exv10w41



 





EXHIBIT 10.41




INFORMATION TECHNOLOGY SERVICES AGREEMENT




     This Information Technology Services Agreement (“Agreement”), dated as of January 1,
2007 (the “Effective Date”), is between Perot Systems Corporation, a Delaware corporation (“Perot
Systems”), and Hillwood Enterprises, L.P., a Texas limited partnership (“Client”).



RECITALS




     WHEREAS, Client and Perot Systems have entered into a Master Agreement for Information
Services dated April 1, 2001 (including the Schedules and the Appendices thereto, (the “Prior
Agreement”) pursuant to which Perot Systems provides certain information technology services to
Client; and



     WHEREAS, Client and Perot Systems desire to restate the terms and conditions of the Prior
Agreement and to amend the terms and conditions of their business relationship in this Agreement as
of the date hereof;


NOW, THEREFORE, for and in consideration of the agreements set forth below, Perot Systems
and Client agree as follows:




Article 1

Agreement and Term





	1.1	 	Agreement. Perot Systems will provide to Client the information technology services
described in Schedule A and any additional services mutually agree to by the parties.
	 
	1.2	 	Term. The term of this Agreement will begin on the Effective Date and will end on
the tenth anniversary of the Effective Date (the “Initial Term”) unless earlier
terminated in accordance with the terms of this Agreement. The Agreement will automatically
extend at the end of the Initial Term for consecutive one-year renewal terms (“Renewal
Terms”) unless either party provides to the other party at least six months prior written
notice that the Agreement will not be extended. The Initial Term and the Renewal Terms are
collectively referred to herein as the “Term.”





Article 2

Account Management and Personnel





	2.1	 	Client Executive. Perot Systems will designate a representative (“Client
Executive”) who will be directly responsible for coordinating and managing the delivery of
the Services and will have full authority to act on Perot Systems’ behalf with respect to all
matters relating to this Agreement. The Client Executive will work with the Client
Representative to address Client’s information technology issues and strategies and the
parties’ relationship under this Agreement. Before designating or replacing its Client
Executive, Perot Systems will consult with and obtain the approval of Client, which shall not
be unreasonably delayed or withheld.
	 
	2.2	 	Client Representative. Client will designate a representative (“Client
Representative”) who will be directly responsible for supervising the delivery of the
Services and have full authority to act on




 









 






	 	 	Client’s behalf with respect to all matters relating to this Agreement. The Client
Representative will work with the Client Executive to address Client’s information
technology issues and strategies and the parties’ relationship under this Agreement.
	 
	2.3	 	Subcontractors. Without limiting Perot Systems’ obligations under this Agreement,
the parties acknowledge and agree that Perot Systems may, upon prior agreement of Client, use
subcontractors or affiliates to perform certain of its obligations under this Agreement.
Unless otherwise agreed, Perot Systems shall be responsible for the performance of any
affiliate or subcontractor personnel providing Services to the same extent as if such
personnel were Perot Systems employees. Notwithstanding the foregoing, Perot Systems may
subcontract to a subsidiary of Perot Systems, or any corporation or entity in which the Perot
Systems has at least a fifty percent (50%) ownership interest.
	 
	2.4	 	Assignment, Qualifications, Retention and Replacement of Perot Systems
Personnel






	 	(a)	 	Before assigning a dedicated individual to Client’s account, Perot Systems will
notify Client of the proposed assignment, introduce the individual to appropriate
Client representatives (and, upon request, provide those representatives with the
opportunity to interview the individual) and provide Client with a résumé and any other
information about the individual that Client reasonably requests. If Client objects to
the proposed assignment such individual will not be assigned to Client’s account.
	 
	 	(b)	 	The personnel Perot Systems assigns to support Client’s account will be
properly educated, trained and qualified for the services they are to perform.
	 
	 	(c)	 	During the first 2 years of assignment Perot Systems will not replace or
reassign any dedicated individual assigned to Client’s account unless Client consents
to such reassignment or replacement, or such person voluntarily resigns from Perot
Systems, is dismissed by Perot Systems for cause, fails to perform his or her duties
and responsibilities pursuant to this Agreement, or dies or is unable to work due to
his or her disability. Such reassignment or replacement shall occur only after a
suitable replacement has been approved by Client. Perot Systems will replace such
individual with an individual who has equivalent qualifications in Client’s Software
applications to perform the applicable services.
	 
	 	(d)	 	Prior to incurring training costs for a dedicated individual assigned to
Client’s account related to Client specific applications or systems, Perot Systems will
share with Client the individual development plan of the applicable individual
including any possible future reassignments. The parties agree that if the individual
is transferred by Perot Systems without Client’s consent during the first 2 years of
assignment, then Client will not be responsible for the replacement individual’s
training costs related to Client specific applications or systems.
	 
	 	(e)	 	If Client determines in good faith that the continued assignment of any of the
Perot Systems Personnel to Client’s account is not in Client’s best interests, then
Client will give Perot Systems notice to that effect. After receiving that notice,
Perot Systems will have a reasonable period of time in which to investigate the matters
stated in that notice, discuss its findings with Client, and resolve any problems with
such person.
	 
	 	(f)	 	Any Perot Systems’ employee assigned to Client’s account shall execute a
confidentiality agreement in the form of the attached Schedule C.





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Article 3

Services





	3.1	 	Base Services. During the Term, Perot Systems will provide to Client the services,
software, equipment and other resources described in Schedule A (the “Base
Services”) and other related services that are mutually agreed to by the parties and that
are within the IS Annual Budget for the Base Services (as set forth in Appendix B-2
of Schedule B).
	 
	3.2	 	Additional Services. Client may from time to time during the Term request that Perot
Systems provide additional services, functions and responsibilities not within the Perot
Systems IS Annual Budget for the scope of the Base Services (“Additional Services”).
Any such Additional Services will be provided under Task Order.





Article 4

Client Responsibilities





	4.1	 	Cooperation. Client shall reasonably cooperate with Perot Systems by, among other
things, making available, as reasonably requested by Perot Systems, management decisions,
information, approvals or disapprovals, and acceptances or rejections in a reasonably timely
manner so that Perot Systems may fulfill its obligations under this Agreement.
	 
	4.2	 	Software. Client will provide Perot Systems with access to, and the necessary rights
to operate, modify, and enhance, (a) the Client proprietary software described in Schedule
A and such other proprietary software as is necessary for Perot Systems to perform its
obligations under the Agreement (“Client Proprietary Software”) and (b) the third
party software described in Schedule A and such other vendor software as is necessary
for Perot Systems to perform its obligations under the Agreement (“Client Vendor
Software”). Client Proprietary Software and Client Vendor Software are collectively
referred to herein as “Client Software.” Client will pay all license, maintenance and
other fees associated with the Client Software and any access or other fees associated with
obtaining such rights to the Client Software.
	 
	4.3	 	Access to Client Facilities. Client shall provide Perot Systems access to its
facilities and will provide at such facilities such office furnishings, janitorial service,
telephone service, utilities (including air conditioning) and office-related equipment,
supplies, and duplicating services as Perot Systems may reasonably require in connection with
the activities contemplated hereunder. Client will provide such access 24 hours a day, seven
days a week. Perot Systems shall obey all generally applicable rules and procedures at any
Client facility of which Client has notified Perot Systems.
	 
	4.4	 	Other Technology. Client will provide Perot Systems with access to the hardware,
equipment, and technology related items and services listed in Schedule A and such
other hardware, equipment and technology related items and services as otherwise reasonably
necessary for Perot Systems to perform its obligations under the Agreement (the “Client
Technology”). Client will pay all license, maintenance and other fees associated with the
Client Technology and any access or other fees associated with obtaining such rights to the
Client Technology.





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Article 5

Payments to Perot Systems





	5.1	 	Base Charges. During the Term, Client will pay Perot Systems each month for the
Base Services the amounts set forth in Schedule B (“Base Charges”).
	 
	5.2	 	Additional Services Charges. During the Term, Client will pay Perot Systems each
month for the Additional Services the amounts set forth in the applicable Task Order.
	 
	5.3	 	Reimbursable Expenses. Client will pay or reimburse Perot Systems for its reasonable
out-of-pocket travel and travel related expenses incurred in connection with its performance
of the Services, which have received Client’s prior approval. Perot Systems will provide
documentation to Client in support of Perot Systems’ reimbursable expenses.
	 
	5.4	 	Taxes. There will be added to any charges under this Agreement, and Client will pay
or reimburse to Perot Systems, amounts equal to any taxes, however designated or levied based
upon such charges, the Services, or this Agreement, including state and local taxes, and any
taxes or amounts in lieu thereof paid or payable by Perot Systems in respect of the foregoing,
excluding franchise taxes and taxes based on the net income or net margin of Perot Systems.
Each party will cooperate with the other in minimizing any applicable tax and, in connection
therewith, Client will provide Perot Systems any resale certificates, information regarding
out-of-state use of materials, services or sales, or other exemption certificates or
information reasonably requested by Perot Systems.
	 
	5.5	 	Invoicing and Payment Terms.






	 	(a)	 	Invoicing. Perot Systems will invoice Client monthly in arrears for
all charges due. Perot Systems will compute periodic charges on a calendar month basis
and prorate those charges for any partial month of the Term.
	 
	 	(b)	 	Payment Terms. All charges shall be paid within one month after the
date of the applicable Perot Systems invoice.
	 
	 	(c)	 	Late Payments. Any amount not paid when due will thereafter bear
interest at the lesser of (i) 1.5% per month or (ii) the highest rate allowed by law.
Client will be responsible for any and all costs of collection, including reasonable
attorney’s fees, for any breach of Client’s obligations to pay amounts owed under this
Agreement.






	5.6	 	Financial Audit. Perot Systems will retain records supporting its charges under this
Agreement for three years following its expiration or termination. Client and its auditors
(including internal audit staff and external public accounting firm auditors) may audit the
relevant financial records of Perot Systems on reasonable prior notice, provided that any
external auditor executes a non-disclosure agreement with Perot Systems.





Article 6

Confidentiality, Proprietary Rights and Audit Rights





	6.1	 	Client Data. All data and information provided by or on behalf of Client to Perot
Systems in connection with the Services will remain the property of Client. Perot Systems
will use such data or




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	 	 	information solely in connection with the activities contemplated by this Agreement. Upon
any termination of this Agreement, Perot Systems shall provide to Client all copies of such
data and information in its possession, and shall also provide to Client copies of other
documentation used exclusively in support of Client.






	6.2	 	Confidential Information.






	 	(a)	 	Confidential Information. All Confidential Information relating to
Client or Perot Systems will be held in confidence by the other party to the same
extent and in at least the same manner as such party protects its own confidential or
proprietary information. Neither Perot Systems nor Client may disclose, publish,
release, transfer or otherwise make available Confidential Information of the other
party to, or for the use or benefit of, any third party without the other party’s
written consent. The term “Confidential Information” is defined to mean, with
respect to Client and Perot Systems, all confidential or proprietary information,
documentation, data, material or know-how concerning or in any way relating to Client
or Perot Systems, respectively, or to Perot Systems’ or Client’s respective business,
customers or suppliers that is proprietary or is not, on the date such information is
disclosed, publicly available, including, without limitation (i) with respect to
Client, the information relating to Client or its customers that is contained in the
data files of Client and the Client Proprietary Software, (ii) with respect to Perot
Systems, all costing and pricing information of Perot Systems, the Perot Systems
Software and the Perot Systems Tools, and (iii) with respect to each party, the terms
of this Agreement.
	 
	 	(b)	 	Certain Permitted Disclosures. Each of Perot Systems and Client will,
however, be permitted to disclose relevant aspects of the other party’s Confidential
Information to its respective officers, agents, subcontractors and employees to the
extent that such disclosure is reasonably necessary for the performance of its duties
and obligations under this Agreement; provided, however, that such party will take
reasonable measures to prevent, and shall remain responsible for, the disclosure of
Confidential Information of the other party in contravention of the provisions of this
Agreement by such officers, agents, subcontractors (except as otherwise specifically
provided in this Agreement) and employees.
	 
	 	(c)	 	Disclosures Required by Law. Perot Systems or Client, as the case may
be, may disclose Confidential Information of the other party if required pursuant to an
order or requirement of a court, administrative agency or other governmental body,
provided that (i) Perot Systems or Client, as the case may be, will give the other
party written notice of such order or requirement as soon as practicable after it has
knowledge thereof and in any event prior to disclosure of the Confidential Information,
and (ii) Perot Systems or Client, as the case may be, will disclose no more
Confidential Information than is required by such order or requirement.
	 
	 	(d)	 	Exclusions. The provisions of this Section 6.2 will not apply with
respect to information which (i) is developed by the other party without violating the
disclosing party’s proprietary rights, (ii) is or becomes publicly known (other than
through unauthorized disclosure), (iii) is disclosed by the owner of such information
to a third party free of any obligation of confidentiality, (iv) is already known by
such party, as determined by dated documentation, without an obligation of
confidentiality other than pursuant to this Agreement, or (v) is rightfully received by
a party free of any obligation of confidentiality.




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	 	(e)	 	Obligations upon Termination or Expiration. Upon the termination or
expiration of this Agreement, except as provided in Section 6.5 with respect to the
Developed Software, Perot Systems or Client, as the case may be, will return to the
other party or destroy any Confidential Information of the other party then held by
Client or by Perot Systems, as the case may be.






	6.3	 	Client Proprietary Software. Client Proprietary Software, including any
modifications to any Client Proprietary Software, will be and remain the property of Client,
and Perot Systems will have no rights or interests therein except as required to perform the
Services.
	 
	6.4	 	Perot Systems Software and Perot Systems Tools. Any software that is proprietary to
Perot Systems that Perot Systems uses or to which Perot Systems provides Client access
(“Perot Systems Software”) and any tools or methodologies which are proprietary to
Perot Systems and used in connection with the activities contemplated by this Agreement
(“Perot Systems Tools”), including any modifications to any Perot Systems Software and
the Perot Systems Tools, will be and remain the property of Perot Systems, and Client will
have no rights or interests therein. Upon termination or expiration of this Agreement, Client
may request that Perot Systems grant to Client a license to any of the Perot Systems Software
and the Perot Systems Tools then being used on the Client account for itself on such
commercially reasonable terms as the parties agree. Perot Systems agrees that it will not
refuse to grant such license.
	 
	6.5	 	Rights in Developed Software.






	 	(a)	 	Copyright. Perot Systems and Client agree that Client will own the
copyright to software developed by Perot Systems hereunder and that is delivered to
Client by Perot Systems but excluding modifications that are not a derivative of Client
Software and any Perot Systems Software and any Embedded Software (“Developed
Software”). Perot Systems may from time to time request that Client grant to Perot
Systems a license to the Developed Software for itself and for its customers on such
terms as the parties agree. Client agrees that it will not unreasonably refuse to
grant such license, unless such grant would materially impair a competitive advantage
to Client or grant a material competitive advantage to a competitor of Client. For
purposes of this Section 6.5(a) a competitor of Client is any company that competes (or
whose affiliates compete) directly with the (i) then current businesses or (ii) planned
businesses.
	 
	 	(b)	 	Embedded Software. The term “Embedded Software” is defined to
mean pre-existing software that is owned by Perot Systems or licensed by Client or
Perot Systems from a third party that is embedded in the Developed Software. Perot
Systems will retain its rights to any Embedded Software that is owned by Perot Systems,
provided, however, that Perot Systems grants to Client a perpetual, transferable,
non-exclusive, paid up, royalty-free license to use, modify, and enhance the Embedded
Software that is owned by Perot Systems as part of the Developed Software. If any
Embedded Software is owned by a third party, then the terms of the applicable license
will define each party’s rights to such Embedded Software.






	6.6	 	Residual Knowledge. Client acknowledges that Perot Systems is in the business of
providing information technology services. Without limiting Perot Systems’ obligations under
Section 6.2, nothing in this Agreement will limit Perot Systems’ right to provide services or
resources to Perot Systems’ other customers or other third parties that are similar to the
activities performed or resources provided by Perot Systems hereunder, and Perot Systems will
be free to use residual information




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	 	 	retained by Perot Systems in a nontangible form; provided, however, that any such residual
knowledge shall not include Client’s Confidential Information.






	6.7	 	Audit of Client’s Business. Perot Systems shall provide reasonable support to Client
in connection with an audit of Client’s business. Perot Systems shall not be obligated by
this Agreement to disclose to Client or any other person or entity any information which is
not reasonably necessary to conduct an audit of Client’s business, nor shall Perot Systems be
obligated to divulge any Confidential Information of Perot Systems or any third party. In no
event shall Perot Systems be obligated to disclose any Confidential Information to any
competitor, or affiliate of a competitor, of Perot Systems. Client may utilize third parties
to conduct such audit subject to such third party or parties entering into a confidentially
agreement reasonably satisfactory to Client and Perot Systems.





Article 7

Performance Review and Termination





	7.1	 	Performance Review. The Client Executive and Client Representative will meet as
often as reasonably requested by either party to review the performance of the parties under
this Agreement. Each party will bear its own costs and expenses incurred in connection with
such review.
	 
	7.2	 	Dispute Resolution. If any continuing dispute between the parties is not resolved
after reasonable attempts to resolve such dispute are made by either party, then, upon the
written request of either party, each party will appoint an officer who does not spend most of
his or her time on activities relating to this Agreement, to meet with the other party’s
officer for the purpose of resolving the dispute. The officers will negotiate in good faith
to resolve the dispute without the necessity of any formal proceeding. During the course of
such negotiations, all reasonable requests made by one party to the other for information will
be honored. Both parties agree to continue performing their respective obligations under this
Agreement while the dispute is being resolved, except to the extent that such obligations are
in dispute, unless and until this Agreement expires or is terminated in accordance with its
terms. If any such dispute is not resolved by negotiations within 30 days of the commencement
of negotiations, unless a party makes a good faith determination that litigation is necessary
to avoid the expiration of an applicable limitations period or to preserve a superior position
with respect to other creditors, the dispute shall be resolved by binding arbitration, in
accordance with the Commercial Arbitration Rules of the American Arbitration Association
provided that a single neutral arbitrator agreed to by the parties or selected in accordance
with those Commercial Arbitration Rules will conduct the arbitration. Such arbitration shall
be held in the jurisdiction of the responding party, and the testimony of the parties and all
pleadings or other materials submitted in connection with the proceedings shall be considered
Confidential Information of the parties. The prevailing party in any such dispute shall be
awarded reasonable costs and expenses, including attorneys’ fees.
	 
	7.3	 	Termination for Cause. If either party breaches its material obligations under this
Agreement (excluding Client’s obligation to pay Perot Systems) and fails to cure such breach
within 30 days (or such longer period if such breach can not be reasonably cured within such
30 day period) after receipt of written notice from the other party identifying such breach,
then the nonbreaching party may terminate this Agreement by providing the breaching party with
prior written notice of termination.
	 
	7.4	 	Termination for Non-Payment. If Client fails to pay Perot Systems any amounts due
hereunder and fails to cure such nonpayment within 10 days after receipt of written notice
from Perot Systems




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	 	 	identifying such nonpayment, then Perot Systems party may, at its option, suspend some or
all of the Services and/ or terminate this Agreement by providing Client with prior written
notice of the same.
	 
	7.5	 	Termination for Insolvency. ANY LICENSE CONTEMPLATED BY THIS AGREEMENT, SHALL BE
DEEMED AN EXECUTORY CONTRACT UNDER SECTION 365(n) OF TITLE 11 TO THE U.S. BANKRUPTCY CODE AND
SHALL REMAIN IN FULL AND FORCE AND EFFECT UPON THE LICENSEE’S ELECTION AND THE LICENSEE’S
SUBSTANTIAL PERFORMANCE HEREUNDER, NOTWITHSTANDING ANY BANKRUPTCY OR INSOLVENCY OF THE
LICENSOR. If either party is declared insolvent or bankrupt, is the subject of any
proceedings relating to its liquidation, insolvency or for the appointment of a receiver or
similar officer for it, makes an assignment for the benefit of all or substantially all of its
creditors, or enters into an agreement for the composition, extension or readjustment of all
or substantially all of its obligations, then the other party may, by giving prior written
notice thereof to such party, terminate this Agreement as of a date specified in such notice
of termination.
	 
	7.6	 	Termination for Convenience. Client may terminate this Agreement for its convenience
at any time upon 6 months prior written notice to Perot Systems.
	 
	7.7	 	Termination Obligations.






	 	(a)	 	Termination Assistance. During the Termination Assistance Period
(hereinafter defined), Perot Systems will provide to Client the termination assistance
described below as reasonably requested by Client (“Termination Assistance”).
The term “Termination Assistance Period” is defined as (i) if this Agreement
expires under Section 1.2, the six month period prior to the expiration date, or (ii)
if this Agreement is terminated under Section 7.3, 7.4, 7.5, or 7.6, the period
beginning on the date on which a notice of termination is delivered by either party
through the termination date or, upon Client’s written request prior to the termination
date, through the date six months after the termination date. The Termination
Assistance to be provided to Client by Perot Systems will consist of the following:






	 	(i)	 	Continuing to perform any or all of the Services then being
performed by Perot Systems.
	 
	 	(ii)	 	Working with Client to develop a plan for the transition of
services from Perot Systems to Client.
	 
	 	(iii)	 	Providing training for personnel of Client in the performance
of the Services then being transitioned to Client or other service provider.
	 
	 	(iv)	 	With respect to any equipment owned by Perot Systems and used
solely to perform the Services, Client may purchase any such equipment at Perot
Systems’ then-current book value on an “as is — where is” basis. With respect
to any equipment leased by Perot Systems and used solely to perform the
Services, subject to the terms of any applicable lease, Perot Systems will
assign to Client Perot Systems’ rights and obligations with respect to any such
equipment leased by Perot Systems; provided, however, that the lessor under the
lease agrees to release Perot Systems from all liability under the lease as of
the date of assignment.




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	 	(v)	 	With respect to any third party services acquired by Perot
Systems and used solely to perform the Services, subject to the terms of any
applicable third party services agreement, Perot Systems will assign to Client
Perot Systems’ rights and obligations with respect to any such third party
services used by Perot Systems; provided, however, that such third party
service provider under the third party service agreement agrees to release
Perot Systems from all liability under the third party service agreement as of
the date of assignment.






	 	(b)	 	Payment for Termination Assistance. Client will pay Perot Systems for
such Termination Assistance on a cost plus basis in accordance with the existing IS
Annual Budget and terms of this Agreement or on any other mutually acceptable basis.
Notwithstanding Section 5.6, Client shall pay Perot Systems for any Termination
Assistance in advance on the first day of each month of the Termination Assistance
Period an amount equal to Perot Systems’ reasonable estimate of the total amount
payable to Perot Systems for such Termination Assistance for that month adjusted, as
necessary, to reflect the reconciliation based on the actual charges for Termination
Assistance provided during the prior month. Perot Systems will provide Client with an
invoice each month evidencing the estimate of the total amount payable to Perot Systems
for Termination Assistance for the next month and a reconciliation with the actual
charges for the Termination Assistance provided to Client during the prior month.
Perot Systems’ obligations to provide termination assistance are conditional on
Client’s being and remaining current with its payment obligations under this Agreement.





Article 8

Indemnities and Liability





	8.1	 	Cross Indemnity. Each party will indemnify, defend and hold harmless the other and
the other’s affiliates, and their officers, directors, employees, agents, successors, and
assigns, from any and all losses, liabilities, damages and claims, and all related costs and
expenses including reasonable legal fees and disbursements and costs of investigation,
litigation, settlement, judgment, interest and penalties (“Losses”) and threatened Losses,
arising out of third party claims alleging (i) the death or bodily injury of any agent,
employee, customer, business invitee or business visitor of the indemnitor, provided such
claims do not arise out of any act or omission of indemnitee, (ii) the damage, loss or
destruction of any tangible personal property caused by the indemnitor, provided such damage,
loss or destruction does not arise out of any act or omission of indemnitee, (iii) any claim,
demand, charge, action, cause of action or other proceeding asserted against the indemnitee by
a person that results from an act or omission of the indemnitor in its capacity as an employer
of the person, provided such claim, demand, charge, action, cause of action or other
proceeding does not arise out of any act or omission of indemnitee
	 
	8.2	 	Intellectual Property Indemnity.






	 	(a)	 	By Perot Systems. Perot Systems will indemnify, defend and hold
harmless Client and its Affiliates, and their officers, directors, employees, agents,
successors, and assigns, from any and all Losses and threatened Losses arising from
third party claims alleging:






	 	(i)	 	Perot Systems’ failure to perform any obligations to be
performed on or after the Effective Date by Perot Systems under any contracts,
including third party




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	 	 	 	software licenses and third party service contracts where Perot Systems has
expressly agreed under this Agreement to perform those obligations; and
	 
	 	(ii)	 	Any claims of infringement of any United States patent, trade
secret, copyright or other proprietary rights enforceable in the United States
or other proprietary rights, alleged to have occurred because of (i) software
or other resources selected by Perot Systems and provided by Perot Systems to
Client, or (ii) Perot Systems’ activities under this Agreement (other than
claims based on Perot Systems’ use of software or resources provided by
Client).






	 	(b)	 	By Client. Client will indemnify, defend and hold harmless Perot
Systems and its Affiliates and their respective officers, directors, employees, agents,
successors, and assigns, from any and all losses and threatened Losses arising from
third party claims alleging:






	 	(i)	 	Client’s failure to observe or perform any obligations to be
performed by Client under any contracts, including third party software
licenses and third party service contracts, excluding those obligations under
any of those contracts where Perot Systems has expressly agreed under this
Agreement to perform those duties or obligations; and
	 
	 	(ii)	 	Any claims of infringement of any patent, trade secret,
copyright or other proprietary rights, alleged to have occurred because of (i)
software or other resources selected by customer or provided by Client to Perot
Systems, or (ii) Client’s activities under this Agreement (other than claims
based on Client’s use of software or resources provided by Perot Systems).






	 	(c)	 	Infringement. If either party is obligated to indemnify the other
party under Section 8.2(a) or (b), then such party (the “Indemnifying Party”) will, in
addition to indemnifying the other party as provided in this Article 8 and to the other
rights the other party may have under this Agreement, promptly at the Indemnifying
Party’s expense use all commercially reasonable efforts to secure the right to continue
using the item or to replace or modify the item to make it non-infringing, provided
that any replacement or modification will not degrade the performance or quality of the
affected component of the Services. If the Indemnifying Party can accomplish neither
of those actions, and only in that event, then the Indemnifying Party will cease using
the infringing item, and the parties will work in good faith to equitably adjust the
Services, and Perot Systems’ charges under this Agreement.
	 
	 	(d)	 	Indemnification Procedures. With respect to any third party claims
for which either party is entitled to indemnification under this Article 8 (an
“Indemnifiable Claim”), the following procedures will apply:






	 	(i)	 	Notice. After any entity entitled to indemnification
under this Article 8 receives notice of the commencement or threatened
commencement of any civil, criminal, administrative, or investigative action or
proceeding involving an Indemnifiable Claim for which the indemnitee will seek
indemnification under this Article, the indemnitee will promptly notify the
indemnitor of that claim in writing. However, failing to notify an indemnitor
of a claim will not relieve the






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	 	 	 	indemnitor of its obligations under this Agreement except to the extent
the indemnitor is prejudiced thereby. As soon as reasonably practicable
after receiving written notice of the claim, the indemnitor will notify the
indemnitee in writing as to whether the indemnitor elects to assume control
of the defense and settlement of that claim (a “Notice of Election”).
	 
	 	(ii)	 	Procedure Following Notice of Election. If the
indemnitor delivers a Notice of Election relating to any Indemnifiable Claim at
least 10 days before the date on which any response to a complaint or summons
is due, the indemnitor is entitled to have sole control over the defense and
settlement of that claim. However, the indemnitee may participate in defending
that claim and may employ counsel at its own expense to assist in defending the
claim. The indemnitor will obtain the prior written approval of the indemnitee
before entering into any settlement of the claim or ceasing to defend against
the claim.
	 
	 	(iii)	 	Procedure Where No Notice of Election Is Delivered.
If the indemnitor does not deliver a Notice of Election electing to assume the
defense of an Indemnifiable Claim at least 10 days before the date on which any
response to a complaint or summons is due, the indemnitee may defend the claim
in any manner as it may deem appropriate, at the cost and expense of the
indemnitor. The indemnitor will promptly reimburse the indemnitee for all those
costs and expenses.
	 
	 	(iv)	 	Subrogation. If an indemnitor is obligated to
indemnify an indemnitee under this Article 8, then upon paying that indemnity
in full, the indemnitor will be subrogated to all rights of the indemnitee
concerning the claims to which the indemnification relates.






	 	8.4	 	Limitation of Liability. Except with respect to (i) Client’s obligations to
make payments to Perot Systems and under this Agreement (including without limitation any
obligation to make payments in the future under this Agreement), and (ii) the indemnification
obligations of each party under this Agreement, and (iii) damages caused by willful tortuous
misconduct or Gross Negligence of a party, with respect to all claims arising out of, under or in
connection with this Agreement, each party’s liability will not exceed, in the aggregate, an amount
equal to the charges actually paid by Client to Perot Systems during the first twelve months after
the Effective Date (excluding amounts paid as reimbursement of expenses and taxes). For purposes
of this Section 8.4 “Gross Negligence” is defined as an act or omission: (a) which when viewed
objectively from the standpoint of the actor at the time of its occurrence involves an extreme
degree of risk, considering the probability and magnitude of the potential harm to others; and (B)
of which the actor has actual, subjective awareness of the risk involved, but nevertheless proceeds
with conscious indifference to the rights, safety, or welfare of others.
	 
	 	8.5	 	Limitation on Type of Damages. Except with respect to Client’s obligations to make
payments to Perot Systems under this Agreement (including without limitation any obligation to
make payments in the future under this Agreement), with respect to all claims arising out of,
under or in connection with this Agreement, the measure of damages payable by Perot Systems or
Client will not include, and neither Perot Systems nor Client will be liable for, any amounts
for indirect, incidental, reliance, special, consequential (including without limitation lost
profits, income or revenue) or punitive damages of Perot Systems or Client, as applicable, or
any third parties, whether in tort or contract, and whether or not such damages are foreseen.
Notwithstanding the forgoing, any final judgments awarded to any third party against an
indemnified party by a court of competent jurisdiction and any settlement amounts to
which an indemnifying party agrees in writing, in each case in 




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	 	 	 	connection with a claim
covered by an indemnity provision in this Article 8, shall be considered direct
damages.
	 
	 	8.6	 	Disclaimer of Warranty. IF PEROT SYSTEMS ACQUIRES ANY THIRD-PARTY SOFTWARE, HARDWARE
OR SERVICES FOR CLIENT UNDER THIS AGREEMENT, PEROT SYSTEMS WILL PROVIDE SUCH THIRD-PARTY
SOFTWARE, HARDWARE OR SERVICES ON AN “AS IS” BASIS, BUT PEROT SYSTEMS WILL USE REASONABLE
COMMERCIAL EFFORTS TO ASSIST CLIENT IN ENFORCING ANY THIRD-PARTY WARRANTY. EXCEPT AS MAY BE
SPECIFICALLY PROVIDED IN THIS AGREEMENT, PEROT SYSTEMS DOES NOT MAKE, AND HEREBY DISCLAIMS,
ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY
WARRANTY OF THE MERCHANTABILITY, SUITABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR RESULTS TO
BE DERIVED FROM THE USE OF ANY RESOURCES, SERVICES OR MATERIALS PROVIDED PURSUANT TO THIS
AGREEMENT.
	 
	 	8.7	 	Force Majeure. Each party will be excused from the performance of its obligations
under this Agreement (other than Client’s obligation to make payments to Perot Systems
hereunder) for any period and to the extent that such performance is prevented, in whole or in
part, as a result of delays caused by the other party or any act of God, civil disturbance,
court order, labor dispute, third party nonperformance or other cause beyond its reasonable
control, and such nonperformance will not be a default hereunder or grounds for termination
hereof.





Article 9

Miscellaneous





	 	9.1	 	Notices. All consents, notices, requests, demands, and other communications to be
given or delivered under or by reason of the provisions of this Agreement will be in writing
and will be deemed given when delivered personally against receipt, on the next business day
when sent by overnight courier, and on the fifth business day after being mailed by certified
mail, return receipt requested, to each party at the following address (or to such other
address as that party may have specified by notice given to the other pursuant to this
provision):




If to Perot Systems:



Perot Systems Corporation

2300 West Plano Parkway

Plano, Texas 75075

Attn: President



With a copy to:

Perot Systems Corporation

2300 West Plano Parkway

Plano, Texas 75075

Attn: General Counsel



If to Client:




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Hillwood Enterprises, L.P.

3 Lincoln Center

5430 LBJ Freeway

Suite 800

Dallas, Texas 75248

Attn: CFO



With a copy to:



Hillwood Enterprises, L.P.

3 Lincoln Center

5430 LBJ Freeway

Suite 800

Dallas, Texas 75248

Attn: General Counsel





	 	9.2	 	Assignment. This Agreement and all of the provisions hereof will be binding upon and
inure to the benefit of each party and its respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations hereunder will be
assigned by either party without the prior written consent of the other.
	 
	 	9.3	 	Severability. Whenever possible, each provision of this Agreement will be
interpreted in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under applicable law, such
provision will be deemed restated to reflect the original intentions of the parties as nearly
as possible in accordance with applicable law, and, if capable of substantial performance, the
remaining provisions of this Agreement will be enforced as if this Agreement was entered into
without the invalid provision.
	 
	 	9.4	 	Captions. The captions used in this Agreement are for convenience of reference only
and do not constitute a part of this Agreement and will not be deemed to limit, characterize
or in any way affect any provision of this Agreement, and all provisions of this Agreement
will be enforced and construed as if no caption had been used in this Agreement.
	 
	 	9.5	 	Counterparts. This Agreement may be executed in one or more counterparts all of
which taken together will constitute one and the same instrument.
	 
	 	9.6	 	Relationship of Parties. Perot Systems, in furnishing services to Client hereunder,
is acting only as an independent contractor. Perot Systems does not undertake by this
Agreement or otherwise to perform any obligation of Client, whether regulatory or contractual,
or to assume any responsibility for Client’s business or operations, and Perot Systems has the
sole right and obligation to supervise, manage, contract, direct, procure, perform or cause to
be performed, all work to be performed by Perot Systems hereunder unless otherwise provided
herein.
	 
	 	9.7	 	Approvals and Similar Actions. Where agreement, approval, acceptance, consent or
similar action by either party is required by any provision of this Agreement, such action
will not be unreasonably delayed or withheld unless otherwise expressly provided.
	 
	 	9.8	 	Modification; Waiver. This Agreement may be modified only by a written instrument
duly executed by or on behalf of each party. No delay or omission by either party to exercise
any right or power 




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	 	 	 	hereunder will impair such right or power or be construed to be a waiver
thereof. A waiver by either party of any of the obligations to be performed by the other or
any breach thereof will not be construed to be a waiver of any succeeding breach thereof or of
any other obligation herein contained.
	 
	 	9.9	 	No Third-Party Beneficiaries. The parties agree that this Agreement is for the
benefit of the parties hereto and is not intended to confer any rights or benefits on any
third-party, including any employee of either party, and that there are no third-party
beneficiaries to this Agreement or any part or specific provision of this Agreement.
	 
	 	9.10	 	Governing Law; Jury Trial Waiver. The laws of the State of Texas, other than its
rules on conflicts of laws, shall govern the interpretation and construction of this
Agreement. The parties waive their rights to a jury trial of any claim or issue arising out
of or related to this Agreement.
	 
	 	9.11	 	Entire Agreement. This Agreement, including any Schedules referred to herein and
attached hereto (and any Appendices referred to therein and attached thereto), each of which
is incorporated herein for all purposes, constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements, whether written
or oral, with respect to the subject matter contained in this Agreement. No change, waiver,
or discharge hereof shall be valid unless in writing and signed by an authorized
representative of the Party against which such change, waiver or discharge is sought to be
enforced. The Prior Agreement is hereby terminated.
	 
	 	9.12	 	Media Releases. All media releases, public announcements and public disclosures by
Client or Perot Systems relating to this Agreement, including without limitation, promotional
or marketing material (but not including any announcement intended solely for internal
distribution within Client or Perot Systems, as the case may be, or any disclosure required by
legal, accounting or regulatory requirements beyond the reasonable control of Client or Perot
Systems, as the case may be) will be coordinated with and approved by the other prior to the
release thereof.





[SIGNATURE PAGE FOLLOWS]




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     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed and delivered by their
duly authorized representative as of the date first set forth above.



	 	 	 	 	 	 	 	 	 	 	 
	HILLWOOD ENTERPRISES, L.P.,	 	 	 	PEROT SYSTEMS CORPORATION	 	 
	a Texas limited partnership	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	AHB, LLC,	 	 	 	 	 	 	 	 
	a Texas limited liability company,	 	 	 	 	 	 	 	 
	its general partner	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/James C. Swain
	 	 	 	By:
	 	/s/ Steven R. Curts	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	James C. Swain
	 	 	 	Name:
	 	Steven R. Curts	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	EVP/CFO
	 	 	 	Title:
	 	Vice President	 	 
	 	 	 	 	 	 	 	 	 






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SCHEDULE B

CHARGES




1. GENERAL PROVISIONS




1.1 General 





The Base Charges described in Section 5.1 of the Agreement shall consist of the Baseline
Service Charge described in Section 2.1.



1.2 Definitions




	 	 	 
	“Monthly Resource 

Cost:

	 	shall mean the sum of (1) compensation (salary, including salary
increases based on Perot Systems’ standard compensation policies, overtime pay), (2) fringe allocation
(3) standard and reasonable bonus allocation (Perot Systems’ Global Variable Pay Program), (4) training
allocation and (5) contractor and intracompany allocation for each resource providing Base Services to
Client during the calendar month.
	 
	 	 
	“Monthly Computer 

Services Related Cost”

	 	shall mean the sum of (1) IS rates based costs (PSC Data Center), and (2) other computer costs
(software, equipment, communications, offsite storage) related to the Base Services provided to Client
during the calendar month.
	 
	 	 
	“Office Related Cost”

	 	shall mean the sum of (1) employee related, (2) facilities (Client approved, voice communications,
communication depreciation, communication equipment, mobile phone and pagers), (3) Client approved
travel and (4) other administrative costs (postage, freight and delivery, outside reproduction, business
gifts) related to the Base Services provided to Client during the calendar month.
	 
	 	 
	“Multiplier”

	 	shall mean 1.23.






2. BASE CHARGES




2.1 Charges for Base Services





Client will pay Perot Systems as consideration for providing the Base Services the amounts
specified below.




	 	(a)	 	The aggregate Monthly Resource Cost times the Multiplier.
	 
	 	(b)	 	The aggregate Monthly Computer Services Related Cost times the Multiplier.
	 
	 	(c)	 	The aggregate Monthly Office Related Cost times the Multiplier.





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2.2 Base Charges Reporting





Perot Systems shall provide to Client a monthly report of its costs related to the
Base Services in the categories listed below. The Monthly Base Charges Report shall
be substantially in the form of Appendix B-1.




	 	(a)	 	Compensation (salary, overtime pay)
	 
	 	(b)	 	Fringe Allocation
	 
	 	(c)	 	Global Variable Pay Allocation (Bonus)
	 
	 	(d)	 	Training Allocation
	 
	 	(e)	 	Contractors/Inter-company
	 
	 	(f)	 	IS Rates Based Charges (PSC Data Center)
	 
	 	(g)	 	Other Computer Costs (software, equipment, communications)
	 
	 	(h)	 	Employee Related Facilities
	 
	 	(i)	 	Allocation
	 
	 	(j)	 	Travel
	 
	 	(k)	 	Other Administrative
	 
	 	(l)	 	Headcount — Perot Systems
	 
	 	(m)	 	Headcount — Subcontractor





2.3 Non-Allowable Costs





In no event will Client be responsible for Perot Systems’ employee search fees or
any other expenses relating to hiring Perot Systems employees without the prior
written consent of Client.



3. CHARGES FOR ADDITIONAL SERVICES





As described in Section 3.2 of the Agreement, certain Services will be
performed as Additional Services. Perot Systems will provide up to $37,500 of
Additional Services at no charge to Client. Thereafter, such Additional Services
will be performed on a cost plus or other mutually acceptable basis depending on
the nature of the Additional Services, in each case as specified in the applicable
Task Order.



4. BUDGET PROCESS





	 	(a)	 	During each year this Agreement is in force, the Client
Executive will develop and submit to the Client Representative a Services Plan
that describes in reasonable detail, among other things, (A) Client’s
requirements for Services for Client’s next fiscal year, including but not
limited to Client’s requirements for Services staffing, project staffing,




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	 	 	 	and equipment, (B) the relative priority of the items included in the
Services Plan, (C) proposed changes to Client’s existing information
technology systems, including changes that will require development
projects not included within the scope of the Services, (D) an Annual IS
Budget for the following year which will identify Perot Systems’ forecasted
expenditures to the same detail level set forth in Appendix B-2.
The Annual IS Budget for Perot Systems related costs shall be substantially
in the form of the IS Annual Budget for the first contract year that is
attached as Appendix B-2.
	 
	 	(b)	 	After the Client Executive submits the proposed Annual IS
Budget and during the period Client develops its annual business plan and the
supporting operations budgets, the parties will work together to review and,
to the extent necessary, revise the Services Plan, and related costs to
complete the definitive Annual IS Budget. Client in its sole discretion will
determine the amount of the Annual IS Budget and Perot Systems in its sole
discretion will determine the Services to be provided in accordance with such
Annual IS Budget.






3