The following terms shall always apply for all legal relationships between the company, Fr. Fassmer GmbH & Co. KG (here in after referred to as Fassmer) and the Client, including all and any future orders, provided that Fassmer itself does not appear as the client itself. Divergent agreements and subsidiary agreements are only valid if Fassmer has confirmed them in writing. The Client’s own Terms of Purchase are not relevant for the contractual relationship in any way what so ever even if Fassmer has not expressly opposed them.

I. Quotations
Quotations are always to be understood without obligation. Quotations, specification drawings and printed matter are approximate and not binding, unless expressly designated as binding. Fassmer reserves the proprietary right and copyright of cost estimates, drawings and other documents. They may not be disclosed to third parties.

II. Scope of Supplies
1. Fassmer’s written order confirmation shall govern the scope of supply. Subsidiary agreements as well as warranties of specific characteristics of the goods sold or of the structure shall be effective only if confirmed in writing.

2. Even after written order confirmation, Fassmer shall be entitled to effect changes in design if:

a) their necessity becomes obvious only in the course of execution of the order, or
b) they become necessary due to subsequent modifications of the regulations prescribed by classification societies, trade unions or other supervising authorities.

The Client will be notified beforehand of any material changes.

3. If this or subsequent wishes of the Client should result in work exceeding the scope described in the order confirmation (additional work), then Fassmer shall be entitled to adequate, additional remuneration.

4. Additional work will result in an extension of the agreed delivery period.

III. Prices
1. The prices are to be understood without any deduction for supplies and services ex Fassmer’s Building Yard. They do not include turn­over tax, packing, freight, postage and insurance costs.

2. Unless a firm price has been expressly agreed, Fassmer shall be entitled to reasonably increase the agreed price if there is an increase in labour and material costs after award of contract. This shall apply to contracts not coming under Paragraph 24, Clause 1, of the Law of Standard Business Conditions (AGB) only if a minimum of four months have expired between award of contract and contractual delivery date.

IV. Delivery Period
The agreed delivery period shall commence on the date of our written order confirmation. However, it will extend correspondingly without
resulting in any compensation claims against Fassmer if

a) essential technical or commercial details have to be stipulated or altered after award of contract;

b) the delivery of components or equipment items is delayed without any fault of Fassmer, or

c) unforeseen circumstances such as transport hold-ups, operational breakdowns or labour disputes at Fassmer or at subcontractors delay completion.

V. Ancillary Supplies
1. Ancillary supplies on the part of the Client have to be made free to Fassmer’s Building Yard at the installation times established by Fassmer. Unless otherwise agreed in writing, the Client shall bear the costs of insurance, installation, commissioning and trials.

2. The delivery period shall be extended correspondingly, if services to be provided by the Client are not rendered at the established times. Fassmer shall be entitled to give the Client one-week grace period. After expiration of said grace period Fassmer may, at its option, either install components procured by itself against charge of a reasonable extra price or exercise rights pursuant to Paragraph 326 of the German Civil Code (BGB).

3. Fassmer shall be liable for loss of or damage to components supplied by subcontractors only in case of gross negligence. The liability shall, to the exclusion of further claims, be limited to actual property damage; provided the conditions of Paragraph 24, Clause 1, of the Law of Standard Business Conditions are present.

VI. Passing of Risk
1. The risk shall pass to the Client at the time that the goods or the structure are handed over to the Client. If the goods or the structure are sent or delivered to the Client, then risk shall pass to the Client at that point in time when the goods and/or the structure leave Fassmer’s premises, i.e., even if dispatch is effected for account of the Client.

2. If the structure is damaged or destroyed prior to handing over or dispatch due to circumstances beyond Fassmer‘s control, then Fassmer shall, nevertheless, be entitled to payment for those parts of the work which it has completed until then. In this case, further claims by the Client shall be excluded.

VII. Payment
1. Payments shall principally become due net cash on the contracted due date. Cheques and bills of exchange will only be accepted on account of payment. In case of acceptance of bills of exchange, which Fassmer is not required to do, discount charges will be invoiced.

2. In case of counterclaims, if any, the Client may make setoffs or enforce liens only if such counterclaims are undisputed or established by a final court judgement.

3. If the Client fails to pay one or several instalments or asserts rights of retention or setoffs contrary to the above paragraph (event of default), then Fassmer shall be entitled, without prior notice, to stop the construction work temporarily and/or grant the Client an additional grace period of one week. If Fassmer stops the construction work temporarily, then it shall be entitled, even after payment of arrears, to postpone the construction work until other work which was started in the meantime has been completed. In this case, the delivery period shall be extended correspondingly; however, the due dates for further payments shall remain unaffected. If Fassmer grants the Client a grace period, then Fassmer shall be entitled to the rights pursuant to Paragraph 326 of the German Civil Code (BGB) after its expiration.

4. Interest shall be charged on sums in arrears in each instance thereof and without prior notice. The interest rate shall be 5 % above the respective basis interest rate in compliance with Paragraph 1 of the Discount Rate Transition Act dated 9 June 1998.

5. In the event of default, Paragraph 300 of the German Civil Code (BGB) shall apply correspondingly with regard to Fassmer’s liability and transfer of risk. Fassmer shall be entitled to charge reasonable costs of storage for storing the structure and/or goods or to store the structure and/or the goods at the expense and risk of the Client.

VIII. Reservation of Ownership
1. All supplied goods and structures shall remain the property of Fassmer (reserved goods) until full payment of all claims of Fassmer against the Client

2. As far as components supplied by the Client are used in the construction, these shall become equitable lien of Fassmer upon delivery. Unless owned by Fassmer pursuant to Paragraph 950 of the German Civil Code (BGB), the structure made from these components shall, likewise, become equitable lien of Fassmer. With respect to the structure, Subsection 1 shall apply correspondingly, i.e. even after delivery.

3. If the reserved goods are processed by the Client or by a third party on his behalf, Fassmer shall be considered as the manufacturer and the manufactured product shall become the property of Fassmer. If goods owned by third parties are used in the processing, then the co-ownership interest of Fassmer shall be determined by the proportion of the value of the reserved goods to the goods owned by third parties.

4. Goods owned and/or co-owned by Fassmer pursuant to the pre­ceding subsection shall be considered as reserved goods.

5. The Client shall be entitled to dispose of reserved goods within the ordinary course of business. He here-by assigns his claims from the sale of the reserved goods to Fassmer as a cover against the claims of Fassmer. If demanded by Fassmer, the Client shall be obligated to notify his buyers of the assignment as well as to give all necessary information to Fassmer for asserting assigned claims.

6. The Client shall not be entitled to pledge the reserved goods or to furnish them as security or collateral. The Client shall inform Fassmer immediately in the event of any attachment or seizure of the reserved goods.

7. Fassmer undertakes, at its own discretion, to release the securities to which it is entitled insofar as their value exceeds the unsettled claims by more than 25 %.

IX. Warranty
1. Defects that are provably traceable to faulty design, faulty material or faulty workmanship will be remedied free of charge at Fassmer during normal working hours.

2. If remedying of the defect fails, then the Client may demand reduction of the purchase price or rescission of sale, provided that no new structure is involved. Claims for damages are excluded, regardless of the legal grounds for the same, unless gross negligence on the part of Fassmer is present.

3. If the Client has work performed by outside companies for remedying defects, then Fassmer shall pay the costs involved only if it has given its written approval of such work and only for the amount which would have become payable if the work had been carried out at Fassmer’s own yard during normal working hours.

4. Fassmer will not assume any liability what so ever for engines and other larger built-in components of third party origin. Fassmer insofar hereby assigns its warranty claims against the supplier to the Client. In the case of contracts which do not come under Paragraph 24, Clause 1, of the Law of Standard Business Conditions (ABG), Fassmer shall assume, however, warranty in compliance with the above subsections in case the supplier of these components does not meet his warranty obligation within a reasonable period of time despite having been requested to do so.

5. If a certain speed or another kind of performance is warranted, then this warranty shall be limited to ascertaining the performance during acceptance in German waters, to the acceptance at the supply plant in the case of marine engines, with the usual tolerances, unless these have been expressly excluded.

6. If compliance with the standards of different classification societies is prescribed for the building a ship, and if there is a discrepancy between these standards, Fassmer shall be entitled to carry out building in accordance with the standards of that classification society which is responsible for the accepting the vessel without thereby allowing the Client to derive any rights against Fassmer.

7. The legal limitation periods shall apply to warranty claims. All warranty claims shall lapse if the Client fails to comply with his incumbent obligations to perform inspections and serve notice of defects, or if work on the product we have delivered is performed by others during the warranty period without Fassmer’s approval, or if structural alterations are carried out. The warranty on ship structures shall also lapse if the vessel changes hands, or if she suffers a fire or stranding.

X. Repair, Conversion
1. The Client must insure boats handed in for repair or conversion.

2. If damage to the boat, her accessories or equipment should occur during repair, then Fassmer shall be liable only in case of gross negligence. Liability shall be limited to actual property damage; provided that the requirements of Paragraph 24, Clause 1, of the Law of Standard Business Conditions are present.

3. Persons who are not staff members of Fassmer may set foot on the boat and building site during the period in Fassmer refit only with the express permission of Fassmer and, in each case, only by appointment with the foreman in charge. Only under this requirement and only in case of gross negligence shall Fassmer be liable for personal injury, if any.

4. Fassmer shall advise the Client on establishing the scope of repairs to the best of its knowledge. In so doing, Fassmer may rely on stipulations, if any, of a classification society or its authorised representative. In each case, however, the Client shall make his own decision regarding the scope of repairs and shall insofar bear the risk alone.

XI. Place of Performance and Jurisdiction
1. Berne/Motzen an der Weser is deemed place of performance for the mutual obligations. Bremen is agreed as the exclusive jurisdiction for all disputes including actions arising out of bills, cheques and documents. However, Fassmer is entitled to file lawsuits against the Client at the court having jurisdiction over the Client’s registered place of business. German law shall apply.

2. These General Terms and Conditions of Sale and Delivery shall have legal force for all subsequent

(As of December 2009)

General Terms and Conditions of Purchase

I. Scope
These conditions shall form the basis of the business relationship – also with regard to future business relations between Fassmer GmbH & Co. (here in after named „Buyer“) and the Supplier, insofar as Fassmer acts as the Buyer or Client. The General Terms and Conditions of the Supplier shall only apply when explicitly confirmed in writing by the Buyer.

II. Offers
The Supplier shall be under obligation to adhere exactly to the inquiry when producing offers and shall explicitly point out any deviations there­from. The drawing up of offers by the Supplier shall take place free of charge and shall not oblige the Buyer in any form or fashion. The Supplier shall be obliged to maintain his offers for two months, provided he does not issue another deadline upon submission of the offer.

III. Orders
Only orders submitted in writing shall be deemed valid. Verbal orders, orders placed by telephone as well as collateral agreements and supplementary amendments shall only be binding if and insofar as we, Fassmer GmbH & Co., have confirmed them in writing.

IV. Place of performance
The place of performance for both parties shall be Berne/Motzen. If
another destination is intended for delivery or performance, this shall then apply as the place of performance for the service of the Supplier.

V. Prices
1. All prices or unit prices named in the purchase order are fixed prices in Euros and, insofar as nothing to the contrary is expressed in writing, are inclusive of VAT.

2. The agreed prices shall exclude all additional claims, e.g. due to wage or material price increases, extraordinary construction site circumstances, technical improvements etc. and shall apply Franco destination inclusive of packing and goods in transit insurance (to be taken out by the Supplier), which shall comprehensively include crane/forklift truck risk right up to deposit at the place of assembly. The prices shall, without specific mention, also include all state-of-the-art property, components and devices that belong to the subject matter and which are not explicitly excluded. If, in exceptional cases, the Buyer assumes the forwarding costs or insurance costs himself, the Supplier must then, provided no particular instructions were given in this regard, endeavour to use the lowest-priced freight and insurance services. The place of performance shall not be affected by this.

3. Collection fees, arising in particular from the submission of documents, shall be assumed by the Supplier.

VI. Execution guidelines
Our binding drawings and parts lists shall be taken as the standard for execution purposes. Modifications to our drawings and deviations to the drawings or to the guidelines defined by us, particularly with regard to materials, workmanship and other manufacturing processes, may only be undertaken with our prior written consent.

VII. Modifications
The Buyer reserves the right to demand modifications. All modification requests received by the Seller shall be confirmed in writing to the Buyer. The Buyer has the right to claim for any price reductions arising from this. Price increases resulting from modifications can only be demanded by the Supplier if these were claimed prior to execution of the modified performance and were agreed to in writing by the Buyer.

VIII. Involvement of third parties
The Supplier’s obligations may not be transferred to third parties with­out the prior written consent of the Buyer. If such consent is present, the Supplier shall be responsible for ensuring orderly fulfilment of the obligations assumed by the third party. The Supplier shall be liable for sub-suppliers and sub-contractors in accordance with § 278 BGB (German Civil Code). Manufacturing and work carried out by the Supplier may not be contracted out to third parties without the prior written consent of the Buyer.

IX. Delivery and manufacturing dates
1. Delivery and manufacturing dates shall be calculated from the date of ordering and are binding.

2. Insofar as the Supplier is obliged to provide ready-for-use assembly, the trial production and subsequent final start-up shall take place within the deadline.

3. If the Supplier is not able to meet the deadline, he shall then be obliged to immediately inform the Buyer as to the reasons for not meeting the deadline as well as the prospective length of time by which the deadline shall be exceeded, even if the Supplier is not responsible for the delay. Should the Supplier violate this obligation, he shall be held liable as per clause 4. This shall also apply in the case of exceeding a deadline that he is not responsible for.

4. If the deadline is not met, the Supplier shall be held liable for all damages incurred by the Buyer as a result of the delay. For the rest, the statutory regulations shall apply with regard to liability. Any agreed contractual penalty in the case of delayed performance shall not be added to the damage claims of the Buyer. Notwithstanding § 341 para. 3 BGB (German Civil Code), the contractual penalty shall also be paid if no reservation is issued by the Buyer upon receipt of performance.

X. Termination by the Buyer
Should the Buyer make use of a statutory or contractual termination opportunity, the Supplier shall then receive a portion of the price corresponding to the costs arising for which he can account. The Supplier shall not have the right to claim damages for lost earnings. The same shall apply in the case of a partial termination. The claiming and charging of damages by the Buyer shall not be excluded or limited by this.

Xl. Delivery notes and invoicing
1. Delivery notes in triplicate shall be immediately sent to the Buyer on the date of despatch and shall include the order and job number as well as the date of order and the gross and net weight. Delivery shall be signed for by means of a duplicate consignment note.

2. Damages and costs arising from non-adherence to the packaging and shipping instructions of the Buyer shall be borne by the Supplier.

3. An invoice with specific statement of VAT shall be produced in triplicate for the entire scope of an order. If services are billed based on size or labour costs, then all documentation (size lists or time sheets confirmed by the Buyer) required for the purposes of a regular audit must be enclosed. If these documents are not available in full, the invoice amount shall not be due for payment.

XII. Payment
1. Insofar as nothing to the contrary is stated on the order form, payment shall take place in the form specified by the Buyer 14 days after delivery or performance and due date of the invoice with a cash discount of 3 % or net after 30 days. In the case of early delivery or performance, the deadline shall still be calculated as per the agreed delivery date.

2. Advance payments to be made by the Buyer must be made to this suitable bank guarantee until the delivery or performance obliga­tions are fulfilled entirely by the Supplier. Advance payment shall not be due unless said obligations are fulfilled in their entirety. Completion deadlines shall remain unaffected by this.

XIII. Defect claims, liability, notice of defects
1. The Supplier shall assume warranty for the perfect state and aptness of the delivery item for its usual and, subsequent to the order, intended purpose. He shall also assume warranty for ensuring that the delivery item exhibits the guaranteed characteristics and that the property, components or devices are state-of-the-art and ad­here to all applicable statutory and official guidelines at the time of delivery. This shall also include safety and accident-prevention guidelines.

2. The statutory period of limitation shall apply for defect claims. The statutory period of limitation shall commence on the date in which the delivery item … or the entire facility, if the delivery item is de­signated as such, is finally started up following successful trial runs by the Buyer or his Customer. In the case of deliveries and services for ships, the period of limitation shall commence when the ship is delivered to its Customer at the dockyard or, in the case of ship repairs, when the ship resumes service.

3. The period of limitation shall be suspended by the notice of defects or by the subsequent performance requests in accordance with clause 4, or by the recission declaration or by the exercise of the right to claim a reduction in accordance with clause 5. In the case of subsequent performance requests the deadline shall then start again if the Supplier rejects the subsequent performance in writing or declares it completed.

4. If the delivery item does not meet the requirements pursuant to clause 1, the Buyer can, if he chooses to do so, demand subsequent performance in the form of exchange of defective parts free of charge, on-site repair free of charge or supply of a part free of defects. In each case all costs of subsequent performance, including transport costs and labour costs, shall be borne by the Supplier, even if subsequent performance must be carried out in foreign ports or at sea. For parts exchanged or repaired by the Supplier, the period of limitation shall commence again from the date when operation was recommenced.

5. The Buyer shall be entitled to withdraw from the agreement or demand a reduction in price in place of subsequent performance if the subsequent performance is delayed or if the same or some other defect is observed following subsequent performance or a new delivery. No immediate notice of defects shall be required in the case of abortive subsequent performance.

6. In urgent cases the Buyer can rectify a defect himself or have it rectified by a third party at the Supplier’s expense.

7. In each case the Supplier – even when not at fault – shall be liable for all immediate and collateral damage arising from defects or the failure of guaranteed property.

XIV. Industrial property rights
1. The Supplier shall also be liable for all damage accrued by the Buyer or his Client as a result of violating third-party rights due to the use or the sale of the delivery or performance. Within this context, the Supplier is obliged to exempt the Buyer and his Client from all third-party claims.

2. Should the Supplier produce drafts, designs, illustrations, models or other representations for the Buyer, then an exclusive free-of-charge right of use unlimited in time shall be issued along with the handover of such items. The Supplier also now agrees to a free-of-charge transfer of this right to third parties. This shall also apply if the production of drafts, designs etc. represents the main performance of the supplier.

XV. Designs, inspections
1. All designs, technical data and information made accessible to the Supplier by the Buyer or his Client shall be kept secret and returned of one’s own accord upon completion of the task. They may only be used by the Supplier for the purposes of executing the order; they may not be used for other purposes.

2. Should the production of drawings or other documents be necess­ary over and above the drawings and data provided by the Buyer, the Supplier shall accept these without extra payment. The drawings shall be returned by the Buyer free of charge upon completion of the task.

3. For the rest, the Supplier shall undertake to hand over to the Buyer all necessary documents such as operating manuals, drawings etc. upon handover of the delivery. These documents shall be up-to-date and, if necessary, in the language requested by the Buyer.

4. Unless explicitly demanded otherwise, the relevant DIN (German Institute for Standardization) norms, VDE (German Association for Electrical, Electronic & Information Technologies) and VDI (The Association of German Engineers) guidelines and safety guidelines of the German authorities and trade associations shall be observed for all deliveries and performances. In the case of delivery items requiring acceptance - boilers, pressure vessels etc. the Supplier shall arrange an installation and pressure test to be carried out by the TÜV (German Technical Monitoring Association) and present the mandatory test certificate prior to start-up.

5. The Supplier shall guarantee the provision of spare parts at commercially available conditions and prices for the duration of the normal service life of the delivery item.

6. The Buyer reserves the right to inspect the delivery items during production or prior to despatch from the Supplier. The inspection may include the quality of the materials used, accuracy of measurements and other qualities of the produced parts as well as adherence to the production guidelines. The Supplier shall be obliged to allow the Buyer to carry out the measures necessary to execute these inspections. Such inspections shall, however, not be con­sidered as acceptance and do not affect the performance and subsequent performance obligations of the Supplier.

XVI. Reserved goods
The Supplier shall undertake to supply goods and materials free of all third-party rights. In the case of reserved goods on the part of the Supplier, the Buyer shall be authorised to use them within the context of his business activities.

XVII. Product liability
1. If damage claims are submitted against the Buyer – regardless of legal basis – due to a product defect, the Supplier must exempt the Buyer therefrom unless the Supplier‘s performance is unsatisfac­tory or is flawed by a product defect.

2. If such a product defect is established, the Supplier shall be obliged, if requested to do so by the Buyer, to carry out at its own cost the measures necessary to remedy the product defect – even if no damage has occurred as of that time. Clause XIII 5) applies correspondingly.

3. The claims against the Supplier from clauses 1 and 2 shall stand even if defect claims have already been time-barred due to the defect caused by the product flaw.

XVIII. Unforeseen events
The Buyer shall be authorised to withdraw from the contract, regardless of further-reaching statutory rights to withdrawal or termination, provided that the designated purpose of the delivery or performance is impossible or infeasible due for economic reasons.

XIX. Assignment of claim
Supplier claims against the Buyer shall only be assigned to third parties with the prior written consent of the Buyer.

XX. Legal venue
The exclusive legal venue for both parties, also for cheque-bill exchange procedure claims, shall be Bremen, to the extent that the Supplier is a registered trader. The Buyer shall however be entitled to bring action against the Supplier before the court having jurisdiction for him.

The laws of the Federal Republic of Germany shall exclusively apply to all legal relations between the Supplier and the Buyer - to the exclusion of the UN law on sales (CISG).

(As of December 2009)