SUPPLY OF SERVICES AGREEMENT
THIS SUPPLY OF SERVICES
AGREEMENT (the “Agreement”) is entered into
with effect from 19th January
2010 the “Effective Date”,
between Imperial Oil and Gas, Inc. a Delaware Corporation having an
address at Xxxxx 0000, 000-0xx Xxx XX,
Xxxxxxx, XX X0X 0X0 (the “Company”), and GNP Resources
Ltd. a body corporate, having an office at the City of Calgary, in the Province
of Alberta (“GNP”), and Xxxx XxXxxxxxx (“the Contractor”), whereby GNP agrees to
provide certain services (“the Services”) to the Company. GNP agrees
that the Services will be provided by the Contractor. The Parties to
this Agreement are the Company, GNP and the Contractor.
The
Contractor agrees to provide such services and to be bound by this Agreement as
if he had entered into it in his own right as a self employed contractor in the
event that GNP is no longer able to procure or does not procure the Services for
whatever reason and, likewise, the Company agrees that the Agreement shall
continue in full force as if it were a contract between the Contractor and the
Company in the event of the dissolution of GNP. In such circumstances
references to GNP herein shall be construed as references to the Contractor as a
self employed contractor.
NOW, THEREFORE, in
consideration of the mutual covenants, representations, warranties and
agreements contained herein, and for other valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I: Definitions and Interpretations
1.1 Definitions
For
purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires, the following terms shall have the following
respective meanings:
“Base Fee” shall have the
meaning specified in Section 3.1.
“Board of Directors” shall
mean the Board of Directors of the Company.
“Cause” shall have the
meaning specified in Section 4.3.
“Company” will also include
its subsidiaries, parents and affiliates where it is reasonably logical the use
of the word would include such other entities, and include any successor to its
business and/or substantially all its assets which executes and delivers the
Agreement as provided for in Section 7.4 or which otherwise becomes bound by all
terms and provisions of this Agreement by operation of law.
“Confidential Information”
shall have the meaning specified in Section 5.1(a).
“Dispute” shall have the
meaning specified in Article VI.
“Expiration Date” shall have
the meaning specified in Section 2.2.
“Notice of Termination” shall
mean a notice purporting to terminate this Agreement in accordance with Section
4.1, 4.2 or 4.3.
“Person” shall mean and
include an individual, a Partnership, a joint venture, a corporation, a trust
and an unincorporated organization.
“Incentive Fee” shall have
the meaning specified in Section 3.2.
“Term” shall have the meaning
specified in Section 2.2.
“Termination Date” shall mean
the termination date specified in a Notice of Termination delivered in
accordance with this Agreement.
1.2 Interpretations
(a) In
this Agreement, unless a clear contrary intention appears, (i) the words
“herein,” “hereof” and “hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section or other
subdivision, (ii) reference to any Article or Section, means such Article or
Section hereof, (iii) the words “including” (and with correlative meaning
“include”) means including, without limiting the generality of any description
preceding such term, and (iv) where any provision of this Agreement refers to
action to be taken by either party, or which such party is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such party.
(b) For
the avoidance of doubt this Agreement refers to the provision of certain
services to be provided by the Contractor in his capacity as a Contractor of
GNP.
(c) The
Article and Section headings herein are for convenience only and shall not
affect the construction hereof.
(d) For
the avoidance of doubt it is specifically agreed between the Parties that
nothing in this agreement shall be construed as inferring any employment rights
and obligations between the Company and/or any of its subsidiaries and
associates and the Contractor or GNP and, as a result, the Company shall have no
obligation or right to make any withholding tax deductions, unless required to
do so by law. GNP warrants and represents to The Company that it
shall be solely responsible for any income, social security or other taxation
liabilities that are payable on the compensation referred to
herein.
ARTICLE
II: Services, Compensation etc.
2.1 Service
Arrangement
The
Company agrees to contract with GNP to provide the Services of the Contractor as
further described herein, GNP agrees that the Contractor will provide such
services and the Contractor agrees to provide such services.
2.2 Term of
Agreement
Unless
sooner terminated pursuant to Article IV, the term of this Agreement (the “Term”) shall end on
December 31, 2010, subject to extension as herein provided. The
Term will be automatically extended by an additional one 1 month, unless one
party gives written notice to the other at least one 1 month before the then
effective Expiration Date indicating that the party does not extend Term of the
Agreement. If the Term is extended, then the Expiration Date will be
automatically extended by a corresponding one 1 month. The right not
to extend the Term and corresponding Expiration Date is separate from the right
to give a Notice of Termination herein.
2.3 Services
(a) During
the Term of the Agreement, the Contractor shall provide such professional and
related services as are required to maintain and develop the Company's oil and
gas exploration and development interests or as are reasonably required to
assist the Company in any other way.
(b) During
the Term of the Agreement, the Contractor shall (i) report to the Board of
Directors and (ii) observe and comply with all lawful policies, directions and
instructions of the Board of Directors and the Company that are consistent with
the provisions of this paragraph 2.3.
(c) During
the Term of the Agreement, the Contractor shall devote sufficient of his
business time, attention, skill and efforts to the faithful and efficient
performance of the provision of the Services as is reasonably
required.
(d) The
Contractor shall maintain outline records of time spent in accordance with this
Agreement.
(e) The
Company acknowledges that GNP has other clients and that the Contractor has
other commitments which he needs to attend to. GNP and the Contractor
agree to not accept any other client that may create a conflict with services to
be provided to the Company.
(f) During
the currency of this Agreement, the Contractor and GNP shall not knowingly
prejudice, in any material respect, the reputation of the Company in the fields
of business in which it is engaged or with the investment community or the
public at large.
(g) If
elected or appointed thereto, and only for the duration of such elected term or
appointment, the Contractor shall, as an integral part of and to facilitate the
provision of the Services referred to herein, serve as a director of the Company
and any of its subsidiaries, provided that the Contractor is indemnified for
serving in any and all such capacities on a basis consistent with that provided
by the Company to other directors and executive officers of the Company or
similarly situated executive officers of any such subsidiaries.
(h) GNP
and the Contractor represent that there are no restrictions imposed upon it or
them by any covenants or agreements arising out of any prior engagement which
materially affect its or their ability to provide the services set forth in this
Agreement.
ARTICLE
III: Fees and Expenses
3.1 Base Fee
(a) For
services rendered by GNP under this Agreement, the Company shall pay to GNP a
base monthly fee of up to $5,000 USD to be paid at the end of each month in US
dollars, other than if this base fee is varied downward or deferred by the
decision of the board of the Company and to which decision GNP shall not object,
to a bank account nominated by GNP and maintained in its name. The
amount is exclusive of any GST at 5% that is or may be payable.
(b) The
Contractor shall be granted such Gross Overriding Royalty (“GOR”) payments under
the terms of the Royalty Agreement in Schedule 2 to this agreement.
3.2 Incentive
Fee
During
the Term, the Parties may agree from time to time to modify this Agreement so as
to engage GNP to provide services over and above those set out in this Agreement
and/or to provide incentive to GNP to add exceptional value.
3.3 Expense
Reimbursement
The
Company shall reimburse GNP for all reasonable travel and other business
expenses incurred by the Contractor in the performance of the
Services. Such expenses shall be submitted monthly in arrears and GNP
shall retain and make available for inspection all supporting vouchers for the
duration of the Agreement. Expense reimbursements shall be made in
line with the principles set out in the Companies policies that apply to its
employees as modified by agreement from time to time made in writing between the
Parties.
ARTICLE
IV: Termination
4.1 Termination by
GNP
GNP may,
at any time prior to the Expiration Date, terminate the provision of the
Agreement for any reason by delivering a Notice of Termination to the Board of
Directors. The Notice of Termination shall be effective not less than
30 days after the date of the notice and state the effective Termination Date
and if none is specified then the Termination Date will be the 30th day
after the date of the Notice of Termination. The Termination Date
under this provision may be beyond the Expiration Date.
4.2 Termination by the
Company
The Board
of Directors may, at any time after the date of this Agreement and prior to the
Expiration Date, terminate the Agreement for any reason by delivering a Notice
of Termination to GNP and the Contractor. The Notice of Termination
by the Company shall be effective not less than 30 days after the date of the
notice and state the effective Termination Date and if none is specified then
the Termination Date will be the 30th day
after the date of the Notice of Termination. The Termination Date
under this provision may be beyond the Expiration Date.
4.3 Termination for
Cause
The
Company may terminate the Agreement for “Cause” upon the giving of a Notice of
Termination to GNP and the Contractor, subject to the terms of this sub-part,
which shall be effective immediately. The Notice of Termination for
Cause shall state the basis for the notice. The Company shall have
“Cause” to terminate the Agreement during the Term of this Agreement, if the
Contractor's actions result in:
(a) Failure
to materially provide the Services to a reasonable standard after written notice
and reasonable opportunity for cure,
(b) Conviction
of the Contractor of a felony or any crime involving embezzlement or theft
during the Term or any embezzlement or theft from the Company whether or not the
subject of a conviction; or
(c) Serious
willful misconduct by the Contractor, including fraud willful dishonesty or the
substantial breach of any fiduciary duty owed to the Company.
4.4 Resignations
In the
event of a termination of this Agreement the Contractor shall immediately resign
any office or directorship in the Company or any of its Subsidiaries of
Associates which he holds by virtue of this Agreement or otherwise this contract
is to be replaced with a similar contract under circumstances where at its sole
discretion the Board of Directors shall determine that the Contractor should
continue to serve in any office or directorship.
4.5 Payment in the event of
Termination.
(a) After
the termination of the Agreement for any reason by the Company, including the
inability of GNP to provide services due to disability of the Contractor, but
other than for Cause, the Company shall pay to GNP the aggregate of any unpaid
Base Fee earned by that Contractor hereunder prior to the Termination Date and
any unreimbursed expenses.
(b) Upon
termination of the Agreement by GNP (and for this purpose the death of the
Contractor shall be regarded as Termination by GNP with Notice given from the
date of the Contractor's death) the Company shall pay GNP any unpaid Base Fee
earned hereunder prior to the Termination Date and any unreimbursed
expenses.
ARTICLE
V: Confidential Information and Non-Competition
5.1 Confidential
Information
(a) GNP
and the Contractor recognize that the services to be performed hereunder are
special, unique, and extraordinary and that, by reason of the Agreement, the
Contractor and GNP may acquire Confidential Information concerning the operation
of the Company, the use or disclosure of which would cause the Company
substantial loss and damages which could not be readily calculated and for which
no remedy at law would be adequate. Accordingly, the Contractor and
GNP agree with the Company that they will not (directly or indirectly) at any
time, whether during or after the Term, (i) knowingly use for an improper
personal benefit any Confidential Information that the Contractor may learn or
has learned by reason of the Agreement with the Company or (ii) disclose any
such Confidential Information to any Person except (A) in the performance of
GNP's obligations to the Company hereunder, (B) as required by applicable law,
(C) in connection with the enforcement of GNP's rights under this Agreement, (D)
in connection with any disagreement, dispute or litigation (pending or
threatened) between the Contractor or GNP and the Company or (E) with the prior
written consent of the Board of Directors. As used herein, “Confidential Information” includes
information with respect to the operation and performance of the Company, its
investments, portfolio companies, products, services, facilities, product
methods, research and development, trade secrets and other intellectual
property, systems, patents and patent applications, procedures, manuals,
confidential reports, product price lists, customer lists, financial
information, business plans, prospects or opportunities (including, as
applicable, all of the foregoing information regarding the Company's past,
current and prospective portfolio companies); provided, however, that such term,
shall not include any information that (x) is or becomes generally known or
available other than as a result of a disclosure by the Contractor or (y) is or
becomes known or available to the Contractor on a nonconfidential basis from a
source (other than the Company) that, to the Contractor's knowledge, is not
prohibited from disclosing such information to the Contractor by a legal,
contractual, fiduciary or other obligation to the Company.
(b) The
Contractor and GNP each confirm that all Confidential Information is the
exclusive property of the Company. All business records, papers and
documents kept or made by the Contractor or GNP during the Term relating to the
business of the Company shall be and remain the property of the Company at all
times. Upon the request of the Company at any time, the Contractor
and GNP shall promptly deliver to the Company, and shall retain no copies of,
any written materials, records and documents made or coming into the
Contractor's or GNP's possession during the Term concerning the business or
affairs of the Company other than personal materials, records and documents
(including notes and correspondence) of the Contractor not containing
proprietary information relating to such business or
affairs. Notwithstanding the foregoing, the Contractor and GNP shall
be permitted to retain copies of, or have access to, all such materials, records
and documents relating to any disagreement, dispute or litigation (pending or
threatened) between them and the Company.
ARTICLE
VI: Dispute Resolution
6.1 Disputes
(a) The
Parties will attempt to resolve any dispute arising under this Agreement through
consultation and negotiation in good faith. If those attempts fail,
the parties will then attempt to resolve that dispute through mediation, with
costs of the mediation being shared equally by the parties. However,
any Party to the dispute may terminate the mediation at any time upon reasonable
notice to the other Parties and, if it chooses, resort to judicial proceedings
to resolve the dispute.
ARTICLE
VII: Miscellaneous
7.1 Assignability
The
obligations of GNP hereunder are personal to the Contractor and may not be
assigned or delegated by GNP or transferred in any manner whatsoever, nor are
such obligations subject to involuntary alienation, assignment or
transfer. The Company shall have the right to assign this Agreement
and to delegate all rights, duties and obligations hereunder as provided in
Section 4, provided always that it will continue to be liable for the
obligations of the assignee in the event of default by the
assignee.
7.2 Notices
All
notices and all other communications provided for in the Agreement shall be in
writing and addressed (i) if to the Company, addressed at its principal office
address or such other address as it may have designated by written notice to the
Executive for purposes hereof, directed to the attention of the CEO with a copy
to the Secretary of the Company and (ii) if to GNP or its Contractors, at its
principal office location written above for the attention of its Managing
Partner, or to such other address as may have designated to the Company in
writing for purposes hereof. Each such notice or other communication
shall be deemed to have been duly given when delivered to the receiving party by
recognized international courier company such as Federal Express to the address
referred to above where such delivery requires signature as proof of delivery by
the receiving party.
7.3 Severability
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
7.4 Successors: Binding
Agreement
(a) The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Company, by agreement in form and substance reasonably
acceptable to GNP, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement.
(b) This
Agreement and all rights of GNP and/or the Contractor hereunder shall inure to
the benefit of and be enforceable by GNP and by the Contractor's personal or
legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees. If the Contractor should die
while any amounts would be payable to GNP hereunder if the Contractor had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid, in an amount calculated in accordance with the terms of this Agreement, to
the Contractor's devisee, legatee, or other designee (as notified to GNP and the
Company) or, if there be no such designee, to the Executive's
estate. For the avoidance of doubt the Company and GNP agrees that
such payments will be made in this manner.
7.5 Amendments and
Waivers
No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by GNP and
the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or in compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.
7.6 Entire Agreement,
Termination of Other Agreements
This
Agreement is an integration of the parties' agreement and no agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party that are not set forth
expressly in this Agreement. This Agreement supersedes any and all
previous agreements, oral or otherwise, express or implied, with respect to the
subject matter hereof between the parties.
7.7 Governing
Law
The
Parties agree that this Agreement shall for all purposes be construed and
interpreted according to the laws of the Province of Alberta and that the courts
having jurisdiction with respect to any matter or thing arising directly or
indirectly relating to this Agreement, the Schedules attached or the
relationship between the Parties, shall be the courts of said Province, to the
jurisdiction of which courts the Parties by their execution of this Agreement do
hereby submit.
7.8 Counterparts
This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which together will constitute one and the
same instrument.
[Signature
page follows]
IN WITNESS WHEREOF, the
parties have executed this Agreement effective as of the date first above
written.
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IMPERIAL
OIL AND GAS, INC.
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BY:
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Name:
Xxxxx Xxxxxx
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Title: Chief
Executive Officer
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XXXXX
XXXXXX
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By:
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XXXXX
XXXXXX
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Title: Chief
Executive Officer
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THE
CONTRACTOR
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BY:
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Name:
XXXXX
XXXXXX
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