MANAGEMENT SERVICES AGREEMENT
Exhibit
99.2
THIS AGREEMENT made this 1st
day of January, 2008 (the “Effective Date”),
BETWEEN:
KATEMY HOLDINGS
INC.
0000X Xxxxxxxxx
Xxxx
Xxxxxxxxxx, XX X0X
0X0
(“Katemy”)
AND:
LUMONALL,
INC., (as defined below)
having place
of business at 0000 Xxxx Xxxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxx,
X0X
0X0;
(the
“Company”).
RECITALS:
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A.
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The company
has agreed to engage Katemy Holdings Inc. to perform the Management
Services and Katemy has agreed to perform such Services, in accordance
with the terms and conditions contained
herein;
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B.
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Katemy is an
independent contractor and is not, solely by operation of this Agreement,
an employee of the Company;
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C.
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The Company
has also requested that Katemy enter into confidentiality provisions, and
Katemy has agreed to do so, to specify the obligations of confidentiality
which Katemy has agreed to accept as a condition of Katemy being engaged
to perform the Services; and
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WITNESS THAT in
consideration of the premises, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follow:
ARTICLE
1
DEFINITIONS
AND INTERPRETATION
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1.1
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Definitions
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In this Agreement,
including the recitals and any schedules, the following words and expressions
have the following meanings unless the context otherwise requires:
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(a)
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“Confidential
Information” means all information or data which may before or after the
date of this Agreement be delivered to Katemy by the Company or by any
affiliate of the Company or which may otherwise come within the knowledge
of Katemy or which may
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be developed by
Katemy or any subsidiary or affiliate of Katemy or any employee of any of them
in connection with the Services or from any of the other Confidential
Information including, without limiting the generality of the foregoing, all
information or data regarding manufacturing processes, programs, plants,
products, costs, equipment, operations, distribution, marketing or customers
relating to the products; all technical information, procedures, processes,
diagrams, specifications, improvements, formulations, plans and data relating to
the products and services and all documents delivered by the Company or any
affiliate of the Company which are marked as confidential or as proprietary
information.
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(b)
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“Intellectual
Property Rights” means all rights in respect of intellectual property
including, without limitation, all patent, industrial design, integrated
circuit topography, know-how, trade secret, privacy and trade-xxxx rights
and copyright, to the extent those rights may subsist anywhere in the
universe.
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(c)
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“Service”
means all service that Katemy may provide from time to time for the
Company including, without limitation, those provided in Schedule “A”
hereto.
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1.2
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Entire
Agreement
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This Agreement
supersedes all previous invitations, proposals, letter, correspondence,
negotiations, promises, agreement, covenants, conditions, representations and
warranties with respect to the subject matter of this
Agreement. There is no representation, warranty, collateral term or
condition affecting this Agreement for which any party can be held responsible
in any way, other than as expressed in writing in the Agreement.
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1.3
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Amendments
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No change or
modification of this Agreement will be valid unless it is in writing and signed
by each party to this Agreement.
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1.4
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Invalidity of
Particular Provision
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It is intended that
all of the provisions of this Agreement will be fully binding and effective
between the parties. In the event that any particular provision or
provisions or a part of one or more is found to be void, voidable or
unenforceable for any reason whatsoever, then the particular provision or
provisions or part of the provision will be deemed severed from the remainder of
this Agreement. The other provisions of the Agreement will not be
affected by the severance and will remain in full force and effect.
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1.5
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Governing
Law
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This Agreement will
be governed by and construed in accordance with the laws of the Province of
Ontario.
ARTICLE
2
DUTIES
OF KATEMY
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2.1
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Engagement
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The Company hereby
engages Katemy and the services of Katemy’s assistant to provide the Services to
the Company as described in Schedule “A” hereto and Katemy hereby covenants
and
agrees to provide
such Services to the Company subject to the terms and conditions of the
Agreement.
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2.2
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Scope of
Duties
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Katemy will devote
adequate time, attention, abilities and sufficient hours to its duties hereunder
and Katemy will give the Company the benefit of its knowledge, expertise and
ingenuity.
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2.3
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Duty to the
Company
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During the term of
this Agreement Katemy will well and faithfully serve the Company and use all
reasonable endeavours to promote the interest of the Company. Katemy
will act honestly, in good faith and in the best interests of the
Company. Katemy will adhere to all applicable policies of the
Company.
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2.4
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Business of the
Company
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Katemy will not,
during the term of this Agreement, engage in any business, enterprise or
activity that is contrary to or detracts from the due performance of the
business of the Company.
ARTICLE
3
REMUNERATION
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3.1
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Remuneration
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The remuneration of
Katemy will be at the rate and on the terms specified in Schedule “B” hereto, or
on any replacement thereof initialled by all parties.
3.2 Expenses
Katemy will be
reimbursed for all reasonable out-of–pocket expenses actually and properly
incurred by it in connection with its duties hereunder provided that Katemy
first furnishes statements and vouchers for all such expenses to the
Company. Unless otherwise specifically provided in Schedule “B”,
Katemy will be reimbursed by the Company for all reasonable expenses necessarily
and actually incurred by Katemy in the performance of the Services, provided
that Katemy submits to the Company detailed invoices and supporting
documentation acceptable to the Company, acting reasonably. Katemy will invoice
the Company for such expenses monthly in arrears. All such Company
approved invoices will be payable by the Company reasonably upon receipt of each
such invoice.
3.3 Management Services
Agreement Not Employee
The parties agree
that Katemy is not an employee of the Company and, as such, save as required by
law, there will be no deductions for any statutory withholdings such as income
tax, Government Pension Plan, Employment Insurance or Workers
Compensation.
3.4 Statutory
Withholdings
Katemy agrees to
make and remit all statutory withholdings as may be required.
ARTICLE
4
CONFIDENTIALITY
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4.1
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General Obligation of
Confidentiality
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Katemy acknowledges
that the Confidential Information consists entirely of information and
knowledge, which is the exclusive property of the Company or its subsidiaries
and affiliates or persons from whom the Company has obtained its
rights. Katemy will treat the Confidential Information obtained by it
in strict confidence and will not disclose the Confidential Information made
available to it unless otherwise required by law, except as previously approved
in writing by the Company. Katemy will protect such Confidential
Information from disclosure by exercising a standard of care as may reasonably
be expected to preserve its secret and confidential nature. All
documents containing Confidential Information are the property of the
Company. Without limiting the generality of the foregoing, Katemy
hereby transfers to the Company the property rights in all documents which now
or hereafter may contain the Confidential Information.
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4.2
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Use of Confidential
Information
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Katemy will not use
Confidential Information for any purpose other than as may reasonably be
required in order to perform the Services.
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4.3
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Exceptions
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Any obligations
specified in the Article will not apply to the following:
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(a)
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any
information, which is presently in the public domain;
and
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(b)
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any
information which subsequently becomes part of the public domain through
no fault of Katemy or any officer, director, employee or agent of Katemy;
or
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(c)
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any
information, which is required to be disclosed by a court of competent
jurisdiction.
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ARTICLE
5
OWNERSHIP
OF RIGHTS
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5.1
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The Company’s
Ownership of Rights
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(a)
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Katemy
acknowledges and agrees as follows with respect to the ownership of rights
by the Company and the limitation of Katemy’s
rights:
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(b)
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Nothing
contained in this Agreement will be construed as an assignment to Katemy
of any right, title or interest in the Confidential
Information. All right, title and interest relating to the
Confidential Information is expressly reserved by the
Company.
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(c)
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Katemy will
not at any time apply for any Intellectual Property Rights that would
affect the ownership by the Company of any Intellectual Property Rights
associated with the Confidential Information or file any document with any
government authority anywhere in the world or take any other action which
could affect such ownership of Intellectual Property Rights associated
with the Confidential Information or aid or abet anyone else in doing
so. To the extent that copyright may subsist in the
Confidential Information Katemy hereby waives all past, present and future
moral rights Katemy may have.
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ARTICLE
6
NON-COMPETITION
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6.1
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Non-Competition
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Katemy will not,
without the prior written consent of the Company during the term of the
Agreement and during the one year period immediately following the termination
of the Agreement, within North America (the “Prohibited Area”):
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(a)
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undertake to
perform on behalf of any other entity any service that would conflict
directly or indirectly with the performance of the Services under this
Agreement; and
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(b)
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divert or
attempt to divert any business of, or any customers of the Company or of
any of its subsidiaries, to any other competitive establishment, by direct
or indirect inducement or otherwise;
and
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(c)
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directly or
indirectly impair or seek to impair the reputation of the Company, nor any
relationships that the Company has with its employees, customers,
suppliers, agents or other parties with which the Company does business or
has contractual relations; or
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(d)
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directly or
indirectly, in any way, solicit, hire or engage the services of any
employee of the Company, or persuade or attempt to persuade any such
individual to terminate his or her employment with the
Company.
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ARTICLE
7
INDEMNITY
7.1 Indemnity
Katemy will defend,
indemnify and save harmless the Company from and against all actions,
proceedings, demands, claims, liabilities, losses, damages, judgments, cost and
expenses including, without limiting the generality of the foregoing, legal fees
and disbursements on a solicitor and his own Company basis (together with all
applicable taxes) which the Company may be liable to pay or may incur by reason
of a breach of the terms of this Agreement or any liability that Company may
incur to any authority for source deductions and any other remittance
obligations arising with respect to payment to Katemy pursuant to this
Agreement.
ARTICLE
8
TERM
8.1 This Agreement will take effect on the Effective Date and
will continue in full force and effect until March 31, 2009, unless terminated
by the Company in accordance with this Agreement. The Company will
notify Katemy of its decision regarding renewal of this Agreement for a further
term of one year at least 90 days prior to the expiry of the term or the Renewal
Term of this Agreement.
8.2 Katemy agrees
not to terminate the Agreement, for any reason other than non payment of
remuneration, except with at least six months advance written notice prior to
expiration of the term or Renewal Term of this agreement.
8.4 The Company may, at any time, give 120 days’ advance
written notice to Katemy of its intention to terminate this Agreement and on the
expiration of such period this Agreement will be terminated. In such
event, the Company will be obligated to pay the remaining unpaid remuneration to
the expiry of the term or the Renewal Term of this Agreement, in a lump sum on
the expiration of the written ninety day notice period.
8.5 The Company may terminate this Agreement without advance
written notice to Katemy and without further remuneration past the date of
termination, upon the occurrence of any of the following events:
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(a)
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Katemy’s
commission of a crime which relates directly to the performance of this
Agreement, or any act by Katemy involving money or other property
involving the Company or an affiliate of the Company that would constitute
a crime in the jurisdiction involved;
or
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(b)
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any act by
Katemy of fraud, misappropriation, dishonesty, embezzlement or similar
conduct against the Company or an affiliate or customer of the Company;
or
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(c)
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any material
breach by Katemy of any of the terms of this Agreement which remains
uncured after the expiration of 30 days following the delivery of written
notice of such breach to Katemy by the Company;
or
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(d)
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Katemy’s
failure to devote adequate time to the Company’s business, or conduct by
Katemy amounting to insubordination or inattention to, or substandard
performance of Katemy’s duties and responsibilities under this Agreement,
which remains uncured after the expiration of thirty days following the
delivery of written notice of such failure or conduct to Katemy by the
Company.
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8.6 Upon termination of this Agreement Katemy will return to
the Company all Company property including all written information, tapes, discs
or memory devices and copies thereof, and any other material on any medium in
Katemy’s possession or control pertaining to the business of the Company,
without retaining any copies or records of any Confidential Information
whatsoever.
ARTICLE
9
GENERAL
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9.1
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Arbitration
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All disputes
arising out of or in connection with this contract, or in respect of any defined
legal relationship associated therewith or derived there from, will be referred
to and finally resolved by arbitration under the rules and statutes of the
Province of Ontario.
9.2 Notices
Any notice,
direction, request or other communication required or contemplated by any
provision of the Agreement will be given in writing and will be given by
delivering or faxing same to the Company or Katemy, as the case may be, as
follows:
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(a)
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To Katemy
at:
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0000X Xxxxxxxxx
Xxxx
Xxxxxxxxxx, XX X0X
0X0
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(b)
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To the
Company at:
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0000 Xxxx Xxxx,
Xxxxx 000
Xxxx Xxxx, Xxxxxxx,
X0X 0X0
Attention: Chief
Executive Officer
Fax
No.: 000-000-0000
Any such notice,
direction, request or other communication will be deemed to have been given or
made on the date on which it was delivered or, in the case of fax, on the next
business day after receipt of transmission. Either party may change
its fax number or address for service from time to time by notice in accordance
with the foregoing.
9.3 Assignment
This Agreement is
not assignable in whole or in part by Katemy or the Company without the prior
written consent of the other party. Any attempt to assign any of the
rights, or to delegate any of the duties or obligations of this Agreement
without such written consent is void. Any such change, which might occur without
such consent, or any assignment occurring by reason of operation of law such as
upon a bankruptcy or amalgamation will be deemed an event of default under this
Agreement.
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9.4
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Waiver
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No failure or delay
on the party of any party in exercising any power or right under this Agreement
will operate as a waiver of such power or right, nor will any single or partial
exercise of any such right or power preclude any further or other exercise of
such right or power under this Agreement. No modification or waiver
of any provision of this Agreement and no consent to any departure by any party
from any provision of the Agreement will be effective unless it is in
writing. Any such waiver or consent will be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on any party in any circumstances will entitle such party to any
other or further notice or demand in similar or other
circumstances.
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9.5
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Enurement
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Subject to the
restrictions on transfer contained in this Agreement, this Agreement will enure
to the benefit of and be binding on the parties and their respective heirs,
executors, administrators, successors and assigns.
IN WITNESS WHEREOF the Parties
have executed this Agreement on the day and year first written
above:
| LUMONALL, INC. | KATEMY HOLDINGS INC. | |||
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/s/
Xxxx X. Xxxxxxxx
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/s/
Xxxx Xxxxxxxxx
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Name:
Xxxx X. Xxxxxxxx
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Name :
Xxxx Xxxxxxxxx
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Title :
Chairman and CEO
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SCHEDULE
“A”
Services
Katemy covenants
and agrees with the Company that Xxxxxxx Xxxxxxxxx shall provide his services to
the Company, for the purposes of President and Chief Operating Officer. Katemy
will continue to serve in such capacity throughout the term or Renewal Term of
this Agreement. Katemy understands that this is a new business and the roles
will continue to evolve with the business. This agreement does not imply any
rights or entitlements to Katemy and will be reviewed on a regular
basis.
This agreement also
includes the services of Katemy’s Administrative Assistant.
SCHEDULE
“B”
Remuneration
The remuneration of
Katemy will be a US$18,500 (or the CDN equivalent) per month paid on the first
business day of the month.
Bonus
Katemy will receive
a bonus of 2% of sales and 5% of EBITDA based on the results of the financial
statements payable on a quarterly basis.
