20120213Notice of Affiliate Transaction.pdf

"~ROCKY MOUNTAINPOR
A DIVISION OF PACIFICORP 2m2 FEB 13 AH 10: 30
RECE o
Mark C. Moench
Senior Vice President and General Counsel
201 S. Main Street, Suite 2400
Sal Lake Cit, UT 84111
801-220-459 Office
801-220-058 Fox
mark.nwench(gacificorp.com
Februar 13,2012
VI OVERNIGHT DELIVERY
Idaho Public Utilties Commssion
472 West Washigton
Boise,ID 83702-5983
Attention: Jean D. Jewell
Commission Secreta
Re: PacifiCorp Notice of Affliate Transaction
Case No. PAC-E-05-8
Dear Ms. Jewell:
Ths letter will serve as notice pursuat to Commtment I 17(2), incorprated in the
Idaho Public Utilties Commission Order No. 29973 issued Februar 13, 2006, as supplemented
by Order No. 29998 March 14, 2006, in the above-referenced proceeding, approvig the
acquisition ofPacifiCorp by MidAerican Energy Holdings Company ("MEHC"), of an afliate
interest trsaction. Rocky Mountain Power hereby submits an original and seven copies each of
an afliate interest traction with Interntional Business Machies Corporation (IBM). The
Company recently renewed a portion of a previously existig agreement with IBM to provide
softare support services for IBM softare licenses purchased in 2008. A copy of the Quote and
Purchase Order is included as Attchment A. The previously existing agreement titled Contrct
Between PacifiCorp and International Business Machine Corporation for Softare Solution and
Implementation Services is included as Attchment B.
PacifiCorp is a wholly-owned indirect subsidiar of MidAerican Energy Holdings
Company (MHC). MEHC is a subsidiar of Berkshie Hathway, Inc (Berkshie Hathaway). in
mid-November 2011, Berkshie Hathaway publicly anounced purchass offfMcommon stock
totaing greater than a five percent interest. Therefore, Berkshire Hathway's ownership interest
in IBM may create an afliated interest in some PacifiCorp jursdictions.
The Company has been reviewing its vendor records and determed that a business
relationship with IBM began prior to the existence of the affliate relationship. In 2008, the
Company contracted with IBM for the provision of cert softare and softare support
services. Opportties for renewal of licensing and support servces for individual sOftarè
periodically arses. In December 2011, the Company determined that renewal of support for the
Content Manager on Demand (CMOD) softare was needed. CMOD is a softar program tht
manages and stores data and allows that data to be retreved and presented in desired formats.
Idaho Public Utilties Commission
Februar 13,2012
Page 2
The Company uses CMOD in its Customer Service group to allow representatives to access
historical customer inormation. The Company will pay IBM $140,336.40 for services related to
CMOD, such as updting and repairig, durg the calenda year 2012.
The Company relies on softare fushed by IBM to create and mainta critical
business records. Ths softare is proprieta to IBM; therefore, only ffM is able to provide
service. Without CMOD, the Customer Service group would not be able to access customer
records, which would impede the ability to assist customers. Instaling a different records
mangement system would require considerable time and expense. Accordingly, the transaction
is consistent with the public interest.
Additionaly, the Company will provide notice of any renewals of softare licensing and
support services from IBM as they may arse in the futue.
Please do not hesitate to contact me if you have any questions.
Sincerely,ß(~e.~
Mark C. Moench
Senior Vice President and General Counsel
Rocky Mountan Power
Enclosures
Customr informtion
Company name
Address
Agreement numerSite numer
IBM customer numer
Offering type
Customer set designation
Government for business
partner incentives
Contract option
Anniversary
Customr Quote
SQO reference
Relationship SVP level
Total commt value
Currency
Quote start date
Quote expiration date
Quote submitted on
Pacificorp
825 NE Multnomah St Ste 800
PORTLAND, Oregon 97232
United States
0000006355
7020497
6054716
Passport Advantage
Energy & Utili ties
No
STANDARD
June
0002468027
H
US Dollar
08-Dec-2011
3l-Dec-2011
08-Dec-2011
Any and all prices herein are suggested prices only and are subject to change at
IBM's sole discretion. Products listed herein are subject to withdrawal or
modification by IBM at any time at IBM's sole discretion.
Partdescription
IBM Content Manager
Value Unit License
12 MonthsChage unitItem points
Item price
Coverage End date:
Quote detailsSoftware
PartQutity num
415 D07BOLL
Total Software
OnDemand Authorized User
+ SW Subscription & Support
User Value
2.95
338.16
31-Dec-2012
Unit
Total
points1,224.25
1,224.25
Totalprice
140,336.40
140,336.40
~ ~~£!ElHÇQI~~
PacifCorp
Procurement
825 NE Multnomah Street, Suite 940
Portand, Oregon 97232
ShiDDina Address
PacifiCorp
Lloyd Center Tower
825 N.E. Multnomah
PORTLND OR 97232
Vendor Address
IBM CORPORATION
71 S WACKER DR
CHICAGO IL 60606
USA
Attention: Debbie Masaracchia
Vendor Phone: [phone]
Vendor Fax:
Bilina Address
PacifiCorp
Accounts Payable Department
P.O. Box 3040
Portland, OR 97208 - 3040
Page 1 of 2
12/27/2011 15:08:05
version 1
Purchase Order
Information
P.O. Number
Date 12/27/2011
Vendor No. 136141
Payment Terms Description NET 30
Buyer Mark Speight
Phone [phone]
Fax [phone]
Delivery Date 12130/2012
Inco Terms Description N/A
Inco Terms (Part X)N/A
Show the Purchase Order Number on all packages, invoices, bils
of lading and correspondence. Send invoices to Accounts Payable
Department. Notify buyer immediately: (1) if unable to ship or
deliver on dates specified below or (2) when description is incorrec
or superceded.
Shipping Instructions:
Currency: USD
Valid From: 12/21/2011 To:12/30/2012
Item Material/Description Quantity UM Net Price Per UM Net Amount
10 1.00 SVC 140,336.40 1 SVC 140,336.40
IBM; CMoD Maint -12/30/12
Release Order Against Contract: 4600001934
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a a a aaa a a a a aa aa a a a a aa a a a aa a a a
BILLING ADDRESS - SEND INVOICES TO:
PACIFICORP - ATTN: Tami Ho-Gland
825 NE Multnomah St., LCT 800; Portland, OR 97232
cae c a a a ac a caD c a a a a 0 a a c a a a c a a
aa aaaaa aaa aa aaaaaa aaaaaaaaaa
This Purchase order replaces previous PO #3000056249
Please use current PO on all invoices and correspondence.
Agreement #000006355
SOO Reference 0002468027
Maintenance Period: 12131/2012
Maintenance for:Content Manager On Demand (CMOD)
a a a a aa a a aa a a aa a a a a aa a aa a aa a a
~ ~~£t~lHÇQo~~Page 2 of 2
12/27/2011 15:08:05
PacifiCorp
Procurement
825 NE Mu/tnomah Street, Suite 940
Pon/and, Oreon 97232
Purchase Order
3000083921 - 12/27/2011
Item Material/Description Quantity UM Net Price Per UM Net Amount
.
Total Net Value USD 140,336.40
Vendor shall furnish the Goods and Services specified above in accordance with this Purchase Order, including the provisions set forth on the
face hereof and any other provisions attached to, incorporated into, or otherwise made a part of this Purchase Order.
This Purchase Order shall be governed by the terms and conditions of the Master Agreement executed by the parties to this Purchase Order and
to which the items in this Purchase Order are identified.
Contract
Between
PàcifCorp
and
International Business Machines Corporation
for
Software Solution and Implementation Services
Agreement Number: 4600001934
Effective Date: 5èitl i, 2ItJ~,
Page 1 of45
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFIlTONS ...............................................................................................................................4
ARTICLE 2. DESCRITION OF WORK............................................................................................................6
ARTICLE 3. PERIOD OF PERFORMCE......................................................................................................6
ARTICLE 4. PROJECT SCHEDULE; MILESTONES; CRITICAL PERFORMNCE MILESTONES.......... 6
ARTICL 5. CONSIDERATION AND PA YMNT ...........................................................................................7
ARtiCLE 6. TAXS...........................................................................................................................................8
ARTICLE 7. ACCOUNING AN AUDITIG...........................................................................................,.... 8
ARTICL 8. PERFORMNCE OF WORK ........................................................................................................8
ARTICLE 9. WARTIES A1TD REPRESENTATIONS ............................................................................. 8
ARTICLE 10. ACCEPTANCE OF DELIVERABLES.......................................... .............................................9
ARTICLE 12. DESIGNATED REPRESElTTATIVE A1'TD NOTICES .......................................;...................10
ARTICLE 13. SITE REGULATIONS.............................................................................................................10
ARTICLE 14. COOPERATION WIT OTHERSfWORK RULES ........................................................... 11
ARTICLE 15. STA)\TIAR WORK SCHEDULE .........................................................................................11
ARTICLE 16. EXAMINATION OF WORK AND PROGRESS REPORTS ..................................................11
ARTICLE 17. PROFESSIONAL RESPONSIBILIT .................................................................................... 11
ARTICLE 18. 8T A?\TDARS OF DESIGN AND WORKMANSHI ............................................................ 11
ARTICLE 19. CHANGES ...............................................................................................................................12
ARTICLE 20. WARRNTY .........................................................................................;................................. 12
ARTICLE 21. LICENSE GRANT.....................................................................................................................13
.ARTICLE 22. INS1JRANCE A11J WORKER'S COMPENSATION............................................................. 14
ARTICLE 23. l11JEM1TJCATION ..............................................................................................................15
ARTICLE 24. LIMITATION OF LIABILIT................................................................................................15
ARTICLE 25. LAWS A.1\ REGULATIONS ................................................................................................15
ARTICLE 26. l11JEPENDENT COÑl'CTOR ..........................................................................................16
ARTICLE 27. CRAL BACKGROlJJ\1J, IDEJ'TIT VERIICATION AJ\TD RELATED SCREENING. 16
ARTICLE 28. BUSINESS ETHICS ................................................................................................................ 17
ARTICLE 29. NERC CIPS COMPLINCE ................................................................................................... 17
ARTICLE 30. CLAIM NOTICE AJ\1J RESOLUTION PROCEDURE ......................................................... 17
ARTICLE 31. TERMINATION FOR CONVENIECE ................................................................................18
ARTICLE 32. TERMA TION FOR CAUSE.................................................................................................18
ARTICLE 33. OWNERSHIP OF DESIGNS AND WORK PRODUCT.........................................................19
ARTICLE 34. INTELLECTUAL PROPERTY INEMN......................................................................19
ARTICLE 35. EQUAL EMPLOYMNT OPPORTIJNlT A?\1J OTHR NONDISCRlINA TION ...........20
ARTICLE 36. CONFIDThTfL Th'FORMATION / NOJ\'DISCLOSUR.....................................................20
ARTICLE 37. RELEASE OF lJIFOR.MA TION - ADVERTISING AND PROMOTION.............................. 20
ARTICLE 38. NON-ASSIGN'MENT .............................................................................................................. 20
ARTICLE 39. SUBCOJ\'"RACTS...................................................................................................................21
ARTICLE 40. NO?\TWAIVR ........................................................................................................................21
ARTICLE 41. SEVERABILITY .....................................................................................................................21
ARTICLE 42. FORCE MAJEUR..................................................................................................................21
ARTICLE 43. APPLICABLE LAW AND VEE .......................................................................................21 .
ARTICLE 44. ENTIR AGREEMENTiDOCUMENTS INCORPORATED BY REFERECE....................... 21
ARTICLE 45. EXECUTION AND EFFECTE DATE...................................................................................22
Page 2 of45
EXHIBIT A - Statement of Work (including: Appndix A - "PacifiCorp Metrcs", Appendix B - "Deliverable
Material Guidelines", Appendix C - "Deliverable Material Acceptance Process, Appendix D - "Pricin
Schedule", Appendix E - Project Change Procedures and Appendix F - "Escalation Procedurs")
EXHIT B - Tenu of Hardware Purchase
EXHIT C - Tenu of Maintence/Suport
EXHIT D - Guidelines for PacifiCoip Contctor Expense Reprt
EXHIBIT E - "Company's Critera-l\'ERC CIPS"
Page 3 of45
The parties to this Contract are PacifiCorp (hereinafter "Company") whose corporate address is 825l\'E
M ultnomab St., Suite 940, Portland OR 97323 and llM (hereinafter "Contractor") whose addres is
'15300 SW Knoll Pari."'way, Beaverton, OR 97006 (together "the Parties").
ARTICLE 1. DEFIITIONS
Defined Terms:
Acceptance Criteria. This term mean the criteria for Final Acceptance specified in the Scope ofWor~
Applicable Laws. The term means and includes:
(a) any statute, law, rule, regulation, code, ordinance, judgment, decree, wrt or order, of any
Governenta Authority applicable to Contractor generally as a provider ofinfornation technology Products
and Services, including any statute, law, rule, regulation, code, ordinance, judgment, decree, wrt or order
wruch impses obligations on Contrctor concern:
(i) Company, Contrctor, the Work Site or the performnce of any porton of the
Work, or the Work taken as a whole, or the operation of the Project; or
(ii) safety and the prevention of injur to Persons and damage to proper on, about or
adjacent to the Work Site or any other location where any other portion of the Work shall be
performed; or
(iii) protection of human health or the envionment, and control of emissions,
discharges, releases or theatened releases of pollutats, contamiants, chemicals or industral, toxic
or hazdous substances or wastes into the environment, including ambient air, surace water, ground
water, or land, or othervvise relating to the manufactue, processing, distrbution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, chemicals, Hazardous Materials
or other industrial, toxic materials or wastes;
as now or vál1 at any time hereafter be in effect.
Business Day(s). This means a day, other than a Satuday or Sunday or holiday, on which ban ar generly
open for business in Portland, Oregon.
CIPS Covered Assets. TIs means any of the Company;s critical inasnuctue inormtion or critical facilties.
Company's Criteria. Ths means applicable requirements of the USA Patrot Act of 2001 used by the Compy
as the baelie for deterng whether an individual is a restrcted person consistent with the Company's
Personnel Risk Assessment Progrm, as adopted by Company, in the maer set fort on Exhbit F, "Company's
Criter"
Contract. This term means ths agreement between Company and Contractor for Softare Solution and
Implementation Services, and other services as identified herein dated , 2008, and shall include the
term set fort herein, all Exhibits (including each applicable Scope of Work ("SOW")), Attachments,
Appendices and other documents (together the "Contract Documents") intended to be a par of the Contrct
and by this reference are incorporated therein.
Contract Price. Ths term means the fixed amount for performng the Work tht is payable to Contrctor as
set fort in an applicable SOW, which may be modified from time to tie in accordance \vitb the ter of
the Contrct.
Defect. Unless otherwise specifically defined elsewhere herein, the term "Defect" includes any defects,
material code errors, designs, engineering, materials, workmnsrup, equipment, tools, supplies or intallation
or other Work, which (a) do not conform to the requirements of the Contrct or (b) are of defective or inferior
workmanship or materials.
Designated Machine. Ths term refers either to: i) the machine on which Company win use a Softar
Program for processing and which Contractor requires Company to identify to Contrctor by ty/model and
serial number, or ii) any machine on which Company uses the Software Program if Contrctor does not
require Company to provide this identification
Page 4 of45
DeIiverables. T1is means all items to be supplied by the Contractor under the Contract including, but not
limited to, the design critera, system descriptions, required manuals, drawigs and specifications, design
calculations, quality assurnce reports, and all other material documents relating to the Work to be delivered
to Company for review and comment in accordance v'lith the requirements of the Contrct.
Effective Date. Tils means the date that ths Contrct is executed by the Pares.
Final Acceptance. This event occurs at the time of the successful completion of all the Work required under
an applicable SOW, when the Company confin in writing, consistent váth Aricle 10, the Work satisfies
the Acceptace Criteria more fully descrbed in the relevant SOW.
Final Acceptance Guaranteed Date. Ths term shall have the meaning set fort in the applicable SOW or
other Contract Document.
Governmental Authorities. Ths term means all United States and other national, federal, state, provicial,
and local governents and all agencies, authorities, departents, instrmentalities, cour, or other
subdivisions of each having a regulatory interest in or jurisdiction over the Work Site, the Work, the Work or
the Partes to th Contrct.
Industry Standards shall mean those standards of design, engineerig, installation, workmanship,
equipment, and components specified in an applicable SOW, provideg, however, if the relevant standard is
not so specified or is ambiguous therein then "Industr Standards" or "Industr Grade" shall mean those
standads of design engineering, workmnship, care and diligence normlly practiced in the United States by
nationally recognized Informtion Technology Service Providers performng serices of a similar natue and
in accordance v,ith Applicable Laws established for such work. For purposes of tils definition: (a) the
specifications in the Scope of Work must comply with Industr Standards as of the Effective Date; (b) the
Deliverables must comply v.ith Industr Standards at the time that they are submitted to Company; and (c) the
Work performed must comply with the Industr Stadards at the time tht it is perormed.
Machine Code. Ths term means microcode, basic input/output system code (called "BIOS"), utility
programs, device drivers, diagnostics, and any other code (all subject to any exclusions in the license provided
with it) delivered with an IBM Machine for the purose of enabling the Machie's function as stated in its
Specifications. The term "Machine Code" includes LIC.
Materials. This term -means literary works or other works of authorsilp (such as software progr and
code, documentation, reports, and similar works) created, owned and/or supplied by -Contractor as par of a
Servce. The ter "Materals" does not include Softare Programs, Machie Code, or other items available
under their own license term or agreements.
Material Adverse Change ("MAC"). Tils means, with respect to the Contractor, if the Contrctor, ha
experienced a materially adverse change in its abilty to fulfill its performnce and other obligations under the
Contract including any event or circumstance that would give Company the right to termnate for cause
pursuant to ARTICLE 32, TERMINATION FOR CAUSE.
Notice. Ths term means a 'written communication between the Parties required or permtted by th Contrct
and conformg to the requirements of ARTICLE 12, DESIGNATED REPRESENTATI Al'TD NOTICES.
Persons. Ths means any individual, corporation, company, voluntar association, partersilp, incorporated
organization, trst, limited liability company, or any other entity or organiation, including any Governental
Authority.
Program Services. Ths term means the defect support that Contractor provides for IBM licensed Softare
Program. The type of support (e.g., Central Service, Local Service, etc.) and the duration of Program
Services are specified in the programming announcement and contained in the associated Licensed Program
Specifications or License Informtion.
Project. Ths means the complete project to be designed, procured, installed, confgued, interfaced, tested
and/or commssioned, together ",ith all specified equipment and subsystems, all specified supporting
improvements and connections, as descnbed in the Contract Documents and any relevant SOW.
Project Schedule. Thìs term refers to the project schedule provided for in each relevant SOW.
Page 5 of45
Scope of Work ("SOW"). Ths document sets out the specific details of the transactions for each Project.
Each SOW shall include its exhibits, appendices, addenda, change authoriztions, supplements (excluding
purchase orders) and like procurement documents. If there is a confict of tenu among. the documents, the
tenu and conditions of the SOW prevail over the other Contract Documents.
Sensitive Personnel. Ths term means all Personnel with authorized cyber or authonzed unescorted physical
access to Company's CIPS Covered Assets.
Service(s). Ths term means any labor, skill or advice provided to C.ompany pursuant to the Contrct and th
Contrct Documnts.
Software Program. This term means the original and all whole or paral copies or machine-readable
instrctions and data, components, audio-visual content (such as imges, text, recordings, or pictues); and
related licensed materials. The term "Softare Program" includes any Contractor Progra or Non-
Contrctor Program that Contractor may provide to Company, as well as the computer softare code specified
in the SOW which is developed by Contrctor according to mutually agreed to specifications for delivery to
the Contractor under the SOW. The term does not include Machine Code or Materials.
Specified Operating Environment - This means the machines and progr with which a Softare Progrm
is designed to operate, as descrbed in its Licensed Program Specifications.
Subcontractor. Ths means any individua, fi partership, corporation or contrctor, at any tier, having an
agreement with Contractor to peiorm a porton of Contrctots obligations under the Contrct
Term. This means the period of time from the Effective Date until and thugh three years.
Work. Ths term means all obligations, duties, requirements and responsibilities required for the successfu
completion of the Contrct by Contractor, including the fushig of products(s) and/or service(s)
(supervision, labor, materials, equipments and other supplies, etc.) which are described in an applicable SOW.
\"ork Site. Ths means the location or locations where the Work is to be peiormd.
Workers' Compensation Laws. These are the statutory requirements (and associated case law) of the state
andíor federal regulations (e.g., FELA, USL&H, Jones Act) where the Work is to be performed.
ARTICLE 2. DESCRPTION OF WORK
Contractor shaH perform the Work as specifically described in the Contract Documents for a paricular
Project.
ARTICLE 3. PERIOD OF PERFOR'\ANCE
The Partes agree that time is of the essence. Contractor shall commence perfonnnce on the date specified in
the relevant SOW and shall complete the Work no later than the end date specified therein.
Company shall have the right to suspend the Work as set fort in the relevant SOW. Upon such suspension,
Company \\ill pay Contrctor solely for Work satisfactorily performed by Contractor as of the date of
suspension, or as otherwise agreed by the parties in wrting.
ARTICLE 4. PROJECT SCHEDTJLEj MILESTONES: CRITICAL PERFORMANCE
MILESTONES
The Project Schedule contained in each SOW sets fort the major tasks tht mut be completed by the
Contrctor ("Milestones") and the anticipated completion dates for such tasks ("Milestone Completion Dates)
including all design, development and other Milestones to be achieved. Such Project Schedule shall specify
any tasks, obligations or responsibilities ("Company Obligations") which the Company must perform or fulfill
in order for the Contractor to achieve the Milestone Completion Dates for each Milestone, and the date by
which the Company is to fulfill each Company obligation (the "Company Obligation Completion Date").
Certin Milestones identified in each SOW are identified as "Critical Perfonnnce Milestones." While timely
completion of each Milestone is important to the success of the Work, the occurence of a Critical
Perfomince Milestone by its respective Critical Performance Date is of critical importt to the completion
of the Work in a timely manner consistent with the Company's vital business interests. The Contractor shal
Page 6 of45
commt suffcient manpower and resources to pennt the completion of each Crtical Pedormnce Milestone
by the appropriate Milestone Completion Date.
It is understood by the Partes that the Milestone Completion Dates for interim Milestones (tht is, milestones
which are not definedas Critical Pedormnce Milestones) are subject to adjusnnent by the Partes' project
managers working together in the course of the Work, and that Critical Pedormnce Milestone may only be
modified by mutual agreement in n.rriting by the Parties per ARTICLE 19, CHGES.
ARTICLE 5. CONSIDERATION AND PAYMENT
Each SOW specifies the amount payab,le for Materials and Software Products and Services, based on one or
more of the following tyes of charges: one-time, recurng, time and materials, and fixed price. Additional
charges may apply (such as special handling or travel-related expenses). Contractor wíll inform Company in
advance whenever additional charges apply. Recurg charges for a Software Program shall be calculated
begining on the program's Date oflnstallation. Charges for Services are bìled as specified in each relevant
SOW; such charges may be due in advance, perodically durg the pedonnnce of the Service, or afer the
Service is accepted per the acceptance criteria contained in the SOW. Unless otherwse provided in th
Contract: i) Servces for which Customer prepays must be used with the applicable COlltrçtperiod outlined
in the SOW; and ii) IBM does not give credits or refuds for any prepaid or other chages already due or paid.
The Contract Price may only be modified by a Change In Work approved in accordance with ARTICLE 19,
CHAGES.
\Vben a SOW specifies a fixed price, that fixed price includes payment for (i) all costs of Softare,
equipment, materials, labor, trsportation, engineering, design and other serices specified therein (including
any specified intellectual propert nghts licensed thereunder) provided by Contractor or such Subcontrctors;
(Ii) any duties, levies, imposts, fees or charges of any kind (whether in the United States or elsewhere and
including any of the foregoing related to the importtion of any items into the United States or the e:X1'rttion
of any items from any foreign countr) arising out of Contrctor's or its Subcontractor's performnce of the
Work; and (iii) any duties, levies, imposts, fees, royalties or charges of any kid (whether in the United States
or elsewhere and including any of the foregoing related to the importtion of any items into the United States
or the exportation of any items from any foreign countr) imposed on Contractor or its Subcontrctors with
respect to any equipment, materials, labor, or servces provided under the Contract.
When a SOW specifies a percentage of "retainage", the percentage of each payment to be retained by the
Company until Final Acceptance shall be designated in the Statement of Work.
If any governenta authority imposes upon any transaction under ths Contract a duty, tax, levy, or fee,
excluding those based on IBM's net income, then Company agrees tò pay that amount as specified in an
invoice, wùess Company supplies exemption documentation. Company is responsible for any payment of
personal proper taxes for each product from the date IBM delivers it to Company. Additional taxes and tax
related charges may apply if IBM personnel are required to perform Services outside their norm tax
junsdiction. As practical, IBM win work to mitigate such additional tax and tax-related charges and wil
inform Company in advance if these additional charges apply and are payable by Company.
Contractor shall submit an invoice based on the payment tenn described in each relevant SOW. Chrges
wil include applicable taxes, travel and living expenses and other reasonable expenses incured in accordance
with the applicable SOW. Undisputed amounts are due no later than thirt (30) days after receipt by Company
of Contrctor's invoice.
All invoices shall reference the applicable Purchase Order Number and shall be addressed as follows:
PacifiCorp
Att Tam HoGland
Lloyd Ctr Tower-Rm 400
825 NE Multnoma
Portland, OR 97232
IN'VOlCES WHICH DO NOT COJ.7 AI TH ABOVE Il'FORMTION, OR AR NOT
ADDRESSED AS ABOVE, MAY CAUSE PA YM1\TT DELAY.
Page 7 of45
ARTICLE 6. TAXES
The consideration as stated in ARTICLE 5, CONSIDERATION AND PAYMENT, includes all taxes to be
borne by Company arising out of Contrctor's perftlrmnce hereunder, including without limitation sales, use,
and value-added taxes. State and local sales and use taxes shall be stated separtely and shOVlin on all invoices
as a separate line item. Upon request of Company, Contractor shall promptly provide to Company evidence of
payment of all state and local sales, use and value-added taxes.
ARTICLE 7. ACCOlJNTING AND AUDITIG
Contractor shall keep accurate and complete accounting records in support of all cost bí1ings and claims to
Company in accordance with generally recognized accounting principles and practices. For a period of thee
(3) years from the date of Final Acceptance, the Company has the right to obtain from Contractor copies of
relevant documents to demonstrate compliance with the Contract. Such documnts are limited to invoices,
source documents serving as a basis for compensation, supplements, Contract Documents, correspondence
between the Parties and copies of this Contract, all of which exclude cost figues.
Contractor shall assist Company with preparing necessary audit material at Company's expense, and will
allow Company to review any work papers prepared by independent auditors as allowed by professional
standards.
Audit findings by Company's representative v.ill be provided to Contrctor by Company, and the Pares shall
mumally agree on the effect of any audit, including whether and to what extent any over-charges occured.
Any overcharges the Parties mumally agree to honor shall be described in a Notice or Over-Chrge issued by
Company to Contrctor and shall be repaid to Company withn thi (30) days from date of Notice of Over-
Charge.
ART1CLE 8. PERFORMA,"iCE OF WORK
Contractor shall perfonnand complete all oftbe Work on amrney basis subject to the Acceptace Criteria,
in accordance with the applicable SOW, and in compliance 'With Industr Standards and Applicable Laws;
provided, however, tht where any such standard or law provides for less strngent standards than those
specifically stated in the Contract Documents., the standards specifically stated in the Contract Documents
shall govern
Contractor acknowledges that ths Contract constimtes an obligation to design, procure, constrct, implement
and test though Final Acceptance the Project specifically described in each SOW, with the time specified in
the associated Project Schedule.
References to the obligations of Contractor under this Contract as being "turney" and performg the Work
on a "turnkey basis" mean that Contrctor is obligated to supply all of the equipment, labor and services and
to supply and perform in satisfaction all of the Work in satisfaction of the term and conditions set fort in the
Contrct Documents.
ARTICLE 9. WARRA"ìTIES Aj\'D REPRESENTATIONS
Onzanization, Standing and Qualification. Contractor is a corporation, duly organed, validly existing, and in
good standing under t.ie laws of New York, and has, or wil have by the Notice to Proceed Date, ful power
and authority to engage in the business it presently conducts and contemplates conductig in accordance with
all Applicable Laws, and is or 'wil be duly licensed or qualified and in good standing under the laws of all
states in which the Work is to be performed and in each other jurisdiction wherein the natue of the business
transacted by it makes such licensin or qualification necessary and where the failure to be licensed or
qualified would have a material adverse effect on its abilty to perform its obligations hereunder. Upon
request, Contrctor shall fush Company with a certified copy of its permt to trnsact business in the state
wherein the natue of the business trsacted by Contrctor makes such licensing or. qualification necessary
prior to commencing Work under the Contract. Company may, at its option, withold from any payment
hereunder and remit to the relevant Governental Authority such sums as required to be witheld by
Applicable Law, unless Contractor has received a certficate absolving Company from such witholding in
accordance with Applicable Law and has provided Company with a copy of such certificate. In addition, the
Page 8of45
Company may, if required by Applicable Law, "I'Ithold the Final Payment of the Contract as a guarantee tht
sales and use tax wil be paid in the event that Company has been provided notice by a Governental
Authority pursuant to Applicable Law to withhold funds. Contractor shall make such returns and pay such ta
on account ofpayrnents received under th Contrct as Applicable Law may require, and shall hold Company
harmess on account of its failure to withold any amount required by Applicable Laws from any payment
made hereunder or on account of Contractor's failure to pay any such tax to a Governental Authority.
Enforceable Contract. This Contract has been duly authorized, executed and delivered by Contractor and
Company and constitutes the legal, valid and binding obligation of Contractor and Company, enforceable
against Contrctor or Company in accordance with its term.
Due Authorization. The execution, delivery, and performnce by Contractor of ths Contract wil not violate
or confict with (i) any Applicable Laws, (ii) any covenant, agreement, or understanding to which it is a par
or by which it or any of its properties or assets is bound or affected, or (iii) its organitional documents.
Government Approvals. No authoriation, approval, exemption, or consent of or by any Governental
Authority or other Person is required in connection with the authorition, execution, delivery, and
performance of this Contract by Contractor, other th as set forth in ths Contract.
No Suits. Proceedings. There are no actions, suits, proceedings, or investigations pending or, to Contractor's
knowledge, theatened against it at law or in equity before any cour (United States or otherwise) or before
any Goverenta Authority (whether or not covered by insurance) tht individually or in the aggregate could
result in any materially adverse effect on the business, properties, or assets or the condition, financial or
othenvise, of Contractor or in any impairent of its ability to perform its obligations under this Contract.
Contrctor has no knowledge of any violation or default with respect to any order, wrt, injunction, or decree
of any cour or any Governmental Authority tht may result in any such materially adverse effect or such
impairent.
Business Practices. Contractor and its representatives have not made any payment or given anything of value
and Contractor wil direct its employees, agents, and Subcontractors directly contrcting with Contractor, and
their employees or agents to not, make any payment or give anyting of value, in either case to any
governent offcial (including any offcer or employee of any Governental Authority) to inuence his, her,
or its decision or to gain any other advantage for Contrctor in connection with .the Work to be performed
hereunder. None of Contractor, its Subcontractors, or any of their employees or agents shall take any acton
that in any way violates the United States Foreign Comipt Practices Act or any similar Applicable Law.
Contrctor shall provide reasonable Notice to Company of any violation of ths covenant (or of the direction
described in the firt sentence hereof) and shall indemnfy and hold Company harmess for all losses arising
out of such violation.
Financial Condition. Contrctor is financially solvent, able to pay its debts as they matue, and possessed of
suffcient working capital to complete its obligations under this Contrct. Contractor is able to fursh. the
Softe, equipment, labor, and design services needed for the Project, is experenced in and comptent to
perform the Work contemplated by the Contrct Document and any applicable SOW, and is qualified to do
the Work.
Additional Warranty Procedures. Where Company reasonably detennnes that an imediate need (a situation
in which makes a reasonable determtion that there is a condition or defect that could materally adversely
impact the Work and its operations) exists to correct a defect relating to performnce under this Contrct,
Company shall notify Contractor pursuant to Notice provisions in this Contrct, With two (2) days aftr
receipt of said Notice, Contractor and Company shall confer with regard to appropriate procedures in
responding to the "immediate need." Within a reasonable period thereafter, not to exceed a time specifed in
an SOW, such appropriate and necessary remedy shall be completed by Contrctor._If Contractor fails in
either its confer and resolve obligations under this paragraph, Company then has the right to perform the work
in accordance with the warrnty procedures; provided however that the failure to comply with such warty
procedures shall not voice any other warrties in this Contract.
ARTICLE 10. ACCEPTA.1"iCE OF DELIVERi\BLES
Deliverables supplied by the Contractor for the Work performed under this Contract for which Company's
Page 9 of45
review and acceptance is required by the applicable SOW, shall be deemed accepted once Company gives its
""Tinen acceptance pursuant to said SOW. In the event the Company does not provide its wrtten acceptance
\"lithin the number of days designated in the applicable SOW, the Deliverables shall be deemed accepted. All
Work and Deliverables are subject to review and/or testing at the tíme(s) set fort in the applicable SOW.
Company has the right to reject any Work or Deliverables that do not meet Acceptance Criteria. Written
notice from Company that any Work or Deliverable is rejected shall clearly state the reason for the rejection
and shall not relieve Contractor or its obligations to meet any milestone delivery date(s). Neither inspection
nor testing of Work or Deliverables, nor the lack of same, nor acceptance of the Work or Deliverables by the
Company, nor payment therefore, prior to Final Acceptace by the Company relieves the Contractor from any
obligations under ths Contract. All review and testing for the Work shall occur according to the process
defined in the relevant SOW.
ARTICLE 11. ASSIGNED PROJECT ROSTER
The Contractor shall designate key project personnel as defined in the Contract Documents. All employees
assigned by the Contractor to perform any of the Contractor's obligations shal be fuly qualified to peorm
the taks assigned them.
The Company shall have the right to reasonably approve or disapprove the Contractor's selections for key
project personnel, and any Subcontractors or independent contractors or subcontractors utilized by the
Contractor for the Work hereunder.
In the event the Contractor intends to remove or change its key project personnel who are assigned to a
Project or reassign any such personnel to another Project, the Contrctor will give the Company fifteen (15)
days advance wrtten notice of the Contractor's intentions. The Company shall give due diligence and
consideration to any request by Contractor to replace key project personnel and shal respond within fifteen
(15) days from receipt of Contrctor's notice. The Contractor shall not replace key Project personnel excet
for reasons beyond Contractor's reasonable control (including but not limited to death disabilty, termnation.
retirement or promotion. without the vvritten consent of the Company, which consent shall not be
unreasonably witheld.
ARTICLE 12. DESIGNATED REPRESENTATIVE AND NOTICES
Pnor to commencement of the Work, each Part shall designate a project manager authoried to act in its
behalf and shall advise the other Part in wrting of the name, address, and telephone numer of such project
manager. All communications relating to the day-to-day activities and the general management of-project
personnel, including but not limited to ensunng tht any approval required under ths Contrct is executed by
du1y authoried representatives of the Parties under ths Contract, shall be exchanged between such project
managers.
Any notice by either Part to the other, whether by overnght courier or electronic communication. shall be
delivered to the offce of the project manager of the other Par, or, if deposited in the mail, properly stamped
with the required postage and addressed to the office of such representative. If a mail notice is sent, it shl be
deemed received with thee (3) business days. All notices shall be in ..vriting (uness otherwise designted
herein). The Partes' addresses for puroses of notice shal be as set fort below:
If to Company:
Pad'ai¡-~
$5:tS NF:utlPcJ
Pot-Ill/iei, Of( 97:(32Att fJj .Du- T.Ií; ,lCT- JIO
Telephone ~tJS - 813- t6:J 12
If to Contrctor:
11107
7/ .s Wack, ))r-
cilc(L!Jo i' Il, ttototAtt: 12, fYa.çat-a.c.t-AIa-
Telephone :liZ -529- ::J'g~-O
ARTICLE 13. SITE REG1JLATlONS
The Contractor, while performng Work at the Work Site, shall adhere to the Company's Work Site
regulations which are provided to Contractor in advance, if any, including without lintation environmental
protection. loss control, dust control, safety, and securty, and prohibit the use or possession of drgs, alcohol,
Page 100f45
and frrearm by its employees and the employees of any sub-Contractors of any tier. The Contrctor shall not
damage existing equipment and facilities, and shall endeavor to avoid unreasonable intererence with the
Company's operations.
ARTICLE 14. COOPERATION WITH OTHERS/WORK RUIÆS
The Contractor shall at all times maintain reasonable discipline among its employees, including the employees
of its Subcontractors of any tier. The Contractor shall comply viith Work Site rules established by the
Company which are provided to Contractor in advance and shall cooperate \vith Company in enforcing such
rules.
Any employee of the Contractor or its Subcontractors of any tier, who is reasonably deemed by the Company
to be incompetent or disorderly or who poses a dager to the safety of the Work. shall be removed from the
Work upon the written request of the Company and shall not again be employed in the Work without the
consent of the Company. Any such removal shall not result in a delay in or change to Contractor's obligations
regarding the schedule of the Work to be performed puruant to ths Contrct.
ARTICLE 15. STANDAR WORK SCHEDULE
Work scheduled and pedormed by the Contractor on the Company's premises shall conform to published
working hours and shall account for the Company's obseived holidays. Due dilgence shall be considered bythe Contrctor for all union work rules. .
ARTICLE 16. EXA.l\INATJON OF WORK AND PROGRESS REPORTS
Contrctor shall submit periodic progress reports as requested by Company. Company, its agent or
representatives, may visit Contractor's offce at any reasonable time to detenne statu of ongoing activities
required by ths Contract.
All Work ""rill be subject to examination at any reasonable time or times by Company, which shall have the
right to reject Work which does not meet the speci~cations contained in a relevant SOW.
ARTICLE 17. PROFESSIONAL RESPONSIBILITY
Contractor shall perform the Work using the standards of care, skill and dilgence normlly provided by a
professional in the performance of similar seivices, and shall comply with all codes and standards applicable
to the Work.
In the event of Contrctor's failure to do so, Contractor shall, upon notice by Compny, promptly repedorm
the Work and correct the defect at Contractor's sole cost. Contractor's obligation to correct and repedorm its
Work shall be in addition to, and not in lieu of, any otherright that Company may have.
ARTICLE 18. ST A.~DARS OF DESIGN A1\'D WORKANSHI
The finished Work shall conform to the specifications set fort in the relevant SOW. The intent of the
Contract and Contract Documents is to acquire for the Company Work of good quality workmnship. Each
and every Sofuvare Program delivered under ths Contrct shall be implemented. tested and docmented in
accordance with the specifications set fort in the associated SOW. Notwithtanding the above, the Partes
agree to comply with the following:
Contractor hereby has the right to review and verify Company's usage data and other inormtion affecting the
calculation of charges, as well as data relating to Company's use of Software Programs at all sites and for all
environments in which Company installs or uses Software Programs. Contractor may use an independent
auditor to assist with such verification, provided Contractor has a wrtten confdentiality agreement in place
with such auditor.
Company agrees to create, retain, and pro\ride to Contractor and its auditors wrtten records, system tools
outputs, and other system informtion suffcient to provide auditable verification that Company's intallation
and use of Softare Programs complies with Contractor's applicable licensing and pricing term. Contrctor
\'111 notify Company in writing if any such verification indicates that there are discrepancies in pricing and
licensing from the term and conditions in this Contract. The rights and obligations in this secton remain in
effect during the period any Softare Programs are licensed to Company and for two years thereafter.
Page 11 of45
ARTICLE 19. CHANGES
Either Party may at any time: seek changes, additions, deletions or amendments to an SOW; or seek to direct
the performnce, non.performance and/or variation in Work; or seek to alter the Project Schedule. If any such
aforementioned changes in direction, whether Company requested or Contrctor requested, results in a
material change in the amount or character of the Work, an equitable adjustment in the Contract provisions,
including but not limited to price tenn may be made, and ths Contrct shall be modified in writing
accordingly. Any said change re-quires mutual written agreement by the Parties. Any claim for an adjustment
under this Arcle shall be processed in accordance with the provisions of ARTICLE 30, CLAIM NOTICE
AND RESOLUTION PROCEDURE.
Nothng contained in this Aricle 19 shall excuse Contractor from proceeding with the performnce of the
Work in accordace with the Contrct
Contractor shall not suspend the Work pending resolution of any proposed Change In Work. Any dispute
arsing from or related to a Change In Work or the Wlderlying changes or performnce of changes contained
therein shall comply with the provisions of ARTICLE 30, CLAIM NOTICE AI\TJ RESOLUTION.
ARTICLE 20. W ARRA'TY
Warranty for IBM-ovvned Software Programs. Contractor warrants that each IBM-owned Software Program
when used in the Specified Operating Envionment, will conform to its Specifications and the details of the
applicable Contract Documents. In addition, Contrctor warrants that at the tie of delivery no known
viruses wil exist in the Software Program and warants that it wil in good faith work with Company to
eliminate any virses or other inections. Contractor also warrants that, throughout the applicable wanty
period, any media upon which it delivers Softare Programs as part of the Work under this Contrct shall be
free of defects in materials and workmnship.
Warranty for Services. For each IBM Service provided by Contractor relatig to the Work under ths
Contract, Contractor warrants that Contractor shall perform and/or deliver the Service using reasonable care
and skill; in a professional and workmanlike maner; and in compliance with the then-cent descrption
and any completion criteria contained in the applicable Contract Documents.
Warrnty Limitations. The warranties stated above will not apply to the extent there has been misuse,
accident tht is not the fault of Contrctor, modification that is not specifically authorid in writing by
Contractor, operation in other than either the Specified Operating Environment or a suitable physica
environment, improper maintenance by Company, or failure in a Software Program or Service caused by
either a non-IBM Softare Product or Service uness Contractor specifically provides a warrnty for that nan-
IBM Softviiare Product or Service in an applicable SOW.
THESE WARl\TIES, UNLESS PROVIDED OTHERWISE IN A RELEVANT SOW, AR THE
EXCLUSIVE W A."'TIES Ai~D REPLACE ALL OTHER W ARR4NTIES Al'\ï) CONDITIONS,
EXPRESS OR IMPLIED, INCUJDING BUT NOT LIMITED TO, THE IMPLIED W ARRl\TIES
OR CONDITIONS OF MERCfI"'TABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
IBM does not warrnt unnterrpted or error-free operation of a Product or Service or that IBM will correct all
errors. IBM will identifY IBM ov..ned Softare Progrms that it does not warant. Unless IBM specifes
othenvise (in a forn quote), it provides Materials, non-IBM Software Progrms, and non-IBM Serces
WITHOUT WARRTIES OF Ai'\ry K!TJ. However, non-IBM manufactuer, suppliers or publishers
may provide their own waranties to you.
Warrántv Period. The "Warnty Period" for the Work shall be set fort in each SOW. Contrctor shall have
no liability under this Section from and after the end of the Warranty Period (or at the end of a period
extended as described below); provide¡l however, that the Warranty Period for any item or part required to
be repaired, corrected or replaced following discovery of a Defect during the original Warnty Period shall
be extended from the time of such repair, correction orreplacement for a period equal to the original Warranty
Period. Notwithstanding the foregoing, no Warranty Period shall extend beyond a date that is defmed in the
applicable SOW.
Enforcement After Expiration. At or after the expiration of the Warrnty Period, Company shall be
responsible for enforcing all representations, 'warranties, and guarantees from Subcontractors, and Contractor
shall provide reasonable assistance to Company, on a reimbursable basis, in enforcing such representations,
warrties, and guarantees, when and as reasonably requested by Company. In addition, prior to the
Page 12 of45
expiration of each respective Warranty Period, or the extension thereof, Company, at its option and upon prior
wrinen Notice to Contrctor, may enforce any such warranty against any Subcontrctor if (i) Company
determes that Contractor has not enforced such waranty against the Subcontrctor in a timely and diligent
manner or performed the warranty work itself, or (ii) a Contrctor Event of Default exists.
Subcontractor Warranties. Without in any way derogatig from Contractor's own representations and
warranties with respect to all of the Work, Contractor shall use its reasonable effort to obtain from all
Subcontractors (including Suppliers) any representations, warranties, guarantees, and obligations offered by
such Subcontractors, and to negotiate warranty perods longer than the Waranty Periods at no additional cost
to Contrctor ",lith respect to design, materials, workmanship, equipment, tools, supplies and other items
furnshed by such Subcontractors. All representations, waranties, guarantees, and obligations of such
Subcontrctors shall, at the request and direction of Company, and without recourse to Contractor, be assigned
to Company or any financing entity upon default by Contractor or termnation or expiration of this Contract;
provided, however, that, notwithstanding such assignment, Contractor shall be entitled to enforce each such
representation, waranty, guarantee, and obligation though the end of the warty period.
Correction of Defects.
(a) Company shall promptly give timely wrinen Notice to Contrctor upon discovery of any
failure of any of the Work to satisfy the Project Waranties during the Warranty Period (includin
Subcontractor warranty period and warrnty period extensions). In the event of any such failure under
circumstances in which there is an "immediate need" (a situation when there is a theat of imment har to
persons or propert or a situation that in Company's reasonable determnation could materially adversely
impact the operation of the Project and/or Work), the Company shall perform such warranty work for
Contractor in accordance with the Additional Waranty Procedures (set forth in Arcle 9); provided however,
that the failure to comply with such Warty Procedures shall not void the Project Waranties. If a Softe
Program does not function consistent with the specification set fort in the applicable SOW durng the fist
year after Final Acceptance and IBM is unable to make it do so after reasonable effort and time, Company
shall retu Softare Progrm and ""il be refunded the total amount of fees paid for Softare Program. If
Contrctor can reproduce Company's reported problem in the Specified Operatig Environment, Contrctor
volll issue defect correction information, a restriction, or a bypass. Contrctor provides Progrm Services for
only the unmodified portion of a current release of a Program. Contractor provides Progrm Services i) on an
on-going basis (with at least six month' wrinen notice before Contractor termnates Program Servces), ü)
until the date Contractor specifies, or iii) for a period the Partes mutually specify. IBM warants that it does
and shall perform each IBM Service using reasonable care and skill, and according to the curent description
and completion criteria, if any, contained in the Contrct Documents.
ARTICLE 21. LICENSE GRAT
License Grant Software Program are hereby licensed to Company as specified in applicable Contract
Documents or other license document, such as the IBM Internationa Program License Agreement. In the
event that a Contract Document or other applicable license document does not specify the manner in which a
Soft\.vare ProgramIs licensed to Company, Contrctor \v:i grant (at the time of the trnsfer of the softare)
Company a nonexclusive license to use a Softare Progrm only by Company in the United States. Softare
Programs are owned by IBM Contractor, one of its subsidiaries, or a third-part and are copyrghted and
licensed (not sold). Under each license, Contractor authories Company to use the Softare Program's
machine-readable portion on only the Designated Machine. If the Designated Machie is inoperable,
Company may use another machine temporariy. If the Designated Machine cannot assemble or compile the
Softare Program, Company may assemble or compile the Softare Program on another machie. If
Company changes a Designated Machine previously identified to Contractor, Company agrees to (1) notify
Contrctor of the change and its effective date, (2) use the Software Program to the extent of authoriations
Company has obtained, (3) make and install copies of the Software Progrm, to support the level of use
authoried, provided Company reproduces the copyrght notices and any other legends of ownership on each
copy or paral copy; and (4) use any porton of the Softare Program IBM i) provides in source fonD or ii)
marks restricted (for example, "Restrcted Materials of IBM") only to resolve problems related to the use of
the Software Program, and modify the Software Program so that it wil work together with other product.
For each Software Progrm, Company agrees to comply "vith any additional or different term in the Licensed
Program Specifications the Contract Documents, or applicable license documents, and to ensure that all users
of the Software Progrm (accessed either locally or remotely) do so only pursuant to Company's authoried
Page 13 of45
use. For each Software Program, Company also agrees to maintain a record of all copies made, and provide
the record to IBM at its request. Company agrees not to reverse assemble, reverse compile, otherwise
translate, or reverse engineer the Software Program unless expressly permitted by applicable law without the
possibility of contractual waiver or sublicense, assign, rent, or lease the Software Progr or trnsfer it
outside Company.
If approved in advance in \viiting by IBM (which approval includes any applicable license us nghts included
in license documentation), and subject to any necessar agreements which IBM requires, Company may
exercise its rights hereunder through thid part subcontractors for the sole purose of assisting Company in
its permitted use of the Software; provided, however, that each such third par subcontrctor must agree in a
legally binding wrting, to which Company is a named third par beneficiary, to be bound by term and
conditions herein.
ARTICLE 22. INSlJ'iCE AND WORKR'S COMPENSATiON
Without limiting any liabilities or any other obligations of Contractor, Contractor shall, dunng the penod of
Work under ths Contract, secure and carr with insurers the following insurance coverage:
Workers' Compensation. Contractor shall comply with all applicable Workers' Compation Laws and shall
fush proof thereof satisfactory to Company pnor to commencing Work.
Employer'Liabilty. Inurnce with a minimum single limit of $1,000,00 each accident, $1,00,000 disease
each employee, and $1,000,000 disease policy lit
Commercial General Liability. The most recently approved iso policy, or its equivalent, written on an
occurence basis, with limits not less than $1,000,000 per occurencel $2,000,000 generl aggegate (on a per
location and/or per job basis) bodily injur and propert damage, including the following coverages:
a. Premises and operations coverage
b. Independent contractor's coverage
c. Contracrualliability
d. Products and completed operations coverage
e. Coverage for explosion, collapse, and underground propert damage
f. Broad form propert damage liability
g. Personal injur liabilty, 'With the contrctual exclusion removed
h. Sudden and accidental pollution liabilty
Business Automobile Liability. The most recently approved iso policy, or its equivalent, with a mimum single
limt of $1 ,000,00 for boily injur and proprt damge including sudden and accidenta pollution liability, with
respect to Contractots vehicles whether ovmed hied or non-owned, assigned to or used in the performce oftb
Work.
Professional Liability. Insurance coverig dages arsing out of negligent acts, errors, or omissions conmtted
by Contrctor in the perfomince oftbs Contrct, with a liability limt of not less th $1,000,000 each clai
IBM shall in good faith use commercially reasonable effort to ensure tht Professiona Liability coverage
continues in place with the same term and conditions as descnbed herein unti aft December 31, 2010. The
intent of ths policy is to provide coverage for claim arsing under ths Contrct and causd by any error,
omission, breach or negligent act for which the Contractor is held liable.
Umbrella Liability. Insurance with a minimum limit of $5,000,000 each occurence/aggregate where
applicable to be excess of the coverages and limits required in Employers' Liability insurce, Conuercial
General Liability insurance and Business Automobile Liability insurance above.
Except for Workers' Compensation insurance, the policies required herein shall include provisions or
endorsements naming or including Company, its offcers, directors, agents, and employees as additional
inureds.
To the extent of Contractor's negligent acts or omission, all policies required by ths Contract shal include
provisions that such insurance is primary and non-contnbutory; and the policy contain a cross liabilty or
severabilty of interest clause or endorsement. Should any of the policies described herein be canceled, or their
limits of liability materially changed, before the expiration date thereof, Company shall use conuercially
Page 14 of45
reasonable efforts to ensure that the insurer affording coverage wil mail within thi (30) days prior written
notice to the certficate holder named herein. Failure to mail such notice shall impose no obligation of liability
of any kind upon the insurer affording coverage, its agents or representatives.
A certificate certifyng to the issuance of such insurnce shall be furshed to Company prior to
commencement of Work by Contractor. Commercial General Liability coverage wrtten on a "claims-made"
basis, if any, shall be specifically identified on the certficate.
ARTICLE 23. INDEMNIFICATION
ffM ""il defend and hold Company harmess to the extent provided herein at IDM's expense and pay all
costs, losses, suits, judgments, expenses, damages, and attorney's fees that a cour finally awards or that are
included in a settlement approved by IDM related to the following tyes of claim:
a. Damage to real property and tangible personal propert;
b. . Bodily injur to, or death of any person(s), includig v.'ithout limitation emloyees of Company, or of
Contrctor or its sub-Contrctors of any tier; and
c. Claims arsing out of Workers' Compenstion or Unemployment Compensation laws applicable to
employees of Contrctor.
Contrctots indenmity obligation under this Ankle shall not extend to any liabilty caused by the sole negligence
of any of the Indemntees.
ARTICLE 24. LIMITATION OF LIABILITY
Circumstances may arise where, because of a default on Contractor's part or other liability, Company is
entitled to recover damages from Contractor. In each such instance, regardless of the basis on which
Company is entitled to claim damages from Contractor (including fundamental breach, negligence,
misrepresentation, or other contract or tort claim), Contrctor is liable for no more than:
1. Payments referred to in the Patents and Copyrghts Indemnty Section below;
2. Damages for bodily injur (including death) and damage to real propen andtagible personal propert; and .
3. Claim against Contrctor arsing out of Workers' Compensation or Unemployment
Compensation laws applicable to employees of Contrctor.
4. The amount of any other actual direct damages shall be limited to two times (2x)
the charges for the Softare Program or Services (if recur, 12 months charges
apply) that is the subject of the claim or $100,000, whichever is greater. For
purose of ths term Product includes Materials, Machine Code and Licensed
Internal Code.
This limit also applies to any of Contractor's subcontractors and Program developers. It is the maximum for
which Contractor and its subcontractors and Program developers are collectively respnsible.
Items for Whch ffM is Not Liable
Under no circumstances is Contractor, its subcontractors, or Program developer liable for any of the
fol1ov.'Ïg even if informed of their possibilty:
· loss of, or damage to, data;
. special, incidental, or indirect damages or for any economic consequential damages; or
. lost profits, business, revenue, goodwill, or anticipated savigs
ARTICLE 25. LAWS Ai'\D REGli'LAT10NS
Contrctor shall at all times comply with all laws, including \vithout limtation those governg wages, hour,
desegregation, employment discrimination, employment of miors, health and safety, which are applicable to
IBM as a provider of informtion technology products and services. ffM is not responsible for deternnig
Page 15 of45
the requirements of laws applicable to Company's business, including those relatig to the Software
Programs, Services and other Work required by this Contract, nor that IBM's provision of or Company's
receipt of paricular Software Programs, Services and other Work under this Contract meets the requirements
of law. Neither Part is obligated to take any action tht would violate Applicable Law. Contractor shall
comply with equal opportty laws and regulations pursuant to ARTICLE 35, EQUAL EMPLOYME1'TT
OPPORTUNITY Al\'D OTHER NONDISCRIMINATION CLAUSES.
ARTICLE 26. INDEPENDENT CONTRACTOR
Contrctor is an independent contrctor and persons employed by Contrctor in connection herewith shall be
employees or subcontractors of Contractor and not employees of Company in any respect.
ARTICLE 27. CRIMINAL BACKGROlJND CHECK. IDENTITY VERIFICA nON A.l\D RELATED
SCREJ'"1G
If requested by the Company, the Contractor shall conduct, at Contractor's cost and expen, criminal
background checks for the current and past countres of residence on all employees, agents, Subcontrctors or
indepndent contractors and the employees, agents or repesentatives of Subcontractors or independent
contrctors, that have electronic or physical access to Work or Company facilities. At a minimum, a social
securty number verification and seven-year criminal background check, including felony or misdemeanor
convictions involving: (a) violence to persons/propert; (b) theftfraud; (c) drg/alcohol; or (d) trffic/other
are required. Employment history, education verification, and professional certfications may also be required
by the Company. 'All background checks wil be conducted in accordance 'with federal, state, provincial, and
local laws, and subject to existing collective bargaining unit agreements or other agreements, if any.
Contractor shall not allow persons who have not met the Company's cnteria to perfoim Work, uness
Contractor has received assent from Company. Contractor shall supply a certification that meets Company's
criteria for each Contractor employee, agent or representative and for employees, agents or representatives of
any Subcontrctor or independent contractor employed by Contrctor. Contractor shall ensure that
employees, agents, Subcontractors or independent contractors and the employees of Subcontrctors or
independent contractors sign an appropnate authoriation form pnor to crimal background checks being
conducted, acknowledging the background check is being conducted and permttg Contrctor to use the
results of the background check in determing personnel assignents.
Contrctor shall have and ensure compliance \..'Íth a substance abuse/drg and alcohol policy tht complies
\\'Íth all applicable federal, state and/or local stanites or regulations. In addition, if requested by Company in a
SOW, Contractor shan ensure a drg test, at Contractor's cost and expense, for an employees, agents,
Subcontractors or independent contractors and the employees, agents or representatives of Subcontractors or
independent contrctors, tht have electronic or physical access to Work or Company facilities has been
completed prior to assignment at Company. Such drg test shall be a five (5) Panel Drug Test, which should
be recognable at testing labs as a "SamSA5 panel at SONG - THC "cut-off'.
For any asigned worker who has had a recent background check or drg test then "recent' shall be dermed as
less thn six (6) month prior to the assignment date. Such recent background check or drg test shall be
documented pe the previous paragrph.
Contractor shall ensure Departent of Transportation compliance, including but not limited to valid drvers
license, equipment inspections, hours of service and all appropriate documentation for any assigned worker
who may drive while on assignment to Company.
Contractor warrants that Contractor, its employees, agents, Subcontrctors or independent contractors and the
employees of Subcontractors or independent contractors have met the Company's cnteria or received assent
from the Company and are in compliance with Contractor's substance abuse/drg and alcohol policy.
It is understood and agreed that Company may request that Contractor provide an ongoing and updated list of
persons that have been denied access to Company Work or facilities.
Page 16 of45
ARTICLE 28. BUSINESS ETHICS
Contractor, Company, and their employees, agents, representatives and Subcontrctors. shall at an times
maintain the highest ethical standards and avoid conficts of interest in the conduct of Work for the Company.
ARTICLE 29. NERC CIPS COMPLIAi"lCE
In the event that the Work under this Contract requires any authorized cyber or authoried unescorted physical
access to Company's Critical Infrastrctue Protected ("CIP") assets, Consultat and all Sensitive Persoimel
shall be required to comply '\'Ïth Nort American Electrc Reliabilty Corporation (''NERC'') CIP Stadards
("CIPS"), as adopted by Company's Criteria (attched hereto and incorporated herein as Exhibit E,
"Company's Criteria-NERC CIPS"). For all Sensitive Persoime1, Contrctor shall:
a. Ensure Sensitive Personnel are infonned of and comply with Company's traing, persoimel risk
assessment, securty awareness and infonntion protection prçigrams;
b. Conduct the background checks outlined in subsection (a) of ARTICLE 27, CRIINAL
BACKGROlJl'm CHECK, IDENTY VERIICATION AND RELATED SCREE1'1NG, and
provide the certification required by subsection (c) of the same arcle;
c. Conduct the drg test outlined in subsection (b) of ARTICL 27, CRIINAL BACKGROt.TD
CHECK. IDENTITY VERIICATION MTD RELATED SCRENING and provide the certcation
required by subsection (c) of the sam artcle;
d. Enure Sensitive Personnel complete Company provided CIPS compliance trinig prior to accessing
CIPS Assets;
e. Provide Company váth a list of Sensitive Persoimel authorized to access CIPS assets that shows
Sensitive Persoimel's infonnation sensitivity classification clearance level and assures Sensitive
Personnel adherence to protected infonntion handling procedures;
f. Report Sensitive Persoimel tennations for cause iimediately to Company but not longer than
twelve (12) hours from time of termnation and report all other Sensitive Persoimel termnations or
changes in employment status for those who no longer require access within twelve (12) hours from
time of occurence;
g. Keep accurte and detailed documentation to confrm compliance with the requirements of the
1\TERC CIPS.
Contractor shall not allow any personnel who have not met the foregoing requirements of this ARTICLE to
perfonn Work, unessContrètor has received prior written consent from Company. Contrctor shall supply
Company with a certfication on the fonn included as Exhibit _ "Contractor Infonntion Fonn" for each of the
Sensitive Personnel to be assigned to the Work, prior to such assignent.
Contractor and its Sensitive Persoimel shall each be required to execute a separte confdentiality and non-
disclosure statement, substantially in the fonn of the standard PacifiCorp "Confdentiality and Non-Disclosure
Agreement" available on request.
Contractor shall designate one person to be responsible for compliance with the requirments of tls
ARTICLE 29, and aU reporting and inquiries shall be made via e-mail toCIPS-Contracting~acifiCorp.com.
Any event giving rise to a reportg obligation under this ARTICLE 29, shall be reported to Company withn
twelve (12) hours of its occurence.
ARTICLE 30. CLAI NOTICE AND RESOLUTION PROCEDUR
In the event either Part has a claim, request for a time extension and/or additional compensation, or any other
adjustment of the tenu of the Contract or Contract Documents, or has any dispute arsing out of the Work
(hereinafter "Claim"), that Part shall notify the other Part in \'tTÌting withi five (5) workig days following
the occurence of the event giving rise to the Claim
All disputes hereunder shall be setted, if possible, by mutual agreement of the Company and Contractor. If
the maner is not resolved by the Partes' representatives v.'Ìthin ten (10 ) business days from the time the
Notice above is received, either Part may, by giving written Notice to the other as defined hereunder, cause
Page 17 of45
the matter to be referred to a meeting of appropriate management representatives of the Paries. Such meeting
shall be held "iithin ten (i 0) business days following such wrtten notice.
If the matter is not resolved 'within th (30) business days after the date of the management meeting
described above or such later date as may be mutually agreed by the Parties in ""riting, then the Partes may
pursue anyother remedies (legal and equitable) they may have.
Even if a Claim arises, Contractor shall continue its performance as required under ths Contract.
ARTICLE 31. TERMINATION FOR CONVENIENCE
The Parties wil specify in each relevant SOW whether either or both of them shall the right to termnate the
SOW for convenience. Company may termnate this Contract at any time without cause by sending to
Contractor ,-Titten notice at least two (2) weeks prior of such termnation. As to any SOW which has not yet
been completed at the time of such termnation, this Contract shall remain in force, as if not termted, until
the completion or termation of the SOW.
ARTICLE 32. TER.\1:NA TION FOR CAUSE
i 1. For puroses of this Contrct a materal default (one that may serve as the basis of ths Contract's
termation "for cause") shall be the occurence of any of the followig:
a. A breach by either Part of any of its material obligations under ths Contrct, if such breach
continues uncured for a period of ten (10) calendar days after receipt of \\Titten notice from
the non-breaching Par, unless such breach cannot by its natue be remedied withn such
period; in which event, the breachig Part shall provide evidence reasonably satisfactory to
the non-breaching Part within ten (10) calendar days after receipt of such notice that such
breach ".ill be corrected or that the breaching Par is makig reasonable progress to that
end.;
b. A determnation that any representation, statement. or waranty made by either Part in the
Contract,. or any other statement, report, or document which a Part is required to furnish to
the other Part, was false or misleading in any material respect;
c. The fiing by or against Contractor of a proceeding under any banptcy or similar law,
unless such proceeding is dismissed within thirt (30) calendar days from the date of filing;
the making by Contractor of any assignent for the benefit of creditors; the filing by or
against Contrctor for a proceeding for dissolution or liquidation, uness such proceeding is
dismissed withn th (30) calendar days from the date of filing; the appoinnnent of or the
application for the appoinnnent of a receiver, trstee, or custodian for any material par of
Contractor's assets unless such appointment is revoked or dismissed withn th (30)
calendar days from the date thereof; the attempt by Contractor to mae any adjustment,
settlement, or extension of its debts with its creditors generally; the insolvency of
Contractor; the filling or recording of a notice of lien or the issuance or the obtaing of a
levy of execution upon or againt a material portion of Contrctor's assets, uness such lien
or levy of execution is dissolved withn thirt (30) calendar days from the date thereof.
d. A Material Adverse Change has occured with respect to Contractor, and Contractor fails to
provide such perfonnnce assurances as are reasonably requested by Company.
e. Any violation oflaw committed by a Part, its employees, agents or subcontrctors.
2. Upon the occurence of a breach or material default specified in this ARTICLE, the non-breachig Par
shan have the right to termte this Contract for cause.
3. Upon the occurence of any such material default, follov.'Ùg the applicable process described in this
ARTICLE. the non-breachig Part shall be entitled upon written notice to the breachig Part without
limiting any of the non-breaching Part's other rights or remedies, to termnate this Contract or to
termnate the breaching Par's right to proceed with that porton of the Work affected by any such
material default.
4. Upon termnation of. this Contract or any portion of this Contrct upon a material default, the non-
breaching Part shall be entitled to pursue any and all rights and remedies that it may have against the
breachig Part under ths Contrct or at law or in equity.
Page 18 of45
5. Upon receipt of any such 'written notice of termnation of the entire Contrct or of any right to proceed
with any portion of the Work following the applicable process described in this ARTICLE, Contrctor shall,
at its expense, for that portion of the Work affected by any such termnation;
a. Assess the statu of any Senice still due and presere any Work penormed; an
b. To the extent that they are assignable, assign to Company any and all subcontracts and
equipment rental agreements as designated in wrting by Company.
ARTICLE 33. O\\'NERSHIP OF DESIGNS A."iD WORK PRODUCT
The Partes wil specify Materials to be delivered in the applicable SOW as being ''Type I Materials," "Type
II Materials," "Type Z Materials" (all furter descnbed below), or othervise as mutually
agreed. No SOW
pursuant to which Materials are to be provided shall be effective uness and unti the Materials Type has been
agreed upon and specified in such SOW. IBM or its suppliers retain o'\'Iership of the copyrght in any of
IBM's or its suppliers' works that pre-exist or were developed outside of ths Agreement and any
modifications or enhancements of such works that may be made under ths Agreement. To the extent they are
embedded in any Materials, such works ar licensed in accordance with their seprate licenses provided to
Customer, if any, or otherwise as Type II Materials. Notwithtanding the foregoing, Company hereby grts
Contractor a temporary license to use, reproduce, perform and prepare derivative works from Company's IP,
to the extent that such IF is required to penorm a Service according to ths Contrct during the Service
performnce period as outlined in the Contrct (including any applicable SOW).
Type I Materials are those, created durig the Service penormnce period, in which Company has all right,
title and interest (including ownership of copyrghts). Contractor wíI retain one copy of
the Typ I Materials.
Company hereby grants Contractor; 1) an irevocable, nonexclusive, worldwide, paid-up license to use,
execute, reproduce, display, perfonn distribute (internaly and externally) copies of, and prepar derivative
works based on, Type I Materials; and 2) the right to authorie others to do any of
the former.
Typ II Materials are those, created or provided durng the Service performce period or otherwse
(inCluding materials that preexist the Service), in which Contractor or third-paries have all right, title and
interest (including o'\.nership of copyright). Contractor wil deliver one copy of the specified Type II
Materials to Company. Contractor grants to Company an irrevocable, nonexClusive, worldwide, paid-up
license to use, execute, reproduce, display, perform and distribute, within Company's Enterprise only, copies
of Type II Materials, and hereby confirms that Company has the rights associated with tls grant of such
licenses for third-par Type II Materials which are licensed to Company by Contractor under thi Contrct.
Type Z Materials are those, created durg the Service perfonnnce period, in which Company has all right,
title and interest (including ownership of copyright). No license is granted to Contrctor with respect to Type
Z Materials, except to the extent necessar to provide Softwe Products and Services under the Contrct.
Both Parties are free to enter into sirrlar agreements with others and to develop and provide materials or
services \vhich are sirrlar to those provided under the Contrct.
Each Part agrees to reproduce the copyrght notice and any other legend of ownership on any copies made
under the licensees) grnted under th ARTICLE.
Subject to the above qualifications on o..nership of IP for each material tye, both Pares ar, unless
othenvise agreed to in a SOW, free to use any ideas, concepts, know-how or technques which are developed
jointly during a Project and are not the IP of the other or thrd-parties.
ARTICLE 34. INTELLECTUAL PROPERTY L~DEMNITY
For puroses oftls ARTICLE, the term "Product" means Software Program, Materials and Machine Code.
Claims for which IBM is responsible:
If a thid-par claims that a Product which IBM provides to Customer infringes on that parts patent or
copyrght rights, IBM wil defend and hold Company haress against that claim at IBM's expense and pay
all costs, losses, suits, judgments, expenses, damages, and anomey's fees that a cour finlly awards or that are
included in a senlement approved by IBM, provided that Company:
a. promptly notifies IBM in writing of the claim; and
Page 19 of45
b. allows IBM to control, and cooperates with IBM in, the defense and any related settlement
negotiations.
If such a claim is made or appears likely to be made, Company agrees to pennt IBM to enable Company to
continue to use the Product, or to modify it, or replace it v'lith one that is at least functionally equivalent. If
IBM determines that none of these alternatives is reasonably available, Company agrees to retu the Product
to IBM on IBM's \vritten request. IBM v,rill then give Company a credit equal to:
a. for a Machine, Customer's net book value calculated according to generally-accepted
accounting principles;
b. for a Softare Progrm, the amount paid by Customer. or 12 months' license charges
(whichever is less); and
c. for Materials, the amount Company paid IBM for the creation and delivery of the Materials
Claims for Whch IBM is Not Remonsible
IBM has no obligation regarding any claim based on any of the following:
a. anyting provided by Company or a thrd-par on Corrany's behalf that is incorporated into
a Product or ruM's compliance with any designs, specifications, or intrctions provided by
Company or a third-part on Company's behalf, which Contractor did not specifically approve
in wrting;
b. modification of a Product by Company or a third-par on Company's behalf, or a Softare
Program'suse other than in accordance with its applicable licenses and restrctions;
c. the combination, operation, or use of a Product v.'Íth any product, hardware device, program,
data, apparatus, method, or process that Contrctor did not provide as a system or specify in
wrting which is delivered as part of the Work under this Contract, if the infgement would
not have occurred were it not for such combination, operation or use;
d. the distnbution, operation or use ofa Product outside Company's Enterprise; or
e. inngement by a non-IBM-ov,'Ied Product or an Other Softare Progrm alone.
This ARTICLE concerning protection of the Partes' IP and indemnfication therefore states IBM's enti
obligation and Company's exclusive remedy regarding third-pary claims involving IP under this Contrct
except to the extent such IP claims are brought, fied or asserted in any way with other claims not involving
IP. Such collateral claims not involving IP shall be resolved according to any and all the legal and equitable
remedies granted in ths Contract.
ARTICLE 35. EQUAL EMPLOYMENT OPPORTIll\"1TY AND OTHER NONDISCRIATION
CLAUSES
Contrctor shall at all times comply with all Applicable Laws governing wages, hours, desegregation,
employment discrimination, employment of minors, health, and safety. Contrctor shall comply with equal
opportnity laws and regulations to the extent that they are applicable.
ARTICLE 36. CONFIDENTIAL INFOR,l\1ATION I NOl\1)ISCLOSURE
Confdentially and Non-disclosure shall be in accordance with the current Confidentiality Agreement
between the Parties effective September 11, 2008.
ARTICLE 37. RELEASE OF L'\FORl\IATION - ADVERTISING Ai'iD PROMOTION
Neither the names of Company, nor the Work Site shall be used in any advertsing or other promotional
context by Contractor without the express prior wrtten consent of Company.
ARTICLE 38. NON-ASSIGNMENT
Contractor shall Dot assign this Contract, or any part hereof, or any rights or responsibilties hereunder without
the prior written consent of Company, and any attempted assignment in violation hereof shall be void.
Page 20 of45
NotVvithstanding this provision, Contractor shall be entitled to assign its right to payment without the consent
of Company.
Company may assign its rights under this Contrct, without Contractor's prior wrtten consent, to any affiiate
withn its Enterprise. Customer may not otherwise assign its rights without Contractor's prior wrtten consent,
such consent not to be urreasonably withheld or delayed.
ARTICLE39. SUBCONTRCTS
Contractor shall neither subcontract nor permt any porton of the Wotk to be subcontrcted without the prior
v.'Itten consent of Company; and Contractor shall be fully responsible for the acts or omissions of any
Subcontractors of any tier and of all persons employed by them and neither the consent by Company, nor
anything contained herein shall be deemed to create any contractual relation between the sub-Contrctors of
any tier and Company.
ARTICLE 40. NONWAIVER
The failure of either Part to insist upon or enforce strict pedonnnce by the other of any of .me term of the
Contrctor to exercise any rights herein shall not be constred as a waiver or relinquishment to any extent of
mat par's right to assert or rely upon such term or rights on any future occasion.
ARTICLE 41. SEVERAILITY
Any provisions of this Contrct prohibited or rendered unenforceable by law shall be ineffective only to the
extent of such prohibition or uneiiorceabilty without invalidating the remaining provisions of this Contract.
ARTICLE 42. FORCE MAJEtJRE
Neither Par shall be liable for delays due to stre (except for stres by Contrctor's own workforce or
Subcontractors), fire, riots, acts of God, acts of the public enemy, or other similar unforeseeable cause beyond
the control and 'Without me fault or negligence of the Par incurng such delay; however, both Parties agree
to seek to rrrigate the potential impact of any such delay. Any Force Majeure delay shall not be me basis for a
request for additional compensation. In the event of any such delay, me required completion date may be
extended for a reasonable period not exceeding the time actually lost by reason of the delay, unless Company
provides consent otherwse in \\'rring.
Company-Caused Delav. Should Company cause a delay in Contrctor's perfonnnce, this Contract may be
modified according to ARTICLE 19, CHANGES.
Request for Time Extension. Any request for time extension, scheduling chages, additional compensation,
or other changes to the Services to be provided under an applicable SOW shall be made in accordance with
the provisions set forth in ARTICLE 19, CHAGES.
ARTICLE 43. APPLICABLE LAW .4.isD VEì\TUE
TIs Contract shall be governed by and constned in accordance with the laws of the State of Oregon. Any
litigation between the partes arising out of or relating to ths Contrct wil be conducted exclusively in federal
or state cour in the State of Oregon, and Contractor consents to jursdiction by such cour.
ARTICLE 44. ENTIRE AGREEMENTIDOCUMENTS INCORPORATED BY REFERENCE
.This Contract and all Contract Documents (incorporated herein by references throughout ths Contract)
constitute the complete agreement between the Paries. All understandings, representations. warties,
agreements and any referenced attchments, if any, existing between the Parties regarding the subject matter
hereof are merged into and superseded by ths Contrct, which fully and completely expresses the agreement
of the Parties with respect to the subject matter hereof.
Neither Company nor Contractor assumes any responsíbìlty for any understanding or representation made by
any of its employees, offcers, or agents during or prior to the negotiations and execution of ths Contrct,
uness such understanding or representation is expressly stated in the Contract
The Parties intend that the terms and conditions of the Contract should be complementary with each other;
however, in the event of a conflict between the term and conditions of any SOW and those of the Contrct or
Page 21 of45
other Contract Documents, the teim and conditions of the relevant SOW shall gover.
ARTICLE 45. EXECUTION Al\T) EFFECTI DATE
This Contrct has been executed by duly authoried representatives of the Pares and shall be
effective as of date of execution by the Company.
CONTRACTOR:
By:
(Signature)
Name: lJôo H S. fY1ASp.J2A CLHJ A Name:
(Type or Print)
Title::frl\ Q..LIE-tJl r¿XECJ.~~ Jli c!'g
(Date Executed)
Title:$V P cfdletA!J1in t øfcu
9-/¿'-;íOOg'
(Date Executed)
Page 22 of45
EXHIBIT A
Statement of'Vork -Number ONE (1)
(CAHD-7G7QFD)
for
l\1igration of SAP R/3 and BI Systems from Oracle to DB2 LUW
for PacifiCorp
The parties to the is Statement of Work herein made apart of the Contrct dated Septembe/i, 2008
Between PACIFICORP ("Company") and INTER.l\ATIONAL BUSINSS MACHINS
("Contractor"), together ("the Parties") for Services described herein
1. Statement of Work
Ths Statement of Work ("SOW") defines the pedormnce and schedule of tasks to be accomplished
by Contrctor under the terms and conditions of the IBM / PacifiCorp Contract No.1$ØX f/t
, Effective See* /4 z.,f 8" ("Contract"). Ths Contract is par of and has been referenced and
incorporated into said sow.
Ths SOW includes the following subsections:
. Scope of Services
. Key Assumptions
. Contractor Responsibilties
. Company Responsibilties
. Completion Criteria
. Estimated Schedule
. Deliverable Materials
. Other Term and Conditions
Changes to ths SOW wil be processed in accordace ~'Ìth Appendi E, "Project Change
Procedures".
The following are incorporated in and made part of this Scope of Work, by ths reference:
. Appendix A, "PacifiCorp Metrcs"
. Appendix B, "Deliverable Material Guidelies"
. Appendix C, "Deliverable Material Acceptance Process"
. Appendix D, "Pricing Schedule"
. Appendix E, "Project Change Procedures"
. Appendi F, "Escalation Procedue"
2. Scope of Services
The objective of this Project is to manage solution delivery for IBM hardwae, softre, and
services. The scope of the project is to:
. Provide Project Management for Hardware Installation, Database intallation, Conversion,
and Go-Live.
. Provide IBM AIXSystem p Implementation Services to assist Company with the
implementation of the System p servers. (Installation of hardware is not included.)
. Create the design for hardware confguation and viralization.
Page 23 of45
. Configure, and implement the operating system, System p POWER virtliztion ("VIO"),
logical partitions, hypervisor and all software components for included hardware.
. Design and implement DB2 Back-up and Recovery and Disaster Recovery processes.
. Migrate SAP R/3 and Bl systems from Oracle to DB2 LUW as spcified in IBM
Responsibilities (below). Installation and configuration ofDB2 and SAP for each system, as
required, is included. Deep compression wil be enabled on the R/3 ERP Production and
Development systems, and the BI Production and Development systems.
. Assist Company with preparation for testing the migrated SAP systems.
. Perform the system cutovers for each SAP R/3 and BI environmt.
Landscapes/environments included are:
. SAP R/3 source landscape:
o R/3 ERP Production system (PRD)
o R/3 ERP Test system (QAS)
o R/3 ERP Unit Test systei (UTS)
o R/3 ERP Development system (DEV)
. SAP R/3 Sandbox Systems PS02 and PS02T
. SAP BI source landscape:
o BI Production system (BWP)
o BI Test system (BWQ)
o BI Development system (BWD)
The Project Scope is based on the memcs documented in Appendix A, received from Company in
June, 2008.
3. Key Assumptions
Ths SOW and IBM's estimates to perorm are based on the following key assumptions. Deviations
that anse during the proposed Project will be managed through the procedure descnòed in Appendi
E, "Project Change Procedures",
1. This SOW addresses servers located at the Company location(s) at 825 NE Multnomah Suite
800 Portland, OR 97232-2190 and the servers located at the Company location(s) at 1407 West
Nort Temple, Salt Lake City, UT 84115.
2. Contractor ,,,m assign a project manager to oversee the migration project. Contrctor will work
closely with Company's assigned Project Manager to ensure miimal impact to Company's
business operations.
3. Company wil make required resources and informtion (personnel, materials, etc) available for
Project implementation per the project plan and as needed to support IBM.
4. Company wil coordinate though its Project Manager all resources requied for aU phases of
testing (pre and post migration).
5. The Parties agree that design and implementation of Multi-Dìmensional Clusterg (MD)
imlementation is not within the scope of this Project.
6. Not all Work wil be performd on the Work Site. Work related to production system test
migrations and migration of iest and development systems wil be pedormed remotely, keeping
travel and living costs to a mimum. (Production system cutovers are executed with the SAP-
certfied IBM migration team lead on~site and actively engaged through the cutover process.)
7. Company's project manager will ensure that Contractor has VPN or other suitable network
access for SAP migration activities associated with this Project.
8. Company and Contractor wil adhere to SAP-prescribed standards and procedures where
applicable.
Page 24 of45
9. Company's project manager wil coordinate with the Contractor and Company teams to ensure
adequate hardware is available for this effort. Systems larger than4TB in table data size require
additional plannng and consideration. and cannot be migrated in-place.
10. Company wil accept or advise of deficiencies for each deliverable matenal or milestone
submission withn 5 business days. Ifneither is received within 5 business days, the deliverable
material or milestone is considered accepted by default.
i 1. No tJNICODE data conversion is being perormed.
4. Contractor Responsibilties
The specific Services to be provided by Contractor to Company ar descnbed as follows:
4.1 Contractor General Responsibilties
1. Contractor wil provide Services under th SOW durng norml business hour, 8:00 a.m. to
5:00 p.rn (local time) Monday though Friday, except Contractor holidays, unless otherwse
mutually agreed upon.
2. Contractor staffs projects on a national basis with either local or non-local resources based
upon resource availability at project initiation. At the sta of a project and on an ongoing
basis, our project managers shall work together to mutually determe any onsite requirements .
of non-local perorm resources. For long term engagements, the tyical 40 hour work week of
full time non-local resources normlly consists of the resource trveling to Company's Work
Site on Monday, retuing to their home city at the end of the workday on Thursday and
performg Project related activities remotely on Friday, as applicable. Durng weeks with a
national Holiday or durg periods when a resource is not required to be on the Work Site full
time, both Partes vÆl work together to define an alternate full time work schedule. Such
alternate work schedule may include the resource performng Project-related activities
remotely.
3. Some Contractor activities in this Project may be performed on Contractor premises.
4. Some of the Services may be performed by an IBM subcontractor. If an IBM subcontractor
assists with the project, Contrctor is solely responsible for completion of the work described
herein and compliance with the term hereof and coordintig any involvement of Contractor
subcontractors who may be engaged to assist Contractor in accomplishig the work described
herein. When Contractor activities for this Project are to be performeà on Company premises,
Contractor wil supply the names of personnel assigned to the Company project manager three
(3) weeks prior to Contractor personnel arvig at the Company work site.
4.2 Contractor Migration Responsibilties
Contractor w:i deliver a Production Cutover Plan template for each landscape and system in scope
(as appropnate) prior to the begining of the engagement. IBM's techncal team lead wil coordinate
with Company's project manager to incorporate all required tasks into the fmal project plan.
4.2.1 Software Installation and Configuration
In this activity, Contractor will prepare the nie (9) virtalized Company-designated taget serers
for the SAP landscape migrations.
1. Contrctor will provide up to one hundred (100) hour ofSenrices to build Company's System p
infrstructure, to include up to four (4) IBM p570 Sen/ers. Tasks to support th activity are:
a. Conduct a planning session for the System p advanced POWER virtliztion;
b. Configure, install and micro partition in the IBM System p Server into Virtal I/O ("VIa"),
AI or Linux partitions, for a total of up to ten paritions per IBM p570 server;
c. Configure logical volumes, fie systems and TCP/IP connectivity for the newly created
parttions on each server;
Page 25 of45
d. Assist Company to upgrade existing HMC(s) to V7, if needed;
e. Configure a single Network Installation Manager (called "N1M") server;
f. Other eligible IBM Services as directed by PacifiCorp and agreed to by Company and
Contractor before deployment of Contrctor resources;
g. Provide basic skills instrction for up to two of Company's designated operations staff on
tasks performd herein.
2. Contractor wil install and configue DB2 and SAP on each server.
3. Contractor wil prepare a Software Installation and Configuration Report summriing
installation and confguration activities for the seven Company-designated target servers.
Completion Criteria
This task shall be considered complete when Company formally accepts, in wrtig or via electronic
mail, the Software Installation and Confguration Reprt in accordance with the process defined in
Appendix C, "Deliverable Material Acceptance Process".
Materials
1) Software Installation and Confguration Reprt
4.2.2 RJ3 Landscape Migration Process
The Services for this task include:
1. RJ3 Migration Design and Plannng
a. Assist Company with scanning the production system for non-SAP-compliant code,
using SAP-recommended methodology and tools. Non-SAP-compliant code v.-ll be
promptly identified to Company for resolution. SAP or IBM scannng tools win be
leveraged for the production system scan.
a. Jointly develop, with the Company project manager, the initial project plan and
Production Cutover Plan for the R/3 systems.
b. Assist Company.designated personnel 'With development of an implementation plan for
high-availability disaster recovery (DB2 HAR) processes for SAP RJ3 production
server.
c. Perform a systems review and develop and finalize the migrtion strtegy with the
assistance of designated Company Subject Matter Expert (SMEs).
d. After completion of the migrtion strategy planning process, make initial revisions to
the Production Cutover Plan.
2. RJ3 Production Svstem (PRD) Migrtion Testig
a. Perform one or more test migrations from a copy ofPRD to the target serer confgured
with DB2, which includes:
a. Execute the export and import process and post processing steps.
b. Revise the Production Cutover Plan from the template as required.
c. Verify the target DB2 production system configuation and environmnt, and
make appropriate reconnendations, if any, regarding the target system
confgurtion.
d. Finalize the production system cutover plan and refine the estiated
production system cutover dO\vntime requirement.
e. Repeat the above testing process as necessar to address Company's cutover
requirements.
b. Implement and test the DB2 Backup and Recovery process and HAR failover.
Page 26 of45
3. R/3 Development System (DEV) Migrtion
a. Verify the taget DB2 development system configuration and environment for the DEV
migration, and make appropriate recommendations, if any, regarding the target system
confgurtion.
b. Execute the export and import process and post processing steps.
c. Assist with a test of the badnip and restore process and system clone procedur.
d. Perform remediation for identified problems related to DB2 and the migrtion, if any.
4. Migration and Cutover of the RJ3 Production System (PRD)
a. Execute the optied export and import process and post-processing steps as defined
in the project plan.
b. Verify target production system configuration and make appropriate recommendations,
if any, for changes to the target production system confguation.
c. Perform post go-live support steps and defect resolution for any identified issues related
to DB2 and the migrtion.
d. Contrctor will work with Company to jointly define methodologies, which wil
become part of the project plan, to determe the pre-upgrde response time of
Company's present SAP RJ3 production trnsactions. Considerig Contretoris
providing only a portion of the hardware supportg the targeted solution, Contrctor
wil achieve a production R/3 response time tht is a response tie of eight-tenths of a
second (0.8 seconds) average or the existing system's average production R/J SAP
transaction response defined above over a th (30) day period with up to eight-
hundred (800) concurent users. Ths response time will be measured using SAP
trnsaction response time report. The foregoing does not apply to the extent tht
failure to meet perfonnnce metrcs is a result of any reason beyond IBM's control.
5. RJ3 Test (QAS and UTS) Systems Refresh
a. Assist Company personnel with the database copy ("clone") procedure to build a new
copy ofQAS and a new copy ofUTS using the migrated production system as the
source system
6. Documentation ofRJ3 Landscape Migrtion Acti"ities
a. Contractor wil prepare an R/3 Landscape Migration Report describing the overall
migration process, issues encountered and remediation applied, and details regarding
the implementation of SAP recommended steps as published in the SAP Go-Live
Report.
7. Post-Cutover Defect Resolution SU12rt
a. IBM migration team wil provide defect resolution support for any RJ3 landscape post*
migration issues caused by the migration to DB2 for up to 30 calendar days from the
date of the R/3 Production System cutover. After 30 calendar days, Company will use
the designated IBM support process for all support issues.
Completion Criteria
Ths task shall be considered complete when Company fonnlly accepts, in 'writig or via electronic
mail, the R/3 Landscape Migration Summry Report in accordance 'with the process defmed in
Appendix C, "Deliverable Material Acceptance Process".
Materials
1) R/3 Landscape Migration Sumry Report
4.2.3 R/3 Functional Test Sen'ers Implementation
The Services for this tak include:
1. Copy either the migrated R/3 PRD or R/3 QAS system data as specified by Company, to the
PS02 and PS02T servers.
. 2. Document the activities performed in this step, including the system copy procedure, in the R/3
Functional Test Servers Implementation Report. The Report ",in enumerate the system copy
Page 27 of45
procedure (to enable Company personnel to repeat the process as needed), any issues
encountered and their remediation.
Completion Criteria
Ths task shall be considered complete when Company formally accepts (in writing or via electroníc
mail) the R/3 Functional Test Server Implementation Report in accordance v,rth the process defined
in Appendix C, "Deliverable Material Acceptance Process".
Materials
1) R/3 Functional Test Servers Implementation Report
4.2.4 SAP BI Landscape Migration Process
The Services for ths task include:
1. BI Migration Preparation
a. Assist Company with scanning the production system for non-SAP-compliant code,
using SAP-recommended methodology and tools. Non-SAP-compliant code will be
promptly identified to Company for resolution. SAP or IBM scanng tools wil be
leveraged for the production system scan.
b. Jointly develop, with the Company project manager, the initial project plan and
Production Cutover Plan.
c. Penorm a systems review and develop and finalize the migrtion strategy with the
assistace of designated Company Subject Matter Experts (SMEs).
d. After completion of the migration strategy planing process, make initial revisions to
the Production Cutover Plan.
2. BI production System (BWP) Migration Testing
a. Penorm one or more test migrations from a copy of BWP to the target server
configured with DB2, which includes:
1. Execute the export and import process and post processing steps.
2. Revise the Production Cutover Plan from the template as required.
3. Verify the taget DB2 production system confgurtion and environment, and
make appropriate recommendations, if any, regarding the taget system
configuration.
4. Finaliz the production system cutover plan and refme the estiated
production system cutover downtime requirement.
5. Repeat the above testing process as necessary to address Company's cutover
requirements.
3. BI Development System (BWD) Migration
a. Venfy the target DB2 development system configution and envionment for the
BWD migration, and make appropriate recommendations, if any, regarding the taget
system confguration.
b. Execute the export and import process and post processing steps.
c. Assist with a test of the backup and restore process and system clone procedure.
d. Perfonn remediation for identified problems related to DB2 and the migration, if any.
4. Migration and Cutover of the BI Production System (BWP)
a. Execute the optinued export and import process and post-processing steps as defined
in the project plan.
b. VeritY target system confguation and make appropriate recommendations, if any, for
changes to the target system confguration.
c. Penorm post go-live support steps and defect resolution for any identified issues related
to DBl and the migrtion.
Page 28 of45
5. BI Test CBWQ) System Refresh
a. Assist Customer's personnel v.;th the database copy ("clone") procedur to build a new
copy ofBWQ using the nngrated production system as the source system.
6. Documentation of the BI Landscape Migration
a. Contractor wil prepare a BI Landscape Migration Report describing the overall
migration process, issues encountered and remediation applied, and details regarding
the implementation of SAP recommended steps as published in the SAP Go-Live
Report.
7. Post-Cutover Defect Resolution Support
b. IBM nngration team vlin provide defect resolution support for any post-nngration
issues caused by the nngrtion to DB2 for up to 30 calendar days from the date of the
BI Production System cutover. After 30 calenda days, Company wil use the
designated Contrctor support process for all support issues.
Completion Criteria
This task shall be considered complete when Company formally accepts (in wrtùg or via electronic
mail) the BI Landscape Migration Summary Report in accordance with the process defined in
Appendix C, "Deliverable Material Acceptance Process".
Materials
1) BI Landscape Migration Summar Report
4.2.5 SAP Migration Project Completion
The purose of this task is to formalize acceptance of the migrated solutions and pennt the release of
remaining funds held by Retainage.
After Customer Acceptance of the R/3 Landscape Migration Summary Report or BI Landscape
Migration Summary Report (whìchever is accepted last), Contractor \vill subnnt a Certificate of
Project Completion.
Completion Criteria
This task shall be considered complete when Company's project sponsor accepts, in \\TÌting or via
electronic mail, the Certificate of Project Completion, in accordance with the process derined in
Appendix C, "Deliverable Matenal Acceptance Process" and Contractor attins the performance
goals documented in Section 4.2.2 ítem 4d.
Materials
1) Certificate of Project Completion
4.3 Project Management Responsibilties
Contractor \\'i11 provide an individual ("IBM Project Manager") to provide direction and control of
Contractor project personnel, and to establish a framework for project communications, reporting,
procedural and contractual activity. The major sub tasks are:
1. Review ths SOW, and any associated documents, with the Company Project Manager.
2. Coordinate and manage the activities of Contractor project personnel.
3. Maintain Project communications though the Company Project Manger.
4. Establish documentation and procedurl standards for the development of ths Project.
5. . Prepare a Project plan at the onset ofthís Project for performnce of ths SOW. The Project plan
wil define tasks, schedule and responsible person(s) or organition(s) for each Milestone.
6. Conduct project statu meetings.
7. Prepare and submit monthy Status Report.
Page 29 of45
8. Review and administer the Project Change control procedure with the Company Project
Manager.
Completion Criteria
This is an ongoing activity which w:i be considered complete at the end ofthe Services. The Project
Plan 'wil be a "living document" updated during the coure ofthe project by Contractor and
Company project managers.
Materials
a. Monthly Statu Report
5. Company Responsibilties
The responsibilties listed in this section are in addition to those responsibilities specified in the
Contract, and are to be provided at no charge to IBM. IBM's performnce is predicated upon the
following responsibilties being fulfilled by Company as scheduled in the Project plan. Delays in
performance of these responsibilities or suspension of the Servces by Company may result iri
additional charges and/or delay of the completion of the project, and will be handled in accordace
with Appendix E, "Project Chge Procedures".
5.1.1 Company General Responsibilties
1. Ensure appropriate staff is available to provide such assistance as Contrctor reasonably requies
and that Contrctor is given reasonable access to Company's senior management, as well as any
members of Company's staff to enable Contractor to provide Servces. Company will ensure tht
their staff has the appropriate skils and experience to perform Company's responsibilties under
ths Statement of Work. If any of the Company staff fails to perform as required, Company wil
make suitable additional or alternative staff available.
2. Provide suitable offce space, supplies, furniture, high speed connectivity to the Internet, and
other facilities for IBM's personnel while working on your premises.
3. Provide security clearance and building access for Contractor project personneL. Most of the
work involved in this project v¡il be performed during norml working hour (8:00am to
5:00pm). However, on some occasions, Company may need to provide access to facilties
outside of these hours.
4. Be responsible for the content of any database, the selection and implementation of controls on
its access and use, backup and recovery and the securty of the stored data. Ths secuty will
also include any procedures necessar to safeguard the integrity and securty of softare and
data used in the Services from access by unauthoried personneL.
5. Be responsible for the identification and interpretation of any applicable laws, regulations, and
statutes that affect your existing application systems or progr that Contrctor wil have
access to during the Services. It is Company's responsibility to assure tht the systems and
programs meet the requirements of those laws, regulations and statutes.
6. Authoriz IBM Corporation and its subsidiaries (and their successors and assigns, contractors
and IBM Business Parers) to store and use your business contact informtion wherever they do
business, in connection with Contractor products and Services or in fuerance of IBM's
business relationship with Company, except as limited in the master Contract
7. Make final selection of solution and techncal arcmtectues.
5.1.2 Company Project Manager
Prior to the star of the Project described under this SOW, Company wil designate a person, called
the Company Project Manager, to whom Contrctor communications will be addressed and who ha
the authority to act for Company in all matters regarding this SOW.
Page 30 of45
The Company Project Manager will:
1. Assist the Contrctor Project Manager with development of the project plan for the
perfonnnce of this SOW prior to implementation. Ths includes project activities, tasks,
assignments, and estimates.
2. Serve as the interface between Contractor and all Company departents, organizations and
sites parcipating in this project.
3. Administer the Project Change Control Procedure vi'Ìth the Contrctor Project Manager.
4. Partcipate in project status meetigs.
5. Obtain and provide infonntion, data, decisions and approvals, within two (2) working days
of IBM's request, unless both Contractor and Company agree to an extended response time.
6. Help resolve Project issues and escalate issues within the Company organiztion, as
necessary.
5.1.3 Company Migration Responsibilties
The overall project structue and effort estimate is based on a core.scope approach tht has specific
responsibilities which must be maaged by the Company Project Manager with assistace from the
Contrctor project manager, as needed.
Company will:
1. Make a separate target system ("migrtion target system") available for the SAP migration, including
preparation, installation of SAP on DB2, and testig.
2. Prepare each migration taget system to sta the SAP and database intallation consistent with the
schedule set forth in the project plan. Ths includes:
a. Ensuring the target systems are comiected to the LAN.
b. Ensuring storage needed for the migration is available, comiected, and accessible from the
target machie.
c. Preparing, jointly with IBM, the fie system layout for the migrtion target system based on
the existing migrtion source system. for fie systems other than database fie systems.
Database fie systems wil be prepared based on IBM's recommendations.
d. Ensuring the migration source and target systems are accessible via the LAN and that
remote access is available to IBM's SAP migration specialists. Root access (effective using
sudo) to target and source systems is necessary for Contrctor to provide services.
e. Ensuring there is enough disk space on the migration source system to expon the source
database (approximately 15% of the net source database siz).
3. Have the Kernel installation CDs or installation images for the curent SAP release and the DB2
. installation CDs or installation images for the taget operating system available, including the latest
SAP-cenified DB2 Fixpacks.
4. Ensure the DB2 Database License Keys are available (these can be obtained from the SAP Service
Marketplace).
S. Generate the required SAP license and migration keys for the taget DB2 based system.
6. Be responsible for SAP migration activities that require execution by Company's staff in accordance
'With SAP guidelines and published notes. Company agrees that Contractor is neither responsible nor
liable if any of the SAP migration activities performed by Company persomiel should result in failure
due to non-adherence to SAP instrctions. In such cases, Company is responsible to engage SAP for
support.
7. Verify compatibility of third-part software with DB2. Examples include certin tax-ware product
and database-specific monitoring tools. Company also agrees to be responsible for resolving
Page 31 of45
database compatibility or performnce issues with the third-parr softare vendor (if appropriate), or
replace incompatible softare as required.
8. Be responsible for testing of all migrted systems.
9. Be responsible for modifying any custom ABAP code or externl interfaces tht are not database
independent per SAP standards.
10. Provide Contractor VPN or other suitable remote network access for SAP migrtion activities
associated with ths Project.
6. Completion Criteria
Contractor ,,,il have fulfilled its obligations for the Servces under this SOW when one of the
following first occurs:
. Contractor accomplishes the Contractor activities descnbed in Section 4 Contractor
Responsibilities, including delivery to Company of the Materials described in Secton 8
Deliverable Materials, if any;
. You or Contractor termates the project in accordance with the provisions of the
Contract. Provided, however, neither Par may tennate this SOW without cause.
The Warranty Period for the Services provided under this SOW shall end upon Company's acceptace of
the Deliverable Materials in accordance with the Deliverable Materials Acceptance Process in Appendi
C.
7. Estimated Schedule
The start date, to be determed by both Partes, is curently estimated to be October 1, 2008 ("Start
Date"), and the estimated end date is estimated to be March 31, 2009 ("End Date"), or on other dates as
mutually agreed in ""Titing by the Pares.
If the SOW is executed on a date after the above Star Date, that Sta Date shall automatically be
extended to be the first business day following the day the last signature is affxed to this SOW. The End
Date shall automatically be extended by the same number of days.
Reasonable effort shall be made to keep the schedule dates intact.
8. Deliverable Materials
The Deliverable Materials, identified as Type II Materials, resulting from these Services are:
. Monthy Status Report*
. All Materials identied in secton 4.
* = Deliverable Material exempt from the Deliverable Material Acceptance Process
See Appendix B, "Deliverable Material Guidelines," for a description of each Deliverable MateraL.
See Appendix C, "Deliverable Material Acceptance Process," for the Material acceptance process.
9. Data File Content and Security
You are solely responsible for the acnil content of any data fie, selection and implementation of
controls on its access and use, and securty of the stored data. .
10. Other Terms and Conditions
At the completion of the Project Contractor may cite Company's name and the general natue oftbe
Services we perfonned for Company to its other customers, and prospective customers, as an
indication of client satisfaction, with prior ",Tinen consent by Company. In entering into this SOW,
Company is not relying upon any representation made by or on behalf of Contractor that is not
specified in the Contrct, including, without limitation, the actual or estiated completion date,
number of hours to provide any of the Services, charges paid, or the results of any of the Servces to
be provided under this SOW.
Each Part agrees that the complete Contract between them regarding the Contractor's performnce,
Page 32 of45
Materials and Services consists of 1) this SOW, 2) the master Contract and 3) all the other Contract
Documents, as mutually agreed.
Required Consents
Company is responsible for promptly obtaining and providing to Contractor all required consents
(the "Required Consent") necessary for Contractor to provide the Serices descn"bd in this SOW. A
Required Consent means any consents or approvals required from the owners of the hardware,
software, firmware and other products Company may use, to give Contrctor and its subcontrctors
the right or license to access, use and/or modifY (including creatig dervative works) those
hardware, software, firmware and other products, without infrging the o\vnership or license rights
(including patent and copyright) of the providers or owners of such products. Contrctor will be
relieved of its obligations that are adversely affected by Company's failure to promptly obtain such
licenses or approvals. Company agrees to reimburse Contractor for any reasonable and direct costs
and other amounts that Contractor may incur from Company's failure to obtain the Required
Consents, including any reasonable and direct costs and amounts arising from claims asserted by
thd paries \"A/ith respect to such failure to obtain a required consent. Contractor agrees to assist
Company in identifying which Required Consents are necessar, and, to the extent possible, to assist
Company in obtaining the Required Consents.
Each par agrees that the complete agreement, which replaces any prior oral or written
communications between us regarding this transaction, consists of 1) the Statement of Work, its
Appendices, and 2) the Contract.
Agreed to:Agreed to:
PacifiCorp International Business Machines Corporation
Armonk, New York 10504Portland, Oregon 97323
BY'~~~
Name be or pnnt): fJ/l r-e8n s:ti1? an
/BÝ.Iy~J¡1r~~
Authorized signa re
Date:SdÆ /G, 2.Cog/. I
Name (tye or print): ~H $. fYA.tAc.ll4
.Ji Ib, Q;Date:
Page 33 of45
CIt....i...~:t
Q.i.QUi....t.
C\~...-(
;i
:a=~Q.
~
on-:
'õ-:r':Po
~
~~~~i.
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.S:
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*
Appendix B: Deliverable Material Guidelines
B-1: Monthly Status Report
Purpose:
IBM wil provide a Monthy Status Report durig the Project to describe the activities which took place durg
that period. Significant accomplishments, Milestones, and problems ".'ll be descrbed.
Content:
The report wil consist of the following, as appropriate:
. Activities performed durng the reportg period
. Activities planned for the next reportg period
. Project change control activity
. Problems, concers, and recommendations
Delivery:
bne hard copy wìl be delivered to the PacifiCorp Project Manager v.ithin five (5) working days following the
reportng period,
B-2: Software Installation and Configuration Report
Purpose:
To provide the Customer with a wrtten summar of software installation and configuration activities performed
by IBM.
Content:
Ths document wil contain:
1. A summy of softare installation activities;
2. A summary of any special configuration settings made durig the installation and configuation of
DB2 or SAP for each server; and
3. An installation record for each IBM p570 server.
Delivery:
IBM wil deliver one (1) copy of the Softare Installation and Confguration Report in softcopy fonnt.
B-3: RI Landscape Migration Summary Report
Purpose:
To provide the Customer with a written sumary of the R/3 Landscape Migration performed by IBM.
Content:
This document wil contain:
1. Results from production system test migration execution including techncal inonntion obtained
from the production system test migration.
2. A summar of how the techncal information from the production system test migrations were
applied to the Production System Cutover Plan.
3. A revìew of the implementation of SAP's recorrended actions as provided by SAP in the SAP Go~
Live Report.
4. A summ of the Development System Migrtion and any significant issues encountered.
5. A summary of the results obtained when the migrated SAP solution was copied to the QAS system.
6. Any technical challenges or unusual risks that occurred during the R/3 Landscape Migration and
remediation or risk mitigation activities performd.Delivery: .
IBM wil deliver one (1) copy of the R/3 Landscape Migration Summry Report in softcopy fonnt.
Page 35 of45
B - 4: R/3 Functional Test Servers Implementation Report
Purpose:
To provide the Customer with a \\Titten summary of the RJ3 Functional Test Servers implementation and general
instrctions for copying data from the Customer's selected source system to its R/3 Functional Test Servers.
Content:
Ths documnt wil contain:
i. A sum of the implementation activities for the PacifiCorp PS02 and PS02T systems, and any
significant issues encountered.
2. A sum of any remediation penormed by IBM to address any issues with the system copy process.
3. General directions for cloning a chosen SAP source system to PS02 and PS02T.
Delivery:
IBM wil deliver one (1) copy of the RJ3 Functional Test Servers Implementation Report in softcopy formt.
B - 5: BI Landscape Migration Summary Report
Purpose:
To provide the Customer with a 'written report of the BI Landscape Migration penormed by IBM.
Content:
1. Results from production system test migrtion execution including techncal inormtion obtained
from the production system test migrtion.
2. A sumar of how the technical inormtion from the production system test migrtion(s) was
applied to the Production System Cutover Plan.
3. A report on the implementation of SAP's recommended actions as provided by SAP in the SAP Go-
Live Report.
4. A summary of the Development System Migration and any significant issues encountered.
5.. A summary of the results obtained when the migrated SAP solution was copied to the BWQ system.
6. Any techncal challenges or unusual nsks that occured durg the BI Landscape Migrtion and
remediation or risk mitigation activities penormed.
Delivery:
IBM wil deliver one (1) copy of the BI Landscape Migration Report in softcopy formt.
B - 6: Certifcate of Project Completion
Purpose:
This document will serve to certfy that IBM has. successfully accomplished those tasks delineated in 4.2 IBM
Migration Responsibilties, and to document PacifiCorp's acceptance of the migrted solution.
Content:
A single page document ("Certificate") stating
a) PacifCorp and IBM agree that the tasks assigned IBM under ths Statement of Work as defined in
4.2 IBM Migration Responsibilties have been satisfactonly completed.
b) PacifiCorp has accepted the migrated solution.
Ths document .."il include signature areas for the PacifiCorp project sponsor and the IBM project manager.
Delivery:
IBM Vvill deliver one (1) copy of the Certificate of Project Completion in hardcopy formt.
Page36of45
Appendix C: Deliverable Material Acceptance Process
Each Deliverable Material as defined in Appendix B: Deliverable Materials Guidelines wil be reviewed and
accepted in accordance with the follov.'Íng procedure:
One (1) printed draft or softcopy of the Deliverable Material wil be submitted to the PacifiCorp Project
Manager. It is the PacifiCorp Project Manager's responsibility to make and distrbute additional copies to
any other reviewers.
Within five (5) business days of receipt, the PacifiCorp Project Manager will either accept the
Deliverable Material or provide the IBM Project Manager a written list of requested revisions. If the IBM
Project Manager receives no written response from the PacifiCorp Project Manager withn five (5)
business days, then the Deliverable Material will be deeme accepted.
The IBM Project Manager \\'Íll consider PacìfiCorp's request for revisions, if any, with the context of
IBM's obligations as stated in Appendix B - Deliverable Materials Guidelines.
. Those PacifiCorp revisions agreed to by IBM wil be made and the Deliverable Materal will be
resubmitted to the PacifiCorp Project Manager, at which time the Deliverable Material win be deemed
accepted.
. Those PacifCorp revisions not agreed to by IBM will be managed in accordance with Appendi E,
"Project Change Procedures".
Page 37 of45
Appendix D: Pricing Schedule
This Pricing Schedule contains all of the final, mutually agreed pricing for the services to be delivered as descnbed
herein and in accordance with the related SOW.
PRICING
The professional services to fully implement products into a fully fuctional and operatig system and described
and specified in the SOW shall be provided for a fixed price of: $523,606.16.
P A Yl:1ENTS
i. Payments for implementation services shan be made based on the follo'\'Íngprogress milestones. Payment is
due per the Contrct
2. Invoices shall be submittd and Payments made at the milestones listed below:
"~ ;( - c; ",-, Milestone ~ ~
" ~lilêSoneYalu!"~ rJRetainage Amount~-, ~ ,-
Y',,,,t Due,~,,,
"-"Kc '~'" '"' ,,,",
Software Installation and $74,860.62 $14,972.13 $59,888.49
Confi2uration
R/3 Landscape Mi2ration $199,442.46 $39,888.49 $ 159,553.97
R/3 Functional Test Servers $24,930.31 $4,986.06 $19,944.25
Implementation
BI Landscape Mi2ration $224,372.77 $44,874.55 $179,498.22
SAP Mi2ration Project Completion Total Retainaee:$ 104,721.23
i Total Fees:$523,606.16
3. PacifiCorp shan retain and withhold payment of Twenty percent (20%) of al payments to be made to
Contrctor under this SOW (the "Retainage") other than the final payment of the Contract Price. Such
amount shall be held by PacifiCorp and any interest thereon shall accrue for the account ofPacifiCorp and not
Contractor. Immediately followig acceptance of the final deliverable specified in the SOW, PacifiCorp shal
pay the retained amounts to Contractor, less an amount equal to $5,775 per day for each calendar day of delay
beyond the scheduled date of delivery of the fmal deliverable per project plan and schedule up to the total
amount of the Retainage, to the extent such delay is caused solely by IBM. Th amounts retained by
Company for any such delay shall be Company's sole and exclusive remedy for such delay.
The sole exclusive remedy for IBM's failure to meet performance criteria, found in Section 4.2.2, item4d,
win be the amount of any delay and the consequent witholding of the Retainage by PacifiCorp under ths
retainge section.
In exchange for IBM agreeing to the performance metrc in Section 4.2.2 item 4d, PacifiCorp agrees to be an
exteral reference for IBM as a DB2 SAP showcase and IBM migration services showcase. Ths reference
showcase could be in prit, speech or both.
Travel and living expenses are in addition to the above charges and wil be invoiced monthly in accordance
with PacifCorp Guidelines from the Contract and IBM policy. Exceptions to the PacifiCorp Guidelines are
as follows:
a) Option to stay over the weekend. Expenses wil be equal or less than travel back to home location.
For example, month to month hotels costs, meals and car renta for non-work days spent at
PacifCorp work location.
b) Occasional Spousal travel to client location in lieu of trvel home
c) Mobile phone and data related expenses for PacifiCorp
Page 38 of45
Milestone Acceptance Criteria
As IBM delivers the Materials required to complete a Project Milestone, the IBM Project Manager ",ill promptly
request forml customer acceptance ("Acceptance Request") of the Material from the PacifCorp Project Manager
or designated representative. Project Milestones and Acceptance Criteria for Milestone Completion are listed
below.
Acceptance Request Handling.
For each Acceptance Request, PacifiCoip shall have five (5) business days to respond to IBM's Project
Manager, at which time PacifiCorp may:
a. Accept the Material provided by IBM; or
b. Reject the Acceptace Request ("Rejected Acceptance Request') and provide IBM with a
list of deficiencies with respect thereto.
In the event that the IBM Project Manager does not receive a response to a submitted Acceptance Request
from PacifiCorp within five (5) business days, PacifiCorp wil be deemed to have accepted such Material
and the associated Milestone (if applicable).
Rejected Acceptance Request Handling.
For each Rejected Acceptace Request provided to IBM by PacifiCorp, IBM will:
a. Address the list of deficiencies in respect thereto, and
b. Provide the revised Material to IBM's Project Manager for resubmission oran Acceptance
Request to PacifiCoip.
c. Resubnùtted Acceptance Requests shall be processed in accordance with the term of
Acceptance Request Handling, above.
For requests that are rejected by PacifiCorp more than two (2) times, PacifiCorp and IBM agree to jointly develop
and execute a formal resolution plan for the rejected Acceptance Request. If the list of deficiencies cannot be
resolved by IBM in a reasonable length of time, IBM's Project Manager 'wil intiate the Escalation Procedure
process.
Milestone Completion Criteria
IBM shall promptly request payment for Services pedormed for each Milestone as it is accepted by PacifiCorp.
1. Software InstalJation and Configuration
This milestone shall be considered complete upon customer acceptance of the Softe Installation and
Configuration Reprt
2. R/3 Landscape Migration
This nùlestone shall be considered complete upon customer acceptance of the R/3 Landscape Migrtion
Report,
3. R/3 Functional Test Servers Implementation
Thi nùlestone shall be considered complete upon customer acceptance of the R/3 Functiona Test Servers
Imlementation Reprt.
4. BI Landscape Migration
This nùlestone shall be considered complete upon customer acceptance of the BI Landscape Migrtion
Report.
5. SAP Migration Project Completion
This milestone shall be considered complete upon signatue of the Certificate of Project Completion by the
PacifiCorp project sponsor and the IBM Project Manger.
Page 39 of 45
Appendix E: Project Change Procedures
E - 1: Project Change Control Procedure
The following process wil be followed if a change to ths SOW is required.
1) IBM andPacifiCorp may detennne that it is necessary to add additional Services or extend the End
Date. In such event, PacifiCorp may authorie additional funding or End-Date extenion by
execution of a Project Change Request as discussed below.
2) PacìfiCorp may authori an extension of the end date by the vl'rItten request ofPacifiCorp's SOW
signatory. The request must reference the SOW number. If accepted or initiated by IBM, such lett
or e-mail shall act as a Change Authoriation to ths SOW. All other requested changes wil require
execution of a Project Change Request as discussed below.
3) For all other changes, the Project Change Request (PCR) wil be the vehicle for cormumcatig
change. The PCR must describe the change, the rationale for the change and the effect the change
wil have on the project.
4) A PCR must be signed by authoried representatives from both PacifiCorp and IBM to authori
implementation of the change. Until a change is agreed to in v'.riting, both pares will contiue to act
in accordance 'with the latest agreed version of the SOW.
Page 40 of 45
Appendix F: Escalation Procedure
When a conflct arises between the PacifiCorp and IBM during the performance of this SOW, the project
team member(s) wil be the first to address the problem internally. When the conflict cannot be resolved
at the project team level, the following escalation procedures (categorized as Level
1 , Level 2, and
Level 3) wil be followed.
Level 1. If the project team cannot resolve the conflict within two (2) working days, The PacifiCorp
Project Manager and IBM's Project Manager wil meet to address the issue. .
Level 2. If the conflict is not resolved within three (3) working days after being escalated to Level 1 l
the PacifiCorp's Executive Sponsor wil meet with the ISM Project Executive to address the
issue.
Level 3. If the conflct remains unresolved after Level :2 intervention, resolution wil be addressed in
accordance with the Project Change Procedure or the Contract.
Page4! of45
EXHIBITB
Terms of Hardware Purchase
All term and conditions ofIBM product maintenance and support shall be in accordance with the existing IBM
Customer Agreement dated July 3,2002, ref. #HW31546.
Page 42 of45
EXHIBITC
Terms of Maintenance Support
All terms and conditions ofIBM product maintenance and support shall be in accordance with the existing IBM
Customer Agreement dated July 3,2002, ref. #HW31546.
Page 43 of45
EXHIBIT D - Guidelines for PacifiCorp Contractor Expense Reports
** Receipts are required for all reimbursable expenses except meals less than $25.00 **
. Airfare and lodging: All trvel, tht you request reimburement from PacifiCoip, must be approved prior
to bookig. Contract firm may make their o,vn arngements for air travel, rental ca and hotel stays, but
expenses must meet these guidelines. PacifiCorp will reimbure for coach class trvel only. Charges in
excess of coach ticket are the responsibility of the contract firm Bookig flights less thn seven (7) days
prior to departe is strongly discouraged and must be approved by the hig manager. PacífCorp will only
reimburse for stadard hotel rooms and prefer that contractors use hotels where negotiated discounts are
available. Check with PacifiCorp for hotels with discounted rates. The contractor is welcome to utilize the
PacifiCoip, or your own corporate, discounts.
. Rental cars I ground transportation: If a rental car is required, there will be only one car per contrct
firm and rental will require the approval of the hirng mager. PacifiCorp may reque proof of inurance. A
discounted rate is also available with Enterprise for car rentals.
. PacifiCorp will reimbure shuttle, cab or mileage for one trp to and from the airort up to a maximum of
$50 for each business trp. If you park at the airprt PacifiCorp wil reimbure you for economy parki
only. Receipts for all ground transporttion, parkig and mieage are required.
. Use of personal or company vehicles will be reimbursed at the curently effective IR allowed rate per mie.
Required automobile insurance is required.
. Meals: PacifiCoip will reimbure for breakfast, lunch and diner for each day of contrct work for non-
local contractors. The standad meal reimbursement should not exceed $55 per day. However, ths is not a
per diem amount that is automatically paid for each day of work. PacifiCoip will not reimburse for any
meals that the contrctor (or contrctig agency) purchases for PacifiCoip employees, such as team
lunches! dinner.
. PacifiCorp 'wil only reimburse for meal gratuities lI 15%. All other gratuties are not reimburâble (e.g.
taxis, porters, bellhops, or hotel staff.
. Non-Reimbursable Expenses: The following is a listing, though not all inclusive, of expenes that will not
be reimbursed.
o Business gifts
o Expenses for non-business puroses
o Fines
o Local trvel tie (defined as withi 50 miles of consultats offce)
o General offce supplies.
o Personal entertainent or recreation (in-room movies, health club)
o Expenses incured by contractor famly members.
o Expenses not supported with a valid receipt.
o Alcoholic beverages.
o Laundr service.
o Barber and beautician fees.
o Personal hygiene products ( shampoo, razors blades, toothbrushes)
o Parkig for local contractors.
. Expense report documentation: Accurate expense report submitted in a timely maer substantially
reduce the invoice processing time. Report include a worksheet or listing of each expens, with date, tye
of expense and amount noted. Receipts are required for all reimbursable expenses except meals less
than $25.00 . You can use a standard form from your company or request one from PacifCorp. Please see
the sample entr below if you are creating your own worksheet.
Date Type of expense Amount Location (Le., Plant Receipt
location)included
5/1/2008 Hotel room charQe 98.11 Hunter Plant Yes
5/1/2008 Meals 27.24 Hunter Plant Yes
5/1/2008 Vehicle Rental 34.55 Hunter Plant Yes
5/1/2008 Fuel 12.95 Hunter Plant Yes
Page 44 of45
EXHIBIT E - COMPAN'S CRITERIA
NERC CIP Standards - Background Check Criteria
The North American Electric Reliability Corporation (1TERC) has issued a catalog of Reliabilty Standards in
response to the Federal Energy Regulatory Commssion's (FERC) mandate that federal regulations be enacted and
enforced for electrc utilities.
The Critical Infrastrctue Protection (CIP) Standards are a subset of those Reliabilty Stadards that seek to
ensure that electrc utilties, as part of the nation's critical infrastrcroe, are able to sustain and secure against
vulnerabilities that may theaten the electrc system and the utilities that operate it. The CIP were passed into law
effective January 17, 2008.
PacifiCorp is subject to audits by the Western Electrcity Coordinatig Council (WECC) to prove compliance with
the Reliability Standards. Mandatory compliance with the first set of CIP requirements, which focus on security
management, securty controls, personnel security, and training, is required by June 30, 2008. The intent of
these requirements is to ensure tht all personnel having access to critical facilties (including control centers,
substations, generation plants, etc.), critical infrastrcroe information (such as maps and one-line diagram) and
cyber assets have the appropriate personnel securty clearance and securty training.
Individuals who have access to critical assets wil be required to consent to criminal and civil background screens,
social securty verification and military background screens. Background checks will be reated ever seven
years. Additionally, in order to comply with the law, individuals will be required to complete anual traing.
Individuals who are considered "restrcted persons" may not have access to critical facilties or cybe assets. The
USA Patrot Act of 200 i should be used as the baseline for determg whether an individual is a "restrcted
person." An individual \\rill be a "restrcted person" if the person meets any of the following criteria:
. Is currently under indictment for a crime punishable by imprisonment for a tenn exceeding one year;
. Has been convicted (with the past seven years) in any cour of a crie punishable by imprisonment for
a term exceeding one year;
. Is currently a fugitive from justice;
. Is curently an unlawful user of any uncontrolled substance (as defined in section 102 of the Controlled
Substance Act (21 USC 802));
. Is an alien ilegally or unawfully in the United States;
. Has been adjudicated as mentally defective or has been commtted to any mental intitute (i,ithin the pas
sev.en years);
. Is an alien (other than an alien lawfully admtted for .permanent residence) who is a national of Cuba.
Iran, Irq, Libya, North Korea, Sudan, or Syra, or any othercou."ltr to which the U.S. Secreta-- of State,
pursut to applicable law, has made a determnation (that remains in effect) that such countr ha
repeatedly provided support for acts of international terrorism; or
. Has been discharged from the Ared Services of the United States under dishonorable conditions (with
the past seven year).
If an individual's background check indicates that he/she meets any of the above criteria. the individual wil be
considered a "restrcted person" and his/her access to critical facilties will be revoked.
Page 45 of45