One Commercial Place, 20th FloorNorfolk, VA 23510

Phone: 757-857-4800Fax: 757-852-3232

www.maersklinelimited.com

USMMIU.S. Marine Management, Inc.A Maersk Line, Limited subsidiary

TERMS AND CONDITIONS FOR REGULAR OVERHAULS (ROH) AVAILABILITIES

1. DEFINITIONS .

The term "Operator “or "Prime Contractor" as used in the terms and conditions shall be deemed to mean USMMI, A Maersk Line, Limited ("MLL") subsidiary.The term “Owner”, “United States of America” and/or “Government” as used in these terms and conditions shall be deemed to mean Department of the Navy, Military Sealift Command (MSC).The term "Subcontractor" or “Contractor” is to be interpreted to mean a shipyard, repair facility, or other entity to which a subcontract or purchase order is awarded by USMMI, A Maersk Line, Limited subsidiary.The term "Lower-Tier Subcontractor" as used herein shall be understood to refer to the Subcontractors of the Subcontractor hired to repair the T-AGS vessel (including but not limited to original manufactures (“OEMs”) and directed subcontractors).The term "Subcontract" shall mean the resulting contract between USMMI, A Maersk Line, Limited subsidiary and the facility hired to repair the vessel.The term "Vessel" as used herein shall mean the USNS BOWDITCH.

2. WAIVER OF MARITIME LIENS . The Subcontractor agrees that nothing in or contemplated by this contract creates or shall be construed to create any right to assert a maritime lien on any vessel or to bring an action under the Public Vessels Act, 46 U.S.C. app. 981 et seq., or the Suits in Admiralty Act, 46 U.S.C. app. 941 et seq. Therefore, the Subcontractor agrees that it is not entitled to nor will it assert any type of lien, maritime or otherwise, on the vessel or any cargo transported by the Government under this contract. The Subcontractor further agrees that it will not take any action to seize, arrest, hold, or otherwise detain such vessel or cargo through any judicial process in the U.S. or any foreign country, and that it will insert this clause in all subcontracts at any tier and will expend any resources necessary to expeditiously enforce the provisions of this clause against such subcontractors.

In addition to the foregoing waiver of liens, there shall be no liens, asserted or permitted on any monies due to or to become due from the Government under this contract, and the Subcontractor agrees to insert this clause in all subcontracts at any tier and to expend any resources necessary to expeditiously enforce the provisions of this clause against such subcontractors.

The Subcontractor further understands and agrees that this contract shall create no privity between the Government and any subcontractor at any tier utilized or which may be utilized by the Subcontractor to provide services and/or equipment to the Subcontractor hereunder, and that further any such subcontractor shall be relying solely on the credit of the Subcontractor in entering into any such subcontract. The Subcontractor further agrees to insert this clause or similar alternate clause as may be provided by the Government, in all subcontracts at a tier and to expend any resources necessary to expeditiously enforce the provisions of this clause against such subcontractors.

3. RATED ORDER . FAR 52.211-15 DEFENSE PRIORITY AND ALLOCATION REQUIREMENTS

This is a rated order certified for national defense use, and the contractor shall follow all the requirements of the Defense Priorities and Allocations Systems regulation (15 CFR Part 700), Rating DOA3. This order is placed pursuant to Contract N00033-09-C-2504.

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4. INSURANCE . The Subcontractor shall, at its own expense, maintain and furnish ( and cause its Lower-Tier subcontractors to maintain and furnish) proof of proper casualty, liability insurance and Worker's Compensation Insurance, satisfactory to USMMI, against all claims arising from accidents or casualties to employees, workmen, trespassers, Licensees, and all other individuals and property occurring during performance of the work hereunder; it being expressly understood that the workmen engaged upon the work set forth in the Specifications hereunder shall at all times be employees of the Subcontractor and/or Lower-Tier subcontractor(s) and not of USMMI or Maersk Line, Limited. In case the amount, if any, received from such insurance is not sufficient to cover all liabilities for such accidents or casualties occurring through any act of default or neglect of the Subcontractor and/or any of the Subcontractor's agents, employees or Lower-Tier subcontractors, the Subcontractor shall nevertheless protect and save harmless, USMMI and Maersk Line, Limited and the Vessel from all such liabilities or claims and from any expense or charges in connection therewith. The cost for any and/or all of the above insurance is to be for the account of the Subcontractor.

The following insurance is required to be obtained by the Subcontractor at a minimum:

a. Workers’ Compensation Insurance & Employer’s Liability Insurance The Subcontractor shall:(1) Provide, before commencing performance under this contract, such workers’

compensation insurance or security as the Defense Base Act (42 U.S.C. 1651, et seq.) requires. This is to include but not limited to Worker's Compensation and Employer's Liability Insurance providing full coverage in accordance with the United States Longshoremen's and Harbor Worker's Act and State Worker's Compensation Laws.

(2) Continue to maintain such coverage until performance is completed. The Subcontractor shall insert, in all subcontracts under this contract to which the Defense Base Act applies, a clause similar to this clause (including this sentence) imposing upon those subcontractors this requirement to comply with the Defense Base Act.

b. Comprehensive General Liability Insurance for bodily injuries and property damage with limits not less than $5 million for each occurrence; and,

c. Ship Repairer's Legal Liability Insurance in an amount equal to the value of the Vessel, its equipment, moveable stores and cargo, and Government-owned materials and equipment for the repair, completion, alteration of, or addition to the Vessel in possession of the contractor, but in no event to exceed the sum of $5 million.

The insurance policies must contain the following provision:

"In the event of cancellation or material change in policy coverage, thirty (30) days prior written notice will be given to: “USMMI, A Maersk Line, Limited subsidiary, One Commercial Place, 20th Floor, Norfolk, VA 23510-2103."

The Subcontractor shall exercise reasonable care and use his best efforts to prevent accidents, injury or damage to all persons and property in and about the work done and to the Vessel or portion thereof upon which work is done.

d. The Subcontractor hereby indemnifies and holds harmless USMMI, Maersk Line, Limited (MLL), the Government and its agencies and instrumentalities, the Vessel and the Operator, against all suits, actions, claims, costs or demands (including, without limitation, suits, actions, claims, costs, or demands resulting from death, personal injury and property damage) arising or resulting in whole or in part, from the fault, negligence, wrongful act, or wrongful omission of the contractor, or any Lower-Tier subcontractor(s),

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his or their servants, agents, or employees, provided the Subcontractor’s obligation to indemnify under this subparagraph C shall not exceed the sum of $3 million on account of any one vessel. The Subcontractor shall, at his own expense, procure and thereafter maintain such casualty, accident and liability insurance, in such forms and amounts as may be approved by the Department of the Navy, insuring the performance of his obligations under this paragraph.

e. The Subcontractor shall be responsible for and make good at his own cost and expense any and all loss of or damage of whatsoever nature to, the Vessel (or portion thereof), its equipment, moveable stores and cargo and Government-owned materials and equipment for the repair, completion, alteration of or addition to the Vessel in the possession of the Subcontractor, whether at the Subcontractor’s plant or elsewhere, arising or growing out of the performance of the work, except where the Subcontractor can affirmatively show that such loss or damage was due to causes beyond the control of the Subcontractor (or its Lower-Tier subcontractor), was approximately caused by agents or employees of USMMI the Operator, MLL, Owner, or which loss or damage the Subcontractor (or its Lower-Tier subcontractor), by the exercise of reasonable care was unable to prevent; provided that the Subcontractor shall not be responsible for any such loss or damage discovered after completion of the work and redelivery of the Vessel to the Operator unless (i) such loss or damage is discovered not more than ninety (90) days after completion of the work and such redelivery; and, (ii) such loss or damage is affirmatively shown to have been the result of the fault or negligence of the Subcontractor. It is specifically agreed that the Subcontractor’s aggregate liability on account of loss of or damage to the Vessel, its equipment, moveable stores and cargo, and USMMI, MLL or Government-owned materials and equipment, shall in no event exceed the sum of $1 million provided, however, that as to such damage exceeding $3 million USMMI, MLL or the Government shall be subrogated to any claim, demand or cause of action against third persons which exist in favor of the Subcontractor, and the Subcontractor shall, if required, execute a formal assignment or transfer of such claims, demands, or causes of action; provided, further, that nothing in this paragraph contained shall create or give rise to any right, privilege or power in any person except the Operator, nor shall any person (except USMMI, MLL, Owner or Operator) be or become entitled thereby to proceed directly against the Government, or to join the Government as a codefendant in any action against the Subcontractor brought to determine the Subcontractor’s liability or for any other purpose.

f. The Subcontractor shall, at his own expense, procure and thereafter maintain casualty, accident and liability insurance, insuring the performance of his obligations under this contract, which names the United States, and operator as assureds or additional assureds and which waives any rights of subrogation against the United States, and the operator.

5. WORKMANSHIP .a. The Subcontractor shall perform all work and provide all plant facilities, labor, supervision,

services, equipment and materials and other such resources required to modify or repair the ship as specified in the individual work items and in accordance with the general technical requirements at the Subcontractor's own risk and expense.

b. The specification, accompanying drawings, references, specified technical manuals, and documents define the scope of the work to be performed. When contract guidance plans are provided, the Subcontractor shall prepare “working and/or as installed drawings.” Any variation from guidance plan shall be approved by the USMMI Representative and so documented by the Subcontractor prior to the commencement of work. Working drawings must be approved by the USMMI Rep prior to commencement of any work. Anything shown on the drawings and in the Technical Manuals but not described in the specification, or described in specification but not shown on the drawings or in the mechanical Manuals, shall be of like effect as if shown or

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described on or in both. In the case of conflict between the drawings and the specification, the specification shall govern. Any omission from the drawings or from the specification of details of work that are customarily performed will not relieve the Subcontractor of his obligation to perform such details of work and shall be included in the cost of the item.

c. All workmanship and materials used in the repair or alteration of the above Vessel shall be of highest quality in all respects and shall conform to the marine practices and requirements of any regulatory body with jurisdiction over the vessel, to the Contract Plans and Specification, and to the applicable item.

d. All materials and workmanship shall be subject to inspection and approval of the USMMI Representative at all times. Workmanship and materials found to be defective, or not in conformity with good marine practice, regulatory requirements, or this Specification and its associated approved drawings shall be cause for rejection and removal and reinstallation to the satisfaction of the USMMI Representative at the Subcontractor's expense.

e. The Subcontractor shall be responsible for pre-testing and final testing of all work and for the timely notification to the USMMI Representative and to regulatory body personnel when required, of all events that will require on-site inspection so that completion of the work will not be delayed.

f. All equipment, which presents a hazard to personnel, shall have suitable protective devices installed. These may be carrier guards or other approved devices and shall preclude personnel injury. Examples of equipment, which require protective devices, are those, which contain exposed rotating parts, fan blades, belts, pulleys, flywheels, etc.

g. ALL NEW MATERIAL MUST BE CERTIFIED ASBESTOS FREE . If a material, which contains asbestos, is inadvertently identified on a contract Guidance Drawing or other document, it shall be the Subcontractor's responsibility nevertheless to substitute an otherwise equivalent non-asbestos material. The Subcontractor is responsible for all costs associated with the provision of asbestos free material whether provided for in Specification items or not.

h. All equipment, furnishing, and material ripped out except that specified for temporary removal or otherwise designated by the USMMI Representative or the Specification shall remain the property of the Government.

i. All workmanship and material specified in the work item shall be of the highest quality in all respects and shall conform to the American Bureau of Shipping (ABS) standard, to the drawings, references, specified technical manuals, all notes contained therein.

j. The ship’s systems, furniture, furnishings, deck coverings or coatings that are damaged by the contractor shall be replaced, repaired or restored at the Subcontractor’s expense and as verified by the USMMI Representative.

k. Any equipment that is damaged by the Subcontractor during modification shall be replaced, repaired, or restored at the Subcontractor’s expense and to the satisfaction of the USMMI Representative.

l. The Subcontractor shall relocate existing ductwork, piping, wire ways, fixtures, equipment, etc., as necessary, to facilitate installations and modifications covered by specification. In the event that existing piping, ductwork, equipment, etc., must be temporarily removed to facilitate installation of new or modified work, Subcontractor shall remove and subsequently reinstall same as far as reasonably possible, to the satisfaction of the USMMI Representative.

m. The following definitions are applicable to all items and intended to outline the level of completeness, quality of workmanship and practice that are deemed the minimum acceptable level.

(1) The terms "install," "extend" and "modify" shall be construed to mean that the Subcontractor shall provide the piece of equipment to be installed, and, in addition, provide the materials and labor to install, connect, test, remove and reinstall interferences and effect a finished, fully operational installation. When "install" is used with reference to GFE/OFE, all

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conditions of the previous definition except the requirement to provide the piece of equipment are applicable.

(2) The term "replace" shall be construed to mean that the Subcontractor shall provide the piece of equipment to be installed, and, in addition, provide the materials and labor to install, connect, test, remove and reinstall interferences and effect a finished, fully operational installation. When "install" is used with reference to GFE/CFE, all conditions of the previous definition except the requirement to provide the piece of equipment are applicable.

(3) The term "rip out" or the words "ripped out" shall be construed to mean that the Subcontractor shall provide all labor and material to remove the unit, equipment, materials, or system in its entirety. Part of the removal process is to blank openings, restore insulation and paint, and remove brackets, hangers, foundations, etc.

(4) The terms “remove” and “removed,” mean that the Subcontractor shall provide all labor, materials and services to remove the unit, equipment, materials or system in its entirety.

(5) The word “reinstall” means that the Subcontractor shall provide all labor, services and incidental material such as fasteners, gaskets, welding rods, etc. to replace anything removed to “as original” configuration.

(6) The phrase "temporary removal" or "temporarily removed" shall be construed to mean that the Subcontractor shall provide all labor and material to remove the unit, piece of equipment, or system and to install the same unit, piece of equipment, or system in either the same location or elsewhere on the ship as described in the Specification Items.

(7) The term “relocate” means that the Subcontractor shall provide all labor and materials to remove the unit, piece of equipment, or system and to reinstall the same unit, piece of equipment, or system; including foundations, mounting brackets, securers, and related components to a new location as specified in the specification.

(8) The term “detach” means that the Subcontractor shall unbolt, remove pipe, and/or disconnect all attachments to the unit to enable the unit to be removed. All attachment points shall be tagged, identified and protected to facilitate reinstallation.

(9) The word “refurbish” means that the Subcontractor shall remove, disassemble, clean, and reassemble the unit, equipment, or system using new bolting materials, gaskets, and replacement parts; test the unit to demonstrate proper function and advise the USMMI Representative upon completion.

(10) The phrase “remove and replace interferences” means that the Subcontractor shall provide all labor, material and equipment necessary to remove and replace material or equipment to the degree necessary to accomplish the statement of work in each specification work item.

(11) The term "Specification" or "Work Package" shall include references specified in the applicable work item.

(12) The term "Section" shall mean a major part of the Specification and shall include a group of Items.

(13) The term "Item" shall mean a separately numbered part of the Specification describing a portion of the work to be accomplished.

(14) The term "Article" or "sub-item" shall mean a separately lettered part of an Item of the Specification. Articles in different Items may bear the same letter; hence to identify an article completely, the Item of which it is a part must be specified.

(15) The terms "CFM" and "CFE" shall identify Subcontractor Furnished Material and Equipment and are used interchangeably.

(16) The terms "tank" or "space" shall be construed to mean a tank onboard the ship, including, but not limited to: Fuel tank, ballast tank, lube oil tank, hydraulic oil tank, sewage tank, potable water tank, storage tank, holding tank, void, or cofferdam.

(17) The phrase "labor and material(s)" shall be construed to mean that the Subcontractor shall provide all labor, materials, plant facilities supervision, services, equipment, and other resources required to accomplish the assigned task(s).

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(18) The term "or equal" or “in kind” shall mean that components or equipment shall not only be equivalent in terms of quality and performance (flow rate, pressure, heat transfer characteristics, etc.) and services required (power, cooling water, HVAC, etc.) but also be compatible with interrelated systems and arrangements. Requests shall be made in writing to the USMMI Representative. The contractor shall provide manufacturer’s design and performance data on both the named product and the product requested by the Subcontractor to be used as “equal.” All equipment or machinery provided as “or equal,” shall be subject to the approval of the USMMI Representative.

(19) The term "Tempest Areas" refers to a select group of spaces that are secure areas. Free access to these areas during the overhaul period is not guaranteed.

8. MANUFACTURER’S REPRESENTATIVES . Subcontractor’s Responsibilities. Unless specified to the contrary, it is the Subcontractor's responsibility to arrange for the services of on-site manufacturer's representatives to provide technical assistance. Services required include:a. The Subcontractor shall provide the USMMI Representative with documentation of

manufacturer's representatives' authorization.b. The Subcontractor shall engage the services of the manufacturer's representative for on-site

supervision and inspections to certify that the equipment and/or system has been installed, modified, adjusted, disassembled, reassembled and tested in accordance with the manufacturer's requirements.

c. Specific installations, modifications, adjustments, etc., and tests requiring manufacturer's on-site representatives are as specified in individual items of the work specifications.

d. The service contract shall call for a written report to be submitted by the manufacturer’s on-site representative that fully states his observations and that specifically approves the Subcontractor's work as satisfactory to meet the requirements for warranty or explicitly enumerates existing deficiencies. Deficiencies shall be corrected. The Subcontractor is responsible only for installation deficiencies of GFE, not any GFE deficiency itself.

e. The Subcontractor shall provide the USMMI Representative with three (3) copies of the manufacturer's representative's report, not later than five (5) days after successful completion of all tests.

f. Unless specified to the contrary, the Subcontractor shall bear all costs of the manufacturer's representatives as part of the Contract.

g. Non-Contract Related Manufactures Representative. USMMI has the right to bring in a manufacturer’s representative/specialist to work various jobs not in the original contract as required by the Port Engineer.

9. MEETINGS . An arrival conference shall be held between Subcontractor's senior staff and the USMMI Representative on the first day after vessel arrival. Topics to be reviewed include:a. Subcontractor’s contact information b. Shipboard telephone numbersc. Emergency contact informationd. Scheduled work days and shifts e. Security Requirementsf. Rules and regulations within the Shipyard g. Rough or magnitude schedule of vessel shifts, if applicable

Daily meetings shall be held between the USMMI Representative and the Subcontractor’s senior staff to review daily “Plans of the Day”. Meeting location and time shall be agreed upon between the USMMI Representative and Subcontractor. Subcontractor shall furnish “Plans for the Day”, which shall cover work to be performed on each item, and specify the following: a. Hot work locationsb. Regulatory Inspection schedules

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c. Quality Assurance Checkpoints for the USMMI Representatived. Quality Assurance Checkpoints for the USMMI Representative and Regulatory Bodiese. Ship’s force assistance requirementsf. Second Shift Plan of the Day shall be turned over to the Port Engineer prior to the end of the first

shift.

When the period of performance is longer than two weeks, a weekly progress meeting shall be held on Thursday afternoons. At this meeting, the Subcontractor shall provide, in writing, a progress report listing the percentage of completion for each item, including change orders. Advanced copy shall be provided to the Port Engineer. Approximately eight shipboard representatives shall be in attendance for this meeting. The Subcontractor shall be required to furnish sufficient copies for all attendees. Ensure that location is suitable to accommodate all attendees.

10. CHANGES . Whenever the scope of work on any bid specification item exceeds the detailed steps described in the Statement of Work and/or the intent of the specification, a change order shall be issued to the Contractor detailing the additional steps that must be undertaken to satisfactorily complete the item. Any additional work, not related to the bid specifications, that Owners desire to have accomplished shall be initiated by a change order. Change orders may be initiated only by the USMMI Port Engineer and will remain invalid until written in detail, negotiated and signed by USMMI and any other party so required by the USMMI Representative. Whenever a change order becomes necessary, upon notification by the USMMI Port Engineer, Subcontractor shall immediately, and in good faith, enter into negotiations with USMMI to arrive at a mutually agreeable price for the performance of the work.

Pricing of Change Orders - Change orders shall be priced on the same basis as bid items. Where a change order is similar or equivalent in most respects to a bid item, the price shall be a percentage of the bid price directly proportional to the amount of labor/material required to accomplish each job. Where no similarity exists between a change order and an existing bid item, the hourly labor rates quoted (for the accomplishment of additional work) shall prevail and all materials used shall be supported by invoices or vendor quotations.

11. INSPECTION AND SUBCONTRACTOR’S INSPECTION RECORDS . When specification items require that a USMMI representative accept and witness in progress work, completed work, testing or inspections, the Subcontractor shall provide written notification to the USMMI Representative at least four (4) hours but no more than 24 hours in advance of the work sequence to be witnessed or approved. When work to be witnessed or approved is to occur after normal day shift working hours or on a weekend, the USMMI Representative shall be notified at least four (4) hours before the end of the last preceding regular work shift.

The USMMI Representative may designate work sequences, in addition to those identified by the specification item, that are to be observed or inspected by a USMMI Representative or regulatory body. The aforementioned notification requirements shall also apply to these designated work sequences.

The Subcontractor is responsible for performing the tests and inspections required by the specification or those considered necessary to ensure product conformity to the satisfaction of the USMMI Representative.

The Subcontractor shall prepare a test and inspection record (TIR) for each specification item in the contract which requires productive work. TIRs shall be developed for each specification work item prior to production of work being accomplished for that item. Each TIR shall include the following:

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a. Each TIR shall be identified by specification number. Ship and work item number.b. Each TIR shall provide identification of each unit to be inspected by name, number, and location

(e.g. number 2 SSDG, port condenser, cargo winch number 12, etc.). Where multiple units are contained within a work item, an entry on the TIR shall be made for each unit.

c. Each TIR shall list the specific inspection attributes, methods of inspection or test and the acceptance/rejection criteria. Acceptability or rejection of each inspection attribute shall be indicated and shall be signed and dated by authorized personnel. Each TIR shall be updated as work progresses and maintained current to within 24 hours.

d. Inspection Attributes. The Subcontractor shall list, on TIR, all tests and inspections contained in each work item. In addition, the Subcontractor shall include the following types of inspection, as applicable in the TIR even though they may not be identified as a required inspection by the work item:

e. Pertinent tolerances, clearances and conditions found upon disassembly/opening of equipment, machinery components or spaces.

f. In progress verification, including refit/final tolerances, clearances, alignment, tests, cleanliness and internal condition prior to closure, fit-up and welding.

g. Verification of item completion including prerequisites for operational testing, i.e. lubrication, continuity checks, rotation, and final test with supporting data.

The Subcontractor shall maintain records of completed TIRs including inspection records generated by subcontractors for a period of 90 days after contract completion. The records shall document the specific inspection actions or test and shall provide objective quality evidence of completed work and form the basis for acceptance of the work.

The records shall include documentation of rejected work, corrective action taken and objective quality evidence which the subcontractor offers as assurance of the conformance to the specifications. Records provided by the subcontractor may be incorporated into the inspection and test documentation, or if maintained as separate documentation, shall be referenced therein and be readily available for review by the government. The inspection record shall, for each work item, reference any quality deficiency records (QDR) issued by USMMI for which a written response is required from the Subcontractor to USMMI. During the performance of the contract, records shall be maintained at a location accessible to the site of the work and be available for review by during work hours. Subcontractor's inspection records are an integral part of the work, therefore, USMMI will consider the work item incomplete if the Subcontractor's documentation and records are not complete.

Records shall include all TIRs, subcontractor inspection reports, material certificates and receipt inspection records. With respect to subcontractors, the Subcontractor shall establish: a. Procedures for selection of qualified subcontractors based on evaluation and assessment of the

subcontractor's ability, quality control, facilities and available resources, as appropriate, to perform the specific type of work.

b. Procedures for transmittal of all technical, design and quality requirements to the subcontractor. Quality requirements shall include the inspections and tests required by the work item as well as contractor inspection at the subcontractor's plant when such action is necessary to assure product conformance.

c. The Subcontractor shall invoke, and require subcontractors and suppliers to invoke, adequate inspection systems that ensure the required quality of materials, parts, components, and services for end-use in this ship repair. USMMI shall be permitted to monitor the subcontractor's system for inspecting subcontractors.

Only calibrated equipment shall be used to perform tests and inspections.

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a. Test and measuring equipment shall be within recognized calibration limits and shall be calibrated against standards traceable to the national bureau of standards.

b. Calibrated equipment shall be identified with a label stating date of calibration, due date and certifying agency.

c. Calibrated equipment shall be used for all pressure and weight testing, measurements of electrical waves, balancing operations, tachometers and other indirect measuring devices used for inspection or to record data or dimensions required by specifications.

12. DELIVERY, CARE AND REDELIVERY OF VESSEL . The Operator shall deliver the ship to the Subcontractor's plant for the purpose of the accomplishment of the work as described in the specifications. Signed receipt of the ship shall be provided by the Subcontractor. Signed receipt for return of the ship back to USMMI shall be provided by the Subcontractor. The delivery date and return date and time shall be agreed upon by USMMI and the Subcontractor.

a. In addition to the foregoing, the Subcontractor shall: (1) Repair or replace all ship's parts, equipment, systems, etc., damaged or destroyed by the

Subcontractor and assume expense for repairs or replacement. (2) Permit the free movement of properly identified employees and materials of the Government

to all points of the ship at all times during the contract period, including, but not limited to manufacturer's technical representatives subcontracted by USMMI and the Government.

(3) Clean, on a daily basis, to the satisfaction of the Captain and Chief Engineer, those areas of the ship where work is being performed in accordance with this specification. Keep the ship in a clean and sanitary condition by removing all debris, garbage and sweeping all passageways daily (including Saturdays, Sundays, and holidays).

(4) Refrain from discharging or throwing hazardous materials, scrap materials, oil, etc., into the water and shall dispose of same in a proper manner in accordance with applicable environmental laws and regulations.

(5) Assume responsibility for the protection of the ship's interiors from weather, fire, damage by shipyard personnel, theft, dirt, foreign substances, etc., save to the extent that damage results from any act or omission on the part USMMI crew members.

(6) Store in a suitable container for flammable liquid storage, all paint and flammable liquids used by the Subcontractor and those that are stored aboard the ship by the Subcontractor, including any paint furnished by Owner for use by the Subcontractor.

(7) Maintain rigid control of welding and grounding for the protection of the hull, stern tubes and other hull appendages and ensure that the welding polarity and ground connections of welding machines used on the ship or on other ships in the immediate vicinity, or on the pier or wharf to which the ship is moored, do not damage any part of the ship.

b. Upon completion of all work Subcontractor shall redeliver the ship to the USMMI Port Engineer, after successful tests, dock trials, and sea trials, complete and ready for service in full accordance with the Subcontract.

c. Before redelivery of the ship, Subcontractor shall complete all tests and inspections required. The existence of a large number of uncorrected minor deficiencies will be sufficient cause for rejection of delivery. The existence of any major uncorrected Subcontractor responsible deficiency item that affects the safe navigation or the immediate efficient use of the ship for its intended service will be sufficient cause to reject redelivery of the ship pending the correction of the item or items concerned, and the resulting delay in redelivery shall be a matter of Subcontractor responsibility. All deficiencies shall be corrected prior to redelivery.

d. To ensure that the ship is in proper condition for redelivery, Subcontractor shall conduct a final joint survey of the ship with the USMMI Port Engineer no less than three days prior to the scheduled redelivery date. This survey will include review of the status of completion of acceptance survey deficiencies and items developed after the acceptance survey. Based on this

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survey, Subcontractor shall reach an agreement with the USMMI Port Engineer as to the extent of further cleaning and correcting of minor deficiencies that must be completed prior to the USMMI Port Engineer accepting redelivery of the ship, and as to the work that may, as a practical matter, be deferred for accomplishment until after redelivery of the ship. In connection with this agreement the Subcontractor shall redeliver the ship free of all known defects and deficiencies.

13. HANDLING OF HAZARDOUS MATERIALS. Where Work is performed on existing asbestos, lead, PCB, or other hazardous materials; Subcontractor shall be entitled to a Change Order for the costs of abatement, disposal and handling of asbestos, lead, PCB, or other hazardous materials.

14. FORCE MAJEURE. Events beyond the reasonable control of the Parties which actually preclude or delay performance of obligations under this Subcontract or render the further performance of the obligations impossible, including but not limited to acts of God, acts of war or hostile action, acts of governments (including Government), rulers, potentates, and sovereigns in either their sovereign or contractual capacity, acts of public enemy, blockades and revolutions, riots, fires, explosions, floods, embargoes, strandings, strikes, concerted acts of workers, lockouts, boycotts, and other labor disturbances, sabotage, vandalism, earthquakes, and landslides, epidemics, unusually severe weather, delays in delivery of suppliers, material, or equipment, which delays Subcontractor cannot avoid, by reasonable precaution, shall be deemed a Force Majeure event. Neither Party to this Subcontract shall be deemed to be in default of its obligations nor shall be liable for loss or damage while the performance thereof is prevented by Force Majeure. In the event that either Subcontractor or Operator is unable to complete this Subcontract due to the physical destruction of Subcontractor’s yard or the Vessel due to events of a Force Majeure, Operator shall pay for the Work accomplished and immediately remove the Vessel, including all wreckage, from the Subcontractor’s facility unless the Parties mutually agree otherwise. No other remedy shall be available to the Parties. If the completion of the Work is delayed by one or more Force Majeure events, the final Redelivery date shall be extended by a period equal to one (1) day for each day, or portion thereof, of actual delay in Redelivery caused by the Force Majeure event.

CONTRACT CLAUSES

1. CHANGES. The Operator may at any time, by written order, (hereinafter called a "Change Order") without notice to the Subcontractor's sureties, make such changes (including additions and deletions) in the Specifications for work required by the Subcontract as are within the general scope of the subcontract. If any such change causes an increase or decrease in the cost of, or the time required for performance of the subcontract, an equitable adjustment shall be made in the price or time of performance or both and the subcontract shall be amended in writing accordingly. Upon receipt of the Change Order, the Subcontractor shall promptly prepare and submit to the Operator an estimate of any increase or decrease in the cost of, or the time required for, performance of the subcontract. This estimate shall be supported by a breakdown in such form and reasonable detail as the Operator may specify. The Subcontractor must assert its right to an adjustment under this clause within twenty (20) days from the date of receipt of the written order.

2. DEFAULT. If the Subcontractor fails to perform the work within the time specified in the contract or any extension thereof, or otherwise fails to perform the contract in accordance with its terms, or so fails to make progress as to endanger performance of the subcontract, the Operator may terminate the contract in whole or in part by means of a written notice of Default.If the Operator terminates the work in whole or in part as provided in the paragraph above, the Operator may arrange for the completion of the work so terminated, and the Subcontractor shall be responsible for any cost incurred therein.

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3. LIQUIDATED DAMAGES. In the event that the Subcontractor fails to complete performance of the subcontract, as modified by mutual agreement, within the time specified in the subcontract or any authorized extension thereof, the actual damage will be impossible to determine, and in lieu thereof, the Subcontractor shall pay to the Operator (or there shall be deducted from the subcontract price) as fixed, agreed, and liquidated damages, in the amount of $52,717. The liquidated damages amount shall apply for each day of delay, and a proportional part of that amount shall accrue for each fractional day of delay computed to the nearest hour. For purposes of this paragraph, a day shall mean a 24-hour period commencing with the time set for completion of work and extending through each day of the week including Saturdays, Sundays, and holidays. If the subcontract is terminated in accordance with the "DEFAULT" clause of these Terms and Conditions, the Subcontractor shall be liable, in addition to the excess costs provided in the "DEFAULT" clause, for the above described liquidated damages accruing until such time as the Operator may reasonably provide for completion of the work involved. The Subcontractor shall not be liable for any failure to perform the work, if such failure arises out of causes beyond the control and without the fault or negligence of the Subcontractor.

The Subcontractor shall allow for delays due to normal prevailing weather conditions as per data from NOAA. Requests under this clause for relief due to extraordinary climatic conditions must be documented and submitted by the contractor for consideration. The Subcontractor shall submit with its proposal a historical weather data summary of the last 5 years for the period of the proposed contract. Such data shall be obtained from NOAA (National Climatic Center, Ashville, NC) and included in the Subcontractor’s proposal. The Subcontractor shall also provide an estimate, included with their proposal and based on the NOAA historical weather data, of the number of inclement weather days anticipated during the Subcontract period and included in their respective proposal as the number of days able to be absorbed with no delay to the Subcontract performance period and calendar days proposed. No claims under this provision will be allowed unless the number of inclement weather days exceeds the offer total proposed days able to be absorbed as a result of inclement weather and above and beyond the historic weather data.

4. LABOR DISPUTES. Whenever the Subcontractor has knowledge that any actual or potential labor dispute or labor negotiation is delaying or threatens to delay the timely performance of this contract, the Subcontractor shall immediately give notice thereof, including all relevant information with respect thereto, to the Operator. The Subcontractor agrees to insert the substance of this clause, including this paragraph, in any Subcontract hereunder as to which a labor dispute may delay the timely performance of this subcontract; except that each such Subcontract shall provide that in the event its timely performance is delayed or threatened by delay by an actual or potential labor dispute, the second-tier subcontractor, or the Subcontractor, as the case may be, shall provide notification and all relevant information with respect to such dispute.

5. FEDERAL ACQUISITION REGULATIONS FLOWDOWN CLAUSES. All flow-down clauses cited below are hereby modified to make all references to the Government or the Contracting Officer refer instead to USMMI, A Maersk Line, Limited subsidiary and all references to the Subcontractor will refer to the subcontractor to which this subcontract or solicitation is addressed. FAR clauses may be view at the following web sites; http://farsite.hill.af.mil

52.244-6 Subcontracts for Commercial Items.As prescribed in 44.403, insert the following clause:SUBCONTRACTS FOR COMMERCIAL ITEMS (MAR 2015)

(a) Definitions. As used in this clause- 11

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“Commercial item” has the meaning contained in Federal Acquisition Regulation 2.101, Definitions.

“Subcontract” includes a transfer of commercial items between divisions, subsidiaries, or affiliates of the Contractor or subcontractor at any tier.

(b) To the maximum extent practicable, the Contractor shall incorporate, and require its subcontractors at all tiers to incorporate, commercial items or nondevelopmental items as components of items to be supplied under this contract.

(c)(1) The Contractor shall insert the following clauses in subcontracts for commercial items:

(i) 52.203-13, Contractor Code of Business Ethics and Conduct (Apr 2010) (41 U.S.C. 3509), if the subcontract exceeds $5,000,000 and has a performance period of more than 120 days. In altering this clause to identify the appropriate parties, all disclosures of violation of the civil False Claims Act or of Federal criminal law shall be directed to the agency Office of the Inspector General, with a copy to the Contracting Officer.

(ii) 52.203-15, Whistleblower Protections Under the American Recovery and Reinvestment Act of 2009 (Jun 2010) (Section 1553 of Pub. L. 111-5), if the subcontract is funded under the Recovery Act.

(iii) 52.219-8, Utilization of Small Business Concerns (Oct 2014) (15 U.S.C. 637(d)(2) and (3)), if the subcontract offers further subcontracting opportunities. If the subcontract (except subcontracts to small business concerns) exceeds $650,000 ($1.5 million for construction of any public facility), the subcontractor must include 52.219-8 in lower tier subcontracts that offer subcontracting opportunities.

(iv) 52.222-21, Prohibition of Segregated Facilities (Apr 2015).

(v) 52.222-26, Equal Opportunity (Apr 2015) (E.O. 11246).

(vi) 52.222-35, Equal Opportunity for Veterans (Jul 2014) (38 U.S.C. 4212(a));

(vii) 52.222-36, Equal Opportunity for Workers with Disabilities (Jul 2014) (29 U.S.C. 793).

(viii) 52.222-37, Employment Reports on Veterans (Jul 2014) (38 U.S.C. 4212)

(ix) 52.222-40, Notification of Employee Rights Under the National Labor Relations Act (DEC 2010) (E.O. 13496), if flow down is required in accordance with paragraph (f) of FAR clause 52.222-40.

(x)(A) 52.222-50, Combating Trafficking in Persons (Mar 2015) (22 U.S.C. chapter 78 and E.O. 13627).

(B) Alternate I (Mar 2015) of 52.222-50 (22 U.S.C. chapter 78 and E.O. 13627).

(xi) 52.222-55, Establishing a Minimum Wage for Contractors (E.O. 13658) (Dec 2014).

(xii) 52.225-26, Contractors Performing Private Security Functions Outside the United States (Jul 2013) (Section 862, as amended, of the National Defense Authorization Act for Fiscal Year 2008; 10 U.S.C. 2302 Note).

(xiii) 52.232-40, Providing Accelerated Payments to Small Business Subcontractors (Dec 2013), if flow down is required in accordance with paragraph (c) of FAR clause 52.232-40.

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(xiv) 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (Feb 2006) (46 U.S.C. App. 1241 and 10 U.S.C. 2631), if flow down is required in accordance with paragraph (d) of FAR clause 52.247-64).

(2) While not required, the Contractor may flow down to subcontracts for commercial items a minimal number of additional clauses necessary to satisfy its contractual obligations.

(d) The Contractor shall include the terms of this clause, including this paragraph (d), in subcontracts awarded under this contract.

6. TERMINATION FOR CONVENIENCE. The subcontract may be terminated without liability to the Operator for any uncompleted work at the sole election of USMMI. Operator shall further be obligated to pay Subcontractor for all reasonable demobilization costs and redelivery, including committed costs for materials and materials and equipment which have been ordered by Subcontractor plus any reasonably incurred settlement expenses; such as restocking, cancellation fees from supplier and like; provided, further, that Subcontractor shall use its best efforts to negotiate with any supplier of such materials or equipment the lowest possible cancellation fees.

7. CLAIMS AND REQUESTS FOR PRICE ADJUSTMENTS. In the event that the Subcontractor submits a claim or request for adjustment to the subcontract price, for performance of work under any resultant subcontract, the Subcontractor shall provide:

a. A description of work required by the Subcontract, including citations to the Subcontract before the factual events which led to the claim;

b. A detailed report on the status of the work as originally required by the Subcontract;c. A description of new, required, or other events which led to the claim;d. A list of components, equipment, and other identifiable property involved in the claim is

to be provided. The status of manufacture, procurement, or installation of shipyard/industrial assistance subcontractor-furnished property is to be indicated. The status of specified design and production of work is to be indicated. Items of raw material, purchased parts, components, and other identifiable hardware, which are made excess by the change and which are not to be retained by the Subcontractor, and are listed for later disposition, shall be included;

e. A description of work completed which is deleted, or will be deleted, by events which led to the claim;

f. A description of interferences and inefficiencies involved in performing the work;g. A description of each element of work disruption and exactly how work has been or will

be disrupted, including:(1) The calendar period of time during which disruption occurred, or will occur;(2) Area(s) aboard the ship where disruption occurred, or will occur;(3) Trade(s) disrupted, with a breakdown of man-hours for each trade;(4) Scheduling of trades before, during, and at the period of disruption;(5) Description of measures taken to lessen the disruptive effect.

h. Delay in delivery attributable solely to the events which led to the claim;i. Other new work attributable to the events which led to the claim;j. Supplementing the foregoing, a narrative statement of the direct causal relationship

between any alleged act or omission of the Vessel Operator or the Government and the claimed consequences thereof, cross-referenced to detailed information provided as required above;

k. A statement of costs budgeted for the work as originally specified under the contract (prior to the events leading to the claim).

l. All subcontractor claims or requests for adjustment to the subcontract price must be 13

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submitted to the Operator within six (6) months of the alleged change, change order, accrual of any other basis for a claim, or request for adjustment under the subcontract, or within sixty (60) days of redelivery. This time frame does not change the required shorter time period of twenty (20) days to assert any right to an adjustment which is contained in the "Changes" clause. The information furnished for each claim shall be in sufficient detail to permit the Vessel Operator to make a determination and take the appropriate contract action. The shipyard/ industrial assistance contractor shall have the obligation to timely deliver to the Vessel Operator any requested additional information concerning the claim.

8. DISPUTES . a. Concerning any claim that arises between the Subcontractor and the Operator for which

the Government is or may be liable, the Subcontractor agrees that it will prepare its claim and will timely present it to the Operator for submission to the Government under the Contract Disputes Act of 1978, the disputes clause of the Prime Contract, or any other disputes resolution procedures of the Prime Contract. The Operator agrees that it will cooperate with the Subcontractor in presenting such claim to the Government, and will pay to the Subcontractor any amounts recovered for the subcontractor on the claim, but the Operator is not required to allow such claim to proceed in the Operator's name under the Operator's sponsorship.

b. The Operator shall not have any obligation to submit a claim by the Subcontractor that the Operator does not believe in good faith meets all applicable requirements pertaining to the submission of claims to the Government. The Subcontractor agrees that it is responsible for all costs, including attorneys' fees, required to make such a claim against the Government and that this remedy shall be the Subcontractor's sole and exclusive remedy in lieu of any claim directly against the Operator and/or its bonding company pursuant to the Miller Act, 40 U.S.C. § 270 or pursuant to any other law or regulation, regardless of the decision on the claim.

c. The Operator and the Subcontractor agree that any disputes arising under or related to this Subcontract, not included in subparagraph (a) above or where the Operator has elected not to sponsor a Subcontractor's claim discussed in subparagraph (a) above, will be submitted to the United States District Court for the Eastern District of Virginia, or the Circuit Court for the City of Norfolk. The Operator and Subcontractor consent to venue and jurisdiction in either of the above-referenced Courts. To the extent that the federal common law of Government contracts is not dispositive, the laws of the Commonwealth of Virginia apply.

d. No litigation which concerns a dispute arising under or relating to these Terms and Conditions and applicable subcontract may be commenced by the subcontractor more than ONE YEAR after the last delivery or furnishing of materials and services by the subcontractor under the subcontract including any change orders. The Subcontractor agrees pending resolution of any dispute to proceed diligently with performance, including any change orders. The Subcontractor shall provide the Operator with immediate notice of any legal action, libel in Admiralty, or claim of any nature which may be brought against the Government, the Operator, or the Operator's underwriters and arising during the performance of and/or as a result of this subcontract.

9. SUBCONTRACTOR CERTIFIED COST OR PRICING DATA. Except when the price is based on adequate price competition, on established catalog or market prices of commercial items sold in substantial quantities to the general public, or are set by law or regulation, certified cost or pricing data shall be submitted before awarding any subcontract, purchase order, or modification expected to exceed $650,000. When subcontractor certified cost or pricing data is required pursuant to the Truth in Negotiations Act, 10 U.S.C., 2306a(a), 41 U.S.C. 254b and Federal Acquisition Regulation (FAR)

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15.403-4 and 15.403-3 (a)(1), such data shall be certified to be accurate, complete, and current as of the date of final price agreement. Subcontractor agrees to provide such data in the form required by the Contracting Officer and certify such data utilizing the Certification at FAR 15.406-2. When certified Subcontractor cost or pricing data is submitted, Subcontractor indemnifies USMMI, A Maersk Line, Limited subsidiary for liability for any defective Subcontractor cost or pricing data.

10. INVOICING TERMS. The Operator shall pay to the Subcontractor the Subcontract price, as it may be modified in accordance with the terms of the Subcontract, in the manner hereinafter set forth. The Subcontractor may submit to the Operator, from time to time, but not more frequently than every 30 days, invoices covering work done on the Vessel, and the Operator shall pay the amount thereof to the Subcontractor in accordance with this paragraph on account of the Subcontract price on the basis of the value of the work accomplished. The Operator shall not be required to pay invoices under this paragraph aggregating less than $1,000.00. No invoices shall be paid by the Operator unless the work covered by the invoice has been inspected and accepted as herein provided. The Operator shall withhold a sum equal to 5 percent of each invoice until final payment hereunder. Payment terms shall be net 30, with payment for invoices being tendered no later than the 30th day following receipt of a proper invoice.

11. INVOICE. For purposes of this subcontract, a proper invoice shall be one which the original invoice is submitted on company letterhead and contains an original signature from an authorized representative of the company. Subcontractor shall prepare a final invoice for all work performed in accordance with the subcontract specifications and any USMMI approved changes thereto and present the final invoice to the USMMI Representative for validation and approval. Within 30 days of receipt, the invoice will be paid provided that it is submitted in accordance with the Terms and Conditions stated herein and such invoice is approved by the USMMI Representative. In the event of a dispute, USMMI reserves the right to remit the undisputed part and withhold payment of the disputed amount until such time the dispute is resolved.

The final invoice shall contain the following: a. Section 1: Original Fixed Price Items

(1) Ship’s name and Purchase Order number (2) Item #: Title of Item (3) Total item cost which shall include labor, material, and subcontractor invoices.

b. Section 2: Changes and Extras:(1) Comprehensive Spreadsheet (Microsoft Excel format or equivalent) that shows all original

items plus applicable change orders assigned to the original items or, if new work, the applicable work item number

(2) Change Order Form, signed by Contractor, the attending USMMI Port Engineer, and wherever appropriate, the MSC Port Engineer.

c. Section 3: Invoice Cover Sheet (1) Final agreed to amount for all work performed (2) Total Invoice amount

The Subcontractor shall submit an original invoice and three copies to the address designated in the contract to receive invoices. An invoice must include the following:a. Name and address of the Subcontractor;b. Invoice date and number;c. Contract number, contract line item number and, if applicable, the order number;d. For material invoice a description, quantity, unit of measure, unit price and extended price of the

items delivered; for a Service invoice the original bid price of each individual work item and the prices of all approved change orders, and the total price for all work items.

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e. Terms of any discount for prompt payment offered;f. Name and address of official to whom payment is to be sent;g. Name, title, and phone number of person to notify in event of defective invoice; andh. Taxpayer Identification Number (TIN). The Contractor shall include its TIN on the invoice only

if required elsewhere in this contract.i. Electronic funds transfer (EFT) banking information for subcontract if approved.

If the Subcontract has been authorized for electronic invoice, a proper invoice must also:a. Include the notation “Certified Original Invoice”.b. Must be emailed to USAMLLAP@MLLNET.com with the Contracting Manager copied on the

email.

12. WARRANTY OF SUPPLIES AND SERVICES . In the event that any work done or material furnished by the Subcontractor (or its Lower-Tier Subcontractor) on or for the Vessel or the equipment thereof shall, after completion of all work and within 180 days thereafter, prove defective, deficient or not in conformity with the Specifications, such defects or deficiencies shall be corrected and repaired by the Subcontractor or at his expense to the satisfaction of the Operator.

a. Warranty Holdback Period – The Contracting Officer reserves the right to holdback five percent (5%) of the contract value for a period of 180 days to cover potential warranty claims during this period. The Contractor will allow one half of the 5% to be invoiced after 90 days with the remaining balance to be invoiced after the 180 day period. These terms can be altered at the discretion of the Contracting Officer.

13. NOVATION . Each offeror must certify that he intends to carry out the scope of work. Assignment or transfer of the award is not permitted except when judged to be in the best interest of the Operator and approved in writing by the Operator.

14. COMMUNICATIONS.a. Except as specified in paragraph (b) below, no order, statement, or conduct of USMMI, MLL or

Government personnel who visit the Subcontractor's facilities or in any other manner communicates with Subcontractor personnel during the performance of the contract shall constitute a change under the "CHANGES" clause of this contract.

b. The Subcontractor shall not comply with any order, direction, or request of personnel unless it is issued in writing and signed by the Contracting Officer, or is pursuant to specific authority.

The undersigned agrees to the above terms and conditions. Exceptions must be submitted in separate correspondence and returned with your initial bid.

Name and Address of Firm: Date: _____________________________

_____________________________________ By: _____________________________________(Signature)

_____________________________________ Title: ___________________________________

____________________________Zip_______ Phone: _________________________________

Email: __________________________________

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Mr. Rick Hope

USMMI, A Maersk Line Limited Subsidiary

One Commercial Place, 20th FloorNorfolk, VA 23502-4952Phone: (757) 416-7076,

Facsimile: (757) 852-3250, ÊE-mail: Rhope@mllnet.com Ê

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