Document:

Unassociated Document

    EXHIBIT
10.1

     

    BASIC
ORDERING AGREEMENT # 10XS020

     

    INTRODUCTION

     

    This
Agreement, effective 1 November 2009 is made between SAIC-Frederick, Inc., a
subsidiary of SCIENCE APPLICATIONS INTERNATIONAL CORPORATION (hereinafter known
as "SAIC-F"), a Delaware corporation with offices in Frederick, MD, and GenVec,
Inc. (hereinafter known as "Subcontractor"), a corporation, with principal
offices in Gaithersburg, MD.  The effort to be performed by
Subcontractor under this Agreement will be part of SAIC-F's Prime Contract
HHSN261200800001E that has been issued by The National Cancer Institute,
Frederick MD.  The provisions and clauses contained herein are
influenced by and reflect the relationship of the parties in that contract,
which was awarded and is administered under the provision of the Federal
Acquisition Regulation (FAR).  There is no privity of contract between
the Subcontractor and the Government.

     

    This
Agreement is established to provide the necessary goods and services to the
National Institute of Allergies and Infectious Diseases (NIAID) for the
development of vaccine manufacturing infrastructure that includes the capacity
for cGMP production of materials for Phase I/II clinical trials.

     

    In
witness whereof and in consideration of the mutual obligations assumed under
this Agreement, SAIC-F and GenVec agree to the Terms and Conditions attached
hereto and incorporated by reference and represent that this Agreement is
executed by duly authorized representatives as of the dates below:

     

    
      
        	
                For
      GenVec, Inc:

              	 
      	
                For
      SAIC-Frederick, Inc:

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                x /s/ Douglas J.
      Swirsky                                                                

              	 
      	
                x
      /s/ Eugene B.
      Anderson                                                               

              
	 
      	 
      	 
      
	
                 

                Name:  Douglas J. Swirsky, CPA,
      CFA

              	 
      	
                Eugene B.
Anderson

                Name:Subcontracts Supervisor

              
	 
      	 
      	 
      
	
                Title:  Senior VP and Chief Financial
      Officer

              	 
      	
                Title:                                                               

              
	 
      	 
      	 
      
	
                Date:    November 2, 2009

              	 
      	
                Date:                 November 3,
2009

              

      

    

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 1 of
32

        
          

        

      

      
         

      

    

    

    SCHEDULE
A

     

    SPECIFIC
TERMS AND CONDITIONS

     

    
      1.0  AGREEMENT
TYPE

    

    This
Basic Ordering Agreement (hereinafter known as "BOA") is, of itself, unfunded
and does not commit SAIC-F to pay any costs related to or as a result of its
award to the agreement holder.  The obligation of funds shall be
accomplished solely through the award of Task Orders issued on a Cost
Reimbursement plus Fixed Fee basis and under the terms of this BOA.  A
General Scope of Work is provided in Attachment I (Statement of Work) with
specific Statements of Work to be provided with subsequent
Orders.  Through execution of this document, SAIC-F and Subcontractor
mutually agree:

    
      	
              a.  

            	
              that
      the Subcontractor has adequate capability and technical expertise to
      furnish all services, qualified personnel, materials, supplies, facilities
      and other resources as may be required under this
  BOA;

            

    

    
      	
              b.  

            	
              that,
      as the need for specific work related to the requirements of this
      Agreement is identified, SAIC-F shall issue a Request for Quote (RFQ) for
      this specific work;

            

    

    
      	
              c.  

            	
              that,
      when a RFQ is received by the Subcontractor pursuant to this Agreement,
      the Subcontractor shall respond with a proposal or provide an indication
      that it is not responding to the particular
RFQ;

            

    

    
      	
              d.  

            	
              that
      each RFQ shall clearly state:

            

    

    
      	
              i.  

            	
              The
      due date for proposals;

            

    

    
      	
              ii.  

            	
              A
      detailed description of the supplies or services to be
      required;

            

    

    
      	
              iii.  

            	
              Applicable
      quality standards;

            

    

    
      	
              iv.  

            	
              Delivery
      Schedules, place of delivery, inspection and acceptance
      requirements;

            

    

    
      	
              v.  

            	
              Technical
      Evaluation Criteria, as required;

            

    

    
      	
              vi.  

            	
              Specific
      terms and conditions, as applicable;
and

            

    

    
      	
              vii.  

            	
              Specific
      instructions for proposal
submission.

            

    

    
      	
              e.  

            	
              that
      SAIC-F shall award Task Orders, at its discretion, based upon responses to
      RFQs issued pursuant to this Agreement, and that each task order award
      shall be made based upon the award factors specified in the RFQ for the
      specific requirement;

            

    

     

    
      2.0  AMERICAN
RECOVERY AND REINVESTMENT ACT OF 2009

    

    Work
performed under this Agreement will be funded, in whole or in part, with funds
appropriated by the American Recovery and Reinvestment Act of 2009, Pub. L.
111-5, (Recovery Act or Act).  The Recovery Act's purposes are to
stimulate the economy and to create and retain jobs.  The Act gives
preference to activities that can be started and completed expeditiously,
including a goal of using at least 50 percent of the funds made available by it
for activities that can be initiated not later than June 17, 2009.

     

    Be
advised that Recovery Act funds can be used in conjunction with other funding as
necessary to complete projects, but tracking and reporting must be separate to
meet the reporting requirements of the Recovery Act and related
Guidance.  For projects funded by sources other than the Recovery Act,
SUBCONTRACTOR should plan to keep separate records for Recovery Act funds and to
ensure those records comply with the requirements of the Act.

     

    The
Government has not fully developed the implementing instructions of the Recovery
Act, particularly concerning the how and where for the new reporting
requirements.  The SUBCONTRACTOR will be provided these details as
they become available.  The SUBCONTRACTOR must comply with all
requirements of the Act.  If the SUBCONTRACTOR believes there is any
inconsistency between ARRA requirements and current subcontract requirements,
the issues will be referred to the Procurement Representative for
reconciliation.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 2 of
32

        
          

        

      

      
         

      

    

     

    Be
advised that special provisions may apply to projects funded by the Act relating
to:

    
      	
              ·  

            	
              Reporting,
      tracking and segregation of incurred
costs;

            

    

    
      	
              ·  

            	
              Reporting
      on job creation and preservation;

            

    

    
      	
              ·  

            	
              Publication
      of information on the Internet;

            

    

    
      	
              ·  

            	
              Protecting
      whistleblowers; and

            

    

    
      	
              ·  

            	
              Requiring
      prompt referral of evidence of a false claim to the inspector
      general.

            

    

     

    
      	
              A.  

            	
              Definitions

            

    

     

    For
purposes of this clause, "Covered Funds" means funds expended or obligated from
appropriations under the American Recovery and Reinvestment Act of 2009, Pub. L.
111-5.  Covered Funds will have special accounting codes and will be
identified as Recovery Act funds in the subcontract and/or modification using
Recovery Act funds.

     

    Non-Federal
employer means any employer with respect to Covered Funds — the CONTRACTOR or
SUBCONTRACTOR, as the case may be, if the CONTRACTOR or SUBCONTRACTOR is an
employer; and any professional membership organization, certification of other
professional body, any agent or licensee of the Federal government, or any
person acting directly or indirectly in the interest of an employer receiving
Covered Funds; or with respect to Covered Funds received by a State or local
government, the State or local government receiving the funds and any CONTRACTOR
or SUBCONTRACTOR receiving the funds and any CONTRACTOR or SUBCONTRACTOR of the
State or local government; and does not mean any department, agency, or other
entity of the federal government.

     

    
      	
              B.  

            	
              Flow
      Down Provision

            

    

     

    Subcontractors
must include this clause in every lower-tier subcontract over $25,000 that is
funded, in whole or in part, by the Recovery Act unless the subcontract is with
an individual.

     

    
      	
              C.  

            	
              Segregation
      and Payment of Costs

            

    

     

    SUBCONTRACTOR
must segregate the obligations and expenditures related to funding under the
Recovery Act.  Financial and accounting systems should be revised as
necessary to segregate, track and maintain these funds apart and separate from
other revenue streams.  No part of the funds from the Recovery Act
shall be commingled with any other funds or used for a purpose other than that
of making payments for costs allowable for Recovery Act
projects.  Recovery Act funds can be used in conjunction with other
funding as necessary to complete projects, but tracking and reporting must be
separate to meet the reporting requirements of the Recovery Act and OMB
Guidance.

     

    Invoices
must clearly indicate the portion of the requested payment that is for work
funded by the Recovery Act.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 3 of
32

        
          

        

      

      
         

      

    

     

    
      	
              D.  

            	
              Prohibition
      on Use of Funds

            

    

     

    None of
the funds provided under this agreement derived from the American Recovery and
Reinvestment Act of 2009, Pub. L. 111-5 may be for any casino or other gambling
establishment, aquarium, zoo, golf course, or swimming pool.

     

    
      	
              E.  

            	
              Publication

            

    

     

    Information
about this agreement will be published on the Internet and linked to the website
www.recovery.gov, maintained by the Accountability and Transparency
Board.  The Board may exclude posting contractual or other information
on the website on a case-by-case basis when necessary to protect national
security or to protect information that is not subject to disclosure under
sections 552 and 552a of title 5, United States Code.

     

    
      	
              F.  

            	
              Registration
      requirements

            

    

     

    SUBCONTRACTOR,
and all lower-tier subcontractors, must obtain a DUNS number and be registered
in the Central Contractor Registration (CCR) in accordance with FAR
52.204-11.

     

    
      	
              G.  

            	
              Utilization
      of Small Business

            

    

     

    SUBCONTRACTOR
shall to the maximum extent practicable give a preference to small business in
the award of lower-tier subcontracts for projects funded by Recovery Act
dollars.

     

    
      	
              H.  

            	
              Other
      Reporting Requirements

            

    

     

    Representation
& Certification Part G shall be submitted on a Government Fiscal quarterly
basis to the cognizant Subcontract Administrator not later than the last day of
the quarter, or as otherwise instructed in writing.

     

    SUBCONTRACTOR,
and all lower-tier subcontractors, must log onto the following website http://saic.ncifcrf.gov/ARRA/form.aspx
and enter the required data on a (calendar) quarterly basis by the last business
day of the final month of each quarter.  Subcontractor will need to
create a log-in identification which will be used each time data is
entered.  This ARRA reporting is considered a subcontract deliverable
and failure to comply may be considered a breach of the subcontract

     

    
      3.0  PERIOD
OF PERFORMANCE

    

    The
period of performance for this BOA is 1 November 2009 through 31 October 2014
unless amended in writing by mutual agreement of the
parties.  Subcontractor is not obligated to continue work or provide
services and SAIC-F is not obligated to compensate Subcontractor for expenses
incurred or commitments made before or after these dates.

     

    Any Task
Order issued during the effective period of this Agreement and not completed
within that period shall be completed by the Subcontractor within the time
specified in the Task Order.  The BOA shall govern the Subcontractor's
and SAIC-F's rights and obligations with respect to that Task Order to the same
extent as if the Task Order were completed during the BOA's effective
period.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 4 of
32

        
          

        

      

      
         

      

    

     

    
      4.0  PRICE
SCHEDULE/FUNDING

    

    Price
schedules, Task Order ceiling amounts, and funding levels (if applicable) shall
be established for each Task Order issued under this Agreement which shall be
effective for the period of performance identified therein.

     

    
      5.0  QUALITY
ASSURANCE/INSPECTION

    

    All goods
furnished and services performed pursuant hereto shall be subject to inspection
and testing by SAIC-F at all reasonable times and places during the Agreement
term and in any event prior to Final Acceptance as defined in the individual
Orders.  No inspection made prior to Final Acceptance shall relieve
Subcontractor from responsibility for defects or other failure to meet the
requirements of this Agreement.  In the event that goods furnished or
services supplied are not in accordance with the individual Order's Statement of
Work or other requirements, SAIC-F may require Subcontractor to promptly
correct, repair, replace or re-perform the goods or services.  The
cost of correction, repair, replacement, or re-performance shall be determined
under Section 26 "Legal Construction and Interpretation" of this
Agreement.  If Subcontractor fails to proceed with the required
correction, repair, replacement, or re-performance within the period established
by Section 21 "Termination", SAIC-F may terminate the Agreement for
default.  If Subcontractor is unable to accomplish the foregoing, then
SAIC-F may procure such materials and services from another source or perform
such services in-house and charge to Subcontractor's account all costs, expenses
and damages associated with the reprocurement.  SAIC-F's approval of
designs furnished by Subcontractor shall not relieve Subcontractor of its
obligations hereunder.

     

    
      6.0  ACCEPTANCE

    

    Acceptance
of deliverables tendered by Subcontractor hereunder shall be made by SAIC-F's
Contractual Representative in writing.  Any other form of
communication from other persons or entities shall not be construed as
acceptance under this agreement.  Additionally, payment for services
rendered, or deliverables provided, shall not be construed as acceptance by
SAIC-F, nor does it negate or in any way diminish any rights afforded SAIC-F for
remedies as a result of defects or nonconformance, either patent or latent, or
other breach of warranty, or to make any claim for damages of any and all
kind.  Notwithstanding instances of nonconformity or noncompliance by
Subcontractor, SAIC-F shall act in good faith to provide written acceptance in a
timely manner and make payments related thereto in accordance with the payment
terms indicated in Section 8.0.

     

    
      7.0  INVOICES

    

    
      	
              7.1

            	
              Content.  Invoices
      shall be provided in the same manner as set forth in the Estimated Cost
      Worksheet for each Order and contain, at a minimum, the following
      information: subcontract number, labor categories, hourly rates, labor
      hours, fringe rate, extended totals by category, material, indirect rates,
      general & administrative rates and other direct costs detail shall be
      separated from labor costs.  Invoices shall clearly reference a
      unique invoice number on each invoice, period of incurred costs, invoice
      date and withholding amount.  All invoices shall be submitted in
      US Dollars ($USD).

            

    

     

    
      	
              7.2

            	
              Format.  Invoices
      should be provided electronically (in .pdf format or other commonly used
      format) to:  apinvoices@mail.nih.gov
      Where electronic invoices are not possible, hard copies may be mailed
      to:

            

    

     

    SAIC-Frederick,
Inc

    Accounts
Payable

    P.O. Box
B

    Frederick,
MD 21702-1201

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 5 of
32

        
          

        

      

      
         

      

    

     

    
      	
              7.3

            	
              Timing.  Properly
      formatted invoices shall be generated monthly and delivered to SAIC-F not
      later than close of business on the 15th calendar day of each
      month.  In the event the day specified falls on a weekend or
      federally-recognized holiday, invoices shall be due to SAIC-F by close of
      business on the next business day.  In consideration of the need
      to provide timely invoices to SAIC-F, the parties hereby agree that
      failure to comply with the schedule herein shall result in a two percent
      (2%) net reduction of the invoice value.  Only SAIC-F's
      Contractual Representative has the authority to deviate from this
      schedule.

            

    

     

    
      8.0  PAYMENT

    

    SAIC-F
shall pay the Subcontractor upon the submission of an acceptable invoice
approved by SAIC-F as follows:

    
      	
              8.1

            	
              Payment
      Terms.  SAIC-F may, at its discretion, require
      Subcontractor to substantiate invoices by evidence of actual payment and
      by individual daily job time cards, or other substantiation approved by
      the SAIC-F.  SAIC-F's ability to request additional
      documentation will not invoke the two percent (2%) net reduction of the
      invoice value discussed in Section 7.3 above.  SAIC-F shall pay
      in U.S. dollars ($USD) the invoice within 30 days after receipt of a
      proper invoice.  Unless specifically authorized in writing by
      the SAIC-F, the Subcontractor is not authorized to perform and the SAIC-F
      is not obligated to reimburse the Subcontractor for work performed on an
      Overtime or Shift Premium basis.  FAR 52.247-34
      F.O.B.  Destination shall apply to any applicable deliveries
      made under this Agreement.

            

    

     

    
      	
              8.2

            	
              Materials, Supplies and other direct
      costs.  Materials, supplies and other direct costs,
      including travel (if authorized), will be reimbursed on an actual-cost
      basis in accordance with consistently applied Generally Accepted
      Accounting Principles or, if applicable, as prescribed in Section 9.0
      "Travel".  Where materials are withdrawn from inventories, cost
      must be determined in accordance with proper accounting practices
      consistently followed by Subcontractor.  Subcontractor shall
      support all material cost claims by submitting invoices, storeroom
      requisition receipts, expense reports, or other substantiation acceptable
      to SAIC-F.

            

    

     

    
      	
              8.3

            	
              Certification.  Subcontractor
      agrees that invoices submitted under this Agreement constitute a
      certification that the costs included are accurate, allocable to this
      Agreement, and allowable under the terms and conditions of the same and
      all personnel charged to this Agreement will meet the applicable minimum
      education and experience qualifications required for the labor category
      billed.

            

    

     

    
      9.0  TRAVEL

    

    Travel
costs are not permitted under this Agreement.

     

    
      10.0  AGREEMENT
ATTACHMENTS / ORDER OF PRECEDENCE

    

    
      	
              10.1

            	
              Agreement
      Attachments.  The following attachments are provided with
      this Agreement and incorporated in full force and effect as described in
      Section 10.2—Order of Precedence:

            

    

     

    
      
        	
                Attachment

              	
                Description

              	
                Pages

              
	
                1

              	
                Statement
      of Work

              	
                3

              
	
                2

              	
                ARRA
      Representations and Certifications (Part G)

              	
                3

              

      

    

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 6 of
32

        
          

        

      

      
         

      

    

     

    
      	
              10.2

            	
              Order of
      Precedence.  In the event of an inconsistency or conflict
      between or among the provisions of this Agreement, the inconsistency shall
      be resolved by giving precedence in the following
  order:

            

    

     

    
      	
               
      

            	
              10.2.1

            	
              This
      Agreement including any provisions, terms and conditions and
      attachments

            

    

    
      	
               
      

            	
              10.2.2

            	
              Orders
      issued hereunder

            

    

    
      	
               
      

            	
              10.2.3

            	
              Specifications
      and/or drawings

            

    

    
      	
               
      

            	
              10.2.4

            	
              Other
      documents or exhibits when attached

            

    

     

    
      11.0  WARRANTY

    

    Subcontractor
represents and warrants (1) that the overhead rates charged for the work
performed hereunder shall not exceed the NIH approved rates for reimbursement
(2) that all goods and services delivered pursuant hereto will be free from
defects in material and workmanship; (3) that all goods and services will
conform to applicable specifications, standards of quality and performance, and
that all items will be suitable for their intended purpose; and (4) that the
goods covered by this Agreement are fit and safe for consumer use, if so
intended.  All representations and warranties of Subcontractor
together with its service warranties and guarantees, if any, shall convey to
SAIC-F and SAIC-F's customers.  The foregoing warranties shall survive
any delivery, inspection, acceptance, or payment by SAIC-F.

     

    
      12.0  TECHNICAL
AND CONTRACTUAL REPRESENTATIVES

    

    
      	
              12.1

            	
              The
      following authorized representatives are hereby designated for this
      Agreement:

            

    

    

    
      	
              FOR
      SUBCONTRACTOR:

            	
              FOR
      SAIC-F:

            
	 
      	 
      
	
              Technical:

            	
              Technical
      (COTR):

            
	
              Jason
      Gall

            	
              Dr.
      Criss Tarr, Sc.D.

            
	
              Director
      of Research, Head of HIV

            	
              Director,
      VCMP

            
	
              65
      W Watkins Mill

            	
              SAIC-Frederick,
      Inc.

            
	 
      	
              PO
      Box B

            
	
              Gaithersburg,
      MD 20858

            	
              Frederick,
      MD 21702

            
	
              Tel.
      No.                   +
      12406320740

            	
              Tel.
      No.                      301-228-4017

            
	
              Email                   jgall@genvec.com

            	
              Email                      ctarr@mail.nih.gov

            
	 
      	 
      
	
              Contractual:

            	
              Contractual
      (Contracting Officer)::

            
	
              Michael
      Tucker

            	
              Eugene
      Anderson

            
	
              Head
      of Business Development

            	
              Contracting
      Officer

            
	
              65
      W Watkins Mill

            	
              SAIC-Frederick,
      Inc.

            
	 
      	
              PO
      Box B

            
	
              Gaithersburg,
      MD 20858

            	
              Frederick,
      Maryland 21702

            
	
              Tel.
      No.                   +12406320740

            	
              Tel.
      No.                      301-228-4008

            
	
              Email                   mtucker@genvec.com

            	
              Email                      andersoneugene@mail.nih.gov

            

       

      
        
          [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

           

        

        
          Page 7 of
32

          
            

          

        

        
           

        

         

      

      	 
      	 
      
	
              Invoices:

            	
              Invoices/Administrative
      (Contract Specialist)::

            
	
              Jim
      Lambert

            	
              Max
      “Chuck” Moore

            
	
              Controller

            	
              Subcontract
      Specialist

            
	
              65
      W Watkins Mill

            	
              SAIC-Frederick,
      Inc.

            
	 
      	
              PO
      Box B

            
	
              Gaithersburg,
      MD 20858

            	
              Frederick,
      Maryland 21702

            
	
              Tel.
      No.                   +12406320740

            	
              Tel.
      No.                      301-228-4019

            
	
              Fax
      No.                   jlambert@genvec.com

            	
              Email                      mooremax@mail.nih.gov

            

    

    

    
      	
              12.2

            	
              Contacts
      with SAIC-F that affect the price, schedule, statement of work or the
      Terms and Conditions shall be made only with the authorized contractual
      representative.  No changes to this Agreement shall be binding
      upon SAIC-F unless incorporated in a written modification signed by
      SAIC-F's Contractual Representative.  The Subcontractor will not
      accept any instructions issued by any person employed by, or otherwise
      representing, the U.S. Government.

            

    

     

    
      	
              12.3

            	
              Any
      notice to be given hereunder by either Party to the other shall be in
      writing or by common electronic means and shall be deemed received when
      confirmation is received.  The Parties agree that notices
      delivered orally do not constitute official, enforceable, notices
      hereunder.

            

    

     

    
      13.0  CHANGES
AND SUSPENSION

    

    SAIC-F
may, by written notice to Subcontractor at any time before completion of this
Agreement, make changes within the general scope of this Agreement in any one of
the following: (a) drawings, designs, or specifications; (b) quantity; (c) place
of delivery; (d) method of shipment or routing; and (e) make changes in the
amount of SAIC-F 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 Agreement, the SAIC-F shall make an equitable adjustment in the hourly
rates or delivery schedule, or both, and shall modify the subcontract
not-to-exceed ceiling price.  The Subcontractor must have notified
SAIC-F in writing of any request for such adjustment within twenty (20) business
days from the date of such notice from SAIC-F or from the date of any act of
SAIC-F, which Subcontractor considers, constitutes a change.  Failure
to agree to any adjustment shall be a dispute under the Disputes clause (Section
20.0) of this Agreement.  However, Subcontractor shall proceed with
the work as changed without interruption and without awaiting settlement of any
such claim.

     

    
      14.0  KEY
PERSONNEL

    

    
      	
              14.1

            	
              For
      purposes of this clause, Key Personnel are those individuals who are
      recognized as essential to the successful completion and execution of this
      Agreement.

            

    

     

    
      	
              14.2

            	
              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 Subcontractor's Key Personnel
      assigned to this work shall be made only with persons of equal abilities
      and qualifications and is subject to prior written approval of SAIC-F,
      which shall not be unreasonably
withheld.

            

    

     

    
      	
              14.3

            	
              If
      directed by the Government, SAIC-F may direct the removal of any
      individual assigned to this
Agreement.

            

    

     

    
      	
              14.4

            	
              Subcontractor's
      Key Personnel for this Agreement
are:

            

    

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 8 of
32

        
          

        

      

      
         

      

    

     

    
      
        
          	
                  NAME

                	
                  TITLE

                
	
                  Jason
      Gall

                	
                  Director
      of Research, Head of HIV

                
	 
      	 
      

        

      

    

    

    
      15.0  ASSIGNMENT

    

    Neither
this Agreement nor any interest herein may be assigned, in whole or in part,
without the prior written consent of SAIC-F except that the Subcontractor shall
have the right to assign this Agreement to any successor of such party by way of
merger or consolidation or the acquisition of substantially all of the business
and assets of the Subcontractor relating to the subject matter of this
Agreement.  This right shall be retained provided that such successor
shall expressly assume all of the obligations and liabilities of the
Subcontractor under this Agreement, and that the Subcontractor shall remain
liable and responsible to SAIC-F for the performance and observance of all such
obligations.

     

    In the
event SAIC-F's Prime Contract with the Government is succeeded by a successor
contractor selected by the Government, this Agreement may be assigned to the
successor contractor and timely written notice will be provided to
Subcontractor.

     

    
      16.0  INSURANCE
REQUIREMENTS

    

    Prior to
award, the Subcontractor must provide Certificates of Insurance, evidencing that
the required insurance coverages required below are in force and providing not
less than thirty days written notice prior to any cancellation or restrictive
modification of the policies.  In addition, the Certificate of
Insurance shall 1) certify that the Subcontractor is insured for the period of
performance of this Agreement, 2) shall name "SAIC-Frederick, Inc." as
"Additionally Named Insured" and, 3) shall identify this Agreement by number and
brief description.

     

    If at any
time the period of performance of this Agreement the insurance coverage lapses
or is cancelled, the Subcontractor will immediately notify SAIC-Frederick,
Inc.  The below required coverages and their limits in no way lessen
nor affect Subcontractor's other obligations or liabilities set forth in this
Agreement.

     

    Subcontractor
agrees to purchase and maintain at its own expense the following insurance
coverages with minimum limits as stated:

     

    
      	
              a)  

            	
              Statutory
      Workers' Compensation and Employer's Liability in an amount no less than
      that required by statute in the state of subcontract performance covering
      its employees, including a waiver of subrogation obtained from the carrier
      in favor of SAIC-F;

            

    

    
      	
              b)  

            	
              Commercial
      General Liability in an amount no less than $1 Million per each occurrence
      and $2 Million in this Aggregate covering bodily injury, broad form
      property damage, personal injury, products and completed operations,
      contractual liability and independent contractors'
      liability.  SAIC-F, its officers and employees shall be included
      as Additional Insureds and a waiver of subrogation shall be obtained from
      the carrier in favor of SAIC-F;

            

    

    
      	
              c)  

            	
              Automobile
      Liability in an amount no less than $1 Million Combined Single Limit for
      Bodily Injury covering use of all owned, non-owned, and hired
      vehicles.

            

    

    
      	
              d)  

            	
              Professional
      Liability in an amount no less than $1 Million per occurrence covering
      damages caused by any acts, errors, and omissions arising out of the
      professional services performed by Subcontractor, or any person for whom
      the Subcontractor is legally liable.  To the extent that
      coverage for Subcontractor's services are not excluded in b) above by
      virtue of being deemed not of a professional nature, this requirement does
      not apply

            

    

    
      	
              e)  

            	
              All-Risk
      Property Insurance in an amount adequate to replace property, including
      supplies covered by this Agreement, of SAIC-F and/or SAIC-F's customer
      that may be in the possession or control of
      Subcontractor.  SAIC-F shall be named as a Loss Payee with
      respect to loss or damage to said property and/or supplies furnished by
      SAIC-F.

            

    

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 9 of
32

        
          

        

      

      
         

      

    

     

    The
required insurance coverages above shall be primary and non-contributing with
respect to any other insurance that may be maintained by SAIC-F and
notwithstanding any provision contained herein, Subcontractor, and its
employees, agents, representatives, consultants, subcontractors and suppliers,
are not insured by the SAIC-F, and are not covered under any policy of insurance
that the SAIC-F has obtained or has in place.

     

    Any
self-insured retentions, deductibles and exclusions in coverage in the policies
required under this Article shall be assumed by, for the account of, and at the
sole risk of Subcontractor which provides the insurance and to the extent
applicable shall be paid by Subcontractor.  In no event shall the
liability of Subcontractor be limited to the extent of any insurance or the
minimum limits required herein.

     

    
      17.0  INDEMNIFICATION

    

    Subcontractor
shall indemnify, defend and hold harmless SAIC-F from and against any and all
claims, liabilities, damages, losses, causes of action, lawsuits, costs and
expenses, including reasonable attorneys' fees and litigation costs incurred in
connection therewith and regardless of legal theory (hereinafter referred to as
"claims"), occasioned wholly or in part by any act or omission of Subcontractor
or any of its lower tiers, or their employees, agents or representatives arising
out of this Agreement.  Notwithstanding the foregoing, Subcontractor's
obligations under this Section shall not apply to any claims where it does not
receive timely notice of the claim or that are finally determined by a court of
competent jurisdiction to be occasioned by the negligence or willful misconduct
of SAIC-F.

     

    
      18.0  INFRINGEMENT
INDEMNITY

    

    Subcontractor
shall, at its expense, indemnify, defend, save and hold SAIC-F and its
successors, affiliates, officers, directors, employees, agents, independent
contractors and customers, and the officers, agents and employees of such
customers (hereinafter collectively referred to in this section as "SAIC-F")
harmless from and against any and all damages, liabilities, penalties, interest
and costs awarded against and reasonable expenses, including without limitation
attorneys' fees that result or arise out of, in whole or part, any claims,
suits, proceedings, actions, causes of action and demands brought against the
SAIC-F asserting that the deliverables, including without delivery, including
without limitation all software, goods or services, or any part thereof,
furnished under this Agreement, or the creation, delivery, use modification,
reproduction, release, performance, display or disclosure, including without
limitation resale or sublicensing thereof, constitutes an infringement of any
U.S. patent, trademark, trade secret, copyright or other proprietary or
intellectual property right or rights of privacy or publicity.  In the
event such goods or services or use thereof are enjoined in whole or in part,
Subcontractor shall at its expense and SAIC-F's option undertake one of the
following: (i) obtain for SAIC-F the right to continue the use of such goods or
services; (ii) in a manner acceptable to SAIC-F, substitute equivalent goods or
services or make modifications thereto so as to avoid such infringement and
extend this indemnity thereto; or (iii) refund to SAIC-F an amount equal to the
purchase price for such goods or services plus any excess costs or expenses
incurred in obtaining substitute goods or services from another
source.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 10
of 32

        
          

        

      

      
         

      

    

     

    Notwithstanding
this Section, should the deliverables or portion thereof be held to constitute
an infringement and use as contemplated by this Agreement be enjoined or be
threatened to be enjoined, Subcontractor shall notify SAIC-F and immediately, at
Subcontractor's expense; (i) procure for SAIC-F the right to continue to use the
deliverables or portion thereof with a version that is non-infringing, provided
that the replacement or modified version meets any applicable specifications to
SAIC-F's satisfaction.  If (i) or (ii) are not available to
Subcontractor, in addition to any damages or expenses reimbursed under this
section, Subcontractor shall refund to SAIC-F all amounts paid to Subcontractor
by SAIC-F under this Agreement.

     

    
      19.0  CONFIDENTIAL
INFORMATION

    

    Subcontractor
shall not at any time, up to three years after expiration or termination of this
Agreement, use or disclose to any person for any purpose other than to perform
this Agreement, any information it receives, directly or indirectly from SAIC-F
in connection with this Agreement, except information that is or becomes
publicly available, or is rightfully received by Subcontractor from a third
party without restriction.  Upon request by SAIC-F, Subcontractor
shall return to SAIC-F all documentation and other material containing such
information.

     

    
      20.0  DISPUTES

    

    
      	
              20.1

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

            

    

     

    If, as a
result of any decision or judgment which is binding upon Subcontractor and
SAIC-F, as provided above, SAIC-F 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 the SAIC-F has reimbursed or paid Subcontractor, Subcontractor shall, on
demand, promptly repay such amount to SAIC-F.  Additionally, pending
the final conclusion of any appeal hereunder, Subcontractor shall, on demand
promptly repay any such amount to SAIC-F.  SAIC-F's maximum liability
for any matter connected with or related to this Agreement which was properly
the subject of a claim against the Government under the Prime Contract shall not
exceed the amount of the SAIC-F's recovery from the Government.

     

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

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 11
of 32

        
          

        

      

      
         

      

    

     

    Any
dispute not addressed in Section 20.1 above, will be subject to Section 20.2
below.

     

    
      	
              20.2

            	
              SAIC-F
      and Subcontractor agree to first enter into negotiations to resolve any
      controversy, claim or dispute ("dispute") arising under or relating to
      this Agreement.  The parties agree to negotiate in good faith to
      reach a mutually agreeable resolution of such dispute within a reasonable
      period of time.  If good faith negotiations are unsuccessful,
      SAIC-F and Subcontractor agree to resolve the dispute by binding and final
      arbitration in accordance with the Commercial Arbitration Rules of the
      American Arbitration Association then in effect.  The
      arbitration shall take place in the County of Frederick, State of
      Maryland.  The arbitrator(s) shall be bound to follow the
      provisions of this Agreement in resolving the dispute, and may not award
      punitive damages.  The decision of the arbitrator(s) shall be
      final and binding on the parties, and any award of the arbitrator(s) may
      be entered or enforced in any court of competent
    jurisdiction.

            

    

     

    Subcontractor
hereby waives any immunity, sovereign or otherwise, that it would otherwise have
to such jurisdiction and agrees that its rights, obligations, and liabilities
hereunder shall be determined in the same manner and to the same extent as those
of a private litigant under like circumstances.

     

    All costs
of the arbitration shall be shared equally between the Parties, but the Parties
specifically agree that each Party shall bear the expense of any costs incurred
by it for its own counsel, experts, witnesses, preparation of documents,
presentations, and logistics related to the proceedings.

     

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

     

    
      21.0  TERMINATION

    

    
      	
              21.1

            	
              Termination
      for Convenience

            

    

     

    
      	
               
      

            	
              21.1.1

            	
              Upon
      direction by the Government, SAIC-F shall have the right to terminate this
      Agreement or associated Task Orders by providing written notice to
      Subcontractor.  Upon receiving notice of such termination,
      Subcontractor shall:

            

    

    
      	
              a.  

            	
              stop
      all work on this Agreement on the date and to the extent
      specified;

            

    

    
      	
              b.  

            	
              place
      no further contracts hereunder except as may be necessary for completing
      such portions of the Agreement that have not been terminated;
      and

            

    

    
      	
              c.  

            	
              terminate
      all contracts to the extent that they may relate to portions of the
      Agreement that have been terminated;
and

            

    

    
      	
              d.  

            	
              protect
      all property in which SAIC-F has or may acquire an interest and deliver
      such property to SAIC-F.

            

    

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 12
of 32

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              21.1.2

            	
              Within
      twenty (20) business days from such termination, Subcontractor may submit
      to SAIC-F its written claim for termination charges in the form prescribed
      by SAIC-F.  Failure to submit such claim within such time shall
      constitute a waiver of all claims and a release of all SAIC-F's liability
      arising out of such termination.  Under no circumstances shall
      Subcontractor be entitled to anticipatory or lost
  profits.

            

    

     

    
      	
               
      

            	
              21.1.3

            	
              SAIC-F
      reserves the right to verify claims hereunder and Subcontractor shall make
      available to SAIC-F, upon its request, all relevant, non-proprietary books
      and records for inspection and audit (e.g. time cards and
      receipts).  If Subcontractor fails to afford SAIC-F its rights
      hereunder, Subcontractor shall be deemed to have relinquished its
      claim.

            

    

     

    
      	
              21.2

            	
              Termination
      for Default

            

    

     

    
      	
               
      

            	
              21.2.1

            	
              SAIC-F
      may, by written notice of default to Subcontractor, terminate the whole or
      any part of this Agreement, in any one of the following
      circumstances:

            

    

    
      	
              a.  

            	
              Subcontractor
      fails to make delivery of the goods or to perform the services within time
      specified herein or any extension thereof;
or

            

    

    
      	
              b.  

            	
              Subcontractor
      fails to perform any of the other provisions of this Agreement in
      accordance with its terms and does not cure such failure within a period
      of ten (10) days after receipt of notice from SAIC-F specifying such
      failure; or

            

    

    
      	
              c.  

            	
              Subcontractor
      becomes insolvent or the subject of proceedings under any law relating to
      the relief of debtors or admits in writing its inability to pay its debts
      as they become due.

            

    

     

    
      	
               
      

            	
              21.2.2

            	
              If
      this Agreement is so terminated, SAIC-F may procure or otherwise obtain,
      upon such terms and in such manner as SAIC-F may deem appropriate, goods
      or services similar to those terminated.  Subcontractor shall be
      liable to SAIC-F for any excess costs of such similar supplies or
      services.

            

    

     

    
      	
               
      

            	
              21.2.3

            	
              Subcontractor
      shall transfer title and deliver to SAIC-F, in the manner and to the
      extent requested in writing by SAIC-F at or after termination, such
      complete or partially completed articles, property, materials, parts,
      tools, fixtures, plans, drawings, information and contract rights as
      Subcontractor has produced or acquired for the performance of the
      terminated part of this Agreement, and SAIC-F will pay Subcontractor the
      contract price for completed articles delivered to and accepted by SAIC-F
      and the fair value of the other property of Subcontractor so requested and
      delivered.

            

    

     

    
      	
               
      

            	
              21.2.4

            	
              Subcontractor
      shall continue performance of this Agreement to the extent not
      terminated.  SAIC-F shall have no obligation to Subcontractor
      with respect to the terminated part of this Agreement except as herein
      provided.

            

    

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 13
of 32

        
          

        

      

      
         

      

    

     

    
      22.0  SAIC-F
FURNISHED DATA AND MATERIALS

    

     

    All items
furnished, loaned or bailed by SAIC-F hereunder, or fabricated, manufactured,
purchased, or otherwise acquired by Subcontractor for the performance of this
Agreement and specifically charged to SAIC-F, are the property of
SAIC-F.

     

    Upon
completion, expiration or termination of this Agreement, Subcontractor shall
return all such items in good condition, reasonable wear only excepted, together
with all spoiled and surplus items to SAIC-F, or make such other disposition
thereof as may be directed or approved by SAIC-F.  Subcontractor
agrees to replace, at its expense, all such items not so
returned.  Subcontractor shall make no charge for any storage,
maintenance or retention of such items.  Subcontractor shall bear all
risk of loss for all such items in Subcontractor's possession.

     

    Subcontractor
also agrees to use any designs or data contained or embodied in such items in
accordance with any restrictive legends placed on such items by SAIC-F or any
third party.  If SAIC-F furnishes any material, for fabrication
hereunder, Subcontractor agrees: (i) not to substitute any other material for
such fabrication with SAIC-F's prior written consent, and (ii) that title to
such material shall not be affected by incorporation in or attachment to any
other property.

     

    
      23.0  PUBLICATION/
PUBLICITY AND PRESS RELEASE

    

    
      	
              23.1

            	
              Publication/Publicity.  Unless
      otherwise specified in this contract, the Subcontractor is encouraged to
      publish the results of its work under this Agreement.  A copy of
      each article submitted by the Subcontractor for publication shall be
      promptly sent to the SAIC-F Technical Representative and shall also inform
      the same when the article or other publication is
      published.  Additionally, final manuscripts shall be submitted
      electronically to the NIH National Library of Medicine's (NLM) PubMed
      Central (PMC) (Available at: http://www.pubmedcentral.nih.gov).  The
      subcontractor shall acknowledge the support of the National Institutes of
      Health whenever publicizing the work under this Agreement in any media by
      including an acknowledgment substantially as
  follows:

            

    

     

    
      	
               
      

            	
              23.1.1

            	
              For
      Manuscripts: "This
      project has been funded in whole or in part with Federal funds from the
      National Cancer Institute, National Institutes of Health, under Contract
      No.  HHSN261200800001E.  The content of this
      publication does not necessarily reflect the views of policies of the
      Department of Health and Human Services, nor does mention of trade names,
      commercial products, or organizations imply endorsement by the U.S.
      Government."

            

    

     

    For
Abstracts: (due to space limitations): "Funded by NCI Contract
No.  HHSN261200800001E."

     

    
      	
               
      

            	
              23.1.2

            	
              Authors
      of manuscripts/abstracts have the option of using any or all of the
      following affiliations:

            

    

     

    Option 1)
Government laboratory name

    Option 2)
SAIC-Frederick, Inc. laboratory name

    Option 3)
SAIC-Frederick, Inc.  directorate name

     

    The
selected option(s) shall be inserted into the following statement:

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 14
of 32

        
          

        

      

      
         

      

    

     

    Author(s)
Name, (Option 1, 2, and/or 3), SAIC-Frederick, Inc., NCI-Frederick, Frederick,
Maryland 21702.

     

    
      	
               
      

            	
              23.1.3

            	
              The
      following additional statement is to be included in manuscripts when
      animal studies have been performed:

            

    

     

    "NCI-Frederick
is accredited by AAALAC International and follows the Public Health Service
Policy for the Care and Use of Laboratory Animals.  Animal care was
provided in accordance with the procedures outlined in the Guide for Care and Use of Laboratory
Animals (National Research Council; 1996; National Academy Press;
Washington, D.C.)."

     

    
      	
              23.2

            	
              Press
      Releases.  The Subcontractor shall not, without prior
      written approval of the SAIC-F Contracting Officer, issue press releases
      describing or otherwise referring to this Agreement or the efforts
      undertaken as a result thereof.  Requests for approval shall be
      submitted 30 calendar days prior to any requested release
      date.

            

    

     

    Any
approved press releases as well as, requests for proposals, bid solicitations
and other documents describing projects or programs funded in whole or in part
with Federal money shall clearly state: (1) the percentage of the total costs of
the program or project which will be financed with Federal money; (2) the dollar
amount of Federal funds for the project or program; and (3) the percentage and
dollar amount of the total costs of the project or program that will be financed
by nongovernmental sources.

     

    
      24.0  GENERAL
RELATIONSHIP

    

    The
Subcontractor is not an employee of SAIC-F for any purpose
whatsoever.  Subcontractor agrees that in all matters relating to this
Agreement 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 Agreement.  Subcontractor shall have no right,
power or authority to create any obligation, expressed or implied, on behalf of
SAIC-F and/or the Government and shall have no authority to represent SAIC-F as
an agent.

     

    
      25.0  NON-WAIVER
OF RIGHTS

    

    The
failure of SAIC-F 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 Agreement shall not affect
the validity of other parts hereof.

     

    
      26.0  LEGAL
CONSTRUCTION AND INTERPRETATIONS

    

    This
Agreement shall be governed by and interpreted in accordance with the principles
of federal contract law, and to the extent that federal contract law is not
dispositive, and the state law becomes applicable, the laws of the State of
Maryland shall apply without regard to its conflict or choice of law
provisions.

     

    
      27.0  EXPORT
CONTROL COMPLIANCE FOR FOREIGN PERSONS

    

    Subcontractor
shall not, nor shall Subcontractor authorize or permit its employees, agents or
lower tiers to disclose, export or re-export any SAIC-F information, or any
process, product or services that is produced under this Agreement, without
prior notification to SAIC-F and complying with all applicable Federal, State
and local laws, regulations and ordinances, including the regulations of the
U.S. Department of Commerce and/or the U.S. Department of State.  In
addition, Subcontractor agrees to immediately notify SAIC-F if Subcontractor is
listed on any of the Department of State, Treasury or Commerce proscribed
persons or destinations lists, or if Subcontractor's export privileges are
otherwise denied, suspended or revoked in whole or in part.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 15
of 32

        
          

        

      

      
         

      

    

     

    Under its
contract with NCI-Frederick, SAIC-F conducts research activities that include
export-controlled technology that cannot be readily
segregated.  SAIC-F may require Subcontractor (including any lower
tiers) to place restrictions on their work force performing onsite at
SAIC-Frederick, Inc. to protected individuals as established under the
guidelines of the Commerce Department Export Administration Regulations (EAR)
and the State Department International Traffic in Arms Regulations
(ITAR).

     

    Contractors
(including any lower tiers) may be required to disclose the status of personnel
proposed to perform work onsite prior to award.

     

    Contractors
shall include in all agreements and related documents with lower tiers, notice
to third parties that the export of any process, goods and/or technical data
from the United States may require an export control license from the U.S.
Government and that, failure to obtain such export control license may result in
termination of Subcontract, and/or criminal liability under U.S.
laws.

     

    
      28.0  STANDARDS
OF BUSINESS ETHICS & CONDUCT

    

    SAIC-F
believes in fair and open competition and is committed to conducting its
business fairly, impartially and in an ethical and proper
manner.  SAIC-F's expectation is that Subcontractor also will conduct
its business fairly, impartially and in an ethical and proper
manner.  If Subcontractor has cause to believe that SAIC-F or any
employee or agent of SAIC-F has acted improperly or unethically under this
agreement/Subcontract, Subcontractor shall report such behavior to the SAIC
Ethics Hotline (800) 435-4234.  Copies of the SAIC code of ethics and
contacts for such reports are available on http://www.saic.com
under Corporate Governance.

     

    
      29.0  AUDIT

    

    At any
time before final payment SAIC-F 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
SAIC-F not to have been properly payable in accordance with the payment terms of
this Agreement.  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.

     

    
      30.0  COMPLIANCE
WITH LAWS AND REGULATIONS

    

    Subcontractor
shall submit all certifications required by SAIC-F under this Agreement and
shall at all times, at its own expense, comply with all applicable Federal,
State and local laws, ordinances, administrative orders, rules or
regulations.

     

    
      31.0  GIFTS

    

    Subcontractor
shall not make or offer a gratuity or gift of any kind to SAIC-F's employees or
their families.  Subcontractor should note that the providing of gifts
or attempting to provide gifts under government subcontracts might be a
violation of the Anti-Kickback Act of 1986 (4 U.S.C. 51-58).

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 16
of 32

        
          

        

      

      
         

      

    

     

    
      32.0  MARYLAND
SALES AND USE TAX

    

    The State
of Maryland has issued Direct Payment Permit #3, effective date August 29, 1996;
a copy of this Permit is available upon request.  As a holder of a
Direct Payment Permit, SAIC-F is authorized to make direct payment of sales and
use tax to the State of Maryland.  Accordingly, Subcontractors that
provide goods and services to SAIC-F are relieved from collecting sales tax from
SAIC-F.  Therefore, Subcontractor shall not place a separate line item
for State of Maryland sales and use tax on any invoice sent to
SAIC-F.  Please note that the Permit is not to be used by
Subcontractor to make purchases free of sales tax, nor shall the Permit be
transferred or assigned.

     

    
      33.0  NOTICE
OF DELAY

    

    Subcontractor
agrees to immediately notify SAIC-F in writing of any actual or potential delay
in Subcontractors performance under this Agreement.  Such notice
shall, at a minimum, describe the cause, effect, duration and corrective action
proposed by Subcontractor to address the problem.  Subcontractor shall
give prompt written notice to the SAIC-F of all changes to such
conditions.  This notification shall be informational only, and
compliance with this provision shall not be construed as a waiver by SAIC-F of
any delivery schedule or date or of any rights or remedies provided by law or
under this Agreement.

     

    
      34.0  NOTIFICATION
OF DEBARMENT/SUSPENSION

    

    By
acceptance of this Agreement either in writing or by performance, Subcontractor
certifies that as of the date of award of this Agreement neither the
Subcontractor, lower tiers, nor any of its principals, is debarred, suspended,
or proposed for debarment by the Federal Government.  Further,
Subcontractor shall provide immediate written notice to the SAIC-F Contracting
Officer in the event that during performance of this Agreement the Subcontractor
or any of its principals is debarred, suspended, or proposed for debarment by
the Federal Government.

     

    
      35.0  SECURITY

    

    Under its
contract with NCI-Frederick, SAIC-F may be required to conduct, on persons
performing work on Government Owned or controlled installations, individual
background checks prior to the commencement of effort.  As part of
this process, information will be required to enable SAIC-F to conduct the
appropriate background checks, including name (including any aliases), daytime
phone number, SSN, date of birth, and country of birth.  Individuals
who are unable or unwilling to provide the required information and/or receive
the required authorizations will not be allowed access to NCI-Frederick or any
controlled premises.

     

    Subcontractor
agrees to comply with the Information Technology (IT) systems security and /or
privacy specifications set forth in the Agreement; the Computer Security Act of
1987; Office of Management and Budget (OMB) Circular A-130, Appendix III,
"Security of Federal Automated Information Systems", and the DHHS Automated
Information Systems Security Program (AISSP) Handbook, which may be found at the
following websites:

     

    Computer
Security Act of 1987: http://csrc.nist.qov/qroups/SMA/ispab/documents/csa
87.txt,

    OMB A-130
Appendix III: http://www.whitehouse.qov/omb/circulars
a130 al 30trans4/,

    DH HS Al
SSP Handbook: http://intranet.hhs.qov/infosec/docs/policies
quides/ISPP/isp toc.htm

     

    Subcontractor
further agrees to include this provision in any Order awarded pursuant to the
Agreement.  Failure to comply with these requirements may constitute
cause for termination under Section 21 of these Terms and
Conditions.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 17
of 32

        
          

        

      

      
         

      

    

     

    Subcontractor
shall be responsible for properly protecting all information used, gathered, or
developed as a result of the Agreement.  Subcontractor shall establish
and implement appropriate administrative, technical, and physical safeguards to
ensure the security and confidentiality of sensitive Government information,
data and/or equipment.  Any Subcontractor employee who may have access
to sensitive information under this agreement shall complete the form entitled,
"Commitment to Protect Non-Public Information — Contractor Agreement," which may
be found at the following website: http://irm.cit.nih.qov/securitv/Nondisclosure.pdf

     

    A copy of
each signed and witnessed Non-Disclosure agreement shall be submitted to
SAIC-F's Contractual Representative prior to performing any work under the
Agreement.

     

    Subcontractor
shall assure that each employee has completed the NIH Computer Security
Awareness Training (http://irtsectraining.nih.gov)
prior to performing any work under this Agreement.

     

    Subcontractor
shall maintain and submit to the Contracting Officer a listing by name and title
of each individual working under this Agreement, which has completed the NIH
required training.  Any additional security training completed by
Seller staff shall be included on this listing.

     

    In
addition, during all activities and operations on Government premises,
Subcontractor shall comply with DHHS, including NIH, rules of
conduct.  Should Subcontractor have questions concerning these
requirements or need of procedural guidance to ensure compliance it may contact
SAIC-F's Contractual Representative.

     

    
      36.0  TOBACCO
USE AT THE NCI-FREDERICK

    

    In
accordance with the Department of Health and Human Services (HHS) directive, the
NCI-Frederick campus is a tobacco free workplace.  Use of tobacco in
any form is prohibited on the entire NCI-Frederick campus.  This
includes personal vehicles while on NCI-Frederick property and all government
vehicles, regardless of their location.

     

    This
policy applies to all employees, Government and Contractor, visitors,
subcontractors, vendors and guests of the NCI-Frederick, and extends to all HHS
owned or leased facilities and properties external to the NCI-Frederick campus
where the sole tenant(s) are HHS and/or SAIC-F employees.

     

    
      37.0  SEVERABILITY

    

    If any
term contained in this Agreement is held or finally determined to be invalid,
illegal or unenforceable in any respect , in whole or in part, such term shall
be severed from this Subcontract, and the remaining terms contained herein shall
continue in force and effect, and shall in no way be affected, prejudiced or
disturbed thereby.

     

    
      38.0  INTERPRETATION

    

    The
captions and headings used in this Subcontract are solely for the convenience of
the parties, and shall not be used in the interpretation of the text of this
Agreement.  Each party has read and agreed to the specific language of
this Agreement; therefore no conflict, ambiguity or doubtful interpretation
shall be construed against the drafter.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 18
of 32

        
          

        

      

      
         

      

    

     

    
      39.0  ELECTRONIC
AND INFORMATION TECHNOLOGY STANDARDS

    

    Subcontractor
agrees to comply with Section 508 of the Rehabilitation Act of 1973 (29 U.S.C.
794d) as amended by P.L. 105-220 under Title IV (Rehabilitation Act Amendments
of 1998).  Electronic and Information Technology (EIT) developed,
procured, maintained, and/or used under this Agreement shall be in compliance
with the "Electronic and Information Technology Accessibility Standards" set
forth by the Architectural and Transportation Barriers Compliance Board (also
referred to as the "Access Board") in 36 CFR Part 1194.  The complete
text of Section 508 Final Standards can be accessed at
http://www.section508.gov/.  Applicable standards to this requirement
are set forth in 36 CFR Part 1194.21 through 26.

     

    Subcontractor
further agrees to include this provision in any lower-tier subcontract awarded
pursuant to the Agreement.  Failure to comply with these requirements
may constitute cause for termination under Section 21 of this
Agreement.

     

    
      40.0  ACCEPTANCE
OF SUBCONTRACT AND MODIFICATION OF TERMS

    

    Acceptance
of this Agreement by Subcontractor may be made by signing the acknowledgement
copy hereof or by partial performance hereunder, and any such acceptance shall
constitute an unqualified agreement to all terms and conditions set forth herein
unless otherwise modified in writing by the parties.  Any additions,
deletions or differences in the terms proposed by Subcontractor are objected to
and hereby rejected, unless SAIC-F agrees otherwise in writing.  No
additional or different terms and conditions proposed by the Subcontractor in
accepting this Agreement shall be binding upon SAIC-F unless accepted in writing
by SAIC-F and no other addition, alteration or modification to, and no waiver of
any of the provisions herein contained shall be valid unless made in writing and
executed by SAIC-F and Subcontractor.  Subcontractor shall perform in
accordance with this Agreement, including all attachments, and any Orders issued
hereunder.

     

    
      41.0  ORGANIZATIONAL
CONFLICT OF INTEREST

    

    The
Subcontractor certifies that no financial, contractual, organizational, or other
interest exists relating to the work under this agreement that would constitute
an Organizational Conflict of Interest or otherwise cause the Subcontractor to
be unable or potentially unable to render impartial assistance or advice, impair
objectivity in performing the work, or create an unfair competitive advantage
for any entity wherein the Subcontractor has an interest.  The
Subcontractor is personally responsible for identifying any such conflict of
interest, or any relationship or actions that might give the appearance that a
conflict of interest exists or could reasonably be viewed as affecting the
Subcontractor's objectivity in performing work under this
Agreement.  By signature the Subcontractor certifies the understanding
of the above and that no Organizational Conflict of Interest exists that would
affect this Agreement.  The Subcontractor also indemnifies or
otherwise holds harmless SAIC-F should an Organizational Conflict of Interest
become apparent (not previously disclosed) during the life of this
Agreement.

     

    
      42.0  PROHIBITION
ON CONTRACTOR INVOLVEMENT WITH TERRORIST ACTIVITIES

    

    The
Subcontractor acknowledges that U.S. Executive Orders and Laws, including but
not limited to E.O. 13224 and P.L. 107-56, prohibit transactions with and the
provision of resources and support to, individuals and organizations associated
with terrorism.  It is the legal responsibility of the Subcontractor
to ensure compliance with these Executive Orders and Laws.  This
clause must be included in all subcontracts issued under this
Agreement.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 19
of 32

        
          

        

      

      
         

      

    

     

    
      43.0  COST
PRINCIPLES AND PROCEDURES

    

    Subcontractor
agrees that to the extent applicable, costs allocated to this Agreement shall be
in full compliance with FAR Subpart 31.2 Subpart 31.3 for Educational
Institutions) and the applicable agency supplements thereto, if
any.  In the event such compliance is not maintained, Subcontractor
agrees to compensate SAIC-F to the full extent of any prices or costs, including
any penalties or interest that are determined by SAIC-F's customer to be
unallowable or unreasonable or not allocable, under SAIC-F's contract with its
customer.

     

    
      44.0  CONTINUED
BAN ON FUNDING OF HUMAN EMBRYO RESEARCH

    

    Pursuant
to the current HHS annual appropriations act, the Subcontractor shall not use
subcontract funds for (1) the creation of a human embryo or embryos for research
purposes; or (2) research in which a human embryo or embryos are destroyed,
discarded, or knowingly subjected to risk of injury or death greater than that
allowed for research on fetuses in utero under 45 CFR 46.204(b) and Section
498(b) of the Public Health Service Act (42 U.S.C. 289g (b)).  The
term "human embryo or embryos" includes any organism, not protected as a human
subject under 45 CFR 46 as of the date of the enactment of this Act, that is
derived by fertilization, parthenogenesis, cloning, or any other means from one
or more human gametes or human diploid cells.  Additionally, in
accordance with a March 4, 1997 Presidential Memorandum, Federal funds provided
under this HHSN subcontract, may not be used for cloning of human
beings.

     

    
      45.0  NEEDLE
EXCHANGE

    

    Subcontract
funds shall not be used to carry out any program of distributing sterile needles
or syringes for the hypodermic injection of any illegal drug in accordance with
Public Law and DHHS annual appropriations act.

     

    
      46.0  FAR/HHSAR
CLAUSES APPLICABLE TO THIS AGREEMENT

    

    The
clauses in FAR Subpart 52.2 and Department of Health and Human Services
Acquisition Regulations (HHSAR) indicated below and in effect on the date of
this Agreement are incorporated herein and made a part of this Agreement in full
force and effect as if provided in full text.  To the extent that an
earlier version of any such clause is included in the SAIC-F's Prime Contract
under which this Agreement is issued, the date of the clause as it appears in
such Prime Contract shall be controlling and said version shall be incorporated
herein.

     

    Unless a
purposeful distinction is made clear and the context of the clause requires
retention of the original definition, the term "Contractor" shall mean
Subcontractor, the term "Contract" shall mean this Agreement, the term
"Subcontractor" shall mean subcontractors of Seller at any tier, and the terms
"Government", "Contracting Officer" and equivalent phrases shall mean
SAIC-Frederick, Inc. and SAIC-Frederick's Contracting Officer,
respectively.  It is intended that the referenced clauses shall apply
to Subcontractor in such manner as is necessary to reflect the position of
Seller as a Subcontractor to SAIC-Frederick, Inc. to insure Subcontractor's
obligations to SAIC-Frederick, Inc. and to the United States Government, and to
enable SAIC-Frederick, Inc. to meet its obligations under its Prime
Contract.

     

    Full text
of the referenced clauses may be found in the FAR (Code of Federal Regulation
[CFR] Title 48), available at http://www.arnet.gov/far/
and in the HHSAR (Health and Human Services Acquisition Regulation) available at
http://www.hhs.gov/oamp/policies/index.htmI

     

    
      	
              46.1

            	
              The
      following clauses are applicable to this Agreement at the dollar values
      indicated:

            

    

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 20
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                  FAR/HHSAR

                	
                  Clause
      Title

                
	
                  52.202-1

                	
                  Definitions
      (Over $100,000)

                
	
                  52.203-3

                	
                  Gratuities
      (Over $100,000)

                
	
                  52.203-5

                	
                  Covenant
      Against Contingent Fees (Over §100,000)

                
	
                  52.203-6

                	
                  Restrictions
      on Subcontractor Sales to the Government (Over
$100,000)

                
	
                  52.203-7

                	
                  Anti-Kickback
      Procedures (Over $100,000)

                
	
                  52.203-8

                	
                  Cancellation,
      Rescission, and Recovery of Funds for Illegal or Improper Activity (Over
      $100,000)

                
	
                  52.203-10

                	
                  Price
      or Fee Adjustment for Illegal or Improper Activity (Over
      $100,000)

                
	
                  52.203-12

                	
                  Limitation
      on Payments to Influence Certain Federal Transactions (Over
      $100,000)

                
	
                  52.204-4

                	
                  Printed
      or Copied Double-Sided on Recycled Paper (Over
$100,000)

                
	
                  52.209-6

                	
                  Protecting
      the Government's Interests When Subcontracting With Contractors Debarred,
      Suspended, or Proposed for Debarment (Over $30,000)

                
	
                  52.215-2

                	
                  Audit
      and Records - Negotiation (Over $100,000), Alternate II (Apr
      1998)

                
	
                  52.216-7

                	
                  Allowable
      Cost and Payment

                
	
                  52.216-8

                	
                  Fixed
      Fee

                
	
                  52.219-8

                	
                  Utilization
      of Small Business Concerns (Over $100,000)

                
	
                  52.219-9

                	
                  Small
      Business Subcontracting Plan (Over $550,000)

                
	
                  52.219-16

                	
                  Liquidated
      Damages - Subcontracting Plan (Over $550,000)

                
	
                  52.222-21

                	
                  Prohibition
      of Segregated Facilities

                
	
                  52.222-26

                	
                  Equal
      Opportunity

                
	
                  52.222-35

                	
                  Equal
      Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era,
      and Other Eligible Veterans (Over $100,000)

                
	
                  52.222-36

                	
                  Affirmative
      Action for Workers with Disabilities

                
	
                  52.222-37

                	
                  Employment
      Reports on Special Disabled Veterans, Veterans of the Vietnam Era, and
      Other Eligible Veterans (Over $100,000)

                
	
                  52.222-50

                	
                  Combating
      Trafficking in Persons

                
	
                  52.223-6

                	
                  Drug-Free
      Workplace

                
	
                  52.223-14

                	
                  Toxic
      Chemical Release Reporting (Over $100,000)

                
	
                  52.225-1

                	
                  Buy
      American Act - Supplies

                
	
                  52.225-13

                	
                  Restrictions
      on Certain Foreign Purchases

                
	
                  52.232-9

                	
                  Limitation
      on Withholding of Payments

                
	
                  52.232-20

                	
                  Limitation
      of Cost

                
	
                  52.237-3

                	
                  Continuity
      of Services

                
	
                  52.242-13

                	
                  Bankruptcy
      (Over $100,000)

                
	
                  52.244-5

                	
                  Competition
      in Subcontracting (Over $100,000)

                
	
                  352.202-1

                	
                  Definitions
      - with Alternate paragraph (h) (Jan 2006)

                
	
                  352.216-72

                	
                  Additional
      Cost Principles

                
	
                  352.228-7

                	
                  Insurance
      - Liability to Third Persons

                
	
                  352.232-9

                	
                  Withholding
      of Contract Payments

                
	
                  352.233-70

                	
                  Litigation
      and Claims

                
	
                  352.242-71

                	
                  Final
      Decisions on Audit Findings

                
	
                  352.249-14

                	
                  Excusable
      Delays

                
	
                  352.270-10

                	
                  Anti-Lobbying
      (Over $100,000)

                

        

      

    

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 21
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              46.2

            	
              The
      following clause(s) are provided in full text as applicable to this BOA
      and Task Orders:

            

    

     

    FAR
52.204-11 American Recovery and Reinvestment Act—Reporting Requirements (Mar
2009).

    (a) Definitions.  As
used in this clause—

    "Contract",
as defined in FAR 2.101, means a mutually binding legal relationship obligating
the seller to furnish the supplies or services (including construction) and the
buyer to pay for them.  It includes all types of commitments that
obligate the Government to an expenditure of appropriated funds and that, except
as otherwise authorized, are in writing.  In addition to bilateral
instruments, contracts include (but are not limited to) awards and notices of
awards; job orders or task letters issued under basic ordering agreements;
letter contracts; orders, such as purchase orders, under which the contract
becomes effective by written acceptance or performance; and bilateral contract
modifications.  Contracts do not include grants and cooperative
agreements covered by 31 U.S.C. 6301, et seq.  For discussion of
various types of contracts, see FAR Part 16.

    "First-tier
subcontract" means a subcontract awarded directly by a Federal Government prime
contractor whose contract is funded by the Recovery Act.

    "Jobs
created" means an estimate of those new positions created and filled, or
previously existing unfilled positions that are filled, as a result of funding
by the American Recovery and Reinvestment Act of 2009 (Recovery
Act).  This definition covers only prime contractor positions
established in the United States and outlying areas (see definition in FAR
2.101).  The number shall be expressed as "full-time equivalent"
(FTE), calculated cumulatively as all hours worked divided by the total number
of hours in a full-time schedule, as defined by the contractor.  For
instance, two full-time employees and one part-time employee working half days
would be reported as 2.5 FTE in each calendar quarter.

    "Jobs
retained" means an estimate of those previously existing filled positions that
are retained as a result of funding by the American Recovery and Reinvestment
Act of 2009 (Recovery Act).  This definition covers only prime
contractor positions established in the United States and outlying areas (see
definition in FAR 2.101).  The number shall be expressed as "full-time
equivalent" (FTE), calculated cumulatively as all hours worked divided by the
total number of hours in a full-time schedule, as defined by the
contractor.  For instance, two full-time employees and one part-time
employee working half days would be reported as 2.5 FTE in each calendar
quarter.

    "Total
compensation" means the cash and noncash dollar value earned by the executive
during the contractor's past fiscal year of the following (for more information
see 17 CFR 229.402(c)(2)):

    (1) Salary and
bonus.

    (2) Awards of stock, stock options, and
stock appreciation rights.  Use the dollar amount recognized
for financial statement reporting purposes with respect to the fiscal year in
accordance with the Statement of Financial Accounting Standards No. 123 (Revised
2004) (FAS 123R), Shared Based Payments.

    (3) Earnings for services under
non-equity incentive plans.  Does not include group life,
health, hospitalization or medical reimbursement plans that do not discriminate
in favor of executives, and are available generally to all salaried
employees.

    (4) Change in pension
value.  This is the change in present value of defined benefit
and actuarial pension plans.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 22
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    (5) Above-market
earnings on deferred compensation which is not tax-qualified.

    (6) Other
compensation.  For example, severance, termination payments,
value of life insurance paid on behalf of the employee, perquisites or property
if the value for the executive exceeds $10,000.

    (b) This
contract requires the contractor to provide products and/or services that are
funded under the American Recovery and Reinvestment Act of 2009 (Recovery
Act).  Section 1512(c) of the Recovery Act requires each contractor to
report on its use of Recovery Act funds under this contract.  These
reports will be made available to the public.

    (c) Reports
from contractors for all work funded, in whole or in part, by the Recovery Act,
and for which an invoice is submitted prior to June 30, 2009, are due no later
than July 10, 2009.  Thereafter, reports shall be submitted no later
than the 10th day after the end of each calendar quarter.

    (d) The
Contractor shall report the following information, using the online reporting
tool available at www.FederalReporting.gov.

    (1) The
Government contract and order number, as applicable.

    (2) The
amount of Recovery Act funds invoiced by the contractor for the reporting
period.  A cumulative amount from all the reports submitted for this
action will be maintained by the government's on-line reporting
tool.

    (3) A list of
all significant services performed or supplies delivered, including
construction, for which the contractor invoiced in this calendar
quarter.

    (4) Program
or project title, if any.

    (5) A
description of the overall purpose and expected outcomes or results of the
contract, including significant deliverables and, if appropriate, associated
units of measure.

    (6) An
assessment of the contractor's progress towards the completion of the overall
purpose and expected outcomes or results of the contract (i.e., not started,
less than 50 percent completed, completed 50 percent or more, or fully
completed).  This covers the contract (or portion thereof) funded by
the Recovery Act.

    (7) A
narrative description of the employment impact of work funded by the Recovery
Act.  This narrative should be cumulative for each calendar quarter
and only address the impact on the contractor's workforce.  At a
minimum, the contractor shall provide-

    (i) A brief
description of the types of jobs created and jobs retained in the United States
and outlying areas (see definition in FAR 2.101).  This description
may rely on job titles, broader labor categories, or the contractor's existing
practice for describing jobs as long as the terms used are widely understood and
describe the general nature of the work; and

    (ii) An
estimate of the number of jobs created and jobs retained by the prime
contractor, in the United States and outlying areas.  A job cannot be
reported as both created and retained.

    (8) Names and
total compensation of each of the five most highly compensated officers of the
Contractor for the calendar year in which the contract is awarded
if-

    (i) In the
Contractor's preceding fiscal year, the Contractor received—

    (A) 80
percent or more of its annual gross revenues from Federal contracts (and
subcontracts), loans, grants (and subgrants) and cooperative agreements; and
$25,000,000 or more in annual gross revenues from Federal contracts (and
subcontracts), loans, grants (and subgrants) and cooperative agreements;
and

    (ii) The
public does not have access to information about the compensation of the senior
executives through periodic reports filed under section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of
the Internal Revenue Code of 1986.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 23
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    (9) For
subcontracts valued at less than $25,000 or any subcontracts awarded to an
individual, or subcontracts awarded to a subcontractor that in the previous tax
year had gross income under $300,000, the Contractor shall only report the
aggregate number of such first tier subcontracts awarded in the quarter and
their aggregate total dollar amount.

    (10) For any
first-tier subcontract funded in whole or in part under the Recovery Act, that
is over $25,000 and not subject to reporting under paragraph 9, the contractor
shall require the subcontractor to provide the information described in (i),
(ix), (x), and (xi) below to the contractor for the purposes of the quarterly
report.  The contractor shall advise the subcontractor that the
information will be made available to the public as required by section 1512 of
the Recovery Act.  The contractor shall provide detailed information
on these first-tier subcontracts as follows:

    (i) Unique
identifier (DUNS Number) for the subcontractor receiving the award and for the
subcontractor's parent company, if the subcontractor has a parent
company.

    (ii) Name of
the subcontractor.

    (iii) Amount of
the subcontract award.

    (iv) Date of
the subcontract award.

    (v) The
applicable North American Industry Classification System (NAICS)
code.

    (vi) Funding
agency.

    (vii) A
description of the products or services (including construction) being provided
under the subcontract, including the overall purpose and expected outcomes or
results of the subcontract.

    (viii) Subcontract
number (the contract number assigned by the prime contractor).

    (ix) Subcontractor's
physical address including street address, city, state, and
country.  Also include the nine-digit zip code and congressional
district if applicable.

    (x) Subcontract
primary performance location including street address, city, state, and
country.  Also include the nine-digit zip code and congressional
district if applicable.

    (xi) Names and
total compensation of each of the subcontractor's five most highly compensated
officers, for the calendar year in which the subcontract is awarded
if—

    (A) In the
subcontractor's preceding fiscal year, the subcontractor received—

    (1) 80
percent or more of its annual gross revenues in Federal contracts (and
subcontracts), loans, grants (and subgrants), and cooperative agreements;
and

    (2) $25,000,000
or more in annual gross revenues from Federal contracts (and subcontracts),
loans, grants (and subgrants), and cooperative agreements; and

    (B) The
public does not have access to information about the compensation of the senior
executives through periodic reports filed under section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m(a),
78o(d)) or section 6104 of the Internal Revenue Code of 1986

     

    
      47.0  INTELLECTUAL
PROPERTY

    

    
      	
              47.1

            	
              The
      following clauses are applicable to this
  Agreement:

            

    

     

    
      
        
          	
                  FAR

                	
                  Clause
      Title

                
	
                  52.227-1,
      Alt I

                	
                  Authorization
      and Consent

                
	
                  52.227-11

                	
                  Patent
      Rights- Ownership by the Contractor

                
	
                  52.227-14

                	
                  Rights
      in Data- General

                

        

      

    

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 24
of 32

        
          

        

      

      
         

      

    

     

    
      	
              47.2

            	
              The
      following Ianguage is provided in full
text

            

    

     

    
      
        
          	
                  FAR

                	
                  Clause
      Title

                
	
                  52.227-11

                	
                  Patent
      Rights- Ownership by the
Contractor

                

        

      

    

    

    As
prescribed in 27.303(a), insert the following clause:

     

    PATENT
RIGHTS—RETENTION BY THE CONTRACTOR (SHORT FORM) (JUNE 1997)

    (j) Communications.

     

    All
invention disclosures and requests for greater rights shall be sent to the
Contracting Officer.  Additionally, a copy of all invention
disclosures, confirmatory licenses to the government, face page of the patent
applications, waivers and other routine communications should send to the
Contracting Officer and the Director, Office of Extramural Research
Administration, Division of Extramural Inventions and Technology Resources,
National Institutes of Health, 6701 Rockledge Drive, Room 1136, Bethesda, MD
20892-7750 or www.iEdison.gov
citing the SAIC-F contract number HHSN261200800001E.

     

    (End of
clause)

     

    
      48.0  REPORTING
MATTERS INVOLVING FRAUD WASTE AND ABUSE

    

    Anyone
who becomes aware of the existence or apparent existence of fraud, waste and
abuse in NIH funded programs is encouraged to report such matters to the DHHS
Inspector General's Office in writing or on the Inspector General's
Hotline.  The toll free number is 1-800-DHHS-TIPS
(1-800-447-8477).  All telephone calls will be handled
confidentially.  The e-mail address is Htips@os.dhhs.gov and
the mailing address is:

     

    Office of
Inspector General

    Department
of Health and Human Services

    TIPS
HOTLINE

    P.O. Box
23489

    Washington,
D.C. 20026

    

    
      49.0  LIMITATION
ON USE OF FUNDS FOR PROMOTION OF LEGALIZATION OF CONTROLLED
SUBSTANCES

    

    Pursuant
to the current HHS annual appropriations act, the Subcontractor shall not use
subcontract funds to support activities that promote the legalization of any
drug or other substance included in schedule I of the schedules of controlled
substances established under section 202 of the Controlled Substances Act (21
U.S.C. 812), except for normal and recognized executive-congressional
communications.  This limitation shall not apply when the Government
determines that there is significant medical evidence of a therapeutic advantage
to the use of such drug or other substance or that federally sponsored clinical
trials are being conducted to determine therapeutic advantage.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 25
of 32

        
          

        

      

      
         

      

    

     

    
      50.0  SALARY
RATE LIMITATION

    

    Pursuant
to the current HHS annual appropriations act, SAIC-F shall not pay the direct
salary of an individual through this Agreement at a rate in excess of Executive
Level I.  Direct salary is exclusive of fringe benefits, overhead and
general and administrative expenses (also referred to as "indirect costs" or
"facilities and administrative (F&A) costs").  Direct salary has
the same meaning as the term "institutional base salary." An individual's direct
salary (or institutional base salary) is the annual compensation that the
Subcontractor pays for an individual's appointment whether that individual's
time is spent on research, teaching, patient care or other
activities.  Direct salary (or institutional base salary) excludes any
income that an individual may be permitted to earn outside of duties to the
Subcontractor.  If this is a multiple year contract, it may be subject
to unilateral modifications by SAIC-F if an individual's salary rate used to
establish contract funding exceeds any salary rate limitation subsequently
established in future HHS appropriation acts.  Payment of direct
salaries is limited to the Executive Level I rate which was in effect on the
date(s) the expense was incurred.  See the following Web site for
current Executive Schedule rates of pay: http://www.opm.qov/oca/
.. (Rates are effective January
1 of each calendar year unless otherwise noted.)

     

    
      51.0  FORCE
MAJEURE

    

    Neither
party shall be liable for any failure of or delay in performance of its
obligations under this Agreement to the extent such failure or delay is due to
circumstances beyond its reasonable control, including, without limitation, acts
of God, acts of a public enemy, terrorism, fires, floods, wars, civil
disturbances, sabotage, accidents, insurrections, blockades, embargoes, storms,
explosions, labor disputes (whether or not the employees' demands are reasonable
and/or within the party's power to satisfy), acts of any governmental body,
failure or delay of third parties or governmental bodies from whom a party is
obtaining or must obtain approvals, authorizations, licenses, franchises or
permits, or inability to obtain labor, materials, power, equipment, or
transportation (collectively referred to herein as "Force
Majeure").  Each party shall use its reasonable efforts to minimize
the duration and consequences of any failure of or delay in performance
resulting from a Force Majeure event and to promptly notify the other of any
actual or potential Force Majeure event.

     

    
      52.0  ENTIRE
AGREEMENT

    

    The
parties hereby agree that this Agreement, including all documents incorporated
herein by reference or attached hereto, 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.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 26
of 32

        
          

        

      

      
         

      

    

     

    [SAIC
LETTERHEAD] - ATTACHMENT 1: STATEMENT OF WORK

    BASIC
ORDERING AGREEMENT 10XS020

     

    A.       Overview/Background

    The Dale
and Betty Bumpers Vaccine Research Center (VRC) of the National Institutes of
Allergies and Infectious Diseases (NIAID), at the National Institutes of Health,
was established to facilitate research in vaccine development.  The
VRC is dedicated to improving global human health through the rigorous pursuit
of effective vaccines for human diseases.  One of the key components
of the VRC mission involves the rapid advancement of promising vaccine
candidates from the laboratory to the clinic.  Meeting this mission
necessitates the development of vaccine manufacturing infrastructure that
includes the capacity for cGMP production of materials for Phase I/II clinical
trials.

     

    The VRC
has developed a prime-boost strategy using multiclade DNA plasmid vaccines for
priming vaccinations and recombinant adenoviral vaccines for booster
vaccination.  The next step in bringing the VRC vaccines to market
involves producing large quantities of the vaccine for use in clinical
trials.  Vaccine Production Program at the VRC is responsible for cGMP
production, pre-clinical safety testing and regulatory submission of VRC
vaccines for clinical trials.  To expeditiously meet the critical
program needs of its Clinical Trials Core, the VRC developed a Vaccine Pilot
Plant (VPP) for the manufacture of clinical materials for Phase I/II/III
trials.  To date, VRC vaccines have been developed and manufactured by
the Vaccine Production Program through collaborations with companies in the
vaccine/biotechnology industry, via contracts that enable process and assay
development, GMP manufacturing and product release/stability
testing.  Such an approach enables the VRC to rapidly respond to
emerging public health threats.

     

    This
Basic Ordering Agreement follows the Contract 21XS073A, between GenVec and SAIC,
Frederick, which was initiated in December 2001.  The Task Orders
under the new Basic Ordering Agreement have been approved by the Dr. Richard
Schwartz; Chief, Vaccine Production Program, Vaccine Research
Center.

     

    B.       Description
of Work

    This
Basic Ordering Agreement between SAIC-Frederick, Inc. and GenVec, Inc.
(Subcontractor) covers the generation and characterization of replication
deficient research grade as well as pre-GMP adenoviral Vector Seed Stocks (VSS)
containing VRC inserts for expressing antigens derived from Human
Immunodeficiency (HIV), Simian Immunodeficiency (SIV) and
Influenza.

     

    This
Basic Ordering Agreement also includes stability testing of currently existing
as well as future Virus Banks, Bulk Vaccine Products and Filled Vaccine Products
for further development of vaccine products to clinical trials.  If
necessary, this Basic Ordering Agreement includes the
*.  Additionally, this Basic Ordering Agreement *.  This
Basic Ordering Agreement includes the option, if
necessary,*.  Finally, this Basic Ordering Agreement includes work for
developing, refining and enhancing production processes and assays for clinical
manufacturing of adenoviral vector constructs.

     

    The
specific description of the work required from the Subcontractor under this
Basic Ordering Agreement will be covered in the issued Task Orders.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 27
of 32

        
          

        

      

      
         

      

    

     

    One of
the key requirements of the VRC's adenoviral vaccines is that the adenoviral
vectors be non-replication competent.  The production of adenoviral
vectors for use in human vaccines is complicated by the production of
replication-competent adenovirus (RCA) during the manufacturing
process.  The production of RCA is problematic for several
reasons.  Most importantly, when administered to humans, the presence
of RCA in vaccine preparations causes cytotoxic and immunotoxic
responses.  Due to this toxicity, the presence of RCA is undesirable
from a regulatory perspective.  Additionally, during the production
process, the RCA outgrows the product of interest, resulting in diminished
production yields and increased manufacturing costs.  To overcome the
regulatory and production challenges associated with the use of adenoviral
vector products, it is desired to manufacture the vectors in a cell line that is
incapable of producing RCA.  The 293-ORF6 and * in combination with
GenVec's proprietary E1- and E4-deleted adenovector platform essentially
eliminates the risk of generating Replication Competent Adenovirus
(RCA).  GenVec has never observed RCA due to homologous recombination
in any of its Research or Clinical vector lots using this system.

     

    GenVec,
Inc. will utilize its proprietary non-replication competent adenoviral vector
technologies, proprietary cell lines and proprietary manufacturing process for
producing non-replication competent adenoviral vectors.  GenVec will
utilize its demonstrated expertise in producing adenoviral vector vaccines
containing modified versions of HIV genes and in implementing and maintaining
stability testing programs on adenoviral vector Virus Banks and Bulks and Filled
adenoviral vector vaccine products.  Furthermore, GenVec shall provide
as required the following expertise and proprietary resources to complete the
Statement of work:

     

    
      	
              ·  

            	
              *.

            

    

     

    
      	
              ·  

            	
              GenVec
      is the source of proprietary 293-ORF6 cell line, which has demonstrated
      safety profiles in the production of non-replication competent adenoviral
      vectors for use in human clinical trials.  The 293-ORF6 cell
      line was prepared under controlled conditions and tested according to US
      and International regulatory guidelines.  All information on the
      derivation and testing of the cell line is in a file held by the US Food
      and Drug Administration and is updated
      yearly.  *.  The immortal nature of the 293-ORF6 *
      cell lines provide for the production of high quantities of desired
      products and meeting the needs of the human clinical trials that the VRC
      plans to conduct in the future.

            

    

     

    
      	
              ·  

            	
              GenVec's
      proprietary production process is fully scalable, which allow for ready
      transition to larger-scale production.  This ability to increase
      the size of the production process, without radical changes, will allow
      the Vaccine Pilot Plant to manufacture the increased dosage requirements
      for Phase III clinical trials.

            

    

     

    
      	
              ·  

            	
              GenVec
      has licensed its proprietary 293-ORF6 Packaging Cell Line and its
      proprietary Adenovector Manufacturing Process to the VRC through two
      separate licensing agreements with
  NIAID.  *.

            

    

     

    
      	
              ·  

            	
              GenVec
      has demonstrated expertise in production and release and stability testing
      of adenoviral vector vaccines containing modified versions of HIV
      genes.  These vectors have demonstrated immunogenicity in
      non-human primates.  Vaccines for use in the prevention of HIV,
      produced by GenVec for VRC/NIAID, are currently in VRC's Phase II clinical
      trials.  Furthermore, additional Phase II clinical trials are
      planned in the upcoming months.  Assuming these trials yield
      successful results, VRC will require the production of additional material
      for Phase II/111 trials.  Regulatory requirements dictate that
      the materials for Phase II/III trials should be produced in the same cell
      line used for Phase I trials, otherwise new trials must be
      conducted.  Switching to another manufacturer and ultimately
      another cell line would require a repeat of Phase I trials, thus adding
      significant financial costs and delay in the quest to find an effective
      vaccine against HIV.

            

    

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 28
of 32

        
          

        

      

      
         

      

    

     

    C.       List
of Deliverables

    The
specific descriptions of the deliverables required from the Subcontractor will
be covered in the respective Task Orders issued under this Basic Ordering
Agreement.

     

    D.       Reporting
Requirement

    The
specific descriptions of the reports required from the Subcontractor will be
covered in the respective Task Orders issued under this Basic Ordering
Agreement.

     

    F.       Acceptance
Criteria

    The
acceptance criteria for the work performed by the Subcontractor will be covered
in the respective Task Orders issued under this Basic Ordering
Agreement.

     

    
      
        [*]The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission

         

      

      
        Page 29
of 32

        
          

        

      

      
         

      

    

    

     

    

    Representations
and Certifications

    AMERICAN
RECOVERY AND REINVESTMENT ACT OF 2009

     

    NOTICE:
By signing below, the Subcontractor represents and certifies that this
certification is accurate, current, and complete and that the signer is duly
authorized to make such certification on behalf of the
Subcontractor.

     

    1.           CENTRAL
CONTRACTOR REGISTRATION.

     

    It _is,
_is not registered in the Central Contractor Registration database.

     

    2.           DUNS
NUMBER. (Show as it appears in CCR.)

     

    Its DUNS
number
is                                                                

     

    Its DUNS
Plus 4 number is__ __ __ __ or
__ a DUNS Plus 4 number is not applicable.

     

    3.           PARENT
DUNS NUMBER.

     

    It __
does, __ does not have a parent company.

     

    If it has
a parent company, the parent company's DUNS number is
__________________.

     

    4.           NAICS
Code of work performed

     

    

     

    5.           LEGAL BUSINESS NAME. (Show as it appears in
CCR.)

     

    Its legal
business name by which it is incorporated and pays taxes is

     

    

     

    6.           DOING BUSINESS AS (DBA). (Show as it appears in
CCR.)

     

    It __
commonly uses another name, __ does not commonly use another name.

     

    If it
commonly uses another name, the name is

    

     

    
      	
              7.

            	
              SUBCONTRACTOR'S PHYSICAL
      ADDRESS. (P.O.
      Box or c/o may not be used.  Show as it appears in
      CCR.)

            

    

     

    Street
Address:                                                                                                

     

    City:                                                                                     

     

    State:                                                                                                

     

    Zip Code
(nine digits
required):                                                                                                

     

    Congressional
district (required if in the United States):                                                                                                           

     

    
      
        
        

         

      

      
        
        

        
          

        

      

      
         

      

    

    

     

    8.           PRIMARY
PERFORMANCE LOCATION OF THE SUBCONTRACT WORK.

     

    (P.O. Box or c/o may not be
used).                                                                                                           

     

    Street
Address:                                                                                                           

     

    City:                                                                                                

     

    State:                                                                                                           

     

    Zip Code
(nine digits
required):                                                                                                                     

     

    Congressional
district (required if in the
United States):                                                                                                                     

     

    9.           EXECUTIVE
COMPENSATION.

     

    
      	
               
      

            	
               ("Total Compensation" means
      the complete pay package of subcontractor employees, including all forms
      of monthly, benefits, services, and in-kind payments, consistent with the
      regulations of the Securities and Exchange Commission at 17 CFR
      229.402.)

            

    

     

    
      	
               
      

            	
              A.

            	
              Names
      and total compensation of each of the five most highly compensated
      officers for the calendar year in which the subcontract is awarded
      if—

            

    

    
      	
               
      

            	
              (1)

            	
              in
      its preceding fiscal year, it
received—

            

    

    
      	
               
      

            	
              (a)

            	
              80
      percent or more of its annual gross revenues in Federal contracts (and
      subcontracts), loans, grants (and sub-grants), and cooperative agreements;
      and

            

    

    
      	
               
      

            	
              (b)

            	
              $25,000,000
      or more in annual gross revenues from Federal contracts (and
      subcontracts), loans, grants (and sub-grants), and cooperative agreements;
      and

            

    

    
      	
               
      

            	
              (2)

            	
              the
      public does not has access to information about the compensation of the
      senior executives through periodic reports filed under section 13(a) or
      15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78M(a), 78o(d)) or
      section 6104 of the Internal Revenue Code of
  1986.

            

    

     

    
      
        	
                NAME

              	
                TITLE

              	
                TOTAL

                COMPENSATION

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

      

    

    

    The
compensation for senior executives shown above is for calendar year
20_.

     

    Its
fiscal year end date
is                                                                      .

     

    
      	
               
      

            	
              B.

            	
              If
      compensation of senior executives is not provided in 8.A above, complete
      the following:

            

    

    

    
      	
               
      

            	
              In
      its preceding fiscal year, it __did, __did not
  receive—

            

    

    
      	
               
      

            	
              (1)

            	
              80
      percent or more of its annual gross revenues in Federal contracts (and
      subcontracts), loans, grants (and sub-grants), and cooperative agreements;
      and

            

    

    
      	
               
      

            	
              (2)

            	
              $25,000,000
      or more in annual gross revenues from Federal contracts (and
      subcontracts), loans, grants (and sub-grants), and cooperative
      agreements.

            

    

     

    The
public _does, _does not have access to information about the compensation of the
senior executives through periodic reports filed under section 13(a) or 15(d) of
the Securities Exchange Act of 1934 {15 U.S.C. 78M(a), 78o(d)} or section 6104
of the Internal Revenue Code of 1986.

    

    LEGAL
BUSINESS NAME:

     

    
      
        
        

         

      

      
        
        

        
          

        

      

      
         

      

    

     

    10.           GROSS
INCOME.

     

    Its gross income in the previous tax
year __did, __did not exceed $300,000.

     

    
 

    By:                                                                                     

    Printed/Typed Name

     

    
      
        
                                
Signature

    

    

    Title:                                                                                     

    

    Date:Exhibit
10.1

    

    PET
AIRWAYS, INC.

    COMMON
STOCK SUBSCRIPTION AGREEMENT

    

    SECTION
1.

     

    1.1    Subscription. The
undersigned (the “Subscriber”), intending to be
legally bound, hereby irrevocably subscribes for and agrees to purchase ________
shares of the Common Stock (the "Common Stock") of Pet Airways,
Inc., an Illinois corporation (the "Company") in a transaction
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Securities
Act").

     

    1.2    Purchase of Shares.
The Subscriber understands and acknowledges that the purchase price to be
remitted to the Company in exchange for the _______ Shares shall be an aggregate
of ________ dollars or ____ per Share (the "Subscription Amount"). The
Company shall deliver the Shares to the Subscriber promptly after the acceptance
of this Subscription Agreement by the Company.

     

    1.3    Acceptance or
Rejection.

     

    (a) The
Subscriber understands and agrees that the Company reserves the right to reject
this subscription for the Shares if, in its reasonable judgment, it deems such
action in the best interest of the Company, at any time prior to the
Closing.

     

    (b) The
Subscriber understands and agrees that its subscription for the Shares is
irrevocable.

     

    (c) In the
event the sale of the Shares subscribed for by the Subscriber is not consummated
by the Company for any reason (in which event this Subscription Agreement shall
be deemed to be rejected), this Subscription Agreement and any other agreement
entered into between the Subscriber and the Company relating to this
subscription shall thereafter have no force or effect and the Company shall
promptly return or cause to be returned to the Subscriber the Subscription
Amount remitted to the Company by the Subscriber, without interest thereon or
deduction therefrom, in exchange for the Shares.

     

    SECTION
2.

     

    2.1    Escrow.

     

    (a) The
Subscriber hereby appoints Fox Rothschild LLP as the "Escrow Agent" for purposes of
this Agreement.  The Subscriber shall deliver the Subscription Amount
to Escrow Agent by check made payable to Fox Rothschild LLP or by wire transfer
to Wachovia Bank, 123 S. Broad Street, Philadelphia, PA 19109, ABA #031201467,
Account:  Fox Rothschild LLP Iolta Account, Account # 2100012910060,
Swift Code:  PNB PUS 33 (international wires only) to be held in a
non-interest bearing escrow account (the "Escrow Account") until the
Closing.  The parties hereby agree that the Subscription Amount shall
be released from the Escrow Account to the Company, less any applicable
commissions and fees, simultaneously with (i) the acceptance by the Company of
the Subscriber's subscription; and (ii) the release by the Company of the
certificate representing the Shares.  In the event that the Closing
has not occurred within thirty (30) days of the Subscription Amount being
deposited into escrow, then the Escrow Agent shall return the Subscription
Amount from the Escrow Account to the Subscriber, without interest.

     

    (b) The
Escrow Agent shall not be liable for any error of judgment or for any act done
or omitted by it in good faith, or for anything it may in good faith do or
refrain from doing in connection herewith; nor for any negligence other than its
gross negligence; nor shall the Escrow Agent be answerable for the default or
misconduct of its agents, attorneys or employees, if they be selected with
reasonable care; nor will any liability be incurred by the Escrow Agent, if, in
the event of any dispute or question as to its duties or obligations hereunder,
it acts in accordance with advice of its legal counsel, including, without
limitation, its own reasoned, written legal opinion relative to the
matter.  The Escrow Agent shall have no liability for the selection of
the depository bank nor for any loss of funds in the event of the failure of the
depository bank.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c) In the
event that prior to the termination of the escrow, the Escrow Agent receives or
becomes aware of conflicting demands or claims with respect to the escrowed
funds or the rights of the Company or the Subscriber, the Escrow Agent shall
have the right to discontinue any or all further acts on its part until such
conflict is resolved to its satisfaction.  In such event, the Escrow
Agent shall not pay the escrowed funds to any party, and, except as provided
herein, shall not comply with any claims, demands or instructions with respect
to the escrowed funds from the Company or the Subscriber or any representative
of the foregoing.  The Escrow Agent shall not be or become liable in
any way to the Company, to the Subscriber, or any other person or entity for its
failure or refusal to comply with such conflicting claims or
demands.  The Escrow Agent shall be entitled to refuse to act until:
(i) such conflicting or adverse claims or demands shall have been finally
determined by a court of competent jurisdiction; (ii) such conflicting or
adverse claims or demands shall have been settled by agreement among all of the
conflicting parties as evidenced in a writing satisfactory to the Escrow Agent;
and/or (iii) the Escrow Agent shall have received security or an indemnity
satisfactory to the Escrow Agent sufficient to indemnify and save it harmless
from and against any and all loss, liability or expense which it may incur by
reason of its acting.

     

    (d) The
Escrow Agent shall have the further right to commence or defend any action or
proceeding for the determination of such conflict.  The Company agrees
to defend and indemnify, and to otherwise pay all costs, damages, judgments and
expenses, including reasonable attorneys’ fees, suffered or incurred by the
Escrow Agent in connection with or arising out of the Escrow and this Agreement,
including but without limiting the generality of the foregoing, a suit in
inter-pleader brought by the Escrow Agent.  In the event the Escrow
Agent files a suit in inter-pleader and deposits the escrowed funds with the
court in which such suit is filed, it shall thereupon be fully released and
discharged by the Company and the Subscriber from all further obligations to
perform any and all duties or obligations imposed upon it by this Agreement, but
the Company shall not be discharged from its obligations to the Escrow Agent
contained in this Agreement, which shall be deemed to survive any such deposit
of funds.

     

    (e) Fox
Rothschild LLP represents the Company, not the Subscriber.  Fox
Rothschild expects to be paid for its legal services out of the proceeds in
escrow, which creates a conflict of interest.  Purchasers acknowledge
that the Escrow Agent does not represent the Subscriber and that the escrow
agent’s duties are strictly limited to the provisions of this
Agreement.  The Subscriber and Company waive any conflict of interest,
lack of independence or appearance of impropriety with respect to Fox Rothschild
LLP’s service as Escrow Agent hereunder.

     

    2.2    Closing. The closing
(the "Closing") of the
purchase and sale of the Shares, shall occur simultaneously with (i) the
acceptance by the Company of the Subscriber's subscription, as evidenced by the
Company's execution of this Subscription Agreement; and (ii) the release by the
Company of the certificate representing the Shares.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    SECTION
3.

     

    3.1    Investor Representations and
Warranties. The Subscriber hereby acknowledges, represents and warrants
to, and agrees with, the Company and its affiliates as follows:

     

    (a) Investment Purposes.
The Subscriber is acquiring the Shares for its own account as principal, not as
a nominee or agent, for investment purposes only, and not with a view to, or
for, resale, distribution or fractionalization thereof in whole or in part and
no other person has a direct or indirect beneficial interest in such Shares or
any portion thereof. Further, the Subscriber does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to the Shares
for which the Subscriber is subscribing or any part of the Shares.

     

    (b) Authority. The
Subscriber has full power and authority to enter into this Agreement, the
execution and delivery of this Agreement has been duly authorized, if
applicable, and this Agreement constitutes a valid and legally binding
obligation of the Subscriber.

     

    (c) No General
Solicitation. The Subscriber is not subscribing for the Shares as a
result of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio, or presented at any seminar or meeting, or any
solicitation of a subscription by person previously not known to the Subscriber
in connection with investment securities generally.

     

    (d) Investment
Experience. The Subscriber is (i) experienced in making investments of
the kind described in this Agreement, (ii) able, by reason of the business and
financial experience of its officers (if an entity) and professional advisors
(who are not affiliated with or compensated in any way by the Company or any of
its affiliates or selling agents), to protect its own interests in connection
with the transactions described in this Agreement, and (iii) able to afford the
entire loss of its investment in the Shares.

     

    (e) Exemption from
Registration. The Subscriber acknowledges its understanding that the
offering and sale of the Shares is intended to be exempt from registration under
the Securities Act. In furtherance thereof, in addition to the other
representations and warranties of the Subscriber made herein, the Subscriber
further represents and warrants to and agrees with the Company and its
affiliates as follows:

     

    (1) The
Subscriber realizes that the basis for the exemption may not be present if
notwithstanding such representations, the Subscriber has in mind merely
acquiring the Shares for a fixed or determinable period in the future, or for a
market rise, or for sale if the market does not rise. The Subscriber does not
have any such intention;

     

    (2) The
Subscriber has the financial ability to bear the economic risk of its
investment, has adequate means for providing for its current needs and personal
contingencies and has no need for liquidity with respect to its investment in
the Company; and

     

    (3) The
Subscriber has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of the prospective
investment in the Shares. The Subscriber also represents it has not been
organized for the purpose of acquiring the Shares; and

     

    (4) The
Subscriber acknowledges that it has had access to and has reviewed all documents
and records relating to the Company, including, but not limited to, the
Company’s Form 8-K filed with the United States Securities and Exchange
Commission on August 16, 2010, including the risk factors described therein (as
such documents have been amended since the date of their filing, collectively,
the “Company SEC
Documents”), that it has deemed necessary in order to make an informed
investment decision with respect to an investment in the Shares; that it has had
the opportunity to ask representatives of the Company certain questions and
request certain additional information regarding the terms and conditions of
such investment and the finances, operations, business and prospects of the
Company and has had any and all such questions and requests answered to its
satisfaction; and that it understands the risks and other considerations
relating to such investment.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (f) No Other Company
Representations. No representations or warranties have been made to the
Subscriber by the Company, or any officer, employee, agent, affiliate or
subsidiary of the Company, other than the representations of the Company
contained herein, and in subscribing for Shares the Subscriber is not relying
upon any representations other than those contained herein.

     

    (g) Compliance with Laws.
Any resale of the Shares shall only be made in compliance with exemptions from
registration afforded by, or pursuant to an effective registration statement
under, the Securities Act and in compliance with applicable state
law.

     

    (h) Legends. Each
certificate representing the Shares shall be endorsed with the following
legends, in addition to any other legend required to be placed thereon by
applicable federal or state securities laws:

     

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.  THE
SECURITIES REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR
INVESTMENT, AND WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE
SOLD, TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT
OF 1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE
SECURITIES LAWS.

    

    (i) Accredited Investor.
The Subscriber is an "accredited investor" as that term is defined in Rule 501
of the General Rules and Regulations under the Securities Act by reason of Rule
501(a)(3).

     

    (j) Potential Loss of
Investment. The
Subscriber understands that an investment in the Shares is a speculative
investment which involves a high degree of risk and the potential loss of its
entire investment. The Company is an early stage company with only a brief
operating history for the Subscriber to evaluate its business. The Company,
previously known as American Antiquities, Inc., only recently completed the
acquisition of Panther Air Cargo, LLC, a Florida limited partnership doing
business as Pet Airways, through a share exchange agreement.  The
Company’s common stock previously traded on the OTC Bulletin Board under the
symbol "AAQS" and now trades on the OTC Bulletin Board under the symbol
"PAWS."

     

    (k) Investment
Commitment. The Subscriber's overall commitment to investments which are
not readily marketable is not disproportionate to the Subscriber's net worth,
and an investment in the Shares will not cause such overall commitment to become
excessive.

     

    (l) Receipt of
Information. The Subscriber has received all documents, records, books
and other information pertaining to the Subscriber's investment in the Company
that has been requested by the Subscriber.

     

    (m) Investor
Questionnaire. The Subscriber represents and warrants to the Company that
all information that the Subscriber has provided to the Company, including,
without limitation, the information in the Investor Questionnaire attached
hereto as Exhibit
A or previously provided to the Company (the "Investor Questionnaire"), is
correct and complete as of the date hereof.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (n) No Reliance. Other
than as set forth herein, the Subscriber is not relying upon any other
information, representation or warranty by the Company or any officer, director,
stockholder, agent or representative of the Company in determining to invest in
the Shares. The Subscriber has consulted, to the extent deemed appropriate by
the Subscriber, with the Subscriber's own advisers as to the financial, tax,
legal and related matters concerning an investment in the Shares and on that
basis believes that its investment in the Shares is suitable and appropriate for
the Subscriber.

     

    (o) No Governmental
Review. The Subscriber is aware that no federal or state agency has (i)
made any finding or determination as to the fairness of this investment, (ii)
made any recommendation or endorsement of the Shares or the Company, or (iii)
guaranteed or insured any investment in the Shares or any investment made by the
Company.

     

    (p) Price of Shares. The
Subscriber understands that the price of the Shares offered hereby bear no
relation to the assets, book value or net worth of the Company and were
determined arbitrarily by the Company.

     

    (q) Financing
Risk.  The Company currently does not have enough working
capital to satisfy its capital needs. The Company is dependent upon investors to
fund its ongoing operations, and cannot be certain that future financing will be
available to it on acceptable terms when it needs it. The Company can give no
assurances that it will be able to raise adequate funding to reach cash flow
break even.  If the Company is unable to obtain financing to meet its
needs, the Subscriber may lose of its investment.

     

    (r) Dilution.  In
order to capitalize the Company, execute its business plan, and for other
corporate purposes, the Company has issued, and expects to issue additional
shares of Common Stock, securities exercisable or convertible into shares of
Common Stock, or debt.  Such securities have been and may be issued
for a purchase price consisting of cash, services or other consideration that
may be materially different than the purchase price of the
Shares.  The issuance of any such securities may result in substantial
dilution to the relative ownership interests of the Company’s existing
shareholders and substantial reduction in net book value per
share.  Additional equity securities may have rights, preferences and
privileges senior to those of the holders of Common Stock, and any debt
financing may involve restrictive covenants that may limit the Company’s
operating flexibility.

     

    (s) Former Shell
Company.  Subscriber acknowledges and agrees that the Company
was, at one time, a "shell company" as defined in Rule 12b-2 under the Exchange
Act.  Pursuant to Rule 144(i) under the Securities Act, securities
issued by a current or former shell company (such as the Shares) that otherwise
meet the holding period and other requirements of Rule 144 nevertheless cannot
be sold in reliance on Rule 144 until one year after the date on which such
company filed current "Form 10 information" (as defined in Rule 144(i)) with the
SEC  reflecting that it ceased being a shell company, and provided
that at the time of a proposed sale pursuant to Rule 144, the issuer is subject
to the reporting requirements of section 13 or 15(d) of the Exchange Act and has
filed all reports and other materials required to be filed by section 13 or
15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for
such shorter period that the issuer was required to file such reports and
materials), other than Form 8-K reports.  As a result, the restrictive
legends on certificates for the Shares cannot be removed except in connection
with an actual sale meeting the foregoing requirements.

     

    3.2    Restrictions on
Disposition. The Subscriber further acknowledges and understands that,
without in anyway limiting the acknowledgements and understandings as set forth
hereinabove, the Subscriber agrees that the Subscriber shall in no event make
any disposition of all or any portion of the Shares which the Subscriber is
acquiring hereunder unless and until:

     

    (1) there is
then in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with said
registration statement; or

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (2) (i) the
Subscriber shall have notified the Company of the proposed disposition and shall
have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition, (ii) the Subscriber shall have furnished
the Company with an opinion of the Subscriber's own counsel to the effect that
such disposition will not require registration of any such Shares under the
Securities Act and (iii) such opinion of the Subscriber's counsel shall have
been concurred in by counsel for the Company and the Company shall have advised
the Subscriber of such concurrence.

     

    SECTION
4.

     

    4.1    Company's Representations
and Warranties. The Company represents and warrants to the Subscriber as
follows:

     

    (a) Organization of the
Company. The Company is a corporation duly organized and validly existing
and in good standing under the laws of the State of Illinois.

     

    (b) Authority. (a) The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement and to issue the Shares; (b) the
execution and delivery of this Agreement by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been duly authorized
by all necessary corporate action and no further consent or authorization of the
Company or its Board of Directors or stockholders is required; and (c) this
Agreement has been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws relating to, or affecting
generally the enforcement of creditors' rights and remedies or by other
equitable principles of general application.

     

    (c) Exemption from Registration;
Valid Issuances. The sale and issuance of the Shares, in accordance with
the terms and on the bases of the representations and warranties of the
Subscriber set forth herein, may and shall be properly issued by the Company to
the Subscriber pursuant to any applicable federal or state law. When issued and
paid for as herein provided, the Shares shall be duly and validly issued, fully
paid, and nonassessable. Neither the sales of the Shares pursuant to, nor the
Company's performance of its obligations under, this Agreement shall (a) result
in the creation or imposition of any liens, charges, claims or other
encumbrances upon the Shares or any of the assets of the Company, or (b) entitle
the other holders of the Common Stock of the Company to preemptive or other
rights to subscribe to or acquire the Common Stock or other securities of the
Company. The Shares shall not subject the Subscriber to personal liability by
reason of the ownership thereof.

     

    (d) No General Solicitation or
Advertising in Regard to this Transaction. Neither the Company nor any of
its affiliates nor any person acting on its or their behalf (a) has conducted or
will conduct any general solicitation (as that term is used in Rule 502(c) of
Regulation D) or general advertising with respect to any of the Shares, or (b)
made any offers or sales of any security or solicited any offers to buy any
security under any circumstances that would require registration of the Common
Stock or other securities of the Company under the Securities Act.

     

    4.2    Obligation to Register
Shares. Subject to compliance with Rule 415, the Company shall use
commercially reasonable efforts to file a registration statement to register the
Shares under the Securities Act, and other applicable laws, by March 31,
2011.  Upon receipt of declaration from the Securities and Exchange
Commission that the registration statement is effective, the Subscriber will be
free to dispose of his shares in accordance with the registration
statement.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    SECTION
5.

     

    5.1    Commissions and Fees.
No commissions or finders fees will be paid in connection with the sale of
Common Stock under this Agreement.

     

    5.2    Indemnity. The
Subscriber agrees to indemnify and hold harmless the Company, its officers and
directors, employees and its affiliates and their respective successors and
assigns and each other person, if any, who controls any thereof, against any
loss, liability, claim, damage and expense whatsoever (including, but not
limited to, any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation commenced or
threatened or any claim whatsoever) arising out of or based upon any false
representation or warranty or breach or failure by the Subscriber to comply with
any covenant or agreement made by the Subscriber herein or in any other document
furnished by the Subscriber to any of the foregoing in connection with this
transaction.

     

    5.3    Modification. Neither
this Agreement nor any provisions hereof shall be modified, discharged or
terminated except by an instrument in writing signed by the party against whom
any waiver, change, discharge or termination is sought.

     

    5.4    Notices. Any notice,
demand or other communication which any party hereto may be required, or may
elect, to give to anyone interested hereunder shall be sufficiently given if (a)
deposited, postage prepaid, in a United States mail letter box, registered or
certified mail, return receipt requested, addressed to such address as may be
given herein, or (b) delivered personally at such address.

     

    5.5    Counterparts. This
Agreement may be executed through the use of separate signature pages or in any
number of counterparts and by facsimile, and each of such counterparts shall,
for all purposes, constitute one agreement binding on all parties,
notwithstanding that all parties are not signatories to the same counterpart.
Signatures may be facsimiles.

     

    5.6    Binding Effect.
Except as otherwise provided herein, this Agreement shall be binding upon and
inure to the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives and assigns. If the Subscriber is more than
one person, the obligation of the Subscriber shall be joint and several and the
agreements, representations, warranties and acknowledgments herein contained
shall be deemed to be made by and be binding upon each such person and its
heirs, executors, beneficiaries, administrators and successors.

     

    5.7    Entire Agreement.
This Agreement and the documents referenced herein contain the entire agreement
of the parties and there are no representations, covenants or other agreements
except as stated or referred to herein and therein.

     

    5.8    Assignability. This
Agreement is not transferable or assignable by the Subscriber.

     

    5.9    Governing Law,
Arbitration. All questions concerning the construction, validity,
enforcement and interpretation of this Debenture shall be governed by and
construed and enforced in accordance with the internal laws of the State of
California, without regard to the principles of conflict of laws thereof. Each
party agrees that all legal proceedings in equity or at law concerning the
interpretation, enforcement and defense of the transactions contemplated by any
of the Transaction Documents (whether brought against a party hereto or its
respective Affiliates, directors, officers, shareholders, employees or agents)
shall be held in the City of San Francisco, California, United States of America
in arbitration before the International Chamber of Commerce and shall be
determined by three arbitrators, and otherwise held in accordance with its
rules. Each party shall choose one arbitrator and the two arbitrators shall
choose the third. The third arbitrator so chosen shall have a background in
either corporate finance, banking or law. The arbitration shall be conducted in
the English language and the arbitration award shall include the allocation of
costs and expenses among the parties. The arbitration ruling shall be final and
binding.

     

    5.10    Pronouns. The use
herein of the masculine pronouns "him" or "his" or similar terms shall be deemed
to include the feminine and neuter genders as well and the use herein of the
singular pronoun shall be deemed to include the plural as well.

     

    5.11    Further Assurances.
Upon request from time to time, the Subscriber shall execute and deliver all
documents, take all rightful oaths and do all other acts that may be necessary
or desirable, in the reasonable opinion of the Company or its counsel, to effect
the subscription for the Shares in accordance herewith.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Subscriber has executed this Subscription Agreement on the
___ day of ____________, 2010.

     

    Amount of
Investment:

     

    $___________________

     

    INDIVIDUAL
INVESTOR:

    
____________________

    Name:

     

    

    PARTNERSHIP,
CORPORATION, TRUST, CUSTODIAL ACCOUNT, OTHER INVESTOR

    
____________________

    (Name of
Entity)

    

    By:_____________________________

    Name:___________________________

    Title:____________________________

    Address:_________________________

    

    Taxpayer
Identification Number:______________________________________

    

    ACCEPTANCE
OF SUBSCRIPTION

     

    (to be
filled out only by the Company)

     

    The
Company hereby accepts the above application for subscription for Shares on
behalf of the Company.

     

    Dated:  ___
day of ___________, 2010

     

    PET
AIRWAYS, INC.

    

    By:______________________________

    Name:

    Title:

     

    
      
         

      

      
        8

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