of any Vessel, the purchase or creation of any direct or indirect subsidiary of the Parent or the sale or divestiture of any Party Subsidiary.

SECTION 3.2. The Party Subsidiaries shall promptly amend Schedule A to be reflective of any Resigning Party Subsidiary, Automatic Resigning Party Subsidiary or Additional Party Subsidiary PROVIDED HOWEVER that failure to do so shall not affect which Subsidiary of the Parent is actually a Party Subsidiary at any given time.

SECTION 3.3. The Party Subsidiaries shall pay punctually all sums due to the Service Provider under this Agreement in accordance with the terms hereof.

SECTION 3.4. Each Party Subsidiary shall procure that any Subsidiary of the Parent which owns or operates a Container Vessel shall become party to this Agreement. Each Party Subsidiary agrees that, save for any Konstantakopoulos Entities Affiliate, it has engaged the Service Provider or any Sub-Provider to provide the Services on an exclusive basis and, without receiving the prior written approval of the Service Provider or before it has lawfully terminated this Agreement in accordance with its terms, it will not engage any other entity to provide any of the Services (unless such engagement only becomes effective after the termination of this Agreement).

ARTICLE IV

THE SERVICE PROVIDER’S GENERAL OBLIGATIONS

SECTION 4.1. In the exercise of its duties hereunder, the Service Provider shall act in accordance with the reasonable policies, guidelines and instructions from time to time communicated to it in writing by any Party Subsidiary.

SECTION 4.2. For each Party Subsidiary or its Vessel or, as the case may be, Newbuild, the Service Provider shall act and do all and/or any of the acts or things described in this Agreement applicable to each such Party Subsidiary, Vessel or Newbuild in the name and/or on behalf of the relevant Party Subsidiary.

SECTION 4.3. The Service Provider shall exercise commercially reasonable care to cause all material property of any Party Subsidiary to be clearly identified as such, held separately from the property of the Service Provider and, where applicable, held in safe custody.

SECTION 4.4. The Service Provider shall exercise commercially reasonable care to cause adequate manpower to be employed by it to perform its obligations under this Agreement, PROVIDED HOWEVER , that the Service Provider, in the performance of its responsibilities under this Agreement, shall be entitled to have regard to its overall responsibilities in relation to the servicing of its clients and in particular, without prejudice to the generality of the foregoing, the Service Provider shall be entitled to allocate available resources and services in such manner as in the prevailing circumstances the Service Provider considers to be fair and reasonable.

SECTION 4.5. Notwithstanding anything to the contrary contained in this Agreement, the Service Provider agrees that any and all decisions of a material nature relating to any Party Subsidiary or its Vessel or Newbuild shall be reserved to such Party Subsidiary.

SECTION 4.6. During the term hereof, the Service Provider shall promote the business of the Party Subsidiaries in accordance with the directions of the authorized representative or, as the case may be, representatives of the respective Party Subsidiary and shall at all times use commercially reasonable efforts to conform to and comply with the lawful and reasonable directions, regulations or recommendations made by such authorized representative or, as the case may be, representatives, and in the absence of any specific directions or recommendations as aforesaid and, subject to the terms and conditions of this Agreement, shall provide general administrative and advisory services in connection with the business of the Party Subsidiary always to the extent permitted by the Service Provider’s constitutional documents and governmental licenses/authorizations.

SECTION 4.7. The Service Provider, in the performance of its responsibilities under this Agreement, shall exercise commercially reasonable care to cause any purchases of products or services from any of its Affiliates to be on terms no less favorable to the Service Provider than the market prices for products or services that the Service Provider could obtain on an arm’s length basis from unrelated parties.

SECTION 4.8. During the term hereof, the Service Provider agrees that it will provide the Services to the Party Subsidiaries on an exclusive basis and,

without receiving the prior consent of the Party Subsidiaries, it will not provide any Services or other services contemplated herein to any entity other than to members of the Partnership Group or Affiliates of the Konstantakopoulos Entities.

SECTION 4.9. If a Vessel (which expression for the purposes of this Section shall include any Newbuild to be acquired by a Party Subsidiary) and a Container Vessel directly or indirectly owned or operated by an unaffiliated third party are both available and meet the criteria for a charter being fixed by the Service Provider, the Vessel shall be offered such charter first and the relevant Party Subsidiary shall have 48 hours from such offer being received to accept such offer, failing which such charter shall be then offered to the relevant third party. If a Vessel and a Container Vessel directly or indirectly owned or operated by the Partnership are both available and meet the criteria for a charter being fixed by the Service Provider, the Container Vessel owned or operated by the Partnership shall be offered such charter first, provided that such Container Vessel shall be subject to the terms of the Omnibus Agreement, as applicable.

SECTION 4.10. The Service Provider shall at all times maintain appropriate and necessary accounts and records as regards the Services and shall make the same available for inspection and auditing by the Party Subsidiaries at such times as may be mutually agreed by the Service Provider, on the one hand, and the Party Subsidiaries, on the other hand.

ARTICLE V

REPRESENTATION AND OTHER ADMINISTRATIVE SERVICES

SECTION 5.1. The Service Provider shall provide certain representation and other administrative services to the Party Subsidiaries (in the case of paragraphs (a)(i), (ii), (vi) and (vii), (b), (c) and (d) upon request by the relevant Party Subsidiary), including the following:

(a) representing each Party Subsidiary generally in its dealings and relations with third parties, including:

(i) keeping all books and records of things done and transactions performed on behalf of any such Party Subsidiary as it may require from time to time, including, but not limited to, liaising with accountants, lawyers and other professional advisors;

(ii) maintaining the general ledgers of any such Party Subsidiary;

(iii) establishing bank accounts with such financial institutions as a Party Subsidiary may request, managing, administering and reconciling of such Party Subsidiary’s bank accounts;

(iv) providing assistance in negotiating loan and credit terms with lenders and monitoring and administration of compliance with any applicable financing terms and conditions in effect with investors, banks or other financial institutions;

(v) assisting with arranging board meetings of each such Party Subsidiary, director accommodation and travel for such board meetings and preparing meeting materials and detailed papers and agendas for scheduled meetings of the board of directors of any Party Subsidiary (and any and all committees thereof) that, where applicable, contain such information as is reasonably available to the Service Provider to enable the relevant board of directors (and any such committees) to base their opinion;

(vi) preparation of periodic consolidated financial statements of the Party Subsidiaries, including, but not limited to, those required for governmental and regulatory or self-regulatory agency filings and reports to shareholders, arranging of the auditing and/or review of any such financial statements and the provision of related data processing services;

(vii) preparing and providing (or procuring, at the relevant Party Subsidiary’s cost, a third party service provider to prepare and provide) tax returns required by any law or regulatory authority;

(b) arranging for the provision of advisory services (either directly or, at the relevant Party Subsidiary’s cost, through a third party service provider) to ensure that such Party Subsidiary is in compliance with all applicable laws, including all relevant securities laws;

(c) assisting the Party Subsidiaries in establishing and maintaining a system of internal controls sufficient to satisfy any applicable law or regulatory requirements; and

(d) negotiating the terms and thereafter arranging for cash management services, in each case with a third party provider at the cost of such Party Subsidiary.

ARTICLE VI

CREWING SERVICES

SECTION 6.1. The Service Provider shall, upon the request of a Party Subsidiary, provide to such Party Subsidiary one or more of the following crewing services:

(i) selecting and engaging the crew of a Vessel;

(ii) arranging for the execution of appropriate employment contract for such crew between the relevant crew members and the relevant Party Subsidiary, always in accordance with the applicable provisions of law;

(iii) arranging for the transportation of such crew, including repatriation, board and lodging as and when required at rates and type of accommodation as customary in the industry;

(iv) handling all payroll arrangements, pension administration, hospital expenses, transportation and repatriation expenses, and insurances for such crew; and

(v) handling any labour accident or sickness of any crew member of a Vessel, including any hospital or other medical expenses and/or doctor fees, injury compensation etc.

ARTICLE VII

BROKING AND OTHER COMMERCIAL SERVICES

SECTION 7.1. The Service Provider shall provide to the Party Subsidiaries, upon request by the relevant Party Subsidiary, one or more of the following broking and other commercial services:

(a) providing charter broking and other chartering services and all matters related thereto, including seeking and negotiating employment for each Vessel and the conclusion (including the execution thereof) of charter parties or other contracts relating to the employment of such Vessel, whether on a voyage, time, demise, contract of affreightment or other basis (if such contract exceeds a period of 36 months, consent in writing shall first be obtained from the relevant Party Subsidiary);

(b) arranging of the proper payment to the relevant Party Subsidiary or its nominees of all hire and/or freight revenues or other moneys of whatsoever nature to which such Party Subsidiary ay be entitled arising out of the employment or otherwise in connection with the relevant Vessel;

(c) providing voyage estimates and accounts and calculating of hire, freights, demurrage and/or dispatch moneys due from or due to the charterers of a Vessel;

(d) issuing to the crew of a Vessel appropriate voyage instructions and monitoring voyage performance;

(e) appointing agents in an port of the world, handling payments to such agents and auditing the expenses thereof;

(f) carrying out the necessary communications with the shippers, charterers and other involved with the receiving and handling of a Vessel at the relevant loading and discharging ports;

(g) invoicing on behalf of the relevant Party Subsidiary all freights, hires, demurrage, outgoing claims, refund of taxes, balances of disbursements, statements of account and other sums due to a Party Subsidiary and account receivables arising from the operation of a Vessel and, upon the request of the relevant Party Subsidiary, issuing releases on behalf of such Party Subsidiary upon receipt of payment or settlement of any such amounts;

(h) preparing off-hire statements and/or hire statements;

(i) providing marine insurance broking and advisory services and all matters related thereto, including seeking and negotiating insurance cover for each Vessel, the conclusion (including the execution thereof) of the relevant insurance contacts or entries for such Vessel, and the payment of the relevant insurance premiums or P&I calls (either directly or by employing the services (at the relevant Party Subsidiary’s cost) of a third party broker);

(j) providing ship sale and purchase broking services and all matters related thereto, including the seeking and the negotiation of any sale and purchase agreement of a Vessel (whether a second-hand or Newbuild), the supervision of such sale or purchase and the performance of any sale or purchase agreement (either directly or by employing the services (at the relevant Party Subsidiary’s cost) of a third party broker);

(k) providing newbuilding, conversion and shiprepair broking services and all matters related thereto (either directly or by employing the services (at the relevant Party Subsidiary’s cost) of a third party broker);

(l) providing average adjusting services and all matters related thereto in relation to a Vessel; and

(m) managing relationships between any Party Subsidiary and any existing or potential charterers, shipbuilders, shiprepair

yards, insurers, lenders, shipmanagers, manning agents and other shipping industry service providers/participants.

ARTICLE VIII

SERVICEs FEES AND EXPENSES

SECTION 8.1. In consideration of the Service Provider providing the Services to each Party Subsidiary, each such Party Subsidiary shall pay the Service Provider the following fees (together, the “ Services Fees ” and, on a per Party Subsidiary/Vessel basis, the “ Service Fee ”):

(a) monthly in arrears, a fee in United States Dollars equal to 0.60% calculated on the aggregate of the gross freight, demurrage, charter hire, ballast bonus or other income obtained for the employment of the Vessel of the relevant Party Subsidiary during the term hereof, payable to the Service Provider, only to the extent such freight, demurrage, charter hire, ballast bonus or other income, as the case may be, is received as revenue; and

(b) on each Payment Date falling after the date of this Agreement a fee equal to the Applicable Fraction of US$625,000 payable in cash; and

(c) on each Payment Date falling after the date of this Agreement, a fee in United States Dollars (the “ Relevant Fee ”) equal to the Applicable Fraction of:

A x B

PROVIDED HOWEVER , that the Service Provider has the right to request in writing (the “ Share Request ”) to receive from each Party Subsidiary instead of the Relevant Fee payable by such Party Subsidiary for such Payment Date, a number of common stock of the Parent equal to the Applicable Fraction of B for such Payment Date. Upon receipt of a Share Request by a Party Subsidiary, such Party Subsidiary shall pay the appropriate Relevant Fee to the Parent and shall procure that the Parent shall as soon as possible (i) deliver the relevant common stock to the Service Provider, (ii) advise the Transfer Agent accordingly and (ii) deliver to the Service Provider a duly executed Registration Rights Agreement providing for the transferability of such common stock to any of the Konstantakopoulos’ Entities PROVIDED HOWEVER FURTHER that Service Provider is aware and acknowledges that there are limitations and restrictions on the circumstances under which it may offer to sell, transfer or otherwise dispose of the

common stock to be acquired by it including certain restrictions on transfer under the applicable securities laws.

SECTION 8.2. For the purposes of Section 8.1, the following terms shall have the following meanings:

“A” is, in relation to a Payment Date, the average of the closing price of the common stock of the Parent on the New York Stock Exchange for the ten trading days ending on such Payment Date.

“B” is Y x 0.2%.

“Y” is, in relation to a Payment Date, the number of validly issued, fully paid and non-assessable shares of the common stock of the Parent outstanding as of 1 January 2015, as such number may be increased by a stock split or, as the case may be, may be reduced by a reverse stock split of the Parent’s common stock as of such Payment Date. For the avoidance of doubt, there were 74,800,000 shares of issued and outstanding common stock of the Parent as of January 1, 2015.

SECTION 8.3. The Services Fees will be fixed throughout the term of this Agreement and shall not be subject to adjustment for Euro/U.S. Dollar exchange rate fluctuations or inflation, save that the Service Fee for each Vessel payable pursuant to Section 8.1(b) may be adjusted pursuant to Section 8.4.

SECTION 8.4. The Services Fees payable pursuant to Section 8.1(b), for the 12-month period starting on January 1, 2016 and for each subsequent 12-month period falling thereafter (each such 12-month period referred to hereinafter as an “ Annual Period ”) will, in each case, be adjusted upwards with effect from the beginning of such Annual Period if:

(a) the average of the Euro/U.S. Dollar exchange rates during the 12-month period ending on the last day of the month of September falling before the commencement date of such Annual Period (such average being the average over the applicable period, as calculated by the Service Provider from the Euro Foreign Exchange Reference Rate published daily at 15:00 CET by the European Central Bank on www.ecb.int) evidence that the Euro has strengthened against the U.S. Dollar by more than five per cent (5%) from:

(i) in the case of the first Annual Period starting on the day falling immediately after 31 December 2015, the rate existing on the business day immediately prior to the date of this Agreement, and

(ii) in the case of each subsequent Annual Period, the previous Euro/U.S. Dollar average calculated for the purposes of this Section 8.4 in respect of the immediately previous Annual Period,

by the average percentage amount by which the Euro has in each such case so strengthened against the U.S. Dollar; and/or

(b) the Service Provider has incurred a material unforeseen increase in the cost of providing the Services, by an amount to be agreed between the Service Provider and the Party Subsidiaries, each acting in a commercially reasonable manner.

SECTION 8.5. The Service Provider shall, subject to Section 8.6, pay for all usual office expenses incurred by it as the Service Provider.

SECTION 8.6. Each Party Subsidiary hereby acknowledges that any capital expenditure, financial costs, operating expenses for its Vessel and any general and administrative expenses of such Party Subsidiary whatsoever are not covered by the Service Fee and any such expenditure, costs and expenses shall be paid fully by the relevant Party Subsidiary, whether directly to third parties (which for the avoidance of doubt shall include any Sub-Provider) or by payment to such third parties through the Service Provider and to the extent incurred by the Service Provider, shall be reimbursed to it by such Party Subsidiary. The said capital expenditure, financial costs, operating expenses for each Party Subsidiary and its Vessel and general and administrative expenses of each Party Subsidiary include, without limiting the generality of the foregoing, items such as:

(a) fees, interest, principal and any other costs due to a Party Subsidiary’s financiers and their respective advisors;

(b) all voyage expenses and vessel operating and maintenance expenses relating to the operation and management of a Vessel (including crew costs, surveyor’s attendance fees, bunkers, lubricant oils, spares, survey fees, classification society fees, maintenance and repair costs, vetting expenses, etc.);

(c) any commissions, fees, remuneration or disbursements due to lawyers, brokers, agents, surveyors, consultants, financial advisors, investment bankers, insurance advisors or any other third parties whatsoever appointed by the Service Provider whether in its name or on behalf and/or in the name of any Party Subsidiary;

and reasonable course of meeting the Service Provider’s duties and obligations under this Agreement including the duties provided in Articles V, VI and VII of this Agreement;

(e) applicable deductibles, insurance premiums and/or P&I calls;

(f) compensation expenses for employees other than of the Service Provider;

(g) postage, communication, traveling, lodging, victualling, overtime, out of office compensation and out of pocket expenses of the Service Provider and/or its personnel, incurred in pursuance of the Services; and

(h) any other out of pocket expenses that are incurred by the Service Provider in the performance of the Services pursuant to this Agreement.

SECTION 8.7. The Service Provider shall have the right to demand the Service Fee payable in relation to each Party Subsidiary and its Vessel from either all the Party Subsidiaries or such Party Subsidiary. By written notice to the Party Subsidiaries, the Service Provider may direct the Party Subsidiaries to pay any amounts owing by the Service Provider to any Sub-Provider pursuant to a subcontract of any provisions of this Agreement, directly to the relevant Sub-Provider.

SECTION 8.8. In the event that this Agreement is terminated, other than by reason of default by the Service Provider, the Services Fees payable to the Service Provider under Section 8.1 shall be payable for a further period of three months from the termination date. The fees payable for the said three months shall be paid in one lump sum in advance on the termination of this Agreement.

ARTICLE IX

CORPORATE PLANNING AND EXPENSES

SECTION 9.1. The Service Provider shall maintain the records of all costs and expenses incurred, including any invoices, receipts and supplementary materials as are necessary or proper for the settlement of accounts.

SECTION 9.2. Insofar as any moneys are collected from third parties by the Service Provider under the terms of this Agreement (other than moneys payable by a Party Subsidiary to the Service Provider), such moneys and any interest thereon shall be held to the credit of the relevant Party Subsidiary in a separate bank account in the name thereof. Interest on any such bank account shall be for the benefit of the relevant Party Subsidiary.

SECTION 9.3. Notwithstanding anything contained herein to the contrary, the Service Provider shall in no circumstances be required to use or commit its own funds to finance the provision of the Services.

SECTION 9.4. To the extent that a Related Service Provider has been appointed in accordance with the terms of Section 2.3, it is agreed by the Party Subsidiaries and the Service Provider for the benefit of such Related Service Provider that the provisions of Article VIII shall apply to such Related Service Provider as if such provisions were repeated herein, but with references to:

(a) the “Service Provider” being deemed as references to the relevant Related Service Provider;

(b) the “Services” being deemed as references to the services to be performed by such Related Service Provider under the relevant services agreement;

(c) the “Vessels” being deemed as references to the Vessels being services by such Related Service Provider under a services agreement entered into directly with the relevant Party Subsidiaries;

(d) the “Party Subsidiaries” being deemed as references to the relevant Party Subsidiaries; and

(e) references to “this Agreement” being deemed as references to any services agreement signed by such Related Service Provider directly with the relevant Party Subsidiaries.

ARTICLE X

LIABILITY AND INDEMNITY

SECTION 10.1. Save for the obligation of the Party Subsidiaries to pay any moneys or common stock due to the Service Provider hereunder, neither any Party Subsidiary nor the Service Provider shall be under any liability to the other for any failure to perform any of their obligations hereunder by reason of Force Majeure. “ Force Majeure ” shall mean any cause whatsoever of any nature or kind beyond the reasonable control of the relevant Party Subsidiary or the Service Provider, including, without limitation, acts of God, acts of civil or military authorities, acts of war or public enemy, acts of any court, regulatory agency or administrative body having jurisdiction, insurrections, riots, strikes or other labor disturbances, embargoes or other causes of a similar nature.

SECTION 10.2. The Service Provider, including its officers, directors, employees, shareholders, agents, sub-contractors and any Sub-Provider (the “ Service Provider Related Parties ”) shall be under no liability whatsoever to

any Party Subsidiary or to any third party (including the crew of a Vessel) for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect (including but not limited to loss of profit arising out of or in connection with detention of or delay to a Vessel), and howsoever arising in the course of the performance of this Agreement, unless and to the extent that the same is proved to have resulted solely from the gross negligence or willful misconduct of the Service Provider, its officers, employees, agents, sub-contractors or any Sub-Provider.

SECTION 10.3. Notwithstanding anything that may appear to the contrary in this Agreement, the Service Provider shall not be liable for any of the actions of the crew of a Vessel, even if such actions are negligent, grossly negligent or willful, except only to the extent that they are shown to have resulted from a failure by the Service Provider to discharge its obligations under Article VI, in which case the Service Provider’s liability shall be limited in accordance with the terms of this Article X.

SECTION 10.4. The Party Subsidiaries shall indemnify and hold harmless the Service Provider Related Parties against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of this Agreement and against and in respect of any loss, damage, delay or expense of whatsoever nature (including legal costs and expenses on a full indemnity basis), whether direct or indirect, incurred or suffered by any Service Provider Related Party arising out of or in connection with the performance of this Agreement, unless incurred or suffered due to the gross negligence or willful misconduct of any Service Provider Related Party.

SECTION 10.5. It is hereby expressly agreed that no employee or agent of the Service Provider (including any sub-contractor from time to time employed by the Service Provider) shall in any circumstances whatsoever be under any liability whatsoever to any Party Subsidiary or any third party for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in connection with his employment or agency and, without prejudice to the generality of the foregoing provisions in this Article X, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defense and immunity of whatsoever nature applicable to the Service Provider or to which the Service Provider is entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Service Provider acting as aforesaid, and for the purpose of all the foregoing provisions of this Article X, the Service Provider is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be the Service Provider’s servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement. Nothing in this Section 10.5 shall be construed so as to further limit any liability the Service Provider may have to the Party Subsidiaries under Section 10.2.

SECTION 10.6. The provisions of this Article X shall survive any termination of this Agreement.

ARTICLE XI

RIGHTS OF THE MANAGER AND RESTRICTIONS ON THE MANAGER’S AUTHORITY

SECTION 11.1. Except as may be provided in this Agreement or in any separate written agreement between any Party Subsidiary and the Service Provider or a Sub-Provider, the Service Provider and any Sub-Provider shall be an independent contractor and not the agent of any Party Subsidiary and shall have no right or authority to incur any obligation on behalf of any Party Subsidiary or to bind any Party Subsidiary in any way whatsoever. Nothing in this Agreement shall be deemed to make the Service Provider or any Sub-Provider or any of their subsidiaries or employees an employee, joint venturer or partner of any Party Subsidiary.

SECTION 11.2. Each Party Subsidiary acknowledges that the Service Provider or, as the case may be, any Sub-Provider shall have no responsibility hereunder, direct or indirect, with regard to the formulation of the business plans, policies, management or strategies (financial, tax, legal or otherwise) of any Party Subsidiary, which is solely the responsibility of each respective Party Subsidiary. Each Party Subsidiary shall set its corporate policies independently through its respective board of directors and executive officers and nothing contained herein shall be construed to relieve such directors or officers of each respective Party Subsidiary from the performance of their duties or to limit the exercise of their powers.

SECTION 11.3. Notwithstanding the other provisions of this Agreement:

(a) the Service Provider or, as the case may be, any Sub-Provider may act with respect to a Party Subsidiary upon any advice, resolutions, requests, instructions, recommendations, direction or information obtained from such Party Subsidiary or any banker, accountant, broker, lawyer or other person acting as agent of or adviser to such Party Subsidiary and the Service Provider or, as the case may be, the relevant Sub-Provider shall incur no liability to such Party Subsidiary for anything done or omitted or suffered in good faith in reliance upon such advice, instruction, resolution, recommendation, direction or information made or given by such Party Subsidiary or its agents, in the absence of gross negligence or willful misconduct by the Service Provider or, as the case may be, the relevant Sub-Provider or their respective servants, and shall not be responsible for any misconduct, mistake, oversight, error of judgment, neglect, default,

omission, forgetfulness or want of prudence on the part of any such banker, accountant, broker, lawyer, agent or adviser or other person as aforesaid;

(b) the Service Provider or, as the case may be, a Sub-Provider shall not be under any obligation to carry out any request, resolution, instruction, direction or recommendation of any Party Subsidiary or its agents if the performance thereof is or would be illegal or unlawful; and

(c) the Service Provider or, as the case may be, the relevant Sub-Provider shall incur no liability to any Party Subsidiary for doing or failing to do any act or thing which it shall be required to do or perform or forebear from doing or performing by reason of any provision of any law or any regulation or resolution made pursuant thereto or any decision, order or judgment of any court or any lawful request, announcement or similar action of any person or body exercising or purporting to exercise the legitimate authority of any government or of any central or local governmental institution in each case where the above entity has jurisdiction.

ARTICLE XII

TERMINATION OF THIS AGREEMENT

SECTION 12.1. This Agreement shall be effective as of the Effective Date and, subject to Sections 12.2, 12.3, 12.4 and 12.5, shall continue until December 31, 2015 (the “ Initial Term ”). Thereafter the term of this Agreement shall be extended on a year-to-year basis for up to ten times (each a “ Subsequent Term ”) unless the Party Subsidiaries, at least 12 months prior to the end of the then current term, give written notice to the Service Provider that they wish to terminate this Agreement at the end of the then current term. In no event will the term of this Agreement extend beyond the date falling ten years after the last day of the Initial Term.

SECTION 12.2. The Party Subsidiaries shall be entitled to terminate this Agreement by notice in writing to the Service Provider if:

(a) the Service Provider defaults in the performance of any material obligation under this Agreement, subject to a cure right of 20 Business Days following written notice by the Party Subsidiaries;

(b) any moneys due and payable to the Party Subsidiaries or third parties by the Service Provider under this Agreement is not paid or accounted for within 10 Business Days following written notice by the Party Subsidiaries;

(d) the Service Provider is convicted of, enters a plea of guilty or nolo contendere with respect to, or enters into a plea bargain or settlement admitting guilt for a crime (including, for the avoidance of doubt, fraud), which conviction, plea bargain or settlement is demonstrably and materially injurious to the Party Subsidiaries, PROVIDED ALWAYS , such crime is not a misdemeanor and PROVIDED ALWAYS further that such crime has been committed solely and directly by an officer or director of the Service Provider acting within the terms of his or her employment or office.

SECTION 12.3. The Service Provider shall be entitled to terminate this Agreement by notice in writing to the Party Subsidiaries if:

(a) any moneys payable by the Party Subsidiaries under this Agreement is not paid when due or if due on demand within 20 Business Days following demand by the Service Provider;

(b) the Party Subsidiaries defaults in the performance of any other material obligations under this Agreement, subject to a cure right of 20 Business Days following written notice by the Service Provider; or

SECTION 12.4. Either party shall be entitled to terminate this Agreement by notice in writing to the other party if:

appointed over the whole or a substantial part of the other party’s undertaking, property or assets; or (vi) if an order is made or a resolution is passed for the other party’s winding up; OR

(c) the other party is prevented from performing its obligations hereunder, in any material respect, by reasons of Force Majeure for a period of two or more consecutive months.

SECTION 12.5. Upon the effective date of termination pursuant to this Article XII, the Service Provider shall promptly terminate its services hereunder, after taking reasonable commercial steps to minimize any interruption to the business of the Party Subsidiaries.

SECTION 12.6. Upon termination, the Service Provider shall, as promptly as possible, submit a final accounting of funds received and disbursed under this Agreement and of any remaining Service Fee and/or any other funds due from any Party Subsidiary, calculated pro rata to the date of termination, and any non-disbursed funds of any Party Subsidiary in the Service Provider’s possession or control will be paid by the Service Provider as directed by such Party Subsidiary promptly upon the Service Provider’s receipt of all sums then due to it under this Agreement, if any.

SECTION 12.7. Upon termination of this Agreement, the Service Provider shall release to the Party Subsidiaries the originals where possible, or otherwise certified copies, of all such accounts and all documents specifically relating to a Party Subsidiary or its Vessel or the provision of the Services.

SECTION 12.8. Upon termination of this Agreement either by the Service Provider for any reason (other than pursuant to Section 12.4(c)) or by the Party Subsidiaries pursuant to Section 12.1, the Party Subsidiaries shall be liable to pay to the Service Provider as liquidated damages an amount in U.S. Dollars equal to the lesser of (a) ten times and (b) the number of full years remaining prior to the date falling ten years after the last day of the Initial Term times, in each case, the aggregate fees due and payable to the Service Provider under the terms of this Agreement during the 12-month period ending on the date of termination of this Agreement, PROVIDED ALWAYS, that the amount of liquidated damages payable thereunder shall never be less than two times the aggregate fees due and payable to the Service Provider under the terms of this Agreement during the 12-month period ending on the date of termination of this Agreement.

SECTION 12.9. The provisions of this Article XII shall survive any termination of this Agreement.

ARTICLE XIII

ADDITION AND RESIGNATION OF SUBSIDIARIES

SECTION 13.1. Any Subsidiary of the Parent owning or operating a Container Vessel or having contracted a Newbuild and not already a Party Subsidiary, shall request it becomes a party to this Agreement (the “ Additional Party Subsidiary ”) as soon as possible after becoming the owner or operator of such Vessel or, as the case may be, contracting such Newbuild. The Additional Party Subsidiary shall become a party to this Agreement upon it and the Service Provider both executing a duly completed Accession Letter.

SECTION 13.2. Any Party Subsidiary may request that it ceases to be a party to this Agreement (the “ Resigning Party Subsidiary ”) by delivering to the Service Provider a duly completed and executed Resignation Letter. The Resigning Party Subsidiary shall cease to be a Party Subsidiary and shall have no further rights or obligations under this Agreement upon the Service Provider accepting such Resignation Letter by counter-signing the same.

SECTION 13.3. Unless the parties hereto agree otherwise, any Party Subsidiary whose Vessel (including any Newbuild) is sold or becomes a total loss or of whose newbuilding contract is terminated or cancelled (the “ Automatic Resigning Party Subsidiary ”), shall be deemed to have resigned from this Agreement as of the date of such sale, loss, termination or cancellation without the need for any Resignation Letter to be delivered in accordance with Section 13.2, upon which the Automatic Resigning Party Subsidiary shall cease to be a Party Subsidiary and shall have no further rights or obligations under this Agreement (unless the parties hereto have agreed otherwise in writing).

ARTICLE XIV

NOTICES

(a) in relation to a Party Subsidiary, at:

c/o Costamare Inc.
Guildo Pastor Center,
7 rue du Gabian
98000 Monaco

Telefax: to be advised

Attention: Gerant

(b) in relation to the Service Provider at:

Costamare Shipping Services Ltd.
60 Zephyrou Street & Syngrou Avenue,
Palaio Faliro, Athens, Greece

Telefax: +30 210 9409081
Attention: General Manager

ARTICLE XV

APPLICABLE LAW

SECTION 15.1. This Agreement and any non-contractual obligations connected with it shall be governed by, and construed in accordance with, the laws of England.

SECTION 15.2. Except for Sections 2.2, 8.6 and 8.7 and Articles X and XI which can be relied on by a Sub-Provider (other than V.Ships) and Sections 2.2, 8.6, 8.7 and 9.4 and Articles X and XI which can be relied on by a Related Service Provider, no other term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.

ARTICLE XVI

ARBITRATION

SECTION 16.1. All disputes arising out of this Agreement and/or any non-contractual obligations connected with it shall be arbitrated in London in the following manner. One arbitrator is to be appointed by each of the Service Provider and the Party Subsidiaries (acting as one) and a third by the two so chosen. Their decision or that of any two of them shall be final. The arbitrators shall be commercial persons, conversant with shipping matters. Such arbitration is to be conducted in accordance with the London Maritime Arbitration Association (LMAA) Terms current at the time when the arbitration proceedings are commenced and in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof.

ARTICLE XVII

MISCELLANEOUS

SECTION 17.2. During the term hereof, the Service Provider will not provide services hereunder through, or otherwise cause any Party Subsidiary to have, an office or fixed place of business in the United States.

SECTION 17.3. This Agreement may be executed in one or more written counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

[ Remainder of page intentionally left blank ]

IN WITNESS WHEREOF the undersigned have executed this Agreement as of the date first above written.

	EACH OF THE SUBSIDIARIES SET OUT IN SCHEDULE A

	by:
		/s/ Konstantinos V. Konstatnakopoulos
		Name: Konstantinos V. Konstatnakopoulos Title: Chief Executive Officer

	COSTAMARE SHIPPING SERVICES LTD.

	by:
		/s/ Diamantis Manos
		Name: Diamantis Manos Title: President

[ Signature page to the Services Agreement ]

SCHEDULE A

SUBSIDIARIES

1.	Achilleas Maritime Corporation

2.	Adele Shipping Co.

3.	Alexia Transport Corp.

4.	Angistri Corporation

5.	Bastian Shipping Co.

6.	Bullow Investments Inc.

7.	Cadence Shipping Co.

8.	Cagney Shipping Co.

9.	Capetanissa Maritime Corporation

10.	Caravokyra Maritime Corporation

11.	Christos Maritime Corporation

12.	Costachille Maritime Corporation

13.	Costis Maritime Corporation

14.	Dino Shipping Co.

15.	Edith Shipping Co.

16.	Fanakos Maritime Corporation

17.	Fastsailing Maritime Co.

18.	Fay Shipping Co.

19.	Finch Shipping Co.

20.	Flow Shipping Co.

21.	Haley Shipping Co.

22.	Idris Shipping Co.

23.	Jodie Shipping Co.

24.	Joyner Carriers S.A.

25.	Kalamata Shipping Corporation

26.	Kayley Shipping Co.

27.	Kelsen Shipping Co.

28.	Lang Shipping Co.

29.	Leroy Shipping Co.

30.	Lindner Shipping Co.

31.	Madelia Shipping Co.

32.	Mansel Shipping Co.

33.	Marathos Shipping Co.

34.	Marina Maritime Corporation

35.	Mas Shipping Co.

36.	Merten Shipping Co.

37.	Miko Shipping Co.

38.	Montes Shipping Co.

39.	Navarino Maritime Corporation

40.	Nicky Shipping Co.

41.	Odette Shipping Co.

42.	Percy Shipping Co.

43.	Quentin Shipping Co.

44.	Raymond Shipping Co.

45.	Rena Maritime Corporation

46.	Sander Shipping Co.

47.	Takoulis Maritime Corporation

48.	Timpson Shipping Co.

49.	Terance Shipping Co.

50.	Undine Shipping Co.

51.	Uriza Shipping Co.

52.	Valli Shipping Co.

53.	Virna Shipping Co.

54.	Walso Shipping Co.

55.	Speedy Shipping Co.

SCHEDULE B

FORM OF ACCESSION LETTER

To:	COSTAMARE SHIPPING SERVICES LTD.

From:	[additional Party Subsidiary ]

Dated:

Dear Sirs,

Services Agreement dated [ ] (the “Agreement”)

1	We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession Letter.

2	[ Subsidiary ] agrees to become an Additional Party Subsidiary and to be bound by the terms of the Agreement as an Additional Party Subsidiary pursuant to Section 13.1 of the Agreement. [ Subsidiary ] is a company duly incorporated under the laws of [ name of relevant jurisdiction ].

3	This Accession Letter and any non-contractual obligations arising out of or in connection with it are governed by and shall be construed in accordance with English law.

4	This Accession Letter is entered into by deed.

COSTAMARE SHIPPING SERVICES LTD.

[Subsidiary]

SCHEDULE C

FORM OF RESIGNATION LETTER

To:	COSTAMARE SHIPPING SERVICES LTD.

From:	[ resigning Party Subsidiary ]

Dated:

Dear Sirs,

Services Agreement dated [ ] (the “Agreement”)

1	We refer to the Agreement. This is a Resignation Letter. Terms defined in the Agreement have the same meaning in this Resignation Letter unless given a different meaning in this Resignation Letter.

2	Pursuant to Section 13.2 of the Agreement, we request that [ resigning Party Subsidiary ] be released from its obligations as a Party Subsidiary under the Agreement.

3	This Resignation Letter and any non-contractual obligations arising out of or in connection with are governed by and shall be construed in accordance with English law.

[Subsidiary]



By:

I hereby acknowledge receipt of this Resignation Letter and accept the request set out in clause 2 hereof.

COSTAMARE SHIPPING SERVICES LTD.



By:

Exhibit 4.13

AGREEMENT RELATING TO FRAMEWORK AGREEMENT AND SHIPMANAGEMENT AGREEMENTS

THIS AGREEMENT is dated on 2 November 2015 and made BETWEEN :

(1)

COSTAMARE SHIPPING COMPANY S.A. , a corporation incorporated and existing under the laws of the Republic of Panama, with its registered office at Panama City, Panama (the Manager ); and

(2)

COSTAMARE INC. , a corporation incorporated and existing under the laws of the Republic of the Marshall Islands with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the Parent ) for itself and as agent for each of its Subsidiaries (as such term is defined in the Framework Agreement (as such term is defined below)).

WHEREAS:

(A)

The Manager and the Parent have entered into a framework agreement dated 2 November 2015 as amended and/or supplemented from time to time (the Framework Agreement ).

(B)

The Manager and V Ships Greece Ltd. of Par-La-Ville Place 14, Par-La Ville Road, Hamilton HM 08, Bermuda ( V Ships ) have entered into a co-operation agreement dated 7 January 2013 as amended and/or supplemented from time to time (the Co-operation Agreement ), whereby they have agreed the terms upon which V Ships will ( inter alia ) provide shipmanagement services to certain of the Vessels (as such term is defined in the Framework Agreement).

(C)

Pursuant to clause 2.3 of the Framework Agreement, the parties thereto have agreed that the Manager has the right to appoint V Ships as a submanager without first obtaining the Parent’s consent.

NOW IT IS HEREBY AGREED as follows:

Terms defined in the Framework Agreement shall have the same meanings when used herein, unless otherwise defined in this Agreement.

In this Agreement, unless the contest otherwise requires:

Settlement Date means the first day on which banks are open for business in Greece falling immediately after the date that the Manager receives from V Ships a Surplus Profit.

Surplus Profit means the amount paid by V Ships to the Manager under the Co-operation Agreement as the profits generated by the Cell (as such term is defined in the Co-operation Agreement) provided however that if the amount to be paid by the Manager to V Ships under clause 26(a) of the Co-operation Agreement has not been taken into account in calculating such profit, then such amount payable by V Ships under clause 26(a) of the Co-operation Agreement shall be deducted from the amount to be paid by V Ships as profits generated by the Cell for the purposes of this definition and provided also that any payment by V Ships for breach of its obligation to pay certain part of the profits to the Manager shall constitute Surplus Profit.

In consideration of the Parent entering into the Framework Agreement, the Manager agrees on each Settlement Date falling after the date of this Agreement to

(a)

refund such part of any Management Fees already received by such Settlement Date; and/or

(b)

reduce any Management Fees to be received after such Settlement Date, by such amount,

as, in either case, is equal to the Surplus Profit the Manager has received by such Settlement Date, provided always that:

(i)

the Manager shall, to the extent possible, seek first under this clause 3 to make a refund of Management Fees before seeking to apply a reduction against future Management Fees; and

(ii)

the Manager shall not be asked under this clause to refund or reduce more than the aggregate of the Management Fees, it has received since the date of this Agreement and/or will in the future receive in accordance with the terms of the Framework Agreement.

Save as amended and/or supplemented by this Agreement, all other terms and conditions contained in the Framework Agreement, any Shipmanagement Agreements and any Supervision Agreements shall remain in full force and effect and shall not be amended.

Article XV (Applicable Law) and Article XVI (Arbitration) of the Framework Agreement shall apply to this Agreement.

No term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement, other than a Subsidiary.

[ Remainder of page intentionally left blank ]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as a deed as of the day and year first above written.

EXECUTED as a DEED

by MR. KONSTANTINOS KONSTANTAKOPOULOS

for and on behalf of

COSTAMARE INC. and each Subsidiary

in the presence of:

/s/ Konstantinos V. Konstantakopoulos

Name: Konstantinos Konstantakopoulos

Title: Chief Executive Officer

EXECUTED as a DEED

by MR. DIAMANTIS MANOS

for and on behalf of

COSTAMARE SHIPPING COMPANY S.A.

in the presence of:

/s/ Diamantis Manos

Name: Diamantis Manos

Title: Director

Exhibit 4.14

EXECUTION COPY

AMENDED and RESTATED

REGISTRATION RIGHTS AGREEMENT

dated as of November 27, 2015,

among

COSTAMARE INC.

and

THe STOCKHOLDERS Named HEREIN

This AMENDED and RESTATED REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”), is made as of November 27, 2015, among Costamare Inc., a Marshall Islands corporation (the “ Company ”) and the stockholders set forth on the signature page of this Agreement (together, the “ Stockholders ” and each, a “ Stockholder ”).

WHEREAS:

(A)

The Company has agreed to provide the Stockholders with certain registration rights with respect to its shares of Common Stock.

(B)

The Company and the Stockholders party to the original registration rights agreement made as of November 3, 2010 (the “ Original Agreement ”) desire to adopt this Agreement, which will amend and restate in full the Original Agreement.

ACCORDINGLY, in consideration of the mutual covenants and agreements contained herein and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Certain Definitions .

As used in this Agreement, capitalized terms not otherwise defined herein shall have the meanings ascribed to them below:

“ Additional Demand Rights ” has the meaning set forth in Section 2.3(c).

“ Additional Piggyback Rights ” has the meaning set forth in Section 2.1(c).

“ Additional Registrable Securities ” has the meaning set forth in Section 2.3(c)(i).

“ Claims ” has the meaning set forth in Section 2.9(a).

“ Common Stock ” means the common stock, par value $0.0001 per share, of the Company and any securities issued or issuable in exchange for or with respect to the common stock of the Company by way of a stock dividend, stock split or combination of shares or in connection with a reclassification, recapitalization, exchange, merger, consolidation or other reorganization.

“ Common Stock Equivalent ” means all options, warrants and other securities convertible into, or exchangeable or exercisable for (at any time or upon the occurrence of any event or contingency and without regard to any vesting or other conditions to which such securities may be subject) Common Stock.

“ Demand Exercise Notice ” has the meaning set forth in Section 2.1(a)(i).

“ Demand Registration ” has the meaning set forth in Section 2.1(a)(i).

“ Demand Registration Request ” has the meaning set forth in Section 2.1(a)(i).

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Expenses ” means any and all fees and expenses incurred in connection with the Company’s performance of or compliance with Section 2, including, without limitation: (i) SEC, stock exchange or FINRA registration and filing fees and all listing fees and fees with respect to the inclusion of securities on the New York Stock Exchange or on any securities market on which the Common Stock is listed or quoted, (ii) fees and expenses of compliance with state securities or “blue sky” laws and in connection with the preparation of a “blue sky” survey, including without limitation, reasonable fees and expenses of blue sky counsel, (iii) printing and copying expenses, (iv) messenger and delivery expenses, (v) expenses incurred in connection with any road show, (vi) fees and disbursements of counsel for the Company, (vii) with respect to each registration, the fees and disbursements of one counsel for the relevant Participating Holder(s) (selected in each case by the Majority Participating Holders, in the case of a registration pursuant to Section 2.1 or Section 2.2), (viii) fees and disbursements of all independent public accountants (including the expenses of any audit and/or “cold comfort” letter) and fees and expenses of other persons, including special experts, retained by the Company, (ix) fees and expenses payable to a Qualified Independent Underwriter (as such term is defined in Schedule E to the By-Laws of FINRA) and (x) any other fees and disbursements of underwriters, if any, customarily paid by issuers of securities.

“ FINRA ” means Financial Industry Regulatory Authority, Inc.

“ Holder ” means the Stockholder, for so long as such Stockholder owns any Registrable Securities, and its successors, assigns and direct and indirect transferees who become owners of Registrable Securities and become a party hereto pursuant to Section 4.4(b) and “ Holders ” means all or any of them.

“ Initiating Holders ” has the meaning set forth in Section 2.1(a)(i).

“ IPO ” means an underwritten initial public offering registered under the Securities Act of shares of Common Stock held by the Stockholders.

“ Majority Participating Holders ” means Participating Holders holding more than 50% of the Registrable Securities proposed to be included in any offering of Registrable Securities by such Participating Holders pursuant to Section 2.1 or Section 2.2.

“ Manager ” has the meaning set forth in Section 2.3(a).

“ Participating Holder ” has the meaning set forth in Section 2.1(a)(ii) and/or Section 2.2.(a) as qualified in Section 2.2(c) and Section 2.3(a).

“ Person ” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivisions thereof.

“ Piggyback Securities ” has the meaning set forth in Section 2.3(a)(ii).

“ Postponement Period ” has the meaning set forth in Section 2.1(b).

“ Registrable Securities ” means any shares of Common Stock (including any shares of Common Stock acquired by a Stockholder subsequent to the date of the Original Agreement), provided such shares of Common Stock shall cease to be Registrable Securities when (A) a registration statement with respect to the sale of such shares of Common Stock shall have been declared effective under the Securities Act and such shares of Common Stock shall have been disposed of in accordance with such registration statement, or (B) such securities shall have been sold (other than in a privately negotiated sale) pursuant to Rule 144 (or any successor provision) under the Securities Act and in compliance with the requirements of Rule 144.

“ SEC ” means the Securities and Exchange Commission.

“ Section 2.3(a) Sale Number ” has the meaning set forth in Section 2.3(a).

“ Section 2.3(b) Sale Number ” has the meaning set forth in Section 2.3(b).

“ Section 2.3(c) Sale Number ” has the meaning set forth in Section 2.3(c).

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Selected Courts ” has the meaning set forth in Section 4.6(e).

“ Valid Business Reason ” has the meaning set forth in Section 2.1(b).

2. Registration Rights .

2.1. Demand Registrations.

(a) (i) Subject to Section 2.1(b), at any time and from time to time after the date of this Agreement, any Holder shall have the right to require the Company to file a registration statement under the Securities Act covering all or a portion of the Registrable Securities, by delivering a written request therefor to the Company specifying the number of Registrable Securities to be included in such registration by such Holder and the intended method of distribution thereof. All such requests by any Holder pursuant to Section 2.1(a)(i) are referred to herein as “ Demand Registration Requests ,” and the registrations so requested are referred to herein as “ Demand Registrations ” (with respect to any Demand Registration Request, the Holders making such Demand Registration Request being referred to as the “ Initiating Holders ”). As promptly as practicable, but no later than ten days after receipt of a Demand Registration Request, the Company shall give written notice (the “ Demand Exercise Notice ”) of such Demand Registration Request to all Holders of record.

(ii) The Company, subject to Sections 2.3 and 2.6, shall include in a Demand Registration (x) the Registrable Securities of the Initiating Holders and (y) the Registrable Securities of any other Holder which shall have made a written request to the Company for inclusion in such Demand Registration (together with the Initiating Holders, the “ Participating Holders ”) (which request shall specify the maximum number of Registrable Securities intended to be disposed of by such Participating Holders) within 60 days after the receipt by the Company of the Demand Exercise Notice (or 30 days if, at the request of the Initiating Holders, the Company states in such Demand Exercise Notice or gives telephonic

notice to all Holders, with written confirmation to follow promptly thereafter, that such registration will be on a Form F-3).

(iii) The Company shall, as expeditiously as possible but subject to Section 2.1(b), use its commercially reasonable efforts to (x) effect such registration under the Securities Act of the Registrable Securities which the Company has been so requested by the Participating Holders to register, for distribution in accordance with such intended method of distribution and (y) if requested by the Majority Participating Holders, obtain acceleration of the effective date of the registration statement relating to such registration.

(b) Notwithstanding anything to the contrary in Section 2.1(a), the Demand Registration rights granted in Section 2.1(a) to the Holders are subject to the following limitations: (i) the Company shall not be required to cause a registration statement pursuant to Section 2.1(a)(i) to be filed, or to be declared effective, within 90 days after the effective date of any other registration statement of the Company filed pursuant to the Securities Act (excluding any registration on Form F-4 or S-8 (or otherwise in connection with any employee benefits plan) or any “shelf” registration) or, in either case, within any longer period of time, subject to the Company’s compliance with Section 4.7, during which the Company may be restricted from filing or having declared effective a registration statement or the Participating Holders may be restricted from selling any of their Registrable Securities; (ii) if the Company, in its good faith judgment, determines that any registration of Registrable Securities should not be made or continued because it would materially interfere with any material financing, acquisition, corporate reorganization or merger or other transaction or event involving the Company or any of its subsidiaries (a “ Valid Business Reason ”), the Company may postpone filing, or may withdraw, or not seek to bring effective, a registration statement relating to a Demand Registration Request until such Valid Business Reason no longer exists, but in no event shall the Company avail itself of such right for more than 90 days, in the aggregate, in any period of 365 consecutive days (such period of postponement or withdrawal under this clause (ii), the “ Postponement Period ”); and the Company shall give notice to the relevant Participating Holders of its determination to postpone or withdraw a registration statement and of the fact that the Valid Business Reason for such postponement or withdrawal no longer exists, in each case, promptly after the occurrence thereof; (iii) the Company shall not be required to effect a Demand Registration unless the Registrable Securities to be included in such registration either (A) have an aggregate anticipated offering price of at least $20,000,000 (based on the then-current market price of the Common Stock) or (B) consist of all remaining Registrable Securities held by the relevant Participating Holders. If the Company shall give any notice of postponement or withdrawal of any registration statement pursuant to clause (ii) of this Section, the Company shall not, during the period of postponement or withdrawal, register any equity security of the Company, other than pursuant to a registration statement on Form F-4 or S-8 (or otherwise in connection with any employee benefits plan). Each Participating Holder agrees that, upon receiving notice from the Company that the Company has withdrawn any registration statement pursuant to clause (ii) of this Section, it will (x) discontinue its disposition of Registrable Securities pursuant to such registration statement and (y) if so directed by the Company, deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, in its possession of the prospectus covering such Registrable Securities that was in effect at the time of receipt of such notice. If the Company shall have withdrawn or prematurely terminated a registration statement filed under Section 2.1(a)(i) (whether pursuant to clause (ii) above or as a

result of any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court), the Company shall not be considered to have effected an effective registration for the purposes of this Agreement until the Company shall have filed a new registration statement covering the Registrable Securities covered by the withdrawn registration statement and such registration statement shall have been declared effective and shall not have been withdrawn. If the Company shall give any notice of withdrawal or postponement of a registration statement, the Company shall, at such time as the Valid Business Reason that caused such withdrawal or postponement no longer exists (but in no event later than three months after the date of the notice notifying the relevant Participating Holders of the postponement or withdrawal), use its commercially reasonable efforts to effect the registration under the Securities Act of the Registrable Securities covered by the withdrawn or postponed registration statement in accordance with Section 2.1 (unless the Initiating Holders shall have withdrawn such request, in which case the Company shall not be considered to have effected an effective registration for the purposes of this Agreement).

(c) The Company, subject to Sections 2.3 and 2.6, may elect to include in any registration statement and offering made pursuant to Section 2.1(a)(i), (i) authorized but unissued shares of Common Stock or shares of Common Stock held by the Company as treasury shares and (ii) any other shares of Common Stock which are requested to be included in such registration pursuant to the exercise of piggyback rights granted by the Company which are not inconsistent with the rights granted in, or otherwise conflict with the terms of, this Agreement (“ Additional Piggyback Rights ”); provided , however , that such inclusion shall be permitted only to the extent that it is pursuant to and subject to the terms of the underwriting agreement or arrangements, if any, entered into by the relevant Participating Holders.

(d) With respect to any Demand Registration, the Initiating Holders shall have the right to designate the lead managing underwriter in connection with such registration and each other managing underwriter for such registration, provided that no such managing underwriter shall be reasonably objectionable to the Company.

2.2. Piggyback Registrations .

(a) If, at any time, the Company proposes or is required to register any of its equity securities under the Securities Act (other than (i) solely the registration of securities in connection with an employee benefits plan or dividend reinvestment plan or an acquisition, merger or consolidation or (ii) pursuant to a Demand Registration under Section 2.1) on a registration statement on Form F-1, Form F-3 or an equivalent general registration form then in effect, whether or not for its own account, the Company shall give prompt written notice of its intention to do so to each Holder of record. Upon the written request of any such Holder made within 15 days following the receipt of any such written notice (which request shall specify the maximum number of Registrable Securities intended to be disposed of by such Holder and the intended method of distribution thereof), the Company shall, subject to Sections 2.2(b), 2.3 and 2.6, use its commercially reasonable efforts to cause all such Registrable Securities, the Holders of which have so requested the registration thereof, to be included in the registration statement with the securities which the Company at the time proposes to register to permit the sale or other disposition by such Holders (in accordance with the intended method of distribution thereof) of the Registrable Securities to be so registered. Such Holders shall be referred to as Participating

Holders for the purposes of any Registrable Securities to be registered under Section 2.2(a). No registration of Registrable Securities effected under Section 2.2(a) shall relieve the Company of its obligations to effect Demand Registrations under Section 2.1.

(b) If, at any time after giving written notice of its intention to register any equity securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such equity securities, the Company will give written notice of such determination to all relevant Participating Holders and (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such abandoned registration, without prejudice, however, to the rights of Holders under Section 2.1, and (ii) in the case of a determination to delay such registration of its equity securities, shall be permitted to delay the registration of such Registrable Securities for the same period as the delay in registering such other equity securities, without prejudice, however, to the rights of Holders under Section 2.1.

(c) Any Participating Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any registration statement pursuant to Section 2.2 by giving written notice to the Company of its request to withdraw; provided , however , that such request must be made in writing prior to the earlier of the execution of the underwriting agreement or the execution of the custody agreement with respect to such registration. Any Holder withdrawing pursuant to the provisions of Section 2.2(c) shall following such withdrawal no longer be treated as a Participating Holder for the purposes of this Agreement.

2.3. Allocation of Securities Included in Registration Statement .

(a) If any requested registration made pursuant to Section 2.1 involves an underwritten offering and the lead managing underwriter of such offering (the “ Manager ”) shall advise the Company that, in its view, the number of securities requested to be included in such registration by the relevant Participating Holders or any other persons (including those shares of Common Stock requested by the Company to be included in such registration) exceeds the largest number (the “ Section 2.3(a) Sale Number ”) that can be sold in an orderly manner in such offering within a price range acceptable to the Majority Participating Holders, the Company shall use its commercially reasonable efforts to include in such registration:

(i) first, all Registrable Securities requested to be included in such registration by the Participating Holders thereof; provided , however , that, if the number of such Registrable Securities exceeds the Section 2.3(a) Sale Number, the number of such Registrable Securities (not to exceed the Section 2.3(a) Sale Number) to be included in such registration shall be allocated on a pro rata basis among all relevant Participating Holders, based on the number of Registrable Securities then owned by each such Participating Holder requesting inclusion in relation to the number of Registrable Securities owned by all Participating Holders requesting inclusion;

(ii) second, to the extent that the number of securities to be included pursuant to clause (i) of Section 2.3(a) is less than the Section 2.3(a) Sale Number, the

remaining shares to be included in such registration shall be allocated on a pro rata basis among all holders requesting that securities be included in such registration pursuant to the exercise of Additional Piggyback Rights (“ Piggyback Securities ”), based on the aggregate number of Piggyback Securities then owned by each holder requesting inclusion in relation to the aggregate number of Piggyback Securities owned by all holders requesting inclusion, up to the Section 2.3(a) Sale Number; and

(iii) third, to the extent that the number of securities to be included pursuant to clauses (i) and (ii) of Section 2.3(a) is less than the Section 2.3(a) Sale Number, any securities that the Company proposes to register, up to the Section 2.3(a) Sale Number.

If, as a result of the proration provisions of Section 2.3(a), any Participating Holder shall not be entitled to include in a registration all Registrable Securities that such Participating Holder has requested be included in such registration, such Participating Holder may elect to withdraw its request to include any Registrable Securities in such registration or may reduce the number requested to be included; provided , however , that such request must be made in writing prior to the earlier of the execution of the underwriting agreement or the execution of the custody agreement with respect to such registration. Any Holder withdrawing all of its Registrable Securities pursuant to the provisions of the preceding sentence shall following such withdrawal no longer be treated as a Participating Holder for the purposes of this Agreement.

(b) If any registration pursuant to Section 2.2 is an underwritten primary registration of the Company’s securities, and the Manager shall advise the Company that, in its view, the number of securities requested to be included in such registration exceeds the number (the “ Section 2.3(b) Sale Number ”) that can be sold in an orderly manner in such registration within a price range acceptable to the Company, the Company shall include in such registration:

(i) first, all Common Stock that the Company proposes to register for its own account; and

(ii) second, to the extent that the number of securities to be included pursuant to clause (i) of Section 2.3(b) is less than the Section 2.3(b) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Registrable Securities or Piggyback Securities be included in such registration pursuant to the exercise of piggyback rights pursuant to Section 2.2 or Additional Piggyback Rights, based on the aggregate number of Registrable Securities and Piggyback Securities then owned by each holder requesting inclusion in relation to the aggregate number of Registrable Securities and Piggyback Securities owned by all holders requesting inclusion, up to the Section 2.3(b) Sale Number.

(c) If any registration pursuant to Section 2.2 is an underwritten secondary registration on behalf of holders of the Company’s securities (other than Registrable Securities) that have the right to require such registration pursuant to an agreement entered into by the Company in accordance with Section 4.7 (“ Additional Demand Rights ”) and the Manager

shall advise the Company that, in its view, the number of securities requested to be included in such registration exceeds the number (the “ Section 2.3(c) Sale Number ”) that can be sold in an orderly manner in such registration within a price range acceptable to the Company, the Company shall include in such registration:

(i) first, all securities requested to be included in such registration by the holders of Additional Demand Rights (“ Additional Registrable Securities ”), provided , however , that, if the number of such Additional Registrable Securities exceeds the Section 2.3(c) Sale Number, the number of such Additional Registrable Securities (not to exceed the Section 2.3(c) Sale Number) to be included in such registration shall be allocated on a pro rata basis among all holders of Additional Registrable Securities requesting that Additional Registrable Securities be included in such registration, based on the number of Additional Registrable Securities then owned by each such holder requesting inclusion in relation to the number of Additional Registrable Securities owned by all of such holders requesting inclusion, unless such holders shall have otherwise agreed;

(ii) second, to the extent that the number of securities to be included pursuant to clause (i) of Section 2.3(c) is less than the Section 2.3(c) Sale Number, any Common Stock that the Company proposes to register for its own account, up to the Section 2.3(c) Sale Number, and

(iii) third, to the extent that the number of securities to be included pursuant to clauses (i) and (ii) of Section 2.3(c) is less than the Section 2.3(c) Sale Number, the remaining shares to be included in such registration shall be allocated on a pro rata basis among all holders requesting that Registrable Securities or Piggyback Securities be included in such registration pursuant to the exercise of piggyback rights pursuant to Section 2.2 or Additional Piggyback Rights, based on the aggregate number of Registrable Securities and Piggyback Securities then owned by each holder requesting inclusion in relation to the aggregate number of Registrable Securities and Piggyback Securities owned by all such holders requesting inclusion, up to the Section 2.3(c) Sale Number.

2.4. Registration Procedures . If and whenever the Company is required by the provisions of this Agreement to use its commercially reasonable efforts to effect or cause the registration of any Registrable Securities under the Securities Act as provided in this Agreement, the Company shall, as expeditiously as possible:

(a) prepare and file with the SEC a registration statement on an appropriate registration form of the SEC for the disposition of such Registrable Securities in accordance with the intended method of disposition thereof, which form shall be selected by the Company and shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith, and the Company shall use its commercially reasonable efforts to cause such registration statement to become and remain effective; provided , however , that before filing a registration statement or prospectus or any amendments or supplements thereto, or comparable statements under securities or blue sky laws of any jurisdiction, or any free writing prospectus related thereto, the Company will furnish to one counsel for the relevant Participating Holders (selected by the Majority Participating Holders) and the Manager, if any, copies of all such documents

proposed to be filed (including all exhibits thereto), which documents will be subject to the review and reasonable comment of such counsel, and the Company shall not file any registration statement or amendment thereto, any prospectus or supplement thereto or any free writing prospectus related thereto to which the Majority Participating Holders or the Manager, if any, shall reasonably object;

(b) prepare and file with the SEC such amendments and supplements to the relevant registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for such period as any relevant Participating Holder shall request and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all Registrable Securities covered by such registration statement in accordance with the intended methods of disposition by the relevant Participating Holders thereof set forth in such registration statement;

(c) furnish, without charge, to each relevant Participating Holder and each underwriter, if any, of the securities covered by the relevant registration statement such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits), the prospectus included in such registration statement (including each preliminary prospectus) in conformity with the requirements of the Securities Act, each free writing prospectus utilized in connection therewith, and other documents, as such Participating Holder and underwriter may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such Participating Holder (the Company hereby consenting to the use in accordance with all applicable law of each such registration statement (or amendment or post-effective amendment thereto) and each such prospectus (or preliminary prospectus or supplement thereto) or free writing prospectus by each such Participating Holder and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such registration statement or prospectus);

(d) use its commercially reasonable efforts to register or qualify the Registrable Securities covered by the relevant registration statement under such other securities or “blue sky” laws of such jurisdictions as any relevant Participating Holder or any managing underwriter, if any, shall reasonably request in writing, and do any and all other acts and things which may be reasonably necessary or advisable to enable such Participating Holder or underwriter, if any, to consummate the disposition of the relevant Registrable Securities in such jurisdictions, except that in no event shall the Company be required to qualify to do business as a foreign corporation in any jurisdiction where it would not, but for the requirements of this paragraph (d), be required to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service of process in any such jurisdiction;

(e) promptly notify each Participating Holder selling such Registrable Securities and each managing underwriter, if any: (i) when the relevant registration statement, any pre-effective amendment, the prospectus or any prospectus supplement related thereto, any post-effective amendment to such registration statement or any free writing prospectus has been filed and, with respect to such registration statement or any post-effective amendment, when the same has become effective; (ii) of any request by the SEC or state securities authority for amendments or supplements to the relevant registration statement or the prospectus related thereto or for additional information; (iii) of the issuance by the SEC of any stop order

suspending the effectiveness of the relevant registration statement or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or blue sky laws of any jurisdiction or the initiation of any proceeding for such purpose; (v) of the existence of any fact of which the Company becomes aware which results in the relevant registration statement, the prospectus related thereto, any document incorporated therein by reference, any free writing prospectus or the information conveyed to any purchaser at the time of sale to such purchaser containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make any statement therein not misleading; and (vi) if at any time the representations and warranties contemplated by any underwriting agreement, securities sale agreement, or other similar agreement, relating to the offering shall cease to be true and correct in all material respects; and, if the notification relates to an event described in clause (v), the Company shall promptly prepare and furnish to each such Participating Holder and each managing underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances under which they were made not misleading;

(f) comply with all applicable rules and regulations of the SEC, and make generally available to its security holders, as soon as reasonably practicable after the effective date of the relevant registration statement (and in any event within 90 days after the end of such twelve month period described hereafter), an earnings statement (which need not be audited) covering the period of at least twelve consecutive months beginning with the first day of the Company’s first calendar quarter after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

(g) (i) cause all such Registrable Securities covered by the relevant registration statement to be listed on the New York Stock Exchange or the principal securities exchange on which similar securities issued by the Company are then listed (if any), if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) if no similar securities are then so listed, to either cause all such Registrable Securities to be listed on a national securities exchange or to take all actions that may be required by the Company as the issuer of such Registrable Securities in order to facilitate the managing underwriter’s arranging for the registration of at least two market makers as such with respect to such shares with FINRA;

(h) provide and cause to be maintained a transfer agent and registrar for all such Registrable Securities covered by such registration statement not later than the effective date of such registration statement;

(i) enter into such customary agreements (including, if applicable, an underwriting agreement containing customary provisions for indemnification and contribution covering the underwriters and their affiliates) and take such other actions as the Majority Participating Holders shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (it being understood that the relevant Participating Holders shall be

parties to any such underwriting agreement and may, at their option, require that the Company make to and for the benefit of such Participating Holders the representations, warranties and covenants of the Company which are being made to and for the benefit of such underwriters);

(j) use its commercially reasonable efforts to obtain an opinion from the Company’s counsel and “cold comfort” letters from the Company’s independent public accountants in customary form and covering such matters as are customarily covered by such opinions and “cold comfort” letters delivered to underwriters in underwritten public offerings, which opinion and letter shall be reasonably satisfactory to the underwriter, if any, and furnish to each relevant Participating Holder and to each underwriter, if any, a copy of such opinion and letter addressed to such Participating Holder or underwriter;

(k) deliver promptly to each relevant Participating Holder and each underwriter, if any, copies of all correspondence between the SEC and the Company, its counsel or auditors and all memoranda relating to discussions with the SEC or its staff with respect to the relevant registration statement, other than those portions of any such memoranda which contain information subject to attorney-client privilege with respect to the Company, and, upon receipt of such confidentiality agreements as the Company may reasonably request, make reasonably available for inspection by any Participating Holder relevant to such registration statement, by any underwriter, if any, participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by any such Participating Holder or any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors and employees to supply all information reasonably requested by any such Participating Holder, underwriter, attorney, accountant or agent in connection with such registration statement;

(l) use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of the relevant registration statement;

(m) provide a CUSIP number for all such Registrable Securities, not later than the effective date of the relevant registration statement;

(n) make reasonably available its employees and personnel for participation in “road shows” and other marketing efforts and otherwise provide reasonable assistance to the underwriters (taking into account the needs of the Company’s businesses and the requirements of the marketing process) in the marketing of such Registrable Securities in any underwritten offering;

(o) promptly prior to the filing of any document which is to be incorporated by reference into the relevant registration statement or the prospectus related thereto (after the initial filing of such registration statement), and prior to the filing of any free writing prospectus, provide copies of such document to counsel for each relevant Participating Holder and to each managing underwriter, if any, and make the Company’s representatives reasonably available for discussion of such document and make such changes in such document concerning any such Participating Holder or managing underwriter prior to the filing thereof as counsel for such Participating Holder or managing underwriter may reasonably request;

(p) cooperate with the relevant Participating Holders and the managing underwriter, if any, to facilitate the timely preparation and delivery of certificates not bearing any restrictive legends representing the Registrable Securities to be sold, and cause such Registrable Securities to be issued in such denominations and registered in such names in accordance with the underwriting agreement prior to any sale of Registrable Securities to the underwriters or, if not an underwritten offering, in accordance with the instructions of the relevant Participating Holders at least three business days prior to any sale of Registrable Securities and instruct any transfer agent and registrar of Registrable Securities to release any stop transfer orders in respect thereof;

(q) take all such other commercially reasonable actions as are necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities;

(r) take no direct or indirect action prohibited by Regulation M under the Exchange Act; provided , however , that to the extent that any prohibition is applicable to the Company, the Company will take such action as is necessary to make any such prohibition inapplicable;

(s) take all reasonable action to ensure that any free writing prospectus utilized in connection with any registration covered by Section 2.1 or Section 2.2 complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related prospectus, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and

(t) in connection with any underwritten offering, if at any time the information conveyed to a purchaser at the time of sale includes any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, promptly file with the SEC such amendments or supplements to such information as may be necessary so that the statements as so amended or supplemented will not, in light of the circumstances, be misleading.

To the extent the Company is a well-known seasoned issuer (as defined in Rule 405 under the Securities Act) (a “ WKSI ”) at the time any Demand Registration Request is submitted to the Company, and such Demand Registration Request requests that the Company file an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) (an “ automatic shelf registration statement ”) on Form F-3, the Company shall file an automatic shelf registration statement which covers those Registrable Securities which are requested to be registered. The Company shall use its commercially reasonable efforts to remain a WKSI (and not become an ineligible issuer (as defined in Rule 405 under the Securities Act)) during the period during which such automatic shelf registration statement is required to remain effective. If the Company does not pay the filing fee covering the Registrable Securities at the time the automatic shelf registration statement is filed, the Company agrees to pay such fee at such time or times as the Registrable Securities are to be sold. If the automatic shelf registration statement has been outstanding for at least three years, at the end of the third year the Company shall refile

a new automatic shelf registration statement covering the Registrable Securities. If at any time when the Company is required to re-evaluate its WKSI status the Company determines that it is not a WKSI, the Company shall use its commercially reasonable efforts to refile the shelf registration statement on Form F-3 and, if such form is not available, Form F-1 and keep such registration statement effective during the period during which such registration statement is required to be kept effective.

If the Company files any shelf registration statement for the benefit of the holders of any of its securities other than the Holders, the Company agrees that it shall include in such registration statement such disclosures as may be required by Rule 430B (referring to the unnamed selling security holders in a generic manner by identifying the initial offering of the securities to the Holders) in order to ensure that the Holders may be added to such shelf registration statement at a later time through the filing of a prospectus supplement rather than a post-effective amendment.

As a condition precedent to the Company’s obligations under Section 2.4 to register Registrable Securities, the Company may require that each Participating Holder furnish the Company such information in writing regarding such Participating Holder and the distribution of the Registrable Securities owned by such Participating Holder, as the Company may from time to time reasonably request provided that such information is necessary for the Company to consummate such registration and shall be used only in connection with such registration.

Each Participating Holder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in clause (v) of paragraph (e) of Section 2.4, such Participating Holder will (x) discontinue disposing Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Participating Holder receives copies of the supplemented or amended prospectus contemplated by paragraph (e) of Section 2.4 and (y) if so directed by the Company, deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, in such Participating Holder’s possession of the prospectus covering such Registrable Securities that was in effect at the time of receipt of such notice. In the event the Company shall give any such notice, the applicable period mentioned in paragraph (b) of Section 2.4 shall be extended by the number of days during such period from and including the date of the giving of such notice to and including the date when each Participating Holder of any Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by paragraph (e) of Section 2.4.

If any such registration statement or comparable statement under “blue sky” laws refers to any Holder by name or otherwise as the Holder of any securities of the Company, then such Holder shall have the right to require (i) the insertion therein of language, in form and substance reasonably satisfactory to such Holder and the Company, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the Company’s securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company, or (ii) in the event that such reference to such Holder by name or otherwise is not in the judgment of the Company, as advised by counsel to the Company, required by the Securities

Act or any similar federal statute or any state “blue sky” or securities law then in force, the deletion of the reference to such Holder.

2.5. Registration Expenses .

(a) The Company shall pay all Expenses (x) with respect to any Demand Registration whether or not it becomes effective or remains effective for the period contemplated by Section 2.4(b) and (y) with respect to any registration effected under Section 2.2.

(b) Notwithstanding the foregoing, (x) the provisions of Section 2.5 shall be deemed amended to the extent necessary to cause these expense provisions to comply with “blue sky” laws of each state in which the relevant offering is made and (y) in connection with any offering hereunder, each Participating Holder shall pay all brokerage fees or underwriting discounts and commissions and any transfer taxes, if any, attributable to the sale of the Registrable Securities of such Participating Holder, pro rata with respect to payments of fees, discounts and commissions in accordance with the number of shares sold in such offering by such Participating Holder, and (z) the Company shall, in the case of all registrations under this Section 2, be responsible for all its expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties).

2.6. Certain Limitations on Registration Rights . In the case of any registration under Section 2.1 pursuant to an underwritten offering, or, in the case of a registration under Section 2.2, if the Company has determined to enter into an underwriting agreement in connection therewith, all securities to be included in such registration shall be subject to an underwriting agreement and no Person may participate in such registration unless such Person agrees to sell such Person’s securities on the basis provided therein and, subject to Section 3.1, completes and executes all reasonable questionnaires, and other documents (including custody agreements and powers of attorney) which must be executed in connection therewith, and provides such other information to the Company or the managing underwriter as may be necessary to register such Person’s securities.

2.7. Limitations on Sale or Distribution of Other Securities . (a) Each Participating Holder agrees, (i) to the extent requested in writing by a managing underwriter, if any, of any registration effected pursuant to Section 2.1 or Section 2.2, not to sell, transfer or otherwise dispose of, including any sale pursuant to Rule 144 under the Securities Act, any Common Stock or any other equity security of the Company or any security convertible into or exchangeable or exercisable for any equity security of the Company (other than as part of such underwritten public offering) during the time period reasonably requested by the managing underwriter, not to exceed 180 days (and the Company hereby also so agrees (except that the Company may effect any sale or distribution of any such securities pursuant to a registration on Form F-4 (if reasonably acceptable to such managing underwriter) or Form S-8 (or otherwise in connection with any employee benefits plan), or any successor or similar form which is then in effect or upon the conversion, exchange or exercise of any then outstanding Common Stock Equivalent) to use its commercially reasonable efforts to cause each holder of any equity security or any security convertible into or exchangeable or exercisable for any equity security of the Company purchased from the Company at any time other than in a public offering so to agree),

and (ii) to the extent requested in writing by a managing underwriter of any underwritten public offering effected by the Company for its own account, not sell any Common Stock or any Common Stock Equivalent (other than as part of such underwritten public offering) during the time period reasonably requested by the managing underwriter, which period shall not exceed 180 days.

(b) The Company hereby agrees that, if it shall previously have received a request for registration pursuant to Section 2.1 or Section 2.2, and if such previous registration shall not have been withdrawn or abandoned, the Company shall not sell, transfer, or otherwise dispose of, any Common Stock or any Common Stock Equivalent, or any other equity security of the Company or any security convertible into or exchangeable or exercisable for any equity security of the Company (other than as part of such underwritten public offering, a registration on Form F-4 or Form S-8 (or otherwise in connection with any employee benefits plan) or any successor or similar form which is then in effect or upon the conversion, exchange or exercise of any then outstanding Common Stock Equivalent), until a period of 90 days shall have elapsed from the effective date of such previous registration; and the Company shall so provide in any registration rights agreements hereafter entered into with respect to any of its securities.

2.8. No Required Sale . Nothing in this Agreement shall be deemed to create an independent obligation on the part of any Holder to sell any Registrable Securities pursuant to any effective registration statement.

2.9. Indemnification . (a) In the event of any registration of any securities of the Company under the Securities Act pursuant to Section 2, the Company will, and hereby agrees to, indemnify and hold harmless, to the fullest extent permitted by law, each Holder and each underwriter for each such Holder, and their respective directors, officers, fiduciaries, employees, stockholders, members or general and limited partners (and the directors, officers, employees and stockholders thereof), and each other Person, if any, who controls such Holder or such underwriter within the meaning of the Securities Act, from and against any and all losses, claims, damages or liabilities, joint or several, actions or proceedings (whether commenced or threatened) and expenses (including reasonable fees of counsel and any amounts paid in any settlement effected with the Company’s consent, which consent shall not be unreasonably withheld or delayed) to which each such indemnified party may become subject under the Securities Act or otherwise, including with respect to any indemnity or contribution provided by such Holder under an underwriting agreement or other arrangement relating to such registration of securities (collectively, “ Claims ”), and the Company will reimburse any such indemnified party for any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such Claim as such expenses are incurred; provided , however , that the Company shall not be liable to any such indemnified party in any such case to the extent such Claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact made in the relevant registration statement or amendment thereof or supplement thereto or in any such prospectus or any preliminary, final or summary prospectus or free writing prospectus in reliance upon and in conformity with written information furnished to the Company by or on behalf of such indemnified party specifically for use therein. Such indemnity and reimbursement of

expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party and shall survive the transfer of such securities by such Holder.

(b) Each Participating Holder of Registrable Securities as to which any registration under Section 2.1 or Section 2.2 is being effected shall, severally and not jointly, indemnify and hold harmless (in the same manner and to the same extent as set forth in paragraph (a) of Section 2.9) to the extent permitted by law the Company, its officers and directors, each Person controlling the Company within the meaning of the Securities Act and all other prospective sellers and their respective directors, officers, fiduciaries, managing directors, employees, agents, affiliates, consultants, representatives, successors, assigns, general and limited partners, stockholders and respective controlling Persons with respect to any untrue statement or alleged untrue statement of any material fact in, or omission or alleged omission of any material fact from, the relevant registration statement, any preliminary, final or summary prospectus contained therein, or any amendment or supplement thereto, or any free writing prospectus utilized in connection therewith, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company or its representatives by or on behalf of such Participating Holder specifically for use therein and reimburse such indemnified party for any legal or other expenses reasonably incurred in connection with investigating or defending any such Claim as such expenses are incurred; provided , however , that the aggregate amount which any such Participating Holder shall be required to pay pursuant to Section 2.9(b) and Sections 2.9(c), (e) and (f) shall in no case be greater than the amount of the net proceeds received by such Participating Holder upon the sale of the Registrable Securities pursuant to the registration statement giving rise to such Claim. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party and shall survive the transfer of such Registrable Securities by such Participating Holder.

(c) Any Person entitled to indemnification under this Agreement shall notify promptly the indemnifying party in writing of the commencement of any action or proceeding with respect to which a claim for indemnification may be made pursuant to Section 2.9, but the failure of any such Person to provide such notice shall not relieve the indemnifying party of its obligations under the preceding paragraphs of Section 2.9, except to the extent the indemnifying party is materially prejudiced thereby and shall not relieve the indemnifying party from any liability which it may have to any such Person otherwise than under this Article 2. In case any action or proceeding is brought against an indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, unless in the reasonable opinion of outside counsel to the indemnified party a conflict of interest between such indemnified and indemnifying parties may exist in respect of such Claim, to assume the defense thereof jointly with any other indemnifying party similarly notified, to the extent that it chooses, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party that it so chooses, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided , however , that (i) if the indemnifying party fails to take reasonable steps necessary to defend diligently the action or proceeding within 20 days after receiving notice from such indemnified party; or (ii) if such

indemnified party who is a defendant in any action or proceeding which is also brought against the indemnifying party reasonably shall have concluded that there may be one or more legal defenses available to such indemnified party which are not available to the indemnifying party; or (iii) if representation of both parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct, then, in any such case, the indemnified party shall have the right to assume or continue its own defense as set forth above (but with no more than one firm of counsel for all indemnified parties in each jurisdiction, except to the extent any indemnified party or parties reasonably shall have concluded that there may be legal defenses available to such party or parties which are not available to the other indemnified parties or to the extent representation of all indemnified parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct) and the indemnifying party shall be liable for any expenses therefor. No indemnifying party shall, without the written consent of the indemnified party, which consent shall not be unreasonably withheld, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or proceeding) unless such settlement, compromise or judgment (A) includes an unconditional release of the indemnified party from all liability arising out of such action or proceeding and (B) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

(d) If for any reason the foregoing indemnity is unavailable or is insufficient to hold harmless an indemnified party under Sections 2.9(a), (b) or (c), then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of any Claim in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and the indemnified party, on the other hand, with respect to such offering of securities. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. If, however, the allocation provided in the second preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative faults but also the relative benefits of the indemnifying party and the indemnified party as well as any other relevant equitable considerations. The parties hereto agree that it would not be just and equitable if contributions pursuant to Section 2.9(e) were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the preceding sentences of Section 2.9(e). The amount paid or payable in respect of any Claim shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such Claim. No Person guilty of fraudulent misrepresentation (within the meaning of section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Notwithstanding anything in Section 2.9(e) to the contrary, no indemnifying party (other than the Company) shall be required pursuant to Section 2.9(e) to contribute any amount in excess of the net proceeds received by such indemnifying party from the sale of Registrable Securities in the offering to which the losses, claims, damages or liabilities of the

indemnified parties relate, less the amount of any indemnification payment made by such indemnifying party pursuant to Sections 2.9(b) and (c).

(e) The indemnity and contribution agreements contained herein shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and shall remain operative and in full force and effect regardless of any investigation made or omitted by or on behalf of any indemnified party and shall survive the transfer of any Registrable Securities by any such party.

(f) The indemnification and contribution required by Section 2.9 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred.

3. Underwritten Offerings .

3.1. Requested Underwritten Offerings . If requested by the underwriters for any underwritten offering pursuant to a registration requested under Section 2.1, the Company shall enter into a customary underwriting agreement with the underwriters. Such underwriting agreement shall be satisfactory in form and substance to the Majority Participating Holders and shall contain such representations and warranties by, and such other agreements on the part of, the Company and such other terms as are generally prevailing in agreements of that type, including, without limitation, indemnities and contribution agreements. Any Participating Holder to the offering shall be a party to such underwriting agreement and may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such Participating Holder and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of such Participating Holder; provided , however , that the Company shall not be required to make any representations or warranties with respect to written information specifically provided by a Participating Holder for inclusion in the relevant registration statement. Each such Participating Holder shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Participating Holder, its ownership of and title to the relevant Registrable Securities, and its intended method of distribution; and any liability of such Participating Holder to any underwriter or other Person under such underwriting agreement shall be limited to liability arising from breach of such Participating Holder’s representations and warranties and shall be limited to an amount equal to the proceeds (net of expenses and underwriting discounts and commissions) that such Participating Holder derives from such registration.

3.2. Piggyback Underwritten Offerings . In the case of a registration pursuant to Section 2.2, if the Company shall have determined to enter into an underwriting agreement in connection therewith, any Registrable Securities to be included in such registration shall be subject to such underwriting agreement. Any Participating Holder to such registration may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such Participating Holder and that any or all of the conditions precedent to the

obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of such Participating Holder. Each such Participating Holder shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Participating Holder, its ownership of and title to the relevant Registrable Securities, and its intended method of distribution; and any liability of such Participating Holder to any underwriter or other Person under such underwriting agreement shall be limited to liability arising from breach of such Participating Holder representations and warranties and shall be limited to an amount equal to the proceeds (net of expenses and underwriting discounts and commissions) that such Participating Holder derives from such registration.

4. General .

4.1. Adjustments Affecting Registrable Securities . The Company agrees that it shall not effect or permit to occur any combination or subdivision of shares of Common Stock or Common Stock Equivalent which would adversely affect the ability of any Holder of any Registrable Securities to include such Registrable Securities in any registration contemplated by this Agreement or the marketability of such Registrable Securities in any such registration. The Company agrees that it will take all reasonable steps necessary to effect a subdivision of shares if in the reasonable judgment of (a) the Majority Participating Holders or (b) the managing underwriter for the relevant offering, such subdivision would enhance the marketability of the Registrable Securities. Each Holder agrees to vote all of its shares of capital stock in a manner, and to take all other actions necessary, to permit the Company to carry out the intent of the preceding sentence including, without limitation, voting in favor of an amendment to the Company’s certificate of incorporation in order to increase the number of authorized shares of capital stock of the Company.

4.2. Rule 144 . The Company covenants that (i) upon such time as it becomes, and so long as it remains, subject to the reporting provisions of the Exchange Act, it will timely file the reports required to be filed by it under the Securities Act or the Exchange Act (including, but not limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 under the Securities Act), and (ii) it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (A) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (B) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements.

4.3. Nominees for Beneficial Owners . If Registrable Securities are held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its option, be treated as the Holder of such Registrable Securities for purposes of any request or other action by any Holder pursuant to this Agreement (or any determination of any number or percentage of shares constituting Registrable Securities held by any Holder contemplated by this Agreement), provided that the Company shall have received assurances reasonably satisfactory to it of such beneficial ownership.

4.4. Amendments and Waiver; Transferees . (a) The terms and provisions of this Agreement may be modified or amended, or any of the provisions hereof waived, temporarily or permanently, in a writing executed and delivered by the Company and each of the Holders. No waiver of any of the provisions of this Agreement shall be deemed to or shall constitute a waiver of any other provision hereof (whether or not similar). No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof.

(b) Each Stockholder shall be entitled to transfer the benefits of this Agreement to any Person to whom it shall transfer all or any of its Registrable Securities, and any such transferee shall similarly be entitled to transfer the benefits of this Agreement; provided that each Stockholder agrees that it shall cause any such transferee to become a party to this Agreement by executing a counterpart of this Agreement and delivering the same to the Company. The Company shall not be required to effect the registration of any transfer of shares by a Stockholder unless it shall have received such a signed counterpart of this Agreement. This Agreement shall be effective with respect to any such transferee without the need for any action on the part of any other Stockholder.

4.5. Notices . All notices, requests, claims, demands and other communications required or permitted to be given hereunder will be in writing and will be given when delivered by hand or sent by registered or certified mail (postage prepaid, return receipt requested) or by overnight courier (providing proof of delivery) or by telecopy (providing confirmation of transmission). All such notices, requests, claims, demands or other communications will be addressed as follows:

(a) if to the Company, to:

Costamare Inc.

60 Zephyrou Street &

Syngrou Avenue

17564 Athens

Greece

Telephone No.: +30-210-94-90-0000

Fax No.: +30 210-940-6454

Attention: Chief Executive Officer

With a copy to:

Cravath, Swaine & Moore LLP

Worldwide Plaza

825 Eighth Avenue

New York, New York 10019

Telephone No.: (212) 474-1000

Fax No.: (212) 474-3700

Attention: D. Scott Bennett

(b) If to a Stockholder, to:

Costamare Shipping Company S.A.

60 Zephyrou Street &

Syngrou Avenue

17564 Athens

Greece

Telephone No.: +30-210-94-90-0000

Fax No.: +30 210-940-6454

Attention: Chief Executive Officer

With a copy to:

Cravath, Swaine & Moore LLP

Worldwide Plaza

825 Eighth Avenue

New York, New York 10019

Telephone No.: (212) 474-1000

Fax No.: (212) 474-3700

Attention: D. Scott Bennett

or such other address as the Company or such Stockholder shall have specified to the other party in writing in accordance with Section 4.5.

4.6. Miscellaneous .

(a) This Agreement amends and restates in its entirety the Original Agreement between the Company and the Stockholders party thereto. This Agreement shall become effective as of the date hereof.

(b) Subject to Section 4.4(b), this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the respective successors, personal representatives and assigns of the parties hereto.

(c) This Agreement (with the documents referred to herein or delivered pursuant hereto) embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements.

(d) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF).

(e) With respect to any suit, action or proceeding (“ Proceeding ”) arising out of or relating to this Agreement each of the parties hereto hereby irrevocably (i) submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York or if such suit, action or proceeding may not be brought in such court for jurisdictional reasons, in the Supreme Court of the State of New York, New York County (collectively, the “ Selected Courts ”) and waives any objection to venue being laid in the Selected Courts whether based on the grounds of forum non conveniens or otherwise and hereby agrees

not to commence any such Proceeding other than before one of the Selected Courts; provided , however , that a party may commence any Proceeding in a court other than a Selected Court solely for the purpose of enforcing an order or judgment issued by one of the Selected Courts and (ii) consents to service of process in any Proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, or by recognized international express carrier or delivery service, to the Company or such Stockholder at their respective addresses referred to in Section 4.5; provided , however , that nothing herein shall affect the right of any party hereto to serve process in any other manner permitted by law.

(f) WITH RESPECT TO ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY, TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AND AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

(g) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. All section references are to this Agreement unless otherwise expressly provided.

(h) This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

(i) Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.

(j) The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or was otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions and other equitable remedies to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any of the Selected Courts, this being in addition to any other remedy to which they are entitled at law or in equity. Any requirements for the securing or posting of any bond with respect to such remedy are hereby waived by each of the parties hereto. Each party further agrees that, in the event of any action

for an injunction or other equitable remedy in respect of such breach or enforcement of specific performance, it will not assert the defense that a remedy at law would be adequate.

(k) Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

4.7. No Inconsistent Agreements . The Company represents that the rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with any other agreements to which the Company is a party or by which it is bound. Without the prior written consent of Holders of a majority of the then outstanding Registrable Securities, the Company will not, on or after the date of this Agreement, enter into any agreement with respect to its securities which is inconsistent with the rights granted in this Agreement or otherwise conflicts with the provisions hereof or provides terms and conditions which, taken as a whole, are materially more favorable to, or materially less restrictive on, the other party thereto than the terms and conditions contained in this Agreement are (insofar as they are applicable) to the Holders, other than any lock-up agreement with the underwriters in connection with any registered offering effected hereunder, pursuant to which the Company shall agree not to register for sale, and the Company shall agree not to sell or otherwise dispose of, Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, for a specified period that is no longer than 180 days in the case of an IPO, or 90 days, in the case of any other registered offering, following the registered offering; provided, however, that in the event that either (a) during the last 17 days of the 180-day period or the 90-day period referred to above, as applicable, the Company issues an earnings release or material news or a material event relating to the Company occurs or (b) prior to the expiration of the 180-day restricted period or the 90-day restricted period, as applicable, the Company announces that it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the 180-day restricted period or the 90-day restricted period, as applicable, the restrictions described above will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. The Company further agrees that if any other registration rights agreement entered into after the date of this Agreement with respect to any of its securities contains terms which, taken as a whole, are materially more favorable to, or materially less restrictive on, the other party thereto than the terms and conditions contained in this Agreement are (insofar as they are applicable) to the Holders, then the terms and conditions of this Agreement shall immediately be deemed to have been amended without further action by the Company or any of the Holders so that the Holders shall each be entitled to the benefit of any such more favorable or less restrictive terms or conditions.

IN WITNESS WHEREOF, the parties hereto have duly executed this agreement as of the date first above written.

COSTAMARE INC.

By:	/s/ Gregory Zikos
	Name: Gregory Zikos
	Title: Chief Financial Officer, Director

By:	/s/ Konstantinos Konstantakopoulos
	Konstantinos Konstantakopoulos, as Stockholder

By:	/s/ Christos Konstantakopoulos
	Christos Konstantakopoulos, as Stockholder

By:	/s/ Achillefs Konstantakopoulos
	Achillefs Konstantakopoulos, as Stockholder

By:	/s/ Konstantinos Konstantakopoulos
	Kent Maritime Investments S.A., as Stockholder

By:	/s/ Achillefs Konstantakopoulos
	Yaco Maritime Investments S.A., as Stockholder

By:	/s/ Christos Konstantakopoulos
	Vasska Maritime Investments S.A., as Stockholder

By:	/s/ Konstantinos Konstantakopoulos
	Costamare Shipping Company S.A., as Stockholder

By:	/s/ Diamantis Manos
	Costamare Shipping Services Ltd., as Stockholder

[ Signature Page to the Amended and Restated Registration Rights Agreement ]

Exhibit 4.15

ADDENDUM

TO THE TRADEMARK LISCENCE AGREEMENT DATED NOVEMBER 3, 2010

This Addendum (the “ Addendum ”) is made and entered into on February 29, 2016 by and between COSTAMARE SHIPPING COMPANY S.A. a corporation incorporated under the laws of the Republic of Panama (the “ Licensor ”) and COSTAMARE INC. a corporation incorporated under the laws of the Republic of the Marshall Islands (the “ Licensee ” and together with the Licensor, the “ Parties ”).

WHERAS by a Trademark License Agreement entered into between the Licensor and the Licensee dated November 3, 2010 (the “ Agreement ”) the Licensor has granted to the Licensee and its subsidiaries the right to use the trademarks described therein in accordance with the terms of the Agreement.

NOW, THERFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

Section 1. Amendments to Agreement . With effect as of November the 2 ^nd 2015, Section 3(A) of the Agreement is replaced with the following:

“A.

The term of this Trademark License Agreement (the “ Term ”) shall commence on the Effective Dated and shall continue in effect until the expiration of the Framework Agreement entered into between Costamare Inc. and Costamare Shipping Company S.A. on November 2, 2015 (the “ Expiration Date ”) or any successor agreement thereto, unless sooner terminated pursuant to the terms hereof”

Section 2. No Other Changes . Except as specifically set forth in this Addendum, the terms and provisions of the Agreement shall remain unmodified, and the Agreement is hereby confirmed by the Parties to be in full force and effect as amended herewith.

Section 3. Governing Law and Submission to Jursidiction . This Addendum shall be subject to the choice of law and jurisdiction provisions set forth in Section 12(B) and 12(C) of the Agreement.

[ signature page follows ]

IN WITNESS WHEREOF, the Parties have caused this Addendum to be duly executed on the day and year first above written.

COSTAMARE INC.

By: /s/ Gregory Zikos
Name: Gregory Zikos
Title: Chief Financial Officer, Director

COSTAMARE SHIPPING COMPANY S.A.

By: /s/ Konstantinos Konstantakopoulos
Name: Konstantinos Konstantakopoulos
Title: President, Director

EXHIBIT 8.1

SUBSIDIARIES OF COSTAMARE INC.

The following companies are subsidiaries of Costamare Inc. as of April 20, 2016.


Name of Subsidiary	Jurisdiction of Incorporation	Proportion of Ownership Interest
MERIN SHIPPING CO.	Liberia		100	%
LYTTON SHIPPING CO.	Liberia		100	%
NIGEL SHIPPING CO.	Liberia		100	%
VENOR SHIPPING CO.	Liberia		100	%
LEGE SHIPPING CO.	Liberia		100	%
SIMS SHIPPING CO.	Liberia		100	%
DENOR SHIPPING CO.	Liberia		100	%
BURTON SHIPPING CO.	Liberia		100	%
FLOW SHIPPING CO.	Liberia		100	%
MERTEN SHIPPING CO.	Liberia		100	%
RAY SHIPPING CO.	Liberia		100	%
MIKO SHIPPING CO.	Liberia		100	%
CORNAS SHIPPING CO.	Liberia		100	%
MERA SHIPPING CO.	Liberia		100	%
DOURO SHIPPING CO.	Liberia		100	%
GRAPPA SHIPPING CO.	Liberia		100	%
LANG SHIPPING CO.	Liberia		100	%
DINO SHIPPING CO.	Liberia		100	%
COSTIS MARITIME CORPORATION	Liberia		100	%
CHRISTOS MARITIME CORPORATION	Liberia		100	%
ACHILLEAS MARITIME CORPORATION	Liberia		100	%
FASTSAILING MARITIME CO.	Liberia		100	%
KALAMATA SHIPPING CORPORATION	Liberia		100	%
NAVARINO MARITIME CORPORATION	Liberia		100	%
MARINA MARITIME CORPORATION	Liberia		100	%
COSTACHILLE MARITIME CORPORATION	Liberia		100	%
ANGISTRI CORPORATION	Liberia		100	%
TAKOULIS MARITIME CORPORATION	Liberia		100	%
FANAKOS MARITIME CORPORATION	Liberia		100	%
MARVISTA MARITIME INC.	Liberia		100	%
SEA ELF MARITIME INC.	Liberia		100	%
HONAKER SHIPPING COMPANY	Liberia		100	%
CAPETANISSA MARITIME CORPORATION	Liberia		100	%
WEST END SHIPPING CO. LTD.	Liberia		100	%
RENA MARITIME CORPORATION	Liberia		100	%
ALEXIA TRANSPORT CORP.	Liberia		100	%
CARAVOKYRA MARITIME CORPORATION	Liberia		100	%
MARATHOS SHIPPING INC.	Liberia		100	%
BULLOW INVESTMENTS INC.	Liberia		100	%
MONTES SHIPPING CO.	Liberia		100	%
KELSEN SHIPPING CO.	Liberia		100	%
MAS SHIPPING CO.	Liberia		100	%
GUILDMORE NAVIGATION S.A.	Liberia		100	%
VOLK SHIPPING CO.	Liberia		100	%
URIZA SHIPPING S.A.	Liberia		100	%
DAVIES SHIPPING CO.	Liberia		100	%
ERIN SHIPPING CO.	Liberia		100	%
BROOKES SHIPPING CO.	Liberia		100	%
IDEA SHIPPING CO.	Liberia		100	%
DOME SHIPPING CO.	Liberia		100	%
RONDA SHIPPING CO.	Liberia		100	%


Name of Subsidiary	Jurisdiction of Incorporation	Proportion of Ownership Interest
ROYCE SHIPPING CO.	Liberia		100	%
MABEL SHIPPING CO.	Liberia		100	%
WARRICK SHIPPING CO.	Liberia		100	%
CONVEY SHIPPING CO.	Liberia		100	%
SIMONE SHIPPING CO.	Liberia		100	%
CAGNEY SHIPPING CO.	Liberia		100	%
MADELIA SHIPPING CO.	Liberia		100	%
ADELE SHIPPING CO.	Liberia		100	%
BASTIAN SHIPPING CO.	Liberia		100	%
CADENCE SHIPPING CO.	Liberia		100	%
EDITH SHIPPING CO.	Liberia		100	%
DAINA SHIPPING CO.	Liberia		100	%
GAVIN SHIPPING CO.	Liberia		100	%
FAY SHIPPING CO.	Liberia		100	%
HALEY SHIPPING CO.	Liberia		100	%
IDRIS SHIPPING CO.	Liberia		100	%
JODIE SHIPPING CO.	Liberia		100	%
KAYLEY SHIPPING CO.	Liberia		100	%
MANSEL SHIPPING CO.	Liberia		100	%
NICKY SHIPPING CO.	Liberia		100	%
ODETTE SHIPPING CO.	Liberia		100	%
PERCY SHIPPING CO.	Liberia		100	%
LEROY SHIPPING CO.	Liberia		100	%
UNDINE SHIPPING CO.	Liberia		100	%
TERANCE SHIPPING CO.	Liberia		100	%
QUENTIN SHIPPING CO.	Liberia		100	%
RAYMOND SHIPPING CO.	Liberia		100	%
SANDER SHIPPING CO.	Liberia		100	%
VIRNA SHIPPING CO.	Liberia		100	%
VALLI SHIPPING CO.	Liberia		100	%
WALDO SHIPPING CO.	Liberia		100	%
JOYNER CARRIERS S.A.	Liberia		100	%
LINDNER SHIPPING CO.	Liberia		100	%
FINCH SHIPPING CO.	Liberia		100	%
TIMPSON SHIPPING CO.	Liberia		100	%
SPEDDING SHIPPING CO.	Liberia		100	%
COSTAMARE VENTURES INC.	Marshall Islands		100	%
CROY HOLDINGS INC.	Marshall Islands		100	%
COSTAMARE PARTNERS GP LLC	Marshall Islands		100	%
COSTAMARE PARTNERS LP	Marshall Islands		100	%
COSTAMARE PARTNERS HOLDINGS LLC	Marshall Islands		100	%

EXHIBIT 12.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Konstantinos Konstantakopoulos, certify that:


	1.		I have reviewed this annual report on Form 20-F of Costamare Inc.;

	2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

	4.		The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.


Dated: April 27, 2016
By:		/s/ K ONSTANTINOS K ONSTANTAKOPOULOS

		Name: Konstantinos Konstantakopoulos
		Title: Chief Executive Officer

EXHIBIT 12.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Gregory Zikos, certify that:


	1.		I have reviewed this annual report on Form 20-F of Costamare Inc.;

	2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

	4.		The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.


Dated: April 27, 2016
By:		/s/ G REGORY Z IKOS

		Name: Gregory Zikos
		Title: Chief Financial Officer

EXHIBIT 13.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report on Form 20-F of Costamare Inc., a corporation organized under the laws of the Republic of The Marshall Islands (the “Company”), for the period ending December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


	1.		the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	2.		the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the report.

The foregoing certification is provided solely for purposes of complying with the provisions of Section 906 of the Sarbanes-Oxley Act of 2002 and is not intended to be used or relied upon for any other purpose.


Date: April 27, 2016
By:		/s/ K ONSTANTINOS K ONSTANTAKOPOULOS

		Name: Konstantinos Konstantakopoulos
		Title: Chief Executive Officer

EXHIBIT 13.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002


	1.		the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	2.		the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the report.


Date: April 27, 2016
By:		/s/ G REGORY Z IKOS

		Name: Gregory Zikos
		Title: Chief Financial Officer

EXHIBIT 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement on Form F-3 (No. 333-191833) of Costamare Inc. of our reports dated April 27, 2016 with respect to the consolidated financial statements of Costamare Inc. and the effectiveness of internal control over financial reporting of Costamare Inc. included in this Annual Report (Form 20-F) for the year ended December 31, 2015.

/s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.

Athens, Greece
April 27, 2016