Exhibit 10.5


 





SUBCONTRACT AGREEMENT


Time and Material /
Labor Hour


 


	
  SUBCONTRACTOR:

  	
  SUBCONTRACT
  #: [                    ]

  
	
  Ibis
  Therapeutics, A Division of Isis Pharmaceuticals, Inc.

  	
  DPAS
  RATING: [                    ]

  
	
  ADDRESS:

  	
  TYPE:        Time
  and Material/Labor Hour

  
	
  1891
  Rutherford Road

  	
  NOT-TO-EXCEED
  CEILING PRICE: $[                    ]

  
	
  Carlsbad,
  CA 92008

  	
   

  



 


INTRODUCTION


 


This Subcontract
Agreement, effective [                    ]
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, California. The effort to be
performed by Seller under this Subcontract will be part of Buyer’s Prime
Contract # [                    ]
that has been issued by [                    ].
 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 18.0 Order of Precedence clause of this
agreement.


 


SCHEDULE A


SPECIFIC TERMS AND CONDITIONS


 


1.0          PERIOD OF PERFORMANCE


 


The period of performance
for this Subcontract is [                    ]
through [                    ],
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:


 




	
  LABOR CATEGORY

  	
   

  	
  BILLING
  RATE

  	
   

  	
  BILLING
  RATE

  	
   

  
	
   

  	
   

  	
  GFY 05

  (12/16/04-09/30/05)

  	
   

  	
  GFY 06

  (10/01/05-09/30/06)

  	
   

  
	
  Executive

  	
   

  	
  $

  	
  [        ]
  Per hour

  	
   

  	
  $

  	
  [        ]
  Per hour

  	
   

  
	
  Scientist II

  	
   

  	
  $

  	
  [        ]
  Per hour

  	
   

  	
  $

  	
  [        ]
  Per hour

  	
   

  
	
  Scientist I

  	
   

  	
  $

  	
  [        ]
  Per hour

  	
   

  	
  $

  	
  [        ]
  Per hour

  	
   

  
	
  Scientist

  	
   

  	
  $

  	
  [        ]
  Per hour

  	
   

  	
  $

  	
  [        ]
  Per hour

  	
   

  






 


1.2          FUNDING


 


This Subcontract may be
incrementally or fully funded. The Subcontract Ceiling Price of $[                    ]
is currently fully funded in the amount of $[                    ]
($[                    ]
Labor / $[                    ]
Consumables), which is anticipated to cover expenses through [                    ].
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.


 





















 


Subcontractor:
Isis Pharmaceuticals, Inc.


Subcontract
No.: [                    ]


Project
Name: [                    ]


 


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
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:
Josh Houser, M/S 700


4001
North Fairfax Drive, Suite 375


Arlington,
VA 22203


 


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,” 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 if any for each line item billed.


 


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 receipt of proper invoice.


 


(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
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.


 


Pro forma #9-932-025 Time and Material/Labor Hour (rev. 9/20/2004)


 


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(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 all goods and services delivered pursuant hereto will be
new, unless otherwise specified, and free from defects in material and
workmanship; (2) 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; and (3) 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:

  	
   

  	
  [                    ]

  Phone: [                    ]

  Fax: [                    ]

  Email: [                    ]

  	
  TECHNICAL:

  	
   

  	
  [                    ]

  Phone: [                    ]

  Fax: [                    ]

  Email: [                    ]

  
	
  CONTRACTUAL:

  	
   

  	
  [                    ]

  Phone: [                    ]

  Fax: [                    ]

  Email: [                    ]

  	
  CONTRACTUAL:

  	
   

  	
  [                    ]

  Phone: [                    ]

  Fax: [                    ]

  Email: [                    ]

  



 


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; (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.


 


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3.0          DISCLOSURE


 


The parties shall 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 is [                    ].


 


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 # [                    ].
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.


 


6.0          INSURANCE
PROVISION FOR PROCUREMENT CONTRACTS


 


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.


 


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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.


 


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 


 


5





















 


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 AND USE OF BUYER
FURNISHED ITEMS/INFORMATION


 


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 Subcontract 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.
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 


 


6





















 


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 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.


 


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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.


 


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        STANDARDS
OF BUSINESS ETHICS & CONDUCT


 


SAIC believes
in fair and open competition and is committed to conducting its business
fairly, impartially and in an ethical and proper manner. SAIC is owned and
controlled by its employee owners. These characteristics make it imperative
that SAIC employees adhere to a particularly high ethical standard. Employee
ownership both demands and fosters highly ethical conduct because SAIC can be
successful only when employees look after long-term interests of the company
and resist pressures to compromise SAIC standards. Buyer’s expectation is that
Seller also will conduct its business fairly, impartially and in an ethical and
proper manner. If Seller has cause to believe that Buyer or any employee or
agent of Buyer has acted improperly or unethically under this agreement/order,
Seller shall report such behavior to the SAIC Ethics Hotline (800) 435-4234.
Copies of The Science Applications International Corporation (SAIC) code of
Ethics and contacts for such reports are available on www.saic.com under
Corporate Governance.


 


18.0        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 dated [                    ],
entitled “[                    ]”


 


2.     Schedule A: 
Specific Terms and Conditions Form 9-932-025 (Rev. 9/20/04)


 


3.     Schedule B Part I: U.S.
Government Terms and Conditions Form 9-932-031 (Rev. 7/1/02)


 


4.     Schedule B Part II:
Contract Clauses Department of Defense (DOD) (Rev. 12/5/03) 


 


8





















 


19.0        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:

  IBIS THERAPEUTICS

  A DIVISION OF ISIS PHARMACEUTICALS, INC.

  	
   

  	
   SCIENCE
  APPLICATIONS INTERNATIONAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Company Name)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
    (Signature)

  	
   

  	
    (Signature)

  
	
   

  	
   

  	
   

  
	
    Name: [                    ]

  	
   

  	
    Name: [                    ]

  
	
  (Type or Print)

  	
   

  	
  (Type or Print)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
    Title: [                    ]

  	
   

  	
    Title: [                    ]

  
	
   

  	
   

  	
   

  
	
    Date: [                    ]

  	
   

  	
    Date: [                    ]

  



 


9





















 


Attachment I


 


Statement of Work


 


[                    ]


 





















 


[                    ]


 





 


SCHEDULE B - U.S.
GOVERNMENT TERMS AND CONDITIONS


 


Applicable to all U.S. Government
subcontracts


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 [                    ],
in which the term “Government,” “Contracting Officer” and equivalent phrases
will retain their respective meanings as set forth in such FARs), 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.


 


(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.


 


11





















 


(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.


 


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.


 


12





















 


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


 


	
  Clause # & FAR Ref.

  	
   

  	
  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 # & FAR Ref.

  	
   

  	
  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 $100,000)

  
	
  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 & 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)

  



 


13





















 


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


 


	
  Clause # & FAR Ref.

  	
   

  	
  Title of Clause

  
	
  o52.203-10

  	
   

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

  
	
  o52.204-2

  	
   

  	
  Security
  Requirements

  
	
  o52.204-4

  	
   

  	
  Printing/Copying
  Double Sided on Recycled Paper

  
	
  o52.207-3

  	
   

  	
  Right
  of First Refusal of Employment Openings

  
	
  o52.214-26

  	
   

  	
  Audit and Records-Sealed
  Bidding

  
	
  o52.214-27

  	
   

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

  
	
  o52.214-28

  	
   

  	
  Subcontractor
  Cost or Pricing Data - Modifications - Sealed Bidding

  
	
  o52.215-10

  	
   

  	
  Price Reduction
  for Defective Cost or Pricing Data

  
	
  o52.215-11

  	
   

  	
  Price Reduction
  for Defective Cost or Pricing Data -Modifications

  
	
  o52.215-12

  	
   

  	
  Subcontractor
  Cost or Pricing Data

  
	
  o52.215-13

  	
   

  	
  Subcontractor
  Cost or Pricing Data - Modifications

  
	
  o52.215-15

  	
   

  	
  Pension
  Adjustments and Asset Reversions

  
	
  o52.215-16

  	
   

  	
  Facilities
  Capital Cost of Money

  
	
  o52.215-18

  	
   

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

  
	
  o52.215-19

  	
   

  	
  Notification of
  Ownership Changes

  
	
  o52.215-20

  	
   

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

  
	
  o52.215-21

  	
   

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

  
	
  o52.216-7

  	
   

  	
  Allowable Cost
  and Payment

  
	
  o52.216-8

  	
   

  	
  Fixed Fee

  
	
  o52.216-18

  	
   

  	
  Ordering

  
	
  o52.216-22

  	
   

  	
  Indefinite
  Quantity

  
	
  o52.217-8

  	
   

  	
  Option to Extend
  Services

  
	
  o52.217-9

  	
   

  	
  Option to Extend
  the Term of the Contract

  
	
   

  	
   

  	
  (a)   within
  the current contract year

  
	
   

  	
   

  	
  (b)   not
  to exceed 60 months or 5 years

  
	
  o52.219-16

  	
   

  	
  Liquidated
  Damages – Subcontracting Plan

  
	
  o52.222-2

  	
   

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

  
	
  o52.222-3

  	
   

  	
  Convict Labor

  
	
  o52.222-6

  	
   

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

  
	
  o52.222-11

  	
   

  	
  Subcontracts
  (Labor Standards)

  
	
  o52.222-20

  	
   

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

  
	
  o52.222-21

  	
   

  	
  Prohibition of
  Segregated Facilities

  
	
  o52.222-29

  	
   

  	
  Notification of
  Visa Denial

  
	
  o52-222-41

  	
   

  	
  Service Contract
  Act of 1965, as Amended* (*if Order
  exceeds $2,500)

  
	
  o52.222-42

  	
   

  	
  Statement of
  Equivalent Rates by Federal Hires

  
	
  o52.222-43

  	
   

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

  
	
  o52.222-46

  	
   

  	
  Evaluation of
  Compensation for Professional Employees

  
	
  o52.223-5

  	
   

  	
  Pollution
  Prevention and Right-to-Know Information

  
	
  o52.223-6

  	
   

  	
  Drug-Free
  Workplace

  
	
  o52.223-7

  	
   

  	
  Notice of
  Radioactive Materials

  
	
  o52.223-14

  	
   

  	
  Toxic Chemical
  Release Reporting

  
	
  o52.224-2

  	
   

  	
  Privacy Act

  



 


14





















 


	
  Clause # & FAR Ref.

  	
   

  	
  Title of Clause

  
	
  o52.225-1

  	
   

  	
  Buy American Act
  -Balance of Payments Program - Supplies

  
	
  o52.225-5

  	
   

  	
  Trade Agreements

  
	
  o52.225-8

  	
   

  	
  Duty-Free Entry

  
	
  o52.226-1

  	
   

  	
  Utilization of
  Indian Organizations and Indian -Owned Economic Enterprises

  
	
  o52.227-1

  	
   

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

  
	
  o52.227-1

  	
   

  	
  Authorization and
  Consent -Alternate I

  
	
  o52.227-3

  	
   

  	
  Patent Indemnity
  (if order exceeds $50,000)

  
	
  o52.227-9

  	
   

  	
  Refund of
  Royalties

  
	
  o52.227-10

  	
   

  	
  Filing of Patent
  Applications - Classified Subject Matter

  
	
  o52.227-11

  	
   

  	
  Patent Rights -
  Retention by the Contractor (Short Form)

  
	
  o52.227-12

  	
   

  	
  Patent Rights -
  Retention by the Contractor (Long Form)

  
	
  o52.227-13

  	
   

  	
  Patent Rights -
  Acquisition by the Government

  
	
  o52.227-14

  	
   

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

  
	
  o52.227-16

  	
   

  	
  Additional Data
  Requirements

  
	
  o52.227-17

  	
   

  	
  Rights in Data -
  Special Works

  
	
  o52.227-18

  	
   

  	
  Rights in Data -
  Existing Works

  
	
  o52.227-19

  	
   

  	
  Commercial
  Computer Software - Restricted Rights

  
	
  o52.227-20

  	
   

  	
  Rights in Data
  SBIR Program

  
	
  o52.227-21

  	
   

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

  
	
  o52.227-22

  	
   

  	
  Major System -
  Minimum Rights

  
	
  o52.227-23

  	
   

  	
  Rights to
  Proposal Data (Technical)

  
	
  o52.228-3

  	
   

  	
  Worker’s
  Compensation Insurance (Defense Base Act)

  
	
  o52.228-4

  	
   

  	
  Worker’s
  Compensation and War-Hazard Insurance Overseas

  
	
  o52.228-5

  	
   

  	
  Insurance - Work
  on a Government Installation

  
	
  o52.228-7

  	
   

  	
  Insurance -
  Liability to Third Persons

  
	
  o52.229-6

  	
   

  	
  Taxes - Foreign
  Fixed-Price Contracts

  
	
  o52.229-7

  	
   

  	
  Taxes -
  Fixed-Price Contracts with Foreign Governments

  
	
  o52.229-8

  	
   

  	
  Taxes - Foreign
  Cost-Reimbursement Contracts

  
	
  o52.229-9

  	
   

  	
  Taxes -
  Cost-Reimbursement Contracts with Foreign Governments

  
	
  o52.229-10

  	
   

  	
  State of New
  Mexico Gross Receipts and Compensating Tax

  
	
  o52.230-2

  	
   

  	
  Cost Accounting
  Standards

  
	
  o52.230-3

  	
   

  	
  Disclosure and
  Consistency of Cost Accounting Practices

  
	
  o52.230-5

  	
   

  	
  Cost Accounting
  Standards -Educational Institution

  
	
  o52.230-6

  	
   

  	
  Administration
  of Cost Accounting Standards

  
	
  o52.232-7

  	
   

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

  
	
  o52.232-16

  	
   

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

  
	
  o52.232-17

  	
   

  	
  Interest

  
	
  o52.232-18

  	
   

  	
  Availability of
  Funds

  
	
  o52.232-19

  	
   

  	
  Availability of
  Funds for the Next Fiscal Year

  
	
  o52.232-20

  	
   

  	
  Limitation of
  Cost

  
	
  o52.232-22

  	
   

  	
  Limitation of
  Funds

  
	
  o52.232-23

  	
   

  	
  Assignment of
  Claims

  
	
  o52.232-23

  	
   

  	
  Assignment of
  Claims Alternate 1

  
	
  o52.232-32

  	
   

  	
  Performance-Based
  Payments

  
	
  o52.236-2

  	
   

  	
  Differing Site
  Conditions

  
	
  o52.236-13

  	
   

  	
  Accident
  Prevention

  



 


15





















 


	
  Clause # & FAR Ref.

  	
   

  	
  Title of Clause

  
	
  o52.237-2

  	
   

  	
  Protection of
  Government Buildings, Equipment & Vegetation

  
	
  o52.237-3

  	
   

  	
  Continuity of
  Services

  
	
  o52.237-7

  	
   

  	
  Indemnification
  and Medical Liability Insurance

  
	
  o52.237-10

  	
   

  	
  Identification
  of Uncompensated Overtime

  
	
  o52.239-1

  	
   

  	
  Privacy or
  Security Safeguards

  
	
  o52.242-1

  	
   

  	
  Notice of Intent
  to Disallow Costs

  
	
  o52.242-3

  	
   

  	
  Penalties for
  Unallowable Costs

  
	
  o52.242-4

  	
   

  	
  Certification of
  Final Indirect Costs

  
	
  o52.242-12

  	
   

  	
  Report of
  Shipment

  
	
  o52.242-13

  	
   

  	
  Bankruptcy

  
	
  o52.242-15

  	
   

  	
  Stop-Work Order

  
	
  o52.242-15

  	
   

  	
  Stop-Work Order
  Alternate 1

  
	
  o52.243-1

  	
   

  	
  Changes -
  Fixed-Price

  
	
  o52.243-1

  	
   

  	
  Changes - Fixed-
  Price - Alternate I

  
	
  o52.243-2

  	
   

  	
  Changes -
  Cost-Reimbursement

  
	
  o52.243-2

  	
   

  	
  Changes -
  Cost-Reimbursement - Alternate I

  
	
  o52.243-2

  	
   

  	
  Changes -
  Cost-Reimbursement - Alternate II

  
	
  o52.243-2

  	
   

  	
  Changes -
  Cost-Reimbursement - Alternate V

  
	
  o52.243-3

  	
   

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

  
	
  o52.243-6

  	
   

  	
  Change Order
  Accounting

  
	
  o52.244-2

  	
   

  	
  Subcontracts

  
	
  o52.244-5

  	
   

  	
  Competition in
  Subcontracting

  
	
  o52.244-6

  	
   

  	
  Subcontracts for
  Commercial Items and Commercial Components

  
	
  o52.245-4

  	
   

  	
  Government-Furnished
  Property (Short Form)

  
	
  o52.245-8

  	
   

  	
  Liability for
  the Facilities

  
	
  o52.245-16

  	
   

  	
  Facilities
  Equipment Modernization

  
	
  o52.245-17

  	
   

  	
  Special Tooling

  
	
  o52.245-18

  	
   

  	
  Special Test
  Equipment

  
	
  o52.245-19

  	
   

  	
  Government
  Property Furnished “As Is”

  
	
  o52.246-1

  	
   

  	
  Contractor
  Inspection Requirements

  
	
  o52.246-2

  	
   

  	
  Inspection of
  Supplies - Fixed Price

  
	
  o52.246-3

  	
   

  	
  Inspection of
  Supplies - Cost-Reimbursement

  
	
  o52.246-4

  	
   

  	
  Inspection of
  Services - Fixed-Price

  
	
  o52.246-5

  	
   

  	
  Inspection of
  Services - Cost-Reimbursement

  
	
  o52.246-6

  	
   

  	
  Inspection of
  Time-and- Material and Labor-Hour

  
	
  o52.246-8

  	
   

  	
  Inspection of
  Research and Development - Cost-Reimbursement

  
	
  o52.246-20

  	
   

  	
  Warranty of
  Services

  
	
  o52.246-23

  	
   

  	
  Limitation of
  Liability

  
	
  o52.246-24

  	
   

  	
  Limitation of
  Liability - High-Value Items

  
	
  o52.246-25

  	
   

  	
  Limitation of
  Liability – Services

  
	
  o52.247-1

  	
   

  	
  Commercial Bill
  of Lading Notation

  
	
  o52.247-55

  	
   

  	
  F.O.B. Point for
  Delivery of Government-Furnished Property

  
	
  o52.247-64

  	
   

  	
  Preference for
  Privately Owned U.S. Flag Commercial Vessels

  
	
  o52.248-1

  	
   

  	
  Value
  Engineering

  
	
  o52.249-8

  	
   

  	
  Default
  -(Fixed-Price Supply and Services)

  
	
  o52.249-14

  	
   

  	
  Excusable Delays

  
	
  o52.253-1

  	
   

  	
  Computer
  Generated Forms

  



 


16





















 


	
  Clause # & FAR Ref.

  	
   

  	
  Title of Clause

  
	
  o52.242-17

  	
   

  	
  Government Delay
  of Work

  
	
  o52.247-34

  	
   

  	
  FOB Destination

  
	
  o52.202-1

  	
   

  	
  Definitions

  
	
  o52.219-14

  	
   

  	
  Limitations on
  Subcontracting

  
	
  o52.219-23

  	
   

  	
  Notice of Price
  Evaluation Adjustment for SDB Concerns

  
	
  o52.225-16

  	
   

  	
  Sanctioned
  European Union Country Services

  
	
  o52.227-5

  	
   

  	
  Waiver of
  Indemnity

  
	
  o52.229-3

  	
   

  	
  Federal, State
  and Local Taxes

  
	
  o52.232-9

  	
   

  	
  Limitation on
  Withholding of Payments

  
	
  o52.232-25

  	
   

  	
  Prompt Payment

  
	
  o52.232-33

  	
   

  	
  Payment by
  Electronic Funds Transfer

  
	
  o52.233-1

  	
   

  	
  Disputes

  
	
  o52.233-3

  	
   

  	
  Protest after
  Award

  
	
  o52.252-2

  	
   

  	
  Clauses
  Incorporated by Reference

  
	
  o52.252-6

  	
   

  	
  Authorized
  Deviation in Clauses

  



 


17





















 


SCHEDULE B - CONTRACT
CLAUSES


 


Department OF Defense (DOD) PART II DFAR CLAUSES


 


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 as 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 [                    ],
in which the term “Government” will retain its meaning as set forth in such
DFARs),
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

  
	
  252.219-7003

  	
   

  	
  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

  
	
  252-226-7001

  	
   

  	
  Utilization of
  Indian Organizations and Indian-Owned Economic Enterprises – DoD Contracts

  
	
  252.227-7034

  	
   

  	
  Patents –
  Subcontracts

  
	
  252.227-7037

  	
   

  	
  Validation of
  Restrictive Markings on Technical Data

  
	
  252.231-7000

  	
   

  	
  Supplemental
  Cost Principles

  



 


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


 


	
  DFAR Reference

  	
   

  	
  Title of Clause

  
	
  o252.203-7002

  	
   

  	
  Display
  of DoD Hotline Poster

  
	
  o252.204-7003

  	
   

  	
  Control of
  Government Personnel Work Product

  
	
  o252.206-7000

  	
   

  	
  Domestic Source
  Restriction

  
	
  o252.209-7001

  	
   

  	
  Disclosure of
  Ownership or Control by the Government of a Terrorist Country

  



 


18





















 


	
  DFAR Reference

  	
   

  	
  Title of Clause

  
	
  o252.209-7002

  	
   

  	
  Disclosure of
  Ownership or Control by a Foreign Government

  
	
  o252.209-7004

  	
   

  	
  Subcontracting
  w/Firms that are Owned or Controlled by the Government of a Terrorist Country

  
	
  o252.217-7003

  	
   

  	
  Changes

  
	
  o252.217-7026

  	
   

  	
  Identification
  of Sources of Supply

  
	
  o252.222-7000

  	
   

  	
  Restrictions on
  Employment of Personnel

  
	
  o252.223-7001

  	
   

  	
  Hazard Warning
  Labels

  
	
  o252.223-7002

  	
   

  	
  Safety
  Precautions for Ammunition and Explosives

  
	
  o252.223-7003

  	
   

  	
  Change in Place
  of Performance - Ammunition and Explosives

  
	
  o252.223-7004

  	
   

  	
  Drug-Free Work
  Force

  
	
  o252.223-7006

  	
   

  	
  Prohibition on
  Storage and Disposal of Toxic and Hazardous Materials

  
	
  o252.225.7000

  	
   

  	
  Buy American Act
  - Balance of Payments Program Certificate

  
	
  o252.225-7001

  	
   

  	
  Buy American Act
  and Balance of Payments Program

  
	
  o252.225-7002

  	
   

  	
  Qualifying
  Country Sources as Subcontractors

  
	
  o252.225-7005

  	
   

  	
  Identification
  of Expenditures in the United States

  
	
  o252.225-7006

  	
   

  	
  Buy American
  Act, Trade Agreement Act, and the Balance of Payments Program Certificate

  
	
  o252.225-7007

  	
   

  	
  Trade Agreements

  
	
  o252.225-7009

  	
   

  	
  Duty Free Entry -
  Qualifying Country (End Products & Components)

  
	
  o252.225-7010

  	
   

  	
  Duty Free Entry
  - Additional Provisions

  
	
  o252.225-7012

  	
   

  	
  Preference for
  Certain Domestic Commodities

  
	
  o252.225-7014

  	
   

  	
  Preference for
  Domestic Specialty Metals

  
	
  o252.225-7015

  	
   

  	
  Preference for
  Domestic Hand or Measuring Tools

  
	
  o252.225-7031

  	
   

  	
  Secondary Arab
  Boycott of Israel

  
	
  o252.225-7043

  	
   

  	
  Antiterrorism/Force
  Protection Policy for Defense Contractors Outside the U.S.

  
	
  o252.227-7013

  	
   

  	
  Rights in
  Technical Data Noncommercial Items

  
	
  o252.227-7014

  	
   

  	
  Rights in
  Non-commercial Computer Software and Non-commercial Computer Software
  Documentation

  
	
  o252.227-7015

  	
   

  	
  Technical Data –
  Commercial Items

  
	
  o252.227-7016

  	
   

  	
  Rights in Bid or
  Proposal Information

  
	
  o252.227-7017

  	
   

  	
  Identification
  and Assertion of Use, Release, or Disclosure Restrictions

  
	
  o252.227-7018

  	
   

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

  
	
  o252.227-7019

  	
   

  	
  Validation of
  Asserted Restrictions -Computer Software

  
	
  o252.227-7020

  	
   

  	
  Rights in
  Special Works

  
	
  o252.227-7021

  	
   

  	
  Rights in Data -
  Existing Works

  
	
  o252.227-7022

  	
   

  	
  Government
  Rights (Unlimited)

  
	
  o252.227-7023

  	
   

  	
  Drawings and
  Other Data to Become Property of Government

  
	
  o252.227-7025

  	
   

  	
  Limitations on
  the Use or Disclosure of Government-Furnished Information Marked w/
  Restrictive Legends

  
	
  o252.227-7026

  	
   

  	
  Deferred
  Delivery of Technical Data or Computer Software

  
	
  o252.227-7027

  	
   

  	
  Deferred
  Ordering of Technical Data or Computer Software

  
	
  o252.227-7028

  	
   

  	
  Technical Data
  or Computer Software Previously Delivered to the Government

  
	
  o252.227-7030

  	
   

  	
  Technical Data -
  Withholding of Payment

  



 


19





















 


	
  DFAR Reference

  	
   

  	
  Title of Clause

  
	
  o252.227-7032

  	
   

  	
  Rights in
  technical data and computer software (Foreign)

  
	
  o252.227-7033

  	
   

  	
  Rights in Shop
  Drawings

  
	
  o252.227-7036

  	
   

  	
  Declaration of
  Technical Data Conformity

  
	
  o252.227-7039

  	
   

  	
  Patents –
  Reporting of Subject Inventions

  
	
  o252.228-7005

  	
   

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

  
	
  o252.232-7006

  	
   

  	
  Reduction or Suspension
  of Contract Payments Upon Finding of Fraud

  
	
  o252.235-7002

  	
   

  	
  Animal Welfare

  
	
  o252.235-7003

  	
   

  	
  Frequency
  Authorization

  
	
  o252.235-7010

  	
   

  	
  Acknowledgment
  of Support and Disclaimer

  
	
  o252.236-7000

  	
   

  	
  Modification
  Proposals - Price Breakdown

  
	
  o252.239-7000

  	
   

  	
  Protection
  Against Compromising Emanations

  
	
  o252.239-7016

  	
   

  	
  Telecommunications
  Security Equipment, Devices, Techniques and Services

  
	
  o252.245-7001

  	
   

  	
  Reports of
  Government Property

  
	
  o252.246-7001

  	
   

  	
  Warranty of Data

  
	
  o252.247-7001

  	
   

  	
  Price Adjustment
  (NOTE: Amsec may need to do)

  
	
  o252.247-7023

  	
   

  	
  Transportation
  of Supplies by Sea (If Order exceeds $25,000)

  
	
  o252.247-7024

  	
   

  	
  Notification of
  Transportation of Supplies by Sea

  
	
  o252.232-7003

  	
   

  	
  Electronic
  Submission of Payment Requests

  
	
  o252.235-7011

  	
   

  	
  Final Scientific
  or Technical Report

  
	
  o252.243-7001

  	
   

  	
  Pricing of
  Contract Modifications

  
	
  o252.244-7000

  	
   

  	
  Subcontracts for
  Commercial Items/Components

  



 


20