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EXHIBIT 10.58
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (this "Agreement") dated March 17, 2000, is
entered into by and among TNGC Holdings Corporation, a Delaware corporation
("TNGC"), and TransTexas Gas Corporation, a Delaware corporation ("TransTexas").
TNGC and its affiliates, including, without limitation, TransAmerican Natural
Gas Corporation ("TransAmerican"), are referred to in this Agreement as the
"Services Buyers."
The Services Buyers wish to retain TransTexas to render the services
described in Section 1.1 hereof, and TransTexas wishes to provide such services,
pursuant to the terms and conditions stated herein.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties agree as follows:
I.
SERVICES
1.1 Services. Subject to the terms and provisions set forth in this
Agreement, TransTexas shall, at a Services Buyer's request, provide to such
Services Buyer administrative, legal, accounting (including accounts payable and
accounts receivable), purchasing, treasury, tax, risk management, information
systems, human resources and employee benefits services (the "Services").
1.2 Personnel Matters. Without limiting the generality of Section 1.1
of this Agreement, TransTexas shall provide all labor and administrative,
supervisory and other personnel necessary to perform the Services; provided that
TransTexas shall have the right to use independent contractors (at its own
expense unless the prior written approval of the Services Buyers has been
obtained) in performing such Services as it may deem advisable in its reasonable
judgment.
1.3 Independent Contractor Status. TransTexas shall perform the
Services as an independent contractor. The number of employees, the selection
and retention of such employees, the hours of labor and the compensation for
services to be paid to any and all such employees of TransTexas shall be
determined by TransTexas. A supervisor, manager or officer of TransTexas with
whom the Services Buyers may consult concerning the Services shall be available
to the Services Buyers at all reasonable times. None of the employees, agents,
contractors and subcontractors hired by TransTexas to perform services hereunder
shall be deemed to be the employees, agents, contractors and subcontractors of
the relevant Services Buyer unless separately contracted by the relevant
Services Buyer.
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1.4 Necessary Information. The Services Buyers shall furnish to
TransTexas all information, programs, know-how, methods or methodology within
the Services Buyers' control as may be necessary or appropriate for the
performance of the Services by TransTexas.
1.5 Waiver of Conflicts in Providing Legal Services.
Each of the parties acknowledges that the provision of legal services
hereunder by lawyers of TransTexas' Legal Department may result in conflicts of
interest between one or more of the Services Buyers and TransTexas and its
affiliates (the "TransTexas Group"). The parties agree that such lawyers will
not represent any of the Services Buyers in any matter in which their interests
are opposed to the interests of one or more members of the TransTexas Group.
However, it is agreed that such lawyers may represent one or more members of the
TransTexas Group and at the same time provide legal services to one or more of
the Services Buyers in connection with unrelated matters.
Rule 1.06 of the Texas Disciplinary Rules of Professional Conduct (the
"Rules"), by which Texas lawyers are governed, allows for multiple
representation in the circumstances described above if (i) the lawyer reasonably
believes that the representation of each client will not be materially affected
and (ii) each potentially affected client consents to such representation after
full disclosure of the existence, nature, implications and possible adverse
consequences of the common representation and the advantages involved, if any.
Some of the potential adverse consequences of representation of both
one or more members of the TransTexas Group and one or more of the Services
Buyers in unrelated matters at the same time are as follows:
(a) A lawyer representing a member of the TransTexas Group against
a Services Buyer might have feelings of divided loyalty, and
as a result might give preference to the interests of one
client over those of the other client.
(b) A lawyer might have to withdraw from representation if an
unwaivable conflict appears.
(c) A lawyer representing a Services Buyer might fail to recognize
a viable claim by such Services Buyer against a member of the
TransTexas Group because of such lawyer's relationship with
TransTexas and representation of members of the TransTexas
Group in unrelated matters. Conversely, a lawyer representing
a member of the TransTexas Group might fail to recognize a
viable claim by such member of the TransTexas Group against a
Services Buyer, for the reasons stated in Paragraph (a) above.
(d) A lawyer might intentionally or inadvertently share one
client's confidential information with another.
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Each party hereto consents to such multiple representations by the
lawyers in the TransTexas Legal Department and waives the potential conflicts to
the extent that the Rules permit such waiver; provided, however, that either
party may revoke such waiver by giving written notice to the other party with a
copy to the TransTexas Legal Department.
Each party hereto acknowledges that, by paying the Services Fee
(defined below), it may be deemed to be reimbursing TransTexas for compensation
paid to lawyers of the TransTexas Legal Department. Each party hereto receiving
legal services from members of the TransTexas Legal Department pursuant hereto
hereby consents to the lawyers of the TransTexas Legal Department receiving
compensation for such services from TransTexas.
II.
COMPENSATION
2.1 Services Fees. In consideration of the Services to be provided by
TransTexas pursuant to this Agreement, the Services Buyers shall pay to
TransTexas, in cash, a fee in the amount of $2,000.00 per month (the "Services
Fee").
2.2 Reimbursable Expenses. In addition to the Services Fee provided for
in Section 2.1 above, TransTexas shall be entitled to be reimbursed by each
Services Buyer for expense items paid by TransTexas to third parties and
directly attributable to Services provided to that Services Buyer.
2.3 Allocation. The Services Buyers may allocate the obligation for
payments under this Agreement at their discretion, provided no such allocation
shall relieve any Services Buyer from liability to TransTexas to pay TransTexas
for Services provided to such Services Buyer.
2.4 Joint and Several Liability. The Services Buyers shall be jointly
and severally liable for the Services Fee.
III.
MISCELLANEOUS
3.1 Insurance Policies and Benefits Plans. The parties acknowledge that
certain insurance policies of TNGC or TransAmerican include coverage for
TransTexas, and that certain insurance policies of TransTexas include coverage
for the Services Buyers. The parties hereto agree to use commercially reasonable
efforts promptly to amend or replace such policies so that TransTexas is not
insured under any Services Buyers' policy and no Service Buyer is insured under
any TransTexas policy. TransTexas is currently included in TransAmerican's 401K
plan. The parties agree to use commercially reasonable efforts promptly to
create a new 401K plan in which only TransTexas employees will participate.
3.2 Term. This Agreement shall become effective upon the date first
noted above and shall continue in effect until (i) terminated, with respect to
such party's rights and obligations
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hereunder, by any party hereto upon 30 days written notice to the other party or
(ii) September 30, 2001.
3.3 Amendments. This Agreement may not be amended.
3.4 Notice. All notices and other communications required or permitted
hereunder shall be in writing and, unless otherwise provided in this Agreement,
shall be deemed to have been duly given when delivered in person or my mail or
when dispatched by telegram or electronic facsimile transfer (confirmed in
writing by mail simultaneously dispatched) to the addressee at the address
specified below:
If to any of the Services Buyers:
c/o TNGC Holdings Corporation
1300 North Sam Houston Parkway East
Suite 300
Houston, Texas 77032
If to TransTexas:
c/o TransTexas Gas Corporation
1300 North Sam Houston Parkway East
Suite 310
Houston, Texas 77032
or such other address as either party may from time to time designate
by like notice.
3.5 Limitations on Assignment. No party to this Agreement shall assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of the other parties. Notwithstanding the foregoing,
nothing herein shall prohibit TransTexas from hiring any subcontractors or
agents to provide the Services; provided that such hiring shall not relieve
TransTexas of any of its obligations hereunder.
3.6 Governing Law. This Agreement shall be governed by the internal
laws of the State of Texas without regard to principles of conflicts of law.
3.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed an original, but
all of such counterparts together shall constitute one and the same instrument.
3.8 Entire Agreement. This Agreement constitutes the entire agreement
of the parties with respect to the subject matter hereof.
3.9 Headings. The section headings of this Agreement are only for the
purpose of reference and shall not affect the meaning hereof.
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3.10 Cancellation of Prior Services Agreements. Upon execution and
delivery of this Agreement, any and all services agreements between TNGC or any
of its affiliates and TransTexas which may be in effect immediately prior to
such execution and delivery shall be deemed canceled and of no further force or
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TNGC HOLDINGS CORPORATION
By:
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TRANSTEXAS GAS CORPORATION
By:
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