EXHIBIT
10.82


 


MANAGED
SERVICES AGREEMENT


 


This
Managed Services Agreement (this “Agreement”)
is entered into by and between Delinea Corporation, a Delaware corporation (“Delinea”), and the company
identified as “Customer” on the signature page (“Customer”). 
Delinea and Customer shall be referred to in this Agreement individually
as a “Party” and
collectively as “Parties.”


 


RECITAL


 


Customer
wishes to engage Delinea to provide certain managed services as described in
this Agreement, and Delinea wishes to provide those services, all upon and
subject to the terms and provisions of this Agreement.


 


TERMS AND CONDITIONS


 


In
consideration of the covenants and mutual promises contained in this Agreement
and other good and valuable consideration, the Parties agree as follows:


 


1.                                       Services.  Delinea agrees to provide
certain managed services (the “Services”)
to Customer from time to time during the term of this Agreement.  The Services shall consist of projects
requested by Customer and agreed to by Delinea, as evidenced by a written
document (a “Work Order”)
prepared and submitted by Delinea to Customer, describing in reasonable detail
the specific services requested of Delinea. 
When executed by both Parties, each Work Order shall constitute a
separate legally binding agreement between the Parties regarding the subject
matter addressed in the Work Order. 
Work Orders may only be amended by a written change order signed by both
Parties.  In the event of a conflict
between any terms of this Agreement and a Work Order, the terms of the Work
Order shall prevail.


 


2.                                       Fees; Payment. Each Work Order shall specify the fees for
the Services covered by the Work Order, which may include fees of third party
vendors or subcontractors engaged by Delinea to provide goods or services on
Customer’s behalf (collectively, “Subcontractors”).  Unless otherwise specified in a particular
Work Order, Delinea shall invoice Customer for the Services promptly following
the close of each calendar month.  Each
invoice shall include a description of all the Services covered by the invoice.


 


In
addition to payment of fees, Customer shall reimburse Delinea and its
Subcontractors for reasonable travel, lodging, meals, long distance telephone
charges and similar out-of-pocket expenses incurred by Delinea or its
Subcontractors on Customer’s behalf, upon Customer’s receipt of reasonable
receipts or other supporting documentation. 
Customer is also solely responsible for payment of any taxes (including
all federal, state or local sales or use taxes, intangible taxes and property
taxes) resulting from or related to this Agreement or the Services provided,
exclusive of taxes based on Delinea’s income. 
Delinea reserves the right to have Customer pay to Delinea any taxes for
which Customer is responsible, for remittance to the appropriate
authority.  Customer agrees to hold
Delinea harmless from all claims and liability arising from its failure to
report or pay any such taxes.


 


Delinea
will present its invoices for all fees and expenses incurred under this Agreement
to such person as Customer shall designate from time to time.  All invoiced amounts shall be due and
payable within 15 days after invoice date via wire transfer per the
instructions provided on an applicable Work Order, unless an alternative form
of payment is approved by Delinea.  Any
amounts not timely paid shall, at Delinea’s option, bear interest beginning on
the 31st day after invoice date until paid at a rate of 11⁄2% per
month or the highest non-usurious rate allowed under applicable law, whichever
is lower.


 


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3.                                       Quality and Customer Satisfaction.


 


A.                                   Quality of the Services; Warranty. 
Delinea represents and warrants to Customer that Delinea shall perform
the Services in a professional, workmanlike and safe manner, and shall at all
times use its commercially reasonable best efforts to achieve the goals and
objectives, and meet the specifications and performance criteria, stated in
each Work Order.


 


B.                                     Remedies in the Event of Breach.  In
the event of any breach of the commitments made in the immediately preceding
paragraph, and as Customer’s sole and exclusive remedy for such breach, Delinea
will use its commercially reasonable best efforts to cure any demonstrable
breach in respect of Services provided pursuant to a given Work Order as soon
as reasonably practicable after receiving written notice of the breach from
Customer, provided Customer gives Delinea written notice of the breach within
90 days after completion or delivery of such Services.


 


C.                                     Warranty Disclaimer.  DELINEA DISCLAIMS ANY WARRANTY WITH RESPECT TO THE SERVICES
EXCEPT AS EXPRESSLY PROVIDED IN SECTION 3.A ABOVE, INCLUDING
WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A
PARTICULAR PURPOSE.


 


D.                                    Customer Satisfaction Review. 
Representatives designated by Delinea and Customer shall convene
semi-annually, or as often as is requested by either Party from time to time,
at a mutually agreeable location to discuss (i) Delinea’s performance in its
provision of the Services, (ii) recommendations and suggestions as to how the
Parties can enhance their relationship, and (iii) any disputes or disagreements
relating to the Services or fees.


 


4.                                       Supervisory Employees.  If
appropriate given the magnitude of the Services provided to Customer from time
to time, Customer and Delinea will each designate one or more individuals to
manage and oversee the Services and the Parties’ working relationship.  If requested by Delinea, Customer’s designated
individual(s) will form a “guidance committee” for the purpose of prioritizing
Delinea task assignments on a weekly basis, or with such other frequency as the
Parties shall mutually agree.  Delinea
will provide status reports regarding pending task assignments to the
designated individual(s) from time to time as requested.  Jim Rammage, Delinea Manager, will initially
provide management oversight for the Delinea Services.  Cap Rock will have the right to approve a
Delinea change in management oversight through March 2004.  Cap Rock’s approval shall not be
unreasonably withheld.


 


5.                                       Location of Provision of Services. 
Delinea will provide the Services covered by a given Work Order at the
facilities of either Customer or Delinea, as specified in the Work Order.  If the Services are to be provided at
Customer’s facilities, Customer will provide reasonable office space in a
location suitable for the provision of the Services and will supply Delinea
with adequate support to provide the Services, including without limitation
copiers, telephones, and such other goods and services as are reasonably
required or specified in the Work Order.


 


6.                                       Procurement.  If
a Work Order contemplates the purchase of hardware, software or other items for
Customer, Delinea or any Subcontractor, or if Delinea or a Subcontractor
requires any such item(s) in order to facilitate the efficient delivery of the
Services, Delinea shall notify Customer in writing (which notice may be
contained in the applicable Work Order), including in the notification any
relevant specifications or other information regarding the required
item(s).  Customer shall notify Delinea
either that Delinea should procure the item(s), or that Customer will procure
such item(s) itself.  If Customer is
procuring the item(s) and Delinea has indicated in its notification a target
date by which it requires the item(s), Customer shall make reasonable efforts
to meet the target date.  Delinea will
provide reasonable assistance and recommendations as appropriate or as requested
by Customer.  Any such item(s) that are
not consumed during the provision of the Services shall remain the property of
Customer unless the applicable Work Order provides otherwise.


 


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7.                                       Employee Matters.


 


A.                                   Customer Employee Policies. 
Delinea warrants that all persons who perform all or part of the
Services are legally authorized to perform the Services, and that their
employment status with Delinea or a Subcontractor, if applicable, complies with
all residency, immigration, visa, or similar requirements of federal, state or
local laws or regulations.  All Delinea
and Subcontractor personnel performing Services on Customer’s premises shall
comply with reasonable Customer safety rules and other rules adopted by
Customer for its own employees.


 


B.                                     Non-Solicitation. 
Each Party agrees that during the term of this Agreement, and for a
period of one year from the date of the termination or expiration of this
Agreement, such Party will not, without the prior written consent of the other
Party, directly or indirectly solicit, request or advise any employee of the
other Party (and, in the case of Customer, any employee of any Subcontractor)
to leave the employ of the other Party or Subcontractor, nor will such Party in
any way whatsoever enter into a business or professional relationship with any
such employee.  Delinea will use its
commercially reasonable best efforts to secure substantially similar
commitments with respect to Customer employees from all Subcontractors
providing Services.


 


8.                                       Ownership of Work Product. 
All copyrights, patents, trade secrets, or other intellectual property
rights associated with any ideas, concepts, techniques, inventions, processes,
or works of authorship developed, created or improved by either Party or a
Subcontractor pursuant to and during the term of this Agreement (collectively,
the “Work Product”) shall
belong exclusively to such Party or Subcontractor, unless otherwise specified
in a particular Work Order.  Delinea
hereby grants to Customer, without any requirement of further consideration, a
non-exclusive, perpetual license, without right of assignment or sub-license,
to use Delinea Work Product.  Upon
Customer’s request, Delinea shall take such further actions, including
execution and delivery of mutually acceptable license agreements, as may be
appropriate to give full and proper effect to such license.  Delinea will use its commercially reasonable
best efforts to secure substantially similar commitments with respect to Work
Product from all Subcontractors providing Services.


 


9.                                       First Look. 
Delinea will be the preferred provider for outsourced IT services
involving but not limited to, web development, web consulting, web hosting,
application development, application maintenance, application hosting, server
management, network services, security services, desktop services, and business
process services.  As such Client will
allow Delinea a first-look bid opportunity for services that Client is
considering awarding to another vendor.


 


10.                                 Confidentiality.  In
connection with the Services to be provided by Delinea under this Agreement,
each Party expects to furnish to the other Party certain “Confidential
Information” as defined below, and does not wish to make such Confidential
Information public or common knowledge or have it disclosed to any third party
or used for any purpose other than as described in this Agreement.  The term “Confidential
Information” shall mean (i) any information, technology,
engineering, concept, software, idea, know-how, process, technique, program,
design, formula, business plan, work product or work-in-process; (ii) any
technical, financial, geological, geophysical, seismic, production or sales
information; (iii) any information regarding suppliers, customers, employees,
investors or other funding sources, prospective acquisitions or investments,
business opportunities, or business operations, and any information regarding
any such person, entity or opportunity; or (iv) any other information or
materials, whether written, graphic, or in any other form, that belongs to a
Party (“Discloser”) and is
learned by or disclosed orally, electronically or otherwise to another Party (“Disclosee”) in the course of
discussions, studies or other work in providing the Services.


 


Except
as required by law, regulatory authorities or as otherwise agreed to in writing
by Discloser, Disclosee agrees (i) to keep, and to cause its Representatives
(as defined below) to keep, all Confidential Information confidential and not
to disclose or reveal any such Confidential Information to any person other
than its Representatives who need to know the Confidential Information for the
purpose of providing the Services; (ii) not to use, and not to allow its
Representatives to use, Confidential Information for any purpose other than in
connection with the provision of the Services; (iii) not to disclose, and not
to allow


 


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its
Representatives to disclose, to any person, other than those of its
Representatives who need to know in connection with the provision of the
Services, any information about the terms or conditions pursuant to which the
Services are being provided or any other facts relating to the Services,
including without limitation the fact that Confidential Information has been
made available to it or its Representatives; and (iv) to promptly deliver to
Discloser, upon written request, any and all documents, notes or other physical
embodiments of or reflecting the Confidential Information (including any
copies) that are in Disclosee’s possession or control.  A “Representative”
of a person shall mean such person’s directors, officers, employees, agents,
advisors (including financial advisors, counsel and accountants) and
controlling persons.  A “person” means any individual,
corporation, company, partnership or other entity.  A Disclosee shall be responsible for any breach of the terms of
this Section 10 by it or its Representatives.


 


The
covenants contained in this Section 10 shall not apply to any
information to the extent the information (i) is, or at any time becomes,
available to the public, other than through the wrongful act or omission of
Disclosee; (ii) is independently discovered or developed by employees, agents
or contractors of Disclosee who have had no access to the Confidential
Information; (iii) is rightfully obtained from a third party without any
obligation of confidentiality; or (iv) is in response to a valid order of a
court or authorized governmental agency. 
However, with respect to (iv), should Disclosee receive any such order,
it shall immediately notify Discloser and shall cooperate as reasonably
requested by Discloser in limiting or controlling such disclosure, except to
the extent prohibited by valid order of a court or authorized governmental agency.


 


Delinea
will use its commercially reasonable best efforts to secure substantially
similar commitments with respect to Confidential Information of Customer from
all Subcontractors providing Services.


 


11.                                 Term of Agreement. 
Subject to the termination provisions set forth in Section 12
below, this Agreement shall remain in force for an initial term of five years
beginning on the date it is signed by both Parties and continuing through
December, 2007, and shall automatically renew from year to year thereafter
unless either Party delivers a written notice of non-renewal to the other Party
at least 90 days prior to the expiration of the then-current term.


 


12.                                 Termination.


 


A.                                   Either Party may terminate this Agreement
upon written notice to the other Party in the event of a material breach or
material non-performance by the other Party of its obligations under this
Agreement.  As a condition to
termination under this Section 12.A, the terminating Party shall
have first given the other Party an initial written notice referencing this Section 12.A
and describing in detail the breach or non-performance complained of, and the
other Party shall have failed to cure such breach or non-performance within 60
days of its receipt of such notice; provided, however, that in the case
of a breach for failure to satisfy a payment obligation, the non-breaching
Party may terminate this Agreement immediately upon written notice to the
breaching Party.


 


B.                                     Termination or expiration of this Agreement
shall have the effect of terminating all outstanding Work Orders, unless a
particular Work Order specifically provides otherwise or the Parties expressly
agree otherwise in writing as to one or more Work Orders.


 


C.                                     Customer
may terminate this agreement with ninety (90) days prior written notice in the
event Customer is acquired by another company; and where the acquiring company
has substantially the same or similar business applications as identified in
paragraph 1.0 of Attachment 1 to Work Order 1 dated March 12, 2003; and where
the company acquiring the Customer uses their own business applications to
provide the business functions included in Company’s Services.  This termination provision applies
specifically to the situation where Customer is acquired by another business
that intends to use it’s existing business applications instead of Company’s
Services and is not intended for any other purpose including termination for
convenience.  The termination fees and
schedule are included on Attachment 4 to Work Order 1,


 


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dated March 12,
2003.  Termination under this provision
shall not be allowed before September 1, 2004.


 


13.                                 Independent Contractor. 
The relationship of the Parties is that of owner (i.e., Customer) and independent contractor
(i.e., Delinea) and is not one of
employment or agency, express or implied. 
As owner, Customer is interested only in results to be achieved, and the
conduct and control of the Services hereunder shall remain solely with Delinea
as independent contractor; provided that Customer shall be entitled to oversee
and inspect the Services.  Without
limitation of the foregoing, Delinea acknowledges and agrees that it is not
entitled to any employment status, benefits or rights that Customer may provide
from time to time to its employees.


 


14.                                 Indemnification. 
Each Party (the “Indemnifying
Party”) shall protect, defend, indemnify and hold the other
Party (and Customer shall hold any Subcontractor providing Services), its or
their officers, directors, employees, agents, and owners (collectively, the “Indemnified Parties”) harmless
from and against any and all liability, losses, damages, causes of action,
penalties, fines, costs, claims and expenses, including reasonable attorneys’
fees, arising out of or in any way incident to this Agreement or the
transactions or activities contemplated in this Agreement on account of
personal injuries, death, damage to property, damage to the environment, or
infringement of any patent, trademark, copyright, or other property right
caused in whole or in part by the acts or omissions of the Indemnifying Party,
its agents or employees, except to the extent the harm, damage or costs are
caused by one or more Indemnified Parties. 
Delinea will use its commercially reasonable best efforts to secure
substantially similar commitments for Customer from all Subcontractors
providing Services.


 


15.                                 Limitation of Liability. 
The collective liability of Delinea, and any of its Subcontractors
providing Services, to Customer and Customer’s employees, agents, affiliates,
subcontractors and customers will be limited to direct damages and will not
exceed the amount of the fees paid by Customer under the Work Order giving rise
to the claims during the three-month period preceding the incident on which the
claim is based.  In no event will
Delinea or any of its Subcontractors be liable for incidental, special,
indirect or consequential damages (including lost profits) suffered by Customer
or Customer’s employees, agents, affiliates, subcontractors or customers, even
if Delinea or its Subcontractor has previously been advised of the possibility
of such damages.  In no event shall one
Party assert a cause of action against the other Party pursuant to this
Agreement or any Work Order more than one year after the Party asserting the
claim knew or should have known of the facts giving rise to such cause of
action.  Delinea will use its
commercially reasonable best efforts to secure similar limitations on the time
in which claims may be asserted, from all Subcontractors providing Services.


 


16.                                 Dispute Resolution.  If
Delinea has a dispute against Customer, or Customer has a dispute against
Delinea or a Subcontractor, in any such case relating to this Agreement, any
Work Order or any Services, Delinea and Customer will adhere to the following
procedure prior to initiating any judicial proceedings:


 


A.                                   Either Party may notify the other Party of
the occurrence of a dispute and establish a mutually convenient time and place
to meet to discuss the dispute. In any event, the meeting will occur within two
business days after delivery of the notice of dispute.


 


B.                                     If the Parties are unable to resolve the
dispute at the meeting, either Party may then give the other Party written
notice that the dispute continues. Within two business days after delivery of
such notice, senior level representatives of each Party will meet to discuss
the issue at a mutually convenient time and place. If the dispute has not been
resolved during the seven days following the initial meeting of the designated
representatives, either Party may then request non-binding mediation by written
notice to the other Party.


 


C.                                     Within seven calendar days after a request
for mediation from either Party, the Parties will agree in writing to the
selection of a mediator and commence non-binding mediation. Each Party will
bear its own cost of mediation and one-half the cost of the mediator.


 


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D.                                    If the Parties are unable to resolve the
dispute after conclusion of the mediation, then all unresolved disputes arising
under this Agreement shall be submitted to arbitration under the rules of the
American Arbitration Association.  The
award of the arbitrator shall be binding and may be entered as a judgment in
any court of competent jurisdiction.


 


Delinea
will use its commercially reasonable best efforts to secure substantially
similar commitments with respect to disputes from each Subcontractor providing
Services.


 


17.                                 Assignment.  Neither Party shall assign its
rights or responsibilities under this Agreement or any Work Order without the
prior written consent of the other Party, except that (i) Delinea shall be free
to engage Subcontractors as it sees fit to assist in providing the Services,
and (ii) either may assign its rights and responsibilities under this Agreement
or any Work Order to the successor to any merger, asset sale, stock sale or
similar transaction involving such Party.


 


18.                                 Notices.  Any notice, request or other
communication required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given (a) upon receipt if delivered
personally or by overnight courier, or (b) on the third business day after
being sent by registered or certified mail, return receipt requested, postage
prepaid, to the applicable Party at its address set forth on the signature page
below.


 


19.                                 Governing Law. 
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS.  However, if any provision of this Agreement
shall be prohibited by or invalid under such laws, such provision shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.


 


20.                                 Force Majeure. 
Both Parties will be excused from performance under this Agreement or
any Work Order (other than performance of an obligation to pay money) for any
period and to the extent it is prevented from performing any action pursuant to
this Agreement or any Work Order, in whole or in part, as a result of delays
beyond its reasonable control caused by the other Party or by an act of God,
war, civil disturbance, court order, labor dispute, third party nonperformance
caused by force majeure or other cause beyond its reasonable control, including
failures or fluctuations in power, heat, light, air conditioning or
telecommunications equipment.


 


21.                                 Survival.  Sections 7B, 8, 10,
14, 15 and 16 shall survive termination of this Agreement.


 


22.                                 Miscellaneous. 
Titles appearing at the beginning of any subdivisions are for
convenience only and shall be disregarded in construing the language contained
in such subdivisions.  Words in the
singular form shall be construed to include the plural and vice versa, as the
context requires.  Unless otherwise
expressly provided in this Agreement, any reference in this Agreement to a day
shall refer to a calendar day.  This
Agreement, together with any executed Work Orders, contains all of the
covenants and terms of the agreement between the Parties with respect to the
performance of the Services, and constitutes the entire understanding between
the Parties with respect to the subject matter of this Agreement, superseding
all prior and contemporaneous agreements, understandings, inducements, or
conditions, express or implied, oral or written (including without limitation
any summary of the key terms of this Agreement prepared by Delinea).  Any modification of this Agreement or any
Work Order will be effective only if it is in writing, and signed by the Party
to be charged.  No delay or failure on
either Party’s part to enforce any right or claim shall constitute a waiver of
such right or claim.  Any waiver by
either Party of any term, provision or condition, or of any subsequent default
in any one or more instances, shall not be deemed to be a further or continuing
waiver of the provision or condition or of any subsequent default.  If any of the provisions of this Agreement
or any Work Order are invalid under any applicable law, rule or regulation,
such provisions or portions thereof are to that extent (but only to that
extent) deemed to be, if possible, reformed to cure such invalidity, or else
omitted.


 


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EXECUTION


 


This
Agreement has been executed by the Parties as of the date indicated.


 


	
  ADDRESS:

  	
  DELINEA:

  
	
   

  	
   

  
	
  16301 Quorum Dr., Ste. 200B

  	
  DELINEA CORPORATION

  
	
  Addison, TX 75001

  	
   

  
	
  Attn:                    CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Trey Swain

  	
   

  
	
   

  	
   

  
	
  DATE:

  	
  Name: Trey Swain

  
	
   

  	
   

  
	
  March 12, 2003

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  ADDRESS:

  	
  CUSTOMER:

  
	
   

  	
   

  
	
  500 West Wall

  	
  CAP ROCK ENERGY CORPORATION

  
	
  Suite 200

  	
   

  
	
  Midland, Texas 79701

  	
   

  
	
  Attn: CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lee Atkins

  	
   

  
	
   

  	
   

  
	
  DATE:

  	
  Name: Lee Atkins

  
	
   

  	
   

  
	
  March 12, 2003

  	
  Title: Sr Vice President & Chief Financial Officer

  



 


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