Professional Services Agreement
(Time and Materials)
Contract No. OP-001
This Agreement, effective 01,September 2001, is between Ocean Power
("Customer"), a Delaware corporation, having an office at 5000 Robert J. Mathews
Parkway, Eldorado Hills, California 95762 and Science Applications International
Corporation ("SAIC"), a Delaware corporation, having an office at 10260 Campus
Point Drive, San Diego, California 92121.
I. DESCRIPTION OF PROFESSIONAL SERVICES
SAIC shall provide to Customer the Professional Services ("Services") described
Exhibit A. The Services shall be provided subject to the Terms and Conditions,
which follow.
II. CUSTOMER AND SAIC ADMINISTRATIVE CONTACTS
J. Michael Hopper Corrie Garrow
Chief Operating Officer Sr. Contracts Representative
Ocean Power Science Applications International Corporation
5000 Robert J. Mathews Parkway 9455 Towne Centre Drive, M/S W-2
El Dorado Hills, California 95762 San Diego, CA 92121
Tel. No. (916) 933-8100 Tel. No. (858) 826-7125
Fax No. (916) 933-8177 Fax No. (858) 826-6360
In consideration of the mutual obligations assumed under this Agreement, SAIC
and Customer agree to the Terms and Conditions attached hereto and incorporated
by reference and represent that this Agreement is executed by duly authorized
representatives as of the dates below.
AGREED BY:
INSERT CUSTOMER'S FULL LEGAL SCIENCE APPLICATIONS
NAME in all caps and bold INTERNATIONAL CORPORATION
By: By:
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Name: Joseph P. Maceda Name: Corrie Garrow
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Title:President Title:Sr. Contracts Representative
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Date: Date:
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Rev.2001-05-12
TERMS AND CONDITIONS
1. Services. SAIC will perform the services ("Services") and deliver the
deliverables ("Deliverables") described in the Statement of Work, set forth in
Exhibit A.
2. Place of Performance. Unless otherwise provided in this Agreement, SAIC may
perform the Services in whole or in part at SAIC's place of business, Customer's
place of business, and/or such other locations as SAIC may select.
3. Effective Date; Term. This Agreement shall be effective as of the date first
above written (the "Effective Date"), and shall continue in full force and
effect until the Services have been completed, the Estimated Price (as defined
in section 4) has been reached, or the Agreement has been terminated in
accordance with Section 9 hereof.
4. Payment Terms.
(a) Customer will pay SAIC monthly on a "time and materials" basis for labor
expended and costs and expenses incurred, as hereinafter described. SAIC will
use good faith efforts to complete the Services and deliver the Deliverables
within the estimated price ("Estimated Price") set forth in Exhibit B, but does
not guarantee that the Services can be completed or the Deliverables can be
delivered within the Estimated Price.
(b) Customer shall pay to SAIC for labor expended in performing the Services
an amount computed by multiplying the applicable hourly billing rate set forth
in Exhibit B by the number of hours worked. Fractional parts of an hour shall be
payable on a prorated basis.
(c) In addition to paying for labor expended, Customer shall reimburse SAIC
for the cost of all goods and materials purchased exclusively for use in
performing the Services or which are incorporated into any Deliverable, as well
as for all reasonable travel expenses and miscellaneous out-of-pocket expenses
incurred in performing the Services. Such costs and expenses shall be subject to
the administrative and overhead charge provided in Exhibit B.
(d) Customer shall have no obligation to pay SAIC more than the Estimated
Price. SAIC shall have no obligation to provide labor or incur costs or expenses
having a combined value more than the Estimated Price, even if the Services have
not been completed or the Deliverables delivered, or the results desired by
Customer have not been achieved. The parties may, by mutual written agreement,
increase the Estimated Price.
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(e) Customer shall make an initial payment of working capital to SAIC of
$200,000 within 30 days of contract award and shall there after replenish the
level of working capital by making payments according to the schedule and
provisions of Exhibit B. Customer shall provide this amount until such time as
SAIC has been paid the amount of $6,800,000. Thereafter, SAIC shall draw down on
the working capital until the Not To Exceed Amount of $7,7000,00 is expended.
SAIC shall have a lien upon and may retain or repossess any and all Deliverables
if Customer does not make payment in full to SAIC.
(f) Invoiced amounts are immediately due and payable by either electronic
funds transfer (EFT) or by mail to the following location(s):
If Customer has EFT capabilities, use the following address:
Science Applications International Corporation
Bank of America San Francisco
Account No. 14520-00006
ABA No. 121000358
Telegraphic Abbreviation: BNKAMER
Reference: Project Number(s) and Invoice Numbers(s)
If Customer does not have EFT capabilities, use the following address:
Science Applications International Corporation
File No. 2570
Los Angeles, CA 90074-2570
Reference: Project Number(s) and Invoice Numbers(s)
(g) If Customer fails to pay the total amount of an invoice within thirty
(30) days of such invoice, interest compounded at the rate of one percent (1%)
per month shall be charged on all amounts unpaid and outstanding. If Customer
fails to make any payment to SAIC as required hereunder, SAIC shall have the
right, exercisable in SAIC's sole discretion, in addition to its other rights
and remedies, to cease further performance of the Services hereunder.
(h) Bill To Address. The invoice will be mailed to:
Ocean Power
5000 Robert J. Matthews Parkway
El Dorado Hills, CA 95672
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5. Resources to be Provided by Customer.
(a) Customer shall provide, maintain and make available to SAIC, at
Customer's expense and in a timely manner, the resources described in this
Section 5 and such other additional resources, as SAIC may from time to time
reasonably request in connection with SAIC's performance of the Services. Delays
in the provision of these resources may result in delays and/or additional cost
in performing the Services or Delivering the Deliverables.
(b) Customer will designate and make available to SAIC qualified Customer
personnel or representatives who will consult with SAIC on a regular basis in
connection with the Services. Customer will furnish such documentation or other
information as is reasonably necessary to perform the Services.
(c) Customer shall furnish access to Customer's premises, and appropriate
workspace for any SAIC personnel working at Customer's premises, as necessary
for performance of those portions of the Services to be performed at Customer's
premises.
6. Confidentiality. In the event either party determines that it is necessary
to provide confidential, proprietary, or trade secret information to the other
party in connection with this Agreement, such disclosure will be made, after
advance written notice to the other party, and only in accordance with the
confidentiality provisions of the Technology Licensing Agreement. Nothing in
this Agreement or in the licensing Agreement referred to in this section shall
be deemed to restrict or prohibit SAIC from providing to others services and
deliverables the same as or similar to the Services and Deliverables. In
providing any such similar services or deliverables to any third party, SAIC
shall keep confidential any Customer confidential, proprietary or trade secret
information which is subject to the Licensing Agreement in accordance with the
requirements of such agreement.
7. Intellectual Property.
(a) All improvements which are made, conceived or reduced to practice by
SAIC Energy Products Division (or its employees, agents, representatives or
collaborators), either alone or together with others, shall be the sole property
of SAIC; provided, however, that any such Improvements shall be included within
the meaning of the SAIC Technology License dated 23 April 2001. SAIC grants back
to OP the same rights to enhancements or improvements as are enumerated in the
Agreement without additional costs.
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(b) This agreement is not intended and shall not be construed to in any way
restrict SAIC's right to engage in research, development, marketing, sales,
licensing or other activities relating to SAIC Technology (whether or not such
activities are within the Field of Use) or in any other activity which is not
inconsistent with the Agreement. No rights are transferred to OP outside of the
Field of Use and SAIC reserves the rights not expressly granted to OP.
8. Taxes. Customer shall pay any and all sales, use, value added, excise,
import, privilege, or other similar taxes, levies or payments in lieu thereof,
including interest and penalties thereon, arising out of or in connection with
the performance of the Services by SAIC (other than those levied on SAIC's
income), imposed by any authority, government or governmental agency, and shall
comply with all applicable treaties, laws, rules, or regulations relating
thereto.
9. Termination. Either party may terminate this Agreement for cause, i.e.
default, nonpayment, etc. upon 30 days written notice to the other party.
Termination will not affect payment obligations incurred under this Agreement
for Services performed and reimbursable costs and expenses incurred prior to the
effective date of termination, including without limitation commitments to
purchase products or services from third parties which were entered into by SAIC
in the course of performance hereunder prior to the effective date of
termination. Such reimbursable costs may include, but are not limited to,
cancellation fees, minimum consulting or material fees, and non-refundable
charges or fees for third party products or services.
10. Limited Warranty.
(a) SAIC warrants that the Services provided under this Agreement shall be
performed with that degree of skill and judgment normally exercised by
recognized professional firms performing services of the same or substantially
similar nature. In the event of any breach of the foregoing warranty, provided
Customer has delivered to SAIC timely notice of such breach as hereinafter
required, SAIC shall, at its own expense, in its discretion either: (1)
re-perform the non-conforming Services and correct the non-conforming
Deliverables to conform to this standard; or (2) refund to Customer that portion
of the amounts received by SAIC attributable to the non-conforming Services
and/or Deliverables. No warranty claim shall be effective unless Customer has
delivered to SAIC written notice specifying in detail the non-conformities
within 90 days after performance of the non-conforming Services or tender of the
non-conforming Deliverables. The remedy set forth in this Section 10(a) is the
sole and exclusive remedy for breach of the foregoing warranty.
(b) SAIC SPECIFICALLY DISCLAIMS ANY OTHER EXPRESS OR IMPLIED STANDARDS,
GUARANTEES, OR WARRANTIES, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, ANY WARRANTIES THAT MAY BE ALLEGED TO ARISE AS
A RESULT OF CUSTOM OR USAGE, ANY WARRANTY OF ERROR-FREE PERFORMANCE, OR ANY
WARRANTY OF THIRD PARTY PRODUCTS, OR FUNCTIONALITY OF THE CLIENT'S HARDWARE,
SOFTWARE, FIRMWARE, OR COMPUTER SYSTEMS.
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(c) Customer represents and warrants to SAIC that Customer has the right to
use and furnish to SAIC for SAIC's use in connection with this Agreement, any
information, specifications, data or Intellectual Property that Customer has
provided or will provide to SAIC in order for SAIC to perform the Services and
to create the Deliverables identified in Exhibit A.
11. Limitation of Liability.
(a) SAIC's total liability to Customer for any and all liabilities, claims
or damages arising out of or relating to this Agreement, howsoever caused and
regardless of the legal theory asserted, including breach of contract or
warranty, tort, strict liability, statutory liability or otherwise, shall not,
in the aggregate, exceed the amount actually paid to SAIC under this Agreement,
or under the specific task order at issue, whichever is less.
(b) In no event shall either SAIC or Customer be liable to the other for any
punitive, exemplary, special, indirect, incidental or consequential damages
(including, but not limited to, lost profits, lost business opportunities, loss
of use or equipment down time, and loss of or corruption to data) arising out of
or relating to this Agreement, regardless of the legal theory under which such
damages are sought, and even if the parties have been advised of the possibility
of such damages or loss.
12. Non-Waiver of Rights. The failure of either party to insist upon performance
of any provision of this Agreement, or to exercise any right, remedy or option
provided herein, shall not be construed as a waiver of the right to assert any
of the same at any time thereafter.
13. Rights and Remedies Not Exclusive. Unless otherwise expressly provided
herein, no right or remedy of a party expressed herein shall be deemed
exclusive, but shall be cumulative with, and not in substitution for, any other
right or remedy of that party.
14. Severability. If any covenant, condition, term, or provision contained in
this Agreement is held or finally determined to be invalid, illegal, or
unenforceable in any respect, in whole or in part, such covenant, condition,
term, or provision shall be severed from this Agreement, and the remaining
covenants, conditions, terms and provisions contained herein shall continue in
force and effect, and shall in no way be affected, prejudiced or disturbed
thereby.
15. Conflicting Provisions. This Agreement and all of the exhibits, schedules,
and documents attached hereto are intended to be read and construed in harmony
with each other, but in the event any provision in any attachment conflicts with
any provision of this Agreement, then this Agreement shall be deemed to control,
and such conflicting provision to the extent it conflicts shall be deemed
removed and replaced with the governing provision herein.
16. Assignment. Neither party may sell, assign, transfer, or otherwise convey
any of its rights or delegate any of its duties under this Agreement without the
prior written consent of the other party. Notwithstanding the foregoing, SAIC
may without violation of this paragraph engage the services of independent
contractors to assist in the performance of its duties hereunder.
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17. Applicable Law. This Agreement shall be governed by and construed under the
laws of the State of California, without regard to its laws relating to conflict
or choice of laws.
18. Interpretation. The captions and headings used in this Agreement are solely
for the convenience of the parties, and shall not be used in the interpretation
of the text of this Agreement. Each party has read and agreed to the specific
language of this Agreement; therefore no conflict, ambiguity, or doubtful
interpretation shall be construed against the drafter.
19. Disputes. Any controversy, claim or dispute ("Dispute") arising out of or
relating to this Agreement shall be resolved by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. Before commencing any such arbitration, the parties
agree to enter into negotiations to resolve the Dispute. If the parties are
unable to resolve the Dispute by good faith negotiation, either party may refer
the matter to arbitration. The arbitration shall take place in the County of San
Diego, State of California. The arbitrator(s) shall be bound to follow the
provisions of this Agreement in resolving the dispute, and may not award any
damages which are excluded by this Agreement. The decision of the arbitrator(s)
shall be final and binding on the parties, and any award of the arbitrator(s)
may be entered or enforced in any court of competent jurisdiction. Any request
for arbitration of a claim by either party against the other relating to this
Agreement must be filed no later than one year after the date on which SAIC
concludes performance under this Agreement.
20. Force Majeure. Neither party shall be liable for any failure of or delay in
performance of its obligations under this Agreement to the extent such failure
or delay is due to circumstances beyond its reasonable control, including,
without limitation, acts of God, acts of a public enemy, fires, floods, wars,
civil disturbances, sabotage, accidents, insurrections, blockades, embargoes,
storms, explosions, labor disputes (whether or not the employees' demands are
reasonable and/or within the party's power to satisfy), acts of any governmental
body, failure or delay of third parties or governmental bodies from whom a party
is obtaining or must obtain approvals, authorizations, licenses, franchises or
permits, or inability to obtain labor, materials, power, equipment, or
transportation (collectively referred to herein as "Force Majeure"). Each party
shall use its reasonable efforts to minimize the duration and consequences of
any failure of or delay in performance resulting from a Force Majeure event.
21. Multiple Copies or Counterparts of Agreement. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. This Agreement
shall not be effective until the execution and delivery between each of the
parties of at least one set of the counterparts.
22. Notices. All notices or other written communication required or permitted to
be given under any provision of this Agreement shall be deemed to have been
given by the notifying party if mailed by certified mail, return receipt
requested, to the receiving party addressed to the mailing address set forth in
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the first paragraph of this Agreement, or such other address as the parties may
designate in writing to the other parties. Additionally, notices sent by any
other means (i.e., facsimile, overnight delivery, courier, etc.) may be
acceptable subject to written confirmation of both the transmission and receipt
of the notice.
23. Relationship of Parties. SAIC is an independent contractor in all respects
with regard to this Agreement. Nothing contained in this Agreement shall be
deemed or construed to create a partnership, joint venture, agency, or other
relationship other than that of contractor and customer.
24. Third Party Beneficiaries. This Agreement does not create, and shall not be
construed as creating, any rights or interests enforceable by any person not a
party to this Agreement.
25. Waiver or Modification. This Agreement may be modified, or part or parts
hereof waived, only by an instrument in writing specifically referencing this
Agreement and signed by an authorized representative of the party against whom
enforcement of the purported modification or waiver is sought.
26. Entire Agreement. This Agreement, including any and all Exhibits attached
hereto, which are hereby incorporated by reference, constitutes the entire
agreement and understanding between the parties and supersedes and replaces any
and all prior or contemporaneous proposals, agreements, understandings,
commitments or representations of any kind, whether written or oral, relating to
the subject matter hereof or the Services or Deliverables to be provided
hereunder.
27. Survival. The provisions of sections 4, 6, 7, 9, 10, 11, and 19 shall
survive the termination or expiration of this Agreement.
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Exhibit A
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Statement of Work
Period of Performance: 1 September 2001 to 31 August 2003
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Overview:
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The goal of this program is to use the lessons learned from the USDOE
dish/Stirling and related development programs to create a viable near-term
solar dish concentrator power system for electrical power production. The
program consists of four tasks. Task 1 is the refinement of the present SAIC
dish concentrator design and development of components needed for commercial
sales. Components to be developed include a fixed-focus, low-cost reflector
facet and a high-moment drive system for the dish concentrator. Task 2 consists
of marketing and business development activities, to create a market pull for
the systems. Task 3 is the development of an alternative receiver for the dish
system, to give an option to the present Stirling engine, which has demonstrated
poor reliability. Task 4 is product demonstration and testing, in which two full
systems will be fielded as demonstration units and for testing of improved
components. At the end of this two-year effort, SAIC will have designed and
demonstrated a system suitable for commercial application for power production
in the U.S. and other markets.
The following paragraphs give more detail on the activities in each of the
tasks. Dollar amounts shown are planning estimates only
TASK 1. ADVANCED DISH DEVELOPMENT
SAIC TASK WORK ($2,500)
The dish structure will be improved and simplified. Most likely, this will be
done in conjunction with changing from steel to aluminum for the structural
components. Structural analysis will be done to ensure that the structure
provides adequate stiffness in all orientations and conditions of wind and
gravity. Joints will be re-designed to simplify assembly and minimize fit-up and
alignment issues.
A fixed-focal-length facet will be developed. The facet will be a drop-in
replacement for the present facets, using the same mounting and alignment
approach. Different designs and materials of construction will be traded off,
and testing of prototypes will be conducted to determine the most cost-effective
approach.
A large-moment drive system suitable for the dish will be developed from
preliminary designs already in place at SAIC. Analysis and testing of prototype
sub-systems will be conducted to validate the design.
The control system of the dish will be upgraded to incorporate lessons learned
from the dish/Stirling system. The control wiring will be simplified and
modifications to accommodate the new receiver and drive system will be
implemented.
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All parts of the dish design will be coordinated with the receiver development
task and with each other in a comprehensive systems integration task. Design
reviews will be conducted at specific points in the design development process
to ensure that all subsystems fit together and work together correctly. The main
driver in the design process will be reliability, followed by the cost of
electricity from the systems. All improvements and modifications will be
analyzed in view of their impacts on these factors.
SUBCONTRACTOR WORK DIRECTED BY SAIC ($1,500K)
Two major subcontractors are contemplated for this phase, they are Tomcat for
the structure and drive, and Rotating Precision Motion for the backup drive
vendor. Large scale production contractor will be developed during this phase
using Vince Gorgas's holding company.
TASK 2. MARKETING AND BUSINESS DEVELOPMENT
SAIC TASK WORK ($500K)
Existing leads for commercial sales of the system will be followed up, with the
goal of obtaining firm orders for systems. New leads will be developed as they
are identified. For immediate implementations, SAIC may use other flat-plate PV,
concentrating PV, or solar thermal systems and components, and act as a system
integrator for end-user customers. As production of the SAIC dish concentrator
system ramps up, the SAIC system will be blended into the product mix for the
customers.
SUBCONTRACTOR WORK DIRECTED BY SAIC ($100K)
DOE has recommended that we help fund a RDI multi-client market assessment of
Concentration solar power technologies, including dish stirling. This will be
use as an independent assessment of the true market potential for Ocean Powers
product line..
TASK 3. RECEIVER DEVELOPMENT
SAIC TASK WORK ($600K)
Alternative receivers for the dish concentrator will be evaluated and tested.
The best receiver for the system will be selected based on considerations of
availability, cost, reliability, and performance. Receivers that are being
considered include the Amonix/C-Tech PV receiver, Solar Systems, Ltd. PV
receiver, and the integrating sphere/multi-spectrum PV receiver design of Ugor
Ortabasi. The approach to receiver development will be to obtain prototype
receivers and implement them on the NREL or other test-bed dish concentrators
for evaluation. Advanced systems with potential for increased performance or
lower cost will be identified and traded off against the baseline receiver
selected from available technologies. Two of these systems include the NREL
multiple-series-cell PV cells and the multi-junction PV cells from Spectralab.
SAIC will pursue limited, directed R&D on advanced technologies with high
potential in order to prepare them for implementation on the system in the
future.
In order to maximize performance of a PV or other receiver, flux smoothing
devices will be analyzed and tested, and the best approach found will be
implemented on the prototype systems.
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SUBCONTRACTOR WORK DIRECTED BY SAIC ($1,400K)
The C-tech/Amonix photovoltaic power conversion system will result in a complete
16 kW PV receiver, with plans to built 100's more. ($50K C-tech, $145K Amonix)
The United Innovations Receiver using Emcor cell is more risky, but UI has
agreed to a fixed price contract for $750K to provide a 20kW receiver ready for
testing and mass production. ($750 United Innovations)
Solar System Ltd. Of Australia will consider a joint receiver sales and system
sales agreement, which would net them both system sales and receiver sales. We
would install and operate and maintain their systems in the USA. They would also
help SAIC integrate the SSL receiver onto the SAIC dish. ($450K SSL)
TASK 4. PRODUCT TESTING AND SPECIFICATION
SAIC TASK WORK ($400K)
Development items will be tested in subsystem tests to validate designs and
production techniques. Two full dish systems will be built and operated for
demonstration and testing purposes. These systems will be operated to measure
the performance and demonstrate the reliability of the dish and receiver
subsystems improved during this program. Upgrade the users manual, installation
manual, checkout manual and acceptance testing procedures.
SUBCONTRACTOR WORK DIRECTED BY SAIC ($300K)
This would be work at Tomcat, APS STAR or at NREL to help to qualify our systems
as soon as possible. ($300K Misc. Contractors)
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Exhibit B
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Hourly Rates (by labor category):
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Labor Category Hourly Billing Rate
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Sr. Program Manager $255
Sr. Project Manager $175
Sr. Engineer $142
Manufacturing Supervisor $110
Fabrication/Installation Spvr. $80
Project Engineer $88
Project Technician $82
Sr. Structural Engineer $118
Administrative Assistant $79
The above rates are effective 01 September 2001 through 31 August 2002. There
after the rates will be increased by 5% annually
Administrative Charges to be applied to Material, Travel and Other Expenses: 18%
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Estimated Price: $7,700,000
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The estimated number of hours by labor category, estimated costs and expenses,
and the Estimated Price are estimates only and may vary. SAIC, in its
discretion, may use a greater or lesser number of hours in any labor category,
and may incur a greater or lesser amount of costs and expenses, but may not
charge more than the total Estimated Price for all labor unless Customer agrees
in writing.
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