matechexh10_5.htm


    
      

    


    Exhibit
10.5

    


    


    TEAMING
AGREEMENT BETWEEN TENSIODYNE CORPORATION

    AND

    SOUTHWEST
RESEARCH INSTITUTE

     

     

    TEAMING
AGREEMENT

    No.
96-058

    


    


    THIS
AGREEMENT made and entered into by and between SOUTHWEST RESEARCH INSTITUTE
(hereinafter referred to as "SwRI") located at 6220 Culebra Road, San Antonio,
Texas 78238-5166, and TENSIODYNE SCIENTIFIC CORPORATION (hereinafter
referred to as the "Subcontractor") located at 11835 West Olympic Boulevard,
Suite 705, West Los Angeles California 90064.

     

    WHEREAS,
SwRI intends to submit a proposal as prime contractor to the Government in
response to a Task Order Request that may be issued pursuant to an existing SwRI
ID/IQ contract concerning a program entitled "ELECTROCHEMICAL
METAL FATIGUE MONITORING TECHNOLOGY" (hereinafter referred to as "the
Program");

     

    WHEREAS,
the existing Electrochemical Metal Fatigue Monitoring Technology ("EPS") is a
proprietary technology previously developed by Subcontractor and the University
of Pennsylvania.

     

    WHEREAS,
SwRI and the Subcontractor desire to combine their respective capabilities with
the capabilities of the University of Pennsylvania in a team effort to submit
said proposal for the Program and to complete the work required by any work
statement in any task order (hereinafter referred to as "Task Order") resulting
from such proposal; and

     

    WHEREAS,
SwRI and the Subcontractor desire to define their mutual rights and obligations
during the preparation and submittal of said proposal and under any subsequent
Task Order resulting therefrom, consistent with federal/state laws governing
restraint of trade or competition as applicable.

    


    


    
      
         

      

      
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    NOW
THEREFORE, to effect the foregoing, SwRI and the Subcontractor in consideration
of the mutual covenants hereinafter contained, agree as follows:

     

    1.   The
proposal will be based on SwRI acting as the prime contractor to the Government
for any resultant Task Order, and Tensiodyne Scientific Corporation and the
University of Pennsylvania acting as subcontractors to SwRI, furnishing of
support to the Prime Contractor under the Program. Any resulting subcontract to
the Subcontractor will involve, but may not be limited to, work set forth in
Exhibit "A" in Statement of Work attached hereto.

     

    2.   SwRI
will prepare and submit its proposal to the Government with assistance from the
Subcontractor in the following areas: inputs on selected Statement of Work
tasks, related experience information, tailored resumes on key personnel, and
appropriate costs information, all to be used in preparation of the SwRI
proposal.  Details and formats for these inputs will be provided
separately.

     

    3.   SwRI
will recognize and identify the Subcontractor in its proposal and use its
diligent efforts to secure Government approval of the use of the Subcontractor
in the Program for the area of responsibility described in Exhibit A, including
but not limited to affording Subcontractor an opportunity to accompany SwRI on a
visit to the Government for the purpose of securing such
approval.  SwRI will keep the Subcontractor fully advised of any
changes which affect its area of responsibility.

     

    4.   In
the event SwRI is awarded the Task Order contemplated by the Request for Task
Order Proposal identified on Page One of this Agreement, to accomplish the work
set forth in Exhibit "A" of this Agreement, it is agreed that SwRI and the
Subcontractor will, in good faith, proceed in a timely manner to negotiate a
mutually acceptable subcontract(s) for the selected portions of the work
identified in Exhibit "A" and described in a responsible technical/cost proposal
prepared by the Subcontractor, unless otherwise directed by the Government.
The

    


    


    
      
         

      

      
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    subcontract
shall embody, among other provisions, those terms and conditions of the prime
contract which must be passed on to the Subcontractor in order to comply with
such prime contract (a) terms and conditions setting forth the work specified on
Exhibit A; (b) provisions setting forth the prices contained in the
Subcontractor's proposal or those approved in writing by Subcontractor prior to
their inclusion in the Proposal; and (c) other provisions mutually agreed to by
and between SwRI and the Subcontractor including those set forth on Exhibit B.
The
subcontract will be negotiated at a fair and reasonable price(s) to be
established after cost or price analysis in accordance with the requirements of
the applicable Government procurement regulation.  In the event that
negotiations with the Government result in a substantial reduction of the
Subcontractor's area of responsibility from that proposed by the Prime
Contractor, SwRI shall afford Subcontractor an opportunity to accompany SwRI on
a visit to the Government for the purpose discussing the Government's decision
and
making a presentation to the Government for the purpose of reversing the
Government's decision and securing the Government approval for Subcontractor of
the original areas of responsibility.  It is understood between SwRI
and the Subcontractor that any such subcontract will be subject to the approval
of the Contracting Officer of the procuring authority of the United States
Government, regardless of the provisions hereof.

     

    The
subcontract shall include the following clause as well as those contained on
Exhibit B:

    


    "In the
event any cost negotiated in connection with the contract between
the Government and SwRI or any cost that is reimbursable under such
contract is reduced as a result of a formal demand by the Government
Contracting Officer because cost or pricing data furnished and
certified to by the Subcontractor is defective, the Subcontractor will
reimburse SwRI for such cost.  However, the Subcontractor shall
not be
liable for SwRI's profit on the Subcontractor's cost or pricing data.

     

    For the
purposes of administering this clause and interpreting the rights
and obligations of the parties, the various rules and guidelines
provided for in FAR 15.804 and 15.806 shall govern.

    


    


    
      
         

      

      
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    SwRI
agrees that the Subcontractor shall have the right in accordance with the
intent set forth in the applicable FAR clause, to proceed under
SwRI's name (by asserting the prime contract) by entering appeal from any
decision of the Contracting Officer concerning the alleged submission
of defective cost or pricing data by the Subcontractor under the
subcontract, and SwRI agrees that it will give the Subcontractor
prompt notice of such decision in order that an appeal may be
perfected."

    


    Each
party shall exert its diligent efforts toward the successful performance of the
Task Order contemplated by the Request for Task Order Proposal identified on
Page One of this Agreement, assuming award of the Task Order and
the subcontract to the parties hereto, and shall provide appropriate and high
quality managerial, marketing, advisory, technical, and other personnel to
perform and support such contracts.

     

    5.   LIMITATIONS
ON USE OF DATA AND INFORMATION

    


    
      	
               
      

            	a.	
              The
      parties anticipate that under this Agreement it may be necessary for
      either party to transfer to the other information of a proprietary
      nature.  Proprietary information shall be clearly identified by
      the disclosing party at the time of disclosure by (i) appropriate stamp or
      markings on the document exchanged; or (ii) written notice, with attached
      listings of all material, copies of all documents, and complete summaries
      of all oral disclosures (under prior assertion of the proprietary nature
      of the same) to which each notice relates, delivered within two (2) weeks
      of the disclosure to the other party.

            
	 	 	 
	 	b.	Each
      of the parties agrees that it will use the same reasonable efforts to
      protect such information as are used to protect its own proprietary
      information.  Disclosures of such information shall be
      restricted to those


    

     

     

    
      
         

      

      
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      	 	 	individuals
      who are directly participating in the proposal, contract and subcontract
      efforts identified in Articles 1, 2, 3, and 4 hereof.
	 	 	 
	 	c. 	Neither
      party shall make any reproduction, disclosure, or use of such proprietary
      information except as follows:


    

     

    
      	 	 	(1) 	Such
      information furnished by the Subcontractor may be used, reproduced and/or
      disclosed by SwRI in performing its obligations under this
      Agreement.
	 	 	 	 
	 	 	(2)	Such
      information furnished by SwRI may be used, reproduced and/or disclosed by
      the Subcontractor in performing its obligations under this
      Agreement.
	 	 	 	 
	 	 	(3) 	Such
      information may be used, reproduced and/or disclosed for other purposes
      only in accordance with prior written authorization received from the
      disclosing party.


    

     

    
      	 	d. 	The
      limitations on reproduction, disclosure, or use of proprietary information
      shall not apply to, and neither party shall be liable for reproduction,
      disclosure, or use of proprietary information with respect to which any of
      the following conditions exist:


    

     

    
      	 	 	(1) 	If,
      prior to the receipt thereof under this Agreement, it has been developed
      or learned independently by the party receiving it, or has been lawfully
      received from other sources without any restriction of non-disclosure,
      including the Government, provided such other source did not receive it
      due to a breach of this Agreement or any other
  agreement.


    

     

     

    
      
         

      

      
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      	 	 	(2)	If,
      subsequent to the receipt thereof under this Agreement,(i) it is published
      by the party furnishing it or is disclosed, by the party furnishing it to
      others, including the Government, without restriction; or (ii) it has been
      lawfully obtained, by the party receiving it, from other sources without
      any restriction of non-disclosure including the Government, provided such
      other source did not receive it due to a breach of this or any other
      agreement; or (iii) such information otherwise comes within the public
      knowledge or becomes generally known to the public without breach of this
      Agreement;
	 	 	 	 
	 	 	(3)	If
      any part of the proprietary information has been or hereafter shall be
      disclosed in a United States patent issued to the party furnishing the
      proprietary information hereunder, the limitations on such proprietary
      information as is disclosed in the patent shall be only that afforded by
      the United States Patent Laws after the issuance of said
  patent.


    

     

    
      	 	e. 	Neither
      the execution and delivery of this Agreement, nor the furnishing of any
      proprietary information by either party shall be construed as granting to
      the other party either expressly, by implication, estoppel, or otherwise,
      any license under any invention or patent now or hereafter owned or
      controlled by the party furnishing the same.
	 	 	 
	 	f.	Notwithstanding
      the expiration of the other portions of this Agreement, the obligations
      and provisions of this Article 5 shall continue for a period
      of


    

     

     

    
      
         

      

      
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      	 	 	three
      (3) years from the date of this Agreement, however, any resulting contract
      shall take precedence.
	 	 	 
	 	g. 	
              Each
      party will designate in writing one (1) or more individuals within its
      organization as the only point(s) for receiving proprietary or security
      information exchanged between the parties

              pursuant
      to this Agreement.

            


    

    
       

      6.   RIGHTS
IN INVENTIONS

       

      Inventions
conceived or first reduced to practice during the course of work under the
Contract contemplated by this Agreement shall remain the property of the
originating party.  In the event of joint inventions, the parties
shall establish their respective rights by negotiations between
them.  In this regard, it is recognized and agreed that the parties
may be required to and shall grant license or other rights to the Government to
inventions, data and other information under such standard provisions which may
be contained in the Government Contract contemplated by this Agreement,
provided, however, such license or other rights shall not exceed those required
by said Contract.

       

      7.   No
publicity or advertising regarding any proposal or contract under the Program or
relating to this Agreement shall be released by either party without the prior
written approval of the other party.  No advertising or publicity
containing any reference to the Subcontractor or any of its employees, either
directly or by implication, shall be made use of by SwRI or on SwRI's behalf,
without the Subcontractor's prior written approval.

       

      8.   All
communication relating to this Agreement shall be directed only to the specific
person designated to represent SwRI and the Subcontractor on this
Program.  Each of the parties to this Agreement shall appoint one (1)
technical and one (1) administrative representative.  These
appointments shall be kept current during the period of this
Agreement.  Communications which are not properly directed to the
persons designated to represent SwRI and the Subcontractor
shall

    

    


    


    
      
         

      

      
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    not being
binding upon SwRI or the Subcontractor.  For purposes of this section,
"properly directed" shall mean an oral communication or a written correspondence
addressed and transmitted to the individuals identified below.

     

    All
technical notices shall be addressed to:

     

    As to
SwRI:

     

    Dr.
Stephen J. Hudak, Jr.

    Director,
Materials Engineering Department

    Southwest
Research Institute

    P.O.
Drawer 28510

    San
Antonio, Texas 78228-0510

    210/522-2330

     

    As to
SUBCONTRACTOR:

     

    MR.
ROBERT M. BERNSTEIN

    TENSIODYNE
SCIENTIFIC CORPORATION

    11835
WEST OLYMPIC BOULEVARD, SUITE 705

    WEST LOS
ANGELES, CALIFORNIA 90064

    


    All
contractual notices shall be addressed to:

     

    As to
SwRI:

     

    Mr.
Robert E. Chatten

    Director,
Contracts

    Southwest
Research Institute

    P.O.
Drawer 28510

    San
Antonio, Texas 78228-0510

    210/522-2235

     

    As to
SUBCONTRACTOR:

     

    MR.
ROBERT M. BERNSTEIN

    TENSIODYNE
SCIENTIFIC CORPORATION

    11835
WEST OLYMPIC BOULEVARD, SUITE 705

    WEST LOS
ANGELES, CALIFORNIA 90064

    


    9.   Except
for the conditions expressed in Articles 4 and 5 hereof, this Agreement, which
is effective upon the date of its execution by the last of the signatory parties
hereto, shall

     

     

    
      
         

      

      
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    automatically
expire and be deemed terminated effective upon the date of the happening or
occurrence of any one of the following events or conditions, whichever shall
first occur:

    


    
      	
               
      

            	a.	
              Official
      Government announcement or notice of the cancellation of the
      Program.

            
	 	 	 
	 	b. 	The
      receipt by SwRI of written notice from the Government that it will not
      award to it the Task Order for the Program.
	 	 	 
	 	c. 	The
      receipt of written notice from the Government that it has awarded a
      Contract or Task Order for the Program to someone other than
    SwRI.
	 	 	 
	 	d. 	The
      receipt of official Government notice that the Subcontractor will not be
      approved as a major subcontractor under the Task Order to SwRI on the
      Program or that substantial areas of the Subcontractor's proposed
      responsibility AND/OR RELATED COSTS have been eliminated from the
      requirements, OR DISAPPROVED BY THE as long as the parties have met their
      obligations as set forth in Sections 3 and 4 above.
	 	 	 
	 	e. 	Award
      of a subcontract to the Subcontractor by SwRI for its designated portion
      of the Program.
	 	 	 
	 	f. 	Mutual
      agreement of the parties to terminate the Agreement.
	 	 	 
	 	g. 	The
      expiration of a three (3) month period commencing on the effective date of
      this Agreement unless such period is extended by mutual agreement of the
      parties during which the Government fails to issue the Task Order for the
      Program OR, ALTERNATIVELY, THE PARTIES FAIL TO REACH AGREEMENT ON THE
      COSTS/PRICES AND TASKS TO BE INCLUDED IN THE SUBCONTRACTOR'S PROPOSAL TO
      BE SUBMITTED TO THE GOVERNMENT AS PART OF SwRI'S
  PROPOSAL.


    

     

     

    
      
         

      

      
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      	 	 h. 	 FAILURE
      OF THE PARTIES DESPITE GOOD FAITH NEGOTIATIONS TO REACH AGREEMENT AND
      EXECUTE A SUBCONTRACT BASED UPON EXHIBIT A ON OR BEFORE DECEMBER 15, 1996
      UNLESS MUTUALLY EXTENDED IN WHICH EVENT SwRI SHALL END ALL ACTIVITIES
      RELATING TO PERFORMANCE OF THE PROGRAM.
	 	 	 
	 	 i. 	 If
      this Agreement terminates for any of the reasons set forth above,
      excluding (e) above, SwRI shall either decline to submit a proposal for
      the Program or alternatively, if SwRI has submitted a proposal to the
      Government, withdraw its proposal for the Program from further
      consideration by the Government.


    

     

    10.  This
Agreement pertains only to the proposal relating to the Program and to no other
joint or separate effort undertaken by SwRI or the Subcontractor.  The
parties hereto shall be deemed to be independent contractors and the employees
of one (1) party shall not be deemed to be employees of the
other.  This Agreement shall not constitute, create, or in any way be
interpreted as a joint venture, partnership, agency relationship or formal
business organization of any kind.

     

    11.  This
Agreement may not be assigned or otherwise transferred by either party, in whole
or in part, without the express prior written consent of the other
party.

     

    12.  This
Agreement shall not preclude either party from bidding or contracting
independently from the other on any Government or industry program which may
develop or arise in the general area of business related to this Agreement
or in any other area.

     

    13.  This
Agreement shall be governed, construed and interpreted in accordance with the
laws of the United States and the State of Texas.

     

    14.  Access
to security information classified "Top Secret," "Secret," and "Confidential,"
shall be governed by the provisions of FAR 52.204-2.  Should
provisions be established by the Government for special access handling of
selected information relating to this Program, access will be governed by such
provisions.

     

     

    
      
         

      

      
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    15.  This
Agreement contains the entire agreement of the parties and cancels and
supersedes any previous understanding or agreement related to the Program,
whether written or oral.  All changes or modifications to this
Agreement must first be agreed to in writing between the parties.

     

    16.  Each
party to this Agreement will bear its respective costs, risks, and liabilities
incurred by it as a result of its obligations and efforts under this
Agreement.  Therefore, neither SwRI nor the Subcontractor shall have
any right to any reimbursement, payment, or compensation of any kind from each
other during the period prior to the award and execution of any resulting
subcontract between SwRI and the Subcontractor for the Program and work
described in this Agreement.

     

    17.  To
the extent permitted by law, during the effective term of this Agreement SwRI
and the Subcontractor each agree that it will not participate in any manner in
other teaming efforts that are competitive to this Teaming
Agreement.  Moreover, during the effective term of this Agreement,
SwRI and the Subcontractor each agree that it will not compete independently
(including the independent submission of a proposal to the Government) for the
work specified in this Agreement.  The term "participate" as used
herein includes (but is not limited to) the interchange of technical data with
competitors.

     

    18.  Either
party hereto is authorized to disclose the terms and conditions of this
Agreement to appropriate Government officials upon their request.

     

     


    
      
         

      

      
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    19.  In
the event a Task Order is not awarded to SwRI as a result of a proposal each
party will, at the request of the other party, return all materials such as, but
not limited to, those that are written, printed, drawn, or reproduced, to the
originating party.

     

    20.  This
Agreement is executed in multiple originals upon the date set forth beside the
final execution signature.

     

    21.  Exhibit
C attached contains agreed to language of Federal Lobbying Act.

    


    


    
      
        	 	SOUTHWEST
      RESEARCH INSTITUTE	 
	 	 	 	 
	
                 

              	
                By

              	/s/ Sharon
      Rowe	 
	 	 	for
      Robert E. Chatten	 
	 	 Title    
      Director, Contracts	 
	 	 Date    
      August 22, 1996	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
                TENSIODYNE
      SCIENTIFIC

                CORPORATION

              	 
	 	 	 
	 	 By 	 /s/
      Robert M. Bernstein	 
	 	 Name  
      Robert M. Bernstein	 
	 	 Title    
      Pres.	 
	 	 Date   
       8/23/96	 


      

    

     

     

    
 

    
      
         

      

      
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    EXHIBIT
A

    


    In
anticipation of the issuance by the San Antonio Air Logistics Center, Kelly Air
Force Base, San Antonio, Texas, of a task order and a statement of work pursuant
to Contract No. F41608-96-D-0108, for services to improve fatigue life
prediction utilizing the Electrochemical Fatigue Sensor and its related
technology (the "Services"), Southwest Research Institute ("SwRI") and
Tensiodyne Scientific Corporation ("Tensiodyne") agree that Tensiodyne shall
perform as subcontractor to SwRI which shall act as the prime contractor in the
performance of the Services.  The University of Pennsylvania ("Penn")
shall also be a subcontractor to SwRI and close technical interactions will be
required among Tensiodyne, Penn, and SwRI as indicated below.

     

    The
purpose of the work is to improve the U.S. Air Force's capability to perform
durability assessments of military aircraft, including both airframes and
engines using novel Electrochemical Fatigue Sensor (EFS) technology to detect
the stages of fatigue damage prior to, and after, the onset of fatigue
cracking.  The proposed program will include the following three
phases:   1) Phase 1:   Feasibility, 2) Phase
2:   Development, and 3) Phase 3:   Validation;
work on the feasibility phase is proposed for the first year and a half of
the project.  The overall objectives of this phase are to 1)
characterize the phenomena of current transients in representative airframe and
engine materials, 2) assess the feasibility of constructing sensors from
electrolytic gels and combination electrodes, and 3) evaluate both the
fundamental and practical limitations associated with key technical
challenges.  Provided the milestones of this phase are met, the Phase
1 work will provide the basis for proceeding in subsequent years to Phase 2 and
Phase 3 in development of a suitable breadboard device in support of the EFS.
The tasks to be performed in the first year and a half are provided in the
following Work Breakdown Structure (WBS).

    


    PHASE
1:   FEASIBILITY

    


    *1.1     Establish
viability of transient current measurements on a range of typical aircraft
alloys (e.g., 7075-I73, Ti-6-4, and 4130 steel).

    


    
      
        

      

    

    *        Penn
shall have the primary technical responsibility for these tasks and be supported
by Tensiodyne.

    +        SwRI
shall have the primary technical responsibility for these tasks and be supported
by Tensiodyne.

    


     

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

     

     

    *1.2     Establish
viability of measurements under bounding load ratios, frequencies, and waveforms
associated with typical spectrum fatigue loading of fighter/trainer and
transport aircraft.

    


    *1.3     Develop
nondamaging electrolytic gel and establish shelf-life.

    


    *1.4     Establish
possible influence of electrolytic gel on fatigue damage in selected aircraft
alloys under both continuous and intermittent exposure.

    


    *1.5     Develop
suitable reference electrodes which are compatible with electrolytic gel and
optimize for use in aircraft component tests in Phase 2:
Development.

    


    *1.6     Develop
general relationships among transient current traces, key loading variables, and
extent of fatigue damage for selected aircraft alloys. The key loading variables
shall include loading frequency and

    waveform,
load ratio, and load amplitude (including both elastic and plastic
loading).

    


    *1.7     Explore
fundamental relationship between transient current response under elastic versus
elastic-plastic strains.

    


    +1.8     Establish
practicality of measurements on protected (e.g., anodized, primed and painted)
as well as corroded surfaces, and if necessary, develop methods to
remove/reapply protective surface coatings without

    altering
underlying fatigue damage. This effort shall be coordinated with the USAF's
Coating Technology Integration Office (CTIO).

    


    +1.9     Perform
tests and develop associated signal analysis techniques to establish that the
sensor output will be interpretable for typical aircraft spaces.

    


    +1.10    Resolve
electrical isolation issues associated with application of EFS to aircraft
components and structures.

    


    In
anticipation of receiving funding in the amount of $2.5 million pursuant to the
anticipated task order to be issued by Kelly Air Force Base pursuant to Contract
No. F41608-96-D0108 and based upon the description of

    tasks and
division of task responsibilities in the above WBS, Tensiodyne shall receive
$820,000 for their respective responsibilities. The actual funding to Tensiodyne
will be based upon their cost proposals as

    subcontractors
to SwRI in response to the Government's SOW and the subsequent acceptance of
SwRI's technical and cost proposal by the Government.

    Tensiodyne
will assist both SwRI and Penn as indicated in the above WBS. Tensiodyne
assistance to Penn will be supplied by providing staff members to work under the
direction of Professor Campbell Laird.

    


     

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

     

    EXHIBIT
B

    


    


    Agreed to
Terms and Conditions as per telephone conversation on August 22,
1996.

     

    I.
Termination for Convenience

    II.
Rights in Inventions and Works of Authorships

    III.
Proprietary Rights

    IV.
Government Data Rights

    V.
Dispute Resolution

    VI.
Indemnification

    


     

     

     

     

     

     

     

     

    
 

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

     

    EXHIBIT
C

     

    No
Federal appropriated funds have been paid or will be paid, by or on behalf of
the undersigned, to any person for influencing or attempting to influence an
officer or employee of any agency, a Member of Congress, an officer or employee
of Congress, or an employee of a Member of Congress in connection with the
awarding of any Federal contract, the making of any Federal grant, the making of
any Federal loan, the entering into of any cooperative agreement, and the
extension, continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement.

    


    If any
funds other than Federal appropriated funds have been paid or will be paid to
any person for influencing or attempting to influence an officer or employee of
any agency, a Member of Congress, an officer or employee of

    Congress,
or an employee of a Member of Congress in connection with this Federal contract,
grant, loan, or cooperative agreement, the undersigned shall complete and submit
Standard Form -LLL, "Disclosure Form to Report Lobbying," in accordance with its
instructions.

    


    The
undersigned shall require that the language of this certification be included in
the award documents for all subawards at all tiers (including subcontracts,
subgrants, and contracts under grants, loans, and cooperative agreements) and
that all subrecipients shall certify and disclose accordingly.

    


    This
certification is a material representation of fact upon which reliance was
placed when this transaction was made or entered into.  Submission of
this certification is a prerequisite for making or entering into this
transaction imposed by section 1352, title 31, U.S. Code.  Any person
who fails to file the required certification shall be subject to a civil penalty
of not less than $10,000 and not more than $100,000 for each such
failure.

     

    
      ADDITIONAL
TERMS AND CONDITIONS TO BE INCLUDED IN THE SUBCONTRACT BY
AND   BETWEEN SOUTHWEST RESEARCH INSTITUTE AND TENSIODYNE
SCIENTIFIC CORPORATION AS AGREED TO BY THE PARTIES ON AUGUST 22 AND 23, 1996 AND
AS REFERENCED IN THE TEAMING AGREEMENT BETWEEN THE PARTIES EXECUTED ON AUGUST
23, 1996

    

     

    
      
         

      

      
        C-1

        
          

        

      

      
         

      

    

     

    I.  TERMINATION
FOR CONVENIENCE

     

    Performance
of work under this Subcontract may be terminated in whole or in part by SwRI, at
any time, only if and to the extent that the Government terminates the
corresponding work set forth in the Task Order issued to SwRI pursuant to
Contract ______________.  Any such termination shall be effected by
delivery to Subcontractor of a Notice of Termination specifying the extent to
which performance of work under this Subcontract is terminated and the date upon
which such termination becomes effective.  Such termination of this
Subcontract

    shall be
in accordance with FAR _________ as incorporated by reference pursuant to
Exhibit __ of this Subcontract.

    


    II.
RIGHTS IN INVENTIONS AND WORKS OF AUTHORSHIP

    


    A.   During
the performance of this Subcontract, subject to the rights granted to the
Government as discussed in Article __ of this Subcontract, inventions, works of
authorship and other proprietary technical data (as well as the copyrights,
patents and similar rights attendant thereto):

    


    
      	
               
      

            	(1) 	
              conceived
      and reduced to practice, or, in the cases of works of authorship, authored
      solely by employees of, or persons under contract to, either party shall
      be owned exclusively by that party:

            
	 	 	 
	 	(2)	conceived
      and reduced to practice, or, in the cases of works of authorship, authored
      jointly by the parties shall be owned as determined by the parties' good
      faith negotiations to establish their    respective
      rights.  Failing agreement or resolution of the matter pursuant
      to the dispute resolution procedure of this Subcontract, each party shall
      have an equal undivided one-half interest in the invention, work of
      authorship, proprietary technical data, copyright or
      patent.  Subject to the Government's rights, the parties agree
      to use their best efforts to reach mutual agreement as to their rights and
      obligations in connection with the commercial exploitation of any joint
      invention, work or authorship or proprietary technical
      data.  Failing agreement, the matter shall be a Dispute and
      resolved as set forth in accordance with the dispute resolution procedure
      of this Subcontract.  Each of the parties agrees to cause their
      employees to produce only "works made for hire" hereunder and will hold
      the other party harmless from their failure to do
so.


    

     

    B.   Each
party agrees to use its best efforts to require its employees, and if
appropriate, other persons under contract to it, to provide reasonable
assistance in the

    


    


    
      
         

      

      
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    procurement
and protection of rights conferred by this Article and to execute all lawful
documents in conjunction therewith. Expenses incurred in conjunction with the
preparation of patent applications, applications for copyright registrations and
in enforcing proprietary rights therein shall be borne by the party
owning such rights or, if jointly owned, by the parties in proportion to their
respective interests.

    


    III.
PROPRIETARY RIGHTS

    


    SwRI
shall be afforded, to the extent required to meet its obligations under this
Subcontract and the Task Order issued pursuant to Contract No. ___, the same
rights and obligations as the Government regarding technical data, computer
software and other deliverables under this Subcontract.

    


    IV.
GOVERNMENT DATA RIGHTS

    


    The
rights granted to the Government with regard to technical data shall be
determined in accordance with DFARS 252.227-7013 (Nov. 1995).  Both
parties acknowledge that Subcontractor and SwRI possess pre-existing technical
data, developed exclusively at private expense and such data shall not be
delivered with "unlimited rights."  Such pre-existing technical data,
as well as pre-existing patents shall be identified by Subcontractor and shall
be marked in accordance with DFARS 252.227-7013 (Nov. 1995).  SwRI
acknowledges and agrees that it shall fully inform the Government of such
pre-existing technical data and patent rights.

    


    V.  DISPUTE
RESOLUTION

    


    A.   DISPUTES
UNDER THIS SUBCONTRACT.  This paragraph A governs all claims,
controversies or disputes arising out of or relating to this Subcontract or its
breach ("Disputes") that are not directly or indirectly subject to resolution
under the Disputes Clause of the Prime Contract.  Any Dispute that is
not disposed of by written mutual agreement will be preliminarily determined by
SwRI's Authorized Representative, who will within 15 days render a preliminary
written determination on the issues in dispute and furnish a copy thereof to
the

    Subcontractor.  The
preliminary determination will become final and conclusive unless the
Subcontractor submits a written demand for arbitration to the American
Arbitration Association within 30 days of the preliminary

    determination.  The
Dispute will then be arbitrated, pursuant to the Commercial Rules of the
American Arbitration Association, before a panel of three
arbitrators.  The "preliminary determination" will not bind the
arbitrators and will not prejudice the legal position of either party in the
arbitration.  One of the arbitrators will be selected by each party,
and the third arbitrator will be selected by the two party-appointed
arbitrators.  Any such arbitration will be held in the _____________
metropolitan area.  The parties will share the costs of the
arbitration equally subject to final apportionment by the
arbitrators.  The arbitrators will apply the law chosen by the parties
to govern this Subcontract.  The decision of the arbitrators may be
entered in any court of competent jurisdiction.  Neither party will
institute any action or proceeding against the other party in any court
concerning any Dispute that is or could be the subject of a claim or proceeding
under this paragraph A.  The arbitrators shall not award exemplary or
punitive damages to either party.

     

    
      
         

      

      
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    B.   DISPUTES
UNDER THE PRIME CONTRACT.  This paragraph B governs all Disputes of
the Subcontractor concerning matters that are directly or indirectly subject to
resolution under the Disputes Clause of the Prime Contract.  SwRI
will submit any such Dispute to the Contracting Officer under the Prime Contract
for a written decision under the Disputes Clause of the Prime Contract and will
notify the Subcontractor of any final decision of the Contracting Officer under
the Prime Contract that relates to this Subcontract or to the Subcontractor's
performance under it within 10 days after SwRI receives the
decision.  Any final decision will be conclusive and binding upon the
Subcontractor unless it is appealed pursuant to paragraph A. above or pursuant
to the Disputes Clause of the Prime Contract.

     

    If SwRI
elects not to appeal any final decision of the Contracting Officer under the
Disputes Clause of the Prime Contract, SwRI will so notify the Subcontractor in
writing within 20 days after SwRI receives the final decision. Within 30 days
after Subcontractor receives SwRI's notice of its decision not to appeal the
final decision of the Contracting Officer, Subcontractor notify SwRI that
Subcontractor wishes to appeal that final decision pursuant to the Disputes
Clause of the Prime Contract.  SwRI shall, within 10 days either grant
or deny the
Subcontractor an indirect right to appeal that final decision in SwRI's name
under the Disputes Clause of the Prime Contract.  Both parties
acknowledge and agree that with regard to Disputes concerning alleged
submissions of defective cost or pricing data, SwRI shall grant Subcontractor's
request. Subcontractor will pay all costs and expenses of any such
appeal.  Subcontractor will be solely responsible for prosecuting the
appeal and preparing and presenting all pleadings, evidence and
argument.  Subcontractor will provide monthly written reports
to SwRI of the progress of the appeal and will furnish SwRI copies of all
pleadings and non-privileged correspondence filed or received by it concerning
the appeal.

     

    If SwRI
is required to submit a certification to the Government regarding a claim
submitted pursuant to the Contract Disputes Act, Subcontractor will make
available to SwRI all data and documentation that is necessary or appropriate to
support or confirm the certification.

     

    In the
event, SwRI denies Subcontractor an indirect right to appeal a final decision in
SwRI's name under the Disputes Clause of the Prime Contract, both parties
acknowledge and agree that such Dispute shall be considered a Dispute by and
between the Subcontractor and SwRI and that such Dispute shall be submitted to
arbitration in accordance with paragraph A. above.  SwRI agrees that
it shall not utilize as a defense the fact that the Dispute was one that
concerns matters that were directly or indirectly subject to resolution under
the Prime Contract to any alleged damages or costs owed to Subcontractor arising
in connection with the Dispute, and SwRI agrees to step into the shoes of the
Government with regard to such Dispute.

     

    C.   DISPUTE-RESOLUTION
METHOD AND CONTINUATION OF PERFORMANCE.  Pending the final resolution
of any Dispute under this Article, Subcontractor will proceed diligently to
perform this Subcontract and comply with SwRI's preliminary
determination.

    


    VI.
INDEMNIFICATION

    


    Each
party and its agents, employees and authorized assigns shall be indemnified,
defended and held harmless (including reasonable attorneys fees) by the other
party against all

    


    

    

    
      
         

      

      
        C-4

        
          

        

      

      
         

      

    

    


    third
party liability (including liability to the government) that arises from or in
connection with negligence, or willful, wanton, or reckless conduct of the other
party, its employees, agents, subcontractors, or authorized assigns in the
performance of this Subcontract which causes damage to real or tangible personal
property, death or bodily injury, provided that: (1) the indemnifying party was
properly notified in writing of the claim; (2)

    the
indemnifying party was allowed to direct the defense or settlement of the claim;
(3) if requested, the indemnified party reasonably assisted the indemnifying
party at the indemnifying party's expense in defending or settling the
claim.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
         


      

      
        C-5