B) without limiting the generality of the previous paragraph, seller agrees to replace or correct promptly, without expense to the buyer, any supplies or equipment not conforming to the foregoing requirements when notified by buyer thereof during the longer of a period of twelve (12) months after delivery thereof, or such longer warranty period as may be provided by seller. In the event of seller's failure to correct or replace supplies as required herein, buyer may correct or replace such supplies and charge seller the cost thereof. No approval, inspection, or failure to reject by buyer or any inspector shall affect seller's obligation under this warranty.

6. Disputes:

A) Any controversy or claim arising out of or relating to this order shall be settled by arbitration in Boston, Massachusetts, in accordance with the commercial arbitration rules of the American Arbitration Association in effect on the date of notice of arbitration, and judgment upon the award may be entered in any court of competent jurisdiction. At the request of either party, the arbitration panel shall consist of three (3) arbitrators, one of whom shall be chosen by each party, and the third chosen by the arbitrators designated by the parties. The parties shall produce records and make such employees available as witnesses as the arbitrators may direct or as may be required by law. Each party shall sustain its own costs and expenses, and one half of the fees and cost of arbitration. Enforcement of this paragraph in any foreign country shall be available to the extent provided by the united nations convention on the recognition and enforcement of foreign arbitral awards, whether or not such country is party thereto.

B) Seller consents, at the election of the buyer: 1) to the joinder of any interested party as a party in any arbitration under this order, and 2) to the joinder of seller as a party in any arbitration or judicial proceeding between buyer and any interested party in which it is necessary or appropriate to obtain a determination or ruling as to any matter arising in connection with this order, provided that seller is given reasonable notice and a reasonable opportunity to be heard in such proceeding. As used in this paragraph, "interested party" means a person or entity designated at any time by buyer as having an interest in the operation or ownership of any vessel in connection with which the supplies are intended to be used.

C) the united states government shall not be bound by resolution of a dispute pursuant to article 6 of the terms and conditions.

7. TERMINATION:

Buyer may terminate all or any portion of this order at any time, irrespective of whether or not a default has occurred. It shall be considered an event of default if: a) seller fails to deliver the goods at the time specified in this order, b) any or all of the goods fail to comply fully with the requirements of this order, c) seller fails to comply with any provision of this order, d) buyer determines that seller's performance pursuant to this order is in doubt and seller fails to provide buyer adequate assurance of performance within ten (10) days after buyer's written notice thereof, or e) seller makes any statement or performs any act which buyer reasonably believes to be a repudiation of this order in whole or in part. Seller shall continue performance to the extent the order is not terminated. Upon termination hereunder, buyer may procure goods from another source upon such terms as buyer deems appropriate and, if such termination was pursuant to any default, seller shall be liable to buyer for any costs or expenses incurred by buyer in excess of the contract price or the portion of the contract price applicable to any portion of the supplies subject to partial termination. If such termination was not pursuant to a default, an equitable adjustment will be agreed upon to compensate seller for work performed, provided, however, that the total of all payments due under this order shall in no event exceed the order price, and seller shall not be entitled to anticipatory profits. If buyer terminates this order in connection with a complete or partial termination or change of the contract pursuant to which buyer agreed to operate the vessel for which the supplies are intended, seller shall not be entitled to any adjustment which would cause the total of all payments due under this order to exceed the amount allowed to buyer on account of this order pursuant to said contract.

8. CHANGES:

A) buyer may at any time by written supplement to this order make additions to or deletions from, or otherwise modify this order. Upon receipt of any such supplement, seller shall be obligated to proceed at once with the performance of this order as modified. If any delay in delivery will result from such supplement, seller shall immediately notify buyer in writing, including the seller's estimate of the extent of the delay. After buyer's receipt of such statements and appropriate documentation as may be required, buyer shall make an equitable adjustment to the price of this order and/or the delivery date. The amount of any increase in the price of this order or extension of the delivery date shall not exceed the amount of such increase or extension as may be obtained by buyer due to such supplement or change under the contract pursuant to which buyer agreed to operate the vessel for which the supplies are intended.

B) upon request of buyer, seller shall execute a release in form and substance satisfactory to buyer as part of a supplement to this order setting forth the equitable adjustment. Such release shall discharge buyer from any further claims in connection with the change which was the subject of that supplement and any other changes which were the subject of any previous supplement, including, but not limited to, claims arising out of actual or alleged delays or disruptions, or both. Seller shall not be entitled to any claim for changes unless authorized in writing by a written supplement to this order in accordance with this article. No change shall release or exonerate any surety of seller.

9. DOCUMENTATION OF PRICING:

Seller shall promptly supply buyer with such evidence of the basis for its prices, including any applicable cost data as buyer may specify. Within twenty (20) days from the date of issue of any supplement to or change in this order, seller shall furnish to buyer a written statement of any estimated net increase or net decrease in the cost of labor, materials, overhead, or other charges, and the extent of any change in the time required for performance of the order. The form of such statement and the data and documentation required in support thereof shall conform to such requirements as buyer may direct. Seller warrants that the prices charged under this order are not in excess of the prices charged to any other buyer.

10. WORK ON BUYER'S PREMISES OR ON VESSEL:

If seller is required to perform services in connection with this order on buyer's premises or on a vessel, seller shall indemnify and hold harmless buyer from any liability, cost, or expense, including reasonable attorneys' fees, for personal injury or property damage arising in connection with such work or services not due solely to buyer's negligence. Seller shall furnish buyer with satisfactory evidence of insurance providing coverage for workers' compensation (including longshoreman's and harbor workers' compensation), employer's liability, comprehensive general liability, and vehicle liability, with limits of liability for bodily injury of not less than $500,000 per person and $1,000,000 per occurrence, and property damage liability of not less than $1,000,000 per occurrence. Such insurance shall require at least ten (10) days' prior notice to buyer of cancellation, and shall waive any right of subrogation against buyer. Seller and its employees shall satisfy any applicable industrial security requirements in connection with its performance of this order.

11. PUBLICITY:

Seller shall neither publicize this order nor, except as required to carry out seller's obligation hereunder, supply information to anyone concerning this order, without prior written approval of buyer.

12. TAXES:

All taxes, assessments, and duties, including without limitation any sales, use, or excise taxes, imposed by any government or governmental unit with respect to the supplies are included in the price of this order and shall be paid by seller; however, such taxes, assessments, and duties shall be shown as separate items on each invoice.

13. DELIVERY:

Delivery must be in strict compliance with the schedule contained in this order. All items to be delivered hereunder shall be packed and packaged to insure safe arrival at their destination, to secure the lowest transportation costs, and to comply with the requirements of common carriers. Delivery shall be made by seller at such times and places and of such items and quantities as may from time to time be specified by buyer. If seller fails to meet its scheduled delivery dates and buyer elects to call for expedited shipments, seller will pay the difference between the method of shipping specified and the actual expedited rate incurred. Seller shall be responsible for any additional charges resulting from deviation from buyer's routing instructions. If seller fails to make delivery promptly and regularly, as required hereunder, buyer may, in addition to other remedies available at law, terminate this order by giving notice to seller. Title and risk of loss shall remain with seller until goods are delivered to the f.o.b. point specified herein. Notwithstanding such delivery, seller shall bear risk of loss or damage to goods purchased hereunder from the time that buyer gives notice of rejection of goods pursuant to the inspection provisions of this order.

If seller encounters or anticipates difficulty in meeting the delivery schedule, seller shall immediately notify buyer in writing, giving pertinent details, provided, however, that such data shall be informational only in character and shall not be construed as a waiver by buyer of any delivery schedule or date or of any rights or remedies provided by law or this order. Parts fabricated in excess or in advance of buyer's release are at seller's risk. Buyer reserves the right, without loss of discount privileges, to pay invoices covering items shipped in advance of the schedule on the normal maturity after the date specified for delivery.

14. ASSIGNMENT AND SUBCONTRACTING:

This order shall be binding upon each party's successors and assigns, provided, however, that seller shall not assign this order or any portion thereof or any money due hereunder without the prior written consent of buyer, which buyer may grant or withhold at its sole discretion. Seller shall not subcontract for completed or substantially completed goods or services in connection with this order without the prior written consent of buyer, which buyer may grant or withhold at its sole discretion.

15. INTERPRETATION:

Captions are included only for the convenience of the parties, and shall not be considered in interpreting this order. Any invalidity of any provisions of this order shall not otherwise affect any other provision hereof. Any failure of buyer to insist on the performance of any of the terms, covenants, or conditions of this order or to exercise any right hereunder shall not be construed as a waiver or relinquishment of the future performance of such term, covenant, or condition or the future exercise of such right. This order shall be governed by, and construed and enforced in accordance with, the laws of the commonwealth of Massachusetts without giving effect to its choice of law principles. Time is of the essence.

16. ADDITIONAL PROVISIONS:

This order incorporates by reference the clauses of the Federal Acquisition Regulations (FAR’s) and Defense Acquisition Regulation ("DAR"), as in effect on the specified dates, subject to the additions and modifications set forth herein (see "government flowdown provisions, MPS program"). As used herein:

i) "contractor" means seller;

ii) "subcontractor" means a subcontractor of seller; and

iii) "contract" means this order; and

iv) "contracting officer" means the contracting officer designated by the government under its time charter of the vessel for which the supplies are intended.

With respect to all communications between seller and contracting officer relating to the supplies or any aspect of this order, seller shall provide buyer with i) copies of all such communications, if such communications were in writing or were transmitted by any medium that produces output in written form; ii) synopses of all such communications, if such communications were not in writing or so transmitted; and iii) reasonable prior notice of and, if permitted by the contracting officer, an opportunity to observe and participate in any such communications.

17. ALCOHOL- AND DRUG-FREE WORKPLACE:

All sellers/contractors conducting business with American Overseas Marine Corp. (AMSEA)/General Dynamics are hereby advised that it is the policy of AMSEA to provide a workplace free of alcohol and drugs, and to take reasonable measures to insure that employee alcohol or drug use does not jeopardize the success of its operations, or otherwise affect AMSEA, its employees, or it customers.

A "drug-free workplace" means a site/sites for the performance of work done by the contractor in connection with a specific contract at which employees of the contractor are prohibited from engaging in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance.

Accordingly, all sellers/contractors are required to inform all of its employees or subcontractors who will be working on AMSEA's property of this policy. The employees of such sellers/contractors will be subject to the same rules of conduct, inspections, and alcohol- and drug-testing procedures required of AMSEA/General Dynamics employees.

18. ENTIRE AGREEMENT:

This order, including all documents expressly incorporated by reference herein, constitutes the entire agreement between buyer and seller with respect to the subject matter hereof, and no reference is to be made to any other document or understanding to supplement or vary the terms of this order. Changes or supplements to this order shall only be binding on buyer if they are in writing and signed by an authorized representative of buyer.

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