Terms of Sale for Marine Lubricants, May 2006

1. Title
For Marine Lubricants delivered in bulk, delivery shall be complete and title to and risk of loss of Marine Lubricants shall pass to Purchaser at the permanent fixed intake connection of Purchaser’s Vessel, barge or coastal tanker or any other vehicle nominated by Purchaser to receive delivery.  Purchaser shall be responsible for connection to the intake valve of Purchaser’s Vessel, barge, or coastal tanker or other vehicle and pumping shall be performed under the direction of the receiving Vessel, barge, or coastal tanker or other vehicle.  For delivery of Marine Lubricants in drums or containers, delivery shall be complete and title to and risk of loss of Marine Lubricants shall pass to Purchaser on the dock alongside the Vessel where accessible by Seller’s delivery equipment, or if inaccessible to Seller, at the nearest reasonably accessible point to the receiving Vessel

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2. Seller's Lien
Marine Lubricants delivered hereunder are sold and delivered on the credit of the Vessel receiving delivery, as well as on the promise of the Purchaser to pay therefor.  Purchaser warrants that Seller shall have the right to assert a lien against the Vessel covering the Marine Lubricants delivered for the purchase price, any extra charges, any surcharge, and all associated recovery costs.

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3. Financial Assurances
The Purchaser shall periodically provide to Seller that financial information or security deemed necessary by Seller to support any credit extension.  If, during the life of any Agreement the financial capacity of the Purchaser becomes impaired or unsatisfactory to Seller in the sole judgment of Seller, advance cash payment or security satisfactory to Seller shall be given by the Purchaser on demand by Seller and shipments/deliveries may be withheld until such payment or security is received and/or Seller may terminate this Agreement upon a failure to pay any amount when due or provide security satisfactory to Seller, as aforesaid, and no forbearance, course of dealings, or prior payment, shall affect these rights of the Seller.

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4. Vessel Acceptance and Purchaser Warrantees
The Vessel(s) nominated by Purchaser to receive Marine Lubricants shall be subject to Seller’s acceptance and will not be moored at wharf or alongside other marine loading facilities of Seller or Seller’s supplier unless free of all conditions, difficulties, peculiarities, deficiencies or defects which might impose hazards in connection with the mooring, unmooring or supply of the Vessel(s).

Purchaser warrants:

        (a)  That the Marine Lubricants purchased hereunder are for the operation of the receiving Vessel(s) and that Vessel(s) only;

        (b)  That the Vessel(s) nominated by Purchaser to receive Marine Lubricants is/are in compliance with all local, national and international regulations and requirements, as applicable; and

        (c)  Purchaser shall have sole responsibility for selection of Marine Lubricants suitable for use in the Vessel being supplied

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5. Seller’s Warranty
Marine Lubricants shall meet the descriptions and applications set forth in Seller’s Marine Lubricants Handbook, but SELLER OTHERWISE MAKES NO WARRANTIES OF QUALITY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AND ANY IMPLIED WARRANTIES OR CONDITIONS WHETHER STATUTORY OR OTHERWISE ARE EXPRESSLY EXCLUDED

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6. Parties Obligated
Unless otherwise agreed in writing, in the event that Purchaser is ordering Marine Lubricants as an agent then Purchaser, without regard to whether it purports to contract only as an agent, as well as the principal on whose behalf the Purchaser is acting, whether disclosed or undisclosed, shall be bound by the terms and conditions of this Agreement.

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7. Term and Place of Payment
Payment shall be made, without discount, offset, deduction or counterclaim of any kind, in U.S. Dollars via wire transfer no later than thirty (30) days from date of delivery.  Complete remittance information should accompany all payments.

Any deduction or offset for claims related to a delivery shall be a breach of Purchaser’s obligations hereunder and all reviews, discussions or settlements regarding such claims shall be suspended until Purchaser makes payment in full for the quantity delivered as notified by Seller. Seller may immediately recover any amount withheld from the full payment and Purchaser agrees that any claims related to the delivery do not constitute a valid defense against Purchaser’s claim to the withheld amount.

Payment shall be considered past due if not received by Seller within thirty (30) days from the date of delivery.  Overdue payments shall be subject, at Seller’s sole discretion, to a service charge of 2% per thirty day period or the maximum rate permitted under applicable law, whichever is less.

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8. Assignability
This Agreement shall not be assigned by Purchaser without the written consent of the Seller, which consent shall not be unreasonably withheld. Seller may cause deliveries hereunder at one, or more, or all of the ports, including ports listed in the Directory to be made to Purchaser by others, including its affiliates, and may assign this Agreement, in whole or in part, without notice to, or consent from the Purchaser.

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9. Permits
Seller’s obligation to sell and deliver Marine Lubricants hereunder is conditional on Purchaser and Seller obtaining such government permits and licenses in respect thereto as may be necessary.  Seller and Purchaser agree to use reasonable efforts to obtain the necessary permits and licenses in a timely manner.

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10. Indemnification
Purchaser agrees to and does hereby indemnify, hold harmless and defend Seller and its suppliers, and their respective officers, directors and employees from any and all judgments, orders, decrees, claims, costs or expenses, including attorney fees (“Claims”), arising out of the performance by Purchaser, its agents, employees and servants, of this Agreement except to the extent caused by the negligence, gross negligence or willful misconduct of Seller

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11. Force Majeures
Failure (in whole or in part) or delay on the part of either Party in the performance of any of its obligations hereunder shall be excused and such Party shall not be liable for damages or otherwise on account thereof, when such failure or delay is the direct or indirect result of any of the following causes, whether or not existing at the date hereof, and whether or not reasonably within the contemplation of the parties at the date hereof, namely: Acts of God, earthquakes, fire, flood, or the elements, malicious mischief, insurrection, riot, strikes, lockouts, boycotts, picketing, labor disturbance, public enemy, war (declared or undeclared), compliance with any federal, state or municipal law, or with any regulation, order rule, recommendation, request or suggestion (including, but not limited to, priority, rationing or allocation orders or regulations) of governmental agencies, or authorities or representatives of any government (foreign or domestic) acting under claim or color of authority; total or partial failure or loss or shortage of all or any part of transportation facilities ordinarily available to and used by a Party hereto in the performance of its obligations hereunder, whether such facilities are such Party’s own or those of others; or, if failure or delay be that of Seller, total or partial loss or shortage of raw or component materials or products, or facilities, including, but not limited to producing, manufacturing, transportation and delivery facilities; or any cause whatsoever beyond the control of either party hereto, whether similar to or dissimilar from the causes herein enumerated.

If, by reason of any of said causes, Seller is unable to make deliveries to all its customers, its failure in whole or in part to make deliveries to Purchaser, while delivering to others, shall not be a breach of this Agreement and in such event Seller may, but shall not be obligated to, prorate its available supply.

Upon cessation of the cause or causes for any such failure or delay, performance hereof shall be resumed, but such failure or delay shall not operate to extend the term of this Agreement nor obligate either Party to make upon deliveries or receipts, as the case may be.

Seller may suspend deliveries so long as its cost of performance is increased and the increased cost cannot be recovered by an equivalent increase in the price to be paid by Purchaser.

Seller shall not be responsible for any demurrage resulting from such delay or failure to perform.

Nothing herein contained shall excuse Purchaser from paying Seller, when due, any amounts payable hereunder or pursuant hereto.

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12. Product Allocation
In the event performance by Seller becomes impracticable for any reason, including, but not limited to, orders, requests or suggestions by any official body relating to supplies, priorities, rationing or allocations of raw materials from which Marine Lubricants are derived or any other petroleum products, Seller may reduce or stop deliveries in such a manner as it may in its sole discretion determine and shall be relieved of its obligation to perform hereunder

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13. Claims
Any claims for defect or variance in packaging or shortage in quantity must be noted at the time of delivery on the Marine Delivery Receipt or in a Letter of Protest. Any claim for shortage in quantity shall be presented to the Seller in writing within fifteen (15) days of the date of delivery, failing which any such claim shall be deemed to be waived and absolutely barred. Purchaser shall notify Seller in writing of any claims for defect or variance in quality within thirty (30) days of delivery. Seller shall have an opportunity to inspect and test as soon as practicable after delivery. Failure of the Purchaser to comply with the above requirements shall operate as a waiver of any and all claims by the Purchaser.

Claims of any nature do not relieve Purchaser of responsibility to make full payment of amounts due Seller hereunder.

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14. Safety & Environmental Protection
Purchaser is familiar with the health effects related to the Marine Lubricants supplied hereunder and with appropriately protective safety and health procedures for handling and use of such Marine Lubricants. Purchaser shall adhere to such safety and health procedures while using or handling the Marine Lubricants. Purchaser shall also facilitate the dissemination of such health and safety information to all employees, users, and others potentially exposed to the Marine Lubricants sold hereunder. Purchaser shall be responsible for compliance by its employees, agents, and other users with all health and safety requirements or recommendations related to Marine Lubricants and shall exert its best efforts to ensure that any of its employees or agents, users, and others potentially exposed avoid frequent or prolonged contact with or exposure to the Marine Lubricant, during and after delivery. Seller and its suppliers shall not be responsible for any consequence arising from failure by Purchaser, its employees or agents, any users, or any other party to comply with such health and safety requirements or recommendations. Seller (or Seller's supplier) reserves the right to refuse to make a delivery without recourse from Buyer if Seller, in its sole discretion, determines that such delivery cannot be made safely.

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15. Pollution
In the event of an escape, spillage or discharge during delivery, Purchaser shall promptly take any and all necessary actions to remedy or mitigate the consequences thereof.Seller shall have the right, at Seller’s sole discretion, to take or assist Purchaser in taking any measures to remedy or mitigate the consequences of such escape, spillage or discharge.Any of the measures taken by Seller, Seller’s supplier or its designee shall be deemed taken on Purchaser’s authority and shall be at Purchaser’s expense, except to the extent that such escape or discharge was caused or contributed to by Seller or Seller’s supplier.If Purchaser considers that the measures being undertaken should be discontinued, any governmental authorities having jurisdiction concur, Purchaser shall so notify Seller, and thereafter neither Seller nor its designee shall have any right to continue such measures under the provisions of this Agreement.

Each Party shall supply the other with all necessary documents and information in its custody and control concerning any escape or spillage or any program for the prevention thereof as required by either Party, by law, or by regulations applicable at the port of delivery.

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16. Entirety of Agreement
No prior stipulation, agreement or understanding of the Parties shall be valid or enforceable unless embodied in a written Agreement or covered by these provisions.

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17. Waiver
The right of either Party to require strict performance by the other of any and/or all obligations imposed upon the other by this Agreement shall not in any way be affected by any previous waiver, forbearance or course of dealing.

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18. Taxes
Purchaser assumes the payment of all domestic and foreign taxes and/or duties now or hereafter imposed, directly or indirectly, on Marine Lubricants and the sale or use of said Marine Lubricants. The Seller may bill Purchaser for such tax or duty and the Purchaser shall pay the amount thereof

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19. Other Terms and Conditions
For the avoidance of doubt, any terms and conditions contained in any order form that may be used by Purchaser shall not be applicable to the purchase and sale of Marine Lubricants hereunder.

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20. Surcharge
Should there be an increase in the cost of marine lubricants and/or their components due to unanticipated circumstances or otherwise, the seller may implement, at its sole discretion, a non-discountable temporary price surcharge

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21.Contingencies
(a)  Neither party shall be in breach of its obligations hereunder to the extent that performance is prevented, delayed or (in the sole but reasonable judgment of the party concerned) made substantially more expensive as a result of any shortage in raw material, transportation, power, manufacturing capacity, etc., or the Product itself from Seller's then-contemplated source of supply.

(b)  Whenever performance is so affected by such a contingency, Seller may reduce deliveries in a manner which fairly apportions the consequences of the contingency among all Seller's customers (including affiliates); provided, however, that Seller will be permitted to supply all or any part of its available Marine Lubricants to affiliated companies if needed for manufacturing operations. Seller shall not be required to purchase Product from third parties in order to comply with this Section but Seller may do so in its sole discretion.

(c)  Performance will be excused as provided above even though the occurrence of the contingency in question may have been foreseen or foreseeable at the time of contracting or subsequently become foreseeable.

(d)  Quantities not purchased or sold due to the provisions of this Section need not be made up later.

(e)  If any law, regulation or other governmental action requires Seller to reduce any price in effect under this Contract, or prevents Seller from increasing any price to the extent it wishes pursuant to its rights under this Contract, Seller may cancel from this Contract the quantities of Product so affected.

(a)  Nothing in this Section shall excuse Purchaser from its obligations to make payments when due

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22. Conflict of Interest and Right to Audit
Conflicts of interest relating to this Agreement are strictly prohibited. Except as otherwise expressly provided herein, Purchaser shall not give or receive from any director, employee or agent of Seller any gift, entertainment or other favor of significant value, or any commission, fee or rebate. Likewise, Purchaser shall not enter into any business relationship with any director, employee or agent of Seller or any affiliate of Seller, unless such person is acting for and on behalf of Seller or any of such affiliate, without prior written notification thereof to Seller. In any event if either party becomes aware of a violation of this section, such party shall promptly notify the other party of the violation.

Purchaser represents and warrants that neither it nor anyone acting on its behalf or with its approval has offered, made or given, and agrees that no such person shall offer, make or give any payment or anything of value either directly or indirectly to any official of any government or public international organization (including any officer or employee of any government department, agency or instrumentality) (hereinafter an “Official”) to influence his or its decision, or to gain any advantage for Seller or Purchaser. Without limiting the generality of the foregoing, Purchaser represents, warrants and agrees that no official or any close relative of an Official presently holds, has been offered, or will be given or offered in the future any direct or indirect interest of any type (whether formal or informal, legal or beneficial) in Purchaser or in the amounts that are to be paid under this Agreement. Purchaser shall immediately notify Seller of any violation of this provision and shall immediately reimburse Seller, out of any and all monies paid by Seller to it, an amount equal to the amount of the payment or the value of the gift to a government official which gives rise to such violation. Also Purchaser shall hold Seller harmless for all losses and expenses arising out of such violation. In the event of a violation of this Clause, Seller may terminate this Agreement at any time and, notwithstanding any other provision of this Agreement, pay no compensation or reimbursement to Purchaser whatsoever for any service performed after the date of the violation.

Purchaser shall maintain true and correct records in connection with all matters relating to this Agreement and retain such records for at least 24 months.

Any representative(s) authorized by Seller may audit any and all records of Purchaser for the sole purpose of determining whether there has been compliance with the provisions of this Agreement

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23. For Singapore Law:
For agreements applying Singapore law, the following is applicable and replaces the corresponding numbered clause above:

      2. Seller’s Lien
       Marine Lubricants delivered hereunder are sold and delivered on the credit of the Vessel receiving delivery, as well as on the promise of the Purchaser to pay Purchaser warrants that Seller shall have the right to assert a lien against the Vessel and where Purchaser is not the owner of the Vessel, Purchaser warrants and undertakes to procure that Seller shall have a right to assert a lien against the Vessel covering the Marine Lubricants delivered for the purchase price, any extra charges, any surcharge, and all associated recovery costs.

      19. Other Terms and Conditions
       For the avoidance of doubt, any terms and conditions contained in any order form that may be used by Purchaser shall not be applicable to the purchase and sale of Marine Lubricants hereunder. A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 2001 to enforce any term of this Agreement but this does not affect any right or remedy of a third party which exists or is available apart from that Act.

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24. For English Law:
For agreements applying English law, the following is applicable and replaces the corresponding numbered clause above:

      10. Indemnification
       Purchaser agrees to and does hereby indemnify, hold harmless and defend Seller and its suppliers, and their respective officers, directors and employees from any and all judgments, orders, decrees, claims, costs or expenses, including attorney fees (“Claims”), arising out of the performance by Purchaser, its agents, employees and servants, of this Agreement except to the extent caused by the negligence, gross negligence or willful misconduct of Seller. For the purposes of this agreement the term “willful misconduct” shall mean in respect of a Party, a willful and intentional or reckless act or omission by that Party.

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