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 CalPX Representative................................................ 4
2.7 Transfer of Personnel............................................... 4
2.8 Subcontractors...................................................... 4
2.9 Restrictions on Hiring.............................................. 5
Article 3
Services
3.1 Base Services....................................................... 5
3.2 Service Levels...................................................... 6
3.3 Additional Services................................................. 7
3.4 Change Control Procedure............................................ 8
3.5 IT Procurement Services.............................................10
3.6 Management Procedures Manual........................................10
3.7 Reports.............................................................10
3.8 Improved Technology.................................................10
3.9 Changes in Law and Regulations......................................10
3.10 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 CalPX Facilities..........................................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 Other Charges....................................................18
5.12 Fee Disputes........................................................18
5.13 Proration...........................................................19
5.14 Unused Credits......................................................19
5.15 Retention of Records................................................19
Article 6
Confidentiality, Proprietary Rights and Audit Rights
6.1 CalPX Data..........................................................19
6.2 Confidential Information............................................20
6.3 CalPX Proprietary Software..........................................22
6.4 Perot Systems Software and Perot Systems Tools......................22
6.5 Rights in Developed Software........................................23
6.6 Know-How............................................................25
6.7 Audit of CalPX's Business...........................................26
6.8 Data Security.......................................................26
6.9 Safety and Security Procedures......................................26
6.10 Security Relative to CalPX Competitors..............................26
Article 7
Performance Review and Termination
7.1 Performance Review..................................................27
7.2 Dispute Resolution..................................................27
7.3 Arbitration.........................................................27
7.4 Termination for Cause...............................................28
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
Articles
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
Article 12
Miscellaneous
Relationship of Parties.......................................................
Notices.......................................................................
Assignment ...................................................................
Severability..................................................................
Captions .....................................................................
Modification; Waiver..........................................................
No Third-Party Beneficiaries .................................................
Governing Law.................................................................
Consents, Approvals, Requests and Opinions....................................
Survival......................................................................
Sole and Exclusive Venue......................................................
Covenant of Further Assurances................................................
Negotiated Terms..............................................................
12.1
12.2
12.3
12.4
12.5
12.6
12.7
12.8
12.9
12.10
12.11
12.12
12.13
12.14 Remedies Cumulative.................................................
12.15 Conflict of Interest................................................
12.16 Export..............................................................
12.17 Entire Agreement....................................................
12.18 Media Releases......................................................
12.19 Task Order No. 5....................................................
Schedules
1.1 Definitions
1.2 Excluded Services
2.3 Personnel
2.4 Key Employees
2.5 Corporate Information Securities Standards, Guidelines & Procedures
2.7 Transfer of Employees
3.1 Base Services
3.2 Service Levels
4.2 Managed Software
4.4 CalPX Technology
4.5 Required Improvements
5.1 Service Charges
5.2 Perot Systems Standard Commercial Rates
5.4 CalPX Expense and Reimbursement Policy
7.3 Supplemental Procedures for CalPX Disputes
7.8 Disruption of Critical Services
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 (me "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.
Article 52.2 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 Employees. With respect to the persons identified in
Schedule 2.4 (the "Key Personnel"), the parties agree as follows:
Article 5a. The individuals serving as Key Personnel shall each be
dedicated to the CalPX account on a full-time basis.
Article 5b. Before assigning an individual, other than those individuals
named in Schedule 2.4 as Key Personnel, as a replacement for any Key Personnel,
Perot Systems shall (a) notify the CalPX Representative of the proposed
assignment, (b) introduce the individual to the CalPX Representative and, (c)
provide the CalPX Representative with the qualifications and any other
appropriate information regarding the individual that may be requested by the
CalPX Representative. If the CalPX Representative does not approve of the
assignment of such individual as Key Personnel, Perot Systems shall in good
faith select an alternate candidate and shall follow the procedure set forth in
this subsection with respect to such candidate.
Article 5c. 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.
Article 5d. If, in CalPX's opinion, any individual assigned to the CalPX
account as Key Personnel should not remain assigned to the CalPX account, then
CalPX shall advise Perot Systems of such opinion, and Perot Systems shall
promptly investigate the matter and take appropriate action which may include
(a) removing such
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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.
Article 5e. Perot Systems shall maintain recruiting and replacement
procedures for Key Personnel designed to assure an orderly succession in as
prompt a manner as reasonably possible for any Key Personnel who resign or are
replaced.
2.4 PSC Personnel. Perot Systems shall assign qualified personnel as PSC
Personnel to perform the Services under this Agreement. -On a quarterly
basis, Perot Systems shall provide to the. CalPX Representative a list of
all PSC Personnel dedicated full-time to the CalPX account.
2.5 Conduct and Removal of PSC Personnel.
Article 5a. While on CalPX premises, Perot Systems shall use reasonable
commercial efforts to cause the PSC Personnel to comply with the reasonable
requests and standard rules and regulations of CalPX regarding safety, health
and personal conduct generally applicable to CalPX and vendor personnel working
at such CalPX premises, including (i) subject to each individual person serving
as PSC Personnel being provided with a copy, complying with the CalPX Employee
Code of Conduct, (ii) wearing an identification badge, and (iii) otherwise
conducting themselves in a businesslike manner.
Article 5b. 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.
Article 5c. 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 CalPX account,
providing CalPX with notice of such removal, and replacing him or her with
another qualified person, or (b) other disciplinary action reasonably
anticipated to prevent a recurrence. If there are repeated violations of this
Section by a particular individual, Perot Systems shall remove the individual
from the CalPX account. Perot Systems shall notify the CalPX Representative
immediately after dismissing or reassigning any PSC Personnel whose normal work
location is at a CalPX service location. Except as otherwise approved by CalPX,
those PSC Personnel located on CalPX's premises may only provide services on
such premises which support CalPX's operations.
2.6 CalPX 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
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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 CalPX
Representative may delegate such of his or her responsibilities to another
officer or director of CalPX with notice to Perot Systems.
2.7 Transfer of Personnel.
(a) Perot Systems shall offer employment to CalPX's employees who are
listed in Part A of Schedule 2.3 in accordance with Perot Systems'
standard employment policies as of the Effective Date, and in
accordance with Schedule 2.7. Such offer of employment shall be made
on or before February 22, 2000. Perot Systems shall request that these
employees accept the offer of employment by the close of business of
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 me agreement under which
such subcontractor is engaged or, in the case of multiple agreements
with a single subcontractor, during any 12 month period. Such approval
shall not be necessary for Affiliates controlled by Perot Systems
unless otherwise agreed in the Change Control Procedure.
(b) Perot Systems shall be fully responsible for the work and
activities of its subcontractors, including the compliance of
such subcontractors with the terms of this Agreement. Perot
Systems shall use commercially reasonable efforts to keep CalPX's
property free from liens arising in connection with the Services
performed by Perot Systems under this Agreement.
2.9 Restrictions on Hiring. Except as otherwise specifically provided in this
Agreement, Perot Systems and CalPX each agree not to hire or recruit the
other's employees with whom Perot Systems or CalPX came into contact in
connection with the activities contemplated by this Agreement until the
earlier of a) six months after the end of the Term; and b) six months after
such employee is no longer employed by the applicable party, without, in
each case, the prior written consent of the other party.
Article 3
Services
3.1 Base Services. During the Term, Perot Systems shall provide the Core
Services and up to the number of Full-Time Equivalent PSC Personnel shown
in Schedule 5.1 to perform Applications Development services, and Business
Consulting services (collectively, "Base Services") at CalPX's offices in
Alhambra, California; Pasadena, California; Perot Systems' Richardson
Information Management Facility ("RIMF"), and such other Perot Systems
offices and data centers as the parties mutually agree.
(a) Core Services are defined as:
(i) the Program Management Services described in Part A of Schedule
3.1;
(ii) the Computer Operations Services described in Part B of Schedule
3.1;
(iii) the Applications Maintenance Services described in Part C of
Schedule 3.1; and
(iv) the IT Procurement Services.
(b) Applications Development Services are described in Part D of Schedule
3.1; and
(c) Business Consulting Services are described in Part E of Schedule 3.1.
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3.2 Service Levels.
(a) In the absence of adequate historical data from the operation of
CalPX's Systems, the parties agree to use the service levels set forth
in Schedule 3.2 ("Service Levels") for the Services. These Service
Levels have been selected based upon industry data and a partial
analysis of the operation of 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.
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3.3 Additional Services.
(a) Perot Systems shall provide to CalPX such additional services that are
beyond the scope of the Base Services ("Additional Services") as Perot
Systems and CalPX from time to time agree in writing. Base Services,
Additional Services, and any Transition Assistance provided under
Section 7.11 are collectively referred to herein as "Services." Upon
identifying a need for information technology or business consulting
services outside the scope of the Base Services, the Account Manager
and the CalPX Representative shall coordinate the preparation of a
document identifying, in reasonable detail, the services to be
performed, the specific hardware, software and third party services to
be delivered as part of such services, and the objective completion
criteria to be applied in connection with such services. This document
shall be reviewed by the IT Steering Committee.
(b) Perot Systems acknowledges and agrees that CalPX prefers to use
commercial off-the-shelf software, rather than custom-designed
solutions, to meet its requirements whenever and wherever practical,
and Perot Systems shall use reasonable commercial efforts to identify
commercial off-the-shelf software products that are suitable for use
by CalPX as part of any proposal to provide Additional Services.
(c) If CalPX, in its sole and absolute discretion, chooses to terminate
the contract of any third party vendor that is providing desktop,
network or telecommunications information technology services, or such
contract expires in accordance with its terms, and CalPX (i) desires
to obtain such services from another third party and (ii) determines
in its reasonable discretion that Perot Systems has the appropriate
expertise and resources to provide such services, then CalPX and Perot
Systems shall commence good faith negotiations for Perot Systems to
provide such services in the event that following such good faith
negotiations, the parties shall not have reached agreement on the
terms of Perot Systems providing such services within 30 days of the
commencement of such negotiations, then CalPX shall have the right to
enter into an agreement with a third party to provide such services;
provided that prior to entering into a definitive agreement for the
provision of such services Perot Systems shall be offered the
opportunity to resubmit another proposal for the provision of such
services. CalPX acknowledges and agrees that Perot Systems has, as of
the Effective Date, the technical capability and experience to perform
the Desktop Support Services and Desktop Procurement Services.
(d) Additional Services will be performed under individual written task
order ("Task Orders") that are approved and issued in accordance with
this Section 3.3 and the Change Control Procedure. Each Task Order
shall identify, in reasonable detail, the services to be performed,
the specific hardware, software and third party services to be
delivered as part of such services, and the objective completion
criteria to be applied in connection with such services, in addition
to the price, reimbursable expenses and pass-through expenses to be
paid by CalPX for such Additional
7
Services. Perot Systems will commence the Additional Services upon
execution of the Task Order by CalPX and Perot Systems.
3.4 Change Control Procedure.
(a) All Changes (as defined herein) shall be reviewed by the Change Review
Board. All Change Orders shall be reviewed and approved in writing by
the Account Manager and CalPX Representative, The budgetary and
schedule effects of reasonably interrelated Change Orders shall be
aggregated to determine whether the CalPX Representative or the Change
Review Board should review such Change Orders. The parties shall use
their reasonable commercial efforts to minimize any adjustments to
development schedules, development budget and application
requirements. Change Orders may be approved electronically by the
Account Manager and the CalPX Representative.
(b) During the first 30 days after the Effective Date, Perot Systems shall
prepare and deliver to the Change Review Board, for its review and
approval, the Change Control Procedures to be used under this
Agreement to control Changes in scope, schedule and cost of the
Services. The Change Control Procedures shall provide, at a minimum,
that (i) all Changes, including Changes to the Change Control
Procedures, shall be made pursuant to the Change Control Procedures,
except as may be necessary on an emergency basis; (ii) no Change which
is reasonably expected to materially or adversely affect the function
or performance of any System or result in a material increase in the
charges to CalPX under this Agreement shall be implemented without the
Change Review Board's approval, except as may be necessary on an
emergency basis; (iii) all Changes, except those made as necessary on
an emergency basis, shall be implemented in accordance with a schedule
provided to the Change Review Board periodically and under
circumstances that are reasonably expected not to interrupt CalPX's
business operations materially; and (iv) me 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) me
functionality and requirements of the applicable System to be
delivered, and (iii) the development budget. In addition, Perot
Systems shall inform CalPX regarding any other business impact that
Perot Systems believes to be relevant to an evaluation of the Change
Order. The CalPX Representative or the Change Review Board, as the
case may be, shall review the information and, as the Change Review
Board deems necessary, revise it at the next succeeding Change Review
Board meeting and promptly forward its report on the proposed Change
to CalPX. Within ten business days or such longer period as is
mutually agreeable to the parties, after receiving such information,
CalPX shall approve, reject or withdraw the request for such Change
Order. CalPX's failure to approve, reject or withdraw the request
within the applicable time period shall be deemed a withdrawal of such
request.
(f) Upon submitting a request for a Change Order initiated by Perot
Systems, Perot Systems shall provide to CalPX a document summarizing
the effect, if any, on (i) the development schedule, including but not
limited to CalPX's obligations under the development schedule, (ii)
the functionality and requirements of the applicable System to be
delivered, and (iii) the development budget. In addition, Perot
Systems shall inform 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 me Change Review Board), CalPX
shall approve or reject the requested Change Order. CalPX's failure to
approve or reject the requested Change Order within the applicable
time period shall be deemed a rejection of such request.
(g) In any case where no final agreement has been reached on a Change
request but the CalPX Representative nonetheless orders Perot Systems
to carry out such Change, Perot Systems shall use its commercially
reasonable efforts to carry out such Change within the time requested
by CalPX at the price and related terms proposed
9
by Perot Systems, and either party may refer the disputed Change
request to the procedures provided in Section 7.2 and 7.3.
3.5 IT Procurement Services. At CalPX's written request, Perot Systems shall
purchase, lease or license equipment, software, services and supplies from
Perot Systems' suppliers on behalf of CalPX and for CalPX's account or
shall facilitate the purchase, lease or license of such items by CalPX at
the prices available to Perot Systems (the "IT Procurement Services").
3.6 Management Procedures Manual. On or before the end of the Transition Period
and as part of the Services, (1) CalPX and Perot Systems shall establish
procedures pursuant to which mutually agreed policies of CalPX and Perot
Systems shall be adhered to during the Term, and (2) Perot Systems shall
prepare and deliver to 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 me
operations or procedures described therein within a reasonable time after
such changes are made.
3.7 Reports. Perot Systems shall provide to CalPX performance, utilization and
status reports relating to the Services and Service Levels as requested by
CalPX in a form acceptable to CalPX.
3.8 Improved Technology. As part of the Services, Perot Systems shall provide
CalPX with information about, and recommendations regarding, information
technology developments that could reasonably be expected to have a
favorable impact on CalPX's information technology operations for CalPX's
consideration and evaluation, including information regarding any new
information technology developments that are not subject to third party
confidentiality restrictions made generally available by Perot Systems for
use by Perot Systems' customers. In addition, Perot Systems shall meet with
CalPX at least twice per year during the Term to inform CalPX of any new
information technology developments that are not subject to third party
confidentiality restrictions which Perot Systems is developing and any
appropriate information processing trends and directions of which Perot
Systems is aware.
3.9 Changes in Law and Regulations.
(a) Perot Systems shall identify and notify CalPX of any changes in any
laws or regulations applicable to Perot Systems or its operating
procedures that could adversely affect the use or delivery of the
Services. CalPX shall identify and notify Perot Systems of any changes
in any laws or regulations applicable to CalPX or its
10
operating procedures that require changes to the way in which the
Services are provided by Perot Systems. Perot Systems and CalPX shall
work together to identify the impact of any such laws or regulations
on how CalPX uses, and Perot Systems delivers, the Services. Each
party shall be responsible for any fines and penalties arising from
its failure to comply with any laws or regulations applicable to its
business operations relating to the delivery or use of the Services.
(b) If any changes in laws or regulations prevent Perot Systems from
performing its obligations under this Agreement, Perot Systems shall
(i) use commercially reasonable efforts to continue to. perform the
Services and (ii) develop and, upon CalPX's approval, implement a
suitable workaround for its obligations under this Agreement that
cannot be performed until such time as Perot Systems can perform its
obligations under this Agreement without such workaround. If the
applicable change in law or regulatory requirements is applicable to
Perot Systems, then Perot Systems shall develop and implement such
workaround at its own expense. If the applicable change in law or
regulatory requirements is applicable to CalPX and such change results
in additional costs to Perot Systems to perform its obligations under
this Agreement, then CalPX shall pay Perot Systems for its incremental
costs incurred in connection with making the appropriate changes as
part of the Base Services or as an Additional Service, as the case may
be.
3.10 Technical Standards. Perot Systems shall comply with 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 Customer Satisfaction.
(a) Within 90 days after the Effective Date, Perot Systems shall conduct a
survey to measure end-user satisfaction with the Services at each
CalPX site. The survey shall contain questions, and shall be
administered according to procedures, mutually agreed by CalPX and
Perot Systems within 60 days after the Agreement Date. Perot Systems
shall promptly share the results of each such survey with CalPX,
including, without limitation, copies of the user questionnaires
completed by any CalPX personnel.
(b) At least annually during the Term, Perot Systems shall conduct a
survey to measure end-user satisfaction with the Services and Perot
Systems' responsiveness to requests for Services at each CalPX site.
The survey shall contain questions to be agreed upon by CalPX and
Perot Systems no later than 30 days before the date on
11
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, CalPX may initiate at its
expense a third-party review of the Services being performed by Perot
Systems. If CalPX initiates such a review, CalPX shall, within five
business days after sending notice of such election, provide Perot
Systems with a list of three unbiased third party benchmarkers
acceptable to 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 Regular Improvement. Perot Systems shall, on a regular basis (1) identify
processes, techniques, equipment and software that could improve the
Services and Service Levels and (2) recommend for adoption or acquisition
non-confidential processes, techniques, equipment, software and tools used
by Perot Systems that could improve or lower the cost of CalPX's technology
operations. Perot Systems shall, from time to time, include the information
required by this Section 3.13 in appropriate reports provided to CalPX
under this Agreement.
Article 4
CalPX Responsibilities
4.1 Cooperation. CalPX shall keep Perot Systems informed, as reasonably
appropriate, about those aspects of CalPX's business that could reasonably
have a material effect on the demand for, or provision of, the Services.
CalPX shall cooperate with Perot Systems to
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 CalPX.
4.2 Access to Software.
(a) CalPX Proprietary Software. CalPX shall provide Perot Systems with
access to, and the necessary rights to operate, modify, and enhance,
its proprietary software listed in Part A of Schedule 4.2 and such
other proprietary software of CalPX as is necessary for Perot Systems
to perform its obligations under the Agreement ("CalPX Proprietary
Software"). CalPX shall pay any, access or other fees associated with
obtaining such rights to the CalPX Proprietary Software. CalPX shall
pay all license, maintenance and other fees associated with the CalPX
Proprietary Software.
(b) CalPX Vendor Software. CalPX shall provide Perot Systems with access
to, and the necessary rights to operate and, where necessary to
perform the Services to modify and to enhance, its vendor software
listed in Part B of Schedule 4.2 and such other vendor software as is
necessary for Perot Systems to perform its obligations under the
Agreement ("CalPX 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 CalPX Facilities. CalPX shall provide Perot Systems access to its
facilities and shall provide to all PSC Personnel performing Services at
such facilities, without charge, such office furnishings, janitorial
service, telephone service, utilities (including air conditioning) and
office-related equipment (including but not limited to personal computers
and related software, peripherals and supplies and facsimile machines),
supplies, and duplicating services as Perot Systems may reasonably require
in connection with the activities contemplated hereunder. Unless otherwise
agreed, CalPX shall not be obligated to provide such facilities for PSC
Personnel performing (i) Services at the RIMF (or another Perot Systems
data center), (ii) Business Consulting Services, or (iii) any Services on a
part-time basis, except as may be necessary on a short-term, shared basis.
CalPX shall procure and purchase at its sole cost and expense all the
necessary hardware and software of 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. CalPX agrees that such CalPX facilities
shall comply with all applicable laws and regulations. Access and equipment
requirements shall be handled through the Change Control Procedure. PSC
Personnel shall receive similar technologies to those currently in use or
contemplated at CalPX.
4.4 Access to Technology. CalPX shall provide Perot Systems with access to its
hardware, equipment, and technology related items and services listed in
Schedule 4.4 and such other hardware, equipment and technology related
items and services as otherwise reasonably necessary for Perot Systems to
perform its obligations under this Agreement (the "CalPX Technology").
CalPX shall pay all costs and expenses, including without limitation,
maintenance costs, associated with the CalPX Technology.
4.5 Required Improvements. CalPX shall implement, or cause to be implemented,
each of the process, infrastructure, testing and project management
improvements described in Schedule 4.5, and the initiation of the
maintenance windows set forth in Schedule 4.5 ("Required Improvements"). If
CalPX does not implement, or cause to be implemented the Required
Improvements, the provisions of Section 5.3(b) shall not apply until after
the Required Improvements have been implemented. The estimates of
additional expenditures, implementation times and requirements for
additional Full-Time Equivalent resources set forth in Schedule 4.5 as to
Required Improvements are subject to change in accordance with the Change
Control Procedures. CalPX agrees to provide funding for those Required
Improvements that require additional expenditures or additional external
resources. Upon the request of CalPX, Perot Systems agrees to provide the
additional external resources as Application Development and Business
Consulting Services under this Agreement. Expenditures for hardware,
software and third party services to implement the Required Improvements
shall be the responsibility of CalPX.
14
Articles
Payments to Perot Systems
5.1 Base Services Fees.
(a) During the Transition Period and thereafter until the Required
Improvements are completed, Perot Systems shall invoice CalPX on or
before the 10th day of each month the Calculated Services Fee for each
of the Core Services, the Application Development Services and the
Business Consulting Services provided during the previous month. After
the Transition Period and the Required Improvements have been
completed, Perot Systems shall invoice CalPX on or before the 10th day
of each month for (i) an amount equal to the Baseline Budget per month
for the Core Services to be provided during the following month, plus
(ii) the Calculated Services Fee for each of the Application
Development Services and the Business Consulting Services provided
during the previous month.
(b) After the Transition Period and the Required Improvements have been
completed, the invoice for the first month of each calendar quarter
shall reflect any credit due to CalPX, and any additional amount
payable by CalPX, for all adjustments to the previously invoiced
amounts that are required under this Agreement, including but not
limited to any adjustments required pursuant to Section 5.3 (the
"Quarterly True-Up"). Perot Systems shall not modify any previously
prepared Quarterly True-Up, subject to the provisions of Section 5.8.
5.2 Additional Services Charges. During the Term, CalPX shall pay Perot Systems
each month for the Additional Services the amounts agreed to by CalPX and
Perot Systems at the times agreed to by Perot Systems and CalPX. Additional
Services shall be provided on a time and materials basis using Perot
Systems' "Standard Commercial Rates", less a 25% discount. Perot Systems
may adjust the Standard Commercial Rates no more often than once per year,
beginning in the second year of the Term, with 60 days advance written
notice.
5.3 Performance Bonuses and Credits.
(a) CalPX and Perot Systems have established the "Baseline Budget" set
forth in Schedule 5.1, which represents CalPX's good faith projection
of the fixed and variable costs and expenses that would have been
incurred or paid by CalPX to perform the Core Services on a monthly
basis in the absence of this Agreement, minus a level of savings
projected in good faith to be achievable as a result of the Required
Improvements and other improvements initiated by Perot Systems. The
Baseline Budget shall be adjusted annually as provided in Section 5.6.
(b) If during any calendar quarter in which the Calculated Service Fees
for the Core Services (calculated in accordance with paragraph A of
Schedule 5.1) are less than the Baseline Budget for the Core Services,
as adjusted in accordance with Section
15
5.6, for that calendar quarter, then Perot Systems shall credit 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 Reimbursable Expenses. CalPX shall pay or reimburse Perot Systems for its
reasonable out-of-pocket travel and travel related expenses incurred in
connection with its performance of the Services that arise in connection
with any travel by the PSC Personnel outside of the greater Los Angeles
area requested by CalPX. Notwithstanding the preceding sentence, CalPX
shall not pay or reimburse Perot Systems for travel or travel-related costs
incurred by PSC Personnel assigned to perform the Base Services for travel
within the Los Angeles area. Unless otherwise agreed, any expenses shall be
reimbursed according to CalPX Expense and Reimbursement Policy, attached as
Schedule 5.4, as amended from time to time.
5.5 Taxes. There shall be added to any charges payable by CalPX under this
Agreement, and CalPX shall pay or reimburse to Perot Systems, amounts equal
to any taxes, however designated or levied based upon such charges, the
Services, or this Agreement, including state and local taxes, and any taxes
or amounts in lieu thereof paid or payable by Perot Systems in respect of
the foregoing, excluding franchise taxes and taxes based on the net income
of Perot Systems. Each party shall cooperate with the other in minimizing
any applicable tax and, in connection therewith, 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 Adjustment. If the Price Index at the end of each one year
period following the Effective Date ("Current Index") is higher than the
Price Index at the beginning of such one year period ("Base Index"), then,
effective as of the end of such one year period, all charges hereunder
shall be increased by the percentage that the Current Index increased from
the applicable Base Index. "Price Index" means the index entitled "Private
industry. Wages and Salaries, 12-Month Percent Change, Not Seasonally
Adjusted," published by the Bureau of Labor Statistics. If the publisher of
this index should stop publishing or substantially change the content or
format of the index, the parties shall substitute therefor another
comparable measure published by a mutually acceptable source; provided,
however, that if such change is merely to redefine the base year for the
Price Index to 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 CalPX of an invoice therefor. An invoice shall be deemed
to be received in accordance with the terms of Section 12.2, provided that
all invoices shall be addressed to the attention of the CalPX Chief
Financial Officer. CalPX shall deliver a CalPX check to the Account Manager
at CalPX's offices in Pasadena on the due date and Perot Systems shall not
charge CalPX for overnight courier. Amounts not paid when due shall incur
interest until paid at the lesser of (i) 1.5% per month, or (ii) the
maximum rate permitted by applicable law. If any amount not paid when due
under this Agreement is disputed in good faith, interest shall not begin to
accrue until the dispute has been resolved.
5.8 Audit of Charges. Within 30 days after the Effective Date, Perot Systems
and CalPX shall agree as to the documentation that Perot Systems will
provide to CalPX each month in support of its charges under this Agreement,
including reimbursable expenses. Upon notice from CalPX, Perot Systems
shall provide CalPX and its representatives (collectively, the "CalPX
Auditors") with access to such financial records and supporting
documentation as may reasonably be requested by the CalPX Auditors, and the
CalPX Auditors may audit reasonably appropriate books and records of Perot
Systems for the purpose of verifying that any amounts charged under this
Agreement with respect to the Services are accurate and in accordance with
this Agreement. If, as a result of such audit, CalPX determines that Perot
Systems has overcharged or undercharged CalPX, CalPX shall notify Perot
Systems of the amount of such overcharge or undercharge and Perot Systems
or CalPX, as the case may be, shall promptly pay the amount due. In
addition, if any such audit reveals an overcharge to CalPX of five percent
or more of the aggregate amount of the invoices audited, Perot Systems
shall reimburse CalPX for the cost of such audit.
5.9 Pass-Through Expenses. Perot Systems shall review all IT vendor invoices
for Pass-Through Expenses, including but not limited to invoices relating
to IT Procurement Services, to determine whether the charges reflected in
such invoices comply in all material respects with the applicable purchase
documentation or contract. After completing its review, Perot Systems shall
submit an invoice to CalPX for such FT vendor invoices, together with Perot
Systems' recommendation for payment, nonpayment, or partial payment, to
CalPX twice per month on or about the fifth and twentieth days of the month
for CalPX's review and payment. CalPX shall promptly review and pay the
invoices submitted to it (or advise Perot Systems' Account Manager that an
invoice is not approved, with an explanation of the reasons for not
approving the invoice).
5.10 Adjustment of Budget.
(a) During any 12-month period commencing as of the Effective Date, CalPX
may, in one or more installments, reduce the Baseline Budget (as
adjusted in accordance with Section 5.6) as of the beginning of such
12-month period by a percentage
17
amount up to a percentage equal to the sum of (i) 5% (the "Reduction
Percentage"), plus (ii) the aggregate number of percentage points, if
any, for all of the unused portions of the Reduction Percentages with
respect to all previous 12-month periods, provided that CalPX may not
exercise such right to reduce the Baseline Budget until after the
Transition Period and Required Improvements are completed. If during
any three calendar month period commencing after me 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 CalPX's reasonable
control.
(b) If CalPX elects to reduce the Baseline Budget as provided in Section
5.10(a), CalPX shall give Perot Systems at least (i) 90 days prior
written notice of any budget reduction of 5% or less of the applicable
Baseline Budget, (ii) 135 days prior written notice of any budget
reduction of 5% to 10% of the applicable Baseline Budget, and (iii)
180 days prior written notice of any budget reduction of more than 10%
of the applicable Baseline Budget. On the effective date of any
reduction in me Baseline Budget, Perot Systems shall have the right to
reduce the number of Full-Time Equivalent PSC Personnel performing
Core Services under this Agreement, and Perot Systems and CalPX shall
adjust the Service Levels and Schedule 7.8 as appropriate to reflect
the staffing adjustments.
5.11 No Other Charges. There shall be no other charges payable by CalPX other
than those stated in this Article 5, Schedule 5.1 and Schedule 5.2.
5.12 Fee Disputes.
(a) Within 30 days after receiving each invoice, CalPX shall give notice
to Perot Systems of any amount shown in such invoice that is
reasonably disputed in good faith by CalPX, which notice shall include
a reasonably detailed explanation of the disputed amount and the
grounds for the dispute. CalPX's failure to pay amounts disputed in
accordance with this Section 5.12 shall not be grounds for a claim of
breach or suspension of work by Perot Systems so long as CalPX
complies with the provisions of Section 5.12(b). CalPX shall pay any
amounts to Perot Systems within five business days after such amounts
are found to be payable to Perot Systems. If the aggregate disputed
invoiced amounts exceed $120,000, then 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 Unused Credits. Any unused credits against future payments owed to either
party by the other pursuant to this Agreement shall be paid to the
applicable party within 30 days after the expiration or termination of this
Agreement.
5.15 Retention of Records. Perot Systems shall retain records and supporting
documentation sufficient to document the Services and the fees paid or
payable by CalPX under this Agreement for a period of seven years after the
expiration or termination of this Agreement.
Article 6
Confidentiality, Proprietary Rights and Audit Rights
6.1 CalPX Data.
(a) All data and information (i) provided by or on behalf of CalPX to
Perot Systems in connection with the Services, (ii) obtained,
developed or produced by Perot Systems as part of the Services, or
(iii) to which Perot Systems has access as a result of providing the
Services ("CalPX Data") shall remain the property of CalPX or the
third party that owns such data and information. Perot Systems shall
use such CalPX Data solely in connection with the activities
contemplated by this Agreement. The CalPX Data shall be treated as
Confidential Information of CalPX under the Agreement. Perot Systems
hereby irrevocably assigns, transfers and conveys, and shall cause all
PSC Personnel to assign, transfer and convey, to CalPX without further
consideration all of its and their right, title and interest in and to
the 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 CalPX,
all or any part of the CalPX Data and (2) erase or destroy all or any
part of the CalPX Data in Perot System's possession, in each case to
the extent so requested by CalPX, except for (i) archive and backup
copies that are not readily accessible for use, and (ii) business
records required by law to be retained by Perot Systems. Any archival
and backup tapes
19
containing CalPX Data shall be deemed Confidential Information of
CalPX and subject to the provisions of Article 6 and shall be used by
Perot Systems only for back-up and audit purposes.
6.2 Confidential Information.
(a) Confidential Information. Each receiving party shall use at least the
same degree of care, but no less than a reasonable degree of care, to
avoid unauthorized disclosure or use of each disclosing party's
Confidential Information, including any third party Confidential
Information disclosed by the disclosing party, as it employs with
respect to its own Confidential Information of similar importance.
Each receiving party may disclose Confidential Information only to the
other party to this Agreement and its own officers, directors, and
employees and to its consultants, subcontractors and advisors who
reasonably need to know it. Each receiving party shall be responsible
to the disclosing party for any violation of this Agreement by its
officers, directors, employees, consultants, subcontractors or
advisors. No receiving party may print or copy, in whole or in part,
any documents or other media containing a disclosing party's
Confidential Information, other than copies for its officers,
directors, employees, consultants or advisors who are working on the
matter, without the prior consent of the disclosing party. No
receiving party may use a disclosing party's Confidential Information
for competing with the disclosing party or for any purpose not in
furtherance of this Agreement. The term "Confidential Information" is
defined to mean, with respect to CalPX and Perot Systems, all
information, documents, records and data, in whatever form or medium
(including, without limitation, (i) verbal statements summarized in
writing within 10 business days, (ii) printed and electronic forms,
(iii) handwritten notes or summaries, (iv) portions of any such items)
regarding each other party's (a "disclosing party") methodologies,
financial affairs, business activities and plans and records
identified as confidential in CalPX's tariff, operating manual and
Records Availability Policy communicated by a disclosing party to a
receiving party.
(b) Certain Permitted Disclosures. Each of Perot Systems and CalPX shall,
however, be permitted to disclose relevant aspects of the other
party's Confidential Information to its respective officers, agents,
subcontractors and employees to the extent that such disclosure is
reasonably necessary for the performance of its duties and obligations
under this Agreement; provided, however, that such party shall take
reasonable measures to prevent, and shall remain responsible for, the
disclosure of Confidential Information of the other party in
contravention of the provisions of this Agreement by such officers,
agents, subcontractors (except as otherwise specifically provided in
this Agreement) and employees.
(c) Disclosures Required by Law. If a receiving party is requested, as
part of an administrative or judicial proceeding, to disclose any of a
disclosing party's
20
Confidential Information, the receiving party shall, to the extent
permitted by applicable law, promptly notify the disclosing party of
such request and cooperate with the disclosing party in seeking a
protective order or similar confidential treatment for such
Confidential Information. The seeking of protective orders shall be at
the expense of the party whose Confidential Information is at issue.
(d) Exclusions. Confidential Information shall not include information
that (1) was known by the receiving party without an obligation of
confidentiality prior to its receipt from the disclosing party, (2) is
independently developed by the receiving party without reliance on
Confidential Information, (3) is or. becomes publicly available
without a breach of this Agreement by the receiving party, (4) is
disclosed to the receiving party by a third person who is not required
to maintain its confidentiality, or (5) is required to be disclosed by
reason of legal, accounting or regulatory requirements beyond the
reasonable control of the receiving party.
(e) Obligations upon Termination or Expiration. Promptly after the
expiration or termination of (his Agreement, except as provided in
Section 6.5 with respect to the Developed Software, each receiving
party shall return or, with the consent of the disclosing party,
destroy all of the disclosing party's Confidential Information,
including any third party Confidential Information in the hands of
either party, except for (i) archive and backup copies that are not
readily accessible for use, and (ii) business records required by law
to be retained by the receiving party.
21
(f) Certain Privileged Information. Perot Systems acknowledges that CalPX
may assert that certain documents, data and databases created by Perot
Systems as part of the Operations Services provided under this
Agreement and all communications related thereto (collectively,
"Privileged Work Product") are subject to certain privileges under
applicable law, including the attorney-client privilege, and may seek
to protect such Privileged Work Product from disclosure by Rule 26 of
the Federal Rules of Civil Procedure or other applicable rules or
laws. CalPX shall notify Perot Systems of any Privileged Work Product
to which Perot Systems has or may have access. After Perot Systems
receives such notice, Perot Systems shall use reasonable commercial
efforts to limit access to such Privileged Work Product solely to
those PSC Personnel for whom such access is required to fulfill Perot
Systems' obligations under this Agreement. If Perot Systems is
requested to provide any third party with access to Privileged Work
Product, Perot Systems shall, to the extent permitted by applicable
law, promptly notify CalPX and take, at CalPX's expense, such
reasonable actions as may be requested by CalPX to resist providing
such access. Perot Systems shall have the right, at CalPX's expense,
to retain independent legal counsel in connection with any such
request. If Perot Systems is ultimately required, pursuant to an order
of a court or other authority reasonably believed by Perot Systems to
be of competent jurisdiction, to disclose Privileged Work Product,
Perot Systems shall have no liability under this Agreement in
connection with such disclosure.
(g) Internal Audits. Perot Systems may periodically perform, or cause to
be performed, internal compliance reviews of its activities under this
Agreement. The specific findings of these reviews other than those
performed under this Agreement, whether performed by Perot Systems or
a third person, shall be deemed Privileged Work Product and Perot
Systems shall not be required to disclose such findings to CalPX under
any circumstances.
6.3 CalPX Proprietary Software. CalPX Proprietary Software shall be and remain
the property of CalPX, and Perot Systems shall have no rights or interests
therein except as required to perform the Services or as otherwise provided
in this Agreement.
6.4 Perot Systems Software and Perot Systems Tools.
(a) Any software that is proprietary to Perot Systems that Perot Systems
uses or to which Perot Systems provides CalPX access ("Perot Systems
Software") and any tools or methodologies which are proprietary to
Perot Systems and used in connection with the activities contemplated
by this Agreement ("Perot Systems Tools"), including any modifications
to any Perot Systems Software or Perot Systems Tools, shall be and
remain the property of Perot Systems, and CalPX 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 CalPX
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 me
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
CalPX, 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 me Services as of expiration or termination of this
Agreement.
6.5 Rights in Developed 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 me
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.
23
(b) All Perot Developed Software and related Documentation shall be owned
by Perot Systems. To the extent that any of the Perot Developed
Software and related Documentation is deemed a "work for hire" by
operation of law, except as otherwise provided in this Article 6,
CalPX hereby assigns, transfers and conveys, and shall cause CalPX
Affiliates and agents to assign, transfer and convey, to Perot Systems
without further consideration all of its and their right, title and
interest in and to such Perot Developed Software and related
Documentation including all rights of patent, copyright, trade secret
or other proprietary rights. CalPX acknowledges that Perot Systems and
the successors and permitted assigns of Perot Systems shall have the
right to obtain and hold in their own names such intellectual property
rights in and to the Perot Developed Software and related
Documentation. CalPX agrees to execute any documents or take any other
actions as may be necessary, or as Perot Systems may reasonably
request, to perfect Perot Systems' ownership of or register such
intellectual property rights in any Perot Developed Software and
related Documentation.
(i) Unless otherwise agreed in this Article 6, Perot Systems shall
grant and hereby does grant to CalPX, subject to the terms of
this Article 6 and the terms and conditions of any license or
similar agreement relating to third party Embedded Software, a
fully paid-up, worldwide, non-exclusive, non-transferable
(except as provided in this Agreement) and perpetual license to
use, copy, maintain, and modify the Perot Developed Software,
Embedded Software and related Documentation for CalPX's use in
connection with its own operations. For purposes of this Section
6.5, CalPX's operations shall include the operations of any
Affiliate of CalPX and other third parties (i) to whom CalPX
provides services in addition to any sublicense of software; or
(ii) in whom CalPX has an ongoing equity interest ("CalPX
Partners"). CalPX shall be permitted to sublicense such rights
to its Affiliates and CalPX Partners. The license granted in
this paragraph shall include a non-transferable (except as
provided in the Agreement) and perpetual license to use and
practice any and all inventions of Perot Systems embedded in any
Perot Developed Software, Embedded Software or related
Documentation (including those covered by patents and patent
applications at any time).
(ii) Perot Systems shall provide CalPX with one or more copies of the
source code, source code documentation, and other documentation
that is reasonably necessary to enable CalPX to enjoy the
benefits of the license granted in this Article 6.
(iii) Unless otherwise specifically agreed in writing by CalPX, Perot
Systems shall not license or otherwise use, copy, maintain or
modify, or authorize any third party to use, copy, maintain or
modify Work Product that is prepared under this Agreement to
provide or market electricity services in any Restricted
Territory (defined below), during the period while the Work
24
Product is being developed and for a period of one (1) year
following the expiration or termination of this Agreement. For
purposes of this paragraph, the term "Restricted Territory"
means the geographic region covered on the Effective Date by the
Western Systems Coordinating Council (WSCC), the Electric
Reliability Council of Texas (ERCOT), or the Southwest Power
Pool (SPP).
(c) The term "Embedded Software" is defined to mean pre-existing software
that is licensed by CalPX or Perot Systems from a third party or owned
by Perot Systems that is embedded in or is necessary to operate the
Developed Software. Perot Systems shall retain its rights to any
Embedded Software that is owned by Perot Systems, but grants to 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 CalPX under this Agreement. CalPX desires Perot Systems
to apply its Know-How in connection with the Services, and
acknowledges that performance of the Services shall enhance and expand
the Know-How. Accordingly, Perot Systems may (1) develop or
distribute products or perform services similar to the Work Product
(including the Deliverables and the Documentation), and (2) use its
Know-How to develop or distribute products or to perform services for
any other person, provided that (i) no such activity violates the
other provisions of this Article 6, (ii) the Know-How does not contain
any Confidential Information of CalPX and (iii) use of the Know-How
does not misappropriate any trade secret rights or infringe upon any
other copyright, patent or other proprietary rights of CalPX. To the
extent necessary to enjoy the rights described in this Section 6.6,
Perot Systems shall retain, whenever intellectual property rights are
assigned to 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 mat form the basis for the Work Product (but not the
copyright in the Work Product derived from the template).
25
<Table>
Manta Ray 1.0
Over Generation Mitigation 1.0
Real Time Data Collection 1.0
Real Time Reporting System 1.0
Settlement Reporter (PXSR/TO Debit) 1.1
Zonal Price Calculators (DA & HA) 1.1.9
Zonal Price Checker (DA &HA) 1.0
Shared Resource Trading & Scheduling (Shark) 1.0
</Table>
Schedule 4.2 - Page 7
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
CalPX UNIX System Configuration
Alhambra, CA. UNIX Server Inventory (Tentative)
[GRAPHIC OMITTED]
Schedule 4.4-Page 3
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 1
4. Remedy Custonuzation/Implementation/Training
The Remedy(TM) software that Perot Systems uses for problem and change
management must be customized to support the CalPX's specific requirements, m
addition, the escalation process used to support the CalPX's business must be
automated.
This process shall improve the notification and response of technicians when
warning or alerts are issued by Systems.
After the Remedy(TM) software is customized, it must be implemented- in the
CalPX's environment to provide access to all authorized PSC Personnel,
including Transitioned Employees, and all authorized CalPX personnel. Each of
the authorized users must be trained to use this software.
This process shall improve the notification and response of technicians when
warning or alerts are issued by Systems.
Estimated PSC Personnel Requirements above Baseline: None
5. HP Firmware Updates
All Hewlett-Packard servers and system components must be inventoried to
determine its current firmware-version and, if necessary, upgraded to the
most current firmware version that is commercially available.
Upgrading to the latest firmware versions may resolve issues such as data
corruption, missing interrupts and lost data chains. In addition, these
upgrades should increase reliability and availability. Perot Systems shall
manage HP to complete this Required Improvement under the current agreement
between CalPX and HP.
Estimated PSC Personnel Requirements above Baseline: None
6. Review Backup and Archive Strategies CalPX backup and archive strategies must
be reviewed and updated, if necessary.
Perot Systems shall review the CalPX's requirements for application and data
backup and archival. The methods and tools currently being used to meet these
requirements must be reviewed for compliance.
As appropriate, Perot Systems shall specify changes in these requirements,
methods and tools to manage these requirements more effectively across the
CalPX's Systems. Perot Systems shall review with CalPX the work that must be
done to establish the most appropriate frequency and methodology to meet
CalPX's data recovery requirements.
Schedule 4.5 - Page 2
Estimated PSC Personnel Requirements above Baseline: None
7. Implement Program/Project Management Office
CalPX must implement and use the Program Office/Project Management processes
and procedures to effectively manage programs and projects.
Estimated PSC Personnel Requirements above Baseline: None 8. Implement
Change Management Methodology
CalPX must implement the Change Control Procedure for all proposed Changes.
CalPX must also implement the Change Control Board and the IT Steering
Committee.
Estimated PSC Personnel Requirements above Baseline: None
9. Add CalPX IT Operations to Automated Call Distributor (ACD)
The Automated Call Distributor (ACD) system used by Perot Systems must be
used to manage the help desk.
This system must be implemented to provide the capability to efficiently
distribute calls throughout the enterprise and report the call volumes,
service time, queue time, and average talk time. These metrics are critical
when forecasting future operational service levels and requirements. As part
of implementing this Improvement, Perot Systems shall manage CalPX vendor to
implement the required improvement.
Estimated PSC Personnel Requirements above Baseline: None
10. Plan and Implement Consolidated Test Environment
The physical architecture that shall support the testing environment and the
required software and tools necessary to manage production promotion from
one environment to the next (i.e. development to test, test to model office
and model office to production) must be planned, designed and implemented.
Also included in this Required Improvement is planning and implementation of
configuration management/release procedures and the required tools. Test
procedures that describe how applications are to be tested and promoted
through the testing environments, server code, database objects, CalPX based
applications and the tracking of application source code must also be
developed and implemented.
Estimated PSC Personnel Requirements above Baseline: 16 FTE-months.
Schedule 4.5 - Page 3
11. Commercial Disaster Recovery Hot Site
Procedures and systems to be followed to prevent avoidable System failures
and to minimize the adverse effects of unavoidable System failures and
Disasters must be planned, designed and implemented. Disaster Recovery Plans
must be established and implemented via a Commercial Disaster Recovery
Vendor/Site or otherwise. Test Plans must be established, and tests
periodically completed.
Estimated PSC Personnel Requirements above Baseline: 12 FTE-months.
12. Sybase SQL Server Software Level Upgrade - (before Titan goes into
production)
The Sybase SQL Server software installed on each of the servers listed in
Schedule 4.1 must be upgraded to the most current version.
This upgrade is required to ensure continued vendor product support, improve
performance through enhanced concurrency and tuning options, and simplify
administration by standardizing on a single product release.
Estimated PSC Personnel Requirements above Baseline: 14 FTE-months.
13. IT Security
Develop and implement an IT security plan which shall address the following
issues:
- End user security awareness
- Physical security issues
- UserID security issues
- Password security issues
- Policies - Expanding the existing policies to cover specific standards
for systems and "User Guides" for use in the End user security awareness
program.
- Auditing
- Recommendations for an audit log structure
- Enterprise Security Software
- Information of currently available 3rd party security management software.
- Topology-A mapping of systems at CalPX.
- Role Based Access - Data received in other areas can be used for a high
level (not detailed) role based access matrix.
Estimated PSC Personnel Requirements above Baseline: 30 FTE-months.
Schedule 4.5 - Page 4
SCHEDULE 5.1
Service Charges
A. Fees for Base Services.
The rates set forth below shall be adjusted annually in accordance with Section
5.6 of the Agreement.
Service Fee for Core Services:
Perot Systems shall calculate a monthly services fee ("Calculated Services Fee")
by multiplying (i) the actual number of person-hours of Core Services performed
by PSC Personnel during such month, divided by 139 (to determine the number of
Full-Time Equivalent PSC Personnel), by (ii) the Core Services Rate.
B. Baseline Budget for Core Services \
Months one to 12 inclusive: . $ 733,100/month
Months 13 to 36 inclusive: $ 749,250/month
The Core Services Rate for PSC Personnel is $ 16,650.00 per month for each
Full-Time Equivalent.
C. Fees for IT Procurement Services
As consideration for the IT Procurement Services, CalPX shall pay Perot Systems
an administrative fee equal to 6.0% of the actual third-party cost, including
the cost of freight, insurance, taxes or other similar charges, of purchasing,
leasing or licensing any equipment, software or services.
D. Fees for Applications Development Services and Business Consulting
Services
As consideration for the Applications Development Services, CalPX shall pay
Perot Systems a monthly services fee ("Calculated Services Fee") equal to the
sum of (A) the minimum monthly fee set forth below for the core number of
Full-Time Equivalent PSC Personnel available to perform Applications Development
Services, and (B) the amount, if positive, determined on a time and materials
basis by multiplying (i) the actual number of person-hours of Applications
Development performed by PSC Personnel, divided by 139 (to determine the number
of Full- Time Equivalent PSC Personnel), less the core number of the Full-Time
Equivalent PSC Personnel made available by Perot Systems to provide Applications
Development Services (to determine the number of Full-Time Equivalent PSC
Personnel above the core Resources available to perform Applications Development
Services), by (ii) the applicable rate from the table set forth below.
Schedule 5.1-Page 1
As consideration for the Business Consulting Services, CalPX shall pay Perot
Systems a monthly services fee ("Calculated Services Fee") equal to the sum of
(A) the minimum monthly fee set forth below for the core number of Full-Time
Equivalent PSC Personnel available to perform Business Consulting Services, and
(B) the amount, if positive, determined on a time and materials basis by
multiplying (i) the actual number of person-hours of Business Consulting
performed by PSC Personnel, divided by 139 (to determine the number of Full-Time
Equivalent PSC Personnel), less the core number of the Full-Time Equivalent PSC
Personnel made available by Perot Systems to provide Business Consulting
Services (to determine the number of Full- Time Equivalent PSC Personnel above
the core Resources available to perform Business Consulting Services), by (ii)
the applicable rate from the table set forth below.
The core number of Full-Time Equivalent PSC Personnel that Perot Systems shall
make available to perform (i) Applications Development Services shall be (a) 11
Full-Time Equivalent PSC Personnel during the first year of the Term, (b) seven
Full-Time Equivalent PSC Personnel during the first eight months of the second
and third years of the Term, and (c) eight Full-Time Equivalent PSC Personnel
during the ninth through twelfth months of the second and third years of the
Term, and (ii) Business Consulting Services shall be two and one half (2.5)
Full-Time Equivalent PSC Personnel for the first 36 months of the Term. If CalPX
requires or uses more services, the rates shall be as set forth based on the
rate schedule below.
E. Rates for Applications Development Services
Minimum Monthly Fee for core Resources:
Month one to 12 inclusive: $250,000/month
Month 13 to 20 inclusive: $159,090/month
Month 21 to 24 inclusive: $181,830/month
Month 25 to 32 inclusive: $159,090/month
Month 33 to 36 inclusive: $181,830/month
Monthly Rate for additional Full-Time Equivalent PSC Personnel to Perform
Applications Development Services
Additional Resources committed for minimum of 12 Months: $ 22,730/month
Additional Resources committed for less than 12 Months: $ 27,040/month
F. Rates for Business Consulting Services
Minimum Monthly Fee for core Resources:
Month one to 36 inclusive: $ 59,660 / month
Monthly Rate for additional Full-Time Equivalent PSC Personnel to Perform
Business Consulting Services (except for any Full-Time Equivalent Personnel who
have the positions listed in Schedule 5.2).
Schedule 5.1 -Page 2
Additional Resources committed for minimum of 12 Months: $ 29,200/month
Additional Resources committed for less than 12 Months: $ 32,050/month
G. Changes in Baseline Budget
All changes, except as set forth in the Agreement, in Baseline Budget shall be
mutually agreed to by both parties in accordance with the Change Control
Procedure.
The Baseline Budget for the Core Services has been agreed to by Perot Systems
based on a number of key assumptions, including those listed below. If any of
these key assumptions are incorrect, CalPX and Perot Systems shall negotiate an
appropriate adjustment to the Baseline Budget for the Core Services as soon as
practical after determining that the assumptions are incorrect.
- CalPX shall introduce into production the Titan Application (CalPX
settlements calculation application) on or before May 1,2000.
- CalPX shall not require support for parallel operation of the Titan
Application and its existing suite of settlements applications for more
than 2 months.
- CalPX shall retire the PEP+ and POP applications on or before July 1,
2000.
Schedule 5.1-Page 3
SCHEDULE 5.2
Perot Systems Standard Commercial Rates
Perot Systems standard commercial rates as of the Effective Date are set forth
below.
<Table>
<Caption>
Consulting Hourly Daily Monthly
Senior Advisor N/A $7,000.00 $152,000.00
Principal N/A $5,000.00 $108,500.00
Senior Engagement Manager N/A $4,000.00 $ 87,000.00
Senior Consultant N/A $3,000.00 $ 65,000.00
</Table>
All rates are for services only. Travel and other out-of-pocket expenses are not
included.
Schedule 5.2-Page 1
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.
PROCEDURES
DOCUMENTATION
All elements of the expense report must be completed with original invoices or
receipts attached. The only exception to the original invoice requirement is for
airline tickets booked through the Internet (Southwest Airlines only), where a
print out of the download from the Internet will be accepted as an original
invoice. This print out must include the name of the traveler, the dates of
travel, the flight numbers, the departure and destination cities, and the amount
paid. Documentation is required for each expense item in excess of $35.00. For
expenses in excess of $35.00 that are not supported by a receipt, a memo to the
Chief Financial Officer and Controller should be attached explaining why
required procedures were not followed. Reimbursement of these expenses will be
at discretion of the Chief Financial Officer and Controller. Each individual
expense must include 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.
APPROVALS
Schedule 5.4 - Page 1
Employees may be required to complete a Travel Authorization form prior to
leaving on a business trip. Use of this document is subject to the discretion of
department senior management. Employees are required to adhere to Travel
Authorization procedures established at the department level. No one is allowed
to approve his or her own expenses and must have their reimbursement request
approved by their supervisor. Expense reports may not be approved by a peer of
the employee's supervisor. The Audit Committee of the Governing Board will
direct the Internal Auditor to review the CEO's expense reports.
TYPES OF EXPENSES
Transportation
Air Travel
Employees are expected to use commercial air travel. Use of charter aircraft
or personal aircraft is not allowed to conduct California Power Exchange
business. Airfare may be booked through a travel agent the Internet, or
directly with the Airline. All airfare must be charged to either the company
American Express or Diners Club card. Employees are responsible for paying
these charges to the credit card company. Employees should always strive to
travel at the lowest available fare. If the lowest available fare is not
utilized, the employee must indicate the reason on the expense report. If
coach fare is not available, an explanation must be documented on the expense
report form. Employees may fly business class for scheduled flights more than
three hours in duration. For scheduled flights less than three hours in
duration, employees are expected to book coach level fares. The company will
not reimburse employees for flying first class. Employees are not allowed to
purchase upgradable coach fares so that first class upgrade certificates can
be used. In addition, the CalPX will not reimburse employees for the cost of
first class upgrade certificates. If an employee chooses to upgrade to first
class travel, only the lowest available coach fare will be reimbursed. Travel
should not be scheduled to earn frequent flyer awards at the detriment of the
California Power Exchange. Frequent flyer awards are the property of the
employees. Expenses will only be reimbursed after travel is completed.
Receipts showing the total price must be included for reimbursement.
Car Rental
Car rental should be limited to use when alternative transportation such as
taxi or shuttles is not available or not economical. Receipts showing the
total price must be included for reimbursement. Car rental reservations may
be made either through a travel agent, the Internet, or directly with the
rental car company. Compact or intermediate cars should be rented based on
the
Schedule 5.4-Page 2
number of employees traveling. Employees should make good judgements as to
the gasoline options offered with the rental car.
The California Power Exchange carries liability and vehicle damage insurance
that protects the CalPX when employees rent vehicles while on CalPX business.
Employees must indicate on the rental form the California Power Exchange 's
name to put this insurance into effect. The 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 CalPX business, the employee must contact the Chief
Financial Officer and Controller immediately so that claims may be processed
with the CalPX carrier. If an employee rents a vehicle while on California
Power Exchange business, and extends its time at either the beginning or end
of the trip for personal reasons, the CalPX insurance only covers the time
related to CalPX business. Employees are responsible for the cost of vehicle
insurance while using it for personal use.
Business use of Personal Vehicles
When it is necessary for employees to use their personal vehicle for
business purposes, reimbursement of mileage will be made in lieu of other
vehicle charges such as gas and oil, insurance, financing costs or other
wear and tear. The currently approved IRS reimbursement rate will be used.
No reimbursement will be made for employees' normal commuting to their
assigned work location. Requests for reimbursement of business mileage
should reflect a reduction of normal commuting miles.
Parking. Tolls and Other Costs
Parking, taxi, shuttle, tolls, tips and other expenses in excess of $35.00
must be supported by a receipt. Cost of parking fines or other driving
citations will not be reimbursed.
Lodging
Aggregations of multiple days stay
Employees may enter multiple days stay as one line on the report, provided
the supporting documentation clearly shows the daily rate and taxes
applicable. The original receipt from the hotel or motel must be attached.
Meals, tips, telephone, parking or other charges on the hotel or motel
bill must be shown in the proper area of the expense report. 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
Employee Meals
Employees' expenses for meals are expected to be reasonable given the
location. Expenses in excess of $35.00 per meal must have receipts showing
the name of the establishment and the total amount of the meal including tip.
Tips should be included in determining the $35.00 amount and be shown as part
of the meal costs.
Business Meals
These expenses must constitute an ordinary and necessary business expense.
Expenditures should not be lavish or extravagant. Employees must document the
business purpose of the meal, the name of the restaurant, and include the
names, titles and the name of the company for all in attendance.
Entertainment
When it is necessary to entertain customers or other business associates
of the California Power Exchange in connections with the conduct of
business, documentation as to the nature of the entertainment,
participants (by name, title and company name), location, and business
purpose is required.
Non-Reimbursable Expenses
m general, expenses of a personal nature, that are unreasonable or
excessive, and that not specifically related to the conduct of the
business activities of the California Power Exchange are not
reimbursable. Examples of specifically excluded costs are spousal travel
expenses, excessive alcoholic beverages, flowers, other gifts for
employees, credit card fees or interest charges, memberships in travel
clubs or other airport services. Employee meals, other than for out of
town travel, are not reimbursable This exclusion includes employee
working meals which will not be reimbursed. When employees are having a
meal, the most senior employee, officer or director should report the
expense so that no one approving expenses for reimbursement would be
approving a meal in which they participated.
Schedule 5.4-Page 4
SCHEDULE 7.3
Supplementary Procedures for California Power Exchange Disputes
1. Applicability
(a) The Supplementary Procedures for California Power Exchange Disputes
(hereinafter, "the Procedures") shall apply to all cases administered by the
American Arbitration Association (hereinafter, "AAA") under its Commercial
Mediation Rules and its Commercial Arbitration Rules in which a claim is made
arising out of the Power Exchange Operating Agreement and Tariff
(hereinafter, "the Tariff') filed with the Federal Energy Regulatory
Commission (hereinafter, "FERC"). The Procedures are designed to complement
the Commercial Mediation Rules and the Commercial Arbitration Rules; to the
extent that there is any variance between those rules and the Procedures, the
Procedures shall control. ,'
(b) The parties to any arbitration proceeding that is to be subject to the
Procedures may, by written consent of all parties, agree to eliminate, modify
or alter any of the Procedures, and, in such case, the Procedures as so
modified or altered shall apply to that particular case.
(c) Except as limited below or otherwise as limited by law (including the
rights of any party to file a complaint with FERC under the relevant
provisions of the Federal Power Act (hereinafter, "FPA"), the Procedures
shall apply to all disputes between parties which arise under the Tariff. The
Procedures shall not apply:
(1) where the decision of the California Power Exchange
(hereinafter, "PX") is stated in the provisions of the Tariff to be final;
(2) where the PX is bound, as a Scheduling Coordinator under the
California Independent System Operator Agreement and Tariff, by a final
determination of the California Independent System Operator ("ISO"), in which
case the final determination of the ISO shall be binding on all PX
Participants;
(3) to disputes arising under existing contracts which pre-date the
creation of the PX, except as the disputing parties may otherwise agree; or
(4) to disputes as to whether rates and charges set forth in the PX
Tariff are just and reasonable under the FPA.
(d) If a party to a dispute is a government agency, application of the
dispute resolution process procedures shall be subject to any limitations
imposed on the agency by law, including, but not limited to, the authority of
the agency to effect a
Schedule 7.3 - Page 1
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 statements) 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 statements) 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 arbitrators) appointed to hear the case.
10. Selection of the Arbitrators)
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 often (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 (10th) 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 aud Arbitrators
The designated mediator or arbitrators) 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 petitioners) 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 arbitrators) 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, tlie parties' written agreement shall prevail. ;
13. Remedies
(a) "Baseball" Arbitration If all of the parties agree to conduct the
arbitration "baseball" style, each party shall submit to the arbitrator(s)
and exchange with each other their last best offers in the form of the award
they believe the arbitrator(s) should make, not less than seven (7) days in
advance of the date fixed for the hearing, or such other date as the
arbitrator(s) may decide. If a party fails to submit its last best offer in
accordance with this Section, that party shall be deemed to have accepted the
offer proposed by the other party. The arbitrator(s) shall be limited to
awarding only one of the proposed offers, and may not determine an
alternative or compromise remedy.
(b) Arbitrator's Discretion Unless all of the parties agree to conduct the
arbitration "baseball" style, the arbitrators shall have the discretion to
grant the relief sought by a party, or determine such other remedy as is
appropriate. Unless otherwise expressly limited herein, the arbitrators shall
have the authority to award any remedy or relief available from FERC, or any
court of competent jurisdiction. Where any PX Document allows the parties to
reach an agreement on a matter at some future time and provides that defaults
or disputes shall be referred to the PX ADR Procedures, the arbitrators)
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
arbitrators) does not have a good faith basis in either law or fact. If the
arbitrators) 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 arbitrators) 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
arbitrators) 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
arbitrators) and may be modified pursuant to Section 12 of the Procedures.
The arbitrators) 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 arbitrators) shall compile a complete
evidentiary record of the arbitration hearing (mat 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 arbitrators) 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 ofPX 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 arbitrators)
may consider relevant decisions in previous arbitration proceedings. A
summary of the disputed matter and the decision of the arbitrators) 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 ofPX 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 ofPX 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 arbitrators) 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
arbitrators) 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 arbitrators)
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 11
(a) If a party to an arbitration desires to appeal an award, that party shall
provide a notice of appeal to the PX and all parties within fourteen (14)
days following the date of the award. The PX shall publish within fourteen
(14) days' notice of the appeal in the PX newsletter or electronic
bulletin board, or any other method adopted by the PX ADR Committee.
Within ten (10) days of filing the notice of appeal, the appellant must
file an appropriate application, petition or motion with FERC to trigger
review under the FPA or with a court of competent jurisdiction. Such
filing shall state that the subject matter had been the subject of
arbitration pursuant to the Tariff.
(b) Within thirty (30) days of the notice of appeal (or such other period as
FERC or the court of competent jurisdiction may specify) the appellant
shall file the complete evidentiary record of the arbitration and a copy
of the award with FERC or with the court of competent jurisdiction. The
appellant shall serve copies of a description of all materials included in
the submitted evidentiary record on the PX and all parties.
(c) Implementation of the award shall be deemed stayed pending an appeal
unless and until, at the request of a party, the FERC or the court of
competent jurisdiction to which an appeal has been filed issues an order
dissolving, shortening, or extending such stay. However, a summary of each
appeal shall be published in the PX newsletter or electronic bulletin
board, or any other method adopted by the PX ADR Committee.
(d) FERC orders resulting from appeal shall be subject to judicial review
pursuant to the FPA.
Schedule 7.3-Page 12
EXHIBIT A
FEE SCHEDULE
1. Mediation Services.
$150.00 per party filing fee.
- plus compensation per hour for the mediator split by the parties
(hourly rate of compensation will vary depending upon the mediator
selected.
- plus $75.00 per hour surcharge per hour of mediator service (split by
the parties to cover AAA's administrative services). I
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.
i
2. Arbitration Services. AAA's Commercial Arbitration administrative fees
are based on the amount of the claim or counterclaim. Arbitrator
compensation is additional. Unless the parties agree otherwise,
arbitrator compensation and administrative fees are subject to allocation
by the arbitrator in the final award. Services in respect of intervention
requests shall be paid pursuant to Section 3 of this Exhibit A.
a. Filing Fees. A nonrefundable filing fee is payable in full by the
filing party when a claim, counterclaim or additional claim is filed,
as follows:
Amount of Claim Filing Fee
Up to $10,000 $ 500.00
Above 10,000 to $50,000 750.00
Above $50,000 to $100,000 1,250.00
Above $100,000 to $250,000 2,000.00
Above $250,000 to $500,000 3,500.00
Above $500,000 to $1,000,000 5,000.00
Above $1,000,000 to $5,000,000 7,000.00
When no amount can be stated at the time of filing, the minimum fee is
$2,000, subject to increase when the claim or counterclaim is
disclosed. The minimum filing fee for any case having three
arbitrators is $2,000. When a claim or counterclaim is not for a
monetary amount, AAA shall determine an appropriate filing fee.
Schedule 7.3-Page 13
The administrative fee for claims in excess of $5,000,000 will be
negotiated with the parties to the dispute.
The expedited procedures outlined in sections 53-57 of the Commercial
Arbitration Rules (as modified herein) shall apply in any case where
no disclosed claim or counterclaim exceeds $50,000, exclusive of
interest and arbitration cost. Those procedures provide for
arbitrators to be directly appointed by AAA. If the parties desire to
chose an arbitrator as provided in Section 7.3.1.1 of the PX Tariff, a
service charge of $150 will be payable by each party.
b. Hearing Fees. For each day of hearing held before a single arbitrator,
an administrative fee of $ 150 is payable by each party. For each day
of hearing held before a multi-arbitrator panel, an administrative fee
of $250 is payable by each party. There is no AAA hearing fee for the
initial Procedural Hearing. There is no hearing fee for the initial
hearing in cases in which no party's claim exceeds $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. Suspension for Nonpayment. If arbitrator compensation or
administrative charges have not been paid in full, the administrator
may so inform the parties in order that one of them may advance the
required payment. If such payments are not made, the arbitrator or
arbitrator panel may order the suspension or termination of the
proceedings. If no arbitrator has yet been appointed, the
administrator may suspend the proceedings.
3. Intervention Services. There will be no additional charge if an
intervention request is not challenged. If the request for intervention
is challenged by a party to the dispute, the following fee schedule shall
apply:
- Each challenger and each challenged intervenor shall pay a $ 150 fee
(even if parties make joint filings)
- plus compensation per hour for the arbitrator split between the
intervenor(s) being challenged and the challenger(s) (compensation
rate will vary depending upon the arbitrator selected)
- plus $75 surcharge per hour of arbitrator compensation split by the
intervenor being challenged and by the challenger(s) (to cover AAA
administrative costs).
Schedule 7.3-Page 14
- 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.
- After an intervention request has been granted, the intervenor shall
file a statement of claim. If the intervenor seeks separate monetary
relief the intervenor shall pay the filing fee set forth in Section 2
of this Exhibit A with respect to arbitration issues.
Schedule 7.3-Page 15
SCHEDULE 7.8
Disruption of Critical Services
Perot Systems is providing Services that support the Critical Services set forth
below. In the event any of these Critical Services become unavailable
("disruption"), Perot Systems shall (in addition to its other obligations under
this Agreement) make all reasonable commercial efforts, as applicable, to
promptly restore functionality of such Critical Services through workarounds or
transfer of operations to the disaster recovery site. In the event Perot Systems
is not able to restore the Critical Services within such cure period, CalPX
shall, in addition to any other rights or remedies under this Agreement, have
the rights set forth in Section 7.8 of this Agreement.
This schedule may be revised from time to time by amending this Agreement.
<Table>
<Caption>
No. of Disruptions in a
Critical Service Cure Period 6 Month Time Period*
Day Ahead Trading 48 hours 3
Day Ahead Scheduling 48 hours 3
Day-Of Trading 72 hours 3
Hour-Ahead Scheduling 72 hours 3
Real-Time Operations 72 hours 3
Block Forward Trading 72 hours 3
Metering 168 hours 3
Settlements 168 hours 3
Billing 168 hours 3
Dispute Resolution 168 hours 3
Participant Registration 72 hours 3
Master File Update 72 hours 3
</Table>
Schedule 7.8 - Page I
(b) Perot Systems acknowledges that, prior to the Effective Date, CalPX
and its employees have acquired, conceived, developed or licensed,
and after the Effective Date shall continue to acquire, conceive,
develop or license, certain Know-How. Perot Systems acknowledges and
agrees that nothing in this Agreement shall restrict in any manner
the right of CalPX to use any such Know-How in any manner.
6.7 Audit of CalPX's Business. Perot Systems shall provide reasonable support
to 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 CalPX 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 Security. Perot Systems shall establish and maintain mutually agreed
safeguards against the destruction, loss, or alteration of the CalPX Data
in the possession of Perot Systems. Perot Systems shall only have access
to the CalPX production data on an as-needed basis, m 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 Security Procedures. Perot Systems shall maintain and enforce
mutually agreed physical security standards and procedures at each of the
service locations and comply with CalPX environmental and physical
security procedures in effect at the CalPX service locations.
6.10 Security Relative To CalPX 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 Dispute Resolution. If any continuing dispute between the parties is not
resolved after reasonable attempts to resolve such dispute are made by
either party, then, upon the written request of either party, each party
shall appoint an officer who does not spend most of his or her time on
activities relating to this Agreement, to meet with the other party's
officer for the purpose of resolving the dispute. The officers shall
negotiate in good faith to resolve the dispute without the necessity of
any formal proceeding. During the course of such negotiations, all
reasonable requests made by one party to the other for information shall
be honored.
7.3 Arbitration. Any dispute that is not resolved through negotiation
pursuant to Section 7.2 shall be settled through mandatory binding
arbitration in accordance with the dispute resolution procedures
described in Schedule 9 of CalPX's Tariff and the CalPX's "Supplemental
Procedures for California Power Exchange Disputes", as shown in Schedule
7.3 (the Supplemental Procedures for California Power Exchange Disputes)
administered by the American Arbitration Association, as amended from
time to time (which tariff provisions are incorporated into and made part
of this Agreement as if set forth in full). Such arbitration shall be
final and binding in accordance with the following:
(a) American Arbitration Association Rules. Except as specified below or
otherwise agreed in writing, the arbitration shall be conducted in
accordance with the then- current Commercial Arbitration Rules of
the American Arbitration Association.
(b) Demands and Counterclaims. Any demand for arbitration or any
counterclaim shall specify in reasonable detail the facts and legal
grounds forming the basis for the claimant's request for relief, and
shall include a statement of the total amount of damages claimed, if
any, and any other remedy sought by the claimant.
(c) Panel and Location. The arbitration shall be conducted by an
arbitration panel consisting of a single neutral arbitrator selected
in accordance with those Commercial Arbitration Rules. The
arbitration proceedings shall take place in Los Angeles, California.
(d) Panel Actions. The arbitration panel may render awards of monetary
damages, direction to take or refrain from taking action, or both.
However, the arbitration panel may not award monetary damages in
excess of the damages allowed pursuant
27
to Article 8 or 9. The arbitration panel may, at its discretion,
require any party to the arbitration to reimburse any other party to
the arbitration for all or any part of the expenses of the
arbitration paid by the other party and the attorneys' fees and
other expenses reasonably incurred by the other party in connection
with the arbitration. Judgement upon the award rendered in the
arbitration may be entered in any court of competent jurisdiction.
7.4 Termination for Cause. If either party (i) breaches any of its material
obligations under this Agreement (excluding CalPX's obligation to pay
Perot Systems) or (ii) repeatedly breaches any of its other obligations
and the effect of any such repeated breaches is material, and the
breaching party fails to cure any such breach within 30 days (or such
longer period, not to exceed 60 days, if such breach can not be
reasonably cured within such 30 day period and the breaching party
commences to cure such breach upon receipt of notice and diligently
pursues a cure for such breach) after receipt of written notice from the
other party identifying such breach, then the nonbreaching party may
terminate this Agreement by providing the breaching party with prior
written notice of termination.
7.5 Termination for Non-Payment. If CalPX fails to pay Perot Systems any
undisputed amounts due hereunder and fails to cure such nonpayment within
10 days after receipt of written notice from Perot Systems identifying
such nonpayment, then Perot Systems may terminate this Agreement by
providing CalPX with prior written notice of termination.
7.6 Termination for Insolvency. ANY LICENSE CONTEMPLATED BY THIS AGREEMENT
SHALL BE DEEMED AN EXECUTORY CONTRACT UNDER SECTION 365(n) OF TITLE 11 TO
THE U.S. BANKRUPTCY CODE AND SHALL REMAIN IN FULL FORCE AND EFFECT UPON
THE LICENSEE'S ELECTION AND THE LICENSEE'S SUBSTANTIAL PERFORMANCE
HEREUNDER, NOTWITHSTANDING ANY BANKRUPTCY OR INSOLVENCY OF THE LICENSOR.
If either party is unable to pay its debts generally as they come due or
is declared insolvent or bankrupt, is the subject of any proceedings
relating to its liquidation, insolvency or for the appointment of a
receiver or similar officer for it, makes an assignment for the benefit
of all or substantially all of its creditors, or enters into an agreement
for the composition, extension or readjustment of all or substantially
all of its obligations, then the other party may, by giving prior written
notice thereof to such party, terminate this Agreement as of a date
specified in such notice of termination.
7.7 Termination for Convenience.
(a) CalPX may terminate this Agreement for convenience effective as of
any time after the second anniversary of the Effective Date by (i)
giving Perot Systems notice of the termination at least 180 days
prior to the termination date specified in the notice, and (ii)
paying a termination fee in accordance with this Section 7.7 in the
event the date of termination is a date prior to the end of the
Initial 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 CalPX exercises its right under this Section 7.7, Perot Systems
shall, not later than 60 days after the termination date, invoice
CalPX for the Make-Whole Costs and CalPX shall pay the Make-Whole
Costs within 30 days after receiving the invoice. For purposes of
this Section 7.7, "Make-Whole Costs" means all reasonable
out-of-pocket direct costs and expenses resulting from the early
termination of this Agreement, such as and by way of example only:
(i) equipment lease termination penalties, prorated over a period of
the lesser of the Term or the entire lease term during the Term, and
(ii) unamortized equipment and software costs (subject to CalPX's
right to elect to take delivery or transfer of such equipment or
software at Perot Systems' then book value), less (iii) any savings
realized by Perot Systems in connection with CalPX's exercise of its
rights under this Section 7.7. Each party will use reasonable
commercial efforts, and will cooperate with the other party or its
designee, to minimize the Make-Whole Costs.
7.8 Termination for Causing Failure of Critical Services. If Perot Systems
(1) as a result of a breach of its obligations under this Agreement
causes the failure of any specific Critical Service described in Schedule
7.8 and (2) does not cure such failure with a permanent solution within
the number of hours identified in Schedule 7.8 as the applicable cure
period, after receipt of a notice from 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 Majeure Termination Provision. If any Force Majeure Event prevents,
hinders or delays performance of the Services for seven days, in the case
of Critical Services, or more than 30 days, in the case of all other
Services, CalPX may procure such Services from an alternate source. If
the Force Majeure Event continues to prevent, hinder or delay performance
of the Services for more than 30 days, in the case of Critical Services,
or more than 45 days, in the case of all other Services, and CalPX can
obtain such Services from a third party, then CalPX may terminate this
Agreement, in whole or in part, as of a date specified by CalPX 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 denned), Perot Systems shall provide to CalPX 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, CalPX may purchase any such
equipment at Perot Systems' then-current book value on an "as is--
where is" basis. With respect to any equipment leased by Perot
Systems and used solely to perform the Services, subject to the
terms of any applicable lease, Perot Systems shall assign to CalPX
Perot Systems' rights and obligations with respect to any such
equipment leased by Perot Systems; provided, however, that the
lessor under the lease agrees to release Perot Systems from all
liability under the lease as of the date of assignment.
(v) With respect to any third party services acquired by Perot Systems
and used solely to perform the Services, subject to the terms of
any applicable third party services agreement, Perot Systems shall
assign to CalPX Perot Systems' rights and obligations with respect
to any such third party services used by Perot Systems; provided,
however, that such third party service provider under the third
party service agreement agrees to release Perot Systems from all
liability arising under the third party service agreement after the
date of assignment.
(vi) Returning CalPX Proprietary Software, delivering and installing
software and tools licensed to CalPX by Perot Systems, delivering
and installing Developed Software and Work Product, delivering
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 Majeure. 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 Event"), and such non-performance,
hindrance or delay could not have been prevented by reasonable
precautions, then the non-performing, hindered or delayed party shall be
excused for such non-performance, hindrance or delay, as applicable, of
those obligations affected by the Force Majeure Event for as long as such
Force Majeure Event continues and such party continues to use all
commercially reasonable efforts to recommence performance whenever and to
whatever extent possible without delay, including through the use of
alternate sources, workaround plans or other means. The party whose
performance is prevented, hindered or delayed by a Force Majeure Event
shall immediately notify the other party of the occurrence of the Force
Majeure Event and describe in reasonable detail the nature of the Force
Majeure Event.
Article 8
Indemnities
8.1 Bodily Injury and Property Damage Indemnity.
(a) By Perot Systems. Perot Systems agrees to indemnify, defend and hold
harmless CalPX and its Affiliates from and against all Losses
arising out of or relating to the death or bodily injury of any
agent, employee, consultants, subcontractors, contractors, customer
or visitor or damage to property caused by the acts or omission of
Perot Systems.
(b) By CalPX. CalPX agrees to indemnify, defend and hold harmless Perot
Systems from and against all Losses arising out of or relating to
the death or bodily injury of any agent, employee, consultants,
subcontractors, contractors, customer or visitor or damage to
property caused by the acts or omission of CalPX.
32
8.2 Intellectual Property Indemnity.
(a) By Perot Systems. Perot Systems agrees, at its expense, to
indemnify, defend and hold harmless CalPX and its Affiliates from
and against any and all claims, damages, demands, liabilities, costs
and expenses, including reasonable attorneys' fees and expenses
("Losses") resulting from, arising out of or relating to any third
party claims brought against 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 CalPX. CalPX agrees, at its expense, to indemnify, defend and
hold harmless Perot Systems from and against any Losses resulting
from, arising out of or relating to any third-party claims brought
against Perot Systems alleging that Perot Systems' use, in
accordance with the terms of this Agreement, of 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 Employment Indemnity.
(a) Indemnification by Perot Systems. Perot Systems agrees to indemnify,
defend and hold harmless CalPX against any and all Losses arising
out of or relating to any Transitioned Employee, attributable to any
period commencing on or after the date on which such Transitioned
Employee accepts employment with Perot Systems and arising out of
Perot Systems' employment of that Transitioned Employee, including
without limitation claims relating to salary, employee benefits,
employment taxes and other payments in connection therewith, but
excluding claims relating to agreements, arrangements or commitments
made by CalPX with or to that Transitioned Employee.
(b) Indemnification by 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's Business Risk Indemnity. To the extent, and only to the extent,
CalPX's insurance carriers cover CalPX's obligations under this Section
8.4, CalPX shall indemnify, defend and hold Perot Systems harmless from
any and all Losses resulting from, arising out of or relating to any
third party claims by CalPX's participants and vendors relating to any
duties or obligations of CalPX to such third parties.
8.5 Other Perot Systems Indemnities. Perot Systems agrees, at its expense, to
indemnify, defend and hold harmless CalPX from and against all Losses
resulting from, arising out or relating to any claims:
(a) relating to any duties or obligations of Perot Systems or its agents
in respect of a third party or any subcontractor of Perot Systems;
(b) relating to Perot System's breach of Section 6.2; or
(c) relating to Perot System's breach of Section 6.1.
8.6 Indemnification Procedures. With respect to third-party claims subject to
the indemnities set forth in this Article, the indemnitee shall notify
the indemnitor promptly of any matters in respect of which the foregoing
indemnity may apply and of which the indemnitee has knowledge and shall
give the indemnitor full opportunity to control the response thereto and
the defense thereof, including, without limitation, any agreement
relating to the settlement thereof, provided that the indemnitee shall
have the right to approve any settlement or any decision not to defend,
which approval shall not be unreasonably withheld. The indemnitee's
failure to promptly give notice shall affect the indemnitor's obligation
to indemnify the indemnitee only to the extent that the indemnitor's
rights are materially prejudiced thereby. The indemnitee may participate,
at its own expense, in any defense and any settlement directly or through
counsel of its choice. If the indemnitor elects not to defend, the
indemnitee shall have the right to defend or settle the claim as it may
deem appropriate, at the cost and expense of the indemnitor, which shall
promptly reimburse the indemnitee for such costs, expenses and settlement
amounts.
34
Article 9
Liability
9.1 Limitation of Liability. Each party's liability for damages under this
Agreement shall not exceed, in the aggregate, an amount equal to the
Service Fees actually paid by CalPX to Perot Systems during the first
nine months after the Effective Date.
9.2 Limitation on 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, CalPX Vendor Software or CalPX Technology to record, store,
process, or present calendar dates falling on or after January 1, 2000,
in the same manner, and with the same functionality and accuracy, as
performed on or before December 31,1999; (ii) provide a century indicator
on all dates produced therein as output or results from its operation;
(iii) abnormally end or generate an incorrect result when performing date
calculations involving either a single century or multiple centuries;
(iv) sort all files in an accurate sequence when sorted by date and read
and write in an accurate sequence when the date is used as the key for
such reading or writing; and (v) be capable of determining leap years. In
addition, Perot Systems shall have no liability to CalPX for Perot
Systems' inability to perform its obligations under this Agreement as a
result of any
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 Systems. 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 10.1(i); PROVIDED THAT THE FORGOING SHALL NOT LIMIT ANY OTHER
RIGHT OR REMEDY OF CALPX IN RESPECT OF ANY OTHER BREACH OF ANY PROVISION
OF THIS AGREEMENT BY PEROT SYSTEMS.
10.2 By Each Party. Each party warrants that:
(a) it is a corporation duly incorporated, validly existing, and in good
standing under the laws of its state of incorporation,
(b) it has all requisite power and authority to execute, deliver, and
perform its obligations under this Agreement,
(c) the execution, delivery, and performance of this Agreement has been
duly authorized by such party and shall not conflict with, result in
a breach or constitute a default under any other agreement to which
it is a party,
(d) no approval, authorization, or consent of any governmental or
regulatory authority is required to be obtained or made by it in
order for it to enter into and perform its obligations under this
Agreement, and
(e) there is no outstanding litigation, arbitrated matter or other
dispute to which it is a party which, if decided unfavorably to it,
would reasonably be expected to have a material adverse effect on
its ability to fulfill its obligations under this Agreement.
36
10.3 Disclaimer of Warranty.
(a) IF PEROT SYSTEMS ACQUIRES ANY THIRD-PARTY SOFTWARE, HARDWARE OR
SERVICES FOR CALPX UNDER THIS AGREEMENT AT THE REQUEST OF CALPX,
PEROT SYSTEMS SHALL PROVIDE SUCH THIRD-PARTY SOFTWARE, HARDWARE OR
SERVICES ON AN "AS IS" BASIS, BUT PEROT SYSTEMS SHALL USE REASONABLE
COMMERCIAL EFFORTS TO ASSIST CALPX IN ENFORCING ANY THIRD-PARTY
WARRANTY AND. SHALL PASS THROUGH TO CALPX THE BENEFIT OF ANY SUCH
WARRANTY.
(b) EXCEPT AS MAY BE SPECIFICALLY PROVIDED IN THIS AGREEMENT, EACH PARTY
DOES NOT MAKE, AND HEREBY DISCLAIMS, ANY REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY
WARRANTY OF THE MERCHANTABILITY, SUITABILITY, FITNESS FOR A
PARTICULAR PURPOSE, OR RESULTS TO BE DERIVED FROM THE USE OF ANY
RESOURCES, SERVICES OR MATERIALS PROVIDED PURSUANT TO THIS
AGREEMENT.
(c) PEROT SYSTEMS DISCLAIMS ALL REPRESENTATIONS OR WARRANTIES THAT ANY
SERVICES PROVIDED UNDER THIS AGREEMENT SHALL IDENTIFY OR RESOLVE
CALPX'S YEAR 2000 PROBLEM AREAS. PEROT SYSTEMS SHALL NOT BE LIABLE
FOR ANY FAILURE TO IDENTIFY OR CORRECT CALPX'S YEAR 2000 PROBLEM
AREAS REGARDLESS OF THE FORM OF THE CLAIM, EXCEPT FOR PERQT SYSTEMS
OBLIGATIONS TO PROVIDE SERVICES DESCRIBED IN SECTION 9.4.
10.4 Certain Covenants.
(a) Viruses.
(i) Each party shall use reasonable commercial efforts to prevent
any software viruses or other surreptitious software codes
(collectively, "Virus") from being introduced into the Systems.
Perot Systems shall evaluate, recommend and maintain
up-to-date, subject to CalPX's approval, virus detection and
removal products to be used in connection with the Systems, on
a mutually satisfactory periodic basis.
(ii) If a Virus is introduced into a System, each party shall use
reasonable commercial efforts to identify and neutralize such
Virus and to mitigate any adverse effect of such Virus, and
Perot Systems shall repair or restore, as soon as, and to the
extent, reasonably practicable any data, information or Systems
damaged by such Virus. The priority and intensity of the
efforts
37
undertaken by the parties to identify and neutralize the Virus,
and to repair or restore any affected data, information or
systems, shall be determined by CalPX based on its evaluation
of the situation, based on such factors as it deems
appropriate, including but not limited to, the number of sites
affected, the severity of the damage being caused, and the
relative importance of the Systems affected.
(b) Perot Systems shall not, without the prior consent of CalPX,
intentionally introduce into any System or intentionally invoke any
code which is intended to disable or wrongfully impair or shut down
such System.
Article 11
Insurance
11.1 Insurance.
(a) Prior to the commencement of performance of Services under this
Agreement, Perot Systems shall procure and maintain in full force
and effect during the Term of this Agreement, and any extension
hereof, the following insurance policies:
(i) Commercial general liability insurance with limits of at
least one million dollars ($1,000,000.00) combined single
limits per occurrence and general aggregate for (a) bodily
injury and property damage, (b) completed operations, (c)
blanket contractual, and (d) contractor's protective
liability on such terms and in such amounts as are
satisfactory to CalPX.
(ii) Commercial automobile liability insurance policy with
combined single limits of $1,000,000 for bodily injury and
property damage for each occurrence, and with coverage for
non-owned vehicles.
(iii) Workers' Compensation in statutory required amounts under
applicable state Workers Compensation laws, and employers
liability insurance with a policy limit of at least
$500,000 ; and
(iv) Computer Services errors and omissions liability insurance
with limits of at least one million dollars ($1,000,000.00)
per claim and aggregate.
(b) The policies shall state that they afford primary coverage and the
commercial general liability and the commercial automobile
liability insurance shall name CalPX as an additional insured for
loss or liability pursuant to the above indemnity occurring during
activity or performance under this Agreement, including costs of
defending such claim.
(c) CalPX reserves the right to increase or decrease the coverage upon
giving thirty days written notice to Perot Systems.
38
(d) Perot Systems shall, within 15 days of the signing of this
Agreement, furnish to CalPX certificates of insurance certifying
the above insurance coverage or renewals thereof. All insurance
policies shall bear endorsement providing that the policies cannot
be cancelled or materially restricted without 30 days prior
written notice to CalPX.
(e) In the absence of the required certificates of insurance
evidencing at least the minimum types and amounts of insurance,
CalPX may, at its option: (i) procure insurance with collection
rights for premiums, attorney's fees and costs against Perot
Systems by way of set-off or recoupment from sums due Perot
Systems, at CalPX's option; or (ii) terminate this Agreement under
the terms of Section 7.4.
(f) The cost of all insurance shall be borne solely by Perot Systems.
Article 12
Miscellaneous
Article 512.1 Relationship of Parties.
Article 5(a) Perot Systems is appointed by CalPX only for the purposes and
to the extent set forth in this Agreement, and Perot Systems' relation to CalPX
shall, during the period covered by this Agreement, be that of an independent
contractor, and Perot Systems does not have and shall not have any power, and
Perot Systems shall not represent that Perot Systems has any power, to bind
CalPX, to assume or to create any obligation or responsibility, express or
implied, on behalf of CalPX or in its name.
Article 5(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.
Article 5(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
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 me 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 CalPX, any other subsidiary of Perot Systems, so long as
Perot Systems, in each case, remains responsible for (a) the actions of
such Affiliate and (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 Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
deemed restated to reflect the original intentions of the parties as
nearly as possible in accordance with applicable law, and, if capable of
substantial performance, the remaining provisions of this Agreement shall
be enforced as if this Agreement was entered into without the invalid
provision.
12.5 Captions. The captions used in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement and shall
not be deemed to limit, characterize or in any way affect any provision
of this Agreement, and all provisions of this Agreement shall be enforced
and construed as if no caption had been used in this Agreement.
12.6 Modification: Waiver. This Agreement may be modified only by a written
instrument duly executed by or on behalf of each party. No delay or
omission by either party to exercise any right or power hereunder shall
impair such right or power or be construed to be a waiver thereof. A
waiver by either party of any of the obligations to be performed by the
other or any breach thereof shall not be construed to be a waiver of any
succeeding breach thereof or of any other obligation herein contained.
12.7 No Third-Party Beneficiaries. The parties agree that this Agreement is
for the benefit of the parties hereto and is not intended to confer any
rights or benefits on any third-party, including any employee of either
party, and that there are no third-party beneficiaries to this Agreement
or any part or specific provision of this Agreement.
12.8 Governing Law. The laws of the state of California, other than its rules
on conflicts of laws, shall govern the interpretation and construction of
this Agreement. The Uniform Electronic Transactions Act shall not apply
to this Agreement, and except as provided in Section 3.4(a),
communications sent by electronic means and electronic signatures shall
not be effective under this Agreement.
12.9 Consents, Approvals, Requests and Opinions. Except as specifically set
forth in this Agreement, all consents and approvals to be given or
opinions to be adopted by either party under this Agreement shall not be
unreasonably withheld or delayed and each party shall make only
reasonable requests and opinions under this Agreement.
12.10 Survival. The terms of Section 2.8(b), Section 2.9, Article 5 (with
respect to any amounts payable but not yet paid thereunder). Section 5.8,
Section 5.12, Section 5.15, Article 6,
41
Section 7.2, Section 7.3, Section 7.11, Article 8, Article 9, Section
10.1, Section 10.2, Section 10.3, and Article 12 shall survive the
expiration or termination of this Agreement.
12.11 Sole and Exclusive Venue. Each party irrevocably agrees that any legal
action, suit or proceeding or alternate dispute resolution brought by it
in any way arising out of this Agreement must be brought solely and
exclusively in the United States District Court for the Central District
of California, or in the state courts of the State of California for Los
Angeles County and irrevocably accepts and submits to the sole and
exclusive jurisdiction of each of the aforesaid courts in persona,
generally and unconditionally with respect to any action, suit or
proceeding brought by it or against it by the other party.
Article 512.12 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 further
legal instruments and perform any acts that are or may become
necessary to effectuate the purposes of this Agreement.
12.13 Negotiated Terms. The parties agree that the terms and conditions of this
Agreement are the result of negotiations between the parties and that
this Agreement shall not be construed in favor of or against any party by
reason of the extent to which any party or its professional advisors
participated in the preparation of this Agreement.
12.14 Remedies Cumulative. Except as otherwise specified under this Agreement,
no specific remedy under this Agreement shall limit a party's right to
exercise all other remedies available to such party under law, in equity
or under this Agreement, and all such remedies shall be cumulative.
12.15 Conflict of Interest. Individual PSC Personnel who perform Services
regularly on a roll time basis shall be deemed to be a "substantially
full time consultant" within the meaning of Section 1.1. of the Code of
Conduct and shall accordingly comply with the Code of Conduct. Such
individual's noncompliance with the Code of Conduct, whether with or
without knowledge, intentional or otherwise, shall constitute grounds to
have such individual removed from the CalPX account under Section 2.5.
12.16 Export. CalPX and Perot Systems shall not knowingly export or re-export
any personal computer system, part, technical data or sub-elements under
this Agreement, directly or indirectly, to any destinations prohibited by
the United States Government. The term "technical data" in this context
means such data as is defined as technical data by applicable United
States export regulations.
12.17 Entire Agreement. This Agreement, including any Schedules referred to
herein and attached hereto, each of which is incorporated herein for all
purposes, constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and there are no
representations, understandings or agreements relative hereto which are
not fully expressed
42
herein. No change, waiver, or discharge hereof shall be valid unless in
writing and signed by an authorized representative of the party against
which such change, waiver, or discharge is sought to be enforced.
12.18 Media Releases. All media releases, public announcements and public
disclosures by CalPX or Perot Systems relating to this Agreement,
including without limitation, promotional or marketing material (but not
including any announcement intended solely for internal distribution
within CalPX or Perot Systems, as the case may be, or any disclosure
required by legal, accounting or regulatory requirements beyond the
reasonable control of CalPX or Perot Systems, as the case may be) shall
be coordinated with and approved by the other prior to the release
thereof.
12.19 Task Order No. 5. The parties acknowledge and agree that after the
Effective Date, Perot Systems shall have no further obligations to
provide any services under Task Order No. 5, Effective as of January
16,1999, between the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed and
delivered by their duly authorized representative as of the date first set forth
above.
CALIFORNIA POWER EXCHANGE PEROT SYSTEMS CORPORATION
CORPORATION
By: ____________________________ By: ____________________________
Name: __________________________ Name: __________________________
Title: _________________________ Title: _________________________
Date: __________________________ Date: __________________________
43
SCHEDULE 1.1
Definitions
"AAA" has the meaning given this term in paragraph l(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, i
"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 1
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 "CalPX" shall be deemed to include such Affiliate.
"CalPX" Auditors" has the meaning given this term in Section 5.8.
"CalPX Data" has the meaning given this term in Section 6.1.
"CalPX Developed Software" means any Deliverable that (i) contains a
modification to the source code of CalPX Proprietary Software, or (ii) contains
newly developed source code the functionality of which cannot reasonably be
separated from the functionality of the related CalPX Proprietary Software, and
any derivatives of such Deliverables.
"CalPX Partners" has the meaning given this term in Section 6.5(b)(i).
"CalPX Proprietary Software" has the meaning given this term in Section 4.2(a).
"CalPX Representative" has the meaning given this term in Section 2.6.
"CalPX Software" means CalPX Proprietary Software and CalPX Vendor Software.
"CalPX Technology" has the meaning given this term in Section 4.4.
"CalPX Vendor Software" has the meaning given this term in Section 4.2(b).
"Change" means a material addition to or modification in the scope or method of
providing a Service, including any material addition to or modification of the
requirements or specification of any Deliverable.
"Change Control Procedure" means the procedures specified in or developed in
accordance with Section 3.5 pursuant to which Changes to the Services shall be
authorized by the parties.
"Change Order" means a document executed by the parties that authorizes a
Change.
"Change Review Board" has the meaning given this term in Part A of Schedule 3.1.
"Computer Operations Services" means the services described in Part B of
Schedule 3.1.
"Confidential Information" has the meaning given this term in Section 6.2(a).
"Configuration Services" has the meaning given to this term in Part D, paragraph
(a) of Schedule 3.1.
"Core Applications" has the meaning given this term in Part C, paragraph (b) of
Schedule 3.1.
Schedule 1.1-Page 2
"Core Services" has the meaning given this term in Section 3.1 (a).
"Critical Services" has the meaning given this term in Schedule 7.8.
"Current Index" has the meaning given this term in Section 5.6.
"Defect" has the meaning given this term in Part D, paragraph (b)(ii) of
Schedule 3.1.
"Defect Notice" has the meaning given this term in Part D, paragraph (B) of
Schedule 3.1.
"Deliverable" means all works of authorship mat 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 l(a) of Schedule 7.3.
"FPA" has the meaning given this term in paragraph l(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 ofFTEs expended.
"Force Majeure Event" has the meaning given this term in Section 7.12.
"Improved Technology" has the meaning given this term in Section 3.8.
"Initial Term" has the meaning given this term in Section 1.3.
"ISO" has the meaning given this term in paragraph l(c) (2) of Schedule 7.3.
"IT Procurement Services" has the meaning given this term in Section 3.5.
"IT Steering Committee" has the meaning given this term in Part A, paragraph 6
of Schedule 3.1.
"Key Personnel" has the meaning given this term in Section 2.3.
"Know-How" has the meaning given this term in Section 6.6.
"Losses" has the meaning given this term in Section 8.2(a).
"Make Whole Costs" has the meaning given this term in Section 7.7(c).
"Managed Equipment" means the third-party equipment listed in Part A of Schedule
4.2 that is managed by Perot Systems as part of the Services.
"Managed Software" means the CalPX Software, CalPX Vendor Software, Third Party
Software, Third Party Tools and Perot Systems Software listed in Schedule 4.2,
all Perot Systems Tools and Perot Developed Software, and all other software
programs agreed to be managed by Perot Systems as part of the Services.
"Management Procedures Manual" has the meaning given this term in Section 3.6.
"Network Services" has the meaning given this term in paragraph 3 of Schedule
1.2.
"Non-Transitioned Employees" has the meaning given this term in Section 2.7(c).
Schedule 1.1-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 ofCalPX.
"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.
"TX" 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 5.10(a).
"Renewal Term" shall, in each case, mean the period that the term of this
Agreement may be extended or renewed beyond the Initial Term or the then
preceding Renewal Term, as the case may be.
"Required Improvements" has the meaning given this term in Section 4.5.
"Requirements" means the functional and operational requirements for a
Deliverable or Service that are specified by CalPX.
"Restricted Territory" has the meaning given this term in Section 6.5(b)(iii).
Schedule 1.1-Page 5
"RJMF" 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 7.11 (a).
"Transition Assistance Period" has the meaning given this term in Section 7.11
(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), CalPX shall have no obligation to
purchase any of the following services from Perot Systems.
1. Year 2000 Services. Perot Systems shall have no obligation under this
Agreement to identify, correct or resolve any problem caused by the failure
of any CalPX Software, CalPX Vendor Software or CalPX Technology, (i) to
record, store, process, or present calendar dates falling on or after January
1, 2000, in the same manner, and with the same functionality and accuracy, as
performed on or before December 31, 1999; (ii) provide a century indicator on
all dates produced therein as output or results from its operation; (iii)
abnormally end or generate an incorrect result when performing date
calculations involving either a single century or multiple centuries; (iv)
sort all files in an accurate sequence when sorted by date and read and write
in an accurate sequence when the date is used as the key for such reading or
writing; and (v) be capable of determining leap years (each such failure
being a "Y2K Problem"). Notwithstanding the foregoing, upon request by CalPX
Perot Systems shall assign PSC Personnel to identify, correct or resolve Y2K
Problems in substitution for the Services regularly performed by such PSC
Personnel.
2. Desktop Support Services and Desktop Procurement Services. Perot Systems
shall have no obligation under this Agreement to provide Desktop Support
Services or Desktop Procurement Services.
The term "Desktop Support Services" means services involving maintenance,
operation or support (including help desk support services) of(i) personal
computers (including hardware, software, and other components) typically used
by a single individual at a time or (ii) the local area network or wide area
network hardware, software, and other components by which such personal
computers are linked, that are contracted to be performed by IBM Global
Services Corporation on the Agreement Date.
The term "Desktop Procurement Services" means services relating to the
procurement (including but not limited to vendor management, contract
management, costing, purchase order issuance and acquisition management) of
(i) personal computers (including hardware, software, and other components)
typically used by a single individual at a time or (ii) the local area
network or wide area network hardware, software, and other components by
which such personal computers are linked, that are contracted to be performed
by IBM Global Services Corporation on the Agreement Date.
3. Network Services. Perot Systems shall have no obligation under this Agreement
to provide Network Services.
The term "Network Services" means services involving procurement,
maintenance, operation or support of(i) hardware, software and other
components, including but not
Schedule 1.2-Page 1
limited to routers, hubs, and network interfaces, necessary to support a data
network from (and including) the router out to the third party
telecommunications infrastructure, or (ii) hardware, software and other
components including but not limited to telephone switches, handsets and
voice network that are being performed by MCI Worldcom on the Agreement Date.
4. Configuration Services.
Perot Systems shall have no obligation under this Agreement to provide
Configuration Services.
Schedule 1.2-Page 2
SCHEDULE 2.3
Personnel
Part A - CalPX Employees
Byme, Stanley Borquez, Richard Chapman, James
Cheng, Leonard De Guzman, Benedict Gonzalez, Alex
Grimaldi, Matthew Johnson, Raymond Kam, Gary
Khoshnood, Davood Lin, Yung Kai Litwin, Wayne
Liu, Chuck Lofton, Jeffery Long, Charles
Lynch, Pamela Moring, Wendall Ridley, Brent
Rinaldi, John Shia, Dee Silva, James
Sun, Rick Swanson, Hilary Timberman, Steven
Tran, Kiet Wang, Nellie Wen, Dongfang
Wiles, Noah Williams, John Wong, Nancy
Schlotfelt, Robert
Part B - CalPX Contractors
Ahmadzadeh, Behzad
Mohtashami, Marjan
Paragos, Derek
Walker, Mary Anne
Zafrani, Jim
Schedule 2.3 - Page 1
SCHEDULE 2.4
Key Employees
This schedule may be revised from time to time by mutual agreement of the
Account Manager and the CalPX Representative.
Employee
Richard Borquez
Ben DeGuzman
Davood Khoshnood
Chuck Liu
Pamela Lynch
John Rinaldi
Hilary Swanson
John Williams
Nancy Wong
Schedule 2.4 - Page 1
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 1
SCHEDULE 3.1
Base Services
Part A - Program Management Services
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
CalPX's business units, (iii) to act as single point of contact for all
change requests, (iv) to manage the Enterprise Technology Test Facility
through which all development projects must pass before being released to
production, and (v) to facilitate the IT Steering Committee. The Account
Manager shall lead the program office and each party shall assign
appropriate personnel to participate in its activities as the parties'
from time to time agree are appropriate.
2. Project Management Services.
Perot Systems shall as appropriate:
a. Use project management tools for major projects, and provide current
status reports, including identifying issues that are reasonably
expected to cause delays in timely completion of projects.
b. Work with CalPX's managers to understand project priorities and
budget, and to resolve issues.
c. Schedule projects after approval is given by CalPX in accordance with
the Change Control Procedure.
d. Coordinate activities and manage the activities of Third Party
Vendors, including priorities, requirements, dependencies,
deliverables, schedules, and milestones.
e. Coordinate cross-functional impacts between Third Party Vendors and
CalPX, including adherence to CalPX's technology and business process
standards.
f. Create and distribute performance and other reports as mutually agreed
between Perot Systems and CalPX.
g. Coordinate technical efforts across operations.
h. Participate in site planning for IT initiatives requiring specialized
site preparation upon request.
i. Define and summarize CalPX's information needs and potential IT areas
for improvement. Develop strategies and summary implementation plans
to address as required upon request.
j. Finalize budgets and obtain authorization to implement projects.
k. Manage projects in accordance with the authorized budget.
1. Work with CalPX to integrate initiatives into tactical plans.
m. Implement reasonably appropriate quality controls as part of processes
and procedures.
Schedule 3.1-Page 1
3. Change Control Services. Perot Systems shall as appropriate:
a) Manage all requests for Change Orders and other changes that are
reasonably expected to affect the production environment.
b) Obtain approvals required by the Change Control Procedure for Change
Orders and to implement changes to the production environment.
c) The Change Review Board.
(a) Perot Systems shall organize and coordinate the activities of a
"Change Review Board" to review and approve or reject proposed
Changes and to prioritize approved Changes and existing
information technology projects.
(b) The Account Manager, the CalPX Representative and one or more
executive-level employees designated by CalPX shall participate in
the Change Review Board. The CalPX Representative shall chair the
Change Review Board, which shall meet monthly or more often as the
parties deem necessary. Perot Systems shall provide monthly
project status reports on all outstanding information technology
projects to the Change Review Board.
4. Enterprise Technology Test Facility Services
a. Perot Systems shall manage and operate the Managed Equipment and
Managed Software comprising the Enterprise Technology Test Facility.
b. Schedule usage of the Enterprise Technology Test Facility.
c. Develop, review and approve acceptance test plans for software
applications to be evaluated or tested in the Enterprise Technology
Test Facility.
d. Evaluate and, if appropriate, approve successful tests of software
applications for release to CalPX's production environment.
5. Architecture Services
a. Propose technology standards for adoption by CalPX and manage
compliance with adopted standards.
b. Develop, maintain and publish Architecture Standards.
c. Participate in maintaining and updating CalPX Technology Standards,
Architecture, Topology, Methods, and Project Plans.
6. IT Steering Committee Services
Perot Systems shall organize an IT Steering Committee to (i) participate
in the , development of and approve CalPX's technology plan and budgets, (ii)
provide senior-level guidance to Perot Systems on CalPX's business priorities
as they affect the Services,
Schedule 3.1-Page 2
(iii) review and approve Changes submitted through the Change Control Procedure.
The CalPX Representative shall chair the IT Steering Committee and each party
shall designate up to four senior personnel, including the Account Manager, the
CalPX Customer Representative, and such other persons as the parties
collectively agree are appropriate to participate in the IT Steering Committee.
The IT Steering Committee shall meet weekly or as otherwise mutually agreed.
The initial members of the IT Steering Committee shall be:
From Perot Systems:
Account Manager
Representatives of each service areas:
Program Management
Applications Management
Computer Operations
From CalPX:
CalPX Representative
Representatives of each major business unit:
Trading
Settlements and Billing
Finance
Marketing
Compliance
Regulatory
Schedule 3.1-Page 3
Part B - Computer Operations Services
Perot Systems shall operate and manage the Systems seven days per Week, 24 hours
per day, by performing the following specific activities:
1.0 CalPX'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 ofCalPXs data center activities, systems
problems, and report incidents to level I support.
1.12 Perform and monitor production Systems start-up and shut down.
1.13 Perform scheduled "full backups" and "incremental backups" of
production Systems, including databases, file systems, and Systems
Software on production Systems in accordance with CalPX's backup
schedules.
1.14 Conduct an annual test of the Disaster Recovery Plan.
1.15 Develop, maintain, and execute, as required, restore procedures for
production Systems. Assist in the execution of the restore
procedures for Applications.
1.16 Manage production Systems in accordance with the Change Control
Procedure.
1.17 Reestablish Systems Software after failure and coordinate with
application support personnel any application recovery issues.
1.18 Establish and manage the maintenance window.
1.19 Provide Managed Equipment problem identification and resolution.
1.20 Perform or arrange for Managed Equipment maintenance.
1.21 Provide coordination, assistance, and acceptance of new Managed
Equipment services, (e.g. installations, cabling, and training)
using Perot Systems' resources assigned to CalPX's account within
the existing capability of Managed Equipment.
Schedule 3.1-Page 4
2.0 Production Control and Scheduling
2.1 Develop, maintain, initiate, and monitor all production Systems
schedules (e.g., on line, batch, technical support, off-hours, and
restricted period).
2.2 Resolve scheduling conflicts with CalPX.
2.3 Provide schedule status updates to CalPX, as reasonably requested.
2.4 Process on-requestjobs.
3.0 Tape Operations and Administration
3.1 Perform all tape mount requests at CalPX's data center.
3.2 Perform output distribution activities for the tape library, as
required. 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 CalPX.
12.2 Establish, maintain, and implement security administration
processes, including User ID administration standards, providing
special authorities, and purging unused access.
12.3 Perform Application security administrative functions, including
implementing functions of access control software up to and
including the front-end application (GUI) and database access.
12.4 Manage authorizations and access for users and operations to the
Systems.
12.5 Perform password administration for all supported Systems Software,
database environments, LAN systems, and network components.
12.6 Implement and maintain a security violation log that shall be
reported to management.
12.7 Use then-available Tools approved by CalPX to restrict unauthorized
use of Managed Equipment and network devices.
12.8 Provide secure storage for portable storage media relating to
production servers.
12.9 Maintain appropriate tracking of Managed Equipment.
12.10 Identify, implement, and maintain virus avoidance, detection and
elimination software for servers.
12.11 Recommend and implement Tools to maintain commercially reasonable
security controls for dial-in services.
Schedule 3.1-Page 8
12.12 Define specific disaster recovery requirements and propose a
Disaster Recovery Plan. Use reasonable commercial efforts to ensure
that the Disaster Recovery Plan remains current at all times.
12.13 Restore operating environment upon failure within agreed-upon time
frames and parameters, according to the CalPX approved Disaster
Recovery Plan.
12.14 Store CalPX-identified critical information and media off-site in
accordance with the Disaster Recovery Plan paid for by CalPX.
12.15 Work with 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 byCalPX.
13.24 Perform weekly problem management reviews in order to identify
repetitive problems.
13.25 Open problem tickets to initiate work requests for Application
changes.
Schedule 3.1-Page 10
Part C - Application Maintenance Services
(a) Application Maintenance Services.
(i) Perot Systems shall maintain the CalPX Proprietary Software and
Perot Systems Software identified in Part A and Part C,
respectfully, of Schedule 4.1. Perot Systems shall have no
obligation to maintain any other software programs, except as
agreed in accordance with the Change Control Procedure.
(ii) For Core Applications:
- Perot Systems shall provide first line problem determination on
a 7 days a week, 24 hours per day basis.
- Perot Systems shall provide second line problem resolution
support for Core Applications whose source code it can access
and modify based on the severity level problem determination
defined in paragraph C of Schedule 3.3.
(iii) For non-Core Applications:
- Perot Systems shall provide first line problem determination
during Normal Business Hours.
- Perot Systems shall provide second line problem resolution
support for non- Core Applications whose source code it can
access and modify on a reasonable commercial efforts basis.
(b) Core Applications.
- During the Transition Period, CalPX and Perot Systems shall validate
and revise as appropriate the following list of Core Applications.
After the Transition Period, this list of Core Applications shall be
modified, if at all, by the parties through the Change Control
Procedure.
[GRAPHIC OMITTED]
Schedule 3.1 - Page 11
[GRAPHIC OMITTED]
During the Transition Period, CalPX 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.
[GRAPHIC OMITTED]
Schedule 3.1 - Page 12
D - Applications Development Services
a) Application Development Services.
- - Perot Systems shall assist CalPX 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 CalPX 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 15
business days after receiving it. When Perot Systems delivers final
Documentation to CalPX, CalPX shall have the opportunity to review the
written deliverable for an acceptance period of 10 business days after
receiving it ("Acceptance Period"), 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 CalPX'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 me
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, CalPX
shall notify Perot Systems' Account Manager, who shall promptly
cause Perot Systems to perform a root cause analysis of such
Defects and refer the matter to the IT Steering Committee. If the
IT Steering Committee is unable to resolve the matter within 15
days after the matter is submitted to it, any party may submit the
matter to the dispute resolution procedures set forth in Article 7.
(E) Perot Systems and CalPX each agree to work diligently to achieve
Acceptance of each Deliverable at the earliest possible date.
Schedule 3.1-Page 15
Part E - Business Consulting Services
The PSC Personnel assigned to provide Business Consulting Services to CalPX
shall, upon request by 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
i
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; I
- - Design, review, or document regulatory filings for CalPX and all other
participants in the California energy market, including the ISO, upon request
by CalPX; and
- - Design, review, document or train on information technology solution methods
and algorithms, including development and review of mathematical model,
computational algorithm and detailed functional specifications.
All services related to the above activities including but not limited to
meeting with CalPX's staff, ISO staff and all other participants in the
California energy market, including preparation time for training shall be
deemed as Business Consulting Services.
Schedule 3.1 -Page 16
SCHEDULE 3.3
Service Levels
A. Service Levels -- General Provisions
During the Transition Period CalPX and Perot Systems shall validate the service
levels set forth in this Schedule 3.3. Commencing with the first full calendar
month after the Transition Period for new Application, each performance metric
shall be measured and reported to CalPX on a monthly basis.
Perot Systems shall perform Services for which no Service Level is
specified in this Schedule 3.3 at least at the same level, and with the
same degree of accuracy, quality, completeness and responsiveness as
CalPX performed such Services prior to the Effective Date.
Assumptions and Pre-conditions: Perot Systems' obligation to comply with
the Service Levels set forth in this Schedule 3.3 is contingent upon the
accuracy of the assumptions and the satisfaction of the pre-conditions
set forth below. If any of these assumptions are inaccurate or any of
these pre-conditions are not satisfied, Perot Systems and CalPX shall
negotiate in good faith to adjust the Service Levels appropriately or to
select alternate Service Levels.
- Each Service Level shall be measured using then existing measurement
Tools.
- Server availability shall be calculated by dividing (i) the number of
minutes the applicable server is responding to system commands, by
(ii) the total number of minutes in the applicable month, based on 7 x
24 availability, minus the total number of minutes of downtime (a)
reserved for system maintenance windows, (b) reserved for CalPX
approved, non-routine maintenance periods, (c) reserved for CalPX
approved Application installation periods, (d) caused by defects in
Managed Equipment, Applications (except to the extent such defects
result from modifications to such Applications made by PSC Personnel),
or services provided by Third Party Vendors (other than PSC
Personnel), (e) caused by processing transaction volumes in excess of
those for which the applicable system was designed, (f) caused by an
Application that has not been tested in a reasonably adequate test
environment for a reasonably adequate time period before being placed
into the production System, and (g) defects in Applications (except to
the extent such defects result from modifications to such Application
made by PSC Personnel), or services provided by Third Party Vendors
(other than PSC Personnel).
- 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 1
of its manufacturer, (iii) to interoperate properly with other hardware or
software authorized to be replaced by CaIPX, 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.
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Schedule 3.3 - Page 2
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C. Problem Resolution Commitments
Perot Systems shall provide the support services described in the tables below
to resolve problems within the time periods specified in the tables below for
problems of the severity described below for systems and Applications that it
has access to and can modify.
Schedule 3.3 - Page 3
Definition of Terms
Severity Level: The severity level reasonably assigned to a problem by CalPX
and Perot Systems based on the impact of that problem on
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.
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SCHEDULE 4.2
Managed Software
Part A - CalPX Proprietary Software
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Part B - CalPX Vendor Software
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Productivity Tools
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Operating Systems
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Development Tools
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DBMS
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Communication Tools
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Graphics Tools
Other Software
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OM Software
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Part C -- Perot Systems Software
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Schedule 4.2 - Page 6