SOFTWARE AGREEMENT
This Software Agreement (this "Agreement") is effective as of this 6th
day of January, 2000, between Enron Energy Services, LLC, a Delaware limited
liability company ("EES"), and EMW Energy Services Corp., a Delaware corporation
(the "Company").
EES and Company agree as follows:
1. DEFINITIONS. The following capitalized terms shall be used in this
Agreement with the meanings set forth in this Section 1:
(a) "ASSIGNED SOFTWARE" means those EES computer programs in source
code and machine-readable object code form identified in Schedule A
with the functionality set forth in Schedule B, together with any
Updates provided hereunder.
(b) "DOCUMENTATION" means all user manuals, handbooks, written reports,
flowcharts, specifications, analyses and other written materials
regarding the Assigned Software which are supplied by EES at the time
of this Agreement.
(c) "FIELD OF USE" means the Small Commercial and Residential
Businesses as defined in the purpose clause of the amended and restated
charter for the Company as in effect on the Closing Date and as amended
from time to time.
(d) "MAINTENANCE AND SUPPORT SERVICES means the Services described in
Schedule C.
(e) "NONCOMPETITION AGREEMENT" means the Noncompetition Agreement dated
as of January 6, 2000, entered into by Enron Corp., EES, and the
Company.
(f) "SPECIFICATIONS" mean the specifications attached as Schedule B.
(g) "THIRD PARTY SOFTWARE" means the third party software identified on
Schedule A.
(h) "TAXES" means any and all governmental or quasi-governmental taxes,
assessments, levies, duties, fees, charges and withholdings of any kind
or nature whatsoever and howsoever described, including income, gross
receipts, franchise, sales, use, excise, property, capital, value
added, stamp, transfer, intangible, employment, occupation, generation,
privilege, utility, BTU, gathering, energy, consumption, lease, permit,
license, filing, custom, and recording tax, together with any and all
penalties, fines, additions, or interest thereon.
(i) "UPDATES" means the Assigned Software as modified and supplied to
Company by EES pursuant to Section 6(b).
2. OWNERSHIP AND ASSIGNMENT.
(a) ASSIGNMENT OF JOINT OWNERSHIP INTEREST IN ASSIGNED SOFTWARE. In
consideration of the Contribution and Subscription Agreement dated as
of December 23, 1999, entered into by EES, the Company and certain
other persons, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, EES hereby agrees to
assign and transfer and hereby assigns and transfers to Company an
undivided joint and equal interest in and to the Assigned Software, and
any intellectual property rights (other than trademarks, tradenames,
servicemarks, or other indication of source) in and to the Assigned
Software and Documentation. EES and Company hereby agree as follows
with respect to their respective rights and duties as to the Assigned
Software and Documentation:
(i) Until the end of the term of the Noncompetition Agreement,
both EES and Company shall have the right to use, copy, operate,
modify, and process the Assigned Software, and to use the Documentation
in connection with the Assigned Software. Prior to the end of the term
of the Noncompetition Agreement, Company shall not transfer, license,
or assign the right to use, copy, operate, modify, and process the
Assigned Software to any third party (other than as permitted in
Section 14). Prior to the end of the term of the Noncompetition
Agreement EES shall not transfer, license, or assign the right to use,
copy, operate, modify, and process the Assigned Software in the
residential business portion of the Field of Use to any third party
(other than as permitted in Section 14). Any such prohibited transfer,
license or assignment prior to the end of the term of the
Noncompetition Agreement shall be void and ineffective, and EES and
Company shall be entitled to injunctive relief to prevent such
transfer, license or assignment by the other party prior to the end of
the term of the Non-competition Agreement. Nothing in this Section
2(a)(i) shall prohibit EES from making any transfer, license or
assignment of its right to use, copy, operate, modify, and process the
Assigned Software to any third party for any use outside the
residential business portion of the Field of Use or prevent EES from
using the Assigned Software and Documentation.
(ii) Commencing at the end of the term of the Noncompetition
Agreement, the restrictions on transfer, license, or assignment set
forth in Section 2(a)(i) shall terminate, and both Company and EES
shall both have the right to use, copy, operate, modify, and process
the Assigned Software, and to use the Documentation in connection with
the Assigned Software, and to license third parties (without the right
to sublicense or utilize in connection with any form of service bureau
activity) to use, copy, operate, modify, and process the Assigned
Software solely for their own internal business purposes and to use the
Documentation solely for their own internal business purposes in
connection with the Assigned Software.
(iii) With respect to any transfers, licenses or assignments
regarding the Assigned Software and Documentation, for any such
transfer, license, or assignment to be effective, the party making or
granting such transfer, license, or assignment must obligate any such
transferee, licensee, or assignee to the restrictions on use, transfer,
and confidentiality contained herein.
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(b) If either party at any time shall become aware or receive notice of
any infringement or misappropriation of the Assigned Software or the
Documentation, then such party shall promptly give written notice
thereof to other party setting forth all information in such party's
possession regarding such infringement or misappropriation.
(i) Prior to the end of the term of the Noncompetition
Agreement, if the infringement or misappropriation of the Assigned
Software or the Documentation occurs solely in the residential business
portion of the Field of Use then Company shall have the right (but not
the obligation) to institute legal action to redress all such
infringements or misappropriation. Prior to the end of the term of the
Noncompetition Agreement, if the infringement or misappropriation of
the Assigned Software or Documentation occurs in connection with any
use other than the residential business portion of the Field of Use,
then EES shall have the right (but not the obligation) to institute
legal action to redress all such infringement or misappropriation. In
either case, the party not instituting the legal action shall, at the
filing party's expense, cooperate fully with the filing party in any
legal action taken against any party alleged to be infringing,
including, if necessary agreeing to be named as a party plaintiff in
such suit.
(ii) Commencing at the end of the term of the Noncompetition
Agreement, with respect to any intellectual property claims of
infringement or misappropriation of the Assigned Software and the
Documentation against third parties, both EES and Company shall have
the right to xxx in their own name (or if so required by the law of the
forum, to bring suit in the name of other party or join the other party
as a party plaintiff) for infringement or misappropriation of the
Assigned Software. The other party shall have the right to join the
suit as a plaintiff and shall be obligated to share equally in all out
of pocket expenses and entitled to share equally in any monetary
recovery. The party not responsible for instituting the legal action
shall, at the filing party's expense, cooperate fully with the filing
party in any legal action taken against any party alleged to be
infringing, including, if necessary agreeing to be named as a party
plaintiff in such suit.
(iii) In the event that the party with a right to institute an
action hereunder fails to institute legal action within thirty (30)
days of the notice described in Section 2(b) above, then the other
party may institute such legal action, and the party that did not
exercise its right to institute the action shall cooperate fully with
the filing party in any legal action taken against any party alleged to
be infringing, including, if necessary agreeing to be named as a party
plaintiff in such suit. Any amount awarded or paid as a result of such
legal action shall be first allocated in reimbursement of any costs and
expenses incurred in pursuing such action, with any remaining amounts
to be recovered by the party or parties instituting such litigation.
(c) Except for transfers, licenses, assignments, or other exploitation
of the Assigned Software or Documentation prohibited by this Agreement,
each of EES and Company shall have no duty to compensate the other
party for any transfer, license, assignment or other exploitation of
the Assigned Software or Documentation. Each of EES and Company may
transfer, license, assign, or otherwise exploit the Assigned Software
or
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Documentation other than as prohibited in this Agreement without the
consent of and without accounting to the other party.
(d) EES covenants not to xxx the Company (or any of its licensees or
permitted assignees) for the infringement of any United States patents
based on the use of the Assigned Software and the Documentation.
3. RESTRICTIONS.
(a) NO DISCLOSURE. The Assigned Software and Documentation contain
Confidential Information (as defined in Section 4(a)) of both parties
and are considered by both parties to constitute valuable trade
secrets. Neither party shall attempt (i) to disclose, copy (except as
provided herein), display, loan, publish, transfer possession of, or
otherwise disseminate the Assigned Software or Documentation, in whole
or in part, to any third party without the prior written consent of
both parties unless subject to an obligation of confidentiality, or
(ii) to use the Assigned Software and Documentation except as allowed
in Section 2 of this Agreement. Each party shall limit use of and
access to the Assigned Software and Documentation to such of that
party's employees and agents as are involved in the utilization of the
Assigned Software internally within that party and who are obligated to
preserve the confidentiality thereof.
(b) TRADEMARKS AND SERVICEMARKS. EES does not grant to Company any
right to use any trademark, servicemark, tradename, logo, or other
proprietary xxxx of EES. Similarly, Company does not grant to EES any
right to use any trademark, servicemark, tradename, logo, or other
proprietary xxxx of Company.
(c) NOTIFICATION OF VIOLATION. Each party shall promptly report to the
other party any actual or suspected violation of this Section 3 and
shall take all reasonable and necessary further steps requested by the
other party to prevent any further violation or remedy any such
violation.
4. CONFIDENTIAL INFORMATION AND CONFIDENTIALITY.
(a) CONFIDENTIAL INFORMATION. As used in this Agreement, the term
"Confidential Information" shall mean all trade secrets or confidential
or proprietary information designated as such in writing by either EES
or Company (a "Disclosing Party") to the other (the "Recipient"),
whether by letter or by the use of an appropriate proprietary stamp or
legend, prior to or at the time any such trade secret or confidential
or proprietary information is disclosed by the Disclosing Party to the
Recipient. Notwithstanding the foregoing, information which is orally
or visually disclosed or is disclosed in writing without an appropriate
letter, proprietary stamp or legend shall constitute Confidential
Information if the Disclosing Party (i) so indicates at the time of
disclosure and (ii) within thirty (30) days after such disclosure,
delivers to the Recipient a written document or documents designating
or describing such Confidential Information and referencing the place
and date of such oral, visual or written disclosure and the names of
the employees or officers of the Recipient to whom such disclosure was
made. The provisions of this
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Section 4(a) notwithstanding, Confidential Information shall not
include any information to the extent it:
(i) is in the Recipient's possession at the time of
disclosure otherwise than as a result of the Recipient's breach of any
legal obligation;
(ii) becomes known to the Recipient through disclosure by
sources other than the Disclosing Party who are not legally prohibited
from disclosing such Confidential Information;
(iii) is independently developed by the Recipient without
reference to, use of, or reliance upon the Disclosing Party's
Confidential Information;
(iv) is generally available to the public through no fault
of the receiving party; or
(v) is required to be disclosed by the Recipient in the
opinion of its legal counsel to comply with applicable laws,
governmental regulations, or court order provided that the Recipient
provides prior written notice of such disclosure to the Disclosing
Party as soon as commercially practicable (so as to allow the
Disclosing Party to protect such Confidential Information) and takes
reasonable and lawful actions, as specified by and at the expense of
the Disclosing Party, to avoid and/or minimize the extent of such
disclosure.
Notwithstanding the foregoing, all Confidential Information in the Assigned
Software and Documentation delivered hereunder is Confidential Information of
both EES and Company.
(b) CONFIDENTIALITY. Each of EES and Company shall hold the other's
Confidential Information in confidence and shall not disclose the other
party's Confidential Information to any person except such of the
Recipient's employees and agents who have a need to know such
Confidential Information in the course of the performance of their
duties for the Recipient and who are bound to preserve the
confidentiality of the Confidential Information. The Recipient shall
use Confidential Information only for the purpose for which it was
disclosed and shall not otherwise use or exploit the Confidential
Information for its own benefit or the benefit of another without the
prior written consent of the Disclosing Party. Each of EES and Company
shall take appropriate action by instruction or agreement with its
employees and agents to satisfy its obligations under this Section
4(b). Each party shall promptly report to the other party any actual or
suspected violation of this Section 4(b) and shall take all reasonable
and necessary further steps requested by the other party to prevent any
further violation or remedy any such violation.
(c) RECORDS AND INSPECTION. Each of EES and Company shall maintain
appropriate records of the number and locations of the original and all
copies of the Confidential Information (including the Assigned Software
and Documentation) and, upon request,
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make the Confidential Information readily available at each party's
facilities for reasonable inspection by the other party or its agents.
5. DELIVERY AND INSTALLATION. Immediately after execution of the
Agreement, EES shall deliver to Company the number of copies of the Assigned
Software and the Documentation as set forth in Schedule A. Within thirty (30)
days of written notice from Company that Company desires EES to install the
Assigned Software, EES shall promptly install the Assigned Software at
Company's principal business address in Houston, Texas and verify the proper
operation thereof.
6. MAINTENANCE AND SUPPORT SERVICES.
(a) EES shall, at its expense, be obligated to provide Maintenance and
Support Services as set forth on Schedule C for the Assigned Software
delivered hereunder for a period of nine (9) months from the date
hereof. In the event that an initial firm commitment underwritten
public offering of shares of common stock of the Company registered
under the Securities Act of 1933, as amended (an "IPO"), has not been
consummated on or prior to nine (9) months following the Effective
Date, EES shall, at the option of the Company (as described below),
continue to provide to the Company the Maintenance and Support Services
for the Assigned Software delivered under Section 5 (and, if Company
exercises its option under Section 6(b), the Update) for an additional
six (6) month period at EES' actual cost of providing such Services
(including, but not limited to, an allocation of general and
administrative costs and expenses, employee and employee benefit costs
and expenses, and any out-of-pocket costs and expenses). Except as
provided in this Section 6(a) or in Section 6(c), EES shall not be
obligated to provide any Maintenance and Support Services with respect
to the Assigned Software, and shall not be obligated to revise or
update the Assigned Software in any manner whatsoever.
(b) At the end of the nine (9) month period (and at the end of the
fifteen (15) month period if extended) set forth in Section 6(a), EES
grants the Company an option to have EES deliver to the Company a copy
of the then current version of the Assigned Software and Documentation
in use at EES (the "Update") on an "AS IS" basis to Company for
Company's review and use subject to the restrictions of Section 2.
Company shall exercise such option by notifying EES in writing of
Company's intent to exercise such option at least two (2) weeks before
the end of the nine (9) month (or, if relevant, fifteen (15) month)
period. If the Company exercises this option, the Update shall be
included in the definition of Assigned Software. In addition, whenever
EES develops and places into production any improvements, corrections,
modifications, or changes in or to the Assigned Software during the
nine (9) month (or, if relevant, fifteen (15) month) period set forth
in Section 6(a), EES agrees to provide such improvements, corrections,
modifications, or changes on an "AS IS" basis to Company for Company's
review and use subject to the restrictions of Section 2.
(c) At the end of the the nine (9) month (or, if relevant, fifteen (15)
month) period set forth in Section 6(a) and continuing for up to three
years thereafter, EES shall offer to
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provide to Company, on those offered by EES to any similarly situated
non-affiliated software customer, the Maintenance and Support Services
set forth on Schedule C for the Assigned Software.
EES's obligations under Section 6 shall not extend to any modifications
or changes made to the Assigned Software made by the Company.
7. TRAINING SERVICES. EES shall provide reasonable training services for
employees of the Company (as designated by the Company) for a period of six (6)
months from the date hereof, but thereafter EES shall not be obligated to
provide any training services with respect to the Assigned Software.
8. LIMITED WARRANTY AND EXCLUSION OF WARRANTIES.
(a) LIMITED WARRANTY ON ASSIGNED SOFTWARE. For a period of one hundred
eighty (180) days from the date of delivery of the Assigned Software
under Section 5, EES warrants to Company that:
(i) The Assigned Software, when properly used by the Company
with the Third Party Software on the hardware currently used by EES and
specified in Schedule B, performs in compliance with the Specifications
for the number of residential customers currently serviced by EES. EES
does not warrant that the operation of the Assigned Software will be
uninterrupted or error-free except as expressly provided in the
Specifications, that the Assigned Software when used with the Third
Party Software will be functional for an unlimited number of customers
or for all states or jurisdictions, that the Assigned Software will
achieve the results desired by the Company, or that Company or EES
employees or agents will be error-free in their use or application of
the Assigned Software. In addition, EES warrants that the Documentation
and the documentation available from third party software vendors is
sufficient to enable a reasonably skilled software engineer reasonably
experienced in risk management software to support, maintain and modify
the Assigned Software.
(ii) No portion of the Assigned Software as delivered shall
contain any "Traps" or, to EES's knowledge, "Viruses." "Virus" means a
set of computer instructions which are self-replicating or
self-propagating and are designed to contaminate the Assigned Software,
consume computer resources, or modify, destroy, record or transmit data
or programming without the intent or permission of the user. "Traps"
means any software routines or hardware components designed by EES to
permit unauthorized access, to disable or erase software, hardware or
data, or to perform any other such actions which will have the effect
of materially impeding the normal and expected operation of the
Assigned Software. EES further warrants that prior to the delivery of
any Assigned Software to Company under Sections 5, EES shall use
commercially reasonable efforts to detect and screen out any Virus
through the use of the current virus detection programs specified by
Company in advance of the delivery of the Assigned Software under
Sections 5.
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(iii) To EES's knowledge, with respect to any year 2000
aspects of the Assigned Software itself, that when the Assigned
Software is properly operated on hardware that is also year 2000
compliant and used in combination with other data and software that are
year 2000 compliant, the Assigned Software shall (a) correctly
recognize and process (including calculating, comparing, and
sequencing) data into and between the 20th and 21st Centuries) and all
date sorting by the Assigned Software that includes a "year category"
shall be done based on the four-digit year format code; (b) include
calendar year 2000 date conversion and compatibility capabilities,
including date data value calculations and user interface date data
values that reflect the century; (c) include the indication of the
correct century in all date related user interface functions and data
fields that indicate the calendar year; and (d) not adversely be
affected by the change of the millennium and shall continue to perform
in accordance with the Specifications in this Agreement.
(iv) To EES's knowledge, the Company's internal use of the
Assigned Software in combination with the Third Party Software does not
infringe the intellectual property rights of any third party.
(b) UPDATE. For purposes of Section 8(a), the Assigned Software shall
not include the Update, as the Update will be provided on an AS IS
basis. No warranties, express or implied are made with respect to the
Update, and none of the warranties set forth in Section (a) are made
with respect to the Update.
(c) SOLE AND EXCLUSIVE REMEDY FOR BREACH OF WARRANTY. The Company's
sole and exclusive remedy for the breach of any of the warranties made
herein is follows: Without cost to Company, EES agrees to correct
promptly or otherwise remedy (by replacing or modifying the Assigned
Software so long as the Assigned Software thereafter is essentially
unchanged) any failure of the Assigned Software to meet the warranties
set forth in Section 8(a) provided that the failure occurs during the
foregoing warranty period and is reported no later than fourteen (14)
days after the end of the warranty period. Any claims made after this
time period shall not be considered warranty claims for the purposes of
this Agreement. In order to obtain warranty coverage pursuant to this
Agreement, Company must provide EES with written notice of the warranty
claim, which notice must contain as much of the following as possible
using commercially reasonable efforts: (i) a description of the failure
to perform, (ii) a description of the operating conditions, including
the specific hardware and software configuration, under which the
failure to perform occurred, and (iii) a representative sample of
inputs for repeating and analyzing the failure to perform. THE
FOREGOING STATES COMPANY'S SOLE AND EXCLUSIVE REMEDY, AND EES' SOLE AND
EXCLUSIVE LIABILITY FOR, ANY BREACH OF WARRANTY, DEFECT, FAILURE OR
OTHER PROBLEM WITH THE ASSIGNED SOFTWARE WHATSOEVER.
(c) EXCLUSIONS FROM WARRANTY COVERAGE. The provisions of Section 8(a)
notwithstanding, EES shall have no obligation to make corrections,
repairs, or replacements which result, in whole or in part, from (i)
catastrophe, fault or negligence of Company, (ii) use of the Assigned
Software in a manner for which it was not designed,
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(iii) modifications of the Assigned Software by the Company or anyone
other than EES or its employees, agents and consultants, or (iv) causes
external to the Assigned Software such as, but not limited to, power
failure or electric power surges; provided, however, with respect to
such exclusions, EES agrees to use reasonable efforts to assist Company
in solving the failure of the Software to meet the warranties set forth
in Section 8(a) so long as EES has personnel available to assist
Company and Company pays EES for the time of such personnel at a
reasonable fee to be set by EES.
(e) DISCLAIMER OF OTHER WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN
THIS SECTION 8, EES DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS OR
IMPLIED, WRITTEN OR ORAL, STATUTORY OR OTHERWISE, WITH RESPECT TO THE
ASSIGNED SOFTWARE AND DOCUMENTATION, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
9. INDEMNIFICATION.
(a) INDEMNIFICATION. If notified promptly in writing of any action (and
all prior related claims) brought against Company that arises out of or
is based on a claim that the Assigned Software or Documentation
infringes any United States patent, copyright or other intellectual
property right of another (other than claims made by licensees of
Company for which Company agrees to indemnify EES as set forth below),
EES shall defend, indemnify and hold harmless the Company in such
action at its expense and pay all costs (including reasonable
attorneys' fees) and damages finally awarded in the action or
settlement which are attributable to such claim, except as provided in
Section 10 hereof. EES shall have sole control of the defense of any
such action and all negotiations for its settlement or compromise.
Company shall cooperate fully at its expense (except that EES shall pay
or reimburse Company for all reasonable out-of-pocket expenses,
including travel, lodging, meal, and photocopy expenses reasonably
incurred by Company at EES' request) with EES in the defense,
settlement or compromise of any such action. EES shall not be liable to
Company on account of any amounts paid in settlement if such settlement
is effected without EES's consent. Except in the case of EES'
obligations under this Section 9, if notified promptly in writing,
Company shall indemnify, defend, and hold harmless EES against any
claim, expense, judgment, damage, or loss (including reasonable
attorneys' fees) arising from any claim against EES by a third party
which arises out of or in any way relates to (i) use by Company of the
Assigned Software or Documentation; or (ii) any transfer, license or
assignment regarding the Assigned Software or Documentation granted by
Company except resulting from a breach of the warranty made in Section
8(a)(iv). The failure of the party seeking indemnity to promptly notify
the other party of any action (or other related claims) shall not
relieve the other party from any obligation which such other party
would otherwise have pursuant to this Section 9 except to the extent
that the other party has been materially prejudiced by such failure to
promptly notify. The party defending an action will not settle it in a
way that limits the other party's beneficial use without the other
party's consent.
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In the event that a final injunction is obtained against
Company's use of the Assigned Software or Documentation by reason of
the inability of EES to grant the rights granted in Section 2,
infringement or misappropriation by the Assigned Software or
Documentation of a United States intellectual property right or, if in
EES' reasonable opinion the Assigned Software or Documentation is
likely to become the subject of a successful claim of such infringement
or misappropriation, EES shall, at its expense, either (i) procure for
Company the right to continue using the Assigned Software and
Documentation as provided in this Agreement or (ii) replace or modify
the Assigned Software or Documentation so that it or they become
non-infringing or not misappropriating (so long as the functionality of
the Assigned Software is essentially unchanged).
(b) EXCLUSIONS FROM INDEMNIFICATION. EES shall not have any liability
to Company under this Section 9 to the extent that any infringement or
claim thereof is based upon (i) use of the Assigned Software in
combination with equipment or software not supplied hereunder and not
contemplated to be used with the Assigned Software where the Assigned
Software would not itself be infringing, (ii) use of the Assigned
Software with an application or in an environment for which it was not
designed or contemplated under this Agreement, (iii) modifications of
the Assigned Software or Documentation by anyone other than EES or its
employees, agents and consultants, or (iv) any claims of infringement
of any patent, copyright or other intellectual property right in which
Company or any affiliate of Company has an interest or license.
(c) SOLE AND EXCLUSIVE REMEDY. The foregoing states EES' entire
liability, and Company's sole and exclusive remedy, with respect to
infringement or alleged infringement of patents, copyrights, and other
intellectual property rights by the Assigned Software, the
Documentation, or the use thereof.
10. LIMITATION OF LIABILITY. IN NO EVENT SHALL EES BE LIABLE TO COMPANY FOR
ANY CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES BASED UPON LIABILITY FOR BREACH
OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE, STRICT LIABILITY, TORT OR ANY
LIABILITY UNDER ANY OTHER LEGAL THEORY. SUCH EXCLUDED DAMAGES INCLUDE, BUT ARE
NOT LIMITED TO, LOST PROFITS, LOSS OF DATA, OR LOSS OF USE DAMAGES, ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE CREATION OR SUPPLYING OF THE ASSIGNED
SOFTWARE AND DOCUMENTATION, EVEN IF EES WAS AWARE OF, NOTIFIED OF OR ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL COMPANY BE LIABLE TO EES FOR
ANY CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES BASED UPON LIABILITY FOR BREACH
OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE, STRICT LIABILITY, TORT OR ANY
LIABILITY UNDER ANY OTHER LEGAL THEORY. SUCH EXCLUDED DAMAGES INCLUDE, BUT ARE
NOT LIMITED TO, LOST PROFITS, EVEN IF COMPANY WAS AWARE OF, NOTIFIED OF OR
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
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11. TERMINATION.
(a) TERMINATION BY EES. EES may terminate this Agreement and EES'
obligations to Company hereunder if Company materially breaches its
obligations under Sections 2, 3, 4, 9 or 14 of this Agreement by
following the procedure specified in the next sentence. Prior to any
such termination, EES shall provide written notice to Company of the
material breach in sufficient detail to allow the Company to cure and
if Company does not substantially cure the breach within sixty (60)
days of such written notice, then EES may terminate this Agreement, and
EES' obligations hereunder by notice to the Company. Such termination
shall not prejudice EES' right to damages or any other remedy available
at law or equity.
(b) TERMINATION BY COMPANY. Company may terminate this Agreement at any
time for convenience. Upon such termination, Company shall immediately
(i) stop all use of the Assigned Software and Documentation, (ii)
return to EES (or, at EES's option, destroy and certify in writing to
EES that it has destroyed) the original and all copies of EES
Confidential Information including, but not limited to, the original
and all copies of the Assigned Software and Documentation, including
archival copies, compilations, translations, partial copies, updates
and modifications, if any, and (iii) delete all copies of the Assigned
Software from its computer libraries or storage facilities.
(c) SURVIVAL. The provisions of Sections 2, 3, 4, 9, 10 and 13
hereof shall survive the termination of this Agreement for any reason.
12. NOTICES.
(a) Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally by hand or by
recognized overnight courier, telecopied or mailed (by registered or
certified mail, postage prepaid) as follows:
(i) If to the Company, then to:
EMW Energy Services Corp.
c/o Enron Energy Services, LLC
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
(ii) If to EES, then to:
Enron Energy Services, LLC
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
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(b) Each such notice or other communication shall be effective (i) if
given by telecopier, when such telecopy is transmitted to the
telecopier number specified in Section 12(a) (with confirmation of
transmission), or (ii) if given by any other means, when delivered at
the address specified in Section 12(a). Any party by notice given in
accordance with this Section 12 to the other party may designate
another address (or telecopier number) or person for receipt of notices
hereunder. Notices by a party may be given by counsel to such party.
13. GOVERNING LAW; ARBITRATION.
(a) THIS AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND
ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, OTHER THAN THE
CONFLICT OF LAWS RULES THEREOF.
(b) Any and all claims, counterclaims, demands, cause of action,
disputes, controversies, and other matters in question arising under
this Agreement or the alleged breach of any provision hereof, (all of
which are referred to herein as "Disputed Claims"), whether such
Disputed Claims arise at law or in equity, under State or federal law,
for damages or any other relief, shall be resolved by binding
arbitration in the manner set forth on SCHEDULE D.
14. ASSIGNMENT. This Agreement and all of its provisions, rights and
obligations shall be binding upon and shall inure to the benefit of the
parties hereto and their respective permitted successors and assigns. Except
as provided herein, either party may assign this Agreement without the
consent of the other, except that EES may not assign this Agreement for the
first eighteen (18) months of its term to an entity engaged in the
Residential Business portion of the Field of Use without the consent of
Company. The restrictions on the Assigned Software set forth herein,
including those in Section 2, 3 and 4, shall not be affected, altered or
changed by any assignment or transfer of this Agreement and no assignment or
transfer of this Agreement shall conflict with the provisions of Section 2 or
be effective to the extent that it conflicts with Section 2. In addition, the
indemnification obligations contained herein are personal to the parties and
any indemnification obligation owed to a party assigning this Agreement shall
terminate upon assignment of this Agreement.
15. GENERAL.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between EES and Company with respect to the subject matter hereof and
supersedes all prior agreements and understandings, whether oral or
written, between the parties with respect to the subject matter hereof.
EES makes no representations to Company except as expressly set forth
herein.
(b) FORCE MAJEURE. Neither party shall be liable for a delay in the
performance of its obligations and responsibilities under this
Agreement due to causes beyond its control,
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including, but not limited to, failures or delays in transportation or
communication, failures or substitutions of equipment, labor disputes,
accidents, shortages of labor, fuel, raw materials or equipment or
technical failures, provided that the delayed party has taken
reasonable measures to notify the other, in writing, of the delay. The
time for completion of any obligation to which this provision applies
shall be extended for a period equivalent to the delay; provided,
however, that no such extension of performance shall require EES to
perform any obligation under this Agreement beyond the date or dates
specified in this Agreement.
(c) EXPORT LAWS. Both parties shall comply with all export restrictions
imposed by the United States government from time-to-time which apply
to the Assigned Software and Documentation. Neither party shall export
or re-export the Assigned Software or Documentation without first
obtaining the necessary license or approvals from the appropriate
government agency or department which may require such approval. Each
party shall obtain and pay for all licenses and approvals required and
any related charges, and shall indemnify, defend, and hold harmless the
other party for any claim brought against that party based upon the
exporting party's export or re-export activities in relation to the
Assigned Software or Documentation.
(d) WAIVER. This Agreement may be amended, superseded, canceled,
renewed or extended only by a written instrument signed by the parties
hereto. The provisions hereof may only be waived in writing by the
parties hereto. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof,
nor shall any waiver on the part of any party of any such right, power
or privilege, nor any single or partial exercise of any such right,
power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege. Except as
otherwise provided herein and subject to Sections 10 and 13, the rights
and remedies herein provided are cumulative and are not exclusive of
any rights or remedies that any party may otherwise have at law or in
equity.
(e) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall continue in full
force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term,
provision, covenant or restriction is invalid, void or unenforceable,
the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely
as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the fullest extent possible.
(f) HEADINGS. Section headings are for reference purposes only and
shall not control or alter the meaning of this Agreement as set forth
in the text.
(g) RELATIONSHIP OF PARTIES. In the performance of its services
hereunder, EES will at all times be an independent contractor, and this
Agreement shall not constitute, nor be
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deemed to constitute, either party as an employee, agent, partner or
joint venturer of the other.
(h) TAXES. Both Parties agree to use reasonable efforts to administer
this Agreement in accordance with their intent to minimize any Taxes
applicable to this Agreement or any agreement associated herewith.
Either Party may provide to the other a certificate of exemption or
other reasonably satisfactory evidence of exemption from or right to
reduction of any Taxes otherwise due. Both Parties agree to cooperate
in obtaining any exemption or reduction in Taxes upon request by the
other. However, EES will proceed on the assumption that any applicable
Taxes are due unless and until Customer presents EES satisfactory proof
that Customer is entitled to any claimed exemption or reduction in
Taxes. Upon presentation of such proof, no retroactive adjustments will
be made, but EES will assign to Customer, to the extent assignable, any
claims for refund EES has with respect to any prior payments of Taxes.
None of the amounts payable to EES under this Agreement include any new
or existing Taxes, and Customer shall be responsible for, pay and/or
reimburse EES for all Taxes and other charges imposed or levied by any
taxing authority on or related to any commodities, services, work,
activities, materials, property and payments provided for, delivered,
purchased, sold, consumed, fabricated, used or leased under or with
respect to this Agreement, including any of the same provided, owned or
leased by Customer and/or provided by Customer to EES, and with respect
to any other agreement related hereto or entered into as part of or in
implementation of this Agreement and any activities contemplated hereby
or thereby, but not those in the nature of Taxes on EES
(i) COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one
and the same Agreement. All signatures need not be on the same
counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year indicated above.
ENRON ENERGY SERVICES, LLC EMW ENERGY SERVICES CORP.
By: /s/ XXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXXXX
--------------------------------- -------------------------------
Print: Xxxx X. Xxxxxx Print: Xxxxxx X. Xxxxxxxx
------------------------------ ----------------------------
Title: Sr. Vice President Title: Vice President
------------------------------ ----------------------------
Date: January 6, 2000 Date: January 6, 2000
------------------------------- ------------------------------
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SCHEDULE A
1. ASSIGNED SOFTWARE:
Forecaster
Retail Gas System
Electric Risk Book (includes Deal Tracker, Intra-Month Book)
Rate Engine (includes Load Library, Load Wizard)
PowerMod/BatchMod pricing model
GasMod pricing model
2. THIRD PARTY SOFTWARE
Microsoft Office 97 Suite (including Access 97 and Excel 97)
SQL Server7.0
MDMA
STAT
3. DATABASES
WeatherBank
TeleRate
XXX Xxxxx Curve Database
Curve Management System Database
Load Wizard Database
Third party residential data from utilities (via internet or other
public source)
Third party residential profile data, to the extent available, from
source such as Regional Economic Research
Dept. of Energy Model database model (internet)
4. DESCRIPTION OF DOCUMENTATION
Specifications attached as Schedule B
Rate Engine User Manual
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SCHEDULE B
SPECIFICATIONS
1. Forecaster and Associated Software: Present State - System Requirements
Specification
2. Rate Engine and Associated Software: Present State - System
Requirements Specification
3. Electric Risk Book and Associated Software: Present State - System
Requirements Specification
4. Retail Gas System and Associated Software: Present State - System
Requirements Specification
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SCHEDULE C
MAINTENANCE AND SUPPORT SERVICES
EMW Energy Services, Inc. - SSAEMW Software Support Agreement
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SCHEDULE D
ARBITRATION PROCEDURES
(a) The parties to this Agreement agree that any dispute, controversy
or claim that may arise between or among them in connection with or otherwise
relating to this Agreement or the application, implementation, validity or
breach of this Agreement or any provision of this Agreement (including, without
limitation, claims based on contract, tort or statute), shall be finally,
conclusively and exclusively settled by binding arbitration in Wilmington,
Delaware in accordance with the commercial arbitration rules (the "Rules") of
the American Arbitration Association or any successor thereto ("AAA") then in
effect. The parties to this Agreement hereby expressly waive their right to
seek remedies in court, including the right to trial by jury, with respect to
any matter subject to arbitration pursuant to this Agreement. Any party to this
Agreement may bring an action, including, without limitation, a summary or
expedited proceeding in any court having jurisdiction, to compel arbitration of
any dispute, controversy or claim to which the provisions hereof apply. Except
with respect to the following provisions (the "Special Provisions") which shall
apply with respect to any arbitration pursuant hereto, the initiation and
conduct of arbitration shall be as set forth in the rules, which rules are
incorporated in this Agreement by reference with the same effect as if they
were set forth in this Agreement.
(b) In the event of any inconsistency between the Rules and the Special
Provisions, the Special Provisions shall control. Any references in the Rules
to a sole arbitrator shall be deemed to refer to the tribunal of arbitrators
provided for under paragraph (d) hereof.
(c) The arbitration shall be administered by the AAA. If the AAA is
unable or legally precluded from administering the arbitration, then the
parties shall agree upon an alternative arbitration organization, provided
that, if the parties cannot agree, such organization shall be selected by the
Chief Judge of the United States District Court for the District which includes
Wilmington, Delaware.
(d) The arbitration shall be conducted by a tribunal of three (3)
arbitrators. Within ten (10) days after arbitration is initiated pursuant to
the Rules, the initiating party or parties (the "Claimant") shall send written
notice to the other party or parties (the "Respondent"), with a copy to the
office of the AAA having responsibility for Wilmington, Delaware, designating
the first arbitrator (who shall not be a representative or agent of any party
(i.e., shall be impartial and independent) but may or may not be an AAA panel
member and, in any case, shall be reasonably believed by the Claimant to
possess the requisite experience, education and expertise in respect of the
matters to which the claim relates to enable such person to competently perform
arbitral duties). With ten (10) days after receipt of such notice, the
Respondent shall send written notice to the Claimant, with a copy to the office
of the AAA having responsibility for Wilmington, Delaware and to the first
arbitrator, designating the second arbitrator (who shall not be a
representative or agent of any party (i.e., shall be impartial and independent)
but may or may not be an AAA panel member and, in any case, shall be reasonably
believed by the Respondent to possess the requisite experience, education and
expertise in respect of the matters to which the claim relates to enable such
person to competently perform arbitral duties). Within
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ten (10) days after such notice from the Respondent is received by the
Claimant, the two designated arbitrators shall select any mutually agreeable
third arbitrator. If the respective designated arbitrators of the Respondent
and the Claimant cannot so agree within said ten (10) day period, then the
third arbitrator will be determined pursuant to the Rules. Prior to
commencement of the arbitration proceeding, each arbitrator shall have
provided the parties with a resume outlining such arbitrator's background and
qualifications and shall confirm that such arbitrator is not and has not been
a representative or agent of any of the parties. If any arbitrator shall die,
fail to act, resign, become disqualified or otherwise cease to act, then the
arbitration proceeding shall be delayed for fifteen (15) days and the party
by or on behalf of whom such arbitrator was appointed shall be entitled to
appoint a substitute arbitrator (meeting the qualifications set forth in this
paragraph (d) within such fifteen (15) day period; provided, however, that if
the party by or on behalf of whom such arbitrator was appointed shall fail to
appoint a substitute arbitrator within such fifteen (15) day period, the
substitute arbitrator shall be a neutral arbitrator appointed by the AAA
arbitrator within fifteen (15) days thereafter.
(e) All arbitration hearings shall be commenced within ninety (90) days
after arbitration is initiated pursuant to the Rules, unless, upon a showing of
good cause by a party to the arbitration, the tribunal of arbitrators permits
the extension of the commencement of such hearing; provided, however, that any
such extension shall not be longer than sixty (60) days.
(f) All claims presented for arbitration shall be particularly
identified and the parties to the arbitration shall each prepare a statement of
their position with recommended courses of action. These statements of position
and recommended courses of action shall be submitted to the tribunal of
arbitrators chosen as provided hereinabove for binding decision. The tribunal
of arbitrators shall not be empowered to make decisions beyond the scope of the
position papers.
(g) The arbitration proceeding will be governed by the substantive
laws of the State of Delaware and will be conducted in accordance with such
procedures as shall be fixed for such purpose by the tribunal of arbitrators,
except that (i) discovery in connection with any arbitration proceeding shall
be conducted in accordance with the Federal Rules of Civil Procedure and
applicable case law, (ii) the tribunal of arbitrators shall have the power to
compel discovery, and (iii) unless the parties otherwise agree and except as
may be provided herein, the arbitration shall be governed by the Federal
Arbitration Act, 9 U.S. Sections 1-16, to the exclusion of any provision of
state law or other applicable law or procedure inconsistent therewith or
which would produce a different result. The parties shall preserve their
right to assert and to avail themselves of the attorney-client and
attorney-work product privileges, and any other privileges to which they may
be entitled pursuant to applicable law. No party to the arbitration or any
arbitrator may compel or require mediation and/or settlement conferences
without the prior written consent of all such parties.
(h) The tribunal of arbitrators shall make an arbitration award as soon
as possible after the later of the close of evidence or the submission of final
briefs, and in all cases the award shall be made not later than thirty (30)
days following submission of the matter. The finding and decision of a majority
of the arbitrators shall be final and shall be binding upon the parties.
Judgment upon the arbitration award or decision may be entered in any court
having jurisdiction thereof or application may be made to any such court for a
judicial acceptance of the
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award and an order of enforcement, as the case may be. The tribunal of
arbitrators shall have the authority to assess liability for pre-award and
post-award interest on the claims, attorneys' fees, expert witness fees and
all other expenses of arbitration as such arbitrators shall deem appropriate.
Unless otherwise agreed by the parties, the arbitration award shall include
findings of fact and conclusions of law. IT IS EXPRESSLY AGREED THAT
NOTWITHSTANDING ANY OTHER PROVISION HEREIN TO THE CONTRARY, THE ARBITRATORS
SHALL HAVE ABSOLUTELY NO AUTHORITY TO AWARD CONSEQUENTIAL DAMAGES (SUCH AS
LOSS OF PROFIT), TREBLE, EXEMPLARY OR PUNITIVE DAMAGES OF ANY TYPE UNDER ANY
CIRCUMSTANCES REGARDLESS OF WHETHER SUCH DAMAGES MAY BE AVAILABLE UNDER
DELAWARE LAW, THE LAW OF ANY OTHER STATE, OR FEDERAL LAW OR UNDER ANY RULES
OF ARBITRATION.
(i) Notwithstanding any provision herein to the contrary, nothing
herein shall be construed to require arbitration of a claim or dispute
brought by a person who is not a party to this Agreement, or affect the
ability of any party to interplead or otherwise join another party in a
proceeding brought by a person who is not a party to this Agreement.
(j) EACH PARTY UNDERSTANDS THAT THIS AGREEMENT CONTAINS AN AGREEMENT
TO ARBITRATE WITH RESPECT TO ANY DISPUTE OR NEED OF INTERPRETATION OF THIS
AGREEMENT. AFTER SIGNING THIS AGREEMENT, EACH PARTY UNDERSTANDS THAT IT WILL
NOT BE ABLE TO BRING A LAWSUIT GOVERNING ANY DISPUTE THAT MAY ARISE WHICH IS
COVERED BY THE ARBITRATION PROVISION, EXCEPT TO COMPEL ARBITRATION OR SEEK
INJUNCTIVE RELIEF. INSTEAD, EACH PARTY AGREES TO SUBMIT ANY SUCH DISPUTE TO
ARBITRATION.
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