Standard Terms of Purchase

The purchase of products (“Products”) by Custom Marine Inc. (hereinafter referred to as “Purchaser”) from seller (“Seller”) shall be governed by the terms and conditions in any written contract currently in effect between Purchaser and Seller covering such sale and all other terms contained herein which are not inconsistent with such contract. To the extent that the terms and conditions of such written contract are silent with respect to any matter addressed herein, these terms and conditions shall govern. If there is no such written contract, then Purchaser shall purchase such Products from Seller only upon the terms set forth herein.

1. Acceptance-Agreement.

a. Prompt acceptance of this order by signing and returning a copy is requested but, in any event, if Seller fails to accept this order in writing, any subsequent conduct by Seller, which recognizes this order shall constitute acceptance by Seller of this purchase order and all its terms and conditions.

b. Any terms proposed in Seller’s acceptance of Purchaser’s, offer which add to, vary form, or conflict with the terms herein are hereby objected to and rejected and Purchaser’s offer shall be deemed accepted by Seller without such additional terms and conditions.

c. This order is final, complete, and exclusive statement of the agreement between the parties and may not be modified, supplemented, explained or waived by parol evidence, Seller acknowledgements, a course of dealing or in any other way except by a written instrument executed by an authorized representative of both parties. Any references in this order to Sellers proposal or quotation are only to describe the materials or work covered hereby and do not constitute an acceptance of any terms set forth therein.

d. Any terms proposed by Seller which add to, vary from or conflict with the terms herein are objected to and rejected, but such rejection shall not operate as a rejection of Seller’s offer.

e. Supplier shall disclose any “conflict minerals” (as such term is defined below) used in the production of any product subject to this agreement, and, in the event such materials are used, shall submit, as applicable, either (i) its report filed with the Security and Exchange Commission under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection act, or (ii) a description reasonably acceptable to Buyer of measures taken to assure the appropriate sourcing and chain of custody of such materials. As used above, the term “conflict minerals” shall have the meaning ascribed to it under Dodd-Frank and shall include, without limitation, columbite-tantalite (coltan), cassiterite, gold, wolframite or their derivatives, or any other mineral or its derivatives determined by the US Secretary of State to be financing conflict in the Democratic Republic of the Congo.

2. Performance by Seller.

a. Time is of the essence for this order and is essential it be performed and filled on the specified date(s) and that the work progress in a timely fashion.

b. Seller warrants that material and work furnished hereunder shall be of the highest grade and quality unless otherwise specified and shall meet all standards of the Occupational Safety and Health Act of 1970 (OSHA) and all applicable state and local safety and health requirements. At Purchaser’s option, any part of the material or work not complying with the requirements hereof, expressed or implied, may be returned at Seller’s risk, and expense including transportation both ways, for prompt correction of defects. Payment by Purchaser shall not constitute acceptance of waive any rights of Purchaser hereunder.

c. This order is issued to Seller in reliance on Seller’s personal performance and Seller may not assign this order or the partial payment of any sums due hereunder or subcontract any substantial part of the performance or work other than for standard commercial supplies.

(d) Seller warrants that it shall comply with all applicable Federal, state, and local laws including the Fair Labor Standards Act of 1938, Executive Order 11246, as amended [41 CFR 60-1.4(a)], Section 503 of the Rehabilitation Act, as amended [41 CFR 60-741.5(a)], Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended (38 U.S.C. 4212) (VEVRAA) [41 CFR 60-300.5(a)], and Title VII of the Civil Rights Act of 1964, including amendments and regulations issued pursuant thereto and this order hereby incorporated by reference all provisions required by said laws and regulations to be included herein. These regulations prohibit discrimination against qualified individuals based on their status as protected veterans or individuals with disabilities, and prohibit discrimination against all individuals based on their race, color, religion, sex, sexual orientation, gender identity or national origin. Moreover, these regulations require that covered prime contractors and subcontractors take affirmative action to employ and advance in employment individuals without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability or veteran status.

e. Seller agrees to exculpate, defend, indemnify and hold harmless the Purchaser and its customers from and against all claims, liabilities, lawsuits, expenses (including attorneys fees and other defense costs) and penalties, including those based on Purchaser’s or its’ customer’s negligence which arise directly or indirectly, out of any of the following: (i) personal injury or death or property damage or destruction arising out of alleged defects in material, workmanship or design of material or work furnished hereunder; (ii) violations of OSHA, state or local safety or health requirements arising out of the use of resale of material or work furnished hereunder, (iii) personal injuries or death of Seller or Seller’s agents, employees or subcontractors personnel and damage to or destruction of Seller’s or its’ subcontractors property; and (iv) the infringement by material or work furnished hereunder of any United States or foreign patent, trademark or copyright.

f. If contract requires Seller to perform work on Purchaser’s property, as long as this agreement is in force, Seller shall maintain at its sole cost, the following type of insurance with insurers acceptable to Purchaser:

• i. Comprehensive General Liability – insurance with a combined single limit of $1,000,000 per occurrence with a minimum aggregate limit of $2,000,000. The policy shall include products/completed operations, contractual, broad form property damage, and contractorprotective coverage. The policy shall include a Cross Liability provision and coverage shall be on an “occurrence” basis.
• ii. Workers’ Compensation/Employers Liability – insurance with the following limits: Workers’ Compensation – Statutory, Employers Liability – $100,000 per occurrence
• iii. Vehicle Liability – insurance to cover property damage or bodily injury to third parties as a result of the use of any Contractor’s vehicles. The policy shall have a minimum limit of $1,000,000 per occurrence.

All the insurance policies shall provide a wavier of subrogation in favor of Purchaser. In addition, the general liability policy shall name Purchaser as an additional insured. Any sub-contractors employed by the Contractor shall maintain the same level of insurance required of Contractor. Alternatively, Contractor’s insurance policies may be extended to cover Sub-Contractor. Prior to the inception of any work under this agreement, Contractor shall provide renewal certificates to Company as long as this agreement is in force. Such certificates shall specify that Purchaser shall be given thirty (30) days notice prior to cancellation or material change of any of the required insurance policies. If required, Contractor shall provide Company with copies of the requested insurance policies.

3. Certain Charges or Expenses Negated.

Unless otherwise specifically provided herein (i) no charges for transportation, packing, crating, storage or containers shall be allowed, (ii) Seller shall pay and the price includes all applicable sales and similar type taxes which are not imposed by law on the Purchaser, and (iii) any information or data disclosed or furnished to Purchaser by Seller hereunder shall be deemed sold as part of the price hereof, non-proprietary and free of all restrictions whatsoever.

4. Quality & Warranty.

Seller agrees to provide goods in accordance with the latest version of Purchaser’s released document including, but not limited to, all critical dimensions and tolerances unless otherwise agreed to in writing. Seller expressly warrants that all goods covered by this purchase order shall be fit and sufficient for the purpose intended, merchantable and free from defects.

5. Inspection/Rejection.

All goods shall be subject to final inspection and acceptance or rejection by Purchaser after delivery, notwithstanding prior payment, it being understood that payment shall not create any presumption as to final inspection not constitute acceptance. Goods rejected and goods supplied in excess of quantities ordered hereunder may be returned to Seller at its expense and, in addition to Purchaser’s other rights, Purchaser may charge Seller all expenses or unpacking examining, repacking and reshipping such goods.

6. Purchaser’s Property.

a. Purchaser retains all rights and title to materials, tools, equipment, drawings, designs, specifications and technical data furnished to Seller for use with this order and the same shall be treated as Purchaser’s confidential information, shall be used by Seller only to complete this order and shall be returned upon completion or termination of this order, along with all copies or reproductions thereof, provided copies or reproductions shall be made only with Purchaser’s written consent.

(b) All materials, including tools, special dies and patterns, furnished or specifically paid for by the Purchaser, shall be the property of the Purchaser, shall be returned to Purchaser when no longer required hereunder, shall be used only to complete this order and shall be segregated and clearly identified as property of the Purchaser. Seller shall at no additional cost to Purchaser maintain all said items in good condition to the extent necessary for performance of this and future orders placed by Purchaser through a sound program of preventive maintenance. Seller shall establish, update and maintain a tooling inventory list, which will reflect current tooling status and in a timely manner notify Purchaser of damaged tooling in need of repair or replacement. Seller assumes all risk and liability for loss or damage thereto, except for normal wear, and agrees to permit inspection of inventory upon request of Purchaser. Seller shall insure Purchaser’s furnished or provided tooling, dies and patterns for its/their replacement cost, and shall cause its property insurer to name Purchaser as a loss payee. Purchaser shall provide Seller with a current certificate of insurance, when requested by Purchaser. Purchaser does not warrant the accuracy of equipment or tools which it furnishes and all work must be in strict accordance with specifications.

c. Seller agrees not to divulge information regarding Purchaser’s intellectual property to any third part without express permission of Purchaser provided said information is identified as sensitive.

7. Changes.

Purchaser may at any time by written notice make changes within the general scope of this order. If any such affects the time for or cost of performance, an equitable adjustment shall be made in the delivery schedule, purchase price, or both by agreement of the parties. All claims by Seller for adjustment under this clause must be asserted in writing and in full within thirty (30) days from the date of notification of the change or shall be waived. Nothing herein shall excuse Seller from proceeding with the order as changed. No extra shall be allowed except pursuant to written changes and this clause.

8. Cancellation/Termination.

a. Purchaser may at any time terminate this order, in whole or in part, by written notice, whereupon Seller shall terminate work pursuant to the terms of such notice. Seller shall promptly advise Purchaser of the quantities of applicable work and material on hand or purchased prior to termination and the most favorable position that Seller can make thereof, Seller shall comply with Purchaser’s instructions regarding disposition of such work and material. All claims by Seller based on such termination must be asserted, in writing and in full, within ninety (90) days from the date of notification of the termination, or shall be waived. Purchaser shall pay Seller the purchase order price of finished work and the cost to Seller (excluding profit or losses) of work in process and raw material; less however, (i) the agreed value of any items used or sold by Seller with Purchaser’s consent, and (ii) the reasonable value or cost (whichever I higher) of any defective, damaged or destroyed work or material and any items sold or used by Seller without Purchaser’s consent. Purchaser will make no payments for finished work, work in proves or raw material fabricated or procured by Seller unnecessarily in advance or in excess of Purchaser’s delivery requirements. The payment provided under this clause shall constitute Purchaser’s only liability in the event this order is terminated as provided herein. The forgoing provisions of this clause shall not apply to any termination by Purchaser for default of Seller or under the following provisions of this clause unless a arbitrator shall find such termination by Purchaser to be improper.

b. To the extent this order covers items normally carried in inventory by Seller (as distinguished from items specially made to Purchaser’s specifications), Purchaser shall have no liability for any termination of this order in whole or in part, prior to actual shipment and for any termination, within ten (10) days after receipt by Purchaser, its liability shall be limited to returning said items and reimbursing Seller for directs costs of handling and transportation.

c. Purchaser shall not be liable for failure to take delivery of material or work or render any other performance in the event fire, accidents, labor difficulties, governmental action, third party failures or any other conditions beyond Purchaser’s reasonable control render it commercially impractical for Purchaser to do so.

9. Termination for Cause.

Purchaser may terminate this purchase order, in whole or in part, if Seller makes late deliveries, delivers defective or nonconforming goods, fails to provide adequate assurance of future performance upon request or otherwise fails to comply with the terms herein. If Purchaser terminates this purchase order for cause, Purchaser shall not be liable to Seller for any amount but Seller shall be liable to Purchaser for any and all losses Purchaser sustained by reason of Seller’s default hereunder.

10. Termination of Blanket Orders.

The quantities specified in this purchase order represent the estimated annual purchase volume at the time the purchase order was placed. The Purchaser reserves the right to change these quantities on a quarterly basis based on current market conditions. The Purchaser is under not obligation to purchase the total estimated quantities or total dollars, and may at any time terminate the purchase order. The Purchaser’s liability with respect to such terminations shall be limited to the Seller’s actual cost to manufacture the order. These costs are limited to: (1) a maximum of one month of finished goods inventory, and (2) six months of raw material inventory. These costs will be reduced by any materials that can be returned to a supplier, utilized by the Seller to manufacture another customer order, or returned for salvage. For the purpose of calculating Purchaser’s liability: “months inventory” is defined as the remaining quantities to be purchased from the current submitted annual forecast, divided by the months remaining in that forecast.

11. Independent Contractor/Insurance.

If Seller’s employees or agents shall perform work on Purchaser’s premises in fulfillment of this purchase order, Seller agrees that such work shall be performed as an independent contractor. As long as this agreement is in force, Seller shall maintain at its sole cost, the following type of insurance acceptable to Purchaser:

a. Comprehensive General Liability – insurance with a combined single limit of $1,000,000 per occurrence with a minimum aggregate limit of $2,000,000. The policy shall include products/completed operations, contractual, broad form property damage, and contractorprotective coverage. The policy shall include a Cross Liability provision and coverage shall be on an “occurrence” basis.

b. Workers’ Compensation/Employers Liability – insurance with the following limits: Workers’ Compensation – Statutory; Employers Liability – $100,000 per occurrence.

c. Vehicle Liability – insurance to cover property damage or bodily injury to third parties as a result of the use of any Contractor’s vehicles. The policy shall have a minimum limit of $1,000,000 per occurrence.

All the insurance policies shall provide a waiver of subrogation in favor of Purchaser. In addition, the general liability policy shall name Purchaser as an additional insured.

Any Sub-contractors employed by Seller shall maintain the same level of insurance required of Seller. Alternatively, Seller’s insurance policies may be extended to cover Sub-contractor. Prior to the inception of any work under this agreement, Seller shall provide Purchaser with an insurance certificate(s) as evidence that the required insurance is in force. Seller will provide renewal certificates to Purchaser as long as this agreement is in force. Such certificates shall specify that Purchaser shall be given thirty (30) days notice prior to cancellation or material change of any of the required insurance policies. If required, Seller shall provide Purchaser with copies of the requested insurance policies.

12. Government Contracts.

If this order is for material or work under a governmental contract or subcontract, all contract provisions applicable hereto and required by law, order, regulation or Purchaser’s government contract or subcontract are hereby incorporated herein by reference as fully as if set forth herein in full. Where necessary to make the context of such provisions or clauses applicable to this order, the terms “Contractor”, “Contract”, and “Government” or “contracting Officer” (or terms of similar import) shall mean respectively Seller, this order, and Purchasers

13. Arbitration.

a. Binding Final Arbitration. Any controversy or claim arising under or in relation to these Terms and Conditions of Purchase, any agreement between the parties for the purchase and sale of Products, or the breach hereof or thereof, or the relations between Purchaser and Seller as to Products shall be finally settled by arbitration by a panel of three arbitrators appointed by the American Arbitration Association (unless the amount in dispute is less than $25,000, in which case there shall be only one arbitrator) in the City of Neenah, Wisconsin, administered by the American Arbitration Association in English, except as specified otherwise in these Terms and Conditions of Purchase, under the then applicable American Arbitration Association rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. In connection with any arbitration proceeding, neither Purchaser nor any third party shall be required to disclose to Seller any confidential technical or other information deemed by Purchaser to be sensitive competitive information and shall be required to disclose this type of information only under a strict confidentiality agreement that limits the use and disclosure of such information to the arbitrators, previously identified independent experts who are not in a position to profit from the information, and counsel for the parties, and only after any such arbitrator, expert, or counsel has agreed in writing to abide by the limitations on disclosure and not to use the information for any purpose other than the arbitration proceeding.

b. Limitation on Arbitration Remedies. THE ARBITRATORS SHALL HAVE NO POWER TO AWARD PUNITIVE, CONSEQUENTIAL, MULTIPLE, INCIDENTAL OR ANY OTHER DAMAGES IN EXCESS OF THE PURCHASE PRICE OF THE PRODUCTS AT ISSUE OR TO MODIFY THESE TERMS AND CONDITIONS OF PURCHASE IN ANY WAY.