Document:

FIRST AMENDMENT TO MANAGEMENT SERVICES AGREEMENT

FIRST AMENDMENT TO MANAGEMENT SERVICES AGREEMENT 

 

This First Amendment to Management Services Agreement
("Amendment") is made and entered into as of this 14th day of October 2008, by and among
Interline Resources Corporation, a Utah company, ("Interline"), and NorthCut
Refining LLC, a limited liability company, (the "Company") (which may be
referred to herein collectively as the "Parties" or individually as a "Party").

 

WITNESSETH: 

 

WHEREAS, Interline is a member of the Company and the Manager
under the Company's Operating Agreement dated September 10, 2007 (the
("Operating Agreement"); and 

 

WHEREAS, Interline and the Company are parties to the Management
Services Agreement dated September 10, 2007 (the "Agreement"), pursuant to which
Interline is providing certain services to the Company and the Company is
compensating Interline for such services and for its managerial and supervisory
services contemplated by Section 5.5 of the Operating Agreement; and 

 

WHEREAS, the Parties wish to amend the amount of the fees payable
by the Company under the Agreement, as set forth in this Amendment (capitalized
terms used in this Amendment but not defined shall have the meaning ascribed to
them in the Agreement). 

 

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

1. Amendment to
Fees. Sections I.i and 2.e of the Management Services Agreement of the Agreement
are hereby amended to provide that, effective as of November I, 2008, the
Company will pay Interline a monthly management fee of $60,000 for all services
provided by Interline under the Agreement and as contemplated in the Operating
Agreement, which amount shall not be subject to reduction following the
Completion Date. This amount will be paid monthly in arrears. Interline agrees
and acknowledges that no increase in the OP Service fee or payment of any
additional fee may be
made to it or any of its affiliates, directly or indirectly, except in accordance with Section
5.5 of the Operating Agreement. 

2. Counterparts.
This Amendment may be executed in multiple counterparts, each of which shall be
deemed an original and all of which when taken together, shall constitute a
whole. It shall be
fully executed when each Party whose signature is required has signed at least
one counterpart notwithstanding that all Parties have not executed the same
counterpart. The Parties agree that signatures transmitted by facsimile shall be
binding as if they were original signatures. 

3. Full Force and
Effect. Except as set forth in this Amendment, all of the terms and conditions
contained in the Agreement shall remain the same and in full force and effect.

 

IN WITNESS WHEREOF, the Parties have
executed this Agreement effective as of the 

date first written
above.

MANAGER:

THE
COMPANY:

Interline
Resources Corporation

Northcut
Refining, LLC

By
its Manager and Co-Interim Managers

Signature: /s/
Michael Williams_______

By:
Michael Williams, President

Interline
Resources Corporation, 

Manager

Signature:
/s/ Michael Williams_____

By:
 Michael Williams, President

Northcut
Holdings, LLC,

Co-interim
Manager

Signature:
/s/ Michael R. Burke_____

By:
Michael R. Burke, Manager

PCG
Midstream, LLC,

Co-interim
Manager

Signature:
/s/ Michael R. Burke

By:
Michael R. Burke, ManagerLIMITED LIABILITY COMPANY MEMBERSIDP INTEREST PURCHASE AGREEMENT

LIMITED LIABILITY COMPANY MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

THIS LIMITED LIABILITY COMPANY MEMBERSHIP INTEREST PURCHASE
AGREEMENT, dated as of October 10, 2008, by and among PCG Midstream, LLC, a
limited liability company organized under the laws of the state of Utah
("Seller"), Interline Resources Corporation, a corporation organized under the
laws of the state of Utah ("Buyer") and Northcut Refining, LLC, a limited
liability company organized under the laws of Wyoming ("Northcut"). 

 

WHEREAS, Buyer desires to purchase from Seller and Seller desires
to sell to Buyer Membership Interests representing I0% of Northcut's Membership
Interest as described in the Operating Agreement of Northcut Refining, LLC,
dated September 13, 2007 ("LLC Agreement"), on the terms and subject to the
conditions set forth herein. 

 

WHEREAS, Seller desires to sell to Buyer the I 0% Membership
Interest in two parts based upon total distributions of Available Cash to Seller
from Northcut. 

 

WHEREAS, Seller desires to sell to Buyer a 5% Membership Interest
for the amount of One Hundred Thousand and No/IOO Dollars ($100,000.00) after
Seller has received from Northcut Three Million Four Hundred Thousand and No/IOO
Dollars ($3,400,000.00) in distributions of Available Cash. 

 

WHEREAS, Seller desires to sell to Buyer the remaining 5%
Membership Interest contemplated herein for the amount of One Hundred Thousand
and No/100 Dollars ($100,000.00) after Seller has received from Northcut Six
Million Four Eight Thousand and No/IOO Dollars ($6,800,000.00) in distributions
of Available Cash. 

 

NOW, THEREFORE, the parties agree as follows: 

 

1.
Purchase and Sale of Membership Interests. 

 

     1.1 Sale and Purchase. At the First
Closing, Buyer shall purchase from Seller, and Seller shall sell mId sell to
Buyer, a 5% Membership Interest in Northcut for the purchase price of One
Hundred Thousand and No/100 Dollars ($100,000.00) (the "Initial Sale and
Purchase"). At the Second Closing, Buyer shall purchase from Seller, and Seller
shall sell and sell to Buyer, another 5% Membership Interest in Northcut for the
purchase price of One Hundred Thousand and No/IOO Dollars ($100,000.00) (the
"Second Sale and Purchase"). Both Purchases shall be subject to the terms and
conditions of this Agreement and on the basis of the representations,
warranties, covenants and agreements contained herein (collectively the
Purchases shall be defined as the "Sales and Purchases"). The purchase price
associated with the Initial and Second Sales and Purchases shall be referenced
to herein as the "Purchase Price." 

    
1.2 Initial Purchase and Closing. The Initial Sale and Purchase shall take place
at the offices of Shumway -Van Law, Chtd., 3400 North Ashton Boulevard, Suite
100B, Lehi, Utah 84043 at any time within one (1) year after Seller has received
from Northcut Three Million Four 

Hundred Thousand
and No/IOO Dollars ($3,400,000.00) in distributions of Available Cash (which
time and place are designated as the "First Closing"). 

     1.3 Second Purchase and Closing. The
Second Sale and Purchase shall take place at the offices of Shumway -Van Law,
Chtd., 3400 North Ashton Boulevard, Suite 100B, Lehi, Utah 84043 at any time
within one (1) year after Seller has received from Northcut Six Million Hundred
Thousand and No/IOO Dollars ($6,800,000.00) in distributions of Available Cash
(which time and place are designated as the "Second Closing") (the First and
Second Closings shall be collectively referred to herein as the "Closing"). 

     1.3 Deliveries at Closing. At the
Closing, the parties shall, respectively, make the following simultaneous
deliveries: 

(a) Seller shall
deliver to Buyer duly executed documents conveying the Membership Interests to
Buyer, duly executed on behalf of Seller, and a cross receipt, duly executed on
behalf of Seller, indicating a receipt of the Purchase Price from Buyer. 

(b) Buyer shall
deliver to Seller the Purchase Price, by wire transfer of immediately available
funds to an account or accounts designated by Seller, and a cross receipt, duly
executed on behalf of Buyer, indicating receipt of the Membership Interests from
Seller. 

(c) The parties
shall execute and deliver such other documents as are customary and reasonably
necessary to consummate the transactions contemplated hereby. 

2.
Representations and Warranties of Seller. Seller hereby represents and warrants
as follows: 

 

     2.1 Organization and Qualification.
Seller is a limited liability company duly organized and validly existing under
the laws of the State of Utah. 

     2.3 Authorization. As of the Closing, all
action on the part of Seller, its officers and directors necessary for the
authorization, execution and delivery of this Agreement, and the performance of
all obligations of Seller hereunder shall have been taken, and this Agreement,
assuming due execution by the parties hereto and thereto, will constitute valid
and legally binding obligations of Seller, enforceable in accordance with their
respective terms. 

     2.4 Valid Issuance of Membership
Interests. The Membership Interests, when sold and delivered in accordance with
the terms of this Agreement for the consideration expressed herein, shall be
duly and validly issued and will be free of restrictions on transfer directly or
indirectly created by Seller other than restrictions on transfer under this
Agreement and under applicable state and federal securities laws. 

     2.5 Litigation. There are no actions,
suits, proceedings or investigations pending or, to the best of Seller's
knowledge, threatened before any court, administrative agency or other
governmental body against Seller which questions the validity of this Agreement
or the right of Seller to enter into it, or to consummate the transactions
contemplated hereby. 

     2.6 Compliance with Other Instruments.
Seller is not in violation or default of any provision of its Articles of
Organization or the LLC Agreement, each as in effect immediately prior to the
Closing associated with the Sales and Purchases. 

     2.7 Agreements; Actions. Except for
agreements described herein and in the LLC Agreement, there are no agreements,
understandings or proposed transactions between Seller and any of its officers,
directors, affiliates, or any affiliate thereof. 

    
2.8 No Implied Representations. Except as expressly set forth herein, Seller
makes no representations or warranties of any kind to Buyer. 

3.
Representations and Warranties of Buyer and Northcut. Buyer and Northcut hereby
jointly and severally represent and warrant that: 

     3.1 Experience. Buyer and Northcut are
experienced in evaluating transactions such as those described in this Agreement
and are able to fend for themselves in such transactions, have such knowledge
and experience in financial and business matters that Buyer and Northcut are
capable of evaluating the merits and risks of their prospective purchase of
Seller's membership interest in Northcut, and have the ability to bear the
economic risks of the investment. 

     3.2 Investment. Buyer is acquiring the
Membership Interests for investment for its own account and not with the view
to, or for resale in connection with, any distribution thereof. Buyer and
Northcut understand. that the Membership Interests have not been registered
under the Securities Act or the Utah Securities Law, by reason of a specific
exemption from the registration provisions of the Securities Act and the Utah
Securities Law, respectively, which depends upon, among other things, the bona
fide nature of the investment intent as expressed herein. Buyer and Northcut
further represent that they do not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to any
third person with respect to any of the Membership Interests. Buyer and Northcut
understand and acknowledge that the offering of the Membership Interests
pursuant to this Agreement will not be registered under the Securities Act nor
under the state securities laws on the ground that the sale provided for in this
Agreement and the issuance of securities hereunder is exempt from the
registration requirements of the Securities Act and any applicable state
securities laws. 

     3.4 No Public Market. Buyer and Northcut
understand that no public market now exists for the Membership Interests, and
that there may never be a public market for the Membership Interests. 

     3.6 Authorization. As of the Closing, all
action on the part of Buyer and Northcut, and their respective officers,
directors and partners necessary for the authorization, execution and delivery
of this Agreement and the LLC Agreement and the performance of all obligations
of Buyer and Northcut hereunder and there under shall have been taken, and this
Agreement and the LLC Agreement, assuming due execution by the parties hereto
and thereto, constitute valid and legally binding obligations of Buyer and
Northcut, enforceable in accordance with their respective terms. 

administrators of
the parties hereto; provided, however, that the rights of Buyer to purchase the
Membership Interests shall not be assignable without the consent of Seller. This
Agreement shall not be construed so as to confer any right or benefit on any
party not a party hereto, other than their respective successors, assigns,
heirs, executors and administrators. 

    
5.4 Entire Agreement; Amendment. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement among the parties with regard to the subjects hereof and thereof and
supersedes all prior agreements and understandings relating thereto. Neither
this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.

    
5.5 Notices, Etc. All notices under this Agreement shall be sufficiently given
for all purposes if made in writing and delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, facsimile or
other electronic transmission, to following addresses and numbers. 

Notices to
Seller shall be addressed to: 

PCG Midstream,
LLC 486 West 50 North American Fork, Utah 84003 

with a copy to:

Shumway-Van Law,
Chtd. 3400 North Ashton Boulevard, Suite 100B Lehi, Utah 84043 Telephone: (801)
216-8885 Facsimile: (801) 216-8889 Attn: Douglas J. Shumway, Esq. 

or at such other
address and to the attention to such other person as Seller may designate by
written notice to Buyer and Northcut. Notices to Buyer and Northcut shall be
addressed to: 

160 W. Canyon
Crest Rd. Alpine, Utah 84004 Telephone: (801) 756-3031 Fax: (801) 756-8843 Attn:
Michael Williams 

or at such other
address and to the attention of such other person as Buyer and Northcut may
designate by written notice to Seller. 

 

    
5.6 Delays or Omissions. No delay or omission to exercise any right, power or
remedy accruing to any party upon any breach or default of the other party under
this Agreement shall impair any such right, power or remedy of such first party,
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or 

default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any holder of any breach or default under this Agreement, or any
waiver on the part of any holder of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing or as provided in this Agreement. 

     5.7 Expenses. Seller, Buyer and Northcut
shall each bear the expenses and legal fees incurred on their own behalf with
respect to this Agreement and the transactions contemplated hereby. 

     5.8 Counterparts. This Agreement may be
executed in any number of counterparts, each of which may be executed by only
one party, which shall be enforceable against the parties actually executing
such counterparts, and all of which together shall constitute one instrument.

     5.9 Severability; Enforcement. In the
event that any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without such provision; provided that no
such severability shall be effective if it materially changes the economic
benefit of this Agreement to any party. The parties hereto agree that
irreparable damage for which money damages would not be an adequate remedy would
occur in the event that any of the provision of this Agreement were not
performed in accordance with its specific terms or was otherwise breached. It is
accordingly agreed that, in addition to any other remedies a party may have at
law or equity, the parties shall be entitled to seek an injunction of
injunctions to prevent such breached of this Agreement and to enforce
specifically the terms hereof.

 

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written. 

INTERLINE
RESOURCES CORPORATION

PCG
Midstream, LLC

Signature:
 /s/__Michael Williams________ 

Signature:/s/
Michael R. Burke

By: Michael Williams,
President
                                  
By: Michael R. Burke, Manager

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