EXHIBIT 10.2

 

SECOND AMENDED AND RESTATED

SERVICES AGREEMENT

 

This Second Amended and Restated Services Agreement (the “Agreement”) is made
and entered into as of July 17, 2007, by and between TERRA INSIGHT CORPORATION,
a Delaware corporation (“TIC”), and THE INSTITUTE OF GEOINFORMATIONAL ANALYSIS
OF THE EARTH, a Liechtenstein establishment (the “INSTITUTE”). This Agreement
further amends and restates the Services Agreement dated as of January 7, 2005
between the parties, as amended by the Amended and Restated Services Agreement
dated as of May 19, 2005 between the parties (collectively, the “Original
Agreement”).

 

WHEREAS, the INSTITUTE is in the business of developing, using, and licensing
others to use, and is the developer and owner of certain technology and know-how
used in the surveying, mapping, detection, and reporting of natural resources of
the Earth (the “Mapping Technology”);

 

WHEREAS, TIC is in the business of providing services and products in connection
with the identification, location, exploration and recovery of deposits of
natural resources (“TIC Services”); and

 

WHEREAS, the INSTITUTE licensed all of its commercial Mapping Technology to TIC;

 

WHEREAS, the INSTITUTE agreed to provide related commercial services in the use
of the Mapping Technology;

 

NOW THEREFORE, for good and valuable consideration and on the promises and
premises set forth below, the parties agree as follows:

 

1.           GENERAL DESCRIPTION OF OBJECTIVES AND SCOPE OF SERVICE. TIC hereby
engages the INSTITUTE as an independent contractor, and not as an employee or
agent of TIC, to provide to TIC the services, as hereinafter set forth in
greater detail and within guidelines established by TIC and the INSTITUTE. The
INSTITUTE is not granted any right or authority to assume or create any
obligation or liability, express or implied, on behalf of TIC or in its name, or
to accept service of process in any action on its behalf or in its name, or to
bind TIC in any manner or form whatsoever.

 

TIC hereby retains the INSTITUTE to perform such consulting and advisory
services (the “Services”) requested by TIC for the duration of this Agreement.
The Services shall include suggestions of locations, detection, assessments,
prognoses, determinations, analysis, surveys, diagrams, modeling, mapping and
recommendations related to the utilization of the Mapping Technology,
preparation of reports of results of the Services, and interpretation of results
of uses of the Mapping Technology and of workings of the Mapping Technology. The
INSTITUTE agrees to perform for TIC the Services, including preparation of any
documentation related thereto. The INSTITUTE further agrees to perform the
Services in a good workmanlike and timely manner. All Services requested by TIC
shall be performed by personnel of INSTITUTE that are reasonably acceptable to
TIC. The INSTITUTE shall devote such time and efforts as are reasonably
consistent with the needs of TIC, and will devote such time as TIC reasonably
requests and requires. Notwithstanding anything to the contrary herein, TIC
shall own all of the work product of the Services.

 

2.           SERVICE TERM OF AGREEMENT. The service term of the Agreement shall
be for a period of thirty-two (32) years (the “Initial Service Term”) commencing
with the date of the Original Agreement and ending on January 7, 2037, unless
earlier terminated pursuant to the termination of the Second Amended and
Restated Technology License Agreement entered into by the parties as of even
date (the “License Agreement”). The Service Term shall automatically renew for
another thirty-two year period (the “Renewed Service Term”) unless terminated by
either party in writing within ninety (90) days before the end of the Initial
Service Term unless sooner terminated in accordance with the termination of the
License Agreement. The term “Service Term” as used in this Agreement refers to
each of the Initial Service Term and the Renewed Service Term.

 

 

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3.

PAYMENTS.

 

(a)          In connection with Services, the INSTITUTE shall be entitled to a
service fee (the “Services Fee”) at a substantial discount to the INSTITUTE’s
published rates. Prior to commencement of the requested Services, the INSTITUTE
shall provide an estimate of the anticipated total fees. For all Services, the
INSTITUTE shall charge TIC at the rate of (i) no more than 40% to 60% of its
published rates depending on the nature of the requested Services (the “Discount
Rate”) or (ii) no more than 10% over cost (the “Service Rate”). If the Discount
Rate is a lower price for the Services on a given project than the Service Rate,
the INSTITUTE may charge TIC the Service Rate. TIC shall pay such fees on a
project basis or as otherwise agreed by the parties. The INSTITUTE shall be
entitled to a minimum aggregate Services Fee per year for the Services of
$500,000 (the “Minimum Annual Services Fee”).

 

(b)          Until such time as TIC (including its parent corporation, Terra
Energy & Resource Technologies, Inc., a Delaware corporation (collectively,
“TERRA”)) generates revenues of at least $10,000,000 in a calendar year, or such
time as the market capitalization for TERRA exceeds $100,000,000, 83.334% of the
Annual License Fee (the “Annual License Fee”) payable by TIC to the INSTITUTE
pursuant to the License Agreement shall be credited against the Minimum Annual
Services Fee. Notwithstanding the above, in any calendar year in which TERRA has
revenues of less than $6,000,000, the Minimum Annual Services Fees shall be
credited against the Annual License Fee. Commencing in years after calendar year
2007, the Minimum Services Fees per year shall increase annually by the lesser
of (i) four percent (4%) or (ii) the percentage increase of the New York
Consumer Price Index using 2007 as the base year.

 

(c)          Notwithstanding anything to the contrary in Section 3(a) or Section
3(b) above, the Services Fees attributable to Internal Projects (as defined
herein) of TIC for the calendar year 2007 shall be deferred (the “Deferred
Services Fees”), and payable as provided for herein. For purposes hereof,
“Internal Projects” refers to natural resource projects that TIC or its
affiliated parties engage in pursuant to farmin or farmout agreements with third
parties for which projects TIC does not collect any project service fees.
Commencing with calendar year 2008, provided that TIC has total positive net
revenues from its operations of at least $2 million annually, the INSTITUTE
shall be entitled to payment on the Deferred Services Fee at a rate of no more
than $300,000 per year, provided that in the event that the INSTITUTE also has
payable deferred Annual License Fees owed to the INSTITUTE pursuant to the
License Agreement, the INSTITUTE shall be entitled to payment on the Deferred
License Fees and the Deferred Services Fees at the collective rate of no more
than $300,000 per year, on a pro rata basis. For purposes of this Agreement, the
Minimum Annual Services Fee includes all amounts deferred and treated as
Deferred Services Fees.

 

4.           CONFIDENTIAL INFORMATION. For purposes of this Agreement,
“Confidential Information” shall mean any information obtained by the INSTITUTE
from, or disclosed to the INSTITUTE by TIC which relates to the past, present or
future research, development and business activities of TIC (or TIC’s affiliated
companies), and to any of the intellectual property related thereto, to any
intellectual property developed by the INSTITUTE, heretofore or hereafter, or
that is previously known to the INSTITUTE or is publicly disclosed by TIC either
prior or subsequent to the INSTITUTE’s receipt of such Confidential Information.
The INSTITUTE shall hold all such receipt of such information in trust and
confidence for TIC for an infinite period, and, except as may be authorized by
TIC in writing, the INSTITUTE shall not disclose to any person, firm or
enterprise, or use for his benefit, any such confidential information. Upon
termination or expiration of this Agreement, the INSTITUTE shall deliver to TIC
all items in its possession, which may contain any such confidential
information.

 

5.           COVENANT NOT TO COMPETE. During the duration of this Agreement, the
INSTITUTE will not, within any jurisdiction in which the INSTITUTE or any
affiliate conducts its business operations, act in any way materially competing
with TIC, directly or indirectly, own, manage, operate, control, be employed by
or participate in the ownership, management, operation or control of, or be
connected in any manner with, any business of the type or character engaged in
or competitive with that conducted by TIC.

 

 

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6.           TERMINATION. In the event of termination of this Agreement, absent
the INSTITUTE’s material breach, TIC will provide four (4) weeks’ notice of
termination. In the event TIC fails to provide a four (4) week notice of
termination, TIC will be obligated to pay a termination fee equal to 8.33% of
the prior calendar year’s payments to the INSTITUTE by TIC. Termination of this
Agreement shall not relieve any obligations pursuant to the License Agreement.
The License Agreement shall survive the termination of this Agreement.

 

7.           ASSIGNABILITY. Neither party shall not assign any right or interest
in this Agreement without the prior written approval of the other party.

 

8.           WAIVER. A waiver of any breach or default under this Agreement
shall not constitute a waiver of any other right for subsequent breach or
default. Failure to enforce any term of this Agreement shall not constitute a
waiver of any rights to enforce subsequent breaches.

 

9.           SEVERABILITY. If any provision of this Agreement is declared void,
or otherwise unenforceable, that provision shall be deemed to have been severed
from this Agreement, which shall otherwise remain in full force and effect.

 

10.         NOTICES. Any notice or other communication required or permitted
hereunder shall be sufficiently given if sent by certified mail, overnight
courier, or facsimile (followed by prompt transmission of the original of such
notice by any of the foregoing means), in each case proper postage or other
charges pre-paid and addressed as set forth below:

 

If to TIC:

Attn.: Dmitry Vilbaum, Chief Executive Officer

Terra Insight Corporation

99 Park Avenue, 16th Floor

New York, New York 10016

Fax: 212-808-4155

 

With a copy (which shall not constitute notice) to:

Dan Brecher, Esq.

Law Offices of Dan Brecher

99 Park Avenue, 16th Floor

New York, New York 10016

Fax: 212-808-4155

 

If to INSTITUTE:

THE INSTITUTE OF GEOINFORMATIONAL ANALYSIS OF THE EARTH

c/o Ivan Railyan

8-27 M. Ulyanovoi Street

Moscow, Russia

Fax: +7 095 9565261

 

Such notice shall be deemed given when actually received. Any party may change
the address for notices by service of notice to the other as herein provided.

 

11.         ENTIRE AGREEMENT. This Agreement, together with the License
Agreement, including the exhibits annexed thereto, represent the entire
agreement between the parties and supersede any previous contemporaneous oral or
written agreements, commitments, representations or communications regarding the
subject matter of this Agreement. Any modification to this Agreement must be in
writing and signed by a duly authorized agent of both parties.

 

 

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12.         COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

13.         GOVERNING LAW. This Agreement shall be governed for all purposes by
the laws of the State of New York without regard to conflict of laws principles.
The parties expressly agree to jurisdiction of the state and federal courts
located in the City, County and State of New York. The parties irrevocably waive
any objection they now or hereafter may have respecting the venue of any such
action or proceeding brought in such a court or respecting the fact that such
court is an inconvenient forum, relating to or arising out of this Agreement,
and consent to the service of process in any such action or legal proceeding by
means of certified mail, return receipt requested, or overnight courier, in care
of the address set forth herein or such other address as provided for in
accordance with this Agreement.

 

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AGREED TO AND ENTERED INTO BY AND BETWEEN THE PARTIES AS OF THE

EFFECTIVE DATE SET FORTH ABOVE.

 

 

TERRA INSIGHT CORPORATION

 

 

 

By:         /s/ Dmitry Vilbaum  

Dmitry Vilbaum

Chief Executive Officer

THE INSTITUTE OF GEOINFORMATIONAL ANALYSIS OF THE EARTH

 

 

By:         /s/ Ivan Railyan  

Ivan Railyan

Authorized Signatory

 

 

 

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