**EXHIBIT10.82**

 

**MANAGEDSERVICES AGREEMENT**

 

ThisManaged Services Agreement (this *“Agreement”*)is entered into by and between Delinea Corporation, a Delaware corporation (*“Delinea”*), and the companyidentified as “Customer” on the signature page (*“Customer”*). Delinea and Customer shall be referred to in this Agreement individuallyas a *“Party”* andcollectively as *“Parties.”*

 

# **RECITAL**

 

Customerwishes to engage Delinea to provide certain managed services as described inthis Agreement, and Delinea wishes to provide those services, all upon andsubject to the terms and provisions of this Agreement.

 

# **TERMS AND CONDITIONS**

 

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

 

1.                                       Services.  Delinea agrees to providecertain managed services (the *“Services”*)to Customer from time to time during the term of this Agreement.  The Services shall consist of projectsrequested by Customer and agreed to by Delinea, as evidenced by a writtendocument (a *“Work Order”*)prepared and submitted by Delinea to Customer, describing in reasonable detailthe specific services requested of Delinea. When executed by both Parties, each Work Order shall constitute aseparate legally binding agreement between the Parties regarding the subjectmatter addressed in the Work Order. Work Orders may only be amended by a written change order signed by bothParties.  In the event of a conflictbetween any terms of this Agreement and a Work Order, the terms of the WorkOrder shall prevail.

 

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

 

Inaddition to payment of fees, Customer shall reimburse Delinea and itsSubcontractors for reasonable travel, lodging, meals, long distance telephonecharges and similar out-of-pocket expenses incurred by Delinea or itsSubcontractors on Customer’s behalf, upon Customer’s receipt of reasonablereceipts or other supporting documentation. Customer is also solely responsible for payment of any taxes (includingall federal, state or local sales or use taxes, intangible taxes and propertytaxes) 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 forwhich Customer is responsible, for remittance to the appropriateauthority.  Customer agrees to holdDelinea harmless from all claims and liability arising from its failure toreport or pay any such taxes.

 

Delineawill present its invoices for all fees and expenses incurred under this Agreementto such person as Customer shall designate from time to time.  All invoiced amounts shall be due andpayable within 15 days after invoice date via wire transfer per theinstructions provided on an applicable Work Order, unless an alternative formof payment is approved by Delinea.  Anyamounts not timely paid shall, at Delinea’s option, bear interest beginning onthe 31st day after invoice date until paid at a rate of 11⁄2% permonth or the highest non-usurious rate allowed under applicable law, whicheveris 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 performthe Services in a professional, workmanlike and safe manner, and shall at alltimes use its commercially reasonable best efforts to achieve the goals andobjectives, and meet the specifications and performance criteria, stated ineach Work Order.

 

B.                                     Remedies in the Event of Breach.  Inthe event of any breach of the commitments made in the immediately precedingparagraph, and as Customer’s sole and exclusive remedy for such breach, Delineawill use its commercially reasonable best efforts to cure any demonstrablebreach in respect of Services provided pursuant to a given Work Order as soonas reasonably practicable after receiving written notice of the breach fromCustomer, provided Customer gives Delinea written notice of the breach within90 days after completion or delivery of such Services.

 

C.                                     **Warranty Disclaimer****.  DELINEA DISCLAIMS ANY WARRANTY WITH RESPECT TO THE SERVICESEXCEPT AS EXPRESSLY PROVIDED IN SECTION 3.A ABOVE, INCLUDINGWITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR APARTICULAR PURPOSE.**

 

D.                                    Customer Satisfaction Review. Representatives designated by Delinea and Customer shall convenesemi-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 itsprovision of the Services, (ii) recommendations and suggestions as to how theParties can enhance their relationship, and (iii) any disputes or disagreementsrelating to the Services or fees.

 

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

 

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

 

6.                                       Procurement.  Ifa Work Order contemplates the purchase of hardware, software or other items forCustomer, Delinea or any Subcontractor, or if Delinea or a Subcontractorrequires any such item(s) in order to facilitate the efficient delivery of theServices, Delinea shall notify Customer in writing (which notice may becontained in the applicable Work Order), including in the notification anyrelevant specifications or other information regarding the requireditem(s).  Customer shall notify Delineaeither that Delinea should procure the item(s), or that Customer will procuresuch item(s) itself.  If Customer isprocuring the item(s) and Delinea has indicated in its notification a targetdate by which it requires the item(s), Customer shall make reasonable effortsto meet the target date.  Delinea willprovide reasonable assistance and recommendations as appropriate or as requestedby Customer.  Any such item(s) that arenot consumed during the provision of the Services shall remain the property ofCustomer 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 theServices are legally authorized to perform the Services, and that theiremployment status with Delinea or a Subcontractor, if applicable, complies withall residency, immigration, visa, or similar requirements of federal, state orlocal laws or regulations.  All Delineaand Subcontractor personnel performing Services on Customer’s premises shallcomply with reasonable Customer safety rules and other rules adopted byCustomer for its own employees.

 

B.                                     Non-Solicitation. Each Party agrees that during the term of this Agreement, and for aperiod of one year from the date of the termination or expiration of thisAgreement, such Party will not, without the prior written consent of the otherParty, directly or indirectly solicit, request or advise any employee of theother 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 inany way whatsoever enter into a business or professional relationship with anysuch employee.  Delinea will use itscommercially reasonable best efforts to secure substantially similarcommitments with respect to Customer employees from all Subcontractorsproviding Services.

 

8.                                       Ownership of Work Product. All copyrights, patents, trade secrets, or other intellectual propertyrights associated with any ideas, concepts, techniques, inventions, processes,or works of authorship developed, created or improved by either Party or aSubcontractor pursuant to and during the term of this Agreement (collectively,the *“Work Product”*) shallbelong exclusively to such Party or Subcontractor, unless otherwise specifiedin a particular Work Order.  Delineahereby grants to Customer, without any requirement of further consideration, anon-exclusive, perpetual license, without right of assignment or sub-license,to use Delinea Work Product.  UponCustomer’s request, Delinea shall take such further actions, includingexecution and delivery of mutually acceptable license agreements, as may beappropriate to give full and proper effect to such license.  Delinea will use its commercially reasonablebest efforts to secure substantially similar commitments with respect to WorkProduct from all Subcontractors providing Services.

 

9.                                       First Look. Delinea will be the preferred provider for outsourced IT servicesinvolving but not limited to, web development, web consulting, web hosting,application development, application maintenance, application hosting, servermanagement, network services, security services, desktop services, and businessprocess services.  As such Client willallow Delinea a first-look bid opportunity for services that Client isconsidering awarding to another vendor.

 

10.                                 Confidentiality.  Inconnection with the Services to be provided by Delinea under this Agreement,each Party expects to furnish to the other Party certain “ConfidentialInformation” as defined below, and does not wish to make such ConfidentialInformation public or common knowledge or have it disclosed to any third partyor used for any purpose other than as described in this Agreement.  The term *“ConfidentialInformation”* 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) anytechnical, financial, geological, geophysical, seismic, production or salesinformation; (iii) any information regarding suppliers, customers, employees,investors or other funding sources, prospective acquisitions or investments,business opportunities, or business operations, and any information regardingany such person, entity or opportunity; or (iv) any other information ormaterials, whether written, graphic, or in any other form, that belongs to aParty (*“Discloser”*) and islearned by or disclosed orally, electronically or otherwise to another Party (*“Disclosee”*) in the course ofdiscussions, studies or other work in providing the Services.

 

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

 

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itsRepresentatives to disclose, to any person, other than those of itsRepresentatives who need to know in connection with the provision of theServices, any information about the terms or conditions pursuant to which theServices are being provided or any other facts relating to the Services,including without limitation the fact that Confidential Information has beenmade available to it or its Representatives; and (iv) to promptly deliver toDiscloser, upon written request, any and all documents, notes or other physicalembodiments of or reflecting the Confidential Information (including anycopies) 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) andcontrolling persons.  A *“person”* means any individual,corporation, company, partnership or other entity.  A Disclosee shall be responsible for any breach of the terms ofthis Section 10 by it or its Representatives.

 

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

 

Delineawill use its commercially reasonable best efforts to secure substantiallysimilar commitments with respect to Confidential Information of Customer fromall Subcontractors providing Services.

 

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

 

12.                                 Termination.

 

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

 

B.                                     Termination or expiration of this Agreementshall have the effect of terminating all outstanding Work Orders, unless aparticular Work Order specifically provides otherwise or the Parties expresslyagree otherwise in writing as to one or more Work Orders.

 

C.                                     Customermay terminate this agreement with ninety (90) days prior written notice in theevent Customer is acquired by another company; and where the acquiring companyhas substantially the same or similar business applications as identified inparagraph 1.0 of Attachment 1 to Work Order 1 dated March 12, 2003; and wherethe company acquiring the Customer uses their own business applications toprovide the business functions included in Company’s Services.  This termination provision appliesspecifically to the situation where Customer is acquired by another businessthat intends to use it’s existing business applications instead of Company’sServices and is not intended for any other purpose including termination forconvenience.  The termination fees andschedule are included on Attachment 4 to Work Order 1,

 

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dated March 12,2003.  Termination under this provisionshall 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 ofemployment or agency, express or implied. As owner, Customer is interested only in results to be achieved, and theconduct and control of the Services hereunder shall remain solely with Delineaas independent contractor; provided that Customer shall be entitled to overseeand inspect the Services.  Withoutlimitation of the foregoing, Delinea acknowledges and agrees that it is notentitled to any employment status, benefits or rights that Customer may providefrom time to time to its employees.

 

14.                                 Indemnification. Each Party (the *“IndemnifyingParty”*) shall protect, defend, indemnify and hold the otherParty (and Customer shall hold any Subcontractor providing Services), its ortheir officers, directors, employees, agents, and owners (collectively, the *“Indemnified Parties”*) harmlessfrom 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 thetransactions or activities contemplated in this Agreement on account ofpersonal injuries, death, damage to property, damage to the environment, orinfringement of any patent, trademark, copyright, or other property rightcaused 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 arecaused by one or more Indemnified Parties. Delinea will use its commercially reasonable best efforts to securesubstantially similar commitments for Customer from all Subcontractorsproviding Services.

 

15.                                 Limitation of Liability. The collective liability of Delinea, and any of its Subcontractorsproviding Services, to Customer and Customer’s employees, agents, affiliates,subcontractors and customers will be limited to direct damages and will notexceed the amount of the fees paid by Customer under the Work Order giving riseto the claims during the three-month period preceding the incident on which theclaim is based.  In no event willDelinea or any of its Subcontractors be liable for incidental, special,indirect or consequential damages (including lost profits) suffered by Customeror Customer’s employees, agents, affiliates, subcontractors or customers, evenif Delinea or its Subcontractor has previously been advised of the possibilityof such damages.  In no event shall oneParty assert a cause of action against the other Party pursuant to thisAgreement or any Work Order more than one year after the Party asserting theclaim knew or should have known of the facts giving rise to such cause ofaction.  Delinea will use itscommercially reasonable best efforts to secure similar limitations on the timein which claims may be asserted, from all Subcontractors providing Services.

 

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

 

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

 

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

 

C.                                     Within seven calendar days after a requestfor mediation from either Party, the Parties will agree in writing to theselection of a mediator and commence non-binding mediation. Each Party willbear 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 thedispute after conclusion of the mediation, then all unresolved disputes arisingunder this Agreement shall be submitted to arbitration under the rules of theAmerican Arbitration Association.  Theaward of the arbitrator shall be binding and may be entered as a judgment inany court of competent jurisdiction.

 

Delineawill use its commercially reasonable best efforts to secure substantiallysimilar commitments with respect to disputes from each Subcontractor providingServices.

 

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

 

18.                                 Notices.  Any notice, request or othercommunication required or permitted under this Agreement shall be in writingand shall be deemed to have been duly given (a) upon receipt if deliveredpersonally or by overnight courier, or (b) on the third business day afterbeing sent by registered or certified mail, return receipt requested, postageprepaid, to the applicable Party at its address set forth on the signature pagebelow.

 

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 Agreementshall be prohibited by or invalid under such laws, such provision shall beineffective to the extent of such prohibition or invalidity withoutinvalidating the remainder of such provision or the remaining provisions ofthis Agreement.

 

20.                                 Force Majeure. Both Parties will be excused from performance under this Agreement orany Work Order (other than performance of an obligation to pay money) for anyperiod and to the extent it is prevented from performing any action pursuant tothis Agreement or any Work Order, in whole or in part, as a result of delaysbeyond its reasonable control caused by the other Party or by an act of God,war, civil disturbance, court order, labor dispute, third party nonperformancecaused by force majeure or other cause beyond its reasonable control, includingfailures or fluctuations in power, heat, light, air conditioning ortelecommunications 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 forconvenience only and shall be disregarded in construing the language containedin such subdivisions.  Words in thesingular form shall be construed to include the plural and vice versa, as thecontext requires.  Unless otherwiseexpressly provided in this Agreement, any reference in this Agreement to a dayshall refer to a calendar day.  ThisAgreement, together with any executed Work Orders, contains all of thecovenants and terms of the agreement between the Parties with respect to theperformance of the Services, and constitutes the entire understanding betweenthe Parties with respect to the subject matter of this Agreement, supersedingall prior and contemporaneous agreements, understandings, inducements, orconditions, express or implied, oral or written (including without limitationany summary of the key terms of this Agreement prepared by Delinea).  Any modification of this Agreement or anyWork Order will be effective only if it is in writing, and signed by the Partyto be charged.  No delay or failure oneither Party’s part to enforce any right or claim shall constitute a waiver ofsuch right or claim.  Any waiver byeither Party of any term, provision or condition, or of any subsequent defaultin any one or more instances, shall not be deemed to be a further or continuingwaiver of the provision or condition or of any subsequent default.  If any of the provisions of this Agreementor any Work Order are invalid under any applicable law, rule or regulation,such provisions or portions thereof are to that extent (but only to thatextent) deemed to be, if possible, reformed to cure such invalidity, or elseomitted.

 

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**EXECUTION**

 

ThisAgreement 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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