PART A: PERFORMANCE IN GENERAL

1. Assignment
   Neither this Contract nor the consideration due hereunder may be assigned by Seller, in whole or in part, without Buyer's prior written consent.

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2. Changes
   
   1. Buyer may at any time, by written order, make changes to this Contract.  If any such change causes an increase or decrease in the cost of, or the time required for, performance of this Contract, Buyer shall make an equitable adjustment in the Contract Price, the performance or delivery schedule, or both, and shall so modify this Contract. If Buyer changes the Contract performance or delivery date(s) such that Seller is required to work overtime, Buyer shall pay therefor an amount equal only to Seller's actual additional labor costs occasioned by such overtime.
   2. Buyer’s engineering and technical personnel may from time to time render assistance or give technical advice or discuss or exchange information with Seller’s personnel concerning the Contract Work.  Such actions, however, shall not be deemed to be a change under this Changes paragraph and shall not be the basis for any equitable adjustment.  Only an authorized representative of Buyer’s Purchasing Department may change this Contract.
   3. Within twenty (20) days from the date of receipt of any written change order, Seller shall submit to Buyer a detailed written estimate of the impact of the change on the Contract Price, the performance or delivery schedule, and the performance capabilities of any Contract Products.  Upon receipt of this estimate, Buyer shall begin good faith negotiations with Seller to determine an equitable adjustment to the Contract.
   4. The failure of the parties to agree to any equitable adjustment shall be dispute under the Disputes paragraph of this Contract.  Nothing in this Changes paragraph, however, shall excuse Seller from proceeding with diligent performance of this Contract as changed.

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3. Compliance with Law
   Seller shall, in the performance of this Contract, fully comply with all applicable federal, state and local laws, rules, regulations, orders, conventions, ordinances and standards that relate to the Contract Work.  Seller shall defend, indemnify and hold Buyer harmless from any and all claims and liabilities resulting from any failure to so comply.

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4. Confidentiality of Data and Information
   Information furnished by Buyer and identified by Buyer as “NASSCO Proprietary/Trade Secret Information” or otherwise identified as subject to restricted access or dissemination shall be and remain property of Buyer; shall not be duplicated, used or disclosed to third parties except for the purpose and to the extent necessary for the performance of this Contract; and upon completion of this Contract, shall be delivered to Buyer or destroyed by Seller as Buyer specifies (including all copies).  Seller shall take all reasonable precautions to maintain in confidence all such information, including the imposition upon any person, firm, or corporation to whom disclosure of such information is made in the course of performance under this Contract of conditions relating to the confidential treatment thereof to the same effect as those imposed upon Seller herein.  The obligations imposed upon Seller herein shall not apply to such information that is already known to Seller, is lawfully obtained or obtainable by Seller from another source, is or comes into the public domain other than as a result of breach of this Confidentiality of Data and Information paragraph.

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5. Contract Acceptance, Integration and Modification
1. Seller shall strictly perform this Contract.  Acceptance of this Contract is expressly limited to the terms and conditions hereof and shall be made by executing the "acknowledgment copy" of the purchase order and returning the same to Buyer.  If for any reason Seller should fail to accept this Contract in writing, any performance by Seller of any portion of this Contract shall constitute complete acceptance of this Contract.  Any terms proposed in the acceptance of this Contract, which add to, vary from, or conflict with the terms and conditions of this Contract, are hereby objected to and shall be void. 
2. This Contract constitutes the entire agreement between the parties and supersedes all previous communications, representations or agreements, whether oral or written, between the parties.  No terms other than those set forth herein or in the purchase order shall apply.  Seller represents that, in entering into this Contract, it does not rely on any previous oral or implied representation, inducement, or understanding of any kind.
3. This Contract may be amended or modified only by a written instrument executed by authorized representatives of both Buyer and Seller.

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6. Definitions
1. "Buyer" means National Steel and Shipbuilding Company.
2. "Contract" means the purchase order, these Terms and Conditions, the Specifications, and any other documents incorporated by referenced by the purchase order.
3. “Contract Price” means the total price to be paid by Buyer to Seller for the proper performance of the Contract Work as set forth in this Contract.
4. “Contract Products” means the products, goods, material, supplies, equipment, articles or data to be furnished by Seller.
5. "Contract Work" means the goods and/or services to be provided by Seller under this Contract, together with all data and materials to be provided by Seller under this Contract.  Unless otherwise specifically defined, “Contract Work” includes any Contract Products.
6.  "Seller" means the individual or entity identified on the face of the purchase order by whom the Contract Work is to be performed.
7. "Specifications" means the technical specifications, plans, data, drawings, diagrams, schedules and any other documents that describe the Contract Work.

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7. Disputes
1. Any dispute between Buyer and Seller in connection with or arising out of this Contract shall be resolved by means of the following procedures:
1. The dispute initially shall be referred to each party’s senior executive with responsibility for this Contract, who shall negotiate in good faith to reach a resolution of the dispute.
2. In the absence of a resolution being achieved within thirty (30) days after either Buyer or Seller offers to conduct the negotiations in subparagraph (a)(i), above, either party may take appropriate action pursuant to subparagraph (b) hereof.
2. Any dispute not resolved in accordance with subparagraph (a), above, may be resolved by any lawful means, including litigation, which shall be initiated by either party in a court of competent jurisdiction in San Diego County, California, and both parties consent to such exclusive jurisdiction and venue.
3. In resolving any dispute under this Contract, each party shall bear its own attorney's fees and costs.
4. Until final resolution of any dispute hereunder, Seller shall diligently proceed with the performance of this Contract as directed by Buyer.

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8. Export Control Compliance and Cooperation
   Seller shall comply with the Export Administration Regulations (15 CFR 730—774) and the regulations issued by the Office of Foreign Assets Control (31 CFR Chapter V), all other applicable laws, regulations and orders that control the export of commercial and dual-use items and associated technology.  In addition, Seller shall inform Buyer in writing of the name and citizenship of each employee of Seller and Seller’s subcontractors at any tier who will participate in the performance of this Contract at Buyer’s facilities who is not a United States citizen or lawful permanent resident and the name and address of each subcontractor at any tier who will participate in such performance that is not organized under the laws of any state of the United States.  Seller shall cooperate fully with Buyer in applying for any export license or approval which may be required for any such employee or subcontractor and in justifying and documenting any license or approval exception.  Seller shall not permit any such employee or subcontractor to participate in the performance of this Contract over Buyer’s objection based on noncompliance with this Export Control Compliance and Cooperation paragraph. 

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9. Indemnity
   Seller shall defend, indemnify and save Buyer, its affiliated companies, and each of their directors, officers, agents and employees, free and harmless from and against all claims and liabilities of any nature, and all costs and expenses incurred in connection therewith (including, but not limited to, attorneys fees) for death or injury to persons (including, but not limited to, agents and employees of Seller and its subcontractors) and for damage or loss of property arising directly or indirectly out of or in connection with the performance of this Contract, including, without limitation, claims and liabilities based in whole or in part on the negligence or other theory of liability of Seller or Seller’s subcontractors, and excluding only claims and liabilities based on Buyer’s sole negligence or willful misconduct.

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10. Independent Contractor
    In performing this Contract, Seller and its employees and subcontractors shall be an independent contractor to Buyer and shall not be an agent or employee of Buyer. Seller shall be solely responsible for determining the means and methods of performing this Contract.  Seller assumes full responsibility for the payment of all compensation, expenses, and benefits (including, but not limited to, Workers' Compensation, medical, and other benefits) to its employees and for all state and federal income tax, unemployment insurance, social security, disability insurance, and other applicable withholdings.

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11. Inspection and Acceptance
    The Contract Work, including any documents, materials, equipment, and facilities, shall at all times be available for inspection and testing by Buyer.  Buyer's inspection or failure to inspect shall not relieve Seller of any obligations or liability under this Contract, nor shall it constitute acceptance of the Contract Work.  Seller shall repair, reperform or replace any nonconforming Contract Work at Seller's expense within ten (10) days of Buyer's written notice of nonconformance.  If Seller has not repaired. reperformed or replaced such nonconforming Contract Work within the 10-day period, Buyer may repair, reperform or replace such nonconforming Contract Work at Seller's expense.  The Contract Work shall be accepted when Buyer determines that it conforms to this Contract, and such acceptance shall be conclusive of conformance except for latent defects, fraud or gross negligence.

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12. Interpretation
    This Contract shall be enforced and interpreted under California law without regard to which party drafted the Contract or to California's choice of law provisions.  If any provision of this Contract is determined to be unenforceable, all other provisions shall remain in effect.  This Contract shall not be varied, supplemented, qualified or interpreted by any prior course of dealing or usage of trade.  Paragraph headings are for convenience only and shall not be used to interpret this Contract.  In the event of any conflict or inconsistency between any provisions of this Contract, the following precedence shall be followed: the purchase order; these Terms and Conditions; the Specifications; any other document incorporated by reference by the purchase order.

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13. Invoices and Payment
1. Invoices shall include: the purchase order number; the invoice number; description of all Contract Work performed; the dates of performance; comprehensive, itemized prices; prior payments received; terms; and discounts.  Unless otherwise provided, any cash discount period shall commence on the date of receipt of Seller's invoice.  Incorrect and incomplete invoices shall be returned for correction and shall delay the commencement of Buyer's obligation to pay for the Contract Work and any discount period, until a corrected invoice is received by Buyer.  Buyer shall pay Seller only for the complete, proper and timely performance of this Contract, and Buyer shall have the right to withhold payment for any failure of Seller to strictly comply with this Contract.  No payment of any portion of the Contract Price shall constitute acceptance of the Contract Work.
2. Buyer shall pay Seller within thirty (30) days from receipt of a proper invoice by Buyer.  To be timely, all invoices must be received by Buyer within 90 days after completion of the Contract Work.  Invoices received later than 90 days after completion of the Contract Work are rejected and void and Seller hereby waives the right to payment of these invoices.

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14. Liens
1. Seller waives any and all rights to any lien against Buyer by Seller or Seller’s subcontractors.
2. Buyer shall have the right to withhold any payment until Seller shall furnish, as requested, current written releases and waivers of all rights to claim or file liens, properly executed by Seller and its subcontractors. Seller’s acceptance of full payment of the Contract Price shall constitute satisfaction in full and release of all claims or demands of Seller and its subcontractors against Buyer arising out of or connected with this Contract.  If Seller fails or neglects to pay any admitted claims for labor or material, Buyer may pay such claims and deduct such payments from funds due Seller hereunder or, if such claims be disputed, withhold sufficient funds to pay such claims until they are resolved.  Seller shall immediately discharge or cause to be discharged any lien or charge of any kind which at any time is filed against the property of Buyer with respect to, or arising from, the performance of the Contract Work.  If any such lien or charge is not immediately discharged, Buyer may discharge or cause to be discharged such lien or charge at the expense of Seller.

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15. Nonwaiver
    Buyer's waiver of any provision of this Contract shall not constitute wavier of that provision in any later circumstances or waiver of any other Contract provision.

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16. Notices
    Unless expressly directed otherwise, notices required by this Contract to be given by Seller or Buyer to the other party shall be personally served upon Seller or Buyer or served by facsimile and first class mail addressed to the appropriate address hereinafter set forth or to such other address as Seller and Buyer may hereafter designate by written notice.  If served by facsimile and first class mail, service will be considered complete and binding on the party served immediately upon completion of said facsimile transmission, as evidenced by a confirmation of successful transmission.
    
    To Seller:
    As indicated on face of the National Steel and Shipbuilding Company purchase order
    
    To Buyer:
    P.O. Box 85278
    San Diego, CA  92186-5278
    Attn: Manager, MRO Purchasing
    Facsimile Number: (619) 544-3677

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17. Property Rights in the Contract Work
    All data and materials prepared or developed by Seller in connection with the performance of the Contract Work shall be Buyer's exclusive property and shall be provided to Buyer upon completion of performance of this Contract, upon termination of this Contract, or upon Buyer's earlier request.

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18. Remedies
    All remedies are cumulative, and the exercise of a remedy conferred by this Contract or in law or equity shall not preclude the exercise of any other remedy under this Contract or in law or equity. 

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19. Scope of Performance
    Seller shall supply and furnish at the location where the Contract Work is to be performed all labor, materials, equipment, tools, services, and supervision, and shall bear all items of expense, necessary for the complete and satisfactory performance of this Contract, except such items that Buyer, in this Contract, specifically agrees to supply or furnish to or for the use of Seller.  Any labor, materials, equipment, tools, services or supervision not specifically described in this Contract, but which may be fairly implied as required thereby or necessary to properly complete the Contract Work, shall be deemed within the scope of the Contract Work and shall be provided by Seller at Seller’s sole expense.

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20. Setoffs/Backcharges
    Buyer may in addition to any other amounts to be retained hereunder, retain from any sums otherwise owing to Seller amounts sufficient to cover the full costs of any of the following:
1. Seller’s failure to comply with any provision of this Contract or Seller’s acts or omissions in the performance of any part of this Contract, including, but not limited to, violation of any applicable law, order, rule or regulation, including those regarding safety, hazardous materials or environmental requirements’;
2. Correction of defective or nonconforming work by redesign, repair, rework or replacement or other appropriate means when Seller states, or indicates, that it is unable or unwilling to proceed with correction action in a reasonable time to support Buyer’s in-yard production need; and/or
3. Buyer may in addition to any other amounts to be retained hereunder, retain any sums otherwise owing to Seller amounts sufficient to cover the full costs of any of the following: 
4. The cost of backcharge work shall include:
1. Incurred labor costs including all payroll additives;
2. Incurred net delivered material costs;
3. Incurred lower-tier supplier and Seller costs directly related to performing the corrective action;
4. Expediting costs beyond those normally provided in the normal course of the Contract when required to meet the Project schedule;
5. Application of relevant manufacturing and material overhead and SG&A expense to the work performed by Buyer.

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21. Standard of Performance (for Services Only)
1. Seller shall perform the Contract Work using reasonable diligence, exercising its best judgment, and using the care and skill ordinarily used by reputable similar persons or entities in providing the same or similar services under similar circumstances.  Seller is on notice that Buyer is relying on the care, skill, diligence and judgment exercised by Seller in performing the Contract Work.
2. Seller shall be responsible to the Buyer for acts and omissions of the Seller’s employees, subcontractors, and their agents and employees, and other persons, including engineers, and other design professionals, performing any portion of the Seller’s obligations under this Contract.
3. If Seller subcontracts any portion of the Contract Work, Seller shall provide Buyer with the name and address of such subcontractor prior to executing such subcontract.  Buyer may decline the usage of such subcontractor based on Buyer’s independent evaluation of subcontractor’s qualifications.

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22. Termination for Default
1. Buyer may terminate this Contract for default if Seller: fails to assure timely performance; fails to perform on time; ceases performance prior to completion of this Contract; evidences insolvency or financial inability to perform; or fails to cure the material breach of any other provision of this Contract within ten (10) days of notice of such breach.
2. In the event Buyer terminates this Contract in whole or in part, Buyer may procure, upon such terms and in such manner as Buyer may reasonably determine, services similar to the Contract Work and/or products similar to the Contract Products specified herein, and Seller shall be liable to Buyer for any excess costs for such similar services and/or products.  If this Contract is terminated only in part, Seller shall continue the performance of this Contract to the extent not terminated.
3. Upon termination of this Contract, Seller shall immediately cease performance of the Contract Work; shall immediately return to Buyer all information, materials and documents acquired from Buyer; and shall immediately provide to Buyer all information, materials and documents prepared or developed by Seller in connection with performance of this Contract.  Further, Seller's obligations as set forth in the Property Rights in the Contract Work and the Confidentiality of Data and Information paragraphs herein shall survive any termination of this Contract.

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23. Third Party Rights
    This Contract is intended solely for the benefit of Buyer and Seller and is not intended for the use or benefit of any other party.  Nothing contained in this Contract is intended to make any person or entity that is not a signatory to this Contract a third party beneficiary of any right created by this Contract.

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24. Time of Performance
1. Seller shall perform this Contract in a diligent manner and in no event later than the time(s) specified on the face of the purchase order.  Time of performance specified in this Contract is of the essence of this Contract.  If at any time it reasonably appears to Buyer that Seller is failing to make progress, such that performance may not be completed in accordance with this Contract, Seller shall, within seven (7) days of a written request by Buyer, assure timely performance and represent to Buyer in writing Seller’s best completion date.  If the represented completion date is not within the original time for completion of performance of this Contract, Buyer may terminate this Contract for default in accordance with the Termination paragraph.  Buyer shall further have the right, but not the duty, and without waiver of any other rights and remedies that it may have, to extend the time for completion of performance.  The new date for completion of performance shall be final, of the essence of this Contract, and subject to further change only in accordance with this Contract.
2. Seller shall not be liable for delays caused by force majeure events that are beyond the control and without the fault or negligence of the Seller, including, but not limited to, acts of God or the public enemy, fires, earthquakes, floods, epidemics, quarantine restrictions or natural disasters, on condition that Seller notifies Buyer of any such force majeure events within five (5) days of the start of any such delays.  Seller shall cooperate with Buyer, and Seller shall use its best efforts, to recover any such delays caused by any such force majeure events.

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25. Warranty
1. Seller expressly warrants for a period of one (1) year from acceptance by Buyer that all Contract Work shall conform to this Contract and be performed in a proper and workmanlike manner, and that all Contract Products shall conform to this Contract and be free from defects in design, material, workmanship and fabrication.  If any nonconformities or defects are discovered in the Contract Work or the Contract products, which are not caused by Buyer, Seller shall repair, replace or reperform any nonconforming or defective Contract Work or Contract products at Seller's sole expense within ten (10) days of Buyer's written notice.  If Seller has not repaired, replaced or reperformed such nonconforming or defective Contract Work or Contract Products within the 10-day period, Buyer may repair, replace or reperform such nonconforming or defective Contract Work or Contract Products at Seller's expense.
2. Seller hereby assigns to Buyer all warranties provided by the manufacturers of all Contract Products and their components.

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26. Personal Information Privacy Protection
1. DEFINITIONS. As used in this paragraph, the following capitalized terms shall have the meanings provided in this section.
   
   Personal Information. “Personal Information” consists of any information that relates to an identified or identifiable NASSCO employee, and which is collected or received by Seller, its employees, or its agents, in connection with or incidental to the contracted services that Seller performs for the Buyer.
   
   Sensitive Personal Information and “SPI”. “Sensitive Personal Information” or “SPI” is a form of Personal Information that consists of one or more of the following elements of information about an individual:
   • social security number, social insurance number, military identification number, or tribal identification card number;
   • passport, visa, alien registration, or other identification number assigned for immigration purposes;
   • driver’s license number, national identification card number, state or provincial identification card number, or other government-issued identification number;
   • account number, card number, routing number, passcode, or personal identification number (“PIN”) for a checking or savings account, investment account, personal or Buyer-sponsored credit or debit card, or any other financial account.
   
   SPI also consists of information that is capable of being associated with a particular individual through a combination of an individual’s name with one or more of the following identifiers:
   • access code or password for an information system;
   • mother’s maiden name or date of birth;
   • digital or electronic signature;
   • biometric data, including fingerprint, retina, or iris image, or DNA profile; or
   • health insurance number or medical information (any information regarding an individual’s medical history, mental, or physical condition, or medical treatment or diagnosis by a health care professional).
   
   
2. CONTROL OF PERSONAL INFORMATION. The Buyer has the exclusive authority to determine the purposes and means of processing of all Personal Information by Seller pursuant to the agreements between the Parties.
3. USE OF PERSONAL INFORMATION. Seller shall use Personal Information solely for the purpose of supporting its performance of the contracted services for the Buyer and not for any other purpose.
4. ACCESS TO PERSONAL INFORMATION. Seller shall restrict access to Personal Information to its employees who require access to this information to support Seller’s performance of the contracted services for the Buyer. Seller may also permit employees or representatives of Seller’s subcontractors and consultants to have access to Personal Information, but only (a) to the extent necessary for them to support Seller’s performance of contracted services for the Buyer, and (b) with the written authorization of the Buyer in accordance with Section (e) below.
5. TRANSFER OF PERSONAL INFORMATION. Seller shall not permit Personal Information to be transferred to any third party that is not one of the Approved Third Parties listed on Attachment A hereto, unless transfer is:
1. required by subpoena or order of a court or tribunal of competent jurisdiction, or by a government agency entitled to obtain the information in the course of a lawful investigation (subject to a protective order or confidentiality agreement where reasonably possible);
2. necessary in connection with litigation between Seller and either the Buyer or the individual to whom the information relates (subject to a protective order or confidentiality agreement where reasonably possible);
3. authorized by the individual to whom the Personal Information at issue relates; or
4. authorized by the Buyer or the subject individual in writing.

From time to time, third parties can be added to the Approved Third Parties list or eliminated from that list by the mutual agreement of the Buyer and Seller by re-issuing Attachment A in updated form bearing the revision effective date. The Buyer can remove a Third Party from the list by providing written notice to Seller (i) if the Third Party fails to sign or renew a personal information security agreement in a form suitable to the Buyer or (ii) if the Buyer determines that the Third Party does not use sufficient data security procedures.


6. INFORMATION SECURITY. Seller shall maintain an information security program that satisfies applicable Privacy Laws and is consistent with general standards in Seller’s industry. In addition, such program shall include appropriate administrative, technical, physical, organizational, and operational safeguards and other security measures to maintain the security and confidentiality of Personal Information and to protect it from known or reasonably anticipated threats or hazards to its security and integrity. The level of security and protection provided shall be commensurate with the nature of the Personal Information to be protected.
7. STORAGE OF SPI. Storage of SPI must be handled in a manner consistent with the access principles in Section (d) above. Records containing SPI in paper format or microfiche must be stored and secured appropriately in areas to which access is restricted to appropriate personnel. Records containing SPI in electronic format must be stored in a secure computer network satisfying the requirements of Section (f), the adequacy of which Seller will monitor to protect SPI against emerging security threats, and which Seller will enhance as necessary to address such threats. SPI cannot be stored electronically outside of this network environment (or the Buyer’s own secure computer network) unless the storage device (e.g., laptop, memory stick, computer disk, etc.) is protected by appropriate encryption technology that is not less than 128 bits in length.
8. TRANSMISSION OF SPI. An electronic record that contains SPI cannot be transmitted electronically outside a secure network environment satisfying the requirements of Section (f) other than by a secure network connection or by communications protected by appropriate encryption technology that is not less than 128 bits in length. Likewise, Seller shall not require any individual to transmit PSI over the internet unless the connection is secure or the PSI is protected by encryption technology meeting this standard. Seller shall not print SPI on any mailed material unless required by law and will not make SPI visible through any envelope window unless required by law. Notwithstanding the provisions of this Section (h), when strictly necessary to perform the contracted services and permitted by applicable Privacy Laws, social security numbers and similar government-issued identification numbers may be included in applications and forms sent by mail, including documents sent as part of an application or enrollment process, or to establish, amend or terminate an account, contract or policy, or to confirm the accuracy of the Social Security or other identification number. SPI may be transmitted to and from Seller by facsimile, provided that Seller has taken reasonable precautions to avoid erroneous transmission or receipt.
9. SUBPOENAS AND LEGAL PROCEEDINGS. Subject to applicable law, Seller shall notify the Buyer immediately in writing of any subpoena or other judicial or administrative order by a court, tribunal, litigant, or government authority seeking access to or disclosure of Personal Information covered by this Rider. Subject to applicable law, the Buyer shall have the right to defend subpoena enforcement proceedings or motions to compel in lieu of and on behalf of Seller, which shall provide reasonable cooperation to the Buyer in connection with such defense.
10. COMPLIANCE WITH PRIVACY LAWS. To the extent they are applicable, Seller shall comply with (i) all applicable federal, state, provincial, country, and local laws, rules, regulations, directives and governmental requirements relating in any way to the privacy, confidentiality, or security of Personal Information including, without limitation, security breach notification laws (such as Cal. Civ. Code §§ 1798.29, 1798.82-1798.84); laws imposing minimum data security requirements (such as Cal. Civ. Code § 1798.81.5, and 201 Mass. Code Regs. §17.00), laws requiring the secure disposal of records containing certain Personal Information (such as N.Y. Gen. Bus. Law § 399-H); laws governing the use and transmission of social security numbers (such as N.Y. Gen. Bus. Law § 399-dd); the Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM); the FTC Disposal of Consumer Report Information and Records Rule, 16 C.F.R. § 682; the EU Directives governing general data protection (Directive 1995/46/EC), electronic commerce (Directive 2002/58/EC), and data retention (Directive 2006/24/EC); and the Canadian Personal Information Protection and Electronics Documents Act (“PIPEDA”) (collectively, “Privacy Laws”). Seller must supply certifications of compliance with these applicable data security laws and regulations.
11. INFORMATION SECURITY INCIDENTS. SELLER SHALL IMMEDIATELY NOTIFY THE BUYER OF ANY actual or suspected theft, loss, unauthorized use, disclosure or acquisition of, or access to, any SPI (hereinafter “Information Security Incident”) of which Seller becomes aware. Such notice shall summarize in reasonable detail the effect of the Information Security Incident on the SPI and the corrective action taken or to be taken by Seller. Seller shall promptly take all appropriate corrective actions and shall cooperate with the Buyer in all reasonable and lawful efforts to mitigate or rectify such Information Security Incident.
12. INSPECTION AND AUDIT. The Buyer shall have the right to monitor Seller’s compliance with the terms of this provision by inspecting Seller’s facilities, equipment, and records, provided that any inspection will not unreasonably interfere with the normal conduct of Seller’s business. The Buyer’s rights shall include the right to conduct periodic audits of the procedures and safeguards used by Seller to protect Personal Information, provided that Seller and the Buyer may agree to an alternative documentation process in lieu of an audit. Seller shall cooperate with such requests by the Buyer.
13. DESTRUCTION AND RETURN OF PERSONAL INFORMATION. Upon the completion of Seller’s services for the Buyer (or such earlier time as the Buyer requests), Seller shall return to the Buyer, or at the Buyer’ request, securely destroy or render unreadable each and every original and copy in every media of all Personal Information in Seller’s possession, custody or control. In addition, Seller shall provide to the Buyer a written certification by an Officer of Seller confirming that such return or destruction occurred. If Seller cannot destroy all Personal Information as required herein due to recordkeeping law or the pendency of litigation requiring it to retain the Personal Information in its existing format, Seller warrants that it shall ensure the confidentiality of the Personal Information, that it shall not use or disclose Personal Information after termination of its services for the Buyer, and that it will comply with its destruction obligations once the legal prohibition on destruction has expired.

PART B: PERFORMANCE AT BUYER'S FACILITIES

In the event that Seller, its employees, agents and subcontractors (including delivery persons), enters any facility owned, leased or operated by Buyer (including Buyer’s shipyard at 28th Street and Harbor Drive, San Diego, California), Seller shall comply with the following additional terms and conditions.  Performance at Buyer’s facilities includes, but is not limited to, delivery of the Contract Products, rework and guarantee work.

1. Clean-Up of Work Site
   During the performance of this Contract, and upon completion of the Contract Work or earlier termination of this Contract, Seller shall remove all debris, garbage or other waste material, including excess materials, scrap and equipment used or generated in performance of this Contract from Buyer's facilities.  Seller shall be liable for and shall pay to Buyer, upon demand, all costs of removal for materials or equipment not so removed.

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2. Environmental
   Seller shall comply with Buyer’s environmental policies and procedures and with all federal, state and local laws and regulations regarding the use and disposition of hazardous substances. 

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3. Insurance
1. Without prejudice to Buyer’s rights and Seller’s obligations under the Indemnity paragraph herein, Seller shall keep and maintain in effect at its sole cost and expense the following policies of insurance:
1. Commercial General Liability insurance with coverage to include broad form property damage, personal injury, premises, completed operations, and products and contractual liability (specifically insuring the liability assumed under this Contract); and with a minimum bodily injury and property damage combined single limit of $2,000,000 per occurrence and $2,000,000 in the aggregate.
2. Commercial Automobile Liability insurance with coverage to include owned, hired, and non-owned vehicles; and with a minimum bodily injury and property damage combined single limit of $2,000,000 per occurrence.
3. Workers' Compensation and Longshore and Harbor Workers' Compensation Act insurance with limits conforming to the statutory requirements of the State of California and the United States of America, respectively. 
4. If Seller or its employees are assigned aboard a vessel for any reason and to any extent, Jones Act coverage with minimum limits of liability of $2,000,000 per occurrence and $2,000,000 in the aggregate.
5. If required on the face of the purchase order, Seller shall keep and maintain in effect at its sole cost and expense professional liability (errors and omissions) coverage with minimum limits of liability of $1,000,000 per occurrence and $1,000,000 in the aggregate.
2. Each such policy shall be underwritten by an insurance company satisfactory to Buyer; shall provide that it is primary insurance to, and noncontributing with, any other insurance carried by Buyer; and shall obligate the insurer to give Buyer not less than thirty (30) days prior written notice in the event of policy cancellation or any material change therein.  Certificates evidencing such policies, in a form satisfactory to Buyer, shall be delivered to Buyer upon issuance of the purchase order, and renewals thereof shall be sent to Buyer at least ten (10) days prior to the expiration of the respective policy terms.  The policies referred to above in subparagraphs (a)(1) and (a)(2) shall be endorsed to name Buyer as an “additional insured,” and the certificates provided to Buyer shall reflect such endorsement.  The policies referred to above in subparagraphs (a)(3) and (a)(4) shall contain a waiver of subrogation in favor of Buyer.
3. Notices regarding insurance policies shall be provided in writing and shall be deemed delivered five (5) days after deposit in the U.S. Mail, postage prepaid, certified mail and return receipt requested, when addressed to National Steel and Shipbuilding Company, Attention: Risk Manager (M/S 20-E), P.O. Box 85278, San Diego CA 92186-5278.
4. The insurance coverage limits stated above are minimum insurance coverage requirements, not limits of Seller’s liability.  Notwithstanding the above-required insurance policies, Seller shall be obligated for the full and total amount of any damage, injury, expense or loss.

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4. Safety
1. Seller shall be solely responsible for the safe conduct of all persons employed by Seller and its subcontractors.  Seller shall comply with all applicable federal, state, and local health, safety and fire protection laws and regulations.  Seller shall also comply with Buyer's safety policies and procedures.  Any failure by Seller or any of its suppliers to comply with any such safety policies, procedures, laws or regulations shall constitute a material breach of this Contract.  Under no circumstance shall compliance with Buyer's safety policies and procedures alone be considered complete satisfaction of the requirements of this subparagraph.
2. Seller shall complete the following prior to commencement of performance of the Contract Work at Buyer’s facilities:
1. Provide to Buyer's Safety Department the name, telephone number and title or position of the person who has the authority to correct any safety violations by Seller during the performance of this Contract (“Seller’s Safety Representative").
2. Seller's Safety Representative, together with equivalent representatives of Seller’s subcontractors who are expected to perform at Buyer's facilities, shall meet with Buyer's Safety Manager or designee to review applicable safety policies and procedures.
3. Provide to Buyer's Safety Department a copy of Seller's written safety policies and procedures.
4. Provide to Buyer's Safety Department a copy of all Material Safety Data Sheets (“MSDS”) for all chemical compounds that Seller anticipates using in performing this Contract at Buyer's facilities.
5. Cause each of Seller’s and Seller’s subcontractor’s employees who will be in Buyer's facilities to complete a "Personal Protective Equipment" statement acknowledging their safety responsibilities.
3. Seller shall immediately notify Buyer's Safety Department, in writing, upon receiving notice of any inspection from either United States OSHA or California OSHA representatives of their work area at Buyer's facilities.  In the event of such an inspection, Seller shall permit Buyer's personnel to be present at any opening conference, the inspection, and any closing conference, and Seller shall provide Buyer with copies of all correspondence, including citations, received from OSHA or Cal OSHA.
4. If, in Buyer's sole opinion, Seller fails to comply with this Safety paragraph, Buyer, may without prejudice to any other legal or contractual rights of Buyer, issue an order stopping all or part of Seller’s performance.  Seller shall have no claim for extension of time or for compensation or damages by reason of or in connection with such work stoppage.
5. Seller shall remove from Buyer's facilities any of Seller’s or Seller’s subcontractor’s employees immediately upon Buyer's request based upon (in Buyer's sole opinion) violation of Buyer's safety policies or procedures or violation of applicable federal, state or local safety laws or regulations.

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5. Security
   Seller shall comply with Buyer's security policies and procedures regarding personnel administration, vehicle operations, and general security practices.  Willful or repeated negligent noncompliance by Seller or any of its subcontractors with any such security policies or procedures shall constitute a material breach of this Contract.

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6. Treatment at Buyer's Medical Facilities
   Buyer shall have no obligation to furnish medical treatment to Seller's or Seller’s subcontractor’s employees while such employees may be working in Buyer's facilities.  In the event Buyer's Medical Department furnishes medical treatment to any such employee, Seller shall defend, indemnify and hold harmless Buyer, its affiliated companies, and the directors, officers and employees of each of them, from and against any and all claims, demands or causes of action, by Seller's employees or their representatives, heirs or assigns for costs or damages (including without limitation punitive damages and reasonable attorney fees) arising out of or in connection with medical treatment furnished by Buyer, including claims based upon the negligence of Buyer, and excluding only claims based on Buyer’s sole negligence or willful misconduct.

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7. Use of Buyer's Equipment
   Seller shall not use, or permit any third party to use, any of Buyer's equipment, tools, devices, apparatus or property ("Buyer's Equipment") without Buyer's express, written consent.  If Buyer so consents, Seller shall ensure that only qualified, properly trained persons use Buyer's Equipment and that such persons obey all of Buyer's applicable use procedures and requirements and all applicable federal, state and local laws and regulations.  If Buyer so consents, Buyer's Equipment is provided "as-is," with no warranty, express or implied, as to its merchantability, fitness for any particular purpose, current condition, or prior maintenance history.  Seller is responsible for all risk of loss of or damage to Buyer's Equipment used by Seller.

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8. Background Check, Credit History Check and Drug Screen
   This section applies to any individual who is required to enter Buyer’s facilities on a regular basis (30 or more days in any 365-day period) who is not a legal employee of Buyer.  This includes consultants, temporary employees, and individuals employed by any of Buyer’s contractors, subcontractors, labor suppliers, personnel agencies, vendors, etc.
   
   These individuals must meet the minimum screening requirements below before they are allowed to have unescorted access to Buyer’s facilities or access to the Buyer’s computer networks, UNLESS they meet at least one of the following criteria:
   
   1. production workers including those individuals that supervise production workers in New Construction and/or Repair provided they will not require access to any of the Buyer’s computer networks;
   2. individuals holding a TWIC (Transportation Worker Identification Credential) card; or
   3. individuals holding a DoD clearance at or above the SECRET level.
   
   Minimum screening requirements are:
   
   Background Check: Seller shall have verified through background checks that all employees provided hereunder have the education, skills, qualifications and experience represented to Buyer, including but not limited to the following:
   
   1. I-9 information (such as Social Security number or Registration number)
   2. Name (including all aliases, nicknames and former names) and all addresses for past 7 years
   3. Employment history - Employers and dates of employment (7 years)
   1. Job titles (7 years)
   2. Reason for termination of prior employment (if disclosed) (7 years)
   4. Education/Training—all pertinent degrees, professional licenses, certifications, etc.
   5. Criminal history—prior criminal convictions and guilty pleas (federal and state) (7 years), excluding juvenile offenses and offenses sealed or expunged by law
   6. Citizenship status
   7. Past revocation, denial or suspension of U.S. Government security clearance
   8. References (if any)
   
   In performing the background checks, Seller agrees to comply with all applicable local, state and federal laws, including the Fair Credit Reporting Act if applicable, where the Seller has obtained the employee’s consent and authorization to obtain such information and to follow all procedures required thereunder.  Seller agrees to retain all documents relating to such background checks for individuals who are or were assigned to perform services while this Contract is in effect, for at least two years from the date of assignment at Buyer.  Upon request by Buyer and within limits legally available to Buyer, Seller agrees to provide to Buyer within one business day a copy of such documents for any individual assigned to perform services pursuant to this Contract.
   
   Credit History Check: For all Seller’s employees whose work at Buyer’s facility  will have any relationship to (a) administration of Buyer’s computer networks; (b) access to non-public data regarding Buyer financial performance; or (c) performance of functions determined by Buyer to require a consumer credit history in order to protect Buyer and its assets, a disclosure and consent  authorization consistent with the Fair Credit Report Act (FCRA) and separate from the background check consent noted in the paragraph above, must be obtained by Seller, subject to verification by Buyer that the FCRA consent in use by Seller permits Buyer to receive and use the credit history check in connection with Seller’s employees’ access to Buyer facilities.
   
   Drug Screen:  Buyer is a drug-free yard and must be in compliance with Drug-Free Workplace Act of 1988.  Every Seller employee working at Buyer’s facility must be drug tested and must be drug free.  Buyer maintains the right to audit these findings at any time.  In performing the drug tests, Seller agrees to comply with all applicable local, state and federal laws.  Seller agrees to retain all documents relating to such drug tests for individuals who are or were assigned to perform services while this Contract is in effect, for at least two years from the date of last assignment at Buyer.  Upon request by Buyer, Seller agrees to provide Buyer within one business day with a copy of such documents for any Seller employee assigned to perform services pursuant to this Contract.

Vendor:___________________________________________________

Date:_____________________________________________________