FIRST AMENDMENT TO MANAGEMENT SERVICES AGREEMENT
Exhibit 10.37
FIRST AMENDMENT
TO
This
FIRST AMENDMENT TO MANAGEMENT SERVICES AGREEMENT (this “First Amendment”) is
effective as of March 1, 2009, by and between VINLAND ENERGY OPERATIONS, LLC, a
Delaware limited liability company (“Manager”) and VANGUARD NATURAL GAS, LLC, a
Kentucky limited liability company, and its subsidiaries, ARIANA ENERGY, LLC and
TRUST ENERGY COMPANY, LLC (collectively the “Company”).
RECITAL:
WHEREAS,
Manager and the Company are parties to that certain Management Agreement, dated
as of January 5, 2007 (the “Management Agreement”) wherein, Manager agreed to
provide certain management and general and administrative support services to
Company for its Properties, and the Company agreed to pay to Manager the
compensation provided for in this Agreement as set forth therein.
WHEREAS,
Manager and Company now desire to temporarily amend and/or replace certain
terms, provisions or conditions of the Management Agreement, as provided in and
for the duration of this First Amendment.
NOW
THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged; the parties agree as
follows:
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1.
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The term of this First Amendment shall commence on
March 1, 2009 and shall continue in full force and effect until December
31, 2009. After December 31, 2009, the term of this First
Amendment shall be extended automatically from month to month thereafter,
unless Manager or the Company gives the other written notice of its
intention to terminate this First Amendment at the next following monthly
renewal which is at least thirty (30) days after the notice is
given. Upon the termination of this First Amendment, all of the
original terms and conditions of the Management Agreement, including those
terms amended herein, shall be and remain in full force and effect in
accordance with such terms and
conditions.
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2.
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For the duration of this First
Amendment, Section 4. is deleted in its entirety and
replaced with the following
provision:
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Section 4. Compensation. For the Services
provided hereunder by Manager to the Company, the Manager shall be due a
per-well fee in the amount equal to Ninety-Five Dollars ($95) for (i) each
economically producing oil and/or gas well within the AMI in which the Company
owns or holds an interest that is listed on the December 31, 2006 report of
Netherland, Xxxxxx and Associates, Inc.; or (ii) all economically producing oil
and/or gas xxxxx drilled or acquired by the Company within the AMI following
December 31, 2006 (the “Management Fee”). The Management Fee shall be
paid jointly by the Working Interest owners in each of the xxxxx such that
Company shall only be required to pay to Manager the percentage of the
Management Fee which corresponds to the Company’s percentage of Working Interest
in such well.
Beginning
on January 1, 2011, the producing well rates stipulated in this
Section 4 shall be increased by eleven percent (11%) and shall be adjusted
annually thereafter upon the wage index adjustment published by
XXXXX.
In
addition, Company agrees to reimburse Manager for any Lease Level Payables that
may be paid with funds of Manager rather than funds of Company. If,
due to the occurrence of an unusual circumstance, Manager determines that it has
incurred extraordinary expenses in order to provide any of the Services, Manager
may request that the Company pay additional reasonable compensation for such
Services, and Company may determine to agree to any such request (in whole or in
part) in their sole and absolute discretion, respectively; however, the Company
shall not have any obligation to consent to the payment of such additional
compensation and nothing contained in this sentence shall be construed to affect
or otherwise alter the obligation of Manager to provide the Services described
herein.
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3.
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The
parties hereto agree that except as expressly amended herein, all of the
terms and conditions of the Management Agreement remain in full force and
effect.
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IN
WITNESS WHEREOF, the undersigned have executed this First Amendment to
Management Services Agreement effective as of the date first above
written.
MANAGER:
VINLAND
ENERGY OPERATIONS, LLC
By: _/s/
Majeed
S. Nami_________________
Its:
Manager
COMPANY:
VANGUARD
NATURAL GAS, LLC
By: /s/ Xxxxx X.
Smith___________________
Its:
Manager
ARIANA
ENERGY, LLC
By:
VANGUARD NATURAL GAS, LLC
Its: SOLE
MEMBER
By: /s/ Xxxxx X.
Smith___________________
Its:
Manager
TRUST
ENERGY COMPANY, LLC
By:
VANGUARD NATURAL GAS, LLC
Its:
MANAGER
By: /s/ Xxxxx X.
Smith___________________
Its:
Manager
