FW: AMENDMENT TO PXJPEROT IT SERVICES AGREEMENT
Page 1 of 1
From: Shirmnohammadi, Dariush
To: dayee(calpx.com
Cc: Chung, Bonnie
Subject: FW: AMENDMENT TO PX/PEROT IT SERVICES AGREEMENT
Sent: 2/5/01 11:46 AM
Importance: Normal
Dan,
Sorry to bother you. But based on Chuck, Bonnie will print you a copy
of this e-mail to sign. Lawyers!!! Dariush
-----Original Message-
From: Daniel_A_Yeegcalpx.com [mailto:Daniel A Yeecalvx.com
Sent: Friday, February 02, 2001 5:20 PM
To: dariush.shirmohammadigps.net
Cc: GeorgeSladojecalpx.com; J_IYurkaningcalpx.com; Lynn Millerecalpx.com;
Susan_D_Rossi~calpx.com
Subject: AMENDMENT TO PX/PEROT IT SERVICES AGREEMENT
DARIUSH:
Effective immediately, you are unconditionally released from the requirements
of Section 2.9 of the IT Services Agreement between CalPX and Perot Systems
Corporation (dated February 28, 2000).
You may proceed to solicit interests and offer employment to'CaIPX employees.
Dan Yee
CIO /s/
CALIFORNIA POWER EXCHANGE
dyee~calpx.com
626) 537-3132
INFORMATION TECHNOLOGY SERVICES AGREEMENT
EFFECTIVE AS OF FEBRUARY 28, 2000
BETWEEN
CALIFORNIA POWER EXCHANGE CORPORATION
AND
PEROT SYSTEMS CORPORATION
<Table>
Article 1
Definitions, Agreement and Term
1.1 Certain Definitions ....................................................1
1.2 Agreement ..............................................................1
1.3 Tenn ...................................................................1
Article 2
Account Management and Personnel
2.1 Account Manager .......................................................1
2.2 Change of Account Manager .............................................1
2.3 Perot Systems Key Employees ...........................................2
2.4 PSC Personnel .........................................................3
2.5 Conduct and Removal of PSC Personnel ..................................3
2.6 CalPX Representative ..................................................4
2.7 Transfer of Personnel .................................................4
2.8 Subcontractors ........................................................4
2.9 Restrictions on Hiring ................................................5
Article 3
Services
3.1 Base Services .........................................................5
3.2 Service Levels ........................................................6
3.3 Additional Services ...................................................7
3.4 Change Control Procedure ..............................................8
3.5 IT Procurement Services ..............................................10
3.6 Management Procedures Manual .........................................10
3.7 Reports ..............................................................10
3.8 Improved Technology ..................................................10
3.9 Changes in Law and Regulations .......................................10
3.10 TechnicalStandards ...................................................11
3.11 Knowledge Sharing ....................................................11
3.12 Customer Satisfaction ................................................11
3.13 Regular Improvement ..................................................12
Article 4
CaIPX Responsibilities
4.1 Cooperation ..........................................................12
4.2 Access to Software ...................................................13
4.3 Access to CalPX Facilities ...........................................13
</Table>
<Table>
4.4 Access to Technology .................................................14
4.5 Required Improvements ................................................14
Article 5
Payments to Perot Systems
5.1 Base Services Fees....................................................15
5.2 Additional Services Charges ..........................................15
5.3 Performance Bonuses and Credits ......................................15
5.4 Reimbursable Expenses ......... ......................................16
5.5 Taxes ................................................................16
5.6 Cost of Living Adjustment ............................................16
5.7 Time of Payment ......................................................17
5.8 Audit of Charges .....................................................17
5.9 Pass-Through Expenses ................................................17
5.10 Adjustment of Budget .................................................17
5.11 No Other Charges......................................................18
5.12 Fee Disputes..........................................................18
5.13 Proration ............................................................19
5.14 Unused Credits .......................................................19
5.15 Retention of Records . ...............................................19
Article 6
Confidentiality, Proprietary Rights and Audit Rights
6.1 CalPX Data ...........................................................19
6.2 Confidential Information..............................................20
6.3 CalPX Proprietary Software ...........................................22
6.4 Perot Systems Software and Perot Systems Tools .......................22
6.5 Rights in Developed Software .........................................23
6.6 Know-How .............. ..............................................25
6.7 Audit of CalPX's Business ............................................26
6.8 Data Security ........................................................26
6.9 Safety and Security Procedures........................................26
6.10 Security Relative to CalPX Competitors ...............................26
Article 7
Performance Review and Termination
7.1 Performance Review ...................................................27
7.2 Dispute Resolution ...................................................27
7.3 Arbitration...........................................................27
7.4 Termination for Cause.................................................28
</Table>
<Table>
7.5 Termination for Non-Payment ..........................................28
7.6 Termination for Insolvency ...........................................28
7.7 Termination for Convenience ..........................................28
7.8 Termination for Causing Failure of Critical Services .................29
7.9 Force Majeure Termination Provision ..................................30
7.10 Continuity of Services................................................30
7.11 Transition Obligations ...............................................30
7.12 Force Majeure ........................................................32
Article 8
Indemnities
8.1 Bodily Injury and Property Damage Indemnity ..........................32
8.2 Intellectual Property Indemnity ......................................33
8.3 Employment Indemnity .................................................33
8.4 CalPX Business Risk Indemnity ........................................34
8.5 Other Perot Systems Indemnities.... ..................................34
8.6 Indemnification Procedures .... ......................................34
Article 9
Liability
9.1 Limitation of Liability...............................................35
9.2 Limitation on Type of Damages.........................................35
9.3 Exclusions .... ......................................................35
9.4 Year 2000 Problems .... ..............................................35
Article 10
Warranty
10.1 By Perot Systems .....................................................36
10.2 By Each Party ......... ..............................................36
10.3 Disclaimer of Warranty ........ ......................................37
10.4 Certain Covenants ........ ...........................................37
Article 11
Insurance
11.1 Insurance ..... ......................................................38
</Table>
<Table>
Article 12
Miscellaneous
12.1 Relationship of Parties ..............................................39
12.2 Notices ..............................................................40
12.3 Assignment ...........................................................40
12.4 Severability..........................................................41
12.5 Captions .............................................................41
12.6 Modification; Waiver .................................................41
12.7 No Third-Party Beneficiaries .........................................41
12.8 Governing Law ........................................................41
12.9 Consents, Approvals, Requests and Opinions ...........................41
12.10 Survival .............................................................41
12.11 Sole and Exclusive Venue .............................................42
12.12 Covenant of Further Assurances .......................................42
12.13 Negotiated Terms .....................................................42
12.14 Remedies Cumulative...................................................42
12.15 Conflict of Interest .................................................42
12.16 Export................ ...............................................42
12.17 Entire Agreement......................................................42
12.18 Media Releases........................................................43
12.19 Task Order No. 5......................................................43
Schedules
1.1 Definitions
1.2 Excluded Services
2.3 Personnel
2.4 Key Employees
2.5 Corporate Information Securities Standards, Guidelines & Procedures
2.7 Transfer of Employees
3.1 Base Services
3.2 Service Levels
4.2 Managed Software
4.4 CalPX Technology
4.5 Required Improvements
5.1 Service Charges
5.2 Perot Systems Standard Commercial Rates
5.4 CalPX Expense and Reimbursement Policy
7.3 Supplemental Procedures for CalPX Disputes
7.8 Disruption of Critical Services
</Table>
INFORMATION TECHNOLOGY SERVICES AGREEMENT
This Information Technology Services Agreement ("Agreement"), dated as of
February 17, 2000 (the "Agreement Date"), is between Perot Systems Corporation
("Perot Systems"), a Delaware corporation with its principal place of business
at 12404 Park Central Drive Dallas, Texas 75251, and the California Power
Exchange Corporation ("CaIPX"), a California nonprofit public benefit
corporation with its principal place of business at 200 South Los Robles Avenue,
Suite 400, Pasadena, California 91 101.
Article 1
Definitions, Agreement and Term
1.1 Certain Definitions. The terms set forth in Schedule 1.1 are defined as
set forth in Schedule 1.1.
1.2 Agreement. CalPX shall purchase all of its requirements for information
technology services related to application maintenance, application
development, program management and computer operations from Perot
Systems during the Term in accordance with the terms of this Agreement,
except for the information technology services described in Schedule 1.2
("Excluded Services").
1.3 Tern. The term of this Agreement shall begin on February 28, 2000 at
12:01 a.m., PST ("Effective Date") and shall end on February 27, 2003 at
11:59 p.m., PST (the "Initial Term") unless earlier terminated in
accordance with the terms of this Agreement.
Article 2
Account Management and Personnel
2.1 Account Manager. Perot Systems shall designate an Account Manager
("Account Manager") who shall be directly responsible for coordinating,
managing and supervising the delivery of the Services and shall have full
authority to act on Perot Systems' behalf with respect to all matters
relating to this Agreement. The Account Manager shall work with the CalPX
Representative to address CalPX's information technology issues and
strategies and the parties' relationship under this Agreement. The
initial Account Manager shall be Dariush Shirmohammadi.
2.2 Change of Account Manager.
a. Unless CalPX agrees, Perot Systems shall not replace or reassign
the Account Manager for a period of not less than 12 months after
the date of his or her assignment to the CaIPX account unless such
Account Manager (a) voluntarily resigns his or her employment or
terminates his or her contract of engagement with Perot Systems,
(b) is dismissed by Perot Systems for misconduct, (c) fails to
perform his or her duties and responsibilities pursuant to this
Agreement, (d) dies or
is unable to work due to his or her disability, or (e)
independently initiates a request for reassignment for personal
reasons.
b. Before assigning a replacement Account Manager, Perot Systems
shall (a) notify the CalPX Representative of the proposed
assignment, (b) introduce the individual to appropriate
representatives of CalPX, and (c) provide the CalPX Representative
with the qualifications and any other appropriate information
regarding the individual that may be requested by the CalPX
Representative. In the event the CalPX Representative does not
approve of an individual which Perot Systems proposes to appoint
as an Account Manager, Perot Systems shall in good faith select an
alternate candidate and shall follow the procedure set forth in
this subsection with respect to such candidate.
2.3 Perot Systems Key Employees. With respect to the persons identified in
Schedule 2.4 (the "Key Personnel"), the parties agree as follows:
a. The individuals serving as Key Personnel shall each be dedicated
to the CalPX account on a full-time basis.
b. Before assigning an individual, other than those individuals named
in Schedule 2.4 as Key Personnel, as a replacement for any Key
Personnel, Perot Systems shall (a) notify the CalPX Representative
of the proposed assignment, (b) introduce the individual to the
CalPX Representative and, (c) provide the CalPX Representative
with the qualifications and any other appropriate information
regarding the individual that may be requested by the CalPX
Representative. If the CalPX Representative does not approve of
the assignment of such individual as Key Personnel, Perot Systems
shall in good faith select an alternate candidate and shall follow
the procedure set forth in this subsection with respect to such
candidate.
c. Unless CalPX agrees otherwise, Perot Systems shall not replace or
reassign any individual assigned to the CalPX account as Key
Personnel during a period of 12 months from the date of his or her
assignment as Key Personnel unless such individual (a) voluntarily
resigns from, or terminates his or her contract of engagement
with, Perot Systems, (b) is dismissed by Perot Systems, (c) fails
or is not qualified to perform his or her duties and
responsibilities pursuant to this Agreement, (d) dies or is unable
to work due to his or her disability, (e) independently initiates
a request for reassignment for personal reasons, or (f) the
services of such Key Personnel, in Perot Systems' reasonable
opinion and with the concurrence of the CalPX Representative, are
no longer required for the performance of this Agreement.
d. If, in CalPX's opinion, any individual assigned to the CalPX
account as Key Personnel should not remain assigned to the CalPX
account, then CalPX shall advise Perot Systems of such opinion,
and Perot Systems shall promptly investigate
2
the matter and take appropriate action which may include (a)
removing such individual from his or her status as Key Personnel
and notifying CaIPX of such removal and replacing such individual
with another qualified individual; or (b) other appropriate
disciplinary action.
e. Perot Systems shall maintain recruiting and replacement procedures
for Key Personnel designed to assure an orderly succession in as
prompt a manner as reasonably possible for any Key Personnel who
resign or are replaced.
2.4 PSC Personnel. Perot Systems shall assign qualified personnel as PSC
Personnel to perform the Services under this Agreement. On a quarterly
basis, Perot Systems shall provide to the CaIPX Representative a list of
all PSC Personnel dedicated full-time to the CalPX account.
2.5 Conduct and Removal of PSC Personnel.
a. While on CalPX premises, Perot Systems shall use reasonable
commercial efforts to cause the PSC Personnel to comply with the
reasonable requests and standard rules and regulations of CalPX
regarding safety, health and personal conduct generally applicable
to CalPX and vendor personnel working at such CalPX premises,
including (i) subject to each individual person serving as PSC
Personnel being provided with a copy, complying with the CalPX
Employee Code of Conduct, (ii) wearing an identification badge,
and (iii) otherwise conducting themselves in a businesslike
manner.
b. Perot Systems shall cause the PSC Personnel to comply with (a) the
confidentiality provisions of this Agreement, and (b) CalPX's
computer security procedures, a current copy of which is attached
as Schedule 2.5, as amended by CalPX from time to time.
c. If CalPX reasonably determines that any PSC Personnel are not
conducting themselves in accordance with this Section, CaIPX shall
notify Perot Systems of the non-compliant conduct. Upon receiving
such notice, Perot Systems shall promptly investigate the matter
and take appropriate disciplinary action which may include (a)
removing the applicable person from the CalPX account, providing
CalPX with notice of such removal, and replacing him or her with
another qualified person, or (b) other disciplinary action
reasonably anticipated to prevent a recurrence. If there are
repeated violations of this Section by a particular individual,
Perot Systems shall remove the individual from the CalPX account.
Perot Systems shall notify the CalPX Representative immediately
after dismissing or reassigning any PSC Personnel whose normal
work location is at a CalPX service location. Except as otherwise
approved by CaIPX, those PSC Personnel located on CalPX's premises
may only provide services on such premises which support CalPX's
operations.
3
2.6 CaIPX Representative. CalPX shall designate a representative ("CaIPX
Representative") who shall have overall responsibility for managing and
coordinating the performance of CalPX's obligations under the Agreement,
including determining prioritization of certain of the Services, and
shall have full authority to act on CalPX's behalf with respect to all
matters relating to this Agreement. The CalPX Representative shall work
with the Account Manager to address CalPX's information technology issues
and strategies and the parties' relationship under this Agreement The
initial CalPX Representative shall be Daniel Yee. The CaIPX
Representative may delegate such of his or her responsibilities to
another officer or director of CaIPX with notice to Perot Systems.
2.7 Transfer of Personnel.
(a) Perot Systems shall offer employment to CalPX's employees who are
listed in Part A of Schedule 2.3 in accordance with Perot Systems'
standard employment policies as of the Effective Date, and in
accordance with Schedule 2.7. Such offer of employment shall be
made on or before February 22, 2000. Perot Systems shall request
that these employees accept the offer of employment by the close
of business of CaIPX on February 24, 2000, which acceptance shall
be effective as of 12:01 a.m., PST, on February 28, 2000.
(b) Perot Systems shall use reasonable commercial efforts to engage as
independent contractors or employees the contract personnel who
are listed in Part B of Schedule 2.3 in accordance with Perot
Systems' standard independent contractor agreement. Perot Systems
shall offer to engage or employ such contract personnel, or notify
CalPX of its decision not to engage or employ such contract
personnel, within two business days of the Agreement Date.
(c) Those CalPX employees listed in Schedule 2.3 who accept Perot
Systems' offer of employment are referred to collectively as the
"Transitioned Employees" and those CatPX employees who do not
accept such offers of employment are referred to collectively as
the "Non-Transitioned Employees." CalPX shall cooperate with Perot
Systems in connection with Perot Systems making such offers. CalPX
shall not make any representations to the Transitioned Employees
relating to the terms of employment by Perot Systems. If any
Transitioned Employee is terminated by Perot Systems within six
months after the Effective Date, CalPX shall reimburse Perot
Systems for severance costs as same may be incurred by Perot
Systems in accordance with Perot Systems' standard employment
policies as of the Effective Date. CalPX shall reimburse the
severance paid by Perot Systems after presentation of an invoice
with supporting documentation in accordance with Section 5.7.
2.8 Subcontractors. Perot Systems may engage independent third parties or one
or more of its Affiliates to perform as a subcontractor to Perot Systems
any part of the Services or other obligations to be performed by Perot
Systems under this Agreement, provided that:
4
(a) Perot Systems' Account Manager shall obtain the CalPX
Representative's prior approval of any subcontractor (other than
an Affiliate controlled by Perot Systems) that Perot Systems
reasonably expects, at the time of the initial engagement, shall
be paid more than $250,000 during the term of the agreement under
which such subcontractor is engaged or, in the case of multiple
agreements with a single subcontractor, during any 12 month
period. Such approval shall not be necessary for Affiliates
controlled by Perot Systems unless otherwise agreed in the Change
Control Procedure.
(b) Perot Systems shall be fully responsible for the work and
activities of its subcontractors, including the compliance of such
subcontractors with the terms of this Agreement. Perot Systems
shall use commercially reasonable efforts to keep CalPX's property
free from liens arising in connection with the Services performed
by Perot Systems under this Agreement.
2.9 Restrictions on Hiring. Except as otherwise specifically provided in this
Agreement, Perot Systems and CalPX each agree not to hire or recruit the
other's employees with whom Perot Systems or CalPX came into contact in
connection with the activities contemplated by this Agreement until the
earlier of a) six months after the end of the Term; and b) six months
after such employee is no longer employed by the applicable party,
without, in each case, the prior written consent of the other party.
Article 3
Services
3.1 Base Services. During the Term, Perot Systems shall provide the Core
Services and up to the number of Full-Time Equivalent PSC Personnel shown
in Schedule 5.1 to perform Applications Development services, and
Business Consulting services (collectively, "Base Services") at CalPX's
offices in Alhambra, California; Pasadena, California; Perot Systems'
Richardson Information Management Facility ("RIMF"), and such other Perot
Systems offices and data centers as the parties mutually agree.
(a) Core Services are defined as:
(i) the Program Management Services described in Part A of
Schedule 3. 1;
(ii) the Computer Operations Services described in Part B of
Schedule 3. 1;
(iii) the Applications Maintenance Services described in Part C
of Schedule 3.1; and
(iv) the IT Procurement Services.
(b) Applications Development Services are described in Part D of
Schedule 3. 1; and
(c) Business Consulting Services are described in Part E of Schedule
3.1.
5
3.2 Service Levels.
(a) In the absence of adequate historical data from the operation of
CalPX's Systems, the parties agree to use the service levels set
forth in Schedule 3.2 ("Service Levels") for the Services. These
Service Levels have been selected based upon industry data and a
partial analysis of the operation of CaIPX's Systems and the
number of PSC Personnel assigned to perform the Services. During
the first 120 days after the Effective Date ("Transition Period"),
Perot Systems and CalPX shall diligently and in good faith
negotiate any changes to the Service Levels that are required to
reflect the actual operation of CaIPX's Systems during the
six-month period prior to the Effective Date. After the Transition
Period, Perot Systems shall meet or exceed the mutually agreed
Service Levels with respect to the Services. The addition of any
Service Level not set forth on Schedule 3.3 as of the Effective
Date shall require an amendment to this Agreement.
(b) Perot Systems shall be excused from its obligation to perform the
Computer Operations Services in accordance with the Service Levels
to the extent that it can not meet such Service Levels as a result
of actions or failures to act by CaIPX in accordance with this
Agreement or by a third party other than Perot Systems or PSC
Personnel, including any failure to obtain any access described in
Section 4.2(b) or Force Majeure Event.
(c) As contemplated by the Change Control Procedure, (i) any Change
Order implementing service or resource additions or reductions
requested by CalPX and any other Change Order changing the manner
in which the Core Services are provided by Perot Systems shall
include an appropriate adjustment to the applicable Service
Levels, and (ii) Perot Systems shall review with CalPX as part of
the Change Order Procedure the anticipated effect of such
reduction, addition or change on Perot Systems' ability to meet
the applicable Service Levels.
(d) If Perot Systems fails to meet any Service Level, Perot Systems
shall (i) promptly investigate and perform a root-cause analysis
to identify the cause of the failure; (ii) provide to CalPX a
report on the causes of the problem; (iii) correct the problem, to
the extent such problem is within its control, or take appropriate
steps to cause the problem to be corrected to the extent such
problem is not within its control; (iv) to the extent within its
control, take appropriate preventive measures to reduce the
probability of a recurrence of the problem; (v) take appropriate
actions to mitigate the adverse effects of the problem prior to
its correction; and (vi) periodically advise the CalPX
Representative of the status of remedial efforts being undertaken
with respect to such problems.
6
3.3 Additional Services.
(a) Perot Systems shall provide to CalPX such additional services that
are beyond the scope of the Base Services ("Additional Services")
as Perot Systems and CalPX from time to time agree in writing.
Base Services, Additional Services, and any Transition Assistance
provided under Section 7.11 are collectively referred to herein as
"Services." Upon identifying a need for information technology or
business consulting services outside the scope of the Base
Services, the Account Manager and the CalPX Representative shall
coordinate the preparation of a document identifying, in
reasonable detail, the services to be performed, the specific
hardware, software and third party services to be delivered as
part of such services, and the objective completion criteria to be
applied in connection with such services. This document shall be
reviewed by the IT Steering Committee.
(b) Perot Systems acknowledges and agrees that CalPX prefers to use
commercial off-the- shelf software, rather than custom-designed
solutions, to meet its requirements whenever and wherever
practical, and Perot Systems shall use reasonable commercial
efforts to identify commercial off-the-shelf software products
that are suitable for use by CalPX as part of any proposal to
provide Additional Services.
(c) If CalPX, in its sole and absolute discretion, chooses to
terminate the contract of any third party vendor that is providing
desktop, network or telecommunications information technology
services, or such contract expires in accordance with its terms,
and CalPX (i) desires to obtain such services from another third
party and (ii) determines in its reasonable discretion that Perot
Systems has the appropriate expertise and resources to provide
such services, then CalPX and Perot Systems shall commence good
faith negotiations for Perot Systems to provide such services. In
the event that following such good faith negotiations, the parties
shall not have reached agreement on the terms of Perot Systems
providing such services within 30 days of the commencement of such
negotiations, then CalPX shall have the right to enter into an
agreement with a third party to provide such services; provided
that prior to entering into a definitive agreement for the
provision of such services Perot Systems shall be offered the
opportunity to resubmit another proposal for the provision of such
services. CalPX acknowledges and agrees that Perot Systems has, as
of the Effective Date, the technical capability and experience to
perform the Desktop Support Services and Desktop Procurement
Services.
(d) Additional Services will be performed under individual written
task order ("Task Orders") that are approved and issued in
accordance with this Section 3.3 and the Change Control Procedure.
Each Task Order shall identify, in reasonable detail, the services
to be performed, the specific hardware, software and third party
services to be delivered as part of such services, and the
objective completion criteria to be applied in connection with
such services, in addition to the price, reimbursable expenses and
pass-through expenses to be paid by CalPX for such Additional
7
Services. Perot Systems will commence the Additional Services upon
execution of the Task Order by CalPX and Perot Systems.
3.4 Change Control Procedure.
(a) All Changes (as defined herein) shall be reviewed by the Change
Review Board. All Change Orders shall be reviewed and approved in
writing by the Account Manager and CalPX Representative. The
budgetary and schedule effects of reasonably interrelated Change
Orders shall be aggregated to determine whether the CalPX
Representative or the Change Review Board should review such
Change Orders. The parties shall use their reasonable commercial
efforts to minimize any adjustments to development schedules,
development budget and application requirements. Change Orders may
be approved electronically by the Account Manager and the CalPX
Representative.
(b) During the first 30 days after the Effective Date, Perot Systems
shall prepare and deliver to the Change Review Board, for its
review and approval, the Change Control Procedures to be used
under this Agreement to control Changes in scope, schedule and
cost of the Services. The Change Control Procedures shall provide,
at a minimum, that (i) all Changes, including Changes to the
Change Control Procedures, shall be made pursuant to the Change
Control Procedures, except as may be necessary on an emergency
basis; (ii) no Change which is reasonably expected to materially
or adversely affect the function or performance of any System or
result in a material increase in the charges to CalPX under this
Agreement shall be implemented without the Change Review Board's
approval, except as may be necessary on an emergency basis; (iii)
all Changes, except those made as necessary on an emergency basis,
shall be implemented in accordance with a schedule provided to the
Change Review Board periodically and under circumstances that are
reasonably expected not to interrupt CalPX's business operations
materially; and (iv) the Account Manager shall give the Change
Review Board prompt notice (which may be given orally, provided
that any oral notice is confirmed in writing within five business
days) of any Change made as necessary on an emergency basis.
(c) Changes to the application requirements, development budget, or
development schedule shall be made only by mutual agreement of the
affected parties through the use of a Change Order. All requests
for Changes by a party shall be communicated by the Account
Manager or CalPX Representative, as the case may be, to the CalPX
Representative or Account Manager, as the case may be, or the
Change Review Board as appropriate. No party shall have any
obligation or authority to implement Changes requested through any
other means.
(d) Requests for Change Orders shall be submitted for review in
accordance with the Change Control Procedure, and shall include
the following information: (i) a
8
detailed description of the Change requested, (ii) the business,
technical or financial justification for the Change requested, (iii) the
price, capital and operating costs associated with the Change requested,
(iv) the projected schedule impact of the Change requested, and (v) the
priority of the Change requested.
(e) Within ten business days (or such longer period as is mutually agreeable)
after receiving a request from CaIPX for a Change Order, Perot Systems
shall prepare and provide to CaIPX's Representative or the Change Review
Board a document summarizing the effect, if any, of the proposed Change
on (i) the development schedule, including but not limited to CalPX's
obligations under the development schedule, (ii) the functionality and
requirements of the applicable System to be delivered, and (iii) the
development budget. In addition, Perot Systems shall inform CalPX
regarding any other business impact that Perot Systems believes to be
relevant to an evaluation of the Change Order. The CalPX Representative
or the Change Review Board, as the case may be, shall review the
information and, as the Change Review Board deems necessary, revise it at
the next succeeding Change Review Board meeting and promptly forward its
report on the proposed Change to CalPX. Within ten business days or such
longer period as is mutually agreeable to the parties, after receiving
such information, CalPX shall approve, reject or withdraw the request
for such Change Order. CalPX's failure to approve, reject or withdraw the
request within the applicable time period shall be deemed a withdrawal of
such request.
(f) Upon submitting a request for a Change Order initiated by Perot Systems,
Perot Systems shall provide to CalPX a document summarizing the effect,
if any, on (i) the development schedule, including but not limited to
CalPX's obligations under the development schedule, (ii) the
functionality and requirements of the applicable System to be delivered,
and (iii) the development budget. In addition, Perot Systems shall inform
CaIPX regarding any other business impact that it believes to be relevant
to an evaluation of the Change Order. The Change Review Board shall
review the information and, as the Change Review Board deems necessary,
revise it at the next succeeding Change Review Board meeting and promptly
forward its report to CalPX. Within ten business days after receiving
such information (or within ten business days after receiving the Change
Review Board's report, in the case of a Change request reviewed by the
Change Review Board), CalPX shall approve or reject the requested Change
Order. CalPX's failure to approve or reject the requested Change Order
within the applicable time period shall be deemed a rejection of such
request.
(g) In any case where no final agreement has been reached on a Change request
but the CalPX Representative nonetheless orders Perot Systems to carry
out such Change, Perot Systems shall use its commercially reasonable
efforts to carry out such Change within the time requested by CalPX at
the price and related terms proposed
9
by Perot Systems, and either party may refer the disputed Change request
to the procedures provided in Section 7.2 and 7.3.
3.5 IT Procurement Services. At CalPX's written request, Perot Systems shall
purchase, lease or license equipment, software, services and supplies
from Perot Systems' suppliers on behalf of CalPX and for CalPX's account
or shall facilitate the purchase, lease or license of such items by CalPX
at the prices available to Perot Systems (the "IT Procurement Services").
3.6 Management Procedures Manual. On or before the end of the Transition
Period and as part of the Services, (1) CalPX and Perot Systems shall
establish procedures pursuant to which mutually agreed policies of CalPX
and Perot Systems shall be adhered to during the Term, and (2) Perot
Systems shall prepare and deliver to CaIPX, for CalPX's approval, a
management procedures manual (the "Management Procedures Manual")
generally describing (a) the Services, (b) the computer hardware and
software environments in which the Services will be performed, (c) the
documentation, if any, which provides further details regarding the
Services or computer hardware and software environment in which the
Services will be performed, (d) the procedures Perot Systems intends to
use to manage the Services, and (e) the management reporting system that
Perot Systems shall use to manage this Agreement and communicate to
CalPX. Perot Systems and CalPX shall update the Management Procedures
Manual whenever necessary to reflect any changes in the operations or
procedures described therein within a reasonable time after such changes
are made.
3.7 Reports. Perot Systems shall provide to CalPX performance, utilization
and status reports relating to the Services and Service Levels as
requested by CalPX in a form acceptable to CalPX.
3.8 Improved Technology. As part of the Services, Perot Systems shall provide
CalPX with information about, and recommendations regarding, information
technology developments that could reasonably be expected to have a
favorable impact on CalPX's information technology operations for CalPX's
consideration and evaluation, including information regarding any new
information technology developments that are not subject to third party
confidentiality restrictions made generally available by Perot Systems
for use by Perot Systems' customers. In addition, Perot Systems shall
meet with CalPX at least twice per year during the Term to inform CalPX
of any new information technology developments that are not subject to
third party confidentiality restrictions which Perot Systems is
developing and any appropriate information processing trends and
directions of which Perot Systems is aware.
3.9 Changes in Law and Regulations.
(a) Perot Systems shall identify and notify CalPX of any changes in
any laws or regulations applicable to Perot Systems or its
operating procedures that could adversely affect the use or
delivery of the Services. CalPX shall identify and notify Perot
Systems of any changes in any laws or regulations applicable to
CalPX or its operating procedures that require changes to the way
in which the Services are
10
provided by Perot Systems. Perot Systems and CaIPX shall work
together to identify the impact of any such laws or regulations on
how CalPX uses, and Perot Systems delivers, the Services. Each
party shall be responsible for any fines and penalties arising
from its failure to comply with any laws or regulations applicable
to its business operations relating to the delivery or use of the
Services.
(b) If any changes in laws or regulations prevent Perot Systems from
performing its obligations under this Agreement, Perot Systems
shall (i) use commercially reasonable efforts to continue to
perform the Services and (ii) develop and, upon CalPX's approval,
implement a suitable workaround for its obligations under this
Agreement that cannot be performed until such time as Perot
Systems can perform its obligations under this Agreement without
such workaround. If the applicable change in law or regulatory
requirements is applicable to Perot Systems, then Perot Systems
shall develop and implement such workaround at its own expense. If
the applicable change in law or regulatory requirements is
applicable to CalPX and such change results in additional costs to
Perot Systems to perform its obligations under this Agreement,
then CalPX shall pay Perot Systems for its incremental costs
incurred in connection with making the appropriate changes as part
of the Base Services or as an Additional Service, as the case may
be.
3.10 Technical Standards. Perot Systems shall comply with CaIPX's information
management technical architecture and product standards in effect on the
Agreement Date and as amended pursuant to the Change Control Procedure
during the Term.
3.11 Knowledge Sharing. At least once every year, and on request after at
least 30 days' notice from CalPX, Perot Systems shall meet with
representatives of CalPX to explain, at an executive level, how (1) the
Systems are designed and operate, and (2) the Services are provided.
3.12 Customer Satisfaction.
(a) Within 90 days after the Effective Date, Perot Systems shall
conduct a survey to measure end-user satisfaction with the
Services at each CalPX site. The survey shall contain questions,
and shall be administered according to procedures, mutually agreed
by CalPX and Perot Systems within 60 days after the Agreement
Date. Perot Systems shall promptly share the results of each such
survey with CalPX, including, without limitation, copies of the
user questionnaires completed by any CalPX personnel.
(b) At least annually during the Term, Perot Systems shall conduct a
survey to measure end-user satisfaction with the Services and
Perot Systems' responsiveness to requests for Services at each
CalPX site. The survey shall contain questions to be agreed upon
by CalPX and Perot Systems no later than 30 days before the date
on which the survey is scheduled to begin. Perot Systems shall
promptly share the
11
results of each such survey with CalPX, including, without
limitation, copies of the user questionnaires completed by any
CalPX personnel. The content, scope, and method of each such
survey shall be consistent with the baseline customer survey
conducted under Section 3.12(a), and the timing of the surveys
shall be subject to mutual agreement.
(c) During the last six months of the Term, CalPX may initiate at its
expense a third-party review of the Services being performed by
Perot Systems. If CalPX initiates such a review, CalPX shall,
within five business days after sending notice of such election,
provide Perot Systems with a list of three unbiased third party
benchmarkers acceptable to CaIPX, none of whom shall be
competitors to Perot Systems. Perot Systems shall select one of
such third party benchmarkers to be engaged by CalPX. CalPX and
Perot Systems shall negotiate in good faith to determine jointly
the information to be provided to the benchmarker (the "Benchmark
Information") and the scope and cost of the review, and shall (1)
review the Benchmark Information and (2) schedule a meeting to
address any issues either party may have with respect to the
Benchmark Information. The benchmarker shall review the scope and
level of Services then being provided under this Agreement, the
total number of personnel assigned to perform those Services, and
the charges for the Services and any other appropriate information
related to this Agreement and compare the scope and level of
Services, the total number of personnel assigned to perform such
Services, and the charges for the Services against similar
services that are performed by other full service information
technology outsourcing providers who compete with Perot Systems in
similar markets in a similar period. The benchmarker results shall
be treated as Confidential Information.
3.13 Regular Improvement. Perot Systems shall, on a regular basis (1) identify
processes, techniques, equipment and software that could improve the
Services and Service Levels and (2) recommend for adoption or acquisition
non-confidential processes, techniques, equipment, software and tools
used by Perot Systems that could improve or lower the cost of CalPX's
technology operations. Perot Systems shall, from time to time, include
the information required by this Section 3.13 in appropriate reports
provided to CalPX under this Agreement.
Article 4
Ca1PX Responsibilities
4.1 Cooperation. CalPX shall keep Perot Systems informed, as reasonably
appropriate, about those aspects of CalPX's business that could
reasonably have a material effect on the demand for, or provision of, the
Services. CalPX shall cooperate with Perot Systems to ensure that the
Change Control Procedure and other processes relating to the Services
that are dependent upon information from CalPX are not unreasonably
delayed by CalPX.
12
4.2 Access to Software.
(a) CalPX Proprietary Software. CalPX shall provide Perot Systems with
access to, and the necessary rights to operate, modify, and
enhance, its proprietary software listed in Part A of Schedule 4.2
and such other proprietary software of CalPX as is necessary for
Perot Systems to perform its obligations under the Agreement
("Ca1PX Proprietary Software"). CalPX shall pay any access or
other fees associated with obtaining such rights to the CalPX
Proprietary Software. CalPX shall pay all license, maintenance and
other fees associated with the CalPX Proprietary Software.
(b) CalPX Vendor Software. CalPX shall provide Perot Systems with
access to, and the necessary rights to operate and, where
necessary to perform the Services to modify and to enhance, its
vendor software listed in Part B of Schedule 4.2 and such other
vendor software as is necessary for Perot Systems to perform its
obligations under the Agreement ("CaIPX Vendor Software") and
shall pay any access or other fees associated with obtaining such
rights to the CalPX Vendor Software. CalPX shall pay all license,
maintenance and other fees associated with the CalPX Vendor
Software. Except as contemplated by this Section 4.2(b), Perot
Systems' access to, and other rights in respect of, CalPX Vendor
software shall be subject to the terms of the applicable software
license agreement between CalPX and the applicable vendors. If
CaIPX is unable to obtain the rights described in this paragraph
(b), (i) Perot Systems shall be relieved of any obligations under
this Agreement that cannot be performed in the absence of such
rights without violating a third person's intellectual property or
other rights, and (ii) CalPX and Perot Systems shall work together
in good faith to find an alternative way for CalPX to obtain any
Services that Perot Systems cannot perform in a manner that is
reasonably satisfactory to both parties.
4.3 Access to CalPX Facilities. CalPX shall provide Perot Systems access to
its facilities and shall provide to all PSC Personnel performing Services
at such facilities, without charge, such office furnishings, janitorial
service, telephone service, utilities (including air conditioning) and
office-related equipment (including but not limited to personal computers
and related software, peripherals and supplies and facsimile machines),
supplies, and duplicating services as Perot Systems may reasonably
require in connection with the activities contemplated hereunder. Unless
otherwise agreed, CalPX shall not be obligated to provide such facilities
for PSC Personnel performing (i) Services at the RIME (or another Perot
Systems data center), (ii) Business Consulting Services, or (iii) any
Services on a part-time basis, except as may be necessary on a
short-term, shared basis. CalPX shall procure and purchase at its sole
cost and expense all the necessary hardware and software of CaIPX
reasonably required by Perot Systems to provide the Services. CalPX shall
provide such access 24 hours a day, seven days a week. Perot Systems
shall obey all generally applicable rules and procedures at any CalPX
facility of which CalPX has notified Perot
13
Systems. CalPX agrees that such CalPX facilities shall comply with all
applicable laws and regulations. Access and equipment requirements shall
be handled through the Change Control Procedure. PSC Personnel shall
receive similar technologies to those currently in use or contemplated at
CalPX.
4.4 Access to Technology. CalPX shall provide Perot Systems with access to
its hardware, equipment, and technology related items and services listed
in Schedule 4.4 and such other hardware, equipment and technology related
items and services as otherwise reasonably necessary for Perot Systems to
perform its obligations under this Agreement (the "Ca1PX Technology").
CaIPX shall pay all costs and expenses, including without limitation,
maintenance costs, associated with the CalPX Technology.
4.5 Required Improvements. CalPX shall implement, or cause to be implemented,
each of the process, infrastructure, testing and project management
improvements described in Schedule 4.5, and the initiation of the
maintenance windows set forth in Schedule 4.5 ("Required Improvements").
If CalPX does not implement, or cause to be implemented the Required
Improvements, the provisions of Section 5.3(b) shall not apply until
after the Required Improvements have been implemented. The estimates of
additional expenditures, implementation times and requirements for
additional Full-Time Equivalent resources set forth in Schedule 4.5 as to
Required Improvements are subject to change in accordance with the Change
Control Procedures. CalPX agrees to provide funding for those Required
Improvements that require additional expenditures or additional external
resources. Upon the request of CalPX, Perot Systems agrees to provide the
additional external resources as Application Development and Business
Consulting Services under this Agreement. Expenditures for hardware,
software and third party services to implement the Required Improvements
shall be the responsibility of CalPX.
14
Article 5
Payments to Perot Systems
5.1 Base Services Fees.
(a) During the Transition Period and thereafter until the Required
Improvements are completed, Perot Systems shall invoice CalPX on
or before the 10th day of each month the Calculated Services Fee
for each of the Core Services, the Application Development
Services and the Business Consulting Services provided during the
previous month. After the Transition Period and the Required
Improvements have been completed, Perot Systems shall invoice
CalPX on or before the 10th day of each month for (i) an amount
equal to the Baseline Budget per month for the Core Services to be
provided during the following month, plus (ii) the Calculated
Services Fee for each of the Application Development Services and
the Business Consulting Services provided during the previous
month.
(b) After the Transition Period and the Required Improvements have
been completed, the invoice for the first month of each calendar
quarter shall reflect any credit due to CalPX, and any additional
amount payable by CalPX, for all adjustments to the previously
invoiced amounts that are required under this Agreement, including
but not limited to any adjustments required pursuant to Section
5.3 (the "Quarterly True- Up"). Perot Systems shall not modify any
previously prepared Quarterly True-Up, subject to the provisions
of Section 5.8.
5.2 Additional Services Charges. During the Term, CalPX shall pay Perot
Systems each month for the Additional Services the amounts agreed to by
CalPX and Perot Systems at the times agreed to by Perot Systems and
CalPX. Additional Services shall be provided on a time and materials
basis using Perot Systems' "Standard Commercial Rates", less a 25%
discount. Perot Systems may adjust the Standard Commercial Rates no more
often than once per year, beginning in the second year of the Term, with
60 days advance written notice.
5.3 Performance Bonuses and Credits.
(a) CalPX and Perot Systems have established the "Baseline Budget" set
forth in Schedule 5.1, which represents CalPX's good faith
projection of the fixed and variable costs and expenses that would
have been incurred or paid by CalPX to perform the Core Services
on a monthly basis in the absence of this Agreement, minus a level
of savings projected in good faith to be achievable as a result of
the Required Improvements and other improvements initiated by
Perot Systems. The Baseline Budget shall be adjusted annually as
provided in Section 5.6.
(b) If during any calendar quarter in which the Calculated Service
Fees for the Core Services (calculated in accordance with
paragraph A of Schedule 5.1) are less than the Baseline Budget for
the Core Services, as adjusted in accordance with Section
15
5.6, for that calendar quarter, then Perot Systems shall credit
Ca1PX an amount equal to one-half of the amount by which the
applicable Baseline Budget exceeds such Calculated Service Fees.
The credit shall be issued on the first invoice issued to CalPX
following the completion of that calendar quarter; provided that
no such credit shall be issued until after the Transition Period
and the Required Improvements have been completed.
(c) If during any calendar quarter the Calculated Service Fees for the
Core Services (calculated in accordance with paragraph A of
Schedule 5.1) are greater than the Baseline Budget for the Core
Services, as adjusted in accordance with Section 5.6, for that
calendar quarter, then CalPX shall pay Perot Systems an amount
equal to one-half of the amount by which the applicable Calculated
Service Fees exceed the applicable Baseline Budget, which amount
shall be included on the first invoice issued to CalPX following
the completion of that calendar quarter.
5.4 Reimbursable Expenses. CalPX shall pay or reimburse Perot Systems for its
reasonable out-of-pocket travel and travel related expenses incurred in
connection with its performance of the Services that arise in connection
with any travel by the PSC Personnel outside of the greater Los Angeles
area requested by CalPX. Notwithstanding the preceding sentence, CalPX
shall not pay or reimburse Perot Systems for travel or travel-related
costs incurred by PSC Personnel assigned to perform the Base Services for
travel within the Los Angeles area. Unless otherwise agreed, any expenses
shall be reimbursed according to CalPX Expense and Reimbursement Policy,
attached as Schedule 5.4, as amended from time to time.
5.5 Taxes. There shall be added to any charges payable by CalPX under this
Agreement, and CalPX shall pay or reimburse to Perot Systems, amounts
equal to any taxes, however designated or levied based upon such charges,
the Services, or this Agreement, including state and local taxes, and any
taxes or amounts in lieu thereof paid or payable by Perot Systems in
respect of the foregoing, excluding franchise taxes and taxes based on
the net income of Perot Systems. Each party shall cooperate with the
other in minimizing any applicable tax and, in connection therewith,
CatPX shall provide Perot Systems any resale certificates, information
regarding out-of-state use of materials, services or sales, or other
exemption certificates or information reasonably requested by Perot
Systems.
5.6 Cost of Living Adjustment. If the Price Index at the end of each one year
period following the Effective Date ("Current Index") is higher than the
Price Index at the beginning of such one year period ("Base Index"),
then, effective as of the end of such one year period, all charges
hereunder shall be increased by the percentage that the Current Index
increased from the applicable Base Index. "Price Index" means the index
entitled "Private Industry, Wages and Salaries, 12-Month Percent Change,
Not Seasonally Adjusted," published by the Bureau of Labor Statistics. If
the publisher of this index should stop publishing or substantially
change the content or format of the index, the parties shall substitute
therefor another comparable measure published by a mutually acceptable
source; provided, however, that if such change is merely to redefine the
base year for the Price Index to
16
another year, the parties shall continue to use the Price Index but
shall, if necessary, adjust the Base Index and Current Index as
reasonably appropriate.
5.7 Time of Payment. All amounts due hereunder shall be due within 30 days
after receipt by CalPX of an invoice therefor. An invoice shall be deemed
to be received in accordance with the terms of Section 12.2, provided
that all invoices shall be addressed to the attention of the CalPX Chief
Financial Officer. CalPX shall deliver a CalPX check to the Account
Manager at CalPX's offices in Pasadena on the due date and Perot Systems
shall not charge CalPX for overnight courier. Amounts not paid when due
shall incur interest until paid at the lesser of (i) 1.5% per month, or
(ii) the maximum rate permitted by applicable law. If any amount not paid
when due under this Agreement is disputed in good faith, interest shall
not begin to accrue until the dispute has been resolved.
5.8 Audit of Charges. Within 30 days after the Effective Date, Perot Systems
and CalPX shall agree as to the documentation that Perot Systems will
provide to CalPX each month in support of its charges under this
Agreement, including, reimbursable expenses. Upon notice from CalPX,
Perot Systems shall provide CalPX and its representatives (collectively,
the "Ca1PX Auditors") with access to such financial records and
supporting documentation as may reasonably be requested by the CalPX
Auditors, and the CalPX Auditors may audit reasonably appropriate books
and records of Perot Systems for the purpose of verifying that any
amounts charged under this Agreement with respect to the Services are
accurate and in accordance with this Agreement. If, as a result of such
audit, CalPX determines that Perot Systems has overcharged or
undercharged CalPX, CalPX shall notify Perot Systems of the amount of
such overcharge or undercharge and Perot Systems or CalPX, as the case
may be, shall promptly pay the amount due. In addition, if any such audit
reveals an overcharge to CalPX of five percent or more of the aggregate
amount of the invoices audited, Perot Systems shall reimburse CalPX for
the cost of such audit.
5.9 Pass-Through Expenses. Perot Systems shall review all IT vendor invoices
for Pass-Through Expenses, including but not limited to invoices
relating to IT Procurement Services, to determine whether the charges
reflected in such invoices comply in all material respects with the
applicable purchase documentation or contract. After completing its
review, Perot Systems shall submit an invoice to CalPX for such IT vendor
invoices, together with Perot Systems' recommendation for payment,
nonpayment, or partial payment, to CalPX twice per month on or about the
fifth and twentieth days of the month for CalPX's review and payment.
CalPX shall promptly review and pay the invoices submitted to it (or
advise Perot Systems' Account Manager that an invoice is not approved,
with an explanation of the reasons for not approving the invoice).
5.10 Adjustment of Budget.
(a) During any 12-month period commencing as of the Effective Date,
CalPX may, in one or more installments, reduce the Baseline Budget
(as adjusted in accordance with Section 5.6) as of the beginning of
such 12-month period by a percentage
17
amount up to a percentage equal to the sum of (i) 5% (the
"Reduction Percentage"), plus (ii) the aggregate number of
percentage points, if any, for all of the unused portions of the
Reduction Percentages with respect to all previous 12-month
periods, provided that CalPX may not exercise such right to reduce
the Baseline Budget until after the Transition Period and Required
Improvements are completed. If during any three calendar month
period commencing after the Transition Period and the Required
Improvements are completed the average number of transactions
settled through CaIPX's settlement system during such three-month
period is less than 50% of the average number of transactions
settled through CalPX's settlement system during the Transition
Period, CalPX and Perot Systems shall negotiate appropriate
adjustments to the Baseline Budget, the number of Full-Time
Equivalent PSC Personnel providing Core Services, the Service
Levels, and Schedule 7.8 provided that the reduction in the number
of transactions settled is the result of circumstances outside
CalPX's reasonable control.
(b) If CalPX elects to reduce the Baseline Budget as provided in
Section 5.10(a), CalPX shall give Perot Systems at least (i) 90
days prior written notice of any budget reduction of 5% or less of
the applicable Baseline Budget, (ii) 135 days prior written notice
of any budget reduction of 5% to 10% of the applicable Baseline
Budget, and (iii) 180 days prior written notice of any budget
reduction of more than 10% of the applicable Baseline Budget. On
the effective date of any reduction in the Baseline Budget, Perot
Systems shall have the right to reduce the number of Full-Time
Equivalent PSC Personnel performing Core Services under this
Agreement, and Perot Systems and CalPX shall adjust the Service
Levels and Schedule 7.8 as appropriate to reflect the staffing
adjustments.
5.11 No Other Charges. There shall be no other charges payable by CalPX other
than those stated in this Article 5, Schedule 5.1 and Schedule 5.2.
5.12 Fee Disputes.
(a) Within 30 days after receiving each invoice, CalPX shall give
notice to Perot Systems of any amount shown in such invoice that
is reasonably disputed in good faith by CalPX, which notice shall
include a reasonably detailed explanation of the disputed amount
and the grounds for the dispute. CalPX's failure to pay amounts
disputed in accordance with this Section 5.12 shall not be grounds
for a claim of breach or suspension of work by Perot Systems so
long as CalPX complies with the provisions of Section 5.12(b).
CalPX shall pay any amounts to Perot Systems within five business
days after such amounts are found to be payable to Perot Systems.
If the aggregate disputed invoiced amounts exceed $120,000, then
CaIPX shall pay all such disputed amounts, on or before 30 days
after giving notice of dispute, into escrow in a major United
States commercial bank with which neither party has significant
dealings, with interest to be allocated to the party entitled to
18
the principal upon resolution of the dispute, which dispute shall
be resolved through good faith negotiation or otherwise in
accordance with Article 7.
5.13 Proration. All periodic fees under this Agreement are to be computed on a
calendar month basis and shall be prorated for any partial month.
5.14 Unused Credits. Any unused credits against future payments owed to either
party by the other pursuant to this Agreement shall be paid to the
applicable party within 30 days after the expiration or termination of
this Agreement.
5.15 Retention of Records. Perot Systems shall retain records and supporting
documentation sufficient to document the Services and the fees paid or
payable by CalPX under this Agreement for a period of seven years after
the expiration or termination of this Agreement.
Article 6
Confidentiality, Proprietary Rights and Audit Rights
6.1 CalPX Data.
(a) All data and information (i) provided by or on behalf of CalPX to
Perot Systems in connection with the Services, (ii) obtained,
developed or produced by Perot Systems as part of the Services, or
(iii) to which Perot Systems has access as a result of providing
the Services ("CaIPX Data") shall remain the property of CalPX or
the third party that owns such data and information. Perot Systems
shall use such CalPX Data solely in connection with the activities
contemplated by this Agreement. The CalPX Data shall be treated as
Confidential Information of CalPX under the Agreement. Perot
Systems hereby irrevocably assigns, transfers and conveys, and
shall cause all PSC Personnel to assign, transfer and convey, to
CalPX without further consideration all of its and their right,
title and interest in and to the CaIPX Data.
(b) At Perot Systems' expense, Perot Systems shall promptly correct
any errors or inaccuracies in the CalPX Data and the reports
delivered to CalPX under this Agreement, to the extent caused by
Perot Systems. At CalPX's request and expense, Perot Systems shall
promptly correct any other errors or inaccuracies in the CalPX
Data or such reports.
(c) Upon request by CalPX at any time during the Term and upon
expiration or termination of the Agreement, Perot Systems shall
(1) promptly return to CalPX, in the format and on the media
requested by CalPX, all or any part of the CalPX Data and (2)
erase or destroy all or any part of the CalPX Data in Perot
System's possession, in each case to the extent so requested by
CalPX, except for (i) archive and backup copies that are not
readily accessible for use, and (ii) business records required by
law to be
19
retained by Perot Systems. Any archival and backup tapes
containing CalPX Data shall be deemed Confidential Information of
CalPX and subject to the provisions of Article 6 and shall be used
by Perot Systems only for back-up and audit purposes.
6.2 Confidential Information.
(a) Confidential Information. Each receiving party shall use at least
the same degree of care, but no less than a reasonable degree of
care, to avoid unauthorized disclosure or use of each disclosing
party's Confidential Information, including any third party
Confidential Information disclosed by the disclosing party, as it
employs with respect to its own Confidential Information of
similar importance. Each receiving party may disclose Confidential
Information only to the other party to this Agreement and its own
officers, directors, and employees and to its consultants,
subcontractors and advisors who reasonably need to know it. Each
receiving party shall be responsible to the disclosing party for
any violation of this Agreement by its officers, directors,
employees, consultants, subcontractors or advisors. No receiving
party may print or copy, in whole or in part, any documents or
other media containing a disclosing party's Confidential
Information, other than copies for its officers, directors,
employees, consultants or advisors who are working on the matter,
without the prior consent of the disclosing party. No receiving
party may use a disclosing party's Confidential Information for
competing with the disclosing party or for any purpose not in
furtherance of this Agreement. The term "Confidential Information"
is defined to mean, with respect to CalPX and Perot Systems, all
information, documents, records and data, in whatever form or
medium (including, without limitation, (i) verbal statements
summarized in writing within 10 business days, (ii) printed and
electronic forms, (iii) handwritten notes or summaries, (iv)
portions of any such items) regarding each other party's (a
"disclosing party") methodologies, financial affairs, business
activities and plans and records identified as confidential in
CalPX's tariff, operating manual and Records Availability Policy
communicated by a disclosing party to a receiving party.
(b) Certain Permitted Disclosures. Each of Perot Systems and CalPX
shall, however, be permitted to disclose relevant aspects of the
other party's Confidential Information to its respective officers,
agents, subcontractors and employees to the extent that such
disclosure is reasonably necessary for the performance of its
duties and obligations under this Agreement; provided, however,
that such party shall take reasonable measures to prevent, and
shall remain responsible for, the disclosure of Confidential
Information of the other party in contravention of the provisions
of this Agreement by such officers, agents, subcontractors (except
as otherwise specifically provided in this Agreement) and
employees.
(c) Disclosures Required by Law. If a receiving party is requested, as
part of an administrative or judicial proceeding, to disclose any
of a disclosing party's
20
Confidential Information, the receiving party shall, to the extent
permitted by applicable law, promptly notify the disclosing party
of such request and cooperate with the disclosing party in seeking
a protective order or similar confidential treatment for such
Confidential Information. The seeking of protective orders shall
be at the expense of the party whose Confidential Information is
at issue.
(d) Exclusions. Confidential Information shall not include information
that (1) was known by the receiving party without an obligation of
confidentiality prior to its receipt from the disclosing party,
(2) is independently developed by the receiving party without
reliance on Confidential Information, (3) is or becomes publicly
available without a breach of this Agreement by the receiving
party, (4) is disclosed to the receiving party by a third person
who is not required to maintain its confidentiality, or (5) is
required to be disclosed by reason of legal, accounting or
regulatory requirements beyond the reasonable control of the
receiving party.
(e) Obligations upon Termination or Expiration. Promptly after the
expiration or termination of this Agreement, except as provided in
Section 6:5 with respect to the Developed Software, each receiving
party shall return or, with the consent of the disclosing party,
destroy all of the disclosing party's Confidential Information,
including any third party Confidential Information in the hands of
either party, except for (i) archive and backup copies that are
not readily accessible for use, and (ii) business records required
by law to be retained by the receiving party.
21
(f) Certain Privileged Information. Perot Systems acknowledges that
CalPX may assert that certain documents, data and databases
created by Perot Systems as part of the Operations Services
provided under this Agreement and all communications related
thereto (collectively, "Privileged Work Product") are subject to
certain privileges under applicable law, including the
attorney-client privilege, and may seek to protect such Privileged
Work Product from disclosure by Rule 26 of the Federal Rules of
Civil Procedure or other applicable rules or laws. CalPX shall
notify Perot Systems of any Privileged Work Product to which Perot
Systems has or may have access. After Perot Systems receives such
notice, Perot Systems shall use reasonable commercial efforts to
limit access to such Privileged Work Product solely to those PSC
Personnel for whom such access is required to fulfill Perot
Systems' obligations under this Agreement. If Perot Systems is
requested to provide any third party with access to Privileged
Work Product, Perot Systems shall, to the extent permitted by
applicable law, promptly notify CalPX and take, at CalPX's
expense, such reasonable actions as may be requested by CalPX to
resist providing such access. Perot Systems shall have the right,
at CalPX's expense, to retain independent legal counsel in
connection with any such request. If Perot Systems is ultimately
required, pursuant to an order of a court or other authority
reasonably believed by Perot Systems to be of competent
jurisdiction, to disclose Privileged Work Product, Perot Systems
shall have no liability under this Agreement in connection with
such disclosure.
(g) Internal Audits. Perot Systems may periodically perform, or cause
to be performed, internal compliance reviews of its activities
under this Agreement. The specific findings of these reviews other
than those performed under this Agreement, whether performed by
Perot Systems or a third person, shall be deemed Privileged Work
Product and Perot Systems shall not be required to disclose such
findings to CalPX under any circumstances.
6.3 CalPX Proprietary Software. CalPX Proprietary Software shall be and
remain the property of CalPX, and Perot Systems shall have no rights or
interests therein except as required to perform the Services or as
otherwise provided in this Agreement.
6.4 Perot Systems Software and Perot Systems Tools.
(a) Any software that is proprietary to Perot Systems that Perot
Systems uses or to which Perot Systems provides CalPX access
("Perot Systems Software") and any tools or methodologies which
are proprietary to Perot Systems and used in connection with the
activities contemplated by this Agreement ("Perot Systems Tools"),
including any modifications to any Perot Systems Software or Perot
Systems Tools, shall be and remain the property of Perot Systems,
and CaIPX shall have no rights or interests therein, except as
otherwise provided in this Agreement.
22
(b) Perot Systems shall provide CalPX, Affiliates of CaIPX and Ca1PX
Partners with access to the Perot Systems Software, Perot Systems
Tools and Perot Systems' Third Party Software and Third Party
Tools used in connection with the Services during the Term to the
extent such access is necessary for CalPX or its Affiliates to
receive the Services. Upon request, CalPX shall have the right to
approve the Perot Systems Software, Perot Systems Tools and Third
Party Software and Third Party Tools prior to their use by Perot
Systems in connection with the Services.
(c) Upon termination or expiration of this Agreement, at the request
of CaIPX, Perot Systems shall grant to CalPX, Affiliates of CalPX
and CalPX Partners, and the first successor provider of the
Services, a license to access, use, operate, modify and enhance
for CalPX or its Affiliate's business operations any Perot Systems
Software or Perot Systems Tools then being used to provide the
Services at Perot Systems' then prevailing commercial rates and
terms, provided that Perot Systems shall not be obligated to grant
any license rights with respect to any such software and tools to
Electronic Data Systems Corporation, Computer Sciences
Corporation, Andersen Consulting LLP or any of their Affiliates
for any period in excess of 180 days.
(d) At the request of CalPX, Perot Systems will use commercially
reasonable efforts to obtain for CalPX, Affiliates of CalPX and
CalPX Partners, and the first successor provider of the Services,
after the expiration or termination of the Agreement license
rights from the applicable third parties to access, use, operate,
modify and enhance any Third Party Software and Third Party Tools
being used by Perot Systems to provide the Services as of
expiration or termination of this Agreement.
6.5 Rights in Developed Software.
(a) Except as otherwise agreed in this Article 6, CaIPX shall acquire
all right, title and interest in and to all Work Product produced
under this Agreement, including but not limited to all trade
secrets, copyrights, patents and other intellectual property
rights in and to such Work Product. Except as otherwise agreed in
this Article 6, Perot Systems hereby irrevocably assigns,
transfers and conveys, and shall cause all PSC Personnel to
assign, transfer and convey, to CalPX without further
consideration all of its and their right, title and interest in
and to such Work Product. Perot Systems acknowledges, and shall
cause all PSC Personnel to acknowledge, that CalPX and the
successors and permitted assigns of CalPX shall have the right to
obtain and hold in their own name the intellectual property rights
referred to above in and to such Work Product including all rights
of patent, copyright, trade secret or other proprietary rights.
Perot Systems agrees to execute, and shall cause all PSC Personnel
to execute, any documents or take any other actions as may
reasonably be necessary, or as CalPX may reasonably request, to
perfect or register CaIPX's ownership of any such Work Product.
23
(b) All Perot Developed Software and related Documentation shall be
owned by Perot Systems. To the extent that any of the Perot
Developed Software and related Documentation is deemed a "work for
hire" by operation of law, except as otherwise provided in this
Article 6, CalPX hereby assigns, transfers and conveys, and shall
cause CalPX Affiliates and agents to assign, transfer and convey,
to Perot Systems without further consideration all of its and
their right, title and interest in and to such Perot Developed
Software and related Documentation including all rights of patent,
copyright, trade secret or other proprietary rights. CalPX
acknowledges that Perot Systems and the successors and permitted
assigns of Perot Systems shall have the right to obtain and hold
in their own names such intellectual property rights in and to the
Perot Developed Software and related Documentation. CalPX agrees
to execute any documents or take any other actions as may be
necessary, or as Perot Systems may reasonably request, to perfect
Perot Systems' ownership of or register such intellectual property
rights in any Perot Developed Software and related Documentation.
(i) Unless otherwise agreed in this Article 6, Perot Systems
shall grant and hereby does grant to CalPX, subject to the
terms of this Article 6 and the terms and conditions of any
license or similar agreement relating to third party
Embedded Software, a fully paid-up, worldwide,
non-exclusive, non- transferable (except as provided in
this Agreement) and perpetual license to use, copy,
maintain, and modify the Perot Developed Software, Embedded
Software and related Documentation for CalPX's use in
connection with its own operations. For purposes of this
Section 6.5, CalPX's operations shall include the
operations of any Affiliate of CalPX and other third
parties (i) to whom CalPX provides services in addition to
any sublicense of software; or (ii) in whom CalPX has an
ongoing equity interest ("Ca1PX Partners"). CalPX shall be
permitted to sublicense such rights to its Affiliates and
CalPX Partners. The license granted in this paragraph shall
include a non-transferable (except as provided in the
Agreement) and perpetual license to use and practice any
and all inventions of Perot Systems embedded in any Perot
Developed Software, Embedded Software or related
Documentation (including those covered by patents and
patent applications at any time).
(ii) Perot Systems shall provide CalPX with one or more copies
of the source code, source code documentation, and other
documentation that is reasonably necessary to enable CalPX
to enjoy the benefits of the license granted in this
Article 6.
(iii) Unless otherwise specifically agreed in writing by CalPX,
Perot Systems shall not license or otherwise use, copy,
maintain or modify, or authorize any third party to use,
copy, maintain or modify Work Product that is prepared
under this Agreement to provide or market electricity
services in any Restricted Territory (defined below),
during the period while the Work
24
Product is being developed and for a period of one (1) year
following the expiration or termination of this Agreement.
For purposes of this paragraph, the term "Restricted
Territory" means the geographic region covered on the
Effective Date by the Western Systems Coordinating Council
(WSCC), the Electric Reliability Council of Texas (ERCOT),
or the Southwest Power Pool (SPP).
(c) The term "Embedded Software" is defined to mean pre-existing
software that is licensed by CalPX or Perot Systems from a third
party or owned by Perot Systems that is embedded in or is
necessary to operate the Developed Software. Perot Systems shall
retain its rights to any Embedded Software that is owned by Perot
Systems, but grants to CaIPX the license rights referred to in
paragraph (b) above, provided that if any Embedded Software is
owned by a third party, then the terms of the applicable license
shall define each party's rights to such Embedded Software.
6.6 Know-How.
(a) CalPX acknowledges that, prior to the Effective Date, Perot
Systems has acquired, conceived, developed or licensed, and after
the Effective Date shall continue (both independently and as a
result of performing services under this Agreement) to acquire,
conceive, develop or license, certain architectures, concepts,
industry knowledge, techniques and template works of authorship
which embody copyrights, inventions, trade secrets and other
intellectual property (collectively, "Know-How") relating to the
types of services to be performed for CalPX under this Agreement.
CalPX desires Perot Systems to apply its Know-How in connection
with the Services, and acknowledges that performance of the
Services shall enhance and expand the Know-How. Accordingly,
Perot Systems may (1) develop or distribute products or perform
services similar to the Work Product (including the Deliverables
and the Documentation), and (2) use its Know-How to develop or
distribute products or to perform services for any other person,
provided that (i) no such activity violates the other provisions
of this Article 6, (ii) the Know-How does not contain any
Confidential Information of CalPX and (iii) use of the Know-How
does not misappropriate any trade secret rights or infringe upon
any other copyright, patent or other proprietary rights of CalPX.
To the extent necessary to enjoy the rights described in this
Section 6.6, Perot Systems shall retain, whenever intellectual
property rights are assigned to CaIPX under this Agreement, (i) a
royalty-free, perpetual, worldwide license to use, modify and
practice any and all inventions of PSC Personnel embedded in any
Work Product, Perot Developed Software or related Documentation
(including those covered by patents and patent applications at any
time) and (ii) the copyright in any templates that form the basis
for the Work Product (but not the copyright in the Work Product
derived from the template).
25
(b) Perot Systems acknowledges that, prior to the Effective Date,
CalPX and its employees have acquired, conceived, developed or
licensed, and after the Effective Date shall continue to acquire,
conceive, develop or license, certain Know-How. Perot Systems
acknowledges and agrees that nothing in this Agreement shall
restrict in any manner the right of CalPX to use any such Know-How
in any manner.
6.7 Audit of CalPX's Business. Perot Systems shall provide reasonable support
to CaIPX in connection with an audit of CalPX's business as Additional
Services. Perot Systems shall not be obligated by this Agreement to
disclose to CalPX or any other person or entity any information which is
not reasonably necessary to conduct an audit of CatPX's business, nor
shall Perot Systems be obligated to divulge any Confidential Information
of Perot Systems or any third party, except as may be required under
applicable law. In no event shall Perot Systems be obligated to disclose
any Confidential Information to any competitor, or Affiliate of a
competitor, of Perot Systems. CalPX may utilize third parties to conduct
such audit subject to such third party or parties entering into a
confidentially agreement reasonably satisfactory to CaIPX and Perot
Systems.
6.8 Data Security. Perot Systems shall establish and maintain mutually agreed
safeguards against the destruction, loss, or alteration of the CalPX Data
in the possession of Perot Systems. Perot Systems shall only have access
to the CaIPX production data on an as-needed basis. In the event any PSC
Personnel discover or are notified of a material breach or potential
material breach of security of the CalPX Data, Perot Systems shall
immediately (1) notify the CaIPX Representative of the same and (2) if
the CaIPX Data was in the possession of Perot Systems or PSC Personnel,
as part of the Services, Perot Systems shall investigate the breach or
potential breach. In addition, at CalPX's request, Perot Systems shall
promptly provide CalPX Data security reports to CalPX in a form to be
agreed upon by CaIPX and Perot Systems.
6.9 Safety and Security Procedures. Perot Systems shall maintain and enforce
mutually agreed physical security standards and procedures at each of the
service locations and comply with CalPX environmental and physical
security procedures in effect at the CalPX service locations.
6.10 Security Relative To CaIPX Competitors. If Perot Systems intends to
provide the Services from a service location that is shared with (I) a
third party or (2) any part of the business of Perot Systems that
competes with the business of CaIPX, then, prior to providing any of the
Services from such service location, Perot Systems shall develop a
process, subject to CaIPX's prior approval, to restrict access to the
systems in any shared environment in a manner that prevents persons other
than PSC Personnel from having access to CalPX's Confidential
Information.
26
Article 7
Performance Review and Termination
7.1 Performance Review. The Account Manager and CalPX Representative shall
meet as often as reasonably requested by either party to review the
performance of the parties under this Agreement. Each party shall bear
its own costs and expenses incurred in connection with such review.
7.2 Dispute Resolution. If any continuing dispute between the parties is not
resolved after reasonable attempts to resolve such dispute are made by
either party, then, upon the written request of either party, each party
shall appoint an officer who does not spend most of his or her time on
activities relating to this Agreement, to meet with the other party's
officer for the purpose of resolving the dispute. The officers shall
negotiate in good faith to resolve the dispute without the necessity of
any formal proceeding. During the course of such negotiations, all
reasonable requests made by one party to the other for information shall
be honored.
7.3 Arbitration. Any dispute that is not resolved through negotiation
pursuant to Section 7.2 shall be settled through mandatory binding
arbitration in accordance with the dispute resolution procedures
described in Schedule 9 of CalPX's Tariff and the CalPX's "Supplemental
Procedures for California Power Exchange Disputes", as shown in Schedule
7.3 (the Supplemental Procedures for California Power Exchange Disputes)
administered by the American Arbitration Association, as amended from
time to time (which tariff provisions are incorporated into and made part
of this Agreement as if set forth in full). Such arbitration shall be
final and binding in accordance with the following:
(a) American Arbitration Association Rules. Except as specified below
or otherwise agreed in writing, the arbitration shall be conducted
in accordance with the then-current Commercial Arbitration Rules
of the American Arbitration Association.
(b) Demands and Counterclaims. Any demand for arbitration or any
counterclaim shall specify in reasonable detail the facts and
legal grounds forming the basis for the claimant's request for
relief, and shall include a statement of the total amount of
damages claimed, if any, and any other remedy sought by the
claimant.
(c) Panel and Location. The arbitration shall be conducted by an
arbitration panel consisting of a single neutral arbitrator
selected in accordance with those Commercial Arbitration Rules.
The arbitration proceedings shall take place in Los Angeles,
California.
(d) Panel Actions. The arbitration panel may render awards of monetary
damages, direction to take or refrain from taking action, or both.
However, the arbitration panel may not award monetary damages in
excess of the damages allowed pursuant
27
to Article 8 or 9. The arbitration panel may, at its discretion,
require any party to the arbitration to reimburse any other party
to the arbitration for all or any part of the expenses of the
arbitration paid by the other party and the attorneys' fees and
other expenses reasonably incurred by the other party in
connection with the arbitration. Judgement upon the award rendered
in the arbitration may be entered in any court of competent
jurisdiction.
7.4 Termination for Cause. If either party (i) breaches any of its material
obligations under this Agreement (excluding CaIPX's obligation to pay
Perot Systems) or (ii) repeatedly breaches any of its other obligations
and the effect of any such repeated breaches is material, and the
breaching party fails to cure any such breach within 30 days (or such
longer period, not to exceed 60 days, if such breach can not be
reasonably cured within such 30 day period and the breaching party
commences to cure such breach upon receipt of notice and diligently
pursues a cure for such breach) after receipt of written notice from the
other party identifying such breach, then the nonbreaching party may
terminate this Agreement by providing the breaching party with prior
written notice of termination.
7.5 Termination for Non-Payment. If CalPX fails to pay Perot Systems any
undisputed amounts due hereunder and fails to cure such nonpayment within
10 days after receipt of written notice from Perot Systems identifying
such nonpayment, then Perot Systems may terminate this Agreement by
providing CalPX with prior written notice of termination.
7.6 Termination for Insolvency. ANY LICENSE CONTEMPLATED BY THIS AGREEMENT
SHALL BE DEEMED AN EXECUTORY CONTRACT UNDER SECTION 365(n) OF TITLE 11 TO
THE U.S. BANKRUPTCY CODE AND SHALL REMAIN IN FULL FORCE AND EFFECT UPON
THE LICENSEE'S ELECTION AND THE LICENSEE'S SUBSTANTIAL PERFORMANCE
HEREUNDER, NOTWITHSTANDING ANY BANKRUPTCY OR INSOLVENCY OF THE LICENSOR.
If either party is unable to pay its debts generally as they come due or
is declared insolvent or bankrupt, is the subject of any proceedings
relating to its liquidation, insolvency or for the appointment of a
receiver or similar officer for it, makes an assignment for the benefit
of all or substantially all of its creditors, or enters into an agreement
for the composition, extension or readjustment of all or substantially
all of its obligations, then the other party may, by giving prior written
notice thereof to such party, terminate this Agreement as of a date
specified in such notice of termination.
7.7 Termination for Convenience.
(a) CalPX may terminate this Agreement for convenience effective as of
any time after the second anniversary of the Effective Date by (i)
giving Perot Systems notice of the termination at least 180 days
prior to the termination date specified in the notice, and (ii)
paying a termination fee in accordance with this Section 7.7 in
the event the date of termination is a date prior to the end of
the Initial Tern.
28
(b) The aggregate termination fee payable by CalPX in the event
of a termination for convenience pursuant to this Section
7.7 prior to the end of the Initial Term shall equal an
amount equal to $6,575.34 times the number of calendar days
remaining between the termination date and the end of the
Initial Term. Fifty percent of such termination fee shall
be payable 90 days following delivery of such termination
notice, and shall be paid in accordance with Section 5.7.
The remaining 50% shall be due on the termination date and
shall be paid in accordance with Section 5.7. In the event
of an extension of this Agreement beyond the Initial Term,
the parties shall negotiate the availability of a
termination for convenience right and any related fee, if
any.
(c) If CalPX exercises its right under this Section 7.7, Perot
Systems shall, not later than 60 days after the termination
date, invoice CalPX for the Make-Whole Costs and CalPX
shall pay the Make-Whole Costs within 30 days after
receiving the invoice. For purposes of this Section 7.7,
"Make-Whole Costs" means all reasonable out-of-pocket
direct costs and expenses resulting from the early
termination of this Agreement, such as and by way of
example only: (i) equipment lease termination penalties,
prorated over a period of the lesser of the Term or the
entire lease term during the Term, and (ii) unamortized
equipment and software costs (subject to CalPX's right to
elect to take delivery or transfer of such equipment or
software at Perot Systems' then book value), less (iii) any
savings realized by Perot Systems in connection with
CalPX's exercise of its rights under this Section 7.7. Each
party will use reasonable commercial efforts, and will
cooperate with the other party or its designee, to minimize
the Make-Whole Costs.
7.8 Termination for Causing Failure of Critical Services. If Perot
Systems (1) as a result of a breach of its obligations under this
Agreement causes the failure of any specific Critical Service
described in Schedule 7.8 and (2) does not cure such failure with
a permanent solution within the number of hours identified in
Schedule 7.8 as the applicable cure period, after receipt of a
notice from CaIPX with respect to such failure, more than the
number of disruptions in a six month time period set forth in
Schedule 7.8 for that Critical Service, then CalPX may, upon
notice to Perot Systems, terminate this Agreement, in whole or in
part, as of the termination date specified in the notice. For the
purposes of this Section 7.8, such failures caused by Perot
Systems shall not be counted as a disruption (i) during the
Transition Period, (ii) prior to the date a disaster recovery
solution is completed, (iii) to the extent the failure of a
Critical Service is caused by the failure to complete all Required
Improvements, (iv) in connection with any failure caused by a
server that has not had its scheduled maintenance window made
available by CalPX during the 30 day period prior to the
disruption, (v) if Perot Systems' inability to cure the failure is
caused by any third party's failure or inability to provide
software, hardware or services necessary for Perot Systems to cure
the failure, (vi) in connection with any failure of a Critical
Service caused by the installation of new hardware or software
that occurs within 30 days after such installation, or (vii) in
connection with any failure to provide a Critical Service caused
by a Force Majeure Event.
29
7.9 Force Maleure Termination Provision. If any Force Majeure Event prevents,
hinders or delays performance of the Services for seven days, in the case
of Critical Services, or more than 30 days, in the case of all other
Services, CalPX may procure such Services from an alternate source. If
the Force Majeure Event continues to prevent, hinder or delay performance
of the Services for more than 30 days, in the case of Critical Services,
or more than 45 days, in the case of all other Services, and CalPX can
obtain such Services from a third party, then CalPX may terminate this
Agreement, in whole or in part, as of a date specified by CaIPX in a
termination notice to Perot Systems. If CalPX terminates this Agreement
pursuant to this Section 7.9, such termination will be CalPX's sole
remedy, and Perot Systems shall have no liability for damages or
otherwise to CalPX, in connection with the unavailability of any Services
as a result of any of the designated Force Majeure Events.
7.10 Continuity of Services. Perot Systems acknowledges that the timely and
complete performance of its obligations pursuant to this Agreement is
critical to the business and operations of CalPX. Accordingly, in the
event of a dispute between CalPX and Perot Systems, Perot Systems shall
continue to so perform its obligations under this Agreement in good faith
during the resolution of such dispute unless and until this Agreement is
terminated in accordance with the provisions hereof so long as CalPX
continues to comply with the terms of Article 5.
7.11 Transition Obligations.
(a) Transition Assistance. During the Transition Assistance Period
(hereinafter defined), Perot Systems shall provide to CalPX the
Transition Assistance described below as reasonably requested by
CaIPX ("Transition Assistance"). The term "Transition Assistance
Period" is defined as (i) if this Agreement expires under Section
1.3, the six month period after the expiration date or termination
date, as the case may be, or (ii) if this Agreement is terminated
under Sections 7.4, 7.5,7.6, 7.7, 7.8 or 7.9 the period beginning
on the date on which a notice of termination is delivered by
either party through the termination date or, upon CalPX's written
request prior to the termination date, through the date six months
after the termination date. The Transition Assistance to be
provided to CalPX by Perot Systems shall consist of the following:
(i) Continuing to perform any or all of the Services then being
performed by Perot Systems.
(ii) Working with CalPX to develop a plan for the transition of
services from Perot Systems to CalPX or another third party
provider.
(iii) Providing training for personnel of CalPX in the
performance of the Services then being transitioned to
CaIPX.
30
(iv) With respect to any equipment owned by Perot Systems and
used solely to perform the Services, CalPX may purchase any
such equipment at Perot Systems' then-current book value on
an "as is -- where is" basis. With respect to any equipment
leased by Perot Systems and used solely to perform the
Services, subject to the terms of any applicable lease,
Perot Systems shall assign to CalPX Perot Systems' rights
and obligations with respect to any such equipment leased
by Perot Systems; provided, however, that the lessor under
the lease agrees to release Perot Systems from all
liability under the lease as of the date of assignment.
(v) With respect to any third party services acquired by Perot
Systems and used solely to perform the Services, subject to
the terms of any applicable third party services agreement,
Perot Systems shall assign to CalPX Perot Systems' rights
and obligations with respect to any such third party
services used by Perot Systems; provided, however, that
such third party service provider under the third party
service agreement agrees to release Perot Systems from all
liability arising under the third party service agreement
after the date of assignment.
(vi) Returning CalPX Proprietary Software, delivering and
installing software and tools licensed to CalPX by Perot
Systems, delivering and installing Developed Software and
Work Product, delivering CaIPX Data in a format specified
by CaIPX and cooperating with CalPX and a successor third
party service provider.
(vii) CalPX shall have the opportunity to offer employment to
Transitioned Employees and any replacements for the
Transitioned Employees and any other PSC Personnel who are
providing Services to CalPX upon expiration or termination
of this Agreement. Perot Systems shall provide CalPX with
reasonable access to such PSC Personnel to enable CalPX to
meet with, solicit and hire such PSC Personnel. Perot
Systems shall waive any non- competition or similar
provisions of any agreements or benefit plans that may
prevent or inhibit the PSC Personnel from being hired by
CalPX, except that Perot Systems shall have no obligation
to modify vesting, participation or similar terms in any
stock option agreements or stock purchase program
agreements.
(b) Payment for Transition Assistance. CalPX shall pay Perot Systems
for such Transition Assistance on a time and materials basis at
Perot Systems' then-standard commercial billing rates (less a
discount of 25% in the case of a termination under Sections 7.4,
7.6, 7.8 or 7.9) or on any other mutually acceptable basis.
Notwithstanding Section 5.8, CalPX shall pay Perot Systems for any
Transition Assistance in advance on the first day of each month of
the Transition Assistance Period an amount equal to Perot Systems'
reasonable estimate of the total amount
31
payable to Perot Systems for such Transition Assistance for that
month adjusted, as necessary, to reflect the reconciliation based
on the actual charges for Transition Assistance provided during
the prior month. Perot Systems shall provide CalPX with an invoice
each month evidencing the estimate of the total amount payable to
Perot Systems for Transition Assistance for the next month and a
reconciliation with the actual charges for the Transition
Assistance provided to CalPX during the prior month.
7.12 Force Maieure. If and to the extent that a party's performance of any of
its obligations pursuant to this Agreement is prevented, hindered or
delayed by fire, flood, earthquake, elements of nature or acts of God,
acts of war, terrorism, riots, civil disorders, rebellions or
revolutions, or any other similar cause beyond the reasonable control of
such party (each, a "Force Maieure Event"), and such non-performance,
hindrance or delay could not have been prevented by reasonable
precautions, then the non-performing, hindered or delayed party shall be
excused for such non-performance, hindrance or delay, as applicable, of
those obligations affected by the Force Majeure Event for as long as such
Force Majeure Event continues and such party continues to use all
commercially reasonable efforts to recommence performance whenever and to
whatever extent possible without delay, including through the use of
alternate sources, workaround plans or other means. The party whose
performance is prevented, hindered or delayed by a Force Majeure Event
shall immediately notify the other party of the occurrence of the Force
Majeure Event and describe in reasonable detail the nature of the Force
Majeure Event.
Article 8
Indemnities
8.1 Bodily Injury and Property Damage Indemnity.
(a) By Perot Systems. Perot Systems agrees to indemnify, defend and
hold harmless CalPX and its Affiliates from and against all Losses
arising out of or relating to the death or bodily injury of any
agent, employee, consultants, subcontractors, contractors,
customer or visitor or damage to property caused by the acts or
omission of Perot Systems.
(b) By CalPX. CalPX agrees to indemnify, defend and hold harmless
Perot Systems from and against all Losses arising out of or
relating to the death or bodily injury of any agent, employee,
consultants, subcontractors, contractors, customer or visitor or
damage to property caused by the acts or omission of CalPX.
32
8.2 Intellectual Property Indemnity.
(a) By Perot Systems. Perot Systems agrees, at its expense, to
indemnify, defend and hold harmless CalPX and its Affiliates from
and against any and all claims, damages, demands, liabilities,
costs and expenses, including reasonable attorneys' fees and
expenses ("Losses") resulting from, arising out of or relating to
any third party claims brought against CaIPX or its Affiliates
alleging that any Work Product, Developed Software, Perot Systems
Software, Perot Systems Tools or the Services infringe a third
person's copyright , patent, trade secret or other intellectual
property right (except as may have been caused by CalPX, including
any infringement caused by any method or process required to meet
the specifications as requested by CaIPX.)
(b) By CalPX. CalPX agrees, at its expense, to indemnify, defend and
hold harmless Perot Systems from and against any Losses resulting
from, arising out of or relating to any third-party claims brought
against Perot Systems alleging that Perot Systems' use, in
accordance with the terms of this Agreement, of CaWPX Proprietary
Software infringes a third person's copyright, trade secret,
patent or other intellectual property right (except as may have
been caused by Perot Systems).
(c) Mitigation. Upon receiving notice of an infringement claim, the
indemnitor may, in its sole discretion, (i) modify the allegedly
infringing item to be non-infringing without materially impairing
its functionality, (ii) replace the allegedly infringing item with
a noninfringing item of substantially equivalent functionality, or
(iii) obtain for the indemnitee the right to continue to use the
item in accordance with the terms of this Agreement.
8.3 Employment Indemnity.
(a) Indemnification by Perot Systems. Perot Systems agrees to
indemnify, defend and hold harmless CalPX against any and all
Losses arising out of or relating to any Transitioned Employee,
attributable to any period commencing on or after the date on
which such Transitioned Employee accepts employment with Perot
Systems and arising out of Perot Systems' employment of that
Transitioned Employee, including without limitation claims
relating to salary, employee benefits, employment taxes and other
payments in connection therewith, but excluding claims relating to
agreements, arrangements or commitments made by CalPX with or to
that Transitioned Employee.
(b) Indemnification by CaIPX. CalPX agrees to indemnify, defend and
hold harmless Perot Systems from any and all Losses arising out of
or relating to any Transitioned Employee or Non-Transitioned
Employee, attributable to any period during which such
Transitioned Employee or Non-Transitioned Employee was employed by
33
CalPX and arising out of CalPX's employment of that Transitioned
Employee or Non-Transitioned Employee, including without
limitation claims relating to salary, employee benefits, and other
payments in connection therewith, but excluding any claims
relating to agreements, arrangements, or commitments made by Perot
Systems with or to that Transitioned Employee or Non-Transitioned
Employee.
8.4 CaIPX's Business Risk Indemnity. To the extent, and only to the extent,
CalPX's insurance carriers cover CalPX's obligations under this Section
8.4, CalPX shall indemnify, defend and hold Perot Systems harmless from
any and all Losses resulting from, arising out of or relating to any
third party claims by CaIPX's participants and vendors relating to any
duties or obligations of CalPX to such third parties.
8.5 Other Perot Systems Indemnities. Perot Systems agrees, at its expense, to
indemnify, defend and hold harmless CalPX from and against all Losses
resulting from, arising out or relating to any claims:
(a) relating to any duties or obligations of Perot Systems or its
agents in respect of a third party or any subcontractor of Perot
Systems;
(b) relating to Perot System's breach of Section 6.2; or
(c) relating to Perot System's breach of Section 6.1.
8.6 Indemnification Procedures. With respect to third-party claims subject to
the indemnities set forth in this Article, the indemnitee shall notify
the indemnitor promptly of any matters in respect of which the foregoing
indemnity may apply and of which the indemnitee has knowledge and shall
give the indemnitor full opportunity to control the response thereto and
the defense thereof, including, without limitation, any agreement
relating to the settlement thereof, provided that the indemnitee shall
have the right to approve any settlement or any decision not to defend,
which approval shall not be unreasonably withheld. The indemnitee's
failure to promptly give notice shall affect the indemnitor's obligation
to indemnify the indemnitee only to the extent that the indemnitor's
rights are materially prejudiced thereby. The indemnitee may participate,
at its own expense, in any defense and any settlement directly or through
counsel of its choice. If the indemnitor elects not to defend, the
indemnitee shall have the right to defend or settle the claim as it may
deem appropriate, at the cost and expense of the indemnitor, which shall
promptly reimburse the indemnitee for such costs, expenses and settlement
amounts.
34
Article 9
Liability
9.1 Limitation of Liability. Each party's liability for damages under this
Agreement shall not exceed, in the aggregate, an amount equal to the Service
Fees actually paid by CalPX to Perot Systems during the first nine months after
the Effective Date.
9.2 Limitation on T party shall only be liable for the direct damages of the
other party. The measure of damages payable by a party shall not include, and a
party shall not be liable for, any amounts for the indirect, incidental,
reliance, special, consequential (including without limitation lost profits,
income or revenue) or punitive damages of the other party or any third parties,
whether in tort or contract, and whether or not such damages are foreseen or
unforeseen.
9.3 Exclusions.
(a) The limitation or exculpation of liability set forth in Section 9.1
shall not apply to (i) a party's obligations to make payments to the other party
under Section 5 of this Agreement, or (ii) except for indemnification claims
under Section 8.1 relating to damage to data or information, indemnification
claims under Article 8.
(b) The limitation or exculpation of liability set forth in Section 9.2
shall not apply to (i) a party's obligations to make payments to the other party
under Section 5 of this Agreement, (ii) indemnification claims under Article 8
for Losses that are (A) final judgments or awards obtained by a third party
against the indemnified party by a court or arbitrator of competent jurisdiction
and any settlements to which the indemnifying party agrees in writing (which
shall be considered direct damages for purposes of this Agreement), or (B)
damages to tangible personal or real property (excluding any data or
information) or (iii) indemnification claims under Section 8.5.
9.4 Year 2000 Problems. Except as set forth in this Section 9.4, Perot Systems
shall have no obligation under this Agreement to (i) identify, correct or
resolve or any problem caused by the failure of any CalPX Software, CalPX Vendor
Software or CalPX Technology to record, store, process, or present calendar
dates falling on or after January 1, 2000, in the same manner, and with the same
functionality and accuracy, as performed on or before December 31, 1999; (ii)
provide a century indicator on all dates produced therein as output or results
from its operation; (iii) abnormally end or generate an incorrect result when
performing date calculations involving either a single century or multiple
centuries; (iv) sort all files in an accurate sequence when sorted by date and
read and write in an accurate sequence when the date is used as the key for such
reading or writing; and (v) be capable of determining leap years. In addition,
Perot Systems shall have no liability to CalPX for Perot Systems' inability to
perform its obligations under this Agreement as a result of any failure of the
type or nature described above. Notwithstanding anything to the contrary in
35
this Section 9.4, upon request by CalPX, Perot Systems shall assign PSC
Personnel to identify, correct or resolve Y2K problems provided that no such
actions shall materially affect the ability of Perot Systems to provide the
Services.
Article 10
Warranty
10.1 By Perot Systems. Perot Systems warrants and covenants to CaIPX that:
(i) the Services shall be performed by qualified personnel in a manner
consistent with good practice in the information technology
services industry; and
(ii) in providing the Services, Perot Systems and the PSC Personnel
shall comply in all material respects with all federal, state, and
local laws and regulations that apply to, and obtain all material
permits and licenses that pertain to, the provision of the
Services generally.
If Perot Systems breaches this Section 10. 1, it shall supply services to
correct or replace the work at no charge. THE REMEDY SET FORTH IN THIS
PARAGRAPH 10.1 IS CALPX'S EXCLUSIVE REMEDY FOR BREACH OF THE WARRANTY IN
SECTION 10.1 (i); PROVIDED THAT THE FORGOING SHALL NOT LIMIT ANY OTHER
RIGHT OR REMEDY OF CALPX IN RESPECT OF ANY OTHER BREACH OF ANY PROVISION
OF THIS AGREEMENT BY PEROT SYSTEMS.
10.2 By Each Party. Each party warrants that:
(a) it is a corporation duly incorporated, validly existing, and in good
standing under the laws of its state of incorporation,
(b) it has all requisite power and authority to execute, deliver, and
perform its obligations under this Agreement,
(c) the execution, delivery, and performance of this Agreement has been
duly authorized by such party and shall not conflict with, result in a breach or
constitute a default under any other agreement to which it is a party,
(d) no approval,- authorization, or consent of any governmental or
regulatory authority is required to be obtained or made by it in order for it to
enter into and perform its obligations under this Agreement, and
(e) there is no outstanding litigation, arbitrated matter or other
dispute to which it is a party which, if decided unfavorably to it, would
reasonably be expected to have a material adverse effect on its ability to
fulfill its obligations under this Agreement.
36
10.3 Disclaimer of Warranty.
(a) IF PEROT SYSTEMS ACQUIRES ANY THIRD-PARTY SOFTWARE, HARDWARE OR
SERVICES FOR CALPX UNDER THIS AGREEMENT AT THE REQUEST OF CALPX,
PEROT SYSTEMS SHALL PROVIDE SUCH THIRD-PARTY SOFTWARE, HARDWARE OR
SERVICES ON AN "AS IS" BASIS, BUT PEROT SYSTEMS SHALL USE
REASONABLE COMMERCIAL EFFORTS TO ASSIST CALPX IN ENFORCING ANY
THIRD-PARTY WARRANTY AND SHALL PASS THROUGH TO CALPX THE BENEFIT
OF ANY SUCH WARRANTY.
(b) EXCEPT AS MAY BE SPECIFICALLY PROVIDED IN THIS AGREEMENT, EACH
PARTY DOES NOT MAKE, AND HEREBY DISCLAIMS, ANY REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY
WARRANTY OF THE MERCHANTABILITY, SUITABILITY, FITNESS FOR A
PARTICULAR PURPOSE, OR RESULTS TO BE DERIVED FROM THE USE OF ANY
RESOURCES, SERVICES OR MATERIALS PROVIDED PURSUANT TO THIS
AGREEMENT.
(c) PEROT SYSTEMS DISCLAIMS ALL REPRESENTATIONS OR WARRANTIES THAT ANY
SERVICES PROVIDED UNDER THIS AGREEMENT SHALL IDENTIFY OR RESOLVE
CALPX'S YEAR 2000 PROBLEM AREAS. PEROT SYSTEMS SHALL NOT BE LIABLE
FOR ANY FAILURE TO IDENTIFY OR CORRECT CALPX'S YEAR 2000 PROBLEM
AREAS REGARDLESS OF THE FORM OF THE CLAIM, EXCEPT FOR PEROT
SYSTEMS OBLIGATIONS TO PROVIDE SERVICES DESCRIBED IN SECTION 9.4.
10.4 Certain Covenants.
(a) Viruses.
(i) Each party shall use reasonable commercial efforts to prevent
any software viruses or other surreptitious software codes
(collectively, "Virus") from being introduced into the Systems.
Perot Systems shall evaluate, recommend and maintain up-to-date,
subject to CalPX's approval, virus detection and removal
products to be used in connection with the Systems, on a
mutually satisfactory periodic basis.
(ii) If a Virus is introduced into a System, each party shall use
reasonable commercial efforts to identify and neutralize such
Virus and to mitigate any adverse effect of such Virus, and
Perot Systems shall repair or restore, as soon as, and to the
extent, reasonably practicable any data, information or Systems
damaged by such Virus. The priority and intensity of the efforts
37
undertaken by the parties to identify and neutralize the Virus,
and to repair or restore any affected data, information or
systems, shall be determined by CalPX based on its evaluation of
the situation, based on such factors as it deems appropriate,
including but not limited to, the number of sites affected, the
severity of the damage being caused, and the relative importance
of the Systems affected.
(b) Perot Systems shall not, without the prior consent of CalPX,
intentionally introduce into any System or intentionally invoke
any code which is intended to disable or wrongfully impair or shut
down such System.
Article 11
Insurance
11.1 Insurance.
(a) Prior to the commencement of performance of Services under this
Agreement, Perot Systems shall procure and maintain in full force
and effect during the Term of this Agreement, and any extension
hereof, the following insurance policies:
(i) Commercial general liability insurance with limits of at
least one million dollars ($1,000,000.00) combined single
limits per occurrence and general aggregate for (a) bodily
injury and property damage, (b) completed operations, (c)
blanket contractual, and (d) contractor's protective
liability on such terms and in such amounts as are
satisfactory to CalPX.
(ii) Commercial automobile liability insurance policy with
combined single limits of $1,000,000 for bodily injury and
property damage for each occurrence, and with coverage for
non-owned vehicles.
(iii) Workers' Compensation in statutory required amounts under
applicable state Workers Compensation laws, and employers
liability insurance with a policy limit of at least
$500,000 ; and
(iv) Computer Services errors and omissions
liability insurance with limits of at least one million
dollars ($ 1,000,000.00) per claim and aggregate.
(b) The policies shall state that they afford primary coverage and the
commercial general liability and the commercial automobile
liability insurance shall name CalPX as an additional insured for
loss or liability pursuant to the above indemnity occurring during
activity or performance under this Agreement, including costs of
defending such claim.
(c) CalPX reserves the right to increase or decrease the coverage upon
giving thirty days written notice to Perot Systems.
38
(d) Perot Systems shall, within 15 days of the signing of this
Agreement, furnish to CalPX certificates of insurance certifying
the above insurance coverage or renewals thereof. All insurance
policies shall bear endorsement providing that the policies cannot
be cancelled or materially restricted without 30 days prior
written notice to CalPX.
(e) In the absence of the required certificates of insurance
evidencing at least the minimum types and amounts of insurance,
CalPX may, at its option: (i) procure insurance with collection
rights for premiums, attorney's fees and costs against Perot
Systems by way of set-off or recoupment from sums due Perot
Systems, at CalPX's option; or (ii) terminate this Agreement under
the terms of Section 7.4.
(f) The cost of all insurance shall be borne solely by Perot Systems.
Article 12
Miscellaneous
12.1 Relationship of Parties.
(a) Perot Systems is appointed by CalPX only for the purposes and to
the extent set forth in this Agreement, and Perot Systems'
relation to CalPX shall, during the period covered by this
Agreement, be that of an independent contractor, and Perot Systems
does not have and shall not have any power, and Perot Systems
shall not represent that Perot Systems has any power, to bind
CalPX, to assume or to create any obligation or responsibility,
express or implied, on behalf of CalPX or in its name.
(b) Perot Systems shall not be considered, under the provisions of
this Agreement or otherwise, as having an employee status or the
status of an agent or partner of CalPX, and shall not be entitled
to participate in any plans, arrangements, or distributions by
CaIPX pertaining to or in connection with any pension, stock,
bonus, profit sharing, health plans, or similar benefits for CalPX
employees. Perot Systems shall meet all of its obligations and
responsibilities as an employer to its own employees under any
federal, state or local laws, regulations or order now or
hereafter in force, including those relating to taxes,
unemployment compensation or insurance, arising out of its
engagement of persons for the performance of or contribution to
the Services performed hereunder.
(c) No part of Perot Systems' compensation shall be subject to
withholding by CaIPX for the payment of social security,
unemployment, or disability insurance or any other similar state
or federal tax obligation. In the event CalPX is found to be so
39
liable for social security, unemployment, disability insurance or
other tax or withholding, CalPX shall have the right to recover an
equivalent amount, including any interest or penalties paid in
connection therewith, from Perot Systems.
12.2 Notices. All consents, notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement
shall be in writing and may be given by any of the following methods: (a)
personal delivery, (b) facsimile transmission, (c) registered or
certified mail, postage prepaid, return receipt requested, or (d)
overnight delivery service. All such communications shall be sent to the
appropriate party at the following address or facsimile number (or to
such other address or facsimile number as that party may have specified
by notice given according to this Section).
<Table>
If to Perot Systems: With a copy to:
Perot Systems Corporation Perot Systems Corporation
Attn: President Attn: General Counsel
12404 Park Central Drive 12404 Park Central Drive
Dallas, Texas 75251 Dallas, TX 75251
If to CalPX:
California Power Exchange Corporation California Power Exchange Corporation
Attn: Chief Information Officer Attn: General Counsel
200 Los Robles Avenue, Suite 400 200 Los Robles Avenue, Suite 400
Pasadena, California 91101-2482 Pasadena, California 91101-2482
</Table>
All such consents, notices, requests, demands, waivers and other
communications shall be deemed received upon (x) actual receipt by the
addressee, (y) actual delivery to the appropriate address or (z) in the
case of a facsimile transmission, upon transmission thereof by the sender
and issuance by the transmitting machine of a confirmation slip that the
number of pages constituting the notice has been transmitted without
error. In the case of notices sent by facsimile transmission, the sender
shall contemporaneously mail a copy of the notice to the addressee at the
address provided for above. However, such mailing shall in no way alter
the time at which the facsimile notice is deemed received.
12.3 Assignment. This Agreement may not be assigned by either party without the
written consent of the other party, except that (i) either party may assign this
Agreement to the surviving entity in connection with the merger, consolidation,
or sale of all or substantially all of the assets of that party, (ii) CaIPX may
assign this Agreement in connection with a corporate reorganization of CalPX or
to any Affiliate of CalPX, so long as CalPX remains responsible for the actions
of such Affiliate and (iii) Perot Systems may assign this Agreement to any
Affiliate that is a subsidiary of Perot Systems organized within the United
States or, with the consent of CalPX, any other subsidiary of Perot Systems, so
long as Perot Systems, in each case, remains responsible for (a) the actions of
such Affiliate and
40
(b) any additional costs or expenses arising out of or relating to any
such assignment by Perot Systems. The consent of a party to any
assignment of this Agreement shall not constitute that party's
consent to any other assignment of this Agreement. This Agreement
shall be binding on the parties and their respective successors
and permitted assigns. Any assignment in contravention of this
Section shall be void.
12.4 Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision shall be deemed restated to reflect the
original intentions of the parties as nearly as possible in accordance with
applicable law, and, if capable of substantial performance, the remaining
provisions of this Agreement shall be enforced as if this Agreement was entered
into without the invalid provision.
12.5 Captions. The captions used in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement and shall not be
deemed to limit, characterize or in any way affect any provision of this
Agreement, and all provisions of this Agreement shall be enforced and construed
as if no caption had been used in this Agreement.
12.6 Modification; Waiver. This Agreement may be modified only by a written
instrument duly executed by or on behalf of each party. No delay or omission by
either party to exercise any right or power hereunder shall impair such right or
power or be construed to be a waiver thereof. A waiver by either party of any of
the obligations to be performed by the other or any breach thereof shall not be
construed to be a waiver of any succeeding breach thereof or of any other
obligation herein contained.
12.7 No Third-Party Beneficiaries. The parties agree that this Agreement is for
the benefit of the parties hereto and is not intended to confer any rights or
benefits on any third-party, including any employee of either party, and that
there are no third-party beneficiaries to this Agreement or any part or specific
provision of this Agreement.
12.8 Governing Law. The laws of the state of California, other than its rules on
conflicts of laws, shall govern the interpretation and construction of this
Agreement. The Uniform Electronic Transactions Act shall not apply to this
Agreement, and except as provided in Section 3.4(a), communications sent by
electronic means and electronic signatures shall not be effective under this
Agreement.
12.9 Consents, Approvals, Requests and Opinions. Except as specifically set
forth in this Agreement, all consents and approvals to be given or opinions to
be adopted by either party under this Agreement shall not be unreasonably
withheld or delayed and each party shall make only reasonable requests and
opinions under this Agreement.
12.10 Survival. The terms of Section 2.8(b), Section 2.9, Article 5 (with
respect to any amounts payable but not yet paid thereunder), Section 5.8,
Section 5.12, Section 5.15, Article 6,
41
Section 7.2, Section 7.3, Section 7.11, Article 8, Article 9, Section
10.1, Section 10.2, Section 10.3, and Article 12 shall survive the
expiration or termination of this Agreement.
12.11 Sole and Exclusive Venue. Each party irrevocably agrees that any legal
action, suit or proceeding or alternate dispute resolution brought by it in any
way arising out of this Agreement must be brought solely and exclusively in the
United States District Court for the Central District of California, or in the
state courts of the State of California for Los Angeles County and irrevocably
accepts and submits to the sole and exclusive jurisdiction of each of the
aforesaid courts in persona, generally and unconditionally with respect to any
action, suit or proceeding brought by it or against it by the other party.
12.12 Covenant of Further Assurances. CalPX and Perot Systems covenant and agree
that, subsequent to the execution and delivery of this Agreement and, without
any additional consideration, each of CaIPX and Perot Systems shall execute and
deliver any further legal instruments and perform any acts that are or may
become necessary to effectuate the purposes of this Agreement.
12.13 Negotiated Terms. The parties agree that the terms and conditions of this
Agreement are the result of negotiations between the parties and that this
Agreement shall not be construed in favor of or against any party by reason of
the extent to which any party or its professional advisors participated in the
preparation of this Agreement.
12.14 Remedies Cumulative. Except as otherwise specified under this Agreement,
no specific remedy under this Agreement shall limit a party's right to exercise
all other remedies available to such party under law, in equity or under this
Agreement, and all such remedies shall be cumulative.
12.15 Conflict of Interest. Individual PSC Personnel who perform Services
regularly on a full time basis shall be deemed to be a "substantially full time
consultant" within the meaning of Section 1.1. of the Code of Conduct and shall
accordingly comply with the Code of Conduct. Such individual's noncompliance
with the Code of Conduct, whether with or without knowledge, intentional or
otherwise, shall constitute grounds to have such individual removed from the
CalPX account under Section 2.5.
12.16 Export. CalPX and Perot Systems shall not knowingly export or re-export
any personal computer system, part, technical data or sub-elements under this
Agreement, directly or indirectly, to any destinations prohibited by the United
States Government. The term "technical data" in this context means such data as
is defined as technical data by applicable United States export regulations.
12.17 Entire Agreement. This Agreement, including any Schedules referred to
herein and attached hereto, each of which is incorporated herein for all
purposes, constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and there are no representations,
understandings or agreements relative hereto which are not fully expressed
42
herein. No change, waiver, or discharge hereof shall be valid unless in writing
and signed by an authorized representative of the party against which such
change, waiver, or discharge is sought to be enforced.
12.18 Media Releases. All media releases, public announcements and public
disclosures by CalPX or Perot Systems relating to this Agreement, including
without limitation, promotional or marketing material (but not including any
announcement intended solely for internal distribution within CalPX or Perot
Systems, as the case may be, or any disclosure required by legal, accounting or
regulatory requirements beyond the reasonable control of CalPX or Perot Systems,
as the case may be) shall be coordinated with and approved by the other prior to
the release thereof.
12.19 Task Order No. 5. The parties acknowledge and agree that after the
Effective Date, Perot Systems shall have no further obligations to provide any
services under Task Order No. 5, Effective as of January 16, 1999, between the
parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed and
delivered by their duly authorized representative as of the date first set forth
above.
CALIFORNIA POWER EXCHANGE PEROT SYSTEMS CORPORATION
CORPORATION
By: /s/ By: /s/
Name: Name:
Title: Title:
Date: Date:
43
SCHEDULE 1.1
Definitions
"AAA" has the meaning given this term in paragraph 1(a) of Schedule 7.3.
"Acceptance" has the meaning given this term in Part D, paragraph (b)(i) of
Schedule 3. 1.
"Acceptance Period" has the meaning given this term in Part D, paragraph (b)(i)
of Schedule 3. 1.
"Acceptance Test Plan" has the meaning given this term in Part D, paragraph
(b)(ii) of Schedule 3.1.
"Account Manager" has the meaning given this term in Section 2. 1.
"Additional Services" has the meaning given this term in Section 3.3.
"Affiliate" means, as to any entity, any other entity that, directly or
indirectly controls, is controlled by or is under common control with such
entity.
"Agreement" has the meaning given this term in the preamble to this Agreement.
"Agreement Date" has the meaning given this term in the preamble to this
Agreement.
"Applications" means the software programs that are operated by Perot Systems
under this Agreement.
"Applications Development Services" means the services described in Part D,
paragraph (a) of Schedule 3.1.
"Applications Maintenance Services" means the services described in Part C,
paragraph (a) of Schedule 3.1.
"Base Index" has the meaning given this term in Section 5.6.
"Baseline Budget" has the meaning given this term in Section 5.3(a).
"Base Services" has the meaning given this term in Section 3. 1.
"Benchmark Information" has the meaning given this term in Section 3.12(c).
"Business Consulting" means the services described in Part E of Schedule 3. 1.
"Calculated Services Fee" has the meaning given in Schedule 5. 1.
Schedule 1.1 - Page I
"CaIPX" has the meaning given this tern in the preamble to this Agreement.
Whenever any Affiliate of CalPX receives Services under this Agreement, the
definition of "CalPX" shall be deemed to include such Affiliate.
"CalPX" Auditors" has the meaning given this term in Section 5.8.
"CalPX Data" has the meaning given this term in Section 6. 1.
"CalPX Developed Software" means any Deliverable that (i) contains a
modification to the source code of CalPX Proprietary Software, or (ii) contains
newly developed source code the functionality of which cannot reasonably be
separated from the functionality of the related CalPX Proprietary Software, and
any derivatives of such Deliverables.
"CalPX Partners" has the meaning given this term in Section 6.5(b)(i).
"CalPX Proprietary Software" has the meaning given this term in Section 4.2(a).
"CalPX Representative" has the meaning given this term in Section 2.6.
"CalPX Software" means CalPX Proprietary Software and CalPX Vendor Software.
"CalPX Technology" has the meaning given this term in Section 4.4.
"CalPX Vendor Software" has the meaning given this term in Section 4.2(b).
"Change" means a material addition to or modification in the scope or method of
providing a Service, including any material addition to or modification of the
requirements or specification of any Deliverable.
"Change Control Procedure" means the procedures specified in or developed in
accordance with Section 3.5 pursuant to which Changes to the Services shall be
authorized by the parties.
"Change Order" means a document executed by the parties that authorizes a
Change.
"Change Review Board" has the meaning given this term in Part A of Schedule 3.
1.
"Computer Operations Services" means the services described in Part B of
Schedule 3. 1.
"Confidential Information" has the meaning given this term in Section 6.2(a).
"Configuration Services" has the meaning given to this term in Part D, paragraph
(a) of Schedule 3.1.
"Core Applications" has the meaning given this term in Part C, paragraph (b) of
Schedule 3.1.
Schedule 1.1 - Page 2
"Core Services" has the meaning given this term in Section 3.1(a).
"Critical Services" has the meaning given this term in Schedule 7.8.
"Current Index" has the meaning given this term in Section 5.6.
"Defect" has the meaning given this term in Part D, paragraph (b)(ii) of
Schedule 3. 1.
"Defect Notice" has the meaning given this term in Part D, paragraph (B) of
Schedule 3. 1.
"Deliverable" means all works of authorship that are prepared for CalPX by Perot
Systems in connection with the Services. The Deliverables shall include all
reports, drawings, plans, specifications, computer disks, tapes, printouts,
studies, memoranda, computation sheets, and other information, documents,
records or data, in whatever form or medium that contain CalPX's Confidential
Information.
"Desktop Procurement Services" means the services that are generally described
in Paragraph 2 of Schedule 1.2.
"Desktop Support Services" means the services generally described in Paragraph 2
of Schedule 1.2.
"Developed Software" means any Deliverable that is a software program,
programming script or similar work of authorship.
"disclosing party" has the meaning given this term in Section 6.2(a).
"disruption" has the meaning given this term in Schedule 7.8.
"Documentation" means all manuals, specifications, literature (excluding
generalized product descriptions, advertising materials, and similar items), and
documentation including but not limited to flow diagrams, file descriptions,
codes, and other written information prepared by Perot Systems for CalPX under
this Agreement.
"Effective Date" has the meaning given this term in Section 1.3.
"Embedded Software" has the meaning given this term in Section 6.5(c).
"Excluded Services" means the services described in Schedule 1.2.
"FERC" has the meaning given this term in paragraph 1 (a) of Schedule 7.3.
"FPA" has the meaning given this term in paragraph 1 (c) of Schedule 7.3.
Schedule 1.1 - Page 3
"Full-Time Equivalent" or "FTE" means the level of effort expended by an
individual performing his or her duties for approximately 160 hours per month,
12 months per year, less time off for vacation, holidays, illness, training and
other reasons (including short-term, unpaid marketing and proposal assignments
that do not materially and adversely affect any Services) consistent with Perot
Systems' human resources and benefits policies, provided that for PSC Personnel
assigned to perform Services under this Agreement for a committed duration of
one month or less, the actual time spent performing Services, pro-rated on a 160
hours per month basis, shall be used to determine the number of FTEs expended.
"Force Majeure Event" has the meaning given this term in Section 7.12.
"Improved Technology" has the meaning given this term in Section 3.8.
"Initial Term" has the meaning given this term in Section 1.3.
"ISO" has the meaning given this term in paragraph l(c) (2) of Schedule 7.3.
"IT Procurement Services" has the meaning given this term in Section 3.5.
"IT Steering Committee" has the meaning given this term in Part A, paragraph 6
of Schedule 3. 1.
"Key Personnel" has the meaning given this term in Section 2.3.
"Know-How" has the meaning given this term in Section 6.6.
"Losses" has the meaning given this term in Section 8.2(a).
"Make Whole Costs" has the meaning given this term in Section 7.7(c).
"Managed Equipment" means the third-party equipment listed in Part A of Schedule
4.2 that is managed by Perot Systems as part of the Services.
"Managed Software" means the CalPX Software, CalPX Vendor Software, Third Party
Software, Third Party Tools and Perot Systems Software listed in Schedule 4.2,
all Perot Systems Tools and Perot Developed Software, and all other software
programs agreed to be managed by Perot Systems as part of the Services.
"Management Procedures Manual" has the meaning given this term in Section 3.6.
"Network Services" has the meaning given this term in paragraph 3 of Schedule
1.2.
"Non-Transitioned Employees" has the meaning given this term in Section 2.7(c).
Schedule 1. I - Page 4
"Pass-Through Expenses" means any expenses for third party products and services
that are incurred by Perot Systems while acting as an agent of CalPX.
"Perot Developed Software" shall mean any Developed Software, other than Ca1PX
Developed Software.
"Perot Systems" has the meaning given this term in the preamble to this
Agreement or any subsidiary or Affiliate of Perot Systems Corporation that
performs Services under this Agreement.
"Perot Systems Software" has the meaning given this term in Section 6.4.
"Perot Systems Tools" has the meaning given this term in Section 6.4.
"Price Index" has the meaning given this term in Section 5.6.
"Privileged Work Product" has the meaning given this term in Section 6.2(f).
"Program Management Services" means the services described in Part A of Schedule
3.1.
"PSC Personnel" means employees of, or independent contractors of any level
retained by, Perot Systems providing Services under this Agreement.
"Punch List" has the meaning given this term in Part D, paragraph (b)(ii)(D) of
Schedule 3.1.
"PX" has the meaning given this term in paragraph (l)(c)(l) of Schedule 7.3.
"Quarterly True-Up" has the meaning given this term in Section 5.1(b).
"Reduction Percentage" has the meaning given this term in Section 5.1 0(a).
"Renewal Term" shall, in each case, mean the period that the term of this
Agreement may be extended or renewed beyond the Initial Term or the then
preceding Renewal Term, as the case may be.
"Required Improvements" has the meaning given this term in Section 4.5.
"Requirements" means the functional and operational requirements for a
Deliverable or Service that are specified by CalPX.
"Restricted Territory" has the meaning given this term in Section 6.5(b)(iii).
Schedule 1.1 - Page 5
"RIMF" has the meaning given this term in Section 3. 1.
"Service Fees" means the fees payable by CaIPX for the Services.
"Service Levels" has the meaning given this term in Section 3.2(a).
"Services" has the meaning given this term in Section 3.3(a).
"Standard Commercial Rates" has the meaning given this term in Section 5.2.
"Systems" means the Managed Equipment, Managed Software and the Applications
that are operated and managed by Perot Systems as part of the Services.
"Systems Software" means Managed Software and related object and source codes,
and all related supporting documentation and media, that perform tasks basic to
the functioning of the Managed Equipment or which are required to operate the-
Applications or otherwise provide Services, and any modifications, enhancements,
revisions, or supplements to such programs and methods from time to time,
including operating systems, systems utilities, data security software,
compilers, telecommunications monitors and database software.
"Tariff' has the meaning given this term in paragraph (1)(a) of Schedule 7.3.
"Task Orders" has the meaning given this term in Section 3.3(d).
"Term" means the Initial Term and all Renewal Terms.
"Third Party Software" means software programs owned by persons other than Perot
Systems, CalPX or any of their Affiliates.
"Third Party Tools" means tools owned by persons other than Perot Systems, CaIPX
or any of their Affiliates.
"Transition Assistance" has the meaning given this term in Section 7.1 1 (a).
"Transition Assistance Period" has the meaning given this term in Section 7.1 1
(a).
"Transition Period" has the meaning given this term in Section 3.2(a).
"Transitioned Employees" has the meaning given this term in Section 2.7(c).
"Virus" has the meaning given this term in Section 10.4(a).
"Work Product" means all Deliverables and Documentation, including but not
limited to reports, drawings, plans, specifications, computer disks, tapes,
printouts, studies, memoranda,
Schedule 1. I - Page 6
computation sheets, and other information, documents, records or data, in
whatever form or medium (including without limitation writings, printed and
electronic forms) prepared for CalPX by Perot Systems in connection with the
Services provided under this Agreement.
"Y2K Problem" has the meaning given this term in paragraph 1 of Schedule 1.2.
Schedule 1. I - Page 7
SCHEDULE 1.2
Excluded Services
Subject to the provisions of Section 3.3(c), CalPX shall have no obligation to
purchase any of the following services from Perot Systems.
1. Year 2000 Services. Perot Systems shall have no obligation under this
Agreement to identify, correct or resolve any problem caused by the
failure of any CalPX Software, CalPX Vendor Software or CalPX Technology,
(i) to record, store, process, or present calendar dates falling on or
after January 1, 2000, in the same manner, and with the same
functionality and accuracy, as performed on or before December 31, 1999;
(ii) provide a century indicator on all dates produced therein as output
or results from its operation; (iii) abnormally end or generate an
incorrect result when performing date calculations involving either a
single century or multiple centuries; (iv) sort all files in an accurate
sequence when sorted by date and read and write in an accurate sequence
when the date is used as the key for such reading or writing; and (v) be
capable of determining leap years (each such failure being a "Y2K
Problem"). Notwithstanding the foregoing, upon request by CalPX Perot
Systems shall assign PSC Personnel to identify, correct or resolve Y2K
Problems in substitution for the Services regularly performed by suchPSC
Personnel.
2. Desktop Support Services and Desktop Procurement Services. Perot Systems
shall have no obligation under this Agreement to provide Desktop Support
Services or Desktop Procurement Services.
The term "Desktop Support Services" means services involving maintenance,
operation or support (including help desk support services) of (i)
personal computers (including hardware, software, and other components)
typically used by a single individual at a time or (ii) the local area
network or wide area network hardware, software, and other components by
which such personal computers are linked, that are contracted to be
performed by IBM Global Services Corporation on the Agreement Date.
The term "Desktop Procurement Services" means services relating to the
procurement (including but not limited to vendor management, contract
management, costing, purchase order issuance and acquisition management)
of (i) personal computers (including hardware, software, and other
components) typically used by a single individual at a time or (ii) the
local area network or wide area network hardware, software, and other
components by which such personal computers are linked, that are
contracted to be performed by IBM Global Services Corporation on the
Agreement Date.
3. Network Services.
Perot Systems shall have no obligation under this Agreement to provide
Network Services.
The term "Network Services" means services involving procurement,
maintenance, operation or support of (i) hardware, software and other
components, including but not
Schedule 1.2 - Page I
limited to routers, hubs, and network interfaces, necessary to support a
data network from (and including) the router out to the third party
telecommunications infrastructure, or (ii) hardware, software and other
components including but not limited to telephone switches, handsets and
voice network that are being performed by MCI Worldcom on the Agreement
Date.
4. Configuration Services.
Perot Systems shall have no obligation under this Agreement to provide
Configuration Services.
Schedule 1.2 - Page 2
SCHEDULE 2.3
Personnel
Part A - CalPX Employees
Byrne, Stanley Borquez, Richard Chapman, James
Cheng, Leonard De Guzman, Benedict Gonzalez, Alex
Grimaldi, Matthew Johnson, Raymond Kam, Gary
Khoshnood, Davood Lin, Yung Kai Litwin, Wayne
Liu, Chuck Lofton, Jeffery Long, Charles
Lynch, Pamela Moring, Wendall Ridley, Brent
Rinaldi, John Shia, Ike Silva, James
Sun, Rick Swanson, Hilary Timberman, Steven
Tran, Kiet Wang, Nellie Wen, Dongfang
Wiles, Noah Williams, John Wong, Nancy
Schlotfelt, Robert
Part B - CalPX Contractors
Ahmadzadeh, Behzad
Mohtashami, Marijan
Paragos, Derek
Walker, Mary Anne
Zafrani, Jim
Schedule 2.3 - Page I
SCHEDULE 2.4
Key Employees
This schedule may be revised from time to time by mutual agreement of the
Account Manager and the CalPX Representative.
Employee
Richard Borquez
Ben DeGuzman
Davood Khoshnood
Chuck Liu
Pamela Lynch
John Rinaldi
Hilary Swanson
John Williams
Nancy Wong
Schedule 2.4 - Page I
SCHEDULE 2.7
HR Issues
Perot Systems shall prepare a transition event plan for review and approval by
CalPX prior to the Effective Date.
Transitioned Employees shall be eligible to participate in all Perot Systems'
employee benefit programs, plans and policies, maintained for employees of Perot
Systems under the same terms and conditions as apply to present employees of
Perot Systems. In particular, and without limitation as to other employee
benefits, Perot Systems shall provide health care coverage so that the
Transitioned Employees and their eligible dependents are covered by such
coverage on the Effective Date and Perot Systems shall waive all pre-existing
conditions, exceptions, exclusionary provisions and waiting periods.
For vacations and benefit plans, Perot Systems shall recognize length of service
with CaIPX as length of service for Perot Systems.
Perot Systems shall consider making an accommodation for Transitioned Employees
who have 401k loans under CaIPX's 401K Plan and shall consider on a case by case
basis as Perot Systems deems appropriate; provided that Perot Systems shall have
no obligation to amend the Perot Systems Corporation Retirement Savings Plan to
make such accommodation.
Perot Systems shall provide for Tuition Reimbursement for those Transitioned
Employees who are enrolled in courses on the Effective Date that will end after
the Effective Date.
Schedule 2.7 - Page 1
SCHEDULE 3.1
Base Services
Part A - Program Management Services
Program Office Services.
Perot Systems shall organize and manage a program office (i) to act as a
single point of contact to manage CalPX's information technology projects,
(ii) to facilitate the integration of common efforts across CalPX's
business units, (iii) to act as single point of contact for all change
requests, (iv) to manage the Enterprise Technology Test Facility through
which all development projects must pass before being released to
production, and (v) to facilitate the IT Steering Committee. The Account
Manager shall lead the program office and each party shall assign
appropriate personnel to participate in its activities as the parties'
from time to time agree are appropriate.
2. Project Management Services.
Perot Systems shall as appropriate:
a. Use project management tools for major projects, and provide current
status reports, including identifying issues that are reasonably
expected to cause delays in timely completion of projects.
b. Work with CalPX's managers to understand project priorities and
budget, and to resolve issues.
c. Schedule projects after approval is given by CalPX in accordance
with the Change Control Procedure.
d. Coordinate activities and manage the activities of Third Party
Vendors, including priorities, requirements, dependencies,
deliverables, schedules, and milestones.
e. Coordinate cross-functional impacts between Third Party Vendors and
CalPX, including adherence to CalPX's technology and business
process standards.
f. Create and distribute performance and other reports as mutually
agreed between Perot Systems and CalPX.
g. Coordinate technical efforts across operations.
h. Participate in site planning for IT initiatives requiring
specialized site preparation upon request.
i. Define and summarize CalPX's information needs and potential IT
areas for improvement. Develop strategies and summary implementation
plans to address as required upon request.
j. Finalize budgets and obtain authorization to implement projects.
k. Manage projects in accordance with the authorized budget.
l. Work with CalPX to integrate initiatives into tactical plans.
m. Implement reasonably appropriate quality controls as part of
processes and procedures.
Schedule 3.1 - Page 1
3. Change Control Services.
Perot Systems shall as appropriate:
a) Manage all requests for Change Orders and other changes that are
reasonably expected to affect the production environment.
b) Obtain approvals required by the Change Control Procedure for Change
Orders and to implement changes to the production environment.
c) The Change Review Board.
(a) Perot Systems shall organize and coordinate the activities of
a "Change Review Board" to review and approve or. reject
proposed Changes and to prioritize approved Changes and
existing information technology projects.
(b) The Account Manager, the CalPX Representative and one or more
executive-level employees designated by CalPX shall
participate in the Change Review Board. The CalPX
Representative shall chair the Change Review Board, which
shall meet monthly or more often as the parties deem
necessary. Perot Systems shall provide monthly project status
reports on all outstanding information technology projects to
the Change Review Board.
4. Enterprise Technology Test Facility Services
a. Perot Systems shall manage and operate the Managed Equipment and
Managed Software comprising the Enterprise Technology Test Facility.
b. Schedule usage of the Enterprise Technology Test Facility.
c. Develop, review and approve acceptance test plans for software
applications to be evaluated or tested in the Enterprise Technology
Test Facility.
d. Evaluate and, if appropriate, approve successful tests of software
applications for release to CalPX's production environment.
5. Architecture Services
a. Propose technology standards for adoption by CalPX and manage
compliance with adopted standards.
b. Develop, maintain and publish Architecture Standards.
c. Participate in maintaining and updating CalPX Technology Standards,
Architecture, Topology, Methods, and Project Plans.
6. IT Steering Committee Services
Perot Systems shall organize an IT Steering Committee to (i) participate
in the development of and approve CalPX's technology plan and budgets,
(ii) provide senior-
Schedule 3.1 - Page 2
level guidance to Perot Systems on CalPX's business priorities as they
affect the Services, and (iii) review and approve Changes submitted
through the Change Control Procedure. The CalPX Representative shall
chair the IT Steering Committee and each party shall designate up to four
senior personnel, including the Account Manager, the CalPX Customer
Representative, and such other persons as the parties collectively agree
are appropriate to participate in the IT Steering Committee. The IT
Steering Committee shall meet weekly or as otherwise mutually agreed.
The initial members of the IT Steering Committee shall be:
From Perot Systems:
Account Manager
Representatives of each service areas:
Program Management
Applications Management
Computer Operations
From CaIPX:
CalPX Representative
Representatives of each major business unit:
Trading
Settlements and Billing
Finance
Marketing
Compliance
Regulatory
Schedule 3.1 - Page 3
Part B -Computer Operations Services
Perot Systems shall operate and manage the Systems seven days per week, 24 hours
per day, by performing the following specific activities:
1.0 Ca1PX's Data Center Operation
1.1 Perform all master console and sub-system console functions for
production Systems.
1.2 Monitor all production processing for the Systems using
then-available Tools.
1.3 Using then-available Tools operate CalPX's Systems and Applications.
1.4 Provide system availability in accordance with the Service Levels.
1.5 Make available, monitor, and process on-line and batch applications,
including scheduled jobs re-runs, end-user requested processing for
the production Systems. Start application scheduling scripts (cron
jobs). Monitor Application batch cycles for completion as scheduled.
1.6 Resolve system-related problems in accordance with Service Levels.
1.7 Using then-available Tools monitor batch jobs and overnight
processing for successful completion for production Systems.
1.8 Using then-available Tools monitor for, and notify the Help Desk,
CaIPX and third parties, as appropriate, of, problems with
production Systems in accordance with mutually agreed escalation
procedures.
1.9 Evaluate, recommend, and, subject to CalPX's approval, implement
Tools required to perform systems automation, management, and
reporting.
1.10 Perform resolution and restart activities (including data set
synchronization) for abnormally ended batch Applications.
1.11 Maintain operations logs of CaIPXs data center activities, systems
problems, and report incidents to level I support.
1.12 Perform and monitor production Systems start-up and shut down.
1.13 Perform scheduled "full backups" and "incremental backups" of
production Systems, including databases, file systems, and Systems
Software on production Systems in accordance with CalPX's backup
schedules.
1.14 Conduct an annual test of the Disaster Recovery Plan.
1.15 Develop, maintain, and execute, as required, restore procedures for
production Systems. Assist in the execution of the restore
procedures for Applications.
1.16 Manage production Systems in accordance with the Change Control
Procedure.
1.17 Reestablish Systems Software after failure and coordinate with
application support personnel any application recovery issues.
1.18 Establish and manage the maintenance window.
1.19 Provide Managed Equipment problem identification and resolution.
1.20 Perform or arrange for Managed Equipment maintenance.
1.21 Provide coordination, assistance, and acceptance of new Managed
Equipment services, (e.g. installations, cabling, and training)
using Perot Systems' resources assigned to CalPX's account within
the existing capability of Managed Equipment.
Schedule 3.1 - Page 4
2.0 Production Control and Scheduling
2.1 Develop, maintain, initiate, and monitor all production Systems
schedules (e.g., on line, batch, technical support, off-hours, and
restricted period).
2.2 Resolve scheduling conflicts with CalPX.
2.3 Provide schedule status updates to CalPX, as reasonably requested.
2.4 Process on-request jobs.
3.0 Tape Operations and Administration
3.1 Perform all tape mount requests at CalPX's data center.
3.2 Perform output distribution activities for the tape library, as
required. CaIPX shall pay costs of media distribution.
3.3 Maintain and administer tape library at CalPX's data center.
3.4 Maintain integrity of tape library system at CalPX's data center.
3.5 Monitor tape hardware for malfunction.
3.6 Monitor tape usage.
3.7 Perform daily tape hardware and media maintenance.
3.8 Initialize new tapes.
4.0 Off-site Storage for the Data Center
4.1 Develop, coordinate, and execute standard off-site operational
storage requirements as defined in the Disaster Recovery Plan.
4.2 Archive production data.
4.3 Coordinate off-site storage functions as defined in the Disaster
Recovery Plan.
4.4 Review and comply with the physical specifications, retention
periods, and security procedures mutually agreed by the parties in
accordance with the Disaster Recovery Plan for off site stored
output.
4.5 Execute off-site storage procedures in accordance with the Disaster
Recovery Plan.
5.0 Operations Documentation
5.1 Create and maintain current all operations and related technical
documentation including an inventory of all hardware and software,
and software release levels for all production Systems.
5.2 Maintain Change Control Procedure documentation.
5.3 Maintain and propagate standard methodologies and Tools within the
production Systems.
6.0 Hardware Support
6.1 Manage Third Party Vendors of Managed Equipment with respect to
planning, installation, and problem resolution using the PSC
Personnel.
6.2 Provide hardware sizing estimates with the existing resources.
6.3 Administer equipment leases for Managed Equipment.
6.4 Coordinate and assist in regular maintenance for Managed Equipment.
Schedule 3.1 - Page 5
6.5 Initiate and track requests for space, power and other technical
center modifications in support of Managed Equipment installations.
6.6 Use then-available Tools to allocate and maintain space, equipment
and cabinets, (e.g., inventories and layouts) for Managed Equipment
located at CaIPX's Data Center.
6.7 Diagnose and coordinate the resolution of Managed Equipment problems
in accordance with applicable maintenance contracts.
6.8 Schedule, coordinate, and supervise changes to Managed Equipment,
including parts provisioning and testing, site survey verification,
capacity, redeployment, and integration for Managed Equipment.
7.0 Data Center Planning
7.1 Recommend, and, if approved by CalPX, procure and maintain spare
equipment needed to meet Service Levels.
7.2 Provide guidance and coordination for Managed Equipment
installations, routine maintenance, problem and crisis management.
8.0 Technical Support
General
8.1 Assist with new product evaluations, project support, applications
tuning or efficiency improvements, and other IT-related projects
using available PSC Personnel.
8.2 Evaluate, install/deinstall, customize, test, and maintain System
Software.
8.3 Provide technical advice and support to CalPX applications and
operations staff.
8.4 Notify help desk of critical outages.
8.5 Support the Disaster Recovery Plan.
8.6 Provide vendor access to Managed Equipment as required to resolve
problems or perform hardware maintenance. Provide technical liaison
for third party vendors.
8.7 Perform or, where appropriate, arrange for Third Party Vendors to
perform, Systems maintenance.
8.8 Maintain version control of Systems Software and Application.
8.9 Manage Third Party Vendor problem resolution activities for
production Systems.
Capacity Planning
8.10 Forecast resource requirements (disk, memory, etc.) for Managed
Equipment.
8.11 Develop a capacity plan. Manage capacity plan review and approval
process.
8.12 Analyze and report resource trends.
8.13 Provide operational input for hardware planning for the Systems.
8.14 Coordinate and manage projects to install storage devices.
Configuration Planning
8.15 Evaluate alternative configurations and recommend solutions.
Schedule 3.1 - Page 6
8.16 Establish and maintain standard configurations and related
documentation for production Systems.
Performance
8.17 Use reasonable commercial efforts to optimize the performance of
Managed Equipment and Managed Software at the CalPX's data center to
reduce costs or improve Service Levels.
8.18 Provide production System performance tuning.
8.19 Monitor System Software impacts on performance and recommend
enhancements, as appropriate.
8.20 Monitor performance of the Systems.
8.21 Using then-available Tools, report on service level performance.
9.0 Data Center Storage Management
9.1 Monitor and control storage performance and usage using
then-available Tools
9.2 Monitor and control mirrored disk systems.
9.3 Assign and initialize direct access storage volumes.
9.4 Replace or coordinate the replacement of failed disk drives and
systems.
9.5 Maintain established disk storage standards.
9.6 Maintain disk space requirements to accommodate CaIPX's business
growth forecasts as authorized by CalPX.
9.7 Provide direct disk storage technology and storage management.
9.8 Perform catalog management.
9.9 Provide Third Party Vendor access to Managed Equipment as required
to resolve problems or perform hardware maintenance. Provide
technical liaison for Third Party Vendors.
9.10 Install and move Managed Equipment, with Third Party Vendor support,
as required, in accordance with the Change Control Procedure.
9.11 Monitor and adjust disk space allocations.
10.0 Database Management For Production Systems Only
10.1 Maintain physical databases.
10.2 Support database software.
10.3 Manage production database availability, including space planning
for expansions (segments, extents, table free space, transaction
logs, etc.).
10.4 Perform production database reorganizations and changes due to
application changes or to optimize performance (e.g., redundancy,
access, etc.).
10.5 Perform ongoing production database management and tuning of the
production database, including interactions with production
hardware, software, and operating systems.
10.6 Install new database management System Software releases.
10.7 Perform production database administration.
10.8 Perform production database log monitoring and tracking.
10.9 Assist and coordinate Third Party Vendor problem resolution
activities.
Schedule 3.1 - Page 7
10.10 Perform production database object management (index relocations
and rebuilds, table relocations and rebuilds, rollback segment
resizing, on-line redo log management, temporary segment
management).
10.11 Provide operational interfacing with application database
administrators in relation to testing environment databases.
Support data analysis, modeling, and logical database design.
10.12 Perform database administration using then-available Tools.
10.13 Maintain appropriate redundancy and fail-over capabilities - may
not be automatic for some applications.
11.0 Administration
11.1 Recommend and implement Managed Equipment utilization planning,
including redeployment of user workstations, except for desktop
workstations, in accordance with CalPX's business policies.
11.2 Administer leases for Managed Equipment, including monitoring
expiration, warranty and technical terms and review invoices prior
to submission for payment by CalPX, but excluding arranging for
payment of lease payments.
11.3 Order and coordinate installation of Managed Equipment.
11.4 Administer software licenses for Managed Software and System
Software.
11.5 Monitor software maintenance levels and recommend updates as
appropriate.
12.0 Information Security and Disaster Recovery
12.1 Establish, maintain, and implement the security policies and
procedures approved by CalPX.
12.2 Establish, maintain, and implement security administration
processes, including User ID administration standards, providing
special authorities, and purging unused access.
12.3 Perform Application security administrative functions, including
implementing functions of access control software up to and
including the front-end application (GUI) and database access.
12.4 Manage authorizations and access for users and operations to the
Systems.
12.5 Perform password administration for all supported Systems
Software, database environments, LAN systems, and network
components.
12.6 Implement and maintain a security violation log that shall be
reported to management.
12.7 Use then-available Tools approved by CalPX to restrict
unauthorized use of Managed Equipment and network devices.
12.8 Provide secure storage for portable storage media relating to
production servers.
12.9 Maintain appropriate tracking of Managed Equipment.
12.10 Identify, implement, and maintain virus avoidance, detection and
elimination software for servers.
12.11 Recommend and implement Tools to maintain commercially reasonable
security controls for dial-in services.
Schedule 3.1 - Page 8
12.12 Define specific disaster recovery requirements and propose a
Disaster Recovery Plan. Use reasonable commercial efforts to
ensure that the Disaster Recovery Plan remains current at all
times.
12.13 Restore operating environment upon failure within agreed-upon time
frames and parameters, according to the CalPX approved Disaster
Recovery Plan.
12.14 Store CalPX-identified critical information and media off-site in
accordance with the Disaster Recovery Plan paid for by CalPX.
12.15 Work with CaIPX to identify test objectives for the annual test of
the Disaster Recovery Plan.
12.16 Establish and monitor disaster recovery facilities in accordance
with the Disaster Recovery Plan.
12.17 Provide operational support requirements for the Applications
disaster recovery solutions in accordance with the Disaster
Recovery Plan.
12.18 Maintain recovery management (file backup/recovery) processes for
Managed Equipment at the Data Center and current listings of
system configurations for such Managed Equipment in accordance
with the Disaster Recovery Plan.
12.19 Provide procedures for moving media from off-site storage to
recovery center in accordance with the Disaster Recovery Plan.
12.20 Provide recovery site resources for system recovery in accordance
with the Disaster Recovery Plan.
12.21 Develop, manage, and implement approved disaster declaration
policies in accordance with the Disaster Recovery Plan.
12.22 Provide contact lists of personnel responsible for coordinating
and managing recovery planning procedures in accordance with the
Disaster Recovery Plan.
12.23 Provide and maintain procedures for emergency recovery of Managed
Equipment at the Data Center and successful transfer of operations
to the alternate-processing site.
12.24 Develop and implement procedures to be followed at recovery center
in accordance with the Disaster Recovery Plan.
12.25 Make Changes to the Disaster Recovery Plan using the Change
Control Procedure.
12.26 Develop and implement Disaster declaration processes, including
Third Party Vendor notification, establishing CalPX communication
points, and activating the Disaster Recovery Plan.
CalPX and Perot Systems shall revise the scope and description of all
Services relating to disaster recovery in this Schedule 3.1 as
appropriate after the Required Improvements relating to disaster recovery
are completed.
13.0 Help Desk, Problem Management and Reporting
13.1 Establish single point of contact on a 7 days a week, 24 hours a
day basis, that provides assistance for end-user problems, and
coordinate problem tickets, through a supplied and supported
problem management system.
13.2 Respond to end-user service requests and problem reports, in
accordance with escalation processes that assign severity levels
by problem.
Schedule 3.1 - Page 9
13.3 Log appropriate caller information into a centralized problem
management System
13.4 Identify appropriate support group for escalated problems.
13.5 Identify training opportunities for CaIPX's employees based on
problem history using PSC Personnel.
13.6 Seek opportunities for continuous improvement for Help Desk
activities.
13.7 Initiate work request for the applications support team, when
necessary.
13.8 Track problems through resolution.
13.9 Establish and manage problem prioritization.
13.10 Provide direct access to all appropriate operations staff when
required.
13.11 Establish standards and procedures for Help Desk calls.
13.12 Provide on-call Help Desk operational support, and if provided, to
CalPX's application support staff.
13.13 Track and provide status on all reported incidents.
13.14 Confirm with initiator that problem has been corrected and close
incidents accordingly.
13.15 Provide daily status report containing all outstanding problems.
13.16 Analyze trends and recommend actions to resolve recurring problems
upon request using PSC Personnel.
13.17 Provide prompt notification and escalation of critical problems or
outages.
13.18 Collect and report Help Desk statistics monthly.
13.19 Provide information to end-users on Help Desk functions and
availability.
13.20 Communicate application and environment information to Help Desk
personnel.
13.21 Provide assistance and recommendations for "work around" solutions
when technology has failed or under performed.
13.22 Perform and supervise problem process as defined by the problem
management procedure guide.
13.23 Create and publish bulletins and procedures regarding issues and
changes to CalPX's production Systems, and communicate these to
user communities defined by CalPX.
13.24 Perform weekly problem management reviews in order to identify
repetitive problems.
13.25 Open problem tickets to initiate work requests for Application
changes.
Schedule 3.1 - Page 10
Part C - Application Maintenance Services
(a) Application Maintenance Services.
(i) Perot Systems shall maintain the CalPX Proprietary Software and
Perot Systems Software identified in Part A and Part C,
respectfully, of Schedule 4.1. Perot Systems shall have no
obligation to maintain any other software programs, except as
agreed in accordance with the Change Control Procedure.
(ii) For Core Applications:
* Perot Systems shall provide first line problem
determination on a 7 days a week, 24 hours per day basis.
* Perot Systems shall provide second line problem resolution
support for Core Applications whose source code it can
access and modify based on the severity level problem
determination defined in paragraph C of Schedule 3.3.
(iii) For non-Core Applications:
* Perot Systems shall provide first line problem
determination during Normal Business Hours.
Perot Systems shall provide second line problem resolution
support for non- Core Applications whose source code it can
access and modify on a reasonable commercial efforts basis.
(b) Core Applications.
During the Transition Period, CalPX and Perot Systems shall validate and revise
as appropriate the following list of Core Applications. After the Transition
Period, this list of Core Applications shall be modified, if at all, by the
parties through the Change Control Procedure.
<Table>
<Caption>
Software Description Software
Version
Block Forward Ticker 1.0
BuckEye (ISODAB) 2.1
Zonal Price Calculation (DA & HA) 1.1.9
Metering System 1.2
Over Generation Management (DA & HA) 1.0.1
PeopleSoft 7.5
Post-Processor 5.2.1
PowerBase 1.15
Pre-Processor Plus 1.6.1
Web (ST) 1.15
Zonal Price Checker (DA & HA) 1.0
</Table>
Schedule 3.1 - Page 11
During the Transition Period, CaIPX and Perot Systems shall validate and revise
as appropriate the following list of Core Applications that are provided by OM
Technology. After the Transition Period, this list of Core Applications shall be
modified, if at all, by the parties through the Change Control Procedure.
<Table>
<Caption>
Software Description Software
Version
Block Forward Secure Back Office 4.3
Block Forward CIBIOS Trade Application 3.0 - 6.7
Day Ahead Bidding & Scheduling 5.1.16
Hour Ahead Bidding & Scheduling 5.1.1.5
OM Net OMEX (network gateway) 2.2.1
Settlements 5.1.7.1
Trade Application 5.1.14
Block Forward Click 3.01
</Table>
Schedule 3.1 - Page 12
Part D - Applications Development Services
a) Application Development Services.
* Perot Systems shall assist CaIPX personnel to develop, enhance and review
the functional requirements for Application and Developed Software
identified by the Program Office that has been approved for acquisition or
development through the Change Control Procedure in accordance with
technology standards, development budgets and schedules approved by CalPX
from time to time.
* Perot Systems and CaIPX shall review, and revise as necessary, the
functional requirements, development budget and development schedule for
each Application. Following CalPX's approval of these items, Perot Systems
shall prepare a Change Order confirming the requirements, development budget
and schedule for submission to the Change Review Board. Work shall begin
under the Change Order promptly after its execution by CalPX and Perot
Systems.
* All enhancements to Application shall be considered part of Application
Development Services.
* All services required to introduce or integrate any software into CalPX
systems, including customization or configuration of such software, shall be
considered part of Application Development Services, provided, however, that
if the vendor of Third Party Software requires that (i) such vendor
customize or configure its software, or (ii) an authorized reseller, systems
integrator or similar service provider customize or configure its software,
then such customization or configuration of such software shall not be
considered part of Application Development Services unless Perot Systems is
an authorized reseller, systems integrator or similar service provider at
the time the Third party Software is acquired by CaIPX ("Configuration
Services").
* Perot Systems shall have no obligation to enhance any Application whose
source code it can not access and modify.
b) Acceptance. Acceptance of Deliverables shall be conducted in accordance with
the following procedures.
* Documentation. Perot Systems may submit interim drafts of Documentation to
CalPX for its review. CalPX shall review each interim draft within 15
business days after receiving it. When Perot Systems delivers final
Documentation to CalPX, CalPX shall have the opportunity to review the
written deliverable for an acceptance period of 10 business days after
receiving it ("Acceptance Period"). CaIPX shall notify Perot Systems'
Account Manager in writing by the end of the Acceptance Period either
stating that the Documentation is accepted in the form delivered or
describing in reasonable detail any deficiencies that must be corrected
prior to acceptance. If CalPX does not send a deficiency notice by the end
of the Acceptance Period, the Documentation shall be deemed to be Accepted.
If CaIPX sends a timely notice of deficiencies, Perot Systems shall correct
the described deficiencies as promptly as possible; provided, however, if
Perot Systems, upon
Schedule 3.1 - Page 13
providing CalPX's Account Manager a detailed justification of its position,
does not believe that CalPX has identified a deficiency, the parties shall
follow the procedures set forth in Article 7. Upon receipt of corrected
Documentation from Perot Systems, CalPX shall have a reasonable additional
period of time, not to exceed 15 business days, to review the corrected
Documentation to confirm that the identified deficiencies have been
corrected.
* Deliverables. At least 30 days prior to the date on which Perot Systems is
scheduled to deliver any Deliverable to CalPX for testing, Perot Systems
shall deliver proposed testing procedures for the Deliverable for CalPX's
review. At least 15 days prior to the date on which Perot Systems is
scheduled to deliver the Deliverable to CalPX, the parties shall agree upon
the testing procedures for the Deliverable and the objective criteria for
determining whether the Deliverable should be accepted ("Acceptance Test
Plan"). The purpose of the Acceptance Test Plan shall be to determine
whether the Deliverable performs the functions described in its approved
specifications and performs the Requirements without any Defects. As used in
this Agreement, "Defect" means a reproducible failure of a Deliverable to
satisfy the Acceptance Test Plan. Acceptance of Software deliverables shall
be conducted in accordance with the following procedures.
(A) The Acceptance Test Period for each Deliverable shall be specified
in the relevant Project Plan.
(B) Perot Systems and CalPX shall start to perform Acceptance Testing
on each Deliverable promptly after receiving Perot Systems' notice
that the Deliverable is ready for acceptance. Acceptance Testing
shall be performed as set forth in the Acceptance Test Plan. If
CalPX determines during the Acceptance Period that the Deliverable
has one or more Defects, CalPX shall promptly send to Perot
Systems' Account Manager a notice ("Defect Notice") describing the
alleged Defect(s) in sufficient detail to allow Perot Systems to
recreate it or them. The parties shall use commercially reasonable
efforts to identify all Defects prior to the end of the Acceptance
Test Period.
(C) Perot Systems shall correct any Defects in a Deliverable promptly
after receiving a Defect Notice and provide the corrections to
CalPX for re-testing. CaIPX shall promptly re-test any corrected
portions of a Deliverable after receiving the corrections from
Perot Systems.
(D) If any remaining uncorrected Defects exists in the Deliverable at
the end of the Acceptance Test Period, CalPX shall provide Perot
Systems by the end of the Acceptance Test Period with notice of
the final list of outstanding Defects, describing them in
sufficient detail to allow Perot Systems to recreate them ("Punch
List"). Perot Systems shall correct any Defects identified on the
Punch List promptly after receiving the Punch List. When all
Defects on the Punch List have been corrected, Perot Systems shall
provide the corrections to CalPX. The parties shall have 15 days
after receipt of the corrections, unless the parties agree to a
different period in writing, to re-test the corrected Deliverable
to confirm the
Schedule 3.1 - Page 14
correction of the Defects identified on the Punch List and to
identify any remaining Defects. If CaIPX determines that any
Defects identified in the Punch List have not been corrected,
CalPX shall provide Perot Systems by the end of the 15-day
re-testing period with notice of a revised Punch List, which may
include Defects not identified on the Punch List. Perot Systems
shall promptly correct any Defects that are identified in the
revised Punch List and provide the corrections to CalPX. The
parties shall have a further 15 day period after receipt of the
corrections, unless the parties agree to a different period in
writing, to re- test the corrected Deliverable to confirm the
correction of the Defects. If CaIPX determines as a result of the
re-testing that the Software deliverable still contains one or
more Defects, CalPX shall notify Perot Systems' Account Manager,
who shall promptly cause Perot Systems to perform a root cause
analysis of such Defects and refer the matter to the IT Steering
Committee. If the IT Steering Committee is unable to resolve the
matter within 15 days after the matter is submitted to it, any
party may submit the matter to the dispute resolution procedures
set forth in Article 7.
(E) Perot Systems and CalPX each agree to work diligently to achieve
Acceptance of each Deliverable at the earliest possible date.
Schedule 3.1 - Page 15
Part E - Business Consulting Services
The PSC Personnel assigned to provide Business Consulting Services to CalPX
shall, upon request by CalIPX, provide advice to CalPX in the following
substantive areas:
* Trading and scheduling
* Business and regulatory affairs
* Settlements calculation
* Market compliance
* Information technologies
* Finance
* Marketing
* Product Development
Business Consulting Services shall include the following activities, among
others:
* Design, review, document or train on business protocols for CalPX and other
participants in the California energy market, including the California
Independent System Operator (ISO), upon request by CalPX;
* Design, review, or document regulatory filings for CalPX and all other
participants in the California energy market, including the ISO, upon
request by CalPX; and
* Design, review, document or train on information technology solution methods
and algorithms, including development and review of mathematical model,
computational algorithm and detailed functional specifications.
All services related to the above activities including but not limited to
meeting with CalPX's staff, ISO staff and all other participants in the
California energy market, including preparation time for training shall be
deemed as Business Consulting Services.
Schedule 3.1 - Page 16
SCHEDULE 3.3
Service Levels
A. Service Levels - General Provisions
During the Transition Period CalPX and Perot Systems shall validate the service
levels set forth in this Schedule 3.3. Commencing with the first full calendar
month after the Transition Period for new Application, each performance metric
shall be measured and reported to CalPX on a monthly basis.
Perot Systems shall perform Services for which no Service Level is
specified in this Schedule 3.3 at least at the same level, and with the
same degree of accuracy, quality, completeness and responsiveness as
CalPX performed such Services prior to the Effective Date.
Assumptions and Pre-conditions: Perot Systems' obligation to comply with
the Service Levels set forth in this Schedule 3.3 is contingent upon the
accuracy of the assumptions and the satisfaction of the pre-conditions
set forth below. If any of these assumptions are inaccurate or any of
these pre-conditions are not satisfied, Perot Systems and CalPX shall
negotiate in good faith to adjust the Service Levels appropriately or to
select alternate Service Levels.
* Each Service Level shall be measured using then existing
measurement Tools.
* Server availability shall be calculated by dividing (i) the number
of minutes the applicable server is responding to system commands,
by (ii) the total number of minutes in the applicable month, based
on 7 x 24 availability, minus the total number of minutes of
downtime (a) reserved for system maintenance windows, (b) reserved
for CalPX approved, non-routine maintenance periods, (c) reserved
for CalPX approved Application installation periods, (d) caused by
defects in Managed Equipment, Applications (except to the extent
such defects result from modifications to such Applications made
by PSC Personnel), or services provided by Third Party Vendors
(other than PSC Personnel), (e) caused by processing transaction
volumes in excess of those for which the applicable system was
designed, (f) caused by an Application that has not been tested in
a reasonably adequate test environment for a reasonably adequate
time period before being placed into the production System, and
(g) defects in Applications (except to the extent such defects
result from modifications to such Application made by PSC
Personnel), or services provided by Third Party Vendors (other
than PSC Personnel).
* CaIPX shall authorize the replacement or repair, as reasonably
appropriate, of any hardware and software reasonably necessary (i)
to replace hardware that begins to exhibit erratic performance or
has otherwise become obsolete, (ii) to
Schedule 3.3 - Page 1
upgrade such hardware or software in accordance with the
recommendations of its manufacturer, (iii) to interoperate
properly with other hardware or software authorized to be replaced
by CalPX, or (iv) to process the transaction volumes then being
processed by the applicable hardware or software.
* Service Levels shall be measured but not enforced until the next
calendar month following each (i) transition to a new hardware or
software platform that affects the applicable Service Level and
(ii) implementation of new Applications that affects the
applicable Service Level.
* Unless otherwise agreed, the scheduled system maintenance window
shall be 12:01 a.m. to 3:00 a.m. Pacific Time each Saturday and
Sunday.
Production Servers Servers running Core Applications Perot Systems
shall cause servers A server shall be deemed 95% used by
CalPX to operate the day running Core Applications used by
"available" if the operating ahead and hour ahead markets
should CalPX to operate the day ahead and system installed
on such be "available" 7 days per week, 24 hour ahead
markets to be "available" server is responding to hours per
day. 7 days per week, 24 hours per day,console commands
entered except during maintenance windows at the server.
and other scheduled outages approved in advance by CalPX,
for at least the percent of time set forth under the
heading Service Level Requirement.
Back-Office Servers Servers running Core Applications Perot Systems
shall cause servers A server shall be deemed 95% that are
used by CalPX (i) to settle running Core Applications used
by "available" if the operating transactions from the day
ahead and CaIPX (i) to settle transactions from system
installed on such hour ahead markets or (ii) to manage the
day ahead and hour ahead markets server is responding to
its financial or other internal or (ii) to manage its
financial or other console commands entered operations
(e.g., PeopleSoft internal operations to be "available" 7
at the server. applications) should be "available" 7 days
per week, 24 hours per day, days per week, 24 hours per
day. except during maintenance windows and other scheduled
outages approved in advance by CalPX, for at least the
percent of time set forth under the heading Service Level
Requirement. Test/Market Simulation Servers forming part of
the Enterprise Perot Systems shall cause servers A server
shall be deemed 90% Servers Technology Test Facility should
be forming part of the Enterprise " available" if the
operating "available" during Normal Business Technology
Test Facility to be system installed on such Hours and
otherwise during scheduled "available" during Normal
Business server is responding to simulations during
scheduled test Hours, except during maintenance console
commands entered periods. windows and other scheduled
outages at the server. (including outages to reconfigure
hardware or software) approved in advance by CalPX, for at
least the percent of time set forth under the heading
Service Level Requirement.
Schedule 3.3 - Page 2
Gateway Servers The DEC Alpha servers running the Perot System
shall cause the DEC A server shall be deemed 95% OM Gateway
should be 'available' 7 Alpha servers running the OM
"~available" f the operating days per week, 24 hours per
day. Gateway to be available days per system installed on
such week, 24 hours per day, except server is responding to
during maintenance windows and console commands entered
other scheduled outages approved in at the server. advance
by CaIPX, for at least the percent of time set forth under
the heading Service Level Requirement
User accounts and ID User accounts and user IDs for CaIPX During
Normal Business Hours, Perot A request for an activation
95% employees should be activated or Systems shall activate
or change each of or a change to a user changed within four
hours after user account or user ID within four account or
user ID shall be receiving a proper request for such
business hours after receiving a deemed to be proper if the
action. proper request for such action, for at request is
submitted through least the percentage of requests set
Perot Systems' help desk or forth under the heading Service
Level electronic ticketing system Requirement. with the
approvals required by the Management Procedures Manual.
Password Resets User passwords that have expired or During
Normal Business Hours, Perot A request for a password 94%
have been suspended should be reset Systems shall reset
each user reset shall be deemed to be within 15 minutes
after receiving a password that has expired or has been
proper if the request is proper request for such action.
suspended within 15 minutes after submitted through Perot
receiving a proper request for such Systems' help desk or
action, for at least the percentage of electronic ticketing
system requests set forth under the heading with the
approvals required Service Level Requirement. by the
Management Procedures Manual. Help Desk Call Calls to the
help desk should be During Normal Business Hours, Perot
This service level shall be 90% Response Time answered
within 30 seconds during Systems shall answer all calls to
the measured based upon call Normal Business Hours. help
desk within 30 seconds for at reports from CalPX's ACD
least the percentage of calls set forth or equivalent
system, and under the heading Service Level shall exclude
delays in Requirement answering during which recorded
messages are being played. Backups Backup procedures for
each System Perot Systems shall perform the CaIPX and Perot
Systems 96% should be performed as provided in backup
procedure for each System as shall establish backup the
Management Procedures Manual. provided in the Management
procedures and schedules Procedures Manual in at least the
within 60 days after the percentage of cases as set forth
under Effective Date. the heading Service Level
Requirement.
C. Problem Resolution Commitments
Perot Systems shall provide the support services described
in the tables below to resolve problems within the time
periods specified in the tables below for problems of the
severity described below for systems and Applications that
it has access to and can modify.
Schedule 3.3 - Page 3
Definition of Terms
Severity Level: The severity level reasonably assigned to a problem by
CalPX and Perot Systems based on the impact of that
problem on CaIPX's business.
Definition: The general nature of the problem that falls within the
applicable Severity Level.
Support: The general level of support that Perot Systems and CaIPX
shall provide while attempting to resolve a problem of the
applicable Severity Level.
Service Level: Maximum amount of time Perot Systems shall take to
resolve a problem of the applicable Severity Level.
Status Update: The frequency with which CalPX shall be updated on the
status of the problem.
Report
Required: If YES, then Perot Systems shall regularly report its
problem resolution status to CalPX.
Schedule 3.3 - Page 4
01 A problem shall be Pcrot Systems shall provide uninterrupted
problem Perot Systems Every hour Yes assigned this isolation and
determination services. shall resolve or until the severity level
if (i) Perot Systems shall implement workarounds and provide
ticket first the majority of users patches immediately after
testing such items as workarounds reaches at the applicable site
provided in the Management Procedures Manual. for 98% of all Temp
Fix, are adversely Perot Systems shall implement hardware and
problems Resolved or affected, (ii) the software upgrades
implementing more th h assigned this Closed problem has high
resolutions during the first available maintenance Severit Level
status. visibility, and (ii) window after testing of such upgrades
is hours u there is no opeou workaround completed. available.
CalPX shall provide on-site support to assist in problem isolation
and determination activities and Example: A file to test problem
resolution. server is not available.
02 A problem shall be Perot Systems shall provide problem isolation
and Perot Systems Every four Yes assigned this determination
support on an as needed basis until a shall resolve or hours until
severity level if (i) workaround is identified. provide the ticket
the majority of users Perot Systems shall implement a workarounds
workarounds first reaches at the applicable site immediately after
it is tested as provided in the for 98% of all Temp Fix, are
adversely Management Procedures Manual. Perot Systems problems
Resolved or affected, (ii) the Management rdure an ot Systes
assigned this Closed problm hashigh shall implement hardware and
software upgrades Severity Level status. problem has high
implementing more thorough resolutions during wity 24 visibility,
and (iii) a the first available maintenance window after within 24
available, but the testing of such upgrades is completed.
performance of the CalPX shall provide support to assist in
problem applicable System is isolation and determination
activities and to test degraded or the the workaround.
functionality of the applicable System is materially limited.
Example: A router is down, however, traffic is rerouted with
degraded performance.
03 A problem shall be Perot Systems shall provide problem isolation
and Perot Systems Twice No assigned this determination support
during Normal Business shall resolve or weekly until severity
level if (i) aHours. provide the ticket small percentage of Perot
Systems shall implement workarounds and workarounds first reaches
users at the hardware and software upgrades during the first for
98% of all Temp Fix, applicable site are available maintenance
window after testing of is problems Resolved or adversely
affected, completed assigned this Closed and (ii) the problem .
Severity Level status. has limited visibility.CalPX shall test
fixes. within five Example: A user is business days. unable to
establish an application session from his/her machine.
Schedule 3.3 - Page 5
A problem shall be Perot Systems shall provide problem isolation
and Perot Systems Weekly until No assigned this determination
support during Normal Business shall resolve or the ticket
severity level if the Hours. provide first reaches affected
Systems Perot Systems shall implement workarounds and workarounds
Tem Fix, be operated without hardware and software upgrades during
the first for 98% of all Resolved or significant available
maintenance window after testing is problems Closed limitations on
completed. assigned tis status. performance or Severity Level
functionality using a CalPX shall test all fixes. within five
workaround. business days. Example: A printer is not working
however, users can re-route jobs to another printer.
05 A problem shall be Perot Systems shall provide problem isolation
and Perot Systems Twice No assigned this determination support
during Normal Business shall resolve or monthly Severity Level if
Hours. provide until the neither the user nor Perot Systems shall
implement workarounds and workarounds ticket first operation of
the hardware and software upgrades during the first for 98% of all
reaches applicable System is available maintenance window after
testing is problems Temp Fix, materially adversely completed
assigned this Resolved or affected. .mpte Severity Level Closed
Eaffecte. AP CaIPX shall test all fixes. within 10 status.
Example: A PC bsns as connects duplicate business days. sessions
to one resource.
Schedule 3.3 - Page 6
SCHEDULE 4.2
Managed Software
Part A - CalPX Proprietary Software
<Table>
<Caption>
Software Program Version
Admin Fee Calculator 4.5.2
Automatic UMCP Posting (DA & HA) n/a
Compliance (DA & HA) Powerbuilder Reports 2.65
Compliance Data Warehouse n/a
Credit Reports (security deposit) 2.4.1
Invoice Parser 2.2
Metering System 1.2
PGE Post 4.1
Post-Processor 5.2.1
PowerBase 1.15
Pre-Processor Plus 1.6.1
Real Time DA Loader (RTHABACK) 7.0.0
Real Time HA Loader (RTHALOAD) 9.4.0
Real Time Report/Data Entry (RTHAFRNT) 8.1.8
Real Time NERC Scheduling Tagging (NERC) 3.5.1
Settlements Reports n/a
Trading Reports 1.34
Web DA Loader 4.6
Web HA Loader 4.7
Web (ST) 1.15
Part B -- CalPX Vendor Software
Utilities
Acrobat Reader 3.01
Acrobat Reader 3.0
ADP PC/Payroll for Windows 2.52-01
ADP HR Perspective 2.5
AutoSys 4.3
BAMTRAC System 2.6
BMC Patrol Agent 3.2.5
Business Objects 4.1.3
ClientPak for Windows NT 5.1
</Table>
Schedule 4.2 - Page 1
<Table>
Data Direct Connection OBDC Drivers 3.10
Dbartisan 4.01
DB Tools Core Lib Win 2.2w
DEC Forms 2.2A
Dialer - IBM Global Network 4.18.4
Ditto Tools Driver for Windows NT 3.51
Ditto Tools Driver for Windows NT 4.0
English HP-UX CDE Runtime Environment B.10.20
English HP-UX CDE Runtime Environment B.10.20
Enterprise Administrator Domain License 4.51.00
Enterprise Administrator User License
Enterprise Cluster Master Toolkit A.10.11
Extension Software Patch Bundle B.10.20.38
Extension Software Patch Bundle B.10.20.33
Extension Software Patch Bundle B.10.20.33
Fast Forward 3.0
Fasttrack Server B.01.00.00
Fasttrack Server B.01.00.00
Fibre Channel Mass Storage Driver B.10.20.30
Fibre Channel Mass Storage Driver B.10.20.30
GDB 4.17
HP aC++ Compiler S800 A.01.07.01
100BT/9000 EISA B.10.20.0I
HP GlancePlus/UX for s800 10.20 B.10.20.72
HP Mpower /Web for Series 700 - E B.10.20.03
HP OnLineJFS (Advanced VxFS) B.10.20
HP-PB 10OBase-T/9000 B.10.20.06
HP-PB 100 Base-T/9000 B.10.20.02
HP-PB 10OBase-T/9000 B.10.20.09
HP-UX Media Kit B 10.20
HP-UX 10.20 Hardware Extensions B.10.20.HWE
HP-UX 8-User Licensee B. 10.20
HP-UX Installation Utilities
(Ignite-UX-S800- A.1.51 10.20
HPUX Installation Utilities for
Installing 10.20 A.1.51
HPUX 10.0 Support Tools Bundle B.10.20.08
HPUX 10.0 Support Tools Bundle B.10.20.08.04
HP-UX Core OS Year 2000 Patch Bundle B.10.20.A0720
HP_UX Core OS Year 2000 Patch Bundle B.10.20.A0720
HunmingBird (Exceed/Xpress, Xpress/Host 1.6 rel 4.25
Hyena 1.76
Internet Information Server 3.0
Internet Information Server 2.0
</Table>
Schedule 4.2 - Page 2
<Table>
Logic Works ER win/ERX 3.0
Logic Works EW win/ERX 3.5.1
Lotus Domino Fax Server Pspt Media Pack 4.5
Lotus Domino Fax Server Win NT 4.5
MC / Service Guard A.10.10
MC / Service Guard A.10.10
MCSG 10.10 Patches A.1.0
Microsoft SMS Client Access License server 1.2
Microsoft Systems Management Server 1.2
Microsoft TechNet Starter Kit Server N/A
Microsoft Telnet 4.0
Microsoft Telnet 4.4
Microsoft Internet Information Server 3.0
Microsoft Index Server 2.0
Microsoft Transaction Server 2.0
Microsoft Active Server Pages 3.0
Microsoft Visual SourceSafe 6.0
MirrorDisk / UX B.10.20
Money h++ Win 2.21w
MPWeb 1.1 s700 reference bundle B.10.20.03
Multi Edits 7.11
Net BackUp (Windows NT server) 3.2
Net Term 4.2.5
Netviz 2.5
NetWorker for HP-UX 5.1
NetWorker for Windows NT 5.1
Norton AntiVirus 4.0
Norton AntiVirus NT Server 4.0
Norton AntiVirus NFR Promo 4.0
Norton AntiVirus (Windows NT Server) 4.0
Norton AntiVirus 5.0
ODBC 3.1.0
Octopus HA+ 3.0
Omni Page Limited Edition 5.0
Palm Pilot Desktop 2.1
Patrol/WMS 3.2.05
Patrol/NT 3.2.06
PeopleSoft 7.5
PowerMart - Informatica 4.5.1
PSPT Media Pack Fax Server 1.1
PSPT Media Pack Notes NA/Lotus Pass 4.5.2
Purify 4.2
Quota Manager Standard Edition 2.6.1A
</Table>
Schedule 4.2 - Page 3
<Table>
RDB 6.1A
RTR 3.1-D
Scan Wizard 2.35
Secure Server Certificate n/a
shmmax +1Gb Patches A.1.0
SPF / Source Edit 2.0
Sybase System 11 ODBC 3.0.28.22
TexBridge Pro 96 96
Tools h++ Win 7.07w
Trial HP GlancePlus/US Pak for s800 10.20 B.10.20.140
Trial HP MeasureWare Server Agent for s800 B.10.20.140
10.20
Trial HP PerfView for s800 10.20 B.10.20.109
Trial HP GlancePlus/UX for s800 1 B.10.20.95.
WANDA Electronic Services System 2.41
Win Zip 6.3 (SR-)
WinZip Software License 6.3
WinZip 6.3
XDB A. 10.20
Xemacs 20.4
Productivity Tools
Avery Wizard 1.10 MSW97
Business Wire Connect 1.3
Lotus Domino Upgrade Server 4.6
Lotus Notes 4.5
Lotus Notes 4.6
Lotus SmartSuite 97 97
Microsoft Frontpage 97 97
Microsoft Frontpage 98 98
Microsoft Office 97 Standard Edition 97
Microsoft Office 97 Pro Edition 97
Microsoft Project 98 98
Microsoft Image Composer 1.5
Microsoft Outlook 97
Microsoft Internet Explorer 4.0
Microsoft ACCESS Professional Edition 98
Microsoft Internet Explorer 4.0
Netscape Communicator 4.Ox
Netscape Communicator 4.01
Netscape Communicator 4.04
ORG Plus for windows 3.01
Remedy Action Request System 3.2
SeaGate Crystal Reports (Standard) 6.0
</Table>
Schedule 4.2 - Page 4
<Table>
Visio Pro 4.0
Visio Pro 5.0
Visio Pro CD/Doc Set 5.0
Operating Systems
ADSM Upgrade to AIX 3.1 3.1
AIX 4.1.5
AIX 4.2
AIX 4.3
B UX B.10.20
Microsoft Windows NT Server 4.0
Microsoft NT Workstation 4.0
Microsoft Windows NT Client Access License 4.0
Microsoft NT 4.0 Server w/service pk3 4.0
Development Tools
ANSI C B.10.20.02
ANSI C B.10.20.07
C/C++ 5.6
GNU make 3.7.6.1
GNU RCS/CVS 5.7
HP C Compiler 10.20
HP Linker/Assembler 10.30
HP-UX Developer's Kit for Java JDK 1. 1.5
Microsoft Visual Basic 5.0
Microsoft Visual C-- 5.0
Microsoft Visual J++ 1.1
Microsoft Visual Basic 6.0
Microsoft Visual Basic Pro. Edition (SP 2&3) 5.0
Microsoft C++ Pro. Edition 4.2
Microsoft Visual C++ Prol. Edition 5.0
NetExpress 3.0
Object Cobol Developers Suite for UNIX 4.1
Oracle Forns 4.5 4.5.7.1.6
Perl 5.003 07
Picasso 2 2.5f
Power Builder Enterprise 6.0.
Power Designer 6.1.0
Visual Component (First Impression) 5.0
Visual Cafe for Java 2.5
DBMS
Microsoft SQL Server 6.5, SP4
Oracle for windows NT 7.3
Oracle Enterprise Manger 7.3.3.0
SQL Plus 3.3
</Table>
Schedule 4.2 - Page 5
<Table>
Sybase Adaptive Server 11.0
Sybase Administrative Tools 3.0.0.1887
Sybase Adaptive Server 11.5
Sybase Adaptive Server Enterprise 11.5
Sybase Adaptive Server 11.0.3.2 EBF
Sybase 11.9.2
Sybase Open Client 11.1.1
Sybase CT Access Lib 3.0.1
Communication Tools
Reflection X for windows NT 7.0
Symantec PCAnywhere 8.0
UCX 4.2
Graphics Tools
Macro Media Flash 3 3.0
Other Software
Data Trek EDI 3.01
D & B Desktop Solutions for Windows 6.0
DocuShare 2.0
Fidelity Web Station 1.0
OM Software
Block-Forward Secur Back Office 4.3
Block Forward ( TBsI( S Tradle Annfication X3. - 6.7
Dav Ahead Bidding & Scheduling 5.1.16
Hour Ahead Bidding & Scheduling 5.1.15
OM Net OMFX (network gatewav) 2.2.1
Settlement 5.1.7.1
Trade Annlication 5.1.14
Web (DA 4A) 15.5
Block Forward Click 3.01
Part C -- Perot Systems Software
Adjustment Bid Checker 1.0
Block Forward Report Generator 1.0
Block Forward Invoice Run Generator 1.0
Block Forward Clearing Data Retrieval 1.0
Block Forward Ticker 1.0
BuckEye (ISODAB) 2.1
Day Ahead Adjustment Bid Checker 1.0
Day Ahead Pit 0 Bull (ITOS) 1.0
Day Ahead Schedule Difference Checker 1.0
Hour Ahead Schedule Difference Checker 1.0
</Table>
Schedule 4.2 - Page 6
<Table>
Manta Ray 1.0
Over Generation Mitigation 1.0
Real Time Data Collection 1.0
Real Time Reporting System 1.0
Settlement Reporter (PXSR/TO Debit) 1.1
Zonal Price Calculators (DA & HA) 1.1.9
Zonal Price Checker (DA &HA) 1.0
Shared Resource Trading & Scheduling (Shark) 1.0
</Table>
Schedule 4.2 - Page 7
SCHEDULE 4.4
Client Technology
Managed Equipment (Tentative)
<Table>
<Caption>
Who Who
Operating Owns Supports Fallover
Server Hardware System CPUs RAM Disk it It Capabilities Domain Location
Production
ALHDEV171 HP LPr D6131A NTS4 SP4+ 1 64M 4G PX PX none PXPROD Svr room
ALHDEV172 HP LPr D6131A NTS4 SP4+ 1 64M 4G PX PX none PXPROD Svr room
ALHPAP107 Digital Priorls MX6200 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPAP108 Digital Priorls MX6200 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPAP110 Digital Priorls MX6200 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPAP111 DIgital Prioris MX6200 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPAP113 HP Vectra D4a41 NTW4 SP4+ 1 PX PX none PXPROD Svr room
ALHPAP180 HP LXr 8000 NTS4 SP4+ 1 4G mir PX PX ALHPAP18i PXPROD Svr room
ALHPAP181 HP LXr 8000 NTS4 SP4+ 1 4G mir PX PX ALHPAPi80 PXPROD Svr room
ALHPAP193 HP LPr D6131A NTS4 SP4+ 1 64M 4G mir PX PX none PXPROD Svr room
ALHPAPi94 HP LPr D6131A NTS4 SP4+ 1 64M 4G mir PX PX none PXPROD Svr room
ALHPAP195 HP LPr D6131A NTS4 SP4+ 1 64M 4G mir PX PX none PXPROD Svr room
ALHPAP199 HP LPr D6131A NTS4 SP4+ 1 64M 4G mir PX PX none PXPROD Svr room
ALHPAP200 HP'LXr 8000 NTS4 SP4+ 1 4G mir PX PX ALHPAP201 PXPROD Svr room
ALHPAP201 HP LXr 8000 NTS4 SP4+ 1 4G mir PX PX ALHPAP200 PXPROD Svr room
ALHPAP203 HP LXr 8000 NTS4 SP4+ 1 4G mir PX PX ALHPAP204 PXPROD Svr room
ALHPAP204 HP LXr 8000 NTS4.SP4+ 1 4G mir PX PX ALHPAP203 PXPROD Svr room
ALHPAP210 HP LXr 8000 NTS4 SP4+ 1 4G mir PX PX ALHPAP211 PXPROD Svr room
ALHPAP211 HP LXr 8000 NTS4 SP4+ 1 4G mir PX PX ALHPAP21O PXPROD Svr room
ALHPAP7532 HP LPr D6131A NTS4 SP4+ 1 64M 4G PX PX ALHPAP7533 PXPROD Svr room
ALHPAP7533 HP LPr D8131A NTS4 SP4+ 1 64M 4G PX PX ALHPAP7532 PXPROD Svr room
ALHPAP97 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPAP98 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPSEC2 HP LPr D6131A NTS4 SP4+ 1 64M 4G PX PX none PXOA1 Svr room
ALHPWEB10 HP LPr 06131A NTS4 SP4+ 1 64M 4G PX PX none PXPROD Svr room
ALHPWEB11 IBM PC Server 704 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPWEB13 IBM PC Server 704 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPWEB14 IBM PC Server 704 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPWEB17 IBM PC Server 704 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPWEB25 IBM PC Server 704 NTS4 SP4+ 1 PX PX none PXPROD Sw room
BFWDWEB1 HP LPr D6131A NTS4 SP4+ 1 64M 4G PX PX BFWDWEB2 PXPROD Svr room
BFWDWEB2 HP LPr D6131A NTS4 SP4+ 1 64M 4G PX PX BFWDWEB1 PXPROD Svr room
BFWDTWEB HP LPr D6131A NTS4 SP4+ 1 64M 4G PX PX none PXPROD Svr room
CSIAPAPP2A IBM PC Server 704 NTS4 SP4+ 1 128M IBM IBM none PXOA Svr room
CSIAPAPP1A IBM PC Server 704 NTS4 SP4+ 1 128M IBM IBM none PXOA Svr room
CSIAPMAIL1A IBM PC Server 704 NTS4 SP4+ 1 PX PX none PXPROD Svr room
IMSINTRA NTS4 SP4+ 1 PX PX none PXPROD Svr room
</Table>
<Table>
<Caption>
Help HW OS App OR Hot
Server Function Desk Support Support Support Site
Production
ALHDEV171 TestlDevelopment PX HP PX PX
ALHDEV172 TestlDeveloprment PX HP PX PX
ALHPAP107 MDAS fip server #1 PX Compaq PX Folsom
ALHPAP108 MDAS DBserver #1 PX Compaq PX Folsom
ALHPAP110 MDAS ftp server #2, PX Compaq PX Folsom
Psoft Apps
ALHPAP111 MDAS DB server #2 PX Compaq PX Folsom
ALHPAP113 Settlement Ulil Processor PX HP PX Folsom
ALHPAP180 BDC PXPROD, PEP+ PX HP PX PX Folsom
ALHPAP181 BDC PXPROD, Settlement PX HP PX PX Folsom
ALHPAP193 OM Gateway PX HP PX PX Folsom
ALHPAPi94 OM Gateway PX HP PX PX Folsom
ALHPAP195 OM Gateway PX HP PX PX Folsom
ALHPAP199 WLBS Web Server PX HP PX PX
ALHPAP200 BDC PXPROD, Buckeye PX HP PX PX Folsom
ALHPAP201 BDC PXPROD, Peoptesoft PX HP PX PX Folsom
ALHPAP203 BDC PXPROD, SOL7 PX HP PX PX Folsom
ALHPAP204 PDC PXPROD PX HP PX PX Folsom
ALHPAP210 BDCPXPROD, PXMDAS PX HP PX PX Folsom
ALHPAP211 BDC PXPROD, Intranet PX HP PX PX Folsom
ALHPAP7532 OM Gateway PX HP PX PX Folsom
ALHPAP7533 WLBS Web Server PX HP PX PX
ALHPAP97 Buckeye & Book PX PX
ALHPAP98 PeopieSoft Fiie Share PX PX
ALHPSEC2 PDC in DMZ PX PX PX
ALHPWEB10 A-Frame DB Server PX HP PX
ALHPWEB11 Ext PRMS Web Server PX IBM PX Folsom
ALHPWEB13 DayAhead MCP Server PX IBM PX
ALHPWEB14 HourAhead MCP Server PX IBM PX
ALHPWEB17 Settlements Web Server PX IBM PX
ALHPWEB25 Powerbase PX IBM PX
BFWDWEB1 BF Prod Web Server PX HP PX PX
BFWDWEB2 BF Prod Web Server PX HP PX PX
BFWDTWEB BFTestWebServer PX HP PX PX
CSIAPAPP2A PDC PXOA1 IBM IBM IBM IBM Folsom
CSIAPAPP1A BDC PXOAi IBM IBM IBM IBM Folsom
CSIAPMAIL1A CALPX web site IBM IBM PX
IMSINTRA Int PRMS Web Server PX IBM PX Folsom
</Table>
Schedule 4.4 - Page 1
<Table>
<Caption>
Who Who
Operating Owns Supports Fallover
Server Hardware System CPUs RAM Disk it It Capabilities Domain Location
Retired or in non production status?
ALHPAP1 Digital PWS 2001 NTS4 SP4+ 1 64M 4.3G PX PX none PX? Svr room OMN Gateway
ALHPAP2 Digital PWS 2001 NTS4 SP4+ 1 64M 4.3G PX PX none PX? Svr room OMN Gateway
ALHPAP3 Digital PWS 2001 NTS4 SP4+ 1 64M 4.3G PX PX none PX? Svr room OMN Gateway
ALHPAP28 Digital PWS 200i NTS4 SP4+ 1 64M 4.3G PX PX none PX? Svr room OMN Gateway
ALHPAP33 Digital PWS 2001 NTS4 SP4+ 1 64M 4.3G PX PX none PX? Svr room OMN Gateway
ALHPAP27 Digital PWS 2001 NTS4 SP4+ 1 64M 4.3G PX PX none PX? Svr room OMN Gateway
ALHPAP52 Digital PWS 2001 NTS4 SP4+ 1 64M 4.3G PX PX none PX? Svr room OMN Gateway
ALHPAP133 Digital PWS 2001 NTS4 SP4+ 1 64M 4.3G PX PX none PX? Svr room OMN Gateway
ALHPAP134 Digital PWS 2001 NTS4 SP4+ 1 64M 4.3G PX PX none PX? Svr room OMN Gateway
ALHPAP53 Digital PWS 2001 NTS4 SP4+ 1 64M 4.3G PX PX none PX? Svr room OMN Gateway
ALHPAP88 Digital Priori, NTS4 SP4+ 1 none PX7 Svr room PeopleSoft Apps
MX6200
ALHPAP150 NTS4 SP4+ 1 PX PX none PX? Svr room
ALHPAP80 NTS4 SP4+ 1 PX PX none PX? Svr room
ALHPAP137 NTS4 SP4+ 1 PX PX none PX? Svr room
ALHPAP142 NTS4 SP4+ 1 PX PX none PX? Svr room PEP+ Test
ALHPAP138 NTS4 SP4+ 1 PX PX none PX? Svr room
ALHPWEB12 NTS4 SP4+ 1 PX PX none PX? Svr room
ALHPAP80 Digital Priori. NTS4 SP4+ 1 PX PX none PX? Svr room
MX6200
ALHPAP74 NTS4 SP4+ 1 PX PX none PX? Svr room MDAS Test
ALHPAP171 HP LPr D6131A NTS4 SP4+ 1 64M 4G PX PX ALHPAP172 PXDEV Svr room PDC PXDEV
ALHPAP172 HP LPr D6131A NTS4 SP4+ 1 64M 4G PX PX ALHPAP171 PXDEV Svr room BDC PXDEV
ALHPAP109 HP Netserve 6/200 NTS4 SP4+ 1 PX PX none PXPROD Svr room master/master
db sen
</Table>
<Table>
<Caption>
Help HW OS App
Server Function Desk Support Support Support
Retired or in non production status?
ALHPAP1 PX Compaq PX OM
ALHPAP2 PX Compaq PX OM
ALHPAP3 PX Compaq PX OM
ALHPAP28 PX Compaq PX OM
ALHPAP33 PX Compaq PX OM
ALHPAP27 PX Compaq PX OM
ALHPAP52 PX Compaq PX OM
ALHPAP133 PX Compaq PX OM
ALHPAP134 PX Compaq PX OM
ALHPAP53 PX Compaq PX OM
ALHPAP88 PX Compaq PX OM
ALHPAP150 PX PX
ALHPAP80 PX PX
ALHPAP137 PX PX
ALHPAP142 PX PX
ALHPAP138 PX PX
ALHPWEB12 PX PX
ALHPAP80 PX Compaq PX
ALHPAP74 PX PX
ALHPAP171 PX HP PX PX
ALHPAP172 PX HP PX PX
ALHPAP109 PX HP PX
</Table>
Schedule 4.4 - Page 2
CalPX UNIX System Configuration
Alhambra, CA. UNIX Server Inventory (Tentative)
<Table>
Prodnol HP-UX HP9000 3.0 81.7 GB Day Ahead & Hour Ahead
10.20 Model K460 Production
altnode HP-UX HP9000 3.0 12.28 GB Day Ahead & Hour Ahead
10.20 Model K460 Secondary
settle HP-UX HP9000 4.2 22.0 GB Settle Production
10.20 Model K460 Sysbase 11.0.3.3
Alhpap5 HP-UX HP9000 2.7 85.36 GB Settle Secondary
10.20 Model K460
Pepl HP-UX HP9000 2.1 29.08 GB PEP Plus, Sybase 11.9.2
10.20 Model K460
psoft HP-UX HP9000 3.0 25.54 GB PeopleSoft 7.5.2
10.20 Model K460 SyBase 11.9.2
Setestl HP-UX HP9000 3.8 57.32 GB SE Test Server, Sybase
10.20 Model K460 11.0.3
Settest2 HP-UX HP9000 1.9 40.94 GB SE Test Server, Sybase
10.20 Model K460 11.0.3
Alhpbk5l HP-UX HP9000 2.0 213.64 Data Warehouse,
10.20 Model K460 GB Development and test,
Sybase 11.5.1
Alhpap8 HP-UX HP9000 1.5 24.38 GB Admin. Server, PeopleSoft
10.20 Model K260 Production, Sybase 11.0.3
Alhpap34 HP-UX HP9000 512 MB 32.38 GB Admin. Server, PeopleSoft
10.20 Model K260 Test and Development,
Sybase 11.0.3
Alhpap57 HP-UX HP9000 3.0 137.24 Historical Database, Test
10.20 Model GB Psoft and Settlements,
K460 Sybase
EMC 7800 1.5 TB Raid 0,1 mirrored
Jamaica 6 x 4GB
Jamaica 6 x 4GB
</Table>
Schedule 4.4 - Page 3
Folsom, CA. UNIX Server Inventory
<Table>
FOLPAP87 HP-UX HP9000 unknown unknown Sybase, Replication
10.20 K460 DA/HAJSE
FOLPA1O HP-UX HP9000 unknown unknown Settlements
10.20 K260
FOLPA108 HP-UX HP9000 unknown unknown Not used.
10.20 K260
Hostriame HP-UX BP9000 unknown unknown Not used.
unknown 10.20 K260
EMC 7800 unknown
</Table>
Schedule 4.4 - Page 4
SCHEDULE 4.5
Required Improvements
The following is a list of the Required Improvements and Perot Systems' estimate
of the number of Full-Time Equivalent PSC Personnel above the number of PSC
Personnel that will be assigned to perform the Core Services, Application
Development Services and Business Consulting Services (the "Baseline') that will
be necessary to implement these Required Improvements.
1. HP-UX Software Level Upgrade
The HP-UX operating system for each Hewlett-Packard computer listed as
Managed Equipment must be upgraded to the most current release.
This upgrade is required to provide baseline, Year 2000 and 64-bit
architectural support. This 64-bit version of the operating system supports
larger file systems, which increases performance and enhances memory
utilization. This task must also include installation of patches, both Y2K
related and Application driven patches. Perot Systems shall manage HP to
complete this Required Improvement under the current agreement between CaIPX and
HP.
Estimated PSC Personnel Requirements above Baseline: None
2. Enterprise System Management (ESM) Identification/Implementation
An Enterprise System Management product must be identified and implemented.
Perot Systems shall target the evaluation of systems management products and
tools for use by the Computer Operations team to efficiently monitor and manage
the multiple platforms used in the CalPX environment. Once product selection is
completed, an implementation of the targeted environment must be planned and
executed. This includes customization and integration of the Problem Management
and Change Management packages.
Estimated PSC Personnel Requirements above Baseline: 9 FTE-months
3. NT Service Pack
All Managed Equipment running the Microsoft Windows NT operating system must
be upgraded to NT Service Pack 6A.
The current NT environment is at the NT Service Pack 4 plus hot fixes. A
project to implement the new service into each cluster discretely must occur to
resolve known problems with memory leaks and other technical fixes.
Estimated PSC Personnel Requirements above Baseline: None
Schedule 4.5 - Page I
4. Remedy Customization/Implementation/Training
The Remedym software that Perot Systems uses for problem and change
management must be customized to support the CaIPX's specific requirements. In
addition, the escalation process used to support the CalPX's business must be
automated.
This process shall improve the notification and response of technicians when
warning or alerts are issued by Systems.
After the RemedyTm software is customized, it must be implemented in the
CalPX's environment to provide access to all authorized PSC Personnel, including
Transitioned Employees, and all authorized CalPX personnel. Each of the
authorized users must be trained to use this software.
This process shall improve the notification and response of technicians when
warning or alerts are issued by Systems.
Estimated PSC Personnel Requirements above Baseline: None
5. HP Firmware Updates
All Hewlett-Packard servers and system components must be inventoried to
determine its current firmware version and, if necessary, upgraded to the most
current firmware version that is commercially available.
Upgrading to the latest firmware versions may resolve issues such as data
corruption, missing interrupts and lost data chains. In addition, these upgrades
should increase reliability and availability. Perot Systems shall manage HP to
complete this Required Improvement under the current agreement between CalPX and
HP.
Estimated PSC Personnel Requirements above Baseline: None
6. Review Backup and Archive Strategies
CalPX backup and archive strategies must be reviewed and updated, if
necessary.
Perot Systems shall review the CalPX's requirements for application and data
backup and archival. The methods and tools currently being used to meet these
requirements must be reviewed for compliance.
As appropriate, Perot Systems shall specify changes in these requirements,
methods and tools to manage these requirements more effectively across the
CaIPX's Systems. Perot Systems shall review with CalPX the work that must be
done to establish the most appropriate frequency and methodology to meet CalPX's
data recovery requirements.
Schedule 4.5 - Page 2
Estimated PSC Personnel Requirements above Baseline: None
7. Implement Program/Project Management Office
CalPX must implement and use the Program Office/Project Management processes
and procedures to effectively manage programs and projects.
Estimated PSC Personnel Requirements above Baseline: None
8. Implement Change Management Methodology
CalPX must implement the Change Control Procedure for all proposed Changes.
CalPX must also implement the Change Control Board and the IT Steering
Committee.
Estimated PSC Personnel Requirements above Baseline:- None
9. Add CalPX IT Operations to Automated Call Distributor (ACD)
The Automated Call Distributor (ACD) system used by Perot Systems must be
used to manage the help desk.
This system must be implemented to provide the capability to efficiently
distribute calls throughout the enterprise and report the call volumes, service
time, queue time, and average talk time. These metrics are critical when
forecasting future operational service levels and requirements. As part of
implementing this Improvement, Perot Systems shall manage CalPX vendor to
implement the required improvement.
Estimated PSC Personnel Requirements above Baseline: None
10. Plan and Implement Consolidated Test Environment
The physical architecture that shall support the testing environment and the
required software and tools necessary to manage production promotion from one
environment to the next (i.e. development to test, test to model office and
model office to production) must be planned, designed and implemented. Also
included in this Required Improvement is planning and implementation of
configuration management/release procedures and the required tools. Test
procedures that describe how applications are to be tested and promoted through
the testing environments, server code, database objects, CalPX based
applications and the tracking of application source code must also be developed
and implemented.
Estimated PSC Personnel Requirements above Baseline: 16 FTE-months.
Schedule 4.5 - Page 3
11. Commercial Disaster Recovery Hot Site
Procedures and systems to be followed to prevent avoidable System failures
and to minimize the adverse effects of unavoidable System failures and Disasters
must be planned, designed and implemented. Disaster Recovery Plans must be
established and implemented via a Commercial Disaster Recovery Vendor/Site or
otherwise. Test Plans must be established, and tests periodically completed.
Estimated PSC Personnel Requirements above Baseline: 12 FTE-months.
12. Sybase SQL Server Software Level Upgrade - (before Titan goes into
production)
The Sybase SQL Server software installed on each of the servers listed in
Schedule 4.1 must be upgraded to the most current version.
This upgrade is required to ensure continued vendor product support, improve
performance through enhanced concurrency and tuning options, and simplify
administration by standardizing on a single product release.
Estimated PSC Personnel Requirements above Baseline: 14 FTE-months.
13. IT Security
Develop and implement an IT security plan which shall address the following
issues:
* End user security awareness
* Physical security issues
* UserID security issues
* Password security issues
* Policies - Expanding the existing policies to cover specific standards for
systems and "User Guides" for use in the End user security awareness program.
* Auditing - Recommendations for an audit log structure
* Enterprise Security Software - Information of currently available 3rd
party security management software.
* Topology - A mapping of systems at CalPX.
* Role Based Access - Data received in other areas can be used for a high
level (not detailed) role based access matrix.
Estimated PSC Personnel Requirements above Baseline: 30 FTE-months.
Schedule 4.5 - Page 4
SCHEDULE 5.1
Service Charges
A. Fees for Base Services.
The rates set forth below shall be adjusted annually in accordance with Section
5.6 of the Agreement.
Service Fee for Core Services:
Perot Systems shall calculate a monthly services fee ("Calculated Services Fee")
by multiplying (i) the actual number of person-hours of Core Services performed
by PSC Personnel during such month, divided by 139 (to determine the number of
Full-Time Equivalent PSC Personnel), by (ii) the Core Services Rate.
B. Baseline Budget for Core Services
Months one to 12 inclusive: $ 733,100 / month
Months 13 to 36 inclusive: $ 749,250 / month
The Core Services Rate for PSC Personnel is $ 16,650.00 per month for each
Full-Time Equivalent.
C. Fees for IT Procurement Services
As consideration for the IT Procurement Services, CalPX shall pay Perot Systems
an administrative fee equal to 6.0% of the actual third-party cost, including
the cost of freight, insurance, taxes or other similar charges, of purchasing,
leasing or licensing any equipment, software or services.
D. Fees for Applications Development Services and Business Consulting
Services
As consideration for the Applications Development Services, CalPX shall pay
Perot Systems a monthly services fee ("Calculated Services Fee") equal to the
sum of (A) the minimum monthly fee set forth below for the core number of
Full-Time Equivalent PSC Personnel available to perform Applications Development
Services, and (B) the amount, if positive, determined on a time and materials
basis by multiplying (i) the actual number of person-hours of Applications
Development performed by PSC Personnel, divided by 139 (to determine the number
of Full-Time Equivalent PSC Personnel), less the core number of the Full-Time
Equivalent PSC Personnel made available by Perot Systems to provide Applications
Development Services (to determine the number of Full-Time Equivalent PSC
Personnel above the core Resources available to perform Applications Development
Services), by (ii) the applicable rate from the table set forth below.
Schedule 5.1 - Page 1
As consideration for the Business Consulting Services, CalPX shall pay Perot
Systems a monthly services fee ("Calculated Services Fee") equal to the sum of
(A) the minimum monthly fee set forth below for the core number of Full-Time
Equivalent PSC Personnel available to perform Business Consulting Services, and
(B) the amount, if positive, determined on a time and materials basis by
multiplying (i) the actual number of person-hours of Business Consulting
performed by PSC Personnel, divided by 139 (to determine the number of Full-Time
Equivalent PSC Personnel), less the core number of the Full-Time Equivalent PSC
Personnel made available by Perot Systems to provide Business Consulting
Services (to determine the number of Full-Time Equivalent PSC Personnel above
the core Resources available to perform Business Consulting Services), by (ii)
the applicable rate from the table set forth below.
The core number of Full-Time Equivalent PSC Personnel that Perot Systems shall
make available to perform (i) Applications Development Services shall be (a) 11
Full-Time Equivalent PSC Personnel during the first year of the Term, (b) seven
Full-Time Equivalent PSC Personnel during the first eight months of the second
and third years of the Term, and (c) eight Full-Time Equivalent PSC Personnel
during the ninth through twelfth months of the second and third years of the
Term, and (ii) Business Consulting Services shall be two and one half (2.5)
Full-Time Equivalent PSC Personnel for the first 36 months of the Term. If CalPX
requires or uses more services, the rates shall be as set forth based on the
rate schedule below.
E. Rates for Applications Development Services
Minimum Monthly Fee for core Resources:
Month one to 12 inclusive: $ 250,000 / month
Month 13 to 20 inclusive: $ 159,090 / month
Month 21 to 24 inclusive: $ 181,830 / month
Month 25 to 32 inclusive: $ 159,090 / month
Month 33 to 36 inclusive: $ 181,830 / month
Monthly Rate for additional Full-Time Equivalent PSC Personnel to Perform
Applications Development Services
Additional Resources committed for minimum of 12 Months: $ 22,730 / month
Additional Resources committed for less than 12 Months: $ 27,040 / month
F. Rates for Business Consulting Services
Minimum Monthly Fee for core Resources:
Month one to 36 inclusive: $ 59,660 / month
Monthly Rate for additional Full-Time Equivalent PSC Personnel to Perform
Business Consulting Services (except for any Full-Time Equivalent Personnel who
have the positions listed in Schedule 5.2).
Schedule 5.1 - Page 2
Additional Resources committed for minimum of 12 Months: $ 29,200 / month
Additional Resources committed for less than 12 Months: $ 32,050 / month
G. Changes in Baseline Budget
All changes, except as set forth in the Agreement, in Baseline Budget shall be
mutually agreed to by both parties in accordance with the Change Control
Procedure.
The Baseline Budget for the Core Services has been agreed to by Perot Systems
based on a number of key assumptions, including those listed below. If any of
these key assumptions are incorrect, CalPX and Perot Systems shall negotiate an
appropriate adjustment to the Baseline Budget for the Core Services as soon as
practical after determining that the assumptions are incorrect.
* CalPX shall introduce into production the Titan Application (CalPX
settlements calculation application) on or before May 1, 2000. CalPX
shall not require support for parallel operation of the Titan Application
and its existing suite of settlements applications for more than 2
months. CaIPX shall retire the PEP+ and POP applications on or before
July 1, 2000.
Schedule 5.1 - Page 3
SCHEDULE 5.2
Perot Systems Standard Commercial Rates
Perot Systems standard commercial rates as of the Effective Date are set forth
below.
<Table>
<Caption>
Consulting Hourly Daily Monthly
Senior Advisor N/A $ 7,000.00 $152,000.00
Principal N/A $ 5,000.00 $108,500.00
Senior Engagement Manager N/A $ 4,000.00 $ 87,000.00
Senior Consultant N/A $ 3,000.00 $ 65,000.00
</Table>
All rates are for services only. Travel and other out-of-pocket expenses are not
included.
Schedule 5.2 - Page I
SCHEDULE 5.4
CaIPX Expense Reimbursement Policy
It is the policy of the California Power Exchange Corporation to reimburse
its employees for necessary and reasonable travel and other actual expenses
incurred in the performance of their duties or assignments. Employees are
expected to exercise reasonable and prudent judgement in incurring such
expenses. This policy outlines broadly the types of such expenses, which are
acceptable for reimbursement and the documentation and approval requirements.
The department officers and directors are responsible for managing and approving
expense reimbursements. In addition, they will determine which expenses are
reasonable or unreasonable given the situation and, in conformance with this
policy, will approve all expense reports. Unreasonable expenses will not be
reimbursed. The Chief Financial Officer and Controller may challenge expense
requests approved by officers and directors. The Chief Financial Officer and
Controller will have final approval authority regarding the reimbursement of the
expense. It is expected that employees will submit these expenses for
reimbursement on a timely basis. Reimbursement should be requested when the
amount is in excess of $100.00 and not more than 45 days after the expenses are
incurred. Expense requests must be properly documented as to the nature and
business purpose of the expenses.
PROCEDURES
DOCUMENTATION
All elements of the expense report must be completed with original invoices
or receipts attached. The only exception to the original invoice requirement is
for airline tickets booked through the Internet (Southwest Airlines only), where
a print out of the download from the Internet will be accepted as an original
invoice. This print out must include the name of the traveler, the dates of
travel, the flight numbers, the departure and destination cities, and the amount
paid. Documentation is required for each expense item in excess of $35.00. For
expenses in excess of $35.00 that are not supported by a receipt, a memo to the
Chief Financial Officer and Controller should be attached explaining why
required procedures were not followed. Reimbursement of these expenses will be
at discretion of the Chief Financial Officer and Controller. Each individual
expense must iclude the business purpose of the item. An appropriate business
purpose will not be assumed before final approval. The business purpose for the
expenses can be grouped and one explanation provided for all expenses on the
report. The employee must sign the expense report acknowledging the validity of
the charges and supporting the business reason for the request.
Schedule 5.4 - Page I
APPROVALS
Employees may be required to complete a Travel Authorization form prior to
leaving on a business trip. Use of this document is subject to the discretion of
department senior management. Employees are required to adhere to Travel
Authorization procedures established at the department level. No one is allowed
to approve his or her own expenses and must have their reimbursement request
approved by their supervisor. Expense reports may not be approved by a peer of
the employee's supervisor. The Audit Committee of the Governing Board will
direct the Internal Auditor to review the CEO's expense reports.
TYPES OF EXPENSES
Transportation
Air Travel
Employees are expected to use commercial air travel. Use of charter aircraft
or personal aircraft is not allowed to conduct California Power Exchange
business. Airfare may be booked through a travel agent the Internet, or directly
with the Airline. All airfare must be charged to either the company American
Express or Diners Club card. Employees are responsible for paying these charges
to the credit card company. Employees should always strive to travel at the
lowest available fare. If the lowest available fare is not utilized, the
employee must indicate the reason on the expense report. If coach fare is not
available, an explanation must be documented on the expense report form.
Employees may fly business class for scheduled flights more than three hours in
duration. For scheduled flights less than three hours in duration, employees are
expected to book coach level fares. The company will not reimburse employees for
flying first class. Employees are not allowed to purchase upgradable coach fares
so that first class upgrade certificates can be used. In addition, the CalPX
will not reimburse employees for the cost of first class upgrade certificates.
If an employee chooses to upgrade to first class travel, only the lowest
available coach fare will be reimbursed. Travel should not be scheduled to earn
frequent flyer awards at the detriment of the California Power Exchange.
Frequent flyer awards are the property of the employees. Expenses will only be
reimbursed after travel is completed. Receipts showing the total price must be
included for reimbursement.
Car Rental
Car rental should be limited to use when alternative transportation such as
taxi or shuttles is not available or not economical. Receipts showing the total
price must be included for reimbursement. Car rental reservations may be made
either through a travel agent, the Internet, or directly with the rental car
company. Compact or intermediate cars should be rented based on the
Schedule 5.4 - Page 2
number of employees traveling. Employees should make good judgements as to the
gasoline options offered with the rental car.
The California Power Exchange carries liability and vehicle damage insurance
that protects the CalPX when employees rent vehicles while on CalPX business.
Employees must indicate on the rental form the California Power Exchange's name
to put this insurance into effect. The CaIPX will not reimburse employees for
insurance from rental agencies, or credit cards offers of other agencies.
Employees should decline insurance coverage offered by rental agencies unless
they choose to purchase the insurance without reimbursement. In the event a
California Power Exchange employee has a claim for damage to a vehicle while on
CalPX business, the employee must contact the Chief Financial Officer and
Controller immediately so that claims may be processed with the CaIPX carrier.
If an employee rents a vehicle while on California Power Exchange business, and
extends its time at either the beginning or end of the trip for personal
reasons, the CalPX insurance only covers the time related to CalPX business.
Employees are responsible for the cost of vehicle insurance while using it for
personal use.
Business use of Personal Vehicles
When it is necessary for employees to use their personal vehicle for
business purposes, reimbursement of mileage will be made in lieu of other
vehicle charges such as gas and oil, insurance, financing costs or other
wear and tear. The currently approved IRS reimbursement rate will be
used. No reimbursement will be made for employees' normal commuting to
their assigned work location. Requests for reimbursement of business
mileage should reflect a reduction of normal commuting miles.
Parking, Tolls and Other Costs
Parking, taxi, shuttle, tolls, tips and other expenses in excess of
$35.00 must be supported by a receipt. Cost of parking fines or other
driving citations will not be reimbursed.
Lodging
Aggregations of multiple days stay
Employees may enter multiple days stay as one line on the report,
provided the supporting documentation clearly shows the daily rate and
taxes applicable. The original receipt from the hotel or motel must be
attached. Meals, tips, telephone, parking or other charges on the hotel
or motel bill must be shown in the proper area of the expense report.
Schedule 5.4 - Page 3
Movies, snacks, and mini-bar charges are not reimbursable. Reasonable
tips to hotel personnel should be shown as other incidental expense.
Meals
Employee Meals
Employees' expenses for meals are expected to be reasonable given the
location. Expenses in excess of $35.00 per meal must have receipts showing
the name of the establishment and the total amount of the meal including
tip. Tips should be included in determining the $35.00 amount and be shown
as part of the meal costs.
Business Meals
These expenses must constitute an ordinary and necessary business expense.
Expenditures should not be lavish or extravagant. Employees must document
the business purpose of the meal, the name of the restaurant, and include
the names, titles and the name of the company for all in attendance.
Entertainment
When it is necessary to entertain customers or other business associates
of the California Power Exchange in connections with the conduct of
business, documentation as to the nature of the entertainment,
participants (by name, title and company name), location, and business
purpose is required.
Non-Reimbursable Expenses
In general, expenses of a personal nature, that are unreasonable or
excessive, and that not specifically related to the conduct of the
business activities of the California Power Exchange are not
reimbursable. Examples of specifically excluded costs are spousal travel
expenses, excessive alcoholic beverages, flowers, other gifts for
employees, credit card fees or interest charges, memberships in travel
clubs or other airport services. Employee meals, other than for out of
town travel, are not reimbursable This exclusion includes employee
working meals which will not be reimbursed. When employees are having a
meal, the most senior employee, officer or director should report the
expense so that no one approving expenses for reimbursement would be
approving a meal in which they participated.
Schedule 5.4 - Page 4
SCHEDULE 7.3
Supplementary Procedures for California Power Exchange Disputes
1. Applicability
(a) The Supplementary Procedures for California Power Exchange Disputes
(hereinafter, "the Procedures") shall apply to all cases administered by the
American Arbitration Association (hereinafter, "AAA") under its Commercial
Mediation Rules and its Commercial Arbitration Rules in which a claim is made
arising out of the Power Exchange Operating Agreement and Tariff
(hereinafter, "the Tariff') filed with the Federal Energy Regulatory
Commission (hereinafter, "FERC"). The Procedures are designed to complement
the Commercial Mediation Rules and the Commercial Arbitration Rules; to the
extent that there is any variance between those rules and the Procedures, the
Procedures shall control.
(b) The parties to any arbitration proceeding that is to be subject to the
Procedures may, by written consent of all parties, agree to eliminate, modify
or alter any of the Procedures, and, in such case, the Procedures as so
modified or altered shall apply to that particular case.
(c) Except as limited below or otherwise as limited by law (including the
rights of any party to file a complaint with FERC under the relevant
provisions of the Federal Power Act (hereinafter, "FPA"), the Procedures
shall apply to all disputes between parties which arise under the Tariff. The
Procedures shall not apply:
(1) where the decision of the California Power Exchange
(hereinafter, "PX") is stated in the provisions of the Tariff to be final;
(2) where the PX is bound, as a Scheduling Coordinator under the
California Independent System Operator Agreement and Tariff, by a final
determination of the California Independent System Operator ("ISO"), in which
case the final determination of the ISO shall be binding on all PX
Participants;
(3) to disputes arising under existing contracts which pre-date the
creation of the PX, except as the disputing parties may otherwise agree; or
(4) to disputes as to whether rates and charges set forth in the PX
Tariff are just and reasonable under the FPA.
(d) If a party to a dispute is a government agency, application of the
dispute resolution process procedures shall be subject to any limitations
imposed on the agency by law, including, but not limited to, the authority of
the agency to effect a
Schedule 7.3 - Page I
remedy. If the governmental agency is a federal entity, the dispute
resolution process shall not apply to disputes involving issues arising
under the United States Constitution.
(e) Where the court having jurisdiction so determines, use of the dispute
resolution process shall not be a condition precedent to court action for
injunctive relief nor shall the provision of the California Code of Civil
Procedure Section 1281 et se. apply to such court actions.
2. Negotiation
The PX and PX Participants who may be parties to a dispute shall make
good-faith efforts to negotiate and resolve any dispute between them arising
under the PX Tariff prior to invoking mediation or arbitration. Each party
shall designate in writing an individual with authority to negotiate the
matter in dispute in such negotiations.
3. Statement of Claim
(a) In the event a dispute is not resolved through good-faith
negotiations, any one of the parties may submit in writing a statement of
claim to the AAA, to each other disputing party that was involved in good
faith negotiations under Section 2 and to the PX. Such submission shall
constitute commencement of the dispute resolution process.
(b) The statement of claim shall set forth in reasonable detail (i) each
claim, (ii) the relief sought, including the proposed award, if applicable,
(iii) a summary of the grounds for such relief and the basis for each claim,
(iv) the parties to the dispute, (v) the individuals having knowledge of each
claim and (vi) a summary of the claim suitable for publication by the PX.
(c) The other disputing parties identified in the statement of claim
prepared pursuant to Section 3(a) shall similarly submit in writing to the
AAA their respective statement of claim (which may be a response) and a
summary of their claim (or response) suitable for publication by the PX
within fourteen (14) days of the submission of the initial statement of claim
or such longer time period as the AAA may permit following application by the
responding party.
(d) Any responding party wishing to submit a counterclaim must do so in
writing and include such counterclaim in their responsive statement of claim.
(e) The PX in the PX newsletter, electronic bulletin board, or any other
method adopted by the PX ADR Committee, shall, within fourteen (14) days of
receipt by the PX of the statement(s) of claim, publish a summary of any such
statements. No Market Participant shall be considered as having received
notice of a
Schedule 7.3 - Page 2
claim decided or relief granted by a decision made under the Procedures
unless the summary of the statement(s) of claim published by the PX includes
such claim or relief.
4. Mediation
After submission of the statement(s) of claim, the parties to a dispute
may request mediation if at least 75% of them so agree, or in disputes involving
only three parties, if at least two of the parties so agree. A submission to
mediation form signed by the requisite number of agreeing parties must be filed
with the AAA. Intervention shall not be allowed during the mediation stage.
5. Selection of the Mediator
(a) Upon receipt of a signed submission form and payment of the filing
fee by the parties, the AAA shall distribute to the parties by facsimile or
other electronic means a list containing the names of at least seven (7)
prospective mediators with mediation experience, or with technical or
business experience in the electric power industry, or both, as AAA shall
deem appropriate to the dispute.
(b) The parties shall either:
(i) agree upon a mediator from the list provided, or from any
alternative source provided that the prospective mediators meet the
requisite qualifications or
(ii) alternate in striking names from the list provided by AAA
with the last name remaining on the list being assigned the mediator (the
first party to strike a name shall be determined by lottery) or
(iii) request that AAA select a mediator with the appropriate
qualifications.
(c) The parties shall have seven (7) days from the date of receipt of the
AAA's list of prospective mediators to complete the process of selecting and
appointing a mediator.
(d) The mediator shall comply with the disclosures required by Section 11
of the Procedures.
6. Mediation Process
(a) The mediator and representatives of the disputing parties with
authority to settle the dispute shall, within fourteen (14) days after the
mediator's date of appointment, schedule a date within sixty (60) days
thereafter on which to mediate the dispute.
Schedule 7.3 - Page 3
(b) Matters discussed during the mediation shall be confidential and
shall not be referred to in any subsequent proceeding.
(c) With the consent of all disputing parties, a resolution may include
referring the dispute directly to a technical body (such as a Western
Systems Coordinating Council technical advisory panel) for resolution or an
advisory opinion, or referring the dispute directly to FERC. Within thirty
(30) days, the PX shall publish notice of the referral of the dispute in the
PX newsletter or electronic bulletin board, or any other method adopted by
the PX ADR Committee.
7. Termination of Mediation
If (a) thirty (30) days have passed since the filing of the statement of
the claim and the disputing parties have not succeeded in negotiating a
resolution of the dispute, or (b) thirty (30) days have passed since the
parties' first meeting with the mediator, whichever is later, such parties
shall be deemed to be at an impasse and any disputing party may then
commence the arbitration process, unless all of the parties by mutual
agreement decide to extend the time for mediation.
8. Demand for Arbitration
A party seeking arbitration shall provide notice of its demand for
arbitration to the other disputing parties identified in the statement(s) of
claim, the AAA and the PX. The PX shall publish notice of such demand in the
PX newsletter or electronic bulletin board, or any other method adopted by
the PX ADR Committee within fourteen (14) days.
9. Intervention by Market Participants or Other Third Parties
Upon receipt of the notice of a demand for arbitration, the AAA shall
acknowledge receipt of the matter to the parties named in the notice. The AAA
shall allow a period of thirty (30) days following the date of publication of
the notice by the PX for third parties whose interests may be affected by the
outcome of the dispute to file a written petition to appear and testify at
arbitration hearings. If no petitions are received from intervening third
parties within said thirty (30) day period, the case will move forward in
accordance with Section 0 of the Procedures. Petitions to intervene shall be
in writing and shall set forth the grounds of the proposed intervention, the
position and interest of the petitioner in the proceeding, and whether
petitioner's position is in support of or opposition to the relief sought in
the notice. Petitioners for intervention also shall pay the appropriate
filing fee if the intervention is challenged.
Upon receipt of a petition to intervene from any third party, the AAA
will invite the comments of the original parties set forth on the notice. If
no objection is raised within fourteen (14) days to the petitions of the
intervening third parties, the
Schedule 7.3 - Page 4
petitioners shall be allowed to participate as requested and the case will
move forward in accordance with Section 10 of the Procedures.
If any timely objection is received to any petition for intervention, the
AAA will appoint one neutral intervention arbitrator, without the submission
of lists, to consider the petitions and objections and to make a binding
determination regarding the participation of the party or parties requesting
to intervene. The intervention arbitrator will be subject to the disclosures
required by Section 11 of the Procedures.
Upon confirmation of the appointment of the intervention arbitrator, the
AAA will deliver to him or her the relevant petitions and objections thereto,
and the intervention arbitrator will render a written decision within
fourteen (14) days of receipt of those documents, without oral hearings. The
arbitration shall, upon good cause shown, grant the petition(s) for
intervention provided that the issues in the arbitration will not be unduly
broadened or the arbitration unduly extended. The intervenors may only
participate to the extent authorized by the intervention arbitrator. The case
will then move forward in accordance with Section 10 of the Procedures. The
intervenor(s) shall file a statement of claim, pay the appropriate filing fee
and share in the costs associated with the arbitration in an amount to be
determined by the arbitrator(s) appointed to hear the case.
10. Selection of the Arbitrator(s)
Disputes Under $1,000,000 Where the total amount of the claims and
counterclaims in controversy is less than $1,000,000 (exclusive of legal
costs and interest), the disputing parties shall select within fourteen (14)
days an arbitrator from a list containing the names of at least ten (10)
individuals with arbitration experience, or with technical or business
experience in the electric power industry, or both. The AAA shall supply the
list following expiration of the intervention period, submission of the
formal demand for arbitration and payment of any appropriate filing fees. If
the parties cannot agree upon an arbitrator within the stated time, the
parties shall take turns striking names from the list of proposed
arbitrators. The first party to strike a name shall be determined by lottery.
The last name remaining on the list shall be designated the arbitrator.
Disputes of $1,000,000 or More Where the total amount of claims and
counterclaims in controversy is $1,000,000 or more (exclusive of interest and
legal costs), the disputing parties may (a) agree on any person to serve as a
single arbitrator, or (b) shall endeavor in good faith to agree within
fourteen (14) days on a single arbitrator from a list of ten (10) individuals
with arbitration experience, or with technical or business experience in the
electric power industry, or both. The AAA shall supply the list following
expiration of the intervention period, submission of the demand for
arbitration and payment of any appropriate filing fees. If the parties are
unable to agree on a single arbitrator within the stated time, the party or
parties
Schedule 7.3 - Page 5
demanding arbitration shall designate one arbitrator and the party or
parties responding to the demand for arbitration shall designate one
arbitrator, in both cases from the AAA's list of arbitrators no later than
the tenth (Oth) day after the expiration of the stated time (the
intervention arbitrator shall determine the position of intervenors for the
purposes of arbitrator selection). The two arbitrators so chosen shall
choose a third arbitrator from the AAA's list of arbitrators.
11. Disclosures Required of Mediators and Arbitrators
The designated mediator or arbitrator(s) shall be required to disclose to
the parties any circumstances which might preclude them from acting in an
objective and impartial manner. Each mediator or arbitrator shall
disclose:
(a) any direct financial or personal interest in the outcome of the
mediation or the arbitration;
(b) any information required to be disclosed by the California Code of
Civil Procedure Section 1281.9; and,
(c) any existing or past financial, business, professional or personal
interests that are likely to affect impartiality or might
reasonably create an appearance of partiality or bias. Designated
mediators or arbitrators shall disclose any relationships that
they personally have with any party or its counsel, or with any
individual whom they have been told will be a witness. They should
also disclose any such relationship involving members of their
families or their current employers, partners, or business
associates. Designated mediators or arbitrators shall make a
reasonable effort to inform themselves of any interests or
relationships described above. The obligation to disclose
interests, relationships, or circumstances that might preclude a
mediator or an arbitrator from acting in an objective and
impartial manner is a continuing duty that requires mediators and
arbitrators to disclose, at any stage of the mediation or the
arbitration, any such interests, relationships, or circumstances
that arise, or are recalled or discovered. If, as a result of the
continuing disclosure duty, a mediator or an arbitrator makes a
disclosure which is likely to affect his or her impartiality, or
might reasonably create an appearance of partiality or bias or if
a party independently discovers the existence of such
circumstances, a party wishing to object to the continuing use of
a mediator or an arbitrator must provide written notice of the
objection to the other parties within ten (10) days of receipt of
the mediator's or arbitrator's disclosure or the date of a party's
discovery of the circumstances giving rise to that party's
objection. Failure to provide such notice shall be deemed to be a
waiver of such objection. If a party timely provides a notice of
objection to the continuing use of the mediator or the arbitrator,
the parties shall
Schedule 7.3 - Page 6
attempt to agree whether the mediator or the arbitrator should be
dismissed and replaced in the manner described in Section 5 or 6
of the Procedures. If, within ten (1O) days of a party's
objection notice the parties have not agreed on how to proceed,
the matter shall be referred to the AAA for resolution. With
respect to intervention proceedings, the term "party" as used in
this Section 11 shall include only the petitioner(s) in
intervention and any challengers.
12. Modification of Arbitration Procedures
In determining whether to modify the standard procedures for use in the
pending matter, the arbitrator(s) shall consider (a) the complexity of the
dispute, (b) the extent to which facts are disputed, (c) the extent to
which the credibility of witnesses is relevant to a resolution, (d) the
amount in controversy, and (e) the opinions of, and any representations
made by, the parties. Alternatively, the parties may, by written
agreement, modify the standard procedures. In the event of a disagreement
between the arbitrator(s) and the written agreement of the parties
regarding arbitration procedures to be utilized, the parties' written
agreement shall prevail.
13. Remedies
(a) "Baseball" Arbitration If all of the parties agree to conduct the
arbitration "baseball" style, each party shall submit to the
arbitrator(s) and exchange with each other their last best offers in
the form of the award they believe the arbitrator(s) should make,
not less than seven (7) days in advance of the date fixed for the
hearing, or such other date as the arbitrator(s) may decide. If a
party fails to submit its last best offer in accordance with this
Section, that party shall be deemed to have accepted the offer
proposed by the other party. The arbitrator(s) shall be limited to
awarding only one of the proposed offers, and may not determine an
alternative or compromise remedy.
(b) Arbitrator's Discretion Unless all of the parties agree to conduct
the arbitration "baseball" style, the arbitrators shall have the
discretion to grant the relief sought by a party, or determine such
other remedy as is appropriate. Unless otherwise expressly limited
herein, the arbitrators shall have the authority to award any remedy
or relief available from FERC, or any court of competent
jurisdiction. Where any PX Document allows the parties to reach an
agreement on a matter at some future time and provides that defaults
or disputes shall be referred to the PX ADR Procedures, the
arbitrator(s) shall make a decision on the matter considering what
is fair and reasonable in light of the circumstances.
Schedule 7.3 - Page 7
14. Summary Disposition
The arbitrator(s) shall dispose in a summary manner a statement of claim,
response to a statement of claim, counterclaim, demand for arbitration or
a response to a demand for arbitration that in the reasoned opinion of the
arbitrator(s) does not have a good faith basis in either law or fact. If
the arbitrator(s) make a determination that there is no good faith basis
in either law or fact, the arbitrator(s) shall have discretion to award
the costs of the time, expenses, and other charges of the arbitrator(s) to
the prevailing party. A determination made under this Section (a) may be
made any time after the review and consideration by the arbitrator(s) of
the parties' briefs, which may be before a hearing is held on the matter
and (b) is subject to appeal under the Tariff.
15. Discovery Procedures
Adequate provision for the discovery of relevant facts, including the
taking of testimony under oath, production of relevant documents and other
things, the presentation of evidence, the taking of samples, conducting of
tests, and inspection of land and tangible items shall be granted by the
arbitrator(s). When deciding the nature and extent of such discovery, the
arbitrator(s) shall take into account (a) the complexity of the dispute,
(b) the extent to which facts are disputed, (c) the extent to which the
credibility of witnesses is relevant to a resolution, and (d) the amount
in controversy. Discovery disputes shall be resolved by the arbitrator(s)
by telephonic means or other means determined by the arbitrator(s).
Schedule 7.3 - Page 8
16. Evidentiary Hearing
An evidentiary hearing with provision for the examination and
cross-examination of witnesses shall be conducted unless all parties
consent in writing to the resolution of the matter on the basis of the
written record. The forms and methods for taking evidence shall be
determined by the arbitrator(s) and may be modified pursuant to Section 12
of the Procedures. The arbitrator(s) may require such written or other
submissions from the parties as deemed appropriate by the arbitrator(s),
including submission of direct and rebuttal testimony of witnesses in
written form. The arbitrator(s) may exclude any evidence that is
irrelevant, immaterial, unduly repetitious, unduly prejudicial or
privileged. The arbitrator(s) shall compile a complete evidentiary record
of the arbitration hearing (that may include a summary of testimony
presented and the briefs, affidavits and exhibits submitted), which shall
be available to the parties upon request on completion of the arbitration.
17. Confidentiality
Subject to the other provisions of the Procedures, any party may claim
that information contained in a document otherwise subject to discovery is
"confidential" if such information would be so characterized under the
Federal Rules of Evidence. The party making such claim shall provide to
the arbitrator(s) in writing the basis for the assertion. If the claim of
confidentiality is confirmed by the arbitrator(s), they shall establish
requirements for the protection of such documents or other information
designated as "confidential" as may be reasonable and necessary to protect
the confidentiality and commercial value of such information. Any party
disclosing information in violation of these provisions or requirements
established by the arbitrator(s), unless such disclosure is required by
federal or state law or by a court order, shall thereby (a) waive any
right to introduce or otherwise use such information in any judicial,
regulatory, or other legal or dispute resolution proceeding, including the
proceeding in which the information was obtained and (b) be subject to
monetary sanctions by the arbitrator(s) and injunctive relief in a court
of competent jurisdiction.
18. Timetable
Promptly after appointment, the arbitrator(s) shall set a date for the
issuance of the arbitration decision, which shall be within six (6) months
(or such earlier date as the parties and the arbitrator(s) may agree) from
the date of their appointment, with other dates, including the dates for
an evidentiary hearing or other final submissions of evidence, set in
light of this date. The date for the evidentiary hearing or other final
submission of evidence may be extended by the reasonable discretion of the
arbitrator(s). The arbitrator(s) shall have the power to impose sanctions,
including dismissal of the proceeding, for dilatory tactics or undue delay
in completing the arbitration proceedings.
Schedule 7.3 - Page 9
19. Decision
(a) Except as provided below with respect to the "baseball" style
arbitration, the arbitrator(s) shall issue a written decision (and a
summary suitable for publication by the PX) granting the relief
requested by one of the parties, or such other remedy as is
appropriate, if any, and shall include findings of fact and law. The
arbitrator'(s) decision shall be based on the evidence in the record
and the terms of PX Documents, as applicable, and shall consider
(and not violate) applicable substantive United States federal law,
including the FPA, and any applicable FERC regulations and decisions
or applicable substantive state law. Additionally, the arbitrator(s)
may consider relevant decisions in previous arbitration proceedings.
A summary of the disputed matter and the decision of the
arbitrator(s) shall be published in the PX newsletter or electronic
bulletin board, or any other method adopted by the PX ADR Committee,
and maintained by the PX.
(b) In an arbitration conducted "baseball" style, the arbitrator(s)
shall issue a written decision adopting one of the awards proposed
by the parties, and shall include findings of fact and law. The
decision of the arbitrator(s) shall be based upon the evidence in
the record and the terms of PX Documents, as applicable, and shall
consider (and not violate) applicable substantive United States
federal law, including the FPA, and any applicable FERC regulations
and decisions or applicable substantive state law. If the
arbitrator(s) conclude that no proposed award is consistent with the
factors enumerated in the evidence in the record and the terms of PX
Documents, as applicable, or with the applicable substantive United
States federal law, including the FPA, and any applicable FERC
regulations and decisions or with the applicable substantive state
law, or address all of the issues in dispute, the arbitrator(s)
shall specify how each proposed award is deficient and direct that
the parties submit new proposed awards that cure the identified
deficiencies. A summary of the disputed matter and the decision of
the arbitrator(s) shall be published within thirty (30) days in the
PX newsletter or electronic bulletin board, or any other method
adopted by the PX ADR Committee. An award shall not be deemed to be
precedential.
(c) Where a three-person panel of arbitrators is appointed pursuant to
Section 10 of the Procedures, at least two of the arbitrators must
agree on the decision.
Schedule 7.3 - Page 10
20. Compliance
Unless the decision of the arbitrator(s) is appealed to FERC or a court of
competent jurisdiction, the disputing parties shall, upon receipt of the
decision, immediately take whatever action is required to comply with the
award to the extent the award does not require regulatory action. An award
that is not appealed shall be deemed to have the same force and effect as
an order entered by the FERC or any court of competent jurisdiction.
21. Enforcement
Following the expiration of the time for appeal of an award, any party may
apply to FERC or any court of competent jurisdiction for entry and
enforcement of judgement based on the award.
22. Costs
Subject to the adjustment pursuant to Section 9 with respect to third
party intervention, the costs of the time, expenses, and other charges of
the arbitrator(s) shall be borne by the parties to the dispute, with each
side on an arbitrated issue bearing its pro-rata share of such costs, and
each party to an arbitration proceeding bearing its own costs and fees. If
the arbitrator(s) determine that a demand for arbitration or response to a
demand for arbitration was made in bad faith, the arbitrator(s) shall have
the discretion to award the costs of the time, expenses, and other charges
of the arbitrator(s) to the winning party. Notwithstanding the above, at
the discretion of the arbitrator(s), the winning party in any dispute
which has resulted in the enforcement of an important right affecting the
public interest shall not be required to pay any of the costs of the
arbitrator(s) and may recover such of its own reasonable attorney fees,
expert witness fees, and other reasonable costs from the losing party to
the dispute if (a) a significant benefit, whether pecuniary or
non-pecuniary, has been conferred on the general public, (b) the necessity
and financial burden of private enforcement are such as to make the award
appropriate and (c) such fees should not, in the interest of justice, be
paid out of the recovery. The parties should be aware of Rules 48-51 of
the AAA's Commercial Arbitration Rules and pages 13-14 of the AAA's
Commercial Mediation Rules regarding costs. A complete fee schedule is
attached to the Procedures.
23. Appellate Record
The parties intend that FERC or the court of competent jurisdiction should
afford substantial deference to the factual findings of the arbitrator(s).
No party shall seek to expand the record before the FERC or court of
competent jurisdiction beyond that assembled by the arbitrator(s), except
(a) by making reference to legal authority which did not exist at the time
of the decision of the arbitrator(s), or (b) if such party contends the
decision was based upon or affected by fraud, collusion, corruption,
misconduct or misrepresentation.
Schedule 7.3 - Page 11
24. Appellate Procedures
(a) If a party to an arbitration desires to appeal an award, that
party shall provide a notice of appeal to the PX and all parties
within fourteen (14) days following the date of the award. The PX
shall publish within fourteen (14) days' notice of the appeal in
the PX newsletter or electronic bulletin board, or any other
method adopted by the PX ADR Committee. Within ten (10) days of
filing the notice of appeal, the appellant must file an
appropriate application, petition or motion with FERC to trigger
review under the FPA or with a court of competent jurisdiction.
Such filing shall state that the subject matter had been the
subject of arbitration pursuant to the Tariff.
(b) Within thirty (30) days of the notice of appeal (or such other
period as FERC or the court of competent jurisdiction may specify)
the appellant shall file the complete evidentiary record of the
arbitration and a copy of the award with FERC or with the court of
competent jurisdiction. The appellant shall serve copies of a
description of all materials included in the submitted evidentiary
record on the PX and all parties.
(c) Implementation of the award shall be deemed stayed pending an
appeal unless and until, at the request of a party, the FERC or
the court of competent jurisdiction to which an appeal has been
filed issues an order dissolving, shortening, or extending such
stay. However, a summary of each appeal shall be published in the
PX newsletter or electronic bulletin board, or any other method
adopted by the PX ADR Committee.
(d) FERC orders resulting from appeal shall be subject to judicial
review pursuant to the FPA.
Schedule 7.3 - Page 12
EXHIBIT A
FEE SCHEDULE
Mediation Services.
$150.00 per party filing fee.
o plus compensation per hour for the mediator split by the parties
(hourly rate of compensation will vary depending upon the mediator
selected.
o plus $75.00 per hour surcharge per hour of mediator service (split
by the parties to cover AAA's administrative services).
AAA's delivery of mediation services commences upon the filing of a
submission to mediation form with AAA that contains the requisite number
of signatures as established by the PX Tariff.
2. Arbitration Services. AAA's Commercial Arbitration administrative fees
are based on the amount of the claim or counterclaim. Arbitrator
compensation is additional. Unless the parties agree otherwise,
arbitrator compensation and administrative fees are subject to allocation
by the arbitrator in the final award. Services in respect of intervention
requests shall be paid pursuant to Section 3 of this Exhibit A.
a. Filing Fees. A nonrefundable filing fee is payable in full by the
filing party when a claim, counterclaim or additional claim is
filed, as follows:
Amount of Claim Filing Fee
Up to $10,000 $ 500.00
Above 10,000 to $50,000 750.00
Above $50,000 to $100,000 1,250.00
Above $100,000 to $250,000 2,000.00
Above $250,000 to $500,000 3,500.00
Above $500,000 to $1,000,000 5,000.00
Above $1,000,000 to $5,000,000 7,000.00
When no amount can be stated at the time of filing, the minimum
fee is $2,000, subject to increase when the claim or counterclaim
is disclosed. The minimum filing fee for any case having three
arbitrators is $2,000. When a claim or counterclaim is not for a
monetary amount, AAA shall determine an appropriate filing fee.
Schedule 7.3 - Page 13
The administrative fee for claims in excess of $5,000,000 will be
negotiated with the parties to the dispute.
The expedited procedures outlined in sections 53-57 of the
Commercial Arbitration Rules (as modified herein) shall apply in
any case where no disclosed claim or counterclaim exceeds $50,000,
exclusive of interest and arbitration cost. Those procedures
provide for arbitrators to be directly appointed by AAA. If the
parties desire to chose an arbitrator as provided in Section 7.3.
1.1 of the PX Tariff, a service charge of $150 will be payable by
each party.
b. Hearing Fees. For each day of hearing held before a single
arbitrator, an administrative fee of $150 is payable by each
party. For each day of hearing held before a multi-arbitrator
panel, an administrative fee of $250 is payable by each party.
There is no AAA hearing fee for the initial Procedural Hearing.
There is no hearing fee for the initial hearing in cases in which
no party's claim exceeds $ 1 0,000, administered under the
expedited procedures, but the arbitrator's compensation shall be
split by the parties (hourly rate of compensation will vary
depending upon the arbitrator selected).
c. Postponement/Cancellation Fees. A fee of $150 is payable by a
party causing a postponement of any hearing scheduled before a
single arbitrator. A fee of $250 is payable by a party causing a
postponement of any hearing scheduled before a multi-arbitrator
panel.
d. Suspension for Nonpayment. If arbitrator compensation or
administrative charges have not been paid in full, the
administrator may so inform the parties in order that one of them
may advance the required payment. If such payments are not made,
the arbitrator or arbitrator panel may order the suspension or
termination of the proceedings. If no arbitrator has yet been
appointed, the administrator may suspend the proceedings.
3. Intervention Services. There will be no additional charge if an
intervention request is not challenged. If the request for intervention
is challenged by a party to the dispute, the following fee schedule shall
apply:
o Each challenger and each challenged intervenor shall pay a $150
fee (even if parties make joint filings)
o plus compensation per hour for the arbitrator split between the
intervenor(s) being challenged and the challenger(s) (compensation
rate will vary depending upon the arbitrator selected)
o plus $75 surcharge per hour of arbitrator compensation split by
the intervenor being challenged and by the challenger(s) (to cover
AAA administrative costs).
Schedule 7.3 - Page 14
o If the arbitrator finds that an intervention request or challenge
was made in bad faith or for purposes of delay, the arbitrator
shall have discretion to assess all of the fees and costs related
to the intervention arbitration to the other party.
o After an intervention request has been granted, the intervenor
shall file a statement of claim. If the intervenor seeks separate
monetary relief the intervenor shall pay the filing fee set forth
in Section 2 of this Exhibit A with respect to arbitration issues.
Schedule 7.3 - Page 15
SCHEDULE 7.8
Disruption of Critical Services
Perot Systems is providing Services that support the Critical Services set forth
below. In the event any of these Critical Services become unavailable
("disruption"), Perot Systems shall (in addition to its other obligations under
this Agreement) make all reasonable commercial efforts, as applicable, to
promptly restore functionality of such Critical Services through workarounds or
transfer of operations to the disaster recovery site. In the event Perot Systems
is not able to restore the Critical Services within such cure period, CalPX
shall, in addition to any other rights or remedies under this Agreement, have
the rights set forth in Section 7.8 of this Agreement.
This schedule may be revised from time to time by amending this Agreement.
<Table>
<Caption>
Critical Service Cure Period No. of Disruptions in a 6
Month Time Period*
Day Ahead Trading 48 hours 3
Day Ahead Scheduling 48 hours 3
Day-Of Trading 72 hours 3
Hour-Ahead Scheduling 72 hours 3
Real-Time Operations 72 hours 3
Block Forward Trading 72 hours 3
Metering 168 hours 3
Settlements 168 hours 3
Billing 168 hours 3
Dispute Resolution 168 hours 3
Participant Registration 72 hours 3
Master File Update 72 hours 3
</Table>
Schedule 7.8 - Page I