General Terms and Conditions of Repairs from MPS Marine - Parts & Service GmbH

§1 (General provisions)

These General Terms and Conditions (TGTCR) shall apply to repairs and/or

conversion of vessel, her engines, equipment and appurtenances (“Vessel”) as well

as any other works performed on the vessel or on any part thereof, in connection

with a contract (‘’Contract’’) concluded between MPS Marine-Parts & Service GmbH

(‘’Contractors’’) and the owner or disponent owner of the Vessel (‘’Owner’’),

collectively referred to as the Parties to the Contract (‘’ the Parties’’). Any provisions

of the Contract which differ from these TGTCR shall be binding as far as they have

been agreed in writing between the Parties.

§2 ( Quality of works )

Any repairs to be performed in accordance with good repair practice, existing

technical possibilities and Owners’ requirements, in such a way as to satisfy any his

reasonable expectations, within time prescribed by the Contract (‘’Date of Works’


§3 (Latent defects of the Vessel)

Specifying the scope of repairs shall be the sole responsibility of the Owners. The

Contractors shall not be responsible nor held liable for any damage, loss and/or any

other adverse effect arising out , whether directly or indirectly or attributable to latent

defects of the vessel or any part thereof, for consequences of prior accidents,

damages or poorly executed repairs , which have not been disclosed by Owners to

Contractors and which neither have nor could have been discovered at the time of

inspection as carried out prior to commencement of works. Notwithstanding the

foregoing, the Contractors are not bound to inspect the Vessel in order to detect her

potential latent defects.

§4 (Owners` Representative)

Unless agreed otherwise between the parties, this is Vessel`s Master that shall be

deemed to be the Owners` representative. Should another person be appointed for

this purpose, the Contractors to be notified accordingly in writing latest upon arrival

of the Vessel or starting of work on the Vessel. The Owners` representative shall be

deemed to be authorized to act on behalf of the Owners in respect of any matters

relating to the Contract, these including but not limited to approving plans,

documents, cost estimates , quotations, invoices as well as agreeing upon and

signing the Contract and any amendments thereto.

§5 (Price)

Unless agreed otherwise , the price as agreed by the Parties, (“the Price”) shall be

payable by the Owners, free of any deductions on account of taxes, bank charges

etc., upon completion of works. The Price shall be expressed in EURO. All prices as

quoted by the Contractors shall be net prices . Should the mandatory regulations in

force make the works performed under the relevant Contract liable to VAT, the

Owners shall pay the Contract Price as increased by applicable VAT.

§6 (Towing and other services )

Remuneration for towing, pilotage, port dues and other charges of similar nature are

not included in the Price. Should the Contractors agree to arrange and/or pay for

such services, the latter shall be carried out at the Owners risk and expense with the

Owners bearing all responsibility therefor and being bound to refund the Contractors

any expenses disbursed.

§7 (Subcontractors)

The Contractors shall have the right to subcontract any part of the works to third

parties , however the Contractors shall remain fully liable for any acts of their


§8 (Lien )

The Contractors shall have a right to exercise a lien upon the Vessel or any part of

her, thus securing his claim for payment of any sums due from the Owners to the

Contractors in connection with the Contract, The Contractor may enforce this right

prior or upon completion of works.

§9 (No set-off)

Owners are not entitled to set-off any sums against the Price due to the Contractors.

§10 (Liquidated damages)

Should the Contractors are not able to perform the Contract within the Date of

Works’ Completion, the Contractors shall pay as liquidated damages the amount of

1000 EUR for each day of delay, provided however the aggregate amount of

liquidated damages shall not exceed 5 % of the Price. Payment of the liquidated

damages prevents the Owners from rising any other claims connected with or

resulting with the delay, with due regard to §11.

§11 (Limitation of liability)

The Contractors’ liability under warranty shall be expressly excluded. Except as

provided in § 10 hereinbefore, contractual or ex tort liability of the Contractors and/or

their subcontractors, arising from (i) performance of the repair works or (ii)

undertaking any other actions in respect of the Vessel , shall be limited to cost of

workmanship as provided in the Contract.

Notwithstanding the foregoing, the Contractors' liability may not exceed the limit of

liability as per present Contractors' professional liability insurance policy. The

present professional liability insurance policy is available at Contractors' office at the

Owners’ request Under no circumstances shall the Contractors` liability extend and

cover Owners’ financial losses, loss of charter hire, loss of profits, loss of market,

loss of business opportunities and any other direct, indirect or consequential losses,

damages or expenses arising out of, in consequence or in connection with the


§12 (Force majeure; Events of Delay)

Date of Works’ Completion shall be extended (“ Permissible delay” ), if there is a

delay caused by either Force Majeure or other Event of Delay (as described in § 12

b) hereinafter ), provided however that the Contractors shall have complied with

procedure stipulated in §13 hereinafter and shall have made all reasonable efforts to

both prevent and minimize the adverse impact such events may have on the

performance of the works.

a) Force Majeure shall be deemed as any occurrence beyond the control of the

Party affected, provided that such Party could not reasonably have foreseen such

occurrence at the time of entering into the Contract and could not reasonably have

avoided or overcome it or its consequences.

b) Force Majeure events shall include, but not be limited to, the following:

- any Government requisition, control, intervention, requirement or interference any

circumstances arising out of war, threatened act of war or warlike operations, act of

terrorists or the consequences thereof riots,

- civil commotions, blockades or embargoes

- epidemics

- landslides, floods, hurricane or other extraordinary weather conditions

- strikes, lockouts or other industrial action, but only if of general nature and not

limited to the Contractors and their sub-contractors

- fire, accident, explosion except where caused by the proven negligence of the

Contractors and/or the Subcontractors/suppliers

c) Other Events of Delay shall include but not be limited to the following:

- failure of the Owners to review/approve any technical information within reasonable


- late delivery of any items to be supplied by the Owners;

- failure of the Owners to deliver the Vessel in the condition stipulated in § 14;

- and any other event beyond Contractors’ control , other than that referred to in par.

a) hereinbefore, resulting in deletion of Date of Works’ Completion’’ date.

§13 (Notification of Permissible Delay)

The Contractors shall notify the Owners in writing within 3 working days of the

occurrence Permissible Delay being result of a Force Majeure or an Event of Delay,

should the latter, in their opinion, entitle the Contractors to extend the Date of Works’


§14 (Condition of the vessel)

Owners shall provide Contractors the Vessel at the agreed place (pier/dock) and in

such technical condition as to allow the Contractors commencement of the

contractual works thereon. In particular the Vessel to be gas free, clean and

complying with any relevant safety requirements. The Vessel to be delivered on the

delivery date as agreed between the Owners and Contractors

§15 (Scrap and waste)

All scrap and/or waste (parts, substances etc.) as removed from the Vessel in the

course of works shall become Contractors` property without the latter’s obligation to

pay for such scrap and/or waste.

§16 (Tests, sea trials)

Any tests, sea trials or vessel’s maneuvers shall be at the Owners` sole risk and

responsibility; the Contractors shall not be under any liability whatsoever to the

Owners to any third party for any loss, damage or expense resulting from such tests,

sea trials or maneuvers.

§17 (No assignment)

Neither party shall be entitled to assign its rights and/or obligations under this

Contract without the prior written consent of the other party.

§18 (Guarantee)

Contractors shall be liable for quality of works performed. The Contractors shall

grant the Owners 6 months guarantee for any works/repairs performed. The

guarantee shall start on Date of works’ completion. The terms of the guarantee shall

be as follows:

a) (Spare parts/ Owners’ deliveries)

The guarantee shall not cover any items delivered by the Owners nor shall the

Contractors be under any liability whatsoever in this respect. Spare parts are always

bought or ordered by the Contractors on Owners` name and on Owners risk. Should

such items prove to be defective , the Contractors shall be bound to assist the

Owners in the latter’s recourse against the relevant manufacturer and/or supplier.

The Contractors assistance shall comprise providing the Owners any relevant

documentation as well as any other acts and services as agreed between the


b) (Works performed at Owners’ risk)

Should the Owners contract the works/repairs that to the best of Contractors’

knowledge may not be effected in a way that guarantees their proper quality , such

works/ repairs may only be performed at the sole risk of the Owners and shall not be

covered by Contractors’ guarantee. Contractors may request from the Owners a

written confirmation of performance of such repairs. The Date of Works’ Completion

is extended by the time the Contractors await for the Owners` written confirmation as


c) (Guarantee claim procedurę)

Owners shall notify the Contractor about any defects and/or claims in writing within 3

(three) days of the date on which the relevant defect has been discovered.

Exceeding the above time limit shall make the relevant claims under guarantee null

and void.

Should there be risk of material deterioration of Vessel’s technical condition or of

excessive wear of the vessel, the Owners are bound to withhold further operation

under pain of loss of guarantee. The Contractors are entitled to inspect onboard the

vessels any defect claimed also by their authorized surveyor and/or insurers’


Should the Contractors reject the guarantee claim, the Owners shall cover any

inspection/examination costs in connection therewith.

Should the Contractors accept the guarantee claim, they shall make the relevant

repairs at their expense. However the Contractors shall be liable to repair or replace

only the defective part of the engine that has been damaged and/or lost as direct

consequence of guarantee defect. The Contractors bear no liability for any indirect

damages or losses, or any consequential damages.

All limitations of Contractor’s liability described in § 11 shall apply accordingly. In

case of repairing or replacement of any part, the original guarantee period shall not

be extended.

The Owners shall be entitled to have the guarantee works and/or defective parts

replacement carried out either at the workshop of the Contractors or elsewhere. In

any case, meaning both acceptance or revoking of the claim, all costs exceeding the

sole obligation to rectify claimed machinery as described above, including, but not

limited to costs of transport of parts necessary for repair or replacement, travel and

accommodation expenses of Contractors` employees or other persons that conduct

repairs on behalf of the Contractor as well as costs for towage, dismantling and

assembly, are always to be paid by the Owners.

If the Contractors are liable for defects, the Owners shall be entitled to have the

guarantee work and the replacements carried out at other workshop than the

Contractors` after obtaining - under pain of nullity - written permission from the

Contractors and if, in the reasonable opinion of Contractors, it is not practicable, cost

effective, or desirable for the Contractors to bring the vessel to the Contractors`

shipyard. The Contractors` liability in such cases shall solely be to pay directly or

reimburse the actual cost incurred for such work and the replacements provided

always that before committing the vessel to another yard the Owners request such

assistance as the Contractors may be able to offer in order to minimize the cost. If

the guarantee works and the replacements are carried out at another yard, the

Contractors’ liability shall always be limited to the cost of such work and the

replacements at the Contractors` shipyard. Fulfilling the guarantee obligations in due

time releases the Contractors from any responsibilities exceeding the value of the

guarantee for defects works .

If the Owners fail to comply with any obligation arising under the Contract, the

Contractors cannot be held to any guarantee, of any description whatsoever

§19 (Insurance)

Owners shall keep the Vessel and the crew properly insured under adequate policies

covering H&M, P&I risks and other customarily insured risks. The policies shall be

extended to cover shipbuilding risks including trial run in case of need.

§20 (Addresses for correspondence)

The Owners’ address as per the Contract shall be deemed to be both their address

for correspondence and the address for service of process, if any