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Exhibit
ITEM 16 - 2b
MATERIAL CONTRACTS
CELLNET SERVICE AGREEMENT
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CELLNET SERVICES AGREEMENT
This Services Agreement (Agreement) is made and entered into as of
__________, (the Effective Date), by and between CellNet Data Services (SF),
Inc., a Delaware corporation with principal offices at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (CellNet), and PowerSource Corp., a Nevada corporation with
principal offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Client).
RECITALS:
WHEREAS, CellNet has developed proprietary data communications technology
and the related equipment and computer software which enable it to install and
operate a network known as the CellNet data communications system for the
purposes of remote data acquisition and process control (the System);
WHEREAS, CellNet has also developed applications and equipment for the
System that are of particular use in the business of Client; and
WHEREAS, Client desires to order the Services provided by CellNet using the
System. NOW, THEREFORE, the parties hereby agree as follows: 1. Client may order
Services from time to time and any Services ordered shall be provided by CellNet
in accordance with the terms and conditions attached hereto as Exhibit A. 2. The
price of such Services shall be as set forth from time to time in CellNet's
Services Price List. 3. Exhibit A and any other exhibits which are initialed by
Client and CellNet and are attached hereto are, by this reference, incorporated
herein. IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives on the date set forth above.
PowerSource Corp. CellNet Data Services(SF), Inc.
Client CellNet
By:/S/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
Its: Director Its: Director
Exhibit A.
Terms and Conditions
Section 1. Definitions.
As used in this Agreement, the following terms shall have the meanings
assigned to them unless the context of their use requires otherwise.
1.1 "Client" shall mean the party so designated in the preamble to this
Agreement, and shall include its successors and permitted assigns.
1.2 "Commercial Customer" shall mean that segment of Client's Customer
market for energy services, other than Residential Customers, whose service is
provided using meters so classified under applicable utility service tariffs.
1.3 "Connectivity Services" shall mean those Services related generally to
the physical equipment and activities necessary to connect a particular Meter or
group of Meters to the System, as described in the CellNet Directory of
Services.
1.4 "Coverage Area" shall mean the geographic area in which CellNet
privides its Services available as defined in the most recently published
Directory of Services.
1.5 "Customer" shall mean a customer of a Client belonging to any Customer
Segment to whom Client provides energy services.
1.6 "Customer Segment" shall mean a segment of the Client's energy services
market known as either Residential Customers, or Commercial Customers.
1.7 "Data Services" shall mean the retrieval and provision of data from one
or more Meters, as described in the Directory of Services.
1.8 "Directory of Services" shall mean the published description of
CellNet's standard Service offerings, performance standards applicable to Data
Services, Client processes and procedures and the Coverage Area, in effect at
the time of an order under this Agreement.
1.9 "Initial Service Period" shall mean that minimum period of time for
which Client has ordered and agreed to make payment for Services to a particular
Meter or group of Meters as set forth in Section 2., below.
1.10 "Meter" shall mean the device for measuring and recording the quantity
or rate of flow of electricity passing through it.
1.11 "Meter Module" shall mean System interface products approved by
CellNet and required to be installed in order for CellNet to provide Services to
Client.
1.12 "Network" shall mean the System Equipment installed and configured by
CellNet to provide the System's data communications capability.
1.13 "Non-recurring Charges" shall mean those charges for Services which
are typically performed once with respect to an individual Meter, group of
Meters (such as installation or retrofit Services) or other processes (such as
System Integration Services).
1.14 "Regulatory Body" means the federal, state or local government agency
having jurisdiction over the affected Service, product or other activity.
1.15 "Residential Customer" shall mean that segment of Client's Customer
market for energy services, other than Commercial Customers which includes
exclusively metered service to customers classified as residential under
applicable utility service tariffs regardless of the type of meter used to meter
such service.
1.16 "Recurring Charges" shall mean those charges for Data Services or
other Services which recur on a periodic basis, i.e. month to month, with
respect to a particular Meter or group of Meters.
1.17 "Services" mean the Data Services, Connectivity Services and such
other services as may be described in the Directory of Services.
1.18 "Service Initiation Fee" means that fee described in the Services
Price List.
1.19 "Services Price List" shall mean CellNet's most recently published
price list for Services, as it may be revised from time to time.
1.20 "Specifications" shall mean CellNet's standard specifications relating
to manufacture and performance of the Meter Module as they may be revised from
time to time.
1.21 "System Equipment" shall mean and include all of the physical
components of the System, including all related software and hardware.
Section 2. Purchase and Sale of Services.
CellNet shall make Services available in the Coverage Area and Client shall
order, purchase and accept such Services pursuant to and in accordance with this
Agreement and CellNet's Directory of Services, a copy of which Client hereby
acknowledges it has received. CellNet shall provide Services in accordance with
the performance standards set forth in the Directory of Services and the
applicable rules and regulations established by the Regulatory Body. Client
shall order Services by providing a CellNet standard service order in the format
and containing such information as set forth in the Directory of Services.
Notwithstanding the provisions of Section 4.0, Term, all orders for Data
Services shall be for a minimum of 12 months but shall not exceed sixty (60)
months from the date of the order with each Meter is associated. The provisions
of this Section 2. are expressly subject to the purchase by Client of Meter
Modules and the purchase from CellNet or provision by others of such
Connectivity Services as may be required to deliver the Services.
Section 3. Price and Terms of Payment.
Client shall pay for all Services in accordance with the Services Price
List unless otherwise provided in this Agreement. Any taxes, levies or other
charges imposed upon the Services (except those based upon CellNet's net income)
shall be for the account of Client or, if paid by CellNet, shall be reimbursed
to CellNet by Client upon demand. Any property taxes or charges or levies in the
nature of property taxes imposed upon System Equipment owned by CellNet and
located on Client's or Client's Customer's property shall be paid by CellNet or,
if paid by Client, shall be reimbursed to Client by CellNet upon demand.
Recurring Charges (including without limitation those for Data Services) shall
be invoiced by CellNet in advance, including prorata charges for Services
commenced during the preceding month. Non-recurring charges (including those for
Connectivity and all other Services which are typically performed) shall be
invoiced in arrears. Payment shall be due thirty (30) days after the invoice
date. A late payment charge in an amount equal to the lesser of one and one half
percent (1.5%) per month or the maximum amount permitted under applicable law
may be applied to the balance of any unpaid invoice commencing thirty (30) days
after the date of the invoice or ten (10) days after receipt of the invoice by
the party to whom it is sent, whichever is later. Notwithstanding the above, the
Data Services price for all Meters shall remain fixed during the Initial
Services Period.
Section 4. Term of Agreement
This Agreement may be terminated by either party upon thirty (30) days
advance written notice to the other; provided, however, that such termination
shall have no effect on the obligations of the parties with respect to Meters
whose Initial Service Periods have not yet expired. With regard to such Meters
the provisions of this Agreement shall remain in full force and effect until the
end of their Initial Service Periods.
Section 5. No Exclusivity.
Client acknowledges its understanding that CellNet intends to provide
communications services of various types on the System to parties other than
Client. Client expressly agrees that CellNet may, in its sole discretion, offer
services of any type on the System to any other entity.
Section 6. Spares and Inventory
In the event that Client orders Meter Support Services, as defined in the
Directory of Services, CellNet shall provide all necessary Meter and Meter
Module spares and inventory. These Meters shall be of the types specified in the
Directory of Services. If Client elects not to purchase Meter Support Services,
Client may (1) purchase Meter Inventory Management Services and CellNet will
maintain and manage its meter inventory stock purchase, or (2) purchase and
maintain an inventory stock of spare retrofitted Meters from which replacement
Meters may be drawn by another certified Meter service provider in the event of
Meter or Meter Module failures. In the event that Client elects not to purchase
Inventory Management Services from CellNet or have these services provided by
another meter service provider, CellNet shall only be obligated to exercise
commercially reasonable efforts in the delivery of Meter Module repair services
to Client.
Section 7. Warranty.
CellNet warrants for a period of twelve (12) months after the date of sale
that any Meter Module sold by CellNet to Client under this Agreement will
conform to the Specifications and will comply with any applicable rules and
regulations of (i) the Regulatory Body pertaining to electric metering services
or devices and (ii) the Federal Communications Commission pertaining to radio
devices. If a breach of this warranty should occur with respect to a Meter
Module, Client may return such non-conforming or non-complying Meter Module to
CellNet at CellNet's expense. CellNet shall in its discretion either repair or
replace such returned non-conforming or non-complying Meter Module within thirty
(30) calendar days of receipt at no expense to Client, as Client's sole remedy
for breach of the foregoing warranty.
Section 8. Credits for Data Service Failures.
In the event of any failure by CellNet to provide Data Services under this
Agreement in accordance with the performance standards contained in the
Directory of Services, Client shall promptly notify CellNet of such failure.
Upon verification that such failure was not the result of the acts of Client,
its Customer or an event of Force Majeure, CellNet shall credit Client's next
subsequent invoice with an amount determined by dividing the total monthly
charge for the affected Meter by the number of Meter reads to which Client was
entitled under the applicable performance standard and multiplying the result by
the number of Meter reads not provided to Client. In no event shall any credit
due hereunder exceed the total amount due from Client for the affected month.
Client expressly agrees that the failure to provide Data Services hereunder to
any particular Meter or group of Meters shall not constitute material breach of
this Agreement but shall only obligate CellNet to provide credits as set forth
above.
Section 9. Limitation of Liability.
9.1 IN NO EVENT SHALL CELLNET OR CLIENT BE LIABLE TO EACH OTHER IN
CONNECTION WITH THIS AGREEMENT FOR INDIRECT, SPECIAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES, INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOST PROFITS, REGARDLESS OF
THE FORM OF ACTION WHETHER IN CONTRACT, WARRANTY, STRICT LIABILITY OR TORT,
INCLUDING, WITHOUT LIMITATION, NEGLIGENCE OF ANY KIND, WHETHER ACTIVE OR
PASSIVE.
9.2 CLIENT SHALL INSERT A CLAUSE IN ITS AGREEMENTS WITH ITS CUSTOMERS WHO
PURCHASE CELLNET'S SERVICES FROM CLIENT AS FOLLOWS.
"NEITHER Client Nor its authorized representatives or contractors WILL be liable
to [customer name] for any indirect, special or consequential damages of any
nature (including, but not limited to, lost profits, costs of capital, or loss
of use of money), ON ANY THEORY OF LIABILITY, and HOWEVER CAUSED."
Section 10. Dispute Resolution.
In the event of any dispute between the parties which they are unable to resolve
at an operational level, such dispute shall be promptly escalated to succeeding
levels of management until it is finally resolved. Such disputes as the parties
are unable to resolve informally within ninety (90) calendar days may be
submitted by either party for binding arbitration in accordance with the
expedited rules of the American Arbitration Association by a panel of three (3)
arbitrators, provided that reasonable limited discovery will be allowed. In such
case each party shall, within thirty (30) days provide to the other its detailed
explanation of the dispute, the issues to be resolved and requested relief. Each
party shall reply to the other within thirty (30) days. Within ten (10) days
after the mutual exchange of explanations, each party shall choose an
arbitrator. Those two arbitrators will then together choose a third arbitrator
to complete the panel. Such arbitration shall be in lieu of any court
proceedings (except for enforcement of any arbitration award). Such arbitration
shall be held at a location to be mutually agreed upon by the parties, or,
failing agreement, in San Francisco, California. The arbitrators shall assess
costs (including reasonable fees for in-house and outside attorneys) as
appropriate to balance the equities between the parties. Any party enforcing an
arbitration award shall be entitled to recover all costs of enforcing such award
(including reasonable in-house and outside attorneys' fees). No arbitration
award shall include punitive damages and the arbitration panel shall be so
instructed.
Section 11 Indemnification
Each party shall indemnify, defend, and hold harmless the other, its
directors, officers, agents and employees from and against all third party
liabilities, losses, damages, costs (including court costs and reasonable
attorneys' fees), penalties (civil or criminal), expenses, fines, settlements,
interests, suits, causes of action, legal or administrative proceedings,
arbitrations, demands or claims arising in connection with the indemnifying
party's performance of its obligations under this Agreement (collectively,
"Third Party Liability") to the extent caused by the fault (including
negligence) of the indemnifying party's personnel, subcontractors, agents,
representatives, services or equipment, except that Third Party Liability shall
not include indirect, incidental or consequential damages. In addition, Client
shall indemnify CellNet in accordance with this Section 11. in the event any
action or claim is brought against CellNet by any of Client's Customers based
upon loss of use of electrical power unless such loss of power was attributable
to the fault (including negligence) of CellNet. The party to be indemnified
hereunder shall promptly notify the other party of any such suit or claim.
Section 12. Patent Infringement Indemnity.
The following terms apply to any infringement or claim of infringement of
any patent, trademark, copyright, trade secret or other legally protected
proprietary right of any third party relating to the Services provided by
CellNet under this Agreement. CellNet shall defend or settle, at its own
expense, and shall indemnify Client against all losses, damages, expenses,
liabilities or costs (including court costs and reasonable attorneys' fees) that
may result by reason of any such infringement or claim of, action form, or suit
for infringement. Client shall notify CellNet promptly of any claim of, action
for or suit for infringement for which CellNet may be responsible hereunder and
shall cooperate with CellNet (at CellNet's expense) in every reasonable way to
facilitate the defense of any such claim. If any of the System Equipment or a
particular activity performed pursuant to this Agreement is, in any such action
or suit, held to infringe, and its use is enjoined, CellNet shall, at its
election and expense, (a) procure for Client the right to continue to receive
service using the System Equipment or the right to conduct the activity, or
(b)modify or replace the System Equipment or activity so that it becomes
non-infringing while retaining substantially equivalent functionality.
Section 13. Patent Challenges.
Client hereby agrees that, as long as CellNet is providing Services
pursuant to this Agreement, Client shall not formally or informally challenge
any patent held by CellNet or its affiliates that in any way relates to the
System or the Services.
Section 14. Client Data Ownership.
Client shall retain ownership, or such other interest permitted by federal
or state statute or regulation, of all data collected by or from Client's Meters
or other equipment as well as any other information about Client's Customers,
equipment, or operations generated by the manipulation or processing of such
data.
Section 15. Confidentiality.
15.1 Confidential Information. For purposes of this Agreement,
"Confidential Information" shall mean any information or material which is
proprietary to the disclosing party or designated as Confidential Information by
the disclosing party and not generally known other than by the disclosing party.
Confidential Information also includes any information which the disclosing
party obtains from any third party which the disclosing party treats as
proprietary or designates as Confidential Information, whether or not owned by
the disclosing party. Confidential Information shall be clearly identified as
such when disclosed. In the case of Confidential Information transmitted in
writing, such information shall be clearly marked confidential. In the case of
information transmitted orally, the disclosing party shall provide written
confirmation of the Confidential Information disclosed within thirty (30) days
of disclosure. Confidential Information does not include the following:
(i) Information which is known by the receiving party at the time of
receipt from the disclosing party which is not subject to any other
non-disclosure agreement between the parties;
(ii) Information which is now, or which hereafter becomes, generally known
to the industry through no fault of the receiving party, or which is later
published or generally disclosed to the public by the disclosing party; or
(iii) Information which is otherwise lawfully developed by the receiving
party, or lawfully acquired from a third party without any obligation of
confidentiality.
15.2 Nondisclosure. The receiving party agrees to hold in confidence and
not to disclose or reveal to any person or entity any Confidential Information
disclosed hereunder without the clear and express prior written consent of a
duly authorized representative of the disclosing party. The receiving party
further agrees not to use or disclose any of the Confidential Information for
any purpose at any time, other than for the limited purpose(s) of this
confidence. In the event that either party is directed to disclose any portion
of any Confidential Information of the other party or any other materials
proprietary to the other party in conjunction with a judicial proceeding or
arbitration, the party so directed shall immediately notify the other party both
orally and in writing. Each party agrees to provide the other with reasonable
cooperation and assistance in obtaining an appropriate protective order and in
taking any other steps to preserve confidentiality. In the event either party
were to use consultants, contractors, or other third parties in connection with
this Agreement, the party intending to use such third party shall first have
such third party execute an appropriate nondisclosure agreement satisfactory to
the other party.
15.3 Terms of Agreement. The parties agree that the terms of this
Agreement, including the CellNet Directory of Services and any information
regarding pricing of services, constitute the parties' material Confidential
Information and shall be governed by the terms of this Section 15.
15.4 Survival. The obligations imposed by this Section 15 shall survive the
expiration or earlier termination of this Agreement for a period of five (5)
years. Upon expiration or termination of this Agreement, the disclosing party
with respect to its own Confidential Information may require the receiving party
and each person to whom the receiving party has given such Confidential
Information to either (a) return all copies of such Confidential Information, in
whatever form, in its and/or their possession to the disclosing party, or (b)
destroy all such copies and to certify such destruction in writing to the
disclosing party.
Section 16. Force Majeure.
Except for the payment of money when due, neither party shall be liable for
any failure to perform or delay in performing any provision of this Agreement in
the customary manner if such failure or delay shall be caused by an act of God;
explosion; fire; flood; drought; epidemic; earthquake; storm; riot;
insurrection; blockade; war or other hostilities; strike, lockout or other
industrial disturbance (even if such labor difficulty may have been avoided or
may be settled by acceding to the demands of the parties in dispute); act or
restraint of governmental authority; shortage of supplies; power outage; RF
interference; failure in backhaul communications; serious breakage of, or
accidents to, machinery or equipment; failure of transportation or usual sources
of supply; and any other cause or event, whether foreseen or foreseeable, which
is reasonably beyond the control of the party claiming the excuse or delay and
which the affected party is not able to overcome by the exercise of reasonable
diligence. No party, however, shall be required to settle any strike, lockout or
other industrial disturbance on terms which in its sole opinion are
unsatisfactory.
Section 17 Assignment
This Agreement and the rights and obligations hereunder shall not be
assignable by either of the parties hereto without the prior written consent of
the non-assigning party, which consent shall not be unreasonably withheld,
except that either party may assign this Agreement to a parent or successor
through merger or consolidation. In the event of any such assignment, the
assigning party shall remain liable to the non-assigning party for the
performance of this Agreement. Notwithstanding the foregoing, CellNet may
disclose the provisions of this Agreement and grant a security interest herein
to one or more financial institutions to secure borrowings by and other
extensions of credit to CellNet without the further consent of Client.
Section 18. Notices
Any notices to be given under this Agreement (a)shall be in writing,
(b)shall be transmitted by telecopier to the number set forth in the most recent
Service order (with a confirmation copy by mail) or delivered by air courier or
deposited in the mail, postage prepaid and certified, (c)shall be addressed as
specified in the most recent Service Order, and (d)shall be deemed effective
when received.
Section 19. Survival of Obligations
The rights and obligations created in Sections 3, 10, 11, 12, 13, 14, and
15, shall survive any termination of this Agreement.
Section 20. Miscellaneous
Whenever any authorization, consent or approval is required or requested of
either party hereto, such authorization, consent or approval shall not be
unreasonably withheld or delayed. This Agreement, including the Exhibits
attached hereto, constitutes the entire agreement between CellNet and Client
with respect to the subject matter hereof and supersedes all prior oral or
written agreements, commitments or understandings with respect thereto. No
amendment or modification of this Agreement shall be binding on the parties
unless in writing and signed by authorized representatives of both parties. No
waiver of any of the terms or conditions of this Agreement shall be binding on
the parties unless in writing and signed by authorized representatives of both
parties. Any waiver of a breach of any of the terms or conditions of this
Agreement shall not operate as a waiver of any other breach of such terms or
conditions or of any other term or condition of this Agreement. If any provision
of this Agreement shall be held to be invalid or unenforceable under any present
or future law in whole or in part by any court of any jurisdiction, such
provision shall, as to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without invalidating the remaining provisions of
this Agreement or affecting the validity or enforceability of such provisions in
any other jurisdiction. Such invalid or unenforceable provision shall be
replaced as to such jurisdiction by a provision that comes closest to the
business objective intended by such invalid or unenforceable provision without
being invalid or unenforceable itself. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective successors and permitted assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of any third
persons to any party to this Agreement nor shall any provision give any third
persons any right of subrogation or action over and against any party to this
Agreement. This Agreement shall constitute a legally binding obligation of each
of the parties and shall inure to the benefit of and be binding upon their
respective successors and permitted assigns. Any questions concerning the
interpretation and enforcement of this Agreement shall be governed by the law of
the State of California without the application of its choice of law rules.