exhibit10_33.htm


    
      

      

    



    EXHIBIT
10.33

    


    ***           Indicates
material has been omitted pursuant to a Confidential Treatment Request filed
with the Securities and Exchange Commission.  A complete copy of this
agreement has been filed separately with the Securities and Exchange
Commission.

    


    


    


    Contract
Statement of Work

    For

    Comverge

    


    FINAL
VERSION

    


    


    Maryland
Residential Direct Load Control

    


    January
21, 2009

    


    


     

    Comverge
Scope of Work Final Version 012109 .doc

    



    
      
        
          


           

          REDACTED
AGREEMENT

        

         


      

      
         


        
          

        

      

      
         


        
          


           

          PHI
Service CompanyCONFIDENTIAL

        

      

    


    
       

      
        
          
            	
                    1
      Index

                  	
                    1

                  
	
                    2
      General Information

                  	
                    3

                  
	
                    2.1
      Confidentiality

                  	
                    3

                  
	
                    2.2
      PHI Program Intent and Objectives per RFP

                  	
                    3

                  
	
                    2.3
      Terms and Conditions

                  	
                    4

                  
	
                    2.4
      Contract Term

                  	
                    4

                  
	
                    2.4.1
      Contract Extensions

                  	
                    4

                  
	
                    2.5
      Supplier Diversity

                  	
                    4

                  
	
                    2.6
      Basis of Contract

                  	
                    4

                  
	
                    2.7
      PHI Background

                  	
                    5

                  
	
                    2.8
      DLC Program Background

                  	
                    5

                  
	
                    2.9
      Maryland Residential DLC Program Description

                  	
                    6

                  
	
                    2.10
      Scalability

                  	
                    7

                  
	
                    2.11
      Location of Contractor’s Facilities

                  	
                    8

                  
	
                    3
      PHI Roles & Responsibilities

                  	
                    9

                  
	
                    4
      Comverge Roles & Responsibilities

                  	
                    11

                  
	
                    4.1
      Comverge Project Organization & Staffing

                  	
                    12

                  
	
                    4.2
      Project Management

                  	
                    12

                  
	
                    4.3
      Project Scheduling Methodology

                  	
                    13

                  
	
                    5
      DLC Contract Scope of Activities

                  	
                    15

                  
	
                    5.1
      Customer Enrollment

                  	
                    16

                  
	
                    5.2
      Customer Support

                  	
                    17

                  
	
                    5.2.1
      General Requirements

                  	
                    17

                  
	
                    5.2.2
      Call Center Operations

                  	
                    18

                  
	
                    5.2.3
      Call Center Hours

                  	
                    19

                  
	
                    5.2.4
      Field Support of Customers

                  	
                    19

                  
	
                    5.3
      Customer Education

                  	
                    20

                  
	
                    5.4
      Customer Retention & Replacement

                  	
                    20

                  
	
                    5.5
      DLC Communications Solutions

                  	
                    20

                  
	
                    5.6
      DLC Device Solutions

                  	
                    22

                  
	
                    5.7
      End Use Controls Design & Functionality

                  	
                    23

                  
	
                    5.8
      End Use Controls Installation and Asset Management

                  	
                    25

                  
	
                    5.8.1
      Installation

                  	
                    25

                  
	
                    5.8.2
      Asset Management

                  	
                    26

                  
	
                    5.9
      Customer Billing

                  	
                    27

                  
	
                    5.10
      System Interfaces

                  	
                    27

                  
	
                    5.11
      Safety

                  	
                    30

                  
	
                    5.12
      System Maintenance and Ongoing Support

                  	
                    31

                  
	
                    5.13
      PHI Personnel Training

                  	
                    31

                  
	
                    5.14
      System Operations

                  	
                    32

                  
	
                    6
      IT Standards and Security Requirements

                  	
                    35

                  
	
                    6.1
      Data and Information Technology Security

                  	
                    35

                  
	
                    6.1.1
      Data Exchange Security Requirements

                  	
                    35

                  
	
                    6.1.2
      Handheld Security Requirements

                  	
                    36

                  
	
                    6.1.3
      Customer Service Center (CSC) Security Requirements

                  	
                    36

                  
	
                    6.1.4
      Website Security Requirements

                  	
                    37

                  
	
                    7
      Program Equipment Validation and Commissioning

                  	
                    39

                  
	
                    7.1
      Overall System Roll-Out

                  	
                    39

                  
	
                    7.2
      Equipment Validation

                  	
                    40

                  
	
                    7.3
      Field Acceptance Testing

                  	
                    41

                  
	
                    8
      Operational Performance Measures, Monitoring &
Auditing

                  	
                    43

                  
	
                    8.1
      Program Management Status and Statistical Reporting

                  	
                    43

                  
	
                    8.2
      Data Exchange Transaction Performance Service Levels

                  	
                    44

                  
	
                    8.2.1
      Severity Levels

                  	
                    44

                  
	
                    8.2.2
      Designated Responsible Parties & Contact Information
      Updates

                  	
                    44

                  
	
                    8.2.3
      Required Remedial Actions

                  	
                    45

                  
	
                    8.3
      Customer Satisfaction / Surveys

                  	
                    46

                  
	
                    8.4
      Audits

                  	
                    46

                  
	
                    9
      Pricing

                  	
                    47

                  
	
                    10
      Appendix

                  	
                    49

                  
	
                    10.1
      PHI Standard Terms and Conditions

                  	
                    50

                  
	
                    10.2
      Signature Document

                  	
                    86

                  
	
                    10.3
      Pricing

                  	
                    87

                  


          


          
            
              
                


                 

                REDACTED
AGREEMENT

              

               


            

            
               


              
                

              

            

            
               


              
                


                 

                PHI
Service CompanyCONFIDENTIAL

              

            

          



      

    

    
       

      
        	
                2  

              	
                 General
      Information

              


      

       

      


    

     

    
      	
              2.1  

            	
               Confidentiality
  

            


    

    


    The
contents of this Statement of Work (“SOW”) are considered confidential
information and should be treated as such.

     

    Comverge
agrees not to use or disclose to others, and to regard and preserve as
confidential, all information obtained by it in connection with or resulting
from its work with Pepco Holdings, Inc., through its service company subsidiary,
PHI Service Company (“PHI”), unless and only to the extent it has received the
prior written consent of PHI to do otherwise.  Comverge shall keep
strictly confidential the substance of its discussions and conversations with,
and its advice to, PHI personnel relating to the contractual agreement, except
that such confidentiality obligation shall not apply to any information
that:

     

     

    
      	
              (a)  

            	
              is
      generally available to the public;

            


    

     

     

    
      	
              (b)  

            	
              becomes
      public information other than by an unauthorized act or omission by
      Comverge or any subcontractor, agent or representative of
      Comverge;

            


    

     

     

    
      	
              (c)  

            	
              as
      shown by written records, was known to Comverge prior to the receipt of
      such information from PHI; or

            


    

     

     

    
      	
              (d)  

            	
              is
      received by Comverge from third parties who were entitled to receive and
      transfer such information without obligations of confidentiality to
      PHI.

            


    

     

     

    Upon
expiration or earlier termination of the contractual agreement, Comverge agrees,
if requested by PHI, to return or destroy, or cause to be returned or destroyed
all information received from PHI that is confidential or proprietary in nature,
or impacts upon any trade secrets of PHI, including documents that incorporate
all or part of any such information, without retaining any copy or part
thereof.  Comverge shall inform its potential subcontractors and
employees, if any, of their obligation to abide by the terms of this
Section.

     

    The
provisions of this Section shall survive the termination of a future agreement.
Also, PHI agrees to honor the same rights to Comverge for software and other
information submitted for review and implementation as applicable.

     

     

    
      	
              2.2  

            	
               PHI
      Program Intent and Objectives per
RFP

            


    

     

    Comverge
submitted a bid to:

    
      	
              ·  

            	
              Manage
      a comprehensive Direct Load Control (“DLC”) Program, including the
      deployment, installation and maintenance of load control
      devices.

            


    

    
      	
              ·  

            	
              Provide
      selected technology solutions.

            


    

    
      	
              ·  

            	
              Provide
      many of the functions required to successfully implement the
      program.

            


    

    
      	
              ·  

            	
              Provide
      these services & products in our Maryland territories, with the
      possibility of expansion to other
territories.

            


    

    
      	
              o  

            	
              No
      representation that the contractor would definitely have the business
      associated with other territories.

            


    

    
      	
              o  

            	
              All
      bidders were asked to indicate their costs if the program covered by RFP
      were either expanded or contracted.

            


    

    


     

    
      	
              2.3  

            	
               Terms
      and Conditions

            


    

     

    This SOW
shall be governed by the PHI Standard Terms and Conditions Agreement (“Terms and
Conditions”) supplied in the Appendix.

    


     

    
      	
              2.4  

            	
               Contract
      Term

            


    

     

    Nominal
five year contract, with the first year including mobilization.

    


    PHI has
the right to review performance and alter the scope of this contract, ***
Comverge will assist in training *** for the ***

    


    PHI
installation program is projected to be complete before or during 2013; and
after the build out is complete, contractor may be retained for ongoing
equipment maintenance, at PHI’s option.

    


     

    
      	
              2.4.1  

            	
               Contract
      Extensions

            


    

     

    


    The PHI
DLC installation program is projected to be complete before or during
2013.  Once build out is complete, the contractor may be retained for
ongoing equipment maintenance, at PHI’s option.  In the event that the
project development plan is delayed, deferred, or extended in duration, PHI may
choose to extend the contract term for up to *** for any single contract
extension.

    


     

    
      	
              2.5  

            	
               Supplier
      Diversity

            


    

     

    PHI’s
Supplier Diversity Policy:

    


    "It is the policy of Pepco Holdings,
Inc., and its affiliates (collectively, ‘PHI’ or the ‘Company’) to maximize
contracting opportunities for small, minority and protected class businesses,
with specific interest in maximizing diverse contracting opportunities within
PHI's service territories.”

    


    Protected
class businesses include those owned and operated by women, veterans,
service-disabled veterans and those operating in historically underutilized
business zones (“HUBZones”).  Comverge will discuss how it intends to
meet PHI’s Supplier Diversity Policy and provide opportunities for local
minority businesses through the proposed comprehensive solution.

    


    Comverge
will support MBE/WBE organizations and use local minority and woman-owned
businesses as contractors in its outsourced programs in those jurisdictions in
which equipment is being installed.  Comverge will allow for local
minority contractors to assist wherever possible. Comverge will report to PHI,
on request, the amount of work performed by minority contractors at any given
point of the deployment.

     

    


     

     

    
      	
              2.6  

            	
               Basis of
  Contract

            


    

     

    


    Proposals
were evaluated for consideration of award based upon the following
criteria:

     

    
      	
              ·  

            	
              Technical
      approach of satisfying the overall objectives of the proposal
      requirements

            


    

     

     

    
      	
              ·  

            	
              Business
      approach of satisfying the overall objectives of the proposal
      requirements

            


    

     

     

    
      	
              ·  

            	
              Overall
      responsiveness to, and provision of a response to, each individual point
      of the RFP

            


    

     

     

    
      	
              ·  

            	
              Ability
      to provide a comprehensive solution that satisfied
  PHI’s

            


    

     

    
      	
              o  

            	
              regulatory
      and resource constraints

            


    

    
      	
              o  

            	
              branding
      and customer care concerns

            


    

    
      	
              o  

            	
              need
      to bridge the transition in grid technology from current systems to the
      AMI system under development, and

            


    

    
      	
              o  

            	
              need
      for some flexibility in program scope, program pace, and level of
      participation by PHI over time

            


    

     

    
      	
              ·  

            	
              Total
      Cost to PHI during the period of
performance

            


    

     

     

    
      	
              ·  

            	
              Scalability

            


    

     

     

    
      	
              ·  

            	
              Applicability
      of Systems to Support other DSM
Programs

            


    

     

     

    
      	
              ·  

            	
              Compatibility
      with Planned AMI Deployment

            


    

     

    The DLC
equipment and technology selected will be installed in parallel with AMI
deployment, with the expressed intent to integrate the technologies from both
programs.

    


     

    
      	
              2.7  

            	
               PHI
      Background

            


    

     

     

    PHI
Service Company issued this Statement of Work and will own the data,
systems and equipment provided; although the company’s affiliated electric
distribution companies may own portions of solution directly.

     

    


     

     

    
      	
              2.8  

            	
               DLC
      Program Background

            


    

     

    This
Statement of Work is being issued by Pepco Holdings, Inc. (PHI) for equipment,
software, and services to implement a DLC program. The DLC program will support
PHI’s broad transformational program entitled “Blueprint for the Future” and
will help to achieve the State of Maryland Governor’s energy reduction program
titled “EmPOWER. Maryland”

    


    PHI filed
its proposed “Blueprint for the Future” Programs in Maryland, Delaware, the
District of Columbia and New Jersey. A core component of the Blueprint strategy
is Demand Side Management programs which empower customers to manage their
energy usage and costs while protecting the environment.

    


    On
October 27, 2007, Pepco and Delmarva Power filed various initiatives designed to
support the Maryland Governor’s EmPOWER Maryland goals to reduce energy
consumption and peak demand by 15% in 2015. This filing included a residential
DLC Program using advanced technology for indoor smart thermostats and outdoor
cycling switches that will be controlled remotely to reduce demand. Pepco and
Delmarva filed a revised DLC program on February 15, 2008 which was approved by
the Maryland Public Service Commission (“MD PSC”) in Case No. 9111, with some
requested revisions on April 18, 2008.

    


    As part
of the Blueprint for the Future, PHI is planning to deploy Smart Grid
applications and devices across the PHI electric grid over the next several
years. By “smart,” this means that the grid will have:

     

    
      	
              ·  

            	
              two-way
      communication between home meters and the
  utility

            


    

     

     

    
      	
              ·  

            	
              advanced
      sensors throughout the grid to allow improved
  reliability

            


    

     

     

    
      	
              ·  

            	
              the
      ability to reconfigure itself, improved efficiency and
      security

            


    

     

     

    
      	
              ·  

            	
              an
      overall expansion in the volume and usefulness of information flowing both
      to customers and the utility

            


    

     

     

    
      	
              ·  

            	
              an
      advanced analytical platform for better situational
    awareness

            


    

     

    And PHI
will ultimately be building on all of these capabilities to provide real-time
optimization of the distribution network.  These initiatives include
Advanced Metering Infrastructure (AMI) and Demand Side Management (DSM) for
system-wide deployment.  The AMI initiative is a long-term effort and
is currently in the early stages of planning and design.

    


    The AMI
initiative in Pepco and Delmarva Power service territories will be in deployment
or installation phases during the build-out of the DLC.  The AMI
capability is targeted to become partially operational in 2011.  Once
the AMI system is available, PHI intends to convert all DLC devices provided
under this Contract Statement of Work to operate on the AMI
platform.

    


     

    
      	
              2.9  

            	
               Maryland
      Residential DLC Program Description

            


    

     

    The
proposed residential DLC program is being pursued in response to a specific
regulatory Order issued by the Maryland Public Service Commission in April
2008.

    


    The
devices will have the capability of cycling the central air conditioning / heat
pump system compressor, and customers will be able to choose from
three  cycling strategies, each of which has a different incentive
payment (i.e. up front bill credit as well as annual bill
credits).  At this time, no other household energy usages are planned
to be cycled (e.g., window air conditioning units, pool heaters, hot water
heaters), but the possibility of program expansion remains open.

    


    
      	
              ·  

            	
              50%
      - Compressor cycled off 15 minutes of each half
  hour

            


    

    
      	
              ·  

            	
              75%
      - Compressor cycled off 22.5 minutes of each half
  hour

            


    

    
      	
              ·  

            	
              100%
      - Compressor cycled off 30 minutes of each half
  hour

            


    

    


    The
following table shows the program ***

    


    
      	 
      	
              Devices
      Installed ***

            	
              Devices
      Installed ***

            	
              Devices
      Installed ***

            	
              Devices
      Installed ***

            	
              Devices
      Installed ***

            	
              Total
      Devices Installed

            
	
              Pepco

            	
              ***

            	
              ***

            	
              ***

            	
              ***

            	 
      	
              167,660

            
	
            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            
	Delmarva
      Power	*** 	*** 	*** 	*** 	*** 	    
      54,540 
	
              Total
      Devices

            	
              ***

            	
              ***

            	
              ***

            	
              ***

            	
              ***

            	
              222,200

            


    

    


    


    Table
5.0:  Program Installation Targets

    


    The
following chart displays the cumulative program
installation targets by company and year.

    


    

    Figure
5.0:  DLC Cumulative Program Installation Targets

    


    Participation
in the DLC program is voluntary.  Customers are allowed to select
either a smart thermostat or an outside cycling switch device that is connected
to an air conditioner.  Total residential participation rates are
expected to be 28% for Delmarva and 33% for Pepco based upon historical
information from other energy management programs.  PHI anticipates
70% of participants will elect the smart thermostat and 30% will elect the
outside switches.  Additionally, approximately *** of participants are
assumed to have more than one central air conditioner (multi-zone HVAC, or
multiple residential structures served on a single account).

    


    Both
Pepco and Delmarva Power have operated DLC programs in the past. The Pepco DLC
program, which was referred to as “Kilowatchers”, was decommissioned in 2004.
Delmarva Power still operates a DLC program under the name of “Energy for
Tomorrow.”

    


    PHI
desires to role this program out aggressively with installations beginning in
the first quarter of 2009. While the targets are considered the minimum to be
achieved, a greater market penetration is encouraged.

    


     

    
      	
              2.10  

            	
               Scalability

            


    

     

    It was
anticipated in the RFP that the relationship with PHI Service Company created
with this project may evolve into an expanded relationship for similar
work.  Other PHI DLC projects may occur in portions of Washington, DC,
Delaware, and New Jersey.

    


    Although
installation targets have been established by regulatory order, those
installation targets are subject to change by regulatory order at any time, and
may result in higher or lower total numbers of installations to be performed by
the contractor.  Comverge addressed their flexibility to absorb
expansions or contractions in the workload, and has identified volume break
points at which component production rates and/or personnel travel time and/or
availability of fully qualified personnel and/or operating facility capacity
affect prices.

    


    Comverge
stated that they will utilize members of their other teams, other contractors,
as well as staffing agencies if needed to help PHI reach the desired numbers.
Their staff could be trained and supervised by flying in national staff that
could help provide oversight and training.  While this provides
immediate relief, over time, the staff can then be augmented from local
sources.

    


     

    
      	
              2.11  

            	
               Location
      of Contractor’s Facilities

            


    

     

    This
project will involve field operations in areas on both sides of the Chesapeake
Bay.  Access to transportation routes across the Bay can be poor at
times, particularly in the warmer months of the year, but PHI expects customer
response and success at honoring appointments at customer locations to be
relatively consistent year-round.  The RFP notified bidders to
anticipate access problems in establishing their base(s) of operations to
maintain expected levels of performance.

    


    Furthermore,
Comverge has been notified that any potential relationship with PHI Service
Company might evolve into an expanded relationship for similar work that may
include portions of Washington, DC, Delaware, and New Jersey.  In
response, Comverge has provided pricing for program participation levels that
are up to twice as large as the basis for their original proposal.

    


    Comverge
has indicated that they will:

    
      	
              a)  

            	
              Use
      an existing facility in southern Maryland to provide training and support,
      and

            


    

    
      	
              b)  

            	
              Open
      two offices in the area to support the Maryland program for PHI. One
      office will be in the Maryland suburbs of Washington in Pepco service
      territory to support Pepco and the other in the Delmarva Power Maryland
      territory on the Eastern Shore of Maryland to support Delmarva Power. One
      of the offices is considered a branch office, where the Program Manager,
      Field Manager and Office staff will be located.  Additionally
      the space will support warehousing functions, the test bed, and all
      equipment necessary to support the
program.

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
       

      
        	
                3  

              	
                PHI Roles &
Responsibilities

              


      

       

      


    

     

    PHI will
provide:

    


    
      	
              ·  

            	
              Overall
      program direction

            


    

    
      	
              ·  

            	
              Advertising
      & branding requirements

            


    

    
      	
              ·  

            	
              Advertising
      & branding oversight

            


    

    
      	
              ·  

            	
              Customer
      care standards

            


    

    
      	
              ·  

            	
              Customer
      care performance monitoring

            


    

    
      	
              ·  

            	
              Regulatory
      coordination and reporting

            


    

    
      	
              ·  

            	
              Other
      necessary support and leadership as
required

            


    

    
      	
              ·  

            	
              Designated
      individuals and procedures for
approvals

            


    

    


    PHI (or
its affiliates) will own:

    


    
      	
              ·  

            	
              All
      hardware (control devices such as switches, thermostats and control
      communications equipment***, to the extent permitted by commercial or
      regulatory law).

            


    

    
      	
              ·  

            	
              Spare
      parts inventory & special tools purchased at the end of the contract
      for component installation and
maintenance.

            


    

    
      	
              ·  

            	
              Control
      software (including licenses and maintenance
  fees).

            


    

    
      	
              ·  

            	
              Customer
      information and data.

            


    

    
      	
              ·  

            	
              Program
      branding.

            


    

    
      	
              ·  

            	
              Any
      copyrighted material developed for this
program.

            


    

    


    At the
start of this project, PHI will designate the PHI Business Lead who will be the
focal point for communications relative to this project and will have the
authority to act on behalf of PHI in all matters regarding this project. The PHI
Business Lead's responsibilities include the following:

    


    
      	
              ·  

            	
              Manage
      the PHI personnel and responsibilities for
DLC

            


    

    
      	
              ·  

            	
              Serve
      as the interface between Comverge and PHI resources involved in the DLC
      project

            


    

    
      	
              ·  

            	
              Administer
      the Project Change Control Procedure with the Comverge Project
      Manager

            


    

    
      	
              ·  

            	
              Participate
      in project status meetings

            


    

    
      	
              ·  

            	
              Obtain
      and provide information, data, and decisions within *** of Comverge's
      request unless PHI and Comverge agree in writing to a different response
      time.

            


    

    
      	
              ·  

            	
              Review
      and approve deliverable materials submitted by
  Comverge

            


    

    
      	
              ·  

            	
              Resolve
      deviations from the estimated schedule which may be caused by
      PHI

            


    

    
      	
              ·  

            	
              Help
      resolve project issues and escalate issues within PHI‘s organization, as
      necessary

            


    

    
      	
              ·  

            	
              Take
      a joint leadership role in managing business process work products, issue
      resolution and management of change
control

            


    

    
      	
              ·  

            	
              Assist
      in facilitating collaborative discussions and follow-up meetings by
      providing support including, but not limited to: guiding team discussions,
      summation and synthesis of requirements, identification of appropriate PHI
      participants

            


    

    
      	
              ·  

            	
              Assist
      in resolving action items

            


    

    
      	
              ·  

            	
              Provide
      guidance and subject matter expertise in the completion of
      deliverables

            


    

    
      	
              ·  

            	
              Complete
      quality assurance reviews and deliverable signoffs in a timely
      manner

            


    

    
      	
              ·  

            	
              Supply
      all relevant as-is process documentation as well as all process analysis
      completed to date, as applicable

            


    

    
      	
              ·  

            	
              Provide
      access to key system demo / field test environments to facilitate system
      configuration and development

            


    

    
      	
              ·  

            	
              Provide
      facilities, meeting rooms, meeting support materials (flip charts, white
      boards, LCD projectors, etc), document production support, and meeting
      scheduling support to facilitate the activities documented in this
      SOW

            


    

    
      	
              ·  

            	
              Provide
      access to third-party personnel performing related work for PHI as
      required

            


    

    
      	
              ·  

            	
              Ensure
      appropriate participation of PHI personnel as
  required

            


    

    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
       

      
        	
                4  

              	
                 Comverge
      Roles & Responsibilities

              


      

       

      


    

     

    The scope
of Project Development responsibilities of Comverge include:

     

    
      	
              ·  

            	
              Development and
      management of a project plan that meets PHI’s objectives. The plan
      proposed will be modified in a joint effort between Comverge and PHI. A
      start up plan (which includes the first year deployment) is to be complete
      within ***days of contract execution and an overall program plan is to be
      completed within *** days of contract execution. The overall program plan
      will not delay the 2009 deployment.

            


    

     

     

    
      	
              ·  

            	
              Delivery
      of equipment that meets specifications of this Statement of Work
      Contract

            


    

     

     

    
      	
              ·  

            	
              Agreement
      to responsibilities as defined in Section 5 of this Statement of
      Work

            


    

     

     

    
      	
              ·  

            	
              Implementation
      of marketing plan including:

            


    

     

     

    
      	
              o  

            	
              Development
      of marketing plan document including
***

            


    

     

     

    
      	
              o  

            	
              Development
      of high level milestones implementation
timeline

            


    

     

     

    
      	
              o  

            	
              Development
      of *** and ***

            


    

     

     

    
      	
              ·  

            	
              Strategy
      and Tactical Plan with Timelines, Budgets and
  Goals

            


    

     

     

    
      	
              o  

            	
              Development
      of marketing collateral

            


    

     

     

    
      	
              o  

            	
              ***,
      and developed concepts and messaging
***

            


    

     

     

    
      	
              o  

            	
              ***
      to PHI designated accounts

            


    

     

     

    
      	
              ·  

            	
              Install
      Business Information System (“BIS”) according to mutually agreeable
      parameters for the purpose of handling recruitment, enrollment, and
      scheduling activities

            


    

     

     

    
      	
              ·  

            	
              Operate
      Call Center to handle recruitment, enrollment, scheduling activities and
      inquiries

            


    

     

     

    
      	
              ·  

            	
              Documentation,
      implementation and operation of all business processes and interfaces with
      PHI that will be defined during
workshops

            


    

     

     

    
      	
              ·  

            	
              Documentation,
      implementation, and providing all reports that will be defined during
      workshops conducted with PHI

            


    

     

     

    
      	
              ·  

            	
              Coordination
      of LMS implementation at PHI

            


    

     

     

    
      	
              ·  

            	
              Installation
      of equipment at customer location within agreed upon service
      levels

            


    

     

     

    
      	
              ·  

            	
              Obtaining
      and management of contract with ***

            


    

     

     

    
      	
              ·  

            	
              Ensuring
      communication with devices via ***

            


    

     

     

    
      	
              ·  

            	
              Ready
      to participate in proof of concept with PHI and its *** on communication
      to *** and *** with *** within *** of award of
  contract

            


    

     

     

    
      	
              ·  

            	
              Assisting
      PHI in migration of communication from *** communication
      protocols

            


    

     

     

    
      	
              ·  

            	
              Maintaining
      budget

            


    

     

     

    
      	
              ·  

            	
              Providing
      invoices to PHI with sufficient supporting documentation to enable PHI to
      approve payment

            


    

     

     

    
      	
              ·  

            	
              Ensuring
      availability of equipment for timely
  installation

            


    

     

     

    
      	
              ·  

            	
              Performing  all
      activities within agreed upon service
levels

            


    

     

     

    
      	
              ·  

            	
              Developing
      and adherence to a Safety Plan that is agreed upon by
  PHI

            


    

     

     

    
      	
              ·  

            	
              Inclusion
      of activities for other states as agreed upon in this Statement of
      Work

            


    

     

     

    Comverge
has committed that they have the in-house capabilities to deploy and manage a
comprehensive DLC installation and operation project.

     

    It is to
be clearly understood that some project functions or activities ***, and that
the role of *** may increase over time at ***.  ***has not determined
the specific functions or activities ***may determine what *** may be *** The
Terms & Conditions include provisions for such changes in scope over time,
and Comverge has acknowledged this requirement in discussions of how duties
might be transferred if PHI decides such a change is required.  The
business agreement is codified in the Terms & Conditions document (see
Appendix).

     

     

    Comverge
does not intend to sub-contract a significant portion of this work to one or
more sub-contractors, provided that the scope of work does not exceed the
nominal scale defined in this Statement of Work. Therefore, although Comverge
was required to identify subcontractor(s), and *** of those subcontractors, the
only subcontractors named were for ***, *** and ***.  In the RFP, PHI
reserved the right to direct Comverge to subcontract a minority business or
otherwise qualifying disadvantaged business of their choosing for some portion
of the project, subject to PHI approval.  Comverge has agreed to
consider use of subcontractors from a list of qualified minority and
disadvantaged businesses.  Comverge will remain the lead contractor,
regardless of whether or not subcontractors are used, and assumes full liability
for contractual performance.  Comverge shall clearly define the
demarcation in responsibilities, logically, functionally, and geographically
between parties in their contract team when subcontractors are
used.

     

     

    The
intent of this contract is for Comverge to provide a comprehensive suite of DLC
support services and hardware by working closely with PHI.  In return,
PHI expects Comverge to be compensated fairly and reasonably for their efforts
and for their flexibility in meeting the needs of PHI and PHI’s
customers.

     

     

     

    
      	
              4.1  

            	
               Comverge
      Project Organization & Staffing

            


    

     

    Comverge
describes below their proposed team organization roles and staffing based on the
skills and experience needed to meet the established project schedule, maintain
cost control, and achieve implementation targets.  Substitutions for
persons in roles designated in the team organization will only be permitted with
approval of PHI during the life of the contract.  PHI reserves the
right to approve or disapprove, within reason, any key changes in project
personnel.

     

    ***

     

     

    
      	
              4.2  

            	
               Project
      Management

            


    

     

    Comverge
will designate a single individual as the project manager whose primary
responsibility and authority will be to manage and administer the project for
Comverge to successful completion as defined within this Statement of Work. This
individual is the Comverge’s point of contact for PHI. In addition, Comverge
will be provided a single point of contact, the PHI project manager, to
represent PHI and be responsible for all PHI signature approvals. The primary
duties of Comverge’s project manager include:

    


     

    
      	
              ·  

            	
              Developing
      contract documents including SOW and contract supporting
      documents

            


    

     

     

    
      	
              ·  

            	
              Coordination
      and facilitation of workshops, including completion of
      documentation

            


    

     

     

    
      	
              ·  

            	
              Coordination
      and facilitation of focus groups

            


    

     

     

    
      	
              ·  

            	
              Allocating
      all necessary Comverge resources: personnel, financial, and material to
      ensure that the system is implemented to satisfy its standards, contract
      requirements and PHI goals

            


    

     

     

    
      	
              ·  

            	
              Managing
      Comverge’s project to the satisfaction of
PHI

            


    

     

     

    
      	
              ·  

            	
              Managing
      and refining project schedule and implementation
  plan

            


    

     

     

    
      	
              ·  

            	
              Managing
      contractual requirements including change orders and schedule
      adherence

            


    

     

     

    
      	
              ·  

            	
              Ensuring
      quality workmanship by all Comverge
  subcontractors

            


    

     

     

    
      	
              ·  

            	
              Ensuring
      all project engineering specifications are
met

            


    

     

     

    
      	
              ·  

            	
              Conducting
      a complete inventory of all received equipment to ensure complete and
      timely delivery

            


    

     

     

    
      	
              ·  

            	
              Maintaining
      accurate inventory tracking of all uninstalled equipment, minimal
      inventory levels  and stock
materials

            


    

     

     

    
      	
              ·  

            	
              Assuring
      that factory staging and testing is
completed

            


    

     

     

    
      	
              ·  

            	
              Ensuring
      that all site preparation is complete prior to the installation phase of
      the project

            


    

     

     

    
      	
              ·  

            	
              Directly
      supervising field installation and implementation teams ensuring all
      on-site installation and integration and optimization tasks are performed
      within contract requirements

            


    

     

     

    
      	
              ·  

            	
              Obtaining
      PHI sign-off and acceptance of completion of training and
      installation

            


    

     

     

    
      	
              ·  

            	
              Preparing
      for and conducting regular progress meetings and progress reports (and
      meeting summaries) as required

            


    

     

    


    


     

    
      	
              4.3  

            	
               Project
      Scheduling Methodology

            


    

     

    


    Comverge
will assign a Transition Manager within *** of contract signature to act as the
Single Point of Contact with PHI to manage all aspects of the contract.
Subsequently Comverge will assign a Lifecycle Program Manager who will work with
PHI throughout the remainder of the contract. The responsibilities listed below
for the Comverge Program Manager will be considered responsibilities for either
the Program Manager or the Transition Manager.

    


    Within
*** business days of contract execution, Comverge will run a kick-off meeting to
discuss program launch. Thereafter, the Comverge Program Manager will meet
weekly with the PHI Program Manager to review status, address action items and
review contract progress and milestones. The Comverge Program manager will
create program reports as discussed in section 8.1.

    


    The
Comverge Program Manager will work with the support teams over the first ***,
(e.g. IT, Zigbee product deployment, Call Center, Marketing, etc.) to ***and
design an overall project plan, maintained in Microsoft Project, that will be
designed to track the project and milestones of the program over the***. The
Comverge and PHI Program Managers will review the plan at least *** to review
changes that need to be made due to changes in scope, products, or AMI network
compatibility. After these discussions, Comverge Program management will provide
an updated plan to PHI for their review and consent.

    


    Additionally,
at the weekly review, Comverge and PHI will review all outstanding issues,
incident reports, and action items to ensure that the program keeps on
track.

    


    


    
      	
               
      

            	
              Comverge
      is to provide a schedule which Comverge feels will adequately control cost
      and results / quality of the project. At a minimum, Comverge shall provide
      milestones for project initiation, training, hiring/staffing, support
      facilities siting and development, IT interface design, IT interface
      development, IT interface testing, design reviews, implementation reviews,
      installation reviews, system optimization, acceptance testing, and
      stability / reliability testing (start and end
      milestones).  Comverge will then work with both the PHI DLC
      Project Team and the PHI Project Management Office to refine the schedule,
      and periodically update it, so that progress and goals can be accurately
      tracked by both Comverge and PHI.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
       

      
        	
                5  

              	
                DLC
      Contract Scope of Activities

              


      

       

      Comverge
is to provide recruitment services to support development of the DLC
program.  Comverge provided a high-level plan for development of the
recruitment effort, including needed resources, points of guidance, input and
approvals by PHI, level of effort expected from PHI for guidance and leadership,
and the associated costs of Comverge’s efforts.  The plan proposed
will be modified in a joint effort between Comverge and PHI, and the marketing
plan is to be completed within ***days of contract execution.

    

    


    PHI
expects some combination of the following mediums to be used, and Comverge will
work with PHI to develop their approach to recruitment.  This
collaboration will include a determination of which of these mediums will likely
be used, where they will be used, and why those combinations are
planned:

     

     

    
      	
              ·  

            	
              ***
      built and maintained by *** created in conformance with *** and using
      ***

            


    

     

     

    
      	
              ·  

            	
              ***
      using *** and materials approved by
***

            


    

     

     

    
      	
              ·  

            	
              ***,
      *** and other *** or informational programming created by Comverge in
      conformance with ***, using ***, and ***, which is broadcast, distributed
      or otherwise shown to ***

            


    

     

    


    As stated
above, Comverge’s approach will reflect PHI’s requirements for

     

    
      	
              ·  

            	
              Collaboration
      with PHI personnel on the approaches to be
used

            


    

     

     

    
      	
              ·  

            	
              ***

            


    

     

     

    
      	
              ·  

            	
              Preservation
      of the PHI brand

            


    

     

     

    As stated
in section 4.0, the intent of PHI is for Comverge to act ***for ***and***,
rather than as a *** or an ***.  As such, PHI will have the ***or
***be ***.  PHI recognizes that this may *** or *** the *** of various
***, but expects that prior to a decision being made, Comverge and PHI will have
candid and respectful discussion of the pro’s & con’s of various
options.  All input will be considered,***will be .***

     

    


    Approach

    


    Comverge
will perform market segmentation analyses in conjunction with PHI, of a type and
scope that are satisfactory to PHI after careful joint review of the
options.  These efforts will be used to develop a multi-year customer
recruitment plan, which is anticipated to define the targeting sequences for
specific market segments based upon criteria which will either be mutually
agreed, or if agreement cannot be reached, defined by PHI.

    


    Comverge
described possible approaches to segmentation and targeting in their proposal,
as follows:

    


    Branding

    


    As of
October 2008, PHI is already engaged in naming the DLC program, and in
developing the look and feel of the marketing collateral consistent with a
revamping of all PHI marketing images and collateral.  Consequently,
while Comverge will be expected to assist in implementing the branding choices
made, any actual involvement of Comverge in developing program names, marketing
materials, and themes will depend upon the timing of completion of this activity
and commencement of Comverge’s activities.  Comverge’s involvement in
program branding may be diminished if definition of the scope of work is
significantly delayed.   ***

    


    Marketing
Campaign Design & Development

    


    Comverge
will work in conjunction with PHI personnel to define the *** and
***.  Comverge proposed an approach which will be further developed or
modified in collaborative discussions with PHI personnel.  Initial
marketing campaign success rates will be compared to expected results, and
iterative changes may be adopted.  Comverge’s responsibility is to a)
*** of the merits of any particular approach or change in approach, with
***having *** of the path to be taken, and b) prepare a marketing plan for the
project, ***, for the joint project team to implement.

    


    Mail
Center Fulfillment

    


    Comverge
will collaborate with PHI for development and production of
***.  Comverge will either produce mail and advertising pieces or
contract their production, and will process and mail information &
enrollment kits as required by the jointly developed marketing
plan.

    


    The following items in
Comverge’s proposal may not be accepted for inclusion in the marketing
plan:

     
 

    ***

    The following items in
Comverge’s proposal are not accepted for inclusion in the marketing
plan:

    


    ***

    


    


    PHI
Resources, Points of Guidance, Input and Approval Process:

    


    PHI will
provide the following:

    


    
      	
              ·  

            	
              Branding
      guidelines

            


    

    
      	
              ·  

            	
              Style
      guide and color palate

            


    

    
      	
              ·  

            	
              Focus
      Group  assistance

            


    

    


    *** with
any written and verbal messaging to be used in marketing collateral, website,
bill messaging, ads, call center scripts and brochures and Free Standing Inserts
that ***.

    


    


     

    
      	
              5.1  

            	
               Customer
      Enrollment

            


    

     

    Comverge
will develop the capability for enrollment and engage in enrollment of PHI
customers targeted in this program, within the following
guidelines:

    


    Customers
enrolling in this program will have the opportunity to select any one of three
levels of participation, and will receive a different level of monthly incentive
for each level of participation.  Customers may change their level of
enrollment at least once during the initial cooling season of their enrollment,
or when specific circumstances exist that justify a change of enrollment level
or withdrawal from the program.

    


    Customers
also have the option to select either an indoor programmable communicating
thermostat or an outdoor switching device.

    


    Comverge
is to provide and support channels for Internet enrollment by customers,
Comverge’s Call Center, or by PHI CSRs acting on behalf of
customers.

    


    
      	
              ·  

            	
              Website
      enrollment for customers will be accessed via the PHI websites after the
      customer has executed a secure log
on.

            


    

    
      	
              o  

            	
              Comverge
      will provide PHI personnel in various departments (to be defined further
      through joint Comverge / PHI discussions) with ***to*** via web services, and
      the capability of *** in response to customer contact directly with
      PHI.

            


    

    
      	
              o  

            	
              These
      web services will be accessed via the internet using a server standard
      supported by PHI over a SSL channel. All messages will be exchanged using
      industry standard XML. Execution of DLC web services will be limited to
      Comverge's IP address, through the PHI Service
  Bus.

            


    

    
      	
              o  

            	
              Comverge
      will provide PHI customers the ability to *** at either the Comverge or
      the PHI ***.

            


    

    


    
      	
              ·  

            	
              Telephone
      enrollment will be supported by Comverge’s customer service center to a
      level that meets PHI service
standards

            


    

     

    
      	
              ·  

            	
              Comverge
      will create and develop a secure customer enrollment & tracking
      database that is:

            


    

     

    
      	
              o  

            	
              fully
      accessible by PHI personnel on a real time
basis

            


    

    
      	
              o  

            	
              fully
      maintained by Comverge over the life of the contract,
  and

            


    

    
      	
              o  

            	
              the
      data will be transferred to PHI in a PHI-acceptable and proven compatible
      format, including complete customer histories, upon expiration or
      termination of the contract

            


    

     

    
      	
              ·  

            	
              Comverge
      must install and maintain database security features that satisfy the
      requirements of PHI and the Maryland PSC regarding customer
      confidentiality and privacy
protection

            


    

     

     

    
      	
              ·  

            	
              Customer
      information will be validated upon entry  prior to activation of
      enrollment:

            


    

     

     

    
      	
              o  

            	
              Comverge
      is to work with PHI to define eligibility limitations and flag those
      requirements in their business information system (BIS) database in order
      to validate enrollments

            


    

     

     

    
      	
              ·  

            	
              Comverge’s
      database will be fully capable of implementing
  ***

            


    

     

     

    
      	
              ·  

            	
              Comverge
      is required to provide *** enrollment data and scheduled
    work

            


    

     

     

    
      	
              ·  

            	
              Website
      templates and graphic designs seen by customers during enrollment will be
      fully compliant with all PHI Standards and style guidelines, and approved
      by PHI prior to use

            


    

     

     

    
      	
              ·  

            	
              Website
      revisions will be accomplished on mutually agreed timelines and in
      collaboration with PHI personnel

            


    

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              5.2  

            	
               Customer
      Support

            


    

     

     

    
      	
              5.2.1  

            	
               General
      Requirements

            


    

     

    


    Comverge
is to provide customer support services for this project,
including:

    


     

    
      	
              ·  

            	
              Trained
      Call Center support staff to handle all program participant questions on
      enrollment, eligibility, withdrawal, installation, problems, or
      complaints

            


    

     

     

    
      	
              ·  

            	
              Call
      elevation for resolution to a
supervisor

            


    

     

     

    
      	
              ·  

            	
              Call
      transfer capability back to a PHI Customer Service Representative (CSR)
      for resolution of PHI account issues or complaint
  elevation

            


    

     

     

    
      	
              ·  

            	
              Real
      time current status reporting of customer account activity relating to DLC
      participation, installation schedules, or other Comverge controlled
      activities

            


    

     

     

    
      	
              ·  

            	
              Waiting
      times for PHI CSR’s calling for support of not more than
    ***

            


    

     

     

    
      	
              ·  

            	
              Rollover
      capability to voicemail in the event of call center overload, with
      customer callback occurring within
***

            


    

     

     

    
      	
              ·  

            	
              Website
      or phone fulfillment for information and enrollment
    requests

            


    

     

     

    
      	
              ·  

            	
              Mailing
      / emailing of information packets within two business days of request
      receipt

            


    

     

     

    
      	
              ·  

            	
              Mailing
      / emailing of confirmation packets within two business days of enrollment
      or enrollment change

            


    

     

     

    
      	
              ·  

            	
              Compliance
      with performance standards and service levels jointly defined by PHI and
      Comverge in support of this Statement of
Work.

            


    

     

     

    
      	
              ·  

            	
              Comverge
      and PHI will jointly establish performance measurement and reporting
      expectations, scripts, training requirements, and operational timelines
      within *** of contract execution

            


    

     

     

    
      	
              ·  

            	
              Comverge
      will establish phone lines into their CSC to support the PHI program
      within *** of contract execution

            


    

     

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              5.2.2  

            	
              Call
      Center Operations

            


    

     

     

    Comverge
is required to implement a customer service center operation maintaining, at a
minimum, the same operating hours as PHI CSCs.  The Comverge CSC will
support enrollment, scheduling, complaint, and customer contact activities to a
level that meets PHI service standards.

     

     

    
      	
              ·  

            	
              Comverge
      will jointly develop scripts and procedures for call center operations
      with PHI which satisfy PHI’s requirements and
  standards

            


    

     

     

    
      	
              ·  

            	
              Comverge
      will record ***of *** by the ***for at ***. PHI may request to review call
      by phone number by date.

            


    

     

     

    
      	
              ·  

            	
              Comverge
      will institute quality control metrics, reporting and auditing procedures,
      and PHI will institute parallel quality control monitoring, that allow PHI
      to verify call center performance in accordance with PHI requirements and
      standards

            


    

     

     

    
      	
              ·  

            	
              Comverge
      will implement a VRU system that provides handling of emergency customer
      call priorities and routing of program calls meeting PHI’s standards for
      operation and performance at all
times

            


    

     

     

    
      	
              ·  

            	
              Waiting
      times for customers will not exceed the service level standards to be
      developed ***

            


    

     

     

    
      	
              ·  

            	
              Customer
      Contact Information.  ***, Comverge shall provide PHI with a
      record of all communications between Comverge and PHI
      customers.  A copy of all remarks, contacts, or logs of
      communications from Comverge customer management system is
      sufficient.  PHI may import these records into its customer
      information system to keep PHI CSRs informed of the history of
      communications with PHI’s customers

            


    

     

     

    
      	
              ·  

            	
              Customers
      will be able to be directed to a ***, as appropriate. In addition, if the
      PHI data base indicates a customer is ***, Comverge will offer information
      ***.

            


    

     

     

     

     

    The
Comverge call center will manage the following functions for the PHI
program:

     

     

    
      	
              ·  

            	
              Act
      as first point of contact for the
Program

            


    

     

     

    
      	
              ·  

            	
              Development
      of scripts to address customer
inquiries

            


    

     

     

    
      	
              ·  

            	
              Qualify
      the caller as a valid participant on inbound
  calls

            


    

     

     

    
      	
              ·  

            	
              Initiate
      outbound calls to follow through on the acquisition
  process

            


    

     

     

    
      	
              ·  

            	
              Respond
      to e-mails and sign-up cards

            


    

     

     

    
      	
              ·  

            	
              Explain
      program processes and benefits

            


    

     

     

    
      	
              ·  

            	
              Confirm
      installation appointments with potential
  participants

            


    

     

     

    
      	
              ·  

            	
              Manage
      complaints and dispatch problem
solvers

            


    

     

     

    
      	
              ·  

            	
              Direct
      calls to appropriate Comverge personnel to escalate
  issues

            


    

     

     

    
      	
              ·  

            	
              Direct
      or transfer calls to Comverge/PHI

            


    

     

    


     

    
      	
              5.2.3  

            	
              Call
      Center Hours 

            


    

     

    


    Comverge
is required to implement a customer service center operation maintaining, at a
minimum, the same operating hours as PHI CSCs.  As such, the Comverge
call center is to be staffed from *** (Eastern time). During control events, the
call center will operate for *** additional hours after the close of the
event.  The operation hours of the call center will be adjusted to
accommodate PHI’s particular requirements, to handle volume days, or in response
to call patterns.  Each telephone workstation is to be equipped with
computer access to the customer database, tracking system, and dispatch
software.

     

    The
Comverge call center will have staff available *** to address equipment problems or
complaints.

     

    


    Emergencies.  Comverge
shall refer PHI customers to the appropriate emergency authorities in the event
of an emergency situation (e.g. customer calls the wrong number to report an
outage, a downed live electric line, or a gas leak).  PHI will provide
Comverge with appropriate contact information for emergencies to be addressed
regardless of the time the call is received.  Comverge’s voice
mail/VRU system will include a message regarding emergencies and the appropriate
contact information.   Certain types of emergency calls must, by
law, be responded to immediately and in accordance with regulatory
requirements.

    


     

    
      	
              5.2.4  

            	
               Field
      Support of Customers

            


    

     

    At least
one HVAC service technician will be designated as “on-call” for after hours
response to customer requests for assistance, reachable by pager and available
at the customer site within two hours of a customer’s request for
assistance.

    


    The
technician will determine whether the load control device itself or a faulty
installation has caused any malfunction of the controlled
equipment.  If the inspection reveals that the problem is with the
customer-owned air conditioning / heat pump system, and requires a single repair
to customer-owned components of the HVAC system that a) involves no more than
*** of technician time and/or *** worth of material, and b) the repair will not
jeopardize any warranty still in force on the customers’ equipment, the
technician is permitted to offer to make the repair without charge to the
customer.  In all other instances, the technician is required to
advise the customer to call their certified HVAC contractor.  Comverge
will report the outcome of the visit to the PHI project manager within ***, and
all relevant information must be entered into the tracking system. PHI may
follow-up with the customer to determine whether there are any remaining issues,
complaints or commendations.

    


     

    
      	
              5.3  

            	
               Customer
      Education

            


    

     

    Comverge
will:

     

    
      	
              ·  

            	
              Develop
      display materials for use in public presentations / town hall meetings
      with customer and public groups, or with regulatory authorities, at any
      time during the performance of the
contract

            


    

     

     

    
      	
              ·  

            	
              Develop
      and provide all required quantities of printed materials for provision to
      customers, to explain how their equipment works and what impact it will or
      will not have on the customer’s
premises

            


    

     

    Customer
education materials provided by Comverge will include *** (in the case of
thermostats), leave behind materials for when installation appointments are not
kept by customer or installation is not possible at customer’s home for
technical reasons (with explanation), and an instructional video available via
the PHI website on the features and programming of the thermostat(s) being used
in the program

     

    
      	
              ·  

            	
              All
      materials will be approved by PHI before distribution to any
      customer

            


    

     

     

    
      	
              ·  

            	
              All
      materials will carry PHI branding and comply with PHI branding
      requirements

            


    

     

     

    
      	
              5.4  

            	
               Customer
      Retention & Replacement

            


    

     

    Comverge
is required to maintain customer enrollment levels as closely as possible to the
original goals as shown in section 2.9.

     

     If
a new customer moves into a location that had been a previous participant in the
program, Comverge will initially set that customer to participate in the program
at ***, and will send an enrollment confirmation packet to the customer. The
customer will have the ***.

    
 

     

     

    
      	
              5.5  

            	
              DLC
      Communications Solutions

            


    

     

     

    PHI and
Comverge recognize that that the AMI solution will require optimization. To
ensure that the program reaches *** devices by the end of 2009, Comverge shall
be fully responsible for supplying to PHI a suite of products including
***.  Initially, the program will utilize a leased *** and a
***to***provided by Comverge. The *** to ***Solution will allow customers with
*** to have a *** and communicating through a *** to the customer’s ***. The ***
will allow for *** of the *** and pairing with the AMI meter (when installed),
providing PHI with *** that the AMI network will ***with the ***for the
anticipated asset life (minimally 10 years). For customers that do not have ***,
Comverge will install either a ***or a ***. Additionally Comverge will work with
PHI and the AMI services vendor to ensure that the ***and the *** will be
compatible with the specification detailed by the AMI vendor.

     

     

    Once PHI
activates its AMI Network (by small geographical areas), the Comverge devices
***and be *** with PHI’s AMI solution with ***.  This approach will
allow PHI to start with *** ***,and *** Comverge, allowing PHI to hit the
installation criterion while migrating to a more solid *** at a later
time.

     

     

    For the
***, Comverge will coordinate with the *** (i.e., ***) to ensure that all DLC
customer devices receive the *** necessary to ensure reliable DLC
operation.  In order to ensure the validity of the Comverge acceptance
criteria, Comverge will supply to PHI, prior to scheduling any ***installations,
their test and acceptance criteria which will be used to validate acceptable
***.  In the event improvements are necessary to the leased service
provided, Comverge will be responsible for working with its ***to make the Comverge will ensure
that *** will ***or Comverge will *** Comverge will base this measurement on the
*** made during installation and the acceptance criteria reviewed by PHI.
Comverge will provide a report to PHI on a monthly basis detailing their
testing. PHI reserves the right to independently test at customer facilities to
determine if the service provided by Comverge is adequate and meets the project
technical requirements.

     

     

    Additionally
on a *** basis Comverge will ensure that *** of all the devices have the ability
to respond to control signals. Comverge will provide a Quality Assurance plan
that will be designed to measure the signal during the cooling season by
providing inspection services to PHI during *** and ***, as provided in the
original pricing sheet. The inspectors will inspect a *** population *** points
(excluding ***), allowing PHI to determine with a *** confidence level, that the
system is operating as desired. Comverge will provide a data report of their
findings to PHI by *** of each program year.  If PHI desires a more
formal report, PHI understands that there will be an additional price for
Comverge’s support as outlined in the supplemental pricing sheet.

     

     

    Additionally
Comverge will ensure that ***than*** of the overall participants *** that they
***, including ***, ***, or *** including changes through the *** provided for
customer ***

    
 

     

    If
Comverge does not reach any of these *** Comverge will, at ***, provide ***and
develop and implement a plan to have the ***. Such plan may include Comverge
adding additional transmission equipment ***. If improvements are identified and
are required to improve the coverage for the PHI program, PHI agrees to work in
good faith with Comverge, within regulatory constraints,  to locate
available PHI assets on which additional transmission equipment can be placed to
address issues identified by Comverge, for the length of this SOW.
***

     

    In the
event *** is no longer a *** in the Delmarva or the Pepco Service Territories
(or makes technical changes to their ***, it is agreed that Comverge will in
good faith seek to obtain an alternative *** and work with PHI to ***In the
event a ***/operator of the *** system is provided and the PHI system remains
***, PHI will consider the change to constitute “***.”

     

     

    A
Comverge Load Management System (LMS) will be deployed at both the Delmarva and
Pepco control center locations with the desire to allow PHI complete system wide
control from any PHI control location or Comverge will host the LMS as agreed to
by the parties in the IT plan. During the initial phase (***), a connection to
the ***  from the Comverge LMS (as agreed to by the parties) will be
achieved through a secure VPN connection using
***.   Additionally, the system shall be capable of monitoring
the successful receipt of the load control messages sent from the Comverge LMS
to the *** ***.

     

     

    In the
event, the LMS does not get a satisfactory acknowledgement from the *** through
the *** connection, it will fall back to ***are ***

     

     

    From the
***, messages will be broadcast (utilizing ***) with a *** throughout the Pepco
& Delmarva Regions.  All Comverge devices in those regions will
decode each message and respond accordingly within the prescribed time allowed
by the program.  Comverge *** that *** will reach PHI customer end
devices within *** of initiation.  Monitoring and Verification of
message transmission will be achieved using the Comverge Remote Transmission
Monitor (RTM) which will be placed strategically near *** and or Pepco
transmitters in the Pepco & Delmarva service territories to ensure that the
*** System is operating when needed and trouble can be identified prior to any
load curtailment.   The *** will report all messaging in a
decoded format back to the LMS for comparison to the original message sent as
well as periodically (at least ***) that the *** system is performing
satisfactorily.  At some point, at PHI’s discretion, a change from
***with a***.  At that time, the RTM system will no longer have any
value to the Load Control Program but may have value to Pepco’s Capacitor
Control System ***  During some transition period, which could
represent years, PHI will need the Comverge LMS / Apollo solution to continue to
be capable of operating across both the ***at the same time.

     

     

    It is
also recognized that PHI plans to install and activate its ***in a yet to be
defined manner or time frame which could change throughout the course of the AMI
project deployment.

     

     

    As part
of this contract, Comverge accepts *** for the *** of their *** with ***which is
based on the ***

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              5.6  

            	
               DLC
      Device Solutions

            


    

     

     

    Comverge
will supply load control solutions that will accommodate a customer’s choice of
either a Programmable Controllable Thermostat (PCT) or an outdoor Digital
Control Unit (DCU). These solutions will also utilize existing company owned or
third party *** while also providing the ability to be upgraded to *** is
deployed in Maryland.

     

     

    The
Comverge DCUs and PCTs provided to PHI under the Scope of work will conform to
the following document which will be defined and mutually agreed to within ***
of the executed contract:

     

     

    
      	
              (1)  

            	
              PHI’s
      Specification for Direct Load Control Equipment,
  ***

            


    

     

     

    In
advance of the arrival of the ***, Comverge will supply, as part of this SOW and
at *** *** to PHI, *** at a number of homes outfitted with *** prior to the
deployment of PHI’s *** solution.  In addition, Comverge will supply
PHI customers with a discounted (to PHI) *** solution that includes a *** ***
with a *** module installed and a ***.

     

     

    PHI also
approves the use of the *** *** for use on this project during the initial
stages and understands that these solutions will have to be revisited to ***
***. Comverge agrees to supply the necessary truck-roll and communications
module *** for these *** as long as the *** is performed during the course of
this statement of work.  The initial roll-out quantities for each of
these options are shown in Section 7.

     

     

    Comverge
agrees and accepts that the ***) and the *** will become the *** once they
become available. PHI agrees that at a point, which is mutually agreed upon,
that these *** *** are available and capable of operating on ***, PHI will be
*** for the *** and *** options as indicated in the pricing listed in Section
9.

     

     

    PHI ***
Comverge Digital Control Units (DCUs) and Programmable Controllable Thermostats
(PCTs) in advance of customer deployment. Comverge will provide, at ***, up to
*** functional samples of each device and technical support to assist PHI with
the evaluation of these devices.

     

     

     

    
      	
              5.7  

            	
               End
      Use Controls Design & Functionality


            


    

     

     

    Comverge
will provide the following capabilities within their control
devices:

     

     

    DCU - The Digital Control Unit
(DCU) can control up to *** – *** *** on the main PCB and *** on the housing
base of the switch.  The base relays can be ***.  ***
***relay can control one HVAC stage (*** HVAC system requires ***relays for
proper control).  The *** relay can control high current loads such as
electric water heaters or pool pumps.  If the switch is installed in
*** or ***-dwellings where multiple compressors are in the same area, a single
switch can be used to control multiple compressors. For the purpose of this
program offering, PHI will require the DCU device to include only *** and
recognizes additional relays are optional and priced
separately.  Comverge agrees to support PHI if some numbers of
alternative configurations are required. Comverge has also provided PHI pricing
in the event PHI elects to have one DCU control more than *** single stage
compressors or *** stage compressor.

     

     

     

    All PCTs
control the HVAC system only.  The PCTs are compatible with both
single-stage and two-stage HVAC systems – fossil fuel or heat pump.

    


    Options
offered on mode of control:

    


    On / off
cycling

    


    RDLC
– Repeat DLC

    This mode
disconnects (shed) the load immediately for a fixed period.  By
incorporating a repeat value (maximum value of ***) as part of the command, the
device will repeat the control cycle as specified to extend the total control
time.  This is a fail-safe command structure because the device does
not require an end event command to stop the control.

    


    Ramped
cycling

    Comverge
products incorporate *** with *** to ensure graceful transitions into Load
Control, out of Load Control, and between different levels of Load
Control.

    


    Temperature
Setback (thermostat only)

    The
thermostat can be commanded to perform a temperature setback of
***  There’s capability to separately randomize the start and end of
the setback in *** increments.  The setback is based on the room
temperature at the start of control.  Normal programmed during the
middle of a ***.

    


    Price
Response (PRO thermostat)

    The Pro
PCT model can be configured to***Once enabled, the PCT will respond to tier
signals and allow customers to program the automatic responses to these signals.
Typically, the TOU schedule is a fixed schedule that changes between seasons
while the CPP signal is sent whenever additional load reduction is required by
the utility. ***. The PCT can be programmed to respond to ***. The PCT follows
the customer’s Time of Day (TOD) schedule that is programmed during the Low tier
period. Customers can also enable or disable the response to the M/H/C tiers in
the programming interface.

    


    


    Other Included
Features

    


    Response
to High and Critical tiers (PCT Only)

    To run
the TOU/CPP programs, TOU tier signals need to be sent at the ***. In addition,
a time synchronization signal is sent periodically to synchronize the PCT with
the system. Once the PCT receives the tier period signals and if the customer
chose to respond to the active tier, the PCT will override the current
programmed schedule and run the programmed set point for that tier. The LCD
always shows the tier that is currently active. When the tier response overrides
the TOD schedule, the TOD period label (shown in the upper left of the LCD) is
turned off, indicating that tier override is active. At the end of the tier
period, the PCT will return to the set point programmed by the customer
schedule.

    


    Override

    Customers
can request to override the event via the phone and / or the internet. The
Comverge system will know whether a customer has exceeded the number of annual
overrides that they are allowed and will prevent additional
overrides.

    


    Randomization of startup in
the event of a circuit outage.  Comverge products incorporate a Cold
Load Pickup feature to delay the energizing of the load when recovering from a
power outage.  The delay time is selectable in the configuration of
the DCU and SuperStat.

    


    Adaptive
Algorithm capabilities

    Both the
DCU and the PCT are capable of using ***that is based on ***(homes with
oversized air conditioners that do not contribute to the energy reduction) by
limiting the compressor run time based on a historical
profile.  Comverge offers ***, and *** has*** which make it
***

    


    Communications
channel redundancy

    Comverge
has designed ***in the *** and *** receivers by providing a *** and
***.  The *** has *** that can be selected within a
***.  The *** will be programmed to operate on the *** while the ***
will be programmed to operate on a *** to be defined by PHI within *** of the
execution of this SOW.

    


    


    


    Multiple
mode communication capability

    Comverge
will provide *** devices with a *** and a ***.  In a *** the *** is
the sole means of communication. Once *** is available, the devices should be
able to remotely transition over to the ***.

    


    Reprogramming
capability of the DCU / PCT devices

    Reprogramming
is possible through the ***.  Overall system design needs to take into
account the means and methods of enabling secure and reliable
reprogramming.  Comverge provides a ***inside the ***to allow for
***

    


    In
addition, Comverge provides a field diagnostics tool to support *** with the
capability of *** the *** and ***.  These updates are done via the
***with the ***

    


    UL-tested
and designed to be installed in compliance with the National Electrical Code and
local codes

    Comverge
DCU devices are designed to meet UL requirements and compliance to the NEC for
installation.  The DCU housings are designed for ease of install with
an integrated junction box for separation of high power connections for the
control circuit.  The housing is designed with 3 point mounting to
allow for secure attachment to typical building surfaces, while maintaining a
water tight seal on the door.  The door allows tamper protection with
options for a security tag and/or screws.

    The
SuperStatPRO has a *** and *** that are separated ***.  The back
housing is secured to the wall and utilizes terminal blocks to connect to the
dwellings’ thermostat wires.

    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              5.8  

            	
               End
      Use Controls Installation and Asset
Management

            


    

     

     

    
      	
              5.8.1  

            	
               Installation

            


    

     

    Comverge
will:

     

    
      	
              ·  

            	
              Use
      installers selected and trained to work around customer
      locations.

            


    

     

     

    
      	
              o  

            	
              All
      project personnel who will ever enter a customer’s premise will undergo
      and pass customer relations training satisfactory to
  PHI.

            


    

     

     

    
      	
              o  

            	
              All
      project personnel entering any customer’s premise must have undergone a
      criminal background check, and the results of each background check must
      be provided to PHI and acknowledged as acceptable by PHI before the
      individual may enter any customers’ premises for any reason on behalf of
      PHI.  Any personnel who are convicted of a felony during
      employment on this project immediately become ineligible to perform work
      on a PHI customer premise.  Such events must be reported to PHI
      within *** of the time at which Comverge becomes aware of the change in
      status.

            


    

     

     

    
      	
              o  

            	
              Background
      checks will be verified at random and field checks of personnel against
      approved lists will be conducted at random at PHI’s discretion without
      prior notice.

            


    

     

     

    Comverge
should be aware that PHI will require the contractor to satisfy the following
concerns:

     

     

    
      	
              ·  

            	
              Leave
      the customers’ premises in the same condition of cleanliness as found when
      they arrived or better.

            


    

     

     

    
      	
              ·  

            	
              Be
      responsible for damages done to customer property incurred during the
      course of control device
installation.

            


    

     

     

    
      	
              ·  

            	
              Comverge
      will make every opportunity to use local HVAC companies in order to
      further the aims of PHI’s supplier diversity
  program.

            


    

     

     

    
      	
              ·  

            	
              All
      field service personnel will receive customer
  training.

            


    

     

     

    
      	
              ·  

            	
              All
      project personnel who will ever enter a customer’s premise will undergo
      and pass customer relations training satisfactory to
  PHI.

            


    

     

     

    
      	
              ·  

            	
              Background
      checks will be verified at random and field checks of personnel against
      approved lists will be conducted at random at PHI’s discretion without
      prior notice.

            


    

     

     

    
      	
              ·  

            	
              Comverge
      seeks to hire certified, competent field
staff.

            


    

     

     

    
      	
              ·  

            	
              Customers
      will be able to self select appointment times through the web, IVR or by
      speaking to a representative.

            


    

     

     

    
      	
              ·  

            	
              At
      the beginning of the program, Comverge will offer a *** for Customer
      installations. This will be reevaluated throughout the program and every
      effort will be taken by the Comverge to arrive within this
      window.

            


    

     

     

    
      	
              ·  

            	
              Comverge
      will monitor Customer Satisfaction regarding the Installer / Installation
      process and report its results to PHI
weekly.

            


    

     

     

    
      	
              ·  

            	
              Comverge
      will provide *** reports on
installations.

            


    

     

     

    
      	
              ·  

            	
              Comverge
      will provide a *** Call Center report to PHI that will show how many calls
      are able to be resolved at the call center (first call resolution). This
      report will be provide to PHI, and the reasons that we were not able to
      resolve the call in the call center will be broken out and reviewed with
      PHI.

            


    

     

     

    
      	
              ·  

            	
              Comverge
      will dedicate a data analyst for Data Operations team to work with PHI to
      coordinate data and ensure that the installation data is in
      sync.

            


    

     

     

    
      	
              ·  

            	
              ***
      will be committed to the success of the program. If Comverge needs to
      install faster, Comverge will seek to bring in additional installers as
      required.

            


    

     

     

    
      	
              ·  

            	
              During
      the installation process, Comverge will assist the customer in programming
      the PCT, and will leave additional information with
    customers.

            


    

     

     

    
      	
              ·  

            	
              If
      a serious issue with a Customer’s AC unit is discovered, Comverge or
      Comverge’s Contractor will explain to the customer the issues that were
      identified during the pre-installation check, and recommend that the
      customer contact their local HVAC
technician.

            


    

     

     

    
      	
              ·  

            	
              In
      the situation where a Customer ***, the customer is informed by the
      technician the reason for the turndown. In the situation that the
      thermostat is ***, the technician ***. If the reason is due to the
      equipment, faulty wiring, etc, The Technician will explain the reason, and
      ask the customer to call back when the situation is remedied. A written
      explanation is left with the
customer.

            


    

     

     

    
      	
              ·  

            	
              In
      the situation where a Customer is receiving a ***or an *** and they ***.
      The *** will be *** for inspection. Note: Comverge will *** any
      ***

            


    

     

     

    
      	
              ·  

            	
              In
      the situation where a Customer is receiving a ***, the technician will
      remove the old equipment and leave it with the Customer. If the original
      *** contains hazardous materials, the technician will
  ***

            


    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              5.8.2  

            	
              Asset
      Management

            


    

     

     

    
      	
              ·  

            	
              Comverge
      will provide PHI with a flat file with installation records, the format
      for which is usually customized based on client requirements. Typically,
      the installation record contains the following
  fields:

            


    

     

     

    
      	
              o  

            	
              Utility
      Account Number

            


    

     

     

    
      	
              o  

            	
              Comverge
      Account Number

            


    

     

     

    
      	
              o  

            	
              Utility
      Premise ID

            


    

     

     

    
      	
              o  

            	
              Installed
      Device Type

            


    

     

     

    
      	
              o  

            	
              Installed
      Device Serial#

            


    

     

     

    
      	
              o  

            	
              HAN
      Related ID

            


    

     

     

    
      	
              o  

            	
              Client
      Side Equipment Type

            


    

     

     

    
      	
              o  

            	
              Client
      Side Equipment Make

            


    

     

     

    
      	
              o  

            	
              Client
      Side Equipment Model

            


    

     

     

    
      	
              o  

            	
              Client
      Side Equipment Rating

            


    

     

     

    
      	
              o  

            	
              Activity
      Date

            


    

     

     

    
      	
              o  

            	
              Activity
      Type (install, removal, move-out,
opt-out)

            


    

     

     

    
      	
              o  

            	
               Participation
      Level

            


    

     

     

    
      	
              o  

            	
              Number
      of compressors controlled

            


    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              5.9  

            	
               Customer
      Billing

            


    

     

    PHI plans
to make the changes necessary in their CIS and C3 billing systems to issue the
initial bill credits as well as place the monthly credits on its bills. The
initial bill credit is issued when the device is installed and the month bill
credit is issued during the months of June through October.

    


    Comverge
will work with PHI to ensure PHI has all of the information needed to correctly
code these accounts within *** of an installation or change in participation
level including leaving the program.

     

    


     

     

    
      	
              5.10  

            	
               System
      Interfaces

            


    

     

     

    PHI
believes that for the Program, to be successful, the interfaces between
Comverge’s computer systems and PHI’s computer systems must be designed well and
tested thoroughly.

     

    PHI
operates separate Customer Information Systems in the Pepco and Delmarva Power
service areas.  PHI call center reps are provided with access to both
systems.  Comverge will ***and be ***to ***  Comverge should
not assume that these systems will be replaced during the period of the
contract.

     

    Within
*** of awarding of the contract, Comverge and PHI will hold a set of business
process workshops for the purpose of developing of set of business processes
that address the entire scope of this statement of work. Comverge staff will
work with PHI to define the transfer methodologies, format and structure
required. ***. After the processes and interfaces have been agreed to, Comverge
will work with PHI to ensure the flow of information. The teams will begin to
test data sharing and will review IT issues and concerns at least weekly during
the initial time period. Comverge will have a *** will stay with the program
throughout the lifecycle of the program.

     

     

    The
deliverable from these workshops is a set business functional requirements and
the specific technical requirements for the Program and its interfaces that
include both a Comverge and a PHI perspective. Comverge will develop and produce
a series of specifications including:

     

     

    
      	
              ·  

            	
              Interface
      Requirements Specification (IRS – specifying the interface requirements
      and specifications),

            


    

     

     

    
      	
              ·  

            	
              LMS
      Configuration Specification (LCS – specifying the configuration of the
      LMS, and

            


    

     

     

    
      	
              ·  

            	
              Deployment
      Specification (DS – specifying the deployment architecture and
      specifications for deployment).

            


    

     

     

    Expected
completion date for the documentation is approximately *** after completion of
the meetings.

     

     

    The
Interface Requirements Document is used to outline interfaces.  This
document will detail the following information:

     

     

    1.  Interface
Overview

     

     

    2.  Interface
Type

     

     

         (i.e.
file transfer, SCADA, Web Service)

     

     

    3.  Interface
Interaction Diagrams

     

     

    4.  Interface
Specification

     

     

    (System
calls, parameters & arguments, file locations etc; these vary by
interface)

     

     

    5.  Exception
Handling

     

     

    6.  Best
Practices & Examples

     

     

    Once the
development of any interfaces is completed, they are unit tested by both
Comverge and PHI, as appropriate, using a series of internally developed test
“stubs” that verify their operation and performance.  Integration or
end-to-end testing will also be conducted prior to implementation.

     

     

    Comverge
will work with PHI IT to implement scheduled data exchange processes through
which PHI customer records will be updated on Comverge’s Business Information
System (BIS). Comverge and PHI will agree upon the frequency of each interface
file. Signup and installation information can be sent to the PHI Call Center and
Billing systems *** – encrypted files on a *** basis or real-time using
web-services. ***

     

     

    It is
agreed that Comverge and PHI will document the various components described in
Section 5 of this document. The will include various interfaces between the
Comverge BIS system, the load control system (LMS), the actual devices, and
various PHI applications. It will also include development of test plans and
Change Control procedures.

     

    Comverge
will use a standard method for all testing and acceptance criteria. An Overview
of this process is shown below

     



    

    


    


    


    From
these specifications and requirements, traceability to system testing and
acceptance criteria are established though 2 testing/integration
documents.  These documents include: The System Test Plan and Test
Scripts with Acceptance Criteria.

    


    The
System Test Plan includes the following details:

    1      Introduction
& Overview

    2      Testing
Environment Description

    2.1      Details
of Environment

    2.2      Notes
on variations to production environment

    3      Test
Activities

    3.1      Training
Process

    3.2      Test
Preparation and Setup

    3.3      Tools
and Scripts uses

    3.4      Defect
Management & Tracking

    3.5      Deliverables

    3.6      SCM/Change
Management Process

    3.7      Open
Issues not being tested

    4      Requirements
Listing & Acceptance Criteria (Traceability)

    5      Performance
Testing

    5.1      Redundancy

    5.2      Backup

    5.3      Load
& Scalability Testing

    6      Testing
Schedule

    


    The Test
Scripts Contains the following information:

    
      	
              ·  

            	
              Script
      Number

            


    

    
      	
              ·  

            	
              Requirements
      Covered

            


    

    
      	
              ·  

            	
              Pre
      Conditions Required for Script

            


    

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              5.11  

            	
              Safety

            


    

     

    PHI
Safety Objectives

    Comverge
will deliver products and services safely, complying with all applicable
international, federal, state and local health and safety laws and requirements
in processes, procedures, and equipment as required by PHI.

    


    Safe
Work Habits

    Comverge
will promote safe work habits for its installers in accordance with applicable
OSHA standards and PHI safety policies. If a representative of PHI notices
unsafe work, PHI has the right to stop the work until unsafe conditions are
resolved.

    


    Safety
Manual

    Comverge
will provide a Safety Manual, and will institute safety training and on the job
safety audit programs to implement their safety manual that are satisfactory to
PHI. PHI will review and approve the Safety Manual.

    


    Pepco
Holdings, Inc. and its affiliates are committed to excellence in workplace
safety. The Company believes that there is no job or activity so important that
it can not be accomplished in a safe manner.  Safety is our most
important corporate value and it is our goal that all employees and contractors
work accident and injury-free every day.

    


    At
PHI, each employee is responsible for their own safety and the safety of fellow
employees, our contractors and the public. To accomplish this, PHI
will:

    


     

    
      	
              ·  

            	
              Work
      to achieve zero accidents and injuries in all aspects of our business
      operations.

            


    

     

     

    
      	
              ·  

            	
              Conduct
      all activities responsibly and in a manner that promotes the health and
      safety of our employees, contractors, customers and the communities in
      which we do business.

            


    

     

     

    
      	
              ·  

            	
              Assess
      our safety performance on a regular basis, and at all levels of the
      Company.

            


    

     

     

    
      	
              ·  

            	
              Provide
      appropriate resources to implement and maintain safety programs and
      incorporate safety into the business planning
  process.

            


    

     

     

    
      	
              ·  

            	
              Foster
      employee wellness through education and employee
    involvement.

            


    

     

     

    
      	
              ·  

            	
              Promote
      open and proactive communications relative to workplace safety with our
      employees, contractors, regulatory agencies, public officials, and
      customers.

            


    

     

     

    
      	
              ·  

            	
              Comply
      with applicable federal, state, and local occupational safety and health
      laws and regulations in the communities in which we do
      business.

            


    

     

     

    
      	
              ·  

            	
              Work
      with our suppliers and contractors to ensure that the products and
      services that they provide meet our safety
  standards.

            


    

     

    


    Creating
a work environment that fosters continuous improvement in the safety of our
employees, contractors, customers and communities is a critical element of our
business success. All employees are held accountable for implementing this
policy and knowing the safety requirements that apply to their assigned
responsibilities. In support of this policy, fair and reasonable disciplinary
action may be applied when reasonable levels of safety performance are not
achieved.

    


    Comverge
will work closely with PHI Safety professionals to develop, within *** of the
execution of this SOW, safety processes, performance goals, auditing, and
periodic reporting as necessary to demonstrate compliance with these safety
requirements to PHI’s satisfaction.

     

    
      	
              5.12  

            	
              System
      Maintenance and Ongoing Support

            


    

     

     

    Comverge
is bidding to provide, install and maintain a long-life system that will
eventually be fully compatible with the AMI platform under
development.  The current Delmarva DLC system (Energy For Tomorrow)
has been in operation since 1988, and continues to function.  The new
system is also expected to have ***

     

     

    All
components of Comverge switches and thermostats will be designed and
manufactured for long life. Servers will be replaced based on PHI-IT’s server
replacement policies.

     

     

    Comverge’s
proposed solution must provide, at a minimum, sufficient capability to securely
and remotely monitor, manage, configure, update and control the key elements of
the DLC systems.

     

     

    Comverge
will ensure that all updates to their software and firmware will ***Comverge
will plan to support products as long as parts are available for
repair.

     

     

    Comverge
will refund or replace any malfunctioning DCU or thermostat at *** of the
equipment. The Thermostats and DCUs are warrantied from ***. The current
warranty is:

     

     

    
      	
              ·  

            	
              SuperStat
      Pro and DCU – ***

            


    

     

     

    
      	
              ·  

            	
              SuperStat
      Blue is warranted for ***.

            


    

     

     

    Comverge
staffing levels will be able to increase or decrease during the course of the
program in order to meet the mutually agreed upon installation targets. During
the periods of intense installation, Comverge should expect to have over
***technicians, management and support personnel in the Maryland PHI service
area.

     

     

    Comverge
will work with suppliers to ensure parts are available as necessary.  If a
part becomes discontinued, Comverge will notify PHI and work with PHI to acquire
last-buy parts to support the products.  

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              5.13  

            	
              PHI
      Personnel Training

            


    

     

    The
Comverge proposed solution may introduce new technology, processes and
procedures that must be supported and carried out by PHI staff over the solution
lifecycle. Adequate training must be provided to ensure that PHI acquires and
retains the skills and capabilities needed to sustain the operational
effectiveness of the proposed communication infrastructure during and after
expiration of the proposed contract.

     

     

    At a
minimum, Comverge will provide training modules, documentation, and support
periodic classes for PHI personnel regarding:

     

     

    Operation
of the control system

     

     

    Comverge
will work with PHI to decide how to configure the system to meet your needs, and
then will provide the appropriate training to ensure expert operability
throughout the life of the contract.

     

     

    Required
PHI maintenance of the control system and communication system(s), if
any

     

     

    Comverge
will recommend proper maintenance procedures of the control and communication
systems.  This includes periodic backup and maintenance of the database and
logs from the BIS and LMS.  Data integrity should be checked
periodically.  Comverge should develop and execute a periodic sampling
of the system such as a *** to ensure that the system operates
properly.

     

     

    Conversion
of the end point devices to AMI-compatible operation, if not already
AMI-compatible

     

     

    If
applicable, Comverge will work with PHI and the selected AMI vendor to define
the *** and to ensure the proper handling of security material.  Once this
process is defined, Comverge will train the responsible personnel to ensure a
seamless transition to the AMI network.

     

     

    Operation
of the CSR interfaces

     

     

    Comverge
will work with PHI to identify processes that need to be created to transfer
calls between the call centers, and will create the processes, work flows and
recommended scripts for PHI’s review. Comverge will then train call center
supervisors as required.

     

     

    
      	
              5.14  

            	
              System
      Operations

            


    

     

    


    PHI plans
for at least *** control consoles to be located at each System Operations
Control Center for Delmarva Power and Pepco. Each console will be capable of
***individually, while supplying redundancy in the event of a failure. PHI
employees will control operation of the system from a single location, and the
system is to be provided with the capability to operate each region separately
from the regional control center in the event of inter-regional communications
failure.  Comverge is expected to have a backup control system for
maintenance, abnormal event investigations and development of control code
revisions.

    


    The
following describes specific desires for the Operation of the DLC
System:

     

    The DLC
system will provide email notifications when an event is initiated. The emails
should be sent to internal as well as external recipients. Using ***,
notifications should be able to be sent to *** as well.

     

     

    The DLC
system should maintain ***

     

     

    In
addition, the system should also maintain detailed logs of all interactions with
the ***.

     

     

    The LMS
Master Station should be *** and all commands being sent to the communications
system.  This capability allows system users to *** of the *** and
***.

     

     

    When
devices are activated for control and operations, the LMS Master Station will
record the history of these actions and maintains a complete historical log of
all device operations.

     

     

    Users may
also use the LMS platform to find out if devices are being cycled during
specific events or times.  This is should be done by querying the
system against a customer account number or serial number.

     

     

    Event
Notification & Storage (AMI)

     

     

    When
using the ***are required to ***).  These events will be relayed to
the ***and used to ***.  Depending upon the AMI platform, exceptions
to event acknowledgements may be relayed in near real-time to the back office
LMS system.  In this case, the master station may produce accurate
representations of the control effectiveness and operations.

     

     

    All events and acknowledgements are to
be stored in the master station database and backed up
daily.  *** will ***The LMS can be used to send readdressing
commands at any time.  This function can be used to
***  This includes any programming operation including
overrides.

     

     

    Comverge’s
LMS system will be ***  This *** will allow PHI to *** into *** (see
addressing capability section) as well as map them into groups based on
***

     

     

    The LMS
will be the manager that maintains the addressing for the device.  When a
device is installed, the ***uses the ***to ***to set the ***of the ***.
 This also places the device into the LMS database with the corresponding
group assignment.  If a device’s address needs to be changed, a process
will be used (such as a file import) where the LMS will send out addressing
commands to each individual device that’s changed.  The ***will ***of the
***  If the device is removed from the program, the LMS will again send out
addressing command to take the device into a group that’s reserved for that
purpose.

     

     

    PHI will
have the ***and can *** in order to *** PHI can also ***

     

     

    During a
broadcast, a device receiver will listen for its unique serial address, match
and store the a) new operational addresses; b) cold load pickup time-outs and c)
tamper detect counts in its memory.  No two-load control receivers
have the same unique serial address. Comverge’s protocol will support up to ***
***

     

     

    The
programmable addresses will be assigned to the ***The programmable addresses
Group, Division, Substation and Rate are also known as Operational
Addresses.

     

     

    There is
also an address that is used as an all-call address that every *** will respond
to for control or addressing commands.

     

     

    Grouping
and Addressing (AMI)

     

     

    The LMS
Master Station will also provide the addressing and grouping required for ZigBee
Smart Energy Profile messages.  *** are *** than *** by the
***.  The addressing scheme is based on the use of a single enrollment
code that specifies the rate or program the particular device is enrolled in.
Since ***are***using the ***and ***can be *** and/or ***through the
***

     

     

    Initial
Comverge *** will not ***. The customer will have to either call-in to the call
center and request the override, or has to login to a web portal and add an
override. In both cases, Comverge will ***to ***about the ***and/or *** using
a***

     

     

    Comverge’s
***will allow *** are *** by the *** and *** to the ***in ***or ***

     

     

    The
maximum number of *** permitted per customer will be a configuration setting in
the DLC system. The DLC console (for system operators) or Web User interface
(for Call Center CSRs or end users) will reject any *** attempts beyond the
allowed ***, and will display an appropriate error message.

     

     

    The LMS
Master Station will produce a daily *** for system administrators so they know
the activity of the devices and users.  Additionally, reports maybe
produced automatically to tell users what addressing or device management
activities have been made.

     

     

    Event
Notification & Storage (AMI)

     

     

    When
using the *** are required to *** to the ***  These events will also
be relayed to the LMS Master station and used to show the operators the response
of devices to the ZigBee commands.  Depending on the ***, exceptions
to event acknowledgements maybe relayed in ***.  In this case, the
master station may produce accurate representations of the control effectiveness
and operations.

     

     

    Comverge
will work collaboratively with *** to ensure the ***

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
       

      
        	
                6  

              	
                IT
      Standards and Security Requirements

              


      

       

      


    

     

    PHI must
abide by regulations, guidelines, and best practices promulgated and recommended
by our regulatory agency, Federal Energy Regulatory Commission (FERC) and our
industry association, North American Electric Reliability Council (NERC). PHI
must also adhere to our own policies and practices regarding PHI IT networking
security, as well as industry best practices regarding transmittal of company
and customer data over a communication network, i.e., RF, internet connectivity,
broadband, etc. Comverge has committed to meeting the PHI policies and practices
described below.

    


    Comverge
commits that any location that houses PHI data will have SAS 70 Type II or ISO
27001 certification.

    


    Comverge’s
products support NERC cyber facilities standards and Comverge’s products and
implementation will comply with PHI’s security requirements.

     

    Comverge
believes the security features, and performance of those features will enable
PHI to establish NERC CIP-002-1 through CIP-009-1 procedures, mechanisms, and
practices.  The Comverge access control system provides an easy-to-use, yet
secure and auditable, foundation to support the policies required by NERC
CIP.

     

    http://www.nerc.com/files/Reliability_Standards_Complete_Set_21Jul08.pdf

    


    In
addition to the IT Standards and Security Requirements outlined here, Comverge
also commits to complying with agreements established per review of the PHI IT
IRT Requirements Checklist.

     

    
      	
              6.1  

            	
              Data and Information Technology
      Security

            


    

     

     

    
      	
              6.1.1  

            	
              Data
      Exchange Security Requirements

            


    

     

     

    Comverge
commits to complying with the following:

     

     

    
      	
              ·  

            	
              Data
      Transfer. PHI’s information shall be secured in transit from end to end,
      and at rest. Data transfer shall be encrypted between PHI and Comverge’s
      site. The data transferred shall also be encrypted and stored on
      Comverge's servers in encrypted form until usage of the data is
      required

            


    

     

     

    
      	
              ·  

            	
              Encryption
      Keys. Comverge shall provide PHI with Comverge's public encryption key.
      PHI will provide Comverge with PHI’s public encryption key. Data
      transferred from PHI to Comverge shall be encrypted with Comverge's public
      key. Data transferred from Comverge to PHI shall be encrypted with PHI’s
      public key.

            


    

     

     

    
      	
              ·  

            	
              Secure
      Server. Comverge shall provide PHI with a secure FTP server for transfer
      of data to Comverge.

            


    

     

    


     

    
      	
              ·  

            	
              Comverge
      uses a minimum encryption of ***, *** or better for file
      transfers.

            


    

     

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              6.1.2  

            	
              Handheld
      Security Requirements

            


    

     

     

    Comverge
uses Handheld devices currently to interrogate our devices. By the 2nd
quarter of 2009, Comverge will also be utilizing the Handheld devices to input
all work orders directly into our BIS system. While Comverge could enter the
information directly into the BIS system today, Comverge has undertaken
additional development activity to speed the entire process to allow for the ***
while ensuring accurate data capture at the device.  For a complete listing
of the data that’s extracted by the ***, please refer to the product description
in the attachment to the RFP Response.

     

     

    This
information will be transferred into the ***. The receiving server is located in
the Comverge Data Center. A full history of changes is maintained in BIS. The
handheld’s security features will include passwords and screen locks to aid in
prevention of data being extracted if the device is lost in the
field.

     

     

    The
diagram below illustrated how the data is moved from the handheld to Comverge’s
BIS system, and the firewalls in place to protect system data.

     

     

    


     

    

     

    


     

    
      	
              6.1.3  

            	
              Customer
      Service Center (CSC) Security
Requirements

            


    

     

     

    
      	
              ·  

            	
              Comverge
      and PHI will work *** In other instances, Comverge has had protocols that
      include requesting *** and ***, utilizing *** such as ***, or utilizing
      another ***.

            


    

     

     

    
      	
              ·  

            	
              Comverge
      commits to maintaining security of their BIS system.  Comverge’s BIS system is stored
      in a locked passkey accessible area in our Network Operating Facility.
      This data room can only be accesses by walking through *** secure areas,
      ***. Access to all BIS systems are provided only on a need basis.
      Different modules within the system are available only to roles requiring
      access. All passwords are required to be strong passwords, and they expire
      after ***. All changes made to any record are logged in the
      system.

            


    

     

     

    
      	
              ·  

            	
              Comverge
      commits to monitoring all our servers and applications *** on a proactive
      basis. The servers are monitored for heat, access, CPU usage, and uptime.
      Comverge’s Corporate IT Services is responsible for installing all patches
      and security. Comverge will conduct a semi-annual self-testing process for
      vulnerability assessments.

            


    

     

     

    
      	
              ·  

            	
              Comverge
      hosted servers are located in the Savvis Data Center in Santa Clara CA
      which is a SAS70 compliant co-location site. Servers are secured in locked
      cabinets accessible to Comverge personnel only. Entry into the datacenter
      is restricted thru scan card-pin / scan card-biometric
      identification

            


    

     

     

    
      	
              ·  

            	
              Comverge
      commits that upon an identification of a security breach, the issue is
      immediately escalated to senior IT management. Breach assessment process
      will identify systems under threat. If servers housing client information
      are affected, Comverge will inform PHI on a timely
  basis.

            


    

     

     

    
      	
              ·  

            	
              Comverge
      commits to maintaining failover servers which can be used by the Customer
      Service area in the event of a primary system failure. If BIS were to go
      down, Comverge will follow a documented process that allows calls to be
      processed. When BIS is unavailable, the Call Center representatives take
      the customers name, phone number, address, and explanation of the call.
      Comverge will update BIS on a timely basis when it becomes
      available.

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              6.1.4  

            	
              Website
      Security Requirements

            


    

     

    Comverge’s
website and hosting servers must include database security features that satisfy
the requirements of PHI and the Maryland PSC regarding customer confidentiality
and privacy protection.

     

    
      	
              ·  

            	
              Comverge
      commits to meet the Security Configuration Benchmarks from CIS (Center for
      Internet Security).

            


    

     

                          http://www.cisecurity.org/

     

    
      	
              ·  

            	
              PHI prefers
      real-time read/write access to customer enrollment data via web
      services. These web services will be exposed over the internet using PHI
      supported application server over a secure SSL channel. All messages will
      be exchanged using industry standard XML. Execution of DLC web services
      will be limited to the vendor's IP address, through the PHI Service Bus.
      Comverge has committed to being able to use web services or to exchange
      encrypted data flat files via an FTP
protocol.

            


    

     

     

    
      	
              ·  

            	
              Comverge
      will work with PHI to develop protocols for the various interfaces needed
      for the project to operate
successfully.

            


    

     

     

    
      	
              ·  

            	
              In
      addition to features described above, Comverge has committed to the
      following:

            


    

     

    
      	
              o  

            	
              Comverge
      uses a BIS, java based web application to manage customer interactions.
      Web servers, application servers and database servers are separate
      physical machines (standard 3-tier
architecture)

            


    

     

    
      	
              o  

            	
              All
      web transactions are done using https. SSL translation is done by a
      dedicated SSL Accelerator /
Load-balancer.

            


    

     

    
      	
              o  

            	
              BIS
      had defined roles which provide role based security on application logins.
      Logins are created only with appropriate authorization. Initial logins use
      a pre-expired password and a strong password scheme
    enforced.

            


    

     

    
      	
              o  

            	
              Session
      management done by Tomcat. Session information is stored only in memory.
      *** session time out is enforced.

            


    

     

    
      	
              o  

            	
              All
      activity on the BIS application are logged for security
      purposes

            


    

     

    
      	
              o  

            	
              Comverge
      actively manages servers used for hosting applications. Symantec
      Anti-Virus solution has been implemented on all servers and patches are
      installed on a regular schedule after testing. Intrusion detection is
      enabled on the firewall and alerts logged for audit
    purposes

            


    

     

    
      	
              o  

            	
              Comverge
      uses a *** scheme (***) to separate network traffic. *** are located in
      the *** and *** in the ***. Cisco equipment is used for firewall/intrusion
      detection

            


    

     

    
      	
              ·  

            	
              Attached
      is a network diagram depicting Comverge’s implementation of BIS for
      PHI.

            


    

     

    ***

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
       

      
        	
                7  

              	
                 Program
      Equipment Validation and
Commissioning

              


      

       

      


    

     

    
      	
              7.1  

            	
              Overall
      System Roll-Out

            


    

     

     

    Comverge
will provide a team of experts for commissioning the overall system. This team
will work with PHI to define control strategies, setup PHI systems and ensure
operations. The Project Manager will also coordinate with the Comverge Data
Operations team to ensure that data transfers can occur.  The system
will be tested, PHI will be trained, and the system configuration will be
considered complete only after PHI accepts the system.  Acceptance
will not be unreasonably withheld.

     

     

    PHI’s
expectation is that the DLC system will be initially operational, and tested,
prior to June 1, 2009, with Delmarva and Pepco having independent / redundant
operational control.  The capacity initially available for use as of
June 1 will be defined by May 1, 2009.  Actual regulatory targets for
development are as shown in Section 2.

     

     

    Fulfillment
and enrollment support systems and trained personnel must be in place and
operational no later than end of first quarter 2009, and enrollments must begin
before the end of end of first quarter 2009.

     

     

    Comverge
commits to work with PHI’s AMI vendor to adhere to all AMI requirements by year
end 2009. PHI commits to work with its AMI vendor to ensure this schedule can be
met. It is expected that -*** only devices will be installed ***. This is based
upon the design document for the *** being *** by ***.

     

     

    Field
device installations are to begin in the first quarter of 2009. PHI and Comverge
are working together to determine an implementation schedule that allow PHI to
reach its 2009, 2010, and 2011 goals, while minimizing the number of devices
installed that will need to be replaced with improved communications. To this
end, listed below is a preliminary table showing the number of devices to be
installed by Quarter for 2009 and 2010.  The representation below is
expected to be fairly accurate; however, both parties recognize the
***

     


    
      
         


      

      
        
           

  

        
          

        

      

      
        
          


           

          PHI
Service CompanyCONFIDENTIAL

        

      

    


     

    


     

    
      	
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    Note: The
number of is *** The *** of the *** may *** on the ***

     

    


     

    
      	
              7.2  

            	
              Equipment
      Validation

            


    

     

     

    Testing
and Customer acceptance is a critical aspect of any project
deployment.  During various phases of the project, Comverge and PHI
will work together to develop a test plan, test scripts and acceptance
criteria.

    Comverge
proposes the following project phases should have testing and
acceptance:

    


    
      	
              1.  

            	
              Phase
      0, Comverge will provide, at *** operational samples of each field device
      planned for deployment and technical support to PHI for the purposes of
      initial validation testing no later than *** after contract execution. It
      is recognized that the *** will not be available until the middle of the
      second quarter of 2009 and *** will not be available until ***. Comverge
      and PHI will follow the same validation process for those
      devices.

            


    

    


    
      	
              2.  

            	
              Phase
      1, Initial Deployment / Field Acceptance Testing:  No later than
      *** after contract execution, an initial deployment of switches and
      thermostats will be tested with PHI employees, who are also Maryland
      customers, on the proposed communications network.  This test
      will verify all operations, groupings, algorithms and all system
      interfaces to support the continued roll-out which will begin during the
      ***.

            


    

    


    
      	
              3.  

            	
              Phase
      2, ***: Once PHI and Comverge determine and install the load control
      system for *** with an initial deployment of hardware in the field; an
      extensive test will be conducted to verify all operations against a set of
      defined system requirements.  The purpose of this pilot is to
      verify the ability of the system to pair with an ***within the ***. This
      system is envisioned to operate in parallel to the base load control
      system so as to not affect the already deployed
  technology.

            


    

    


    
      	
              4.  

            	
              Ongoing
      Operations: Comverge will conduct an annual Quality Assurance Testing and
      Reporting as defined in Section
5.5.

            


    

    


     

     

    
      	
              7.3  

            	
               Field
      Acceptance Testing

            


    

     

     

    Comverge
will support deployment readiness through a process of internal system testing,
field pilots, and field verification during deployment.

     

     

    The
internal system testing constructs a replication of the physical system in a lab
environment.  The system is evaluated for interoperability between all
components, utilizing the actual LMS application, Paging, and *** to *** to the
*** This process executes a series of scripts that would be typical for Demand
Load Control, ensuring the system is ready for field pilot on customer
dwellings.

     

     

    The field
pilot is designed to ensure operation in representative locations through out
the service territory and compatibility with the customer’s appliances being
controlled.  Statistical sampling combined with the evaluation of the
communication networks coverage areas are used to determine the targeted
locations for the field pilot.  Final selection of field pilot participants
is coordinated through PHI.   In order to validate the ability to
configure hardware on any given device, lab testing would be
appropriate.

     

     

    As part
of the field pilot, Vendor also installs a sample population of remote
monitoring devices for direct feedback when events are initiated.  These
systems are expanded in numbers as the program transitions to full deployment to
maintain a statistical sample.

     

     

    The
following steps outline the field pilot process:

     

     

    1.  The
following steps outline the field pilot process

     

     

    2.  Select
field pilot customers

     

     

    3.  Schedule
installations of sample populations

     

     

    4.  Generate
work order for installation

     

     

    5.  Verify
installation operation on site

     

     

    6.  Install
remote monitoring device at selected sites

     

     

    7.  Preferred
site would have easy access to hardware to record NVM contents following an
event

     

     

    8.  Schedule
control event

     

     

    9.  Execute
event

     

     

    10.  Record
responses from each monitored site

     

     

    11.  Evaluate
data with respect to expectations

     

     

    12.  Use
call center for all customer initiated calls

     

     

    13.  Verify
call reporting/routing/outcome

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    



    
       

      
        	
                8  

              	
                 Operational
      Performance Measures, Monitoring &
Auditing

              


      

       

      


    

    Comverge
and PHI will jointly work to develop the specific Performance Measures
(including Service Levels), Monitoring, and Auditing requirements with the
intention of finalizing the various criteria within *** of award of contract.
Comverge will provide capabilities, information and/or access for the following
performance verification:

    


     

    
      	
              8.1  

            	
               Program
      Management Status and Statistical
Reporting

            


    

     

    There are
many measurement and verification controls within the DLC
application.  Management reports and statistical data help Comverge
and PHI to monitor the progression and success of the program.  To
provide for this detailed business analysis, it is expected that reporting
capabilities will include information in the following areas and will be based
on various time-periods (year-to-date, monthly, etc.)

    


     

    
      	
              ·  

            	
              Customer
      Activity and Management

            


    

     

     

    
      	
              ·  

            	
              Event
      Management and History

            


    

     

     

    
      	
              ·  

            	
              Customer
      Service and Satisfaction

            


    

     

     

    
      	
              ·  

            	
              Comverge’s
      philosophy is that the information is your information, and reports can be
      created or customized to fit your needs. Typical reports provided
      include:

            


    

     

     

    
      	
              ·  

            	
              Weekly
      Project Report

            


    

     

     

    
      	
              ·  

            	
              Monthly
      Customer Service Report

            


    

     

     

    
      	
              ·  

            	
              Monthly
      Progress Report

            


    

     

     

    
      	
              ·  

            	
              Monthly
      ACD report

            


    

     

     

    
      	
              ·  

            	
              Ticket
      Status Report

            


    

     

     

    
      	
              ·  

            	
              Customer
      interaction report

            


    

     

     

    
      	
              ·  

            	
              Event
      Activity report

            


    

     

     

    
      	
              ·  

            	
              Installation
      report

            


    

     

     

    
      	
              ·  

            	
              Incentive
      report

            


    

     

     

    
      	
              ·  

            	
              Move
      in\move out report

            


    

     

     

    
      	
              ·  

            	
              Removal
      report

            


    

     

     

    
      	
              ·  

            	
              Invoicing
      report

            


    

     

     

    
      	
              ·  

            	
              M&V
      report

            


    

     

     

    
      	
              ·  

            	
              Field
      hardware investigations /
replacements

            


    

     

     

    
      	
              ·  

            	
              Communications-related
      investigations / replacements

            


    

     

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              8.2  

            	
              Data
      Exchange Transaction Performance Service
Levels

            


    

     

    Electronic
data services must meet the following performance service
levels.  Comverge will provide monthly status updates to PHI outlining
their actual performance against these performance standards.

     

    
      	
              ·  

            	
              Interface
      data file from Comverge must be processed accurately for *** of all
      transactions in the period

            


    

     

     

    
      	
              ·  

            	
              Comverge
      database system availability of ***
***

            


    

     

     

    
      	
              ·  

            	
              Accuracy
      of data transmitted must achieve ***
***

            


    

     

     

    
      	
              ·  

            	
              Turnaround
      time on transmitted updates must not exceed ***
  ***

            


    

     

    


    Failure
to meet the above service levels will require remedies and requirements as shown
in the following sections;

    


     

    
      	
              8.2.1  

            	
               Severity
      Levels

            


    

     

     

    Severity
Level 1 – Platform Failure

     

     

    Critical
system failure resulting in the *** being***

     

     

    Severity
Level 2 – Billing data failure

     

     

    Critical
system failure resulting in contractor site / information being
***.

     

     

    
      	
              8.2.2  

            	
               Designated
      Responsible Parties & Contact Information
  Updates

            


    

     

     

    Comverge
has designated the following key personnel responsible for overall information
systems operations for support of this contract. .

     

     

    
      	
              ·  

            	
              Business
      Systems Manager

            


    

     

     

    
      	
              ·  

            	
              Senior
      Director, Information Technology

            


    

     

     

    
      	
              ·  

            	
              Program
      Manager

            


    

     

     

    
      	
              8.2.3  

            	
               Required
      Remedial Actions

            


    

     

     

    8.2.3.1   Upon
failure to meet a performance service level, PHI shall expect the issues causing
the problem to be resolved prior to the next processing run.  Comverge
agrees to provide PHI with a detailed action plan within *** business days of
notice of such occurrence, outlining the steps to be taken or which have been
taken to correct the problem and prevent the situation from occurring
again.  Within *** business days of notice of the occurrence, Comverge
shall demonstrate to PHI that the plan has been implemented or that Comverge has
taken affirmative steps to implement the plan within *** business
days.

     

     

    8.2.3.2 Upon the
*** of any failure to meet a performance service level with a ***, and that
failure was the result of a *** the operating supervisor will call PHI to
discuss the problem(s), in addition to the required written reporting actions
defined in this section.

     

     

    8.2.3.3    Upon
the *** occurrence within any *** period of a substantially similar failure to
meet a ***, *** event of service level, Comverge’s  VP
of  Operations  agrees to meet with PHI to discuss the
problems, in addition to Comverge’s foregoing plan and resolution
obligations.

     

     

    8.2.3.4    Upon
the *** within any *** period of a substantially similar failure to meet a
performance service level, and that failure was the result of a production event
of any service level severity, the *** will meet with PHI jointly to discuss the
a) the problem(s), b) the plan proposed to resolve the problem permanently, in
addition to the obligation to provide the written plan within the deadlines
specified in section 8.2.3.1.  *** within any ***

     

     

     Interface
Data Transaction Standards

     

     

    As stated
in Section 8.2, the measure of *** successful processing of all interface
transactions is a measure of timeliness and accuracy of transactions processed
by the contractor and forwarded to PHI for reflection in billing and customer
service activities.  Customer complaints or claims, or additional
errors identified by contractor or PHI in a calendar month will be compared to
the number of transactions processed by the contractor in the calendar
month.

     

     

    System
Availability.  Comverge will establish and maintain systems
providing secure access with a *** or better systems availability
commitment.  Availability will be calculated by comparing a)
***  To be classified as scheduled downtime, contractor must have
provided to PHI a written notice five *** of any outage less than or equal to
five ***.  Any scheduled downtime greater than *** will require *** to
PHI in order to be considered scheduled downtime for calculation of system
availability.  Included in any written notice should be the planned
maintenance activities the contractor will be performing.  The
application components that provide recruitment, enrollment, login, presentment
of billing credits, election of options by customers, account database /
information transactions, and logout will be measured to determine availability,
including supporting servers.

     

     

    Accuracy of
Data.  Comverge is responsible for receiving summary data,
processing summary data into the correct specification, and ensuring that data
is displayed correctly to all parties using the Comverge’s
systems.  The accuracy rate of this data will be at least
***  The measurement of data accuracy will be the number of
customer-related complaints or claims as a result of Comverge error compared to
the total number of customer-related electronic transactions processed for the
month.

     

     

    Turnaround.                              
Comverge agrees to a minimum turnaround of twenty-four (24) hours from receipt
of usable data files to subsequent release of processed changes, updates or
transactions.

     

     

    
      	
              8.3  

            	
              Customer
      Satisfaction / Surveys

            


    

     

    PHI will
conduct periodic customer satisfaction surveys regarding the communications
between the customer and Comverge’s CSC. Comverge shall implement a customer
feedback system that captures customer compliments, complaints and suggestions
and that implements a process to address each. Comverge shall be required to
collect and report the following statistical call data on an ad-hoc, interval
(PHI collects data on a thirty (30) minute interval basis), daily,
month-to-date, month-end and YTD basis including”

     

    
      	
              ·  

            	
              Total
      calls

            


    

     

     

    
      	
              ·  

            	
              Average
      Speed of Answer (ASA)

            


    

     

     

    
      	
              ·  

            	
              Wait
      time

            


    

     

     

    
      	
              ·  

            	
              Total
      and average call handle time

            


    

     

     

    
      	
              ·  

            	
              Total
      and average talk time

            


    

     

     

    
      	
              ·  

            	
              Total
      and average after call work time

            


    

     

     

    
      	
              ·  

            	
              Total
      and average hold time

            


    

     

     

    
      	
              ·  

            	
              Total
      and average unavailable time (paid non-break
  time)

            


    

     

     

    
      	
              ·  

            	
              Calls
      per representative

            


    

     

     

    
      	
              ·  

            	
              Calls
      per *** interval

            


    

     

     

    
      	
              ·  

            	
              Calls
      per day

            


    

     

     

    
      	
              ·  

            	
              Calls
      per month

            


    

     

     

    
      	
              ·  

            	
              Abandoned/lost
      calls

            


    

     

     

    
      	
              ·  

            	
              Total
      number and percent of calls blocked or busy
  calls

            


    

     

     

    
      	
              ·  

            	
              Telephone
      Service Level (TSF) daily, weekly, monthly,
  quarterly

            


    

     

     

    
      	
              ·  

            	
              Calls
      transferred to PHI

            


    

     

     

    
      	
              ·  

            	
              Short
      calls (<***)

            


    

     

     

    
      	
              ·  

            	
              Breakdown
      of why customers are calling***

            


    

     

     

    
      	
              8.4  

            	
               Audits

            


    

     

    PHI shall
have the right to *** audit aspects of *** operations and records, and audits
may also be conducted at the request of the Maryland PSC.

    


    



    
      
         


      

      
         


        
          

        

      

      
         


        
          


           

          PHI
Service CompanyCONFIDENTIAL

        

      

    


    
       

      
        	
                9  

              	
                 Pricing

              


      

       

      


    

    


    Hardware

    The
hardware device pricing for the Comverge proposal is located below.

    


    ***

    


     

    Comverge
provided PHI *** related to its The specific pricing for each of these options
is shown in the tables below. Comverge also proposed *** The pricing details are
reflected in Appendix 12.2.***

     

     

    ***Permitting Costs

     

     

    Proposed
costs do ***if required.  PHI and Comverge will work in good faith
together with the applicable ***

     

     

    ***
Commercial Paging Service

     

     

    In
addition to the hardware Costs, Comverge proposed the *** to provide *** to the
***

     

    
      	
              ·  

            	
              ***.

            


    

    
      	
              ·  

            	
              ***

            


    

     

    


     

     

    Comverge’s
Warranty Offer:

     

     

    
      	
              ·  

            	
              Extend
      equipment warranty from *** from date of ***for a*** the equipment *** of
      the Continue the *** of this agreement ***to enter into a *** with
      ***.

            


    

     

     

    
      	
              ·  

            	
              ***

            


    

     

     

    
      	
              ·  

            	
              ***

            


    

     

     

    Inventory
Carrying and Shipping Costs:

     

     

    
      	
              ·  

            	
              Comverge
      is offering to receive payment for ***at the ***which is comprised of an
      ***

            


    

     

     

    Volume
Discounts on Equipment pricing:

     

     

    
      	
              ·  

            	
              In
      the event that volume for the entire program were to *** *** in the
      base case, *** each
      and switch prices would ***  each
      from the respective price quotes.

            


    

     

     

    
      	
              ·  

            	
              In the event that the
      volume for the entire program were *** *** and *** would ***from
      respective price quotes.

            


    

     

     

    
      	
              -  

            	
              Pricing breaks are
      based on ***, and do not correspond to ***in
  volume.

            


    

     

     

    Volume
Discounts on Installation pricing:

     

     

    
      	
              ·  

            	
              In
      the event that volume for the entire program were *** from ***,
      Installation prices quoted would ***, however, the service call price of
      *** would ***.

            


    

     

     

    
      	
              ·  

            	
              In
      the event that volume for the entire program were *** of the assumed base
      case for each of the respective regions, Installation
      prices  would *** if volume changed occurred prior to start of
      program, otherwise the ***

            


    

     

     

    
      	
              ·  

            	
              In
      the event that PHI eliminates the ***, the *** quoted would remain *** for
      the region in which Comverge continues to
***.

            


    

     

     

    
      	
              -  

            	
              Pricing breaks are
      based on ***, and do not correspond to a
  ***.

            


    

     

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    ***:

     

     

    
      	
              ·  

            	
              Comverge
      has offered to provide to PHI the *** at a price of *** per unit if PHI
      chooses to remain with the *** with *** to ***, rather than *** the
      program to the *** upon
availability.

            


    

     

    


    “Availability”
refers to Comverge’s ability to begin ***.

    


    Multiple
Compressor Control (DCU)

     

    
      	
              ·  

            	
              In
      the event that two outdoor compressors are close enough together to be
      controlled by a ***, the installation charge for the
  ***.

            


    

     

     

    


     

    Call
Center Termination Offer:

    
      	
              ·  

            	
              Comverge
      agrees that there will be ***to PHI
***

            


    

    
      	
              ·  

            	
              If
      *** to *** and***the proposed *** would In addition, it is expected that
      the *** will be ***

            


    

    
      	
              ·  

            	
              Comverge is offering to provide
      PHI with training and any other consulting services at an hourly rate of
      ***. A fixed fee Statement of Work for these consulting services could
      also be priced.  ***

            


    

    


    


    ***:

    
      	
              ·  

            	
              ***

            


    

    


    
      	
              ·  

            	
              ***

            


    

    


    


    Note: ***


    
      
         


      

      
         


        
          

        

      

      
         


        
          


           

          PHI
Service CompanyCONFIDENTIAL

        

      

    


    
       

      
        	
                10  

              	
                Appendix

              


      

       

      


    

     

    10.1  PHI
Standard Terms and Conditions

     

     

    See
Attached.

     

    


    


    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


     

    


    


    


    


    


    PHI
SERVICE COMPANY - COMVERGE

    TERMS
AND CONDITIONS

    FOR
DIRECT LOAD CONTROL SOLUTION

    


    


    


    


    


    


    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


     

    


    


    


    PHI
SERVICE COMPANY

    TERMS
AND CONDITIONS

    FOR
DIRECT LOAN CONTROL SOLUTION

    


    


      
        	
                Table
      of Contents

              	 
      
	
                Article

              	 
      	
                Page

              	 
      
	
                I

              	
                Definitions

              	
                3

              	 
      
	
                II

              	
                Preliminary
      Matters

              	
                6

              	 
      
	
                III

              	
                Drawings

              	
                6

              	 
      
	
                IV

              	
                Management
      and Personnel

              	
                7

              	 
      
	
                V

              	
                Schedule

              	
                9

              	 
      
	
                VI

              	
                Utility
      Services

              	
                9

              	 
      
	
                VII

              	
                Completion
      of the Work

              	
                9

              	 
      
	
                VIII

              	
                Safety
      and Protection

              	
                10

              	 
      
	
                IX

              	
                Site
      Cleanup and Restoration

              	
                11

              	 
      
	
                X

              	
                Titleholder
      and Risk of Loss

              	
                12

              	 
      
	
                XI

              	
                Materials

              	
                12

              	 
      
	
                XII

              	
                Equipment

              	
                12

              	 
      
	
                XIII

              	
                Changes
      in Scope of Work

              	
                13

              	 
      
	
                XIV

              	
                Installation
      Instructions

              	
                13

              	 
      
	
                XV

              	
                Deliverables

              	
                13

              	 
      
	
                XVI

              	
                Testing
      and Inspection

              	
                13

              	 
      
	
                XVII

              	
                Warranties

              	
                14

              	 
      
	
                XVIII

              	
                Claims

              	
                15

              	 
      
	
                XIX

              	
                Dispute
      Resolution

              	
                16

              	 
      
	
                XX

              	
                Termination

              	
                17

              	 
      
	
                XXI

              	
                Prices
      and Payment

              	
                18

              	 
      
	
                XXII

              	
                Confidentiality

              	
                18

              	 
      
	
                XXIII

              	
                License
      Fees and Royalties

              	
                19

              	 
      
	
                XXIV

              	
                Compliance
      with Laws and PHI Requirements

              	
                19

              	 
      
	
                XXV

              	
                Indemnification

              	
                19

              	 
      
	
                XXVI

              	
                Insurance

              	
                20

              	 
      
	
                XXVII

              	
                Audit
      and Recordkeeping

              	
                21

              	 
      
	
                XXVIII

              	
                Force
      Majeure

              	
                21

              	 
      
	
                XXIX

              	
                Subcontracting

              	
                22

              	 
      
	
                XXX

              	
                Miscellaneous

              	
                22

              	 
      
	 
      	 
      	 
      	 
      
	
                ATTACHMENTS

              	 
      	 
      
	 
      	 
      	 
      	 
      
	
                Contract
      Safety Requirements

              	
                Attachment
      A

              
	
                Contract
      Change Authorization Form

              	
                Attachment
      B

              
	
                List
      of Approved Hazardous Waste Disposal Sites

              	
                Attachment
      C

              
	
                Cardinal
      Safety Rule Policy

              	
                Attachment
      F

              
	 
      	 
      	 
      	 
      


      

    

     

     

     

    
      
         


      

      
         


        
          

        

      

      
         


        
          


           

          PHI
Service CompanyCONFIDENTIAL

          


        

      

    


    


    


    PHI
SERVICE COMPANY

    TERMS
AND CONDITIONS

    FOR
DIRECT LOAN CONTROL SOLUTION

    


    


    Article
I                      Definitions

    


    As Built Drawings means
drawings of Goods in final completed and installed condition.

    


    Affiliate of any entity means
any other entity that directly or indirectly controls, is controlled by or is
under common control with such entity.  An entity shall be deemed to
have control of another entity if the controlling entity owns 10% or more of any
class of voting securities (or other ownership interests) of the controlled
entity or possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of the controlled entity, whether
through ownership of stock, by contract or otherwise.

    


    Attachments shall mean any of
the documents designated as “Attachments” that are attached to these Terms and
Conditions.

    Cardinal Safety Rule Policy
shall mean the Policy attached hereto as Attachment F.

    


    Claim shall have the meaning
set forth in Section 18.1.

    


    Completion shall have the
meaning set forth for such term in Section 7.1.

    


    Confidential Information shall
have the meaning set forth in Section 22.1.

    


    Contract shall have the
meaning set forth in Section 2.1.

    


    Contract Change Authorization
shall mean a material change to the PO including, but not limited to,
changes to: quantities, Contract Milestone Schedule, prices, quality, or the
Scope of Work.  The term Contract Change Authorization, as used in
this Contract, shall have the same meaning and affect as the terms “Change
Order” and “Field Change Notice” as those terms may be used from time to time by
one or more of the PHI Affiliates.

    
Contract Change Authorization Form
shall mean the form attached hereto as Attachment B that is used by the
Parties to effectuate a change in Contract terms, Contract Price or Contract
Milestone Schedule in response to a Contract Change Authorization or other event
as described in Article 14.  The Contract Change Authorization Form,
as used in this Contract, shall have the same meaning and affect as the “Change
Order Forms” and “Field Change Notices” that may be used from time to time by
one or more of the PHI Affiliates.

    


    Contract Documents shall have
the meaning set forth in Section 2.1.

    


    Contract Price shall mean the
price for the Work as set forth or referenced in the PO and/or SOW.

    


    Contractor shall mean the
entity providing Goods and/or performing the Services as specified in this
Contract.

    


    Contractor’s Proposal shall
mean the proposal submitted by the Contractor in the course of developing the
Contract.

    


    Contract Term shall mean the
period of time from the effective date of the Contract until
termination.

    


    Contractor’s Executive shall
have the meaning set forth for such term in Section 19.3.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Contractor's Records shall
mean any and all information, materials and data of every kind and character,
including without limitation, records, books, documents, subscriptions,
recordings, agreements, purchase orders, leases, contracts, commitments,
arrangements, notes, daily diaries, superintendent reports, drawings, receipts,
vouchers and memoranda, and any and all other agreements, sources of information
and matters that may, in PHI's reasonable judgment, have any bearing on or
pertain to any matters, rights, duties or obligations under or covered by the
Contract. Contractor’s Records shall be deemed to include hard copy, as well as
computer readable data, written policies and procedures, time sheets, payroll
registers, payroll records, cancelled payroll checks, subcontract files
(including proposals of successful and unsuccessful bidders, bid recaps, etc.),
original estimates, estimating work sheets, correspondence, change order files
(including documentation covering negotiated settlements), backcharge logs and
supporting documentation, invoices and related payment documentation, general
ledger entries detailing cash and trade discounts earned, insurance rebates and
dividends, and any other items that may be used by PHI to adequately permit
evaluation and verification of: (i) Contractor compliance with Contract
requirements, (ii) Contractor compliance with PHI's business ethics policies;
and (iii) Contractor compliance with Contract provisions for pricing change
orders, invoices or claims submitted by the Contractor or any of its
Subcontractors. Contractor shall be required to preserve the Contractor’s
Records for a period of three years after final payment under the
Contract.

    


    Deliverables shall mean any
and all of the documentation, including but not limited to, all Drawings,
installation and operation manuals, and copies of manufacture’s warranties, that
Contractor is required to provide to PHI pursuant to the requirements of the
Contract.

    


    Design Documents shall have
the meaning set forth for such term in Section 3.1.

    


    Dispute shall have the meaning
set forth for such term in Section 19.1

    


    Dispute Notice shall have the
meaning set forth for such term in Section 19.2.

    


    Dispute Resolution Procedure
shall mean the procedure described in Section 19.1.

    


    Drawings shall mean As-built
Drawings, field installation, original design and Shop Drawings, when referred
to together.

    


    Equipment shall have the
meaning set forth in Section 12.

    


    Executive Settlement shall
have the meaning set forth for such term in Section 19.3.

    


    Extra Work shall mean changes
in the amount of Work occasioned by a Contract Change Authorization issued by
PHI.

     

    F.O.B. shall mean Free on
Board.

     

    Force Majeure shall have the
meaning set forth in Article XXVIII.

    


    Freight Routing Guide shall
mean the shipment methods and freight carriers designated by PHI for use when
PHI is responsible for delivery costs under the SOW.

    


    Goods shall mean the
product(s) identified in the SOW to be delivered or erected by
Contractor.

    


    Hazardous Chemicals shall have
the meaning set forth in the Occupational Safety and Health Act Hazard
Communication Standard (29 CFR 1910-1200).

    


    Hazardous Materials shall have
the meaning set forth in Section 9.1.3.

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    Incident Report Form shall be
the form on which Contractor shall provide written notice to PHI of any and all
complaints and claims of property damage or personal injury arising out of
Contractor’s Work.

    


    Industry Standards means
those
standards of care and diligence normally practiced by nationally recognized
engineering and construction firms in performing services of a similar nature
for similar projects in the United States and in accordance with good
engineering design practices, applicable laws, applicable permits, and other
standards established for such work.

    


    Material shall mean any
apparatus, products, supplies, documentation drawings and designs to be provided
by Contractor and incorporated by Contractor into the Goods, or to be used to
install the goods and delivered by Contractor to PHI under the
Contract.

    


    Negotiation Period shall have
the meaning set forth for such term in Section 19.3.

    


    No-Outage Condition shall mean
a determination by PHI that facilities scheduled to be out of service to allow
Work to proceed on the day in question, cannot be placed out of
service.

    


    OSHA shall have the meaning
set forth for such term in Section 8.1.1.

    


    Parties mean PHI and
Contractor when referred to together.  When referred to individually,
each is sometimes referred to as a Party.

    


    PHI shall mean PHI Service
Company on behalf of itself and/or its affiliate(s) named on the face of the
purchase order.

    


    PHI’s Executive shall have the
meaning set forth for such term in Section 19.3.

    


    PHI’s Project Manager shall
mean the individual designated by PHI who is authorized to coordinate all of the
Work and Contract administration.

    


    Purchase Order or PO shall mean the document
authorizing payment for Goods and/or Services which incorporates by reference
the Contract Documents.

     

    Scope of Work shall mean a
description of the Goods to be delivered and the Services to be performed by
Contractor under the Contract.

    


    Services shall mean any and
all obligations, duties, and responsibilities necessary to the successful
completion of the Work under the Contract Documents.  Services, as
used herein, shall not be deemed to include the Goods actually delivered by the
Contractor in compliance with the Contract.

     

    Shop Drawings shall mean all
drawings, illustrations, brochures, schedules, and any other data which are
prepared by the Contractor, a Subcontractor, manufacturer, a supplier, or a
distributor, and which illustrate the Equipment, Material and Goods or some
portion of the Services.

    


    Subcontractor shall mean an
individual, firm, or corporation having a direct contract with the Contractor,
or with any other Subcontractor of any tier, for the performance of a part of
the Work, or any part thereof, including, without limitation, the supply of
principal items of Services, Goods, Material and/or Equipment to be used in or
in connection with the Work.

    


    Taxes shall be interpreted to
include all taxes, duties, tariffs, and similar levies, charges, fees or costs,
other than those related to income, regardless of nomenclature and method of
determination, applied by any and all authorities and jurisdictions to any and
all Goods and/or Services furnished in accordance with this
Contract.

     

    Terms and Conditions shall
mean these terms and conditions.

    


    Titleholder shall have the
meaning set forth in Section 10.1.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Warranty Period shall have the
meaning set forth for such term in Article XVII.

    


    Work shall mean all of the
Goods and Services provided by Contractor under the Contract.  The
term “Work” shall include the furnishing of all labor, Material, Equipment, and
other incidentals.  Without limiting the generality of the foregoing,
the term "Work" also includes, and the Contractor shall furnish, unless the
context clearly indicates otherwise, all or any part of such labor (including
the services of all trades), supervision, methods, materials, Equipment, and
transportation, or other facilities as may be necessary to complete the
Contract, whether or not fully detailed on the Drawings or listed in detail in
the Scope of Work.

    


    Work Site shall mean the
PHI-owned site, location, or area where all or part of the Work is to be
performed.

    


    Article
II                      Preliminary
Matters

    
      	
              2.1

            	
              Contract.  The
      Contract shall consist of the Purchase Order, including any documents
      attached to or identified on the PO, any Contract amendments or
      modifications, and any PHI-approved Contract Change
      Authorizations.  The above documents shall be referred to
      collectively as the “Contract
      Documents”.  In the event of a conflict among terms
      contained in the Contract Documents, such conflict shall be resolved in
      the following descending order of
precedence:

            


    

    
      	
              (i)

            	
              PHI-approved
      Contract Change Authorizations

            


    

    
      	
              (ii)

              (iii)

            	
              Contract
      amendments and modifications

              The Purchase Order

            


    

       

    In the
event of a conflict among terms contained in documents attached to, or
identified in, the PO, such conflict shall be resolved in the following
descending order of precedence:

       

      
        	 (i)   	 These Terms
      and Conditions
	 (ii)	  The Statement
      of Work


      

       

    

    
      	
              2.2

            	
              Contractor Knowledge
      of Contract, Work Site, Etc.  Contractor represents that
      it is familiar with the nature and extent of the Contract Documents and
      that it has conducted all investigations that it deemed necessary for the
      performance of the Work in accordance with the requirements of the
      Contract Documents.  Any failure by the Contractor to acquaint
      itself with the available information will not relieve it from
      responsibility for properly estimating the difficulty or cost of
      successfully performing the Work.  PHI assumes no responsibility
      for any assumptions, clarifications, or exceptions stated or implied in
      Contractor’s Proposal except for those specifically acknowledged and
      accepted by PHI in the SOW.

            


    

    


    
      	
              2.3

            	
              Fitting
      Verification.  To the extent that fitting of Goods for
      interconnection with existing facilities and the work of others are
      required hereunder, Contractor shall be responsible for verifying existing
      conditions that may affect the Work, such as dimensions and other matters
      relating to interconnection of the Goods with the work of others and the
      accuracy of all dimensions given on any drawings provided by PHI, it being
      understood that PHI does not guarantee the exactness of such
      dimensions.

            


    

     
 

    
      	
              Article
      III

            	
              Drawings

            


    

    
      	
              3.1

            	
              Drawings and Other
      Information Provided by PHI.  PHI shall use its best
      reasonable efforts to provide Contractor with all available information
      for the completion of the Work. All Drawings, specifications and other
      design related documents (“Design
      Documents”) are provided by PHI to Contractor solely for the
      purpose of describing the Work that is to be provided by Contractor under
      this Contract.  At Contract termination, all sets of the Design
      Documents shall be returned to PHI.  Neither Contractor nor any
      Subcontractor may own or claim a copyright in any of said Design
      Documents.  Unless PHI provides written permission to the
      Contractor, neither Contractor nor any Subcontractor shall be permitted to
      use the Design Documents for any purpose other than completion of the
      Work. PHI shall not be liable for the completeness or accuracy of the
      information provided to Contractor.

            


    

     
 

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    Article
IV                      Management
and Personnel

    


    4.1           Key
Personnel.

    
      	
               
      

            	
              4.1.1

            	
              Contractor’s
      personnel, as identified in the SOW, are hereby specified as
      key      personnel and are deemed necessary
      for the successful performance of this Agreement.  Contractor
      agrees that except for promotions (but not to other projects), sickness,
      death, leaving its employ, or at the specific request or approval of PHI,
      that such key personnel will remain on the project team responsible for
      performing the Services.

            


    

    
      	
               

            	
               

            	
               

            	
               

            	
               

            


    

    


     

    
      	 4.1.2	 PHI shall be
      afforded the opportunity to meet with and review qualifications of key
      personnel replacements, each replacement to be as equally well qualified
      as the individual leavingthe project.  All personnel assigned by
      Contractor to the project are subject to removal at the request of
      PHI.  Whenever possible, replacements should be brought to the
      project team early, prior to the departure of the individual being
      replaced.  PHI shall not be responsible for paying any fees for any
      such replacements person's time spent acquiring knowledge of the
      Services.


    

     

    
      	
              4.2

            	
              Contractor’s
      Methods.  Contractor shall supervise and direct the Work
      efficiently, and with its best skill and attention.  Contractor
      shall perform the Work only within the area of operation at the Work Site
      designated by PHI.  Contractor shall be solely responsible for
      the means, methods, techniques, and procedures of performing the
      Work.  Contractor shall be responsible for seeing that the
      finished Goods meet the requirements of the Contract
      Documents.  Contractor shall employ persons to work on the Work
      who will, at all times, work in harmony with PHI's workers and
      mechanics.  In the event that Contractor does not have the
      proper workers and/or mechanics to perform the Work in such harmony, then
      PHI shall provide notice to contractor and a reasonable opportunity to
      cure. In the event contractor fails to do so, PHI has the right, at its
      reasonable discretion, to employ such workers or mechanics to complete the
      Work as will work in harmony with PHI's workers and mechanics and the
      Contractor shall reimburse PHI for the reasonable additional cost of
      replacing said workers.

            


    

     

    4.3           Contractor’s
Employees

     

     

    
      	
               
      

            	
              4.3.1

            	
              Contractor
      and Subcontractors of all tiers shall employ only persons who conduct
      themselves in a responsible, professional manner so as to not harm PHI’s
      relationship with its customers, its other contractors and/or the
      public.  PHI reserves the right, in its sole discretion, to
      determine who may perform work for PHI.  Upon written notice
      from PHI, any person(s) who PHI determines in its sole, reasonable,
      discretion, is not satisfactory shall be immediately replaced by
      Contractor with satisfactory
person(s).

            


    

     

     

    
      	
               
      

            	
              4.3.2.

            	
              Contractor
      shall have a background investigation conducted on all of its employees
      who will be assigned to perform work at PHI work sites including customer
      homes, and shall require any of its Subcontractors performing work for PHI
      to similarly conduct a background investigation on all Subcontractor
      employees who will be assigned to perform work for PHI.  Such
      background investigation shall, at a minimum, include a complete criminal
      history records check, which shall report all felony convictions within
      the previous seven years.  Such background investigation shall
      be conducted by a competent professional organization and shall be in
      compliance with the Fair Credit Reporting Act and applicable state
      laws.  Contractor agrees to provide PHI with a complete copy of
      the result of such investigation for any employee who has been convicted
      of a felony as described above.  PHI will not permit any
      individual with a felony conviction to perform work for
      PHI.  Contractor shall advise PHI within three days of learning
      that an active employee has been convicted of a
  felony.

            


    

     

     

    
      	
               
      

            	
              4.3.3.

            	
              PHI
      requires that all Contractor and Subcontractor employees who work at PHI
      work sites be free of drugs and the influence of alcohol.  All
      such employees, when reporting for duty and while on duty, must be “fit
      for duty”, defined as the appropriate mental and physical condition
      necessary to perform work in a safe, competent manner, free of the
      influence of drugs and alcohol.  Possession of drugs, drug
      paraphernalia, and alcohol is prohibited on PHI’s
  worksites

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              4.4

            	
              No Unlawful
      Discrimination Permitted.  PHI is an equal opportunity
      employer, does not discriminate against employees or applicants for
      employment by reason of race, color, religion, sex, national origin, age,
      veterans status, or other conditions protected by
      law.  Contractor shall comply with all applicable federal, state
      and local anti-discrimination laws, ordinances, rules, regulations, and
      orders.

            


    

    


    
      	
              4.5

            	
              Labor
      Relations.  Contractor shall perform the Work in a manner
      that does not interfere with, or cause PHI to breach, any of its
      agreements with any collective bargaining
  organization.

            


    

    


    4.6           Night, Weekend, Holiday and
Premium Time Services.  Unless specifically authorized in
the

    Contract
or by PHI, Contractor shall not perform Services at the Work Site at night, on
weekends or PHI-observed holidays and there shall be no payment(s) to the
Contractor for work on these observed holidays when Services are not
performed.

    


    4.7           Down
Time.

    


    
      	
               
      

            	
              4.7.1.

            	
              Unless
      otherwise directed by PHI, Contractor’s construction supervisor, shall
      determine when Contractor employees shall work or not work due to
      inclement weather.  PHI shall not be liable for weather-related
      downtime costs or delays.

            


    

    


    
      	
               
      

            	
              4.7.2

            	
              It
      is within *** *** ***to determine whether a *** Condition exists.
      Contractor employees who report for work at their designated work location
      and who have not been notified that they cannot work due to a No-Outage
      Condition shall be paid for reporting time at straight time rates for a
      specifically designated period of time as determined by the Contractor’s
      labor agreement, provided that such Contractor employees are prevented
      from doing productive work as a direct result of the failure of PHI to
      provide reasonable notice of the No-Outage Condition.  In the
      event Contractor mobilizes Equipment but cannot utilize such Equipment in
      any capacity due solely to the occurrence of a No-Outage Condition of
      which PHI has failed to give Contractor reasonable notice or due to some
      other delay caused ***, ***shall make a *** *** *** as to whether some
      reasonable *** is due ***.

            


    

    


    4.8           Coordination with
Others.  Contractor acknowledges and agrees that PHI and/or
other contractors

    retained
by PHI may be performing work at the Work Site at the same time as
Contractor.  In addition, PHI may be operating its facilities at the
Work Site in the normal course of its business.  All work performed by
Contractor at the Work Site shall be subject to coordination by PHI and such
coordination shall not relieve Contractor from its responsibilities specified
hereunder.

    


    Article
V                      Schedule

     

    
      	
              5.1

            	
              Compliance with
      Schedule Requirements of SOW.    Time of
      performance is of the essence of this Contract.  Thus, the Work
      shall be started promptly by Contractor upon notice to proceed from PHI
      and Contractor shall prosecute such Work, with all speed consistent with
      first class workmanship, so as to complete the several parts and the whole
      of the Work in accordance with the Schedule Requirements of the
      SOW.

            


    

    


    
      	
              5.2

            	
              Failure to Comply with
      Schedule Requirements of the SOW.  If it appears to PHI
      that Contractor will fail to comply with the Schedule Requirements of the
      SOW, PHI may notify Contractor of the appearance of such
      failure.  Contractor and PHI shall then agree in writing to the
      steps that Contractor shall take to bring itself into
      compliance.  If Contractor fails to promptly perform the agreed
      upon corrective steps, then PHI may, in addition to any other remedies PHI
      may have under this Contract, do one or more of the
    following:

            


    

    
      	
               
      

            	
              (i)

            	
              Delay
      payment to Contractor by an amount that PHI, in its sole discretion, deems
      is appropriate to defray the costs of items (ii)-(iii)
    below;

            


    

    
      	
               
      

            	
              (ii)

            	
              Take
      the corrective steps at Contractor's expense;
  and/or

            


    

    
      	
               
      

            	
              (iii)

            	
              Take
      such other action as PHI reasonably deems appropriate based on the
      circumstances presented by the Contractor's delay, including, but not
      limited to, terminating the Contract for cause and in accordance with
      Section 20.5.

            


    

    
      	
               
      

            	
              (iv)

            	
              Execute
      Performance Guarantees as outlined in Section 9.0 of the
    SOW

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Article
VI                      Utility
Services

     

    
      	
              6.1

            	
              Arranging for
      Services.  If required
      for the performance of the Work, and to the extent not provided or
      designated by PHI, Contractor shall make necessary arrangements to obtain
      utility services, including telephone and electric
  service.

            


    

    
      	
               
      

            	 


    

    
      	
              6.2

            	
              Service
      Interruption.  If, during the performance of the
      Contract, it should become necessary for the Contractor to interrupt any
      service to PHI or PHI customer facilities (including, but not limited
      to:  water, gas, communications, electric light, electric power,
      and drainage system), such interruption shall not be made without approval
      of PHI, which shall require a minimum of 24 hours advance
      notice.

            


    

    


    
      	
              Article
      VII

            	
              Completion
      of the Work

            


    

    


    
      	
              7.1

            	
              Completion.  Contractor
      shall provide written notice to PHI when it believes that it has completed
      all of the Work required under the SOW (“Completion”).  When
      ***, based on its inspection of the ***, that *** has been completed in
      accordance with the requirements of the Contract, Completion shall be
      deemed to have been achieved.  To the extent that *** *** ***
      that ****** of the *** is *** or ***, in addition to any other rights and
      remedies that it may have under this Contract, including, but not limited
      to*** ***and *** ***, PHI may, in its *** ***, adopt one or more of the
      following remedies:

            


    

    


    
      	
               
      

            	
              (i)

            	
              ***

            


    

    
      	
               
      

            	
              (ii)

            	
              ***

            


    

    (iii)           Such
other remedy as Contractor and PHI may agree upon.

    It is
expressly understood and agreed that achievement of Completion, shall not
relieve Contractor from liability for consequences of a patent or latent defect
and shall not relieve Contractor of its guarantee and warranty obligations, and
shall in no event be deemed a waiver by PHI in any respect or degree whatsoever
of any of the terms and conditions of this Contract or any rights of PHI should
Contractor fail to comply strictly with the terms and conditions of this
Contract.

    


    
      	
              7.2

            	
              Legal
      Requirements.  Without limiting the generality of the
      foregoing, if the Contract Documents or any laws, ordinances, rules,
      regulations, or order of any public authority having jurisdiction require
      specifically that any Goods be inspected, tested, or approved by some
      public body, the Contractor shall, as part of the requirements for
      Completion, assume full responsibility therefore, pay all costs in
      connection therewith, and furnish to PHI the required certificates of
      inspection, testing, or approval. The parties agree that if *** is
      required for any of the Work, such *** of ***shall be passed directly to
      **.

            


    

    


    
      	
              7.3

            	
              Failure to
      Reject.  No failure of PHI or any of its representatives
      to reject all or portions of the Work prior to final completion shall be
      deemed to be an acceptance thereof or a waiver of defects
      therein.  The presence or absence of any representative of PHI
      will not relieve Contractor from its responsibility to perform all Work in
      strict accordance with the terms and conditions of this
      Contract.

            


    

    


     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Article
VIII                      Safety
and Protection

     

    8.1           Contractor's Safety
Responsibilities

    
      	
               
      

            	
              8.1.1

            	
              PHI
      is committed to a safe workplace.  Contractor shall comply with
      the requirements of PHI’s Cardinal Safety Rule Policy and such Policy
      shall be incorporated herein and made a part of this
      Agreement.  Contractor shall comply with the Federal
      Occupational Safety and Health Act (“OSHA”) and with
      all other applicable laws, ordinances, rules, regulations and orders of
      Federal, state and local regulatory bodies who may have jurisdiction over
      the Services.  Contractor is solely responsible for protecting
      the health and safety of its employees, agents and contractors while on
      PHI’s worksites or performing work under this
      Contract.  Contractor (and all persons working at the direction
      of Contractor) shall at all times conduct all Services in a manner to
      avoid the risk of bodily harm to persons or risk of damage to any
      property.

            


    

    


    
      	
               
      

            	
              8.1.2

            	
              Unless
      specifically waived by PHI in the SOW, Contractor shall be required to
      comply with the PHI Contract Safety Requirements set forth on Attachment
      A.

            


    

    


    
      	
               
      

            	
              8.1.3

            	
              Contractor
      shall conduct the necessary safety meetings and supply all necessary
      safety equipment, including personal protective equipment, to its
      employees as is necessary to meet the requirements of applicable laws and
      regulations.

            


    

    


    
      	
               
      

            	
              8.1.4

            	
              Contractor
      shall erect and maintain, as required by the conditions and progress of
      the Work, all necessary safeguards for the safety and protection of the
      Work and of persons and property.  Contractor shall prompt PHI
      to notify owners of adjacent facilities when prosecution of the Work may
      affect them.  Contractor shall keep all its tools, Equipment,
      materials, etc., in such condition that the Work does not threaten the
      safety of employees of PHI, Contractor, other Contractors, and other
      persons and property on or near the Work Site or PHI
    premises.

            


    

    


    
      	
               
      

            	
              8.1.5

            	
              Contractor
      shall comply and cooperate with periodic safety or environmental reviews
      or audits by PHI or PHI designated contractors during the Contract
      Term.

            


    

    
      	
               
      

            	 


    

    8.1.6           Contractor
shall familiarize its employees, agents, Subcontractors and
representatives

    with
PHI’s safety programs through an orientation provided by PHI.  Prior
to starting the Work, Contractor shall, if required by PHI, provide PHI with
certification that all of Contractor’s employees, agents, Subcontractors and
representatives assigned to the Work have been trained on PHI’s safety
rules.  It is Contractor’s responsibility (not PHI’s) to administer
the safety rules over Contractor’s employees, agents, Subcontractors and
representatives.  Compliance with PHI safety rules shall not relieve
the Contractor or any Subcontractor or supplier of obligations under OSHA and
other applicable laws, ordinances, rules, regulations, and/or
orders.

    


    8.2           Interfering with Utility and
Other Facilities.

    


    
      	
               
      

            	
              8.2.1

            	
              Contractor
      shall perform its Services at the Work Site so as not to foul, break,
      contact, or otherwise interfere with power, signal, and communications
      lines, pavements, roads, buried cables, pipelines (including ignition of
      gas), or other facilities on or near the Work Site.  Contractor
      shall comply with all Federal, state and local laws, ordinances, rules,
      regulations and orders governing the conduct of Services in proximity to
      such facilities.

            


    

    
      	
               
      

            	
              8.2.2

            	
              Contractor
      shall protect the personal and real property of PHI, its customers, and
      third parties, from damage, interference, and undue wear caused by the
      Services performed by Contractor.  Contractor shall be
      responsible for the repair and/or replacement of damaged property, at its
      *** *** and to the *** of the *** ****
thereof.

            


    

    


    
      	
              8.3

            	
              Emergencies. In
      the event of an emergency affecting the safety of persons or the Goods or
      other property at the Work Site or adjacent thereto, Contractor, without
      special instruction or authorization from PHI, shall act, at its
      discretion, to prevent threatened damage, injury, or
      loss.  Contractor shall give PHI immediate verbal notice of any
      actions taken in response to such an emergency and shall follow such
      verbal notice with a written description of changes in the Work or
      deviations from the Contract Documents caused thereby.
  .

            


    

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Article
IX                      Site
Clean Up and Restoration

    


    9.1           Cleanliness of the Work
Site.

    
      	
               
      

            	
              9.1.1

            	
              Contractor
      shall at all times prevent the accumulation of debris at the Work Site and
      in all buildings and premises of PHI.  Contractor shall, by the
      end of each working day, clean the Work Site, including, as applicable,
      buildings, Equipment, storage yards, rights-of-way, and adjacent
      properties, of accumulations of Materials, waste, rubbish, and other
      debris resulting from its Work.

            


    

    


    
      	
               
      

            	
              9.1.2

            	
              Unless
      otherwise mutually agreed upon, all of Contractor’s structures, offices,
      racks, surplus materials, scaffolding, erection and construction
      Equipment, tools, and supplies shall be removed from the Work Site
      immediately upon the end of their usefulness to the
  Work.

            


    

    


    
      	
               
      

            	
              9.1.3

            	
              In
      addition to its obligation to dispose of Hazardous Materials, Contractor
      shall dispose of all waste, rubbish and other debris in accordance with
      all applicable Federal, state and local laws, ordinances, rules,
      regulations and orders, as well as in accordance with any policies and
      procedures of PHI.

            


    

    
      	
               
      

            	 


    

    
      	
              9.2

            	
              Restoration of the
      Work Site.  At the completion of the Work, Contractor
      shall remove all waste materials, rubbish, debris, tools, construction
      Equipment, machinery, and surplus materials, from and about the Work Site
      and shall restore, to a condition acceptable to PHI, those portions of the
      Work Site not designated for alterations or intended to be altered by the
      Contract Documents.

            


    

    


    
      	
              9.3

            	
              Fire
      Hazards.  To eliminate fire hazards, Contractor shall
      store all combustible and explosive materials in a manner that complies
      with all Federal, state and local laws rules and regulations In addition,
      Contractor shall remove all combustible or explosive materials from the
      buildings, enclosures, construction areas, etc., in and around the Work
      Site immediately upon the earlier of (i) such materials becoming scrap or
      otherwise unusable; (ii) the end of their usefulness to the Work; and
      (iii) when directed by PHI.

            


    

    


     

    
      	
              Article
      X

            	
              Titleholder
      and Risk of Loss

            


    

     

    
      	
              10.1

            	
              PHI to Designate
      Titleholder.  PHI shall be permitted, at its sole
      discretion, to designate its Affiliate that takes possession of the Goods
      provided under this Contract as the titleholder of such Goods (referred to
      herein as the “Titleholder”).  Title,
      which shall be free and clear of all liens, claims, changes, security
      interests and encumbrances whatsoever, shall, unless otherwise directed by
      PHI, pass to Titleholder, upon identification of Titleholder, of such
      Goods by Contractor. Titleholder shall have the right to enforce, in its
      own name, the warranty terms of the Contract with respect to such
      Goods.  At PHI’s request, Contractor will fix appropriate
      notices or labels on the Goods to indicate ownership by
      Titleholder.  To the extent required by PHI, Contractor shall
      execute all such documentation or agreements deemed necessary to PHI to
      evidence Titleholder’s interest in or title to the
  Goods.

            


    

    


    
      	
              10.2

            	
              Risk of Loss and
      Title.  Risk of loss or damage and Title to Goods,
      Materials and Equipment provided, or to be provided in accordance with
      this Contract, shall not pass to Titleholder until *** *** *** *** *** ***
      *** For the purpose of this document, *** *** of *** will occur *** *** of
      the *** at the *** *** is *** as outlined in the
      SOW.   Contractor assumes responsibility for damage to
      Goods, Material, Equipment and personnel, caused by the negligent or
      tortious acts or omissions of its personnel, and the personnel of its
      Subcontractors of all tiers, in the performance of the
    Work.

            


    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    Article
XI                      Materials

     

    11.1           PHI Supplied
Materials.  To the extent provided for in the Contract, PHI
shall furnish the Material

    required
for the performance of the Work.  If, and as required by PHI,
Contractor shall provide advance notice before attempting to pick up any such
PHI supplied Material from the source designated by PHI.  Upon
obtaining such PHI provided Materials, Contractor shall be responsible for
delivering such items to the Work Site.  After Contractor has accepted
Materials furnished by PHI Contractor shall be responsible for the safety and
protection of such Material from loss or damage of any nature until the Work is
completed.  Contractor shall maintain and protect Material and
Equipment during storage and after installation in accordance with the
manufacturer's warranty requirements and special storage instructions, and as
directed by PHI, until Completion.

     

    11.2   Contractor-provide
Materials.  Materials
not being supplied by PHI shall be furnished by Contractor.  Unless
otherwise expressly set forth in the Contract, all Contractor supplied Goods,
Materials and Equipment shall 

       be delivered, at
Contractor's *** ***, “***”  Contractor shall use the type, quality
and quantity of Materials specified in the SOW.  In the event the SOW
does not so specify the type, quality and/or quantity of 

        Materials  required, Contractor shall, if required
by PHI, submit for review and approval by PHI, specification sheets or product
sheets describing the Materials that it proposes to
procure.  Contractor shall, after approval by 

        PHI, if
required, or on its own, if prior approval is not required, procure Materials in
the quantity and of the type which are fit for the particular purposes intended
by the Contract.  PHI shall not be responsible for the loss
or

         theft
of Contractor-supplied Materials, tools or Equipment, or for personal belongings
of Contractor’s employees while on the Work Site or otherwise on PHI’s
property.


     

    Article
XII                      Equipment

     

    
      	
              12.1

            	
              Contractor To Provide
      Equipment.  Subject to PHI’s right to reject or require
      Contractor to repair or replace Equipment that PHI considers, in its
      reasonable discretion, inadequate, unsafe, or otherwise inappropriate for
      use on the Work, the Contractor shall provide all of the equipment
      necessary to complete its Work (“Equipment”).  Nothing
      herein requires PHI to inspect Equipment used or to be used by
      Contractor.  Additionally, the cost for Contractor’s use of
      items such as cellular telephones, hand held tools, communication radios
      and other items ancillary to the provision of the Work shall not be
      charged to PHI.

            


    

    


     

    
      	
              Article
      XIII

            	
              Changes
      to the Scope of Work

            


    

     

    
      	
              13.1

            	
              Contract
      Changes.  Either party may, at any time during the term
      of this Contract, request the performance of Extra Work by initiating a
      contract change. Once agreed, PHI shall issue a Contract Change
      Authorization Form (a form of which is attached hereto as Attachment B) to
      Contractor.  The Contract Change Authorization Form shall set
      forth the agreed upon pricing for the Extra Work. And shall constitute an
      authorization to proceed with the Extra Work described
    therein

            


    

    


    
      	
              13.2

            	
              Reduction in Scope of
      Work.  Contractor shall delete any portion of the Work
      from the Scope of Work upon receipt from PHI of a Contract Change
      Authorization directing such deletion and PHI will deduct, from any monies
      due the Contractor, the actual amount agreed upon for said deleted Work.
      Where a reduction in the scope of work could affect contractor’s ability
      to perform remaining deliverables or increase contractor’s cost to perform
      the remaining scope of work, the parties shall mutually agree upon
      appropriate adjustments to costs, schedule, or
    deliverables.

            


    

    


    
      	
              Article
      XIV

            	
              Installation
      Instructions

               

            


    

    
      	
              14.1

            	
              Installation
      Instructions.  Where assembly, alignment, and erection of
      Contractor or Subcontractor supplied Goods is required in the field,
      Contractor shall furnish procedures and instructions for this work,
      outlining all field operations necessary to install and place Goods into
      satisfactory operation and, where applicable, shall provide descriptions
      of the field installation operation.   Contractor shall
      furnish PHI with all information required to incorporate the Goods into
      its facilities and operations.

            


    

    


    
      	
              14.2

            	
              PHI
      Rights.  PHI shall be granted and shall retain *** ***
      the *** right to *** and *** any and all documentation required by this
      Article to be furnished by Contractor to
PHI.

            


    

    


    
      	
              Article
      XV

            	
              Deliverables/
      Right to Use

               

            


    

    
      	
              15.1

            	
              Contractor to Provide
      Deliverables.  Contractor shall provide to PHI, prior to
      completion of the Work, or at such other time as may be directed by PHI,
      all Drawings, installation and operation manuals, copies of manufacture’s
      warranties and all other Deliverables described in the Contract in the
      form, quantity and quality as described in the
  SOW.

            


    

    


    
      	
              15.2

            	
              All
      work done pursuant to this Contract is
***

            


    

    


    
      	
              15.3

            	
              PHI
      shall have complete and unrestricted right to use all plans,
      specifications, drawings, reports, manuals and documents prepared or
      generated by Contractor in connection with its performance of the Work
      described or referred to herein.  If, for any reason, PHI is
      found not to own such copyright, an assignment thereof shall be made by
      Contractor.  Any re-use of work by PHI, or its contractors,
      agents, assigns, and successors, shall be at PHI’s sole risk, and PHI
      shall indemnify and hold Contractor harmless from such re-use of work for
      purposes other than intended under this
  Agreement.

            


    

    


    15.4           The
Contractor affirms that, by entering into this contract, it will not be
providing 50% or more ofits total
output to PHI.

    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Article
XVI                      Testing
and Inspection

    


    16.1           PHI Right to
Inspect.  PHI shall have the right, at all reasonable times, at
the shop and at the

    Work
Site, to inspect the Goods to determine whether they meet the requirements of
the Contract.  PHI may ***and *** *** or r*** of any Goods found, upon
inspection, to be defective or not in accordance with the Contract, *** of the
*** of their c*** or the *** or ***of discovery of such ***or ***

    


    Article
XVII                      Warranties

    


    
      	
              17.1

            	
              Unless
      otherwise provided in the text of the  SOW, Contractor warrants
      that all materials supplied under this Contract are of merchantable
      quality and are free from defects in design, materials, workmanship, and
      title, are fit for purposes of which goods of that type are ordinarily
      used as well as for any purposes Contractor has specified or advertised,
      and that the materials conform in every respect to the specifications of
      the  SOW and any applicable sample or description given to
      PHI.  Contractor further warrants that all workmanship and the
      materials purchased will be (a) supplied in strict accordance with
      incorporated specifications and drawings; (b) new and of the most suitable
      grade of their respective kinds for the purpose, (c) installed to the
      satisfaction and with the approval of PHI; (d) shall be free of any claim
      of any third party; and (e) shall conform to all laws and regulations
      relating to their manufacture and use.  In addition, Contractor
      incorporates by reference and passes on to PHI the benefits of all
      warranties given to Contractor by persons from whom Contractor purchased
      any of the materials.  Contractor shall, within a reasonable
      time after receipt of written notice thereof, make good at its own expense
      and without cost to PHI, any defects in materials or workmanship which may
      appear within *** after the date on which it was *** Provided, however,
      that where ***

            


    

    


    
      	
              17.2

            	
              Contractor
      warrants and represents that all Services are complete and accurate, are
      performed in a workmanlike, professional and efficient manner by qualified
      personnel, and conform to all requirements of this Contract.  If
      Contractor is required to provide equipment as part of the Services,
      Contractor warrants that all such equipment (i) shall be of good
      quality and workmanship and free from defects, latent or patent,
      (ii) shall conform to all specifications, drawings, and descriptions
      furnished by or to PHI (iii) shall be merchantable and suitable for
      their intended purpose, (iv) shall be free of any claim of any third
      party, and (v) shall conform to all laws and regulations relating to
      their manufacture and use.  If Contractor is required to provide
      software as part of the Services, Contractor warrants that all such
      software developed or prepared for PHI shall contain no “computer viruses”
      or other “contaminants,” including any codes or instructions that may be
      used to access, modify, delete, damage or disable PHI’s computer
      system.  Contractor expressly waives and disclaims any right or
      remedy it may have at law or in equity to de-install, disable or repossess
      any deliverables under this Contract by means of any so-called “disabling
      devices” should PHI fail to perform any of its obligations under this
      Contract.  The duration of the warranties in this Article shall
      be ***

            


    

    


    
      	
              17.3

            	
              Contractor
      warrants that Contractor is sufficiently staffed and equipped to fulfill
      its obligations under this Contract, that any employee providing Services
      to PHI shall possess the qualifications represented by the employee’s
      resume and that the employee will be qualified by education and experience
      and competent to provide the Services to be performed by such
      employee.  PHI shall have the right to require the immediate
      removal from the work of any employee of the Contractor not so
      qualified.  Contractor shall, at its own expenses, furnish a
      replacement employee possessing the required qualifications, if
      available.  Such replacement shall be the sole and exclusive
      responsibility of the Contractor for breach of the above
      warranty.

            


    

    


    
      	
              17.4

            	
              Contractor makes no other
      warranties, express, implied or statutory, including but not limited to
      the implied warranties of merchantability and fitness for a particular
      purpose.***

            


    

    


    
      	
              17.5

            	
              Contractor
      represents and warrants that it has not and it shall not assign, agree,
      nor otherwise transfer or encumber any right, title or interest to any
      technology or intellectual property that would conflict with its
      obligations under this Contract.  Contractor further represents
      and warrants that the performance of Services and the delivery of Work
      Product hereunder shall not violate (i) any applicable law, rule or
      regulation; (ii) any contractual, fiduciary or other duties to third
      parties; and (iii) any patent, trademark, copyright, trade secret or
      other similar right.  Contractor warrants that there is no
      actual or threatened suit by any third party that could cause Contractor
      to violate its obligations
hereunder.

            


    

    


    
      	
              17.6

            	
              Contractor
      warrants that if any of the Services fail to conform to the requirements
      defined in the SOW or are not in accordance with sound and generally
      accepted industry standards, Contractor will perform such necessary
      corrective Services of the type originally performed as may be necessary
      to correct any such defects brought to Contractor’s attention in writing
      by PHI within ***. If PHI determines that such reperformance is
      impractical or undesirable, ***the parties shall determine
      ***.  Goods that are repaired, adjusted, modified, or replaced
      by Contractor pursuant to its obligations hereunder shall be warranted as
      set forth herein, except that the warranty period shall extend to the
      latter of:  (i) the expiration of the original warranty period;
      or (ii) *** from the date of such repair, adjustment, modification, or
      replacement.

            


    

    


    
      	
              17.7

            	
              None
      of the remedies available to PHI hereunder or at law or equity for breach
      of any of the foregoing warranties may be limited except as specifically
      agreed upon by PHI in a separate written Contract signed by its authorized
      representative.

            


    

    


    
      	
              17.8

            	
              Remedy for Breach of
      Warranty.  If, during the warranty period, PHI determines
      that any portion of the Work fails to conform to the warranty, in addition
      to any other rights and remedies that PHI may have, including, but not
      limited to, execution of Performance Guarantees as provided for in the
      SOW, PHI may, in its reasonable discretion, adopt one or more of the
      following remedies:

            


    

    
      	
               
      

            	
              (i)

            	
              Direct
      Contractor at its own expense, to correct such nonconformity or
      nonperformance by repair, adjustment, modification, or
      replacement;

            


    

    


    (ii)           Such
other arrangements as Contractor and PHI may agree.

    


    
      	
               
      

            	
              Contractor’s
      liability under a warranty claim shall include all costs associated with
      repair or replacement of the non-conforming Work, including, but not
      limited to, the costs of equipment and field labor necessary to gain
      access to the Work; for disassembly, inspection, removal, replacement,
      and/or re-assembly of such Work; and for transportation and shipping of
      such Work for the purpose of obtaining the required
    repairs.

            


    

    


    
      	
              17.9

            	
              Pass-Through
      Warranties.  In the event that Contractor purchases Goods
      or Materials in its own name for incorporation in the Work delivered to
      PHI, and Contractor receives a warranty from the vendor of such Goods or
      Materials, Contractor shall ensure that such warranty is passed through
      to, and is enforceable by, PHI and
Titleholder.

            


    

    


    
      	
              17.10

            	
              Non-Waiver.  All
      representations and warranties of Contractor shall survive the
      Contract.  The Contractor is not relieved of its obligations
      under the warranties provided hereunder regardless of whether (i) PHI
      approves the Materials to be used, (ii) PHI approves the manner of
      performing the Work, (iii) PHI accepts the Work or any part thereof, or
      (iv) PHI does or does not repair or replace any part of the Goods not in
      compliance with the Contract.

            


    

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	
              Article
      XVIII

            	
              Claims

            


    

    


    18.1           Third-Party and Customer
Claims.  In accordance with the below indemnity provision,
Contractor is liable for any and all
injury, loss, or damage arising out of this contract, including liability
for injury,
loss or damage to third-party and customer claims (referred to as a
“Claim”).  It is
contemplated that, with the number of customer installations which will be
performed underthis Contract,
there will be a number of “nuisance claims” filed by customers, including
smallClaims alleging that the
installer damaged customers’ landscaping or home interior***

    


    Contractor
shall establish and provide to PHI for review and approval, a process for the
receipt and adjusting of such nuisance Claims.  For the purposes of
this contract, nuisance Claims shall be defined as Claims in which the
third-party or customer is alleging *** or less in damages.

    


    Where the
Contractor fails to remedy such damage in a reasonably timely and competent
manner, ***may, in *** *** ***, elect to take such action necessary as to remedy
the damages and shall *** from any ***due the ***the *** *** of doing
so.

    


    On a
quarterly basis, contractor shall provide PHI with a report of all pending
claims and Claims resolved in that quarter, providing the following: (1)
claimant; (2) date of Claim; (3) summary of Claim; (4) name of contractor
employee; (5) status or resolution.

     
 

    For Claims of greater than *** and any
lawsuits received, contractor shall advise PHI of such Claim or lawsuit within
five (5) business days’ of receipt.   PHI reserves the right to
participate in   any defense of such Claims or
lawsuits.  

    


    
      	
              18.2

            	
              Contractor
      Claims.  In the event that Contractor seeks relief
      related to a requested adjustment to Contract terms, Contract Price and/or
      Contract Milestone Schedule (referred to as a “Claim”) it must
      comply with the deadlines set forth in Subsections ___ and
      ____.  Claims not submitted in compliance with Subsections
      25.1.1 and 25.1.2 shall not be payable by PHI under this
      Contract.

            


    

    


    
      	
              18.2.1.

            	
              Contractor
      shall provide preliminary written notice to PHI of all Claims arising
      under this Contract, whether involving law, fact, or both, or Extra Work,
      as soon as possible, but in no event not later than *** working days after
      the Contractor knew or should have known of the event giving rise to the
      dispute or Claim; provided, however, that
      if the Claim is of a continuing character and notice of the Claim is not
      given as set forth above, the Claim will be considered only for a period
      commencing *** working days prior to the receipt by PHI of preliminary
      notice thereof.  Preliminary notice of a Claim need not detail
      the amount of the Claim, but shall state the facts surrounding the Claim
      in sufficient detail to identify the Claim, together with the character
      and scope thereof.

            


    

    


    
      	
              18.2.2

            	
              Detailed cost data supporting any
      payment requested from PHI must be submitted to PHI’s Project Manager
      within 60 days of preliminary notice of the Claim.  Continuing
      cost data supporting a request for payment must be submitted within 30
      days of the date that such cost data is available to
      Contractor.  Claims will not be considered or paid for
      Contractor principal office costs, including compensation of personnel
      stationed at said principal office, loss of financing, business and
      reputation and for lost profit or consequential damages.  It is
      the Contractor's obligation to maintain records to substantiate the
      Claim.

            


    

    


    
      	
              18.3

            	
              PHI Review of
      Contractor Claim.  In conducting its review of Claims
      submitted by the Contractor, PHI may (i) request additional supporting
      data from the Contractor; and (ii) obtain data or other information from
      Contractor and Subcontractors or others who have information related to
      the events or occurrences giving rise to the Claim.  Contractor
      shall be required to cooperate in any review conducted by
      PHI.  Failure by the Contractor to so cooperate may result in
      rejection of the Claim.  PHI may either (i) reject the Claim in
      whole or in part; (ii) accept the Claim in whole or in part; or (iii)
      recommend that the Contractor seek to compromise the
      Claim.  Contractor disagreement with PHI disposition of a Claim
      may be addressed by Contractor under the Dispute Resolution Procedure set
      forth in Article XIX.

            


    

    


    
      	
               Article
    XIX

            	
              Dispute
      Resolution

            


    

    


    19.1           Dispute Resolution
Procedure.  If the Parties’ representatives are unable to
resolve disputes

    arising
under this Contract through their normal course of business (“Dispute”) they each
shall have the right to have such Dispute resolved through operation of the
procedure (“Dispute
Resolution Procedure”) provided for in this Article XIX.

    


    
      	
              19.2

            	
              Notice of
      Dispute.  Either Party asserting the existence of a
      Dispute under this Contract shall deliver a written notice (“Dispute
      Notice”) to the other Party describing the nature and substance of
      the Dispute and proposing a resolution of the
  Dispute.

            


    

    


    
      	
              19.3

            	
              Executive
      Negotiation.  During the first thirty (30) days following
      the delivery of the Dispute Notice (and during any extension agreed to by
      the Parties, the "Negotiation
      Period") an authorized executive officer of Contractor (the "Contractor's
      Executive") and an authorized executive officer of PHI (the "PHI's
      Executive") shall attempt in good faith to resolve the Dispute
      through negotiations.  If such negotiations result in an
      agreement in principle among such negotiators to settle the Dispute, they
      shall cause a written settlement agreement to be prepared, signed and
      dated (an "Executive
      Settlement"), whereupon the Dispute shall be deemed settled, and
      not subject to further dispute
resolution.

            


    

    


    
      	
              19.4

            	
              Alternative Dispute
      Resolution.  If an Executive Settlement is not achieved,
      at the conclusion of the Negotiation Period, the Dispute may, by mutual
      agreement of the Parties, be submitted for resolution in any other manner
      that they may agree to at the time such Dispute arises; provided, however, that a
      Party's agreement to any such other dispute resolution procedure with
      respect to any particular Dispute shall not act as a waiver of the right
      of any Party to have any other Dispute resolved in accordance with the
      Dispute Resolution Procedures set forth in this Article
    XIX..

            


    

    


    
      	
              19.5

            	
              Tolling of Statute of
      Limitations.  The initiation of any Dispute Resolution
      Procedure under this Article XXVI, to the extent permitted by applicable
      law, shall, upon the delivery of a Dispute Notice, suspend the running of
      the statute of limitations applicable to the Dispute described in such
      Dispute Notice until fourteen (14) calendar days after the conclusion of
      all such Dispute Resolution
Procedures.

            


    

    


    
      	
              Article
      XX

            	
              Termination

            


    

    


    20.1           Term. This Contract shall
commence upon execution and shall remain in effect until
termination;

    provided, however, that, if
there is a SOW for which the Parties have obligations that extends beyond such
termination, the terms of this Contract shall continue to apply to such SOW
until all obligations have been satisfied.

    


    
      	
              20.2

            	
              Suspension of
      Work.   PHI may, at any time during the Term, direct
      Contractor to suspend performance under any SOW.  Contractor may
      submit a Contract Change Authorization Form seeking a change in price
      and/or schedule to reflect costs incurred or unavoidable delays caused by
      such suspension of Work.

            


    

    


    
      	
              20.3

            	
              Termination for
      Convenience.  PHI may at any time terminate performance
      of the Work under this Contract in whole or in part for the convenience of
      PHI by written notice to the
Contractor.

            


    

    


    
      	
              20.4

            	
              Payment Upon
      Termination

            


    

    
      	
               
      

            	
              (i)
      Reimbursable Costs — In the event of a termination of this Contract for
      convenience, Contractor shall be entitled to recover for its services
      actual costs incurred in accordance with this Agreement through the date
      of termination including reasonable mutually agreed costs of winding down
      and costs required to buy out existing contracts entered into exclusively
      for the performance of this Agreement.  The total reimbursable
      cost shall in no event exceed the Agreement
  price.

            


    

    
      	
               
      

            	
              (ii)
      Notwithstanding anything to the contrary herein, in the case of a
      termination for cause, Contractor shall not be entitled to receive any
      portion of the monies due it, which may have been earned prior to the date
      of termination but that it has not actually received prior thereto, until
      such time as the costs incurred by PHI for which Contractor is liable as a
      result of its default are determined by PHI in accordance with Section
      20.5.2, below.  When such determination is made, Contractor
      shall receive such amount, if any, as is in excess of the costs occasioned
      by Contractor’s default.

            


    

    


    
      	
               
      

            	
              (iii)
      If performance of work under this Agreement is terminated for cause, PHI
      may complete or arrange for the completion of the Services, and Contractor
      shall be liable to PHI for increased reasonable costs incurred by PHI as a
      result of the default as determined by Contractor and
      PHI.  Contractor shall pay the difference to PHI within 30 days
      of PHI’s demand therefor.  If this Agreement is terminated
      before or during any task(s) to be performed as part of the Services,
      Contractor will refund to PHI all amounts associated with all such
      uncompleted tasks.

            


    

    


    
      	
              20.5

            	
              Termination for
      Cause.

            


    

    
      	
              20.5.1

            	
              PHI
      reserves the right, without any liability to Contractor, except to pay for
      work satisfactorily completed and accepted by PHI prior to termination, to
      terminate all or any part of this Contract upon 30 days written notice to
      Contractor, if any of the following have not been cured within the 30 day
      notice period. For events that are not capable of cure within a 30 day
      period, the parties will negotiate in good faith a mutually satisfactory
      cure period. During the life of this agreement, Contractor will only be
      entitled to two cure periods for a particular type of
    default.

            


    

    
      	
               
      

            	
               (i)

            	
              Insolvency
      of Contractor, the filing of a voluntary petition in bankruptcy by
      Contractor, the filing of a petition to have Contractor involuntarily
      declared bankrupt, the appointment of a receiver or trustee for
      Contractor, or the execution by Contractor of an assignment for the
      benefit of creditors;

            


    

    


    
      	
               
      

            	
              (ii)

            	
              A
      breach by Contractor of any of the material terms of this Contract,
      including any warranty of
Contractor;

            


    

    


    
      	
               
      

            	
              (iii)

            	
              A
      failure by Contractor to comply with or perform any of the other material
      provisions of this Contract;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              It becomes reasonably apparent,
      in PHI’s reasonable judgment, that Contractor is not going to make timely
      and/or acceptable delivery of the Goods or Services, or that Contractor
      may otherwise default in its performance under the
      Contract;

            


    

    


    
      	
               
      

            	
              (v)

            	
              A
      seizure pursuant to judicial process of any of Contractor's machinery,
      construction Equipment, tools, etc;

            


    

     

    
      	
               
      

            	
              (vi)

            	
              The
      refusal or neglect of Contractor to supply such number of properly skilled
      workers as PHI shall determine at any time to be required to complete the
      Work in accordance with the
Contract;

            


    

     

    
      	
               
      

            	
              (vii)

            	
              The
      failure or refusal of Contractor, for any reason whatsoever (regardless of
      whether such failure or refusal shall be due to its negligence or
      otherwise), to supply proper
Materials;

            


    

     

    
      	
               
      

            	
              (viii)

            	
              The
      failure of Contractor to make prompt payments to Subcontractors or for
      Materials or labor; or

            


    

     

    
      	
               
      

            	
              (ix)

            	
              Any
      disregard by Contractor of laws, ordinances, rules, regulations, or
      policies or instructions of PHI.

            


    

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              20.5.2

            	
              Contractor
      shall cease performance of the Work immediately upon receipt of notice of
      termination for cause.  For the purpose of completing the Work,
      PHI may finish the Work by whatever means PHI may deem
      expedient.  In case of any such termination for cause,
      Contractor shall not be entitled to receive any further payment until the
      Work shall be wholly finished.  At such time, if the unpaid
      balance to be paid for Work completed by Contractor under this Contract
      shall exceed the sum of all expenses incurred by PHI in finishing the Work
      plus any other expense PHI might have incurred in connection with the
      cancellation or with arranging for or effecting the completion of the
      Work. If, for any reason, termination for cause shall be found to be
      invalid or unenforceable by an appropriate legal forum, such termination
      shall be deemed to be a termination for convenience by
  PHI.

            


    

     

    
      	
              20.5.3

            	
              Comverge
      reserves the right, without any liability to PHI, to terminate all or any
      part of this Contract upon 30 days written notice to PHI, in the event PHI
      fails to pay any undisputed invoices within the 90 days of the due
      date.  In the event of the following, Comverge within 30 days
      notice can terminate for cause

            


    

    
      	
               
      

            	
               (i)

            	
              Insolvency
      of PHI, the filing of a voluntary petition in bankruptcy by PHI, the
      filing of a petition to have PHI involuntarily declared bankrupt, the
      appointment of a receiver or trustee for PHI, or the execution by PHI of
      an assignment for the benefit of
creditors;

            


    

    
      	
               
      

            	
              (ii)

            	
              A
      breach by PHI of any of the material terms of this Contract, including any
      warranty of PHI;

            

        (iii)           A
failure by PHI to comply with or perform any of the other material provisions of
this Contract;

     

    20.6                 Title to
Material.  Title to all Material and Goods for which PHI has
paid Contractor hereunder shall vest in Titleholder and such Material and Goods
may be disposed of as directed by PHI.  Any manuals, As-built
Drawings, or other pertinent documents which are in existence prior to the
effective date of termination and which would have been provided to PHI at the
end of the Work shall be furnished to PHI and will be deemed to be the
Titleholder's property.

    
 

    Article
XXI                      Prices
and Payment

    


    
      	
              21.1

            	
              Contract
      Price.  Contractor shall perform the Work for the
      Contract Price set forth in the Contract
  Documents.

            


    

    


    
      	
              21.2

            	
              Taxes.  Contractor
      shall be responsible for all Taxes and duties applicable to the
      Work.  PHI shall provide evidence, as applicable, for exemption
      from applicable state sales and use taxes.  Contractor agrees to
      assign and transfer to PHI all of its rights to sales and use tax which
      may be refunded as a result of a claim for refund for materials purchased
      in connection with this Contract.  Contractor further agrees
      that it will not file a claim for refund for any sales or use tax which is
      the subject of this assignment.  Contractor agrees to include
      this assignment of refund rights language in full in any contract with
      Subcontractors.

            


    

    


    (i)  Where the
Buyer is identified as Delmarva Power and Light Company, Maryland Sales and Use
Tax shall not be billed pursuant to Maryland Permit No. 17.  Where the
Buyer is identified as Atlantic City Electric Company, New Jersey Sales Tax
shall not be billed pursuant to Direct Payment Permit No. 210-398-280/000. Where
the Buyer is identified as Potomac Electric Power Company (Pepco), Maryland
Sales and Use Tax shall not be billed pursuant to Maryland Permit No. 47185 and
District of Columbia Sales and Use Tax shall not be billed pursuant to District
of Columbia Permit No. 4911-0002107-001.

    


    
      	
              21.3

            	
              Reimbursement,
      Compensation and Payment.   PHI shall pay to
      Contractor only the compensation described in the P.O. and/or SOW, and
      shall not be responsible for any services performed in excess of the total
      price of the P.O. unless approved in writing by an authorized
      representative of PHI.

            


    

    


    (i)  Amounts
due Seller under a SOW shall be paid ***.  Delay in receiving invoices
or any other data requirements in number of copies specified, or errors and
omissions on either will be considered just cause for withholding payment
without loss of cash discount privilege.  All discount periods will
begin on the date that Buyer receives materials. Terms shall be based on receipt
of goods and services, receipt of invoice or required date of goods and
services, whichever is later.  Sellers are further required, when so
requested, to supply its federal tax ID number as a condition of
payment.

    


    
      	
              Article
      XXII

            	
              Confidentiality

            


    

    


    
      	
              22.1

            	
              Confidential
      Information.  All knowledge and information that either
      party  may receive from the other or from its employees, or by
      virtue of the performance of Work under and pursuant to this Contract,
      including but not limited to, all financial, economic, business,
      operational, strategic, regulatory, technical or other information
      regarding a party or any Affiliate, including all business and marketing
      plans, customer lists, pricing information, policies and procedures,
      software, specifications, drawings, models, scopes of work, reports,
      forecasts, data, know-how, designs, algorithms, software programs,
      financial projections, research, developments, ideas and operations,
      including any material bearing or incorporating any such information,
      whether contained in or relayed by writing, electronic form, verbally, or
      otherwise, and whether disclosed prior to or after the date hereof shall
      collectively be defined for purposes of this Contract as “Confidential
      Information”.   Confidential Information shall not include
      any information that: (i) the receiving party  can
      reasonably demonstrate was in its possession, care, custody or control, on
      a non-confidential basis, prior to disclosure hereunder; (ii) is or
      becomes publicly known through no wrongful act of the receiving party ;
      (iii) is lawfully received by the receiving party  from a
      third party not bound by a confidentiality obligation to the other ; or
      (iv) has been independently developed without reference to or use of
      any Confidential Information.

            


    

    
      	
              22.2

            	
              Use of Confidential
      Information.  Each party shall treat all Confidential
      Information for all time and for all purposes as strictly confidential and
      held by the receiving party in confidence, and solely for the receiving
      party’s benefit and use, and shall not be used by a party or directly or
      indirectly disclosed by the receiving party to any third party except with
      the disclosing party’s prior written
permission.

            


    

    
      	
              22.3

            	
              Return of Confidential
      Information.  At the disclosing party’s request, the
      receiving party   shall return all Confidential Information
      to the disclosing party or provide a written certification that all such
      Confidential Information and/or copies have been
  destroyed.

            


    

    


    
      	
              22.4

            	
              Remedy for
      Breach. The parties
      acknowledge and agree that each party shall be irreparably harmed if the
      other’s obligations under this Article 22 are not specifically enforced
      and that money damages would be inadequate to remedy any breach of such
      obligations.  Therefore, the receiving party  agrees
      and consents that, in addition to any other remedy that the disclosing
      party may have at law or in equity, the disclosing party  may
      seek to enforce this Contract by injunction, restraining order, or other
      equitable remedy.

            


    

    


    
      	
              Article
      XXIII

            	
              License
      Fees and Royalties

            


    

    


    
      	
              23.1.1  

            	
              Contractor to Pay
      Fees.  Contractor shall pay all *** that are payable on
      account of the Services or any part thereof, and shall otherwise assume
      all costs incidental to the use of any
***.

            


    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Article
XXIV                                Compliance
with Laws and PHI Requirements

     

    
      	
              24.1

            	
              Compliance with
      Laws.  Contractor shall comply with all applicable
      international, Federal, state and local laws, rules, and regulations
      including, without limitation and incorporated by reference herein,
      Section 202 of Executive Order 11246 (41 CFR Part 60), Section 503 of the
      Rehabilitation Act of 1973 (41 CFR Part 741), the Vietnam Era Veterans’
      Readjustment Assistance Act of 1974 (41 CFR Part 60-250), Public Law
      95-507 (15 USC 637(d)), and all immigration laws pertaining to
      employment.   Contractor shall certify, in writing, such
      compliance at PHI’s request.

            


    

    


    
      	
              24.2

            	
              Compliance with Safety
      Related Laws and Regulations.  Contractor shall comply
      with the federal Occupational Safety and Health Act ("OSHA") Construction
      Safety and Health Standards, Construction Industry Standards (29 CFR part
      1926), applicable General Industry Standards (29 CFR part 190), and all
      other applicable laws, ordinances, rules, regulations, and orders of any
      public body having jurisdiction for the safety of persons or property or
      to protect them from damage, injury, or loss.  Contractor shall
      furnish and erect all temporary barricades required by Federal, state, or
      local laws, ordinances, rules, or regulations, by any governmental
      authority or by Work Site conditions.  All such barricades shall
      be arranged so as to ensure the safety of all workers, persons, and
      property, and shall be removed by Contractor at the completion of the
      Work.

            


    

    


    24.3           Maintenance of
Records.  Contractor shall, and shall require all its
Subcontractors, to keep all records,
file all reports and otherwise comply with all federal, state and local laws and
regulations applicable to the Work including, without limitation, all laws and
Executive Orders and pertinent rules and regulations adopted thereunder
applicable to contractors.  This Contract is deemed to include all
provisions specifically required by law to be incorporated herein.  If
Contractor performs any work contrary to such laws or regulations, Contractor
shall promptly, without cost or expense to PHI, modify its performance as
necessary to so comply.

    


    24.4           Permits and
Licenses.  Permits and licenses necessary for performance of
the Work shall be secured
and paid for by ***, unless otherwise directed by ***  ***shall be
duly registered, and shall hold whatever licenses are required for the specific
work being performed, in the state in which the work is to be
performed.  Unless waived by ***, all Drawings provided by *** shall
contain the approval and seal or stamp of a professional engineer.

    


    


    Article
XXV                      Indemnification

    


    
      	
              25.1

            	
              Contractor
      Liability.  Contractor shall have the absolute and entire
      responsibility and liability for any and all injury, loss or damage of any
      kind or nature whatsoever, direct or indirect, suffered by any person or
      property (which terms for the purposes of this Contract shall respectively
      include, without limitation, any employees or agents of Contractor or of
      any of its Subcontractors, and any property of Contractor, or of any of
      its Subcontractors, or its employees or agents, and any property of PHI,
      or of any of its contractors, customers or its employees or agents) and
      arising out of, caused by, resulting from or suffered in connection with,
      the performance of the Work provided for in the Contract or any activity
      connected therewith.  The term “activity connected therewith”,
      for the purposes of this Article, shall include without limitation any
      operation, control or use by or for Contractor or any of its
      Subcontractors (or any employees or agents of either) of any Equipment of
      PHI, whether such Equipment was furnished by PHI with or without
      charge.

            


    

    


    
      	
              25.2

            	
              Contractor
      Intellectual Property Indemnification.  In the event of a claim
      that the manufacture, use or sale of any of the Goods, Material,
      Equipment, or any part thereof, supplied or used under this Contract
      (provided PHI makes no material design changes) constitutes infringement
      of any patent, copyright or proprietary information rights of others,
      Contractor shall, at it sole
expense:

            


    

    


    
      	
              (i)  

            	
              Indemnify
      and hold harmless PHI and Titleholder from and against any such claim and
      shall defend any suit or proceeding brought against PHI and/or Titleholder
      based on such claim and Contractor shall pay all damages and costs awarded
      therein against PHI and Titleholder;
and

            


    

    


    
      	
               
      

            	
              (ii)

            	
              At
      Contractor’s option, either procure for PHI the right to use said Goods,
      Material and/or Equipment, including any part thereof, to modify said
      Goods, Material and/or Equipment so that they become substantially equal
      but non-infringing, or remove said Goods, Material and/or Equipment and
      refund the Contract Price and the transportation, installation and
      associated costs thereof.

            


    

    


    
      	
              25.3

            	
              Contractor
      Indemnification.  Contractor hereby agrees to indemnify
      and hold harmless PHI and any and all of PHI’s  directors,
      officers, employees, agents and servants, and every other person directly
      or indirectly engaged on behalf of PHI in any activity connected with the
      performance of the Contract or such Work, from and against any and all
      third-party demands, claims, liabilities, damages, losses, judgments,
      costs or expenses (including attorney’s fees) incurred by the indemnitee
      in connection with injuries or damages to persons and/or property arising
      out of or resulting from any Work performed hereunder (or any activity
      connected therewith) including, but not limited to acts of omissions of
      Contractor, any or its employees or agents, and/or acts or omissions of
      any Subcontractor, or their employees or agents, and excluding such
      injuries or damages only to the extent required by
      law.  Contractor agrees to defend, at its expense, any suit or
      action brought against PHI and/or any of PHI’s employees based on any such
      alleged injuries or damages to persons and/or property arising out of or
      resulting from any Services performed by Contractor hereunder (or any
      activity connected therewith). In the event that Contractor fails to
      assume PHI’s defense under the terms of this provision, it shall pay, in
      addition to the costs and expenses stipulated above, any and all costs to
      PHI, including attorneys’ fees, in acting to enforce Contractor’s
      obligation hereunder.

            


    

     

    
      	
              25.4

            	
              Contractor
      agrees to defend, indemnify and hold harmless PHI for all costs and
      expenses associated with any claim that the Work, the Work Product or
      PHI’s use thereof infringe a patent, copyright, trademark, trade secret or
      other intellectual property right of any third party.  No
      settlement that prevents PHI from continuing to use the Work Product shall
      be made without PHI’s prior written consent.  Should PHI’s use
      of the Work Product be enjoined by any court, Contractor will, promptly
      and at no expense to PHI, either:  (a) obtain the right to
      continue to use the Work Product; or (b) provide PHI with substitute
      items that are functionally equivalent to the Work
  Product.

            


    

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Article
XVI                      Insurance

    


    
      	
              26.1

            	
              Insurance
      Requirements.  Before commencing the delivery of Goods or
      the provision of any Services under this Contract, Contractor shall
      procure and maintain at its own expense the following minimum insurance in
      forms and with insurance companies acceptable to
  PHI:

            


    

    
      	
               
      

            	
              (i)

            	
              Workers’
      Compensation insurance for statutory obligations imposed by Workers’
      Compensation, Occupational Disease, or other similar
  laws;

            


    

    
      	
              (ii)  

            	
              Employer’s
      Liability: *** per occurrence;

            


    

    


    
      	
              (iii)  

            	
              Business
      Automobile Liability (for all owned, non-owned, hired, and leased
      vehicles): *** per occurrence;

            


    

    


    
      	
              (iv)  

            	
              Comprehensive
      General Liability (including contractual liability insurance): *** per
      occurrence, and an aggregate, if any, of at least ***. The contractual
      liability insurance coverage shall insure the performance of the
      contractual obligations assumed by Contractor under this Contract,
      including specifically, but without limitation thereto, Article XXXII
      entitled “Indemnification”;

            


    

    


    
      	
              (v)  

            	
              Professional
      Liability (errors & omissions), where applicable, covering the
      professional services being delivered by Contractor: *** per occurrence.
      Such coverage shall remain in force for a minimum of three years following
      termination of Services under this Contract;
and

            


    

    


    
      	
              (vi)  

            	
              Any
      other insurance as may be required by PHI in the
  SOW.

            


    

    


    
      	
              26.2

            	
              Proof of
      Insurance.  Upon execution of this Contract, Contractor
      shall provide to PHI’s Corporate Insurance Department, located at 701
      Ninth Street, NW, Washington, DC 20068, certificates of insurance,
      including any endorsements, acceptable to PHI with respect to the above
      insurance requirements, and with respect to subparagraphs (ii), (iii),
      (iv) and (v) above, naming PHI, its officers, directors, employees and
      agents as additional insureds.  Such certificates and insurance
      coverage required by this Article 26 shall contain a provision that no
      coverage afforded under the policies will be canceled, materially changed
      or allowed to expire until at least thirty (30) days prior written notice
      has been given to PHI.  Such insurance shall provide a waiver of
      subrogation in favor of PHI, state that coverage is primary to any other
      valid insurance available to PHI (to the extent permitted by applicable
      insurance law), and allow cross liabilities and coverage regardless of
      fault.

            


    

    


    
      	
              26.3

            	
              Insurance for
      Subcontractors.  Contractor shall maintain adequate
      insurance coverage for Subcontractors, and in the event any
      Subcontractor(s) provide any Goods and/or Services for Contractor,
      Contractor may require such Subcontractor(s) to also maintain insurance in
      accordance with the requirements of this Article
  26.

            


    

    


    


    


    Article
XXVII                                Audit
and Record-Keeping

    


    
      	
              27.1

            	
              PHI
      shall have the right at all reasonable times to review and audit
      (i) all evidence, including but not limited to, correspondence,
      records, vouchers and books of account supporting charges invoiced to PHI
      by Contractor for Services performed or money expended under this
      Agreement; and (ii) all records necessary to verify Contractor’s
      compliance with PHI’s requirements described under Section 9
      below.  Contractor shall maintain and retain for a period of
      three (3) years after the date of the applicable Purchase Order all
      invoices, time sheets, payroll records and other evidence supporting all
      such charges.

            


    

    


    


    
      	
              Article
      XXVIII

            	
              Force
      Majeure

               

            


    

    
      	
              28.1

            	
              Definition.  Neither
      Party shall be considered to be in default in the performance of its
      obligations under this Contract, to the extent that the performance of any
      such obligation is prevented or delayed by any cause which is beyond the
      reasonable control of and without the fault or negligence of the affected
      party.

            


    

    


    
      	
              28.2

            	
              Notice of
      Event. If
      either Party’s ability to perform its obligations under this Contract is
      affected by an event of Force Majeure, such Party shall promptly, upon
      learning of such event and ascertaining that it will affect its
      performance under the Contract, give notice to the other Party stating the
      nature of the event, its anticipated duration, and any action being taken
      to avoid or minimize its effect. Such notice shall be given no later than
      four (4) days after the affected Party ascertains that its performance
      will be affected.  Failure to give such notice within the time
      specified shall be deemed a waiver of the relief for Force Majeure
      provided herein.

            


    

    


    
      	
              28.3

            	
              Extension of Time for
      Performance.  The Party
      claiming Force Majeure may only extend the time for its performance for a
      period would be necessary to compensate in time for the effect of such
      Force Majeure event.

            


    

    


    
      	
              28.4

            	
              Excuse From
      Performance.  In the
      event that the performance by either Party or a portion thereof is
      rendered impossible by a Force Majeure event, that portion of performance
      so affected shall be deemed terminated and the price shall be adjusted
      accordingly.

            


    

    


    
      	
              28.5

            	
              Risk of Loss***
      shall bear all costs and expenses caused by a Force Majeure event and the
      risk of loss to all items damaged or destroyed by a Force Majeure
      event.

            


    

    



    
      
         


      

      
         


        
          

        

      

      
         


        
          


           

          PHI
Service CompanyCONFIDENTIAL

          


        

      

    


    
       

      
        	
                11  

              	
                Article
      XXIV                           Subcontracting

              


      

       

      


    

    
      	
              29.1

            	
              Use of
      Subcontractors. Subject to PHI’s
      review and prior approval Contractor may employ Subcontractors, contract
      employees, consultants or other non-employees, to complete any part or
      parts of its Work under this Contract.  The Contractor shall be
      liable to PHI for the acts and omissions of its Subcontractors and of
      persons either directly or indirectly employed by them including,
      specifically, an obligation to indemnify PHI for acts and omissions of its
      Subcontractors as set forth in Section
32.2.

            


    

    


    


    Article
XXX                      Miscellaneous

    


    
      	
              30.1

            	
              Non-Waiver.  No
      waiver by either Party of any provision of this Contract shall be
      effective unless expressly contained in a writing signed by the waiving
      Party.  Failure by the other Party to enforce any provision of
      this Contract or to exercise any right arising out of this Contract shall
      not be deemed a waiver of that provision or right, or of any other
      provision or right, and no waiver by such Party of any breach shall be
      construed to be a waiver of any prior or succeeding
  breach.

            


    

    


    
      	
              30.2

            	
              Severability.  If
      any term or condition of this Contract shall be deemed to be unlawful or
      unenforceable by a Federal or state court or agency of competent
      jurisdiction, such determination shall have no effect on the validity and
      enforceability of the other terms and conditions of this Contract and the
      challenged term or condition shall be deemed deleted or modified to the
      extent necessary for such term or condition to be effective to the fullest
      extent.

            


    

    


    
      	
              30.3

            	
              Entire Agreement and
      Interpretation.  This Contract constitutes the entire
      agreement between the Parties, and supersedes all prior proposals,
      agreements and understandings, whether oral or written, relating to the
      subject matter of the Contract.  No amendment to this Contract
      shall be effective unless executed by authorized representatives of both
      Parties.

            


    

    


    
      	
              30.4

            	
              Representations.  Each
      Party represents and warrants to the other (i) that if it is a corporation
      it is validly existing and in good standing under the laws of the state of
      its incorporation; (ii) that it has full power and authority to execute
      and deliver this Contract and  to carry out the actions required
      of it by this Contract; (iii) that the execution and delivery of this
      Contract and the transactions contemplated hereby have been duly and
      validly authorized; (iv) that all Contract Documents will be duly and
      validly executed by an authorized representative of the Party and
      constitutes a legal, valid and binding agreement of said Party; (vi) that
      it is not in violation of any applicable law, statute, order, rule,
      regulation, or judgment promulgated or entered by any Federal, state, or
      local Governmental Authority, which violation could reasonably be expected
      to materially adversely affect the performance of its obligations under
      this Contract; and (vii) that it will comply with all laws, rules,
      regulations, codes, and standards of all federal, state, and local
      Governmental Authorities applicable to its compliance with this
      Contract.

            


    

    


    
      	
              30.5

            	
              A.

            	
              Independent
      Contractor/Non-Solicitation.  Contractor's relationship
      to PHI under this Contract shall be that of independent contractor and
      shall not be construed to constitute Contractor, or any of its employees
      or Subcontractors, as an authorized representative, agent, associate,
      joint venturer, or partner of PHI.

            


    

    


    
      	
              B.

            	
              Non-Solicitation.  During
      the term of this Agreement and for twelve (12) months thereafter, neither
      party will solicit for employment any employee, agent, or contractor of
      the other.  A general advertisement or a request for employment
      which is initiated exclusively by an employee or contractor of the other
      shall not be considered a solicitation pursuant to this
      section.

            


    

    


    
      	
              30.6

            	
              Use of PHI Methods,
      Equipment and Facilities.  PHI’s methods, Equipment, and
      facilities shall, at

            


    

    all times
be owned by PHI and any use by Contractor of said methods, Equipment and
facilities shall, at all times, be subject to PHI’s discretion and shall remain
under PHI’s exclusive direction and control.

     
 

    
      	
              30.7

            	
              Set-Off. Any amount owed to
      Contractor by PHI or any of PHI’s Affiliates shall be subject to deduction
      by PHI for any setoff, counterclaim, or indemnification right arising out
      of this or any other Contract from PHI or any of PHI’s Affiliates to
      Contractor.

            


    

    


    
      	
              30.8

            	
              Term and Conditions
      for Gas Contracts.  To the extent that the Work to be
      provided hereunder will be performed at, near or around facilities used by
      PHI for the distribution, sale or use of natural gas, the terms and
      conditions contained herein shall be supplemented by terms and conditions
      contained in Attachment F attached hereto which terms and conditions are
      incorporated by reference herein and made a part
  hereof.

            


    

    


    
      	
              30.9

            	
              Public
      Communication.  Contractor agrees to cooperate with PHI
      in maintaining good community relations.  PHI will issue all
      ***.  *** shall not*** release any contractor or design
      documents or direct load control program marketing materials until PHI has
      reviewed same and provided prior written approval.  *** shall
      not, without the prior written consent of ***, use in advertising,
      publicity or otherwise, the name or logo of ***, or the name or logo of
      any affiliate of ***, or refer to the existence of this Contract*** in any
      press release, website, advertising or promotional
      material.  ***shall, within five (5) days of the date of this
      Contract, remove any existing reference to *** or its affiliates from any
      website.

            


    

    


    
      	
              30.10

            	
              Choice of Law and
      Venue.  This Contract is to be interpreted and enforced
      under the law of the jurisdiction where the Goods are to be delivered or
      the Services are to be rendered (without regard to the choice of law
      provisions thereof), and any dispute involving the Contract shall be heard
      in a court of competent jurisdiction in such
      jurisdiction.  Where the Goods and/or Services are provided to
      or performed in more than one jurisdiction, this Contract is to be
      interpreted and enforced under Delaware
law.

            


    

    


    
      	
              30.11

            	
              ***
      Remedies.  All of the remedies hereunder enjoyed by, or
      given to, ***, are cumulative, and are in addition to any other rights or
      remedies which *** may have at law, in equity or otherwise, and each such
      remedy is not exclusive of, and does not limit, any other remedy in any
      way.

            


    

    


    
      	
              30.12

            	
              Assignability.  This
      Contract is not assignable by either Party without the written consent of
      the other Party; provided, however, that
      PHI shall be permitted to assign its rights and obligations hereunder to
      an Affiliate without the prior consent of
  Contractor.

            


    

    


    
      	
              30.13

            	
              Prohibition Against
      Employment of PHI Employees.  Without the express prior
      written permission of PHI, Contractor shall not (directly or indirectly)
      solicit, hire or otherwise retain any employee of
  PHI.

            


    

    


    
      	
              30.14

            	
              Survival of
      Provisions.  The following provisions of this Contract
      shall survive the termination of the Contract and the performance of the
      Work contemplated by the Contract: Sections 2.1, 2.2, and 17.1 and
      Articles XXIV, XXV, XXVI, XXVIII, XXIX, XXX, XXXII, XXXIV and
      XXXVIII.

            


    

    


    
      	
              30.15

            	
              Notification of “Miss
      Utility” or “One Call”.  Contractor shall notify "Miss
      Utility" or "One Call" at least *** hours, or such other time required by
      the jurisdiction within which the Work is being performed, before
      commencing any excavation in connection with
  Work.

            


    

    


    
      	
              30.16

            	
              Prohibition Against
      Contractor Gifts or Gratuities.  PHI has a policy
      prohibiting its employees, agents, inspectors, consultants and
      contractors, and the employees, agents, or representatives of any of them,
      from soliciting or accepting bribes, gifts, gratuities, favors, services
      or anything of material value from others including, but not limited to,
      vendors, suppliers, contractors and subcontractors, and the employees,
      agents, or representatives of any of them, during or in any way connected
      with their participation in work done for PHI.  Upon request,
      Contractor shall furnish written evidence that all of its employees
      assigned to Work covered by this Contract are aware of the policy and
      agree to abide by its terms.

            


    

    


    
      	
              30.17

            	
              Limitation of
      Liabilities. Neither party shall be liable to the other Party for
      consequential, incidental, punitive, exemplary or indirect damages
      suffered by the other Party or any Subcontractor, supplier or customer of
      such Party, lost profits or other business interruption damages, by
      statute, in tort or contract, under any indemnity provision or
      otherwise.  The liability limitations herein imposed on remedies
      and the measure of damages shall be without regard to the cause or causes
      related thereto, including without limitation, the Party’s negligence,
      whether such negligence is sole, joint or concurrent, or active or
      passive.  To the extent any damages required to be paid
      hereunder are liquidated, the Parties acknowledge that the damages are
      difficult or impossible to determine, otherwise obtaining an adequate
      remedy is inconvenient and the liquidated damages constitute a reasonable
      approximation of the harm or loss.

            


    

     

    30.18           Notices.

     

    Any
notice, demand for information or document required or authorized by this
Contract

    to be
given to a Party shall be given in writing and shall be sufficiently given if
delivered by electronic mail, overnight mail, overnight courier or hand
delivered against written receipt, or if transmitted and received by facsimile
transmission addressed as set forth below, or if sent to such Party by
electronic mail, overnight mail, overnight courier or hand delivery to such
other address as such Party may designate for itself by notice given in
accordance with this Section 38.18.  Any such notice shall be
effective only upon actual receipt thereof by the addressee.  All
notices given by facsimile shall be confirmed in writing, delivered or sent as
aforesaid, but the failure to so confirm shall not in any manner render
ineffective the original notice.  The address for the delivery of
notices and bills to each Party and the respective telephone and facsimile
numbers shall be as follows:

    


    (i)           For
PHI:

    


    


    


    


    


    
      	
              (ii)

            	
              For
      Contractor:

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    PHI
SERVICE COMPANY

    COMVERGE
TERMS AND CONDITIONS

    FOR
DIRECT LOAN CONTROL SOLUTION

    ATTACHMENT
A

    


    PHI
SERVICE COMPANY

    CONTRACT
SAFETY REQUIREMENTS

     

    1. OVERVIEW:  This
document, Contractor Safety Requirements - Attachment A, outlines the safety
requirements for Contractors of Pepco Holdings, Inc., (PHI) and its affiliates
(as designated on the face of the Purchase Order to which this document is
attached).  The Purchase Order, together with the applicable attached
PHI Terms and Conditions, Scope of Work, this Attachment A, and other documents
which may be identified on the face of the Purchase Order, constitute the
Contract. It is not the intent of PHI to identify, in this document, activities
required for Contractors to be in compliance with Occupational Safety and Health
Administration (hereinafter “OSHA”) regulations, or with other applicable
federal, state or local statutes, regulations, or ordinances.  This
document is intended to reflect and to incorporate by reference PHI’s safety
policies and procedures.

    


    2.  CONTRACTOR
RESPONSIBILITY FOR COMPLIANCE:

    a. Law -  It is the
Contractor’s sole responsibility to understand and to comply fully with all
applicable federal, state and local statutes, regulations, and
ordinances.

    b. PHI Safety Requirements
-  It is the Contractor’s sole responsibility to understand and to
comply fully with all applicable PHI safety procedures and safety handbook(s),
including any site-specific requirements.

    c. Project Specific Technical
Safety Requirements - For any project there may be additional, and often more
specific, safety requirements. It is the Contractor’s sole responsibility to
understand and follow the project specific technical safety requirements, as
communicated by PHI.  In the event Contractor identifies a conflict or
potential conflict between the project specific technical safety requirements
and applicable law or general PHI requirements, Contractor should bring such
matter to the attention of the PHI Representative (see paragraph 7(b), below)
for resolution.

    d. Qualified Employees - It is
the Contractor’s sole responsibility to provide qualified, trained
employees.

    e. Contractor compliance with
Sections 2(a) – 2 (d) above shall be considered a requirement of the
contract.  Failure to comply may be considered by PHI to be a breach
of the Contract.

    


    3.  CONTRACTOR
DEFINED:  As used herein, Contractor shall refer to the
Contractor, its employees, officers, agents, representatives and permitted
assigns and subcontractors.

    


    4. COSTS OF
COMPLIANCE:  The Contractor’s cost to provide the appropriate
safety measures and to comply with the Law and PHI’s Safety Requirements must be
considered and included as an integral part of the bid/proposal
submission.

    


    5.  DATA REQUESTS / OTHER
REPORTING:  PHI may periodically request certain workforce
statistical data, including but not limited to: (1) Lost Time Incident (LTI)
rate for workers; (2) Restricted Work rate; and (3) OSHA Recordable Incident
(ORI) rate.  Upon request, Contractor shall promptly provide such
information to PHI.

    


    6.  CONTRACTOR
SAFETY AT PHI (SOURCING AND COMMUNICATION):

    a.   Safety
performance is a prime consideration in the selection of
Contractors.  Contractor safety begins with the selection of
Contractors who have demonstrated a good safety record.  As a general
principle, PHI favors Contractors that have an EMR in the top quartile of the
applicable service category.

    


    b.  PHI’s goal is to
ensure that Contractors with both long-term or sustaining working relationships
and those with short duration contracts share the same safety values and
demonstrate those values through their work performance.

    


    c.   Safety
communication covers all methods by which PHI and the Contractor communicate
about safety and all methods by which Contractor in turn communicates with its
employees, officers, agents, representatives and permitted assigns and
subcontractors about safety. Communication begins early in the bidding phase and
is on-going as an integral part of PHI’s relationship with its
Contractors.  PHI expects that such safety communication will be an
on-going and integral part of the Contractor’s relationship with its employees,
officers, agents, representatives and permitted assigns and subcontractors. The
goal is to ensure clarity and to limit misunderstandings.

    


    7.  SAFETY
COMPLIANCE:

    


    a.  PHI will include
any additional safety and health performance requirements in the Purchase Order
and will hold the Contractor accountable for meeting such contractual
requirements.  Such additional, specific safety requirements may
include, but not be limited to, information included in bid specifications and
pre-bid and pre-award documents, as incorporated into the Scope of
Work,  as well as the applicable PHI safety procedures and safety
handbook(s), including any site-specific  or project specific
requirements, for the work to be performed by the Contractor.

    


    b. As indicated in Section 2,
above, safety compliance is the Contractor’s responsibility.  PHI will
assign a designated individual (hereinafter “PHI’s Representative”) to provide
additional guidance and oversight to the Contractor.

    


    c. PHI evaluates Contractor
compliance by conducting routine and/or unannounced site visits, observing
formal Contractor safety inspections, responding to reports of alleged
non-compliance, and reviewing various aspects of the Contractor’s safety
management program and similar quality management activities.  PHI may
perform formal audits and may issue formal evaluations.  Contractor
hereby agrees to cooperate with PHI in the performance of any such
audit.

    


    d. If a safety violation is
observed by the PHI Representative, or a PHI employee, the violation will be
discussed with the Contractor (as defined in Section 3, above) at the time of
discovery.

    


    e. If directed by PHI, the
Contractor must immediately initiate corrective actions and implement measures
to prevent a recurrence.

    


    f. The Contractor shall
monitor individual Contractor personnel in order to be able to identify those
with poor safety records.  Individuals who repeatedly violate safety
rules shall be removed from the project.  Individuals who commit a
single serious violation of a safety rule(s) should also be considered for
removal depending on the circumstances involved.  PHI reserves the
right to require the removal of such individual(s) from similar current PHI
projects and to bar such individual(s) from future PHI projects or
sites.

    g. If a Contractor is observed
to be operating in a manner that creates, or could reasonably be expected to
create, an imminent danger to persons or property, the PHI Representative or a
PHI employee observing the hazard is empowered to stop the job or that portion
of the job impacted until the issue has been resolved to the satisfaction of
PHI’s Representative.

    


    h. The Contractor shall,
immediately upon receipt of any safety-related citations or notices incurred on
the project, notify and forward such citation or notice to PHI’s
Representative.  The Contractor shall also immediately notify PHI of
any governmental safety or environmental inspection.

    


    i. Willful and/or repeat
violations of safety requirements by the Contractor may be considered by PHI, in
its sole and exclusive discretion, to be a breach of the contract and reason for
immediate suspension of work, removal from the project, contract modification or
termination, and/or removal from PHI’s approved bidder’s list in PHI’s sole and
exclusive discretion.

    


    j.  If the
Contractor’s overall safety performance is determined by PHI, in its sole and
exclusive discretion, as unsatisfactory or noncompliant with contract
provisions, or if the Contractor is unwilling to demonstrate to PHI’s
satisfaction, sufficient safety program improvement, such behavior may be
considered a breach of the contract and reason for suspension of work, removal
from the project, contract modification or termination, and/or removal from
PHI’s approved bidder’s list in PHI’s sole and exclusive
discretion.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    8.
GENERAL REQUIREMENTS:

    


    a. As indicated in Section 2,
it is the Contractor’s responsibility to comply fully with the Law and with
PHI’s Safety Requirements.

    


    b.  In cases where
there is more than one method of compliance with a given safety rule or
regulation, the Contractor may deviate from PHI practices only if it can
demonstrate to PHI’s Representative that the alternative practice provides an
equal or greater margin of safety. Any such deviation must be expressly approved
by PHI’s Representative prior to utilization of the practice.

    


    c. PHI may provide more
detailed information and guidance regarding any specific procedures prior to
commencement of work.

    


    9.  ADMINISTRATIVE
REQUIREMENTS:

    


    a. Pre-Bid Meeting - Where a
Pre-Bid meeting is coordinated by PHI, bidders will be provided with an
opportunity to review applicable safety requirements and specific safety issues
concerning the project, including but not limited to PHI procedures, safety
handbooks and known site conditions.   Where a Pre-Bid meeting is
not held, and or subsequent to a Pre-Bid  Meeting but prior to
responding to the  Request for Proposals (hereinafter “RFP”),
Contractor may request further information or documentation from PHI, which
responses will be shared with all bidders.

    


    b. Safety Plan - Contractors
who are bidding to perform work which PHI has designated as requiring a
project-specific Safety Plan shall submit the plan with its response to the RFP
or Bid. Such Plan will be approved as part of the bid award process. At a
minimum, the Safety Plan shall include the following elements:

    


    1.  Roles
and Responsibilities – Identification of who will be responsible for project
safety oversight and such individual’s qualifications.  For
multi-Contractor work-sites, each Contractor is responsible for its employees,
officers, agents, representatives and permitted assigns and subcontractors
..  The Safety Plan shall clearly state the scope of this
responsibility.

    


    2.  Scope
of Work (SOW)– The plan must specifically identify the elements of the SOW for
which the plan is applicable.

    


    3.  Task
and Hazard Identification - Significant tasks to be performed by the Contractor
as well as anticipated hazards and/or exposures shall be
identified.

    


    4.  Hazard
Mitigation Procedures and Work Methods - For each hazard or exposure identified,
the Contractor shall specify measures that will be taken to mitigate such
hazards or exposures. A table format may be used to organize and present the
task, hazard, and mitigation steps.  For example:

    


    
      	
              Location:

            	
              Substation
      Yard

            
	
              Task

            	
              Hazard

            	
              Mitigation
      Steps

            
	
              Material
      Handling

            	
              Contact
      with overhead energized lines/equipment

            	
              Off-load
      in the clear and have a safety observer
present

            


    

    


    5.  Incident
Analysis and Reporting – Specifically include, at a minimum, any unique or
special incidental analysis or reporting that might arise out of the
SOW.

    


    6.  Compliance
Monitoring –
Contractor shall define any unique or special methods necessitated by the SOW
which will ensure that employees, officers, agents, representatives and
permitted assigns and subcontractors will achieve safety
compliance.

    


    
      	
               
      

            	
              c. Contractor
      Orientation – Contractor Orientation is intended to serve as a
      communications forum to identify PHI safety requirements and the resources
      / references applicable to the specific contract work to be
      performed.  This orientation session is not intended to train
      contractor’s management, its employees, or
  subcontractors.

            


    

    


    1.  The
extent and content of the orientation session shall be commensurate with the
scope and type of the Contractor’s activities and may include an orientation
video(s).

    


    2. The
Contractor’s management representative responsible for the performance of the
work shall attend the orientation session.

    


    3.  After
the completion of the orientation session, and prior to commencement of the
work, an appropriate Contractor management representative shall certify in
writing that: (1) the Contractor has been informed of PHI safety requirements;
(2) that employees, officers, agents, representatives and permitted assigns and
subcontractors have the appropriate qualifications to perform the work; and (3)
the Contractor agrees to comply with all applicable safety
requirements.  The Contractor shall complete and return the safety
acknowledgment form provided at the orientation.

    


    d. Project Kickoff – When
deemed necessary by PHI, a pre-construction or project kickoff meeting will be
held with the Contractor prior to the commencement of work. At the
meeting:

    


    1.  The parties will review
and discuss the Contractor’s Safety Plan, if one was required.

    


    2.  Hazard
mitigation measures will be reviewed; work will not commence until these hazards
have been adequately addressed.  The meeting will address the methods
by which compliance will be achieved in accordance with applicable safety
requirements.

    


    3.  When
requested, the Contractor shall exchange an Emergency Call List with PHI. The
list must contain 24-hour contact information for key Contractor and PHI
personnel.  This list will be distributed to all appropriate
parties.

    


    4.  For
facility service contracts, a review of associated safety issues and specific
facility issues, restrictions or practices, such as evacuation procedures will
be addressed.  Any changes in the facility that may affect the safety
of Contractor or PHI employees or third parties will be communicated
immediately.

    


    e. Safety Meetings and Job
Safety Briefs - During the periods when work is being performed, the Contractor
shall conduct regular safety meetings with their employees and
subcontractors.  In addition, each crew shall conduct job safety
briefs: (1) prior to each day’s work; (2) when there are changes to the work
order or plan; (3) and/or when a new worker joins the
crew.  Documentation of such job safety briefs shall be readily
available at the job site for inspection and retained for the duration of the
project or thirty (30) days, whichever is longer.

    


     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.  INCIDENT REPORTING AND
INVESTIGATION: 

    


    a. An Incident is an unplanned
event that results in, or could potentially result in, (1) harm to people; (2)
damage to property; and/or (3) adverse public impact.

    b. There are four categories
of Incidents:

    


    1.  Injury / Illness – an
event or occurrence that causes harm to a person or persons;

    2.  Property
Damage - an event or occurrence that causes damage to property, whether owned by
PHI, the Contractor, another Contractor, or the public;

    3.
Adverse Public Impact – an event or occurrence that disrupts service to the
public or result in adverse publicity or public reaction;

    4.
Near-Miss – an event or occurrence which had the potential under different
circumstances to any of the above.

    


    c. A Hazardous Condition is a
condition that requires actions to rectify and requires further investigation in
accordance with this Section, in order to prevent such Hazardous Condition from
becoming an Incident.

    


    d. If an Incident occurs, the
first priority is to minimize exposure of personnel and/or the public to the
potential for additional injury or consequence and to ensure that the injured
receive medical treatment.  Contractor shall report promptly any
Incident(s) to PHI’s Representative.

    


    e. Incident Reporting – The
PHI reporting requirement outlined herein does not substitute for any applicable
legal reporting requirements.  In the event of an Incident, the
Contractor shall collect and immediately provide to PHI the following
information.

    1.  What
happened?

    2.  Who
and how many people were injured or became ill?

    3.  What
treatment was administered?

    4.  What
was the nature and seriousness of the injury / illness?

    5.  Where
did the incident occur?

    6.  When did the incident
occur (date, time of day)?

    7.  Were
there any witnesses?

    8.  Whether
a governmental agent appeared at the work site in connection with the
Incident.

    


    f. Incident Investigation – If
directed by PHI, the Contractor shall conduct an investigation that will
identify contributing factors relating to the Incident and the corrective
actions that will be taken to prevent recurrence.  Such investigation
shall be completed within the time period required.  The results of
the investigation shall be described in a report prepared by the Contractor and
provided to PHI.  The Contractor may use its internal incident
reporting forms, however, PHI reserves the right to require reports be submitted
in a form acceptable to it after discussion with the Contractor.

    


    


    
 

    



    
      
         


      

      
         


        
          

        

      

      
         


        
          


           

          PHI
Service CompanyCONFIDENTIAL

          


        

      

    


    


    PHI
SERVICE COMPANY

    COMVERGE
TERMS AND CONDITIONS

    FOR
DIRECT LOAN CONTROL SOLUTION

    ATTACHMENT
B

     

    


     

     

    CONTRACT
CHANGE AUTHORIZATION FORM

     

    Please
Print Clearly and Fill Form Out Completely

    


     

    Change
Order No.:
_________________________________________________________________________

     

     

    Master
Bid Specification Rider
No.:  _________________________                                                                         Work
Site: _____________________                     

     

    Purchase
Order No.:  
___________________________________________________________________________________

     

    From:    ______________________________________________________________________________________________                                                                                                             

                
    (Contractor)                      

    To:       ________________________________________________________________________________________________                                                                                                              

                    
(Owner)                      

    Work
referred to above shall be changed as follows [Describe change completely,
including any price and schedule and change or impact on Work]:

     

     

    ___________________________________________________________________________________________________

    
      ___________________________________________________________________________________________________

      ___________________________________________________________________________________________________

      ___________________________________________________________________________________________________

      ___________________________________________________________________________________________________

      ___________________________________________________________________________________________________

      ___________________________________________________________________________________________________

      ___________________________________________________________________________________________________

    

    


     

    Attach
any new or revised drawings or specifications and indicate whether there are any
such attachments. __________ Yes
there are attachments________No
attachments

     

    
 

    
      	
              OWNER

              By:                                                                

              Name:

              Title:                                                                

              Date:                                                                

            	
              CONTRACTOR

              By:                                                                

              Name:

              Title:                                                                

              Date:                                                                

            


    

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

    PHI
SERVICE COMPANY

    COMVERGE
TERMS AND CONDITIONS

    FOR
DIRECT LOAN CONTROL SOLUTION

    ATTACHMENT
C

     

    


     

     

    


     

     

    
      	
               
      

            	
              LIST
      OF APPROVED HAZARDOUS WASTE DISPOSAL
SITES

            


    

     

    


    


    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


     

    
 

    



    PHI
SERVICE COMPANY

    COMVERGE
TERMS AND CONDITIONS

    FOR
DIRECT LOAN CONTROL SOLUTION

    ATTACHMENT
F

     

    Cardinal
Safety Rule Policy

     

     

    


     

     

    


     

     

    


     

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

     

    10.2
Signature Document

     

     

    


     

     

    An
authorized signature on this page indicates acceptance of this Statement of
Work.

     

     

    


     

     

    Statement
of Work for Services

     

     

    Each of
us agrees that the complete agreement between us about this transaction consists
of this Statement of Work and its Appendices as specified herein.

     

    


     

    Agreed
to:                                Agreed to:

     

     

    PHI
Service Company               Comverge, Inc.

     

     

    Washington,
DC                 East Hanover, NJ

     

                           /s/ Frank A. Magnotti                                           

    By:  
/s/ Dennis R.
Wraase                                                                

     

    Authorized
Signature:              Authorized
Signature:

     

         Dennis R.
Wraase                                      Frank A. Magnotti                                 

     

    Name
(type or print):              Name (type or
print):

     

    Chairman & CEO,
PHI                                                      President, Clean Energy
Solutions            

    Title:                   Title:

     

     

    


    January 21,
2009                                          January 16,
2009                      

    Date:                   Date:

     

    


    
 

     

     

    


     


    
      
         


      

      
         


        
          

        

      

      
         


        
          


           

          PHI
Service CompanyCONFIDENTIAL

          


        

      

    


     

    
      	
              10.3  

            	
              Pricing

            


    

     

     

    ***