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EXHIBIT 1.01
SERVICES AGREEMENT
THIS
SERVICES AGREEMENT (this "Agreement") dated as of May 5, 2008,
is
made by and between Blackwater Midstream Corp. ("Blackwater" and,
together with
its subsidiaries now or hereafter existing, the "Company ") and
Christopher A.
Wilson ("Wilson").
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and covenants set
forth
herein, and intending to be legally bound hereby, the parties to
this Agreement
hereby agree as follows:
1.
Effectiveness of the Agreement. This Agreement shall become
effective
on May 5, 2008.
2.
Engagement. The Company hereby engages Wilson to perform
management
services for the benefit of the Company on the terms and conditions
set forth in
this Agreement. The Company is hereby obtaining from Wilson the
services set
forth on Schedule 1 (the " Management Services ").
3.
Duties.
(a) The
provision of Management Services by Wilson shall be subject to
Blackwater's Charter, Bylaws (including without limitation the
provision that
the business and affairs of Blackwater shall be managed by its
Board of
Directors (the " Board ")) and other governing documents, including
committee
charters, as well as applicable laws and regulations, including the
regulations
of any securities exchange on which Blackwater's securities are
listed or
traded. For purposes of this Agreement, the Charter and Bylaws of
Blackwater
shall be deemed to mean the Charter and Bylaws of Blackwater as
they exist today
(including any future amendments).
(b) The
parties acknowledge that Wilson will be designated to serve as
the
Chairman of the Board of Directors, Chief Executive Officer and
Chief Financial
Officer of Blackwater. Except as expressly set forth in this
Agreement,
Blackwater shall take all necessary actions so that Wilson will
continue to
serve in those capacities at Blackwater throughout the Term (as
defined below)
of this Agreement, including by adopting all necessary resolutions
of the Board.
(c)
Subject to the provisions of Section 3(a) and applicable law,
Wilson
shall be authorized to make decisions with respect to all aspects
of the
management and operation of the Company's business, including
without limitation
organization and human resources, marketing and sales, logistics,
finance,
administration of day-to-day operations and such other areas as he
may identify,
in such manner as he deems necessary or appropriate in his
reasonable judgment
in a manner consistent with the business judgment rule and the
provisions of
applicable law.
(d) Wilson
shall furnish such time at such locations as is reasonably
necessary to perform the Management Services. Consequently, it is
hereby
understood and agreed that Wilson is not required to devote his
full time to
this engagement, although it is expected that Wilson will be
devoting the
requisite amount of time to carry out the duties of his position
with
Blackwater.
(e) In
undertaking to provide the services set forth herein, none of
Wilson or any other person or entity guarantees or otherwise
provides any
assurances that their efforts to build the Company's operational
and financial
health and stability will be successful and, except for the amount
referenced in
Section 5(b), the Company's obligation to provide the compensation
specified
under Section 5 hereof shall not be conditioned upon any particular
results
being obtained.
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4.
Term.
(a) The
initial term of Wilson's engagement hereunder (the "Term")
shall
be for one year commencing on the date of the Closing Date. The
Term shall
continue thereafter on a month-to-month basis unless terminated by
either party
upon 60 days' advance written notice.
(b)
Blackwater shall have the right to terminate the Management
Services,
effective upon 15 days advance written notice, if Wilson, prior to
the
engagement of a new CEO and CFO, respectively, as contemplated by
the terms of
Schedule 1 , is not actively engaged in the provision of Management
Services
whether due to death, disability or by reason of a material breach
of this
Agreement by Wilson (it being understood and agreed that Wilson, in
addition to
pursuing other activities not related to or for the benefit of the
Company may
be on personal vacation for up to four weeks a year).
5.
Compensation. The following compensation shall be payable to Wilson
for
provision of the Management Services by Wilson:
(a) Base
Fee. Blackwater shall pay Wilson a monthly fee (the "Base Fee")
of $2,500, pro-rated for partial months and payable in advance no
later than the
first day of every month during the Term. If the Term is extended
pursuant to
Section 4(b), the Fee shall be renegotiated in good faith between
both parties.
The Base Fee includes up to 10 hours per month. Time in excess of
10 hours will
be billed at an hourly rate of $350 per hour.
(b) Stock
Grant. The Company shall issue to Wilson 50,000 shares of
common
stock upon execution of this Agreement., of which all 50,000 shares
will
immediately vest. Wilson shall be eligible to be granted additional
equity
compensation awards, at least annually as determined by the Board
in its sole
discretion.
(c)
Expenses. During the Term, Blackwater shall reimburse Wilson for
all
reasonable business expenses incurred in connection with the
provision of
Management Services in accordance with Blackwater's policies in
effect from time
to time with respect to travel, entertainment and other business
expenses for
senior executives; provided that Wilson complies with Company
expense
reimbursement policies including the provision of receipts.
(d) Other
Benefits. Wilson and other persons performing Management
Services shall also be entitled to coverage for services rendered
to the Company
while they serve as directors or officers of the Company under
director and
officer liability insurance policy(ies) maintained by the Company
from time to
time.
(e) In the
event of any breach of this Agreement by the Company, the
aggregate amount of (i) unpaid Base Fees and any other earned but
unpaid
compensation, (ii) unpaid expense reimbursements or other cash
entitlement,
(iii) Base Fees for the remaining Term and (iv) the aggregate of
all unpaid
Bonus Fees shall become immediately due and payable to Wilson,
irrespective of
whether the corresponding milestones have been achieved. In
addition, in such
event, all Blackwater stock issued or to be issued to Wilson shall
become
immediately vested notwithstanding the terms thereof. The Company
agrees to file
a registration statement on Form S-8 or equivalent to register such
shares upon
issuance.
7.
Representations and Warranties. Each party represents and warrants
to
the other party as follows:
(a) It is
a legal entity duly organized and validly existing under the
laws of the jurisdiction in which it was organized and has all
requisite
corporate power to enter into this Agreement.
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(b)
Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein nor compliance
by it with
any of the provisions hereof will: (i) violate any order, writ,
injunction,
decree, law, statute, rule or regulation applicable to it or (ii)
require the
consent, approval, permission or other authorization of, or
qualification or
filing with or notice to, any court, arbitrator or other tribunal
or any
governmental, administrative, regulatory or self-regulatory agency
or any other
third party.
(c) This
Agreement has been duly authorized, executed and delivered by
it
and constitutes its legal, valid and binding agre
