INFORMATION TECHNOLOGY SERVICES AGREEMENT
EFFECTIVE AS OF FEBRUARY 28, 2000
BETWEEN
CALIFORNIA POWER EXCHANGE CORPORATION
AND
PEROT SYSTEMS CORPORATION
Article 1
Definitions, Agreement and Term
1.1 Certain Definitions .................................................1
1.2 Agreement ...........................................................1
1.3 Term .............................................................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 CaIPXRepresentative.................................................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 Inproved Technology.................................................10
3.9 Changes in Lawand Regulations.......................................10
3.10 Technical Standards.................................................11
3.11 Knowledge Sharing...................................................11
3.12 Customer Satisfaction...............................................11
3.13 Regular Improvement.................................................12
Article 4
CalPX Responsibilities
4.1 Cooperation.........................................................12
4.2 Access to Software..................................................13
4.3 Access to CalPXFacilities...........................................13
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 OtherCharges ........................................................18
5.12 FeeDisputes ............................................................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 CalPXData ..............................................................19
6.2 Confidential Information................................................20
6.3 Ca1PX 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 Ca1PX's Business...............................................26
6.8 Data Security...........................................................26
6.9 Safety and Security Procedures..........................................26
6.10 Security Relative to CaIPXCompetitors...................................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
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
iv
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 CaIPX Expense and Reimbursement Policy
7.3 Supplemental Procedures for CalPX Disputes
7.8 Disruption of Critical Services
V
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 ("CalPX), a California nonprofit public benefit
corporation with its principal place of business at 200 South Los Robles Avenue,
Suite 400, Pasadena, California 91101.
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 Term. 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 CalPX
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 FPmpltnyees 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 CaIPX 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 CaIPX's opinion, any individual assigned to the CalPX
account as Key Personnel should not remain assigned to the
CalPX account, then CaIPX shall advise Perot Systems of such
opinion, and Perot Systems shall promptly investigate the
matter and take appropriate action which may include (a)
removing such
2
individual from his or her status as Key Personnel and
notifying CalPX 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 Persannel 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 Remnval of P9C 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
CaIPX regarding safety, health and personal conduct generally
applicable to CalPX and vendor personnel working at such CaIPX
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, CalPX
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 Ca1PX 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 CalPX, those PSC Personnel
located on CalPX's premises may only provide services on such
premises which support CalPX's operations.
2.6 C21PX Representative. CalPX shall designate a representative ("CalPX
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
3
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 CalPX with
notice to Perot Systems.
2.7 Transfer offPrsmnel
(a) Perot Systems shall offer employment to CaIPX'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 CalPX 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 CalPX 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:
(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
4
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 Regtrictions 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 Senides. 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 Semice .&e1s.
(a) In the absence of adequate historical data from the operation of
Ca1PX'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 CalPX'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
CalPX'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 CalPX 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 Addition1 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 Pmeediure.
(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 CalPX for a Change
Order, Perot Systems shall prepare and provide to CalPX'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 CaIPX 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 with- draw the
request for such Change Order. CaIPX'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 CalPX 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, (I) 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 CalPX, 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 CaIPX's information technology operations
for CaIPX'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 aw and Reguilations.
(a) Perot Systems shall identify and notify CaIPX 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
10
operating procedures that require changes to the way in which
the Services are 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 perforning its obligations under this Agreement, Perot
Systems shall (i) use commercially reasonable efforts to
continue to perform the Services and (ii) develop and, upon
CalPXs 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 CalPX'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 Cuistomer Satkfaction.
(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 CaIPX 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 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, Ca1PX may initiate at
its expense a third- party review of the Services being
performed by Perot Systems. If CaIPX 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 CalPX, 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 Regilar mprovement. 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
CalPX Responsibilities
4.1 Cooperatinn. 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
12
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 CaIPX.
4.2 Access to Soflware.
(a) Ca1PX 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 ("CaIPX Proprietary Software"). CaIPX
shall pay any access or other fees associated with obtaining
such rights to the CalPX Proprietary Software. CaIPX shall pay
all license, maintenance and other fees associated with the
CaIPX Proprietary Software.
(b) CaJPX 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 CalPX 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 Cla1PX Facilities. CaIPX 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 R1MF (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. CaIPX
shall procure and purchase at its sole cost and expense all the
necessary hardware and software of CalPX reasonably required by Perot
Systems to provide the Services. CalPX shall provide such
13
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 Systems. CaIPX 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 A.ces to Tehndogy. CaIPX 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 "CaIPX
Technology"). CalPX shall pay all costs and expenses, including without
limitation, maintenance costs, associated with the CalPX Technology.
4.5 Required Tmprovementg. 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 Feeq.
(a) During the Transition Period and thereafter until the Required
Improvements are completed, Perot Systems shall invoice CaIPX
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 Peifirmance Bonimes anti Credit .
(a) CalPX and Perot Systems have established the "Baseline Budget"
set forth in Schedule 5.1, which represents CaIPX'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
CalPX 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 Reimbuirsahle 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 CaIPX 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,
CalPX 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 Adjistment. 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 another year, the
16
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 CaIPX 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 CaIPX Chief
Financial Officer. CalPX shall deliver a CalPX check to the Account
Manager at CaIPXs 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 CaIPX each month in support of its charges under this
Agreement, including reimbursable expenses. Upon notice from CalPX, Perot
Systems shall provide CaIPX and its representatives (collectively, the
"CaIPX 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-Throu1gh Fxpences. 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 CaIPX 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.
CaIPX 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 Adjuclstment of Budget.
(a) During any 12-month period commencing as of the Effective Date,
CaIPX 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 CaIPX 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 CalPX'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 CaIPX's reasonable control.
(b) If CalPX elects to reduce the Baseline Budget as provided in Section
5.1 0(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 ChargesR. 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 Dispuite.
(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). Ca1PX 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
CalPX 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 the
18
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 1 nused Credit. 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 CaIPX 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 frther consideration all of its and their right, title
and interest in and to the CalPX 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 Ca1PX, 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 retained by Perot Systems. Any
archival and backup tapes
19
containing CaIPX 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 Tnformation.
(a) Confidential Tnformatimn. 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 Dlisclosuires. 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 Requiired by aw. 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) Ohligations upon Termination or xIpiratinn. 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 P vileged 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 Propretary Sofiware. 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 Ca1PX shall have no rights
or interests therein, except as otherwise provided in this
Agreement.
22
(b) Perot Systems shall provide CalPX, Affiliates of CalPX and
CaIPX 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 Developei Software.
(a) Except as otherwise agreed in this Article 6, CalPX 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 CalPX's ownership of any such
Work Product.
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(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 CaIPX,
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 ("CaIPX 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
CaIPX, 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 CalPX 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 CaIPX 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 CalPX 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 CAIPX's Buiines. Perot Systems shall provide reasonable support
to CalPX in connection with an audit of CalPX's business as Additional
Services. Perot Systems shall not be obligated by this Agreement to
disclose to CaIPX or any other person or entity any information which is
not reasonably necessary to conduct an audit of CalPX'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 CalPX and Perot
Systems.
6.8 Data Seurity. 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 CalPX 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 CalPX Representative of the same and (2) if
the CalPX 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 CalPX and Perot Systems.
6.9 Safety and Secuirity Procedures. Perot Systems shall maintain and enforce
mutually agreed physical security standards and procedures at each of the
service locations and comply with CaIPX environmental and physical
security procedures in effect at the CalPX service locations.
6.10 Security Relative To QaIPX Competitors. If Perot Systems intends to
provide the Services from a service location that is shared with (1) a
third party or (2) any part of the business of Perot Systems that
competes with the business of CalPX, then, prior to providing any of the
Services from such service location, Perot Systems shall develop a
process, subject to CalPX'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 Disuite Re-golticon. 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 Couinterclaims. 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 ocation. 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 Terminatinn for Caise. 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 II 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 Term.
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 Ca1PX 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 CaIPX'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 CalPX 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 Majenre 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, CaIPX 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 CaIPX 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 CaIPX the Transition Assistance described below as
reasonably requested by CalPX ("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
CalPX.
30
(iv) With respect to any equipment owned by Perot Systems and used
solely to perform the Services, CaIPX 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 CaIPX
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 CaIPX Proprietary Software, delivering and installing
software and tools licensed to CalPX by Perot Systems, delivering
and installing Developed Software and Work Product, delivering
CalPX Data in a format specified by CalPX 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
31
Period an amount equal to Perot Systems' reasonable estimate of the
total amount 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 Majenire 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 Majeure Fvent"), 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) Byh aIPX. 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 Indenmnity.
(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 CalPX 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
CalPX.)
(b) By.CaIPX. 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 CalPX 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 Fmployment 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 CalPX. 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
33
such Transitioned Employee or Non-Transitioned Employee was
employed by 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 CalPX'. uiisiness Risk Tndemnity. To the extent, and only to the extent,
CalPXs insurance carriers cover CaIPXs 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 CalPXs participants and vendors relating to any
duties or obligations of CalPX to such third parties.
8.5 Other Pernt ystemq Tndemnities. 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 Indlemnificatinn Proceduires. 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 1 imitation 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 T imitation an Type of Damages. Each 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, CaIPX 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
35
failure of the type or nature described above. Notwithstanding anything to
the contrary in 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 stems. Perot Systems warrants and covenants to CalPX 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 1O.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 Farh ary. 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
1.1 Tnsurance
(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 CaIPX.
(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) CaIPX 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, CaIPX 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 CaIPX, 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 CalPX
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 CalPX 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 liable
for social security, unemployment, disability insurance or other
tax or
39
<Table>
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).
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
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) CalPX 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 Ca1PX, any other subsidiary of Perot Systems, so long as
Perot Systems, in each case, remains responsible for (a) the actions of
such Affiliate and (b) any additional costs or expenses arising out of or
relating to any such assignment by
40
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 Severbility. 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 Reneflciarie . 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 (nveming w. 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 xclusive 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 CalPX and Perot Systems
shall execute and deliver any fiurther legal instruments and perform any
acts that are or may become necessary to effectuate the purposes of this
Agreement.
12.13 Negotialted 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 Tnterest 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 Releses. 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 I The parties acknowledge and agree that after the
Effective Date, Perot Systems shall have no frther 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: By:
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
"CalPX' has the meaning given this term in the preamble to this Agreement.
Whenever any Affiliate of CalPX receives Services under this Agreement, the
definition of "Ca1PX" 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.
"CaIPX 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.
"CaIPX 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).
"CaIPX Representative" has the meaning given this term in Section 2.6.
"CaIPX 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 1(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 1.1 -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 CaIPX.
"Perot Developed Software" shall mean any Developed Software, other than CalPX 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 O(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 Ca1PX.
"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 CalPX 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 (l)(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, CalPX 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 1.1 - 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 1.1 - Page 7
SCHEDULE 1.2
Excluded Services
Subject to the provisions of Section 3.3(c), Ca1PX shall have no obligation to purchase any of the
following services from Perot Systems.
1. Year 000 Services. Perot Systems shall have no obligation under this Agreement to
identify, correct or resolve any problem caused by the failure of any CaIPX 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 CaIPX Perot
Systems shall assign PSC Personnel to identify, correct or resolve Y2K Problems in
substitution for the Services regularly performed by such PSC Personnel.
2. De-ktop Support Services nd Desktop Prorurement 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 service.
Perot Systems shall have no obligation under this Agreement to provide Configuration
Services.
Schedule 1.2 - Page 2
SCHEDULE 2.3
Personnel
Pairt A - Ca]PX Emplayes,
/
Part R - Ca1 PX Cpntractorg- I
Schedule 2.3 - Page IPSC 004A3
SCHEDULE 2A
Key Employees
This schedule may be revised from time to time by mutual agreement of the Account Manager
and the Ca1PX Representative.
Employee
Schedule 2.4 - Page I
SCHEDULE 2.5
Corporate Information Securities Standards, Guidelines & Procedures
Schedule 2.5 - Cover
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 CalPX as
length of service for Perot Systems.
Perot Systems shall consider making an accommodation for Transitioned Employees who have
401k loans under CalPX'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 I
SCHEDULE 3.1
Base Services
Part A - Program Management Serviee.
1. 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 CaIPX'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 CaIPX'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.
I. 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 I
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 CaIPX Representative and one or more executive-level
employees designated by CaIPX 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-
level guidance to Perot Systems on CaIPX's business priorities as they affect the Services,
Schedule 3.1 - Page 2
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 System-,-
Account Manager
Representatives of each service areas:
Program Management
Applications Management
Computer Operations
From CaPX-X
CalPX Representative
Representatives of each major business unit:
Trading
Settlements and Billing
Finance
Marketing
Compliance
Regulatory
Schedule 3.1 - Page 3
Part R -Compiter OQVratinnq !erviceg
Perot Systems shall operate and manage the Systems seven days per week, 24 hours per day, by
performing the following specific activities:
1.0 CaIPX'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, CalPX 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 CalPXs 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 CaIPX, as reasonably requested.
2.4 Process on-request jobs.
3.0 Tape Operations and Administration
3.1 Perform all tape mount requests at CaIPX's data center.
3.2 Perform output distribution activities for the tape library, as required. CalPX 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 CalPX'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 CalPX'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 CaIPX.
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 CalPX 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 CalPX'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 O
Part C - Application Maintenance Servives
(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.
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
Schedule 3.1 - Page 11
Web (ST) 1.15
Zonal Price Checker (DA & HA) 1.0
* 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.
Software Description Software
Version
Block Forward Secure Back Office 4.3
Block Forward CIBTOS Trade Annlication 3.0 - 6.7
Dav Ahead Bidding & Scheduling 51 .16
Hour Ahead Bidding & Scheduling 5.1.15
OM Net OMF.X (network gatewav) 2.2.1
Settlements 5.1.7.1
Trade Annlication 5.1.14
Block Forward Click 3.01
Schedule 3.1 - Page 12
Part - Applications Development Setrvices
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 CalPX
("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 5 business days after receiving it.
When Perot Systems delivers final Documentation to CalPX, CaIPX shall have the
opportunity to review the written deliverable for an acceptance period of 1O business days
after receiving it ("Acceptance Period"). CalPX 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 CalPX sends a
timely notice of deficiencies, Perot Systems shall correct the described deficiencies as
promptly as possible; provided, however, if Perot Systems, upon providing CaIPX's Account
Schedule 3.1 - Page 13
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. CalPX 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 CalPX 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 CalPX
determines as a result of the re-testing that the Software deliverable still contains
one or more Defects, Ca1PX 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 F - Buines Conni1ting SerVCeR
The PSC Personnel assigned to provide Business Consulting Services to CalPX shall, upon
request by CalPX, 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 CaIPX'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 L evels - General Provicions
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.
Assuimptions 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).
* CalPX 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
upgrade such hardware or software in accordance with the recommendations
Schedule 3.3 - Page I
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.
[TABLE OMITTED]
Schedule 3.3 - Page 2
[TABLE OMITTED]
Schedule 3.3 - Page 3
Definition of Terms
Severity Level: The severity level reasonably assigned to a problem by
CaIPX and Perot Systems based on the impact of that
problem on CalPX'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 CalPX
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
[TABLE OMITTED]
Schedule 3.3 - Page 5
[TABLE OMITTED]
Schedule 3.3 - Page 6
SCHEDULE 4.2
Managed Software
Part A - CanPX Prpriettary Software
Software Program Version
Admnin 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 -- (aPX 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
Schedule 4.2 - Page I
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
I00BT/9000 EISA B. 10.20.01
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 B10.20
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
HPUX Core OS Year 2000 Patch Bundle B.10.20.A0720
HummingBird (Exceed/Xpress, Xpress/Host 1.6 rel 4.25
Hyena 1.76
Internet Information Server 3.0
Internet Information Server 2.0
Schedule 4.2 Page 2
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 hat Win 2.21w
MPWebI.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
Schedule 4.2 - Page 3
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
Xernacs 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
Schedule 4.2 - Page 4
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
HP 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+t 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 Forms 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
Schedule 4.2 - Page 5
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 Sofw
Rlilno Pririi,.mA 1-TCTi Trarl Anfr.it n A n -c 7
Tnatr AhboA pArlr4n" R7 Chc.Aila ; 1 lf
"T-Ti AhA R;rm;nC Rr 1 1 ;
n%/ C TI t (1VAA1Y (nM-al-rl tPr'r\ 9 9 1
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TrAa r r 'c 1 1a ;
b T A Rr T-T A I
RPlcol P rxixrairA (-1;e r ' Al
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
Schedule 4.2 - Page 6
Manta Ray 1.0
Over Generation Mitigation 1.0
Real Time Data Collection 1.0
Real Time Reporting System 1.0
Settlement Reporter (PXSRITO 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
Schedule 4.2 - Page 7
SCHEDULE 4.4
Client Technology
Managed Equipment (Tentative)
Who
Operating Owns Who Fallover
Server Hardware System CPUs RAM Disk It Supports It CapabilitiesDomain Location
Production
ALHDEV171 HP LPr 06131A NTS4 SP4+ 1 64M 4G PX PX none PXPROD Svr room
ALHDEV172 HP L.Pr 06131A NTS4 SP4+ 1 64M 4G PX PX none PXPROD Svr room
ALHPAPI107 Digital PrIoris MX6200 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPAP1 08 Digital Prloris MX6200 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPAP1 10 Digital PrIoris MX6200 NTS4 SP4+ 1 PX PX none PXPROD Svw room
ALHPAP1 11 Digital Prioris MX6200 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPAP1 13 HP Vectra D4841 NTW4 SP4+ 1 PX PX none PXPROD Svr room
ALHPAP180 HP LXr 8000 NTS4 SP4+ 1 4G mir PX PX ALHPAP181 PXPROD Svr room
ALHPAP1 81 HP LXr 8000 NTS4 SP4+ 1 4G mir PX PX ALHPAP180 PXPROD Svr room
ALHPAP193 HP LPr D6131A NTS4 SP4+ 1 64M 4G mir PX PX none PXPROD Svr roam
ALHPAP194 HP J-Pr D6131A NTS4 SP4+ 1 64M 4G mir PX PX none PXPROO Svr roam
ALHPAP195 HP l.Pr D6131A NTS4 SP4+ 1 64M 4G mir PX PX none PXPROD Svr roam
ALHPAP199 HP L-Pr 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 roam
ALHPAP203 HP LXr 8000 NTS4 SP4+ 1 4G mir PX PX ALHPAP204 PXPROD Svr roam
ALHPAP204 HP L-Xr 8000 NTS4 SP4+ I 4G mir PX PX ALHPAP203 PXPROD Svr room
ALHPAP210 HP L-Xr 8000 NTS4 SP4+ 1 4G mir PX PX ALHPAP211 PXPROD Svr room
ALHPAP21 1 HP LXr 8000 NTS4 SP4+ 1 4G mir PX PX ALHPAP210 PXPROD Svr room
ALHPAP7532 HP I.Pr D61 31A NTS4 SP4+ 1 64M 4G PX PX ALHPAP7533 PXPROD Svr roam
ALHPAP7533 HP L-Pr D6131A NTS4 SP4+ 1 64M 4G PX PX ALHPAP7532 PXPROD Svr roam
ALHPAP97 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPAP98 NTS4 SP4+ 1 PX PX none PXPROD Svr room
ALHPSEC2 HP L.Pr 061 31A NTS4 SP4+ 1 64M 4G PX PX none PXOAI Svr room
ALHPWEB10 HP LPr D6131A NTS4 SP4+ 1 64M 4G PX PX none PXPROD Svr room
ALHPWEB1 1 IBM PC Server 704 NTS4 SP4+ 1 PX PX none PXPROD Svr roam
ALHPWEB1 3 IBM PC Server 704 NTS4 SP4+ 1 PX PX none PXPROD Svr roam
ALHPWEB14 IBM PC Server 704 NTS4 SP4+ 1 PX PX none PXPROD Svr roam
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 Svr roam
BFWDWEB1 HP L-Pr D6131 A NTS4 SP4+ 1 64M 4G PX PX BFWDWEB2 PXPROD Svr room
BFWDWEB2 HP L.Pr D6131A NTS4 SP4+ I 64M 4G PX PX BFWDWEB1 PXPROD Svr roam
BFWDTWEB HP L-Pr 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 roam
CSIAPAPPlA 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 Svw roam
IMS INTRA NTS4 SP4+ 1 PX PX none PXPROD Svr room
Help HW Os App DR Hot
Function Desk Support Support Support Site
TestlDevelopment PX HP PX PX
Testloevelopment PX HP PX PX
MDAS ftp server #1 PX Compaq PX Folsom
MDAS DB server #1 PX Compaq PX Foisom
MDAS ftp server #2, Psoft AppsPX Compaq PX Foisom
MDAS DB server #2 PX Compaq PX Folsom
Settiement LIi Processor PX HP PX Foisom
BDC PXPROD, PEP+ PX HP PX PX Foisom
BDC PXPROD, Settlement PX HP PX PX Foisom
OM Gateway PX HP PX PX Foisom
OM Gateway PX HP PX PX Folsom
OM Gateway PX HP PX PX Foisom
WLBS Web Server PX HP PX PX
BDC PXPROD, Buckeye PX HP PX PX Foisom
BDC PXPROD, Peoplesoft PX HP PX PX Folsom
BDC PXPROD, SQL? PX HP PX PX Foisom
PDC PXPROD PX HP PX PX Foisom
BDC PXPROD, PXMDAS PX HP PX PX Foisom
SO0C PXPROD, ntranet PX HP PX PX Folsom
OM Gateway PX HP PX PX Folsom
WI.BS Web Server PX HP PX PX
Buckeye & Book PX PX
PeopleSoft File Share PX PX
PDC n DMZ PX PX PX
A-Frame DB Server PX HP PX
Ext PRMS Web Server PX IBM PX Folsom
DayAhead MCP Server PX IBM PX
HourAhead MCP Server PX IBM PX
Settlements Web Server PX IBM PX
Powerbase PX IBM PX
BF Prod Web Server PX HP PX PX
SF Prod Web Server PX HP PX PX
BF Test Web Server PX HP PX PX
PDC PXOA1 IBM IBM IBM IBM Folsom
BDC PXOA1 IBM IBM IBM IBM Folsom
CALPX web site IBM IBM PX
Int PRMS Web Server PX IBM PX Folsom
I ~~~~~~~~~~~~~~~Schedule 4.4 - Page
Who
Operating Owns Who Failover
Server Hardware System CPUs RAM Disk It Supports It CapabilitiesDomain
Retired or in non production status?
ALHPAP1 Digital PWS 200i NTS4 SP4+ 1 64M 4.3G PX PX none PX?
ALHPAP2 Digital PWS 200i NTS4 SP4+ 1 64M 4.3G PX PX none PX?
ALHPAP3 Digital PWS 200i NTS4 SP4+ 1 64M 4.3G PX PX none PX?
ALHPAP28 Digital PWS 200i NTS4 SP4+ 1 64M 4.3G PX PX none PX?
ALHPAP33 Digital PWS 2001 NTS4 SP4+ 1 64M 4.3G PX PX none PX?
ALHPAP27 Digital PWS 200i NTS4 SP4+ 1 64M 4.3G PX PX none PX?
ALHPAP52 Digital PWS 2001 NTS4 SP4+ 1 64M 4.3G PX PX none PX?
ALHPAP133 Digital PWS 200i NTS4 SP4+ 1 64M 4.3G PX PX none PX?
ALHPAP134 Digital PWS 200i NTS4 SP4+ I 64M 4.3G PX PX none PX?
ALHPAP53 Digital PWS 2001 NTS4 SP4+ 1 64M 4.3G PX PX none PX?
ALHPAP88 Digital Priori MX6200NTS4 SP4+ 1 none PX?
ALHPAP150 NTS4 SP4+ 1 PX PX none PX?
ALHPAP80 NTS4 SP4+ 1 PX PX none PX?
ALHPAP137 NTS4 SP4+ 1 PX PX none PX?
ALHPAP142 NTS4 SP4+ 1 PX PX none PX?
ALHPAP138 NTS4 SP4+ 1 PX PX none PX?
ALHPWEB12 NTS4 SP4+ 1 PX PX none PX?
ALHPAP80 Digital Priori. MX6200NTS4 SP4+ 1 PX PX none PX?
ALHPAP74 NTS4 SP4+ 1 PX PX none PX?
ALHPAP171 HPLPr D6131A NTS4SP4+ 1 64M 4G PX PX ALHPAP172 PXDEV
ALHPAP172 HPLPr D6131A NTS4SP4+ 1 64M 4G PX PX ALHPAP171 PXDEV
ALHPAP109 HP Netserve 6/200 NTS4 SP4+ 1 PX PX none PXPROD
Help HW OS App
Location Function Desk Support Support Support
Svr room OMN Gateway PX Compaq PX OM
Svr room OMN Gateway PX Compaq PX OM
Svr room OMN Gateway PX Compaq PX OM
Svr room OMN Gateway PX Compaq PX OM
Svr room OMN Gateway PX Compaq PX OM
Svr room OMN Gateway PX Compaq PX OM
Svr room OMN Gateway PX Compaq PX OM
Svr room OMN Gateway PX Compaq PX OM
Svr room OMN Gateway PX Compaq PX OM
Svr room OMN Gateway PX Compaq PX OM
Svr room PeopleSoft Apps PX Compaq PX OM
Svr room PX PX
Svr room PX PX
Svr room PX PX
Svr room PEP+ Test PX PX
Svr room PX PX
Svr room PX PX
Svr room PX Compaq PX
Svr room MDAS Test PX PX
Svrroom PDCPXDEV PX HP PX PX
Svrroom BDCPXDEV PX HP PX PX
Svr room master/master db sen PX HP PX
Schedule 4.4 - Page 2
CaIPX UNIX System Configuration
Alhambra, CA. UNIX Server Inventory (Tentative)
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
Schedule 4.4 - Page 3
Folsom, CA. UNIX Server Inventory
FOLPAP87 HP-UX HP9000 unknown unknown Sybase, Replication
10.20 K460 DA/HA/SE
FOLPA 10 HP-UX HP9000 unknown unknown Settlements
10.20 K260
FOLPA108 HP-UX HP9000 unknown unknown Not used.
10.20 K260
Hostname HP-UX HP9000 unknown unknown Not used.
unknown 10.20 K260 i
EMC 7800 unknown
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 CalPX
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/Inplementation/Training
The Remedym software that Perot Systems uses for problem and change
management must be customized to support the CalPX's specific requirements.
In addition, the escalation process used to support the Ca1PX'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
Ca1PX backup and archive strategies must be reviewed and updated, if
necessary.
Perot Systems shall review the CaIPX'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
CaIPX 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. Eegs for Base Serviceq.
The rates set forth below shall be adjusted annually in accordance with Section
5.6 of the Agreement.
Service Fee fr Core gervic-es
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. Raseline 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 Proeurement 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 Service
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 I
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 fnr Applictionn 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 Rusiness 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 Raseline Rudget
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.
* CaIPX 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.
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
All rates are for services only. Travel and other out-of-pocket expenses are not
included.
Schedule 5.2 - Page I
SCHEDULE 5.4
CalPX 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.
PROCEDTTRFS
DfOCUJMENTATION
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 inclnde 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.
APPROVAL S
Schedule 5.4 - Page I
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 GE EXPENSES
Traspdaelou
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 CaIPX 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 CalPX 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 Ca1PX 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.
Rusiness 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 Qther Casts
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.
Lddging
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.
Movies, snacks,
Schedule 5.4 - Page 3
and mini-bar charges are not reimbursable. Reasonable tips to hotel
personnel should be shown as other incidental expense.
Meals
ErnPlayee 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.
Rusiness MeaIs
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-Reimbuirsahle 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
Sviplementary Procedires 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 seq. 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 claim decided or relief granted by a decision made
under the Procedures unless the
Schedule 7.3 - Page 2
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 10 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 petitioners shall be allowed to participate
as requested and the case will move forward in accordance with Section 10 of
the Procedures.
Schedule 7.3 - Page 4
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 demanding arbitration shall designate one arbitrator
and the party or parties responding to the demand for arbitration shall
designate one arbitrator, in both cases
Schedule 7.3 - Page 5
from the AAA's list of arbitrators no later than the tenth (1 e) 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 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,
Schedule 7.3 - Page 6
within ten (10) 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 detennine 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.
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
Schedule 7.3 - Page 7
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.
20. Compliance
Schedule 7.3 - Page 10
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.
24. Appellate Procedures
Schedule 7.3 - Page II
(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 SCH 4FI F.
Mediation Services.
$150.00 per party filing fee.
o pis compensation per hour for the mediator split by the parties
(hourly rate of compensation will vary depending upon the mediator
selected.
o pls $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 ExhibitA.
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 nlaim 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 Feel. 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 $10,000, 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. usnpension 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 pUs 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 pis $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 Fxhihit 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.
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
Da-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
Schedule 7.8 - Page I