1
MANAGEMENT AGREEMENT
BY AND BETWEEN
CAMBRIDGE ENERGY CORPORATION
AND
TRITON WELLHEAD AND MANUFACTURING INC.
THIS AGREEMENT made this 1st day of May, 1998 by and between
CAMBRIDGE ENERGY CORPORATION, (CAMBRIDGE) a Nevada corporation and TRITON
WELLHEAD & MANUFACTURING, INC., (TRITON) a Louisiana corporation,
WITNESSETH:
WHEREAS TRITON is the manufacturer of well control and valve devices
based in Broussard, Louisiana and CAMBRIDGE is a public company engaged in
the exploration and development of oil and gas properties and in other
aspects of the oil and gas industry and
WHEREAS CAMBRIDGE and TRITON have entered into an agreement dated
March 10, 1998 providing for the acquisition of TRITON by CAMBRIDGE and
further
WHEREAS the terms of this acquisition anticipate the conveyance of
clear title to the properties of TRITON including the manufacturing
facility, real estate, equipment and inventory currently subject to
security interests held by two lenders and that additional time through at
least July of 1998 is needed to complete acquisitions and litigation
necessary to provide title to the properties to be conveyed by the
referenced agreement and further
WHEREAS certain assistance is needed to enhance the business during
the period between this agreement and the date on which title can be
conveyed and further that CAMBRIDGE has already begun to provide such
assistance in the form of the hiring of experienced sales personnel,
insurance consultation and other marketing and miscellaneous consultation,
NOW THEREFORE in exchange for the mutual covenants expressed herein
and other good and valuable consideration, receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
1. That during the interim period as described below, CAMBRIDGE will
provide to TRITON management and consulting services covering:
a. personnel management: including payroll processing and benefits and
insurance packaging and development of employment administration guidelines
b. administrative services: including accounting and financial
administration and structuring of books and records in preparation of
audit, and structure and preparation of financial statements in accordance
with generally accepted accounting principals
c. facilities management: including planning and design of
rehabilitation and improvements
d. financial planning: including cash flow management and financial
planning for expansion.
In performing these functions, CAMBRIDGE will utilize to the extent
possible existing employees of TRITON and will utilize existing facilities,
equipment and inventory to the maximum reasonable extent.
Further, in performing these duties, Cambridge will have complete and
continuous access to all TRITON facilities and operations and to past and
present TRITON books, records and bank accounts.
CAMBRIDGE management will conduct management meetings at least once
per week in advance of the weeks activities. Such meeting will be in person
or by conference call and will include one or more members of CAMBRIDGE
senior management and one or more members of TRITON senior management. The
agenda for this meeting shall include in advance: the week's production
schedule, sales for the prior week, projected payroll for the week,
projected general and administrative expenses for the week, accounts
receivable status, cash and credit positions and facilities management and
improvement projects.
2. CAMBRIDGE will assist TRITON in obtaining insurance for facilities,
personnel and product liability.
3. CAMBRIDGE may from time to time make advances of funds in
performance of services referenced above, however, CAMBRIDGE shall make
only advances necessary for immediate use, and reasonably practical and
consistent with efficient and economical management. Such advances shall
become a payable on the books of TRITON payable on demand to CAMBRIDGE.
4. For the period of this Agreement, all revenues due TRITON shall be
deposited in its operating account and shall be utilized to pay TRITON
expenses in accordance with a priority of expenses and accounts payable
established by CAMBRIDGE with the agreement of TRITON. These expenses shall
include service on the existing credit line of CAMBRIDGE as well as any
additional credit obtained for TRITON during the term of this agreement. In
addition these expenses shall include any direct supervision expense
incurred by CAMBRIDGE in the performance of this agreement.
5. To compensate CAMBRIDGE for these services, it shall receive 10% of
all revenues over and above the cost of goods sold from sales generated
during the term of this agreement over and above the average sales for a
like period prior to this agreement. In the event that for any reason, the
agreement for the acquisition of TRITON by CAMBRIDGE does not close,
CAMBRIDGE shall be entitled to receive this percentage for all sales by
employees brought into the company by CAMBRIDGE as well as sales to clients
brought into the company during the term of this agreement, for a period of
two (2) years after its termination.
6. The terms of the agreement for the acquisition of TRITON by
CAMBRIDGE referenced above shall continue in force in addition to the terms
hereof and CAMBRIDGE shall continue to use its best efforts to bring about
the changes in title necessary to close that agreement as soon as
reasonably practicable.
7. Arbitration and Jurisdiction: Any dispute among the parties arising
out of this agreement or otherwise shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American
arbitration Association. This Agreement is to be construed in accordance
with the Laws of the State of Florida.
8. TRITON Representations and Warranties. TRITON represents that all
documents and other information furnished to CAMBRIDGE are true, correct,
complete and not misleading. TRITON also represents and warrants that it
has not withheld and will not withhold any material information from
CAMBRIDGE or its counsel. TRITON accepts and acknowledges sole
responsibility and liability for any and all damages including the cost of
defense resulting from any action or claim against TRITON which may arise
from information provided by TRITON.
9. Confidentiality: CAMBRIDGE and TRITON mutually agree to hold
confidential and secret all documents, strategies, relationships or actions
which either party may disclose or perform which are disclosed to the other
during the performance of the obligations set forth in this Agreement.
Agreed to and Acknowledged as follows:
Triton Wellhead & Manufacturing, Inc.
by: /s/ Xxxxxxx Danado
its: President
Date: May 5, 1998
Cambridge Energy Corporation
by: /s/ Xxxxx X. Xxxx
its: Chairman and CEO
Date: May 5, 1998
