TERMS AND CONDITIONS

These Purchase Order–Master Terms and Conditions (“Ts&Cs”) apply to each purchase order (“PO”) of GereMarie Corporation (“Buyer”) to a supplier (“Seller”). SELLER, BY FULFILLING BUYER’S PO, ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS THESE Ts&Cs AND AGREES THAT BUYER’S PO WILL BE GOVERNED BY THESE Ts&Cs.

1. General: Any PO between Buyer and Seller is placed subject to these Ts&Cs (and subject to any additional warranty agreement between the parties, if applicable). Buyer may specify additional terms regarding a particular PO in such PO. Any different terms proposed by Seller will not be binding unless Buyer agrees to them in writing. Seller will be bound by the terms of Buyer’s PO when it accepts the PO. The terms in Buyer’s PO shall prevail over any contrary or inconsistent terms of Seller.

2. Price: Seller shall furnish the goods and services at the prices stated in the PO. The prices can only be changed by an amendment to that PO. If the PO is placed on an open price basis, then the prices shall not be higher than Seller’s lowest prevailing prices on the date of that PO for similar goods or services in comparable quantities.

3. Assignment: Seller may not assign a PO without the prior written consent of Buyer, except that claims for monies due or to become due may be assigned by Seller, provided Seller supplies Buyer promptly with a copy of any such assignment. Payment to an assignee will be subject to set off or recoupment against any current or future claim(s) which Buyer may have against Seller. Buyer reserves the right to make direct settlements or adjustments in price with Seller without notice to any assignee. A provision setting forth these rights of Buyer shall be included in any assignment by Seller.

4. Subcontracts: Except for goods proprietary to Seller, none of the work to be performed pursuant to a PO may be subcontracted without Buyer’s prior written consent. However, Seller’s obtaining parts and materials normally purchased by Seller shall not be construed as a subcontract.

5. Facilities; Special Tools and Equipment: Seller shall procure all facilities necessary for the timely performance of a PO. Except as provided in Section 6, all special tools and equipment shall be furnished by, and at the sole expense of, Seller and shall be kept in good condition for follow-on orders, and when necessary, shall be replaced by Seller without expense to Buyer.

6. Buyer’s Property and Insurance:
(a) All materials and all special tools and equipment furnished by Buyer to Seller shall remain Buyer’s property. In addition, all special tools and equipment either: (i) identified as a reimbursable item in the PO; or (ii) specifically acquired for performance of a PO, with the cost being fully amortized or otherwise recovered in the price of the goods to be delivered, shall upon such payment become Buyer’s property. All of Buyer’s property shall be: (i) used only in filling orders for Buyer; (ii) kept segregated and clearly marked as Buyer’s property; (iii) maintained in good condition (allowing for normal wear and tear); and (iv) surrendered to Buyer upon demand. Seller shall not be responsible for replacing bailed materials satisfactorily accounted for in the manufacturing process. (b) While Buyer-owned property is in Seller’s possession or control, Seller will be responsible for all loss or damage to it and will, at its sole expense, maintain extended insurance coverage in an amount sufficient to cover the replacement cost of it.

7. Packaging and Shipping:
Seller will pack all goods for shipment to Buyer so as to secure safe delivery and ship them at the lowest transportation rates to minimize costs, unless otherwise stated in the PO. No charge will be allowed for packing, crating or carriage unless stated in the PO. Each container must be marked to show Buyer’s order number and contain a packing sheet showing Buyer’s order number, Buyer’s part number and a full product description of each item, unless other instructions are provided by Buyer. Seller will insure the declared value on any shipment that is F.O.B. Origin. Seller will honor all routing instructions, which may be indicated on the PO, on file with Seller or communicated verbally by Buyer.

8. Invoices: Individual invoices referencing Buyer’s order number, Buyer’s part number, a full product description of each item and a due date must be issued for each shipment applying against a PO. The invoice due date for any goods shipped ahead of schedule will not be until the date specified for their delivery. Freight and other charges must be shown on the invoice.

10. Inspection and Acceptance: All goods and services will be subject to final inspection and acceptance by Buyer, notwithstanding prior payment, which shall not constitute acceptance. Buyer may inspect goods and services during or after manufacture or performance, notwithstanding the terms of delivery or payment or that title has not yet passed to Buyer. Buyer’s approval of designs furnished by Seller shall not release Seller of its obligations under the PO or as contained herein. Buyer may reject and return at Seller’s expense any item which does not conform to Buyer’s PO. After notification to Seller that goods are nonconforming, all risk of loss with respect to such goods shall be in Seller. Acceptance of any part of a PO shall not bind Buyer to accept future shipments or services and shall not be deemed a waiver of Buyer’s right to terminate a PO or to return nonconforming goods. Such remedies shall be in addition to any other remedies available to Buyer.

11. Changes:
(a) By written Change Order, Buyer may at any time unilaterally: (i) suspend work in whole or in part for a stated time period; or (ii) make changes in one or more of the following elements: designs, drawing, or specifications; method of shipment or packing; place or time of delivery; or quantities to be furnished; however, any acceleration in the delivery date requires Seller’s advance consent. If such suspension or change causes an increase or decrease in the cost of, or the time required for furnishing the work, an equitable adjustment shall be made in the PO price, delivery schedule, or both. This Section shall not excuse Seller from proceeding without delay in performing a PO as changed. (b) Technical assistance or advice offered by Buyer shall not constitute a change under this Section or waiver of Seller’s existing obligations. Any change, waiver, or amendment to a PO must be in writing and signed by an authorized representative of Buyer’s purchasing department.

12. Termination:
(a) For cause: Buyer reserves the right to terminate a PO, or any part thereof, and to cancel all of or part of the undelivered portion of a PO by written notice to Seller, if Seller: (i) fails to deliver the goods or services by the time specified in the PO; (ii) fails to deliver goods or services that meet the required specifications, or otherwise breaches any of the terms of the PO, including the warranties; (iii) so fails to make progress in the work as to endanger performance; (iv) becomes insolvent; (v) files a voluntary petition in bankruptcy; (vi) becomes the subject of an involuntary petition to have Seller declared bankrupt, unless the petition is vacated within thirty days after filing; or (vii) executes any assignment for the benefit of creditors. Buyer shall have no obligations to Seller in respect of the cancelled portion of the PO and Buyer’s liability shall be limited to payment for the delivered portion of the PO at the rate specified on the face of it (reflecting quantity prices as though the PO had gone to full completion). If as a result of default in performance by Seller, the PO is terminated in whole or in part and it is necessary to procure any goods or services elsewhere, then Seller will be liable for any re-procurement charges, including incidental and consequential damages, which exceed the amount which would have been due if Seller had satisfactorily completed the PO. These remedies shall be cumulative and additional to any other remedies available to Buyer. (b) For convenience: Buyer may, for its convenience, terminate work under the PO in whole or in part at any time by giving notice to Seller in writing. Seller will thereupon immediately stop work on the PO referenced or the terminated portion of it and notify any subcontractors to do likewise. Seller will be entitled to: (i) reimbursement for its actual costs incurred up to and including the date of termination, such costs to be determined in accordance with recognized accounting principles; and (ii) a reasonable profit on the work done prior to termination at a rate not exceeding the rate used in establishing the original purchase price; provided, however, if it appears Seller would have sustained a loss on the Order, no profit shall be allowed and reimbursement of costs shall be adjusted to reflect the indicated rate of loss. In no event shall Buyer’s obligations as a consequence of the termination exceed the PO price of the items terminated. At its election, Buyer shall have the right to direct the disposition of work-in-process, parts and materials included in Seller’s reimbursed costs; Seller will comply with and be reimbursed for reasonable expenses incurred in effecting Buyer’s directions. Prior to settlement of Seller’s termination claim, Seller shall make available for inspection: (i) all inventory included in the claim; and (ii) all directly pertinent books, records and documents relating to claimed costs. (c) If a PO is totally or partially terminated by a “for cause” notice and it is determined that Seller’s failure is an excusable failure or delay as defined below, then such notice shall be deemed to have been issued “for convenience” and the rights of the parties shall be governed by paragraph (b) above.

13. Excusable Failure or Delays: Except with respect to defaults by subcontractors, Seller shall not be liable for failures or delays that arise out of causes beyond its control and without its fault or negligence. If the failure or delay is caused by the default of a subcontractor and arises out of causes beyond the control of and without the fault or negligence of Seller and subcontractor, then Seller shall not be liable to Buyer unless the goods or services to be furnished by the subcontractor are obtainable from other sources in time to permit Seller to meet the PO requirements. As a precondition to being excused, Seller shall give immediate written notice to Buyer, setting forth the cause, when Seller has reason to believe that deliveries will not meet the schedule.

14. Liability for Injury: (a) Seller shall indemnify, hold harmless and defend Buyer against all loss and liability (including attorneys’ fees, court costs and allocable in-house counsel legal expenses) on account of claims of personal injury, death, and property damage resulting from: (i) any act or omission of Seller (including its agents, employees and subcontractors) in the course of performing the PO; or (ii) the handling, display, sale, and consumption or distribution of Seller’s products (including, but not limited to, any repair or maintenance service). (b) At its own expense, Seller shall obtain and maintain during the term of the relationship between the parties the following insurance: Commercial General Liability insurance with a limit of not less than $2,000,000 per occurrence, combined single limit for bodily injury and property damage, including $2,000,000 limit of liability for products and completed operations. The policy shall also provide blanket contractual liability coverage insuring all written contracts. Rec Boat Holdings, LLC and its parents, subsidiaries and affiliates (collectively the “RBH Entities”) shall be named as additional insureds under this policy. If Seller has possession or control of Buyer-owned property, the following insurance shall also be obtained and maintained during the term of this agreement: All risk property coverage for non-owned property in Seller’s care, custody and control subject to 100% replacement cost. Buyer shall be named a loss payee under this policy with respect to such property. If Seller’s employees will be entering Buyer’s property, the following insurance shall also be obtained and maintained during the term of this agreement: Statutory Workers compensation coverage insurance in accordance with the state(s) in which the services hereunder are performed and Employers Liability with limits not less than $1,000,000/$1,000,000/$1,000,000. The insurance company shall waive subrogation against the RBH Entities and such waiver shall be expressed on the certificate of insurance. If Seller will be providing any transfer of product to or from Buyer’s property, the following insurance shall also be obtained and maintained during the term of this agreement: Automobile Liability coverage with $1,000,000 combined single limit for bodily injury and property damage per occurrence and Transit insurance for all risks of physical damage to the product in an amount equal to the replacement cost of the product. All required insurance coverage must comply with the following: All policies must be underwritten by an insurance company rated A- or better by Best’s Rating Guide. All policies must provide thirty (30) days’ advance notice of cancellation. Coverage provided shall be primary and non-contributory with any other insurance available to the RBH Entities. A certificate of insurance listing all required coverage outlined above will be provided to Buyer upon execution of the Ts&Cs.

15. Intellectual Property: (a) Seller agrees to indemnify and hold harmless Buyer, its customers, and agents from any loss or liability incurred on account of any alleged infringement of any patent or other intellectual property with respect to goods furnished under the PO, provided that such goods are not manufactured pursuant to Buyer’s design. Seller also agrees that it will, at its own expense, defend any action or claim, whether against Buyer or its customers, in which infringement is alleged, provided Seller is duly notified as to such action or claim. If a delivered item or any part thereof is held to constitute an infringement and its use is enjoined, Seller shall, at its own expense, either procure for Buyer the right to continue using the item or replace same with a non-infringing item or modify the item so that it becomes non-infringing, or if the foregoing options are not possible, grant Buyer a credit for the purchase price of such item.

(b) Where performance under a PO includes experimental, developmental, or research effort and such work is paid for in whole or in part as such by Buyer, Seller agrees to disclose to Buyer all processes, know-how, or trade secrets resulting therefrom and on request, to assign Buyer each invention and property right resulting therefrom.

16. Warranties: The goods and services covered by a PO are intended for the manufacture and sale of boats and other products in which Buyer has built a reputation for quality, and any defect in the goods or services may occasion special damage to Buyer. Seller acknowledges that it has had the opportunity to become familiar with Buyer’s products, manufacturing processes, and the manner in which Seller’s product will be handled and utilized. Seller warrants that all goods furnished under a PO will: (i) be free from defects in materials and workmanship; (ii) conform to the applicable specifications, drawings, samples or other descriptions; (iii) be free from defects in design except to the degree such goods are manufactured to Buyer’s design; (iv) be suitable for the intended purpose; (v) be of merchantable quality; and (vi) be free of defects in title. Seller further warrants that all services performed under a PO will be free from defects of workmanship. These warranties shall remain in effect for a period of time consistent with the warranty life normally offered by Seller and shall not be deemed to be exclusive. The benefits of these warranties shall accrue to Buyer’s customers and the retail purchasers of Buyer’s products and their assigns to the same extent they accrue to Buyer.

17. Notice of Labor Dispute: Seller shall immediately give notice to Buyer of any labor dispute which threatens to delay the timely performance of a PO.

18. Compliance With Applicable Laws:

(a) Seller hereby certifies that all goods and services will be furnished in compliance with all applicable Federal, State and local laws, including but not limited to, the Fair Labor Standards Act, the Occupational Safety and Health Act (OSHA) and the Toxic Substance Control Act.

(b) Equal Employment Opportunity: Seller will comply with all provisions of Executive Order 11246, as amended, and all implementing rules and regulations, if applicable.

19. Confidentiality:
(a) Seller will treat as confidential all specifications, drawings, blueprints, and other technical data supplied by or on behalf of Buyer. Seller further agrees to: (i) limit use of the aforementioned data to the performance of the specific PO; and (ii) limit disclosure to those employees necessary for the performance of the PO, unless prior written consent has been granted by Buyer to permit other use or disclosure. Seller shall, upon Buyer’s request or upon completion of the PO, promptly return all data supplied by Buyer and destroy any and all copies.

(b) Unless otherwise agreed to in writing by Buyer, all information disclosed by Seller to Buyer will: (i) be deemed to be disclosed as a part of the consideration for the PO; and (ii) not be deemed to be confidential or proprietary information.

20. Advertising: Seller shall not advertise a PO or any part of it without Buyer’s approval.

21. Taxes: Buyer shall not be liable for any Federal, State or local taxes unless separately stated on a PO and billed as a separate item. No sales or use tax shall be added when an exemption is indicated on the face of a PO.

22. Governing Law: A PO shall be construed in accordance with, and governed by, the laws of the State of Buyer’s business address without regard to its principles of conflict of laws.

23. Non-Waiver of Rights: The failure of Buyer to insist upon strict performance of any of these Ts&Cs with respect to a PO or to exercise any rights or remedies shall not be construed as a waiver of Buyer’s rights.

24. Entire Agreement: These Ts&Cs are intended by the parties as a final expression of their agreement, contain the entire understanding of the parties with respect to all POs (except for any additional warranty agreement between the parties, if applicable) and supersede all prior agreements and understandings, oral or written, with respect to such matters and is a complete and exclusive statement of the terms thereof (except for any additional warranty agreement between the parties, if applicable).

25. Headings: The headings at the beginning of each numbered section hereof have been inserted for ease of reference only and will not affect in any way the meaning or interpretation of these Ts&Cs.

26. Waiver and Amendment: No provision of these Ts&Cs may be waived or amended with respect to a particular PO unless in a written instrument signed by the Parties

Seller acknowledges that it has read and understands these Ts&Cs and that all POs of Buyer will be governed by these Ts&Cs, unless otherwise agreed to by the Parties.