ACY YACHTS
Commissioning Services Agreement
This Commissioning Services Agreement (this “Agreement”) is made as of the latest date listed on the signature page hereto (the “Effective Date”), by and between Yacht Sales Management, LLC, a Delaware limited liability company doing business as “ACY Yachts” (“hereinafter, “ACY Yachts” or “ACY”), and the undersigned purchaser (“Purchaser”; and together with ACY, the “Parties”).
Pursuant to a Yacht Purchase and Sale Agreement by and between ACY and Purchaser (as amended from time to time (the “Purchase Agreement”), Purchaser has engaged ACY to procure a Yacht.
ACY engages in the business of commissioning yachts with certain options and packages specified by ACY’s clients. Purchaser desires to engage ACY to provide certain commissioning services set forth in the Quotation, as defined in the Purchase Agreement (the “Commissioning Services”), which may include fitting the Yacht with ACY’s basic commissioning package, a description of which is attached hereto as Exhibit A, and Dealer Fit Options (if any) as defined and specified more fully in the Quotation. (The Yacht together with the Commissioning Services shall be referred to herein as the “Commissioned Yacht”).
ACY shall provide the Commissioning Services on the following terms and conditions:
- Commissioning Services.
Subject to the terms and conditions of this Agreement, ACY shall provide Commissioning Services with respect to the Yacht. Such Commissioning Services shall begin upon arrival of the Yacht at ACY’s designated commissioning facility specified in the Quotation as the Commissioning and Delivery Location (the “Commissioning Location”), following Initial Settlement pursuant to the Purchase Agreement or at such other time as determined by ACY.
Timing for completion of the Commissioning Services is commensurate with the scope of work specified in the Quotation, but also varies depending upon availability of parts, the weather, and the time of year. ACY shall use commercially reasonable efforts to minimize delays and provide notice of any delays to Purchaser, but Purchaser expressly acknowledges and agrees that any deadlines or timelines that may have been previously discussed between the Parties are illustrative only and not binding upon ACY.
This Agreement supersedes any and all prior agreements between the Parties.
- Change Orders.
Any changes to the Commissioning Services or Dealer Fit Options may only be accomplished by a written Change Order signed by ACY and the Purchaser. Any Commissioning Services deleted by a Change Order, which were the subject of a discount, shall have the corresponding discount deleted, in addition to incurring a 15% restocking fee.
Each Change Order shall be subject to the terms of this Agreement, including the payment terms contained in Section 5 of this Agreement, and the Purchase Agreement.
No Change Orders can be accepted nor are they valid within 3 to 6 months (depending on the options & the market status) of completion of the Yacht by the manufacturer.
No Change Order will be accepted without signed acceptance by an officer of ACY and payment by the Purchaser of a 50% non-refundable deposit.
- Purchaser’s Obligations During Commissioning.
(a) Insurance.
Purchaser acknowledges and agrees that title to, and risk of loss with respect to, the Yacht transfers pursuant to the terms of the Purchase Agreement. Accordingly, Purchaser shall maintain at all times adequate hull, liability, and other customary marine insurance on the Commissioned Yacht during the Commissioning Services and thereafter.
While ACY shall use commercially reasonable efforts to inspect the Commissioned Yacht and its equipment as part of the Commissioning Services, ACY makes no representation or warranty regarding the proper functioning or suitability of the Commissioned Yacht for Purchaser’s intended purpose except as expressly set forth herein.
(b) No Use of Yacht Prior to Acceptance.
Purchaser shall not use the Yacht, shall not enter or stay onboard the Yacht, shall not store personal items on the Yacht, and shall not otherwise impact the Commissioning process or the Commissioning Services.
Purchaser shall not engage other contractors to perform work on the Yacht until the Commissioning and Commissioning Services have been completed by ACY and the Purchaser has accepted the Yacht for Final Delivery pursuant to this Agreement.
Failure to comply with these requirements may result in interruption of work, rescheduling of work, delays, and additional costs for the Purchaser.
- Delivery and Commissioning Inspection of the Commissioned Yacht.
(a) Delivery Location.
Unless otherwise agreed by ACY in writing, delivery of the Commissioned Yacht shall be at the Commissioning Location.
(b) Commissioning Inspection.
The Parties agree that it is Purchaser’s sole and exclusive responsibility to ensure that the Commissioned Yacht is inspected and that all of its equipment is functioning properly, in each case in accordance with the Specifications as defined in the Purchase Agreement (collectively, the “Commissioning Inspection”).
Purchaser and/or Purchaser’s agent(s) may conduct the Commissioning Inspection during normal business hours for a period of three (3) business days (but no later than the time of Final Delivery (as defined below)) following notification from ACY that the Commissioning Services have been substantially completed (the “Commissioning Inspection Period”).
Purchaser is solely and exclusively responsible for (i) selecting the surveyor; (ii) determining the scope of the Commissioning Inspection; (iii) any damage to the Commissioned Yacht arising from or related to the Commissioning Inspection; and (iv) all costs of the Commissioning Inspection, including surveyor expenses, running expenses, haul out, dock charges, and subcontractor costs.
Unless ACY receives a Commissioning Defect Notice within the Commissioning Inspection Period, Purchaser shall be deemed to have accepted the Commissioning Services subject only to any remaining warranty obligations expressly provided herein or under applicable manufacturer warranties.
(c) Commissioning Defect Notices; Repairs.
Failure of Purchaser to deliver written notice to ACY of any defects with respect to the Commissioning Services (“Commissioning Defect Notice”) within three (3) calendar days after expiration of the Commissioning Inspection Period shall constitute a waiver of any right to submit Commissioning Defects and shall be deemed acceptance of the Commissioning Services.
Upon receipt of a Commissioning Defect Notice, ACY shall determine in its reasonable discretion whether the items noted are in fact Commissioning Defects.
If ACY determines that the items are Commissioning Defects, ACY shall use commercially reasonable efforts to remedy such Commissioning Defects in accordance with sound maritime practice at no additional cost to Purchaser.
In the event of a disagreement regarding whether an item is a Commissioning Defect, Purchaser may, at Purchaser’s expense, engage an independent surveyor mutually acceptable to the Parties.
ACY’s obligation with respect to any Commissioning Defects shall be limited to commercially reasonable efforts to remedy such Commissioning Defects in accordance with sound maritime practice within a reasonable time.
(d) Final Delivery.
Removal of the Commissioned Yacht from the Commissioning Location by Purchaser, Purchaser’s captain, crew, representative, or delivery agent (the “Final Delivery”) shall constitute acknowledgment by Purchaser that(i) ACY has substantially completed the Commissioning Services, subject to any remaining punch list items or warranty items; (ii) Purchaser accepts responsibility for operation and custody of the Commissioned Yacht; and (iii) any remaining items shall be handled in accordance with applicable manufacturer warranties and the limited warranties expressly set forth in this Agreement.
- Payments; Financing; Taxes and Duties.
(a) Payments.
Purchaser acknowledges that Initial Settlement for the Yacht shall occur pursuant to the Purchase Agreement.
Any remaining balances relating solely to the Commissioning Services, Dealer Fit Options, Change Orders, open account items, running expenses, holdbacks, or other post-settlement charges shall be paid in full in immediately available United States funds prior to Final Delivery of the Commissioned Yacht from the Commissioning Location (the “Final Settlement”).
The Commissioned Yacht shall not depart the Commissioning Location until all outstanding amounts owed to ACY have been paid in full.
(b) Financing.
Purchaser’s obligations are not contingent upon Purchaser obtaining financing. Purchaser represents and warrants that Purchaser will arrange financing, if necessary.
(c) Taxes; Duties.
Any sales or use taxes and/or duties due in connection with the transactions contemplated by this Agreement shall be the sole responsibility of Purchaser and shall be collected by ACY no later than Final Settlement.
- Title and Risk of Loss.
Title to, and risk of loss, damage, or destruction with respect to, the Commissioned Yacht shall transfer to Purchaser pursuant to the terms of the Purchase Agreement.
From and after such transfer, Purchaser shall be solely responsible for the Commissioned Yacht, including (a) protecting and insuring the Commissioned Yacht against loss and damage; (b) compliance with governmental or maritime requirements; (c) documentation, registration, and titling matters; and (d) selection of insurance carriers, financiers, captain, crew, and operational matters.
The Parties acknowledge and agree that ACY’s performance of Commissioning Services after transfer of title does not create a bailment, consignment, lease, or other custodial relationship.
- Representations and Warranties.
Purchaser acknowledges and agrees that acceptance of the Yacht, transfer of title, and transfer of risk of loss are governed exclusively by the Purchase Agreement.
ACY shall use commercially reasonable efforts to pass on any warranty related to the Commissioned Yacht or Commissioning Services; however, all manufacturer warranties are solely between Purchaser and the applicable manufacturer or vendor.
ACY warrants that its installation of after-market equipment shall be in accordance with applicable manufacturer instructions and that ACY’s workmanship shall be free from defect for one (1) year after Final Delivery.
- Limitations of Liability.
Except to the extent finally determined by a court to have resulted from ACY’s gross negligence or intentional misconduct, ACY’s aggregate liability shall not exceed the amount paid by Purchaser for the Commissioning Services.
Neither Party shall be liable for lost profits, indirect, incidental, consequential, punitive, or exemplary damages.
- Confidentiality.
All terms of this Agreement are confidential and shall not be disclosed except as required by law.
- Default.
Purchaser’s failure to make any payment when due or breach of this Agreement shall constitute an Event of Default.
ACY may suspend Commissioning Services during any Event of Default.
- Miscellaneous.
This Agreement shall be governed by the laws of the State of Maryland. Any disputes shall be brought exclusively in Anne Arundel County, Maryland.
THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY.