AGREEMENT FOR THE PROVISION OF SERVICES
THIS AGREEMENT FOR THE PROVISION OF SERVICES
(this "Agreement") is made as of the 18th day of February, 2005
BY AND BETWEEN:
NOVA CHEMICALS INC.,
a corporation organized under the laws of Delaware
(hereinafter referred to as "Provider")
and
LRM INDUSTRIES, LLC,
a limited liability company incorporated in Delaware,
(hereinafter referred to as "User").
BACKGROUND:
Pursuant to the LIMITED LIABILITY COMPANY AGREEMENT of LRM INDUSTRIES LLC
and NOVA CHEMICALS INC. (the "LLC Agreement"), Envirokare Composite Corp and
NOVA Chemicals Inc. have entered into a joint venture business to commercialize
the TPF Technologytm. In connection therewith, the parties desire to enter into
this Agreement, pursuant to which Provider will provide certain services more
fully described herein to User.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. Capitalized terms used in this Agreement and not
specifically defined in context shall have the respective meanings ascribed to
them in this Section, unless the context clearly requires otherwise:
"Applicable Laws" means (i) all federal, provincial or local laws,
regulations and rules (to the extent having the force of law) of any
Governmental Body in the country in which the Services are provided, and (ii)
all orders, rulings, judgments and decrees of any Governmental Body in the
country in which the Services are provided, to the extent binding on either
party to this Agreement or the provision of Services pursuant to this Agreement.
"Business Day" means a day (other than a Saturday or Sunday) on which the
banking institutions in the jurisdiction in which the Services are being
provided are open for business.
"Default Rate" means the rate of interest per annum publicly announced from
time-to-time by _______________ as its [prime] rate in effect at its
_______________ office, plus ____ percent (__%).
"Effective Date" means the date on which the LLC Agreement is executed.
"Governmental Body" means any government or governmental or regulatory body
thereof, or political subdivision thereof, or any agency or instrumentality
thereof, or any court or arbitrator, which has, in each case, jurisdiction over
the matter in question.
"Services" means all services and resources to be provided, and tasks to be
performed, by Provider pursuant to this Agreement, as more fully described in
Article II hereof.
1.2 Other Defined Terms. The following listing identifies additional
defined terms used in this Agreement and the Section of this Agreement in which
they are defined:
"Agreement" - Preamble
"Arbitration Notice" - 6.3
"Dispute Notice" - Section 6.2
"Provider" - Preamble
"Term" - Section 4.1
"User" - Preamble
1.3 Schedules. The following Schedules are annexed hereto and form part of
this Agreement:
[Insert as applicable.]
1.4 Interpretation.
(a) Unless the context of this Agreement clearly requires otherwise, (i)
references to the plural include the singular, the singular the plural, the part
the whole, (ii) references to any gender include all genders, (iii) "including"
has the inclusive meaning frequently identified with the phrase "but not limited
to" and (iv) references to "hereunder" or "herein" relate to this Agreement.
(b) Although this Agreement may be translated into different languages, the
governing version shall be the English language version.
(c) This Agreement shall be construed without regard to any presumption or
rule requiring construction or interpretation against the party drafting or
causing any instrument to be drafted.
(d) References to this "Agreement" shall be construed to include a
reference to this Agreement as amended, modified or novated from time-to-time
and shall include a reference to any document which amends, waives, is
supplemental to or novates the terms of this Agreement. Without limiting the
generality of the foregoing, references to this "Agreement" shall include the
Schedules hereto, as the same may be amended or modified from time-to-time.
(e) The table of contents and headings in this Agreement are inserted for
convenience only and shall not be taken into consideration in the interpretation
or construction of this Agreement. Section, subsection, clause and Schedule
references are to this Agreement, unless otherwise specified.
(f) References to a "day" shall mean a period of 24 hours running from
midnight to midnight. References to periods of a number of days shall mean
calendar days, unless the applicable provision specifies Business Days.
1.5 Currency. All references to amounts of money herein, unless otherwise
specified, shall be to United States Currency.
ARTICLE II
PROVISION OF SERVICES
2.1 Services to be Provided. As provided in the LLC Agreement, Provider has
agreed to provide one million dollars ($1,000,000) of Services to the User,
pursuant to the following terms.
(a) Subject to reasonable notice and availability, Provider will provide
certain personnel services to the User who will be classified, at Provider's
sole discretion, but with notice to User as to a particular designation, as
"Senior Professionals." Such Senior Professionals will include, but not be
limited to Engineers, Lawyers, Managers and other senior level employees of
Provider. Provider will provide such Senior Professionals to the User at a fixed
rate of one hundred dollars ($100) per hour, up to a daily maximum of one
thousand dollars ($1,000) per day.
(b) Subject to reasonable notice and availability, Provider will provide
certain personnel services to the User who will be classified, at Provider's
sole discretion, but with notice to User as to a particular designation, as
"Professionals." Such Professionals will include, but not be limited to
Accountants, Technicians and other non-senior level employees of Provider.
Provider will provide such Professionals to the User at a fixed rate of seventy
dollars ($70) per hour, up to a daily maximum of seven hundred dollars ($700)
per day.
(c) All expenses incurred by Provider in providing the Services will be
reimbursed by User and will count toward the one million dollar ($1,000,000)
maximum set forth in this Section 2.1(a).
(d) Provider will use its best efforts to make the requested resources for
the provision of Services available to User on a timely basis. If the requested
resource cannot be made available to User within the timeframe requested,
Provider will use its best efforts to provide a similar and equivalent resource,
based on the need of the User (the "Substitute Resource"). Such Substitute
Resource may be either another employee of Provider, or, at Provider's sole
discretion, a third party with the same capabilities as those of the requested
resource. Any third party that is provided by Provider will be billed in the
same rate as set forth in this Section 2.1.
(e) In order to assist Provider in predicting the availability of
resources, User will provide Provider with a three month rolling estimate of its
forecasted needs for Services required hereunder. Provider will inform User of
the availability of resources as soon as reasonably practical following User's
request.
2.2 Standards and Levels of Services.
(a) The Provider shall perform the Services in accordance with all
Applicable Laws. To the extent that the Services are provided on the premises of
User, the Provider shall comply with User's safety standards.
(b) The standards and levels of service employed in the provision of the
Services shall be as determined from time-to-time by the Provider in accordance
with the Provider's then-existing requirements for comparable services on behalf
of itself and its divisions and subsidiaries
2.3 User Obligations. [COMMENT: In general, the User will be obligated to
cooperate, respond promptly, and provide access to facilities and people as
needed. Other requirements will be appropriate for particular services.]
2.4 Circumstances Excusing Performance. The Provider shall not be liable
for delay or interruption in the performance of the Services, or for inability
to perform the Services, due to acts of God, flood, fire, lightning, earthquake,
epidemic, quarantine restriction, war, sabotage, acts of a public enemy, acts of
terrorism, insurrection, riot, civil disturbance, accidents or disruptions such
as fire, explosion or major equipment breakdown, failures or delay beyond the
Provider's reasonable control in securing necessary materials, equipment,
services or facilities, strikes, slowdowns, jurisdictional disputes or other
labor difficulties, restraint by court order or public authority, any act, delay
or failure to act by any Governmental Body, including delay or failure to obtain
authorizations or approvals from any Governmental Body, any delay caused by User
or any party acting under the direction of User or on its behalf, or any other
cause beyond the Provider's reasonable control; provided, however, that the
Provider shall use diligent efforts to avoid, or, if unavoidable, minimize or
work around, the effects of any such event upon the performance of the Services
pursuant to this Agreement. Upon receipt of a notice from the Provider
requesting appropriate action, the User and the Provider will negotiate mutually
acceptable changes to this Agreement or any other affected agreement or
instrument which effect equitable adjustments in the fees and any other affected
provision of this Agreement, or any other affected agreement or instrument,
resulting from the occurrence of any event of the type referred to in this
Section.
2.5 Expansion; Additional Services.
(a) If, during the Term of this Agreement, the User desires that the
Provider perform additional work or services for User beyond the Services or
beyond the level of Services required by this Agreement, the User shall deliver
a written request or proposal for the same. The Provider shall exert its best
efforts to evaluate such written request within a reasonable period of time
after its receipt thereof. The Provider shall not unreasonably refuse the
changes requested by the User; provided, however, that, if such changes increase
the cost to the Provider of providing the Services, the Provider shall not be
obligated to implement any requested additions or changes unless and until the
parties shall have negotiated an equitable adjustment in the fees included in
this Agreement.
ARTICLE III
TAXES; PAYMENT
3.1 Taxes. The User shall be responsible for the payment of all taxes,
including, but not limited to, all levels of sales taxes, goods and services
taxes and value added taxes, to the extent applicable in respect of the
provision of Services by the Provider pursuant to this Agreement; provided,
however, that the User shall have no obligation for any withholding taxes on the
wages paid by the Provider to its employees or for any taxes based on the
Provider's income. The parties shall cooperate with each other to minimize
applicable taxes and duties, to the extent permissible under Applicable Law, and
each shall provide the other with any certificates or documents reasonably
requested by the other for such purpose.
3.3 Payment Terms.
(a) The Provider shall submit an accounting to the User each month for
Services performed during the immediately preceding month. Each such accounting
shall be accompanied by all appropriate supporting documentation.
(b) In no event shall the User be entitled to set-off or reduce any
payments due and owing to the Provider pursuant to this Agreement by any amount
which the User claims are owed to it by the Provider pursuant to this Agreement
or any other agreement.
ARTICLE IV
TERM AND TERMINATION
4.1 Term. The term of this Agreement (including any renewal period, the
"Term") shall commence on the Effective Date and, subject to Section 4.2, shall
continue in full force and effect until the date that is two (2) years after the
Effective Date.
4.2 Termination. Section 4.1 notwithstanding, this Agreement shall be
terminated:
(a) by either party and with immediate effect if, following a material
breach of this Agreement by either party, the non-breaching party sends initial
written notice of such material breach and the breaching party fails to cure
such material breach within thirty (30) days of the date of such initial notice;
provided, however, that if a cure cannot reasonably be accomplished within a
thirty (30) day period, this Agreement may not be terminated by reason of such
material breach, so long as the breaching party commences a cure within the
thirty (30) day cure period and diligently pursues such cure until completion,
and such completion occurs within ninety (90) days of the initial notice of
material breach. The foregoing notwithstanding, the Provider may terminate this
Agreement by written notice having immediate effect in the event that the User
fails to pay in full the amount of any invoice that has been outstanding for
more than ninety (90) days after the invoice date if the Provider sends initial
written notice to the User of such failure and the User fails to cure such
failure within ten (10) days of the date of such initial notice;
(b) upon the exhaustion of the one million dollar ($1,000,000) maximum
Services set forth in Section 2.1 herein; or
(c) by both parties in writing on mutually agreed terms.
ARTICLE V
LIMIT OF LIABILITY; INDEMNIFICATION
5.1 Disclaimer. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE
PROVIDER MAKES NO OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WITH
RESPECT TO THE SERVICES TO BE PROVIDED PURSUANT TO THIS AGREEMENT, INCLUDING,
WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
5.2 Limitation of Damages and Liability.
(a) THE PROVIDER SHALL NOT BE LIABLE TO THE USER IN CONNECTION WITH THIS
AGREEMENT OR THE PROVISION OF SERVICES HEREUNDER:
(i) FOR ANY DAMAGES ARISING OUT OF HARDWARE OR SOFTWARE DEFECT, ERROR
OR MALFUNCTION;
(ii) FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY
DAMAGES ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT OR THE PROVISION
OF SERVICES HEREUNDER, WHETHER SUCH CLAIM IS BASED ON WARRANTY, CONTRACT,
TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR OTHERWISE, EVEN IF AN
AUTHORIZED REPRESENTATIVE OF THE PROVIDER IS ADVISED OF THE POSSIBILITY OR
LIKELIHOOD OF THE SAME;
(iii) FOR LOST OR ANTICIPATED REVENUES OR PROFITS ARISING FROM ANY
CLAIM RELATING TO THIS AGREEMENT OR THE PROVISION OF, OR FAILURE TO
PROVIDE, SERVICES HEREUNDER, EVEN IF AN AUTHORIZED REPRESENTATIVE OF THE
PROVIDER IS ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF THE SAME; or
(iv) FOR ANY DIRECT DAMAGES, UNLESS SUCH DIRECT DAMAGES ARISE FROM A
BREACH OF THIS AGREEMENT OR THE NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
PROVIDER.
(b) THE PROVIDER SHALL HAVE NO LIABILITY WHATSOEVER TO ANY THIRD PARTY IN
CONNECTION WITH THIS AGREEMENT OR THE PROVISION OF, OR FAILURE TO PROVIDE,
SERVICES HEREUNDER.
5.3 Indemnification.
(a) The Provider shall indemnify, defend and hold harmless the User and any
of the User's directors, equity constituents, officers, employees, agents,
consultants, representatives, successors or permitted assigns from and against
any claims, suits, actions, legal or administrative proceedings, demands,
damages, liabilities, reasonable attorneys' fees, required costs, required
expenses and losses which are asserted by third parties against the User and
which result from a material breach of this Agreement by the Provider.
(b) The User shall indemnify, defend and hold harmless the Provider and any
of the Provider's directors, equity constituents, officers, employees, agents,
consultants, representatives, successors or permitted assigns from and against
any claims, suits, actions, legal or administrative proceedings, demands,
damages, liabilities, reasonable attorneys' fees, required costs, required
expenses and losses which are asserted by third parties against the Provider and
which result from a material breach of this Agreement by the User.
(c) The party seeking indemnification shall give prompt written notice to
the other of any claim for which indemnification may be claimed hereunder, and
the parties shall then cooperate as reasonably required to defend such claim;
provided, however, that the right of the indemnitee to indemnification hereunder
shall not be affected by any failure or delay by the indemnitee to give such
notice, except to the extent that the rights and remedies of the indemnitor
shall have been materially prejudiced as a result of such failure or delay.
ARTICLE VI
DISPUTE RESOLUTION
6.1 General. Unless otherwise agreed by the parties, any matter in dispute
under or relating to this Agreement shall be finally resolved by binding
arbitration, unless resolved as provided in Section 6.2 hereof. The provisions
of this Article shall govern any arbitration under this Agreement.
6.2 Informal Dispute Resolution. In the event that any dispute, claim or
disagreement arises under or relating to this Agreement or the breach hereof,
the parties shall first use their best efforts to attempt to resolve the dispute
informally pursuant to this Section 6.2. In the event of a dispute, either party
shall notify the other in writing of its intention to attempt to resolve the
dispute pursuant to this Section 6.2 (a "Dispute Notice"). Within five (5)
Business Days after the recipient's receiving such Dispute Notice, the parties
shall each appoint a representative knowledgeable on the topic at issue, and
within that same five (5) Business Day period, each party shall notify the other
of its appointment of its representative. Such representatives shall meet as
promptly as practicable after their appointment in an attempt to reach a just
and equitable solution satisfactory to both parties, working in good faith and
recognizing the parties' mutual interests. Such meeting or meetings may occur in
person or by telephone. In the event that the designated representatives are
unable to resolve the dispute within ten (10) Business Days after the
recipient's receipt of the Dispute Notice, then the parties shall refer the
matter to more senior officers who shall then meet as promptly as practicable
after their appointment in an attempt to reach a just and equitable solution
satisfactory to both parties, working in good faith and recognizing the parties'
mutual interests. In the case of the Provider, such senior officer shall be the
General Counsel or his designee and in the case of the User, such senior officer
shall be the President. In the event that such senior officers are unable to
resolve the dispute within twenty (20) Business Days after the recipient's
receipt of the Dispute Notice, or if either party fails to appoint a
representative, or if such designated representatives or senior officers, as the
case may be, fail to meet with each other, in any event during the time periods
specified in this Section, then either party may refer the matter to binding
arbitration in accordance with this Article.
6.3 Arbitration. In the event that the parties are unable to resolve their
dispute pursuant to Section 6.2, then, upon written notice by either party to
the other (an "Arbitration Notice") the dispute shall be submitted to a sole
arbitrator who is independent and impartial, for binding arbitration in New
York, in accordance with the rules of the American Arbitration Association and
its International Arbitration Rules. The parties agree that they will abide by
and perform any judgment rendered by the arbitrator, and the judgment of the
arbitrator shall be final and binding on the parties. Judgment upon the award of
the arbitrator may be entered and enforced by any court having jurisdiction. No
litigation or other proceeding may ever be instituted at any time in any court
or before any administrative agency or body for the purpose of adjudicating,
interpreting or enforcing any of the rights or obligations of the parties hereto
or the rights or obligations relating to the subject matter hereof, whether or
not covered by the express terms of this Agreement, or for the purpose of
adjudicating a breach or determination of the validity of this Agreement, or for
the purpose of appealing any decision of an arbitrator, except a proceeding
instituted: (a) for the purpose of having the judgment of an arbitrator entered
and enforced; or (b) to seek an injunction or restraining order (but not damages
in connection therewith) in circumstances where such relief is available. The
fees and expenses of the arbitrator shall be allocated between the parties as
determined by the arbitrator. No punitive, indirect, special, exemplary,
incidental or consequential damages may ever be awarded by the arbitrator or any
court, and each of the parties hereby waives any and all rights to make, claim
or recover any such damages.
ARTICLE VII
MISCELLANEOUS
7.1 Notices.
(a) Manner of Giving Notice; Effectiveness. All notices, consents or other
communications required or permitted to be given under this Agreement shall be
in writing, in the English language and shall be personally delivered or
delivered by a recognized overnight delivery service. Any such notice, consent
or other communication shall be deemed to have been duly given when delivered
personally or one Business Day after being sent by a recognized overnight
delivery service, delivery charges prepaid. Notices, consents and other
communications may also be given by facsimile or e-mail, and in such event,
shall be effective on the date transmitted if confirmed within 24 hours
thereafter by a signed original sent in one of the manners provided in the first
sentence of this Section.
(b) Notice Addresses.
Notices to Provider shall be directed as follows:
Notices to User shall be directed as follows:
(c) Change of Notice Address. Either party may change its address for
notice, and any address to which copies must be sent, by giving notice of the
new address to the other party in accordance with this Section; provided that
any such change of address notice shall not be effective unless and until it is
received.
7.2 Entire Agreement. This Agreement states the entire understanding
between the parties with respect to the subject matter hereof and supersedes all
prior oral and written communications and agreements, and all contemporaneous
oral communications and agreements, with respect to the subject matter hereof.
No amendment or modification of this Agreement shall be effective unless it is
in writing and signed by the party against whom enforcement is sought.
7.3 Assignment. This Agreement shall bind, benefit and be enforceable by
and against the parties and their respective successors and consented-to
assigns. Neither party shall in any manner assign any of its rights or
obligations under this Agreement without the prior, express, written consent of
the other party.
7.4 Waivers. Except as otherwise expressly provided herein, no waiver with
respect to this Agreement shall be enforceable unless it is in writing and
signed by the party against whom enforcement is sought. Except as otherwise
expressly provided herein, no failure to exercise, delay in exercising, or
single or partial exercise of any right, power or remedy by either party, and no
course of dealing between the parties, shall constitute a waiver of, or shall
preclude any other or further exercise of, any right, power or remedy.
7.5 Severability. If any provision of this Agreement is construed to be
invalid, illegal or unenforceable, then the remaining provisions hereof shall
not be affected thereby and shall be enforceable without regard thereto.
7.6 Counterparts. This Agreement may be executed in any number of
counterparts (delivery of which may occur via facsimile or e-mail in .pdf
format), each of which when so executed and delivered shall be an original
hereof, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one counterpart hereof.
7.7 Controlling Law. This Agreement is made under, and shall be construed
and enforced in accordance with, the laws of the State of Delaware, without
giving effect to principles of conflicts of law and without regard to any choice
of law or choice of forum provision, rule or principle. The parties to this
Agreement irrevocably agree that the courts of New York shall have exclusive
jurisdiction over any claim or matter arising under or in connection with this
Agreement and that accordingly any proceedings in respect of any such claim or
matter may be brought in such court.
7.8 No Third-Party Beneficiaries. No provision of this Agreement is
intended to or shall be construed to grant or confer any right to enforce this
Agreement, or any remedy for breach of this Agreement, upon any person other
than the parties hereto, including any customer, supplier, employee, contractor,
agent or representative of User.
7.9 Confidentiality.
(a) The parties shall treat as strictly confidential and shall not disclose
all information received or obtained as a result of entering into or performing
this Agreement, to the extent such information relates to:
(i) the provisions of this Agreement;
(ii) the negotiations relating to this Agreement;
(iii) the performance of this Agreement;
(iv) the other party or any aspect of its business or operations; or
(v) the subject matter of this Agreement.
(b) Either party may disclose information which would otherwise be
confidential, if and to the extent:
(i) required by Applicable Laws;
(ii) required by any securities exchange or agency to which either party is
subject, wherever situated, whether or not the requirement has the force of law;
(iii) disclosed on a strictly confidential basis to the professional
advisors or auditors of the party or to any actual or potential lenders to that
party;
(iv) that the information has come into the public domain through no fault
of that party; or
(v) that the other party has given prior written approval to such
disclosure.
(c) This Section shall survive the termination of this Agreement for a
period of five (5) years after such termination.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
PROVIDER:
By: /s/ Jack Mustoe
Name: Jack Mustoe
Title: Vice President
By: /s/ Dale Spiess
Name: Dale Spiess
Title: Sr. Vice President
USER:
By: /s/ John Verbicky
Name: John Verbicky
Title: CEO