Exhibit 10.j
EXECUTION COPY

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CONFIDENTIAL TREATMENT REQUESTED. 
CONFIDENTIAL PORTIONS OF THIS DOCUMENT
HAVE BEEN REDACTED AND HAVE BEEN FILED
WITH THE COMMISSION.
 

 
AMENDED AND RESTATED
 
MASTER FRAMEWORK AGREEMENT
 
between
 
TXU ELECTRIC DELIVERY COMPANY
 
and
 
INFRASTRUX ENERGY SERVICES GROUP LP
 
 
Dated June 24, 2006
 

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AMENDED AND RESTATED
MASTER AGREEMENT
 
 
TABLE OF CONTENTS
 
 

     
Page
       
1.
CONDITIONS, BACKGROUND AND OBJECTIVES
1
         
1.1
Eligible Recipients
1
     
 
 
1.2
TXUED Minimum Expenditures
2
     
 
 
1.3
Termination
4
     
 
2.
DEFINITIONS AND DOCUMENTS
4
     
 
 
2.1
Definitions
4
     
 
 
2.2
Other Terms
4
     
 
 
2.3
Services Agreements
4
     
 
3.
TERM
5
     
 
 
3.1
Initial Term
5
     
 
 
3.2
Extension
5
     
 
 
3.3
Services Agreement
5
     
 
4.
SERVICES
5
     
 
 
4.1
General
5
     
 
 
4.2
Termination Assistance Services
6
     
 
 
4.3
Use of Third Parties
8
     
 
 
4.4
Employee Transfers
9
     
 
 
4.5
Governance
9
     
 
5.
RESERVED
9
     
 
6.
FACILITIES, SOFTWARE, EQUIPMENT, CONTRACTS AND ASSETS ASSOCIATED WITH THE
PROVISION OF SERVICES
9
     
 
 
6.1
Service Facilities
9
     
 
 
6.2
Use of Vendor Facilities
11
     
 
 
6.3
TXUED Rules / Employee Safety
12
     
 
 
6.4
Notice of Defaults
14
     
 
7.
SERVICE LEVELS
14
     
 
 
7.1
General
14
     
 
 
7.2
Service Level Credits
14
     
 
 
7.3
Problem Analysis
14

 

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AMENDED AND RESTATED
MASTER AGREEMENT
 
 
TABLE OF CONTENTS
(continued)

     
Page
     
 
 
7.4
Continuous Improvement Reviews
15
     
 
 
7.5
Measurement and Monitoring
15
     
 
 
7.6
Notice of Adverse Impact
15
     
 
 
7.7
Key Vendor Personnel
15
     
 
 
7.8
Vendor Account Executive
17
     
 
 
7.9
Vendor Personnel Are Not TXUED Employees; Independent Relationship
18
     
 
 
7.10
Replacement, Qualifications, and Retention of Vendor Personnel
18
     
 
 
7.11
Conduct of Vendor Personnel
19
         
7.12
Substance Abuse
19
     
 
8.
VENDOR RESPONSIBILITIES
19
     
 
 
8.1
Policy and Procedures Manual
19
     
 
 
8.2
Reports
19
     
 
 
8.3
Reserved
20
     
 
 
8.4
Audit Rights
20
     
 
 
8.5
Agency and Disbursements
23
     
 
 
8.6
Subcontractors
24
     
 
 
8.7
Requirement of Writing
25
     
 
 
8.8
Seconded TXUED Personnel
26
     
 
 
8.9
Seconded Vendor Personnel
26
     
 
9.
TXUED RESPONSIBILITIES
26
     
 
 
9.1
Responsibilities
26
     
 
 
9.2
Savings Clause
27
     
 
10.
CHARGES
28
     
 
 
10.1
General
28
     
 
 
10.2
Pass-Through Expenses
29
     
 
 
10.3
Incidental Expenses
30
     
 
 
10.4
Taxes
30
     
 
 
10.5
New Services
32

-ii-

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AMENDED AND RESTATED
MASTER AGREEMENT
 
 
TABLE OF CONTENTS
(continued)
 
 

     
Page
     
 
 
10.6
Proration
34
     
 
 
10.7
Refundable Items
34
     
 
 
10.8
***
34
     
 
11.
INVOICING AND PAYMENT
34
     
 
 
11.1
Invoicing
34
     
 
 
11.2
Payment Due
35
     
 
 
11.3
Set Off
36
     
 
 
11.4
Disputed Charges
36
     
 
12.
TXUED DATA AND OTHER PROPRIETARY INFORMATION
36
     
 
 
12.1
TXUED Ownership of TXUED Data
36
     
 
 
12.2
Safeguarding TXUED Data
37
     
 
 
12.3
Confidentiality
38
     
 
 
12.4
File Access
41
     
 
13.
REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS
41
     
 
 
13.1
Reserved
41
     
 
 
13.2
Authorization
41
     
 
 
13.3
Compliance with Laws
42
     
 
 
13.4
Resources
44
     
 
 
13.5
Non-Infringement
44
     
 
 
13.6
TXUED 2004 Base Case
44
     
 
 
13.7
Reserved
44
     
 
 
13.8
Disclaimer
45
     
 
14.
INSURANCE AND RISK OF LOSS
45
     
 
 
14.1
Vendor Insurance
45
     
 
15.
INDEMNITIES
45
     
 
 
15.1
Indemnity by Vendor
45
     
 
 
15.2
Indemnity by TXUED
47
     
 
 
15.3
Reserved
49

 
***
CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

.
 
-iii-

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AMENDED AND RESTATED
MASTER AGREEMENT
 
 
TABLE OF CONTENTS
(continued)
 

     
Page
     
 
 
15.4
Indemnification Procedures
49
     
 
 
15.5
Indemnification Procedures - Governmental Claims
50
     
 
16.
LIABILITY
51
     
 
 
16.1
Force Majeure
51
     
 
 
16.2
Limitation of Liability
53
     
 
 
16.3
Non-Recourse Liabilities
54
     
 
17.
DISPUTE RESOLUTION
55
     
 
 
17.1
Informal Dispute Resolution
55
     
 
 
17.2
Jurisdiction
57
     
 
 
17.3
Continued Performance
58
     
 
 
17.4
Governing Law
58
     
 
18.
TERMINATION
58
     
 
 
18.1
Termination for Cause
58
     
 
 
18.2
Reserved
59
     
 
 
18.3
Termination for Insolvency
59
     
 
 
18.4
TXUED Rights Upon Vendor’s Bankruptcy
60
     
 
 
18.5
Utility Regulation
61
     
 
 
18.6
Reserved
61
     
 
 
18.7
Reserved
61
     
 
 
18.8
Reserved
61
     
 
 
18.9
Termination For Convenience
61
     
 
 
18.10
Cross Termination Rights and Termination Charges
61
     
 
 
18.11
Equitable Remedies
62
     
 
19.
GENERAL
62
     
 
 
19.1
Binding Nature and Assignment
62
     
 
 
19.2
Entire Agreement; Amendment
63
     
 
 
19.3
Notices
63
     
 
 
19.4
Counterparts
64

 
-iv-

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AMENDED AND RESTATED
MASTER AGREEMENT
 
 
TABLE OF CONTENTS
(continued)
 

     
Page
     
 
 
19.5
Headings
64
     
 
 
19.6
Relationship of Parties
64
     
 
 
19.7
Severability
64
     
 
 
19.8
Approvals and Consents
64
         
19.9
Waiver of Default; Cumulative Remedies
64
         
19.10
Survival
65
         
19.11
Publicity
65
         
19.12
Export
65
         
19.13
Third Party Beneficiaries
65
         
19.14
Assignment of Agreement For Financing
65
         
19.15
Order of Precedence
66
         
19.16
Hiring of Employees
66
         
19.17
Further Assurances
66
         
19.18
Liens
66
         
19.19
Acknowledgment
67

 
-v-

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AMENDED AND RESTATED
MASTER AGREEMENT
 
 
MASTER FRAMEWORK AGREEMENT
 
 
This Master Framework Agreement (this “Master Agreement”) is entered into
effective June 24, 2006 (the “Master Agreement Effective Date”) by and between
TXU ELECTRIC DELIVERY COMPANY, a Texas corporation having a principal place of
business at Lincoln Plaza, 500 N. Akard Street, Dallas, Texas 75201 (“TXUED”),
and INFRASTRUX ENERGY SERVICES GROUP LP, a Delaware limited partnership having a
principal place of business at 115 W. 7th Street, Fort Worth, Texas 76101
(“Vendor”).
 
WHEREAS, the purpose of this Master Agreement is to establish the overall
contractual framework for TXUED’s and Vendor’s relationship and set forth terms
and conditions that apply to all Services provided by Vendor;
 
WHEREAS, Affiliates of TXUED and Affiliates of InfrastruX Group, Inc., a
Washington corporation, have created Vendor, a Delaware limited partnership
which shall provide services to TXUED in accordance with this Agreement;
 
WHEREAS, simultaneous with entering into this Master Agreement, TXUED and Vendor
have entered into the Initial Services Agreement pursuant to which Vendor shall
provide certain field services to TXUED and the Eligible Recipients; and
 
WHEREAS, TXUED may request that Vendor provide certain other services to TXUED
and the Eligible Recipients pursuant to the Initial Services Agreement or a New
Services Agreement.
 
NOW THEREFORE, in consideration of the mutual promises and covenants contained
herein and of other good and valid consideration, the receipt and sufficiency of
which is hereby acknowledged, TXUED and Vendor (collectively, the “Parties” and
each, a “Party”) hereby agree as follows:
 
1.
CONDITIONS, BACKGROUND AND OBJECTIVES

 
1.1
Eligible Recipients. Upon TXUED’s request, Vendor shall provide the Services to
Eligible Recipients at Charges determined in accordance with Exhibit 11,
provided that Eligible Recipients that are not Controlled by TXUED agree with
TXUED to be bound by the terms of this Agreement. Upon Vendor’s reasonable
request, Eligible Recipients shall execute a written instrument, in a form
reasonably requested by Vendor, in favor of Vendor agreeing to be bound by the
terms of this Agreement. For purposes of this Agreement, Services provided to an
Eligible Recipient shall be deemed Services provided to TXUED. To the extent an
Eligible Recipient is, or was at any time during the Term, receiving Services,
(1) references to TXUED shall include such Eligible Recipient (including for
purposes of the business, operations, policies, procedures, rules, standards and
the like of TXUED and the indemnities under this Agreement), (2) references to
Services being performed for or provided to, or received by or used by, TXUED
shall include the performance of such Services for and provision of such
Services to, and the receipt of and use of such Services by, such Eligible
Recipient and (3) TXUED shall be responsible for such Eligible Recipient’s acts
and omissions in connection with this Agreement, including compliance with this
Agreement.  Notwithstanding the immediately preceding sentence, Eligible
Recipients are neither authorized to direct or instruct Vendor nor to act for or
on behalf of TXUED (including by providing notices, approvals, consents, waivers
or the like), in each case unless TXUED has notified Vendor that an Eligible
Recipient is so authorized. Vendor will not be liable for any failure to act (or
any delay associated therewith) in any circumstance where TXUED has failed to
properly authorize such action in accordance with the preceding sentences.
Without limiting the generality of the foregoing, in all circumstances under
this Agreement, TXUED will be Vendor’s sole point of contact regarding the
Services.

 
Page 1 of 67

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AMENDED AND RESTATED
MASTER AGREEMENT
 
 
1.2
TXUED Minimum Expenditures.

 

 
(a)
TXUED agrees that the Charges paid to Vendor (including any Termination Charges)
under this Agreement (the “Cumulative Total Spend”) during the applicable period
of Contract Years set forth in the table below (each such period, a “Contract
Period”) will equal or exceed the applicable amount corresponding to each
Contract Period as set forth in such table (the “Cumulative Spend Commitment”).

 
Contract Period
Cumulative Spend Commitment
Contract Years 1 and 2
$1,740,000,000
Contract Years 1 through 4
$3,480,000,000
Contract Years 1 through 6
$5,220,000,000
Contract Years 1 through 8
$6,960,000,000
Contract Years 1 through 10
$8,700,000,000

 
(b)
If TXUED’s Cumulative Total Spend during a Contract Period (except with respect
to TXUED’s Cumulative Total Spend during the Contract Period for Contract Years
1 through 10) does not equal or exceed the corresponding Cumulative Spend
Commitment for that Contract Period, then unless this Agreement is terminated
earlier as provided herein, on the date that is thirty (30) days following the
end of such Contract Period, and on the date that is thirty (30) days following
the first anniversary of such date, TXUED shall pay to Vendor an amount equal to
the product of the following calculation: (the applicable Cumulative Spend
Commitment - the actual Cumulative Total Spend) x (the then current rate set by
Citibank, N.A. as its prime lending rate) x (thirteen percent (13%)). If TXUED’s
Cumulative Total Spend equals or exceeds the Cumulative Spend Commitment for a
Contract Period, then TXUED shall not owe Vendor any amounts pursuant to the
immediately preceding sentence.

 

 
(c)
If TXUED’s Cumulative Total Spend during the Contract Period for Contract Years
1 through 10 does not equal or exceed eight billion seven hundred million
dollars ($8,700,000,000), then unless this Agreement is terminated earlier as
provided herein, on the last day of the quarter in which the tenth (10th)
anniversary of the Services Agreement Commencement Date for the Field Services
Agreement falls and on the last day of each subsequent quarter thereafter, TXUED
shall pay to Vendor an amount equal to the product of the following calculation:
(($8,700,000,000 - TXUED’s actual total spend for its Transmission System and
its Distribution System over the period from the Services Agreement Commencement
Date for the Field Services Agreement through the applicable anniversary of such
date) x (the then current rate set by Citibank, N.A. as its prime lending rate)
x thirteen percent (13%)) / four (4); provided, however, that the first payment
shall be prorated to the extent the tenth (10th) anniversary of the Services
Agreement Commencement Date for the Field Services Agreement does not fall on
the last day of the applicable quarter. Once TXUED’s Cumulative Total Spend
equals or exceeds an aggregate amount of eight billion seven hundred million
dollars ($8,700,000,000), then TXUED shall no longer owe Vendor any amounts
pursuant to the immediately preceding sentence.

 
Page 2 of 67

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AMENDED AND RESTATED
MASTER AGREEMENT
 
 

 
(d)
For the avoidance of doubt, Vendor acknowledges and agrees that its sole and
exclusive remedy for TXUED’s breach of Section 1.2(a) shall be the payments by
TXUED pursuant to Section 1.2(b) and Section 1.2(c).

 

 
(e)
If TXUED’s failure to meet a Cumulative Spend Commitment results from Vendor’s
failure to comply with this Agreement, the amounts TXUED is obligated to pay to
Vendor under Section 1.2(b) and Section 1.2(c), as applicable, shall be reduced
in proportion to the shortfall caused by Vendor’s failure to comply with this
Agreement.

 

 
(f)
If the Charges paid to Vendor for labor, transportation and equipment (“LTE”) in
respect of TXUED’s Transmission System do not exceed seventy million dollars
($70,000,000) (excluding amounts spent by TXUED in order to procure materials
and to transport materials) during any Contract Year during the first ten (10)
years following the Services Agreement Commencement Date for the Field Services
Agreement, then within thirty (30) days following the end of that Contract Year,
TXUED shall pay to Vendor an amount equal to ten percent (10%) of the difference
between (i) seventy million dollars ($70,000,000) minus (ii) the Charges paid to
Vendor for LTE in respect of TXUED’s Transmission System during that Contract
Year. For purposes of this Subsection, Charges spent for LTE in respect of those
coal generation facilities that, as of the Master Agreement Effective Date, an
Affiliate of TXUED has publicly announced its intent to construct shall be
excluded from the Charges paid to Vendor for LTE in respect of TXUED’s
Transmission System.

 

 
(g)
The Parties agree that the terms of this Section (except for Section 1.2(d))
shall not survive any termination or expiration of this Agreement. For the
avoidance of doubt, this Section 1.2(g) does not limit any damages that Vendor
may be permitted to recover from TXUED in connection with a breach of this
Agreement.

 
Page 3 of 67

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AMENDED AND RESTATED
MASTER AGREEMENT
 
 
1.3
Termination. If (a) the Closing Date (under and as defined in the Participation
Agreement, dated June 24, 2006, among InfrastruX Group, Inc., a Washington
corporation, TXU Asset Services Company LLC, a Delaware limited liability
company, and (for certain limited purposes only) TXU Electric Delivery Company,
a Texas corporation), has not occurred by December 31, 2006, as such date may be
extended by the Parties, or (b) the Participation Agreement terminates for any
reason prior to the Closing Date, then in either case this Agreement shall
automatically terminate without action by either Party and neither Party shall
have any liability to the other Party as a result of such termination.

 
2.
DEFINITIONS AND DOCUMENTS

 
2.1
Definitions. The terms used with initial capital letters in this Agreement shall
have the meanings ascribed to them in this Master Agreement (including
Exhibit 1) or the applicable Services Agreement.

 
2.2
Other Terms. The defined terms include the plural as well as the singular and
the derivatives of such terms. The term “Agreement” shall be read and understood
to mean this Master Agreement and each Services Agreement entered into
hereunder, and all references to this Master Agreement shall include the
Exhibits, Schedules and other attachments to this Master Agreement and all
references to a Services Agreement shall include all Schedules and other
attachments to that Services Agreement, unless otherwise specified. Unless
otherwise expressly stated, the words “herein,” “hereof,” “hereunder” and other
words of similar import when used in this Agreement (including the Services
Agreements) refer to this Master Agreement (or the applicable Services
Agreement) as a whole and not to any particular Article, Section, Subsection or
other subdivision. Article, Section, Subsection, Exhibit and Schedule references
refer to articles, sections and subsections of, and exhibits and schedules to,
this Master Agreement (or if used in a Services Agreement, to such Services
Agreement). The words “include” and “including” shall not be construed as terms
of limitation. The words “day,” “month” and “year” mean, respectively, calendar
day, calendar month and calendar year. As stated in Section 19.3, the word
“notice” and “notification” and their derivatives shall mean notice or
notification in writing. Except as otherwise provided in this Agreement, all
amounts are set forth in U.S. Dollars. Other terms used in this Agreement are
defined in the context in which they are used and shall have the meanings there
indicated. Unless otherwise expressly stated, references to specific Exhibits or
Schedules include all numbered or lettered subsidiary Exhibits or Schedules
(e.g., references to Schedule G include not only Schedule G, but also Schedules
G.1, G.2 and G.3) and all attachments and annexes thereto.

 
2.3
Services Agreements. Simultaneously with entering into this Master Agreement,
TXUED and Vendor have entered into the Initial Services Agreement. The Initial
Services Agreement incorporates by reference the terms of this Master Agreement.
Subject to Section 10.5, TXUED may request that Vendor provide New Services. The
Parties shall work to complete and execute either (i) a New Services proposal
(in accordance with Section 10.5(a)) or (ii) a New Services Agreement, to
address Vendor’s provision of such services.

 
Page 4 of 67

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AMENDED AND RESTATED
MASTER AGREEMENT
 
 
3.
TERM

 
3.1
Initial Term. The initial term of this Master Agreement shall commence as of
12:00:01 a.m., Central Time, on the Master Agreement Effective Date and continue
until the later of (a) 11:59:59 p.m., Central Time, on the tenth (10th)
anniversary of the Services Agreement Commencement Date for the Field Services
Agreement and (b) such date as of which the aggregate amount specified in
Section 1.2(c) has been spent by TXUED, unless this Master Agreement is
terminated earlier as provided herein, in which case the initial term shall end
at 11:59:59 p.m., Central Time, on the effective date of such termination (the
“Initial Term”). 

 
3.2
Extension. If TXUED desires to renew this Master Agreement after the Initial
Term or any Renewal Term, TXUED shall provide written notice to Vendor of its
desire to do so at least one hundred eighty (180) days prior to the expiration
of the Initial Term or the then current Renewal Term. The Parties shall
thereafter negotiate with respect to the terms and conditions upon which the
Parties may renew this Master Agreement and if the Parties reach agreement
thereafter execute such renewal (each, a “Renewal Term”). In the event the
Parties are unable to reach agreement and execute such renewal at least one
hundred twenty (120) days prior to the expiration of the Initial Term or the
then current Renewal Term, TXUED may, at its sole option, by delivery of notice
to Vendor at least ninety (90) days prior to the expiration of the Initial Term
or the then current Renewal Term, extend the Initial Term or the then current
Renewal Term for one (1) additional period of up to twelve (12) months (the
exact period of which shall be specified in TXUED’s notice of extension) on
terms and conditions then in effect. The Initial Term and the Renewal Terms, if
any, including any period of Termination Assistance Services provided by Vendor
hereunder, are collectively referred to as the “Term.”

 
3.3
Services Agreement. The term of a Services Agreement, if different than the
Term, shall be set forth in the applicable Services Agreement; provided,
however, that in no event shall the term of a Services Agreement extend beyond
the Term of this Master Agreement.

 
4.
SERVICES

 
4.1
General. Services to be provided to TXUED by Vendor shall be governed by the
terms set forth in this Master Agreement and such additional terms as are
contained in the Services Agreement pursuant to which such Services are being
provided.

 

 
(a)
Services. Commencing on a Services Agreement Commencement Date (or such later
date as is specified in the applicable Services Agreement) and continuing
throughout the term of such Services Agreement, Vendor shall be responsible for
providing to TXUED and, as directed by TXUED, to Eligible Recipients, any or all
of the following:

 

 
(i)
the services, functions and responsibilities described in this Agreement
(including Schedule E to the Services Agreements) as they may be supplemented,
enhanced, modified or replaced in accordance with this Agreement;

 
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AMENDED AND RESTATED
MASTER AGREEMENT
 
 

 
(ii)
Reserved;

 

 
(iii)
any New Services, upon TXUED’s acceptance of Vendor’s proposal for such New
Services in accordance with Section 10.5 and the other provisions of this
Agreement; and

 

 
(iv)
unless otherwise agreed by the Parties, the services, functions and
responsibilities (y) specified in or reasonably inferable from the TXUED 2004
Base Case, if any, attached to the applicable Services Agreement and/or (z)
performed during the twelve (12) months preceding the Services Agreement
Effective Date of such Services Agreement by TXUED Affected Personnel as
reasonably demonstrated by TXUED, or upon TXUED’s request, demonstrated by the
Transitioned Employees acting in good faith (clauses (i) through (iv) of this
Section, the “Services”).

 

 
(b)
Included Services. If any services, functions or responsibilities not
specifically described in this Agreement are a necessary part of the Services,
they shall be deemed to be included within the scope of the Services to be
delivered for the Charges, as if such services, functions or responsibilities
were specifically described in this Agreement.

 

 
(c)
Required Resources. Except as otherwise expressly provided in this Agreement,
Vendor shall be responsible for providing the Resources, knowledge, expertise,
methodologies, processes and other means necessary to provide the Services.

 

 
(d)
No Control of Electrical System. Notwithstanding anything to the contrary in
this Agreement, the Parties do not intend for Vendor to control or operate the
Electrical System or Utility Facilities, it being acknowledged and agreed that
TXUED shall retain all control and operation of the Electrical System and
Utility Facilities in accordance with all applicable Laws.

 

 
(e)
No Competitive Energy Services. Vendor will not provide in the State of Texas to
any third party (including any Affiliate of Vendor) any product or service that
would constitute a “competitive energy service” as such term is defined in
Section 25.341 of the Texas Administrative Code, or that would otherwise cause
Vendor to be a “competitive affiliate” of TXUED, as that term is defined in
Section 25.272 of the Texas Administrative Code.

 
4.2
Termination Assistance Services.

 

 
(a)
Availability. As part of the Services, and for the Charges to be determined in
accordance with Exhibit 11, upon TXUED’s request, Vendor shall provide to TXUED
the Termination Assistance Services under and in accordance with the applicable
Services Agreement.

 
Page 6 of 67

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AMENDED AND RESTATED
MASTER AGREEMENT
 
 

 
(b)
Period of Provision. Vendor shall provide the Termination Assistance Services to
TXUED (i) upon ninety (90) days’ prior notice from TXUED commencing up to nine
(9) months prior to the scheduled expiration of the applicable Services
Agreement and continuing for up to twelve (12) months following the scheduled
effective date of the expiration of the applicable Services Agreement,
(ii) commencing upon any notice of termination (including notice based upon
breach or default by TXUED, breach or default by Vendor or termination for
convenience by TXUED (subject to Subsection (d) below)) of the applicable
Services Agreement and continuing for up to twelve (12) months following the
specified effective date of such termination, (iii) commencing upon notice of
removal of an Eligible Recipient by TXUED and continuing for up to twelve (12)
months following the effective date of such removal, (iv) commencing upon notice
from TXUED that there will be an insourcing or resourcing under the applicable
Services Agreement of any Services and continuing for up to twelve (12) months
following the effective date of such notice (to the extent that this Agreement
expressly permits TXUED to insource or resource such Services) or (v) commencing
upon notice that TXUED has elected to discontinue the provision of Services to a
line of business of TXUED and continuing for up to twelve (12) months following
the effective date of such discontinuance (to the extent that this Agreement
expressly permits TXUED to discontinue the provision of Services to a line of
business of TXUED). If any period for performing any Termination Assistance
Services extends beyond the expiration or the effective date of any termination
of this Master Agreement or any applicable Services Agreement(s), the provisions
of this Master Agreement and such Services Agreement(s) shall remain in full
effect for the duration of such period.

 

 
(c)
Extension of Services. TXUED may elect, upon one hundred eighty (180) days’
prior notice, to extend the effective date of any expiration or termination of
any Services, in its sole discretion, provided that the total of all such
extensions will not exceed one hundred eighty (180) days following the
originally specified effective date without Vendor’s prior written consent and
the period of extension shall be specified in TXUED’s notice. TXUED also may
elect, upon one hundred eighty (180) days’ prior notice, to extend the period
for the performance of any Termination Assistance Services, provided that the
date on which Vendor begins providing such Termination Assistance Services and
the completion of such Termination Assistance Services is not greater than
eighteen (18) months and the period of extension shall be specified in TXUED’s
notice.

 

 
(d)
Firm Commitment. Vendor shall provide Termination Assistance Services to TXUED
regardless of the reason for the expiration or termination of this Agreement or
the applicable Services Agreement; provided, however, that if Vendor terminates
this Agreement pursuant to Section 18.1(b), then TXUED must pay to Vendor all
undisputed unpaid amounts then due and owing to Vendor under this Agreement and
continue to pay invoices in accordance with Article 11 prior to Vendor being
obligated to provide the Termination Assistance Services.

 
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(e)
Performance. At TXUED’s request, Vendor shall provide Termination Assistance
Services directly to TXUED’s designee, any Eligible Recipient or an Entity
acquiring Control of an Eligible Recipient. Unless otherwise agreed by the
Parties, all such Termination Assistance Services shall be performed subject to
and in accordance with the terms and conditions of this Agreement and Vendor
shall perform the Termination Assistance Services with at least the same degree
of accuracy, quality, completeness, timeliness, responsiveness and resource
efficiency as it provided and was required to provide in respect of the same or
similar Services.

 
4.3
Use of Third Parties.

 

 
(a)
Right of Use. TXUED shall not be permitted to insource or resource any of the
scope or volume of Services being provided by the Transitioned Employees as of
the Master Agreement Effective Date (which, for the avoidance of doubt, means
the scope and volume of the Services outsourced to Vendor under the Field
Services Agreement as of the Services Agreement Effective Date for the Field
Services Agreement); provided, however, that (i) TXUED shall be permitted to
insource or resource any such Services in any of the following circumstances (1)
if and to the extent permitted pursuant to the terms of Schedule E to a Services
Agreement, (2) if and to the extent permitted pursuant to the terms of Section
16.1(c), (3) if and to the extent the Parties must negotiate Variable Charges
that are not based on the “Unit Prices” set forth in Exhibit 11, (4) that TXUED
reasonably believes in good faith Vendor is unable to perform in accordance with
TXUED’s requirements (including any applicable TXUED Rules or TXUED Standards)
and within fifteen (15) days after receiving notice from TXUED, Vendor is unable
to demonstrate to TXUED’s satisfaction that Vendor is able to perform in
accordance with TXUED’s requirements or (5) that Vendor refuses, for whatever
reason, to provide to TXUED or any Eligible Recipient (including any other
Services that are related to or are a necessary part of the Services that Vendor
refuses to provide) and (ii) TXUED shall be required to obtain from Vendor any
Services in respect of any assets acquired by TXUED on or after the Master
Agreement Effective Date (except for any assets acquired by TXUED after the
Master Agreement Effective Date by way of merger or consolidation or through the
acquisition of all or substantially all of the shares or assets of any Entity as
a going concern, provided that the foregoing exception shall not limit the terms
of any other agreements to which TXUED or any of TXUED’s Affiliates are a party
to with Vendor or any of Vendor’s Affiliates). Nothing in this Agreement shall
be construed or interpreted as (y) a requirements contract or, except as set
forth in the immediately preceding sentence, creating any exclusive relationship
or (z) preventing TXUED obtaining from third parties (each, a “TXUED Third Party
Contractor”), or providing to itself, any other services, functions or
responsibilities (including any New Services), except as set forth in the
immediately preceding sentence. Except as specifically provided in this
Agreement, nothing in this Agreement shall be construed or interpreted as
limiting TXUED’s right or ability to add or delete Eligible Recipients. Nothing
in this Agreement shall be construed or interpreted as limiting TXUED’s right or
ability to increase or decrease its demand for Services. To the extent TXUED
adds or deletes Eligible Recipients or increases or decreases its demand for
Services, the Charges shall be adjusted in accordance with Exhibit 11.

 
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(b)
Vendor Cooperation. Vendor shall fully cooperate with and work in good faith
with TXUED and TXUED Third Party Contractors as described in this Agreement or
as reasonably requested by TXUED in a manner consistent with this Agreement.

 
4.4
Employee Transfers. The transitioning of TXUED’s employees to Vendor under or in
connection with a Services Agreement or a New Service, if any, shall be effected
in accordance with the terms and conditions set forth in Exhibit 2.

 
4.5
Governance. The Parties shall comply with the governance and account management
provisions set forth in Exhibit 8.

 
5.
RESERVED

 
6.
FACILITIES, SOFTWARE, EQUIPMENT, CONTRACTS AND ASSETS ASSOCIATED WITH THE
PROVISION OF SERVICES

 
6.1
Service Facilities.

 

 
(a)
Service Facilities. The Services shall be provided at or from (i) the TXUED
Facilities, (ii) the Vendor Facilities or (iii) any other service location
requested by Vendor and approved by TXUED. Vendor shall be financially
responsible for all additional costs, taxes or expenses related to or resulting
from any Vendor-initiated relocation to a new or different service location,
including any reasonable costs or expenses directly incurred (including internal
costs) by TXUED as a result of such relocation.

 

 
(b)
TXUED Facilities. Commencing on the applicable Services Agreement Effective Date
and continuing for so long as Vendor requires the same for the performance of
the Services, TXUED shall provide to Vendor the use (in accordance with TXUED’s
corporate policies) of the space in the TXUED Facilities (as designated by
TXUED) that Vendor may require in connection with the performance of the
Services and not to exceed the space described in Schedule O.1 to the applicable
Services Agreement.  Vendor shall be financially responsible for providing all
other facilities needed by Vendor or Vendor Personnel (including Transitioned
Employees) to provide the Services. Except as otherwise approved by TXUED, TXUED
owned or leased assets provided for the use of Vendor under this Agreement shall
remain located at TXUED Facilities to the extent located at TXUED Facilities
prior to the applicable Services Agreement Effective Date. In addition, all
improvements or modifications to TXUED Facilities requested by Vendor shall be
(i) subject to review and approval in advance by TXUED and (ii) performed by or
through TXUED. Vendor shall reimburse TXUED for the actual direct reasonable
costs and expenses incurred in connection with such modifications or
improvements. EXCEPT AS SET FORTH HEREIN, THE TXUED FACILITIES ARE PROVIDED BY
TXUED TO VENDOR ON AN AS-IS, WHERE-IS BASIS. TXUED EXPRESSLY DISCLAIMS ANY
WARRANTIES, EXPRESS OR IMPLIED, AS TO THE TXUED FACILITIES OR, EXCEPT AS SET
FORTH HEREIN, QUIET ENJOYMENT BY VENDOR.

 
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(c)
Physical Security. TXUED is responsible for the physical security of the TXUED
Facilities; provided, that Vendor shall be responsible for the physical security
and safety, physical access and control of the buildings or areas over which
Vendor has exclusive control and Vendor shall not permit any person to have
access to, or control of, any such area unless such access or control is
permitted in accordance with control procedures approved by TXUED or any higher
standard agreed to by TXUED and Vendor. Vendor shall be solely responsible for
compliance by Vendor Personnel with such control procedures, including obtaining
advance approval from TXUED to the extent required.

 

 
(d)
Use of TXUED Facilities.

 

 
(i)
Unless otherwise agreed by the Parties, Vendor shall not have the right to use
the TXUED Facilities to provide services to third parties.

 

 
(ii)
TXUED reserves the right to relocate any TXUED Facility from which the Services
are then being provided by Vendor to another facility or geographic location
upon one hundred twenty (120) days prior written notice to Vendor. TXUED shall
be financially responsible for all additional costs, taxes or expenses related
to or resulting from any TXUED initiated relocation to a new or different
service location, including any reasonable costs or expenses directly incurred
by Vendor as a result of such relocation. Vendor will not be deemed to be in
breach of this Agreement, including a breach of the Service Levels, to the
extent that any such TXUED-initiated relocation prevents or delays Vendor
Personnel from performing Vendor’s obligations under this Agreement.

 

 
(iii)
TXUED also reserves the right to direct Vendor to cease using all or part of the
space in any TXUED Facility upon one hundred twenty (120) days prior written
notice. In such event, TXUED shall be financially responsible for all additional
costs, taxes or expenses related to or resulting from any such direction,
including any reasonable direct costs and expenses incurred by Vendor in leasing
substitute space, provided that such relocation is not contemplated by this
Agreement. Vendor will not be deemed to be in breach of this Agreement,
including a breach of the Service Levels, to the extent that any such direction
prevents or delays Vendor Personnel from performing Vendor’s obligations under
this Agreement.

 
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(e)
Conditions for Return. When the TXUED Facilities are no longer to be used by
Vendor as contemplated by this Section or are otherwise no longer being used by
Vendor to perform the Services, Vendor shall provide ninety (90) days’ prior
notice to TXUED and at the end of such ninety (90) days shall vacate and return
such TXUED Facilities (including any improvements to such facilities made by or
at the request of Vendor) to TXUED in substantially the same condition as when
such facilities were first provided to Vendor, subject to reasonable wear and
tear.

 

 
(f)
No Violation of Laws. Vendor shall (i) treat and use the TXUED Facilities in a
reasonable manner and (ii) not commit, and shall use all reasonable efforts to
ensure that no business visitor or invitee of Vendor commits, any act in
violation of any Laws in such Vendor occupied TXUED Facility or any act in
violation of TXUED’s insurance policies or in breach of TXUED’s obligations
under the applicable real estate leases in such Vendor occupied TXUED Facilities
(in each case, to the extent Vendor has received prior notice of such insurance
policies or real estate leases).

 

 
(g)
Costs and Expenses. Both Parties agree to use commercially reasonable efforts to
minimize the costs and expenses associated with any relocation provided for in
this Section 6.1.

 
6.2
Use of Vendor Facilities.

 

 
(a)
Vendor Facilities. At TXUED’s request, Vendor shall provide TXUED with
reasonable use of and access to Vendor Facilities to the extent required by
TXUED for purposes relating to the Services and such other purposes as agreed by
Vendor (provided that such use shall not unreasonably interfere with Vendor’s
provision of the Services), including permitting TXUED to locate such numbers of
TXUED Personnel as were historically located in any such Vendor Facilities that
were acquired or leased from TXUED, less the number of Transitioned Employees
historically located at such facility.  At TXUED’s request, Vendor shall also
permit TXUED to locate at such Vendor Facilities any TXUED owned or leased
equipment (including SCADA/communication equipment) that was historically
located in such Vendor Facilities and shall permit TXUED Personnel to access,
use, maintain, replace and remove such equipment to the extent required by
TXUED. Vendor warrants that Vendor shall not interfere with TXUED’s quiet
enjoyment of the Vendor Facilities. TXUED shall comply with Vendor’s policies,
rules and regulations applicable to Vendor’s Facilities (including with respect
to security, confidentiality and regulatory issues) of which TXUED has been
provided prior notice. Any improvements or modifications to Vendor Facilities
requested by TXUED shall be (i) subject to review and approval in advance by
Vendor and (ii) performed by or through Vendor. TXUED shall reimburse Vendor for
the actual direct reasonable costs and expenses incurred in connection with such
modifications or improvements. EXCEPT AS SET FORTH HEREIN, THE VENDOR FACILITIES
ARE PROVIDED BY VENDOR TO TXUED ON AN AS-IS, WHERE-IS BASIS. VENDOR EXPRESSLY
DISCLAIMS ANY WARRANTIES, EXPRESS OR IMPLIED, AS TO THE VENDOR FACILITIES OR,
EXCEPT AS SET FORTH HEREIN, QUIET ENJOYMENT BY TXUED.

 
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(b)
Physical Security. Vendor is responsible for the physical security of the Vendor
Facilities; provided, that TXUED shall be responsible for the physical security
and safety, physical access and control of the buildings or areas over which
TXUED has exclusive control and TXUED shall not permit any person to have access
to, or control of, any such area unless such access or control is permitted in
accordance with control procedures approved by Vendor or any higher standard
agreed to by TXUED and Vendor. TXUED shall be solely responsible for compliance
by TXUED Personnel with such control procedures, including obtaining advance
approval from Vendor to the extent required.

 

 
(c)
Conditions for Return. When TXUED no longer requires the use of any Vendor
Facilities, TXUED shall provide ninety (90) days’ prior notice to Vendor and at
the end of such ninety (90) days shall vacate and return such Vendor Facilities
(including any improvements to such facilities made by or at the request of
TXUED) to Vendor in substantially the same condition as when such facilities
were first provided to TXUED, subject to reasonable wear and tear.

 

 
(d)
No Violation of Laws. TXUED shall (i) treat and use the Vendor Facilities in a
reasonable manner and (ii) not commit, and shall use all reasonable efforts to
ensure that no business visitor or invitee of TXUED commits, any act in
violation of any Laws in such TXUED occupied Vendor Facility or any act in
violation of Vendor’s insurance policies or in breach of Vendor’s obligations
under the applicable real estate leases in such TXUED occupied Vendor Facilities
(in each case, to the extent TXUED has received prior notice of such insurance
policies or real estate leases).

 
6.3
TXUED Rules / Employee Safety.

 

 
(a)
TXUED Rules and Compliance. In performing the Services and using the TXUED
Facilities, Vendor shall observe and comply with all lawful TXUED policies,
rules and regulations applicable to TXUED Facilities or the provision of the
Services, including those set forth on Schedule E.3 to the applicable Services
Agreement as of the Master Agreement Effective Date (collectively, “TXUED
Rules”); provided that Vendor will not be deemed to be in breach of this
Agreement to the extent that any TXUED Rules prevent Vendor Personnel from
performing Vendor’s obligations under this Agreement. Vendor shall be
responsible for the promulgation and distribution of TXUED Rules to Vendor
Personnel as and to the extent necessary and appropriate. Additions or
modifications to the TXUED Rules will be communicated by TXUED to Vendor or
Vendor Personnel prior to the effective date of such addition or modification.
Vendor and Vendor Personnel shall observe and comply with such additional or
modified TXUED Rules; provided that any Material Change resulting from additions
or modifications to the TXUED Rules (whether individually or in the aggregate
with all prior additions or modifications) since January 1, 2005 shall be
addressed through the Change Control Process. Where applicable, in connection
with Vendor’s observing and complying with those TXUED Rules related to
TXUED’s obligation to comply with Affiliate Standards of Conduct  requirements
under applicable Law, including those contained in Public Utility Commission of
Texas’ Substantive Rules 25.84, 25.272 and 25.273 (“Affiliate Standards”),
Vendor shall develop and timely implement a plan approved by TXUED’s Compliance
Director, or other designee, to assist TXUED in complying with the applicable
Affiliate Standards.  The plan will, at a minimum, include the following
elements:  management oversight and responsibility, procedures and rules,
employee training and communications, response to employee questions and
concerns, monitoring, auditing, evaluating compliance, enforcement and
discipline, response to alleged violations, complaints, requests for information
and documentation of compliance efforts.  The plan procedures and rules shall,
among other things, implement safeguards that:  protect the confidentiality of
TXUED’s customer information, including protecting against improper disclosure
to TXUED’s Affiliates; protect TXUED’s Proprietary Information from improper
disclosure to TXUED’s Affiliates; and ensure that all charges are properly
allocated among TXUED and TXUED’s Affiliates.  Vendor shall timely report to
TXUED any alleged Affiliate Standards violation and shall cooperate in
investigating and responding to an alleged Affiliate Standards violation.  TXUED
may audit for Vendor compliance consistent with Section 8.4.

 
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(b)
TXUED Facility Safety and Health Compliance. Vendor and Vendor Personnel shall
familiarize themselves with the premises and operations at each TXUED Facility
and TXUED Site and the TXUED Rules applicable to each such TXUED Facility and
TXUED Site. Vendor and Vendor Personnel shall observe and comply with all Laws
applicable to each TXUED Facility and TXUED Site or the provision of the
Services, including environmental Laws and Laws regarding occupational health
and safety. Vendor shall be responsible for the compliance of Resources and
Services with such Laws and shall be responsible for any acts or omissions of
Vendor Personnel in contravention of such Laws. Notwithstanding the foregoing,
Vendor will not be responsible for compliance with Laws by TXUED or TXUED
Personnel. Each Party shall take precautions to avoid injury, property damage,
spills or emissions of hazardous substances, materials or waste and other
dangers to persons, property or the environment. To the extent required by TXUED
as communicated to Vendor, Vendor Personnel shall receive TXUED standard
training prior to entering certain TXUED Facilities and TXUED Sites.

 

 
(c)
Vendor Facility Safety and Health Compliance. TXUED and TXUED Personnel shall
familiarize themselves with the premises and operations at each Vendor Facility
and Vendor site and the Vendor rules applicable to each such Vendor Facility and
Vendor site. TXUED and TXUED Personnel shall observe and comply with all Laws
applicable to each Vendor Facility and Vendor site or the provision of the
Services, including environmental Laws and Laws regarding occupational health
and safety. TXUED shall be responsible for any acts or omissions of TXUED
Personnel in contravention of such Laws. Notwithstanding the foregoing, TXUED
will not be responsible for compliance with Laws by Vendor or Vendor Personnel.
Each Party shall take precautions to avoid injury, property damage, spills or
emissions of hazardous substances, materials or waste and other dangers to
persons, property or the environment. To the extent required by Vendor as
communicated to TXUED, TXUED Personnel shall receive Vendor standard training
prior to entering certain Vendor Facilities and Vendor sites.

 
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6.4
Notice of Defaults. Each Party shall promptly inform the other Party in writing
of any material breach of, or misuse or fraud in connection with, any Third
Party Contract (including any equipment lease) used in connection with the
Services of which it becomes aware and shall cooperate with the other Party to
prevent or stay any such breach, misuse or fraud.

 
7.
SERVICE LEVELS

 
7.1
General. Vendor shall perform the Services so as to meet or exceed the
applicable Service Levels. Vendor shall perform the Services in accordance with
this Agreement (including the Service Levels) and with promptness and diligence,
and in a professional and workmanlike manner.

 
7.2
Service Level Credits. Vendor recognizes that TXUED is paying Vendor to deliver
the Services at specified Service Levels. If Vendor fails to meet such Service
Levels, then Vendor shall pay or credit, in accordance with Schedule G to the
applicable Services Agreement, to TXUED the performance credits specified in
Schedule G to the applicable Services Agreement (“Service Level Credits”) in
recognition of the diminished value of the Services resulting from Vendor’s
failure to meet the agreed upon level of performance, and not as a penalty.
Under no circumstances shall the imposition of Service Level Credits be
construed as TXUED’s sole or exclusive remedy for any failure to meet the
Service Levels; provided, however, that any Service Level Credits received by
TXUED shall be offset against the amount of damages (if any) received by TXUED
from Vendor as a result of the underlying event giving rise to the Service Level
Credit. For the avoidance of doubt, Vendor’s failure to perform any Services so
as to meet or exceed their applicable Service Levels shall not in and of itself
constitute an inference of Vendor’s material breach of this Agreement unless
otherwise provided under applicable Law.

 
7.3
Problem Analysis. If Vendor fails in any material respect, or numerous
immaterial respects which collectively are material, to provide Services in
accordance with this Agreement and such failure has a material adverse impact on
the business or operations of TXUED as reasonably determined by TXUED consistent
with TXUED’s historical practices, then upon TXUED’s request Vendor shall (after
restoring Service or otherwise resolving any immediate problem) (i) promptly
investigate and report on the causes of the problem, (ii) provide a Root Cause
Analysis of such failure as soon as practicable at a level of detail
commensurate with the impact of such failure taking into account the impact of
the failure and consistent with TXUED’s historical practices, (iii) implement
remedial action and begin complying with this Agreement as soon as practicable,
(iv) advise TXUED of the status of remedial efforts being undertaken with
respect to such problem, and (v) provide TXUED reasonable evidence that the
causes of such problem have been or will be corrected.

 
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7.4
Continuous Improvement Reviews. The Parties agree to implement the continuous
improvement method set forth in Schedule G to each Services Agreement.

 
7.5
Measurement and Monitoring. On or before the applicable Services Agreement
Commencement Date or, if relevant data is not currently tracked by TXUED, as
soon as reasonably practicable thereafter and in any event within one hundred
twenty (120) days after the applicable Services Agreement Effective Date (or, if
earlier, prior to the date Vendor is required to meet the applicable Service
Level as specified in Schedule G to the applicable Services Agreement), Vendor
shall implement measurement and monitoring tools and metrics, as well as
standard reporting procedures in accordance with Section 8.2, all as approved by
TXUED, to measure Vendor’s performance of the Services against the applicable
Service Levels and provide TXUED with reports in a format and at a level of
detail sufficient to enable TXUED to easily track and verify Vendor’s compliance
with the Service Levels. Vendor shall make such Service Level reports and
Service Level data available to TXUED, as well as problem management data and
other data regarding the status of service problems, service requests and user
inquiries, using performance “dashboard” Applications or other Software
providing the same or substantially similar functionality.

 
7.6
Notice of Adverse Impact. If Vendor becomes aware of any failure by Vendor that
could reasonably be expected to have a material adverse effect on the Services,
then Vendor shall promptly inform TXUED in writing of such situation and the
impact or expected impact. Vendor shall as soon as practicable meet with TXUED
to formulate an action plan to minimize or eliminate the impact of such
situation.

 
7.7
Key Vendor Personnel.

 

 
(a)
Approval of Key Vendor Personnel.

 

 
(i)
Before assigning an individual to act as one of the Key Vendor Personnel, other
than those listed on Schedule C to the applicable Services Agreement, whether as
an initial assignment or a subsequent assignment, Vendor shall (1) notify TXUED
of the proposed assignment, (2) introduce the individual to appropriate TXUED
representatives, (3) provide reasonable opportunity for TXUED representatives to
interview the individual and (4) provide TXUED with a résumé and such other
information about the individual as TXUED may reasonably request and as
permitted by applicable Law and Vendor’s internal policies consistently applied.
Within five (5) days of its receipt of the information described in the
immediately preceding sentence, TXUED will notify Vendor as to whether it has
any objection to the proposed assignment (and any failure of TXUED to provide
such notice in the time required will be deemed by TXUED to be an acceptance of
such proposed assignment). If TXUED in good faith reasonably and lawfully
objects to the proposed assignment, the Parties shall attempt to resolve TXUED’s
concerns on a mutually agreeable basis. If the Parties have not been able to
resolve TXUED’s concerns within five (5) days of TXUED communicating its
concerns, Vendor shall not assign the individual to that position and shall
propose to TXUED the assignment of another individual of suitable ability and
qualifications.

 
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(ii)
With regard to each Services Agreement, within thirty (30) days after the
applicable Services Agreement Effective Date, Vendor shall identify and obtain
TXUED’s approval of all Key Vendor Personnel.

 

 
(iii)
TXUED may change the positions designated as Key Vendor Personnel with Vendor’s
approval, which shall not be unreasonably withheld; provided that TXUED shall be
financially responsible for all additional costs, taxes or expenses related to
or resulting from any such TXUED requested change.

 

 
(iv)
Except as otherwise agreed by the TXUED Account Executive and the Vendor Account
Executive, TXUED may identify up to five (5) positions within Vendor’s
organization as Key Vendor Personnel positions on Schedule C to the applicable
Services Agreement and identify the Vendor Personnel that shall fill each such
position; provided that TXUED may not identify the chief executive officer of
Vendor or any of his or her direct reports as Key Vendor Personnel or Key Vendor
Personnel positions.

 

 
(b)
Continuity of Key Vendor Personnel. Subject to the remainder of this Subsection
(b), Vendor shall cause each of the Key Vendor Personnel to devote full time and
effort to the provision of Services for the period specified in Schedule C to
the applicable Services Agreement from the date he or she assumes the position
in question. Vendor shall not transfer, reassign or remove any Key Vendor
Personnel (except as a result of voluntary resignation, involuntary termination
for cause, illness, disability or death) or announce its intention to do so
during the specified period, subject to the following procedures. If Vendor
proposes to reassign any Key Vendor Personnel, Vendor shall (i) notify TXUED of
the proposed reassignment, (ii) introduce the proposed replacement to
appropriate TXUED representatives, (iii) provide reasonable opportunity for
TXUED representatives to interview the proposed replacement and (iv) provide
TXUED with a résumé and such other information about the proposed replacement as
TXUED may reasonably request and as permitted by applicable Law and Vendor’s
internal policies consistently applied. Within five (5) days of its receipt of
the information described in the immediately preceding sentence, TXUED will
notify Vendor as to whether it has any objection to the proposed reassignment
and replacement (and any failure of TXUED to provide such notice in the time
required will be deemed by TXUED to be an acceptance of such proposed
reassignment and replacement). If TXUED in good faith reasonably and lawfully
objects to the proposed reassignment and replacement, Vendor shall not assign
the proposed replacement to that position and shall propose to TXUED the
assignment of another individual of suitable ability and qualifications. In the
event of the voluntary resignation, involuntary termination for cause, illness,
disability or death of any Key Vendor Personnel during or after the specified
period, Vendor shall (i) give TXUED as much notice as reasonably practicable of
such development and (ii) identify and obtain TXUED’s approval of a suitable
replacement as soon as is reasonably practicable in accordance with
Section 7.7(a)(i). In addition, even after the specified period, Vendor shall
transfer, reassign or remove Key Vendor Personnel (other than in the case of
voluntary resignation, involuntary termination for cause, illness, disability,
or death) only after (i) giving TXUED at least forty-five (45) days’ prior
notice of such action and (ii) identifying and obtaining TXUED’s approval of a
suitable replacement at least thirty (30) days prior to such transfer,
reassignment or removal in accordance with Section 7.7(a)(i). Notwithstanding
the foregoing, upon Vendor’s request and in connection with Vendor’s provision
of services to clients other than TXUED, TXUED shall allow Vendor to use agreed
upon Key Vendor Personnel in connection with the provision of services to other
clients.

 
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(c)
Retention and Succession. Vendor shall provide to TXUED, for its review and
comment, a retention strategy designed to retain Key Vendor Personnel on the
TXUED account for the period specified in Schedule C to the applicable Services
Agreement. Vendor shall also maintain active succession plans for each of the
Key Vendor Personnel positions. Vendor shall implement such retention strategies
to retain Key Vendor Personnel as Vendor deems appropriate. Upon termination or
resignation of any Key Vendor Personnel, Vendor shall provide notice to TXUED of
such termination and expeditiously identify and obtain TXUED’s approval of a
suitable replacement in accordance with Section 7.7(a)(i).

 

 
(d)
Evaluation Input. TXUED shall have an opportunity to conduct an annual review of
the Vendor Account Executive and each of the other Key Vendor Personnel and an
opportunity to provide meaningful information to Vendor with respect to TXUED’s
evaluation of the performance of the Vendor Account Executive and the other Key
Vendor Personnel and such evaluation shall be considered by Vendor in
establishing the total compensation of such individuals.

 
7.8
Vendor Account Executive. Vendor shall designate a “Vendor Account Executive”
for this TXUED engagement who, unless otherwise agreed by TXUED, shall maintain
his or her office at 500 N. Akard Street, Dallas, Texas 75201 (in a location
therein determined by TXUED). The Vendor Account Executive shall (i) be one of
the Key Vendor Personnel, (ii) be a full time employee of Vendor, (iii) devote
his or her full time and effort to managing and coordinating Vendor’s
performance under this Agreement, (iv) remain in this position for a minimum
period of two (2) years from the initial assignment (except as a result of
voluntary resignation, involuntary termination for cause, illness, disability,
or death) and (v) have authority to act on behalf of Vendor in all day-to-day
matters pertaining to this Agreement. Additionally, (i) Vendor shall be entitled
to designate additional representatives who will be authorized to make certain
decisions (e.g., regarding emergency maintenance) if the Vendor Account
Executive is not available and (ii) the Vendor Account Executive shall be
entitled to delegate any of his or her rights and obligations to one or more
designees upon prior notice to TXUED. TXUED is entitled to rely upon
instructions given by the Vendor Account Executive or any other individual
designated to have decision-making authority in accordance with this Section.

 
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7.9
Vendor Personnel Are Not TXUED Employees; Independent Relationship. Except as
otherwise expressly set forth in this Agreement, the Parties intend hereunder to
create an independent contractor relationship and nothing in this Agreement
shall operate or be construed as making TXUED and Vendor partners, joint
venturers, principals, joint employers, agents or employees of or with the
other. No officer, director, employee, agent, Affiliate, contractor or
subcontractor retained by Vendor to perform work on TXUED’s behalf hereunder
shall be deemed to be an officer, director, employee, agent, Affiliate,
contractor or subcontractor of TXUED for any purpose. Vendor, not TXUED, has the
sole right, power, authority and duty to (i) supervise, manage and direct the
activities of the Vendor Personnel and to compensate such Vendor Personnel for
any work performed by them on behalf of TXUED pursuant to this Agreement and
(ii) contract, direct, procure, perform or cause to be performed all work to be
performed by Vendor under this Agreement. Vendor, and not TXUED, shall be
responsible for all acts and omissions of Vendor Personnel (unless such acts or
omissions were at the direction of TXUED to Vendor).

 
7.10
Replacement, Qualifications, and Retention of Vendor Personnel.

 

 
(a)
Requested Replacement. In the event that TXUED determines lawfully and in good
faith that any individual Vendor Personnel (including Key Vendor Personnel) has
violated any TXUED Rule or TXUED Standard or any Law, then TXUED shall give
Vendor notice to that effect requesting that such Vendor Personnel be replaced
and Vendor shall immediately suspend such individual’s performance of the
Services and access to TXUED Facilities pending completion of the process set
forth in this Section 7.10(a). Vendor shall have five (5) days following such
notice in which to investigate the matters forming the basis of such request,
correct any deficient performance and provide TXUED with assurances that such
deficient performance shall not recur. If, following such five (5) day period,
TXUED is not reasonably satisfied with the results of Vendor’s efforts to
correct the deficient performance and/or to ensure its non-recurrence, Vendor
shall, as soon as reasonably practicable, remove and replace such Vendor
Personnel with an individual of suitable ability and qualifications. Nothing in
this provision shall operate or be construed to limit Vendor’s responsibility
for the acts or omission of the Vendor Personnel.

 

 
(b)
Turnover Rate and Data. Vendor shall notify TXUED at least thirty (30) days
prior to any planned reduction in force (including layoffs and mass
terminations) and such notice shall include the number of employees to be
severed and the classification and work location of each such employee.
Commencing on the three (3) month anniversary of the applicable Services
Agreement Commencement Date and every three (3) months thereafter, Vendor shall
report the turnover rate of Vendor Personnel (i.e., the voluntary or involuntary
cessation of employment with Vendor that is not part of any previously planned
reduction in force) (“Turnover Rate”). If TXUED reasonably determines that the
Turnover Rate of Vendor Personnel is materially adversely impacting the Services
and so notifies Vendor, Vendor shall, within five (5) days of the date of
TXUED’s notice, (i) provide TXUED with data concerning Vendor’s Turnover Rate,
(ii) provide TXUED with an accounting of the Vendor Personnel then providing the
Services at such level of detail as requested by TXUED (including indicating the
length of time each of the Vendor Personnel has been performing the Services),
(iii) meet with TXUED to discuss the reasons for the Turnover Rate and
(iv) submit a proposal for reducing the Turnover Rate. After considering TXUED's
comments, to the extent appropriate Vendor shall implement such proposal as soon
as practicable.

 
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7.11
Conduct of Vendor Personnel. While at TXUED Facilities, Vendor Personnel shall
(i) comply with the TXUED Rules as long as TXUED notifies Vendor of such TXUED
Rules reasonably in advance (subject to Section 6.3(a)), (ii) comply with
requests of TXUED personnel pertaining to personal and professional conduct,
(iii) attend standard workplace training offered by TXUED at TXUED’s request,
and (iv) otherwise conduct themselves in a professional and businesslike manner.

 
7.12
Substance Abuse. Vendor represents and warrants that it has and shall maintain
and enforce substance abuse policies, in each case in conformance with
applicable Laws, and Vendor Personnel shall be subject to such policies.

 
8.
VENDOR RESPONSIBILITIES

 
8.1
Policy and Procedures Manual. Vendor shall deliver to TXUED for its review,
comment and approval a Policy and Procedures Manual as described in the
applicable Services Agreement.

 
8.2
Reports.

 

 
(a)
General. Vendor shall provide TXUED with reports pertaining to the performance
of the Services (“Reports”) as set forth in Schedule E or Schedule R to the
applicable Services Agreement, in the format and at the frequencies provided
therein. In addition, TXUED may request, and Vendor will generate and deliver,
additional Reports at the cost and expense of TXUED. All Reports described in
Schedule E or Schedule R to the applicable Services Agreement shall be provided
to TXUED as part of the Services. The Reports described in Schedule E or
Schedule R to the applicable Services Agreement and, to the extent mutually
agreed upon, all other Reports, shall be provided to TXUED in hard copies or
electronic copies, as designated by TXUED.

 

 
(b)
Back-Up Documentation. Vendor shall provide TXUED with copies of and access to
data, documentation and other information in Vendor’s possession as may be
reasonably requested by TXUED in order to verify the accuracy of the Reports
provided by Vendor.

 
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(c)
Correction of Errors. Vendor shall promptly correct all errors or inaccuracies
in or with respect to the Reports of which it becomes aware, including the
information or data contained in such Reports; provided that errors or
inaccuracies for which TXUED is responsible shall be corrected by Vendor at
TXUED’s expense.

 
8.3
Reserved.

 
8.4
Audit Rights.

 

 
(a)
Vendor Records. Vendor shall maintain complete and accurate records of and
supporting documentation related to the Services, including for all Charges
(“Contract Records”). Vendor shall maintain such Contract Records in accordance
with generally accepted accounting principles for the applicable jurisdiction
applied on a consistent basis and in accordance with Exhibit 12. Any Material
Change resulting from additions or modifications to Exhibit 12 shall be
addressed through the Change Control Process.

 

 
(b)
Operational Audits. Vendor shall provide to TXUED (and internal and external
auditors, inspectors, governmental bodies, regulators and other representatives
that TXUED may designate) access at reasonable hours to Vendor Personnel, to the
facilities at or from which Services are or have been provided, to Contract
Records and other pertinent information, all to the extent related to the
performance of the Services and Vendor’s obligations under this Agreement. Such
access shall be provided for the purpose of performing audits and inspections of
TXUED and its businesses, including to (i) verify the integrity of TXUED Data,
(ii) examine the Systems that process, store, support and transmit that data,
(iii) examine controls (e.g., organizational controls, input/output controls,
System modification controls, processing controls, System design controls and
access controls) and security, disaster recovery and back-up practices and
procedures, (iv) examine Vendor’s performance of the Services, (v) verify
Vendor’s reported performance against this Agreement (including the applicable
Service Levels), (vi) examine Vendor’s measurement, monitoring, management and
reporting tools and (vii) enable TXUED to meet applicable legal, regulatory and
contractual requirements and installing and operating Software that assists
TXUED (and TXUED’s internal and external auditors, inspectors, governmental
bodies, regulators and other representatives) in performing its audit, in each
case to the extent affected by or applicable to the Services. Vendor shall
provide any assistance reasonably requested by TXUED or its designee(s) in
conducting any such audit, including providing electronic access to TXUED Data
and Vendor’s data that directly pertains to the Services and Vendor’s
obligations under this Agreement. If an audit reveals a material breach of this
Agreement, Vendor shall promptly reimburse TXUED for the actual cost of such
audit.

 
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(c)
Financial Audits. During the Term and for a period thereafter required by Law,
Vendor shall provide to TXUED (and internal and external auditors, inspectors,
governmental bodies, regulators and other representatives that TXUED may
designate) access at reasonable hours to Vendor Personnel and to Contract
Records required to be maintained by TXUED by Law and other pertinent
information, all to the extent related to the performance of, and the Charges
for, the Services and Vendor’s obligations under this Agreement. Such access
shall be provided for the purpose of performing audits and inspections to
(i) verify the accuracy and completeness of Contract Records, (ii) verify the
accuracy and completeness of Charges and any Pass-Through Expenses and
Out-of-Pocket Expenses and (iii) enable TXUED to meet applicable legal,
regulatory and contractual requirements, in each case to the extent affected by
or applicable to the Services and/or the Charges for such Services. Vendor shall
provide any assistance reasonably requested by TXUED or its designee(s) in
conducting any such audit. If any such audit reveals a net overcharge by Vendor,
and Vendor does not successfully dispute the amount questioned by such audit in
accordance with Article 17, Vendor shall promptly pay to TXUED the amount of
such overcharge, together with interest from the date of Vendor’s receipt of
such overcharge at the then current rate set by Citibank, N.A. as its prime
lending rate plus two (2) percent per annum. In addition, if any such audit
reveals an overcharge of more than the greater of (x) five percent (5%) and (y)
one million dollars ($1,000,000), in each case of the audited Charges in any
Charges category, Vendor shall promptly reimburse TXUED for the actual cost of
such audit.

 

 
(d)
Audit Assistance. TXUED may be subject to regulation and audit by governmental
bodies, standards organizations, other regulatory authorities, customers or
other parties to contracts with TXUED under applicable Laws, rules, regulations,
standards and contract provisions. If a governmental body, standards
organizations, other regulatory authority or customer or other party to a
contract with TXUED exercises its right to examine or audit TXUED pursuant to
such Laws, rules, regulations, standards or contract provisions, Vendor shall
provide reasonable assistance requested by TXUED in responding to such audits or
requests for information.

 

 
(e)
General Procedures.

 

 
(i)
Except as otherwise required under applicable Law, TXUED may perform audits and
inspections in accordance with this Section upon reasonable notice to Vendor
during normal business hours, for a reasonable duration. Subject to the
limitations contained elsewhere in this Section 8.4, TXUED may perform audits on
each of the various subject areas described in the TXUED audit plan then
in-effect at the time of such audit (each, an “Audit Area”), provided that an
Audit Area may not be audited more than once during any twelve (12) month
period, unless more frequent audits are required by any Laws applicable to
TXUED. TXUED has the right to amend any such audit plan at any time, provided
that such amended audit plan must be provided to Vendor and all previously
audited Audit Areas will remain subject to the foregoing limitation on the
number of audits per twelve (12) month period. Notwithstanding the foregoing,
if, as a result of such an audit, the Parties mutually agree that Vendor should
implement material new, additional or stronger controls, or if such audit
reveals a material failure of compliance with this Agreement then TXUED shall be
entitled to conduct a follow-up audit within six (6) months. The costs and
expenses to perform audits under this Section shall be borne by TXUED. Vendor
will assist TXUED, when necessary, in TXUED’s performance of any audit pursuant
to this Section 8.4 as part of Vendor’s normal course of business and at no
additional charge to TXUED. Notwithstanding the remaining provisions of this
clause (i), TXUED may perform any number of inspections of (A) Vendor’s means
and methods of performing Services in the field and (B) any Contract Records
that are reasonably related to such Services.

 
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(ii)
Notwithstanding the intended breadth of TXUED’s audit rights, TXUED shall not be
given access to (A) the proprietary information of other Vendor customers or
Vendor not related to the provision of the Services, (B) Vendor locations that
are not related to TXUED or the Services, (C) Vendor’s internal costs, except to
the extent such costs are the basis upon which TXUED is charged and/or are
necessary to calculate the applicable Charges or (D) any information and data
that constitutes attorney work product or privileged information. Reviews of
costs to which access is permitted in (C) may include access to timekeeping
systems, amounts charged Vendor by Subcontractors and applicable payroll reviews
as it relates to work performed by Vendor on a Variable Pricing basis as set
forth in Exhibit 11.

 

 
(iii)
In performing audits, TXUED shall use all reasonable efforts to avoid
unnecessary disruption of Vendor’s operations and unnecessary interference with
Vendor’s ability to perform the Services.

 

 
(iv)
Following any audit, TXUED shall conduct (in the case of an internal audit), or
request its external auditors or examiners to conduct, an exit conference with
Vendor to obtain factual concurrence with issues identified in the review.

 

 
(v)
TXUED (and internal and external auditors, inspectors, governmental bodies,
regulators and other representatives that TXUED may designate) shall be given a
reasonably secure workspace in which to perform an audit, plus reasonable access
to photocopiers, telephones, facsimile machines, computer hook-ups, and any
other facilities or equipment needed for the performance of the audit.

 

 
(f)
Vendor Internal Audit. If Vendor determines as a result of its own internal
audit that it has overcharged TXUED, then Vendor shall promptly pay to TXUED the
amount of such overcharge, together with interest from the date of Vendor’s
receipt of such overcharge at the rate of two (2) percent per annum.

 
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(g)
Vendor Response. Vendor and TXUED shall meet to review each audit report
promptly after the issuance thereof. Vendor will respond to each audit report in
writing within sixty (60) days from receipt of such report. Vendor and TXUED
shall develop and agree upon an action plan to promptly address and resolve any
reasonable identified deficiencies, concerns and/or recommendations in such
audit report and, following approval of such plan by TXUED, Vendor shall
undertake remedial action in accordance with such action plan and the dates
specified therein.

 

 
(h)
Vendor Response to Non-TXUED Audits. If an audit by a governmental body,
standards organization or regulatory authority having jurisdiction over TXUED or
Vendor results in a finding that Vendor is not in compliance with any generally
accepted accounting principle or other audit requirement or any Law or standard
relating to the performance of its obligations under this Agreement, Vendor
shall, at its own expense and within the time period specified by such auditor,
address and resolve the deficiency(ies) identified by such governmental body,
standards organization or regulatory authority.

 

 
(i)
SAS 70 Audit. Vendor shall conduct an audit on controls placed in operation and
tests of operating effectiveness in accordance with the American Institute of
Certified Public Accountants Statement on Auditing Standards (SAS) 70 (SAS 70
Type 2 report, not Type 1 report), or an equivalent audit as agreed by the
Parties (the “SAS 70 Audit”), with respect to all Vendor Facilities at or from
which the Services are provided. The SAS 70 Audit shall be conducted by an
independent auditor of national recognition and standing. Such SAS 70 Audit
shall be conducted annually or, if provided by Law, less frequently as may be
commercially reasonable. Vendor shall permit TXUED to participate in the
planning of each such SAS 70 Audit, shall confer with TXUED as to the scope,
timing of and manner that each such SAS 70 Audit shall be conducted and audit
findings documented and shall accommodate TXUED’s requirements and concerns to
the extent practicable. Except to the extent otherwise expressly agreed to by
TXUED, Vendor shall arrange for the completion of each SAS 70 Audit such that
(a) the resulting SAS 70 Audit report (the “SAS 70 Report”) is completed and
provided to TXUED and, if so requested by TXUED, its independent auditors, at
least within sixty (60) days following the “as of” date but in no event less
than sixty (60) days prior to the end of TXUED’s fiscal year end, (b) the SAS 70
Report covers at least a one hundred eighty (180) day period and (c) the “as of”
date is no more than six (6) months prior to TXUED’s fiscal year end. Vendor
shall respond to such SAS 70 Report in accordance with Section 8.4(g). Vendor
shall be obligated to provide a SAS 70 Report applicable to any fiscal year of
TXUED during which this Agreement expires or is terminated; provided, however,
that such SAS 70 Report need only cover that portion of such fiscal year
preceding expiration or termination of this Agreement. TXUED shall reimburse
Vendor for the reasonable actual incremental internal costs, and amounts that
Vendor pays its independent auditor, in order to conduct any SAS 70 Audit
pursuant to this Subsection.

 
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8.5
Agency and Disbursements.

 

 
(a)
Limited Agency. TXUED hereby appoints Vendor as its limited agent during the
Term solely for the purposes of managing and administering the Managed Third
Party Agreements. TXUED shall provide, on a timely basis, such affirmation of
Vendor’s authority to such lessors, licensors, suppliers and other third parties
as Vendor may reasonably request.

 

 
(b)
Reimbursement for Substitute Payment. If either Party in error pays to a third
party an amount for which the other Party is responsible under this Agreement,
the Party that is responsible for such payment shall promptly reimburse the
paying Party for such amount.

 

 
(c)
Notice of Decommissioning. Vendor agrees to notify TXUED promptly if and to the
extent any TXUED owned equipment or TXUED leased equipment will no longer be
used to provide the Services. The notification will include the identification
of such equipment and the date it will no longer be needed by Vendor, along with
the reason for decommissioning. Upon receipt of any such notice, TXUED may, in
its sole discretion, terminate the equipment lease for such leased equipment as
of the date specified in such notice and sell or otherwise dispose of or
redeploy such TXUED owned equipment as of the date specified in such notice.
Upon Vendor ceasing to use any such equipment (or, in the case of leased
equipment, upon the last day TXUED is obligated to make such leased equipment
available to Vendor, if earlier), Vendor shall return the same to TXUED and/or
its designee(s) in condition at least as good as the condition thereof on the
applicable Services Agreement Commencement Date, ordinary wear and tear
excepted, provided that such equipment was under the control of Vendor.

 
8.6
Subcontractors.

 

 
(a)
Use of Subcontractors. Except to the extent set forth in subclauses (i) through
(iv) of this Subsection, Vendor shall not subcontract any of its
responsibilities without TXUED’s prior approval. TXUED agrees that Vendor may
subcontract in the following instances without TXUED’s approval: (i) to the
Subcontractors listed on Schedule D to the applicable Services Agreement (which
Schedule the Parties acknowledge may be updated from time to time upon the
agreement of the Parties); (ii) for any services that are in support of Vendor’s
provision of the Services (e.g., janitorial services or catering services) from
a service location; (iii) subcontracts pursuant to which Vendor intends to pay
to the Subcontractor less than one hundred thousand dollars ($100,000) during
any Contract Year; or (iv) any Entity that is a wholly-owned subsidiary of
Vendor (any of the foregoing, a “Permitted Subcontract”). If, however, TXUED
expresses dissatisfaction with the services of a Permitted Subcontractor, Vendor
shall work in good faith to resolve TXUED’s concerns on a mutually acceptable
basis. Prior to entering into a subcontract (other than a Permitted Subcontract)
with any person or Entity to provide or perform any part of the Services, Vendor
shall (y) give TXUED reasonable prior notice specifying the components of the
Services affected, the scope of the proposed subcontract, the identity and
qualifications of the proposed Subcontractor, and the reasons for subcontracting
the work in question and (z) obtain TXUED’s prior approval of such
Subcontractor.

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(b)
Shared Subcontractors. Notwithstanding Section 8.6(a), Vendor may, in the
ordinary course of business, subcontract with temporary personnel firms for the
provision of temporary contract labor (collectively, “Shared Subcontractors”);
provided, that such Shared Subcontractors possess the training and experience,
competence and skill to perform the work in a skilled and professional and
workmanlike manner. TXUED shall have no approval right with respect to such
Shared Subcontractors. If, however, TXUED expresses dissatisfaction with the
services of a Shared Subcontractor, Vendor shall work in good faith to resolve
TXUED’s concerns on a mutually acceptable basis.

 

 
(c)
Vendor Responsibility. For purposes of this Agreement, (i) services, functions
and responsibilities performed or provided by Subcontractors (including their
personnel) shall be deemed Services performed and provided by Vendor,
(ii) references to Vendor shall include such Subcontractors (including for
purposes of compliance with operations, policies, procedures, rules, standards
and the like of TXUED and the indemnities under this Agreement), (iii) Vendor
shall be responsible for any failure by any Subcontractor to perform in
accordance with this Agreement or to comply with any duties or obligations
imposed on Vendor under this Agreement (including the Service Levels) to the
same extent as if such failure to perform or comply was committed by Vendor or
Vendor employees and (iv) Vendor shall be responsible for the performance of all
Subcontractors providing any of the Services. Vendor shall be TXUED’s sole point
of contact regarding the Services.

 

 
(d)
Audit Rights. Vendor shall obtain from all Subcontractors that are Affiliates of
Vendor, and shall use commercially reasonable efforts to obtain from all other
Subcontractors, sufficient rights to enable TXUED to exercise TXUED’s audit
rights under Section 8.4 in respect of each Subcontractor.

 
8.7
Requirement of Writing. To the extent TXUED is required under this Agreement to
obtain Vendor’s approval, consent or agreement, such approval, consent or
agreement must be in writing and must be signed by or directly transmitted by
electronic mail from the Vendor Account Executive or by the applicable
individual to whom authority has been delegated in accordance with Section 7.8.
Notwithstanding the preceding sentence, the Vendor Account Executive may agree
in advance in writing that as to certain specific matters, oral approval,
consent or agreement will be sufficient.

 
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8.8
Seconded TXUED Personnel. In order to (a) facilitate an effective relationship
between the Parties, (b) provide for training and development of TXUED Personnel
(including allowing TXUED Personnel to refresh skills that may relate to work
performed by TXUED, Vendor or TXUED Third Party Contractors), (c) assist Vendor
with Vendor’s performance of, and to perform, the Services and (d) perform such
other services, functions and responsibilities as the Parties may mutually
agree, TXUED may periodically second TXUED Personnel to Vendor (the “Seconded
TXUED Personnel”), provided that the secondment of any TXUED Personnel does not
unreasonably interfere with Vendor’s performance of the Services. Vendor shall
not have any authority to hire, fire, impose discipline or otherwise to take
personnel-related actions with respect to the Seconded TXUED Personnel. The
Parties agree that no employer and employee relationship is to be created
between Vendor and the Seconded TXUED Personnel, and further that no employee
benefits available to employees of Vendor shall accrue to the Seconded TXUED
Personnel. Vendor will provide TXUED management personnel with direction
regarding the activities of the Seconded TXUED Personnel in accordance with
TXUED’s requirements and in consultation with the TXUED Account Executive or
his/her designee. With respect to the Seconded TXUED Personnel, Vendor shall not
be responsible for implementing and administering TXUED human resources
policies, practices or procedures, including those addressing hiring,
compensation, promotions, transfers, terminations, employment related complaints
general career development and performance management. TXUED shall continue to
be financially responsible for the compensation and employee benefits of the
Seconded TXUED Personnel (collectively, “Employment Costs”), provided that prior
to any Seconded TXUED Personnel assisting Vendor with Vendor’s performance of,
or performing, any services, functions or responsibilities (including the
Services) that benefit Vendor, the Parties shall agree on the amount of
Employment Costs for which Vendor shall reimburse TXUED with respect to such
Seconded TXUED Personnel.

 
8.9
Seconded Vendor Personnel. In order to (a) facilitate an effective relationship
between the Parties, (b) provide for training and development of Vendor
employees, (c) assist TXUED with TXUED’s performance of, and to perform, TXUED’s
Retained Resources and Business Processes (as such term is defined in the Field
Services Agreement) and (d) perform such other services, functions and
responsibilities as the Parties may mutually agree, Vendor may periodically
second Vendor employees to TXUED (the “Seconded Vendor Personnel”), provided
that the secondment of any Vendor employees does not unreasonably interfere with
TXUED’s business operations. TXUED shall not have any authority to hire, fire,
impose discipline or otherwise to take personnel-related actions with respect to
the Seconded Vendor Personnel. The Parties agree that no employer and employee
relationship is to be created between TXUED and the Seconded Vendor Personnel,
and further that no employee benefits available to employees of TXUED shall
accrue to the Seconded Vendor Personnel. With respect to the Seconded Vendor
Personnel, TXUED shall not be responsible for implementing and administering
Vendor human resources policies, practices or procedures, including those
addressing hiring, compensation, promotions, transfers, terminations, employment
related complaints, or general career development and performance management.
Vendor shall continue to be financially responsible for the compensation and
employee benefits of the Seconded Vendor Personnel.

 
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9.
TXUED RESPONSIBILITIES

 
9.1
Responsibilities. In addition to TXUED’s responsibilities expressly set forth
elsewhere in this Agreement, TXUED shall be responsible for the following:

 

 
(a)
TXUED Account Executive. TXUED shall designate one (1) individual to whom all
Vendor communications concerning this Agreement shall be addressed (the “TXUED
Account Executive”), who shall have the authority to act on behalf of TXUED in
all day-to-day matters pertaining to this Agreement. TXUED may change the
designated TXUED Account Executive by providing notice to Vendor. Additionally,
(i) TXUED shall be entitled to designate additional representatives who will be
authorized to make certain decisions (e.g., regarding emergency maintenance) if
the TXUED Account Executive is not available and (ii) the TXUED Account
Executive shall be entitled to delegate any of his or her rights and obligations
to one or more designees upon prior notice to Vendor. Vendor is entitled to rely
upon instructions given by the TXUED Account Executive or any other individual
designated to have decision-making authority in accordance with this Section
9.1(a).

 

 
(b)
Cooperation. TXUED shall cooperate with Vendor by, among other things, making
available, as reasonably requested by Vendor and as otherwise required by this
Agreement, management decisions, information, approvals and acceptances so that
Vendor may accomplish its obligations and responsibilities hereunder.

 

 
(c)
Requirement of Writing. To the extent Vendor is required under this Agreement to
obtain TXUED’s approval, consent or agreement, such approval, consent or
agreement must be in writing and must be signed by, or directly transmitted by
electronic mail from, the TXUED Account Executive or the applicable individual
to whom authority has been delegated in accordance with Section 9.1(a).
Notwithstanding the preceding sentence, the TXUED Account Executive may agree in
advance in writing that as to certain specific matters oral approval, consent or
agreement will be sufficient.

 

 
(d)
SAS 70 Report. If and to the extent reasonably required by Vendor in order for
Vendor to comply with applicable Laws, then following Vendor’s request TXUED
shall provide to Vendor a copy of the relevant portions of the most recent SAS
70 Type 2 audit report received by TXUED from Capgemini Energy LP.

 
9.2
Savings Clause. Vendor’s failure to timely or otherwise perform its
responsibilities under this Agreement (including failure to meet the Service
Levels) shall be excused if and to the extent such Vendor non-performance is
directly caused by (i) TXUED’s or any TXUED Third Party Contractor’s negligence
or wrongful acts or omissions or TXUED’s or any TXUED Third Party Contractor’s
breach of or failure to timely comply with its obligations under this Agreement
(unless and to the extent that any such negligence, action or failure to act is
by any Seconded TXUED Personnel or other TXUED Personnel performing activities
under the direction or management of Vendor or Vendor Personnel), (ii) Software,
Equipment or Systems for which TXUED or TXUED Third Party Contractors have
operational responsibility or (iii) Vendor’s compliance with specific
instructions of TXUED or TXUED Third Party Contractors.  Vendor agrees to timely
notify TXUED of such event and its inability to perform under such circumstances
to the extent Vendor is aware thereof. To the extent such non-performance has
not occurred, Vendor agrees to provide TXUED with every reasonable opportunity
to correct such event and thereby avoid such Vendor non-performance. Vendor
shall use commercially reasonable efforts to perform the Services
notwithstanding such events. Any Material Change resulting from the acts,
omissions and other matters described in clauses (i) through (iii) of this
Section shall be addressed through the Change Control Process.

 
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10.
CHARGES

 
10.1
General.

 

 
(a)
Payment of Charges. In consideration of Vendor’s performance of the Services,
TXUED agrees to pay Vendor the applicable Charges set forth in Exhibit 11.

 

 
(b)
No Additional Charges. TXUED shall not pay any charges, fees or other amounts
for the Services in addition to those set forth in this Agreement. Any costs
incurred by Vendor prior to the Services Agreement Commencement Date are
included in the Charges and shall not be separately paid or reimbursed by TXUED.

 

 
(c)
Reserved.

 

 
(d)
Eligible Recipient Services. To the extent a designated Eligible Recipient will
receive less than all of the Services, TXUED shall identify in advance the
Services to be provided by Vendor to such Eligible Recipient. In the event of a
transaction described in Subsection (c) or (d) of the definition of Eligible
Recipient, TXUED may elect, on behalf of the Eligible Recipient in question,
either (i) that such Eligible Recipient shall continue to obtain some or all of
the Services subject to and in accordance with this Agreement for the remainder
of the term of the applicable Services Agreement, or (ii) that the Eligible
Recipient shall cease to receive some or all of the Services as of a specified
date, subject to its receipt of Termination Assistance Services pursuant to
Section 4.2.

 

 
(e)
Transition Charges.

 

 
(i)
Upon Vendor’s request during the Transition Period, TXUED shall cause its
Affiliate, TXU Electric Delivery Property LLC, to enter into contracts with
third parties (including, potentially, Affiliates of Vendor) that are determined
necessary by Vendor for the provision of the Transition Services; provided that:
(1) the aggregate amount of fees paid by such TXUED Affiliate under such
contracts and otherwise for Vendor’s re-branding of Resources, relocation of
employees and employee benefit plan designs, in each case prior to the Services
Agreement Commencement Date for the Field Services Agreement, shall not exceed
three million, one-hundred thousand dollars ($3,100,000) (the “Early Transition
Payments”); and (2) the aggregate amount of fees paid by such TXUED Affiliate
under such contracts for actual incremental costs and expenses that are directly
incurred by Vendor and/or such TXUED Affiliate in order to (A) integrate
Vendor’s Systems with TXUED’s Systems, (B) modify or replace Vendor’s owned or
licensed Software and (C) develop new Software, in each case as necessary to
transition the Services to Vendor and for Vendor to perform the Services, in the
aggregate, prior to the Services Agreement Commencement Date for the Field
Services Agreement shall not exceed eight million dollars ($8,000,000) (the “IT
Payments”). Vendor shall cause its Affiliate, InfrastruX Group, Inc., to provide
any reasonable cooperation and support (including with regard to negotiations)
requested by TXUED or such TXUED Affiliate in connection therewith. The Parties
shall cooperate to cause the contracts contemplated by this Section 10.1(e)(i)
to be managed and administered in a manner agreed to by the Parties.

 
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(ii)
Upon the Services Agreement Commencement Date for the Field Services Agreement,
TXUED shall pay Vendor an amount equal to four million, one-hundred thousand
dollars ($4,100,000) minus the total of all Early Transition Payments (the
“Vendor Transition Payment”) in consideration of Vendor’s cost to achieve the
Transition Services under this Agreement, including incentive payments and
severance payments made by Vendor to Transitioned Employees in order to mitigate
any negative impact (if any) of transition, relocation and/or severance upon
such personnel, Vendor’s re-branding of Resources, relocation of the Transition
Employees, and benefit plan designs.

 

 
(iii)
In addition, commencing on the Services Agreement Commencement Date, TXUED shall
reimburse Vendor for the reasonable actual incremental costs and expenses that
are directly incurred by Vendor in order to (i) integrate Vendor’s Systems with
TXUED’s Systems, (ii) modify or replace Vendor’s owned or licensed Software and
(iii) develop new Software, in each case as necessary to transition the Services
to Vendor and for Vendor to perform the Services; provided, however, that unless
otherwise agreed to by TXUED, TXUED shall not be obligated to reimburse more
than eight million dollars ($8,000,000) in the aggregate minus the total of all
IT Payments. The Parties acknowledge and agree that amounts paid to Vendor
pursuant to this Section 10.1(e) shall be earned by Vendor when so paid.

 
10.2
Pass-Through Expenses. TXUED shall pay all Pass-Through Expenses directly to the
applicable suppliers following review, validation and approval of such
Pass-Through Expenses by Vendor. Before submitting an invoice to TXUED for any
Pass-Through Expense, Vendor shall (i) review and validate the invoiced charges,
(ii) identify any errors or omissions and (iii) communicate with the applicable
supplier to correct any errors or omissions, resolve any questions or issues and
obtain any applicable credits for TXUED. Vendor shall deliver to TXUED the
original supplier invoice, together with any documentation supporting such
invoice and a statement that Vendor has reviewed and validated the invoiced
charges, within ten (10) calendar days after Vendor’s receipt thereof, or if
earlier, at least three (3) days prior to the date on which payment is due if
such invoice was received by Vendor at least ten (10) days prior to such due
date. In addition, if the supplier offers a discount for payment prior to a
specified date, Vendor shall deliver such invoice and associated documentation
to TXUED at least ten (10) days prior to such date, but no earlier than three
(3) days after Vendor’s receipt of such invoice. To the extent Vendor fails to
comply with its obligations hereunder, it shall be financially responsible for
any discounts actually lost or any late fees or interest charges actually paid
by TXUED and in addition, to the extent Vendor fails to process any invoice in
accordance with this provision, it shall be financially responsible for any
penalties associated with late payment with respect to such invoiced amounts
actually paid by TXUED, provided that in each such case TXUED notified Vendor of
the importance of processing the applicable Pass-Through Expense in a timely
manner and accordance with the underlying invoice terms.

 
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10.3
Incidental Expenses. Vendor acknowledges that, except as otherwise expressly
provided in this Agreement, all charges, fees, expenses and other amounts (in
each case whether internal or in respect of third parties) that Vendor incurs in
performing the Services and complying with this Agreement are included in the
Charges. Accordingly, such charges, fees, expenses and amounts shall not be
separately paid or reimbursed by TXUED.

 
10.4
Taxes. The Parties’ respective responsibilities for taxes arising under or in
connection with this Agreement shall be as follows:

 

 
(a)
Income Taxes. Each Party shall be responsible for its own Income Taxes.

 

 
(b)
Sales, Use and Property Taxes. Each Party shall be responsible for any sales,
lease, use, personal property, stamp, duty or other such taxes on Resources or
property it owns or leases from a third party, including any lease assigned
pursuant to this Agreement, and/or for which it is financially responsible under
this Agreement.

 

 
(c)
Taxes on Goods or Services Used by Vendor. Except to the extent included in
Pass-Through Expenses, Vendor shall be responsible for all sales, service,
value-added, lease, use, personal property, excise, consumption and other taxes
and duties, including VAT, payable by Vendor on any goods or services used or
consumed by Vendor in providing the Services (including services obtained from
Subcontractors) where the tax is imposed on Vendor’s acquisition or use of such
goods or services and the amount of tax is measured by Vendor’s cost of
acquiring or procuring such goods or services and not by TXUED’s cost of
acquiring such goods or services from Vendor.

 
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(d)
Existing Service Taxes. Except as otherwise expressly set forth in Exhibit 11,
Vendor shall be responsible for all Service Taxes in effect as of the Master
Agreement Effective Date.

 

 
(e)
Responsibility for and Notice of New Taxes. TXUED shall be responsible for any
and all new Service Taxes (including increases in existing Service Taxes) that
come into effect after January 1, 2005, and Vendor may pass-through to TXUED and
TXUED shall be responsible for the amounts of any new or increased taxes or
other charges of the types described in Sections 10.4(b) and 10.4(c) arising by
operation of a change in Law after January 1, 2005. The administration of such
matters as between the Parties shall be addressed through the Change Control
Process. Vendor shall promptly notify TXUED when it becomes aware of any new
taxes or other charges (including changes to existing taxes or charges) to be
passed through and/or collected by TXUED under this Section. Such notification
(which must be separate from the first invoice reflecting such taxes or other
charges, if applicable) shall contain a detailed explanation of such taxes or
charges, including the effective date of each new tax or charge.

 

 
(f)
Efforts to Minimize Taxes. The Parties agree to cooperate fully with each other
to enable each other to more accurately determine its own tax liability and to
minimize such liability to the extent legally permissible. Vendor’s invoices
shall separately state the Charges that are subject to taxation and the amount
of taxes included therein. Each Party will provide and make available to the
other any resale certificates, information regarding out-of-state or
out-of-country sales or use of equipment, materials, or services, and other
exemption certificates or information reasonably requested by either Party. At
TXUED’s request, Vendor shall provide TXUED with (i) written certification
signed by a senior executive of Vendor confirming that Vendor has filed all
required tax forms and returns required in connection with any Service Taxes
collected from TXUED, and has collected and remitted all applicable Service
Taxes, and (ii) such other information pertaining to applicable Taxes as TXUED
may reasonably request.

 

 
(g)
Tax Audits or Proceedings.

 

 
(i)
The provisions of this Section 10.4(g)(i) shall apply with respect to any audit,
proceeding or claim by any Tax Authority that relates to taxes assessed by such
Tax Authority for which the other Party is financially responsible and that
relates solely to such other Party and, with respect to Vendor, does not involve
claims for taxes assessed in connection with any other customer of Vendor. Each
Party shall promptly notify the other Party of, and coordinate with the other
Party, the response to and settlement of, any claim for Tax Authorities for
which the other Party is financially responsible under this Agreement. With
respect to any claim arising out of a form or return signed by a Party to this
Agreement, such Party will have the right to elect to control the response to
and settlement of the claim, but the other Party will have all rights to
participate in the responses and settlements commensurate with its potential
responsibilities or liabilities. Each Party also shall have the right to
challenge the imposition of any tax liability for which it is financially
responsible under this Agreement or, if necessary, to direct the other Party to
challenge the imposition of any such tax liability. If either Party requests the
other to challenge the imposition of any tax liability, such other Party shall
do so (unless and to the extent it assumes financial responsibility for the tax
liability in question), and the requesting Party shall reimburse the other for
all fines, penalties, interest, additions to taxes or similar liabilities
imposed in connection therewith, plus the reasonable legal, accounting and other
professional fees and expenses it incurs. Each Party shall be entitled to any
tax refunds or rebates obtained with respect to the taxes for which such Party
is financially responsible under this Agreement.

 
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(ii)
The provisions of this Section 10.4(g)(ii) shall apply to any audit, proceeding
or claim by any Tax Authority that relates to a type of tax (e.g., a Service
Tax) assessed by such Tax Authority to one Party for which the other Party is
financially responsible under this Agreement and for which Vendor or other
Vendor customers are also financially responsible in other similar transactions.
Each Party shall promptly notify the other of any claim for taxes assessed by
applicable Tax Authorities for which the other Party is responsible under this
Agreement. Each Party shall provide any information related to such claim
reasonably requested by the other Party. If either Party has a reasonable basis
for a challenge and requests the other to so challenge the imposition of any tax
liability, such other Party shall do so (unless and to the extent it assumes
financial responsibility for the tax liability in question), and the requesting
Party shall reimburse the other for all reasonable legal, accounting or other
professional fees and expenses it incurs in such challenge. In addition, neither
Party shall enter into a settlement of any tax liability that creates a binding
financial obligation for the other Party without the other Party’s approval,
which shall not be unreasonably withheld; provided that the other Party assumes
financial liability for any interest, penalties or fines which accrue on the
claimed amount, and provided further that this Subsection (ii) shall not limit
Vendor’s right or ability to settle similar claims related to other customers or
amounts for which Vendor has financial responsibility. Each Party shall be
entitled to any tax refunds or rebates obtained with respect to taxes for which
such Party is financially responsible under this Agreement.

 

 
(h)
Tax Filings. Each Party represents, warrants and covenants that it will file
appropriate tax returns, and pay applicable taxes owed arising from or related
to the provision of the Services in applicable jurisdictions. Vendor represents,
warrants and covenants that it is registered to and will collect and remit
Service Taxes in all applicable jurisdictions.

 
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10.5
New Services.

 

 
(a)
Procedures. TXUED may request that Vendor submit proposals for Vendor’s
provision of New Services. Vendor shall not be required to submit any such
proposal unless the New Services are (1) generally provided by Vendor, (2)
required by Law or (3) reasonably related to the Services and will be performed
within TXUED’s service territory as such service territory exists on the Master
Agreement Effective Date or within a reasonable geographic proximity to such
service territory, in which case Vendor shall promptly prepare a New Services
proposal for TXUED’s consideration. Unless otherwise agreed by the Parties,
Vendor shall prepare New Services proposals at no additional charge to TXUED and
shall use commercially reasonable efforts to deliver New Services proposals to
TXUED within thirty (30) days of its receipt of TXUED’s request or more quickly
in the case of a pressing business need or an emergency situation. TXUED shall
timely provide such information as Vendor reasonably requests in order to
prepare New Service proposals.  Vendor’s New Services proposals shall include
the following at a level of detail sufficient to permit TXUED to make an
informed business decision: (i) a project plan and fixed price or price estimate
for the New Service, (ii) a breakdown of such price or estimate, (iii) any
efficiency or productivity improvements that such New Service shall enable in
Vendor’s performance and/or TXUED’s receipt and use of the Services, (iv) a
description of the service levels to be associated with such New Service, (v) a
schedule for commencing and completing the New Service, (vi) a description of
any new Resources to be provided by Vendor in connection with the New Service,
(vii) a description of any Resources necessary to provide the New Service and
(viii) any additional facilities or labor resources to be provided by TXUED in
connection with the proposed New Service. TXUED may accept or reject any New
Services proposal in its sole discretion and Vendor shall not be obligated to
perform any New Services to the extent the applicable proposal is rejected.
TXUED’s acceptance of a New Services proposal shall only be valid and binding on
TXUED if approved in writing by the TXUED Account Executive. Unless the Parties
otherwise agree, if TXUED accepts Vendor’s proposal, Vendor will perform the New
Services and be paid in accordance with the proposal submitted by Vendor and the
provisions of this Agreement. Upon TXUED’s acceptance of a Vendor proposal for
New Services, the scope of the Services will be expanded and the applicable
Services Agreement will be modified to include such New Services.
Notwithstanding any provision to the contrary, (i) Vendor shall act reasonably
and in good faith in formulating such pricing proposal, (ii) Vendor shall
identify potential means of reducing the cost to TXUED, including utilizing
Subcontractors as and to the extent appropriate and (iii) such pricing proposal
shall comply with the terms of Section 10.8.

 

 
(b)
Use of Third Parties. TXUED may elect to solicit and receive bids from third
parties to perform any New Services. If TXUED elects to use third parties to
perform New Services, (i) such New Services shall not be deemed “Services” under
this Agreement, and (ii) Vendor shall cooperate with such third parties as
provided in Section 4.3(b).

 
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(c)
Services Evolution and Modification. The Parties anticipate that the Services
will evolve and be supplemented, modified, enhanced or replaced over time to
keep pace with technological and process advancements and improvements in the
methods of performing and delivering services and the changes in the businesses
of TXUED. The Parties acknowledge and agree that these changes will modify the
Services and will not be deemed to result in New Services unless the changed
services meet the definition of New Services, in which case Vendor shall have
the right to produce a proposal for TXUED to provide such New Services.

 

 
(d)
End User and Eligible Recipient Requests. Vendor will promptly inform the TXUED
Account Executive of any requests for New Services, and subject to the
provisions of Subsection (a) above, shall submit any proposals for New Services
to the TXUED Account Executive. Vendor shall not agree to provide New Services
without the prior written approval of the TXUED Account Executive. If Vendor
fails to comply strictly with this Section 10.5(d), it shall receive no
compensation for any services rendered to any person or entity.

 

 
(e)
Efforts to Reduce Costs and Charges. TXUED may request that the Parties work
together to identify ways to achieve reductions in the cost of service delivery
and corresponding reductions in the Charges to be paid by TXUED by modifying or
reducing the nature or scope of the Services, the applicable Service Levels or
other contract requirements. If requested by TXUED, Vendor shall promptly
prepare a proposal at a level of detail sufficient to permit TXUED to make an
informed business decision identifying all viable means of achieving the desired
reductions without adversely impacting business objectives or requirements
identified by TXUED. In preparing such a proposal, Vendor shall give reasonable
consideration to any means of achieving such reductions proposed by TXUED,
Vendor shall negotiate in good faith with TXUED about each requested reduction
in Charges and shall identify to TXUED if and to what extent the cost of service
delivery may be reduced by implementing various changes in this Agreement. TXUED
shall not be obligated to accept or implement any proposal, and Vendor shall not
be obligated to implement any change that affects the terms of this Agreement
unless and until such change is reflected in a written amendment to this
Agreement.

 
10.6
Proration. Periodic charges under this Agreement are to be computed on a
calendar month basis, and shall be prorated for any partial month on a calendar
day basis.

 
10.7
Refundable Items.

 
If either Party should receive a refund, credit, discount or other rebate for
goods or services paid by the other Party, the recipient Party shall (i) notify
the other Party of such refund, credit, discount or rebate and (ii) pay the full
amount of such refund, credit, discount or rebate to the other Party.
 
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10.8
***

 
11.
INVOICING AND PAYMENT

 
11.1
Invoicing.

 

 
(a)
Invoice. Following the Services Agreement Commencement Date for each Services
Agreement, Vendor shall present invoices to TXUED twice each month for any
Charges due and owing under that Services Agreement for the preceding period
(the “Bi-Monthly Invoice”), including the Base Services Charges and any ARCs and
RRCs. Each Bi-Monthly Invoice shall be presented by Vendor to TXUED within five
(5) days after the first (1st) and fifteenth (15th) day of each month. Each
Bi-Monthly invoice shall be delivered to TXUED, at its request, at the
address(es) listed in Section 19.3 and/or electronically. Except as otherwise
expressly permitted in Exhibit 11, Vendor shall not invoice TXUED for any
advance or concurrent charges or other amounts.

 

 
(b)
Payment. Subject to the other provisions of this Article 11, each Bi-Monthly
Invoice shall be due and payable within fifteen (15) days after receipt by TXUED
of such Bi-Monthly Invoice unless the amount in question is disputed in
accordance with Section 11.4.

 

 
(c)
Form and Data. At TXUED’s request, Vendor shall provide separate Bi-Monthly
Invoices for each Eligible Recipient then receiving Services, allocated among
such Eligible Recipients based on the chargeback data generated by Vendor and/or
the allocation formula provided by TXUED. Each invoice shall (i) comply with all
applicable legal, regulatory and accounting requirements and (ii) allow TXUED to
validate volumes and fees. Upon TXUED’s request, Vendor shall within seven (7)
days provide TXUED with information and data to permit TXUED to chargeback
internally to the same organizational level and at the same level of detail in
use by TXUED as of the Services Agreement Commencement Date as has been
communicated by TXUED to Vendor. Each invoice shall include the pricing
calculations and related data utilized to establish the Charges. The data
underlying each invoice shall be delivered to TXUED electronically in a form and
format compatible with TXUED’s accounting systems.

 
 
***CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
 
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(d)
Credits. To the extent a credit may be due to TXUED pursuant to this Agreement,
Vendor shall provide TXUED with an appropriate credit against amounts then due
and owing; if no further payments are due to Vendor, Vendor shall pay such
amounts to TXUED within fifteen (15) days of the date of Vendor’s final invoice.

 

 
(e)
Time Limitation. If Vendor fails to provide an invoice (other than with respect
to Pass-Through Expenses) to TXUED for any amount within one hundred eighty
(180) days after the month in which the Services in question are rendered or the
expense incurred, Vendor shall waive all rights it may otherwise have to invoice
for and collect such amount.

 
11.2
Payment Due. Any undisputed amounts due under this Agreement for which a time of
payment is not otherwise specified shall be due and payable within fifteen (15)
days of the receipt of a proper invoice by TXUED.  Any late payments shall be
subject to interest from the date on which payment was due at the then current
rate set by Citibank, N.A. as its prime lending rate plus two (2) percent per
annum. Additionally, in the case of each Bi-Monthly Invoice, if any undisputed
amount thereof is not paid by the date due under Section 11.1(b), then, from and
after the date of notice from Vendor to TXUED stating that such amount is
overdue, such amount shall be subject to interest from and including the date of
such notice to and including the actual date of payment at the lesser of (i) the
then current rate set by Citibank, N.A. as its prime lending rate plus ten
percent (10%), per annum (ii) or the highest interest rate permitted by
applicable law.

 
11.3
Set Off. With respect to any amount to be paid or reimbursed by either Party
under a particular Services Agreement, such Party may set off against such
amount any amount that the other Party is obligated to pay or credit such Party
under the applicable Services Agreement.

 
11.4
Disputed Charges. TXUED may only withhold payment of relevant portions of the
Charges if TXUED reasonably disputes such portions of the Charges in good faith
subject to the following:

 

 
(a)
Description and Explanation. TXUED shall notify Vendor and provide a description
of the particular Charges in dispute and an explanation of the reason why TXUED
disputes such Charges.

 

 
(b)
Continued Performance. If TXUED has withheld payment in accordance with the
provisions of this Section, each Party agrees to continue performing its
obligations under this Agreement while the applicable dispute is being resolved
unless and until such obligations are terminated by the termination or
expiration of this Agreement.

 

 
(c)
Resolutions of Disputed Amounts and Incorrect Invoices. Upon resolution of a
dispute regarding disputed Charges or inaccurate invoices, (i) TXUED shall
promptly pay to Vendor any such Charges determined to be due to Vendor together
with interest from the date originally due at the then current rate set by
Citibank, N.A. as its prime lending rate plus two (2) percent per annum and (ii)
Vendor shall promptly pay to TXUED an amount equal to (x) the dollar amount of
inaccuracies on the invoice multiplied by (y) the then current rate set by
Citibank, N.A. as its prime lending rate plus two (2) percent per annum.

 
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(d)
No Waiver. Neither the failure to dispute any Charges or amounts prior to
payment nor the failure to withhold any amount shall constitute, operate or be
construed as a waiver of any right TXUED may otherwise have to dispute any
Charge or amount or recover any amount previously paid.

 
12.
TXUED DATA AND OTHER PROPRIETARY INFORMATION

 
12.1
TXUED Ownership of TXUED Data. TXUED Data are and shall remain the property of
TXUED and Vendor shall not possess or assert any lien or other interest, title
or right in, to or under any TXUED Data. Vendor shall promptly deliver TXUED
Data (or the portion of such TXUED Data specified by TXUED) to TXUED in the
format and on the media on which such TXUED Data is held or contained by Vendor
in accordance with this Agreement (i) at any time at TXUED’s request, (ii) at
the end of the term of each applicable Services Agreement and the completion of
all requested Termination Assistance Services or (iii) with respect to
particular TXUED Data, at such earlier date that such data are no longer
required by Vendor to perform the Services. Thereafter, Vendor shall return or
destroy, as directed by TXUED, all copies of the TXUED Data in Vendor’s
possession or under Vendor’s control within ten (10) days and deliver to TXUED
written certification of such return or destruction signed by a senior executive
of Vendor. TXUED Data shall not be utilized by Vendor for any purpose other than
the performance of Services and shall not be sold, assigned, leased,
commercially exploited or otherwise provided to third parties by or on behalf of
Vendor or any Vendor Personnel, but may, subject to TXUED’s prior approval, be
blended or aggregated with Vendor’s other customers’ data to develop benchmarks
and for other research and development activities (provided that Vendor shall
not disclose to any other person or Entity that portion of TXUED Data that
specifically identifies TXUED, TXUED’s customers, officers, directors,
employees, agents or representatives or any personally identifiable information
of any such persons. Notwithstanding any other provision of this Agreement,
Vendor shall not undertake or engage in any activity with respect to any TXUED
Personal Data which would, under applicable Privacy Laws, constitute Vendor’s
functioning in the capacity of a “controller,” as such capacity may be
identified and defined in the respective applicable Privacy Laws and Vendor
shall promptly notify TXUED if it believes that any use of TXUED Data by Vendor
contemplated under this Agreement or to be undertaken as part of the Services
would, under applicable Privacy Laws, constitute Vendor so functioning in the
capacity of a “controller.”

 
12.2
Safeguarding TXUED Data.

 

 
(a)
Safeguarding Procedures. Vendor shall establish and maintain environmental,
safety and facility procedures, data security procedures and other safeguards
against the destruction, loss or unauthorized access, use or alteration of TXUED
Data in the possession of Vendor which are (i) no less rigorous than those
maintained by TXUED as of the applicable Services Agreement Commencement Date
(or implemented by TXUED in the future to the extent deemed necessary by TXUED),
as the same may be amended or modified from time to time, and (ii) adequate to
meet the requirements of TXUED’s then current records retention policy. Vendor
will revise and maintain such procedures and safeguards upon TXUED’s request,
and any Material Change resulting from additions or modifications to such
procedures or safeguards shall be addressed through the Change Control Process.
TXUED shall have the right to establish backup security for TXUED Data and to
keep in its possession backup copies of TXUED Data at TXUED’s expense. Vendor
shall remove all TXUED Data from any of its media, or media for which it is
operationally responsible, taken out of service and shall destroy or securely
erase such media in accordance with the Policy and Procedures Manual. No media
on which TXUED Data is stored may be used or re-used to store data of any other
customer of Vendor or to deliver data to a third party, including another Vendor
customer, unless securely erased in accordance with the Policy and Procedures
Manual. In the event Vendor discovers or is notified of a breach or potential
breach of security relating to TXUED Data, Vendor shall (i) immediately notify
TXUED of such breach or potential breach and perform a Root Cause Analysis
thereon, (ii) investigate such breach or potential breach, (iii) if the breach
is attributable to Vendor, remediate the effects of such breach or potential
breach and (iv) if the breach is attributable to Vendor, provide TXUED with such
assurances as TXUED shall request that such breach or potential breach will not
recur.

 
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(b)
Reconstruction Procedures. Vendor shall be responsible for developing and
maintaining procedures for the reconstruction of destroyed, lost or altered
TXUED Data which are (i) no less rigorous than those maintained by TXUED as of
the applicable Services Agreement Commencement Date and (ii) no less rigorous
than those maintained by Vendor for its own and other customers’ information of
a similar nature as the same may be amended and modified from time to time.

 

 
(c)
Corrections. Vendor shall correct all TXUED Data that is or was used by Vendor
or in its possession or under its control that is altered or that becomes
inaccurate after the Master Agreement Effective Date; provided that any such
alteration or inaccuracy caused by TXUED or that existed prior to the Master
Agreement Effective Date shall be corrected by Vendor at TXUED's expense.

 

 
(d)
Restoration. Vendor shall restore all TXUED Data that is destroyed or becomes
lost after the applicable Services Agreement Commencement Date (other than in
the instances in which the Parties reasonably agree that it would be
impracticable to restore such TXUED Data); provided that any destruction or loss
caused by TXUED or that existed prior to the applicable Services Agreement
Commencement Date shall be corrected by Vendor at TXUED's expense.

 
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12.3
Confidentiality.

 

 
(a)
Proprietary Information. Vendor and TXUED each acknowledge that the other
possesses and will continue to possess information that has been developed or
received by it, has commercial value in its or its customers’ businesses and is
not generally available to the public. Except as otherwise specifically agreed
in writing by the Parties, “Proprietary Information” shall mean (i) this
Agreement and the terms hereof, (ii) all information marked confidential,
restricted or proprietary by either Party and (iii) any other information that
is treated as confidential by the disclosing Party and would reasonably be
understood to be confidential, whether or not so marked. In the case of TXUED,
Proprietary Information also shall include TXUED Data, attorney-client
privileged materials, attorney work product, customer lists, customer contracts,
customer information, rates and pricing, information with respect to
competitors, strategic plans, account information, rate case strategies,
research information, chemical formulae, product formulations, plant and
equipment design information, catalyst information, information that contains
trade secrets, financial/accounting information (including assets, expenditures,
mergers, acquisitions, divestitures, billings collections, revenues and
finances), human resources and personnel information, marketing/sales
information, information regarding businesses, plans, operations, third party
contracts, licenses, internal or external audits, law suits, regulatory
compliance or other information or data, but only to the extent it is obtained,
received, transmitted, processed, stored, archived, or maintained by Vendor
strictly for use under this Agreement. By way of example, TXUED’s Proprietary
Information shall include plans for changes in TXUED Facilities, Business Units
and product lines, plans for business mergers, acquisitions or divestitures,
rate information, plans for the development and marketing of new products,
financial forecasts and budgets, technical proprietary information, employee
lists and company telephone or e-mail directories. In the case of Vendor,
Proprietary Information shall include Vendor Data, data, financial information,
account information, information regarding Vendor’s business plans and
operations and proprietary software, tools and methodologies owned by Vendor and
used in the performance of the Services, plans for changes in Vendor’s
facilities, Business Units and product lines, plans for business mergers,
acquisitions or divestitures, plans for the development and marketing of new
products, financial forecasts and budgets, technical proprietary information,
employee lists and company telephone or e-mail directories. Each Party’s
Proprietary Information shall remain the property of such Party.

 

 
(b)
Obligations.

 

 
(i)
During the Term and at all times thereafter subject to Section 12.3(f), Vendor
and TXUED shall not disclose, and shall maintain the confidentiality of, all
Proprietary Information of the other Party. TXUED and Vendor shall each use at
least the same degree of care to safeguard and to prevent disclosing to third
parties the Proprietary Information of the other as it employs to avoid
unauthorized disclosure, publication, dissemination, use, destruction, loss or
alteration of its own information (or information of its customers) of a similar
nature, but not less than reasonable care. Each Party’s personnel shall have
access to the other Party’s Proprietary Information only to the extent necessary
for such person to perform his or her obligations under or with respect to this
Agreement or as otherwise naturally occurs in such person’s scope of
responsibility, provided that such access is not in violation of Law.

 
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(ii)
The Parties may disclose Proprietary Information to their Affiliates (except
where prohibited by TXUED Rules or Vendor’s rules of which TXUED has been made
aware), auditors, attorneys, accountants, consultants, contractors,
subcontractors and other professional advisors, where (A) use by such person or
entity is authorized under this Agreement or (B) such disclosure is necessary
for the performance of such person’s or entity’s obligations under or with
respect to this Agreement (including in furtherance of the preservation or
exercise of the rights, remedies and privileges of a Party) or otherwise
naturally occurs in such person’s or entity’s scope of responsibility. The
disclosing Party shall be responsible for the acts or omissions of such person
or entity and shall take all necessary steps to ensure that the Proprietary
Information is not disclosed or used in contravention of this Agreement. Any
disclosure to such person or entity shall be under the terms and conditions as
provided herein.

 

 
(iii)
Neither Party shall (A) make any use or copies of the Proprietary Information of
the other Party except as contemplated by this Agreement, (B) acquire any right,
title or interest in, to or under or assert any lien against the Proprietary
Information of the other Party, (C) sell, assign, transfer, lease, or otherwise
dispose of Proprietary Information to third parties or commercially exploit such
information, including through Derivative Works or (D) refuse for any reason
(including a default or material breach of this Agreement by the other Party) to
promptly provide the other Party’s Proprietary Information (including copies
thereof) to the other Party if requested to do so. Upon expiration or any
termination of this Agreement and completion of each Party’s obligations under
this Agreement, each Party shall return or destroy, as the other Party may
direct, all documentation in any medium that contains, refers to or relates to
the other Party’s Proprietary Information within thirty (30) days. Each Party
shall deliver to the other Party written certification of its compliance with
the preceding sentence signed by a senior executive of such Party. In addition,
each Party shall take all necessary steps to ensure that its employees comply
with these confidentiality provisions.

 

 
(c)
Exclusions. Section 12.3(b) shall not apply to any particular information which
the receiving Party can demonstrate: (i) is, at the time of disclosure to it,
generally available to the public other than through a breach of the receiving
Party’s or a third party’s confidentiality obligations, (ii) after disclosure to
it, is published by the disclosing Party or otherwise becomes generally
available to the public other than through a breach of the receiving Party’s or
a third party’s confidentiality obligations, (iii) is lawfully in the possession
of the receiving Party at the time of disclosure to it, (iv) is received from a
third party having a lawful right to disclose such information or (v) is
independently developed by the receiving Party without reference to Proprietary
Information of the disclosing Party. Information disclosed hereunder and any
combination of features thereof shall not be deemed to be within the foregoing
exceptions merely because such information or any combination of the individual
features thereof are embraced by more general information in the public
knowledge or literature. In addition, the receiving Party shall not be
considered to have breached its obligations under this Section for disclosing
Proprietary Information of the other Party as required, in the opinion of legal
counsel, to satisfy any legal requirement of a competent government body,
provided that promptly upon receiving any such request such Party, to the extent
it may legally do so, advises the other Party of the Proprietary Information to
be disclosed and the identity of the third party requiring such disclosure prior
to making such disclosure in order that the other Party may interpose an
objection to such disclosure, take action to assure confidential handling of the
Proprietary Information or take such other action as it deems appropriate to
protect the Proprietary Information. The receiving Party shall use commercially
reasonable efforts to cooperate with the disclosing Party in its efforts to seek
a protective order or other appropriate remedy or in the event such protective
order or other remedy is not obtained, to obtain assurance that confidential
treatment will be accorded such Proprietary Information.

 
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(d)
Misuse of Proprietary Information. Each Party shall (i) immediately notify the
other Party of any possession, use, knowledge, disclosure, publication,
dissemination, alteration or loss of such other Party’s Proprietary Information
in contravention of this Agreement, (ii) promptly furnish to the other Party all
known details and assist such other Party in investigating and/or preventing the
reoccurrence thereof, (iii) cooperate with the other Party in any investigation
or litigation deemed necessary by such other Party to protect its rights and
(iv) promptly use all commercially reasonable efforts to prevent further
possession, use, knowledge, disclosure, publication, dissemination, alteration
or loss of Proprietary Information in contravention of this Agreement. Each
Party shall bear any costs it incurs in complying with this Section 12.3(d).

 

 
(e)
No Implied Rights. Nothing contained in this Section 12.3 shall be construed as
obligating a Party to disclose its Proprietary Information to the other Party,
or as granting to or conferring on a Party, expressly or impliedly, any rights,
title, interests or license in, to or under any Proprietary Information of the
other Party.

 

 
(f)
Survival. The Parties’ obligations of non-disclosure and confidentiality shall
survive the expiration or termination of this Agreement for a period of three
(3) years other than with respect to trade secrets, in which case the
obligations shall survive until such time as the applicable information no
longer constitutes Proprietary Information as defined in this Agreement.

 
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12.4
File Access. Subject to reasonable security, confidentiality and regulatory
restrictions imposed by Vendor, TXUED shall have access to, and the right to
review and retain the entirety of, all computer or other files containing TXUED
Data, as well as all systems and network logs, system parameters and
documentation. At no time shall any of such files or other materials or
information be stored or held in a form or manner not accessible to TXUED. Upon
the request of the TXUED Account Executive, Vendor shall confirm that all files
and other information provided to TXUED are complete and that no material
element, amount, or other fraction of such files or other information to which
TXUED may request access or review has been deleted, lost, withheld, disguised
or encoded in a manner inconsistent with the purpose and intent of providing
access to TXUED as contemplated by this Agreement.

 
13.
REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS

 
13.1
Reserved.

 
13.2
Authorization.

 
Each Party represents and warrants to the other that:
 

 
(a)
Existence. It is duly incorporated, formed or organized, as applicable, validly
existing and in good standing under applicable Laws;

 

 
(b)
Power and Authority. It has the requisite organizational power and authority to
execute, deliver and perform its obligations under this Agreement;

 

 
(c)
Legal Authority. It has obtained all governmental authorizations, approvals or
permits required to perform its obligations under this Agreement under all
applicable Laws, except to the extent the failure to obtain any such
authorizations, approvals or permits is, in the aggregate, immaterial;

 

 
(d)
Due Authorization. The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated by this Agreement have been
duly authorized by the requisite organizational action on the part of such
Party; and

 

 
(e)
No Violation or Conflict. The execution, delivery and performance of this
Agreement shall not constitute a violation of any judgment, order or decree; a
material default under any material contract by which it or any of its material
assets are bound; or an event that would, with notice or lapse of time, or both,
constitute such a default.

 
13.3
Compliance with Laws.

 

 
(a)
Compliance by Vendor. Vendor represents, warrants and covenants that, with
respect to the provision or receipt of the Services and the performance of its
other legal and contractual obligations hereunder, it is and shall be, in
compliance with all applicable Laws, including identifying and procuring
applicable permits, certificates, approvals and inspections required under all
Laws. If a charge of non-compliance by Vendor with any Law occurs that impacts
or is likely to impact Vendor’s performance under this Agreement, Vendor shall
promptly notify TXUED of such charge.

 
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(b)
Compliance by TXUED. TXUED represents, warrants and covenants that, with respect
to the performance of its legal and contractual obligations hereunder, it is and
shall be, in compliance with all applicable Laws. If a charge of non-compliance
by TXUED with any Law occurs that impacts or is likely to impact Vendor’s
performance under this Agreement, TXUED shall promptly notify Vendor of such
charge.

 

 
(c)
Compliance Data and Reports. At no additional charge and upon a Party’s request,
the other Party shall provide the requesting Party with data and reports in such
Party’s possession necessary for the requesting Party to meet its obligations to
comply with Laws.

 

 
(d)
Notice of Laws. The Parties shall cooperate in interpreting Laws and identifying
the impact of Laws on the Services; provided that with respect to those Laws
applicable to the businesses of TXUED, TXUED shall retain the right, in its
reasonable discretion, to interpret and determine the impact of such Laws on the
Services. At TXUED’s request, Vendor Personnel shall participate in TXUED
provided regulatory compliance training programs.

 

 
(e)
Compliance with Changes in Laws. Vendor shall comply with all changes in Laws
relevant to the provision of the Services and the performance of its other legal
and contractual obligations hereunder. Vendor is specifically on notice that
such Laws include the Public Utility Regulatory Act and the Substantive Rules
Applicable to Electric Service Providers, Texas Administrative Code, Title 16,
Part II, Chapter 25, and any and all Laws that may be referenced in the TXUED
Rules, TXUED Standards and other TXUED policies and procedures provided to
Vendor from time to time.

 

 
(f)
TXUED Costs and Savings. TXUED shall be responsible for all costs and expenses
resulting from changes in Laws applicable to the businesses of TXUED or TXUED’s
receipt or use of the Services (including those changes in Laws applicable to
the businesses of TXUED that impact the Services, as provided in Section
13.3(d)). Any Material Change resulting from changes in Laws applicable to the
businesses of TXUED or TXUED’s receipt or use of the Services (including those
changes in Laws applicable to the businesses of TXUED that impact the Services,
as provided in Section 13.3(d)) shall be addressed through the Change Control
Process. To the extent such changes in Laws impact other Vendor customers, any
additional costs shall be apportioned on an equitable basis to all such
customers.

 

 
(g)
Vendor Costs and Changes in Law. If, following January 1, 2005, there has been
or is any change in any Law (excluding only changes in income tax Laws) that
impacts the Services or that results in any increases in Vendor’s direct or
indirect costs or expenses (including those embedded in Vendor’s cost structure)
that result in a Material Change, Vendor shall have the right to additional
payments or increased usage charges as a result of any Material Change resulting
from such change in any Law, which shall be addressed through the Change Control
Process.

 
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(h)
Compliance with Data Privacy Laws. Without limiting the foregoing, with respect
to any TXUED Personal Data, Vendor shall provide TXUED with such assistance as
TXUED may reasonably require to fulfill its responsibilities under the
respective applicable Privacy Laws.

 

 
(i)
Responsibility. Vendor shall be responsible for any Losses imposed on Vendor or
TXUED resulting from any failure of Vendor to comply with applicable Laws or
respond in a timely manner to changes in such Laws, unless and to the extent
such failure directly results from the acts or omissions of TXUED, an Eligible
Recipient or an TXUED Third Party Contractor in contravention of TXUED’s
obligations under this Agreement. TXUED shall be responsible for any Losses
imposed on Vendor or TXUED resulting from any failure of TXUED to comply with
applicable Laws or respond in a timely manner to changes in such Laws, unless
and to the extent such failure directly results from the acts or omissions of
Vendor or any Vendor Personnel in contravention of Vendor’s obligations under
this Agreement.

 
13.4
Resources.

 

 
(a)
Ownership and Use. Vendor represents, warrants and covenants that it is either
the owner of, or authorized to use, any and all Resources used by Vendor in
providing the Services, and has and shall have sufficient rights to grant to
TXUED those rights and licenses contained in this Agreement. As to such
Resources that Vendor does not own, Vendor shall advise TXUED as to the
ownership and extent of Vendor’s rights with regard to such Resources to the
extent any limitation in such rights would impair Vendor’s performance of its
obligations under this Agreement.

 

 
(b)
Performance. Vendor warrants and covenants that all Resources used by Vendor in
providing the Services shall be Compliant.

 

 
(c)
Nonconformity. In the event that any Resources used by Vendor in providing the
Services are not Compliant and/or materially and adversely affect the Services,
Vendor shall expeditiously repair or replace such Resources with Compliant
Resources.

 
13.5
Non-Infringement. Each Party represents and warrants that it shall perform its
responsibilities under this Agreement in a manner that does not infringe, or
constitute an infringement or misappropriation of, and that all Materials
provided under this Agreement or any other Transaction Document by such Party or
its Affiliates to the other Party at any time will not infringe, or constitute
an infringement or misappropriation of, any patent, copyright, trademark, trade
secret or other proprietary, intellectual property or privacy rights of any
third party; provided, however, that the performing or providing Party shall not
have any obligation or liability to the extent any infringement or
misappropriation is caused by (i) Materials provided by the other Party,
(ii) modifications made by the other Party or its contractors or subcontractors,
without the knowledge or approval of the performing Party, (iii) the other
Party’s combination of the performing Party’s work product or Materials with
items not furnished, specified or reasonably anticipated by the performing Party
or contemplated by this Agreement, (iv) a breach of this Agreement by the other
Party or (v) the failure of the other Party to use corrections or modifications
provided by the performing Party offering equivalent features and functionality.
Each Party further represents and warrants that it will not use or create
materials in connection with the Services which are libelous, defamatory or
obscene.

 
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13.6
TXUED 2004 Base Case. TXUED represents and warrants that it is not aware of any
material errors or omissions in the TXUED 2004 Base Case. To the best of TXUED’s
knowledge, TXUED’s actual costs for the Base Services that were performed by
TXUED and TXUED Third Party Contractors in calendar year 2005 bear a reasonable
relation to the Base Services Charges.

 
13.7
Reserved.

 
13.8
Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT (WHICH, FOR
THE AVOIDANCE OF DOUBT, INCLUDES EACH OF THE SERVICES AGREEMENTS), EACH PARTY
DISCLAIMS, AND NEITHER PARTY MAKES ANY REPRESENTATIONS, COVENANTS OR WARRANTIES
TO THE OTHER PARTY, WHETHER EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES AND
COVENANTS OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL OTHER
WARRANTIES ARISING BY OPERATION OF LAW, COURSE OF DEALING, CUSTOM OF TRADE OR
OTHERWISE.

 
14.
INSURANCE AND RISK OF LOSS

 
14.1
Vendor Insurance. Vendor shall comply with the provisions of Exhibit 9.

 
15.
INDEMNITIES

 
15.1
Indemnity by Vendor. Vendor agrees to indemnify, defend and hold harmless TXUED
and its officers, directors, employees, agents, representatives, successors and
assigns from and against any and all Losses due to third party claims (excluding
the claims of TXUED’s Affiliates and Eligible Recipients) arising from or in
connection with any of the following:

 

 
(a)
Representations and Warranties. Vendor’s breach of any of its representations
and warranties set forth in this Agreement.

 
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(b)
Licenses, Leases and Contracts. Vendor’s failure to observe or perform any
duties or obligations to be observed or performed on or after the applicable
Services Agreement Commencement Date by Vendor under third party licenses,
equipment leases or other Third Party Contracts used by Vendor to provide the
Services.

 

 
(c)
TXUED Data or Proprietary Information. Vendor’s breach of its obligations with
respect to TXUED Data or TXUED Proprietary Information.

 

 
(d)
Infringement. Infringement or misappropriation or alleged infringement or
alleged misappropriation of a patent, trade secret, copyright, trademark or
other proprietary or intellectual property rights in breach of Vendor’s
representations, warranties and covenants in Sections 13.4(a) or 13.5.

 

 
(e)
Government Claims. Claims by government regulators or agencies for fines,
penalties, sanctions, interest charges or other remedies to the extent such
fines, penalties, sanctions, interest charges or other remedies are attributable
to Vendor’s breach of this Agreement or the wrongful acts or omissions of Vendor
or any Vendor Personnel in connection with Vendor’s performance of the Services.

 

 
(f)
Taxes. Taxes, together with interest and penalties, that are the responsibility
of Vendor under Section 10.4.

 

 
(g)
Other Third Parties. Services, products or systems (not constituting Services
provided pursuant to this Agreement) provided by Vendor to a third party.

 

 
(h)
Affiliate or Subcontractor Claims. Any claim initiated by (i) an Affiliate of
Vendor or a Subcontractor asserting rights arising under or relating to this
Agreement other than a claim for which TXUED is obligated to indemnify Vendor
under this Agreement, or (ii) any entity to which Vendor assigned, transferred,
pledged, hypothecated or otherwise encumbered its rights to receive payments
from TXUED under this Agreement without TXUED’s consent.

 

 
(i)
Vendor Personnel Injury Claims. Any claim by Vendor Personnel for death or
bodily injury suffered at an TXUED Facility other than claims for death or
bodily injury caused by any act, omission, fault, negligence or gross negligence
by TXUED.

 

 
(j)
Employment Claims. Any claim (including claims by current or former TXUED
employees, including Transitioned Employees) relating to any (i) violation by
Vendor or its officers, directors, employees, representatives or agents, of any
Laws or any common Law protecting persons or members of protected classes or
categories, including Laws prohibiting discrimination or harassment on the basis
of a protected characteristic, (ii) liability arising or resulting from the
employment of Vendor Personnel (including Transitioned Employees) by Vendor
(including liability for any social security or other employment taxes, workers’
compensation claims and premium payments, and contributions applicable to the
wages and salaries of such Vendor Personnel), (iii) payment or failure to pay
any salary, wages or other cash compensation due and owing to any Vendor
Personnel (including Transitioned Employees from and after their Employment
Effective Dates), (iv) employee pension or other benefits of any Vendor
Personnel (including Transitioned Employees) accruing from and after their
Employment Effective Date, (v) other aspects of the employment relationship of
Vendor Personnel (including Transitioned Employees) with Vendor or the
termination of such relationship, including claims for wrongful discharge,
claims for breach of express or implied employment contract and claims of joint
employment and/or (vi) liability resulting from representations (oral or
written) to the TXUED employees identified on Schedule M to the applicable
Services Agreement by Vendor (or its respective officers, directors, employees,
representatives or agents), or other acts or omissions with respect to the TXUED
employees identified on Schedule M to the applicable Services Agreement by such
persons or entities, including any act, omission or representation made in
connection with the interview, selection, hiring and/or transition process, the
offers of employment made to such employees, the failure to make offers to any
such employees or the terms and conditions of such offers (including
compensation and employee benefits), except, in each case, to the extent arising
out of: (i) any act, omission, fault or neglect of TXUED or TXUED Third Party
Contractors, (ii) errors or inaccuracies in the information provided by TXUED
and faithfully communicated by Vendor or (iii) the failure of TXUED or TXUED
Third Party Contractors to comply with TXUED’s responsibilities under this
Agreement.

 
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(k)
Vendor Acts and Omissions. Wrongful acts or omissions (including Vendor’s or any
Vendor Personnel’s negligence and gross negligence) of Vendor or any Vendor
Personnel in connection with Vendor’s performance of the Services.

 

 
(l)
Reserved.

 

 
(m)
Vendor Personnel Injury Claims. Any claims by Vendor employees for death or
bodily injury suffered at an TXUED Facility or in their performance of services
as Seconded Vendor Personnel other than claims for death or bodily injury caused
by any act, omission, fault, negligence or gross negligence by TXUED or TXUED
Third Party Contractors.

 

 
(n)
Tort Claims for Acts or Omissions of Seconded Vendor Personnel. Any tort claims
brought by third parties for Losses caused by any act, omission, fault or
negligence by Seconded Vendor Personnel in their performance of services, other
than claims arising from or in connection with (i) Seconded Vendor Personnel
following instructions from TXUED or (ii) any act, omission, fault, negligence
or gross negligence by TXUED.

 
IT IS THE EXPRESS INTENT OF THE PARTIES THAT, FOR PURPOSES OF THIS SECTION 15.1,
LOSSES AND VENDOR’S OBLIGATION TO INDEMNIFY, DEFEND AND HOLD HARMLESS SHALL
INCLUDE LOSSES DUE TO THIRD PARTY CLAIMS ARISING FROM OR IN CONNECTION WITH
TXUED’S CONCURRENT NEGLIGENCE. IN THE CASE OF CONTRIBUTORY NEGLIGENCE, LIABILITY
WILL BE APPORTIONED BETWEEN THE PARTIES IN ACCORDANCE WITH EACH PARTY’S
RESPECTIVE FAULT AS DETERMINED BY A COURT OF COMPETENT JURISDICTION.

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15.2
Indemnity by TXUED. TXUED agrees to indemnify, defend and hold harmless Vendor
and its officers, directors, employees, agents, representatives, successors and
assigns from and against any and all Losses due to third party claims (excluding
the claims of Vendor’s Affiliates and Subcontractors) arising from or in
connection with any of the following:

 

 
(a)
Representations and Warranties. TXUED’s breach of any of its representations and
warranties set forth in this Agreement.

 

 
(b)
Licenses, Leases or Contracts. TXUED’s failure to observe or perform any duties
or obligations to be observed or performed by TXUED under any of the applicable
third party licenses, equipment leases or Third Party Contracts to the extent
TXUED is financially or operationally responsible under this Agreement.

 

 
(c)
Vendor’s Proprietary Information. TXUED's breach of its obligations with respect
to Vendor’s Proprietary Information.

 

 
(d)
Infringement. Infringement or misappropriation or alleged infringement or
alleged misappropriation of a patent, trade secret, trademark, copyright or
other proprietary or intellectual property rights in contravention of TXUED’s
representations, warranties and covenants in Section 13.5.

 

 
(e)
Taxes. Taxes, together with interest and penalties (other than interest or
penalties resulting from Vendor’s failure to timely notify TXUED of Taxes due as
required under Section 10.4), that are the responsibility of TXUED under
Section 10.4.

 

 
(f)
Government Claims. Claims by government regulators or agencies for fines,
penalties, sanctions, interest charges or other remedies to the extent such
fines, penalties, sanctions, interest charges or other remedies are attributable
to TXUED's breach of this Agreement.

 

 
(g)
TXUED Affiliate, Eligible Recipient or Third Party Contractor Claims. Any claim,
initiated by an Affiliate of TXUED, an Eligible Recipient (other than TXUED) or
an TXUED Third Party Contractor asserting rights arising under or relating to
this Agreement, other than a claim for which Vendor is obligated to indemnify
TXUED under this Agreement.

 
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(h)
Employment Claims. Any claim (including claims by current or former TXUED
employees, including Transitioned Employees) relating to (i) violation by TXUED
or its officers, directors, employees, representatives or agents of any Laws or
any common Law protecting persons or members of protected classes or categories,
including Laws prohibiting discrimination or harassment on the basis of a
protected characteristic, (ii) liability arising or resulting from the
employment of persons (including Transitioned Employees prior to their
Employment Effective Date) by TXUED, (iii) payment or failure to pay any salary,
wages or other cash compensation due and owing to any employee of TXUED
(including Transitioned Employees prior to their Employment Effective Dates),
(iv) employee pension or other benefits of any employee of TXUED (including
Transitioned Employees prior to their Employment Effective Dates), (v) other
aspects of the employment relationship of any employee of TXUED (including
Transitioned Employees prior to their Employment Effective Dates and provided,
in no event will TXUED be liable for any claim related to a Transitioned
Employee’s employment relationship arising on or after such Transitioned
Employee’s Employment Effective Date regardless of a finding by any court or
authoritative body that TXUED is or was an employer of such Transitioned
Employee on or after his or her Employment Effective Date) and/or (vi) liability
resulting from any representations (oral or written) to the TXUED employees
identified on Schedule M to the applicable Services Agreement by TXUED (or its
officers, directors, employees, representatives or agents), or other acts of
TXUED prior to the applicable Employment Effective Date in connection with the
selection and hiring by Vendor of the TXUED employees identified on Schedule M
to the applicable Services Agreement, except, in each case, to the extent
arising out of (i) any act, omission, fault or neglect of Vendor (or its
officers, directors, employees, representatives or agents), (ii) errors or
inaccuracies in the information provided by Vendor and faithfully communicated
by TXUED, or (iii) the failure of Vendor (or its officers, directors, employees,
representatives or agents) to comply with Vendor’s responsibilities under this
Agreement.

 

 
(i)
TXUED Personnel Injury Claims. Any claims by TXUED Personnel for death or bodily
injury suffered at a Vendor Facility or in their performance of Services as
Seconded TXUED Personnel other than claims for death or bodily injury caused by
any act, omission, fault, negligence or gross negligence by Vendor.

 

 
(j)
Tort Claims for Acts or Omissions of Seconded TXUED Personnel. Any tort claims
brought by third parties for Losses caused by any act, omission, fault or
negligence by Seconded TXUED Personnel in their performance of Services, other
than claims arising from or in connection with (i) Seconded TXUED Personnel
following instructions from Vendor or (ii) any act, omission, fault, negligence
or gross negligence by Vendor.

 
IT IS THE EXPRESS INTENT OF THE PARTIES THAT, FOR PURPOSES OF THIS SECTION 15.2,
LOSSES AND TXUED’S OBLIGATION TO INDEMNIFY, DEFEND AND HOLD HARMLESS SHALL
INCLUDE LOSSES DUE TO THIRD PARTY CLAIMS ARISING FROM OR IN CONNECTION WITH
VENDOR’S CONCURRENT NEGLIGENCE. IN THE CASE OF CONTRIBUTORY NEGLIGENCE,
LIABILITY WILL BE APPORTIONED BETWEEN THE PARTIES IN ACCORDANCE WITH EACH
PARTY’S RESPECTIVE FAULT AS DETERMINED BY A COURT OF COMPETENT JURISDICTION.
 
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15.3
Reserved.

 
15.4
Indemnification Procedures. With respect to claims which are subject to
indemnification under this Agreement (other than as provided in Section 15.5
with respect to claims covered by Section 15.1(e) and Section 15.2(f)), the
following procedures shall apply:

 

 
(a)
Notice. Promptly after receipt by any entity entitled to indemnification under
this Agreement of notice of the commencement or threatened commencement of any
civil, criminal, administrative, or investigative action or proceeding involving
a claim in respect of which the indemnitee will seek indemnification hereunder,
the indemnitee shall notify the indemnitor of such claim. No delay or failure to
so notify an indemnitor shall relieve it of its obligations under this Agreement
except to the extent that such indemnitor has suffered actual prejudice by such
delay or failure. Within forty-five (45) days following receipt of notice from
the indemnitee relating to any claim, but no later than five (5) days before the
date on which any response to a complaint or summons is due, the indemnitor
shall notify the indemnitee that the indemnitor elects to assume control of the
defense and settlement of that claim (a “Notice of Election”).

 

 
(b)
Procedure Following Notice of Election. If the indemnitor delivers a Notice of
Election within the required notice period, the indemnitor shall assume control
(subject to indemnities right to participate at its own expense) over the
defense and settlement of the claim; provided, however, that (i) the indemnitor
shall keep the indemnitee reasonably apprised at all times as to the status of
the defense, and (ii) the indemnitor shall obtain the prior written approval of
the indemnitee before entering into any settlement of such claim asserting any
liability against the indemnitee or imposing any liability, obligation or
restriction on the indemnitee or ceasing to defend against such claim. The
indemnitor shall not be liable for any legal fees or expenses incurred by the
indemnitee following the delivery of a Notice of Election; provided, however,
that to the extent permissible under applicable Law and to the extent that such
conduct does or would not, or is not reasonably likely to, result in the waiver
or of abandonment of legal privilege are in whole or in part, (i) the indemnitee
shall be entitled to employ counsel at its own expense to participate in the
handling of the claim and (ii) the indemnitor shall pay the fees and expenses
associated with such counsel if, in the reasonable judgment of the indemnitee
based on a written opinion of counsel, there is a conflict of interest with
respect to such claim which is not otherwise resolved or if the indemnitor has
requested the assistance of the indemnitee in the defense of the claim or the
indemnitor has failed to defend the claim diligently. The indemnitor shall not
be obligated to indemnify the indemnitee for any amount paid or payable by such
indemnitee in the settlement of any claim if (i) the indemnitor has delivered a
timely Notice of Election and such amount was agreed to without the written
consent of the indemnitor, (ii) the indemnitee has not provided the indemnitor
with notice of such claim and a reasonable opportunity to respond thereto or
(iii) the time period within which to deliver a Notice of Election has not yet
expired.

 
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(c)
Procedure Where No Notice of Election Is Delivered. If the indemnitor does not
deliver a Notice of Election relating to any claim within the required notice
period, the indemnitee shall have the right to defend the claim in such
reasonable manner as it may deem appropriate subject to the terms of this
Agreement. The indemnitor shall promptly reimburse the indemnitee for all such
reasonable costs and expenses incurred by the indemnitee, including reasonable
attorneys’ fees.

 
15.5
Indemnification Procedures - Governmental Claims. With respect to claims covered
by Section 15.1(e) or Section 15.2(f), the following procedures shall apply:

 

 
(a)
Notice. Promptly after receipt by an indemnitee of notice of the commencement or
threatened commencement of any action or proceeding involving a claim in respect
of which the indemnitee will seek indemnification pursuant to Section 15.1(e) or
Section 15.2(f), the indemnitee shall notify the indemnitor of such claim. No
delay or failure to so notify the indemnitor shall relieve the indemnitor of its
obligations under this Agreement except to the extent that the indemnitor has
suffered actual prejudice by such delay or failure.

 

 
(b)
Procedure for Defense. The indemnitee shall be entitled, at its option, to have
the claim handled pursuant to Section 15.4 or to retain sole control over the
defense and settlement of such claim; provided that, the indemnitee shall (i)
keep the indemnitor reasonably appraised as to the status of the defense,
(ii) consult with the indemnitor on a regular basis regarding claim processing
(including actual and anticipated costs and expenses) and litigation strategy,
(iii) obtain prior written approval of the indemnitor before entering any
indemnitor settlement proposals or suggestions and (iv) use commercially
reasonable efforts to minimize any amounts payable or reimbursable by the
indemnitor.

 
16.
LIABILITY

 
16.1
Force Majeure.

 

 
(a)
General. Subject to Section 16.1(d), no Party shall be liable for any default or
delay in the performance of its obligations under this Agreement if and to the
extent such default or delay is caused by fire, earthquake, acts of God, wars,
riots, civil disorders, rebellions or revolutions, acts of terrorism, strikes,
lockouts, labor disputes, inter-carrier telecommunications backbone failures, or
any other similar cause beyond the reasonable control of such Party, except to
the extent that the non-performing Party is at fault in failing to prevent or
causing such default or delay, and provided that such default or delay cannot
be, or could not have been, reasonably circumvented by the non-performing Party
through the use of reasonable alternate sources, workaround plans or other
means. Notwithstanding anything to the contrary in this Section: (i) strikes,
lockouts or labor disputes involving Vendor (including Vendor Personnel) that
are not of a widespread nature involving both Vendor and third parties, the
failure by a Subcontractor to provide or perform any goods or services to Vendor
(other than to the extent attributable to a force majeure event as described in
the first sentence of this Subsection) or the breach by a Subcontractor of any
of its obligations to Vendor shall not constitute force majeure events under
this Agreement; and (ii) rain, snow, ice, wind, heat or other adverse weather
conditions that could not have been reasonably expected or anticipated (“Weather
Events”) shall constitute force majeure events under this Agreement with respect
to Vendor, provided that the occurrence of any Weather Event shall only excuse
Vendor’s performance under this Agreement to the extent (A) any such failure
cannot be, or could not have been, reasonably circumvented by Vendor through the
use of reasonable alternate sources, workaround plans or other means, and (B)
Vendor uses and continues to use its best efforts to promptly resume performance
of the Services in accordance with this Agreement.

 
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(b)
Duration and Notification. Upon the occurrence and during the continuance of
such force majeure event the non-performing Party shall be excused from further
performance or observance of the obligation(s) so affected for as long as such
circumstances prevail and such Party continues to use commercially reasonable
efforts to recommence performance or observance whenever and to whatever extent
possible without delay. Any Party prevented, hindered or delayed in its
performance of its obligations under this Agreement as a result of any force
majeure event shall, as quickly as practicable under the circumstances, notify
the Party to whom performance is due by telephone (to be confirmed in writing
within two (2) days of the inception of such delay) and describe at a reasonable
level of detail the circumstances of the force majeure event, the steps being
taken to address such force majeure event, and the expected duration of such
force majeure event.

 

 
(c)
***

 
***
CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

 
 
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(d)
Business Continuity and Disaster Recovery. Vendor shall (i) develop and submit
to TXUED for TXUED’s review as soon as reasonably practicable after the
applicable Services Agreement Effective Date (but in any event within one
hundred twenty (120) days following the applicable Services Agreement
Commencement Date), and upon TXUED’s approval institute a business continuity
and a disaster recovery plan for the Services provided under each Services
Agreement, (ii) periodically update and test the operability of the business
continuity and disaster recovery plans during every twelve (12) month period
that each business continuity plan and disaster recovery plan is fully
operational, (iii) submit to TXUED for TXUED’s review and approval any material
updates or other changes to the business continuity and disaster recovery plans
and (iv) certify to TXUED at least every twelve (12) months that the business
continuity and disaster recovery plans are fully operational. Upon the
occurrence of a force majeure event, Vendor shall implement promptly, as
appropriate, the applicable business continuity or disaster recovery plan and
provide business continuity or disaster recovery Services. The occurrence of a
force majeure event shall not relieve Vendor of its obligation to implement, as
appropriate, the applicable business continuity or disaster recovery plan and
provide business continuity or disaster recovery Services.

 

 
(e)
Payment Obligation. If Vendor fails to provide Services in accordance with this
Agreement due to the occurrence of a force majeure event, all amounts payable to
Vendor hereunder shall be equitably adjusted in a manner such that TXUED is not
required to pay any amounts for Services that it is not receiving.

 

 
(f)
Allocation of Resources. Without limiting Vendor’s obligations under this
Agreement, whenever a force majeure event or disaster causes Vendor to allocate
limited resources between or among Vendor’s customers and its or their
Affiliates, Vendor shall not provide to any other customers or its or their
Affiliates priority over TXUED. In no event will Vendor unreasonably re-deploy
or re-assign any Key Vendor Personnel to TXUED's material detriment to another
customer or account in the event of the occurrence of a force majeure event or
any other event.

 
16.2
Limitation of Liability.

 

 
(a)
EXCEPT WHERE THIS AGREEMENT EXPRESSLY PROVIDES FOR ANY LIQUIDATED FORM OF
DAMAGES (WHICH THE PARTIES EXPRESSLY AGREE ARE ENFORCEABLE), NEITHER PARTY SHALL
BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL,
COLLATERAL, EXEMPLARY OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS, REGARDLESS OF
THE FORM OF THE ACTION OR THE THEORY OF RECOVERY, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 
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(b)
EXCEPT AS EXPRESSLY PROVIDED IN SECTION 16.2(C), THE TOTAL AGGREGATE LIABILITY
OF EITHER PARTY, FOR ALL CLAIMS ASSERTED BY THE OTHER PARTY UNDER OR IN
CONNECTION WITH THIS AGREEMENT, REGARDLESS OF THE FORM OF THE ACTION OR THE
THEORY OF RECOVERY, SHALL BE LIMITED TO THE PRODUCT OF (i) THE AGGREGATE TOTAL
CHARGES PAID UNDER ALL OF THE SERVICES AGREEMENTS FOR THE TWELVE (12) MONTH
PERIOD PRECEDING THE ACT OR OMISSION GIVING RISE TO SUCH LIABILITY OR, IN THE
EVENT CHARGES HAVE NOT BEEN PAID FOR TWELVE (12) MONTHS UNDER THE INITIAL
SERVICES AGREEMENT, AN AMOUNT EQUAL TO TWELVE (12) TIMES THE AGGREGATE TOTAL
CHARGES PAID UNDER THE INITIAL SERVICES AGREEMENT IN THE MONTH PRECEDING SUCH
ACT OR OMISSION, MULTIPLIED BY (ii) TEN PERCENT (10%) (“DAMAGES CAP”). AT THE
END OF EACH CONTRACT YEAR THE DAMAGES CAP SHALL BE RESET TO AN AMOUNT EQUAL TO
THE PRODUCT OF (1) THE AGGREGATE TOTAL CHARGES PAID UNDER THIS AGREEMENT DURING
SUCH CONTRACT YEAR MULTIPLIED BY (2) TEN PERCENT (10%).

 

 
(c)
Exceptions to Limitations of Liability. The limitations and exculpations of
liability set forth in Section 16.2(a) and Section 16.2(b) shall not apply with
respect to:

 

 
(i)
Losses occasioned by: the willful misconduct of a Party, fraud of a Party or
gross negligence of senior management of a Party; TXUED’s willful failure to pay
undisputed Charges owed but not paid to Vendor hereunder (including TXUED’s
obligations for payments under Sections 1.2(b), (c) and (f) and Section 18.9);
Vendor’s willful failure to provide TXUED with any undisputed Service Level
Credits, credits appearing on invoices and credits under Exhibit 11 to the
Services Agreements owed TXUED; or either Party’s willful repudiation or willful
refusal to perform all or any portion of this Agreement (including the
Termination Assistance Services).

 

 
(ii)
Amounts paid with respect to third party claims that are the subject of
indemnification under this Agreement, including under Section 15.1 and Section
15.2.

 

 
(d)
Acknowledged Direct Damages. The Parties acknowledge that Service Level Credits
and amounts paid by a Party to a third party that are the subject of
indemnification under this Agreement shall be considered direct damages under
this Agreement.

 
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(e)
Items Not Considered Damages. The following shall not be considered damages
subject to Section 16.2(a), and shall not be counted toward the liability cap
specified in Section 16.2(b):

 

 
(i)
Amounts withheld by TXUED in accordance with this Agreement due to (and in the
amount of any) incorrect Charges by Vendor.

 

 
(ii)
Amounts paid by TXUED but subsequently recovered from Vendor due to (and in the
amount of any) incorrect Charges by Vendor.

 

 
(iii)
Invoiced Charges and other amounts that are due and owing to Vendor for Services
under this Agreement.

 
16.3
Non-Recourse Liabilities. The obligations of each Party under this Agreement
shall be satisfied solely from the assets of such Party, and such obligations
shall in all cases be non-recourse to any of the directors, officers,
shareholders, partners (whether limited or general), members, employees, agents
or Affiliates of such Party.

 
17.
DISPUTE RESOLUTION

 
17.1
Informal Dispute Resolution. Prior to the initiation of formal dispute
resolution procedures with respect to any dispute (including arbitration
proceedings with respect to any Arbitrable Dispute), other than as provided in
the last sentence of Section 17.1(c), or in Section 17.1(e) or Section 18.11,
the Parties shall first attempt to resolve such dispute informally, as follows:

 

 
(a)
Initial Effort. The Parties agree to initially attempt to resolve all disputes
at the operational level, beginning with the applicable Joint Working Group,
with escalation of unresolved disputes to the Operational Governance Board and
then to the Executive Governance Board, as applicable. Any disputes that are not
resolved by the Executive Governance Board shall be escalated to the TXUED
Account Executive and the Vendor Account Executive, and the TXUED Account
Executive and the Vendor Account Executive shall attempt in good faith to
resolve all such disputes. In the event the TXUED Account Executive and the
Vendor Account Executive are unable to resolve a dispute within fourteen (14)
days, either Party may refer the dispute for resolution to the senior corporate
executives specified in Section 17.1(b) upon written notice to the other Party.

 

 
(b)
Escalation. Within five (5) days of a notice under Section 17.1(a) referring a
dispute for resolution to the senior corporate executives, the Vendor Account
Executive will prepare and provide to Vendor’s chief executive officer or his or
her designee and the TXUED Account Executive will prepare and provide to a
member of senior management of TXUED summaries of the non-privileged relevant
information and background of the dispute, along with any appropriate
non-privileged supporting documentation, for their review. The designated senior
corporate executives will confer as often as they deem reasonably necessary in
order to gather and furnish to the other all non-privileged information with
respect to the matter in issue which the Parties believe to be appropriate and
germane in connection with its resolution. The designated senior corporate
executives shall discuss the problem and negotiate in good faith in an effort to
resolve the dispute without the necessity of any formal proceeding. The specific
format for the discussions will be left to the discretion of the designated
senior corporate executives, but may include the preparation of agreed-upon
statements of fact or written statements of position.

 
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(c)
Prerequisite to Formal Proceedings. Formal proceedings for the resolution of a
dispute (including arbitration proceedings with respect to any Arbitrable
Dispute) may not be commenced until the earlier of:

 

 
(i)
the designated senior corporate executives under Section 17.1(b) concluding in
good faith that amicable resolution through continued negotiation of the matter
does not appear likely; and

 

 
(ii)
thirty (30) days after the initial notice under Section 17.1(a) referring the
dispute to the senior corporate executives.

 
The provisions and time periods specified in this Section 17.1 shall not be
construed to prevent a Party from instituting, and a Party is authorized to
institute, formal proceedings earlier to (A) avoid the expiration of any
applicable limitations period, (B) preserve a superior position with respect to
other creditors or (C) address a dispute arising out of or relating to
Section 4.2 or Article 12 or a dispute subject to Section 18.11.
 

 
(d)
Arbitrable Disputes. Subject to Section 17.1(e), the Parties agree that any
Arbitrable Dispute shall be submitted by the Parties to final and binding
arbitration under and in accordance with the following procedures:

 

 
(i)
Any arbitration proceedings conducted in respect of an Arbitrable Dispute shall
be conducted pursuant to the American Arbitration Association Commercial
Arbitration Rules, Title 9 of the U.S. Code and the Texas Arbitration Act,
provided that the Parties agree that the American Arbitration Association shall
not administer any such arbitration. Judgment on the ruling, finding or award
rendered by the arbitrator(s) may be entered in the courts of Dallas County,
Texas and/or the United States District Court for the Northern District of Texas
(Dallas Division). Any challenge to any such ruling, finding or award shall be
filed in, and each Party agrees not to remove or transfer such action from, the
courts of Dallas County, Texas or the United States District Court for the
Northern District of Texas (Dallas Division).

 

 
(ii)
Within ten (10) days after the end of the time period specified in Section
17.1(c)(ii), the Parties shall, if they can agree, select an arbitrator to
resolve the Arbitrable Dispute. In the event that the Parties have not selected
an arbitrator within ten (10) days of the end of the time period specified in
Section 17.1(c)(ii), then the Arbitrable Dispute shall be resolved by majority
decision of a panel of three (3) arbitrators, one (1) selected by each Party and
the third selected by the two (2) Party-selected arbitrators, which the Parties
agree to instruct such arbitrators to make.

 
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(iii)
Each Party shall provide to the arbitrator(s) in writing a statement of fact or
statement of position and a proposal for resolution of the Arbitrable Dispute
(each, a “Proposal”). At any time prior to the close of the arbitration
proceeding, the Parties may exchange revised Proposals, which shall also be
provided to the arbitrator(s). In rendering the ruling, finding or award, the
arbitrator(s) shall choose either (A) the last Proposal submitted by TXUED or
(B) the last Proposal submitted by Vendor, and shall select one or the other of
such Proposals that the arbitrator(s) find(s) most reasonable and appropriate in
light of the facts found at the arbitration proceeding (subject to clause (v) of
this Subsection). No written statement of reasons shall accompany the ruling,
finding or award.

 

 
(iv)
The place of arbitration shall be Dallas, Texas.

 

 
(v)
The arbitrator(s) shall have no authority to award punitive damages or any other
damages not measured by the prevailing Party’s actual, direct damages, and may
not, in any event, make any ruling, finding or award that does not conform to
the terms and conditions of this Agreement.

 

 
(vi)
Except as required by Law, unless otherwise agreed by the Parties neither Party
shall disclose or disseminate any information relating to any arbitration
proceedings conducted pursuant to this Subsection except for disclosure to those
of its officers, employees, accountants, attorneys and agents whose duties
reasonably require them to have access to such information.

 

 
(vii)
The Parties shall share equally the costs and expenses of any arbitration
proceedings conducted pursuant to this Subsection. Each Party shall otherwise
bear its own fees and expenses in respect of any arbitration proceedings
conducted pursuant to this Subsection.

 

 
(viii)
Notwithstanding anything to the contrary in this Subsection, the Parties may
agree in lieu of arbitration to have an individual or individuals having
expertise regarding the nature of an Arbitrable Dispute, such as independent
accountants or independent engineers (a “Qualified Expert” or the “Qualified
Experts”) to finally resolve such Arbitrable Dispute in accordance with the
terms of this clause and clauses (iii) through (vii) of this Subsection. If the
Parties agree to resolve any Arbitrable Dispute under this clause (viii), then
within ten (10) days after the end of the time period specified in Section
17.1(c)(ii), the Parties shall, if they can agree, select a Qualified Expert to
resolve such Arbitrable Dispute. In the event that the Parties have not selected
a Qualified Expert within ten (10) days of the end of the time period specified
in Section 17.1(c)(ii), then the Arbitrable Dispute shall be resolved by
arbitration as set forth in this Section 17.1(d).

 
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(e)
Exceptions. For the avoidance of doubt, any disputes arising out of or related
to this Agreement that are not Arbitrable Disputes are not subject to final and
binding arbitration in accordance with Section 17.1(d). In addition, any
Arbitrable Disputes that address a dispute arising out of or relating to
Section 4.2 or Article 12 or a dispute subject to Section 18.11 shall not be
subject to final and binding arbitration in accordance with Section 17.1(d).

 
17.2
Jurisdiction. Each Party irrevocably agrees that any legal claim, action, suit
or proceeding brought by it in any way arising out of this Agreement (including
any action for enforcement of an arbitration award) must be brought solely and
exclusively in the courts of Dallas County, Texas and/or the United States
District Court for the Northern District of Texas (Dallas Division), and each
Party irrevocably submits to the sole and exclusive jurisdiction of the state
and federal courts in Dallas County, Texas in personam, generally and
unconditionally with respect to any action, suit or proceeding brought by it or
against it by the other Party, and the Parties agree that they will not raise
any defense or objection or file any motion based on lack of personal
jurisdiction, improper venue, inconvenience of the forum or the like in any
action, suit or proceeding filed in a state or federal court in Dallas County,
Texas.

 
17.3
Continued Performance. Subject to Section 16.1 regarding force majeure events,
each Party agrees that it shall, unless otherwise directed by the other Party,
continue performing its obligations under this Agreement while any dispute is
being resolved; provided, that this provision shall not operate or be construed
as extending the Term or prohibiting or delaying a Party’s exercise of any right
it may have to terminate this Agreement in accordance with this Agreement. For
the avoidance of doubt, TXUED Data may not be withheld by Vendor pending the
resolution of any dispute.

 
17.4
Governing Law. This Agreement and performance under it shall be governed by and
construed in accordance with the applicable Laws of the State of Texas, without
giving effect to any choice or conflicts of Law provision or rule (whether of
the State of Texas or any other jurisdiction) that would cause the application
of the Laws of any other jurisdiction other than the State of Texas. The Parties
mutually agree that this Agreement is a “Major Transaction” within the meaning
of the Texas Civil Practice and Remedies Code, Section 15.020, and as such agree
that any action, suit or proceeding in any way arising out of this Agreement
shall be brought in the state or federal courts in Dallas County, Texas, and
venue shall be in the state or federal courts in Dallas County, Texas. The
application of the United Nations Convention on Contracts for the International
Sale of Goods is expressly excluded.

 
18.
TERMINATION

 
18.1
Termination for Cause.

 

 
(a)
By TXUED. If Vendor:

 
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(i)
commits a material breach of this Master Agreement, which breach is not cured
within forty-five (45) days after notice of the breach from TXUED; provided that
such forty-five (45) day period shall be extended for up to one-hundred
thirty-five (135) additional days so long as Vendor has commenced and is
diligently using and continues to use its best efforts to cure such breach and
the failure to cure such breach does not have a material adverse effect on TXUED
(which, for the avoidance of doubt, excludes those effects that have been cured
by payment of money damages);

 

 
(ii)
commits a material breach of this Master Agreement which is not capable of being
cured (including with the payment of money damages, when appropriate) within the
period specified pursuant to Section 18.1(a)(i);

 

 
(iii)
commits numerous breaches of this Master Agreement of which Vendor has received
formal notice and which collectively constitute a material breach, and fails to
(A) cure such breaches within forty-five (45) days after receiving notice from
TXUED that such breaches have become a material breach (provided that such
forty-five (45) day period shall be extended for up to one-hundred thirty-five
(135) additional days so long as Vendor has commenced and is diligently using
and continues to use its best efforts to cure such breach and the failure to
cure such breach does not have a material adverse effect on TXUED (which, for
the avoidance of doubt, excludes those effects that have been cured by payment
of money damages)) and (B) give TXUED adequate assurance that the cause of each
of such breaches has been corrected so as not to be repeated again, provided
that if, within the twenty-four (24) month period following the completion of
the cure described in the preceding clause (A), Vendor again commits numerous
breaches of this Master Agreement of which Vendor has previously received formal
notice and which collectively constitute a material breach, Vendor shall not be
entitled to the cure rights described in the preceding clauses (A) and (B); or

 

 
(iv)
commits a breach of Section 4.1(e), which breach is not cured within forty-five
(45) days after notice of the breach from TXUED;

 
then TXUED may, by giving notice to Vendor, terminate this Agreement as of a
date specified in the notice of termination.
 

 
(b)
By Vendor. In the event that (i) TXUED fails to pay Vendor any undisputed
portion of any Bi-Monthly Invoice within fifteen (15) days following notice from
Vendor and TXUED continues to fail to pay Vendor within fifteen (15) days
following a second notice from Vendor (to be delivered no earlier than fifteen
(15) days after the first notice) stating that such amount is overdue and
stating that Vendor may, in Vendor’s sole discretion, terminate the Agreement if
such amount is not paid within three (3) days from the date of such second
notice or (ii) in any calendar year, TXUED fails to pay the undisputed portion
of five (5) or more Bi-Monthly Invoices within the time period set forth in
Section 11.1(b) and has received at least one notice from Vendor in respect of
each such failure to pay.

 
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18.2
Reserved.

 
18.3
Termination for Insolvency. In the event that a Party (i) files for bankruptcy,
(ii) becomes or is declared insolvent, or is the subject of any bona fide
proceedings related to its liquidation, administration, provisional liquidation,
insolvency that is not dismissed within sixty (60) days, or the appointment of a
receiver or similar officer for it, (iii) passes a resolution for its voluntary
liquidation, (iv) has a receiver or manager appointed over all or substantially
all of its assets, (v) makes an assignment for the benefit of all or
substantially all of its creditors, (vi) enters into an agreement or arrangement
for the composition, extension, or readjustment of substantially all of its
obligations or any class of such obligations, (vii) has its credit rating issued
by one or more Ratings Agencies downgraded to or below “CCC” or their equivalent
grade in the event of a change in rating scales by the Rating Agencies (provided
that until Vendor obtains a credit rating, this clause (vii) shall not be a
basis upon which TXUED may terminate this Agreement), or (viii) experiences an
event analogous to any of the foregoing in any jurisdiction in which any of its
assets are situated, then in any such event the other Party may terminate this
Agreement as of a date specified in a termination notice; provided, however,
that Vendor shall not have the right to exercise such termination under this
Section so long as TXUED pays for the Services on a current basis. For purposes
of this Section, “Ratings Agency” means each of Moody’s Investor Services or
Standard & Poors and any successors thereto, and in the event either of such
Entities no longer issues credit ratings, then another nationally recognized
credit rating agency (if any) agreed to by the Parties.

 
18.4
TXUED Rights Upon Vendor’s Bankruptcy.

 

 
(a)
General Rights. In the event of Vendor’s bankruptcy or other formal procedure
referenced in Section 18.3 or of the filing of any petition under bankruptcy
Laws affecting the rights of Vendor which is not stayed or dismissed within
thirty (30) days of filing, in addition to the other rights and remedies set
forth herein, to the maximum extent permitted by Law, TXUED will have the
immediate right to retain and take possession for safekeeping all TXUED Data,
TXUED Proprietary Information, TXUED licensed Materials, TXUED owned equipment,
TXUED owned systems, TXUED owned Materials, Work Product and all other Resources
to which TXUED is or would be entitled during the Term or upon the expiration or
termination of this Agreement. Vendor shall cooperate fully with TXUED and
assist TXUED in identifying and taking possession of the items listed in the
preceding sentence. TXUED will have the right to hold such TXUED Data,
Proprietary Information and Resources until such time as the trustee or receiver
in bankruptcy or other appropriate insolvency office holder can provide adequate
assurances and evidence to TXUED that they will be protected from sale, release,
inspection, publication, or inclusion in any publicly accessible record,
document, material or filing. Vendor and TXUED agree that without this material
provision, TXUED would not have entered into this Agreement or provided any
right to the possession or use of TXUED Data, Proprietary Information, or
Resources covered by this Agreement.

 
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(b)
TXUED Rights in Event of Bankruptcy Rejection. Notwithstanding any other
provision of this Agreement to the contrary, in the event that Vendor becomes a
debtor under the United States Bankruptcy Code (11 U.S.C. §101 - 1330 as amended
(the “Bankruptcy Code”)) and rejects this Agreement pursuant to Section 365 of
the Bankruptcy Code (a “Bankruptcy Rejection”), (i) any and all of the licensee
and sublicensee rights of TXUED arising under or otherwise set forth in this
Agreement, including the rights of TXUED referred to in the Services Agreements,
shall be deemed fully retained by and vested in TXUED as protected intellectual
property rights under Section 365(n)(1)(B) of the Bankruptcy Code and further
shall be deemed to exist immediately before the commencement of the bankruptcy
case in which Vendor is the debtor, (ii) TXUED shall have all of the rights
afforded to non-debtor licensees and sublicensees under Section 365(n) of the
Bankruptcy Code; and (iii) to the extent any rights of TXUED under this
Agreement which arise after the termination or expiration of this Agreement are
determined by a bankruptcy court not to be “intellectual property rights” for
purposes of Section 365(n), all of such rights shall remain vested in and fully
retained by TXUED after any Bankruptcy Rejection as though this Agreement were
terminated or expired. TXUED shall under no circumstances be required to
terminate this Agreement after a Bankruptcy Rejection in order to enjoy or
acquire any of its rights under this Agreement, including without limitation any
of the rights of TXUED referenced in the Services Agreements.

 
18.5
Utility Regulation. It is not intended that Vendor be an “electric utility” (as
defined in the Texas Public Utility Regulatory Act). If the PUC, or another
governmental body or court of competent jurisdiction, determines that Vendor is
an electric utility within the meaning of the Texas Public Utility Regulatory
Act, the Parties will use commercially reasonable efforts to cause that
determination to be reversed or overruled, whether by contesting it
appropriately, remediating the underlying cause of the determination, or a
combination thereof. If such determination has not been reversed or overruled
within one hundred eighty (180) days thereof, then such commercially reasonable
efforts thereafter also shall include the Parties’ good faith negotiations in an
effort to revise the Services so as to cause Vendor not to be considered an
electric utility by such PUC. If, notwithstanding such reasonable efforts, such
determination has not been reversed or overruled within two hundred and seventy
(270) days thereof, then either Party may, by giving notice to the other Party,
terminate this Agreement as of a date specified in the notice of termination,
which notice may be given at any time after the expiration of such two hundred
and seventy (270) day period (provided that the PUC’s determination has not
subsequently been reversed or overruled prior to such date in said termination
notice).

 
18.6
Reserved.

 
18.7
Reserved.

 
18.8
Reserved.

 
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18.9
Termination For Convenience. Commencing on the second (2nd) anniversary of the
Services Agreement Commencement Date for a Services Agreement, TXUED may
terminate that Services Agreement for convenience and without cause effective as
of any date by giving Vendor notice of such termination at least one-hundred
eighty (180) days prior to the termination date specified in the notice. Upon
the Substantial Completion of all Termination Assistance Services requested by
TXUED in accordance with the provisions of this Master Agreement and the
applicable Services Agreement(s), TXUED shall pay to Vendor the Termination
Charges set forth in Schedule N to the applicable Services Agreement(s).

 
18.10
Cross Termination Rights and Termination Charges.

 

 
(a)
This Master Agreement shall automatically terminate upon the expiration or
termination of all the Services Agreements.

 

 
(b)
Upon the expiration or termination of this Master Agreement all of the Services
Agreements shall automatically terminate.

 

 
(c)
Except for Termination Fees payable by TXUED if it terminates this Master
Agreement under Section 18.9, no other termination fees shall be payable by a
Party that terminates this Master Agreement under an express termination right
set forth in this Master Agreement.

 

 
(d)
Except as otherwise expressly provided in this Agreement, each Party may only
terminate this Master Agreement or any Services Agreement in its entirety.

 

 
(e)
If TXUED terminates a portion of any Services under any Services Agreement (to
the extent expressly permitted by this Agreement) and subsequently terminates
the remaining portion of that Services Agreement in whole under Section 18.9,
then the applicable Termination Charges shall be adjusted in accordance with
Schedule N to such Services Agreement, or in the absence of any provisions in
Schedule N to such Services Agreement, the applicable Termination Charges shall
be equitably reduced in proportion to the portion of the Services that TXUED
previously terminated in part.

 
18.11
Equitable Remedies. Vendor acknowledges that, in the event it breaches (or
attempts or threatens to breach) its obligation to provide Termination
Assistance Services as provided in Section 4.2, its obligation respecting
continued performance in accordance with Section 17.3, or its obligations
respecting Proprietary Information in Section 12.3, TXUED will be irreparably
harmed. In such a circumstance, TXUED may proceed directly to court. If a court
of competent jurisdiction should find that Vendor has breached (or attempted or
threatened to breach) any such obligations, Vendor agrees that without any
additional findings of irreparable injury or other conditions to injunctive
relief (including without the posting of any bond), it shall not oppose the
entry of an appropriate order compelling performance by Vendor and restraining
it from any further breaches (or attempted or threatened breaches). TXUED
acknowledges that, in the event it breaches (or attempts or threatens to breach)
its obligations respecting Proprietary Information in Section 12.3, Vendor will
be irreparably harmed. In such a circumstance, Vendor may proceed directly to
court. If a court of competent jurisdiction should find that TXUED has breached
(or attempted or threatened to breach) any such obligations, TXUED agrees that
without any additional findings of irreparable injury or other conditions to
injunctive relief (including without the posting of any bond), it shall not
oppose the entry of an appropriate order compelling performance by TXUED and
restraining it from any further breaches (or attempted or threatened breaches).

 
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19.
GENERAL

 
19.1
Binding Nature and Assignment. This Agreement is binding on the Parties and
their respective successors and permitted assigns. Neither Party may, nor will
it have the power to, assign this Agreement without the prior written consent of
the other Party. Any attempted assignment that does not comply with the terms of
this Section shall be null and void.

 
19.2
Entire Agreement; Amendment. The Transaction Documents constitute the entire
agreement between the Parties with respect to the subject matter hereof and
thereof. There are no agreements, representations, warranties, promises,
covenants, commitments or undertakings other than those expressly set forth
herein or therein. The Transaction Documents supersede all prior agreements,
representations, warranties, promises, covenants, commitments or undertaking,
whether written or oral, with respect to the subject matter contained herein and
therein. No amendment, modification, change, waiver, or discharge hereof or any
increase in the volume or type of Services (including New Services) shall be
valid unless in writing and signed by, in the case of TXUED, the TXUED Account
Executive, and in the case of Vendor, the Vendor Account Executive.

 
19.3
Notices. All notices, notifications, requests, demands, waivers, consents,
approvals, agreements, authorizations, acknowledgments, communications or
determinations required under this Agreement shall be in writing and shall be
delivered in hard copy using one of the following methods and shall be deemed
delivered upon receipt: (i) by hand; (ii) by an express courier with a reliable
system for tracking delivery; or (iii) by registered or certified mail, return
receipt requested, postage prepaid as follows:

 
In the case of TXUED:
 
TXU ELECTRIC DELIVERY COMPANY 
500 N. Akard Street
14th Floor
Dallas, Texas 75201
Attention: Chief Executive Officer
 
With a copy to:
 
TXU ELECTRIC DELIVERY COMPANY 
500 N. Akard Street
14th Floor
Dallas, Texas 75201
Attention: Chief Legal Officer
 
and
 
In the case of Vendor:
 
INFRASTRUX ENERGY SERVICES GROUP LP
115 W. 7th Street
Fort Worth, Texas 76101
Attention: Chief Executive Officer
With a copy to:
 
INFRASTRUX ENERGY SERVICES GROUP LP
c/o Infrastrux Energy Group, Inc.
10900 N.E. 4th Street
Suite 1900
Bellevue, Washington 98004
Attention: Chief Executive Officer

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A Party may change its address or designee for notification purposes by giving
the other Party notice of the new address or designee at least thirty (30) days
prior to the date upon which it shall become effective.
 
19.4
Counterparts. This Agreement may be executed in several counterparts, all of
which taken together shall constitute one single agreement between the Parties
hereto.

 
19.5
Headings. The article and section headings and the table of contents used in
this Agreement are for reference and convenience only and shall not be
considered in the interpretation of this Agreement.

 
19.6
Relationship of Parties. Neither Party is an agent of the other Party and
neither Party has the right, power or authority, expressly or impliedly, to
represent or bind the other Party as to any matters, except as expressly
authorized in this Agreement.

 
19.7
Severability. In the event that any provision of this Agreement conflicts with
the Law under which this Agreement is to be construed or if any such provision
is held invalid or unenforceable by a court with jurisdiction over the Parties,
such provision shall be deemed to be restated to reflect as nearly as possible
the original intentions of the Parties in accordance with applicable Law. The
remaining provisions of this Agreement and the application of the challenged
provision to persons or circumstances other than those as to which it is invalid
or unenforceable shall not be affected thereby, and each such provision shall be
valid and enforceable to the full extent permitted by Law.

 
19.8
Approvals and Consents. An approval or consent given by a Party under this
Agreement shall not relieve the other Party from responsibility for complying
with the requirements of this Agreement, nor shall it be construed as a waiver
of any rights under this Agreement, except as and to the extent otherwise
expressly provided in such approval or consent. Except as specifically set forth
in this Agreement, all consents, approvals, requests and authorizations to be
given by either Party under this Agreement will not be unreasonably made,
withheld, delayed or denied.

 
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19.9
Waiver of Default; Cumulative Remedies.

 

 
(a)
Waiver of Default. A delay or omission by either Party in exercising any right
or power under this Agreement shall not be construed to be a waiver thereof. A
waiver by either of the Parties of any of the covenants to be performed by the
other or any breach thereof shall not be construed to be a waiver of any
succeeding breach thereof or of any other covenant. All waivers must be in
writing and signed by the Party waiving its rights.

 

 
(b)
Cumulative Remedies. All remedies provided for in this Agreement shall be
cumulative and in addition to and not in lieu of any other remedies available to
either Party at Law, in equity or otherwise.

 
19.10
Survival. Any provision of this Agreement which contemplates performance or
observance subsequent to any termination or expiration of this Agreement shall
survive any termination or expiration of this Agreement and continue in full
force and effect.

 
19.11
Publicity. Neither Party shall use the other Party’s or the other Party’s
Affiliates’ name(s), trade or service mark(s) or other identifying information
or refer to the other Party directly or indirectly in any media release, public
announcement, or public disclosure relating to this Agreement, including in any
advertising, promotional or marketing materials, customer lists or business
presentations without the prior written consent of the other Party prior to each
such use or release. Upon Vendor’s request, TXUED shall cooperate with Vendor,
at Vendor’s expense, in marketing to third parties the services offered by the
Vendor.

 
19.12
Export. The Parties acknowledge that certain equipment, Software and technical
data to be provided hereunder and certain transactions hereunder may be subject
to export controls under the Laws and regulations of the United States, the
European Union, the United Nations and other jurisdictions. No Party shall
export or re-export any such items or any direct product thereof or undertake
any transaction or service in violation of any such Laws or regulations. To the
extent within Vendor’s control, Vendor shall be responsible for, and shall
coordinate and oversee, compliance with such export Laws in respect of such
items exported or imported hereunder.

 
19.13
Third Party Beneficiaries. Except as expressly provided herein, this Agreement
is entered into solely between, and may be enforced only by, TXUED and Vendor.
This Agreement shall not be deemed to create any rights or causes of action in
or on behalf of any third parties, including without limitation employees,
suppliers and customers of a Party, or to create any obligations of a Party to
any such third parties. Notwithstanding the immediately preceding sentence,
Vendor acknowledges and agrees that (a) TXUED shall be entitled to assert
actions and claims against Vendor on behalf of each Eligible Recipient that has
received Services as if such Eligible Recipient were a party to this Agreement,
(b) direct damages suffered by each Eligible Recipient arising out of or
relating to Vendor’s performance or failure to perform under this Agreement
shall be deemed to be direct damages of TXUED and (c) the damages suffered by
each Eligible Recipient of the type contemplated and limited by Section 16.2
shall be deemed to be damages of TXUED under Section 16.2; provided, that if any
Law nullifies or limits the results intended by this sentence, each adversely
affected Eligible Recipient shall be considered an express third party
beneficiary of this Agreement and shall be entitled to assert actions and claims
directly against Vendor as if such Eligible Recipient were a party to this
Agreement.

 
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19.14
Assignment of Agreement For Financing. Vendor may assign, transfer, pledge,
hypothecate or otherwise encumber all of its right, title and interest in, to
and under this Agreement as collateral security for any financing Vendor may
elect to enter into with any lender, trustee, lessor or other financing party
(each a “Lender”) and pursuant to such financing, TXUED will execute and deliver
a reasonable and customary consent to assignment for the benefit of the Lenders,
which shall be in form and substance reasonably acceptable to TXUED. Such
consent to assignment may address, among other items, (i) the right (but not the
obligation) of the Lenders, pursuant to the exercise of their remedies under
such assignment, to exercise Vendor’s rights and receive notices on behalf of
Vendor under this Agreement, (ii) the right (but not the obligation) of the
Lenders to cure defaults of Vendor in a manner reasonably satisfactory to TXUED,
(iii) the right of the Lenders, upon request (to the extent permitted by
applicable law), to receive a replacement agreement (which shall be in form and
substance reasonably satisfactory to TXUED) should this Agreement be terminated
or rejected as a result of any bankruptcy of Vendor, and (iv) the right to
direct payments otherwise payable to Vendor (without offset or reduction) to an
account controlled by the Lenders.

 
19.15
Order of Precedence. In the event of a conflict between this Master Agreement
and any Services Agreement, the terms of this Master Agreement shall prevail. In
the event of a conflict between this Master Agreement and any Exhibit hereto the
terms of this Master Agreement shall prevail.

 
19.16
Hiring of Employees.

 

 
(a)
Solicitation. Except as expressly set forth herein, during the Term, Vendor will
not solicit for employment, directly or indirectly, any employees of TXUED
without the prior approval of TXUED. Except as expressly set forth in this
Agreement, during the Term TXUED will not solicit for employment, directly or
indirectly, any employee of Vendor without the prior consent of Vendor. In each
case, the prohibition on solicitation shall extend ninety (90) days after the
termination of the employee’s employment. These provisions shall not operate or
be construed to prevent or limit and employee’s right to practice his or her
profession or to utilize his or her skills for another employer or to restrict
any employee’s freedom of movement or association.

 
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AMENDED AND RESTATED
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(b)
Publications. Neither the publication of classified advertisements in
newspapers, periodicals, Internet bulletin boards, or other publications of
general availability or circulation nor the consideration and hiring of persons
responding to such advertisements shall be deemed a breach of this Section,
unless the advertisement and solicitation is undertaken as a means to circumvent
or conceal a violation of this provision and/or the hiring party acts with
knowledge of this hiring prohibition.

 
19.17
Further Assurances. Each Party covenants and agrees that, subsequent to the
execution and delivery of this Agreement and without any additional
consideration, each Party shall execute and deliver any further legal
instruments and perform any acts that are or may become necessary to effectuate
the purposes of this Agreement.

 
19.18
Liens. Except for those liens that are filed as a result of a bona fide dispute
regarding TXUED’s failure to pay any amount owed Vendor hereunder, Vendor will
not file, or by its action or inaction permit any of its Affiliates or
Subcontractors to file, any liens on or against property or realty of TXUED. In
the event that any such liens arise as a result of Vendor’s action or inaction,
Vendor will obtain a bond to fully satisfy such liens or otherwise remove such
liens at its sole cost and expense within ten (10) days.

 
19.19
Acknowledgment. The Parties each acknowledge that the terms and conditions of
this Agreement have been the subject of active and complete negotiations, and
that such terms and conditions should not be construed in favor of or against
any Party by reason of the extent to which any Party or its professional
advisors participated in the preparation of this Agreement.

 
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IN WITNESS WHEREOF, the Parties have caused this Master Agreement to be executed
by their respective duly authorized representatives as of the Master Agreement
Effective Date.
 

 
TXU ELECTRIC DELIVERY COMPANY
                           
By:
                          
Name:
                       
Title:
 
                                          
INFRASTRUX ENERGY SERVICES GROUP LP
               
By:
InfrastruX Energy GP, LLC, its general partner
                 
By:
InfrastruX Group, Inc., its member
                             
By:
                         
Name:
                      
Title:
                              
By:
TXU Asset Services Group Management LLC, its general partner
                           
By:
                          
Name:
                       
Title:
       

 
 
[Signature Page to Master Agreement]
 

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AMENDED AND RESTATED EXHIBIT 1
MASTER AGREEMENT
 
 
MASTER AGREEMENT DEFINITIONS

References to the preamble, articles, sections and exhibits in this Exhibit 1
are to the preamble, Articles and Sections of, and Exhibits to, the Master
Agreement unless otherwise specified.
 
“Affiliate” shall mean, generally, with respect to any Entity, any other Entity
Controlling, Controlled by or under common Control with such Entity at the time
in question; provided that Vendor and Vendor’s Affiliates shall not constitute
Affiliates of TXUED and TXUED and TXUED’s Affiliates shall not constitute
Affiliates of Vendor for purposes of this Agreement.
 
“Affiliate Standards” shall have the meaning given in Section 6.3(a).
 
“Agreement” shall have the meaning given in Section  2.2.
 
“Applications Software” or “Applications” shall mean those software application
programs and programming (and all modifications, enhancements, improvements,
documentation and Upgrades thereto and Derivative Works thereof) used to support
day-to-day business operations and accomplish specific business objectives.
Applications Software shall mean all such programs or programming in use as of
the applicable Services Agreement Effective Date, including those set forth in
Schedule H to the applicable Services Agreement, those which were necessary to
perform the Services, and those as to which Vendor received reasonable notice
and/or reasonable access prior to the Services Agreement Effective Date.
Applications Software also shall include all such programs or programming
developed and/or introduced by or for TXUED on or after the Services Agreement
Effective Date.
 
“Arbitrable Disputes” shall mean any dispute arising out of or relating to the
Change Control Process (including disputes as to the existence of a Material
Change), provided that such dispute must both (i) primarily involve an amount in
dispute the net present value of which exceeds three hundred thousand dollars
($300,000) in the aggregate (but only if and to the extent such dispute involves
an amount in dispute) and (ii) not have been resolved in accordance with
Section 17.1(a) or resolved in accordance with Section 17.1(b) within thirty
(30) days after the initial notice under Section 17.1(a) referring the dispute
to the senior corporate executives.
 
“Audit Area” shall have the meaning given in Section 8.4(e).

“Bankruptcy Code” shall have the meaning given in Section 18.4(b).
 
“Bankruptcy Rejection” shall have the meaning given in Section 18.4(b).
 
“Bi-Monthly Invoice” shall have the meaning given in Section 11.1(a).
 
“Business Unit” or “BU” shall mean business entities responsible for the support
and delivery of business functions within TXUED. These Business Units include,
for example, the TXUED Business Units of Transmission and Distribution.
 
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AMENDED AND RESTATED EXHIBIT 1
MASTER AGREEMENT
 
“Cabling” shall mean the electric connection between the Equipment and jack,
including physical cabling media, peripheral cabling used to interconnect
electronic equipment, all terminating hardware and cross connect fields, but not
including conduits and pathways.
 
“Change” shall mean any one or more of the following: an increase or decrease to
the Charges, an addition of a new Charge, a deletion of a Charge, a modification
to the method for determining a Charge, a modification to the Services, an
addition of a Service (excluding New Services), a removal of a Service or any
other change or modification to any term or condition of this Agreement.
 
“Change Control Process” shall mean the process for addressing changes to the
Services set forth in Exhibit 8.
 
“Change in Control” shall mean the (a) consolidation or merger of an Entity with
or into any other Entity (other than one or more Affiliates of the Entity),
(b) sale, transfer or other disposition of all or substantially all of the
assets of an Entity (other than to one or more Affiliates of such Entity) in one
transaction or a series of related transactions or (c) acquisition by any
Entity, or group of Entities acting in concert, of beneficial ownership (as
defined in Rule 13d-3 of the Securities Exchange Act of 1934) or voting control
of 50% or more (or such lesser percentage that constitutes Control) of the
outstanding voting securities or other ownership interests of an Entity that is
not an Affiliate of one or more of such acquiring Entities.
 
“Change Order” shall have the meaning given in Exhibit 8.
 
“Change Proposal” shall have the meaning given in Exhibit 8.
 
“Change Request” shall have the meaning given in Exhibit 8.
 
“Charges” shall mean the amounts set forth in Exhibit 11 as charges for the
Services.
 
“Compliance”, “Compliant” and “Comply” shall mean, with respect to Resources,
Work Product or other contract deliverables to be acquired, obtained, made,
created, built, constructed, developed, implemented, designed, delivered,
integrated, installed and/or tested by Vendor, such Resources, Work Product or
other contract deliverables shall conform with their applicable Specifications,
if any, in all material respects and shall provide the functions and features
and operate in the manner described therein or as otherwise agreed by the
Parties. 
 
“Construction” shall have the meaning given in the Field Services Agreement.
 
“Contract Period” shall have the meaning given in Section 1.2(a).
 
“Contract Records” shall have the meaning given in Section 8.4(a).
 
“Contract Year” shall have the meaning set forth in the applicable Services
Agreement, and to the extent this term relates to this Master Agreement,
Contract Year shall have the meaning set forth in the Field Services Agreement.
 
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AMENDED AND RESTATED EXHIBIT 1
MASTER AGREEMENT
 
 
“Control” and its derivatives shall mean: (a) the beneficial ownership (as
defined or determined pursuant to Rule 13d-3 of the Securities Exchange Act of
1934, as amended) of at least fifty percent (50%) of the aggregate of all voting
equity interests in an Entity; (b) the right to appoint, directly or indirectly,
a majority of the board of directors; or (c) the right to control, directly or
indirectly, the management or direction of the Entity by contract or corporate
governance document.
 
“Cumulative Spend Commitment” shall have the meaning given in Section 1.2(a).
 
“Cumulative Total Spend” shall have the meaning given in Section 1.2(a).
 
“Damages Cap” shall have the meaning given in Section 16.2(b).
 
“Derivative Work” shall mean a work based on one or more preexisting works,
including a condensation, transformation, translation, modification, expansion,
or adaptation, that, if prepared without authorization of the owner of the
copyright of such preexisting work, would constitute a copyright infringement
under applicable Law, but excluding the preexisting work.
 
“Distribution System” shall have the meaning given to such term in the Field
Services Agreement.
 
“Eligible Recipients” shall mean, collectively, and to the extent such Entity is
receiving Services under this Agreement, the following:
 

 
(a)
TXU Electric Delivery Company;

 

 
(b)
any Entity that purchases after the applicable Services Agreement Effective Date
(i) from TXUED or (ii) from any Entity that is created using assets of TXUED, in
either case (i) or (ii) less than substantially all of the assets of TXUED or
such Entity, or of any division, marketing unit, Business Unit, or
manufacturing, research or development facility thereof, provided that such
acquiring Entity shall only be entitled to receive Termination Assistance
Services hereunder and such acquiring Entity must agree in writing to be bound
by the terms and conditions of this Agreement;

 

 
(c)
any Entity that purchases after the applicable Services Agreement Effective Date
(i) from TXUED or (ii) from any Entity that is created using assets of TXUED, in
either case (i) or (ii) all or substantially all of the assets of TXUED or such
Entity, or of any division, marketing unit, Business Unit, or manufacturing,
research or development facility thereof, provided that such acquiring Entity
must agree in writing to be bound by the terms and conditions of this Agreement;

 

 
(d)
any Entity that after the applicable Services Agreement Effective Date is
created using assets of TXUED, provided that such Entity agrees in writing to be
bound by the terms and conditions of this Agreement;

 
Page 3 of 12

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AMENDED AND RESTATED EXHIBIT 1
MASTER AGREEMENT
 
 

 
(e)
any Entity to which TXUED or an Affiliate of TXUED outsources any of its
existing functions to the extent needed for such Entity to continue performing
such function for TXUED or its Affiliates, or any other customer of such Entity;
and

 

 
(f)
other entities to which the Parties agree.

 
Eligible Recipients shall include any Entity that is a contractor,
subcontractor, agent or representative of the Entities identified as Eligible
Recipients in this definition.
 
“Employment Costs” shall have the meaning given in Section 8.8.
 
“Employment Effective Date” shall have the meaning set forth in Exhibit 2.
 
“End User” shall mean, collectively, all Eligible Recipients (and their
respective employees, contractors, subcontractors, agents and representatives,
other than Vendor and its Subcontractors) designated by TXUED to receive or use
the Services provided by Vendor.
 
“Entity” shall mean a corporation, partnership, joint venture, trust, limited
liability company, limited liability partnership, association or other
organization or entity.
 
“Equipment” shall mean all computing (hardware and firmware), networking,
communications, and related computing equipment (and all attachments,
modifications, enhancements, improvements, documentation and Upgrades thereto)
procured, provided, operated, supported, or used by Vendor in connection with
the Services, including (i) mainframe, midrange, server and distributed
computing equipment and associated attachments, features, accessories,
peripheral devices, and Cabling, (ii) personal computers, laptop computers,
workstations and personal data devices and associated attachments, features,
accessories, printers, multi-functional printers, peripheral or network devices,
and Cabling, and (iii) voice, data, video and wireless telecommunications and
network and monitoring equipment and associated attachments, features,
accessories, cell phones, peripheral devices, and Cabling.
 
“Event of Loss” shall have the meaning given in Section 2(a) of Exhibit 9.
 
“Field Services Agreement” shall mean the Field Services Agreement dated as of
the Master Agreement Effective Date between the Parties.
 
“Income Tax” shall mean any tax on or measured by the net income of a Party
(including taxes on capital or net worth that are imposed as an alternative to a
tax based on net or gross income), or taxes which are of the nature of excess
profits tax, minimum tax on tax preferences, alternative minimum tax,
accumulated earnings tax, personal holding company tax, capital gains tax or
franchise tax for the privilege of doing business.
 
“Initial Services Agreement” shall mean the Field Services Agreement.
 
“Initial Term” shall have the meaning given in Section 3.1.
 
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AMENDED AND RESTATED EXHIBIT 1
MASTER AGREEMENT
 
 
“Key Vendor Personnel” shall mean the Vendor Personnel filling the positions
designated in Schedule C to the applicable Services Agreement as Key Vendor
Personnel.
 
“Laws” shall mean all applicable federal, state, provincial, regional,
territorial and local laws, statutes, ordinances, regulations, rules, executive
orders, supervisory requirements, directives, circulars, opinions, interpretive
letters and other official releases of or by any government, or any authority,
department or agency thereof, including any amendments thereto.
 
“Losses” shall mean all losses, liabilities, damages, fines, penalties and
claims (including taxes), and all related costs and expenses (including
reasonable legal fees and disbursements and costs of investigation, litigation,
settlement, judgment, interest and penalties).
 
“LTE” shall have the meaning given in Section 1.2(f).
 
“Maintenance” shall have the meaning given in the Field Services Agreement.
 
“Managed Third Party Agreements” shall mean those Third Party Contracts between
third parties and TXUED that have been or will be used to provide the Services
and are managed and administered by Vendor. The Managed Third Party Agreements
are identified in Schedule E.5 to the applicable Services Agreement.
 
“Master Agreement” shall mean this Master Framework Agreement dated as of the
Master Agreement Effective Date between the Parties.
 
“Master Agreement Effective Date” shall have the meaning given in the preamble.
 
“Master Lease Agreement” shall mean that certain Master Lease Agreement between
the Parties and dated as of the Master Agreement Effective Date.
 
“Material Change” shall mean a change or related changes in circumstances or the
occurrence of an event or related events, in each case that is beyond the
reasonable control of Vendor, except to the extent that Vendor is at fault in
failing to prevent or causing such circumstance or event, that individually or
cumulatively result or results in either (i) a material change to any Service or
Services, including the manner in which the Services are performed, or
(ii) materially different levels of effort, Resources or expense from Vendor,
including materially different levels of time, expense or cost (including
general cost structure) to perform any Service or Services.
 
“Materials” shall mean, collectively, Software, literary works, other works of
authorship, specifications, designs, analyses, processes, methodologies,
concepts, inventions, know-how, programs, program listings, programming tools,
documentation, reports, drawings and databases, whether tangible or intangible
(and all modifications, enhancements, improvements, documentation and Upgrades
thereto and Derivative Works thereof).
 
“New Services” shall mean a new service or services or a change or changes to
any existing Service or Services requested by TXUED or required by applicable
Laws, that: (i) are materially different from the Services being performed as of
the Services Agreement Commencement Date for the applicable Services Agreement
(including the manner in which the Services are performed), as amended by all
Change Orders; or (ii) require materially different levels of effort, Resources
or expense from Vendor from the levels of effort, Resources or expense required
as of the Services Agreement Commencement Date for the applicable Services
Agreement (including the manner in which the Services are performed), as amended
by all Change Orders. For the avoidance of doubt, New Services shall not include
increases in the volume of Services to be provided by Vendor, which increases
will give rise to an increase in Charges in accordance with Exhibit 11.
 
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AMENDED AND RESTATED EXHIBIT 1
MASTER AGREEMENT
 
 
“New Services Agreement” shall mean a services agreement entered into between
the Parties after the Master Agreement Effective Date.
 
“Notice of Election” shall have the meaning given in Section 15.4(a).
 
“TXUED” shall have the meaning given in the preamble.
 
“TXUED 2004 Base Case” shall mean the summary financial base case attached as
Schedule K to the applicable Services Agreement, as well as the detailed
financial and budget information underlying such summary base case.
 
“TXUED Affected Personnel” shall mean the employees of TXUED or its Affiliates
who performed any of the Services during the twelve (12) months preceding the
applicable Services Agreement Effective Date.
 
“TXUED Account Executive” shall have the meaning given in Section 9.1(a).
 
“TXUED Data” shall mean any data or information of TXUED that is provided to or
obtained by Vendor in connection with the negotiation and execution of this
Agreement or the performance of its obligations under this Agreement, including
data and information with respect to the businesses, customers, operations,
facilities, products, rates, regulatory compliance, competitors, consumer
markets, assets, expenditures, mergers, acquisitions, divestitures, billings,
collections, revenues and finances of TXUED. TXUED Data also shall mean any data
or information created, generated, collected or processed by Vendor in the
performance of its obligations under this Agreement, including data processing
input and output, service level measurements, asset information, Reports, third
party service and product agreements, contract charges, and retained and
Pass-Through Expenses, solely related to TXUED. TXUED Data shall not include
Vendor Data.
 
“TXUED Facilities” shall mean the facilities listed in Schedule O.1 to the
applicable Services Agreement provided by TXUED for the use of Vendor to the
extent necessary to provide the Services. TXUED Facilities do not include any
facilities subject to that certain Master Lease Agreement dated as of the Master
Agreement Effective Date by and between TXU Electric Delivery Company and
Vendor.
 
“TXUED Personal Data” shall mean that portion of TXUED Data that is subject to
any Privacy Laws.
 
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AMENDED AND RESTATED EXHIBIT 1
MASTER AGREEMENT
 
 
“TXUED Personnel” shall mean the employees, agents, contractors or
representatives of TXUED or its Affiliates.
 
“TXUED Rules” shall have the meaning given in Section 6.3(a).
 
“TXUED Sites” or “Sites” shall mean the offices or other facilities listed on
Schedule E.4 to the applicable Services Agreement at or to which Vendor is to
provide the Services.
 
“TXUED Standards” shall have the meaning given to such term in the applicable
Services Agreement.
 
“TXUED Third Party Contractors” shall have the meaning given in Section 4.3(a).
 
“Operating System Software” shall mean all software programs and programming
(and all modifications, enhancements, improvements, documentation and Upgrades
thereto and Derivative Works thereof) that are used to deliver and manage
Services on a particular hardware platform including operating systems (e.g.,
UNIX, Windows, VM and MVS) and network operating systems (e.g., NT Server,
Windows, and Novell). Operating System Software shall include all such programs
or programming in use as of the applicable Services Agreement Effective Date,
including those set forth in Schedule H to the applicable Services Agreement,
those as to which the license, maintenance or support costs are included in the
applicable TXUED 2004 Base Case, and those as to which Vendor received
reasonable notice and/or reasonable access prior to the applicable Services
Agreement Effective Date. Operating System Software also shall include all such
programs or programming developed and/or introduced by or for TXUED after the
applicable Services Agreement Effective Date.
 
“Out-of-Pocket Expenses” shall mean reasonable, demonstrable and actual
out-of-pocket expenses due and payable to a third party by Vendor in accordance
with the Policy and Procedures Manual or that are approved in advance by TXUED
and for which Vendor is entitled to be reimbursed by TXUED under this Agreement.
Out-of-Pocket Expenses shall not include Vendor’s overhead costs (or allocations
thereof), general and/or administrative expenses or other mark-ups.
Out-of-Pocket Expenses shall be calculated at Vendor’s actual incremental
expense and shall be net of all rebates and allowances.
 
“Parties” shall have the meaning given in the recitals to this Master Agreement.
 
“Party” shall have the meaning given in the recitals to this Master Agreement.
 
“Pass-Through Expenses” shall mean the expenses so identified in Exhibit 11 or
otherwise agreed by the Parties, as such list may be amended from time to time.
Unless otherwise agreed, Vendor shall not charge any handling or administrative
charge in connection with its processing or review of such invoices.
 
“Permitted Subcontract” shall have the meaning given in Section 8.6(a).
 
“Policy and Procedures Manual” shall have the meaning set forth in the
applicable Services Agreement.
 
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AMENDED AND RESTATED EXHIBIT 1
MASTER AGREEMENT
 
 
“Privacy Laws” shall mean Laws relating to data privacy, trans-border data flow
or data protection such as the implementing legislation and regulations of the
European Union member states under the European Union Directive 95/46/EC.
 
“Products” shall have the meaning given in Exhibit 11.
 
“Proposal” shall have the meaning given in Section 17.1(d).
 
“Proprietary Information” shall have the meaning given in Section 12.3(a).
 
“Public Utility Regulatory Act” means the Public Utility Regulatory Act, Tex.
Util. Code Ann. § 11.001 et. seq. (Vernon 1998 & Supp. 2005), as amended.
 
“PUC” shall mean the Texas Public Utility Commission or any successor thereto.
 
“Qualified Expert(s)” shall have the meaning set forth in Section 17.1(d)(viii).
 
“Renewal Term” shall have the meaning set forth in Section 3.2.
 
“Reports” shall have the meaning set forth in Section 8.2(a).
 
“Resources” shall mean labor, materials (including Materials), equipment
(including Equipment), tools, systems (including Systems), transportation,
facilities, services and other resources, and all attachments, modifications,
enhancements, improvements, documentation and Upgrades thereto and Derivative
Works thereof.
 
“Root Cause Analysis” shall mean the formal process, specified in the Policy and
Procedures Manual, to be used by Vendor to diagnose the underlying cause of
problems at the lowest reasonable level so that corrective action can be taken
that will eliminate repeat failures.
 
“SAS 70 Audit” shall have the meaning given in Section 8.4(i).
 
“SAS 70 Report” shall have the meaning given in Section 8.4(i).
 
“Seconded TXUED Personnel” shall have the meaning given in Section 8.8.
 
“Seconded Vendor Personnel” shall have the meaning given in Section 8.9.
 
“Service Level Credits” shall have the meaning given in Section 7.2.
 
“Service Level Defaults” shall mean Service Level Shortfalls as defined in
Schedule G to the Field Services Agreement.
 
“Service Levels” shall mean, individually and collectively, the performance
standards for the Services set forth in Schedule G to the applicable Services
Agreement.
 
“Service Taxes” shall mean all sales, use, excise and other similar
transaction-based taxes that are assessed against either Party on the provision
of the Services as a whole, or on any particular Service received by TXUED from
Vendor, excluding Income Taxes, or on Vendor in connection with Vendor’s
performance of the Services.
 
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AMENDED AND RESTATED EXHIBIT 1
MASTER AGREEMENT
 
 
“Services” shall have the meaning given in Section 4.1(a).
 
“Services Agreements” shall mean, collectively, the Initial Services Agreement
and each New Services Agreement.
 
“Services Agreement Commencement Date” shall mean the date on which Vendor shall
assume responsibility for the Services set forth in the applicable Services
Agreement.
 
“Services Agreement Effective Date” shall mean the date on which the Parties
have executed the applicable Services Agreement.
 
“Shared Subcontractors” shall have the meaning given in Section 8.6(b).
 
“Software” shall mean all software programs and programming (and all
modifications, enhancements, improvements, documentation and Upgrades thereto
and Derivative Works thereof).
 
“Specifications” shall mean, with respect to any Resource, Work Product or other
contract deliverable to be acquired, obtained, made, created, built,
constructed, developed, implemented, designed, delivered, integrated, installed
and/or tested by Vendor, the technical, design and/or functional specifications
set forth in (a) Schedule E to the applicable Services Agreement, (b) the
applicable third party manufacturer or supplier documentation or (c) the
applicable New Services or Work Request description requested and/or approved by
TXUED, or such other technical design and/or functional specifications agreed
upon by the Parties.
 
“Subcontractors” shall mean subcontractors of Vendor, including each Permitted
Subcontract and Shared Subcontractors.
 
“Substantial Completion” shall mean that the Termination Assistance Services
requested by TXUED in accordance with the provisions of this Master Agreement
and the applicable Services Agreement(s) have been completed to TXUED’s
reasonable satisfaction in all material respects.
 
“System” shall mean an interconnected grouping of Equipment, Software and
associated attachments, features, accessories, peripherals and Cabling, and all
attachments, modifications, enhancements, improvements, documentation and
Upgrades to such System. System shall include all Systems in use as of the
applicable Services Agreement Effective Date, all attachments, modifications,
enhancements, improvements, documentation and Upgrades to such Systems and all
Systems acquired, obtained, made, created, built, constructed or developed by or
for TXUED or Vendor following the applicable Services Agreement Effective Date.
 
“System Change” shall mean any change to the Software, Equipment, System or
operating environment including without limitation changes to programs, manual
procedures, job control language statements, distribution parameters, or
schedules.
 
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AMENDED AND RESTATED EXHIBIT 1
MASTER AGREEMENT
 
 
“Systems Software” shall mean all software programs and programming (and all
modifications, enhancements, improvements, documentation and Upgrades thereto
and Derivative Works thereof) that perform tasks basic to the functioning of the
Equipment and are required to operate the Applications Software or otherwise
support the provision of Services by Vendor. For purposes of this Agreement,
Systems Software shall include antivirus software, asset management software,
local area and wide area network software, monitoring software, Operating System
Software, problem management software, remote management software, system
utilities, and System testing tools. Systems Software shall include all such
programs or programming in use as of the Services Agreement Effective Date,
including those set forth in Schedule H to the applicable Services Agreement,
those as to which the license, maintenance or support costs are included in the
TXUED 2004 Base Case, and those as to which Vendor received reasonable notice
and/or reasonable access prior to the applicable Services Agreement Effective
Date. Systems Software also shall include all such programs or programming
developed and/or introduced by or for TXUED or Vendor after the applicable
Services Agreement Effective Date.
 
“Tax Authority” shall mean any federal, state, provincial, regional,
territorial, local or other fiscal, revenue, customs or excise authority, body
or official competent to impose, collect or asses tax.
 
“Term” shall have the meaning given in Section 3.2.
 
“Termination Assistance Services” shall mean (i) the Services (including the
terminated, insourced, resourced or expired Services and, in each case, any
replacements thereof or supplements thereto), to the extent TXUED requests such
Services during the period in which Vendor provides the applicable Termination
Assistance Services, (ii) the termination/expiration assistance provided to
TXUED to allow the Services to continue without interruption or adverse effect
and to facilitate the orderly transfer of the Services to TXUED or its designee,
as such assistance is further described in Section 4.2 of the Master Agreement,
and Section 4.3 of and Schedule I to the applicable Services Agreement and
(iii) the performance of any other obligation of Vendor upon or in connection
with the expiration or termination of this Agreement.
 
“Termination Charge” shall mean, with respect to any Services Agreement, the
applicable termination charges payable by TXUED as set forth in Schedule N to
such Services Agreement.
 
“Third Party Contracts” shall mean (i) all agreements between third parties and
Vendor and (ii) Managed Third Party Contracts, in each case that have been or
will be used to provide the Services.
 
“Transaction Documents” shall have the meaning given in that certain
Participation Agreement, dated June 24, 2006, among InfrastruX Group, Inc., a
Washington corporation, TXU Asset Services Company LLC, a Delaware limited
liability company, and (for certain limited purposes only) TXU Electric Delivery
Company, a Texas corporation). For the avoidance of doubt, the Transaction
Documents include this Agreement.
 
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AMENDED AND RESTATED EXHIBIT 1
MASTER AGREEMENT
 
 
“Transformation Period” shall mean the period that specified in the applicable
Services Agreement for performance of the Transformation Services.
 
“Transformation Plan” shall mean the plan set forth in Schedule S to the
applicable Services Agreement and developed pursuant to such Services Agreement,
which identifies all material transformation tasks and deliverables to be
completed by Vendor or TXUED, as applicable, in connection with the
transformation, and the dates by which each is to be completed by Vendor or
TXUED, as applicable.
 
“Transformation Services” shall mean the services, functions and
responsibilities described in the applicable Services Agreement and in the
applicable Transformation Plan to be performed by Vendor during the
Transformation Period.
 
“Transition Period” shall mean the period that commences on the applicable
Services Agreement Effective Date and expires 11:59:59 p.m., Central Time, on
the date specified for the completion of the Transition Services as specified in
the Transition Plan, unless expressly extended in writing by TXUED.
 
“Transition Plan” shall mean the plan set forth in Schedule B to the applicable
Services Agreement and developed pursuant to such Services Agreement, which
identifies all material transition tasks and deliverables to be completed by
Vendor or TXUED, as applicable, in connection with the transition of all
Services to Vendor, and the dates by which each is to be completed by Vendor or
TXUED, as applicable.
 
“Transition Services” shall mean the services, functions and responsibilities
described in the applicable Services Agreement and in the applicable Transition
Plan to be performed by Vendor during the Transition Period.
 
“Transitioned Employees” shall mean the employees of TXUED or its Affiliates who
accept Vendor’s offer of employment and become employed by Vendor pursuant to
the applicable Services Agreement. Upon being employed by Vendor, such
Transitioned Employees shall be deemed to be Vendor Personnel as defined herein.
 
“Transmission System” shall have the meaning given to such term in the Field
Services Agreement.
 
“Turnover Rate” shall have the meaning given in Section 7.10(b).
 
“Unit” shall have the meaning given in Exhibit 11.
 
“Unit Prices” shall have the meaning given in Exhibit 11.
 
“Upgrade” and its derivatives shall mean (i) any change that extends the
usefulness or performance of any Resource (including any improvement, update,
renovation, enhancement or addition) and (ii) any replacement or new model,
version or release of any Resource.
 
“Vendor” shall have the meaning given in the preamble.
 
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AMENDED AND RESTATED EXHIBIT 1
MASTER AGREEMENT
 
 
“Vendor Account Executive” shall have the meaning given in Section 7.8.
 
“Vendor Data” shall mean any data or information of Vendor that is provided to
or obtained by TXUED in connection with the negotiation and execution of this
Agreement or the exercise of its rights under this Agreement, including (i)
financial/accounting information (including costs, expenditures, billings
collections, revenues and finances) of Vendor, its Affiliates or Subcontractors
and (ii) human resources and personnel information of Vendor, its Affiliates or
Subcontractors. Vendor Data shall not include TXUED Data.
 
“Vendor Facilities” shall mean the facilities owned or leased by Vendor and from
which Vendor provides any Services. Vendor Facilities are listed on
Schedule O.2 to the applicable Services Agreement, and include the portions of
certain facilities owned or leased by TXUED as indicated on Schedule O.2 to the
applicable Services Agreement.
 
“Vendor Owned Software” shall mean all Software products (and all attachments,
modifications, enhancements, improvements, documentation and Upgrades thereto
and Derivative Works thereof) owned, acquired or developed by or on behalf of
Vendor or Vendor’s Affiliates, excluding in each case any Work Product, and used
in connection with the Services.
 
“Vendor Personnel” shall mean those employees, representatives, contractors,
subcontractors and agents of Vendor, Subcontractors and Vendor’s Affiliates who
perform any Services under this Agreement.
 
“Weather Event” shall have the meaning given in Section 16.1.
 
“Work Product” shall mean any materials (including Materials), equipment
(including Equipment), tools, systems (including Systems), facilities,
structures and other products (including in each case any Products), and all
attachments, modifications, enhancements, improvements, documentation and
Upgrades thereto and Derivative Works thereof, that are acquired, obtained,
made, created, built, constructed, developed, implemented, designed, delivered,
integrated, installed and/or tested by or on behalf of Vendor, are provided or
delivered by Vendor as part of the Services.
 
“Work Request” shall have the meaning given in Exhibit 11.
 
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AMENDED AND RESTATED EXHIBIT 9
MASTER AGREEMENT

 
VENDOR INSURANCE

1.
Insurance

 
(a)
Requirements. Vendor agrees to keep in full force and effect and maintain at its
sole cost and expense the following policies of insurance with the specified
minimum limits of liability:

 

 
(i)
Workers’ Compensation and Employer’s Liability Insurance providing statutory
benefits in accordance with the laws and regulations of the State of Texas or
state of jurisdiction as applicable. The minimum limits for the employers’
liability insurance will be five hundred thousand dollars ($500,000) bodily
injury each accident, five hundred thousand dollars ($500,000) each employee
bodily injury by disease, five hundred thousand dollars ($500,000) policy limit
bodily injury by disease.

 

 
(ii)
Commercial General Liability Insurance, including bodily injury and property
damage, personal and advertising injury, contractual liability, and including
products and completed operations coverage continuing for two (2) years after
the expiration or any termination of this Agreement, with minimum limits of one
million dollars ($1,000,000) per occurrence for bodily injury, including death
and property damage.

 

 
(iii)
Commercial Business Automobile Liability Insurance for coverage of owned,
non-owned and hired autos, trailers or semi-trailers with a minimum combined
single limit of one million dollars ($1,000,000) per accident for bodily injury,
including death, and property damage.

 

 
(iv)
Excess Liability Insurance over and above the employers’ liability, commercial
general liability and automobile liability insurance coverage, with a minimum
limit of two million dollars ($2,000,000) per occurrence. Coverage must replace
exhausted aggregate limits under the coverages referenced in Sections 1(a)(i),
(ii) and (iii) above.

 

 
(v)
Such other insurance as may be required by Law or based on reasonable industry
custom or practice.

 
The insurance limits stated above can be satisfied by any combination of primary
and excess coverage. The insurance limits stated above shall not limit
recoveries should Vendor’s available insurance proceeds be greater than the
limits so specified. The insurance policies referenced in Sections 1(a)(i),
(ii), (iii), (iv) and (v) above, if written on a claims-made basis, shall be
maintained in full force and effect by Vendor for two (2) years following the
expiration or any termination of this Agreement.
 
Page 1 of 3

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(b)
Approved Companies. All policies must be issued by carriers having an A.M.
Best’s rating of “A-” or better, and an A.M. Best’s financial size category of
“VIII”, or better and/or Standard & Poor Insurance Solvency Review of “A-”, or
better.

 

 
(c)
Endorsements. Subject to approval by carrier, Vendor’s insurance policies
required herein under Sections 1(a)(ii) and (iii) of this Exhibit shall include
TXUED, TXUED’s Affiliates and Eligible Recipients and their respective officers,
directors and employees as Additional Insureds for any and all liability arising
at any time in connection with this Agreement. Workers’ compensation and
employers’ liability insurance as required under Section 1(a) shall include
TXUED and its Affiliates as alternate employer. Each policy shall provide that
it will not be canceled or materially altered except after the issuing company
endeavors to provide thirty (30) days advance written notice to TXUED. Should
any policy expire or be canceled and Vendor fails to immediately procure
replacement insurance as specified, TXUED reserves the right (but not the
obligation) to procure such insurance and to deduct the cost thereof from any
sums due Vendor under this Agreement. All insurance policies required under this
Section shall contain provisions that specify that the policies are primary and
shall apply without consideration for other policies separately carried and will
state each insured is provided coverage as though a separate policy had been
issued to each, except with respects to limits of insurance, and that only one
deductible will apply per occurrence regardless of the number of insureds
involved in the occurrence. Vendor shall be responsible for any deductibles or
retentions. Vendor shall obtain such endorsements to its policy or policies of
insurance as are necessary to cause the policy or policies to comply with the
requirements stated herein.

 

 
(d)
Certificates. Prior to commencement of Services, Vendor shall provide TXUED with
certificates of insurance evidencing compliance with this Section (including
evidence of renewal of insurance) signed by authorized representatives of the
respective carriers for each year that this Agreement is in effect. Each
certificate of insurance shall provide that the issuing company shall not
cancel, reduce, or otherwise materially alter the insurance afforded under the
above policies unless the issuing company endeavors to provide notice of such
cancellation or reduction has been provided at least thirty (30) days in advance
to:

 

   
TXU Electric Delivery Company

   
500 N. Akard

   
14th Floor

   
Dallas, Texas 75201

   
Attention: Chief Legal Officer

 
With a copy to:
 

   
TXU Electric Delivery Company

   
Risk and Insurance

   
500 N. Akard

   
Dallas, Texas 75201

Page 2 of 3

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At TXUED’s request, Vendor shall make copies of required insurance policies
available for inspection by TXUED. In addition, Vendor will require each of its
Subcontractors to provide adequate insurance for the Services subcontracted to
them. Any deficiencies in the insurance to be provided by Subcontractors will be
the responsibility of Vendor.
 

 
(e)
No Implied Limitation. The obligation of Vendor to provide the insurance
specified herein shall not limit or qualify in any way any obligation or
liability of Vendor provided elsewhere in this Agreement. The rights of TXUED,
its Affiliates and Eligible Recipients to insurance coverage under policies
issued to or for the benefit of one or more of them are independent of this
Agreement shall not be limited by this Agreement.

 

 
(f)
Insurance Subrogation. With respect to insurance coverage to be provided by
Vendor pursuant to Section 1(a) of this Exhibit, the insurance policies shall
provide that the insurance companies waive all rights of subrogation against
Vendor, TXUED, the Eligible Recipients and their respective Affiliates,
officers, directors and employees. Vendor waives its rights to recover against
TXUED, TXUED’s Affiliates and Eligible Recipients and their respective officers,
directors, and employees in subrogation.

 

2.
Risk of Loss

 

 
(a)
General. Each Party shall be responsible for risk of loss of, and damage to, any
TXUED Data, Utility Facilities (defined in Schedule A to the Field Services
Agreement), Products (defined in Exhibit 11) and Resources in its possession or
under its control. Vendor shall in all cases be deemed to possess and control
(i) all TXUED Data used by Vendor to provide the Services, (ii) all Products
from the seller’s, licensor’s, lessor’s or other third party’s location as
contemplated by “Ex-Works” or “EXW” (INCOTERMS 2000) to Close-Out (defined in
Exhibit 11) and (iii) all Resources used by Vendor to provide the Services.
TXUED shall in all cases be deemed to possess and control all Utility Facilities
and all facilities leased to Vendor under the terms of the Master Lease
Agreement. Each Party shall promptly notify the other of any damage (except
normal wear and tear), destruction or loss from any cause, or any theft or
governmental taking, of which such Party becomes aware (“Event of Loss”). The
Party that is deemed to be in possession and control (as aforesaid) of the TXUED
Data, Utility Facilities, Products or Resources that is the subject of an Event
of Loss shall in all cases be responsible for the cost of any necessary repair
or replacement of such TXUED Data, Utility Facilities, Products or Resources due
to an Event of Loss. In the event of an Event of Loss by TXUED, such repair or
replacement shall not be considered part of Vendor’s maintenance obligations,
but Vendor shall coordinate and oversee repair or replacement performed by a
third-party on a Pass-Through Expenses basis, or by Vendor at agreed-upon
prices.

 

 
(b)
Waiver. Vendor and TXUED each waives all rights to recover against the other
Party for damage, destruction, loss, theft, or governmental taking of its real
or tangible personal property (whether owned or leased) that is deemed to be in
its possession and control (as aforesaid) from any cause, including their
respective deductibles or self-insured retentions. In a manner consistent with
the foregoing, Vendor and TXUED will cause their respective insurers to issue
appropriate waivers of subrogation rights endorsements to all property insurance
policies maintained by each Party.

 
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AMENDED AND RESTATED EXHIBIT 2
MASTER AGREEMENT

EMPLOYEE TRANSITION TERMS
 
1.1
Transitioned Personnel.

 

 
(a)
Offers and Employment.

 

 
(i)
Transitioned Employees. All TXUED Personnel who accept Vendor’s offer of
employment and begin work with Vendor pursuant to this Agreement are referred to
as “Transitioned Employees.”

 

 
(ii)
Employment Effective Date. Each Transitioned Employee’s “Employment Effective
Date” shall mean the date that such Transitioned Employee begins employment with
Vendor, in accordance with applicable Laws.

 

 
(iii)
Vendor Offers of Employment. Vendor shall extend offers of employment to those
TXUED Personnel identified on Schedule M and shall waive any pre-conditions to
such offers, including background checks, drug testing and/or medical
examinations with respect to such TXUED Personnel. References to Vendor in this
Exhibit shall be deemed to include any Affiliate or Subcontractor of Vendor
which employs any Transitioned Employee to perform the Services contemplated by
this Agreement, and Vendor shall cause any such Affiliate or Subcontractor to
fully comply with the terms of this Exhibit. Such offers shall be for employment
with Vendor in positions comparable to those held by such employees at TXUED,
unless agreed otherwise by TXUED, and Vendor shall provide starting base wages
or salaries, benefit packages and other terms and conditions consistent with the
provisions of this Exhibit. Unless otherwise specified in Schedule M or agreed
by the Parties, TXUED Personnel accepting such offers shall be considered to
have been terminated from TXUED and hired by Vendor effective as of the
applicable Services Agreement Commencement Date. 

 

 
(iv)
Employees on Military Leave. With respect to any TXUED Personnel identified on
Schedule M who, on the applicable Services Agreement Commencement Date, is on
military leave, such TXUED Personnel shall remain an employee of TXUED until
such TXUED Personnel returns to work or his/her employment is otherwise
terminated. After such TXUED Personnel has returned from military leave, Vendor
shall promptly extend an offer of employment to such TXUED Personnel on the
terms and conditions of employment described in this Agreement, including this
Exhibit. Vendor’s obligation to extend such offers of employment to TXUED
Personnel returning from military leave is not limited to a prescribed period of
time but rather shall be made at any time such TXUED Personnel return from
military leave. TXUED Personnel accepting such offers shall be treated as
Transitioned Employees for all purposes of this Agreement. The Employment
Effective Date for such TXUED Personnel shall be the date on which Vendor
actually employs such TXUED Personnel.

 
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EXHIBIT 2
MASTER AGREEMENT

 
(v)
Employees on Other Types of Leave. With respect to any TXUED Personnel
identified on Schedule M who, on the applicable Services Agreement Commencement
Date, is on leave status for any reason other than as set forth in
Section 1.1(iv) of this Exhibit, including medical (Family Medical Leave Act or
otherwise), disability, salary continuation, sick leave, or other leave of
absence, which has been approved by TXUED in accordance with TXUED policies,
such employee shall remain an employee of TXUED until his/her employment is
otherwise terminated. If any such employee returns to work within six (6) months
after the applicable Services Agreement Commencement Date and provides to TXUED
any applicable supporting documentation required by TXUED policies for employees
returning to work from such leave, including but not limited to a return to work
release, Vendor shall promptly extend an offer of employment to such employee on
the terms and conditions of employment described in this Agreement, including
this Exhibit. TXUED Personnel accepting such offers shall be treated as
Transitioned Employees for all purposes of this Agreement. The Employment
Effective Date for such TXUED Personnel shall be the date on which Vendor
actually employs such TXUED Personnel. For any employee on leave status for any
reason other than as set forth in Section 1.1(iv) of this Exhibit on the
applicable Services Agreement Commencement Date who does not return within six
(6) months after the applicable Services Agreement Date, Vendor shall be under
no obligation to, but may, offer employment to such employee and, if such
employer accepts such offer, such employee shall be treated as a Transitioned
Employee hereunder, from and after the date on which Vendor actually employs
such employee.  

 

 
(b)
Additional Transitioned Employees. During the twelve (12) months following the
applicable Services Agreement Commencement Date, TXUED may designate additional
TXUED Personnel, including any Seconded TXUED Personnel, to whom offers of
employment may be extended by Vendor at the discretion of Vendor. The
compensation and other terms and conditions of such offers of employment shall
be as set forth in this Exhibit and TXUED Personnel accepting such offers shall
be treated as Transitioned Employees for all purposes of this Agreement. The
Employment Effective Date for any such employee shall be the date on which
Vendor actually employs such employee.

 
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EXHIBIT 2
MASTER AGREEMENT

 
(c)
Reemployment of Transitioned Employees. Notwithstanding anything to the contrary
in this Agreement (including the terms of Section 19.16 of the Master
Agreement), TXUED may solicit and re-hire any Transitioned Employee at any time
after the Services Agreement Commencement Date only with the consent of Vendor.

 

 
(d)
Training/Career Opportunities. Vendor shall offer training, skills development
and career growth opportunities to Transitioned Employees that are at least as
favorable as those offered generally to similarly situated employees of Vendor.

 
1.2
Compensation and Employee Benefit Plans. 

 

 
(a)
General. Except as otherwise provided in this Exhibit, each Transitioned
Employee and his or her dependents, shall, effective as of his or her Employment
Effective Date, be immediately eligible to participate in all employee benefit
plans, programs and employee policies of Vendor that are made available to
similarly situated employees of Vendor, unless a comparable (in terms of scope
and benefits) employee benefit plan, program or policy has been established for
Transitioned Employees. During the Term, compensation and benefits provided by
Vendor to Transitioned Employees shall be in compliance with the provisions of
this Exhibit, and shall be no less favorable than the compensation and benefits
generally available to similarly situated Vendor employees.

 

 
(b)
Years of Service Credit. With respect to each Transitioned Employee, Vendor
shall recognize all such Transitioned Employee’s years of service which are
recognized by TXUED under the applicable TXUED severance plan (“TXUED Service”),
for purposes of vesting, participation, eligibility for benefits, benefit
accrual (except for accrual for purposes of calculating benefits under the
Transitioned Employee Defined Benefit, as defined in clause (f) of this
Section), optional forms of payment, and any other right, benefit or feature
under each employee benefit plan, program and policy of Vendor, except (i) as
expressly set forth in Section 1.2(h) below with respect to Vendor’s standard
severance benefits which will be provided by Vendor as set forth in said
Section 1.2(h) and in addition to the severance benefits described in Schedule 2
attached to this Exhibit, (ii) that no Transitioned Employee shall be eligible
for any variable, incentive or other form of bonus compensation from Vendor for
or arising from any period of time prior to their applicable Employment
Effective Date, and any annual profit sharing contribution made on behalf of a
Transitioned Employee for 2006 under Vendor’s 401(k) and profit sharing plans
shall be prorated for the portion of 2006 following the Transitioned Employee’s
applicable Employment Effective Date and (c) that vacation accrual shall not
begin until January 1, 2007, but shall accrue prospectively at a rate that
recognizes all TXUED Service.

 
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 EXHIBIT 2
MASTER AGREEMENT

 

 
(c)
Compensation. The starting base wage or salary of each Transitioned Employee
shall be at least equal to that paid or provided to such Transitioned Employee
with TXUED immediately prior to his or her Employment Effective Date, unless the
Transitioned Employee is, with TXUED’s consent, placed in a position that is not
comparable to that held at TXUED immediately prior to his or her Employment
Effective Date. Vendor agrees that Vendor shall not, during the initial ninety
(90) day period following a Transitioned Employee’s Employment Effective Date,
decrease the Transitioned Employee’s starting base wage or salary. Additionally,
all Transitioned Employees shall be eligible to participate in Vendor’s
incentive compensation plans on a basis comparable to similarly situated Vendor
employees.

 

 
(d)
Employee Welfare Benefit Plans. Each Transitioned Employee shall be eligible
effective as of his or her Employment Effective Date to participate immediately
in Vendor’s employee welfare benefit plans, including medical, prescription
drug, dental, group life insurance, accidental death and dismemberment,
short-term disability, long-term disability and flexible spending accounts. With
respect to all such welfare plans, Vendor shall, or shall cause its insurance
carrier to: (i) waive all pre-existing condition limitations, waiting periods,
insurability requirements or similar limitations so that each Transitioned
Employee will be fully eligible to participate in each welfare plan of Vendor as
of his or her Employment Effective Date; and (ii) if administratively feasible
without material harm to Vendor grant credit toward applicable deductibles
attained by each Transitioned Employee under the comparable plan of TXUED.

 

 
(e)
Savings Plans. Each Transitioned Employee shall be eligible to participate in a
Vendor 401(k) plan, effective as of such Transitioned Employee’s Employment
Effective Date, at the same participation and match level as he or she had with
TXUED immediately prior to his/her Employment Effective Date. Amendments,
modifications or changes to Vendor’s 401(k) plan shall be at the sole discretion
of Vendor; provided, that Vendor’s 401(k) plan shall permit, in accordance with
applicable Law, direct trustee-to-trustee transfers and rollovers, in each case
in the form of cash and as contemplated under Section 402(c) of the Internal
Revenue Code, of Transitioned Employees’ TXUED “Thrift Plan” account balances,
including all outstanding loans made under such plan.

 

 
(f)
Retirement Benefit. TXUED shall arrange for each Transitioned Employee who
immediately prior to their Employment Effective Date participated in the TXU
Retirement Plan to be eligible after the Employment Effective Date for a
comparable retirement benefit under the TXU Retirement Plan. Accordingly, each
such Transitioned Employee shall be eligible to accrue service credit under the
TXU Retirement Plan for service completed with the Vendor, consistent with
regulatory imputed service rules and with the TXU Retirement Plan’s terms and
conditions (the “Transitioned Employee Defined Benefit”). A Transitioned
Employee who elects to retire under the TXU Retirement Plan will no longer
accrue additional service credit under the Transitioned Employee Defined
Benefit. Vendor shall provide the necessary employment information to TXUED for
purposes of administering the Transitioned Employee Defined Benefit. The Base
Services Charges for each Contract Year include no less than $10.6 million to
fund and to administer the Transitioned Employee Defined Benefit and Vendor
agrees to fund the cost of funding and administering the Transitioned Employee
Defined Benefit up to an amount not to exceed $10.6 million for each Contract
Year (which may include paying such amounts to TXUED so that TXUED may remit
such amounts to the TXU Retirement Plan and/or its administrator); provided that
TXUED shall have the right to notify Vendor prior to the commencement of any
Contract Year, that commencing with such Contract Year and for the remainder of
the Term, the Base Services Charges shall be reduced by $10.6 million per
Contract Year (reflected as a 1/24 credit on each Bi-Monthly Invoice) and TXUED
shall fund directly the costs of administering and funding the Transitioned
Employee Defined Benefit for such Contract Year and all future Contract Years in
which case Vendor shall not be responsible for any further costs of funding and
administering the Transitioned Employee Defined Benefit for such Contract Year
or any future Contract Year.

 
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EXHIBIT 2
MASTER AGREEMENT

 
(g)
Equity-Based Compensation Plans. Each Transitioned Employee shall be eligible to
participate in any equity-based compensation plan or arrangement of Vendor on a
basis comparable to similarly situated Vendor employees.

 

 
(h)
Severance Plan. With respect to any Transitioned Employee who executes, in a
timely manner, the TXUED Agreement and Release attached as Schedule 1 to this
Exhibit or such other form as TXUED shall require (the “Agreement and Release”),
if Vendor terminates such Transitioned Employee on or before December 31, 2006
for any reason other than Cause, including in connection with a transfer of such
Transitioned Employee to a Subcontractor (excluding Vendor’s Affiliates), Vendor
shall, in addition to Vendor’s standard severance benefits, provide such
Transitioned Employee with the severance benefits set forth in Schedule 2
attached to this Exhibit. For purposes of calculating Vendor’s standard
severance benefits only, Vendor shall credit Transitioned Employees with service
with Vendor and shall exclude prior TXUED Service. For purposes of this
Agreement, “Cause” is defined as (i) intentional or gross disregard of a Vendor
rule relating to employee conduct or gross misconduct resulting, in either case,
in material economic harm to Vendor, (ii) conviction of a felony or other crime
involving moral turpitude, (iii) refusal and/or continued failure to, in
Vendor’s reasonable judgment and discretion and consistent with Vendor’s stated
employment policies, satisfactorily perform the tasks, duties and
responsibilities assigned to a Transitioned Employee in his/her position with
the Vendor or (iv) failure of a Transitioned Employee to provide adequate
information for Vendor’s completion of I-9 documentation. TXUED shall notify
Vendor indicating each Transitioned Employee who executed the Agreement and
Release in a timely manner. For purposes of this Exhibit, each such Transitioned
Employee is referred to as a “Transitioned Employee who executes the Agreement
and Release”.

 
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EXHIBIT 2
MASTER AGREEMENT

 

 
(i)
Vacation Credits. For each Transitioned Employee who, by executing the form
attached as Schedule 3 to this Exhibit or such other form as TXUED shall
require, has elected to waive payment for unused accrued vacation time he or she
had with TXUED, Vendor shall credit such Transitioned Employees with the same
amount of paid vacation as was waived by such Transitioned Employees.
Transitioned Employees will be eligible to take such vacation with Vendor
consistent with Vendor’s applicable policies and on the same basis as any other
paid vacation accrued by Transitioned Employees as employees of Vendor.

 

 
(j)
Notice. For a period of two (2) years after a Transitioned Employee’s applicable
Employment Effective Date, Vendor shall notify TXUED within five (5) days of the
date that any Transitioned Employee leaves the employment of Vendor or any
Affiliate or Subcontractor of Vendor for whatever reason, whether voluntarily or
involuntarily and, if involuntarily, shall indicate whether the termination was
for “Cause” as defined in Section 1.2(h), in any event so that TXUED may
determine whether any Transitioned Employee who executes the Agreement and
Release remains eligible for any transition and severance benefits (the
“Separation Benefits”) offered in the Agreement and Release.

 

 
(k)
Reimbursement for TXUED Personnel Loans. Certain TXUED Personnel identified on
Schedule M owe money to TXUED for financial loans made under TXUED’s “Employee
Purchase Plan” and “Energy Conservation Plan” (together, the “Loans”). Following
the applicable Services Agreement Commencement Date, Vendor agrees to deduct
from such Transitioned Employee’s paychecks an amount equal to (i) the total
amount owed under the Loans by such Transitioned Employee as of his or her
Employment Effective Date, divided by (ii) the total number of paychecks that
shall be given to such Transitioned Employee during the remaining term of the
Loans owed by that Transitioned Employee, provided that such Transitioned
Employee first executes all appropriate payroll deduction authorization forms
proffered by Vendor. Should any such Transitioned Employee leave the employment
of Vendor or any Affiliate or Subcontractor of Vendor for any reason, whether
voluntarily or involuntarily, prior to the date on which the total amount owed
under the Loans by such Transitioned Employee is fully paid, then Vendor, to the
extent permitted by the terms of such loans, the employee’s executed payroll
deduction authorizations and applicable state law, shall collect the remaining
balance owed by such Transitioned Employee under the Loans from the Transitioned
Employee’s final paycheck and/or severance pay. In the event that a Transitioned
Employee’s Loans have not been fully paid following the termination of his/her
employment with Vendor, Vendor shall use all reasonable efforts to collect the
remaining balance owed from the Transitioned Employee. Vendor shall owe and pay
to TXUED all amounts collected from Transitioned Employees as described in this
Subsection as soon as administratively possible following each payroll period in
which deductions for Loans are made or each time such amounts are otherwise
collected from Transitioned Employees.

 
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EXHIBIT 2
MASTER AGREEMENT

 
1.3
Other Employee Matters.

 
As of each Transitioned Employee’s applicable Employment Effective Date, each
Transitioned Employee shall be an employee of Vendor for all purposes. Vendor
shall be responsible for funding and distributing benefits under the benefit
plans in which Transitioned Employees participate on or after each Transitioned
Employee’s applicable Employment Effective Date, except as provided for under
Section 1.2(f), as applicable, and for paying any compensation and remitting any
income, disability, withholding and other employment taxes for each Transitioned
Employee with respect to the period beginning on the Transitioned Employee’s
applicable Employment Effective Date. TXUED shall be responsible for funding and
distributing benefits under the TXUED benefit plans in which Transitioned
Employees participated with respect to the period prior to their Employment
Effective Date and for paying any compensation and remitting any income,
disability, withholding and other employment taxes for each Transitioned
Employee for the period prior to the applicable Employment Effective Date of
each Transitioned Employee. TXUED shall provide Vendor with such information in
TXUED’s possession reasonably requested by Vendor in order to fulfill Vendor’s
obligations under this Exhibit.
 
1.4
Vendor Acknowledgement and Indemnity Obligations.

 
Vendor shall be responsible for, and Vendor agrees to indemnify, defend and hold
harmless TXUED and its Affiliates and their respective officers, directors,
employees, agents, representatives, successors, and assigns from and against any
and all Losses attributable to any breach by Vendor of this Exhibit or the
Agreement that results in a violation of any Law, including the Worker
Adjustment and Retraining Notification Act (the “WARN Act”) or the regulations
promulgated thereunder, or failure of any legal obligations, including any
obligation, consistent with this Section 1.4, to ensure employees are fit to
perform the duties to which they are assigned.
 
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EXHIBIT 2
MASTER AGREEMENT

Vendor acknowledges that TXUED has informed it that the terms of this Agreement
as they apply to Transitioned Employees who execute the Agreement and Release
are being relied upon, in part, by such Transitioned Employees and TXUED as
consideration for the Agreement and Release. Vendor shall be responsible for,
and Vendor agrees to indemnify, defend and hold harmless TXUED and its
Affiliates and their respective officers, directors, employees, agents,
representatives, successors, and assigns from and against any and all Losses
attributable to any breach by Vendor of the terms of this Exhibit including any
breach by Vendor or any Affiliate or Subcontractor of Vendor that results in an
alleged or actual failure to provide the consideration for the Agreement and
Release.
 
TXUED agrees that, because Vendor is waiving, under this Agreement, any
pre-conditions to offers to TXUED personnel, including background checks, drug
testing and medical examinations, TXUED will, for the period of ninety (90) days
following the Services Agreement Commencement Date, indemnify, defend and hold
harmless Vendor and its Affiliates and their respective officers, directors,
employees, agents, representatives, successors, and assigns from and against any
and all Losses attributable to a claim or allegation of negligent hire,
negligent retention or negligent performance. On and after the ninety first
(91st ) day following the Services Agreement Commencement Date, Vendor shall be
solely responsible for ensuring that all of its employees, including
Transitioned Employees, are fit to perform the duties to which they are
assigned, and Vendor agrees to indemnify, defend and hold harmless TXUED and its
Affiliates and their respective officers, directors, employees, agents,
representatives, successors, and assigns from and against any and all Losses
attributable to a claim or allegation that the Transitioned Employees are not
fit for duty (including any allegations of negligent hire, negligent retention
or negligent performance).
 
Vendor acknowledges its obligation to offer employment to certain TXUED
Personnel returning from leaves of absence pursuant to as Sections 1.1(a)(iv)
and (v) of this Exhibit. Vendor shall be responsible for, and Vendor agrees to
indemnify, defend and hold harmless TXUED and its Affiliates and their
respective officers, directors, employees, agents, representatives, successors,
and assigns from and against any and all Losses attributable to any breach of
the foregoing obligation.
 
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AMENDED AND RESTATED
EXHIBIT 2, SCHEDULE 1
MASTER AGREEMENT
 
 
AGREEMENT AND RELEASE

This Agreement and Release (“Agreement”) is between the undersigned employee
(“Employee”) and TXU Electric Delivery Company (the “Company”) and sets forth
the terms of Employee’s separation from the Company and eligibility for certain
separation benefits from the Company. Employee’s employment with the Company is
ending on ________ __, 2006 (“Date of Separation”), and Employee is being
offered employment with _________________ (“Vendor”) beginning _______________,
2006. The Company is offering Employee the separation benefits described herein
in exchange for Employee’s agreements herein.

Employee has been given a period of forty-five (45) calendar days to review and
consider this Agreement before signing it. Employee understands that signing
this Agreement is an important legal act and has been advised by the Company to
consult with an attorney before signing this Agreement. If Employee decides to
accept the terms of this Agreement, Employee must sign and return the Agreement
to Betsy McFadden, c/o TXU Human Resources, 1601 Bryan Street, Dallas, Texas
75201, within forty-five (45) calendar days of receipt. Employee then has a
period of seven (7) calendar days after signing the Agreement to revoke
Employee’s signature (“Revocation Period”). Revocation shall be made by
delivering a written statement of revocation to Betsy McFadden at the above
address no later than the last day of the Revocation Period. Delivery of
revocation may be by hand, mail or overnight delivery service, but must be
received no later than the last day of the Revocation Period. In the event that
Employee revokes acceptance of the Agreement, the Company shall have no
obligation to provide Employee with any rights or benefits under the Agreement.
If timely revocation is not made, the Agreement shall be effective and
enforceable.

Separation Benefits. In exchange for Employee’s agreements herein, the Company
agrees to provide the following Separation Benefits to Employee:

Transition Bonus. The Company will pay Employee a one time lump sum payment of
$1,500 within four (4) weeks of the expiration of the Revocation Period.

Severance Payment and Benefits. Vendor will provide the severance payment and
benefits described below if Employee is terminated by Vendor on or before
December 31, 2006 for reasons other than Cause. For purposes of this Agreement,
“Cause” is defined as (i) intentional or gross disregard of a Vendor rule
relating to employee conduct, or gross misconduct resulting, in either case, in
material economic harm to Vendor, (ii) conviction of a felony or other crime
involving moral turpitude, (iii) refusal and/or continued failure to, in the
Vendor’s reasonable judgment and discretion and consistent with Vendor’s
employment policies, satisfactorily perform the tasks, duties and
responsibilities assigned to Employee in his/her position with the Vendor, or
(iv) failure of Employee to provide adequate information for Vendor’s completion
of I-9 documentation.

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EXHIBIT 2, SCHEDULE 1
MASTER AGREEMENT
 
 

 
(1)
Cash Severance Payment. A one-time cash severance payment equal to: (a) two (2)
weeks of Employee’s base pay for each year of service with Company that is
recognized by Company under the applicable Company severance plan (“Company
Service”) up to twenty (20) years of Company Service; and (b) three (3) weeks of
base pay for each year of Company Service over and above twenty (20) years of
Company Service, with a minimum severance payment equal to eight (8) weeks of
base pay. For purposes of calculating such severance payment, base pay will be
Employee’s annualized base pay rate in effect on the Employee’s Date of
Separation, as defined above.

 
(2)
Outplacement Services. Sixty (60) days of outplacement services starting on the
date of termination from Vendor, to be provided by a third party outplacement
consultant selected by Vendor.

 
(3)
COBRA. To the extent Employee elects to continue medical benefits pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), Employee
shall pay for continuation of health care coverage at the Vendor’s prevailing
employee rate for the number of weeks used to calculate the Cash Severance
Payment described above, and the prevailing COBRA rate for the remaining COBRA
period.

Continued Eligibility for Pro-Rated Incentive Award. Employee will be eligible
for a one time lump sum cash payment from the Company based on the 2006 target
incentive award for which Employee was eligible in the job position Employee
held immediately prior to separation (“Target Incentive Award”). Unless Employee
has resigned from employment with the Vendor or been terminated for Cause by the
Vendor prior to the time of payment, the Company will pay Employee such one time
lump sum cash payment based on the actual performance of the Company, as
determined in Company’s sole discretion, up to a maximum of the Employee’s
Target Incentive Award, prorated for the period of Employee’s employment with
the Company during the relevant performance period. Such prorated one time lump
sum cash payment, if any, will be made at the time incentive awards are paid to
Company employees.

Cash Payments in Lieu of any Forfeited Amounts under the Company Salary Deferral
Program (SDP) and/or the Deferred and Incentive Compensation Plan (DICP). If
Employee has previously been enrolled in the SDP or DICP, Company will pay
Employee a one time lump sum cash payment equivalent to Employee’s unvested
Company match balance in the SDP and/or DICP, with actual earnings thereon, as
of the Date of Separation, prorated for the period of Employee’s employment with
the Company during the relevant vesting period, up to the Date of Separation.
The payment, if any, will be made as soon as reasonably practical after
expiration of the Revocation Period. The payment to Employee by Company of any
vested balances under the SDP and/or DICP will be made in accordance with the
relevant plan terms.

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EXHIBIT 2, SCHEDULE 1
MASTER AGREEMENT

 
Waiver and Release. In exchange for the Separation Benefits set forth above
which will be provided to Employee by the Company pursuant to this Agreement and
which Employee acknowledges are in addition to payments and benefits that
Employee would be entitled to receive absent the Agreement, Employee
individually and on behalf of Employee’s spouse, heirs, successors, and assigns
hereby agrees not to sue and unconditionally releases, dismisses, and forever
discharges: (i) the Company, including but not limited to its predecessors,
successors, parents, subsidiaries, affiliated corporations, limited liability
companies and partnerships, including TXU Corp., TXU Business Services Company,
TXU Energy Company, LLC, TXU Energy Retail Company LP, TXU Portfolio Management
Company LP (d/b/a TXU Wholesale), TXU Energy Solutions Company, LP, TXU Electric
Delivery Company (f/k/a Texas Utilities Electric Company), TXU Gas Company, TXU
Generation Company LP, TXU Generation Management LLC, TXU Big Brown Company LP,
TXU Enterprise Holdings, LLC and all of their employee benefit plans, officers,
directors, fiduciaries, employees, assigns, representatives, agents, and counsel
(collectively the “Released Parties”); and (ii) Vendor from any and all claims,
demands, liabilities, obligations, agreements, damages, debts, and causes of
action arising out of or connected with Employee’s employment with or separation
from the Company or any of the Released Parties. This waiver and release
includes, but is not limited to, all claims and causes of action under or
related to: (a) Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of 1991, the Civil Rights Act of 1866, the Age Discrimination in Employment Act
of 1967, the Americans with Disabilities Act, the Employee Retirement Income
Security Act of 1974, Section 211 of the Energy Reorganization Act, the
Sarbanes-Oxley Act of 2002, the Older Workers Benefit Protection Act of 1990,
the Worker Adjustment and Retraining Notification Act, the Family and Medical
Leave Act, the Texas Labor Code (including but not limited to Chapter 451) and
the Texas Commission on Human Rights Act, including but not limited to any
amendments to any of the foregoing laws; (b) all state and federal statutes and
regulations; (c) all oral or written contract rights, including but not limited
to any rights under any Company incentive plan, program and/or labor agreement;
and (d) all claims under common law, including but not limited to breach of
contract, tort or for personal injury of any sort.

No Outstanding Complaints. Employee represents that Employee has not filed any
complaints of any kind whatsoever with any local, state, federal, or
governmental agency or court against the Company based upon Employee’s
employment with the Company.

Effect on Future Claims. This Agreement precludes Employee from recovering any
relief as a result of any lawsuit, grievance, or claim brought by Employee or on
Employee’s behalf arising out of Employee’s employment with or separation from
the Company as of or prior to the date of execution of this Agreement. However,
nothing in this Agreement affects Employee’s entitlement, if any, to workers’
compensation or unemployment compensation. In addition, nothing in this
Agreement prohibits Employee from raising or pursuing any safety concerns with
any federal, state, or local government agency or from cooperating in any
investigation of a safety issue. Nothing in this Agreement restricts Employee
from communications with, filing a charge or complaint with, or full cooperation
in the investigations of, any governmental agency on matters within their
jurisdictions or from cooperating with the Company in any internal
investigation. The Agreement does prohibit Employee from recovering any relief,
including but not limited to monetary relief, as a result of such activities.

Page 3 of 6

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EXHIBIT 2, SCHEDULE 1
MASTER AGREEMENT

 
Confidentiality and Non-Disclosure. Employee acknowledges and agrees that,
during the course of employment with the Company, Employee acquired Confidential
and Proprietary Information. “Confidential and Proprietary Information” means
non-public information used in or related to the business of the Company and of
any of the Released Parties. Employee acknowledges and agrees that, even after
termination of Employee’s employment with the Company, pursuant to Texas law,
the Company’s Code of Conduct and this Agreement, Employee is obligated not to
use, disclose, or publish in any way Confidential and Proprietary Information
and is obligated to return to the Company all originals and copies of any
materials containing such information in Employee’s possession, custody, or
control. Employee also agrees that a breach of this paragraph would cause
immediate and irreparable loss, damage, and injury to the Company; that damages
for such a breach would be exceedingly difficult, if not impossible, to
estimate; and that the Company would have no adequate remedy at law.
Accordingly, Employee acknowledges that injunctive relief would be appropriate
relief for such breach.

No Disparagement. Employee agrees not to make any false or disparaging,
negative, unflattering, accusatory, or defamatory remarks or references, whether
written or oral, about the Company or any of the Released Parties in any
dealings with third parties (except as expressly permitted by this Agreement).
This paragraph would not be applicable to any testimony subpoenaed or given
under oath by Employee. In addition, Employee will not take any action that
primarily is designed or intended to have the effect of discouraging any
employee, lessor, licensor, customer, supplier, or other business associate of
the Company from maintaining its business relationships with the Company or any
of the Released Parties.

Withholding. The Company may withhold from any amounts payable under this
Agreement such federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation. In addition, Employee expressly
authorizes and agrees that any amounts that Employee owes regarding
Company-issued or sponsored travel or credit cards, and any amounts that
Employee owes the Company, or any Released Parties, including amounts owed under
the Energy Conservation Plan, the Appliance Purchase Plan, vacation overpayment
and salary overpayments, may be offset and deducted from Employee’s final
paycheck from the Company and/or any payments under this Agreement. In the event
that the amount of Employee’s final paycheck and separation payments is not
sufficient to fully repay the amounts owed, Employee acknowledges a personal
debt to the Company and agrees to promptly pay the Company the full amount of
that debt.

Tax and Financial Implications of Agreement. Employee acknowledges and agrees
that none of the Released Parties has given Employee any financial planning, tax
or similar advice with regard to the Agreement. Employee further acknowledges
that the financial, tax and similar effects of Employee’s decisions relating to
the Agreement will depend on Employee’s particular circumstances, that Employee
should obtain advice from Employee’s own financial or tax adviser, and that none
of the Released Parties are responsible for, or obligated in any way with
respect to, the financial, tax or any other consequences of Employee’s decision
to accept the benefits offered under the Agreement.

Page 4 of 6

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EXHIBIT 2, SCHEDULE 1
MASTER AGREEMENT

 
Severability and Modification. If any term, provision, covenant, or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of this Agreement and the other terms,
provisions, covenants and restrictions hereof shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. No modification
of this Agreement shall be binding on any of the parties unless it has been
mutually agreed to by the parties, in a writing signed by both parties and
identified as an amendment to this Agreement.

Breach by Employee. Employee understands and agrees that, in the event of breach
by Employee of any of the terms and conditions of this Agreement, the Company
will be entitled to recover all costs and expenses as a result of Employee’s
breach, including reasonable attorneys' fees and costs.
 
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EXHIBIT 2, SCHEDULE 1
MASTER AGREEMENT

 
EMPLOYEE HAS READ THIS AGREEMENT AND FULLY UNDERSTANDS ALL OF ITS TERMS AND WHAT
THEY MEAN. NO OTHER PROMISE, INDUCEMENT, THREAT, AGREEMENT OR UNDERSTANDING OF
ANY KIND OR DESCRIPTION WHATSOEVER HAS BEEN MADE WITH OR TO EMPLOYEE TO CAUSE
EMPLOYEE TO SIGN THIS AGREEMENT. EMPLOYEE ENTERS INTO AND SIGNS THIS AGREEMENT
KNOWINGLY AND VOLUNTARILY, WITHOUT DURESS OR COERCION OF ANY KIND WHATSOEVER AND
WITH THE INTENT OF BEING LEGALLY BOUND BY THIS AGREEMENT.

  
    
Employee Signature
Date
       
  
    
Employee Name (Please Print)
         
Employee’s Address:
         
 
          
 
    

 
TXU Electric Delivery Company

By:
  
        
Date
 

 
Name/Title:
  
 

 
Page 6 of 6

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AMENDED AND RESTATED
EXHIBIT 2, SCHEDULE 2
MASTER AGREEMENT

SEVERANCE BENEFITS

The severance benefits to be provided by Vendor to Transitioned Employees who
satisfy the criteria set forth in Section 1.2(h) of Exhibit 2 are as follows:

 
1.
Vendor shall provide the affected Transitioned Employee with not less than two
(2) weeks notice of termination so that the Transitioned Employee remains on the
Vendor’s payroll for not less than two (2) weeks after such notice and prior to
termination.

 
2.
Vendor shall pay the affected Transitioned Employee a one-time cash severance
payment equal to: (a) two (2) weeks of such Transitioned Employee’s base pay for
each year of TXUED Service for which the Transitioned Employee is credited under
Section 1.2(b) of Exhibit 2 up to twenty (20) years of TXUED Service; and (b)
three (3) weeks of base pay for each year of TXUED Service for which the
Transitioned Employee is credited under Section 1.2(b) of Exhibit 2 over and
above twenty (20) years of TXUED Service. For purposes of calculating such
severance payment, base pay will be the Transitioned Employee’s annualized base
pay rate in effect on the Transitioned Employee’s applicable Date of Separation
as defined in Schedule 1 to Exhibit 2. The minimum number of weeks of severance
pay provided for in this Section shall be eight (8) weeks of base pay.

 
3.
Vendor shall, at its cost, provide the affected Transitioned Employee with sixty
(60) days of outplacement services commencing with the date of termination, such
services to be provided by a reputable third party outplacement consultant
selected by Vendor.

 
4.
Vendor shall provide the affected Transitioned Employee with continuation health
care coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”) with the Transitioned Employee contributing Vendor’s prevailing
employee rate for such coverage for the number of weeks used to calculate the
severance payment described in Section 2 of this Schedule, and the prevailing
COBRA rate for the remaining COBRA period.

 
Page 1 of 1

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AMENDED AND RESTATED
EXHIBIT 2, SCHEDULE 3
MASTER AGREEMENT

UNUSED VACATION ELECTION

I have accepted a job offer with _________________ (“Vendor”) and understand
that I have an election to make regarding any vacation that I have accrued but
not used during my employment with TXU Electric Delivery Company (the
“Company”). By checking one of the boxes below, I make the following election:

o
I elect to receive payment from Company following the termination of my
employment with Company for any unused vacation that I have accrued but not yet
used as of the termination of my employment with Company. I understand that as a
result of this election, I will not be eligible for any vacation days or
vacation pay with Vendor until January 1, 2007.

o
I elect to receive credit with Vendor for all of the unused vacation that I have
accrued but not yet used as of the termination of my employment with Company. I
understand that I will be eligible to use such vacation credit with Vendor
consistent with Vendor’s applicable policies. I acknowledge that this election
to receive credit for my unused vacation is in lieu of receiving any payment
from Company for unused vacation. Thus, I hereby knowingly waive any right to
make a claim against Company and its affiliated entities and their employees,
agents and representatives for vacation pay and expressly authorize that
vacation pay not be included in my final paycheck from Company.

o
 
I elect to receive payment from Company upon the termination of my employment
for some of the unused vacation that I have accrued but not yet used as of the
termination of my employment with Company, and to receive credit with Vendor for
the remaining unused vacation that I have accrued but not yet used as of the
termination of my employment with Company. I understand that I will be eligible
to use such vacation credit with Vendor consistent with Vendor’s applicable
policies. I acknowledge that this election to receive credit for some of my
unused vacation is in lieu of receiving payment from Company for such unused
vacation. Thus, I hereby knowingly waive any right to make a claim against
Company and its affiliated entities and their employees, agents and
representatives for vacation pay and expressly authorize that vacation pay not
be included in my final paycheck from Company to the extent I have elected to
receive credit with Vendor for the remaining unused vacation that I have accrued
but not yet used as of the termination of my employment with Company.

Total Unused Vacation Available:
 
 
 
 
     
Unused Vacation to be Paid upon Termination:
 
 
 
 
     
Unused Vacation to be Credited by Vendor:
 
 
 

 
Page 1 of 2

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AMENDED AND RESTATED
EXHIBIT 2, SCHEDULE 3
MASTER AGREEMENT
 
 
I HAVE READ THIS AGREEMENT AND FULLY UNDERSTAND ALL OF ITS TERMS AND WHAT THEY
MEAN. NO OTHER PROMISE, INDUCEMENT, THREAT, AGREEMENT OR UNDERSTANDING OF ANY
KIND OR DESCRIPTION WHATSOEVER HAS BEEN MADE WITH OR TO ME TO CAUSE ME TO SIGN
THIS AGREEMENT. I ENTER INTO AND SIGN THIS AGREEMENT KNOWINGLY AND VOLUNTARILY,
WITHOUT DURESS OR COERCION OF ANY KIND WHATSOEVER AND WITH THE INTENT OF BEING
LEGALLY BOUND BY THIS AGREEMENT.

 
  
    
Employee Signature
Date
       
 
     
Employee Name (Please Print)
         
Employee’s Address:
                      
  
    

 
TXU Electric Delivery Company

By:
  
        
Date
 

 
Name/Title:
 
 

Page 2 of 2

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT
 
 
GOVERNANCE/OPERATIONAL RELATIONSHIP
 

***
 
 
 
 
 
 

 
 
 
 
***
CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Page 1 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT
 
 
 
 ***
 

 
 
 
 
 
 
 
 
 
 
 
Page 2 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page 3 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page 4 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page 5 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page 6 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page 7 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT
 
 
 
 
 
 
 
Page 8 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page 9 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT

 
 
 
 
 
 
 
 
 
 
 
Page 10 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT
 
 
 
 
 
Page 11 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT

 
 
 
 

 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Page 12 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page 13 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT
 
 
 

 
 

 
 

 
Page 14 of 15

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AMENDED AND RESTATED EXHIBIT 8
MASTER AGREEMENT
 
 
 
Page 15 of 15

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EXHIBIT 11
MASTER AGREEMENT

***
 
 
 
 
***
CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

 
Page 1 of 1

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AMENDED AND RESTATED EXHIBIT 12
MASTER AGREEMENT

 
RECORD RETENTION POLICY
 
Purpose

The purpose of this policy (the “Policy”) is to establish a Record retention,
storage and disposal program based upon the following principles:

 
·
To retain all Records as long as required by applicable Law;

 
·
To retain all Records necessary for business reasons for a period of time
reasonably assuring the availability of such Records;

 
·
To treat electronic Records, including e-mails and those Records maintained on
hard drives, disks, magnetic tapes, or other electronic means, by the same
guidelines as other Records.

 
·
To assure privacy and security of Records as necessary;

 
·
To reduce storage space requirements;

 
·
To improve operational efficiency;

 
·
To enhance consistency in Records disposition, and

 
·
To assure cost savings (i.e., by only retaining business information necessary
for the conduct of TXUED’s business.)

Definition

A “Record” is information, documents and data that are fixed in a medium,
regardless of physical form, that is generated or received by TXUED in
connection with transacting its business, and are preserved for a period of time
as evidence of the organization, functions, policies, decisions, procedures,
operations or other activities of TXUED. Records include correspondence,
e-mails, memos, forms, reports, spreadsheets, computer printouts, pictures,
microforms, plans and drawings, graphs, computer files and programs, databases,
audio/video recordings, word processing, charts and images. Record formats
include hard paper copies, books, receipts, facsimiles, electronic mail,
documents and data created or stored electronically but not printed, documents
and data stored on disks, diskettes, CD-ROMs, tape or other storage media, and
any compilations of any of the above, whether maintained in individual offices
or TXUED’s premises, at home, or at any other offsite location, including
without limitation on laptop computers or other mobile devices.
 
Page 1 of 4

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AMENDED AND RESTATED EXHIBIT 12
MASTER AGREEMENT

 
Policy

Retaining Records

Records created or maintained at any TXUED place of business or storage location
shall be assigned a specific retention period consistent with applicable
requirements of government regulators or agencies and Laws, and anticipated
usefulness to the conduct of TXUED’s business.

Retention Standards 

 
1.
All Records shall be retained for the period required by applicable Laws.

 
2.
Adequate Records shall be developed and maintained to document TXUED’s
compliance with all relevant Laws.

 
3.
All Records necessary for business purposes shall be retained for a period of
time that will reasonably assure the availability of those Records when needed.

 
4.
Records vital to the ongoing operations of TXUED shall be identified and
appropriately safeguarded.

 
5.
Electronic Records required for legal or business reasons shall be maintained in
a retrievable format.

 
6.
All Records not necessary for legal or business reasons and not required to be
retained by Law shall be destroyed in order to reduce the high cost of storing,
indexing and handling the vast amount of documents that would otherwise
accumulate.

 
7.
Destruction of Records shall take place only in compliance with this Policy in
order to avoid any incorrect inference that any document was destroyed in
anticipation of a specific problem.

 
8.
Documents that are not otherwise subject to retention for business reasons may
need to be retained because of unusual circumstances, such as litigation or a
government or internal investigation. If for any reason it is believed that an
unusual circumstance exists or arises in which documents should be retained past
their scheduled retention period, TXUED’s General Counsel should be notified
immediately. When litigation or an investigation occurs, TXUED’s General Counsel
or his or her designee will notify the appropriate departments and direct that
relevant categories of documents be labeled for retention until further notice.

Page 2 of 4

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AMENDED AND RESTATED EXHIBIT 12
MASTER AGREEMENT
 

 
9.
The privacy and security of Records shall be appropriately assured. (See
Sensitive Employee Information and Sensitive Customer Information Policy.)

 
10.
Records such as notes, memoranda, letters, reports, laboratory notebooks,
computer disks, tapes, etc., maintained in individual offices, at home, or any
other off-site location are subject to this policy and shall be handled
accordingly.

 
Destroying Records

Records destruction will be scheduled and accomplished in the regular course of
business in compliance with the approved Records retention schedules and as set
out in this Policy. Records are to be maintained only for their required
retention period. In case of a pending or imminent audit, litigation, or
regulatory investigation or proceeding, relevant Records will be held from
destruction for such period as necessary until the issue is finalized and notice
of termination of any extended retention has been provided in writing. Records
no longer required for business or legal purposes should be discarded or
destroyed in accordance with this Policy.

Vendor may request approval that Records be retained past the established
destruction date, provided a valid business reason exists for continued
retention. Requests for exceptions from this Policy must be supported by
evidence that the basic objections above will be met. Exceptions shall not be
routinely granted, as it is vital to the proper and efficient use of the Policy
to have regular destruction of documents to avoid the inference of improper
destruction.

Roles and Responsibilities

Vendor is accountable for maintaining, indexing, storing, reviewing, retrieving,
and destroying Records consistent with this Policy. Vendor shall comply with
this Policy and dedicate Resources sufficient for compliance.

Vendor shall:

 
▪
Actively participate and support an ongoing analysis of active and inactive
Records;

 
▪
Counsel Vendor Personnel so they understand the practices governing Records
generated or handled, and to properly retain or dispose of such Records;

 
▪
Assign Vendor Personnel to actively coordinate the transition of Records from
active to inactive status and process those Records to on-site or off-site
storage or destruction;

 
▪
Keep current an index of all Records and locations in a matter permitting easy
access and retrieval;

 
▪
Ensure that Records are periodically processed for storage or destruction in
accordance with TXUED-approved Record retention schedules;

 
▪
Maintain a master list of TXUED-approved retention schedules for all types or
kinds of Records; and

Page 3 of 4

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AMENDED AND RESTATED EXHIBIT 12
MASTER AGREEMENT

 

 
▪
Conduct an annual review of this Policy to ensure retention/destruction
compliance pursuant to Policy and department requirements.

Vendor Personnel shall:

 
▪
Comply with restrictions concerning the sharing of confidential, proprietary,
and material nonpublic information;

 
▪
Properly retain and dispose of Records, including electronic information, in
compliance with this Policy;

 
▪
Maintain Records in such a manner as to allow for reasonable retrieval and/or
destruction; and

 
▪
Review whether there is a business need to retain copies of any “FINAL”
document. Unless necessary to perform a day-to-day job function, if the
individual reasonably believes the “FINAL” document must be preserved pursuant
to this Policy, then all previous or working copies authored subsequent to the
“FINAL” document should be deleted or destroyed as soon as possible.

Implementation

If a question arises regarding the need to retain certain Records, the Records
should be retained until the question regarding retention is resolved.

Copies of Records, including correspondence, memoranda, notes, computer disks,
tapes, etc. maintained in individual offices or any other off-site location are
subject to this Policy and should not be retained in excess of this Policy.
 
 
 Page 4 of 4

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