EXHIBIT 10.14
AMENDMENT NUMBER 1
TO
OPERATIONS AGREEMENT
LATERAL DRILLING SERVICE STANDARD AGREEMENT
EDGE CAPITAL GROUP AND VERDISYS, INC.
This AMENDMENT NUMBER 1 TO THE ORIGINAL AGREEMENT dated June 16, 2003,
("Amendment") is entered by and between Verdisys, Inc., a California corporation
("Verdisys"), and Edge Capital Group, a California corporation ("ECG") Edge
Capital Group ("ECG") engaged Verdisys, Inc. ("Verdisys") to provide operating
expertise, and lateral drilling services, to ECG's in the Monroe Gas Field in
Monroe, Louisiana (the "Monroe Field"), which ECG has acquired.
WHEREAS, ECG has arranged financing with Solarcom, Inc., however, ECG may
replace the financing with another third party lender as ECG has the financial
capability to secure financing. Whereas, this Amendment retroactively requires
Edge to pay for drilling and related services under Section 2.1 by eliminating
the condition to obtain financing.
NOW, THEREFORE, in consideration of the rights, obligations and interests
included under this Agreement, both parties agree as follows:
2.0 SERVICE FEES AND ROYALTY
2.1 LATERAL DRILLING SERVICE FEES
Service Contract - ECG and Verdisys, Inc.
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Verdisys Lateral Drilling Services ("Drilling Services") will be billed at the
time of commencement of drilling at the package rate set forth in the Term and
Pricing Invoice (Addendum "B"). The Drilling Services are for each individual
well site pertaining to this Contract. ECG shall receive the initial Drilling
Services for eight (8) xxxxx. Payment to Verdisys shall occur approximately
thirty days later. Thereafter, additional funding to Verdisys will be supplied
for a minimum of xxxxx equal to the lesser of either: (i) eight (8) xxxxx at a
time, or (ii) in the event that the projected number of laterals to be drilled
per well would cause the cost of 8 xxxxx to exceed an aggregate payment of
$500,000.00, then that maximum number of xxxxx which would be as close to, but
not in excess of $500,000.00.
3.0 RESPONSIBILITIES OF PARTIES
3.2 THIRD PARTY SERVICES
ECG hereby agrees that to the extent that mutually agreeable third party
services are needed to maximize the results of the Drilling Services or the
overall output from the Monroe field, ECG will be responsible for thirty-three
and one-third percent (331/3%) of all costs related to these services. Third
Party costs are anticipated to not exceed $3,000.00 per well and shall be paid
directly to Verdisys. In the event that the parties can not agree as to whether
certain third party services are necessary to maximize the results of the
Drilling Services, the on-site consulting geologist (or
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if no on-site consulting geologist is present at the site, by any third party
consulting geologist mutually acceptable to the parties) shall make the final
determination as to whether such third party services are necessary to maximize
the results of the Drilling Services.
The determination as to the appropriate number of laterals to be drilled to
obtain maximum return from the well will be made by the on-site consulting
geologist (or if no on-site consulting geologist is present at the site, by any
third party consulting geologist mutually acceptable to the parties).
5.6 AMENDMENTS
This Amendment Number 1 amends the ORIGINAL AGREEMENT dated June 16, 2003.
ECG: EDGE CAPITAL GROUP
00000 XX XXXXX XXX. XXXXX X000
XXXXX XXXXX, XXXXXXXXXX 00000
VERDISYS: VERDISYS, INC.
00000 X-00 XXXXX, XXXXX 000
XXX XXXXXXXXX, XX 00000
5.8 WAIVER
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Any waiver by any party of a breach of any provision of this Agreement shall not
operate as or be construed to be a waiver of any other breach of that provision
or of any breach of any other provision of this Agreement. Any waiver must be in
writing and be authorized by a resolution of the Board of Directors of the
waiving party.
5.9 BINDING EFFECT
The provisions of this Agreement shall be binding upon and inure to the benefit
of the Constituent Corporations and their respective successors and assigns and
shall inure to the benefit of each indemnity.
5.12 COUNTERPARTS
This Amendment may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, this Agreement has been approved by resolutions duly adopted
by the Board of Directors of each party and has been signed by duly authorized
officers of each party, all as of the date first above written.
EDGE CAPITAL GROUP
By: /S/Xxxxx Xxxxxx
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Title: CEO
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Date: June 19, 2003
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VERDISYS, INC.
By: /s/Xxx Xxxxxxxx
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Title: President
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Date: June 19, 2003
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