Exhibit 10.1
AUTOMATED METER READING SERVICES AGREEMENT
This Automated Meter Reading Services Agreement ("Agreement") is
entered into this 11th day of March, 2005, and is by and between Cellnet
Technology, Inc., a Delaware corporation ("Cellnet"), and Laclede Gas
Company, a Missouri corporation ("Laclede"). All capitalized terms not
otherwise defined herein have the respective meaning set forth in Appendix A
hereto.
RECITALS
WHEREAS, Laclede desires to introduce new automated gas meter
reading, data acquisition and data management services to its service area
that efficiently provide accurate information for billing, distribution,
operations, customer care and customer marketing purposes;
WHEREAS, Laclede has selected a radio frequency fixed network
application as the system that can best provide basic services while
permitting maximum flexibility of information for expansion into other
functional uses;
WHEREAS, Laclede desires Cellnet to establish, where it has not
already been established, and maintain a Fixed Network consisting of MIUs
installed on Laclede Gas Meters, MCC sites on towers and/or other
appropriate structures, the network operations center ("NOC"), the
communication link between the MCCs and the NOC, all other equipment
necessary for Cellnet to provide automated gas meter reading, data
acquisition and data management services to Laclede and the operation, care
and maintenance of all installed equipment;
WHEREAS, Laclede desires for Cellnet to provide all of the
equipment and labor and take all of the actions necessary to perform
automated reads of Laclede Gas Meters within St. Louis City, St. Louis
County and St. Charles County and selected portions of other counties in
Laclede's service area as set forth on Exhibit 1 (collectively, "Fixed
Network Area") and to make available such readings to Laclede (i.e., Laclede
desires to acquire from Cellnet turnkey meter readings) and for Cellnet to
provide data acquisition and management services; and
WHEREAS, Cellnet has the expertise, experience and skill to provide
such turnkey automated meter reading, data acquisition and data management
services and desires to provide the same to Laclede on the terms and
conditions set forth herein.
NOW, THEREFORE, the Parties agree as follows:
ARTICLE 1
INITIAL FIXED NETWORK DEPLOYMENT PHASE
1.1 Overview. Immediately upon the execution of this Agreement, the
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Parties shall commence to integrate their respective systems in
accordance with this Article (the "Initial Fixed Network Deployment
Phase") and shall test their respective systems' ability to access,
exchange and deliver MIU installation data and Laclede Gas Data.
The Initial Fixed Network Deployment Phase will be conducted in
accordance with the
project timeline attached to this Agreement as Exhibit 2. The
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Parties shall complete the Initial Fixed Network Deployment Phase
within six (6) months of the Effective Date; provided, however,
that without limiting a Party's other remedies hereunder, if a
Party suffers a delay in meeting any of its objectives on the
project timeline, the deadlines thereon for the other Party shall
be moved back by an equivalent number of days. To the extent that
any of the obligations or rights of either Party set forth in
Article 1 do not specifically pertain to only the Initial Fixed
Network Deployment Phase but are necessary for the performance of
the rest of this Agreement, then such obligations and rights shall
continue throughout the Term.
1.2 Laclede's Responsibilities.
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(a) Sample Meter Population. Laclede has previously provided
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to Cellnet an initial data file that details all Laclede
Gas Data, including addresses, Laclede's projected monthly
meter reading schedule and all other pertinent Laclede
customer information for approximately 500 meters ("Test
Meters") on which Cellnet has installed MIUs.
(b) Interface Implementation. Attached hereto as Exhibit 3 are
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Cellnet's specifications for its standard interface (the
"Standard Interface Specifications"). Laclede shall, in
accordance with the time period set forth in Exhibit 2,
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develop, at its own expense, a complete, integration
tested and fully operational interface for the Laclede
systems impacted by this Agreement (the "Laclede
Interface"). The Laclede Interface must have the capacity
to (i) collect the MIU installation database and the
Laclede Gas Data from Cellnet, (ii) transmit the post MIU
installation and any ongoing Laclede database maintenance
files to Cellnet, and (iii) collect the Fixed Network Data
posted by Cellnet on the FTP Server.
(c) Internal Computer Hardware and Software. Laclede is
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responsible for, and shall establish and maintain at
Laclede's expense, all of its internal computer software,
hardware, systems, and any and all telecommunication
connections and charges (including hardware fees, set-up,
and on-going fees) required to collect the Fixed Network
Data from the FTP Server and then store, query and
manipulate such data.
(d) Additional Services. In addition to the services described
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in Section 1.3(b) below, which shall be provided at
Cellnet's expense, Laclede may request, and Cellnet, in
its discretion, may provide, services to assist Laclede
with system integration and other programming issues from
time to time during the Term. Such services shall be
provided to Laclede at rates to be agreed upon by the
Parties.
1.3 Cellnet's Obligations.
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(a) Fixed Network and Data Management Network. During the
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Initial Fixed Network Deployment Phase, Cellnet will
conduct a propagation study of the portion of Laclede's
service area to be covered by the Fixed Network Area.
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Based on the results of the study, Cellnet will provide,
install and maintain all equipment, supplies and services
necessary to establish and operate the Fixed Network that
collects automated daily meter reads and provides meter
readings in accordance with this Agreement. Cellnet shall
provide, and install new, or enable existing, Fixed
Network infrastructure required to support the Fixed
Network Area, including, without limitation, software,
hardware and peripherals for the NOC. Additionally,
Cellnet shall establish Laclede as a customer in Cellnet's
data management network.
(b) Interface Implementation Support. During the Initial Fixed
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Network Deployment Phase, Cellnet, at no additional charge
to Laclede, shall consult with and advise Laclede in its
development and testing of the Laclede Interface. Cellnet
shall have no obligation to write software code in
connection with such consulting and advice; provided,
however, that additional services shall be provided in
accordance with Section 1.2(d) above.
(c) Provision of MIUs and Installation Resources. Cellnet
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shall provide the resources necessary for installation of
the MIUs, including the required MIUs and the employees or
subcontractors necessary to install the MIUs (each a "MIU
Installer"), as well as a competent project manager for
the Initial Fixed Network Deployment Phase. All of the MIU
Installers shall be qualified and trained as described in
Section 2.1(d)(ii).
(d) Configure the NOC. Cellnet shall establish and configure
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the necessary hardware, NOC Software and Meter Database to
provide the AMR Services.
(e) Automated Meter Readings. Upon completion of the
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installation of the MIUs on the Laclede Gas Meters and
Laclede's performance of its responsibilities under
Section 1.2, Cellnet shall perform and transmit to Laclede
daily automated meter reads in hundreds of cubic feet in
accordance with Article 2.
(f) Handheld Devices. During the Initial Fixed Network
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Deployment Phase, Cellnet shall provide Laclede two (2)
handheld units for reading and programming MIUs and train
Laclede personnel on the proper use of these units.
(g) Plant Tour. During the Initial Fixed Network Deployment
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Phase, at Laclede's request, Cellnet shall schedule a trip
for Laclede to visit Cellnet's manufacturing facilities,
Cellnet's corporate headquarters and/or Cellnet's NOC
facilities, at Laclede's expense. Within fifteen (15) days
after completion of any of the above trips, Laclede may
notify Cellnet in writing that Laclede has concerns
regarding any of the following characteristics of any of
such Cellnet facilities:
(i) Work environment;
(ii) Safety;
(iii) Degree and sophistication of automation; and
(iv) Quality control.
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Cellnet shall investigate any such concerns, and (1)
explain why the issue is not reasonably likely, in
Cellnet's reasonable discretion, to have a material
adverse impact on the AMR Services, or (2) provide a
reasonable plan and timeline to address these concerns or
issues in a manner reasonably acceptable to Parties.
1.4 Initial Fixed Network Deployment Phase Testing.
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(a) Comparison of Reads. During the Initial Fixed Network
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Deployment Phase, Laclede will obtain and compare the
manual reads from the Test Meters to the automated meter
reads provided by Cellnet pursuant to Section 1.3(e)
above. Any deviations between the manual and automated
readings will be investigated by both Parties in good
faith and resolved within two (2) Business Days.
(b) Substitute Meters. Any residence with access issues, meter
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problems or other circumstances that interfere with the
Initial Fixed Network Deployment Phase will be dealt with
on a case-by-case basis. An alternate address within the
coverage area described in Section 1.2(a) may be
substituted for the remainder of the Initial Fixed Network
Deployment Phase, or, in the alternative, the MIU will be
subtracted from the sample population, at Laclede's
discretion.
(c) Network Coverage. Cellnet will be responsible for Fixed
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Network infrastructure coverage issues and will use
commercially reasonable efforts to resolve any Fixed
Network infrastructure coverage issues promptly, as
necessary, to perform the AMR Services.
1.5 Initial Fixed Network Deployment Phase Performance Standards.
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(a) Summary of Readings. During the Initial Fixed Network
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Deployment Phase, Cellnet shall provide Laclede: (i) daily
automated meter reads in hundreds of cubic feet; and (ii)
a monthly summary of MIU performance, by address. The
individual meter readings will be maintained by Cellnet
daily and delivered to Laclede on the next Business Day.
Daily and monthly overall performance indicators should be
included in the summary.
(b) Areas of Emphasis. Close scrutiny will be given to
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Cellnet's performance in the following areas:
(i) Project Management;
(ii) Integration Support Services
(iii) Data Acquisition and Delivery;
(iv) Operations and Maintenance;
(v) Customer Service;
(vi) Technology; and
(vii) Data Center Operations.
At any time during the Initial Fixed Network Deployment Phase,
Laclede may notify Cellnet in writing that Laclede has concerns
regarding any of the foregoing areas, and
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Cellnet shall investigate any such concerns, and (1)
explain why the concerns are not reasonably likely, in
Cellnet's reasonable discretion, to have a material
adverse impact on the AMR Services, or (2) provide a
reasonable plan and timeline to address these concerns in
a manner reasonably acceptable to the Parties.
(c) MIU Validation. During the Initial Fixed Network
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Deployment Phase, the Test Meters will be automatically
read every day to determine accuracy, network
deliverability, and ability to transfer data between the
Parties' systems based on the Standard Interface
Specifications. During the Initial Fixed Network
Deployment Phase, the Parties will work together to
validate and correct promptly any errors in the following
areas:
(i) Fixed Network reading does not correlate with
visual index reading. This deviation will take
into account rounding errors and time
differences. Cellnet must correct programming
errors on a MIU.
(ii) Fixed Network reading was not available through
the network during the scheduled reading period.
This failure takes into account MIUs that fail to
communicate to the Fixed Network due to device
problems.
(iii) MIU is found to be in an alarm state and the
appropriate flag was not returned.
(iv) MIU is found to be sending inconsistent readings
when other MIUs in the area are responding
correctly.
(v) The meter installation data and the Laclede Gas
Data transferred between Laclede and Cellnet
shall be validated and consistent with the
Standard Interface Specifications for use within
the respective Parties' systems. In the event
that the data is not in the correct format, the
non-complying Party shall make the correction at
its own expense.
ARTICLE 2
OBLIGATIONS OF THE PARTIES
2.1 Establishment and Installation of the AMR Services. The AMR
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Services to be provided to Laclede by Cellnet shall include data
acquisition, data management, data presentation and access,
implementation, implementation expertise, provision and
installation of MIUs and operation of the Fixed Network and the
NOC. Cellnet shall read Activated Meters in the Fixed Network Area
during the Term of this Agreement in accordance with this Article
2.
(a) Establishment of the Fixed Network. Cellnet shall
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establish a Fixed Network that will:
(i) collect automated meter readings from Activated
Meters within the Fixed Network Area; and
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(ii) make available to Laclede, via the Cellnet
Standard Interface, meter readings.
(b) Components of AMR Services System. The Fixed Network shall
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include the following components, together with any and
all other components and equipment necessary for Cellnet
to perform its obligations under this Agreement:
(i) MIUs installed on each Accessible Meter within
the Fixed Network Area;
(ii) MCCs to be installed on structures, poles and/or
towers;
(iii) The NOC to collect Fixed Network Data;
(iv) The disaster recovery NOC, which is described in
Section 2.2(g), shall be located in a separate
facility from the NOC as specified in Section
2.2(g); and
(v) The software to manage the Fixed Network Data.
(c) Installation of the AMR Services System and Components.
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(i) AMR Services System. During the Deployment
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Period, Cellnet shall install, and/or contract
with subcontractors for the installation of, the
Fixed Network and the various components thereof.
Cellnet shall, or cause its subcontractors to,
deploy an adequate number of field supervisors at
all times to ensure that installers have ready
access to supervisors as and when needed to
address issues and receive information in a
timely manner. The Cellnet program manager and
the Laclede AMR program manager will establish
introduction meetings and regularly scheduled
project review meetings. A pre-installation
meeting will be held among Cellnet, the MIU
Installer, and Laclede for the purpose of
reviewing all matters of mutual concern to ensure
that the installation plan will be met.
(ii) MIUs. Cellnet and Laclede will develop and agree
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upon the various Routes and schedules for
installation of the MIUs on existing Laclede Gas
Meters at residences and businesses within the
Fixed Network Area. Installers shall work during
normal working hours of 8:00 a.m. to 5:30 p.m.
Monday through Saturday, which hours shall be
adjusted to accommodate extended daylight hours.
Additionally, it shall be acceptable for
installers to install MIUs outside these hours
pursuant to previously made appointments with
customers. Cellnet shall not be required to
install a MIU on a meter unless the meter can be
retrofitted to accept the MIU. The Parties agree
that all of the meters listed on Exhibit 5-A can
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be retrofitted to accept a MIU; provided that
access to the meter is not obstructed or the
physical condition of the meter is such that it
does not prevent such retrofitting without
requiring major repair. The
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Parties shall cooperate in good faith to
determine whether the meters listed on Exhibit
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5-B can be retrofitted to accept a MIU. Cellnet
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will manage all installation functions necessary
to establish and maintain a fully functional
Fixed Network, which shall include, without
limitation, installing the MIUs and successful
transmission of automated meter readings or
alarms to the NOC indicating that the MIU has
been successfully installed on a Laclede Gas
Meter. Cellnet shall transfer such data regularly
to Laclede. During the Deployment Period, Laclede
shall provide to Cellnet Laclede's projected
monthly meter reading schedule at least ninety
(90) days in advance of each respective Billing
Window. The following steps and procedures will
be followed for installation of the MIUs:
(A) Cellnet Appointments. Prior to
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installation of MIUs on a Route, Laclede
will promptly notify the customers on
the Route (by flyers, radio or TV
announcements or other reasonable means)
of the planned installation of MIUs on
meters servicing their residence or
business. Cellnet or the MIU Installer
shall contact the occupants of each
affected property to make the necessary
appointments and arrangements to install
the MIUs. For meters that require entry
into the property, the MIU Installer
shall attempt to contact the occupant of
the property by telephone, letter or
door hanger and in person, on six (6)
separate occasions (at least two (2) of
which occasions must be personal visits
to the property) and shall offer the
occupant a choice of reasonable
appointment times (i.e., specific
appointment times or small time
windows). The MIU Installer shall time
its various attempts to contact an
occupant via telephone, letter and in
person so as to have the greatest
probability of successfully contacting
the occupant and installing the MIU. For
purposes of clarity, an unanswered
telephone call constitutes an attempt.
(B) Laclede Appointments. If the MIU
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Installer is unable to gain the
necessary access to a meter after the
six (6) occasions specified in Section
2.1(c)(ii)(A), Cellnet will so advise
Laclede in writing as soon as reasonably
practicable. After receiving such
written advisement, Laclede will attempt
to contact the occupant and/or owner of
the property and work with Cellnet to
arrange an appointment for Cellnet to
install a MIU. If the occupant and/or
owner miss a scheduled appointment or
the meter is not an Accessible Meter for
any other reason, Laclede will attempt
to once again make contact with the
occupant and/or owner and work with
Cellnet to reschedule the appointment.
If the MIU Installer is not able to
install a MIU on the second or
subsequent appointment made by Laclede,
then Laclede shall reimburse Cellnet for
its actual direct expenses without
mark-up for the visit, not to exceed
Twenty-Five Dollars ($25.00).
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(iii) Additional MIUs.
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(A) Cellnet shall from time to time during the
Term, at no additional cost to Laclede
(including, but not limited to, shipping fees and
the manufacturers' cost to handle and install a
MIU on a meter, which costs will be paid by
Cellnet; provided, however, that all such
shipping costs and manufacturers' costs shall be
actual direct costs without mark-up by Laclede),
make MIUs available to the manufacturers
supplying meters to Laclede at a time and in a
volume and manner that will allow the
manufacturers to install the MIUs on the meters
during assembly at the manufacturers' facilities.
Laclede shall provide Cellnet at least 120 days'
prior written notice with regard to what number
of, to what manufacturers and when MIUs are to be
provided. Cellnet shall throughout the Term
provide to the respective manufacturers MIUs for
the types of meters listed on Exhibit 5-C.
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Additionally, Laclede and Cellnet will cooperate
with regard to the coordination of meter model
changes in an effort to ensure availability of
MIUs for various meter models.
(B) During the Deployment Period, Cellnet shall,
at no additional charge to Laclede, make MIUs
available to Laclede's meter manufacturers in the
manner described above in this Section for
installation on new meters that Laclede will use
to replace certain of the meters within its
system that cannot be retrofitted with a MIU.
(C) In addition to the foregoing MIUs, Cellnet
shall from time to time, upon the request of
Laclede, make available to Laclede MIUs for
installation by Laclede on meters that Laclede
has removed from customers' premises and is
reconditioning in preparation for re-installation
at customers' premises. The MIUs described in
Subsection (B) above and this Subsection (C) are
included in the approximately 650,000 MIUs to be
provided by Cellnet during the Deployment Period.
(D) Notwithstanding the foregoing, Cellnet is not
required to provide a MIU to a manufacturer or to
Laclede directly unless Cellnet has an integrated
MIU available for the meter on which the MIU is
to be installed. At no additional cost to
Laclede, Cellnet and Laclede shall work together
in good faith to develop a MIU for the National
meters of the types listed on Exhibit 5-B in
Laclede's meter population that Cellnet cannot
currently retrofit with a MIU.
(E) Cellnet shall provide additional MIUs and
reading services to replace units retired and to
serve additional customers subject to the terms
and provisions of Exhibit 6, which is attached
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hereto and incorporated herein by reference.
(iv) Existing Remote Device Removal. Many of Laclede's
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existing meters currently have a remote-type
device installed. Prior to any such device
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removal, Laclede shall provide any necessary
training to Cellnet regarding device removal,
including, without limitation, training regarding
handling of wires and cables. After device
removal, any attached wires and/or cables shall
not be removed, but trimmed back to be
unobtrusive. Any existing component on the
exterior of the premise shall be left in place.
One particular device, the American Meter TRACE
unit, is both salvageable and redeployable. The
MIU Installer will take reasonable care to return
each TRACE device to Laclede in the same state it
was in immediately prior to its removal. At
Laclede's expense, Laclede will provide the
proper containers and their transportation to and
from the MIU Installer for packaging the returned
devices. Any hazardous material component of the
meter or module removed from the field by Cellnet
or the MIU Installer during the installation of
MIUs shall be deposited in a container provided
by Laclede located at such MIU Installer's dock
for proper disposal by Laclede.
(v) MCCs. Cellnet shall install any additional MCCs
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in the Fixed Network Area and any communications
links necessary to obtain automated meter
readings from Activated Meters.
(d) Subcontracting, Training and Safety.
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(i) Subcontractor's Hiring Processes. Cellnet intends
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to contract with MIU Installers to install the
MIUs. Only qualified personnel, who have received
proper training as described below, shall perform
the MIU installations/replacements. Cellnet shall
develop a Quality Assurance Plan that is
reasonably acceptable to Laclede and shall
perform, or require subcontractors to perform,
all MIU installation activities in accordance
with such plan. The Quality Assurance Plan shall
be provided by Cellnet to Laclede within thirty
(30) calendar days after the Effective Date and
shall include an audit feature that will track
the performance of individual installers. Laclede
shall have the right to approve the MIU
Installer, which approval shall not be
unreasonably withheld or delayed. Additionally,
subject to applicable law, Laclede shall have the
right to disqualify individuals employed or used
by an MIU Installer based on observations by
Laclede and/or reported customer complaints,
interaction with customers or the public in
general and/or security or safety violations. If
Laclede wishes to disqualify an individual
employed or used by such MIU Installer, it shall
notify Cellnet and provide reasonable details
regarding the grounds for such request. Cellnet
shall investigate the request and notify Laclede
of its determination promptly, but in all events
within five (5) Business Days, during which such
individual shall not work on the project.
(ii) Training. Prior to installation of any MIUs,
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Cellnet shall submit to Laclede for approval a
training and certification program for all
individuals, including Laclede employees,
installing, repairing,
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maintaining or otherwise working with the MIUs.
The training program shall consist of both
classroom and field training on the procedures
and documentation for the MIU installation.
During the Term, Cellnet shall train, or cause
the MIU Installer to be trained in all of the
technical and procedural aspects of the
installation of the MIUs, including the
professional and courteous manner in which they
shall conduct themselves with regard to Laclede's
customers. Only individuals (including Laclede
employees) who successfully complete the training
program shall install, replace, repair, maintain
or otherwise work with the MIUs. An audit program
shall be implemented by Cellnet to evaluate
fieldwork performed. At a minimum, the training
program must address:
(A) Meter safety and personal protective
equipment issued to field personnel;
(B) Proper procedures for dealing with
Laclede's customers in the field;
(C) Meter configurations present in the
service territory;
(D) Meter reading;
(E) Use of handheld work order routing devices;
(F) Data to be recorded from each installation;
(G) How to handle dog encounters and attacks;
(H) Emergency procedures (gas leaks,
medical, etc.); and
(I) Recognizing and reporting obvious "theft
of service" cases.
(iii) Safety. Cellnet shall submit a Project Health &
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Safety Plan to Laclede for review and comment to
help ensure compliance with all federal and state
Occupational Safety and Health Administration
(OSHA) requirements. Cellnet shall conduct and/or
arrange for the safety training of all MIU
Installer's personnel and other subcontractors
(if any) utilized by Cellnet under this
Agreement. The safety-training courses conducted
by Cellnet or any of its subcontractors' safety
professionals shall also be made available to
Laclede personnel at Cellnet's or Laclede's
premises in the Fixed Network Area. All required
safety equipment and personal protective
equipment (PPE) shall be provided by Cellnet or
its subcontractors and maintained in proper
working order by the party providing the same.
Cellnet shall ensure that all of its employees
and subcontractors installing, repairing,
maintaining or otherwise working with the Fixed
Network, including the MIUs, receive the six (6)
hour National Safety Council's Defensive Driving
Course (DDC6) or equivalent. Cellnet shall ensure
that each of its employees and subcontractors is
subject to drug and alcohol testing pursuant to
Department of Transportation (DOT) Title 49 CFR
Part 40 - Procedures for Transportation Workplace
Drug and Alcohol Testing Programs.
(e) Uniforms and Logos. All individuals actually installing
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MIUs on behalf of the MIU Installer shall wear official
company uniforms of the MIU Installer and display
identification badges that identify the individual as an
employee of the
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MIU Installer. Additionally, the vehicles used by
such individuals shall display the MIU
Installer's name and logo. If Laclede elects to
have its name or logo displayed on the MIUs
Installer's uniforms, identification badges
and/or vehicles, and Cellnet consents to such
proposal, such consent not to be unreasonably
withheld or delayed, Laclede and Cellnet shall,
at Laclede's sole cost and expense, work together
to coordinate the same. In all events, the MIU
Installer's uniforms, identification badges and
vehicles shall not display Laclede's name or logo
without Laclede's written consent.
(f) Programming Software. Within thirty (30) days after the
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Effective Date, Cellnet shall provide to Laclede, at no
additional charge, Programming Software for reading and
programming MIUs and train Laclede personnel on the proper
use of this software. Cellnet shall install and configure
the Programming Software for use by Laclede's operations
personnel and use commercially reasonable effort to
accommodate Laclede-specific configurations.
(g) Timeframe for Installation and Implementation.
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(i) Meter Activation. Upon (1) the installation
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of MIUs on 90% of the Accessible Meters on a
Route, (2) for which Cellnet is receiving
designation and installation information via the
Cellnet Standard Interface, and (3) Cellnet is
utilizing the Fixed Network to gather and provide
successful readings to Laclede, Cellnet will
activate the Fixed Network with regard to this
Route and commence electronically reading the
meters on the Route. Cellnet will continue to
attempt diligently to install MIUs on any Laclede
Gas Meters on a Route which are not equipped with
a MIU as of the date Cellnet activates the Route.
Cellnet shall notify Laclede in advance of the
date that the electronic reads will commence for
a Route, and Laclede may, at its option, continue
to read manually all meters that it then
currently reads manually for one (1) full billing
cycle after such date in order to verify the
readings. For those meters that Laclede is not
then currently obtaining manual reads (i.e.,
meters equipped with a TRACE device), Laclede
shall use reasonable effort to obtain a manual
reading of such meters for one (1) full billing
cycle. If Laclede discovers any discrepancy
between the manual reading and the reading
rendered by the MIU, Laclede shall notify
Cellnet, and Cellnet shall promptly repair,
replace or reprogram the MIU if found to be
defective upon investigation, and thereafter
Cellnet shall manually read the meter or take
whatever actions are necessary to verify that the
MIU is functioning properly. Laclede's obligation
to pay the monthly fee per meter described in
Section 2.3(a) shall commence on the date the
electronic reads commence on a Route as described
in the first sentence of this section.
Cellnet shall provide manual monthly billing
reads pursuant to Laclede's projected monthly
meter reading schedule on Accessible Meters on an
activated Route that are not equipped with a
properly functioning MIU commencing the fortieth
(40th) day following the date such Route is
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activated. Cellnet shall not be required to
provide manual readings for any meters on which
Laclede instructed Cellnet not to install a MIU.
(ii) Entire System. MIUs shall be installed and
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operational on 99% of Accessible Meters within
the Fixed Network Area within twenty-four (24)
months after the Effective Date ("Deployment
Deadline"). If Cellnet fails to perform its
obligations under this Agreement relating to
installation of the MIUs, and as a result the 99%
threshold is not reached by the Deployment
Deadline, then until such time as MIUs are
installed and operational on 99% of Accessible
Meters less Unavailable Meters within the Fixed
Network Area (or this Agreement is terminated, if
earlier), Cellnet shall provide monthly manual
billing readings pursuant to Laclede's projected
monthly meter reading schedule to Laclede on
Accessible Meters that are not equipped with a
MIU. Notwithstanding the foregoing, if, due
solely to the failure of Cellnet to perform its
obligations under this Agreement, MIUs are not
installed and operational on 99% of Accessible
Meters within the Fixed Network Area within six
(6) months after the Deployment Deadline, Cellnet
shall be in default under this Agreement, and
Laclede may avail itself of the remedies provided
in this Agreement for default by Cellnet.
(h) Mandatory Provisions in Cellnet's Leases and/or Financing
---------------------------------------------------------
Documents. Cellnet shall use its commercially reasonable
---------
efforts to cause the senior lenders to Cellnet who are
directly financing the build out of the Fixed Network, to
include in the financing agreements therefor provisions
providing that upon the occurrence, and during the
continuation, of any default of Cellnet under such
financing agreements, if the lenders under that financing
agreement determine in their sole discretion that such
action will not impair the Lender Group's ability to
enforce the obligations of Cellnet under such financing
agreements or realize upon the security collateral of the
lenders under such financing agreements, such lenders
shall engage in good faith negotiations with Laclede to
permit Cellnet or a third party selected by the Lender
Group to continue to perform Cellnet's obligations under
this Agreement; provided, however, that the foregoing
-------- -------
shall in no way prohibit such lenders from pursuing any of
their rights or remedies under such financing agreements.
(i) St. Louis Office. During the Term, Cellnet shall maintain
----------------
an office in the St. Louis metropolitan area staffed with
a sufficient number of employees or contract employees to
fulfill its obligations under this Agreement and a manager
who is responsible for servicing Laclede under this
Agreement.
2.2 Services to be Provided by Cellnet.
----------------------------------
(a) Daily Meter Reads. Cellnet shall provide to Laclede daily
-----------------
automated meter reads in hundreds of cubic feet on
Activated Meters.
12
The information below marked by * and [] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed
with the Commission.
(b) Reliability of Daily Consumption Readings. Cellnet shall
-----------------------------------------
provide daily automated meter reads in hundreds of cubic
feet for at least [**]% of the Activated Meters on
an averaged basis over the total number of calendar days
of each month and a minimum of [**]% of the
Activated Meters for each and every calendar day during
any Contract Year during the Term of this Agreement. This
reliability rate implies that the required percentage of
the meters are read electronically through the Fixed
Network.
(c) Reliability of Scheduled Consumption Readings for Monthly
---------------------------------------------------------
Billing. Cellnet shall provide to Laclede monthly meter
-------
reads in hundreds of cubic feet on each Activated Meter.
These monthly meter readings shall be made available
during each Fixed Network Meter's respective monthly
Billing Window as established according to Laclede's
projected monthly meter reading schedule (as such schedule
may be adjusted by Laclede from time to time) at a
reliability rate of [**]% of the Activated Meters
for each month and a minimum of [**]% of the
Activated Meters for each respective billing day within
the month. If Cellnet is not able to achieve [**]%
of such monthly reads electronically, Cellnet shall
achieve the required percentage by providing Laclede
manual reads of Activated Meters within the Fixed Network
Area; provided that Cellnet shall provide to Laclede each
month an electronic list of the meters for which Cellnet
was not able to obtain an electronic read through the
Fixed Network. Cellnet shall promptly research and, if
practicable, correct any MIU that the Fixed Network is not
able to read electronically. In the event Laclede changes
or adjusts its billing cycle schedule during the Term,
Cellnet shall make all changes necessary to accommodate
such changes or adjustments within thirty (30) days after
receiving written notice of such change or adjustment from
Laclede; provided that if such changes or adjustments to a
billing cycle occur during the Deployment Period, Laclede
shall provide Cellnet 120 days prior written notice of
such change or adjustment.
(d) Reliability Penalty.
-------------------
(i) If Cellnet is not able to achieve the respective
required average monthly reliability percentages
for daily reads set forth in Section 2.2(b) above
for any month during the Term, then Cellnet shall
owe to Laclede a penalty (the "Daily Reliability
Penalty") equal to [***************] Dollars
($[******]) for each [********] percent
([***]%) or portion thereof that Cellnet is
below the applicable threshold. Furthermore, if
Cellnet is not able to achieve the required daily
minimum percentages set forth in Section 2.2(b)
above on any day during the Term, then Cellnet
shall owe to Laclede a penalty ("Minimum Daily
Reliability Penalty") equal to [************]
Dollars ($[*****]) for each [********] percent
([***]%) or portion thereof that Cellnet is
below the applicable minimum. For purposes of
calculating the Daily Reliability Penalty and the
Minimum Daily Reliability Penalty, only Activated
Meters on Routes that have been activated as
described in Section 2.1(g)(i) above for ninety
(90) days or more shall be considered. Anything
herein to the contrary notwithstanding, except
for any rights that
13
The information below marked by * and [] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed
with the Commission.
may exist pursuant to Article 11 hereof,
Laclede's sole remedy for Cellnet's failure to
meet or exceed the foregoing performance metrics
is set forth in this Section 2.2(d)(i).
(ii) The daily reliability performance percentages
shall be equal to the sum of each day's number of
successful automated daily meter readings which
Cellnet makes available to Laclede during the
calendar month, divided by the sum of each day's
number of daily Activated Meters. This
reliability rate implies that the required
percentage of the meters are read electronically
through the Fixed Network.
(iii) Commencing the first calendar month ninety (90)
days after the Deployment Deadline, if Cellnet
fails to provide to Laclede monthly meter reads
in accordance with the reliability percentages
described in Section 2.2(c) above, during any
month, then Cellnet shall owe to Laclede a
penalty (the "Monthly Reliability Penalty") equal
to [****************] Dollars ($[******]) for each
[********] percent ([***]%), or portion
thereof, by which Cellnet is below such
[**]% threshold. For example, if Cellnet is
able to provide reads for only [**]% of the
Activated Meters during a month, then the Monthly
Reliability Penalty shall equal [***************]
Dollars ($[******]). Additionally, Cellnet
shall owe to Laclede a penalty ("Minimum Monthly
Reliability Penalty") of [************] Dollars
($[*****]) for each [********] percent
([***]%) or portion thereof by which Cellnet
is below the [**]% minimum on any billing
day. Anything herein to the contrary
notwithstanding except for any rights that may
exist pursuant to Article 11 hereof, Laclede's
sole remedy for Cellnet's failure to meet or
exceed the foregoing performance metrics is set
forth in this Section 2.2(d)(iii).
(iv) The monthly reliability performance shall be
equal to the sum of each day's number of
successful monthly meter readings which Cellnet
makes available to Laclede during the calendar
month, divided by the sum of each day's number of
monthly Activated Meters.
(v) The Daily Reliability Penalty, Minimum Daily
Reliability Penalty, Monthly Reliability Penalty
and Minimum Monthly Reliability Penalty shall be
referred to herein collectively as the
"Reliability Penalty." Laclede shall have the
right to deduct the Reliability Penalty amount
from the Fee for each such month during which the
daily and/or monthly reliability failures occur,
or any subsequent month.
(e) Historical On-Request Meter Reads / Off-Cycle Meter
---------------------------------------------------
Readings. Cellnet shall provide access to a Cellnet
--------
website via the Internet in order to obtain the
thirty-five (35) most recent days of usage history
information for each Activated Meter. Additionally,
Cellnet shall provide Laclede with the ability to access
the most recent thirteen (13) months of consumption
readings for customer billing history information for each
such meter over the Internet.
14
(f) Special Conditions Applicable to Certain Laclede Gas
----------------------------------------------------
Meters. The parties acknowledge that there are
------
approximately 10,000 Laclede Gas Meters within the portion
of the Fixed Network Area shown on Exhibit 7 ("MoNat
Manual Area Meters") for which Cellnet will not initially
be able to obtain reads utilizing the Fixed Network as a
result of the absence of the necessary MCCs and other
infrastructure. Notwithstanding the foregoing, Cellnet
shall install MIUs on the MoNat Manual Area Meters if
instructed to do so by Laclede and perform Manual Reads of
these meters monthly within their respective Billing
Windows. Such readings shall be transmitted to Laclede via
the Cellnet Standard Interface. The MIUs installed on the
MoNat Manual Area Meters shall be subject to the Monthly
Reliability Penalty and Minimum Monthly Reliability
Penalty described in Section 2.2(d) of this Agreement, but
not the Daily Reliability Penalty and Minimum Daily
Reliability Penalty described in Section 2.2(d). Except to
the extent specifically provided herein, all of the MIUs
installed on MoNat Manual Area Meters shall be subject to
all of the other terms and conditions of this Agreement.
Cellnet shall endeavor in good faith to install the
necessary MCCs and other infrastructure necessary to
enable Cellnet to read these MoNat Manual Area Meters
through the Fixed Network as soon as is financially
practicable.
(g) Disaster Recovery. Cellnet shall maintain a current
-----------------
disaster recovery plan for the primary NOC that at a
minimum provides for recovery of all systems necessary to
deliver the AMR Services within two (2) days of the
declaration by Cellnet of a disaster at the primary NOC.
Such plan shall include the activities that establish the
AMR Services at a separate disaster recovery NOC facility,
including, but not limited to, declaration of a disaster
at the primary NOC, mobilization of staff for operation at
the disaster recovery NOC, primary vendor notification and
acquisition of the necessary computer hardware, retrieval
of the tape back up Meter Database from off site,
installing and configuring the hardware and NOC Software,
recovery of Laclede Data from tape backup, reestablishing
telecommunications links for Laclede retrieval of data and
system testing. Cellnet shall make this plan available to
Laclede within ten (10) days after the Effective Date, and
from time to time thereafter upon Laclede's request,
together with evidence that Cellnet tests such plan
periodically in accordance with industry standards and the
results of the most recent such test. Additionally,
Cellnet and Laclede shall work together to develop, and
revise as necessary, procedures that will apply in the
event that a disaster occurs at the primary NOC. A
disaster shall be declared at the NOC when an event occurs
that results in Cellnet not being able to deliver Fixed
Network Data for a period of time exceeding forty-eight (48)
hours. Subject to the time requirements set forth in the
first sentence of this Section 2.2(g), upon the occurrence
of a disaster, Cellnet shall place a priority status on
restoration of the AMR Services that is at least equal to,
if not higher than, any other Cellnet customer within the
Fixed Network Area
15
The information below marked by * and [] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed
with the Commission.
2.3 Obligations of Laclede.
----------------------
(a) Fees. Except as otherwise specifically provided herein, as
----
sole consideration for the performance by Cellnet of its
obligations under this Agreement, including, without
limitation, the performance of the AMR Services, Laclede
shall pay to Cellnet [**********************************]
("Per Read Fee") per month during the Term for each Activated
Meter on Routes that have been activated pursuant to Section
2.1(g), for each meter that Laclede installs that is already
equipped with a MIU, provided Laclede successfully receives a
monthly automated Actual Read from Cellnet during the
respective Billing Window for each such meter, and for each
meter that Laclede receives a manual read from Cellnet (the
"Fee"). The Per Read Fee shall consist of the components
set forth on Exhibit 8. The number of days in a Billing
---------
Window may not be decreased during the Term without the
prior written agreement of Cellnet. Except as set forth on
Exhibit 8, Laclede shall have no obligation to pay any
---------
charge for any Laclede Gas Meter for which Laclede does
not receive an automated Actual Read or Cellnet manual
read during the respective Billing Window. The Monthly MIU
Asset Fee as set forth on Exhibit 8 ("Asset Fee") shall
---------
also commence for non-Activated Meters where MIU
installation is handled pursuant to Section 2.1(c)(iii) on
the earlier of the 120th day after delivery of the
assembled meter or MIU to Laclede or the 120th day after
passage of title of the assembled meter or MIU to Laclede
or its bank or other lender. Laclede may deduct from the
Fee prior to payment that amount of any penalty being
assessed against Cellnet pursuant to Section 2.2(d) above.
The Fee shall be payable via check or electronic transfer
at such place designated by Cellnet.
(i) Within five (5) Business Days after the end of
each calendar month, Cellnet shall submit to
Laclede (directed to the Laclede AMR program
manager or such other individual or department
specified by Laclede in writing) an invoice
specifying the Fee due from Laclede for such
calendar month. The invoice shall include (A) the
number of automated Actual Reads received via the
Fixed Network during such calendar month, (B) the
number of Cellnet Manual Reads (categorized by
reading method) during such calendar month, (C)
the amount due and owing for the meter data
provided from the Fixed Network during that
month, (D) any reduction for the Reliability
Penalty calculated pursuant to Section 2.2(d),
and (E) the Asset Fees for such calendar month.
The invoice shall include any such other
documentation as Laclede may reasonably request.
(ii) Within thirty (30) calendar days after receipt of
an invoice submitted by Cellnet in accordance
with this Agreement, Laclede shall pay Cellnet
the amount invoiced. If Laclede disputes any
invoiced amount, Laclede shall so notify Cellnet
in writing within fifteen (15) calendar days
after receipt of the invoice and give full
reasons for the dispute. The Parties shall act in
good faith to settle such dispute within five (5)
Business Days after Laclede provides such notice
of dispute to Cellnet. If the Parties are not
able to resolve such dispute prior to the due
date of the invoice, then
16
The information below marked by * and [] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed
with the Commission.
Laclede shall be entitled to withhold one-half
(1/2) of the disputed sum and shall pay the other
one-half (1/2) to Cellnet at the time the
undisputed portion of the invoice is due.
(iii) If Laclede disputes any invoiced amount, the
provisions of Article 19 shall apply. Following
resolution of the dispute: (A) any amount
withheld by Laclede and agreed or determined to
be payable shall be paid by Laclede within ten
(10) Business Days after such agreement or
determination; and (B) any amount paid by Laclede
and agreed or determined not to be payable shall
be deducted by Laclede from the amount of the
monthly invoice next due after such agreement or
determination.
(iv) Should Laclede fail to make payment on or before
the due date of any sum due and owing (other than
any sum which is the subject of a bona fide
dispute and any Reliability Penalty), interest on
the amount unpaid shall accrue from the date such
amount was due until the date of payment at a
rate per annum during such period equal to the
prime rate set forth in the Wall Street Journal
most recently published on the date such payment
was due plus one percent (1%). Interest shall
also accrue at such rate on the amount withheld
pursuant to Section 2.3(a)(ii) (or paid by
Laclede pending resolution of the dispute) until
the time of payment if it is ultimately
determined that such amount was due and payable
to Cellnet (or, in the case of payment of an
amount pursuant to Section 2.3(a)(ii) which was
not ultimately payable to Cellnet, refund of such
amount to Laclede).
(b) Minimum Per Read Fee. The pricing in this Agreement is
--------------------
predicated upon a minimum installed base of [*******]
MIUs. In the event that [*******] MIUs are not installed
within twenty-four (24) months after the Effective Date,
despite Cellnet's good faith efforts and compliance in all
material respects with its obligations under this
Agreement, then, from and after such twenty-four (24)
month period, Cellnet shall have the right to invoice
Laclede, and Laclede shall pay, monthly, in addition to
the Fee, an amount equal to the Per Read Fee multiplied by
the difference between [*******] and the actual number of
MIUs that are installed on Laclede Gas Meters as of the
last day of the then current billing period. As soon as
more than [*******] MIUs have been installed on Laclede
Gas Meters, Laclede shall no longer owe such additional
amount to Cellnet.
(c) Access to Premises. Laclede hereby grants to Cellnet, its
------------------
employees, agents and subcontractors the right of
reasonable access to any Laclede Gas Meter, Fixed Network
Meter and any other relevant assets and premises owned by
it or in its control where such access is necessary in
order for Cellnet to perform the AMR Services. Laclede
shall, at its own expense, take all reasonable steps to
obtain, in favor of Cellnet, its employees, agents and
subcontractors all rights of reasonable access to all
premises that are reasonably required to enable them to
perform the AMR Services and other obligations under this
Agreement. Cellnet shall not be in default under this
Agreement if it is prevented from performing due to its
17
inability to access a meter or premises; provided Cellnet
or the MIU Installer has attempted to gain access to the
meter on six (6) separate occasions as more specifically
described in Section 2.1(c)(ii)(A) hereof. Nothing herein
shall prohibit Laclede from establishing reasonable
restrictions on such access and rendering of services.
(d) Use of Laclede Facilities. Laclede will allow Cellnet the
-------------------------
use of Laclede buildings, towers, land, transmission and
distribution system locations for the positioning of the
MCCs. Cellnet and Laclede shall jointly identify the
relevant sites. Notwithstanding the foregoing, Laclede has
the right to refuse the use of individual sites or to
impose reasonable restrictions on Cellnet entry to such
sites. Cellnet shall not compensate Laclede for the use of
its property as described above; provided, that Cellnet
shall reimburse Laclede for out-of-pocket expenses
incurred by Laclede due to Cellnet's use of such
properties.
(e) Multiple Index Large Industrial and Commercial Meters. If
-----------------------------------------------------
the multiple index meters used by Laclede require the
development of a special interface in order to be read
automatically, Cellnet and Laclede shall cooperate with
each other with regard to Cellnet's development of a
proposed price for the automated reading of these meters
where appropriate.
(f) Installation of Additional MIUs. At Laclede's request,
-------------------------------
Cellnet shall install additional MIUs after the completion
of the Deployment Period at a fee to be agreed upon by the
Parties.
(g) Laclede Gas Data File. Laclede will prior to completion of
---------------------
the Initial Fixed Network Deployment Phase provide to
Cellnet a data file that details all Laclede Gas Data,
including addresses, the reading schedule and all other
pertinent Laclede customer information for all Laclede Gas
Meters within the Fixed Network Area. Laclede will update
this file and furnish it to Cellnet as additional Laclede
Gas Meters are added within the Fixed Network Area.
Cellnet shall not be in default under this Agreement if it
is prevented from performing its obligations hereunder to
the extent caused by an error contained in any data file,
including files containing Laclede Gas Data, provided to
Cellnet by Laclede.
(h) New Laclede Gas Meters. From time to time during the Term,
----------------------
Laclede may replace Activated Meters with new Laclede Gas
Meters or install new Laclede
Gas Meters, each of which already has an installed MIU, in
the Fixed Network Area. In the event that Laclede replaces
any Activated Meter or installs a new Laclede Gas Meter,
it must promptly (i) provide Cellnet with the designation
and installation information of the removed Activated
Meter and/or the designation and installation information
of the new Laclede Gas Meter, electronically via the
Cellnet Standard Interface; and (ii) update the data file
that details all Laclede Gas Data, as more specifically
described in Section 2.3(g). A newly installed Laclede Gas
Meter shall not be deemed to be an Activated Meter until
Cellnet receives (a) a successful meter reading; (b) the
designation and installation information; and (c) the
Laclede Gas Data. Laclede shall bear all costs related to
the removal
18
of any Activated Meters and the installation of all such
newly installed Laclede Gas Meters. Under no circumstance
shall Cellnet be responsible or have any liability related
to (x) Laclede's failure to properly remove any Activated
Meter, (y) Laclede's failure to properly install a new
Laclede Gas Meter, or (z) Laclede's failure to provide
Cellnet with accurate Laclede Gas Data or information
related to the new Laclede Gas Meter.
2.4 Systems Integration. Cellnet and Laclede shall each be responsible
-------------------
for ensuring that its own respective systems perform in the manner
that such Party has agreed its systems will perform in the
specifications for the AMR Services and the implementation of the
Standard Interface Specifications.
2.5 Interface Changes or New Interface Implementation. The Parties are
-------------------------------------------------
not obligated to change or implement new interfaces once the
Initial Fixed Network Deployment Phase is complete. If either Party
decides to change, revise or create a new interface that is not in
accordance with the Standard Interface Specifications, the Party
shall submit a Change Order pursuant to Article 7. The Party
requesting such change shall reimburse the other Party for the
reasonable costs and expenses incurred by such non-requesting Party
in connection with such change.
2.6 Exclusivity. Laclede acknowledges and agrees that Cellnet shall
-----------
have the exclusive right to retrieve data from the MIUs installed
on Laclede Gas Meters pursuant to this Agreement, and Laclede shall
not, and shall not engage another person or entity to, read,
attempt to read or intercept signals or communications from the
MIUs. Further, during the Term, Cellnet shall be the exclusive
provider to Laclede of the AMR Services and any tasks or services
substantially similar to the AMR Services within the Fixed Network
Area.
2.7 Initial Term. The initial term of this Agreement shall begin on the
------------
date first set forth above (the "Effective Date") and continue for
fifteen (15) years ("Initial Term").
2.8 Term Extensions and Renewals. At the end of the Initial Term,
----------------------------
Laclede and Cellnet may renew this Agreement upon mutually
agreeable terms and conditions. The Parties agree to begin
negotiations two (2) years prior to the end of the Initial Term.
ARTICLE 3
MAINTENANCE, GROWTH AND REPAIR
OF THE FIXED NETWORK
3.1 Maintenance of MIUs.
-------------------
(a) Subject to this Section 3.1 and Section 3.4 hereof,
Cellnet shall be responsible for all costs of repairing or
replacing non-working or failed MIUs. Cellnet shall
provide all support and maintenance required on the MIUs.
Cellnet shall provide service visits free of charge to
meters where the NOC fails to receive data from a Fixed
Network Meter unless such failure clearly indicates a
problem other than with the MIU or the Fixed Network.
Notwithstanding the foregoing, if the Parties
19
determine that a MIU is damaged by anyone other than
Cellnet or the MIU Installer or is vandalized such that it
cannot reasonably be made to function properly, the MIU
will be considered to be a retired MIU and so treated
pursuant to the mechanism set forth in Section
2.1(c)(iii)(E).
(b) Cellnet shall provide service visits free of charge to any
Activated Meter upon the reasonable request of Laclede
when Laclede deems a MIU to be stopped, programmed
incorrectly by Cellnet or its subcontractor or reset and
has provided documented history of such readings. If, upon
such service visit, Cellnet discovers and documents that
the MIU was programmed correctly and is operating
properly, or if a MIU malfunction or incorrect programming
by Laclede or its third party vendor or subcontractor was
caused by (i) the Laclede Gas Meter, (ii) any Laclede
personnel, or (iii) vandalism, and such findings are
confirmed by Laclede, Cellnet shall deliver an invoice to
Laclede, and Laclede shall reimburse Cellnet's reasonable
expenses for such service visit not to exceed Fifty
Dollars ($50), payable within thirty (30) calendar days of
receipt of the invoice from Cellnet.
(c) If Laclede investigates a stopped meter report and
determines that there has been a MIU failure, has replaced
the MIU or battery, and delivered the MIU or battery to
Cellnet, and the failure is confirmed by Cellnet, Laclede
shall deliver an invoice to Cellnet, and Cellnet shall
reimburse Laclede for its reasonable expenses for such a
service visit not to exceed Fifty Dollars ($50), payable
within thirty (30) calendar days of receipt of the invoice
from Laclede.
(d) Notwithstanding the foregoing, if Cellnet cannot gain
access to a MIU to verify whether it is functioning
properly after making at least three (3) reasonable
attempts to access the MIU, Cellnet's obligations under
this Section 3.1 with respect to such MIU shall be
suspended until such time as Cellnet gains access on its
own or with the assistance of Laclede. During the period
that Cellnet is not able to gain access to such MIU, the
meter shall be deemed to be an Unavailable Meter, and
Cellnet shall provide Laclede (directed to the attention
of the Laclede AMR program manager at the address provided
hereafter in this Agreement) prompt written notice of any
MIU that appears to be malfunctioning to which Cellnet
cannot gain access. Upon receipt of such notice, Laclede
shall make reasonable efforts to assist Cellnet to gain
access to the MIU in question.
3.2 Meter Change Outs. Change outs of Laclede Gas Meters will occur
-----------------
during the Term in accordance with Laclede's standard procedures
for meter change outs; provided that Laclede shall de-initialize
the MIU on each meter that is removed and initialize the new MIU
that is part of the meter that is being installed. Upon completion
of the change out, Laclede shall provide to Cellnet the information
required by the Standard Interface Specifications. Upon receipt of
the meter change out files via the Cellnet Standard Interface,
Cellnet shall update the NOC to allow for proper acceptance of
transmissions from the new MIU.
20
3.3 Battery Replacement. The MIU batteries will be replaced by Cellnet
-------------------
so that there is no interruption in the AMR Services due to battery
failure. Cellnet shall be responsible for the cost of the battery
and installing the battery. Any system-wide replacement of
batteries shall be coordinated in advance with Laclede.
3.4 Vandalism. Cellnet will, within five (5) Business Days after the
---------
discovery of vandalism to a MIU, repair or replace the MIU,
provided the meter is an Accessible Meter, and Laclede will be
responsible for Cellnet's service visit in accordance with Section
3.1(b). Vandalism to a MIU requiring repair or replacement of the
MIU shall be considered to be a Force Majeure Event and shall
relieve Cellnet of its responsibilities relating to obtaining reads
under this Agreement with respect to such MIU; provided that
Cellnet promptly repairs or replaces such MIU upon discovery of
such vandalism. Notwithstanding the foregoing, if Cellnet discovers
that only the meter or both the meter and the MIU have been
damaged, Cellnet will promptly notify Laclede of such damage in
writing. Within seven (7) Business Days after receiving such
written notice, Laclede shall, at its own expense, replace the
damaged meter with a meter equipped with a MIU or remove such meter
and disconnect gas service, provided such meter is accessible to
Laclede. All vandalized MIUs that are replaced with a new MIU shall
be retired in accordance with Section 3.1(a) of this Agreement.
ARTICLE 4
INTELLECTUAL PROPERTY, LICENSES AND USE OF
INTELLECTUAL PROPERTY
4.1 Intellectual Property. Notwithstanding any other provision in this
---------------------
Agreement to the contrary, (i) all Intellectual Property rights in
the Fixed Network, the NOC, the Programming Software, the MIUs, the
MCCs and the method of providing the AMR Services (the "Cellnet
Intellectual Property") shall at all times remain the property of
Cellnet, and nothing in this Agreement shall serve to pass
ownership in any part of the Cellnet Intellectual Property to
Laclede or any third party, and (ii) any developments,
improvements, modifications, enhancements and/or adaptations of any
kind created or developed by Laclede or by Cellnet, or jointly by
the Parties, to any element or part of the Cellnet Intellectual
Property shall at all times remain the property of Cellnet, and
nothing in this Agreement shall serve to pass ownership in any part
of the Cellnet Intellectual Property to Laclede or any third party.
To the extent Cellnet updates or modifies the Programming Software
for its other customers, Cellnet shall offer the same updates
and/or modifications to Laclede at the same or lesser charge as it
offers the same to other customers. Notwithstanding the foregoing,
Cellnet shall provide to Laclede without charge any updates or
modifications to the Programming Software that are required in
order for Cellnet to perform and Laclede to utilize the AMR
Services as contemplated under this Agreement.
4.2 License to the Programming Software. Subject to the terms and
-----------------------------------
conditions of this Agreement, Cellnet shall grant Laclede pursuant
to a license agreement in the form attached hereto as Exhibit 9 a
---------
non-transferable, non-exclusive, limited license to use the
Programming Software solely to program the MIUs for use on Laclede
Gas Meters. Should Laclede require the use of the Programming
Software beyond the expiration or
21
termination of this Agreement and provided that Cellnet continues
to support such software, Laclede shall have the right to enter
into an appropriate license with Cellnet for such software in
exchange for payment of a commercially reasonable royalty by
Laclede.
4.3 Rights in Fixed Network. Cellnet shall hold all rights to the Fixed
-----------------------
Network, and Laclede shall have no right or interest in any part of
the Fixed Network, except as expressly provided under this
Agreement.
4.4 Assignments by Laclede. All developments, improvements,
----------------------
modifications, enhancements and/or adaptations to the Cellnet
Intellectual Property created or developed by Cellnet, by Laclede,
or jointly by the Parties shall be considered to be Cellnet
Intellectual Property. If by operation of law any such Intellectual
Property is not owned in its entirety by Cellnet automatically upon
creation or development, then Laclede agrees to transfer and
assign, and hereby transfers and assigns, to Cellnet the entire
right, title and interest, if any, throughout the world in and to
all such Intellectual Property, including any Intellectual Property
rights in same, and shall cooperate with Cellnet in obtaining for
Cellnet's benefit, and at Cellnet's sole expense, appropriate legal
protection for such Intellectual Property, including, but not
limited to, testifying in any legal proceedings, signing all lawful
papers, making all rightful oaths and executing applications,
assignments and other instruments, all at Cellnet's sole expense.
4.5 Assignments by Cellnet. All Intellectual Property that is owned by
----------------------
Laclede, including, without limitation, Laclede Gas Data, the Fixed
Network Data, and documentation and reports produced by Laclede in
connection with the AMR Services (except to the extent such
documentation and reports incorporate Cellnet Intellectual Property
or Confidential Information), will belong exclusively to Laclede.
If by operation of law any such Intellectual Property is not owned
in its entirety by Laclede automatically upon creation or
development, then Cellnet agrees to transfer and assign, and hereby
transfers and assigns to Laclede the entire right, title and
interest, if any, throughout the world in and to all such
Intellectual Property, including copyrights in same, and shall
cooperate with Laclede in obtaining for Laclede's benefit, and at
Laclede's expense, appropriate legal protection of such
Intellectual Property transferred and assigned, and to be
transferred and assigned, hereunder to Laclede, including but not
limited to testifying in any legal proceedings, signing all lawful
papers, making all rightful oaths and executing all applications,
assignments and other instruments, all at Laclede's sole expense.
ARTICLE 5
OWNERSHIP OF INFORMATION
5.1 Ownership by Laclede. All Fixed Network Data, any documentation or
--------------------
reports of any kind produced by Cellnet utilizing Laclede's
customer data or readings or any other information provided in any
form by Laclede or Laclede's customers to, or obtained from Laclede
Gas Meters by, Cellnet in connection with this Agreement are, and
shall continue to be, owned solely by Laclede, and Laclede shall
comply with all reasonable requests by Cellnet for access to all
such data, documentation, reports and other information to the
extent required for Cellnet to perform its obligations under this
Agreement. Cellnet may use extracts or summaries of the Fixed
Network Data only for its internal purposes and
22
for the purpose of promoting the sale of its services to others as
long as such extracts or summaries do not contain any information
identifiable to Laclede or to any particular customer of Laclede.
ARTICLE 6
TRAINING
6.1 Training Plan. Within twenty (20) Business Days after the date of
-------------
this Agreement, Cellnet shall provide to Laclede a written plan
describing the training that Cellnet shall provide to Laclede
personnel (the "Training Plan"). Such plan shall be subject to
Laclede's approval, which shall not be unreasonably withheld or
delayed. Unless otherwise approved by Laclede, all training shall
be conducted in St. Louis at facilities owned by Laclede. All
training shall be conducted at times and places mutually agreeable
to the Parties. Cellnet will provide sufficient training on MIU
installation, such that Laclede can train the trainers. The
Training Plan will also include instruction on accessing Fixed
Network Data via the Internet. In the event that training is not
conducted at a Laclede facility, or is conducted outside of the St.
Louis area, Laclede shall bear the costs and expenses related to
such training.
ARTICLE 7
CHANGE ORDERS
7.1 Changes. The Parties may mutually agree to modify the scope of the
-------
AMR Services at any time during the Term (a "Change"). If, however,
such modifications would require the Party not requesting the
Change to provide services materially different from the AMR
Services specified in this Agreement, or materially extend or
shorten the time needed to complete the AMR Services (a "Material
Change"), the Parties shall follow the Change Order Procedure set
forth in Section 7.2 below.
7.2 Change Order Procedure.
----------------------
(a) To request a Material Change, a Party (the "Requesting
Party") shall submit to the other Party (the "Responding
Party") a written request describing the change that such
Party desires ("Change Order"). The Responding Party shall
respond to the Change Order within fifteen (15) Business
Days of receipt with a written statement (i) offering to
perform the AMR Services in a manner consistent with the
Change Order, (ii) offering to perform the Change Order
but proposing modifications to it, or (iii) rejecting the
Change Order. If the Responding Party responds in
accordance with either (i) or (ii) in the preceding
sentence, the Responding Party shall include detailed
information as to the availability of the Responding
Party's personnel and resources to perform the Change
Order and the impact, if any, on timing of the completion
of the affected AMR Services or the additional or reduced
cost of the AMR Services. The Responding Party will use
commercially reasonable efforts to minimize any adverse
impact on the AMR Services created by the Change Order or
any increase in cost or expense that is to be imposed on
the Requesting Party. This process will continue until the
Parties agree in writing upon the changes to be made, the
impact on the timing of the
23
completion of the affected AMR Services and any additional
costs or expenses associated therewith. If the Requesting
Party desires to implement the Change Order, it will
notify the Responding Party so in writing and the
Responding Party will promptly proceed with the
implementation of the applicable changes, as mutually
agreed upon by the Parties.
(b) For any Change Order, Laclede shall pay Cellnet the
additional charges, costs and expense agreed upon by the
Parties pursuant to the terms of Section 2.3(a). If the
Change Order results in a reduction in the anticipated
charges, costs or expenses, Laclede shall receive a credit
for such reduction against the fees otherwise owed by
Laclede under this Agreement.
ARTICLE 8
SUBCONTRACTS
8.1 Subcontracts. Cellnet anticipates entering into certain contracts
------------
for equipment and services, including, without limitation,
installation of MIUs and installation and maintenance of MCCs.
Laclede shall have the right to approve the parties with whom
Cellnet contracts for the installation of MIUs as set forth in
Section 2.1(d)(i). Laclede has provided to Cellnet general
guidelines for subcontractors to assist Cellnet to select
subcontractors that will be acceptable to Laclede. No
subcontracting or delegation of duties by Cellnet to third parties
shall relieve Cellnet of any obligations of Cellnet under this
Agreement.
ARTICLE 9
CONFIDENTIALITY
9.1 Confidential Information. "Confidential Information" means any
------------------------
information or data disclosed in writing or orally by a Party (the
"Disclosing Party") to the other Party (the "Recipient") under or
in contemplation of this Agreement, whether delivered or obtained
before or after the date hereof, and which (a) if in tangible form
or other media that can be converted to readable form, is clearly
marked as proprietary, confidential, or private on disclosure; or
(b) if oral or visual, is identified as proprietary, confidential
or private on disclosure and is summarized in writing so marked and
delivered within thirty (30) days following such disclosure; or (c)
the Recipient, considering the method of disclosure or discovery
and the subject matter being disclosed or discovered, should
reasonably conclude is considered confidential by the Disclosing
Party. "Disclosing Party" and "Recipient" include each Party's
Affiliates that disclose or receive Confidential Information. The
rights and obligations of the Parties shall therefore also inure to
such Affiliates and may be directly enforced by or against such
Affiliates. For purposes of clarification, Laclede Gas Data and
Fixed Network Data shall be deemed Confidential Information of
Laclede.
9.2 Use of Confidential Information. The Recipient acknowledges the
-------------------------------
economic value of the Disclosing Party's Confidential Information.
The Recipient shall: (a) use the Confidential Information only as
required to perform its obligations under this
24
Agreement; (b) restrict disclosure of the Confidential Information
to employees and advisors of the Recipient and its Affiliates who
need to know the information in order for Recipient to perform its
obligations under this Agreement; (c) not disclose it to any other
person or entity without the prior written consent of the
Disclosing Party; (d) advise those employees who access the
Confidential Information of their obligations with respect thereto;
and (e) copy the Confidential Information only as necessary for
those employees who are entitled to receive it, and ensure that all
confidentiality notices are reproduced in full on such copies.
9.3 Exclusions and Exceptions. The foregoing confidentiality
-------------------------
obligations shall not apply to any Confidential Information that
the Recipient can demonstrate: (a) is or becomes available to the
public through no breach of this Agreement; (b) was previously
known by the Recipient without any obligation to hold it in
confidence; (c) is received from a third party free to disclose
such information without restriction; (d) is independently
developed by the Recipient without the use of Confidential
Information; (e) is approved for release by written authorization
of the Disclosing Party, but only to the extent of such
authorization; (f) is required by PSC data request, law,
regulation, administrative order or subpoena to be disclosed, but
only to the extent and for the purposes of such required
disclosure, and only if the Recipient first attempts to notify the
Disclosing Party of the request, law, regulation, order or
subpoena; or (g) is disclosed in response to a valid order of a
court or other governmental body of the United States or any
political subdivision thereof, but only to the extent of, and for
the purposes of, such order, and only if the Recipient first
attempts to notify the Disclosing Party of the order to permit the
Disclosing Party to seek an appropriate protective order.
9.4 Unmarked Confidential Information. If the Disclosing Party
---------------------------------
inadvertently fails to mark as proprietary, confidential or private
information for which it desires confidential treatment, it shall
so inform the Recipient. The Recipient thereupon shall return the
unmarked information to the Disclosing Party and the Disclosing
Party shall substitute properly marked information. Nothing in this
paragraph shall relieve Recipient of its obligations to protect
Confidential Information that contains no restrictive marking that
the Recipient, considering the method of disclosure or discovery
and the subject matter being disclosed or discovered, should
reasonably conclude is considered confidential by the Disclosing
Party.
9.5 Ownership of Confidential Information. Confidential Information,
-------------------------------------
including permitted copies, shall be deemed the property of the
Disclosing Party. The Recipient shall, within thirty (30) days of a
written request by the Disclosing Party, return all Confidential
Information (or any designated portion thereof), including all
written copies or electronic data containing the Confidential
Information, to the Disclosing Party or, if so directed by the
Disclosing Party, destroy all such Confidential Information. The
Recipient shall also, within fifteen (15) days of a written request
by the Disclosing Party, certify in writing that it has satisfied
its obligations under this Agreement.
9.6 Specific Performance. The Parties agree that an impending or
--------------------
existing violation of this Article 9 would cause the Disclosing
Party irreparable injury for which it would have no adequate remedy
at law, and agree that the Disclosing Party shall be entitled to
obtain
25
immediate injunctive relief prohibiting such violation, in addition
to any other rights and remedies available to it.
9.7 Survival and Severability. All obligations undertaken respecting
-------------------------
Confidential Information shall survive the expiration or earlier
termination of this Agreement and shall continue for five (5) years
from the date of the expiration or earlier termination of this
Agreement.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 Representations and Warranties of Cellnet. Cellnet hereby
-----------------------------------------
represents and warrants the following to Laclede:
(a) Duly Authorized. Cellnet is a corporation duly organized
---------------
and existing and is in good standing under the laws of
Delaware. Cellnet's execution, delivery and performance of
this Agreement has been duly authorized by all appropriate
action on the part of Cellnet, and this Agreement
constitutes the valid and binding obligation of Cellnet
and is enforceable against Cellnet in accordance with its
terms.
(b) No Conflict. Neither the execution and delivery of this
-----------
Agreement, nor any assignments or licenses made hereunder,
will conflict with or violate any other license,
instrument, contract, agreement, or other commitment or
arrangement to which Cellnet is bound.
(c) Consents. No approval, authorization, consent, permission,
--------
waiver, notice, filing or recording is necessary for
Cellnet's execution of this Agreement.
(d) Professional Standards. The AMR Services shall be
----------------------
performed in a professional manner in accordance with the
prevailing standards of the industry.
(e) Ownership. Cellnet has or will obtain the ownership of, or
---------
a leasehold, license or other interest in all elements of,
the Fixed Network so as to perform its obligations
hereunder.
(f) Non-Encumberance and Non-Infringement. To the best of
-------------------------------------
Cellnet's knowledge and belief, (i) neither the AMR
Services, nor any deliverables provided by Cellnet to
Laclede hereunder, have been or will be encumbered, except
as provided in the financing arrangements entered into by
Cellnet in connection with this Agreement and approved by
Laclede, and any subsequent renewals, extensions,
restructurings, modifications, or replacements of such
financing arrangements, in whole or in part (either as a
stand-alone financing in connection with this Agreement or
as part of Cellnet's general financing facilities), which
shall not require approval by Laclede but shall require
notice to Laclede thereof, and (ii) neither the AMR
Services, nor any deliverables provided by Cellnet to
Laclede hereunder, nor any system, apparatus, equipment,
components, method,
26
process, information, data or design provided by Cellnet
to Laclede hereunder or used by Cellnet in providing the
AMR Services hereunder infringe any patents, copyrights,
trade secrets, or other proprietary rights of any third
party. Cellnet makes no representation or warranty with
respect to infringement claims arising from any system,
apparatus, equipment, component, method, process,
information, data or design provided by Laclede hereunder.
(g) Compliance with Laws. Cellnet shall comply with all
--------------------
applicable federal, state and local laws, regulations,
ordinances, and governmental restrictions in performing
the AMR Services under this Agreement.
(h) Services and Supplies. Cellnet warrants that the supplies
---------------------
and services furnished under this Agreement will be free
from defects in material and workmanship and will conform,
in all material respects, to all requirements of this
Agreement.
(i) Required FCC and Regulatory Licenses. Cellnet shall obtain
------------------------------------
and maintain during the Term, at Cellnet's expense, any
licenses and/or permits needed from the FCC, state or
local regulatory agencies, or any licenses from other
entities required to operate the Fixed Network in
Laclede's service area.
(j) Fixed Network Security. Cellnet shall keep in place
----------------------
network security that will monitor and protect against
unauthorized access to Laclede Gas Data while such data
are on or within the Fixed Network. The Laclede Gas Data
will be stored in a separate partitioned area of the Meter
Database.
10.2 Representations and Warranties of Laclede. Laclede hereby
-----------------------------------------
represents and warrants to Cellnet:
(a) Duly Authorized. Laclede is a corporation duly
---------------
incorporated and existing in good standing under the laws
of Missouri. Laclede's execution, delivery and performance
of this Agreement has been duly authorized by all
appropriate corporate action on the part of Laclede, and
this Agreement constitutes the valid and binding
obligation of Laclede and is enforceable against Laclede
in accordance with its terms.
(b) No Conflict. Neither the execution and delivery of this
-----------
Agreement nor any assignments or licenses made hereunder
will conflict with or violate any other license,
instrument, contract, agreement, or other commitment or
arrangement to which Laclede is bound.
(c) Ownership. Laclede has and will continue to have: (i) good
---------
and clear title or (ii) valid and enforceable rights or
licenses to the Laclede Gas Meters and the Laclede gas
systems. Laclede will not subject any MIUs installed on
Laclede Gas Meters to any encumbrances, liens, mortgages,
securities or other defects in title.
27
(d) Consents. Except as specifically provided otherwise
--------
herein, no approval, authorization, consent, permission,
waiver, notice, filing or recording is necessary for
Laclede's execution of this Agreement.
(e) Non-Infringement. To the best of Laclede's knowledge and
----------------
belief, neither Laclede's gas system nor any information,
data, data processes or designs supplied by Laclede that
will be integrated with the AMR Services infringes any
patents, copyrights, trade secrets or other proprietary
rights of any third party to the extent that said
infringement is based solely on said Laclede's gas system,
information, data, processes or designs, and Laclede has
no reason to believe that any such infringement or claims
thereof could be made by third parties. Laclede makes no
representation or warranty with respect to infringement
claims arising from AMR Services, or any system,
apparatus, equipment, component, method, process,
information, data or design provided by Cellnet hereunder.
(f) Compliance with Laws. Laclede shall comply with all
--------------------
applicable federal, state and local laws, regulations,
ordinances, and governmental restrictions in performing
its obligations under this Agreement.
10.3 DISCLAIMER OF WARRANTY. EXCEPT FOR THE WARRANTIES SET FORTH IN THIS
----------------------
AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
ARTICLE 11
TERMINATION AND REMEDIES
11.1 Termination.
-----------
(a) Termination by Either Party for Breach. Either Party may
--------------------------------------
terminate this Agreement in the event of a material breach
of this Agreement by the other Party, provided that the
breaching Party has not cured such material breach within
forty-five (45) Business Days after the date that the
Party seeking termination provides written notice of such
material breach to the breaching Party. Such notice shall
set forth the full details of the breach and state that
the failure to cure such breach may result in termination.
Either Party may terminate this Agreement if there exists
a series of non-material or persistent breaches by the
other Party, that, in the aggregate, have a material and
significant adverse impact on the non-breaching Party;
provided that the non-breaching Party provides the
breaching Party with prior written notice of its belief
that such series of non-material breaches have had, are
having, or are reasonably likely to have a material and
significant adverse impact on the non-breaching Party and
further provided that the non-breaching Party provides the
breaching Party with forty-five (45) Business Days, during
which such non-material breaches must be cured.
28
The information below marked by * and [] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed
with the Commission.
(b) Termination by Cellnet for Nonpayment. Cellnet may
-------------------------------------
terminate this Agreement in the event that Laclede, during
two (2) consecutive months or three (3) or more times
during any Contract Year, fails to pay any invoice for the
Fees when due, provided that Laclede has not cured any
such payment default within twenty (20) Business Days
after the date that Cellnet provides written notice to
Laclede of such payment default.
(c) Termination for MIU System Failure. It shall be deemed to
----------------------------------
be a material breach of this Agreement by Cellnet, for
purposes of Section 11.1(a), if more than [***]
percent ([*]%) of either the first [*****] or
[******] MIUs installed on Activated Meters fail to
provide daily automated meter reads on an average basis
over the total number of calendar days of the first full
calendar month following the installation of such
[*****] or [******] MIUs, respectively, and such
failure is not cured during the following forty five (45)
Business Days. In the event of such a material breach by
Cellnet, Laclede may avail itself of the remedies
contained in this Article 11.
(d) Termination for Insolvency. Either Party may terminate
--------------------------
this Agreement on written notice to the other if the other
Party becomes an Insolvent Entity. In the event of the
bankruptcy of Cellnet pursuant to the Bankruptcy Code and
an attendant rejection of this Agreement or any license or
assignment granted hereunder pursuant to Section 365
thereof, the Parties intend that the provisions of the
Bankruptcy Code shall apply.
(e) Suspension of Performance. In addition to the foregoing,
-------------------------
after expiration of the applicable cure period described
in Section 11.1(a) or 11.1(b) above, a non-defaulting
Party may, without terminating this Agreement, suspend
performance of its obligations under this Agreement for
such period of time as the non-defaulting Party deems
appropriate in its sole discretion to give the defaulting
Party an additional opportunity to cure. The
non-defaulting Party may terminate this Agreement at any
time during such suspension by providing thirty (30)
Business Days written notice to the other Party.
11.2 Impaired Performance. If either Party fails to materially perform
--------------------
or observe any of its obligations set forth in this Agreement and
fails to take corrective action within forty-five (45) Business
Days after written notice by the other, the non-breaching Party
may, as an alternative to its right to terminate this Agreement,
accept such Party's impaired performance and recover its actual
damages.
11.3 Effect of Termination.
---------------------
(a) Removal of MIUs. Unless otherwise agreed by the Parties,
---------------
if this Agreement is terminated as a result of breach,
then in the event of a Laclede breach, Laclede shall be
responsible for the cost of removal of the MIUs installed
on Laclede property. In the event of a Cellnet breach,
Cellnet shall be responsible for the commercially
reasonable cost of removal of the MIUs; provided that if
the removal occurs in connection with deployment of any
replacement system, then
29
Cellnet shall be responsible only for the commercially
reasonable incremental cost of removing the MIUs; and
further provided that if Laclede is not deploying a
replacement system and the removal is at the discretion of
Laclede and not required by any regulatory or governmental
authority, applicable law or the superior rights of a
third party, then Laclede shall be responsible for the
commercially reasonable cost of removal of the MIUs. If
this Agreement is terminated as a result of the default of
Laclede, then any removal of the MIUs shall have no impact
on Laclede's obligation to pay any Asset Fees (as
specified in Exhibit 8 hereto) related to such
---------
MIUs unless and to the extent that any such MIUs are
returned to Cellnet by Laclede and redeployed by Cellnet.
If this Agreement is terminated as a result of the default
of Cellnet and Laclede does not continue to utilize the
Fixed Network, then Laclede's obligation to pay any Asset
Fees related to the MIUs shall cease; provided, that if
Laclede continues to utilize the Fixed Network, Laclede's
obligation to pay the Asset Fee shall continue only for
those MIUs that continue to function properly and deliver
automated meter reads to Laclede. In all events, Laclede's
obligation to pay any Asset Fee shall cease on the
fifteenth (15th) anniversary of the Effective Date. Upon
expiration of the Term or earlier termination of this
Agreement for breach by Laclede, Cellnet may, but shall
not be obligated to, remove the MIUs installed on Laclede
Gas Meters, at Cellnet's sole cost and expense.
Notwithstanding the foregoing, if Cellnet desires to
remove the MIUs installed on the Laclede Gas Meters upon
the termination of this Agreement, Cellnet shall notify
Laclede in writing within thirty (30) days after such
termination, and Cellnet and Laclede shall devise a
schedule and methodology for such removal that is
reasonably acceptable to both Parties.
(b) Return of Confidential Information, Trade Secrets and
-----------------------------------------------------
Cellnet Property. Upon the termination of this Agreement
----------------
by either Party for any reason, each Party shall return to
the other any Confidential Information of the other Party
in its possession or, with the consent of the Disclosing
Party, shall destroy the same and certify such destruction
to the Disclosing Party. Additionally, upon the
termination of this Agreement, Laclede shall return to
Cellnet the handheld units provided during the Initial
Fixed Network Deployment Phase.
(c) Survival of Rights and Licenses. Upon termination of this
-------------------------------
Agreement by either Party, all rights and licenses granted
hereunder, except for those necessary to perform
Transition Services as specified in Section 11.3(d) below
or as specified elsewhere in this Agreement, shall
terminate.
(d) Transition Services.
-------------------
(i) Transition Services. Upon expiration or earlier
-------------------
termination of this Agreement (except due to the
termination by Cellnet pursuant to Section
11.1(a) or (b)), the Parties agree they will
cooperate to assist in the orderly transfer of
performance of the AMR Services to a new service
provider selected by Laclede (the "Transition
Services"). Without limiting the generality of
the foregoing, Cellnet shall provide Laclede and
its
30
The information below marked by * and [] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed
with the Commission.
respective agents, contractors and consultants,
as necessary, with the AMR Services contracted
for hereunder, for a maximum of eighteen (18)
months after such termination or expiration (the
"Transition Period"). Such Transition Services
shall be provided pursuant to the terms and
conditions of this Agreement; provided that to
the extent such Transition Services are provided
after the expiration of the Term, then Laclede
and Cellnet shall work together in good faith to
amend the performance standards for the AMR
Services and such other operational matters as
may be relevant to the winding down of operations
pursuant to the Transition Services, as
appropriate.
(ii) Payment During Transition. Laclede and Cellnet
-------------------------
shall negotiate in good faith to reach agreement
on the fees for the AMR Services during the
provision of Transition Services; provided that
if the parties are not able to reach agreement,
then Laclede shall pay Cellnet (A) the
then-effective per-read fee for the AMR services
as set forth in Section 2.3(a) for AMR Services
rendered before the fifteenth (15) anniversary of
the Effective Date, and/or (B) $[****] per
read for the AMR Services as set forth in Section
2.3(a) for AMR Services rendered on or after the
fifteenth anniversary of the Effective Date. If
the Agreement was terminated for any reason other
than Cellnet's default, Laclede shall pay Cellnet
for the Transition Services in accordance with
Cellnet's then current rates for professional
services.
(iii) Assets for Transition Services. In the event of
------------------------------
early termination of this Agreement for any
reason other than breach by Laclede, then Laclede
shall be entitled to contract with a new service
provider for the provision of the AMR Services
during the Transition Period and, in connection
therewith, to the use of the MIUs and the
non-exclusive use of the MCCs, NOC, Programming
Software or other components of the Fixed Network
owned, leased, or licensed by Cellnet and used by
Cellnet in providing the AMR Services, subject to
Cellnet's prior written consent, which consent
shall not be unreasonably withheld or delayed.
(e) Laclede Termination Damages. In the event Laclede
---------------------------
terminates this Agreement after a breach by Cellnet,
Cellnet shall pay Laclede its actual damages.
(f) Cellnet Termination Damages. In the event Cellnet
---------------------------
terminates this Agreement after a breach by Laclede,
Laclede shall pay to Cellnet its actual damages.
31
ARTICLE 12
INDEMNIFICATION AND LIMITATION OF LIABILITY
12.1 Indemnification.
---------------
(a) Indemnity by Cellnet.
--------------------
(i) Intellectual Property Indemnification. Cellnet,
-------------------------------------
at its own expense, shall indemnify, defend and
hold harmless, Laclede and its Affiliates,
directors, officers, employees, agents,
successors and assigns and defend any action
brought against same with respect to any claim,
demand, cause of action, debt, liability, damage,
cost, loss or expense, including, without
limitation, reasonable attorney's fees and
expenses, arising out of any claim that any
services, system, apparatus, equipment,
component, method, process, information, data
(other than Laclede Gas Data or Fixed Network
Data) or design furnished by Cellnet and/or its
subcontractors (collectively, "Cellnet
Materials"), in connection with the provision of
AMR Services hereunder by Cellnet, infringes or
violates any patent, copyright, trade secret,
license or other proprietary right of any third
party.
At any time after Cellnet becomes aware of any
such claim, Cellnet may, at its option and
expense, (1) procure the right to furnish to
Laclede the Cellnet Materials as provided in this
Agreement, (2) modify the infringing Cellnet
Materials without impairing in any material
respect the functionality or performance of the
AMR Services or any other services provided
hereunder so that they are non-infringing, or (3)
replace the Cellnet Materials with an equally
suitable, non-infringing replacement that does
not impair in any material respect the
functionality or performance of the AMR Services
or any other services provided hereunder. If
Cellnet is not able to accomplish (1), (2) or (3)
above within a reasonable period of time, Cellnet
shall have the option to terminate this Agreement
upon written notice to Laclede and Cellnet shall
be deemed to be in breach under this Agreement,
and Laclede shall have the right to avail itself
of any remedies available to it under this
Agreement or otherwise.
(ii) Personal Injury and Property Damage
-----------------------------------
Indemnification. Cellnet agrees to take, and
---------------
cause its employees, subcontractors, and agents
to take, all commercially reasonable precautions
to prevent injury to any persons (including,
without limitation, employees, agents and
customers of Laclede) or damage to property
(including, without limitation, Laclede's
property) and shall indemnify, hold harmless and
defend Laclede and its Affiliates, directors,
officers, employees, agents, successors and
assigns from and against any and all suits,
actions, damages, claims, fines, penalties,
administrative or regulatory actions, costs,
losses, expenses (including, without limitation,
settlement awards and reasonable attorney's
fees), and the liabilities, costs and/or expenses
arising from or in connection with any claim of
injuries to person or damage to property
32
arising out of any act, omission, or negligence
on the part of Cellnet or its agents,
subcontractors or employees in the performance or
failure to perform any obligation under this
Agreement.
(iii) Cellnet, at its own expense, shall indemnify,
defend and hold Laclede harmless from and against
any assessment, penalty or fee charged to or
assessed against Laclede by the PSC or a court of
competent jurisdiction to the extent that such
assessment penalty or fee is a result of
Cellnet's failure to provide AMR Services in
accordance with the terms and conditions of this
Agreement, and Laclede may setoff any such amount
against amounts owed by Laclede to Cellnet under
this Agreement.
(b) Indemnity by Laclede. Personal Injury and Property Damage
--------------------
Indemnification. Laclede agrees to take, and cause its
employees and agents to take, all commercially reasonable
precautions to prevent injury to any persons (including,
without limitation, employees and agents of Cellnet) or
damage to property (including, without limitation,
Cellnet's property) and shall indemnify, hold harmless and
defend Cellnet and its Affiliates, directors, officers,
employees, agents, successors and assigns from and against
any and all suits, actions, damages, claims, fines,
penalties, administrative or regulatory actions, costs,
losses, expenses (including, without limitation,
settlement awards and reasonable attorney's fees), and the
liabilities, costs and/or expenses arising from or in
connection with any claim of injuries to person or damage
to property resulting from or arising out of any act,
omission, or negligence on the part of Laclede or its
agents or employees in the performance or failure to
perform any obligation under this Agreement.
(c) Procedures. In connection with any claim for
----------
indemnification, the Party seeking indemnification
("indemnitee") shall give prompt notice to the Party
providing indemnification under this Section 12.1
("indemnitor") of the assertion of any claim, or the
commencement of any suit, action or proceeding in respect of
which indemnity may be sought under this Article 12; provided
that the failure to give such notice shall not affect the
rights of such indemnitee except and only to the extent the
indemnitor is prejudiced by such failure. In the event
that any third party claim covered by this Article 12 is
asserted, and the indemnitee notifies the indemnitor in
accordance with this Section 12.1(c), the indemnitor will
be entitled to participate therein and assume control of
the defense thereof by notice to the indemnitee. The
indemnitee may participate in the defense of such third
party claim at its own expense. The indemnitee shall
cooperate with the indemnitor in such defense. The
indemnitor shall not be liable for any settlement of any
claim, action or proceeding which is effected without the
prior consent of the indemnitor, which consent shall not
be unreasonably withheld. The indemnitor shall not settle
any claim, action, or proceeding covered by this Article
12 in a manner which adversely affects the business
operations of the indemnitee without the prior consent of
the indemnitee, which consent shall not be unreasonably
withheld.
33
The information below marked by * and [] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed
with the Commission.
ARTICLE 13
LIABILITY
13.1 Liability. EXCEPT FOR LIABILITY ARISING UNDER ARTICLE 9 OR ARTICLE
---------
12, IN NO EVENT WILL EITHER PARTY'S LIABILITY TO THE OTHER PARTY
EXCEED [************************************] DOLLARS ($[**********])
["LIABILITY CAP"]. ON THE FIRST DAY OF EACH CONTRACT YEAR (EXCLUDING
THE FIRST CONTRACT YEAR) DURING THE TERM, THE LIABILITY CAP SHALL
AUTOMATICALLY INCREASE BY A PERCENTAGE THAT IS EQUAL TO THE PERCENTAGE
INCREASE, IF ANY, IN THE CONSUMER PRICE INDEX (AS HEREINAFTER DEFINED)
FROM THAT LAST PUBLISHED ON THE FIRST DAY OF THE IMMEDIATELY PRECEDING
CONTRACT YEAR TO THAT LAST PUBLISHED ON THE FIRST DAY OF THE THEN-
CURRENT CONTRACT YEAR. THE CONSUMER PRICE INDEX MEANS THE CONSUMER
PRICE INDEX FOR ALL URBAN CONSUMERS-ST. LOUIS, MO-IL-ALL ITEMS
(1982-84=100), PUBLISHED BY THE BUREAU OF LABOR STATISTICS OF THE
UNITED STATES DEPARTMENT OF LABOR, OR IN THE EVENT OF
DISCONTINUANCE OF THAT INDEX OR SUBSTANTIAL CHANGE IN THE FORMULA
BY WHICH THAT INDEX IS DETERMINED, THEN THE PUBLISHED INDEX MOST
CLOSELY APPROXIMATING THAT INDEX AS THAT INDEX IS DETERMINED AS OF
THE DATE OF THIS AGREEMENT. IN NO EVENT SHALL THE AMOUNT OF THE
LIABILITY CAP FOR ANY CONTRACT YEAR BE LESS THAN THE AMOUNT OF THE
LIABILITY CAP FOR THE PREVIOUS CONTRACT YEAR.
13.2 Damages. EXCEPT FOR LIABILITY ARISING UNDER ARTICLE 9, THE PARTIES
-------
AGREE THAT IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR
PUNITIVE DAMAGES (INCLUDING LOST PROFITS), DIRECTLY OR INDIRECTLY,
RELATING TO OR ARISING OUT OF THIS AGREEMENT REGARDLESS OF THE FORM
OF ACTION, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT
LIABILITY OR OTHERWISE, AND WHETHER OR NOT SUCH DAMAGES WERE
FORESEEN OR UNFORESEEN.
ARTICLE 14
FINANCING
ARTICLE INTENTIONALLY OMITTED
=============================
ARTICLE 15
INDEPENDENT CONTRACTOR
15.1 Independent Contractor. Each Party to this Agreement is an
----------------------
independent contractor; nothing in this Agreement shall be
construed to create a partnership, joint venture or agency
relationship between the Parties. Nothing in this Agreement shall
be interpreted
34
or construed as creating or establishing the relationship of
employer and employee between Laclede and either Cellnet or any
employee, agent, subcontractor or consultant of Cellnet nor between
Cellnet and either Laclede or any employee, agent, subcontractor or
consultant of Laclede. Each Party will be solely responsible for
payment of all compensation owed to its employees, as well as
federal and state income tax withholding, Social Security taxes,
and unemployment insurance applicable to such personnel as
employees of the applicable Party.
ARTICLE 16
ASSIGNMENT
16.1 Assignment. This Agreement will be binding on the Parties and their
----------
respective successors and permitted assigns. Except as provided in
this Section 16.1, neither Party may, or will have the power to,
assign this Agreement without the prior written consent of the
other, which consent shall not be unreasonably withheld or delayed,
except that either Party may assign its rights and obligations
under this Agreement to an Affiliate that expressly assumes such
Party's obligations and responsibilities hereunder, without the
approval of the other Party. Anything herein to the contrary
notwithstanding, Cellnet may assign this Agreement and its rights
hereunder as collateral security to lenders to Cellnet or their
successors and assigns. The assigning Party shall remain fully
liable for, and shall not be relieved from the full performance of,
all obligations under this Agreement. Any attempted assignment that
does not comply with the terms of this Section 16.1 shall be null
and void. If a Party assigns its rights or obligations to an
Affiliate in accordance with this Agreement, such Party shall
promptly provide written notice thereof to the other Party.
ARTICLE 17
AUDIT RIGHTS
17.1 Books and Records. Each Party shall have the right to inspect and
-----------------
audit or have audited the books and records of the other Party
relating to the amounts invoiced hereunder and the monies owed
hereunder for the purpose of verifying the amounts due and payable
hereunder, upon at least ten (10) Business Days notice to the
audited Party. Such audit may cover up to, but no more than, the
two (2) calendar years immediately preceding the date of the audit.
The cost of such audit shall normally be at the requesting Party's
expense; provided, however, that the audited Party will bear the
cost of the audit if the audit reveals, in the case of Laclede, any
overpayment, and in the case of Cellnet, any underpayment, greater
than two percent (2%) of the amount that was actually due for any
twelve-month period. Such audit shall be conducted with a minimum
of disruption to the audited Party's daily operations and during
normal business hours. The requesting Party shall not audit the
audited Party more than once during any twelve-month period during
the Term.
17.2 Subcontracting, Training and Safety. Laclede shall have the right
-----------------------------------
to audit Cellnet's compliance with the obligations set forth in
Section 2.1(d) of this Agreement for the purpose of verifying that
Cellnet is fully complying with all of its obligations with regard
35
to subcontracting, training and safety. Cellnet shall cooperate
with Laclede during the course of such an audit and make all
applicable documentation and materials available to Laclede within
ten (10) Business Days of Laclede's request. Cellnet shall allow
Laclede to perform field audits to the extent Laclede deems
reasonably necessary to confirm Cellnet's compliance with Section
2.1(d). Provided Laclede has not found Cellnet to be out of
compliance with the obligations of Section 2.1(d) during the
immediately preceding twenty-four (24) months, Laclede shall not
audit Cellnet's compliance regarding subcontracting, training or
safety more than once during any twelve-month period during the
Term.
ARTICLE 18
INSURANCE
18.1 Insurance. Prior to the commencement of any work under this
---------
Agreement, Cellnet will obtain, and maintain during the entire
Term, insurance in the following minimum amounts and types:
(a) Commercial or Comprehensive General Liability Insurance
for bodily injury and property damage of not less than
Five Million Dollars ($5,000,000) for each occurrence and
Fifteen Million Dollars ($15,000,000) in the aggregate.
(b) Workers' Compensation Insurance that in all respects
complies with all applicable federal and state laws and
regulations. Cellnet covenants and agrees with Laclede
that Cellnet will carry workers' compensation insurance in
such amount and in such form, and containing such
provisions, as shall protect both Laclede and Cellnet from
all claims, demands, suits, actions, causes of action and
judgments of any actual or alleged agents or employees of
Cellnet resulting from or arising out of any work
performed under or by virtue of this Agreement.
(c) Employer Liability Insurance with limits of not less than
Five Million Dollars ($5,000,000) per occurrence.
(d) Business automobile liability insurance that applies to
all owned, non-owned, hired and leased vehicles used by
Cellnet and/or its employees, subcontractors or agents in
connection with this Agreement. Business automobile
liability insurance shall be provided with a minimum of
Three Million Dollars ($3,000,000) combined single limit
per occurrence.
(e) The policy limits set forth above may be met through an
umbrella liability insurance policy.
18.2 Intentionally Omitted.
---------------------
18.3 Subcontractors' Insurance. Cellnet shall cause each of its
-------------------------
subcontractors to obtain, and maintain at all times while
performing work under this Agreement, insurance in the following
minimum amounts and types:
36
(a) Commercial or Comprehensive General Liability Insurance
for bodily injury and property damage of not less than
Five Million Dollars ($5,000,000) for each occurrence and
Fifteen Million Dollars ($15,000,000) in the aggregate.
(b) Workers' Compensation Insurance that in all respects
complies with all applicable federal and state laws and
regulations in such amount and in such form, and
containing such provisions, as shall protect Laclede,
Cellnet and Cellnet's subcontractor from all claims,
demands, suits, actions, causes of action and judgments of
any actual or alleged agents or employees of Cellnet's
subcontractor resulting from or arising out of any work
performed under or by virtue of this Agreement.
(c) Employer Liability Insurance with limits of not less than
Five Million Dollars ($5,000,000) per occurrence.
(d) Business automobile liability insurance that applies to
all owned, non-owned, hired and leased vehicles used by
Cellnet's subcontractor and/or its employees,
subcontractors or agents in connection with this
Agreement. Business automobile liability insurance shall
be provided with a minimum of Three Million Dollars
($3,000,000) combined single limit per occurrence.
(e) The policy limits set forth above may be met through an
umbrella liability insurance policy.
18.4 Policy Provisions. All of the aforesaid insurance shall include
-----------------
Laclede as an additional insured (excluding the coverage described
in Section 18.2), be endorsed to be primary and without right of
contribution from any insurance that Laclede may have in effect and
be written by one or more insurance companies that is or are (i)
licensed and authorized to do business in the State of Missouri,
and (ii) rated A - VIII or higher by A.M. Best Company. All
policies shall contain a provision that the insurance company will
provide Laclede with written notice of any cancellation of, or
modification to, the policy. The consent of Laclede to the amount
of insurance specified shall not be considered as a limitation of
Cellnet's liability under this Agreement nor an agreement by
Laclede to assume liability in excess of said amount or for risks
not insured against. Cellnet shall provide proof of the
above-described insurance to Laclede annually on or before the
first day of each Contract Year.
18.5 Periodic Review of Policy Limits. On or about the fifth (5th) and
--------------------------------
tenth (10th) anniversaries of the Effective Date, Cellnet and
Laclede shall review and discuss the continuing adequacy of the
limits of the various insurance policies required by this Article
18. In connection with this review, the parties shall consider,
among other things, whether the policy limits are adequate in light
of actual loss experience and/or whether the limits are equal to,
or greater than, limits that are ordinary and customary in the
automated meter reading industry. To the extent the limits are
determined to be inadequate based on either of these factors, or
any other factors deemed relevant in the reasonable judgment of the
parties, Cellnet shall increase such policy limits accordingly;
provided that Cellnet shall be required to obtain such increased
coverage only to the
37
extent it is available on commercially reasonable terms. In no
event shall the limits of the policies be reduced.
ARTICLE 19
DISPUTE RESOLUTION
19.1 Dispute Procedure.
-----------------
(a) Any dispute between the Parties either with respect to the
interpretation of any provision of this Agreement or with
respect to the performance by Cellnet or by Laclede
hereunder shall be resolved as specified in this Section
19.1.
(b) Upon the written request of either Party to the other
Party ("Written Request"), a dispute shall be discussed by
the Parties. The Parties shall meet as often as necessary
to gather and furnish to each Party all information with
respect to the matter at issue that is appropriate and
germane in connection with its resolution. The Parties
shall discuss the problem and negotiate in good faith in
an effort to resolve the dispute without the necessity of
any formal proceeding relating thereto.
(c) If the dispute is not resolved within thirty (30) days
after the date of the Written Request, then the dispute
shall be escalated to a Vice President of Laclede and the
Chief Operating Officer of Cellnet for their review within
forty-five (45) days after the date of the Written
Request.
(d) If the dispute is not resolved as described in (c) above
within sixty (60) days after the date of the Written
Request, the dispute will be referred to mandatory
mediation with the American Arbitration Association
("AAA") or other organization mutually agreeable to the
Parties, at a mutually agreed location in St. Louis,
Missouri. The Parties will agree upon the selection of a
particular mediator as soon as reasonably practical, but
failing such agreement within thirty (30) days after the
issue is referred for mediation, the mediator will be
selected by AAA. Any mediator so selected shall have
substantial experience in the area of information
technology infrastructure outsourcing and the energy
industry.
(e) With the exception of applications to courts of competent
jurisdiction for injunctive relief or any dispute relating
to intellectual property rights, the Parties stipulate
that the submission of disputes to mediation as provided
in this Section 19.1, and mediation pursuant thereto,
shall be a condition precedent to any suit, action or
proceeding instituted in any court or before any
administrative tribunal with respect to such dispute. The
mediation provisions hereof shall, with respect to any
dispute arising out of this Agreement, survive the
termination or expiration of this Agreement.
(f) The Parties shall use reasonable effort to set the date of
the mediation within sixty (60) days after selection of
the mediator but in no event shall the mediation be set
38
more than ninety (90) days after selection of the
mediator. Each Party shall bear its own mediation costs
and expenses and all other costs and expenses of the
mediation shall be divided equally between the Parties.
(g) Notwithstanding any other provision of this Section 19.1,
either Party may resort to court action for injunctive
relief at any time if the dispute relates to intellectual
property rights or the dispute resolution processes set
forth in this Section 19.1 would permit or cause
irreparable injury to such Party or any third party
claiming against such Party, due to delay arising out of
the dispute resolution process.
19.2 Continued Performance. So long as Laclede continues to pay Cellnet
---------------------
the Fees for the AMR Services in accordance with the terms of this
Agreement, the Parties agree to continue performing their
respective obligations under this Agreement while the dispute is
being resolved, unless and until such obligations are terminated or
expire in accordance with the provisions of this Agreement.
ARTICLE 20
GENERAL PROVISIONS
20.1 Cooperation by Cellnet and Laclede. Both Cellnet and Laclede shall
----------------------------------
cooperate with each other to facilitate performance of the AMR
Services and Laclede's operations affected by Cellnet and shall
each timely provide information to the other as required for each
to perform its responsibilities regarding the AMR Services.
20.2 Meetings and Presentations. Cellnet shall, at Laclede's request, at
--------------------------
no additional charge: (a) accompany Laclede to any meetings with
the PSC and/or Office of Public Counsel (OPC), or other regulatory
agencies to explain the technology that is the subject of this
Agreement and provide any written information that may be requested
by these agencies in connection with these meetings or otherwise;
and (b) demonstrate the technology that is the subject of this
Agreement to the PSC and/or OPC or other regulatory agency;
provided, however, that after the Deployment Deadline, Cellnet
shall not, without its consent, be required to spend more than
twenty (20) hours per annum performing these services.
20.3 No Solicitation of Employees. During the Term and for 12 months
----------------------------
after the expiration or earlier termination of this Agreement,
neither Party to this Agreement shall solicit or otherwise seek to
hire, whether as an employee or consultant, any persons employed by
the other Party. Notwithstanding the foregoing, either Party shall
have the right to hire as an employee or consultant any such person
who approaches such Party for employment or who responds to a
general advertisement soliciting employees.
20.4 Governing Law. This Agreement and any and all claims and disputes
-------------
arising out of or in connection with or related to the
relationships and arrangements between Laclede and Cellnet
described in this Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri, without regard
to its conflict of law principles. The prevailing Party in any suit
brought to enforce or interpret this Agreement shall be
39
entitled to recover its reasonable attorney's fees and related
disbursements in addition to any other relief awarded.
20.5 Publicity. Within four (4) days after the Effective Date, the
---------
Parties shall prepare and release a mutually acceptable press
release announcing this Agreement and/or the Parties' contemplated
business relationship. As an obligation of this Agreement, each
Party agrees that it will not, without the prior written consent of
the other in each instance: (i) use the name, trade name,
trademark, trade device, service mark, logo, symbol or any
abbreviation, contraction or simulation thereof, owned by the other
Party (the "Marks") in any advertising, marketing, promotional
materials, publicity, press release, references, internet posting
or otherwise, or (ii) represent, directly or indirectly, that any
product or service offered by any Party has been approved or
endorsed by the other. These obligations will survive the
expiration or other termination of this Agreement.
20.6 Entire Agreement. This Agreement and the Exhibits referenced herein
----------------
constitute the entire agreement of the Parties with regard to the
services and matters addressed therein, and all prior agreements,
letters, proposals, discussions and other documents regarding the
services and the matters addressed in the Agreement are superseded
and merged into this Agreement. Amendments and modifications to
this Agreement may not be made orally, but shall only be made by a
written document signed by an authorized representative of each
Party. Any terms and conditions varying from this Agreement on
any order or written notification from either Party shall not be
effective or binding on the other Party.
20.7 Force Majeure. Neither Party shall be liable for any default or
-------------
delay in the performance of its obligations hereunder if and to the
extent and while such default or delay is caused, directly or
indirectly, by a Force Majeure Event. If a Force Majeure Event
occurs, the non-performing Party will be excused from any further
performance or observance of the obligation(s) so affected for as
long as such circumstances prevail and such Party continues to use
commercially reasonable efforts to recommence performance or
observance whenever and to whatever extent possible without delay.
Any Party so delayed in its performance will immediately notify the
other by telephone and describe at a reasonable level of detail the
circumstances causing such delay (to be confirmed in writing within
twenty-four (24) hours after the inception of such delay). If any
delay on the part of either Party resulting from a Force Majeure
Event exceeds sixty (60) days, the other Party shall have the right
to terminate this Agreement on notice to the delayed Party.
20.8 Waiver. No waiver of any breach of any provision of this Agreement
------
shall constitute a waiver of any prior, concurrent or subsequent
breach of the same or any other provisions hereof.
20.9 Severability. If any provision of this Agreement shall be held to
------------
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and such provision shall be deemed to
be restated to reflect the Parties' original intentions as nearly
as possible in accordance with applicable law(s).
40
20.10 Counterparts. This Agreement may be executed in counterparts. Each
------------
such counterpart shall be an original and together shall constitute
but one and the same document.
20.11 Notices. All notices required to be sent under this Agreement,
-------
including notices of address changes, shall be sent by registered
or certified mail, return receipt requested, by nationally
recognized overnight delivery service or courier, or by facsimile.
Notice to each Party shall be sent to the contacts listed below or
as otherwise identified by the Parties in writing pursuant to this
Section:
If to Laclede: Laclede Gas Company
Attn: Laclede AMR Program Manager
720 Olive Street
12th Floor
St. Louis, MO 63101
Phone: (314) 342-0620
Fax: (314) 241-2296
With a Copy to: Laclede Gas Company
Attn: Vice President - Finance
720 Olive Street
Suite 1301
St. Louis, MO 63101
Phone: (314) 342-0755
Fax: (314) 241-2278
With a Copy to: Laclede Gas Company
Attn: General Counsel
720 Olive Street
Suite 1500
St. Louis, MO 63101
Phone: (314) 342-0520
Fax: (314) 421-1979
If to Cellnet: Cellnet Technology, Inc.
Attn: Program Manager
1918 Innerbelt Business Center Drive
Overland, Missouri 63114
Phone: (314) 264-2633
Fax: (314) 264-2601
41
With a Copy to: Cellnet Technology, Inc.
Attn: General Counsel
30000 Mill Creek Avenue
Suite 100
Alpharetta, Georgia 30022
Phone: (678) 258-1608
Fax: (678) 258-1686
20.12 No Third Party Beneficiaries. Except as expressly provided herein,
----------------------------
the Parties do not intend, nor will any Section hereof be
interpreted, to create any third party beneficiary rights with
respect to either of the Parties.
20.13 Consents and Approvals. The Parties agree that in any instance
----------------------
where a consent, approval, acceptance or agreement is required or
contemplated of a Party under this Agreement in order for the other
Party to perform under or comply with the terms and conditions of
this Agreement, then such Party will, unless otherwise provided,
not unreasonably withhold or delay such consent, approval,
acceptance or agreement and where consent, approval or agreement
cannot be provided, the Party shall notify the other Party in a
timely manner. In addition, each Party agrees to act reasonably and
in good faith in respect to all other matters relating to or
arising out of this Agreement.
20.14 Taxes. Cellnet shall be solely responsible for all federal, state
-----
and local income taxes assessed in connection with the provision of
the services described in this Agreement.
Cellnet shall be responsible for all sales and use taxes imposed in
connection with the use or provision of the AMR Services, as well
as personal property or similar taxes imposed in connection with
the MIUs.
20.15 Headings. All headings herein and the table of contents are not to
--------
be considered in the construction or interpretation of any
provision of this Agreement. This Agreement was drafted with the
joint participation of both Parties and shall be construed neither
against nor in favor of either, but rather in accordance with the
fair meaning thereof.
20.16 Survival. All provisions of this Agreement relating to liability,
--------
warranties, indemnities, confidentiality, or non-disclosure, and
the provisions of Articles 5, 19 and 20 and Section 11.3 of this
Agreement, shall survive the expiration or termination of this
Agreement.
20.17 Time is of the Essence. Time is of the essence in this Agreement.
----------------------
Both parties shall work diligently to perform their respective
obligations under this Agreement in a timely and expedient manner.
Subject to the occurrence of a Force Majeure Event and any
applicable cure period specified herein, in cases in which time
deadlines are established for the performance of specific
activities, these deadlines shall be treated as outer time limits
for the parties' performance and not as target dates for
performance. In all cases, the parties shall use reasonable effort
to complete activities as soon as practicable.
42
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
to be executed and delivered by their duly authorized representatives, as of
the date first written above.
LACLEDE GAS COMPANY CELLNET TECHNOLOGY, INC.
By: /s/ Barry C. Cooper By: /s/ Mike Zito
Name: Barry C. Cooper Name: Mike Zito
Title: Chief Financial Officer Title: CEO
Date: March 11, 2005 Date: March 2, 2005
43
APPENDIX A
INDEX OF DEFINITIONS
The terms used herein shall have the following meanings.
1. Accessible Meter - is any Laclede Gas Meter (i) of a type listed on
----------------
Exhibit 5-C; (ii) with respect to which the data provided to
-----------
Cellnet pursuant to Section 2.3(g) does not preclude Cellnet from
installing the MIU; (iii) not obstructed or blocked in a manner
that prohibits reasonable access; (iv) the condition of which does
not make installation of the MIU impractical in terms of time or
expense; and (v) Cellnet or the MIU Installer has access to the
premises and the Laclede Gas Meter. For purposes of clarity, a
Laclede Gas Meter is not an Accessible Meter if Cellnet or the MIU
Installer contacts the occupant on six occasions as required by
Section 2.1(c)(ii)(A) but is unable to install a MIU or schedule an
appointment for MIU installation where access to the Laclede Gas
Meter is not available without the cooperation of the occupant or
owner of the premises.
2. Actual Read - Information relating to the actual measurement of gas
-----------
usage received by the Fixed Network.
3. Activated Meter - is a Laclede Gas Meter that is on an activated
---------------
Route, that has a MIU installed, on which Cellnet has received the
designation and installation information via the Cellnet Standard
Interface; and from which Cellnet has received a successful meter
read. For purposes of this definition, a meter shall not be
considered an Activated Meter if it is an Unavailable Meter.
4. Affiliate - With respect to a Party to this Agreement, any person
---------
or entity that controls, is controlled by, or is under common
control with such Party.
5. Agreement - This Automated Meter Reading Services Agreement between
---------
Cellnet Technology, Inc. and Laclede Gas Company.
6. Asset Fee - Defined in Section 2.3(a).
---------
7. Automated Meter Reading Services ("AMR Services") - The services to
-------------------------------------------------
be provided under this Agreement.
8. Bankruptcy Code - The United States Bankruptcy Code, as amended.
---------------
9. Billing Window - A five (5) day period of time prior to the
--------------
scheduled billing day that a meter reading can be made available by
Cellnet and entered into Laclede's billing system.
10. Business Day - Monday through Friday, excluding all federal and
------------
state holidays for which banks in the State of Missouri are not
open for business, from the hours of 8 a.m. to 8 p.m. Unless
specified as a Business Day, a day is defined as a calendar day.
11. Cellnet Intellectual Property - Defined in Section 4.1.
-----------------------------
44
12. Cellnet Standard Interface - The format of the Fixed Network Data
--------------------------
made available to Laclede via the FTP Server.
13. Change - Defined in Section 7.1.
------
14. Change Order - Defined in Section 7.2(a).
------------
15. Confidential Information - Defined in the Section 9.1.
------------------------
16. Contract Year - Each period of twelve (12) consecutive months with
-------------
the first such year beginning on the Effective Date.
17. Daily Reliability Penalty - The monetary penalty assessed by
-------------------------
Laclede against Cellnet for the failure by Cellnet to achieve the
respective required daily reliability percentages set forth in
Section 2.2(d) of this Agreement.
18. Deployment Deadline - Twenty-four (24) months after the Effective
-------------------
Date.
19. Deployment Period - The period during which Cellnet is installing
-----------------
the MIUs as described in Article 2.
20. Deployment Schedule - The timeline for the initial installation of
-------------------
the Fixed Network as determined by mutual agreement of the Parties.
21. Disclosing Party - Defined in Section 9.1.
----------------
22. Effective Date - Defined in Section 2.7.
--------------
23. Fee - Defined in Section 2.3(a).
---
24. Fixed Network - The network to be established and operated by
-------------
Cellnet, which includes MIUs installed on Laclede Gas Meters, MCCs
installed on structures, poles and/or towers, the NOC, the
communication link between the MCCs and the NOC, and all other
equipment necessary for the operation of the Fixed Network.
25. Fixed Network Area - Defined in the fourth Recital.
------------------
26. Fixed Network Data - All MIU consumption and tamper information
------------------
collected or processed for Laclede through the Fixed Network.
27. Fixed Network Meter - Any Laclede Gas Meter within the Fixed
-------------------
Network Area with an installed MIU.
28. FTP Server - Means the file transfer protocol server on which
----------
Cellnet posts the Fixed Network Data for collection by Laclede.
29. Force Majeure Event - Any event or circumstance that is beyond the
-------------------
reasonable control of either Party and that results in or causes
the failure of that Party to perform any of its
45
obligations under this Agreement, including, without limitation, an
act of God, judicial or regulatory action or inaction, strike or
lockout, war (declared or undeclared), threat of war, terrorist
act, blockade, revolution, riot, insurrection, sabotage, vandalism,
fire, storm, flood, earthquake, hurricane, tornado, explosion or
failure of communications or power systems, or radio frequency
interference caused by third parties. Lack of funds shall not be
interpreted as an event beyond a Party's reasonable control.
Nothing contained herein shall be construed to require either Party
to avoid or settle a strike against its will or to avoid picketing
at any location.
30. Initial Fixed Network Deployment Phase - Defined in Section 1.1.
--------------------------------------
31. Initial Term - Defined in Section 2.7.
------------
32. Insolvent Entity - A Party that (a) institutes or has instituted
----------------
against it proceedings to be adjudicated bankrupt or insolvent,
unless with respect to the institution against it of such
proceedings, such proceedings are dismissed within sixty (60)
calendar days after the institution of such proceedings, (b)
consents to the institution of bankruptcy or insolvency proceedings
against it, (c) files a petition, answer or consent seeking
reorganization or relief under federal or state bankruptcy laws,
(d) consents to the filing of any such petition or the appointment
of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) with respect to itself for any substantial
part of its property, (e) makes an assignment for the benefit of
creditors, or (f) admits in writing its inability to pay its debts
generally as they become due.
33. Intellectual Property - All copyrights, patents, utility models,
---------------------
trade marks, service marks, design rights (whether registered or
unregistered), database rights, semiconductor topography rights,
proprietary information rights, know-how and all other similar
proprietary rights as may exist anywhere in the world.
34. Laclede Gas Data - All information relating to Laclede customers'
----------------
gas usage, including, without limitation, customers' names,
addresses and account numbers, volume and/or patterns of gas usage,
MIU identification, meter number, number of pulses counted, index
type, index drive factor, index pressure, index base pressure and
tamper flag, and any other Laclede gas customer data or information
collected and/or transmitted via the Fixed Network.
35. Laclede Gas Meters - All gas meters owned and/or operated by
------------------
Laclede.
36. Laclede Interface - Defined in Section 1.2(b).
-----------------
37. Manual Reads. Any references to manual meter reads, the manual
------------
reading of meters, or similar language in this Agreement means
either the actual physical reading of the meter or the reading of
the meter/MIU utilizing Cellnet's park-n-read system or other
mobile or drive-by method.
38. Marks - Defined in Section 20.5.
-----
46
39. Material Change - Defined in Section 7.1.
--------------
40. Meter Database (MDB) - The repository of all meter data received by
--------------------
the NOC. The MDB will contain the Fixed Network Data and the
Laclede Gas Data.
41. MCC - The radio transceiving device or devices that receives the
---
transmissions from the MIUs and relays the data by radio frequency
to the NOC.
42. MIU - An electronic radio meter interface device that is installed
---
on Laclede Gas Meters and transmits meter reading information by
radio frequency to the MCCs.
43. MIU Installer - Defined in Section 1.3(c).
-------------
44. Minimum Daily Reliability Penalty - The monetary penalty assessed
---------------------------------
by Laclede against Cellnet for the failure by Cellnet to achieve
the respective minimum daily reliability percentages set forth in
Section 2.2(d) of this Agreement.
45. Minimum Monthly Reliability Penalty - The monetary penalty assessed
-----------------------------------
by Laclede against Cellnet for the failure by cellnet to achieve
the respective minimum reliability percentages for each billing day
set forth in Section 2.2(d) of this Agreement.
46. Monthly Reliability Penalty - The monetary penalty assessed by
---------------------------
Laclede against Cellnet for the failure by Cellnet to achieve the
respective required monthly reliability percentages set forth in
Section 2.2(d) of this Agreement.
47. Network Operations Center ("NOC") - The combined hardware and
---------------------------------
software platform that receives and stores meter information from
the MCCs.
48. Network Operations Center Software ("NOC Software") - The software
---------------------------------------------------
necessary for the operation of the NOC.
49. Party or Parties - Means Cellnet and/or Laclede.
----------------
50. Per Read Fee - Defined in Section 2.3(a).
------------
51. Programming Software - The GPrep MIU programming software, which is
--------------------
developed by or for Cellnet, as described in Section 2.1 (f).
52. Public Service Commission (PSC) - PSC or any successor agency with
-------------------------------
regulatory authority over Laclede in the State of Missouri.
53. Quality Assurance Plan - The procedures defined and used to ensure
----------------------
installation of MIUs are in compliance with the terms of this
Agreement.
54. Recipient - Defined in Section 9.1.
---------
47
55. Reliability Penalty - The collective reference for the Daily
-------------------
Reliability Penalty, Minimum Daily Reliability Penalty, Monthly
Reliability Penalty and Minimum Monthly Reliability Penalty.
56. Requesting Party - Defined in Section 7.2(a).
----------------
57. Responding Party - Defined in Section 7.2(a).
----------------
58. Routes - The various geographical areas containing approximately
------
250 to 600 Laclede Gas Meters each agreed upon by Laclede and
Cellnet into which Laclede's service territory will be divided for
purposes of the initial installation of the MIUs.
59. Intentionally Omitted.
---------------------
60. Standard Interface Specifications - Defined in Section 1.2(b).
---------------------------------
61. Term - The Initial Term and all renewal terms, if any.
----
62. Test Meters - Defined in Section 1.2(a).
-----------
63. Training Plan - Defined in Section 6.1.
-------------
64. Transition Services - Defined in Section 11.3(d)(i).
-------------------
65. Unavailable Meter - Means a Laclede Gas Meter (i) that is damaged
-----------------
or vandalized by any person other than Cellnet in such a way that
prevents proper operation, including communication with the Fixed
Network, of the MIU; (ii) on which a MIU is not functioning and/or
not reporting and Cellnet has not been able to repair the MIU
because (a) Laclede has not provided Cellnet with accurate and
up-to-date customer information; or (b) physical access to the
Laclede Gas Meter, after commercially reasonable efforts by
Cellnet, is not available; or (iii) that is otherwise not
functioning because of a cause unrelated to the MIU, which is
outside of Cellnet's control.
66. Written Request - Defined in Section 19.1(b).
---------------
48
EXHIBIT 6
ADJUSTMENT TO MONTHLY MIU FEE
The Monthly MIU Fee shall be adjusted in accordance with this
Exhibit 6.
(a) For purposes of this Exhibit 6, the following capitalized terms
have the respective meanings set forth below:
"Number of MIUs Condemned", for a given Contract Year, equals the number of
------------------------
Laclede Gas Meters with MIUs removed from service in such Contract Year that
Laclede is not able to reuse on other Laclede Gas Meters.
"Number of MIUs Reconditioned", for a given Contract Year, equals the number
----------------------------
of MIUs (of the Number of MIUs Condemned) that Cellnet is able to
recondition and reuse for other than Laclede Gas Meters in such Contract
Year. The Number of MIUs Reconditioned includes MIUs that were retired in a
previous Contract Year, held in inventory, and subsequently reconditioned
and reused.
"Net Number of MIUs Retired", for a given Contract Year, equals the Number
--------------------------
of MIUs Condemned minus the Number of MIUs Reconditioned in such Contract
Year.
"Number of MIU Startups", for a given Contract Year, equals the number of
----------------------
MIUs provided by Cellnet for installation on Laclede Gas Meters in such
Contract Year, excluding the number of MIUs Cellnet is required to replace
under the terms of this Agreement.
"MIU Retirement Unit Cost", for a given Contract Year, equals the amount in
------------------------
the row so named for such Contract Year in the chart attached as Appendix A.
----------
"MIU Startup Unit Cost", for a given Contract Year, equals the amount in the
---------------------
row so named for such Contract Year as shown on Appendix A.
----------
"Number of Annual Reads" equals the actual number of MIU readings that were
----------------------
subject to the Per Read Fee in a given Contract Year.
"Total Annual Reconditioning Cost", for a given Contract Year, equals the
--------------------------------
Number of MIUs Reconditioned multiplied by $5.
"Total Annual Retirement Cost", for a given Contract Year, equals the Net
----------------------------
Number of MIUs Retired multiplied by the MIU Retirement Unit Cost.
"Total Annual Startup Cost", for a given Contract Year, equals the Number of
-------------------------
MIU Startups multiplied by the MIU Startup Unit Cost.
The information below marked by * and [] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed
with the Commission.
"Total Actual Annual Cost", for a given Contract Year, equals the sum of (i)
------------------------
the Total Annual Reconditioning Cost for such Contract Year, (ii) the Total
Annual Retirement Cost for such Contract Year, and (iii) the Total Annual
Startup Cost for such Contract Year.
"Total Projected Annual Cost", for a given Contract Year, equals the amount
---------------------------
in the row "Total Projected Cost" for such Contract Year in the chart
attached as Appendix A.
----------
"Annual Cost Differential", for a given Contract Year, equals the difference
------------------------
between the Total Actual Annual Cost for such Contract Year and the Total
Projected Annual Cost for such Contract Year.
"Cumulative Actual Annual Cost" equals the sum of Total Actual Annual Costs
-----------------------------
for Contract Years that have not been included in a calculation that
resulted in an increase or decrease in the Monthly MIU Fee pursuant to
Section (b) of this Exhibit 6.
"Cumulative Projected Annual Cost" equals the sum of Total Projected Annual
--------------------------------
Costs for Contract Years that have not been included in a calculation that
resulted in an increase or decrease in the Monthly MIU Fee pursuant to
Section (b) of this Exhibit 6.
"Cumulative Annual Cost Differential" equals the Cumulative Actual Annual
-----------------------------------
Cost less the Cumulative Projected Annual Cost.
"Reconditionable MIU", means a MIU that Laclede removes from a Laclede Gas
-------------------
Meter and is not able to reuse, but for which Cellnet has indicated in
writing that it has another customer that has a gas meter or gas meters with
which such a MIU is compatible and who is willing to accept reconditioned
MIUs. Cellnet shall provide a list of meter types on which it can utilize a
Reconditionable MIU within 30 days of the execution of this Agreement and
update or confirm such list from time to time, but at least annually within
30 days after the first day of each Contract Year.
(b) If the Cumulative Annual Cost Differential is greater than
$[*******], the Monthly MIU Fee shall be increased or decreased (as
applicable) in accordance with the procedures set forth below. If the
Cumulative Annual Cost Differential is less than or equal to $[*******],
there shall be no increase or decrease in the Monthly MIU Fee pursuant to
this Exhibit 6.
(c) If the Cumulative Actual Annual Cost exceeds the Cumulative
Projected Annual Cost by more than $[*******], or if the Cumulative
Projected Annual Cost exceeds the Cumulative Actual Annual Cost by more than
$[*******], the Monthly MIU Fee for future reads shall be increased or
decreased, as applicable, as follows:
(i) First, the Cumulative Annual Cost Differential shall
be amortized over the remaining number of months of this Agreement at an
annual interest rate of [*]% to determine a monthly payment amount.
Such monthly payment amount will be multiplied by the number of months
remaining on this Agreement to determine the "Future Value of the Cumulative
------------------------------
Annual Cost Differential";
- ------------------------
The information below marked by * and [] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed
with the Commission.
(ii) Second, the "Total Number of Remaining Reads" shall
-------------------------------
be determined as follows. The Number of Annual Reads for the previous
Contract Year (the "Base Year") will be used as a base-line and the number
---------
of reads for each subsequent Contract Year ("Number of Assumed Reads") will
-----------------------
assume a [*]% increase over each immediately preceding Contract Year. For each
Contract Year, the Number of Assumed Reads for such Contract Year shall
equal the Number of Assumed Reads for the previous Contract Year multiplied
by [****]. The "Total Number of Remaining Reads" shall be (A) the sum of the
-------------------------------
Number of Assumed Reads for each Contract Year (if any) subsequent to the
Base Year, less (B) the product of a fraction whose numerator is an amount
equal to the number of months in the first Contract Year subsequent to the
Base Year prior to implementation of the increase or decrease to the Monthly
MIU Fee and whose denominator is 12, multiplied by the Assumed Reads in such
Contract Year;
(iii) Third, determine the "Read Cost Differential" by
----------------------
dividing the Future Value of the Cumulative Annual Cost Differential by the
Total Number of Remaining Reads and rounding the result to tenths of a cent;
and
(iv) Fourth,
(A) If the Cumulative Actual Annual Cost exceeds
the Cumulative Projected Annual Cost by more than $[*******], the Monthly
MIU Fee for future reads shall be increased by an amount equal to the Read
Cost Differential, or
(B) If the Cumulative Projected Annual Cost
exceeds the Cumulative Actual Annual Cost by more than $[*******], the
Monthly MIU Fee for future reads shall be decreased by an amount equal to
the Read Cost Differential.
(C) In the event the Monthly MIU Fee is increased
or decreased as described above in this subsection (c)(iv), then the
cumulative cost calculation described in this Exhibit 6 is started over at
zero for the next Contract Year.
(v) Solely for purposes of reference, an example of the
foregoing four-step calculation is attached as Appendix B.
----------
(d) There shall be no adjustment under this Exhibit 6 for the
first, second, or third Contract Year. The first adjustment to the Monthly
MIU Fee described in this Exhibit 6 shall be calculated at the beginning of
the fourth Contract Year (which will commence during 2008) using the third
Contract Year as the Base Year and then again for every Contract Year
thereafter, and if applicable, the Monthly MIU Fee for the next Contract
Year will be increased or decreased, as applicable, from the Monthly MIU Fee
for the Base Year, as such Monthly MIU Fee has been previously adjusted, if
applicable, in accordance with this Exhibit 6.
(e) Notwithstanding anything contained in this Exhibit 6 or the
Agreement to the contrary, if the Cumulative Annual Cost Differential is
greater than $[*******], the Read Cost Differential shall be calculated
assuming a Cumulative Annual Cost Differential of $[*******]. The excess
Cumulative Annual Cost Differential over $[*******] shall be
paid by Laclede to Cellnet (if the Cumulative Actual Annual Cost exceeds the
Cumulative Projected Annual Cost),
or by Cellnet to Laclede (if the Cumulative Projected Annual Cost exceeds
the Cumulative Actual Annual Cost) within 30 days after the final
determination of the Cumulative Annual Cost Differential.
(f) During the term of the Agreement, not later than 30 days after
the end of each month, Laclede shall send a statement to Cellnet showing the
Number of MIUs Condemned in the previous month. Laclede shall, at its own
cost and expense, ship all Reconditionable MIUs to Cellnet's facility in
Laclede's service area.
(g) Not later than 45 days after the first day of each Contract
Year (beginning in 2008), Cellnet shall deliver a certificate (the
"Certificate") to Laclede setting forth the adjustment to the Monthly MIU
-----------
Fee (if any) for such Contract Year, or stating that no adjustment is
required, along with supporting calculations in reasonable detail. If,
within 30 days after delivery of the Certificate, Laclede alleges that the
Certificate has not been prepared in accordance with this Exhibit 6 or that
the Certificate contains a mathematical mistake or other error, Laclede
shall deliver to Cellnet within such period a written notice (a "Notice of
---------
Disagreement") specifying in reasonable detail all disputed items and the
- ------------
basis therefor, including reasonable detail. Subject to the rights described
in Article 17, the failure by Laclede to provide a Notice of Disagreement to
Cellnet within such 30-day period will constitute the acceptance by Laclede
of the Certificate, and in such event the calculations and other
determinations set forth in the Certificate shall be the final calculations
and other determinations for the Contract Year in question. During the
15-day period following the delivery of any Notice of Disagreement or such
longer period as Cellnet and Laclede shall mutually agree, representatives
of Cellnet and Laclede shall meet and seek in good faith to resolve in
writing any differences that Cellnet and Laclede may have with respect to
the matters specified in such Notice of Disagreement. If, at the end of such
15-day period (or such longer period as mutually agreed), Cellnet and
Laclede have not resolved such differences, the dispute shall be submitted
to the dispute resolution procedure contained in Sections 19.1(d), (e), (f)
and (g) of the Agreement.
(h) Notwithstanding the adjustments provide for in this Exhibit 6,
the parties shall use commercially reasonable efforts to maximize the use of
reconditioned MIUs.
The information below marked by * and [] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed
with the Commission.
APPENDIX A
PROJECTED COST OF STARTUP AND RETIREMENT ACTIVITY
YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9
------ ------ ------ ------ ------ ------ ------
NET MIUS RECONDITIONED [***] [***] [***] [***] [***] [***] [***]
MIU RECONDITIONING UNIT COST $ [*] $ [*] $ [*] $ [*] $ [*] $ [*] $ [*]
MIU RECONDITIONING ANNUAL COST $ [*****] $ [*****] $ [*****] $ [*****] $ [*****] $ [*****] $ [*****]
NET MIUS RETIRED [*****] [*****] [*****] [*****] [*****] [*****] [*****]
MIU RETIREMENT UNIT COST $ [*****] $ [*****] $ [*****] $ [*****] $ [*****] $ [*****] $ [*****]
MIU RETIREMENT ANNUAL COST $ [*******] $ [*******] $ [*******] $ [*******] $ [******] $ [******] $ [******]
MIU STARTUP UNITS [*****] [*****] [*****] [*****] [*****] [*****] [*****]
MIU STARTUP UNIT COST $ [****] $ [****] $ [****] $ [*****] $ [*****] $ [*****] $ [*****]
MIU STARTUP ANNUAL COST $ [*] $ [*] $ [*] $ [*******] $ [*******] $ [*******] $ [*******]
----------------------------------------------------------------------------------------------
TOTAL PROJECTED COST $ [*******] $ [*******] $ [*******] $ [*******] $ [******] $ [******] $ [******]
==============================================================================================
YEAR 10 YEAR 11 YEAR 12 YEAR 13 YEAR 14 YEAR 15
------- ------- ------- ------- ------- -------
NET MIUS RECONDITIONED [***] [***] [***] [***] [***] [***]
MIU RECONDITIONING UNIT COST $ [*] $ [*] $ [*] $ [*] $ [*] $ [*]
MIU RECONDITIONING ANNUAL COST $ [*****] $ [*****] $ [*****] $ [*****] $ [*****] $ [*****]
NET MIUS RETIRED [*****] [*****] [*****] [*****] [*****] [*****]
MIU RETIREMENT UNIT COST $ [*****] $ [****] $ [****] $ [****] $ [****] $ [****]
MIU RETIREMENT ANNUAL COST $ [******] $ [*] $ [*] $ [*] $ [*] $ [*]
MIU STARTUP UNITS [*****] [*****] [*****] [*****] [*****] [*****]
MIU STARTUP UNIT COST $ [*****] $ [*****] $ [*****] $ [*****] $ [*****] $ [*****]
MIU STARTUP ANNUAL COST $ [*******] $ [*******] $ [*******] $ [*******] $ [*******] $ [*******]
--------------------------------------------------------------------------------
TOTAL PROJECTED COST $ [*******] $ [*******] $ [*******] $ [*******] $ [*******] $ [*******]
================================================================================
The information below marked by * and [] has been omitted pursuant to a request
for confidential treatment. The omitted portion has been separately filed
with the Commission.
EXHIBIT 8
PER READ FEE COMPONENTS
Monthly MIU Asset Fee $[*****]/meter
Base Cost Fee $[*****]/meter
TOTAL MONTHLY MIU FEE $[*****]/METER
Monthly Service Fee $[*****]/meter
TOTAL MONTHLY FEE $[*****]/METER