Seattle-based supercomputing company Cray (NASDAQ: CRAY) has inked a contract deal with the University of Stuttgart, to deliver two supercomputers to the University’s High Performance Computing Center Stuttgart (HLRS). The multi-year, multi-phase contract is worth an estimated $60 million. The first phase of the contract will take place in 2011, during which the Cray XE6 supercomputer will go into production at the university. The second supercomputer, the next-generation Cascade, will be delivered to the university in 2013. Cray says the Cascade is made possible, in part, by the company’s participation in the Defense Advance Research Project Agency’s (DARPA) High Productivity Computer Systems program earlier this year.

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One of the giants of the New England cleantech scene is making waves—or should I say, wind. Devens, MA-based American Superconductor (NASDAQ: AMSC) said today it has received a new order for 17 wind-turbine electrical control systems from Inox Wind, based in India. Financial details weren’t given, but the company is touting it as a significant development.

Normally this wouldn’t really be news for us—the Inox partnership itself isn’t new—but the order is the latest in a series of moves that signify AMSC’s rise to prominence in the global power technology scene. Last week, the company said it had paid $8 million in cash to acquire a 25 percent ownership stake in Blade Dynamics, a U.K.-based maker of wind-turbine blades. And in bigger news for the company, fiscal year 2009 was AMSC’s first full fiscal year of profitability. The majority of the company’s revenues—which have been growing from quarter to quarter for about the past three years—come from its wind power business.

American Superconductor first entered the wind market in 2006-2007 when it acquired Windtec, an Austrian wind turbine and electrical systems company. In 2008, the company scored a $450 million contract to make power converters for Sinovel Wind Corporation in China. In 2008, AMSC also licensed its wind turbine design to Ghodawat Industries in India (which also placed a $20 million order for electrical control systems from AMSC last April). So Inox is AMSC’s second big wind turbine manufacturing customer in India.

AMSC was founded in 1987 by four MIT professors, including current CEO and chairman Greg Yurek. Before getting heavily into renewable energy and wind power, the company was best known for making high-temperature superconductor wire, which can carry more power than copper wire and can be applied to various smart-grid problems. AMSC has approximately 800 employees and has a strong presence in China and India.

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There’s a new cleantech player in town. As we and other media outlets reported last week, Watertown, MA-based A123Systems (NASDAQ: AONE) has spun out a new company called 24M Technologies, which is developing a new kind of energy storage system that combines aspects of lithium-ion and flow battery technologies. The company announced today it has raised $10 million in Series A venture capital from Charles River Ventures and North Bridge Venture Partners. It also said it is collaborating with MIT and Rutgers University on a project supported by a $6 million grant from ARPA-E, the relatively new research agency within the U.S. Department of Energy.

The announcement is a strong PR push for Cambridge, MA-based 24M as a separate entity, but the company isn’t giving many details about its technology or business strategy just yet. A123 and North Bridge Venture Partners did not respond to requests for comment last week. (It’s not totally clear to me why A123 would spin this company out instead of keeping it in-house, where it would seem to have enough resources.)

Here’s what we know so far. 24M’s technology originated at A123, the lithium ion battery maker, and was further developed at MIT. It combines aspects of rechargeable batteries, fuel cells, and flow batteries. A flow battery pumps liquid electrolyte (often stored in external tanks) through an electrochemical cell to produce electricity. 24M says it is targeting energy-storage applications such as transportation—presumably hybrid and electric vehicles—and the power grid.

The latter is certainly a long-term problem in renewable energy; solar power and wind farms won’t go very far without more efficient ways to store the electricity generated. It sounds like 24M, like many other companies, is looking to develop technology that will store more energy in a given amount of space, for less cost than existing batteries.

A123 has an unspecified equity stake in 24M, which is led by president and co-founder Throop Wilder, who is a veteran of the IT world. Wilder was previously involved with Crossbeam Systems and American Internet Corp, among other tech companies. His fellow 24M co-founders are MIT scientists Yet-Ming Chiang (co-founder of A123) and W. Craig Carter.

“We believe that 24M’s technology has the potential to reduce energy storage costs for transportation and grid applications, and we look forward to helping the company as it leverages our research innovations for the development of commercially viable systems,” said A123’s CEO, David Vieau, in a statement.

Some other interesting details about 24M have been reported elsewhere. For those interested in the technical aspects, Martin LaMonica of CNET pointed to a patent for a “redox flow device” filed by Chiang, Carter, and others on behalf of A123 and MIT. This may or may not be related to the technology that 24M is working on. And 24M’s Wilder told Scott Kirsner of the Boston Globe that he originally met Chiang through North Bridge (which invested in A123), while Wilder was an entrepreneur-in-residence at Charles River. Wilder also said that 24M will be expanding to 10 to 20 employees within the next six months.

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Seattle-based Cray (NASDAQ: CRAY) said today it has been awarded a multi-year, $47 million contract from the U.S. Department of Energy to provide supercomputing products and support services to the National Oceanic and Atmospheric Administration and Oak Ridge National Laboratory. The machines will be used for advanced climate modeling and research. Under the terms of the contract, Cray will first deliver an XT6 machine, which will go into production later this year, followed by a next-generation supercomputer codenamed “Baker” (plus upgrades to the XT6) in 2011.

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Seattle-based Modumetal is taking an important step forward today in its quest to reinvent the metals industry. The nanotech and advanced materials company is announcing a partnership with Steel Dynamics (SDI), based in Fort Wayne, IN, which will put its nanolaminated coating technology into industrial-scale steel applications.

Financial terms of the partnership weren’t given. But SDI (NASDAQ: STLD) is one of the largest steel producers and metals recyclers in the U.S. Its primary focus is on big construction projects like buildings and bridges. Some other prominent steelmakers include U.S. Steel, Nucor, and European giant ArcelorMittal.

“It’s a big deal for us,” says Christina Lomasney, Modumetal’s co-founder and CEO. She says that working with a large steel company like SDI “represents such a huge opportunity,” and that it “validates the scalability of the nanotechnologies we’re working on.”

Modumetal grows what it calls “nanolaminated structures” in vats using a patented chemical and electrical process. These materials are new kinds of metals that are stronger and lighter than steel and have other advantages as well. For example, the company’s materials can be used to make high-tech coatings that resist rust and corrosion much better than the zinc coatings of traditional galvanized steel. Most of the steel produced in the world is galvanized, Lomasney says, so this is one of Modumetal’s first big markets to tackle.

The idea is that the company’s nanolaminates can provide better performance than conventional zinc, so steel producers can use a lot less material to achieve the same anti-corrosion specifications. “For the steel industry, it’s a cost savings advantage,” Lomasney says. “We think we can save [at least] half the cost of conventional galvanizing.” That could ultimately translate into cheaper manufacturing costs for things like cars, buildings, and bridges.

Lomasney says her company will provide the “entire production line” of machines and equipment to help SDI produce nanolaminated steel in the next six months. “We take steel and turn it into ‘Modu-galvanized’ steel,” Lomasney says. “The actual operation is going to be a joint collaboration. The initial scale-up is probably going to be in Seattle.” To that end, Modumetal has expanded into a large warehouse next to its headquarters at a shipyard on Lake Union. The company now has just over 20 employees.

“This is going to be our first scale-up application,” Lomasney says. She adds that the Steel Dynamics deal is one of several partnerships to be announced in the future: “We’re looking at applications in aerospace, automotive, oil and gas, and consumer products.” (She declined to give any specific examples of the latter.)

Last week, Modumetal won a national innovation award from the Angel Capital Association. It has also won a number of defense contracts and government grants in the past few years. The company was founded in late 2006, and its investors include Seattle-based Alliance of Angels, Second Avenue Partners, and WRF Capital. Its competitors include firms like Xtalic, Integran Technologies, and The NanoSteel Company.

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Seattle-based Cray, the supercomputer company, announced today it has been awarded a multi-year, $20 million contract with the Foundation for Space Technology, Applications and Science in Brazil. Under the terms of the contract, the company will deliver a Cray XT6 supercomputer to Brazil’s National Institute for Space Research, to perform weather forecasts and climate studies; the computer will go into production later this year. Cray (NASDAQ: CRAY) has won a series of large government contracts, both foreign and domestic, in the past year. Last July, Cray CEO Peter Ungaro gave me a detailed overview of the company’s strategy, shortly before it posted a surprise profit for the second quarter of 2009.

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Seattle-based Cray (NASDAQ: CRAY), the supercomputing firm, announced today it has been awarded a $45 million, multi-year contract to provide the National Nuclear Security Administration (NNSA) with a next-generation Cray supercomputer. The new computing platform, called Cielo, will support all three NNSA laboratories—Los Alamos National Laboratory, Sandia National Laboratories, and Lawrence Livermore National Laboratory. The new supercomputer will be housed at Los Alamos and is slated to be delivered in the second half of this year.

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Seattle-based Cray, the supercomputing company, announced today it has won three high-performance computing awards from the U.S. Department of Defense, totaling more than $45 million. Cray will provide three next-generation supercomputing systems to the U.S. Air Force Research Laboratory in Ohio, the Arctic Region Supercomputing Center in Alaska, and the U.S. Army Engineer Research and Development Center in Mississippi. Cray (NASDAQ: CRAY) says its technology will be used to support research and development for new materials, fuels, and armor and weapons systems, as well as to assist in long-term weather predictions. The supercomputers are expected to be delivered to the U.S. defense centers in the second half of 2010.

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Seattle-based Principle Power, a company focused on offshore wind energy, announced today it has received a $750,000 grant from the U.S. Department of Energy to develop water power technologies. Principle Power is working with the National Renewable Energy Lab and Marine Innovation and Technology on the project, which seeks to incorporate wave energy generation into the company’s floating support structures for wind turbines.

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Seattle-based Cray, the supercomputing company, announced today it has signed a multi-year contract with the Korea Meteorological Administration worth more than $40 million. Cray (NASDAQ: CRAY) will deliver a next-generation supercomputer (capable of more than 600 trillion calculations per second), as well as service and support, to the Seoul-based weather forecasting and climate research organization. Delivery and acceptance of the supercomputer are expected in 2010.

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The big news of the week was Microsoft’s sale of Razorfish to Publicis (see directly below), but there were a few other important deals in software, biotech, and energy.

—Microsoft’s online advertising subsidiary, Seattle-based Razorfish, was bought by French marketing firm Publicis for approximately $530 million, as Bob reported. The payment is expected to include cash and Publicis Groupe treasury shares. In addition, Microsoft and Publicis have entered into a five-year strategic alliance whereby Publicis clients can purchase display and search advertising from Microsoft on favorable terms. Microsoft (NASDAQ: MSFT) originally acquired Razorfish in its 2007 purchase of aQuantive.

—Bellevue, WA-based Confirma, a medical imaging software firm, has been acquired by Merge Healthcare, a Milwaukee, WI-based health IT provider, for about $22 million, as Eric reported. Merge will incorporate Confirma’s MRI software into its IT offerings for doctors.

—Vancouver, BC-based Tekmira (TSX: TKM) formed a two-year partnership with Cambridge, MA-based Alnylam Pharmaceuticals to develop new particles to deliver RNA-interference drugs to diseased cells deep in the body, as Ryan reported. Financial terms of the deal weren’t given. Alnylam is funding the research effort and has exclusive rights to new discoveries, while Tekmira can use the discoveries for some of its own RNAi treatment programs.

—Seattle-based EnerG2 won $21.3 million in federal stimulus funding from the U.S. Department of Energy to build a new manufacturing plant in Albany, OR. The University of Washington energy-storage spinout is developing nano-scale materials to make better ultracapacitors for electric and hybrid vehicles and other applications.

—A few more terms of the Microsoft-Yahoo search deal, in which Yahoo will use Bing as its search engine and will control ad sales for five years, were spelled out in a filing with the SEC. Microsoft (NASDAQ: MSFT) will pay Yahoo $50 million a year for three years to cover transition and implementation costs. It will also hire 400 Yahoo employees, plus another 150 to assist with the transition. Yahoo (NASDAQ: YHOO) can opt out of the deal if it isn’t approved within a year, or if Microsoft and Yahoo’s combined share of the search market dips below an undisclosed percentage.

—Seattle-based Oncothyreon (NASDAQ: ONTY), a developer of cancer drugs, raised $15 million by securing commitments from investors to buy new shares and warrants, as Luke reported. Last week, the company said a small group of lung cancer patients showed long-lasting responses after taking Stimuvax, the immune-boosting vaccine therapy Oncothyreon is co-developing with Germany-based Merck KGaA.

—Seattle-based WatchGuard Technologies, a network security company, acquired Toronto-based BorderWare Technologies, an e-mail and Web security firm, as Eric reported. Financial terms were not given. WatchGuard plans to use BorderWare’s technology to make its security software more comprehensive and competitive.

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In the past week, companies have been releasing their financial results for the second quarter. There’s a mix of good and bad news from Seattle’s public tech companies weathering the economic storm, with surprisingly positive news from some quarters.

—Bellevue, WA-based metasearch developer InfoSpace announced its revenue was $43.8 million for the quarter, up 14 percent from the same period last year. InfoSpace (NASDAQ: INSP) now has $208.3 million in cash and securities. This was better than analysts had expected from InfoSpace, which has undergone some significant growth recently, including a new charity search website Xconomy previously wrote about.

—Good news was also reported by Seattle-based supercomputer manufacturer Cray (NASDAQ: CRAY), which turned a profit with $62.7 million in revenue last quarter, up 34 percent from the same period last year. Cray’s success has a lot to do with recent, lucrative contracts the company has landed. Xconomy recently profiled Cray here.

—Things were less positive for Seattle-based digital media company RealNetworks (NASDAQ: RNWK), which reported $135.7 million in second-quarter revenue, an 11 percent decrease from last year. For this quarter, RealNetworks had a net loss of $188.3 million. The company said it hopes to show some improvement for the second half of the year.

—Online diamond retailer Blue Nile (NASDAQ: NILE) also reported a slight decrease in revenue. The Seattle-based company posted net sales of $69.9 million, a decrease of 5.2 percent from the same period last year, although sales are continuing to increase slightly from year-to-year for the company.

—Slightly more cheerful news was posted by embedded device software developer Bsquare (NASDAQ: BSQR). The Bellevue, WA-based company earned $16.1 million in revenue, up 5 percent from the second quarter of 2008. The company announced last month it will start working with Coca-Cola to create the Coca-Cola Freestyle software-driven fountain dispenser.

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A new draft bill that would limit but not outlaw noncompete agreements in employment contracts in Massachusetts is being floated by two members of the state’s House of Representatives.

The bill combines elements of separate bills introduced earlier this year by Representatives William Brownsberger of the 24th Middlesex district and Lori Ehrlich of the 8th Essex district. Brownsberger told Xconomy this morning that the new bill is intended in part to head off objections among business leaders to his earlier bill, which would have outlawed noncompete agreements altogether.

Many employers in the state believe that noncompete agreements are needed to keep employees from leaving with company secrets and starting directly competitive businesses. Some venture capitalists and technology executives, on the other hand, argue that the agreements punish budding entrepreneurs and harm the local economy, by forcing employees either to stay with their current companies and forego starting new ventures, or to abandon Massachusetts for places like California, where noncompete agreements are unenforceable.

The compromise bill, which adopts much of the language in Ehrlich’s first bill, will likely be heard by the House Committee on Labor and Workforce Development this fall. Unlike Brownsberger’s original proposal, it allows companies to require workers to sign noncompete agreements as a condition of employment. But it creates incentives for employers to limit the terms of these agreements to 6 months, down from the 12 months in typical employment contracts today. It also cuts out restrictions that judges in contract dispute cases might see as overreaching—and it automatically awards attorneys’ fees to employees in such cases.

For employees who make less than $100,000 a year but more than $50,000, the bill limits the acceptable rationale for enforcing noncompete agreements to just two: protecting trade secrets or confidential information. And for employees who make under $50,000 a year, the bill makes noncompete agreements unenforceable for any reason.

At this point, Brownsberger’s earlier blanket proposal to outlaw noncompete agreements—a proposal endorsed by a coalition of venture capital partners, company executives, and industry associations—would seem to be dead in the water. But the new proposal would still bring significant changes to Massachusetts employment law, and probably has a much greater chance of surviving the coming legislative debate.

“We got a very positive response [to the earlier bill] from the VC community and from employees who had had bad experiences, but we got a very negative response, particularly from smaller businesses and many of the smaller high-tech companies,” Brownsberger says. “Companies are very emotional about this issue and feel very strongly that we were taking away from them protections that are vital to their survivability. So we listened carefully to those concerns and attempted to craft a bill that would improve the venture climate, provide employees with some real relief from overreaching noncompete agreements, yet at the same time allow businesses—particularly small businesses—to protect what they feel is vital to their survival.”

The Brownsberger-Ehrlich bill appeases employers by preserving most of the existing legal levers available to them when enforcing noncompete agreements in court. A noncompete agreement should be seen as valid, the bill says, whenever it’s needed to protect an employer’s trade secrets, confidential information such as product development plans and marketing strategies, or “goodwill,” meaning customer relationships.

But there are exceptions in the bill: the goodwill argument can’t be applied to employees making under $100,000, and employees making under $50,000 are exempted altogether. To keep employers from imposing draconian terms, the bill would award attorney’s fees to employees in any cases where a judge finds that the employer has overreached. And the bill explicitly scraps a legal argument sometimes used to keep ex-employees from going to work for competing companies, even in the absence of a signed noncompete agreement: the “inevitable disclosure doctrine,” under which courts presumed that any departing employee would betray trade secrets.

“What we’ve done in the final legislation is give employers very strong incentives to draft only the most reasonable noncompete agreements,” says Brownsberger, who represents a district including Belmont, north Cambridge, and east Arlington. What’s considered reasonable? The bill spells that out, too: “Number one, they can be no more than 6 months in duration,” Brownsberger says. “Number two, … Next Page »

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Five researchers from the University of Washington and Washington State University, Vancouver, working together with Washington companies, received a total of $376,454 in state funding through Washington Technology Center, according to an announcement today.  The university researchers are working with property data solutions company Data Data in Vancouver; biomaterials firm Healionics in Redmond; pressure instrumentation manufacturer Paine Electronics in East Wenatchee; nanostructure material builder Modumetal in Seattle; and medical simulator developer Simulab, also in Seattle.

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SpectraWatt, a Hillsboro, OR-based maker of photovoltaic cells, received a $500,000 contract from the National Renewable Energy Laboratory yesterday.  Part of the American Recovery and Reinvestment Act, the contract is for the company to develop ways of improving solar cells without changing current manufacturing processes.  SpectraWatt was one of 13 companies to receive money from NREL, the ultimate goal being to speed up the commercialization of solar energy technologies.

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Bingen, WA-based Insitu, a developer of unmanned aircraft systems, announced today it has received a one-year, $30 million contract from the Canadian government to provide technologies to support Canadian forces’ operations in Afghanistan. The contract, which includes two additional one-year options, specifically calls for small unmanned aerial vehicles for intelligence, surveillance, and reconnaissance. Insitu was acquired by Boeing (NYSE: BA) for about $400 million last summer.

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The United States Navy announced today that it has awarded a $146 million contract to Cambridge, MA-based Charles Stark Draper Laboratory for work on guidance systems to extend the life of the Trident II, a submarine-launched nuclear missile developed by Lockheed Martin in the 1980s. About 12 percent of the work will occur at Draper’s Cambridge facility, 10 percent in Pittsfield, MA, and the remainder in Florida and Minnesota. The Navy said it didn’t solicit competing bids for the contract.

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Lionbridge Technologies (NASDAQ: LIOX), the Waltham, MA-based translation services company whose financial performance we questioned in a profile last May, announced yesterday that it has obtained several new multi-year contracts that should shore up revenues by $25 to $30 million a year. The company said it had won contracts with a provider of power services and systems, a maker of manufacturing process optimization software, a broadband communications company, and an online employement provider, among other companies. Lionbridge did not name the new clients.

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The recent downturn in the economy is having—and will continue to have—a significant impact on the ability of many companies to raise money and fund continued growth. This in turn will have significant ramifications on exit strategy. Luckily, for some at least, there are still potential buyers out there with sufficient cash to fund acquisitions. The Wall Street Journal, for example, reported that Oracle CEO Larry Ellison said at the company’s October shareholder meeting, “Acquisitions that we have been looking at for some time may now be more attractive.” As the current economic conditions are likely to move M&A towards a buyer’s market, potential targets should be asking themselves what they can do to make themselves more attractive and to make it easier for a buyer to close the deal.

Let’s face it—many smaller companies don’t spend a lot of time or resources getting their houses in order. They are focusing their primary efforts on R&D and marketing and sales, as they should. But if at some point a potential buyer is interested enough in your business to take a look at you, it would be in your best interest to be prepared as an organization. This includes the formalities related to the business’s legal existence and its relationships with other parties such as customers, vendors and employees.

At the top of the list are corporate organization documents (e.g., charter, bylaws and stock records), corporate administrative records (e.g., shareholder and board minutes and resolutions), contracts (of both the vendor and customer varieties), and employee and contractor agreements. A company has to ask itself: If a buyer knocked on the door tomorrow and wanted to start due diligence, could I find all of these documents? Are they up to date? Has everything been properly signed and dated?

The inability to produce these materials for due diligence could cause a buyer to worry about the state of the business. A lack of shareholder and board minutes books can call into question whether the company’s actions have been conducted with all necessary approvals. A buyer needs to be able to rely on the fact that all prior actions taken by the company or its officers were properly authorized. Without this knowledge, the buyer faces a risk that some prior actions could be challenged. For example, the buyer wants to be assured that critical material contracts have been properly handled.

Improperly maintained stock records prevent proper determination of the various ownership stakes in the company. A buyer needs to know exactly who owns what, which will ordinarily determine how the money is divvied up when the deal closes. Without this information, the buyer doesn’t really know what it is buying and runs a significant risk of becoming embroiled in an ownership dispute involving founders, investors and other stockholders.

Failure to organize properly signed contracts can have numerous ramifications. Do you have all necessary rights to the intellectual property used in your business? Do you own it? A careful review of your contracts with vendors and licensors will be necessary to make this determination.

The buyer will also want to verify that your employees and consultants have signed agreements confirming that the company owns (in the case of employees) or at minimum has sufficient license rights (in the case of contractors and licensors) to all intellectual property used in the business. If it takes a few weeks to find these documents and get them to the buyer’s due diligence team, the team may rightfully wonder whether you have a handle on things.

Demonstrating to a buyer that your company has adequate contracting practices for customer deals is equally important. Your (and eventually the buyer’s) ability to recognize revenue – and the timing of revenue recognition—will be highly dependent on the existence of properly signed and dated contracts. A serious buyer will very likely want … Next Page »

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It might have won a gold medal for longest-running contract dispute. Finally, though, it’s over—or so it seems. San Diego defense contractor SAIC said yesterday the Greek government has formally accepted the sophisticated “command and control” security network the company installed for the 2004 Summer Olympic Games. The company also known as Science Applications International Corp. said the price tag for its marathon installation is approximately $322 million.

Troubles with the contract prompted the secretive research and engineering conglomerate to postpone its IPO from December 2005 until October 2006. Negotiations to resolve the dispute dragged on for years, and even yesterday’s announcement was puzzling.

The Greek government, which refused to pay for the project until SAIC fixed technical problems, publicly announced it was satisfied with the work in March 2007. Perhaps that was just a negotiating tactic. SAIC declined comment at that time, saying it had not seen documents. The company remained silent about the issue until yesterday.

In its announcement yesterday, SAIC said the Command, Control, Communications, Coordination and Integration system was designed to address the public safety and security needs of the Greek police, fire brigades, coast guard and ambulance service.

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