Exhibit 10.1

 

ADMINISTRATIVE SERVICES AGREEMENT

 

THIS ADMINISTRATIVE SERVICES AGREEMENT, dated as of April 29, 2015 (this
“Agreement”), is entered into by and among Patriot Energy, Inc., a North Dakota
corporation (“Patriot”), and Breitling Energy Corporation, a Nevada corporation
(“Company”) (collectively, the “Parties”).

 

WITNESSETH:

 

WHEREAS, Company is in the business of acquiring working interests and royalty
interests in oil and gas properties and offering a portion of those interests to
industry partners in exchange for keeping an interest in those properties;

 

WHEREAS, Patriot is in the business of offering working interests and royalty
interests to clients and retaining a portion of such interests;

 

WHEREAS, Company anticipates that it will continue to source prospects for
working interest and royalty interest investments that Company will not acquire
(“Prospects”); and

 

WHEREAS, Company desires to give Patriot access to Prospects in exchange for
Patriot’s agreement to pay certain fees to Company.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Parties hereto agree as follows:

 

Section 1. Term. This Agreement shall be effective as of the date hereof and
shall continue, with respect to each Company Administrative Service (as defined
below), through the third anniversary of the date hereof (the “Termination
Date”), which date may be extended by agreement among the parties.

 

Section 2. Company Administrative Services. From the date hereof through the
Termination Date (the “Term”), Company shall provide to Patriot (each, a
“Company Administrative Service” and collectively, the “Company Administrative
Services”) access to certain of the Company’s Prospects for acquisitions of
working interests and/or royalty interests. Notwithstanding the foregoing, the
Company may, in its own discretion, elect to acquire all or any part of any
Prospect of which it becomes aware. Patriot shall not have the right to acquire
all or any part of any Prospect that the Company desires to acquire for itself.
If the Company generates a Prospect and decides not to acquire any or all of it,
the Company shall offer the Prospect to Patriot hereunder.

 

 

 

Section 3. Billing and Payment.

 

(a) Patriot shall pay Company for the Company Administrative Services: (a)
$300,000 per month, (b) $250,000 per Prospect delivered to Patriot, and (c) a
carried interest in each Prospect acquired in an the amount up to 25% of such
Prospect acquired by Patriot (regardless of the amount of the Prospect resold by
Patriot to clients). Company shall provide Patriot with an invoice within thirty
(30) days following each month of the Term detailing the fees incurred by
Patriot during such month.

 

(b) Unless otherwise provided herein, Patriot shall pay all invoices by wire
transfer of immediately available funds in accordance with the instructions
provided by Company in writing to Patriot, as applicable, not later than 10 days
following receipt by Patriot of Company’s invoice. Patriot shall not offset any
amounts owing to it by Company against amounts payable by Patriot hereunder or
under any other agreement or arrangement. Should Patriot dispute any portion of
any invoice, Patriot shall promptly notify Company in writing of the nature and
basis of the dispute.

 

(c) If Patriot fails to pay the full amount of any invoice within 30 days after
the relevant payment date, such failure shall be considered a material breach of
this Agreement (except to the extent of any invoiced amounts reasonably disputed
by Patriot in good faith and of which dispute Patriot has notified Company in
accordance with the requirements of this Agreement). Company may, without
liability, suspend its obligations hereunder to provide any and all of the
Company Administrative Services to Patriot until such time as such invoices have
been paid in full (except to the extent of any invoiced amounts reasonably
disputed by Patriot in good faith and of which dispute Patriot has notified
Company in accordance with the requirements of this Agreement). The remedy
provided to Company by this Section 3(c) shall be without limitation of any
other applicable provisions of this Agreement.

 

(d) All charges and fees to be paid by Patriot to Company under this Agreement
are exclusive of any applicable taxes required by law to be collected from
Patriot (including withholding, sales, use, excise or services taxes, which may
be assessed on the provision of the Company Administrative Services hereunder).
If a withholding, sales, use, excise or services tax is assessed on the
provision of any of the Company Administrative Services provided under this
Agreement, Patriot shall pay directly, reimburse or indemnify Company for such
tax. The parties shall cooperate with each other in determining the extent to
which any tax is due and owing under the circumstances, and shall provide and
make available to each other any resale certificate, information regarding
out-of-state use of materials, services or sale, and other exemption
certificates or information reasonably requested by the other party.

 

Section 4. Independent Contractors. Company is and shall remain at all times
independent contractors with respect to Patriot and under no circumstances shall
Company be deemed to be a partner, employee, agent or representative of Patriot.
Company shall not be authorized, and none of Company’s employees, agents or
representatives shall at any time attempt to act on behalf of Patriot other than
as authorized by Patriot or to bind Patriot in any manner whatsoever to any
obligations. Neither Company nor Company’s employees, agents or representatives,
shall engage in any acts that may lead any person to believe that such party is
an employee, agent or representative of Patriot.

 

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Section 5. Notices. All notices or communications hereunder shall be in writing
(including facsimile or similar writing) addressed as follows:

  

To Company:

 

Breitling Energy Corporation

1910 Pacific Avenue, Suite 12000

Dallas, Texas 75201

Attn: Jeremy Wagers, Chief Operating Officer

 

To Patriot:

 

Patriot Energy, Inc.

1910 Pacific Avenue, Suite 12000

Dallas, Texas 75201

Attention: Michael Miller

 

Any such notice or communication shall be deemed given (1) when made, if made by
hand delivery, and upon confirmation of receipt, if made by facsimile, (2) one
business day after being deposited with a next-day courier, postage prepaid, or
(3) three business days after being sent certified or registered mail, return
receipt requested, postage prepaid, in each case addressed as above (or to such
other address as such party may designate in writing from time to time).

 

Section 6. Entire Agreement. This Agreement, its exhibits, schedules and annexes
constitute the entire agreement between the Parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings,
oral and written, between the Parties hereto with respect to the subject matter
hereof. No representation, warranty, promise, inducement or statement of
intention has been made by either Party which is not embodied in this Agreement
or such other documents, and neither Party shall be bound by, or be liable for,
any alleged representation, warranty, promise, inducement or statement of
intention not embodied herein or therein.

 

Section 7. Amendments; Waivers. No amendment, modification, waiver or discharge
of this Agreement or any provision of this Agreement shall be effective against
any Party, unless such Party shall have consented thereto in writing. No waiver
of any condition, or of the breach of any provision hereof, in any one or more
instances, shall be deemed to be a further or continuing waiver of such
condition or breach. Delay or failure to exercise any right or remedy shall not
be deemed the waiver hereof.

 

Section 8. Termination.

 

(a) Company may terminate this Agreement at any time upon written notice to
Patriot in the event of a material breach of this Agreement by Patriot. Such
termination shall become effective thirty (30) days from the date of Patriot
receipt of such notice unless the breach is cured prior to the end of said
30-day period.

 

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(b) Patriot may terminate this Agreement at any time upon written notice to
Company in the event of a material breach of this Agreement by Company. Such
termination shall become effective thirty (30) days from the date of Company’s
receipt of such notice unless the breach is cured prior to the end of said
30-day period.

 

Section 9. Confidentiality. Each party shall, and shall cause each of its
Affiliates and each of its and their officers, directors and employees to, hold
all information relating to the business of the other party disclosed to it by
reason of this Agreement, specifically including the Client List (the
“Confidential Information”) confidential, and shall not disclose or permit to be
disclosed any such Confidential Information to any third party unless legally
compelled to disclose such information; provided, however, that to the extent
that a party receiving Confidential Information hereunder may receive the
written advice of outside counsel that disclosure of any Confidential
Information is required in order that such party not commit a violation of law,
such party: (a) to the extent not inconsistent with such party’s obligation to
disclose, will give the other party hereto prompt notice of such request so that
such party may seek an appropriate protective order; (b) may only disclose such
information if it shall first have used commercially reasonable efforts to
obtain an appropriate protective order or other satisfactory assurance of
confidential treatment for the information required to be so disclosed; and (c)
if such protective order or other remedy is not obtained, or the other party
waives such party’s compliance with the provisions of this Section 9, shall only
furnish that portion of the Confidential Information which is legally required
to be so disclosed. As used herein, “Confidential Information” does not include
any information that: (i) is or becomes generally available to the public or the
retail industry other than as a result of a disclosure, directly or indirectly,
by the party receiving the Confidential Information; or (ii) was available to
the receiving party on a non-confidential basis prior to its disclosure by the
disclosing party or becomes available to the receiving party on a
non-confidential basis, in each case from a source other than the disclosing
party or its representatives, which source was not itself known to be bound by a
confidentiality agreement with the disclosing party or its representatives and
had not, to the knowledge of the receiving party, received such information,
directly or indirectly, from a third party so bound. Following the termination
of this Agreement, Patriot shall return to Company or destroy all copies of the
Client List and shall make no further use thereof.

 

Section 10. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas without regard to
conflict of laws principles. Each Party hereto hereby irrevocably submits to the
personal and subject matter jurisdiction of the United States District Court
Northern District of Texas, or any court of the State of Texas located in Dallas
County, over any suit, action or proceeding arising out of or relating to this
Agreement. Each Party hereby irrevocably waives to the fullest extent permitted
by law, (a) the right to trial by jury; (b) any objection that they may now or
hereafter have to the venue of any such suit, action or proceeding brought in
any such court; and (c) any claim that any such suit, action or proceeding has
been brought in an inconvenient forum. Final judgment in any suit, action or
proceeding brought in any such court shall be conclusive and binding upon each
Party duly served with process therein and may be enforced in the courts of the
jurisdiction of which either Party or any of their property is subject, by a
suit upon such judgment.

 

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Section 11. Headings. The headings appearing at the beginning of sections
contained herein have been inserted for identification and reference purposes
and shall not be used to determine the construction or interpretation of this
Agreement.

 

Section 12. Counterparts. This Agreement may be executed in counterpart copies,
all of which when taken together shall be deemed to constitute one and the same
original instruments.

 

Section 13. Binding Effect; Benefits. This Agreement shall inure to the benefit
of and be binding upon the Parties hereto and their respective successors and
assigns. Notwithstanding anything contained in this Agreement to the contrary,
nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the Parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or any reason of this
Agreement.

 

Section 14. Assignability. Neither this Agreement nor any of the Parties’ rights
hereunder shall be assignable by any Party hereto without the prior written
consent of the other Party hereto.

 

Section 15. Release. Company shall not be liable to Patriot for (1) delays,
errors, malfunctions or breakdowns relating to the Company Administrative
Services, unless such delays, errors, malfunctions or breakdowns are
attributable to or are the result of Company’s gross negligence or willful
misconduct, or (2) any action or omission taken or not taken pursuant to
instructions properly received from Patriot, unless such action or omission, as
the case may be, is attributable to or is the result of Company’s breach of its
obligations hereunder or its gross negligence or willful misconduct.

 

Section 16. Indemnification.

 

(a) Company shall indemnify, defend and hold harmless Patriot and its present
and future officers, directors, employees, agents and representatives (each
individually referred to herein as a “Patriot Indemnified Party”), from and
against any and all liabilities resulting from any claim arising in connection
with, or related to, this Agreement and the Company Administrative Services
provided hereunder, except to the extent those claims arise out of the gross
negligence or willful misconduct of the Patriot Indemnified Party.

 

(b) Patriot shall indemnify, defend and hold harmless Company, Company’s
Affiliates and Company’s delegates and their respective present and future
officers, directors, employees, agents and representatives (each individually
referred to herein as a “Company Indemnified Party”), from and against any and
all liabilities resulting from any claim arising in connection with, or related
to, this Agreement, except to the extent those claims arise out of the gross
negligence or willful misconduct of the Company Indemnified Party.

 

(c) Notwithstanding any other provision of this Agreement, neither party shall
be liable for lost profit, lost revenue or any other form of indirect,
incidental, special, consequential or punitive damages other than in connection
with a third party claim, even if that party has been informed of the
possibility of such damages.

 

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Section 17. Survival of Indemnification Obligations. The indemnification
obligations of each Party pursuant to this Agreement shall continue for a period
of two (2) years following the expiration or termination of this Agreement and
the Company Administrative Services provided hereunder.

 

Section 18. Notification of Claim. The Patriot Indemnified Party or the Company
Indemnified Party, as the case may be, shall give prompt written notice to the
other Party of the receipt of any claim or the commencement of any action which
is or may be covered by the applicable indemnity, but the failure to so notify
such Party shall not relieve the indemnifying Party of any liability that it may
have under this Agreement except to the extent that the defense of such action
is prejudiced thereby. Upon receipt of such notice, the indemnifying Party shall
immediately assume the defense thereof with counsel satisfactory to the other
Party. No compromise or settlement thereof may be effected by the indemnifying
Party without the other Party’s consent.

 

Section 19. Limitation of Damages. Notwithstanding anything contained herein to
the contrary, the liability of any Party under this Agreement for any breach,
default, or event of default under this Agreement shall be strictly limited to
such actual and incidental damages as were directly incurred by the
non-breaching or non-defaulting Party by reason of such breach, default or event
of default. In no event shall any Party ever be liable, nor shall any Party ever
recover, and hereby waives, any consequential or special damages (including but
not limited to lost profits or damages for lost business opportunity) other than
in connection with a third party claim.

 

Section 20. Force Majeure. No Party shall be liable for delays or failure in its
performance hereunder to the extent that such delay or failure of performance is
caused by any act of God, war, strike, lockout, labor dispute, work stoppage,
fire, act of government, or any other cause, whether similar or dissimilar,
beyond the control of such Party.

 

Section 21. Cooperation. Each of the Parties to this Agreement, when requested
by another Party, shall give all reasonable and necessary cooperation with
respect to any reasonable matters relating to the transaction contemplated by
this Agreement.

 

Section 22. Severability. The provisions of this Agreement shall be severable,
and any invalidity, non-enforceability or illegality of any provision or
provisions of this Agreement shall not affect any other provision or provisions
of this Agreement, and each term and provision of this Agreement shall be
construed to be valid and enforceable to the full extent permitted by law.

 

Section 23. No Third Party Beneficiaries. This Agreement has been entered into
solely for the benefit of the Parties that have executed it, and not to confer
any benefit or enforceable right upon any other party or entity. Accordingly, no
party or entity that has not executed this Agreement shall have any right to
enforce any of the provisions of it.

 

Section 24. Attorney’s Fees. The prevailing party in any action, suit,
proceeding, arbitration, or mediation, brought to enforce any matter under this
Agreement, shall be entitled to recover, in addition to any other available
remedies, its reasonable attorney’s fees and costs actually incurred in
connection with the action, suit, proceeding, arbitration or mediation.

 

[Remainder of this page intentionally left blank. Signature page follows.]

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their duly authorized officers as of the day and year first above written.

 

  PATRIOT ENERGY, INC.         By: /s/ Michael Miller   Name: Michael Miller    
Title: President

  

  BREITLING ENERGY CORPORATION         By: /s/ Chris Faulkner   Name: Chris
Faulkner   Title: President

 

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