COMMERCIALSupply Exhibit C 3-23-10.doc

EXHIBIT C

NATIONAL SECURITY TECHNOLOGIES, LLC

Commercial SUPPLY purchAses SUBCONTRACT

GENERAL CONDITIONS

TABLE OF CONTENTS

NO.

TITLE

PAGE

2C-1 Title and Administration

2C-2 Acceptance of Terms and Conditions

2C-3 Warranties

2C-4 New Materials

2C-5 Transportation

2C-6 Payment and Invoices

3C-7 Taxes

3C-8 Contractor Authorized Representative

3C-9 Suspension

3C-10 Termination for Convenience

3C-11 Hold Harmless – On-Site Services

3C-12 Subcontracts for Commercial Items and Commercial Components

4C-13 Government Restricted Parties and Commodities

5C-14 Assignment of Subcontract by Contractor

5C-15 Assignment by Subcontractor (Monies and Performance)

5C-16 Suspect/Counterfeit Items or Components

6C-17 Publicity and Advertising

6C-18 Order of Precedence

COMMERCIAL PURCHASES SUBCONTRACT

GENERAL CONDITIONS

C-1 Title and Administration

All property rights and interests in the property resulting from this subcontract shall pass directly from SUBCONTRACTOR to the Government. The CONTRACTOR shall make payments under this order from funds advanced by the Government. The CONTRACTOR may assign the order to the Government or its designee, and in case of such transfer and notice thereof to SUBCONTRACTOR, CONTRACTOR shall have no further responsibilities hereunder. The SUBCONTRACTOR shall cooperate in the proper and orderly transition to the successor CONTRACTOR chosen to perform any uncompleted portion of this order.

C-2 Acceptance of Terms and Conditions

SUBCONTRACTOR, by signing the subcontract, agrees to comply with all the terms and conditions and all specifications and other documents that this order incorporates by reference or attachment.

C-3 Warranties

SUBCONTRACTOR expressly warrants that items delivered under the order shall be in accordance with SUBCONTRACTOR’S (or manufacturer’s) affirmation, description, sample, or model and compliant with all requirements of the order. If any nonconformity with item appears within that time, SUBCONTRACTOR shall promptly repair or replace such items or reperform services. Transportation of replacement items and return of nonconforming items and repeat performance of services shall be at SUBCONTRACTOR’S expense. If repair or replacement or reperformance of services is not timely, CONTRACTOR may elect to return the nonconforming items or repair or replace them or reprocure the services at SUBCONTRACTOR’S expense.

C-4 New Materials

Unless otherwise specified in the subcontract, 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. This doesn’t exclude the use of recycled or recovered material as defined by the Environmental Protection Agency in 40 CFR 247.

C-5 Transportation

Transportation shall be as specified on the order and no excess insurance cost shall be allowed unless authorized in writing on the specific order.

C-6 Payment and Invoices

Electronic funds transfer is the preferred method of payment used by NSTec. To take advantage of this expedited payment process, complete form FRM-0870. The form can be found at: www.nstec.com/ppmgt/pdfs/FRM0870.doc.

Unless otherwise provided, terms of payment shall be net 30 days from the later of (1) receipt of SUBCONTRACTOR’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 SUBCONTRACTOR indicates. Payments may be made either by check or electronic funds transfer.

SUBCONTRACTOR shall submit all billings, including the final billing, detailed by Purchase Order Line Item Number on the invoice, in original and two (2) copies to:

National Security Technologies, LLC (NSTec)

P.O. Box 98521, M/S NLV025

Las Vegas, NV 89193-8521

Attention: Accounts Payable

Reference: Subcontract No. TBD

C-7 Taxes

NSTec qualifies as a Government Supply Contractor, according to CA Reg. 1618. All purchases for NSTec, CA operations are sales for reuse to the US Govt. CA State Sales Tax Permit Number SR Y EH 100-775921.

C-8 Contractor Authorized Representative

Only the Procurement Representative is authorized on behalf of CONTRACTOR to issue changes whether formal or informal.

C-9 Suspension

The CONTRACTOR may, for any reason, direct the SUBCONTRACTOR to suspend performance of any part of or all of the performance of the order for a period of time not to exceed 90 days unless mutually agreed. If any such suspension significantly delays the progress of or causes the SUBCONTRACTOR additional direct expenses in the performance of the order, not due to the fault or negligence of the SUBCONTRACTOR, the compensation to the SUBCONTRACTOR shall be adjusted by a modification to the order and the time of performance shall be extended by the actual duration of the suspension. Any claim by the SUBCONTRACTOR for compensation of a schedule extension must be supported by an appropriate document asserted within ten days from the date an order is given to the SUBCONTRACTOR to resume the performance of the order.

C-10 Termination for Convenience

The CONTRACTOR may, in its sole discretion, terminate the order, at any time, by giving the SUBCONTRACTOR a written notice of termination. Upon receipt of a notice of termination, the SUBCONTRACTOR shall, unless the notice requires otherwise, discontinue all performance on the date and to the extent specified in the notice, and shall otherwise minimize costs to the CONTRACTOR. Payment for items already completed or in the process of completion, shall be adjusted between the SUBCONTRACTOR and the CONTRACTOR in a fair and reasonable manner, but such payment shall exclude any allowance for the uncompleted portion of the items, or any anticipated profits thereon. Such payment for items already completed or in the process of completion shall be the total compensation due to the SUBCONTRACTOR for termination for Convenience of the CONTRACTOR.

C-11 Hold Harmless – On-Site Services

This Subcontract is written with the full understanding that the SUBCONTRACTOR holds harmless, the CONTRACTOR, NSTec, and the Government against any accident or injury, while working at any of the National Nuclear Security Administration facilities. The SUBCONTRACTOR will also maintain all insurance in force, as required in the state where the vendor will perform this Subcontract.

C-12 Subcontracts for Commercial Items and Commercial Components

(a) Definition.

“Commercial item”, as used in this clause, has the meaning contained in the clause at 52.202-1, Definitions.

“Subcontract”, as used in this clause, includes a transfer of commercial items between division, subsidiaries, or affiliates of the CONTRACTOR or SUBCONTRACTOR at any tier.

(b) To the maximum extent practicable, the SUBCONTRACTOR shall incorporate, and require its SUBCONTRACTORS at all tiers to incorporate commercial items or non-developmental items as components of items to be supplied under this contract.

(c) Notwithstanding any other clause of this contract, the SUBCONTRACTOR is not required to include any FAR provision or clause, other than those listed below to the extent they are applicable, and as may be required to establish the reasonableness of prices under Part 15, in a subcontract at any tier for commercial items or commercial components:

(1) 52.222-26, Equal Opportunity (E.O. 11246);

(2) 52.222-35, Affirmative Action for Disable Veterans and Veterans of the Vietnam Era

(38 U.S.C. 4212(a));

(3) 52.222-36, Affirmative Action for Workers with Disabilities (29 U.S.C. 793);

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

C-13 Government Restricted Parties and Commodities

SUBCONTRACTOR acknowledges that all applicable export rules and regulations of the origin countries shall apply to the exports of commodities, software and technology (technical data and assistance) under this Subcontract. SUBCONTRACTOR also acknowledges that other rules and regulations may restrict the use of certain parties under this Subcontract. Such rules and regulations are generally described below.

1. Restricted Parties Lists

Country governments and international organizations such as the United Nations and European Union publish Restricted Parties Lists (“Lists”) that identify parties (such as known or suspected terrorists, money launderers and drug traffickers) restricted from certain or all types of transactions. SUBCONTRACTOR shall review all applicable Lists prior to initiating transactions with any third party for the performance of all or any portion of the Work to ensure such third party is not identified on any applicable Lists. SUBCONTRACTOR shall not enter into any transactions with any third party identified on any applicable Lists.

2. Licensing Requirements

(a) General: Each country has export regulations that control commodities, software and technology for various reasons, such as national security, foreign policy, anti-terrorism, and to avoid the proliferation of weapons and potential weapons, e.g. certain nuclear, chemical or biological agents. Numerous countries have export regulations that specifically address dual-use items, meaning commercial items with the potential to be applied to military and/or weapon proliferation uses. SUBCONTRACTOR shall ensure that all necessary export licenses are obtained, or license exceptions confirmed, prior to the export of any commodity, software or technology.

(b) United States of America (USA) Export Licensing Requirements: SUBCONTRACTOR is solely responsible for obtaining any required USA export licenses for all commodities, software, and technology being supplied in the performance of the Work, except for any commodity, software or technology supplied by CONTRACTOR. A copy of the export license, or rationale as to why a license is not required, shall be provided to CONTRACTOR upon request.

SUBCONTRACTOR shall be responsible for any delay resulting from SUBCONTRACTOR’S failure to comply fully and timely with any such rule or regulation described above. SUBCONTRACTOR hereby agrees to indemnify, defend and hold CONTRACTOR, each of their respective affiliates and the respective directors, officers, employees and representatives of each harmless from and against any and all claims, legal or regulatory actions, final judgments, reasonable attorneys' fees, civil fines and any other losses which any of them may incur as a result of SUBCONTRACTOR’S failure to comply with its obligations under this clause.

C-14 Assignment of Subcontract by Contractor

SUBCONTRACTOR agrees that the subcontract rights and duties of the CONTRACTOR may be freely assigned to the government or a successor CONTRACTOR.

SUBCONTRACTOR shall cooperate in the proper and orderly transition to the successor CONTRACTOR chosen to perform any uncompleted portion of this Subcontract.

C-15 Assignment by Subcontractor (Monies and Performance)

Any assignment of this Subcontract or rights hereunder, in whole or part, without the prior written consent of CONTRACTOR shall be void, except that upon ten (10) calendar days written notice to CONTRACTOR, SUBCONTRACTOR may assign monies due or to become due under this Subcontract, provided that any assignment of monies shall be subject to proper set-offs in favor of CONTRACTOR and any deductions provided for in this Subcontract. No assignment or Subcontract will be approved which would relieve SUBCONTRACTOR or its sureties, if any, of their responsibilities under this Subcontract.

SUBCONTRACTOR shall not subcontract with any third party for the performance of all or any portion of the Work without the advance written approval of CONTRACTOR. Lower-tier Subcontracts and purchase orders must include provisions to secure all rights and remedies of CONTRACTOR and Government provided under this Subcontract, and must impose upon the lower-tier SUBCONTRACTOR and supplier all of the general duties and obligations required to fulfill this Subcontract.

Copies of all purchase and Subcontract agreements are to be provided to CONTRACTOR upon request. Pricing may be deleted unless the compensation to be paid there under is reimbursable under this Subcontract.

C-16 Suspect/Counterfeit Items or Components

Equipment/material provided under this Subcontract may be considered safety critical. Accordingly, CONTRACTOR will conduct a receipt inspection of this equipment/material prior to acceptance. This inspection will incorporate, among other things, an inspection for suspect/counterfeit items (S/CI) or components contained within, or on the equipment in accordance with DOE Order No. G 414.1-3 “Implementation Guide for Use with S/CI, dated November 3, 2004.” During the inspection of this equipment/material, particular attention will be made to the “Critical Load Path,” where applicable.

Notwithstanding any other provisions of this SUBCONTRACT, should any S/CI or components be found within or on this equipment, SUBCONTRACTOR shall, at its expense, promptly replace such items or components, or promptly replace the equipment/material, prior to acceptance by CONTRACTOR.

Additionally, NSTec Nevada reserves to right to perform S/CI inspections at the work location(s) during the course of this Subcontract.

CONTRACTOR shall not be liable for payment of any amount for items not accepted.

C-17 Publicity and Advertising SUBCONTRACTOR shall not make any announcement, take any photographs, or release any information concerning this Subcontract, or the CONTRACTOR’S Prime Contract, or the Government’s operations, or any part thereof to any member of the public, press, business entity, or any official body unless prior written consent is obtained from CONTRACTOR.

SUBCONTRACTOR shall not allow any publication or public presentation of information developed during the Work (including without limitation reports, journal articles, thesis or dissertations, conference presentations and the like) without prior clearance from CONTRACTOR and approval by the Government. SUBCONTRACTOR should allow at least 45 days for the clearance process, or a longer time if Classified, Controlled Nuclear, or other sensitive information is involved.

C-18 Order of Precedence The Subcontract Agreement Form and all documents listed therein are essential parts of the Subcontract and a requirement occurring in one is binding as though occurring in all. The order of precedence for the Subcontract Agreement Form and all documents listed therein shall be as follows:

1.

Subcontract Agreement Form

2.

Exhibit A - Quantities and Prices

3.

Exhibit C - General Conditions

The foregoing notwithstanding, conflicts, discrepancies, errors or omissions among the various Subcontract documents shall be submitted immediately by SUBCONTRACTOR for decision and such decision shall be final.

Commercial Exhibit C Solicitation No. 218669-DD-10

Subcontract No. TBD March 23, 2010