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EXHIBIT 10.20
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WARRANTY AND MAINTENANCE AGREEMENT
dated as of March 30, 2000
by and between
DATACOM INFORMATION SYSTEMS, LLC
AND
ITRON, INC.
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TABLE OF CONTENTS
Page
Section 1 Definitions............................................................1
Section 2 Itron Services.........................................................8
2.1 Standard Services......................................................8
2.2 Software Releases and Support..........................................8
2.3 Technical Support......................................................9
2.4 Fixed Network Installation, Investigation and Maintenance.............10
2.5 Fixed Network Expansion...............................................11
2.6 Additional Charge for Standard Services...............................12
2.7 Failure to Perform Standard Services..................................13
2.8 Supplemental Services.................................................14
2.9 Warranties and Performance Standards..................................16
2.10 Personnel Qualifications..............................................17
2.11 Interference with DataCom's Facilities................................18
2.12 Assumption of Risk and Insurance......................................18
2.13 Change Control........................................................19
2.14 Itron Reports.........................................................19
Section 3 Licenses..............................................................20
3.1 Licenses..............................................................20
3.2 Ownership of Software and Software Releases...........................20
Section 4 Implementation........................................................20
4.1 Cooperation...........................................................20
4.2 General Obligations...................................................20
4.3 Obligations of DataCom................................................24
Section 5 Compensation; Conditions Precedent....................................26
5.1 Initial Fee...........................................................26
5.2 Annual Fee for Standard Services......................................26
5.3 Fees for supplemental Services........................................26
5.4 Letter of Credit......................................................27
5.5 Conditions of Letter of Credit........................................27
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Page
Section 6 Events of Default.....................................................27
6.1 Events of Default.....................................................27
6.2 Remedies for Events of Defaults.......................................28
6.3 Change in Control.....................................................29
Section 7 Term and Termination..................................................29
7.1 Term..................................................................29
7.2 Termination by DataCom................................................29
7.3 Termination by Itron..................................................29
Section 8 Indemnification.......................................................30
8.1 Of DataCom............................................................30
8.2 Of Itron..............................................................30
8.3 Intellectual Property Indemnification.................................31
8.4 Procedure.............................................................31
8.5 Payment of Indemnification Claims.....................................32
Section 9 Limitation on Liability...............................................32
9.1 Disclaimer............................................................32
9.2 Limitation on Liability...............................................32
Section 10 Miscellaneous.........................................................33
10.1 Excusable Delay.......................................................33
10.2 Nondisclosure.........................................................33
10.3 Assignment............................................................34
10.4 Notices...............................................................34
10.5 Waiver................................................................35
10.6 Independent Contractor................................................35
10.7 Counterparts..........................................................36
10.8 Headings..............................................................36
10.9 Governing Law.........................................................36
10.10 Entire Agreement......................................................36
10.11 Dispute Resolution....................................................36
10.12 Consent...............................................................37
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WARRANTY AND MAINTENANCE AGREEMENT
This Warranty and Maintenance Agreement (this "AGREEMENT") is
effective March 30, 2000 (the "EFFECTIVE DATE") and is between DataCom
Information Systems, LLC, a Delaware limited liability company with its
principal office located in Greentree, Pennsylvania ("DATACOM"), and Itron,
Inc., a Washington corporation with its principal office located in Spokane,
Washington ("ITRON").
RECITALS
A. DataCom is an affiliate of Duquesne Light Company, a Pennsylvania
corporation ("DLC"). DLC and Itron are parties to the Amended and Restated
Utility Automated Meter Data Acquisition Equipment Lease and Services Agreement
dated January 15, 1996, as amended (the "DUQUESNE CONTRACT"), pursuant to which
Itron has been providing equipment, software, facilities and services for the
operation and maintenance of the Fixed Network (as defined below).
B. Concurrently with the execution and delivery of this Agreement, DLC
and Itron have terminated the Duquesne Contract by mutual agreement and,
pursuant to the Purchase Agreement (as defined below), DataCom has purchased,
licensed or otherwise acquired from Itron certain Equipment, facilities,
Software and other assets owned, leased or licensed by Itron, and/or
constituting or used in connection with the Fixed Network.
C. The Parties desire for Itron to continue to provide certain
maintenance and support services for the Fixed Network under this Agreement.
AGREEMENT
SECTION 1. DEFINITIONS
In this Agreement:
"APPLICABLE LAWS" means any law, statute, rule, regulation, ordinance,
order, code, interpretation, judgment, decree, directive, or decision in effect
from time to time of any national, state or local government, any political
subdivision thereof or any other governmental, judicial, public or statutory
instrumentality, authority, body, agency, department, bureau, commission or
other governmental entity, which is applicable to or affects this Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code, 11 U.S.C.
Section 101-1330, as in effect on the date hereof.
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"BUSINESS DAY" means a day other than a day on which commercial banks in
Pittsburgh, Pennsylvania are required or authorized to be closed. Unless
qualified by the term "Business", references in this Agreement to "day" or
"days" shall refer to a calendar day or calendar days, respectively.
"CCU" means cell control unit.
"CHANGE IN CONTROL" means any of the following events: (i) any Person
becomes the beneficial owner (as defined in Rule 13(d)(3) under the Securities
Exchange Act of 1934), directly or indirectly, of securities of Itron
representing 50% or more of the combined voting power of Itron's then
outstanding voting securities; (ii) the individuals who as of the date of this
Agreement are members of the Board of Directors of Itron (the "INCUMBENT
Board"), cease for any reason to constitute at least a majority of the Board of
Directors of Itron (provided, however, that if the election, or nomination for
election by Itron's shareholders, of any new director was approved by a vote of
at least a majority of the Incumbent Board, such new director will be considered
to be a member of the Incumbent Board); (iii) an agreement by Itron to
consolidate or merge with any other entity pursuant to which Itron will not be
the continuing or surviving corporation or pursuant to which shares of the
common stock of Itron would be converted into cash, securities or other
property, other than a merger of Itron in which holders of the common stock of
Itron immediately prior to the merger would have the same proportion of
ownership of common stock of the surviving corporation immediately after the
merger; (iv) an agreement of Itron to sell, lease, exchange or otherwise
transfer in one transaction or a series of related transactions substantially
all the assets of Itron; (v) the adoption of any plan or proposal for a complete
or partial liquidation or dissolution of Itron; or (vi) an agreement to sell
more than 50% of the outstanding voting securities of Itron in one or a series
of related transactions.
"CONFIDENTIAL INFORMATION" means all nonpublic information disclosed by
a Disclosing Party to the Receiving Party that is designated as confidential or
that, given the nature of the information or the circumstances surrounding its
disclosure, reasonably should be considered as confidential. Confidential
Information includes, but is not limited to, security codes, computer passwords,
customer information, trade secrets, documents, designs, drawings, manufacturing
processes, research developments, business activities and operations, inventions
and engineering concepts. The Parties acknowledge and agree that all information
concerning DataCom's and DLC's customers is highly confidential and is the
Confidential Information of DataCom. Confidential Information does not include
any information that (i) has become publicly available without breach of this
Agreement, (ii) can be shown by documentation to have been known to the
Receiving Party at the time of its receipt from the Disclosing Party, (iii) is
received from a third party who did not acquire or disclose such information by
a wrongful act or (iv) can be
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shown by documentation to have been independently developed by the Receiving
Party without reference to any Confidential Information.
"CONFIGURATION CHANGE" means any change to the Fixed Network requested
by DataCom to improve and support the performance of the Fixed Network or
requested by Itron as necessary to maintain and enhance the Fixed Network within
its designed functionality as existing on the Effective Date or as expanded
thereafter pursuant to the provisions of this Agreement.
"COVERED COMPONENTS" means (i) the components of the Fixed Network
identified in Schedule "C" hereto; (ii) other components (including equipment,
Software and Software Releases) that are added to the Fixed Network (A) pursuant
to Itron's provision of Standard Services or Supplemental Services, (B) pursuant
to the EnSite Agreement or (C) by agreement of the Parties from time to time;
and (iii) Software.
"CRITICAL MAINTENANCE RELEASE" means a revision to Software that
corrects a Critical Nonconformity.
"CRITICAL NONCONFORMITY" means (a) a Nonconformity resulting in a
material degradation in (i) the backup systems and reliability of the Fixed
Network, or (ii) the ability of DataCom to (A) read, collect or pass daily or
interval meter data, (B) collect or pass customer billing data, (C) operate the
Outage Management System or the Sentry MRP System or (D) operate the Fixed
Network; or (b) aggregate monthly CCU Nonconformities in excess of 4% of the
deployed CCUs in the Fixed Network.
"CUSTOM RELEASE" means any revision to Software that (i) Itron may
prepare or have prepared in response to a written request received from DataCom
and (ii) is not a scheduled Maintenance Release, Critical Maintenance Release or
Configuration Change.
"DATACOM SERVICE ADMINISTRATOR" has the meaning set forth in Paragraph
4.2(a).
"DCU" means a data command unit.
"DISASTER RECOVERY SERVICES" has the meaning set forth in Paragraph
2.3(c).
"DISCLOSING PARTY" means a Party that discloses Confidential Information
to the other Party under this Agreement.
"DLC" means Duquesne Light Company.
"DNI" means Diverse Networks, Inc.
"DNI AGREEMENT" means the agreement between Itron and DNI under which
Itron implemented system backup and automation functions for the Fixed Network.
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"DUQUESNE CONTRACT" has the meaning set forth in Recital A.
"ENSITE AGREEMENT" means the Agreement of Limited Partnership between
JLK Technology, Inc. and Genesis Services Pittsburgh, Inc. dated February 8,
1996, as amended.
"ENVIRONMENTAL LAWS" has the meaning set forth in Paragraph 2.9(g)(ii).
"EQUIPMENT" means the items of Covered Components which are not
Software.
"ERT" means an encoder receiver transmitter device installed in a
standard residential meter for the purpose of communicating meter data over the
Fixed Network.
"ESCROW AGREEMENT" shall mean the escrow agreement by and among Itron,
DataCom, and an escrow agent satisfactory to DataCom and Itron which shall
provide for, among other things, (i) delivery by Itron of (A) the source code of
all Itron owned Software, Software Releases and all upgrades, updates or
modifications thereto and (B) design documents for the Equipment and certain
other material; (ii) release conditions; and (iii) term.
"EXCLUDED EQUIPMENT" means equipment that is not a Covered Component.
"FCC" means the Federal Communications Commission.
"FINAL CURE DATE" has the meaning set forth in Paragraph 2.9(a)(ii).
"FIXED NETWORK" means the Covered Components and communications system
consisting of local area and wide area networks that communicate remotely with
meters that measure electric power usage or other applications, as installed
pursuant to the Duquesne Contract, and as maintained and expanded from time to
time pursuant to this Agreement and the EnSite Agreement.
"FIXED NETWORK EXPANSION" has the meaning set forth in Paragraph 2.5.
"FORCE MAJEURE EVENT" means epidemics, major storms, floods, lightning,
earthquakes, fires, riots, civil disturbances, labor strikes or unrest,
vandalism, or sabotage beyond the reasonable control of a Party, acts of God, or
any cause or condition beyond a Party's reasonable control, provided that a
Party shall not be excused from liability or performance hereunder where its
delay or failure to perform is due to its financial inability to perform.
"GENESIS SYSTEM" means the Itron communications network bearing the
same trademark name.
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"GREENTREE OPERATIONS CENTER" means the operations center for the Fixed
Network currently located at Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxxxxxxx, as the same may be moved from time to time.
"INFRINGING MATERIAL" has the meaning set forth in Paragraph 8.3.
"INITIAL CURE PERIOD" has the meaning set forth in Paragraph 2.9(a)(i).
"INITIAL FEE" has the meaning set forth in Paragraph 5.1.
"ITRON EQUIPMENT" means the equipment and materials, as set forth in
Schedule "E", that are in Pittsburgh as of the Effective Date and used
extensively for maintenance of the Covered Components and that will remain Itron
assets and be used in performing the Services.
"ITRON HOLIDAY" means each of the dates in a year, not to exceed a total
of 10 in number per year, that are designated as holidays in writing by Itron to
DataCom by December 15 of the preceding year.
"ITRON SERVICE ADMINISTRATOR" has the meaning set forth in Paragraph
4.2(a).
"L/C AMOUNT" means an amount equal to $5,000,000 less all amounts drawn
by DataCom against the Letter of Credit.
"LETTER OF CREDIT" has the meaning set forth in Paragraph 5.4.
"LOSSES" has the meaning set forth in Paragraph 8.1
"MAINTENANCE INVENTORY" has the meaning set forth in Paragraph 4.2(h).
"MAINTENANCE RELEASE" means any revision to Software that Itron may
prepare, or that Itron may have prepared by or may receive from any third party,
from time to time after the Effective Date that maintains or enhances Software
operability and functionality, including available fixes for reported or
identified Software problems and Nonconformities which are not Critical
Nonconformities, but not including Custom Releases.
"MAMR" means mobile automated meter reading.
"MATERIALS OF ENVIRONMENTAL CONCERN" means chemicals, pollutants,
contaminants, wastes, toxic or hazardous substances, petroleum and petroleum
products and residual wastes.
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"MV90" means a system component of the Fixed Network that processes
meter reading data generally originating from commercial and industrial meters.
"MVWEB" means a software component of the Fixed Network that operates in
connection with the MV90 to post customer data to a website.
"MV-PBS" means a system component of the Fixed Network that processes
billing data provided by MV90 for the purpose of generating custom designed
bills for customers.
"NCN" means network control node.
"95% COVERAGE" means 95% (520,000 as of the Effective Date, to increase
by no more than 2% per annum) of DLC's residential and small commercial
customers in the Service Territory.
"NONCONFORMING" means having a Nonconformity.
"NONCONFORMITY" means, with respect to a Covered Component or Fixed
Networth and Disaster Recovery communications circuits, a deviation from normal
functionality or a failure to conform to the requirements of this Agreement,
including, without limitation, the warranties set forth herein.
"OUTAGE MANAGEMENT SYSTEM" means the system implemented by DLC for the
purpose of processing outage messages from the Fixed Network as of the Effective
Date and as expanded hereafter pursuant to the Agreement.
"PARTY" or "PARTIES" means DataCom and Itron, individually or
collectively as the case may be.
"PERSON" means any individual, company, corporation, partnership or
other legal entity.
"PREFERRED PRICE" means, with respect to any goods or services, the
lowest of (i) the most favorable price or rate then offered by Itron to any
Person for the same quantity of such goods or services, (ii) if such goods or
services are the subject of a then current list price published by Itron, (a)
for goods, a quantity discount based on the accumulated quantity of such goods
purchased by DataCom since the Effective Date and (b) for services, a 20%
discount off the list price, (iii) the price determined by Itron as commercially
reasonable for such goods or services, or (iv) if DataCom is not satisfied with
the price under (i), (ii) or (iii), then such price as the Parties may negotiate
in good faith.
"PREMIUM STANDARD SERVICE" has the meaning set forth in Paragraph 2.6.
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"PUC" means the Pennsylvania Public Utility Commission.
"PURCHASE AGREEMENT" means the Asset Purchase Agreement dated the date
of this Agreement between DataCom and Itron.
"QUALIFYING BANK" means ABN AMRO Bank N.V. or a commercial bank
reasonably acceptable to DataCom with a minimum credit rating of at least two of
the following ratings: (i) AA as determined by Standard & Poor's Corporation, or
(ii) Aa2 as determined by Xxxxx'x Investors Service, Inc., or (iii) a comparable
rating by another nationally recognized rating service reasonably acceptable to
DataCom.
"RADIO FREQUENCY SHARING AGREEMENT" means the Radio Frequency Sharing
Agreement dated the date of this Agreement between DataCom and Itron.
"RECEIVING PARTY" means a Party that receives Confidential Information
from the other Party under this Agreement.
"RESERVE INVENTORY" has the meaning set forth in Paragraph 4.2(g).
"RMA" has the meaning set forth in Paragraph 4.2(f).
"SENTRY DEVICE" means the telephone based meter device used for reading
residential and small commercial meters over the Fixed Network.
"SENTRY MRP SYSTEM" means a system component of the Fixed Network that
processes meter data to determine the outage and restoration of electrical
service.
"SERVICE TERRITORY" means the service territory of DLC as of the
Effective Date.
"SERVICES" means the Itron responsibilities identified in Section 2 of
this Agreement, as such may be expanded from time to time pursuant to this
Agreement or by the agreement of the Parties.
"SOFTWARE" means all licensed and unlicensed Genesis System network
software, computer programming object code, DNI software, and other software now
or hereafter owned by Itron or licensed from third parties and necessary for
effective system operation of the Fixed Network from time to time and all
related documentation and scripts furnished by or through Itron, as identified
in Schedule "C" and as added to the Fixed Network from time to time pursuant to
this Agreement, and all Software Releases.
"SOFTWARE RELEASES" means Maintenance Releases, Critical Maintenance
Releases and Custom Releases. Software Releases include any now or hereafter
existing Itron or third party programs or computer programming code that (i)
involve or support the installation or use of any computer software or hardware
that is a Covered Component,
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(ii) is required to install the release, (iii) becomes a Covered Component, (iv)
is added through use of Supplemental Services, or (v) is necessary for the
continued satisfactory operation of the Fixed Network.
"SPOKANE OPERATIONS CENTER" means the Itron customer support center
located in Spokane, Washington, as the same may be moved from time to time.
"STANDARD SERVICES" has the meaning set forth in Paragraph 2.1.
"SUPPLEMENTAL SERVICES" has the meaning set forth in Paragraph 2.8.
"TERM" has the meaning set forth in Paragraph 7.1.
SECTION 2. ITRON SERVICES
2.1 STANDARD SERVICES
During the Term, Itron will perform the Services described in
Paragraphs 2.2, 2.3, 2.4 and 2.5 for the Fixed Network and all Covered
Components ("Standard Services").
2.2 SOFTWARE RELEASES AND SUPPORT
(a) Critical Maintenance Releases. Whenever Itron prepares or
has prepared a Critical Maintenance Release, Itron shall provide DataCom an
electronic copy of, and obtain all necessary licenses for DataCom to use, the
Critical Maintenance Release. Unless directed otherwise by DataCom in writing,
Itron shall (i) give any request for a Critical Maintenance Release priority
over all other DataCom reported problems and (ii) provide DataCom with
corrective action reports and project timetables with respect to the Critical
Nonconformity on not less than a weekly frequency. Itron shall provide, at its
sole cost and expense, assistance and on-site support to DataCom for the
implementation of Critical Maintenance Releases in the form of installation,
testing and training of designated DataCom personnel identified in writing to
Itron.
(b) Test Releases. Upon the receipt of a written request from
DataCom, Itron shall provide DataCom with an electronic copy of any Critical
Maintenance Release both before and after Itron has completed its full test of
the Critical Maintenance Release. Itron will have no responsibility for
installation or Standard Services for, or for results, errors or damages caused
by DataCom's use of, a pre-test version of any Critical Maintenance Release
provided by Itron under this paragraph.
(c) Maintenance Releases. Itron shall provide DataCom an
electronic copy of and, if necessary, a license to use, all Maintenance Releases
as soon as they have been prepared or received, and tested for release, by
Itron. All Maintenance Releases,
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and related training of DataCom personnel as required, will be provided upon
DataCom's request without any additional cost or expense to DataCom; provided,
however, that Itron shall not be obligated to provide Maintenance Releases for,
or to otherwise support, any Software which is not a Covered Component. Itron
shall notify DataCom promptly upon scheduling of and completion of any
Maintenance Release and upon its receipt of a Maintenance Release from a third
party. Such notice shall describe, in reasonable detail, the nature and subject
of the forthcoming Maintenance Release.
(d) Documentation. Itron shall provide DataCom such
documentation, including commands and/or scripts, as may be necessary to install
and operate the Fixed Network, the Covered Components, Software and Software
Releases. Such publications need not, however, include engineering blue prints,
source code, proprietary protocols, and other Itron technical documents unless
otherwise agreed to in writing by the Parties. Technical publications, object
and source codes, protocols, and other proprietary Itron information not
provided under this Agreement shall be made available to DataCom pursuant to the
terms of the Escrow Agreement.
(e) Software Release Support. During the installation of, and for
a period of ninety (90) days after the installation of any Software Release,
Itron shall make one or more qualified technical representatives available via
the toll-free telephone number set forth in Schedule "D" during the routine
support hours set forth in Schedule "D", to assist the DataCom Service
Administrator with installation, use and maintenance of the Software Release.
(f) Third Party Software. If and when necessary to support Fixed
Network operations, Itron shall maintain third party Software at levels that are
supported by the respective third party vendors. Itron shall provide Maintenance
Releases of Itron Software to insure compatibility of Itron Software with
supported releases of third party Software.
2.3 TECHNICAL SUPPORT
(a) Fixed Network and Covered Components Routine Technical
Support. Itron shall make one or more qualified technical representatives
available via the toll-free telephone number set forth in Schedule "D" during
the routine support hours set forth in Schedule "D", to assist the DataCom
Service Administrator with technical support for routine Nonconformities and
other general technical support for the Fixed Network and Covered Components
that may be required from time to time.
(b) Fixed Network and Covered Components Critical Technical
Support. Itron shall make one or more qualified technical representatives
available via the toll-free telephone number set forth in Schedule "D" on a
twenty-four (24) hour basis to assist the DataCom Service Administrator with any
Critical Nonconformity. Such assistance shall
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include, if requested by the DataCom Service Administrator, the dispatch of a
technician to correct the Critical Nonconformity within the time periods set
forth in Schedule "D" and in accordance with the other requirements set forth in
this Agreement.
(c) Configuration Changes. Upon request from DataCom or Itron's
personnel, Itron shall take such actions as shall be necessary to support a
Configuration Change. If the Parties have a good faith dispute over whether a
requested change is a Configuration Change, such dispute shall be submitted for
resolution to an officer of DataCom and an officer of Itron who shall have the
authority to settle the dispute.
(d) Disaster Recovery. Itron shall continue and, by October 31,
2000 shall complete its installation of, and shall thereafter operate and
maintain, a disaster recovery program at its Spokane Operations Center for the
Greentree Operations Center. Itron shall provide DataCom with the disaster
recovery services listed in Schedule "F" (the "DISASTER RECOVERY SERVICES") for
the identified Covered Components, on a 24 hour per day basis for a period of up
to 96 consecutive hours following commencement of Disaster Recovery Services.
Thereafter, Itron will provide Disaster Recovery Services, including operations
personnel for up to eight hours per day, and DataCom shall be responsible for
providing operations personnel for the remaining hours per day, unless DataCom's
requirement for Disaster Recovery Services was caused by Itron's negligence,
willful misconduct or failure to perform its obligations hereunder, in which
case, Itron shall continue to provide, at its cost and expense, Disaster
Recovery Services on a 24 hour per day basis until completed. All Disaster
Recovery Services after the first 96 hours will be deemed Supplemental Services.
(e) Advice. At DataCom's reasonable request, Itron will advise
DataCom regarding the technical effects of any changes to the Fixed Network
contemplated or implemented by DataCom or on DataCom's behalf.
2.4 FIXED NETWORK INSTALLATION, INVESTIGATION AND MAINTENANCE
(a) Field Investigations. In situations where DataCom's standard
troubleshooting activities in accordance with Paragraph 4.3(f) cannot identify
or correct a Nonconformity, and problem analysis by telephone or remote system
access is neither successful nor expedient, and upon receipt of a service
request from DataCom, Itron will provide services as set forth in Schedule "D",
and shall dispatch appropriate employees or contract personnel to investigate
any Nonconformity. As part of its field investigation process, Itron will make
available all labor, material, exchange equipment, tools, and consumable
supplies (e.g., wire, batteries, brackets, and cables) necessary for
de-installation and re-installation of Nonconforming Covered Components, as well
as CCUs requiring battery replacement. If Itron discovers site characteristics
that adversely impact CCU performance, Itron will attempt to relocate the
affected CCU to an alternative site if
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an alternative site is available within fifty (50) yards of the original site
location. If CCU performance cannot be restored, Itron will remove the CCU from
the field and report the site(s) to DataCom as out of service. In any case,
Itron will take such action as may be necessary to eliminate the Nonconformity.
(b) Covered Components Corrective Maintenance. Itron shall
provide corrective maintenance for Nonconforming Covered Components during
regular hours at Itron's servicing location, within the response/return times
documented in Schedule "D". Upon receiving the Covered Component at the
servicing location, Itron will complete the corrective maintenance, or arrange
for all corrective maintenance necessary, to return the Covered Component to its
original operating specifications, excluding minor cosmetic deficiencies (e.g.,
minor cracks, dents, and scratches). Itron will furnish all parts and materials
necessary to complete the corrective maintenance and eliminate any
Nonconformity. Parts furnished will be new, or in a condition equivalent to new,
and shall be functionally equivalent to those parts removed from service.
Nonconforming, malfunctioning or inoperative parts so replaced by Itron will
become Itron property.
(c) Covered Component Installation and Maintenance. Itron will
ensure all Covered Components have been installed properly as of the Effective
Date, and subsequently if installed by or under Itron's direction pursuant to
this Agreement or the EnSite Agreement. Itron will maintain all Covered
Components within manufacturer specifications, including performing all
necessary or appropriate preventative maintenance on such Covered Components.
2.5 FIXED NETWORK EXPANSION
(a) Fixed Network Expansion to 95%. Itron shall install, using
the most economical means that balances both Parties' interests, such Equipment
and Software and provide such other related services as are necessary to expand
the Fixed Network to 95% Coverage (the "FIXED NETWORK EXPANSION") on or before
December 31, 2002. Itron shall, at its own cost and expense, provide all labor,
material, equipment, tools and consumable supplies necessary for the Fixed
Network Expansion. All Equipment and Software installed in connection with the
Fixed Network Expansion shall become the property of DataCom and become Covered
Components. Itron shall not be required to commence the Fixed Network Expansion
prior to January 1, 2001, and shall not be required to expend more than $2
million in total costs for the Fixed Network Expansion during 2001. In the event
that the Fixed Network Expansion is not completed on or before December 31,
2002, in addition to all other remedies which may be available to DataCom
hereunder, the fee payable by DataCom pursuant to Paragraph 5.2 may be reduced,
at DataCom's sole option, by up to 15% until such time as the Fixed Network
Expansion is completed. In no event shall any amount by which such fee is
reduced be recoverable by Itron.
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(b) Telenetics Installation. Itron shall provide and install such
number of telenetics boxes and Sentry Devices as are necessary to support up to
1,500 additional residential or demand meters to be installed in the Fixed
Network and become Covered Components. Itron shall, at its own cost and expense,
provide all labor, material, equipment, tools and consumable supplies necessary
for such installation, and all telenetics boxes so installed shall become the
property of DataCom. DataCom shall procure for Itron the access it requires to
perform such installation and shall subsequently be responsible for all
communication costs associated with the installed telenetics boxes and Sentry
Devices.
(c) MV90 Upgrade. At DataCom's request and in accordance with
DataCom's requirements, Itron will provide equipment, materials, software and
services necessary to upgrade the MV-Web and MV-90 applications systems included
in the Fixed Network to support (i) DataCom's e-business applications agreeable
to both Parties and (ii) posting of power quality data to MV-Web. Itron shall
bear all costs and expenses for all of the foregoing, including, but not limited
to, development and implementation charges, up to a maximum of $250,000.
(d) Sentry MRP System. Itron, at its sole cost and expense, shall
complete, on or before June 30, 2001 (provided that, by September 30, 2000,
DataCom shall have defined, and Itron shall have approved, such approval not to
be unreasonably withheld, the specifications for the system), the development,
testing and installation of, and shall provide DataCom with a license to use,
Software for implementation of a Sentry MRP outage notification system designed
to accommodate up to 10,000 customers. Such Software license shall be
unrestricted as to the number of customers within the service territory as of
the Effective Date, of DLC and any of its Affiliates that may be serviced.
DataCom, at its sole cost and expense, shall provide all equipment and
communication circuits necessary for such system, provided that DataCom shall
have the right to purchase any such equipment which is available from Itron at
the Preferred Price.
2.6 ADDITIONAL CHARGE FOR STANDARD SERVICES
If, but only to the extent that, Itron is required to perform any
Standard Services as a result of any of the following events or circumstances (a
"PREMIUM STANDARD SERVICE"), then (i) Itron shall use its reasonable best
efforts to perform said Premium Standard Services, in which case the provisions
of Schedule D and Paragraph 2.9(a) shall not apply, and (ii) at Itron's option,
DataCom shall pay for such Premium Standard Service as if it were a Supplemental
Service at the Preferred Price;
(a) Any repair, maintenance, service, modification to or
alteration of the Fixed Network performed after the Effective Date by any
personnel other than Itron personnel (including its employees, agents and
contractors) or Itron-trained DataCom
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personnel (including its employees, agents and contractors) after the Effective
Date without prior notice to and approval by Itron, which approval shall not be
unreasonably withheld;
(b) Any damage to or accident involving the Fixed Network or
Covered Components due primarily to the negligence of, or an intentional act of
sabotage by, DataCom or any of its employees, contractors, subcontractors or
agents;
(c) Any material breach by DataCom of its obligations under this
Agreement;
(d) Any Nonconformity resulting from a major modification to or
alteration of the Fixed Network by DataCom which had not been approved or
otherwise permitted pursuant to the Change Control procedures attached as
Schedule "A"; or
(e) Any Service required because DataCom did not operate the
Fixed Network or Covered Components within the normal operating standards
employed at the Greentree Operations Center as of the Effective Date and as
modified from time to time pursuant to this Agreement.
2.7 FAILURE TO PERFORM STANDARD SERVICES
Itron shall perform the Standard Services within the time periods
set forth in Schedule "D" or as otherwise required by this Agreement, and such
Standard Services shall comply with all performance standards and other
requirements of this Agreement. In the event that Itron fails to perform any of
the Standard Services as and when required under the terms of this Agreement,
and provided that DataCom has followed the escalation process provided in
Schedule "G", then, in addition to any other rights and remedies it may have
hereunder, at law, in equity or otherwise, upon written notice to Itron, DataCom
may perform or cause a third party to perform such Standard Services and shall
be entitled to (i) offset the costs and expenses of performing or having
performed such Standard Services against any amounts owed to Itron pursuant to
Section 5, and (ii) upon offsetting all such amounts then due and payable to
Itron pursuant to Section 5, draw upon the Letter of Credit for payment of the
costs and expenses of such Standard Services.
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2.8 SUPPLEMENTAL SERVICES
Upon receipt of a written request from DataCom, Itron shall
provide the following Supplemental Services to DataCom, each of which shall be
at the Preferred Price:
(a) Excluded Equipment. At DataCom's request and after Itron's
agreement, which will not be unreasonably withheld, Itron shall make
commercially reasonable efforts to provide Services at a commercially reasonable
price for any Excluded Equipment.
(b) Custom Releases. Within 30 days of receipt of a written
request from DataCom for a Custom Release, Itron shall provide DataCom with a
firm estimate of Itron's price and time required to prepare or cause preparation
of the Custom Release. The firm estimate shall include, but not be limited to,
the following information: a requirements definition, and estimates and
descriptions of project management, design, tooling, programming, documentation,
testing, implementation and on-going service. If DataCom provides Itron with a
written notice to proceed within 30 days of the receipt of the firm estimate,
Itron shall, as soon as commercially reasonable, (i) prepare or cause to be
prepared, (ii) provide DataCom an electronic form copy of, and (iii) obtain all
necessary licenses for DataCom to use, the Custom Release in accordance with the
firm estimate, and shall otherwise perform all services and obligations as set
forth in the firm estimate.
(c) Optional Support and Training Services. Within 15 days of
receipt of a written request from DataCom, Itron shall provide DataCom with a
firm estimate of Itron's price and time required to provide DataCom with support
and/or training services that are not Standard Services, in each case as may be
set forth in the request. If DataCom provides Itron with a written notice to
proceed within 30 days of the receipt of the firm estimate, Itron shall provide
the services in accordance with the firm estimate.
(d) Covered Component Upgrades. Within 30 days of receipt of a
written request from DataCom, Itron shall provide DataCom with a firm estimate
of Itron's price and time required to prepare or cause preparation of and to
implement an upgrade of or enhancement to a Covered Component that is not
otherwise provided for in this Agreement. If DataCom provides Itron with a
written notice to proceed within 30 days of the receipt of the firm estimate,
Itron shall prepare and implement the upgrade or enhancement in accordance with
the firm estimate.
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(e) Other Supplemental Services. Upon request from DataCom, Itron
shall provide the following Supplemental Services at the Preferred Price for
labor, materials, and expenses:
(i) Services and expenses outlined as obligations of
DataCom in this Agreement;
(ii) Service requests that include services, overtime or
holiday coverage, response/return times, special freight or expenses over and
above the Standard Services;
(iii) Additional services that are required due to
DataCom's inability to provide Itron with reasonable access to system
performance data and use of operational tools available to the Fixed Network;
(iv) Any field investigations or corrective maintenance
that are not otherwise caused by Nonconformities or Critical Nonconformities;
(v) Field investigation support for meters, ERTs, Sentry
Devices and Excluded Equipment;
(vi) Installation and/or acceptance tests, data, reports,
documentation, upgrades and/or enhancements not specifically related to Covered
Components or included as part of this Agreement;
(vii) Assistance to DataCom for the implementation of a
Maintenance Release in the form of installation and testing;
(viii) Support services for any pre-test version of a
Critical Maintenance Release; and
(ix) Services that are required in connection with a move
of the Greentree Operations Center.
(f) Fixed Network Expansion to 100%. At DataCom's request, Itron
will provide equipment, materials and services necessary to expand the Fixed
Network beyond 95% Coverage and up to 100% coverage of DLC's residential and
small commercial customers in the Service Territory at the Preferred Price,
unless the expansion is requested pursuant to the EnSite Agreement, in which
case the terms of the EnSite Agreement shall apply.
(g) MV-PBS Upgrade. At DataCom's request, Itron will provide, at
the Preferred Price, equipment, materials and services necessary to upgrade the
MV-PBS to (i) automate DLC's current S-xxxx programs, edits, and interfaces used
for large customer
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billing, and (ii) support market requirements for new complex tariffs and other
billing requirements imposed by Pennsylvania's customer choice legislation.
2.9 WARRANTIES AND PERFORMANCE STANDARDS
(a) Critical Nonconformities. Notwithstanding anything to the
contrary set forth elsewhere in this Agreement and except as otherwise provided
in Paragraph 2.6, in performing the Standard Services, the following
requirements shall apply to any and all Critical Nonconformities:
(i) Itron shall exercise its reasonable best efforts to
eliminate a Critical Nonconformity within 120 hours after it receives written
notice from DataCom that a Critical Nonconformity exists (the "INITIAL CURE
PERIOD"). If a Critical Nonconformity has not been eliminated within the Initial
Cure Period, DataCom shall have the option, exercisable in its sole discretion,
to require Itron to pay a penalty of $5,000 to DataCom within ten days after the
end of the Initial Cure Period.
(ii) With respect to any Critical Nonconformity which has
not been eliminated within the Initial Cure Period, Itron shall exercise its
best efforts to eliminate such Critical Nonconformity as soon as possible, but
in any event on or before the date which is 15 days after the end of the Initial
Cure Period (the "FINAL CURE DATE"). If a Critical Nonconformity has not been
eliminated on or before the Final Cure Date (as it may be extended pursuant to
(iii) below), an Event of Default under Paragraph 6.1 shall be deemed to exist.
(iii) If it would not be possible through the exercise of
best efforts for Itron or any other similar company to eliminate the Critical
Nonconformity on or before the Final Cure Date, then the Final Cure Date may be
extended at DataCom's sole discretion if DataCom is satisfied that continuing
best efforts by Itron will eliminate the Critical Nonconformity.
(b) Itron Warranties. Itron represents, warrants and guarantees
that any Services provided under this Agreement shall be (i) provided in
accordance with the requirements of this Agreement; (ii) provided in a timely,
skillful, workmanlike and professional manner; and (iii) suitable for providing
the Services required hereunder.
(c) Third Party Warranties. To the extent permitted and subject
to Paragraph 9.1, Itron will assign to DataCom, without recourse to Itron, all
third party manufacturer's warranties related to the Covered Components which
are in effect on the Effective Date. The expiration of such warranties, however,
shall not be acceptable cause for non-delivery, or unsatisfactory delivery, of
Services under this Agreement.
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(d) Applicable Standards. Itron will perform, and will cause its
contractors to perform Services under Section 2 safely, reliably, efficiently,
in compliance with all Applicable Laws, including FCC and PUC requirements, in
conformance with industry standards and under conditions reasonably required by
DataCom's insurers.
(e) CCU, NCN and Communications Equipment Performance. A CCU will
be considered Nonconforming when communications have failed for three (3)
consecutive days or if its continued operation interferes with other Fixed
Network components. Itron's Services shall be performed in a manner that ensures
that CCU/NCN reads (data collection) are successful for ninety-six percent (96%)
of the attempts during each month during the Term. Itron agrees that maintenance
and support activities will be reviewed and revised, if necessary, in
consultation with DataCom, if aggregate CCU/NCN read performance falls below
ninety-six percent (96%) for any consecutive seven day period.
(f) Relations with Labor. Itron shall maintain good relations
with its employees and contractors with regard to its performance of the
Services. Itron shall promptly notify DataCom in writing of any material
complaint made by or any material dispute that arises with any of these Persons
in connection with the Services.
(g) Environmental Compliance.
(i) Prior to commencement of any Services involving
Materials of Environmental Concern, Itron shall provide to DataCom a list of all
Materials of Environmental Concern that may be used or generated in connection
with the Services.
(ii) In furtherance of and not in limitation of any other
portion of this Agreement, Itron shall, and shall cause its subcontractors to
comply with all Applicable Laws relating to safety and the protection of the
environment including, but not limited to, handling, protection, transportation
and disposal of all Materials of Environmental Concern ("ENVIRONMENTAL LAWS").
The Services shall at all times comply with Environmental Laws.
2.10 PERSONNEL AND QUALIFICATIONS
(a) General. Itron shall provide all labor and personnel required
in connection with the performance of the Services. All personnel used by Itron
in the performance of Services shall be qualified by training, licenses or
certifications, as required, and experienced to perform their assigned tasks.
Itron shall ensure that all personnel assigned to perform Services are subject
to the same current background checks, security requirements and other
protective personnel procedures, including, without limitation, drug testing
procedures, as are personnel of DLC in similar positions. At DataCom's request,
Itron shall remove from performing Services any employee whom
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DataCom, in its reasonable discretion and with sufficient cause, deems
unqualified, incompetent, disorderly, insubordinate, careless or otherwise
objectionable (except that Itron shall have no obligation to remove any employee
if such removal would violate Applicable Law).
(b) Use of Contractors. Itron may, at its sole discretion, use
contract personnel to perform any Services pursuant to this Agreement. Such
contract personnel shall possess the required qualifications, training and
experience necessary to perform the required tasks in accordance with applicable
industry standards. Such contract personnel will be dispatched by and
responsible to Itron. DataCom shall not direct Itron's contract personnel to
perform any tasks not included as Standard Services or Supplemental Services
under this Agreement.
2.11 INTERFERENCE WITH DATACOM'S FACILITIES
Itron shall not materially and adversely interfere or tamper with
any of DataCom's facilities in any way that is not necessary or appropriate to
the performance of the Services without the prior written consent of DataCom,
and Itron shall take all actions necessary or appropriate to prevent its
employees, other contractors or subcontractors from doing so.
2.12 ASSUMPTION OF RISK AND INSURANCE
(a) Assumption of Risk. Itron acknowledges that the Services to
be provided under this Agreement may involve work at or near energized electric
lines or equipment, above and below ground, and potential exposure to Materials
of Environmental Concern and that, for this reason, there are certain risks
attendant to the performance of the Services. Itron explicitly assumes these
risks and the risks of pre-existing conditions during the performance of the
Services, excluding any conditions resulting from DataCom's sole negligence or
willful misconduct.
(b) Insurance. During the Term, Itron shall maintain, at no cost
to DataCom, at least the following kinds and amounts of insurance to cover
bodily injury (including death) and tangible property damage suffered or (in the
case of liability insurance) caused by Itron or its employees, if any, in
connection with the performance of the Services:
(i) Employer's Liability Insurance. Limit of not less than
$500,000.
(ii) Comprehensive General Liability Insurance. Includes
premises operation, independent contractor's protective, products, completed
operation, and blanket contractual liability coverage with a combined single
limit of not less than
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$1,000,000 per occurrence and $2,000,000 in the aggregate, and coverage for
blasting or explosion, collapse and underground work if applicable. The property
damage liability insurance shall include the broad form comprehensive general
liability coverage and shall include coverage (on a replacement cost basis) for
Covered Components while in the care, custody and possession of Itron.
(iii) Excess Umbrella Liability Insurance. Single limit of
not less than $15,000,000.
(iv) Worker's Compensation. A worker's compensation policy
in such coverage and with such limits as may be required from time to time by
Applicable Law.
Itron's liability policies required under this paragraph shall
contain a waiver of subrogation in favor of DataCom. DataCom shall be named as
an additional insured on Itron's liability policies required under this
Paragraph, as its interests may appear. Upon DataCom's request, Itron shall
provide written evidence that Itron complies with the requirements of this
Paragraph, stating the policy number and the inception and expiration data of
all policies. A "notice of cancellation/material alteration" clause shall be
included in Itron's liability policies required under this Paragraph that shall
require the policy issuer or policy holder to give DataCom at least thirty (30)
days notice prior to cancellation or material alteration under such policy.
2.13 CHANGE CONTROL
The Change Control Policy attached as Schedule "A" will govern
material changes to the Fixed Network and the Fixed Network test environment.
2.14 ITRON REPORTS
Promptly after the filing with the Securities and Exchange
Commission thereof, Itron shall furnish or cause to be furnished to DataCom a
copy of each current, quarterly and annual report on Form 8-K, 10-Q and 10-K,
respectively, any amendment, supplement, modification or addition to any such
report, and any other report, definitive proxy statement and registration
statement filed by Itron with the Securities and Exchange Commission.
Concurrently with furnishing its 10-K, Itron shall provide to DataCom a
certificate, signed by its President or Chief Financial Officer, stating that no
Event of Default has occurred and is continuing or, if an Event of Default has
occurred and is continuing, a statement as to the nature thereof and any action
that Itron proposes to take with respect thereto.
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SECTION 3. LICENSES
3.1 LICENSES
To the extent permitted by third party licensors (if applicable)
and with no additional cost to Itron, Itron hereby grants DataCom a
non-exclusive, unrestricted, royalty-free license (for Itron owned Software) or
sublicense (for third party owned Software) to use, in connection with the Fixed
Network, all Software, including commands and/or scripts, and all subsequent
Software Releases. The terms of Itron's end-user license for any third party
Software as in effect on the Effective Date shall apply to any sublicense for
such third party Software under this paragraph. Notwithstanding the forgoing, if
the effective operation of the Fixed Network requires that DataCom own any
Software or Software Release, Itron shall, at its sole cost and expense, take
such commercially reasonably steps as may be necessary to procure for DataCom
the ownership of such Software or Software Release.
3.2 OWNERSHIP OF SOFTWARE AND SOFTWARE RELEASES
All Software and Software Releases not owned by a third party are
owned by Itron unless and until such ownership has been transferred to DataCom
pursuant to the Purchase Agreement or Paragraph 3.1 hereof.
SECTION 4. IMPLEMENTATION
4.1 COOPERATION
The Parties will cooperate in good faith in performing their
respective obligations under this Agreement.
4.2 GENERAL OBLIGATIONS
(a) Service Administrators. DataCom will identify at least two
employees to act as primary and backup service administrators (each, an "DATACOM
SERVICE ADMINISTRATOR"), and Itron will identify at least two employees to act
as primary and backup service administrators (each, an "ITRON SERVICE
ADMINISTRATORS"). The DataCom Service Administrators and the Itron Service
Administrators shall act as liaisons between DataCom and Itron for all Service
issues.
(b) Service Requests.
(i) Itron shall maintain and make available to DataCom, a
staff of service personnel to respond to DataCom service requests in accordance
with Schedule "D", on the following basis:
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(A) 24 hours per day, seven days per week for
Critical Nonconformities, and
(B) Routine working hours for all other
Nonconformities.
(ii) Service requests for Nonconformities other than
Critical Nonconformities shall be reported to Itron by DataCom's Service
Administrator via Itron's Customer Support Hotline at (000) 000-0000.
(iii) Service requests for Critical Nonconformities shall
be reported by the DataCom Service Administrator to the on-duty Itron Service
Administrator at (000) 000-0000. The on-duty Itron Service Administrator will
take all necessary action to restore service on an urgent basis, including
immediately dispatching a technician to the Greentree Operations Center if
necessary or if requested by DataCom as set forth in Schedule "D".
(iv) Upon initiating a Service Request, DataCom's Service
Administrator should provide, at a minimum, the following information:
Contact Name:
Telephone Number:
Description of Problem:
Type of Equipment:
Equipment Item/Part Number:
Software (Version):
Materials to be Returned: Y/N
(c) Security. DataCom, at its expense, shall establish and
maintain physical and remote access to the Fixed Network, which will include
security badges, facilities entry security, and computer passwords for mutually
designated service providers. At a minimum, Fixed Network access (24 hours per
day, seven days per week) and computer passwords will allow Itron service
personnel to access, but not, without DataCom's consent, to make changes to,
Fixed Network menus, commands, and databases as necessary for Itron to provide
Services. Itron shall hold, and shall cause each of its employees and
contractors to hold, all security badges, computer passwords and other security
codes and information relating to the Fixed Network in strict confidence, and
neither Itron nor any of its employees, contractors or agents shall permit any
unauthorized person to have any access to or possession of any of said items.
(d) Technical Library. DataCom shall maintain, and provide Itron
with access to, a technical library at the Greentree Operation Center for
storage and maintenance of all related Fixed Network agreements, back-up
software, installation
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guides, operators manuals, service manuals, engineering change orders,
specifications, service bulletins and reports associated with installation,
operation, maintenance and administration of the Fixed Network and Software.
Itron will support DataCom as the co-proprietor of this library. Unless
specifically identified as "Public Information", all materials maintained in the
technical library shall be Confidential Information, and each Party agrees to
not copy, make available or distribute materials, documents, or Software from
the technical library to any third party for any reason without prior written
consent from the other Party.
(e) Communications. Itron will maintain the routers and other
frame relay communications Equipment as set forth on Schedule "C" between the
NCN sites and the Greentree and Spokane Operation Centers at its own cost and
expense, other than the communications charges, which will be the responsibility
of DataCom. In addition to the circuits required for operation of the Fixed
Network, these circuits will include links to Itron for Disaster Recovery
Services and remote access support services. Itron shall use these support links
solely for its system maintenance and support activities as documented herein,
and shall not make changes to the Fixed Network without prior authorization of
DataCom. DataCom shall work with Itron and the communications service provider
toward establishing a working relationship that will enable Itron to perform the
Services hereunder.
(f) Returned Materials. Prior to returning any Covered Component
to Itron for Service, DataCom will request Itron to assign a return materials
authorization ("RMA") number to the request. Upon issuance of the RMA, DataCom
will return the Covered Component via prepaid freight to Itron's servicing
location with reference to the assigned RMA number on all shipping labels and
documents. Upon receiving returned Covered Components from DataCom and
completion of Services, if applicable, Itron will return materials to DataCom
via prepaid freight.
(g) Reserve Inventory. The following items (the "RESERVE
INVENTORY") are among the assets purchased by DataCom pursuant to the Asset
Purchase Agreement:
Item Quantity
---- --------
DataPak 1
ERTs 3,000
Sentry Devices 1,000
CCUs 300
NCNs 2
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DataCom shall have the right to hold and use the Reserve Inventory as and when
it, in its sole discretion, determines. Itron shall have no right to use any of
the Reserve Inventory in connection with its services hereunder without the
prior written approval of DataCom. Itron shall have no obligation to replenish
any of the Reserve Inventory used by DataCom.
(h) Maintenance Inventory. The following items (the "MAINTENANCE
INVENTORY") are among the assets purchased by DataCom pursuant to the Asset
Purchase Agreement:
Item Quantity
---- --------
DCU 1
ERTs 2,000
Sentry Devices 1,000
CCUs 200
NCNs 3
Routers 3
Telestructures 10
DataCom, at its expense, will own, warehouse and make available to Itron the
Maintenance Inventory for the performance of the maintenance responsibilities
described herein and at no cost to Itron. DataCom shall supply Itron with
information regarding the disposition of any such assets used for maintenance or
expansion purposes that are not Itron's responsibility under this Agreement.
DataCom agrees that the Maintenance Inventory will be used exclusively in
connection with the Fixed Network for exchange of field equipment on a "like for
like basis", or, upon payment of any associated incremental cost (including the
cost of additional CCU or NCN equipment that may be required to be installed),
on a "non-like for like" (e.g., Sentry to ERT, or ERT to Sentry), basis and,
will also make these materials available to Itron service representatives. As
additional consideration for the fees payable by DataCom pursuant to Section 5,
from time to time, within 30 Business Days after its receipt of a written report
from DataCom showing that the quantities of the Maintenance Inventory held by
DataCom are less than the numbers shown above, Itron, upon DataCom's request,
shall transfer title, free and clear of all liens and encumbrances, and deliver
to DataCom, such additional quantities of such materials as are necessary to
maintain the quantities of Maintenance Inventory as listed above.
(i) Service Reports/Data. Itron and DataCom will complete
applicable installation, operation, and maintenance reports/data as documented
and listed in Schedule "B", relating to any/all services performed on Covered
Components. Reports may be submitted in a machine-readable format via standard
media or pre-determined file formats on a monthly basis.
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4.3 OBLIGATIONS OF DATACOM
(a) Software Releases. Any Software Releases provided to DataCom
pursuant to this Agreement are exclusively for DataCom's operation of the
Covered Components and Fixed Network. DataCom, in accordance with the terms of
the Agreement, shall install or permit Itron to install all fully tested and
approved Maintenance Releases made available by Itron that do not adversely
affect the functionality of any portion of the Fixed Network.
(b) Covered Components. DataCom shall maintain a database of all
Equipment, Software, Software Releases and other Covered Components, including
installed quantities, in a format that allows printing of a report similar to
that set forth on Schedule "C". The database information will initially be
provided by Itron and will include manufacturer, model and serial numbers,
equipment and software revision numbers, physical location, accessories, etc.,
and be maintained in machine readable format with updated summaries prepared
every thirty (30) days and made available to Itron upon request.
(c) Operation Standards. DataCom agrees to operate the Fixed
Network and Covered Components with appropriately trained personnel and in
accordance with the standard operating practices that were in effect as of the
Effective Date and modified from time to time thereafter pursuant to this
Agreement as provided to DataCom by Itron.
(d) Leases, License and Permits. DataCom, with Itron's
cooperation as necessary, shall maintain all NCN site leases, City of Pittsburgh
license fees and FCC licenses required to operate the Fixed Network, except such
licenses as may be sub-licensed to DataCom by Itron pursuant to the Radio
Frequency Sharing Agreement, which licenses shall be maintained by Itron at its
sole cost and expense throughout the Term of this Agreement.
(e) Facilities. DataCom shall make reasonable and appropriate
office space for four people and warehouse space for the Itron Equipment
available at no cost to Itron in connection with Itron's performance of its
obligations hereunder. DataCom will, in good faith, attempt to accommodate up to
an additional two people if reasonably required by Itron to perform Services
hereunder.
(f) Troubleshooting. Prior to initiating any request for Standard
Service under Article II of this Agreement, DataCom shall follow the standard
operating procedures (as they exist on the Effective Date and as they may be
modified thereafter) for the Fixed Network data center to qualify and correct
operationally related Covered Component problems. These efforts include
activities that can be performed by DataCom as part of its Fixed Network data
center operations. Examples of such procedures include, but are not limited to,
normal execution of monitoring or diagnostic software,
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system tests, communications tests, electrical power checks, component reset or
recovery routines. Once these efforts have been made, the Itron Customer Support
Center will be contacted for routine issues. DataCom may contact the Itron
Service Administrator immediately for Critical Nonconformity issues to review
other alternatives and to take such action as may be required by this Agreement.
(g) System Data. Upon receipt of a written request from Itron,
DataCom shall provide such up-to-date Fixed Network configuration and system
performance data as is reasonably requested in writing by Itron in connection
with its delivery of Services as outlined herein, provided that if a Critical
Nonconformity exists, such request may be oral.
(h) Test Environment. DataCom shall have and operate a test
environment that mirrors a portion of its production Fixed Network environment
for acceptance testing of Covered Components. DataCom will provide Itron with
assistance for Fixed Network testing of Covered Components as required prior to
installation into the Fixed Network. All test environment equipment is
considered a Covered Component.
(i) DataCom Contractors. DataCom shall require that all
contractors who may perform DataCom's responsibilities as documented herein
incorporate Itron's published installation and/or operating procedures as a
contractor requirement. Itron may consider any request for Service (including
any Supplemental Service for which the charges pursuant to this Agreement will
apply) initiated by a contractor identified by DataCom to Itron in writing as an
"authorized DataCom contractor".
(j) Field Investigation. DataCom shall dispatch appropriate
employee or contract personnel to investigate, and if necessary exchange,
Nonconforming ERTs, Sentry Devices, telenetics equipment and meters. As part of
its field investigation process, DataCom shall make available all labor,
materials, meters, equipment from the Maintenance Inventory, tools, and
consumable supplies (meter seals, wire, equipment, etc.), necessary for
de-installation and re-installation of ERTs, Sentry Devices and meters, as
necessary to restore proper operation.
(k) Disposal. DataCom agrees to dispose of all DataCom owned
materials removed from service in accordance with Applicable Laws and reasonable
Itron recommendations. DataCom agrees that any DataCom-owned materials forwarded
to Itron that require disposal, exclusive of units returned for repair or
replacement at Itron's request, may be returned to DataCom at DataCom's expense.
(l) Backup. DataCom shall follow standard operating practices to
periodically check the operation of all Fixed Network backup Covered Components
located in the Greentree Operations Center as of the Effective Date as modified
thereafter pursuant to the Agreement.
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(m) Use of Covered Components. DataCom agrees to use all Covered
Components for the purpose of operating, maintaining and expanding the Fixed
Network pursuant to the Agreement.
SECTION 5. COMPENSATION; CONDITIONS PRECEDENT
5.1 INITIAL FEE
On or prior to the first anniversary of the Effective Date,
DataCom will pay to Itron the sum of four hundred and seventy five thousand
dollars ($475,000.00) (the "INITIAL FEE") payable via wire transfer as
instructed by Itron.
5.2 ANNUAL FEE FOR STANDARD SERVICES
(a) Initial Annual Fee. For each twelve month period of the Term,
DataCom will pay Itron, via wire transfer, for the Standard Services a fee of
six hundred and ninety five thousand five hundred dollars ($695,500.00), payable
in four (4) equal installments due on the last day of each consecutive three
month period of the Term, beginning June 30, 2000. Undisputed payments not
received within thirty (30) days after the date upon which such payment is due
will bear interest at a rate equal to the lesser of one and one-half percent
(1-1/2%) per month or the maximum rate permitted under Applicable Law. Payments
to be made under this Paragraph 5.2 are subject to offset and/or reduction
pursuant to the applicable provisions of this Agreement and the Purchase
Agreement.
(b) Increases in Annual Fee. The fee payable pursuant to Section
5.2(a) is subject to increase from time to time, as agreed by the Parties, upon
the addition of additional Covered Components to the Fixed Network pursuant to
the EnSite Agreement or Supplemental Services (other than under Paragraph
2.8(g)).
(c) Withholding of Annual Fee. In the event that all items
required to be initially delivered by Itron pursuant to the Escrow Agreement are
not so delivered on or before May 31, 2000, the fee payable by DataCom pursuant
to Section 5.2(a) may, at DataCom's option, be withheld until such delivery is
made, at which time all amounts so withheld by DataCom shall be paid to Itron.
5.3 FEES FOR SUPPLEMENTAL SERVICES
For all Supplemental Services, unless otherwise provided in this
Agreement, Itron will invoice DataCom at the Preferred Price. Payment will be
due within 30 days of submission. Undisputed invoices not paid within 30 days of
receipt will bear interest at a rate equal to the lesser of one and one-half
percent (1-1/2%) per month or the maximum rate permitted under Applicable Law.
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5.4 LETTER OF CREDIT
Itron shall, on or prior to the Effective Date, furnish and
throughout the Term maintain for the benefit of DataCom a standby letter of
credit, issued by a Qualifying Bank acceptable to DataCom (the "LETTER OF
CREDIT"), containing the terms and conditions set forth in Paragraph 5.5, and in
the L/C Amount. The Letter of Credit shall be security for Itron's faithful
performance of all Services and its other obligations hereunder during the Term
of this Agreement. Itron shall be responsible for making sure the Letter of
Credit does not expire (without renewal) prior to the expiration of the Term.
5.5 Conditions of Letter of Credit
(a) Conditions of Draw. DataCom shall be entitled to draw any
amounts up to the total amount available under the Letter of Credit established
under Paragraph 5.4 upon any of the following conditions:
(i) an Event of Default has occurred under Paragraph 6.1;
(ii) a replacement Letter of Credit has not been delivered
to DataCom on or before 30 days before the expiration of the Letter of Credit;
or
(iii) a draw on the Letter of Credit is permitted pursuant
to Paragraph 2.7 or Paragraph 8.5.
(b) Other Conditions. The Letter of Credit shall provide (i) that
DataCom may draw on such Letter of Credit in any amount up to the total amount
of the Letter of Credit by providing a certificate executed by two officers of
DataCom stating that DataCom is entitled to draw on the Letter of Credit
pursuant to Paragraph 5.5 (a) and specifying the amount of such draw; and (ii)
that draws will be in immediately available funds no later than the next three
(3) Business Days following delivery of the certificate.
SECTION 6. EVENTS OF DEFAULT
6.1 EVENTS OF DEFAULT
(a) The following shall constitute Events of Default, each of
which shall entitle DataCom to exercise the remedies set forth in Paragraph 6.2
hereof:
(i) Itron's failure to perform its obligations pursuant to
Paragraph 2.9(a);
(ii) Itron's failure to perform its obligations pursuant
to Paragraph 5.4;
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(iii) Itron's sale of all or substantially all of its
assets or business to, any Person, and either (A) such Person does not
specifically assume all of Itron's obligations under this Agreement or (B) such
Person is not acceptable to DataCom in its sole discretion;
(iv) Itron assigns this Agreement in violation of
Paragraph 10.3; and
(v) The appointment of a receiver, custodian, or trustee
of Itron for all or substantially all of the property of Itron; Itron makes an
assignment for the benefit of creditors other than an assignment for security or
collateral purposes in connection with a financing; Itron convenes a meeting of
its creditors, or any class thereof, for purposes of effecting a moratorium upon
or extension or composition of its debts and thereafter is unable to obtain an
agreement with such creditors for a moratorium upon or extension or composition
of its debts; Itron shall have been adjudicated bankrupt or insolvent or all or
substantially all of its property shall have been sequestered by an order of
federal, state, foreign or other court of competent jurisdiction; there shall
have been a filing of an involuntary petition against Itron seeking liquidation,
reorganization, arrangement, readjustment of its debts or for any other relief
under the Bankruptcy Code or under any other act or law pertaining to insolvency
or debtor relief, whether state, federal or foreign, now or hereafter existing,
which petition shall not be dismissed within sixty (60) days after such filing;
Itron has commenced any bankruptcy, reorganization or insolvency proceeding or
other proceeding under the Bankruptcy Code or under any other act or law
pertaining to insolvency or debtor relief, whether federal, state or foreign,
now or hereafter existing, or Itron has consented to the taking of any of the
foregoing actions; or Itron voluntarily dissolves or terminates its corporate
existence or is terminated or dissolved, liquidates or is liquidated.
(b) In the event that Itron breaches or fails to perform
any of its covenants, agreements or obligations under this Agreement, and such
breach or failure continues for a period of forty-five (45) days following
Itron's receipt of written notice from DataCom of such breach or failure to
perform (the "CURE PERIOD"), then for each day following such Cure Period that
the breach or failure continues, DataCom shall have the option, exercisable in
its sole discretion, to withhold and deduct from the next scheduled fee payment
under Paragraph 5.2, an amount equal to (i) the annual fee then payable under
Paragraph 5.2, divided by (ii) 365. If such breach or failure to perform
continues for a period of thirty (30) days beyond the end of the Cure Period,
then DataCom shall have the right, at its option, to terminate the Agreement
pursuant to Paragraph 7.2, and upon such termination, DataCom may exercise any
or all of the remedies in Paragraph 6.2 (in addition to any other rights and
remedies it may have at law, in equity or otherwise, including those under this
Agreement, the Purchase Agreement, the Escrow Agreement and the Radio Frequency
Sharing Agreement). If
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Itron has advised DataCom in writing that the breach or failure is not capable
of being cured within the Cure Period through the exercise of Itron's reasonable
best efforts, and provided that (x) Itron has commenced and is continuing to use
its reasonable best efforts to cure the breach or failure, and (y) DataCom is
satisfied that such reasonable best efforts will result in a timely cure, then
the Cure Period shall be extended for the additional time necessary to achieve
such cure.
6.2 REMEDIES FOR EVENTS OF DEFAULTS
Upon the occurrence of an Event of Default under Paragraph
6.1(a), and as permitted by Paragraph 6.1(b), DataCom shall be entitled to
exercise any or all of the following remedies in addition to any other rights
and remedies it may have, at law, in equity or otherwise, including those under
this Agreement, the Purchase Agreement, the Escrow Agreement and the Radio
Frequency Sharing Agreement:
(a) DataCom may immediately draw down all or any portion of the
Letter of Credit required to be maintained at that time;
(b) DataCom may cause all items held in escrow pursuant to the
Escrow Agreement to be delivered to it; and
(c) DataCom may terminate this Agreement pursuant to Paragraph
7.2 hereof.
6.3 CHANGE IN CONTROL
Upon the occurrence of a Change in Control, DataCom may cause
all items held in escrow pursuant to the Escrow Agreement to be delivered to
it for its use, to the extent necessary in DataCom's sole judgement, in
connection with the Fixed Network.
SECTION 7. TERM AND TERMINATION
7.1 TERM
The term of this Agreement will commence on the Effective Date,
unless earlier terminated as provided elsewhere in this Agreement, and will
automatically terminate at the end of December 31, 2013 (the "TERM"); provided,
however, that the Term shall be automatically extended for an additional two
year period at the end of the Term and at the end of each subsequent two year
extension period unless either (a) Itron has given DataCom written notice of its
intent not to renew at least two years prior to the end of the Term or any
extension period or (b) DataCom has given Itron notice of its intent not to
renew at least six months prior to the end of the Term or any extension period.
Each extension of Term shall be subject to a commercially reasonable adjustment
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to the compensation payable under Paragraphs 5.2 and 5.3 hereof. The Term shall
include each such additional extension period.
7.2 TERMINATION BY DATACOM
Without limiting any other rights or remedies (including, without
limitation, any right to seek damages and other monetary relief) that DataCom
may have in law or otherwise, DataCom may terminate this Agreement (a) upon the
occurrence of an Event of Default, (b) as provided in Paragraph 6.1(b), or (c)
at any time at its convenience upon 120 days notice to Itron. In the event of
such termination for convenience, Itron shall discontinue Services hereunder in
accordance with the termination notice, effective on the date of such
termination, the Parties shall mutually agree on the procedures for termination
and DataCom shall make payment to Itron in the amount of (i) $1.0 million if the
termination notice is given on or prior to the fifth anniversary of the
Effective Date, (ii) $500,000 if the termination notice is given after the fifth
anniversary but on or prior to the tenth anniversary of the Effective Date and
(iii) $250,000 if the termination notice is given after the tenth anniversary of
the Effective Date. Upon making such payment, DataCom shall receive from Itron
all licenses and other rights necessary or appropriate to operate the Fixed
Network and Covered Components.
7.3 TERMINATION BY ITRON
Without limiting any other rights or remedies (including, without
limitation, any right to seek damages and other monetary relief) that Itron may
have in law or otherwise, Itron may terminate this Agreement upon written notice
if:
(a) DataCom breaches its obligations to make payments under
Section 5 hereof, unless such failure to pay is covered by a bona fide, good
faith dispute, provided that (i) Itron sends written notice to DataCom
describing the breach, and (ii) DataCom does not cure the breach within thirty
(30) days following its receipt of such notice; or
(b) There is an appointment of a receiver, custodian, or trustee
of DataCom for all or substantially all of the property of DataCom; DataCom
makes an assignment for the benefit of creditors other than an assignment for
security or collateral purposes in connection with a financing; DataCom convenes
a meeting of its creditors, or any class thereof, for purposes of effecting a
moratorium upon or extension or composition of its debts and thereafter is
unable to obtain an agreement with such creditors for a moratorium upon or
extension or composition of its debts; DataCom shall have been adjudicated
bankrupt or insolvent or all or substantially all of its property shall have
been sequestered by an order of federal, state, foreign or other court of
competent jurisdiction; there shall have been a filing of an involuntary
petition against DataCom seeking liquidation, reorganization, arrangement,
readjustment of its debts or for any other relief under the Bankruptcy Code or
under any other act or law pertaining to
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insolvency or debtor relief, whether state, federal or foreign, now or hereafter
existing, which petition shall not be dismissed within sixty (60) days after
such filing; DataCom has commenced any bankruptcy, reorganization or insolvency
proceeding or other proceeding under the Bankruptcy Code or under any other act
or law pertaining to existing or DataCom has consented to the taking of any of
the foregoing actions; or DataCom voluntarily dissolves or terminates its
existence or is terminated or dissolved, liquidates or is liquidated.
SECTION 8. INDEMNIFICATION
8.1 OF DATACOM
Itron will indemnify, hold harmless and defend DataCom, its
directors, officers, employees and agents from and against any and all losses,
damages, liabilities, claims, penalties, fines and other costs and expenses,
including reasonable attorneys' fees and costs of settlement ("LOSSES") that
DataCom reasonably incurs arising from Itron's performance of or failure to
perform any Services required to be performed by Itron under this Agreement,
including, without limitation, customer claims relating to Sentry Device
telephone line seizures. However, Itron will have no such obligation regarding
any Losses to the extent they arise from DataCom's negligence or willful
misconduct.
8.2 OF ITRON
DataCom will indemnify, hold harmless and defend Itron, its
directors, officers, employees and agents from and against any and all Losses
that Itron reasonably incurs from DataCom's performance or failure to perform
any obligation under this Agreement. However, DataCom will have no such
obligation regarding any Losses to the extent they arise from Itron's negligence
or willful misconduct.
8.3 INTELLECTUAL PROPERTY INDEMNIFICATION
Itron will indemnify, hold harmless and defend DataCom, its
directors, officers, employees and agents from and against all Losses that
DataCom reasonably incurs in connection with any third party claim that any
Covered Component, Software or Software Release provided by Itron under this
Agreement infringes or misappropriates the U.S. copyright, trade secret or
trademark rights of a third party ("INFRINGING MATERIAL"). If the use of any
Infringing Material is enjoined by a court of competent jurisdiction, Itron,
shall, at Itron's option and sole cost and expense, either (a) procure for
DataCom the right to continue use of the Infringing Material, (b) replace the
Infringing Material with material that is substantially similar in functionality
and performance, but noninfringing, (c) modify the Infringing Material to
eliminate the infringement or misappropriation, or (d) terminate the enjoined
activity with an appropriate reduction in
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35
the Annual Fee; provided however, that such termination and reduction shall not
excuse Itron from performance of its obligations pursuant to its Agreement.
Itron will have no liability under this Paragraph for any infringement or
misappropriation due to any repair, maintenance, service modification to or
alteration of the Fixed Network performed by any personnel other than Itron
personnel (including its employees, agents and contractors) or Itron-trained
DataCom personnel (including its employees, agents and contractors) after the
Effective Date which has not been approved by Itron as required by the terms of
this Agreement; or (ii) any combination of the Fixed Network in whole or in part
with any material or software not included in the Fixed Network which has not
been installed by Itron personnel or Itron-trained DataCom personnel and which
has not been approved by Itron as required by the terms of this Agreement.
8.4 PROCEDURE
In connection with any claim or action described in this Section
8, the Party seeking indemnification will (a) give the indemnifying Party prompt
written notice of the claim, (b) cooperate with the indemnifying Party (at the
indemnifying Party's expense) in connection with the defense and settlement of
the claim, and (c) permit the indemnifying Party to control the defense and
settlement of the claim, provided that the indemnifying Party must diligently
defend the claim and may not settle the claim without the indemnified Party's
prior written consent (which will not be unreasonably withheld or delayed).
Further, the indemnified Party (at its cost) may participate in the defense and
settlement of the claim.
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8.5 PAYMENT OF INDEMNIFICATION CLAIMS
Losses which are indemnified against hereunder shall be paid by
the Indemnifying Party within 30 days after such Party's receipt of notice of
such Losses, which notice shall include such evidence as is reasonably necessary
to establish the amount of the Losses and the Indemnifying Party's liability
therefor. If and to the extent Itron does not pay for any indemnified Losses
within such 30 day period, then, in addition to any other rights and remedies it
may have at law, in equity or otherwise, including those under the Agreement,
the Purchase Agreement, the Escrow Agreement and the Radio Frequency Sharing
Agreement, DataCom may, at its option, (a) set off the full amount of such
unpaid Losses against the next payment(s) due under Paragraphs 5.2 and/or 5.3
hereof and/or (b) draw up to the full amount of such unpaid Losses under the
Letter of Credit.
SECTION 9. LIMITATION ON LIABILITY
9.1 DISCLAIMER
EXCEPT AS OTHERWISE SET FORTH HEREIN, ITRON HEREBY DISCLAIMS ALL
OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF ITRON, EXPRESS OR IMPLIED,
ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ALL SERVICES, EQUIPMENT, SOFTWARE,
GOODS, AND OTHER ITEMS FURNISHED BY ITRON HEREUNDER OR ANY OTHER ITEMS SUBJECT
TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION: (A) ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; (B) ANY IMPLIED WARRANTY
ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE OR USAGE OF TRADE; AND (C)
ANY IMPLIED WARRANTY OF NON-INFRINGEMENT.
9.2 LIMITATION ON LIABILITY
THE TOTAL CUMULATIVE LIABILITY OF ITRON WHETHER BASED ON
WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), OR
OTHERWISE, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE PERFORMANCE OF THE
SERVICES (INCLUDING, WITHOUT LIMITATION, AMOUNTS DRAWN AGAINST THE LETTER OF
CREDIT), SHALL IN NO CASE EXCEED $30 MILLION, AND DATACOM HEREBY RELEASES ITRON
FROM ANY LIABILITY IN EXCESS OF SUCH AMOUNT. THIS MONETARY LIMITATION SHALL
SURVIVE THE FAILURE OF ANY EXCLUSIVE REMEDY.
ITRON SHALL NOT BE LIABLE, WHETHER BASED ON WARRANTY, CONTRACT,
TORT (INCLUDING NEGLIGENCE AND STRICT
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37
LIABILITY), OR OTHERWISE, FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, EXEMPLARY,
PUNITIVE OR INCIDENTAL LOSS OR DAMAGE, LOSS BY REASON OF SERVICE INTERRUPTION,
COSTS OF CAPITAL OR EXPENSES THEREOF, LOSS OF PROFITS OR REVENUES OR THE LOSS OF
USE THEREOF, CLAIM OF ANY THIRD PARTY FOR LOSS CAUSED BY DELAYS IN MANUFACTURE
OR OPERATION, AND DATACOM HEREBY RELEASES ITRON FROM ANY LIABILITY FOR ALL SUCH
LOSSES AND DAMAGES.
THIS SECTION 9.2 SHALL NOT LIMIT OR RESTRICT THE AVAILABILITY
OF SPECIFIC PERFORMANCE OR OTHER INJUNCTIVE RELIEF TO THE EXTENT OTHERWISE
AVAILABLE UNDER APPLICABLE LAW.
SECTION 10. MISCELLANEOUS
10.1 EXCUSABLE DELAY
(a) Neither Party will be liable for, or be considered to be in
breach of or default under this Agreement because of a Force Majeure Event.
(b) A Party affected by a Force Majeure Event shall notify the
other Party promptly after becoming aware of the Force Majeure Event, giving
details of the circumstances constituting the Force Majeure Event and the likely
duration thereof, if reasonably known, and shall keep the other Party informed
of any changes in circumstances, including when such Force Majeure Event ends.
Each Party shall also notify the other Party of any events of which it is aware
which may reasonably be expected, with the lapse of time or otherwise, to become
a Force Majeure Event. Following the receipt of such notice, the Parties shall
consult in good faith to assess the Force Majeure Event and any ways in which
the same may be avoided or its effects mitigated.
(c) A Party affected by a Force Majeure Event shall use
reasonable best efforts to place itself in a position to fulfill its obligations
hereunder, and if unable to fulfill any obligation by reason of a Force Majeure
Event such Party shall exercise all reasonable best efforts to remove such
disability at the earliest practicable time.
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(d) A Party's performance shall be excused only for the minimum
period necessary to return to performance hereunder through the exercise of all
reasonable best efforts. To the extent a Force Majeure Event prevents Itron from
performing any Services, DataCom shall be relieved of the obligation to make
payments for the pro rata period of time during which the Services are not
performed only if Itron is not exercising all reasonable best efforts to perform
the Services.
10.2 NONDISCLOSURE
Each Party will protect the Confidential Information of the other
Party from misappropriation and unauthorized use or disclosure, and at a
minimum, will take precautions at least as great as those taken to protect its
own confidential information of a similar nature. Without limiting the
foregoing, the Receiving Party will: (a) use such Confidential Information
solely for the purposes for which it has been disclosed; and (b) disclose such
Confidential Information only to those of its employees, agents, consultants,
and others who have a need to know the same for the purpose of performing this
Agreement and who are informed of and agree to a duty of nondisclosure. The
Receiving Party may also disclose Confidential Information of the Disclosing
Party to the extent necessary to comply with Applicable Law or legal process,
provided that the Receiving Party uses reasonable efforts to give the Disclosing
Party prompt advance notice thereof. Subject to the rights of DataCom under the
Escrow Agreement and the Purchase Agreement, upon request of the other Party, or
in any event upon any termination or expiration of the Term, each Party shall
return to the other all materials, in any medium, which contain, embody, reflect
or reference all or any part of any Confidential Information of the other Party.
10.3 ASSIGNMENT
Neither Party will assign all or any part of this Agreement or
any of its rights under this Agreement without the prior written consent of the
other Party, which may be given or withheld in such other Party's sole
discretion. However (a) either Party may assign all of its rights, title, and
interest in this Agreement, upon thirty (30) days' prior written notice to the
other Party, to an affiliate which controls, is controlled by or is under common
control with, such Party, where such successor agrees in writing to be bound by
all of the provisions of this Agreement and (b) DataCom may assign all of its
rights, title and interest in this Agreement with 30 days prior written notice
to Itron, to a non-affiliated Party which is not a competitor of Itron. No
assignment, with or without the other Party's consent, will relieve a Party from
its obligations under this Agreement. Subject to the foregoing restriction on
assignment, this Agreement will be fully binding upon, inure to the benefit of,
and be enforceable by the Parties and their respective successors and assigns.
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10.4 NOTICES
Any notice or other communication under this Agreement given by
either Party to the other Party shall be either (a) in writing and delivered by
first class, registered, or certified U.S. mail or overnight delivery service,
return receipt requested, postage prepaid, or (b) sent by telex or facsimile and
then acknowledged as received by return telex or facsimile by the intended
recipient. Notices shall be deemed received only upon actual receipt. Notices
shall be directed to the intended recipient at the address or numbers specified
below. Either Party may from time to time change such address or numbers by
giving the other Party notice of such change in accordance with this paragraph.
Itron: Itron, Inc.
0000 Xxxxx Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Phone: (000) 000-0000
Fax: (000) 000-0000
DataCom: DataCom Information Systems, LLC
Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: President
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Duquesne Light Company
000 Xxxxxxx Xxxxxx
Mail Drop 00-000
Xxxxxxxxxx, XX 00000
Attn: Legal Dept.
Fax: (000) 000-0000
10.5 WAIVER
The failure of either Party to insist upon or enforce strict
performance of any of the provisions of this Agreement or to exercise any rights
or remedies under this Agreement will not be a waiver to any extent of such
Party's right to assert or rely upon
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any such provisions, rights, or remedies in that or any other instance; rather,
the same will be and remain in full force and effect.
10.6 INDEPENDENT CONTRACTOR
Each Party is engaged in an independent business and will perform
its obligations under this Agreement as an independent contractor and not as an
agent, partner, franchisee, or representative of any other Party. Neither Party
will have any right or authority to create any obligation or make any
representation or warranty in the name or on behalf of the other Party.
10.7 COUNTERPARTS
This Agreement may be executed in any number of counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
10.8 HEADINGS
The headings of sections, paragraphs, and subsections of this
Agreement are for convenience of reference only and are not intended to
restrict, affect or be of any weight in the interpretation or construction of
the provisions of this Agreement.
10.9 GOVERNING LAW
The laws of the Commonwealth of Pennsylvania will govern this
Agreement without regard to any choice of law principles to the contrary.
10.10 ENTIRE AGREEMENT
This Agreement and the exhibits hereto constitute the entire
agreement, and supersedes any and all prior agreements, between the Parties with
regard to the subject matter hereof. No amendment, modification or waiver of any
of the provisions of this Agreement will be valid unless set forth in a written
instrument signed by the Party to be bound thereby.
10.11 DISPUTE RESOLUTION
(a) Any dispute, controversy or claim arising out of or relating
to this Agreement (including all schedules and exhibits that are related to or
incorporated by the Agreement) or the breach, termination or validity thereof (a
"DISPUTE") shall be submitted to management of the Parties for resolution. In
the event said Dispute is not resolved within fourteen (14) days, then either
Party may chose to bring an action in a
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court of competent jurisdiction, or the Parties may, by mutual agreement, agree
to proceed with arbitration in accordance with Paragraph 10.11(b).
(b) Arbitration.
(i) Disputes may, by mutual agreement of the Parties, be
referred to arbitration administered by the American Arbitration Association
(the "AAA") under its Commercial Arbitration Rules then in effect (the "RULES")
except as modified herein. The arbitration shall be held in Pittsburgh,
Pennsylvania.
(ii) There shall be three arbitrators of whom each Party
shall select one within five (5) days of respondent's receipt of claimant's
demand for arbitration. The two Party-appointed arbitrators shall within five
(5) days of the selection of the second arbitrator, select a third arbitrator to
serve as chair of the tribunal, who shall be qualified by professional
experience and education to rule upon the issue presented. If any arbitrator has
not been appointed within the time limits specified herein, such appointment
shall be made by the AAA upon the written request of either Party within five
(5) days of such request.
(iii) The hearing shall be held no later than forty-five
(45) days following the appointment of the last of the three arbitrators and the
award shall be rendered no later than fifteen (15) days following the close of
the hearing.
(iv) The arbitral tribunal shall permit prehearing
discovery that is relevant to the subject mater of the Dispute taking into
account the Parties' desire that the arbitration be conducted expeditiously and
cost effectively. All discovery shall be completed within forty-five (45) days
of the appointment of the third arbitrator.
(v) The award of the arbitrators shall be final and
binding between the Parties, and a judgment may be entered enforcing it in any
court having jurisdiction over the Parties.
(vi) Each Party shall bear its own costs of arbitration,
and the costs of the arbitrators shall be divided equally between them. If a
Party chooses to file an appeal, however, and does not substantially prevail on
the merits of its claim, that Party shall bear all of the reasonable costs and
expenses of both Parties for the appeal.
(c) Continued Performance. This Agreement and the rights and
obligations of the Parties shall remain in full force and effect pending the
resolution of any Dispute in any arbitration proceeding hereunder, and both
Parties shall continue to perform hereunder.
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10.12 CONSENT
Whenever the consent or authorization of a Party is required hereunder,
such consent or authorization shall not be unreasonably withheld or delayed,
unless specifically provided otherwise herein.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
signed by their duly authorized representatives as of the Effective Date with
the intent to be legally bound.
ITRON: DATACOM:
ITRON, INC. DATACOM INFORMATION SYSTEMS, LLC
By: By:
------------------------------- -------------------------------
XxXxx X. Xxxxxxx Xxxxxx X. Xxxxxxxx
President and Chief Executive President
Officer
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