<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended September 29, 1996
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Transition period from to
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Commission file number 1-8402
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IRVINE SENSORS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 33-0280334
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3001 Redhill Avenue, Costa Mesa, California 92626
(Address of principal executive offices) (Zip Code)
(714) 549-8211
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class: which registered:
Common Stock Boston Stock Exchange Incorporated
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past ninety (90) days. Yes X No
--- ---
To the extent known by the registrant, the aggregate market value of the Common
Stock held beneficially by-non-affiliates of the registrant was approximately
$16,875,300 on December 20, 1996. As the Preferred Stock is not publicly traded
it has not been included in the computation.
As of December 20, 1996, there were 19,583,800 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of Registrant's Annual Report to Stockholders for the fiscal year ended
September 29, 1996; (Part II); portions of Registrant's Definitive Proxy
Statement to be used in connection with Registrant's Annual Meeting of
Stockholders to be held on February 28, 1997 (Part III).
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K ((S) 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K [_].
<PAGE>
PART I
ITEM 1. BUSINESS.
GENERAL
Irvine Sensors Corporation (the "Company" or "ISC") is the developer of a
proprietary technology used to produce an extremely compact package of solid
state microcircuitry, which it believes offers volume, power, weight and
operational advantages for a wide variety of potential military and commercial
applications. These advantages result from the Company's ability to assemble
microelectronic chips in a three dimensional "stack" instead of alongside each
other on flat surfaces, as is the case with conventional methods. This stacking
technology has also led to the development of collateral technology for the
design of low powered chips, both for chip stacking and for single chip
applications. The Company believes that its very low power chip technology may
have wide commercial application in portable electronic devices.
As memory chips, processors and other microelectronic components become
larger and faster, the benefits that can be realized from increased operating
speed are limited by the communication time and distance between chips. Where
tens to hundreds of millions of calculations per second are required, even at
the speed of light, distances between electrical components can become an
important limitation on the speed of a computer. The Company's approach to
shortening interchip distances is to use the third dimension. This is
accomplished by placing chips on top of each other in a stack instead of
conventional side by side packaging. This approach was conceived and developed
by the Company as a means of addressing the demands of space-based surveillance.
During June 1992, the Company entered into various agreements with IBM to
commercialize the Company's chip-stacking technology under which IBM also has
acted as a source of supply for the Company's products. During fiscal 1996, IBM
advised the Company that it believed the development phase of its planned
activities had been completed. In April 1996, the Company consummated an
agreement for the acquisition and operation of equipment comprising IBM's cubing
line located at IBM's Essex Junction, Vermont facility. The cubing line was
established by IBM under the joint development alliance. According to the terms
of the agreement, the Company acquired the equipment and clean room which
comprises the cubing line for a cash payment of approximately $6.5 million. In
addition, the Company signed a facility lease agreement for the space required
to operate the cubing line under the Company's management within the IBM
facility at least through December 1998.
In May 1995, the Company entered into a licensing and production agreement
with Unitrode Corporation, a manufacturer of analog/linear integrated circuits,
to exploit certain elements of the Company's low powered chip technology.
Since its inception, the Company has derived the majority of its revenues
from its core business of performing research and development of its technology
for governmental customers. This core business has progressively broadened from
essentially basic research to development of specific applications for both
commercial and governmental customers. In fiscal 1995, the Company began to
receive its first revenues from commercial products based on its technologies.
As demonstrated in fiscal 1996, the Company believes that commercial product
revenues will be increasingly significant to its total revenues in the future,
although there can be no assurance of profitability based on these anticipated
revenues or otherwise.
The Company has three subsidiaries, the first, Carson Alexiou Corporation,
has been inactive since 1985. Novalog, Inc. is an operating company which the
Company established in 1995 to expand the Company's low power chip technology.
3D Microsystems, Inc is a newly formed entity which is currently inactive.
PRODUCTS AND TECHNOLOGY
Drawing from experience gained in packaging electronics for infrared sensor
system development, in September 1987, the Company began work on a contract from
the Defense Advanced Research Projects Agency ("DARPA") that required ISC to
stack memory chips for use in a computer application. In November 1988, the
Company delivered to DARPA two 8-layer stacks of Static Random Access Memory
("SRAM") chips. This was the first functioning demonstration of ISC's
technology as applied to a device having potential for commercialization.
Subsequent to this demonstration, certain computer manufacturers that use memory
components in their own products purchased sample stacks of computer memory
chips from the Company for evaluation. One such relationship evolved into the
joint development alliance with IBM to commercialize the
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Company's chip stacking technology. The Company has developed a family of
standard products consisting of stacked computer memory chips.
The Company believes that its chip stacking technology can offer
demonstrable benefits to designers of systems that incorporate numerous
integrated circuits, by improving speed and reducing size, weight and power
usage. In addition, since ISC's technology reduces the number of
interconnections between chips, potential system failure points can also
decrease.
The Company believes that the features achievable with its chip stacking
technology will have application in space and in aircraft in which weight and
volume considerations are dominant, as well as in various other applications in
which portability is required and speed is important. The Company intends to
exploit its potential market by focusing on the sale of the stacked memory
products to high end, high margin government and commercial users to whom the
technical improvement will be most valuable. While these applications tend to
require lower unit volume, the sales are at significantly higher prices than
many applications requiring high volume production. Furthermore, the Company
has existing relationships with some of the potential customers in this market.
Since fiscal 1995, the Company has been shipping quantities of its stacked
memory products to customers for both government and commercial purposes.
However, there is no assurance that the Company will be successful in marketing
such products for widespread applications. The Company also intends to continue
to market infrared sensing devices for surveillance, acquisition, tracking and
interception applications for a variety of Defense Department and NASA missions.
In addition to its stacking technology, the Company has developed a Serial
Infrared Communications chip using elements of its sensor chip design
technology. This device is being used in products which allows computers and
computer peripherals to communicate using infrared transmissions in a manner
similar to that employed by remote control units for televisions and video
cassette recorders. The Company is actively marketing its Serial Infrared
Communications chip under the tradename SIRComm/TM /through its subsidiary,
Novalog, Inc.
INITIAL COMMERCIAL PRODUCTS: STACKED MEMORY AND SERIAL INFRARED COMMUNICATIONS
CHIPS
The Company's initial products for the commercial marketplace are various
forms of stacked memory chips. One such form is referred to as a Memory Short
Stack. The Memory Short Stack entails the assembly of a large stack of chips
which is predesigned to be separated into easily attachable smaller units. For
example, a stack of 100 chips might be designed to be separated into ten ten-
layer short stacks. Within the typical dimensions of a single memory chip
package, such a configuration permits up to ten chips to be packaged together.
Moreover, such a unit can be made to be compatible with existing single-chip
packages with only a minimum of redesign. The Company believes that the Memory
Short Stack permits memory upgrades for systems that are limited by the
dimensions of existing slots, racks or other chip mounting components.
The Company also builds larger memory modules for mounting on one side (a
face consisting of chip edges) with the chips perpendicular to the mounting
surface, like a loaf of bread. This results in a module height when mounted
which precludes its use where existing space between boards or racks is tightly
constrained. The advantage of this approach is that the higher input-output
densities achievable with the edge-mounted devices allow system architectures
preferred by some customers.
The demand for performance has produced a wide variety of competitors and
competitive systems ranging from various three-dimensional designs to highly
dense two-dimensional designs. Although some competitors are generally believed
to be better financed, more experienced and organizationally stronger, the
Company is not aware of any system in existence or under development that can
stack memory chips more densely than its three-dimensional approach. See
"Competition."
The Company is not aware of any technical disadvantages to its chip
stacking technology. However, until high volume production is achieved, as to
which there is no assurance, the ultimate cost of products utilizing the
Company's chip stacking technology cannot be firmly established. Since the
Company believes cost will be a major factor in determining utility for many
market segments, the Company will remain at a disadvantage in penetrating these
segments until manufacturing volumes reach materially higher levels than have
been achieved.
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In June 1995, the Company commenced production shipments of an integrated
circuit (IC) chip designed to permit mobile units such as notebook computers and
cellular phones to communicate with printers, modems or other stationary
peripherals by using infrared (IR) signals rather than cables or radio frequency
transmissions. The new chip, called SIRComm, for Serial Infrared Communications
Controller, is believed to be the first dedicated serial IR receiver chip
designed to be completely compliant with the Infrared Data Association's (IrDA)
worldwide infrared wireless connectivity standard. The SIRComm chip
incorporates elements which evolved from ISC's signal extraction analog
circuitry developed over the last decade for military applications. To date,
the Company has shipped more than one million of these parts in the
international marketplace.
POTENTIAL PRODUCT APPLICATIONS
Neural Networks. In 1991, the Company received funding from U.S. Navy's
Office of Naval Research for potential use of its technology in neural networks.
After the successful completion of this phase 1 contract, the Company received a
$5,200,000 follow-on contract from the Navy in June 1993 to further develop the
neural networks technology. This phase of the contract has been completed and
the Company is presently negotiating a second follow-on contract under which the
Company will deliver demonstration products to the Navy. Neural networks
contain large numbers of sensing nodes which continuously interact with each
other, similar to the way that the neurons of a human brain interact to process
sensory stimuli. Neural networks are the subject of scientific inquiry because
pattern recognition and learning tasks, which humans perform well and computers
perform poorly, appear to be dependent on such processing. Neither conventional
computers nor advanced parallel processors have the interconnectivity needed to
emulate neural network processing techniques. The Company believes its chip-
stacking technology offers a way to achieve the very high levels of
interconnectivity necessary to construct an efficient artificial neural network.
To the Company's knowledge, no other presently available packaging approaches
are believed to offer this potential. The full embodiment of this technology is
not expected to yield near-term products for the Company, although it is
anticipated to keep the Company actively involved in advanced R&D relevant to
the Company's long-range business interests. However, elements of this
technology, including a proprietary chip set, are currently being developed with
a view to early product utilization.
DEVELOPMENT CONTRACT
In April 1980, the Company entered into an agreement with R & D Leasing
Ltd., ("RDL"), a limited partnership in which the Company's Chairman of the
Board and a Senior Vice-President are general partners with beneficial
interests, to design an electronic circuit, to develop certain fabrication
processes and to build equipment for testing electronic integrated circuits. In
connection with the development of the electronic test equipment under the RDL
agreement, certain other proprietary fabrication processes were developed to
which RDL retained ownership. Upon the occurrence of certain specified events,
such as the use of RDL's patented fabrication processes in connection with
contracts, the agreement with RDL provides that the Company will pay RDL a
royalty fee of 3.5% of revenues from sales of the basic devices using the
processes created during the development of this equipment. In June 1989, the
Board of Directors approved an agreement with RDL whereby $40,000 of royalty
fees were converted to a long-term note payable and a warrant to purchase shares
of the Company's Common Stock. The note was unsecured, bore no interest and had
a due date of June 30, 1995. The warrant to purchase 200,000 shares of Common
Stock at 20 cents per share had an expiration date of June 30, 1995.
In October 1989, the Board of Directors approved an amendment to the RDL
agreement. Under the amendment the Company will pay RDL a royalty of 3.5% of
all Company sales of the basic devices using the processes created during the
development of the RDL equipment. In addition, RDL is entitled to receive an
amount equal to 7% of all royalties earned by the Company from sales of these
products by the Company's sublicensees. The Company's exclusive rights to the
technology extend to all uses, both government and commercial. RDL agreed to
defer its royalty claims and subordinate them with respect to all other
creditors in exchange for options to purchase up to 1,000,000 shares of the
Company's Common Stock, which are exercisable by applying the deferred royalties
to the purchase. The initial 500,000 options vested immediately at the time of
the initial five year deferral period in October 1989. In October 1994, the
remaining 500,000 options vested upon RDL's extended deferral. The 1,000,000
options are exercisable at $1.00 until October 1999. If RDL exercises its
option in whole or in part, title to RDL's technology would transfer to the
Company and all further royalty obligations would cease. If the option expires
unexercised, the subordination provisions would terminate and the accrued
royalties would be due and payable in the same manner as any other corporate
obligation.
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In October 1990, the Company and RDL consummated an agreement in which full
settlement of the $40,000 note was arranged. RDL agreed to the cancellation of
the Company's $40,000 debt and surrendered the warrant to purchase 200,000
shares of the Company's stock in exchange for a cash payment of $5,000 and
200,000 unregistered shares of the Company's Common Stock.
As of September 29, 1996, the Company had accrued $355,700 in deferred
royalties. With the exception of the 200,000 unregistered shares of the
Company's Common Stock and the $5,000 cash payment to RDL made in connection
with the cancellation of the Company's $40,000 note in October 1990, no
royalties were paid by the Company during fiscal years 1996, 1995 and 1994. The
Company believes that the terms of the foregoing transactions were no less
favorable to the Company than would have been obtained from a nonaffiliated
third party for similar services.
MANUFACTURING
The Company manufactures stacked memory products at its facilities in
Vermont and California. The Vermont facilities are configured for high volume
production where as the California facility is designed for low volume and
prototype production. At the present time, the Company stacks DRAM, SRAM and
FLASH memory die. The stacking process involves a standard process which
fabricates cubes comprising of approximately 50 die layers along with ceramic
cap and base substrates laminated with an extremely thin adhesive layer and
interconnected with a thin-film bus metalization to bring the chip input/output
signals out to the top surface of the stacks. The cubes are then segmented or
split into subsections as required for the particular product configuration
being built. Finally, the cubes, mini-cubes or short stacks are burned in,
tested, graded, kitted for packaging, out-sourced for packaging and screening,
and returned for final test.
The primary components of the Company's non-memory products are integrated
circuits and infrared detectors. The integrated circuits are designed by the
Company for manufacture by others from silicon wafers and other materials
readily available from multiple sources. Due to the ready availability of these
materials, the Company does not have any special arrangements with suppliers for
their purchase. The Company does not produce detectors. However, the Company
has developed a process which enables it to use relatively low cost and
unsophisticated detectors which are generally available from numerous sources.
The primary components of the Company's memory devices are commercial
memory chips. To date the Company has obtained the majority of such chips for
its products from IBM. However, a variety of alternative sources exist for such
commercial products.
Because of the nature of the sophisticated research and development work
performed under its development contracts, the Company designs and assembles
equipment for testing and prototype development. The Company utilizes the
unique capability of this equipment to seek, qualify for and perform additional
contract research and development for its customers. The Company does not have
any manufacturing capability to produce electro-optical or infrared detectors.
Beginning in fiscal year 1993 and through fiscal 1996, the Company
significantly enhanced and expanded its production facilities in California and
Vermont to meet its current and future requirements for commercial production of
stacked memory products.
BACKLOG
At November 24, 1996, the Company's funded backlog was $5,393,100 compared
to $4,991,000 at December 1, 1995. The Company anticipates that all of the
funded backlog will be filled in fiscal 1997. In addition, the Company has
$813,300 of unfunded backlog of contracts which typically is funded when the
previously funded amounts have been expended. The Company is also continuing to
negotiate for additional research contracts and commercial sales, which, if
obtained, could materially increase this backlog. Failure to obtain these
contracts in a timely manner could materially affect the Company's short-term
results.
CUSTOMERS AND MARKETING
The Company anticipates focusing its sensor product marketing efforts on
U.S. military agencies or contractors to those agencies. The Company is
continually seeking and preparing proposals for additional
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contracts. The Company has also begun to develop potential non-military uses of
its technology. Potential commercial applications may include computer-related
electronics packaging and a broad range of industrial recognition devices such
as process control devices and security systems.
In fiscal 1996, contracts with all branches of the U.S. government
accounted for 31 percent of the Company's revenues, the remaining 69 percent of
the Company's revenues was derived from non-government sources. During fiscal
1996, revenues derived from the U.S. Navy and various divisions of Lockheed
Martin Corporation accounted for approximately 16 percent and 44 percent of
total consolidated revenues, respectively. Loss of these customers would have a
material adverse impact on the Company's short-term results.
Contracts with government agencies may be suspended or terminated by the
government at any time, subject to certain conditions. Similar termination
provisions are typically included in agreements with prime contractors. There
is no assurance the Company will not experience suspensions or terminations in
the future.
The Company presently has limited marketing resources and thus focuses its
efforts in specific areas of interest. The Director of Programs coordinates the
marketing activities of senior and technical management with respect to
government programs, while a Senior Vice President directs the marketing efforts
related to computer products. The President and a Marketing Manager direct the
marketing activities of Novalog, Inc. which produces the SIRComm products.
As a result of the post cold-war defense cutbacks, many defense contractors
are experiencing declines in their business base as government agencies' budgets
are reduced. The Company believes that as the defense budget decreases there
will be more emphasis and funds directed to advanced technology systems and
research programs for which the Company is qualified to compete. However, there
can be no assurances that the Company will be successful in competing against
the larger defense contractors for potential programs.
COMPETITION
The demand for high performance semiconductors has produced a wide variety
of competitors and competitive systems, ranging from various three-dimensional
designs to highly dense two-dimensional designs. Some of the Company's
competition is generally believed to be better financed, more experienced and
organizationally stronger than the Company.
The Company is aware of two large companies that have developed competing
approaches to chip stacking. They are Texas Instruments, Inc. (TI) and Thompson
CSF (Thompson). In addition, there are several small companies and divisions of
large companies that have various technologies for stacking a limited number of
chips.
The Company is aware of many companies which are currently servicing the
military focal plane market. These include Santa Barbara Research Center, TI,
Lockheed Martin Corporation, Raytheon, Litton Industries, Infrared Industries,
Inc., EG&G Judson, OptoElectronics-Textron, Inc., Dense Pac Inc., and Boeing
Corporation. The Company believes that many of its competitors have financial,
labor and capital resources greater than those of the Company and there is no
assurance that the Company will be able to compete successfully.
The Company is aware of several companies which currently service the
market for serial infrared detectors. They include Hewlett-Packard, Temic,
Sharp, and IBM, among others, all of whom have financial, labor and capital
resources greater than those of the Company.
RESEARCH AND DEVELOPMENT
The Company believes government and commercial research contracts will
provide the major portion of funding necessary for continuing development of its
products. However, the manufacture of stacked circuitry modules in volume will
require substantial additional funds, which may involve additional equity or
debt financing or a joint venture, license or other arrangement. There can be
no assurance that sufficient funding will be available from government or other
sources or that the Company's products will be successfully developed for volume
production.
The Company's expenditures for research and development for the fiscal
years ended September 29,
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1996, October 1, 1995 and October 2, 1994 were $2,009,700, $1,280,000 and
$844,300, respectively. These expenditures of Company funds were in addition to
the Company's cost of revenues associated with its customer-sponsored research
and development activities. The spending levels of Company funds on research and
development compared to its overall expenses are indicative of the Company's
resolve to maintain its competitive advantage by developing new products and
improving upon its existing technology.
The Company has funded its research and development activities primarily
through contracts with the federal government, with research and development
limited partnerships and with funds from the Company's public and private stock
and bond offerings.
PATENTS, TRADEMARKS AND LICENSES
The Company has a policy of protecting its investment in technology by
seeking to obtain, where practical, patents on the inventions made by its
employees. As of September 29, 1996, 41 U.S. and foreign patents have been
issued and other U.S. patent applications are pending. Foreign patent
applications corresponding to several of the U.S. patents and patent
applications are also pending. There is no assurance that additional patents
will issue in the U.S. or elsewhere. Moreover, the issuance of a patent does
not carry any assurance of successful application, commercial success or
adequate protection. There is no assurance that the Company's existing patents
or any other patent that may issue in the future would be upheld if the Company
seeks enforcement of its patent rights against an infringer or that the Company
will have sufficient resources to prosecute its rights, nor is there any
assurance that patents will provide meaningful protection from competition.
The Company has been advised by its patent counsel, Thomas Plante, Esq.,
that no adverse patent has been found which might create an infringement problem
in the marketing of the Company's HYMOSS and line array focal planes. If others
were to assert that the Company is utilizing technology covered by patents held
by them, the Company would evaluate the necessity and desirability of seeking a
license from the patent holder. There is no assurance that the Company is not
infringing on other patents or that it could obtain a license if it were so
infringing.
Those products and improvements which the Company develops under government
contracts are generally subject to royalty-free use by the government for
government applications. However, the Company has negotiated certain "non-
space" exclusions in government contracts and has the right to file for patent
protection on commercial products which may result from government-funded
research and development activities.
The Company has exclusive rights to technology developed under an agreement
with R & D Leasing, Ltd. ("RDL"), a limited partnership. Under the agreement,
the Company will pay royalties of 3.5% of all direct sales, by the Company, of
the basic devices using the technology. RDL will also receive 7% of all income
earned by the Company from sublicensees. The Company's President and a Senior
Vice-President have a beneficial interest in RDL. See "Development Contracts."
ENVIRONMENTAL MATTERS
The Company believes that it is substantially in compliance with all
regulations concerning the discharge of materials into the environment, and such
regulations have not had a material effect on the capital expenditures or
operations of the Company.
EMPLOYEES
As of September 29, 1996, the Company had 159 full-time employees and 4
consultants. Of the full-time employees, 128 were engaged in engineering,
production and technical support, 5 in sales and marketing and 26 in finance and
administration. None of the Company's employees is represented by a labor union
and the Company has experienced no work stoppages due to labor problems. The
Company considers its employee relations to be excellent.
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ITEM 2. PROPERTIES
The following table sets forth information with respect to the
Company's facilities :
<TABLE>
<CAPTION>
Location Square Feet Lease Expiration
----------------------- ----------- ----------------
<S> <C> <C> <C>
Advanced Technology Operations Costa Mesa, California 19,000 July 1998
Computer Products Operations Burlington, Vermont 20,200 December 1998
Essex Junction, Vermont 20,000 December 1998
Novalog, Inc. Costa Mesa, California 4,100 April 1999
Corporate Costa Mesa, California 6,400 July 1998
</TABLE>
The facilities used by Advanced Technology Operations and Computer Products
Operations include laboratories containing clean rooms for operations requiring
a working environment with reduced atmospheric particles. The facility at Essex
Junction, Vermont contains the cubing line which was established by IBM under a
joint development alliance that IBM and the Company entered into in 1992 to
commercialize the Company's chip-stacking technology. The Company believes that
its facilities are adequate for their respective operations, and that the
facilities of the Company are maintained in good repair.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The following table sets forth the range of representative high and low
bid prices of the Company's Common Stock (Nasdaq SmallCap Market symbol: IRSN)
in the over-the-counter market for the periods indicated, as furnished by NASD,
Inc. These prices represent prices among dealers, do not include retail markups,
markdowns or commissions, and may not represent actual transactions:
<TABLE>
<CAPTION>
Common Stock
Bid Prices
---------------------
High Low
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<S> <C> <C>
Fiscal Year Ended September 29, 1996:
First Quarter $ 9 1/2 $5 1/4
Second Quarter $ 6 1/4 $4 5/8
Third Quarter $ 7 7/8 $4 5/8
Fourth Quarter $ 5 1/8 $2 1/4
Fiscal Year Ended October 1, 1995:
First Quarter $ 7 1/8 $4 13/16
Second Quarter $ 7 7/8 $5 1/2
Third Quarter $ 7 7/8 $6
Fourth Quarter $10 3/8 $7
</TABLE>
On December 20, 1996, the closing bid and asked prices for the Company's
Common Stock were $0.9375 and $1.00, respectively.
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On December 20, 1996, there were approximately 821 stockholders of
record and 9,165 beneficial holders based on information provided by the
Company's transfer agent.
The Company has not paid cash dividends on any class of its stock since
its incorporation. Under Delaware law there are certain restrictions which limit
the Company's ability to pay cash dividends in the future.
ITEM 6. SELECTED FINANCIAL DATA.
The following table summarizes certain selected consolidated financial
data and is qualified by the more detailed Consolidated Financial Statements
incorporated herein by reference (see Item 8, below):
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
----------------------------------------------------------------------------
September 29, October 1, October 2, October 3, September 27,
1996 1995 1994 1993 1992
------------ ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Consolidated Statement of Operations Data:
- ------------------------------------------
Total revenues $ 12,024,200 $ 8,041,400 $ 5,139,400 $ 4,286,300 $3,788,300
Loss from operations (11,154,700) (3,071,500) (2,629,500) (1,552,100) (920,100)
Net loss (11,518,000) (3,035,800) (2,463,900) (1,507,600) (895,800)
Loss per common and
common equivalent share $ (0.68) $ (0.20) $ (0.18) $ (0.12) $ (0.08)
============ =========== =========== =========== ==========
Weighted average number of
shares outstanding 16,874,300 14,966,500 14,141,500 12,865,800 11,430,900
============ =========== =========== =========== ==========
</TABLE>
Loss per common and common equivalent shares includes, where applicable,
cumulative dividends on Preferred Stock which have not been declared or paid.
<TABLE>
<CAPTION>
September 29, October 1, October 2, October 3, September 27,
1996 1995 1994 1993 1992
------------- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Consolidated Balance Sheet Data:
- --------------------------------
Current assets $ 9,648,200 $ 9,927,500 $ 6,795,500 $2,135,900 $4,189,300
Current liabilities $ 5,787,100 $ 3,545,400 $ 1,355,400 $ 739,000 $ 571,700
Working capital $ 3,861,100 $ 6,382,100 $ 5,440,100 $1,396,900 $3,617,600
Total assets $21,742,200 $15,609,200 $10,355,400 $3,897,500 $4,600,000
Long-term debt $ 6,565,600 $ 2,451,200 $ 81,100 $ 62,600 $ 64,300
Shareholders' equity $ 8,312,700 $ 9,494,100 $ 8,800,400 $2,977,400 $3,845,500
</TABLE>
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION.
The information required by Item 7 of this report is set forth on pages
2 through 4 of the Company's 1996 Annual Report to Stockholders and is
incorporated by reference in this Annual Report on Form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements, together with the report thereon of Price
Waterhouse LLP dated January 10, 1997, appearing on pages 5 through 17 of the
Company's 1996 Annual Report to Stockholders are incorporated by reference in
this Annual Report on Form 10-K. With the exception of the aforementioned
information and the information incorporated in Item 7, the 1996 Annual Report
to Stockholders is not to be deemed filed as part of this Annual Report on Form
10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
The following items included in the Company's Definitive Proxy
Statement dated January 24, 1997 to be used in connection with the Company's
Annual Meeting of Stockholders to be held on February 28, 1997 are incorporated
herein by reference:
<TABLE>
<CAPTION>
Pages in Proxy Statement
------------------------
<S> <C>
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. 2-5
ITEM 11. EXECUTIVE COMPENSATION. 9-13
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT. 7-9
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. 15
</TABLE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this report:
1. Financial Statements:
<TABLE>
<CAPTION>
Pages in
Annual Report*
--------------
<S> <C>
Consolidated Balance Sheet 5
Consolidated Statement of Operations 6
Consolidated Statement of Shareholders' Equity 7
Consolidated Statement of Cash Flows 8
Notes to Consolidated Financial Statements 9-16
Report of Independent Accountants 17
</TABLE>
9
<PAGE>
* Incorporated by reference from the indicated pages of the 1996 Annual
Report to Stockholders.
2. Financial Statement Schedules:
Report of Independent Accountants on Financial Statements
Schedules for the fiscal years ended September 29, 1996, October 1, 1995,
and October 2, 1994:
Schedule II - Valuation and Qualifying Accounts
All other schedules have been omitted because they are not applicable, or
not required, or because the required information is included in the
financial statements or notes thereto which have been incorporated herein
by reference.
3. Exhibits - The following is a list of the exhibits to this report:
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
- ------- -------------------
<C> <S>
3.1 Certificate of Incorporation, as amended to date. (8)
3.2 By-Laws, as amended to date.
4.1 Specimen Common Stock certificate. (8)
4.2 Form of Representative's Warrants. (9)
10.1 (A) 1981 Incentive Stock Option Plan and 1981 Nonstatutory Stock Option Plan, as amended to date, and (B) Form of Stock
Option Agreement. (1)(2)
10.2 Lease Agreements for the premises at 3001 Redhill Avenue, Building III, Costa Mesa, California. (11)
10.3 Employee Stock Bonus Plan and Trust Agreement dated June 29, 1982 effective December 31, 1982 (3), Amendment
dated December 14, 1982. (4)
10.4 Amendment to Employee Stock Bonus Plan and Trust Agreement dated September 25, 1990. (8)
10.5 Master Trust Agreement for Employee Deferred Benefit Plans dated August 22, 1990. (5)
10.6 Agreement with R&D Leasing, Ltd. and Note Payable dated June 23, 1989. (6)
10.7 License Agreement with R&D Leasing, Ltd. dated October 20, 1989. (6)
10.8 Agreement with R&D Leasing, Ltd. dated October 1, 1990. (7)
10.9 Contract between the Company and U.S. Army Strategic Defense Command dated September 28, 1990. (7)
10.10 1991 Stock Option Plan, as adopted by the Board of Directors December 9, 1991. (8)
10.11 Form of Stock Option Agreement for 1991 Stock Option Plan. (9)
10.12 Contract between the Company and Office of Naval Research dated July 8, 1993. (10)
10.13 Amendment to Employee Stock Bonus Plan and Trust agreement dated October 4, 1993. (12)
10.14 Lease Agreement for the premises at 1 Green Tree Park, South Burlington, Vermont. (12)
10.15 Contract between the Company and Naval Air Warfare Center dated March 31, 1995. (12)
10.16 License Agreement with Unitrode Integrated Circuits Corporation dated May 30, 1995. (12)
10.17 Purchase Order from Cray Research, Inc. dated May 8, 1995. (12)
10.18 Subcontract between the Company and Lockheed Sanders, Inc. dated June 30, 1995. (12)
10.19 Office, Manufacturing Facility, and Equipment Lease with International Business Machines Corporation (13)
10.20 Form of 8% Series A Convertible Subordinated Debentures Due 1998 (13)
10.21 Form of 8% Convertible Subordinated Debentures Due 1998 (13)
10.22 Contract between the Company and Nasa Management Office - JPL dated March 12, 1996
10.23 Contract between the Company and Office of Naval Research dated July 19, 1996
10.24 Contract between the Company and Wright-Patterson Air Force Base dated August 12, 1996
</TABLE>
10
<PAGE>
<TABLE>
<C> <S>
10.25 Purchase Order from Loral Federal Systems Co. dated April 26, 1996
11 Statement re Computation of Per Share Earnings.
13 Portions of Registrant's Annual Report to Stockholders for the fiscal year ended September 29, 1996.
21 Subsidiaries of the Registrant
23.1 Consent of Independent Accountants
23.2 Consent of Thomas Plante, Esq., Patent Counsel
27 Financial Data Schedule
</TABLE>
_________________________
(1) Incorporated by reference to Part II of Registrant's Registration Statement
on Form S-18 filed with the Commission's Los Angeles Regional Office on
December 23, 1981 (Registration No. 2-75512-LA)(the-"S-18 Registration
Statement").
(2) Incorporated by reference to Part II of Pre-effective Amendment No. 1 to
the S-18 Registration Statement filed with the Commission's Los Angeles
Regional Office on February 10, 1982; 1987 amendment filed by amendment to
Form 10-K for the fiscal year ended September 27, 1987 .
(3) Incorporated by reference to Part II of Pre-effective Amendment No. 3 to
the S-18 Registration Statement filed with the Commission's Los Angeles
Regional Office on May 27, 1982.
(4) Incorporated by reference to Part II of Registrant's Registration Statement
on Form S-1 filed with the Commission on March 23, 1983 (Registration No.
2-82596) (the "S-1 Registration Statement").
(5) Incorporated by reference to Part II of Pre-effective Amendment No. 3 to
the Form S-2 filed with the Commission on March 3, 1987 (Registration No.
33-10134).
(6) Incorporated by reference to Part IV of Registrant's Annual Report on Form
10-K for the fiscal year ended October 1, 1989.
(7) Incorporated by reference to Part IV of Registrant's Annual Report on Form
10-K for the fiscal year ended September 30, 1990.
(8) Incorporated by reference to Part IV of Registrant's Annual Report on Form
10-K for the fiscal year ended September 29, 1991.
(9) Incorporated by reference to Part II of Pre-effective Amendment No. 2 to
the Form S-2 filed with the Commission on July 9, 1992 (Registration No.
33-47977).
(10) Incorporated by reference to Part IV of Registrant's Annual Report on Form
10-K for the fiscal year ended October 3, 1993.
(11) Incorporated by reference to Part IV of Registrant's Annual Report on
Form 10-K for the fiscal year ended October 2, 1994.
(12) Incorporated by reference to Part IV of Registrant's Annual Report on
Form 10-K for the fiscal year ended October 1, 1995.
(13) Incorporated by reference to Registrant's Form 8-K dated April 19, 1996.
(b) Reports on Form 8-K:
No report on Form 8-K was filed by the Company with respect to the
quarter ended September 29, 1996.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
IRVINE SENSORS CORPORATION
By /s/ JAMES ALEXIOU
---------------------------
James Alexiou
Chief Executive Officer
Date: January 10, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated:
/s/ JAMES ALEXIOU
- ----------------------------------- -------------------------------
James Alexiou Thomas H. Lenagh, Director
Chief Executive Officer Date:
(Principal Executive Officer)
Date: January 10, 1997
/s/ JOHN C. CARSON /s/ JOHN J. STUART, JR.
- ----------------------------------- --------------------------------
John C. Carson, Director John J. Stuart, Jr.
Date: January 10, 1997 Chief Financial Officer
(Principal Accounting Officer)
Date: January 10, 1997
/s/ JOANNE S. CARSON /s/ FRANK P. RAGANO
- ----------------------------------- ---------------------------------
Joanne S. Carson, Director Frank P. Ragano, Director
Date: January 10, 1997 Date: January 10, 1997
- -----------------------------------
Marc Dumont, Director
Date:
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
--------------------------------
To the Board of Directors of
Irvine Sensors Corporation
Our audits of the consolidated financial statements referred to in our report
dated January 10, 1997 appearing on page 17 of the 1996 Annual Report to
Shareholders of Irvine Sensors Corporation (which report and consolidated
financial statements are incorporated by reference in this Annual Report on Form
10-K) also included an audit of the Financial Statement Schedules listed in Item
14(a) of this Form 10-K. In our opinion, these Financial Statement Schedules
present fairly, in all material respects, the information set forth therein when
read in conjunction with the related consolidated financial statements.
/s/ PRICE WATERHOUSE LLP
Costa Mesa, California
January 10, 1997
13
<PAGE>
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
Additions
Balance at Charged to Balance
Beginning Costs and at End
of Year Expenses Deductions of Year
------------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Year ended September 29, 1996:
- ------------------------------
Allowance for doubtful accounts $ 10,000 $ - $ - $ 10,000
Inventory reserves 380,800 1,662,900 - 2,043,700
Year ended October 1, 1995:
- ---------------------------
Allowance for doubtful accounts $ 10,000 $ - $ - $ 10,000
Inventory reserves - 380,800 - 380,800
Year ended October 2, 1994:
- ---------------------------
Allowance for doubtful accounts $ 10,000 $ - $ - $ 10,000
Inventory reserves - - - -
</TABLE>
14
<PAGE>
EXHIBIT 3.2
RESTATED BY-LAWS
OF
IRVINE SENSORS CORPORATION
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The address of the registered office of the
-----------------
Corporation in the State of Delaware shall be 410 South State Street, Dover,
County of Kent, and the name of its registered agent at such address is
Incorporating Services, Ltd.
SECTION 2. OTHER OFFICES. The Corporation may also have offices at such
-------------
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
SECTION 3. BOOKS. The books of the Corporation may be kept within or
-----
without the State of Delaware as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. PLACE OF MEETINGS. All meetings of the stockholders shall be
-----------------
held at such place either within or without the State of Delaware and on such
date and at such time as may be designated from time to time by the Board of
Directors or the Chairman thereof.
SECTION 2. ANNUAL MEETINGS. Annual meetings of stockholders shall be held
---------------
on February 15 of each year, or at such other date designated by the Board of
Directors for the purpose of electing directors and transacting such other
business as may properly be brought before the meeting.
Written notice of each annual meeting shall be given to each stockholder
entitled to vote, either personally, or by mail or other means of written
communication, charges prepaid, addressed to such stockholder at his address
appearing on the books of the Corporation for the purpose of notice. If no
address appears or is given, notice shall be sent by mail or other means of
written communication addressed to the place where the principal place of the
Corporation is situated, or published at least once in some newspaper of general
circulation in the county in which said office is located. Notice shall be
deemed to have been given at the time when delivered personally or deposited in
the mail or sent by other means of written communication. All such notice shall
be sent to each stockholder entitled thereto not less than ten (10) days nor
more than fifty (50) days
<PAGE>
before each annual meeting, and shall specify the place, the day and the hour of
such meeting, and shall state such other matters, if any, as may be expressly
required by statute.
SECTION 3. NOTIFICATION OF BUSINESS TO BE TRANSACTED AT MEETING. At an
----------------------------------------------------
annual or special meeting of stockholders, only such business shall be conducted
as shall have been properly brought before the meeting. To be properly brought
before an annual or special meeting, business must be (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors, (b) otherwise properly brought before the meeting by or
at the direction of the Board of Directors, or (c) otherwise properly brought
before the meeting by a stockholder of the Corporation. For business to be
properly brought before an annual or special meeting by a stockholder, the
stockholder must be given timely notice thereof in writing to the Secretary of
the Corporation. To be timely with respect to an annual meeting of stockholders,
a stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation, not less than 120 days prior to
the one year anniversary of the date on which the Corporation's proxy statement
for the prior year's meeting was mailed to stockholders; provided, however, that
in the event that no proxy statement was mailed in connection with the prior
annual meeting, notice by the stockholder to be timely must be received no later
than the close of business on the 10/th/ day following the day on which notice
of the date of the annual meeting was mailed by the Corporation or the date of
the annual meeting was first publicly disclosed by the Corporation, whichever is
earlier. To be timely with respect to a special meeting of stockholders, a
stockholder's notice must be delivered to or mailed and received at the
principal executive officers of the Corporation, not less than 120 days in
advance of the meeting or ten days after the date on which notice of such
meeting is first given to stockholders , whichever is later. A stockholder's
notice to the Secretary shall set forth as to each matter the stockholder
proposes to bring before the annual or special meeting (a) a brief description
of the business desired to be brought before the meeting and the reasons for
conducting such business at the meeting, (b) the name and address, as they
appear on the Corporation's books, of the stockholder proposing such business,
(c) the class and number of shares of the Corporation which are beneficially
owned by the stockholder, and (d) any material interest of the stockholder in
such business. Notwithstanding anything in the By-laws to the contrary, no
business shall be conducted at any annual or special meeting except in
accordance with the procedures set forth in this Article II, Section 3. The
Chairman of the annual or special meeting shall, if the facts warrant, determine
and declare to the meeting that business was not properly brought before the
meeting and in accordance with the provisions of this Article II, Section 3, and
if he should so determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.
SECTION 4. NOTIFICATION OF NOMINATIONS. Only persons who are nominated in
---------------------------
accordance with the procedures set forth in this Article II, Section 4 shall be
eligible for election as Directors. Nominations of persons for election to the
Board of Directors of the Corporation at a meeting of stockholders may be made
by or at the direction of the Board of Directors or by any stockholder of the
Corporation entitled to vote for the election of Directors at the meeting who
complies with the notice procedures set forth in this Article
-2-
<PAGE>
II, Section 4. Such nominations, other than those made by or at the direction of
the Board of Directors, shall be made pursuant to timely notice in writing to
the Secretary of the Corporation. To be timely with respect to an annual meeting
of stockholders, a stockholder's notice shall be delivered to or mailed and
received at the principal executive offices of the Corporation not less than 120
days prior to the one year anniversary of the date on which the Corporation's
proxy statement for the prior year's meeting was mailed; provided, however, that
in the event that no proxy statement was mailed in connection with the prior
annual meeting, notice by the stockholder to be timely must be so received not
later than the close of business on the 10/th/ day following the day on which
notice of the date of the annual meeting was mailed by the Corporation or the
date of the annual meeting was first publicly disclosed by the Corporation,
whichever is earlier. To be timely with respect to a special meeting of
stockholders, a stockholder's notice must be delivered to or mailed and received
at the principal executive officers of the Corporation, not less than 120 days
in advance of the meeting or ten days after the date on which notice of such
meeting is first given to stockholders by the Corporation, whichever is later.
In either case, a stockholder's notice shall set forth (a) as to each person
whom the stockholder proposes to nominate for election or reelection as a
Director, (i) the name, age, business address and residence address of each such
person, (ii) the principal occupation or employment of such person, (iii) the
class and number of shares of the Corporation that are beneficially owned by
such person and (iv) any other information relating to such person that it
required to be disclosed in solicitations of proxies for election of Directors,
or is otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (including,, without limitation,
such person's written consent to being named in the proxy statement as a nominee
and to serving as a Director,, if elected); and (b) as to the stockholder giving
the notice (i) the name and address,, as they appear on the Corporation's books,
of such stockholder and (ii) the class and number of shares of the Corporation
that are beneficially owned by such stockholder. At the request of the Board of
Directors, any person nominated by the Board of Directors for election as a
Director shall furnish to the Secretary of the Corporation the information
required to be set forth in a stockholder's notice of nomination that pertains
to the nominee. No person shall be eligible for election as a Director of the
Corporation unless nominated in accordance with the procedures set forth in this
Article II, Section 4. The Chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by the By-laws, and if he should so
determine, he shall so declare to the meeting, and the defective nomination
shall be disregarded.
SECTION 5. SPECIAL MEETINGS. Special meetings of stockholders, for any
----------------
purpose or purposes, may be called by the President or by the Board of
Directors, or by one or more of the stockholders holding not less than ten
percent of the voting power of the Corporation. In the case of a special meeting
called by one or more stockholders, the stockholder(s) shall give written notice
to the Secretary of the Corporation, and the Board of Directors shall fix the
record date to determine stockholders entitled to vote at the special meeting
and shall set a date for the special meeting which shall not be less than 90 nor
more than 150 days from receipt of the stockholder(s) notice. Except in such
cases where other express provision is made by statute, notice of such special
meetings shall be
-3-
<PAGE>
given in the same manner as for annual meetings of stockholders. Special
meetings may not be called by any other person.
SECTION 6. NOTICE; WAIVER OF NOTICE. Whenever stockholders are required
------------------------
or permitted to take any action at a meeting, a written notice of the meeting
shall be given which shall state the place, date and hour of the meeting, and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called. Unless otherwise required by law, such notice shall be given not
less than ten nor more than 60 days before the date of the meeting to each
stockholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be given when deposited in the mail, postage prepaid,
directed to the stockholder at his address as it appears on the records of the
Corporation. A written waiver of any such notice signed by the person entitled
thereto, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends the meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
SECTION 7. QUORUM; ADJOURNMENT. Except as otherwise required by law or
-------------------
provided by the Certificate of Incorporation, the holders of a majority of the
capital stock issued and outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum for the transaction of
business at all meetings of the stockholders. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting of the time and place of the adjourned
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed. If the adjournment is for more than 30 days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder entitled to vote at the
meeting as in the case of an original meeting.
SECTION 8. ACTION BY WRITTEN CONSENT. Unless otherwise restricted by the
-------------------------
Certificate of Incorporation, any action required or permitted to be taken at
any annual or special meeting of the stockholders may be taken without a
meeting, without a vote, if a consent, in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted, and the writing or writings are filed with the minutes of the
proceedings of the stockholders. The foregoing notwithstanding, no action
required to be taken or which may be taken at any annual or special meeting of
stockholders of the Corporation may be taken without a meeting, unless such
action is initiated by the Board of Directors or written notice of an intention
to solicit consents to take such action is given to the Secretary of the
Corporation by one or more of the stockholders holding not
-4-
<PAGE>
less than ten percent of the voting power of the Corporation. A notice of
intention to solicit consents by one or more of the stockholders shall be
delivered or mailed to the Secretary and shall set forth as to each matter on
which the stockholder(s) propose to obtain written consent of the stockholders
(a) a description of the action desired to be taken by written consent and the
reasons for taking such action, (b) the name and address, as they appear on the
Corporation's books, of the stockholder(s) proposing such action, (c) the class
and number of shares of the Corporation which are beneficially owned by the
stockholder(s), and (d) any material interest of the stockholder(s) in such
action. A notice of intention to solicit consents by one or more stockholders
must be delivered to or mailed and received at the principal executive offices
of the Corporation, to the attention of the Corporation's Secretary. Within 30
days of the receipt of such notice, the Board of Directors shall fix a record
date to determine the stockholders entitled to give effective consents, and
shall fix a date for effectiveness of the delivery of any consents which shall
be not less than 90 and not more than 150 days from the date of receipt of such
notice of intention to solicit consents.
SECTION 9. VOTING. Except as otherwise required by law, or provided by
------
the Certificate of Incorporation or these By-Laws, any question brought before
any meeting of stockholders shall be decided by the vote of the holders of a
majority of the stock represented and entitled to vote thereat. Unless
otherwise provided in the Certificate of Incorporation, each stockholder
represented at a meeting of stockholders shall be entitled to cast one vote for
each share of the capital stock entitled to vote thereat held by such
stockholder. Such votes may be cast in person or by proxy, but no proxy shall
be voted on or after three years from its date, unless such proxy provides for a
longer period. Voting may be by voice or ballot as the Chairman of the meeting
shall determine; provided, however, that all elections for Directors must be by
ballot upon demand made by a stockholder at any election and before the voting
begins.
The Corporation may merge into or consolidate with any corporation (other
than a wholly owned subsidiary corporation) or effect any transaction or series
of related transactions in which more than 50% of the voting power of the
corporation is disposed of only with the approval (by vote or written consent,
as provided by law) of the holders of at least sixty-six and two-thirds percent
(66-2/3%) of the outstanding shares entitled to vote thereon, notwithstanding
that applicable law would otherwise permit such actions with the approval of a
lesser percentage.
On any matter other than the election of the directors, any stockholder may
vote part of the shares in favor of the proposal and refrain from voting the
remaining shares or vote against the proposal but if the stockholder fails to
specify the number of shares which the stockholder is voting affirmatively, it
will be conclusively presumed that the stockholder's approving vote is with
respect to all shares which the stockholder is entitled to vote.
At a stockholders' meeting at which directors are to be elected,
stockholders shall be entitled to cumulate votes (i.e., cast for any candidate a
number of votes greater than
-5-
<PAGE>
the number of votes which such stockholder normally is entitled to cast);
provided, however, that no stockholder shall be entitled to cumulate votes
unless the candidates' names have been placed in nomination prior to
commencement of the voting and a stockholder has given notice at the meeting,
prior to commencement of the voting, of the stockholder's intention to cumulate
votes. If any stockholder has given such a notice, then every stockholder
entitled to vote may cumulate votes for candidates placed in nomination and give
one candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which that stockholder's shares are
normally entitled, or distribute the stockholder's votes on the same principle
among any or all of the candidates, as the stockholder thinks fit. The
candidates receiving the highest number of affirmative votes, up to the number
of directors or be elected, shall be elected.
SECTION 10. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The officer who has
-------------------------------------
charge of the stock ledger of the Corporation shall prepare and make, at least
ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of the stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the time and place of the meting during the whole time thereof, and may be
inspected by any stockholder of the Corporation who is present.
SECTION 11. STOCK LEDGER. The stock ledger of the Corporation shall be
------------
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 10 of this Article II or the books of the
Corporation or to vote in person or by proxy at any meeting of stockholders.
SECTION 12. INSPECTORS OF ELECTION. In advance of any meeting of
----------------------
stockholders, the Board of Directors may appoint one or more persons (who shall
not be candidates for office) as inspectors of election to act at the meeting.
If inspectors are not so appointed, or if any appointed inspector fails to
appear or fails or refuses to act at a meeting, the Chairman of any meeting of
stockholders may, and on the request of any stockholder or his proxy shall,
appoint inspectors of election at the meeting. In the event of any dispute
between or among the inspectors, the determination of the majority of the
inspectors shall be binding.
SECTION 13. ORDER OF BUSINESS. The order and manner of transacting
-----------------
business at all meetings of stockholders shall be as determined by the Chairman
of the meeting.
-6-
<PAGE>
ARTICLE III
DIRECTORS
SECTION 1. POWERS. Except as otherwise required by law or provided by the
------
Certificate of Incorporation, or the By-Laws, the business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors. Without prejudice to such general powers, but subject to the same
limitations, it is hereby expressly declared that the Directors shall have the
following powers, to wit:
First: To select and remove all the officers, agents and employees of the
-----
Corporation, prescribe such powers and duties for them as may not be
inconsistent with law, with the Articles of Incorporation or the By-Laws, fix
their compensation, and require from them security for faithful service.
Second: To conduct, manage and control the affairs and business of the
------
Corporation, and to make such rules and regulations therefor not inconsistent
with law, or with the Articles of Incorporation or the By-Laws, as they may deem
best.
Third: To change the principal office for the transaction of the business
-----
of the Corporation from one location to another within the same county; to fix
and locate from time to time or more subsidiary offices of the Corporation
within or without the State of California; to designate any place within or
without the State of California for the holding of any stockholders' meeting or
meetings; and to adopt, make and use a corporate seal, and to prescribe the
forms of certificates of stock, and to alter the form of such seal and of such
certificates from time to time, as in their judgment they may deem best provided
such seal and such certificate shall at all times comply with the provisions of
law.
Fourth: To authorize the issuance of shares of stock of the Corporation
------
from time to time, upon such terms and for such considerations as may be lawful.
Fifth: To borrow money and incur indebtedness for the purposes of the
-----
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.
Sixth: To appoint an executive committee and other committees, and to
-----
delegate to the executive committee any of the powers and authority of the Board
in the management of the business and affairs of the Corporation, except the
power to declare dividends and to adopt, amend or repeal By-Laws. The executive
committee shall be composed of two or more Directors.
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<PAGE>
SECTION 2. NUMBER OF DIRECTORS. The Board of Directors shall consist of
-------------------
not less than six (6) nor more than eleven (11). The exact number of directors
shall be nine (9) until changed, within the limits specified above, by a Bylaw
amending this Section, duly adopted by the Board of Directors or by the
stockholders. The indefinite number of directors may be changed, or a definite
number fixed without provision for an indefinite number, by a duly adopted
amendment to the Certificate of Incorporation or by an amendment to this Bylaw
duly adopted by the vote or written consent of holders of a majority of the
outstanding shares entitled to vote; provided, however, that an amendment
reducing the number or the minimum number of directors to a number less than
five (5) cannot be adopted if the votes cast against its adoption at a meeting
of the stockholders, or the shares not consenting in the case of action by a
written consent, are equal to more than 16-2/3% of the outstanding shares
entitled to vote. No amendment may change the stated maximum number of
authorized directors to a number greater than two times the stated minimum
number of directors minus one.
SECTION 3. ELECTION AND TERM OF OFFICE. Except as provided in Section 3
---------------------------
of this Article III, directors shall be elected by a majority of the votes cast
at annual meetings of stockholders, but if any such annual meeting is not held,
or the directors are not elected thereat, the directors may be elected at any
special meeting of stockholders held for that purpose. All directors so elected
shall hold office until his successor is duly elected and qualified, or until
his earlier death, resignation or removal. Any director may resign at any time
effective upon giving written notice to the Board of Directors, unless the
notice specifies at a later time for such resignation to become effective.
Unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective. If the resignation of a director is
effective at a future time, the Board of Directors may elect a successor prior
to such effective time to take office when such resignation becomes effective.
Directors need not be stockholders.
SECTION 4. VACANCIES. Vacancies resulting from death, resignation,
---------
removal or otherwise and newly created directorships resulting from any increase
in the authorized number of directors may be filled solely by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. Each director so selected shall hold office for the remainder of the
full term of office of the former director which such director replaces and
until his or her successor is duly elected and qualified, or until his earlier
death, resignation or removal. No decrease in the authorized number of
directors constituting the Board of Directors shall shorten the term of any
incumbent directors.
SECTION 5. ANNUAL MEETING. The Board of Directors shall meet for the
--------------
purpose of organization, the election of officers and the transaction of other
business, as soon as practicable after each annual meeting of stockholders, on
the same day and at the same place where such annual meeting shall be held.
Notice of such meeting need not be given. In the event such annual meeting is
not so held, the annual meeting of the Board of Directors may be held at such
place, either within or without the State of Delaware, on
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<PAGE>
such date and at such time as shall be specified in a notice thereof given as
hereinafter provided in Section 7 of this Article III or in a waiver of notice
thereof.
SECTION 6. ORGANIZATION MEETING. Immediately following each annual
--------------------
meeting of stockholders, the Board of Directors shall hold a regular meeting for
the purpose of organization, election of officers, and the transaction of other
business. Notice of such meeting is hereby dispensed with.
SECTION 7. OTHER REGULAR MEETINGS. Other regular meetings of the Board of
----------------------
Directors may be held at such places within or without the State of Delaware at
such date and time as the Board of Directors may from time to time determine
and, if so determined by the Board of Directors, notices thereof need not be
given.
SECTION 8. SPECIAL MEETINGS. Special meetings of the Board of Directors
----------------
may be called by the Chairman of the Board, the President or by any two
directors. Notice of a special meeting of the Board of Directors shall be given
to each director in such manner as is determined by the Board of Directors at
least 48 hours prior to the date of the meeting.
SECTION 9. QUORUM; VOTE REQUIRED FOR ACTION; ADJOURNMENT. Except as
---------------------------------------------
otherwise required by law, or provided in the Certificate of Incorporation or
these By-Laws, a majority of the directors shall constitute a quorum for the
transaction of business at all meetings of the Board of Directors and the
affirmative vote of not less than a majority of the directors present at any
meeting at which there is a quorum shall be the act of the Board of Directors.
If a quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting, from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
A meeting at which a quorum is initially present may continue to transact
business, notwithstanding the withdrawal of directors, if any action taken is
approved by at least a majority of the required quorum to conduct that meeting.
When a meeting is adjourned to another time or place (whether or not a quorum is
present), notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken.
At the adjourned meeting, the Board of Directors may transact any business which
might have been transacted at the original meeting.
SECTION 10. ACTION BY WRITTEN CONSENT. Unless otherwise restricted by the
-------------------------
Certificate of Incorporation, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting if all the members of the Board of Directors or committee, as
the case may be, consent thereto in writing, and the writing are filed with the
minutes of the proceedings of the Board of Directors or committee.
SECTION 11. TELEPHONIC MEETINGS. Unless otherwise restricted by the
-------------------
Certificate of Incorporation, members of the Board of Directors of the
Corporation, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors or such committee, as the
case may be, by conference telephone or
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<PAGE>
similar communications equipment by means of which all persons participating in
the meeting can year each other. Participation in a meeting pursuant to this
Section 11 shall constitute presence in person at such meeting.
SECTION 12. COMMITTEES. The Board of Directors may, by resolution passed
----------
by a majority of the entire Board, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The
Board of Directors may designate one or more directors as alternate members of
any such committee, who may replace any absent or disqualified member at any
meeting of the committee. In the event of absence or disqualification of a
member of a committee, and in the absence of a designation by the Board of
Directors of an alternate member to replace the absent or disqualified member,
the committee member or members present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
the absent or disqualified member. Any committee, to the extent allowed by law
and as provided in the resolution establishing such committee, shall have and
may exercise all the power and authority of the Board of Directors in the
management of the business and affairs of the Corporation. Each committee shall
report to the Board of Directors when required.
SECTION 13. COMPENSATION. The directors may be paid such compensation for
------------
their services as the Board of Directors shall from time to time determine.
Directors who receive salaries as officers or employees of the Corporation shall
not receive additional compensation for their services as directors.
SECTION 14. INTERESTED DIRECTORS. No contract or transaction between the
--------------------
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers, or have a
financial interest, shall be void or violable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the Board of Directors or the committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such purpose
if (a) the material facts as to his or their relationship or interest and as to
the contract or transaction are disclosed or are known to the Board of Directors
or the committee, and the Board of Directors or committee in good faith
authorizes the contract or transaction by the affirmative vote of a majority of
the disinterested directors, even though the disinterested directors be less
than a quorum; or (b) the material facts as to his or their relationship or
interest and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or (c) the
contract or transaction is fair as to the Corporation as to the time it is
authorized, approved or ratified, by the Board of Directors, a committee
thereof, or the stockholders. Common or disinterested directors may be counted
in determining the presence of a quorum at a meeting of the Board of Directors
or of a committee which authorizes the contract or transaction.
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<PAGE>
SECTION 15. PREFERRED STOCK PROVISIONS. Notwithstanding the foregoing,
--------------------------
whenever the holders of any one or more classes or series of stock issued by
this Corporation having preference over the common stock as to dividends or upon
liquidation, shall have the right, voting separately by class or series to elect
directors at an annual or special meeting of stockholders, the election, term of
notice, filling of vacancies, nominations, terms of removal and other features
of such directorships shall be governed by the terms of Article IV of the
Certificate of Incorporation and the resolution or resolutions establishing such
class or series adopted pursuant thereto.
ARTICLE IV
OFFICERS
SECTION 1. EXECUTIVE OFFICERS. The executive officers of the Corporation
------------------
shall be a President, a Chief Financial Officer and a Secretary who shall have
the duty, among other things, to record the proceedings of the meetings of
stockholders and directors in a book kept for that purpose. The Corporation may
also have such other executive officers, including one or more Vice Presidents,
as the Board may in its discretion appoint. The Board of Directors, if it so
determines, may appoint a Chairman of the Board and a Vice Chairman of the Board
from among its members. Any number of offices may be held by the same person.
SECTION 2. ELECTION, TERM OF OFFICE AND REMUNERATION. The executive
-----------------------------------------
officers of the Corporation shall be elected annually by the Board of Directors
at a regular meeting thereof. Each such officer shall hold office until his
successor is elected and qualified, or until his earlier death, resignation or
removal. The remuneration of all officers of the Corporation shall be fixed by
the Board of Directors. Any vacancy in any office shall be filled in such
manner as the Board of Directors shall determine.
SECTION 3. SUBORDINATE OFFICERS. In addition to the executive officers
--------------------
enumerated in Section 1 of this Article IV, the Corporation may have one or more
assistant treasurers and assistant secretaries and such other subordinate
officers, agents and employees as the Board of Directors may deem necessary,
each of whom shall hold office for such period as the Board of Directors may
from time to time determine. The Board of Directors may delegate to any
executive officer the power to appoint and to remove any such subordinate
officers, agents or employees.
SECTION 4. REMOVAL. Except as otherwise delegated to an executive officer
-------
with respect to subordinate officers, any officer may be removed, with or
without cause, at any time, by resolution adopted by the Board of Directors.
Such removal shall be without prejudice to the contractual rights of such
officer, if any, with the Corporation.
SECTION 5. RESIGNATIONS. Any officer may resign at any time by giving
------------
written notice to the Board of Directors (or to a principal officer of the Board
of Directors has
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<PAGE>
delegated to such principal officer the power to appoint and to remove such
officer). The resignation of any officer shall take effect upon receipt of
notice thereof or at such later time as shall be specified in such notice;
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
SECTION 6. POWERS AND DUTIES. The Board of Directors may designate an
-----------------
officer as the Chief Executive Officer. The Chief Executive Officer shall,
subject to the direction and control of the Board of Directors, be the general
manager of, and supervise and direct, the business and affairs of the
Corporation and the conduct of the officers of the Corporation. The other
officers of the Corporation shall have such powers and perform such duties
incident to each of their respective offices and such other duties as may from
time to time be conferred upon or assigned to them by the Board of Directors or
the Chief Executive Officer.
SECTION 7. CHAIRMAN OF THE BOARD. The Chairman of the Board, if there
---------------------
shall be such an officer, shall, if present, preside at all meetings of the
Board of Directors, and exercise and perform such other powers and duties as may
be from time to time assigned to him by the Board of Directors or prescribed by
these By-Laws.
SECTION 8. PRESIDENT. Subject to such supervisory powers, if any, as may
---------
be given by the Board of Directors to the Chairman of the Board, if there be
such an officer, the President shall be the chief executive officer of the
corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and affairs of the
corporation. He shall preside at all meetings of the stockholders and, in the
absence of the Chairman of the Board, at all meetings of the Board of Directors.
He shall be ex officio a member of all the standing committees, including the
executive committee, if any, and shall have the general powers and duties of
management usually vested in the office of president of a corporation, and shall
have such other powers and duties as may be prescribed by the Board of Directors
or these By-Laws.
SECTION 9. VICE PRESIDENT. In the absence or disability of the President,
--------------
the Vice Presidents in order of their rank as fixed by the Board of Directors,
or if not ranked, the Vice President designated by the Board of Directors, shall
perform all the duties of the President, and when so acting shall have the
duties of the President, and when so acting shall have all the powers of, and be
subject to all the restrictions upon, the President. The Vice Presidents shall
have such other powers and perform such other duties as from time to time may be
prescribed for them respectively by the Board of Directors or these By-Laws.
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<PAGE>
SECTION 10. SECRETARY. The Secretary shall keep, or cause to be kept, a
---------
book of minutes at the principal office or such other place as the Board of
Directors may order, of all meetings of directors and stockholders, with the
time and place of holding, whether regular or special, and if special, how
authorized, the notice thereof given, the names of those present at directors'
meetings, the number of shares present or represented at stockholders' meetings
and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office or
at the office of the Corporation's transfer agent, a share register, or a
duplicate share register, showing the names of the stockholders and their
addresses; the number and classes of shares held by each; the numbers and dates
of certificates issued for the same; and the number and date of cancellation of
every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the meetings
of the stockholders and of the Board of Directors required by these By-Laws or
by law to be given, and he shall keep the seal of the Corporation in safe
custody, and shall have such other powers and perform such other duties as may
be prescribed by the Board of Directors or these By-Laws for any reason the
Secretary shall fail to give notice of any special meeting of the Board of
Directors called by the President, or, if he is absent or unable or refuses to
act, by any Vice President or by any two directors, or if he shall fail to give
notice of any special meeting of the stockholders called by the President or by
the Board of Directors, or by one or more of the stockholders holding not less
than one-fifth of the voting power of the corporation, then any such person or
persons may give notice of any such special meeting.
SECTION 11. TREASURER. The Treasurer shall keep and maintain, or cause to
---------
be kept and maintained, adequate and correct accounts of the properties and
business transactions of the Corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, surplus and
shares. Any surplus, including earned surplus, paid-in surplus and surplus
arising from a reduction of stated capital, shall be classified according to
source and shown in a separate account. The books of account shall at all
reasonable times be open to inspection by any director.
The Treasurer shall deposit all moneys and other valuables in the name and
to the credit of the Corporation with such depositories as may be designated by
the Board of Directors. He shall disburse the funds of the Corporation as may
be ordered by the Board of Directors, shall render to the President and
Directors, whenever they request it, an account of all of his transactions as
Treasurer and of the financial condition of the Corporation, and shall have such
other powers and perform such other duties as may be prescribed by the Board of
Directors or these By-Laws.
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<PAGE>
ARTICLE V
STOCK
SECTION 1. FORM OF CERTIFICATES. Every holder of stock in the Corporation
--------------------
shall be entitled to have a certificate signed, in the name of the Corporation
(a) by the Chairman of the Board of Directors, the President or a Vice President
and (b) by the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary of the Corporation, certifying the number of shares owned by
him in the Corporation.
SECTION 2. SIGNATURES. Any, or all, of the signatures on the certificate
----------
may be a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
SECTION 3. LOST CERTIFICATES. The Corporation may issue a new certificate
-----------------
to be issued in place of any certificate theretofore issued by the Corporation,
alleged to have been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming the certificate to be lost, stolen or
destroyed. The Corporation may, in its discretion and as a condition precedent
to the issuance of such new certificate, require the owner of such lost, stolen
or destroyed certificate, or his legal representative, to give the Corporation a
bond (or other security) sufficient to indemnify it against any claim that may
be made against the Corporation (including any expense or liability) on account
of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate.
SECTION 4. TRANSFERS. Stock of the Corporation shall be transferable in
---------
the manner prescribed by law and in these By-Laws or in any agreement with the
stockholder making the transfer. Transfers of stock shall be made on the books
of the Corporation only by the person named in the certificate or by his
attorney lawfully constituted in writing and upon the surrender of the
certificate therefor, which shall be canceled before a new certificate shall be
issued.
SECTION 5. REGISTERED OWNERS. The Corporation shall be entitled to
-----------------
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise required by
law.
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<PAGE>
ARTICLE VI
LIMITATION OF LIABILITY
No person shall be liable to the Corporation for any loss or damage
suffered by it on account of any action taken or omitted to be taken by him as a
director or officer of the Corporation if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation or, with respect to any criminal matter, had no reasonable cause to
believe that his conduct was unlawful.
ARTICLE VII
INDEMNIFICATION
SECTION 1. ACTION OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION.
-------------------------------------------------------
Subject to Section 3 of this Article VII, the Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, and whether external or internal to
the Corporation (other than a judicial action or suit brought by or in the right
of the Corporation), by reason of the fact that he is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise (all such persons being referred to hereafter
as an "Agent"), against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the Corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, that he had
reasonable cause to believe that his conduct was unlawful.
SECTION 2. ACTION BY OR IN THE RIGHT OF THE CORPORATION. The Corporation
--------------------------------------------
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit brought by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was an Agent (as defined in Section 1 of this Article VII)
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have
-15-
<PAGE>
been adjudged to be liable to the Corporation, unless and only to the extent
that the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or other such court shall deem proper.
SECTION 3. DETERMINATION OF RIGHT OF INDEMNIFICATION. Any indemnification
-----------------------------------------
under Section 1 or 2 of this Article VII (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination reasonably and promptly made (a) by the Board of Directors by a
majority vote of a quorum consisting of directors who are or were not parties to
such action, suit or proceeding; or (b) if such a quorum is not obtainable, or,
even if obtainable, if a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion; or (c) by the stockholders, that
indemnification of the Agent is proper in the circumstances because such person
acted in good faith and in a manner that such person reasonably believed to be
in or not opposed to the best interests of the Corporation, or, with respect to
any criminal proceeding, that such person had no reasonable cause to believe
that his conduct was unlawful.
SECTION 4. INDEMNIFICATION AGAINST EXPENSES OF SUCCESSFUL PARTY.
----------------------------------------------------
Notwithstanding the other provisions of this Article VII, to the extent that an
Agent has been successful on the merits or otherwise including the dismissal of
an action without prejudice or the settlement of an action without admission of
liability, in defense of any proceeding or in defense of any claim, issue or
matter therein, such Agent shall be indemnified against all expenses (including
attorneys' fees) incurred in connection therewith.
SECTION 5. ADVANCES OF EXPENSES. Except as limited by Section 6 of this
--------------------
Article VII, expenses incurred by an officer or director in defending or
investigating any civil or criminal action, suit, proceeding or investigation
shall be paid by the Corporation in advance of the final disposition of such
matter, if the Agent shall undertake to repay such amount in the event that it
is ultimately determined, as provided herein, that such person is not entitled
to indemnification. However, no advance shall be made by the Corporation if a
determination is reasonably and promptly made by the Board of Directors by a
majority vote of a quorum of disinterested directors, or (if such a quorum is
not obtainable or, even if obtainable, a quorum of disinterested directors so
directs) by independent legal counsel in a written opinion, that, based upon the
facts known to the Board of Directors or counsel at the time such determination
is made, such person did not act in good faith and in a manner that such person
reasonably believed to be in or not opposed to the best interest of the
Corporation, or, with respect to any criminal proceeding, that such person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Board of Directors or
independent legal counsel reasonably determines that such person deliberately
breached his duty to the Corporation or its stockholders.
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<PAGE>
SECTION 6. RIGHT OF AGENT TO INDEMNIFICATION UNDER APPLICATION; PROCEDURE
--------------------------------------------------------------
UPON APPLICATION. Any indemnification under Sections 2, 3, and 4, or advance
- ----------------
under Section 5 of this Article VII, shall be made promptly, and in any event
within 90 days, upon the written request of the Agent, unless with respect to
applications under Sections 2, 3 or 5, a determination is reasonably and
promptly made by the Board of Directors by a majority vote of quorum of
disinterested directors that such Agent acted in a manner set forth in such
sections as to justify the Corporation's not indemnifying or making an advance
to the Agent. In the event no quorum of disinterested directors is obtainable,
the Board of Directors shall promptly direct that independent legal counsel
shall decide whether the Agent acted in the manner set forth in such sections as
to justify the Corporation's not indemnifying or making an advance to the Agent.
The right to indemnification or advances as granted by this Article VII shall be
enforceable by the Agent in any court of competent jurisdiction if the Board or
independent legal counsel denies the claim, in whole or in part, or if no
disposition of such claim is made within 90 days. The Agent's expenses incurred
in connection with successfully establishing his right to indemnification, in
whole or in part, in any such proceeding shall also be indemnified by the
Corporation.
SECTION 7. OTHER RIGHTS AND REMEDIES. The indemnification and advancement
-------------------------
of expenses provided by this Article shall not be deemed exclusive of any other
rights to which an Agent seeking indemnification or advance of expenses may be
entitled under any Bylaw, agreement, vote of stockholders or disinterested
directors, court order or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, since it is the
policy of the Corporation that indemnification of Agents shall be made to the
fullest extent permitted by law. The indemnification and advancement of
expenses provided by, or granted pursuant to, this Article shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be an Agent and shall inure to the benefit of the heirs, executors and
administrators of such a person. All rights to indemnification under this
Article shall be deemed to be provided by a contract between the Corporation and
the Agent who serves in such capacity at any time while these By-Laws and other
relevant provisions of the General Corporation Law of the State of Delaware and
other applicable law, if any, are in effect. Any repeals or modification
thereof shall not affect any rights or obligations then existing.
SECTION 8. INSURANCE. Upon resolution passed by the Board of Directors,
---------
the Corporation may establish a trust or other designated account, grant a
security interest or use other means (including, without limitation, a letter of
credit), to ensure the payment of certain of its obligations arising under this
Article and/or agreements which may be entered into between the Corporation and
its officers and directors from time to time.
SECTION 10. CONSTITUENT CORPORATIONS. For the purposes of this Article,
------------------------
references to "the Corporation" include all constituent corporations absorbed in
a consolidation or merger as well as the resulting or surviving corporation, so
that any person who is or was a director or officer of such a constituent
corporation or is or was
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<PAGE>
serving at the request of such constituent corporation as a director or officer
of another corporation, partnership, joint venture, trust or other enterprise
shall stand in the same position under the provisions of this Article with
respect to the resulting or surviving corporation as he would had he served the
resulting or surviving corporation in the same capacity.
SECTION 11. OTHER ENTERPRISES, FINES AND SERVING AT CORPORATION'S REQUEST.
-------------------------------------------------------------
For purposes of this Article, references to "other enterprise" in Sections 1 and
10 shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed a person with respect to any employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director or officer of the Corporation which imposes duties on, or
involves services by, such director or officer with respect to any employee
benefit plans, its participants or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the Corporation" as
referred to in this Article.
SECTION 12. INDEMNIFICATION OF OTHER PERSONS. The provisions of this
--------------------------------
Article VII shall not be deemed to preclude the indemnification of any person
who is not an Agent (as defined in Section 1), but whom the Corporation has the
power or obligation to indemnify under the provisions of the General Corporation
Law of the State of Delaware or otherwise. The Corporation may, in its sole
discretion, indemnify an employee, trustee or other agent as permitted in the
General Corporation Law of the State of Delaware. The Corporation shall
indemnify any employee, trustee or other agent where required bylaw.
SECTION 13. SAVINGS CLAUSE. If this Article or any portion thereof shall
--------------
be invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Agent against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement with respect
to any action, suit, proceeding or investigation, whether civil, criminal or
administrative, and whether internal or external, including a grand jury
proceeding and an action or suit brought by or in the right of the Corporation,
to the full extent permitted by any applicable portion of this Article VII that
shall not have been invalidated, or by any other applicable law.
-18-
<PAGE>
ARTICLE VIII
GENERAL PROVISIONS
SECTION 1. DIVIDENDS. Subject to limitations contained in the General
---------
Corporation Law of the State of Delaware and the Certificate of Incorporation,
the Board of Directors may declare and pay dividends upon the shares of capital
stock of the Corporation, which dividends may be paid either in cash, securities
of the Corporation or other property.
SECTION 2. DISBURSEMENTS. All checks or demands for money and notes of
-------------
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
SECTION 3. FISCAL YEAR. The fiscal year of the Corporation shall be fixed
-----------
by resolution of the Board of Directors.
SECTION 4. CORPORATE SEAL. The Corporation shall have a corporate seal in
--------------
such form as shall be prescribed by the Board of Directors.
SECTION 5. RECORD DATE. In order that the Corporation may determine the
-----------
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be more than 60 days nor less than ten days before the
date of such meeting, nor more than 60 days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting. Stockholders on the record date are entitled to notice and to vote or
to receive the dividend, distribution or allotment of rights or to exercise the
rights, as the case may be, notwithstanding any transfer of any shares on the
books of the Corporation after the record date, except as otherwise provided by
agreement or by applicable law.
SECTION 6. VOTING OF STOCK OWNED BY THE CORPORATION. The Board of
----------------------------------------
Directors may authorize any person, on behalf of the Corporation, to attend,
vote and grant proxies to be used at any meeting of stockholders of any
corporation (except this Corporation) in which the Corporation may hold stock.
SECTION 7. CONSTRUCTION AND DEFINITIONS. Unless the context requires
----------------------------
otherwise, the general provisions, rules of construction and definitions in the
General Corporation Law of the State of Delaware shall govern the construction
of these By-Laws.
-19-
<PAGE>
SECTION 8. AMENDMENTS. Subject to the General Corporation Law of the
----------
State of Delaware, the Certificate of Incorporation and these By-Laws, the Board
of Directors may, by majority vote of those present at any meeting at which a
quorum is present, amend or repeal these By-Laws, or enact other By-Laws as in
their judgment may be advisable for the regulation of the conduct of the affairs
of the Corporation. Unless otherwise restricted by the Certificate of
Incorporation, these By-Laws may be altered, amended or repealed at any regular
meeting of the stockholders (or at any special meeting thereof duly called for
that purpose) by a majority of the combined voting power of the then outstanding
shares of all classes and series of Capital Stock of the Corporation entitled to
vote generally in the election of directors, voting as a single class, provided
that, in the notice of any such special meeting, notice of such purpose shall be
given.
-20-
<PAGE>
<TABLE>
<CAPTION>
=========================================================================================================================
1. CONTRACT ID CODE PAGE OF PAGES
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT NAS7 1 1
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
2. AMENDMENT/MODIFICATION NO. 3. EFFECTIVE DATE 4. REQUISITION/PURCHASE REQ. NO. 5. PROJECT NO. (If applicable)
2 JUN 27 1996 10-87343
- --------------------------------------------------------------------------------------------------------------------------
6. ISSUED BY CODE 7. ADMINISTERED BY (If other than Item 6) CODE
---------------- ----------------------
NASA Management Office--JPL
4800 Oak Grove Drive
Pasadena, CA 91109
- --------------------------------------------------------------------------------------------------------------------------
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code) (X) 9A. AMENDMENT OF SOLICITATION NO.
----
Irvine Sensors Corporation
3001 Redhill Avenue, Bldg. III
-----------------------------------------
Costa Mesa, CA 92626 9B. DATED (SEE ITEM 11)
----------------------------------------------
10A. MODIFICATION OF CONTRACT/ORDER NO.
X NAS7-1406
------------------------------------------
10B. DATED (SEE ITEM 13)
- ----------------------------------------------------------------------------
CODE 1384254 FACILITY CODE March 12, 1996
=========================================================================================================================
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
- --------------------------------------------------------------------------------------------------------------------------
[_] The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of
Offers [_] is extended, [_] is not extended
Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as
amended, by one of the following methods:
(a) By completing Items 8 and 15, and returning _______ copies of the amendment; (b) By acknowledging receipt of this
amendment on each copy of the offer submitted; or (c) By separate letter or telegram which includes a reference to
the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR
THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of
this amendment you desire to change and offer already submitted, such change may be made by telegram or letter,
provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to
the opening hour and date specified.
- --------------------------------------------------------------------------------------------------------------------------
12. ACCOUNTING AND APPROPRIATION DATA (If required)
- --------------------------------------------------------------------------------------------------------------------------
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
- --------------------------------------------------------------------------------------------------------------------------
X A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN
THE CONTRACT ORDER NO. IN ITEM 10A.
- --------------------------------------------------------------------------------------------------------------------------
X B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATION CHANGES (such as changes in
paying office, appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(B).
- --------------------------------------------------------------------------------------------------------------------------
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
- --------------------------------------------------------------------------------------------------------------------------
D. OTHER (Specify type of modification and authority)
- --------------------------------------------------------------------------------------------------------------------------
E. IMPORTANT: Contractor X is not, is required to sign this document and return copies to the issuing office.
___ ___ _____
- --------------------------------------------------------------------------------------------------------------------------
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject
matter where feasible.)
The purpose of this modification is to add incremental funding in the amount of $139,091.
PART A - PHASE II CONTRACT
4. Limitation of Funds (Fixed Price Contract) (18-52.232-77) (March 1989) CHANGE the first sentence
----------------------------------------------------------------------------
of paragraph (a) to read:
(a) The sum of $317,196 is presently available for payment and allotted to this contract.
CHANGE paragraph (c)(1) to read:
(c) (1) It is contemplated that funds presently allotted to this contract will cover the work to be
performed until April 2, 1997.
Except as provided herein, all terms and conditions of the document referenced in item 9A or 10A, as heretofore changed,
remains unchanged and in full force and effect.
- --------------------------------------------------------------------------------------------------------------------------
15A. NAME AND TITLE OF SIGNER (Type or print) 16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
Robert A. Democh
Contracting Officer
- --------------------------------------------------------------------------------------------------------------------------
15B. CONTRACTOR/OFFEROR 15C. DATE SIGNED 16B. UNITED STATES OF AMERICA 16C. DATE SIGNED
BY /s/ Robert A. Demach Jun 27 1996
--------------------------------------- -----------------------------------
(Signature of person authorized to sign) (Signature of Contracting Officer)
=========================================================================================================================
NSN 7540-01-152-8070 30-105 STANDARD FORM 30 (REV. 10-83)
PREVIOUS EDITION UNUSABLE Prescribed by GSA
FAR (48 CFR) 53.243
</TABLE>
<PAGE>
Contract No. NAS7-1406
Modification No.2
CONTRACT DISTRIBUTION LIST
--------------------------
Number of Copies
- ----------------
Duplicate Original
+ 1......... Contractor
----------
Irvine Sensors Corporation
3001 Redhill Avenue, Bldg. III
Costa Mesa, CA 92626
1......... Payment Office
--------------
National Aeronautics and Space Administration
Attn: CF/Headquarters Accounting Branch
Washington, DC 20546
<PAGE>
<TABLE>
<S> <C>
-------------------------------------------------------------------------
AWARD/CONTRACT 1. Contract No 2. Effective Date: Page of Pages
[LOGO OF NASA APPEARS HERE] NAS7-1406 Mar 12, 1996 1 12
-------------------------------------------------------------------------
3. DPAS 4. Procurement Request No. 5. BVS: 6. PPC:
DO-C9 10-85515 NO HS
- ----------------------------------------------------------------------------------------------------------------------
8. Issuing Agency: 7. Issuing Office 9. Contract Type:
Code: Firm Fixed Price
-------------------------------------------------------------------------------------
National Aeronautics and Space Administration 10. Paying Office Code:
NASA Management Office - JPL NASA Headquarters
4800 Oak Grove Drive Code CF
Pasadena, CA 91109
- ----------------------------------------------------------------------------------------------------------------------
11. Submit Invoices To: 12. Accounting and Appropriation Data:
NASA Management Office - JPL 806/70110
Attn: Dora S. Huff, Contracting Officer
4800 Oak Grove Drive, M/S 180/802K 244-02-03
Pasadena, CA 91109
- ----------------------------------------------------------------------------------------------------------------------
13. Administered By: 14. Name and Telephone No. of NASA Contract Administrator
NASA Management Office - JPL Angel A. Castillo, Contract Specialist
4800 Oak Grove Drive
Pasadena, CA 91109 (818) 354-1585
- ----------------------------------------------------------------------------------------------------------------------
15. Items Awarded:
Small Business Innovation Research (SBIR) 94-II Phase Research Study described in Part A, Clause 1.
- ----------------------------------------------------------------------------------------------------------------------
16. Contractor Name and Address: 17. Name and Telephone Number of Contract Administrator:
Irvine Sensors Corporation Gail Lafferty
3001 Redhill Avenue, Bldg. III
Costa Mesa, CA 92626 (714) 444-8712
- ----------------------------------------------------------------------------------------------------------------------
18. Discount Terms: 19. Contract Value:
N/A $596,364.00
- ----------------------------------------------------------------------------------------------------------------------
20. NAME AND TITLE OF PERSON AUTHORIZED TO SIGN 23. UNITED STATES OF AMERICA BY:
David Pinto NASA Management Office - JPL
Treasurer and Controller
- ----------------------------------------------------------------------------------------------------------------------
21. SIGNATURE 22. DATE 24. CONTRACTING OFFICER 26. DATE SIGNED
Mar 12, 1996
8 March 1996 ---------------------------------------------------------------
[SIGNATURE APPEARS HERE] 25. Signature: 27. Typed Name:
/s/ Dora S. Huff Dora S. Huff
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SBIR Contract Cover Page
<PAGE>
PART A - PHASE II CONTRACT
FULL-TEXT CLAUSES
-----------------
1. SUPPLIES AND/OR SERVICES TO BE FURNISHED (1852.210-72)
(DECEMBER 1988)
The Contractor shall provide all resources (except as may be expressly
stated in this contract as furnished by the Government) necessary to furnish the
items below in accordance with the Statement of Work of this contract.
SBIR Phase II Research Study Entitled: Compliant Plug
and Socket Interconnector (CPSI).
Item No. Description
--------- -----------
1 Quarterly Reports and Final Report Including
Functional Test Data
2 Phase III Business Plan
3 Prototype:
(1) CPSI MCM
(2) GaAs on Diamond
2. FIRM-FIXED PRICE (1852.216-78) (DECEMBER 1988)
The total firm-fixed price of this contract is
$596,364.00
3. PERIOD OF PERFORMANCE (1852.212-74) (DECEMBER 1988)
The period of performance of this contract shall be 24 months from the date
of the contract execution.
4. LIMITATION OF FUNDS (FIXED-PRICE CONTRACT) (1852.232-77)
(MARCH 1989)
(a) Of the total price of items 1 through 3,
the sum of $178,100.00 is presently available for payment and allotted to this
contract. It is anticipated that from time to time additional funds will be
allocated to the contract in accordance with the following schedule until the
total price of said items is allotted:
SCHEDULE FOR ALLOTMENT OF FUNDS
Payment Amount
1st 30%
2nd 25%
3rd 25%
4th 20%
2
<PAGE>
(b) The Contractor agrees to perform or have performed work on the items
specified in paragraph (a) above up to the point at which, if this contract is
terminated pursuant to the Termination for Convenience of the Government clause
of this contract, the total amount payable by the Government (including amounts
payable for subcontracts and settlement costs) pursuant to paragraphs (f) and
(g) of that clause would, in the exercise of reasonable judgement by the
Contractor, approximate the total amount of time allotted to the contract. The
Contractor is not obligated to continue performance of the work beyond that
point. The Government is not obligated in any event to pay or reimburse the
Contractor more than the amount from time to time allotted to the contract,
anything to the contrary in the Termination for Convenience of the Government
clause notwithstanding.
(c) (1) It is contemplated that funds presently alloted to this contract
will cover the work to be performed until August 1, 1996, including termination
liability.
(2) If funds alloted are considered by the Contractor to be inadequate
to cover the work to be performed until that date, or an agreed date substituted
for it, the Contractor shall notify the Contracting Officer in writing when
within the next 60 days the work will reach a point at which, if the contract is
terminated pursuant to the Termination for Convenience of the Government clause
to this contract, the total amount payable by the Government (including amounts
payable for subcontracts and settlement costs) pursuant to paragraphs (f) and
(g) of that clause will approximate 75 percent of the total amount then alloted
to the contract.
(3) (i) The notice shall state the estimated date when the point
referred to in subparagraph (2) above will be reached and the estimated amount
of additional funds required to continue performance to the date specified in
subparagraph (1) above, or an agreed date substituted for it.
(ii) The Contractor shall, 60 days in advance of the date
specified in subparagraph (1) above, or an agreed date substituted for it,
advise the Contracting Officer in writing as to the estimated amount of
additional funds required for the timely performance of the contract for a
further period as may be specified in the contract or otherwise agreed to by the
parties.
(4) If, after the notification referred to in subdivision (3) (ii)
above, additional funds are not alloted by the date specified in subparagraph
(1) above, or an agreed date substituted for it, the Contracting Officer shall,
upon the Contractor's written request, terminate this contract on that date or
on the date set forth in the request, whichever is later, pursuant to the
Termination for Convenience of the Government clause.
3
<PAGE>
(d) When additional funds are alloted from time to time for continued
performance of the work under this contract, the parties shall agree on the
applicable period of contract performance to be covered by these funds. The
provisions of paragraphs (b) and (c) above shall apply to these additional
allotted funds and the substituted date pertaining to them, and the contract
shall be modified accordingly.
(e) If, solely by reason of the Government's failure to allot additional
funds in the amounts sufficient for the timely performance of this contract, the
Contractor incurs additional costs or is delayed in the performance of the work
under this contract, and if additional funds are alloted, an equitable
adjustment shall be made in the price or prices (including appropriate target,
billing, and ceiling prices where applicable of the items to be delivered, or in
the time of delivery, or both.
(f) The Government may at any time before termination, and, with the
consent of the Contractor, after notice of termination, allot additional funds
for this contract.
(g) The provisions of this clause with respect to termination shall in no
way be deemed to limit the rights of the Government under the Default clause of
this contract. The provisions of this Limitation of Funds clause are limited to
the work on and allotment of funds for the items set forth in paragraph (a)
above. This clause shall become inoperative upon the allotment of funds for the
total price of said work except for rights and obligations then existing under
this clause.
(h) Nothing in this clause shall affect the right of the Government to
terminate this contract pursuant to the Termination for Convenience of the
Government clause of this contract.
5. LIMITATIONS ON RESEARCH AND ANALYTICAL WORK
A minimum of one-half of the research and/or analytical effort must be
performed by the Contractor's firm.
6. PRINCIPAL INVESTIGATOR LIMITATION
The Contractor shall be the primary source of employment of the Principal
Investigator named in clause 1852.235-71, Key Personnel and Facilities, at both
the time of award and during the conduct of the proposed research. The terms of
this clause do not excuse the Contractor from timely performance of the work.
Substitution of any key individual shall not authorize a change in contract
price.
4
<PAGE>
7. RIGHTS IN PROJECT SUMMARY
Attachment B, Project Summary, of the Contractor's proposal under this
contract shall be treated as delivered data with unlimited rights in accordance
with subparagraph (b)(1)(i) of clause 52.227-20, Rights in Data -- SBIR Program.
8. DELIVERY SCHEDULE (1852.212-73)(DECEMBER 1988)
The Contractor shall deliver the items required to be furnished by the
contract as follows:
Item Delivery Shipping
No. Description Quantity Date Address
--- ----------- -------- ---- -------
1 Quarterly Report #1 4 6/14/96 See section
2 Quarterly Report #2 4 9/14/96 11.D.
3 Quarterly Report #3 4 12/14/96
4 Quarterly Report #4 4 3/14/97
5 Quarterly Report #5 4 6/14/97
6 Quarterly Report #6 4 9/14/97
7 Quarterly Report #7 4 12/14/97
8 Final Report 6 *
9 Prototype 1 * **
* 24 months after effective date of contract.
** SHIP TO: NASA Management Office - JPL
Attn: Dora S. Huff, Contracting Officer
M/S 180-802K
4800 Oak Grove Drive
Pasadena, CA 91109
9. MATERIAL INSPECTION AND RECEIVING REPORT (1852.246-72)
(OCTOBER 1988)
(a) At the time of each delivery under this contract, the Contractor shall
furnish to the Government a Material Inspection and Receiving Report (DD Form
250 series). The Contractor shall distribute the DD Form 250 series as follows:
Distribution to: No. Copies
NASA Management Office - JPL Orig + 1
Attn: Dora S. Huff, Contracting Officer
M/S 180-802K
4800 Oak Grove Drive
Pasadena, CA 91109
(b) The Contractor shall prepare the DD Form 250 in accordance with NASA
FAR Supplement 1846.672-1. The Contractor
5
<PAGE>
shall enclose the copies of the DD Form 250 in the package or seal them in a
waterproof envelope which shall be securely attached to the exterior of the
package in the most protected location.
(c) When more than one package is involved in a shipment, the Contractor
shall list on the DD Form 250, as additional information, the quantity of
packages and the package numbers. The Contractor shall forward the DD Form 250
with the lowest numbered package of the shipment and the words "CONTAINS DD FORM
250" on the package.
10. CLAUSES INCORPORATED BY REFERENCE (52.252-2) (JUN 1988)
This contract incorporates one or more clauses by reference, with the same
force and effect as if they were given in full text. Upon request, the
Contracting Officer will make their full text available.
NOTICE: The following clauses are hereby incorporated by reference.
A. FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) CLAUSES
52.202-1 Definitions (Sep 1991)
52.203-1 Officials Not To Benefit (Apr 1984)
52.203-3 Gratuities (Apr 1984)
52.203-5 Covenant Against Contingent Fees (Apr 1984)
52.203-6 Restrictions on Subcontractor Sales to the Government
(Jul 1985)
52.203-7 Anti-Kickback Procedures (Oct 1988)
52.203-9 Requirement for Certificate of Procurement Integrity
- Modification (Nov 1990)
52.203-10 Price or Fee Adjustment for Illegal or Improper
Activity (Sep 1990)
52.203-12 Limitation on Payments to Influence Certain Federal
Transactions (Jan 1990)
52.209-6 Protecting the Government's Interest When
Subcontracting with Contractors Debarred, Suspended,
or Proposed for Debarment (Aug 1995)
52.212-8 Defense Priority and Allocation Requirements
(Sep 1990)
52.212-13 Stop-Work Order (Aug 1989)
52.215-1 Examination of Records by Comptroller General
(Feb 1993)
52.215-2 Audit -- Negotiation (Feb 1993)
52.215-22 Price Reduction for Defective Cost or Pricing Data
(Jan 1991)
52.215-24 Subcontractor Cost or Pricing Data (Dec 1994)
52.215-26 Integrity of Unit Prices (Apr 1991)
<PAGE>
52.215-27 Termination of Defined Benefit Pension Plans (Sep 1989)
52.215-31 Waiver of Facilities Capital Cost of Money (Sep 1987)
52.215-33 Order of Precedence (Jan 1986)
52.215-39 Reversion or Adjustment of Plans for Postretirement Benefits Other
Than Pensions (PRB) (Feb 1995)
52.219-8 Utilization of Small Business Concerns and Small Disadvantaged
Business Concerns (Feb 1990)
52.219-13 Utilization of Women-Owned Small Businesses (Aug 1986)
52.220-3 Utilization of Labor Surplus Area Concerns (Apr 1984)
52.222-3 Convict Labor (Apr 1984)
52.222-26 Equal Opportunity (Apr 1984)
52.222-35 Affirmative Action for Special Disabled and Vietnam Era Veterans
(Apr 1984)
52.222-36 Affirmative Action for Handicapped Workers (Apr 1984)
52.222-37 Employment Reports on Special Disabled Veterans and Veterans of the
Vietnam Era (Jan 1988)
52.223-2 Clean Air and Water (Apr 1984)
52.223-6 Drug-Free Workplace (Jul 1990)
52.225-3 Buy American Act - Supplies (Jan 1994)
52.225-11 Restrictions on Certain Foreign Purchases (May 1992)
52.227-1 Authorization and Consent (Apr 1984) -- Alternate I (Apr 1984)
52.227-2 Notice and Assistance Regarding Patent and Copyright Infringement
(Apr 1984)
52.227-11 Patent Rights -- Retention by the Contractor (Short Form) (Jun 1989)
-- As Modified by 1852.227-11 (JUNE 1990) NASA FAR Supplement
52.227-16 Additional Data Requirements (Jun 1987)
52.227-20 Rights in Data -- SBIR Program (Mar 1994)
52.229-3 Federal, State and Local Taxes (Jan 1991)
52.229-5 Taxes - Contracts Performed in U.S. Possessions or Puerto Rico
(Apr 1984)
52.232-2 Payments under Fixed-Price Research and Development Contracts
(Apr 1984)
52.232-8 Discounts for Prompt Payment (Apr 1989)
52.232-9 Limitation on Withholding Payments (Apr 1984)
52.232-11 Extras (Apr 1984)
52.232-16 Progress Payments (Jul 1991) -- Alternate I (Aug 1987)
52.232-17 Interest (Jan 1991)
52.232-23 Assignment of Claims (Jan 1986)
52.232-25 Prompt Payment (March 1994) [Insert 30th day in subparagraph (b)(2)]
52.232-28 Electronic Funds Transfer Payment Methods (Apr 1989) -- As modified by
NASA FAR Supplement 1832.908(a)
52.233-1 Disputes (March 1994) -- Alternate I (Dec 1991)
52.233-3 Protest After Award (Aug 1989)
52.242-13 Bankruptcy (Apr 1991)
52.243-1 Changes -- Fixed Price (Aug 1987) -- Alternate V (Apr 1984)
52.244-5 Competition in Subcontracting (Apr 1984)
7
<PAGE>
52.245-2 Government Property (Fixed-Price Contracts)
(Dec 1989) -- Alternate I (Apr 1984)
52.245-4 Government - Furnished Property (Short Form)
(Apr 1984)
52.246-7 Inspection of Research and Development -- Fixed Price
(Apr 1984)
52.246-16 Responsibility for Supplies (Apr 1984)
52.246-23 Limitation of Liability (Apr 1984)
52.246-25 Limitation of Liability -- Services (Apr 1984)
52.247-34 F.O.B. Destination (Nov 1991)
52.249-2 Termination for Convenience of the Government (Fixed
Price) (Apr 1984)
52.249-9 Default (Fixed-Price Research and Development) (Apr
1984)
52.253-1 Computer Generated Forms (Jan 1991)
B. NASA/FAR SUPPLEMENT (48 CFR CHAPTER 18) CLAUSES
1852.204-70 Report on NASA Subcontracts (DECEMBER 1994)
1852.204-78 Security Plan for Unclassified Federal Computer
Systems (SEPTEMBER 1993)
1852.210-75 Packaging and Marking (SEPTEMBER 1990)
--Alternate I (SEPTEMBER 1990)
1852.212-70 Notice of Delay (DECEMBER 1988)
1852.215-84 Ombudsman (OCTOBER 1995) Insert:
Kurt L. Lindstrom, Manager Tom Luedtke, Deputy Associate
NASA Management Office Administrator for Procurement
Phone: (818) 354-5359 Phone: (202) 358-2090
Fax : (818) 399-2607 Fax : (202) 358-3082
1852.219-74 Use of Rural Area Small Businesses
(SEPTEMBER 1990)
1852.219-76 NASA Small Disadvantage Business Goal
(JULY 1991)
1852.227-72 Designation of New Technology Representative and
Patent Representative (Apr 1984) Insert:
NASA Management Office NASA Management Office
Arif Husain, Chief Thomas H. Jones, Chief
New Technology Patent/Intellectual Property
M/S 180-800C M/S 180-802C
4800 Oak Grove Drive 4800 Oak Grove Drive
Pasadena, CA 91109 Pasadena, CA 91109
1852.232-70 NASA Progress Payments Rates (DECEMBER 1991)
(DEVIATION)
1852.232-82 Submission of Requests for Progress Payments
(MARCH 1989)
1852.235-70 Center for AeroSpace Information (NOVEMBER 1992)
8
<PAGE>
1852.235-71 Key Personnel and Facilities (MARCH 1989) Insert:
Key Personnel: Name/Position/Title:
David M. Reinker, Principal Investigator
Senior Process Engineer
Facilities/Location:
Contractor facilities located
at Costa Mesa, CA
1852.245-70 Acquisition of Centrally Reportable Equipment
(MARCH 1989)
1852.245-73 Financial Reporting of Government-Owned/
Contractor-Held Property (JULY 1994) --
Alternate II (MARCH 1989) [Insert "Installation
name and address" in paragraph (b)]
1852.246-71 Government Contract Quality Assurance Functions
(OCTOBER 1988) (Insert "Location of final
inspection and acceptance of all deliverables by
the Contracting Officer")
C. FIRMR Clauses
201-39.5202-1 FIRMR Applicability (Oct 1990) (Insert (4) and (5)
incidental and embedded)
201-39.5202-3 Procurement Authority (Oct 1990) (Inset "the
regulatory" and "not applicable")
201-39.5202-5 Privacy or Security Safeguards (Oct 1990)
201-39.5202-6 Warranty Exclusion and Limination of Damages (Oct
1990)
D. REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS OF
OFFERORS OR QUOTERS INCORPORATED BY REFERENCE
The Representations, Certifications, and Other Statements of Offerors or
Quoters as completed by the Contractor are hereby incorporated in their entirety
by reference, with the same force and effect as if they were given in full text.
11. REPORTS OF WORK
A. Quarterly Technical Progress Reports
The Contractor shall submit separate quarterly technical reports of all
work accomplished during each quarter's period of contract performance. The
Final Report shall serve as the last Quarterly Technical Progress Report. These
reports shall be in narrative form and be brief and informal in content.
Quarterly reports shall include (i) A quantitative description of work performed
during the period; (ii) an indication of any current
9
<PAGE>
problems which may impede performance or impact program schedule or cost, and
proposed corrective action; (iii) a discussion of the work to be performed
during the next reporting period; (iv) the total cumulative costs incurred as of
the report date; (v) estimate of cost to complete the contract; (vi) and
estimated percentage of physical completion of the contract. The report required
by this paragraph shall be submitted in the number of copies and to the
addresses indicated in Paragraph D. below entitled "Reports Distribution,"
within ten (10) days following the period being reported upon. Progress payments
shall be subject to the submission and acceptance of these quarterly reports.
B. Final Report
The Contractor shall submit a Final Report not later than the last day of
the PERIOD OF PERFORMANCE (see clause 1852.212-74, above) of this contract. It
shall document and summarize the entire contract results, in narrative form, and
serve as the final Quarterly Technical Progress Report. The first page shall be
a single page Project Summary of the research objectives, a description of the
research work, and findings or results. The summary page shall be submitted
without restriction for NASA publication. The balance of the report shall
describe in detail: (i) project objectives; (ii) the work carried out; (iii) a
technical merit and feasibility assessment; (iv) research findings or results;
and (v) potential applications for the project results in a Phase IIII for NASA
purposes and for commercial purposes. All rights to data shall be in accordance
with clause 52.227-20, Rights in Data -- SBIR Program.
C. Report Documentation Page
The Contractor shall include a completed Report Documentation Page
(Standard Form 298) as the final page of the each report submitted in Paragraphs
A. and B. above.
D. Reports Distribution
Reports shall be distributed in the quantities indicated below. The reports
to NASA shall be addressed as follows:
REPORTS
Quarterly Final
1. NASA Contracting Officer *Original Orig + 5
Dora S. Huff
M/S 180-802K
4800 Oak Grove Drive
Pasadena, CA 91109
10
<PAGE>
**2. NASA Technical Monitor 1 0
Arif Husain
M/S 180-800C
4800 Oak Grove Drive
Pasadena, CA 91109
3. JPL Manager SBIR Program 1 0
Dr. Patricia McGuire
M/S 126-256
4800 Oak Grove Drive
Pasadena, CA 91109
4. JPL Technical Monitor 1 0
Dr. Elizabeth A. Kolawa
M/S 183-401, (818) 393-2593
4800 Oak Grove Drive
Pasadena, CA 91109
5. NASA HEADQUARTERS (1 copy of Final
SBIR Program Manager, Code XC Report single-page
Washington, DC 20546 "PROJECT SUMMARY")
6. NASA Center for Aerospace Information (CASI) none ***
Attn: Accessioning Dept.
800 Elkridge Landing Road
Linthicum Heights, MD 21090-2934
*Copy of letter of transmittal plus copy of technical report.
**Original plus one virus-free 3.5-inch diskette.
***One clear copy and one virus-free 3.5-inch diskette.
[NOTE: Diskette text should be MS-DOS or DOS TEXT files and labeled with
contract number, content description, date prepared, and type of software used.
Encapsulated Post Script level 1,2 is preferred, but WordPerfect 6.x or
Microsoft Word 6.x or ADOBE portable document format (PDF) or Standard
Generalized Markup Language (SGML) or ASCII full-text are acceptable. Standard
Form 298, Report Documentation Page, shall comply with ANSI Standard Z39-18, OMB
Approval Number 0704-0188. Only Unclassified reports shall be submitted to the
CASI (48 CFR Subpart 1827.406(b)(v). The Contractor shall boldly mark each
report submitted to CASI, "CONTAINS PROPRIETARY SBIR DATA, PROTECT 4 YEARS
PURSUANT TO 48 CFR Subpart 52.227-20."]
12. STATEMENT OF WORK
The Statement of Work covered under this Contract, as more specifically detailed
in the Contractor's 94-1 Phase II SBIR Proposal Number 06.03-8211, Compliant
Plug and Socket Interconnector, is incorporated by reference.
11
<PAGE>
NAS7-1406
Page 12 of 12
CONTRACT DISTRIBUTION LIST
--------------------------
Number of Copies
- ----------------
Duplicate Original
+ 1 ................. Contractor
----------
Irvine Sensors Corporation
3001 Redhill Avenue, Bldg. III
Costa Mesa, CA 92626
1 ................. Payment Office
--------------
National Aeronautics and Space Administration
Attn: CF/Headquarters Accounting Branch
Washington, DC 20546
0 ................. Program/Sponsor's Office (s)
----------------------------
Other--
-----
1 ................. NASA Management Office - JPL
Attn: 180-800C/Arif Husain
4800 Oak Grove Drive
Pasadena, CA 91109
2 ................. Jet Propulsion Laboratory
California Institute of Technology
Attn: 126-256/Dr. Patricia McGuire
4800 Oak Grove Drive
Pasadena, CA 91109
<PAGE>
2. PHASE II TECHNICAL OBJECTIVES AND APPROACH
The goal of the Phase II CPSI program will be to make a significant effort
that contributes to the NASA mission in planning, directing and conducting
research and development for civilian use of space and aeronautics. In
particular, vertical interconnection technology such as CPSI will provide a key
role in NASA's move toward satellite miniaturization and component reuse.
2.1 Specific Objectives
CURED BOND
One technique that should be feasible from a process standpoint which would
result in a cured bond is to squeegee the liquid resin into the preformed socket
prior to mating. To avoid the smearing of resin during the alignment step, the
liquid could be B-staged (partially cured) after squeegee application.
Circuit board manufacturers achieve strong layer-to-layer epoxy adhesion by
laminating B-staged epoxy films. ISC routinely laminates B-staged siloxane
polyimides in the fabrication of it's memory chip stacks. Among other issues to
be investigated, the concave or convex shape of the material within the socket
and the cleanliness of the socket top surface must be determined.
ALTERNATIVE MATERIALS
The applications for CPSI can be approximated to those which now utilize
the fuzz button approach. A fuzz button is essentially a loosely balled piece of
gold wire. When the ball is compressed between layers it collapses and
electrically interconnects them. One inherent flaw is that there is very
little opposing force of the fuzz button on the bond pad if it is not fully
collapsed (i.e. there is still voiding within the fuzz button structure). This
can result in reliability problems especially in harsh environments. The solid
material of the CPSI bump, on the other hand, will exert a high opposing force
onto the bond pad if it is compressed elasticly but at the same time will allow
X-Y motion within the socket to absorb CTE mismatches. The reliability of fuzz
buttons is still in question and this technology fits in well as a replacement
for them in all applicable technologies.
An alternative to silver filled epoxy is a silver filled stress absorbing
thermoplastic from the polyimide family of materials which was originally
designed for mounting large semiconductor chips to substrates with mismatched
CTEs. If it can be stencil printed with as much dimensional control as the
epoxy, it will be more compliant and may be less prone to crumbling. These
siloxane polyimides are being used as stress relieving die attach adhesives.
Flexible siloxane linkages are polymerized into the polyimide network to form a
stress absorbing adhesive. Ablebond P-560 is an example of a silver filled
siloxane polyimide. The data sheet is located in the Addendum B. It was
especially designed for bonding large semiconductor chips to substrates with
mismatched CTEs to avoid chip warpage during thermal excursions. It has a high
purity with very low levels of ionic contamination. The polyimide family of
pastes must be designed to minimize resin bleed out after printing and prior to
curing. Various companies, including Epoxy Technology, have commercially
available screen printable standard polyimides. The desirable properties which
cause them to be printable may be combined with desirable properties of the
siloxanes.
ISC Proposal 952011 Page 13 NAS7-1338
<PAGE>
The most desirable property of an organic based material for the clamped
bond style is elasticity. A bump that has memory will put an opposing force on
the bond pad when placed in compression. Constant bond force will enhance
reliability. A metal filled organic resin will probably need a low concentration
of metal so that the elasticity of the resin can dominate. Dexter Corporation of
City of Industry, CA has suggested Hysol K0120 for this purpose although the Ag
loading may be too high. The data sheet is included in the Addendum B.
Packard-Hughes of Irvine, CA, has a clamped bump technology that they call
Gold Dot. They use raised contacts and rely on a high clamping force to
compress the solid Au bump while breaking through any oxide on the bonding pad.
This technology is not designed to accommodate CTE mismatch because of the high
force required but the clamping mechanism itself may prove useful. They
typically use a spring and pressure plate assembly to compress a flex circuit
with Gold Dots against a substrate.
Stencil printers are now available which are designed for high throughput
assembly lines. Stencils obtained from Epoxy Technology will allow ISC to print
and test other materials with more desirable properties such as higher
compliance, higher thermal conductivity, better cohesiveness and abrasion
resistance, more elasticity in compression, lower in friction, and different in
metal filler material. The ideal material for the clamped bond would probably
have a Au filler in an organic resin which has good cohesive strength but is
still elasticity compressible enough to permit reasonable clamping forces and
allow x-y motion. It should also have a low coefficient of friction and high
thermal conductivity. The ideal material for the cured bond would be very
compliant allowing at least 40% deformation in shear and have good fatigue
properties. Au powder can be substituted for the silver if some reliability
issue with the Ag is found. Ag resistivity is 1.59E-6 and Au is 2.35E-6 ohm-cm.
Other fillers may be added to make the base resin more elastic, lower in
friction, more cohesive, etc. Alternatively, the bumps could be coated with a
film to make them lower in friction or more cohesive. Prior to testing, however,
many property values must be gathered for the different material candidates,
such as outgassing, cryogenic performance, modulus of elasticity, etc.
2.2 Anticipated Technical Questions
MECHANICAL PROPERTIES
During CTE mismatch movement, the bumps deform in shear until the friction
of the bumps on the bond pads is overcome and at that point they slide. The
shear strength of the bump material must withstand the force of friction and
then the material cohesiveness must withstand the abrasion caused by relative
movement. The actual compliance of epoxy is still questionable, especially at
low temperatures. In addition, the cohesiveness and abrasion resistance of epoxy
may not be adequate causing the bump to crumble after repeated X-Y motion under
compressive force. An alternative and possibly more compliant silver filled
organic resin is the Ablestick siloxane polyimide die attach material. Silver
filled standard polyimides are likely to have greater shear strength,
cohesiveness, and abrasion resistance than epoxies.
<PAGE>
The ideal clamping mechanism would be that which keeps a constant force on
the mated pairs even as the materials are expanding and shrinking during thermal
cycling such as with a spring or a weight. The optimum clamping force must be
determined which will compress all bumps such that contact is made but will
still allow X-Y motion and will not damage the bumps. Because of the nature of
the clamped structure, the chip surface probably cannot contact the socket top
surface and still permit a constant opposing force of the bump on the bond pad.
Vertical interconnection of MCMs intensifies the problems encountered with
material CTE mismatch simply because the areas involved are generally much
greater than that of individual IC's. As an example, a 4" silicon substrate
stacked on top of a 4" polyimide substrate would experience approximately 0.015"
of relative movement at the edges of the MCMs when cycled from -50 degrees C to
+ 150 degrees C. As another example, a 0.5" x 0.5" GaAs chip mounted to a
diamond film substrate would see about 0.00025" or 6um of movement over the same
temperature range.
Typically, stresses on face-up mounted GaAs die are kept in compression to
minimize cracking during operation. As a result, the thin brittle nature of GaAs
dice limits the choice of materials that can be used to construct reliable
assemblies. When compliant bonding is utilized there is no longer a restriction
on materials but the clamping force should be kept low because of the
brittleness.
HEAT DISSIPATION
The thermal conductivity of electrically conductive organic materials is
low when compared to that of pure metal solders but it may be acceptable when
the bumps are kept very short reducing the path length for thermal rejection.
Extra bumps can be added to aid in heat removal even if they do not carry
electrical signals. In flipped chips, the thermal performance is enhanced
because the conductive bumps provide thermal pathways and also because the
backside of the chip remains clean for the use of thermal greases or other
materials. The low thermal conductivity of the epoxy bumps can be compensated
for by drawing heat out through the back via the clamping mechanism. Contact
resistance of the clamp will be minimal since the chip backside and clamp
surface are polished and since resistance decreases with force. Contact
resistance can also be minimized with a thermal grease. A thermally conducting
socket material may be useful if the chip surface is allowed to make contact to
the top of the socket surface on the substrate. Heat removal is aided by wicking
thermally conductive dielectric between the chip and substrate. Epoxies are
commercially available for this purpose.
Table 2-1 lists values of thermal conductivity and coefficient of thermal
expansion for assorted materials. Unfortunately, the substance with the best
combination of thermal conduction and electrical insulation properties, diamond,
has a CTE which does not match favorably with active device materials,
especially GaAs.
<PAGE>
- --------------------------------------------------------------------------------
k(W/cm C) CTE(PPM/C)
- --------------------------------------------------------------------------------
GaAs 0.55 5.7
- --------------------------------------------------------------------------------
Diamond 10-20 0.9
- --------------------------------------------------------------------------------
Silicon 1.5 2.6
- --------------------------------------------------------------------------------
Alumina 0.35 6.1
- --------------------------------------------------------------------------------
Aluminum Nitride 1-1.7 3.5
- --------------------------------------------------------------------------------
Silver Filled Epoxy 0.017 38
- --------------------------------------------------------------------------------
Silver Filled Polyimide 0.1 80
- --------------------------------------------------------------------------------
Gold 3.18 14.3
- --------------------------------------------------------------------------------
Polyimide 0.0015 40
- --------------------------------------------------------------------------------
Table 2-1. Values of Thermal Conductivity and CTE
GaAs operates at high speeds and dissipates a great deal of heat and
therefore a highly thermally conductive substrate is desirable. GaAs can have a
thermal load of 20 W/cm/(2)/ so that a 0.5" x 0.5" chip may dissipate as much as
30W. Since performance degrades rapidly at temperatures above 200 to 300 degrees
celsius, adequate heat sinking is a principal requirement. Flipping of the GaAs
chip will aid in heat removal because the active heat producing region of the
chip is now closer to the substrate surface and heat does not have to pass
through the bulk of the low thermal conductivity material. Flipped GaAs chips do
not need to be thinned since heat is removed through the bumps. Lack of the
necessity to thin results in lower cost and makes the chip much more robust
since the bulk material is so brittle.
CPSI QUALITY ASSURANCE
Table 2-2 list examples of qualification specifications to validate the
Compliant Plug and Socket Interconnect. The program is geared toward military
satellite applications. The sequence of tests is shown for the cured and clamped
bond and includes lifetime at a low temperature. Specifications for GaAs and Si
devices will include functional tests.
The plan for validation and qualification of the CPSI technology is based
on MIL-STD-883 methods and derived from Method 5011 in particular.
The process to be validated is the creation of bumps with conductive
compliant epoxy. We intend to demonstrate that the bumping process is consistent
and produces bumps that maintain conductivity throughout the application
lifetime. The validation will be conducted on bumps that have been cured into
sockets or mechanically clamped together per Table 2-2.
Method 5011 sequential testing will be used to qualify the bumping
process. In addition, ultrasonic inspection and SEM will be used to characterize
the types of voids to be expected in the socket material interfaces. Some
devices will be packaged and subjected to RGA in order to characterize the
internal environment.
Page 16
<PAGE>
<TABLE>
<CAPTION>
Test MIL-STD-833 Method & Purpose of Test
Condition
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
Process Validation
Subgroup 1 Cured 3 samples
Subgroup 2 Mech. Clamped 3 samples
- ---------------------------------------------------------------------------------------------------------------------------
Insertion/Removal Manually 50 times simulation of worst case
application environment
- ---------------------------------------------------------------------------------------------------------------------------
Electrical Continuity
- ---------------------------------------------------------------------------------------------------------------------------
Qualification, Sequential Testing
Subgroup 3, Cured
Subgroup 4, Mech. Clamped 10 samples
10 samples
- ---------------------------------------------------------------------------------------------------------------------------
Thermal Shock M1011, Cond. C, 15 cycles pre-conditioning for electrical test
- ---------------------------------------------------------------------------------------------------------------------------
Temperature Cycle M1010, Cond. C, 100 cycles pre-conditioning for electrical test
- ---------------------------------------------------------------------------------------------------------------------------
Mechanical Shock M2002, Cond B, Y1 axis pre-conditioning for electrical test
- ---------------------------------------------------------------------------------------------------------------------------
Variable Frequency Vibration M2007, Cond. A, Y1 axis pre-conditioning for electrical test
- ---------------------------------------------------------------------------------------------------------------------------
Constant Acceleration Method 2001, Condition A, Y1 pre-conditioning for electrical test
direction
- ---------------------------------------------------------------------------------------------------------------------------
Visual Exam M2017 Inspect for degradation of epoxy
- ---------------------------------------------------------------------------------------------------------------------------
Electrical Continuity
- ---------------------------------------------------------------------------------------------------------------------------
Volume Resistivity M5011
- ---------------------------------------------------------------------------------------------------------------------------
Ultrasonic Inspection M2035 Inspect for voids in socket epoxy
- ---------------------------------------------------------------------------------------------------------------------------
SEM M2018 Inspect for voids in socket epoxy
- ---------------------------------------------------------------------------------------------------------------------------
RGA 3 additional samples hermetically
packaged. M1018
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Table 2-2. Validation Criteria
ISC Proposal 952011 Page 17 NAS7-1338
<PAGE>
3. PHASE II WORK PLAN
Figure 3-1 presents an overview of the proposed twenty-one (21) month
program. Descriptions of the proposed technical tasks are presented in the
following section
3.1 Performance Schedule
<TABLE>
<CAPTION>
FY96 FY97
-----------------------------------------
Task Name O N D J F M A M J J A S O N D J F M A M J
- -----------------------------------------------------------------------
<S> <C> <C>
CPSI Phase II SBIR
- -----------------------------
Polyimer Investigation
- -----------------------------
Process and Fixture Develop
- -----------------------------
MCM Demonstration
- -----------------------------
MCM Models
- ----------------------------- [GRAPH APPEARS HERE]
Procure Compounds
- -----------------------------
Apply Bumps and Assemble
- -----------------------------
Fixtures, Mechanical
- -----------------------------
Fixtures, Electrical
- -----------------------------
Test
- -----------------------------
Diamond Substrate Demon
- -----------------------------
Procure Substrate
- -----------------------------
Bond GaAs
- -----------------------------
Thermal Cycle
- -----------------------------
Project Management
- -----------------------------
PMO
- -----------------------------
Travel
- -----------------------------
Final Report
- -------------------------------------------------------------------------------
</TABLE>
FIGURE 3-1. Work Plan Schedule
3.2 Project Objectives
1. Gather Data on All Candidate Materials. Appropriate materials will be
organic based resins with metal fillers for conductivity . A consultant with
many years of experience and an expert in the field of organic materials in
microelectronics will be utilized in this area. Select a reasonable number of
bump materials and perform tests to identify the optimum material for the cured
bond and another material for the clamped bond. Stencil printing equipment will
need to be purchased by ISC. The test structures used for Phase I work will also
be used in the Phase II material analysis work.
James J. Licari, will be our expert in the field of microelectronic polymers.
His first task entails selection of the proper resins to ensure success. An
individual with broad experience is necessary to locate material candidates from
the enormous amount of organics available.
2. Process Determination. Refine a process to squeegee and B-stage adhesive into
the socket for the cured bond. Design a precision machined clamping mechanism
for the clamped bond. Test for continuity during thermal cycling along with
other qualification specifications. The cause of loss of continuity at cryogenic
temperatures in the Phase I studies will be determined.
ISC Proposal 952011 Page 18 NAS7-1338
<PAGE>
3. Demonstrate Functionality of the Clamped CPSI Bond. An MMC module as
described in Section 8 will be assembled and tested. Drawings are included in
Addendum B. Processors and memory short stacks will be operated using CPSI
between the MCMs in place of fuzz buttons. The MCMs will be clamped and active
devices will be wire bonded due to the top cavity configuration. The use of an
existing module design and hardware will minimize the effort required in this
area (only slight modifications) and will allow emphasis to be directed to the
connector itself. The MMC ceramic MCM substrates will be stencil printed on the
top surface ring and polyimide will be spun on the bottom flat surface. The top
and bottom surfaces of the ceramic will be lapped to less than 1um range
flatness ensuring contact of all the bumps.
4. Demonstrate of the Cured CPSI Bond. A GaAs device will be bonded to a diamond
film substrate. This is contingent, however, on the ability to procure and
process the substrate which is still a relatively new material. The bonded
pair will be thermal cycled to demonstrate CTE mismatch management.
3.3 Project Deliverable
The deliverables of this project are:
1. Required Reports and Final Report including functional test data.
2. Phase III Business Plan.
3. A prototype of a CPSI MCM.
4. A prototype of GaAs on diamond.
ISC Proposal 952011 Page 19 NAS7-1338
<PAGE>
4. OFFFEROR INFORMATION
Irvine Sensors Corporation is a world leader in 3D Stacking technologies
for highly sophisticated dense 3D electronics packaging and focal plane arrays.
The equipment now used by ISC in the fabrication of 3D electronics assemblies is
industry-standard in nature.
ISC occupies over 20,000 square feet of laboratory, management, and
administrative space. Laboratory operations and engineering occupy 60% of the
facility. The laboratory is organized to facilitate several functional areas
required by the company's business segments. These segments include
densely-packaged 3D electronics modules, signal processing electronics design,
and product fabrication.
ISC is aggressively pursuing commercial and military applications 3D Silicon
technology across a broad market place that includes computer memory products,
image processors, neural networks, massively parallel processors, and infrared
focal plane arrays. All of these pursuits relate in some way to the proposed
program, and their enumeration and description would be too lengthy and
repetitive for inclusion here. Representative examples of those most closely
related will be used.
4.1 Massively Parallel Processors
For the past two years on a NASA JPL SBIR, Irvine Sensors has worked with
nCube Corporation to develop a high density package of their basic MPP note,
consisting of a microprocessor and its associated memory. Shown in Figure 4-1,
the results of this project are now in demonstration test at nCube. This
one-inch square package replaces a three to five inch printed circuit board, a
factor of more than ten area reduction. nCube MPC's typically contain 1000 such
processing nodes so that a factor of ten volumetric savings is the difference
between a laptop and a room-filling system.
[PICTURE OF IRVINE SENSORS' SOBIEC MODULE APPEARS HERE]
Figure 4-1. Irvine Sensors' SOBIEC Module
ISC Proposal 952011 Page 20 NAS7-1338
<PAGE>
4.2 High Density, Low Cost MCMs
On an SBIR program nearing completion for the U.S. Air Force Phillips Labs,
Irvine Sensors is packaging a digital signal processing node in an extremely
dense package (See Figure 4-2). The device includes the Texas Instruments
TMS320C30 DSP, all of its glue logic, and associated memory, in a modular, field
repairable unit. This project is very significant to the proposed program in
that its architecture is completely compatible with single board architecture
described in Figure 1-3 and in Addendum B.
[PICTURE OF IRVINE SENSORS' MMC APPEARS HERE]
Figure 4-2. Irvine Sensors' MMC
The key capability is the high channel density which enables a high MPP
density as explained in attachment 1.
4.3 3D Silicon Manufacturing
The cornerstone of 3D Silicon technology is the commitment on the part of
Irvine Sensors and its strategic partners to high volume commercial production.
This commitment became a reality in 1992 with the announcement of the
partnership with IBM to commercialize the technology. The two corporations have
jointly developed the production technology to achieve 1000 cubes per day
production rates at commercially competitive prices. Figure 4-3 shows the
interior of the Early Production Line (EPL) at the IBM semiconductor
manufacturing site in Burlington, VT. In 1994, Irvine Sensors executed an $8.5
million stock offering to finance the replication of the EPL at Irvine Sensors'
facility in South Burlington, VT.
ISC Proposal 952011 Page 21 NAS7-1338
<PAGE>
[PICTURE OF EPL APPEARS HERE]
Figure 4-3. Dual Use 3D Silicon Foundry is built around the Early Production
Line (EPL) for "cubing" at IBM in Burlington, which can be scaled to meet the
demands of a mainstream 3D Silicon technology.
ISC Proposal 952011 Page 22 NAS7-1338
<PAGE>
In addition, a small volume 3D Silicon production facility has been put in
place in Costa Mesa, CA, to satisfy military and scientific users of 3D silicon.
4.4 SIRComm/TM/
The Irvine Sensors Corporation SIRComm/TM/ SIR2 is a dual voltage,
micropower, IrDA and ASK Compliant IR receiver. It features a high gain
photodiode amplifier, 90uA operating current that is constant over supply
voltages of 3.3 and 5 volts. A unique design technique allows the SIR2 to both
directly interface to IrDA/ASK compatible IR detector diodes and operate over a
wide input dynamic range. The output is capable of driving a 40 pf. load at
CMOS/TTL levels for direct interfacing into IrDA compliant UARTs or Super
I/O/TM/ devices over 2400 to 115.2 Kbaud.
The SIR2's integrated photodiode amplifiers and on-chip bandpass filter
include input overload clamps in each circuit to eliminate the requirement for
device overload recovery time. A control pin is provided to allow operation with
either 3.3 or 5V supplies.
SIRComm was developed to meet the needs of the high volume, cost sensitive
PC marketplace. We enjoy a leadership role for this particular product which is
in production at a rate approaching several million devices per year. SIRComm's
aggressive pricing at under $2.00 per part was realized by a close interaction
between our circuit designers and a large number of computer and
telecommunications customers, as well as our presence on the IrDA standards
committee.
[PICTURE OF IRDA COMPLIANT IR RECEIVERS APPEARS HERE]
Figure 4-4. Irvine Sensors Corporation Is The World Leader
In IrDA Compliant IR Receivers
ISC Proposal 952011 Page 23 NAS7-1338
<PAGE>
5. EQUIPMENT, INSTRUMENTATION, COMPUTERS, AND FACILITIES
ISC has organized its laboratories to facilitate the several functional areas
required by the Company's business segments. These business segments include
densely-packaged 3D electronics modules, and signal processing electronics
design and fabrication.
ISC's laboratory facilities support the mechanical preparation of silicon
wafers containing either analog signal processing or digital ICs. This
preparation includes the precision thinning of the wafers to as little as 2
mils, and the dicing of the thinned wafers into individual ICs. The Company
utilizes a Laseruler and specialized inspection and measurement microscopes to
maintain and verify the critical dimensions of the die prior to incorporation
into the dense electronics cube. This dimensional control is required to ensure
that each of the electrical leads incorporated into typical 3D modules will be
maintained within a grid within as little as 1 mil variability in both the X and
Y axes.
Support for Mechanical Preparation of Silicon Wafers and Cubes - The ISC
laboratory supports the mechanical preparation of silicon wafers containing
either analog signal processing or memory ICs. This preparation includes the
precision thinning, dicing, and reroute metalization. Precision thinning
(grinding/etching) of up to 8 inch wafers to as thin as 50 microns is
accomplished on a Strasbaugh grinder to within tolerances of + or - 1um. Wafer
dicing is performed on a fully automatic DISCO dicing saw. Metal reroute on the
wafers is performed in a combination of metal evaporation and within ISC's full
metal plating operation.
ISC uses a Laserule and various inspection and measurement microscopes to
maintain and verify the critical dimensions of the die prior to incorporation
into the dense electronics cube. This dimensional control is required to ensure
that each of the 16,000+ electrical leads incorporated in a single HYMOSS/TM/
module will be maintained within a grid with as little as 1 mil variability in
both the X and Y axes. Cube lamination is performed in custom proprietary
fixtures which have been updated to facilitate batch processing. Cube faces are
planarized for bus and pad metal using two Strasbaugh lapping machines.
Inspection Capabilities - As part of the Quality Program, the ICS laboratory
uses photographic inspection capabilities, a Scanning Electron Microscope,
Stereo and Toolmaker microscopes, and profilometer for surface profile data.
Computer Controlled Alessi Probe Station - All ICs are electrically evaluated,
using special-purpose automated test equipment. The IC test lab includes a
computer-controlled Alessi Probe station, and a computerized data acquisition
system designed and constructed by ISC. After being fully characterized, the ICs
are laminated into the densely-packaged Z-technology electronics structure.
All ICs are evaluated electrically, utilizing special-purpose automated test
equipment. The IC test lab includes a computer-controlled Alessi Probe station
(Figure 5-1), and a computerized data acquisition system designed and
constructed by ISC.
ISC Proposal 952011 Page 24 NAS7-1338
<PAGE>
[PICTURE OF ALESSI REL-4500 APPEARS HERE]
Figure 5-1. Alessi REL-4500
"Bump bonding" is performed with the use of a thin film evaporation system
which is capable of depositing three metals simultaneously. The bump bonding
alignment equipment was designed by ISC engineers to accept all types of 3D
electronics packages. Memory stacks while are bonded to interconnection
substrates to complete the 3D digital system.
ISC conducts basic research in areas such as materials compatibility,
process failure analysis and electronics circuitry operation to gain further
understanding of the complex interactions involved in the 3D module fabrication
process. ISC utilizes its scanning electron microscope to aid in the basic
research into these areas. A surface profilometer with a measurement resolution
of five Angstroms is also used in thin film analyses.
Modern Clean Rooms - Three modern clean rooms, totaling 1,150 sq. ft., house all
the necessary equipment to perform thin film and photolithography processes down
to a class 100 clean. Equipment in this area includes three thin film sputtering
systems including an MRC Triple Target RF-DC system, two evaporation systems,
and two photo mask alignment and exposure units including a Carl Sus indexing
aligner with 0.6um resolution. ISC is capable of dry (plasma etching, plasma
ashing) and wet (chemical etching) processing.
After being fully characterized, the ICs are laminated into the
densely-packaged electronics structure discussed above. Modern clean room
houses all the necessary equipment to perform thin film and photolithographic
processes. (Figure 5-2) Equipment in this area includes thin film sputter
deposition machines and a photomask alignment and exposure unit.
ISC Proposal 952011 Page 25 NAS7-1338
<PAGE>
[ARTWORK APPEARS HERE]
Figure 5-2. Modern Clean Rooms
Page 26
<PAGE>
Bump Bonding Capabilities - The bump bonding alignment equipment was designed by
ISC engineers to accept large area detector arrays and all types of 3D
electronics packages. Bump bonding is performed with the use of a thin film
evaporation system which is capable of depositing three metals simultaneously.
The digital electronics packages are bonded to interconnect substrates to
complete the 3D digital system. ISC conducts basic research in areas such as
materials compatibility, process failure analysis and electronics circutry
operation to gain further understanding of the complex interactions involved in
the 3D module fabrication process. ISC uses its scanning electron microscope to
aid in this research. A Tencor Surface Profilometer with a measurement
resolution of five Angstroms is also used in thin film analysis.
Computer-Aided Design and Analysis Capabilities - ISC uses a variety of computer
software models relevant to the requirements of its high-density focal plane,
memory systems, and analog signal processing electronics. ISC is currently using
state of the art Mentor Graphics series A.2-i (8.4) IC design software. This
includes full mixed mode simulation using HSPICE and LSIM, switched capacitor
simulators, full layout and auto routing capabilities, and full verification
software including LVS and DRC technology ranging from simple gates to complex
cryogenic amplifier and analog to digital converter designs. The library
component contains both physical layouts and HSPICE transistor and higher level
performance models.
ISC uses both workstations and PC-based software packages for the design
and analysis of its complex signal processing ICs. ISC's design computer network
consists of 8 Sun Sparc workstations 10 and 20-60s) and numerous 486 type PCs.
Specialty Support - Both gas and water distribution systems are used to ensure
process reproducibility and dependability. ISC incorporates a deionized
purification water system capable of delivering 18 megohm quality water. We use
highly filtered air, nitrogen, and a house vacuum system in the production
process.
The newly installed pH Neutralization and Controller unit exceeds all
environmental standards. The ISC facility is in full compliance with
environmental laws and regulations of federal, state, and local governments for,
but not limited to, these groupings: airborne emissions, waterborne effluents,
external radiation levels, outdoor noise, solid and bulk waste disposal
practices, handling and storage of toxic and harzardous materials.
ISC was issued a Top Secret facility clearance with Secret storage
capability, by DCASR Los Angeles, on 4 February 1980. Cognizant security office
is the Defense Investigative Service, 3605 Long Beach Boulevard, Suite 405, Long
Beach, CA 90807-4015, (310) 595-8644/7652.
Page 27
<PAGE>
EXHIBIT 10.23
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AWARD/CONTRACT 1. THIS CONTRACT IS A RATED ORDER RATING PAGE of PAGES
UNDER DPAS (15 CFR 350) DO-CS(U) 1 21
- -----------------------------------------------------------------------------------------------------------------------------------
2. CONTRACT (Proc. Inst. Ident.) No. 3. EFFECTIVE DATE 4. REQUISITION/PURCHASE REQUEST/PROJECT NO.
N00014-96-C-0279 See Block 20c 96PR06041-00 / 18 APR 96 / 311 EW
- -----------------------------------------------------------------------------------------------------------------------------------
5. ISSUED BY CODE N00014 6. ADMINISTERED BY (If other than Item 5) CODE S0513A
--------------- -------------------------
OFFICE OF NAVAL RESEARCH DCMC SANTA ANA SCD-C
ONR 251 WDW (703) 696-2574 34 CIVIC CENTER PLZ
BALLSTON TOWER ONE PO BOX C 12700
800 NORTH QUINCY STREET SANTA ANA, CA 92712-2700
ARLINGTON, VA 22217-5660
- -----------------------------------------------------------------------------------------------------------------------------------
7. NAME AND ADDRESS OF CONTRACTOR (No., street, city, county, 8. DELIVERY
State and ZIP Code.)
See SECTION F of Schedule
IRVINE SENSORS, INC.
3001 REDHILL AVENUE [_] FOB ORIGIN [_] OTHER (See below)
COSTA MESA, CA 92626 ------------------------------------------------------------
9. DISCOUNT FOR PROMPT PAYMENT
N.A.
------------------------------------------------------------
10. SUBMIT INVOICES (4 copies ITEM
unless otherwise specified) TO THE SEE SECTION G
- ----------------------------------------------------------------------- ADDRESS SHOWN IN
CODE 54266 FACILITY CODE
- -----------------------------------------------------------------------------------------------------------------------------------
11. SHIP TO/MARK FOR CODE N08014 12. PAYMENT WILL BE MADE BY CODE SC 1006
------------------------- --------------------
PROGRAM OFFICER DFAS COLUMBUS CENTER
SEE SECTION F - DELIVERIES OR PERFORMANCE DFAS CO JWT SANTA ANA
PO BOX 182381
COLUMBUS, OH 43218-2381
- -----------------------------------------------------------------------------------------------------------------------------------
13. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION: 14. ACCOUNTING AND APPROPRIATION DATA
[_] 18 U.S.C. 2304(c)( N/A )
[_] 41 U.S.C. 253(c)( N/A ) See Attached Financial Accounting Data Sheet(s)
- -----------------------------------------------------------------------------------------------------------------------------------
15A. ITEM NO. 15B. SUPPLIES/SERVICES 15C. QUANTITY 15D. UNIT 15E. UNIT 15F. AMOUNT
PRICE
- -----------------------------------------------------------------------------------------------------------------------------------
See SECTION B of Schedule
- -----------------------------------------------------------------------------------------------------------------------------------
15G. TOTAL AMOUNT OF CONTRACT $ 749,671.00
- -----------------------------------------------------------------------------------------------------------------------------------
16. TABLE OF CONTENTS
- -----------------------------------------------------------------------------------------------------------------------------------
(X) SEC DESCRIPTION PAGE(S) (X) SEC DESCRIPTION PAGE(S)
- -----------------------------------------------------------------------------------------------------------------------------------
PART I - THE SCHEDULE PART II - CONTRACT CLAUSES
- -----------------------------------------------------------------------------------------------------------------------------------
X A SOLICITATION/CONTRACT FORM 1 X I CONTRACT CLAUSES 6-21
- -----------------------------------------------------------------------------------------------------------------------------------
X B SUPPLIES OR SERVICES AND PRICES/COSTS 2 PART 111 - LIST OF DOCUMENTS,
EXHIBITS AND OTHER ATTACH.
- -----------------------------------------------------------------------------------------------------------------------------------
X C DESCRIPTION/SPECS./WORK STATEMENT 2 X J LIST OF ATTACHMENTS 21
- -----------------------------------------------------------------------------------------------------------------------------------
X D PACKAGING AND MARKING 2 PART IV - REPRESENTATIONS AND INSTRUCTIONS
- -----------------------------------------------------------------------------------------------------------------------------------
X E INSPECTION AND ACCEPTANCE 2 K REPRESENTATIONS, CERTIFICATIONS AND
OTHER STATEMENTS OF OFFERORS
- -----------------------------------------------------------------------------------------------------------------------------------
X F DELIVERIES OR PERFORMANCE 2-3
- -----------------------------------------------------------------------------------------------------------------------------------
X G CONTRACT ADMINISTRATION DATA 3-5 L INSTRS., CONDS., AND NOTICES TO OFFERORS
- -----------------------------------------------------------------------------------------------------------------------------------
x H SPECIAL CONTRACT REQUIREMENTS 5-6 M EVALUATION FACTORS FOR AWARD
- -----------------------------------------------------------------------------------------------------------------------------------
CONTRACTING OFFICER WILL COMPLETE ITEM 17 OR 18 AS APPLICABLE
- -----------------------------------------------------------------------------------------------------------------------------------
17. [X] CONTRACTOR'S NEGOTIATED AGREEMENT (Contractor is 18. [ ] AWARD (Contractor is not required to sign this document.)
required to sign this document Your offer on Solicitation Number ________. Including the
and return _2_ copies to issuing office.) Contractor agrees additions or changes made by you which additions or changes are set
to furnish and deliver all items or perform all the services forth in full above, is hereby accepted as to the terms listed
set forth or otherwise identified above and on any above and on any continuation sheets. This award consummates the
continuation sheets for the consideration stated herein. The contract which consists of the following documents: (a) the
rights and obligations of the parties to this contract shall Government's solicitation and your offer, and (b) this award/
be subject to and governed by the following documents: (a) this contract. No further contractual document is necessary.
award/contract, (b) the solicitation, if any and (c) such
provisions, representations, certifications, and specifications,
as are attached or incorporated by reference herein.
(Attachments are listed herein.)
- -----------------------------------------------------------------------------------------------------------------------------------
19A. NAME AND TITLE OF SIGNER (Type or print) 20A. NAME OF CONTRACTING OFFICER
[STAMP OF DAVID PINTO, [STAMP OF LAMBERT C. McCULLOUGH, CONTRACTING OFFICER
TREASURER APPEARS HERE] APPEARS HERE]
- -----------------------------------------------------------------------------------------------------------------------------------
19B. NAME OF CONTRACTOR 19C. DATE SIGNED 20B. UNITED STATES OF AMERICA 20C. DATE SIGNED
IRVINE SENSORS CORPORATION
By [SIGNATURE APPEARS HERE] 960716 By [SIGNATURE APPEARS HERE] 7-17-96
-------------------------- --------------------------
(Signature of personauthorized to sign) (Signature of Contracting Officer)
- -----------------------------------------------------------------------------------------------------------------------------------
NSN 7540-01-152-8069 STANDARD FORM 26 (REV. 4-85)
PREVIOUS EDITION UNUSABLE Prescribed by GSA
NAVONR OVERPRINT (4-85) FAR (48 CFR) 53.214(a)
</TABLE>
<PAGE>
SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS
================================================================================
ESTIMATED FIXED TOTAL ESTIMATED
ITEM NO. SUPPLIES/SERVICES COST FEE COST & FIXED FEE
================================================================================
0001 The Contractor shall $699,563.00 $50,108.00 $749,671.00
furnish the necessary
personnel and facilities
to conduct research as
described in Section C.
- --------------------------------------------------------------------------------
0002 Reports and Data in NSP
accordance with Exhibit A
(DD Form 1423)
================================================================================
TOTAL ESTIMATED CONTRACT $699,563.00 $50,108.00 $749,671.00
CONSIDERATION:
================================================================================
SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT
1. The work and services to be performed hereunder shall be subject to the
requirements and standards contained in Exhibit A and the following
paragraph(s).
2. The contractor shall conduct work in accordance with Section 3, entitled
"Phase II Work Plan," on pages 13-15 of the contractor's proposal entitled, "3D
Silicon MIMD/SIMD Massively Parallel Processor," dated 16 MAY 1995, which
section is hereby incorporated by reference.
SECTION D - PACKAGING AND MARKING
Preservation, packaging, packing and marking of all deliverable contract line
items shall conform to normal commercial packing standards to assure safe
delivery at destination.
SECTION E - INSPECTION AND ACCEPTANCE
Inspection and acceptance of the final delivery under this contract will be
accomplished by the Program Officer designated in Section F of this contract,
who shall have at least thirty (30) days after contractual delivery for
acceptance.
SECTION F - DELIVERIES OR PERFORMANCE
1. The research work under this contract shall be conducted during the period
from the award date through 31 JAN 1998. A final report will be prepared,
submitted, reproduced and distributed by sixty days thereafter unless the
contract is extended, in which case, the final report will be prepared in
accordance with the terms of such extension.
a. Item No. 0002 of Section B (Reports and Data) shall be delivered within
the time periods stated in Exhibit A, F.O.B. Destination.
2. Distribution, consignment and marking instructions for all contract line
items shall be in accordance with the following:
Page 2
<PAGE>
a. Item No. 0002 shall be shipped F.O.B. Office of Naval Research,
Arlington, Virginia 22217-5660, consigned to:
Program Officer
Office of Naval Research
Ballston Tower One
800 North Quincy Street
Arlington, Virginia 22217-5660
Attn: Elizabeth Wald
Ref: Contract N00014-96-C-0279
SECTION G-CONTRACT ADMINISTRATION DATA
1. NAPS 5252.232-9001 SUBMISSION OF INVOICES (COST REIMBURSEMENT,
TIME-AND-MATERIALS, LABOR-HOUR, OR FIXED PRICE INCENTIVE) (JUL 1992)
(a) "Invoice" as used in this clause includes contractor requests for
interim payments using public vouchers (SF 1034) but does not include contractor
requests for progress payments under fixed price incentive contracts.
(b) The Contractor shall submit invoices and any necessary supporting
documentation, in an original and 4 copies, to the contract auditor* at the
following address:
DFAS COLUMBUS CENTER
DFAS CO JWT SANTA ANA
PO BOX 182381
COLUMBUS, OH 43218-2381
unless delivery orders are applicable, in which case invoices will be segregated
by individual order and submitted to the address specified in the order. In
addition, an information copy shall be submitted to the Program Officer
identified in Section F.2a of this contract. Following verification, the
contract auditor* will forward the invoice to the designated payment office for
payment in the amount determined to be owing, in accordance with the applicable
payment (and fee) clause(s) of this contract.
(c) Invoices requesting interim payments shall be submitted no more than
once every two weeks, unless another time period is specified in the Payments
clause of this contract. For indefinite delivery type contracts, interim payment
invoices shall be submitted no more than once every two weeks for each delivery
order. There shall be a lapse of no more than 30 calendar days between
performance and submission of an interim payment invoice.
(d) In addition to the information identified in the Prompt Payment clause
herein, each invoice shall contain the following information, as applicable:
(1) Contract line item number (CLIN)
(2) Subline item number (SLIN)
(3) Accounting Classification Reference Number (ACRN)
(4) Payment terms
(5) Procuring activity
CONTRACT NUMBER: N00014-96-C-0279
Page 3
<PAGE>
(6) Date supplies provided or services performed
(7) Costs incurred and allowable under the contract
(8) Vessel (e.g., ship, submarine or other craft) or system for
which supply/service is provided.
(e) A DD Form 250, "Material Inspection and Receiving Report"
is required only with the final invoice.
(f) A Certificate of Performance shall be provided with each invoice
submittal.
(g) The Contractor's final invoice shall be identified as such, and shall
list all other invoices (if any) previously tendered under this contract.
(h) Costs of performance shall be segregated, accumulated and invoiced to
the appropriate ACRN categories to the extent possible. When such segregation of
costs by ACRN is not possible for invoices submitted with CLINS/SLINS with more
than one ACRN, an allocation ratio shall be established in the same ratio as the
obligations cited in the accounting data so that costs are allocated on a
proportional basis.
2. Method of Payment
-----------------
As consideration for the proper performance of the work and services required
under this contract, the Contractor shall be paid as follows:
a. Costs, as provided for under the contract clause entitled
"Allowable Cost and Payment," not to exceed the amount set forth as "Estimated
Cost" in Section B, subject to the contract clause entitled "Limitation of Cost"
or "Limitation of Funds" whichever is applicable.
b. A fixed fee in the amount set forth as "Fixed Fee" in Section B,
in accordance with the contract clause entitled "Fixed Fee", which shall be paid
upon completion of the work and services required under this contract and upon
final acceptance by the Contracting Officer, however, the Contractor may bill on
each voucher the amount of the fee bearing the same percentage to the total
fixed fee as the amount of cost billed bears to the total estimated cost.
3. Procuring Office Representatives
--------------------------------
a. In order to expedite administration of this contract, the
Administrative Contracting Officer should direct inquiries to the appropriate
office listed below. Please do not direct routine inquiries to the person listed
in Item 20A on Standard Form 26.
Contract Negotiator - Wade Wargo, ONR 251, (703)696-2574, Autovon 426-2574
Inspection and Acceptance - Elizabeth Wald, ONR 311, (703)696-0157, Autovon
426-0157
Security Matters - ONR 93, (703)696-4618, Autovon 426-4618
Patent Matters - Mr. William McCarthy, ONR 00CC, (703)696-4003, Autovon
426-4003
b. The Administrative Contracting Officer will forward invention
disclosures and reports directly to Patent Counsel (ONR 00CC), Office of Naval
Research, Department of the Navy, Arlington, Virginia 22217-5660. The Patent
Counsel will return the reports along with a recommendation to the
CONTRACT NUMBER: N00014-96-C-0279 Page 4
<PAGE>
Administrative Contracting Officer. The Patent Counsel will represent the
Contracting Officer with regard to invention reporting matters arising under
this contract.
4. Type of Contract
----------------
This is a cost-plus-fixed-fee completion contract.
SECTION H - SPECIAL CONTRACT REQUIREMENTS
1. ONR 5252.235-9714 REPORT PREPARATION (DEC 1988)
Scientific or technical reports prepared by the Contractor and deliverable under
the terms of this contract will be prepared in accordance with format
requirements contained in ANSI Z39.18, Scientific and Technical Reports:
Organization, Preparation and Production.
2. ONR 5252.210-9708 METRICATION REQUIREMENTS (DEC 1988)
(a) All scientific and technical reports reports delivered pursuant to the
terms of this contract shall identify units of measurement in accordance with
the International System of Units (SI) commonly referred to as the "Metric
System". Conversion to U.S. customary units may also be given where additional
clarity is deemed necessary. Guidance for application of the metric system is
contained in the American Society of Testing Materials document entitled
"Standard Practice for Use of the International System of Units (The Modernized
Metric System)" (ASTM Designation E 380-89A)
(b) This provision also applies to journal article preprints, reprints,
commercially published books or chapters of books, theses or dissertations
submitted in lieu of a scientific and/or technical report.
3. Invention Disclosures and Reports
---------------------------------
The Contractor shall submit all invention disclosures and reports required by
the Patent Rights clause of this contract to the Administrative Contracting
Officer.
4. ONR 5252.242-9718 TECHNICAL DIRECTION (DEC 1988)
(a) Performance of the work hereunder is subject to the technical
direction of the Program Officer/COTR designated in this contract, or duly
authorized representative. For the purposes of this clause, technical direction
includes the following:
(1) Direction to the Contractor which shifts work emphasis between
work areas or tasks, requires pursuit of certain lines of inquiry, fills in
details or otherwise serves to accomplish the objectives described in the
statement of work;
(2) Guidelines to the Contractor which assist in the interpretation
of drawings, specifications or technical portions of work description.
(b) Technical direction must be within the general scope of work stated
in the contract. Technical direction may not be used to:
(1) Assign additional work under the contract;
CONTRACT NUMBER: N00014-96-C-0279 Page 5
<PAGE>
(2) Direct a change as defined in the contract clause entitled
"Changes";
(3) Increase or decrease the estimated contract cost, the fixed fee,
or the time required for contract performance; or
(4) Change any of the terms, conditions or specifications of the
contract.
(c) The only individual authorized to in any way amend or modify any of
the terms of this contract shall be the Contracting Officer. When, in the
opinion of the Contractor, any technical direction calls for effort outside the
scope of the contract or inconsistent with this special provision, the
Contractor shall notify the Contracting Officer in writing within ten working
days after its receipt. The Contractor shall not proceed with the work affected
by the technical direction until the Contractor is notified by the Contracting
Officer that the technical direction is within the scope of the contract.
(d) Nothing in the foregoing paragraphs may be construed to excuse the
Contractor from performing that portion of the work statement which is not
affected by the disputed technical direction.
SECTION I - CONTRACT CLAUSES
Cost-Plus-Fixed-Fee - Research and Development (JUN 1996) (1)
* Applies when contract action exceeds $10,000.
** Applies when contract action exceeds $50,000.
*** Applies when contract action exceeds $100,000.
+ Applies when contract action exceeds $500,000.
++ Applies when contract action exceeds $500,000
and subcontracting possibilities exist.
O Small Business Exempt
x (DD 250).
(a) FAR 52.252-02 CLAUSES INCORPORATED BY REFERENCE (JUN 1988)
This contract incorporates the following clauses by reference, with the same
force and effect as if they were given in full text. Upon request, the
Contracting Officer will make their full text available.
I. FEDERAL ACQUISITION REGULATION (FAR) (48 CFR CHAPTER 1) CLAUSES:-
================================================================================
** FAR 52.202-01 Definitions (OCT 1995)
- --------------------------------------------------------------------------------
FAR 52.203-03 Gratuities (APR 1984)
- --------------------------------------------------------------------------------
FAR 52.203-05 Covenant Against Contingent Fees (APR 1984)
- --------------------------------------------------------------------------------
FAR 52.203-07 Anti-Kickback Procedures (JUL 1995)
- --------------------------------------------------------------------------------
** FAR 52.203-10 Price or Fee Adjustment for Illegal or Improper
Activity (SEP 1990)
- --------------------------------------------------------------------------------
*** FAR 52.203-12 Limitation on Payments to Influence Certain Federal
Transactions (JAN 1990)
- --------------------------------------------------------------------------------
CONTRACT NUMBER N00014-96-C-0279 Page 6
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- --------------------------------------------------------------------------------
FAR 52.204-5 Women-Owned Business (OCT 1995)
- --------------------------------------------------------------------------------
FAR 52.211-15 Defense Priority and Allocation Requirements (SEP
1990)
- --------------------------------------------------------------------------------
FAR 52.215-02 Audit and Records - Negotiation (OCT 1995)
- --------------------------------------------------------------------------------
+ FAR 52.215-22 Price Reduction for Defective Cost or Pricing Data
(OCT 1995)
- --------------------------------------------------------------------------------
+ FAR 52.215-24 Subcontractor Cost or Pricing Data (OCT 1995)
- --------------------------------------------------------------------------------
FAR 52.215-26 Integrity of Unit Prices (OCT 1995)
- --------------------------------------------------------------------------------
FAR 52.215-26 Alternate I (APR 1991) (Applicable if action
contracted under Other Than Full and Open
Competition)
- --------------------------------------------------------------------------------
FAR 52.215-27 Termination of Defined Benefit Pension Plans (MAR
1996)
- --------------------------------------------------------------------------------
FAR 52.215-33 Order of Precedence (JAN 1986)
- --------------------------------------------------------------------------------
FAR 52.215-39 Reversion or Adjustment of Plans for Postretirement
Benefits Other than Pensions (PRB) (MAR 1996)
- --------------------------------------------------------------------------------
FAR 52.215-43 Audit -- Commercial Items (OCT 1995)
- --------------------------------------------------------------------------------
FAR 52.216-07 Allowable Cost and Payment (JUL 1991) (As modified
by DoD Class Deviation 95-00003 dated 13 July
1995)
- --------------------------------------------------------------------------------
FAR 52.216-08 Fixed Fee (APR 1984) (As modified by DoD Class
Deviation 95-00003 dated 13 July 1995)
- --------------------------------------------------------------------------------
** FAR 52.219-08 Utilization of Small, Small Disadvantaged, and
Women-Owned Small Business Concerns (OCT
1995)
- --------------------------------------------------------------------------------
++O FAR 52-219-09 Small, Small Disadvantaged, and Women-Owned
Small Business Subcontracting Plan (OCT 1995)
- --------------------------------------------------------------------------------
++O FAR 52.219-16 Liquidated Damages -- Subcontracting Plan (OCT
1995)
- --------------------------------------------------------------------------------
FAR 52.222-01 Notice to the Government of Labor Disputes (APR
1984)
- --------------------------------------------------------------------------------
*** FAR 52.222-02 Payment for Overtime Premiums (JUL 1990) (Note:
The word "zero" is inserted in the blank space
indicated by an asterisk)
- --------------------------------------------------------------------------------
FAR 52.222-03 Convict Labor (APR 1984) (Reserved when FAR
52.222-20 Walsh Healy Public Contracts Act is
applicable)
- --------------------------------------------------------------------------------
</TABLE>
CONTRACT NUMBER N00014-96-C-0279 Page 7
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<C> <C> <S>
FAR 52.222-04 Contract Work Hours and Safety Standards Act-
Overtime Compensation (JUL 1995)
- --------------------------------------------------------------------------------
FAR 52.222-26 Equal Opportunity (APR 1984)
- --------------------------------------------------------------------------------
* FAR 52.222-35 Affirmative Action for Special Disabled and Vietnam
Era Veterans (APR 1984)
- --------------------------------------------------------------------------------
FAR 52.222-36 Affirmative Action for Handicapped Workers (APR
1984)
- --------------------------------------------------------------------------------
* FAR 52.222-37 Employment Reports on Special Disabled Veterans
and Veterans of the Vietnam Era (JAN 1988)
- --------------------------------------------------------------------------------
*** FAR 52.223-02 Clean Air and Water (APR 1984)
- --------------------------------------------------------------------------------
** FAR 52.223-06 Drug-Free Workplace (JUL 1990) (Applies when
contract action equals or exceeds $25,000 or when
any modification increases the total contract value
to $25,000 or more)
- --------------------------------------------------------------------------------
FAR 52.225.11 Restrictions on Certain Foreign Purchases (MAY
1992)
- --------------------------------------------------------------------------------
FAR 52.227-01 Authorization and Consent (JUL 1995) and Alternate
1 (APR 1984)
- --------------------------------------------------------------------------------
** FAR 52.227-02 Notice and Assistance Regarding Patent and
Copyright Infringement (APR 1984)
- --------------------------------------------------------------------------------
FAR 52.228-07 Insurance Liability to Third Persons (MAR 1996)
(Further to paragraph (a)(3), unless otherwise
stated in this contract, type and limits of
insurance required are as stated in FAR 28.307-2)
- --------------------------------------------------------------------------------
FAR 52.232-09 Limitation on Withholding of Payments (APR 1984)
- --------------------------------------------------------------------------------
FAR 52.232-17 Interest (JAN 1991)
- --------------------------------------------------------------------------------
FAR 52.232-23 Assignment of Claims (JAN 1986)
- --------------------------------------------------------------------------------
FAR 52.232-25 Prompt Payment (MAR 1994)
- --------------------------------------------------------------------------------
FAR 52.232-28 Electronics Funds Transfer Payment Methods (APR
1989)
- --------------------------------------------------------------------------------
FAR 52.233-01 Disputes (OCT 1995)
- --------------------------------------------------------------------------------
FAR 52.233-03 Protest After Award (OCT 1995) and Alternate I
(JUN 1985)
- --------------------------------------------------------------------------------
FAR 52.242-01 Notice of Intent to Disallow Costs (APR 1984)
- --------------------------------------------------------------------------------
+ FAR 52.242-03 Penalties for Unallowable Costs (OCT 1995)
- --------------------------------------------------------------------------------
FAR 52.242-04 Certification of Indirect Costs (OCT 1995)
- --------------------------------------------------------------------------------
</TABLE>
CONTRACT NUMBER N00014-96-C-0279 Page 8
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
** FAR 52.242-13 Bankruptcy (JUL 1995)
- ----------------------------------------------------------------------------------------
FAR 52.242.15 Stop Work Order (AUG 1989) and Alternate I (APR
1984)
- ----------------------------------------------------------------------------------------
FAR 52.243-02 Changes Cost-Reimbursement (AUG 1987) and
Alternate V (APR 1984)
- ----------------------------------------------------------------------------------------
FAR 52.244-02 Subcontracts (Cost Reimbursement and Letter
Contracts (MAR 1996) and Alternate 1 (JUL 1995)
- ----------------------------------------------------------------------------------------
** FAR 52.244-05 Competition in Subcontracting (JAN 1996)
- ----------------------------------------------------------------------------------------
FAR 52.245-05 Government Property (Cost Reimbursement, Time
and Material or Labor-Hour Contracts) (JAN 1986)
(As modified by DoD Class Deviation 95-00001
dated 14 July 1995)
- ----------------------------------------------------------------------------------------
FAR 52.246-09 Inspection of Research and Development (Short
Form) (APR 1984)
- ----------------------------------------------------------------------------------------
FAR 52.247-63 Preference for U.S. Flag Air Carriers (APR 1984)
- ----------------------------------------------------------------------------------------
FAR 52.249-06 Termination (Cost-Reimbursement) (MAY 1986)
- ----------------------------------------------------------------------------------------
FAR 52.249-14 Excusable delays (APR 1984)
- ----------------------------------------------------------------------------------------
FAR 52.251-01 Government Supply Sources (APR 1984)
- ----------------------------------------------------------------------------------------
FAR 52.253-01 Computer Generated Forms (JAN 1991)
- ----------------------------------------------------------------------------------------
</TABLE>
II. DEPARTMENT OF DEFENSE FAR SUPPLEMENT (DFARS) (48 CFR CHAPTER 2)
CLAUSES:
<TABLE>
<CAPTION>
<S> <C> <C>
DFARS 252.203-7001 Special Prohibition on Employment (NOV 1995)
- ----------------------------------------------------------------------------------------
DFARS 252.204-7003 Control of Government Personnel Work
Product (APR 1992)
- ----------------------------------------------------------------------------------------
** DFARS 252.209-7000 Acquisition from Subcontractors subject to On-
Site Inspection under the Intermediate Range
Nuclear Forces (INF) Treaty (NOV 1995)
- ----------------------------------------------------------------------------------------
+ DFARS 252.215-7000 Pricing Adjustments (DEC 1991)
- ----------------------------------------------------------------------------------------
++0 DFARS 252.219-7003 Small, Small Disadvantaged and Women-
owned Small Business Subcontracting Plan
(DoD Contracts) (APR 1996)
- ----------------------------------------------------------------------------------------
DFARS 252.227-7013 Rights in Technical Data -- Noncommercial
Items (NOV 1995)
- ----------------------------------------------------------------------------------------
</TABLE>
CONTRACT NUMBER N00014-96-C-0279 Page 9
<PAGE>
================================================================================
DFARS 252.227-7014 Rights in Noncommercial Computer Software
and Noncommercial Computer Software
Documentation (JUN 1995)
- --------------------------------------------------------------------------------
DFARS 252.227-7018 Rights in Noncommercial Technical Data and
Computer Software -- Small Business
Innovation Research (SBIR) Program (NOV
1995)
- --------------------------------------------------------------------------------
DFARS 252.227-7019 Validation of Asserted Restrictions --
Computer Software (JUN 1995)
- --------------------------------------------------------------------------------
DFARS 252.227-7030 Technical Data - Withholding of Payment
(OCT 1988)
- --------------------------------------------------------------------------------
DFARS 252.227-7036 Certification of Technical Data Conformity
(MAY 1987)
- --------------------------------------------------------------------------------
DFARS 252.227-7037 Validation of Restrictive Markings on
Technical Data (NOV 1995)
- --------------------------------------------------------------------------------
DFARS 252.231-7000 Supplemental Cost Principles (DEC 1991)
- --------------------------------------------------------------------------------
DFARS 252.232-7006 Reduction or Suspension of Contract Payments
upon Finding of Fraud (AUG 1992)
- --------------------------------------------------------------------------------
*** DFARS 252.233-7000 Certification of Claims and Requests for
Adjustment or Relief (MAY 1994)
- --------------------------------------------------------------------------------
DFARS 252.235-7002 Animal Welfare (DEC 1991)
- --------------------------------------------------------------------------------
DFARS 252.242-7000 Post-Award Conference (DEC 1991)
- --------------------------------------------------------------------------------
DFARS 252.245-7001 Reports of Government Property (MAY 1994)
- --------------------------------------------------------------------------------
x DFARS 252.246-7000 Material Inspection and Receiving Report
(DEC 1991)
- --------------------------------------------------------------------------------
DFARS 252.251-7000 Ordering from Government Supply Sources
(MAY 1995)
================================================================================
(b) The following clause applies to contracts exceeding $100,000, and
modifications for new work exceeding $100,000 to contracts which do not already
contain the clause:
FAR 52.203-09 REQUIREMENT FOR CERTIFICATE OF PROCUREMENT INTEGRITY -
MODIFICATION (SEP 1995)
(a) Definitions. The definitions set forth in FAR 3.104-4 are hereby
-----------
incorporated in this clause.
CONTRACT NUMBER N00014-96-C-0279 Page 10
<PAGE>
(b) The Contractor agrees that it will execute the certification set
forth in paragraph (c) of this clause when requested by the Contracting Officer
in connection with the execution of any modification of this contract.
(c) Certification. As required in paragraph (b) of this clause, the
officer or employee responsible for the modification proposal shall execute the
following certification. The certification in paragraph (c)(2) of this clause is
not required for a modification which procures commercial items.
CERTIFICATE OF PROCUREMENT INTEGRITY - MODIFICATION
(SEP 1995)
(1) I, (Name of certifier) am the officer or employee
--------
responsible for the preparation of this modification proposal
and hereby certify that, to the best of my knowledge and
belief, with the exception of any information described in
this certification, I have no information concerning a
violation or possible violation of subsection 27(a), (b),
(d), or (f) of the Office of Federal Procurement Policy Act,
as amended* (41 U.S.C. 423), (hereinafter referred to as "the
Act"), as implemented in the FAR, occurring during the
conduct of this procurement (contract and modification
number).
(2) As required by subsection 27(e)(1)(B) of the Act, I further
certify that to the best of my knowledge and belief, each
officer, employee, agent, representative, and consultant of
---------------- (Name of Offeror) who has participated
personally and substantially in the preparation or submission
of this proposal has certified that he or she is familiar
with, and will comply with, the requirements of subsection
27(a) of the Act, as implemented in the FAR, and will report
immediately to me any information concerning a violation or
possible violation of subsections 27(a), (b), (d) or (f) of
the Act, as implemented in the FAR, pertaining to this
procurement.
(3) Violations or possible violations: (Continue on plain bond
paper if necessary and label Certificate of Procurement
Integrity - Modification (Continuation Sheet). (ENTER "NONE"
IF NONE EXISTS)
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
(Signature of the officer or employee responsible for the
modification proposal and date)
-------------------------------------------------------------
CONTRACT NUMBER N00014-96-C-0279 Page 11
<PAGE>
(Typed name of the officer or employee responsible for the
modification proposal)
----------------------------------------------------------------------
*Subsections 27(a),(b) and (d) are effective on December 1, 1990.
Subsection 27(f) is effective on June 1, 1991.
THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF AN
AGENCY OF THE UNITED STATES AND THE MAKING OF A FALSE, FICTITIOUS OR
FRAUDULENT CERTIFICATION MAY RENDER THE MAKER SUBJECT TO PROSECUTION
UNDER TITLE 18, UNITED STATES CODE, SECTION 1001.
(End of certification)
(d) In making the certification in paragraph (2) of the certificate, the
officer or employee of the competing Contractor responsible for the offer or
bid, may rely upon a one-time certification from each individual required to
submit a certification to the competing Contractor, supplemented by periodic
training. These certifications shall be obtained at the earliest possible date
after an individual required to certify begins employment or association with
the contractor. If a Contractor decides to rely on a certification executed
prior to the suspension of section 27 (i.e., prior to December 1, 1989) the
Contractor shall ensure that an individual who has so certified is notified that
section 27 has been reinstated. These certifications shall be maintained by the
Contractor for a period of 6 years from the date a certifying employee's
employment with the company ends or, for an agency, representative, or
consultant, 6 years from the date such individual ceases to act on behalf of the
Contractor.
(e) The certification required by paragraph (c) of this clause is a
material representation of fact upon which reliance will be placed in executing
this modification.
(c) This clause applies to all contracts exceeding $500,000.
DFARS 252.209-7004 REPORTING OF COMMERCIAL TRANSACTION WITH THE
GOVERNMENT OF A TERRORIST COUNTRY (SEP 1994)
(A) Definitions.
-----------
As used in this clause--
(1) "Government of a terrorist country" includes the state and the
government of a terrorist country, as well as any political subdivision, agency,
or instrumentality thereof.
(2) "Terrorist country" means a country determined by the Secretary
of State, under section 6(j)(1)(A) of the Export Administration Act of 1979 (50
U.S.C. App. 2405(j)(1)(A)), as of 60 days before the contract award date, to be
a country the government of which has
CONTRACT NUMBER N00014-96-C-0279 Page 12
<PAGE>
repeatedly provided support for acts of international terrorism. As of the date
of this provision, terrorist countries include: Cuba, Iran, Iraq, Libya, North
Korea, Sudan, and Syria.
(b) Reporting.
---------
(1) In accordance with Section 843 of the National Defense
Authorization Act for Fiscal Year 1994 (Public Law 103-160), if this contract
exceeds $5,000,000, the Contractor shall report each commercial transaction that
it conducts with the government of a terrorist country during the period of
performance of this contract (but not beyond September 30, 1996).
(2) This reporting requirement does not apply to --
(i) Transactions conducted by affiliates or subsidiaries of the
Contractor; or
(ii) Payment or receipt of payment of a judgement or award
ordered by a court or arbitral tribunal of competent jurisdiction.
(3) The Contractor shall submit reports in the following format:
Title of Report: Report of Commercial Transactions with the
Government of a Terrorist Country
Date of Report:
Contract Number:
Contractor's Name and Address:
Name and Telephone Number of Individual Submitting Report:
Commercial Transactions with the Government of a Terrorist
Country:
COUNTRY NATURE OF COMMERCIAL TRANSACTION
------- --------------------------------
- ------------------------ ----------------------------------------
- ------------------------ ----------------------------------------
(4) The Contractor shall submit reports annually by September 30, but
not beyond September 30, 1996. Each report shall include transactions conducted
during the preceding one-year period of contract performance.
(5) The Contractor shall submit reports to:
Deputy Director of Defense Procurement (Foreign Contracting)
PDUSD(A&T)DP(FC)
Washington, DC 20301-3060
CONTRACT NUMBER N00014-96-C-0279 Page 13
<PAGE>
(d) The following clause applies to contract actions exceeding $500,000, when
subcontracting possibilities exist. The clause is small business exempt.
DFARS 252.219-7005 INCENTIVE FOR SUBCONTRACTING WITH SMALL BUSINESSES,
SMALL DISADVANTAGED BUSINESSES, HISTORICALLY BLACK
COLLEGES AND UNIVERSITIES, AND MINORITY INSTITUTIONS
(NOV 1995)
(a) If the Contractor exceeds the small disadvantaged business,
historically black college and university, minority institution goal of its
subcontracting plan, at completion of contract performance, the Contractor will
receive ___ percent of the excess.
(b) The Contractor will not receive this incentive if the Contracting
Officer determines that exceeding the goal was not due to the Contractor's
efforts (e.g., a subcontractor cost overrun or award of subcontracts planned but
not disclosed in the subcontracting plan). Determinations made under this
paragraph are not subject to the Disputes clause.
(c) If this is a cost contract, the limitations in FAR Subpart 15.9 may
not be exceeded.
(d) This clause does not apply if the subcontracting plan is a plant,
division, or company-wide commercial items plan.
(e) ADDITIONAL FAR AND DFARS CLAUSES
This contract incorporates the following checked clauses by reference,
with the same force and effect as if they were given in full text. Upon request,
the Contracting Officer will make their full text available.
<TABLE>
<CAPTION>
<S> <C> <C>
- --------------------------------------------------------------------------------
FAR 52.204-02 Security Requirements (APR 1984) (As modified by
DoD Class Deviation 95-00004 dated 12 May
1995) (Applicable if contract will generate or
require access to classified information and DD
Form 254, Contract Security Classification
Specification, is issued to the contractor)
- --------------------------------------------------------------------------------
X FAR 52.209-06 Protecting the Government's Interest when
Subcontracting with Contractors Debarred,
Suspended, or Proposed for Debarment (JUL 1995)
(Applicable to contracts exceeding $25,000 in
value)
- --------------------------------------------------------------------------------
FAR 52.215-31 Waiver of Facilities Capital Cost of Money (SEP
1987) (Applicable if the Contractor did not propose
facilities capital cost of money in the offer)
- --------------------------------------------------------------------------------
FAR 52.217-09 Option to Extend the Term of the Contract (MAR 1989)
(In paragraph (a), insert " ", and in paragraph (c),
insert " "). (Applicable if contract contains line
item(s) for option(s)). (Compete the spaces in
parentheses).
- --------------------------------------------------------------------------------
</TABLE>
CONTRACT NUMBER N00014-96-C-O279 Page 14
<PAGE>
- --------------------------------------------------------------------------------
X FAR 52.219-06 Notice of Total Small Business Set-Aside (APR
1984), and Alternate I (OCT 1995) (Applicable to
total small business set-asides, including SBIR)
- --------------------------------------------------------------------------------
FAR 52.222-20 Walsh Healy Public Contracts Act (APR 1984) (As
modified by DoD Class Deviation 95-00009 dated
15 Dec 1995) (Applicable if the contract includes
deliverable materials, supplies, articles or
equipment in an amount that exceeds or may
exceed $10,000)
- --------------------------------------------------------------------------------
FAR 52.222-28 Equal Opportunity Preaward Clearance of
Subcontracts (APR 1984) (Applicable only when
contract action exceeds $1,000,000 or when any
modification increases contract amount to more
than $1,000,000)
- --------------------------------------------------------------------------------
FAR 52.226-01 Utilization of Indian Organizations and Indian-
Owned Economic Enterprises (AUG 1991)
(Applicable when FAR 52.219-09 Small Business
and Small Disadvantaged Business Subcontracting
Plan, applies)
- --------------------------------------------------------------------------------
FAR 52.227-10 Filing of Patent Applications - Classified Subject
Matter (APR 1984) (Applicable if contract is
subject to FAR clauses 52.204-02 and either FAR
52.227-11 or FAR 52.227-12)
- --------------------------------------------------------------------------------
X FAR 52.227-11 Patent Rights - Retention by the Contractor (Short
Form) (JUN 1989) (Applicable if contractor is a
small business or nonprofit organization)
- --------------------------------------------------------------------------------
OR
--
- --------------------------------------------------------------------------------
FAR 52.227-12 Patent Rights - Retention by the Contractor (Long
Form) (JUN 1989) (Applicable if contractor is a
large business)
- --------------------------------------------------------------------------------
X OFAR 52.230-02 Cost Accounting Standards (AUG 1992) Applicable
when contract amount is over $500,000, if
Contractor is subject to full CAS coverage, as set
forth in 48 CFR Chapter 99, Subpart 9903.201-2(a),
i.e., when the contractor receives a single
CAS-covered contract award of $10 million or
more; received $10 million or more in CAS-covered
contract awards during its preceding cost
accounting period; or received less than $10
million in CAS-covered contract awards during its
preceding cost accounting period, but such awards
were 10% or more of total sales.
- --------------------------------------------------------------------------------
CONTRACT NUMBER N00014-96-C-0279 Page 15
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<C> <C> <S>
OFAR 52.230-03 Disclosure and Consistency of Cost Accounting
Practices (NOV 1993) Applicable when contract
amount is over $500,000 but less than $10 million,
and the offeror certifies it is eligible for and
elects to use modified CAS coverage as set forth in
48 CFR Chapter 99, Subpart 9903.201-2(b).
- --------------------------------------------------------------------------------
X OFAR 52.230-05 Administration of Cost Accounting Standards (FEB
1995) (Applicable if contract is subject to either
clause at FAR 52.230-02 or the clause at FAR
52.230-03)
- --------------------------------------------------------------------------------
X FAR 52.232-20 Limitation of Cost (APR 1984) (Applicable only when
contract action is fully funded)
- --------------------------------------------------------------------------------
FAR 52.232-22 Limitation of Funds (APR 1984) (Applicable only
when contract action is incrementally funded)
- --------------------------------------------------------------------------------
FAR 52.245-5 Government Property (Cost-Reimbursement, Time-and-
Material, or Labor-Hour Contracts) ALT I (JUL 1985)
(Applicable if contractor is a nonprofit
organization whose primary purpose is the conduct
of scientific research)
- --------------------------------------------------------------------------------
X DFARS 252.203-7000 Statutory Prohibition on Compensation to Former
Department of Defense Employees (NOV 1995)
(Applicable when contract action exceeds $100,000
or when any modification increases contract amount
to more than $100,000)
- --------------------------------------------------------------------------------
DFARS 252.203-7002 Display of DoD Hotline Poster (DEC 1991)
(Applicable only when contract action exceeds $5
million or when any modification increases contract
amount to more than $5 million)
- --------------------------------------------------------------------------------
DFARS 252.204-7000 Disclosures of Information (DEC 1991) (Applies when
Contractor will have access to or generate
unclassified information that may be sensitive and
inappropriate for release to the public)
- --------------------------------------------------------------------------------
X DFARS 252.205-7000 Provision of Information to Cooperative Agreement
Holders (DEC 1991) (Applicable only when contract
action exceeds $500,000 or when any modification
increases total contract amount to more than
$500,000)
- --------------------------------------------------------------------------------
X DFARS 252.215-7002 Cost Estimating System Requirements (DEC 1991)
(Applicable only to contract actions awarded on the
basis of certified cost or pricing data)
- --------------------------------------------------------------------------------
</TABLE>
CONTRACT NUMBER N00014-96-C-0279 Page 16
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- --------------------------------------------------------------------------------------
DFARS 252.223-7004 Drug-Free Work force (SEP 1988) (Applicable (a) if
contract involves access to classified information;
or (b) when the Contracting Officer determines that
the clause is necessary for reasons of national
security or for the purpose of protecting the health
or safety of those using or affected by the product
of, or performance of the contract.
- --------------------------------------------------------------------------------------
DFARS 252.223-7006 Prohibition on Storage and Disposal of Toxic and
Hazardous Materials (APR 1993) (Applicable if
work requires, may require, or permits contractor
performance on a DoD installation)
- --------------------------------------------------------------------------------------
DFARS 252.225-7001 Buy American Act and Balance of Payments
Program (JAN 1994) (Applicable to actions over
$25,000 if the contract includes deliverable
supplies)
- --------------------------------------------------------------------------------------
DFARS 252.225-7002 Qualifying Country Sources as Subcontractors
(DEC 1991) (Applicable when clause at DFARS
252.225-7001 applies)
- --------------------------------------------------------------------------------------
DFARS 252.225-7008 Supplies to be Accorded Duty-Free Entry (DEC
1991) (Applicable when clause at DFARS
252.225-7009 applies)
- --------------------------------------------------------------------------------------
DFARS 252.225-7009 Duty Free Entry - Qualifying Country End Products
and Supplies (DEC 1991) (Applicable if contract
includes deliverable supplies)
- --------------------------------------------------------------------------------------
DFARS 252.225-7010 Duty Free Entry - Additional Provisions (DEC 1991)
(Applicable when clause at DFARS 252.225-7009
applies)
- --------------------------------------------------------------------------------------
X DFARS 252.225-7026 Reporting of Contract Performance Outside the
United States (NOV 1995) (Applicable only when
contract value exceeds $500,000 or when any
modification increases contract value to more than
$500,000)
- --------------------------------------------------------------------------------------
X DFARS 252.227-7034 Patents - Subcontracts (APR 1984) (Applicable
when clause at FAR 52.227-11 applies)
- --------------------------------------------------------------------------------------
X DFARS 252.227-7039 Patents - Reporting of Subject Inventions (APR
1990) (Applies when clause at FAR 52.227-11
applies)
- --------------------------------------------------------------------------------------
DFARS 252.242-7004 Material Management and Accounting System
(DEC 1991) (Applicable to contract actions
exceeding $25,000) (Not applicable to contracts
set aside for exclusive participation by small
business and small disadvantaged business
concerns)
- --------------------------------------------------------------------------------------
</TABLE>
CONTRACT NUMBER N00014-96-C-0279 PAGE 17
<PAGE>
- --------------------------------------------------------------------------------
DFARS 252.249-7001 Notification of Substantial Impact on Employment
(DEC 1991) (Applies to all prime contracts valued
at $5 million or more, and to all contracts with
subcontracts of $500,000 or more)
================================================================================
(f) The following clause is applicable to contract actions exceeding $25,000:
DFARS 252.247-7023 TRANSPORTATION OF SUPPLIES BY SEA (NOV 1995)
(a) As used in this clause:
(1) "Components" means articles, materials, and supplies incorporated
directly into end products at any level of manufacture, fabrication or assembly
by the Contractor or any subcontractor.
(2) "Department of Defense" (DoD) means the Army, Navy, Air Force,
Marine Corps, and Defense agencies.
(3) "Foreign flag vessel" means any vessel that is not a U.S.-flag
vessel.
(4) "Ocean transportation" means any transportation aboard a ship,
vessel, boat, barge, or ferry through international waters.
(5) "Subcontractor" means a supplier, materialman, distributor or
vendor at any level below the prime contractor whose contractual obligation to
perform results from, or is conditioned upon, award of the prime contract and
who is performing any part of the work or other requirement of the prime
contract. However, effective May 1, 1996, the term does not include a supplier,
materialman, distributor or vendor of commercial items or commercial components.
(6) "Supplies" means all property, except land and interests in land,
that is clearly identifiable for eventual use by or owned by the DoD at the time
of transportation by sea.
(i) An item is clearly identifiable for eventual use by the DoD
if, for example, the contract documentation contains a
reference to a DoD contract number or a military
destination.
(ii) "Supplies" includes (but is not limited to) public works,
buildings and facilities; ships; floating equipment and
vessels of every character, type and description, with
parts, subassemblies, accessories and equipment; machine
tools; material; equipment; stores of all kinds; end items;
construction materials; and components of the foregoing.
(7) "U.S.-flag vessel" means a vessel of the United States or
belonging to the United States, including any vessel registered or having
national status under the laws of the United States.
(b) The Contractor shall employ United States-flag vessels in the
transportation by sea of any supplies to be furnished in the performance of this
contract. The Contractor and its subcontractors may request that the Contracting
Officer authorize shipment in foreign-flag vessels, or designate U.S.-flag
vessels, if the Contractor or a subcontractor believes that --
(1) U.S.-flag vessels are not available for timely shipment;
(2) The freight charges are inordinately excessive or unreasonable;
or
CONTRACT NUMBER N00014-96-C-0279 Page 18
<PAGE>
(3) Freight charges are higher than charges to private persons for
transportation of like goods.
(c) The Contractor must submit any request for use of other than
U.S.-flag vessels in writing to the Contracting Officer at least 45 days prior
to the sailing date necessary to meet its delivery schedules. The Contracting
Officer will process requests submitted after such date(s) as expeditiously as
possible, but the Contracting Officer's failure to grant approvals to meet the
shipper's sailing date will not of itself constitute a compensable delay under
this or any other clause of this contract. Requests shall contain at a
minimum --
(1) Type, weight, and cube of cargo.
(2) Required shipping date.
(3) Special handling and discharge requirements.
(4) Loading and discharge points.
(5) Name of shipper and consignee.
(6) Prime contract number; and
(7) A documented description of efforts made to secure
U.S.-flag vessels, including points of contact (with names and telephone
numbers) of at least two (2) U.S.-flag carriers contacted. Copies of telephone
notes, telegraphic and facsimile messages or letters will be sufficient for this
purpose.
(d) The Contractor shall, within thirty (30) days after each shipment
covered by this clause, provide the Contracting Officer and the Division of
National Cargo, Office of Market Development, Maritime Administration, U.S.
Department of Transportation, Washington, DC 20590, one copy of the rated on
board vessel operating carrier's ocean-bill-of-lading, which shall contain the
following information:
(1) Prime contract number;
(2) Name of vessel;
(3) Vessel flag of registry;
(4) Date of loading;
(5) Port of loading;
(6) Port of final discharge;
(7) Description of commodity;
(8) Gross weight in pounds and cubic feet if available;
(9) Total ocean freight in U.S. dollars; and
(10) Name of the steamship company.
(e) The Contractor agrees to provide with its final invoice under this
contract a representation that to the best of its knowledge and belief:
(1) No ocean transportation was used in the performance of
this contract;
(2) Ocean transportation was used and only United States-flag
vessels were used for all ocean shipments under the contract.
(3) Ocean transportation was used, and the Contractor had the
written consent of the Contracting Officer for all non-U.S.-flag ocean
transportation; or
(4) Ocean transportation was used and some or all of the
shipments were made on non-U.S.-flag vessels without the written consent of the
Contracting Officer. The Contractor shall describe these shipments in the
following format:
CONTRACT NUMBER N00014-96-C-0279 Page 19
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ITEM CONTRACT
DESCRIPTION LINE ITEMS QUANTITY
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Total
- --------------------------------------------------------------------------------
</TABLE>
(f) If the final invoices does not include the required representation,
the Government will reject it and return it to the Contractor as an improper
invoice for the purposes of Prompt Payment clause of this contract. In the event
there has been unauthorized use of non-U.S.-flag vessels in the performance of
this contract, the Contracting Officer is entitled to equitably adjust the
contract, based on the unauthorized use.
(g) The Contractor shall include this clause, including this paragraph
(g), in all subcontracts under this contract, which exceed the simplified
acquisition threshold in Part 13 of the Federal Acquisition Regulations.
(g) --The following clause is applicable when the Contractor has made a
negative response to the inquiry in the representation at DFARS 252.247-7022.
DFARS 252.247-7024 NOTIFICATION OF TRANSPORTATION OF SUPPLIES BY SEA (NOV
1995)
(a) The Contractor has indicated by the response to the solicitation
provision, Representation of Extent of Transportation by Sea, that it did not
anticipate transporting by sea any supplies. If, however, after the award of
this contract, the Contractor learns that supplies, as defined in the
Transportation of Supplies by Sea clause of this contract, will be transported
by sea, the Contractor --
(1) Shall notify the Contracting Officer of that fact; and
(2) Hereby agrees to comply with all the terms and conditions of
the Transportation of Supplies by Sea clause of this contract.
(b) The Contractor shall include this clause, including this paragraph
(b), revised as necessary to reflect the relationship of the contracting
parties, in all subcontracts hereunder, except (effective May 1, 1996)
subcontracts for the acquisition of commercial items or components.
(h) The following clause applies to competitive contracts exceeding $100,000
(including all options) and competitive 8(a) contracts.
FAR 52.223-14 TOXIC CHEMICAL RELEASE REPORTING (OCT 1995)
(a) Unless otherwise exempt, the Contractor owned or operated facilities
used in the performance of this contract shall file by July 1 for the prior
calendar year an annual Toxic Chemical Release Inventory Form (Form R) as
described in sections 313 (a) and (g) of the Emergency Planning and Community
Right-to-Know Act of 1986 (EPCRA) (42 U.S.C. 11023 (a) and (g)), and section
6607 of the Pollution Prevention Act of 1990 (PPA) (42 U.S.C. 13106). Such
Contractor facilities shall file the annual Form R throughout the life of the
contract.
(b) A Contractor is exempt from the requirement to file an annual Form R
if none of the Contractor owned or operated facilities used in the performance
of this contract--
CONTRACT NUMBER N00014-96-C-0279 Page 20
<PAGE>
(1) Manufacture, process or otherwise use any toxic chemicals listed under
section 313(c) of EPCRA, 42 U.S.C. 11023(c);
(2) Have 10 or more full-time employees as specified in section
313(b)(1)(A) of EPCRA, 42 U.S.C. 11023(b)(1)(A);
(3) Meet the reporting thresholds of toxic chemicals established under
section (313)(f) of EPCRA, 42 U.S.C. 11023(f) (including the alternate
thresholds at 40 CFR 372.27, provided an appropriate certification form has been
filed with EPA); or
(4) Fall within Standard Industrial Classification Code (SIC) designations
20 through 39 as set forth in FAR 19.102.
(c) If the contractor has certified to be exempt in accordance with one or
more of the criteria in paragraph (b) of this clause, and after award of the
contract circumstances change so that any one of its owned or operated
facilities used in the performance of this contract is no longer exempt--
(1) The Contractor shall notify the Contracting officer; and
(2) The Contractor owned and operated facilities used in the performance
of this contract, unless otherwise exempt, shall (1) submit a Toxic Chemical
Release Inventory Form (Form R) on or before July 1 for the prior calendar year
during which the Contractor becomes eligible; and (ii) continue to file the
annual Form R for the life of the contract.
(d) The Contracting Officer may terminate this contract or take other
action as appropriate, if the Contractor fails to comply accurately and fully
with the EPCRA and PPA toxic chemical release filing and reporting requirements.
(e) Except for acquisitions of commercial items, as defined in FAR Part
12, the Contractor shall--
(1) For competitive subcontracts expected to exceed $100,000 (including
all options), include a solicitation provision substantially the same as the
provision at FAR 52.223-13, Certification of Toxic Chemical Release Reporting;
and
(2) Include in any resultant subcontract exceeding $100,000 (including all
options), with subcontractors having SIC designations of major groups 20 through
39 as set forth in FAR 19.102, the substance of this clause, except this
paragraph (e).
SECTION J - LIST OF ATTACHMENTS
1. EXHIBIT A, entitled "Contract Data Requirements list" (DD Form 1423) - 1
page with Enclosure Number 1, entitled "Contract Data Requirements List -
Instructions for Distribution."
2. Exhibit B, entitled, "Financial Accounting Data Sheet (Navy/non-Navy DoD
Activities)."
SECTION K - REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF OFFEROR
1. The Contractor's Representations and Certifications, dated 28 MAY 96, are
hereby incorporated into this contract by reference.
CONTRACT NUMBER N00014-96-C-0279 Page 21
<PAGE>
<TABLE>
<S> <C>
====================================================================================================================================
CONTRACT DATA REQUIREMENTS LIST Form Approval
OMB No. 0704-0188
- ------------------------------------------------------------------------------------------------------------------------------------
Public reporting burden for this collection of information is estimated to average 440 hours per response, including the time for
reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the
collection of information. Send comments regarding this burden estimate or any other aspect of this collection or information,
including suggestions for reducing this burden, to Washington Headquarters Services Directorate for information Operations and
Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the Office of Management and Budget Paperwork
Reduction Project (0704-0188), Washington, DC 20503.
- ------------------------------------------------------------------------------------------------------------------------------------
A. CONTRACT LINE ITEM NO. B. EXHIBIT C. CATEGORY
0002 A TOP X TM OTHER
- ------------------------------------------------------------------------------------------------------------------------------------
D. SYSTEM/ITEM E. CONTRACT/PR NO. F. CONTRACTOR
N00014-96-C-0279 IRVINE SENSORS INC
====================================================================================================================================
1. DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE
A001 PROGRESS REPORTS
- ------------------------------------------------------------------------------------------------------------------------------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE
SECTION H.1 OF SCHEDULE SEE SECTION F
- ------------------------------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
LT* REQUIRED AS REQUIRED ------------------------------------------
- ------------------- --------------------------------------------------- b. COPIES
8. APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT SUBMISSION ------------------
* ADDRESSEE Final
Draft ------------
REQ REPRO
- ------------------------------------------------------------------------------------------------------------------------------------
16. REMARKS See Enclosure Number 1
------------------------------------------
* As required by the Program Officer, these reports, submitted periodically for the
purpose of reporting progress, may be in the form of a letter report, or a technical ------------------------------------------
report.
------------------------------------------
15. TOTAL
====================================================================================================================================
1. DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE
A002 FINAL REPORT
- ------------------------------------------------------------------------------------------------------------------------------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE
SECTION H.1 OF THE SCHEDULE SEE SECTION F.2
- ------------------------------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
DD* REQUIRED ONR/R SEE SECTION F.1 ------------------------------------------
- ------------------- --------------------------------------------------- b. COPIES
8. APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT SUBMISSION ------------------
SEE SECTION F ADDRESSEE Final
Draft ------------
REQ REPRO
- ------------------------------------------------------------------------------------------------------------------------------------
16. REMARKS See Enclosure Number 1
------------------------------------------
* DD250 required only for acceptance by the Program Officer designated in Section F.
Information copies of this report shall be distributed in accordance with Enclosure ------------------------------------------
Number 1.
------------------------------------------
15. TOTAL
====================================================================================================================================
1. DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE
- ------------------------------------------------------------------------------------------------------------------------------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE
- ------------------------------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
REQUIRED ------------------------------------------
- ------------------- --------------------------------------------------- b. COPIES
8. APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT SUBMISSION ------------------
ADDRESSEE Final
Draft ------------
REQ REPRO
- ------------------------------------------------------------------------------------------------------------------------------------
16. REMARKS
------------------------------------------
------------------------------------------
------------------------------------------
15. TOTAL
====================================================================================================================================
1. DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE
- ------------------------------------------------------------------------------------------------------------------------------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE
- ------------------------------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
REQUIRED ------------------------------------------
- ------------------- --------------------------------------------------- b. COPIES
8. APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT SUBMISSION ------------------
ADDRESSEE Final
Draft ------------
REQ REPRO
- ------------------------------------------------------------------------------------------------------------------------------------
16. REMARKS
------------------------------------------
------------------------------------------
------------------------------------------
15. TOTAL
====================================================================================================================================
G. PREPARED BY H. DATE L. APPROVED BY J. DATE
Wade Wargo 24 JUN 96 Genesta Belton 24 JUN 96
====================================================================================================================================
DD Form 1423-2, JUN 90 Previous editions are obsolete Page _ of _ Pages
NAVOCNR OVERPRINT (1-91)
CONTRACT NUMBER: N00014-96-C-0279
</TABLE>
<PAGE>
ENCLOSURE NUMBER 1
CONTRACT DATA REQUIREMENTS LIST
INSTRUCTIONS FOR DISTRIBUTION
DISTRIBUTION OF TECHNICAL REPORTS AND FINAL REPORT
- --------------------------------------------------
The minimum distribution of technical reports and the final report submitted in
connection with this contract is as follows:
<TABLE>
<CAPTION>
=============================================================================================
NUMBER OF COPIES
--------------------------------------------
DODAAD UNCLASSIFIED/ UNCLASSIFIED/LIMITED AND
ADDRESSEE CODE UNLIMITED CLASSIFIED
=============================================================================================
<S> <C> <C> <C>
Program Officer N000149 1 1
- ---------------------------------------------------------------------------------------------
Administrative Contracting Officer* S0513A 1 1
- ---------------------------------------------------------------------------------------------
Director, Naval Research Laboratory N00173 1 1
ATTN: Code 2627
Washington, D.C. 20375
- ---------------------------------------------------------------------------------------------
Defense Technical Information Center S47031 2 2
8725 John J. Kingman Road
STE 0944
Ft. Belvoir, VA 22060-6218
=============================================================================================
</TABLE>
If the Program Officer directs, the Contractor shall make additional
distribution of technical reports in accordance with a supplemental distribution
list provided by the Program Officer.
Distribution of Reports which are NOT Technical Reports
The minimum distribution for reports which are not technical reports is as
follows:
<TABLE>
<CAPTION>
=============================================================================================
NUMBER OF COPIES
--------------------------------------------
DODAAD UNCLASSIFIED/ UNCLASSIFIED/LIMITED
ADDRESSEE CODE UNLIMITED AND CLASSIFIED
=============================================================================================
<S> <C> <C> <C>
Program Officer N00014 1 1
- ---------------------------------------------------------------------------------------------
Administrative Contracting Officer* S0513A 1 1
=============================================================================================
</TABLE>
*Send only a copy of the transmittal letter to the Administrative Contracting
Officer; do not send actual reports to the Administrative Contracting Officer.
CONTRACT NUMBER:N00014-96-C-0279
<PAGE>
FINANCIAL ACCOUNTING DATA SHEET - NAVY
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
1. CONTRACT NUMBER (CRITICAL) 2. SPIIN (CRITICAL 3. MOD 4. PR NUMBER PAGE 1 OF 1
N0001496C0279 96PR06041-00
- ----------------------------------------------------------------------------------------------------------------------------------
6. LINE OF ACCOUNTING 7. NAVY INTERNAL
-------------------------------------------------------------------------- AMOUNT USE ONLY
A. B. C. D. E. F. G. H. I. J. K. (CRITICAL) REF DOC/ACRN
CLIN/SLIN ACRN APPROPRIATION SUBHEAD OBJ PARM RFM SA AAA IT PAA COST CODE
(CRITICAL) (CRITICAL) (CRITICAL) CLA (CRITICAL) -----------------
PROJ PDLI
UNIT MCC & SUF
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C><C> <C> <C> <C> <C> <C> <C> <C>
AA 9760400 1304 000 RA 013 0 068342 2D 000000 R6S10 000 B558 749,671.00 PR#96PR06041-00
FRC:A002
- ------------------------------------------------------------------------------------------------------------------
PAGE TOTAL $749,671.00
GRAND TOTAL $749,671.00
- ------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
PREPARED/AUTHORIZED BY: COMPTROLLER APPROVAL:
CONTRACT REVIEWED FOR FISCAL DATA AND SIGNATURE
BY _________________________________ for COMPTROLLER, ONR
DATE: DATE:
- --------------------------------------------------------------------------------------------------------------------------------
FAD1
</TABLE>
<PAGE>
3. PHASE II WORK PLAN
3.1 Overview
It is an essential prerequisite of any project intending to use stacks of
VASP-256 chips that these stacks be available as proven, characterized and
documented systems components. There must also exist the infrastructure for the
production of these devices, including screening tests (for both stack
manufacture and post-packaging stages) and cost data, based on expected
production yields. Only then do MCM and systems designers have the data and
confidence needed to integrate these devices into their modules or systems. This
data would also provide the stepping-stone to the realization of more complex or
larger chip stacks. It is also necessary to prove the effectiveness of
fault-tolerance as applied to VASP chip stacks by demonstrating this in
practice.
In order to provide a rapid route to the exploitation of VASP chip stacks
in existing system products, we plan to pioneer the use of these components
using the existing ASPEX testbed (i.e., ASTRA; ASP Systems Testbed for Research
and Applications). Such operation of prototype VASP chip stacks in a testbed
system would prove the ability of these components to run ASP software, and
would enable them to be extensively evaluated (e.g., using application benchmark
code). In addition, systems design experience with VASP stacks would be valuable
in the design of these components into future ASP systems products (e.g.,
Modular-MPC systems).
It is proposed, in the second phase of this project, to make these steps
and to put into place VASP chip stacks as a fully engineered, available
technology, and to define routes for its application and exploitation in both
the near and medium term. A fundamental building-block, a prototype 5-VASP chip
fault-tolerant stack will be developed and evaluated, for potential exploitation
in existing system products, and as the basic building-block of future, more
aggressive and long-term architectural and packaging developments. Once proven,
these stacks would be integrated into a Multi-Chip Module.
Initially, an MCM to hold four such VASP chip would be developed. Once
proven, four of these populated substrates would be assembled on a carrier (Low
Density Interconnect) substrate, to form the full MCM structure. Once packaged,
these MCMs would subsequently be interfaced to an existing ASPEX testbed system
for exhaustive applications analysis and demonstration. Such MCMs could then be
immediately exploited in Modular-MPC products. This phase is take place over an
18 month project duration.
It is proposed to divide Phase II of the project between Irvine Sensors
Corporation and ASPEX Microsystems Ltd. as follows:
Irvine Sensors Corporation
Prototype VASP chip stack production, including the following
. Procure wafers of VASP-256 chips
. Procure suitable (PGA) packages for assembled stacks
Use or disclosure of the proposal data is subject to the restriction on the
cover page of this proposal.
9513II Page 13 ARPA TRP 93-006
<PAGE>
. Perform stack interconnect design
. Develop new high density I/O for 3D Silicon manufacturing
. Fabricate and package a minimum of 8 prototype VASP 5-chip stacks. A small
number of stack samples to deliberately include a faulty VASP chip, for
the purposes of demonstrating stack fault-tolerance.
. Perform initial screening tests on packaged prototypes
. Ship protypes to ASPEX Microsystems Ltd. for detailed evaluation.
. Design (supported by ASPEX Microsystems) the MCM structure. Procure MCM-D
substrates (manufactured by nCHIP) to carry four, 5-chip VASP stacks and
identify suitable packages. Ship packaged samples to ASPEX Microsystems Ltd.
for evaluation. Procure Low Density Interconnect substrates to carry four of
these MCM-D substrates and form the MCM structure. Arrange manufacture and
shipment of the modules in suitable packaged form to ASPEX Microsystems Ltd.
for evaluation.
ASPEX Microsystems Ltd.
- ------------------------------------------------------------------------------
NOTE: No research or development activity will be performed at ASPEX outside of
the United States. UK activities will be limited to integration and test
of Phase II hardware in existing commercial test beds and associated
documentation.
- ------------------------------------------------------------------------------
Stack design support and evaluation, stack based architecture and
applications analysis, as detailed below
. Analysis of medium to long term Modular-MPC systems options, based on VASP
chip stack technology. Carry out feasibility studies and conceptual designs,
evaluate cost-performance and identify suitable enabling (i.e., packaging)
technologies.
. Support the Irvine Sensors VASP chip stack design effort (e.g., schematics,
design reviews)
. Develop full characterization and production screening test sets for 5-VASP
chip stacks
. Develop ASIC tester fixturing hardware for 5-VASP chip stacks (for an
IMS XL-60 tester)
. Exhaustively test and fully characterize prototype chip stacks
. Produce full 5-VASP chip stack technical documentation and datasheet
. Support the design and procurement, by Irvine Sensors Corporation, of 5-VASP
chip stack based Multi-Chip Modules. Provide schematics and specifications,
design support and reviews.
Use or disclosure of the proposal data is subject to the restriction on the
cover page of this proposal.
951311 Page 14 ARPA TRP 93-006
<PAGE>
. Develop test cards for the integration of the 5-VASP chip stack based Multi-
Chip Modules into an existing ASPEX testbed. Establish roadmap for the
exploitation of 5-VASP chip stacks and MCMs in existing systems products.
. Develop applications demonstrations, and show MCMs based on 5-VASP chip
stacks running user code in system, including the use of on-line
fault-tolerance to configure faulty stacks/modules.
3.2 Phase II Schedule
[LINE GRAPH APPEARS HERE]
Figure 3-1 Phase II Program will Develop and Integrate VASP Stacks into an
Existing ASPEX MPC Test Bed
Use or disclosure of the proposal data is subject to the restriction on the
cover page of this proposal.
951311 Page 15 ARPA TRP 93-006
<PAGE>
<TABLE>
<S> <C>
67X
- -----------------------------------------------------------------------------------------------------------------------------------
AWARD/CONTRACT 1. PAGE 1 OF 21
- -----------------------------------------------------------------------------------------------------------------------------------
2. PROC INSTRUMENT ID NO. (PIN) 3. EFFECTIVE DATE 4. REQUISITION/PURCHASE REQUEST/PROJECT NO. 5. CERTIFIED FOR NATIONAL
DEFENSE
F33615-96-C-1932 96AUG12 GFY11759601296 UNDER BDC DO-A7
REG2/DMS REGI RATING
- -----------------------------------------------------------------------------------------------------------------------------------
6. ISSUED BY CODE 7. ADMINISTERED BY CODE
FA8650 SO513A
USAF/AFMC/ASC DCMC SABTA ANA
WRIGHT LABORATORY WL/AAKE BLDG 7 34 CIVIC CENTER PLAZA
2530 C ST P.O. BOX C-12700
WRIGHT-PATTERSON AFB OH 45433-7607 SANTA ANA CA 92712-2700
NEGOTIATOR: STEVEN L. WILLIS PAS: NONE
PHONE: (513) 255-5311
- -----------------------------------------------------------------------------------------------------------------------------------
8. CONTRACTOR CODE FACILITY 9. SUBMIT INVOICES (4 COPIES UNLESS OTHER-
NAME AND ADDRES 54266 CODE IF "9" FOR WISE SPECIFIED) TO ADDRESS SHOWN IN
MULTIPLE
IRVINE SENSORS CORPORATION FACILITIES 10. DISCOUNT FOR PROMPT PAYMENT
3001 REDHILL AVENUE SEE NET
COSTA MESA, CA 92626 SECT "G" 1 % DAYS DAYS
PHONE: (714) 549-8211 ST
COUNTY: ORANGE
2 % DAYS IF "9"
ND SEE
SECT "b"
3 % DAYS
RD
- -----------------------------------------------------------------------------------------------------------------------------------
11. AUTHORIZED 12. CONTRACT PERCENTAGE FEE 13. PAYMENT WILL BE MADE BY CODE
A. PROGRESS PAY B. RECOUP DFAS CO SANTA ANA SC1006 IF "9" FOR
% % % P O BOX 182381 MULTIPLE
- --------------------------------------------------------------------- COLUMBUS OH 43218-2381 DISBURSING
14. PURCHASE OFFICE POINT OF CONTACT 15. SVC/AGENCY USE OFFICES. SEE
LSW/L55/LSW SECT "G"
- ---------------------------------------------------------------------
16. TYPE CONTRACTOR 17. SEURITY
A. CLAS B. DATE OF DD 254
B U
- -----------------------------------------------------------------------------------------------------------------------------------
18. CONTRACT ADMINISTRATION DATA 19. (RESERVED) 19. (RESERVED) 20. DATE SIGNED 21. SURV 22. TOTAL AMOUNT
CRIT
A. FAST B. CONTRACT C. ABSTRACT RECP D. SPL CONT E. CONT ADMIN
PAY (1) KIND (2) TYPE ADP POINT PROVISIONS FUNCT. LIMIT
2 U C $ 737,370.00
- -----------------------------------------------------------------------------------------------------------------------------------
23. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPLETION
- -----------------------------------------------------------------------------------------------------------------------------------
24. TABLE OF CONTENTS (The following sections marked "X" are contained in the contract)
- -----------------------------------------------------------------------------------------------------------------------------------
(X) SEC DESCRIPTION PAGE(S) (X) SEC DESCRIPTION PAGE(S)
- -----------------------------------------------------------------------------------------------------------------------------------
PART I - THE SCHEDULE PART II - CONTRACT CLAUSES
- -----------------------------------------------------------------------------------------------------------------------------------
X A SOLICITATION/CONTRACT FORM 1 X I CONTRACT CLAUSES 11
- -----------------------------------------------------------------------------------------------------------------------------------
X B SUPPLIES OR SERVICES AND PRICES/COSTS 2 PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH
- -----------------------------------------------------------------------------------------------------------------------------------
X C DESCRIPTION/SPECS/WORK STATEMENT 4 X J LIST OF ATTACHMENTS 21
- -----------------------------------------------------------------------------------------------------------------------------------
X D PACKAGING AND MARKING 4 PART IV - REPRESENTATIONS AND INSTRUCTIONS
- -----------------------------------------------------------------------------------------------------------------------------------
X E INSPECTION AND ACCEPTANCE 4 REPRESENTATIONS, CERTIFICATIONS AND
- --------------------------------------------------------------------
X F DELIVERIES OR PERFORMANCE 4 K OTHER STATEMENTS OF OFFER
- -----------------------------------------------------------------------------------------------------------------------------------
X G CONTRACT ADMINISTRATION DATA 7 L INSTRS., CONDS., AND NOTICES FOR AWARD
- -----------------------------------------------------------------------------------------------------------------------------------
X H SPECIAL CONTRACT REQUIREMENTS 9 M EVALUATION FACTORS FOR AWARD
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
25. / X / Contractor's Negotiated Agreement (Contractor is 29. /__/ Award (Contractor is not required to sign this document.)
required to sign this document and return 1 copies to Your offer on Solicitation Number
--- ___________________________________________________________,
Issuing office.) Contractor agrees to furnish and deliver including the additions or changes made by you which additions
all items or perform all the services set forth or otherwise or changes are set forth in full above, is hereby accepted
identified herein for the consideration stated herein. The as to the items listed herein. This award consummates the
rights and obligations of the parties to this contract shall contract which consists of the following documents (a) the
be subject to and governed by the following documents: (a) Government's solicitation and your offer, and (b) this award/
this award/contract, (b) the solicitation, if any (c) such contract. No further contractual document is necessary.
provisions, representations, certifications, and
specifications, as are attached or incorporated by reference
herein. (Attachments are listed herein.) ----------------------------------------------------------------------
26. CONTRACTOR 30. NAME OF CONTRACTING OFFICER (TYPE OR PRINT)
BY ____________________________________________________ BY ___________________________________________________________
(SIGNATURE OF PERSON AUTHORIZED TO SIGN) (SIGNATURE OF PERSON AUTHORIZED TO SIGN)
- -----------------------------------------------------------------------------------------------------------------------------------
27. NAME AND TITLE OF SIGNER (TYPE OR PRINT) 28. DATE SIGNED 31. NAME ON CONTRACTING OFFICER (TYPE OR PRINT) 32. DATE SIGNED
YYMMDD MICHELE L. DICKMAN YYMMDD
- -----------------------------------------------------------------------------------------------------------------------------------
AFMC FORM 701, JUL 92
</TABLE>
<PAGE>
F33615-96-c-1932 Page 2
- --------------------------------------------------------------------------------
SECTION B SUPPLIES/SERVICES FULL TEXT CLAUSES
- --------------------------------------------------------------------------------
1. 5352.216-9001 PAYMENT OF FEE (NOV 1995)
The estimated cost and fee for this contract are shown below. The
applicable fixed fee set forth below may be increased or decreased only by
negotiation and modification of the contract for added or deleted work. As
determined by the contracting officer, it shall be paid as it accrues, in
regular installments based upon the percentage of completion of work.
Estimated Cost: $689,131.00
Fixed Fee: $ 48,239.00
2. 5352.232-9000 IMPLEMENTATION OF LIMITATION OF FUNDS (DEC 1995)
As contemplated by the clause of the Contract Clauses entitled "Limitation
of Funds," the amount allotted to this contract is $300,000.00 covering all
contract line items for the period ending 96DEC31.
- --------------------------------------------------------------------------------
SECTION B SUPPLIES OR SERVICES AND PRICE/COST
- --------------------------------------------------------------------------------
Item No Quantity Pur Unit Unit Price Total Price
- ------- -------- -------- -------------- ---------------
0001 1 LO $ 737,370.00 $ 737,370.00
Noun: RESEARCH AND DATA
ACRN: 9 Sec Clas:U NSN:U
Site Codes PQA: D ACP: D FOB: D
PR No: GWLAAAF9601296 Proj Mgr: GFY1175
Descriptive Data
- ----------------
Conduct Research entitled `The Development of an Eye-Safe Radar Imaging System'
in accordance with Section C, Description/Specifications dated 96JUL30. Deliver
data in accordance with Exhibit A, Contract Data Requirements List, DD Form
1423, dated 96FEB22.
Payment instructions for the subline items shown below are contained in Section
G, Paragraph 1.
<PAGE>
Item No Quantity Pur Unit Unit Price Total Price
- ------- -------- -------- --------------- ---------------
000101 $ N $ N
Noun: AA FUNDING $300,000.00
ACRN: AA Sec Clas: NSN:
Site Codes PQA: ACP: FOB:
PR No: GWLAAAF9601296 Proj Mgr:
Descriptive Data
- ----------------
Item No Quantity Pur Unit Unit Price Total Price
- ------- -------- -------- --------------- ----------------
0002 1 EA $ NSP $ NSP
Noun: HARDWARE
ACRN: U SEC CLAS: U NSN: N
Site Codes PQA: D ACP: D FOB: D
PR No: GWLAAAF9601296 Proj Mgr: GFY1175
Descriptive Data
- ----------------
Deliver hardware in accordance with Section C, Descriptions/Specifications
dated 96JUL30.
<PAGE>
- --------------------------------------------------------------------------------
PART I
SECTION C DESCRIPTION/SPECIFICATION
- --------------------------------------------------------------------------------
1. DESCRIPTION/SPECIFICATIONS ARE ATTACHED
The description/specifications entitled "IMAGE RESOLUTION ENHANCEMENT USING
MICROSCAN AND SCENE BASED PIXEL STEERING (IR EMSPS)" dated 96JUL30, is
incorporated as Attachment l.
2. 5352.215-9300 INCORPORATION OF REFERENCE DOCUMENTS (APR 1984)
All specifications, exhibits, drawings or other documents which are referred
to in this contract, whether or not attached, are incorporated herein by
reference.
3. 5352.225-9006 ENGLISH LANGUAGE REQUIREMENT (JUL 1995)
a. All deliverable documents will be in the English Language.
b. An English language speaking person shall be provided during in-plant
visits, inspections, reviews, audits, and other similar activities to facilitate
communications and ensure mutual understanding.
- --------------------------------------------------------------------------------
SECTION D PACKAGING AND MARKING
- --------------------------------------------------------------------------------
1. 5352.247-9008 CONTRACTOR COMMERCIAL PACKAGING AND MARKING (FEB 1996)
Items shall be packaged and marked in accordance with the contractor's best
commercial practice to ensure undamaged arrival at destination. Individual
shipments exceeding 150 pounds or 108 inches in length or 130 inches in girth
plus length, shall be packaged on skidded crates or palletized to allow handling
by forklift.
- -------------------------------------------------------------------------------
SECTION E INSPECTION AND ACCEPTANCE
- -------------------------------------------------------------------------------
1. NOTICE: The following solicitation provisions and/or contract clauses
pertinent to this section are hereby incorporated by reference:
I. FEDERAL ACQUISITION REGULATION CONTRACT CLAUSES
PARAGRAPH CLAUSE TITLE & DATE
- --------- -------------------
52.246-8 INSPECTION OF RESEARCH AND DEVELOPMENT - COST-REIMBURSEMENTS
(APR 1984)
II. DOD FAR SUPPLEMENT CONTRACT CLAUSES
PARAGRAPH CLAUSE TITLE & DATE
- --------- -------------------
252.246-7000 MATERIAL INSPECTION AND RECEIVING REPORT (DEC 1991)
<PAGE>
2. 5352.246-9002 INSPECTION AND ACCEPTANCE (NOV 1995)
a. Except as provided below, final inspection and acceptance by the
government of the Items set forth herein shall be at Destination.
b. Inspection and acceptance of all data shall be in accordance with the
Contract Data Requirements list (CDRLs) attached hereto. In those instances
where the symbol "LT" appears in the block that would otherwise designate the
point for final inspection and acceptance, the place for such final inspection
and acceptance shall be the office designated as the "Technical Office."
c. Services shall be finally inspected and accepted by the government at the
place(s) of performance.
- --------------------------------------------------------------------------------
SECTION F DELIVERIES OR PERFORMANCE
- --------------------------------------------------------------------------------
1. NOTICE: The following solicitation provisions and/or contract clauses
pertinent to this section are hereby incorporated by reference:
I. FEDERAL ACQUISITION REGULATION CONTRACT CLAUSES
PARAGRAPH CLAUSE TITLE & DATE
- --------- -------------------
52.242-15 STOP-WORK ORDER (AUG 1989)- ALTERNATE I (APR 1984)
52.247-34 F.O.B. DESTINATION (NOV 1991)
2. CONTRACT DELIVERIES
The terms "MAC" and "MARO", as used within this contract in conjunction with
contract delivery requirements (including data deliveries), are hereby defined
to mean "months after the effective date for award of the contractual action (as
shown in block 3, Section A, AFMC Form 701)".
F33615-96-C-1932 Page 5 Section F
<PAGE>
F33615-96-C-1932 Page 6
- --------------------------------------------------------------------------------
SECTION F SUPPLIES SCHEDULE DATA
- --------------------------------------------------------------------------------
CLIN ACRN Sec Clas Ship To Mark For
- ----- ----- -------- ------- --------
0001 9 U U
Delivery Date Quantity
------------- ---------
A. 20MARO 1
B.
C.
D.
E.
Descriptive Data
- ----------------
The scheduled delivery date for the approved final technical report is 20 months
after mailing date. All data shall be delivered in accordance with Exhibit A,
Contract Data Requirements List, DD Form 1423, dated 96APR26. The technical
effort must be completed no later than 17 months after mailing date. See Section
H for the mailing address.
CLIN ACRN Sec Clas Ship To Mark For
- ----- ---- -------- ------- --------
0002 U U FY1456
Delivery Date Quantity
------------- --------
A. 17MARO 1
B.
C.
D.
E.
Descriptive Data
- ----------------
The scheduled delivery date for hardware is 17 months after mailing date. See
Section H for the shipment address.
<PAGE>
- --------------------------------------------------------------------------
SECTION G CONTRACT ADMINISTRATION DATA
- --------------------------------------------------------------------------
1. PAYMENT INSTRUCTIONS FOR MULTIPLE ACCOUNTING CLASSIFICATION CITATIONS
Payment for all effort under this contract should be made in the order and
amounts shown in the informational subclin(s) in Section B, CLIN 0001 of the
contract and recaped below. Exhaust the funds in each ACRN before using funds
from the next listed ACRN.
ACRN SUBCLIN NO. TOTAL OBLIGATED
---- ----------- ---------------
AA 000101 $300,000.00
2. PROJECT ENGINEER
Anthony E. Absi
WL/AAJT
(513)255-9614
3. SOLICITATION NUMBER
SBIR 95.1
4. TAXPAYER IDENTIFICATION NUMBER (TIN)
33-0280334
5. INVOICE AND PAYMENT - COST REIMBURSEMENT (JUN 1996)
Invoices (or public vouchers), supported by a statement of cost for
performance under this contract, shall be submitted to the cognizant Defense
Contract Audit Agency (DCAA) office pursuant to FAR 52.216-7, Allowable Cost and
Payment clause. Under the provisions of DFARS 242.803(b), the DCAA auditor, is
designated as the authorized representative of the contracting officer (CO) for
examining vouchers received directly from the contractor.
F33615-96-C-1932 Page 7 Section G
<PAGE>
F33615-96-C-1932 Page 8
- --------------------------------------------------------------------------------
SECTION G ACCOUNTING CLASSIFICATION DATA
- --------------------------------------------------------------------------------
Appropriation/Lmt Subhead/CPN Recip DODAAD Obligation
ACRN Clas Supplemental Accounting Classification Amount
- ---- ---- ------------------------------------------ ----------
AA ACCOUNT
UNCLAS 5763600 F03000 $ 300,000.00
296 47WL 663005 656010 00500 65502F 503000
pr/mipr data:
GWLAAAF9601296
Descriptive Data
- ----------------
JON:300511F2
CCC:656010
Complete
<PAGE>
- --------------------------------------------------------------------------------
SECTION H SPECIAL CONTRACT REQUIREMENTS
- --------------------------------------------------------------------------------
1. 5352.204-9302 DISCLOSURE OF INFORMATION (JAN 1995)
a. In order to comply with Section I, DFARS 252.204-7000 Disclosure of
Information, the following copies of the information to be released are required
at least 45 days prior to release.
3 copies to: Office of Public Affairs, ASC/PA
1865 Fourth St Ste 15
Wright Patterson AFB OH 45433-7129
1 copy to: Contracting Officer
1 copy to: Project Engineer
(ASC/WL/PK 94-01)
2. TYPE CONTRACT
This is a Cost Plus Fixed Fee (Completion) type contract.
3. DELIVERY OF REPORTS
All reports and correspondence submitted under this contract shall include
the contract number and project number and be forwarded prepaid. A copy of the
letters of transmittal, unless otherwise required by the Contract Data
Requirements List, shall be delivered to the issuing office (CO) and the
Administrative Office (ACO). The addresses are set forth on the Cover Page,
blocks 6 and 7, respectively. The addresses for other recipients are as follows:
ATTN: ANTHONY ABSI A001 through A010
WL/AAJT BLDG 622
3109 P STREET
WRIGHT-PATTERSON AFB OH 45433-7321
WL/AAF A002 through A004
2185 AVIONICS CIRCLE
WRIGHT-PATTERSON AFB OH 45433-7301
WL/XPT A006
2130 EIGHT ST. STE 1
WRIGHT-PATTERSON AFB OH 45433-7562
4. SHIPMENT ADDRESS
Any non-mailable items should be delivered to:
FY1456
F33615-96-C-1932 Page 9 Section H
<PAGE>
WL/DOMH
Bldg 93, Area B, 2635 G Street
Contract Number F33615-96-C-1932
Wright-Patterson AFB OH 45433-7603
M/F: WL/AAJT ATTN:Anthony E. Absi, (513)255-9614
Mailable items should be sent to the AF Project Engineer at the address shown
in section H.
5. INCORPORATION OF SECTION K BY REFERENCE
Pursuant to Federal Acquisition Regulation (FAR) 15.406-1(b), Section K of
the solicitation is hereby incorporated herein by reference.
6. 5352.204-9305 TELEPHONE COMSEC MONITORING (FEB 1988)
All communications with Department of Defense (DOD) organizations are subject
to communications security (COMSEC) review. Contractor personnel will be aware
that telecommunications networks are continually subject to intercept by
unfriendly intelligence organizations. The DOD has authorized the military
departments to conduct COMSEC monitoring and recording of telephone calls
originating from, or terminating at, DOD organizations. Therefore, civilian
contractor personnel are advised that any time they place a call to, or receive
a call from, a USAF organization, they are subject to COMSEC procedures. The
contractor will assume the responsibility for ensuring wide and frequent
dissemination of the above information to all employees dealing with official
DOD information.
F33615-96-C-1932 Page 10 Section H
<PAGE>
- --------------------------------------------------------------------------------
PART II
SECTION I CONTRACT CLAUSES
- --------------------------------------------------------------------------------
1. NOTICE: The following solicitation provisions and/or contract clauses
pertinent to this section are hereby incorporated by reference:
I. FEDERAL ACQUISITION REGULATION CONTRACT CLAUSES
PARAGRAPH CLAUSE TITLE & DATE
- --------- -------------------
52.202-1 DEFINITIONS (OCT 1995)
52.203-3 GRATUITIES (APR 1984)
52.203-5 COVENANT AGAINST CONTINGENT FEES (APR 1984)
52.203-7 ANTI-KICKBACK PROCEDURES (JUL 1995)
52.203-10 PRICE OR FEE ADJUSTMENT FOR ILLEGAL OR IMPROPER ACTIVITY (SEP 1990)
52.203-12 LIMITATION ON PAYMENTS TO INFLUENCE CERTAIN FEDERAL TRANSACTIONS
(JAN 1990)
52.204-4 PRINTING/COPYING DOUBLE-SIDED ON RECYCLED PAPER (MAY 1995)
52.209-6 PROTECTING THE GOVERNMENT'S INTEREST WHEN SUBCONTRACTING WITH
CONTRACTORS DEBARRED, SUSPENDED, OR PROPOSED FOR DEBARMENT (JUL
1995)
52.211-5 NEW MATERIAL (MAY 1995)
52.211-7 OTHER THAN NEW MATERIAL, RESIDUAL INVENTORY AND FORMER GOVERNMENT
SURPLUS PROPERTY (MAY 1995)
52.211-15 DEFENSE PRIORITY AND ALLOCATION REQUIREMENTS (SEP 1990)
52.215-2 AUDIT - NEGOTIATIONS (OCT 1995)
52.215-22 PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA (OCT 1995)
52.215-24 SUBCONTRACTOR COST OR PRICING DATA (OCT 1995)
52.215-27 TERMINATION OF DEFINED BENEFIT PENSION PLANS (MAR 1996)
52.215-33 ORDER OF PRECEDENCE (JAN 1986)
52.215-39 REVERSIONS OR ADJUSTMENT OF PLANS FOR POST RETIREMENT BENEFITS
OTHER THAN PENSIONS (PRB) (MAR 1996)
52.215-40 NOTIFICATION OF OWNERSHIP CHANGES (FEB 1995)
52.223-14 TOXIC CHEMICAL RELEASE REPORTING (OCT 1995)
52.219-6 NOTICE OF TOTAL SMALL BUSINESS SET-ASIDE (APR 1984)
52.219-8 UTILIZATION OF SMALL, SMALL DISADVANTAGED AND WOMEN-OWNED BUSINESS
CONCERNS (OCT 1995)
52.219-14 LIMITATIONS ON SUBCONTRACTING (JAN 1991)
52.222-2 PAYMENT FOR OVERTIME PREMIUM (JUL 1990)
Para (a), "0" is inserted. The inserted figure does not apply to
the exceptions in subparagraph (a)(1) through (a)(4) of the clause.
52.222-20 WALSH-HEALEY PUBLIC CONTRACTS ACT (APR 1984)
52.222-26 EQUAL OPPORTUNITY (APR 1984)
52.222-35 AFFIRMATIVE ACTION FOR SPECIAL DISABLED AND VIETNAM ERA VETERANS
(APR 1984)
52.222-36 AFFIRMATIVE ACTION FOR HANDICAPPED WORKERS (APR 1984)
52.222-37 EMPLOYMENT REPORTS ON SPECIAL DISABLED VETERANS AND VETERANS OF THE
VIETNAM ERA (JAN 1988)
F33615-96-C-1932 Page 11 Section I
<PAGE>
52.223-2 CLEAN AIR AND WATER (APR 1984)
52.223-6 DRUG-FREE WORKPLACE (JUL 1990)
52.223-11 OZONE-DEPLETING SUBSTANCES (MAY 1995)
52.225-11 RESTRICTIONS ON CERTAIN FOREIGN PURCHASES (MAY 1992)
52.227-1 AUTHORIZATION AND CONSENT(JUL 1995) - ALTERNATE I (APR 1984)
52.227-2 NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT INFRINGEMENT
(APR 1984)
52.227-11 PATENT RIGHTS - RETENTION BY THE CONTRACTOR (SHORT FORM) (JUN 1989)
The contractor shall forward the invention reports called for by
the Patents Rights clause through the Administrative Contracting
Office addressed to the Staff Judge Advocate (Patent Counsel), AFMC
LO/JAZI, Bldg 11, Area B, 2240 B Street, Suite 5, WPAFB, OH 45433-
7109.
52.228-7 INSURANCE - LIABILITY THIRD PERSONS (MAR 1996)
52.232-9 LIMITATION ON WITHHOLDING OF PAYMENTS (APR 1984)
52.232-17 INTEREST (JAN 1991)
52.232-22 LIMITATION OF FUNDS (APR 1984)
52.232-23 ASSIGNMENT OF CLAIMS (JAN 1986)
52.232-25 PROMPT PAYMENT (MAR 1994)
52.233-1 DISPUTES (OCT 1995)
52.233-3 PROTEST AFTER AWARD (OCT 1995) - ALTERNATE I (JUN 1985)
52.242-1 NOTICE OF INTENT TO DISALLOW COSTS (APR 1984)
52.242-3 PENALTIES FOR UNALLOWABLE COSTS (OCT 1995)
52.242-4 CERTIFICATION OF INDIRECT COST (OCT 1995)
52.242-13 BANKRUPTCY (JUL 1995)
52.243-2 CHANGES - COST - REIMBURSEMENT (AUG 1987) - ALTERNATE V (APR 1984)
52.244-2 SUBCONTRACTS (COST-REIMBURSEMENT AND LETTER CONTRACTS) (MAR 1996)-
ALTERNATE I (JUL 1995)
52.244-5 COMPETITION IN SUBCONTRACTING (JAN 1996)
52.246-23 LIMITATION OF LIABILITY (APR 1984)
52.247-1 COMMERCIAL BILL OF LADING NOTATIONS (APR 1984)
52.249-6 TERMINATION (COST-REIMBURSEMENT) (APR 1986)
52.249-14 EXCUSABLE DELAYS (APR 1984)
52.253-1 COMPUTER GENERATED FORMS (JAN 1991)
II. DEFENSE FAR SUPPLEMENT CONTRACT CLAUSES (1991 DFARS)
PARAGRAPH CLAUSE TITLE & DATE
- --------- -------------------
252.203-7000 STATUTORY PROHIBITION ON COMPENSATION TO FORMER DEPARTMENT OF
DEFENSE EMPLOYEES (NOV 1995)
252.203-7001 SPECIAL PROHIBITION ON EMPLOYMENT (NOV 1995)
252.203-7003 PROHIBITION AGAINST RETALIATORY PERSONNEL ACTIONS (APR 1992)
252.204-7000 DISCLOSURE OF INFORMATION (DEC 1991)
252.204-7003 CONTROL OF GOVERNMENT PERSONNEL WORK PRODUCT (APR 1992)
252.205-7000 PROVISION OF INFORMATION TO COOPERATIVE AGREEMENT HOLDERS (DEC
1991)
252.209-7000 ACQUISITION FROM SUBCONTRACTORS SUBJECT T NO-SITE INSPECTIONS UNDER
THE INTERMEDIATE-RANGE NUCLEAR FORCES (INF) TREATY (NOV 1995)
252.215-7000 PRICING ADJUSTMENTS (DEC 1991)
252.215-7002 COST ESTIMATING SYSTEM REQUIREMENTS (DEC 1991)
252.223-7001 HAZARD WARNING LABELS (DEC 1991)
F33615-96-C-1932 Page 12 Section I
<PAGE>
252.225-7009 DUTY-FREE ENTRY--QUALIFYING COUNTRY END PRODUCTS AND SUPPLIES
(DEC 1991)
252.225-7012 PREFERENCE FOR CERTAIN DOMESTIC COMMODITIES (NOV 1995)
252.225-7014 PREFERENCE FOR DOMESTIC SPECIALTY METALS (NOV 1995) - ALTERNATE I
(DEC 1991)
252.225-7016 RESTRICTIONS ON THE ACQUISITION OF ANTIFRICTION BEARINGS (NOV 1995)
252.225-7017 PREFERENCE FOR UNITED STATES AND CANADIAN VALVES AND MACHINE TOOLS
(APR 1995)
252.225-7025 FOREIGN SOURCE RESTRICTIONS (APR 1993)
252.225-7026 REPORTING OF CONTRACT PERFORMANCE OUTSIDE THE UNITED STATES (NOV
1995)
252.225-7030 RESTRICTION ON ACQUISITION OF CARBON, ALLOY AND ARMOR AND ARMOR
STEEL PLATE (OCT 1992)
252.227-7016 RIGHTS IN BID OR PROPOSAL INFORMATION (JUN 1995)
252.227-7018 RIGHTS IN NONCOMMERCIAL TECHNICAL DATA AND COMPUTER SOFTWARE--SMALL
BUSINESS INNOVATION RESEARCH (SBIR) PROGRAM (JUN 1995)
252.227-7019 VALIDATION OF ASSERTED RESTRICTIONS--COMPUTER SOFTWARE (JUN 1995)
252.227-7030 TECHNICAL DATA--WITHOLDING OF PAYMENT (OCT 1988)
252.227-7034 PATENTS - SUBCONTRACTS (APR 1984)
252.227-7036 CERTIFICATION OF TECHNICAL DATA CONFORMITY (MAY 1987)
The term "delivered" means accompanied by a DD Form 250, material
Inspection and Receiving Report.
252.227-7037 VALIDATION OF RESTRICTIVE MARKINGS ON TECHNICAL DATA (NOV 1995)
252.227-7039 PATENT RIGHTS--REPORTING OF SUBJECT INVENTIONS (APR 1990)
252.231-7000 SUPPLEMENT COST PRINCIPALS (DEC 1991)
252.232-7006 REDUCTION OR SUSPENSION OF CONTRACT PAYMENTS UPON FINDING OF FRAUD
(AUG 1992)
252.233-7000 CERTIFICATION OF CLAIMS AND REQUESTS FOR ADJUSTMENT OR RELIEF
(MAY 1994)
252.235-7010 ACKNOWLEDGEMENT OF SUPPORT AND DISCLAIMER (MAY 1995)
252.235-7011 FINAL SCIENTIFIC OR TECHNICAL REPORT (MAY 1995)
252.242-7002 SUBMISSION OF COMMERCIAL FREIGHT BILLS FOR AUDIT (DEC 1991)
252.245-7001 REPORTS OF GOVERNMENT PROPERTY (MAY 1994)
2. 252.252-2 CLAUSES INCORPORATED BY REFERENCE (JUN 1988)
This contract incorporates one or more clauses by reference, with the same
force and effect as if they were given in full text. Upon request, the
Contracting Officer will make their full text available.
3. 5352.235-9000 SCIENTIFIC/TECHNICAL INFORMATION (STINFO)(JAN 1992)
If not already registered, the Contractor shall register for Defense Technical
Information Center (DTIC) service by contracting the following:
Defense Technical Information Center
8725 John J. Kingman Road
Suite 0944
Ft Belvoir, VA 22060-6218
(703)767-8273
Fax: (703)767-8228
To avoid duplication of effort and conserve scientific and technical resources
the Contractor shall search existing sources in DTIC to determine the current
state-of-the-art concepts, studies, etc.
F33615-96-C-1932 Page 13 Section I
<PAGE>
4. 252.247-7023 TRANSPORTATION OF SUPPLIES BY SEA (NOV 1995)
a. Definitions. As used in this clause--
(1) "Components" means articles, materials, and supplies incorporated
directly into end products at any level of manufacture, fabrication or assembly
by the Contractor or any subcontractor.
(2) "Department of Defense" (DoD) means the Army, Navy, Air Force, Marine
Corps and defense agencies.
(3) "Foreign flag vessel" means any vessel that is not a U.S.-flag vessel.
(4) "Ocean transportation" means any transportation aboard a ship, vessel,
boat, barge, or ferry through international waters.
(5) "Subcontractor" means a supplier, materialman, distributor or vendor
at any level below the prime contractor whose contractual obligation to perform
results from, or is conditioned upon, award of the prime contract and who is
performing any part of the work or other requirement of the prime contract.
However, effective May 1, 1996, the term does not include a supplier,
materialman, distributor, or vendor of commercial items or commercial
components.
(6) "Supplies" means all property, except land and interests in land, that
is clearly identifiable for eventual use by or owned by the DoD at the time of
transportation by sea.
(i) An item is clearly identifiable for eventual use by the DoD if, for
example, the contract documentation contains a reference to a DoD contract
number or a military destination.
(ii) "Supplies" includes (but is not limited to) public works; building
and facilities; ships; floating equipment and vessels of every character, type
and description, with parts, subassemblies, accessories and equipment; machine
tools; material; equipment; stores of all kinds; end items construction
materials; and components of the foregoing.
(7) "U.S.-flag vessel" means a vessel of the United States or belonging to
the United States, including any vessel registered or having national status
under the laws of the United States.
b. The Contractor shall employ United States-flag vessels in the
transportation by sea of any supplies to be furnished in the performance of this
contract. The Contractor and its subcontractors may request that the Contracting
Officer authorized shipment in foreign-flag vessels, or designate available
U.S. flag-vessels, if the Contractor or a subcontractor believes that--
(1) U.S.-flag vessels are not available for timely shipment;
(2) The freight charge are inordinately excessive or unreasonable; or
(3) Freight charges are higher than charges to private persons for
transportation of like goods.
c. The Contractor must submit any request for use of other than U.S.-flag
vessels in writing to the Contracting Officer at least 45 Days prior to the
sailing date necessary to meet its delivery schedules. The Contracting Officer
will process requests submitted after such date(s) as expeditiously as possible,
but the Contracting Officer's failure to grant approval to meet the shipper's
sailing date will not of itself constitute a compensable delay under this or any
other clause of this contract. Requests shall contain at a minimum--
(1) Type, weight and cube cargo;
(2) Required shipping date;
(3) Special handling and discharge requirements;
F33615-96-C-1932 Page 14 Section I
<PAGE>
(4) Loading and discharge points;
(5) Name of shipper and consignee;
(6) Prime contract number; and
(7) A documented description of efforts made to secure U.S.-flag vessels,
including points of contact (with names and telephone numbers) with at least two
U.S.-flag carriers contacted. Copies of telephone notes, telegraphic and
facsimile message or letters will be sufficient for this purpose.
d. The Contractor shall, within 30 days after each shipment covered by this
clause, provide the Contracting Officer and the Division of National Cargo,
Office of Market Development, Maritime Administration, U.S. Department of
Transportation, Washington, DC 20590, one copy of the rated on board vessel
operating carrier's ocean bill of lading, which shall contain the following
information--
(1) Prime contract number;
(2) Name of vessel;
(3) Vessel flag of registry;
(4) Date of loading;
(5) Port of loading;
(6) Port of final discharge;
(7) Description of commodity;
(8) Gross weight in pounds and cubic feet if available;
(9) Total ocean freight in U.S. dollars; and
(10) Name of the steamship company.
e. The Contractor agrees to provide with its final invoice under this contract
a representation that to the best of its knowledge and belief--
(1) No ocean transportation was used in the performance of this contract;
(2) Ocean transportation was used and only U.S.-flag vessels were used for
all ocean shipment under the contract;
(3) Ocean transportation was used, and the Contractor had the written
consent of the Contracting Officer for all non-U.S.-flag ocean transportation;
or
(4) Ocean transportation was used and some or all of the shipments were
made on non-U.S.-flag vessels without the written consent of the Contracting
Officer. The Contractor shall describe these shipments in the following format:
ITEM CONTRACT
DESCRIPTION LINE ITEMS QUANTITY
----------- ---------- --------
TOTAL
f. If the final invoice does not include the required representation, the
Government will reject and return it to the Contractor as an improper invoice
for the purposes of the Prompt Payment clause of this contract. In the event
there has been unauthorized use of non-U.S.-flag vessels in the performance of
this contract, the Contracting Officer is entitled to equitable adjust the
contract, based on the unauthorized use.
g. The contractor shall include in this clause, including this paragraph (g)
in all subcontracts under this contract, which exceed the simplified acquisition
threshold in Part 13 of the Federal Acquisition Regulation.
F33615-96-C-1932 Page 15 Section I
<PAGE>
5. 252.247-7024 NOTIFICATION OF TRANSPORTATION OF SUPPLIES BY SEA (NOV 1995)
a. The Contractor has indicated by the response to the solicitation
provision, Representation of Extent of Transportation by Sea, that it did not
anticipate transporting by sea any supplies. If, however, after the award of
this contract, the Contractor learns that supplies, as defined in the
Transportation of Supplies by Sea clause of this contract, will be transported
by sea, the Contractor --
(1) Shall notify the Contracting Officer of that fact; and
(2) Hereby agrees to comply with all terms and conditions of the
Transportation of Supplies by Sea clause of this contract.
b. The Contractor shall include this clause, including this paragraph, (b),
revised as necessary to reflect the relationship of the contracting parties, in
all subcontracts hereafter, except (effective May 1, 1996) subcontracts for the
acquisition of commercial items or components.
6. 52.252-6 AUTHORIZED DEVIATIONS IN CLAUSES (APR 1984)
a. The use in this solicitation or contract of any Federal Acquisition
Regulation (48 CFR Chapter 1) clause with an authorized deviation is indicated
by the addition of "(DEVIATION)" after the date of the clause.
b. The use in this solicitation or contract of any DOD FAR Supplement (48 CFR
Chapter 2) clause with an authorized deviation is indicated by the addition of
"(DEVIATION)" after the name of the regulation.
7. 52.203-9 REQUIREMENT FOR CERTIFICATE OF PROCUREMENT INTEGRITY-MODIFICATION
(SEP 1995)
a. Definitions. The definitions set forth in FAR 3.104-4 are hereby
incorporated in this clause.
b. The Contractor agrees that it will execute the certification set forth in
paragraph (c) of this clause when requested by the Contracting Officer in
connection with the execution of any modification of this contract.
c. Certification. As required in paragraph (b) of this clause, the officer
or employee responsible for the modification proposal shall execute the
following certification: The certification in paragraph "c(2)" of this clause is
not required for a modification which procures commercial items.
CERTIFICATE OF PROCUREMENT INTEGRITY MODIFICATION (NOV 1990)
(1) I, [Name of certifier] am the officer or employee responsible for the
preparation of this modification proposal and hereby certify that, to the best
of my knowledge and belief, with the exception of any information described in
this certification, I have no information concerning a violation or possible
violation of subsection 27(a),(b),(d) or (f) of the Office of Federal
Procurement Policy Act, as amended* (41 U.S.C. 423),(hereinafter referred to as
"the Act"), as implemented in the FAR, occurring during the conduct of this
procurement (contract and modification number).
(2) As required by subsection 27(e)(1)(B) of the Act, I further certify that
to the best of my knowledge and belief, each officer, employee, agent,
representative, and consultant of [Name of Offeror] who participated personally
and substantially in the preparation or submission of this proposal has
certified that he or she is familiar with, and will comply with, the
requirements of subsection 27(a) of the Act, as implemented in the FAR, and will
report immediately to me any information concerning a violation or possible
violation of subsections 27(a),(b),(d) or (f) of the Act, as implemented in the
FAR, pertaining to this procurement.
(3) Violations or possible violations: (Continue on plain bond paper if
necessary and label Certificate of Procurement Integrity-Modification
(Continuation Sheet), ENTER "NONE" IF NONE EXISTS)
- --------------------------------------------------------------------------------
F33615-96-C-1932 Page 16 Section I
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ----------------------------- Signature of the officer or employee responsible
for the modification proposal and date
- ----------------------------- Typed name of the officer or employee responsible
for the modification proposal
*Subsections 27(a), (b), and (d) are effective on December 1, 1990.
Subsection 27(f) is effective on June 1, 1991.
THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF AN AGENCY OF THE
UNITED STATES AND THE MAKING OF A FALSE, FICTITIOUS, OR FRAUDULENT CERTIFICATION
MAY RENDER THE MAKER SUBJECT TO PROSECUTION UNDER TITLE 18, UNITED STATES CODE,
SECTION 1001.
(End of certification)
d. In making the certification in paragraph (2) of the certificate, the
officer or employee of the competing Contractor responsible for the offer or
bid, may rely upon a one-time certification from each individual required to
submit a certification to the competing Contractor, supplemented by periodic
training. These certifications shall be obtained at the earliest possible date
after an individual required to certify begins employment or association with
the contractor. If the contractor decides to rely on a certification executed
prior to the suspension of section 27 (i.e., prior to December 1, 1989), the
Contractor shall ensure that an individual who has so certified is notified that
section 27 has been reinstated. These certifications shall be maintained by the
Contractor for a period of 6 years from the date a certifying employee's
employment with the company ends or, for an agency, representative, or
consultant, 6 years fro the date such individual ceases to act on behalf of the
contractor.
e. The certification required by paragraph (c) of this clause is a material
representation of fact upon which reliance will be placed in executing this
modification.
8. 52.216-7 ALLOWABLE COST AND PAYMENT (DEVIATION) (JUL 1995)
a. Invoicing. The Government shall make payments to the Contractor when
requested as work progresses, but (except for small business concerns) not more
often than once every 2 weeks, in amounts determined to be allowable by the
Contracting Officer in accordance with Subpart 31.2 of the Federal Acquisition
Regulation (FAR) in effect on the date of this contract and the terms of this
contract. The Contractor may submit to an authorized representative of the
Contracting Officer, in such form and reasonable detail as the representative
may require, an invoice or voucher supported by a statement of the claimed
allowable cost for performing this contract.
b. Reimbursing costs.
(1) For the purpose of reimbursing allowable costs (except as provided in
subparagraph (2) below, with respect to pension, deferred profit sharing, and
employee stock ownership plan contributions), the term "costs" includes only--
(i) Those recorded costs that, at the time of the request for
reimbursement, the Contractor has paid by cash, check, or other form of actual
payment for items Or services purchased directly for the contract;
F33615-96-C-1932 Page 17 Section I
<PAGE>
(ii) When the Contractor is not delinquent in paying costs of
contract performance in the ordinary course of business, costs incurred, but not
necessarily paid, for--
(A) Materials issued from the Contractor's inventory and placed
in the production process for use on the contract;
(B) Direct labor;
(C) Direct travel;
(D) Other direct in-house costs; and
(E) Properly allocable and allowable indirect costs, as shown
in the records maintained by the Contractor for purposes of obtaining
reimbursement under Government contracts; and
(iii) The amount of progress payments that have been paid to the
Contractor's subcontractors under similar cost standards.
(2) Contractor contributions to any pension or other postretirement
benefit, profit-sharing or employee stock ownership plan funds that are paid
quarterly to more often may be included in indirect costs for payment purposes;
Provided, that the Contractor pays the contribution to the fund within 30 days
after the close of the period covered. Payments made 30 days or more after the
close of a period shall not be included until the Contractor actually makes the
payment. Accrued costs for such contributions that are paid less often than
quarterly shall be excluded from indirect costs for payment purposes until the
Contractor actually makes the payment.
(3) Notwithstanding the audit and adjustment of invoices or vouchers under
paragraph (g) below, allowable indirect costs under this contract shall be
obtained by applying indirect cost rates established in accordance with
paragraph (d) below.
(4) Any statements in specifications or other documents incorporated in
this contract by reference designating performance of services or furnishing of
materials at the Contractor's expense or at no cost to the Government shall be
disregarded for purposes of cost-reimbursement under this clause.
c. Small business concerns. A small business concern may be paid more often
than every 2 weeks and may invoice and be paid for recorded costs for items or
services purchased directly for the contract, even though the concern has not
yet paid for those items or services.
d. Final indirect cost rates.
(1) Final annual indirect cost rates and the appropriate bases shall be
established in accordance with Subpart 42.7 of the Federal Acquisition
Regulation (FAR) in effect for the period covered by the indirect cost rate
proposal.
(2) The Contractor shall, within 90 days after the expiration of each of
its fiscal years, or by a later date approved by the Contracting Officer, submit
to the cognizant Contracting Officer responsible for negotiating its final
indirect cost rates and, if required by agency procedures, to the cognizant
audit activity proposed final indirect cost rates for that period and supporting
cost data specifying the contract and/or subcontract to which the rates apply.
The proposed rates shall be based on the Contractor's actual cost experience for
that period. The appropriate Government representative and Contractor shall
establish the final indirect cost rates as promptly as practical after receipt
of the Contractor's proposal.
(3) The Contractor and the appropriate Government representative shall
execute a written understanding setting forth the final indirect cost rates. The
understanding shall specify (i) the agreed-upon final annual indirect cost
rates, (ii) the bases to which the rates apply, (iii) the periods for which the
rates apply, (iv) any specific indirect cost items treated as direct costs in
the settlement, and (v) the affected contract and/or subcontract, identifying
any with advance agreements or special terms and the applicable rates. The
understanding shall not change any monetary ceiling, contract obligation, or
specific cost allowance or disallowance provided for in this contract. The
understanding is incorporated into this contract upon execution.
F33615-96-C-1932 Page 18 Section I
<PAGE>
(4) Within 120 days after settlement of the final indirect cost rates
covering the year in which this contract is physically complete, the contractor
shall submit a completion invoice or voucher to reflect the settled amounts and
rates.
(5) Failure by the parties to agree on a final annual indirect cost rate
shall be a dispute within the meaning of the Disputes clause.
e. Billing rates. Until final annual indirect cost rates are established for
any period, the Government shall reimburse the Contractor at billing rates
established by the Contracting Officer or by an authorized representative (the
cognizant auditor), subject to adjustment when the final rates are established.
These billing rates--
(1) Shall be the anticipated final rates; and
(2) May be prospectively or retroactively revised by mutual agreement, at
either party's request, to prevent substantial overpayment or underpayment.
f. Quick-closeout procedures. Quick-closeout procedures are applicable when
the conditions in FAR 42.708(a) are satisfied.
g. Audit. At any time or times before final payment, the Contracting Officer
may have the Contractor's invoices or vouchers and statements of cost audited.
Any payment may be (1) reduced by amounts found by the Contracting Officer not
to constitute allowable costs or (2) adjusted for prior overpayments or
underpayments.
h. Final payment.
(1) Upon approval of a completion invoice or voucher submitted by the
Contractor in accordance with (d)(4), and upon the Contractor's compliance with
all terms of this contract, the Government shall promptly pay any balance of
allowable costs and that part of the fee (if any) not previously paid.
(2) The Contractor shall pay to the Government any refunds, rebates,
credits, or other amounts (including interest, if any) accruing to or received
by the Contractor or any assignee under this contract, to the extent that those
amounts are properly allocable to costs for which the Contractor has been
reimbursed by the Government. Reasonable expenses incurred by the Contractor for
securing refunds, rebates, credits, or other amounts shall be allowable costs if
approved by the Contracting Officer. Before final payment under this contract,
the Contractor and each assignee whose assignment is in effect at the time of
final payment shall execute and deliver--
(i) An assignment to the Government, in form and substance satisfactory
to the Contracting Officer, of refunds, rebates, credits, or other amounts
(including interest, if any) properly allocable to costs for which the
Contractor has been reimbursed by the Government under this contract; and
(ii) A release discharging the Government, its officers, agents, and
employees from all liabilities, obligations, and claims arising out of or under
this contract, except--
(A) Specified claims stated in exact amounts, or in estimated
amounts when the exact amounts are not known;
(B) Claims (including reasonable incidental expenses) based upon
liabilities of the Contractor to third parties arising out of the performance of
this contract; provided, that the claims are not known to the contractor on the
date of the execution of the release, and that the Contractor gives notice of
the claims in writing to the contracting Officer within 6 years following the
release date or notice of final payment date, whichever is earlier; and
(C) Claims for reimbursement of costs, including reasonable
incidental expenses, incurred by the contractor under the patent clauses of this
contract, excluding, however, any expenses arising from the Contractor's
indemnification of the Government against patent liability.
(If this contract is with an educational institution, modify the above clause by
deleting from paragraph (a) the words "Subpart 31.2" and substituting for them
"Subpart 31.3". If this contract is with a non-profit organization other than an
educational institution, modify the clause by deleting from paragraph (a) the
words "Subpart 31.2" and substituting for them "Subpart 31.7".)
F33615-96-C-1932 Page 19 Section I
<PAGE>
9. 52.216-8 FIXED FEE (DEVIATION) (JUL 1995)
a. The Government shall pay the Contractor for performing this contract the
fixed fee specified in the Schedule.
b. Payment of the fixed fee shall be made as specified in the Schedule;
provided, that after payment of 85 percent of the fixed fee, the Contracting
Officer may withhold further payment of fee until a reserve is set aside in an
amount that the Contracting Officer considers necessary to protect the
Government's interest. This reserve shall not exceed 15 percent of the total
fixed fee or $100,000, whichever is less. The Contracting Officer shall release
75 percent of all fee withholds under this contract after receipt of the
certified final indirect cost rate proposal covering the year of physical
completion of this contract, provided the Contractor has satisfied all other
contract terms and conditions, including the submission of the final patent and
royalty reports, and is not delinquent in submitting final vouchers on prior
years' settlements. The Contracting Officer may release up to 90 percent of the
fee withhold under this contract based on the Contractor's past performance
related to the submission and settlement of final indirect cost rate proposals.
10. 5352.215-9020 INCORPORATION OF CONTRACTOR'S TECHNICAL PROPOSAL (DEC 1995)
a. The following documents are incorporated herein by reference and made a
part of this contract:
Pages 6 through 35 of Contractor's Technical Proposal dated 96MAR04, entitled
`IMAGE RESOLUTION ENHANCEMENT USING MICROSCAN AND SCENE BASED PIXEL STEERING (IR
EMSPS)'.
b. Nothing contained in the contractor's technical proposal shall
constitute a waiver to any other requirement of this contract. In the event of
any conflict between the contractor's technical proposal and any other
requirement of the contract, the conflict shall be resolved in accordance with
the Order of Precedence clause. For purposes of the Order of Precedence clause
the documents) listed above shall rank last.
c. The detailed technical content of the contractor's proposal was an
important factor in the selection of the contractor for award of this contract.
The documents listed above are now contractually binding. The contractor shall
not change or otherwise deviate from the content of these documents without
prior written approval from the contracting officer.
d. If it is necessary to change the performance, design, configuration, or
other items specified in the technical proposal in order to comply with the
requirements of the contract clauses, special contract requirements, or
statement of work, the contract shall be modified appropriately.
e. The contractor agrees that the documents listed above will reflect the
results/responses to all discussions, Clarifications issued during the
negotiation process. If, after award, it is discovered that changes made during
negotiations were not incorporated in the SOW and/or technical proposal, such
changes to the contractor's documents shall be considered administrative in
nature and shall be made by unilateral modification to the contract, at no
change in contract cost or price or other terms and conditions.
11. 5352.228-9004 INSURANCE CLAUSE IMPLEMENTATION (FEB 1996)
The contractor shall obtain and maintain the minimum kinds and amounts of
insurance during performance of this contract as specified by FAR 28.307-2 and
contemplated by FAR 52.228-5 and/or 52.228-7.
F33615-96-C-1932 Page 20 Section I
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
SECTION J LIST OF DOCUMENTS, EXHIBITS, AND OTHER ATTACHMENTS
- ----------------------------------------------------------------------------------------
NO. OF
IDENT DATE TITLE PAGES
- ----- ---- ----- ------
<S> <C> <C>
Exhibit A 96APR26 Contract Data Requirements List (DD Form 1423) 10
ATCH 1 96JUL30 Section C, Description/Specifications 1
</TABLE>
Page 21
<PAGE>
30JUL96
SECTION C
DESCRIPTIONS/SPECIFICATIONS
CONTRACT: F33615-96-C-1932
IMAGE RESOLUTION ENHANCEMENT USING MICROSCAN AND
SCENE-BASED PIXEL STEERING
1.0 SCOPE: The scope of this program is the design, fabrication, testing,
delivery, installation and demonstration of an image processing system that can
improve the resolution of existing imaging infrared sensors by a factor of 2-10,
while operating in real-time.
2.0 APPLICABLE DOCUMENTS: The contractor's proposal titled, "Image Resolution
Enhancement Using Microscan and Scene-Based Pixel Steering (IREMSPS), dated 4
March 1996.
3.0 REQUIREMENTS: The contractor shall exercise administrative and financial
management functions during the course of this effort such as scheduling of
activities and milestones; describing status; outlining contractor activity and
progress toward accomplishment of objectives; planning; forecasting; and making
recommendations on funding and funding changes; program planning; and
documenting in detail work performed and the results of the effort including
technological breakthroughs (CDRL Items #A001, A002, A003, A004, A005, A006,
A007, A008, A009, and A010.)
3.1 The contractor's proposal pages 7-11 and 23-26 shall be incorporated by
reference.
PAGE 1 OF 1
ATCH #1
<PAGE>
<TABLE>
<S> <C>
CONTRACT DATA REQUIREMENTS LIST Form Approved
(1 Data XXm) SMB No. 0704-0188
- ------------------------------------------------------------------------------------------------------------------
Public reporting burden for this collection of information is estimated to average 220 hours per response,
including the time for reviewing instructions, searching existing data sources, gathering and maintaining
the data needed, and completing and reviewing the collection of information. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing
this burden, to Department of Defense, Washington Headquarters Services, Directorate for information
Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the
Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, DC 20503. Please
DO NOT RETURN your form to either of these addresses. Send completed form to the Government Issuing
Contracting Officer for the Contract/PR No. listed in Block E.
- ------------------------------------------------------------------------------------------------------------------
A. CONTRACT LINE ITEM NO. B. EXHIBIT C. CATEGORY: N/A REF: DOD 5010.12-L AMSDL
0001 A TDP TM OTHER
------ ------ ----------
- ------------------------------------------------------------------------------------------------------------------
D. SYSTEM/ITEM E. CONTRACT/PR NO. F. CONTRACTOR
2004 F33615-96-C-1932 Irvine Sensors Corp
- ------------------------------------------------------------------------------------------------------------------ ----------------
1. DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE 17. PRICE GROUP
A001 SCIENTIFIC AND TECHNICAL REPORTS Final Report
- ------------------------------------------------------------------------------------------------------------------ ----------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE 18. ESTIMATED
DI-MISC-80711/T Contractor's Proposal WL/AAJT TOTAL PRICE
- ------------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
XX REQUIRED 18 MAC -------------------------------
A ONE/R b. COPIES
- ------------- ---------------------------------------------- ------------------ ----------------
8. APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT a. ADDRESSEE Final
A 17 MAC SUBMISSION Draft ------------
21 MAC Reg Repro
- ------------------------------------------------------------------------------------------------------------------
16. REMARKS WL/AAJT 3 1
-------------------------------
Tailored to require the official WL emblem to be placed in the upper -------------------------------
right hand corner of the front cover with affected entries adjusted as -------------------------------
required (WL will supply a copy of the emblem); Block 10, para 10.3 is -------------------------------
clarified so that distribution to DTIC will be through Air Force -------------------------------
distribution channels. -------------------------------
-------------------------------
Approval/disapproval by letter from the Air Force within 60 days -------------------------------
after receipt. Disapproval requires correction/resubmission within -------------------------------
30 days after receipt of Air Force comments. -------------------------------
-------------------------------
Draft report shall be unbound, in standard size type, -------------------------------
double-spaced and single-sided. -------------------------------
-------------------------------
Reproducible shall be a CAMERA READY, unbound, suitable for offset -------------------------------
reproduction, and shall incorporate all changes made in the corrected draft. -------------------------------
All photos shall be glossy finished. Submit the reproducible with the -------------------------------
final corrected version only. -------------------------------
-------------------------------
The contractor is reminded that the DOD Industrial Security Manual, -------------------------------
DOD 5220.22M, App II, Para B.2(a) requires that records be maintained when -------------------------------
documents derive classified from multiple sources. -------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
15. TOTAL 3 1
- ------------------------------------------------------------------------------------------------------------------
G. PREPARED BY H. DATE I. APPROVED BY J. DATE
Anthony E. Absi 1 Apr 96 /s/ Leslie Steadman APR 26 1996
WL/AAJT, (513) 255-9609 Leslie Steadman
Data Mgr, WL/DOR x57466
- ------------------------------------------------------------------------------------------------------------------
DD Form 1423-1, JUN 90 Previous editions are obsolete Page 1 of 10 Pages
--- ----
</TABLE>
<PAGE>
<TABLE>
<S> <C>
CONTRACT DATA REQUIREMENTS LIST Form Approved
(1 Data XXm) SMB No. 0704-0188
==================================================================================================================
Public reporting burden for this collection of information is estimated to average 220 hours per response,
including the time for reviewing instructions, searching existing data sources, gathering and maintaining
the data needed, and completing and reviewing the collection of information. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing
this burden, to Department of Defense, Washington Headquarters Services, Directorate for information
Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the
Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, DC 20503. Please
DO NOT RETURN your form to either of these addresses. Send completed form to the Government Issuing
Contracting Officer for the Contract/PR No. listed in Block E.
==================================================================================================================
A. CONTRACT LINE ITEM NO. B. EXHIBIT C. CATEGORY: N/A REF: DOD 5010.12-L AMSDL
0001 A TDP TM OTHER
------ ------ ----------
- ------------------------------------------------------------------------------------------------------------------
D. SYSTEM/ITEM E. CONTRACT/PR NO. F. CONTRACTOR
2004 F33615-96-C-1932 Irvine Sensors Corp
================================================================================================================== ================
1. DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE 17. PRICE GROUP
A002 CONTRACT FUNDS STATUS REPORT (CFSR)
- ------------------------------------------------------------------------------------------------------------------ ----------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE 18. ESTIMATED
DI-FNCL-81468/T Contractor's Proposal WL/AAJT TOTAL PRICE
- ------------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
REQUIRED -------------------------------
LT QRTLY * * b. COPIES
- ------------- E ---------------------------------------------- ------------------ ================
8. APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT a. ADDRESSEE Final
N/A * 0 SUBMISSION Draft ------------
* * Reg Repro
- ------------------------------------------------------------------------------------------------------------------
16. REMARKS WL/AAJT 1
-------------------------------
Tailored so that the report contains forecasts by month for the next CO 1
six months, by quarter for the remaining fiscal year, and by year for -------------------------------
the remaining fiscal years. CFSR data shall be reconciled to the WL/AAFR 1
Government's fiscal year end at 30 September if the contractor's -------------------------------
fiscal year end does not coincide with the Government's fiscal year end. ACO 1
-------------------------------
-------------------------------
* The last day of the contractor's monthly accounting period -------------------------------
nearest the end of the government's fiscal year quarter. -------------------------------
-------------------------------
-------------------------------
** The initial submission shall be within 25 calendar days after -------------------------------
the close of the contractor's monthly accounting period nearest the -------------------------------
end of the first government fiscal year quarter after contract award. -------------------------------
Subsequent submissions shall be 25 calendar days after Block 11 time. -------------------------------
-------------------------------
-------------------------------
The contractor shall have the capability to transmit all data formats -------------------------------
electronically via modem or E-Mail throught the Defense Data Network. -------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
15. TOTAL 4
==================================================================================================================
G. PREPARED BY H. DATE I. APPROVED BY J. DATE
Anthony E. Absi /s/ Leslie Steadman
WL/AAJT, (513) 255-9609 1 Apr 96 Leslie Steadman APR 26 1996
Data Mgr, WL/DOR x57466
==================================================================================================================
DD Form 1423-1, JUN 90 Previous editions are obsolete Page 2 of 10 Pages
</TABLE>
<PAGE>
<TABLE>
<S> <C>
CONTRACT DATA REQUIREMENT LIST Form Approved
(1 Data XXm) SMB No. 0704-0188
- ------------------------------------------------------------------------------------------------------------------
Public reporting burden for this collection of information is estimated to average 220 hours per response,
including the time for reviewing instructions, searching existing data sources, gathering and maintaining
the data needed, and completing and reviewing the collection of information. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing
this burden, to Department of Defense, Washington Headquarters Services, Directorate for information
Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the
Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, DC 20503. Please
DO NOT RETURN your form to either of these addresses. Send completed form to the Government Issuing
Contracting Officer for the Contract/PR No. listed in Block E.
- ------------------------------------------------------------------------------------------------------------------
A. CONTRACT LINE ITEM NO. B. EXHIBIT C. CATEGORY: N/A REF: DOD 5010.12-L AMSDL
0001 A TDP TM OTHER
------ ------ ----------
- ------------------------------------------------------------------------------------------------------------------
D. SYSTEM/ITEM E. CONTRACT/PR NO. F. CONTRACTOR
2004 F33615-96-C-1932 Irvine Sensors Corp
- ------------------------------------------------------------------------------------------------------------------ ----------------
1. DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE 17. PRICE GROUP
A003 FUNDS AND MAN-HOUR EXPENDITURE REPORT
- ------------------------------------------------------------------------------------------------------------------ ----------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE 18. ESTIMATED
DI-FNCL-80331 Contractor's Proposal WL/AAJT TOTAL PRICE
- ------------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
LT REQUIRED MTHLY ** -------------------------------
E b. COPIES
- ------------- ---------------------------------------------- ------------------ ----------------
8. APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT a. ADDRESSEE Final
N/A SUBMISSION Draft ------------
* ** Reg Repro
- ------------------------------------------------------------------------------------------------------------------
16. REMARKS WL/AAJT 1
-------------------------------
* At the close of the contractor's monthly accounting period. CO 1
-------------------------------
** 25 days after Block 11 time. WL/AAF 1
-------------------------------
ACO 1
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
15. TOTAL 4
- ------------------------------------------------------------------------------------------------------------------
G. PREPARED BY H. DATE I. APPROVED BY J. DATE
Anthony E. Absi 1 Apr 96 /s/ Leslie Steadman APR 26 1996
WL/AAJT, (513) 255-9609 Leslie Steadman
Data Mgr, WL/DOR x57466
- ------------------------------------------------------------------------------------------------------------------
DD Form 1423-1, JUN 90 Previous editions are obsolete Page 5 of 10 Pages
--- ----
</TABLE>
<PAGE>
<TABLE>
<S> <C>
CONTRACT DATA REQUIREMENTS LIST Form Approved
(1 Data XXm) SMB No. 0704-0188
- ------------------------------------------------------------------------------------------------------------------
Public reporting burden for this collection of information is estimated to average 220 hours per response,
including the time for reviewing instructions, searching existing data sources, gathering and maintaining
the data needed, and completing and reviewing the collection of information. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing
this burden, to Department of Defense, Washington Headquarters Services, Directorate for Information
Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the
Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, DC 20503. Please
DO NOT RETURN your form to either of these addresses. Send completed form to the Government Issuing
Contracting Officer for the Contract/PR No. listed in Block E.
- ------------------------------------------------------------------------------------------------------------------
A. CONTRACT LINE ITEM NO. B. EXHIBIT C. CATEGORY: N/A REF: DOD 5010.12-L AMSDL
0001 A TDP TM OTHER
------ ------ ----------
- ------------------------------------------------------------------------------------------------------------------
D. SYSTEM/ITEM E. CONTRACT/PR NO. F. CONTRACTOR
2004 F33615-96-C-1932 Irvine Sensors Corp
- ------------------------------------------------------------------------------------------------------------------ ----------------
1. DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE 17. PRICE GROUP
A004 SCIENTIFIC AND TECHNICAL REPORTS Contractor's Billing Voucher
- ------------------------------------------------------------------------------------------------------------------ ----------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE 18. ESTIMATED
DI-MISC-80711/T Contractor's Proposal WL/AAJT TOTAL PRICE
- ------------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
LT REQUIRED MTHLY * -------------------------------
E b. COPIES
- ------------- ---------------------------------------------- ------------------ ----------------
8. APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT a. ADDRESSEE Final
N/A SUBMISSION Draft ------------
* * Reg Repro
- ------------------------------------------------------------------------------------------------------------------
16. REMARKS WL/AAJT 1
-------------------------------
Tailored 1.) to require only a photocopy of the contractor's billing CO 1
voucher which is prepared by the contractor to receive payment for this -------------------------------
contract's work, and 2.) to require the reporting of current Earned, WL/AAF 1
Billed and Paid funds as defined herein: -------------------------------
ACO 1
Earned means amount of funds earned by the contractor and -------------------------------
the suppliers or subcontractor's through labor or -------------------------------
material purchases. -------------------------------
-------------------------------
Billed means amount of funds that have been billed to the -------------------------------
government by the contractor. -------------------------------
-------------------------------
Paid means the amount of funds paid by the government -------------------------------
to the contractor. -------------------------------
-------------------------------
* Submit voucher information monthly, through normal mail -------------------------------
channels to all Block 14 addressees, with Data Item #A003. -------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
15. TOTAL 4
- ------------------------------------------------------------------------------------------------------------------
G. PREPARED BY H. DATE I. APPROVED BY J. DATE
Anthony E. Absi 1 Apr 96 /s/ Leslie Steadman APR 26 1996
WL/AAJT, (513) 255-9609 Leslie Steadman
Data Mgr, WL/DOR x57466
- ------------------------------------------------------------------------------------------------------------------
DD Form 1423-1, JUN 90 Previous editions are obsolete Page 4 of 10 Pages
--- ----
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONTRACT DATA REQUIREMENTS LIST Form Approved
(1 Data XXm) SMB No. 0704-0188
- ----------------------------------------------------------------------------------------------------------------
Public reporting burden for this collection of information is estimated to average 220 hours per response,
including the time for reviewing instructions, searching existing data sources, gathering and maintaining
the data needed, and completing and reviewing the collection of information. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing
this burden, to Department of Defense, Washington Headquarters Services, Directorate for Information
Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the
Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, DC 20503. Please
DO NOT RETURN your form to either of these addresses. Send completed form to the Government Issuing
Contracting Officer for the Contract/PR No. listed in Block E.
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A. CONTRACT LINE ITEM NO. B. EXHIBIT C. CATEGORY: N/A REF: DOD 5010.12-L AMSDL
0001 A TDP TM OTHER
---------- ---------- --------------
- ----------------------------------------------------------------------------------------------------------------
D. SYSTEM/ITEM E. CONTRACT/PR NO. F. CONTRACTOR
2004 F33615-96-C-1932 Irvine Sensors Corp
- ---------------------------------------------------------------------------------------------------------------- -----------------
1. DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE 17. PRICE GROUP
A006 INNOVATIONS REPORT Commercialization Report
- ---------------------------------------------------------------------------------------------------------------- -----------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE 18. ESTIMATED
DI-MISC-80406/T Contractor's Proposal WL/AAJT TOTAL PRICE
- ----------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
LT REQUIRED ONE/R 17 MAC ----------------------------
- ------------- A ---------------------------------------------- b. COPIES
----------------- -----------------
8. APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT a. ADDRESSEE Final
SUBMISSION Draft ------------
N/A 16 MAC N/A Reg Repro
- ----------------------------------------------------------------------------------------------------------------
16. REMARKS WL/AAJT 1
Tailored to allow contractor's format -----------------------------
WL/XPT 1
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
15. TOTAL 2
- ----------------------------------------------------------------------------------------------------------------
G. PREPARED BY H. DATE I. APPROVED BY J. DATE
Anthony E. Absi 1 Apr 96 /s/ Leslie Steadman APR 26 1996
--------------------
WL/AAJT, (513) 255-9609 Leslie Steadman
Data Mgr, WL//DORXXXXXX
- ----------------------------------------------------------------------------------------------------------------
DD Form 1423-1, JUN 90 Previous editions are obsolete Page 5 of 10 Pages
--- ----
</TABLE>
<PAGE>
<TABLE>
<S> <C>
CONTRACT DATA REQUIREMENTS LIST Form Approved
(1 Data XXm) SMB No. 0704-0188
- ------------------------------------------------------------------------------------------------------------------
Public reporting burden for this collection of information is estimated to average 220 hours per response,
including the time for reviewing instructions, searching existing data sources, gathering and maintaining
the data needed, and completing and reviewing the collection of information. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing
this burden, to Department of Defense, Washington Headquarters Services, Directorate for Information
Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the
Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, DC 20503. Please
DO NOT RETURN your form to either of these addresses. Send completed form to the Government Issuing
Contracting Officer for the Contract/PR No. listed in Block E.
- ------------------------------------------------------------------------------------------------------------------
A. CONTRACT LINE ITEM NO. B. EXHIBIT C. CATEGORY: N/A REF: DOD 5010.12-L AMSDL
0001 A TDP TM OTHER
------ ------ ----------
- ------------------------------------------------------------------------------------------------------------------
D. SYSTEM/ITEM E. CONTRACT/PR NO. F. CONTRACTOR
2004 F33615-96-C-1932 Irvine Sensors Corp
- ------------------------------------------------------------------------------------------------------------------ ----------------
1. DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE 17. PRICE GROUP
A005 STATUS REPORT
- ------------------------------------------------------------------------------------------------------------------ ----------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE 18. ESTIMATED
DI-MGMT-80368/T Contractor's Proposal WL/AAJT TOTAL PRICE
- ------------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
LT REQUIRED MTHLY * -------------------------------
E b. COPIES
- ------------- ---------------------------------------------- ------------------ ----------------
8. APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT a. ADDRESSEE Final
N/A * SUBMISSION Draft ------------
* Reg Repro
- ------------------------------------------------------------------------------------------------------------------
16. REMARKS WL/AAJT 1
-------------------------------
Tailored to allow contractor's format. CO 1
-------------------------------
* Submit with Data Item #A003, except when ACO 1
final reports are due to be -------------------------------
submitted, then omit this item. -------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
15. TOTAL 3
- ------------------------------------------------------------------------------------------------------------------
G. PREPARED BY H. DATE I. APPROVED BY J. DATE
Anthony E. Absi 1 Apr 96 /s/ Leslie Steadman APR 26 1996
WL/AAJT, (513) 255-9609 Leslie Steadman
Data Mgr, WL/DOR x57466
- ------------------------------------------------------------------------------------------------------------------
DD Form 1423-1, JUN 90 Previous editions are obsolete Page 6 of 10 Pages
--- ----
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONTRACT DATA REQUIREMENTS LIST Form Approved
(1 Data XXm) SMB No. 0704-0188
- ----------------------------------------------------------------------------------------------------------------
Public reporting burden for this collection of information is estimated to average 220 hours per response,
including the time for reviewing instructions, searching existing data sources, gathering and maintaining
the data needed, and completing and reviewing the collection of information. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing
this burden, to Department of Defense, Washington Headquarters Services, Directorate for Information
Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the
Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, DC 20503. Please
DO NOT RETURN your form to either of these addresses. Send completed form to the Government Issuing
Contracting Officer for the Contract/PR No. listed in Block E.
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A. CONTRACT LINE ITEM NO. B. EXHIBIT C. CATEGORY: N/A REF: DOD 5010.12-L AMSDL
0001 A TDP TM OTHER
------ ------ ----------
- ----------------------------------------------------------------------------------------------------------------
D. SYSTEM/ITEM E. CONTRACT/PR NO. F. CONTRACTOR
2004 F33615-96-C-1932 Irvine Sensors Corp
- ---------------------------------------------------------------------------------------------------------------- -----------------
1. DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE 17. PRICE GROUP
A007 PRESENTATION MATERIAL
- ---------------------------------------------------------------------------------------------------------------- -----------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE 18. ESTIMATED
DI-ADMN-81373/T Contractor's Proposal WL/AAJT TOTAL PRICE
- ----------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
LT REQUIRED ASREQ ASREQ ----------------------------
- ------------- E ---------------------------------------------- b. COPIES
----------------- -----------------
8. APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT a. ADDRESSEE Final
SUBMISSION DRAFT ------------
N/A ASREQ ASREQ Reg Repro
- ----------------------------------------------------------------------------------------------------------------
16. REMARKS WL/AAJT 1
Tailored to require only vugraphs and hardcopy. -----------------------------
-----------------------------
ASREQ means as required to document topics under discussion at briefings and -----------------------------
reviews. Submit at each briefing or review as appropriate. -----------------------------
-----------------------------
-----------------------------
Maximum # of vugraphs shall not exceed 250 for this contract. -----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
-----------------------------
15. TOTAL 1
- ----------------------------------------------------------------------------------------------------------------
G. PREPARED BY H. DATE I. APPROVED BY J. DATE
Anthony E. Absi 1 Apr 96 /s/ Leslie Steadman APR 26 1996
--------------------
WL/AAJT, (513) 255-9609 Leslie Steadman
Data Mgr, WL//DORXXXXXX
- ----------------------------------------------------------------------------------------------------------------
DD Form 1423-1, JUN 90 Previous editions are obsolete Page 7 of 10 Pages
--- ----
</TABLE>
<PAGE>
<TABLE>
<S> <C>
CONTRACT DATA REQUIREMENTS LIST Form Approved
(1 Data XXm) SMB No. 0704-0188
- ------------------------------------------------------------------------------------------------------------------
Public reporting burden for this collection of information is estimated to average 220 hours per response,
including the time for reviewing instructions, searching existing data sources, gathering and maintaining
the data needed, and completing and reviewing the collection of information. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing
this burden, to Department of Defense, Washington Headquarters Services, Directorate for Information
Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the
Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, DC 20503. Please
DO NOT RETURN your form to either of these addresses. Send completed form to the Government Issuing
Contracting Officer for the Contract/PR No. listed in Block E.
- ------------------------------------------------------------------------------------------------------------------
A. CONTRACT LINE ITEM NO. B. EXHIBIT C. CATEGORY: N/A REF: DOD 5010.12-L AMSDL
0001 A TDP TM OTHER
------ ------ ----------
- ------------------------------------------------------------------------------------------------------------------
D. SYSTEM/ITEM E. CONTRACT/PR NO. F. CONTRACTOR
2004 F33615-96-C-1932 Irvine Sensors Corp
- ------------------------------------------------------------------------------------------------------------------ ----------------
1. DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE 17. PRICE GROUP
A008 SOFTWARE USER MANUAL (SUM)
- ------------------------------------------------------------------------------------------------------------------ ----------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE 18. ESTIMATED
DI-IPSC-81443/T Contractor's Proposal WL/AAJT TOTAL PRICE
- ------------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
LT REQUIRED ASREQ ASREQ -------------------------------
C b. COPIES
- ------------- ---------------------------------------------- ------------------ ----------------
8. APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT a. ADDRESSEE Final
A * SUBMISSION Draft ------------
ASREQ R/ASR Reg Repro
- ------------------------------------------------------------------------------------------------------------------
16. REMARKS WL/AAJT 1 1 1
-------------------------------
Tailored to allow contractor's format. -------------------------------
-------------------------------
Deliver unbound on 8-1/2"x11" bond paper. -------------------------------
-------------------------------
Approval/disapproval by letter from the Air Force -------------------------------
within 30 days after receipt. Disapproval requires -------------------------------
correction/resubmission within 30 days after -------------------------------
receipt of Air Force comments. -------------------------------
-------------------------------
* At the Completion of major software modules. -------------------------------
-------------------------------
R/ASR means as required to document revisions or -------------------------------
upgrades to contractor-developed software. -------------------------------
-------------------------------
ASREQ means as required to document user instructions -------------------------------
for the software; submit 30 days after the completion -------------------------------
of the major modules. -------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
15. TOTAL 1 1 1
- ------------------------------------------------------------------------------------------------------------------
G. PREPARED BY H. DATE I. APPROVED BY J. DATE
Anthony E Absi 1 Apr 96 /s/ Leslie Steadman APR 26 1996
WL/AAJT, (513) 255-9609 Leslie Steadman
Data Mgr, WL/DOR x57466
- ------------------------------------------------------------------------------------------------------------------
DD Form 1423-1, JUN 90 Previous editions are obsolete Page 8 of 10 Pages
--- ----
</TABLE>
<PAGE>
<TABLE>
<S> <C>
CONTRACT DATA REQUIREMENTS LIST Form Approved
(1 Data XXm) SMB No. 0704-0188
- ------------------------------------------------------------------------------------------------------------------
Public reporting burden for this collection of information is estimated to average 220 hours per response,
including the time for reviewing instructions, searching existing data sources, gathering and maintaining
the data needed, and completing and reviewing the collection of information. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing
this burden, to Department of Defense, Washington Headquarters Services, Directorate for information
Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the
Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, DC 20503. Please
DO NOT RETURN your form to either of these addresses. Send completed form to the Government Issuing
Contracting Officer for the Contract/PR No. listed in Block E.
- ------------------------------------------------------------------------------------------------------------------
A. CONTRACT LINE ITEM NO. B. EXHIBIT C. CATEGORY: N/A REF: DOD 5010.12-L AMSDL
0001 A TDP TM OTHER
------ ------ ----------
- ------------------------------------------------------------------------------------------------------------------
D. SYSTEM/ITEM E. CONTRACT/PR NO. F. CONTRACTOR
2004 F33615-96-C-1932 Irvine Sensors Corp
- ------------------------------------------------------------------------------------------------------------------ ----------------
1. DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE 17. PRICE GROUP
A009 COMPUTER PROGRAMMING MANUAL (SPM)
- ------------------------------------------------------------------------------------------------------------------ ----------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE 18. ESTIMATED
DI-IPSC-81447/T Contractor's Proposal WL/AAJT TOTAL PRICE
- ------------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
LT REQUIRED ASREQ ASREQ -------------------------------
C b. COPIES
- ------------- ---------------------------------------------- ------------------ ----------------
8. APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT a. ADDRESSEE Final
A SUBMISSION Draft ------------
ASREQ R/ASR Reg Repro
- ------------------------------------------------------------------------------------------------------------------
16. REMARKS WL/AAJT 1 1 1
-------------------------------
Tailored to allow contractor's format. -------------------------------
-------------------------------
Deliver unbound on 8-1/2" x 11" bond paper. -------------------------------
-------------------------------
-------------------------------
Approval/disapproval by letter from the Air Force within 30 days -------------------------------
after receipt. Disapproval requires correction/resubmission within -------------------------------
30 days after receipt of Air Force comments. -------------------------------
-------------------------------
R/ASR means as required to document revisions or upgrades of contractor- -------------------------------
developed software. -------------------------------
-------------------------------
ASREQ means as required to document software programmer's instructions; -------------------------------
submit within 30 days after completion of major software modules. -------------------------------
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15. TOTAL 1 1 1
- ------------------------------------------------------------------------------------------------------------------
G. PREPARED BY H. DATE I. APPROVED BY J. DATE
Anthony E. Absi 1 Apr 96 /s/ Leslie Steadman APR 26 1996
WL/AAJT, (513) 255-9609 Leslie Steadman
Data Mgr, WL/DOR x57466
- ------------------------------------------------------------------------------------------------------------------
DD Form 1423-1, JUN 90 Previous editions are obsolete Page 9 of 10 Pages
--- ----
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONTRACT DATA REQUIREMENTS LIST Form Approved
(1 Data XXm) SMB No. 0704-0188
================================================================================================================
Public reporting burden for this collection of information is estimated to average 220 hours per response,
including the time for reviewing instructions, searching existing data sources, gathering and maintaining
the data needed, and completing and reviewing the collection of information. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing
this burden, to Department of Defense, Washington Headquarters Services, Directorate for information
Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the
Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, DC 20503. Please
DO NOT RETURN your form to either of these addresses. Send completed form to the Government Issuing
Contracting Officer for the Contract/PR No. listed in Block E.
================================================================================================================
<S> <C> <C>
A. CONTRACT LINE ITEM NO. B. EXHIBIT C. CATEGORY: N/A REF: DOD 5010.12-L AMSDL
0001 A TDP TM OTHER
------ ------ ----------
- ----------------------------------------------------------------------------------------------------------------
D. SYSTEM/ITEM E. CONTRACT/PR NO. F. CONTRACTOR
2004 F33615-96-C-1932 Irvine Sensors Corp
================================================================================================================ =================
1.DATA ITEM NO. 2. TITLE OF DATA ITEM 3. SUBTITLE 17. PRICE GROUP
A010 DEVELOPMENTAL DESIGN DRAWINGS AND
ASSOCIATED LIST
- ---------------------------------------------------------------------------------------------------------------- -----------------
4. AUTHORITY (Data Acquisition Document No.) 5. CONTRACT REFERENCE 6. REQUIRING OFFICE 18. ESTIMATED
DI-DRPR-81002 Contractor's Proposal WL/AAJT TOTAL PRICE
- ----------------------------------------------------------------------------------------------------------------
7. DD 250 REQ 9. DIST STATEMENT 10. FREQUENCY 12. DATE OF FIRST SUBMISSION 14. DISTRIBUTION
LT REQUIRED ONE/R * ----------------------------
- ------------- C ---------------------------------------------- b. COPIES
--------------- =================
8 APP CODE 11. AS OF DATE 13. DATE OF SUBSEQUENT a. ADDRESSEE Final
SUBMISSION Draft ---------
A R/ASR Reg Repro
- ----------------------------------------------------------------------------------------------------------------
16. REMARKS WL/AAJT 1 1 1
Tailored to allow contractor format as defined in the attached -----------------------------
DD Form 2554-3. -----------------------------
-----------------------------
* Submit at the completion of Task 3, Brassboard development and Test. -----------------------------
-----------------------------
Approval/disapproval by letter from the Air Force within 30 days after -----------------------------
receipt. Disapproval requires correction/resubmission within 30 days -----------------------------
after receipt of Air Force comments. -----------------------------
-----------------------------
R/ASR means revisions as required to maintain up to date and accurate -----------------------------
drawings and lists. Revisions are subject to the approval cycle as stated. -----------------------------
-----------------------------
Reproducible shall be on bond paper. -----------------------------
-----------------------------
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15. TOTAL 1 1 1
================================================================================================================
G. PREPARED BY H. DATE I. APPROVED BY J. DATE
Anthony E. Absi /s/ Leslie Steadman
WL/AAJT, (513) 255-9609 1 Apr 96 -------------------- APR 26 1996
Leslie Steadman
Data Mgr, WL/DOR x57466
================================================================================================================
DD Form 1423-1, JUN 90 Previous editions are obsolete Page 10 of 10 Pages
</TABLE>
<PAGE>
EXHIBIT 10.25
EXHIBIT 10.25-PURCHASE ORDER FROM LORAL FEDERAL SYSTEMS CO. DATED APRIL 26, 1996
Loral Federal Systems Company
9500 Godwin Drive
Manassas, Va. 22110
Purchase Order No. 102537
Date: 26 April 1996
Seller: Irvine Sensors Corporation Payment Terms: Net 15 Days
21 Gregory Drive
South Burlington, VT 05403
Attn: Raphael Some
1. PARTIES/TYPE OF CONTRACT
This Firm Fixed Price/Fixed Price Level Of Effort (for Task D2) order between
Loral Federal Systems Company (hereinafter referred to as Buyer) and the above-
cited Supplier (hereinafter referred to as Seller), constitutes the definitive
contract contemplated by Letter Contract Number 102357 dated 19 December 1995,
and supersedes said Letter Contract and any and all amendments thereto,
including any prior agreements between Buyer and Seller, whether oral or
written, concerning the subject matter hereof. All performance by Seller and
all payments made by Buyer under such Letter Contract shall be considered
performance and payments made under this contract. In the event of conflict
between this contract and the Letter Contract, this contract shall govern.
2. PRODUCT/SERVICES
Seller will provide articles, services and/or data as set forth in Schedule A.
In accordance with the attached Rational for Task D2, ISC shall, on a firm fixed
price level of effort and with Loral's assistance, develop and qualify a process
for Under Ball Metallurgy and Solder Ball Attach (UBM apply) to be used for
bumped cube products as specified in Loral Specification drawing number 198A455.
ISC shall notify Loral two (2) weeks prior to UBM apply (per ISC nomenclature,
the V2 step). If ISC and Loral mutually agree that the UBM apply process is
ready, ISC shall proceed with the UBM apply. If ISC and Loral mutually agree
that the UBM apply process is not ready, Loral will accept the cubes at the V2
level and direct ISC to hold the V2 level cubes (i.e. those cubes which will be
fabricated prior to UMB apply) to be shipped in place at ISC's facilities in
Burlington, VT. After joint acceptance of qualification of the UBM apply
process, the bumped product will be delivered per Loral Specification drawing
number 198A445.
3. REQUIREMENTS/DATA
This is a rated order certified for national defense use, and Seller shall
follow all requirements of the Defense Priorities and Allocations System
Regulation (15 CFR Part 350). Seller accepts said rating unless rejected in
writing within 10 days if 'DO' rating, or 5 days if 'DX' rating from the date of
order receipt.
Government Contract Number F33657-88-C-4280 DPAS Rating DX-A2
Statement of Work Number 95-W58-062
Loral Specification Number 198A455
All drawings. specifications or other documents referenced in this Purchase
Order but not attached are incorporated and made a part by this reference.
<PAGE>
4. PERIOD OF PERFORMANCE AND/OR--DELIVERY SCHEDULE
Articles, services and/or data shall be delivered in accordance with the
delivery dates contained in Schedule A.
All articles, services and/or data shall be delivered to the following Buyer
location:
Loral Federal Systems Company
9500 Godwin Drive
Manassas, Va. 22110
A. Transportation Routing Guidelines;
1. Do not insure or declare value
2. Ship via Federal Express
3. FOB: Shipping Point
4. Transportation charges appearing on invoice must be supported by paid
freight bill or equivalent. See "Transportation' clause of attached 'LFSC
Terms and Conditions'.
B. Packing Slip
Seller shall submit a packing slip with each shipment of supplies against this
purchase Order/Release. At a minimum. the packing slip shall contain the
following information:
1) Purchase Order Number/Release Number
2) itemized list of supplies within the shipment
3) List of back-order items remaining to be delivered
4) Date of shipment
5. CONSIDERATION AND PAYMENT
BUYER'S TOTAL LIABILITY/OBLIGATION FUNDS
The total commitment of this Purchase Order is $6,289.743.00.
This Purchase Order shall be incrementally funded in accordance with the
attached Milestone Payment Schedule. The buyer's total liability shall be in
accordance with the attached Termination Liability Schedule.
initial funding in the amount of $1,772,782-00 is hereby provided for
efforts through 30 June 1996.
6. INVOICING
All invoice originals and one copy shall be submitted to the following
Loral Federal Systems Company (LFSC)
PO Box 190
Owego, NY 13827-0190
Attn: Accounts Payable
INVOICES
Each invoice . submitted for payment shall indicate complete Purchase Order
number and be set up in accordance with the line items specified in this
Purchase Order.
One copy of each invoice and all correspondence pertaining to this Purchase
Order shall be submitted to:
<PAGE>
Loral Federal Systems Company
9500 Godwin Drive
Manassas, VA 22110
Attn: Mr. Tim J. Bart
Building: 400
Mail Stop: 044
7. TERMS- AND CONDITIONS
This Purchase Order is subject to the following terms and conditions:
7.1 Certifications and Representations
7.2 LFSC Terms and Conditions, dated 07/94
7.2.1 Article 5, "SELLER PERFORMANCE" is deleted.
7.2.2 Article 10, 'TAXES' is amended as follows;
This purchase is exempt from sales tax due to resale: Loral Federal Systems
Company Virginia account number 001617306-1.
7.2.3 Article 11, 'PRICE' add at the end if this paragraph "at
similar quantities and timeframe.
7.2.4 Article 14, 'BUYER FURNISHED DATA AND MATERIALS" begin the
third sentence with unless otherwise agreed to by LFS.
7.2.5 Article 17, "CONFIDENTIAL INFORMATION" replace in its entirety with "All
confidential information shall be handled in accordance with the LFS/ISC
Confidential Disclosure Agreement Number 365-XX".
7.2.6 Article 23, "SUBCONTRACTORS" is amended as follows:
Seller shall not subcontract the work to be performed under this PO without
Buyer's consent in writing, but Seller may purchase goods or services it
normally purchases to perform the work.
7.2.7 Article 27, "MINORITY AND WOMEN-OWNED BUSINESSES" is deleted.
7.2.8 Article 29, "TERMINATION" is deleted.
7.2.9 Article 30, "INDEMNIFICATION FOR DEFECTIVE COST OR PRICING DATA" - All
cost and pricing data to be delivered to the U.S. Government directly.
7.2-10 Article 31, "TERMINATION FOR CONVENIENCE" is amended as follows:
Buyer shall have the right to terminate this PO in whole or in part for
convenience regardless of dollar value in accordance with the provisions of FAR
52.249-2 (Fixed Price), 52.249-6 (Cost Reimbursement) or 52.249-6, Alternate IV
(Time and Material or Labor Hour) specifically incorporated herein by reference,
modified, however, by deleting (i) thereof and further modified by deleting all
references to (1) year as specified in paragraph (d) or (e), substituting
therefor the period of six (6) months.
Buyer's total liability shall be in accordance with the Seller's Termination
Liability Schedule.
7.2.11 Article 32, "TERMINATION FOR DEFAULT" - item (d) is deleted and add at
the end of the last sentence, first paragraph, "not to exceed the amount
invoiced to date under this PO'.
7.2.12 Article 35, "RESIDENCE OF PERSONNEL" is deleted.
7.2.13 Article 37, 'QUALITY ASSURANCE' add as a second paragraph:
Loral will limit visits to Irvine to three (3) per quarter unless Loral feels
Irvine is experiencing
<PAGE>
production and/or delivery problems.
8. SPECIAL PROVISIONS
The following special provisions shall apply to this Purchase Order.
8.1 QUALITY CONTROL SYSTEM
(a) In accordance with the specification referenced in Paragraph 3,
Subcontractor shall provide and maintain a quality control system acceptable
to the Government and LFS-M for the supplies covered in this subcontract.
Subcontractor shall similarly require its subcontractors to provide and
maintain a quality control system acceptable to Subcontractor where
applicable.
(b) Subcontractor's quality control system will be subject to periodic audits by
representatives of LFS-M's Product Assurance organization. Such audits
shall not exceed I per year unless LFS and ISC agree that significant
quality problems exist.
8.2 APPROVALS BY LFS-M
Unless expressly stipulated elsewhere in this subcontract as being excepted from
this provision, wherever this subcontract provides for submittal of designs,
components, materials, processes, or other items for approval of LFS-M or other
authorized LFS-M representative, such approvals shall not be construed as a
complete check as to the adequacy of said design, materials, processes,
components or items, nor as an agreement that the design, materials processes,
components or items will meet the requirements of this subcontract. Such
approvals are for the purpose of insuring LFS-M knowledge of Subcontractor's
plans and progress and will indicate only that Subcontractor's general approach
toward meeting contractual requirements is satisfactory. Such approvals shall
in no way relieve Subcontractor of the responsibility for any error or
deficiency which may exist in the submitted design, component materials,
processes, or other item, and Subcontractor shall be responsible for meeting all
the requirements of this subcontract.
8.4 DELIVERY - ADVANCE MANUFACTURING OR PROCUREMENT
Delivery according to schedule is a major condition of this subcontract.
Subcontractor shall not, without LFS-M's prior written consent, manufacture or
procure materials in advance of Subcontractor's normal flow time or deliver in
advance of schedule. In the event of termination or change, no claim will be
allowed for any such manufacture or procurement in advance of subcontractor's
normal flow time unless there has been prior written consent to LFS-M. Unless
advance shipment has been authorized in writing by LFS-M. LFS-M may return,
shipping charges collect, all articles received in advance of schedule.
The subcontractor may with forty-five (45) day notice and with Loral written
approval, advance the production schedule to provide for early material
acquisition, fabrication and delivery. Loral shall provide ISC written approval
or disapproval within fifteen (15) days after receipt of ISC's notice.
8.4 RETENTION OF-RIGHTS AND INTEREST
LFS-M hereby retains all of its rights, title and interest in and to all
information, data, designs and inventions furnished by LFS-M to Subcontractor
for the purpose of assisting Subcontractor (i) in the performance of the
subcontract or (ii) in the submission of a bid by Subcontractor for such
performance, whether furnished prior to, or after acceptance of, this
subcontract. None of such information, data, designs and inventions shall be
reproduced or used by Subcontractor, except in the performance of this
subcontract, or disclosed by Subcontractors to others without the consent of
LFS-M. Upon completion of performance hereunder, all such information, data,
designs and inventions shall be promptly returned by Subcontractor to LFS-M.
8.5 SAFETY AND ACCIDENT PREVENTION
(a) in performing any work under this subcontract on premises which are under
the direct control of the Government, Subcontractor shall, and shall require
its lower-tier subcontractors to (i) conform to all safety rules and
requirements prescribed by the cognizant Government Agency,
<PAGE>
as in effect on the date of this subcontract and (ii) take such additional
precautions as LFS-M or the Government may reasonably require for safety and
accident prevention purposes. Subcontractor agrees to take all reasonable
steps and precautions to prevent accidents and preserve the life and health
of personnel performing or in any way coming in contact with the performance
of this subcontract on such premises.
(b) In performing work under this subcontract on LFS-M-owned or LFS-M-controlled
premises, Subcontractor shall, and shall require its lower tier
subcontractors to conform to the safety and health regulations of applicable
Federal, State and local Occupational Safety and Health Agencies as well as
those of LFS-M.
(c) Any violation of safety rules and regulations affecting work described in
(a) and (b) above which results in injury or death or which endangers life
or health of personnel shall be grounds for termination for default of this
subcontract.
(d) This subcontract will be equitably adjusted under the Changes Clause if
changes in safety regulations or requirements affecting work described in
(a) and (b) above occurring after the date of this subcontract affect costs,
delivery or other provisions of this subcontract.
8.6 PAYMENT AND INVOICE
(a) Subcontractor shall be paid for performance hereunder upon submission of
proper invoices or vouchers, the price stipulated herein for supplies
delivered and accepted or services rendered and accepted, less applicable
deductions, if any. Unless otherwise specified, payment will be made upon
delivery of any, portion of the work delivered or rendered for which a price
is separately stated in this subcontract. Each invoice submitted shall
indicate complete Purchase Order Number and be set up in accordance with the
line items specified in the Purchase order.
(b) Each invoice submitted by Subcontractor hereunder shall bear the following
certification signed by an officer or other. Authorized representative:
'I hereby certify that the payment herein requested is just and correct, and
that payment of the sum herein specified has not been received.
(c) Indication of any assignment of claim and of any further assignment thereof
together with the name(s) of such assignee(s) shall be made on all vouchers
or invoices submitted.
(d) The original and two copies of all invoices, certified by an official of
Subcontractor authorized by it to certify such statements, shall be
submitted for approval to the following!
Loral Federal Systems Company
P.O. Box 190
Owego, NY 13827-0190
Attn: Accounts Payable
At the same time, an additional copy shall be submitted to the LFS-M authorized
representative designated in the subcontract.
8.7 CERTIFICATION OF REQUESTS FOR ADJUSTMENT OR RELIEF EXCEEDING $100K
(a) If LFS-M submits to the Government any contract claim, request for equitable
adjustment to contract terms, request for relief under Public Law 85-804, or
other similar request exceeding $100,000 and such claim or request includes
or is based upon a claim or request exceeding $100,000 made by Subcontractor
to LFS-M, Subcontractor shall , at the request of LFS-M, submit the
following certificate executed by a company official in charge at
Subcontractor's plant or location involved:
"I certify that the claim is made in good faith, that the supporting data
are accurate and complete to the best of my knowledge and belief; and that
the amount requested accurately reflects the subcontract adjustment for
which the Subcontractor believes LFS-M is liable.',
(b) In conjunction with the certification in paragraph (a), Subcontractor shall
provide full disclosure
<PAGE>
of all relevant facts, including cost and pricing data.
(c) Subcontractor hereby agrees to defend, indemnify and hold harmless LFS-M,
its directors, officers, employees, agents and servants,, from and against
any claim, suit, loss, cost, damage or expense (including attorneys' fees)
arising out of, in connection with, or as a result of any claim or request
certified by
Subcontractor under this clause is fraudulent, overstated. or in violation
of any law or regulation.
(d) The rights and obligations provided herein shall survive termination,
completion, and final payment of this subcontract.
8.8 RESPONSIBILITY FOR SUPPLIES
Except as otherwise provided in this subcontract, Subcontractor shall (i) be
responsible for the supplies covered by this subcontract until they are
delivered at the designated delivery point, regardless of the point of
inspection; (ii) be responsible after delivery to LFS-H at the designated point
and prior to acceptance by LFS-M or rejection and giving notice thereof by LFS-
M, except that LFS-M shall be responsible for the loss or destruction of, or
damage to, the supplies only if such loss, destruction, or damage results from
the negligence of officers, agents, or employees of LFS-M, acting within the
scope of their employment; and (iii) bear all risk as to rejected supplies after
notice of rejection, except that LFS-M shall be responsible for the loss or
destruction of, or damage to the supplies only of such loss, destruction or
damage results from the gross negligence of officers, agents, or employees of
LFS-M acting within the scope of their employment.
8.9 WARRANTY
Subcontractor warrants that at the time of delivery thereof the supplies
provided for under this subcontract will be free of defects in material or
workmanship and will conform to the requirements of this subcontract. Notice of
any such defect or nonconformance shall be given by LFS-K to Subcontractor
within one year of the delivery of the defective or nonconforming supplies. If
required by LFS-M within a reasonable tin* after such notice, Subcontractor
shall with all possible speed correct or replace the defective or nonconforming
supplies or part thereof. When such correction or replacement requires
transportation of the supplies or part thereof, shipping costs, not exceeding
usual charges from the delivery point to Subcontractor's plant and return, shall
be borne by Subcontractor; LFS-M shall bear all other shipping costs. This
warranty shall then continue as to corrected or replaced supplies, or, if only
parts of such supplies are corrected or replaced, to such corrected or replaced
parts, until one year after the date of redelivery.
If LFS-M does not require correction or replacement of defective or
nonconforming supplies, Subcontractor, if required by LFS-M within a reasonable
time after notice of defect or nonconformance, shall limit any rights of LFS-M
under the Inspection Clause, including, but not limited to, the right thereunder
to require correction or replacement of supplies, at any time, on account of
latent defects, fraud, or, gross mistakes as amount to fraud.
8.10 SELLER MAINTAIN COMPLETE AND ACCURATE-ACCOUNTING
Applicable to the Fixed Price Level of Effort (Task D2) portion of this purchase
order, Seller shall maintain complete and accurate accounting records, in a form
consistent with standard accounting practices, to substantiate Seller's charges
hereunder. Such records shall include payroll records, records supporting
direct labor hours and material charges, job time cards. attendance cards and
job summaries. Seller shall retain such records for one (1) year from the date
of final payment hereunder or four (4) years if this order is placed under a
Government contract. Loral Federal Systems shall have access to such records
for the purposes of audit during normal business hours for the term of this
order and during the respective periods in which Seller is required to maintain
such records as herein provided.
9. ORDER OF PRECEDENCE
In the event of an inconsistency in this Purchase Order, unless other-wise
provided herein, the inconsistency shall be resolved by giving precedence in the
following order.
<PAGE>
a) Purchase Order Including Special Provisions
b) LFS Terms and Conditions
c) Statement of Work
d) Specifications
e) Subcontract Data Requirements List
f) All other documents
10. ACCEPTANCE
This Purchase Order is the entire agreement between Buyer and Seller- It
supersedes all prior agreements, oral or written and all other communications
relating to the subject matter of this Purchase Order.
Any items contained in Seller invoices, acknowledgments, shipping instructions
or other forms that are inconsistent with or different from this Purchase Order
shall be void and of no effect.
This Purchase Order is executed in duplicate originals as of the date specified
on page one.
Please sign and return this Purchase Order to Buyer within ten (10) working days
after receipt.
LFS Seller: IRVINE SENSORS CORPORATION
By: Tim J. Bart By:
Title: Subcontract Administrator Title:
Date: Date:
<PAGE>
EXHIBIT 11
EXHIBIT 11 - STATEMENT RE COMPUTATION OF PER SHARE EARNINGS.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
----------------------------------------------------------------------------
September 29, October 1, October 2, October 3, September 27,
1996 1995 1994 1993 1992
------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net loss $(11,518,000) $(3,035,800) $(2,463,900) $(1,507,600) $ (895,800)
Cumulative dividends
on Preferred Stock (28,800) (31,000) (33,200) (31,400) (32,000)
------------ ----------- ----------- ----------- -----------
$(11,546,800) $(3,066,800) $(2,497,100) $(1,539,000) $ (927,800)
============ =========== =========== =========== ===========
Common Stock:
Shares outstanding at
beginning of period 15,566,755 14,710,713 13,152,534 12,608,128 10,495,386
Pro rata shares:
Shares sold - 63,033 887,870 - 692,308
Shares issued to employee
stock bonus trust 28,797 29,703 14,893 8,105 103,211
Stock options and
warrants exercised 222,792 104,320 86,236 236,638 125,261
Convertible bonds converted
to Common Stock 1,043,506 - - - -
Preferred Stock converted
to common stock 12,420 58,692 - 12,916 14,762
------------ ----------- ----------- ----------- -----------
Weighted average number
of common and common
equivalent shares
outstanding 16,874,270 14,966,461 14,141,533 12,865,787 11,430,928
============ =========== =========== =========== ===========
Net loss per share $ (0.68) $ (0.20) $ (0.18) $ (0.12) $ (0.08)
============ =========== =========== =========== ===========
</TABLE>
<PAGE>
EXHIBIT 13
IRVINE SENSORS CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Except for historical information contained herein, this Report contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The
forward-looking statements contained herein are subject to certain risks and
uncertainties, including such factors, among others, as the pace at which new
markets develop, the ability of the Company to introduce new products and ramp
up manufacturing in a timely manner while controlling its operating expenses
and the response of competitors, many of whom are bigger and better financed
than the Company. In addition, the scope of the Company's growth plan may
introduce unanticipated risks and financial requirements. The availability of
external financing for the Company's plan cannot be assured and is subject to
numerous factors including those unrelated to the Company's performance such as
economic and market conditions. Further, the Company's financial performance
prior to substantial growth in revenues may not permit additional equity
financing and may place at risk the continuation of its long-term debt
financing because of inability to achieve financial covenants. Accordingly,
investors are advised to assess forward-looking statements contained herein
with caution. Additional information on various risks and uncertainties
potentially affecting the Company's results are contained in publicly filed
disclosures available through the Securities Exchange Commission EDGAR database
(www.sec.gov) or from the Company's Investor Relations.
RESULTS OF OPERATIONS
FISCAL YEAR ENDED SEPTEMBER 29, 1996 vs.
FISCAL YEAR ENDED OCTOBER 1, 1995
The Company continued in fiscal 1996 with record-setting revenues of
$12,024,200, which represents a 50 percent increase from fiscal 1995. The
growth in revenues was primarily attributable to increases in shipments of
products from the Company's Computer Products Operations (CPO) in Vermont and,
to a lesser extent, shipments of the Company's new serial infrared
communications chip (SIRComm) from the Company's subsidiary, Novalog, Inc. The
SIRComm chip has continued to gain market acceptance since its introduction in
late fiscal 1995. The increase in shipments from CPO was a result of
substantial increases in bookings that began in the second half of fiscal 1995
combined with the continued ramp-up in production of stacked memory products
achieved during fiscal 1996. The increase in product revenues was offset
slightly by a decrease in contract revenues which was primarily attributable to
procurement delays related to the Company's Advanced Technology Operations
(ATO). ATO, which is largely dependent on contracts from the U.S. government's
military agencies and subcontracts from major government contractors, continued
to be adversely impacted during fiscal 1996 by delays in contracts funding and
awards caused by the federal government's budget crisis earlier in the year.
The Company anticipates some delays in contract funding and awards to be
rectified in the first quarter of fiscal 1997.
Other revenues were derived from a license agreement with Unitrode
Corporation which involves the transfer of technology allowing Unitrode to
produce Novalog's SIRComm chip.
Cost of revenues percent as compared to 90 percent in fiscal year 1995. The
increase was attributable to the Company's inability to absorb additional
indirect costs incurred while it ramped up its revenue-generating capacities
during fiscal 1996. A substantial escalation of overhead costs occurred at CPO
as a result of the IBM cubing line acquisition and facility lease, the
completion of the joint development activities with IBM to commercialize the
Company's chip-stacking technology, and from efforts to ramp up production of
stacked memory products to meet existing backlog requirements and projected
bookings. After management's review of the existing backlog of orders and the
anticipated cost to complete such orders at CPO, the Company established a
reserve at September 29, 1996 for the estimated loss upon completion of these
orders. The accrued loss has been recorded as a reduction of the inventory
valuation at September 29, 1996. Funding delays on existing contracts and the
delays in obtaining new contracts created under-absorbed costs at ATO. The
increase in costs of revenues was offset slightly by Novalog's improved margins
experienced during fiscal 1996 attributable to efficiencies realized from the
increase in shipments of its SIRComm chip. The Company anticipates the cost of
revenues ratio to improve during fiscal 1997 at CPO resulting from anticipated
manufacturing efficiencies and at ATO attributable to improved backlog of funded
research and development contracts.
The Company increased its expenditure in research and development by
$729,700 or 57 percent compared to fiscal 1995. The increase was primarily
attributable to efforts directed at developing new products.
During fiscal 1996, the Company experienced growth in its administrative
infrastructure in conjunction with the increase in business activity and the
anticipation of future growth driven by the transition to a products-based
company. General and Administrative (G&A) expense increased $1,497,400 compared
to fiscal 1995. As a percentage of revenues, G&A was 34 percent in fiscal 1996
compared to 32 percent in fiscal 1995. The increase in G&A expense is primarily
attributable to additional marketing costs associated with promoting the
Company's products and efforts directed toward obtaining new
<PAGE>
research and development contract awards. In addition, the Company incurred non-
recurring legal expense in connection with the IBM cube line acquisition and
facility lease, its financing activities, and in the incorporation of its
subsidiary, Novalog, Inc.
Interest expense increased $413,900 during fiscal 1996 compared to fiscal
1995. The increase in interest expense was primarily attributable to interest
incurred on subordinated debenture bonds (see Note 6 of Notes to Consolidated
Financial Statements) and, to a lesser extent, interest on capital lease
obligations incurred primarily during fiscal 1995. Interest income increased
slightly from fiscal 1995 as a result of additional cash and cash equivalents
held in deposits during fiscal 1996 which were obtained from the financing
activities discussed above.
Net loss for fiscal 1996 was $11,518,000 compared to $3,035,800 in fiscal
1995 and net loss per share went from ($0.20) per share in fiscal 1995 to
($0.68) per share in fiscal 1996.
FISCAL YEAR ENDED OCTOBER 1, 1995 vs.
FISCAL YEAR ENDED OCTOBER 2, 1994
Another year of record revenues of $8,041,400 showed a 57 percent increase
over fiscal 1994. Fiscal 1995 saw the introduction of the Company's new serial
infrared communications chip (SIRCommTM) with production volumes shipped to
major manufacturers occurring primarily in the fourth fiscal quarter.
Production quantities of Memory Short StacksTM from the Company's Computer
Products Operations in Vermont were also shipped throughout fiscal 1995 to
major manufacturers in the aerospace and commercial industries. In addition to
the growth experienced by the Company's products-based operations, the
Company's core contract research and development operation continued to
experience substantial increases from efforts on existing contracts and from
several large contracts obtained during fiscal 1995 which included revenues
from the delivery of custom chip stacks.
Cost of revenues remained substantially unchanged from fiscal 1994 at 90
percent of revenues. There were no major changes in the cost structure of the
contract research and development operation, while cost of revenues as a
percent of revenues decreased at the Computer Products Operation primarily due
to lower start-up and training costs during 1995 as the operation became more
efficient. Start-up costs of the SIRComm operation, which have been expensed,
were a major contributor to the high cost of sales percent of revenues, but by
September these costs had been absorbed and the unit was performing up to the
Company's expectations.
The Company increased its research and development (R&D) expenditures by
$435,700 or 52 percent over last year's expenditures. This increase reflects
the Company's resolve to maintain its competitive advantage by developing new
products and advancing its core technology. As a percent of revenues, R&D
remained consistent with fiscal 1994 at 16 percent of revenues.
General and Administrative expenses increased $222,500. However, as a
percent of revenues, they decreased to 32 percent in fiscal 1995 from 45
percent in fiscal 1994. The increase in G&A consisted primarily of additional
labor costs required to handle the growth in business activity.
The Company's financial condition continues to reflect the impact of its
significant growth in operations as evidenced by the increases in accounts
receivable, inventory and accounts payable. Inventory in particular was
impacted by the growth in backlog at the Computer Products Operation for Memory
Short Stacks and, to a lesser extent, anticipated sales of custom chip stacks
by the California facility. The Company invested approximately $3.1 million in
capital facilities and equipment (including $395,800 of capital lease
obligations) which were required to achieve and sustain the growth in
operations.
During July and August 1995, the Company raised approximately $4.2 million
in private financings from institutional and corporate investors in Canada and
Europe through the sale of approximately 382,100 shares of common stock and
$2.25 million of convertible subordinated debenture bonds (see
Notes 2 and 6 of Notes to Consolidated Financial Statements).
LIQUIDITY, CAPITAL RESOURCES AND IMPACT OF CHANGING PRICES
During fiscal 1996, the Company raised approximately $13.8 million (net of
related expenses) from financing activities which included the issuance of
$11.6 million 8 percent convertible subordinated debentures (see Note 6 of
Notes to Consolidated Financial Statements) and a $3 million bank loan (see
Note 9 of Notes to Consolidated Financial Statements). In addition, during
September 1996, the Company received a subscription of $0.5 million to purchase
a 5 percent minority interest in its subsidiary, Novalog, Inc. During the first
half of fiscal 1997, the Company anticipates the issuance of up to an
additional $2.5 million of common stock in Novalog for a total of a 30 percent
minority interest. The primary uses of cash and cash equivalents during fiscal
1996 were for capital facilities and equipment expenditures, funding of the
Company's net loss, and
<PAGE>
the buildup of work-in-process inventory. The Company invested approximately
$8.5 million in capital facilities and equipment, which included the acquisition
of the IBM cubing line with an approximate $6.5 million cash payment to IBM. The
Company is anticipating the current rate of capital expenditures (excluding the
IBM transaction) to decrease in the immediate future. The approximate $1.5
million increase in inventory resulted from the growth in backlog at CPO and
production of custom chip stacks by ATO. An approximate $1 million increase in
deferred revenues slightly offset the cash used for operations which represented
advanced customer payments received for CPO products scheduled for delivery in
the second half of fiscal 1997.
At September 29, 1996, the Company had cash and cash equivalents of
$1,954,000, working capital of $3,861,100 and a current ratio of 1.7 to 1. The
Company anticipates that the existing working capital and its projected
operating results will be sufficient to meet its cash requirements for the
immediate future. However, the Company's expansion of its Vermont operation has
materially increased its operating and working capital requirements. The
Company has undertaken this expansion with the expectation that revenues will
grow due to increased orders for its stacked memory products. There can be no
assurances that such increased orders will be forthcoming, and failure to
achieve such revenue growth would adversely affect the Company's results of
operations and its liquidity and capital resources.
At September 29, 1996, the Company's funded backlog was approximately
$6,063,400 compared to $5,506,900 at October 1, 1995. In addition, existing
contracts include a small amount of unfunded backlog which typically is funded
when the previously funded amounts have been expended.
<PAGE>
Irvine Sensors Corporation
Consolidated Balance Sheet
<TABLE>
<CAPTION>
September 29, October 1,
1996 1995
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,954,000 $ 4,367,100
Accounts receivable,
net of allowances
of $10,000 3,023,900 2,388,000
Inventory 4,386,700 2,930,900
Prepaid expenses 283,600 241,500
- ---------------------------------------------------------------------------
Total current assets 9,648,200 9,927,500
- ---------------------------------------------------------------------------
Equipment, furniture and
fixtures, net 11,906,700 5,649,600
Other assets 187,300 32,100
- ---------------------------------------------------------------------------
$ 21,742,200 $ 15,609,200
- ---------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,197,800 $ 1,302,500
Accrued expenses 936,100 671,500
Deferred revenue 2,382,600 1,365,000
Notes payable and current
portion of long-term debt 270,600 206,400
- ---------------------------------------------------------------------------
Total current liabilities 5,787,100 3,545,400
- ---------------------------------------------------------------------------
Long-term debt 2,809,900 78,000
Deferred royalties payable -
affiliated company 355,700 123,200
Convertible subordinated debentures 3,400,000 2,250,000
Preferred stock of consolidated
subsidiary 118,500 118,500
Subscription to acquire interest
in subsidiary 500,000 -
Long-term accrued expenses 458,300 -
SHAREHOLDERS' EQUITY:
Preferred stock, $0.01 par value,
500,000 shares authorized;
8,833 shares Series B Convertible
Cumulative Preferred outstanding;
aggregate liquidation preference of
$225,200 50 100
5,178 shares Series C Convertible
Cumulative Preferred outstanding;
aggregate liquidation preference of
$248,500 50 100
Common stock, $0.01 par value,
40,000,000 shares authorized;
18,710,000 and 15,566,800 shares
issued and outstanding 187,100 155,700
Common stock warrants; 239,200
and 126,900 issued and outstanding - -
Paid-in capital 37,331,000 27,025,700
Accumulated deficit (29,205,500) (17,687,500)
- ---------------------------------------------------------------------------
Total shareholders' equity 8,312,700 9,494,100
- ---------------------------------------------------------------------------
$ 21,742,200 $ 15,609,200
- ---------------------------------------------------------------------------
</TABLE>
<PAGE>
IRVINE SENSORS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Fiscal Year Ended
September 29, October 1, October 2,
1996 1995 1994
<S> <C> <C> <C>
Revenues $ 11,898,200 $ 7,877,000 $ 4,918,700
Other 126,000 164,400 220,700
- -----------------------------------------------------------------------------------------------------------------------
Total revenues 12,024,200 8,041,400 5,139,400
- -----------------------------------------------------------------------------------------------------------------------
Costs and expenses:
Cost of revenues 17,137,600 7,298,700 4,612,900
General and administrative 4,031,600 2,534,200 2,311,700
Research and development 2,009,700 1,280,000 844,300
- -----------------------------------------------------------------------------------------------------------------------
23,178,900 11,112,900 7,768,900
- -----------------------------------------------------------------------------------------------------------------------
Loss from operations (11,154,700) (3,071,500) (2,629,500)
Interest expense (469,800) (55,900) (7,100)
Interest income 108,300 92,600 173,500
- ----------------------------------------------------------------------------------------------------------------------
Loss before provision for income taxes (11,516,200) (3,034,800) (2,463,100)
Provision for income taxes 1,800 1,000 800
- ----------------------------------------------------------------------------------------------------------------------
Net loss $(11,518,000) $(3,035,800) $(2,463,900)
- ----------------------------------------------------------------------------------------------------------------------
Net loss per common and
common equivalent share $ (0.68) $ (0.20) $ (0.18)
- ----------------------------------------------------------------------------------------------------------------------
Weighted average number of
shares outstanding 16,874,300 14,966,500 14,141,500
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
<PAGE>
IRVINE SENSORS CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock Common Stock Preferred Stock
Shares Issued Warrants Issued Shares Issued
------------- ---------------------------------- Total
Shareholders' Paid-in Accumulated
Number Amount Number Amount Number Amount Capital (Deficit) Equity
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at October 3, 1993 13,152,500 $131,500 155,000 $ - 16,190 $200 $15,033,500 $(12,187,800) $ 2,977,400
Stock options exercised 127,900 1,300 - - - - 21,900 - 23,200
Common stock issued to
employee retirement plan 43,200 400 - - - - 356,900 - 357,300
Sale of common stock 1,362,100 13,600 - - - - 7,844,500 - 7,858,100
Common stock warrants issued - - 161,200 - - - - - -
Common stock warrants
exercised 25,000 300 (25,000) - - - 48,000 - 48,300
Net loss - - - - - - - (2,463,900) (2,463,900)
Balance at October 2, 1994 14,710,700 $147,100 291,200 $ - 16,190 $200 $23,304,800 $(14,651,700) $ 8,800,400
Stock options exercised 103,100 1,000 - - - - 219,900 - 220,900
Common stock issued to
employee retirement plan 68,000 700 - - - - 471,600 - 472,300
Sale of common stock 382,100 3,800 - - - - 1,933,500 - 1,937,300
Common stock warrants issued - - 79,700 - - - - - -
Common stock warrants
exercised 244,000 2,500 (244,000) - - - 1,096,500 - 1,099,000
Series B and Series C preferred
stock converted to common
stock 58,900 600 - - (1,177) - (600) - -
Net loss - - - - - - - (3,035,800) (3,035,800)
Balance at October 1, 1995 15,566,800 $155,700 126,900 $ - 15,013 $200 $27,025,700 $(17,687,500) $ 9,494,100
Stock options exercised 257,100 2,600 - - - - 209,100 - 211,700
Common stock issued to
employee retirement plan 172,900 1,700 - - - - 685,700 - 687,400
Common stock warrants issued - - 222,000 - - - - - -
Common stock warrants
exercised 109,700 1,100 (109,700) - - - 293,400 - 294,500
Series B and Series C preferred
stock converted to common
stock 50,100 500 - - (1,002) (100) (400) - -
Convertible debentures
converted to common stock 2,553,400 25,500 - - - - 9,117,500 - 9,143,000
Net loss - - - - - - - (11,518,000) (11,518,000)
Balance at September 29, 1996 18,710,000 $187,100 239,200 $ - 14,011 $100 $37,331,000 $(29,205,500) $ 8,312,700
</TABLE>
<PAGE>
Irvine Sensors Corporation
Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
Fiscal Year Ended
September 29, October 1, October 2,
1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 11,388,300 $ 7,237,900 $ 4,506,100
Cash paid to suppliers and employees (19,008,200) (10,457,200) (6,384,800)
Interest received 108,300 92,600 173,500
Interest paid (469,800) (55,900) (7,100)
Income taxes paid (1,800) (1,000) (800)
Net cash used in operating activities $ (7,983,200) $(3,183,600) $(1,713,100)
Cash flows from investing activities:
Marketable securities, at cost - 4,447,500 (4,447,500)
Capital facilities and equipment expenditure (8,525,200) (3,105,500) (2,334,000)
Net cash used in investing activities (8,525,200) 1,342,000 (6,781,500)
Cash flows from financing activities:
Principal payments under notes payable and
capital lease obligations (217,100) (131,600) (74,000)
Proceeds from issuance of long-term debt 3,013,200 395,800 3,700
Proceeds from issuance of convertible
subordinate debentures 10,293,000 2,250,000 -
Subscription to acquire interest in subsidiary 500,000
Proceeds from issuance of common stock and
common stock warrants 506,200 3,257,200 7,929,600
Net cash provided by financing activities 14,095,300 5,771,400 7,859,300
Net increase (decrease) in cash and cash equivalents (2,413,100) 3,929,800 (635,300)
Cash and cash equivalents at beginning of year 4,367,100 437,300 1,072,600
Cash and cash equivalents at end of year $ 1,954,000 $ 4,367,100 $ 437,300
Reconciliation of net loss to net cash used in operating activities:
Net loss $(11,518,000) $(3,035,800) $(2,463,900)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization $ 2,268,100 $ 1,004,600 $ 535,700
Common stock issued to employee
retirement plan 687,400 472,300 357,300
(Increase) in accounts receivable (635,900) (803,500) (633,300)
(Increase) in inventory (1,455,800) (2,677,800) (227,600)
(Increase) decrease in prepaid expenses (42,100) (168,400) 13,500
(Increase) in other assets (155,200) (20,900) -
Increase in accounts payable and accrued
expenses 1,159,900 828,000 497,500
Increase in deferred revenue 1,017,600 1,174,200 190,800
Increase in accrued rent 458,300 - -
Increase in royalties accrued - affiliated
company 232,500 43,700 16,900
Total adjustments 3,534,800 (147,800) 750,800
Net cash used in operating activities $ (7,983,200) $(3,183,600) $(1,713,100)
Noncash investing and financing activities:
Common stock issued to employee retirement
plan $ 687,400 $ 72,300 $ 357,300
Capitalized lease obligations $ 3,200 $ 395,800 $ 3,700
Conversion of debentures to common stock $ 10,450,000 $ - $ -
</TABLE>
<PAGE>
Irvine Sensors Corporation
Notes to Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Policies
CONSOLIDATION
The consolidated financial statements include the accounts of Irvine Sensors
Corporation (the "Company") and its subsidiaries, Novalog, Inc. and Carson
Alexiou Corporation ("CAC"). All significant intercompany transactions and
balances have been eliminated in consolidation.
FISCAL YEAR
The Company's fiscal year ends on the Sunday nearest September 30. Fiscal
1996 (52 weeks) ended on September 29, 1996, fiscal 1995 (52 weeks) ended on
October 1, 1995, and fiscal 1994 (52 weeks) ended on October 2, 1994.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
REVENUES
The Company's revenues include shipments of functional memory stacks from
its Vermont facility, shipments of the SIRComm infrared chip and from prototype
development and manufacture of sample products for its customers. The Company
continues to contract to develop prototypes and provide research, development,
design, testing and evaluation of complex detection and control defense
systems. The Company's R&D contracts are usually cost plus fixed fee (best
effort) or fixed price and revenues are recognized as costs are incurred and
include applicable fees or profits primarily in the proportion that costs
incurred bear to estimated final costs. Production orders for memory stacks and
SIRComm chips are generally priced in accordance with the Company's established
price list.
The Company provides for anticipated losses on contracts by a charge to
income during the period in which they are first identified. Unbilled accounts
receivable are stated at estimated realizable value.
United States government contract costs, including indirect costs, are
subject to audit and adjustment by negotiations between the Company and
government representatives. Indirect contract costs have been agreed upon
through fiscal 1994. Contract revenues have been recorded in amounts which are
expected to be realized upon final settlement.
Other revenues in the fiscal years 1995 and 1994 were derived from a license
agreement with IBM wherein the Company and IBM jointly developed certain of the
Company's technology and products. In addition, other revenues in fiscal 1996
and 1995 were derived from a licensing agreement with Unitrode to transfer
technology required to produce the Company's SIRComm chip. (See Note 14 -
Technology Licenses.)
RESEARCH AND DEVELOPMENT COSTS
A major portion of the Company's operations is comprised of customer-funded
research and prototype development or related activities. The Company also
incurs costs in research and development of new concepts in proprietary
products. Such costs are charged to expense as incurred.
INVENTORY
Inventory is valued at the lower of cost or market. Cost is determined by
the first-in, first-out (FIFO) basis.
EQUIPMENT, FURNITURE AND FIXTURES
The Company capitalizes costs of additions to equipment, furniture and
fixtures, together with major renewals and betterments. In addition, the
Company capitalizes overhead and General and Administrative costs for all
in-house capital projects. Maintenance, repairs, and minor renewals and
betterments are charged to expense. When assets are sold or otherwise disposed
of, the cost and related accumulated depreciation are removed from the accounts
and any resulting gain or loss is recognized.
Depreciation of equipment, furniture and fixtures is provided over the
estimated useful lives of the assets, primarily using the straight-line method.
The useful lives are three to seven years.
Expenditures for repairs and maintenance were $369,500, $210,800 and
$113,900 in fiscal years 1996, 1995 and 1994, respectively.
<PAGE>
INCOME TAXES
Taxes are provided, at the appropriate rates, for all taxable items included in
the statement of operations regardless of the period in which such items are
reported for tax purposes. Investment tax credits are accounted for under the
"flow through" method, whereby the benefit is recognized in the year in which
the credit is realized.
EARNINGS PER SHARE
Computations of primary earnings per share are based on the weighted average
number of shares of common stock outstanding, including dilutive stock options,
convertible preferred stock and common stock warrants where applicable.
STATEMENT OF CASH FLOWS
For purposes of the Consolidated Statement of Cash Flows, the Company
considers all demand deposits and Certificates of Deposit with original
maturities of 90 days or less to be cash equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts reported in the balance sheet for cash, accounts
receivable, accounts payable, and other liabilities approximate the fair value
due to the short-term nature of these instruments.
ACCOUNTING FOR STOCK-BASED COMPENSATION
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123), which establishes financial accounting and reporting
standards for stock-based employee compensation. Under SFAS 123, companies are
encouraged, but not required, to adopt a method of accounting for stock
compensation awards based upon the estimated fair value at the date the
options/awards are granted as determined through the use of a pricing model
(the "Fair Value Method"). Companies continuing to account for such awards in
accordance with the existing guidance of Accounting Principles Board Option No.
25, "Accounting for Stock Issued to Employees" (APB 25), will have to disclose
in the Notes to the Consolidated Financial Statements the pro forma impact on
net income and net income per share had the Company utilized the Fair Value
Method. This statement will be effective for the Company in fiscal year 1997.
The Company anticipates accounting for future stock compensation awards in
accordance with APB 25 with the appropriate footnote disclosure required under
SFAS 123.
Note 2 - Issuance of Common Stock and Series A Preferred Stock
During fiscal 1994, the Company issued 127,900 shares of common stock to
eight employees, one of whom is a director, and four non-employee directors
upon exercise of options and warrants granted under the Company's Stock Option
Plans. The net proceeds of approximately $23,200 were added to the Company's
general funds.
In February 1994, the Company completed the sale of approximately 1.36
million unregistered shares of the Company's common stock in a private
financing to institutional and corporate investors in Canada and Europe. After
regulatory requirements were met by holders of these securities, restrictive
legends on these shares were removed and the shares could then be traded
without restrictions. The net proceeds of approximately $7.9 million were added
to the Company's general funds. There are no restrictions on the use of these
funds.
In August 1995, the Company completed the sale of approximately 382,100
unregistered shares of the Company's common stock in a private financing
pursuant to Regulation S to institutional and private investors in Canada and
Europe. The Company agreed to use its best efforts to register these shares for
subsequent resale by the holders thereof. After regulatory requirements were
met by holders of these securities, restrictive legends on these shares were
removed and the shares could then be traded without restrictions. The net
proceeds of approximately $1.9 million were added to the Company's general fund.
During fiscal 1995, the Company issued 103,100 shares of common stock to ten
employees and one non-employee director upon exercise of options granted under
the Company's Stock Option plans. Net proceeds of $220,900 were added to the
Company's general fund.
During fiscal 1996, the Company issued 257,100 shares of common stock to
seven employees, two of whom are officers and one officer-director, and three
non-employee directors upon exercise of options granted under the Company's
Stock Option Plans. Net proceeds of $211,700 were added to the Company's
general fund.
In conjunction with the fiscal 1995 private financing of $2.25 million of 8
percent convertible subordinated debentures (the "1995 Debentures"), the
Company issued an additional $500,000 of 1995 Debentures in October 1995 to
institutional investors in Europe. The gross proceeds less expenses were added
to the Company's general funds. During fiscal 1996, the Company, at the request
of bond holders, converted the entire $2.75 million of outstanding 1995
Debentures at varying rates
<PAGE>
into 509,400 shares of the Company's common stock, which were subsequently
registered and may be traded without restrictions.
In a private financing during February and March 1996, the Company issued
$11.1 million of 8 percent convertible subordinated debentures due in 1998 (the
"1996 Debentures") to institutional and private investors in Canada and Europe.
The 1996 Debentures are convertible into shares of common stock at varying
rates which are contingent upon the closing bid prices of the common stock. The
Company has the right to demand conversion of the 1996 Debentures at any time
after March 1997. Interest is payable semiannually on January 31 and July 31 of
each year. The 1996 Debentures are subordinated to prior payment of bank
indebtedness of the Company. The gross proceeds less expenses were added to the
Company's general funds. In May 1996, the Company filed a registration
statement covering 2,997,000 shares, the approximate number of shares estimated
to underly the 1996 Debentures based on the then projected trading range of the
Company's stock. As of the date hereof, said adjustment would require the
additional registration of approximately 1,800,000 shares of common stock.
During the second half of fiscal 1996, the Company, at the request of bond
holders, converted $7.7 million of outstanding 1996 Debentures at varying rates
into 2,044,000 shares of the Company's common stock which may be traded without
restriction.
Note 3 - Common Stock Warrants
In July 1992, the Company consummated a public offering of 750,000 shares of
common stock and granted the Underwriter an option to purchase up to 112,500
additional shares of common stock to cover over allotments. In connection with
this offering, the Company granted to the Underwriter warrants to purchase up
to 75,000 shares of common stock at a price of $5.10 per share which was 120
percent of the initial public offering price of the shares. The warrants are
exercisable during the four-year period beginning July 9, 1993 and expiring
July 8, 1997. During fiscal 1995, 57,800 of these warrants were exercised and
17,200 remain outstanding.
In February 1992, the Company granted a warrant to its legal counsel to
purchase 25,000 unregistered shares of common stock at a price of $1.3125 in
connection with services rendered. The warrant was exercised in March 1994 and
the proceeds were added to the Company's general funds.
In February 1993 and July 1993, the Company granted warrants to two
consultants to purchase 25,000 and 30,000 unregistered shares of common stock
at prices of $4.72 and $8.875 per share, respectively, in connection with
services rendered. The shares underlying these warrants were registered in
fiscal 1995 and the prices reduced to $4.50 per share. The warrant for 25,000
shares was exercised in fiscal 1995 and the warrant for 30,000 shares was
exercised in fiscal 1996.
In connection with the February 1994 sale of approximately 1.36 million
shares of common stock to investors in Canada and Europe, the Company granted
to the foreign investment banker, warrants to purchase up to 136,200 shares of
common stock at an average price of $8.23 per share. In fiscal 1995, the price
was reduced to $4.50 per share and the warrants were exercised.
In February 1994, the Company granted a warrant to its legal counsel to
purchase 25,000 unregistered shares of common stock at a price of $8.75 per
share in connection with services rendered. In fiscal 1995, the price was
reduced to $4.50 per share and the warrant was exercised.
In connection with the August 1995 sale of approximately 382,100 shares of
common stock and the issuance of approximately $2.75 million of the 1995
Debentures, the Company granted to the foreign investment banker warrants to
purchase up to approximately 79,700 shares of common stock at prices ranging
from $7.47 to $8.33 per share. In fiscal 1996, the price was reduced to $2.00
per share and the warrants were exercised. The net proceeds of $294,500 were
added to the Company's general fund.
In connection with the sale of $11.1 million of the 1996 Debentures in
February and March 1996, the Company granted warrants to the foreign investment
banker to purchase up to 222,000 shares of common stock at a price to be
determined based on the average conversion prices of the1996 Debentures. The
warrants are exercisable beginning March 1997.
As of September 29, 1996, there are a total of 239,200 warrants outstanding
of which 17,200 expire in July 1997 and 222,000 expire in March 2001.
Note 4 - Series B and Series C Convertible Preferred Stocks
The Series B and Series C Convertible Cumulative Preferred Stocks, which
were originally issued to the Company's Employee Retirement Plan, each bear a
10 percent cumulative annual dividend, which under Delaware law may generally
be paid only out of (i) retained earnings or (ii) net profit in the current or
preceding fiscal year. To the extent that the dividends are not declared and
paid in any fiscal year, the obligation carries over to the next fiscal year.
These shares of Series B and
<PAGE>
Series C Convertible Cumulative Preferred Stocks are not redeemable, carry a
liquidation preference over the common stock of $15.00 and $30.00, respectively,
per share and are convertible, at the option of the holder, into 50 shares of
common stock for each share of Series B and Series C Convertible Cumulative
Preferred Stock, respectively. Distributions of vested benefits made from the
Plan to former employees and the subsequent surrender and conversion into shares
of common stock are as follows:
<TABLE>
<CAPTION>
Preferred Stock Common
Series B Series C Stock
_______________________________________
<S> <C> <C> <C>
Distribution dates:
October 1994 880 297 58,900
March 1996 522 480 50,100
_______________________________________
1,402 777 109,000
_______________________________________
_______________________________________
</TABLE>
The shares of Preferred Series B and Series C, respectively, tendered for
conversion have been retired.
Undeclared dividends of $92,700 and $93,200 on the remaining outstanding
Preferred Series B and Series C, respectively, will be carried forward to
fiscal 1997.
Note 5 - Preferred Stock of Consolidated Subsidiary
The preferred stock outstanding represents an ownership interest in CAC by
former employees and an Employee Stock Bonus Plan (ESBP) which CAC had formed.
The preferred stock has a $100 par value and there are 1,400 shares authorized
and 1,185 shares issued and outstanding. There are no conversion rights or
liquidation preferences of this preferred stock which extend to the common
stock of the Company.
Note 6 - Convertible Subordinated Debentures
In July, August and October 1995, the Company issued in a private financing
$2.75 million of 8 percent convertible subordinated debentures (the "1995
Debentures") due in 1997 to institutional and private investors in Canada and
Europe. The 1995 Debentures were convertible into shares of common stock at
$6.50 per share, subject to adjustment under certain conditions. The Company
had the right to demand conversion of the 1995 Debentures at any time after
July 31, 1996. Interest was payable semi-annually on January 31 and July 31 of
each year. The 1995 Debentures were subordinated to prior payment of bank
indebtedness of the Company. The gross proceeds less expenses were added to the
Company's general funds. The Company registered the shares underlying the 1995
Debentures and in fiscal 1996 the 1995 Debentures were converted into 509,400
shares of the Company's common stock.
In a private financing during February and March 1996, the Company issued
$11.1 million of 8 percent convertible subordinated debentures due in 1998 (the
"1996 Debentures") to institutional and private investors in Canada and Europe.
The 1996 Debentures are convertible into shares of common stock at varying
rates which are contingent upon the closing bid prices of the common stock. The
Company has the right to demand conversion of the 1996 Debentures at any time
after March 1997. Interest is payable semiannually on January 31 and July 31 of
each year. The 1996 Debentures are subordinated to prior payment of bank
indebtedness of the Company. The gross proceeds less expenses were added to the
Company's general funds. In May 1996, the Company filed a registration
statement covering 2,997,000 shares, the approximate number of shares estimated
to underly the 1996 Debentures based on the then projected trading range of the
Company's stock. As of the date hereof, said adjustment would require the
registration of approximately 1,800,000 additional shares of common stock.
During the second half of fiscal 1996, the Company, at the request of bond
holders, converted $7.7 million of outstanding 1996 Debentures at varying rates
into 2,044,000 shares of the Company's common stock.
Note 7 - Related Party Transactions
In April 1980, the Company entered into an agreement with R & D Leasing Ltd.
("RDL"), a limited partnership in which the Company's CEO and a Senior
Vice-President are general partners with beneficial interests, to design an
electronic circuit, to develop certain fabrication processes and to build
equipment for testing electronic integrated circuits. In connection with the
development of the electronic test equipment under the RDL agreement, certain
other proprietary fabrication processes were developed to which RDL retained
ownership. Upon the occurrence of certain specified events, such as the use of
patented fabrication processes in connection with contracts, the agreement with
RDL provides that the Company will pay RDL a royalty fee of 3.5 percent of
revenues from sales of the basic devices using the processes created during the
development of this equipment. In June 1989, the Board of Directors approved an
agreement with RDL whereby $40,000 of royalty fees was converted to a long-term
note payable and a warrant to purchase shares of the Company's common stock.
The note was unsecured, bore no interest and had a due date of June 30, 1995.
The warrant to purchase 200,000 shares of common stock at $0.20 per share had
an expiration date of June 30, 1995. In October 1989, the Board of Directors
approved an amendment
<PAGE>
to the RDL agreement limiting the royalty fees under certain circumstances and
deferring and subordinating all royalty claims with respect to all other
creditors for an initial period of five years. The amendment allows the Company,
at RDL's option, to pay up to $250,000 of accrued royalties in shares of the
Company's common stock at a price of $0.50 per share. In the event that RDL
extends the period to ten years the amount would be increased to $1,000,000 and
the price would increase to $1.00 per share. Should RDL exercise its option to
accept payment in shares of the Company's common stock, in whole or in part,
title to RDL's technology would transfer to the Company and future royalty
obligations would cease. In fiscal 1994, RDL extended the period to ten years.
In October 1990, the Company and RDL consummated an agreement in which full
settlement of the $40,000 note payable was arranged. RDL forgave $20,000 of the
Company's $40,000 debt, evidenced by the aforementioned $40,000 note payable,
and surrendered its warrant to purchase 200,000 shares of the Company's stock
in exchange for a cash payment of $5,000 and 200,000 unregistered shares of the
Company's common stock. As of September 29, 1996, the Company owed RDL $355,700
in deferred royalty fees.
Note 8 - Composition of Certain Financial Statement Captions
<TABLE>
<CAPTION>
September 29, October 1,
1996 1995
____________________________
<S> <C> <C>
Accounts receivable:
U.S. government $ 1,608,800 $ 2,094,500
Other customers 1,415,100 293,500
____________________________
$ 3,023,900 $ 2,388,000
____________________________
____________________________
</TABLE>
Accounts receivable includes unbilled amounts of $1,151,600 and $1,423,000
at September 29, 1996 and October 1, 1995, respectively. Unbilled amounts
represent contract revenues for which billings have not been presented to
customers at year-end. These amounts are billed in accordance with applicable
contract terms, usually within 30 days. Accounts receivable also includes
billed retention of $63,000 and $43,600 at September 29, 1996 and October 1,
1995, respectively. These amounts are normally collected upon final audit of
costs by the U.S. government.
Costs incurred beyond the contract funded amount included in unbilled
accounts receivable amount to $201,900 at September 29, 1996. This amount,
although not yet funded, is within the scope of the contract and the Company
does not expect to sustain a loss with respect to such costs.
<TABLE>
<CAPTION>
September 29, October 1,
1996 1995
______________________________
<S> <C> <C>
Inventory:
Raw Materials $ 537,900 $ 488,600
Work in Process 2,862,300 1,842,600
Finished Goods 986,500 599,700
______________________________
$ 4,386,700 $ 2,930,900
______________________________
______________________________
</TABLE>
Title to all inventories remains with the Company. Inventoried materials and
costs relate to work in process on customers' orders and on the Company's
generic module parts and memory stacks which the Company anticipates it will
sell to customers. Such inventoried costs are stated generally at the total of
the direct production costs including overhead. Inventory valuations do not
include General and Administrative expenses.
<TABLE>
<CAPTION>
September 29, October 1,
1996 1995
____________________________
<S> <C> <C>
Equipment, furniture and fixtures:
Engineering and production
equipment $ 16,615,800 $ 8,527,600
Furniture and fixtures 353,300 335,600
Computer software programs 739,900 371,200
Leasehold improvements 900,700 850,100
____________________________
18,609,700 10,084,500
Less accumulated depreciation
and amortization 6,703,000 4,434,900
____________________________
$ 11,906,700 $ 5,649,600
____________________________
____________________________
</TABLE>
<PAGE>
Engineering and production equipment includes approximately $209,800 and
$396,500 of capitalized leases at September 29, 1996 and October 1, 1995,
respectively. Accumulated amortization of capitalized leases amounted to
$66,324 and $30,700 at September 29, 1996 and October 1, 1995, respectively.
<TABLE>
<CAPTION>
September 29, October 1,
1996 1995
__________________________
<S> <C> <C>
Accrued expenses:
Salaries and wages $ 353,900 $ 292,500
Vacation 236,900 183,500
Payroll taxes 57,100 33,900
Accounting fees 55,800 42,100
Accrued rent 91,700 -
Other accrued expenses 140,700 119,500
__________ __________
$ 936,100 $ 671,500
__________________________
__________________________
</TABLE>
Note 9 - Notes Payable
Current and long-term debt consists of the following:
<TABLE>
<CAPTION>
September 29, October 1,
1996 1995
__________________________
<S> <C> <C>
Note payable to bank bearing
interest at prime plus 1.5%
due in monthly installments of
$63,400 beginning May 1997 $ 3,000,000 $ -
Capitalized lease
obligations maturing at
various dates through 1997 80,400 284,400
Less current portion 270,600 206,400
__________________________
$ 2,809,900 $ 78,000
__________________________
__________________________
</TABLE>
The aggregate minimum principal maturities are $270,600, $517,700, $561,700,
$618,900 and $682,000 in the years ending September 30, 1997 through 2001,
respectively, and $429,500 thereafter.
The Company was in compliance with two of the three financial covenants of its
bank loan as of September 29, 1996 and as of the first quarter ended December
29, 1996, and received a waiver of the third covenant as of September 29, 1996
and December 31, 1996. The Company anticipates that it will be in full
compliance with the restrictive covenants in future quarters.
Note 10 - Income Taxes
Effective October 4, 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes," which
requires an asset and liability approach to financial accounting and reporting
for income tax. The cumulative effect of adopting SFAS No. 109 on the Company's
financial statements for the year ended October 2, 1994 was not material.
Deferred income taxes reflect the net tax effects of (i) temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes, and
(ii) operating loss and tax credit carryforwards. The tax effects of
significant items comprising the Company's income tax calculation as of
September 29, 1996 are as follows:
<TABLE>
<S> <C>
Current deferred tax assets:
Differences between book
and tax basis of property $ 878,800
Reserves not currently deductible 2,500
Long-term deferred tax assets:
Operating loss carryforwards 11,322,400
Tax credit carryforwards 403,500
Capital loss carryforwards 8,500
Valuations allowance (12,615,700)
____________
Net deferred tax asset $ -
____________
____________
</TABLE>
<PAGE>
The differences between the Company's effective income tax rate and the
statutory U.S. federal income tax rate for the fiscal years September 29,1996
and October 1, 1995, respectively, are as follows:
The total valuation allowance changed $4,598,400 from October 1, 1995 to
September 29, 1996. At September 29, 1996, the portion of the valuation
allowance attributed to deferred tax assets for which subsequently recognized
tax benefit will be allocated directly to contributed capital was $1,107,100.
The provisions for income taxes for the fiscal years ended September 29,
1996, October 1, 1995, and October 2, 1994, consist of provisions for state
income taxes of $1,800, $1,000, and $800, respectively. No provisions for
federal income taxes have been made in these fiscal years due to the net
operating losses.
At September 29, 1996, the Company had net operating loss carryforwards of
approximately $29,997,900 for financial reporting and federal income tax
purposes expiring in varying amounts from fiscal year 1997 through fiscal year
2011, and $14,236,500 for California and Vermont State Franchise tax purposes
expiring in varying amounts from fiscal year 1997 through fiscal year 2001,
available to offset future federal, California, and Vermont taxable income. In
addition, as of September 29, 1996, the Company had investment tax credits and
qualified research credits of $133,400 and $270,100, respectively, expiring in
varying amounts through fiscal year 2008 and available to offset future federal
taxes. The ability of the Company to utilize the net operating loss and credit
carryforwards may be restricted by certain provisions of the Internal Revenue
Code.
Note 11 - Operating Leases
The Company leases certain facilities and equipment under cancelable and
noncancelable lease obligations. Total rental expense for operating leases
amounted to $1,633,500, $562,500, and $347,100, for the fiscal years ended
September 29, 1996, October 1, 1995, and October 2, 1994, respectively. Minimum
lease commitments existing at September 29, 1996 are approximately as follows:
<TABLE>
<CAPTION>
<S> <C>
Fiscal years ending:
1997 $ 2,020,700
1998 1,959,700
1999 500,300
2000 5,800
____________
Total minimum payments $ 4,486,500
____________
____________
</TABLE>
Note 12 - Stock Option Plans and Employee Retirement Plan
In December 1981, the Company's shareholders adopted two stock option plans:
the 1981 Incentive Stock Option Plan (Incentive Plan) and the 1981 Nonstatutory
Stock Option Plan (Nonstatutory Plan). The Incentive Plan provided for the
granting of options to key management employees and the Nonstatutory Plan
provided for the granting of options to both key management employees and
non-employee directors. The maximum number of shares which could be optioned
and sold under the two plans was 1,450,000 shares, of which no more than
800,000 and 400,000 could be optioned and sold to directors and non-director
officers, respectively. Under the terms of the Incentive Plan, options could be
granted at an exercise price equal to the fair market value of the Company's
common stock on the date the options were granted and under the terms of the
Nonstatutory Plan, options could be granted at 85 percent of the fair market
value, on the date the options were granted. If, however, the optionee owned
more than 10 percent of the outstanding common stock of the Company, the
exercise price of incentive stock options would be at least 110 percent of such
fair market value. Options, generally, are not exercisable before one year from
the date of grant, and are generally exercisable in installments. Options
granted under the Incentive Plan may not exceed five years in duration and
options granted under the Nonstatutory Plan may not exceed ten years in
duration. The plans terminated on December 11, 1991, after which date no
options could be granted under the plans. As of September 29, 1996, there were
no outstanding options under the plans.
In December 1991, the Board of Directors adopted the 1991 Stock Option Plan
to replace the 1981 Plans which had terminated. This new Plan was approved by
shareholders at the Company's Annual Meeting in February 1992. Under the 1991
Plan, options to purchase an aggregate of 675,000 shares of the Company's
common stock may be granted to both key management employees and non-employee
directors. Options granted may be either Incentive Stock Options or
Nonstatutory Stock Options and the requirements for participation, exercise
price and other terms are similar to the 1981 Plans. As of
<PAGE>
September 29, 1996, options to purchase 210,700 shares at prices ranging from
$4.28 (15,000 shares) to $8.625 (30,000 shares) were outstanding under the Plan,
of which 90,200 were exercisable at September 29, 1996.
In January 1995, the Board of Directors adopted the 1995 Stock Option Plan
to replace the 1991 Plan which had terminated. This new Plan was approved by
shareholders at the Company's Annual Meeting in February 1995. Under the 1995
Plan, options to purchase an aggregate of 700,000 shares of the Company's
common stock may be granted to both key management employees and non-employee
directors. Options granted may be either Incentive Stock Options or
Nonstatutory Stock Options and requirements for participation, exercise price
and other terms are similar to the 1991 Plan. As of September 29, 1996, options
to purchase 444,000 shares at prices ranging from $5.0625 (50,000 shares) to
$8.50 (100,000 shares) were outstanding under the Plan, of which 20,000 were
exercisable at September 29, 1996.
Stock option activity is summarized as follows:
<TABLE>
<CAPTION>
Option Price
Shares Per Share
________________________________
<S> <C> <C>
1981 Plan:
_________
Options outstanding at
October 3, 1993 170,000 $0.17 to $1.5625
Exercised (117,600) 0.17 to 0.8125
__________
Options outstanding at
October 2, 1994 52,400 0.5625 to 1.5625
Exercised (48,400) 0.5625 to 1.5625
__________
Options outstanding at
October 1, 1995 4,000 0.5625
Exercised 4,000 $0.5625
__________
Options outstanding at
September 29, 1996 -
__________
__________
1991 Plan:
_________
Options outstanding at
October 3, 1993 472,000 $1.3125 to $8.625
Granted 65,500 7.125 to 7.75
Exercised (10,500) 1.3125 to 4.09
__________
Options outstanding at
October 2, 1994 527,000 1.3125 to 8.625
Granted 98,500 6.00
Exercised (54,200) 1.3125 to 7.75
__________
Options outstanding at
October 1, 1995 571,300 1.3125 to 8.625
Exercised (314,100) 1.3125 to 4.09
Cancelled (19,000) 4.09 to 8.625
Expired (27,500) 1.3125 to 4.09
__________
Options outstanding at
September 29, 1996 210,700 $4.28 to $8.625
__________
__________
1995 Plan:
_________
Granted in fiscal 1995 228,500 $6.00 to $6.50
__________
Options outstanding at
October 1, 1995 228,500 6.00 to 6.50
Granted 343,500 5.0625 to 8.50
Cancelled (128,000) 6.00 to 6.50
__________
Options outstanding at
September 29, 1996 444,000 $5.0625 to $8.50
__________
__________
</TABLE>
<PAGE>
In fiscal 1982, the Company established an Employee Retirement Plan which is
effective for fiscal year 1982 and thereafter. The plan provides for annual
contributions to the Company's Stock Bonus Trust (SBT) to be determined by the
Board of Directors and which will not exceed 15 percent of total payroll. At
the discretion of the Trustee, the SBT will purchase common stock at fair
market value or other interest-bearing securities or investments for the
accounts of individual employees who will gain a vested interest of 20 percent
in their accounts after three years of service, and 20 percent each year of
service thereafter, until fully vested after seven years of service. That
portion of cash or stock held in an employee's account and not vested at
termination of employment will be redistributed in accordance with a
prearranged formula. Management believes that the contributions made by the
Company to the SBT, to the extent they relate to government cost-plus-fixed-fee
contracts, will be reimbursable by the U.S. government. In fiscal years 1994,
1995 and 1996 the Company's contributions to the SBT were 43,200, 68,000 and
172,900 shares of common stock, respectively, which had estimated market values
of $357,300, $472,300 and $687,400, respectively.
Note 13 - Revenues
In fiscal 1996, contracts with all branches of the U.S. government accounted
for 31% of the Company's revenues and the remaining 69% of the Company's
revenues was derived from non-government sources. Of the 31% applicable to the
U.S. government, there was one agency of the government that accounted for 16%.
Other government agencies accounted for the remaining 15%. Of the 69%
applicable to non-government sources, two customers accounted for 23% and 21%
of the revenues.
In fiscal 1995, contracts with all branches of the U.S. government accounted
for 74% of the Company's revenues and the remaining 26% of the Company's
revenues was derived from non-government sources. Of the 74% applicable to the
U.S. government, there were two agencies of the government that accounted for
30% and 21%, respectively. Other government agencies accounted for the
remaining 23%. There were no non-government customers who individually
accounted for more than 10%.
In fiscal 1994, contracts with all branches of the U.S. government accounted
for 83% of the Company's revenues and the remaining 17% of the Company's
revenues was derived from non-government sources. Of the 83% applicable to the
U.S. government, there were four agencies of the government that accounted for
22%, 21%, 15%, and 14%, respectively. Other government agencies accounted for
the remaining 11%. There were no non-government customers who individually
accounted for more than 10%.
Note 14 - Technology Licenses
In June 1992 the Company and International Business Machines (IBM) entered
into an agreement to develop manufacturing technology required to commercially
produce parts using the Company's technology for stacking integrated circuits.
In June 1993, IBM and the Company jointly announced the opening of a pilot
manufacturing line at an IBM facility. The Company will receive royalties on
stacked chip parts sold by IBM and will share equally with IBM any royalties
received from the licensing of the jointly developed manufacturing technology.
In April 1996, the Company reached an agreement with IBM wherein the Company
acquired the operating line from IBM and leased the facilities.
In May 1995, the Company and Unitrode Corporation (Unitrode) entered into an
agreement to transfer to Unitrode the technology required to produce the
Company's wireless infrared communication integrated circuit (SIRComm ). The
Company will receive licensing and royalty payments for the technology transfer
and on SIRComm products sold by Unitrode.
Note 15 - Deferred Revenues
The Company received prepayments from customers related to services and
products which had not been delivered as of September 29, 1996. Revenues will
be recorded upon delivery of these services and products.
Note 16 - Acquisition of Equipment
<PAGE>
On April 19, 1996, the Company consummated an agreement for the acquisition
and operation of the equipment comprising IBM's cubing line located at IBM's
Essex Junction, Vermont facility. The cubing line was established by IBM to
manufacture the stacked-chip assemblies required to commercialize the Company's
proprietary chip-stacking technology under the joint development alliance that
IBM and the Company entered into in 1992 and recently completed. According to
the terms of the agreement, the Company acquired the equipment and clean room
which comprises the cubing line for a cash payment of approximately $6.5
million. In addition, the Company signed a facility lease agreement for the
space required to operate the cubing line under the Company's management within
the IBM facility through December 1998. The terms of the facility lease
agreement includes escalating rent payments which have been straight lined for
financial reporting purposes. The difference between the amount paid and the
amount expensed during fiscal 1996 has been reported as accrued rent.
<PAGE>
Irvine Sensors Corporation
Report of Independent Accountants
To the Board of Directors and Shareholders of Irvine Sensors Corporation
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of shareholders' equity and of cash
flows present fairly, in all material respects, the financial position of
Irvine Sensors Corporation and its subsidiaries at September 29, 1996, and
October 1, 1995, and the results of their operations and their cash flows for
each of the three years in the period ended September 29, 1996, in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse
Costa Mesa, California
January 10, 1997
<PAGE>
EXHIBIT 21
EXHIBIT 21 - SUBSIDIARIES OF THE REGISTRANT
Carson Alexiou Corporation
3001 Redhill Ave. Bldg. III, Suite 208
Costa Mesa, California 92626
State of Incorporation: Massachusetts
Novalog, Inc.
151 Kalmus Drive, Suite K-1
Costa Mesa, California 92626
State of Incorporation: Delaware
3D Microsystems, Inc.
3001 Redhill Ave. Bldg.III, Suite 208
Costa Mesa, California 92626
State of Incorporation: Delaware
<PAGE>
EXHIBIT 23.1
EXHIBIT 23.1 - CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-8 (No. 2-85501) of
Irvine Sensors Corporation of our report dated January 10, 1997, which appears
on page 17 of the September 29, 1996 Annual Report to Shareholders of Irvine
Sensors Corporation, which is incorporated by reference in Irvine Sensors
Corporation's Annual Report on Form 10-K for the year ended September 29, 1996.
We also consent to the incorporation by reference of our report on the Financial
Statement Schedules, which appears on page 13 of this Form 10-K.
/s/ Price Waterhouse LLP
Costa Mesa, California
January 10, 1997
<PAGE>
EXHIBIT 23.2
EXHIBIT 23.2 - CONSENT OF PATENT COUNSEL
I hereby consent to the reference to me in this Annual Report -
Form 10-K of Irvine Sensors Corporation under the section entitled
"Patents and Trademarks."
/s/ THOMAS J. PLANTE
---------------------------------
THOMAS J. PLANTE, Esq.
Irvine, California
January 7, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Form 10-K for the year ended September 29, 1996 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-29-1996
<PERIOD-START> OCT-02-1995
<PERIOD-END> SEP-29-1996
<CASH> 1,954,000
<SECURITIES> 0
<RECEIVABLES> 3,023,900
<ALLOWANCES> 10,000
<INVENTORY> 4,386,700
<CURRENT-ASSETS> 9,648,200
<PP&E> 18,609,700
<DEPRECIATION> 6,703,000
<TOTAL-ASSETS> 21,742,200
<CURRENT-LIABILITIES> 5,787,100
<BONDS> 3,400,000
100
0
<COMMON> 187,100
<OTHER-SE> 8,312,700
<TOTAL-LIABILITY-AND-EQUITY> 21,742,200
<SALES> 11,898,200
<TOTAL-REVENUES> 12,024,200
<CGS> 17,137,600
<TOTAL-COSTS> 23,178,900
<OTHER-EXPENSES> 2,009,700
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 469,800
<INCOME-PRETAX> (11,516,200)
<INCOME-TAX> 1,800
<INCOME-CONTINUING> (11,518,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,518,000)
<EPS-PRIMARY> (0.68)
<EPS-DILUTED> (0.68)
</TABLE>
