AGREEMENT FOR THE CONSTRUCTION OF A NEW BOAT

AGREEMENT FOR THE CONSTRUCTION OF A NEW BOAT

Build Number/ Hull Identification No./

THIS AGREEMENT is made the day of

BETWEEN

1. Alvechurch Boat Centres Ltd, Scarfield Wharf, Alvechurch, Worc, B48 7 SQ

a limited company incorporated in England Reg.no. 2860394 whose registered office is Tudor House, 37a Birmingham New Road, Wolverhampton, WV4 6BL ("the Builders")

AND

2. [ ] of [ ] "The Purchaser"

(jointly "the Parties")

1 AGREEMENT AND SPECIFICATION OF THE BOAT

1.1 The Builders agree to construct and the Purchaser agrees to buy the boat described in the Specification as set out in Schedule 1, together with any drawings and plans, all of which shall be signed by the Parties, ("the Boat") and in accordance with the terms of this Agreement.

1.2 Subject to any agreed amendments to the Specification, drawings and plans, the Purchaser shall have the right to reject any workmanship, materials and/or equipment which does not comply therewith. Such rejection shall be ineffective unless confirmed to the Builders by notice in writing within 14 days.

1.3 The Builders shall be under no contractual or other obligation to accept any order of the Purchaser until it has been confirmed and signed on behalf of the Builders by their authorised representative.

1.4 The Builders shall build the Boat in compliance with all applicable statutory requirements and regulations relating to the construction and sale of the Boat in the European Union or any other requirements or regulations which may be agreed in writing between the Parties.

2 MODIFICATIONS AND CHANGES TO THE SPECIFICATION

2.1 No modifications or changes to the Specification, Delivery Date and/or price shall be binding on the Parties unless and until set out in writing and signed by both Parties.

2.2 The Builders shall have the right to refuse to agree to any modification or change to the Specification or Plans.

3 CONTRACT PRICE AND PAYMENT

3.1 The price of the Boat is the amount set out in Schedule 2 together with the cost of any modifications or changes to the Specification agreed between the Parties under Clause 2.1 and any adjustments made under Clause 3.3 and, if applicable, VAT at the rate applicable from time to time (together "the Contract Price"). The Purchaser agrees to pay the Contract Price by instalments as set out in Schedule 2 ("Stage Payments") and as provided in this Clause.

3.2 The Builders shall give the Purchaser 14 days' notice of the anticipated date of completion of each stage of construction as provided in Schedule 2. On expiry of such notice the Purchaser shall certify that the stage has been satisfactorily completed (such certification not to be unreasonably withheld) whereupon the relevant Stage Payment will become immediately due and payable in full without discount, deduction or set off.

3.3 Save as provided in Clauses 2.1 and 3.1 the Contract Price shall not be subject to any increase.

3.4 If the Contract Price is varied in accordance with Clauses 2.1 and/or 3.1 the Builders shall be entitled to require payment of any increase in the Contract Price by reason of any modification or change in full at the time of agreement thereto or, at their option, to receive such increase by way of additions to the Stage Payments.

3.5 If the Contract Price is varied in accordance with Clause 3.3 the amount of the increase shall be divided by the number of remaining Stage Payments and the amount so calculated shall be added to each remaining Stage Payment and Schedule 2 shall be amended accordingly.

3.6 If for any reason any tax, levy, charge or any other sum required to be paid by law shall be omitted from the amount of the Contract Price or shall be varied or introduced after the date of this Agreement and shall be required to be paid by the Purchaser the Purchaser shall pay such additional sum forthwith on demand.

4 UNPAID INSTALMENTS

4.1 If the Purchaser fails for any reason to pay the full amount of any Stage Payment or other sum due to the Builders on the due date the Builders shall be entitled to stop construction of the Boat until all outstanding payments have been paid in full, and the Delivery Date shall be extended by the period of such delay in payment.

4.2 If such failure to pay any sum due continues for 14 days the Builders shall thereafter be entitled to charge interest at 4% over Barclays Bank plc base rate, or the Builders' current commercial overdraft rate if higher, after as well as before judgement, calculated from the date upon which such payment became due and payable.

4.3 After a further period of 14 days' delay the Builders shall, without prejudice to any other rights, be entitled:

4.3.1 to require payment from the Purchaser forthwith of the balance of the Contract Price then outstanding and to complete the construction of the Boat; or

4.3.2 to terminate this Agreement and to sell the Boat pursuant to Clause 10.2.

4.4 The Purchaser shall in addition be liable for any loss or damage, special, direct, indirect and/or consequential losses incurred by the Builders as a result of the delay in the payment of the Stage Payments or any other sums due hereunder.

5 ACCEPTANCE TRIAL AND DELIVERY

5.1 The Boat shall be completed and ready for delivery at the place and on the date stated in Schedule 3 or on such later date as may be determined in accordance with the terms of this Agreement ("the Delivery Date").

5.2 Unless otherwise agreed between the Parties the Boat shall at the Builders' expense be taken on a trial trip (of not more than 4 hours' duration) before delivery (the "Acceptance Trial"). The Builders shall give the Purchaser at least 14 days' written notice of the place and approximate duration of the Acceptance Trial, but if the date shall not be convenient to the Purchaser the Parties shall agree an alternative date not more than one month after the date proposed by the Builders.

5.3 If during the Acceptance Trial any defects in workmanship or materials or deviations from the Specification are found, the Builders shall forthwith rectify such defects or deviations and shall carry out a further Acceptance Trial in accordance with Clause 5.2.

5.4 If the Purchaser fails to attend a first Acceptance Trial, the Builders shall carry out a further Acceptance Trial pursuant to Clause 5.2, save that the cost thereof shall be for the account of the Purchaser.

5.5 If the Purchaser fails to attend such further Acceptance Trial, or if the Parties shall fail to agree an alternative date for a first or further Acceptance Trial, the Builders shall confirm in writing to the Purchaser that an Acceptance Trial has been deemed to have taken place and provided that the Builders shall certify that the Boat is constructed in accordance with the Specification and performs satisfactorily the Purchaser shall be deemed to have accepted it.

5.6 At the satisfactory conclusion of the Acceptance Trial the Purchaser shall sign the Certificate of Delivery and Acceptance in the form provided in Schedule 4. The final balance of the Contract Price shall become due and payable immediately upon signature of the Certificate of Delivery and Acceptance or upon provision by the Builders to the Purchaser of the Certificate referred to at Clause 5.5 or upon the Purchaser's wrongful failure or refusal to sign the Certificate of Delivery and Acceptance.

5.7 The Purchaser shall take delivery of the Boat immediately upon signature by the Purchaser of the Certificate of Delivery and Acceptance and payment of the final balance of the Contract Price and any other sums owing to the Builders by the Purchaser. If the Purchaser fails to take delivery of the Boat or fails to pay any outstanding sums due to the Builders then, in addition to any other rights which the Builders may have, the Builders shall be entitled to require the Purchaser to pay such reasonable berthing and/or storage charges as the Builders shall notify to the Purchaser together with any other expenses reasonably incurred by the Builders, including but not limited to insurance, maintenance and lifting of the Boat in or out of the water until actual delivery shall take place.

5.8 The Purchaser and the Builders expressly agree that the Builders shall not be responsible for investigating or otherwise ensuring that the Purchaser is competent and experienced in the proper control and/or navigation of the Boat. The Royal Yachting Association will if requested by the Purchaser provide a list of boat handling/training establishments.

6 DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)

6.1 If construction of the Boat is delayed directly or indirectly due to any cause beyond the Builders' reasonable control the Delivery Date shall be extended by the period of time during which such delaying event operates.

6.2 The Builders shall give the Purchaser written notice of any event in respect of which the Builders claim to be entitled to an extension of time:

6.2.1 within 7 days of its commencement, stating the date on which the delay commenced, the cause of it and its estimated duration; and

6.2.2 within 7 days of its end, stating the date on which it ended and the total period of the extension sought.

Any dispute arising between the Parties as to the operation of a delaying event shall be adjudicated in accordance with Clause 14.1.

6.3 If the Builders' premises, plant, machinery or equipment shall be so damaged by the operation of a delaying event for which the Builders are not responsible so as to make it impracticable for the Builders to complete the construction of the Boat, the Builders may, at their option (to be exercised within 21 days of the operation of the delaying event), cancel this Agreement by notice in writing to the Purchaser, whereupon the Purchaser shall be entitled by written election either:

6.3.1 to take over and complete the Boat without further liability on the Builders whereupon the Purchaser shall pay to the Builders all sums then due, whether by way of Stage Payments or otherwise; or

6.3.2 to require repayment of all instalments paid by the Purchaser to the Builders and upon such repayment title in the Boat and all materials and equipment appropriated to the Boat shall revest in the Builders.

7 ACCESS TO BOAT AND TO BUILDERS' PREMISES

7.1 The Purchaser shall have the right to inspect the progress of construction of the Boat from time to time during the Builders' normal business hours with the prior written consent of the Builders, such consent not to be unreasonably withheld provided always that the Builders shall be entitled to appoint a representative to accompany the Purchaser or Purchaser's agent and that access shall extend only to those parts of the Builders' premises necessary for the inspection of the Boat and/or the materials and equipment appropriated thereto.

7.2 The Purchaser shall observe all current rules and regulations applied by and to the Builders, and to their premises.

8 WARRANTIES

In addition to the Purchaser's statutory rights the following warranties shall apply:

8.1 Subject to the conditions set out below and otherwise expressly set out herein the Builders warrant to the Purchaser that the Boat will be of satisfactory quality and reasonably fit for the purpose(s) made known to the Builders in writing prior to the date of this Agreement whether or not such purpose is one for which the Boat is commonly supplied and will correspond with the Specification and any variation, addition or modification thereto. The Builders further warrant that the Boat will be free from defects in materials and workmanship for a period of 12 months from the time of delivery.

8.2 The Builders warrant to the Purchaser that on delivery the Boat will comply with:

8.2.1 all legislative requirements and regulations relating to the sale of the Boat in the European Union for any purpose(s) made known under 8.1 above; or

8.2.2 any other requirements or regulations which may be agreed in writing between the Parties.

8.3 The Purchaser's statutory rights and the warranties set out in Clauses 8.1 and 8.2 shall be subject to the following conditions:

8.3.1 The Builders shall have no liability for any defect in the Boat arising from the Specification supplied, provided or varied by the Purchaser;

8.3.2 The Builders shall repair or replace any defect in the workmanship, materials or equipment or their failure to correspond with the Specification. Such repair or replacement shall be carried out by the Builders at their premises or, where that is not convenient to the Parties, the Builders shall pay the reasonable cost of having the work carried out elsewhere;

8.3.3 The Builders shall only be liable for any defects or failures which were not apparent on reasonable inspection during the Acceptance Trial or within a reasonable time thereafter;

8.3.4 The Purchaser shall notify the Builders in writing immediately on discovery of any alleged defect and the Builders or their agent shall have the right to inspect the Boat including the right to carry out sea trials to enable the Builders or their agent to examine or assess the extent of the alleged defect. The expense of any such trials shall be borne by the Builders if the defect is shown to be one of workmanship or materials.

9 INSURANCE

9.1 The Builders shall insure the Boat (together with all equipment and materials installed or intended for it and within the Builders' premises) in the joint names of the Builders and the Purchaser from the date of this Agreement until the date of delivery.

9.2 Such insurance shall be effected with a reputable insurer for a sum equal to the replacement cost of the completed Boat (to a maximum of 125% of the Contract Price) and shall include the cost of any additions or variations to the Specification which have been agreed between the Parties.

9.3 Such insurance shall be on terms no less favourable than the Institute Clauses for Builders' Risks applicable from time to time. Documentary evidence of such insurance, its terms and conditions and proof of payment of the premium shall be provided to the Purchaser on request.

9.4 In the event that the Boat, equipment or materials sustain damage at any time before delivery any monies received in respect of the insurance shall be receivable by the Builders and shall be applied by them in making good such damage in a reasonable and workmanlike manner and the Delivery Date shall be extended by such period as shall be reasonably necessary to effect the necessary repairs. The Purchaser shall not be entitled to reject the Boat, equipment or materials on account of such damage or repairs or to make any claim in respect of any resultant depreciation save that where the Boat is declared an actual or constructive total loss the Purchaser shall have the option, to be exercised within 28 days of the loss, of cancelling this Agreement in which event the insurance money to the value of Stage Payments already paid shall be paid direct to the Purchaser by the insurers and the Purchaser will abandon all rights under the said insurance to the Builders. This Agreement will thereupon be determined in all respects as if it had been duly completed and the Purchaser shall have no further right to claim against the Builders.

9.5 If the Builders fail to provide satisfactory evidence of insurance in accordance with the provisions of this Clause, the Purchaser shall be entitled to insure on comparable terms and to deduct the amount of the premium actually paid from the Contract Price.

10 TERMINATION

10.1 The Builders shall be entitled to terminate this Agreement by written notice without prejudice to any other rights or remedies available if:

10.1.1 the Purchaser becomes insolvent; or

10.1.2 the Purchaser has failed without good reason to make one or more Stage Payments or any other payment within 28 days of such payment being due and payable and has not referred the underlying reason for such delay to dispute resolution under the provisions of Clause 14.

10.2 If the Builders exercise their right to terminate this Agreement under Clause 10.1 they shall be entitled to sell the Boat, the materials and the equipment and/or any other property of the Purchaser in the possession of the Builders for the purpose of the construction of the Boat. The Builders shall give the Purchaser 28 days' written notice of their intention to sell the Boat and/or other property and such notice shall give details of the reasons for the sale including details of any sums due and payable to the Builders together with details of the proposed method of sale. Following the sale of the Boat and/or other property the Builders shall repay to the Purchaser the balance of the proceeds of sale after deduction of all sums owing to the Builders and all reasonable legal or other expenses including, but not limited to, the costs of sale and maintenance and storage charges incurred by the Builders.

10.3 In addition to any other rights set out herein the provisions of the Torts (Interference with Goods) Act 1977 ("the Act") shall apply in relation to uncollected boats and/or other property and for the purposes of the Act it is hereby expressly agreed that the Builders' obligations to the Purchaser as custodians of the Boat and/or other property terminate upon the expiry or lawful termination of this Agreement and pursuant to the Act the Builders have a right of sale exercisable in certain circumstances as set out in the Act.

10.4 For the purposes of Clauses 10.2 and 10.3 only the Purchaser hereby irrevocably appoints the Builders as the agent of the Purchaser for the sale of the Boat and/or other property. The Purchaser shall co-operate with the Builders insofar as may be necessary to effect a sale of the Boat including signing or confirming any authority or instructions.

11 OWNERSHIP OF THE BOAT

11.1 The Boat and/or all materials and equipment purchased or appropriated from time to time by the Builders specifically for its construction (whether in their premises, upon the water or elsewhere) shall become the property of the Purchaser upon the payment of the first Stage Payment or, if later, upon the date of the said purchase or appropriation. The Builders shall, however, have a lien on the Boat and any materials or equipment purchased for or appropriated to the construction for recovery of all sums due (whether invoiced or not) under the terms of this Agreement or any variation or modification hereof. Any materials or equipment rejected by the Purchaser shall forthwith revest in the Builders.

11.2 The Builders shall, insofar as it is reasonably practicable to do so, mark all individual items of equipment and materials which are purchased for or appropriated to the construction of the Boat.

11.3 The Purchaser shall not without the prior written consent of the Builder which consent shall not be unreasonably withheld sell, assign, pledge or otherwise put a charge on the Boat by way of security for any indebtedness prior to delivery except for the sole purpose of obtaining a loan to finance the construction of the Boat. If the Purchaser charges the Boat in breach of the terms of this Clause, the balance of the Contract Price shall forthwith become due and payable without prejudice to any other rights or remedies of the Builders. The Purchaser shall not have the right to assign or transfer this Agreement or any of his rights and obligations hereunder without the prior written consent of the Builders.

11.4 If the Purchaser is in breach of any of the terms of this Agreement after the property in the Boat and/or materials and equipment has passed to him and the Builders wish to exercise their rights to sell the Boat and/or materials and equipment as set out herein then the property in the Boat and/or materials shall revert from the Purchaser to the Builders following 28 days' notice by the Builders of their intention to exercise such rights.

11.5 Notwithstanding the provisions of this Clause risk in the Boat shall remain with the Builders until the actual delivery of the Boat to the Purchaser.

12 COPYRIGHT

Any copyright or similar protection in manuals, drawings, plans, specifications, including the Specification prepared by the Builders or their employees or agents, shall remain the property of the Builders.

13 NOTICES

Any notice required to be given hereunder shall be in writing and either (i) given by hand with proof of delivery or electronic transmission confirmed forthwith by first class pre-paid post, or (ii) sent by first class pre-paid post to the other party at the address set out in this Agreement or such other address in the UK as may have been notified by the other party.

14 DISPUTE RESOLUTION - LAW AND JURISDICTION

14.1 If during the construction of the Boat any dispute arises either as to an adjustment of the Contract Price pursuant to Clause 3.3 or as to when a Stage Payment is due and payable or as to the operation or duration of a delaying event or whether for the purposes of the policy of insurance the Boat has suffered substantial damage, then, and without prejudice to the Parties' rights to litigate such dispute, it may be referred to a single surveyor who shall be independent of the Builders and the Purchaser and whose identity and terms of reference shall be agreed by the Parties or, in default of agreement, by the President for the time being of the Yacht Designers and Surveyors Association. The surveyor so appointed shall act as an expert and not as an arbitrator and his written decision shall be final and binding upon the Parties and his fees and expenses shall be borne equally by the Parties.

14.2 This Agreement shall be construed in accordance with English law or where the Builders have their principal place of business in Scotland in accordance with Scottish law and the High Court of England or Scotland (as the case may be) shall have exclusive jurisdiction in respect of any dispute or other matter arising hereunder.

15 INTERPRETATION

15.1 The construction of this Agreement is not to be affected by any headings.

15.2 References in this Agreement to the Parties shall include their respective successors and permitted assigns save where such succession or assignment is expressly prohibited by the terms of this Agreement.

15.3 This Agreement forms the entire agreement between the Parties and unless specifically agreed in writing by the Builders no warranty, condition, description or representation is given or to be implied by anything said or written in the negotiations between the Parties or their representatives prior to this Agreement.

15.4 If the Builders are a member of a group of companies the Builders may perform any of its obligations or exercise any of its rights hereunder by itself or through any member of its group provided that any act or omission of any such other member shall be deemed to be the act or omission of the Builders.

15.5 In this Agreement words importing the masculine gender also include the neuter and feminine gender and words importing the singular include also the plural.

15.6 Reference to any legislative provision includes a reference to that provision as amended extended or re-enacted and any replacement thereof (either before or after the date of this Agreement).

15.7 If any term or provision in this Agreement shall be held to be void in whole or in part under any enactment or rule of law such term or provision or part shall to that extent be deemed not to form part of this Agreement but the validity and enforceability of the remainder of this Agreement shall not be affected.

16 VARIATIONS AND ADDITIONS

This Agreement is subject to the variations and additions set out below or identified below and attached to this Agreement and initialled and dated by both Parties.

Signed for and on behalf of the Builders Date

In the presence of:

Full name of witness

Address

Occupation

Signature

Signed for and on behalf of the Purchasers Date

In the presence of:

Full name of witness

Address

Occupation

Signature

SCHEDULE 1 - SPECIFICATION

The Specification for the Boat is as set out below or as identified below and attached to this Agreement, signed and dated by the Parties.

SCHEDULE 2 - STAGE PAYMENTS FOR COMPLETE BOATS & SAILAWAYS

Contract Price

The Boat £

Plus VAT (if applicable) £

Price inclusive of VAT £

The Contract Price shall be payable by Stage Payments as set out below

1) Upon signing of this Agreement (20%) £

2) Upon the hull being available at the

Builders' premises fully moulded, planked,

plated or formed and confirmed in writing

to the Purchaser by the Builders (35%) £

3) Upon substantial completion of the

fitting of the interior joinery work or

installation of the engine or stepping of

the mast whichever is the earlier (35%) £

4) Upon completion of the Acceptance Trial and

the signing of the Satisfaction Notice by the

Purchaser or upon deemed acceptance and

completion of the Builders' Certification as

provided in Clauses 5.5 and 5.6 (10%) £

SCHEDULE 2 - STAGE PAYMENTS FOR SHELLS

Contract Price

The Boat £

Plus VAT (if applicable) £

Price inclusive of VAT £

The Contract Price shall be payable by Stage Payments as set out below

1) Upon signing of this Agreement (20%) £

2) Upon delivery of the steel (30%) £

3) Upon completion of the shell and

the signing of the Satisfaction Notice by the

Purchaser.

(Acceptance trials do not apply) (50%) £

SCHEDULE 3 - DELIVERY

Delivery Date

Place of Delivery

SCHEDULE 4 - CERTIFICATE OF DELIVERY & ACCEPTANCE

Place of Acceptance Trial

Date of Acceptance Trial

Persons present at Acceptance Trial

I the undersigned hereby certify that the construction of the Boat and the Acceptance Trial have been completed to my reasonable satisfaction.

Subject to the terms of the Agreement dated [ ] this Certificate of Delivery and Acceptance will not affect my statutory rights should the Boat or its equipment subsequently prove to be defective.

Signed by [ ], the Purchaser

Dated