<PAGE>

                               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).

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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.


                                      -2-
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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 sue 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


                                      -3-
<PAGE>

         Documentation other than as prohibited in this Agreement without the
         consent of and without accounting to the other party.

         (d) EES covenants not to sue 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 mark of EES. Similarly, Company does not grant to EES any
         right to use any trademark, servicemark, tradename, logo, or other
         proprietary mark 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


                                      -4-
<PAGE>

         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,


                                      -5-
<PAGE>

         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


                                      -6-
<PAGE>

         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.


                                      -7-
<PAGE>

                  (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,


                                      -8-
<PAGE>

         (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.


                                      -9-
<PAGE>

                  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.


                                     -10-
<PAGE>

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
                          1400 Smith Street
                          Houston, Texas 77002
                          Attention:  General Counsel
                          Facsimile:  (713) 646-2379

                 (ii)     If to EES, then to:

                          Enron Energy Services, LLC
                          1400 Smith Street
                          Houston, Texas 77002
                          Attention:  General Counsel
                          Facsimile:  (713) 646-2379


                                     -11-
<PAGE>

         (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,


                                      -12-
<PAGE>

         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


                                      -13-
<PAGE>

         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/ MARK S. MULLER              By:      /s/ JIMMIE L. WILLIAMS
   ---------------------------------        -------------------------------

Print:   Mark S. Muller                  Print:   Jimmie L. Williams
      ------------------------------           ----------------------------

Title:   Sr. Vice President              Title:   Vice President
      ------------------------------           ----------------------------

Date:    January 6, 2000                 Date:    January 6, 2000
     -------------------------------          ------------------------------


                                      -14-
<PAGE>

                                   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
         ENA Price 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


                                     -15-
<PAGE>

                                   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


                                     -16-
<PAGE>

                                   SCHEDULE C

                        MAINTENANCE AND SUPPORT SERVICES

         EMW Energy Services, Inc. - SSAEMW Software Support Agreement


                                     -17-
<PAGE>

                                   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


                                     -18-
<PAGE>

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


                                     -19-
<PAGE>

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.


                                     -20-