Exhibit 10(m)
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.
MASTER FRAMEWORK AGREEMENT
between
TXU ENERGY COMPANY LLC
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 TXU ENERGY COMPANY LLC, a Delaware limited liability company having a
principal place of business at Energy Plaza, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ ("TXU"), and CAPGEMINI ENERGY LP, a Delaware limited partnership having a
principal place of business at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
("Vendor").
WHEREAS, the purpose of this Master Agreement is to establish the
overall contractual framework for TXU's and Vendor's relationship and set forth
terms and conditions that apply to all Services provided by Vendor;
WHEREAS, Affiliates of TXU and Affiliates of Capgemini Energy LP have
created a Delaware limited liability company, Delaware limited liability
partnership, which shall provide services to TXU in accordance with this
Agreement;
WHEREAS, simultaneous with entering into this Master Agreement, TXU and
Vendor have entered into the IT Services Agreement pursuant to which Vendor
shall provide certain information technology services to TXU and the Eligible
Recipients;
WHEREAS, simultaneous with entering into this Master Agreement, TXU and
Vendor have entered into the Procurement Services Agreement pursuant to which
Vendor shall provide certain procurement services to TXU and the Eligible
Recipients;
WHEREAS, simultaneous with entering into this Master Agreement, TXU and
Vendor have entered into the Revenue Management Services Agreement pursuant to
which Vendor shall provide certain revenue management services to TXU and the
Eligible Recipients;
WHEREAS, simultaneous with entering into this Master Agreement, TXU and
Vendor have entered into the HR Services Agreement pursuant to which Vendor
shall provide certain human resources services to TXU and the Eligible
Recipients;
WHEREAS, simultaneous with entering into this Master Agreement, TXU and
Vendor have entered into the Customer Care Services Agreement pursuant to which
Vendor shall provide certain customer care and call center services to TXU and
the Eligible Recipients;
WHEREAS, simultaneous with entering into this Master Agreement, TXU and
Vendor have entered into the Finance and Accounting Services Agreement pursuant
to which Vendor shall provide certain finance and accounting services to TXU and
the Eligible Recipients; and
WHEREAS, TXU may request that Vendor provide certain other services to
TXU 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, TXU 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 TXU in the form of Exhibit 6.
1.2 Services and Goals and Objectives. TXU desires that certain services
presently performed and managed by or for TXU, 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 TXU's capital, operating, general and administrative
expenses;
(b) implement common technology and processes across TXU;
(c) eliminate duplication across TXU;
(d) allow TXU to focus on its core competencies and allow TXU
management to focus on business relationships and requirements;
(e) provide TXU with the flexibility to adapt rapidly to changing
requirements and changes in the TXU business environment;
(f) provide TXU 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
TXU as of the Master Agreement Effective Date are set forth
on Exhibit 10. Upon TXU's request, Vendor shall provide the
Services to Eligible Recipients, provided that Eligible
Recipients that are not Controlled by TXU agree with TXU 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 TXU. To the extent an Eligible
Recipient is, or was at any time during the Term, receiving
Services, (1) references to TXU shall include such Eligible
Recipient (including for purposes of the business, operations,
policies, procedures, rules, standards and the like of TXU and the
indemnities under this Agreement), (2) references to Services
being performed for or provided to, or received by or used by, TXU
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) TXU 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 TXU (including by providing notices,
approvals, consents, waivers or the like), in each case unless
TXU 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 TXU
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, TXU 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, TXU and
Vendor have entered into the Initial Services Agreements. Each
of the Initial Services Agreements incorporates by reference
the terms of this Agreement. TXU 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. TXU 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 TXU 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 TXU desires to renew this Master Agreement after the
Initial Term or any Renewal Term, TXU 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 TXU 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, TXU 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 TXU 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 TXU
and, as directed by TXU, 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 (including for the performance of
XP/Office/Outlook/Blackberry Deployment Project set forth in
Exhibit 13), upon TXU'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 TXU
2003 Base Case, if any, attached to the applicable Services
Agreement, and (z) being performed during calendar year 2003
by TXU 2003 Personnel as reasonably demonstrated by TXU, or
upon TXU'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 TXU's request, Vendor
shall provide to TXU 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 TXU (i) upon ninety (90) days' prior notice from TXU
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 TXU, breach or default by Vendor or termination for convenience by
TXU (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 TXU and continuing
for up to twelve (12) months following the effective date of such
removal or (iv) commencing upon notice from TXU 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 TXU as the
completion date of the Termination Assistance Services. TXU may only
terminate a Services Agreement in its entirety.
(c) Extension of Services. TXU 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. TXU 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 TXU 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 TXU 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 TXU'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. TXU 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), TXU 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 TXU obtaining from third parties (each, a "TXU 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 TXU'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 TXU's right or ability to increase or decrease its demand
for Services. To the extent TXU obtains from TXU Third Party
Contractors, or provides to itself, any of the Services, the amount
to be paid to Vendor by TXU will be equitably adjusted downward in
accordance with Exhibit 11. Similarly, to the extent TXU adds or
deletes Eligible Recipients or increases or decreases its
demand for Services, the amount to be paid to Vendor by TXU will be
adjusted in accordance with Exhibit 11.
(b) TXU agrees to procure from Vendor Project work, provided that
Vendor demonstrates it has experience and skills to perform the
Projects at least comparable to that of any third parties TXU is
considering and offers TXU the best overall terms and conditions
(including price) to complete the Projects. At least semi-annually
each calendar year, TXU shall meet with Vendor and discuss with Vendor
forecasts for projects contemplated by TXU during the next sixth
months. TXU 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 TXU because it is included in the Base
Services Charge for "AM-AD SMEs Transfer" in Exhibit 11. TXU shall
use reasonable efforts to award to Vendor 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 TXU and
TXU Third Party Contractors as described in this Agreement and
in the applicable Services Agreement or as reasonably
requested by TXU.
4.4 Employee Transfers. The transitioning of TXU'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.
4.6 PM Business Unit.
(a) Notwithstanding anything to the contrary in this Agreement or in any
agreement related to the transactions contemplated by this Agreement
including the Transaction Agreements, in the event that TXU decides
that the Portfolio Management Business Unit ("PM Business Unit") will
not receive the Services, either as an Eligible Recipient under this
Agreement or under a separate agreement with Vendor, then, until the
seventh anniversary of the Master Agreement Effective Date, TXU will
have the option to (i) terminate the Services provided to the PM
Business Unit, (ii) terminate or cause to be terminated any and all
licenses or other rights Vendor has to the Software, Equipment,
Equipment Leases and Third Party Contracts set forth on Exhibit 12,
(iii) at its cost, cause Vendor to transfer any and all licenses or
other rights Vendor has to such Software, Equipment, Equipment Leases
and Third Party Contracts set forth on Exhibit 12, and (iii)
notwithstanding Section 19.16 of this Agreement, hire up to fifty (50)
of the Transitioned Employees that supported the PM Business Unit
(including employees providing information technology and human
resources Services) (the "Decommissioning Option").
(b) In the event that TXU determines to exercise the Decommissioning
Option, it shall pay to Vendor CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION. Such amount shall be in lieu of
any Termination Charges that may otherwise be payable pursuant to this
Agreement. In connection with the termination of Services pursuant to
the Decommissioning Option, the Charges and the Baseline Volumes set
forth in Exhibit 11 shall be reduced by the following amounts,
effective as of the date of termination of the Services:
CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
--------------------------------------------- ----------------------- ---------------------------- ------------------
Volumetric `04 Base Service '05 - End of Term Base Baseline Volume
Charge Service Charge
--------------------------------------------- ----------------------- ---------------------------- ------------------
IT - AM Portfolio Management
--------------------------------------------- ----------------------- ---------------------------- ------------------
IT Infrastructure - PCs, FS, Help Desk
--------------------------------------------- ----------------------- ---------------------------- ------------------
IT Infrastructure - Network Tier I Site
--------------------------------------------- ----------------------- ---------------------------- ------------------
IT Infrastructure - Distributed Computing,
Mainframe, Storage
--------------------------------------------- ----------------------- ---------------------------- ------------------
HR - Energy
--------------------------------------------- ----------------------- ---------------------------- ------------------
For avoidance of doubt, Vendor shall provide Termination
Assistance Services to the PM Business Unit in accordance with
this Agreement.
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 TXU Facilities, (ii) the Vendor Facilities, or (iii)
any other service location determined by Vendor and notified
to TXU at least ninety (90) days prior to use by Vendor;
provided that Vendor shall obtain TXU'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 TXU as a result of such relocation.
(b) TXU Facilities. TXU shall provide Vendor with the use of and
access to the TXU Facilities described in Schedule O.1 to the
applicable Services Agreement solely as necessary for Vendor
to perform its obligations under this Agreement. Such TXU
Facilities together with facilities included in the TXU
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. TXU warrants
that TXU shall not interfere with Vendor's quiet enjoyment of
the TXU Facilities. Except as otherwise approved by TXU, TXU
owned or leased assets provided for the use of Vendor under
this Agreement shall remain in TXU Facilities. In addition,
all improvements or modifications to TXU Facilities requested
by Vendor shall be (i) subject to reasonable review and
approval in advance by TXU, and (ii) performed by or through
TXU. Vendor shall reimburse TXU for the actual direct
reasonable costs and expenses incurred in connection with such
modifications or improvements. EXCEPT AS SET FORTH HEREIN,
THE TXU FACILITIES ARE PROVIDED BY TXU TO Vendor ON AN AS-IS,
WHERE-IS BASIS. TXU EXPRESSLY DISCLAIMS ANY WARRANTIES,
EXPRESS OR IMPLIED, AS TO THE TXU FACILITIES, OR QUIET
ENJOYMENT BY Vendor.
(c) Physical Security. TXU is responsible for the physical
security of the TXU 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 TXU or any higher standard agreed to by
TXU and Vendor. Vendor shall be solely responsible for
compliance by Vendor Personnel with such control procedures,
including obtaining advance approval from TXU to the extent
required.
(d) Use of TXU Facilities.
(i) Vendor shall have the right to use the TXU Facilities to
provide the services to third parties. TXU shall take
adequate steps to provide Vendor with appropriate TXU
Facilities to enable Vendor to achieve its reasonable
business objectives.
(ii) TXU reserves the right to relocate any TXU 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, TXU will provide Vendor with comparable office
space in another location. TXU shall be financially
responsible for all additional costs, taxes or expenses
related to or resulting from any TXU-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
TXU-initiated relocation prevents or delays Vendor
Personnel from performing Vendor's obligations under this
Agreement.
(iii) TXU also reserves the right to direct Vendor to cease
using all or part of the space in any TXU Facility upon
120 days prior written notice. In such event, TXU 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 TXU 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 TXU and at the end of such
90 days shall vacate and return such TXU Facilities (including
any improvements to such facilities made by or at the request
of Vendor) to TXU 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 TXU
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 TXU Facility or any act in
violation of TXU's insurance policies or in breach of TXU's
obligations under the applicable real estate leases in such
Vendor occupied TXU 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 TXU's reasonable request, Vendor shall
provide reasonable supervised access to Vendor Facilities by TXU or TXU
Third Party Contractors to trouble-shoot and maintain third party
software and equipment used to provide Services. TXU shall comply, and
shall cause TXU 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 TXU has been provided prior notice.
6.3 TXU Rules / Employee Safety.
(a) TXU Rules and Compliance. In performing the Services and using
the TXU Facilities, Vendor shall observe and comply with all
lawful TXU policies, rules, and regulations applicable to TXU
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, "TXU Rules");
provided that Vendor will not be deemed to be in breach of
this Agreement to the extent that any TXU Rules prevent Vendor
Personnel from performing Vendor's obligations under this
Agreement. Vendor shall be responsible for the promulgation
and distribution of TXU Rules to Vendor Personnel as and to
the extent necessary and appropriate. Additions or
modifications to the TXU Rules will be communicated by TXU 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 TXU Rules;
provided that any material addition or modification to the TXU
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 TXU Rules related to
TXU's obligation to comply with Affiliate Standards of Conduct
requirements ("Affiliate Standards"), Vendor shall develop
and timely implement a plan approved by TXU'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 TXU
Affiliates; protect Oncor Electric Delivery Company's
confidential information from improper disclosure to other
TXU Affiliates; and ensure that all charges are properly
allocated among TXU and TXU Affiliates. Vendor shall timely
report to TXU any alleged Affiliate Standards violation and
shall cooperate in investigating and responding to an alleged
Affiliate Standards violation. TXU 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 TXU Facility at or from which Services are rendered
and the TXU Rules applicable to each such TXU Facility. Vendor
and Vendor Personnel shall observe and comply with all Laws
applicable to the use of each TXU 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 TXU or TXU 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 TXU as communicated to
Vendor, Vendor Personnel shall receive TXU standard training
prior to entering certain TXU 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 TXU 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 TXU 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 TXU's sole or exclusive remedy for any
failure to meet the Service Levels; provided, however, that any Service
Level Credits received by TXU shall be an offset against the amount of
any damages received by TXU from Vendor as a result of the underlying
event giving rise to the Service Level Credit.
7.3 Problem Analysis. Upon TXU'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 TXU's request, (iii) implement
remedial action and begin complying with this Agreement as soon as
practicable, (iv) advise TXU of the status of remedial efforts being
undertaken with respect to such problem, and (v) provide TXU 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 TXU 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, TXU 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 TXU, 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 TXU, 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 TXU 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 TXU in
writing of such situation and the impact or expected impact. Vendor
shall as soon as practicable meet with TXU 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 TXU of the
proposed assignment, (2) introduce the individual to
appropriate TXU representatives, (3) provide reasonable
opportunity for TXU representatives to interview the
individual, and (4) provide TXU with a resume and such other
information about the individual as TXU 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, TXU will notify Vendor as to
whether it has any reasonable objection to the proposed
assignment (and any failure of TXU to provide such notice in
the time required will be deemed by TXU to be an acceptance
of such proposed assignment). If TXU in good faith
reasonably and lawfully objects to the proposed assignment,
the Parties shall attempt to resolve TXU's concerns on a
mutually agreeable basis. If the Parties have not been able
to resolve TXU's concerns within five (5) days of TXU
communicating its concerns, Vendor shall not assign the
individual to that position and shall propose to TXU 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 TXU's approval of all Key Vendor
Personnel prior to the applicable Services Agreement
Commencement Date.
(iii) TXU may change the positions designated as Key Vendor
Personnel with Vendor's approval which shall not be
unreasonably withheld; provided that TXU shall be
financially responsible for all additions costs, taxes or
expenses related to or resulting from any such TXU requested
change.
(iv) TXU 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 TXU 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
TXU of the proposed reassignment, (ii) introduce the proposed
replacement to appropriate TXU representatives, (iii) provide
reasonable opportunity for TXU representatives to interview the
proposed replacement, and (iv) provide TXU with a resume and such
other information about the proposed replacement as TXU 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, TXU will notify Vendor as to whether it has
any objection to the proposed reassignment and replacement (and
any failure of TXU to provide such notice in the time required
will be deemed by TXU to be an acceptance of such proposed
reassignment and replacement). If, in its sole discretion, TXU
lawfully objects to the proposed reassignment and replacement,
Vendor shall not assign the proposed replacement to that position
and shall propose to TXU 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 TXU as much notice as
reasonably practicable of such development, and (ii) identify and
obtain TXU'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 TXU at least
forty-five (45) days' prior notice of such action, and (ii)
identifying and obtaining TXU'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 TXU, TXU
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 TXU, for its
review and comment, a retention strategy designed to retain
Key Vendor Personnel on the TXU 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 TXU of such termination and expeditiously identify
and obtain TXU's approval of a suitable replacement in
accordance with Section 7.7(a)(i).
(d) Evaluation Input. TXU 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 TXU'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 TXU engagement who, unless otherwise agreed by TXU,
shall maintain his or her office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ (in a location therein determined by TXU). 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
TXU. TXU 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 TXU 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 TXU
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 TXU's behalf hereunder shall be deemed to be
an officer, director, employee, agent, Affiliate, contractor or
subcontractor of TXU for any purpose. Vendor, not TXU, 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 TXU 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 TXU, shall be responsible for all acts and omissions of
Vendor Personnel (unless such acts or omissions were at the direction
of TXU to Vendor).
7.10 Replacement, Qualifications, and Retention of Vendor Personnel.
(a) Requested Replacement. In the event that TXU determines lawfully
and in good faith that the continued assignment to TXU of any
individual Vendor Personnel (including Key Vendor Personnel) is
not in the best interests of TXU, then TXU 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 TXU 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 TXU with assurances that
such deficient performance shall not recur. If, following such
five (5) day period, TXU 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,
TXU 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 TXU 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 TXU's notice, (i) provide TXU with data concerning
Vendor's turnover rate, (ii) meet with TXU to discuss the reasons
for the turnover rate, and (iii) submit a proposal for reducing
the turnover rate. After considering TXU's comments, to the extent
appropriate Vendor shall implement such proposal as soon as
practicable.
7.11 Conduct of Vendor Personnel.
While at TXU Facilities, Vendor Personnel shall (i) comply with the TXU
Rules as long as TXU notifies Vendor of such TXU Rules reasonably in
advance (subject to Section 6.3(a)), (ii) comply with reasonable
requests of TXU personnel pertaining to personal and professional
conduct, (iii) attend reasonable workplace training offered by TXU at
TXU'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 TXU 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 TXU 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, TXU may
request, and Vendor will generate and deliver, additional
Reports at the cost and expense of TXU. All Reports described
in Schedule R to the applicable Services Agreement shall be
provided to TXU 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 TXU in hard copies and electronic copies.
(b) Back-Up Documentation. Vendor shall provide TXU with copies of
and access to data, documentation and other information in
Vendor's possession as may be reasonably requested by TXU 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 TXU is responsible shall be corrected by Vendor at TXU's
expense.
8.3 Access to Specialized Vendor Skills and Resources. Upon TXU's
reasonable request, Vendor shall provide TXU 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 TXU Account Executive and Vendor Account
Executive expressly agree in writing upon such additional compensation.
If TXU 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 TXU'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 TXU (and internal
and external auditors, inspectors, governmental bodies,
regulators and other representatives that TXU 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 TXU and its businesses,
including to (i) verify the integrity of TXU 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 TXU 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 TXU 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 TXU for the actual cost of such audit
and any damages, fees, fines, or penalties assessed against or
incurred by TXU as a result thereof.
(c) Financial Audits. During the Term and for a period thereafter
required by Law, Vendor shall provide to TXU (and internal and
external auditors, inspectors, governmental bodies, regulators
and other representatives that TXU may designate) access at
reasonable hours to Vendor Personnel and to Contract Records
required to be maintained by TXU 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 TXU 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 TXU 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 TXU 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 TXU for the
actual cost of such audit.
(d) Audit Assistance. TXU may be subject to regulation and audit
by governmental bodies, standards organizations, other
regulatory authorities, customers or other parties to
contracts with TXU 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 TXU exercises its
right to examine or audit TXU pursuant to such Laws, rules,
regulations, standards or contract provisions, Vendor shall
provide reasonable assistance requested by TXU in responding
to such audits or requests for information.
(e) General Procedures.
(i) Except as otherwise required under applicable Law, TXU 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 TXU
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 TXU.
(ii) Notwithstanding the intended breadth of TXU's audit rights,
TXU 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 TXU or the Services, or (C) Vendor's
internal costs, except to the extent such costs are the
basis upon which TXU is charged and/or are necessary to
calculate the applicable Charges.
(iii) In performing audits, TXU 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, TXU 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) TXU (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 TXU, then Vendor
shall promptly pay to TXU 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 TXU 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 TXU 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 TXU, Vendor shall undertake remedial action in accordance
with such action plan and the dates specified therein.
(h) Vendor Response to Non-TXU Audits. If an audit by a governmental
body, standards organization or regulatory authority having
jurisdiction over TXU 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 TXU and its independent auditors
no later than 90 days prior to the end of TXU's fiscal year. Vendor
shall respond to such report in accordance with Section 8.4(g).
8.5 Agency and Disbursements.
(a) Limited Agency. TXU 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. TXU 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 TXU promptly if
and to the extent any TXU owned Equipment or TXU 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, TXU 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 TXU 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 TXU is obligated to make such leased Equipment available to
Vendor, if earlier), Vendor shall return the same to TXU 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 TXU's prior approval, which may be
withheld in TXU's sole discretion. TXU agrees that Vendor may
subcontract in the following instances without TXU'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 TXU
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
TXU'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. TXU shall
have no approval right with respect to such Shared
Subcontractors. If, however, TXU expresses dissatisfaction
with the services of a Shared Subcontractor, Vendor shall work
in good faith to resolve TXU'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 TXU 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 TXU's sole point of contact regarding the Services.
8.7 Requirement of Writing. To the extent TXU 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. TXU RESPONSIBILITIES
9.1 Responsibilities. In addition to TXU's responsibilities expressly set
forth elsewhere in this Agreement, TXU shall be responsible for the
following:
(a) TXU Account Executive. TXU shall designate one (1) individual to
whom all Vendor communications concerning this Agreement may be
addressed (the "TXU Account Executive"), who shall have the
authority to act on behalf of TXU in all day-to-day matters
pertaining to this Agreement. TXU may change the designated TXU
Account Executive by providing notice to Vendor. Additionally,
(i) TXU shall be entitled to designate additional representatives
who will be authorized to make certain decisions (e.g.,
regarding emergency maintenance) if the TXU Account Executive is
not available and (ii) the TXU 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 TXU Account Executive or any other
individual designated to have decision-making authority in
accordance with this Section 9.1(a).
(b) Cooperation. TXU 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 TXU'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 TXU 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
TXU Account Executive may agree in advance in writing that as
to certain specific matters oral approval, consent or
agreement will be sufficient.
(d) TXU shall terminate its service level agreement between TXU
Energy Company LLC and TXU Gas Company prior to the IT
Services Agreement Commencement Date.
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) TXU's or TXU
Third Party Contractor's gross negligence or wrongful acts or
omissions or TXU's or TXU Third Party Contractor's breach of its
obligations under this Agreement, (ii) Software, Equipment or
Systems for which TXU or TXU Third Party Contractors have
operational responsibility, or (iii) Vendor's compliance with
specific instructions of TXU or TXU Third Party Contractors. Vendor
agrees to timely notify TXU 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 TXU 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 TXU 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. TXU shall reimburse Vendor for
CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION of the costs Vendor incurs in connection with such
activities including activities under Section 9.3(a) of the Master
Framework Agreement dated May 17, 2004 between Oncor Electric
Delivery Company and Capgemini Energy LP ("Oncor MFA"); provided,
however, that Vendor shall not be obligated to incur more than
CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION in the aggregate under this Section 9.3 and Section 9.3
of the Oncor MFA (including amounts subject to reimbursement),
and TXU shall not be obligated to reimburse more than CONFIDENTIAL
MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION in the
aggregate unless it otherwise agrees.
(b) Other Solutions. If the Contribution Failure is not cured as
provided in Section 9.3 (a), whether because Vendor's efforts are
not successful or (without limiting TXU's payment obligations under
Section 9.3(a)) Vendor would incur more costs than 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 TXU a
solution that would enable Vendor to perform Services without
materially and adversely affecting TXU'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, TXU 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. TXU 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 TXU.
(c) No Charge for Reperformance. At no additional expense to TXU,
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
TXU'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 TXU. Any reperformance required by an
error or breach of this Agreement by TXU, and the resources
required for such performance, will be at the sole cost and
expense of TXU.
(d) Eligible Recipient Services. To the extent a designated
Eligible Recipient will receive less than all of the Services,
TXU 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, TXU 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) Severance. At the end of each three month period commencing on the
Services Agreement Commencement Date for the IT Services
Agreement and ending eighteen months after such Services Agreement
Commencement Date, TXU shall reimburse Vendor for the actual
severance amounts paid directly to (i) terminated Transitioned
Employees (in accordance with Exhibit 2) under each of the Initial
Services Agreements during such three month period who have signed
an Agreement and Release substantially in the form attached as
Schedule 1 to Exhibit 2 and (ii) terminated Transitioned Employees
under the Oncor MFA (as such term is defined in the Oncor MFA)
(in accordance with Exhibit 2 to the Oncor MFA) under each of the
Initial Services Agreements (as defined in the Oncor MFA) during
such three month period who have signed an Agreement and Release
substantially in the form attached as Schedule 1 to Exhibit 2 to
the Oncor MFA ("Actual Severance") up to an aggregate cap of
CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY
WITH THE COMMISSION for all such Transitioned Employees under all
such Initial Services Agreements. If TXU's reimbursement
obligation to Vendor under this Section is less than then
CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION within 30 days after the end of such eighteen month
period, Vendor shall be entitled to a payment from TXU in an amount
equal to: CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY
WITH THE COMMISSION.
(f) Transition Charges. With respect to Transition Charges under this
Agreement and Transition Charges under the Oncor MFA, TXU
shall reimburse Vendor for CONFIDENTIAL MATERIAL REDACTED AND FILED
SEPARATELY WITH THE COMMISSION Transition Charges and CONFIDENTIAL
MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
of Transition Charges, in each case under all of the
Initial Services Agreements, incurred by the Vendor by the 18 month
anniversary of the Services Agreement Commencement Date under
each such agreement unless otherwise agreed to by the parties.
TXU's aggregate commitment to reimburse Vendor for Transition
Charges under all of the Initial Services Agreements and under the
Initial Services Agreements as defined in the Oncor MFA is
$25,000,000. TXU shall reimburse Vendor for such amounts against
invoices as such Transition Charges are incurred by Vendor, with
such amounts payable by TXU at the end of each three month period
commencing on the Services Agreement Commencement Date for the IT
Services Agreement.
10.2 Pass-Through Expenses.
(a) Procedures and Payment. TXU 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 TXU 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 TXU. Vendor shall
deliver to TXU 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 TXU 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 TXU
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
TXU 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 TXU's retained and Pass-Through Expenses and will
notify TXU 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 TXU.
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
TXU'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) TXU 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
TXU 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 TXU 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 TXU's request,
Vendor shall provide TXU 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 TXU, and has collected and remitted
all applicable Service Taxes, and (ii) such other information
pertaining to applicable Taxes as TXU 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
for 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 TXU 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 TXU's consideration. Unless otherwise agreed by the
Parties, Vendor shall prepare such New Services proposal at no
additional charge to TXU and shall use commercially reasonable
efforts to deliver such proposal to TXU within thirty (30) days of
its receipt of TXU's request or more quickly in the case of a
pressing business need or an emergency situation. TXU 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 TXU 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 TXU 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. TXU 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. TXU's acceptance
of a New Services proposal shall only be valid and binding on TXU
if approved in writing by the TXU Account Executive. Unless the
Parties otherwise agree, if TXU 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 TXU'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 TXU, including utilizing Subcontractors as and to the
extent appropriate, (iii) such pricing proposal shall be no less
favorable to TXU 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 TXU and Vendor.
(b) Use of Third Parties. TXU may elect to solicit and receive
bids from third parties to perform any New Services. If TXU
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 TXU. 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 TXU to provide such New
Services.
(d) End User and Eligible Recipient Requests. Vendor will promptly
inform the TXU 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
TXU Account Executive. Vendor shall not agree to provide New
Services to any End Users without the prior written approval
of the TXU 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. TXU 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 TXU by modifying or reducing the nature
or scope of the Services, the applicable Service Levels or other
contract requirements. If requested by TXU, Vendor shall promptly
prepare a proposal at a level of detail sufficient to permit TXU to
make an informed business decision identifying all viable means of
achieving the desired reductions without adversely impacting
business objectives or requirements identified by TXU. In preparing
such a proposal, Vendor shall give reasonable consideration to any
means of achieving such reductions proposed by TXU, Vendor shall
negotiate in good faith with TXU about each requested reduction in
Charges and shall identify to TXU if and to what extent the cost of
service delivery may be reduced by implementing various changes in
this Agreement. TXU 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 TXU has prepaid for a service or function
for which Vendor is assuming financial responsibility under this
Agreement, Vendor shall refund to TXU, 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 TXU 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), TXU 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 TXU
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 TXU shall execute a
non-disclosure agreement substantially in the form of Exhibit
7. Vendor shall cooperate fully with TXU 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 TXU 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 TXU and to Vendor setting forth such findings and
conclusions (the "Benchmark Report"). Following TXU's
receipt of the Benchmark Report, the Parties shall promptly meet to
review the results indicated therein and Vendor shall, at TXU's
option and in TXU'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 TXU's reasonable request
the Benchmarker shall provide TXU 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 TXU 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
TXU, 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 TXU 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
TXU 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 TXU 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 TXU'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 TXU. Each invoice shall (i) comply with all applicable
legal, regulatory and accounting requirements and (ii) allow TXU
to validate volumes and fees. Upon TXU's request, Vendor shall
within seven (7) days provide TXU with information and data to
permit TXU to chargeback internally to the same organizational
level and at the same level of detail in use by TXU 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
TXU electronically in a form and format compatible with TXU's
accounting systems.
(d) Credits. To the extent a credit may be due to TXU pursuant to
this Agreement, Vendor shall provide TXU with an appropriate
credit against amounts then due and owing; if no further
payments are due to Vendor, Vendor shall pay such amounts to
TXU 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 TXU 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 TXU.
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. TXU may only withhold payment of relevant portions
of Charges if TXU reasonably disputes in good faith subject to the
following:
(a) Description and Explanation. TXU shall notify Vendor and provide a
description of the particular Charges in dispute and an explanation
of the reason why TXU disputes such Charges.
(b) Continued Performance. If TXU 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 TXU
may otherwise have to dispute any Charge or amount or recover any
amount previously paid.
12. TXU DATA AND OTHER PROPRIETARY INFORMATION
12.1 TXU Ownership of TXU Data. TXU Data are and shall remain the property
of TXU and Vendor shall not possess or assert any lien or other
interest, title or right in, to or under any TXU Data. Vendor shall
promptly deliver TXU Data (or the portion of such TXU Data specified by
TXU) to TXU in the format and on the media on which such TXU Data is
held or contained by Vendor in accordance with this Agreement (i) at
any time at TXU'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
TXU 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 TXU, all copies of the TXU Data in Vendor's
possession or under Vendor's control within ten (10) days and deliver
to TXU written certification of such return or destruction signed by a
senior executive of Vendor. TXU 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 TXU 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 TXU
if it believes that any use of TXU 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 TXU 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 TXU Data in the
possession of Vendor which are (i) no less rigorous than those
maintained by TXU as of the applicable Services Agreement
Commencement Date (or implemented by TXU in the future to the
extent deemed necessary by TXU), as the same may be amended or
modified from time to time, and (ii) adequate to meet the
requirements of TXU'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 TXU's reasonable
request and in accordance with the Adjustment Process. TXU shall
have the right to establish backup security for TXU Data and to
keep in its possession backup copies of the TXU Data at TXU's
expense. Vendor shall remove all TXU 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 TXU 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 TXU Data, Vendor shall (i) immediately notify
TXU 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 TXU with such assurances as TXU
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 TXU Data which are (i) no less
rigorous than those maintained by TXU 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 TXU Data that is altered
or that becomes inaccurate after the Master Agreement
Effective Date; provided that any such alteration or
inaccuracy caused by TXU or that existed prior to the Master
Agreement Effective Date shall be corrected by Vendor at TXU's
expense.
(d) Restoration. Vendor shall restore all TXU 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 TXU Data); provided that any
destruction or loss caused by TXU or that existed prior to the
applicable Services Agreement Commencement Date shall be
corrected by Vendor at TXU's expense.
12.3 Confidentiality.
(a) Proprietary Information. Vendor and TXU 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 TXU,
Proprietary Information also shall include Developed Materials,
TXU 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, ▇▇▇▇▇▇▇▇ 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,
TXU's Proprietary Information shall include plans for changes in
TXU 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 TXU shall not disclose, and shall
maintain the confidentiality of, all Proprietary Information
of the other Party. TXU 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 TXU'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 TXU Rules or Vendor's
rules of which TXU 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, TXU shall have access to,
and the right to review and retain the entirety of, all computer or
other files containing TXU 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 TXU. Upon the request of the TXU Account
Executive, Vendor shall confirm that all files and other information
provided to TXU are complete and that no material element, amount, or
other fraction of such files or other information to which TXU 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 TXU 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 TXU 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 TXU that are not applicable to Vendor of which
TXU 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
TXU of such charge.
(b) Compliance by TXU. TXU 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 TXU with
any Law occurs that impacts or is likely to impact Vendor's
performance under this Agreement, TXU shall promptly notify
Vendor of such charge.
(c) Compliance Data and Reports. At no additional charge and upon
TXU's reasonable request, Vendor shall provide TXU with data
and reports in Vendor's possession necessary for TXU 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 TXU, TXU shall retain the right, in its sole
discretion, to interpret and determine the impact of such Laws
on the Services. At TXU's reasonable request, Vendor Personnel
shall participate in TXU 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 TXU to the extent Vendor receives one-time
notice of such Laws from TXU (including Public Utility
Regulatory Act, Tex. Util. Code ▇▇▇. ss. 11.001 et. seq.
(▇▇▇▇▇▇ 1998 & Supp. 2004) and Gas Utility Regulatory Act,
Tex. Util. Code ▇▇▇. ss. 101.001 et. seq. (▇▇▇▇▇▇ 1998 & Supp.
2004) both of which Vendor is hereby on notice of)), in all
cases as such Laws may be amended.
(f) TXU Costs. TXU shall be responsible for all costs and expenses
resulting from changes in Laws applicable to the businesses of
TXU or TXU's receipt or use of the Services. Any resulting changes
to the Services will be addressed through the Change Control
Process. To the extent TXU 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, TXU 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 TXU's retained expenses as a result thereof.
(h) Compliance with Data Privacy Laws. Without limiting the
foregoing, with respect to any TXU Personal Data, Vendor shall
provide TXU with such assistance as TXU 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 TXU 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 TXU, an
Eligible Recipient or a TXU Third Party Contractor in
contravention of TXU's obligations under this Agreement. TXU
shall be responsible for any Losses imposed on Vendor or TXU
resulting from any failure of TXU 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 TXU under
Section 10.4(d), in each case which would not have been borne
by TXU had TXU 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, TXU 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 TXU
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 TXU Contributed Assets), Vendor shall advise TXU 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
TXU 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
TXU 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 TXU 2003 Base Case. TXU represents and warrants that it is not aware of
any material errors or omissions in the TXU 2003 Base Case. To the best
of TXU'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
TXU 2003 Base Case, except with regard to the substantial expansion in
the customer care and call center services.
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 TXU 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) TXU Data or Proprietary Information. Vendor's breach of its
obligations with respect to TXU Data or TXU 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 TXU 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 TXU
under this Agreement with TXU'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 TXU Facility other
than claims for death or bodily injury caused by any act,
omission, fault or negligence by TXU.
(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 TXU 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 TXU
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 TXU or TXU Third Party Contractors, (ii) errors or
inaccuracies in the information provided by TXU and faithfully
communicated by Vendor or (iii) the failure of TXU or TXU Third
Party Contractors to comply with TXU's responsibilities under
this Agreement.
15.2 Indemnity by TXU. TXU 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. TXU's breach of any of the
representations and warranties set forth in this Agreement.
(b) Licenses, Leases or Contracts. TXU's failure to observe or
perform any duties or obligations to be observed or performed
by TXU under any of the applicable Third Party Software
licenses, Equipment Leases or Third Party Contracts to the
extent TXU is financially or operationally responsible under
this Agreement.
(c) Vendor's Proprietary Information. TXU'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 TXU's
representations, warranties and covenants in Section 13.5.
(e) Taxes. Taxes, together with interest and penalties, that are
the responsibility of TXU 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 TXU's breach of
this Agreement.
(g) TXU Affiliate, Eligible Recipient or Third Party Contractor
Claims. Any claim, initiated by a TXU Affiliate, an Eligible
Recipient (other than TXU) or a TXU Third Party Contractor
asserting rights under this Agreement, other than a claim for
which Vendor is obligated to indemnify TXU under this
Agreement.
(h) Employment Claims. Any claim relating to (i) violation by TXU 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 TXU (iii) payment or
failure to pay any salary, wages or other cash compensation due
and owing to any employee of TXU (including Transitioned
Employees prior to their Employment Effective Dates),
(iv) employee pension or other benefits of any employee of TXU
(including Transitioned Employees prior to their Employment
Effective Dates), (v) other aspects of the employment relationship
of any employee of TXU (including Transitioned Employees prior to
their Employment Effective Dates and provided, in no event will
TXU 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 TXU 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 TXU employees identified
on Schedule M to the applicable Services Agreement by TXU (or its
officers, directors, employees, representatives or agents), or
other acts of TXU prior to the applicable Employment Effective
Date in connection with the selection and hiring by Vendor of the
TXU 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 TXU, or (iii) the failure
of Vendor (or its officers, directors, employees, representatives
or agents) to comply with Vendor's responsibilities under this
Agreement.
(i) TXU Personnel Injury Claims. Any claims by TXU Personnel for
death or bodily injury suffered at a Vendor Facility to the
extent caused by any act, omission, fault or negligence by
TXU.
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 TXU 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 TXU 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 TXU functions without
provision of an alternative acceptable to TXU in its sole
discretion (i) for more than five (5) consecutive days, TXU, 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 TXU Functions are so
affected for seven (7) days, TXU, 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 TXU'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 TXU 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 TXU. In no event will Vendor
unreasonably re-deploy or re-assign any Key Vendor Personnel
to TXU'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 TXU in accordance with this Agreement due
either to incorrect Charges by Vendor or non-conforming
Services.
(ii) Amounts paid by TXU 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 TXU Account
Executive and the Vendor Account Executive shall attempt in
good faith to resolve all disputes. In the event the TXU 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 TXU 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 TXU,
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, TXU 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 TXU. 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 TXU 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 TXU 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 TXU 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 TXU, 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 TXU 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 TXU Competitor
Controls Vendor, then TXU may terminate this Master Agreement by giving
Vendor at least thirty (30) days' prior notice, and such TXU Competitor
shall be prohibited from any contact with TXU Data, TXU Proprietary
Information and any and all other information about the TXU account,
including discussions with Vendor Personnel regarding specifics
relating to the Services.
18.3 Termination Upon TXU Change of Control. In the event of a Change in
Control of TXU or the Entity that Controls TXU, then TXU 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 TXU 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 TXU 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, TXU will have the
immediate right to retain and take possession for safekeeping all
TXU Data, TXU Proprietary Information, TXU licensed Third Party
Software, TXU owned Equipment, TXU owned Systems, TXU owned
Materials, TXU owned Developed Materials, and all other Software,
Equipment, Systems or Materials to which TXU is or would be
entitled during the Term or upon the expiration or termination of
this Agreement. Vendor shall cooperate fully with TXU and assist
TXU in identifying and taking possession of the items listed in
the preceding sentence. TXU will have the right to hold such TXU
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 TXU that they will be
protected from sale, release, inspection, publication, or
inclusion in any publicly accessible record, document, material
or filing. Vendor and TXU agree that without this material
provision, TXU would not have entered into this Agreement or
provided any right to the possession or use of TXU Data,
Proprietary Information, Software, Equipment, Systems or
Materials covered by this Agreement.
(b) TXU 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 TXU arising under or
otherwise set forth in this Agreement, including the rights of
TXU referred to in the Services Agreements, shall be deemed fully
retained by and vested in TXU 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) TXU 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 TXU 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
TXU after any Bankruptcy Rejection as though this Agreement
were terminated or expired. TXU 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 TXU 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, TXU 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 ▇▇▇▇▇'▇
Investors Service (or its equivalent grade in the event of a change in
rating scales by ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ 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, TXU 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 TXU 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, TXU 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, TXU 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, TXU 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 TXU in
connection with any termination of this Agreement; provided, however,
that TXU 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 TXU 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 TXU 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, TXU 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, TXU 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, TXU will be irreparably harmed. In such a circumstance, TXU 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). TXU 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 TXU has breached (or attempted
or threatened to breach) any such obligations, TXU 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
TXU 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 TXU, the TXU 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 TXU:
TXU ENERGY COMPANY LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
With a copy to:
TXU ENERGY COMPANY LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
and
In the case of Vendor:
CAPGEMINI ENERGY LP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
With a copy to:
CAPGEMINI ENERGY LP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
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 TXU and has no right, power or
authority, expressly or impliedly, to represent or bind TXU 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 ▇▇▇▇ 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, TXU 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,
TXU 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) TXU 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 TXU 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 TXU 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 TXU, it shall not assign, transfer, pledge,
hypothecate or otherwise encumber its rights to receive payments from
TXU 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 TXU or individual TXU Third Party
Contractors without the prior approval of TXU. 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, TXU 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 TXU. 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.
TXU ENERGY COMPANY LCC CAPGEMINI ENERGY LP
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------- ----------------------------------
Title: ----------------------------- Title: -----------------------------
Date: ----------------------------- Date: -----------------------------
Page
Table of Contents
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
4.6 PM Business Unit...............................................................................7
5. RESERVED................................................................................................8
6. FACILITIES, SOFTWARE, EQUIPMENT, CONTRACTS AND ASSETS ASSOCIATED WITH THE PROVISION OF SERVICES.........8
6.1 Service Facilities.............................................................................8
6.2 Use of Vendor Facilities......................................................................10
6.3 TXU Rules/Employee Safety.....................................................................10
6.4 Notice of Defaults............................................................................11
7. SERVICE LEVELS.........................................................................................12
7.1 General.......................................................................................12
7.2 Service Level Credits.........................................................................12
7.3 Problem Analysis..............................................................................12
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(continued)
Page
7.4 Continuous Improvement Reviews................................................................12
7.5 Measurement and Monitoring....................................................................13
7.6 Notice of Adverse Impact......................................................................13
7.7 Key Vendor Personnel..........................................................................13
7.8 Vendor Account Executive......................................................................15
7.9 Vendor Personnel Are Not TXU Employees; Independent Relationship..............................15
7.10 Replacement, Qualifications, and Retention of Vendor Personnel................................16
7.11 Conduct of Vendor Personnel...................................................................16
7.12 Substance Abuse...............................................................................16
8. VENDOR RESPONSIBILITIES................................................................................17
8.1 Policy and Procedures Manual..................................................................17
8.2 Reports.......................................................................................17
8.3 Access to Specialized Vendor Skills and Resources.............................................17
8.4 Audit Rights..................................................................................17
8.5 Agency and Disbursements......................................................................20
8.6 Subcontractors................................................................................20
8.7 Requirement of Writing........................................................................21
9. TXU RESPONSIBILITIES...................................................................................22
9.1 Responsibilities..............................................................................22
9.2 Savings Clause................................................................................22
9.3 Contribution Failure..........................................................................23
10. CHARGES................................................................................................23
10.1 General.......................................................................................23
10.2 Pass-Through Expenses.........................................................................25
10.3 Incidental Expenses...........................................................................25
10.4 Taxes.........................................................................................26
10.5 New Services..................................................................................28
10.6 Proration.....................................................................................29
10.7 Refundable Items..............................................................................29
10.8 TXU Benchmarking Reviews......................................................................30
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(continued)
Page
11. INVOICING AND PAYMENT..................................................................................30
11.1 Invoicing.....................................................................................30
11.2 Payment Due...................................................................................31
11.3 Set Off.......................................................................................31
11.4 Disputed Charges..............................................................................32
12. TXU DATA AND OTHER PROPRIETARY INFORMATION.............................................................32
12.1 TXU Ownership of TXU Data.....................................................................32
12.2 Safeguarding TXU Data.........................................................................32
12.3 Confidentiality...............................................................................33
12.4 File Access...................................................................................36
13. REPRESENTATIONS AND WARRANTIES.........................................................................36
13.1 Work Standards................................................................................36
13.2 Authorization.................................................................................37
13.3 Compliance with Laws..........................................................................37
13.4 Software......................................................................................39
13.5 Non-Infringement..............................................................................39
13.6 TXU 2003 Base Case............................................................................40
13.7 Disclaimer....................................................................................40
14. INSURANCE AND RISK OF LOSS.............................................................................40
15. INDEMNITIES............................................................................................40
15.1 Indemnity by Vendor...........................................................................40
15.2 Indemnity by TXU..............................................................................42
15.3 Reserved......................................................................................43
15.4 Indemnification Procedures....................................................................43
15.5 Indemnification Procedures - Governmental Claims..............................................44
15.6 Subrogation...................................................................................45
16. LIABILITY..............................................................................................45
16.1 Force Majeure.................................................................................45
16.2 Limitation of Liability.......................................................................46
17. DISPUTE RESOLUTION.....................................................................................48
17.1 Informal Dispute Resolution...................................................................48
17.2 Jurisdiction..................................................................................49
17.3 Waiver of Jury Trial..........................................................................49
17.4 Continued Performance.........................................................................49
17.5 Governing Law.................................................................................49
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(continued)
Page
18. TERMINATION............................................................................................49
18.1 Termination for Cause.........................................................................49
18.2 Termination Upon Vendor Change of Control.....................................................50
18.3 Termination Upon TXU Change of Control........................................................50
18.4 Termination for Insolvency....................................................................50
18.5 TXU Rights Upon Vendor's Bankruptcy...........................................................50
18.6 Termination for Vendor Degraded Financial Condition...........................................51
18.7 Market Check..................................................................................51
18.8 Termination For Convenience...................................................................52
18.9 Cross Termination Rights and Termination Charges..............................................52
18.10 Equitable Remedies............................................................................52
19. GENERAL................................................................................................53
19.1 Binding Nature and Assignment.................................................................53
19.2 Entire Agreement; Amendment...................................................................53
19.3 Notices.......................................................................................53
19.4 Counterparts..................................................................................54
19.5 Headings......................................................................................54
19.6 Relationship of Parties.......................................................................54
19.7 Severability..................................................................................54
19.8 Approvals and Consents........................................................................54
19.9 Waiver of Default; Cumulative Remedies........................................................55
19.10 Survival......................................................................................55
19.11 Publicity.....................................................................................55
19.12 Export........................................................................................55
19.13 Third Party Beneficiaries.....................................................................55
19.14 Covenant Against Pledging.....................................................................56
19.15 Order of Precedence...........................................................................56
19.16 Hiring of Employees...........................................................................56
19.17 Further Assurances............................................................................56
19.18 Liens.........................................................................................56
19.19 Acknowledgment................................................................................57
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