**Exhibit10.1**

 

MANAGEMENT SERVICES AGREEMENT

 

This Management Services Agreement (“Agreement”), dated effective as of September 1, 2003, is entered into by and between MAC Partners, LP (“MAC Partners”), and Ocean Resources, Inc., a Delaware corporation (“OCRI”).

 

ARTICLE I

DEFINITIONS

 

1.1. “Affiliate” of aPerson shall mean a Person that directly or indirectly controls, is controlledby, or is under common control with, the first Person. For purposes of thisdefinition, “Control” when used with respect to any Person means the power todirect the management and policies of such Person, directly or indirectly,whether through the ownership of voting securities, by contract or otherwise;and the terms “Controlling” and “Controlled” have meanings correlative to theforegoing.

 

1.2. “ConfidentialInformation” shall have the meaning specified in Section 8.1.

 

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 MAC Partners andOCRI (Party means either MAC Partners 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 MAC Partners 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.

 

----

 

(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.  Independent Contractors.  MAC Partners will provide the Services eitherthrough its own resources, the resources of its subsidiaries or Affiliates, orby contracting with independent contractors. To the extent that MAC Partnersdecides to provide a Service through an independent contractor, MAC Partnersshall consult with and obtain the prior approval of the Chief Financial Officer(“CFO”) of OCRI (working in conjunction with the Audit Committee ofOCRI).  Such approval shall not beunreasonably withheld and, if given, shall be given within 10 working days.

 

2.3.  Standard of Care.  In providing the Services hereunder, MAC Partners 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. MAC Partners shall keep full and detailed confidential records dealingwith all 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, MAC Partners 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 MAC Partners a fixed monthly fee for the Services asset forth in the attached Exhibit (collectively, the “Fees”). The Feesconstitute full compensation to MAC Partners for all charges, costs andexpenses incurred by MAC Partners on behalf of OCRI in providing theServices.  Additionally, MAC Partnersshall be entitled to immediate reimbursement and/or advancement of expensesreasonably incurred on behalf of OCRI, which are not related to theServices.  By way of example,travel-related expenses and the normal business expenses incurred in connectionwith the roles of CEO/President and COO, shall be deemed normal businessexpenses subject to immediate reimbursement and/or advancement under thisAgreement.  Except as specificallyagreed otherwise by OCRI, OCRI will not be responsible to any independentcontractor retained by MAC Partners, for any additional fees, charges, costs orexpenses relating to the Services.

 

3.2.  Payments. MAC Partners will deliver to OCRI, no later than the 15th andthe 30th day of each month, an invoice for the aggregate Fees andreimbursable expenses incurred for the half-month period then ended. OCRI willpay to MAC Partners, through inter-company cash transfer monthly no later thanthe 10th day following receipt of each such invoice, the aggregateFees and reimbursable expenses incurred during such period.

 

----

 

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, MAC Partners will review the charges, costs and expenses actually incurred by MAC Partners 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 MAC Partners 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.  Annual Operating Plan.  A representative of each Party willcoordinate the development of an annual operating plan setting forth theobjectives, Service standards, performance measures, activity levels and adetailed budget for the Services. In the annual operating plan process, theParties agree to use their best efforts to harmonize the interests of OCRI tohave quality services at affordable cost and the interest of MAC Partners toreceive a fair and equitable compensation for performing the Services. On orbefore December 1 of each calendar year, MAC Partners will submit anannual operating plan for the Services for the next fiscal year to the CFO ofOCRI (working in conjunction with the Audit Committee of OCRI), for review andapproval. Approval by the CFO of OCRI and the senior financial executive of MACPartners will constitute approval by the Parties of the annual 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 MAC Partners for resolution.  Failing resolution by November 30,either party may terminate this Agreement in accordance with Section 9.2below.

 

----

 

ARTICLE V

THIRD PARTY AGREEMENTS

 

To the extent that it is not practicable to have OCRI as the contracting Party for a third party obligation, MAC Partners, with respect to all Services supplied by MAC Partners or contracted for by MAC Partners on behalf of OCRI, shall use commercially reasonable efforts to cause all such third party contracts to extend to and be enforceable by OCRI, or to assign such contracts to OCRI. In the event that such contracts are not extendable or assignable, MAC Partners shall act as agent for OCRI in the pursuit of any claims, issues, demands or actions against such third party provider at OCRI’s expense.

 

ARTICLE VI

AUTHORITY; INFORMATION; COOPERATION; CONSENTS

 

6.1.  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.

 

6.2. Information RegardingServices.  Each Party shall make availableto the other Party any information required or reasonably requested by thatother Party regarding the performance of any Service and shall be responsiblefor timely providing that information and for the accuracy and completeness ofthat information. MAC Partners shall not be liable for any impairment of anyService caused by its not receiving information, either timely or at all, or byits receiving inaccurate or incomplete information from OCRI that is requiredor reasonably requested regarding that Service.

 

6.3.  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 othercountry.  If this Agreement isterminated in whole or in part, the Parties will cooperate with each other inall reasonable respects in order to effect an efficient transition and tominimize the disruption to the business of both Parties, including theassignment or transfer of the rights and obligations under any contracts.  The Parties covenant and agree to deal witheach other fairly and in good faith.

 

----

 

6.4.  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 VII

AUTHORITY AS AGENT

 

MAC Partners is hereby authorized to act as agent for OCRI for the purpose of performing Services hereunder and as is necessary or desirable to perform such Services. OCRI will execute and deliver or cause the appropriate OCRI Subsidiary to execute and deliver to MAC Partners any document or other evidence which may be reasonably required by MAC Partners to demonstrate to third parties the authority of MAC Partners described in this Article VII.

 

ARTICLE VIII

CONFIDENTIAL INFORMATION

 

8.1.  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 (source and object code) and programming code,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.

 

8.2.  Nondisclosure.  Each of MAC Partners and OCRI agree that (i) it will not discloseto any 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.

 

8.3.  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 IX

TERM AND TERMINATION

 

9.1. 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 9.2 below.

 

9.2. 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 theParties.

 

9.3. TransitionServices.  MAC Partners agrees that,upon termination of this Agreement or any of the Exhibits, MAC Partners willcooperate in good faith with OCRI to provide OCRI (or its designee) withreasonable assistance 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.

 

ARTICLE X

INDEMNIFICATION

 

10.1.  Tax Indemnification by MAC Partners.  MAC Partners agrees to pay all withholding and other taxes required byany local, state or federal law with respect to MAC Partners’ employees, agreesto accept the exclusive liability for such taxes, and agrees to indemnify andhold harmless 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 MAC Partners, its controlling persons, if any, directors, officers,employees, agents and permitted assigns (each, a “MAC Partners Party”)from and against all liabilities, claims, damages, losses and expenses(including, but not limited to, court costs and reasonable attorneys’ fees) ofany kind or nature (collectively referred to as “Damages”), of thirdparties caused by or arising in connection with the performance of theServices, except to the extent that Damages were caused directly or indirectlyby the gross negligence of any MAC Partners 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 the claim,and if so, the Indemnifying Party shall employ counsel reasonably acceptable tothe Indemnified Party. Notwithstanding the foregoing, the Indemnified Partyshall have the right to employ separate counsel and to participate in, and tocontrol any such action, and the reasonable fees and expenses of such counselshall be at the expense of the Indemnifying Party.  An Indemnifying Party shall not be liable for any settlement of anaction effected without its written consent (which consent shall not beunreasonably withheld), nor shall an Indemnifying Party settle any such actionwithout the written consent of the Indemnified Party (which consent shall notbe unreasonably withheld). No Indemnifying Party will consent to the entry ofany judgment or enter into any settlement which does not include as anunconditional term thereof the giving by the claimant or plaintiff to theIndemnified Party a release from all liability with respect to the claim. Eachof the Indemnifying Party and the Indemnified Party shall cooperate in thedefense of any claim for which indemnification is available and shall furnishsuch records, information, testimony and attend such conferences, discoveryproceedings, hearings, trials and appeals as may reasonably be requested.  For purposes of this section 10.3,references to a “claim” shall be construed broadly, so as to encompass allclaims made against the Indemnified Party in a legal action for which indemnificationis available under this article X. The Indemnifying Party shall pay all amounts for which it is responsibleunder this article X, promptly and in any event within 10 days of the dateany such amounts are incurred.

 

ARTICLE XI

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 MAC Partners 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 XII

MISCELLANEOUS

 

12.1.  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.

 

----

 

12.2.  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.

 

12.3  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.

 

12.4.  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.

 

----

 

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

 
| OCEAN RESOURCES, INC. |
|-----------------------|
|                  |
|                  |
| By:                   |   |   |
|                  |
| Name:                 |   |   |
|                  |
| Title:                |   |   |
|                  |
|                  |
| MAC PARTNERS, LP      |
|                  |
|                  |
| By:                   |   |   |
|                  |
| Name:                 |   |   |
|                  |
| Title:                |   |   |
|                       |  |  |  |  |  |  |  |  |

 

----

 

**EXHIBITA**

 

**SERVICES & FEES AS OF SEPTEMBER 1, 2003**

 

 

| **Services**                                                                                            |   | **Fees**          |
|---------------------------------------------------------------------------------------------------------|--------|-------------------|
| Mr. Dennis McLaughlin’s services as Chief Executive Officer                                        |   | $30,000 per month |
| Mr. Kit Chambers’ services as Chief Operating Officer                                              |   | $7,000 per month  |
| The provision of financial modeling and analysis services, plus accounting and treasury functions       |   | $10,000 per month |
| The provision of turnkey office, reception, furniture, telecommunications and internet hosting services |   | $4,250 per month  |

 

----