Section II
Standard Terms & Conditions for Commercial Items

Please keep this document of Sandia Commercial Terms and Conditions for future reference. If needed, you may request additional copies by contacting the Sandia Contracting Representative (SCR) named on the signature page. Thank you for helping us to conserve resources.

PART A. APPLICABLE TO ALL TRANSACTIONS

A1 DEFINITIONS
(a) "Government" means the United States of America and includes the U.S. Department of Energy (DOE) or any duly authorized representative thereof.
(b) "Sandia" means Sandia National Laboratories, operated by Sandia Corporation under Contract No. DE-ACO4-94AL-85000 with the U.S. Department of Energy.
(c) "Seller" means the person or organization that has entered into this agreement.
(d) "Item" means "commercial item" and "commercial component" as defined in FAR 52.202-1.
(e) "Agreement" means Purchase Order, Contract, Price Agreement, Subcontract, As Ordered Agreement, or modifications thereof.
(f) "SCR" means Sandia Contracting Representative, the only person authorized to execute and/or administer this Agreement for Sandia.

A2 APPLICABLE LAW
The rights and obligations of the parties hereto shall be governed and this agreement shall be interpreted in accordance with federal law and regulation of Government contracts and Article 2 of the uniform Commercial Code enacted in the State of New Mexico for those items or services delivered in New Mexico and as enacted in the State of California for those items or services delivered in California. The parties agree to jurisdiction in the Federal District Court, with venue in the District New Mexico for those items or services delivered in New Mexico, and venue in the District of California for those items or services delivered in California. In the event the requirements for jurisdiction in Federal District Court are not present, such litigation shall be brought in Bernalillo County, New Mexico for those items or services delivered to New Mexico and in the Northern District of California for those items or services delivered in California.

A3 ORDER OF PRECEDENCE
Any inconsistencies shall be resolved in accordance with the following descending order of precedence: (1) Order Item descriptions, prices, quantities, delivery dates and other statements on the order and (2) SF 6432-CI, Section II Standard Terms and Conditions For Commercial Items, and (3) incorporated by reference provisions of Section II.

A4 TITLE AND ADMINISTRATION
All property rights and interests resulting from this Agreement shall pass directly from the Seller to the Government.

A5 ACCEPTANCE OF TERMS AND CONDITIONS
Seller, by signing this Agreement and/or delivering Items or services ordered under this Agreement, agrees to comply with all the terms and conditions and all specifications and other documents that this Agreement incorporated by reference or attachment. Sandia hereby objects to any terms and conditions contained in any acknowledgment of this Agreement that are different from or in addition to those mentioned in this document. Failure of Sandia to enforce any of the provisions of this Agreement shall not be construed as evidence to interpret the requirements of this Agreement, nor a waiver of any requirement, nor of the right of Sandia to enforce each and every provision. All rights and obligations shall survive final performance of this Agreement.

A6 WARRANTY
Seller expressly warrants that Items delivered under this Agreement shall be in accordance with Sandia's affirmation, description, sample, or model and compliant with all requirements of this Agreement. Seller expressly warrants that no counterfeit Items or components in Items shall be delivered to Sandia on this Agreement. The warranty shall begin upon receipt of conforming Items and extend for a period of (1) the manufacturer's warranty period or six months, whichever is longer, if the Seller is not the manufacturer and has not modified the Item or (2) one year or the manufacturer's warranty period, whichever is longer, if the Seller is the manufacturer of the Item or had modified it. If any nonconformity with Item appears within that time, Seller shall promptly repair or replace such Items or reperform services at Seller's election. Transportation of replacement Items and return of nonconforming Items and repeat performance of services shall be at Seller's expense. Sandia shall notify Seller of such nonconformity within a reasonable time after discovery, and Seller shall notify Sandia of whether it chooses to make repairs or replacements within three working days after Sandia's notice of nonconformity. If repair or replacement or reperformance of services is not timely, Sandia may elect to return the nonconforming Items or repair or replace them or reprocure the services at Seller's expense. Seller disclaims any implied warranty of merchantability or fitness for a particular purpose.

A7 ASSIGNMENT
Seller shall not assign rights or obligations to third parties without the prior written consent of Sandia. However, the Seller may assign rights to be paid amounts due or to become due to a financing institution if Sandia is promptly furnished written notice and a signed copy of such assignment. Payments to an assignee shall be subject to setoff or recoupment for any present or future claims of Sandia against the Seller. Administration of this Agreement may be transferred from Sandia to DOE or its designee, and in case of such transfer and notice thereof to the Seller, Sandia shall have no further responsibilities hereunder.

A8 NEW MATERIALS
Unless otherwise specified in this Agreement, all Items delivered shall consist of new materials. New is defined as previously unused which may include residual inventory or unused former Government surplus property.

A9 TRANSPORTATION
If transportation is specified "FOB Origin," (a) no insurance cost shall be allowed unless authorized in writing and (b) the bill of lading shall indicate that transportation is for DOE and the actual total transportation charges paid to the carrier(s) shall be reimbursed by the Government pursuant to Contract No. DE-ACO4-94-AL85000. Confirmation will be made by Sandia National Laboratories.

A10 RISK OF LOSS
Sandia shall, for loss during transportation of compliant Items which is Sandia's obligation, compensate Seller the lesser of (1) the agreed price of such Items, or (2) the Seller's cost of replacing such Items; and such loss shall entitle the Seller to an equitable adjustment in delivery schedule obligations.

A11 PAYMENT
Unless otherwise provided, terms of payment shall be net 30 days from the latter of (1) receipt of Seller's proper invoice, if required, or (2) delivery of Items/completion of work. Any offered discount shall be taken if payment is made within the discount period that the Seller indicates. Payments may be made either by check or electronic funds transfer, at the option of Sandia. Payment shall be deemed to have been made as of the date of mailing or the date on which an electronic funds transfer was made.

A12 COMPLIANCE WITH LAWS
Seller shall comply with all applicable federal, state, and local laws and ordinances and all pertinent lawful orders, rules, and regulations and such compliance shall be a material requirement of this Agreement.

A13 TERMINATION FOR DEFAULT
(a) Sandia may terminate this Agreement for default, in whole or in part, if the Seller fails to comply with any of the terms of this Agreement, or fails to provide adequate assurance of future performance. In that event, Sandia shall not be liable for any amount for Items or services not accepted.
(b) If this Agreement is terminated for default, Sandia may require Seller to deliver to Sandia any supplies and materials, manufacturing materials, and manufacturing drawings that Seller has specifically produced or acquired for the terminated portion of this Agreement. Sandia shall pay the agreed-upon price for completed Items delivered and accepted. Sandia and Seller shall agree on the amount of payment for all other deliverables.
(c) Seller shall not be liable to Sandia for delays in performance occasioned by causes beyond Seller's reasonable control and without its fault or negligence, including but not limited to acts of God or of the public enemy, acts of the Government in its sovereign capacity, fires, floods, epidemics, quarantine restrictions, strikes, unusually severe weather, and delays of Seller's suppliers at any tier. However, the delays of Seller's suppliers at any tier must be proved to be beyond the control of both Seller and its suppliers and without fault or negligence of either.
(d) The rights and remedies of Sandia in this clause are in addition to any other rights and remedies provided by law or under this Agreement.

A14 TERMINATION FOR CONVENIENCE
Sandia reserves the right to terminate this Agreement, or any part hereof, for the convenience of itself or the Government. In the event of such termination, the Seller shall immediately stop all work hereunder and shall immediately cause any and all of its suppliers and subcontractors to cease work. Subject to the terms of this Agreement, the Seller shall be paid a percentage of the price reflecting the percentage of the work performed prior to the notice of termination, plus reasonable charges that the Seller can demonstrate to the satisfaction of Sandia using its standard record keeping system, have resulted from the termination. Seller shall not be required to comply with the cost accounting standards or contract cost principles for this purpose. This clause does not give Sandia or the Government the right to audit the Seller's records. Seller shall not be paid for any work performed or costs incurred which reasonably could have been avoided.

A15 BANKRUPTCY
If the Seller enters into any proceeding relating to bankruptcy, it shall give written notice via certified mail to the SCR responsible for this Agreement within five days of initiation of the proceedings. The notification shall include the date on which the proceeding was filed, the identity and location of the court and a listing of the agreement numbers for which final payment has not been made.

A16 TAXES
By reason of Sandia's Nontaxable Transaction Certificate, the Seller should not include in the price any state and local taxes except those which were paid by the Seller to third parties in acquiring the Items which are the subject matter of this Agreement. The price does include all applicable Federal taxes.

A17 INCORPORATION BY REFERENCE
For FAR and DEAR clause provisions incorporated into this Agreement by reference, "Contractor" means Seller and "Contracting Officer" means the SCR. The FAR and DEAR clauses may be found in Title 48 of the Code of Federal Regulations. The following clauses are incorporated into this Agreement by reference thereto as if reprinted here in their entirety:
-- FAR 52.222-26 Equal Opportunity (E.O. 11246)
-- FAR 52.222-35 Affirmative Action for Special Disabled and Vietnam Era Veterans (38 U.S.C. 2012(a).
-- FAR 52.222-36 Affirmative Action for Handicapped Workers (29 U.S.C. 793), and
-- FAR 52.247-64 Preference for Privately Owned U.S.-Flagged Commercial Vessels.

PART B. APPLICABLE WHEN ITEMS INCLUDE SERVICES

B1 APPLICATION OF UNIFORM COMMERCIAL CODE
For the purposes of Items that include services, the Uniform Commercial Code Article 2, Parts 1,3,5,6, and 7 as enacted by the State of New Mexico at New Mexico shall apply to the services performed in New Mexico and Article 2, Parts 1,3,5,6, and 7 as enacted by the State of California shall apply to services performed in California.

B2 CHANGES
(a) Sandia may at any time, by written notice, make changes within the general scope of this Agreement in any one or more of the following: (1) description of the services to be performed; (2) place of performance and (3) the amount of services to be furnished. If any such change causes a difference in the cost of, or the time required for performance, an equitable adjustment shall be made in the price and/or delivery schedule and other affected provisions. Such adjustment shall be made by written amendment to this Agreement signed by both parties. Any claim for adjustment by Seller must be made within 20 days from the date of receipt of Sandia's change notice, although Sandia in its sole discretion may receive and act upon any claim for adjustment at any time before final payment.
(b) Only the SCR is authorized on behalf of Sandia to issue changes, whether formal or informal. If the Seller considers that any direction or instruction by Sandia personnel constitutes such a change, Seller shall not rely upon such instruction or direction without confirmation from the SCR. Nothing in this clause, including any disagreement with Sandia about the equitable adjustment, shall excuse Seller from proceeding with the Agreement as changed.

PART C. APPLICABLE WHEN SELLER PERSONNEL WORK ON DOE SITE

C1 INCORPORATED BY REFERENCE
The following clauses are incorporated into this Agreement by reference thereto as if reprinted here in their entirety: -- DEAR 970.5204-58 Workplace Substance Abuse Programs at DOE sites (AUG 1992) -- DEAR 970.5204-59 Whistle blower Protection for Contractor employees (JAN 1993)

PART D. APPLICABLE WHEN WORK INVOLVES ACCESS TO CLASSIFIED INFORMATION, SPECIAL NUCLEAR MATERIAL OR AUTHORIZED UNRESTRICTED ACCESS TO AREAS CONTAINING THESE

D1 INCORPORATION BY REFERENCE
The following clauses are incorporated into this Agreement by reference thereto as if reprinted here in their entirety:
-- DEAR 952.204-2 Security (APR 1993 AL 92-2R)
-- DEAR 952.204-70 Classification (APR 1993 AL 92-2R)

PART E. APPLICABLE TO ALL AGREEMENTS IN EXCESS OF $500,000

E1 INCORPORATION BY REFERENCE
The following clauses are incorporated into this Agreement by reference thereto as if reprinted here in their entirety:
-- FAR 52.219-8 Utilization of Small, Small Disadvantaged and Women-Owned Small Business Concerns (OCT 1995)
-- FAR 52.219-9 Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan (OCT 1995)