Software License Agreement

Exhibit 10.6 COG Operating LLCMidland, TexasSoftware & Services AgreementMarch 2006Provided by:Enertia Software
125 W. Missouri Avenue
Midland, Texas 79701
ph: (432) 685-1753 fax: (432) 685-4006


Software License Agreement This Software License Agreement (the " Agreement" ) is made by and between Enertech Information Systems, Inc., dba Enertia Software, a Texas corporation (the " Licensor" ) and COG Operating LLC, a Delaware limited liability company the " Licensee" ), to be effective as of March 1, 2006 (the " Effective Date" ). Licensor and Licensee may be collectively referred to herein as the " Parties" or individually as " Party." Now, therefore, in consideration of the mutual covenants and promises contained in this Agreement, Licensor and Licensee agree as follows: ARTICLE 1
LICENSE GRANT Grant of License 1.1 Subject to the terms and conditions specified in this Agreement, Licensor hereby grants to Licensee for itself and its parent company, if any, and its and their subsidiaries, affiliates and/or business units a user object code license to the Enertia Energy Management System (the " Software" ). The fees for this license are defined in Schedule A of this Agreement which is attached hereto and made a part of hereof. This license allows Licensee to install the Software in a single location for up to twenty (20) concurrent users. Remote site access to a central database will be counted as concurrent user access. A " single location" is defined as a single central database. Installation of Software at a remote site to maintain additional production database(s) will constitute an additional license and such use will result in additional fees for any such site. Subject Matter Software 1.2 Software consists of the following software functional areas and/or modules:Accounting & Financials
Well Production with Field Data Gathering
Land & Contracts
Inventory / Material Transfer
Imaging
DD&A
Fixed Assets
Report Writer with Add-InSpecifically, the Software contains the following: a) A single computer program named Enertia. The program is: i) Embodied on magnetic media mutually agreed upon by Licensor and Licensee. ii) In object code language versions. b) On-line help files. c) All subsequent improvements to either the computer program or the related documentation made by either Licensor or Licensee as embodied in any subsequent agreement attached to and made a part of the Agreement. Software Upgrade Provision 1.3 Licensor agrees to provide Licensee license upgrades to the Software in five (5) concurrent user increments for a license fee of $50,000. This fixed fee upgrade provision will be in effect for the term of this Agreement. ARTICLE 2
LIMITATIONS ON USE General Use of Software 2.1. Licensee agrees to use the Software solely for its own internal use and that of those entities referenced in Section 1.1 on the Designated Hardware and not for any other person or purpose.


Copies 2.2. Except as otherwise provided herein. Licensee may make as many copies of the Software as required for use solely by Licensee and the other entities referenced in Section 1.1 . Licensee agrees when making copies of the Software, not to remove any trademark, copyright notices or other proprietary notices. Licensee' s Responsibilities 2.3. Licensee shall be exclusively responsible for the supervision, management, and control of its use of the Software, including, but not limited to: a) Assuring proper configuration of the network infrastructure, hardware, related equipment and devices, and compatibility with the Software. b) Establishing adequate operating methods. c) Implementing procedures sufficient to satisfy its obligations for security under this Agreement, including appropriate control of its employees and independent contractors to prevent misuse, unauthorized copying, modification, or disclosure of the Software pursuant to Section 3 .2 . License Term 2.4. The license granted in this Agreement shall remain in force for the term here of, which shall commence on the Effective Date of this Agreement and continue thereafter unless and until either Party advises the other Party that it is terminating this Agreement as of a date at least six (6) months after the date of such notice, and which termination notice may not be given prior to one hundred eighty (180) days after the Effective Date, unless terminated earlier as provided herein. After the initial ninety-nine (99) year period expires the license will automatically renew under additional ninety-nine (99) years terms unless Licensor or Licensee requests in writing that the license be discontinued. ARTICLE 3
PROPERTY RIGHTS Title to Software 3.1. Title to the Software is reserved for the Licensor. Licensee acknowledges and agrees that Licensor is and shall remain the owner of the Software and shall be the owner of all copies of the Software made by the Licensee. Confidentiality / Non Disclosure 3.2(a) Licensee acknowledges that the Software is confidential in nature and constitutes a trade secret belonging to Licensor. Licensee agrees to hold the Software in confidence and not to sell, rent, license, distribute, transfer, publish, reprint, reproduce, make available or disclose the Software or its contents, including methods or ideas used in the Software, to anyone except the other entities referenced in Section 1.1 , and except as may be necessary or convenient in the conduct of Licensee' s business. Licensee shall instruct all employees, agents and independent contractors using the Software that they must keep the Software confidential by using the same care and discretion that they use with other data designated by the Licensee as confidential. Licensor further agrees that the existing contents of this Agreement, including, but not limited to, the terms, conditions and financial information are considered confidential and will be held in strict confidence. This provision shall remain in full force and effect for a period of one (1) year after the expiration or termination of this Agreement. (b) Licensor acknowledges that all information of Licensee provided or made available to Licensor or which is accessible to it, whether before or after the Effective Date, and regardless of the manner in which it was furnished, is confidential. Licensor agrees to keep all such information strictly confidential and agrees that neither Licensor or its representatives will in any manner communicate, publish or divulge such confidential information without the express advanced written authorization of Licensee, except as may otherwise be provided herein. Restricted Access 3.3. Licensee agrees to keep the Software in a secure place under access and use restrictions designed to prevent disclosure of the Software to unauthorized persons. Licensee agrees to at least implement the security precautions that it normally uses to protect other software subject to similar restrictions or confidentiality.


Labels 3.4 Licensee agrees not to intentionally remove, mutilate, or destroy any copyright, patent notice, trademark, service mark, other proprietary markings, or confidential legends placed on or within the Software Emulating Software 3.5 Licensee agrees not to create emulating software based on the Software for sale or distribution and decompilation. Disassembly or reverse engineering of the Software is strictly prohibited. ARTICLE 4
PAYMENT Payment Terms 4.1. Payment shall be made to Licensor pursuant to the terms of Schedule A. Taxes 4.2. Licensee shall pay all applicable sales and/or usage taxes arising from the purchase of hardware, software and/or services from Licensor. ARTICLE 5
DELIVERY AND SERVICE Delivery of the Software 5.1 Licensor shall deliver and install the Software to Licensee within ten (10) days of the execution of this Agreement. If the Software is lost or damaged during shipment. Licensor shall replace it at no additional charge to Licensee. If the Software is lost or damaged while in Licensee' s possession, Licensor shall replace it when Licensee pays cost of shipping, and as long as Licensee is not in material breach or default of this Agreement. Licensor will not be responsible for replacing any lost data. Software Training 5.2 Licensor shall provide a total number of thirty (30) man-days of on-site training for individual and/or group instruction. These training days would be provided at Licensee' s Midland, Texas location or Licensor' s Midland, Texas training facility as designated by Licensee as a part of the Project Fee defined in Schedule A of this Agreement. In the event the Parties agree that more than one employee of Licensor needs to be present for training, one day of training will be counted for each employee of Licensor present. If Licensor must travel outside of Midland, Texas to provide training for Licensee, Licensee shall pay such travel expenses in accordance with Section 5.6 . Software Enhancements 5.3 Licensor further agrees to make on-going enhancem ...