ORIGINAL
INDEPENDENT SYSTEM OPERATOR
SCHEDULING APPLICATIONS, SCHEDULING INFRASTRUCTURE AND
BUSINESS SYSTEMS
CONTRACT
No. ISO-97-1 ]
"1
SA/SI/BS CONTRACT TABLE OF CONTENTS
<Table>
1. PARTIES ........................................ 1
2. AGREEMENT ...................................... 1
3. DEFINITIONS .................................... 2
4. INTERPRETATION OF CONTRACT ..................... 7
5. SCOPE OF WORK .................................. 7
6. WORK SCHEDULE .................................. 8
7. RISK OF LOSS ................................... 9
8. TITLE .......................................... 9
9. COMMERCIAL TERMS ............................... 10
10. CONTRACT MODIFICATION ......................... 19
11.. PROJECT MANAGEMENT ............................ 20
12. CODES AND STATUTES ............................. 23
13. SUBCONTRACTORS ................................. 23
14. PROPRIETARY INFORMATION AND MATERIAL ........... 23
15. PROPRIETARY RIGHTS AND LICENSES ................ 25
16. SOURCE CODE .................................... 28
17. INSPECTION, TESTING AND ACCEPTANCE ............. 28
18. WARRANTIES ..................................... 31
19. SUPPLIER'S SYSTEM SUPPORT ...................... 34
20. INFRINGEMENT PROTECTION ........................ 35
21. FITNESS FOR DUTY ............................... 37
</Table>
22. INDEMNITY .............................................. 37
23. INSURANCE .............................................. 39
24. SAFETY NOTIFICATIONS .................................... 40
25. LIMITATION OF LIABILITY ................................. 43
26. DISPUTES ............................................... 44
27. TERMINATION AT WILL ..................................... 46
28. DEFAULTS AND TERMINATION FOR CAUSE ...................... 47
29. WAIVER ................................................. 49
30. ASSIGNMENT ............................................. 49
31. CONFLICT OF INTEREST/BUSINESS ETHICS .................... 50
32. EQUAL OPPORTUNITY LAWS ................................. 51
33. INJURY AND ILLNESS PREVENTION PROGRAM ................... 53
34. SEVERABILITY ............................................ 53
35. NOTICES ................................................. 54
36. GOVERNING LAW .......................................... 55
37. SECTION HEADINGS ........................................ 55
38. SURVIVAL ................................................ 55
39. ENTIRE AGREEMENT
40. REPRESENTATIONS
Annex A: Form of Guaranty
Annex B: Customized Software and Recoupment Fees
Annex C: Supplier Rates
Annex D: Form of Letter of Credit
Annex E: Software Maintenance Agreements
Annex F: WSCC Subregion Map
ii
Annex G: Third Party Software Licenses
Annex H: Potential Conflicts of Interest
Annex I: Purchaser's Equal Opportunity Purchasing Program Policy
Annex J: Policy Regarding Small Business Concerns and Small Disadvantaged
Business Concerns
Annex K: Injury and Illness Prevention Program Compliance Certificate
Annex L: Stage I DSOWs
Volume I: Common Sections
Volume II: Scheduling Infrastructure
Volume III: Scheduling Applications
Volume IV: Business Systems
in
THIS CONTRACT MADE as of this Ijay of March, 1997, consists of the terms and
conditions by which the Parties to the Contract, identified herein, agree to be
bound:
WHEREAS, pursuant to the transition to a competitive electric market in
the State of California, the Independent System Operator Restructuring Trust
issued on December 17, 1996 a Request for Proposals to supply computer hardware
and software systems to provide for the ISO's scheduling and business (e.g.,
billings and settlements) functions (hereinafter "RFP");
WHEREAS, ABB Power T&D Company Inc. ("ABB") and Perot Systems Corporation
("Perot Systems") will form ISO Alliance, LLC as a Delaware limited liability
company with no independent employees or assets for the purpose of performing
through subcontracts between ABB and Perot Systems the Contract;
WHEREAS, as an inducement to the Independent System Operator
Restructuring Trust to enter into the Contract with the ISO Alliance, ABB and
Perot Systems have agreed to guaranty ISO Alliance's performance and obligations
under the Contract (the "Guarantys"), and have thereby executed such Guaranties
as are mutually agreeable to the Parties and the form of such Guaranties is
attached in Annex A;
NOW, THEREFORE, the Parties, as identified herein, have agreed as follows:
1. PARTIES
1.1 The Parties to the Contract are ISO Alliance, LLC, a Delaware
limited liability company ("Supplier"), and Independent System
Operator Restruc turing Trust, established pursuant to the ISO
Trust Agreement (enabled by the Funding Decision, CPUC Decision
96-10-044 (October 25, 1996)) ("Purchas er").
2. AGREEMENT
2.1 In consideration of the not-to-exceed Contract Price of
$48,991,000 to be paid as specified in this Section, and subject
to changes pursuant to Section 10, Section 9, and other
obligations to be performed by Purchaser as specified herein.
Supplier shall perform the Work and its other obligations as
specified herein. In consideration for Stage I Work Supplier
shall be paid a fixed price, subject to changes as provided in
the Contract, of $45,559,767 (the "Stage I Fixed Price"). Stage
II Work is to be performed on a price, subject to changes as
provided in the Contract, to be negotiated upon approval of the
Stage II DSOWs but in any event for a price not to exceed
$3,431,233 (the "Stage II Guaranteed Maximum Price"). Reference
to "the Contract Price"
shall be read to include the Stage I Fixed Price and the Stage II Guaranteed
Maximum Price unless the context unambiguously indicates otherwise.
3. DEFINITIONS
When used herein with initial capitalizations, whether in the singular or in the
plural, the following terms shall have the following meanings:
3.1 Acceptance or Accepted: When all of the conditions of acceptance have been
met, as set forth in Section 17 hereof.
3.2 Acceptance Test Procedure ("ATP"): Documents, prepared by Supplier and
approved by Purchaser, which designate the specific objective tests and
inspections to be performed on Subsystems and the System, as appropriate,
to determine its conformance with the Detailed Statements of Work ("DSOWs")
and the Contract prior to acceptance by Purchaser.
3.3 Authorized Users: The employees, contractors, consultants and System Users
who are authorized, or whom the Purchaser is permitted to authorize, to
use the Licensed Software as provided in the Contract.
3.4 Availability Test: Test for operational availability as specified in the
DSOWs.
3.5 Backup Unit: The hardware, computers, processors, firmware. Documentation,
Licensed Software, and interconnecting cables and other incidental
equipment as specified in the DSOWs and located at Alhambra, California ISO
site which are intended as the backup unit to the Primary unit for the
day-to-day operation of the System.
3.6 Change Order: Document issued by Purchaser, and agreed to by Supplier,
which amends the Contract pursuant to Section 10.
3.7 Contract: This document of agreement, together with the DSOWs and other
attachments and documents expressly incorporated herein by reference.
3.8 Contract Date: The date set forth below as the date the Parties have
executed the Contract.
3.9 Contract Modification: Amendments to the Contract which modify (i) the
Contract Price, (ii) Supplier performance milestones, (iii) Purchaser
delivery obligations, (iv) Stage I or Stage II completion dates, or (v)
required System functionality.
3.10 Contract Price: The aggregate sum to be paid hereunder by Purchaser to
Supplier, including the amount of any increase or decrease provided for in
any Change Orders.
3.11 Customized Software: All computer programs, code, procedures, rules or
routines in Source or Object Code, and all supporting documentation identi-
fied in Annex B, as updated from time to time, which are unique to
Purchaser's System, and which perform certain specialized functions and
which embody Purchaser's Confidential Material, including Derivative Works,
Upgrades, Enhancements and Error Corrections thereto.
3.12 Derivative Work: A revision, modification, translation, abridgement,
conden- sation, expansion, improvement, enhancement, upgrade, error
corrections or adaptation into other operating systems, or other
manipulation of the Licensed software which if created without the
permission of the owner would infringe on the owner's rights.
3.13 Detailed Statements) of Work ("DSOW(s)"): A functional specification or
description of the System and the Work, agreed to by the Parties, to be
per- formed under Stage I or Stage II of the Contract. Stage I DSOWs are
attached in Annex L hereto.
3.14 Developmental Unit: The hardware, computers, processors, firmware. Docu-
mentation, Licensed Software, and interconnecting cables and other
incidental equipment which are intended to be used for the development and
testing of the Subsystems and the System.
3.15 Documentation: Drawings, procedures, instructions, reports, manuals,
Licensed Software documentation, test data, test scripts, simulation
programs and other data, furnished by Supplier pursuant to the Contract.
3.16 Enhancements: Any addition or modification to the Licensed Software that
adds new features or functionality or improves the Licensed Software's per-
formance.
3.17 Error Corrections: Any addition or modification to the Licensed Software or
Documentation that corrects an error, reestablishes conformity of the
Licensed Software to the DSOWs or restores proper operation of the Licensed
Software.
3.18 Field Technical Services: Additional technical services furnished by
Supplier at the Jobsite or System Premises, as appropriate, such as
technical support during installation and acceptance testing.
3.19 Funding Decision: California Public Utilities Commission ("CPUC") Deci-
sion 96-08-038 (August 2, 1996) as modified by CPUC Decision 96-10-044
(October 25, 1996), as that decision may be modified or superseded. This
decision among other things provides for funding of the Work pending estab-
lishment of, and assumption of such funding by, the Independent System
Operator, and enables a Trustee, a trust advisory committee and independent
technical advisors to have oversight over the Work and payments for such
Work.
3.20 Future Developments: All software, concepts, methods, techniques, designs,
processes and ideas, or other components developed specifically for
Purchaser by Supplier but not included in the DSOW.
3.21 Independent System Operator ("ISO"): A corporation, to be formed, which
will operate the California interconnected electric transmission system as
con- templated in the Restructuring Decision, and, through the Trust, for
which the Work is being performed and the System is being developed.
3.22 Integrated System Tests ("1ST"): Specific objective tests prepared by
Supplier and approved by Purchaser conducted to demonstrate conformance
with the DSOWs and the Contract prior to the Operational Dry Run
3.23 Intellectual Property Rights: Any patent, copyright, trademark, service
mark (and any application or registration respecting the foregoing), trade
secret, and other intellectual property right of any type.
3.24 Jobsites: The locations of the facilities for the development and
deployment of the System as set forth in the DSOWs.
3.25 Licensed Software: All computer programs, code (including Object Code, and
to the extent specified in the DSOWs, Source Code), procedures, formats,
templates, rules or routines, and all supporting Documentation provided by
Supplier to the Purchaser for use in connection with the System, pursuant
to the DSOWs, including all Derivative Works, Upgrades, Enhancements, Error
Corrections, and Customized Software.
3.26 Major Subcontractors: ABB Power T&D Company Inc. ("ABB") and Perot Systems
Corporation ("Perot Systems") and other Subcontractors that may be added in
the future upon mutual agreement of the Parties.
3.27 Object Code: The form of a computer program resulting from the translation
or processing of Source Code by a computer into machine language or inter-
mediate code, which is not convenient to human understanding of the pro-
gram logic, but which is appropriate for execution or interpretation by a
computer.
3.28 Operational Dry Run: Specific objective tests prepared by Supplier and ap-
proved by Purchaser, and conducted by Purchaser with the assistance of
Supplier on the System installed at the Jobsite or System Premises, as
appropriate, to demonstrate System conformance with the DSOWs and the
Contract.
3.29 Party or Parties: A party or the parties to the Contract.
3.30 Primary Unit: The hardware, computers, processors, firmware. Documenta-
tion, Licensed Software, and interconnecting cables and other incidental
equipment as specified in the DSOWs located at Folsom, California ISO site
which are intended as the primary unit for day-to-day operation of the
System.
3.31 Purchaser: The Party so identified in Section 1 or, if assigned to another
person or entity, the then current assignee.
3.32 Purchaser's Representative ("PR"): The person or entity designated by
notice given to Supplier by Purchaser as being authorized to act on behalf
of Purchaser for the purpose of the Contract, subject to any limitations
specified in such notice, and identified at Section 35.
3.33 Restructuring Decisions: CPUC Decision 95-12-063 (December 20, 1995) as
modified by D.96-01-009 (January 10, 1996), in Dockets Nos. R.94-04-031 and
1.94-04-032, as those decisions may be subsequently modified or super-
seded.
3.34 Source Code: The set of instructions expressed in a non-machine language
from which the Object Code is derived.
3.35 Subcontractor: An entity contracting directly with Supplier, including but
not limited to Major Subcontractors, to furnish any part of the Work
including materials or services, or an entity contracting with Supplier's
subcontractors of any tier to furnish any part of the Work including
materials or services.
3.36 Subsystem: A computer system comprising part of the System which performs
a specific function described in the DSOWs, and is agreed to be inspected
or tested independently under the Acceptance Test Procedures
3.37 Supplier's Representative ("SR"): The person or entity designated by notice
given to Purchaser by Supplier as being authorized to act on behalf of
Suppli-
er for the purposes of the Contract, subject to any limitations specified
in each notice, and identified at Section 35.
3.38 Supplier Rates: The rates charged by a Major Subcontractor for work compa
rable to the Work, and if no comparable rate exists, such Major
Subcontractor's standard rate for similar services as set forth in Annex C.
Such rates are those rates charged between the Major Subcontractors.
3.39 System: The integrated computer system or systems, including and consisting
of hardware, computers, processors, firmware. Documentation, Licensed Soft
ware, and interconnecting cables and other incidental equipment, which
perform the functions described in the DSOWs and include the Primary Unit
and Backup Unit.
3.40 System Premises: The locations of the facilities where the System is in
stalled.
3.41 System User: Any person, legal or natural, that uses the System for its
intended purposes, including but not limited to the use in connection with
the marketing, procurement and transmission of electricity, and ancillary
services.
3.42 Trust: The trust established pursuant to the Funding Decision to manage
funds for development of the infrastructure of the ISO.
3.43 Trustee: The trustee or trustees of the Trust.
3.44 Uncontrollable Force: Causes beyond the reasonable control of a Party
including but not limited to: flood, fire, lightning, earthquake, unusually
severe weather, unavailability of materials, epidemic, quarantine
restriction, war, sabotage, act of a public enemy, insurrection, riot,
civil disturbance, strike, restraint by court order or public authority and
action or non-action by or inability to obtain authorization or approval
from, any governmental agency or authority, which by the exercise of due
diligence and foresight such Party could not avoid and which by exercise of
due diligence such Party is unable to overcome.
3.45 Upgrades: Any modifications, revisions or additions to the Licensed
Software that support new versions or releases of the platforms, hardware,
operating systems or applications, on or with which the Licensed Software
is designed to operate.
3.46 Work: The engineering, analysis, design, development, manufacture,
assembly, inspection, testing, shipment, installation, integration,
creation of Docu-
mentation, training, and all other tasks and obligations of Supplier to be
performed or furnished as required by the Contract.
3.47 Work Schedule: A chronological listing of significant events and milestones
in the performance of the Work contained in the DSOW, including delivery
and testing of the System as agreed to by the Parties.
4. INTERPRETATION OF CONTRACT
4.1 In the event of conflicting provisions within the Contract, the provisions
shall govern in the following order: (i) Change Orders from the most recent
to the earliest, (ii) this document of agreement, and (iii) the DSOWs. In
addition, the SA/SI/BS RFP and Supplier's response are hereby incorporated
into the Contract to be used solely for interpretation purposes in the
following manner: Supplier reservations in their response to the
SA/SI/BS RFP expressly included in the DSOWs shall prevail over the
SA/SI/BS RFP, whereas for Supplier reservations to the SA/SI/BS RFP, not
expressly retained in the DSOWs, the SA/SI/BS RFP shall prevail. Each party
shall notify the other immediately upon the determination of the existence
of any conflict.
4.2 The Contract requirements will be interpreted reasonably and, except where
an express term or the context otherwise requires, with due consideration
given to the materiality of any minor deviation from a particular
requirement.
5. SCOPE OF WORK
5.1 Supplier shall perform the work and tender the deliverables described in
the DSOWs (Volumes II, III, and IV will be completed by the Parties within
one week following execution of the Contract). Stage II DSOWs shall be
developed and agreed to by Supplier and Purchaser in conformance with
the Stage I DSOWs. If Purchaser and Supplier are unable to reach mutual
agreement on the Stage II DSOWs by the date specified in the DSOWs, and any
equitable adjustments relating thereto. Purchaser may either (i)
re-compete the Stage II Work, or (ii) engage Supplier to provide the full
System functionality as provided by the Contract.
5.2 This Contract is intended to include all requirements necessary to perform
the Work and to furnish the System in good working order, performing all
functions as specified in the DSOWs. Unless expressly excluded in a
DSOW or the Contract, any and all equipment, labor, material and services
not specified therein but which are reasonably implied from the DSOWs and
are reasonably necessary to provide such a System shall be within the
scope of the DSOW and shall be furnished by Supplier for the Contract
Price.
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6. WORK SCHEDULE
6.1 Supplier shall complete the Work and deliver the System and Documentation
as shown in the Work Schedule as set forth in the DSOWs. Meeting these
dates is essential to the operating schedule of the facilities for which
the System is to be furnished. Time is therefore of the essence. The
parties agree that completion of each stage of the System pursuant to the
Work Schedule is a material obligation of the Contract.
6.2 If any milestone or deadline in the Work Schedule is not met or it is
reasonably certain that it will not be met due to causes other than
(i) Uncontrollable Forces or (ii) Purchaser's failure to meet Purchaser's
delivery obligations as specified in Section 9.2.3, and such delayed dates
would be reasonably expected to adversely affect the completion of the
System in accord with the Work Schedule, Supplier shall, at its own
expense, take whatever measures may be required (including but not limited
to, adding employees or consultants, shifts, and overtime) to bring
the Work back on schedule.
6.3 Uncontrollable Forces:
6.3.1 Supplier shall not be liable to Purchaser for delay or inability of
Supplier to perform the Work, due to Uncontrollable Forces;
provided that Supplier (i) promptly notifies Purchaser in
writing of the nature, cause, date of commencement, and expected
duration of such delay or inability, and (ii) has exercised due
diligence to meet the Work Schedule. In such event. Purchaser shall
either (a) extend the Work Schedule for a period of time consistent
with the period of such delay, without any change in the Contract
Price, or (b) direct by a Change Order that subsequent Work be
accelerated in order to meet the Work Schedule.
6.3.2 Purchaser shall not be in default in the performance of its
obligations under the Contract (other than obligations to pay
monies pursuant to the Contract for Work performed and Accepted
or Work performed and thereafter Accepted), if Purchaser's delay
or inability to perform is due to Uncontrollable Forces.
6.3.3 The following delays shall in no event constitute Uncontrollable
Forces in performance by Supplier and shall not constitute a reason
for extending the date for performance of the Work:
(a) Delays by Subcontractors not caused by Uncontrollable Forces;
8
(b) Delays in approval by Purchaser due to Documentation or
approval schedules not in accordance with the DSOWs; and
(c) Delays caused by Supplier's lack of sufficient personnel with
necessary technical skills.
6.4 Upon request by Supplier, Purchaser will provide reasonable
access to ISO controlled premises including access outside ISO's
published working hours and on ISO's observed holidays to the
extent necessary for Supplier to deliver the System and
Documentation on the dates set forth in the Work Schedule.
6.5 Supplier's performance hereunder is contingent upon Purchaser's
delivery obligations specified in Section 9.2.3. In the event
delays in Supplier's performance occur as a result of Purchaser's
failure or untimely performance of such Purchaser delivery
obligations, the Contract, the Contract Price, or the Work
Schedule, as appropriate, shall be equitably adjusted to reflect
such delay in a Change Order and Supplier shall not incur any
liability to Purchaser or any other person as the result of such
delay. Subject to the foregoing, (i) the Purchaser shall promptly
notify Supplier when the required performance of such Purchaser
delivery obligation will be fulfilled and use its best efforts to
fulfill such delivery obligation, and (ii) the Parties will use
their best efforts in good faith to work around the deficiency
and continue the Work.
7. RISK OF LOSS
7.1 Risk of loss of or damage to each Subsystem shall pass from
Supplier to Purchaser upon delivery of that Subsystem to the
System Premises.
8. TITLE
8.1 Title to System hardware shall pass to Purchaser upon payment for
that hardware by Purchaser. The license(s) granted to Purchaser
as provided in Section 15 shall be effective upon final payment
of all amounts due and payable under the Contract upon Acceptance
or pursuant to the Termination at Will provisions of Section 27
or the Defaults and Termination for Cause provisions of Section
29.
8.2 Except for Availability Test data, title to test data developed
by Supplier or its Subcontractor and input or output received
through operation of the System or Subsystems during such testing
shall remain with Supplier, provided that Supplier shall provide
a copy of all such test data to Purchaser. Otherwise, title to
all data and information input into the System and to all
9
data and information output received through the operation of the
System shall remain with Purchaser.
8.3 Passage of title to the System shall be free and clear of all
liens and encumbrances (other than restrictions relating to
Licensed Software).
9. COMMERCIAL TERMS
9.1 Invoices:
9.1.1 For progress or partial shipment payments when so stated in
the Contract: The invoice for each progress payment listed
in Section 9.2.1 below shall be submitted to the Purchaser
following completion of the corresponding Supplier
performance milestone.
9.1.2 Final payment:
9.1.2.1 Stage I: The invoice for the final payment for
Stage I shall be submitted to Purchaser when all of
the items of the System for Stage I have been
received at the Jobsite or System Premises, as
appropriate, and the System for Stage I has been
Accepted pursuant to Section 17 hereof.
9.1.2.2 Stage II: The invoice for the final payment for
Stage II shall be submitted to Purchaser when all
of the items of the System for Stage II have been
received at the Jobsite or System Premises, as
appropriate, and the System for Stage II has been
Accepted pursuant to Section 17 hereof.
9.2 Payment:
9.2.1 Supplier performance milestones are set forth in Section
9.2.2 below. Progress payments shall become due following
completion of each Supplier performance milestone without
regard for the completion date scheduled for each such
Supplier performance milestone. When a Contract
Modification is approved pursuant to Section 10, the
Contract Price and the remaining Supplier performance
milestones and Supplier performance milestone payments as
specified in Section 9.2.2, and Purchaser's delivery
obligations as specified in Section 9.2.3, shall be
adjusted as appropriate. Following completion of each
Supplier performance milestone. Purchaser shall pay
Supplier the relevant milestone payment within thirty days
10
of receipt of a correct invoice therefor. Late payments
shall bear interest at the lesser of (i) of two percentage
(2%) points above the reference rate charged by the Bank of
America, NT&SA, San Francisco, California, on the first day
of each month for that month or portion thereof, or (ii)
the highest rate allowed by law.
9.2.2 Supplier Performance Milestones: The Supplier performance
milestones and the percent of the Contract Price to
be paid upon completion of each such supplier
performance milestone shall be as follows (hereinafter
"Supplier Performance Milestones"):
Stage I - Supplier Performance Milestones
Supplier Performance Milestone Schedule
Stage 1
1 Contract award 4.0% 4.0% 1,822,391
March
2 SA functional specifications completed and 17-Mar 0.6% 4.6% 2,095,749
delivered
3 Integrated Project Workplan completed and de- 21-Mar 0.3% 4.9% 2,232,429
livered
4 Detail design specifications for DPF, NMB, 21-Mar 0.9% 5.8% 2,642,466
NAC, SA TLRC completed and delivered
5 System abstracts (SA/SI/BBS) completed and 31-Mar 2.7% 8.5% 3,872,580
delivered
6 Project strategy documents completed and de- 31-Mar 0.1% 8.6% 3,918,140
livered
7 Initial development environment installed 31-Mar 0.2% 8.8% 4,009,259
8 Initial equipment received 31-Mar 6.1% 14.9% 6,788,405
April 0.0% 14.9% 6,788,405
9 Remaining development environment installed 7-Apr 0.4% 15.3% 6,970,644
10 Spider baseline installed 15-Apr 1.3% 16.6% 7,562,921
11 System acceptance criteria defined and 15-Apr 0.3% 16.9% 7,699,601
delivered
11
11
12 Temporary HR System activated and ready to 15-Apr 0.2% 17.1% 7,790,720
enter initial employee data
13 External design for 20 BBS objects completed 15-Apr 0.5% 17.6% 8,018,519
14 Detail design specifications for AS, BEEP, ISC, 15-Apr 1.1% 18.7% 8,519,676
OS completed and delivered
15 Administrative system requirements defined and 15-Apr 0.2% 18.9% 8,610,796
delivered
16 Second equipment shipment received 15-Apr 3.0% 21.9% 9,977,589
17 External design for 60 BBS objects completed 25-Apr 1.6% 23.5% 10,706,545
18 Integrated logical data model, and internal/ 30-Apr 0.7% 24.2% 11,025,464
external interface designs completed and 30-Apr 0.6% 24.8% 11,298,22
delivered
19 SI user inteface design specifications completed 30-Apr 0.5% 25.3% 11,526,621
and delivered
20 Oracle application software installed and ready 30-Apr 0.7% 26.0% 11,845,539
for configuration
21 Module test plan completed and delivered 30-Apr 3.0% 29.0% 13,212,332
22 Final equipment shipment received
May 0.0% 29.0% 13,212,332
23 Network database built and ready for power 1-May 1.1% 30.1% 13,713,490
flow verification
24 External design for 60 BBS objects completed 2-May 1.6% 31.7% 14,442,446
25 HR/Payroll System activated and operational 15-May 0.3% 32.0% 14,579,125
26 Design specifications for CONG, OGM completed 15-May 1.1% 33.1% 15,080,283
and delivered
27 External design for 60 BBS objects completed 16-May 1.6% 34.7% 15,809,239
28 Billing and settlement construction milestone #1 16-May 0.4% 35.1% 15,991,478
29 Training curriculum and plan completed and 23-May 0.3% 35.4% 16,128,158
delivered
30 SI system detail design complete and ready for 30-May 0.7% 36.1% 16,447,076
construction
12
<Table>
31 External design for 50 BBS objects 30-May 1.5% 37.6% 17,130,472
completed - BBS external design completed
32 Billing and settlement constmction 30-May 0.7% 38.3% 17,449,391
milestone #2
June 0.0% 38.3% 17,449,391
33 Billing and settlement constmction 13-Jun 0.8% 39.1% 17,813,869
milestone #3
34 SI prototype ready for user walkthrough 15-Jun 1.3% 40.4% 18,406,146
35 Billing and settlement construction 27-Jun 0.8% 41.2% 18,770,642
milestone #4
36 Operational dry run plan completed and 27-Jun 0.4% 41.6% 18,952,863
delivered
37 BBS static screen walkthru 30-Jun 0.0% 41.6% 18,952,863
38 Oracle Applications configured 30-Jun 0.1% 41.7$ 18,998,423
39 Performance test plan completed and 30-Jun 0.2% 41.9% 19,089,542
delivered
40 Primary site preparation complete and 30-Jun 0.9% 42.8% 19,499,580
ready for equipment installation and
testing
July 0.0% 42.8% 19,499,580
41 System test plan completed and delivered 11-Jul 0.1% 42.9% 19,545,140
42 Billing and settlement construction 11-Jun 0.8% 43.7% 19,909,618
milestone #5
42 Oracle Applications configuration 15-Jul 0.2% 43.9% 20,000,738
validated
43 Billing and settlement construction 25-Jul 0.8% 44.7% 20,365,216
milestone #6
44 Performance test of WEB based (SI) 28-Jul 0.3% 45.0% 20,501,895
functionality completed
45 Final SI prototype completed and 30-Jul 1.9% 46.9% 21,367,531
demonstrated
46 Documentation release 0 completed and 31-Jul 0.7% 47.6% 21,686,449
delivered
47 Primary site hardware/software installed 31-Jul 1.3% 48.9% 22,278,726
August 0.0% 48.9% 22,278,726
48 Test equipment and spares received 1-Aug 1.2% 50.1% 22,825,443
49 Failover test plan completed and delivered 1-Aug 0.3% 50.4% 22,962,123
</Table>
13
<Table>
50 Billing and settlement construction milestone #7 8-Aug 0.8% 51.2% 23,326,601 15-Aug 1.1% 52.3% 23,827,758
51 SA programs constructed, ready for unit testing, 22-Aug 0.5%
and ready for demonstration (BEEP, AS, inter 22-Aug 0.8%
CONG, OGM) 30-Aug 2.0%
30-Aug 1.9%
52 Training material completed and delivered 0.0%
53 Billing and settlement construction milestone #8 1-Sep 1.1%
54 'Settlement module testing complete 5-Sep 0.8%
55 SI programs tested and ready for FAT testing 15-Sep 0.6%
September 15-Sep 0.9%
56 SA programs tested and ready for FAT testing 26-Sep 1.7%
57 Billing and settlement construction milestone #9
58 Backup site hardware/software installed 52.8% 24,055,557
59 Failover A-B test complete 53.6% 24,420,035
55.6% 25,331,230
60 SI/SA sub-system and SI/SA/PMS integration 57.5% 26,196,866
testing complete (FAT) 57.5% 26,196,866
58.6% 26,698,023
61 BBS sub-system (settlements) and BBS/Si integration testing complete 59.4% 27,062,502
60.0% 27,335,860
62 Billing module testing complete 60.9% 27,745,896
63 1ST complete 62.6% 28,520,414
64 Admin systems ready for production 26-Sep 2.5% 65.1% 29,659,408
Complete all work above before next payment made
30-Sep 2.0% 67.1% 30,570,604
October 30-Sep 4.5% 71.6% 32,620,793
30-Sep 2.1% 73.7% 33,577,548
65 Operational dry run begins
66 Training completed 0.0% 73.7% 33,577,548
1-Oct 0.0% 73.7% 33,577,548
67 ACC site hardware installed and ready for testing 1-Oct 0.7% 74.4% 33,896.467
13-Oct 0.4% 74.8% 34,078.706
</Table>
68 BBS subsystems (billing) testing complete and 31-Oct 1.5% 76,3% 34,762,102
integrated with settlements and ready for operational dry run**
14
<Table>
November 0.0% 76.3% 34,762,102
1-Nov 0.4% 76.7% 34,944,341
69 Documentation release 1 completed and delivered
25-Nov 0.6% 77.3% 35,217,700
70 Performance volume test complete 26-Nov 1.0% 78.3% 35,673,296
71 ISO primary to backup site failover test complete
December 0.0% 78.3% 35,673,296
26-Dec 0.6% 78.9% 35,946,656
72 Training completed 26-Dec 4.5% 83.4% 37,996,846
73 Operational dry run complete 0.0% 83.4% 37,996,846
January 98 8-Jan 7.0% 90.4% 41,186,029
74 Completion of 7 days of ISO production operations
March 0.0% 90.4% 41,186,029
1-Mar 0.6% 91.0% 41,459,388
75 SI/HIM interface completed and put into production
30-Mar 9.0% 100% 45,559,767
76 Availability testing completed and final documentation distributed
</Table>
** The Billing modules will be made available
to the Operational dry run as soon as possible
but no later than 11/1/97
Stage II ; Supplier Performance Milestones: To be established in
Stage II DSOWs
9.2.3 Purchaser Delivery Obligations: The Purchaser delivery obligations
required for Supplier completion of Supplier Purchaser performance
milestones shall be as follows (hereinafter "Purchaser Delivery
Obligations"):
15
Stage I - Purchaser Delivery Obligations
Purchaser's Delivery Obligations
Schedule
Provide resource, scheduling data 3/22/97
Provide WSS model 3/22/97
Provide registered TCP/IP and domain name addresses for 4/30/97
ISO
Provide fully functional development site capable of housing 4/1/97
100+ developers
Computer room at primary site, linked to WEnet, and ready to 4/ /97
support production equipment
WEnet POP available at Hayward, CA 4/ /97
Finalize settlement definition (supplier provide proposal by 4/15/97
4/15/97)
Finalize billing/credit definition (supplier provide proposal by 4/15/97
4/15/97)
Provide fully functional physical primary location for equip- 4/ /97
ment shipment and installation purposes
Computer room at backup site completed, linked to WEnet, 5/ /97
and ready to support production equipment
WEnet POP available at Dominguez Hills, Ca. 5/1/97
Provide fully functional physical backup site location 5/ /97
Provide all FERC/CPUC reporting requirements 7/15/97
ISO staff available to commence training 8/20/97
Finalize (i.e., freeze) power system model 7'/15/97
ISO operational policies and procedures in place 9/1/97
ISO staff, non-Alliance provided equipment and systems (with 10/1/97
appropriate interfaces) ready to support operational dry run
Start operational dry run 10/1/97
Stage I - Purchaser Delivery Obligations
Purchaser's Delivery Obligations
Schedule
Provide resource, scheduling data 3/22/97
Provide WSS model 3/22/97
Provide registered TCP/IP and domain name addresses for 4/30/97
ISO
Provide fully functional development site capable of housing 4/1/97
100+ developers
Computer room at primary site, linked to WEnet, and ready to 4/ /97
support production equipment
WEnet POP available at Hayward, CA 4/ /97
Finalize settlement definition (supplier provide proposal by 4/15/97
4/15/97)
Finalize billing/credit definition (supplier provide proposal by 4/15/97
4/15/97)
Provide fully functional physical primary location for equip- 4/ /97
ment shipment and installation purposes
Computer room at backup site completed, linked to WEnet, 5/ /97
and ready to support production equipment
WEnet POP available at Dominguez Hills, Ca. 5/1/97
Provide fully functional physical backup site location 5/ /97
Provide all FERC/CPUC reporting requirements 7/15/97
ISO staff available to commence training 8/20/97
Finalize (i.e., freeze) power system model 7'/15/97
ISO operational policies and procedures in place 9/1/97
ISO staff, non-Alliance provided equipment and systems (with 10/1/97
appropriate interfaces) ready to support operational dry run
Start operational dry run 10/1/97
16
Stage II - Purchaser Delivery Obligations: To be established in Stage II
DSOWs
9.2.4 In the event the System or Documentation, or portion
thereof, does not conform to the requirements of the
Contract, a portion of the progress payment specified for
the applicable Supplier performance milestone or the final
payment may be withheld until such nonconformance is
corrected.
9.2.5 Purchaser will provide a Letter of Credit, in the form
attached as Annex D, at the Bank of America, San Francisco,
California, for the benefit of Supplier that will provide
assurance of payment of the milestones as achieved.
Following payment of the final Stage I Supplier ,Performance
Milestone as set forth in Section 9.2.2 above. Purchaser
shall renew the Letter of Credit at an amount not to exceed
the then
9.3 Taxes: existing largest remaining Stage II Supplier
Performance Milestone as then set forth in Section 9.2.2
above.
9.3.1 Purchaser shall pay the sales, use, personal property and
other taxes applicable to the Work or System, except
franchise taxes and taxes levied upon Supplier's income
which shall be paid by Supplier. The Parties shall cooperate
with each other to minimize any applicable tax, to the
extent permitted by law and, in connection therewith, each
Party shall provide the other Party with any resale
certificates, information regarding the use of materials,
services or sales or other exemption certificates or
information reasonably requested by the other Party.
9.3.2 Supplier shall identify separately on invoices (i) the
non-taxable portion of the Contract Price and the reason
therefor, and (ii) the taxable portion of the Contract Price
and the applicable taxes. Supplier shall provide supporting
data as may be requested by Pur chaser.
9.3.3 Field Technical Services: For payment for additional
technical services by Supplier at the Jobsite or System
Premises, as appropri ate, such as technical support during
installation and acceptance ("Field Technical Services") not
included in the Contract Price:
9.3.4 Purchaser shall pay Supplier at Supplier Rates for Field
Technical Services approved by Purchaser which are not
included in the Contract Price based on actual time spent at
Jobsites or System Premises, as appropriate, in the
performance of such services, pro vided that Supplier shall
have the right to establish a minimum per- call charge for
on-site Field Technical Services.
17
9.3.5 Purchaser shall reimburse Supplier for local travel and
living ex penses while at Jobsites or System Premises, as
appropriate, per forming Field Technical Services based on
actual cost plus an administrative surcharge of fifteen
percent (15%) and for air travel to and from Jobsites or
System Premises, as appropriate, at the lesser of published
coach/economy class rates or actual costs.
9.3.6 Supplier shall submit to the PR for approval on a weekly
basis timesheets setting forth the actual hours worked in
the performance of the Field Technical Services.
9.3.7 At the end of each month or upon completion of the work,
whichev er occurs first. Supplier shall submit its invoice
listing the name of the persons, dates and hours worked and
applicable rates, including per diem and air travel charges
for Field Technical Services per formed during that period.
9.3.8 Purchaser shall pay correct invoices for Field Technical
Services within thirty (30) days after receipt less any
unsubstantiated or incorrect charges. Late payments shall be
at the lesser of (i) an interest charge of two percentage
(2%) points above the reference rate charged by the Bank of
America, NT&SA, San Francisco, Cali fornia, on the first day
of each month for that month or portion thereof, or (ii) the
highest rate allowed by law.
9.3.9 Recoupment of deductions for unsubstantiated or incorrect
charges and retention for Field Technical Services shall be
invoiced separate ly, providing substantiating or correcting
information.
9.3.10 Supplier shall provide notice of the event and attending
circum stances that may give rise to a claim for an
equitable adjustment within thirty (30) calendar days after
the event which gave rise to such claim becomes known to
Supplier. Failure to give such notice shall result in
Supplier's waiver of such claim for additional com
pensation. Supplier's acceptance of final payment shall
constitute its waiver of all such claims under the Contract.
9.4 Software Maintenance Agreements:
9.4.1 Supplier has agreed to enter into, or to use its best
efforts to cause applicable third parties, including but not
limited to Major Subcon tractors and Subcontractors (except
that Supplier shall cause Ernst & Young LLP, a Subcontractor
to Supplier through ABB), to enter into, certain Software
Maintenance Agreements attached as Annex E
18
and to provide certain services as specified therein, which
are to become effective following the warranty period. The
price for these services will be payable to Supplier or
appropriate third parties, as applicable, upon the signing
of this Contract or as otherwise agreed by the Parties.
9.5 Royalties or other charges for any Intellectual Property
Rights necessary to grant the license conveyed in the
Contract (directly or by implication) shall be considered as
included in the Contract Price.
10. CONTRACT MODIFICATION
10.1 Generally: Contract Modifications shall be made only by
mutual agreement of the Parties. To be valid, such
modification shall be set forth in a Change Order amending
the Contract that is issued and executed as set forth in
this Section 10. All Contract Modifications shall be
communicated through the SR and the PR. Each Party shall
promptly comply with each Contract Modification executed in
accordance with this Section and evidence its accep tance of
all of the provisions contained therein by promptly
returning the ac ceptance copy of each Contract Modification
to the other Party.
10.2 Purchaser Initiated Contract Modification: Upon receipt of a
request for a Contract Modification from Purchaser, Supplier
shall, within five (5) business days unless the parties
otherwise agree, submit to Purchaser in writing (i) the
effect, if any, on Supplier Performance Milestones and
Purchaser Delivery Obligations, (ii) the requisite
mitigating actions, if required, to ensure System operation
by, the dates specified in the Contract, (iii) an assessment
of the impact of the Contract Modification on the spare
parts, training, testing, Documentation work hours by type
of labor, rates, material and Subcontract costs and Work
Schedule requirements, and (iv) the adjustment to the Con
tract Price of the requested Contract Modification or
notification as to when such information and such adjustment
to the Contract Price shall be provided by Supplier. Within
five (5) business days after receiving such information and
such adjustment to the Contract Price for the requested
Contract Modifi cation, Purchaser shall approve, reject or
withdraw the request for such Contract Modification. Failure
by Purchaser to respond within this five (5) day period
shall be deemed a rejection of such Contract Modification.
10.3 Supplier Initiated Contract Modifications: Upon submitting a
request for a Contract Modification, Supplier shall provide
to Purchaser in writing (i) the effect, if any, on Supplier
Performance Milestones and Purchaser Delivery Obligations,
(ii) the requisite mitigating actions, if required, to
ensure System operation by the dates specified in the
Contract, (iii) an assessment of the impact of the Contract
Modification on the spare parts, training, testing,
19
Documentation work hours by type of labor, rates, material
and Subcontract costs and Work Schedule requirements, and
(iv) the adjustment to the Con tract Price of the requested
Contract Modification or notification as to when such
information and such adjustment to the Contract Price shall
be provided by Supplier. Within five (5) business days after
receiving such information and such adjustment to the
Contract Price for the requested Contracted Modification,
Purchaser shall approve or reject the requested Contract
Modifi cation. Failure by Purchaser to respond within this
five (5) day period shall be deemed a rejection of such
Contract Modification.
10.4 Implementation: Supplier shall not implement a Contract
Modification, or submit an invoice for the resulting price
change, until the authorizing Change Order has been issued
by Purchaser and accepted by Supplier and has been executed
by both Parties.
10.5 Changes:
10.5.1 In the event Supplier's cost of performance of the
Work or the time required for the Work is
increased by (i) a change in the Work directed by
PR, (ii) Purchaser's breach of a Purchaser
Delivery Obligation under the Contract, or (iii)
Uncontrollable Force, an equitable adjustment
shall be made in the Contract Price and, if ap
propriate, in the Work Schedule. The equitable
adjustment or , change of schedule shall be
presented to Purchaser in a proposed Contract
Modification or a claim, provided, that Supplier
has promptly notified Purchaser that Supplier
considers that such change, breach or
Uncontrollable Force event will cause such
adjustment or change.
10.5.2 Supplier shall present the Proposed Contract
Modification or the claim within thirty (30)
calendar days after the event which gave rise to
such modification or claim become known to
Supplier. Failure to give such notice shall result
in Supplier's waiver of such claim for additional
compensation. Supplier's acceptance of final
payment shall constitute waiver of all such claims
under the Con tract.
11. PROJECT MANAGEMENT
11.1 PR: The PR shall manage Purchaser's activities associated
with the Contract. Any correspondence to Purchaser of a
technical or administrative nature shall be addressed to the
attention of the PR as provided in Section 36 and shall be
identified by the Contract number.
20
11.2 SR: The SR shall have overall responsibility for directing the Work. Any
correspondence to Supplier of a technical or administrative nature shall
be addressed to the attention of the SR as provided in Section 36 and
shall be identified by Contract number.
11.3 Reports: Within thirty (30) days after execution of the Contract,
Supplier shall furnish to the PR the current status of the events in the
Work Schedule. Thereafter, Supplier shall furnish every month to the PR
a status report show ing the actual status of the Work and each Supplier
performance milestone. If actual completion of Supplier's performance
milestones lag such scheduled dates, an explanation shall accompany the
status report stating the problem area, measures taken, and that will be
taken, to eliminate the problem, and a good faith estimate of whether or
when the item will be back on schedule. Notwithstanding the foregoing,
the PR shall be notified immediately of any potential problem situations
which may affect the timely completion of any of the Supplier
Performance Milestones specified in Section 9.2.2.
11.3.1 In the event Supplier reports made pursuant to this Section
11.3 indicate Supplier's performance milestones as specified in
Section 9.2.2 and Work Schedule may not be met. Supplier shall
upon re quest by Purchaser review allocation of Supplier's
resources and take necessary action, including the assignment
or hiring of addi tional employees, or the retention of
additional Subcontractors. If, in the opinion of Supplier, the
need for such action is due to Pur chaser's failure to meet
Purchaser Delivery Obligations as specified in Section 9.2.3,
Supplier shall submit a Change Order seeking equitable
adjustment within five (5) days of undertaking such correc tive
action unless the Parties otherwise agree.
11.3.2 In the event Purchaser anticipates that a Purchaser delivery
obliga tion may not be met. Purchaser shall timely notify
Supplier of the problem area, the measures Purchaser is taking,
or will take, to provide such Purchaser delivery obligation,
and a good faith estimate of whether or when such Purchaser
delivery obligation will be provided to Supplier.
Notwithstanding the foregoing, the SR shall be notified
immediately of any potential problem situations which may
affect the ability of Purchaser to provide any of the Purchaser
Delivery Obligations specified in Section 9.2.3.
11.4 Records Access: Purchaser, the PR and their agents shall have the right
of access to Supplier's and any Major Subcontractor's facilities and
non-finan cial records directly relating to the Work upon reasonable
notice and during normal working hours to verify conformance to the Work
Schedule and in spect the Work.
21
11.5 Compliance: PR's approval of any interim or partial Documentation or
data submittals shall not relieve Supplier from compliance with all the
require ments of the Contract.
11.6 Executive Committee:
(a) The SR will organize and maintain the minutes of, and the PR and
SR will alternately chair, an Executive Committee, the principal
activities of which will be to review the current status of the
Work, including Supplier's progress toward and completion of its
perfor mance milestones, and to resolve any outstanding issues
escalated by the PR and SR.
(b) The members of the Executive Committee shall include the PR, the
SR, the senior technical manager having responsibility for the
System of each of Purchaser and Supplier, an officer or relevant
executive of Purchaser, Supplier and each Major Subcontractor,
and such other persons as the PR or SR deems appropriate. Each
Party shall cause its appointees to the Executive Committee to
devote such time and attention to the activities of the
committee as may be rea sonably necessary to fulfill its
responsibilities. If an appointee ceases to serve on the
Executive Committee for any reason, a re placement member of
equivalent responsibility will be appointed as soon as
practicable by the applicable Party.
(c) The Executive Committee shall meet as often as necessary, but
not less than bi-weekly by telephone, and once per month in
person. At each meeting, the Executive Committee shall review,
among other things, (i) Supplier's conformance to the Work
Schedule, including but not limited to Supplier's progress
toward and timely completion of its performance milestones, (ii)
Purchaser's conformance to the Work Schedule, including but not
limited to Purchaser's progress toward and timely completion of
its delivery obligations, (iii) Sup plier's current staffing
levels and any anticipated requirements for additional staffing,
(iv) Supplier's anticipated requirements for access to
Purchaser's personnel during the following thirty (30) days, (v)
where necessary, adjustments to the Work Schedule by Supplier
and Purchaser during the following thirty (30) days, (vi)
proposed changes to the DSOWs, the Work, Supplier's performance
milestones. Purchaser's delivery obligations, or the System
function ality or performance requirements or capabilities,
including any outstanding Change Orders, (vii) claims by
Supplier under Section 10.5, and (viii) all other issues
escalated to the Executive Committee by the PR and SR.
22
(d) During the period between meetings of the Executive Committee,
the Parties will work together to implement the agreements
reached by the Executive Committee including, to the extent
necessary, revising the Supplier Performance Milestones,
Purchaser Delivery Obligations, DSOWs, and Work Schedule in
harmony with those agreements.
12. CODES AND STATUTES
12.1 The Work shall comply with all applicable laws, statutes, acts,
ordinances, regulations, codes and standards of federal, state
and local governmental agencies having regulatory jurisdiction.
Any changes to these after January 21, 1997, the date of
Supplier's bid submitted to Purchaser, shall be treated as a
change to the Work and shall be authorized by a Change Order.
12.2 Supplier shall conform to the employment practices requirements of
Execu tive Order 11246 of September 24, 1965, as amended, and
applicable regula tions promulgated thereunder.
13. SUBCONTRACTORS
13.1 Supplier shall at all times be responsible for the Work, and for
the acts and omissions of Subcontractors and persons directly or
indirectly employed by Subcontractor, which acts or omissions,
were they acts or omissions of Supplier or any persons directly
employed by Supplier, would be a breach of the Contract. The
Contract shall not constitute a contractual relationship between
any Subcontractor and Purchaser. Purchaser shall not have any
obligation for payment to any Subcontractor. Purchaser shall have
the right to approve any new Subcontractors who shall have
responsibility for delivery of a Subsystem, provided that such
approval shall not be unreasonably with held.
14. PROPRIETARY INFORMATION AND MATERIAL
14.1 Confidential Material: "Confidential Material" shall mean
business or techni cal information and materials (including but
not limited to plans, drawings, specifications, designs, oral and
visual disclosures, records, source code and object code and
related documentation) that is marked "confidential" or with
words of similar meaning, and provided to one party (the
"Receiving Party") by the other Party. Confidential Material
shall also include, but not be limited to, information received
from a Disclosing Party in connection with the DSOW, the
Contract, or the performance of the Work, information devel oped
expressly for Purchaser under the Contract, and all Licensed
Software
23
and Documentation. Confidential Material shall not include information
that the Receiving Party establishes by substantial evidence:
(i) is or has become generally available to the public other
than by a disclosure by the Receiving Party;
(ii) was possessed by the Receiving Party prior to its
acquisition from the Disclosing Party; provided that the source
of such informa tion was not known by the Receiving Party to be
bound by a confi dentiality obligation to the Disclosing Party
or any other party with respect to such information;
(iii) is received by the Receiving Party from a third party who
has the right to disclose such information;
(iv) has been independently developed by the Receiving Party by
its employees or third parties that have not had access to the
Confi dential Material in the possession of the Receiving Party;
or
(v) is required by law, or by a governmental agency, court or
tribunal, to be disclosed.
14.2 A Receiving Party in possession of Confidential Material from a
Disclosing Party obtained under this Contract, the DSOW or during the
negotiations of this Contract shall hold such Confidential Material in
confidence and, except as permitted in this Section 14, shall not
disclose it, or otherwise make it available to any person or third
party, or use it for the benefit of any third party, without the prior
written consent of the Disclosing Party.
14.3 Each Party agrees that all Confidential Material in its possession that
was received from a Disclosing Party:
(i) shall be used by such Party (including its employees, agents
and consultants) only for the purpose of performing the Work or
in operating and maintaining the System by, or for, the
Purchaser; and
(ii) shall not be reproduced, copied, in whole or in part,
except as specifically directed by the Disclosing Party, or if
necessary for the purposes set forth in (i) above; and
(iii) shall, together with any copies (except backup and
archival copies produced in accordance with a Party's network
information processing procedures or retained in accordance with
applicable law), reproductions or other records thereof, in any
form, and all in-
24
formation and materials developed therefrom, be returned to the
Disclosing Party when no longer needed in connection with the
Contract or in the use of the System, by or for the Purchaser,
except as otherwise expressly agreed by the Parties in writing;
and
(iv) may be disclosed by such Party to employees, consultants
and third persons (including its contractors, subcontractors,
consultants or other person) for the purposes set forth in (i)
above if the Receiving Party obtains from such persons a written
nondisclosure agreement substantively equivalent to this Section
14 to treat such information or material as confidential; and
provided, however, that disclosure of Licensed Software Source
Code or Documentation shall not be made to any such consultants
or third persons unless the Purchaser has first offered to
Supplier, and Supplier has declined, the opportunity to provide
to Purchaser, on substantially the same terms and price offered
by any such consultant or third person, the service or prod uct
for which such a disclosure is necessary.
14.4 Confidential Material furnished to the Receiving Party in
connection with the Contract, shall be protected by the Receiving
Party from disclosure to others with reasonable efforts in that
regard.
14.5 Each Receiving Party agrees that (i) violation of this Section 14
would cause irreparable harm to the Disclosing Party which could
not be adequately reme died by damages, and (ii) injunctive or
other equitable relief is an appropriate remedy for violation of
this Section 14. Receiving Party also agrees to waive any
requirement for the posting of any bond by the Disclosing Party
in connection with such remedy.
14.6 Except as otherwise expressly provided for or incorporated into
the Contract, the confidentiality provisions of this Section 14
shall constitute the sole confi dentiality obligations of the
Parties under the Contract.
15. PROPRIETARY RIGHTS AND LICENSES
15.1 Software License. Supplier hereby grants to Purchaser, upon
Acceptance and final payment or as otherwise provided in the
Contract, including the Annexes thereto, a non-exclusive,
99-year, nontransferable (except pursuant to an assignment under
Section 30) fully paid-up, license to use, reproduce, distrib
ute, and display (all of the foregoing to the extent reasonably
necessary) the Licensed Software in connection with the
authorized use of the System, in cluding, but not limited to,
training, operation, modification, and mainte nance, subject to
the provisions of this Section 15.
25
15.1.1 Purchaser Limitations:
(a) Purchaser shall restrict the installation and use of the Licensed
Software to two sites (logical), and to computer workstations at
participating area control centers and SCADA centers, and will not use
the Licensed Software to provide electric transmission jurisdic tion, or
to extend System applications or functions, beyond the control areas, as
they exist on the Contract Date, of the electric utilities any part of
whose service areas as of the Contract Date are within the
California-Southern Nevada Area of the WSCC Sub- Region as shown on the
map attached hereto as Annex F. There is no geographic limit on
acquisition of transmission grid data or generation control/date
acquisition via computer links to other independent control centers,
ISO's, data banks or other communi cation channels to generators.
(b) Purchaser shall not reverse engineer, disassemble, or decompile any of
the Licensed Software, including but not limited to Licensed Soft ware
provided by Supplier's licensors. Purchaser shall make all reasonable
efforts to prevent any of its employees and subcontractors (other than
those Subcontractors engaged by Supplier) from indepen dently attempting
any such prohibited activities;
(c) Purchaser shall not publish the results of any benchmark tests run on
the Licensed Software;
(d) Purchaser recognizes and acknowledges the licensors of third party
software included in the Licensed Software to be third party bene
ficiaries of this grant of license;
(e) Except as otherwise permitted in Section 30, Purchaser will not assign,
timeshare, rent, or resell the Licensed Software to other persons, use
the Licensed Software to provide consulting services to other persons at
a profit, or reuse or install on third party systems the License
Software;
(f) Purchaser shall protect the Licensed Software from disclosure to others
in accordance with the provisions set forth in Section 14 of this
Contract;
(g) Purchaser shall not permit use of Licensed Software applications that
utilize third party software, as specified in the DSOWs, by more than
the licensed number of concurrent users as specified in the DSOWs or
such additional number of concurrent users for which
26
additional license fees have been paid, or on any basis other than that
for which such third party software has been licensed;
(h) Purchaser shall be bound by the license agreement terms required by
third party software providers of any of the Licensed Software as
specified in the DSOWs which are procured by Supplier in pre packaged
form for delivery to Purchaser under the Contract; and
15.1.2 Purchaser Rights: Purchaser's rights under this grant of license shall
include:
(a) the right to use the Licensed Software by means of, or in
conjunction with, known and future technologies, including but
not limited to known and future platforms, provided that such
technologies (or platforms) have been duly licensed to Purchaser
for such use. Purchaser has paid any required royalties or
license fees associated with such license, and pro vided further
that neither Supplier nor its Subcontractors shall have any
obligation to support the Licensed Software on or in conjunction
with such future technologies (or platforms).
(b) the right to use Upgrades and Enhancements of the Licensed
Software during the life of the System as it may be modified
from time to time;
(c) the right to permit employees, contractors and consultants of
Purchaser to use and reproduce (to the extent reasonably
necessary) the Licensed Software solely in conjunction with or
for the purpose of the performance of services for Pur chaser in
connection with the System;
(d) the right to permit System Users to use the executable form of
the Licensed Software as required for their use of the Sys tem
for its specified purposes;
(e) the right to develop, or have developed on its behalf. Deriva
tive Works, Future Developments, Upgrades, Enhancements or Error
Corrections using the Licensed Software technol ogies; and
(f) the right to use the Licensed Software for performing ISO
functions as such functions are defined in the Trust Agree ment,
legislation, decisions of the CPUC, and the Memoran dum of
Understanding leading to the formation of the ISO as
27
of the Contract Date and subject to the restrictions of Section
15.1.1 (a).
15.1.3 With respect to third party software, nothing herein is to be
con strued as conveying any additional rights beyond that
granted in the applicable third party software license as such
licenses are identified in Annex G.
15.2 Customized Software. To the extent that Customized Software and
any De rivative Works of the Customized Software are licensed by
Supplier to third parties. Supplier agrees to pay Purchaser a
recoupment fee to be assessed on every such license granted;
such Customized Software and applicable recoup ment fees which
are to be negotiated. Such Customized Software and recoupment
fees are identified in Annex B as updated from time to time as
agreed by the Parties.
15.3 Future Developments. Future Developments shall be made pursuant
to a purchase order under terms, including ownership, to be
negotiated on a case- by-case basis.
15.4 Right to Copy the Licensed Software. Purchaser shall be entitled
to make or cause to be made up to the number of copies of the
Licensed Software as specified in the DSOWs for the purposes
permitted hereunder, plus a reason able number of backup and
archival copies. Such copies may be made with out further
permission of Supplier or the copyright owner and regardless of
whether such Licensed Software or other materials are
copyrighted or other wise proprietary. All such copies shall be
subject to the terms of the Contract and to the applicable
license agreement.
15.5 Distribution Rights: Purchaser may distribute authorized copies
of the Li censed Software for purposes permitted hereunder to
Authorized Users (subject to Section 14 obligation to obtain
non-disclosure agreements) by such means or technologies as
Purchaser may choose, including without limitation physical
media, electronic transmission and telecommunications, and known
and future technologies, provided that such distributions are in
accordance with the confidentiality provision of Section 14.
16. SOURCE CODE
16.1 Supplier shall deliver to Purchaser the Source Code for these
portions of the Licensed Software specified in the DSOW.
17. INSPECTION, TESTING AND ACCEPTANCE
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17.1 Inspection: Purchaser shall have the right at all reasonable times to
inspect and witness testing of the System and to verify milestone
completion through visual inspection or review of relevant records.
Supplier shall make all necessary arrangements and provide all
reasonable facilities and access for such inspection and witnessing,
either at Supplier's place of fabrication, manufacture or assembly, or
at any other place where any major assembly of the System is fabricated,
manufactured or assembled. Inspection by Pur chaser shall not be
construed as constituting either a waiver of any rights of Purchaser or
obligations of the Supplier, or Acceptance. Supplier shall give
Purchaser a minimum often (10) calendar days prior notice as to the time
when the System or any major hardware and software component thereof
will be ready and available for inspection.
17.2 Stage I Testing, Placing in Service and Acceptance:
17.2.1 The System shall be tested by Supplier and Purchaser pursuant to
ATPs as provided in the appropriate Stage I DSOWs, to include
Integrated System Stability Testing, Operational Dry Run, and
Availability Test.
17.2.2 Ready To Be Put In Service
17.2.2.1 Upon completion of the Stage I Operational Dry Run, the
System will be deemed to be ready to be put in service
if there are no Critical Variances. "Critical Variances"
are those which (i) render any Stage I System functions
as defined in the DSOWs unavail able, (ii) reduce the
availability of the total System below adequate levels,
(iii) produce erroneous results which affect System
operations, or (iv) render System performance below
adequate levels as specified in the DSOWs.
17.2.2.2 The existence of variances which are not Critical
Variances will not be a basis to consider the System not
ready to be put in service. However, an aggrega tion of
variances which individually are not Critical Variances
but which in combination meet the criteria for a
Critical Variance, will be considered as a Criti cal
Variance for purposes of this section.
17.2.2.3 If, despite the existence of Critical Variances, the
System is actually placed in service by the ISO, it
29
will be deemed to be ready to be put in service for the purposes of this
section.
17.2.3 Acceptance:
Acceptance of the System ("Acceptance") by Purchaser shall occur when
all of the following conditions have been met or waived by the Purchaser
in writing:
17.2.3.1 All tests required by this Contract and the DSOWS, required for
Stage I have been completed in accor dance with the terms and
conditions herein; and
17.2.3.2 The System has been put in service and meets all of the
requirements for Stage I set forth in this Contract and the
DSOWS and operates and performs all func tions as described.
17.2.3.3 All deliverables including instruction books, manuals, and all
other Documentation, have been received by Purchaser in
conformance with this Contract; and
17.2.3.4 Purchaser or PR has notified Supplier in writing of Acceptance.
17.2.3.5 The Work shall be deemed completed, accepted, and ready for
final payment when all of the aforestated conditions have been
met. Upon such Acceptance, Supplier shall invoice Purchaser for
the final payment and any and all outstanding retention.
17.2.4 In the event Purchaser has not notified Supplier in writing of Accep
tance and Supplier believes Section 17.2.3 has been satisfied so that
Acceptance by Purchaser is warranted. Supplier may notify Purchas er in
writing asserting that Acceptance is warranted and Purchaser shall
respond within thirty (30) days, stating whether it agrees with
Supplier. In the event Purchaser determines Acceptance is not yet
warranted, the Parties shall make a good faith effort to resolve such
dispute prior to resorting to dispute resolution pursuant to Section 26.
Pending resolution of such dispute. Purchaser shall otherwise pay
undisputed properly invoiced amounts and Supplier shall contin ue to
perform the Work in accordance with the Work Schedule.
30
17.3 Stage Two Testing and Acceptance: Stage II testing shall be
conducted pursuant to the Stage II DSOWS that will be developed
and agreed to as provided in Section 5.1.2. Acceptance of the
Stage II System shall be accomplished by the same procedures as
required for Stage I acceptance at Section 17.2.3.
18. WARRANTIES
18.1 System Warranty: Supplier warrants that all components of the
System (including but not limited to hardware and Licensed
Software) furnished by Supplier under the Contract, shall:
(a) be free of all liens and other encumbrances of title;
(b) be new as of a date not earlier than the Contract Date,
not from the surplus market, and of the kind and quality
specified in the DSOWs;
(c) perform the functions specified in the Contract; and
(d) conform to all requirements and descriptions, detailed
and general, regarding the System contained in the
Contract and/or the Documen tation.
18.2 Software Warranty: Supplier warrants that the Licensed Software
will:
(a) be in good operating order and conform in all respects
to the Docu mentation, all applicable ATPs and the
Contract;
(b) be compatible with and operate properly on, or with, the
hardware for which it is intended;
(c) be free from viruses or other surreptitious code that
affect the oper ation or the good working order of the
Licensed Software or the System;
(d) not contain any code which would have the effect of
disabling or otherwise shutting down authorized use of
all or any part of the Licensed Software or the System;
and
(e) on or before July 1, 1998, be century compliant for the
year 2000. In order to be century compliant. Supplier
agrees that the Custom ized Software shall be capable of
accounting for all calculations using a century and date
sensitive algorithm for the year 2000 and the fact that
the year 2000 is a leap year, and that Supplier shall
use
31
its best efforts to ensure Licensed Software obtained from third
parties (excluding Customized Software provided by Ernst & Young
LLP which shall be treated for these purposes as being provided
directly by Supplier) shall be so capable. Supplier agrees that
Purchaser may request test scripts from Supplier to validate
that the Licensed Software is century compliant and determine
the latest future date such Licensed Software is able to
process. In the event Supplier is unable to validate the ability
of the Licensed Software to be century compliant on or before
July 1, 1998, Supplier shall, within 10 days of Purchaser's
request, at Purchaser's option, either (a) permit Purchaser to
modify such software so that it is century compliant or (b)
reimburse Purchaser for the costs of obtaining a function
equivalent of such software.
18.3 Hardware Warranty: All Hardware is supplied only as warranted by
the manufacturer. All original manufacturer's warranties
covering the hardware shall be transferred and assigned to
Purchaser upon installation of such hardware at the Jobsite, or
System Premises, as appropriate. Upon expiration of such
warranties, it shall be the responsibility of Purchaser to enter
into a hardware maintenance agreement directly with the
manufacturer or a third party of Purchaser's choosing. Supplier
warrants that all hardware delivered by Supplier under the
Contract shall be free of all liens and encumbrances.
18.4 Documentation Warranty: Supplier warrants that the Documentation
shall be accurate, complete, and as specified in the DSOW.
Supplier shall, at its sole expense, promptly correct any
nonconforming Documentation .
18.5 DISCLAIMERS: SUPPLIER EXPRESSLY WARRANTS THE SYSTEM AND THE WORK
PERFORMED HEREUNDER ONLY AS SET FORTH HEREIN. SUPPLIER MAKES NO
OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED. NO IMPLIED
WARRANTIES, INCLUDING THOSE OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, SHALL APPLY. SUPPLIER'S SOLE OBLIGATION AND
THE EXCLUSIVE REMEDIES OF PURCHASER FOR ANY BREACH BY SUPPLIER
OF ITS WARRANTIES SHALL BE AS EXPRESSLY STATED IN THIS SECTION
18.
18.6 Exclusions: The limited warranty provided in the Contract will
not apply to, and Supplier will have no warranty obligation with
respect to, any defect, malfunction or nonconformity resulting
from (i) improper site preparation or maintenance by or on
behalf of Purchaser (other than by Supplier or its
Subcontractors), (ii) calibration, maintenance, modification or
use by or on behalf of Purchaser (other than by Supplier or its
Subcontractors), (iii) operation of hardware outside of its
published environmental specifications, includ-
32
ing any failure of electrical power, air conditioning or
humidity controls, (iv) hardware, software, interfacing or
supplies installed or supplied by Purchaser, any subcontractor
to Purchaser (other than Supplier or its Subcontractors, or any
System User, or (v) any cause other than ordinary use. In
addition, Supplier will have no warranty obligation to adjust,
repair or replace any component of its adjustment, repair or
replacement is made impractical because of post-installation
changes made by Purchaser or its subcontractors (other than by
Supplier or its Subcontractors) rendering such component
inaccessible for purposes of the required adjustment, repair or
replacement.
18.7 Duration: Any failure of the System, the Documentation or the
Licensed Software to comply with the express warranties set
forth in this Section 18 which is discovered within one year
after acceptance of the portion of the Work affected by such
failure, but not later than the effective date of the
Maintenance Agreement into which Purchaser will enter as
provided in this Contract, shall be corrected by Supplier in a
manner approved by the Purchaser, such approval not be
unreasonably withheld, at Supplier's sole expense with due
diligence and dispatch as required to make the System conform to
the warranties stated in this Contract, including, but not
limited to, any necessary adjustments, modifications, repair or
replacement, changes to the Licensed Software and Documentation,
and including all necessary parts, transportation charges and
labor as may be necessary. Such correction shall be Purchaser's
exclusive remedy and Supplier's sole liability for any such
breach of warranty.
18.8 Warranty Performance: Supplier shall perform such corrective
Work at the facilities where the System is installed to minimize
the down time of the System. Such Work shall be performed as
follows: For any defects, malfunctions or nonconformities that
prevents the proper use of the System, Supplier shall provide
diagnostic information within four (4) hours after the
Purchaser's problem call, and, if correction at the Jobsite is
required, shall dispatch personnel within twenty-four (24) hours
after the Purchaser's problem call to perform such corrective
Work. For minor defects, malfunctions or nonconformities which
do not affect the use or operation of the System, Supplier may
group the correction of such defects, malfunctions or
nonconformities as agreed to by the Purchaser.
18.9 Cover: If Supplier fails to promptly make the necessary
corrections of defects, malfunctions or nonconformities
discovered during the warranty period, the Purchaser, upon
notification to Supplier, may perform or have performed such
necessary warranty correction work and Supplier shall pay the
Purchaser for all such costs reasonably incurred including, but
not limited to, direct labor programming, consulting, material,
subcontracts, and other related costs.
33
18.10 Services: Supplier warrants that all Work performed by Supplier
pursuant to the Contract shall be performed with the degree of
skill of the trade and care required by good and sound
procedures and practices prevailing at the time when the
services are performed and shall meet the requirements of the
DSOW. In the event that any services performed pursuant to the
Contract are discovered within ninety (90) days after completion
of such services not to comply with the foregoing warranty.
Supplier shall immediately correct and/or re-perform such
services.
18.11 Conditions of Warranties: The warranties set forth in this
Section 18 are subject to the following conditions applicable to
the item for which a breach of warranty is claimed:
18.11.1 The Purchaser shall give Supplier written notification
(or telephone notification followed up in writing) of
any failure to comply with a warranty within a
reasonable time after the Purchaser becomes aware of
such failure.
18.11.2 The Purchaser shall have the right to continue to
operate the System, or any part thereof which may
require warranty correction or repair, until such time
as the Purchaser elects to remove such System or part
thereof from service; provided that. to the extent
Supplier would not otherwise be liable under the
Contract, Supplier shall have no liability or obligation
to Purchaser for any damage to the System or liabilities
caused by such continued operation.
18.11.3 The Purchaser shall operate and maintain the System in
accordance with the operation and, if applicable,
maintenance procedures agreed upon by the Parties;
provided and on condition that. Supplier shall furnish
to Purchaser such operating and maintenance procedures
clearly stated in writing and properly identified.
18.11.4 Final payment by the Purchaser shall not release
Supplier from any of its warranty obligations.
19. SUPPLIER'S SYSTEM SUPPORT
19.1 Supplier or Major Subcontractors shall make available
replacement parts, expansion modules, hardware and software
support on System components for a period of up to 10 years,
provided that Purchaser shall have purchased, and Supplier put
into effect, the Software Maintenance Agreements with Supplier
or Major Subcontractor and appropriate maintenance agreements
with hardware manufacturers through the same period. In the
event, however, that certain of these devices are not available
due to obsolescence, and duplicates
34
cannot be purchased at a reasonable price in comparison with
that of the original unit, the Supplier may, with prior
Purchaser approval not be unreasonably withheld, supply a device
which is nearly similar and provides comparable services with
functionality and responsiveness comparable to the obsolete
device.
19.2 If, for administrative reasons. Purchaser orders replacement
parts for the System under a new purchase order instead of under
the Contract, Supplier or Major Subcontractors agrees to sell
such replacement parts under these general terms and conditions
as set forth in the Contract.
19.3 Supplier further agrees that, if Supplier or Major
Subcontractors cannot or no longer fulfills its maintenance and
spare part obligations. Supplier or Major Subcontractor shall
use it best efforts to provide or secure for Purchaser the
necessary maintenance services and, on a form, fit, and function
basis, the required spare parts,
19.4 Supplier shall not unreasonably interfere with normal operation
of the facilities where the System is installed, or with the
equipment, or the work of any contractors or subcontractors on
the System Premises. When Supplier anticipates unavoidable
interference, it shall so notify the PR as soon as possible, but
at least fifteen (15) days in advance. The PR shall determine,
in advance, whether such interference is unavoidable and shall,
if required, establish the reasonably necessary procedures under
which the interference shall be allowed. The PR shall have final
determination of priorities in case of conflicts with operations
or work of others. Supplier shall not operate any of the ISO's
equipment (other than the affected portions of the System if
necessary at the sole discretion of Purchaser to provide the
System support) or control devices or those of any other
contractor or subcontractor to Purchaser on the System Premises.
20. INFRINGEMENT PROTECTION
20.1 Supplier shall indemnify and save harmless the Purchaser and its
successors, permitted assignees and transferees and Authorized
Users (all herein referred to individually as "Infringement
Indemnitee" and collectively as "Infringement Indemnitees")
against any and all liabilities, judgments, costs, expenses, and
damages, which may be awarded against any of the Infringement
Indemnitees in any suit, action or proceeding brought against
any of the Infringement Indemnitees for infringement or alleged
infringement of any Intellectual Property Right in a court of
competent jurisdiction, arising out of the use by the
Infringement Indemnitee(s) of the System or any part thereof, in
the ordinary course of its use for the purposes hereunder
specified or the exercise of any rights granted under Section 15
hereof. If any action, claim
35
or suit for infringement of any Intellectual Property Right or
other proprietary right, or royalty or license agreement, be
made or instituted against the Infringement Indemnitee(s) as
above specified on account of the use of the System, (or any
part thereof) or the exercise of the granted rights, Supplier
shall assume the defense of such action, claim or suit and all
expenses incident to the defense thereof.
20.2 Supplier shall have no liability under this section and
Purchaser shall indemnify and save harmless Supplier: (i) for
any claim of infringement based on the use of any superseded or
altered release of any Licensed Software provided or obtained by
the Purchaser from parties other than the Supplier if the
infringement would have been avoided by the use of a current
unaltered release of the Licensed Software (or component
thereof) provided to Purchaser by Supplier; (ii) for any claim
of infringement based on Purchaser's modification of the System
or any component thereof; (iii) for any claim of infringement
based on Purchaser's use of the System in conjunction with any
product or software not furnished by Supplier or for a purpose
not specified in the DSOWs; or (iv) in the event the violation
of such third party rights were due to directions by Purchaser
to adopt specific hardware or software items or configurations
that had not been proposed by the Supplier to meet the
requirements of the DSOWs. In assuming the defense of such
claim(s) or suit(s) Purchaser shall have control thereof and
Supplier shall provide Purchaser with the assistance,
information, and authority necessary to perform its obligations
under this Section. The Infringement Indemnitee(s) shall be kept
fully informed as to the progress thereof and have the right to
confer about and give advice and assistance regarding the same.
20.3 Consistent with the scope of Supplier's obligations as set forth
in Section 20.1, in the event that (a) there is an adjudication
that the System or any component or its use constitutes
infringement, or (b) the use or sale of any such System or
component is enjoined. Supplier shall or as soon as possible and
in any event within thirty (30) days from the occurrence of any
of the aforestated events, at its option and expense either:
(i) Procure for the Purchaser the right to continue
using the System;
(ii) Replace the System or infringing components with
non-infringing ones providing service equal to that
contracted for hereunder; or
(iii) Modify the System or infringing components thereof
so that they become non-infringing while providing
service equal to that contracted for hereunder.
36
20.4 Supplier's obligations under Section 20.3 shall be in addition
to those under Section 20.1 but together constitute Supplier's
entire liability and Purchaser's exclusive remedy for
infringement of any Intellectual Property Rights.
21. FITNESS FOR DUTY
21.1 Supplier and its Subcontractor personnel on the Jobsite shall:
(a) report for work in a manner fit to do their job;
(b) not be under the influence of or in possession of any
alcoholic beverages or of any controlled substance
(except a controlled substance as prescribed by a
physician so long as the performance or safety of the
Work is not affected thereby); and
(c) not have been convicted of any serious criminal offense
which may have an adverse impact on Purchaser.
21.2 Searches by Purchaser's authorized representatives may be made
of lockers, storage areas, vehicles, persons or personal effects
on Purchaser' s-owned or leased property at various times
without prior announcement. Such facility inspections may be
conducted using detection dog teams to search work areas and
other common areas in order to detect evidence of unlawful drug
use or other prohibited items (pyrotechnics, explosives,
firearms, weapons, or facsimiles thereof, alcohol and illegal
drugs). Prohibited Items must not be " brought onto or kept on
such property.
21.3 Supplier shall (i) advise its personnel of these requirements
before they enter on the Jobsite or System Premises, as
appropriate, (ii) notify Purchaser of any violation of these
requirements, and (iii) unless the Parties otherwise agree,
immediately remove from the Jobsite or System Premises, as
appropriate, any person determined to be in violation of these
requirements. Supplier shall impose these requirements on its
Subcontractors. The aforestated requirements apply solely to
Jobsites and System Premises, as appropriate, and shall not be
construed to reflect the employment or contractual relationships
of Supplier, its employees, agents or Subcontractors.
22. INDEMNITY
22.1 Supplier shall, at its own cost, defend, indemnify and save
harmless Purchaser, and its officers, agents, employees, and
assignors, assignees, and successors in interest ("Indemnified
Parties") from and against any and all liability, damages,
losses, claims, demands, actions, causes of action, costs
including attorney's fees and expenses, or any of them,
resulting from the death or
37
injury to any person or damage to or losses of any property arising out of,
and during, the Supplier's performance except to the extent caused by the
negligence or willful misconduct of such Indemnified Parties.
22.2 Supplier shall save harmless Purchaser, its assignees and successors in
interest for any and all damages, costs and expenses (including property
replacement costs) arising from damage to or loss of Purchaser's property
(which for purposes of this Section 22.2 shall include but not be
limited to the System, the System Premises and any equipment on the System
Premises) arising out of and during the Supplier's performance of the
Contract, except to the extent caused by the negligence or willful
misconduct of Purchaser.
22.3 The indemnities set forth in this Section 22 shall not be limited by the
insurance requirements set forth in Section 23.
22.4 Purchaser shall, at its own cost, defend, indemnify and save harmless
Supplier, and its officers, agents, employees, assignors, assignees,
and successors in interest ("Indemnified Parties") from and against any and
all liability, damages, losses, claims, demands, actions, causes of
action, costs including attorney's fees and expenses, or any of them,
resulting from the death or injury to any person or damage to or losses of
any property arising out of or in connection with the Purchaser's
performance, or Purchaser's failure of performance of the Contract,
however caused, except to the extent caused by the negligence or willful
misconduct of such Indemnified Parties.
22.5 Supplier's indemnity obligations set forth in this Section 22 shall not
apply to liabilities, damages, losses, claims, demands, actions, causes of
action, costs, or any of them, arising from claims asserted by third
parties, based on Purchaser's use of the System, and Purchaser shall
indemnify and defend Supplier ("Indemnified Party") from and against
any and all such claims.
22.6 The indemnity obligations contained in this Section 22 are contingent upon
the Indemnified Parties giving the indemnifying party prompt written notice
of any such claim, full cooperation in the defense of any such claim, and
the right to defend against any such claim with counsel of the indemnifying
party's choosing and to settle or compromise any such claims as the
indemnifying party deems appropriate, subject to the payment by the
indemnifying party of any settlement or compromise amount. Failure to do so
shall relieve the indemnifying party of any obligation or liability
pursuant to this Section 22. Except to the extent costs were reasonably and
necessarily incurred prior to prompt notice being given to the indemnifying
party, the Indemnified Parties shall not incur, nor shall the
indemnifying party be liable for, any of the Indemnified Parties' costs or
expenses related to such claims, without the consent of the indemnifying
party. Indemnified Parties shall have the right to
38
employ their own counsel for any such claim, but the fees and expenses of
such counsel shall be borne by the Indemnified Parties.
23. INSURANCE
23.1 Supplier shall maintain for the Work, and shall require that each
Subcontractor performing any service at the Jobsite or System
Premises, as appropriate, (except material delivery only) (hereinafter
referred to as "Jobsite Subcontractor") maintain, at all times
during the Work and at its own expense, valid and collectible
insurance as required below. This insurance shall not affect
Supplier's liability under the indemnity provisions of Section 22, and
shall not be terminated, expire, nor be materially altered without
giving thirty (30) calendar days' advance written notice to Purchaser.
23.1.1 As evidence that policies do in fact provide the required coverages
and limits of insurance listed below and that such coverages and
limits are in full force and effect. Supplier shall furnish to
Purchaser certificates of insurance on forms reasonably acceptable to
Purchaser. Supplier shall require each Jobsite Subcontractor to
provide such certificates of insurance to Supplier. Certificates shall
be furnished and made available within thirty (30) days after
execution of the Contract or subcontract but in any event prior to
start of the Work.
23.1.2 Any other insurance carried by Purchaser, its officers, agents, and
employees which may be applicable shall be deemed to be excess
insurance and Supplier's insurance shall be deemed primary for all
purposes despite any conflicting provision in Supplier's policies to
the contrary, solely to the extent of Supplier's indemnity obligations
under the Contract.
(a) Worker's Compensation with statutory limits, as required by the
state in which the Work is performed, and Employer's Liability
Insurance with limits of not less than $1,000,000. Carriers
furnishing such insurance shall be required to waive all rights
of subrogation against Purchaser, its officers, agents, employees
and other contractors and subcontractors.
(b) Commercial General Liability Insurance, written on an "oc
currence" basis, products/completed operations, broad form
property damage liability, and contractual liability. Such
insurance shall bear a combined single limit per occurrence and
annual aggregate of not less than $5,000,000, exclusive of
defense costs as respects products and completed operations, and
a combined single limit per occurrence and annual
39
aggregate of not less than $5,000,000, exclusive of defense costs
as respects all other coverages. Such insurance shall: (i)
acknowledge Purchaser, its officers, agents and employees as
additional insureds as regards Supplier's acts or omissions; (ii)
be primary for all purposes; (iii) contain standard cross-
liability or severability of interest provisions; and (iv)
contain no explosion, collapse, or underground exclusions, to the
extent of Supplier's indemnity obligations under the Contract.
(c) If Supplier elects, with the concurrence of Purchaser, to use a
"claims made" form of Commercial General Liability Insur<172>
ance, then the following additional requirements shall apply: (i)
the retroactive date of the policy shall be at least one (1) day
prior to the commencement of the Work; and (ii) cover<172> age
for the Work shall be maintained in effect for a period of not
less than two (2) years after completion of the Work, or a
supplemental extended reporting period of not less than two (2)
years after completion of the Work shall be included. These
requirements shall ensure that such insurance shall enable
Purchaser to recover for claims reported at any time commencing
with the start of Work and continuing to a date not less than two
(2) years following completion of the Work.
23.2 Each Party shall report immediately to Purchaser and confirm in
writing any injury, loss, or damage incurred by either Party or
Jobsite Subcontractors in connection with the Work, or its receipt or
notice of any claim by a third party, or of any occurrence that
might give rise to such claim.
23.3 If Supplier fails to comply with any of the provisions of this
Insurance Section, Supplier shall, at its own cost, defend, indemnify
and hold harmless Purchaser, its officers, agents, employees,
assignors and assigns, and predecessors and successors in
interest, from and against any and all liability, damages, losses,
claims, demands, actions, causes of action, costs including attorney's
fees and expenses, or any of them, resulting from the death or injury
to any person or damage to any property to the extent that Purchaser
would have been protected had Supplier complied with all of the
provisions of this section.
24.SAFETY NOTIFICATIONS
24.1 Supplier shall provide (obtain from its Subcontractors or other
appropriate affiliates) a Material Safety Data Sheet ("MSDS") for each
chemical product
40
(e.g., lubricants, solvents, paints, cleaners, inhibitors, etc.) prior
to its use at the Jobsite or System Premises, as appropriate, and for
any such product that may be contained in any equipment furnished to
Purchaser as a part of the Work.
24.1.1 Such MSDSs shall be maintained at the Jobsite or System
Premises, as appropriate, shall be subject to review by
Purchaser, and shall be turned over to Purchaser upon acceptance
of the Work and prior to Contractor's leaving the Jobsite or
System Premises, as appropriate.
24.1.2 A revised MSDS shall also be obtained whenever the formulation
or evaluation of a product is changed.
24.1.3 All MSDSs shall comply with the Federal (29 C.F.R.ss.1910.1200)
and California (8 CACss.5194) OSHA Hazard Communication
Standards without exception, and shall also include, but not be
limited to the following data: (If an item is not applicable.
Contractor shall so state.)
Date of MSDS(s) preparation.
Contract number(s).
Supplier's and manufacturer's catalog number for the
product and its container size and type.
All MSDS's shall be addressed to:
Mr. Eduardo Sugay
DE&S
5000 Executive Parkway - Suite 300
San Ramon, CA 94583
24.2 Container Labeling Requirements:
24.2.1 Prior to shipment. Supplier shall, and shall require its
Subcontractors to, label all containers of hazardous materials,
as defined by the State of California's and the Federal
Government's OSHA programs. Such labels shall include, as a
minimum:
1. The specific chemical identity of the substance. If the
product is a mixture, list the components present in
concentrations of 1% or more, or 0.1% or more if a
carcinogen.
41
2. The name and address of the manufacturer, importer or other
distributor.
3. Warning statements of the substance's Flammability,
Corrosivity, Toxicity, Reactivity, Primary Routes of Bodily
Entry and Target Organs affected.
4. Emergency and first aid procedures.
5. The potential for fire and/or explosion.
6. Any generally known precautions for safe use and handling of
the substance.
24.2.2 These labels shall be clearly legible and capable of withstanding
normal shipping and handling while maintaining legibility of ALL
information printed thereon.
24.2.3 Any container at the Jobsite or System Premises, as
appropriate, without said label, or with illegible information
thereon, is subject to rejection and, at the sole discretion of
Purchaser, may be removed from the Jobsite or System Premises, as
appropriate, and disposed of at an approved dump site at
Supplier's expense.
24.3 California's Toxic Enforcement Act Requirements: Supplier is hereby
warned that exposure to chemicals known to the State of California to
cause cancer, birth defects, or other reproductive harm may occur at
Purchaser's facilities. Upon request. Purchaser shall make available
to the Supplier, and its employees, a Material Safety Date Sheet
(MSDS) for such chemical exposures at the Jobsite or System Premises,
as appropriate. Supplier shall inform its Subcontractors of the above
information. From the time that Supplier enters Purchaser facilities
or begins Work until the time the Work is completed, Supplier shall,
and shall require its Subcontractors to, issue warnings to
personnel on the Jobsite or System Premises, as appropriate, the
public, and Purchaser's personnel about exposure to chemicals known to
the State of California to cause cancer, birth defects, or other
reproductive harm. Supplier shall warn Purchaser of any exposure which
may continue after Supplier has completed the Work. Such warnings may
take the form of a Material Safety Data Sheet.
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25. LIMITATION OF LIABILITY
25.1 Purchaser, its agents, employees, contractors, subcontractors or
consultants shall not be liable for indirect, incidental, punitive,
special, or consequential damages, whether such damages arise in
contract, warranty, indemnity, tort (including negligence), strict
liability in tort or otherwise, including, but not limited to, lost
profits, and damages arising out of commitments to contractors, or
personal service contracts.
25.2 Supplier, its agents, employees, subcontractors, suppliers, or
licensors shall not be liable for any other indirect, incidental,
special or consequential damages of any nature or kind due to any
cause whatsoever, whether arising in contract, warranty, indemnity,
tort (including negligence), strict liability in tort or otherwise
including but not limited to loss of revenue or profit, loss of use,
loss of power, damages suffered by Purchaser, any System User or any
customer of the foregoing for service interruptions due to the
marketing, sale, transmission of, or failure to market, sell or
transmit, electricity, or for costs of capital or costs of replacement
power.
25.3
25.3.1 Stage I: For Stage I work, notwithstanding anything to the
contrary herein. Supplier's, its agents', employees',
subcontractors, suppliers' and licensor's cumulative liability
hereunder, on any and all claims, for any loss or damage
arising out of, connected with, or resulting from this
Contract, or from the performance or breach thereof, shall be
limited to greater of (i) $10,000,000 or (ii) the portion of
the Contract Price actually paid solely for Stage I Work up to
one hundred percent (100%) of the Contract Price for
Stage I Work.
25.3.2 Stage II: For Stage II Work, notwithstanding anything to the
contrary herein. Supplier's, it agents', employees',
subcontractors' suppliers' and licensors' cumulative liability
hereunder, on any and all claims, for any loss or damage
arising out of, connected with or resulting from this Contract,
or from the performance or breach thereof, shall be limited to
the greater of (i) $1,500,000 or (ii) the portion of the
Contract Price actually paid solely for Stage II Work up to
one-hundred percent (100%) of the amount of the Contract Price
paid for Stage II Work.
25.4 In no event shall Supplier, its agents, employees. Subcontractors,
suppliers or licensors be liable for preexisting conditions, delays,
curtailment of plant operations, process failure, pollution or
environmental damage or fines levied
43
by regulatory agencies as a result of pollution, occupational disease
or toxic torts.
26. DISPUTES
26.1 Generally: Any dispute pertaining to the Contract, which cannot be
resolved between the SR and the PR shall be referred to Purchaser and
the Supplier for resolution. If the Parties cannot reach an agreement
within a reasonable period of time, the dispute shall be resolved as
provided in Section 26.2. Pending resolution of a dispute, Supplier
shall continue to perform the Work as directed by the PR and Purchaser
shall continue to make payments for the undisputed items as set forth
in the Contract.
26.2 Negotiations: The Parties shall attempt in good faith to resolve any
dispute arising out of, or relating to, this Contract promptly by
negotiations between an officer of Purchaser or his or her designated
representative and an officer or executive of similar authority
designated by Supplier. Either Party may give the other party written
notice of any dispute. Within twenty (20) days after delivery of said
notice, the designated persons shall meet at a mutually acceptable
time and place, and thereafter as often as they reasonably deem
necessary to exchange information and to attempt to resolve the
dispute. If the matter has not been resolved within thirty (30) days
of the first meeting, either Party may initiate a mediation of the
controversy.
26.2.1 All negotiations and any mediation conducted pursuant to this
clause are confidential and shall be treated as compromise and
settlement negotiations, to which Section 1152.5 of the
California Evidence Code shall apply, and Section 1152.5 is
incorporated herein by reference.
26.2.2 Notwithstanding the foregoing provisions, a Party may seek a
preliminary injunction or other provisional judicial remedy
if in its judgment such action is necessary to avoid
irreparable damage or to preserve the status quo.
26.2.3 Each Party is required to continue to perform its obligations
under this Contract pending final resolution of any dispute
arising out of or relating to this Contract.
26.3 Resolution of Disputes Through Arbitration
26.3.1 Any dispute arising between the Parties concerning contract
terms or conditions including, but not limited to,
specifications, performance criteria or pricing, or performance
thereof, arising under or relating
44
to the performance of this Contract which dispute cannot be
settled by the Parties within a reasonable time, not to exceed
thirty (30) days after the meeting described in Sections 26.1 or
26.2 above, may be submitted by either Party to binding
arbitration.
26.3.2 All disputes to be arbitrated shall be submitted to and decided
by a board of three arbitrators, one to be appointed by Purchaser
and one by Supplier, provided that both such arbitrators shall be
professionals in the technical area in dispute; and the two
arbitrators so appointed shall appoint a third arbitrator,
who shall be an attorney experienced in the resolution of
software systems disputes. If either Party shall fail or refuse
to appoint an arbitrator within thirty (30) days after written
notice has been given to it by the other Party naming the
latter's arbitrator, the Party giving such notice shall have the
right to request the Presiding Judge of the Superior Court of the
State of California in and for the City and County of Sacramento
to appoint an arbitrator for the other Party so in default. If
the two arbitrators thus chosen shall be unable to agree upon the
third arbitrator, such arbitrator shall be appointed, upon
application of either Party, by the Presiding Judge of the
Superior Court of the State of California in and for the City and
County of Sacramento. The arbitration will be conducted in
accordance with the procedures of this Section 26.3.2 and the
Commercial Arbitration Rules of the American Arbitration
Association (the "AAA Rules"). In the event of a conflict, the
provisions of this Contract shall control. Any issue concerning
the extent to which any dispute is subject to arbitration, or
concerning the applicability, interpretation or enforceability of
these procedures, including any contention that all or part of
these procedures are invalid or unenforceable, shall be governed
by the Federal Arbitration Act and resolved by the arbitrators.
No potential arbitrator may serve on the panel unless he or she
has agreed to be bound by these procedures. The arbitrators shall
have no power to award (i) damages inconsistent with the Contract
or (ii) punitive damages or any other damages not measured by the
prevailing party's actual damages unless expressly provided for
in the Contract. In no event, even if any other portion of these
provisions is held to be invalid or unenforceable, shall the
arbitrators have power to make an award or impose a remedy that
could not be made or imposed by a court deciding the matter in
the same jurisdiction. No discovery shall be permitted in
connection with the arbitration unless it is expressly
authorized by the arbitration panel upon a showing of substantial
need by the party seeking discovery. All aspects of the
arbitration shall be treated as confidential. Neither of the
parties nor the arbitrators may disclose the existence, content
or results of the
45
arbitration, except as necessary to comply with legal or
regulatory requirements. Before making any such disclosure, a
party shall give written notice to all other parties and shall
afford such parties a reasonable opportunity to protect their
interests. The decision of a majority of the arbitrators, after a
hearing at which both Parties shall have an opportunity to be
heard and to introduce evidence, shall be binding upon the
Parties hereto. Any award by such an arbitral proceeding shall
be binding on both Parties and judgment thereon may be entered
in any court of competent jurisdiction.
26.3.3 The cost of the arbitrator appointed by Purchaser shall be
borne by Purchaser; the cost of the arbitrator appointed by
Supplier shall be borne by Supplier; and the cost of the third
arbitrator and any attendant costs of arbitration shall be borne
equally by Purchaser and Supplier. Except as otherwise
specifically provided in this Section, any arbitration shall be
subject to the provisions of Title 9 of Part 3 of the Code of
Civil Procedure of the State of California. Each Party shall bear
its own attorneys' fees and other expenses in connection with
any such arbitration.
26.4 Jurisdiction, Choice of Litigation Location: Any suit or action
permitted to be brought between the Parties pursuant to the provisions
of this Contract shall be litigated only in, to the extent permitted
by law, the jurisdiction of any state or federal court sitting in the
State of California and the parties unequivocably agree that all
claims in respect of such action or proceeding may be heard and
determined in such court.
27.TERMINATION AT WILL
27.1 Purchaser may, at any time, terminate for convenience (a "Termination
at Will") of Purchaser the Contract, the Work, or any portion of the
Work, by written notice to Supplier. Such notice shall be confirmed by
a Change Order.
27.2 Upon receipt of such notice of Termination at Will, Supplier shall
stop performance of the terminated Work and take action as directed by
Purchaser to carry out such termination.
27.3 In the event of a Termination at Will, Purchaser shall pay to Supplier
(i) the payments due for Work completed and for costs incurred by
Supplier for Work in progress, including overhead and reasonable
profit on such amounts; (ii) all costs reasonably incurred by Supplier
in carrying out such Termination at Will, and (iii) all costs
reasonably incurred by Supplier in the deacti- vation and redeployment
of resources that had been committed to the Work,
46
less any amounts for salvage or credit for Supplier's use of any
materials or equipment purchased or manufactured prior to
termination, and for Supplier's stock items. Supplier shall
furnish reasonably sufficient supporting data for any claims
under this section, including the supporting data of its Major
Contractors corresponding to the foregoing cost categories.
27.4 Purchaser shall take possession of and title to any System
components or materials that have been fabricated or procured,
and shall receive a license (in accordance with the provisions of
Section 15) to any Licensed Software to the extent included in
the termination payment.
27.5 The provisions of this Section 27 shall be Supplier's sole remedy
for Termination at Will of the Contract or the Work or any
portion thereof.
27.6 Any termination under this Section 27 shall be without prejudice
to any other rights of either Party which may have accrued prior
to such termination.
28. DEFAULTS AND TERMINATION FOR CAUSE
28.1 If Supplier: (i) fails to perform any of its material obligations
under the Contract; (ii) fails to give Purchaser adequate
assurance of contract-compliant performance within fifteen (15)
days after written demand by Purchaser when reasonable grounds
arise for insecurity that contract provisions and deadlines will
be met; (iii) fails to address a failure of performance
immediately or cure a failure of performance within thirty (30)
calendar days from Purchaser's notice of such failure; (iv)
fails to meet the Supplier Performance Milestones or the Work
Schedules, or to deliver the System or components thereof on or
before the specified delivery dates and such failure is
reasonably expected to adversely affect the completion of the
system in accord with the Work Schedule; or (v) if all of
the conditions of Acceptance have not been met on or before the
date specified in the DSOWs, then Purchaser may (a) withhold
payment of any further moneys which may be due Supplier until the
default is cured, if a cure period is allowed by Purchaser,
and/or (b) declare Supplier to be in default of the Contract by
notice to Supplier in writing; and Purchaser shall in
either case be entitled to terminate the Contract for cause (a
"Termination for Cause"), in whole or in part. Any termination
pursuant to this Section 28 shall not be deemed a Termination at
Will within the meaning of Section 27; except that a regulatory
or legislative action which has the effect of altering the Work
Schedule for, or obviates the need for continuation of, the
Contract shall be deemed a Termination at Will. Purchaser shall
be entitled to damages and costs as provided by law. In no event
shall Purchaser be liable for lost or anticipated profits,
for overhead costs, or for any other charges or costs arising out
of Purchaser's Termination for Cause of the Contract or any
portion thereof.
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28.2 In the event a notice of Termination for Cause has been delivered by
Purchaser pursuant to Section 28.1, Supplier shall stop the Work (or the
portion thereof terminated by Purchaser) and return all data pertaining
to the terminated Work provided by Purchaser. Purchaser may, consistent
with Purchaser's obligation to mitigate its damages, require Supplier to
proceed as follows:
28.2.1 Supplier shall, upon payment in full for all parts of the
System which have been completed, deliver to Purchaser all
completed portions of the System and Documentation therefor,
including the Licensed Software, and deliver to Purchaser all
Licensed Software. In such event Purchaser shall have the
right to have the System completed by others and to use the
Licensed Software for that purpose, and any additional
cost associated with the completion shall be reimbursed by the
Supplier together with damages and costs provided by law; or
28.2.2 Supplier shall remove the System or parts thereof as applicable
at Supplier's expense, and shall refund to Purchaser all
payments made by Purchaser to Supplier relating to the
terminated Work. The appropriate refund shall be paid by
Supplier to Purchaser, with interest accrued and compounded
daily at a rate of two percent (2%) above the reference rate
charged by the Bank of America, NT&SA, San Francisco
California, on the first day of each month for that month or
portion thereof. Full refund shall be paid within the thirty
(30) consecutive calendar days immediately following the date
of the written notice of termination from Purchaser, with
interest accrued from the date that the payment was made by
Purchaser to Supplier.
28.3 Liquidated Damages:
28.3.1 In the event the Stage I System is not ready to be put in
service on or before January 1, 1998, then the Purchaser shall
have the right to collect from Supplier as liquidated damages
the sum of $40,000 per day for each day until the Stage System
is ready to be put in service, but not more than
$2,400,000. The collection of such liquidated damages
shall be Purchaser's exclusive remedy, and Supplier's sole
liability, for damages for late completion of the Stage I
System.
28.3.2 In the event the Stage II System is not ready to be put in service on or
before January 1, 1999, then the Purchaser shall have the right to
collect from Supplier liquidated damages in a sum to be agreed by
48
the Parties and stated in the Stage II DSOWs. The collection of such liquidated
damages shall be Purchaser's exclusive remedy, and Supplier's sole liability,
for damages for late completion of the Stage I System.
29. WAIVER
29.1 None of the provisions of the Contract shall be considered waived
by either Party unless such waiver is specifically stated in
writing, and signed by the authorized representative of the Party
waiving the provisions).
30. ASSIGNMENT
30.1 Subject to Section 30.4 of the Contract neither Party shall
assign the Contract or any part thereof or interest therein,
without the prior written consent of the other Party, and any
assignment without such consent shall be void and of no effect.
ABB shall provide that Ernst & Young LLP a subcontractor to ABB
shall not assign its subcontract without the prior written
consent of Purchaser.
30.2 Supplier shall notify Purchaser prior to the sale or transfer of
control of its business to another entity. Neither ABB or Perot
Systems may assign, sell or otherwise alienate or reduce its
interest in Supplier without the prior express written consent of
Purchaser. Supplier shall notify Purchaser prior to the sale or
transfer of control of Ernst & Young LLP to another entity.
30.3 If Supplier enters into any voluntary or involuntary
receivership, bankruptcy or insolvency proceedings, or
voluntarily leaves the business of providing the System,
Purchaser shall have the right to terminate the Contract under
the default provisions set forth in Section 28.
30.4 Purchaser reserves the right to assign and delegate its entire
rights, obligations and interest, under this Contract, or any
portion thereof, to a successor entity, including but not limited
to the ISO contemplated by the Restructuring Decision, as
may be required by the FERC or CPUC. Such an assignment or
delegation shall become effective upon notice thereof to the
Supplier.
30.5 Upon any valid assignment or delegation hereunder, the assignee
shall thereby assume all rights and obligations of the assignor
and the assignor shall be relieved of all obligations to
supplier, including those occurring before the assignment.
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31. CONFLICT OF INTEREST/BUSINESS ETHICS
31.1 No Existing Conflicts Of Interest: Supplier represents and
warrants that it: (i) has no existing business or other
relationship, contract or employment which could result in a
material conflict with the best interests of Purchaser or in any
way materially compromise the Work to be performed under the
Contract, (ii) will perform the Work in accordance with the
Contract without regard to any relationship or obligation that
Supplier or any Subcontractor may have with any third party not a
party hereto; and (iii) will disclose in Annex H any such
relationships or obligations which may reasonably present the
appearance of such a conflict of interest. Examples of such
conflicts include, but are not limited to, having any direct or
indirect affiliation with, or ownership interest in or by, any
other Party or the Trustee or any member or member-representation
of any advisory committee or advisor of the Trustee.
31,2 Reasonable Care: Supplier shall exercise reasonable care and
diligence to prevent any actions or conditions which could result
in a conflict of interest within the meaning of Section 31.1.
31-3 Other Employment: During the term of the Contract, Supplier,
Major Subcontractors and Ernst & Young LLP, a Subcontractor, will
not accept any employment or engage in any work which creates a
material conflict of interest with Purchaser or in any way
materially compromises the Work to be performed under the
Contract, within the context of their policies and rules relating
to business ethics.
31.4 Gifts: Supplier, its employees, agents or Subcontractors shall
not offer or cause to be offered gifts, entertainment, payments,
loans or other services, benefits or considerations of more than
a nominal value to Purchaser, the Trustee or any advisor or
advisory committee to the Trustee, or to any of their employees,
families, vendors, or subcontractors.
31.5 Accurate Documentation: All financial statements, reports,
billings, and other documents rendered shall properly reflect the
facts about all activities and transactions handled for the
account of Purchaser.
31.6 Notification: Supplier shall immediately notify Purchaser of any
and all violations of this Section 31 upon becoming aware of such
violation.
31.7 Availability Of Information: Purchaser's duly authorized
representatives shall have, during the term of the Contract and
for three (3) years thereafter, access at all reasonable times to
all of the Supplier's and its Subcontractors' personnel, accounts
and records of all description, including but not limited to
computer files, directly relating to this Contract for the
purpose of verifying
50
compliance with these Conflict of Interest/Business Ethics
provisions. The Consultant and its Subcontractors shall preserve
all such accounts and records for a period of three (3) years
after the term of the Contract. Purchaser's duly authorized
representatives shall have the right to reproduce any such
accounts and records for the purpose as stated in the preceding
sentence.
31.8 Subcontractors: Supplier shall include the necessary provisions
in its Subcontracts to ensure that its Subcontractors
comply with this Section 31.
31.9 No Hire: During the term of the Contract and for twelve (12)
months thereafter, unless otherwise agreed to in writing prior to
the offer of employment and only to the extent permitted
under applicable law, each Party agrees that no employee of it or
any of its Subcontractors who performs part of the Work will
offer employment with such Party or any of its subsidiaries to
any personnel of the other Party or its Subcontractors who
provide services related to the Contract within the preceding
twelve (12) months without the prior consent of the other Party.
32. EQUAL OPPORTUNITY LAWS
FEDERAL REGULATIONS: During the performance of the Contract and to the
extent they may be applicable to the Contract, the Supplier agrees to (i)
comply with all laws, orders, and regulations included by summary or
reference in the following Sections and (ii) require flowdown of all such
sections in all subcontracts as applicable:
32.1 EQUAL EMPLOYMENT OPPORTUNITY-EXECUTIVE ORDER NO. 11246,41 CFR
PART 60-1: (Contracts of $10,000 or more) Provides that Supplier
will not discriminate against any employee or applicant for
employment because of race, color, religion, sex, or national
origin and further that Supplier shall take affirmative action to
ensure that applicant and employees are treated without regard to
their race, color, religion, sex, or national origin.
32.2 CERTIFICATION OF NONSEGREGATED FACILITIES-41 CFR 60-1.8:
(Contracts of $10,000 or more) Supplier hereby certifies that
Supplier will not maintain or provide segregated facilities for
its employees and will not permit its employees to perform their
services at any location under Supplier's control, where
segregated facilities are maintained.
32.3 CONSTRUCTION CONTRACTORS-AFFIRMATIVE ACTION REQUIREMENTS-41 CFR
Part 60-4: (Contracts exceeding $10,000) Establishes procedures
for soliciting and awarding federal or federally assisted
construction contracts.
51
32.4 LISTING OF EMPLOYMENT OPENINGS-Executive Order 11701: (Contracts
of $10,000 or more) Supplier will list employment openings with the
Employment Development Department in accordance with the Vietnam Era
Veterans Readjustment Assistance Act of 1974 and Executive Order 11701.
The affirmative action clause set forth in 41 CFR 60-250.4 is
incorporated herein by reference.
32.5 EMPLOYMENT OF THE HANDICAPPED-Rehabilitation Act of 1973, 41 CFR Part
60-741: (Contracts of $2,500 or more) The affirmative action clause and
the regulations contained in 41 CFR 60-741.4, and Section 504 of the
Rehabilitation Act of 1973, as amended (29 U.S.C. Section 794), which
prohibits discrimination on the basis of handicaps, are incorporated by
reference in this Contract.
32.6 FILING PROGRAM SUMMARIES AND PREPARING AFFIRMATIVE ACTION
PLANS-Executive Order 11246, 41 CFR Part 60-2: (Contracts of $50,000 or
more) If the value of the Contract is $50,000 or more and the Supplier
has 50 or more employees, the Supplier agrees to file appropriate
affirmative action program summaries in accordance with existing
regulations and develop and maintain a current written affirmative
action compliance program at each of its establishments.
32.7 VIETNAM ERA VETERANS READJUSTMENT ASSISTANCE-Act of 1974, Title 41,
Chapter 60, Part 250: (Contracts of $10,000 or more) The affirmative
action clause and the regulations pertaining to the employment of
disabled veterans and veterans of the Vietnam era are incorporated by
reference in the Contract.
32.8 AMERICANS WITH DISABILITIES ACT-42 U.S.C. Section 12101, et seq.:
Supplier agrees that, to the extent it may be applicable to the
Contract, Supplier shall comply with the Americans with Disabilities
Act.
32.9 Purchaser's POLICY: It is Purchaser's policy that Women, Minority, and
Disabled Veteran Business Enterprises (WMDVBEs) shall have the maximum
practicable opportunity to participate in providing the products and
services Purchaser purchases.
32.10 For all Purchaser contracts, the Supplier agrees to comply, and to
require all Subcontractors and sub-subcontractors to comply, with
Purchaser's Equal Opportunity Purchasing Program (EOPP) policy, as set
forth in Annex I hereto. The Supplier shall provide to each prospective
Subcontractor a copy of Annex I.
52
32.11 In addition, for contracts exceeding $500,000 (or $1 Million for
construction contracts), the Supplier must comply with the Policy
Regarding Utilization of Small Business Concerns and Small
Disadvantaged Business Concerns, as described in Annex J
hereto. The Subcontracting Plan for these contracts must include
provisions for implementing the terms prescribed in Annex J.
32.12 Small Business, and Small Disadvantaged Business Subcontracting
Plans are not required for small business contractors, personal
service contracts, contracts that will be performed
entirely outside of the United States and its territories, or
modifications to existing contracts which do not contain
subcontracting potential.
32.13 For all Purchaser contracts, the Supplier shall act in accordance
with the Subcontracting Plan in the performance of the Work and
in the award of all subcontracts.
33. INJURY AND ILLNESS PREVENTION PROGRAM
33.1 In the performance of the Work under this Contract, Supplier
acknowledges that it has an effective Injury and Illness
Prevention Program which meets the requirements of all applicable
laws and regulations, including but not limited to Section 6401.7
of the California Labor Code. Supplier shall ensure that any
Subcontractor hired by Supplier to perform any portion of the
Work under the Contract shall also have an effective Injury and
Illness Prevention Program. If the Supplier has any employees in
California, even if those employees do not perform Work under the
Contract, the attached Compliance Certificate (Annex K) shall be
executed by the person with the authority and responsibility for
implementing and administering such Injury and Illness and
Prevention Program.
34. SEVERABILITY
34.1 Should any section, provision or portion of the Contract be held
to be invalid, illegal or void, by a court of proper jurisdiction
then, and in such event, any such section, provision or portion
shall be deleted from the Contract and the Contract shall be read
as though such invalid, illegal or void section, provision
or portion was never included herein, and the remainder of the
Contract shall nevertheless subsist and continue in force and
effect until such time as the remaining provisions shall be
modified or void, as agreed to by the Parties.
53
3
35. NOTICES
35.1 Any invoice notice, request, demand, claim or other communication
related to the Contract shall be (i) in writing and delivered by hand or
by telecopier, certified mail (postage prepaid) or overnight courier to
the other party's representative at its address stated in the Contract,
(ii) effective when received, (iii) identified by the Contract number,
and (iv) signed by the notifying Party's representative.
To Purchaser: Independent System Operator Restructuring Trust
Attn: Eduardo Sugay
DE&S
5000 Executive Parkway - Suite 300
San Ramon, CA 94583
With a copy to: Skadden, Arps, Slate, Meagher & Flom LLP
Attn: Martin R. Hoffman
1440 New York Avenue, N.W.
Washington, DC 20005-2111
To Supplier: ISO Alliance, LLC
c/o PSC Energy Corporation
633 West Fifth Street
Suite 3829
Los Angeles, California 90071
With a copy to: ABB Power T&D Company Inc.
ABB Systems Control Division
Attn: Ralph Masiello
2550 Walsh Avenue
Santa Clara, California 95051
Manta & Welge
Attn: John R. Attanasio
2005 Market Street
Philadelphia, Pennsylvania 19103
Perot Systems Corporation
Attn: General Counsel
12377 Merit Drive
Dallas, Texas 75251
35.2 Either Party may change the above information by giving notice of each
change to the other Party.
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36. GOVERNING LAW
36.1 The Contract shall be interpreted, governed and construed under
the laws of the State of California as if executed and to be
performed wholly within the State of California.
37. SECTION HEADINGS
37.1 Section headings appearing in the Contract are for convenience
only and shall not be construed as interpretations of text.
38. SURVIVAL
38.1 Notwithstanding completion or termination of the Work or of the
Contract, the Parties shall continue to be bound by the
provisions of the Contract which by their nature are intended to
and shall survive such completion or termination.
39. ENTIRE AGREEMENT
39.1 The Contract contains the entire agreement and understanding
between the Parties and merges and supersedes all prior
representations and discussions pertaining to the Contract,
including Supplier's proposal (except as specifical ly
included). Any changes, exceptions or different terms and
conditions proposed by Supplier, or contained in Supplier's
acknowledgment of the Contract, are hereby rejected and shall
have no force or effect unless express ly stated in the Contract
or incorporated by a Change Order.
39.2 No significance shall attach to any differences between any
terms in the Contract and any analogous terms in any other
contract between Purchaser and Supplier or between Purchaser and
any of Supplier's members. No such differences shall be used to
interpret, construe, or explain any term of the Contract or any
other such contract.
40. REPRESENTATIONS
40.1 Supplier Representations. Supplier hereby represents, warrants
and covenants to Purchaser that:
(a) it has the power and authority to enter into this
Agreement and fully to perform its obligations
hereunder; and
55
3 '3
(b) all necessary organizational action to approve the execution,
delivery and performance of this Agreement has been duly taken
by it, and this Agreement constitutes a valid and binding
Agreement of such Party enforceable against it in accordance
with its terms.
40.2 Purchaser Representations. Purchaser hereby represents, warrants and
covenants to Supplier that:
(a) it has the power and authority to enter into this Agreement and
fully to perform its obligations hereunder;
(b) all necessary organizational action to approve the execution,
delivery and performance of this Agreement has been duly taken
by it, and this Agreement constitutes a valid and binding
Agreement of such Party enforceable against it in accordance
with its terms; and
(c) neither the execution and the delivery of this Agreement nor the
consummation of the transactions contemplated hereby will
violate any provision of the charter or bylaws of Purchaser.
IN WITNESS WHEREOF the Parties have caused this Contract to be signed by their
authorized officers or representatives as of this tof March, 1997.
INDEPENDENT SYSTEM OPERATOR RESTRUCTURING TRUST
/s/
S. David Freeman, Not in his personal
capacity but as Trustee for the
Independent System Operator
Restructuring Trust
ISO ALLIANCE LLC
/s/
By: Perot Systems Corporation By
Its: Manager A Member
56
ANNEX A
FORM OF GUARANTY
This Guaranty (this "Guaranty"), dated as of March \ 1997, is given by
ABB Power T&D Company Inc., a Delaware corporation ("ABB"), and Perot Systems
Corporation F'Perot Systems"), a Delaware corporation (ABB and Perot
hereinafter, collectively the "Guarantors." and each a "Guarantor"), in favor of
the Independent System Operator Restructuring Trust, established pursuant to the
Independent System Operator Trust Agreement (enabled by the Funding Decision,
CPUC Decision 96-10-04, October 25, 1996) (the "ISO Trust") and the Independent
System Operator ("ISO") to be established pursuant to said Funding Decision (the
ISO Trust and ISO hereinafter, the "ISO Parties").
RECITALS
WHEREAS. ABB and Perot Systems have formed the ISO Alliance, LLC a
Delaware limited liability company ("Supplier"): and
WHEREAS, Supplier and the ISO Trust are entering into an agreement (the
"SA/SI/BS Contract") for the Scheduling Applications, Scheduling Infrastructure
and Balance of Business Systems to be used by the ISO; and
WHEREAS, as an inducement to the ISO Trust to enter into the SA/SI/BS
Contract with the Supplier, the Guarantors have agreed to guarantee the
obligations of the Supplier under the SA/SI/BS Contract as provided herein; and
WHEREAS, the Guarantors will benefit from the transactions contemplated
by the SA/SI/BS Contract pursuant to the terms thereof.
NOW, THEREFORE, the parties agree as follows:
Section 1. Definitions. Unless the context otherwise requires,
capitalized terms used herein and not otherwise defined have the meanings
assigned to them in the SA/SI/BS Contract.
Section 2. Guaranty. Each of the Guarantors, to the extent of the limits
of liability set forth in Section 3 hereof, hereby irrevocably guarantees to the
ISO Parties the full and prompt performance and payment when due of all
obligations of Supplier under the SA/SI/BS Contract (including, without
limitation, obligations to pay any damages or indemnification payments required
to be paid by Supplier under the SA/SI/BS Contract)(all of such obligations
collectively, the "Guaranteed Obligations"). This Guaranty is for the benefit
57
of the ISO Parties and their shareholders, directors, officers, employees,
agents and representatives of the ISO Parties to the extent they are
beneficiaries and potential beneficiaries of the Guaranteed Obligations
pursuant to the SA/SI/BS Contract.
Section 3. Limits of Liability. The obligation of the Guarantors
hereunder is joint, but not several. Each Guarantor's liability shall be limited
to the following respective percentage of any joint liability of the Guarantors:
(a) The liability of ABB shall be limited to seventy percent (70%)
of the amount of any joint liability; and
(b) The liability of Perot Systems shall be limited to thirty
percent (30%) of the amount of any joint liability.
Such limits shall apply to the entirety of the joint liability without regard to
any determina tion of responsibility as between ABB and Perot Systems under
their respective obligations as Major Subcontractors under the SA/SI/BS
Contract. The Guarantors' aggregate liability under this Guaranty shall in no
event exceed the limit of liability under SA/SI/BS Contract as specified in
Section 25.3 thereof.
Section 4. Scope of Guaranty. The liability of the Guarantors under this
Guaranty is coextensive with the Supplier's rights and obligations under the
SA/SI/BS Contract, the Guarantors shall be entitled to all defenses, claims,
setoffs and other rights to .which the Supplier is entitled under the SA/SI/BS
Contract. Except to the extent inconsistent with the foregoing sentence, this
Guaranty is absolute, irrevocable, and continuing and shall be unaffected by:
(a) any termination of the SA/SI/BS Contract;
(b) the existence of any claim, setoff, defense, counterclaim or other
right which the Guarantors (but not the Supplier under the SA/SI/BS Contract)
may have against any of the ISO Parties or any other natural person.
Governmental Authority or any other entity whether acting in an individual
fiduciary or other capacity (each, a "Person"):
(c) the occurrence or continuance of any event of bankruptcy,
reorganization or insolvency with respect to Supplier or any other Person, or
the dissolution, liquidation or winding up of Supplier or any other Person;
(d) any amendment or other modification of the SA/SI/BS Contract made
pursuant to its terms;
(e) the exercise, non-exercise or delay in exercising, by any of the ISO
Parties, of any of their rights and remedies under this Guaranty;
(f) any assignment or other transfer of this Guaranty by any of the ISO
Parties or any assignment or other transfer of the SA/SI/BS Contract in whole or
in part;
(g) any sale, transfer or other disposition by the Guarantors of any
direct or indirect interest that ABB or Perot Systems may have in the Supplier;
(h) the absence of any notice to, or knowledge by. Guarantors of the
existence or occurrence of any of the matters or events set forth in the
foregoing clauses; or
(i) any other similar circumstance, condition or event that might
constitute or give rise to a defense to performance by Guarantors of its
obligations under this Guaranty.
Sections. Waiver. Each of the Guarantors:
(a) waives, and agrees it shall not at any time insist upon, plead,
claim or take the benefit or advantage of, any appraisal, valuation, stay,
extension, marshaling of assets or redemption laws, or exemption, whether now or
at any time hereafter in force, which may delay, prevent or otherwise affect the
performance by each of the Guarantors of its obligations under, or the
enforcement by the ISO Parties of, this Guaranty;
(b) waives, and agrees that it shall not at any time claim or take the
benefit or advantage of Section 365(e)(2) of the Title 11, United States Code or
any other state or federal insolvency, reorganization, moratorium or similar law
for the relief of debtors;
(c) waives all notices, diligence, presentment and demand (whether for
non-payment or protest or of acceptance, maturity, extension of time, change in
nature or form of the Guaranteed Obligations, acceptance of security, release of
security, composition or agreement arrived at as to the amount of, or the terms
of, the Guaranteed Obligations, notice of adverse change in the Supplier's
financial condition or any other fact which might materially increase the risk
to the Guarantors hereunder) with respect to any of the Guaran teed Obligations
and all other demands whatsoever and waives the benefit of all provisions of law
which are or might be in conflict with the terms of this Guaranty;
(d) agrees that its obligations under this Guaranty shall be unaffected
by the existence of any claim, setoff, defense, counterclaim or other right
which the Guaran tors (but not the Supplier under the SA/SI/BS Contract) may
have against any of the ISO Parties or any other natural person. Governmental
Authority or any other entity whether acting in an individual fiduciary or other
capacity (each, a "Person");
(e) irrevocably waives until the Guaranteed Obligations have been
satisfied (i) any rights which it may have acquired against the Supplier by way
of subrogation under this Guaranty or otherwise, (ii) any rights to seek any
reimbursement from Supplier in
2
respect of payments made by the Guarantors hereunder, and (iii) any claim,
counterclaim, or setoff which it may have against Supplier and the right to
exercise any rights or remedies or commence any proceedings with respect
thereto;
(f) irrevocably waives any right to require any of the ISO Parties to
proceed against Supplier or any other guarantor at any time, to proceed against
or exhaust any security held by any of the ISO Parties at any time, and, except
to the extent that Supplier has or would have had any such a right under the
SA/SI/BS Contract, the right to require any of the ISO Parties to mitigate
damages or to pursue any other remedy whatsoever at any time; and
(g) irrevocably waives any defense based upon an election of remedies by
any of the ISO Parties, including any election to proceed by judicial or
nonjudicial foreclosure of any security, whether real property or personal
property security, or by deed in lieu thereof, and whether or not every aspect
of any foreclosure sale is commercially reasonable, or any election of remedies,
including but not limited to remedies relating to real property or personal
property security, that destroys or otherwise impairs the rights of Guarantors
against Supplier for reimbursement.
Section 6. Affirmative Covenants. Each of the Guarantors covenants and
agrees that until this Guaranty has been terminated pursuant to Section 7, each
of the Guarantors will cause to be maintained and preserved the corporate
existence of the Supplier and will maintain beneficial ownership (free and clear
of all liens, claims and encumbrances) of the Supplier.
Section 7. Term of Guaranty. This Guaranty is a continuing guaranty and
shall remain in full force and effect until the earlier of (i) the date on which
all Guaranteed Obligations have been performed or paid in full or (ii) the date,
not earlier than the date of Acceptance of the System pursuant to the SA/SI/BS
Contract, on which the Guarantors provide for the allocation between them and
the assumption by one or both of them of direct liability for each of the
Guaranteed Obligations of Supplier which may then be outstanding, at which time
this Guaranty shall terminate; provided that Guarantors have obtained the prior
written consent of Purchaser to such termination, such consent not to be
unreasonably withheld. Each and every default in the payment or performance of
the Guaranteed Obliga tions shall give rise to a separate cause of action
hereunder and separate causes of action may be brought hereunder as each such
cause of action arises.
Section 8. Independent and Separate Obligations. The obligations of the
Guarantors hereunder are independent of the obligations of each other and those
of Supplier with respect to the Guaranteed Obligations and, in the event of any
default hereunder, a separate action or actions may be brought and prosecuted
against each of the Guarantors whether or not the Supplier is joined therein or
a separate action or actions are brought against Supplier or the other
Guarantor, provided that, in any action brought against one or both of the
Guarantors in which Supplier is not joined as a party: (i) all defenses of
Supplier
4
(except those defenses that may be available by reason of bankruptcy,
reorganization, or insolvency proceedings of or against Supplier) shall be
available to the Guarantors to the same extent that such defenses could have
been asserted by Supplier under the SA/SI/BS Contract in such an action, and
(ii) Guarantors shall not be liable in any manner that is inconsistent with a
prior adjudication against the Supplier under the SA/SI/BS Contract.
Section 9. Bankruptcy No Discharge: Repayments: Reinstatement.
(a) Bankruptcy Proceedings. The Guarantors shall not
commence or join with any other party in commencing any bankruptcy,
reorganization, or insolvency proceedings of or against Supplier. The Guarantors
understand and acknowledge that by virtue of this Guaranty, the Guarantors have
specifically assumed any and all risks of a bankruptcy or reorganization case or
similar proceeding with respect to the Supplier. As an example and not in any
way a limitation, a subsequent modification of the Guaranteed Obligations or any
rejection or disaffirmance thereof by any trustee, receiver or liquidating
agency of Supplier or of any of their respective properties, or any settlement
or compromise of any claim made in any such case, in any reorganization case
concerning Supplier shall not affect the obligation of the Guarantors to pay and
perform the Guaranteed Obligations in accordance with their original terms.
(b) Repayment and Reinstatement. If any claim is made upon
any of the ISO Parties or any Person claiming through an ISO Party for repayment
or disgorgement of any amount or amounts received by an ISO Party in payment of
the Guaranteed Obliga tions and the ISO Party or such Person, as the case may
be, repays or disgorges all or any part of said amount, then, notwithstanding
any revocation or termination of this Guaranty, Guarantors shall be and remain
liable to the ISO Parties or such Person, as the case may be, for the amount so
repaid, to the same extent as if such amount had never originally been received
by the ISO Party or such Person, as the case may be.
Section 10. Payment. Each of the Guarantors agrees that whenever
such Guarantor shall make any payment to any of the ISO Parties hereunder on
account of the liability hereunder, such Guarantor will deliver such payment to
the ISO Parties in immedi ately available funds at the address notified to such
Guarantor in writing, and notify the ISO Parties in writing that such payment is
made under this Guaranty for such purpose.
Section 11. Full Recourse. The obligations of each of the
Guarantors set forth herein constitute the full recourse obligations of each of
the Guarantors, jointly but not severally enforceable against each Guarantor to
the extent of the limits of liability set forth in Section 3 hereof,
notwithstanding any provision in any other agreement limiting the liability of
such Guarantor, or any agreement by any holder of any evidence of the Guaranteed
Obligations to look for payment with respect thereto solely to certain property
securing such Guaranteed Obligations.
5
Section 12. Subrogation. Notwithstanding any payments made or
obligation performed by the Guarantors or any setoff or application of funds of
the Guarantors by reason of this Guaranty, the Guarantors shall not be entitled
to be subrogated to any rights of the ISO Parties against the Supplier or with
respect to any security, guaranty or right of setoff pertaining to the
Guaranteed Obligations until all Guaranteed Obligations shall have been fully
paid. Any claim of the Guarantors against Supplier arising from payments made by
the Guarantors pursuant to the provisions of this Guaranty shall be in all
respects subordinate to the full and complete payment or performance and
discharge of the Guaran teed Obligations, and no payment hereunder by the
Guarantors shall give rise to any claim by the Guarantors against the ISO
Parties. Prior to termination of this Guaranty pursuant to Section'7, the
Guarantors will not assign or otherwise transfer any such claim against Supplier
to any other Person.
Section 13. Expenses. In any claim brought under Section 18(b) the
success ful Part(ies) shall be entitled to be reimbursed by the unsuccessful
Part(ies) for all costs and expenses, including reasonable attorneys fees and
expenses, incurred by the successful Part(ies) in such action.
Section 14. Amendments'. Waivers, etc. Neither this instrument nor
any term hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by any of the ISO Parties and the
Guarantors. No delay or failure by any of the ISO Parties to exercise any remedy
against Supplier or the Guarantors will be construed as a waiver of that right
or remedy. No failure on the part of any of the ISO Parties to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by any
applicable governmental rule.
Section 15. Severabilitv. In the event that the provisions of this
Guaranty are claimed or held to be inconsistent with any other instrument
evidencing or securing the Guaranteed Obligations, the terms of the Guaranty
shall remain fully valid and effective. If any one or more of the provisions of
this Guaranty should be determined to be illegal or unenforceable, all other
provisions shall remain effective.
Section 16. Assignment. The Guarantors shall not assign any of the
Guarantors' rights or obligations under this Guaranty. The ISO Trust or the ISO
may, at any time and from time to time, assign, conditionally or otherwise, in
whole or in part, their rights hereunder, whereupon such assignee shall succeed
to such rights and all of the terms of this instrument shall be binding upon and
inure to the benefit of such successors and assigns.
Section 17. Address for Notices. All notices and other
communications provided for hereunder shall be given in accordance with the
notice requirements of the
6
SA/SI/BS Contract and if to the Guarantors, at the address specified below the
space for its execution of this Guaranty.
Section 18. Jurisdiction.
(a) Except for any claims against Guarantors for the
collection of an arbitration award or judgment against Supplier constituting a
Guaranteed Obligation hereun- der or pertaining to the validity, enforceability,
or breach of this Guaranty, all claims hereun- der shall be asserted and
adjudicated in accordance with the provisions of Section 26 and any other
applicable provisions of the SA/SI/BS Contract pertaining to the resolution of
disputes, including but not limited to the provisions thereof requiring the
resolution of disputes through arbitration.
(b) For claims against Guarantors for the collection of an
arbitration award or judgment against Supplier constituting a Guaranteed
Obligation hereunder or pertaining to the validity, enforeeability, or breach of
this Guaranty, the Guarantors irrevoca bly submit, to the extent permitted by
law, to the jurisdiction of any State or federal court sitting in the State of
California, and the Guarantors irrevocably agree that all claims in respect of
such action or proceeding may be heard and determined in such a court. The
Guarantors and the ISO Parties irrevocably waive the defense of an inconvenient
forum to the maintenance of such action or proceeding. To the extent permitted
by law, the Guaran tors irrevocably consent to the service of any and all
process in any such action or proceed ings by the mailing of copies of such
process to the Guarantors at the address specified below. The Guarantors agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Guarantors, at the option of the ISO parties, may be
joined in any proceeding against Supplier. Nothing in this section shall affect
the right of the ISO Parties to serve legal process in any other manner
permitted by law or affect the right of ISO Parties to bring any action or
proceeding against Guarantors in the courts of any other jurisdiction where
jurisdiction over the Guarantors would otherwise be available.
(c) To the extent that the Guarantors have or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
otherwise consented to in paragraph (b) above (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, to the extent permitted by
law, each Guarantor hereby irrevocably waives such immunity in respect of its
obligations under this Guaranty.
Section 19. Governing Law. This Guaranty shall be governed by,
and construed in accordance with, the laws of the state of California
(regardless of the laws that might otherwise govern under applicable principles
of conflicts of law thereof) as to all matters.
Section 20. Waiver of Jury Trial. EACH OF THE GUARANTORS AND
THE ISO PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY
JURY IN ANY ACTION. PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
IN CONNECTION WITH THIS GUARANTY OR ANY MATTER ARISING HEREUN-
DER.
IN WITNESS WHEREOF, Each of the Guarantors has executed and
delivered this Guaranty effective as of the date first above written.
ABB POWER T&D COMPANY INC.
By: /s/
Address: Name:
Title:
PEROT SYSTEMS CORPORATION
By: /s/
Address: Name:
Title:
ANNEX B
CUSTOMIZED SOFTWARE AMD RECOUPMENT FEES
Customized Software shall consist of all computer programs, code, procedures,
rules, or routines in Source or Object Code, and all supporting documentation
supporting the specialized functions listed in the DSOWs:
1. For: Ancillary Services Management;
Over Generation Mitigation; and
Balancing Energy and Ex-post Pricing (BEEP)
The recoupment fees to be paid to Purchaser pursuant to Section 15.2 of the
Contract shall be 7 and one-half percent (7 1/2%) of the royalties or other fees
actually received by ABB, during the period beginning on the date of execution
of the Contract and ending 7 years thereafter, for each license granted on or
after the date of execution of the Contract to any third party to use the
Customized Software. Such recoupment fees shall be due and payable thirty (30)
days after the receipt of the corresponding royalties or other fees by ABB from
its licensee.
2. . For: Congestion Management
The recoupment fee to be paid to Purchaser is a one time payment of $100,000 to
be paid upon the last milestone payment or the first reuse by ABB, whichever is
earlier.
ANNEXJ
POLICY REGARDING UTILIZATION OF SMALL BUSINESS
CONCERNS AND SMALL DISADVANTAGED BUSINESS CONCERNS
The following policy of the United States shall be adhered to in the
perfor mance of this Agreement:
(a) It is the policy of the United States that small business concerns
and small business concerns owned and controlled by socially and economically
disad- vantaged individuals shall have the maximum practicable opportunity to
participate in performing contracts let by any Federal Agency, including
contracts and subcontracts for subsystems, assemblies, components, and related
services for major systems. It is further the policy of the United States that
prime contractors establish procedures to ensure the timely payment of amounts
due pursuant to the terms of their subcontracts with small business concerns and
small business con cerns owned and controlled by socially and economically
disadvantaged individu als.
(b) Supplier hereby agrees to carry out this policy in the awarding of
subcontracts to the fullest extent consistent with efficient contract
performance. Supplier further agrees to cooperate in any studies or surveys as
may be conducted by the United States Small Business Administration or the
awarding agency of the United States as may be necessary to determine the extent
of Supplier's compli ance with this clause.
(c) As used herein, the term "small business concern" shall mean a small
business as defined in Section 3 of the Small Business Act and relevant
regulations promulgated pursuant thereto. The term "small business concern owned
and controlled by socially and economically disadvantaged individuals" shall
mean a small business concern (1) which is at least fifty-one percent (51%)
unconditionally owned by one or more socially and economically disadvantaged
individuals; or, in the case of any publicly owned business, at least fifty-one
per cent (51%) of the stock of which is unconditionally owned by one or more
social ly and economically disadvantaged individuals; and (2) whose management
and daily business operations are controlled by one or more of such individuals.
This term also means a small business concern that is at least fifty-one percent
(51%) unconditionally owned by an economically disadvantaged Indian Tribe or
Native Hawaiian Organization, or a publicly owned business having at least
fifty-one per cent (51%) of its stock unconditionally owned by one of these
entities which has
51
its management and daily business controlled by members of an economically
disadvantaged Indian Tribe or Native Hawaiian Organization, and which meets the
requirement of 13 CFR Part 124. Supplier shall presume that socially and
economically disadvantaged individuals include Black Americans, Hispanic
Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian
Americans, and other minorities, or any other individual found to be
disadvantaged by the Administration pursuant to Section 8(a) of the Small
Business Act. Supplier shall presume that socially and economically
disadvantaged entities also include Indian Tribes and Native Hawaiian
Organizations.
(d) Supplier acting in good faith may rely on written representations by
its subcontractors regarding their status as either a small business concern or
a small business concern owned and controlled by socially and economically
disadvantaged individuals.2
2 Notwithstanding this provision of the federal statute, all WMDVBE
subcontractors must be verified pursuant to the procedures
prescribed in Section 2 of CPUC General order 156, as such procedures may
be amended periodically.
52
[FORM OMITTED]
[FORM OMITTED]
ANNEX K
INJURY AND ILLNESS PREVENTION PROGRAM
Compliance Certificate
The undersigned, the _____________________ of
(title/position)
ISO Alliance LLC ("Supplier"), hereby certifies to Purchaser, as follows:
1. that Supplier has an effective Injury and Illness Prevention Program
which meets the requirements of all applicable laws and regulations, including
but not limited to Section 6401.7 of the California Labor Code and that any
subcontractor hired by Supplier to perform any portion of Supplier's obligations
under this Agreement has an effective Injury and Illness Prevention Program; and
2. that he or she is the person with the authority and responsibility for
implementing and administering Supplier's Injury and Illness Prevention Program.
IN WITNESS WHEREOF, the undersigned has executed this Compliance
Certificate on _______________________.
Signature
Print Name
53
ANNEX L
STAGE I DSOWS
In accordance with Section 5.1 of the Contract, Volumes II, III and IV will be
completed by the Parties and attached hereto within one week following execution
of the Contract.
54
ANNEX C
SUPPLIER RATES
Daily rates for Contractor personnel to provide services
at site (specify skill levels)
<Table>
Principle Consultant $2,800
Project Manager $2,400
Technical Lead $2,000
Designer $1,600
Programmer $1,200
Technician $ 800
Admin Support $ 400
</Table>
ANNEX D
LETTER OF CREDIT
[Letterhead of Bank of America]
Irrevocable Standby Letter of Credit No.
[INSERT DATE]
ISO Alliance, LLC
c/o PSC Energy Corporation
633 West Fifth Street
Suite 3829
Los Angeles, California 90071
Ladies and Gentlemen:
At the request and on the instructions of our customer, the
independent System Operator Restructuring Trust (the "Purchaser"), the
undersigned issuing bank (the "Bank") hereby establishes in your favor this
Irrevocable Standby Letter of Credit Wo. __ (this "Letter of Credit") in
an amount not to exceed FOUR MILLION" TWO HUNDSED TSaOSKSSD DOLLARS ($4,200,000)
(the "Stated Amount"), effective immediately and expiring at the close of
business of the Bank at the Bank's Office (as hereinafter defined.) on the
earlier of December 31, 1998 or the date on which the Bank receives a
certificate from the Purchaser following 10 days notice to the Beneficiary to
the effect that the final milestone payment, as set forth in Section 9.2.2 of
the Agreement (as hereinafter defined) , has been wade in full by
Purchaser to you or, upon renewal, the date of such renewal (the "Expiration
Date"}.
This Letter of Credit may be transferred to any successor of yours (a
"Transferee") so long as you give written notice, signed by a purported
authorized officer of yours, of the transfer of this Letter of Credit and all of
your rights hereunder to the Bank and otherwise conform with all of the Bank's
procedures and requirements in this respect. Upon any such transfer of
this Letter of Credit to a Transferee/ all reference herein to "you" or "your"
shall thereafter mean and refer to such Transferee.
Maxell 1A, 1.997 - 6:2B pm
ISO ALLIANCE, LLC
1997
Page 2
Funds under this Letter of Credit will be made available to you
against receipt by us of (a) your sight draft(s) iii the form of Annex D-l
hereto (a "Sight Draft") and. (to} your drawing certificate(s) in the form of
Annex D-2 hereto (a "Drawing Certificate"), each appropriately completed and
signed by a purported authorized officer of yours. Presentation of such
documents shall be made to the Bank at (i) its office located at ____________ or
(ii) at any other office which may be designated by the Bank by written notice
delivered to you at the Hotice Address (as hereinafter defined; such office of
the Bank herein called the "Bank's Office").
More than one draw may be made hereunder. Each drawing honored by the
Bank under this Letter of Credit shall E(pound)SL tanto reduce the Stated Amount
of this Letter of Credit by the amount of such drawing.
Demand for payment may be made by you under this Letter of Credit at
any time during the Bank's business hours at the Bank's Office on a Businea(R)
Day (as hereinafter defined)- If demand for payment is made by you hereunder at
or prior to 11:00 A.M. (California time) on a Business Day, and provided, that
such demand for payment and the Sight Draft and. Drawing Certificates presented
in connection therewith conform to the terms and conditions hereof, payment
shall be made to you in the amount demanded, in immediately available funds, in
accordance with your payment instructions to the Bank, not later than 3:00 P.M.
(California time) on the next succeeding Business Day. If demand for payment is
made by you hereunder after 11;00 A.M. (California time) on a Business Day, and
provided, that suah demand for payment and the Sight Draft and Drawing
Certificate presented in connection therewith conform to the terms and
conditions hereof, payment shall be made to you in the amount demanded, in
immediately available funds, in accordance with your payment instruction to the
Bank/ not later than 3:00 P.M. (California time) on the second, succeeding
Business Day. If a demand for payment made by you hereunder does not
conform to the terms and conditions of this Letter of Credit, the Bank shall
give you telephonic notice (as promptly as possible but in no event after the
ISO ALLIANCE, I C
__________________, 1997
Page 3
time payment would otherwise have been due hereunder) that the demand for
payment was not effected in accordance with the terms and conditions of
this Letter of Credit, stating the reason therefor and that the Bank will upon
your instructions hold any Sight Draft and Drawing Certificate at your disposal
or return the same to you. Upon being notified that the demand for payment was
not effected in conformity with this Letter of Credit, you may attempt to
correct any such non-conforming demand for payment at any time prior to the
close of business on the Expiration Date.
No Sight Draft or Drawing Certificate demanding payment hereunder
shall be presented later than the close of business on the Expiration Date o
The following terms, as used herein, have the following meanings:
"Agreement" means the Contract, dated as of March 14, 1997, by and
between ISO Alliance, LLC, a Delaware limited liability company, and Independent
System Operator Restructuring Trust, established pursuant to the ISO Trust
Agreement (enabled by the Funding Decision, CPUC Decision 96-10-044 (October 25,
19965).
"Beneficiary" means the limited liability company to which this Letter
of Credit is addressed and any authorized Transferee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the State of California are required or authorized by
law or executive order to close-
"Notice Address" means the following address or such other address as
you shall designate in writing to the Bank;
ISO Alliance, LLC
c/o PSC Snergy Corporation
633 West Fifth Street
Suite 3829
ISO ALLIANCE, LLC
1997
Page 4
Los Angeles, California 90071
Attention: Andy Goletz
with a copy to;
Manta & welge
Attn; John R. Attanasio/ Esq.
2005 Market Street
Philadelphia, Pennsylvania 19103
Perot Systems Corporation
Attni General Counsel
12377 Merit Drive
Dallas, Texas 75251
This Letter of Credit sets forth in full the Bank's undertaking" with
respect to the subject matter hereof, and auch undertaking shall not in any way
be modified, amended, amplified or limited by reference to any document,
instrument or agreement referred to herein, except Annexes D-l and D-2 hereto,
and any such reference shall not be deemed to incorporate by reference any
document, instrument or agreement except for such Annexes.
Except to the extent that the provisions o(pound) the Uniform Customs
and Practice for Documentary Credits, 1993 revision. International Chamber of
Conireerce Publication No- 500 (the "Uniform Customs") are inconsistent
with the express terms of this Letter of Credit, this Letter of Credit ie issued
subject to the Uniform Customs. As to matters not governed by the Uniform
Customs, this Letter of Credit shall be governed by and construed in accordance
with Article 5 of the Uniform Commercial Code of the State of California.
Very truly yours,
BA3SK of America, MT&SA
By;
ISO ALLIANCE, LLC
1997
Page 5
Authorized Officer
01331D7.06-D.C. Server 2a
nrafc March 14, 1997 - t;28 prt
ANNEX D-l
FORM OF SIGHT DRAFT
PAY AT SIGHT TO [SAME OF BANK] BY WIRE TRANSFER IN IMMEDIATELY AVAILABLE
PTODS FOR THE ACCOUNT OF IISKME OF BENEFICIARY] (ACCOUIilT NO. [TO BE
SPECIFIED]) ON t INSERT DATE], [INSERT NUMBER OF DOLLARS IH WRITING]
UNITED STATES DOLLARS (US? [INSERT NUMBER OF DOLLARS IN FIGURES] ),
Drawn under Bank of America, MT&SA
Irrevocable Standby Letter of Credit
No. _______________
[NAME OF BENEFICIARY]
BY: __________________
Authorized Officer
ai331.in.06-D.C. Server ta nratt Masch M,
ISS7 - 6:2B pn
FORM OF DRAWING CERTIgICfl.IE
The undersigned, [Name of Beneficiary], by its
authorized officer, does hereby certify that;
1. This certificate is delivered pursuant to the Irrevocable Standby
Letter of Credit No. __/ dated _____, 1957 (the "Letter of Credit"), issued by
Bank of America, NT&SA (the "Bank") . All capitalized terms used herein shall
have the sarnie meaning given to such terms in the Letter of Credit.
2. The undersigned is the Beneficiary of the
Letter of Credit.
3. The date on which this certificate is being
presented is not later than the Expiration Date.
4. The amount for which demand Cor payment is made pursuant to this
certificate is $_______ and does not exceed the Stated Amount of the Lett&r of
Credit as in effect on the date hereof.
5. On [Date of Completion of the Supplier Performance Milestone for
which Payment is Sought Hereunder], the undersigned completed the [Describe the
Supplier Performance Milestone Eor which Payment is Sought Hereunder].
6, On [Date of Invoice for which Payment is Sought Hereunder], the
undersigned submitted an invoice to the Purchaser for the progress payment
payable upon completion of the above mentioned Supplier 'Performance Milestone,
a true and correct copy of which invoice is attached hereto.
7. More than thirty (30) days have elapsed since submittal of the
above mentioned invoice to the Purchaser and, the Purchaser has failed to pay
tha undersigned the milestone payment for the above mentioned Supplier
Performance Milestone. The Purchaser has hence failed to fulfill its payment
obligations pursuant to Section 9.2.1 of the Agreement.
01331.07.86-D.C, Borfcr 2a
M&eck M, W - 6s29 pa
ANNEXE
SOFTWARE MAINTENANCE AGREEMENTS
ISO SI/SA/BSS Systems
Software Maintenance Agreement
Software Maintenance Agreement
California ISO
Scheduling and Business Systems
(C)ABB Power T&D Company Inc. 1996. All rights reserved.
AM
Software Maintenance Agreement ISO SI/SA/BSS System
Maintenance Agreement
Description, Price and Terms for Maintenance Support Services
1. Scope of Service
ABB Power T&D Company Inc., ABB Systems Control (ABB) will provide
maintenance service for the software supplied by The ISO Alliance to
Independent System Operator Restructuring Trust ("ISO") pursuant to
Contract #ISO-97-XXX for the ISO Scheduling and Business Systems
(SI/SA/BSS). These services provide the ISO with the support to maintain
and upgrade the software/system with the latest applicable versions
available from ABB. The license to use the latest applicable version of
the software (the Program) will be made available to the ISO under this
Agreement. Terms and conditions regarding the use of the original
License Agreement, including non-disclosure, for the Program remain
applicable.
1.1 Basic System Support
Basic System Support service provides the ISO the ready availability of
ABB'S technical staff and computer facilities to respond to ISO requests
for Casual Consulting Services, Program Fixes, Program Upgrade
Notification and Program Upgrades. A complete up-to-date knowledge of
the ISO's software versions and configuration will be maintained in
order to provide an adequate service response. The Basic System Support
Services include the following:
o Casual Consulting Service
Casual Consulting Service includes Licenser's interpretation of user
documentation or guidance on the Program's intended, normal use via
telephone or facsimile. The following items, among others, are
specifically excluded from Casual Consulting:
o Interpretation of the Program's results.
o Supply of typical or representative data.
o Assistance with computer hardware and peripheral questions not
related to the Program's use.
o Assistance with computer operating system questions not directly
pertinent to the Program
AM
(C)ABB Powaf T&D Company Inc. 1996. All rights reserved.
ISO SI/SA/BSS Systems Software Maintenance Agreement 3
o Data debugging and/or correcting.
o Services necessitated as a result of any cause other than the
Program's ordinary, proper use by .Licensee, including but not
limited to neglect, abuse, unauthorized maintenance, or
electrical, fire, water, or other damage.
o Special applications of the Program.
The foregoing items and all others not within Casual Consulting scope may be
provided under Consulting/Implementation Services and are subject to additional
charges by Licenser.
ABB'S experience in field support has shown that most of the problems that
appear in the system are a consequence of a misinterpretation of operating
procedures or system documentation or to the lack of specific knowledge of a
particular system feature. A high percentage of these problems are efficiendy
resolved by means of telephone consultations with the appropriate technical
contact. ABB will maintain a short response time for incoming trouble calls.
Trouble Calls made during off-hours will be forwarded by an answering service to
the appropriate technical staff.
o Program Fixes
All ABB and its subcontractor's software undergoes extensive tests in factory
and at the installation site. This minimizes the possibility of the existence of
problems in the software. However, if such problems are encountered and
reported, they will be investigated and fixed at ABB. These minor corrections
will be made available by ABB to the ISO under this maintenance contract.
o Program Upgrade Notification
Versions of the different software functions provided with the SVSA/BSS system
are continuously improved and extended. This service provides the ISO with
timely notification of the changed/upgraded features and the associated
descriptive information which could apply to ISO system. ABB will notify the ISO
of two types of updates:
a) Upgrades refer to releases containing improvement, fine tuning and minor
extensions of functions using the same technology which the ISO has purchased.
b) Enhancements refer to releases considered as new modules or new products
which may involve the application or use of new technology or algorithms to
known functions.
Program Upgrades
(C)ABB Power T&O Company Inc. 1996. All rights reserved.
4 Software Maintenance Agreement ISO SI/SA/BSS System
New versions of or additions to the Program developed by Licenser in an effort
to improve the Program's operating performance without changing its basic
function are provided under basic system support. Program Upgrades include
modifying the Program to run on improved or enhanced versions of the reference
computer or operating system, as well as altering the Program's capacity,
function, execution time, application, input/output, or ease of use.
1.2 Consulting/Implementation Services
The Consulting/Implementation Services provide for support over and above those
described in Section 1.1 as Casual Consulting and comprise the following
services:
o General Consulting Services
System functionality requires change and expansion with time. The SVSA/BSS
system is very flexible for adding and modifying functionality. This service
will provide the ISO with a detailed analysis of how a required improvement may
be best implemented in the system.
o Programming Services
As a result of the Consulting Services the ISO may decide to hire ABB for the
implementation of the required changes. Depending on the nature of the change,
ABB can provide this service on either a time and material or a fixed cost
basis.
o Upgrade / Enhancement Implementation
As a result of an upgrade notification, the ISO may decide to hire ABB for the
implementation of the required change. Depending on the nature of the upgrade,
ABB can provide this service on either a time and material or a fixed cost
basis.
o Operating System Upgrades
ABB supports operating system upgrades services to the ISO which cover both the
main operating system and layered products upgrade as well as any modifications
to ABB software which may be necessary as a consequence of the operating system
upgrade.
o Configuration Engineering / Consulting
During the life of the system, it is normal to extend the initial system
configuration by adding or replacing processors, peripherals, memory, etc. ABB
will provide consulting services to determine:
(C)ABB Poorer T&D Company Inc. 1996. All rights reserved.
ISO SI/SA/BSS Systems_____ Software Maintenance Agreement ____5
a) Best equipment choice for the desired additional
capacity/functionality.
b) Effect if any, on the ISO SVSA/BSS system software configuration.
c). Required additional software modules if any.
2. Staff
ABB shall supply the services of professional staff required to carry out
the tasks requested by the ISO.
ABB will designate primary and secondary contacts for the ISO for
maintenance and support.
The ISO will designate a qualified maintenance contact who will act as
ISO's liaison with ABB on all matters pertaining to maintenance and support.
3. Service Procedure
The ISO will report a service request by telephone followed by a confirming
detailed written report or description of the task along with supporting
material requested by ABB'S primary contact, necessary for investigating the
problem.
ABB will allocate the staff and computer resources required to respond to
the service request. ISO agrees to provide the necessary assistance and
information to assist ABB in providing the required service.
4. Scope of Support
ABB will provide support and services associated as defined below.
ABB will provide pre-allocated support to maintain the software supplied by
the ISO Alliance under the ISO SVSA/BSS contract as described in this agreement.
This support will include:
- Casual Consulting Service.
- Program Fixes.
- Program Upgrade Notification.
- Program Upgrades.
- General Consulting Services.
(C)ABB Power TSO Company Inc. 1996. All rights reserved.
6_______Software Maintenance Agreement ISO SI/SA/BSS System
- Programming Services.
- Upgrade and Enhancement Implementation.
- Operating System Upgrades.
- Configuration Engineering and Consulting.
- Four (4) hour response time to trouble calls.
All services provided beyond the pre-allocated support hours will be
offered on a dme and material or fixed-price basis.
The source code for Program Upgrades will be provided free of charge to the
ISO. Program Enhancements will be offered to the ISO at an additional charge.
This service requires that the ISO arrange for and maintain a dial-up or
data link connection to the ABB support site(s).
This service requires that the ISO maintain the SI/SA/BSS hardware at the
level recommended by the hardware vendor.
5. Prices and Terms
The following describes the fees and terms associated with this service
agreement. 5.1 Price
The annual and discounted multi-year fees for this service agreement are
listed in attached Exhibit SMA-1.
These fees do not include any expenses associated with travel to the ISO's
site or work beyond the number of hours specified or provided for.
The fee for services beyond those described in Exhibit SMA-1 will be
provided at the current ISO Alliance Standard Labor Rates.
5.2 Term of Maintenance Service
Maintenance service will be provided for a period of 6 years (72 months)
from the date of system acceptance for the ISO SI/SA/BSS System.
(C)ABB Power T&D Company Inc. 1996. All rights reserved.
ISO SI/SA/BSS Systems Software Maintenance Agreement 7
5.3 Terms of Payment
The ISO agrees to pay ABB the fees stated in Exhibit SMA-1 within 30 days
after award of the ISO SI/SA/BSS contract All fees are expressed exclusive of
any taxes. Any applicable taxes will be paid by the ISO.
5.4 Expenses
All actual and verifiable travel and subsistence expenses, when visiting
ISO premises, and the cost of shipping materials to the ISO's premises will be
paid by the ISO. The travel expenses will be based on travel from the home base
location of the relevant staff. An administrative service fee of fifteen (15%)
percent will be added to all the travel and living expenses.
6. Liability
The maximum liability of ABB for any direct damages sustained by the ISO
under this Agreement arising from ABB'S negligence shall in no circumstance
exceed the amount of the annual maintenance fee for Basic System Support payable
by the ISO to ABB. The ISO and ABB shall in no event be liable one to the other
for loss of revenue, profit, anticipated profit or indirect, incidental, special
or consequential damages, including but not limited to, any losses to ISO
resulting from lost computer time or the destruction or damage of records, or
any claims or demands made against the ISO by a third party. ABB shall maintain
public liability and property damage insurance in reasonable limits and shall
maintain proper worker's compensation insurance covering all employees
performing work under this Agreement and, upon request by ISO, shall furnish
Certificates of Insurance evidencing such coverage.
7. Warranty
Supplier warrants that all services performed pursuant to this Agreement
shall be performed with the highest degree of skill and care required by good
and sound professional procedures and practices prevailing at the time when the
services are performed and shall meet the requirements of this Agreement. In the
event that any services performed pursuant to this Agreement or otherwise at
Supplier's prevailing time and material rates fail to meet said requirements.
Supplier shall immediately correct and/or re-perform any such services and
correct the work or portion thereof affected by the nonconforming services.
(C)ABB Power T&O Company Inc. 1996. All rights reserved.
Software Maintenance Agreement
ISO SI/SA/BSS System
Exhibit SMA-1
ISO Scheduling and Business (SI/SA/BSS) SYSTEM
SOFTWARE MAINTENANCE AGREEMENT PRICING
Year after System Acceptance
<Table>
<Caption>
Basic SMA 1st 2nd 3rd 4th 5th 6th
Addn'l Hrs/Yr $ 200,000 $ 210,000 $ 220,500 $ 231,525 $ 243,101 $ 255,256
Third Party Software $ 800,000 $ 840,000 $ 882,000 $ 617,400 $ 648,270 $ 680,684
TOTAL $ 270,991 $ 284,541 $ 298,768 $ 313,706 $ 329,391 $ 345,861
GRAND TOTAL $1,270,991 $1,334,541 $1,401,268 $1,162,631 $1,220,763 $1,281,801
$7,6' 71,993
</Table>
TOTAL PREPAID AMOUNT
(10% DISCOUNT)
$ 6.904.794
Note:
1. Pre-allocated support hours may be used at the ISO's discretion for services
described in Scope of Support (Section 4). The above price includes
pre-allocated hours (Addn'l Hrs/Yr) of 3600 Hrs/Yr for years 1-3 and 2400
Hrs/Yr for years 4-6. Un-used pre-allocated support hours cannot be carried
over from year to year and cannot be used for formal training.
2. The pricing provided above reflects a 10% discount for prepayment and
therefore is only valid when purchased with the original contract and is
only valid if ISO purchased a 6 year pre-paid maintenance contact. Payment
for the Total Prepaid Amount is due within 30 days of contract signing.
AM
ANNEX F
WSCC SUBREGION MAPS
ANNEX G
THIRD PARTY SOFWARE LICENSES
[To Be Provided By Supplier Within Two Weeks of Contract Date]
ANNEX H
POTENTIAL CONFLICTS OF INTEREST
None. However, the following personnel will be participating in
the Work and have participated in activities that could present
the appearance of a conflict of interest.
Paul Gribik, a Perot Systems' associate, has performed consulting services for
Southern California Edison and Pacific Gas and Electric which directly and
indirectly related to the WEPEX. These consulting services involved congestion
management protocols and an analysis of optimal power flow methods.
Perot Systems associates, Dariush Shirmohammadi and Ali Vojdani, participated
significantly in Electric Power Research Institute (EPRI) research project
RP8501-2, "Transmission Dispatch and Congestion Management System." Purchaser
was represented on the project's Industry Advisory Board. In addition. Dr.
Vojdani participated in a proposal to WEPEX for membership in EPRI Grid
Operations and Planning R&D portfolio.
ANNEX I
PURCHASER'S EQUAL OPPORTUNITY PURCHASING POLICY
ISO ALLIANCE LLC (hereinafter "Supplier") AND SUBCONTRACTORS OF ALL TIERS
MUST COMPLY WITH PURCHASER'S EQUAL OPPORTUNITY PURCHASING POLICY IN THE AWARD OF
ALL SUBCONTRACTORS AND SUB-SUBCONTRACTS. This policy requires that Women,
Minority and Disabled Veteran Business Enterprises (WMDVBEs) shall have maximum
practicable opportunity to participate in the performance of the work.1
Supplier shall provide a separate, signed Subcontracting Plan consisting of
either: (i) a specific list of subcontractors and sub-subcontractors who will
participate in the performance of the work, on the form attached as Annex 1-1;
or (ii) a statement setting forth Supplier's goals for WMDVBE subcontracting of
all tiers and setting forth such additional good faith efforts Supplier,
subcontractors and sub-subcontractors will employ to increase the participation
of WMDVBE in the performance of the work.
In the case where Supplier has not submitted a specific list of subcontractors,
prior to requesting bids for any subcontract or sub-subcontractor. Supplier,
subcontractor and sub-subcontractor shall submit to the Purchaser's
Representative a list of prospective WMDVBEs that will be invited to compete for
such subcontracts on the form attached as Annex 1-1.
Additionally, with each bill Supplier shall submit an updated List of
Subcontractors/Subsuppliers and Disbursement Record with a current accounting
of actual subcontractor payments as of the date of the application (Annex 1-1,
column 6).
- ---------
1 WMDVBEs must be verified pursuant to the procedures prescribed in Section 2
of CPUC General Order 156.
[GRAPHIC OMITTED]