SECTIONS

PAGE

1.

DEFINITIONS.

1

2.

AGREEMENT, EXHIBITS, CONFLICTS

6

3.

RESPONSIBILITIES OF OWNER.

6

4.

RESPONSIBILITIES OF SUPPLIER.

6

5.

COVENANTS, REPRESENTATIONS AND WARRANTIES

7

6.

PRICES AND PAYMENT

8

7.

COMMENCEMENT AND SCHEDULING OF THE WORK

9

8.

EXCUSABLE DELAY.

10

9.

SUBCONTRACTORS AND VENDORS

10

10.

LABOR RELATIONS

11

11.

INSPECTION; EFFECT OF REVIEW AND COMMENT

12

12.

RESERVED

12

13.

COMPLETION

12

14.

LIQUIDATED DAMAGES AND RETENTION.

13

15.

CHANGES IN THE WORK.

13

16.

WARRANTIES

14

17.

EQUIPMENT IMPORTATION; ORDERING; TITLE.

15

18.

INTELLECTUAL PROPERTY RIGHTS.

16

19.

DEFAULT.

16

20.

EARLY TERMINATION

17

21.

SUSPENSION.

17

22.

INSURANCE.

18

23.

COMPLIANCE WITH LAWS AND PHI REQUIREMENTS.

18

24.

INDEMNIFICATION

19

25.

PATENT INFRINGEMENT AND OTHER INDEMNIFICATION RIGHTS.

19

26.

PROCEDURE FOR INDEMNIFCATION UNDER SECTIONS 24 or 25

20

27.

TREATMENT OF CONFIDENTIAL INFORMATION.

21

28.

LICENSE TO USE PROPRIETARY INFORMATION.

21

29.

ACCEPTANCE.

24

30.

UPGRADES AND FUTURE PACKAGE OPTIONS.

24

31.

OWNER’S RIGHT TO COPY AND TO FORM UPDATED WORKS

24

32.

DOCUMENTATION.

25

33.

CLAIMS.

25

34.

RELEASE OF LIENS.

25

35.

NOTICES AND COMMUNICATIONS

26

36.

LIMITATIONS OF LIABILITY AND REMEDIES.

26

37.

AUDIT

27

38.

DISPUTES.

27

39.

MISCELLANEOUS

28

EXHIBIT A – Safety

EXHIBIT B – Statement of Work (SOW)

EXHIBIT C – Software License Agreement

EXHIBIT D – Third-Party Software Deliverables and Terms

EXHIBIT E – Maintenance Agreement

EXHIBIT F – Supplier’s Final Release of Liens Certificate

EXHIBIT G – Subcontractor’s Release of Liens Certificate

EXHIBIT H – Contract Change Authorization Form

EXHIBIT I – NOT USED

EXHIBIT J – Description of SSN Equipment, Software, and System

EXHIBIT K – Pricing and Payment Schedule

EXHIBIT L – Hosting Agreement

EXHIBIT M – Source Code and Manufacturing Know-How Escrow Agreement

1.

DEFINITIONS

1.1

For the purposes of this Contract, except as otherwise expressly provided, the following terms shall have the following meanings. The meanings specified are applicable to both singular and plural.

(a)

Owner, Supplier, the Site or the performance of any portion of the Work or the Work taken as a whole, and the operation of the System; or

(b)

safety and the prevention of injury to persons and the damage to property on, about or adjacent to the Site or any other location where any other portion of the Work shall be performed.

(a)

do not conform to the Statement of Work and Specifications either as contained in this Contract or issued by Supplier for the System; or

(b)

adversely affects the safe operation of the System during the System’s design life ***, assuming such Operation in accordance with appropriate operating procedures; or

(c)

demonstrably affects the *** of the System.

(a)

Owner Caused Delay which has adversely affected the schedule; or

(b)

Force Majeure event.

2.

AGREEMENT, EXHIBITS, CONFLICTS

2.1

Exhibits. This Contract includes the Exhibits attached hereto and any reference in this Contract to an “Exhibit” by letter designation or title shall mean one of the exhibits identified in the table of contents and such reference shall indicate such Exhibit herein.

2.2

Terms; References. Terms defined in a given number, tense, or form shall have the corresponding  meaning when used in this Contract with initial capitals in another number, tense or form. Except as otherwise expressly noted, reference to specific Sections, Subsections, and Exhibits are references to such provisions of or Exhibits to this Contract. References containing terms such as “hereof, “herein”, “hereto”, “hereinafter”, and other terms of like import are not limited in applicability to the specific provision within which such references are set forth but instead refer to this Contract taken as a whole. “Includes” or “including” shall not be deemed limited by the specific enumeration of items, but shall be deemed without limitation.

2.3

Conflicts in Documentation. If there is an express conflict between the provisions of this Contract or any Exhibit hereto, provisions of this Contract as it may be amended from time to time, take precedence over any Exhibit.  This Contract shall take precedence over any other or additional terms and conditions submitted by Owner in any Purchase Order or similar document (other than price, quantity, destination, and description of goods and services); provided, however, that such ***. Neither *** or *** shall be construed as ***.

3.

RESPONSIBILITIES OF OWNER

3.1

Project Communication.  Owner shall designate (by a Notice delivered to Supplier) appropriate individuals who shall act as primary points of contact for Supplier with respect to specific aspects of the Work.

3.2

Owner Provided Documents. Owner shall provide Supplier with all available information, as required, for the completion of the Work. All specifications and other Design Documents are provided by Owner to Supplier solely for the purpose of describing the Work that is to be provided by Supplier under this Contract. Owner will use reasonable efforts to minimize errors in information provided to Supplier.  Supplier, in performing the Work, shall use reasonable efforts to call attention to and verify critical aspects and details of the information provided by Owner.

4.

RESPONSIBILITIES OF SUPPLIER

4.1

Project Communication. Supplier shall designate (by a Notice delivered to Owner) appropriate individuals who shall act as primary points of contact for Owner with respect to specific aspects of the Work.

4.2

Scope. Supplier shall perform, furnish, and be responsible for, the Work, including labor, hardware, software, third-party software, and/or third-party imbedded software, as detailed in Exhibit B, necessary to provide an operable System in accordance with the provisions of this Contract; provided, however, that Owner reserves the right to specify, either in the SOW or otherwise, certain portions of the System that will be supplied by other Suppliers, vendors or by Owner (referred

to collectively as “Non-Supplier Work”). Supplier agrees to coordinate its Work with any Non-Supplier Work so as not to cause any delay in the Critical Path Schedule. 

4.3

Performance of Work. Supplier shall be duly registered, and shall hold whatever licenses are required for the specific work being performed. Supplier shall ensure that all of the Work complies with local, state and federal codes and regulations and with applicable Industry Standards. Supplier shall ensure that its personnel are familiar with the above codes, standards and regulations and their appropriate application.

4.4

Design of System. Supplier shall design the System so that it is capable of operating as specified in the Statement of Work, in compliance with Industry Standards, Applicable Laws and Applicable Permits.

4.5

Organization. Supplier shall maintain a qualified and competent organization with adequate capacity and knowledgeable personnel and facilities to execute the Work in a safe, efficient and professional manner at a rate of progress in accordance with the Key Date Schedule and the Critical Path Schedule.

5.

COVENANTS, REPRESENTATIONS AND WARRANTIES

5.1

Supplier Covenants, Representations and Warranties. Supplier covenants, represents, and warrants to Owner that:

(a)

Organization, Standing and Qualification. Supplier is a corporation, duly organized, validly existing, and in good standing under the laws of Delaware and has full corporate power authority to execute, deliver and perform its obligations hereunder and to engage in the business it presently conducts and contemplates conducting, and is and will be duly licensed or qualified and in good standing under the laws of Delaware and California.

(b)

Skills. Supplier has all the required authority, ability, skills, experience and capacity necessary to, and shall diligently, provide the Work in a timely and professional manner, utilizing sound engineering principles, project management procedures,  and supervisory procedures, all in accordance within best practices in the software industry. Supplier has the experience and skills necessary to determine, and Supplier has reasonably determined, that Supplier can perform the Work.

(c)

Enforceable Contract. This Contract has been duly authorized, executed and delivered by or on behalf of Supplier and is, upon execution and delivery, the valid and binding obligation of Supplier, enforceable against it in accordance with its terms, except as such enforceability may be limited  by applicable bankruptcy, insolvency, or similar laws affecting creditors’ rights generally and by general equitable  principles.

(d)

No Conflict. The execution, delivery and performance of this Contract by Supplier will not (a) conflict  with or cause any default  under (i) its organizational documents; (ii) any indenture,  mortgage,  chattel  mortgage, deed of trust, lease, conditional sales contract,  loan or credit arrangement or other agreement  or instrument to which Supplier  is a party or by which it or its properties may be bound or affected; or (iii) any Applicable Laws, or (b) subject  the System,  or any component part thereof or the Site (or any portion  thereof) to any lien other than as contemplated or permitted by this Contract.

(e)

No Suits; Proceedings. As of the Effective Date of this Contract,  there is no action, proceeding or governmental investigation pending  or, to Supplier’s knowledge, threatened against  Supplier  which questions the validity  of this Contract or Supplier’s intellectual property  rights, and there is no action,  proceeding or governmental investigation pending  or, to Supplier’s knowledge, threatened  which is likely to result in any material  adverse change in the ability  of Supplier  to perform  its obligations under this Contract.

(f)

Patents. Supplier owns or has the right to use all patents, trademarks, service  marks, trade names,  copyrights, licenses,  franchises, and permits necessary  to perform  the Work without  material  conflict with the rights of others; provided  that the remedy for breach of this Section 5.1 (f) is Supplier’s indemnification in accordance with Section 25.

(g)

System. Supplier acknowledges that this Contract constitutes an obligation to ***, complete to the extent specified in the SOW or otherwise, within the time and for the purpose designated herein; provided, however, that, as set forth in Section 4.2, Owner reserves the right to specify, either in the SOW or otherwise, that certain portions of the ***. As specified  in the applicable SOW, Supplier is obligated to ***, and to supply and perform ***, in each case as may reasonably be required, to complete  the Work such that the System satisfies the applicable terms, conditions, Performance Guarantees and other guarantees and requirements set forth in this Contract; provided, however, that ***.

(h)

Legal Requirements. The System can and shall be built in conformity with Applicable Laws. The Work and Supplier’s warranty obligations herein will be performed in conformity with all Applicable Laws and Applicable Permits. 

(i)

Financial Condition. Supplier is financially solvent, able to pay its debts as they mature, and possessed of sufficient working capital, or access thereto, to complete its obligations under this Contract.

(j)

Licenses. All Persons who will perform any portion of the Work have or will have all business and professional certifications required by Applicable Law to perform the services under this Contract.

5.2

Owner Covenants, Representations and Warranties. Owner covenants, represents, and warrants to Supplier that:

(a)

Organization, Standing and Qualification. Owner is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware and has full corporate power and authority to execute, deliver and perform its obligations hereunder.

(b)

Enforceable Contract. This Contract has been duly authorized, executed and delivered by or on behalf of Owner and is, upon execution and delivery, the valid and binding obligation  of Owner, enforceable against Owner in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting creditors’ rights generally and by general equitable principles.

(c)

No Conflict. The execution, delivery and performance of this Contract by Owner will not conflict with or cause any default under (a) its organizational documents; (b) any indenture, mortgage, chattel mortgage, deed of trust, lease, conditional sales contract, loan or credit arrangement or other agreement or instrument to which Owner is a party or by which it or its properties may be bound or affected; or (c) any Applicable Law.

(d)

Governmental Approvals. Neither the execution, delivery nor performance by Owner of this Contract requires the consent or approval of, or the giving of notice to or registration with, or the taking of any other action in  respect of, any Governmental Authority.

(e)

No Suits or Legal Proceedings. There is no action, proceeding or investigation pending or, to Owner’s knowledge, threatened against Owner which questions the validity of this Contract, and there is no action, proceeding or investigation pending or, to Owner’s knowledge, threatened which is likely to result in any material adverse change in the ability of Owner to perform its obligations under this Contract.

(f)

Owner represents and warrants that, as of the date of this Contract, its publicly filed financial statements, together with the respective schedules and notes relating thereto, present fairly the financial position of Owner and its consolidated subsidiaries at the dates indicated and the results of operations and cash flows of Owner and its consolidated subsidiaries for the periods specified. Said financial statements have been prepared in conformity with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved, except as may otherwise be stated therein. Since the date of the ***, whether or not ***. Owner has been ***.

6.

PRICES AND PAYMENT

6.1

Contract Price. Supplier shall perform the Work for the Contract Price.

6.2

Taxes. Supplier shall be responsible for all Taxes and duties applicable to the Work. Owner shall provide evidence, upon request, for exemption from applicable state sales and use taxes. Prepaid freight charges on goods sold “F.O.B. Destination”, must be shown separately. Where the Buyer is identified as Delmarva Power and Light Company, Maryland Sales and Use Tax shall not be billed pursuant to Maryland Permit No. 17. Where the Buyer is identified as Atlantic City Electric Company, New Jersey Sales Tax shall not be billed pursuant to Direct Payment Permit No. 210-398-280/000. Where the Buyer is identified as Potomac Electric Power Company (Pepco), Maryland Sales and Use Tax shall not be billed pursuant to Maryland Permit No. 47185 and District of Columbia Sales and Use Tax shall not be billed pursuant to District of Columbia Permit No. 4911-0002107-001.

6.3

Full or Partial Payment. Payment by Owner to Supplier shall be made, according to the Payment Schedule attached hereto as Exhibit K. All invoices submitted by Supplier to Owner shall be in a form approved by Owner. All invoices must be submitted by the *** of the month following the month for which payment is requested; provided, however, that failure to submit an invoice within said *** period shall not relieve Owner of its obligation to make payment.

6.4

Owner Payment of Invoice. 

(a)

All invoices  are subject to Owner’s  review  and approval,  not to be unreasonably withheld. invoices approved  by Owner  shall be due and payable  by Owner *** by Owner of receipt  of said invoice.

(b)

Owner’s Payment of an Invoice(s) shall not be considered as conclusive evidence of the performance of the Contract, either wholly or in part, nor shall any payment be construed as acceptance of any of defective part of the System.

6.5

Final Invoice.

(a)

Upon Final Completion, Supplier shall prepare and submit to Owner a final invoice in accordance with Exhibit K.

(b)

As a condition precedent to Owner’s obligation to pay the Supplier’s final invoice, Supplier shall provide, or have provided, the following to Owner:

i)

Supplier’s Final Release of Liens Certificate; and Subcontractors’ Release of Lien Certificate;

ii)

Punch list items complete; and

iii)

All deliverables, including “as built” drawings and any long term warranties for the System and any System Components.

(c)

Within *** from the receipt of the Supplier’s final invoice, Owner will either approve and pay said Supplier’s final invoice by issuing Final Payment, or notify Supplier in writing of the need for additional supporting data and/or reasons for withholding approval; provided, however, that in the event that any portion of the Work does not materially conform to the requirements of the Contract, the final invoice will be paid in accordance with Exhibit K.

7.1

Commencement of Work. From and after the date that Owner issues the initial PO, Supplier shall perform the Work in accordance with Exhibit B and shall thereafter diligently pursue the Work assigning to it a priority that should reasonably permit the attainment of Final Completion on or before the Final Completion Guarantee Date.

7.2

Supplier’s Acknowledgment. Supplier expressly agrees that the period of time specified to complete all Work and the timely achievement of the Final Completion Guarantee Date includes allowance for normal hindrances and delays incident to the Work. No claim shall be made by Supplier for hindrances or delays during the progress of the Work, except as provided under Sections 8 and 15.

7.3

Prosecution of Work. Supplier shall prosecute the Work in accordance with the System Schedules. Supplier shall cause Final Completion to occur on or before the Final Completion Guarantee Date (as such date may be extended pursuant to Sections 8 or 15 or of any other provision hereof).

7.4

Critical Path Schedule. Either on the Notice to Proceed Date or as soon thereafter as may be reasonably agreed to by Owner, Supplier shall provide Owner with a Critical Path Schedule. Until Final Completion, Supplier shall update its Critical Path Schedule to reflect the current status of the Work. The updates shall be performed and provided to Owner on a monthly basis as part of the Monthly Progress Report. Supplier shall advise Owner of any proposed Critical Path Schedule changes of more than *** and the reasons therefor. Supplier shall continually be aware of factors that are delaying or that could delay the Critical Path Schedule and shall take remedial actions reasonably within its control to eliminate or minimize schedule delays caused by Supplier, including, without limitation, payment of overtime for the employees of Supplier and Subcontractors Supplier and the assignment of additional personnel and/or other resources.

7.5

Plan. If Supplier fails to complete any of the items set forth in the Critical Path Schedule within *** after the date set forth for completion of such item, then Supplier shall, within ***, submit to Owner a written plan (the “Plan”) to complete all necessary Work to achieve Final Completion not later than the Final Completion Guarantee Date, including a revised Critical Path Schedule. Owner shall have the right to promptly review and comment in writing on the Plan. If Owner provides comments to the Plan, then Supplier shall promptly resubmit a revised Plan addressing such comments. Delivery of the Plan by Supplier and approval of the Plan by Owner does not impair or otherwise affect Supplier’s obligation to achieve Final Completion not later than the Final Completion Guarantee Date.

7.6

Progress Reporting. Beginning on the first calendar month following the Effective Date, and on the first day of each month following such date, Supplier shall prepare a Monthly Progress Report and submit it to Owner within *** after the end of each calendar month. In addition, Supplier shall keep, and furnish to Owner at Owner’s request, copies of progress

reports provided to Supplier by Subcontractors and such other information as Owner may reasonably require to determine that the Work is progressing according to the Critical Path Schedule. 

7.7

Meetings. Supplier shall schedule and conduct meetings with Owner at such location as the Parties may agree, for the purpose of reviewing the progress of the Work and adherence to the Critical Path Schedule. The frequency of such meetings shall be established and modified, from time to time, by mutual agreement of Owner and Supplier; provided, however, if Owner reasonably believes that Supplier will complete fewer than all of the Critical Path Items within ***, then Owner shall be entitled to require that meetings occur as frequently as weekly. If Owner so requests, Supplier shall cause a representative of any affected SubSupplier or Vendor to attend such meeting.

7.8

Acceleration of Work.

(a)

When Work is Delayed. In the event of any delay caused solely by Supplier, which causes the prosecution of the Work to be more than ***  behind the Critical Path Schedule, Owner may, by Notice to Supplier, direct that the Work be accelerated by means of overtime, additional crews or additional shifts or re­sequencing of the Work, ***.

(b)

General Provisions. In the event of any acceleration requested pursuant to this Section 7.8, Supplier shall promptly provide a plan for such acceleration, including Supplier’s recommendations  for the most effective and economical acceleration.

8.

EXCUSABLE DELAY

8.1

Notice. If Supplier’s ability to perform its obligations under this Contract is affected by an Excusable Delay, Supplier shall, within *** after it becomes aware of such delay, give Notice to Owner (a “Delay Notice”) stating the nature of the event, its anticipated duration and effect upon the performance of Supplier’s obligations, and any action being taken to avoid or minimize its effect. The burden shall be on Supplier to prove the existence of an Excusable Delay.

8.2

Scope of Suspension:  Duty to Mitigate. The suspension of performance due to an Excusable Delay shall be of no greater scope and no longer duration than is required by such event. Supplier shall use its reasonable efforts (a) to mitigate the duration of, and costs arising from, any suspension or delay in the performance caused by such Excusable Delay, (b) to continue to perform its obligations hereunder, to the extent that it is reasonably possible to do so in light of the circumstances giving rise to the Excusable Delay, and (c) to remedy its inability to perform caused by such Excusable Delay. When Supplier is able to resume performance of its obligation under this Contract, Supplier shall give Owner written Notice to that effect.

8.3

Supplier’s Remedies. If an event of Excusable Delay occurs, then the Final Completion Guarantee Date shall, where reasonably necessary, be extended by the period of time, if any, that Supplier is delayed in the performance of its Work as a result of such event and the Critical Path Schedule shall be correspondingly adjusted.

8.4

Events of Force Majeure. No failure or omission to carry out or observe any of the terms, provisions, or conditions of this Contract shall give rise to any claim by any Party against the other Party, or be deemed to be a breach or default of this Contract if such failure or omission shall be caused by or arise out of an event of Force Majeure.

9.

SUBCONTRACTORS AND VENDORS

9.1

Use of Subcontractors. Subject to Owner’s review and prior approval Supplier may employ Subcontractors to complete any part or parts of its Work under this Contract. Owner shall not unreasonably withhold approval of Supplier’s employment of Subcontractors.

9.2

Supplier Accountable to Owner. No subcontract shall in any way relieve the Supplier of its obligations to Owner under this Contract, nor purport to bind Owner thereunder. (Supplier shall use commercially reasonable efforts to include in its agreements with subcontractors providing services a provision permitting the assignment thereof by the Supplier to Owner.)

9.3

Subcontractors Subject to Terms of this Contract. Each Subcontractor employed by the Supplier shall agree in writing to comply with the confidentiality, health and safety, and compliance with laws provisions of this Contract. If required by Owner, Supplier shall provide written acknowledgement, executed by each Subcontractor, of compliance with this provision.

9.4

No Contractual Relationship Between Owner and Subcontractors. Except as to subcontracts expressly assumed by Owner, this Contract does not create any contractual relationship between any Subcontractor and Owner. Owner shall have no

obligation to communicate directly with any Subcontractor. The Supplier shall keep Subcontractors fully informed of all aspects of Work on the System, including information provided by Owner, including but not limited to, any pre-bid and pre-award meetings. 

9.5

Supplier Is Responsible for Subcontractors. The Supplier shall be liable to Owner for the acts and omissions of its Subcontractors and of persons either directly or indirectly employed by them.

9.6

Subcontractors to Provide Supervisory Personnel. Supplier shall ensure that each Subcontractor provides sufficient supervision to assure proper attention to the Services done on the System and to provide reasonable liaison with Owner through the Supplier. These supervisory personnel shall be authorized to act upon notices, directions, and instructions of the Supplier and make all necessary decisions relating to Work on the System. Whenever Subcontractors are working on the System Site, a representative of the Supplier shall also be present.

9.7

Subcontracting by Subcontractors. Supplier shall ensure that Subcontractors shall not subcontract their assigned portion of the Work or duties to any other individual, group or person not directly on their payroll with the exception(s) of the following conditions: (a) Suppliers of plant and/or Equipment necessary to perform the Work; (b) Suppliers of material or material components necessary to perform the Work; (c) wholly owned subsidiary companies of Subcontractors; and/or (d) as may be otherwise approved by Owner.

10.

LABOR RELATIONS

10.1

General Management of Employees. Subject to Sections 10.3 and 10.4, and notwithstanding  the provisions of Section 10.2, Supplier shall preserve its rights to exercise and shall exercise its management rights in performing the Work. Such management rights shall include the rights (a) to hire, discharge, promote, and transfer employees, (b) to establish and enforce reasonable standards of production, (d) to determine the number of employees necessary to perform a task, job, or project, and (e) to establish, maintain, and enforce rules and regulations conducive to efficient and productive operations.

10.2

Labor Disputes. Supplier shall use reasonable efforts to minimize the risk of labor-related delays or disruption of the progress of the Work. Supplier shall advise Owner promptly, in writing, of any actual or threatened labor dispute of which Supplier has knowledge that might materially affect the performance of the Work by Supplier or by any of its Subcontractors or Vendors. Notwithstanding the foregoing, the settlement of strikes, walkouts, lockouts or other labor disputes shall be at the discretion of the Party whose employees are involved.

10.3

Personnel. Supplier’s personnel, if identified as key personnel in Exhibit B, are hereby specified as “Key Personnel” and are deemed necessary for the successful performance of the Work. Supplier agrees that, except for promotions (but not to other projects), sickness, death, leaving its employ, or at the specific request or approval of Owner, that such Key Personnel will remain on the project team responsible for performing the Work. Owner shall be afforded the opportunity to meet with and review the qualifications of proposed Key Personnel replacements and to approve the assignment of such replacement personnel, such approval not to be unreasonably withheld. Each proposed replacement shall be at least as equally well qualified as the individual leaving the System. For the positions described in Exhibit B, for which Owner has not identified a particular individual as a Key Personnel, Owner shall be afforded the opportunity to meet with and review the qualifications of proposed Personnel and their replacements and to approve the assignment of such replacement personnel, such approval not to be unreasonably withheld.  Each proposed replacement shall be well qualified for the position.

10.4

Removal of Personnel. All personnel assigned by Supplier to the System are subject to removal at the reasonable request of Owner. Whenever possible, replacements should be brought to the project team early, prior to the departure of the individual being replaced. Owner shall not be responsible for paying any fees for any such replacement person’s time spent acquiring knowledge of the Work.

10.5

Project Manager. Supplier’s Project Manager designated on Exhibit B has full responsibility for the prosecution of the Work and shall act as a single point of contact with Owner in all matters on behalf of Supplier.

10.6

Supplier Employee Compensation. Supplier shall accept full and exclusive liability for its personnel’s salaries, employee benefits, allowances for vacation, sick leave, holiday pay, employee insurance and retirement benefits, all payroll taxes, workers’ compensation and employer’s liability insurance, and other insurance premiums measured by payroll costs, other contributions  and benefits imposed by any applicable law or regulation, plus all Supplier’s personnel expenses incurred in conformance with standard Supplier policy, including travel, accommodation and subsistence expenses. Owner shall not be responsible for Supplier personnel administration matters as such relate or are applied to such personnel including, without limitation, pay, internal discipline, equal opportunity or discrimination claims.

10.7

Background Investigations. Supplier shall have a background investigation conducted on all its employees who will be assigned to perform any of the Work under this Contract on Owner’s premises or at Owner’s facilities or who will have access to Owner’s  systems and data, and shall require any Subcontractor performing any portion of the Work to similarly conduct background investigations on all Subcontractor employees who will be assigned to perform a portion of such Work. Such background investigation shall, at a minimum, include a complete criminal history records check, conducted no more than one (1) year prior to assignment the Work, which shall report all felony convictions within the previous seven years. Such background investigation shall be conducted by a competent professional organization and shall be in compliance with the Fair Credit Reporting Act and applicable state laws. Supplier agrees to provide Owner with ***. Owner reserves the right, in its sole discretion, to refuse to allow any individual with a past felony conviction to perform work for Owner. 

10.8

Drug and Alcohol Policy. Owner requires that all employees of Supplier and its Subcontractors that perform any of the Work at the System be free of drugs and the influence of alcohol. All such employees, when reporting for duty and while on duty, must be “fit for duty,” defined as the appropriate mental and physical condition necessary to perform work in a safe, competent manner, free of the influence of drugs and alcohol Possession of drugs, drug paraphernalia, and alcohol is prohibited on Owner work sites.

11.

INSPECTION; EFFECT OF REVIEW AND COMMENT

11.1

Right to Reject Work. Regardless of whether payment has been made therefor, Owner shall have the right to reject any portion of the Work that contains any Defect. Upon such rejection, Supplier shall promptly remedy, at its cost and expense, by repair or replacement, any Defect that is identified by Owner as giving rise to such rejection.

11.2

Inspection. Supplier understands that Owner and its representatives have the right to observe and inspect the Work, as well as any hardware, software, third-party software and/or third-party imbedded software, design, engineering, service, or workmanship to be provided hereunder and to observe all tests of the Work and the System. Supplier shall allow Owner and its representatives reasonable access to the Work and the System. Owner shall be entitled to inspect and review Supplier’s drawings and Drawing and Specifications or technical details pertaining thereto as reasonably requested by Owner or its representatives. Supplier shall attempt, in good faith, to incorporate such inspection rights in all Equipment purchase orders and subcontracts. To facilitate such observations and inspections, Supplier shall maintain at the Site a complete set of all Drawings and Specifications and current Critical Path Schedule. Supplier shall comply with all inspection and testing requirements.

11.3

Limitation on Owner’s Obligations. Inspection, review, approval or comment by Owner with respect to any subcontract or purchase order or any Drawings and Specifications,  samples, and other documents, or any other work or services performed by Supplier, or any Subcontractor or Vendor, is solely at the discretion of Owner and shall not in any way affect or reduce Supplier’s obligations to complete the Work in accordance with the provisions of this Contract or be deemed to be a warranty or acceptance by Owner with respect to such Work.

11.4

Inspection by Supplier. Supplier shall perform all inspection, expediting, quality surveillance, and other like services required for the performance of the Work, including inspecting all materials and Equipment that comprise the System or that are to be used in the performance of the Work.

12.

RESERVED

13.

COMPLETION

13.1

Creation of System Punchlist. At such time as the System is available for ***, Supplier shall prepare and submit to Owner a list of ***. Owner may then inspect the System jointly with the Supplier to determine whether the proposed Punchlist is complete. If Owner’s inspection discloses any *** from the proposed Punchlist, any item described on the proposed Punchlist that is not *** described on the Proposed Punchlist), Supplier shall prepare and deliver a revised Punchlist for Owner’s approval. Supplier shall complete any items of Work other than ***, and resubmit a revised Proposed Punchlist to Owner for approval. Owner may then re-inspect the System and the foregoing process shall continue on an iterative basis until Owner has approved the proposed Punchlist. The aggregate of all proposed Punchlists that are acceptable or deemed acceptable to Owner shall be referred to as the Punchlist. ***. Failure to include an item on a Punchlist does not, in any way, alter Supplier’s responsibility to complete all Work in accordance with this Contract.

13.2

***. Supplier shall complete all items on the System Punchlist in accordance with the schedule set forth in such System Punchlist. On ***, Supplier shall revise and update such System Punchlist to include ***.

13.3

Final Completion. Final Completion of each SOW shall be deemed to have occurrred only if all of the following have occurred as applicable: 

(a)

Successful completion of Acceptance Tests;

(b)

Supplier has provided to Owner Owner evidence that all Work requiring inspection by any governmental  authority having jurisdiction has been duly inspected and approved by such authorities to the extent required to operate the System;

(c)

Supplier has *** unless Owner shall have relieved Supplier of its obligation to do so;

(d)

Owner has received ***, and other technical information, each as required hereunder for Owner to operate and maintain the System;

(e)

Supplier has delivered to Owner ***;

(f)

Supplier has ***;

(g)

Supplier has delivered the Final release of Liens Certificate and Subcontractors’ Release of Lien Certificate in accordance with Sections 34.1 and 34.2, respectively; and

(h)

Supplier has delivered to Owner a Notice of Final Completion stating that Supplier believes it has satisfied the provisions of Sections 13.3(a) through (h).

13.4

Supplier’s Access After Substantial Completion. Following Substantial Completion, Owner shall provide Supplier with reasonable and timely access to the System to complete all items on the System Punchlist and to satisfy the other requirements for Final Completion. The Parties expect that Supplier shall accomplish any necessary modification, repairs or additional work with minimal interference with commercial operation of the System and that reductions in and shut-downs of the System’s operations will be required only when necessary, taking into consideration (i) the length of the proposed reduction or shut-down, and (ii) Owner’s obligations and liabilities to its customers or others. Notwithstanding the foregoing, should a reduction in or shut-down of operations be required to complete any items on the System Punchlist or to complete the Work, then such reduction or shut-down shall be scheduled at the reasonable discretion of Owner, and Supplier shall use all reasonable efforts to complete such Work during such Owner scheduled reduction or shut-down. Supplier acknowledges that Owner may schedule such reduction or shut-down at any time including off-peak hours, nights, weekends and holidays.

14.

LIQUIDATED DAMAGES ***

15.

CHANGES IN THE WORK

15.1

Owner Initiated Changes for Extra Work. Supplier shall not perform any work not specified in the Scope of Work (“Extra Work”) unless and until Owner issues a Contract Change Authorization Form (a copy of which is attached hereto and incorporated herein by reference as Exhibit H). Owner may, at any time during the term of this Contract, request the performance of Extra Work by issuing a Contract Change Authorization Form to Supplier. Any such Extra Work described in a Contract Change Authorization Form shall not impair, affect or void this Contract or give rise to a claim that there has been an abandonment or breach of this Contract.

15.2

Supplier Compliance. The Contract Change Authorization Form shall constitute an authorization to proceed with the extra Work described therein. Upon receipt of the Contract Change Authorization Form Supplier shall:

(a)

If Supplier does not believe that the Extra Work described in the Contract Change Authorization Form will affect the Contract Price or the Deliverables Schedules, or impair Supplier’s ability to fulfill its warranties and contractual obligations hereunder, complete the Extra Work described in the Contract Change Authorization Form.

(b)

If Supplier believes that the Extra Work described in the Contract Change Authorization will affect the Contract Price or Deliverables Schedules, it shall seek Owner’s approval of such effect on Contract Price or Deliverables Schedule by submitting a Claim under Section 33.

15.3

Reduction in Scope of Services. Supplier shall delete any portion of the Work from the Scope of Work upon receipt from Owner of a Contract Change Authorization Form directing such deletion and ***, ***.

15.4

Ability to Perform. If Supplier believes that the Extra Work, or a Reduction in Scope of Services, ***, Supplier shall so notify Owner, and Supplier will proceed with such Extra Work or Reduction only if Owner and Supplier agree ***. 

15.5

Technological Developments. Supplier shall promptly advise Owner of all reasonably available technological advances that are known, or become known, to Supplier over the course of performance of its obligations under the Contract which may result in the Work having added value (i.e., better performance, design, material, longer useful life, etc.) to Owner. Owner may, at its sole discretion, elect to incorporate such advances into the Scope of Work via written Contract Change Authorization Form.

16.

WARRANTIES

16.1

Terms of Warranty. Supplier represents and warrants as follows with respect to the System  and Work provided under this Contract:

(a)

That it is solely and entirely responsible for the quality of the Work performed by Supplier and its Subcontractors;

(b)

That the System shall be complete in all respects within the limits and specifications described in  the Contract and that all Work furnished  under the Contract  shall be in material  accordance with the plans and specifications furnished to, and agreed to by, Supplier  and that the Software  is designed  to and will meet the functional  and performance specifications and standards set forth in Exhibit B;

(c)

That the System shall be materially free of defects in design, workmanship, materials and performance, whether patent or latent;

(d)

That Supplier is proficient at providing the Work and that it shall be performed in a skillful, timely, safe and professional manner in strict conformity with the best standard practice;

(e)

That the Equipment shall consist of ***;

(f)

That the System shall be ***;

(g)

That all Equipment and *** that is part of the System and suitable for ***.

(h)

To the extent possible, ***.

16.2

Warranty Periods.

(a)

System Warranty. The warranty period shall be *** from the earlier of the date of *** or such extended time as Owner and Supplier may agree in writing.

(b)

Equipment Warranty. The warranty period shall be *** from the date of delivery or such extended  time as Owner  and Supplier  may agree in writing; for ***, the term of the warranty  shall be the term ***.  Equipment that is repaired, adjusted, modified, or replaced by Supplier pursuant to its obligations hereunder shall be warranted as set forth herein, except that the warranty period shall extend to the greater of: (i) ***; or (ii) ***.

(c)

Software Warranty. The warranty period shall be *** from date of delivery and successful installation but may be extended  for up to *** subject  to Owner *** or such extended  time as Owner and Supplier may agree in writing.

(d)

Exclusions. The foregoing warranty shall not apply to non-conformities in the Software due to one or more of the following causes: (a) modifications not made or approved by Supplier; (b) Owner’s or any third party’s negligence or intentional acts; (c) misuse or abuse, including the failure to use or install the Software in accordance with the Required Manuals; or (d) incorrect data, or data entry or output, as applicable, by Owner, a third party or third party software, hardware or firmware not provided or authorized by Supplier.

(e)

Viruses and Harmful Code Supplier has used and will use *** to scan the Software for and to remove any computer “viruses,” “worms” and other illicit code (i.e., computer viruses, worms, trap doors, time bombs, disabling code, or any similar malicious mechanism designed to interfere with the intended operation of, or cause damage to, computers, data, or Software), and agrees to promptly notify Owner of ***.

16.3

Recall. For a period of *** following the expiration of the initial hardware warranty period of *** and ***, Suppler will provide ***. Supplier will declare a Product Recall when a specific product model, version or manufacturing batch experiences a design related warranty-failure greater than *** in any consecutive *** period. The failure rate will be

calculated based on the ***. In the event that a Product is deemed by Supplier to be in Recall, Supplier will notify Owner and will develop for Owner a plan to repair or replace that product, at its discretion, in a timely fashion. Specifically excluded from Product Recalls, or the calculation of a failure rates, are ***. 

16.4

Remedy for Breach of Warranty. If, during the warranty period, an item fails to conform to its applicable warranty, Supplier shall provide the following exclusive remedies:

(a)

If any unit of Equipment does not meet the foregoing warranty, ***, ***. Prior to returning a unit of Equipment for repair or replacement, Owner shall obtain from Supplier an RMA number, which shall be indicated on all packaging, labeling, and other communications relating to the return. ***.  If the failure rates for equipment exceed those as stated in Exhibit B, ***.

(b)

Supplier shall ***.

(c)

Supplier shall ***.

(d)

***, ***, ***.

(e)

In lieu of the foregoing paragraphs (a) through (d), the Parties may make such other arrangements as Supplier and Owner may agree upon in writing signed by both Parties which shall include ***.

16.5

Subcontractor Warranties. Supplier warranties provided for herein shall include warranties for portions of the System provided by Subcontractors. Supplier shall also make commercially reasonable efforts to provide, for the benefit of Owner, warranties from Subcontractors for portions of the System that they perform or provide that is equivalent to the warranty provided by Supplier under this Contract; provided, however, that Owner acceptance of the Subcontractor warranty does not constitute a waiver of Supplier’s obligation to provide its own warranty or of Owner’s right to seek recovery under either Subcontractor’s or Supplier’s warranty.

16.6

Non-Waiver. All representations and warranties of Supplier shall survive the Contract. The Supplier is not relieved of its obligations under the warranties provided hereunder regardless of whether (a) ***, (b) ***, (c) ***, or (d) ***.

16.7

Disclaimer of Implied Warranties. EXCEPT FOR THE WARRANTIES PROVIDED ABOVE, SUPPLIER MAKES NO WARRANTY OF ANY KIND, WHETHER IMPLIED, STATUTORY, OR OTHER WISE RELATING TO THE PRODUCTS OR SERVICES. SUPPLIER SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF DESIGN, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE. SUPPLIER AND ITS SUPPLIERS DO NOT WARRANT OR REPRESENT THAT THE SOFTWARE WILL BE FREE FROM BUGS OR THAT ITS USE WILL BE UNINTERRUPTED OR ERROR-FREE, OR MAKE ANY OTHER REPRESENTATIONS REGARDING THE USE, OR THE RESULTS OF THE USE, OF THE PRODUCTS. THESE DISCLAIMERS SHALL APPLY NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMIITED REMEDY PROVIDED HEREIN.

17.

EQUIPMENT IMPORTATION; ORDERING; TITLE

17.1

Importation of Equipment.  *** shall make all arrangements, including the processing of all documentation,  necessary to import into the United States any hardware, software, third-party software, or third-party imbedded software to be incorporated into the System and any other equipment and other items necessary to perform the Work and shall coordinate with the applicable Governmental Authorities in achieving clearance of United States customs for all such Equipment and other items and, to the extent available under United States law, achieving such importation duty and tax-free.

17.2

Ordering Equipment. Ordering of Equipment shall be in accordance with Section 2.9 of Exhibit B.

17.3

Title.

(a)

Provided Owner has paid Supplier in accordance with the terms of this Contract, ***, ***, ***.

(b)

Title to all Equipment, Third-party Equipment, and System (other than Software, as to which a license is granted), and all applicable original equipment manufacturer warranties, shall pass to Owner, free and clear of all liens, claims, charges, security interests, and encumbrances whatsoever, ***.

(c)

The transfer of title shall in no way affect Owner’s rights as set forth in any other provision of this Contract. Owner shall have care, custody, and control and risk of loss of all Equipment, Third-party Equipment, and System (other than Software, as to which a license is granted) and shall exercise due care with respect thereto ***.

18.

INTELLECTUAL PROPERTY RIGHTS 

18.1

Ownership. Owner acknowledges that Supplier and its vendors and licensors, retain all right, title and interest, including without limitation all intellectual property rights, and to all Supplier Confidential Information, Products and Services and all copies thereof, and, except as provided in Section 18.2(a), all derivative works based thereon.

18.2

Ownership of Work Product and Derivative Works Developed under SOWs. Ownership of the intellectual property rights in any work product and any derivative works created by Supplier in performance of any SOW under this Contract shall be allocated as follows:

(a)

Owner-Specific Works. Owner will own all right, title and interest, including, without limitation, all intellectual property Rights in, any work product and any derivative works created by Supplier for Owner under this Contract that are unique and specific to Owner’s operations, including Owner-specific network designs and network design documentation and materials, installation drawings specific to Owner’s network, and Owner-specific user manuals and guides and Owner-specific analyses and reports.

(b)

Supplier Ownership.  Owner’s ownership of a derivative work under Section 18.2(a) shall be subject to Supplier’s continued ownership of the intellectual property rights in the work(s) upon which it was based.  Further, Supplier shall retain ownership of any Tools that it utilizes in providing the Services or incorporates into any Owner-owned work product.  “Tools” means any pre-existing or independently developed intellectual property rights pertaining to Supplier’s business or profession, including but not limited to technology, information, innovations, designs, know-how, tool kits, architectures, best-practices information, data structures, software, methods, product evaluation data, drawings and works of authorship. Tools ***.

(c)

All Other Derivative Works. *** will own all right, title and interest, including, without limitation, all intellectual property rights in, all work product and all derivative works except ***.

(d)

Ownership of Content. All *** content, including information concerning users, messages and other such data, is the property of ***.

18.3

Proprietary Markings and Copyright Notices. Owner agrees not to remove or destroy any proprietary, trademark or copyright markings or notices placed upon or contained within any products or documentation.

18.4

Third Party Products. Any third party products sold or licensed to Owner in conjunction  with Supplier’s Products and Services under this Contract shall, in addition to the terms and conditions set forth in this Contract, be sold pursuant to the terms and conditions contained in any separate end-user license agreements or purchase agreements provided by such third parties.  The terms of such separate license agreements and purchase agreements will control in the event of any inconsistencies between such agreements and this Contract.  To the extent possible, ***.  *** shall have no obligation for any warranties or maintenance of the software or hardware.  *** shall be responsible for all transportation and handling charges of any third party products, if any, which shall be prepaid by *** and added to the invoice.

19.

DEFAULT

19.1

Supplier Events of Default. Supplier shall be in default of its obligations pursuant to this Contract upon the occurrence of any one or more of the events described below (each, a “Supplier Event of Default”):

(a)

Any material representation or warranty made by Supplier herein was intentionally false or materially misleading when made and Supplier fails to remedy such false or misleading representation or warranty and fails to make Owner whole for any consequences  thereof, within *** after ***;

(b)

Supplier assigns or transfers this Contract or any right or interest herein, except as expressly otherwise permitted herein;

(c)

Supplier fails to ***;

(d)

Supplier fails to ***, and ***;

(e)

Supplier fails to timely ***;

(f)

Supplier fails to achieve ***;

(g)

Any disregard by Supplier of laws, ordinances, rules, regulations, or policies or instructions of Owner, and such disregard continues for *** s after Supplier receives a Notice from Owner with respect thereto, provided, however,

that this *** cure period shall not apply to a failure to comply with the applicable safety requirements of Exhibit A which such failure shall be cured upon notice; or 

(h)

It becomes reasonably apparent, ***.

19.2

Damages for Supplier Default. Except for amounts payable under the ***, which shall be the sole remedy of Owner for (a) Supplier delays in achieving Final Completion and (b) Supplier delays in meeting the Performance Guarantees, Supplier shall be liable to Owner for *** to Owner as a result of such Supplier Event of Default, subject to the limitations of liability in Section 36 and any other express limitations set forth in this Contract.

(a)

The Parties acknowledge and agree that, to the extent that the actual costs of completing the Work, including compensation for obtaining a replacement Supplier or for obtaining additional professional services required as a consequence of a Supplier Event of Default, exceed those costs that would have been payable to Supplier but for such Supplier Event of Default, Supplier shall be obligated to pay the difference to Owner, such difference not to exceed ***, and subject to the limitations of liability in Section 36..

(b)

In the event of a termination of this Contract by Owner as a result of a Supplier Event of Default, Owner shall be entitled to withhold further payments (not to exceed the amount of the dispute) to Supplier for the Work performed prior to termination of this Contract until the parties resolve the liability of Supplier, if any, under this Section 19.2 in accordance with Section 38.1. Upon determination of the total cost of the Work, Owner shall notify Supplier in writing of the amount, if any, that Supplier shall pay Owner or Owner shall pay Supplier..

(c)

If it is determined for any reason that Supplier was not in default or that Owner was not entitled to the remedy against Supplier provided above, ***.

19.3

Owner Event of Default. Owner shall be in default of its obligations pursuant to this Contract upon the occurrence of any one or more of the events described below (each, an “Owner Event of Default”):

(a)

Any material representation or warranty made by Owner herein was intentionally false or materially misleading when made and Owner fails to remedy such false or misleading representation or warranty, and fails to make Supplier whole for any consequences  thereof, within *** after *** with respect thereto;

(b)

Owner fails to perform or observe in any material respect any provision of this Contract providing for the payment of money to Supplier, which is not the subject of a bona fide dispute, or any other material provision of this Contract not otherwise addressed in this Section 19.3, and such failure continues for *** after Owner receives a Notice from Supplier with respect thereto; or

(c)

Owner assigns or transfers this Contract or any right or interest herein, except as expressly otherwise permitted herein.

20.

EARLY TERMINATION

20.1

Term. This Contract shall commence upon the Effective Date and shall remain in effect until the Final Completion Date or otherwise terminated pursuant to the terms hereunder.

20.2

Termination for Convenience.

(a)

Owner may, at any time, terminate performance of the Work under this Contract in whole or in part for the convenience of Owner by ***. Such termination shall be effective in the manner *** in said Notice and shall be without prejudice to any claims that Owner may have against the Supplier.

(b)

In the event of a termination for convenience, the total obligation of Owner to Supplier for the execution of the Work under any SOW, or any segment or phase thereof, upon which work has been authorized under a Purchase Order issued, shall be payment for work performed and Equipment, Third-party Equipment and Software accepted plus the total non-cancelable and non-recoverable costs incurred by Supplier up to the effective date of termination plus a reasonable profit on such costs. Additional charges for cancellation, postponement, placement of Equipment and Third-party Equipment into storage, and similar charges shall be submitted by Supplier to Owner for approval prior to incurrence of such charges.  Supplier and Owner will cooperate to attempt to resell Equipment and Third-party Equipment.

20.3

Termination for Cause.

(a)

Without limiting any other provision of this Contract, Owner reserves the right, without any liability to Supplier, except to pay for work satisfactorily completed and accepted by Owner prior to termination, to terminate all or any part of this Contract upon written notice to Supplier in the event of the happening of any Supplier Event of Default specified in Section 19.1. 

(b)

Supplier shall cease performance of the Work immediately upon receipt of notice of termination for cause. For the purpose of completing the Work, Owner may (without limiting any rights which Owner may otherwise possess) take possession of all machinery, construction equipment, tools, etc., that are owned by Owner on the System Site or Owner premises and may employ any other qualified person, firm, or corporation to finish the Work or otherwise finish the Work by whatever reasonable means Owner may deem expedient. In case of any such termination for cause, Supplier shall receive payment for Work completed and accepted up through the date of termination. Owner may recover the reasonable cost of such completion from Supplier, not to exceed *** of the costs that would have been payable to Supplier, and subject to the limitations of liability in Section 36.

(c)

Title to all Equipment, Third-party Equipment, and System (other than Software, as to which a license is granted) for which Owner has paid Supplier hereunder shall vest in Owner. Any Required Manuals, or other pertinent documents which are in existence prior to the effective date of termination and which would have been provided to Owner at the end of the Work shall be furnished to Owner.

21.

SUSPENSION

21.1

General. Owner may suspend performance of the Work at any time by giving Notice thereof to Supplier. Such suspension shall continue for the period specified in such suspension Notice. Owner shall, as provided for herein, ***. At any time after the effective date of the suspension, Owner may require Supplier to resume performance of the Work as soon as reasonably practicable.

21.2

Supplier’s Termination Right. If, at the end of the suspension period, Owner has not requested a resumption of the Work or has not notified Supplier of any extension of the suspension period, at Supplier’s option, the Work shall be terminated, and Owner shall ***.

21.3

Extension of Time and Compensation Rights. In the case of any suspension under this Section 21, (other than from a cause due to Supplier’s negligence, willful misconduct or noncompliance with the terms of this Contract):

(a)

the Final Completion Guarantee Date shall be extended by a period equal to the delay caused by the suspension, plus a reasonable period for demobilization  and remobilization  approved by Owner;

(b)

Owner shall *** that are ***, to the extent ***, and that are:

(i)

For the purpose of *** and/or ***, ***;

(ii)

For ***, ***, or ***, the payments for which, ***;

(iii)

For reasonable costs of *** and ***; and/or

(iv)

For ***; and

(c)

The Critical Path Schedule shall be adjusted to account for same.

21.4

Claims for Payment.  All claims by Supplier for compensation or extension of time under this Section 21 must be made in accordance with the requirements of Section 33.

22.1

Insurance Requirements. Before commencing the Work under this Contract, Supplier shall procure and maintain at its own expense the following minimum insurance in forms and with insurance companies acceptable to Owner:

(a)

Workers’ Compensation insurance for statutory obligations imposed by Workers’ Compensation, Occupational Disease, or other similar laws;

(b)

***:  *** per occurrence;

(c)

Business Automobile Liability (for all owned, non-owned, hired, and leased vehicles): *** per occurrence;

(d)

***: *** per occurrence, and an aggregate, if any, of at least ***. The *** coverage shall insure the performance of the *** including specifically, but without limitation thereto, Section 23 entitled “Indemnification;” and 

(e)

***, where applicable, covering the *** being delivered by Supplier: *** per occurrence. Such coverage shall remain in force for a minimum of *** following termination of Work under this Contract.

22.2

Proof of Insurance. Upon execution of this Contract, Supplier shall provide to Owner’s Corporate Insurance Department, located at 701 Ninth Street, N.W. Washington, DC 20068, certificates of insurance acceptable to Owner with respect to the above insurance requirements, and with respect to subparagraphs (b), (c), (d) and (e) above, ***. Such insurance shall provide a ***, and allow ***.

22.3

Insurance for Subcontractors. Supplier shall maintain adequate insurance coverage for Subcontractors and shall require such Subcontractor(s) to maintain insurance consistent with the requirements of this Section 22.3.

23.

COMPLIANCE WITH LAWS AND PHI REQUIREMENTS

23.1

Compliance with Employment Related Laws. Supplier shall comply with all applicable international, federal, state and local laws, rules, and regulations including, without limitation and incorporated by reference herein, Section 202 of Executive Order 11246 (41 CFR Part 60), Section 503 of the Rehabilitation Act of 1973 (41 CFR Part 741), the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (41 CFR Part 60-250), Public Law 95-507 (15 USC 637(d)), and all immigration laws pertaining to employment. Supplier shall certify, in writing, such compliance at Owner’s request.

23.2

Compliance with Safety Related Laws and Regulations. Supplier shall comply with Exhibit A attached hereto and with the federal Occupational Safety and Health Act (“OSHA”) Construction Safety and Health Standards, Construction Industry Standards (29 CFR part 1926), applicable General Industry Standards (29 CFR part 1910), and all other applicable laws, ordinances, rules, regulations, and orders of any public body having jurisdiction for the safety of persons or property or to protect them from damage, injury, or loss. Supplier shall furnish and erect all temporary barricades required by Federal, state, or local laws, ordinances, rules, or regulations, by any governmental authority or by System conditions. All such barricades shall be arranged so as to ensure the safety of all workers, persons, and property, and shall be removed by Supplier at the completion of the Services.

23.3

Maintenance of Records. Supplier shall, and shall require all its Subcontractors, to keep all records, file all reports and otherwise comply with all federal, state and local laws and regulations applicable to the Work including, without limitation, all laws and Executive Orders and pertinent rules and regulations adopted there under applicable to Suppliers. This Contract is deemed to include all provisions specifically required by law to be incorporated herein. If Supplier performs any work contrary to such laws or regulations, Supplier shall promptly, ***, modify its performance as necessary to so comply.

23.4

The Supplier affirms that, by entering into this contract, ***.

24.

INDEMNIFICATION

24.1

Supplier Liability. Supplier shall have the responsibility and liability for any and all injury, loss or damage of any kind or nature whatsoever, direct or indirect, suffered by any person or tangible property (which terms for the purposes of this Contract shall respectively include, without limitation: any employees or agents of Supplier or of any of its Subcontractors; and any tangible property of Supplier, or of any of its Subcontractors, or tangible property of Supplier’s or Subcontractors’ employees or agents; and any tangible property of Owner, or of any of its suppliers, or its employees or agents) caused by ***.  The term ***, for the purposes of this Section, shall include without limitation ***.

24.2

Supplier Indemnification. Supplier hereby agrees to indemnify and hold harmless Owner and any and all of Owner’s directors, officers, employees, agents and servants, from and against any and all demands, claims, liabilities, damages, losses, judgments, costs or expenses (including attorney’s fees) incurred by the indemnitee in connection with injuries or damages to persons and/or property arising out of or resulting from any Work performed negligently hereunder (or any activity connected therewith) by Supplier, including without limitation such injuries or damages arising out of or resulting from negligence of Supplier’s Subcontractors and excluding such injuries or damages only to the extent required by law. Supplier agrees to defend, at its expense, any suit or action brought against Owner and/or any of Owner’s employees based on any such alleged injuries or damages to persons and/or property arising out of or resulting from Work performed hereunder (or any activity connected therewith) as set forth above. In the event that Supplier fails to assume Owner’s defense under the terms of this provision, it shall pay, in addition to the costs and expenses stipulated above, any and all

costs to Owner, including attorneys’ fees, in acting to enforce Supplier’s obligation hereunder, provided Owner gives Supplier Notice within 3 days after first knowledge of such claims. 

24.3

Owner Liability. Owner shall have the responsibility and liability for any and all injury, loss or damage of any kind or nature whatsoever, direct or indirect, suffered by any person or tangible property (which terms for the purposes of this Contract shall respectively include, without limitation: any employees or agents of Owner or of any of its suppliers; and any tangible property of Owner, or of any of its suppliers, or tangible property of Owner’s  or its suppliers’ employees or agents; and any tangible property of Supplier, or of any of  its Subcontractors, or their employees or agents) caused by ***. The term “***”, for the purposes of this Section, shall include without limitation ***

24.4

Owner Indemnification. Owner hereby agrees to indemnify and hold harmless Supplier and any and all of Supplier’s directors, officers, employees, agents and servants (“Indemnitees”), from and against any and all demands, claims, liabilities, damages, losses, judgments, costs or expenses (including attorney’s fees) incurred by the indemnitee in connection with injuries or damages to persons and/or property arising out of or resulting from any Work performed negligently hereunder (or any activity connected therewith) by Owner, including without limitation such injuries or damages arising out of or resulting from negligence of Owner’s  suppliers and excluding such injuries or damages only to the extent required by law. Owner agrees to defend, at its expense, any suit or action brought against Supplier and/or any Indemnitees based on any such alleged injuries or damages to persons and/or property arising out of or resulting from Work performed hereunder (or any activity connected therewith) as set forth above. In the event that Owner fails to assume Supplier’s defense under the terms of this provision, it shall pay, in addition to the costs and expenses stipulated above, any and all costs to Supplier, including attorneys’ fees, in acting to enforce Owner’s obligation hereunder, provided Supplier gives Owner Notice within 3 days after first knowledge of such claims.

25.

PATENT INFRINGEMENT AND OTHER INDEMNIFICATION RIGHTS

25.1

Supplier to Pay Fees. Supplier shall pay all license fees and royalties that may be payable to a third party on account of the ***, and shall otherwise assume all costs incidental to the use of any invention, design, process, or device which is the subject of patent rights or copyrights held by others and are practiced or use by ***.

25.2

Indemnification by Supplier for Intellectual Property Claims. In the event of a third party claim, demand or allegation that (i) any aspect of the ***, *** (ii) the  manufacture, implementation, reproduction, use, sale, distribution or importation *** supplied under this Contract or otherwise used by Supplier or its contractors to perform  Work or create the System, or (iii) the authorized operation or use by or on behalf of Owner or Owner  Affiliated entities of the System or any part thereof, infringes  any patent, design  right, proprietary process, copyright or other intellectual property  right of a third party or misappropriates a trade secret or violates  any other proprietary information rights of a third party (each of the foregoing claims,  demands  or allegations, an “IP Claim”),   Supplier shall, promptly  and at it sole expense:

(a)

Indemnify and hold harmless Owner, Owner’s Affiliated entities and their respective officers, directors, employees, and agents (each an “Owner Indemnitee”) from and against any such IP Claim and all liabilities, losses, damages, settlement payments, costs, expenses and attorneys’ fees arising or resulting therefrom, and

(b)

Defend any suit or proceeding brought  against any Owner  Indemnitee based on such IP Claim  with competent  counsel  reasonably acceptable to Owner, and  pay all damages and costs awarded  therein  against an Owner Indemnitee and all settlement payments and expenses  relating  to such IP Claim provided  the settlement is approved by Supplier; and

(c)

Should  the System,  or the operation of any components of the *** or the manufacture, implementation, reproduction use, sale, distribution, or importation of the System, or any part thereof,  be found  or alleged  or is reasonably likely to misappropriate or infringe  a third party’s intellectual property  rights, Supplier will (in addition  to its other obligations under this Section  25), at Supplier’s option and at no expense  to Owner,  either (i) procure for Owner and any applicable Owner  Indemnitee the right to continue to use the System and to continue to exercise all other rights pursuant  to this Contract, (ii) modify  the System  so that it becomes substantially equal  but non-infringing and non-misappropriating, or if the Supplier has failed after commercially reasonable efforts to effect the foregoing or if the continued use of the item subject  to the IP Claims has been enjoined,  (iii) cease the Work and/or  remove the  System  as reasonably directed  by Owner and refund to Owner the Contract Price and the transportation, installation and associated  costs thereof  (including that of any associated Material,  Supplier  Deliverable or good or article  that is dependent on or not needed or useful without the removed  items).

25.3

Exclusive Remedy. THE RIGHTS AND REMEDIES SET FORTH ABOVE AND IN SECTION 26 AND THE ESCROW RIGHTS GRANTED ELSEWHERE IN THIS CONTRACT CONSTITUTE THE ENTIRE OBLIGATIONS

OF SUPPLIER AND THE EXCLUSIVE REMEDIES OF OWNER CONCERNING PROPRIETARY RIGHTS INFRINGEMENT OR MISAPPROPRIATION RELATING TO SUPPLIER PRODUCTS AND SERVICES SUPPLIED HEREUNDER. NOTHING HEREIN LIMITS OWNER’S RIGHT TO EXERCISE AVAILABLE REMEDIES TO ENFORCE THIS INDEMNIFCIATION OR TO SEEK ALTERNATIVE REMEDIES IN THE EVENT SUPPLIER DOES NOT MAKE GOOD ON THE INDEMNIFICATION 

25.4

Related Items Supplied by Supplier. Supplier acknowledges that certain *** will be supplied by Supplier to a third party who will sell to Owner and Owner Affiliated entities utility meters that incorporate or work with such *** and that such *** an integral part of the ultimate system and network to be implemented by Supplier for Owner.  Supplier agrees that, to the extent Owner or an Owner Affiliated entity is the subject of a claim, demand or allegation by a third party that such ***.  Owner will reasonably notify Supplier of any such claim and will provide Supplier ***.  Should Supplier decline to do so or otherwise fail to act to defend the claim, Owner and Owner Affiliated entities shall have available all rights and remedies with respect to such claim.

25.5

***. In addition to what is provided above regarding indemnification  and  “Related Items Supplied by Supplier,” Supplier agrees to ***.  Owner agrees that Supplier’s liability for damages and for settlement payments approved in advance by Owner that are payable to the third party in connection with any such claim against Owner or an Owner Affiliated entity under this paragraph shall not exceed the *** of any additional liability, up to a maximum aggregate of ***.  Nothing in this paragraph limits the right of Owner or an Owner Affiliated entity to seek and obtain indemnification and other remedies from the third party providers ***.

26.

PROCEDURE FOR INDEMNIFCATION UNDER SECTIONS 24 OR 25

26.1

Notice. Promptly after an Indemnitee receives notice of any claim for which it will seek indemnification pursuant to this Contract, the Indemnitee will notify the Indemnitor of the claim in writing. No failure to so notify the Indemnitor will abrogate or diminish the Indemnitor’s obligations if the Indemnitor has or receives knowledge of the claim by other means or if the failure to notify does not materially prejudice its ability to defend the claim.

26.2

Right to Control. Within *** after receiving an Indemnitee’s notice of a claim, but no later than *** before the date on which any formal response to the claim is due, the Indemnitor will notify the Indemnitee in writing as to whether the Indemnitor acknowledges its indemnification obligation and elects to assume control of the defense and resolution of the claim (a “Notice of Election”). If the Indemnitor timely delivers a Notice of Election, the Indemnitor will be entitled to have sole control over the defense and resolution of the claim except as provided in this Section. Nothing in this Section will preclude the Indemnitee from participating in its defense and retaining its own counsel at its own expense.

26.3

Procedure Where No Notice of Election Is Delivered. If the Indemnitor does not deliver a timely Notice of Election for a claim, the Indemnitee may defend and/or settle the claim in such manner as it may deem appropriate, at the cost and expense of the Indemnitor, including payment of any settlement, judgment or award and the costs of defending or settling the claim. The Indemnitor will promptly reimburse the Indemnitee upon demand for all indemnifiable liabilities suffered or incurred by the Indemnitee as a result of or in connection with the claim.

26.4

Indemnitee to Provide Reasonable Assistance. The Indemnitee will provide reasonable assistance to the Indemnitor, at the Indemnitor’s cost and expense, including reasonable assistance from the Indemnitee’s employees, agents, and Affiliates, as applicable. The Indemnitor may not consent to the entry of any judgment or enter into any settlement that provides for injunctive or other non-monetary relief affecting the Indemnitee without the prior Written consent of the Indemnitee.

27.

TREATMENT OF CONFIDENTIAL INFORMATION

27.1

Use of Confidential Information. Each Party (the “Receiving  Party”) shall treat all Confidential Information of the other party (the “Disclosing  Party”) for all time and for all purposes as strictly confidential and held by the Receiving Party in confidence, and solely for the Disclosing Party’s benefit and use, and such Confidential Information shall not be used by the Receiving Party or directly or indirectly disclosed by the Disclosing Party to any third party except with the Disclosing Party’s prior written permission, provided, however, such Confidential Information may be provided as required by law, provided that the party required to disclose the information provides prompt notice and cooperates with the other party to enable the other party to prevent or limit such disclosure.  Supplier acknowledges that Owner may be required to disclose some or all of Supplier’s Confidential Information to Owner’s regulators, legislators, and other third parties as part of regulatory proceedings. In so doing, Owner will request a materially similar level of protection for such information as Owner would require for its own similar Confidential Information.

27.2

Return of Confidential Information. At the Disclosing Party’s request the Receiving Party shall return all Confidential Information to the Disclosing Party or provide a written certification that all such Confidential Information and/or copies have been destroyed. 

27.3

Remedy for Breach. The Receiving Party acknowledges and agrees that the Disclosing Party shall be irreparably harmed if the Receiving Party’s obligations under this Section 27 are not specifically enforced and that money damages would be inadequate to remedy any Contactor breach of such obligations. Therefore, the Receiving Party agrees and consents that, in addition to any other remedy that the Disclosing Party may have at law or in equity, the Disclosing Party may seek to enforce this Contract by injunction, restraining order, or other equitable remedy, which may be granted immediately upon commencement of a suit and without notice or prejudice to any other remedy the Receiving Party may have. The Receiving Party waives (a) the defense that damages at law will be adequate to remedy such breach or threatened breach of this Contract and (b) any requirement or entitlement to demand that the Disclosing Party post any bond in connection with any suit at equity to enforce the above provisions with respect to Confidential Infomation.

28.

LICENSE  TO USE PROPRIETARY INFORMATION

28.1

License to Proprietary Information.  Supplier agrees to grant and hereby grants to Owner an irrevocable, non-transferable, non-exclusive, royalty-free license under all patents, copyrights and other proprietary information of Supplier related to the System now or hereafter owned or controlled by Supplier, but only to the extent reasonably necessary for the operation, of the System or any subsystem or component thereof designed, specified, or constructed by Supplier under this Contract.

28.2

License To Manufacturing Know-How.  The License described in Section 28.1 includes the perpetual grant to Owner of the right to use the Manufacturing Know-How, and all Supplier’s intellectual property rights related thereto, to manufacture or have manufactured Equipment (including all firmware and Software included in or necessary for operation of the Equipment) in the circumstances in which the Manufacturing Know­How is released from escrow pursuant to Section 28.3

28.3

Escrow and Release of Manufacturing Know-How

(a)

Supplier shall deposit Manufacturing Know-How in escrow with NCC Group, Inc. (“Escrow Agent”). Supplier hereby agrees to update the escrow with the most up-to­date version, including all generally available improvements, and corrections, and the documentation thereto, as soon as reasonably possible after dissemination of the above to the general market place.  The escrow agreement shall provide Owner with the right to verify the completeness and accuracy of the escrow content.

(b)

The Manufacturing Know-How will be released from escrow to Owner, at Owner’s request, upon the occurrence of one or more of the following events:

(i)

(A) a receiver, trustee, or similar officer is appointed for the business or property of Supplier; or

(ii)

Termination of this Contract by Owner pursuant to Section 20.3(a) (termination for Supplier Event of Default); or

(iii)

If a force   majeure event prevents Supplier for performing a material obligation under the Contract for more than ninety (90) days.

(c)

If the Manufacturing Know-How is released to Owner, Owner will pay Supplier  a Manufacturing Fee for any unit of Equipment manufactured by Owner, or for Owner, using the Manufacturing Know-How at the following per-unit rates: 

(d)

The foregoing Manufacturing Fee shall not be payable with respect to Equipment that is purchased by Owner from licensed original equipment manufacturers (OEMs) of Supplier (e.g., meters purchased from meter manufacturers).

(e)

Owner will report the number and type of Equipment units manufactured and pay the Manufacturing Fees to Supplier quarterly, within *** following the ***.

(f)

If Owner elects to have the Manufacturing Know-How released from escrow pursuant to this Section, Supplier shall:

(i)

provide reasonable and prompt assistance and cooperation to Owner to assist Owner to establish a source of Equipment supply using the Manufacturing Know-How and Supplier Material; and

(ii)

At Owner’s  expense, provide Owner with engineering and consulting Services  relating  to  the  Manufacturing  Know-How  for  such  period  as Owner may request,  not to exceed ***.  Supplier may charge for such Services on a time and materials basis at the labor rates set forth in Exhibit K.

(g)

Supplier and its successors and permitted assigns hereby covenant and agree not to assert against Owner or any of its officers, directors, employees, agents, contractors, suppliers, successors or assigns, ***, including ***.

(h)

Upon release of the Manufacturing Know-How and Supplier Material from escrow pursuant to this Section, Owner may, directly or through its contractors and suppliers:

(i)

Use the Manufacturing Know-How including including all Supplier intellectual property rights related thereto to manufacture or have manufactured Equipment solely for use by Owner in its service territory, and not for resale, and to maintain and support products and to improve, enhance and create derivative works of the various components of the Equipment.  ***. Owner shall execute such documents and take such steps as are reasonably requested by Supplier ***.

(ii)

Enter  into  agreements  with  Supplier’s suppliers  for  the  continuing supply of System components  to Owner on substantially  the same terms and conditions  as those set forth  in the Supplier  Materials.   In addition, Owner shall be permitted to share access to the ***.

(iii)

In  the  event  Supplier  ceases  to  continue  as  an  ongoing  concern, Owner  may  hire  Supplier’s  employees,  notwithstanding  any  non­solicitation provisions included elsewhere  this Contract.

(i)

Owner’s obligation to pay the Manufacturing Fee to Supplier shall survive and continue despite any expiration or termination of this Contract.

28.4

Source Code Escrow.  Supplier has deposited a copy of the current version of the source code and relevant documentation for the Software in escrow with NCC Group, Inc. (“Escrow Agent”), Escrow Agreement Number:  38105. Supplier hereby agrees to update the escrow with the most up-to-date version, including all generally available improvements, and corrections, and the documentation thereto, as soon as reasonably possible after dissemination of the above to the general market place. Supplier certifies that said Escrow Agreement includes a provision which requires Escrow Agent to contact Supplier at least annually to notify Supplier of its continuing obligation to update the escrow as required herein.

28.5

Owner shall have the right to obtain from the Escrow Agent one copy of all Source Code and documentation for the Software that has been placed in escrow, under the following conditions:

(i)

(A) a receiver, trustee, or similar officer is appointed for the business or property of Supplier; or

(ii)

If Owner determines  in its good faith discretion that Supplier has failed to or is unable to maintain said Software as per this Contract for a period of at least ***, Owner shall give written notice to Supplier, and  within ***, Supplier has still failed to maintain the Software as per this Contract; or

(iii)

Supplier is in material breach of its obligations as to maintenance or modification of the Software  under this Contract or  any  maintenance agreement entered into in connection with the Software and has failed to remedy  such default  notified  by Owner  to Supplier  within  a reasonable period.

28.6

If there is a genuine dispute or disagreement among the parties as to Supplier’s performance under this Contract which cannot be settled by the parties before Owner obtains the right herein to acquire source code and documentation from Escrow Agent, the dispute shall be handled in accordance with Section 38, below.

28.7

In the event that Escrow Agent delivers under the escrow agreement herein, Escrow Agent shall deliver all information escrowed therein. The information delivered shall be subject to the license restrictions set forth in this Contract.

28.8

No Termination upon Bankruptcy. This Section 28 Escrow provision shall be deemed to be a “supplementary agreement” as contemplated in Section 365(n)(l)(B) of the Bankruptcy Code, 11 U.S.C. (the Code). In any bankruptcy action by Supplier, failure by Owner to assert its rights to “retain its benefits” to the intellectual property encompassed by the Software, pursuant to Section 365(n)(l)(B) of the Code, under an executory contract rejected by the trustee in bankruptcy, shall not be construed by the courts as a termination of the contract by Owner under Section 365(n)(l)(A) of the Code.

28.9

Treatment of Source Code upon Release from Escrow

(a)

If Owner becomes entitled to a release of the Source Code from, Owner may thereafter correct, modify, update and enhance the Software (all of the foregoing collectively  the “Derivative Works”) for the uses permitted by, and subject to the terms of, the Software license granted to Owner under this Contract. All such Derivative Works created by or for Owner shall be owned by Supplier and licensed exclusively to Owner under the terms of this Contract, including the right to ***.  Owner shall execute such documents and take such steps as are reasonably requested by Supplier to perfect Supplier’s  ownership of the intellectual property rights in such Derivative Works.

(b)

Owner shall keep the Source Code confidential and use it solely for the purposes set forth in this Contract and inform all employees who are given access to the Source Code by Owner  that the Source Code contains confidential trade secrets of Supplier and are licensed or provided to Owner as such.

(c)

Owner shall restrict access to the Source Code to those employees and independent contractors of Owner who have agreed to be bound by confidentiality  and use obligations consistent with those set forth herein, and who have a need to access the Source Code in order to carry out their duties or provide services for Owner. In addition, Owner shall be permitted to ***.  Upon request by Supplier, Owner shall provide Supplier ***, and shall take all reasonable actions required to *** in the event of ***,  or to otherwise ***.

29.

ACCEPTANCE

29.1

Acceptance Testing.  Following delivery and installation by Supplier of the Software on Owner’s system, Supplier shall certify in writing to Owner that the Software is ready for acceptance testing.  With Supplier’s assistance, Owner shall, within *** after receipt of such certification, operate the Software to determine whether:

(a)

the Software meets the specifications and performs the functions, as set forth in Exhibit B.

(b)

the Software is capable of running ***; and

(c)

the documentation  for the Software meets the requirements of this Contract, including the Exhibits hereto.

29.2

Acceptance. If the Software successfully meets these acceptance tests, the Owner shall notify the Supplier in writing within *** and the Software shall be deemed to be accepted (and the “Term” of this license shall be deemed to commence). If the Owner fails to give the Supplier notice of acceptance or nonacceptance within *** after written certification by the Supplier that the Software is ready for acceptance testing, the Software shall be deemed to be accepted by the Owner. 

29.3

Default. If the Software fails to meet any or all of the above-specified acceptance tests, the Owner shall forthwith notify the Supplier of such failure and the Supplier shall have *** thereafter in which to correct, modify, or improve the Software  to cause it to meet each such acceptance test and, thereafter, the Owner shall have *** in which to reconduct all of the acceptance tests specified  above. Owner may notify Supplier of said failures via verbal or written correspondence. Owner agrees to mail written notice to Supplier within *** after verbal notice is given to Supplier. This process shall be repeated  as may be reasonably necessary  until the Software is accepted  hereunder;  provided, however,  that if the ***, the Owner shall have  the right and option, following ***, to ***.

30.

UPGRADES AND FUTURE PACKAGE OPTIONS

31.

OWNER’S RIGHT TO COPY AND FORM UPDATED WORKS

31.1

The licensed  Software  may be copied,  in whole or in part, for Owner’s  internal use in testing  and evaluating the licensed  Software  or for purposes  of back-up or archiving, provided, however,  that no more than three copies (or the number specified in the Software license  Agreement, whichever is larger),  will be in existence  under this Contract at any one time without  prior written consent of Supplier.

31.2

With reference to copies it makes of the licensed Software, Owner agrees to reproduce any of Supplier’s copyright notices  and any proprietary legends  appearing thereon, and to include  the same on all copies it makes  in whole or in part. If Supplier’s copyright notice appears in machine readable form, Owner agrees to reproduce such notice in same form in which  it appears  to  the extent it is physically possible  to do so.

31.3

Owner may merge any machine readable form of the licensed Software with any other program material to form an updated work in accordance with instructions or information received  from Supplier.  Any portion of the licensed Software  included  in an updated  work  is subject  to all terms herein.

32.

DOCUMENTATION

32.1

Basic Required Manuals. Supplier will provide Required Manuals necessary to enable Owner to use, operate, and maintain the System. Supplier will provide Required Manuals in electronic format upon execution of this Contract. Within *** of availability, Supplier will provide electronic copies of updated Required Manuals.

33.

CLAIMS

33.1

Notification of Claims. Events may occur, including but not limited to delays beyond the control of Supplier as described in Section 8 and/or Contract Change Authorizations initiated by Owner under Section 15, which Supplier believes constitute a material change from the Contract requiring an adjustment to Contract terms, Contract Price and/or Critical Path Schedule. Supplier may seek adjustments to Contract terms, Contract Price and/or Schedules only through use of the Owner Contract Change Authorization Form. Each such request shall be referred to herein as a “Claim.”

33.2

Compliance With Deadlines for Submission. Timely knowledge of the existence and extent of a Claim is necessary for Owner to take any required action to eliminate or mitigate the resulting costs. Therefore, failure by Supplier to submit its Claim, and any supporting data, within the deadlines set forth in this Section 33 shall constitute automatic waiver of the Claim by Supplier, unless Owner has or receives knowledge of the claim by other means or the failure to notify does not prejudice Owner’s ability to eliminate or mitigate the resulting costs of the claim.

33.3

Preliminary Notice of Dispute or Claim. Supplier shall provide preliminary written notice to Owner of all Claims arising under this Contract, whether involving law, fact, or both, or Extra Work, as soon as possible, but in no event not later than *** after the Supplier knew or should have known of the event giving rise to the dispute or claim; provided however, that if the Claim is of a *** and notice of the claim is not given as set forth above, the claim will be considered only for a

period commencing *** prior to the receipt by Owner of preliminary notice thereof; provided that failure to provide notice within the foregoing time frames will not relieve Owner of liability if Owner has or receives knowledge of the claim by other means, or if the failure to notify does not prejudice Owner’s ability to defend the claim. Preliminary notice of a Claim need not detail the amount of the claim, but shall state the facts surrounding the Claim in sufficient detail to identify the Claim, together with the character and scope thereof. 

33.4

Detailed Supporting Data. Detailed cost data supporting any payment requested from Owner must be submitted to Owner within *** of preliminary notice of the Claim. Continuing cost data supporting a request for payment must be submitted within *** of the the date that such cost data is available to Supplier. Claims will not be considered or paid for ***. It is the Supplier’s obligation to maintain records to substantiate the Claim.  

33.5

Owner Review of Claim. In conducting its review of Claims submitted by the Supplier, Owner may (a) request additional supporting data from the Supplier; and (b) obtain data or other information from Supplier and Subcontractors or others who have information related to the events or occurrences giving rise to the Claim. Supplier shall be required to cooperate in any review conducted by Owner. Failure by the Supplier to so cooperate may result in rejection of the Claim. Owner may, subject to its full and complete discretion, either (x) ***; (y) ***; or (z) ***.

33.6

Supplier Disagreement With Owner Resolution of Claim. If Supplier does not agree with Owner’s decision with respect to a Claim, it shall not allow such rejection to delay the Work, but shall notify Owner promptly in writing that it is proceeding with the component of the Work associated with the Claim under protest.

34.

RELEASE OF LIENS

34.1

Supplier Release of Liens. Supplier shall provide, as a condition to payment by Owner of the Final Invoice, an executed release of liens in the form attached hereto as Exhibit F (“Supplier Final Release of Liens Certificate”) releasing Owner and its property from any and all claim or right of lien associated with labor and/or Material furnished by the Supplier or any of its Subcontractor Suppliers under the Contract. Supplier shall execute and deliver all such documents, if any, as may be required under local law to make the foregoing release effective and shall give all required notices to Subcontractors with respect to the foregoing release.

34.2

Subcontractor Compliance. Supplier shall also provide, as a condition to payment by Owner of the Supplier’s Final Invoice, executed releases of liens from Subcontractor Suppliers in the form attached hereto as Exhibit G (“Subcontractor Release of Liens Certificate”) that expressly provides the same waiver as provided by Supplier under the Supplier Release of Liens described in Section 34.1.

34.3

Lien Removal by Supplier. Should the Supplier’s Subcontractor Suppliers file a lien against Owner’s property, or any part thereof, as a result of providing labor and/or Material under this Contract, Supplier shall use reasonable efforts for promptly acting to remove any such lien through bonding, payment, or other legal action as required by Owner at Supplier’s expense.

35.

NOTICES AND COMMUNICATIONS.

35.1

Notices. Any notice, demand for information or document required or authorized by this Contract to be given to a Party shall be given in writing and shall be sufficiently given if delivered by overnight mail, overnight courier, or hand delivered, or if sent to such Party by overnight mail, overnight courier or hand delivery to such other address as such Party may designate for itself by notice given in accordance with this Section 35.1. Any such notice shall be effective only upon actual receipt thereof by the addressee. The address for the delivery of notices and bills to each Party and the respective telephone and facsimile numbers are as follows:

(a)

For Owner:

(b)

For Supplier:

36.

LIMITATION OF LIABILITY AND REMEDIES

36.1

Disclaimer of Certain Damages. EXCEPT FOR ***, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, INCIDENTAL OR EXEMPLARY DAMAGES ARISING OUT OF THIS CONTRACT, WHETHER FORESEEABLE OR UNFORESEEABLE (INCLUDING, BUT NOT LIMITED TO, DAMAGES FOR LOSS OF DATA, GOODWILL, PROFITS, INVESTMENTS, USE OF MONEY OR USE OF FACILITIES; INTERRUPTION IN USE OR AVAILABILITY OF DATA; STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER ASSETS) EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

36.2

Dollar Limit on Most Liabilities. EXCEPT FOR ***, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY’S LIABILITY TO THE OTHER OR TO ANY THIRD PARTY ARISING OUT OF OR RELATED TO THIS CONTRACT, THE PRODUCTS OR SERVICES, EXCEED THE AMOUNTS PAYABLE BY CUSTOMER UNDER THIS CONTRACT TO A MAXIMUM OF *** REGARDLESS OF WHETHER ANY ACTION OR CLAIM IS BASED ON SUCH CONTRACT, WARRANTY, INDEMNITY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT OR OTHERWISE.

36.3

Dollar Limit on Certain Liabilities. IN THE CASE OF BREACH OF SECTIONS 6 (PRICES AND PAYMENT) OR 27 (TREATMENT OF CONFIDENTIAL INFORMATION), AND IN THE CASE OF INDEMNIFICATION OBLIGATIONS UNDER SECTIONS 24 (INDEMNIFICATION) AND 25 (PATENT INFRINGEMENT AND OTHER INDEMNIFICATION), EACH PARTY’S LIABILITY SHALL BE LIMITED TO THE GREATER OF *** PAYABLE BY CUSTOMER UNDER THIS CONTRACT.

37.

AUDIT

37.1

Supplier Maintenance of Supplier Records. Supplier shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Contract. All accounting and control systems shall be maintained in accordance with Generally Accepted Accounting Principals.

37.2

Audit Rights. During the term of this Contract and for *** thereafter. *** prior written notice and during Supplier’s normal business hours, shall have the right to conduct an audit of the relevant portions of Supplier’s books of account, in such a manner as not to interfere with Supplier’s normal business activities, to verify compliance with this Contract. Supplier shall immediately pay any overdue payments revealed by such audit(s). Except as set forth below, such audit(s) may be conducted no more than *** period. *** shall bear the costs of the audit; provided, however, if the *** shall pay the costs of such audit, and ***. All information obtained by Owner’ independent third party representative during any such audit shall be treated as Confidential Information as defined in Section 1.

37.3

Subcontractor Compliance. Supplier shall require all Subcontractors to comply with the provisions of this Section 37, by including in any written contract agreement the flow-down right of audit provisions by Owner or its representative. 

38.

DISPUTES

38.1

Dispute Resolution.

(a)

Informal dispute resolution. In the event a dispute arises between Owner and Supplier, the project team member(s) will first strive to work out the problem internally. If the project team cannot resolve the dispute within *** days, ***.  If the dispute is not resolved within *** after being escalated to the *** and the *** then the *** will meet with the *** to resolve the dispute.

(b)

Notice of Dispute. Either Party asserting the existence of a dispute under this Contract not resolved in accordance with Section 38.1(a)(the “Dispute”) shall deliver a written Notice in accordance with Section 35 of this Contract (a “Dispute Notice”) to the other Party describing the nature and substance of the Dispute and proposing a resolution of the Dispute. The Party asserting a Dispute shall deliver a Dispute Notice within any applicable notice period for such Dispute to the extent specified in this Contract. In the absence of such notice period, the Dispute Notice shall be given as soon as practicable, but in no event later than *** after the Party delivering the Dispute Notice has actual knowledge of the fact or event from which the Dispute arises; provided that failure to provide notice within the foregoing time frames will not relieve the Party receiving the Dispute Notice of liability if such Party has or receives knowledge of the Dispute by other means, or if the failure to notify does not materially prejudice the receiving Party’s ability to respond to the Dispute Notice.

(c)

Executive Negotiation. During the first *** following the delivery of the Dispute Notice (and during any extension agreed to by the Parties, the “Negotiation Period”) an authorized executive officer of Supplier (the “Supplier’s Executive”) and an authorized executive officer of Owner (the “Owner’s Executive”) shall attempt in good faith to resolve the Dispute through negotiations. If such negotiations result in an agreement in principle among such negotiators to settle the Dispute, they shall cause a written settlement agreement to be prepared, signed and dated (an “Executive Settlement”), whereupon the Dispute shall be deemed settled, and not subject to further dispute resolution.

(d)

***.  ***.

38.2

Litigation. The Parties reserve all rights to adjudicate any Dispute ***, in any court of competent jurisdiction, in an action at law or equity; provided, however, ***.

38.3

Other Dispute Resolution Procedures. Notwithstanding the provisions set forth above in this Section 38, the Parties may, by mutual agreement, submit any Dispute for resolution in any other manner that they may agree to in writing at the time such Dispute arises; provided, however, that a Party’s agreement to any such other dispute resolution procedure with respect to any particular Dispute shall not act; as a waiver of the right of any Party to have any other Dispute resolved in accordance with the Dispute resolution procedures set forth above in this Section 38.

38.4

Confidential Settlement Context. All negotiations, discussions, offers, counter’ offers, data exchanges, proposed agreements and other communications between the Parties in connection with any of the pre-litigation negotiations or other Dispute resolution procedures contemplated, by this Section 38 are to be deemed as having been made, exchanged and taken in confidence subject to the confidentiality provisions hereof. Without limiting the preceding sentence, all such communications shall be deemed to be in the context of attempting to settle a disputed claim, shall not be construed, or be admitted in evidence in any related ADR, litigation or other adversary proceeding, as an admission or agreement as to the liability of any Party to such proceeding.

38.5

Tolling of Statute of Limitations. The initiation of any Dispute resolution procedures under Sections 38.1(b) and 38.1(c), to the extent permitted by Applicable Law, shall, upon the delivery of a Dispute Notice (or other commencement event agreed to under Section 38.3 as the case may be), suspend the running of the statute of limitations, applicable to the Dispute described in such Dispute Notice until fourteen (14) calendar days after the conclusion of all such dispute resolution procedures expressly required by such Sections 38.1(b) and 38.1(c) or otherwise expressly agreed to under such Section 38.3, as the case may be.

38.6

Exception for Injunctive Relief. Notwithstanding the provisions set forth above in this Section 38, the requirement to submit Disputes *** pursuant to Sections 38.1(b) and 38.1(c)shall not apply if, and to the extent, that there exists an imminent threat of irreparable injury to a Party and that Party seeks and obtains a temporary restraining order or

preliminary injunction in a court of competent jurisdiction in an expedited proceeding in response to such threat; provided, however, in the event that a Party seeks but is denied such injunctive relief, or if such court otherwise determines, on motion of the defending Party or on its own, that the threat of irreparable harm was not so imminent as to preclude application of the *** and dispute resolution procedures in Sections 38.1(b), 38.1(c) and 38.1(d)then the Party that initiated such action shall reimburse the defending Party for its reasonable and documented attorney’s fees and related costs directly related to such court proceedings. 

39.

MISCELLANEOUS

39.1

Severability. If any term or condition of this Contract shall be deemed to be unlawful or unenforceable by a Federal or state court or agency of competent jurisdictions, such determination shall have no effect on the validity and enforceability of the other terms and conditions of this Contract and the challenged term or condition shall be deemed deleted or modified to the extent necessary for such term or condition to be effective to the fullest extent.

39.2

Governing Law and Venue. This Contract is to be interpreted and enforced under the law of the Delaware and any dispute involving the Contract shall be heard in a court of competent jurisdiction in such jurisdiction.

39.3

Survival of Termination. The provisions of Sections 5, 6, 18, 24, 25, 26, 27, 33, 36, 37, 38 and 39 shall survive the termination (whether by completion of the Work or otherwise) of this Contract.

39.4

Non-Waiver. No waiver by a Party of any provision of this Contract shall be effective unless expressly contained in a writing signed by the waiving Party. Failure by a Party to enforce any provision of this Contract or to exercise any right arising out of this Contract shall not be deemed a waiver of that provision or right, or of any other provision or right, and no waiver by a Party of any breach shall be construed to be a waiver of any prior or succeeding breach.

39.5

Entire Agreement and Interpretation. This Contract constitutes the entire agreement between the Parties, and supersedes all prior proposals, agreements and understandings, whether oral or written, relating to the subject matter of the Contract.

39.6

Third Party Beneficiaries. The provisions of this Contract are intended for the sole benefit of Owner and Supplier and there are no third-party beneficiaries hereof.

39.7

***.  Owner and Supplier will each use its reasonable best efforts ***, promptly *** and deliver or cause to be *** and delivered *** in addition to those required by this Contract, *** reasonably *** to implement any provision of this Contract.

39.8

Record Retention. Supplier agrees to retain for a period of *** from the *** all records relating to ***.

39.9

Merger of Prior Contracts. This Contract supersedes any other agreement, whether written or oral, that may have been made or entered into between Owner and Supplier relating to the System of the Work. This Contract and the Exhibits hereto constitute the entire agreement between Owner and Supplier with respect to the System, and there are no other agreements, representations, warranties or commitments with respect to the System except as set forth herein.

39.10

Counterpart Execution. This Contract maybe executed by the Parties hereto in any number of counterparts (and by each of the Parties hereto on separate counterparts), each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

39.11

***. Any amount owed to Supplier by Owner or any of Owner’s Affiliates shall be subject to deduction by Owner ***.

39.12

Publicity. Supplier agrees that it will not, without the prior written consent of Owner, use in advertising, publicity or otherwise, the name or logo of PHI, or the name or logo of any affiliate of PHI, or refer to the existence of this Contract in any press release, website, advertising or promotional material. Supplier shall, within ***.

39.13

Independent Supplier. Owner’s methods, equipment, and facilities used by Supplier shall, at all times, be under Owner’s exclusive direction and control. Supplier’s relationship to Owner under this Contract shall be that of independent Supplier and shall not be construed to constitute Supplier, or any of its employees or Subcontractors, as an authorized representative, agent, associate, joint venturer, or partner of Owner.

39.14

Assignment. This Contract is not assignable by either Party without the written consent of the other Party; provided, however, that both Parties are permitted to assign this Contract without such consent in connection with a merger, acquisition, corporate reorganization or sale of all or substantially all of its relevant assets, and both Parties shall be permitted to assign its rights and obligations hereunder to an Affiliate without the prior consent of the other Party.

Nothing in this Contract shall restrict the transferability of shares, or other interests in Owner or Supplier, or the issuance by either Owner or Supplier of additional shares. 

39.15

Binding Upon Successors. This Contract shall be binding upon and inure to the benefit of the Parties and their successors and permitted assigns.

39.16

Construction. This Agreement was prepared jointly by the Parties, and no rule that it be construed against the drafter will have any application in its construction or interpretation.

39.17

Counterparts. This Contract may be executed in two counterparts with the same effect as if both signing Parties had signed the same document. The counterparts shall be construed together and constitute the same instrument.

39.18

Authorization by Parties. By executing this Contract, each person whose signature appears below on behalf of a Party certifies that he / she is authorized by such Party to enter into this Contract and that such Party agrees to be bound by this Contract

PHI SERVICE COMPANY

By:

Dennis R. Wraase

Name:

Dennis R. Wraase

Title:

Chairman of the Board and CEO

Date:

January 30, 2009

SILVER SPRING NETWORKS, INC.

By:

Scott A. Lang

Name:

Scott A. Lang

Title:

CEO

Date:

2-4-08

EXHIBIT A – Safety

EXHIBIT B – Statement of Work (SOW)

EXHIBIT C – Software License Agreement

EXHIBIT D – Third-Party Software Deliverables and Terms

EXHIBIT E – Maintenance Agreement

EXHIBIT F – Supplier’s Final Release of Liens Certificate

EXHIBIT G – Subcontractor’s Release of Liens Certificate

EXHIBIT H – Contract Change Authorization Form

EXHIBIT I – NOT USED

EXHIBIT J – Description of SSN Equipment, Software, and System

EXHIBIT K – Pricing and Payment Schedule

EXHIBIT L – Hosting Agreement

EXHIBIT M – Source Code and Manufacturing Know-How Escrow Agreement

Location:

Substation Yard

Task

Hazard

Mitigation Steps

Material Handling

Contact with overhead energized lines/equipment

Off-load in the clear and have a safety observer present

1

Product/Service Strategy

2

Approach, Methodology, and Capacity to Deliver

3

AMI System Information Specifications

4

AMI System Specifications

5

AMI *** Specifications

6

*** Specifications

7

*** Specifications

8

AMI *** Specifications

9

Glossary

Pepco Holdings, Inc.

1 of 46

Proprietary and Confidential

1.1

Semi-annually, SSN will provide PHI with a revised roadmap that includes but is not limited to product strategy, product plan, and product road map for the *** including ***, ***, ***, and ***.

1.1.1

NIC.

1.1.1.1

The NIC will provide access to all data stored in the ***.

1.1.1.2

***.

1.1.2

Electric Meters.

1.1.2.1

*** of all electric meter programming will be made available by 3Q 2009 and electric meter firmware will be made available by 4Q 2009.

1.1.2.2

By mid July 2009, ***.

1.1.2.3

SSN will assist PHI with the ***.

1.1.3

***.

1.1.3.1

Provision of *** for PHI’s meter population as defined in the table in section 6.2.4.

1.1.3.2

Provision of *** for the *** by Q4, 2009.

1.1.3.3

Provision of high-end commercial module by Q3 2009.

1.1.3.4

***.

1.1.3.5

***.

1.1.3.6

***.

1.2

SSN will implement a users group by Q 1, 2009 and facilitate meetings of this group on an annual basis.

Pepco Holdings, Inc.

2 of 46

Proprietary and Confidential

2.1

Project Management – SSN:

2.1.1

SSN will assign a PHI-dedicated resource as Project Manager for the full deployment – from initial planning through to project acceptance. The Project Manager is the main resource for planning and implementing the project, and will be the main point of contact between PHI and Silver Spring Networks and partners.

2.1.2

SSN will assign a management team to support the Project Manager consisting of (1) ***, (2) ***, (3) ***, and (4) ***.

2.1.3

SSN will implement at a minimum the following project team with roles and responsibilities of each defined below. SSN to ensure that project team is adequate to meet all responsibilities defined in this SOW.

·

Efficient communication between the PHI and SSN teams

·

Management of the project schedule

·

Management of SSN resources

·

Quality of SSN products and services

2.1.4

PHI has the right to approve or request replacements for SSN project resources.

2.2

Project Management – PHI. PHI will assign a SSN-dedicated resource as Project Manager for the full deployment - from initial planning through to project acceptance.

2.2.1

The Project Manager is the main resource for planning and implementing the project, and will be the main point of contact between Silver Spring Networks and PHI.

Pepco Holdings, Inc.

3 of 46

Proprietary and Confidential

2.2.2

PHI will assign a management team to support the Project Manager consisting of a Project Sponsor and appropriate business and domain experts. 

2.3

Procedures and Processes. SSN will document procedures and process maps for customer support, change control, troubleshooting (whether the problems stem from system, meter, or installation), and RMA / Warranty further support successful implementation.

2.3.1

SSN will provide independent documentation for ***.

2.3.2

PHI will approve procedures and process maps for implementation.

2.4

Communications. SSN will track and communicate project activities and task completion during weekly meetings with PHI beginning after contract execution using tools that include ***.

2.4.1

The items listed in 2.4 above are rolled into ***.

2.4.2

SSN will provide ***. PHI and SSN will ***. SSN will provide ***.

2.5

PHI and SSN will formally communicate via the following schedule (final distribution lists to be provided by PHI):

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

2.6

SSN will not publically communicate any information about the AMI Solution at or for PHI without the permission of PHI.

2.7

Scope Changes. When the need arises for potential changes in the scope, schedule or budget, ***, ***.

2.8

SSN will draft and provide to PHI an initial implementation plan that outlines the steps required from contract execution to *** installation. SSN will further draft and provide to PHI an initial project plan that outlines all steps required from contract execution to completion of ***.

2.9

Materials Forecasting and Ordering Process.

2.9.1

Purchase of Equipment. During the term of this Agreement, PHI may order Equipment *** from SSN through the issuance of a purchase order (“Purchase Order”) specifying the type and quantity of Equipment ordered, the shipment destination and the requested delivery date. The requested delivery date shall be at least *** after the date the purchase order is accepted unless otherwise agreed in writing. Each purchase order shall be accepted or rejected by SSN in writing within *** after receipt by SSN. PHI may not cancel or modify any purchase order after it has been accepted unless mutually agreed in writing by both PHI and SSN.

2.9.2

Forecasts. PHI will work with SSN to develop a written inventory ordering and inventory management process that provides reasonable forecasting and reasonable assurance of supply. PHI will provide an initial *** forecast no less than *** prior to the delivery date of the initial Equipment. PHI will provide SSN a rolling ***. All forecasts are for planning purposes only and are non-binding upon PHI.

2.9.3

SSN monthly shipment schedule to PHI. At the beginning of each month, SSN will provide to PHI electronically a schedule of shipments during that month for all Equipment.

2.9.4

SSN confirmation of shipment to PHI. Upon shipment of any Equipment to PHI, SSN will notify PHI electronically.

2.9.5

Inspection and Acceptance or Rejection. PHI shall inspect the Equipment within *** (the “Inspection Period”) to ascertain correct quantities and visible damage or deviation from the Purchase Order. Upon notice to SSN within the Inspection Period, SSN agrees to replace all damaged or incorrect Equipment and deliver, at SSN’s expense, replacement Equipment in order to meet the correct quantities. Such replacement deliveries shall be completed within a reasonable time from the receipt by SSN of PHI’s notice. Failure by PHI to provide such

Pepco Holdings, Inc.

4 of 46

Proprietary and Confidential

notice to SSN within the Inspection Period shall constitute acceptance of the Equipment in the applicable shipment; provided that such acceptance shall not prejudice PHI’s warranty rights articulated in the PHI-SSN Terms and Conditions for Supply and Install of a Smart Grid System. 

2.9.6

SSN will provide a data file to PHI documenting appropriate Equipment information. PHI and SSN will work together to define the content of this data file. PHI will import such file into ***.

2.9.7

Changes in Equipment. SSN may at any time add, replace, or delete Equipment from its Product line *** and may at any time change the specifications for any Equipment ***, provided, however, that any such additions or replacements shall satisfy the requirements of section 4.2.5.

2.10

AMI System Deployment Period - Delaware. SSN will deploy a fully operational AMI solution in the Delmarva Power & Light (DPL) – Delaware. Deployment of approximately ***.

2.11

AMI System Deployment Period – remainder of PHI service territory. PHI desires to deploy a fully operational AMI solution in the following segments of the PHI service territory; however, such deployment is contingent upon receipt of appropriate regulatory approvals. For advance planning purposes, such additional deployments would consist of the following:

2.11.1

Potomac Electric Power Company (Pepco) – Maryland. Deployment of approximately *** in the Pepco Maryland Service territory.

2.11.2

Delmarva Power & Light (DPL) – Maryland. Deployment of approximately *** in the DPL service territory.

2.11.3

Potomac Electric Power Company (Pepco) – DC. Deployment of approximately *** in the Pepco service territory.

2.11.4

Atlantic City Electric Company (ACE). Deployment of approximately *** in the ACE service territory.

2.12

Flexibility of schedule. PHI has identified, to the best of its knowledge, the anticipated AMI solution deployment schedule. PHI anticipates that this schedule will change periodically due to regulatory guidance. PHI will update SSN as schedule changes occur.

3.1

Electric Metering

3.1.1

Electric days are defined as 24-hour periods from 12:00 Midnight Eastern Prevailing Time of one day to 12:00 Midnight Eastern Prevailing Time of the subsequent day.  ***.

3.1.2

Interval Data

3.1.2.1

Interval data is defined as incremental consumption data occurring during defined interval and register values used to define incremental consumption data as stored in the C12.19 tables of the meter.

3.1.2.2

The system supports 5, 15, 30, and 60-minute interval data recording *** provided that the meters selected by PHI support this number of recording channels

3.1.2.3

Resolution. The system provides a minimum resolution of one watt-hour register reads, provided that the meters selected by PHI support this resolution.

3.1.2.4

Delivery Per Billing Cycle. The system communicates *** all 15-minute billing cycle interval data ***.  The system communicates *** all 15-minute billing cycle interval data ***.

3.1.2.5

Daily Delivery. The system communicates *** all daily 15-minute interval data ***.

3.1.2.6

Hourly Delivery. The system communicates *** all 15-minute interval data ***.

3.1.2.7

15-Minute Delivery. The system communicates *** all 15-minute interval data ***.

3.1.2.8

5-Minute Delivery. The system communicates *** all 5-minute interval data ***.

3.1.2.9

Time Accuracy. The system provides time accuracy of interval data to ***.

3.1.2.10

Configurability. The system will *** change system wide communications interval length as well as interval recording channel types and quantities and interval recording length by individual meter, and batch of meters, remotely ***.

Pepco Holdings, Inc.

5 of 46

Proprietary and Confidential

3.1.3

Demand 

3.1.3.1

The system communicates peak kW demand reading as defined in the meter and as stored in the C12.19 tables of the meter.

3.1.3.2

Delivery Per Billing Cycle. The system communicates *** all billing cycle demands for ***.  Billing cycle demand register is remotely reset following successful billing cycle read.  ***.

3.1.3.3

Time Accuracy. The system supports time accuracy of demand period to ***.

3.1.3.4

Configurability. The system will *** change demand interval length and demand calculation method by individual meter, and batch of meters, remotely ***.

3.1.4

Time-of-Use

3.1.4.1

The system communicates the TOU registers and associated demand values associated with each TOU register as defined in the meter and as stored in the C12.19 tables of the meter.

3.1.4.2

Delivery Per Billing Cycle. The system communicates *** all time-of-use data ***.  Billing cycle demand registers are remotely reset following successful billing cycle read.  ***.

3.1.4.3

Time Accuracy. The system supports time accuracy of demand period ***.

3.1.4.4

Configurability. The system will *** enable, disable, and change peak, intermediate, and off-peak time-of-use periods by individual meter, and batch of meters, remotely ***.

3.1.5

Coincident Demand

3.1.5.1

The system communicates Power Factor, kVAR, and kVA at kW demand peak interval as defined in the meter and as stored in the C12.19 tables of the PHI selected meter.

3.1.5.2

Delivery Per Billing Cycle. The system communicates *** all billing cycle coincident demands ***.  Billing cycle coincident demand register is reset following successful billing cycle read.  ***.

3.1.5.3

Time Accuracy. The system supports time accuracy of demand period ***.

3.1.5.4

Configurability. The system will *** change demand interval length and demand calculation method by individual meter, and batch of meters, remotely ***.

3.1.6

Bi-Directional Metering

3.1.6.1

The system supports communication of delivered and received coincident demand and interval data recorded by the meters selected by PHI per requirements 3.1.1 through 3.1.5.4 for the entire PHI electric meter population.

3.1.6.2

The system will *** changing the programming of a meter from unidirectional to bi-directional ***.

3.1.7

Net Metering

3.1.7.1

The system supports derivation of net energy consumption (or communication of net consumption as calculated by the meter), communication of demand and coincident demand, and recording of interval data, per requirements 3.1.1 through 3.1.5.4 by means of delivered minus received bi-directionally metered quantities of 3.1.6.

3.1.7.2

The system stores values for each register configured on the meter, including Energy Delivered, Delivered + Received, and Delivered - Received, or any other register that may include net values.

3.1.7.3

The system will *** support remotely changing the programming of a meter from net metering to bi-directional metering ***.

3.1.8

Reactive Power

3.1.8.1

The system supports communication of reactive energy (kVAR and kVARh) consumption, demand, coincident demand, and interval data as defined in the meter per requirements 3.1.1 through 3.1.5.4 for the commercial and industrial meter population.

3.1.8.2

The system will *** support remotely changing the ability to enable and disable reactive power, provided the meters selected by PHI support such Reactive Power recording and remote configuration.

Pepco Holdings, Inc.

6 of 46

Proprietary and Confidential

3.1.9

Apparent Power 

3.1.9.1

The system supports communication of apparent energy (kVA and kVAh) consumption, demand, coincident demand, and interval data as defined in the meter per requirements 3.1.1 through 3.1.5.4 for the commercial and industrial meter population.

3.1.9.2

The system will *** support remotely changing the ability to enable and disable apparent power, provided the meters selected by PHI support such Apparent Power recording and remote configuration.

3.1.10

On-demand Data Access. The system supports remotely initiated request for any available meter and system data.

3.1.10.1

On-demand Energized Meter Verification

3.1.10.1.1

The system communicates the real time energized status of an individual meter on request ***.  The system timestamps all requests and responses.

3.1.10.1.2

The system communicates the real time energized status per the following table. The system timestamps all requests and responses.

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

3.1.10.1.3

The SSN system shall indicate if the cause for a failed request to verify the energized status of an endpoint meter ***.

3.1.10.1.4

Energized meter verification automatically times-out *** or after a PHI remotely configurable duration greater than ***.

3.1.10.2

On-demand Meter Read

3.1.10.2.1

The system communicates, on request, any available meter registers (including register read, consumption, demand, coincident demand, specific day interval data, meter/system status, meter events, power quality measures, voltage) of an individual meter, or batch of meters as stored in the C12.19 tables of the PHI selected meters. The system timestamps requests and responses.

3.1.10.2.2

The system delivers on-demand meter read data for a single meter ***.

3.1.10.2.3

The system delivers on-demand meter read data for up to *** within *** of request initiation.

3.1.10.2.4

For failed data reads, the system communicates the failure reason, ***.  The system communicates cumulative failure statistics over a user-defined time period.  ***.

3.1.11

Power Outage Detection and Notification

3.1.11.1

The system detects, timestamps, and reports the loss of, power.

3.1.11.2

Definition of Power Loss

3.1.11.2.1

Power loss is any event ***.

3.1.11.2.2

The system will communicate power fails ***.

3.1.11.3

The scale of the outage does not impact message delivery latency.

3.1.11.4

Outage detection notification for each meter will be available from the system head-end within the post-detection latency and reliability ***.

3.1.11.4.1

Single Meter Sustained Outage (Single No-light Secondary Outage). Outage detection notification is available from the system head-end ***.

Pepco Holdings, Inc.

7 of 46

Proprietary and Confidential

3.1.11.4.2

Multiple Meter or Transformer Sustained Outages of Less Than 100 Meters. Outage detection on a scale of 10 to 100 meters ***. 

3.1.11.4.3

Small Scale Sustained Outage (Multiple Primary Outages). Outage detection notification is available from the system head-end ***.

3.1.11.4.4

Medium Scale Sustained Outage (Primary Outage). Outage detection notification is available from the system head-end ***.

3.1.11.4.5

Large Scale Sustained Outage (Primary Outage). Outage detection notification is available from the system head-end ***.

3.1.11.5

Outage Detection Mode. SSN will implement in the UIQ Outage Detection System module the ***.  This capability will be implemented in such a way that it can be enabled or disabled *** made available to PHI.

3.1.11.8

Event Filtering.

3.1.11.8.1

***.

3.1.11.8.2

Momentary outages are categorized as *** lasting less than 60 seconds, while a sustained outage would be *** longer than 3 or 5 minutes (IEEE 1366).

3.1.11.9

At the meter level, the last gasp messages are timed ***.

3.1.11.10

Outage notification is event driven ***.

3.1.11.11

The NIC embedded in the device attempts to send last gasp ***.

3.1.11.12

For battery backed devices, loss of power *** will be issued ***.

3.1.11.13

Outage detection capability for network components ***.

3.1.12

Blink / Momentary Outage. Momentary interruptions are defined as a reduction of line-side voltage ***.

3.1.12.1

Blink/Momentary reporting is initiated by the meter.  ***.

3.1.12.2

Counts: The system captures and maintains a count of momentary interruptions.

3.1.12.3

The system reports momentary interruption counts on-event ***.

3.1.12.4

Events: The system captures and reports the date and time of each momentary interruption on the occurrence of each event by meter.

3.1.13

Power Quality and Voltage Monitoring and Reporting

3.1.13.1

The meter monitors line-side RMS voltage and the system communicates on a daily basis ***.

3.1.13.2

The system communicates sag and swell information ***.

3.1.13.3

The system communicates power quality and voltage deviation events with date and time stamping ***.

3.1.13.4

The system communicates voltage and current harmonic distortions recorded by the meter ***.

3.1.13.5

The system communicates line side to neutral RMS voltages for each power supply line to the meter ***.

3.1.13.6

The system reports Pst & Plt as recorded by the meter selected by PHI as defined by IEEE 1453 ***.

3.1.13.7

***.

3.1.14

Power Restoration Detection and Notification

3.1.14.1

The system detects, time stamps and reports the restoration of power.

Pepco Holdings, Inc.

8 of 46

Proprietary and Confidential

3.1.14.2

Definition of Power Restoration. 

3.1.14.2.1

NICs are programmed to send a restoration message ***.

3.1.14.2.2

The system will make available in *** and *** to detect *** as enabled by the meter provided ***.

3.1.14.3

Delivery of restoration notification ***.

3.1.14.4

Restoration detection notification for each meter is available from the head-end system ***.