EXHIBIT 10.2

 

EARTH PROPERTY HOLDINGS LLC

MANAGEMENT SERVICES AGREEMENT

 

THIS MANAGEMENT SERVICES AGREEMENT (the “Agreement”) is made effective as of
November 9, 2018 (the “Effective Date”) by and among Q2Earth Inc., a Delaware
corporation (“Service Company”), and Earth Property Holdings, LLC, a Delaware
limited liability company (the “Company”) on behalf of itself and its
subsidiaries set forth on Exhibit A, attached hereto and as amended from time to
time to include each newly acquired entity (each a “Subsidiary”).

 

RECITALS:

 

WHEREAS, the Company, through its current and future Subsidiaries, is in the
business of waste recycling, compost and soil manufacturing, and other
beneficial reuse applications (the “Operations”) and is in need of business
management including, but not limited to, strategy development and execution,
accounting, financial, administrative, human resources, information technology,
managerial and leadership, asset management, asset maintenance, engineering,
procurement, construction, logistics, sales, branding, marketing, research,
product development, business development, acquisition activities including due
diligence and finding new opportunities, and other related services (the
“Business Activities”);

 

WHEREAS, Service Company is engaged in the business of providing and executing
the Business Activities associated with the Operations of the Company and its
Subsidiaries, and has the capacity, expertise and knowledge to manage and
administer the Operations of the Company and to furnish the Company with
appropriate managerial, consulting, administrative, technological, financial,
construction and other support to oversee and execute the Business Activities
(the “Services”);

 

WHEREAS, Service Company is also engaged separately and independently from the
Services provided for the Operations of the Company in other synergistic
pursuits including brand development and management, technology research and
development, intellectual property protection and management, development of
regional or national sales channels and marking programs, and other similar
services (the “Special Services”) which it will provide to the Company and its
Subsidiaries on terms as further set forth herein;

 

WHEREAS, Company desires to engage Service Company to provide such Services and
Special Services as are necessary and appropriate for the day-to-day
administration, management and growth of the Company’s and its Subsidiaries’
Operations, and Service Company desires to provide such Services and Special
Services to Company, all upon the terms and subject to the conditions set forth
in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
acknowledged by the Parties, the Parties agree as follows:

 

   

 

 

TERMS OF AGREEMENT

 

1. ENGAGEMENT

 

a. Engagement of Service Company. Company hereby engages Service Company to
provide the Services for the Operations on the terms and conditions described
herein, and Service Company accepts such engagement. Service Company shall be
the sole and exclusive provider of the administration, management and execution
of the Services to be provided to or on behalf of Company and its Subsidiaries
for the Operations.

 

b. Agency. Company hereby appoints Service Company as Company’s true and lawful
agent throughout the Term of this Agreement, and Service Company hereby accepts
such appointment.

 

c. Appointment and Powers of Officers. To perform its Services hereunder,
specifically in connection with billing, collection, banking, contract
execution, appointment and removal of employees and consultants of Company and
its Subsidiaries and all related services incident to or under the Services to
be provided hereunder requiring authorized signatures, subject to approval by
the Company’s Board of Directors, Company hereby appoints the Service Company’s
CEO to serve as President of the Company, its CFO to serve as Treasurer of the
Company, and its President and/or General Counsel to serve as Secretary of the
Company (collectively, the “Company Officers”) each to hold such office until
removed by the Company’s Board of Directors. The Service Company shall have the
authority to change and replace the Company Officers at its discretion during
the Term of this Agreement provided such new persons are officers of the Service
Company and are approved by the Company’s Board of Directors. The Company
Officers shall not be compensated by the Company, as such compensation shall be
made entirely through the Management Fee. The authority of the Company Officers
shall, in addition to any other rights and responsibilities granted under this
Agreement, be those powers customarily authorized by a board of directors to
corporate officers holding such titles, including but not limited to the
following, in each case to the extent not modified by the Company’s Board of
Directors:

 

(i) To take possession of and endorse in the name of Company or any Subsidiary
on any note, check, money order, insurance payment or any other instrument
received.

 

(ii) To effectuate the transfer from the Company Account or any Subsidiary
Account to an account designated by Service Company for the payment amounts of
the fees and expenses set forth in Section 4 hereof as they become due.

 

(iii) To sign checks, drafts, bank notes or other instruments on behalf of
Company or any Subsidiary and to make withdrawals from the Company Account or
any Subsidiary Account for Company and Subsidiary Expenses and other payments
specified in this Agreement and as requested from time to time by Company’s
Board of Directors.

 

(iv) To otherwise manage or deal with the cash and funds of the Company and each
Subsidiary on the Company’s behalf in any way which is reasonable to accomplish
the provision of Services as may be rendered from time-to-time.

 

(v) To appoint and remove employees, agents, consultants, service providers,
management and officers of each of the Subsidiaries consistent with Company’s
governing documents in order to effect the successful operation of Company and
each of its Subsidiaries.

 

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(vi) To sign contracts, agreements and other written binding commitments of the
Company or its Subsidiaries, subject to approval of the Board of Directors of
the Company if such contract, agreement or commitment (A) would constitute a
material agreement creating a company obligation to file a Form 8-K if the
Company were public, (B) includes a license of the intellectual property of the
Company or (C) involves payments to or from the Company, individually or in the
aggregate, in excess of $100,000 (clauses (A) through (C) collectively,
“Material Agreements”).

 

(vii) To make demand with respect to, settle, and compromise such claims and to
coordinate with collections agencies (approved by Company) in the name of
Company or any Subsidiary, to commence any suit, action or proceeding to collect
any such claims.

 

d. Documentation to Bank. Upon request of Service Company, Company and each
Subsidiary shall execute and deliver to the financial institution wherein the
Company Account and/or Subsidiary Accounts are maintained, such additional
documents or instruments as may be necessary to effectuate the powers provided
in this Section. Service Company shall not use the Company Account and/or
Subsidiary Accounts for any purpose other than for the purposes specified in
this Agreement, and shall not combine either accounts’ funds with funds from any
other source, except for mistakes due to payor payment errors, which will be
corrected by Service Company as soon as possible upon discovery.

 

2. DUTIES AND RESPONSIBILITIES OF MANAGER

 

a. General Responsibilities. During the Term of this Agreement, Service Company
shall provide all Services as are necessary and appropriate for the day-to-day
administration and management of Company’s and each of the Subsidiaries’
Operations and business in a manner consistent with good business practice,
including without limitation:

 

(i) Personnel. Service Company shall develop and implement guidelines and
procedures (internally and through a payroll service) for the recruitment,
selection, hiring, firing, compensation including benefits, terms, conditions,
obligations and privileges of employment or engagement of employees working for
Company and each of the Subsidiaries. Service Company will assist Subsidiaries
in recruiting new employees and will carry out such administrative functions as
may be appropriate for such recruitment, including advertising for and
identifying potential candidates, assisting Subsidiaries in examining and
investigating the credentials of such potential candidates, and arranging
interviews with such potential candidates. Service Company will make the
ultimate decision as to whether to employ or retain a specific candidate.
Company, through its Subsidiaries, shall be solely responsible for compensating
its employees. Service Company expressly acknowledges its responsibility and
liability to provide for the payment and withholding of appropriate amounts for
income tax, social security, unemployment insurance, state disability insurance
taxes, and any authorized payroll deductions from the paychecks of Company and
Subsidiary personnel.

 

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(ii) Service Company Personnel. Service Company shall employ or contract with
and provide all necessary personnel it reasonably needs to provide the Services
hereunder. Such personnel shall be under the direction, supervision and control
of Service Company, and shall be employees of Service Company. Service Company
shall be responsible for setting and paying the compensation and providing the
fringe benefits of all Service Company personnel.

 

(iii) Training. Service Company shall provide reasonable training to Subsidiary
personnel in all aspects of the Operations material to the role of such
personnel, including but not limited to administrative, financial, operations,
safety, and standard operating procedures.

 

(iv) Operating Procedures. Service Company will assist and instruct the
Subsidiaries, implement and oversee best operating practices and standard
operating procedures (SOPs) for the Company and the Subsidiaries, and with
respect to these SOPs, provide essential advice and consulting all other aspects
of the Subsidiaries’ Operations.

 

(v) Compliance. Service Company shall maintain the Company and each Subsidiary,
to the extent reasonably possible, in compliance with the applicable State and
local regulations regarding operating composting businesses.

 

(vi) Insurance and Risk Management. Service Company shall oversee the Company’s
purchase of necessary insurance coverage and implementation of risk management
SOPs.

 

(vii) Accounting. Service Company shall establish and administer accounting
procedures and internal accounting controls and systems for the development,
preparation, and keeping of records and books of accounting related to the
business and financial affairs of Company and each Subsidiary, including,
quarterly reviewed and annual audited financial statements of the consolidated
Company required for funding partners or regulatory agencies, including SEC,
reporting purposes.

 

(viii) Information Technology. Service Company shall design, implement and
administer necessary computer systems and software that will allow
implementation throughout all Subsidiaries, allow for proper internal accounting
controls, management of electronic records and customer relations, generate the
necessary information to accurately reflect the state of the business, and to
improve efficiencies within the business.

 

(ix) Tax Matters. Service Company shall oversee the preparation of the annual
report and tax information returns required to be filed by Company and each
Subsidiary. All of Company’s tax obligations shall be paid by Service Company
out of Company’s funds managed by Service Company. Company shall also make such
reserves and set asides for taxes as directed by Service Company throughout the
year.

 

(x) Reports and Information. Service Company shall furnish the Company’s Board
of Directors and members in a timely fashion quarterly or more frequent
operating reports and other business reports as reasonably requested by
Company’s Board of Directors, including without limitation (i) copies of bank
statements and checks relating to Company’s bank accounts and (ii) financial
statements.

 

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(xi) Budgets. Service Company shall prepare for review and approval by Company’s
Board of Directors, all capital and annual operating budgets as needed. Such
approval from the Company’s Board of Directors shall not be unreasonably
withheld.

 

(xii) Expenditures. Service Company shall manage all cash receipts and
disbursements of Company and its Subsidiaries, including the payment on behalf
of Company and each of its Subsidiaries for any of the items set forth in this
Article 2, such as taxes, assessments, licensing fees and other fees of any
nature whatsoever in connection with the Operations as the same become due and
payable, unless payment thereof is being contested in good faith by Company.

 

(xiii) Contract Negotiations. Service Company shall negotiate, either directly
or on Company’s behalf, as appropriate and permitted by applicable law, such
contractual arrangements with third parties as are reasonably necessary and
appropriate for Company’s and its Subsidiaries’ Operations. Such services shall
also include seeking, negotiating, performing diligence, and consummating
acquisitions, joint ventures or partnerships by the Company or through its
Subsidiaries, and other material business development agreements, subject to the
Company’s Board of Director’s approval of Material Agreements.

 

(xiv) Billing and Collection. On behalf of and for the account of Company,
Service Company shall establish and maintain credit and billing and collection
policies and procedures, and shall exercise reasonable efforts to bill and
collect in a timely manner all professional and other fees for all billable
services provided by Company and its Subsidiaries.

 

(xv) Support Services. Service Company shall provide or arrange for all
engineering, construction, procurement and other similar outside services
required for the expansion of the Operations of the Company and its
Subsidiaries, and other support services as are reasonably necessary and
appropriate for the Operations.

 

(xvi) Regulatory Licenses. Service Company shall oversee and apply for the
regulatory applications for the Operations, including but not limited to,
regulatory due diligence, real estate selection, consultant support, application
preparation, standard operating procedures, and other services necessary for
submissions of such regulatory licenses.

 

(xvii) Licenses and Permits. Company shall be responsible for obtaining and
maintaining all federal, state, and licenses and regulatory permits required for
or in connection with the Operations. Service Company shall implement for the
Company and its Subsidiaries a plan designed to ensure that all such licenses
and permits are in compliance and shall provide reasonable assistance to Company
in obtaining the same.

 

(xviii) Real Estate Leases, Construction and Build-Out Support. Service Company
shall be responsible for managing and supervising the site selection, zoning,
leasing, construction oversight and build-out of Company and Subsidiary
facilities.

 

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(xix) Branding and Marketing. Service Company shall be responsible for
establishing, protecting and promoting Subsidiary brands, per the terms of
Section 5(a). Service Company shall oversee marketing and advertising programs
to be implemented by Company and its Subsidiaries. Service Company shall advise
and assist Company and its Subsidiaries in implementing such marketing and
advertising programs, including, but not limited to, analyzing the effectiveness
of such programs, preparing marketing and advertising materials, negotiating
marketing and advertising contracts on Company’s or Subsidiaries’ behalf, and
obtaining services necessary to produce and present such marketing and
advertising programs. Service Company and Company agree that all marketing and
advertising programs shall be conducted in compliance with all applicable
standards of ethics, laws and regulations. The Services set forth in this
Section 2.1(a)(xix) shall be performed subject to the terms of Section 5(a)
hereof.

 

(xx) Standard of Care. With respect to the Services to be provided to the
Company, Service Company shall discharge its responsibilities as a fiduciary and
act in good faith in the best interest of the Company and shall do so with that
degree of care, skill, prudence and diligence under the circumstances that a
prudent person acting in a like capacity and familiar with such matters would
exercise under similar circumstances in like positions.

 

(xxi) Other Activities. Any such other services or activities reasonably
requested by the Company’s Board of Directors or so deemed commercially
reasonable and prudent by the Service Company for the benefit of the Company and
the Subsidiaries.

 

b. Responsibilities as Company Officers. In connection with the appointment of
the Company Officers under Section 1(c) above, Service Company shall cause the
undertaking of the following:

 

(i) Taxes. The Company Officers shall prepare, sign and file all federal, state
and local tax reports required under applicable law.

 

(ii) Banking. The Company Officers shall open such bank accounts as shall be
required for prudent administration of the Operations, including (i) a Company
Account, being an account opened by and under the name of Company and under the
control of Company – as may be delegated for day-to-day handling by Service
Company subject to the provisions hereof, and (ii) any other Subsidiary Accounts
for the uses of each specific Subsidiary.

 

(iii) Cash Management. The Company Officers shall sign checks, drafts, bank
notes or other instruments on behalf of Company, and to make withdrawals from
Company Account for payments specified in this Agreement and as requested from
time to time by Company, and to otherwise manage all banking arrangements of the
Company Account and any Subsidiary Account. The Company Officers shall direct in
writing the bank at which the Company Account and each Subsidiary Account is
maintained to transfer electronically all such amounts in the Subsidiary
Accounts into the Company Account at the end of each business day.

 

(iv) Litigation Management. The Company Officers shall, only as directed by the
Company’s Board of Directors: (a) manage and direct the defense of all claims,
actions, proceedings or investigations against Company, any Subsidiary, or any
of its officers, directors, employees or agents in their capacity as such, and
(b) manage and direct the initiation and prosecution of all claims, actions,
proceedings or investigations brought by Company or any Subsidiary against any
person other than Service Company, subject to ultimate decision making authority
by Company.

 

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(v) Contracts. The Company Officers shall sign agreements, contracts and other
binding commitments of the Company or the Subsidiaries in their official
capacity, subject to the Company’s Board of Directors customary authority to
approve and authorize Material Agreements.

 

3. RELATIONSHIP OF THE PARTIES

 

a. Ultimate Authority over Company. Notwithstanding any other provision of this
Agreement, the Company’s Board of Directors, acting in capacity as a manager of
a limited liability company, shall have ultimate authority over its Operations
provided the Company does not breach this Agreement or diminish the right,
duties and authority of the Service Company (including the Company Officers)
provided herein; and to the extent that certain governance rights are provided
to the holders of the Class A Units of the Company or other classes of member
equity of the Company in Company’s Certificate of Formation (the “Charter”), the
LLC Agreement dated as of the date hereof, by and among the Company, the Class A
Members, and the Class B Members of the Company (the “LLC Agreement”), or
otherwise in written contract, such governance provisions shall take precedence
over the Service Company’s rights and responsibilities.

 

b. Relationship of the Parties. Nothing contained herein shall be construed as
creating a partnership, trustee, fiduciary joint venture, or employment
relationship between Service Company and the Company. In performing all services
required hereunder, Service Company shall be in the relation of an independent
contractor to Company, providing Services to the Operations operated by Company.

 

c. Synergistic Growth and Competitive Activities. The parties agree and
acknowledge that the creation of value and growth is critical to achieve at both
the Company and its Subsidiaries, and Service Company. The Service Company shall
serve in a similar managing capacity to other companies which are engaged in the
same line of business and have may similar equity holders, investors or
directors as the Company. In performing such services for other companies, the
Service Company will not directly compete with the Company’s operations
(although activities that support Company operations are allowable), and it will
be staffed and resourced so as not to materially interrupt or impede Service
Company’s duties and responsibilities to the Company.

 

4. FINANCIAL ARRANGEMENTS

 

a. Application of Revenues. The Parties agree to use care to allocate the
Company’s revenues for the following purposes, in the order set out below:

 

  i. Costs and Expenses of Company and its Subsidiaries. Revenues shall be
applied to pay all direct costs and expenses of Company’s and its Subsidiaries’
Operations, including, but not limited to, payroll and benefits for Subsidiary
employees, vendor payments, cost of sales, inventory, equipment repair and
maintenance, supply expense, marketing expenses, lease expenses for land or
equipment, insurance, regulatory fees, licenses, auditing and tax preparation
fees and fees of professional advisors such as attorneys, and other fees
necessary to run the Operations subject to the budgets in effect from time to
time.

 

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  ii. Debt Service Payments. To the extent permitted by the applicable debt
documents, revenues shall next be applied to pay all debt, notes, leases or
other financing liabilities of the Company and its Subsidiaries not included in
Section 4(a)(i) above, including all acquisition debt financing per the terms
and conditions set forth in any waterfall provision of such agreements.        
iii. Management Fee. Revenues shall next be applied to pay Service Company its
management fee (the “Management Fee”), which shall be provided as an annual
Budget each year and reasonably approved by the Company’s Board of Directors, as
such Budget may be revised and amended by Service Company with the approval of
Company. The Management Fee for the period beginning on the date hereof and
ending on December 31, 2019 shall be $200,000 (Two Hundred Thousand Dollars), as
set forth in the attached First Year Budget, which shall be paid no less than
quarterly, as reasonably agreed by the Parties.         iv. Remainder. Remaining
revenues shall be retained to be re-invested by Company, or otherwise disbursed
as approved by the Company’s Board of Directors.

 

b. GAAP. Except as specifically provided otherwise, in keeping Company’ books
and records, Service Company shall record all revenue, refunds, rebates, costs,
expenses, and any other information using the same accounting method under which
Service Company keeps its own books and records, in accordance with GAAP,
consistently applied.

 

c. Budget. Service Company shall prepare annual budgets for Company’s approval
showing expected revenues and expenses, and shall revise such budgets as the
parties deem appropriate from time to time.

 

d. No Responsibility for Shortfalls. It is understood that Service Company will
perform its Services as efficiently and effectively as commercially practical;
however, in no instance will Service Company be financially responsible to fund
or advance budget shortfalls for the Company or its Subsidiaries.

 

5. SPECIAL SERVICES

 

a. Brands and Tradenames. In order to maintain continuity of brand identity and
strategy, Service Company will update, improve and expand product brands,
corporate logos, websites, marketing materials, trade and service names, and
other branding elements (collectively, the “Brands”) for the Company and each
Subsidiary (the “Brand Management Services”). Hard cost and expenses of such
Brand Management Services such as third-party branding agency fees will be
reimbursed by the Company to the extent such costs are approved by the Company’s
Board of Directors. The Service Company will protect, defend, promote and
utilize such Brands to best promote and grow the Operations of the Company and
its Subsidiaries. Use of the Brands developed by the Service Company and by
Holdco or its Subsidiaries will be governed pursuant to the IP License Agreement
by and between the Service Company and Holdco attached as Exhibit B hereto (the
“License Agreement”).

 

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b. Inventions, Research and Development. In order to elevate product quality and
expand product applicability, streamline operations and logistics, and otherwise
help grow the value of the Company and its Subsidiaries, Service Company will
endeavor to acquire, license or develop soil formulas, soil blending recipes and
techniques, scientific methods and research reports and whitepapers, electronic
or mechanical technology, web-based applications, software and other
intellectual property (collectively, “Inventions”), independently or with third
parties such as universities, government agencies and business partners. The
Company and each Subsidiary, to the extent the Service Company reasonably deems
it commercially applicable and appropriate, shall have the right to utilize such
Inventions in its Operations through the management of the Service Company. Use
of the Inventions developed by the Service Company and by Holdco or its
Subsidiaries will be governed pursuant to the License Agreement. Should the
payment of royalties, fees or other compensation to Service Company be
reasonably agreed by the Parties, such additional fees and other terms and
conditions of use will be provided in a separate license agreement.

 

c. Sales and Marketing. In order to help expand sales and open new distribution
channels for the Company and its Subsidiaries’ products, Service Company will
seek, negotiate, enter into and manage sales and/or marketing agreements with
regional or national buying entities; regional or national logistics and hauling
agreements; enter into sponsorship and endorsement agreements; perform
government outreach; develop advertising and marketing strategies and content;
acquire or partner with independent sales and marketing firms; and other similar
services (the “Sales and Marketing Services”) for the Company and its
Subsidiaries. The hard costs of such Sales and Marketing Services outside the
scope of the Management Fee, including for instance local market advertising
buys and placement, will be reimbursed by the Company to the extent such costs
are approved by the Company’s Board of Directors. Service Company will have the
right to purchase for resale base product or specially blended or manufactured
product (subject to the License Agreement or other use rights contemplated in
Section 5(a) or (b)) from the Company or any of its Subsidiaries at most favored
nations wholesale pricing, in its discretion, to fulfill regional, national or
non-customary customer or channel purchase orders procured by Service Company.

 

6. TERM AND TERMINATION

 

a. Term. This Agreement shall commence as of the Effective Date and continuing
in full force and effect for a period of eight (8) years (the “Term”), unless
terminated as provided herein.

 

b. Termination By Service Company. Service Company shall have the right, but not
the obligation, to terminate this Agreement immediately (after giving effect to
the thirty (30) day grace period below) upon notice to Company of the Company’s
failure to pay the Management Fee in a timely fashion or to agree to reasonable
annual budgets for Management Fees; provided that the Service Company provides
the Company with thirty (30) days written notice of such breach, during which
period of time the Company shall have the opportunity to cure such breach;
provided, further, that if such breach is cured by the Company during such
period of time it shall be as if such breach never occurred and this Agreement
shall continue in full force and effect (such termination event being deemed for
“Good Cause”).

 

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c. Termination By Company.

 

(i) Company shall have the right, but not the obligation, to terminate this
Agreement immediately upon notice to Service Company in the event of the Service
Company’s material breach of a material provision hereof, provided that the
Company provides the Service Company with thirty (30) days written notice of any
such breach, during which period of time the Service Company shall have the
opportunity to cure any such breach (or in the event of a non-monetary breach
which is not curable within such thirty (30) day period the Service Company
shall have the opportunity to commence cure of any such breach). If any such
breach is cured by the Service Company during such period of time (or in the
event of a non-monetary breach which is not curable within such thirty (30) day
period but the Service Company has commenced to cure such breach and does
continue to cure such breach with the exercise of due diligence), it shall be as
if such breach never occurred and this Agreement shall continue in full force
and effect, unaffected by the Company’s notice (such termination event being
deemed for “Cause”).

 

(ii) The Company shall have the right to terminate this Agreement at any time
upon notice to Service Company and payment of the fees set forth in Section
6(e)(i).

 

d. Termination by Either Party. This Agreement may be also terminated as
follows:

 

(i) By mutual written agreement of the parties;

 

(ii) By either party immediately upon the filing of a petition in bankruptcy
with respect to the other party or the insolvency of the other party.

 

e. Termination Obligations.

 

(i) In the event of termination by the Service Company for “Good Cause” or by
the Company without “Cause,” the Company shall pay (a) all Management Fees and
any other costs and expenses accrued and owing to Service Company up through and
including the date of termination, (b) a severance fee equal to one (1) year
Management Fees based on the annual Management Fees set forth in the Budget
agreed by the Parties for the current year, provided such amount is not less
than the initial year Management Fee.

 

(ii) In the event of termination by the Company for “Cause” or by mutual
agreement of the Parties, the Company shall pay all Management Fees and any
other costs and expenses accrued and owing to Service Company pursuant up
through and including the date of termination.

 

f. Survival. Notwithstanding anything in this Agreement to the contrary, (a) the
provisions of Sections 5(a), 5(c), 6(e), 7(b), 7(c), 8 and 9(a)-(m) shall
survive the termination of this Agreement and (b) no termination of this
Agreement, whether pursuant to this Section 6 or otherwise, will affect the
Company’s duty to pay any fees accrued pursuant to the terms of this Agreement
prior to the effective date of that termination. All other provisions of this
Agreement will not survive the expiration or earlier termination of this
Agreement.

 

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7. RECORDS AND RECORD KEEPING

 

a. The Company hereby authorizes and grants to Service Company full and complete
access to all information, instruments and documents relating to Company which
may be reasonably requested by Service Company to perform its obligations
hereunder, and shall disclose and make available to representatives of Service
Company for review and photocopying all relevant books, agreements, papers and
records of Company.

 

b. All reports, documents, records, and other work product developed, generated
or produced by Service Company solely for Company in connection with this
Agreement (collectively, “Work Product”), shall be Company’s sole and exclusive
property. Service Company represents, warrants, and covenants that all Work
Product shall not infringe upon the patent, copyright, trade secret, trademark,
other intellectual property right, or any other proprietary right of any third
party. Service Company shall takes such steps as reasonably requested by Company
as may be required for Company to perfect its interest in any Work Product.

 

c. Company shall at all times during the Term, and at all times thereafter, make
available to Service Company for inspection by its authorized representatives,
during regular business hours, at the principal place of business of Company,
any of Company’ records determined by Service Company to be necessary (i) during
the Term, to perform its services and carry out its responsibilities hereunder
or necessary for the defense of any legal or administrative action or claim
relating to said records, or (ii) following the Term, for the purpose of
preparing any required SEC, tax and other business filings.

 

8. Confidentiality and ConflictING OPERATIONS

 

a. Company and Service Company (each a “Restricted Party”, and collectively the
“Restricted Parties”) acknowledge and agree that they shall not disclose to any
unauthorized person or use for their own account any Confidential Information,
whether or not developed by either Restricted Party, unless and to the extent
that any Confidential Information (1) becomes generally known to and available
for use by the public other than as a result of the Restricted Party’s acts or
omissions to act or (2) is required to be disclosed pursuant to any applicable
law or court order or other regulatory agency such as the Securities and
Exchange Commission. The Restricted Parties shall take reasonable and
appropriate steps to safeguard Confidential Information and to protect it
against disclosure, misuse, espionage, loss and theft.

 

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b. For purposes of this Agreement, “Confidential Information” shall include all
information of any sort (whether merely remembered or embodied in a tangible or
intangible form, and whether or not specifically labeled or identified as
“confidential”) that is related to the Company’s or any of its Subsidiaries’ or
the Service Company’s current or potential Operations and business and is not
generally or publicly known. Confidential Information includes, without specific
limitation, information concerning (i) internal business information, including
methodologies and methods of doing business, strategic, staffing, training,
marketing, promotional, sales and expansion plans and practices, including plans
regarding planned and potential sales, historical and projected financial
information, budgets and business plans, risk management practices, negotiation
strategies and practices, opinion leader lists and databases, customer service
approaches, integration processes, new and existing programs and services, cost,
rate and pricing structures and terms and requirements and costs of providing
service, support and equipment, (ii) trade secrets, technology, know-how,
compilations of data and analyses, techniques, systems, formulae, research,
records, reports, manuals, flow charts, documentation, models, data, data bases,
and production processes, (iii) computer software, including operating systems,
applications and program listings, (iv) devices, discoveries, concepts, ideas,
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, photographs, reports and all similar or related information (whether
or not patentable and whether or not reduced to practice), (v) copyrightable
works, (vi) intellectual property of every kind and description and (vii) all
similar and related information in whatever form.

 

9. GENERAL

 

a. Indemnification.

 

(i) Indemnification by Company. Company hereby agree to indemnify, defend and
hold harmless Service Company, its officers, directors, owners, members,
employees, agents, affiliates and subcontractors, from and against any and all
claims, damages, demands, diminution in value, losses, liabilities, actions,
lawsuits and other proceedings, judgments, fines, assessments, penalties,
awards, costs and expenses (including reasonable attorneys’ fees) related to
third party claims, whether or not covered by insurance, arising from or
relating to any gross negligence, fraud, or willful misconduct relating to the
breach of this Agreement by Company. The provisions of this Section shall
survive termination or expiration of this Agreement. Company shall immediately
notify Service Company of any lawsuits or actions, or any threat thereof, that
are known or become known to Company that might adversely affect any interest of
Company or Service Company whatsoever.

 

(ii) Indemnification by Service Company. Service Company hereby agrees to
indemnify, defend and hold harmless Company, their respective officers,
directors, members, employees and agents from and against any and all claims,
damages, demands, diminution in value, losses, liabilities, actions, lawsuits
and other proceedings, judgments, fines, assessments, penalties, and awards, and
costs and expenses (including reasonable attorneys’ fees), whether or not
covered by insurance, arising from or relating to (a) any material breach of
this Agreement by Service Company, (b) any acts or omissions conducted in bad
faith or gross negligence by Service Company and its employees to the extent
that such is not paid or covered by the proceeds of insurance. The provisions of
this Section shall survive termination or expiration of this Agreement. Service
Company shall immediately notify Company of any lawsuits or actions, or any
threat thereof, that are known or become known to Service Company that might
adversely affect any interest of Service Company or Company whatsoever.

 

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b. Dispute Resolution. In the event that any disagreement, dispute or claim
arises among the Parties hereto with respect to the enforcement or
interpretation of this Agreement or any specific terms and provisions hereof or
with respect to whether an alleged breach or default hereof has or has not
occurred (collectively, a “Dispute”), such Dispute shall be resolved by final,
confidential, and binding arbitration (the “Arbitration”). The Arbitration shall
be settled in Wilmington, Delaware in accordance with the then prevailing rules
of the American Arbitration Association for commercial disputes. The arbitrator
shall have the power only to interpret and apply this Agreement, and shall have
no power to alter or modify any express provisions of this Agreement or to make
any award which by its terms affects any such alteration or modification. The
arbitrators may not award punitive, exemplary, incidental or consequential
damages, and the parties hereby irrevocably waive any claims(s) to such damages
in disputes that are subject to this arbitration provision. The result of the
arbitration will be final and binding on the parties, and judgment upon any
award rendered by the arbitrators may be entered by any court having
jurisdiction therein. The parties hereby agree not to appeal the result of the
arbitration. The procedures set forth herein shall not preclude a party from
seeking injunctive relief or other provisional remedies in aid of arbitration
from a court of appropriate jurisdiction. The Parties to the Dispute shall share
the expenses of the arbitrator and the other costs of arbitration on a pro rata
basis.

 

c. Entire Agreement; Amendment. This Agreement constitutes the entire agreement
among the Parties related to the subject matter hereof and supersedes all prior
agreements, understandings, and letters of intent relating to the subject matter
hereof. This Agreement may be amended or supplemented only by a writing executed
by all Parties.

 

d. Notices. All notices, requests, demands or consents hereunder shall be in
writing and shall be deemed given and received when delivered, if delivered in
person, or four (4) days after being mailed by certified or registered mail,
postage prepaid, return receipt requested, or one (1) day after being sent by
overnight courier such as Federal Express, to and by the parties at the
following addresses, or at such other addresses as the parties may designate by
written notice in the manner set forth herein:

 

  If to Service Company: Q2Earth Inc.     Attn: Christopher Nelson, General
Counsel     420 Royal Palm Way, #100     Palm Beach, FL 33480    
cnelson@q2earth.com         If to Company: Earth Property Holdings LLC     Attn:
Board of Directors     400 Plasters Avenue NE     Atlanta, GA 30324    
kbolin@q2earth.com           with a copy to:     Attn: Tom Paschall

 

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e. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which, when taken together, will
constitute one and the same instrument.

 

f. Governing Law. This Agreement shall be construed and governed in accordance
with the laws of the State of Delaware, without reference to conflict of law
principles.

 

g. Assignment. This Agreement shall not be assignable by any Party hereto
without the express written consent of the other Parties; provided, however,
that this Agreement shall be assignable by Service Company to any of its
wholly-owned affiliates or successors without the consent of Company.

 

h. Waiver. Waiver of any agreement or obligation set forth in this Agreement by
either Party shall not prevent that party from later insisting upon full
performance of such agreement or obligation and no course of dealing, partial
exercise or any delay or failure on the part of any party hereto in exercising
any right, power, privilege, or remedy under this Agreement or any related
agreement or instrument shall impair or restrict any such right, power,
privilege or remedy or be construed as a waiver therefor. No waiver shall be
valid against any party unless made in writing and signed by the party against
whom enforcement of such waiver is sought.

 

i. Binding Effect. Subject to the provisions set forth in this Agreement, this
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and upon their respective successors and assigns.

 

j. Waiver of Rule of Construction. Each Party has had the opportunity to consult
with its own legal counsel in connection with the review, drafting and
negotiation of this Agreement. Accordingly, the rule of construction that any
ambiguity in this Agreement shall be construed against the drafting party shall
not apply.

 

k. Severability. If anyone or more of the provisions of this Agreement is
adjudged to any extent invalid, unenforceable, or contrary to law by a court of
competent jurisdiction, each and all of the remaining provisions of this
Agreement will not be affected thereby and shall be valid and enforceable to the
fullest extent permitted by law.

 

l. Force Majeure. Any Party shall be excused for failures and delays in
performance of its respective obligations under this Agreement due to any cause
beyond the control and without the fault of such party, including without
limitation, any act of God, war, terrorism, bio-terrorism, riot or insurrection,
law or regulation, strike, flood, earthquake, water shortage, fire, explosion or
inability due to any of the aforementioned causes to obtain necessary labor,
materials or facilities. This provision shall not release such Party from using
its best efforts to avoid or remove such cause and such Party shall continue
performance hereunder with the utmost dispatch whenever such causes are removed.
Upon claiming any such excuse or delay for non-performance, such Party shall
give prompt written notice thereof to the other party, provided that failure to
give such notice shall not in any way limit the operation of this provision.

 

m. Authorization for Agreement. The execution and performance of this Agreement
by Company and Service Company have been duly authorized by all necessary laws,
resolutions, and corporate or partnership action, and this Agreement constitutes
the valid and enforceable obligations of Company and Service Company in
accordance with its terms.

 

n. Duty to Cooperate. The Parties acknowledge that the Parties’ mutual
cooperation is critical to the ability of Service Company and Company to perform
successfully and efficiently its duties hereunder. Accordingly, each party
agrees to cooperate fully with the other in formulating and implementing goals
and objectives which are in Company’ best interests.

 

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IN WITNESS WHEREOF, the Parties agree to the foregoing terms of agreement
through the execution below by their respective, duly authorized representatives
as of the Effective Date.

 

COMPANY: Earth Property Holdings LLC         By: /s/ C. Thomas Paschall   Name:
C. Thomas Paschall   Title: Authorized Officer       SERVICE COMPANY: Q2Earth
Inc.         By: /s/ Kevin Bolin   Name: Kevin Bolin   Title: Chairman & CEO

 

[Signature Page to Services Agreement]

 

 

 

EXHIBIT A

 

SUBSIDIARIES

 

1. George B. Wittmer Associates, Inc.

 

[Exhibit A to Services Agreement]