[**] indicates that information had been redacted and filed separately pursuant
to a confidential treatment request filed with the Securities and Exchange
Commission

Exhibit 10.1

PRODUCT SALES, SERVICES & SOFTWARE AGREEMENT

This PRODUCT SALES, SERVICES & SOFTWARE AGREEMENT  is entered into as of the 4th
day of September, 2009 (the “Effective Date”), by and between DUKE ENERGY
BUSINESS SERVICES LLC on its own behalf and as agent for and on behalf of DUKE
ENERGY CAROLINAS, LLC, DUKE ENERGY INDIANA, INC, DUKE ENERGY OHIO, INC., DUKE
ENERGY KENTUCKY, INC., and After Acquired Affiliates (collectively, “Duke
Energy”), and AMBIENT CORPORATION (“Ambient”), a Delaware corporation having a
principal place of business at 79 Chapel Street, Newton, MA 02458.

WI T N E S S E T H

WHEREAS, Duke Energy provides a wide range of energy related products including
electricity generation and distribution to end-users through electric power
lines, and Duke Energy generates, transmits, distributes and sells electricity
to approximately 3.8 million customers; and

WHEREAS, Ambient is a utility communications solutions provider that develops
and markets smart grid communications technologies, products and services which
are designed to facilitate a comprehensive (end-to-end solution) for high speed
transmission and reception of Internet Protocol data traffic for utility
applications (“Ambient’s Smart Grid Solution”); and

WHEREAS, Duke Energy and Ambient entered into a Network Management Software
License Agreement dated as of September 25, 2006 (the “2006 NMS License
Agreement”); and

WHEREAS, Duke Energy and Ambient entered into a Mutual Confidentiality and Non
Disclosure Agreement dated as of May 4, 2005 (the “NDA”); and

WHEREAS, Duke Energy and Ambient desire to enter into a binding agreement with
respect to the purchase of products and licensing by Duke Energy of Ambient’s
Smart Grid Solution; and

NOW, THEREFORE, in consideration of the terms and conditions hereafter set
forth, the Parties hereto agree as follows:

ARTICLE I
DEFINITIONS

As used herein, the following terms shall, unless the context otherwise
requires, have the following meanings ascribed to them:

1.1

“Affiliate” means with respect to any Party, any other person (other than an
individual) that, directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, such person. For
this purpose, “control” means the direct or indirect ownership of fifty percent
(50%) or more of the outstanding capital stock or other equity interests having
ordinary voting power, provided, however, Affiliate (as to Duke Energy) shall
not include any person that competes with Ambient with respect to the sale of
the Products, Services and Software provided to Duke Energy under this Agreement
unless otherwise agreed to by Ambient.

1.2

“After Acquired Affiliates” means an entity that becomes an Affiliate of Duke
Energy Business Services LLC after the Effective Date.

1.3

“Agreement” means this Product Sales, Service & Software Agreement and all
exhibits, attachments, schedules, and appendices hereto, all of which are
incorporated herein.

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1.4

“Ambient’s Intellectual Property” means all United States and foreign patents
(including without limitation all renewals and extensions thereof),
registrations and applications for registration of patents (including without
limitation continuations, continuations-in-part, reissues and extensions
thereof), applications for patent (including without limitation divisions
thereof), trade secrets and other intellectual property rights, whether now
existing or hereafter created, developed, arising or otherwise coming into
being, that relate to or cover any part of Ambient Technology, including without
limitation any intellectual property rights that could be violated, infringed or
misappropriated by any copying, manufacture, use, performance, distribution or
other exploitation of the Ambient Technology or part thereof.

1.5

“Ambient’s Smart Grid Solution” has the meaning ascribed thereto in the
recitals.

1.6

“Ambient Technology” or “Ambient Technologies” means any and all software,
hardware, technology, equipment, know-how, algorithms, procedures, techniques,
solutions, and work-arounds, whether contained in a technology or technique,
owned by or exclusively licensed to Ambient or to an Ambient Affiliate.

1.7

“Amended NDA” shall have the meaning ascribed to it in Section 5.4.  

1.8

“ARRA” shall have the meaning ascribed to it in Section 9.26.

1.9

"Bankruptcy Event" means any of the following events or circumstances with
respect to a Party:

a)

That Party is unable to pay its debts generally as they become due except if
resulting from failure of the other Party to fulfill its obligations pursuant to
this Agreement;

b)

That Party makes a general assignment for the benefit of creditors;

c)

That Party institutes proceedings to be adjudicated a voluntary bankrupt, or
consent to the filing of a petition of bankruptcy against it;

d)

That Party is adjudicated by a court of competent jurisdiction as being bankrupt
or insolvent;

e)

That Party seeks reorganization under any bankruptcy act, or consent to the
filing of a petition seeking such reorganization; or

f)

That Party has a decree entered against it by a court of competent jurisdiction
appointing a receiver, liquidator, trustee, or assignee in bankruptcy or in
insolvency covering all or substantially all of such Party’s property or
providing for the liquidation of such Party’s property or business affairs.

1.10

“Blanket Purchase Order” has the meaning ascribed thereto in Section 3(a) of
Appendix A-1.

1.11

“Business Day” means any day which is not a Saturday or Sunday or any federal
holiday as designated by the Congress of the United States.  

1.12

“Cancellation Fees” has the meaning ascribed thereto in Section 2(c)(i) of
Appendix A-1.

1.13

 “Confidential Information” has the meaning ascribed thereto in the NDA.

1.14

“Contract Manufacturers” has the meaning ascribed thereto in Section 3.2.

1.15

 “Delayed Release” means an accepted Release that Ambient determines that it
will not or will likely not deliver to Duke Energy by the Scheduled Delivery
Date for such Release.

1.16

“Development Proposal” has the meaning ascribed thereto in Section 9.25.  

1.17

“Development Request” has the meaning ascribed thereto in Section 9.25.  

1.18

“Documentation” means (i) materials created by or on behalf of Ambient that are
generally made available by Ambient and that describe or relate to the
functional, operational or performance capabilities of the Products or Software,
regardless of whether such materials be in written, printed, electronic or other
format; (ii) user, operator, system administration, technical, support and other
manuals; (iii) updates, changes and corrections to any of the forgoing that may
be made during the term of this Agreement; and (iv) the Specifications.

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1.19

“Duke Energy’s Intellectual Property” means all United States and foreign
patents (including without limitation all renewals and extensions thereof),
registrations and applications for registration of patents (including without
limitation continuations, continuations-in-part, reissues and extensions
thereof), applications for patent (including without limitation divisions
thereof), trade secrets and other intellectual property rights, whether now
existing or hereafter created, developed, arising or otherwise coming into
being, that relate to or cover any part of Duke Energy’s Technology, including
without limitation any intellectual property rights that could be violated,
infringed or misappropriated by any copying, manufacture, use, performance,
distribution or other exploitation of Duke Energy’s Technology or part thereof.

1.20

“Duke Energy-Supplied Components” means the electric meters, gas meters, data
concentrators, and their associated hardware and software described in the
Specifications.

1.21

“Duke Energy Technology” or “Duke Energy Technologies” means any and all
software, hardware, technology, equipment, know-how, algorithms, procedures,
techniques, solutions, and work-arounds, whether contained in a technology or
technique, owned by or exclusively licensed (other than by Ambient or an Ambient
Affiliate) to Duke Energy or to a Duke Energy Affiliate.

1.22

“Duties” has the meaning ascribed thereto in Section 4.9.1.

1.23

“Environmental Laws” means any Legal Requirement imposing liability or
establishing standards of conduct for: (a) emissions, discharges, releases or
handling of any Hazardous Materials, or (b) protection of human health or the
environment related to Hazardous Materials.

1.24

“Gerber Files” means the electronic files used by printed circuit board
manufacturing machines to layout electrical connections on the printed circuit
board and to otherwise manufacture a completed circuit board.  

1.25

“Hazardous Materials” means those hazardous substances, toxic pollutants,
hazardous materials, chemical substances or mixtures, imminently hazardous
chemical substances or mixtures, contaminants, pesticides, source materials,
special nuclear materials, by-product materials, residual radioactive materials,
toxic materials, harmful physical agents, air pollutants, regulated substances,
or extremely hazardous substances defined in any regulations promulgated
pursuant to any Environmental Laws, including, without limitation lead, asbestos
and polychlorinated biphenyls (commonly referred to as “PCBs”), and all other
contaminants, toxins, pollutants, hazardous substances, substances, materials
and contaminants, polluted, toxic and hazardous materials, the use, disposition,
possession or control of which is regulated by one or more Environmental Laws.
   

1.26

“Lead Time” means the length of time, as agreed to by the Parties from time to
time, but in any event not more than six (6) months, between the receipt by
Ambient of a completed, accepted Release for the purchase of Products and the
delivery of such Products, to account for such matters that include but are not
limited to the time needed to acquire, manufacture, assemble, test, and ship the
Products.

1.27

“Legal Requirement” means any federal, state, local,  municipal or foreign
constitution, treaty, statute, ordinance, code, rule or regulation, or any
governmental order, or any license, franchise, consent, approval, permit or
similar right granted by any governmental authority under any of the foregoing.
 

1.28

“Maintenance Services” has the meaning ascribed thereto in Appendix A-4.

1.29

“Month” means a calendar month.

1.30

“NMS Software” has the meaning ascribed thereto in Section 1.42.

1.31

“Node Software” has the meaning ascribed thereto in Section 1.42.

1.32

“Party” or “Parties” means Ambient and Duke Energy.

1.33

“Products” means Ambient's proprietary communication nodes as described in the
Specifications.  For the avoidance of doubt, Products includes those specific
products Duke Energy has purchased or is  purchasing from

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Ambient pursuant to PO # 00356930 (for 9,000 X-2000 units) and Letter Purchase
Order dated August 17, 2009 (for 2,500 X-3100 units).

1.34

“Rejected Products” has the meaning ascribed thereto in Section 4(a) of Appendix
A-1.

1.35

“Release” has the meaning ascribed thereto in Section 2(b)(i) of Appendix A-1.

1.36

“Release Event” has the meaning ascribed thereto in Section 8.3.

1.37

“Replacement Product” means a unit of Product delivered by Ambient to Duke
Energy in replacement of a Rejected Product or defective Product.

1.38

“Scheduled Delivery Date” means the date or dates agreed to by Ambient and Duke
Energy for the delivery of Products associated with a particular Release.

1.39

“Services” has the meaning ascribed thereto in Section 2.2.

1.40

“Shipping Point” means a shipping port near Ambient’s manufacturing facility, as
may be agreed upon by the Parties from time to time, to which Ambient shall
deliver the Products for further shipment to Duke Energy as described in this
Agreement.  

1.41

“Smart Grid Funding Laws” has the meaning ascribed thereto in Section 9.26.

1.42

“Software” means and includes the object code (only) version of the following
software at the Upgrade level being distributed by Ambient as of the Effective
Date, together with all Updates and Upgrades provided to Duke Energy by Ambient
pursuant to Maintenance Services provided under this Agreement: (i) Ambient's
network server-based Network Management System ("NMS Software"); (ii) Ambient's
proprietary communication node software ("Node Software"); and (iii) third party
software licensed by Ambient and incorporated into either the NMS Software or
Node Software.

1.43

“Software Warranty Period” has the meaning ascribed thereto in Section 4.1 of
Appendix A-3.

1.44

“Specifications” means the functional specifications for Ambient’s Smart Grid
Solution agreed to in writing and signed by both Parties at the time Duke Energy
has issued a Release, as such Specifications may be amended from time to time as
agreed in writing by the Parties.

1.45

“Supplemental Amounts” has the meaning ascribed thereto in Section 4.9.1.

1.46

“Systemic Error Condition” means and refers to (i) one or more errors in the NMS
Software which, individually or collectively, constitute a Severity 1 or
Severity 2 level as described in Appendix A-4 hereto, and/or (ii) one or more
errors in the Node Software which, individually or collectively, after the
installation of at least [**] units of node Products affect at least [**] of the
installed communication node Products installed on Duke Energy’s electric
distribution lines so as to constitute a Severity 1 or Severity 2 level with
respect to the operation of such Products.  

1.47

“Technology Deposit Materials” has the meaning ascribed thereto in Section 8.1.
 

1.48

“Technology Escrow Agent” has the meaning ascribed thereto in Section 8.1.

1.49

“Technology Escrow Agreement” has the meaning ascribed thereto in Section 8.1.

1.50

“Third Party Service Provider” has the meaning ascribed thereto in Section 9.25.

1.51

“Update” means bug fixes, patches, corrections in non-conformities with the
Documentation, and minor functional enhancements to the then-current version of
Software that Ambient makes generally available to its customers who are
then-current customers for Ambient’s Software maintenance services.  

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1.52

“Upgrade” means a new release of Software that contains substantial new features
and/or additional functionality that Ambient makes generally available to
customers of Ambient’s Software maintenance services.  

ARTICLE II
PRODUCTS, SERVICES, SOFTWARE

2.1

Sale of Products. Ambient shall supply Products to Duke Energy in accordance
with this Agreement, including the Conditions for Supply of Products attached
hereto as Appendix A-1.

2.2

Ambient Services.  As may be mutually agreed upon by the Parties as to scope and
fees, Ambient shall provide Duke Energy with engineering field support services
and other services, to assist Duke Energy with implementing, operating and
maintaining Ambient’s Smart Grid Solution, other than those services included as
Maintenance Services  (“Services”). The additional terms and conditions for
Services are set forth in Conditions for Supply of Services attached hereto as
Appendix A-2.  

2.3

Software License.  The additional terms and conditions set forth in Appendix A-3
shall govern Duke Energy’s right to use the Software and shall amend and
supersede the 2006 NMS License Agreement with regard to the Software.

2.4

Software Maintenance.  Ambient shall provide Duke Energy with Maintenance
Services in accordance with this Agreement, including the additional terms and
conditions set forth in Appendix A-4.

ARTICLE III
GENERAL COMMERCIAL TERMS AND CONDITIONS

3.1

Expenses. Unless otherwise specified herein, each Party agrees to fully fund and
pay for the costs and expenses of the performance of its responsibilities
specified herein, including without limitation: (i) any and all salaries,
employee benefits and other overhead costs for its own employees and facilities
involved in the performance of this Agreement; (ii) any and all lodging, meal or
travel expenses of its own employees; (iii) any and all costs and expenses for
consultants; and (iv) any and all taxes, charges or fees arising out of its sole
obligations or acts hereunder; provided, however, neither party will pay any
taxes, charges or fees arising out of the other’s income.  

3.2

Personnel. Each Party will dedicate sufficient personnel at all skill and
management levels, including without limitation, project managers, engineers,
research personnel and line personnel with appropriate technical skills, to
carry out its obligations under this Agreement. All engineers and other staff
which may be assigned by Ambient or Duke Energy shall at all times be employees,
consultants or contractors of Ambient or Duke Energy, respectively. Subject to
the last sentence of this Section 3.2, Ambient may use contract manufacturers
for manufacturing and final assembly of the Products for Duke Energy, including
integration of the Duke Energy-Supplied Components (“Contract Manufacturers”).
 Ambient may not otherwise subcontract, assign, or otherwise transfer this
Agreement or any obligation hereunder without the prior written consent of Duke
Energy in its reasonable discretion. Each Party will be held fully responsible
for the work and activities of each of its subcontractors, including but not
limited to each subcontractor’s compliance with this Agreement.  Ambient shall
provide Duke Energy with the name and address of all Contract Manufacturers
manufacturing and assembling Products for Duke Energy and may not change any
Contract Manufacturers manufacturing and assembling Products for Duke Energy
without Duke Energy’s prior written consent, which consent shall not be
unreasonably withheld or delayed.   

ARTICLE IV
PRICING, INVOICING, PAYMENTS, TAXES & AUDIT RIGHTS

4.1

Price.  Ambient shall charge, and Duke Energy shall pay, the prices set forth in
Appendix A-1 for Products, in Appendix A-2 for Services, and Appendix A-4 for
Maintenance Services.  The prices for Products include all Software license
fees.    

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4.2

[**]

4.3

[**]

4.3.1

[**]

4.3.2

[**]

4.3.3

[**]

4.3.4

[**]

4.3.5

[**]

4.3.6

[**]

4.4

Invoicing and Payment. Ambient shall issue invoices to Duke Energy for all
amounts owed to Ambient hereunder. Invoices for Products shall be issued upon
delivery of the Products, invoices for Services shall be issued upon performance
of the Services, and invoices for Maintenance Services shall be issued at the
beginning of each annual period for which Maintenance Services are charged in
accordance with Appendix A-4.  Ambient shall reference this Agreement and any
applicable purchase order number on each invoice.  All invoices shall be payable
within [**] Business Days after Duke Energy’s receipt of an accurate invoice
from Ambient, except as otherwise provided in the applicable statement of work
or purchase order.  All payments are to be made in U.S. dollars. If Duke Energy
disputes an invoice, Duke Energy shall pay the undisputed amount, and the
parties shall work in good faith to resolve the disputed amount.  

4.5

No Additional Charges.  Duke Energy shall not be invoiced or liable for any
charges, fees or expenses other than those charges, fees and expenses stated and
expressly authorized in this Agreement or in a subsequent writing signed by an
authorized purchasing agent of Duke Energy.

4.6

Set Off.  Duke Energy may set off against amounts owed to Ambient to the extent
of undisputed amounts owed to Duke Energy by Ambient.

4.7

Taxes.

(a)

Products & Software.  Notwithstanding other provisions herein, unless otherwise
agreed by the Parties, the price of Products purchased does not include monies
for the payment of any sales/use tax on Products being purchased. Duke Energy
shall provide Ambient with Duke Energy’s direct pay permit (depending on which
legal entity is purchasing the Product or Software) or exemption certificate
where applicable. Duke Energy will pay all applicable taxes on Products when due
to the proper taxing authorities.

(b)

Services. The price for the Services shall include all applicable foreign,
federal, state and local taxes payable with respect to the Services. However, if
Duke Energy specifies additional services or tangible personal property to be
furnished by Ambient which qualifies for exemption from sales or use taxes,
Ambient shall, at the direction of Duke Energy, not include sales or use taxes
in its price. Duke Energy shall provide Ambient with Duke Energy’s direct pay
permit or exemption certificate where applicable. Ambient agrees to cooperate in
obtaining exemption certificates necessary to claim such exemptions.

4.8

 Audit Rights.  Duke Energy may, at its own expense, cause an audit and/or
inspection to be made by an independent auditor of the applicable Ambient
records and facilities for the purpose required by any Legal Requirement and as
may be reasonably necessary to verify: (i) charges and expenses incurred by
Ambient and passed through to Duke Energy, such as travel expenses and shipping
charges; (ii) Services provided on a time and materials basis; (iii) inspection
and acceptance of Duke Energy-Supplied Components; (iv) Ambient’s cost of

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production if Ambient claims its production costs have increased as described in
Schedule A-1 to Appendix A-1; and (v) Cancellation Fees. Duke Energy shall
provide at least five (5) days’ written notice prior to any such audit and/or
inspection. Any audit and/or inspection shall be conducted during regular
business hours at Ambient's facilities. Ambient agrees to provide Duke Energy's
designated auditor access to the relevant Ambient records and facilities.  

4.9

Duties, Shipping and Insurance.  

4.9.1

The prices set forth in Schedule A-1 to Appendix A-1 do not include any (i)
import duties, (ii) shipping and delivery costs and expenses beyond shipping
Products to the Shipping Point, or (iii) insurance premiums and charges required
to fully effect the arrangements hereunder.  The amounts referred to in clause
(i) are “Duties”; and the amounts referred to in clauses (ii) and (iii) are
“Supplemental Amounts.”

4.9.2

Duke Energy may select, in its sole discretion, the delivery method for any
Release.

4.9.3

If Duke Energy elects delivery to any location beyond the Shipping Point:  (A)
Ambient shall pay and remit all Duties and shall include such Duties on the
relevant invoice(s) issued to Duke Energy (or, if necessary, invoiced
separately), and, Duke Energy shall pay the same; and (B) Ambient shall pay and
remit all Supplemental Amounts to the appropriate vendors and shall include such
Supplemental Amounts on the relevant invoice(s) issued to Duke Energy (or, if
necessary, invoiced separately), and, Duke Energy shall pay the same.

4.9.4

Ambient shall be solely responsible for any Duties or Supplemental Amounts
incurred in the delivery of any Replacement Products.

ARTICLE V
PROPRIETARY RIGHTS

5.1

Ambient Technology. Duke Energy acknowledges that the Ambient Technology and all
of Ambient’s Intellectual Property related thereto are the sole property of
Ambient, and Duke Energy shall not obtain any interest of any kind in the
Ambient Technology (or any related Ambient Intellectual Property) by or through
this Agreement except as otherwise provided herein. Any modifications,
enhancements or improvements to the Ambient Technology or patents or patents
pending (whether or not resulting from the implementation of this Agreement)
which are discovered, invented or first reduced to practice by Ambient shall be
the sole and exclusive property of Ambient. Duke Energy acknowledges that this
declaration is vital to Ambient and without it Ambient would not enter into this
Agreement.

5.2

Duke Energy Technology. Ambient acknowledges that the Duke Energy Technology and
all of Duke Energy’s Intellectual Property related thereto are the sole property
of Duke Energy, and Ambient shall not obtain any interest of any kind in the
Duke Energy Technology (or any related Duke Intellectual Property) by or through
this Agreement except as otherwise provided herein. Any modifications,
enhancements or improvements to the Duke Energy Technology or patents or patents
pending (whether or not resulting from the implementation of this Agreement),
which are discovered, invented or first reduced to practice by Duke Energy shall
be the sole and exclusive property of Duke Energy. Ambient acknowledges that
these declarations are vital to Duke Energy and without it Duke Energy would not
enter into this Agreement.

5.3

Trade Secrets. Each of Ambient and Duke Energy acknowledges that the Ambient
Technology and the Duke Energy Technology constitute Confidential Information
the unauthorized use or disclosure of which may cause irreparable harm to the
respective owner of the technology.

5.4

Confidentiality. Each of Ambient and Duke Energy acknowledges that the NDA shall
be in effect during the term of this Agreement and thereafter, and that all
Confidential Information disclosed by one Party hereto to the other Party hereto
during the course of this Agreement and thereafter shall be subject thereto for
the term of this Agreement and while Section 7.3 is in effect and for five (5)
years thereafter and that the definition of “PROJECT” therein shall include this
Agreement; provided, however, that a Party receiving Confidential Information
from the other Party may reveal such information solely to its employees,
contractors or consultants who require such disclosure in order for such
receiving Party to be able to perform its obligations or exercise its rights
under this

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Agreement; provided, however, that such contractors or consultants, as the case
may be, who received such confidential information: (i) agree in writing to
refrain from making any unauthorized use or disclosure thereof; or (2) are
subject to a separate agreement the terms of which restrict the disclosure of
such confidential information.   Notwithstanding anything to the contrary in the
NDA or herein, in the event that Duke Energy desires to disclose Ambient’s
Confidential Information to an administrative or regulatory body for purposes of
obtaining recovery of the costs hereunder, Duke Energy may make such disclosure
provided that it provides Ambient notice thereof, files such Confidential
Information under seal, and uses good faith efforts to obtain a protective order
reasonably limiting disclosure of such Confidential Information.  The NDA, as
modified by this Section 5.4, shall be referred to in this Agreement as the
“Amended NDA.”  The Parties agree to be bound by the terms of the Amended NDA,
with Duke Energy agreeing to be bound by the terms thereof applicable to Duke
Energy Corporation.  For avoidance of doubt, the Specifications and the
Documentation are the Confidential Information of Ambient and constitute
Ambient’s Intellectual Property and Ambient Technology.

5.5

Indemnities for Intellectual Property Rights.  

(a)

Ambient shall, subject to compliance by Duke Energy with Section 5.5(c),
indemnify, defend, and hold harmless Duke Energy, its Affiliates, and their
respective directors, officers, partners, members, employees and agents (with
counsel free of any conflict of interest between such counsel and Duke Energy or
any other indemnitee hereunder) from and against all claims, damages, losses,
liabilities and expenses (including reasonable attorneys’ fees), arising out of
a claim that Duke Energy’s use of the Products, Software, Services or
Maintenance Services infringes the Third Party Intellectual Property Rights (as
defined in Section 6.1(f)) of the third party claimant, which if true, would
constitute a breach by Ambient of the warranty given in Section 6.1(f).  In the
case of a claim that any Products, Software, Services or Maintenance Services
are infringing, Ambient shall have the right, at its sole expense and option, to
(i) promptly procure for Duke Energy the right to continue using the infringing
Products, Software, Services or Maintenance Services, (ii) promptly modify the
Products, Software, Services or Maintenance Services, as applicable, so that
they are non-infringing but have the same functionality, or (iii) promptly
procure replacement Products, Software, Services or Maintenance Services that
have substantially the same functionality, or if none of the above options is
reasonably available, refund to Duke Energy a portion of all amounts paid by
Duke Energy to Ambient for the infringing Products, Software, Services or
Maintenance Services calculated by amortizing each payment over a five (5) year
period commencing with the date each such payment was originally made so that
the unamortized balance of each such payment as of the date such refund is to be
made shall constitute the amount of the refund relating to that payment and the
unamortized portion of all other such payments similarly calculated shall added
together equal the amount of the total refund.  Notwithstanding the foregoing,
Ambient shall not be required to indemnify Duke Energy with respect to damages
resulting from infringing Software arising from the date Ambient has provided
Duke Energy with a non-infringing Upgrade that remedies such infringement,
whether or not such Upgrade is installed by Duke Energy.

(b)

Duke Energy shall, subject to compliance by Ambient with Section 5.5(c),
indemnify, defend, and hold harmless Ambient, its Affiliates, and their
respective directors, officers, partners, members, employees and agents (with
counsel free of any conflict of interest between such counsel and Ambient or any
other indemnitee hereunder) from and against all claims, damages, losses,
liabilities and expenses (including reasonable attorneys’ fees), arising out of
a claim that Duke Energy Technology or any modification, enhancement or
improvement to Ambient Technology which was discovered, invented or first
reduced to practice by Duke Energy or by Ambient solely at the request of and
solely for the benefit of Duke Energy infringes any Third Party Intellectual
Property Rights.  

(c)

In the event of any claim being made or action brought against a Party, or its
Affiliates, or their respective directors, officers, partners, members,
employees or agents, arising out of the matters referred to in Section 5.5(a)
(for Duke Energy) or 5.5(b) (for Ambient), the indemnified Party shall forthwith
notify the indemnifying Party thereof and shall authorize and allow the
indemnifying Party to conduct on behalf of the indemnified Party and the related
indemnitees all negotiations for the settlement of the same and any litigation
which may arise there from.  The indemnified Party and its related indemnitees
shall afford reasonable assistance to the indemnifying Party for the purpose of
conducting such negotiations or litigation and contesting such claim or action.

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(d)

The provisions of this Section 5.5 contain and shall constitute the exclusive
remedy of each Party and its Affiliates regarding any claim that the Products,
Software, Services, Maintenance Services, Ambient Technology or the use thereof,
or Duke Technology or the use thereof, infringes upon the intellectual property
rights of any third party.  The indemnity described in this Section 5.5 shall
not be subject to any limitations of liability set forth in this Agreement.  

ARTICLE VI
WARRANTIES & LIABILITY

6.1

Warranties.

(a)

Ambient Authority.  Ambient represents and warrants that as of the Effective
Date of this Agreement:  (i) it is duly organized, validly existing and in good
standing under the laws of the state of its incorporation or formation; (ii) it
has all requisite power and authority to enter into and perform its obligations
under this Agreement and execution of this Agreement is not in violation of any
other agreement to which Ambient has previously assented; and (iii) there are no
actions, suits or proceedings pending or (to the best of its knowledge)
threatened which could reasonably be expected to have a material adverse effect
on its ability to fulfill its obligations under this Agreement or on its
operations, business, properties, assets or condition.

(b)

Duke Energy Authority.  Duke Energy represents and warrants that as of the
Effective Date of this Agreement:  (i) it is duly organized, validly existing
and in good standing under the laws of the state of its incorporation or
formation; (ii) it has all requisite power and authority to enter into and
perform its obligations under this Agreement and execution of this Agreement is
not in violation of any other agreement to which Ambient has previously
assented; and (iii) there are no actions, suits or proceedings pending or (to
the best of its knowledge) threatened which could reasonably be expected to have
a material adverse effect on its ability to fulfill its obligations under this
Agreement or on its operations, business, properties, assets or condition.

(c)

Third Party Products.  Ambient represents and warrants that it has sufficient
rights: (i) in the third-party software that is included in the Software to
grant the license rights to the Software pursuant to the Software license
agreement attached as Appendix A-3 hereto; (ii) in any third party software or
 products included or incorporated into the Products to sell the Products to
Duke Energy; (iii) in any third-party products or software necessary for, or
used by Ambient in, providing Services or Maintenance Services..  To the extent
possible, and in addition to the warranties expressly set forth herein, Ambient
will pass through to Duke Energy any warranties on any other products or
software of third parties that are incorporated into the Products or Software,
including any firmware that may be included in such third-party products.  

(d)

Product, Software and Services.  With respect to the Products, Software, and
Services, Ambient provides the following warranties:

i.

Ambient provides the warranties described in Appendix A-1 (Products), Appendix
A-2 (Services) and Appendix A-3 (Software).

ii.

Ambient warrants that all Products and Software that are intended or required to
interact with or otherwise work together as part of a functioning system will,
as delivered and maintained by Ambient, and if properly installed and used
consistent with the Documentation: (A) be compatible with each other, and remain
so compatible through each of their respective version Upgrades; (B) work
together as components of an integrated system, and (C) be compatible with, and
inter-operate and work together with the Duke Energy-Supplied Components which
meet the Specifications as of the Effective Date, all in accordance with the
Documentation; provided, Ambient does not warrant compatibility with all Duke
Energy-Supplied Components which Duke might select in the future or with
presently compatible Duke Energy-Supplied Components which may be modified in
the future so as to render them incompatible with Ambient’s Products or
Software.

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iii.

Ambient warrants that the Products and Software will comply with the
Specifications.  

(e)

Duke Energy Supplied Components.  Ambient warrants that it will accept delivery
of the Duke Energy-Supplied Components, safeguard such Duke Energy-Supplied
Components, and that it will incorporate the Duke Energy-Supplied Components
into the integrated system consisting of the Products and Software, such
integration to be consistent with the Specifications and in a manner that does
not void any Duke Energy-Supplied Component warranty.  Ambient shall not be
responsible for correcting problems caused by the failure of Duke Energy
Supplied Components to comply with the Documentation or Specifications after
Ambient demonstrates to Duke Energy with reasonable certainty that such
non-compliance is causing the problems after performing a reasonably appropriate
investigation.  

(f)

Infringement.  Ambient warrants that Duke Energy’s use of any Products,
Services, Maintenance Services and Software as delivered by Ambient and used by
Duke Energy in accordance with the Documentation and the terms, conditions and
limitations of this Agreement will not infringe the United States patents, trade
secrets, or United States registered copyrights of any third party (“Third Party
Intellectual Property Rights”).  Such warranty does not extend to any Duke
Energy Technology or the use of any Ambient Products or Software in conjunction
with the Duke Energy Technology where the use of the Ambient Products or
Software alone would not be infringing, unless such use in conjunction with the
Duke Energy Technology was recommended or approved by Ambient.  Such warranty
also does not extend to the use of Ambient Products or Software containing any
modification, enhancement or improvement which was discovered, invented or first
reduced to practice by Duke Energy, where the use of the Ambient Product or
Software without such modification, enhancement or improvement would not be
infringing.

(g)

Environmental.  Ambient warrants that: (i) when delivered, the Products will not
include any Hazardous Materials, except those Hazardous Materials expressly
identified in the Specifications applicable to a Release; (ii) the Products are
suitable and safe for outdoor residential applications; and (iii) Ambient has
and will continue to comply in all material respects with any Environmental Laws
applicable to the Products.  

(h)

EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, INCLUDING WITHOUT LIMITATION THE
APPENDICES HERETO, AMBIENT EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.

6.2

Indemnification.

(a)

Indemnification by Ambient.  Ambient shall indemnify, defend, and hold harmless
Duke Energy, its Affiliates, and their respective directors, officers, partners,
members, employees and agents (with counsel free of any conflict of interest
between such counsel and Duke Energy or any other indemnitee hereunder) from and
against all claims, damages, losses, liabilities and expenses (including
reasonable attorneys’ fees), whether arising out of contract, tort (including
negligence and strict liability) or otherwise, including but not limited to
injuries to persons (including death) and loss, theft or damage to property and
all third party claims against Duke Energy or another indemnified person,
arising from: (i) the negligent, dishonest or willful misconduct of Ambient, its
employees, agents or independent contractors related to or arising out of the
Products, Services, Maintenance Services or Software or Ambient’s performance of
its obligations pursuant to this Agreement; (ii) Ambient’s breach of any
warranty under this Agreement, including without limitation the environmental
warranties set forth in Section 6.1(g).   The forgoing shall not apply to a
breach by Ambient of the warranty contained in Section 6.1(f), as to which the
indemnity provisions of Section 5.5(a) exclusively apply.

(b)

Indemnification By Duke Energy.  Except to the extent that Ambient is obligated
to indemnify Duke Energy under this Section 6.2(a) or Section 5.5, Duke Energy
agrees to indemnify, hold harmless and defend (with counsel free of any conflict
of interest between such counsel and Ambient or any other indemnitee hereunder)
Ambient, its Affiliates, and their respective directors, officers, partners,
employees and agents from and against any and all claims, damages, losses,
liabilities and expenses (including reasonable attorneys’ fees), whether arising
out of contract, tort (including negligence and strict liability) or

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otherwise, including but not limited to injuries to persons (including death)
and loss, theft or damage to property and all third party claims against Ambient
or another indemnified person, arising from the negligent, dishonest or willful
misconduct of Duke Energy, its employees, agents or independent contractors
related to or arising out of their activities relating to deployment of Products
and the Software or the performance of Duke Energy’s obligations pursuant to
this Agreement.  The foregoing shall not apply to a claim that Duke Energy
Technology or any new applications of Duke Energy’s under Section 9.25 or any
modification, enhancement or improvement to Ambient Technology which was
discovered, invented or first reduced to practice by Duke Energy or by Ambient
solely at the request of and solely for the benefit of Duke Energy infringes any
Third Party Intellectual Property Rights, as to which the indemnity provisions
of Section 5.5(b) exclusively apply.

6.3

Limitation on Liability. EXCEPT WITH RESPECT TO A PARTY’S INDEMNIFICATION
OBLIGATIONS RELATING TO THIRD PARTY CLAIMS, INCLUDING WITHOUT LIMITATION
INFRINGEMENT, IN NO EVENT SHALL ANY PARTY BE LIABLE TO THE OTHER PARTY IN
,RESPECT OF OR ARISING OUT OF THE PERFORMANCE AND/OR BREACH OF ITS OBLIGATIONS
HEREUNDER FOR ANY INDIRECT, INCIDENTAL OR SPECIAL OR CONSEQUENTIAL DAMAGES,
INCLUDING LOSS OF PROFITS, REVENUE, DATA OR USE, INCURRED BY THE OTHER PARTY
WHETHER IN AN ACTION IN CONTRACT OR TORT, EVEN IF THAT PARTY OR ANY OTHER PERSON
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING ANYTHING TO
THE CONTRARY SET FORTH HEREIN, OTHER THAN WITH RESPECT TO A PARTY’S
INDEMNIFICATION OBLIGATIONS RELATING TO THIRD PARTY CLAIMS, OR CLAIMS INVOLVING
INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS, IN NO EVENT SHALL EITHER PARTY’S
LIABILITY TO THE OTHER PARTY HEREUNDER FOR ANY REASON EXCEED [**].

6.4

Solicitation of Other Party’s Employees. Each Party agrees that during this
Agreement and for a period of twelve (12) months after its termination, in whole
or in part, it will not directly solicit the services of (i) an employee of the
other Party or (ii) a former employee of the other Party whose employment with
the other Party ended less than twelve (12) months prior to the date of such
hiring (unless such employment ending was at the discretion of such employee’s
employer or such employee accepted a company severance or benefit package
offered by the employee’s employer), provided, however, that this provision
shall not apply if the employer or former employer of such individual consents
in writing to such solicitation. The term “directly solicit” shall not include
any employment of personnel through the means of advertisements, job postings,
job fairs and the like, and any employment where the individual has made the
initial approach for employment.  This provision shall not apply to Duke
Energy’s solicitation of Ambient’s employees if the Technology Deposit Materials
are released to Duke Energy under the terms of the Technology Escrow Agreement.
 

6.5

Duke Energy-Supplied Components.  

6.5.1

Risk of Loss. Ambient shall assume all risk of loss for Duke Energy-Supplied
Components from the time of delivery of the Duke Energy-Supplied Components to
Ambient or the Contract Manufacturers until such time as Duke Energy assumes the
risk of loss hereunder for any Product incorporating such Duke Energy-Supplied
Components, or the Duke Energy-Supplied Components are otherwise delivered to
Duke Energy in accordance with Duke Energy’s written instructions.
 Notwithstanding the foregoing, Duke Energy shall retain title to all Duke
Energy-Supplied Components until such time as the Duke Energy-Supplied
Components are incorporated into the Products.  Ambient shall segregate and
properly identify, and cause its Contract Manufacturers to segregate and
properly identify, all Duke Energy-Supplied Components from property of others,
including Ambient and the Contract Manufacturers, until such time as the Duke
Energy-Supplied Components are incorporated into the Products.  Ambient and its
Contract Manufacturers shall not include in their inventory or assets any Duke
Energy-Supplied Components until such time as the Duke Energy-Supplied
Components are incorporated into the Products.  Ambient shall use commercially
reasonable efforts to ensure that its Contract Manufacturers comply with the
obligations in this Section 6.5 and shall be responsible for any losses suffered
by Duke Energy as a result of any Contract Manufacturers’ failure to so comply.
 Ambient shall require the Contract Manufacturer to provide written
acknowledgment of Duke Energy’s title to the Duke Energy-Supplied Components and
to agree to return the Duke Energy Supplied-Components that have not been
incorporated into the Products to Duke Energy upon request by Duke Energy and at
Duke Energy’s expense.  

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Ambient agrees not to sell to third parties Products incorporating the Duke
Energy-Supplied Components unless Ambient first pays to Duke Energy Duke
Energy’s cost of such Duke Energy-Supplied Components.

6.5.2

Lead Times and Inventory.  Ambient shall cooperate in good faith with Duke
Energy regarding the acceptance of Duke Energy-Supplied Components to minimize
costs related to the inventory of Duke Energy-Supplied Components held by
Ambient.  

6.5.3

Precautionary Filing.  Ambient consents and agrees to cooperate, and to cause
the Contract Manufacturers to cooperate, with Duke Energy in the filing of any
UCC statements or other documents deemed advisable by Duke Energy to provide
notice of title to the Duke Energy-Supplied Components, whether inside the
United States or in any foreign jurisdiction where such statements, filings or
other documentation may be required or available to protect Duke Energy’s
interests as described in this Section 6.5.

ARTICLE VII
DEFAULT & TERMINATION

7.1

Effectiveness - Term of Agreement.  This Agreement shall become effective upon
the Effective Date and shall continue in full force and effect until December
31, 2015 (unless extended by mutual agreement of the Parties) unless sooner
terminated in accordance with the provisions hereof.

7.2

Right to Terminate.

(a)

Either Party may terminate this Agreement upon the other Party’s substantial and
material breach of a representation, warranty, term, covenant or undertaking in
this Agreement if, within thirty (30) days following the delivery of a written
notice to the defaulting Party setting forth in reasonable detail the basis of
such default and the remedial action required to be taken to rectify such
default, the defaulting Party has not rectified such default to the reasonable
satisfaction of the non-defaulting Party.  Failure to perform due to a force
majeure shall not be considered a substantial or material default under this
Agreement.

(b)

A Party hereto may, at its option, terminate this Agreement upon a Bankruptcy
Event of the other Party.

(c)

Duke Energy may terminate this Agreement for its convenience, upon ninety (90)
days’ prior written notice to Ambient, provided, however, that in the event of
such a termination, Duke Energy shall be required to immediately remit to
Ambient all amounts owing to Ambient under this Agreement to the date of
termination, and Duke shall be required to remit to Ambient within forty-five
(45) days of receipt of a detailed accounting from Ambient of all amounts
expended by Ambient on account of equipment, supplies and components purchased
by, and the charges of Contract Manufacturers used by, and any additional labor
costs incurred by Ambient for Duke Energy to meet Releases issued prior to such
termination date.  Duke Energy shall be entitled to a refund for the net amount
realized by Ambient from the resale or other disposition of such equipment,
supplies and components within one hundred eighty (180) days from notice of
termination. Ambient shall use commercially reasonable efforts to minimize any
costs relating to Duke Energy’s termination of this Agreement.

(d)

Beginning two years after the Effective Date, Ambient may terminate this
Agreement upon sixty (60) days’ prior written notice to Duke Energy if Duke
Energy fails to issue Releases for at least 15,000 units of Products in the
aggregate over the period of three consecutive quarters.  

7.3

Maintenance Services.  Notwithstanding the expiration or termination of this
Agreement, so long as Duke Energy continues to pay the fees for Maintenance
Services provided in Appendix A-4, Ambient shall provide such services for ten
(10) years after termination of this Agreement; provided that if Ambient has
terminated this Agreement pursuant to Section 7.2(a), Duke Energy must, within
thirty (30) days of such termination, notify Ambient in writing whether Duke
Energy wishes to continue receiving Maintenance Services and a good faith
estimate for how long (not to exceed ten (10) years), and if Duke Energy wishes
to receive Maintenance Services for more than one (1) year after termination,
Duke Energy shall pay Ambient for the first year of Maintenances Services and
prepay Ambient for the second year of Maintenance Services within thirty (30)
days of such notice from Duke

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Energy, and thereafter Duke Energy shall annually prepay for the next subsequent
year of Maintenance Services requested.  If Duke Energy fails to make a payment
required under Appendix A-4 or this Section 7.3, Ambient may terminate its
obligations under this Section 7.3 if, within twenty (20) days following the
delivery of a written notice to Duke Energy specifying the failure, Duke Energy
has not paid all amounts due in full for Maintenance Services as described in
this Section 7.3.

7.4

Survival.

(a)

The following provisions shall survive termination of this Agreement for so long
as Section 7.3 applies: Article I, Article II (except those provisions
pertaining to the purchase of Products), Article III (except those provisions
pertaining to the purchase of Products), Article IV (except those provisions
pertaining to the purchase of Products), Section 7.3, those provisions of
Article VIII relevant to the Technology Deposit Materials specified in Section
8.1(a), Section 9.10, Section 9.11, Section 9.25, Appendix A-3 and Appendix A-4.

(b)

The following provisions shall survive the termination and/or expiration of this
Agreement: Articles V, VI, and IX (other than Sections 9.10, 9.11, 9.21, 9.22,
9.23, 9.24 and 9.25 (except as specified in Section 7.4(a)).

ARTICLE VIII
TECHNOLOGY ESCROW AGREEMENT

8.1

Technology Escrow.  Within forty-five (45) days of the Effective Date (but not
later than the date on which the first Products are delivered by Ambient to Duke
Energy under this Agreement pursuant to a Release), Ambient and Duke Energy will
enroll as a “Depositor” under the technology escrow agreement (the “Technology
Escrow Agreement”) between Duke Energy and an independent third party selected
by Duke Energy and reasonably acceptable to Ambient, acting as an escrow agent
(the “Technology Escrow Agent”), which Technology Escrow Agreement shall provide
that Ambient has delivered and will keep updated at all times: (a) a complete
copy of the versions of the Software then used by Duke Energy (including any
Updates), and associated source code, and programming documentation in both
human and machine readable forms and on durable electronic media; (b) the Gerber
Files and identification of the then current suppliers and Contract
Manufacturers Ambient uses to manufacture the Products (the “Technology Deposit
Materials”). Ambient acknowledges that Duke Energy’s selection of Iron Mountain
Intellectual Property Management, Inc., or an Affiliate or successor thereto, as
the Technology Escrow Agent shall be deemed to be acceptable to Ambient.
 Ambient acknowledges the use of Iron Mountain’s Three-Party Master Beneficiary
Escrow Service Agreement (July 1, 2009 edition), subject to those modifications
necessary to conform to the terms and conditions set forth in this Agreement, as
the basis for the escrow arrangement.  

8.2

Costs of Escrow.  Duke Energy shall bear all costs relating to the Technology
Escrow Agreement.  If Duke Energy fails to pay all charges of the Technology
Escrow Agent, the Technology Escrow Agreement shall terminate, and the
Technology Escrow Agent shall return to Ambient all of the Technology Deposit
Materials.

8.3

Release Events.  The Technology Escrow Agreement shall contain the following
release events (the “Release Events”):

(a)

Ambient permanently ceases doing business (other than as a result of a merger or
consolidation in which the successor continues the business);

(b)

Ambient becomes subject to a Bankruptcy Event which prevents it from complying
with the terms of this Agreement; or

(c)

Duke Energy terminates the Agreement pursuant to Section 7.2(a) of the
Agreement.

8.4

Release from Escrow.  

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(a)

If Duke Energy believes a Release Event has occurred, it will provide written
notice of the same simultaneously to the Technology Escrow Agent and Ambient.
 Ambient will have fifteen (15) Business Days from the date of the notice to
object to a release of the Technology Deposit Materials.  If Ambient objects,
the dispute will be resolved in accordance with Section 9.8, and the Technology
Escrow Agent shall only release the Technology Deposit Materials to Duke Energy
if there is a final non-appealable determination that a Release Event has
occurred.  If Ambient does not object in such fifteen (15) Business Day period,
the Technology Escrow Agent shall release to Duke Energy the Technology Deposit
Materials.  Notwithstanding the foregoing, if Ambient objects under this Section
8.4(a), and if the dispute cannot be resolved within sixty (60) days as set
forth in Section 9.8, then Duke Energy may, in its sole discretion, obtain the
immediate release of the Technology Deposit Materials specified in Section
8.1(a) by providing written notice of the same simultaneously to the Technology
Escrow Agency and Ambient, and the Technology Escrow Agent may release the
Technology Deposit Materials specified in Section 8.1(a) immediately to Duke
Energy.  If subsequent to the release to Duke Energy of the Technology Deposit
Materials there is a final non-appealable determination that a Release Event did
not occur, Duke Energy shall return the Technology Deposit Materials to the
Technology Escrow Agent.  

(b)

Notwithstanding the foregoing, if a Systemic Error Condition occurs and Ambient
has not responded to that condition as required by Appendix A-4 and Duke wishes
to cause an escrow release, Duke Energy shall provide written notice of the same
simultaneously to the Technology Escrow Agent and Ambient, and the Technology
Escrow Agent may release the Technology Deposit Materials specified in Section
8.1(a) only immediately to Duke Energy to address the Systemic Error Condition.
 If Ambient objects to such immediate release within ten (10) Business Days
after receipt of the notice from Duke Energy, the dispute will be resolved in
accordance with Section 9.8, and Duke Energy shall return the Technology Deposit
Materials to the Technology Escrow Agent if there is a final non-appealable
determination that either a Systemic Error Condition did not exist or that, if
one existed, that Ambient did respond as required by Appendix A-4.  In addition,
Duke Energy shall return the Technology Deposit Materials to the Technology
Escrow Agent upon resolution of the Systemic Error Condition.

8.5

License.  Subject to the terms of this Agreement and the Technology Escrow
Agreement, Ambient hereby grants Duke Energy a non-exclusive, royalty-free,
non-assignable, non-transferable license to all Technology Deposit Materials
released to Duke Energy and Duke Energy shall have the right to fully exploit
all Technology Deposit Materials solely to perform Ambient's obligations
hereunder and for no other commercial purpose. Duke Energy acknowledges that the
Technology Deposit Materials are covered by the Amended NDA, including if and
when they are released to Duke Energy in accordance with the terms of this
Agreement and the Technology Escrow Agreement.  To the extent necessary to have
third parties perform Ambient's obligations under this Agreement after the
release of the Technology Deposit Materials, Duke Energy shall have the right to
provide Technology Deposit Materials to third parties engaged by Duke Energy to
perform such obligations (including manufacturing the Products), subject to such
third parties entering into appropriate confidentiality agreements with Duke
Energy, and Ambient hereby grants Duke Energy the right to sublicense Duke
Energy’s rights set forth in the first sentence of this Section 8.5 to such
third parties.  Ambient will cooperate with Duke Energy and provide any
additional documentation reasonably necessary to effectuate intent of this
Section 8.5 and to evidence Duke Energy’s right to use and sublicense Ambient’s
Intellectual Property as reasonably necessary for Duke Energy to have the
Products manufactured as contemplated herein.  Notwithstanding anything to the
contrary contained in this Agreement, Duke Energy may use any Technology Deposit
Materials specified in Section 8.1(b) that have been released to it until [**],
and Duke Energy may use any Technology Deposit Materials specified in Section
8.1(a) that have been released to it for [**] after termination of this
Agreement.

8.6

Successor Technology Escrow Agent.  If (i) the Technology Escrow Agent ceases
doing business in the ordinary course for any reason; or (ii) the Technology
Escrow Agent seeks protection under the United States Bankruptcy Code by filing
a voluntary petition for bankruptcy, or makes a general assignment of all or
substantially all of its assets for the benefit of creditors, or an involuntary
bankruptcy proceeding, or receivership is instituted by or against the
Technology Escrow Agent, and any such action is not dismissed or withdrawn
within thirty (30) days of filing, or (iii) Duke Energy and/or Ambient
terminates the Technology Escrow Agreement after the breach thereof by the
Technology Escrow Agent, then the Parties shall promptly and in any event within
sixty (60) days enter into a new Technology Escrow Agreement with a new
Technology Escrow Agent reasonably satisfactory to the Parties, and the Parties
shall cooperate to establish such new escrow arrangement.  

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8.7

Verification.  The Technology Escrow Agent shall provide Duke Energy with
verification that the items deposited by Ambient comply with the requirements of
Section 8.1.  Duke Energy shall have the right at any time to contact the
Technology Escrow Agent for the purpose of confirming that the Technology
Deposit Materials in the escrow account have been updated if and as required by
Section 8.1. The Technology Escrow Agreement shall provide Duke Energy the
right, at its expense, to audit or verify the Technology Deposit Materials in
the escrow account up to twice each calendar year, or more frequently if
necessary to verify additional deposits, updates or supplements to the
Technology Deposit Materials by Ambient upon providing the Technology Escrow
Agent and Ambient with reasonable advanced notice.  The audit or verification
will occur at the Technology Escrow Agent’s facility and may be conducted by
Duke Energy or the Technology Escrow Agent.  The audit and verification shall
only be conducted for the purpose of verifying that the items deposited by
Ambient comply with the requirements of Section 8.1, and Duke Energy may not
copy or remove any of the Technology Deposit Materials.   Ambient acknowledges
that such audit and verification may include the following: File List Test,
Inventory and Analysis Test, Deposit Compile Test, Binary Comparison, and Full
Usability Test, all as described in Exhibit A (Escrow Service Work Request) to
Iron Mountain’s Three-Party Master Beneficiary Escrow Service Agreement (July 1,
2009 edition).  Ambient shall have the right to have a representative at its
cost participate in all such audits or verifications.  Should such audit find
materially adverse defects in the Technology Deposit Materials (where Duke
Energy would be unable to use such Technology Deposit Materials for their
intended purpose), then Ambient shall supply such missing , or replace such
defective , Technology Deposit Materials within ten (10) Business Days.   

8.8

Updating.  Promptly upon execution of the Technology Escrow Agreement, Ambient
shall deliver to and keep the Technology Escrow Agent updated from time to time
with a complete set of the Technology Deposit Materials.  

8.9

Termination.  The Technology Escrow Agent shall return to Ambient the Technology
Deposit Materials specified in Section 8.1(b) (i) upon expiration of this
Agreement, (ii) upon termination of this Agreement by Ambient pursuant to
Sections 7.2(a), (b) or (d), and (iii) upon termination of this Agreement by
Duke under Section 7.2(c), and when Section 7.3 ceases to be effective, the
Technology Escrow Agent shall return to Ambient all remaining Technology Deposit
Materials, and the Technology Escrow Agreement shall terminate as to Ambient and
Ambient shall be released from its obligations thereunder.  

ARTICLE IX
MISCELLANEOUS

9.1

Relationship. The relationship between Duke Energy and Ambient is that of
independent contractors and parties to certain licenses in accordance with this
Agreement. Neither Party is in any way the agent or attorney in fact of the
other, nor shall any Party or any of its respective agents or employees have any
power or authority to assume any obligation of any kind, implied or expressed,
on behalf of any other or to bind others to any contract, commitment or
agreement whatsoever, or to make any representation on the others’ behalf. This
Agreement shall not be construed as constituting either Party as the partner or
joint venture partner of the others, nor to create any form of legal association
which would impose liability upon one Party for the acts or failures to act of
the others.

9.2

Force Majeure. No Party shall be liable for reasonable delays in the performance
of its obligations under this Agreement which result from causes beyond its
reasonable control, including without limitation acts of God, terrorism,
strikes, war, riot, civil disorder, embargo, acts of civil and military
authorities, fire, earthquake, flood or inability to obtain labor or materials.
If any condition of force majeure delays Ambient’s performance for a time period
greater than 180 days in the aggregate under this Agreement, any Release or any
purchase order, then Duke Energy in its discretion may terminate this Agreement
or the applicable Release or purchase order, subject to any applicable terms of
this Agreement.

9.3

Notices.  All notices permitted or required to be given under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
in person, or upon receipt, if deposited in the United States mail, postage
prepaid, certified mail, return receipt requested or delivered by an overnight
courier, to the following addresses, or to such address as the Parties may
provide to each other in writing from time to time:

Notices to Ambient:

Notices to Duke Energy:

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Ambient Corporation

79 Chapel Street

Newton, MA 02458

Attn:  John J. Joyce, Chief Executive Officer

Duke Energy Corporation

526 South Church Street

Charlotte, NC 28202

Attn: Don Denton

Attn:

With a copy to:

Duke Energy Corporation

526 South Church Street

Charlotte, NC 28202

Attn:  General Counsel

9.4

Severability Each provision of this Agreement or part thereof shall be
severable. If, for any reason, any such provision or part thereof is finally
determined, by a court or agency having valid jurisdiction, to be invalid and
contrary to, or in conflict with, any existing or future law or regulation, such
determination shall not impair the operation of or affect the remaining
provisions of this Agreement, and such remaining provisions will continue to be
given full force and effect and shall continue to bind the Parties.

9.5

Enforcement. The respective rights and remedies of each Party are cumulative,
and no exercise or enforcement by either Party of any right or remedy hereunder
shall preclude the exercise or enforcement by such Party of any other right or
remedy hereunder, or which such Party is entitled by law to enforce. Each Party
may waive any obligation of or restriction upon the other Party under this
Agreement only in writing. No failure, refusal, neglect, delay, waiver,
forbearance or omission of either Party to exercise any right under this
Agreement or to insist upon full compliance by the other with its obligations
hereunder shall constitute a waiver of any provision of this Agreement.

9.6

Entire Agreement. This Agreement and all recitals in the preamble hereto,
Schedules, Exhibits and Appendices attached hereto and all agreements referred
to herein, including the Amended NDA, set forth the entire agreement and
understanding between the Parties, contain all the understandings, inducements,
promises and representations between the Parties relating to the matters
referred to herein, and merge and supersede all prior agreements, commitments,
arrangements, representations, writings and discussions between them related to
the subject matter hereof, whether written or oral. Neither this Agreement nor
any Schedules, Exhibits or Appendix hereto or other agreement referred to herein
may be modified or amended except by a written supplement, duly executed by each
of the Parties. The Appendices attached hereto are incorporated by reference
herein in their entirety. In the event of any inconsistency between the terms of
this Agreement and the terms and provisions of any Appendix, this Agreement
shall control.

9.7

Third Party Rights. Nothing expressed or implied in this Agreement is intended
to confer upon any person other than Ambient and Duke Energy and their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.

9.8

Dispute Resolution.

(a)

Dispute Resolution by the Parties.  The Parties shall attempt to resolve any
claims, disputes and other controversies arising out of or relating to this
Agreement (collectively, “Disputes”) promptly by negotiation between executives
who have authority to settle the Dispute.  A Party may give the other Party
written notice of a Dispute which has not been resolved in the normal course of
business.  Such notice shall include: (a) a statement of that Party’s position
and a summary of arguments supporting such position, and (b) the name and title
of the executive who will be representing that Party and of any other person who
will accompany the executive.  Within five (5) Business Days after delivery of
the notice, the receiving Party shall respond with (a) a statement of that
Party’s position and a summary of arguments supporting such position, and (b)
the name and title of the executive who will represent that Party and of any
other person who will accompany the executive.  Within ten (10) Business Days
after delivery of the initial notice, the executives of both Parties shall meet
at a mutually acceptable time and place, and thereafter as often as they
reasonably deem necessary, to attempt to resolve the Dispute.  All negotiations
pursuant to this clause are to be deemed confidential and shall be treated as
compromise and settlement negotiations for purposes of applicable rules of
evidence.

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(b)

Arbitration.  If the Dispute has not been resolved by negotiation within twenty
(20) Business Days of the disputing Party’s initial notice, or if the Parties
failed to meet for the first time within ten (10) Business Days of the initial
notice, the Parties shall fully and finally settle all Disputes, including the
arbitrability of the Agreement, by binding arbitration under the Commercial
Rules of the American Arbitration Association, except to the extent that the
Commercial Rules conflict with this provision, in which event, this Agreement
shall control.  This arbitration provision shall not limit the right of either
Party prior to or during any such Dispute to seek, use, and employ ancillary, or
preliminary rights and/or remedies, judicial or otherwise, for the purpose of
maintaining the status quo until such time as the arbitration award is rendered
or the Dispute is otherwise resolved.  Within ten (10) calendar days of service
of a Demand for Arbitration, the Parties may agree upon a sole arbitrator, or if
a sole arbitrator cannot be agreed upon, a panel of three arbitrators shall be
named.  One arbitrator shall be selected by each Party.  A knowledgeable,
disinterested and impartial arbitrator shall be selected by the two arbitrators
so appointed by the Parties.  If the arbitrators appointed by the Parties cannot
agree upon the third arbitrator within ten (10) calendar days, then either Party
may apply to any judge in any court of competent jurisdiction in North Carolina
for appointment of the third arbitrator.  The arbitrator(s) shall have the
authority only to award equitable relief and compensatory damages, and shall not
have the authority to award punitive damages or other non-compensatory damages.
 Each Party shall be responsible for the fees, expenses and costs incurred by
the arbitrator appointed by each Party, and the fees, expenses and costs of the
third arbitrator (or single arbitrator) shall be borne equally by the parties.
 The decision of the arbitrator(s) shall be final and binding and may not be
appealed.  Any party may apply to any court having jurisdiction to enforce the
decision of the arbitrator(s) and to obtain a judgment thereon.   All
arbitration proceedings held pursuant to this Agreement shall be held in
Charlotte, North Carolina.  The discovery provision of the New York State Rules
of Civil Procedure in effect at the time of arbitration shall be deemed
incorporated herein for the purpose of such arbitration proceedings.  Either
Party, at its sole discretion, may consolidate an arbitration conducted under
this Agreement with any other arbitration to which it is a party provided that
(i) the arbitration agreement governing the other arbitration permits
consolidation, (ii) the arbitrations to be consolidated substantially involve
common questions of law or fact, and (iii) the arbitrations employ materially
similar procedural rules and methods for selecting arbitrator(s).  

(c)

Restraining Order and Injunction.  Notwithstanding anything to the contrary in
this Section 9.8, either Party may (i) seek a restraining order or preliminary
and final injunctive relief in a court of competent jurisdiction in North
Carolina, the exclusive jurisdiction of such courts with respect to such
purposes each Party hereby consents, regarding the unauthorized disclosure of
such Party’s Confidential Information or intellectual property infringement or
to enforce the other Party’s indemnity obligations, without first using the
procedures in this Section 9.8 without the necessity of proof of damages or the
posting of a bond or other security.  

(d)

Release Events .   Notwithstanding anything to the contrary in this Section 9.8,
the Parties agree that any dispute resolution, including arbitration, regarding
whether a Release Event has occurred as described in Section 8.4(a) shall be
completed, to the extent reasonably possible, within sixty (60) days after
Ambient provides notice of its objection to the release of the Technology
Deposit Materials, and that the Parties shall cooperate in good faith in
conducting any arbitration to allow the arbitrators to render a decision within
such time.  In the event a decision is not reached within such period of time,
Duke Energy shall be entitled to the release of the Technology Deposit Materials
as set forth in Section 8.4(a).  

9.9

Governing Law.  This Agreement is governed by the laws of the State of New York,
without regard to its conflicts of laws rules.  The parties agree that the
United Nations Convention on Contracts for the International Sale of Goods will
not apply to this Agreement.

9.10

Insurance. Throughout the performance of its obligations under this Agreement,
Ambient shall maintain at its expense, and shall require any Contract
Manufacturer to maintain, a policy or policies of insurance for each type of
coverage and with the minimum limits stated below.

(a)

Worker’s compensation insurance with statutory limits, and employer’s liability
insurance with limits not less than $1,000,000 each accident for bodily injury
by accident and $1,000,000 each employee and policy limit for bodily injury by
disease.

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(b)

Commercial general liability insurance with a combined single limit of not less
than $2,000,000 per occurrence for bodily injury and property damage, such
insurance shall include but not be limited to products/completed operations
liability, owners and contractors protective blanket contractual liability,
personal injury liability and broad form property damage to include coverage for
damage to property of others in their care, custody and control.  Such insurance
shall (i) be primary for all purposes; and (ii) contain no insurer versus
insured exclusion.

(c)

Comprehensive automobile liability or equivalent insurance with a combined
single limit of not less than $1,000,000 per occurrence.  Such insurance shall
include coverage for owned, hired and non-owned automobiles, and contractual
liability.

(d)

Errors and Omissions insurance with a limit of not less than $2,000,000 per
occurrence.

(e)

Property Insurance.  Ambient and its subcontractors shall be responsible for
providing all-risk property insurance for any location that has Duke
Energy-Supplied Components and/or Duke Energy owned components.  Coverage shall
be written on an all risk form at replacement cost valuation.  The insurance
shall include coverage for damage to property of others in their care custody
and control.  

(f)

Transit Insurance.  In connection with handling and delivery of all Duke
Energy-Supplied Components, Ambient and its subcontractors shall be responsible
for providing all-risk property damage insurance during the handling and
delivery transit to any location that has Duke Energy-Supplied Components.
 Coverage shall be written with replacement cost valuation.  The insurance shall
include coverage for damage to property of others in their care, custody and
control.  

(g)

All insurance policies provided and maintained by Ambient and its agent and
subcontractors shall  (i) be underwritten by insurers which are rated “A-VII” or
higher, (ii) provide that such policies are without right of contribution from
any other insurance available to Duke Energy and its affiliates and (iii)
contain severability of interest provisions; and (iv) shall contain no insured
versus insured exclusion, and (iv) be primary and endorsed to add Duke Energy as
an additional insured, except for workers compensation and employer’s liability
and Errors and Omissions insurance policies, and shall include waivers of any
right of subrogation of the insurers against Duke Energy, its officers,
directors, employees and subcontractors of all tiers and have deductibles not to
exceed $100,000 which shall be the sole responsibility of Ambient.  Certificates
of insurance shall be provided to Duke Energy within thirty (30) days following
the Effective Date.  Such certificates and policy endorsements shall provide
that the insurer will provide thirty (30) days’ written notice to Duke Energy
prior to cancellation of any policy.

9.11

Compliance with Laws. Unless exempted by the applicable rules, regulations or
orders, Ambient and Duke Energy shall, and Ambient shall use commercially
reasonable efforts to cause its Contract Manufacturers to, comply fully at all
times relevant to this Agreement with all applicable Legal Requirements,
including, but not limited to: (a) Executive Order 1 1246 issued by the
President of the United States on September 24, 1965; (b) the Vietnam Era
Veterans Readjustment Assistance Act of 1974 and applicable sections of 41 CFR
and 48 CFR 52.222.35 relating to the employment of veterans; (c) Sections 503 of
the Rehabilitation Act of 1 973 and 48 CFR 52.222-36; (d) regulations of the
United States Occupational Safety and Health Act; (e) 15 U.S.C. 637(d)(3) and 48
CFR 52.219 (Aid to Small Business); (f) 48 CFR 52.202-1 (Definitions); (g) 48
CFR 52.203-3 (Gratuities); (h) 48 CFR 52.203-5 (Covenant Against Contingent
Fees); (i) 48 CFR 52.203-6 (Restrictions on Subcontractor Sales to the
Government); (j) 48 CFR 52.203-7 (Anti-Kickback Procedures); (k) 48 CFR 52.203-8
(Cancellation, Rescission, and Recovery of Funds for Illegal or Improper
Activity); (1) 48 CFR 52.209-6 (Protecting the Government’s Interest When
Subcontracting with Contractors Debarred, Suspended, or Proposed for Debarment);
(m) 48 CFR 52.212-5 (Contract Terms and Conditions Required to Implement
Statutes or Executive Orders-Commercial Items); (n) 48 CFR 52.2 15-19
(Notification of Ownership Changes); (o) 48 CFR 52.222-21 (Prohibition of
Segregated Facilities); (p) 48 CFR 52.222-26 (Equal Opportunity); (q) 48 CFR
52.223-13 (Certification of Toxic Chemical Release Reporting); (r) 48 CFR
52.223- 14 (Toxic Chemical Release Reporting); (s) 48 CFR 52.229-1 (State and
Local Taxes); (t) 48 CFR 52.232-23 (Assignment of Claims); (u) all applicable
rules, regulations and orders issued by the United States Secretary of Labor
under any of the foregoing; (v) any Smart Grid Funding Laws if the Parties agree
to any amendments pursuant to Section 9.26; and (w) all amendments of the
foregoing that may be made from time to time. “CFR” is the Code of Federal
Regulations.

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9.12

No Assignment. Neither Ambient nor Duke Energy shall assign this Agreement
without the prior written consent of the other Party which shall not be
unreasonably withheld except that Duke Energy may, upon written notice, assign
this Agreement to an Affiliate of Duke without the permission of Ambient. Any
attempted assignment in contravention of this provision shall be ineffective and
void. Subject to the provisions of this Section, this Agreement shall be binding
upon and shall inure to the benefit of the Parties hereto and their respective
successors and assigns. Notwithstanding the foregoing, Ambient may assign this
Agreement to a third party which purchasers all or substantially all of its
assets or is the surviving party in a merger transaction.

9.13

Claims. Except as otherwise provided in this Agreement, claims by either Party,
however asserted, shall be commenced within two (2) years from the date the
cause of action accrues.

9.14

Divested Entities.  If during the term of this Agreement Duke Energy in any
manner divests any entity which is then a Party to the Agreement (a “Divested
Entity”), the Divested Entity shall have the benefit of the Agreement and shall
be allowed to continue to use the Software in its current capacity (for the
specific software configuration in use at the time) for a period not to exceed
six (6) months after the date of the divestiture so long as each such Divested
Entity agrees in writing to abide by the terms of this Agreement.  If any
Divested Entity desires to have the benefit of the Agreement or use the Software
beyond such six (6) month period, then such Divested Entity must enter into a
separate license agreement with Ambient.  If any Divested Entity elects not to
continue to have the benefit of the Agreement and the use of the Software beyond
such six (6) month period, all Software and related materials used by the
Divested Entities must be returned to Ambient.

9.15

Publicity.  Ambient shall not use the name of Duke Energy or any of its
Affiliates or the fact that Ambient is performing services for or providing
products to Duke Energy or its Affiliates in any press releases, media
statements or public communications or otherwise publicize this Agreement
without Duke Energy’s prior written consent.  Ambient shall not use Duke
Energy’s or any Affiliate’s name, logos, copyrights, trademarks, service marks,
trade names or trade secrets in any way without Duke Energy’s prior written
consent, and Duke Energy shall not be deemed to have granted Ambient a license
of, or granted Ambient any rights in, any of the foregoing by entering into this
Agreement.  Ambient may issue a press release with respect to the subject of
this Agreement, which press release and the timing thereof shall be subject to
Duke Energy’s review and approval (which shall not be unreasonably withheld or
delayed). Ambient may refer to Duke Energy in any filing to the U.S. Securities
and Exchange Commission, but only to the extent necessary to comply with
applicable disclosure obligations under U.S. securities laws and related laws
and regulations.

9.16

Permits, Statutes and Codes.  Ambient shall comply with the requirements of all
statutes, acts, ordinances, regulations, codes and standards of legally
constituted authorities having jurisdiction with respect to Products, Software
and Documentation and the Services performed by Ambient.  Duke Energy shall
comply with the requirements of all statutes, acts, ordinances, regulations,
codes and standards of legally constituted authorities having jurisdiction over
the performance by Duke Energy of this Agreement.

9.17

Captions Not Controlling.  The captions used in this Agreement and schedules are
solely for reference purposes and such captions shall not be considered in
construing or interpreting any provision of this Agreement.

9.18

No Construction Against the Drafter.  The Parties agree that this Agreement is
the result of careful negotiations between sophisticated Parties and thus any
principle of construction or rule of law that provides that an agreement shall
be construed against the drafter of the agreement in the event of any
inconsistency or ambiguity in such agreement shall not apply to the terms and
conditions of this Agreement.

9.19

Multiple Counterparts. This Agreement may be executed in one or more
counterparts (including those delivered by facsimile or other electronic means),
each of which shall be deemed an original hereof but all of which together shall
constitute one and the same instrument.

9.20

No Exclusivity.  This Agreement does not confer an exclusive arrangement on
either Party.  Duke Energy is not required to engage Ambient to deliver any
Product or Software or perform any Services under this Agreement and Ambient is
not required to deliver any equipment or perform any Services under this
Agreement until the issuance and acceptance of a Release.  Either Party may, in
its sole discretion, enter into agreements with other companies for similar
Product, Software and Services.

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9.21

Fraud and Ethics.  Ambient shall be familiar with and shall adhere to the
principles of Duke Energy’s Code of Conduct as in effect on the Effective Date,
located at http://www.duke-energy.com/suppliers/code-of-conduct.asp, and with
Duke Energy’s Code of Business Ethics. Ambient shall promptly report any fraud,
illegal activity, fiscal waste or abuse, or other violations of Duke Energy’s
Code of Conduct or Code of Business Ethics by any party, including Ambient’s
suppliers and service providers.  Such activity may be reported by contacting:
(a) the applicable Duke Energy Contract Administrator, (b) Duke Energy's Chief
Compliance Officer at 704-382-6510, (c) Duke Energy's Ethics Line at
800-525-3783, which may be called anonymously, or (d) Duke Energy’s website at
www.dukeenergy-ethicsline.com which is managed by a third party.  

9.22

Cyber Security.  Should Ambient or any of its employees, subcontractors,
representatives, or any other similarly authorized third parties under the
control of Ambient who will be providing Services hereunder on behalf of such
Ambient require or be permitted unescorted access to Duke Energy’s electronic or
physical assets, which are classified as "critical" under Duke Energy's Standard
6000 for Cyber Security or the regulatory requirements of the North American
Electric Reliability Corporation (NERC), all such persons shall be required to
meet certain pre-requisites prior to access to any such critical assets.
 Therefore, when any secured electronic or physical access is needed or
permitted, all persons identified above in this provision shall, to the extent
not prohibited by applicable law: (a) successfully complete the Duke
Energy-administered background screening requirement; (b) take the Duke
Energy-administered Cyber Security training; and (c) be given a company
identification number in the Duke Energy Human Resources Management System
(HRMS) for tracking purposes.

9.23

Asbestos Products.  Except as otherwise authorized by Duke Energy in writing,
all Products delivered hereunder shall contain zero percent asbestos or
refractory ceramic fibers.  If Duke Energy authorizes such delivery or use,
Ambient shall clearly mark all containers or other materials containing asbestos
or refractory ceramic fibers, and such containers or materials shall be sealed
to prevent any leakage of asbestos or ceramic fibers.

9.24

Diverse Suppliers.  For any Release under this Agreement (i) in which the total
compensation to Ambient will equal or exceed $550,000, and (ii) at the time of
acceptance by Ambient, Ambient has 500 or more employees worldwide, Ambient
shall adopt and utilize a subcontracting plan that complies with 48 C.F.R.
52-219-9 for Small Diverse Suppliers (“SDS”).  Ambient shall:  (x) use all
commercially reasonable efforts to utilize SDS (and Large Diverse Suppliers) as
required by law; and (y) provide Duke Energy a quarterly status report in a
format reasonably acceptable to Duke Energy.   Such report shall be entered on
Duke Energy’s website at
http://www.duke-energy.com/suppliers/supplier-diversity.asp.  Duke Energy, its
designated auditors and any applicable government agency shall have the right of
access during normal business hours to inspect Ambient’s records related to SDS
and compliance with this section.

9.25

Cooperation; Development.  

(a)

The Parties acknowledge that the technology, legislative mandates and regulatory
landscape for smart grids are evolving and that they desire to be at the
forefront of those developments and to work together to address those
developments in the context of implementing this Agreement.  Therefore, from
time to time, Duke Energy may (i) suggest modifications to the Software and/or
the Products, (ii) request that Ambient undertake modifications to the Software
and/or the Products, (iii) request that Ambient undertake to develop additional
software or new applications for use by Duke Energy in connection with the
Products or Software, or (iv) request that Ambient work with third parties with
which Duke Energy has contracted (“Third Party Service Providers”) to make the
Software and/or Products more robust or have better functionality (each a
“Development Request”).  Ambient shall make a good faith effort to provide to
Duke Energy a statement of work and development proposal including the
reasonable time and cost or reasonable proposed fee basis for completing such
development in sufficient detail to enable Duke Energy to determine the
reasonableness of such proposal (“Development Proposal”).  If Duke Energy
approves the Development Proposal, Ambient shall use commercially reasonable
efforts to complete the work in accordance with the Development Proposal. Duke
Energy shall remit the agreed upon development fee in accordance with the agreed
upon Development Proposal.  

(b)

Duke Energy shall maintain all rights to any of its intellectual property
contained in its Development Request, and such shall be deemed to be Duke Energy
Technology.  If Ambient develops intellectual property pursuant to a Development
Proposal, such Ambient-developed intellectual property shall be “Ambient

20

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Technology” and shall be the sole and exclusive property of Ambient and, if it
is Software, licensed to Duke Energy as if it were a standard Update or Upgrade,
unless otherwise agreed upon in writing by the Parties.  

(c)

If the Development Proposal calls for collaborative development by the Parties
or by one or more of the Parties and any Third Party Service Providers, unless
otherwise agreed in writing by the Parties and Third Party Service Providers, as
applicable, the intellectual property developed in connection with the
Development Proposal shall be considered jointly owned by the collaborators and
may be fully exploited by each of the collaborators without any obligation to
account to the other collaborators. With respect to the Parties, if the jointly
owned property includes trade secret or confidential information, then each
Party agrees to maintain the confidentiality of such trade secret or
confidential information in accordance with the Amended NDA unless released from
such obligation by the other Party.  Unless otherwise agreed in writing, each
collaborator  may, at its own initiative and expense, seek to obtain patent
and/or copyright registration for any jointly owned property in the United
States or in other jurisdictions; provided it (i) first notifies the other
collaborators and gives such collaborators a reasonable opportunity to
participate in the registration process and related decision-making; and (ii)
discloses in such application the joint ownership nature of the property,
including possible rights arising out of joint authorship and invention, as
applicable.  If another collaborator elects to participate in the registration
application process, it shall notify the initiating collaborator within thirty
(30) days and bear its fair share of the expense thereof and may participate
fully in the decisions regarding the handling of the registration process.  If
the other collaborators choose not to participate in the registration
application process (or fail to respond to the notice within thirty (30) days
from the date of the notice), but do not object to the registration, the
initiating collaborator may proceed with the registration and shall have the
sole right to control the registration process for which notice was given and
the right to make final decisions relative to the enforcement of any such patent
or copyright granted (including extensions, modifications and/or continuations,
in whole or in part) other than as a defensive measure or affirmative defense in
response to an infringement suit or claim brought by a third party.  If any
other collaborator, within thirty (30) days from the date of the notice, objects
in good faith to the registration of the jointly owned property, the
registration may not proceed until the collaborators either reach mutual
agreement on the handling of the registration, or resolve any dispute relating
to the same pursuant to any dispute resolution process permitted under this
Agreement.

(d)

During the Term of this Agreement, Ambient shall use commercially reasonable
efforts to evolve its Products such that they remain compatible with new
versions of the Duke Energy Supplied Components.

9.26

Stimulus Funding.  Ambient acknowledges that Duke Energy may apply for funding
from the American Recovery and Reinvestment Act of 2009 ("ARRA"). In the event
Duke Energy is entitled to any funding through ARRA (as it may be amended), or
any subsequent federal laws which relate to the "Smart Grid" or are intended to
help support the modernization of the nation's electricity transmission and
distribution system ("Smart Grid Funding Laws"), Ambient agrees to consider and
negotiate in good faith with Duke Energy to amend this Agreement as necessary to
comply with the applicable Smart Grid Funding Laws, including without limitation
any regulations, directives, criteria, standards, or policies which may be
issued by the Department of Energy, National Institute of Standards and
Technology, or the Federal Energy Regulatory Commission, or the terms of any
grants or agreements entered into pursuant thereto.  Any such amendments would
need to be agreed upon by both Parties in accordance with Section 9.6 of this
Agreement.  In the event the parties agree to amend this Agreement in order to
comply with a particular Smart Grid Funding Law, then that Smart Grid Funding
Law shall be deemed included within the definition of “Legal Requirements” for
purposes of this Agreement.

[Signature page follows]

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IN WITNESS WHEREOF, each of the Parties has caused this Product Sales, Services
& Software Agreement to be duly executed on its behalf effective as of the
Effective Date.

DUKE ENERGY BUSINESS SERVICES LLC

On its own behalf and as agent for and on behalf of:

DUKE ENERGY CAROLINAS, LLC,

DUKE ENERGY INDIANA, INC.

DUKE ENERGY OHIO, INC.

DUKE ENERGY KENTUCKY, INC.

By/s/Ronald Reising

Name:

Ronald Reising

Title:

Vice President

AMBIENT CORPORATION

By/s/ John J. Joyce

Name:

John J. Joyce

Title:

Chief Executive Officer

--------------------------------------------------------------------------------

Appendix A-1: Conditions of Supply of Products

Appendix A-2: Conditions of Supply of Services

Appendix A-3: Software License Agreement

Appendix A-4:  Software Maintenance Agreement

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APPENDIX A-1:

CONDITIONS FOR SUPPLY OF PRODUCTS

1.

GENERAL.  Unless otherwise agreed in writing by Ambient, and except as otherwise
set forth in the Agreement, these Conditions apply to the supply of Products by
Ambient to Duke Energy under this Agreement.  The Parties acknowledge that any
use they might make of stationery, purchase orders or similar documents bearing
any conditions of Duke Energy or Ambient shall be purely for its administrative
convenience, and such use shall not result in such conditions being incorporated
into this Appendix A-1.  Use of Software is governed by the software license
terms as set forth in Appendix A-3.  

2.

FORECASTING AND ORDERING PROCEDURES.

(a)

Forecast.  Within ten (10) Business Days after the Effective Date, Duke Energy
will provide Ambient with a forecast setting forth Duke Energy's good faith
anticipated requirements for purchase of Products by Ambient's model number for
the upcoming twelve-month period on a month-by-month basis (the “Blanket
Purchase Order”).  Thereafter on or before the first Business Day of each month,
Duke Energy will provide Ambient with a Blanket Purchase Order setting forth
Duke Energy's good faith anticipated requirements for purchase of Products by
Ambient's model number for the upcoming twelve-month period on a month-by-month
basis.  

(b)

Releases.  

i.

Duke Energy shall initiate purchases under this Agreement by submitting written
releases (each, a “Release”).  Duke Energy shall specify which Duke Energy
company is purchasing the Products.  Each Release will be a firm order.
 Releases shall not exceed the Blanket Purchase Order for the applicable period
to which they relate except with the prior written consent of Ambient.  Each
Release will include Ambient's model number for the Product, and the requested
shipping point to Duke Energy for each Product listed thereon.  Within ten (10)
Business Days after the Effective Date, Duke Energy will issue a Release for the
ensuing [**].  Thereafter on the first Business Day of each calendar month, Duke
Energy will issue Releases for the ensuing [**].

ii.

Ambient shall provide notice confirming receipt of each Release within ten (10)
Business Days of its receipt thereof, with such receipt containing a notice of
any issues with the Release.

iii.

Ambient and Duke Energy shall thereafter confer with one another to resolve any
issues with the Release.

iv.

To the extent a Release conforms to the Blanket Purchase Order for the
applicable period, the Scheduled Delivery Date shall be by the date requested by
Duke Energy in the Release if it is consistent with the Lead Times.  To the
extent a Release does not conform to the Blanket Purchase Order for the
applicable period or the relevant Lead Times, Ambient shall use commercially
reasonable efforts to accommodate Duke Energy’s requested delivery dates.  

v.

Ambient shall provide written notice to Duke Energy of Ambient’s acceptance of a
Release, such written notice to contain the Scheduled Delivery Date(s).  

vi.

Except as set forth in Section 2(c), all changes to the Release shall require
Ambient’s and Duke Energy’s prior written approval.  

(c)

Cancellation or Delay by Duke Energy.  Duke Energy may not cancel or delay the
quantity of Product on an accepted Release except in accordance with the
following provisions.

A1-1

--------------------------------------------------------------------------------

i.

Duke Energy may cancel that portion of any accepted Release with a Scheduled
Delivery Date that is later than the date computed by adding the applicable Lead
Time to the date that Duke Energy notifies Ambient of such cancellation. For
example, if the Scheduled Delivery Date for an item in a Release is October 1,
2009 and the applicable Lead Time for that item is ninety (90) days, then Duke
Energy may cancel its order for that item any time prior to July 3, 2009.  In
the event of such a cancellation, Duke Energy shall pay to Ambient all
demonstrable direct amounts expended by Ambient on account of equipment,
supplies and components purchased by, and the charges of Contract Manufacturers
used by, and any additional labor costs incurred by Ambient for Duke Energy to
meet that portion of the cancelled Release (“Cancellation Fees”).  The
Cancellation Fees shall not exceed the price of the Products canceled.  Duke
Energy shall be entitled to a refund for the net amount realized by Ambient from
the resale or other disposition of such equipment, supplies and components
within one hundred eighty (180) days from notice of cancellation. Ambient shall
use commercially reasonable efforts to minimize any costs relating to Duke
Energy’s cancellation of a Release.  For avoidance of doubt, Duke Energy shall
be assessed no penalty, cost or other damages relating to its cancellation of
any portion of a Release that is cancelled in compliance with this Section
2(c)(i) except as provided under this Section 2(c)(i), and the Cancellation Fees
described in this Section (2)(c)(i) shall be Ambient’s sole remedy with regard
to Duke Energy’s cancellation of that portion of a Release that is cancelled in
compliance with this Section 2(c)(i).  

ii.

With respect to an accepted Release, Duke Energy may extend the associated
Scheduled Delivery Date by no more than thirty (30) days, provided that (i) Duke
Energy so notifies Ambient at least ninety (90) days before the original
Scheduled Delivery Date for that Release and (ii) the aggregate delays for all
deliveries under a particular Release shall not exceed forty-five (45) days in
the aggregate.

iii.

Duke Energy may cancel a Release in accordance with Section 3(b), in which case
there shall be no Cancellation Fees.

3.

DELIVERY.

(a)

Delivery.  Ambient shall deliver Products to Duke Energy in accordance with the
Scheduled Delivery Date, provided that notwithstanding anything in this
Agreement to the contrary, the parties agree that a delivery of Products that
arrives within five (5) Business Days before or after the Scheduled Delivery
Date shall be deemed timely. At Duke Energy’s option, as specified in a Release,
delivery will be:

i.

FOB Destination, whereby Ambient shall arrange for delivery to the location
within the United States specified by Duke Energy.  Title and risk of loss in
the Products will pass to Duke Energy upon delivery to the named destination.  

ii.

FCA Shipping Point, whereby Ambient shall arrange for delivery to a carrier
selected by Duke Energy.  Title and risk of loss in the Products will pass to
Duke Energy upon delivery to the selected carrier at the Shipping Point.

iii.

Any other available method of delivery on commercially reasonable terms.

(b)

Delivery Delays by Ambient.  In the event of a Delayed Release, Ambient shall
promptly notify Duke Energy and shall as soon as possible thereafter provide a
date on which Ambient shall deliver that shipment, such date becoming the
Scheduled Delivery Date for that shipment.  In addition, in the event that the
Delayed Release was placed by Duke Energy in accordance with the applicable Lead
Time and Ambient delivery is not made within [**] of the Scheduled Delivery Date
for reasons other than a force majeure, the invoiced amount owing to Ambient on
account of such delivery may be reduced by liquidated damages in amount equal to
[**] of the total purchase price for the Products that are in such Delayed
Release that have not been delivered within [**] of the Scheduled Delivery Date
and [**] of the invoice

A1-2

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amount for those Products for which delivery is late by [**], which the Parties
agree is a fair and reasonable determination of the amount of actual damages
which Duke Energy would incur due to such a delay and that such liquidated
damages do not constitute a penalty.  In its sole discretion, and as an
alternative to the liquidated damages described in this Section 3(b) of Appendix
A-1, Duke Energy shall have the right to cancel that portion of any Delayed
Release without penalty or charge that is not delivered to Duke Energy within
[**] of the Scheduled Delivery Date for reasons other than force majeure, and in
such case, Duke Energy shall have available any and all additional rights under
this Agreement, at law or in equity with regard Ambient’s failure to deliver
within [**] of the Scheduled Delivery Date.  Notwithstanding the foregoing, no
liquidated damages will be applied to reduce the purchase price of the Products
if the Delayed Release is the result of Duke Energy’s failure to supply Duke
Energy-Supplied Components to Ambient in compliance with a schedule established
by the Parties.  If Duke Energy fails to supply Duke Energy-Supplied Components
to Ambient in compliance with a schedule established by the Parties, Duke Energy
shall pay Ambient all amounts expended by Ambient on account of equipment,
supplies and components purchased by, and the charges of Contract Manufacturers
used by, and any additional labor costs incurred by Ambient for Duke Energy
occasioned by such delay.

4.

ACCEPTANCE.

(a)

Duke Energy will accept Products if such Products conform in all material
respects to the Specifications.  Duke Energy may reject any item that fails to
conform in any material respect to the Specifications as determined by Duke
Energy in accordance herewith (“Rejected Products”).  Rejected Products shall be
determined on a unit basis.  Duke Energy shall not reject an entire pallet of
Products unless at least [**] of the units of the pallet fail to meet the
Specifications, and Duke Energy shall not reject an entire shipping container of
Products unless at least [**] of the pallets in that container fail to meet the
Specifications.

(b)

Duke Energy shall perform such acceptance tests as Duke Energy deems appropriate
following Duke Energy’s receipt of Products.  Duke Energy shall perform such
tests within [**] of its receipt of Products (as applicable, the “Inspection
Period”).  Duke Energy shall notify Ambient within the Inspection Period of any
Product not meeting the Specifications.  

(c)

Subject to the terms of Section 7 of this Appendix A-1, Duke Energy shall make
arrangements to return any rejected Products or shipments to a location within
the United States in accordance with Ambient’s reasonable instructions and at
Ambient’s sole expense.  Risk of loss relating to any returned Products shall
pass to Ambient upon delivery of such Products to the Ambient-designated
location.

(d)

If Duke Energy does not provide notice of rejection within the Inspection Period
or does not return Products within the time limits set forth above, then Duke
Energy agrees that the Products shall be deemed accepted; provided that and for
avoidance of doubt, Duke Energy shall have no obligation to pay for any Rejected
Products.  The foregoing acceptance procedure shall not relieve Duke Energy of
its obligation to pay for the quantity of Products that it has accepted.  For
example, if Ambient ships 1,000 units to Duke Energy and 10 units are rejected
and returned, the Duke Energy will be obligated to pay for 990 units.  If Duke
Energy has already paid for any Rejected Products, Ambient shall return such
payment within [**] of a notice of rejection from Duke Energy.    

5.

PRICES.  Duke Energy shall pay Ambient the prices set forth in Schedule A-1
attached hereto for the Products listed therein; provided that for any Products
purchased by Duke Energy not listed in Schedule A-1, Duke Energy shall pay to
Ambient the prices mutually agreed to by the Parties.

6.

WARRANTIES.

6.1

Ambient represents and warrants that: (a) Ambient shall deliver good, exclusive
and marketable title to the Products free and clear of all liens, security
interests, claims, and encumbrances; (b) for a period of [**] after acceptance
by Duke Energy the Products shall be free from defects in materials and
workmanship and shall comply

A1-3

--------------------------------------------------------------------------------

with the Specifications; (c) except as authorized by Duke Energy, in writing,
the Products shall contain zero percent asbestos, (d) Ambient shall not violate
any federal, state, local or foreign statute, law, rule, regulation or order in
manufacturing, selling or delivering of the Products.

6.2

This limited warranty and the remedies hereunder are limited to Products
properly used, maintained, stored, installed and used for their intended purpose
and use only, in accordance with Ambient instructions; provided, however, this
limitation applies solely to the extent: (i) that any use, maintenance, storage
or installation requirements are set forth in the Documentation; (ii) that any
deviation from the use, maintenance, storage, or installation requirements set
forth in the Documentation actually caused the damages that Ambient attempts to
exclude under this Section 6.2; and (iii) that the limitation expressed in this
Section 6.3 is not inconsistent with any express warranties provided under the
Agreement.  

6.3

Ambient cannot be responsible for ancillary equipment not supplied by Ambient,
which is attached to or used in connection with the Products, except to the
extent of damage caused by the Products, Services or Software to such ancillary
equipment.  Ambient cannot be responsible for any damage to the Products
resulting from the use or operation of the ancillary equipment not set forth in
the Specifications and not furnished, approved or recommended by Ambient for use
with the Products.

7.

WARRANTY SERVICE AND CLAIMS.

7.1

Ambient will either repair or, at its election, replace any Products that do not
comply with the warranty in Section 6.1 of this Appendix A-1.  Such repair or
replacement shall be made as soon as practical, but in any event within [**] of
receipt of notice from Duke Energy.  Ambient shall cause such repairs or
replacement to be made at the location where the Products are installed unless
Ambient determines that return of Products is required for repair or
replacement.  

7.2

Unless Ambient gives other instructions, the defective unit will be returned to
Ambient freight collect. Duke Energy must notify Ambient that the unit is being
returned and must obtain a Notice of Return (NOR) number, and place this NOR
number on the outside of all boxes returned to Ambient.  Ambient must provide
Duke Energy with a NOR number upon request.

7.3

AMBIENT may inspect the unit to verify that it is eligible for repair or
replacement.

7.4

Ambient will repair or, at its election, replace the defective unit. Units
repaired or replaced shall be returned to Duke Energy FOB Destination PPA as set
forth in Section 3 of this Appendix A-1, provided however, Ambient shall be
solely responsible for Duties and Supplemental Amounts for the repair or
replacement of Products previously delivered to Duke Energy.

7.5

All replacement Products shall comply with the warranty provisions of this
Agreement for a period of [**] from receipt.

8.

MISCELLANEOUS.

8.1

Agreement.  These Conditions for Supply of Products are part of, and are subject
to, the terms and conditions of the Agreement to which they are annexed.  All
terms not otherwise defined herein shall have the meaning ascribed thereto in
the Agreement.

8.2

Documentation. Ambient shall promptly provide Duke Energy with Documentation and
revisions thereto for any Products ordered by Duke Energy.

8.3

Inspection of Facilities.  Duke Energy shall have the right to conduct an
inspection of Ambient’s manufacturing facilities, and Ambient shall use
commercially reasonable means to cause its Contract Manufacturers involved in
the production of Products for Duke Energy to grant Duke Energy such right with
respect to such Contract Manufacturers’ facilities, upon twenty (20) Business
Days prior written notice and during such entities’

A1-4

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normal business hours, to inspect the Products and the manufacturing and
assembling process for the Products and to inspect all applicable quality
assurance and other records relating to the Products without charge to Duke
Energy (provided that, for the avoidance of doubt, Duke Energy shall be
responsible for all travel and other expenses associated with the personnel
conducting such inspection on Duke Energy’s behalf). Duke Energy may exercise
such right not more than once per calendar year, unless it would be reasonable
under the circumstances to require more request inspections (for example,
following frequent Product failures or rejections).  All information obtained by
inspectors during any such audit shall be treated as Ambient Confidential
Information, and such inspection shall be conducted in a manner that precludes
access to confidential information of third parties excepting Ambient Contract
Manufacturers involved in the production of Products for Duke Energy.

A1-5

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Schedule A-1

Table : PRODUCT PRICES

 

Order Volume:

[**]

[**]

Model

Description

Unit Price

Unit Price

 

 

 

A specific model number is required and assigned for each combination of
options.  Models that are most likely to be ordered by Duke are listed below.
 Contact Ambient for model numbers for any combinations not listed below.

 

 

 

 

Pole-mount Nodes

 

 

X-3100-YB1

Pole-mount node with gray enclosure, Cellular modem, [**] (provided by Duke), 6
kV surge suppression module, Universal Bracket, [**]

$[**]

$[**]

 

 

 

 

X-3100-YBA

Pole-mount node with gray enclosure, Cellular modem, [**] (provided by Duke),
"last gasp" battery option, 6 kV surge suppression module, Universal Bracket,
[**]

$[**]

$[**]

 

 

 

 

X-3100-YBB

Pole-mount node with gray enclosure, Cellular modem, [**] (provided by Duke)
assembly, [**] (supplied by Duke) assembly and antennas, 6 kV surge suppression
module, Universal Bracket, [**]

$[**]

$[**]

 

 

 

 

X-3100-YBC

Pole-mount node with gray enclosure, Cellular modem, [**] (provided by Duke)
assembly, [**] (supplied by Duke) assembly and antennas, "last gasp" battery
option, 6 kV surge suppression module, Universal Bracket, [**]

$[**]

$[**]

 

 

 

 

A1-6

--------------------------------------------------------------------------------

Pad-mount Nodes

 

 

X-3100-GB1

Pad-mount node with green enclosure, Cellular modem, [**] (provided by Duke), 6
kV surge suppression module, Universal Bracket, [**]; typically ordered with
A-PMK-310

$[**]

$[**]

 

 

 

 

X-3100-GBA

Pad-mount node with green enclosure, Cellular modem, [**] (provided by Duke),
"last gasp" battery option, 6 kV surge suppression module, Universal Bracket,
[**]; typically ordered with A-PMK-310

$[**]

$[**]

 

 

 

 

X-3100-GBB

Pad-mount node with green enclosure, Cellular modem, [**] (provided by Duke)
assembly, [**] (supplied by Duke) assembly and antennas, 6 kV surge suppression
module, Universal Bracket, [**]; typically ordered with A-PMK-310

$[**]

$[**]

 

 

 

 

X-3100-GBC

Pad-mount node with green enclosure, Cellular modem, [**] (provided by Duke)
assembly, [**] (supplied by Duke) assembly and antennas, "last gasp" battery
option, 6 kV surge suppression module, Universal Bracket, Node software license,
[**]; typically ordered with A-PMK-310

$[**]

$[**]

 

 

 

 

Option

 

 

 

A-PMK-310

Pad-mount Kit (Two Piece Locking Cover and pad-mount mounting foot)

$[**]

$[**]

The prices stated above are in effect for the first twelve (12) months following
the Effective Date.  Thereafter, the prices stated above shall continue in
effect for the term of the Agreement; provided that if Ambient’s costs of
production increase by more than [**] in a calendar quarter compared to the
previous calendar quarter due to Ambient’s costs of raw materials, Ambient’s
costs for Contract Manufacturers required by Duke Energy when Duke Energy does
not consent to a change of Contract Manufacturers desired by Ambient,
macroeconomic conditions affecting the U.S. or global economies, changes in
laws, industry-wide changes to the smart-grid marketplace or acts of war or
terrorism, Duke Energy agrees to consider and negotiate in good faith with
Ambient to amend this Schedule A-1 after receipt of written notice from Ambient
describing in reasonable detail and substantiating the costs of production
increase.  

A1-7

--------------------------------------------------------------------------------

The following [**] structure for base unit models (i.e., X-3100-YB1 or
X-3100-GB1) will apply for all Firm Order Releases.  

Table : Volume [**] Levels for Common Configurations

Cumulative Quantities

 

X-3100-YB1
(Electric/
Pole-mount)
Unit Price

X-3100-GB1+
A-PMK-310
(Electric/
Pad-mount)
Unit Price

X-3100-YBB
(Combo/
Pole-mount)
Unit Price

X-3100-GBB+
A-PMK-310
(Combo/
Pad-mount)
Unit Price

[**]

 

$[**]

$[**]

$[**]

$[**]

[**]

 

$[**]

$[**]

$[**]

$[**]

[**]

 

$[**]

$[**]

$[**]

$[**]

[**]

 

$[**]

$[**]

$[**]

$[**]

[**]

 

$[**]

$[**]

$[**]

$[**]

[**]

[**]

 

$[**]

$[**]

$[**]

$[**]

For all other models not listed in Table 2, Ambient will apply the [**] levels
listed in the table below to the [**] unit volume prices of the respective
models listed in Table 1.

Table : Volume [**] Levels

Cumulative Quantities

 

Unit Price [**]

[**]

 

[**]

[**]

 

[**]

[**]

 

[**]

[**]

 

[**]

[**]

 

[**]

[**]

 

[**]

A1-8

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APPENDIX A-2:

CONDITIONS FOR SUPPLY OF SERVICES

1.

SERVICES. Ambient will provide to Duke Energy the services (the “Services”)
which the Parties have mutually agreed that Ambient will provide.  Duke Energy
may engage Ambient for such services by a purchase order for its administrative
convenience, but such use shall not result in such conditions being incorporated
into this Appendix A-2.

2.

RATES. The rates for the Services shall be as agreed to by the parties.

3.

WARRANTY. Services performed hereunder shall be performed in a professional
manner consistent with the standards of quality and care typical within the
industry at the time of performance for similar services.  In the event any
portion of the Services furnished to Duke Energy fails to comply with this
warranty obligation, Ambient will promptly re-perform such portion of the
Services without additional compensation from Duke Energy or, if re-performance
is impractical or impossible as mutually agreed by the Parties, will refund the
amount of the compensation paid to Ambient for such portion of the Services.
Ambient shall employ only competent and experienced personnel to perform the
Services.

4.

SAFETY AND SECURITY.  All Services performed by Ambient or any other person or
entity on Duke Energy’s premises or in the community, and the design of all
equipment and systems brought onto Duke Energy’s premises and Products to be
installed in the community, shall comply fully with (i) all applicable Legal
Requirements, including without limitation the occupational safety and health
standards in 29 C.F.R. sections 1910 and 1926, and (ii) Duke Energy’s safety and
security policies and regulations which have been provided in writing to
Ambient, all as amended from time to time. At least two weeks before any
Services are performed on Duke Energy’s premises or in the community, Ambient
shall deliver to Duke Energy: (a) a copy of Ambient’s hazard communication
program; (b) a list of all hazardous chemicals and other substances Ambient
proposes to bring onto Duke Energy’s premises or are contained in Products, if
any, and the quantities of each; and (c) material safety data sheets for each
chemical and substance on the list.

5.

DUKE ENERGY RESPONSIBILITIES. Where any Services are to be performed at Duke
Energy's premises, Duke Energy shall, subject to compliance by Ambient personnel
with Duke Energy's reasonable safety and security requirements, allow Ambient
personnel full and complete access to the area(s) where the Services are to be
performed and will provide adequate office accommodation and facilities for any
Ambient personnel working on its premises as required. Duke Energy will provide
Ambient with all necessary co-operation, information, equipment, data and
support that may be reasonably required by Ambient for the performance of the
Services, including access to suitably configured computer products at such
times as mutually agreed to by the Parties.

6.

PERSONNEL.

A.

Ambient and Duke Energy shall comply in all respects with all applicable
immigration Legal Requirements that may impact Ambient’s or Duke Energy’s
obligations under this Agreement, including the Immigration Reform and Control
Act of 1986 and Form 1-9 requirements. Without limiting the generality of the
foregoing, Ambient shall perform all required employment eligibility and
verification checks and maintain all required employment records with respect to
Ambient’s employees.

B.

For Services performed at a Duke Energy facility, in the community, or requiring
access to Duke Energy’s computer network, Ambient shall be responsible for
conducting adequate predeployment screening of its employees, agents or
independent contractors (and its subcontractors’ employees, agents or
independent contractors) prior to assigning such personnel to Duke Energy.
Ambient represents and warrants that it will complete pre-deployment screening
with respect to such personnel and that it will not assign such personnel to
perform Services at a Duke Energy facility, in the community, or provide access
to the Duke Energy computer network unless the pre-

A2-1

--------------------------------------------------------------------------------

deployment screening does not reveal any information that Ambient, acting
reasonably, considers would adversely affect such personnel’s suitability for
performance of the Services. Such pre-deployment screening shall include, at a
minimum, an alcohol and five-panel drug test and a background check including: a
Terrorist Watch Database Search; a Social Security trace; and a state and
federal criminal history check for the previous five (5) years. Except where
prohibited by law, Ambient will have the ongoing duty to inform Duke Energy
immediately upon learning that one of Ambient’s or its subcontractors’
employees, agents or independent contractors is not suitable for performance of
the Services. Except where prohibited by law, should Ambient learn, after
assigning an individual to provide Services at a Duke Energy facility, in the
community, or requiring access to the Duke Energy computer network, information
that Ambient, acting reasonably, considers would adversely affect such
personnel’s suitability for performance of the Services, Ambient will promptly
advise Duke Energy and remove the individual immediately from performing
Services at a Duke Energy facility, in the community, or on the Duke Energy
computer network.

C.

Ambient and its subcontractors will not assign any person to provide Services
known by Ambient to have been convicted of a felony involving dishonesty or a
breach of trust or who is listed in the Terrorist Watch Database. Except where
prohibited by law, Ambient will have the ongoing duty to inform Duke Energy
immediately upon learning that one of Ambient’s or its subcontractors’
employees, agents or independent contractors has been convicted of a felony or
is listed in the Terrorist Watch Database. Except where prohibited by law,
should Ambient learn after assigning an individual to provide Services that the
individual has been convicted of a felony or is listed in the Terrorist Watch
Database, Ambient will promptly advise Duke Energy and remove the individual
immediately from performing Services at a Duke Energy facility, in the
community, or on the Duke Energy computer network.

D.

Duke Energy, in its sole discretion, shall have the option of barring from
performing the Services any Ambient (or subcontractor) personnel who Duke Energy
determines is not suitable.

7.

AGREEMENT.  These Conditions for Supply of Services are part of, and are subject
to, the terms and conditions of the Agreement to which they are annexed.  All
terms not otherwise defined herein shall have the meaning ascribed thereto in
the Agreement.

A2-2

--------------------------------------------------------------------------------

APPENDIX A-3:

SOFTWARE LICENSE AGREEMENT

TERMS AND CONDITIONS

1.

LICENSE

1.1

Grant.  Ambient hereby grants Duke Energy, and to any third party engaged by
Duke Energy to operate or maintain the Software on its behalf, a perpetual,
irrevocable, non-exclusive, non-assignable, non-transferable (except as
otherwise provided in this Agreement), world-wide, fully paid-up license,
without right of sublicense, to install and use the object code (only) version
of the Software solely to serve Duke Energy’s internal business purposes for the
management of Ambient Products on an electrical distribution network operated by
Duke Energy in the United States.  Such license includes all Documentation,
Updates, and Upgrades provided to Duke Energy by Ambient hereunder.

1.2

Copies.  Duke Energy may make one (1) copy of the Software for archival
purposes, and a reasonable number of copies of the Documentation as needed by
Duke Energy solely for Duke Energy’s internal use, provided all copyright and
proprietary notices are reproduced.

1.3

License Exclusions. Except as expressly authorized herein, Duke Energy shall not
(i) rent, lease, loan, provide access or user rights to third parties, sell or
otherwise distribute the Software, including any modification, enhancement or
derivative work thereto, in whole or in part; (ii) cause or permit copying
(other than as expressly permitted in this Agreement), translating, modifying,
adapting, reverse engineering, decompiling or disassembling of all or any
portion of the Software; or (iii) publish the results of Software performance
benchmarks to any third party without Ambient’s express written consent.  Any
Duke Energy contractor retained to manage or monitor Duke Energy’s network shall
be allowed use of the Software for the sole purpose of managing and monitoring
Duke Energy’s network.  All rights not expressly granted herein are reserved to
Ambient; provided however, Ambient acknowledges and agrees that Duke Energy may,
in its sole discretion, engage a third-party operator to use the Software on
Duke Energy’s behalf subject to the limitations and conditions set forth in this
Agreement and the Amended NDA, at any location whether inside or outside of the
United States.   Duke Energy shall be responsible for such third-party
operator’s compliance with the terms and conditions of the Agreement and the
Amended NDA.

1.4

System Requirements; Installation.  Duke Energy shall be required to provide at
its expense the minimum hardware and software system requirements specified in
the Documentation.  In any installation performed by Ambient, Ambient shall
perform its own installation testing procedure on the Software.  In no event
shall Ambient be obligated to perform peripheral hardware installation tasks.  

2.

FEES

All Software license fees are included in the prices for the Products.  

3.

TITLE; CONFIDENTIALITY

3.1

Title. As between the Parties, Ambient retains title to and ownership of the
Software and Documentation and to all intellectual property rights thereto,
including any modification, enhancement or derivative work thereto.  Duke Energy
agrees to take reasonable steps to protect the Software from unauthorized
access, copying or use.  Duke Energy shall inform Ambient promptly upon
discovery of any actual unauthorized access to, or use of, the Software.  

3.2

Confidentiality.  The Software incorporates confidential and proprietary
information developed or acquired by Ambient which shall be subject to the
confidentially provisions set forth in Section 5.3 of the Agreement and the
Amended NDA.   

4.

LIMITED WARRANTY

A3-1

--------------------------------------------------------------------------------

4.1

General.  Ambient warrants and covenants that: (i) it has the unencumbered right
to license the Software to Duke Energy under the terms and conditions described
in this Agreement; (ii) for the Software Warranty Period (defined below), the
media on which the Software will be delivered to Duke Energy will be free from
defects in material and workmanship that affect or may affect the proper
installation of the Software, (iii) as delivered by Ambient, the Software shall
not contain any viruses, Trojan horses, disabling code, timer, clock, counter or
other limiting design or routine which causes the Software to be erased,
inoperable or otherwise incapable of being used in the full manner for which it
was designed and licensed pursuant to this Agreement; and (iv) for the Software
Warranty Period, the Software will not contain any defects which shall cause the
Software to fail to perform in compliance with the Documentation.  For purposes
hereof, “Software Warranty Period” means [**].

4.2

Remedies.  Except as otherwise expressly provided in this Agreement, Duke
Energy’s exclusive remedy for any Software that does not conform with the
warranties set forth in this Agreement is for Ambient to respond and repair or
replace the non-conforming Software in accordance with the terms of the Software
Maintenance Agreement attached to the Agreement as Appendix A-4 but without
charge or expense to Duke Energy for Software still in the Software Warranty
Period; provided that (i) Duke Energy notifies Ambient of the non-conformity
within the Software Warranty Period providing sufficient detail to enable
Ambient to reproduce the errors and diagnose the non-conformity, or sufficient
information to confirm the non-conformity exists; (ii) Duke Energy has installed
all Updates and Upgrades made available pursuant to Ambient’s Maintenance
Services (pursuant to Appendix A-4); (iii) no one other than Ambient has made
any unauthorized changes or modifications, or misused or damaged the Software or
the Product in which it is installed; and (iv) Duke Energy provides Ambient with
access to the Products and locations on which the Software has been installed.
 If Ambient is unable to correct any such non-conforming Software as required by
the Software Maintenance Agreement (Appendix A-4) Ambient shall promptly replace
such Software without charge.  All replacement Software must comply with the
Documentation and the requirements of the Software warranty provisions of the
Agreement.  If Ambient is unable to correct such non-conforming Software or
replace it with conforming Software within the time periods and as otherwise
required by this Section 4.2, and such non-conformity has resulted in a Systemic
Error Condition, Ambient’s failure to so correct such non-conformity shall be
deemed a material breach of this Agreement by Ambient.

4.3

DISCLAIMER.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 4.1 AND SECTION
4.2 ABOVE, OR IN SECTION 6.1 OF THE AGREEMENT, AMBIENT EXPRESSLY DISCLAIMS ALL
OTHER WARRANTIES RELATING TO THE SOFTWARE, WHETHER EXPRESS OR IMPLIED, STATUTORY
OR OTHERWISE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

5.

EXPORT CONTROLS

The confidential information of Ambient, and all related technical documents and
materials are subject to export controls under the U.S. Export Administration
Regulations and related U.S. laws. Duke Energy shall: (a) comply strictly with
all applicable Legal Requirements established under these controls; (b)
co-operate fully with Ambient in any official or unofficial audit or inspection
that relates to these controls; and (c) not export, re-export, divert, transfer
or disclose, directly or indirectly, any Software, confidential information of
Ambient, or related technical documents and materials or any direct product
thereof to any country (or to any national or resident thereof) which the U.S.
Government determines from time to time is a country (or end-user) to which such
export, re-export, diversion, transfer, or disclosure is restricted, without
obtaining the prior written authorization of Ambient and the applicable U.S.
Government agency. Ambient warrants that Schedule A-3 contains a complete and
accurate list of all Export Control Classification Number(s) (ECCN) for the
Products, Software and technology licensed by Duke Energy hereunder in
accordance with the Commerce Control List contained in the United States Export
Administration Regulations or other relevant export regulations that may be
promulgated by a United States federal agency.  Ambient may update Schedule A-3
from time to time upon reasonable notice to Duke Energy.

6.

MISCELLANEOUS

This Software License Agreement is part of, and is subject to, the terms and
conditions of the Agreement to which it is annexed.  All terms not otherwise
defined herein shall have the meaning ascribed thereto in the Agreement.
 Notwithstanding the foregoing, or anything else to the contrary in the
Agreement, Ambient acknowledges that if it is a debtor-in-possession or if a
trustee in bankruptcy in a case under the United States

A3-2

--------------------------------------------------------------------------------

Bankruptcy Code rejects this Software License Agreement and/or any supplementary
agreement hereto, Duke Energy may, in its sole discretion, elect to retain its
rights under this Software License Agreement and/or any supplementary agreement
as provided in Section 365(n) of the Bankruptcy Code.   

A3-3

--------------------------------------------------------------------------------

Schedule A-3

EXPORT CONTROL CLASSIFICATION NUMBERS

Ambient will supply required ECCNS prior to the delivery of the first unit of
product under this Agreement following the Effective Date.

A3-4

--------------------------------------------------------------------------------

APPENDIX A-4:

SOFTWARE MAINTENANCE AGREEMENT

TERMS AND CONDITIONS

1.

Services.  Provided Duke Energy remains a current subscriber to Maintenance
Services and has paid all maintenance fees due for such Maintenance Services as
specified on Schedule A-4, Ambient will provide maintenance and support services
for the Software as set forth in this Appendix A-4 (“Maintenance Services”).
 There shall be no fee to Duke Energy for Maintenance Services for a copy of
Software until expiration of the Software Warranty Period applicable to such
copy of the Software as provided in the Software License Agreement set forth in
Appendix A-3 attached to the Agreement.  Provided Duke Energy remains a current
and continuous subscriber for Maintenances Services and has paid all maintenance
fees due, Ambient agrees to offer Maintenance Services for the Software for the
term specified in the Agreement.  If Duke Energy discontinues the purchase of
Maintenance Services, Duke Energy may resume Maintenance Services only with
Ambient’s consent (in its discretion) and upon the payment of all fees that
would have been due for Maintenance Services during the period of
discontinuation in addition to the fees for the prospective reinstatement of
Maintenance Services.

2.

Error Correction.  Ambient will notify Duke Energy of material programming
errors in the Software or related Documentation of which Ambient becomes aware.
Upon identification of any programming error, Duke Energy shall notify Ambient
of such error, the claimed Severity Level, and whether Duke Energy reasonably
believes that the error is resulting in a Systemic Error Condition.  With such
notice, Duke Energy shall provide Ambient with information sufficient to
reproduce the error or to confirm the existence, nature and effect of the error.
  In each case, Ambient shall take steps as necessary to provide workarounds for
and to correct errors in the Software components created by Ambient consistent
with this Software Maintenance Agreement.

3.

Response Times.  Ambient will, after the initial notification of problems with
the Software components created by Ambient, provide Duke Energy with an action
plan for resolution of the error and will provide workarounds and error
corrections within the time frames indicated in the chart below for Software
components created by Ambient.  As to problems with Software components created
by third parties, Ambient will use commercially reasonable efforts to have the
third party licensor provide an action plan, workarounds and error corrections
for such third party software within a commercially reasonable time consistent
with the severity of the problem identified using the same response time
framework identified below.  Ambient’s response and resolution obligations are
subject to: (i) the prompt and full cooperation of Duke Energy in supporting
Ambient’s diagnosis and resolution efforts (including, without limitation: the
provision of a complete and accurate description of error experienced, the
operating conditions when experienced, and other related information; the
performance of requested evaluation and diagnostic procedures; and the
installation and testing of workarounds and fixes provided by Ambient); (ii)
Duke Energy’s operating a supported version of the Software as supplied by
Ambient, in its unaltered and  undamaged form; and (iii) the error condition’s
not being caused in whole by software or hardware not provided by Ambient.  

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LEVEL 1

LEVEL 2

LEVEL 3

Severity 1

[**]

[**]

[**]

Severity 2

[**]

[**]

[**]

Severity 3 and 4

[**]

[**]

[**]

3.1

“Severity Levels” shall be defined as follows:

(a)

“Severity 1” is [**]:

i.

[**]

ii.

[**];

(b)

“Severity 2” is [**]:

i.

 [**]

ii.

[**];

(c)

“Severity 3” is [**];

i.

 [**]

ii.

[**]

(d)

“Severity 4” shall include [**]

3.2

“Support Levels” shall be defined as follows:

(a)

“Level 1” shall mean the acknowledgement by Ambient of the receipt of an error
report from Duke Energy.  In the case of a Severity 1 event, “Level 1” shall
also mean continuous efforts by Ambient technical staff until Level 2 is
achieved.  

(b)

“Level 2” shall mean Ambient’s delivery of a patch, workaround, or temporary fix
and revised Documentation to Duke Energy.

(c)

“Level 3” shall mean Ambient’s delivery of the object code fix, other permanent
fix, or enhancement and revised documentation to Duke Energy, provided, however
if Ambient provides a patch, workaround or temporary fix that has corrected the
error, then the time frames set forth above for a Level 3 response shall be
mutually agreed to by Ambient and Duke Energy.

4.

Failure to Correct Software Defect.  If Ambient is required to, but unable to
correct a defect in the Software within the specified time frames for the given
severity condition following receipt of notice of the error condition from Duke
Energy as required in this Software Maintenance Agreement, Ambient shall be
deemed to have materially breached this Agreement.

5.

Method of Providing Maintenance Services.  Ambient shall furnish Duke Energy
with a point of contact to enable Duke Energy to notify Ambient of the need for
Maintenance Services.  Current Documentation applicable to any Update or Upgrade
will be provided via electronic download.  The Parties acknowledge the Software
is designed to allow Updates and Upgrades to the Software to be made remotely.
 If the Software is unable to allow remote Updates and Upgrades for any reason
attributable to Ambient, Ambient shall be responsible for Duke Energy’s
reasonable cost of physically accessing the Software and manually installing the
Updates and Upgrades,

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provided that Duke Energy gives Ambient at least five (5) Business Days’ prior
notice of its intention to manually install the Updates and Upgrades together
with the estimated cost thereof, and follows Ambient’s reasonable cost
mitigation instructions.

6.

Support of Prior Versions.  Ambient shall provide Maintenance Services to Duke
Energy for all Software components created by Ambient for the current and two
prior Upgrades of all Software; provided, however, that if Ambient provides Duke
Energy with a Software Upgrade to mitigate or avoid an infringement claim under
Section 5.5 (a) of the Agreement, Ambient shall not be required to provide
Maintenance Services for any prior Upgrades of such Software.

7.

Required Modifications.  Notwithstanding anything herein to the contrary, so
long as Duke Energy has purchased the Maintenance Services in the prior calendar
quarter and has not notified Ambient of its intent to terminate the Maintenance
Services, Ambient shall use commercially reasonable efforts to modify the
Software, and each subsequent release of the Software, to make it compatible
with new major releases of the operating system on which it is designed to run,
as requested by Duke Energy.  The parties acknowledge that such modified
software shall be provided as part of an Update or Upgrade and shall replace any
previous version provided.  

8.

Maintenance Fees Nonrefundable.  All Maintenance Fees are non-refundable,
whether upon termination of the Agreement, early termination of Maintenance
Services, or otherwise.

9.

Bundling/Unbundling.  Ambient agrees that its Maintenance Services shall not be
altered by Ambient’s renaming, repackaging, bundling or unbundling of the
underlying Software or Products.  Should any portion of the Products or Software
later be made available only within a bundled packaged offered by Ambient (the
“Package”) which includes functionalities that were not licensed by Duke Energy
pursuant to this Agreement, then (i) Duke Energy shall automatically be granted
a license to the Software in the Package or, if practical, to that portion of
the Software having the functionalities of the Software previously licensed by
Duke Energy hereunder and (ii) maintenance fees charged to Duke Energy for the
licensed Software shall reflect only those charges attributable to the
functionalities of the Software previously licensed by Duke Energy.

10.

Technical Support.  As part of Maintenance Services, Ambient allows unlimited
telephone calls to Ambient’s technical support desk during the hours of 9:00
a.m. until 5:00 p.m. Eastern Time, Monday through Friday except holidays.  The
calls must be made by the Duke Energy primary contacts designated in writing
from time to time by Duke Energy pursuant to Section 12.    

11.

Updates and Upgrades.  As part of Maintenance Services, Ambient will provide to
Duke Energy Updates to the Software which are commercially released by Ambient
without additional charge to its customers.    Ambient shall determine, in its
sole discretion, when Updates and Upgrades shall be made available to Duke
Energy, provided that any such Update or Upgrade shall be made available to Duke
Energy no later than ten (10) Business Days following its general commercial
release.  

12.

Duke Energy's Responsibilities.  As a condition to the provision of workarounds
and error corrections, Duke Energy will (i) appoint two (2) employees to serve
as primary contacts between Duke Energy and Ambient, and will ensure that Duke
Energy's support inquiries are initiated and handled through these contacts;
(ii) provide Ambient with reasonable access to all necessary personnel to
provide information regarding errors or problems reported by Duke Energy; and
(iii) provide Ambient with access to Duke Energy's equipment that contains the
Software.  Duke Energy is responsible for insuring that its designated primary
contacts are properly trained in the operation of the Products and Software and
qualified to identify and interpret error conditions and to understand and
implement Ambient’s support information and technical instructions. The contact
information for such persons is specified on Schedule A-4.

13.

Exclusions. Ambient shall not be required to provide workarounds or error
corrections relating to problems resulting from (i) Duke Energy's failure to
implement all Updates to the Software which are provided under this Agreement;
(ii) any alterations of, or additions to, the Software performed by parties
other than Ambient; (iii) interconnection of the Software with hardware or
software products not recommended by Ambient and not referenced in the
Documentation; (iv) any improper use of the Software or related Products; or (v)
any damage, disruption or disturbance causing a Software error which is beyond
the reasonable control of Ambient, including,

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without limitation, damage, disruption and disturbances caused storms, floods,
electrical disturbances and failures, physical abuse of the Software or related
Products by others, and force majeure.

14.

Service Level Goals.  At the intervals specified below, Ambient and Duke Energy
will meet to review and discuss service levels under this Software Maintenance
Agreement and fees for any additional Maintenance Services desired by Duke
Energy:  180 days after Duke Energy’s first acceptance of Products under the
Agreement, 360 days after Duke Energy’s first acceptance of Products under the
Agreement, and annually thereafter during the first calendar quarter of each
year that this Software Maintenance Agreement is in effect.

15.

Miscellaneous.  This Software Maintenance Agreement is part of, and is subject
to, the terms and conditions of the Agreement to which it is annexed.  All terms
not otherwise defined herein shall have the meaning ascribed thereto in the
Agreement.

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Schedule A-4

Maintenance Fees

[**] per copy of Node Software residing in Product for each 12-month period
after the expiration of the Software Warranty Period payable in advance;
provided that the aggregate annual Maintenance Fee for Products used in Ohio and
Indiana (taken together) shall [**].

Contact Information

Duke Energy will provide contact information to Ambient.  

ENDNOTES

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