EXHIBIT 10.29

 

OPERATIONS AND ASSET MANAGEMENT AGREEMENT

 

This Operations and Asset Management Agreement (this "Agreement") is made and
entered into this 31st day of March, 2016 (the "Effective Date"), by and among
Terra Tech Corp., a Nevada corporation ("Terra Tech"), Black Oak Gallery, a
California corporation (the "Owner"), and Platinum Standard, LLC, a California
limited liability company ("Operator") (each a "Party" and, collectively, the
"Parties").

 

RECITALS

 

A. The Owner is the owner of that certain licensed medical cannabis dispensary
business (the "Business") located at 578 W. Grand Avenue, in the City of
Oakland, State of California, commonly known as Blum Oakland (the "Property").

 

B. Owner's Business includes a cultivation center, located on the property of
the Business (the "Cultivation Center") located at 556 - 578 W. Grand Avenue, in
the City of Oakland, State of California.

 

C. Operator is an experienced medical cannabis dispensary operator.

 

D. Since approximately October 1, 2012, Owner has engaged Operator in the
financing and operation of the Business.

 

E. As of the Effective Date, Owner is a wholly-owned subsidiary of Terra Tech.

 

F. Terra Tech engages in the business of managing and operating cultivation
businesses, among other business activities.

 

G. Terra Tech hereby desires to engage and appoint Operator as the sole and
exclusive operator and asset manager of the Business for the benefit of Terra
Tech and Owner, and Operator desires to accept such appointment, all upon and
subject to the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants, promises and conditions herein contained, Terra Tech and Operator
agree as follows:

 

ARTICLE I
APPOINTMENT

 

1.01 Terra Tech hereby hires and appoints Operator as the sole and exclusive
operator and asset manager of the Business, with the authority to operate and
manage the operations of all aspects of the Business and to manage the assets of
the Business on the terms and conditions set forth in this Agreement, and
Operator hereby accepts such appointment.

 

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ARTICLE II
TERM

 

2.01 Initial Term. Subject to the option to renew set forth in Paragraph 2.02,
below, and to the termination provisions set forth in Paragraph 10.01, below,
this Agreement shall commence as of the Effective Date and shall remain in full
force and effect for a period of ten (10) years or upon the termination of this
Agreement pursuant to the provisions of this Agreement hereinafter provided.

 

2.02 Option to Renew Term. Subject to the written consent of the other Party,
each Party has an option to renew for another ten (10) years by giving notice of
its exercise of the option at least ninety (90) days prior to expiration of the
initial ten (10) year period. Such written consent, if provided, shall be
provided not later than thirty (30) days subsequent to such Party's receipt of
the ninety (90)-day option exercise notice.

 

ARTICLE III
OPERATOR'S DUTIES AND POWERS

 

3.01 General Duties.

 

(a) Subject to Terra Tech and the Owner exercising their discretion and
authority in accordance with this Agreement, Operator shall have (i) full power,
authority and responsibility to take all actions and do all things necessary or
reasonably proper in the ordinary and usual business and affairs pertaining to
the operation and management of the Business and to determine the policies to be
followed in connection therewith, all in accordance with the provisions of this
Agreement and (ii) discretion, control and responsibility in all matters
relating to the management, operation, maintenance and marketing of the
Business, including, without limitation, patient relations, credit policies,
employment policies, collections, the receipt, holding and disbursement of
funds, maintenance of accounts, procurement of inventories and supplies,
promotion, advertising and publicity, and generally, all those activities
necessary or proper for the management and operation of the Business. The
illustrations of Operator's authority specified in this Agreement (subject to
the above-referenced exercise of discretion and authority by Terra Tech and the
Owner) are not intended to limit Operator's discretion and authority to take any
action reasonably proper to operate, manage and maintain the Business. Subject
to the above-referenced exercise of discretion and authority by Terra Tech and
the Owner, and without otherwise limiting the foregoing or any other provision
in this Agreement, Operator shall have such responsibilities and obligations,
and shall perform and take, or caused to be performed or taken, all services and
actions customarily performed or taken by operators of businesses which are
similar in nature, location and character to the Business. Operator shall
perform all of its duties in an efficient and economical manner, subject to
Terra Tech's and the Owner's direction and exercise of their discretion and
authority and otherwise pursuant to the terms and provisions of this Agreement.

 

(b) Operator agrees, notwithstanding the authority granted herein, to confer
fully and freely with Terra Tech and the Owner in the performance of its duties,
and to continue to remain informed regarding the Business. Operator further
agrees to abide by those lawful standards, instructions, and standard operating
procedures ("SOPs") which Terra Tech or the Owner may issue from time to time
regarding the standards and procedures by which the Business is to be operated.
The initial SOPs (which consist of (i) Accounting Internal Controls and (ii)
other Standard Operating Procedures) are attached hereto as Exhibits A(i) and
A(ii). The Operator acknowledges that the SOPS will be subject to modification,
expansion, and contraction during the term of this Agreement and agrees, upon
request therefor, to utilize its discretion and experience in providing
assistance to Terra Tech and the Owner in connection with such their preparation
of such "updated" SOPs.

 

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3.02 Asset Management. Related to this Agreement, Operator will perform the
following services (the "Asset Management") on behalf of Terra Tech and the
Owner related to Asset Management of the Business, including:

 

(i) Advice on protection, use and maintenance of the brand "Blüm";

 

(ii) Advice to Terra Tech and the Owner regarding real estate matters, including
the Property and any additional locations established by Terra Tech; and

 

(iii) Advice on industry developments as to products and best practices
involving all aspects of the Business and considerations for future development.

 

3.03 Compliance with Laws. Operator shall, at Terra Tech's or the Owner's
expense, use its diligent best efforts to see to it that the Business is at all
times in compliance with applicable laws, rules and regulations, including but
not limited to, any other requirements of governmental authorities having
jurisdiction over the Business and Operator shall assist Terra Tech and the
Owner to renew, as necessary, all permits and licenses which are legally
required for the operation and maintenance of the Business. The Operator, at its
sole expense, shall be responsible for any and all fines, penalties, losses of
revenues, or increases in the costs of operating the Business due to any
mismanagement of the Business, malfeasance related to the Business, or lack of
adherence to the SOPs, or then-current local or state laws or regulations, or
then-current local, state or federal tax codes or regulations.

 

3.04 Personnel.

 

(a) Terra Tech or the Owner shall reimburse Operator on a monthly basis for any
expenses reasonably incurred by Operator in order for Operator on behalf of the
Owner to employ, retain, supervise, discipline and discharge such employees as
may be necessary for the proper and efficient operation, management and
maintenance of the Business. All such employees may be employees of, or
independent contractors to, the Owner; however, Operator shall provide human
resources services as required to maintain a responsive and productive work
force.

 

(b) Operator shall (i) pay with funds provided by Owner all wages and other
benefits properly payable to the employees or the independent contractors hired
by Operator for the Business, subject to Paragraph 3.04(a), above; (ii) maintain
adequate payroll and compensation records; (iii) remit to the proper authorities
all required income and social security withholding taxes, unemployment
insurance payments, workmen's compensation payments and such other amounts with
respect to the wages, compensation, and other benefits payable to such employees
and independent contractors as may be required under applicable laws, together
in each case with all required reports or other filings; (iv) use its best
efforts to settle any labor disputes with employees and independent contractors
otherwise manage the Business so as to minimize operational problems for Terra
Tech and the Owner; (v) obtain, maintain and administer all medical, disability
and other insurance benefits and other agreements or arrangements applicable to
the Owner's employment or engagement of such personnel; and (vi) institute best
practices for loss prevention of product, money, fixtures and equipment, and, to
that end, to the extent available, cause all of Owner's employees or independent
contractors who handle or are responsible for Owner's monies to be bonded by a
fidelity bond or to otherwise acquire insurance satisfactory to Terra Tech and
the Owner, which bond or insurance shall be in an amount sufficient to totally
cover loss or theft of said monies.

 

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3.05 Professionals and Contractors. Operator shall (i) identify and, solely upon
the prior, written approval of either of Terra Tech or the Owner, enter into
contracts with architects, engineers, accountants/bookkeepers, leasing agents or
brokers, attorneys, tradesmen and other independent contractors to perform
services and (ii) supervise the administration and monitor the performance of
all work to be performed and services to be rendered under all such contracts.
Operator shall use due care in the selection of all such professionals and other
independent contractors and shall not exceed the amount allocated for such
professionals and/or other independent contractors in the Approved Budget
without the prior, written consent of Terra Tech.

 

3.06 Equipment and Supplies; Utilities; Product Procurement.

 

(a) Operator shall, at Owner's expense, purchase all maintenance, janitorial
supplies, equipment and tools (such as restroom supplies, light bulbs, paint and
office supplies) necessary for the proper and efficient operation and management
of the Business and may only be used in connection with the Business. Operator
shall attempt to purchase all goods, supplies or services at the lowest cost
available from dependable sources, subject to Terra Tech and the Owner
exercising their discretion and authority in accordance with this Agreement and
to the limitations contained in ARTICLE IV. The purchase or lease of a single
piece of equipment or order of supplies in excess ofthe limitations contained in
ARTICLE IV which is not included in the Approved Budget shall require prior,
written consent of Owner. If Terra Tech fails to notify Operator of its
disapproval of any such purchase or lease within twenty (20) days after receipt
of Operator's proposal to purchase or lease, such purchase or lease shall be
deemed as approved.

 

(b) Operator shall, on behalf of Owner, enter into or renew contracts for
electricity, gas, steam, landscaping, telephone, fuel, oil, maintenance, vermin
extermination and other services such as are usual or customarily furnished in
connection with ownership, operating and rental of similar properties as the
Property for the operation of enterprises similar to the Business.

 

(c) Operator shall, on behalf of Owner, procure all necessary products
(medicinal or otherwise) required to successfully operate the Business. In
procuring product Operator shall utilize its discretion and experience, some of
which Terra Tech and the Owner acknowledge is proprietary to Operator, having
been developed by its principals over at least the fifteen (15) years prior to
the Effective Date.

 

3.07 Maintenance.

 

(a) Operator shall cause the Business and the Property to be maintained in good
and safe condition, comparable to that of other properly maintained businesses
and properties similar in type and location to that of the Business and the
Property.

 

(b) To the extent of the capacity of all equipment and systems located in or
servicing the Business, Operator shall assist Owner to cause all such equipment
and systems to be operated effectively and maintained in good repair and
Operator shall assist Owner to cause to be provided or made available those
services which Owner is required to provide or make available under the lease of
the Property.

 

(c) Subject to Terra Tech and the Owner exercising their discretion and
authority in accordance with this Agreement, Operator shall enter into such
service and maintenance contracts, to be paid for with funds provided by Owner,
as Operator shall deem necessary or appropriate for the operation and
maintenance of the Business, including the equipment and systems located in or
servicing the Business, contracts for utilities, elevator (if any) maintenance,
telephone service, office cleaning, window cleaning, landscape maintenance,
rubbish removal, fuel, security, food vending and vermin extermination.

 

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3.08 Repairs. Subject to the terms and conditions of any lease or sublease
pursuant to which the Owner occupies the Property and Terra Tech and the Owner
exercising their discretion and authority in accordance with this Agreement,
Operator shall cause such ordinary and necessary repairs to be made to the
Property and all equipment and systems located on or servicing the Property, and
shall cause such interior alterations and decorations to be made to the
Property, as Operator shall deem necessary or advisable for the proper operation
of the Business and the proper maintenance of the Property. Subject to the
provisions of this Section 3.08, but notwithstanding the cost limitations set
forth in this Agreement, Operator may cause to be made all emergency repairs
which are immediately necessary for the preservation or protection of the
Business and Property or the safety of employees, clients and other persons in
or on the Property or which repairs are otherwise required to avoid the
suspension of any necessary services in the Property. Operator may take such
steps without Terra Tech's or the Owner's prior approval and without limitation
as to cost; provided, however, that, in each such instance, Operator shall,
before causing any such emergency repair to be made, use reasonable, diligent
efforts under the circumstances to notify Terra Tech or the Owner of the
emergency situation and obtain approval of such repair.

 

3.09 Insurance. Operator shall obtain and maintain all such insurance coverage
for Terra Tech and the Owner and operation of the Business as required under
Article VIII of this Agreement, as well as such other insurance as is provided
for by the Approved Budget. Operator shall be named as an additional insured
under coverage so obtained. Operator shall prepare and file all reports, claims,
notices and other documents required in connection with such policies of
insurance and any claims thereunder.

 

3.10 Advertising - Public Relations.

 

(a) Operator, at the expense of Owner shall hire such advertising services,
shall place such advertisements and shall generally supervise and attend to all
promotional matters pertaining to the operation of the Business as Operator
shall deem advisable.

 

(b) Operator shall represent Owner in connection with all matters of general
public interest which pertain to the Business and shall attempt to amicably
resolve any complaints; disputes or disagreements in connection therewith as
promptly as is reasonably possible; all of the foregoing actions to be taken by
Operator after notice to and discussion with Terra Tech and the Owner.

 

3.11 Payment of Expenses. Operator shall pay, with funds from the Business
Account (defined below), all expenses which Operator properly incurs under the
terms of this Agreement, except for Operator's compensation under this
Agreement, which Owner shall pay. Operator shall at all times use its best
efforts to obtain for Owner, and shall credit to the account of Owner in each
case, all discounts rebates and other favorable financial terms which may be
available in connection with any costs or expenses Operator shall incur under
this Agreement.

 

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3.12 Business Account.

 

(a) Terra Tech and the Owner agree that the following sequence of payments is
acceptable: governmental fees and charges (e.g., taxes, license fees), rent and
utilities; payroll; product procurement; vendor invoices; compensation of
Operator; and any remaining invoices. Operator shall remit to Terra Tech or
Owner, as and when requested, all unexpended funds, except for sufficient funds
to operate the Business and a reserve for contingencies in an amount determined
by Terra Tech and the Owner.

 

(b) Should the expense of operating the Business at any time show that the sums
deposited by Operator in the Business Account are less than the amount needed
(without regard to cash on hand) to pay those recurring expenses best paid by
check, Operator will notify Terra Tech of the sum actually needed. Owner shall,
as soon as practicable thereafter, advance said sum to Operator.

 

3.13 Payroll and Other Taxes and Contributions. Operator, with funds provided by
Owner, shall be responsible for retaining a vendor for the payment of all
federal, state and local payroll taxes and for contributions for unemployment
insurance, social security and other benefits imposed or assessed under any
provision of law or by regulation, and which are measured by salaries, wages or
other remuneration paid or payable by Operator on behalf of Owner to its
employees and independent contractors engaged in any work in connection with
this Agreement or the Property.

 

3.14 Miscellaneous Expenditures. At Owner's expense, Operator shall cause to be
timely disbursed all principal and interest payments on encumbrances on the
Business, real estate and other taxes, insurance premiums, utilities, water and
sewer charges, and assessments of every nature in respect to the Business or to
Property as well as the cost of any other item or items associated with the
operation of the Business or to the Property not specifically set out herein but
which are consistent with the Approved Budget.

 

3.15 Financial Services. Operator shall perform or cause to be performed, the
following: (i) process and pay operating and capital invoices; (ii) record
activity and compare such activity to Approved Budget amounts; (iii) reconcile
the Business Account; (iv) remit excess funds to Owner and request needed funds
from Owner; (v) maintain books of account for Owner's funds (as more
specifically provided elsewhere in this Agreement); and (vi) submit periodic
financial reports to Owner (as more specifically provided in this Agreement).

 

ARTICLE IV
LIMITATIONS OF OPERATOR'S POWERS AND AUTHORITY

 

4.01 Expenditures. Except to the extent provided for in the Approved Budget or
as otherwise specifically provided for in this Agreement with respect to
emergency situations or otherwise, Operator shall not, without the prior written
approval of Terra Tech or Owner, incur any single expense for a repair,
alteration, service, supply or other matter whatsoever which would involve a
cost in excess of One Hundred Thousand Dollars ($100,000.00), provided that
Operator may purchase product for resale in any amount subject to its reasonable
discretion and experience in product procurement developed by its principals
over the past fifteen (15) years.

 

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4.02 Capital Expenditures. With respect to purchase and installation of major
items of new or replacement equipment, the Operator shall recommend that Owner
purchase these items when Operator believes such purchase to be necessary. If
Terra Tech or Owner requires, Terra Tech or Owner may communicate to Operator
its acceptance or rejection of bids; otherwise Operator shall accept or reject
applicable bids. Owner may pay capital expenses from its own resources or may
authorize payment by Operator out of the Business Account.

 

ARTICLE V
BUDGETS

 

5.01 Budget for first Operating Year. Operator shall commence preparation and
shall submit to Terra Tech and Owner a pro forma budget for the operation,
management and maintenance of the Business covering operations. Operator shall
manage the Business consistent with and subject to the cost limitations set
forth in such budget as the same may be adjusted in accordance with the
provisions of this Paragraph 5.01.

 

5.02 Annual Budgets after First Operating Year. Operator shall prepare and
submit to Terra Tech and Owner a proposed pro forma budget for all costs
pertaining to the operation, management and maintenance of the Business during
such Operating Year.Each such budget shall be substantially in the same form as
the Approved Budget (defined below) in effect for the prior Operating Year. Each
such budget shall set forth expenditures on an annual and a monthly basis.
Operator shall make such reasonable modifications to each proposed pro forma
budget it prepares in accordance with this Paragraph 5.02 until Terra Tech and
the Owner shall have approved such budget in writing. Terra Tech and the Owner
agree not to unreasonably withhold or delay their review and approval thereof.
If Terra Tech and the Owner fail to approve a budget submitted by Operator
within thirty (30) days following submission to each of them, the budget will be
deemed to be the Approved Budget for the particular Operating Year involved.
Terra Tech, the Owner and the Operator acknowledge that the procurement of
products (medicinal and other) shall be exempt from the content and restrictions
of the Approved Budget since it is not possible to accurately forecast the
increase in sales of product from year to year, the Parties acknowledging that
the mission of the Business is to provide medicine and services to the patients
and caregiver members utilizing Owner's services, medicine and other authorized
products. Notwithstanding the above, upon reasonable periodic requests from
Terra Tech or the Owner, the Operator shall (in light of its proprietary
information and experience in the industry) advise Terra Tech and the Owner as
to the level of inventory by product (both in quantity and in economic value)
that the Operator believes the Business should maintain for the one-, two-, or
three-month period following such requests.

 

5.03 Approved Budgets and Operating Years. Each pro forma operating budget
approved by Terra Tech and Owner in accordance with Paragraph 5.02, above, and
the pro forma budget referred to in Paragraph 5.01, above, together with any
adjustments thereto, is referred to in this Agreement and shall be deemed to be
the "Approved Budget" for the period covered by such budget. Each Approved
Budget shall cover a period which shall begin on January1 and end on December
31, which is referred to in this Agreement as an "Operating Year".

 

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5.04 Limitations of Approved Budgets. Except as otherwise specifically provided
in this Agreement, Operator shall incur costs and expenses in connection with
the operation, management and maintenance of the Business during any Operating
Year within the limitations established by the Approved Budget for such
Operating Year. Further, Operator shall not, without Terra Tech's and Owner's
prior written consent, incur costs and expenses with respect to any calendar
month which would result in the budget for such month, (or in any major category
thereof) as shown in the Approved Budget then in effect being exceeded by more
than twenty percent (20%). Overages shall not take into consideration, the
following (in addition to the exemption of product): costs and expenses relating
to utility charges, real estate taxes, insurance or otherwise which are not
within Operator's reasonable control and which, if not incurred, would or might,
in Operator's reasonable judgment, adversely and materially affect the operation
and maintenance of the Business. In addition, if any Operating Year shall
commence before Terra Tech and Owner shall have approved the proposed pro forma
budget (or the deemed approval) for such year, Operator shall use its reasonable
judgment in incurring costs and expenses relating to the operation and
maintenance of the Business until an Approved Budget for such Operating Year
shall be in effect and in doing so shall be guided by the Approved Budget for
the prior Operating Year. In such a case, Operator shall be subject to the same
financial limitations established by the last effective Approved Budget as if
such budget had been in effect for the then current Operating Year, increasing,
however, the amount of funds set aside for each category of such budget by four
percent (4%).

 

ARTICLE VI
BOOKS, RECORDS, REPORTS AND ACCOUNTING

 

6.01 Books and Records. Subject to Terra Tech and the Owner exercising their
discretion and authority in accordance with this Agreement and whether or not
specified in the SOPs, the Operator shall establish and maintain or cause to be
established and maintained, such books of account, records and other
documentation pertaining to the operation and maintenance of the Business and
Property. Operator shall cause to be prepared and file all returns and other
reports relating to the Business (other than income tax returns and any reports
or returns which may be required of any foreign owner of United States real
property) as may be required by any governmental authority or as otherwise may
be required under this Agreement. Operator will endeavor to hire competent
professionals to provide the services enumerated herein, but cannot be
responsible for errors made by such professionals in providing such services.

 

6.02 Monthly Reports. Whether or not specified in the SOPs, the Operator shall
prepare and deliver, or caused to have prepared and delivered, to Terra Tech and
the Owner a quarterly report setting forth detailed statements of collections,
disbursements, delinquencies, balances of account, accounts payable and other
matters relating to the management and operation of the Business. Such
statements shall, upon Terra Tech's and Owner's request, be accompanied by
appropriate documentation of all expenditures made by Operator under this
Agreement.

 

6.03 Year-End and Final Reports. Whether or not specified in the SOPs and as
soon as practicable after the end of each Operating Year and after the
expiration or termination of this Agreement, Operator shall prepare and deliver
to Terra Tech and the Owner statements pertaining to the operation and
maintenance of the Business during the preceding Operating Year (or applicable
portion thereof).

 

6.04 Inspection and Audit of Records. Whether or not specified in the SOPs,
Terra Tech and the Owner shall have the right during reasonable business hours;
and upon reasonable notice to inspect, audit, examine and make copies of or
extracts from the books of account and records maintained by Operator pursuant
to this Agreement. Such rights may be exercised through an employee of Terra
Tech or qualified agent designated by Terra Tech, and Owner shall bear all
expenses in connection with such examination.

 

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6.05 Accounting Matters. Whether or not specified in the SOPs, the books of
account will be maintained on an accrual basis, unless required otherwise by the
tax laws applicable to the Business.

 

6.06 Property of Operator. The records, reports, books of account and other
documents and materials relating to the management and procedures, vendor
relationships, operation and maintenance of the Business shall be the property
of Operator. Whether or not specified in the SOPs, during the term of this
Agreement, as well as upon its termination, Terra Tech and Owner may make copies
of all or portions thereof as Terra Tech shall deem pertinent to its reporting
obligations under the Federal and relevant state securities laws, rules, and
regulations, the operation of its other businesses or those of its other
subsidiaries or affiliates and as Owner shall deem pertinent to Owner's future
operation and ownership of the Business.

 

6.07 Final Accounting. Whether or not specified in the SOPs, and within ninety
(90) days after the date of termination of this Agreement, Operator shall
deliver to Terra Tech and the Owner a final accounting for all Business funds
handled by Operator and shall pay to Owner the balance of all monies in the
Property Account or in the possession of Operator.

 

ARTICLE VII
OWNER'S DUTIES

 

7.01 Plans, Specifications and Documents. Owner shall make readily available to
Operator copies of the plans and specifications of the Property and a recent
survey of the Property (if available) and shall provide Operator with such
information and materials pertaining to the layout and construction of the
Property, any elevators and lighting of the Property and the heating, air
conditioning, ventilating, plumbing, electrical and other mechanical systems and
equipment in or servicing the Property as Operator may reasonably request. Owner
also shall provide Operator with copies of or convenient access to all
agreements, leases, licenses, certificates, contracts, bills, notices and other
documents pertaining to the Property.

 

ARTICLE VIII
INSURANCE

 

8.01 Procurement of Insurance.

 

(a) Operator shall procure and maintain during the term of this Agreement,
comprehensive public liability insurance in amount specified by Terra Tech and
the Owner and fidelity bonds in amount specified by Terra Tech and the Owner
covering all personnel of Operator. If Terra Tech or the Owner fails to specify
any coverages or limits, Operator shall procure such insurance coverages and
limits in its reasonable discretion.

 

(b) Operator shall procure and maintain during the term of this Agreement all
other forms of insurance as may be required by law or Terra Tech or the Owner;
all with such companies, in such amounts and with such beneficial interests
appearing therein as may be required.

 

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(c) All policies of insurance required pursuant to Paragraph 8.01 of this
Agreement shall be procured and maintained in the name of and at the sole
expense of Owner. Owner may elect by notice in writing to Operator to procure
and maintain insurance itself, and Operator shall have no obligation to procure
and maintain the insurance which Owner has so elected to procure and maintain.

 

(d) Operator shall secure and maintain such other insurance policies as Terra
Tech or the Owner may desire such as elevator liability, steam boiler insurance
and the like.

 

(e) Operator shall be named as co-insured in all policies of insurance required
pursuant to this Paragraph 8.01. All original certificates evidencing any
insurance policy shall be delivered to Terra Tech.

 

8.02 Investigation of Claims. Operator shall investigate all accidents or claims
for damage relating to the operation, management and maintenance of the Business
and the Property, submit a written report of the results of such investigation
to Terra Tech and the Owner, and cooperate with and make any reports required by
any insurance company; provided, however, that such reports shall be submitted
to and approved by Terra Tech and the Owner in writing prior to being submitted
to any insurance company.

 

8.03 Worker's Compensation Insurance. Without in any way limiting the other
provisions of Paragraph 8.01 regarding insurance, Operator shall procure on
behalf of Owner worker's compensation insurance an all other insurance necessary
to meet federal and state requirements in accordance with the laws of the State
of California and employer's liability insurance applicable to and covering all
persons engaged in performance of the work to be performed to the best of our
ability.

 

ARTICLE IX
COMPENSATION – OPERATIONS AND ASSET MANAGEMENT FEE;
RIGHT OF FIRST REFUSAL

 

9.01 Amount and Payment. Owner shall pay Operator an annual fee ("Fee") for its
performance of the duties under this Agreement payable in monthly installments
in arrears on the last day of each month as follows:

 

(i) A basic Fee for the twelve month period following the Effective Date in the
amount of $500,000 per annum. If the revenue projections are met (per attached
forecast), the basic Fee will increase in the subsequent twelve month period to
$550,000, and to $600,000 for the third twelve month period following the
Effective Date (or merger), unless explicitly otherwise agreed between the
Parties. Should this Agreement not be terminated as provided in Paragraphs 10.01
and 10.02, the basic Fee will be 3½% of Owner Operating Revenue (defined as
gross revenue from normal business operations including IVXX sales) for each
twelve month period commencing with the fourth twelve month period;

 

(ii) Any annual increase established by the formula contained in Paragraph
9.01(i) immediately above shall be in recognition of the additional level of
services provided by Operator as a natural consequence of the increase in gross
revenue occasioned by Operator's management and operation of the Business; and

 

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(iii) If this Agreement is renewed pursuant to Paragraph 2.02, Operator's
compensation for each year of services following exercise of the option shall be
3½% of Owner Operating Revenue (defined as gross revenue from normal business
operations including IVXX sales), unless otherwise agreed to by the Parties.

 

9.02 Additional Consideration for Cultivation Center. In connection with the
establishment and operation of a cultivation center (the "Cultivation Center")
located on the Property, Owner shall pay to Operator a special fee payable in
monthly installments in arrears on the last day of each month for these
additional services as follows:

 

--50% of the net profit for months 1-12 from the Effective Date (or merger)  

--50% of net profit for months 13-24  

--50% of net profit for months 25-36

 

"Net profit" is defined as gross revenue from the cultivation facility less
associated overhead and operating expense.

 

9.03 Right of First Refusal. Terra Tech grants Operator a right of first refusal
to operate any other dispensaries and/or cultivation centers acquired or opened
by Terra Tech (including any Terra Tech subsidiaries) no matter where located
upon terms similar to those contained in this Agreement, including duration,
duties and responsibilities, and a fee to be negotiated based on a formula to be
agreed upon by the Parties regarding each new operation.

 

9.04 Reasonable Compensation. Terra Tech, the Owner and Operator agree that
Operator's compensation as provided in this Article IX is fair and reasonable in
consideration of the nature and volume of services to be provided by Operator
under this Agreement and in light of the proprietary information and experience
in the industry contributed to the providing of the services hereunder to be
performed by the principals of Operator. To the extent that Terra Tech (or
Owner) and Operator agree that any of the compensation provided to Operator
hereunder violates any law or regulation regarding the operation of the
Business, then Terra Tech (or Owner) and Operator will negotiate in good faith
reasonable compensation for Operator's services utilizing the amounts of
compensation agreed to hereunder as a benchmark.

 

If Terra Tech (or Owner) and Operator cannot agree upon the amount of
compensation due to Operator hereunder, the Parties shall resolve the dispute by
binding arbitration before JAMS as follows: Any Party to this Agreement may
commence the arbitration process called for in this Agreement by filing a
written demand for arbitration with JAMS, with a copy to the other Party.
Notwithstanding the amount in dispute, the arbitration will administered in
accordance with the Streamlined Arbitration Rules and Procedures (the "Rules")
in effect at the time of filing of the demand for arbitration, and conducted at
a location determined by the arbitrator within Alameda or San Francisco County,
California. The arbitrator shall be a retired judge with significant experience
resolving disputes relating to commercial transactions. The Arbitrator's fees in
connection with any such arbitration proceeding shall initially be shared
equally between Terra Tech (or Owner) and Operator, subject to any reallocation
in accordance with the Arbitrator's decision. The Arbitrator will also have the
authority to award reimbursement of reasonable attorney's fees to the prevailing
party as determined by the Arbitrator. In light of the Parties' desire to
proceed informally, expeditiously and at minimal expense, the Parties agree to
waive all discovery and any oral hearing and to submit all disputes to the
Arbitrator based solely upon written submissions. The Arbitrator shall apply the
substantive and procedural laws of the State of California, without regard to
the conflicts of law principles of such State. The Arbitrator's decision and
award shall be rendered in writing with counterpart copies to both Parties.
Judgment upon an arbitration award may be entered in any court having competent
jurisdiction thereof, and shall be binding, final and non-appealable. In the
event of any conflict between this Section 9.04 and the Rules, this Section 9.04
shall govern and control.

 

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ARTICLE X
DEFAULT - TERMINATION.

 

10.01 Optional Termination. Terra Tech or Owner may immediately terminate this
Agreement at any time if the Operator shall materially default in the
performance of any of its obligations under this Agreement. In such event, Terra
Tech or Owner, as relevant, shall provide Operator with written notice thereof
setting forth the nature of the default, and the Operator shall have (i) zero
(0) days to cure a default based upon fraud, (ii) fifteen (15) days to cure a
monetary default or (iii) thirty (30) days to cure a non-monetary default;
provided, however, that, if the nature of the alleged non-monetary default is
such that it cannot reasonably be cured within thirty (30) days, Operator may
cure such default by commencing in good faith to cure such default promptly
after its receipt of such written notice and prosecuting the cure of such
default to completion with diligence and continuity within a reasonable time
thereafter. If Operator disputes any determination by Terra Tech or Owner, as
relevant, that a material default has occurred or not been timely cured, the
Parties shall submit the dispute to arbitration in accordance with the
provisions contained in Paragraph 9.04. During such proceedings Owner shall
accrue compensation to Operator as otherwise required hereunder.

 

10.02 Automatic Termination. This Agreement shall terminate automatically if
either (i) Owner Operating Revenue drops 20% from one year to the next after
three (3) years from the Effective Date (or merger, if later in time), or (ii)
Owner ceases operations at the Property for any reason and does not relocate to
another location within the city limits of Oakland, California within five (5)
years of cessation.

 

10.03 Survival of Obligations. Upon the expiration or valid termination of this
Agreement, (i) Terra Tech's and Owner's appointment of Operator hereunder shall
cease and terminate and, except as otherwise specifically provided hereunder,
Terra Tech and Owner and Operator shall have no further obligation or liability
to the other regarding operations at the Property; (ii) Operator shall no longer
have any authority to represent Terra Tech or Owner or take or cause to be taken
any actions on Terra Tech's or Owner's behalf regarding operations at the
Property; and (iii) Owner shall pay Operator all fees which shall have accrued
through the date of termination, plus a termination fee in the amount of Four
Hundred Fifty Thousand Dollars ($450,000.00) if this Agreement is terminated
during the first three years of the initial Term of this Agreement for any
reason other than Operator's default; provided, however, that such termination
fee shall be prorated during such period. For example, if this Agreement is
terminated for any reason other than Operator's default as of the first
anniversary of the Effective Date, the termination fee would be Three Hundred
Thousand Dollars ($300,000.00) and if such termination is at the end of eighteen
(18) months after the Effective Date, the termination fee would be Two Hundred
Twenty-five Thousand Dollars ($225,000.00).

 

10.04 Return of Owner's Property. Immediately after the expiration or
termination of this Agreement, Operator shall deliver to Owner (i) the balance
of any funds then held by Operator on Owner's Business Account pursuant to this
Agreement; and (ii) all books, records, leases, agreements and other documents
which are necessary or materially pertinent to the management and operation of
the Business or to the Property.

 

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ARTICLE XI
INDEMNIFICATION

 

11.01 Scope. Each Party shall indemnify and hold harmless the other Party, its
principals, officers, directors, shareholders, partners, employees and agents
(individually and collectively, the "Indemnitees") from and against all
liabilities, claims, suits, damages, judgments, costs and expenses of whatever
nature, including reasonable counsel fees and disbursements, to which the
Indemnitees may become subject by reason of or arising out of any injury to or
death of any person(s), damage to property, loss (economic or otherwise) or use
of any property or otherwise in connection with the performance of such other
Party's obligations under this Agreement.

 

11.02 Conditions. The Parties' respective obligations to indemnify, hold
harmless and reimburse the Indemnitees above under Paragraph 11.01 are subject
to the following conditions:

 

(a) the Indemnitees shall promptly notify the prospectively indemnifying Party
of any matter with respect to which such Party is required to indemnify, hold
harmless or reimburse the Indemnities; and

 

(b) the Indemnities shall not take any actions, including an admission of
liability, which would bar the prospectively indemnifying Party from enforcing
any applicable coverage under policies of insurance held by such Party or would
prejudice any defense of such prospectively indemnifying Party in any
appropriate legal proceedings that pertain to any such matter or otherwise
prevent such prospectively indemnifying Party from defending itself with respect
to any such matter.

 

11.03 Excluded Matters. Notwithstanding the foregoing, no Party shall be
required to indemnify, hold harmless or reimburse the Indemnitees with respect
to any matter to the extent the same resulted from the gross negligence or
willful malfeasance of the Indemnitees.

 

11.04 Survival. The provisions of this Article XI shall survive the expiration
or any termination of this Agreement.

 

ARTICLE XII
MISCELLANEOUS

 

12.01 Independent Contractor Status. Operator is and shall at all times remain
an independent contractor of Terra Tech and the Owner and under no circumstance
shall Operator be deemed to be the employee of Terra Tech or the Owner.

 

12.02 Suits and Claims. Operator shall notify Terra Tech and the Owner and its
or their insurance carrier in writing as soon as possible after receipt of
notice of (i) any injury occurring on the Property or the Business; (ii) any
claim against Terra Tech, the Owner and/or Operator; and (iii) any claim which
involves said Property. Operator shall take no steps (such as the admission of
liability) which would operate to bar Terra Tech or the Owner from obtaining any
protection afforded by any policies of insurance it may hold, or which would
operate to bar Terra Tech or the Owner from obtaining any protection afforded by
any policies of insurance either may hold, or which would operate to prejudice
the defense in any legal proceeding involving Terra Tech, the Owner or said
Property, or which would otherwise prevent Terra Tech or the Owner from
protecting itself against any such claims, demand, or legal proceeding. Operator
shall fully cooperate with Terra Tech and the Owner in the defense of any such
claim, demand, or proceeding.

 

 13

 

  

12.03 Purchase or Sale of the Property. Terra Tech shall inform Operator of its
intention to either purchase, or if purchased, then to sell the Property and
furnish the terms and conditions of such purchase or sale to Operator. In either
such case, Terra Tech agrees to notify Operator in writing of the date of
closing, the progress of the closing process, and what measures and steps Terra
Tech wishes Operator to take in preparation for such closing.

 

12.04 Third-party Beneficiary Rights. This Agreement is made solely for the
benefit of Operator and Terra Tech and the Owner. No other third party is
intended to or shall have any third-party beneficiary rights under this
Agreement against the Operator or Terra Tech or the Owner.

 

12.05 No Interest in Business Account or Other Owner's Funds. All funds and
revenues relating to the Business, including but not limited to the Business
Account, shall solely be those of Owner, but Operator shall have an interest or
lien against any such monies to secure payment of its compensation hereunder.

 

12.06 No Recordation. Except as required by local, state, or federal law or
regulation, neither this Agreement nor any memorandum thereof shall be recorded
by any Party at any time. 

 

12.07 Timely Performance. Terra Tech, the Owner and Operator shall each perform
all of their respective obligations under this Agreement in a proper, prompt and
timely manner. Each shall furnish the other with such information and assistance
as the other may from time to time reasonably request in order to perform its
responsibilities hereunder. Terra Tech, the Owner and Operator each shall take
such actions as the other may from time to time reasonably request and otherwise
cooperate with the other so as to avoid or minimize any delay or impairment of
any Party's performance of its obligations under this Agreement.

 

 14

 

  

12.08 Notices.

 

(a) General. Any and all notices required or permitted to be given to a Party
pursuant to the provisions of this Agreement will be in writing and will be
effective and deemed to provide such Party sufficient notice under this
Agreement on the earliest of the following: (i) at the time of personal
delivery, if delivery is in person; (ii) at the time of transmission by
facsimile, e-mail or other electronic means, addressed to another Party at its
facsimile number or e-mail address specified herein (or hereafter modified by
subsequent notice to the Parties hereto), with confirmation of receipt made by
printed confirmation sheet verifying successful transmission of the facsimile or
e-mail; (iii) one (1) business day after deposit with an express overnight
courier for United States deliveries, or two (2) business days after such
deposit for deliveries outside of the United States; or (iv) three (3) business
days after deposit in the United States mail by certified mail (return receipt
requested) for United States deliveries, as follows:

 

If to Operator, to:

 

Platinum Standard, LLC 

847 Howard St. 

San Francisco, CA 94103 

Attention: Miguel Rodriguez 

E-Mail: miguel@blumoak.com

 

with a copy to: 

(which shall not constitute notice) 

Louis N. Haas, Esq. 

Haas & Najarian, LLP 

58 Maiden Lane, 2nd Fl. 

San Francisco, CA 94108 

E-Mail: lhaas@hnattorneys.com 

 

If to Terra Tech or to Owner, to:

 

Terra Tech Corp. 

4700 Von Karman, Suite 110 

Newport Beach, CA 92660 

Attention: Michael Nahass 

E-Mail: mike@terratechcorp.com

 

with a copy to: 

(which shall not constitute notice) 

Randolf W. Katz, Esq. 

Baker & Hostetler LLP 

600 Anton Boulevard, Suite 900 

Costa Mesa, CA 92626-7221 

Email: rwkatz@bakerlaw.com

 

 15

 

  

Any notices delivered by a Party in any manner other than those described above
shall be deemed properly given when received. Any Party may change its address
for the giving of notices under this Agreement by delivering to the other
Parties ten (10) days prior written notice of such change of address.

 

(b) Emergency Notices. Any Party may give the other notice of emergency
situations orally (personally, by telephone or otherwise), provided that the
Party giving any emergency notice as provided above in this Paragraph shall
confirm the same by written notice in accordance with Paragraph 12.09(a) above.

 

12.9 Affiliates. Operator may retain or use any person or entity who is an
affiliate of Operator provided that such retention is on terms which are
arm's-length and no worse than those which would be obtainable from unrelated
third parties. The term "affiliate" as used in this Paragraph shall mean and
refer to any entity in which the Operator, or any shareholder, partner officer
or director of Operator has a financial interest, or any person who is related
by blood or marriage to Operator or any shareholder, partner, officer or
director of Operator.

 

12.10 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of California, without giving effect to
that body of laws pertaining to conflict of laws.

 

12.11 Entire Agreement. This Agreement and the documents referred to herein
constitute the entire agreement and understanding of the Parties with respect to
the subject matter of this Agreement, and supersede all prior understandings and
agreements, whether oral or written, between or among the Parties hereto with
respect to the specific subject matter hereof.

 

12.12 Amendments. This Agreement may not be amended or modified except in
writing executed by each of the Parties.

 

12.13 Successors. This Agreement shall be binding on and shall inure to the
benefit of the permitted successors and assigns of the Parties hereto.

 

12.14 Severability. If any provision of this Agreement or application to any
Party or circumstances shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder of
this Agreement or application of such provision to any Party or circumstance,
other than those as to which it is so determined invalid or unenforceable, shall
not be affected thereby and each provision hereof shall be valid and shall be
enforced to the fullest extent permitted by law.

 

12.15 Counterparts. The Parties agree that this Agreement may be executed in one
or more counterparts, including facsimile signatures, each of which shall, for
all purposes, be deemed an original and all of such counterparts, which when
taken together shall constitute one and the same Agreement.

 

12.16 Headings. The headings of this Agreement are for purposes of reference
only and shall not limit or otherwise affect the meaning hereof.    

 

12.17 Gender. Any references in this Agreement to any one gender, masculine,
feminine or neuter, includes the other two, and the singular includes the
plural, and vice versa, unless the context otherwise requires.

 

12.18 Force Majeure. No Party shall be liable for any acts or omissions
resulting from circumstances or causes beyond its reasonable control, including,
without limitation, fire or other casualty, act of God, strike or labor dispute,
war or other violence or any governmental action; provided, however, that this
provision shall (i) apply to excuse any drop in Owner Operating Revenue, but
(ii) not apply to excuse any late or non-payment by the Owner under any
circumstances.

 

[SIGNATURE PAGE ATTACHED]

 

 16

 

 

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be duly
executed by their duly authorized officers as of the Effective Date.

 

 

Terra Tech:  

 

Operator:

 

 

 

 

 

 

Terra Tech Corp.,
a Nevada corporation  

 

Platinum Standard, LLC,
a California limited liability company

 

 

 

 

 

 

By:

/s/ Michael Nahass

 

/s/ Miguel Rodriguez

 

Name:

Michael Nahass

 

Miguel Rodriguez

 

Title:

Director and Authorized Representative

 

Authorized Manager

 

 

 

 

 

 

Owner:

 

 

 

 

Black Oak Gallery,
a California corporation

 

 

 

By: /s/ Derek PetersonName:

Derek Peterson

Title:

Authorized Representative

 

 

17

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