EXHIBIT 10.1
Confidential Treatment Requested by
American Superconductor Corporation
Execution Copy

SUBCONTRACT AGREEMENT
This Subcontract Agreement No. 08900001-007 (the "Agreement") dated October 31,
2018 by and between American Superconductor Corporation, a Delaware corporation
with offices at 114 East Main Street, Ayer, MA 01432 ("AMSC") and Commonwealth
Edison, an Illinois corporation with offices at 440 South LaSalle, Chicago, IL
60605 ("Subcontractor"), and shall become effective as of the Effective Date (as
defined below). AMSC and Subcontractor may be referred herein separately as a
“Party” and collectively as the "Parties."
WHEREAS, the U.S. Department of Homeland Security (“DHS”) awarded that certain
Other Transaction Agreement number HSHQDC-08-9-00001 (“the Prime Contract” and
upon execution of the DHS Amendment (as defined below), the term “Prime
Contract” shall mean the Prime Contract as amended by the DHS Amendment) to AMSC
to develop, design and deploy an inherently fault current limiting high
temperature superconductor (“HTS”) electric cable system;
WHEREAS, AMSC and Subcontractor desire to work together to complete Phase 2 (as
that term is defined in the Prime Contract as in effect on the date hereof) (the
“Project”);
WHEREAS, AMSC has submitted to DHS a proposed form of amendment to the Prime
Contract which authorizes the substitution of Subcontractor for Consolidated
Edison for performance of the Project, and contains all DHS necessary consents
or authorizations for Subcontractor to perform the Project, which amendment is
attached hereto as Appendix G (the “Proposed DHS Amendment”);
WHEREAS, DHS shall deliver a signed amendment to the Prime Contract which
authorizes the substitution of Subcontractor for Consolidated Edison for
performance of the Project, and contains all DHS necessary consents or
authorizations for Subcontractor to perform the Project to AMSC for its
signature (the “DHS Amendment”);
WHEREAS, this Agreement shall become effective on the date on which AMSC and DHS
have signed the DHS Amendment (the “Effective Date”);
WHEREAS, until the Effective Date, this Agreement shall not be deemed to create
any obligation by either Party to the other Party, or require any Party to
perform any obligation with respect to the tasks described in the Prime
Contract, except as expressly set forth herein; and
WHEREAS, notwithstanding the foregoing, the Parties shall be bound by the
Non-Disclosure Agreement signed by the Parties on October 31, 2018 (the “NDA”).
NOW, THEREFORE, in consideration of the terms and covenants of this Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby mutually acknowledged by the Parties, the Parties agree, effective as
of the Effective Date, as follows:
SECTION 1.SCOPE OF THE AGREEMENT AND SERVICES OBLIGATIONS
1.1.    Scope. AMSC and Subcontractor acknowledge and agree that this Agreement
sets forth the duties and obligations of the Parties for the Project as is
described in the Statement of Work attached hereto as Appendix A (the “Statement
of Work” or “Appendix A”).
1.2.    Performance by Subcontractor. Subcontractor shall (i) perform those
tasks to be performed by it as described in the Statement of Work in accordance
with the terms of this Agreement, (ii) cause its subcontractors to perform any
tasks in order to achieve the milestones set forth in Section 3.2 below

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant
to a request for
confidential treatment and have been filed separately with the Securities and
Exchange Commission.

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(“Milestones”) that are indicated as Subcontractor’s responsibility, and perform
its responsibilities in accordance with this Agreement and the appendices
attached hereto (“Appendices”), including by meeting all Milestones that are
Subcontractor’s responsibility; and (iii) cooperate with and provide reasonable
support to AMSC in connection with AMSC’s performance of its obligations under
this Agreement and the Prime Contract (collectively (i) through (iii) are
referred to as the “Subcontractor Work”). Subcontractor represents and warrants
that it has the legal right to perform the Subcontractor Work. Subcontractor
shall provide Subcontractor personnel and subcontractors that have the necessary
skills and experience to perform the Subcontractor Work. Subcontractor shall
assign the Subcontractor Work to those of its personnel or outside contractors,
as it shall determine, who have the necessary skills and experience.
Subcontractor shall cause the Subcontractor Work to be performed in a
professional and workmanlike manner, and Subcontractor shall use commercially
reasonable efforts to cause the Subcontractor Work to be performed in a timely
manner.
1.3.    Performance by AMSC and its Other Subcontractors. AMSC shall: (i) in
accordance with its role as prime contractor for the Project, perform overall
Project management; however, under no circumstances will AMSC have control over
the manner or methods, including without limitation the processes and
procedures, in which Subcontractor performs the Subcontractor Work hereunder;
(ii) perform the tasks attributed to AMSC and ensure the performance of all
tasks attributed to the other subcontractors engaged by AMSC (“Other
Subcontractors”), set forth in the Statement of Work, (iii) perform in
accordance with the terms of the Prime Contract, (iv) perform its
responsibilities in accordance with this Agreement and the Appendices, including
by meeting all milestones that are AMSC’s responsibility; and (v) cooperate with
and provide reasonable support to Subcontractor in connection with
Subcontractor’s performance of its obligations under this Agreement
(collectively (i) through (v) are referred to as the “AMSC Obligations”). AMSC
represents and warrants that AMSC and each of its Other Subcontractors has, and
shall have, the legal right to perform the AMSC Obligations. AMSC shall provide
AMSC personnel and Other Subcontractors that have the necessary skills and
experience to perform the AMSC Obligations. AMSC shall cause the AMSC
Obligations to be performed in a professional and workmanlike manner, and AMSC
shall use commercially reasonable efforts to cause the AMSC Obligations to be
performed in a timely manner. If AMSC receives notification of default or breach
of the Prime Contract from DHS, AMSC shall immediately notify Subcontractor of
such default or breach, and whether AMSC disputes such notice of default or
breach, and to the extent such default or breach relates to the Project, provide
Subcontractor a reasonable opportunity to assist in remedying such default or
breach.
1.4.    Acceptance. AMSC shall notify the Subcontractor in writing when the HTS
Cable System (as defined in Appendix A) is ready for inspection and testing. If
Subcontractor concurs that the HTS Cable System is ready for inspection and
testing, Subcontractor will make the inspection and conduct testing within
thirty (30) days. If the HTS Cable System performs in accordance with the terms
of this Agreement, including the warranties set forth in Sections 16.1 and 16.2,
and the terms of any applicable Statement of Work, Subcontractor shall accept
the System by delivering a written notice of acceptance (the “Notice of
Acceptance”) to AMSC within ten (10) days after the completion of testing. In
the event Subcontractor does not send either a Notice of Acceptance or notice of
deficiencies within such ten (10) day period, then AMSC shall notify the
Subcontractor in writing that Subcontractor has an additional ten (10) days from
the receipt of such notice to send either a Notice of Acceptance or notice of
deficiencies. In the event Subcontractor does not send either a Notice of
Acceptance or notice of deficiencies within such subsequent ten (10) day period,
then the HTS Cable System shall be deemed accepted by Subcontractor (“Deemed
Acceptance”). Subcontractor shall not have a right to rescind Acceptance once
provided. Notwithstanding anything to the contrary herein, Subcontractor shall
have no obligation to accept the HTS Cable System if there has been an adverse
event under Section 2.2.4 of this Agreement within thirty (30) days prior to the
Acceptance (as defined below) of the HTS Cable System. As used in this
Agreement,

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the term “Acceptance” shall mean the first to occur of (i) Subcontractor
delivers a Notice of Acceptance, or (ii) a Deemed Acceptance.
1.5.     This Agreement is comprised of the following:
•This Subcontract Agreement
•Appendix A – Statement of Work
•Appendix B – Limited Rights Proprietary Information
•Appendix C – reserved
•Appendix D – Letter of Credit
•Appendix E – Backup Inventory
•Appendix F – Assigned Warranties
•Appendix G – Proposed DHS Amendment
In the event there is a conflict between the provisions contained herein and
those of the Appendices, the order of precedence shall be as listed above.
1.6.    Each Party shall perform its obligations in a competent, timely and
efficient manner and in compliance in all material respects with all laws,
statutes, codes, ordinances, rules, regulations, lawful orders, applicable
guidance documents from regulatory agencies including judicial decrees and
interpretations, standards, permits and licenses, including environmental laws,
tax laws and applicable tax treaties, health, safety, building, and employment
laws, as amended from time to time, of all Governmental Authorities that are
applicable to such Party’s respective obligations hereunder or applicable to any
related Project documentation (“Applicable Law”). As used herein, the term
“Governmental Authorities” shall mean any and all federal, state, county,
municipal, local government, or any agency or subdivision of any or all of the
foregoing, or any quasi-governmental agency, self-regulating organization,
board, bureau, commission, department, instrumentality, or public body, or any
court, administrative agency, arbitrator, mediator, regulator, or other tribunal
or adjudicative authority with jurisdiction over the applicable Party and/or the
Project.
1.7.    Delays. To the extent permitted by Applicable Law, whenever a Party
becomes aware that any actual or potential condition, event or occurrence (other
than a Force Majeure Event (as defined below), in which case the provisions of
Section 17.5 shall apply) may (a) delay or threaten to delay its timely
performance hereunder, or (b) render it impossible or impractical to perform its
obligations, the Party so affected shall promptly give notice thereof to the
other Party, including the cause and expected duration of the delay and all
other relevant information with respect thereto.
SECTION 2.TERM AND TERMINATION
2.1.    Term. The period of performance of this Agreement shall begin on the
Effective Date and, unless sooner terminated in accordance with this Section 2,
shall continue through and until the completion of the Warranty Period (as
defined below) (the “Term”).

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2.2.    Termination Events.
2.2.1.    Termination for Bankruptcy. Either Party may, by written notice to the
other Party, cancel the whole or any portion of the Agreement in the event the
other Party (i) becomes insolvent or admits its inability to pay its debts
generally as they become due; (ii) becomes subject, voluntarily or
involuntarily, to any proceeding under any domestic or foreign bankruptcy or
insolvency law, which is not fully stayed within seven (7) business days or is
not dismissed or vacated within ninety (90) days after filing; (iii) is
dissolved or liquidated or takes any corporate action for such purpose; (iv)
makes a general assignment for the benefit of creditors; or (v) has a receiver,
trustee, custodian or similar agent appointed by order of any court of competent
jurisdiction to take charge of or sell any material portion of its property or
business.
2.2.2.    Termination for Breach. In the event that either Party commits any
material breach of any representation, warranty or obligation under this
Agreement which is not, within thirty (30) days of written notice thereof, (i)
cured, (ii) is in the process of being cured pursuant to a plan as agreed upon
by the Parties, or (iii) as may otherwise be negotiated by the Parties, the
non-breaching Party may immediately terminate this Agreement; provided that
Subcontractor may terminate this Agreement immediately upon written notice in
the event that AMSC fails to provide the Letter of Credit (including any
required replacement or renewal thereof) pursuant Section 3.4. For the avoidance
of doubt, AMSC’s failure to deliver the HTS Cable System which performs in
accordance with the terms of this Agreement, including the warranties set forth
in Section 16 and the terms of any applicable Statement of Work, shall be a
material breach under this Agreement, subject to AMSC’s opportunity to cure as
set forth in the previous sentence.
2.2.3.    Termination of or Amendment to the Project by U.S. Government. AMSC
shall notify Subcontractor within three (3) days following the occurrence of (a)
sending or receiving any notice of termination of the Prime Contract, (b) any
termination of the Prime Contract, or (c) any amendments to the Prime Contract
with regards to the Project, other than the amendments set forth in the Proposed
DHS Amendment. For the avoidance of doubt, only amendments to the Prime Contract
which would affect the Project, including with respect to construction
requirements or standards, a Party’s expenditure of funds or time, or the
ability of the either Party to perform its obligations in connection with the
Project, shall be subject to Section 2.2.3(c).
2.2.3.1.
Either Party may terminate, at its sole discretion, this Agreement within thirty
(30) days following the receipt of notice of a termination of the Prime
Contract, except that, if a termination of the Prime Contract is due to AMSC’s
breach of the Prime Contract, only Subcontractor may terminate this Agreement,
which right to terminate may be exercised at its sole discretion.

2.2.3.2.
If the DHS Amendment differs from the Proposed DHS Amendment with regards to the
Project (an “OTA Change”), the Parties agree as follows:

2.2.3.2.1.
AMSC shall include in the written notice required pursuant to Section 2.2.3(c) a
copy of the signed DHS Amendment (“Modification Notice”).

2.2.3.2.2.
Subcontractor may request a meeting with AMSC to review the DHS Amendment by
delivering a written notice to AMSC (“Negotiation Request”) at any time prior to
the expiration of 30 days after receipt of the Modification Notice.

2.2.3.2.3.
Promptly following AMSC’s receipt of any Negotiation Request, Subcontractor and
AMSC shall meet to discuss the OTA Change and possible

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adjustments to this Agreement that may be requested by Subcontractor as a result
of the OTA Change (“Requested Adjustment”). If, during the 30 days after the
date that AMSC receives the Negotiation Request, or during any longer period as
agreed upon in writing by the Parties, the Parties cannot reach an agreement
with respect to any Requested Adjustment, either Party can terminate this
Agreement by delivering a written termination notice to the other Party
(“Termination Notice”). The Parties shall use good faith efforts to negotiate
and cooperate with each other regarding any Requested Adjustment. Upon delivery
of a Termination Notice, the Agreement shall terminate.
2.2.3.2.4.
In the event that Subcontractor fails to deliver a Negotiation Request on or
before 30 days after receipt of a Modification Notice or if Subcontractor
provides AMSC with written notice that it waives its right to require a
Requested Adjustment during such 30 day period, Subcontractor shall be deemed to
have waived its right to require a Requested Adjustment and neither Party shall
be entitled to terminate this Agreement pursuant to Section 2.2.3.2.3.

2.2.3.3.
If DHS submits any additional amendments to the Prime Contract to AMSC regarding
the Project after the Effective Date (each, a “Subsequent DHS Amendment”), the
Parties agree as follows:

2.2.3.3.1.
AMSC shall include in the written notice required pursuant to Section 2.2.3(c) a
copy of the signed Subsequent DHS Amendment (“Subsequent Modification Notice”).

2.2.3.3.2.
Subcontractor may request a meeting with AMSC to review such Subsequent DHS
Amendment by delivering a written notice to AMSC (“Subsequent Negotiation
Request”) at any time prior to the expiration of 30 days after receipt of the
Subsequent Modification Notice.

2.2.3.3.3.
Promptly following AMSC’s receipt of the Subsequent Negotiation Request,
Subcontractor and AMSC shall meet to discuss the Subsequent DHS Amendment and
possible adjustments to this Agreement that may be requested by Subcontractor as
a result of the Subsequent DHS Amendment (“Subsequent Requested Adjustment”).
If, during the 30 days after the date that AMSC receives the Subsequent
Negotiation Request, or during any longer period as agreed upon in writing by
the Parties, the Parties cannot reach an agreement with respect to any
Subsequent Requested Adjustment, either Party can terminate this Agreement by
delivering written termination notice to the other Party (“Subsequent
Termination Notice”). The Parties shall use good faith efforts to negotiate and
cooperate with each other regarding any Subsequent Requested Adjustment. Upon
delivery of a Subsequent Termination Notice, Subcontractor’s sole and exclusive
remedy for any and all claims arising under Section 2.2.3.3 shall be as set
forth in Section 2.2.8.2 of this Agreement.

2.2.3.3.4.
In the event that Subcontractor fails to deliver a Subsequent Negotiation
Request on or before 30 days after receipt of a Subsequent Modification Notice
or if Subcontractor provides AMSC with written notice that it waives its right
to require a Subsequent Requested Adjustment during such 30 day period,

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Subcontractor shall be deemed to have waived its right to require a Subsequent
Requested Adjustment with respect to such Subsequent DHS Amendment and neither
Party shall be entitled to terminate this Agreement pursuant to Section
2.2.3.3.3.
2.2.4.    Termination for Adverse Events. Subcontractor may terminate this
Agreement within thirty (30) days after receipt of notice pursuant to Section
2.2.5 if any of the following events occur at any time from the Effective Date
until the date the HTS Cable System has been Accepted in accordance with Section
1.4 herein (“Commissioning”):
2.2.4.1.
If AMSC commits any material default or violation of (a) any material debt
agreement, instrument, indenture, mortgage or deed of trust to which it is a
party or by which it is bound. AMSC shall provide Subcontractor with written
notice of any material default as soon as possible after receipt thereof and,
upon Subcontractor’s request, status reports and any material correspondence
relating thereto; or (b) the Prime Contract, or DHS terminates the Prime
Contract as a result of a breach by AMSC;

2.2.4.2.
If a Change In Control occurs. For purposes of this Agreement, the term “Change
in Control” shall mean any of the following transactions or a series of related
transactions where the acquiring, surviving or counter-party to the transaction
is not a US domiciled entity having rated Baa/BBB or higher by Moody’s and S&P,
respectively, on or after each of the announcement and consummation of the
Change of Control:

2.2.4.2.1.
a sale, conveyance, transfer, distribution, lease, assignment, license or other
disposition of all or substantially all of the assets of AMSC;

2.2.4.2.2.
any consolidation, merger, dissolution or reorganization of AMSC in which the
holders of all of the equity securities or securities or instruments convertible
or exchangeable for equity securities (collectively, “securities”) that may be
entitled to vote for the election of any member of a board of directors or
similar governing body of AMSC immediately prior to such transaction(s) hold
less than fifty percent (50%) of the securities that may be entitled to vote for
the election of any such member in such entity immediately following such
transaction(s); or

2.2.4.2.3.
any sale, transfer, issuance, or disposition of any securities of AMSC in which
the holders of all of the securities that may be entitled to vote for the
election of any member of a board of directors or similar governing body of AMSC
immediately prior to such transaction(s) hold less than fifty percent (50%) of
the securities that may be entitled to vote for the election of any such member
in such entity immediately following such transaction(s);

2.2.4.3.
If AMSC is unable to perform this Agreement as stated in writing by AMSC;

2.2.5.    Notification of Adverse Event.
2.2.5.1.
AMSC shall promptly provide written notice to Subcontractor:

2.2.5.1.1.
upon the occurrence of any of the events described in subsection 2.2.4. during
the term from the Effective Date through the date of Commissioning, or

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2.2.5.1.2.
in the event that AMSC becomes aware or reasonably believes that any of the
events described in subsection 2.2.4. is imminent or likely to occur during such
period.

2.2.6.     Termination for Lack of Acceptance of Approvals.
2.2.6.1.
AMSC may terminate this Agreement upon providing thirty (30) days prior written
notice to Subcontractor if Subcontractor does not pursue all necessary approvals
and permits set forth in Appendix A with reasonable diligence.

2.2.6.2.
Either Party may terminate this Agreement upon providing thirty (30) days prior
written notice to the other Party if Subcontractor is denied any necessary
approval or permit required to be obtained by it on Appendix A and Subcontractor
has not appealed, contested, or waived the condition or provided an alternate
plan for obtaining such approval or permit within ninety (90) days after receipt
of any such denial.

2.2.7.    Reimbursement of Allowable Costs Upon Termination. In the event of any
termination of this Agreement, Subcontractor shall provide to AMSC a termination
proposal detailing all unpaid costs and expenses that have not already been
reimbursed by Payable Milestone(as defined in Section 3.2) payments hereunder
incurred through the effective date of termination (“Unpaid Amounts”).
2.2.8.    Effect of Termination.
2.2.8.1.
If this Agreement is terminated by Subcontractor pursuant to Sections 2.2.1 and
2.2.2 hereof, Subcontractor shall, without limiting its other remedies set forth
herein (subject to Sections 9.5 and 9.6), be entitled to draw the full
$5,000,000 amount of the Letter of Credit (as defined below).

2.2.8.2.
If this Agreement is terminated pursuant to any of Sections 2.2.3.1, 2.2.3.3,
2.2.4 or 2.2.6 hereof, Subcontractor’s sole and exclusive remedy for any and all
claims arising under Sections 2.2.3.1, 2.2.3.3, 2.2.4 and 2.2.6 shall be limited
to the Payable Milestones invoiced and earned up to the date of such termination
plus the then outstanding amount of the Letter of Credit.

2.2.8.3.
If this Agreement is terminated pursuant to Section 2.2.3.2, all rights and
obligations of the Parties hereunder shall cease and be of no further force or
effect; provided, however, the rights and obligations of the Parties under
Section 4 (Proprietary Information), Section 5 (Intellectual Property), Section
9 (Indemnity and Limitation of Liability), Section 12 (Notices), and Section 17
(Miscellaneous) shall survive termination or cancellation of the Agreement
indefinitely.

2.2.8.4.
Upon the expiration or earlier termination of this Agreement other than pursuant
to Section 2.2.3.2, all rights and obligations of the Parties hereunder shall
cease and be of no further force or effect; provided, however, that the rights
and obligations of the Parties under Section 3 (Pricing and Payment), Section 10
(Insurance), and Section 16 (Inspection and Warranty) shall survive for the
duration of the Warranty Period, if applicable. However, Section 4 (Proprietary
Information), Section 5 (Intellectual Property), Section 9 (Indemnity and
Limitation of Liability), Section 12 (Notices), and Section 17 (Miscellaneous),
shall survive termination or cancellation of the Agreement

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indefinitely. Termination shall not prejudice either Party’s rights accruing
with regard to any period prior to the effective date of termination.
2.2.9.
Continuation of Agreement after Termination Event

2.2.9.1.
Without limitation on or waiver of any other rights or remedies of Subcontractor
hereunder, Subcontractor shall be entitled to draw on the then outstanding
amount of the Letter of Credit, upon providing written notice to AMSC within
thirty (30) days following the occurrence of (a) any event that would be a
default or give rise to Subcontractor's right to terminate or draw on the Letter
of Credit pursuant to Sections 2.2.1, 2.2.2, 2.2.3.1, 2.2.4 or 2.2.6, or (b) any
breach or failure to perform by AMSC any obligation to deliver a deliverable or
provide a service expressly required or included in its respective obligations
pursuant to the terms of this Agreement, in the case where Subcontractor does
not terminate the Agreement, in an amount equal to Subcontractor’s actual
incurred damages caused by the occurrence of such event.

SECTION 3.PRICING AND PAYMENT
3.1.    The total projected value to be reimbursed to Subcontractor for the
Subcontractor Work required to be provided pursuant to this Agreement, including
all taxes, is US $1,000,000. AMSC’s total projected value of AMSC’s contribution
of AMSC Obligations for the Project is [***], which amount includes the full
cost of providing the HTS cable. AMSC shall pay to Subcontractor the amounts set
forth below on the dates provided when Subcontractor satisfactorily completes
the corresponding Milestone (“Payable Milestone”) or as otherwise set forth in
the Statement of Work. Section 3.1 and 3.2 may be revised or modified in
accordance with subparagraph 3.2.1 herein, however the Subcontractor’s
reimbursement shall not exceed One Million Dollars (USD $1,000,000) in cash. The
foregoing limitation shall exclude amounts due to Subcontractor in connection
with any change order mutually agreed to by the Parties, or in connection with
AMSC's indemnification obligations or the Letter of Credit obligations, and
shall not be deemed to limit any remedy of Subcontractor at law, in equity or
otherwise available pursuant to the terms of this Agreement. Failure to provide
reimbursement of a Payable Milestone as and when required pursuant to Section
3.2 and 3.3 shall be deemed to be a material breach of this Agreement subject to
Section 2.2.2 of this Agreement.

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3.2.    Schedule of Milestones

Milestone Number
Description
Milestone Date
Reimbursement Amount
1
Notice from Subcontractor that long-lead materials (as determined by
Subcontractor) have been ordered to perform the Subcontractor Work having a sale
price in an amount not less than $500,000 (“Payable Milestone #1”)
To be determined by Subcontractor upon receipt of the DHS Amendment

$500,000

2
Receipt by AMSC of plans for the designs described in Appendix A, Subcontractor
Specific Responsibilities 1 through 4, together with a certification from
Subcontractor that such designs are substantially complete, subject to any
material assumptions set forth in such design plans.
To be determined by Subcontractor upon receipt of the DHS Amendment

$500,000

 
 
 
 
TOTAL MILESTONE COSTS

$1,000,000

3.2.1.    At any time during the Term of the Agreement, progress or results may
indicate that a change in the Statement of Work and/or the Schedule of Payable
Milestones (the “Schedule”) would be beneficial or required to achieve the
program objectives. Recommendations for modifications, including justifications
to support any changes to the Statement of Work and/or the Schedule will be
documented in a letter and submitted by the Subcontractor to AMSC. This letter
will detail the technical, chronological and financial impact, to the extent
known to Subcontractor, of the proposed modification to this Agreement. Any
resultant modification is subject to the mutual written agreement of the
Parties. AMSC is not obligated to pay for, nor is Subcontractor obligated to
perform, under the additional or revised Statement of Work or Schedule of
Payable Milestones until such are formally adopted by mutual written agreement
in accordance with the terms of this Agreement.
3.3.    Payments
Subcontractor shall invoice AMSC for each completed Payable Milestone per this
Section 3, and the following information shall be included on each such invoice:
•
This Agreement Number

•
Invoice Number and Date

•
The time period covered by the invoice

•
Milestone Number and Description from Schedule of Payable Milestones

•
Milestone Completion Date

•
Written description of work performed to complete Milestone (one or two
paragraphs)

•
Evidence of Subcontractor’s completion for each Milestone reimbursement claimed

•
Milestone Total Value in accordance with Schedule of Payable Milestones

•
Subcontractor’s Cost Share Amount

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•
Milestone Reimbursement Amount (Amount Claimed) in accordance with Schedule of
Payable Milestones

3.3.1.
Subcontractor shall document each Payable Milestone by submitting the
deliverables in accordance with the Schedule of Payable Milestones in Section
3.2 and 3.3, and as defined in the Statement of Work. Subcontractor shall submit
an electronic invoice to the email addresses below. In no event shall the date
on any invoice submitted by Subcontractor precede the date on which the
milestone criteria were met, as evidenced by reasonable documentation upon
request of AMSC.

Send Invoices to:
American Superconductor Corporation
Attn: Accounts Payable
114 East Main Street
Ayer, MA 01432
Or email to: ap@amsc.com

With a copy to:
American Superconductor Corporation
Attn: [***]
114 East Main Street
Ayer, MA 01432
Or email to: [***]@amsc.com
3.3.2.    AMSC shall reimburse Subcontractor for each completed Payable
Milestone accomplished in accordance with Section 3.2 and the Statement of Work,
delivered and invoiced in accordance with Section 3.3 above and approved by
AMSC, subject only to Changes effectuated pursuant to Section 7. Any cost
overruns incurred by Subcontractor as a result of Subcontractor’s negligence or
breach of its obligations to perform the Subcontractor Work pursuant to the
terms of this Agreement, will be paid entirely by Subcontractor. Any cost
overruns incurred by Subcontractor as a result of AMSC’s or AMSC’s Other
Subcontractor’s negligence or breach of its obligations to perform the AMSC
Obligations pursuant to the terms of this Agreement, will be paid by AMSC. The
Payable Milestones shall be the payment to which Subcontractor is entitled from
AMSC in consideration of the completion of the Payment Milestones and shall
become payable only after Subcontractor certifies that such Payable Milestone
has been met. Payment shall be made by wire transfer to Subcontractor of
immediately available funds in accordance with the instructions set forth
immediately below or such other instructions as Subcontractor may hereafter
provide by written notice delivered in accordance with this Agreement. Payments
will be made by AMSC to Subcontractor’s address set forth below no later than
thirty (30) days after Subcontractor delivers an invoice in accordance with
Section 3.3 hereof. Subcontractor shall provide the following payment
information to AMSC:
Bank Account of Subcontractor:
Bank Name:    
Bank Address:    
BIC:            
Account Number:    
3.4.
Letter of Credit. AMSC and Subcontractor have determined that in order to secure
Subcontractor’s right to recover certain losses that may be incurred after the
Effective Date and secure Subcontractor’s right to payment and performance
pursuant to the terms of this Agreement, AMSC

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shall deliver (or cause to be delivered) to Subcontractor a clean, irrevocable
Letter of Credit (as defined below) in form and content satisfactory to
Subcontractor, naming Subcontractor as beneficiary, a copy of which is attached
to this Agreement as Appendix D within ten (10) business days after the date on
which the first of the following events occurs: (1) AMSC and DHS have signed the
DHS Amendment, and the DHA Amendment does not contain an OTA Change pursuant to
Section 2.2.3.2; (2) the DHS Amendment contains an OTA Change and the
Subcontractor fails to deliver a Negotiation Request on or before 30 days after
receipt of a Modification Notice pursuant to Section 2.2.3.2.4; (3) the DHS
Amendment contains an OTA Change and Subcontractor provides AMSC with written
notice that it has waived its right to a Requested Adjustment pursuant to
Section 2.2.3.2.4, or (4) the DHS Amendment contains an OTA Change and the
Parties have reached an agreement with regards to the Requested Adjustment. The
Letter of Credit must be issued by an issuing financial institution having an A-
or better rating by Standard & Poor's. As used in this Agreement, “Letter of
Credit” shall mean the letter of credit delivered to Subcontractor pursuant to
this Section 3.4, any replacement letter of credit, and any amendment or renewal
of the letter of credit or the replacement letter of credit. If AMSC at any time
provides a confirming letter of credit, a replacement confirming letter of
credit or an amendment or renewal of the confirming letter of credit or the
replacement letter of credit, then the term “Letter of Credit” in this Agreement
shall also mean the confirming letter of credit as so amended, renewed or
replaced. The initial Letter of Credit to be provided under this Agreement shall
have a minimum term of one year and shall automatically renew for additional
renewal terms of no less than six (6) months through Commissioning and until the
earlier to occur of (i) 60 days after final, unconditional and non-appealable
acceptance of the HTS Cable System into the ratebase or (ii) termination of the
Warranty Period (as defined below), unless the Letter of Credit or Agreement has
already been terminated or cancelled by Subcontractor or otherwise drawn in full
by Subcontractor. The Letter of Credit shall initially be in the amount of
$5,000,000. The Letter of Credit shall be valid for such time or until
Subcontractor draws the full amount of the Letter of Credit or Subcontractor
terminates the Letter of Credit. Subject to the terms of this Agreement,
Subcontractor shall be entitled to draw on the Letter of Credit upon providing
notice within sixty (60) days following the occurrence of (a) any event that
would give rise to Subcontractor's right to terminate or draw on the Letter of
Credit pursuant to Section 2.2.8, or (b) any breach or failure to perform by
AMSC any obligation to deliver a deliverable or provide a service expressly
required or included in its respective obligations pursuant to the terms of this
Agreement or the applicable Statement of Work, in each case irrespective of
whether or not Subcontractor terminates the Agreement, or (c) [***].
3.5.    U.S. Comptroller General Access to Records. To the extent that the total
Government payments under this Agreement exceed $5,000,000 or to the extent
required by Applicable Law, the Comptroller General, at its discretion, shall
have access to and the right to examine records of any party to the Agreement or
any entity that participates in the performance of this Agreement that directly
pertain to and involve transactions relating to, the Agreement for a period of
three (3) years after final payment is made. This requirement shall not apply
with respect to any party to this Agreement or any entity that participates in
the performance of the Agreement, or any subordinate element of such party or
entity, that has not entered into any other contract, grant, cooperative
agreement, or “other transaction” that provides for audit access by a Government
entity in the 12 month period prior to the date of this Agreement. This
paragraph only applies to any record that is created or maintained in the
ordinary course of business or pursuant to a provision of law. The terms of this
paragraph shall be included in all sub-agreements to the Agreement.
SECTION 4.PROPRIETARY INFORMATION

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4.1.    Any and all Proprietary Information (as that term is defined in the NDA
and which shall also include Proprietary Information described in Section 5
herein) disclosed by either Party during the course of performance under this
Agreement shall be subject to the terms and conditions contained in the NDA, as
modified from time to time by written agreement by the Parties.
4.2.    Notwithstanding any other term of this Agreement, or any other agreement
between the Parties:
4.2.1.    Subcontractor hereby grants to AMSC, its affiliates, and their
successors and assigns a nonexclusive, worldwide, royalty­free, right under
Subcontractor’s Proprietary Information and all intellectual property owned or
controlled by Subcontractor, to perform the AMSC Obligations during the Term for
the Project, through their employees and Other Subcontractors providing services
for the Project.
4.2.2.    AMSC hereby grants to Subcontractor, its affiliates, and their
successors and assigns, a nonexclusive, worldwide, royalty­free, perpetual,
irrevocable, right under AMSC’s Proprietary Information and all intellectual
property owned or controlled by AMSC, necessary to perform the Subcontractor
Work, and use, operate and maintain the HTS Cable System and any related or
successor equipment and resources developed, delivered or deployed in connection
with the Project , through their employees and subcontractors.
4.3.    AMSC represents and warrants that other than the rights licensed
pursuant to Section 4.2, no consent of any third party is necessary to use,
operate and maintain the HTS Cable System; provided that the sole liability for
infringement, misappropriation or violation of a third party’s intellectual
property shall be set forth in Section 9.3 hereof .
SECTION 5.INTELLECTUAL PROPERTY
5.1.    Definitions.
The following is taken directly from the Prime Contract and required to be
flowed down to all subcontractors and, therefore, changes are not allowed. For
the avoidance of doubt, as used in this Article, “CONTRACTOR” means
Subcontractor and ”PRIME CONTRACT” shall also mean this Agreement.
As used in this Article, the following terms shall have the following meanings
and such meanings shall be applicable to both the singular and plural forms of
the terms. All other terms of this Section 8 shall be ascribed their plain,
commonly accepted definitions.
5.1.1.    “PRIME CONTRACT” means the Other Transaction Agreement No.
HSHQDC-08-9-00001, including the preceding letter contract, Phases 0-2, and any
modifications thereto.
5.1.2.    “AUTHORIZED CONTRACTOR” means a DHS technical support services
contractor, which is supporting the DHS OT Officer’s Representative, the
Department of Energy’s (DOE’s) national laboratories, the National Aeronautics
and Space Administration’s (NASA’s) Space Center Management Contractors and the
Contractor for the operation and management of the Jet Propulsion Laboratory,
the Department of Defense’s (DoD’s) Federally Funded Research and Development
Centers and University Affiliated Research Centers.

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5.1.3.    “BACKGROUND DATA” are any copyrightable work (WORKS), PROPRIETARY
INFORMATION, TECHNICAL DATA, or COMPUTER SOFTWARE, CREATED exclusively at
private expense prior to the award of or outside the scope of the PRIME
CONTRACT.
5.1.4.    “CREATED,” in relation to any WORK, means when the WORK is fixed in
any tangible medium of expression for the first time, as provided at 17 U.S.C. §
101. “Background Works” are Works Created outside of the PRIME CONTRACT and
“Foreground Works” are Works Created under the PRIME CONTRACT.
5.1.5.    “CRITICAL ENERGY INFRASTRUCTURE INFORMATION” means specific
engineering, vulnerability, or detailed design information about proposed or
existing critical infrastructure that: (1) relates details about the production,
generation, transportation, transmission, or distribution of energy; (2) could
be useful to a person in planning an attack on critical infrastructure; (3) is
exempt from mandatory disclosure under the Freedom of Information Act, 5 U.S.C.
552 (2000); and (4) does not simply give the general location of the critical
infrastructure. However, data that convey general operating, performance, and
evaluation of operation characteristics of the HTS/FCL cable system will be
considered FORM, FIT, and FUNCTION DATA.
5.1.6.    “DATA” means recorded information, regardless of form or the media on
which it may be recorded. The term includes TECHNICAL DATA and COMPUTER
SOFTWARE. The term does not include information incidental to contract
administration, such as financial, administrative, cost or pricing, or
management information.
5.1.7.    “FORM, FIT, AND FUNCTION DATA” means data relating to items,
components, or processes that are sufficient to enable physical and functional
interchangeability, and data identifying source, size, configuration, mating,
and attachment characteristics, functional characteristics, and performance
requirements. For computer software it means data identifying source, functional
characteristics, and performance requirements but specifically excludes the
source code, algorithms, processes, formulas, and flow charts of the software.
5.1.8.    “GOVERNMENT” or “U.S. GOVERNMENT” or “UNITED STATES GOVERNMENT” means
the Government of the United States of America. For the purpose of limitations
on the disclosure of BACKGROUND DATA, PHASES 0-2 FOREGROUND DATA, the Government
means Federal employees of DHS, DOE, NASA, and DoD.
5.1.9.    “GOVERNMENT PURPOSE” means any activity in which the GOVERNMENT is a
party, including cooperative agreements with international or multi-national
defense organizations or sales or transfers by the GOVERNMENT to foreign
governments or international organizations. GOVERNMENT PURPOSES include
competitive procurement, but do not include the rights to use, modify,
reproduce, release, perform, display, or disclose SUBJECT INVENTIONS or
GOVERNMENT PURPOSE RIGHTS DATA for commercial purposes or authorize others to do
so.
5.1.10.    “GOVERNMENT PURPOSE RIGHTS DATA” means TECHNICAL DATA OR COMPUTER
SOFTWARE that is PHASES 0-2 FOREGROUND DATA, to the extent that the type of data
is listed on Appendix B.
5.1.11.    “GOVERNMENT PURPOSE RIGHTS” means the rights to—
5.1.11.1.
Use, modify, reproduce, release, perform, display, or disclose GOVERNMENT
PURPOSE RIGHTS DATA within the GOVERNMENT for GOVERNMENT PURPOSES only; and

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5.1.11.2.
Release or disclose GOVERNMENT PURPOSE RIGHTS DATA outside the GOVERNMENT and
authorize persons to whom release or disclosure has been made to use, modify,
reproduce, release, perform, display, or disclose the GOVERNMENT RIGHTS DATA for
GOVERNMENT PURPOSES only. DHS shall assure that any non-GOVERNMENT party
receiving GOVERNMENT PURPOSE RIGHTS DATA shall be under an obligation not to
disclose or to use the GOVERNMENT PURPOSE RIGHTS DATA except for the purposes of
the PRIME CONTRACT.

5.1.12.    “INVENTION” means any invention or discovery that is or may be
patentable or otherwise protectable under Title 35 of the United States Code or
any novel variety of plant which is or may be protectable under the Plant
Variety Protection Act (7 U.S.C. § 2321 et seq.).
5.1.13.    “LIMITED RIGHTS DATA” means BACKGROUND DATA.
5.1.14.    “LIMITED RIGHTS” means the rights to use, modify, reproduce, release,
perform, display, or disclose, in whole or in part, within the GOVERNMENT but
only in connection with this Project. The GOVERNMENT may not, without the
written permission of the Contractor, release or disclose the LIMITED RIGHTS
DATA outside the GOVERNMENT, use the LIMITED RIGHTS DATA for manufacture, or
authorize the LIMITED RIGHTS DATA to be used by another party, except that the
GOVERNMENT may reproduce, release or disclose such LIMITED RIGHTS DATA or
authorize the use or reproduction of the LIMITED RIGHTS DATA by AUTHORIZED
CONTRACTORS if reproduction, release, disclosure, or use is for-
5.1.14.1.
Use (except for commercial purposes) by support service contractors related to
this Project.

5.1.14.2.
Evaluation of this Project by nongovernment evaluators.

5.1.14.3.
Use (except for commercial purposes) by other contractors participating in this
Project.

5.1.14.4.
Emergency repair or overhaul work.

5.1.15.    “MADE” in relation to any INVENTION means the conception or first
actual reduction to practice of such INVENTION.
5.1.16.    “PATENT” means an invention, for which the U.S. Patent and Trademark
Office has issued a PATENT under title 35 of the U.S. Code, or any variety of
plant that is or may be protectable under the Plant Variety Protection Act (7
U.S.C. § 2321, et seq.)
5.1.17.    “PRACTICAL APPLICATION” means to manufacture, in the case of a
composition of product; to practice, in the case of a process or method, or to
operate, in the case of a machine or system; and, in each case, under such
conditions as to establish that the INVENTION is capable of being utilized and
that its benefits are, to the extent permitted by law or GOVERNMENT regulations,
available to the public on reasonable terms.
5.1.18.    “PROPRIETARY INFORMATION” means BACKGROUND DATA, including but not
limited to that listed in Attachment 1 (“LIMITED RIGHTS PROPRIETARY
INFORMATION”) hereto, owned by CONTRACTOR which was CREATED exclusively at
private expense prior to the award of or outside the scope of the PRIME CONTRACT
and which embodies trade secrets or which:

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5.1.18.1.
Is not generally known, or is not available from other sources without
obligation restricting its disclosure;

5.1.18.2.
Has not been made available by the owners to others without obligation
restricting its disclosure;

5.1.18.3.
Is not described in an issued patent or a published copyrighted work or is not
otherwise available to the public without obligation restricting its disclosure;
or

5.1.18.4.
Can be withheld from disclosure under the Freedom of Information Act, 5 U.S.C. §
552 et seq.; and

5.1.18.5.
Is identified as such by labels or markings designating the information as
proprietary.

5.1.19.    “SPECIAL PURPOSE LICENSE” means a license to the GOVERNMENT conveying
a nonexclusive, nontransferable, irrevocable, worldwide, royalty-free license to
practice and have practiced any SUBJECT INVENTION for or on behalf of the
GOVERNMENT for GOVERNMENT PURPOSES only.
5.1.20.    “SUBJECT INVENTION” means any INVENTION of any party MADE by its
employees under the PRIME CONTRACT.
5.1.21.    “TECHNICAL DATA” means recorded information of a scientific or
technical nature, regardless of form or the media on which it may be recorded,
CREATED or used under the PRIME CONTRACT. The term includes TECHNICAL DATA and
COMPUTER SOFTWARE.
5.1.22.    “COMPUTER SOFTWARE” as used in this clause, means computer programs,
computer data bases, and documentation thereof, CREATED or used under the PRIME
CONTRACT.
5.1.23.    “UNLIMITED RIGHTS” means the rights of the GOVERNMENT to use,
disclose, reproduce, prepare derivative works, distribute copies to the public,
and perform publicly and display publicly, in any manner and for any purpose,
and to have or permit others to do so.
5.2.    Patents.
5.2.1.    PATENT Identification.
5.2.1.1.
The CONTRACTOR has provided a listing of all PATENTS and pending PATENT
applications owned by the CONTRACTOR and its subcontractors associated with the
technology that is being pursued under the PRIME CONTRACT, classified as
BACKGROUND PATENTS or as SUBJECT INVENTIONS, which listing is attached as
Appendix B.

5.2.1.2.
PATENT Indemnity.

5.2.1.2.1.
The CONTRACTOR shall indemnify AMSC and its officers, agents, and employees
against liability, including costs, for infringement of any United States PATENT
(except a PATENT issued upon an application that is now or may hereafter be
withheld from issue pursuant to a Secrecy Order under 35 U.S.C. § 181) arising
out of the manufacture or delivery of supplies, the performance of services, or

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the construction, alteration, modification, or repair of real property
(hereinafter referred to as “construction work”) under the Agreement, or out of
the use or disposal by or for the account of AMSC of such supplies or
construction work, but only in the event the infringement liability is based
solely on the use, manufacture, offering for sale, sale, or importation of the
deliverables provided by CONTRACTOR in accordance with this Agreement and any
related BACKGROUND PATENTS. For avoidance of doubt, if the infringement
liability is based on supplies, services, or construction work (A) covered by
the SUBJECT INVENTIONS listed in Appendix B, (B) provided by AMSC or any other
subcontractor of AMSC or (C) provided pursuant to services for any other portion
of the Project not required pursuant to Section 2.2, CONTRACTOR shall have no
indemnity obligation pursuant to this Agreement.
5.2.1.2.2.
This indemnity shall not apply unless the CONTRACTOR shall have been informed as
soon as practicable by the GOVERNMENT of the suit or action alleging such
infringement and shall have been given such opportunity as is afforded by
applicable laws, rules, or regulations to participate in its defense. Further,
this indemnity shall not apply to:

(A)    An infringement resulting from compliance with specific written
instructions of the DHS OT Officer directing a change in the supplies to be
delivered or in the materials or equipment to be used, or directing a manner of
performance of the PRIME CONTRACT not normally used by the CONTRACTOR;
(B)    An infringement resulting from addition to or change in supplies or
components furnished or construction work performed that was made subsequent to
delivery or performance;
(C)    A claimed infringement that is unreasonably settled without the consent
of the CONTRACTOR, unless required by final decree of a court of competent
jurisdiction; or
(D)    An infringement resulting from: (1) the performance of AMSC or any other
subcontractor of AMSC; or (2) compliance with specific written instructions of
AMSC directing a change in the supplies to be delivered or in the materials or
equipment to be used, or directing a manner of performance of the Agreement not
normally used by the Subcontractor.
5.2.1.3.
For the purposes of this sub-clause “GOVERNMENT” shall mean AMSC.

5.2.2.    Disclosure of SUBJECT INVENTIONS. The CONTRACTOR will promptly
disclose to the DHS OT Officer any SUBJECT INVENTION that is MADE by its
employees or is MADE under any of the CONTRACTOR’s subcontracts after the
execution of this Agreement.
5.2.3.    Allocation of Principal Rights. Each party shall separately own any
SUBJECT INVENTIONS made solely by its employees under the PRIME CONTRACT. The
parties shall jointly own SUBJECT INVENTIONS MADE jointly by the GOVERNMENT and
any CONTRACTOR employees under the PRIME CONTRACT. The CONTRACTOR hereby grants
the GOVERNMENT a SPECIAL PURPOSE LICENSE to each SUBJECT INVENTION.

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5.2.4.    Action to Protect the GOVERNMENT’s Interest.
5.2.4.1.
The CONTRACTOR agrees to execute or to have executed and promptly deliver to
GOVERNMENT all instruments necessary to establish or confirm the rights the
GOVERNMENT has throughout the world in those SUBJECT INVENTIONS.

5.2.4.2.
The CONTRACTOR shall include, within the specification of any United States
PATENT application and any PATENT issuing thereon covering a SUBJECT INVENTION,
the following statement: “This invention was made with Government support under
Agreement No.: HSHQDC-08-9-00001. The Government has certain rights in the
invention.”

5.2.5.    Reporting on Utilization of SUBJECT INVENTIONS. Upon request by the
GOVERNMENT, the CONTRACTOR shall submit a final report on the utilization of
SUBJECT INVENTIONS or on efforts at obtaining such utilization that are being
made by the CONTRACTOR or its licensees or assignees. The report shall include
information regarding the status of development, date of first commercial sale
or use, gross royalties received by the CONTRACTOR, its subcontractor(s), and
such other data and information as the GOVERNMENT may reasonably specify. The
CONTRACTOR also agrees to provide additional reports as may be requested by the
GOVERNMENT. The GOVERNMENT shall not disclose such information to persons
outside the GOVERNMENT without permission of the CONTRACTOR.
5.2.6.    Non-exclusive Licenses to Others. In addition to the SPECIAL PURPOSE
LICENSE, the CONTRACTOR, its exclusive licensee, or any assignee agree to grant
a non-exclusive license(s) to a responsible applicant(s), upon terms that are
reasonable under the circumstances, if:
5.2.6.1.
The CONTRACTOR or assignee has not taken effective steps, consistent with the
intent of the PRIME CONTRACT, to achieve practical application of the SUBJECT
INVENTION within 5 years of the termination or expiration of the PRIME CONTRACT;

5.2.6.2.
Such action is necessary to alleviate health or safety needs that are not
reasonably satisfied by the CONTRACTOR, its exclusive licensees, or any
assignee; or

5.2.6.3.
Such action is necessary to meet requirements for public use and such
requirements are not reasonably satisfied by the CONTRACTOR, its exclusive
licensee, or assignee.

If the CONTRACTOR, exclusive licensee, or assignee refuses to grant such a
non-exclusive license, the GOVERNMENT has the right to seek resolution through
the disputes process set forth in the Prime Contract.
5.3.    Copyrights
5.3.1.    COPYRIGHT Ownership. The CONTRACTOR shall own the copyright in all
Foreground and Background Works which are copyrightable under Title 17, United
States Code. The Contractor shall have the option to register the copyright at
the Contractor’s expense.
5.3.2.    Rights to the GOVERNMENT. The CONTRACTOR hereby grants to the
GOVERNMENT:

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5.3.2.1.
UNLIMITED RIGHTS in all FORM, FIT, AND FUNCTION DATA and all Phase 0-2
FOREGROUND DATA, except to the extent that the PHASE 0-2 FOREGROUND DATA
qualifies and is properly marked as:

5.3.2.1.1.
One of the types of data listed on Appendix B (LIMITED RIGHTS PROPRIETARY
INFORMATION/GOVERNMENT PURPOSE RIGHTS DATA AND SOFTWARE);

5.3.2.1.2.
GOVERNMENT PURPOSE RIGHTS DATA produced under Phases 0-2; or

5.3.2.1.3.
LIMITED RIGHTS.

5.3.3.    Disclosure. The CONTRACTOR shall furnish to the GOVERNMENT, at no cost
to the GOVERNMENT and upon written request by the GOVERNMENT, three (3) copies
of each FOREGROUND DATA deliverable, if the WORK is required to be delivered to
the GOVERNMENT under the PRIME CONTRACT.
5.3.4.    Additional Data Requirements.
5.3.4.1.
In addition to the TECHNICAL DATA or COMPUTER SOFTWARE specified to be delivered
under the PRIME CONTRACT, the DHS OT Officer may, at any time during the PRIME
CONTRACT performance or within a period of 3 years after acceptance of all items
to be delivered under this the PRIME CONTRACT, order any data CREATED or
specifically used in the performance of the PRIME CONTRACT.

5.3.4.2.
When data are to be delivered under this clause, the Contractor will be
compensated for converting the data into the prescribed form, for reproduction,
and for delivery.

5.3.5.    Consultation Before Disclosure.
5.3.5.1.
In the performance of Phase 2, DHS may need to disclose LIMITED RIGHTS DATA or
GOVERNMENT PURPOSE RIGHTS DATA, whether the DATA originated under Phases 0-2, to
third parties for assistance in its oversight of the Project. Paragraphs (b) and
(c) of this clause describe the process by which that DATA will be made
available.

5.3.5.2.
Prior to DHS’s disclosing any LIMITED RIGHTS DATA and PHASES 0-2 FOREGROUND DATA
to AUTHORIZED CONTRACTORS, DHS will provide notice to the CONTRACTOR and allow a
review for identification of relevant, competing work’s being performed by the
same entity on a competing technology. Should any such circumstance be
identified, DHS will acquire relevant facts, and the Parties will consult to
reach a mutually agreeable strategy to safeguard the specific LIMITED RIGHTS or
PHASES 0-2 FOREGROUND DATA.

5.3.5.3.
Prior to DHS’s disclosing any GOVERNMENT PURPOSE RIGHTS DATA outside of DHS, DHS
will provide the notice to the CONTRACTOR.

5.3.5.4.
The parties agree to confer and consult with each other prior to publication or
other public disclosure of the results of work under the PRIME CONTRACT to
ensure that no LIMITED RIGHTS DATA or GOVERNMENT PURPOSE RIGHTS DATA and/or
military critical technology or other controlled information is released. No
CRITICAL ENERGY

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INFRASTRUCTURE INFORMATION may be disclosed without the prior written consent of
the party who owns such information. Prior to submitting a manuscript for
publication or before any other public disclosure, each party will offer the
other party ample opportunity to review and approve such proposed publication or
disclosure, to submit objections, and to file applications for PATENTS in a
timely manner. It is understood and agreed between the parties that the
Contractor may need to consult with and obtain approval from a subcontractor or
other third party whose information may be included in a proposed publication or
disclosure and that Contractor will be afforded ample opportunity to do so.
5.4.    Subcontract Agreements. The CONTRACTOR shall include this Section 8,
suitably modified, to identify the Parties, in all subcontracts or lower tier
agreements, regardless of tier.
SECTION 6.DELIVERY AND INSTALLATION
6.1.    Delivery. Each Party shall be responsible for the delivery of all
deliverables and the performance of all services required or included in its
respective obligations pursuant to the terms of this Agreement and the Statement
of Work.
6.2.    Each Party shall diligently pursue and otherwise use commercially
reasonable efforts to render its performance in accordance with this Agreement
and the Statement of Work.
6.3.    If a delivery is not completed in accordance with the schedule in
Section 3.2 or Appendix A (the “Delivery Breach”), the Party obligated to
deliver shall promptly notify the other Party of the estimated date for
conforming delivery. The receipt or acceptance of all or part of a
non-conforming delivery shall not constitute a waiver of any claim, right or
remedy of the receiving Party under this Agreement or under applicable law.
6.4.    Installation of the Project. Each Party shall be responsible for the
protection and care of the Project equipment and materials of the other Party
while in the control or possession of such receiving Party or its
subcontractors. Subcontractor shall make regular and diligent progress to
complete the installation and energization of the Project in accordance with the
terms and conditions of this Agreement.
SECTION 7.CHANGES
7.1.    Any Party may request, at any time and from time to time, by written
notice to the other Party, a change in Project specifications or designs, or to
the method of packing or shipment, quantity ordered, destination or delivery
schedule of Project equipment (each a “Proposed Change”). If any such Proposed
Change causes an increase or decrease in Subcontractor’s cost and/or the time
for performance, Subcontractor shall notify AMSC in writing within fifteen (15)
days after the date of written notice of the Proposed Change and such notice by
Subcontractor shall include details of any cost and/or schedule impact, as
applicable (“Change Proposal”). If AMSC and Subcontractor agree to the Change
Proposal, AMSC shall submit such Change Proposal to DHS, and upon written
approval by DHS, including approval of an increase in costs and DHS’s obligation
to reimburse such increased costs related to the Change Proposal, Subcontractor
and AMSC shall implement the Proposed Change. Both parties acknowledge that the
time

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to process a Proposed Change may increase the overall Project schedule and that
each Party will bear its own costs associated with that delay. If AMSC or
Subcontractor does not agree to such Change Proposal or DHS does not approve
such Proposed Change, the Parties shall continue the performance of their
obligations hereunder and the Proposed Change shall not be effective. In no
event shall either Party be bound by any Change Proposal or Proposed Change
absent a written change order executed by Subcontractor and AMSC.
7.2.    Notwithstanding Section 7.1, AMSC shall agree to implement any Proposed
Change to the extent Technically Feasible upon Commercially Reasonable Terms and
shall agree to implement any Proposed Change without additional charge or
schedule change to the extent the Proposed Change does not require material
deviations from any Statement of Work, or from costs otherwise projected for
such changed item. As used in this Section 7.2, the term “Technically Feasible”
means capable of accomplishment as evidenced by prior commercial success within
the superconductor industry for similar projects deployed worldwide; and
“Commercially Reasonable Terms” means both financial and commercial terms that,
individually and in the aggregate, are consistent with concepts of good faith
and fair dealing and are no less favorable to Subcontractor than those contained
in this Agreement, if any, and to other AMSC customers in similar circumstances
for similar work, if any.
SECTION 8.REPORTING
8.1.    Subcontractor shall submit reports (the "Reports") to AMSC at such times
and frequencies and containing such information as is required in writing by DHS
or set forth in the applicable Statement of Work or required under the Prime
Contract.
8.2.    Subcontractor represents and warrants that, to the best of its knowledge
after due inquiry, all information included in the Reports shall be true and
accurate in all material respects.
8.3.    Subcontractor expressly acknowledges and understands that the Reports
may be delivered by AMSC to the DHS.
8.4.    AMSC shall have no obligation to Subcontractor to review the Reports,
and neither Party shall be liable for claims made by third parties, except for
any United States government agency, against the other Party for any errors or
omissions in the Reports required or provided by such other Party.
SECTION 9.INDEMNITY AND LIMITATION OF LIABILITY
9.1.    Indemnification by Subcontractor. Subcontractor shall indemnify, defend
and hold harmless AMSC, its affiliates and each of their respective officers,
directors, employees, agents, successors and permitted assigns from and against
any claim, loss, damage, liability or expense (including reasonable attorney’s
fees) arising out of any personal injury (including death) to or property damage
experienced by any third party, including without limitation AMSC’s employees,
subcontractors and independent contractors, as a result of: (i) death or bodily
injury to the extent caused by Subcontractor, its subcontractors or any
affiliate thereof; (ii) the gross negligence or willful and/or reckless acts or
omissions of Subcontractor or of its employees or subcontractors in its
performance of its obligations

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under this Agreement (except to the extent resulting from the acts taken or
omitted by Subcontractor or its employees or subcontractors at the direction of
AMSC or its subcontractors, or for any design or specifications provided by AMSC
or its subcontractors); (iii) Subcontractor’s failure to pay and discharge any
taxes (including interest and penalties) for which Subcontractor is responsible;
or (iv) any claim that any employee of Subcontractor, its affiliates, its
contractors, or subcontractors is an employee of AMSC or a jointly employed by
Subcontractor and AMSC. To receive the benefit of indemnification under this
Section, the indemnified party must promptly notify Subcontractor of a claim or
suit and provide reasonable cooperation (at Subcontractor’s expense) and tender
to Subcontractor (and its insurer) full authority to defend or settle the claim
or suit (provided that Subcontractor shall obtain AMSC’s prior written consent
to any settlement that admits fault or wrongdoing on the part of AMSC or
obligates AMSC to pay any amount not fully indemnified under this Agreement).
Subcontractor has no obligation to indemnify for any settlement made without its
consent or for any claim to the extent lack of prompt notice shall have
prejudiced Subcontractor.
9.2.    Indemnification by AMSC. AMSC shall indemnify, defend and hold harmless
Subcontractor, its affiliates and each of their respective officers, directors,
employees, agents, successors and permitted assigns from and against any claim,
loss, damage, liability or expense (including reasonable attorney’s fees)
arising out of any personal injury (including death) to or property damage
experienced by any third party, including without limitation Subcontractor’s
employees, subcontractors and independent contractors, as a result of: (i) death
or bodily injury to the extent caused by AMSC, its subcontractors or any
affiliate thereof (ii) the gross negligence or willful and reckless misconduct
of AMSC in its performance of its obligations under this Agreement (except to
the extent resulting from the acts taken or omitted by AMSC or its employees or
subcontractors at the direction of Subcontractor or its subcontractors, vendors
or agents or for any design or specifications provided or approved by
Subcontractor or its subcontractors, vendors or agents); (iii) AMSC’s failure to
pay and discharge any taxes (including interest and penalties) for which AMSC or
its subcontractors is responsible, or any lien or encumbrance placed upon the
property of Subcontractor or its affiliates or subcontractors in connection with
this Agreement as a result of AMSC or its subcontractor's acts or omissions; or
(iv) any claim that any employee of AMSC, its affiliates, its contractors, or
subcontractors is an employee of Subcontractor or a jointly employed by
Subcontractor and AMSC. To receive the benefit of indemnification under this
Section, the indemnified party must promptly notify AMSC of a claim or suit and
provide reasonable cooperation (at AMSC’s expense) and tender to AMSC (and its
insurer) full authority to defend or settle the claim or suit (provided that
AMSC shall obtain Subcontractor’s prior written consent to any settlement that
admits fault or wrongdoing on the part of Subcontractor or obligates
Subcontractor to pay any amount not fully indemnified under this Agreement).
AMSC has no obligation to indemnify for any settlement made without its consent
or for any claim to the extent lack of prompt notice shall have prejudiced AMSC.
9.3.    Intellectual Property Indemnity
9.3.1.    Indemnity. Each Party (the “Indemnifying Party”) shall indemnify,
defend and hold the other Party, its affiliates and each of their respective
officers, directors, employees, agents, successors and permitted assigns (the
“Indemnified Party”) harmless from and against all liabilities, damages,
expenses, judgments and losses (including reasonable attorneys’ fees) (“Losses”)
arising from claims raised by any

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third party alleging infringement, misappropriation or violation of such third
party’s intellectual property as a result of the Indemnified Party’s use of
products, equipment, technology and/or systems (the “Products”) supplied by the
Indemnifying Party, provided that the Indemnified Party provides to the
Indemnifying Party prompt written notice of such claim, reasonable assistance in
connection with the defense of such claim, and control over the negotiation,
litigation, and settlement of such claim.
9.3.2.    Remedy for Infringement.
9.3.2.1.
If the Indemnified Party’s continued use of the Product is restricted or
prohibited as a result of any such infringement, misappropriation, or violation
of third party rights, Indemnifying Party shall, at Indemnified Party’s option
and at no charge to Indemnified Party, and in addition to Indemnified Party’s
other rights and remedies under this Section 9.3, (i) obtain for Indemnified
Party the right to continue using the such Product; (ii) modify the item(s) in
question so that it is no longer infringing (provided that such modification
does not degrade the performance or quality of the Product or adversely affect
Indemnified Party’s intended use thereof as contemplated in this Agreement); or
(iii) replace such item(s) with a non-infringing functional equivalent, provided
that Indemnifying Party makes commercially reasonable efforts to ensure that the
implementation of such equivalent does not have any adverse impact on
Indemnified Party use thereof or performance of any of its business operations
related thereto.

9.3.2.2.
If none of Section 9.3.2.1(i), (ii) or (iii) is available to Indemnifying Party
after exercising all commercially reasonable efforts, it shall have the right to
require Indemnified Party to cease using and to remove the affected Product,
provided that Indemnified Party shall maintain all rights and remedies otherwise
available under this Section 9.3.

9.3.2.3.
Notwithstanding the foregoing, Indemnifying Party shall not have any obligation
of indemnification under Section 9.3 to the extent that such infringement or
misappropriation is directly attributable to: (i) modifications made by
Indemnified Party or any other party after delivery to Indemnified Party (other
than at Indemnifying Party’s direction) if such infringement or misappropriation
would not have occurred but for such modification, (ii) the combination of the
Product with items not furnished, specified or reasonably anticipated by
Indemnifying Party to be used by Indemnified Party or contemplated by this
Agreement if such infringement or misappropriation would not have occurred but
for such combined use, (iii) any infringement or misappropriation arising from
Indemnifying Party’s compliance with Indemnified Party’s designs,
specifications, or directions if such infringement or misappropriation would not
have occurred but for such compliance and Indemnifying Party had no reasonable
basis for knowing that such compliance would result in an infringement or
misappropriation, or (iv) any intellectual property or Proprietary Information
in which the Indemnified Party or any affiliate of the Indemnified Party has an
ownership interest or license (independent of this Agreement).

9.3.3.    Sole Liability. Except to the extent set forth in Section 5, this
section states the Indemnifying Party’s sole liability for intellectual property
infringement for which the Indemnifying Party is responsible hereunder. If there
is a conflict between Section 5.2.1.2 and this Section 9.3., Section 5.2.1.2
shall govern.

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9.4.    Survival. The Parties’ respective indemnity obligations shall survive
completion of the work and, in any event, for [***] ([***]) years after the
earlier to occur of (a) termination of this Agreement and (b) [***] years from
the date of Commissioning; provided that with respect to any claims for
indemnification for which a party has provided notice to the other party within
such period, the rights and obligations of the parties with respect to such
indemnified claims shall continue through the full and final resolution of such
claims.
9.5.
Limitation of Liability. EXCEPT WITH REGARD TO CAUSES OF ACTIONS ARISING FROM A
PARTY’S OR ITS AFFILIATE’S OR SUBCONTRACTORS’ FRAUD, GROSS NEGLIGENCE OR WILLFUL
AND INTENTIONAL MISCONDUCT, A BREACH OF CONFIDENTIALITY OBLIGATIONS OR DAMAGES
FOR INDEMNIFICATION FOR BODILY INJURY OR DEATH AS SET FORTH IN, AND SUBJECT TO
THE PROVISIONS OF, SECTIONS 9.1 AND 9.2 OF THIS AGREEMENT (COLLECTIVELY, “CAUSES
OF ACTION”), THE AGGREGATE LIABILITY OF EACH PARTY, ITS AFFILIATES AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, SUBCONTRACTORS AND SUPPLIERS
IN ANY AND ALL CAUSES OF ACTION ARISING UNDER, OUT OF, OR IN RELATION TO THIS
AGREEMENT, OR THE PERFORMANCE, BREACH OR TERMINATION OF THIS AGREEMENT SHALL NOT
EXCEED TWENTY MILLION DOLLARS (US$20,000,000), REGARDLESS OF WHETHER THE CAUSE
OF ACTION ARISES IN TORT, INCLUDING, WITHOUT LIMITATION, NEGLIGENCE OR STRICT
LIABILITY, IN CONTRACT, UNDER STATUTE OR OTHERWISE.

9.6.    Waiver of Consequential Damages. EXCEPT WITH REGARD TO CAUSES OF ACTIONS
ARISING FROM A PARTY’S OR ITS AFFILIATE’S OR SUBCONTRACTORS’ FRAUD, GROSS
NEGLIGENCE OR WILLFUL AND INTENTIONAL MISCONDUCT, A BREACH OF CONFIDENTIALITY
OBLIGATIONS OR DAMAGES FOR INDEMNIFICATION FOR BODILY INJURY OR DEATH AS SET
FORTH IN, AND SUBJECT TO THE PROVISIONS OF, SECTIONS 9.1 AND 9.2 OF THIS
AGREEMENT, NO PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES.
SECTION 10.INSURANCE
10.1.    AMSC shall provide and maintain in effect during the performance of any
AMSC Obligations under the Statement of Work and this Agreement minimum
insurance coverage with carriers authorized to conduct business in the State in
which the AMSC Obligations is to be done and otherwise reasonably satisfactory
to Subcontractor for a period beginning on the Effective Date and remaining in
effect for not less than three (3) years from the date of Commissioning, and in
no event less than the duration of this Agreement, including: (a) Workers
Compensation insurance with statutory limits, as required by the state in which
the AMSC Obligations are to be performed; (b) Employer’s liability insurance
with limits of not less than one million dollars ($1,000,000.00) each accident
for bodily injury by accident, each employee for bodily injury by disease, and
policy limit; (c) Commercial general liability (CGL) insurance (with coverage
consistent with ISO Form CG 00 01 12 07 or its equivalent with a limit of not
less than four million dollars ($4,000,000.00) per occurrence and per project or
per location aggregate, covering liability for bodily injury and property
damage, arising from premises, operations, independent contractors, personal
injury/advertising injury, and products/completed operations . CGL insurance
includes coverage for claims against Subcontractor for injuries to AMSC
personnel; (d) Automobile liability insurance coverage (including coverage for
claims against Buyer for injuries to AMSC personnel) for owned, non-owned, and
hired autos with a limit of not less than two million dollars ($2,000,000.00)
per accident; (e) Errors and Omissions insurance coverage with a limit of not
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dollars ($20,000,000); and (f) Excess or Umbrella liability insurance coverage
(including coverage for claims against Subcontractor for injuries to AMSC
personnel) with a limit of not less than twenty million dollars ($20,000,000)
per occurrence. These limits apply in excess of each of the above mentioned
policies. Excess coverage shall be follow form. The liability limits under
Sections 10(c), 10(d) and 10(f) may be met with any combination of primary and
Excess or Umbrella Insurance policy limits totaling twenty million dollars
($20,000,000).    
10.2.    If any policy is written on a claims made basis, the retroactive date
may not be advanced beyond the date of the first Statement of Work and coverage
shall be maintained in full force and effect for five (5) years after
termination of this Agreement and all Statements of Work. AMSC shall be
responsible for any deductibles or self-insured retentions applicable to the
insurance provided in compliance with Section 10. To the extent permitted by
Applicable Laws, unless otherwise provided, all above-mentioned insurance
policies shall:(1) Except for excess/umbrella liability, workers’ compensation
and automobile liability insurance be primary and non-contributory to any other
insurance carried by Subcontractor; (2) Contain cross-liability coverage as
provided under standard ISO Forms’ separation of insureds clause; (3) Provide
for a waiver of all rights of subrogation which AMSC’s insurance carrier might
exercise against Subcontractor; (4) Not require contribution before any Excess
or Umbrella liability coverage will apply; (5) having ratings of A-/VII or
better in the Best’s Key Rating Insurance Guide (latest edition in effect at the
latest date stated in the Certificate of Insurance; and (6) not include any
endorsement limiting coverage available to Subcontractor which is otherwise
required by this Section 10.
10.3.    All liability insurance policies shall name Subcontractor and its
affiliates and their officers, directors, employees, agents, representatives,
affiliates, subsidiaries, successors, and assigns, as additional insureds, shall
be primary to any other insurance carried by Subcontractor, and shall provide
coverage consistent with ISO Form CG 2026 (11/85), or the combination of ISO
Form CG 20 10 04 13 and CG 20 37 04 13, or their equivalents, and shall maintain
the required coverages (including but not limited to coverage for claims against
Subcontractor for injuries to AMSC Personnel), for a period of not less than
five (5) years from the date of termination of this Agreement. AMSC shall
provide evidence of the required insurance coverage and file with Subcontractor
a Certificate of Insurance acceptable to Subcontractor prior to commencement of
the AMSC Obligations.
SECTION 11.
ASSIGNMENT AND AMENDMENT

11.1.    Assignment. This Agreement may not be assigned or transferred, in whole
or in part, by either Party without the prior written consent of the other
Party, which consent shall not be unreasonably withheld or delayed.
11.2.    Amendment. This Agreement may not be amended except by a written
instrument, signed by the Parties.
SECTION 12.NOTICES
12.1.    All notices required or permitted to be given under this Agreement
shall be in writing and signed by or on behalf of the Party giving it and shall
be given by hand delivery, courier or by prepaid recorded airmail to the
respective addresses for the Party to receive it as shown below (or at such
other address as such Party shall have specified by a notice given to the other
Party hereto in accordance with this Section 12.1). All such notices shall be
deemed to be given (i) if delivered by hand or courier, when delivered, and

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(ii) if sent by prepaid recorded airmail delivery or regulated airmail post,
upon receipt; provided, however, that any delivery made after 5:00 pm on a
business day or at any time on a non-business day shall be deemed to be received
on the next following business day.
12.1.1.
Notice to AMSC shall be given to:

American Superconductor Corporation
114 East Main Street
Ayer, MA 01432
Attention: [***]
Telephone: [***]
[***]@amsc.com
With a copy to:
American Superconductor Corporation
114 East Main Street
Ayer, MA 01432
Attention: General Counsel
legal@amsc.com
12.1.2.
Notices to Subcontractor shall be given to:

Commonwealth Edison
One Lincoln Center
Oak Brook Terrace, IL 60181
Attention: [***]
office [***]
[***]@exeloncorp.com

With a copy to (which copy shall not be deemed notice):
[***]Ballard Spahr LLP
1735 Market St., Suite 5100
Philadelphia, PA 19103
Telephone: [***]
SECTION 13.
REPRESENTATIONS AND WARRANTIES

13.1.    Organization and Qualification of the Parties. Each Party represents
and warrants that it is duly organized, validly existing and in good standing
under the laws of the state of its formation and has all necessary power and
authority to enter into this Agreement and the agreements contemplated
hereunder, including without limitation its agreements with subcontractors to
carry out its obligations hereunder. Each Party is duly licensed or qualified to
do business and is in good standing in each jurisdiction where such licensing or
qualification is necessary to perform its obligations hereunder, except for such
failure to license or qualify that would not reasonably be expected to have an
adverse effect on such Party’s ability to perform its obligations pursuant to
the terms hereof.

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13.2.
Authorization and Authority. The execution and delivery of this Agreement and
any ancillary documents related hereto, the performance of each Party of its
obligations hereunder are within each Party’s corporate powers and have been
duly authorized by all necessary action on the part of each Party. This
Agreement has been duly executed and delivered by each Party, and (assuming due
authorization, execution and delivery by the other parties thereto) this
Agreement constitutes, the legal, valid and binding obligations of each Party
enforceable against each Party in accordance with its respective terms, subject
only to (i) applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, or other laws of general application relating to or
affecting the enforcement of creditors’ rights generally, and (ii) as limited by
laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies.

13.3.    Compliance with Laws. Each Party has conducted its business in
accordance with all material respects of Applicable Laws and is not in violation
of any Applicable Law, except for such failure to comply or violations that
would not reasonably be expected to have an adverse effect on such Party’s
ability to perform its obligations pursuant to the terms hereof.
13.4.    Except for the permits required to be obtained by Subcontractor set
forth on Appendix A, Subcontractor has obtained or will obtain in a timely
manner all approvals and consents of third parties necessary for it to perform
its obligations under this Agreement.
13.5.    AMSC has obtained or will obtain in a timely manner all approvals and
consents of third parties necessary for it to perform its obligations under this
Agreement.
13.6.    This Agreement constitutes the valid and binding agreement of the
Parties, enforceable against each Party in accordance with its terms, subject
only to (i) applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, or other laws of general application relating to or
affecting the enforcement of creditors’ rights generally, and (ii) as limited by
laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies.
13.7.    AMSC represents that the Refrigeration System (as defined in Appendix
A) together with the Bailed Property (as defined below) are sufficient to
support, use, operate and maintain the HTS Cable System. This representation
shall expire and be of no further force and effect upon Commissioning. Upon
Commissioning, Subcontractor shall forever release and waive any and all claims
and rights under this Section 13.7, including without limitation its right to
rescission. For the avoidance of doubt, nothing in this Section 13.7 shall
affect Subcontractor’s rights under Section 16.
SECTION 14.EXPORT REGULATIONS
14.1.    All technical data or commodities of United States origin made
available directly or indirectly hereunder shall be used subject to and in
accordance with Applicable Laws and regulations of the departments and agencies
of the United States Government. Each Party agrees not to export or re-export,
directly or indirectly, any technical data of United States origin acquired from
the other Party or any commodities using such data to any destination requiring
United States Government approval for such re-

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export until a request for approval, if necessary, has been submitted to and
granted by the United States Government.
SECTION 15.TRANSFER OF OWNERSHIP
15.1.    Except as otherwise set forth in this Agreement, title and risk of loss
of the equipment shall pass to Subcontractor upon Acceptance.
15.2.    The site shall remain under Subcontractor’s control throughout the
Project and Warranty Period. Subcontractor shall comply with Subcontractor’s
jobsite security procedures and at all times conduct operations under this
Agreement in a manner to mitigate the risk of loss, theft, or damage by
vandalism, sabotage or any other means to any work, materials, equipment or
other property.
SECTION 16.INSPECTION AND WARRANTY
16.1.
Material Warranty. For a period of [***] ([***]) years from date of
Commissioning, however not exceeding a maximum period of [***] ([***]) months
from the date of shipment of the cable system to Subcontractor (the “Warranty
Period”), AMSC warrants that the HTS Cable System, software and materials
required to be provided or verified by AMSC pursuant to this Agreement,
including Appendix A, AMSC Specific Responsibilities ("Material") and all
components thereof, and HTS Cable System as a whole, will: (1) comply with the
Specifications for such Materials, including the HTS Cable System as a whole,
whether existing on the date hereof or developed pursuant to the terms hereof,
and the terms of this Agreement, (2) be free from defects in design, workmanship
and materials, (3) be conveyed to Subcontractor with good and merchantable
title, (4) be free and clear of all security interests, liens, encumbrances or
claims of AMSC, Other Subcontractors and third-party suppliers, (5) be free of
any claim of unfair competition, (6) be fit for the particular purpose intended
therefor to the extent such purpose is set forth in, or reasonably anticipated
by, the Agreement, (7) be sourced, manufactured, sold and delivered in
accordance with the then-prevailing Applicable Laws, and industry standards and
practices, (8) be fully tested in accordance with the Agreement, (9) be of new
or unused manufacture, unless specifically noted otherwise in the Agreement, and
(10) be interoperable in accordance with the HTS Cable System requirements and
Specifications with the system components in which such Material is installed.

16.2.    Services Warranty. For the duration of the Warranty Period, AMSC
warrants that the services required to be provided by AMSC pursuant to this
Agreement, including Appendix A, AMSC Specific Responsibilities ("Services")
furnished to Subcontractor under this Agreement will: (1) comply with the
operational metrics defined as the circuit and HTS Cable System as a whole,
shall be able to operate pursuant to the Specifications and at the design
ampacity rating and not have to be de-rated because of HTS Cable System
deficiencies, (2) be free from defects in design, workmanship and materials, (3)
be conveyed to Subcontractor with good and merchantable title, (4) be free and
clear of all security interests, liens, encumbrances or claims of AMSC, Other
Subcontractors and third-party suppliers, and (5) be free of any claim of unfair
competition, (6) fit for the particular purpose intended therefor to the extent
such purpose is set forth in, or reasonably anticipated by, the Agreement, (7)
be performed in accordance with the then-

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prevailing Applicable Laws, and industry standards and practices, and (8) be
fully tested in accordance with the Agreement.
16.3.    Remedies.
16.3.1.    Material. If any Material does not comply with the foregoing
warranties and Subcontractor gives AMSC notice of such noncompliance within the
Warranty Period, then AMSC will (at its sole expense) promptly correct by repair
or replacement any non-conforming Material such that it complies with the
foregoing warranties and shall reimburse Subcontractor for the actual and
reasonable cost to repair or replace any Subcontractor parties’ property damaged
by such non-conforming Material as soon as reasonably possible. [***]. Subject
to the limitations in Section 9.5 and 9.6, all costs and expenses associated
with the identification of non-conforming Material, repair or replacement of
Material or Subcontractor property, including Subcontractor’s and AMSC’s
investigations and root cause analyses; gaining access to or removal or
replacement of systems, structures or other parts of Subcontractor’s facility
and all transportation costs will be paid by AMSC, and Subcontractor may charge
AMSC all reasonable expenses of unpacking, examining, repacking and reshipping
any rejected Material. All warranties for any repaired or replaced Material will
terminate at the end of the Warranty Period.
16.3.2.    Services. If any of the Services do not comply with the foregoing
warranties and Subcontractor notifies AMSC within the Warranty Period, then AMSC
will (at its sole expense) promptly re-perform the nonconforming Services such
that it complies with the foregoing warranties and shall reimburse Subcontractor
for the actual and reasonable cost to repair or replace any Subcontractor
property damaged by such nonconforming Services as soon as reasonably possible.
Subject to the limitations of Section 9.5 and 9.6, all costs and expenses
associated with the identification of the non-conforming Services,
re-performance of the nonconforming Services and repair or replacement of
Subcontractor property, including Subcontractor’s and AMSC’s investigations and
root cause analyses; gaining access to or removal or replacement of systems,
structures or other parts of Subcontractor’s facility; and all transportation
costs will be paid by AMSC. All warranties for any re-performed Services will
terminate at the end of the Warranty Period.
16.4.
Inspection.

16.4.1.
DHS. The Parties shall permit DHS to inspect the work performed in the
Subcontractor’s and/or its subcontractor’s facility(ies) or by AMSC to the
extent required in the Prime Contract as of the date hereof.

16.4.2.
Effect. No inspection, testing, acceptance, payment, or use of any Material or
Services will affect the warranties and obligations of AMSC under this
Agreement, and such warranties and obligations will survive any such inspection,
testing, acceptance, payment, or use.

16.5.
Subcontractor’s Right to Perform. In the event of AMSC’s failure to repair or
replace the Material, or AMSC’s failure to re-perform the Services within thirty
(30) days of Subcontractor’s notice of noncompliance to AMSC under Sections
16.3.1 and 16.3.2, as the case may be, or such shorter time

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as may be reasonably required to avoid the lapse of any warranty rights with
respect to Section 16.7, Subcontractor may correct any deficiencies in the
Material or Services, or may purchase replacement Material or Services.
Subcontractor may either invoice AMSC for the reasonable cost of correcting the
deficiencies (including the costs directly attributable to other services that
are required to be performed in connection with the correction of such
noncompliance), invoice AMSC for the cost of replacement, or deduct the cost
associated with correction or replacement from any payments due or subsequently
due AMSC, provided, however, that any third party retained by Subcontractor must
comply with the manuals and instructions of AMSC in all material respects,
unless otherwise agreed by the Parties in writing, and carry out any such remedy
in a workmanlike manner in order for AMSC to be responsible for any subsequent
damages under this Section 16.5. AMSC shall not be responsible for damage to the
extent resulting from or caused by the failure to comply with such manuals and
instructions.
16.6.
Backup Inventory and Bailed Property

16.6.1.
As promptly and as soon as reasonably practicable following execution of this
Agreement and no later than the date of Commissioning, AMSC shall deliver to
Subcontractor a list of all backup/replacement equipment, supplies, materials,
machinery and other items necessary for the operation and maintenance of the HTS
Cable System in accordance with this Agreement (collectively, "Backup
Inventory"). Such list shall be appended to Appendix E. Upon Commissioning,
title to such Backup Inventory will immediately transfer to Subcontractor and
such Backup Inventory will at all times remain the property of Subcontractor and
be held by Subcontractor.

16.6.2.
Effective as of Commissioning, AMSC hereby assigns to Subcontractor exclusive
right, title or interest in and to Backup Inventory, except for AMSC's limited
right, subject to Subcontractor's sole discretion, to use the Backup Inventory
in the performance of AMSC's obligations under this Agreement. AMSC shall not
use the Backup Inventory for any other purpose.

16.6.3.
All replacement parts, additions, improvements, and accessories for such Backup
Inventory will automatically become Subcontractor's property. All replacements
of Backup Inventory will also be Subcontractor's property. AMSC shall replace
any missing components of or inserts to any Backup Inventory.

16.6.4.
AMSC will maintain a written inventory of all Backup Inventory that sets forth a
description of all Backup Inventory, and provide a copy of this inventory to
Subcontractor upon request. AMSC shall immediately sign any documents reasonably
requested by Subcontractor to evidence all of Subcontractor's rights to and
interests in Backup Inventory.

16.6.5.
An amount of superconducting wire sufficient to reproduce the longest segment of
cable used in this Project ("Bailed Property") shall be held by AMSC throughout
the Warranty Period in connection with the Project and upon Commissioning, title
to such Bailed Property will transfer to Subcontractor and be held by AMSC on a
bailment-at-will basis. At the end of the Warranty Period AMSC shall ship the
Bailed Property to Subcontractor.

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16.6.6.
Only Subcontractor has any right, title or interest in and to Bailed Property,
except for AMSC's limited right, subject to Subcontractor's sole discretion, to
use the Bailed Property in the performance of AMSC's obligations under this
Agreement. AMSC shall not use the Bailed Property for any other purpose. AMSC
shall not commingle Bailed Property with the property of AMSC or with that of a
Person other than Subcontractor or AMSC and shall not move any Bailed Property
from AMSC's premises without the prior written approval by Subcontractor.
Subcontractor may, at any time, for any reason and without payment of any kind,
retake possession of any Bailed Property without the necessity of payment or
notice to AMSC, or a hearing or a court order, which rights, if any, are waived
by AMSC. Upon Subcontractor's request, Bailed Property will be immediately
released to Subcontractor or delivered to Subcontractor by AMSC. AMSC's
continued holding of Bailed Property after demand has been made by Subcontractor
for delivery will substantially impair the value thereof, and, accordingly,
Subcontractor will be entitled to a court order of possession without any need
or proving damages or a bond. To the fullest extent permitted by law, AMSC shall
not allow any encumbrance to be imposed on or attach to the Bailed Property
through AMSC or as a result of AMSC's action or inaction, and AMSC hereby waives
any encumbrance that it may have or acquire in the Bailed Property.

16.6.7.
If the bailment relationship described in this Section 16.6 is deemed to be a
secured financing transaction, AMSC grants to Subcontractor a continuing
security interest in any rights or interests it may have in the Bailed Property.

16.6.8.
AMSC shall bear all risk of loss of and damage to Bailed Property. AMSC shall,
at its own expense, for the benefit of Subcontractor, insure all Bailed Property
with full and extended coverage for all losses, for its full replacement value,
in accordance with the terms of Section 16. AMSC shall, at its sole cost and
expense, maintain, repair, refurbish and replace Bailed Property.

16.6.9.
AMSC shall mark all Bailed Property permanently and conspicuously to identify it
as the property of Subcontractor, and indicate Subcontractor's name and address.
AMSC shall immediately sign any documents reasonably requested by Subcontractor
to evidence all of Subcontractor's rights to and interests in Bailed Property.
AMSC grants to Subcontractor a limited and irrevocable power of attorney,
coupled with an interest, to execute and record on AMSC's behalf any documents
with respect to Bailed Property that Subcontractor determines are reasonably
necessary to reflect Subcontractor's interest in the Bailed Property.

16.7.
Assignment of Warranties. AMSC shall and does hereby assign to Subcontractor the
benefits of the warranties provided by [***] and [***] as attached in Appendix F
to AMSC for the Material provided by them hereunder; provided, however, that
Subcontractor shall only receive the benefit of such assignment if (1) AMSC
ceases to exist prior to the expiration of the Term of the Agreement, or (2)
Subcontractor is allowed to repair or replace any Material or re-perform any
Services as detailed in the first sentence of Section 16.5 hereof. AMSC will
perform its responsibilities so that such warranties remain in full force and
effect throughout the Term of this Agreement.

SECTION 17.
MISCELLANEOUS

17.1.    Dispute Resolution: Governing Law. The Parties may attempt to resolve
any disputes internally escalating unresolved disputes to the individuals set
forth in Section 12.1. Notwithstanding the foregoing, either party may seek
relief or bring suit at any time in accordance with the terms set forth below in
this Section 17.1. This Agreement shall be construed and interpreted, without
giving effect to

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principles of conflict of law, in accordance with the laws of the State of
Delaware. EACH PARTY IRREVOCABLY CONSENTS TO THE U.S. DISTRICT COURT, OR THE
STATE COURT IF THERE IS NO FEDERAL JURISDICTION, LOCATED NEW CASTLE COUNTY,
DELAWARE AS VENUE FOR ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THESE TERMS AND CONDITIONS OR ANY STATEMENT OF WORK ISSUED HEREUNDER, AND
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY SUCH SUIT, ACTION
OR PROCEEDING.
17.2.    Severability. Should any of the provisions of the Agreement be
determined to be unenforceable or prohibited by applicable law, this Agreement
shall be considered divisible as to such provisions, which shall then be
inoperative; but the remaining provisions hereof shall be valid and binding.
17.3.    No Waiver. No failure or delay on the part of AMSC or Subcontractor in
the exercise of any power, right or privilege, and no course of dealing between
AMSC and Subcontractor, shall operate as a waiver thereof, nor shall any single
or partial exercise of any power, right or privilege preclude other or further
exercise thereof or the exercise of any other power, right or privilege. Any
waiver of any provision of this Agreement, and any consent to any departure by
AMSC or Subcontractor from the terms of any provision of this Agreement, shall
be effective only in the specific instance and for the specific purpose for
which such waiver or consent was given.
17.4.    Public Statements and Publicity. Except as set forth in this Section
17.4, any public announcement must be mutually agreed upon by the Parties.  
AMSC and Subcontractor will work together and prepare a complete list of talking
points which can be publicly announced by either Party as needed.  The Parties
will review this list of talking points regularly on an as needed basis, but no
less than quarterly, and updated if needed based on the status of the
Agreement.  All public announcements by the Parties regarding this Agreement
will be limited to the contents of this list of talking points. 
 Notwithstanding the foregoing, AMSC may make any public disclosure required by
Applicable Law, as determined by AMSC in its sole and absolute discretion,
regarding this Agreement and/or the Project, and, in the event that AMSC makes
any such disclosure, AMSC will provide Subcontractor notice of such public
disclosure at least four (4) hours prior to making such disclosure.
17.5.    Force Majeure. Neither Party shall be liable or responsible to the
other Party, nor be deemed to have defaulted under or breached this Agreement,
for any failure or delay in fulfilling or performing any term of this Agreement
(except for any obligations to make payments hereunder), when and to the extent
such failure or delay is caused by or results from the following force majeure
events (“Force Majeure Events”): (a) acts of God; (b) flood, fire, earthquake or
explosion; (c) war, invasion, hostilities (whether war is declared or not),
terrorist threats or acts, riot or other civil unrest; (d) government order or
law; (e) actions, embargoes or blockades in effect on or after the date of this
Agreement; (f) action by any Governmental Authority; (g) national or regional
emergency; and (h) strikes or labor unrest beyond the reasonable control of the
party claiming a Force Majeure Event (“Claiming Party”); (i) shortage of
adequate power or transportation facilities beyond the reasonable control of the
Claiming Party; and (j) other similar events beyond the reasonable control of
the Claiming Party. The Claiming Party shall give notice within three (3)
business days of the Force Majeure Event to the other Party, stating a
reasonable estimate of the period of time the occurrence is expected to
continue. The Claiming Party shall use diligent efforts to end the failure or
delay and ensure the effects of such Force Majeure Event are minimized. The
Claiming Party shall resume the performance of its obligations as soon as
reasonably practicable.
17.6.    Entire Agreement. This Agreement, including all Appendices hereto and
such other documents expressly incorporated by reference herein, including the
Prime Contract, embodies the entire

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Agreement between the Parties with respect to the subject matter hereof, and
supersedes all prior agreements or understandings with respect to such subject
matter.
17.7.
Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered will be deemed an original, and all of
which together shall constitute one and the same agreement. This Agreement may
be executed and delivered by facsimile or by .pdf file and upon such delivery
the facsimile or .pdf signature will be deemed to have the same effect as if the
original signature had been delivered to the other Party.

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their respective duly authorized representatives as of the date first written
above.
AMERICAN SUPERCONDUCTOR CORPORATION        COMMONWEALTH EDISON

By: /s/ Daniel Patrick McGahn        By: /s/ Terence Donnelly            

Print Name: Daniel Patrick McGahn        Print Name: Terence
Donnelly            

Title: Chairman, President & CEO        Title: President and Chief Operating
Officer    

Date: 10/31/18        Date: 10/31/18                    

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APPENDIX A
STATEMENT OF WORK
Overview
This document defines the division of responsibilities between the Parties. In
general terms, the intent is that AMSC will provide an HTS cable of the design
proven at Testing in Hannover Germany, witnessed by Subcontractor
representatives. After signing the parties shall perform subsequent testing on
samples from the production cable as necessary to validate the production cable
performance is consistent with the previous full cable test witnessed by ComEd.
AMSC shall provide, pursuant to the terms hereof, such final cable along with
the refrigeration system previously built for use in the Project (the
“Refrigeration System”) and controls, systems, software and other materials
necessary to operate and maintain the foregoing (collectively the "HTS Cable
System"). Installation of the HTS Cable System itself will be AMSC’s
responsibility, including verification of Subcontractor's performance of the
Subcontractor Responsibilities set forth below. AMSC will also Commission the
HTS Cable System, provide support and report on the HTS Cable System’s operation
for one year following Commissioning to satisfy its contractual agreement with
DHS.
Subcontractor will provide the site, necessary enclosures, foundations,
utilities and facilities meeting the Specification to support the installation
and operation of the HTS Cable System and its integration into the Subcontractor
distribution system. Subcontractor will install such equipment to the extent
expressly required by, and in accordance with, the Specification and subject to
AMSC’s obligations to install equipment expressly required to be installed by
AMSC pursuant to the Specification, such as the HTS cable, terminations and
splice, and interconnection piping to connect the HTS cable to the refrigeration
system. Subcontractor shall obtain all necessary approvals and permits required
for Subcontractor to perform its obligations in connection with the Project.
As used in this Agreement, the term "Specification" or "Specifications" means
the written parameters, requirements and other specifications for the
installation, operation and maintenance of the HTS Cable System, including the
Materials and other software and equipment ancillary thereto and the Services
and other tasks required in connection with such installation, operation and
maintenance, in each case as set forth in the Agreement (including the Appendix
A), as modified pursuant to the mutual written agreement of the Parties, or
contained in any written documentation provided by a Party or its subcontractors
or suppliers and accepted by the other Party ("Documentation"), and in the case
of the Subcontractor Specific Responsibilities in Section 1 through 4 below, the
specifications prepared by, and certified to be satisfactory to Subcontractor
(“Site Spec”); provided that in the event of a conflict between (a) a
specification in any Documentation and (b) any specification set forth in this
Agreement, a Site Spec or mutually agreed in writing by the Parties, the
specification in subsection (b) shall control over the Documentation.
Subcontractor Specific Responsibilities
The following items are the responsibility of Subcontractor. To the extent these
items are related to the HTS Cable System, AMSC will provide technical support
as needed or reasonably requested ("AMSC Support").

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1.
Design of the overall substation layout to accommodate the HTS Cable System.

2.
Design, permitting and construction of foundations for HTS cable terminations.
[***]. If needed, protection from snow build-up will also be provided.

3.
Design, permitting, construction and installation of a [***] enclosure, with
foundations, for the HTS Refrigeration system and ancillary components, control
panels and instrumentation. This will include the utilities needed for the
refrigeration system. This includes foundations for the refrigeration chillers
which are to be mounted outside, but adjacent to, the refrigeration enclosure. A
temporary space outside the enclosure is required to place a [***] LN2 tank for
the cable initial cooldown process.

4.
Design, procurement, construction and installation of any substation structures
and equipment necessary to connect the HTS cable to the [***] substation system.

5.
Trenching, ducts or similar as chosen by Subcontractor for the HTS cable [***].
This must include a [***] or similar for the HTS [***], and provisions for
valves and instrumentation at both HTS cable terminations.

6.
Electrical interconnect from HTS cable terminations to the Subcontractor system
including all related equipment and installation thereof such as risers, bus
work, circuit breakers, monitoring and protection PT’s and CT’s, etc.

7.
Off-load and installation of the Refrigeration system into the Refrigeration
enclosure. This will include set-up and connection to the Subcontractor provided
enclosure and utilities. Off-load, installation, set-up and connection of the
chillers is part of this item.

8.
Connection of AMSC provided controls, alarms and instrumentation to the
Subcontractor [***] networks. Programming of [***] for Operations and
Engineering, and Remote interfaces is implied.

9.
Intentionally Deleted.

10.
Physical access, security, temporary site office and sanitary facilities for use
by employees of AMSC and its contractors during installation and commissioning.
This will include secure storage of tools and equipment and a laydown area at
site for AMSC and their subcontractors’ materials and equipment required for
installation and commissioning.

11.
Temporary power and simple weather shelter to support making outdoor
connections.

12.
Monthly progress reports to include schedule, technical and [***] information.
[***] information is for comparison to the [***] proposal provided to DHS in the
AMSC/ DHS Agreement.

13.
Proof of completion of all Milestones executed by Subcontractor set forth in
Schedule 1 to this Appendix A, regardless of whether the Milestone is billable
by Subcontractor or not.

14.
Participation in quarterly progress reviews with AMSC and DHS from the project
start through the first year of operation.

15.
Support for start-up and commissioning of the HTS Cable System including the
Refrigeration System, as expressly set forth in this Agreement, a Statement of
Work or written commissioning plan signed by the Parties.

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16.
Expeditious access pursuant to the access procedures set forth in this
Agreement, to site to affect parameter changes, adjustments, repairs, or data
collection during operation of the cable system.

AMSC Specific Responsibilities
The following items are the responsibility of AMSC. Subcontractor will provide
support as needed.
1.
A delivered HTS cable, [***] terminations and [***] of the design which was
tested and witnessed by Subcontractor at the [***] facility in September 2016.
The cable will be approximately [***] in length. A [***] of suitable length
(approximately [***]) will also be provided. Final length to be agreed upon by
Subcontractor and AMSC.

2.
Support to engineer the interfaces between the AMSC refrigeration and cable
system controller and the Subcontractor [***] network interfaces.

3.
A refrigeration system including controls and chillers, [***].

4.
Installation of the HTS cable, Terminations and [***]. Interconnection piping to
connect the HTS cable to the refrigeration system.

5.
Provide the AMSC Support.

6.
Verify that Subcontractor has performed the Subcontractor Responsibilities
necessary for commissioning and performance of the AMSC Specific
Responsibilities and required by the Specification.

7.
Start-up, cool down and commissioning of the commercially operational HTS Cable
System. This will include filling of liquid nitrogen (LN2) as necessary.

8.
Start-up and commissioning of the Refrigeration System. This will include
filling of liquid nitrogen (LN2) as necessary.

9.
Delivery of HTS Cable System operating and maintenance manual and training.

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APPENDIX B
LIMITED RIGHTS PROPRIETARY INFORMATION/GOVERNMENT
PURPOSE RIGHTS DATA AND SOFTWARE

Technical Data/Computer Software To Be
Furnished with Restrictions

Basis for Assertion
Asserted Rights Category
Person Asserting Restrictions
Expiration
Date
1.    Pre-existing integrated HTS/FCL cable data
Developed at private expense outside of Agreement
Limited Rights Proprietary Information
American Superconductor
N/A
2.    Pre-existing HTS/FCL cable wire data
Developed at private expense outside of Agreement
Limited Rights Proprietary Information
American Superconductor
N/A
3.    Pre-existing stand-alone fault current limiter data
Developed at private expense outside of Agreement
Limited Rights Proprietary Information
American Superconductor
N/A
4.    Integrated HTS/FCL cable data developed on this Agreement
Developed under the Letter Contract or this Agreement
Government Purpose Rights
American Superconductor
N/A
5.    HTS/FCL cable wire data developed on this Agreement
Developed in part or whole under the Letter Contract or this Agreement
Government Purpose Rights
American Superconductor
N/A
6.    Stand-alone fault current limiter data developed on this Agreement
Developed in part or whole under the Letter Contract or this Agreement
Government Purpose rights
American Superconductor or its Stand-alone FCL Subcontractors
N/A
7.    Pre-existing Stand-alone fault current limiter data
Developed at private expense outside of Agreement
Limited Rights Proprietary Information
Stand-alone FCL Subcontractors
N/A

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APPENDIX B (cont.)

LIMITED RIGHTS PROPRIETARY INFORMATION/GOVERNMENT
PURPOSE RIGHTS DATA AND SOFTWARE

Technical Data/Computer Software To Be
Furnished with Restrictions

Basis for Assertion
Asserted Rights Category
Person Asserting Restrictions
Expiration
Date
8.    Pre-existing HTS cable, cable termination and/or raw materials there-of
data
Developed at private expense outside of Agreement
Limited Rights Proprietary Information
[***]
N/A
9.    Integrated HTS/FCL cable, cable termination and/or raw materials there-of
data developed on the Agreement
Developed in part or whole under the Letter Contract or this Agreement
Government Purpose Rights
[***]
N/A
10.    Pre-existing cryogenics and refrigeration system data
Developed at private expense outside of Agreement
Limited Rights Proprietary Information
[***]
N/A
11.    All other technical data and computer software developed by American
Superconductor or its Other Subcontractors under this Agreement
Developed in part or whole under the Letter Contract or this Agreement
Government Purpose Rights
American Superconductor or its Other Subcontractors, as applicable
N/A

AMSC and its Other Subcontractors reserve the right to supplement the above list
of data and software items upon mutual agreement of the Government.
AMSC proprietary data regarding HTS wire, other than the items listed above,
will not be delivered under this Agreement.

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APPENDIX C
APPENDIX C
RESERVED

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APPENDIX D
LETTER OF CREDIT

‌
[ISSUER’S LETTERHEAD]
Irrevocable, Unconditional, Standby Letter of Credit
Date of Issuance: [DATE]

Reference Number: [NUMBER]
Expiration Date: [DATE]
Applicant:
American Superconductor Corporation, a Delaware corporation with offices at [114
East Main Street, Ayer, MA 01432]

Beneficiary:
Commonwealth Edison Company, an Illinois corporation with offices at 440 South
LaSalle, Chicago, IL 60605

Ladies and Gentlemen:

We hereby issue this Irrevocable, Unconditional, Standby Letter of Credit, with
reference number [NUMBER] (”Standby Letter of Credit”), in favor of Commonwealth
Edison Company (”Beneficiary”), for the account of American Superconductor
Corporation (”Applicant”), and authorize Beneficiary to draw on us at sight, up
to an aggregate amount of $5,000,000.

Partial and multiple drawings are permitted under this Standby Letter of Credit.
The aggregate amount available under this Standby Letter of Credit at any time
shall be the face amount of this Standby Letter of Credit, less the aggregate
amount of all partial drawings previously paid to Beneficiary at such time.

The expiration date of this Standby Letter of Credit (“Expiration Date”) is the
date that is the fifth anniversary of the date of Commissioning (as such term is
defined in the Subcontract Agreement, dated [_______] [__], 2018 between
Applicant and Beneficiary, as such agreement may be amended and supplemented
from time to time, whether now or hereafter executed, and any replacements or
substitutions thereof), provided that if such date is not a Business Day, the
Expiration Date shall be the next following Business Day. As used herein,
“Business Day” shall mean any day other than a Saturday, Sunday or day on which
banking institutions are authorized or required to be closed in the state of
Delaware.
 
Amounts drawn under this Standby Letter of Credit must specify the number of
this Standby Letter of Credit, the amount to be drawn, a current contact for
Beneficiary including email and telephone number, and wiring instructions for
Beneficiary’s account. Any sight draft may be presented to us by electronic,
reprographic, computerized or automated system, or by carbon copy, but in any
event must visibly bear the word “original” and be presented at the Office for
Presentment identified below not later than the Expiration Date. If the document
is signed, the signature may consist of (or may appear to us as) an original
handwritten signature, a facsimile signature or any other mechanical or
electronic method of authentication.
  

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Beneficiary shall include with any presentation a copy of this Standby Letter of
Credit.  ‌

We undertake to pay Beneficiary under this Standby Letter of Credit within three
(3) business days of receipt by us of a sight draft presented pursuant to the
terms of this Standby Letter of Credit. Beneficiary shall receive payment from
us by wire transfer to a bank account of Beneficiary, as described in such sight
draft. If any sight draft presented under this Standby Letter of Credit does not
comply with the terms and conditions hereof, we will advise the contact for
Beneficiary by email and telephone within one (1) Business Day and give the
reasons for such non-compliance.

This Standby Letter of Credit is irrevocable, unconditional and transferable.
This Standby Letter of Credit may be transferred without charge one or more
times upon receipt of the written instructions of the Beneficiary.

This Standby Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein and any
such reference shall not be deemed to incorporate herein by reference any
document, instrument or agreement.

This Standby Letter of Credit is governed by and construed in accordance with
the laws of the state of Delaware, without regard to conflicts of laws
principles.
 
‌

 
 

Very truly yours,
[ISSUER’S NAME]

 

By_____________________
Name:
Title:
Office for Presentment:
[______________________]

APPENDIX E
BACKUP INVENTORY

BACKUP INVENTORY

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List to be provided by AMSC within one hundred eighty (180) days of the
Effective Date of this Agreement.

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APPENDIX F
ASSIGNED WARRANTIES

[***]:
1.1.
Performance of Work.

1.1.1
Material Warranty. For a period of [***] ([***]) years from the date that the
cable system (“Material”) has been commissioned, however not exceeding a maximum
period of [***] from the date of shipment to Subcontractor, Seller warrants that
the Material furnished to Buyer under these Terms and Conditions and all
components thereof will: (1) comply with the Specifications contained in or
developed in accordance with these Terms and Conditions, (2) be free from
defects in design, workmanship and materials, (3) be conveyed to Buyer with good
and merchantable title, (4) be free and clear of all security interests, liens,
encumbrances or claims of Seller, subcontractors and third-party suppliers,
(5) be free of any claim of infringement, misappropriation, unfair competition
or violation of any third-party right, including intellectual property rights,
(6) be fit for the particular purpose intended therefor to the extent such
purpose is set forth in the technical specification, (7) be sourced,
manufactured, sold and delivered in accordance with the then-prevailing
applicable laws, and industry standards as defined in the technical
specification, (8) be fully tested in accordance with these Terms and
Conditions, (9) be of new manufacture, unless specifically noted otherwise in
the Contract Documents.

1.1.2    Services Warranty. For a period of [***] ([***]) years from the date
that the services”) have been accepted pursuant to the terms hereof, Buyer has
signed a certificate of final completion for the work related to the services,
however not exceeding a maximum period of five years plus 2 weeks after written
notice of the Seller of final completion of the Service, Seller warrants that
the services furnished to Buyer under these Terms and Conditions will:
(1) comply with the specifications contained in or developed in accordance with
these Terms and Conditions, (2) be free from defects in design, workmanship and
materials, (3) be conveyed to Buyer with good and merchantable title, (4) be
free and clear of all security interests, liens, encumbrances or claims of
Seller, subcontractors and third-party suppliers, and (5) be free of any claim
of infringement, misappropriation, unfair competition or violation of any
third-party right, including intellectual property rights, (6) fit for the
particular purpose intended therefor to the extent such purpose is set forth in
the technical specification, (7) be performed in accordance with the
then-prevailing applicable Laws, and industry standards as defined in the
technical specification, and (8) be fully tested in accordance with these Terms
and Conditions.     
1.1.3    These warranties are in lieu of any warranty of merchantability and
other warranties of any kind, whether express or implied.    

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1.2.
Remedies.

1.2.1    Material. If any Material does not comply with the foregoing warranties
and Buyer gives Seller notice of such noncompliance within the applicable
Material warranty period set forth in this Article 7, then Seller will (at its
sole expense) promptly correct by repair or replacement any non-conforming
Material. The decision whether to repair or replace any non-conforming Material
will be made with the concurrence of Buyer and the repair or replacement will be
scheduled consistent with Buyer’s operating requirements so as to minimize loss
of production or use of the Material, other material or of any plant or
equipment of which the Material is a part. Notwithstanding any other provisions
in these Terms and Conditions to the contrary, all costs and expenses associated
with the identification of non-conforming Material, repair or replacement of
Material or Buyer’s or Commonwealth Edison’s (“ComEd”) property, including
Buyer’s and Seller’s investigations and root cause analyses; gaining access to
or removal or replacement of systems, structures or other parts of Buyer’s
facility and all transportation costs will be paid by Seller, and Buyer may
charge Seller all expenses of unpacking, examining, repacking and reshipping any
rejected Material. All warranties for any repaired or replaced Material will be
[***] ([***]) years from the date of repair or replacement.    
1.2.2    The forgoing warranty shall in no event extend to:    
- Material that have been subject to misuse, mishandling, neglect accidence,
damage by circumstances beyond the Seller´s reasonable control,    
- Material that has been repaired, modified or replaced by Byer or any third
party without Seller´s prior written authorization.
1.2.3    Services. If any of the services do not comply with the foregoing
warranties and Buyer notifies Seller within the applicable services warranty
period set forth in this Article 7, then Seller will (at its sole expense)
promptly re-perform the nonconforming services and reimburse Buyer for the cost
to repair or replace any Buyer’s or ComEd’s property damaged or otherwise
adversely affected by such non-conformance. Notwithstanding any other provisions
in these Terms and Conditions to the contrary, all costs and expenses associated
with the identification of the non-conforming services, re-performance of the
nonconforming services and repair or replacement of Buyer’s or ComEd’s property,
including Buyer’s and Seller’s investigations and root cause analyses; gaining
access to or removal or replacement of systems, structures or other parts of
Buyer’s facility; and all transportation costs will be paid by Seller. All such
re-performed services and repairs will be performed on a schedule to be agreed
upon by Buyer. The warranty for any such re-performed services will be [***]
([***]) years from the date of re-performance of the services    
1.3.    Inspection.
1.3.1    Buyer’s inspection, testing, or payment, will not affect the warranties
and obligations of Seller under these Terms and Conditions or these Terms and
Conditions, and such warranties and obligations will survive any such
inspection, testing, or payment, or use.

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1.4.    Buyer’s Right to Perform.
1.4.1    In the event of Seller’s failure to repair or replace the Material
within a reasonable period of time, or Seller’s failure to re-perform the
Services within a reasonable period of time, in accordance with the terms
hereof, Buyer, after notice to Seller, may correct any deficiencies in the
Material or Services, or may purchase replacement Material or Services. Buyer
may either invoice Seller for the cost of correcting the deficiencies (including
the costs directly attributable to other services that are required to be
performed in connection with the correction of such deficiencies), invoice
Seller for the cost of replacement, or deduct the cost associated with
correction or replacement from any payments due or subsequently due Seller.
1.5.    Assignment of Warranties.
1.5.1    Seller consents to Buyer’s assignment to ComEd of all of Buyer’s
rights, benefits and interests of every kind arising out of this Section 7. In
the event that ComEd reaches out directly to Seller, Seller agrees that it shall
provide the benefits of the warranties under this Section 7 to ComEd to the full
extent as if ComEd were the Buyer herein.
1.6.    Liability
1.6.1    In the case of damage caused negligently or in case of expenses
incurred for supplementary performance, the liability of the Seller shall be
limited to [***]% of the contract price per incidence of loss, with a total of
[***]% of the contract price. Compensation for indirect damage, for lost profits
and loss of production are excluded. The limitation or exclusion of liability
applies regardless of the basis of claim (e.g. contract – including
indemnification – or tort) and also in favour of the vicarious agents of the
Seller, unless mandatory law provides otherwise. In the case of damages caused
intentionally, the liability of the Seller is unlimited.

[***]:
[***] agrees to supply a warranty to ComEd pursuant to the terms of that certain
[***]. Additional [***] agreement signed by and among, AMSC, [***] and ComEd
dated ____________________, 2018.

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Appendix G
Proposed DHS Amendment
[***]

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[***]

ATTACHMENT 4

STATEMENT OF WORK
[***]

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ATTACHMENT 6

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Updated Payable Milestones

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ATTACHMENT 7

Updated Schedule of Payments

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