**Exhibit10.2**

 

MANAGEMENT SERVICESAGREEMENT

 

This Management Services Agreement (“Agreement”), dated effective as of September 15, 2003, is entered into by and between Argosy International, Ltd., a Turks & Caicos Islands, British West Indies limited liability company (“Argosy”), and Ocean Resources, Inc., a Delaware corporation (“OCRI”).

 

ARTICLE I

DEFINITIONS

 

1.1. “Affiliate” of a Person shall mean aPerson that directly or indirectly controls, is controlled by, or is undercommon control with, the first Person. For purposes of this definition,“Control” when used with respect to any Person means the power to direct themanagement and policies of such Person, directly or indirectly, whether throughthe ownership of voting securities, by contract or otherwise; and the terms“Controlling” and “Controlled” have meanings correlative to the foregoing.

 

1.2. “ConfidentialInformation” shall have the meaning specified in Section 6.1.

 

1.3. “GovernmentalAuthority” shall mean any federal, state, local, or foreign government orgovernmental, quasi-governmental, administrative or regulatory authority,agency, body, or entity, including any court or other tribunal.

 

1.4.  “Parties” shall mean Argosy and OCRI(Party means either Argosy or OCRI).

 

1.5.  “Person” shall mean an individual,corporation, partnership, trust, association, or entity of any kind or nature;or a Governmental Authority.

 

1.6.  “Records” shall have the meaningspecified in Section 2.4.

 

1.7.  “Services” shall have the meaningspecified in Section 2.1.

 

ARTICLE II

SERVICES TO BE PROVIDED

 

2.1.  Exhibits.

 

(a) Exhibit attached to and made a part of this Agreement describes the services to be provided by Argosy to OCRI and one or more of the OCRI Subsidiaries, as designated from time to time by OCRI (the “Services”). The Parties have made a good faith effort as of the date hereof to identify each Service and to complete the content of the Exhibit accurately. It is anticipated that the Parties will modify the Services from time to time.

 

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(b) The Parties may also identify additional Services that they wish to incorporate into this Agreement. The Parties will create additional Exhibits setting forth the description of such Services, the Fees for such Services and any other applicable terms.

 

2.2.  Exclusivity.  Argosy will provide the Services exclusively through GrahamJessop.

 

2.3.  Standard of Care.  In providing the Services hereunder, Argosy will act inaccordance with the highest business and ethical standards, and will exercisethe same degree of care and provide the same level of quality, responsivenessand timeliness as would be provided by an independent management servicecompany.

 

2.4.  Records. Argosy shall keep full and detailed confidential records dealing withall aspects of the Services performed by it hereunder (the “Records”)and shall provide access to the Records to OCRI management, counsel andauditors at all reasonable times. Furthermore, Argosy shall maintain OCRI records confidential andsegregated from the records of other companies, consistent with OCRI’s statusas a public company.

 

ARTICLE III

FEES

 

3.1. General.  OCRI will pay to Argosya fixed annual fee for the Services as set forth in the attached Exhibit(collectively, the “Fees”). The Fees constitute full compensation toArgosy for all charges, costs and expenses incurred by Argosy on behalf of OCRIin providing the Services. Additionally, Argosy shall be entitled to immediatereimbursement and/or advancement of expenses reasonably incurred on behalf ofOCRI, which are not related to the Services. By way of example, travel-related expenses and the normal businessexpenses incurred in connection with the role of Vice President, shall bedeemed normal business expenses subject to immediate reimbursement and/oradvancement under this Agreement. Except as specifically agreed otherwise by OCRI, OCRI will not beresponsible to any independent contractor retained by Argosy, for anyadditional fees, charges, costs or expenses relating to the Services.  Additionally, and in consideration for priorservices rendered by Argosy to OCRI, Argosy will receive a stock grant underthe Company’s 2003 Employee/Consultant Stock Compensation Plan in the amount of500,000 shares of the Company’s common stock.

 

3.2.  Payments. Argosy will deliver to OCRI, no later than the 15th and the30th day of each month, an invoice for the aggregate Fees andreimbursable expenses incurred for the half-month period then ended. OCRI willpay to Argosy, through inter-company cash transfer monthly no later than the 10thday following receipt of each such invoice, the aggregate Fees and reimbursableexpenses incurred during such period.

 

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3.3.  Review of Fees.

 

(a) At the end of each six months during the term of the Agreement, commencing as of the date of the Agreement, Argosy will review the charges, costs and expenses actually incurred by Argosy in providing any Service, as well as the calculation of any related Fee (collectively, “Actual Cost”) during the previous six months. In the event that Argosy determines that the Actual Cost for any Service differs from the aggregate Fees for that Service, the Parties will renegotiate in good faith to adjust the appropriate Fees accordingly, retroactively or prospectively.

 

(b) As a part of the annual operating plan review process referred to in Section 4.1, the Parties will set Fees or new budgets for each ensuing year, and may make other changes to the Fees with respect to each Service, based upon an increase or reduction to such Service. Once an annual operating plan has been finalized, the Fee for each Service set out in that annual operating plan will apply for the ensuing year, subject to any subsequent written agreements between Parties.

 

ARTICLE IV

PLANNING PROCESS

 

4.1.  AnnualOperating Plan.

 

A representative of each Party will coordinate thedevelopment of an annual operating plan setting forth the specific objectives,Service standards, performance measures, activity levels and a detailed budgetfor the Services. In the annual operating plan process, the Parties agree touse their best efforts to harmonize the interests of OCRI to have qualityservices at affordable cost and the interest of Argosy to receive a fair andequitable compensation for performing the Services. On or beforeDecember 1 of each calendar year, Argosy will submit an annual operatingplan for the Services for the next fiscal year to the Chief Financial Officer(“CFO”) of OCRI (working in conjunction with the Audit Committee ofOCRI), for review and approval. Approval by the CFO of OCRI and the seniorfinancial executive of Argosy will constitute approval by the Parties of theannual operating plan.

 

4.2.  Performance Review.  The Parties will meet annually on or aboutOctober 30 (commencing October 30, 2004) to review progress againstthe annual operating plan objectives, Service standards, performance measuresand activity levels. The Parties will use their good faith efforts to resolveany issues concerning Service standards, performance measures or changes inFees from the annual operating plan during these meetings. If the Parties areunable to resolve those issues, they will refer the disputed issues to the CFOof OCRI and the senior financial executive of Argosy for resolution. Failingresolution by November 30, either party may terminate this Agreement inaccordance with Section 7.2 below.

 

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ARTICLE V

AUTHORITY; INFORMATION; COOPERATION; CONSENTS

 

5.1.  Authority. Each Party warrants to the other Party that:

 

(a) it has the requisite corporate authority to enter into and perform this Agreement;

 

(b) its execution, delivery, and performance of this Agreement have been duly authorized by all requisite corporate action on its behalf;

 

(c) this Agreement is enforceable against it; and

 

(d) it has obtained all consents or approvals of any Persons that are conditions to its entering into this Agreement.

 

5.2. Information RegardingServices.  Each Party shall makeavailable to the other Party any information required or reasonably requestedby that other Party regarding the performance of any Service and shall beresponsible for timely providing that information and for the accuracy andcompleteness of that information. Argosy shall not be liable for any impairmentof any Service caused by its not receiving information, either timely or at all,or by its receiving inaccurate or incomplete information from OCRI that isrequired or reasonably requested regarding that Service.

 

5.3.  Cooperation.  The Parties will use good faith efforts to cooperate with eachother in all matters relating to the provision and receipt of Services. Suchgood faith cooperation will include providing electronic access to systems usedin connection with Services and using commercially reasonable efforts to obtainall consents, licenses, sublicenses or approvals necessary to permit each Partyto perform its obligations. The Parties will cooperate with each other inmaking such information available as needed in the event of any and allinternal or external audits, whether in the United States or any other country.  If this Agreement is terminated in whole orin part, the Parties will cooperate with each other in all reasonable respectsin order to effect an efficient transition and to minimize the disruption tothe business of both Parties, including the assignment or transfer of therights and obligations under any contracts. The Parties covenant and agree to deal with each other fairly and ingood faith.

 

5.4.  Further Assurances.  Each Party shall take such actions, uponrequest of the other Party and in addition to the actions specified in thisAgreement, as may be necessary or reasonably appropriate to implement or giveeffect to this Agreement.

 

ARTICLE VI

CONFIDENTIAL INFORMATION

 

6.1.  Definition. For the purposes of this Agreement, “Confidential Information”means non-public information about the disclosing Party’s or any of itsAffiliates’ business or activities that is proprietary and confidential, whichshall include, without limitation, all business, financial, technical and otherinformation, including software

 

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(source and object code) and programmingcode, of a Party or its Affiliates which by its nature or the circumstancessurrounding its disclosure should reasonably be regarded as confidential.Confidential Information includes not only written or other tangibleinformation, but also information transferred orally, visually, electronicallyor by any other means.

 

6.2.  Nondisclosure.  Each of Argosy and OCRI agree that (i) it will not disclose toany third party or use any Confidential Information disclosed to it by theother except as expressly permitted in this Agreement, and (ii) it will takeall reasonable measures to maintain the confidentiality of all ConfidentialInformation of the other Party in its possession or control, which will in noevent be less than the measures it uses to maintain the confidentiality of itsown information of similar type and importance.  It is intended by the Parties that OCRI, by virtue of its statusas a public company, is to be the primary beneficiary of the confidentialityand nondisclosure obligations of this article VIII.

 

6.3.  Ownership of Confidential Information.  All Confidential Information supplied ordeveloped by either Party shall be and remain the sole and exclusive propertyof the Party who supplied or developed it.

 

ARTICLE VII

TERM AND TERMINATION

 

7.1. Term.  This Agreement shall remain in effect for aterm of 12 months, and shall renew automatically for successive 12-month termsthereafter, until such time as it has been terminated as to all Services inaccordance with Section 7.2 below.

 

7.2. Termination.  Either Party may terminate this Agreementwith respect to one or more Services under this Agreement by providing threemonths’ written notice to the other Party or as otherwise agreed between the Parties.

 

7.3. TransitionServices.  Argosy agrees that, upontermination of this Agreement or any of the Exhibits, Argosy will cooperate ingood faith with OCRI to provide OCRI (or its designee) with reasonableassistance to make an orderly transition, including the following:

 

(a) developing a transition plan with assistance from OCRI or its designee;

 

(b) providing training to OCRI personnel or its designee’s personnel to perform Services; and

 

(c) organizing and delivering to OCRI records and materials in electronic form as requested by OCRI.

 

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ARTICLE VIII

INDEMNIFICATION

 

10.1.  Tax Indemnification by Argosy.  Argosy agrees to pay all withholding and other taxes required by anylocal, state or federal law with respect to Argosy’ employees, agrees to acceptthe exclusive liability for such taxes, and agrees to indemnify and holdharmless OCRI, the OCRISubsidiaries and their respective directors, officers, employees, agents orpermitted assigns (each, an “OCRI Party”) against any such tax which may be assessed.

 

10.2  Indemnification by OCRI.  OCRI shall indemnify, defend and holdharmless Argosy, its controlling persons, if any, directors, officers,employees, agents and permitted assigns (each, a “Argosy Party”) fromand against all liabilities, claims, damages, losses and expenses (including,but not limited to, court costs and reasonable attorneys’ fees) (collectivelyreferred to as “Damages”) of any kind or nature, of third parties causedby or arising in connection with the performance of the Services, except to theextent that Damages were caused directly or indirectly by the gross negligenceof any Argosy Party.

 

10.3  Indemnification Procedures.  A party entitled to indemnification pursuantto this Agreement (an “Indemnified Party”) shall, with respect to anyclaim made against such Indemnified Party for which indemnification isavailable, notify the other party (the “Indemnifying Party”) in writingof the nature of the claim as soon as practicable but not more than ten daysafter the Indemnified Party receives notice of the assertion of the claim.  Upon receipt of notice of the assertion of aclaim, the Indemnifying Party may, at its option, assume the defense of theclaim, and if so, the Indemnifying Party shall employ counsel reasonablyacceptable to the Indemnified Party. Notwithstanding the foregoing, theIndemnified Party shall have the right to employ separate counsel and toparticipate in, and to control any such action, and the reasonable fees andexpenses of such counsel shall be at the expense of the IndemnifyingParty.  An Indemnifying Party shall notbe liable for any settlement of an action effected without its written consent(which consent shall not be unreasonably withheld), nor shall an IndemnifyingParty settle any such action without the written consent of the IndemnifiedParty (which consent shall not be unreasonably withheld). No Indemnifying Partywill consent to the entry of any judgment or enter into any settlement whichdoes not include as an unconditional term thereof the giving by the claimant orplaintiff to the Indemnified Party a release from all liability with respect tothe claim. Each of the Indemnifying Party and the Indemnified Party shallcooperate in the defense of any claim for which indemnification is available andshall furnish such records, information, testimony and attend such conferences,discovery proceedings, hearings, trials and appeals as may reasonably berequested.  For purposes of thissection 10.3, references to a “claim” shall be construed broadly, so as toencompass all claims made against the Indemnified Party in a legal action forwhich indemnification is available under this article X.  The Indemnifying Party shall pay all amountsfor which it is responsible under this article X, promptly and in anyevent within 10 days of the date any such amounts are incurred.

 

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ARTICLE IX

DISPUTE RESOLUTION

 

If any annual operating plan is not submitted or is not approved by the Parties, or if the Parties are unable to resolve any service, performance or budget issues or if there is a material breach of this Agreement that has not been corrected within thirty (30) days of receipt of notice of such breach, the CFO of OCRI and the senior financial executive of Argosy will meet promptly to review and resolve those issues in good faith.  If there is a material breach of this Agreement that has not been corrected within thirty (30) days of receipt of notice of such breach, and such matter has not been resolved by the Parties’ executives within sixty (60) days of receipt of notice of such breach, the Parties (or either of them) shall submit such matter to the American Arbitration Association (“AAA”) in Dallas, Texas for resolution by a panel of three neutral arbitrators under the commercial arbitration rules of the AAA.

 

ARTICLE X

MISCELLANEOUS

 

10.1.  Governing Law.  This Agreement and performance hereunder will be governed by andconstrued in accordance with the laws of the State of Texas without regard tothe principles of conflict of laws.

 

10.2.  Assignment. This Agreement is not assignable in whole or in part by either Partywithout the prior written consent of the other; provided that OCRI may assignthis Agreement in whole or in part to a parent, a direct or indirectwholly-owned subsidiary, an Affiliate or a successor thereto.

 

10.3  Severability.  If any provision, clause or part of this Agreement, or theapplication thereof under certain circumstances is held invalid orunenforceable for any reason, the remainder of this Agreement, or theapplication of such provision, clause or part under other circumstances shallnot be affected thereby.

 

10.4.  Entire Agreement.  This Agreement, including the attached Exhibits, is the completeand exclusive statement of the agreement between the Parties and supersedes allprior proposals, understandings and all other agreements, oral and written,between the Parties relating to the subject matter of this Agreement. ThisAgreement may not be modified or altered except by written instrument dulyexecuted by both Parties.

 

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IN WITNESS WHEREOF, the Parties have signed this Agreement effective asof the date first set forth above.

 
| OCEAN RESOURCES, INC.      |
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| ARGOSY INTERNATIONAL, LTD. |
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**EXHIBITA**

 

**SERVICES & FEES AS OF SEPTEMBER 15, 2003**

 

 

| **Services**                                        |   | **Fees**          |
|-----------------------------------------------------|--------|-------------------|
| Mr. Graham Jessop’s services as Vice President |   | $15,000 per month |

 

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