EXHIBIT 10.7
AMENDED
SERVICE AGREEMENT
THIS SERVICE AGREEMENT is entered into this 1st day of January, 1997,
by and between ▇▇▇▇▇▇ OIL CORPORATION, a Michigan corporation ("MOC"),
Eagle Investment, Inc., a Michigan corporation ("Eagle"), and supersedes
all similar and existing agreements.
RECITALS
Eagle and desire to obtain various services and the expertise
necessary to acquire, maintain, develop, select, explore and operate oil
and gas leases in the State of Michigan, throughout the Continental United
States and internationally. Eagle does not desire to hire the personnel
necessary to perform such services, as the frequency and extent of Eagle's
oil and gas investments may vary dramatically from time to time.
MOC employs various individuals with experience in the areas of
general administration, oil and gas lease acquisition, lease management,
geological and geophysical sciences, mapping, drafting, engineering, and
financial and tax management and general estate planning. MOC desires to
provide its services to Eagle on the terms and conditions set forth in this
Agreement.
ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:
1. Services. MOC agrees to provide Eagle with such services as the
parties agree are necessary and desirable to permit Eagle to operate their
business in the ordinary course, including, but not limited to, the
following:
(a) Recommend the acquisition of certain oil and gas mineral
leases, minerals or fee interests.
(b) Rental and expiration recommendation reporting.
(c) Coordination of geological and geophysical services.
(d) Development of prospects.
(e) Coordination of permitting, drilling, completion, facility
construction and operation, contract negotiations of oil and
gas purchase and sale contracts and negotiation of farm-in
and farm-out agreements.
(f) Maintenance of joint venture participant communication and
reporting.
(g) Raising capital or investment funds as desired by Eagle.
(h) Representation of Eagle through state, national and
international industry organizations and associations.
(i) Representation on legal and legislative matters and
regulatory affairs.
(j) Accounting, financial, and tax preparation and analysis,
including budget preparation.
(k) Risk management, securing of all personal, property and
casualty insurance.
(l) Review and/or development of annual reserve appraisal.
(m) Drafting and cartographic services.
(n) Clerical, tax and/or management functions associated with
any of the above services, including securing of any and all
outside professionals.
(o) Analyze and recommend venture capital opportunities
available outside the oil and gas industry.
(p) Engineering and consulting services to Eagle to efficiently
and economically maintain the producing properties.
2. MOC Personnel. It is understood that the services provided to
Eagle hereunder will be performed by those employees of MOC who perform
equivalent services for MOC in the normal course of their employment.
Accordingly, MOC shall not be obligated to make available any services to
the extent that doing so would unreasonably interfere with the performance
by an MOC employee of services for MOC or otherwise cause unreasonable
burden to MOC, in light of the purposes of this Agreement. The parties
agree that upon thirty (30) days' prior written notice to Eagle, MOC may
reduce the level of any services provided under this Agreement consistent
with a reduction of MOC's provision of comparable services for itself.
Notwithstanding the other provisions of this Agreement to their contrary,
the obligation of MOC to make available services may be terminated in whole
or in part by MOC or Eagle upon not less than sixty (60) days' prior
written notice to Eagle or to MOC, as the case may be.
3. Compensation.
(a) Fee for Services. CEM and Eagle will each pay to MOC a
fixed fee of $50,000 per quarter, subject to (annual)
adjustments to be negotiated by the parties, for making the
services available whether or not Eagle elects to utilize
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the services; provided, however, that in the event of the
termination by MOC or by Eagle of MOC's obligations to
provide any of the services, such fixed fee shall be
appropriately reduced. Such fees shall be due and payable
by Eagle on the first business day of each quarter during
the period in which services are being provided. Eagle
shall also pay to MOC such additional fees in an amount to
be agreed to by the parties as from time to time may be
required for certain specialized services provided by MOC.
(b) Expenses. Eagle shall reimburse MOC for its out-of-pocket
expenses (other than any wage or fringe benefit costs of MOC
employees) incurred in providing the services. Such
reimbursement payments shall be due and payable 15 days
after receipt of invoices therefor.
4. Independent Contractor Status. MOC shall render and perform the
services hereunder as an independent contractor in accordance with its own
standards, subject to its compliance with the provisions of this Agreement
and with all applicable laws, ordinances and regulations. Neither this
Agreement nor any operation under it is intended to be, or shall be deemed
to be, or shall be treated as a general or limited partnership,
association, joint venture, or agency relationship between MOC and Eagle.
5. Disclaimer; Limited Liability.
(a) MOC makes no express or implied representation, warranty, or
guarantee relating to the services to be performed under
this Agreement or the quality or results of the services.
(b) MOC shall not be liable to Eagle for any expense, claim,
loss or damage, including, without limitation, indirect,
special, consequential or exemplary damages suffered other
than by reason of MOC's intentional failure to perform, or
gross negligence in performing, the services pursuant to
this Agreement.
6. Confidentiality. Each party shall hold, and cause its affiliates
and their consultant and advisors to hold, in strict confidence, all
information concerning the other party in its possession or furnished by
the other or the other's party in its pursuant to this Agreement (except to
the extent that such information can be shown to have been (a) in the
public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and neither party shall release or
disclose such information to any other person, except its advisors, bankers
and other consultants and advisors, unless compelled to disclose by
judicial or administrative process or, as advised by counsel, by other
requirements of law. Each party shall be deemed to have satisfied its
obligation to hold confidential information concerning or supplied by the
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other party if it exercises the same care as it takes to preserve
confidentiality for its own similar information.
7. Term and Effective Date. This Agreement shall become effective
January 1, 1997, and may be canceled at any time for any reason by either
party hereto by giving the other party to this agreement sixty (60) days'
advance written notice.
8. Warranty; Indemnification. MOC does not warrant the title to any
instrument offered to Eagle. Eagle agrees to defend, indemnify, and hold
harmless MOC against and in respect of any and all loss, cost, damage or
expense, incurred with respect to any claims, actions, suits, proceedings
or assessments arising out of the services provided by MOC or the
settlement thereof, including, without limitation, interest, penalties and
reasonable attorneys fees, costs and expenses.
9. Assignment. Neither party to this agreement may assign, convey,
transfer or sell its rights and/or obligations herein without the advance
written consent of the other party hereto.
10. Entire Agreement. This Agreement encompasses the entire
understanding and agreement between the parties and hereby supersedes any
and all prior or contemporaneous agreements, oral or written, made between
the parties with respect to the subject matter hereof and the transactions
herein contemplated.
11. Delay and Waiver. No delay on the part of either party in
exercising any of its respective rights hereunder of the failure to
exercise the same, nor the acquiescence in or waiver of a breach of any
term, provision or condition of this Agreement shall be deemed or construed
to operate as waiver of any such rights or acquiescence thereto, except for
the specific instance of delay, waiver or acquiescence.
12. Amendment. This Agreement may not be changed orally, but only by
an agreement in writing signed by the party against whom enforcement of any
waiver, change or modification or discharge is sought.
13. Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs,
representatives, successors and assigns. No provision of this Agreement
shall in any other way inure to the benefit of any third person so as to
constitute any such person as a third party beneficiary of the Agreement or
of any one or more of the terms hereof, or otherwise give rise to any cause
of action in any person not a party hereto.
14. Severability. The invalidity or supersedes of any provision of
this Agreement pursuant to any applicable law shall not affect the validity
or enforceability of the remaining provisions hereof, but this Agreement
shall be construed as if not containing the provision held invalid or
unenforceable.
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15. Applicable Law. This Agreement has been made and entered into
the State of Michigan, and in the event of any dispute hereunder this
Agreement shall be governed by and construed in accordance with the laws of
the State of Michigan.
16. Headings. The headings to the various paragraphs of this
Agreement have been inserted for convenient reference only, and shall not
have the effect of amending or changing the express terms and provisions of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
▇▇▇▇▇▇ OIL CORPORATION
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President
EAGLE INVESTMENTS, INC.
By: /s/▇.▇. ▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇
Its: ___________________________________
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