City Auditor - City Recorder - Council Ordinance - 177187 Severn Trent Systems settlement agreement

This Settlement Agreement (“Agreement”) is made and entered into by and between Computer Systems & Applications Inc., a Texas corporation doing business as Severn Trent Systems (“STS”) and the City of Portland, including all commissioners and bureaus thereof (specifically including, but not limited to the Bureau of Environmental Services and Bureau of Water Works) (herein collectively referred to as the “City”), each referred to as a “Party” and collectively referred to as “Parties” to this Agreement.

RECITALS

WHEREAS, the City and STS entered into the Existing Agreements (as hereinafter defined) and have operated pursuant to such agreements until present;

WHEREAS, there are significant matters of dispute between the Parties regarding the responsibility for operational issues related to the Software;

WHEREAS, the City and STS hereby desire to compromise and settle any disputes between the Parties pursuant to such Existing Agreements;

WHEREAS, STS is willing to pay certain sums to the City in the anticipation that the City will continue to utilize the Software and enter into new agreements and a new process by which the Parties will operate in the future;

WHEREAS, this Agreement with its Exhibits will represent the entire agreement of the Parties from this date forward in any manner related to the Software (as hereinafter defined) and the obligations and duties of the Parties;

NOW THEREFORE, in consideration of the promises contained in this Agreement, the sufficiency and receipt of which is hereby acknowledged, and the contemporaneously executed License Agreement and Maintenance Agreement, the Parties hereby agree as follows:

Article I
Definitions

I.1 “Change Controls” means any mutually agreed request to modify the functionality of the Software as defined in the Existing Agreements.

I.2 “Direct Competitor” means any company that produces, implements or sells software applications that provide substantially similar functionality as the Software.

I.3 “Documentation” means all documentation, on-line help and other materials provided by STS to the City describing the Software and the use thereof.

I.4 “Effective Date” means November 1, 2002.

I.5 “Existing Agreements” means:

I.5.1. the License Agreement and the Agreement for Services previously executed by the Parties;

I.5.2. the performance bond issues pursuant to the License Agreement and the Agreement for Services;

I.5.3. all Exhibits, Addenda and Change Orders as may have been signed by the Parties and attached to or referenced by any of the above referenced Existing Agreements; and

I.5.4. any and all negotiations, correspondence, electronic or paper, oral representations, warranties, commitments or statements of the Parties prior to the date of this Agreement.

I.6 “Software” means CIS/OV Version 3.0.1 FD with database version 7.0.1.10J that is currently installed on the City’s computer system or any prior versions, including all proprietary rights, intellectual property rights and trade secrets incorporated within the object code and source code.

I.7 “Software License and Maintenance Agreement” means that one certain agreement entitled Software License and Maintenance Agreement executed by and between the Parties on even date herewith, a copy of which is attached hereto as Exhibit A.

Article II
Representations and Warranties of the Parties

II.1 Entry Into Agreement and Software License and Maintenance Agreement. The Parties represent and warrant to each other that, in deciding to enter into this Agreement, they each:

II.1.1. made their own investigation and evaluation;

II.1.2. had all of the information they deemed necessary, including the opportunity to investigate all potential claims and causes of action;

II.1.3. agree that neither of them will hereafter assert that it relied on any statements, representations, acts or omissions that are not contained herein in any proceeding between the Parties in an attempt to bring an action for damages or nullify, modify, set aside or otherwise alter the terms or avoid the purposes of this Agreement.;

II.1.4. have no duty to each other in connection with the negotiation, execution, or effectuation of this Agreement, the License Agreement or the Maintenance Agreement other than those arising as a matter of law;

II.1.5. expressly waive the existence of any duty as a fiduciary or otherwise, or any special relationship or any relationship of trust and confidence, in connection with the negotiation, execution, or effectuation of this Agreement, the License Agreement and the Maintenance Agreement;

II.1.6. were not acting under any duress, compulsion or undue influence; and

II.1.7. were represented and advised as to the full effect of this Agreement and the Software License and Maintenance Agreement by independent legal counsel.

II.2 Enforceability. The Parties further represent and warrant to each other that:

II.2.1. this Agreement and the Software License and Maintenance Agreement are binding and enforceable against the Parties; and

II.2.2. they have the necessary power and authority to enter into this Agreement and the Software License and Maintenance Agreement.

II.3 Disclosure. Before executing this Agreement, the signatory for each of the Parties has been duly authorized and approved by the Portland City Council and the STS board of directors and therefore the execution is the binding act and deed of each of the Parties. The execution and delivery of this Agreement and the consummation of the transactions herein or therein contemplated does not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any material agreement or instrument to which such Party is a party or any provision of law, statute, rule, or regulation applicable to either Party or any judicial or administrative order or decree by which either of the Parties is bound.

Article III
Settlement

This Agreement represents the settlement and compromise of all disputes, actions, causes of actions and claims between the Parties, known or unknown, relating to or arising from, directly or indirectly, the Existing Agreements or the Software. It is understood and agreed by the Parties that this Agreement is a settlement of disputed claims and neither this Agreement nor the Software License and Maintenance Agreement nor any of the obligations therein constitute an admission of liability or wrongdoing on the part of either of the Parties and by entering into this Agreement, neither of the Parties admits that they have committed any wrongful or unlawful act which makes them liable in any manner. This is solely a compromise and each Party expressly denies liability to the other. It is further agreed that neither this Agreement, nor any part of it is to be construed, used or admitted into evidence in any proceeding between the Parties, whether such proceeding is judicial, administrative or otherwise, now pending or subsequently instituted, except one brought for the purpose of enforcing any rights, obligations or duties arising out of this Agreement or the Software License and Maintenance Agreement.

Article IV
Termination of Existing Agreements and Mediation Documents

The Parties hereby agree that all terms, conditions and obligations under the Existing Agreements are terminated and all future obligations of the Parties are as set forth in this Agreement, and the Software License and Maintenance Agreement. The City further acknowledges that the Software is provided “AS IS” and there are no further warranties outstanding on the Software or any services provided by STS, except as set forth in the Software License and Maintenance Agreement.

Article V
Release by City of STS for All Liabilities to Date of Agreement

Except with respect to the obligations, representations and warranties in this Agreement and effective upon receipt of the payment under Article VIII, the City, for itself and its successors, forever irrevocably waives, releases and discharges STS and all of its insurers, parent, affiliated and related entities, contractors, and all of their respective agents, officers, directors, shareholders, employees, contractors, attorneys and other representatives, past, present and future, and each of them, from and against any and all claims, demands, damages, losses, liabilities, judgments, actions, causes of action, costs, expenses and attorney’s fees, whether arising in contract, tort, common law or statutory law, or otherwise, whether known or unknown, whether suspected or unsuspected including but not limited to claims of breach of contract, fraud, fraudulent inducement, tortious interference, negligent misrepresentations, deceptive trade practices violations, conversion and any claims or allegations related to any other unknown and unsuspected injuries as well as unknown and unsuspected consequences of known or suspected injuries, which are related, directly or indirectly, to the Existing Agreements or Software and which the City and its successors, now owns or holds (or is or was a party to), or has owned or held at any time prior to the execution of this Agreement. Such release is an express condition of the consideration of this Agreement, and it is the intention of the Parties that this release shall be effective as a bar to each and every claim, demand, damage, loss, liability, judgment, action, cause of action, cost, expense and attorney’s fees described in this Article V. The City acknowledges that STS has in fact relied on this release and the representations, warranties, limitations of liability and other terms of this Agreement as a condition to entering into this Agreement. Each Party expressly consents that this release shall be given full force and effect according to all of its provisions, including those relating to unknown, unsuspected and unrelated claims, demands, damages, losses, liabilities, judgments, actions, causes of action, costs, expenses and attorney fees.

The release of STS set forth in Article V above is final upon execution of this Agreement, regardless of any subsequent defaults by STS under this Agreement or the Software License and Maintenance Agreement.

Article VI
Release by STS of City for All Liabilities to Date of Agreement

Except with respect to the obligations, representations and warranties in this Agreement, STS, for itself and its parent, successors, insurers, permitted assigns and affiliates, forever irrevocably waives, releases and discharges the City and all of its insurers, affiliated and related entities, and all of their respective agents, officers, directors, commissioners, contractors, employees, attorneys and other representatives, past, present and future, and each of them, from and against any and all claims, demands, damages, losses, liabilities, judgments, actions, causes of action, costs, expenses and attorney’s fees, whether arising in contract, tort, common law or statutory law, or otherwise, whether known or unknown, whether suspected or unsuspected including but not limited to claims of breach of contract, fraud, fraudulent inducement, tortious interference, negligent misrepresentation, deceptive trade practices violations, conversion and any claims or allegations related to any other unknown and unsuspected injuries as well as unknown and unsuspected consequences of known or suspected injuries, which are related, directly or indirectly, to the Existing Agreements and Software and which STS, its parent, successors, insurers, permitted assigns, contractors and affiliates now owns or holds (or is or was a party to), or has owned or held at any time prior to the execution of this Agreement. Such release is an express condition of the consideration of this Agreement, and it is the intention of the Parties that this release shall be effective as a bar to each and every claim, demand, damage, loss, liability, judgment, action, cause of action, cost, expense and attorney’s fees described in this Article VI. STS acknowledges that the City has in fact relied on this release and the representations, warranties, limitations of liability and other terms of this Agreement as a condition to entering into this Agreement. Each Party expressly consents that this release shall be given full force and effect according to all of its provisions, including those relating to unknown, unsuspected and unrelated claims, demands, damages, losses, liabilities, judgments, actions, causes of action, costs, expenses and attorney fees. The release of the City set forth in Article VI above is final upon execution of this Agreement, regardless of any subsequent defaults by STS under this Agreement or the Software License and Maintenance Agreement.

Article VII
Third Party Software Licenses and Maintenance Agreements

To the extent necessary, the Parties agree to work in good faith to transfer the following existing third party licenses to the City: Postalsoft; MicroFocus Cobol. This shall not require STS to make any payments for such transfer or the license or support and maintenance relating to such licenses.

Article VIII

Amount of Payment by STS to the City

STS shall reimburse the City the sum of seven million dollars ($7,000,000) within ten business days from the date of execution by the City of this Agreement, which sum shall be the full and complete payment to the City or any other party for all of the obligations and releases of STS under this Agreement.

Article IX

Obligation to Execute License Agreement and Maintenance Agreement

The Parties hereby agree to execute simultaneously with the execution of this Agreement the Software License and Maintenance Agreement. The Software License and Maintenance Agreement shall control over this Agreement in regard to licensing, support and maintenance of the Software.

Article X
Future Change Controls

STS shall have no obligations other than those set forth in the Software License and Maintenance Agreement to undertake any Change Controls to the Software.

Article XI
Confidentiality

XI.1 Disclosure. Throughout the relationship of the Parties the Parties have disclosed to each other and through the transaction contemplated hereunder the Parties will disclose to each other certain proprietary or confidential intellectual property rights, business methods, and customer, technical, or business information in written, graphic, oral, or other tangible or intangible forms as well as other material designated confidential under the terms of the Existing Agreements (the “Confidential Information”), except as may be required by Oregon law pursuant to the Oregon Public Records Act. Confidential Information shall include each Party’s business processes, financial information, all information and data of or pertaining to either Party’s customers, data, source code (in the event of an escrow release) and all information of the other Party or a Third Party that may be reasonably understood from legends, designation, or the nature of such information to be confidential or proprietary to the other Party or to Third Parties to which the other Party owes a duty of non-disclosure. In order to protect such Confidential Information from improper disclosure, STS and the City each agree:

XI.1.1. that all Confidential Information shall be and shall remain the exclusive property of the source;

XI.1.2. to the extent permitted by Oregon law, not to disclose such Confidential Information (including the source code) to any unaffiliated third party other than its officers, directors, employees, members, agents, independent contractors, advisors, consultants, attorneys, investors and others associated with the business operations of the receiving Party who have a need to know such information and which are made aware of the restrictions contained herein and have executed non-disclosure agreements with substantially similar protections to those set forth herein;

XI.1.3. to keep such Confidential Information confidential and to use at least the same level of care to prevent disclosure or unauthorized use of the received Confidential Information as the recipient exercises in protecting its own Confidential Information of a similar nature, but in no event less than reasonable care;

XI.1.4. as to a willful or negligent breach of the confidentiality by a Party of the source code of the Software (if an escrow release occurs) that results in a termination of the license, to return promptly any copies of such Confidential Information to STS; and

XI.1.5. to use such Confidential Information only for purposes allowed under this Agreement.

XI.2 Excluded Disclosures. These obligations shall not apply to any Confidential Information which was legally in the recipient's possession, excluding under the Existing Agreements, prior to receipt from the source and that:

XI.2.1. was received in good faith from a third party (other than the Parties’ contractors, advisors or attorneys) not subject to a confidential obligation to the source;

XI.2.2. now is or later becomes publicly known through no breach of confidential obligation by the recipient;

XI.2.3. was developed by the recipient without having access to any of the Confidential Information received in confidence from the source; or

XI.2.4. which is required to be disclosed pursuant to subpoena or other process issued by a court or administrative agency having appropriate jurisdiction, provided that the Party receiving the subpoena or process gives immediate notice to the other to permit the other to seek a protective order or an exemption from such requirement.

Article XII
Miscellaneous

XII.1 Notices. All notices or demands by any Party shall be in writing and shall be sent by certified mail, return receipt requested, with a copy to the facsimile number provided below. Notices so mailed shall be deemed received the earlier of (a) seven (7) days after being deposited in a United States Post Office box, postage prepaid, properly addressed to the mailing addresses stated herein or to such other addresses as a Party may from time to time specify in writing or (b) the date any individual for the Party signed for the certified mail. Any notice so addressed and otherwise delivered shall be deemed to be given when actually received by the addressee.

City: City Attorney

1221 SW 4^th Avenue, Room 430

Portland, OR 97204

FAX: (503) 823-3089

with copy to: Director of Water Bureau

Portland Building

1120 S.W. 5^th Avenue, Room 600

Portland, OR 97204

FAX: (503) 823-6113

STS: Severn Trent Systems

Two Chasewood Park

20405 St. Hwy 249, Suite 600

Houston, Texas 77070

Attention: George Mollere

FAX: (281) 290-1535

with copy to: Haynes and Boone, LLP

Attention: Ann Newton

1000 Louisiana, Suite 4300

Houston, Texas 77002

FAX: (713) 236-5506

XII.2 Counterparts. This Agreement and/or facsimile copies of this Agreement may be signed in counterparts by one or more of the Parties, all of which (this original Agreement and one or more facsimile copies of this Agreement, including facsimile copies of signatures), taken together, shall constitute signature of this Agreement. This Agreement shall be binding upon and inure to the benefit of each of the Parties and their respective permitted assigns and other successors-in-interest.

XII.3 Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Oregon, without regard to its conflicts of law provisions, and without regard to the United Nations Convention on the International Sale of Goods. Any action brought to enforce this Agreement shall be brought in federal court in Portland, Oregon.

XII.4 Disputes. The parties agree that in the event of a dispute as to any issues under this Agreement, the parties shall engage in the following process to attempt in good faith to resolve any disputes:

XII.4.1. Upon receipt of written notice of the dispute, the parties shall schedule a meeting of a senior level designated representative of each party within five (5) business days to negotiate a resolution in good faith to the dispute. If such negotiations are not successful, the parties agree that the next step shall be implemented within fifteen (15) business days.

XII.4.2. The parties shall engage in non-binding mediation before Judge Leavy or his designee on the issue. If Judge Leavy is not available or unwilling to serve or appoint a designee, the parties shall mutually agree upon a mediator, and if unable to agree, shall ask the federal court to appoint one of its judges as mediator.

XII.4.3. If the mediation initiated under Subsection 12.4.2 is not successful, the parties shall each have the right to pursue their rights in court.

XII.5 Survival. The following Articles and Sections shall survive termination of this Agreement: Article III, Article IV, Article V, Article VI, Article XI, 12.3, 12.5, and 12.15.

XII.6 Further Actions. Each of the Parties shall promptly and fully cooperate, by executing and delivering such documents and by taking such other actions as are necessary and reasonable, to effectuate the intent of this Agreement.

XII.7 Press Release. The Parties agree to develop a joint statement to the press, which will be presented by both Parties as the sole statement of the Parties related to this Agreement or the Software License and Maintenance Agreement. The Parties, directors, officers, city council members, officials, commissioners and their representatives shall not make any statements that contradict such joint statement.

XII.8 Circumvention or Frustration of Purpose. The Parties specifically agree not to attempt to circumvent, repudiate or otherwise attempt to treat this Agreement as void or unenforceable through any proceedings or actions.

XII.9 Costs and Expenses. Each Party shall bear its own costs and fees with respect to the negotiation, preparation and execution of this Agreement. However, upon the occurrence of any default under this Agreement, the defaulting Party shall pay all damages, costs and expenses, including reasonable attorney's fees and other expenses, incurred by the non-defaulting Party in recovering such damages or otherwise in enforcing the provisions of this Agreement.

XII.10 Entire Agreement. With respect to the subject matter of this Agreement and specifically excluding the Software License and Maintenance Agreement, this Agreement constitutes the entire agreement between the Parties, which shall not be modified or amended except by written agreement signed by both Parties. With respect to the subject matter of this Agreement and except as expressly provided in this Agreement, all and prior agreements and understandings between the Parties related to the matters set forth herein are rescinded. No oral understandings, statements, promises or inducements contrary to the terms of this Agreement exist. This Agreement cannot be changed or terminated orally.

XII.11 Construction. This Agreement has been prepared by the joint efforts of the Parties’ respective attorneys, and the Parties agree that this Agreement should not be construed against either of the Parties on the basis of which of the Parties prepared this Agreement.

XII.12 Assignment. This Agreement shall be binding upon and inure to the benefit of each of the Parties. This Agreement and any rights or claims hereunder shall not be assigned, transferred (by operation of law, merger or change of control), pledged by either Party without the prior written consent of the other Party, which may be withheld in the sole discretion of the other party. Any attempted assignment in violation of this provision shall be void ab initio.

XII.13 Severance. If at any time after the effective date of this Agreement, any provision of this Agreement shall be held to be illegal, void or unenforceable by a court of competent jurisdiction, such provision shall have no effect upon, and shall not impair the enforceability of any other provision of this Agreement.

XII.14 Waiver. The waiver by either of the Parties of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by either of the Parties.

XII.15 Equitable Relief. In the event of a breach or threatened breach of any of the provisions of this Agreement by the Parties (except for the Payment provision), the Parties acknowledge and agree that: (i) such breach is likely to cause significant and irreparable harm to the other Party and will not be susceptible of cure by the payment of monetary damages and (ii) Licensor shall be entitled to immediately terminate the license to the Software and to obtain injunctive relief and/or other equitable relief, in addition to other remedies afforded by law, all of which shall be cumulative, to prevent or restrain such breach of this Agreement. In the event that either Party shall employ an attorney to enforce the terms and conditions of this Agreement, the prevailing Party in such action be entitled to recover all reasonable costs and expenses sustained by the enforcing Party in the enforcement of such terms and obligations, including but not limited to reasonable attorneys’ fees and expenses, costs of collection and court costs.

[Signature page follows]

IN WITNESS WHEREOF the Parties have executed this Agreement as of the Effective Date.

City of Portland Computer Systems & Applications
Inc., a Texas corporation,
d/b/a Severn Trent Systems

By: By:

Name: Name:

Title: Title:

Date: Date:

Exhibit A

Software License and Maintenance Agreement