Exhibit 10.1


 


	
   

  	
  CONFIDENTIAL TREATMENT REQUESTED

  
	
   

  	
  UNDER 17 C.F.R. §§ 200.80(b)4 AND 240.24B-2

  



 


SUBCONTRACT AGREEMENT

Time and Material / Labor Hour


 


	
  SUBCONTRACTOR: Ibis
  Therapeutics, A Division

  	
   

  	
  SUBCONTRACT #:
  4400076541

  
	
  Of Isis
  Pharmaceuticals, Inc.

  	
   

  	
  DPAS RATING:

  
	
  ADDRESS:

  	
  2292 Faraday Avenue

  	
   

  	
  TYPE:  Time and Material/Labor Hour

  
	
   

  	
  Carlsbad, CA. 92008

  	
   

  	
  NOT-TO-EXCEED
  CEILING PRICE: $7,897,000*

  
	
  Attn: Mr. Steven A.
  Hofstadler

  	
   

  	
  Basic Tasks 1-10
  Not-To-Exceed  $7,767,000

  
	
  (V)
  760-603-2599  (F) 760-603-4653

  	
   

  	
  Option Tasks A-E
  Not – To-Exceed $11,730,000*

  



 


INTRODUCTION


 


This Subcontract Agreement, effective 28 August 2003 is made between SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION (hereinafter known as “Buyer”), a Delaware
corporation with principal offices in San Diego, California, and Isis Pharmaceuticals, Inc. (hereinafter
known as “Seller”), a corporation,
with principal offices in Carlsbad, CA. .
The effort to be performed by Seller under this Subcontract will be part of
Buyer’s Prime Contract #MDA972-00-C-0053
that has been issued by Defense Advanced
Research Projects Agency (DARPA). The work, defined in
Attachment I (Statement of Work and Schedule) will be performed on a Time and
Material/Labor Hour basis, in accordance with Schedule A (Specific Terms and
Conditions), and any referenced document in section 17.0 of this agreement.


 


SCHEDULE
A


SPECIFIC
TERMS AND CONDITIONS


 


1.0          PERIOD OF PERFORMANCE


 


The period of performance for this Subcontract is 28 August 2003 through 30 September 2005, unless amended in
writing by mutual agreement of the parties. Seller is not obligated to continue
work or provide services and Buyer is not obligated to compensate Seller for
expenses incurred or commitments made before or after these dates.


 


1.1          LABOR RATES


 


The following are the Seller’s fixed hourly labor rates effective for
the period of performance identified in paragraph 1.0 of this Subcontract:
Rates incorporated first of November each year via Change Order.


 


	
  LABOR FOR GFY 03

  	
   

  	
  BILLING
  RATE

  	
   

  	
  LABOR
  CATEGORY

  	
   

  	
  BILLING RATE

  
	
  Executive

  	
   

  	
  $[***] Per hour

  	
   

  	
  Scientist II

  	
   

  	
  $[***] Per hour

  
	
  Scientist I

  	
   

  	
  $[***] Per hour

  	
   

  	
  Scientist

  	
   

  	
  $[***] Per hour

  



 


	
  LABOR FOR GFY 04

  	
   

  	
  BILLING
  RATE

  	
   

  	
  LABOR
  CATEGORY

  	
   

  	
  BILLING
  RATE

  
	
  Executive

  	
   

  	
  $[***] Per hour

  	
   

  	
  Scientist II

  	
   

  	
  $[***] Per hour

  
	
  Scientist I

  	
   

  	
  $[***] Per hour

  	
   

  	
  Scientist

  	
   

  	
  $[***] Per hour

  



 


	
  LABOR FOR GFY 05

  	
   

  	
  BILLING
  RATE

  	
   

  	
  LABOR
  CATEGORY

  	
   

  	
  BILLING
  RATE

  
	
  Executive

  	
   

  	
  $[***] Per hour

  	
   

  	
  Scientist II

  	
   

  	
  $[***] Per hour

  
	
  Scientist I

  	
   

  	
  $[***] Per hour

  	
   

  	
  Scientist

  	
   

  	
  $[***] Per hour

  



 


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1.2          FUNDING


 


This Subcontract may be incrementally or fully funded. The Subcontract
Ceiling Price of $7,897,000  (*Reflects
Option A, “Sample Evaluation Funded at
$130,000) is currently funded in the amount of $[***], which is
anticipated to cover expenses through 30
September 2005. And, unless amended in writing by mutual
agreement of the parties, Seller is not obligated to incur expenses or make
commitments in excess of the Subcontract funded amount, and Buyer is not
obligated to compensate Seller beyond the funded amount of the Subcontract. If
at any time the Seller has reason to believe that the hourly rate payments and
material costs that will accrue in performing this Subcontract in the next
succeeding 30 days, if added to all other payments and cost previously accrued
will exceed eighty-five percent (85%) of the of the total funded amount of this
Subcontract, the Seller shall immediately notify the Buyer in writing providing
supporting rationale for additional funds. It is mutually agreed and understood
that the above 85% notification requirement applies to each increment of funds
provided to Seller under this Subcontract.


 


1.2.1       OPTIONAL TASKS


 


Buyer shall have the unilateral right to
exercise the Optional Tasks identified below upon written notification to
Seller’s Contractual Representative no later than thirty (30) days prior to
subcontract expiration at the mutually agreed to prices and rates set forth in
Section 1.1 of this Subcontract Agreement. 
These options shall be dependent on approval and adequate funding by the
US Government Customer.  In addition,
Equal Employment Opportunity pre-award approval by the Department of Labor must
be obtained prior to award of any options that result in the ceiling value of
this subcontract agreement exceeding $10,000,000.


 


	
  Task

  	
   

  	
  Task Title

  	
   

  	
  Task Value

  	
   

  	
  Revised
  Ceiling

  Value

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B-1

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  B-2

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  B-3

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  C-1

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  C-2

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  C-3

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  C-4

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  C-5

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  D

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  E

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  



 


1.3          INSPECTION


 


All materials furnished and services performed pursuant hereto shall be
subject to inspection and test by Buyer and its agents and by its customers at
all times and places, during the period of performance, and in any event before
acceptance. In the event that material furnished or services supplied are not
performed in accordance with the statement of work requirements, Buyer may
require Seller to replace or correct services or materials. The cost of
replacement or correction shall be determined under the Payment clause of this
subcontract, but the “hourly rate” for labor hours incurred in the replacement
or correction shall be reduced to exclude that portion of the rate attributable
to profit. If the Seller fails to proceed with reasonable promptness to perform
required replacement or


 


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correction, and if the replacement or correction cannot be performed
within the Not-To-Exceed ceiling price, the Buyer may terminate the subcontract
for default.


 


1.4          INVOICES


 


Invoices shall be prepared in duplicate and contain the following
information; subcontract number, labor categories, hourly rates, labor hours,
extended totals by category, material and other direct costs detail shall be
separated from labor costs. Invoices will be mailed to:


 


Science Applications International Corporation


Attention: John M Sterling


Street Address   10260 Campus Point Drive, Bldg. C


City, State, Zip Code     San Diego, CA. 92121


 


Invoices shall clearly reference a unique invoice number on each
invoice, period of incurred costs, and the date of the invoice. Invoices shall
include the “Amount Previously Billed,” the “Amount of this Invoice,” the
“Withhold Amount”, and the “Total Amount Billed to Date” for each labor
category. Seller shall submit invoices for the full amount stating the amount
of withhold/retention for each line item billed.


 


	
  Example:

  	
   

  	
  Line Item 1:

  	
   

  	
  $

  	
  10,000

  	
   

  
	
   

  	
   

  	
  - Less withhold:

  	
   

  	
  $

  	
  1,000

  	
   

  
	
   

  	
   

  	
  Total Amount Owed:

  	
   

  	
  $

  	
  9,000

  	
   

  



 


Invoices shall be signed and dated by the cognizant Contractual
Representative of the Seller, verifying the costs included are correct. The
following statement will be executed for all invoices whose billing rates are
based on fixed hourly rates tied to labor categories that contain minimum
education and experience qualifications for assigned personnel:


 


“I have reviewed the qualifications of the individuals whose labor
costs are being invoiced hereunder and hereby confirm that all individuals meet
the minimum labor category education and experience requirements for the
specific labor categories for which his or her work is being billed.”


 


1.5          PAYMENT


 


The Buyer shall pay the Seller upon the submission of invoices approved
by the Buyer as follows:


 


(a)   Hourly rate. The amounts shall be computed
by multiplying the appropriate hourly rates in Section 1.1 by the number of
direct labor hours performed. Invoices may be submitted once each month to the
Buyer. The Seller shall substantiate invoices by evidence of actual payment and
by individual daily job time cards, or other substantiation approved by the
Buyer. The Buyer shall pay the invoice within 30 days after approval by Buyer.
The Buyer shall withhold 5 percent of the amount due under this paragraph, not
to exceed $50,000 until execution and delivery of all closeout documentation,
acceptable to the Buyer, in accordance with the requirements of paragraph 13.0
herein.  Failure to deliver all closeout
documentation, including a final invoice showing cumulative payments made,
shall be considered to be a material breach of this subcontract, and may
subject the subcontractor to forfeiture of the 5% withhold mentioned herein.


 


(b)   Unless specifically authorized in writing by the
Buyer, the Seller is not authorized to perform and the Buyer is not obligated
to reimburse the Seller for work performed on an Overtime, Extended Work Week,
Shift Premium, or Uncompensated Time basis.


 


(c)   Materials and other direct costs.
Authorized material and other direct costs, such as travel, will be reimbursed
on an actual cost basis in accordance with Generally Accepted Accounting
Principles applied on a consistent


 


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basis. Where materials are withdrawn from inventories, cost must be
determined in accordance with proper accounting practices consistently followed
by Seller. Seller shall support all material cost claims by submitting
invoices, storeroom requisitions, expense reports, or other substantiation
acceptable to Buyer. Reasonable and allocable materials handling costs may be
included in the charge for material at cost to the extent they are clearly
excluded from hourly rates. The material handling cost shall be    15   
% of direct material and other direct costs.


 


(d)   Total cost. To the extent the Ceiling
Price of this Subcontract is fully funded, it is estimated that the total cost
to the Buyer for the performance of this subcontract shall not exceed the
ceiling price. The Seller agrees to use its best efforts to perform the work
within the ceiling price. If at any time the Seller has reason to believe that
the total price to the Buyer will be substantially greater or less than the
ceiling price, the Seller shall immediately notify the Buyer in writing and
provide a revised estimate for performing the work.


 


1.6          AUDIT


 


At any time before final payment the Buyer may request and perform an
audit of the invoices and substantiating material. Each payment previously made
shall be subject to reduction to the extent of amounts that are found by the
Buyer not to have been properly payable in accordance with the payment terms of
this subcontract. Audit will include, but not be limited to, individual daily
job time cards, invoices for material, storeroom requisitions, expense reports,
and other substantiation supporting invoiced amounts.


 


1.7          WARRANTY


 


Seller represents and warrants (1) that the rates charged for the goods
and/or services purchased pursuant hereto shall be no higher than Seller’s
current rates to any other customer for the same quality and quantity of such
goods or services; (2) that all goods and services delivered pursuant hereto
will be new, unless otherwise specified, and free from defects in material and
workmanship; (3) that all goods and services will conform to applicable
specifications, drawings, and standards of quality and performance, and that
all items will be free from defects in design and suitable for their intended
purpose; (4) that the goods covered by this order are fit and safe for consumer
use, if so intended. All representations and warranties of Seller together with
its service warranties and guarantees, if any, shall run to Buyer and Buyer’s
customers. The foregoing warranties shall survive any delivery, inspection,
acceptance, or payment by Buyer.


 


2.0          TECHNICAL AND CONTRACTUAL
REPRESENTATIVES


 


The following authorized representatives are hereby designated for this
Subcontract:


 


	
  SELLER:

  	
   

  	
   

  	
   

  	
  BUYER:

  	
   

  	
   

  
	
  TECHNICAL:

  	
   

  	
  Mr. Steven Hofstadler

  	
   

  	
  TECHNICAL:

  	
   

  	
  Mr. David W. Robbins

  
	
  CONTRACTUAL:

  	
   

  	
  Ms. Manolita Villavert

  	
   

  	
  CONTRACTUAL:

  	
   

  	
  Mr. John M. Sterling

  



 


2.1          CONTACTS


 


Contacts with Buyer that affect the subcontract prices, schedule,
statement of work, and subcontract terms and conditions shall be made with the
authorized contractual representative. No changes to this Subcontract shall be
binding upon Buyer unless incorporated in a written modification to the
Subcontract and signed by Buyer’s contractual representative.


 


2.2          CHANGES


 


Buyer may, by written notice to Seller at any time before completion of
this subcontract, make changes within the general scope of this subcontract in
any one of the following:  (a) drawings,
designs, or specifications; (b) quantity;


 


4

















 


(c) delivery; (d) method of shipment or routing; and (e) make changes
in the amount of Buyer furnished property. If any such change causes a material
increase or decrease in any hourly rate or the not-to-exceed ceiling price, or
the time required for the performance of any part of the work under this
subcontract, the Buyer shall make an equitable adjustment in the hourly rates
or delivery schedule, or both, and shall modify the subcontract not-to-exceed
ceiling price. As a condition precedent to any equitable adjustment, the Seller
must notify Buyer in writing of any request for adjustment within twenty (20)
days from the date Seller receives notice from Buyer of a change, or from the
date of any act of Buyer, which Seller considers to constitute a change. Failure
to agree to any adjustment shall be a dispute under the Disputes clause of this
subcontract. However, Seller shall proceed with the work as changed without
interruption and without awaiting settlement of any such claim.


 


3.0          DISCLOSURE


 


Parties not disclose information concerning work under this Subcontract
to any third party, unless such disclosure is necessary for the performance of
the subcontract effort. No news releases, public announcement, denial or
confirmation of any part of the subject matter of this Subcontract or any phase
of any program hereunder shall be made without prior written consent of
Parties, which consent will not be unreasonably withheld. The restrictions of
this paragraph shall continue in effect upon completion or the parties may
mutually agree upon termination of this Subcontract for such period of time as
in writing. In the absence of a written established period, no disclosure is
authorized. Failure to comply with the provisions of this Clause may be cause
for termination of this subcontract. The obligations of Paragraph 3.0 will not
apply to information that the receiving party can establish by written records
was disclosed by the receiving party pursuant to any judicial, government or
stock exchange request, requirement or order, so long as the receiving party
provides the disclosing party with sufficient prior written notice in order to
allow the disclosing party to contest such request, requirement or order.


 


4.0          KEY  PERSONNEL


 


(a)   For purposes of this clause, Buyer and Seller define
“Key Personnel” as those individuals who are mutually recognized as essential
to the successful completion and execution of this Subcontract.


 


(b)   Personnel designated as “Key Personnel” shall be
assigned to the extent necessary for the timely completion of the task to which
assigned. Any substitution or reassignment involving Seller’s “Key Personnel”
assigned to this work shall be made only with persons of equal abilities and
qualifications and is subject to prior approval of Buyer, in writing.


 


(c)   Buyer reserves the right to direct the removal of
any individual assigned to this Subcontract.


 


(d)   Seller’s Key Personnel are:  [***]


 


4.1          IP
RIGHTS


 


Subject to the rights reserved to the U.S.
Government under the referenced FAR’s, Isis will retain all rights, including
commercial rights, to any technology, software and inventions created by Isis
during the performance of this Subcontract Agreement (“ISIS Technology”).
Inventorship of any invention created hereunder will be determined in
accordance with U.S. Patent Law, including joint inventorship, if any, between
SAIC and Isis. The ISIS Technology disclosed to SAIC hereunder is disclosed
solely for use in performance of SAIC’s obligations to the U.S. Government
under Prime Contract MDA972-00-C-0053. Any other use of Isis Technology by
SAIC, including the pursuit of commercial opportunities, will be subject to
separate agreements.


 


5.0          ASSIGNMENTS AND SUBCONTRACTS


 


This Subcontract is not assignable and shall not be assigned by Seller
without the prior written consent of Buyer. Further, Seller agrees to obtain
Buyer’s approval before subcontracting this order or any substantial portion
thereof; provided, however, that this limitation shall not apply to the
purchase of standard commercial supplies or raw materials.


 


5

















 


6.0          INSURANCE


 


Without prejudice to Seller’s liability to indemnify Buyer as stated in
the INDEMNIFICATION provision of this Agreement, Seller shall procure, at its
expense, and maintain for the duration of the Agreement, the insurance policies
described below with financially responsible insurance companies, reasonably
acceptable to Buyer, with policy limits not less than those indicated below.
Notwithstanding any provision contained herein, the Seller, and its employees,
agents, representatives, consultants and lower-tier subcontractors and
suppliers, are not insured by Buyer, and are not covered under any policy of
insurance that Buyer has obtained or has in place.


 


Special Provisions
Applicable to Seller’s Insurance coverage:


 


1.     Additional Insured - Seller shall have all
policies, except Workers’ Compensation and Employer’s Liability, endorsed to
name Buyer as an Additional Insured with respect to the work to be performed by
the Seller.


 


2.     Waiver of Subrogation - Seller shall have
all policies endorsed to waive the insurer’s rights of subrogation in favor of
Buyer except for Workers Compensation.


 


3.     Deductibles - Subject to the reasonable
review and approval of Buyer, the Seller may arrange deductibles or
self-insured retention’s as part of the required insurance coverage’s. However,
it is expressly agreed that all deductibles or self-insured retention’s are the
sole responsibility of the Seller.


 


4.     Adequacy of Insurance Limits - The insurance
coverage limits stated below are minimum coverage requirements, not limits of
liability, and shall not be construed in any way as Buyer’s acceptance of
responsibility of the Seller.


 


5.     Certificates of Insurance - Prior to
commencement of any work under this Agreement, the Seller shall furnish Buyer
with Certificates of Insurance covering the current period of performance of
this Subcontract, in a format acceptable to Buyer, evidencing the insurance
coverage required in this Agreement and containing the following information:


 


a.     Identify Buyer as an “Additional Insured” with
respect to all policies except Workers’ Compensation and employers’ liability.


 


b.     State that all policies have been endorsed to waive
subrogation in favor of Buyer except for Workers’ Compensation.


 


c.     State that the underwriters agree to provide Buyer
with at least 30 days prior written notice of any cancellation in the coverage.


 


In addition, the Seller shall furnish the Buyer revised Certificates of
Insurance covering any and all subsequent extensions to the initial period of
performance of this Subcontract.


 


6.1          COVERAGE


 


A.    Workers’ Compensation - Insurance for
statutory obligations imposed by law including, where applicable, coverage
under United States Longshoremen’s and Harbor Workers’ Act and Jones Act. (if
applicable, Defense Base Act for those employees working on a U.S. Military
installation outside of the United States).


 


B.    Employers Liability - Insurance with limits
of $1,000,000 for bodily injury by accident and $1,000,000 for bodily injury by
disease, including, if applicable, maritime coverage endorsement.


 


C.    Commercial General Liability - (Standard ISO
occurrence form) - including full fire legal liability and contractual
liability, with a per occurrence limit of $1,000,000.


 


D.    Business Auto Liability - Coverage for bodily
injury and property damage liability for all owned, hired or non-owned
vehicles, with an each accident limit of $1,000,000.


 


6

















 


The following clauses
are applicable to this Agreement if checked:


 


      E.       Professional Liability
- $1,000,000 per occurrence and aggregate providing coverage for claims arising
out of the performance of professional services, resulting from any error,
omission or negligent act of the Seller.


 


7.0          INDEMNIFICATION


 


(a)   Seller shall indemnify, defend and hold SAIC and
SAIC’s customers harmless from and against any and all damages, losses,
liabilities and expenses (including reasonable attorneys’ fees) arising out of
or relating to any claims, causes of action, lawsuits or other proceedings,
regardless of legal theory, that result, in whole or in part, from Seller’s (or
any of Seller’s subcontractors, suppliers, employees, agents or
representatives): (i) intentional misconduct, negligence, or fraud, (ii) breach
of any representation, warranty or covenant made herein, or (iii) products or
services including, without limitation, any claims that such products or
services infringe any United States patent, copyright, trademark, trade secret
or any other proprietary right of any third party.


 


(b)   Buyer shall promptly notify Seller of any claim
against Buyer that is covered by this indemnification provision and shall
authorize representatives of Seller to settle or defend any such claim or suit
and to represent Buyer in, or to take charge of, any litigation in connection
therewith.


 


8.0          INFRINGEMENT INDEMNITY


 


(a)   In lieu of any warranty by Buyer or Seller against
infringement, statutory or otherwise, it is agreed that Seller shall defend, at
its expense, any suit against Buyer or its customers based on a claim that any
item furnished under this order or the normal use or sale thereof infringes any
U.S. Letters patent or copyright, and shall pay costs and damages finally awarded
in any such suit, provided that Seller is notified in writing of the suit and
given authority, information, and assistance at Seller’s expense for the
defense of same. If the use or sale of said item is enjoined as a result of
such suit, Seller, at no expense to Buyer, shall use commercially reasonable
efforts to obtain for Buyer and its customers the right to use and sell said
item or shall substitute an equivalent item acceptable to Buyer and extend this
patent indemnity thereto.


 


(b)   Notwithstanding the foregoing paragraph, when this
order is performed under the Authorization and Consent of the U.S. Government
to infringe U.S. Patents, Seller’s liability for infringement of such Patents
in such performance shall be limited to the extent of the obligation of Buyer
to indemnify the U.S. Government.


 


9.0          CONFIDENTIALITY
OF EQUIPMENT AND DATA


 


Seller agrees that it will keep confidential the features of any
equipment, tools, gauges, patterns, designs, drawings, engineering data or
other technical or proprietary information furnished by Buyer and use such
items only in the performance of this Order or other orders from Buyer and not
otherwise, unless Buyer’s written consent is first obtained. Seller also agrees
to use any designs or data in accordance with any restrictive legends placed on
such items by the Buyer or any third party. Upon completion or termination of
this Order, Seller shall return all such items to Buyer or make such other
disposition thereof as may be directed or approved by Buyer.


 


10.0        DISPUTES


 


Any dispute not disposed of in accordance with the “Disputes Clause” of
Schedule B, if any, shall be determined in the following manner.


 


(a)   Buyer and Seller agree to enter into Negotiation to
resolve any dispute. Both parties agree to negotiate in good faith to reach a
mutually agreeable settlement within a reasonable amount of time.


 


(b)   If negotiation is unsuccessful, Buyer and Seller
agree to enter into binding Arbitration. The American Arbitration Association
(AAA) Commercial Arbitration Rules (most recent edition) are to govern this
Arbitration.


 


7

















 


The Arbitration shall take place in the County of San Diego, State of
California. The Arbitrator shall be bound to follow the applicable subcontract
provisions and California law in adjudicating the dispute. It is agreed by both
parties that the Arbitrator’s decision is final, and that no party may take any
action, judicial or administrative, to overturn this decision. The judgment
rendered by the Arbitrator may be entered in any court having jurisdiction
thereof.


 


Pending any decision, appeal or judgment referred to in this provision
or the settlement of any dispute arising under this Subcontract, Seller shall
proceed diligently with the performance of this Subcontract.


 


11.0        DEFAULT


 


(a)   The Buyer may, by written notice of default to the
Seller, terminate the whole or any part of this Subcontract in any one of the
following circumstances:  (i) if Seller fails to make progress in the work
so as to endanger performance delivery of the supplies or to perform the
services within the time specified herein or any extension thereof; or (ii) if
Seller fails to perform any of the other provisions of this Subcontract in
accordance with its terms, and in either of these two circumstances does not
cure such failure within a period of 10 days (or such longer period as Buyer
may authorize in writing) after receipt of notice from the Buyer specifying
such failure; or (iii) Seller becomes insolvent or the subject of proceedings
under any law relating to bankruptcy or the relief of debtors or admits in
writing its inability to pay its debts as they become due.


 


(b)   If this Subcontract is so terminated, Seller shall
submit a final termination settlement proposal to the Buyer. The Seller shall
submit the proposal promptly but no later than six (6) months from the
effective date of the termination. If Seller fails to submit the proposal
within the time allowed, the Buyer may determine the amount, if any, due the
Seller because of the termination. The amount will be determined as
follows;  (i) An amount for direct labor
hours determined by multiplying the number of direct labor hours expended
before the effective date of termination by the hourly rates, less profit, in
the Schedule, less any hourly rate payments already made to the Seller; (ii) An
amount for material expenses incurred before the effective date of termination,
not previously paid to the Seller. Buyer may procure or otherwise obtain, upon
such terms and in such manner as Buyer may deem appropriate, supplies or
services similar to those terminated, Seller, subject to the exceptions set
forth below, shall be liable to Buyer for any excess costs of such similar
supplies or services.


 


(c)   Seller shall transfer title and deliver to Buyer, in
the manner and to the extent requested in writing by Buyer at or after
termination such complete articles, partially completed articles and materials,
parts, tools, dies, patterns, jigs, fixtures, plans, drawings, information and
contract rights as Seller has produced or acquired for the performance of the
terminated part of this Subcontract, and Buyer will pay Seller the contract
price for complete articles delivered to and accepted by Buyer and the fair
value of the other property of Seller so requested and delivered.


 


(d)   Seller shall continue performance of this
Subcontract to the extent not terminated. Buyer shall have no obligations to
Seller with respect to the terminated part of this Subcontract except as herein
provided. In case of Seller’s default, Buyer’s rights as set forth herein shall
be in addition to Buyer’s other rights although not set forth in this
Subcontract.


 


(e)   Seller shall not be liable for damages resulting
from default due to causes beyond the Seller’s control and without Seller’s
fault or negligence, provided, however, that if Seller’s default is caused by
the default of a subcontractor or supplier, such default must arise out of
causes beyond the control of both Seller and subcontractor or supplier, and without
the fault or negligence of either of them and, provided further, the supplies
or services to be furnished by the subcontractor or supplier were not
obtainable from other sources.


 


12.0        SUBCONTRACT
CLOSEOUT


 


Within sixty-calendar days after the end of the period of performance
for the services to be procured herein, as described in the Attachment I
Statement of Work and the satisfactory performance of which shall be solely
determined by Buyer, Buyer will issue to Seller a Subcontract Closeout Package.
The Package will include, as


 


8

















 


applicable, Subcontractor Release of Claims; Subcontractor’s Assignment
of Refunds, Rebates, Credits, and Other Amounts; Subcontract Patents Report;
and any other documentation or request for information considered necessary by
Buyer to closeout this Subcontract Agreement.


 


Seller agrees to submit all information and documentation, including a
FINAL invoice bearing the statement, “This FINAL invoice was prepared using final audited
rates” as required by the Subcontract Closeout Package within
thirty-calendar days of the date of the Package. The parties further agree if
the information and documentation submitted by Buyer, finds Seller acceptable
with or without negotiations (the necessity for which shall be solely
determined by Buyer), to be bound by Seller’s closeout submission as the final
agreement between the parties with respect thereto.


 


In the event Seller fails to submit the required closeout information
and documentation in a timely manner, such failure shall constitute Seller’s
express agreement that the amounts paid to date by Buyer pursuant to this
Agreement, as determined by Buyer’s records, constitute the full, complete and
final extent of Buyer’s financial obligation to Seller, that Seller does
forever fully and finally remise, release, and discharge Buyer, its officers,
agents and employees, of and from any and all liabilities, obligations, claims,
and demands whatsoever arising under or relating to this Subcontract Agreement,
and that Seller expressly authorizes Buyer to rely on the foregoing
representations and release in connection with Buyer’s closeout of or other
actions taken with respect to Buyer’s contract with the Government.  Furthermore, such failure is considered to
be a material breach of the terms of this subcontract, and may subject seller
to forfeiture of all or part of the fee withhold prescribed by Article 1.4.


 


13.0        GENERAL
RELATIONSHIP


 


The Subcontractor is not an employee of SAIC for any purpose whatsoever.
Seller agrees that in all matters relating to this Subcontract it shall be
acting as an independent contractor and shall assume and pay all liabilities
and perform all obligations imposed with respect to the performance of this
Subcontract. Seller shall have no right, power or authority to create any
obligation, expressed or implied, on behalf of Buyer and/or the Government and
shall have no authority to represent Buyer as an agent.


 


14.0        NON-WAIVER OF RIGHTS


 


The failure of Buyer to insist
upon strict performance of any of the terms and conditions in the Subcontract,
or to exercise any rights or remedies, shall not be construed as a waiver of
its rights to assert any of the same or to rely on any such terms or conditions
at any time thereafter. The invalidity in whole or in part of any term or
condition of this subcontract shall not affect the validity of other parts
hereof.


 


15.0        APPLICABLE
STATE LAW AND COMPLIANCE


 


This Subcontract shall be governed by and construed in accordance with
the laws of the State of California. Seller agrees to comply with the
applicable provisions of any federal, state or local law or ordinance and all
orders, rules and regulations issued there under.


 


16.0        EXPORT
CONTROL COMPLIANCE FOR FOREIGN PERSONS


 


The subject technology of this Subcontract
(together including data, services, and hardware provided hereunder) may be
controlled for export purposes under the International Traffic in Arms
Regulations (ITAR) controlled by the U.S. Department of State or the Export Administration
Regulations (“EAR”) controlled by the U.S. Department of Commerce. ITAR
controlled technology may not be exported without prior written authorization
and certain EAR technology requires a prior license depending upon its
categorization, destination, end-user and end-use. Exports or re-exports of any
U.S. technology to [any destination under U.S. sanction or embargo are
forbidden.


 


Access to certain technology (“Controlled
Technology”) by Foreign Persons (working legally in the U.S.), as defined below,
may require an export license if the Controlled Technology would require a
license prior to delivery to the Foreign Person’s country of origin. SELLER is
bound by U.S. export statutes and regulations and shall comply with all U.S.
export laws. SELLER shall have full responsibility for obtaining any export
licenses or authorization required to fulfill its obligations under this
Subcontract.


 


9

















 


SELLER hereby certifies that all SELLER
employees who have access to the Controlled Technology are U.S. citizens, have
permanent U.S. residency or have been granted political asylum or refugee
status in accordance with 8 U.S.C. 1324b(a)(3). Any non-citizens who do not
meet one of these criteria are “Foreign Persons” within the meaning of this
clause but have been authorized under export licenses to perform their work
hereunder.


 


17.0        ORDER
OF PRECEDENCE


 


The documents listed below are hereby incorporated by reference. In the
event of an inconsistency or conflict between or among the provisions of this
Subcontract, the inconsistency shall be resolved by giving precedence in the
following order:


 


1.     Attachment I:  Statement of Work and Schedule
dated 07/16/03 (9 Pages).


 


2.     Schedule A:  Specific Terms and Conditions
Form 9-932-025 (Rev.09/19/03).


 


3.     Schedule B Part I: U.S. Government Terms and
Conditions Form 9-932-031 (Rev. 7/00).


 


4.     Schedule B Part II: Contract Clauses (specific for
the U.S. Government Agency) (Rev.11/00)


 


5.     U.S. Government Property Enclosure 6, “Without an
Approved Gov’t Property System”. (08/01)


 


18.0        ENTIRE
AGREEMENT


 


The parties hereby agree that this Subcontract, including all documents
incorporated herein by reference, shall constitute the entire agreement and
understanding between the parties hereto and shall supersede and replace any
and all prior or contemporaneous representations, agreements or understandings
of any kind, whether written or oral, relating to the subject matter hereof.


 


In witness whereof, the duly authorized representatives of Buyer and
the Seller have executed this Subcontract on the dates shown.


 


	
  SELLER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SCIENCE APPLICATIONS INTERNATIONAL
  CORPORATION

  
	
  Isis Pharmaceuticals, Inc.

  	
   

  	
   

  
	
  (Company
  Name)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  X  /s/ B. Lynne Psrshall

  	
   

  	
  X /s/ John Sterling

  	
   

  
	
  (Signature)

  	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NAME:

  	
   

  	
  NAME:

  	
   

  
	
  (Type or Print)

  	
   

  	
  (Type or Print)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TITLE:

  	
   

  	
  TITLE:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DATE:

  	
   

  	
  DATE:

  	
   

  



 


10

















 


Attachment
I


Statement
of Work


 


[***]


 


11

















 


SCHEDULE
B

U.S. GOVERNMENT TERMS AND CONDITIONS


Applicable to all U.S. Government
subcontracts


MDA972-00-C-0053 – T&M SubK


PART
I - FAR CLAUSES


 


1.     DEFINITIONS


 


In all such clauses, unless the context of the clause requires
otherwise, the term “Contractor” shall mean Seller, the term “Contract” shall
mean this Order, and the terms “Government,” “Contracting Officer” and
equivalent phrases shall mean Buyer and Buyer’s Purchasing
Representative(except with respect to FAR 52.227.12, in which the term “Government”
will retain its meaning as seth forth in the FAR), respectively. It is intended
that the referenced clauses shall apply to Seller in such manner as is
necessary to reflect the position of Seller as a subcontractor to Buyer, to
insure Seller’s obligations to Buyer and to the United States Government, and
to enable Buyer to meet its obligations under its Prime Contract or
Subcontract.


The following definitions apply unless otherwise specifically stated:


 


“Buyer” - the legal entity issuing this Order.


“Purchasing Representative” - Buyer’s authorized representative.


“Seller” - the legal entity which contracts with the Buyer.


“This Order” - this contractual instrument, including changes.


“Prime Contract” - the Government contract under which this Order is issued.


“FAR” - the Federal Acquisition Regulation.


 


2.     IDENTIFICATION OF CONTRACT NUMBERS


 


Government contract numbers shown on this Order shall be included in
subcontracts and purchase orders issued by Seller hereunder.


 


3.     DISPUTES


 


(a)   Notwithstanding any provisions herein to the
contrary:


 


(1)   If a decision relating to the Prime Contract is made
by the Contracting Officer and such decision is also related to this Order,
said decision, if binding upon Buyer under the Prime Contract shall in turn be
binding upon Buyer and Seller with respect to such matter; provided, however,
that if Seller disagrees with any such decision made by the Contracting Officer
and Buyer elects not to appeal such decision, Seller shall have the right
reserved to Buyer under the Prime Contract with the Government to prosecute a
timely appeal in the name of Buyer, as permitted by the contract or by law,
Seller to bear its own legal and other costs. 
If Buyer elects not to appeal any such decision, Buyer agrees to notify
Seller in a timely fashion after receipt of such decision and to assist Seller
in its prosecution of any such appeal in every reasonable manner.  If Buyer elects to appeal any such decision
of the Contracting Officer, Buyer agrees to furnish Seller promptly with a copy
of such appeal.  Any decision upon
appeal, if binding upon Buyer, shall in turn be binding upon Seller.  Pending the making of any decision, either
by the Contracting Officer or on appeal, Seller shall proceed diligently with
performance of this Order.


 


(2)   If, as a result of any decision or judgment which is
binding upon Seller and Buyer, as provided above, Buyer is unable to obtain
payment or reimbursement from the Government under the Prime Contract for, or
is required to refund or credit to the Government, any amount with respect to
any item or matter for which Buyer has reimbursed or paid Seller, Seller shall,
on demand, promptly repay such amount to Buyer. Additionally, pending the final
conclusion of any appeal hereunder, Seller shall, on demand, promptly repay any
such amount to Buyer.  Buyer’s maximum
liability for any matter connected with or related to this Order which was
properly the subject of a claim against the Government under the Prime Contract
shall not exceed the amount of Buyer’s recovery from the Government.


 


1

















 


(3)   If this Order is issued by Buyer under a Government
Subcontract rather than a Prime Contract, and if Buyer has the right under such
Subcontract to appeal a decision made by the Contracting Officer under the
Prime Contract in the name of the Prime Contractor (or if Buyer is subject to
any arbitrator’s decision under the terms of its subcontract), and said
decision is also related to this Order, this Disputes Clause shall also apply
to Seller in a manner consistent with its intent and similar to its application
had this Order been issued by Buyer under a Prime Contract with the Government.


 


(4)   Seller agrees to provide certification that data
supporting any claim made by Seller hereunder is made in good faith and that
the supporting data is accurate and complete to the best of Seller’s knowledge
or belief, all in accordance with the requirements of the Contract Disputes Act
of 1978 (41USC601-613) and implementing regulations. If any claim of Seller is
determined to be based upon fraud or misrepresentation, Seller agrees to
defend, indemnify and hold Buyer harmless for any and all liability, loss, cost
or expense resulting therefrom.


 


(b)  Any dispute not addressed
in paragraph (a) above, will be subject to the disputes clause of Schedule A of
this subcontract agreement.


 


4.     OTHER GOVERNMENT PROCUREMENT


 


Nothing contained herein shall be construed as precluding the Seller
from producing items for direct sale to the Government, utilizing therefore all
hardware and/or software, including designs, drawings, engineering data or
other technical or proprietary information furnished Seller by Buyer, provided
the Government has the unrestricted right to permit the use thereof for such purpose.


 


5.     INDEMNIFICATION - COST OR PRICING DATA - COST
ACCOUNTING STANDARDS


 


Seller agrees to indemnify and hold Buyer harmless to the full extent
of any cost or price reduction effected by Buyer’s customer, which may result
from (i) certified cost or pricing data submitted by Seller or its lower-tier
subcontractors which is not accurate, current or complete as certified by
Seller; (ii) the failure by Seller or its lower-tier subcontractors to disclose
and consistently follow applicable cost accounting practices and standards or
otherwise comply with pertinent parts of the FAR, applicable agency supplements
thereto, and regulations promulgated by the Cost Accounting Standards Board.


 


6.     TERMINATION FOR CONVENIENCE


 


The Buyer may terminate performance of work under this subcontract in
whole, or in part if the Purchasing Representative determines that a
termination is in the Buyer’s interest. 
The Buyer shall terminate by delivering to the Seller a Notice of
Termination specifying the extent of termination and the effective date.  If this is a Fixed Price subcontract, the
termination will be in accordance with FAR 52.249-2 and FAR 52.249-4.  If this is a Cost Reimbursable subcontract,
the termination will be in accordance with FAR 52.249-6.  If this is  
a Cost Reimbursement subcontract for Educational or Other Nonprofit
Institutions, then termination will be in accordance with FAR 52.249-5.


 


7.     GOVERNMENT PROPERTY


 


Seller shall comply with the Government Property requirements contained
in FAR clause 52.245-2 if this is a fixed priced contract and FAR clause
52.245-5 (substituting 52.245-2 subparagraph (g) for 52.245-5 subparagraphs (g)
(1), (2), and (3) if this is a cost reimbursement contract.


 


8.     CONTRACT COST PRINCIPLES AND PROCEDURES


 


Seller agrees that to the extent applicable, costs allocated to this
contract shall be in full compliance with Subpart 31.2 of FAR (Subpart 31.3 for
Educational Institutions) and the applicable agency supplements thereto, if
any, set forth in Part II hereof. In the event such compliance is not
maintained, Seller agrees to compensate Buyer to the full extent of any prices
or costs, including any penalties or interest, which are determined by Buyer’s
customer to be unallowable or unreasonable or not allocable, under Buyer’s
contract with its customer.


 


2

















 


9.     FAR CLAUSES APPLICABLE TO THIS ORDER


 


The clauses in FAR Subpart 52.2 referenced in subparagraph (a), the
clauses applicable at the dollar thresholds in subparagraph (b), and those
clauses referenced and checked in subparagraph (c) below, in effect on the date
of this Order, are incorporated herein and made a part of this Order. To the
extent that an earlier version of any such clause is included in the Prime
Contract or Subcontract under which this Order is issued, the date of the
clause as it appears in such Prime Contract or Subcontract shall be controlling
and said version shall be incorporated herein.


 


(a)  The following clauses are
applicable to this Order:


 


	
  Clause No. &

  FAR Reference

  	
   

  	
  Title of
  Clause

  
	
   

  	
   

  	
   

  
	
  52.203-3

  	
   

  	
  Gratuities

  
	
  52.211-5

  	
   

  	
  Material Requirements

  
	
  52.211-15

  	
   

  	
  Defense Priority and Allocation Requirements

  
	
  52.222-1

  	
   

  	
  Notice to the Government of Labor Disputes

  
	
  52.222-26

  	
   

  	
  Equal Opportunity (Only Paragraphs (b)(1) through (b)(11)

  
	
  52.223-3

  	
   

  	
  Hazardous Material Identification and Material Safety Data

  
	
  52.225-13

  	
   

  	
  Restrictions on Certain Foreign Purchases

  
	
  52.229-3

  	
   

  	
  Federal, State, and Local Taxes

  



 


(b)  The following clauses are
applicable to this Order at the indicated dollar values:


 


	
  Clause No. &

  FAR Reference

  	
   

  	
  Title of
  Clause

  
	
   

  	
   

  	
   

  
	
  52.203-5

  	
   

  	
  Covenant Against Contingent Fees (if order exceeds $50,000)

  
	
  52.203-6

  	
   

  	
  Restrictions on Subcontractor Sales to the Government (if order
  exceeds $100,000)

  
	
  52.203-7

  	
   

  	
  Anti-Kickback Procedures (if order exceeds $100,000)

  
	
  52.203-8

  	
   

  	
  Cancellation, Rescission, and Recovery of Funds for Illegal or
  Improper Activity

  
	
  52.203-10

  	
   

  	
  Price or Fee Adjustment for Illegal or Improper Activity (If order
  exceeds $50,000)

  
	
  52.203-11

  	
   

  	
  Certification and Disclosure Regarding Payments to Influence Certain
  Federal Transactions (if order exceeds or is expected to exceed $100,000)

  
	
  52.203-12

  	
   

  	
  Limitation on Payments to Influence Certain Federal Transactions (if
  order exceeds or is expected to exceed $100,000)

  
	
  52.209-6

  	
   

  	
  Protecting the Governments Interest when Subcontracting with
  Contractors Debarred, Suspended, or Proposed for Debarment (if Order exceeds
  $25,000)

  
	
  52.215-2

  	
   

  	
  Audit and Records-Negotiation (if Order exceeds $50,000)

  
	
  52.219-8

  	
   

  	
  Utilization of Small Business Concerns (if Order exceeds $50,000)

  
	
  52-219-9

  	
   

  	
  Small Business Subcontracting Plan 
  (if Subcontract exceeds or is expected to exceed $500,000)

  
	
  52.222-4

  	
   

  	
  Contract Work Hours & Safety Standards Act - Overtime
  Compensation (if Order exceeds $100,000)

  
	
  52.222-35

  	
   

  	
  Affirmative Action for Disabled Veterans and Veterans of the Vietnam
  Era (if Order exceeds $10,000)

  
	
  52.222-36

  	
   

  	
  Affirmative Action for Workers with Disabilities (if Order exceeds
  $2,500)

  
	
  52.222-37

  	
   

  	
  Employment Reports on Special Disabled Veterans and Veterans of the
  Vietnam Era (if Order exceeds $10,000)

  
	
  52.227-2

  	
   

  	
  Notice and Assistance Regarding Patent and Copyright Infringement (if
  Order exceeds $50,000)

  
	
  52.246-16

  	
   

  	
  Responsibility for Supplies (if order exceeds $50,000)

  
	
  52.247-63

  	
   

  	
  Preference for U.S. Flag Air Carriers (if order exceeds $50,000)

  



 


3

















 


(c)  The following clauses are
applicable to this Order if checked:


 


	
  Clause No. &

  FAR Reference

  	
   

  	
  Title of
  Clause

  
	
   

  	
   

  	
   

  
	
  o 52.203-10

  	
   

  	
  Price or Fee Adjustment for Illegal or Improper Activity  (If Order exceeds $50,000)

  
	
  ý 52.204-2

  	
   

  	
  Security Requirements

  
	
  o 52.204-4

  	
   

  	
  Printing/Copying Double Sided on Recycled Paper

  
	
  o 52.207-3

  	
   

  	
  Right of First Refusal of Employment Openings

  
	
  o 52.214-26

  	
   

  	
  Audit and Records-Sealed Bidding

  
	
  o 52.214-27

  	
   

  	
  Price Reduction for Defective Cost or Pricing Data Modifications -
  Sealed Bidding

  
	
  o 52.214-28

  	
   

  	
  Subcontractor Cost or Pricing Data - Modifications - Sealed Bidding

  
	
  ý 52.215-10

  	
   

  	
  Price Reduction for Defective Cost or Pricing Data

  
	
  o 52.215-11

  	
   

  	
  Price Reduction for Defective Cost or Pricing Data -Modifications

  
	
  ý 52.215-12

  	
   

  	
  Subcontractor Cost or Pricing Data

  
	
  ý 52.215-13

  	
   

  	
  Subcontractor Cost or Pricing Data - Modifications

  
	
  ý 52.215-15

  	
   

  	
  Pension Adjustments and Asset Reversions

  
	
  o 52.215-16

  	
   

  	
  Facilities Capital Cost of Money

  
	
  ý 52.215-18

  	
   

  	
  Reversion or Adjustment of Plans for Post-Retirement Benefits Other
  Than Pensions

  
	
  o 52.215-19

  	
   

  	
  Notification of Ownership Changes

  
	
  o 52.215-20

  	
   

  	
  Requirements for Cost or Pricing Data or Information Other Than Cost
  or Pricing Data

  
	
  ý 52.215-21

  	
   

  	
  Requirements for Cost or Pricing Data or Information Other Than Cost
  or Pricing Data - Modifications

  
	
  ý 52.216-7

  	
   

  	
  Allowable Cost and Payment

  
	
  o 52.216-8

  	
   

  	
  Fixed Fee

  
	
  o 52.216-18

  	
   

  	
  Ordering

  
	
  o 52.216-22

  	
   

  	
  Indefinite Quantity

  
	
  o 52.217-8

  	
   

  	
  Option to Extend Services

  
	
  o 52.217-9

  	
   

  	
  Option to Extend the Term of the Contract

  
	
   

  	
   

  	
  (a) within the current contract year (b) not to exceed 60 months or 5
  years

  
	
  o 52.219-16

  	
   

  	
  Liquidated Damages – Subcontracting Plan

  
	
  o 52.222-2

  	
   

  	
  Payment for Overtime Premiums -Subparagraph (a) Add “0”

  
	
  ý 52.222-3

  	
   

  	
  Convict Labor

  
	
  o 52.222-6

  	
   

  	
  Davis-Bacon Act (if order is for construction exceeding $2,000)

  
	
  o 52.222-11

  	
   

  	
  Subcontracts (Labor Standards)

  
	
  o 52.222-20

  	
   

  	
  Walsh-Healy Public Contracts Act (if Order exceeds $10,000)

  
	
  ý 52.222-21

  	
   

  	
  Prohibition of Segregated Facilities

  
	
  o 52.222-29

  	
   

  	
  Notification of Visa Denial

  
	
  o 52-222-41

  	
   

  	
  Service Contract Act of 1965, as Amended - (If Order exceeds $2,500)

  
	
  o 52.222-42

  	
   

  	
  Statement of Equivalent Rates by Federal Hires

  
	
  o 52.222-43

  	
   

  	
  Fair Labor Standards Act and Service Contract Act - Price Adjustment
  (Multiple Year and Option Contracts)

  
	
  o 52.222-46

  	
   

  	
  Evaluation of Compensation for Professional Employees

  
	
  o 52.223-5

  	
   

  	
  Pollution Prevention and Right-to-Know Information

  
	
  ý 52.223-6

  	
   

  	
  Drug-Free Workplace

  
	
  o 52.223-7

  	
   

  	
  Notice of Radioactive Materials

  
	
  ý 52.223-14

  	
   

  	
  Toxic Chemical Release Reporting

  
	
  o 52.224-2

  	
   

  	
  Privacy Act

  
	
  o 52.225-1

  	
   

  	
  Buy American Act -Balance of Payments Program - Supplies

  
	
  o 52.225-5

  	
   

  	
  Trade Agreements

  
	
  o 52.225-8

  	
   

  	
  Duty-Free Entry

  
	
  ý 52.226-1

  	
   

  	
  Utilization of Indian Organizations and Indian -Owned Economic
  Enterprises

  
	
  o 52.227-1

  	
   

  	
  Authorization and Consent (if order exceeds $50,000)

  
	
  ý 52.227-1

  	
   

  	
  Authorization and Consent -Alternate I

  
	
  o 52.227-3

  	
   

  	
  Patent Indemnity (if order exceeds $50,000)

  
	
  o 52.227-9

  	
   

  	
  Refund of Royalties

  
	
  ý 52.227-10

  	
   

  	
  Filing of Patent Applications - Classified Subject Matter

  
	
  o 52.227-11

  	
   

  	
  Patent Rights - Retention by the Contractor (Short Form)

  



 


4

















 


	
  ý 52.227-12

  	
   

  	
  Patent Rights - Retention by the Contractor (Long Form)

  
	
  o 52.227-13

  	
   

  	
  Patent Rights - Acquisition by the Government

  
	
  o 52.227-14

  	
   

  	
  Rights in Data - General (Alternate I, II, III, IV, or V)

  
	
  o 52.227-16

  	
   

  	
  Additional Data Requirements

  
	
  o 52.227-17

  	
   

  	
  Rights in Data - Special Works

  
	
  o 52.227-18

  	
   

  	
  Rights in Data - Existing Works

  
	
  o 52.227-19

  	
   

  	
  Commercial Computer Software - Restricted Rights

  
	
  o 52.227-20

  	
   

  	
  Rights in Data SBIR Program

  
	
  o 52.227-21

  	
   

  	
  Technical Data, Certification, Revision and Withholding of Payment -
  Major Systems

  
	
  o 52.227-22

  	
   

  	
  Major System - Minimum Rights

  
	
  o 52.227-23

  	
   

  	
  Rights to Proposal Data (Technical)

  
	
  o 52.228-3

  	
   

  	
  Worker’s Compensation Insurance (Defense Base Act)

  
	
  o 52.228-4

  	
   

  	
  Worker’s Compensation and War-Hazard Insurance Overseas

  
	
  o 52.228-5

  	
   

  	
  Insurance - Work on a Government Installation

  
	
  ý 52.228-7

  	
   

  	
  Insurance - Liability to Third Persons

  
	
  o 52.229-6

  	
   

  	
  Taxes - Foreign Fixed-Price Contracts

  
	
  o 52.229-7

  	
   

  	
  Taxes - Fixed-Price Contracts with Foreign Governments

  
	
  o 52.229-8

  	
   

  	
  Taxes - Foreign Cost-Reimbursement Contracts

  
	
  o 52.229-9

  	
   

  	
  Taxes - Cost-Reimbursement Contracts with Foreign Governments

  
	
  o 52.229-10

  	
   

  	
  State of New Mexico Gross Receipts and Compensating Tax

  
	
  o 52.230-2

  	
   

  	
  Cost Accounting Standards

  
	
  o 52.230-3

  	
   

  	
  Disclosure and Consistency of Cost Accounting Practices

  
	
  o 52.230-5

  	
   

  	
  Cost Accounting Standards -Educational Institution

  
	
  o 52.230-6

  	
   

  	
  Administration of Cost Accounting Standards

  
	
  o 52.232-7

  	
   

  	
  Payments Under Time-and-Materials and Labor-Hour Contracts

  
	
  o 52.232-16

  	
   

  	
  Progress Payments (Notwithstanding paragraph 8 above, in paragraph
  (d),”Government” means the “U.S. Government” except in subdivision
  (d)(2)(iv).

  
	
  o 52.232-17

  	
   

  	
  Interest

  
	
  o 52.232-18

  	
   

  	
  Availability of Funds

  
	
  o 52.232-19

  	
   

  	
  Availability of Funds for the Next Fiscal Year

  
	
  o 52.232-20

  	
   

  	
  Limitation of Cost

  
	
  ý 52.232-22

  	
   

  	
  Limitation of Funds

  
	
  o 52.232-23

  	
   

  	
  Assignment of Claims

  
	
  o 52.232-23

  	
   

  	
  Assignment of Claims Alternate 1

  
	
  o 52.232-32

  	
   

  	
  Performance-Based Payments

  
	
  o 52.236-2

  	
   

  	
  Differing Site Conditions

  
	
  o 52.236-13

  	
   

  	
  Accident Prevention

  
	
  o 52.237-2

  	
   

  	
  Protection of Government Buildings, Equipment & Vegetation

  
	
  o 52.237-3

  	
   

  	
  Continuity of Services

  
	
  o 52.237-7

  	
   

  	
  Indemnification and Medical Liability Insurance

  
	
  o 52.237-10

  	
   

  	
  Identification of Uncompensated Overtime

  
	
  o 52.239-1

  	
   

  	
  Privacy or Security Safeguards

  
	
  ý 52.242-1

  	
   

  	
  Notice of Intent to Disallow Costs

  
	
  ý 52.242-3

  	
   

  	
  Penalties for Unallowable Costs

  
	
  ý 52.242-4

  	
   

  	
  Certification of Final Indirect Costs

  
	
  o 52.242-12

  	
   

  	
  Report of Shipment

  
	
  ý 52.242-13

  	
   

  	
  Bankruptcy

  
	
  o 52.242-15

  	
   

  	
  Stop-Work Order

  
	
  ý 52.242-15

  	
   

  	
  Stop-Work Order Alternate 1

  
	
  o 52.243-1

  	
   

  	
  Changes - Fixed-Price

  
	
  o 52.243-1

  	
   

  	
  Changes - Fixed- Price - Alternate I

  
	
  o 52.243-2

  	
   

  	
  Changes - Cost-Reimbursement

  
	
  o 52.243-2

  	
   

  	
  Changes - Cost-Reimbursement - Alternate I

  
	
  o 52.243-2

  	
   

  	
  Changes - Cost-Reimbursement - Alternate II

  
	
  o 52.243-2

  	
   

  	
  Changes - Cost-Reimbursement - Alternate V

  
	
  ý 52.243-3

  	
   

  	
  Changes - Changes - Time-and-Materials or Labor-Hours

  
	
  o 52.243-6

  	
   

  	
  Change Order Accounting

  
	
  ý 52.244-2

  	
   

  	
  Subcontracts (AUG 1998) Alternate I (AUG 1998)

  



 


5

















 


	
  ý 52.244-5

  	
   

  	
  Competition in Subcontracting

  
	
  o 52.244-6

  	
   

  	
  Subcontracts for Commercial Items and Commercial Components

  
	
  o 52.245-4

  	
   

  	
  Government-Furnished Property (Short Form)

  
	
  ý 52.245-5

  	
   

  	
  Government Property (Cost-Reimbursement, Time and Material or
  Labor-Hour Contracts) (JAN 1986) (DEVIATION)

  
	
  o 52.245-8

  	
   

  	
  Liability for the Facilities

  
	
  o 52.245-16

  	
   

  	
  Facilities Equipment Modernization

  
	
  o 52.245-17

  	
   

  	
  Special Tooling

  
	
  o 52.245-18

  	
   

  	
  Special Test Equipment

  
	
  ý 52.245-19

  	
   

  	
  Government Property Furnished “As Is”

  
	
  o 52.246-1

  	
   

  	
  Contractor Inspection Requirements

  
	
  o 52.246-2

  	
   

  	
  Inspection of Supplies - Fixed Price

  
	
  o 52.246-3

  	
   

  	
  Inspection of Supplies - Cost-Reimbursement

  
	
  o 52.246-4

  	
   

  	
  Inspection of Services - Fixed-Price

  
	
  o 52.246-5

  	
   

  	
  Inspection of Services - Cost-Reimbursement

  
	
  o 52.246-6

  	
   

  	
  Inspection of Time-and- Material and Labor-Hour

  
	
  ý 52.246-8

  	
   

  	
  Inspection of Research and Development - Cost-Reimbursement

  
	
  o 52.246-9

  	
   

  	
  Inspection of Research and Development – Short Form (APR 1984)

  
	
  o 52.246-20

  	
   

  	
  Warranty of Services

  
	
  o 52.246-23

  	
   

  	
  Limitation of Liability

  
	
  o 52.246-24

  	
   

  	
  Limitation of Liability - High-Value Items

  
	
  o 52.246-25

  	
   

  	
  Limitation of Liability – Services

  
	
  ý 52.247-1

  	
   

  	
  Commercial Bill of Lading Notation

  
	
  o 52.247-55

  	
   

  	
  F.o.b. Point for Delivery of Government-Furnished Property

  
	
  ý 52.247-64

  	
   

  	
  Preference for Privately Owned U.S. Flag Commercial Vessels

  
	
  ý 52.247-67

  	
   

  	
  Submission of Commercial Transportation Bills to the General Services
  Administration for Audit (JUN 1997)

  
	
  o 52.248-1

  	
   

  	
  Value Engineering

  
	
  ý 52.249-6

  	
   

  	
  Termination (Cost-Reimbursement) (SEP 1996)

  
	
  o 52.249-8

  	
   

  	
  Default -(Fixed-Price Supply and Services)

  
	
  o 52.249-14

  	
   

  	
  Excusable Delays

  
	
  ý 52.251-01

  	
   

  	
  Government Supply Sources (APR 1984)

  
	
  o 52.253-1

  	
   

  	
  Computer Generated Forms

  



 


6

















 


SCHEDULE B


CONTRACT
CLAUSES


 


Department of Defense


PART
II  DFAR CLAUSES


MDA972-00-C-0053 – T&M


 


1.     REFERENCES TO DFAR SUPPLEMENT


 


All references herein to “DFAR Supplement” or “DFAR SUPP” shall mean
the Department of Defense Supplement to the Federal Acquisition Regulation.


 


2.     DFAR SUPPLEMENT CLAUSES APPLICABLE TO THIS ORDER


 


The clauses in DFAR Supplement Subpart 252.2 referenced in subparagraph
(a) and those clauses referenced and checked in subparagraph (b), below, in
effect on the date of this Order, are incorporated herein and made a part of
this Order. To the extent that an earlier version of any such clause is
included in the Prime Contract or Subcontract under which this Order is issued,
the date of the clause is it appears in such Prime Contract or Subcontract
shall be controlling and said version shall be incorporated therein. In all
such clauses, unless the context of a clause requires otherwise, the term
“Contractor” shall mean Seller, the term “Contract” shall mean this Order, and
the terms “Government,” “Contracting Officer” and equivalent phrases shall mean
Buyer and Buyer’s Purchasing Representative (except with respect to DFARs
252.227-7013, 252.227-7014, and 252.227-7016, in which the term “Government”
will retain its meaning as set forth in the DFAR), respectively. It is intended
that the referenced clause shall apply to Seller in such manner as is necessary
to reflect the position of Seller as a subcontractor to Buyer, to insure
Seller’s obligations to Buyer and to the United States Government, and to
enable Buyer to meet its obligations under its Prime Contract or Subcontract.


 


(a)  The following clauses are
applicable to this Order:


 


	
  DFAR Reference

  	
   

  	
  Title of
  Clause

  
	
   

  	
   

  	
   

  
	
  252.203-7001

  	
   

  	
  Prohibition on Persons Convicted of Fraud or Other
  Defense-Contract-Related Felonies)

  
	
  252.204-7000

  	
   

  	
  Disclosure of Information

  
	
  252.208-7000

  	
   

  	
  Intent to Furnish Precious Metals as Government-Furnished Material

  
	
  252.209-7000

  	
   

  	
  Acquisitions From Subcontractors Subject to On-Site Inspection under
  the Intermediate-Range Nuclear Forces (INF) Treaty  (If Subcontract exceeds $25,000)

  
	
  252.211-7000

  	
   

  	
  Acquisition Streamlining (If Subcontract exceeds $1,000,000)

  
	
  252.215-7000

  	
   

  	
  Pricing Adjustments

  
	
  252.217-7003

  	
   

  	
  Changes

  
	
  252.219-7003

  	
   

  	
  Small, Small Disadvantaged and Women-Owned Small Business
  Subcontracting Plan (DOD Contracts) (If Order exceeds $500,000)

  
	
  252.225-7026

  	
   

  	
  Reporting of Contract Performance Outside the United States

  
	
  252.227-7018

  	
   

  	
  Rights in Noncommercial Technical Data and Computer Software -Small
  Business Innovation Research (SBIR) Program

  
	
  252.227-7033

  	
   

  	
  Rights in Shop Drawings

  
	
  252.227-7034

  	
   

  	
  Patents – Subcontracts

  
	
  252.227-7037

  	
   

  	
  Validation of Restrictive Markings on Technical Data

  
	
  252.228-7005

  	
   

  	
  Accident Reporting & Investigation Involving Aircraft, Missiles,
  and Space Launch Vehicles

  
	
  252.231-7000

  	
   

  	
  Supplemental Cost Principles

  
	
  252.247-7001

  	
   

  	
  Price Adjustment

  



 


1

















 


b)  DFAR Supplement clauses
applicable to this Order if checked:


 


	
  DFAR Reference

  	
   

  	
  Title of Clause

  
	
   

  	
   

  	
   

  
	
  ý 
  252.201-7000

  	
   

  	
  Contracting Officer’s Representative (DEC 1991)

  
	
  ý 
  252.204-7003

  	
   

  	
  Control of Government Personnel Work Product

  
	
  ý 
  252.204-7005

  	
   

  	
  Oral Attestation of Security Responsibilities (AUG 1999)

  
	
  ý 
  252.215-7002

  	
   

  	
  Cost Estimating System Requirements (OCT 1998)

  
	
  ý 
  252.223-7004

  	
   

  	
  Drug-Free Work Force

  
	
  ý 
  252.225-7012

  	
   

  	
  Preference for Certain Domestic Commodities

  
	
  ý 
  252.227-7013

  	
   

  	
  Rights in Technical Data Noncommercial Items

  
	
  ý 
  252.227-7014

  	
   

  	
  Rights in Noncommercial Computer Software and Noncommercial Computer
  Software Documentation

  
	
  ý 
  252.227-7016

  	
   

  	
  Rights in Bid or Proposal Information

  
	
  ý 
  252.227-7017

  	
   

  	
  Identification and Assertion of Use, Release, or Disclosure
  Restrictions

  
	
  ý 
  252.227-7019

  	
   

  	
  Validation of Asserted Restriction – Computer Software (JUN 1995)

  
	
  ý 
  252.227-7027

  	
   

  	
  Deferred Ordering of Technical Data or Computer Software

  
	
  ý 
  252.227-7030

  	
   

  	
  Technical Data - Withholding of Payment

  
	
  ý 
  252.227-7036

  	
   

  	
  Certification of Technical Data Conformity

  
	
  ý 
  252.235-7010

  	
   

  	
  Acknowledgment of Support and Disclaimer

  
	
  ý 
  252.235-7011

  	
   

  	
  Final Scientific of Technical Report (MAY 1995)

  
	
  ý 
  252.243-7002

  	
   

  	
  Requests for Equitable Adjustments (MAR 1998)

  
	
  ý 
  252.245-7001

  	
   

  	
  Reports of Government Property

  
	
  ý 
  252.247-7023

  	
   

  	
  Transportation of Supplies by Sea (MAR 2000)

  
	
  ý 
  252.247-7024

  	
   

  	
  Notification of Transportation of Supplies by Sea

  
	
  ý 
  252.251-7000

  	
   

  	
  Ordering from Government Supply Sources (MAY 1995)

  



 


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