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Exhibit 10.2
MANAGEMENT AGREEMENT
THIS AGREEMENT, made as of the first day of January, 2000, between
Oceanic Exploration Company, a corporation with offices at 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 ("Oceanic"), and Cordillera
Corporation, a corporation with offices at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxx 00000 ("Cordillera"),
WITNESSETH:
WHEREAS, Oceanic and Cordillera each require support services; and
WHEREAS, Oceanic has sufficient personnel to provide support services
to both Oceanic and Cordillera; and
WHEREAS, duplication of functions and costs can be avoided, for the
economic benefit of both companies if Oceanic provides personnel to perform
support services for Cordillera; and
WHEREAS, Oceanic is willing to provide personnel to perform such
services under the terms of this Agreement;
NOW, THEREFORE, in consideration of their respective covenants, the
parties agree as follows:
I. Services to be Performed.
Subject to the provisions of this Agreement, Oceanic shall provide the
personnel to perform the following services for the account of Cordillera:
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a. Management and supervisory services, including local
management personnel, necessary to operate Cordillera as a
continuing and active company.
b. Complete accounting services necessary to maintain complete
and accurate records on behalf of Cordillera.
c. Administrative services as necessary to facilitate the
orderly performance of the general office.
d. Performance of such other services, at the option of
Oceanic, as may be requested from time to time by Cordillera.
II. Compensation and Reimbursement.
For the performance of services described in Article I, Cordillera
shall compensate and reimburse Oceanic as follows:
a. On January 1, 2000, a monthly management fee shall be
calculated based upon experience during the previous nine-month period.
The fee will be based on actual time spent on Cordillera activities
using current pay rates and benefit schedules plus an additional fee of
5% of the total amount. On January 1 of every year thereafter, this fee
will be subject to recalculation based upon experience during the
previous twelve-month period. This payment will be due and payable on
the fifteenth day of each month. If payment is not made by the
fifteenth day of the following month, the unpaid balance shall bear
interest monthly at the rate of 10% per annum.
b. Reimbursement of any direct charges incurred by Oceanic for
the account of Cordillera, exclusive of personnel costs included in
Item a. These reimbursements will be due and payable upon receipt of
invoice from Oceanic to Cordillera.
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III. Covenants of Each Participating Company.
In consideration for Oceanic's agreement to perform the services
described in Article I, as an accommodation to Cordillera, Cordillera covenants
and agrees to indemnify and hold Oceanic harmless from any loss or liability
resulting from the performance of services contracted by this Agreement
excepting only losses or liabilities resulting from Oceanic's gross negligence
or wanton misconduct.
In consideration for Cordillera's payment of the monthly management
fee, Oceanic covenants and agrees to provide their employees with adequate
salary and benefits to ensure the retention of personnel capable of performing
the services specified in Article I. Benefits are to include:
a. Health, life and disability insurance.
b. Employer taxes including social security, unemployment, and
other taxes.
c. Pension and other retirement plans as employee eligibility
requires.
d. Any other benefits Oceanic sees as necessary and
appropriate.
IV. Term.
This Agreement shall continue from year to year until the same is
terminated by not less than 60 days written notice from either party. On
termination, each party shall be released from all obligations accruing under
the Agreement from and after the termination date but Cordillera shall remain
obligated for all direct charges incurred by Oceanic prior to said date, whether
or not known, asserted or invoiced prior to said date.
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V. Status of Employer.
It is understood and agreed that Oceanic is acting as an independent
contractor and not as an employee or agent of any party. All personnel provided
by Oceanic for performance of its duties under this Agreement shall be and
remain the employees of Oceanic, and the selection of such employees, their
hours of labor, and the compensation to be paid to them shall be determined by
Oceanic except as required under Article III.
VI. Notices.
All notices required or permitted by this Agreement shall be in writing
and shall be deemed to have been delivered to the other party when delivered in
person or transmitted by mail, postage and charges prepaid, addressed to Oceanic
at the address set out above, or by facsimile.
VII. General.
a. This Agreement shall be governed by the laws of the State of
Colorado, United States of America.
b. The provisions hereof inure to the benefit of and are binding upon
the successors in interest of each party.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
OCEANIC EXPLORATION COMPANY
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
President
CORDILLERA CORPORATION
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Executive Vice President
