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Exhibit 10.8
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TRANSITION
SERVICES AGREEMENT
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This TRANSITION SERVICES
AGREEMENT ("Agreement") is made and entered into this 30th day of
September, 2005, between EnCana Oil & Gas (USA) Inc.
("EnCana"), and The Exploration Company of Delaware, Inc.
("TXCO").
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RECITALS:
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Under the terms of that
certain Purchase and Sale Agreement dated September 26, 2005
("Purchase Agreement"), EnCana has, as of the date hereof, acquired
all of TXCO's interests in certain oil and gas properties and
related assets located in Texas ("Assets").
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EnCana desires that TXCO
continue to perform certain Services (as hereafter defined) in
connection with the operation of the Assets and transition to
EnCana, on an interim basis.
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AGREEMENT:
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In consideration of the
foregoing premises and mutual covenants and obligations contained
in this Agreement, the undersigned parties (collectively, the
"Parties," and individually, a "Party") agree as follows:
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ARTICLE I.
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SERVICES
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The
duties to be performed hereunder include the following:
(collectively, the "Services"): (i) continuation of certain
accounting functions and tax administration; (ii) continuation of
all functions required for ongoing field operations of the Assets,
iii) land administration; and (iv) gas marketing, all as more fully
described on Schedule "A" hereto.
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ARTICLE II.
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RESPONSIBILITIES OF
THE PARTIES
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2.1 Performance of
Services.
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Except
as otherwise set forth in this Agreement, commencing on October 1,
2005, TXCO shall perform the Services on behalf of and at the
general direction of EnCana for the Term (as hereafter defined)
specified in Article. III. TXCO shall consult frequently with
EnCana, as appropriate, and inform EnCana as soon as reasonably
possible of all matters arising during the performance of such
Services which TXCO, in the exercise of its reasonable judgment,
considers important. In addition, TXCO shall reasonably respond to
inquires made by EnCana in regard to the Services. Each Party shall
cooperate with each other and use reasonable commercial efforts to
perform and support the completion of the Services in an efficient
and timely manner. In the performance of the Services, TXCO shall
not enter into any contracts with third parties without the express
consent of EnCana.
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EnCana
may consult with employees of TXCO during normal business hours at
TXCO's San Antonio office and/or field office during the Term,
provided such consultations do not unreasonably interfere with the
performance by those employees of their duties. The parties
acknowledge that EnCana may commence new drilling and other
exploration activities on the Assets during the term of this
Agreement and such activities will not be a part of this
Agreement.
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2.2 Standard of Care,
Indemnification.
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In the absence of specific
instruction from EnCana, TXCO shall have the right and duty to
perform the Services in accordance with its reasonable judgment and
in a manner consistent with the way it performed such Services
prior to October 1, 2005. TXCO shall have no liability to EnCana
related to the performance of the Services, except for liability
resulting from TXCO's gross negligence, willful misconduct or
actual fraud.
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2.3 Reimbursement for Services.
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A. TXCO shall charge EnCana an amount equal to its proportionate
share of the costs chargeable to the operation of the Assets in
accordance with the "Accounting Procedure - Joint Operations"
(COPAS -Exhibit C) of the applicable operating agreements, as
payment for the Services.
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B. This Agreement does not
create a relationship of employer-employee between or among the
Parties; nor does it create a partnership or joint venture
relationship between the Parties.
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ARTICLE III.
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TERM
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This Agreement shall commence on October 1, 2005 and shall
terminate November 30, 2005.
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ARTICLE IV.
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LAWS, REGULATIONS
AND FORCE MAJEURE
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4.1 Governing Law;
Jurisdiction; Process.
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A. This Agreement and the
transactions contemplated hereby shall be governed by and
interpreted in accordance with the laws of the State of Texas.
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B. Subject to the arbitration
agreement in 6.7, the Parties consent to personal jurisdiction in
any legal action, suit or proceeding with respect to this Agreement
in any court, federal or state, located in Dallas, Texas, having
subject matter jurisdiction and with respect to any such claim, the
Parties irrevocably waive, to the fullest extent permitted by law,
any claim, or any objection that the Parties may now or hereafter
have, that venue or jurisdiction is not proper with respect to any
such legal action, suit or proceeding brought in such court in
Dallas, Texas, including any claim that such legal action, suit or
proceeding brought in such court has been brought in an
inconvenient
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2
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forum and any claim that the Parties are not subject to personal
jurisdiction or service of process in such Dallas, Texas forum.
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4.2 Force
Majeure.
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In
the event any Party hereto being rendered unable, wholly or in
part, by Force Majeure to carry out its obligations under this
Agreement, other than to make payments then or thereafter due
hereunder, it is agreed that the obligations of such Party, so far
as they are affected by such Force Majeure, shall be suspended
during the continuance of
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