Exhibit 10(l)
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.
MASTER FRAMEWORK AGREEMENT
between
ONCOR ELECTRIC DELIVERY COMPANY
and
CAPGEMINI ENERGY LP
Dated May 17, 2004
MASTER FRAMEWORK AGREEMENT
This Master Framework Agreement (this "Master Agreement") is entered
into effective May 17, 2004 (the "Master Agreement Effective Date") by and
between ONCOR ELECTRIC DELIVERY COMPANY, a Texas corporation having a principal
place of business at Energy Plaza, 0000 Xxxxx Xxxxxx, Xxxxxx, Xxxxx 00000
("Oncor"), and CAPGEMINI ENERGY LP, a Delaware limited partnership having a
principal place of business at 0000 Xxx Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
("Vendor").
WHEREAS, the purpose of this Master Agreement is to establish the
overall contractual framework for Oncor's and Vendor's relationship and set
forth terms and conditions that apply to all Services provided by Vendor;
WHEREAS, simultaneous with entering into this Master Agreement, Oncor
and Vendor have entered into the IT Services Agreement pursuant to which Vendor
shall provide certain information technology services to Oncor and the Eligible
Recipients;
WHEREAS, simultaneous with entering into this Master Agreement, Oncor
and Vendor have entered into the Procurement Services Agreement pursuant to
which Vendor shall provide certain procurement services to Oncor and the
Eligible Recipients;
WHEREAS, simultaneous with entering into this Master Agreement, Oncor
and Vendor have entered into the Revenue Management Services Agreement pursuant
to which Vendor shall provide certain revenue management services to Oncor and
the Eligible Recipients;
WHEREAS, simultaneous with entering into this Master Agreement, Oncor
and Vendor have entered into the HR Services Agreement pursuant to which Vendor
shall provide certain human resources services to Oncor and the Eligible
Recipients;
WHEREAS, simultaneous with entering into this Master Agreement, Oncor
and Vendor have entered into the Customer Care Services Agreement pursuant to
which Vendor shall provide certain customer care and call center services to
Oncor and the Eligible Recipients;
WHEREAS, simultaneous with entering into this Master Agreement, Oncor
and Vendor have entered into the Finance and Accounting Services Agreement
pursuant to which Vendor shall provide certain finance and accounting services
to Oncor and the Eligible Recipients; and
WHEREAS, Oncor may request that Vendor provide certain other services
to Oncor and the Eligible Recipients pursuant to an Initial Services Agreement
or a New Services Agreement.
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein and of other good and valid consideration, the receipt and
sufficiency of which is hereby acknowledged, Oncor and Vendor (collectively, the
"Parties" and each, a "Party") hereby agree as follows:
1. CONDITIONS PRECEDENT, BACKGROUND AND OBJECTIVES
1.1 Vendor acknowledges that this Agreement shall not be effective unless
and until Vendor Parent has executed and delivered a Guarantee in favor
of Oncor in the form of Exhibit 6.
1.2 Services and Goals and Objectives. Oncor desires that certain services
presently performed and managed by or for Oncor, and certain additional
services, as such services are described in the Services Agreements, be
performed and managed by Vendor. The Parties agree that certain goals
and objectives of the Parties in entering into this Agreement are to:
(a) reduce Oncor's capital, operating, general and administrative
expenses;
(b) implement common technology and processes across Oncor;
(c) eliminate duplication across Oncor;
(d) allow Oncor to focus on its core competencies and allow Oncor
management to focus on business relationships and
requirements;
(e) provide Oncor with the flexibility to adapt rapidly to
changing requirements and changes in the Oncor business
environment;
(f) provide Oncor a fixed fee for Services with a mechanism to
adjust fees for changes in volume; and
(g) provide Vendor the opportunity to establish a safe and secure
platform from which to service multiple clients.
1.3 Interpretation.
(a) General. The provisions of this Article are intended to be a
general introduction to this Agreement and are not intended to
expand the scope of the Parties' obligations or alter the
plain meaning of this Agreement's terms and conditions, as set
forth hereinafter. However, to the extent the terms and
conditions of this Agreement are unclear or ambiguous, such
terms and conditions are to be construed so as to be
consistent with the background and objectives set forth in
this Article.
(b) Eligible Recipients. The Eligible Recipients not Controlled
by Oncor as of the Master Agreement Effective Date are set
forth on Exhibit 10. Upon Oncor's request, Vendor shall
provide the Services to Eligible Recipients, provided that
Eligible Recipients that are not Controlled by Oncor agree
with Oncor to be bound by the terms of this Agreement.
For purposes of this Agreement, Services provided to an
Eligible Recipient shall be deemed Services provided to
Oncor. To the extent an Eligible Recipient is, or was
at any time during the Term, receiving Services, (1)references
to Oncor shall include such Eligible Recipient(including for
purposes of the business, operations, policies, procedures,
rules, standards and the like of Oncor and the indemnities
under this Agreement), (2) references to Services being
performed for or provided to, or received by or used by, Oncor
shall include the performance of such Services for and
provision of such Services to, and the receipt of and use of
such Services by, such Eligible Recipient and (3) Oncor shall
be responsible for such Eligible Recipient's compliance with
this Agreement. Notwithstanding the immediately preceding
sentence, Eligible Recipients are neither authorized to direct
or instruct Vendor nor to act for or on behalf of Oncor
(including by providing notices, approvals, consents,
waivers or the like), in each case unless Oncor has notified
Vendor that an Eligible Recipient is so authorized.
Vendor will not be liable for any failure to act(or any delay
associated therewith) in any circumstance where Oncor
has failed to properly authorize such action in accordance
with the preceding sentences. Without limiting the
generality of the foregoing, in all circumstances under this
Agreement, Oncor will be Vendor's sole point of contact
regarding the Services.
2. DEFINITIONS AND DOCUMENTS
2.1 Definitions. The terms used with initial capital letters in this
Agreement shall have the meanings ascribed to them in this Agreement,
Exhibit 1 or the applicable Services Agreement.
2.2 Other Terms. The defined terms include the plural as well as the
singular and the derivatives of such terms. The term "Agreement" shall
be read and understood to mean this Master Agreement and each Services
Agreement entered into hereunder, unless otherwise specified. Unless
otherwise expressly stated, the words "herein," "hereof," and
"hereunder" and other words of similar import when used in this
Agreement (including the Services Agreements)refer to this Agreement
(or the applicable Services Agreement) as a whole and not to any
particular Article, Section, Subsection or other subdivision. Article,
Section, Subsection and Attachment references refer to articles,
sections and subsections of, and attachments to, this Agreement (or if
used in a Services Agreement, to such Services Agreement). The words
"include" and "including" shall not be construed as terms of limitation.
The words "day," "month," and "year" mean, respectively, calendar day,
calendar month and calendar year; provided that the word "day" shall
mean business day when referring to a period of less than 30 days. As
stated in Section 19.3, the word "notice" and "notification" and their
derivatives shall mean notice or notification in writing. Other terms
used in this Agreement are defined in the context in which they are used
and shall have the meanings there indicated.
2.3 Services Agreements and Field Services.
(a) Simultaneously with entering into this Agreement, Oncor and
Vendor have entered into the Initial Services Agreements. Each
of the Initial Services Agreements incorporates by reference
the terms of this Agreement. Oncor may request that Vendor
provide New Services. The Parties shall work to complete and
execute either (i) a New Services proposal (in accordance with
Section 10.5(a)) or (ii) a New Services Agreement, to address
Vendor's provision of such services.
(b) The Parties acknowledge that during the six month period
following Master Agreement Effective Date, Vendor shall have
an exclusive opportunity to propose and negotiate terms and
conditions for field services, and enter into a Services
Agreement with respect thereto. Oncor agrees that in the event
the Parties do not enter into such Services Agreement within
such six month period, then at any time during the first seven
years of the Term, Vendor shall have the right to match the
terms and conditions of any third party offering to provide
such field services, and if Vendor matches such terms and
conditions, then Oncor shall enter into a Services Agreement
with Vendor on such terms and conditions.
3. TERM
3.1 Initial Term. The initial term of this Master Agreement shall commence
as of 12:00:01 a.m., Central time on the Master Agreement Effective
Date and continue until 11:59:59 p.m., Central time, on June 30, 2014,
unless this Master Agreement is terminated earlier as provided herein,
in which case the initial term shall end at 11:59:59 p.m., Central
time, on the effective date of such termination (the "Initial Term").
3.2 Extension. If Oncor desires to renew this Master Agreement after the
Initial Term or any Renewal Term, Oncor shall provide written notice to
Vendor of its desire to do so at least one hundred and eighty (180)
days prior to the expiration of the Initial Term or the then current
Renewal Term. Unless Vendor notifies Oncor within 5 days that Vendor
does not desire to renew this Master Agreement, the Parties shall
thereafter negotiate with respect to the terms and conditions upon
which the Parties may renew this Master Agreement and if the Parties
reach agreement thereafter execute such renewal (each, a "Renewal
Term"). In the event the Parties are unable to reach agreement and
execute such renewal at least thirty (30) days prior to the expiration
of the Initial Term or the then current Renewal Term, Oncor may, at its
sole option, extend the Initial Term or the then current Renewal Term
for one additional period of up to twelve (12) months on terms and
conditions then in effect; provided that the then current Charges shall
be increased by CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY
WITH THE COMMISSION during such period. The Initial Term and the
Renewal Terms, if any, are collectively referred to as the "Term."
3.3 Services Agreement. The term of a Services Agreement, if different than
the Term, shall be set forth in the applicable Services Agreement;
provided, however, that in no event shall the term of a Services
Agreement extend beyond the Term of this Agreement.
4. SERVICES
4.1 General. Services to be provided to Oncor by Vendor shall be governed
by the terms set forth in this Master Agreement and such additional
terms as are contained in the Services Agreement pursuant to which such
Services are being provided.
(a) Services. Commencing on a Services Agreement Commencement Date
(or such later date as is specified in the applicable Services
Agreement) and continuing throughout the term of such Services
Agreement, Vendor shall be responsible for providing to Oncor
and, as directed by Oncor, to Eligible Recipients, any or all
of the following:
(i) the services, functions and responsibilities described
in this Agreement as they may be supplemented, enhanced,
modified or replaced in accordance with this Agreement;
(ii) the services, functions and responsibilities described
in the applicable Services Agreement (including in
Schedule E thereto);
(iii) any New Services, upon Oncor's acceptance of Vendor's
proposal for such New Services in accordance with
Section 10.5 and the other provisions of this Agreement;
and
(iv) unless otherwise agreed by the Parties, the services,
functions and responsibilities (y) as set forth in the
Oncor 2003 Base Case, if any, attached to the applicable
Services Agreement, and (z) being performed during
calendar year 2003 by Oncor 2003 Personnel as reasonably
demonstrated by Oncor, or upon Oncor's request,
demonstrated by the Transitioned Employees acting in
good faith (clauses (i) through (iv) of this Section,
the "Services").
(b) Included Services. If any services, functions or
responsibilities not specifically described in this Agreement
are a necessary part of the Services, they shall be deemed to
be included within the scope of the Services to be delivered
for the Charges, as if such services, functions or
responsibilities were specifically described in this
Agreement.
(c) Required Resources. Except as otherwise expressly provided in
this Agreement, Vendor shall be responsible for providing the
facilities, personnel, Equipment, Software, knowledge,
expertise, methodologies, processes and other resources
necessary to provide the Services.
4.2 Termination Assistance Services.
(a) Availability. As part of the Services, and for the Charges to
be determined in accordance with Exhibit 11, upon Oncor's
request, Vendor shall provide to Oncor the Termination
Assistance Services under and in accordance with the
applicable Services Agreement.
(b) Period of Provision. Vendor shall provide the Termination
Assistance Services to Oncor (i) upon ninety (90) days' prior
notice from Oncor commencing up to nine (9) months prior to
the expiration of the term of the applicable Services
Agreement and continuing for up to twelve (12) months
following the effective date of the expiration of the term of
the applicable Services Agreement, (ii) commencing upon any
proper notice of termination (including notice based upon
breach or default by Oncor, breach or default by Vendor or
termination for convenience by Oncor (subject to subsection
(d) below)) of the term of the applicable Services Agreement,
and continuing for up to twelve (12) months following the
effective date of such termination, (iii) commencing upon
notice of removal of an Eligible Recipient by Oncor and
continuing for up to twelve (12) months following the
effective date of such removal or (iv)commencing upon notice
from Oncor that there will be an insourcing or resourcing
under the applicable Services Agreement and continuing for up
to twelve (12) months following the effective date of such
notice. For purposes of this Master Agreement and the Services
Agreements, the terms "Term" and "term," respectively, shall
automatically be extended until the date determined by Oncor
as the completion date of the Termination Assistance Services.
Oncor may only terminate a Services Agreement in its entirety.
(c) Extension of Services. Oncor may elect, upon one hundred and
eighty (180) days' prior notice, to extend the effective date
of any expiration/termination of the Services, in its sole
discretion, provided that the total of all such extensions
will not exceed one hundred and eighty (180) days following
the originally specified effective date without Vendor's prior
written consent. Oncor also may elect, upon one hundred and
eighty (180) days' prior notice, to extend the period
following the effective date of any expiration/termination for
the performance of Termination Assistance Services, provided
that the period between such effective date and the completion
of all Termination Assistance Services is not greater than
eighteen (18) months.
(d) Firm Commitment. Vendor shall provide Termination Assistance
Services to Oncor regardless of the reason for the expiration
or termination of this Agreement or the applicable Services
Agreement; provided, however, that if Vendor terminates this
Agreement pursuant to Section 18.1(b) then Oncor must pay to
Vendor all undisputed unpaid amounts then due and owing to
Vendor under this Agreement and continue to pay invoices in
accordance with Section 11.2 of the applicable Services
Agreement prior to Vendor being obligated to provide the
Termination Assistance Services.
(e) Performance. At Oncor's request, Vendor shall provide
Termination Assistance Services directly to its designee, any
Eligible Recipient or an Entity acquiring Control of an
Eligible Recipient. Unless otherwise agreed by the Parties,
all such Termination Assistance Services shall be performed
subject to and in accordance with the terms and conditions of
this Agreement and Vendor shall perform the Termination
Assistance Services with at least the same degree of accuracy,
quality, completeness, timeliness, responsiveness and resource
efficiency as it provided and was required to provide in
respect of the same or similar Services.
4.3 Use of Third Parties.
(a) Right of Use. Oncor shall not be permitted to insource or
resource any of the scope or volume of Services being provided
by the Transitioned Employees as of the Master Agreement
Effective Date; provided, however, that subject to
Section 4.3(b), Oncor shall be permitted to insource or
resource services that replace the scope and volume of
Planned Projects after such Planned Projects are completed
under this Agreement. Nothing in this Agreement shall be
construed or interpreted as (i) a requirements contract or,
except as set forth in the immediately preceding sentence,
creating any exclusive relationship or (ii) preventing Oncor
obtaining from third parties (each, a "Oncor Third Party
Contractor"), or providing to itself, any other services,
functions or responsibilities, including the development,
maintenance and hosting of Software, except as set forth in
the immediately preceding sentence. Nothing in this
Agreement shall be construed or interpreted as limiting
Oncor's right or ability to add or delete Eligible Recipients.
Except as set forth in the first preceding sentence, nothing
in this Agreement shall be construed or interpreted as
limiting Oncor's right or ability to increase or decrease its
demand for Services. To the extent Oncor obtains from Oncor
Third Party Contractors, or provides to itself, any of the
Services, the amount to be paid to Vendor by Oncor will be
equitably adjusted downward in accordance with Exhibit 11.
Similarly, to the extent Oncor adds or deletes Eligible
Recipients or increases or decreases its demand for Services,
the amount to be paid to Vendor by Oncor will be adjusted in
accordance with Exhibit 11.
(b) Oncor agrees to procure from Vendor new project work, provided
that Vendor demonstrates it has experience and skills to
perform the projects at least comparable to that of any third
parties Oncor is considering and offers Oncor the best
overall terms and conditions (including price) to complete the
projects. At least semi-annually each calendar year, Oncor
shall meet with Vendor and discuss with Vendor forecasts for
projects contemplated by Oncor during the next sixth months.
Oncor at its option may also have Vendor perform projects at
the daily rates set forth in Attachment 2.1.1 to Exhibit 11
as IT Charges - AD Apps Development. With regard to any
application development services (including project work)
performed by Vendor, the first CONFIDENTIAL MATERIAL REDACTED
AND FILED SEPARATELY WITH THE COMMISSION of all such services
in each calendar year shall not be separately chargeable to
Oncor because it is included in the Base Services Charge for
"AM-AD SMEs Transfer" in Exhibit 11. Oncor shall use
reasonable efforts to award to Vendor new projects with an
aggregate amount paid to Vendor of at least CONFIDENTIAL
MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
each calendar year.
(c) Vendor Cooperation. Vendor shall use commercially reasonable
efforts to cooperate with and work in good faith with Oncor
and Oncor Third Party Contractors as described in this
Agreement and in the applicable Services Agreement or as
reasonably requested by Oncor.
4.4 Employee Transfers. The transitioning of Oncor's employees to Vendor
under or in connection with a Services Agreement or a New Service, if
any, shall be effected in accordance with the terms and conditions set
forth in Exhibit 2.
4.5 Governance. The Parties shall comply with the governance and account
management provisions set forth in Exhibit 8.
5. RESERVED
6. FACILITIES, SOFTWARE, EQUIPMENT, CONTRACTS AND ASSETS ASSOCIATED WITH
THE PROVISION OF SERVICES
6.1 Service Facilities.
(a) Service Facilities. The Services shall be provided at or from
(i) the Oncor Facilities, (ii) the Vendor Facilities, or (iii)
any other service location determined by Vendor and notified
to Oncor at least ninety (90) days prior to use by Vendor;
provided that Vendor shall obtain Oncor's prior approval, such
approval not to be unreasonably withheld or delayed, for any
proposed relocation by Vendor of the provision of a Service to
any service location identified in Exhibit 3. Vendor shall be
financially responsible for all additional costs, taxes or
expenses related to or resulting from any Vendor-initiated
relocation to a new or different service location, including
any reasonable costs or expenses directly incurred (including
internal costs) by Oncor as a result of such relocation.
(b) Oncor Facilities. Oncor shall provide Vendor with the use of
and access to the Oncor Facilities described in Schedule O.1
to the applicable Services Agreement solely as necessary for
Vendor to perform its obligations under this Agreement.
Such Oncor Facilities together with facilities included in
the Oncor Contributed Assets are the only facilities being
used by the Transitioned Employees as of the Master Agreement
Effective Date and are sufficient for Vendor to provide the
Services on the Master Agreement Effective Date. Oncor
warrants that Oncor shall not interfere with Vendor's quiet
enjoyment of the Oncor Facilities. Except as otherwise
approved by Oncor, Oncor owned or leased assets provided for
the use of Vendor under this Agreement shall remain in Oncor
Facilities. In addition, all improvements or modifications to
Oncor Facilities requested by Vendor shall be (i) subject to
reasonable review and approval in advance by Oncor, and (ii)
performed by or through Oncor. Vendor shall reimburse Oncor
for the actual direct reasonable costs and expenses incurred
in connection with such modifications or improvements. EXCEPT
AS SET FORTH HEREIN, THE Oncor FACILITIES ARE PROVIDED BY
Oncor TO Vendor ON AN AS-IS, WHERE-IS BASIS. Oncor EXPRESSLY
DISCLAIMS ANY WARRANTIES, EXPRESS OR IMPLIED, AS TO THE Oncor
FACILITIES, OR QUIET ENJOYMENT BY Vendor.
(c) Physical Security. Oncor is responsible for the physical
security of the Oncor Facilities; provided, that Vendor shall
be responsible for the physical security and safety, physical
access and control of the buildings or areas over which Vendor
has exclusive control and Vendor shall not permit any person
to have access to, or control of, any such area unless such
access or control is permitted in accordance with control
procedures approved by Oncor or any higher standard agreed to
by Oncor and Vendor. Vendor shall be solely responsible for
compliance by Vendor Personnel with such control procedures,
including obtaining advance approval from Oncor to the extent
required.
(d) Use of Oncor Facilities.
(i) Vendor shall have the right to use the Oncor Facilities
to provide the services to third parties. Oncor shall
take adequate steps to provide Vendor with appropriate
Oncor Facilities to enable Vendor to achieve its
reasonable business objectives.
(ii) Oncor reserves the right to relocate any Oncor Facility
from which the Services are then being provided by
Vendor to another facility or geographic location upon
120 days prior written notice to Vendor; provided that,
in such event, Oncor will provide Vendor with
comparable office space in another location. Oncor
shall be financially responsible for all additional
costs, taxes or expenses related to or resulting from
any Oncor-initiated relocation to a new or different
service location, including any reasonable costs or
expenses directly incurred by Vendor as a result of
such relocation. Vendor will not be deemed to be in
breach of this Agreement, including a breach of the
Service Levels, to the extent that any such
Oncor-initiated relocation prevents or delays Vendor
Personnel from performing Vendor's obligations under
this Agreement.
(iii) Oncor also reserves the right to direct Vendor to cease
using all or part of the space in any Oncor Facility
upon 120 days prior written notice. In such event,
Oncor shall be financially responsible for all
additional costs, taxes or expenses related to or
resulting from any such direction, including the
reasonable direct costs and expenses incurred in
leasing substitute space, provided that such relocation
is not contemplated by this Agreement. Vendor will not
be deemed to be in breach of this Agreement to the
extent that any such direction prevents or delays
Vendor Personnel from performing Vendor's obligations
under this Agreement or under any Services Agreement.
(e) Conditions for Return. When the Oncor Facilities are no longer
to be used by Vendor as contemplated by this Section or are
otherwise no longer being used by Vendor to perform the
Services or services to third parties, Vendor shall provide
ninety (90) days' prior notice to Oncor and at the end of such
90 days shall vacate and return such Oncor Facilities
(including any improvements to such facilities made by or at
the request of Vendor) to Oncor in substantially the same
condition as when such facilities were first provided to
Vendor, subject to reasonable wear and tear.
(f) No Violation of Laws. Vendor shall (i) treat and use the Oncor
Facilities in a reasonable manner, and (ii) not commit, and
shall use all reasonable efforts to ensure that no business
visitor or invitee of Vendor commits, any act in violation of
any Laws in such Vendor occupied Oncor Facility or any act in
violation of Oncor's insurance policies or in breach of
Oncor's obligations under the applicable real estate leases in
such Vendor occupied Oncor Facilities (in each case, to the
extent Vendor has received prior notice of such insurance
policies or real estate leases).
(g) Costs and Expenses. Both Parties agree to use commercially
reasonable efforts to minimize the costs and expenses
associated with any relocation provided for in this Section
6.1.
6.2 Use of Vendor Facilities. At Oncor's reasonable request, Vendor shall
provide reasonable supervised access to Vendor Facilities by Oncor or
Oncor Third Party Contractors to trouble-shoot and maintain third party
software and equipment used to provide Services. Oncor shall comply,
and shall cause Oncor Third Party Contractor's to comply, with Vendor's
polices, rules, regulations applicable to Vendor's Facilities
(including with respect to security, confidentiality and regulatory
issues) of which Oncor has been provided prior notice.
6.3 Oncor Rules / Employee Safety.
(a) Oncor Rules and Compliance. In performing the Services and using
the Oncor Facilities, Vendor shall observe and comply with all
lawful Oncor policies, rules, and regulations applicable to Oncor
Facilities or the provision of the Services as set forth on
Schedule E.3 to the applicable Services Agreement as of the
Master Agreement Effective Date (collectively, "Oncor Rules");
provided that Vendor will not be deemed to be in breach of this
Agreement to the extent that any Oncor Rules prevent Vendor
Personnel from performing Vendor's obligations
under this Agreement. Vendor shall be responsible for the
promulgation and distribution of Oncor Rules to Vendor Personnel
as and to the extent necessary and appropriate. Additions or
modifications to the Oncor Rules will be communicated by Oncor
to Vendor or Vendor Personnel prior to be effective date of such
addition or modification. Vendor and Vendor Personnel shall
observe and comply with such additional or modified Oncor
Rules; provided that any material addition or modification to
the Oncor Rules will subject the Charges to an equitable
adjustment to reflect any incremental direct actual costs and
expenses incurred by Vendor in complying therewith. Where
applicable, in observing and complying with those Oncor Rules
related to Oncor's obligation to comply with Affiliate Standards
of Conduct requirements ("Affiliate Standards"), Vendor shall
develop and timely implement a plan approved by Oncor's
Compliance Director, or other designee, for complying with the
applicable Affiliate Standards. The plan will, at a minimum,
include the following elements: management oversight and
responsibility, procedures and rules, employee training and
communications, response to employee questions and concerns,
monitoring, auditing, and evaluating compliance, enforcement and
discipline, response to alleged violations, complaints, and
requests for information, and documentation of compliance
efforts. The plan procedures and rules shall, among other
things, implement safeguards that: protect the confidentiality
of Oncor Electric Delivery Company's customer information,
including protecting against improper disclosure to Oncor
Affiliates; protect Oncor Electric Delivery Company's
confidential information from improper disclosure to other Oncor
Affiliates; and ensure that all charges are properly allocated
among Oncor and Oncor Affiliates. Vendor shall timely report to
Oncor any alleged Affiliate Standards violation and shall
cooperate in investigating and responding to an alleged Affiliate
Standards violation. Oncor may audit for Vendor compliance
consistent with Section 8.4.
(b) Safety and Health Compliance. Vendor and Vendor Personnel shall
familiarize themselves with the premises and operations at
each Oncor Facility at or from which Services are rendered and
the Oncor Rules applicable to each such Oncor Facility. Vendor
and Vendor Personnel shall observe and comply with all Laws
applicable to the use of each Oncor Facility or the provision of
the Services, including environmental Laws and Laws regarding
occupational health and safety. Vendor shall be responsible for
the compliance of Equipment, Software, Systems and Services for
which it is operationally responsible with such Laws and shall be
responsible for any acts or omissions of Vendor Personnel in
contravention of such Laws. Notwithstanding the foregoing,Vendor
will not be responsible for compliance with Laws by Oncor or
Oncor Personnel. Each Party shall take precautions to avoid
injury, property damage, spills or emissions of hazardous
substances, materials or waste, and other dangers to persons,
property or the environment. To the extent required by Oncor as
communicated to Vendor, Vendor Personnel shall receive Oncor
standard training prior to entering certain Oncor Facilities.
6.4 Notice of Defaults. Each Party shall promptly inform the other Party in
writing of any material breach of, or misuse or fraud in connection
with, any Third Party Contract, Equipment Lease or Third Party Software
license used in connection with the Services of which it becomes aware
and shall cooperate with the other Party to prevent or stay any such
breach, misuse or fraud.
7. SERVICE LEVELS
7.1 General. Beginning on the dates specified in Schedule G to the
applicable Services Agreement, Vendor shall perform the Services so as
to meet or exceed the applicable Service Levels. Vendor shall perform
the Services in accordance with this Agreement (including the Service
Levels) and with promptness and diligence, and in a professional and
workmanlike manner.
7.2 Service Level Credits. Vendor recognizes that Oncor is paying Vendor to
deliver the Services at specified Service Levels. If Vendor fails to
meet such Service Levels, then Vendor shall pay or credit to Oncor the
performance credits specified in Exhibit 11 in accordance with Schedule
G to the applicable Services Agreement ("Service Level Credits"), in
recognition of the diminished value of the Services resulting from
Vendor's failure to meet the agreed upon level of performance, and not
as a penalty. Under no circumstances shall the imposition of Service
Level Credits be construed as Oncor's sole or exclusive remedy for any
failure to meet the Service Levels; provided, however, that any Service
Level Credits received by Oncor shall be an offset against the amount
of any damages received by Oncor from Vendor as a result of the
underlying event giving rise to the Service Level Credit.
7.3 Problem Analysis. Upon Oncor's request, if Vendor fails in any material
respect to provide Services in accordance with this Agreement, Vendor
shall (after restoring service or otherwise resolving any immediate
problem) (i) promptly investigate and report on the causes of the
problem, (ii) provide a Root Cause Analysis of such failure as soon as
practicable after such failure or at Oncor's request, (iii) implement
remedial action and begin complying with this Agreement as soon as
practicable, (iv) advise Oncor of the status of remedial efforts being
undertaken with respect to such problem, and (v) provide Oncor
reasonable evidence that the causes of such problem have been or will
be corrected. Vendor shall use all commercially reasonable efforts to
complete the Root Cause Analysis within four (4) days of the initial
failure; provided that, if it is not capable of being completed within
four (4) days using reasonable diligence, Vendor shall complete such
Root Cause Analysis as quickly as possible and shall notify Oncor prior
to the end of the initial four (4) day period as to the status of the
Root Cause Analysis and the estimated completion date.
7.4 Continuous Improvement Reviews.
Once each year, beginning in the second Contract Year, Oncor and Vendor
shall periodically review the Service Levels and the performance data
collected and reported by Vendor in accordance with Schedule G to the
applicable Services Agreement. As part of this review process, the
Parties shall, at no additional cost to Oncor, increase the Service
Levels to reflect the higher performance levels actually attained by
Vendor in accordance with Schedule G to the applicable Services
Agreement; provided, however, that such actual higher performance was
not achieved through the use of additional resources. The Parties may
agree, to the extent reasonable and appropriate, to (i) increase the
Service Levels to reflect improved performance capabilities associated
with advances in the proven processes, technologies and methods
available to perform the Services, (ii) add new Service Levels to
permit further measurement or monitoring of the accuracy, quality,
completeness, timeliness, responsiveness, cost-effectiveness, or
productivity of the Services, (iii) modify or increase the Service
Levels to reflect changes in the processes, architecture, standards,
strategies, needs or objectives defined by Oncor, and (iv) modify or
increase the Service Levels to reflect agreed upon changes in the
manner in which the Services are performed by Vendor. Notwithstanding
the foregoing, nothing in this Section 7.4 shall be construed as
changing the initial Service Levels for the purpose of determining any
Service Level failure or penalty under this Agreement or the Services
Agreements.
7.5 Measurement and Monitoring. On or before the applicable Services
Agreement Commencement Date, Vendor shall implement reasonable and
customary measurement and monitoring tools and metrics as well as
standard reporting procedures to measure and report Vendor's
performance of the Services against the applicable Service Levels.
Vendor shall provide Oncor with real-time monitoring and up-to-date
problem management data and other data regarding the status of service
problems, service requests and user inquiries at levels consistent with
those being used as of the Services Agreement Commencement Date.
7.6 Notice of Adverse Impact. If Vendor becomes aware of any failure by
Vendor that could reasonably be expected to have a material adverse
effect on the Services, then, Vendor shall promptly inform Oncor in
writing of such situation and the impact or expected impact. Vendor
shall as soon as practicable meet with Oncor to formulate an action
plan to minimize or eliminate the impact of such situation.
7.7 Key Vendor Personnel.
(a) Approval of Key Vendor Personnel.
(i) Before assigning an individual to act as one of the Key
Vendor Personnel other than those listed on Schedule C to
the Services Agreements, whether as an initial assignment or
a subsequent assignment, Vendor shall (1) notify Oncor of the
proposed assignment, (2) introduce the individual to
appropriate Oncor representatives, (3) provide reasonable
opportunity for Oncor representatives to interview the
individual, and (4) provide Oncor with a resume and such
other information about the individual as Oncor may
reasonably request and as permitted by applicable Law and
Vendor's internal policies consistently applied. Within
five (5) days of its receipt of the information described in
the immediately preceding sentence, Oncor will notify Vendor
as to whether it has any reasonable objection to the proposed
assignment (and any failure of Oncor to provide such notice
in the time required will be deemed by Oncor to be an
acceptance of such proposed assignment). If Oncor in good
faith reasonably and lawfully objects to the proposed
assignment, the Parties shall attempt to resolve Oncor's
concerns on a mutually agreeable basis. If the Parties have
not been able to resolve Oncor's concerns within five(5)days
of Oncor communicating its concerns, Vendor shall not assign
the individual to that position and shall propose to Oncor
the assignment of another individual of suitable ability
and qualifications.
(ii) With regard to each Services Agreement, within thirty (30)
days after the Services Agreement Effective Date, Vendor shall
identify and obtain Oncor's approval of all Key Vendor
Personnel prior to the applicable Services Agreement
Commencement Date.
(iii) Oncor may change the positions designated as Key Vendor
Personnel with Vendor's approval which shall not be
unreasonably withheld; provided that Oncor shall be
financially responsible for all additions costs, taxes or
expenses related to or resulting from any such Oncor requested
change.
(iv) Oncor may identify up to CONFIDENTIAL MATERIAL REDACTED
AND FILED SEPARATELY WITH THE COMMISSION people to fill the
Key Vendor Personnel positions set forth in Schedule C to the
applicable Services Agreement, except as otherwise agreed by
the Oncor Account Executive and the Vendor Account Executive.
(b) Continuity of Key Vendor Personnel. Subject to the remainder of
this subsection (b), Vendor shall cause each of the Key
Vendor Personnel to devote full time and effort to the provision of
Services for the period specified in Schedule C to the applicable
Services Agreement from the date he or she assumes the position in
question. Vendor shall not transfer, reassign or remove any Key
Vendor Personnel (except as a result of voluntary resignation,
involuntary termination for cause, illness, disability, or death)
or announce its intention to do so during the specified period,
subject to the following procedures. If Vendor proposes to
reassign any Key Vendor Personnel, Vendor shall (i) notify Oncor
of the proposed reassignment, (ii) introduce the proposed
replacement to appropriate Oncor representatives, (iii) provide
reasonable opportunity for Oncor representatives to interview the
proposed replacement, and (iv) provide Oncor with a resume and
such other information about the proposed replacement as Oncor
may reasonably request and as permitted by applicable Law and
Vendor's internal policies consistently applied. Within five (5)
days of its receipt of the information described in the immediately
preceding sentence, Oncor will notify Vendor as to whether it has
any objection to the proposed reassignment and replacement (and
any failure of Oncor to provide such notice in the time required
will be deemed by Oncor to be an acceptance of such proposed
reassignment and replacement). If, in its sole discretion, Oncor
lawfully objects to the proposed reassignment and replacement,
Vendor shall not assign the proposed replacement to that position
and shall propose to Oncor the assignment of another individual of
suitable ability and qualifications. In the event of the voluntary
resignation, involuntary termination for cause, illness,
disability or death of any Key Vendor Personnel during or after
the specified period, Vendor shall (i) give Oncor as much notice
as reasonably practicable of such development, and (ii) identify
and obtain Oncor's approval of a suitable replacement as soon
as is reasonably practicable in accordance with Section 7.7(a)(i).
In addition, even after the specified period, Vendor shall
transfer, reassign or remove Key Vendor Personnel (other than in
the case of voluntary resignation, involuntary termination for
cause, illness, disability, or death) only after (i) giving Oncor
at least forty-five (45) days' prior notice of such action, and
(ii) identifying and obtaining Oncor's approval of a suitable
replacement at least thirty (30) days prior to such transfer,
reassignment or removal in accordance with Section 7.7(a)(i).
Notwithstanding the foregoing, upon Vendor's reasonable request
and in connection with Vendor's provision of services to clients
other than Oncor, Oncor shall allow Vendor to use agreed upon Key
Vendor Personnel in connection with the provision of such services
to other clients.
(c) Retention and Succession. Vendor shall provide to Oncor, for
its review and comment, a retention strategy designed to
retain Key Vendor Personnel on the Oncor account for the
prescribed period. Vendor shall also maintain active
succession plans for each of the Key Vendor Personnel
positions. Vendor shall implement such retention strategies to
retain Key Vendor Personnel as Vendor deems appropriate. Upon
termination or resignation of any Key Vendor Personnel, Vendor
shall provide notice to Oncor of such termination and
expeditiously identify and obtain Oncor's approval of a
suitable replacement in accordance with Section 7.7(a)(i).
(d) Evaluation Input. Oncor shall have an opportunity to conduct
an annual review of the Vendor Account Executive and each of
the other Key Vendor Personnel and an opportunity to provide
meaningful information to Vendor with respect to Oncor's
evaluation of the performance of the Vendor Account Executive
and the other Key Vendor Personnel and such evaluation shall
be considered by Vendor in establishing the bonus and other
compensation of such individuals.
7.8 Vendor Account Executive. Vendor shall designate a "Vendor Account
Executive" for this Oncor engagement who, unless otherwise agreed by
Oncor, shall maintain his or her office at 0000 Xxxxx Xxxxxx, Xxxxxx,
Xxxxx 00000 (in a location therein determined by Oncor). The Vendor
Account Executive shall (i) be one of the Key Vendor Personnel, (ii) be
a full time employee of Vendor, (iii) devote his or her full time and
effort to managing and coordinating Vendor's performance under this
Agreement, (iv) remain in this position for a minimum period of two (2)
years from the initial assignment (except as a result of voluntary
resignation, involuntary termination for cause, illness, disability, or
death), and (v) have authority to act on behalf of Vendor in all
day-to-day matters pertaining to this Agreement. Additionally, (i)
Vendor shall be entitled to designate additional representatives who
will be authorized to make certain decisions (e.g., regarding emergency
maintenance) if the Vendor Account Executive is not available and (ii)
the Vendor Account Executive shall be entitled to delegate any of his
or her rights and obligations to one or more designees upon prior
notice to Oncor. Oncor is entitled to rely upon instructions given by
the Vendor Account Executive or any other individual designated to have
decision-making authority in accordance with this Section.
7.9 Vendor Personnel Are Not Oncor Employees; Independent Relationship.
Except as otherwise expressly set forth in this Agreement, the Parties
intend to hereunder create an independent contractor relationship and
nothing in this Agreement shall operate or be construed as making Oncor
and Vendor partners, joint venturers, principals, joint employers,
agents or employees of or with the other. No officer, director,
employee, agent, Affiliate, contractor or subcontractor retained by
Vendor to perform work on Oncor's behalf hereunder shall be deemed to
be an officer, director, employee, agent, Affiliate, contractor or
subcontractor of Oncor for any purpose. Vendor, not Oncor, has the sole
right, power, authority and duty to (i) supervise, manage and direct
the activities of the Vendor Personnel and to compensate such Vendor
Personnel for any work performed by them on behalf of Oncor pursuant to
this Agreement and (ii) contract, direct, procure, perform or cause to
be performed all work to be performed by Vendor under this Agreement.
Vendor, and not Oncor, shall be responsible for all acts and omissions
of Vendor Personnel (unless such acts or omissions were at the
direction of Oncor to Vendor).
7.10 Replacement, Qualifications, and Retention of Vendor Personnel.
(a) Requested Replacement. In the event that Oncor determines lawfully
and in good faith that the continued assignment to Oncor of any
individual Vendor Personnel (including Key Vendor Personnel) is not
in the best interests of Oncor, then Oncor shall give Vendor notice
to that effect requesting that such Vendor Personnel be replaced
and Vendor shall immediately suspend such individuals performance of
the Services and access to Oncor Facilities pending completion
of the process set forth in this Section 7.10(a). Vendor shall have
five (5) days following such notice in which to investigate the
matters forming the basis of such request, correct any deficient
performance and provide Oncor with assurances that such deficient
performance shall not recur. If, following such five (5) day
period, Oncor is not reasonably satisfied with the results of
Vendor's efforts to correct the deficient performance and/or to
ensure its non-recurrence, Vendor shall, as soon as reasonably
practicable, remove and replace such Vendor Personnel with an
individual of suitable ability and qualifications. Nothing in this
provision shall operate or be construed to limit Vendor's
responsibility for the acts or omission of the Vendor Personnel;
provided that if Vendor is obligated to remove any Vendor Personnel
pursuant to this subsection without reasonable cause, Oncor will be
responsible for any direct, actual costs associated with such
removal, and Vendor will not be responsible for any delay in
providing, or failure to provide, Services as a result of the
removal and replacement process.
(b) Turnover Rate and Data. Commencing in January 2006, Vendor
shall report the turnover rate of Vendor Personnel on a
semi-annual basis. If Oncor reasonably determines that the
turnover rate of Vendor Personnel is materially adversely
impacting the Services and so notifies Vendor, Vendor shall,
within five (5) days of the date of Oncor's notice, (i)
provide Oncor with data concerning Vendor's turnover rate,
(ii) meet with Oncor to discuss the reasons for the turnover
rate, and (iii) submit a proposal for reducing the turnover
rate. After considering Oncor's comments, to the extent
appropriate Vendor shall implement such proposal as soon as
practicable.
7.11 Conduct of Vendor Personnel.
While at Oncor Facilities, Vendor Personnel shall (i) comply with the
Oncor Rules as long as Oncor notifies Vendor of such Oncor Rules
reasonably in advance (subject to Section 6.3(a)), (ii) comply with
reasonable requests of Oncor personnel pertaining to personal and
professional conduct, (iii) attend reasonable workplace training
offered by Oncor at Oncor's request, and (iv) otherwise conduct
themselves in a professional and businesslike manner.
7.12 Substance Abuse. Vendor represents and warrants that it has and shall
maintain and enforce substance abuse policies, in each case in
conformance with applicable Laws, and Vendor Personnel shall be subject
to such policies.
8. VENDOR RESPONSIBILITIES
8.1 Policy and Procedures Manual. Vendor shall deliver to Oncor for its
review, comment and approval a Policy and Procedures Manual as described
in the applicable Services Agreement.
8.2 Reports.
(a) General. Vendor shall provide Oncor with reports pertaining to
the performance of the Services ("Reports") as set forth in
Schedule R to the applicable Services Agreement, in the format
and at the frequencies provided therein. In addition, Oncor
may request, and Vendor will generate and deliver, additional
Reports at the cost and expense of Oncor. All Reports
described in Schedule R to the applicable Services Agreement
shall be provided to Oncor as part of the Services. The
Reports described in Schedule R to the applicable Services
Agreement and, to the extent mutually agreed upon, all other
Reports, shall be provided to Oncor in hard copies and
electronic copies.
(b) Back-Up Documentation. Vendor shall provide Oncor with copies
of and access to data, documentation and other information in
Vendor's possession as may be reasonably requested by Oncor in
order to verify the accuracy of the Reports provided by
Vendor.
(c) Correction of Errors. Vendor shall promptly correct all errors
and inaccuracies in or with respect to the Reports, of which
it becomes aware, including the information or data contained
in such Reports; provided that errors or inaccuracies for
which Oncor is responsible shall be corrected by Vendor at
Oncor's expense.
8.3 Access to Specialized Vendor Skills and Resources. Upon Oncor's
reasonable request, Vendor shall provide Oncor with reasonable access
to Vendor's specialized personnel on an expedited basis taking into
account the relevant circumstances (the "Specialized Services"). The
Parties acknowledge that the provision of such Specialized Services
may, in some cases, constitute New Services for which Vendor is
entitled to additional compensation, but in no event shall Vendor be
entitled to any additional compensation for New Services under this
subsection unless the Oncor Account Executive and Vendor Account
Executive expressly agree in writing upon such additional compensation.
If Oncor authorizes Vendor to proceed but the Parties disagree as to
whether the authorized work constitutes New Services, Vendor shall
proceed with such work and the disagreement shall be submitted to
dispute resolution pursuant to Article 17.
8.4 Audit Rights.
(a) Vendor Records. Vendor shall maintain complete and accurate
records of and supporting documentation related to the
Services, including for all Charges ("Contract Records").
Vendor shall maintain such Contract Records in accordance with
generally accepted accounting principles for the applicable
jurisdiction applied on a consistent basis. Vendor shall
retain Contract Records in accordance with Oncor's record
retention policy as in effect on the Master Agreement
Effective Date a copy of which has been provided to Vendor,
which may be modified by the Parties in accordance with the
Adjustment Process.
(b) Operational Audits. Vendor shall provide to Oncor (and internal
and external auditors, inspectors, governmental bodies,
regulators and other representatives that Oncor may designate)
access at reasonable hours to Vendor Personnel, to the facilities
at or from which Services are or have been provided and to Contract
Records and other pertinent information, all to the extent
relevant to the Services and Vendor's obligations under this
Agreement. Such access shall be provided for the purpose of
performing audits and inspections of Oncor and its businesses,
including to (i) verify the integrity of Oncor Data,
(ii) examine the systems that process, store, support and
transmit that data, (iii) examine controls (e.g., organizational
controls, input/output controls, system modification controls,
processing controls, system design controls, and access controls)
and security, disaster recovery and back-up practices and
procedures, (iv) examine Vendor's performance of the Services,
(v) verify Vendor's reported performance against this Agreement
(including the applicable Service Levels), (vi) examine Vendor's
measurement, monitoring, management and reporting tools, and
(vii) enable Oncor to meet applicable legal, regulatory and
contractual requirements, in each case to the extent applicable to
the Services. Vendor shall provide any assistance reasonably
requested by Oncor or its designee in conducting any such audit,
including installing and operating audit software. If an audit
reveals a material breach of this Agreement, Vendor shall promptly
reimburse Oncor for the actual cost of such audit and any damages,
fees, fines, or penalties assessed against or incurred by Oncor as
a result thereof.
(c) Financial Audits. During the Term and for a period thereafter
required by Law, Vendor shall provide to Oncor (and internal and
external auditors, inspectors, governmental bodies, regulators and
other representatives that Oncor may designate) access at
reasonable hours to Vendor Personnel and to Contract Records
required to be maintained by Oncor by Law and other pertinent
information, all to the extent relevant to the Services and
Vendor's obligations under this Agreement. Such access shall be
provided for the purpose of performing audits and inspections to
(i) verify the accuracy and completeness of Contract Records,
(ii) verify the accuracy and completeness of Charges and any
Pass-Through Expenses and Out-of-Pocket Expenses, (iii) examine the
financial controls, processes and procedures utilized by Vendor,
(iv) examine Vendor's performance of its other financial
obligations, and (v) enable Oncor to meet applicable legal,
regulatory and contractual requirements, in each case to the extent
applicable to the Services and/or the Charges for such Services.
Vendor shall provide any assistance reasonably requested by Oncor
or its designee in conducting any such audit. If any such audit
reveals a net overcharge by Vendor, and Vendor does not
successfully dispute the amount questioned by such audit in
accordance with Article 17, Vendor shall promptly pay to Oncor the
amount of such overcharge, together with interest from the date of
Vendor's receipt of such overcharge at the rate set by
Citibank, N.A. as its prime lending rate plus two (2) percent per
annum. In addition, if any such audit reveals an overcharge of
more than the greater of (x) five percent (5%) and (y) one
million dollars, in each case of the audited Charges in any Charges
category, Vendor shall promptly reimburse Oncor for the actual cost
of such audit.
(d) Audit Assistance. Oncor may be subject to regulation and audit
by governmental bodies, standards organizations, other
regulatory authorities, customers or other parties to
contracts with Oncor under applicable Laws, rules,
regulations, standards and contract provisions. If a
governmental body, standards organizations, other regulatory
authority or customer or other party to a contract with Oncor
exercises its right to examine or audit Oncor pursuant to such
Laws, rules, regulations, standards or contract provisions,
Vendor shall provide reasonable assistance requested by Oncor
in responding to such audits or requests for information.
(e) General Procedures.
(i) Except as otherwise required under applicable Law, Oncor may
perform audits in accordance with this Section upon reasonable
notice to Vendor during normal business hours, for a
reasonable duration and not more than one time per any 12
month period; provided that if any audit reveals a material
failure of compliance with this Agreement then Oncor shall be
entitled to conduct a follow-up audit within six months. The
costs and expenses to perform audits under this Section shall
be borne by Oncor.
(ii) Notwithstanding the intended breadth of Oncor's audit rights,
Oncor shall not be given access to (A) the proprietary
information of other Vendor customers or vendors not related
to the provision of the Services, (B) Vendor locations that
are not related to Oncor or the Services, or (C) Vendor's
internal costs, except to the extent such costs are the basis
upon which Oncor is charged and/or are necessary to calculate
the applicable Charges.
(iii)In performing audits, Oncor shall use all reasonable efforts
to avoid unnecessary disruption of Vendor's operations and
unnecessary interference with Vendor's ability to perform the
Services.
(iv) Following any audit, Oncor shall conduct (in the case of an
internal audit), or request its external auditors or examiners
to conduct, an exit conference with Vendor to obtain factual
concurrence with issues identified in the review.
(v) Oncor (and internal and external auditors, inspectors,
regulators) shall be given reasonable secure workspace in
which to perform an audit, plus reasonable access to
photocopiers, telephones, facsimile machines, computer
hook-ups, and any other facilities or equipment needed for the
performance of the audit.
(f) Vendor Internal Audit. If Vendor determines as a result of its
own internal audit that it has overcharged Oncor, then Vendor
shall promptly pay to Oncor the amount of such overcharge,
together with interest from the date of Vendor's receipt of
such overcharge at the rate set by Citibank, N.A. as its prime
lending rate plus two (2) percent per annum.
(g) Vendor Response. Vendor and Oncor shall meet to review each
audit report promptly after the issuance thereof. Vendor will
respond to each audit report in writing within thirty (30)
days from receipt of such report, unless a shorter response
time is specified in such report. Vendor and Oncor shall
develop and agree upon an action plan to promptly address and
resolve any deficiencies, concerns and/or recommendations in
such audit report and following approval of such plan by
Oncor, Vendor shall undertake remedial action in accordance
with such action plan and the dates specified therein.
(h) Vendor Response to Non-Oncor Audits. If an audit by a
governmental body, standards organization or regulatory
authority having jurisdiction over Oncor or Vendor results in
a finding that Vendor is not in compliance with any generally
accepted accounting principle or other audit requirement or
any Law or standard relating to the performance of its
obligations under this Agreement, Vendor shall, at its own
expense and within the time period specified by such auditor,
address and resolve the deficiency(ies) identified by such
governmental body, standards organization or regulatory
authority.
(i) SAS 70 Audit. Vendor shall conduct annually, or less
frequently as may be commercially reasonable, a Type 2
Statement of Auditing Standards ("SAS") 70 audit (or
equivalent audit) with respect to all Vendor Facilities at or
from which the Services are provided and Vendor's obligations
hereunder shall be met by providing a copy of the resulting
audit report to Oncor and its independent auditors no later
than 90 days prior to the end of Oncor's fiscal year. Vendor
shall respond to such report in accordance with Section
8.4(g).
8.5 Agency and Disbursements.
(a) Limited Agency. Oncor hereby appoints Vendor as its limited
agent during the Term solely for the purposes of performing
the Services, including to manage and administer the Managed
Third Party Agreements. Oncor shall provide, on a timely
basis, such affirmation of Vendor's authority to such lessors,
licensors, suppliers, and other third parties as Vendor may
reasonably request.
(b) Reimbursement for Substitute Payment. If either Party in error
pays to a third party an amount for which the other Party is
responsible under this Agreement, the Party that is
responsible for such payment shall promptly reimburse the
paying Party for such amount.
(c) Notice of Decommissioning. Vendor agrees to notify Oncor
promptly if and to the extent any Oncor owned Equipment or
Oncor leased Equipment will no longer be used to provide the
Services. The notification will include the identification
of the Equipment, and the date it will no longer be needed by
Vendor, along with the reason for decommissioning.
Upon receipt of any such notice, Oncor may, in its sole
discretion, terminate the Equipment lease for such leased
Equipment as of the date specified in such notice and sell or
otherwise dispose of or redeploy such Oncor owned Equipment
as of the date specified in such notice. Upon Vendor ceasing
to use any Equipment (or, in the case of leased Equipment,
upon the last day Oncor is obligated to make such leased
Equipment available to Vendor, if earlier), Vendor shall
return the same to Oncor and/or its designee(s) in condition
at least as good as the condition thereof on the applicable
Services Agreement Commencement Date, ordinary wear and tear
excepted, provided that such Equipment was under the control
of Vendor.
8.6 Subcontractors.
(a) Use of Subcontractors. Except to the extent set forth in
subclauses (i)-(iii) hereunder, Vendor shall not subcontract
any of its responsibilities without Oncor's prior approval,
which may be withheld in Oncor's sole discretion. Oncor
agrees that Vendor may subcontract in the following instances
without Oncor's approval: (i) to the Subcontractors
listed on Schedule D to the applicable Services Agreement,
(ii) for any services that are in support of Vendor's
provision of the Services (e.g., janitorial services or
catering services) from a Vendor Service Location, or
(iii) subcontracts pursuant to which Vendor intends to pay to
the Subcontractor less than twenty percent (20%) of the
aggregate Charges reasonably expected to be payable under the
applicable Services Agreement during any Contract Year (any
of the foregoing, a "Permitted Subcontract"). Prior to
entering into a subcontract (other than a Permitted
Subcontract) with a third party to provide or perform any part
of the Services, Vendor shall (y) give Oncor reasonable prior
notice specifying the components of the Services affected, the
scope of the proposed subcontract, the identity and
qualifications of the proposed Subcontractor, and the reasons
for subcontracting the work in question and (z) obtain Oncor's
prior approval of such Subcontractor.
(b) Shared Subcontractors. Notwithstanding Section 8.6(a), Vendor
may, in the ordinary course of business, subcontract with
temporary personnel firms for the provision of temporary
contract labor (collectively, "Shared Subcontractors");
provided, that such Shared Subcontractors possess the training
and experience, competence and skill to perform the work in a
skilled and professional and workmanlike manner. Oncor shall
have no approval right with respect to such Shared
Subcontractors. If, however, Oncor expresses dissatisfaction
with the services of a Shared Subcontractor, Vendor shall work
in good faith to resolve Oncor's concerns on a mutually
acceptable basis.
(c) Vendor Responsibility. For purposes of this Agreement,
(i) services, functions and responsibilities performed or
provided by Subcontractors (including their personnel) shall
be deemed Services performed and provided by Vendor,
(ii) references to Vendor shall include such Subcontractors
(including for purposes of compliance with operations,
policies, procedures, rules, standards and the like of Oncor
and the indemnities under this Agreement), (iii) Vendor
shall be responsible for any failure by any Subcontractor to
perform in accordance with this Agreement or to comply
with any duties or obligations imposed on Vendor under this
Agreement (including the Service Levels) to the same
extent as if such failure to perform or comply was committed
by Vendor or Vendor employees, and (iv) Vendor shall be
responsible for the performance of all Subcontractors
providing any of the Services. Vendor shall be Oncor's sole
point of contact regarding the Services.
8.7 Requirement of Writing. To the extent Oncor is required under this
Agreement to obtain Vendor's approval, consent or agreement, such
approval, consent or agreement must be in writing and must be signed by
or directly transmitted by electronic mail from the Vendor Account
Executive or by the applicable individual to whom authority has been
delegated in accordance with Section 7.8. Notwithstanding the preceding
sentence, the Vendor Account Executive may agree in advance in writing
that as to certain specific matters oral approval, consent or agreement
will be sufficient.
9. ONCOR RESPONSIBILITIES
9.1 Responsibilities. In addition to Oncor's responsibilities expressly set
forth elsewhere in this Agreement, Oncor shall be responsible for the
following:
(a) Oncor Account Executive. Oncor shall designate one
(1) individual to whom all Vendor communications concerning
this Agreement may be addressed (the "Oncor Account
Executive"), who shall have the authority to act on behalf of
Oncor in all day-to-day matters pertaining to this Agreement.
Oncor may change the designated Oncor Account Executive by
providing notice to Vendor. Additionally, (i)Oncor shall be
entitled to designate additional representatives who
will be authorized to make certain decisions (e.g., regarding
emergency maintenance) if the Oncor Account Executive
is not available and (ii) the Oncor Account Executive
shall be entitled to delegate any of his or her rights and
obligations to one or more designees upon prior notice to
Vendor. Vendor is entitled to rely upon instructions
given by the Oncor Account Executive or any other individual
designated to have decision-making authority in accordance
with this Section 9.1(a).
(b) Cooperation. Oncor shall cooperate with Vendor by, among other
things, making available, as reasonably requested by Vendor
and as otherwise required by this Agreement, management
decisions, information, approvals and acceptances so that
Vendor may accomplish its obligations and responsibilities
hereunder.
(c) Requirement of Writing. To the extent Vendor is required under
this Agreement to obtain Oncor's approval, consent or
agreement, such approval, consent or agreement must be in
writing and must be signed by or directly transmitted by
electronic mail from the Oncor Account Executive or by the
applicable individual to whom authority has been delegated in
accordance with Section 9.1(a). Notwithstanding the preceding
sentence, the Oncor Account Executive may agree in advance in
writing that as to certain specific matters oral approval,
consent or agreement will be sufficient.
9.2 Savings Clause.
(a) Vendor's failure to timely or otherwise perform its
responsibilities under this Agreement (including failure to
meet the Service Levels) shall be excused if and to the
extent such Vendor non-performance is directly caused by
(i) Oncor's or Oncor Third Party Contractor's gross negligence
or wrongful acts or omissions or Oncor's or Oncor Third Party
Contractor's breach of its obligations under this Agreement,
(ii) Software, Equipment or Systems for which Oncor or
Oncor Third Party Contractors have operational
responsibility, or (iii) Vendor's compliance with specific
instructions of Oncor or Oncor Third Party Contractors. Vendor
agrees to timely notify Oncor of such event and its inability
to perform under such circumstances to the extent Vendor is
aware thereof. To the extent such non-performance has not
occurred, Vendor agrees to provide Oncor with every reasonable
opportunity to correct event and thereby avoid such Vendor
non-performance. Vendor shall use commercially reasonable
efforts to perform the Services notwithstanding such events.
9.3 Contribution Failure. If a Contribution Failure occurs:
(a) Vendor Effort to Cure. Vendor shall use reasonable best
efforts, and Oncor shall cooperate to permit Vendor to procure
the applicable consent, permit, approval, authorizations or
other actions, or to cure any other fact or circumstance
constituting the Contribution Failure.
(b) Other Solutions. If the Contribution Failure is not cured as
provided in Section 9.3 (a) and if the Contribution failure
prevents Vendor from performing timely or otherwise performing
the Services including meeting the Transition Milestones, the
Vendor shall use all reasonable best efforts to develop and
propose to Oncor a solution that would enable Vendor to
perform Services without materially and adversely affecting
Oncor's operations or the Services. If the proposed solution
would materially and adversely affect Vendor's costs in
providing the Services, Vendor may propose an adjustment to
the Charges to take into account the additional costs,
whereupon the Parties shall endeavor in good faith to agree to
an equitable adjustment to the Charges. If within 30 days
following Vendor's first proposal of the solution and (if
applicable) adjustment to the Charges the Parties have not
agreed on a proposed solution and (if applicable) adjustment,
the Parties promptly shall meet and endeavor in good faith to
agree on a decrease in the scope of the Services or an
adjustment to the Service Levels so that Vendor can perform
the Services as so adjusted at the Service Levels as so
adjusted without increased costs despite the Contribution
Failure.
(c) To the extent that the Contribution Failure prevents Vendor
from performing timely or otherwise performing the Services,
the Vendor shall be excused from such performance unless and
until the Contribution Failure is cured or a solution or
adjustment is agreed as provided in the preceding provisions
of this Section.
10. CHARGES
10.1 General.
(a) Payment of Charges. In consideration of Vendor's performance
of the Services, Oncor agrees to pay Vendor the applicable
Charges set forth in Exhibit 11.
(b) No Additional Charges. The charges for Transition Services
are set forth in Exhibit 11 and there are no separate or
additional charges, fees, expenses or other amounts for such
Transition Services. Oncor shall not pay any Charges for the
Services in addition to those set forth in the applicable
Services Agreement. Any costs incurred by Vendor prior to the
Services Agreement Commencement Date are included in the
Charges as set forth in Exhibit 11 and shall not be separately
paid or reimbursed by Oncor.
(c) No Charge for Reperformance. At no additional expense to
Oncor, Vendor shall reperform (including any required backup
or restoration of data from scheduled backups or, if not
available on such backups, restoration by other means with
Oncor's reasonable cooperation) any Services that result in
incorrect outputs due to an error or breach of this Agreement
by Vendor, and the resources required for such performance
shall not be counted in calculating the Charges payable or
resources utilized by Oncor. Any reperformance required by an
error or breach of this Agreement by Oncor, and the resources
required for such performance, will be at the sole cost and
expense of Oncor.
(d) Eligible Recipient Services. To the extent a designated
Eligible Recipient will receive less than all of the Services,
Oncor shall identify in advance the Services to be provided by
Vendor to such Eligible Recipient. In the event of a
transaction described in clause (c) or (d) of the definition
of Eligible Recipient, Oncor may elect, on behalf of the
Eligible Recipient in question, either (i) that such Eligible
Recipient shall continue to obtain some or all of the Services
subject to and in accordance with this Agreement for the
remainder of the term of the applicable Services Agreement, or
(ii) that the Eligible Recipient shall cease to receive some
or all of the Services as of a specified date, subject to its
receipt of Termination Assistance Services pursuant to Section
4.2.
(e) Reserved.
(f) Reserved.
10.2 Pass-Through Expenses.
(a) Procedures and Payment. Oncor shall pay all Pass-Through
Expenses directly to the applicable suppliers following
review, validation and approval of such Pass-Through
Expenses by Vendor. Before submitting an invoice to Oncor for
any Pass-Through Expense, Vendor shall (i) review and validate
the invoiced charges, (ii) identify any errors or omissions,
and (iii) communicate with the applicable supplier to correct
any errors or omissions, resolve any questions or issues
and obtain any applicable credits for Oncor. Vendor shall
deliver to Oncor the original supplier invoice, together with
any documentation supporting such invoice and a statement that
Vendor has reviewed and validated the invoiced charges,
within ten (10) days after Vendor's receipt thereof, or if
earlier, at least three (3) days prior to the date on which
payment is due if such invoice was received by Vendor at
least ten (10) days prior to such due date. In addition, if
the supplier offers a discount for payment prior to a
specified date, Vendor shall deliver such invoice and
associated documentation to Oncor at least ten (10) days
prior to such date. To the extent Vendor fails to comply with
its obligations hereunder, it shall be financially responsible
for any discounts lost or any late fees or interest charges
incurred by Oncor and in addition, to the extent Vendor fails
to process any invoice in accordance with this provision, it
shall be financially responsible for any penalties associated
with late payment with respect to such invoiced amounts,
provided that in each such case Oncor notified Vendor of the
importance of processing the applicable Pass-Through Expense
in a timely manner and accordance with the underlying invoice
terms
(b) Efforts to Minimize. Vendor will continually use commercially
reasonable efforts to identify methods of reducing and
minimizing Oncor's retained and Pass-Through Expenses and will
notify Oncor of such methods and the estimated potential
savings associated with each such method.
10.3 Incidental Expenses. Vendor acknowledges that, except as expressly
provided otherwise in this Agreement, all charges, fees, expenses and
other amounts (in each case whether internal or in respect of third
parties) that Vendor incurs in performing the Services and complying
with this Agreement are included in the Charges. Accordingly, such
charges, fees, expenses and amounts shall not be separately paid or
reimbursed by Oncor.
23
10.4 Taxes. The Parties' respective responsibilities for taxes arising
under or in connection with this Agreement shall be as follows:
(a) Income Taxes. Each Party shall be responsible for its own
Income Taxes.
(b) Sales, Use and Property Taxes. Each Party shall be responsible
for any sales, lease, use, personal property, stamp, duty or
other such taxes on Equipment, Software or property it owns or
leases from a third party, including any lease assigned
pursuant to this Agreement, and/or for which it is financially
responsible under this Agreement.
(c) Taxes on Goods or Services Used by Vendor. Vendor shall be
responsible for all sales, service, value-added, lease, use,
personal property, excise, consumption, and other taxes and
duties, including VAT, payable by Vendor on any goods or
services used or consumed by Vendor in providing the Services
(including services obtained from Subcontractors) where the
tax is imposed on Vendor's acquisition or use of such goods or
services and the amount of tax is measured by Vendor's costs
in acquiring or procuring such goods or services and not by
Oncor's cost of acquiring such goods or services from Vendor.
(d) Service Taxes. Vendor shall be responsible for all Service
Taxes in effect as of the Master Agreement Effective Date.
Subject to Section 13.3(j) Oncor shall be responsible for all
Service Taxes that come into effect after the Master Agreement
Effective Date (including increases in the rate of Service
Taxes from the rate in effect as of the Master Agreement
Effective Date).
(e) Notice of New Taxes and Charges. Vendor shall promptly notify
Oncor when it becomes aware of any new taxes or other charges
(including changes to existing taxes or charges) to be passed
through and/or collected by Oncor under this Section. Such
notification (which must be separate from the first invoice
reflecting such taxes or other charges, if applicable) shall
contain a detailed explanation of such taxes or charges,
including the effective date of each new tax or charge.
(f) Efforts to Minimize Taxes. The Parties agree to cooperate
fully with each other to enable each other to more accurately
determine its own tax liability and to minimize such liability
to the extent legally permissible. Vendor's invoices shall
separately state the Charges that are subject to taxation and
the amount of taxes included therein. Each Party will provide
and make available to the other any resale certificates,
information regarding out-of-state or out-of-country sales or
use of equipment, materials, or services, and other exemption
certificates or information reasonably requested by either
Party. At Oncor's request, Vendor shall provide Oncor with
(i) written certification signed by a senior executive of
Vendor confirming that Vendor has filed all required tax forms
and returns required in connection with any Service Taxes
collected from Oncor, and has collected and remitted all
applicable Service Taxes, and (ii) such other information
pertaining to applicable Taxes as Oncor may reasonably
request.
(g) Tax Audits or Proceedings.
(i) The provisions of this Section 10.4(g)(i) shall apply
with respect to any audit, proceeding or claim by any
Tax Authority that relates to taxes assessed by such Tax
Authority for which the other Party is financially
responsible and that relates solely to such other Party
and, with respect to Vendor, does not involve claims for
taxes assessed in connection with any other customer of
Vendor. Each Party shall promptly notify the other Party
of, and coordinate with the other Party, the response to
and settlement of, any claim for Tax Authorities or
which the other Party is financially responsible under
this Agreement. With respect to any claim arising out
of a form or return signed by a Party to this Agreement,
such Party will have the right to elect to control the
response to and settlement of the claim, but the other
Party will have all rights to participate in the
responses and settlements commensurate with its
potential responsibilities or liabilities. Each Party
also shall have the right to challenge the imposition of
any tax liability for which it is financially
responsible under this Agreement or, if necessary, to
direct the other Party to challenge the imposition of
any such tax liability. If either Party requests the
other to challenge the imposition of any tax liability,
such other Party shall do so (unless and to the extent
it assumes financial responsibility for the tax
liability in question), and the requesting Party shall
reimburse the other for all fines, penalties, interest,
additions to taxes or similar liabilities imposed in
connection therewith, plus the reasonable legal,
accounting and other professional fees and expenses it
incurs. Each Party shall be entitled to any tax refunds
or rebates obtained with respect to the taxes for which
such Party is financially responsible under this
Agreement.
(ii) The provisions of this Section 10.4(g)(ii) shall apply
to any audit, proceeding or claim by any Tax Authority
that relates to a type of tax (e.g., a Service Tax)
assessed by such Tax Authority to one Party for which
the other Party is financially responsible under this
Agreement and for which Vendor or other Vendor customers
are also financially responsible in other similar
transactions. Each Party shall promptly notify the
other of any claim for taxes assessed by applicable Tax
Authorities for which the other Party is responsible
under this Agreement. Each Party shall provide any
information related to such claim reasonably requested
by the other Party. If either Party has a reasonable
basis for a challenge and requests the other to so
challenge the imposition of any tax liability, such
other Party shall do so (unless and to the extent it
assumes financial responsibility for the tax liability
in question), and the requesting Party shall reimburse
the other for all reasonable legal, accounting or other
professional fees and expenses it incurs in such
challenge. In addition, neither Party shall enter into
a settlement of any tax liability that creates a binding
financial obligation for the other Party without the
other Party's approval, which shall not be unreasonably
withheld; provided that the other Party assumes
financial liability for any interest, penalties or fines
which accrue on the claimed amount, and provided further
that this subsection (ii) shall not limit Vendor's right
or ability to settle similar claims related to other
customers or amounts for which Vendor has financial
responsibility. Each Party shall be entitled to any tax
refunds or rebates obtained with respect to taxes for
which such Party is financially responsible under this
Agreement.
(h) Tax Filings. Each Party represents, warrants and covenants
that it will file appropriate tax returns, and pay applicable
taxes owed arising from or related to the provision of the
Services in applicable jurisdictions. Vendor represents,
warrants and covenants that it is registered to and will
collect and remit Service Taxes in all applicable
jurisdictions.
10.5 New Services.
(a) Procedures. If Oncor requests that Vendor perform any New
Services reasonably related to the Services or other services
generally provided by Vendor, Vendor shall promptly prepare a
New Services proposal for Oncor's consideration. Unless
otherwise agreed by the Parties, Vendor shall prepare such
New Services proposal at no additional charge to Oncor and
shall use commercially reasonable efforts to deliver such
proposal to Oncor within thirty (30) days of its receipt of
Oncor's request or more quickly in the case of a pressing
business need or an emergency situation. Oncor shall timely
provide such information as Vendor reasonably requests in
order to prepare such New Service proposal. Such New Services
proposal shall include the following at a level of detail
sufficient to permit Oncor to make an informed business
decision: (i) a project plan and fixed price or price
estimate for the New Service, (ii) a breakdown of such
price or estimate, (iii) a description of the service levels
to be associated with such New Service, (iv) a schedule for
commencing and completing the New Service, (v) a description
of any new hardware or software to be provided by Vendor in
connection with the New Service, (vi) a description of any
software, hardware and other resources, including Resource
Unit (as defined in Exhibit 11) utilization, necessary to
provide the New Service, (vii) any additional facilities or
labor resources to be provided by Oncor in connection with the
proposed New Service, and (viii) in the case of any Developed
Materials to be created through the provision of the proposed
New Services, any Vendor ownership rights therein. Oncor may
accept or reject any New Services proposal in its sole
discretion and Vendor shall not be obligated to perform any
New Services to the extent the applicable proposal is
rejected. Oncor's acceptance of a New Services proposal shall
only be valid and binding on Oncor if approved in writing by
the Oncor Account Executive. Unless the Parties otherwise
agree, if Oncor accepts Vendor's proposal, Vendor will
perform the New Services and be paid in accordance with the
proposal submitted by Vendor and the provisions of this
Agreement. Upon Oncor's acceptance of a Vendor proposal for
New Services, the scope of the Services will be expanded
and the applicable Services Agreement will be modified to
include such New Services. Notwithstanding any provision to
the contrary, (i) Vendor shall act reasonably and in good
faith in formulating such pricing proposal, (ii) Vendor shall
identify potential means of reducing the cost to Oncor,
including utilizing Subcontractors as and to the extent
appropriate, (iii) such pricing proposal shall be no less
favorable to Oncor than the pricing and labor rates set forth
in this Agreement for comparable Services, and (iv) such
pricing proposal shall take into account the existing and
future volume of business between Oncor and Vendor.
(b) Use of Third Parties. Oncor may elect to solicit and receive
bids from third parties to perform any New Services. If Oncor
elects to use third parties to perform New Services, (i) such
New Services shall not be deemed "Services" under this
Agreement, and (ii) Vendor shall cooperate with such third
parties as provided in Section 4.3.
(c) Services Evolution and Modification. The Parties anticipate
that the Services will evolve and be supplemented, modified,
enhanced or replaced over time to keep pace with technological
and process advancements and improvements in the methods of
performing and delivering services and the changes in the
businesses of Oncor. The Parties acknowledge and agree that
these changes will modify the Services and will not be deemed
to result in New Services unless the changed services meet the
definition of New Services, in which case Vendor shall have
the right to produce a proposal for Oncor to provide such New
Services.
(d) End User and Eligible Recipient Requests. Vendor will promptly
inform the Oncor Account Executive of requests for New
Services from End Users, and subject to the provisions of
subsection (a) above, shall submit any proposals for New
Services to the Oncor Account Executive. Vendor shall not
agree to provide New Services to any End Users without the
prior written approval of the Oncor Account Executive. If
Vendor fails to comply strictly with this Section 10.5(d), it
shall receive no compensation for any services rendered to any
person or entity.
(e) Efforts to Reduce Costs and Charges. Oncor may request that
the Parties work together to identify ways to achieve
reductions in the cost of service delivery and corresponding
reductions in the Charges to be paid by Oncor by modifying or
reducing the nature or scope of the Services, the applicable
Service Levels or other contract requirements. If requested by
Oncor, Vendor shall promptly prepare a proposal at a level of
detail sufficient to permit Oncor to make an informed business
decision identifying all viable means of achieving the desired
reductions without adversely impacting business objectives or
requirements identified by Oncor. In preparing such a
proposal, Vendor shall give reasonable consideration to any
means of achieving such reductions proposed by Oncor, Vendor
shall negotiate in good faith with Oncor about each requested
reduction in Charges and shall identify to Oncor if and to
what extent the cost of service delivery may be reduced by
implementing various changes in this Agreement. Oncor
shall not be obligated to accept or implement any proposal,
and Vendor shall not be obligated to implement any change
that affects the terms of this Agreement unless and until
such change is reflected in a written amendment to this
Agreement.
10.6 Proration. Periodic charges under this Agreement are to be computed
on a calendar month basis, and shall be prorated for any partial
month on a calendar day basis.
10.7 Refundable Items.
(a) Prepaid Amounts. Where Oncor has prepaid for a service or
function for which Vendor is assuming financial responsibility
under this Agreement, Vendor shall refund to Oncor, upon
either Party identifying and verifying the prepayment, that
portion of such prepaid expense which is attributable to
periods on and after the applicable Services Agreement
Commencement Date.
(b) Refunds and Credits. If either Party should receive a refund,
credit, discount or other rebate for goods or services paid by
the other Party, the recipient Party shall (i) notify the
other Party of such refund, credit, discount or rebate and
(ii) pay the full amount of such refund, credit, discount or
rebate to the other Party.
10.8 Oncor Benchmarking Reviews.
(a) Benchmarking Review. Beginning on the second anniversary of
the Master Agreement Effective Date and no more frequently
than once every 18 months with regard to a Services Agreement
thereafter (such 18 months period commencing from the
completion of the immediately prior Benchmarking), Oncor may
engage the services of an independent third party (a
"Benchmarker"), as agreed upon by both Parties, to compare
the quality and cost of all or any reasonable aggregation of
the Services (consistent with the overall structuring of the
relationship between the parties, as reflected in the
Transaction Agreements) against the quality and cost of service
providers performing similar services to ensure that Oncor is
receiving from Vendor pricing and levels of service that are
competitive with market rates, prices and service levels,
given the nature, volume and type of Services provided by
Vendor under this Agreement ("Benchmarking").
(b) General. Any Benchmarker engaged by Oncor shall execute a
non-disclosure agreement substantially in the form of Exhibit
7. Vendor shall cooperate fully with Oncor and the Benchmarker
and shall provide reasonable access to the Benchmarker during
such effort. The Benchmarking shall be conducted so as not to
unreasonably disrupt Vendor's operations under this Agreement.
The costs of the Benchmarker for each benchmarking analysis
shall be shared equally by the Parties.
(c) Result of Benchmarking. If the Benchmarker finds that the
Charges paid by Oncor for all Services or for any part of
Services are greater than the lowest CONFIDENTIAL MATERIAL
REDACTED AND FILED SEPARATELY WITH THE COMMISSION
of the prices charged by other service providers for
work of a similar nature, type or volume (the "Benchmark
Standard"), the Benchmarker shall submit a written report
to Oncor and to Vendor setting forth such findings and
conclusions (the "Benchmark Report"). Following Oncor's
receipt of the Benchmark Report, the Parties shall promptly
meet to review the results indicated therein and Vendor
shall, at Oncor's option and in Oncor's sole discretion,
decrease the Charges (retroactive to the date of commencement
of the Benchmarking) such that the reduced Charges for the
Benchmarked Services are not greater than the Benchmark
Standard. If the Benchmarker does not issue a Benchmark Report,
then at Oncor's reasonable request the Benchmarker shall
provide Oncor and Vendor with materials indicating its
observations and suggestions based on the data collected or
used during the Benchmarking analysis.
11. INVOICING AND PAYMENT
11.1 Invoicing.
(a) Invoice. With regard to each Services Agreement, within five
(5) days after the beginning of each month, Vendor shall
present Oncor with an invoice for any non-recurring Charges
due and owing for the preceding month (the "Monthly Invoice"),
including any ARCs and RRCs. The invoice shall be delivered to
Oncor, at its request, at the address(es) listed in Section
19.3 and/or electronically. Except with respect to the Base
Services Charges (which shall be payable as provided in
Section 11.1(b) below) Vendor shall not invoice Oncor for any
advance or concurrent charges or other amounts.
(b) Payment. The Base Services Charges shall be paid two months in
advance on the first day of a month (e.g., on January first
Oncor shall pay the Base Services Charges for February) .
Subject to the other provisions of this Article 11, each
Monthly Invoice for non-recurring Charges provided for under
Section 11.1 shall be due and payable within forty-five (45)
days after receipt by Oncor of such Monthly Invoice unless the
amount in question is disputed in accordance with Section 11.4
of the Master Agreement.
(c) Form and Data. At Oncor's request, Vendor shall provide
separate Monthly Invoices for each Eligible Recipient then
receiving Services, allocated among such Eligible Recipients
based on the chargeback data generated by Vendor and/or
the allocation formula provided by Oncor. Each invoice shall
(i) comply with all applicable legal, regulatory and accounting
requirements and (ii) allow Oncor to validate volumes and fees.
Upon Oncor's request, Vendor shall within seven (7) days
provide Oncor with information and data to permit Oncor to
chargeback internally to the same organizational level and at
the same level of detail in use by Oncor as of the Services
Agreement Commencement Date. Each invoice shall include the
pricing calculations and related data utilized to establish
the Charges. The data underlying each invoice shall be
delivered to Oncor electronically in a form and format
compatible with Oncor's accounting systems.
(d) Credits. To the extent a credit may be due to Oncor pursuant
to this Agreement, Vendor shall provide Oncor with an
appropriate credit against amounts then due and owing; if no
further payments are due to Vendor, Vendor shall pay such
amounts to Oncor within fifteen (15) days of the date of
Vendor's final invoice.
(e) Time Limitation. If Vendor fails to provide an invoice (other
than with respect to Pass-Through Expenses) to Oncor for any
amount within one hundred eighty (180) days after the month in
which the Services in question are rendered or the expense
incurred, Vendor shall waive all rights it may otherwise have
to invoice for and collect such amount.
11.2 Payment Due. Any undisputed amounts due under this Agreement for which
a time of payment is not otherwise specified shall be due and payable
within forty-five (45) days of the receipt of a proper invoice by
Oncor. Any late payments shall be subject to interest from the date on
which payment was due at the rate set by Citibank, N.A. as its prime
lending rate plus two (2) percent per annum.
11.3 Set Off. With respect to any amount to be paid or reimbursed by either
Party under a particular Services Agreement, such Party may set off
against such amount any amount that the other Party is obligated to pay
or credit such Party under the applicable Services Agreement.
11.4 Disputed Charges. Oncor may only withhold payment of relevant
portions of Charges if Oncor reasonably disputes in good faith subject
to the following:
(a) Description and Explanation. Oncor shall notify Vendor and
provide a description of the particular Charges in dispute and
an explanation of the reason why Oncor disputes such Charges.
(b) Continued Performance. If Oncor has withheld payment in
accordance with the provisions of this Section, each Party
agrees to continue performing its obligations under this
Agreement while the applicable dispute is being resolved
unless and until such obligations are terminated by the
termination or expiration of this Agreement.
(c) No Waiver. Neither the failure to dispute any Charges or
amounts prior to payment nor the failure to withhold any
amount shall constitute, operate or be construed as a waiver
of any right Oncor may otherwise have to dispute any Charge or
amount or recover any amount previously paid.
12. Oncor DATA AND OTHER PROPRIETARY INFORMATION
12.1 Oncor Ownership of Oncor Data. Oncor Data are and shall remain the
property of Oncor and Vendor shall not possess or assert any lien or
other interest, title or right in, to or under any Oncor Data. Vendor
shall promptly deliver Oncor Data (or the portion of such Oncor Data
specified by Oncor) to Oncor in the format and on the media on which
such Oncor Data is held or contained by Vendor in accordance with this
Agreement (i) at any time at Oncor's reasonable request, (ii) at the
end of the term of each applicable Services Agreement and the
completion of all requested Termination Assistance Services, or (iii)
with respect to particular Oncor Data, at such earlier date that such
data are no longer required by Vendor to perform the Services.
Thereafter, Vendor shall return or destroy, as directed by Oncor, all
copies of the Oncor Data in Vendor's possession or under Vendor's
control within ten (10) days and deliver to Oncor written certification
of such return or destruction signed by a senior executive of Vendor.
Oncor Data shall not be utilized by Vendor for any purpose other than
the performance of Services and shall not be sold, assigned, leased,
commercially exploited or otherwise provided to third parties by or on
behalf of Vendor or any Vendor Personnel. Notwithstanding any other
provision of this Agreement, Vendor shall not undertake or engage in
any activity with respect to any Oncor Personal Data which would
constitute Vendor's functioning in the capacity of a "controller," as
such capacity may be identified and defined in the respective
applicable Privacy Laws and Vendor shall promptly notify Oncor if it
believes that any use of Oncor Data by Vendor contemplated under this
Agreement or to be undertaken as part of the Services would constitute
Vendor so functioning in the capacity of a "controller."
12.2 Safeguarding Oncor Data.
(a) Safeguarding Procedures. Vendor shall establish and maintain
environmental, safety and facility procedures, data security
procedures and other safeguards against the destruction, loss,
unauthorized access, use or alteration of Oncor Data
in the possession of Vendor which are (i) no less rigorous
than those maintained by Oncor as of the applicable
Services Agreement Commencement Date (or implemented by
Oncor in the future to the extent deemed necessary by
Oncor), as the same may be amended or modified from time to
time, and (ii) adequate to meet the requirements of
Oncor's then current records retention policy, as the same
may be amended or modified from time to time (provided
that any such amendment or modification is in accordance with
the Adjustment Process and applicable laws). Vendor will
revise and maintain such procedures and safeguards upon
Oncor's reasonable request and in accordance with the
Adjustment Process. Oncor shall have the right to establish
backup security for Oncor Data and to keep in its possession
backup copies of the Oncor Data at Oncor's expense. Vendor
shall remove all Oncor Data from any media taken out of
service and shall destroy or securely erase such media in
accordance with the Policy and Procedures Manual. No media
on which Oncor Data is stored may be used or re-used to store
data of any other customer of Vendor or to deliver data to a
third party, including another Vendor customer, unless
securely erased in accordance with the Policy and Procedures
Manual. In the event Vendor discovers or is notified of a
breach or potential breach of security relating to Oncor Data,
Vendor shall (i) immediately notify Oncor of such breach or
potential breach and perform a Root Cause Analysis thereon,
(ii) investigate such breach or potential breach, (iii) if
the breach is attributable to Vendor, remediate the effects of
such breach or potential breach, and (iv) if the breach is
attributable to Vendor, provide Oncor with such assurances
as Oncor shall request that such breach or potential breach
will not recur.
(b) Reconstruction Procedures. Vendor shall be responsible for
developing and maintaining procedures for the reconstruction
of destroyed, lost or altered Oncor Data which are (i) no less
rigorous than those maintained by Oncor as of the applicable
Services Agreement Commencement Date and (ii) no less rigorous
than those maintained by Vendor for its own and other
customers' information of a similar nature as the same may be
amended and modified from time to time.
(c) Corrections. Vendor shall correct all Oncor Data that is
altered or that becomes inaccurate after the Master Agreement
Effective Date; provided that any such alteration or
inaccuracy caused by Oncor or that existed prior to the Master
Agreement Effective Date shall be corrected by Vendor at
Oncor's expense.
(d) Restoration. Vendor shall restore all Oncor Data that is
destroyed or becomes lost after the applicable Services
Agreement Commencement Date (other than in the instances in
which the parties reasonably agree that it would be
impracticable to restore such Oncor Data); provided that any
destruction or loss caused by Oncor or that existed prior to
the applicable Services Agreement Commencement Date shall be
corrected by Vendor at Oncor's expense.
12.3 Confidentiality.
(a) Proprietary Information. Vendor and Oncor each acknowledge
that the other possesses and will continue to possess
information that has been developed or received by it, has
commercial value in its or its customers' businesses and
is not generally available to the public. Except as otherwise
specifically agreed in writing by the Parties, "Proprietary
Information" shall mean (i) this Agreement and the existence
and terms hereof, (ii) all information marked confidential,
restricted or proprietary by either Party, and (iii) any other
information that is treated as confidential by the disclosing
Party and would reasonably be understood to be confidential,
whether or not so marked. In the case of Oncor, Proprietary
Information also shall include Developed Materials,
Oncor Data, attorney-client privileged materials, attorney
work product, customer lists, customer contracts, customer
information, rates and pricing, information with respect to
competitors, strategic plans, account information, rate
case strategies, research information, chemical formulae,
product formulations, plant and equipment design information,
catalyst information, information that contains trade secrets,
financial/accounting information (including assets,
expenditures, mergers, acquisitions, divestitures, xxxxxxxx
collections, revenues and finances), human resources and
personnel information, marketing/sales information,
information regarding businesses, plans, operations, third
party contracts, licenses, internal or external audits, law
suits, regulatory compliance or other information or data
obtained, received, transmitted, processed, stored, archived,
or maintained by Vendor under this Agreement. By way of
example, Oncor's Proprietary Information shall include plans
for changes in Oncor Facilities, business units and product
lines, plans for business mergers, acquisitions or
divestitures, rate information, plans for the development
and marketing of new products, financial forecasts and
budgets, technical proprietary information, employee lists
and company telephone or e-mail directories. In the case of
Vendor, Proprietary Information shall include data,
financial information, account information, information
regarding Vendor's business plans and operations, and
proprietary software, tools and methodologies owned by Vendor
and used in the performance of the Services, plans for
changes in Vendor's facilities, business units and product
lines, plans for business mergers, acquisitions or
divestitures, plans for the development and marketing of new
products, financial forecasts and budgets, technical
proprietary information, employee lists and company telephone
or e-mail directories. Each Party's Proprietary Information
shall remain the property of such Party.
(b) Obligations.
(i) During the Term and at all times thereafter subject to
Section 12.3(f), Vendor and Oncor shall not disclose,
and shall maintain the confidentiality of, all
Proprietary Information of the other Party. Oncor and
Vendor shall each use at least the same degree of care
to safeguard and to prevent disclosing to third parties
the Proprietary Information of the other as it employs
to avoid unauthorized disclosure, publication,
dissemination, use, destruction, loss, or alteration
of its own information (or information of its customers)
of a similar nature, but not less than reasonable care.
Vendor Personnel shall have access to Oncor's
Proprietary Information only to the extent necessary for
such person to perform his or her obligations under or
with respect to this Agreement or as otherwise naturally
occurs in such person's scope of responsibility,
provided that such access is not in violation of Law.
(ii) The Parties may disclose Proprietary Information to
their Affiliates (except where prohibited by Oncor
Rules or Vendor's rules of which Oncor has been made
aware), auditors, attorneys, accountants, consultants,
contractors, subcontractors and other professional
advisors, where (A) use by such person or entity is
authorized under this Agreement or (B) such disclosure
is necessary for the performance of such person's or
entity's obligations under or with respect to this
Agreement (including in furtherance of the preservation
or exercise of the right, remedies and privileges
of a Party) or otherwise naturally occurs in such
person's or entity's scope of responsibility. The
disclosing Party shall be responsible for the acts or
omissions of such person or entity and shall take all
necessary steps to ensure that the Proprietary
Information is not disclosed or used in contravention
of this Agreement. Any disclosure to such person or
entity shall be under the terms and conditions as
provided herein.
(iii) Neither Party shall (A) make any use or copies of the
Proprietary Information of the other Party except as
contemplated by this Agreement, (B) acquire any right,
title or interest in, to or under or assert any lien
against the Proprietary Information of the other Party,
(C) sell, assign, transfer, lease, or otherwise dispose
of Proprietary Information to third parties or
commercially exploit such information, including through
Derivative Works, or (D) refuse for any reason
(including a default or material breach of this
Agreement by the other Party) to promptly provide the
other Party's Proprietary Information (including copies
thereof) to the other Party if requested to do so. Upon
expiration or any termination of this Agreement and
completion of each Party's obligations under this
Agreement, each Party shall return or destroy, as the
other Party may direct, all documentation in any medium
that contains, refers to, or relates to the other
Party's Proprietary Information within thirty (30) days.
Each Party shall deliver to the other Party written
certification of its compliance with the preceding
sentence signed by a senior executive of such Party.
In addition, each Party shall take all necessary steps
to ensure that its employees comply with these
confidentiality provisions.
(c) Exclusions. Section 12.3(b) shall not apply to any particular
information which the receiving Party can demonstrate:
(i) is, at the time of disclosure to it, generally available
to the public other than through a breach of the receiving
Party's or a third party's confidentiality obligations,
(ii) after disclosure to it, is published by the disclosing
Party or otherwise becomes generally available to the public
other than through a breach of the receiving Party's or a
third party's confidentiality obligations, (iii) is lawfully
in the possession of the receiving Party at the time of
disclosure to it, (iv) is received from a third party having
a lawful right to disclose such information, or (v) is
independently developed by the receiving Party without
reference to Proprietary Information of the disclosing Party.
Information disclosed hereunder and any combination of
features thereof shall not be deemed to be within the
foregoing exceptions merely because such information or any
combination of the individual features thereof are embraced by
more general information in the public knowledge or
literature. In addition, the receiving Party shall not be
considered to have breached its obligations under this Section
for disclosing Proprietary Information of the other Party as
required, in the opinion of legal counsel, to satisfy any
legal requirement of a competent government body, provided
that, promptly upon receiving any such request, such Party,
to the extent it may legally do so, advises the other Party of
the Proprietary Information to be disclosed and the identity
of the third party requiring such disclosure prior to
making such disclosure in order that the other Party may
interpose an objection to such disclosure, take action to
assure confidential handling of the Proprietary Information,
or take such other action as it deems appropriate to protect
the Proprietary Information. The receiving Party shall use
commercially reasonable efforts to cooperate with the
disclosing Party in its efforts to seek a protective order
or other appropriate remedy or in the event such protective
order or other remedy is not obtained, to obtain assurance
that confidential treatment will be accorded such Proprietary
Information.
(d) Misuse of Proprietary Information. Each Party shall
(i) immediately notify the other Party of any possession,
use, knowledge, disclosure, publication, dissemination,
alteration, or loss of such other Party's Proprietary
Information in contravention of this Agreement, (ii)
promptly furnish to the other Party all known details and
assist such other Party in investigating and/or preventing the
reoccurrence thereof, (iii) cooperate with the other Party in
any investigation or litigation deemed necessary by such other
Party to protect its rights, and (iv) promptly use all
commercially reasonable efforts to prevent further possession,
use, knowledge, disclosure, publication, dissemination,
alteration, or loss of Proprietary Information in
contravention of this Agreement. Each Party shall bear any
costs it incurs in complying with this Section 12.3(d).
(e) No Implied Rights. Nothing contained in this Section 12.3
shall be construed as obligating a Party to disclose its
Proprietary Information to the other Party, or as granting to
or conferring on a Party, expressly or impliedly, any rights,
title, interests or license in, to or under any Proprietary
Information of the other Party.
(f) Survival. The Parties' obligations of non-disclosure and
confidentiality shall survive the expiration or termination of
this Agreement for a period of three (3) years other than with
respect to trade secrets, in which case the obligations shall
survive until such time as the applicable information no
longer constitutes Proprietary Information as defined in this
Agreement.
12.4 File Access. Subject to reasonable security, confidentiality and
regulatory restrictions imposed by Vendor, Oncor shall have access to,
and the right to review and retain the entirety of, all computer or
other files containing Oncor Data, as well as all systems and network
logs, system parameters and documentation. At no time shall any of such
files or other materials or information be stored or held in a form or
manner not accessible to Oncor. Upon the request of the Oncor Account
Executive, Vendor shall confirm that all files and other information
provided to Oncor are complete and that no material element, amount, or
other fraction of such files or other information to which Oncor may
request access or review has been deleted, lost, withheld, disguised or
encoded in a manner inconsistent with the purpose and intent of
providing access to Oncor as contemplated by this Agreement.
13. REPRESENTATIONS AND WARRANTIES
13.1 Work Standards. Vendor represents and warrants that the Services shall
be rendered in a professional and workmanlike manner. Vendor represents
and warrants that it shall use adequate numbers of qualified
individuals with suitable training, experience, competence and skill to
perform the Services. Vendor shall provide such individuals with
training as to new products and services prior to the implementation of
such products and services in the Oncor environment.
13.2 Authorization.
Each Party represents and warrants to the other that:
(a) Existence. It is a duly incorporated, formed or organized, as
applicable, validly existing and in good standing under
applicable Laws;
(b) Power and Authority. It has the requisite organizational power
and authority to execute, deliver and perform its obligations
under this Agreement;
(c) Legal Authority. It has obtained all governmental
authorizations, approvals, or permits required to perform its
obligations under this Agreement under all applicable Laws,
except to the extent the failure to obtain any such
authorizations, approvals, or permits is, in the aggregate,
immaterial;
(d) Due Authorization. The execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by
the requisite organizational action on the part of such Party;
and
(e) No Violation or Conflict. The execution, delivery, and
performance of this Agreement shall not constitute a violation
of any judgment, order, or decree; a material default under
any material contract by which it or any of its material
assets are bound; or an event that would, with notice or lapse
of time, or both, constitute such a default.
13.3 Compliance with Laws.
(a) Compliance by Vendor. Vendor represents and warrants that,
with respect to the provision or receipt, as applicable, of
the Services, as applicable, and the performance of its other
legal and contractual obligations hereunder, it is and shall
be in compliance with all applicable Laws, including Laws
applicable to Oncor that are not applicable to Vendor of which
Oncor has provided notice (including in this Agreement),
including identifying and procuring applicable permits,
certificates, approvals and inspections required under all
Laws. If a charge of non-compliance by Vendor with any Law
occurs that impacts or is likely to impact Vendor's
performance under this Agreement, Vendor shall promptly notify
Oncor of such charge.
(b) Compliance by Oncor. Oncor represents and warrants that, with
respect to the performance of its legal and contractual
obligations hereunder, it is and shall be in compliance with
all applicable Laws. If a charge of non-compliance by Oncor
with any Law occurs that impacts or is likely to impact
Vendor's performance under this Agreement, Oncor shall
promptly notify Vendor of such charge.
(c) Compliance Data and Reports. At no additional charge and upon
Oncor's reasonable request, Vendor shall provide Oncor with
data and reports in Vendor's possession necessary for Oncor to
meet its obligations to comply with Laws.
(d) Notice of Laws. The Parties shall cooperate in interpreting
Laws and identifying the impact of Laws on the Services;
provided that with respect to those Laws applicable to the
businesses of Oncor, Oncor shall retain the right, in its sole
discretion, to interpret and determine the impact of such Laws
on the Services. At Oncor's reasonable request, Vendor
Personnel shall participate in Oncor provided regulatory
compliance training programs.
(e) Changes in Laws. Vendor shall comply with all Laws and changes
in Laws (including Laws specifically applicable to the
businesses of Oncor to the extent Vendor receives one-time
notice of such Laws from Oncor (including Public Utility
Regulatory Act, Tex. Util. Code Xxx. ss. 11.001 et. seq.
(Xxxxxx 1998 & Supp. 2004) and Gas Utility Regulatory Act,
Tex. Util. Code Xxx. ss. 101.001 et. seq. (Xxxxxx 1998 & Supp.
2004) both of which Vendor is hereby on notice of)), in all
cases as such Laws may be amended.
(f) Oncor Costs. Oncor shall be responsible for all costs and
expenses resulting from changes in Laws applicable to the
businesses of Oncor or Oncor's receipt or use of the Services.
Any resulting changes to the Services will be addressed
through the Change Control Process. To the extent Oncor
declines to have Vendor perform such changes to the Services,
Vendor shall not be responsible for any Losses resulting
therefrom. To the extent such changes in Laws impact other
Vendor customers, any additional costs shall be apportioned on
an equitable basis to all such customers. If such change in
Law results in a significant increase in the cost of the
Services, Oncor may, at its option, conduct a Benchmarking
in accordance with Section 10.8 to determine if any other
service providers are able on similar terms to provide
services of a similar nature, type or volume (the "Benchmark
Standard") for an amount less than Vendor, in which case
Vendor shall decrease the Charges (retroactive to the date of
commencement of the Benchmarking) such that the reduced
Charges for the applicable Services are not greater than the
Benchmark Standard.
(g) Vendor Costs. Vendor shall be responsible for all costs and
expenses resulting from changes in Law specifically applicable
to the business of Vendor or applicable to the performance of
the Services and there shall be no increase to the Charges or
to Oncor's retained expenses as a result thereof.
(h) Compliance with Data Privacy Laws. Without limiting the
foregoing, with respect to any Oncor Personal Data, Vendor
shall provide Oncor with such assistance as Oncor may
reasonably require to fulfill its responsibilities under the
respective applicable Privacy Laws.
(i) Responsibility. Vendor shall be responsible for any Losses
imposed on Vendor or Oncor resulting from any failure of
Vendor to comply with applicable Laws or respond in a timely
manner to changes in such Laws, unless and to the extent such
failure directly results from the acts or omissions of Oncor,
an Eligible Recipient or a Oncor Third Party Contractor in
contravention of Oncor's obligations under this Agreement.
Oncor shall be responsible for any Losses imposed on Vendor or
Oncor resulting from any failure of Oncor to comply with
applicable Laws or respond in a timely manner to changes in
such Laws, unless and to the extent such failure directly
results from the acts or omissions of Vendor or any Vendor
Personnel in contravention of Vendor's obligations under this
Agreement.
(j) Termination.
In the event that (a) changes in Law under Section 13.3(f) and
(b) changes in Law that result in the imposition of any
Services Taxes that are the responsibility of Oncor under
Section 10.4(d), in each case which would not have been borne
by Oncor had Oncor performed the Services itself, result in a
cumulative increase of CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION or more in the
monthly Charges under a Services Agreement (excluding New
Services and ARCs (as defined in Exhibit 11), but not
increases in the ARC Rates (as defined in Exhibit 11)) from
the monthly Charges in effect as of the Master Agreement
Effective Date, then unless Vendor chooses to bear and be
responsible for such amounts in excess of CONFIDENTIAL
MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
Oncor may, at its option, terminate the applicable
Services Agreement by giving Vendor at least ninety (90) days'
prior notice and designating a date upon which such
termination shall be effective. Vendor shall not be entitled
to Termination Charges in connection with a termination on
this basis..
13.4 Software.
(a) Ownership and Use. Vendor represents, warrants and covenants
that it is either the owner of, or authorized to use, any and
all Software (other than Software that is part of Oncor
Contributed Assets) and used by Vendor in providing the
Services. As to any such Third Party Software that Vendor does
not own but is authorized to use, (other than Software that is
part of Oncor Contributed Assets), Vendor shall advise Oncor
as to the ownership and extent of Vendor's rights with regard
to such Software to the extent any limitation in such rights
would impair Vendor's performance of its obligations under
this Agreement.
(b) Performance. Vendor represents, warrants and covenants that
any Vendor Owned Software (other than Software that is part of
Oncor Contributed Assets) will Comply with its Specifications
and will provide the functions and features and operate in the
manner described therein.
(c) Developed Materials Compliance. Vendor warrants and covenants
that Developed Materials will Comply with the applicable
Specifications in all material respects and provide the
functions and features and operate in the manner described in
Schedule E to the applicable Services Agreement or otherwise
agreed by the Parties. Vendor shall promptly correct any
material failure to Comply.
(d) Nonconformity. In addition to the foregoing, in the event that
the Vendor Owned Software (other than Software that is part of
Oncor Contributed Assets) or Developed Materials do not Comply
with the Specifications and criteria set forth in this
Agreement, and/or materially and adversely affect the
Services, Vendor shall expeditiously repair or replace such
Software or Material with conforming Software or Material.
13.5 Non-Infringement.
(a) Performance of Responsibilities. Each Party represents and
warrants that it shall perform its responsibilities under this
Agreement in a manner that does not infringe, or constitute
an infringement or misappropriation of, any patent, copyright,
trademark, trade secret or other proprietary, intellectual
property or privacy rights of any third party; provided,
however, that the performing Party shall not have any
obligation or liability to the extent any infringement or
misappropriation is caused by (i) modifications made by the
other Party or its contractors or subcontractors, without the
knowledge or approval of the performing Party, (ii) the other
Party's combination of the performing Party's work product or
Materials with items not furnished, specified or reasonably
anticipated by the performing Party or contemplated by this
Agreement, (iii) a breach of this Agreement by the other
Party, or (iv) the failure of the other Party to use
corrections or modifications provided by the performing Party
offering equivalent features and functionality. Each Party
further represents and warrants that it will not use or create
materials in connection with the Services which are libelous,
defamatory or obscene.
13.6 Oncor 2003 Base Case. Oncor represents and warrants that it is not
aware of any material errors or omissions in the Oncor 2003 Base Case.
To the best of Oncor's knowledge, the year-to-date 2004 costs for the
services referred to in Section 4.1(a)(iv)(z) bear reasonable relation
to the Oncor 2003 Base Case, except with regard to the substantial
expansion in the customer care and call center services.
38
13.7 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT
(WHICH, FOR THE AVOIDANCE OF DOUBT, INCLUDES EACH OF THE SERVICES
AGREEMENTS), NEITHER PARTY MAKES ANY REPRESENTATIONS, CONDITIONS OR
WARRANTIES TO THE OTHER PARTY, WHETHER EXPRESS OR IMPLIED, INCLUDING
IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
14. INSURANCE AND RISK OF LOSS
Vendor shall comply with the provisions of Exhibit 9.
15. INDEMNITIES
15.1 Indemnity by Vendor. Vendor agrees to indemnify, defend and hold
harmless Oncor and its Affiliates and their respective officers,
directors, employees, agents, representatives, successors, and assigns
from and against any and all Losses due to third party claims
(excluding the claims of Eligible Recipients but not those of their
employees, representatives and agents) arising from or in connection
with any of the following:
(a) Representations and Warranties Vendor's breach of any of the
representations, and warranties set forth in this Agreement.
(b) Licenses, Leases and Contracts. Vendor's failure to observe or
perform any duties or obligations to be observed or performed
on or after the applicable Services Commencement Date by
Vendor under Third Party Software licenses, Equipment Leases
or Third Party Contracts used by Vendor to provide the
Services.
(c) Oncor Data or Proprietary Information. Vendor's breach of its
obligations with respect to Oncor Data or Oncor Proprietary
Information.
(d) Infringement. Infringement or misappropriation or alleged
infringement or alleged misappropriation of a patent, trade
secret, copyright, trademark or other proprietary or
intellectual property rights in breach of Vendor's
representation in Section 13.4 or 13.5.
(e) Government Claims. Claims by government regulators or agencies
for fines, penalties, sanctions, underpayments or other
remedies to the extent such fines, penalties, sanctions,
underpayments or other remedies relate to Vendor's breach of
this Agreement.
(f) Taxes. Taxes, together with interest and penalties, that are
the responsibility of Vendor under Section 10.4.
(g) Other Third Parties. Services, products or systems (not
constituting Services provided pursuant to this Agreement)
provided by Vendor to a third party.
(h) Affiliate or Subcontractor Claims. Any claim initiated by (A)
a Vendor Affiliate or Subcontractor asserting rights under
this Agreement other than a claim for which Oncor is obligated
to indemnify Vendor under this Agreement, or (B) any entity to
which Vendor assigned, transferred, pledged, hypothecated or
otherwise encumbered its rights to receive payments from Oncor
under this Agreement with Oncor's consent pursuant to Section
19.14.
(i) Vendor Personnel Injury Claims. Any claim by Vendor Personnel
for death or bodily injury suffered at an Oncor Facility other
than claims for death or bodily injury caused by any act,
omission, fault or negligence by Oncor.
(j) Employment Claims. Any claim (including claims by
Transitioned Employees) relating to any (i) violation by
Vendor or its officers, directors, employees, representatives
or agents, of any Laws or any common law protecting persons
or members of protected classes or categories, including Laws
prohibiting discrimination or harassment on the basis of
a protected characteristic, (ii) liability arising or
resulting from the employment of Vendor Personnel (including
Transitioned Employees) by Vendor (including liability for
any social security or other employment taxes, workers'
compensation claims and premium payments, and contributions
applicable to the wages and salaries of such Vendor Personnel)
(iii) payment or failure to pay any salary, wages or other
cash compensation due and owing to any Vendor Personnel
(including Transitioned Employees from and after their
Employment Effective Dates), (iv) employee pension or other
benefits of any Vendor Personnel (including Transitioned
Employees) accruing from and after their Employment Effective
Date, (v) other aspects of the employment relationship of
Vendor Personnel (including Transitioned Employees) with
Vendor or the termination of such relationship, including
claims for wrongful discharge, claims for breach of express or
implied employment contract and claims of joint employment;
and/or (vi) liability resulting from representations (oral or
written) to the Oncor employees identified on Schedule M to
the applicable Services Agreement by Vendor (or its respective
officers, directors, employees, representatives or
agents), or other acts or omissions with respect to the Oncor
employees identified on Schedule M to the applicable
Services Agreement by such persons or entities, including any
act, omission or representation made in connection with the
interview, selection, hiring and/or transition process, the
offers of employment made to such employees, the failure to
make offers to any such employees or the terms and conditions
of such offers (including compensation and employee benefits),
except, in each case, to the extent arising out of: (i) any
act, omission, fault or neglect of Oncor or Oncor Third Party
Contractors, (ii) errors or inaccuracies in the information
provided by Oncor and faithfully communicated by Vendor or
(iii) the failure of Oncor or Oncor Third Party Contractors to
comply with Oncor's responsibilities under this Agreement.
15.2 Indemnity by Oncor. Oncor agrees to indemnify, defend and hold harmless
Vendor and its officers, directors, employees, agents, representatives,
successors, and assigns, from and against any and all Losses due to
third party (excluding the claims of Vendor Affiliates and
Subcontractors, but not those of their employees, representatives and
agents) claims arising from or in connection with any of the following:
(a) Representations and Warranties. Oncor's breach of any of the
representations and warranties set forth in this Agreement.
(b) Licenses, Leases or Contracts. Oncor's failure to observe or
perform any duties or obligations to be observed or performed
by Oncor under any of the applicable Third Party Software
licenses, Equipment Leases or Third Party Contracts to the
extent Oncor is financially or operationally responsible under
this Agreement.
(c) Vendor's Proprietary Information. Oncor's breach of its
obligations with respect to Vendor's Proprietary Information.
(d) Infringement. Infringement or misappropriation or alleged
infringement or alleged misappropriation of a patent, trade
secret, trademark, copyright or other proprietary or
intellectual property rights in contravention of Oncor's
representations, warranties and covenants in Section 13.5.
(e) Taxes. Taxes, together with interest and penalties, that are
the responsibility of Oncor under Section 10.4.
(f) Government Claims. Claims by government regulators or agencies
for fines, penalties, sanctions, underpayments, or other
remedies to the extent such fines, penalties, sanctions,
underpayments, or other remedies related to Oncor's breach of
this Agreement.
(g) Oncor Affiliate, Eligible Recipient or Third Party Contractor
Claims. Any claim, initiated by a Oncor Affiliate, an Eligible
Recipient (other than Oncor) or a Oncor Third Party Contractor
asserting rights under this Agreement, other than a claim for
which Vendor is obligated to indemnify Oncor under this
Agreement.
(h) Employment Claims. Any claim relating to (i) violation by
Oncor or its respective officers, directors, employees,
representatives or agents, of any Laws or any common law
protecting persons or members of protected classes or
categories, including laws or regulations prohibiting
discrimination or harassment on the basis of a protected
characteristic, (ii) liability arising or resulting from the
employment of persons (including Transitioned Employees prior
to their Employment Effective Date) by Oncor (iii) payment or
failure to pay any salary, wages or other cash compensation
due and owing to any employee of Oncor (including Transitioned
Employees prior to their Employment Effective Dates), (iv)
employee pension or other benefits of any employee of Oncor
(including Transitioned Employees prior to their Employment
Effective Dates), (v) other aspects of the employment
relationship of any employee of Oncor (including Transitioned
Employees prior to their Employment Effective Dates and
provided, in no event will Oncor be liable for any claim
related to a Transitioned Employee's employment relationship
arising on or after such Transitioned Employee's Employment
Effective Date regardless of a finding by any court or
authoritative body that Oncor is or was an employer of such
Transitioned Employee on or after his or her Employment
Effective Date) and/or (vi) liability resulting from any
representations (oral or written) to the Oncor employees
identified on Schedule M to the applicable Services Agreement
by Oncor (or its officers, directors, employees,
representatives or agents), or other acts of Oncor prior to
the applicable Employment Effective Date in connection with
the selection and hiring by Vendor of the Oncor employees
identified on Schedule M to the applicable Services Agreement,
except, in each case, to the extent arising out of (i) any
act, omission, fault or neglect of Vendor (or its officers,
directors, employees, representatives or agents), (ii) errors
or inaccuracies in the information provided by Vendor and
faithfully communicated by Oncor, or (iii) the failure of
Vendor (or its officers, directors, employees, representatives
or agents) to comply with Vendor's responsibilities under this
Agreement.
(i) Oncor Personnel Injury Claims. Any claims by Oncor Personnel
for death or bodily injury suffered at a Vendor Facility to
the extent caused by any act, omission, fault or negligence by
Oncor.
15.3 Reserved.
15.4 Indemnification Procedures. With respect to claims which are subject to
indemnification under this Agreement (other than as provided in Section
15.6 with respect to claims covered by Section 15.1(f)), the following
procedures shall apply:
(a) Notice. Promptly after receipt by any entity entitled to
indemnification under this Agreement of notice of the
commencement or threatened commencement of any civil,
criminal, administrative, or investigative action or
proceeding involving a claim in respect of which the
indemnitee will seek indemnification hereunder, the indemnitee
shall notify the indemnitor of such claim. No delay or failure
to so notify an indemnitor shall relieve it of its obligations
under this Agreement except to the extent that such indemnitor
has suffered actual prejudice by such delay or failure. Within
forty-five (45) days following receipt of notice from the
indemnitee relating to any claim, but no later than five (5)
days before the date on which any response to a complaint or
summons is due, the indemnitor shall notify the indemnitee
that the indemnitor elects to assume control of the defense
and settlement of that claim (a "Notice of Election").
(b) Procedure Following Notice of Election. If the indemnitor
delivers a Notice of Election within the required notice
period, the indemnitor shall assume control (subject to
indemnities right to participate at its own expense)
over the defense and settlement of the claim; provided,
however, that (i) the indemnitor shall keep the indemnitee
reasonably apprised at all times as to the status of the
defense, and (ii) the indemnitor shall obtain the prior
written approval of the indemnitee before entering into any
settlement of such claim asserting any liability against the
indemnitee or imposing any liability, obligation or
restriction on the indemnitee or ceasing to defend against
such claim. The indemnitor shall not be liable for any legal
fees or expenses incurred by the indemnitee following the
delivery of a Notice of Election; provided, however, that to
the extent permissible under the applicable Law and
to the extent that such conduct does or would not, or is not
reasonably likely to result in the waiver or of abandonment
of legal privilege are in whole or in part, (i) the indemnitee
shall be entitled to employ counsel at its own expense
to participate in the handling of the claim, and (ii) the
indemnitor shall pay the fees and expenses associated with
such counsel if, in the reasonable judgment of the indemnitee,
based on a written opinion of counsel, there is a conflict
of interest with respect to such claim which is not otherwise
resolved or if the indemnitor has requested the assistance of
the indemnitee in the defense of the claim or the indemnitor
has failed to defend the claim diligently. The indemnitor
shall not be obligated to indemnify the indemnitee for any
amount paid or payable by such indemnitee in the settlement of
any claim if (i) the indemnitor has delivered a timely Notice
of Election and such amount was agreed to without the written
consent of the indemnitor, (ii) the indemnitee has not
provided the indemnitor with notice of such claim and a
reasonable opportunity to respond thereto, or (iii) the time
period within which to deliver a Notice of Election has not
yet expired.
(c) Procedure Where No Notice of Election Is Delivered. If the
indemnitor does not deliver a Notice of Election relating to
any claim within the required notice period, the indemnitee
shall have the right to defend the claim in such reasonable
manner as it may deem appropriate subject to the terms of this
Agreement. The indemnitor shall promptly reimburse the
indemnitee for all such reasonable costs and expenses incurred
by the indemnitee, including reasonable attorneys' fees.
15.5 Indemnification Procedures - Governmental Claims. With respect to
claims covered by Section 15.1(f), the following procedures
shall apply:
(a) Notice. Promptly after receipt by an indemnitee of notice of
the commencement or threatened commencement of any action or
proceeding involving a claim in respect of which the
indemnitee will seek indemnification pursuant to Section
15.1(f), the indemnitee shall notify the indemnitor of such
claim. No delay or failure to so notify the indemnitor shall
relieve the indemnitor of its obligations under this Agreement
except to the extent that the indemnitor has suffered actual
prejudice by such delay or failure.
(b) Procedure for Defense. The indemnitee shall be entitled, at
its option, to have the claim handled pursuant to Section 15.4
or to retain sole control over the defense and settlement of
such claim; provided that, the indemnitee shall (i) keep the
indemnitor reasonably appraised as to the status of the
defense (ii) consult with the indemnitor on a regular basis
regarding claim processing (including actual and anticipated
costs and expenses) and litigation strategy, (iii) obtain
prior written approval of the indemnitor before entering any
indemnitor settlement proposals or suggestions, and (iv) use
commercially reasonable efforts to minimize any amounts
payable or reimbursable by the indemnitor.
15.6 Subrogation. Except as otherwise provided in Article 14, in the event
that an indemnitor shall be obligated to indemnify an indemnitee
pursuant to any provision of this Agreement, the indemnitor shall, upon
payment of such indemnity in full, be subrogated to all rights of the
indemnitee with respect to the claims to which such indemnification
relates but only to the extent it is in compliance with its indemnity
obligations related to such rights.
16. LIABILITY
16.1 Force Majeure.
(a) General. Subject to Section 16.2(d), no Party shall be liable
for any default or delay in the performance of its obligations
under this Agreement if and to the extent such default or
delay is caused by fire, earthquake, elements of nature or
acts of God, wars, riots, civil disorders, rebellions or
revolutions, acts of terrorism, strikes, lockouts, labor
disputes, inter-carrier telecommunications backbone failures,
or any other similar cause beyond the reasonable control of
such Party; except to the extent that the non-performing
Party; is at fault in failing to prevent or causing such
default or delay, and provided that such default or delay
cannot, or could not have been, reasonably be circumvented by
the non-performing Party through the use of alternate sources,
workaround plans or other means. A strike, lockout or labor
dispute involving Vendor (including Vendor Personnel) shall
not excuse Vendor from its obligations hereunder. Neither
the failure by a Subcontractor to provide or perform any goods
or services to Vendor (other than to the extent attributable
to a force majeure event as described in the first sentence
of this subsection) nor the breach by Subcontractor of any of
its obligations to Vendor shall constitute a force majeure
event.
(b) Duration and Notification. Upon the occurrence and during the
continuance of such force majeure event the non-performing
Party shall be excused from further performance or observance
of the obligation(s) so affected for as long as such
circumstances prevail and such Party continues to use
commercially reasonable efforts to recommence performance or
observance whenever and to whatever extent possible without
delay. Any Party so prevented, hindered or delayed in its
performance shall, as quickly as practicable under the
circumstances, notify the Party to whom performance is due by
telephone (to be confirmed in writing within two (2) days of
the inception of such delay) and describe at a reasonable
level of detail the circumstances of the force
majeure event, the steps being taken to address such force
majeure event, and the expected duration of such force majeure
event.
(c) Substitute Services; Termination. If any event described in
Section 16.1(a) has substantially prevented, hindered or
delayed, the performance by Vendor of Services necessary for
the performance of critical Oncor functions for longer than
the recovery period specified in the applicable disaster
recovery plan, Vendor may procure such Services from an
alternate source, and Vendor shall be solely liable for
payment for such services from the alternate source for so
long as the delay in performance shall continue, provided that
Oncor continues to pay the applicable Charges for all Services
that it continues to receive from Vendor or an alternate
source at Vendor's expense. In addition, if any event
described in Section 16.1(a) substantially and materially
prevents, hinders or delays the performance by Vendor of
Services necessary for the performance of critical Oncor
functions without provision of an alternative acceptable to
Oncor in its sole discretion (i) for more than five
(5) consecutive days, Oncor, at its option, may terminate any
portion of this Agreement so affected without payment of
Termination Charges and the Charges shall be equitably
adjusted to reflect those terminated Services, or (ii) if a
material number of critical Oncor Functions are so affected
for seven (7) days, Oncor, at its option, may terminate this
Agreement in its entirety without payment of Termination
Charges. Vendor shall not have the right to additional
payments or increased usage charges as a result of any force
majeure occurrence affecting Vendor's ability to perform.
(d) Disaster Recovery. Upon the occurrence of a force majeure
event, Vendor shall implement promptly, as appropriate, the
disaster recovery plan and provide disaster recovery services
as described in Schedule E to the applicable Services
Agreement. The occurrence of a force majeure event shall not
relieve Vendor of its obligation to implement the disaster
recovery plan and provide disaster recovery services.
Notwithstanding any implication to the contrary, Vendor is not
responsible for the efficacy of Oncor's disaster recovery
plan.
(e) Payment Obligation. If Vendor fails to provide Services in
accordance with this Agreement due to the occurrence of a
force majeure event, all amounts payable to Vendor hereunder
shall be equitably adjusted in a manner such that Oncor is not
required to pay any amounts for Services that it is not
receiving.
(f) Allocation of Resources. Without limiting Vendor's obligations
under this Agreement, whenever a force majeure event or
disaster, causes Vendor to allocate limited resources between
or among Vendor's customers and its or their Affiliates,
Vendor shall not provide to any other customers or its or
their Affiliates priority over Oncor. In no event will Vendor
unreasonably re-deploy or re-assign any Key Vendor Personnel
to Oncor's material detriment to another customer or account
in the event of the occurrence of a force majeure event or any
other event.
16.2 Limitation of Liability.
(a) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY
SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL,
CONSEQUENTIAL, COLLATERAL, EXEMPLARY OR PUNITIVE DAMAGES,
INCLUDING LOST PROFITS, REGARDLESS OF THE FORM OF THE ACTION
OR THE THEORY OF RECOVERY, EVEN IF SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.
(b) ADDITIONALLY, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT,
THE TOTAL AGGREGATE LIABILITY OF EITHER PARTY, FOR ALL CLAIMS
ASSERTED BY THE OTHER PARTY UNDER OR IN CONNECTION WITH THIS
AGREEMENT, REGARDLESS OF THE FORM OF THE ACTION OR THE
THEORY OF RECOVERY, SHALL BE LIMITED TO THE AGGREGATE TOTAL
CHARGES PAID UNDER ALL OF THE SERVICES AGREEMENTS FOR
THE [CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH
THE COMMISSION] PERIOD PRECEDING THE ACT OR OMISSION
GIVING RISE TO SUCH LIABILITY OR, IN THE EVENT CHARGES
HAVE NOT BEEN PAID FOR [CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION] UNDER ALL OF THE
INITIAL SERVICES AGREEMENTS, AN AMOUNT EQUAL TO
[CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION] TIMES THE AGGREGATE TOTAL CHARGES PAID UNDER ALL
OF THE INITIAL SERVICES AGREEMENTS IN THE [CONFIDENTIAL
MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION]
PRECEDING SUCH ACT OR OMISSION ("DAMAGES CAP"). AT THE END
OF THE THIRD, SIXTH AND NINTH YEARS THE DAMAGES CAP SHALL BE
RESET TO AN AMOUNT EQUAL TO THE AGGREGATE TOTAL CHARGES PAID
UNDER ALL OF THE SERVICES AGREEMENTS FOR THE [CONFIDENTIAL
MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION]
PERIOD PRECEDING THE THIRD, SIXTH OR NINTH YEAR.
(c) Exceptions to Limitations of Liability. The limitations and
exculpations of liability set forth in Section 16.2(a) and
Section 16.2(b) shall not apply with respect to:
(i) Losses occasioned by the willful misconduct, fraud or
gross negligence of a Party.
(ii) Amounts paid with respect to third party claims that
are the subject of indemnification under this
Agreement, other than claims under Sections 15.1(a),
(b), and (j), Section 15.2(a), (b), and (h) and
Section 1.4 of Exhibit 2.
(iii) Losses occasioned by Vendor's refusal to provide
Termination Assistance Services.
(iv) Amounts paid under Section 15.1 and Section 15.2 with
respect to death or bodily injury of an agent,
employee, customer, business invitee, business visitor
or other person or damage, loss or destruction of real
or tangible personal property (excluding software,
hardware and data).
(d) Acknowledged Direct Damages. The Parties acknowledge that
amounts paid by a Party to a third party that are the subject
of indemnification under this Agreement shall be considered
direct damages under this Agreement.
(e) Items Not Considered Damages. The following shall not be
considered damages subject to, and shall not be counted toward
the liability cap specified in, Section 16.2(a) and 16.2(b):
(i) Amounts withheld by Oncor in accordance with this
Agreement due either to incorrect Charges by Vendor or
non-conforming Services.
(ii) Amounts paid by Oncor but subsequently recovered from
Vendor due either to incorrect Charges by Vendor or
non-conforming Services.
(iii) Invoiced Charges and other amounts that are due and
owing to Vendor for Services under this Agreement.
(f) Acknowledged Damages. Any payment of any liabilities under
this article by either Party shall be only for those awarded
in a final judgment or award by a court of competent
jurisdiction or by qualified arbiters.
17. DISPUTE RESOLUTION
17.1 Informal Dispute Resolution. Prior to the initiation of formal dispute
resolution procedures with respect to any dispute, other than as
provided in Section 17.1(c) or Section 18.10, the Parties shall first
attempt to resolve such dispute informally, as follows:
(a) Initial Effort. The Parties agree that the Oncor Account
Executive and the Vendor Account Executive shall attempt in
good faith to resolve all disputes. In the event the Oncor
Account Executive and the Vendor Account Executive are unable
to resolve a dispute within fourteen (14) days, such Party may
refer the dispute for resolution to the senior corporate
executives specified in Section 17.1(b) upon written notice
to the other Party.
(b) Escalation. Within five (5) days of a notice under Section
17.1(a) referring a dispute for resolution by senior corporate
executives, the Oncor Account Executive and the Vendor
Account Executive will each prepare and provide to the
Vendor's CEO or his or her designee and a member of senior
management of Oncor, respectively, summaries of the
non-privileged relevant information and background of the
dispute, along with any appropriate non-privileged supporting
documentation, for their review. The designated senior
corporate executives will confer as often as they deem
reasonably necessary in order to gather and furnish to the
other all non-privileged information with respect to the
matter in issue which the Parties believe to be appropriate
and germane in connection with its resolution. The designated
senior corporate executives shall discuss the problem
and negotiate in good faith in an effort to resolve the
dispute without the necessity of any formal proceeding. The
specific format for the discussions will be left to the
discretion of the designated senior corporate executives, but
may include the preparation of agreed-upon statements of fact
or written statements of position.
(c) Prerequisite to Formal Proceedings. Formal proceedings for
the resolution of a dispute may not be commenced until the
earlier of:
(i) the designated senior corporate executives under
Section 17.1(b) concluding in good faith that
amicable resolution through continued negotiation of
the matter does not appear likely; or
(ii) thirty (30) days after the initial notice under
Section 17.1(a) referring the dispute to senior
corporate executives.
The provisions and time periods specified in this Section 17.1
shall not be construed to prevent a Party from instituting, and a Party
is authorized to institute, formal proceedings earlier to (A) avoid the
expiration of any applicable limitations period, (B) preserve a
superior position with respect to other creditors, or (C) address a
claim arising out of or relating to a Party's obligations under Section
4.2, Article 12 or a dispute subject to Section 18.10
17.2 Jurisdiction. Each Party irrevocably agrees that any legal claim,
action, suit or proceeding brought by it in any way arising out of this
Agreement must be brought solely and exclusively in the state and
federal courts in Dallas, Texas, and each Party irrevocably submits to
the sole and exclusive jurisdiction of the state and federal courts in
Dallas, Texas in personam, generally and unconditionally with respect
to any action, suit or proceeding brought by it or against it by the
other Party.
17.3 Waiver of Jury Trial. EACH OF THE PARTIES IRREVOCABLY WAIVES, TO THE
EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY AND ALL RIGHTS TO
IMMUNITY BY SOVEREIGNTY OR OTHERWISE IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF, OR RELATING TO, THIS AGREEMENT.
17.4 Continued Performance. Subject to Section 16.1 regarding force majeure
events, each Party agrees that it shall, unless otherwise directed by
the other Party, continue performing its obligations under this
Agreement while any dispute is being resolved; provided, that this
provision shall not operate or be construed as extending the Term or
prohibiting or delaying a Party's exercise of any right it may have to
terminate this Agreement in accordance with this Agreement. For the
avoidance of doubt, Oncor Data may not be withheld by Vendor pending
the resolution of any dispute.
17.5 Governing Law. This Agreement and performance under it shall be
governed by and construed in accordance with the applicable laws of the
State of Texas, without giving effect to the principles thereof
relating to conflicts of laws. The application of the United Nations
Convention on Contracts for the International Sale of Goods is
expressly excluded.
18. TERMINATION
18.1 Termination for Cause.
(a) By Oncor. If Vendor:
(i) commits a material breach of this Master Agreement,
which breach is not cured within forty-five (45) days
after notice of the breach from Oncor or such longer
period as may be set forth in this Master Agreement
or the applicable Service Agreement;
(ii) commits a material breach of this Master Agreement
which is not capable of being cured within the period
specified pursuant to Section 18.1(a)(i); or
(iii) commits numerous breaches of this Master Agreement of
which Vendor has received formal notice which
collectively constitute a material breach;
then Oncor may, by giving notice to Vendor, terminate this
Master Agreement as of a date specified in the notice of
termination.
(b) By Vendor. In the event that Oncor fails to pay Vendor
undisputed Charges exceeding in the aggregate three (3) months
of Charges due to Vendor under all Services Agreements and
fails to cure such default within thirty (30) days of notice
from Vendor of the possibility of termination for failure to
make such payment, Vendor may, by notice to Oncor, terminate
this Master Agreement.
18.2 Termination Upon Vendor Change of Control. In the event of a Change in
Control of Vendor (or that portion of Vendor providing Services under
this Agreement) or the Entity that Controls Vendor, then Oncor may at
its option terminate this Master Agreement by giving Vendor at least
one hundred eighty days (180) days' prior notice and designating a date
upon which such termination shall be effective; provided, however, if
as a result of such Change in Control of Vendor, a Oncor Competitor
Controls Vendor, then Oncor may terminate this Master Agreement by
giving Vendor at least thirty (30) days' prior notice, and such Oncor
Competitor shall be prohibited from any contact with Oncor Data, Oncor
Proprietary Information and any and all other information about the
Oncor account, including discussions with Vendor Personnel regarding
specifics relating to the Services.
18.3 Termination Upon Oncor Change of Control. In the event of a Change in
Control of Oncor or the Entity that Controls Oncor, then Oncor may at
its option within twelve months of the closing of the transaction
effecting such Change in Control terminate this Master Agreement by
giving Vendor at least one hundred eighty days (180) days' prior notice
and designating a date upon which such termination shall be effective.
18.4 Termination for Insolvency. In the event that any Party (i) files for
bankruptcy, (ii) becomes or is declared insolvent, or is the subject of
any bona fide proceedings related to its liquidation, administration,
provisional liquidation, insolvency that is not dismissed within sixty
(60) days, or the appointment of a receiver or similar officer for it,
(iii) passes a resolution for its voluntary liquidation, (iv) has a
receiver or manager appointed over all or substantially all of its
assets, (v) makes an assignment for the benefit of all or substantially
all of its creditors, (vi) enters into an agreement or arrangement for
the composition, extension, or readjustment of substantially all of its
obligations or any class of such obligations, or (vii) experiences an
event analogous to any of the foregoing in any jurisdiction in which
any of its assets are situated, then the other Party may terminate this
Master Agreement as of a date specified in a termination notice;
provided, however, that Vendor shall not have the right to exercise
such termination under this Section so long as Oncor pays for the
Services. If any Party elects to terminate this Master Agreement due to
the insolvency of the other Party, such termination will be deemed to
be a termination for cause.
18.5 Oncor Rights Upon Vendor's Bankruptcy.
(a) General Rights. In the event of Vendor's bankruptcy or other
formal procedure referenced in Section 18.4 or of the filing
of any petition under bankruptcy laws affecting the rights of
Vendor which is not stayed or dismissed within thirty (30)
days of filing, in addition to the other rights and remedies
set forth herein, to the maximum extent permitted by Law,
Oncor will have the immediate right to retain and take
possession for safekeeping all Oncor Data, Oncor Proprietary
Information, Oncor licensed Third Party Software, Oncor owned
Equipment, Oncor owned Systems, Oncor owned Materials, Oncor
owned Developed Materials, and all other Software, Equipment,
Systems or Materials to which Oncor is or would be entitled
during the Term or upon the expiration or termination of this
Agreement. Vendor shall cooperate fully with Oncor and
assist Oncor in identifying and taking possession of the items
listed in the preceding sentence. Oncor will have the right
to hold such Oncor Data, Proprietary Information, Software,
Equipment, Systems and Materials until such time as the
trustee or receiver in bankruptcy or other appropriate
insolvency office holder can provide adequate assurances and
evidence to Oncor that they will be protected from sale,
release, inspection, publication, or inclusion in any publicly
accessible record, document, material or filing. Vendor and
Oncor agree that without this material provision, Oncor would
not have entered into this Agreement or provided any right to
the possession or use of Oncor Data, Proprietary Information,
Software, Equipment, Systems or Materials covered by
this Agreement.
(b) Oncor Rights in Event of Bankruptcy Rejection. Notwithstanding
any other provision of this Agreement to the contrary, in the
event that Vendor becomes a debtor under the United States
Bankruptcy Code (11 U.S.C.ss.101 - 1330 as amended
(the "Bankruptcy Code")) and rejects this Master Agreement
pursuant to Section 365 of the Bankruptcy Code (a "Bankruptcy
Rejection"), (i) any and all of the licensee and sublicensee
rights of Oncor arising under or otherwise set forth in this
Agreement, including the rights of Oncor referred to in the
Services Agreements, shall be deemed fully retained by and
vested in Oncor as protected intellectual property rights
under Section 365(n)(1)(B) of the Bankruptcy Code and further
shall be deemed to exist immediately before the commencement
of the bankruptcy case in which Vendor is the debtor,
(ii) Oncor shall have all of the rights afforded to non-debtor
licensees and sublicensees under Section 365(n) of the
Bankruptcy Code; and (iii) to the extent any rights
of Oncor under this Agreement which arise after the
termination or expiration of this Master Agreement are
determined by a bankruptcy court not to be "intellectual
property rights" for purposes of Section 365(n), all of such
rights shall remain vested in and fully retained by Oncor
after any Bankruptcy Rejection as though this Agreement were
terminated or expired. Oncor shall under no circumstances be
required to terminate this Master Agreement after a
Bankruptcy Rejection in order to enjoy or acquire any of its
rights under this Agreement, including without limitation any
of the rights of Oncor referenced in the Services Agreements.
18.6 Termination for Vendor Degraded Financial Condition. If the long term,
unsecured, unsubordinated debt rating of Vendor, in the event that
Vendor is rated, otherwise Capgemini S.A., issued by one or more of the
Rating Agencies is downgraded below Investment Grade, Oncor may, in its
sole discretion, terminate this Master Agreement by giving Vendor at
least ninety (90) days' prior notice. "Investment Grade" means a rating
from a Rating Agency equal to or greater than (i) "Baa3" from Xxxxx'x
Investors Service (or its equivalent grade in the event of a change in
rating scales by Xxxxx'x Investors Service) or (ii) "BBB-" from
Standard & Poors or Fitch Ratings (or their equivalent grade in the
event of a change in rating scales by Standard & Poors or Fitch
Ratings). "Ratings Agency" means each of Xxxxx'x Investors Services,
Standard & Poors or Fitch Ratings (or any successor to the ratings
business thereof).
18.7 Market Check. Notwithstanding anything to the contrary in this
Agreement, with regard to each Services Agreement, Oncor shall have the
right commencing July 1, 2010 to solicit proposals from, and thereafter
negotiate with, third parties for the provision of the services being
provided by Vendor under such Services Agreement. In connection
therewith Oncor shall be permitted to provide to the third party the
applicable Services Agreement. If a third party offers to provide such
services for charges less than the then current Charges, then unless
Vendor agrees to provide such services on the terms and conditions
being offered by the third party, including the charges being offered
by the third party, within 60 days after notice to Vendor, Oncor may
terminate the applicable Services Agreement as of June 30, 2011 and
enter into a services agreement on such terms and conditions with the
third party.
18.8 Termination For Convenience. No earlier than two years after any
Services Agreement Commencement Date, Oncor may terminate the
applicable Services Agreement for convenience and without cause upon
six months prior notice to Vendor setting forth termination date. Upon
the completion of all Termination Assistance Services, Oncor shall pay
to Vendor the Termination Charges set forth in Schedule N to the
applicable Services Agreement. Except as set forth in this Section, no
termination fees, charges or other amounts shall be payable by Oncor in
connection with any termination of this Agreement; provided, however,
that Oncor shall pay any applicable Charges for Termination Assistance
Services as set forth in Exhibit 11 and any fees as set forth in
Section 4.3(c) of the Services Agreements. If Oncor elects to terminate
the IT Services Agreement, the Customer Care Services Agreement or the
Revenue Management Services Agreement pursuant to this Section 18.8,
then such termination shall be deemed a termination of all Services
Agreements and this Master Agreement and Oncor shall be responsible for
the Termination Charges related to terminating the Master Agreement set
forth in Schedule N.2 to each of the Services Agreements; for the
avoidance of doubt, Oncor shall not be responsible for any individual
Termination Charges for each of the Services Agreements.
18.9 Cross Termination Rights and Termination Charges.
(a) This Master Agreement shall automatically terminate upon the
expiration or termination of all the Services Agreements.
(b) Upon the expiration or termination of this Master Agreement
all of the Services Agreements shall automatically terminate.
(c) Upon the termination of any of the IT Services Agreement or
the Revenue Management Services Agreement or the Customer Care
Services Agreement for any reason, Oncor may by giving notice
to Vendor terminate this Master Agreement and/or any other
Services Agreement.
(d) Except as expressly set forth in this Article or in a Services
Agreement, there shall be no Termination Charges in connection
with any termination of this Agreement.
18.10 Equitable Remedies. Vendor acknowledges that, in the event it breaches
(or attempts or threatens to breach) its obligation to provide
Termination Assistance Services as provided in Section 4.2, its
obligation respecting continued performance in accordance with Section
17.3, or its obligations respecting Proprietary Information in Section
12.3, Oncor will be irreparably harmed. In such a circumstance, Oncor
may proceed directly to court. If a court of competent jurisdiction
should find that Vendor has breached (or attempted or threatened to
breach) any such obligations, Vendor agrees that without any additional
findings of irreparable injury or other conditions to injunctive relief
(including without the posting of any bond), it shall not oppose the
entry of an appropriate order compelling performance by Vendor and
restraining it from any further breaches (or attempted or threatened
breaches). Oncor acknowledges that, in the event it breaches (or
attempts or threatens to breach) its obligations respecting Proprietary
Information in Section 12.3, Vendor will be irreparably harmed. In such
a circumstance, Vendor may proceed directly to court. If a court of
competent jurisdiction should find that Oncor has breached (or
attempted or threatened to breach) any such obligations, Oncor agrees
that without any additional findings of irreparable injury or other
conditions to injunctive relief (including without the posting of any
bond), it shall not oppose the entry of an appropriate order compelling
performance by Oncor and restraining it from any further breaches (or
attempted or threatened breaches).
19. GENERAL
19.1 Binding Nature and Assignment. This Agreement is binding on the Parties
and their respective successors and permitted assigns. Neither Party
may, or will have the power to, assign this Agreement without the prior
written consent of the other. Any attempted assignment that does not
comply with the terms of this Section shall be null and void.
19.2 Entire Agreement; Amendment. The Transaction Agreements, including any
Exhibits or attachments referred to herein or therein and attached
hereto or thereto, each of which is incorporated herein for all
purposes, constitute the entire agreement between the Parties with
respect to the subject matter hereof and thereof. There are no
agreements, representations, warranties, promises, covenants,
commitments or undertakings other than those expressly set forth herein
or therein. The Transaction Agreements supersede all prior agreements,
representations, warranties, promises, covenants, commitments or
undertaking, whether written or oral, with respect to the subject
matter contained herein and therein. No amendment, modification,
change, waiver, or discharge hereof or any increase in the volume or
type of Services (including New Services) shall be valid unless in
writing and signed by, in the case of Oncor, the Oncor Account
Executive, and in the case of Vendor, the Vendor Account Executive.
19.3 Notices. All notices, notifications, requests, demands, waivers,
consents, approvals, agreements, authorizations, acknowledgments,
communications or determinations required under this Agreement shall be
in writing and shall be delivered in hard copy using one of the
following methods and shall be deemed delivered upon receipt: (i) by
hand; (ii) by an express courier with a reliable system for tracking
delivery; or (iii) by registered or certified mail, return receipt
requested, postage prepaid as follows:
In the case of Oncor:
ONCOR ELECTRIC DELIVERY COMPANY
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxx
With a copy to:
ONCOR ELECTRIC DELIVERY COMPANY
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Fax: 000-000-0000
Attention: General Counsel
and
In the case of Vendor:
CAPGEMINI ENERGY LP
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Fax: 000-000-0000
Attention: Chief Executive Officer
With a copy to:
CAPGEMINI ENERGY LP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Attention: General Counsel
A Party may change its address or designee for notification purposes by
giving the other Party notice of the new address or designee at least
30 days prior to the date upon which it shall become effective.
19.4 Counterparts. This Agreement may be executed in several counterparts,
all of which taken together shall constitute one single agreement
between the Parties hereto.
19.5 Headings. The article and section headings and the table of contents
used in this Agreement are for reference and convenience only and shall
not be considered in the interpretation of this Agreement.
19.6 Relationship of Parties. Except as expressly provided in this
Agreement, Vendor is not an agent of Oncor and has no right, power or
authority, expressly or impliedly, to represent or bind Oncor as to any
matters, except as expressly authorized in this Agreement.
19.7 Severability. In the event that any provision of this Agreement
conflicts with the law under which this Agreement is to be construed or
if any such provision is held invalid or unenforceable by a court with
jurisdiction over the Parties, such provision shall be deemed to be
restated to reflect as nearly as possible the original intentions of
the Parties in accordance with applicable law. The remaining provisions
of this Agreement and the application of the challenged provision to
persons or circumstances other than those as to which it is invalid or
unenforceable shall not be affected thereby, and each such provision
shall be valid and enforceable to the full extent permitted by law.
19.8 Approvals and Consents. An approval or consent given by a Party under
this Agreement shall not relieve the other Party from responsibility
for complying with the requirements of this Agreement, nor shall it be
construed as a waiver of any rights under this Agreement, except as and
to the extent otherwise expressly provided in such approval or consent.
Except as specifically set forth in this Agreement, all consents and
approvals to be given by either Party under this Agreement will not be
unreasonably withheld, delayed or denied. All consents, approvals,
requests and authorizations will be given in writing.
19.9 Waiver of Default; Cumulative Remedies.
(a) Waiver of Default. A delay or omission by either Party in
exercising any right or power under this Agreement shall not
be construed to be a waiver thereof. A waiver by either of the
Parties of any of the covenants 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 covenant. All
waivers must be in writing and signed by the Party waiving its
rights.
(b) Cumulative Remedies. All remedies provided for in this
Agreement shall be cumulative and in addition to and not in
lieu of any other remedies available to either Party at law,
in equity or otherwise.
19.10 Survival. Any provision of this Agreement which contemplates
performance or observance subsequent to any termination or expiration
of this Agreement shall survive any termination or expiration of this
Agreement and continue in full force and effect.
19.11 Publicity. Neither Party shall use the other Party's or the other
Party's Affiliate's name, trade or service xxxx or other identifying
information or refer to the other Party directly or indirectly in any
media release, public announcement, or public disclosure relating to
this Agreement, including in any advertising, promotional or marketing
materials, customer lists or business presentations without the prior
written consent of the other Party prior to each such use or release.
Upon Vendor's reasonable request, Oncor shall cooperate with Vendor, at
Vendor's expense, in marketing to third parties the services offered by
the Vendor .
19.12 Export. The Parties acknowledge that certain equipment, Software and
technical data to be provided hereunder and certain transactions
hereunder may be subject to export controls under the laws and
regulations of the United States, the European Union, the United
Nations and other jurisdictions. No Party shall export or re-export any
such items or any direct product thereof or undertake any transaction
or service in violation of any such laws or regulations. To the extent
within Vendor's control, Vendor shall be responsible for, and shall
coordinate and oversee, compliance with such export laws in respect of
such items exported or imported hereunder.
19.13 Third Party Beneficiaries. Except as expressly provided herein, this
Agreement is entered into solely between, and may be enforced only by,
Oncor and Vendor. This Agreement shall not be deemed to create any
rights or causes of action in or on behalf of any third parties,
including without limitation employees, suppliers and customers of a
Party, or to create any obligations of a Party to any such third
parties. Notwithstanding the immediately preceding sentence, Vendor
acknowledges and agrees that (a) Oncor shall be entitled to assert
actions and claims against Vendor on behalf of each Eligible Recipient
that has received Services as if such Eligible Recipient were a party
to this Agreement, (b) direct damages suffered by each Eligible
Recipient arising out of or relating to Vendor's performance or failure
to perform under this Agreement shall be deemed to be direct damages of
Oncor and (c) the damages suffered by each Eligible Recipient of the
type contemplated and limited by Section 16.2 shall be deemed to be
damages of Oncor under Section 16.2; provided, that if any Law
nullifies or limits the results intended by this sentence, each
adversely affected Eligible Recipient shall be considered an express
third party beneficiary of this Agreement and shall be entitled to
assert actions and claims directly against Vendor as if such Eligible
Recipient were a party to this Agreement.
19.14 Covenant Against Pledging. Vendor agrees that, without the prior
written consent of Oncor, it shall not assign, transfer, pledge,
hypothecate or otherwise encumber its rights to receive payments from
Oncor under this Agreement for any reason whatsoever.
19.15 Order of Precedence. In the event of a conflict between this Master
Agreement and any Services Agreement, the terms of this Master
Agreement shall prevail. In the event of a conflict between this Master
Agreement and any Exhibit or Schedule hereto the terms of this Master
Agreement shall prevail.
19.16 Hiring of Employees.
(a) Solicitation and Hiring. Except as expressly set forth herein,
during the Term and for a period of twelve (12) months
thereafter, Vendor will neither solicit for employment
directly or indirectly, nor employ, any employees of
Oncor or individual Oncor Third Party Contractors without the
prior approval of Oncor. Except as expressly set forth herein
in connection with the expiration or termination of this
Agreement, during the Term and for a period of twelve (12)
months thereafter, Oncor will neither solicit for employment
directly or indirectly, nor employ, any employee of Vendor
involved in the performance of Vendor's obligations under
this Agreement without the prior consent of Vendor. In each
case, the prohibition on solicitation and hiring shall extend
ninety (90) days after the termination of the employee's
employment or, in the case of Vendor employees, the cessation
of his or her involvement in the performance of Services. This
provision shall not operate or be construed to prevent or
limit any employee's right to practice his or her profession
or to utilize his or her skills for another employer or to
restrict any employee's freedom of movement or association.
(b) Publications. Neither the publication of classified
advertisements in newspapers, periodicals, Internet bulletin
boards, or other publications of general availability or
circulation nor the consideration and hiring of persons
responding to such advertisements shall be deemed a breach of
this Section, unless the advertisement and solicitation is
undertaken as a means to circumvent or conceal a violation of
this provision and/or the hiring party acts with knowledge of
this hiring prohibition.
19.17 Further Assurances. Each Party covenants and agrees that, subsequent to
the execution and delivery of this Agreement and without any additional
consideration, each Party 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.
19.18 Liens. Vendor will not file, or by its action or inaction permit, any
liens to be filed on or against property or realty of Oncor. In the
event that any such liens arise as a result of Vendor's action or
inaction, Vendor will obtain a bond to fully satisfy such liens or
otherwise remove such liens at its sole cost and expense within ten
(10) days.
19.19 Acknowledgment. The Parties each acknowledge that the terms and
conditions of this Agreement have been the subject of active and
complete negotiations, and that such terms and conditions should 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.
IN WITNESS WHEREOF, the parties have caused this Master Agreement to be
executed by their respective duly authorized representatives as of the Master
Agreement Effective Date.
ONCOR ELECTRIC DELIVERY COMPANY CAPGEMINI ENERGY LP
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxx Xxxxx
--------------------------------- ----------------------------------
Title: ----------------------------- Title: -----------------------------
Date: ----------------------------- Date: -----------------------------
Table of Contents
Page
1. CONDITIONS PRECEDENT, BACKGROUND AND OBJECTIVES.........................................................2
1.1 Guarantee......................................................................................2
1.2 Services and Goals and Objectives..............................................................2
1.3 Interpretation.................................................................................2
2. DEFINITIONS AND DOCUMENTS...............................................................................3
2.1 Definitions....................................................................................3
2.2 Other Terms....................................................................................3
2.3 Services Agreements and Field Services.........................................................3
3. TERM....................................................................................................4
3.1 Initial Term...................................................................................4
3.2 Extension......................................................................................4
3.3 Services Agreement.............................................................................4
4. SERVICES................................................................................................4
4.1 General........................................................................................4
4.2 Termination Assistance Services................................................................5
4.3 Use of Third Parties...........................................................................6
4.4 Employee Transfers.............................................................................7
4.5 Governance.....................................................................................7
5. RESERVED................................................................................................7
6. FACILITIES, SOFTWARE, EQUIPMENT, CONTRACTS AND ASSETS ASSOCIATED WITH THE PROVISION OF SERVICES.........7
6.1 Service Facilities.............................................................................7
6.2 Use of Vendor Facilities.......................................................................9
6.3 Oncor Rules/Employee Safety....................................................................9
6.4 Notice of Defaults............................................................................11
7. SERVICE LEVELS.........................................................................................11
7.1 General.......................................................................................11
7.2 Service Level Credits.........................................................................11
7.3 Problem Analysis..............................................................................11
7.4 Continuous Improvement Reviews................................................................11
-i-
Table of Contents
(continued)
Page
7.5 Measurement and Monitoring....................................................................12
7.6 Notice of Adverse Impact......................................................................12
7.7 Key Vendor Personnel..........................................................................12
7.8 Vendor Account Executive......................................................................14
7.9 Vendor Personnel Are Not Oncor Employees; Independent Relationship............................14
7.10 Replacement, Qualifications, and Retention of Vendor Personnel................................15
7.11 Conduct of Vendor Personnel...................................................................15
7.12 Substance Abuse...............................................................................16
8. VENDOR RESPONSIBILITIES................................................................................16
8.1 Policy and Procedures Manual..................................................................16
8.2 Reports.......................................................................................16
8.3 Access to Specialized Vendor Skills and Resources.............................................16
8.4 Audit Rights..................................................................................16
8.5 Agency and Disbursements......................................................................19
8.6 Subcontractors................................................................................20
8.7 Requirement of Writing........................................................................21
9. Oncor RESPONSIBILITIES.................................................................................21
9.1 Responsibilities..............................................................................21
9.2 Savings Clause................................................................................21
9.3 Contribution Failure..........................................................................22
10. CHARGES................................................................................................22
10.1 General.......................................................................................22
10.2 Pass-Through Expenses.........................................................................23
10.3 Incidental Expenses...........................................................................24
10.4 Taxes.........................................................................................24
10.5 New Services..................................................................................26
10.6 Proration.....................................................................................28
10.7 Refundable Items..............................................................................28
10.8 Oncor Benchmarking Reviews....................................................................28
11. INVOICING AND PAYMENT..................................................................................29
-ii-
Table of Contents
(continued)
Page
11.1 Invoicing.....................................................................................29
11.2 Payment Due...................................................................................30
11.3 Set Off.......................................................................................30
11.4 Disputed Charges..............................................................................30
12. ONCOR DATA AND OTHER PROPRIETARY INFORMATION...........................................................30
12.1 Oncor Ownership of Oncor Data.................................................................30
12.2 Safeguarding Oncor Data.......................................................................31
12.3 Confidentiality...............................................................................32
12.4 File Access...................................................................................35
13. REPRESENTATIONS AND WARRANTIES.........................................................................35
13.1 Work Standards................................................................................35
13.2 Authorization.................................................................................35
13.3 Compliance with Laws..........................................................................36
13.4 Software......................................................................................37
13.5 Non-Infringement..............................................................................38
13.6 Oncor 2003 Base Case..........................................................................38
13.7 Disclaimer....................................................................................39
14. INSURANCE AND RISK OF LOSS.............................................................................39
15. INDEMNITIES............................................................................................39
15.1 Indemnity by Vendor...........................................................................39
15.2 Indemnity by Oncor............................................................................40
15.3 Reserved......................................................................................42
15.4 Indemnification Procedures....................................................................42
15.5 Indemnification Procedures - Governmental Claims..............................................43
15.6 Subrogation...................................................................................43
16. LIABILITY..............................................................................................43
16.1 Force Majeure.................................................................................43
16.2 Limitation of Liability.......................................................................45
17. DISPUTE RESOLUTION.....................................................................................46
17.1 Informal Dispute Resolution...................................................................46
-iii-
Table of Contents
(continued)
Page
17.2 Jurisdiction..................................................................................47
17.3 Waiver of Jury Trial..........................................................................47
17.4 Continued Performance.........................................................................48
17.5 Governing Law.................................................................................48
18. TERMINATION............................................................................................48
18.1 Termination for Cause.........................................................................48
18.2 Termination Upon Vendor Change of Control.....................................................48
18.3 Termination Upon Oncor Change of Control......................................................49
18.4 Termination for Insolvency....................................................................49
18.5 Oncor Rights Upon Vendor's Bankruptcy.........................................................49
18.6 Termination for Vendor Degraded Financial Condition...........................................50
18.7 Market Check..................................................................................50
18.8 Termination For Convenience...................................................................50
18.9 Cross Termination Rights and Termination Charges..............................................51
18.10 Equitable Remedies............................................................................51
19. GENERAL................................................................................................52
19.1 Binding Nature and Assignment.................................................................52
19.2 Entire Agreement; Amendment...................................................................52
19.3 Notices.......................................................................................52
19.4 Counterparts..................................................................................53
19.5 Headings......................................................................................53
19.6 Relationship of Parties.......................................................................53
19.7 Severability..................................................................................53
19.8 Approvals and Consents........................................................................53
19.9 Waiver of Default; Cumulative Remedies........................................................53
19.10 Survival......................................................................................54
19.11 Publicity.....................................................................................54
19.12 Export........................................................................................54
19.13 Third Party Beneficiaries.....................................................................54
19.14 Covenant Against Pledging.....................................................................54
-iv-
Table of Contents
(continued)
Page
19.15 Order of Precedence...........................................................................54
19.16 Hiring of Employees...........................................................................55
19.17 Further Assurances............................................................................55
19.18 Liens.........................................................................................55
19.19 Acknowledgment................................................................................55
-v-
