Document:

Exhibit 10.27

 

E

 

	
  SPECIAL TERMS AND CONDITIONS FOR USE IN MOST GRANTS AND
  COOPERATIVE AGREEMENTS

  	
  4

  
	
  RESOLUTION OF CONFLICTING CONDITIONS

  	
  4

  
	
  AWARD AGREEMENT TERMS AND CONDITIONS

  	
  4

  
	
  AWARD PROJECT PERIOD

  	
  4

  
	
  CONDITIONS ON AWARD

  	
  4

  
	
  PAYMENT PROCEDURES - REIMBURSEMENT THROUGH THE AUTOMATED
  CLEARING HOUSE (ACH) VENDER INQUIRY PAYMENT ELECTRONIC REPORTING SYSTEM
  (VIPERS)

  	
  5

  
	
  COST SHARING FFRDC’S NOT INVOLVED

  	
  5

  
	
  REBUDGETING AND RECOVERY OF INDIRECT COSTS - REIMBURSABLE
  INDIRECT COSTS AND FRINGE BENEFITS

  	
  6

  
	
  PRE-AWARD COSTS

  	
  6

  
	
  USE OF PROGRAM INCOME — COST SHARING

  	
  6

  
	
  STATEMENT OF FEDERAL STEWARDSHIP

  	
  6

  
	
  SITE VISITS

  	
  6

  
	
  REPORTING REQUIREMENTS

  	
  6

  
	
  PUBLICATIONS

  	
  7

  
	
  FEDERAL, STATE, AND MUNICIPAL REQUIREMENTS

  	
  7

  
	
  INTELLECTUAL PROPERTY PROVISIONS AND CONTACT INFORMATION

  	
  7

  
	
  LOBBYING RESTRICTIONS

  	
  8

  
	
  NOTICE REGARDING THE PURCHASE OF AMERICAN-MADE EQUIPMENT
  AND PRODUCTS — SENSE OF CONGRESS

  	
  8

  
	
  INSOLVENCY, BANKRUPTCY OR RECEIVERSHIP

  	
  8

  
	
  NATIONAL ENVIRONMENTAL POLICY ACT (NEPA) REQUIREMENTS

  	
  8

  
	
  DECONTAMINATION AND/OR DECOMMISSIONING (D &D) COSTS

  	
  9

  
	
  PROPERTY

  	
  9

  
	
  FINAL INCURRED COST AUDIT

  	
  10

  
	
  INDEMNITY

  	
  10

  
	
  ADVANCE PATENT WAIVER

  	
  10

  
	
  SPECIAL PROVISIONS RELATING TO WORK FUNDED UNDER AMERICAN
  RECOVERY AND REINVESTMENT ACT OF 2009

  	
  10

  
	
  REPORTING AND REGISTRATION REQUIREMENTS UNDER
  SECTION 1512 OF THE RECOVERY ACT

  	
  13

  
	
  WAGE RATE REQUIREMENTS UNDER SECTION 1606 OF THE
  RECOVERY ACT

  	
  13

  
	
  RECOVERY ACT TRANSACTIONS LISTED IN SCHEDULE OF
  EXPENDITURES OF FEDERAL AWARDS AND RECIPIENT RESPONSIBILITIES FOR INFORMING
  SUBRECIPIENTS

  	
  14

  
	
  DAVIS BACON ACT AND CONTRACT WORK HOURS AND SAFETY
  STANDARDS ACT

  	
  14

  

 

 

	
  Not Specified / Other

  	
  DE-EE0002022

  

 

SPECIAL
TERMS AND CONDITIONS FOR USE IN MOST GRANTS AND COOPERATIVE AGREEMENTS

 

RESOLUTION OF CONFLICTING CONDITIONS

 

Any apparent
inconsistency between Federal statutes and regulations and the terms and
conditions contained in this award must be referred to the DOE Award
Administrator for guidance.

 

AWARD AGREEMENT TERMS AND CONDITIONS

 

This award/agreement
consists of the Grant and Cooperative Agreement cover page, plus the following:

a.                                      Special
terms and conditions.

b.                                      Attachments:

Attachment No.         Title

1                                                                                         Intellectual
Property Provisions

2                                                                                         Statement
of Project Objectives

3                                                                                         Federal
Assistance Reporting Checklist

4                                                                                         Budget
Pages

5                                                                                         Wage
Determinations

c.                                       Applicable
program regulations.

d.                                      DOE
Assistance Regulations, 10 CFR Part 600 at http://ecfr.gpoaccess.gov and
if the award is for research and to a university or non-profit, the Research
Terms & Conditions and the DOE Agency Specific Requirements at
http://www.nsf.gov/bfa/dias/policy/rtc/index.jsp.

e.                                       Application/proposal
dated May 19, 2009 and revision dated November 6, 2009.

f.                                        National
Policy Assurances to Be Incorporated as Award Terms in effect on date of award
at 
http://management.energy.gov/business_doe/1374.htm.

 

AWARD PROJECT PERIOD

 

The Project Period for
this award is 12/01/2009 through 11/30/2012.

 

CONDITIONS ON AWARD

 

Verification of Recipient’s
Cost Share

 

a.   DOE has obligated $249,090,000 for
completion of the Project authorized by this agreement; however,  subject to the additional restriction
contained in the National Environmental Policy Act Requirements provision of
this agreement, only DOE funds equal to the private sector share of the project
cost approved by resolution of the Recipient’s Board of Directors will be
available for reimbursement from DOE.  The Recipient has provided DOE and
the DOE has accepted a Board of Directors resolution dated November 4,
2009 approving the Recipient’s initial capital spending plan for the private
sector share of the project cost.

 

b.  Not later than 12 months after the effective
date of the award or at such other time as may be mutually agreed,  the Recipient shall provide to DOE one or
more resolutions from its Board of Directors approving a capital spending plan
for the remaining balance of the full private sector share of the project cost.

 

c. In the event, DOE
determines that the information provided by Recipient in subparagraph (b) above
is inadequate to assure the availability of full funding for the remaining
private sector share of the project cost, DOE reserves the right, at DOE’s
discretion, to: (1) renegotiate the project scope and/or payment schedule,
or (2) after Recipient is provided 30 days advance written notice and
opportunity to cure, declare the grant terminated by mutual agreement.  Should DOE declare the grant terminated, the
Recipient shall be entitled to payment from DOE of DOE’s share of allowable
project cost incurred prior to the date of termination plus the reasonable cost
of terminating contracts not to exceed an amount equal to the private share of
the project cost approved in Recipient’s Board of Director’s resolution dated November 4,
2009.

 

4

 

PAYMENT PROCEDURES - REIMBURSEMENT
THROUGH THE AUTOMATED CLEARING HOUSE (ACH) VENDER INQUIRY PAYMENT ELECTRONIC
REPORTING SYSTEM (VIPERS)

 

a.                                      Method
of Payment.  Payment will be made by
reimbursement through ACH.

 

b.                                      Requesting
Reimbursement.  Requests for
reimbursements must be made electronically through Department of Energy’s Oak
Ridge Financial Service Center (ORFSC) VIPERS. 
To access and use VIPERS, you must enroll at
https://finweb.oro.doe.gov/vipers.htm. 
Detailed instructions on how to enroll are provided on the web site.

 

For non-construction
awards, you must submit a Standard Form (SF) 270, “Request for Advance or
Reimbursement” at https://finweb.oro.doe.gov/vipers.htm and attach a file
containing appropriate supporting documentation.  The file attachment must show the total
federal share claimed on the SF 270, the non-federal share claimed for the
billing period if cost sharing is required, and cumulative expenditures to date
(both Federal and non-Federal) for each of the following categories:
salaries/wages and fringe benefits; equipment; travel; participant/training
support costs, if any; other direct costs, including subawards/contracts; and
indirect costs.  For construction awards,
you must submit a SF 271, “Outlay Report and Request for Reimbursement for
Construction Programs,” through VIPERS.

 

c.                                       Timing
of submittals.  Submittal of the SF 270
or SF 271 should coincide with your normal billing pattern, but not more
frequently than every two weeks. 
Requests for reimbursement must be limited to the amount of
disbursements made during the billing period for the federal share of direct
project costs and the proportionate share of any allowable indirect costs
incurred during that billing period.

 

d.                                      Adjusting
payment requests for available cash.  You
must disburse any funds that are available from repayments to and interest
earned on a revolving fund, program income, rebates, refunds, contract
settlements, audit recoveries, credits, discounts, and interest earned on any
of those funds before requesting additional cash payments from DOE/NNSA.

 

e.                                       Payments.
 The DOE approving official will approve
the invoice as soon as practicable but not later than 30 days after your
request is received, unless the billing is improper.  Upon receipt of an invoice payment
authorization from the DOE approving official, the ORFSC will disburse payment
to you.  You may check the status of your
payments at the VIPER web site.  All
payments are made by electronic funds transfer to the bank account identified
on the ACH Vendor/Miscellaneous Payment Enrollment Form (SF 3881) that you
filed.

 

COST SHARING FFRDC’S NOT INVOLVED

 

a.                                      Total
Estimated Project Cost is the sum of the Government share and Recipient share
of the estimated project costs.  The
Recipient’s cost share must come from non-Federal sources unless otherwise
allowed by law.  By accepting Federal
funds under this award, you agree that you are liable for your percentage share
of total allowable project costs, on a budget period basis, even if the project
is terminated early or is not funded to its completion.  This cost is shared as follows:

 

	
  Budget Period

  	
   

  	
  Government Share

  $/%

  	
   

  	
  Recipient Share

  $/%

  	
   

  	
  Total Estimated Cost

  	
   

  
	
  1

  	
   

  	
  $249,090,000 /
  50%

  	
   

  	
  $249,090,000 /
  50%

  	
   

  	
  $

  	
  498,180,000

  	
   

  
									

 

b.                                      If
you discover that you may be unable to provide cost sharing of at least the
amount identified in paragraph a of this article, you should immediately
provide written notification to the DOE Award Administrator indicating whether
you will continue or phase out the project. 
If you plan to continue the project, the notification must describe how replacement
cost sharing will be secured.

 

c.                                       You
must maintain records of all project costs that you claim as cost sharing,
including in-kind costs, as well as records of costs to be paid by
DOE/NNSA.  Such records are subject to
audit.

 

5

 

d.                                      Failure
to provide the cost sharing required by this Article may result in the
subsequent recovery by DOE/NNSA of some or all the funds provided under the
award.

 

REBUDGETING AND RECOVERY OF INDIRECT
COSTS - REIMBURSABLE INDIRECT COSTS AND FRINGE BENEFITS

 

a.                                      If
actual allowable indirect costs are less than those budgeted and funded under
the award, you may use the difference to pay additional allowable direct costs
during the project period.  If at the
completion of the award the Government’s share of total allowable costs (i.e.,
direct and indirect), is less than the total costs reimbursed, you must refund
the difference.

 

b.                                      Recipients
are expected to manage their indirect costs. 
DOE will not amend an award solely to provide additional funds for
changes in indirect cost rates.  DOE
recognizes that the inability to obtain full reimbursement for indirect costs
means the recipient must absorb the underrecovery.  Such underrecovery may be allocated as part
of the organization’s required cost sharing.

 

c.                                       The budget for this award includes fringe
benefits and indirect (labor overhead) costs, but does not include a G&A
overhead rate expense.  Therefore, such
G&A costs shall not be charged to nor shall reimbursement be requested for
this project nor shall such G&A costs for this project be allocated to any
other federally sponsored project.  In
addition, such G&A costs shall not be counted as cost share unless approved
by the Contracting Officer.

 

PRE-AWARD COSTS

 

You are entitled
to reimbursement for costs incurred on or after June 1, 2009 if such costs
are allowable in accordance with the applicable Federal cost principles
referenced in 10 CFR part 600 and the terms of this award (including the NEPA
Requirements provision).

 

USE OF PROGRAM INCOME — COST SHARING

 

If you earn program
income during the project period as a result of this award, you may use the
program income to meet your cost sharing requirement.

 

STATEMENT OF FEDERAL STEWARDSHIP

 

DOE/NNSA will exercise
normal Federal stewardship in overseeing the project activities performed under
this award.  Stewardship activities
include, but are not limited to, conducting site visits; reviewing performance
and financial reports; providing technical assistance and/or temporary intervention
in unusual circumstances to correct deficiencies which develop during the
project; assuring compliance with terms and conditions; and reviewing technical
performance after project completion to ensure that the award objectives have
been accomplished.

 

SITE VISITS

 

DOE/NNSA’s authorized
representatives have the right to make site visits at reasonable times to
review project accomplishments and management control systems and to provide
technical assistance, if required.  You
must provide, and must require your subawardees to provide, reasonable access
to facilities, office space, resources, and assistance for the safety and
convenience of the government representatives in the performance of their
duties.  All site visits and evaluations
must be performed in a manner that does not unduly interfere with or delay the
work.

 

REPORTING REQUIREMENTS

 

a.                                      Requirements.  The reporting requirements for this award are
identified on the Federal Assistance Reporting Checklist, DOE F 4600.2,
attached to this award.  Failure to
comply with these reporting

 

6

 

requirements is
considered a material noncompliance with the terms of the award.  Noncompliance may result in withholding of
future payments, suspension, or termination of the current award, and
withholding of future awards.  A willful
failure to perform, a history of failure to perform, or unsatisfactory
performance of this and/or other financial assistance awards, may also result
in a debarment action to preclude future awards by Federal agencies.

 

b.                                      Dissemination
of scientific/technical reports. 
Scientific/technical reports submitted under this award will be
disseminated on the Internet via the DOE Information Bridge
(www.osti.gov/bridge), unless the report contains patentable material,
protected data, or SBIR/STTR data. 
Citations for journal articles produced under the award will appear on
the DOE Energy Citations Database (www.osti.gov/energycitations).

 

c.                                       Restrictions.
Reports submitted to the DOE Information Bridge must not contain any Protected
Personal Identifiable Information (PII), limited rights data (proprietary
data), classified information, information subject to export control
classification, or other information not subject to release.

 

PUBLICATIONS

 

a.                                      You
are encouraged to publish or otherwise make publicly available the results of
the work conducted under the award.

 

b.                                      An
acknowledgment of Federal support and a disclaimer must appear in the
publication of any material, whether copyrighted or not, based on or developed
under this project, as follows:

 

Acknowledgment:  “This material is based upon work supported
by the Department of Energy under Award Number DE-EE0002022.”

 

Disclaimer:  “This report was prepared as an account of
work sponsored by an agency of the United States Government.  Neither the United States Government nor any
agency thereof, nor any of their employees, makes any warranty, express or
implied, or assumes any legal liability or responsibility for the accuracy,
completeness, or usefulness of any information, apparatus, product, or process
disclosed, or represents that its use would not infringe privately owned
rights.  Reference herein to any specific
commercial product, process, or service by trade name, trademark, manufacturer,
or otherwise does not necessarily constitute or imply its endorsement,
recommendation, or favoring by the United States Government or any agency
thereof.  The views and opinions of
authors expressed herein do not necessarily state or reflect those of the
United States Government or any agency thereof.”

 

FEDERAL, STATE, AND MUNICIPAL
REQUIREMENTS

 

You must obtain any
required permits and comply with applicable Federal, state, and municipal laws,
codes, and regulations for work performed under this award.

 

INTELLECTUAL PROPERTY PROVISIONS AND
CONTACT INFORMATION

 

a.                                      The
intellectual property provisions applicable to this award are provided as an
attachment to this award or are referenced on the Agreement Face Page.  A list of all intellectual property provisions
may be found at http://www.gc.doe.gov/financial_assistance_awards.htm .

 

b.                                      Questions
regarding intellectual property matters should be referred to the DOE Award
Administrator and the Patent Counsel designated as the service provider for the
DOE office that issued the award.  The IP
Service Providers List is found at
http://www.gc.doe.gov/documents/Intellectual_Property_(IP)_Service_Providers_for_Acquisition.pdf

 

7

 

LOBBYING RESTRICTIONS

 

By accepting funds under
this award, you agree that none of the funds obligated on the award shall be
expended, directly or indirectly, to influence congressional action on any
legislation or appropriation matters pending before Congress, other than to
communicate to Members of Congress as described in 18 U.S.C. 1913.  This restriction is in addition to those
prescribed elsewhere in statute and regulation.

 

NOTICE REGARDING THE PURCHASE OF
AMERICAN-MADE EQUIPMENT AND PRODUCTS — SENSE OF CONGRESS

 

It is the sense of the Congress
that, to the greatest extent practicable, all equipment and products purchased
with funds made available under this award should be American-made.

 

INSOLVENCY, BANKRUPTCY OR
RECEIVERSHIP

 

a.                                      You
shall immediately notify the DOE of the occurrence of any of the following
events: (i) you or your parent’s filing of a voluntary case seeking
liquidation or reorganization under the Bankruptcy Act; (ii) your consent
to the institution of an involuntary case under the Bankruptcy Act against you
or your parent; (iii)  the filing of any similar proceeding for or against
you or your parent, or its consent to, the dissolution, winding-up or
readjustment of your debts, appointment of a receiver, conservator, trustee, or
other officer with similar powers over you, under any other applicable state or
federal law; or (iv) your insolvency due to your inability to pay your
debts generally as they become due.

 

b.                                      Such
notification shall be in writing and shall: 
(i) specifically set out the details of the occurrence of an event
referenced in paragraph a; (ii) provide the facts surrounding that event;
and (iii) provide the impact such event will have on the project being
funded by this award.

 

c.                                       Upon
the occurrence of any of the four events described in the first paragraph, DOE
reserves the right to conduct a review of your award to determine your
compliance with the required elements of the award (including such items as
cost share, progress towards technical project objectives, and submission of
required reports).  If the DOE review
determines that there are significant deficiencies or concerns with your
performance under the award, DOE reserves the right to impose additional
requirements, as needed, including (i) change your payment method; or (ii) institute
payment controls.

 

d.                                      Failure
of the Recipient to comply with this provision may be considered a material
noncompliance of this financial assistance award by the Contracting Officer.

 

NATIONAL ENVIRONMENTAL POLICY ACT
(NEPA) REQUIREMENTS

 

The Recipient is
restricted from taking any action using Federal funds that would have an
adverse effect on the environment or limit the choice of reasonable
alternatives prior to DOE issuing a Finding of No Significant Impact (FONSI)
for projects requiring an environmental assessment or a Record of Decision
(ROD) for projects requiring an environmental impact statement. Prior to
issuance of FONSI (or ROD if EIS becomes necessary), DOE will reimburse the
Recipient up to $24,909,000 for project planning, design, and placement of long
lead time equipment orders and Subtasks 1.1, 1.2, 2.1, 2.2, 3.1, and 3.2
identified in the SOPO at the DOE share ratio established in the grant.  Unless and until DOE issues a FONSI or ROD,
all other costs incurred by the Recipient will be at the Recipient’s risk.  Prohibited actions include, but are not
limited to, demolition/decontamination of existing buildings, site
preparation/clearing, ground breaking, excavation/construction, and/or detailed
design.  However, activities necessary to
perform site characterization/sampling/monitoring; preparation of conceptual
design data/analysis/documentation to include project planning
assistance/training, may be performed before a FONSI or ROD is issued.

 

In the event the
Recipient elects to proceed with activities that could have an adverse
impact on the environment prior to DOE issuing a FONSI or a ROD, the Recipient
acknowledges that such activities are  at
Recipient’s risk in that the DOE may not reimburse the cost depending
on the outcome of the NEPA process.

 

8

 

Prior to the issuance of
a FONSI or ROD, DOE agrees to discuss with the Recipient any proposed
conditions and requirements that may be included in it if DOE decides to
proceed with its proposed action.   However,
DOE retains sole discretion on whether to issue a FONSI or ROD and what
conditions and requirements to include in it if one is issued.

 

If DOE decides to proceed
with its proposed action subject to conditions, limitations, mitigation
requirements, or monitoring requirements specified in a FONSI or ROD, the
Recipient agrees to:

 

a) abide by the
conditions, limitations, mitigation requirements, and monitoring requirements
specified in the FONSI or ROD;

 

b) negotiate changes to
the project schedule, costs, and/or scope as necessary to effect the
requirements or conditions in the FONSI or ROD;

 

c) allow DOE’s authorized
representatives  to visit the site and
facilities upon notice to verify project status and compliance to include
conditions and requirements in the FONSI or ROD; and

 

d)  submit data or otherwise meet specified
reporting requirements that may be in the FONSI or ROD.

 

If the Recipient finds
the conditions and requirements to be unacceptable, the Recipient reserves the
right to terminate the award in accordance with 10 CFR 600.161(a)(3), 244(b),
351(a)(3), as applicable.

 

In the event DOE does not
issue a NEPA determination supporting the project or the Recipient withdraws
from the project as a result of mitigation requirements contained in DOE’s NEPA
determination, the maximum DOE liability to the Recipient is DOE’s share of
incurred costs up to $24,909,000, provided such costs are reasonable, allocable
to the award, and allowable under the terms of the award and the applicable
Federal cost principles.  DOE reserves
the right to unilaterally deobligate the balance of funds obligated, but not
authorized for expenditure, in the event the foregoing NEPA requirements are
not satisfied.

 

DECONTAMINATION AND/OR
DECOMMISSIONING (D &D) COSTS

 

Notwithstanding any other
provisions of this Agreement, the Government shall not be responsible for or
have any obligation to the recipient for (i) Decontamination and/or
Decommissioning (D&D) of any of the recipient’s facilities, or (ii) any
costs which may be incurred by the recipient in connection with the D&D of
any of its facilities due to the performance of the work under this Agreement,
whether said work was performed prior to or subsequent to the effective date of
this Agreement.

 

PROPERTY

 

Real property and equipment
acquired by the Recipient shall be subject to the rules set forth in 10
CFR 600.321.

 

Consistent with the goals
and objectives of this project, the Recipient may continue to use Recipient
acquired  property beyond the Period of
Performance, without obligation, during the period of such use, to extinguish
DOE’s conditional title to such property as described in 10 CFR 600.321.,
subject to the following:  (a) the
Recipient continues to utilize such property for the objectives of the project
as set forth in the Statement of Project Objectives; (b) DOE retains the
right to periodically ask for, and the Recipient agrees to provide, reasonable
information concerning the use and condition of the property; and (c) the
Recipient follows the property disposition rules set forth in 10 CFR
600.321 if the property is no longer used by the Recipient for the objectives
of the project, and the fair market value of property exceeds $5,000.

 

Once the per unit fair
market value of the property is less than $5,000, pursuant to 10 CFR
600.321(f)(1)(i), DOE’s residual interest in the property shall be extinguished
and Recipient shall have no further obligation to the DOE with respect to the
property.

 

9

 

FINAL INCURRED COST AUDIT

 

In accordance with 10 CFR
600, DOE reserves the right to initiate a final incurred cost audit on
this award.  If the audit has not been performed or completed prior to the
closeout of the award, DOE retains the right to recover an appropriate amount after
fully considering the recommendations on disallowed costs resulting from the
final audit.

 

INDEMNITY

 

The Recipient shall
indemnify the Government and its officers, agents, or employees for any and all
liability, including litigation expenses and attorneys’ fees, arising from
suits, actions, or claims of any character for death, bodily injury, or loss of
or damage to property or to the environment, resulting from the project, except
to the extent that such liability results from the direct fault or negligence
of Government officers, agents or employees, or to the extent such liability
may be covered by applicable allowable costs provisions.

 

ADVANCE PATENT WAIVER

 

DOE is preparing a Class Waiver
of Patent Rights for technology developed under DOE funded awards relating to
DOE’s Recovery Act - Electric Drive Vehicle Battery and Component Manufacturing
Initiative; DOE Funding Opportunity Announcement DE-FOA-0000026.  If the class waiver is granted and the
Recipient elects to participate in it, DOE will modify this award to
incorporate the patent waiver terms and conditions.  These patent waiver terms and conditions will
be in effect retroactive to the signing of this award.

 

SPECIAL PROVISIONS RELATING TO WORK
FUNDED UNDER AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

 

Preamble

 

The American Recovery and
Reinvestment Act of 2009, Pub. L. 111-5, (Recovery Act) was enacted to preserve
and create jobs and promote economic recovery, assist those most impacted by
the recession, provide investments needed to increase economic efficiency by
spurring technological advances in science and health, invest in
transportation, environmental protection, and other infrastructure that will
provide long-term economic benefits, stabilize State and local government
budgets, in order to minimize and avoid reductions in essential services and
counterproductive State and local tax increases.  Recipients shall use grant funds in a manner
that maximizes job creation and economic benefit.

 

The Recipient shall
comply with all terms and conditions in the Recovery Act relating generally to
governance, accountability, transparency, data collection and resources as
specified in Act itself and as discussed below.

 

Recipients should begin
planning activities for their first tier subrecipients, including obtaining a
DUNS number (or updating the existing DUNS record), and registering with the
Central Contractor Registration (CCR).

 

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

 

The Government has not
fully developed the implementing instructions of the Recovery Act, particularly
concerning specific procedural requirements for the new reporting
requirements.  The Recipient will be
provided these details as they become available.  The Recipient must comply with all
requirements of the

 

10

 

Act.  If the recipient believes there is any
inconsistency between ARRA requirements and current award terms and conditions,
the issues will be referred to the Contracting Officer for reconciliation.

 

Definitions

 

For purposes of this
clause, Covered Funds means funds expended or obligated from appropriations
under the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5.  Covered Funds will have special accounting
codes and will be identified as Recovery Act funds in the grant, cooperative
agreement or TIA and/or modification using Recovery Act funds.  Covered Funds must be reimbursed by September 30,
2015.

 

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

 

Recipient means any
entity that receives Recovery Act funds directly from the Federal government
(including Recovery Act funds received through grant, loan, or contract) other
than an individual and includes a State that receives Recovery Act Funds.

 

Special Provisions

 

A. Flow Down Requirement

 

Recipients must include
these special terms and conditions in any subaward.

 

B. Segregation of Costs

 

Recipients must segregate
the obligations and expenditures related to funding under the Recovery
Act.  Financial and accounting systems
should be revised as necessary to segregate, track and maintain these funds
apart and separate from other revenue streams. 
No part of the funds from the Recovery Act shall be commingled with any
other funds or used for a purpose other than that of making payments for costs
allowable for Recovery Act projects.

 

C.  Prohibition on Use of Funds

 

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

 

D.  Access to Records

 

With respect to each
financial assistance agreement awarded utilizing at least some of the funds
appropriated or otherwise made available by the American Recovery and
Reinvestment Act of 2009, Pub. L. 111-5, 
any representative of an appropriate inspector general appointed under
section 3 or 8G of the Inspector General Act of 1988 (5 U.S.C. App.) or of the
Comptroller General is authorized —

 

(1) to examine any
records of the contractor or grantee, any of its subcontractors or subgrantees,
or any State or local agency administering such contract that pertain to, and
involve transactions that relate to, the subcontract, subcontract, grant, or
subgrant; and

(2) to interview any
officer or employee of the contractor, grantee, subgrantee, or agency regarding
such transactions.

 

11

 

E.   Publication

 

An application may
contain technical data and other data, including trade secrets and/or
privileged or confidential information, which the applicant does not want
disclosed to the public or used by the Government for any purpose other than
the application.  To protect such data,
the applicant should specifically identify each page including each line
or paragraph thereof containing the data to be protected and mark the cover
sheet of the application with the following Notice as well as referring to the
Notice on each page to which the Notice applies:

 

Notice of Restriction on
Disclosure and Use of Data

 

The data contained in pages —
of this application have been submitted in confidence and contain trade secrets
or proprietary information, and such data shall be used or disclosed only for
evaluation purposes, provided that if this applicant receives an award as a
result of or in connection with the submission of this application, DOE shall
have the right to use or disclose the data here to the extent provided in the
award.  This restriction does not limit
the Government’s right to use or disclose data obtained without restriction
from any source, including the applicant.

 

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

 

F.   Protecting State and Local Government and
Contractor Whistleblowers.

 

The requirements of Section 1553
of the Act are summarized below.  They
include, but are not limited to:

 

Prohibition on
Reprisals:  An employee of any
non-Federal employer receiving covered funds under the American Recovery and
Reinvestment Act of 2009, Pub. L. 111-5, may not be discharged, demoted, or
otherwise discriminated against as a reprisal for disclosing, including a
disclosure made in the ordinary course of an employee’s duties, to the Accountability
and Transparency Board, an inspector general, the Comptroller General, a member
of Congress, a State or Federal regulatory or law enforcement agency, a person
with supervisory authority over the employee (or other person working for the
employer who has the authority to investigate, discover or terminate
misconduct), a court or grant jury, the head of a Federal agency, or their
representatives information that the employee believes is evidence of:

 

· gross management of an agency contract or grant
relating to covered funds;

· a gross waste of covered funds;

· a substantial and specific danger to public
health or safety related to the implementation or use of covered funds;

· an abuse of authority related to the
implementation or use of covered funds; or

· as violation of law, rule, or regulation related
to an agency contract (including the competition for or negotiation of a
contract) or grant, awarded or issued relating to covered funds.

 

Agency Action:  Not later than 30 days after receiving an
inspector general report of an alleged reprisal, the head of the agency shall
determine whether there is sufficient basis to conclude that the non-Federal
employer has subjected the employee to a prohibited reprisal.  The agency shall either issue an order denying
relief in whole or in part or shall take one or more of the following actions:

 

· Order the employer to take affirmative action to
abate the reprisal.

· Order the employer to reinstate the person to
the position that the person held before the reprisal, together with
compensation including back pay, compensatory damages, employment benefits, and
other terms and conditions of employment that would apply to the person in that
position if the reprisal had not been taken.

· Order the employer to pay the employee an amount
equal to the aggregate amount of all costs and expenses (including attorneys’
fees and expert witnesses’ fees) that were reasonably incurred by the employee
for or in connection with, bringing the complaint regarding the reprisal, as
determined by the head of a court of competent jurisdiction.

 

12

 

Nonenforceablity of
Certain Provisions Waiving Rights and remedies or Requiring Arbitration:  Except as provided in a collective bargaining
agreement, the rights and remedies provided to aggrieved employees by this
section may not be waived by any agreement, policy, form, or condition of
employment, including any predispute arbitration agreement.  No predispute arbitration agreement shall be
valid or enforceable if it requires arbitration of a dispute arising out of
this section.

 

Requirement to Post
Notice of Rights and Remedies:  Any
employer receiving covered funds under the American Recovery and Reinvestment
Act of 2009, Pub. L. 111-5, shall post notice of the rights and remedies as
required therein. (Refer to section 1553 of the American Recovery and
Reinvestment Act of 2009, Pub. L. 111-5, www.Recovery.gov, for specific
requirements of this section and prescribed language for the notices.).

 

G. RESERVED

 

H. False Claims Act

 

Recipient and
sub-recipients shall promptly refer to the DOE or other appropriate Inspector
General any credible evidence that a principal, employee, agent, contractor,
sub-grantee, subcontractor or other person has submitted a false claim under
the False Claims Act or has committed a criminal or civil violation of laws
pertaining to fraud, conflict of interest, bribery, gratuity or similar
misconduct involving those funds.

 

I. Information in Support
of Recovery Act Reporting

 

Recipient may be required
to submit backup documentation for expenditures of funds under the Recovery Act
including such items as timecards and invoices. 
Recipient shall provide copies of backup documentation at the request of
the Contracting Officer or designee.

 

J. Availability of Funds

 

Funds appropriated under
the Recovery Act and obligated to this award are available for reimbursement of
costs until September 30, 2015.

 

REPORTING AND REGISTRATION
REQUIREMENTS UNDER SECTION 1512 OF THE RECOVERY ACT

 

(a) This award
requires the recipient to complete projects or activities which are funded
under the American Recovery and Reinvestment Act of 2009 (Recovery Act) and to
report on use of Recovery Act funds provided through this award. Information
from these reports will be made available to the public.

 

(b) The reports are
due no later than ten calendar days after each calendar quarter in which the
recipient receives the assistance award funded in whole or in part by the
Recovery Act.

 

(c) Recipients and
their first-tier recipients must maintain current registrations in the Central
Contractor Registration (http://www.ccr.gov) at all times during which they
have active federal awards funded with Recovery Act funds. A Dun and Bradstreet
Data Universal Numbering System (DUNS) Number (http://www.dnb.com) is one of
the requirements for registration in the Central Contractor Registration.

 

(d) The recipient
shall report the information described in section 1512(c) of the Recovery
Act using the reporting instructions and data elements that will be provided
online at http://www.FederalReporting.gov and ensure that any information that
is pre-filled is corrected or updated as needed.

 

WAGE RATE REQUIREMENTS UNDER SECTION 1606
OF THE RECOVERY ACT

 

(a) Section 1606
of the Recovery Act requires that all laborers and mechanics employed by
contractors and subcontractors on projects funded directly by or assisted in
whole or in part by and through the Federal 

 

13

 

Government pursuant to
the Recovery Act shall be paid wages at rates not less than those prevailing on
projects of a character similar in the locality as determined by the Secretary
of Labor in accordance with subchapter IV of chapter 31 of title 40, United
States Code.

 

Pursuant to
Reorganization Plan No. 14 and the Copeland Act, 40 U.S.C. 3145, the
Department of Labor has issued regulations at 29 CFR parts 1, 3, and 5 to
implement the Davis-Bacon and related Acts. Regulations in 29 CFR 5.5 instruct
agencies concerning application of the standard Davis-Bacon contract clauses
set forth in that section. Federal agencies providing grants, cooperative
agreements, and loans under the Recovery Act shall ensure that the standard
Davis-Bacon contract clauses found in 29 CFR 5.5(a) are incorporated in
any resultant covered contracts that are in excess of $2,000 for construction,
alteration or repair (including painting and decorating).

 

(b) For additional
guidance on the wage rate requirements of section 1606, contact your awarding agency.
Recipients of grants, cooperative agreements and loans should direct their
initial inquiries concerning the application of Davis-Bacon requirements to a
particular federally assisted project to the Federal agency funding the
project. The Secretary of Labor retains final coverage authority under
Reorganization Plan Number 14.

 

RECOVERY ACT TRANSACTIONS LISTED IN
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND RECIPIENT RESPONSIBILITIES FOR
INFORMING SUBRECIPIENTS

 

(a) To maximize the
transparency and accountability of funds authorized under the American Recovery
and Reinvestment Act of 2009 (Pub. L. 111—5) (Recovery Act) as required by
Congress and in accordance with 2 CFR 215.21 “Uniform Administrative
Requirements for Grants and Agreements” and OMB Circular A—102 Common Rules provisions,
recipients agree to maintain records that identify adequately the source and
application of Recovery Act funds. OMB Circular A—102 is available at
http://www.whitehouse.gov/omb/circulars/a102/a102.html.

 

(b) For recipients
covered by the Single Audit Act Amendments of 1996 and OMB Circular A—133, “Audits
of States, Local Governments, and Non-Profit Organizations,” recipients agree
to separately identify the expenditures for Federal awards under the Recovery
Act on the Schedule of Expenditures of Federal Awards (SEFA) and the Data
Collection Form (SF—SAC) required by OMB Circular A—133. OMB Circular A—133
is available at http://www.whitehouse.gov/omb/circulars/a133/a133.html. This
shall be accomplished by identifying expenditures for Federal awards made under
the Recovery Act separately on the SEFA, and as separate rows under Item 9 of Part III
on the SF—SAC by CFDA number, and inclusion of the prefix “ARRA-” in
identifying the name of the Federal program on the SEFA and as the first
characters in Item 9d of Part III on the SF—SAC.

 

(c) Recipients agree
to separately identify to each subrecipient, and document at the time of
subaward and at the time of disbursement of funds, the Federal award number,
CFDA number, and amount of Recovery Act funds. When a recipient awards Recovery
Act funds for an existing program, the information furnished to subrecipients
shall distinguish the subawards of incremental Recovery Act funds from regular
subawards under the existing program.

 

(d) Recipients agree
to require their subrecipients to include on their SEFA information to
specifically identify Recovery Act funding similar to the requirements for the
recipient SEFA described above. This information is needed to allow the
recipient to properly monitor subrecipient expenditure of ARRA funds as well as
oversight by the Federal awarding agencies, Offices of Inspector General and
the Government Accountability Office.

 

DAVIS BACON ACT AND CONTRACT WORK
HOURS AND SAFETY STANDARDS ACT

 

Definitions:  For purposes of this article, Davis Bacon Act
and Contract Work Hours and Safety Standards Act, the following definitions are
applicable:

 

14

 

(1) “Award” means
any grant, cooperative agreement or technology investment agreement made with
Recovery Act funds by the Department of Energy (DOE) to a Recipient.  Such Award must require compliance with the
labor standards clauses and wage rate requirements of the Davis-Bacon Act (DBA)
for work performed by all laborers and mechanics employed by Recipients (other
than a unit of State or local government whose own employees perform the
construction) Subrecipients, Contractors and subcontractors.

 

(2) “Contractor”
means an entity that enters into a Contract. 
For purposes of these clauses, Contractor shall include (as applicable)
prime contractors,  Recipients,
Subrecipients, and Recipients’ or Subrecipients’ contractors, subcontractors,
and lower-tier subcontractors. “Contractor” does not mean a unit of State or
local government where construction is performed by its own employees.”

 

(3) “Contract” means
a contract executed by a Recipient, Subrecipient, prime contractor or any tier
subcontractor for construction, alteration, or repair.  It may also mean (as applicable) (i) financial
assistance instruments such as grants, cooperative agreements, technology
investment agreements, and loans; and, (ii) Sub awards, contracts and
subcontracts issued under financial assistance agreements.  “Contract” does not mean a financial
assistance instrument with a unit of State or local government where
construction is performed by its own employees.

 

(4) “Contracting
Officer” means the DOE official authorized to execute an Award on behalf of DOE
and who is responsible for the business management and non-program aspects of
the financial assistance process.

 

(5) “Recipient”
means any entity other than an individual that receives an Award of Federal
funds in the form of a grant, cooperative agreement or technology investment
agreement directly from the Federal Government and is financially accountable
for the use of any DOE funds or property, and is legally responsible for
carrying out the terms and conditions of the program and Award.

 

(6) “Subaward” means
an award of financial assistance in the form of money, or property in lieu of
money, made under an award by a Recipient to an eligible Subrecipient or by a
Subrecipient to a lower- tier subrecipient. 
The term includes financial assistance when provided by any legal
agreement, even if the agreement is called a contract, but does not include the
Recipient’s procurement of goods and services to carry out the program nor does
it include any form of assistance which is excluded from the definition of “Award”
above.

 

(7) “Subrecipient”
means a non-Federal entity that expends Federal funds received from a Recipient
to carry out a Federal program, but does not include an individual that is a
beneficiary of such a program.

 

(a) Davis
Bacon Act

 

(1) Minimum wages.

 

(i) All laborers and
mechanics employed or working upon the site of the work (or under the United
States Housing Act of 1937 or under the Housing Act of 1949 in the construction
or development of the project), will be paid unconditionally and not less often
than once a week, and without subsequent deduction or rebate on any account
(except such payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR part 3) ), the full amount of
wages and bona fide fringe benefits (or cash equivalents thereof) due at time
of payment computed at rates not less than those contained in the wage
determination of the Secretary of Labor which is attached hereto and made a
part hereof, regardless of any contractual relationship which may be alleged to
exist between the Contractor and such laborers and mechanics.

 

Contributions made or
costs reasonably anticipated for bona fide fringe benefits under section 1(b)(2) of
the Davis-Bacon Act on behalf of laborers or mechanics are considered wages
paid to such laborers or mechanics, subject to the provisions of paragraph
(a)(1)(iv) of this section; also, regular contributions made or costs
incurred for more than a weekly period (but not less often than quarterly)
under plans, funds, or 

 

15

 

programs which cover the
particular weekly period, are deemed to be constructively made or incurred
during such weekly period. Such laborers and mechanics shall be paid the
appropriate wage rate and fringe benefits on the wage determination for the
classification of work actually performed, without regard to skill, except as
provided in § 5.5(a)(4). Laborers or mechanics performing work in more than one
classification may be compensated at the rate specified for each classification
for the time actually worked therein: Provided,
That the employer’s payroll records accurately set forth the time spent in each
classification in which work is performed. The wage determination (including
any additional classification and wage rates conformed under paragraph (a)(1)(ii) of
this section) and the Davis-Bacon poster (WH-1321) shall be posted at all times
by the Contractor and its subcontractors at the site of the work in a prominent
and accessible place where it can be easily seen by the workers.

 

(ii)(A) The
Contracting Officer shall require that any class of laborers or mechanics,
including helpers, which is not listed in the wage determination and which is
to be employed under the Contract shall be classified in conformance with the
wage determination. The Contracting Officer shall approve an additional
classification and wage rate and fringe benefits therefore only when the
following criteria have been met:

 

(1) The work to be
performed by the classification requested is not performed by a classification
in the wage determination; and

 

(2) The
classification is utilized in the area by the construction industry; and

 

(3) The proposed
wage rate, including any bona fide fringe benefits, bears a reasonable
relationship to the wage rates contained in the wage determination.

 

(B) If the
Contractor and the laborers and mechanics to be employed in the classification
(if known), or their representatives, and the Contracting Officer agree on the
classification and wage rate (including the amount designated for fringe
benefits where appropriate), a report of the action taken shall be sent by the
Contracting Officer to the Administrator of the Wage and Hour Division, U.S.
Department of Labor, Washington, DC 20210. The Administrator, or an authorized
representative, will approve, modify, or disapprove every additional
classification action within 30 days of receipt and so advise the Contracting
Officer or will notify the Contracting Officer within the 30-day period that
additional time is necessary.

 

(C) In the event the
Contractor, the laborers or mechanics to be employed in the classification or
their representatives, and the Contracting Officer do not agree on the proposed
classification and wage rate (including the amount designated for fringe
benefits, where appropriate), the Contracting Officer shall refer the
questions, including the views of all interested parties and the recommendation
of the Contracting Officer, to the Administrator for determination. The
Administrator, or an authorized representative, will issue a determination
within 30 days of receipt and so advise the Contracting Officer or will notify
the Contracting Officer within the 30-day period that additional time is
necessary.

 

(D) The wage rate
(including fringe benefits where appropriate) determined pursuant to paragraphs
(a)(1)(ii)(B) or (C) of this section, shall be paid to all workers
performing work in the classification under this Contract from the first day on
which work is performed in the classification.

 

(iii) Whenever the
minimum wage rate prescribed in the Contract for a class of laborers or
mechanics includes a fringe benefit which is not expressed as an hourly rate,
the Contractor shall either pay the benefit as stated in the wage determination
or shall pay another bona fide fringe benefit or an hourly cash equivalent
thereof.

 

(iv) If the
Contractor does not make payments to a trustee or other third person, the
Contractor may consider as part of the wages of any laborer or mechanic the
amount of any costs reasonably anticipated in providing bona fide fringe
benefits under a plan or program, Provided,
That the Secretary of Labor has found, upon the written request of the
Contractor, that the applicable standards of the Davis-Bacon Act have been met.
The Secretary of Labor may require the Contractor to set aside in a separate
account assets for the meeting of obligations under the plan or program.

 

16

 

(2) Withholding. The
Department of Energy or the Recipient or Subrecipient shall upon its own action
or upon written request of an authorized representative of the Department of
Labor withhold or cause to be withheld from the Contractor under this Contract
or any other Federal contract with the same prime contractor, or any other federally-assisted
contract subject to Davis-Bacon prevailing wage requirements, which is held by
the same prime contractor, so much of the accrued payments or advances as may
be considered necessary to pay laborers and mechanics, including apprentices,
trainees, and helpers, employed by the Contractor or any subcontractor the full
amount of wages required by the Contract. In the event of failure to pay any
laborer or mechanic, including any apprentice, trainee, or helper, employed or
working on the site of the work (or under the United States Housing Act of 1937
or under the Housing Act of 1949 in the construction or development of the
project), all or part of the wages required by the Contract, the Department of
Energy, Recipient, or Subrecipient,  may,
after written notice to the Contractor, sponsor, applicant, or owner, take such
action as may be necessary to cause the suspension of any further payment,
advance, or guarantee of funds until such violations have ceased.

 

(3) Payrolls and
basic records.

 

(i) Payrolls and
basic records relating thereto shall be maintained by the Contractor during the
course of the work and preserved for a period of three years thereafter for all
laborers and mechanics working at the site of the work (or under the United
States Housing Act of 1937, or under the Housing Act of 1949, in the
construction or development of the project). Such records shall contain the
name, address, and social security number of each such worker, his or her
correct classification, hourly rates of wages paid (including rates of
contributions or costs anticipated for bona fide fringe benefits or cash
equivalents thereof of the types described in section 1(b)(2)(B) of the
Davis-Bacon Act), daily and weekly number of hours worked, deductions made and
actual wages paid. Whenever the Secretary of Labor has found under 29 CFR
5.5(a)(1)(iv) that the wages of any laborer or mechanic include the amount
of any costs reasonably anticipated in providing benefits under a plan or
program described in section 1(b)(2)(B) of the Davis-Bacon Act, the
Contractor shall maintain records which show that the commitment to provide
such benefits is enforceable, that the plan or program is financially
responsible, and that the plan or program has been communicated in writing to
the laborers or mechanics affected, and records which show the costs
anticipated or the actual cost incurred in providing such benefits. Contractors
employing apprentices or trainees under approved programs shall maintain
written evidence of the registration of apprenticeship programs and
certification of trainee programs, the registration of the apprentices and
trainees, and the ratios and wage rates prescribed in the applicable programs.

 

(ii) (A) The
Contractor shall submit weekly for each week in which any Contract work is
performed a copy of all payrolls to the Department of Energy if the agency is a
party to the Contract, but if the agency is not such a party, the Contractor
will submit the payrolls to the Recipient or Subrecipient (as applicable),
applicant, sponsor, or owner, as the case may be, for transmission to the
Department of Energy. The payrolls submitted shall set out accurately and
completely all of the information required to be maintained under 29 CFR
5.5(a)(3)(i), except that full social security numbers and home addresses shall
not be included on weekly transmittals. Instead the payrolls shall only need to
include an individually identifying number for each employee (e.g., the last
four digits of the employee’s social security number). The required weekly
payroll information may be submitted in any form desired. Optional Form WH-347
is available for this purpose from the Wage and Hour Division Web site at
http://www.dol.gov/esa/whd/forms/wh347instr.htm or its successor site. The
prime Contractor is responsible for the submission of copies of payrolls by all
subcontractors. Contractors and subcontractors shall maintain the full social
security number and current address of each covered worker, and shall provide
them upon request to the Department of Energy if the agency is a party to the
Contract, but if the agency is not such a party, the Contractor will submit
them to the Recipient or Subrecipient (as applicable), applicant, sponsor, or
owner, as the case may be, for transmission to the Department of Energy, the
Contractor, or the Wage and Hour Division of the Department of Labor for
purposes of an investigation or audit of compliance with prevailing wage
requirements. It is not a violation of this section for a prime contractor to
require a subcontractor to provide addresses and social security numbers to the
prime contractor for its own records, without weekly submission to the
sponsoring government agency (or the Recipient or Subrecipient (as applicable),
applicant, sponsor, or owner).

 

17

 

(B) Each payroll
submitted shall be accompanied by a “Statement of Compliance,” signed by the
Contractor or subcontractor or his or her agent who pays or supervises the
payment of the persons employed under the Contract and shall certify the
following:

 

(1) That the payroll
for the payroll period contains the information required to be provided under §
5.5 (a)(3)(ii) of Regulations, 29 CFR part 5, the appropriate information
is being maintained under § 5.5 (a)(3)(i) of Regulations, 29 CFR part 5,
and that such information is correct and complete;

 

(2) That each
laborer or mechanic (including each helper, apprentice, and trainee) employed
on the Contract during the payroll period has been paid the full weekly wages earned,
without rebate, either directly or indirectly, and that no deductions have been
made either directly or indirectly from the full wages earned, other than
permissible deductions as set forth in Regulations, 29 CFR part 3;

 

(3) That each
laborer or mechanic has been paid not less than the applicable wage rates and
fringe benefits or cash equivalents for the classification of work performed,
as specified in the applicable wage determination incorporated into the
Contract.

 

(C) The weekly
submission of a properly executed certification set forth on the reverse side
of Optional Form WH-347 shall satisfy the requirement for submission of
the “Statement of Compliance” required by paragraph (a)(3)(ii)(B) of this
section.

 

(D) The
falsification of any of the above certifications may subject the Contractor or
subcontractor to civil or criminal prosecution under section 1001 of title 18
and section 3729 of title 31 of the United States Code.

 

(iii) The Contractor
or subcontractor shall make the records required under paragraph (a)(3)(i) of
this section available for inspection, copying, or transcription by authorized
representatives of the Department of Energy or the Department of Labor, and
shall permit such representatives to interview employees during working hours
on the job. If the Contractor or subcontractor fails to submit the required
records or to make them available, the Federal agency may, after written notice
to the Contractor, sponsor, applicant, or owner, take such action as may be
necessary to cause the suspension of any further payment, advance, or guarantee
of funds. Furthermore, failure to submit the required records upon request or
to make such records available may be grounds for debarment action pursuant to
29 CFR 5.12.

 

(4) Apprentices and
trainees—

 

(i) Apprentices.
Apprentices will be permitted to work at less than the predetermined rate for
the work they performed when they are employed pursuant to and individually
registered in a bona fide apprenticeship program registered with the U.S. Department
of Labor, Employment and Training Administration, Office of Apprenticeship
Training, Employer and Labor Services, or with a State Apprenticeship Agency
recognized by the Office, or if a person is employed in his or her first 90
days of probationary employment as an apprentice in such an apprenticeship
program, who is not individually registered in the program, but who has been
certified by the Office of Apprenticeship Training, Employer and Labor Services
or a State Apprenticeship Agency (where appropriate) to be eligible for
probationary employment as an apprentice. The allowable ratio of apprentices to
journeymen on the job site in any craft classification shall not be greater
than the ratio permitted to the Contractor as to the entire work force under
the registered program. Any worker listed on a payroll at an apprentice wage
rate, who is not registered or otherwise employed as stated above, shall be
paid not less than the applicable wage rate on the wage determination for the
classification of work actually performed. In addition, any apprentice
performing work on the job site in excess of the ratio permitted under the
registered program shall be paid not less than the applicable wage rate on the
wage determination for the work actually performed. Where a Contractor is
performing construction on a project in a locality other than that in which its
program is registered, the ratios and wage rates (expressed in percentages of
the journeyman’s hourly rate) specified in the Contractor’s or subcontractor’s
registered program shall be observed. Every apprentice must be paid at not less
than the rate specified in the registered program for the apprentice’s level of
progress, expressed as a percentage of the journeymen hourly rate specified in
the applicable wage determination. Apprentices shall be paid fringe 

 

18

 

benefits in accordance
with the provisions of the apprenticeship program. If the apprenticeship
program does not specify fringe benefits, apprentices must be paid the full
amount of fringe benefits listed on the wage determination for the applicable
classification. If the Administrator determines that a different practice
prevails for the applicable apprentice classification, fringes shall be paid in
accordance with that determination. In the event the Office of Apprenticeship
Training, Employer and Labor Services, or a State Apprenticeship Agency
recognized by the Office, withdraws approval of an apprenticeship program, the
Contractor will no longer be permitted to utilize apprentices at less than the
applicable predetermined rate for the work performed until an acceptable
program is approved.

 

(ii) Trainees.
Except as provided in 29 CFR 5.16, trainees will not be permitted to work at
less than the predetermined rate for the work performed unless they are
employed pursuant to and individually registered in a program which has
received prior approval, evidenced by formal certification by the U.S.
Department of Labor, Employment and Training Administration. The ratio of
trainees to journeymen on the job site shall not be greater than permitted
under the plan approved by the Employment and Training Administration. Every
trainee must be paid at not less than the rate specified in the approved
program for the trainee’s level of progress, expressed as a percentage of the
journeyman hourly rate specified in the applicable wage determination. Trainees
shall be paid fringe benefits in accordance with the provisions of the trainee
program. If the trainee program does not mention fringe benefits, trainees
shall be paid the full amount of fringe benefits listed on the wage
determination unless the Administrator of the Wage and Hour Division determines
that there is an apprenticeship program associated with the corresponding
journeyman wage rate on the wage determination which provides for less than
full fringe benefits for apprentices. Any employee listed on the payroll at a
trainee rate who is not registered and participating in a training plan
approved by the Employment and Training Administration shall be paid not less
than the applicable wage rate on the wage determination for the classification
of work actually performed. In addition, any trainee performing work on the job
site in excess of the ratio permitted under the registered program shall be
paid not less than the applicable wage rate on the wage determination for the
work actually performed. In the event the Employment and Training
Administration withdraws approval of a training program, the Contractor will no
longer be permitted to utilize trainees at less than the applicable
predetermined rate for the work performed until an acceptable program is
approved.

 

(iii) Equal
employment opportunity. The utilization of apprentices, trainees and journeymen
under this part shall be in conformity with the equal employment opportunity
requirements of Executive Order 11246, as amended and 29 CFR part 30.

 

(5) Compliance with
Copeland Act requirements. The Contractor shall comply with the requirements of
29 CFR part 3, which are incorporated by reference in this Contract.

 

(6) Contracts and
Subcontracts. The Recipient, Subrecipient, the Recipient’s and Subrecipient’s
contractors and subcontractor shall insert in any Contracts the clauses
contained herein in(a)(1) through (10) and such other clauses as the
Department of Energy may by appropriate instructions require, and also a clause
requiring the subcontractors to include these clauses in any lower tier
subcontracts. The Recipient shall be responsible for the compliance by any
subcontractor or lower tier subcontractor with all of the paragraphs in this
clause.

 

(7) Contract
termination: debarment. A breach of the Contract clauses in 29 CFR 5.5 may be
grounds for termination of the Contract, and for debarment as a contractor and
a subcontractor as provided in 29 CFR 5.12.

 

(8) Compliance with
Davis-Bacon and Related Act requirements. All rulings and interpretations of
the Davis-Bacon and Related Acts contained in 29 CFR parts 1, 3, and 5 are
herein incorporated by reference in this Contract.

 

(9) Disputes
concerning labor standards. Disputes arising out of the labor standards
provisions of this Contract shall not be subject to the general disputes clause
of this Contract. Such disputes shall be resolved in accordance with the procedures
of the Department of Labor set forth in 29 CFR parts 5, 6, and 7. Disputes
within the meaning of this clause include disputes between the Recipient,
Subrecipient, the

 

19

 

 

Contractor (or any of its
subcontractors) and the contracting agency, the U.S. Department of Labor, or
the employees or their representatives.

 

(10) Certification
of eligibility.

 

(i) By entering into
this Contract, the Contractor certifies that neither it (nor he or she) nor any
person or firm who has an interest in the Contractor’s firm is a person or firm
ineligible to be awarded Government contracts by virtue of section 3(a) of
the Davis-Bacon Act or 29 CFR 5.12(a)(1).

 

(ii) No part of this
Contract shall be subcontracted to any person or firm ineligible for award of a
Government contract by virtue of section 3(a) of the Davis-Bacon Act or 29
CFR 5.12(a)(1).

 

(iii) The penalty
for making false statements is prescribed in the U.S. Criminal Code, 18 U.S.C.
1001.

 

(b) Contract
Work Hours and Safety Standards Act. As used in this paragraph, the terms laborers and
mechanics include watchmen and guards.

 

(1) Overtime
requirements. No Contractor or subcontractor contracting for any part of the
Contract work which may require or involve the employment of laborers or
mechanics shall require or permit any such laborer or mechanic in any workweek
in which he or she is employed on such work to work in excess of forty hours in
such workweek unless such laborer or mechanic receives compensation at a rate
not less than one and one-half times the basic rate of pay for all hours worked
in excess of forty hours in such workweek.

 

(2) Violation;
liability for unpaid wages; liquidated damages. In the event of any violation
of the clause set forth in paragraph (b)(1) of this section the Contractor
and any subcontractor responsible therefor shall be liable for the unpaid
wages. In addition, such Contractor and subcontractor shall be liable to the
United States (in the case of work done under contract for the District of
Columbia or a territory, to such District or to such territory), for liquidated
damages. Such liquidated damages shall be computed with respect to each
individual laborer or mechanic, including watchmen and guards, employed in
violation of the clause set forth in paragraph (b)(1) of this section, in
the sum of $10 for each calendar day on which such individual was required or
permitted to work in excess of the standard workweek of forty hours without
payment of the overtime wages required by the clause set forth in paragraph (b)(1) of
this section.

 

(3) Withholding for
unpaid wages and liquidated damages. The Department of Energy or the Recipient
or Subrecipient shall upon its own action or upon written request of an
authorized representative of the Department of Labor withhold or cause to be
withheld, from any moneys payable on account of work performed by the
Contractor or subcontractor under any such contract or any other Federal
contract with the same prime Contractor, or any other federally-assisted
contract subject to the Contract Work Hours and Safety Standards Act, which is
held by the same prime contractor, such sums as may be determined to be
necessary to satisfy any liabilities of such Contractor or subcontractor for
unpaid wages and liquidated damages as provided in the clause set forth in
paragraph (b)(2) of this section.

 

(4) Contracts and
Subcontracts. The Recipient, Subrecipient, and Recipient’s and Subrecipient’s
contractor or subcontractor shall insert in any Contracts, the clauses set
forth in paragraph (b)(1) through (4) of this section and also a
clause requiring the subcontractors to include these clauses in any lower tier
subcontracts. The Recipient shall be responsible for compliance by any subcontractor
or lower tier subcontractor with the clauses set forth in paragraphs (b)(1) through
(4) of this section.

 

(5) The Contractor
or subcontractor shall maintain payrolls and basic payroll records during the
course of the work and shall preserve them for a period of three years from the
completion of the Contract for all laborers and mechanics, including guards and
watchmen, working on the Contract. Such records shall contain the name and
address of each such employee, social security number, correct classifications,
hourly rates of wages paid, daily and weekly number of hours worked, deductions
made, and actual wages paid.  The records
to be maintained under this paragraph shall be made available by the Contractor
or 

 

20

 

subcontractor for
inspection, copying, or transcription by authorized representatives of the
Department of Energy and the Department of Labor, and the Contractor or
subcontractor will permit such representatives to interview employees during
working hours on the job.

 

RECIPIENT FUNCTIONS
 

(1) On
behalf of the Department of Energy (DOE), Recipient shall perform the following
functions:

 

(a)          Obtain, maintain, and monitor all DBA certified
payroll records submitted by  the
Subrecipients and Contractors at any tier under this Award;

(b)         Review all DBA certified payroll records for
compliance with DBA requirements, including applicable DOL wage determinations;

(c)          Notify DOE of any non-compliance with DBA requirements
by Subrecipients or  Contractors at any
tier, including any non-compliances identified as the result of reviews
performed pursuant to paragraph (b) above;

(d)         Address any Subrecipient and any Contractor DBA
non-compliance issues; if DBA non-compliance issues cannot be resolved in a
timely manner, forward complaints, summary of investigations and all relevant
information to DOE;

(e)          Provide DOE with detailed information regarding the
resolution of any DBA non-compliance issues;

(f)            Perform services in support of DOE investigations of
complaints filed regarding noncompliance by Subrecipients and Contractors with
DBA requirements;

(g)         Perform audit services as necessary to ensure
compliance by Subrecipients and Contractors with DBA requirements and as
requested by the Contracting Officer; and

(h)         Provide copies of all records upon request by DOE or
DOL in a timely manner.

 

(2)             All records
maintained on behalf of the DOE in accordance with paragraph (1) above are
federal government (DOE) owned records. 
DOE or an authorized representative shall be granted access to the
records at all times.

 

(3)             In the event of, and in
response to any Freedom of Information Act, 5 U.S.C. 552,  requests submitted to DOE, Recipient shall
provide such records to DOE within 5 business days of receipt of a request from
DOE

 

21

 

ATTACHMENT 2 - STATEMENT OF PROJECT OBJECTIVES

DE-EE0002022

 

VERTICALLY INTEGRATED MASS
PRODUCTION OF AUTOMOTIVE CLASS LITHIUM ION BATTERIES

 

A.  OBJECTIVES

 

The overall objective of
this project is to establish the manufacturing capability in the US to produce
at least 500 MWh of automotive lithium ion batteries per year by the end of
2012.

 

The Recipient will build
a vertically-integrated factory capacity that encompasses the full production
process, including: the manufacturing of cathode powder, electrode coating,
cell fabrication, module fabrication, and the assembly of complete battery pack
systems ready for vehicle integration. 
Design and production validation will also be performed under this
program, ensuring that the products meet customer specifications, and that the
production lines conform to standard automotive practice.  This work will be accomplished over three
years, resulting in manufacturing capacity by the end of the program of at
least 500 MWh of cells and batteries.

 

B.  SCOPE OF
WORK

 

The general philosophy of
manufacturing expansion is to cost-effectively meet the rapidly escalating
customer volume needs while managing operational risk.  This approach will begin with low-risk,
mature process technologies, improve the processes, and systematically increase
throughput and lower costs over time. 
The first portion of the build-out involves the rapid deployment, using
a “Copy Identical” approach wherein the initial USA-1 cell and module/pack
factory capacity will be installed with the same processes and equipment  currently used in the Recipient’s Asian
factories, while increasing the level of automation for material movement and
process control to increase output and boost productivity. This work will
mostly occur in 2010 (Site 1).

 

The second portion of the
build-out uses nearly identical equipment as what is used in the Site 1
production, but with increased throughput at specific operations that are at
low risk.  This “Copy Improve” high
volume manufacturing (HVM) capacity will further reduce cost and headcount
through additional automation, data collection and improved manufacturing
execution platforms.  Although this work
starts in 2010, the production facilities will not be operational until 2011,
with additional capacity being brought online in 2012.  Sites 2 and 3 of the manufacturing plan will
use this “Copy Improve” philosophy.  The
Recipient will continue to improve specific operational output in powder,
coating and cell assembly, as part of an ongoing effort to continuously improve
productivity.

 

The build-out of the
manufacturing capability will occur in three (3) years, each corresponding
to a specific location.

 

Site 1 — Cell Plant and
Module/Pack Assembly Plant (Building USA-1)

Site 2 — Powder Plant &
Coating Plant (Building R1)

Site 3 — Cell Manufacturing &
Module/Pack Assembly (Building B1)

 

C.  TASKS TO BE PERFORMED

 

Site 1 — Cell and Module/Pack Assembly Plant
(Building USA-1)

 

Site 1 focuses on the Low Volume Manufacturing plant using the “Copy
Identical” approach and represents the bulk of the work of the project for
2010.  Due to the timing of the Recipient’s
needs, some of the Site 1 activity has already started.  These activities include USA-1 (Livonia) site
selection, due diligence, expansion of engineering “core team”, execution of
lease documents and preliminary design /permitting of the facility.

 

Cell Design Validation
(DV) is used to ensure that the cell meets specification and is accomplished
through a Design Verification Plan and Report (DVP&R) process, which
includes cell-level performance, life, environmental, and abuse testing.

 

Production Validation
(PV) testing is used to determine whether the process is capable of producing
consistent product, while meeting the demands during an actual production run
at quoted production rate.

 

The Production Part Approval
Process (PPAP) process includes many elements to ensure that specifications and
requirements are understood and that the production process has the capability
to consistently meet the requirements at production rate.  Examples of PPAP elements include: design
records, engineering change documentation, Engineering Approval, Design Failure
Mode and Effect Analysis (DFMEA), Process Flow Diagram, Process Failure Mode
and Effect Analysis (PFMEA), Control Plan, and Measurement System Analysis
(MSA) Studies.

 

22

 

Task 1.0 — Establish  Cell manufacturing in Building USA-1, the Low
Volume Manufacturing facility.

 

Subtask
1.1                       Revise and maintain Project Management
Plan; Report on activities

Subtask
1.2                       Hire engineering and manufacturing core
team leaders.  Complete factory design,
layout, cost estimate, schedule and permits. 
Complete construction of all non-Manufacturing areas of building and
order long lead facilities equipment.

Subtask
1.3                       Order, install and qualify equipment for
cell design validation (DV) for cells. 
Start cell DV for cells made in existing plants as baseline for DV from
US plants..

Subtask
1.4                       Order cell manufacturing  line equipment and dry rooms.  Begin construction of manufacturing areas and
environmental mitigation equipment areas.

Subtask
1.5                       Complete construction; Install and
qualify dry rooms and cell manufacturing line equipment.

Subtask
1.6                       Ramp-up of labor hiring to support
manufacturing capacity

Subtask
1.7                       Complete Production Validation (PV) and
Device Validation (DV) of cell manufacturing lines

Subtask
1.8                       Complete Production Part Approval
Process (PPAP) for cell manufacturing lines

 

Milestones:           Production Readiness Site 1 Review 

 

The Recipient will
perform an Advanced Product Quality Plan (APQP) Review that will be used to
assess the success of the Site 1 Tasks thru Production Part Approval
Process (PPAP).  APQP is an integral part of the Recipient’s program
for developing and producing products that meet customer requirements. 
APQP is a standard reporting criteria used by the automotive industry.  This review will be performed internally by
the Recipient and a high level summary report of indicators (red, yellow,
green) will be generated and provided to the DOE to document the status of the
project.

 

Site 2 — Powder Plant &
Coating Plant (Building R1)

 

Sites 2 and 3 use the “Copy
Improve” approach, which uses nearly identical equipment as what is used for
Site 1 production, but with increased throughput at specific operations that
are at low risk.  This “Copy Improve”
high volume manufacturing (HVM) capacity will further reduce cost and headcount
through additional automation, data collection and improved manufacturing
execution platforms.  Site 2 represents
the first portion of powder and coating manufacturing on this program.

 

Task 2.0 — Establish one
powder and one coating manufacturing block in Building R1.

 

Subtask
2.1                       Revise and maintain Project Management
Plan; Report on activities

Subtask
2.2a                 Hire engineering and manufacturing core
team leaders.  Design powder
manufacturing line, layouts, cost estimate , schedule, permits and begin
construction

Subtask
2.2b                Hire engineering and manufacturing core
team leaders .  Design coating line,
layouts, construction drawings, cost estimates, schedule, permits and order
long lead facility systems.  Begin construction
of all non-manufacturing areas.

Subtask
2.3a                 Order powder manufacturing equipment and
environmental mitigation systems.  Begin
construction of manufacturing areas.

Subtask
2.3b                Order coating manufacturing equipment and
environmental mitigation systems.  Begin
construction of manufacturing areas.

Subtask
2.4a                 Complete construction; Install and
qualify powder manufacturing equipment

Subtask
2.4b                Complete construction; Install and
qualify coating manufacturing equipment

Subtask 2.5        Ramp-up of labor hiring
to support manufacturing capacity

Subtask
2.6a                 Complete production validation (PV) of
powder line

Subtask
2.6b                Complete production validation (PV) of
coating line

Subtask
2.7                       Complete Production Part Approval
Process (PPAP) for powder and coating lines

 

Milestones:           Production Readiness Site 2 Review

 

The Recipient will perform
an Advanced Product Quality Plan (APQP) Review that will be used to assess the
success whether the goal of establishing powder and coating manufacturing was
achieved.  APQP is an integral part of the Recipient’s program for
developing and producing products that meet customer requirements.  This
review will be performed internally by the Recipient and a high level summary
report of indicators (red, yellow, green) will be generated and provided to the
DOE to document the status of the project.

 

Site 3 — Cell Manufacturing &
Module/Pack Assembly (Building B1)

 

Site 3 represents
additional cell manufacturing and the first module/pack assembly facility on
this program.

 

Task 3.0 — Establish
cell/module/pack manufacturing blocks in Building B1.

 

Subtask
3.1                       Revise and maintain Project Management
Plan; Report on activities

 

23

 

Subtask
3.2a                 Hire engineering and manufacturing core
team leaders.  Design cell manufacturing
line, layouts and construction drawings. 
Complete cost estimate, schedule, permits and begin construction.  Order long lead facilities equipment.

Subtask
3.2b                Hire engineering and manufacturing core
team leaders.  Design module/pack
manufacturing line, layouts and construction drawings.  Complete cost estimate, schedule, permits and
begin construction.  Order long lead
facilities equipment and begin construction of non-manufacturing areas.

Subtask
3.3a                 Order cell manufacturing equipment and
begin construction of manufacturing areas.

Subtask
3.3b                Order module/pack manufacturing equipment
and begin construction of manufacturing areas.

Subtask
3.4a                 Complete construction; Install and
qualify cell manufacturing equipment.

Subtask
3.4b                Complete construction; Install and
qualify module/pack manufacturing equipment.

Subtask
3.5                       Ramp-up of labor hiring to support
manufacturing capacity

Subtask
3.6a                 Complete production validation (PV) of
cell manufacturing line

Subtask
3.6b                Complete production validation (PV) of
module/pack manufacturing line

Subtask
3.7                       Complete Production Part Approval
Process (PPAP) for cell and module/pack lines

 

Milestones:           Production Readiness Site 3 Review

 

The Recipient will
perform an Advanced Product Quality Plan (APQP) Review that will be used to
assess whether the goal of establishing cell and module/pack manufacturing was
achieved.  Completion of Production Part Approval
Process (PPAP) for the cell and module/pack manufacturing is the key criterion
for successful completion of Site 3. This review will be performed internally
by the Recipient and a high level summary report of indicators (red, yellow,
green) will be generated and provided to the DOE to document the status of the
project.

 

D.   DELIVERABLES

 

The periodic, topical, and final reports will be provided in accordance
with Federal Assistance Reporting Checklist (DOE F 4600.2).

 

The Final Progress Report
shall document and summarize all work performed during the award period in a
comprehensive manner. This report shall not merely be a compilation of
information contained in previously submitted quarterly reports, but shall
present that information in an integrated fashion. It shall contain the final
estimate of jobs creation and an estimate of total production capacity for the
facility(ies) funded by this award, including a break-out of jobs creation and
production capacity of any materials component sub-awards.  It shall also present the final production
cost estimates per unit of battery cell/pack/material/component manufactured in
the completed manufacturing facility, the test plan for battery
cells/packs/material/component to meet at least one OEM specification, and
battery cell/pack /material/component performance and abuse test results.  If necessary, this information shall be
marked as business sensitive in the report. 
In addition, the Recipient will be employing an Earned Value Management
System (EVMS) internally to plan, track and reconcile all key activities, costs
and performance for the build out of the planned factory capacity.   The recipient will monitor, track and report
Cost and Schedule variance using Oracle Project Management system.  These reports will be reviewed Monthly at
each project site and summarized for DOE and Recipient management review
Quarterly.

 

At the completion of each
Task, a Review Report will be provided to the DOE to detail how each of the
subtasks were successfully completed.

 

Technical deliverables as defined
in the Funding Opportunity Announcement:

 

Area of Interest 1: Cell
and Battery Manufacturing Facilities

 

·                  Cost estimates
of battery cells/packs manufactured in the completed manufacturing facility

·                  Delivery to the
DOE of 100 battery cells and 20 packs manufactured at the completed
manufacturing facility from low rate initial production for validation purposes

·                  Test plan for
battery cells/packs to meet at least one OEM specification

·                  Battery
cell/pack performance and abuse tests and associated test report

 

Area
of Interest 2: Advanced Battery Supplier Manufacturing Facilities

 

·                  Cost estimates
of materials and components manufactured in the completed manufacturing
facility

·                  Delivery to the
DOE, 50 battery cells manufactured using material or components made by the
completed  manufacturing facility for low
rate initial production for validation purposes

 

24

 

·                  Material/component
screening test plan to meet customer specification

·                  Material/component
screening test report

·                  Cell or battery
test plan to meet customer specification

·                  Cell or battery
performance and abuse tests and associated test report

 

E.                                                  BRIEFINGS/TECHNICAL PRESENTATIONS

 

As needed in accordance
with the schedule, the Recipient shall prepare detailed briefings for
presentation to the Government Contracting Officer Representative (COR) at one
of the National Energy Technology Laboratory sites (Pittsburgh, PA or
Morgantown, WV), DOE Headquarters (Washington, DC) or the Recipient’s
site.  The briefings shall be given by
the Recipient to explain the plans, progress, and results of the Project
effort. Such briefings are anticipated to occur upon the initiation of the
award (kickoff meeting), as well as at quarterly/annual project reviews, and a
final Project presentation.

 

25

 

	
  

   

   

  	
  NOT SPECIFIED
  /OTHER ASSISTANCE AGREEMENT 1. Award No. DE-EE0002022 2. Modification No. 001 3. Effective Date 12/03/2009 4. CFDA No. 4. Awarded To Al23
  SYSTEMS, INC. Attn: MARIA THOMPSON 1 KINGSBURY AVE WATERTOWN MA 0249725789 4.
  Sponsoring Office U.S. DOE/NETL Morgantown Campus 3610 Collins Ferry Road PO
  Box 880 Morgantown WV 26507-0880 7. Period of Performance 12/03/2009 through
  12/02/2012 8. Type of Agreement Grant Cooperative Agreement Other 9.
  Authority 31 USC 6304 - see Page 2 10 USC 2358 10. Purchase Request or
  Funding Document No. 11. Remittance Address Al23 SYSTEMS, INC. Attn : MARIA
  THOMPSON 1 KINGSBURY AVE WATERTOWN MA 029725789 $249,090,000.00 12. Total
  Amount Govt. Share: Cost Share : $249,090,000.00 Total : $498,180,000.00 13.
  Funds Obligated This action: $0.00 Total : $249,090,000.00 14. Principal
  Investigator John Pinho 617-778-5700 15. Program Manager RALPH D. NINE Phone:
  304-285-2017 16. Administrator U.S. DOE/NETL Morgantown Campus 3610 Collins
  Ferry Road PO Box 880 Morgantown WV 26507-0880 17. Submit Payment Requests To
  OR for NETL (Morgantown) U. S . Department of Energy Oak Ridge Financial
  Service Center P.O. Box 4787 Oak Ridge TN 37831 18. Paying Office 19. Submit
  Reports To See Attachment 3 20. Accounting and Appropriation Data 21. Research
  Title and/or Description of Project RECOVERY ACT - VERTICALLY INTEGRATED MASS
  PRODUCTION OF AUTOMOTIVE CLASS LITHIUM ION BATTERIES For the Recipient For
  the United States of America 22. Signature of Person Authorized to Sign 25. Signature
  of Grants/Agreements Officer Signature on File 23. Name and Title Date Signed
  26. Name of Officer RAYMOND R. JARR 27. Date Signed 12/10/2009

  NOT SPECIFIED
  /OTHER 

  

 

	
  

  	
  NOT SPECIFIED
  /OTHER  CONTINUATION SHEET REFERENCE
  NO. OF DOCUMENT BEING CONTINUED DE-EE0002022/001 PAGE OF 2 3 NAME OF OFFEROR
  OR CONTRACTOR Al23 SYSTEMS, INC. ITEM NO. (A) SUPPLIES/SERVICES (B) QUANTITY
  (C) UNIT (D) UNIT PRICE (E) AMOUNT (F) DUNS Number: 130452506 See Page 3 for
  full text of this Amendment. DOE Award Administrator: Sue Miltenberger
  304-285-4083 susan.miltenberger@netl.doe.gov Recipient Business Officer:
  James Haley 617-924-8910 jhaley@a123systems.com Block 9 Authority: PL 95-91
  DOE Organization Act, PL 111-5 American Recovery and Reinvestment Act of 2009
  and PL 109-58 Energy Policy Act 2005 The administrative office
  (administrative contracting activity) for this award is 02605. The
  administrative office (administrative contracting activity) code is needed by
  the Recipient for reporting to FederalReporting.gov concerning awards made with
  funding from the American Recovery and Reinvestment Act of 2009 (ARRA or
  Recovery Act). ASAP: NO Extent Competed: COMPETED Davis-Bacon Act: YES
  Payment: OR for NETL (Morgantown) U.S. Department of Energy Oak Ridge
  Financial Service Center P.O. Box 4787 Oak Ridge TN 37831 Fund: 05799 Appr
  Year: 2009 Allottee: 31 Report Entity: 220520 Object Class: 25500 Program:
  1005107 Project: 2004490 WFO: 0000000 Local Use: 0000000 TAS Agency: 89 TAS
  Account: 0331 JULY2004 NOT SPECIFIED /OTHER 

  

 

 

 

DE-EE0002022

A123 Systems, Inc.

Amendment 001

Page 3 of 3

 

The purpose of this
Amendment is to recognize the DOE, Chicago Operations Office Official Approval
for an “Advance Waiver of Domestic and Foreign Patent Rights.”  This Amendment will also correct the
Rebudgeting and Recovery of Indirect Costs provision.  Accordingly, the following changes are hereby
made:

 

1.  SPECIAL TERMS AND CONDITIONS FOR USE IN MOST
GRANTS AND COOPERATIVE AGREEMENTS, REBUDGETING AND RECOVERY OF INDIRECT COSTS -
REIMBURSABLE INDIRECT COSTS AND FRINGE BENEFITS is hereby deleted in its
entirety and the following provision is substituted in lieu thereof.  All changes are shown in bold text.

 

“REBUDGETING
AND RECOVERY OF INDIRECT COSTS - REIMBURSABLE INDIRECT COSTS AND FRINGE BENEFITS

 

a.             If actual allowable indirect costs are less than those
budgeted and funded under the award, you may use the difference to pay
additional allowable direct costs during the project period.  If at the completion of the award the
Government’s share of total allowable costs (i.e., direct and indirect), is
less than the total costs reimbursed, you must refund the difference.

 

b.             Recipients are expected to manage their indirect
costs.  DOE will not amend an award
solely to provide additional funds for changes in indirect cost rates.  DOE recognizes that the inability to obtain
full reimbursement for indirect costs means the recipient must absorb the
underrecovery.  Such underrecovery may be
allocated as part of the organization’s required cost sharing.

 

c.             The budget for this award includes fringe benefits and
indirect (labor overhead) costs, but does not include indirect
G&A  rate costs.  Therefore, such G&A costs shall not be
charged to nor shall reimbursement be requested for this project nor shall such
G&A costs for this project be allocated to any other federally sponsored
project.  In addition, such G&A costs
shall not be counted as cost share unless approved by the Contracting Officer.”

 

2.  ATTACHMENT 1 — INTELLECTUAL PROPERTY
PROVISIONS, PATENT RIGHTS (LARGE BUSINESS FIRMS) — NO WAIVER (OCT 2003) is
hereby replaced with the attached FAR 52.227-12 PATENT RIGHTS-WAIVER (JUL
1996), as modified by 10 CFR 784, DOE Patent Waiver Regulations.

 

Except as contained
herein, all other terms and conditions remain in full force and effect.

 

END OF AMENDMENT
001

 

26

 

02. FAR
52.227-12 Patent Rights — Waiver (JUL 1996), as modified by 10 C.F.R. 784, DOE
Patent Waiver Regulations

 

(a)   Definitions.

 

As used in this
clause:

 

Background patent means a domestic patent covering an
invention or discovery which is not a Subject Invention and which is owned or
controlled by the Contractor at any time through the completion of this
contract:

 

(i)  Which
the Contractor, but not the Government, has the right to license to others
without obligation to pay royalties thereon, and

 

(ii) 
Infringement of which cannot reasonably be avoided upon the practice of any
specific process, method, machine, manufacture or composition of matter (including
relatively minor modifications thereof) which is a subject of the research,
development, or demonstration work performed under this contract.

 

Contract means any contract, grant, agreement,
understanding, or other arrangement, which includes research, development, or
demonstration work, and includes any assignment or substitution of parties.

 

DOE patent waiver
regulations means
the Department of Energy patent waiver regulations at 10 CFR Part 784.

 

Invention as used in this clause, means any invention
or discovery which is or may be patentable or otherwise protectable under Title
35 of the United States Code or any novel variety of plant that is or may be
protectable under the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).

 

Made when used in relation to any invention
means the conception or first actual reduction to practice of such invention.

 

Nonprofit
organization
means a university or other institution of higher education or an organization
of the type described in section 501(c)(3) of the Internal Revenue Code of
1954 (26 U.S.C. 501(c)) and exempt from taxation under section 501(a) of
the Internal Revenue Code (26 U.S.C. 501(a)) or any nonprofit scientific or
educational organization qualified under a state nonprofit organization
statute.

 

Patent Counsel means the Department of Energy Patent
Counsel assisting the procuring activity.

 

Practical
application means
to manufacture, in the case of a composition or 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
being utilized and that its benefits are, to the extent permitted by law or
Government regulations, available to the public on reasonable terms.

 

Secretary means the Secretary of Energy.

 

Small business
firm means a
small business concern as defined at Section 2 of the Pub. L. 85-536 (15
U.S.C. 632) and implementing regulations of the Administrator of the Small
Business Administration.  For the purpose
of this clause, the size standards for small business concerns involved in
Government procurement and subcontracting at 13 CFR 121.3-8 and 13 CFR
121.3-12, respectively, will be used.

 

Subject invention means any invention of the Contractor
conceived or first actually reduced to practice in the course of or under this
contract, provided that in the case of a variety of plant, the date of
determination (as defined in section 41(d) of the Plant Variety Protection
Act (7 U.S.C. 2401(d)) must also occur during the period of contract
performance.

 

(b)         Allocation of principal rights.

 

Whereas DOE has
granted a waiver of rights to subject inventions to the Contractor, the
Contractor 

 

3

 

may elect to
retain the entire right, title, and interest throughout the world to each
subject invention subject to the provisions of this clause and 35 U.S.C. ‘‘202
and 203.  With respect to any subject
invention in which the Contractor elects to retain title, the Federal
Government shall have a nonexclusive, nontransferable, irrevocable, paid-up
license to practice or have practiced for or on behalf of the United States the
subject invention throughout the world.

 

(c)   Invention disclosure, election of title, and
filing of patent applications by Contractor.

 

(1)   The Contractor shall disclose each subject
invention to the Patent Counsel within six months after conception or first
actual reduction to practice, whichever occurs first in the course of or under
this contract, but in any event, prior to any sale, public use, or public
disclosure of such invention known to the Contractor.  The disclosure to the Patent Counsel shall be
in the form of a written report and shall identify the inventors and the
contract under which the invention was made. 
It shall be sufficiently complete in technical detail to convey a clear
understanding, to the extent known at the time of the disclosure, of the
nature, purpose, operation, and physical, chemical, biological, or electrical
characteristics of the invention.  The
disclosure shall also identify any publication, on sale, or public use of the
invention and whether a manuscript describing the invention has been submitted
for publication and, if so, whether it has been accepted for publication at the
time of disclosure.  In addition, after
disclosure to the Patent Counsel, the Contractor shall promptly notify the
Patent Counsel of the acceptance of any manuscript describing the invention for
publication or of any on sale or public use planned by the Contractor.

 

(2)   The Contractor shall elect in writing whether
or not to retain title to any such invention by notifying the Patent Counsel at
the time of disclosure or within 8 months of disclosure, as to those countries
(including the United States) in which the Contractor will retain title;
provided, that in any case where publication, on sale, or public use has
initiated the 1-year statutory period wherein valid patent protection can still
be obtained in the United States, the period of election of title may be
shortened by the Agency to a date that is no more than 60 days prior to the end
of the statutory period.  The Contractor
shall notify the Patent Counsel as to those countries (including the United
States) in which the Contractor will retain title not later than 60 days prior
to the end of the statutory period.

 

(3)   The Contractor shall file its United States
patent application on an elected invention within 1 year after election, but
not later than at least 60 days prior to the end of any statutory period
wherein valid patent protection can be obtained in the United States after a
publication, on sale, or public use.  The
Contractor shall file patent applications in additional countries (including
the European Patent Office and under the Patent Cooperation Treaty) within
either 10 months of the corresponding initial patent application or 6 months
from the date permission is granted by the Commissioner of Patents and
Trademarks to file foreign patent applications where foreign filing has been
prohibited by a Secrecy Order.

 

(4)   Requests for extension of the time for
disclosure to the Patent Counsel, election, and filing may, at the discretion
of DOE, be granted, and will normally be granted unless the Patent Counsel has
reason to believe that a particular extension would prejudice the Government’s
interest.

 

(d)         Conditions when the Government may obtain title
notwithstanding an existing waiver.

 

The Contractor
shall convey to DOE, upon written request, title to any subject invention—

 

(1)   If the Contractor elects not to retain title
to a subject invention;

 

(2)   If the Contractor fails to disclose or elect
the subject invention within the times specified in paragraph (c) of this
clause (provided that DOE may only request title within 60 days after learning
of the Contractor’s failure to report or elect within the specified times);

 

(3)   In those countries in which the Contractor
fails to file patent applications within the times specified in paragraph (c) of
this clause; provided, however, that if the Contractor has filed a patent
application in a country after the times specified in paragraph (c) of
this clause, but prior to its receipt of the written request of DOE, the
Contractor shall continue to retain title in that country;

 

(4)   In any country in which the Contractor
decides not to continue the prosecution of any application 

 

4

 

for, to pay the
maintenance fees on, or defend in reexamination or opposition proceeding on, a
patent on a subject invention; or

 

(5)   If the waiver authorizing the use of this
clause is terminated as provided in paragraph (p) of this clause.

 

(e)          Minimum rights to Contractor when the Government
retains title.

 

(1)   The Contractor shall retain a nonexclusive,
royalty-free license throughout the world in each subject invention to which
the Government obtains title under paragraph (d) of this clause except if
the Contractor fails to disclose the subject invention within the times
specified in paragraph (c) of this clause. 
The Contractor’s license extends to its domestic subsidiaries and
affiliates, if any, within the corporate structure of which the Contractor is a
part and includes the right to grant sublicenses of the same scope to the
extent the Contractor was legally obligated to do so at the time the contract
was awarded.  The license is transferable
only with the approval of DOE except when transferred to the successor of that
part of the Contractor’s business to which the invention pertains.

 

(2)   The Contractor’s domestic license may be
revoked or modified by DOE to the extent necessary to achieve expeditious
practical application of the subject invention pursuant to an application for
an exclusive license submitted in accordance with applicable provisions in 37
CFR part 404 and DOE licensing regulations. 
This license shall not be revoked in that field of use or the
geographical areas in which the Contractor has achieved practical application
and continues to make the benefits of the invention reasonably accessible to
the public.  The license in any foreign
country may be revoked or modified at the discretion of DOE to the extent the
Contractor, its licensees, or its domestic subsidiaries or affiliates have
failed to achieve practical application in that foreign country.

 

(3)   Before revocation or modification of the
license, DOE shall furnish the Contractor a written notice of its intention to
revoke or modify the license, and the Contractor shall be allowed 30 days (or
such other time as may be authorized by DOE for good cause shown by the
Contractor) after the notice to show cause why the license should not be
revoked or modified.  The Contractor has
the right to appeal, in accordance with applicable agency licensing regulations
and 37 CFR part 404 concerning the licensing of Government-owned inventions,
any decision concerning the revocation or modification of its license.

 

(f)            Contractor action to protect the Government’s
interest.

 

(1)   The Contractor agrees to execute or to have
executed and promptly deliver to DOE all instruments necessary to:

 

(i)    establish or confirm the rights the
Government has throughout the world in those subject inventions to which the
Contractor elects to retain title, and

 

(ii)   convey title to DOE when requested under
paragraphs (d) and (n)(2) of this clause, and to enable the
Government to obtain patent protection throughout the world in that subject
invention.

 

(2)   The Contractor agrees to require, by written
agreement, its employees, other than clerical and nontechnical employees, to
disclose promptly in writing to personnel identified as responsible for the
administration of patent matters and in a format suggested by the Contractor
each subject invention made under contract in order that the Contractor can
comply with the disclosure provisions of paragraph (c) of this clause, and
to execute all papers necessary to file 
patent applications on subject inventions and to establish the
Government’s rights in the subject inventions. 
This disclosure format should require, as a minimum, the information
required by paragraph (c)(1) of this clause.  The Contractor shall instruct such employees
through employee agreements or other suitable educational programs on the
importance of reporting inventions in sufficient time to permit the filing of
patent applications prior to U.S. or foreign statutory bars.

 

(3)   The Contractor shall notify DOE of any
decision not to continue the prosecution of a patent 

 

5

 

application, pay
maintenance fees, or defend in a reexamination or opposition proceeding on a
patent, in any country, not less than 30 days before the expiration of the
response period required by the relevant patent office.

 

(4)   The Contractor agrees to 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 (identify the contract) awarded by DOE.  The Government has certain rights in this
invention.”

 

(5)   The Contractor shall establish and maintain
active and effective procedures to assure that subject inventions are promptly
identified and disclosed to Contractor personnel responsible for patent matters
within 6 months of conception and/or first actual reduction to practice,
whichever occurs first in the course of or under this contract.  These procedures shall include the
maintenance of laboratory notebooks or equivalent records and other records as
are reasonably necessary to document the conception and/or the first actual
reduction to practice of subject inventions, and records that show that the
procedures for identifying and disclosing the inventions are followed.  Upon request, the Contractor shall furnish
the Patent Counsel a description of such procedures for evaluation and for
determination as to their effectiveness.

 

(6)   The Contractor agrees, when licensing a
subject invention, to arrange to avoid royalty charges on acquisitions
involving Government funds, including funds derived through Military Assistance
Program of the Government or otherwise derived through the Government; to
refund any amounts received as royalty charges on the subject invention in
acquisitions for, or on behalf of, the Government; and to provide for such
refund in any instrument transferring rights in the invention to any party.

 

(7)   The Contractor shall furnish the Patent
Counsel the following:

 

(i)    Interim reports every 12 months (or such
longer period as may be specified by the Patent Counsel) from the date of the
contract, listing subject inventions during that period and stating that all
subject inventions have been disclosed or that there are no such inventions.

 

(ii)   A final report, within 3 months after
completion of the contracted work, listing all subject inventions or stating that
there were no such inventions, and listing all subcontracts at any tier
containing a patent rights clause or certifying that there were no such
subcontracts.

 

(8)   The Contractor shall promptly notify the
Patent Counsel in writing upon the award of any subcontract at any tier
containing a patent rights clause by identifying the subcontractor, the
applicable patent rights clause, the work to be performed under the
subcontract, and the dates of award and estimated completion.  Upon request of the Patent Counsel, the
Contractor shall furnish a copy of such subcontract, and no more frequently
than annually, a listing of the subcontracts that have been awarded.

 

(9)   The Contractor shall provide, upon request,
the filing  date, serial number and
title, a copy of the patent application (including an English-language version
if filed in a language other than English), and patent number and issue date
for any subject invention for which the Contractor has retained title.

 

(10) Upon request, the Contractor shall furnish the
Government an irrevocable power to inspect and make copies of the patent
application file.

 

(g)         Subcontracts.

 

(1)   Unless otherwise directed by the Contracting
Officer, the Contractor shall include the clause at 48 CFR 952.227-11, suitably
modified to identify the parties, in all subcontracts, regardless of tier, for
experimental, developmental, or research work to be performed by a small
business firm or nonprofit organization, except where the work of the
subcontract is subject to an Exceptional Circumstances Determination by
DOE.  In all other subcontracts,
regardless of tier, for experimental, developmental, demonstration, or research
work, the Contractor shall include the patent rights clause at 48 CFR 952.227-13

 

6

 

(suitably modified
to identify the parties).

 

(2)   The Contractor shall not, as part of the
consideration for awarding the subcontract, obtain rights in the subcontractor’s
subject inventions.

 

(3)   In the case of subcontractors at any tier,
the Department, the subcontractor, and Contractor agree that the mutual
obligations of the parties created by this clause constitute a contract between
the subcontractor and the Department with respect to those matters covered by
this clause.

 

(4)   The Contractor shall promptly notify the
Contracting Officer in writing upon the award of any subcontract at any tier
containing a patent rights clause by identifying the subcontractor, the
applicable patent rights clause, the work to be performed under the subcontract,
and the dates of award and estimated completion.  Upon request of the Contracting Officer, the
Contracting Officer shall furnish a copy of such subcontract, and, no more
frequently than annually, a listing of the subcontracts that have been awarded.

 

(h)         Reporting on utilization of subject inventions.

 

The Contractor
agrees to submit on request periodic reports no more frequently than annually
on the utilization of a subject invention or on efforts at obtaining such
utilization that are being made by the Contractor and any of its licensees or
assignees.  Such reports shall include
information regarding the status of development, date of first commercial sale
or use, gross royalties received by the Contractor, and such other data and
information as DOE may reasonably specify. 
The Contractor also agrees to provide additional reports as may be
requested by DOE in connection with any march-in proceedings undertaken by DOE
in accordance with paragraph (j) of this clause.  To the extent data or information supplied
under this paragraph is considered by the Contractor, its licensee or assignee
to be privileged and confidential and is so marked, DOE agrees that, to the
extent permitted by law, it shall not disclose such information to persons
outside the Government.

 

(i)             Preference for United States industry.

 

Notwithstanding
any other provision of this clause, the Contractor agrees that neither it nor
any assignee will grant to any person the exclusive right to use or sell any
subject invention in the United States unless such person agrees that any
products embodying the subject invention will be manufactured substantially in
the United States.  However, in
individual cases, the requirement for such an agreement may be waived by DOE
upon a showing by the Contractor or its assignee that reasonable but
unsuccessful efforts have been made to grant licenses on similar terms to
potential licensees that would be likely to manufacture substantially in the
United States or that under the circumstances domestic manufacture is not
commercially feasible.

 

(j)             March-in rights.

 

The Contractor
agrees that with respect to any subject invention in which it has acquired
title, DOE has the right in accordance with the procedures in 48 CFR 27.304-1(g) to
require the Contractor, an assignee, or exclusive licensee of a subject
invention to grant a nonexclusive, partially exclusive, or exclusive license in
any field of use to a responsible applicant or applicants, upon terms that are
reasonable under the circumstances, and if the Contractor, assignee, or
exclusive licensee refuses such a request, DOE has the right to grant such a
license itself if DOE determines that—

 

(1)   Such action is necessary because the
Contractor or assignee has not taken, or is not expected to take within a
reasonable time, effective steps to achieve practical application of the
subject invention in such field of use;

 

(2)   Such action is necessary to alleviate health
or safety needs which are not reasonably satisfied by the Contractor, assignee,
or their licensees;

 

(3)   Such action is necessary to meet requirements
for public use specified by Federal regulations and such requirements are not
reasonably satisfied by the Contractor, assignee, or licensees; or

 

7

 

(4)   Such action is necessary because the
agreement required by paragraph (i) of this clause has not been obtained
or waived or because a licensee of the exclusive right to use or sell any
subject invention in the United States is in breach of such agreement.

 

(k) Background
Patents [reserved]

 

(l)             Communications.

 

All reports and
notifications required by this clause shall be submitted to the Patent Counsel
unless otherwise instructed.

 

(m)       Other inventions.

 

Nothing contained
in this clause shall be deemed to grant to the Government any rights with
respect to any invention other than a subject invention, except with respect to
Background Patents, above.

 

(n)         Examination of records relating to inventions.

 

(1)   The Contracting Officer or any authorized representative
shall, until 3 years after final payment under this contract, have the right to
examine any books (including laboratory notebooks), records, and documents of
the Contractor relating to the conception or first actual reduction to practice
of inventions in the same field of technology as the work under this contract
to determine whether—

 

(i)    Any such inventions are subject inventions;

 

(ii)   The Contractor has established and maintains
the procedures required by paragraphs (f)(2) and (f)(5) of this
clause; and

 

(iii) The
Contractor and its inventor have complied with the procedures.

 

(2)   If the Contracting Officer determines that an
inventor has not disclosed a subject invention to the Contractor in accordance
with the procedures required by paragraph (f)(5) of this clause, the
Contracting Officer may, within 60 days after the determination, request title
in accordance with paragraphs (d)(2) and (d)(3) of this clause.  However, if the Contractor establishes that
the failure to disclose did not result from the Contractor’s fault or
negligence, the Contracting Officer shall not request title.

 

(3)   If the Contracting Officer learns of an
unreported Contractor invention which the Contracting Officer believes may be a
subject invention, the Contractor may be required to disclose the invention to
DOE for a determination of ownership rights.

 

(4)   Any examination of records under this
paragraph shall be conducted in such a manner as to protect the confidentiality
of the information involved.

 

(o)         Withholding of payment.

 

NOTE:  This paragraph does not apply to subcontracts
or grants.

 

(1)   Any time before final payment under this
contract, the Contracting Officer may, in the Government’s interest, withhold
payment until a reserve not exceeding $50,000 or 5 percent of the amount of the
contract, whichever is less, shall have been set aside if, in the Contracting
Officer’s opinion, the Contractor fails to—

 

(i)    Establish, maintain, and follow effective
procedures for identifying and disclosing subject inventions pursuant to
paragraph (f)(5) of this clause;

(ii)   Disclose any subject invention pursuant to
paragraph (c)(1) of this clause;

(iii) 
Deliver acceptable interim reports pursuant to paragraph (f)(7)(I) of this
clause;

(iv)  Provide the information regarding subcontracts
pursuant to paragraph (f)(6) of this clause; or

(v)   Convey to the Government, using a
DOE-approved form, the title and/or rights of the Government in each subject
invention as required by this clause.

 

8

 

(2)   Such reserve or balance shall be withheld
until the Contracting Officer has determined that the Contractor has rectified
whatever deficiencies exist and has delivered all reports, disclosures, and
other information required by this clause.

 

(3)   Final payment under this contract shall not
be made before the Contractor delivers to the Patent Counsel all disclosures of
subject inventions required by paragraph (c)(1) of this clause, an
acceptable final report pursuant to paragraph (f)(7)(ii) of this clause,
and all past due confirmatory instruments, and the Patent Counsel has issued a
patent clearance certification to the Contracting Officer.

 

(4)   The Contracting Officer may decrease or
increase the sums withheld up to the maximum authorized above.  If the maximum amount authorized above is
already being withheld under other provisions of the contract, no additional
amount shall be withheld under this paragraph. 
The withholding of any amount or the subsequent payment thereof shall
not be construed as a waiver of any Government right.

 

(p)         Waiver Terminations.

 

Any waiver granted
to the Contractor authorizing the use of this clause (including any retention
of rights pursuant thereto by the Contractor under paragraph (b) of this
clause) may be terminated at the discretion of the Secretary or his designee in
whole or in part, if the request for waiver by the Contractor is found to
contain false material statements or nondisclosure of material facts, and such
were specifically relied upon by DOE in reaching the waiver determination.  Prior to any such termination, the Contractor
will be given written notice stating the extent of such proposed termination
and the reasons therefore, and a period of 30 days, or such longer period as
the Secretary or his designee shall determine for good cause shown in writing,
to show cause why the waiver of rights should not be so terminated.  Any waiver termination shall be subject to
the Contractor’s minimum license as provided in paragraph (e) of this
clause.

 

(q)         Atomic Energy.

 

No claim for
pecuniary award or compensation under the provisions of the Atomic Energy Act
of 1954, as amended, shall be asserted by the Contractor or its employees with
respect to any invention or discovery made or conceived in the course of or under
this contract.

 

(r)            Publication.

 

It is recognized
that during the course of work under this contract, the contractor or its
employees may from time to time desire to release or publish information
regarding scientific or technical developments conceived or first actually
reduced to practice in the course of or under this contract.  In order that public disclosure of such
information will not adversely affect the patent interests of DOE or the
contractor, approval for release of publication shall be secured from Patent
Counsel prior to any such release or publication.  In appropriate circumstances, and after
consultation with the contractor, Patent Counsel may waive the right of
prepublication review.

 

(s)          Forfeiture of rights in unreported subject inventions.

 

(1)   The contractor shall forfeit and assign to
the Government, at the request of the Secretary of Energy or designee, all
rights in any subject invention which the contractor fails to report to Patent
Counsel within six months after the time the contractor:

 

(i)    Files or causes to be filed a United States
or foreign patent application thereon; or

(ii)   Submits the final report required by
paragraph (f)(7)(ii) of this clause, whichever is later.

 

(2)   However, the Contractor shall not forfeit
rights in a subject invention if, within the time specified in paragraph (n)(1) of
this clause, the contractor:

 

(i)    Prepares a written decision based upon a
review of the record that the invention was neither conceived nor first
actually reduced to practice in the course of or under the contract and
delivers the decision to Patent Counsel, with a copy to the Contracting
Officer; or

 

9

 

(ii)   Contending that the subject invention is not
a subject invention, the contractor nevertheless discloses the subject
invention and all facts pertinent to this contention to the Patent Counsel,
with a copy to the Contracting Officer, or

(iii) 
Establishes that the failure to disclose did not result from the contractor’s
fault or negligence.

 

(3)   Pending written assignment of the patent
application and patents on a subject invention determined by the Contracting
Officer to be forfeited (such determination to be a Final Decision under the
Disputes clause of this contract), the contractor shall be deemed to hold the
invention and the patent applications and patents pertaining thereto in trust
for the Government.  The forfeiture
provision of this paragraph shall be in addition to and shall not supersede any
other rights and remedies which the Government may have with respect to subject
inventions.

 

(t)   U. S. Competitiveness

 

The Contractor
agrees that any products embodying any waived invention or produced through the
use of any waived invention will be manufactured substantially in the United
States unless the Contractor can show to the satisfaction of the DOE that it is
not commercially feasible to do so.  In
the event the DOE agrees to foreign manufacture, there will be a requirement
that the Government’s support of the technology be recognized in some
appropriate manner, e.g., recoupment of the Government’s investment, etc.  The Contractor agrees that it will not
license, assign or otherwise transfer any waived invention to any entity unless
that entity agrees to these same requirements.  Should the Contractor or other such entity
receiving rights in the invention undergo a change in ownership amounting to a
controlling interest, then the waiver, assignment, license, or other transfer
of rights in the waived invention is suspended until approved in writing by the
DOE.

 

10Exhibit 10.26

 

FOURTH
AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAIVER

 

THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND WAIVER (“Amendment”) is made as of March 9, 2010 by and among
COBRA ELECTRONICS CORPORATION, a Delaware corporation (the “Borrower”),
THE PRIVATEBANK AND TRUST COMPANY, an Illinois state chartered bank, as
Administrative Agent (“Administrative Agent”) and the Lenders currently
party to the Loan Agreement (as hereinafter defined).

 

RECITALS

 

A.                                   The
Administrative Agent, the Lenders and the Borrower entered into a Loan and
Security Agreement dated as of February 15, 2008  as amended by First Amendment to Loan and
Security Agreement dated as of October 31, 2008, as further amended
pursuant to Second Amendment to Loan and Security Agreement and Waiver dated as
of August 13, 2009 and as further amended pursuant to Third Amendment to
Loan and Security Agreement dated as of October 24, 2009 (as so amended,
the “Loan Agreement”).

 

B.                                     The parties to
the Loan Agreement desire to enter into this Amendment for the purpose of
making certain amendments to the Loan Agreement and waiving compliance with
certain covenants in the Loan Agreement.

 

AGREEMENT

 

In consideration of the matters set forth in the
recitals and the covenants and provisions herein set forth, and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:

 

1.                                       Definitions.  Capitalized terms used but not defined herein
are used as defined in the Loan Agreement.

 

2.                                       Amendments.  Upon satisfaction of the conditions precedent
hereinafter set forth, the Loan Agreement shall be amended as follows:

 

2.1.                              The definition of Revolving Loan Commitment contained
in Section 1 of the Loan is hereby amended in its entirety to read as
follows:

 

“Revolving Loan Commitment” means (a) in
the aggregate for all Lenders, $23,000,000 from the Fourth Amendment Effective
Date through and including December 30, 2010 and $20,000,000 commencing December 31,
2010 and at all times thereafter and (b) as to each Lender, the following:

 

 

	
  Lender

  	
  Revolving
  Loan

  	
  Revolving
  Loan

  
	
   

  	
  Commitment

  	
  Commitment
  12/31/10

  
	
   

  	
  through
  12/30/10

  	
  and
  after

  
	
   

  	
   

  	
   

  
	
  PrivateBank

  	
  $12,932,151.35

  	
  $11,245,349.00

  
	
  RBS

  	
  $10,067,848.65

  	
  $ 8,754,651.00

  

 

2.2.                              Section 1.1
of the Loan Agreement is hereby amended by adding a new definition of Fourth
Amendment Effective Date which reads as follows:

 

“Fourth Amendment Effective Date” shall mean March 9,
2010.

 

2.3.                              The proviso paragraph immediately following clause (iv) of
Section 2(a) of the Loan Agreement is hereby amended in its
entirety to read as follows:

 

“provided,
that (x) the sum of the advances with respect to clauses (ii) and (iii) above
shall at no time exceed Fourteen Million and No/100 Dollars ($14,000,000)
through and including June 30, 2010 and Twelve Million and No/100 Dollars
($12,000,000) at all times thereafter, and (y) the Revolving Loan Limit
shall in no event exceed Twenty Three Million Dollars ($23,000,000) from the
Fourth Amendment Effective Date through and including December 30, 2010
and Twenty Million Dollars ($20,000,000) commencing December 31, 2010 and
all times thereafter (the “Maximum Revolving Loan Limit”) and further provided
that the Administrative Agent may, in its reasonable credit judgment consistent
with industry standards for asset-based loans, from time to time reduce the
percentage advance rates specified in (i), (ii) and (iii) above upon
notice to the Borrower and the Lenders.

 

2.4.                              Section 12(n) of the Loan Agreement is hereby
amended in its entirety to read as follows:

 

“(n) 
The Borrower shall, no later than April 15, 2010, deliver to the
Administrative Agent (i) all original certificates together with stock
powers executed in blank by the Borrower evidencing the Borrower’s pledge of
65% of the equity interests in its direct foreign subsidiaries and (ii) original
intercompany notes (accompanied by an endorsement in blank) made payable to the
Borrower by Cobra UK and PPL.”

 

2.5.                              Section 14(a) of
the Loan Agreement is hereby amended in its entirety to read as follows:

 

“(a) 
Intentionally Omitted.”

 

2.6.                              The signature pages to the Loan Agreement are hereby
amended by deleting the Revolving Loan Commitments of the Lenders appearing
thereon.

 

2

 

3.                                       Waiver.  The Borrower has advised the Administrative
Agent that the Borrower is in violation of the provisions of Section 14(a) of
the Loan Agreement as of December 31, 2009, is in violation of the
provisions of Section 12(n) as a result of Borrower’s failure to deliver
the stock certificates referred to therein by November 20, 2009, and is
also in violation of the provisions of Section 5(c) as a result of
Borrower’s failure to deliver intercompany notes made payable to the Borrower
by Cobra UK and PPL (collectively, the “Violations”).  Subject to the satisfaction of the conditions
precedent set forth in Section 6 below, the Requisite Lenders hereby
acknowledge the Violations and waive any Event of Default or Unmatured Event of
Default that would otherwise be caused by the Violations.  The waiver under this Section 3 is
limited as specifically written herein and shall be solely a waiver of the
above described Violations and it shall not constitute a waiver of any other
terms or conditions of the Loan Agreement.

 

4.                                       Affirmation.  Except as expressly amended hereby, the Loan
Agreement and the Other Agreements are and shall continue in full force and
effect and the Borrower hereby fully ratifies and affirms the Loan Agreement
and each Other Agreement to which it is a party.  Reference in any of this Amendment, the Loan
Agreement or any Other Agreement to the Loan Agreement shall be a reference to
the Loan Agreement as amended hereby and as further amended, modified,
restated, supplemented or extended from time to time.

 

5.                                       Representations and Warranties.  To induce the
Administrative Agent and Lenders to execute this Amendment, the Borrower hereby
represents and warrants to the Lenders as follows:

 

5.1.                              The Borrower is duly authorized to execute and deliver this
Amendment and is duly authorized to perform its obligations hereunder.

 

5.2.                              The execution, delivery and performance by the Borrower of
this Amendment do not and will not (i) require any consent or approval of
any Person (other than any consent or approval which has been obtained and is
in full force and effect), (ii) conflict with (A) any provision of
law, (B) the charter, by-laws or other organizational documents of the
Borrower or (C) any agreement, indenture, instrument or other document, or
any judgment, order or decree, which is binding upon the Borrower or any of its
properties or (iii) require, or result in, the creation or imposition of
any Lien on any asset of the Borrower other than Liens in favor of the
Administrative Agent.

 

5.3.                              This Amendment is the legal, valid and binding obligation of
the Borrower, enforceable against the Borrower in accordance with its terms,
subject to bankruptcy, insolvency and similar laws affecting enforceability of
creditors’ rights generally and to general principles of equity.

 

5.4.                              The representations and warranties in the Loan Agreement and
Other Agreements (including but not limited to Section 11 of the Loan
Agreement) are true and correct with the same effect as though made on and as
of the date of this Amendment (except to the extent stated to relate to a
specific earlier date, in which case such representations and warranties were
true and correct as of such earlier date).

 

3

 

5.5.                              Except for the Violations waived pursuant to Section 3
of this Amendment, no Unmatured Event of Default or Event of Default has
occurred and is continuing.

 

6.                                       Conditions to Amendment.  This Amendment shall become effective upon
the satisfaction in full of all of the following conditions precedent, each of
which shall be satisfactory to the Administrative Agent and the Requisite
Lenders:

 

6.1.                              Amendment.  The Borrower and the Requisite Lenders shall
have executed and delivered to the Administrative Agent this Amendment.

 

6.2.                              Amendment Fee.  The Administrative Agent shall have received
$50,000.00 as and for a nonrefundable amendment fee for the pro rata account of
the Lenders executing this Amendment.

 

6.3.                              Fees and Expenses.  The Borrower shall have paid all of the
Administrative Agent’s legal fees and expenses in connection with this
Amendment to the extent invoiced.

 

6.4.                              Other.  Such other documents as the Administrative
Agent or Lender shall reasonably request.

 

7.                                       Costs and Expenses.  The Borrower shall pay or reimburse the
Administrative Agent within five Business Days after demand for all reasonable
costs and expenses (including reasonable attorneys fees) incurred by it in
connection with the preparation, delivery, administration, and execution of
this Amendment and the documentation and transactions contemplated hereby.

 

8.                                       Counterparts.  This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute one instrument. 
Delivery of an executed counterpart of this Amendment by facsimile or
electronic transmission shall be effective as delivery of an original
counterpart.

 

9.                                       Headings.  The headings and captions of this Amendment
are for the purposes of reference only and shall not affect the construction
of, or be taken into consideration in interpreting, this Amendment.

 

10.                                 APPLICABLE LAW.  THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS WITHOUT
GIVING EFFECT TO ILLINOIS CHOICE OF LAW DOCTRINE.

 

The parties hereto have caused this Amendment to be
executed by their duly authorized officers, all as of the day and year first
above written.

 

Signature Pages Follow

 

4

 

	
   

  	
  COBRA
  ELECTRONICS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Smith

  
	
   

  	
  Name:

  	
  Michael
  Smith

  
	
   

  	
  Title:

  	
  Senior
  Vice President and CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  PRIVATEBANK AND TRUST COMPANY, individually as a Lender
  and as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mitchell B. Rasky

  
	
   

  	
  Name:

  	
  Mitchell
  B. Rasky

  
	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RBS
  CITIZENS, N.A., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Paul M. Mongeau

  
	
   

  	
  Name:

  	
  Paul
  M. Mongeau

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  

 

Fourth
Amendment Signature Page

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