Document:

Exhibit 10.3

 

INDEMNITY
AGREEMENT

 

THIS AGREEMENT is made as of the          day of             ,
20       .

 

BETWEEN:

 

NOVA
CHEMICALS CORPORATION, a corporation continued under the laws of Canada and having an office at 1000 —
7th Avenue SW, Calgary, Alberta T2P 5L5,

 

(the “Corporation”)

 

- and -

 

                                                , an individual having his principal residence in the
City of                                          ,
                                         ,
                                         .

 

(the “Indemnified
Party”).

 

RECITALS:

 

A.                                    The Indemnified Party:

 

(i)                                    is or has been a duly elected or appointed
director of, or is or has been, an individual who acts or has acted in a
similar capacity for, the Corporation or of a Subsidiary (as defined below),
or,

 

(ii)           at the request of the Corporation, is or has been a
duly elected or appointed director of, or is or has been an individual who acts
or has acted in a similar capacity for, 
an Outside Entity (as defined below);

 

B.                                    The Corporation considers it desirable and
in the best interests of the Corporation to enter into this Agreement to set
out the circumstances and manner in which the Indemnified Party may be
indemnified in respect of certain liabilities or expenses which the 

 

 

Indemnified
Party may incur as a result of acting as a director, or in a similar capacity,
of the Corporation, a Subsidiary or Outside Entity;

 

C.                                    The Indemnified Party has agreed to serve
or to continue to serve as a director, or as an individual acting in a similar
capacity, of the Corporation, a Subsidiary or Outside Entity subject to the
Corporation providing him with directors liability insurance and an indemnity
against certain liabilities and, in order to induce the Indemnified Party to serve
and to continue to so serve, the Corporation has agreed to provide the
indemnity herein;

 

D.                                    The by-laws of the Corporation contemplate
that the Indemnified Party may be indemnified in certain circumstances.

 

THEREFORE, the parties agree as follows:

 

1.             Definitions

 

In this Agreement, unless
the context otherwise requires:

 

“Agreement” means this indemnity agreement,
including all schedules, and all instruments supplementing, amending or
confirming this Agreement and “Section” means and refers to the specified
section of this Agreement;

 

“Canada Business Corporations
Act” means the Canada Business Corporations Act, as the same exists on the
date hereof or may hereafter be amended (but in the case of such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than the law permitted prior to such amendment);

 

“Claim” means any action, suit, investigation,
claim, application, litigation, charge, complaint, prosecution, assessment,
reassessment or proceeding of any nature and kind which may be brought,
commenced, made, prosecuted or threatened against the Indemnified Party or any
of the other directors of (or persons acting in a similar capacity for) the
Corporation, a Subsidiary or Outside Entity, for or in respect of any claim to
which he is involved in as a result of being or having been a director, or an
individual acting in a similar capacity, of the Corporation, a Subsidiary or
Outside Entity or which the Indemnified Party may be required to participate in
or provide evidence;

 

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“Loss” includes all costs, charges, expenses,
fees (including legal or other professional fees), damages, amounts paid to
settle any Claim or satisfy any judgment, fines, penalties or liabilities,
without limitation and whether incurred alone or jointly with others, including
any amounts which the Indemnified Party may suffer, sustain, incur or be
required to pay in connection with investigating, initiating, defending, appealing,
preparing for, providing evidence in, instructing and receiving the advice of
his own or other counsel;

 

“Outside Entity” means, other than the Corporation or a
Subsidiary:

 

(a)                                 in Canada, any not-for-profit corporation
incorporated under Part II of the Canada Corporations Act
or under any similar provisions of any provincial act or, in the United States
of America, any non-profit corporation, community chest, fund or foundation
that is exempt from federal income tax in the United States of America as an
organization described in Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended;

 

(b)                                 any corporation, joint venture,
partnership, trust, entity or other enterprise; or

 

(c)                                  any enterprise identified as an Outside
Entity in accordance with the Policies,

 

and in respect of which the Indemnified
Party was specifically requested to serve as a duly appointed director, or as
an individual acting in a similar capacity, of such Outside Entity, or such
service was part of the duties regularly assigned to the Indemnified Party by
the Corporation.

 

“Policies” means the directors’ and officers’
insurance policies maintained by the Corporation, and evidenced by the
Certificate of Insurance which is attached as Schedule “A” to this Agreement,
and any successor to each such policy;

 

“Subsidiary” means any organization in which more
than 50% of the outstanding securities or voting rights representing the
present right to vote for election of directors is owned or controlled,
directly or indirectly, in any combination, by the Corporation.

 

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2.             Indemnity

 

(a)                                General Indemnity — The Corporation agrees, except as
otherwise provided herein and subject to approval of the court pursuant to Section 124(4) of
the Canada Business Corporations Act in
respect of an action by or on behalf of the Corporation, a Subsidiary or
Outside Entity, to indemnify and save the Indemnified Party harmless, to the
full extent permitted by law, including but not limited to the indemnity under
the Canada Business Corporations Act from
and against any and all Loss which the Indemnified Party may suffer, sustain,
incur or be required to pay arising out of or incurred in respect of any Claim
howsoever arising and whether arising in law, equity or under statute,
regulation or governmental ordinance of any jurisdiction, or any act, deed,
matter or thing done, made, permitted or omitted by the Indemnified Party
arising out of, in connection with or incidental to the affairs of the Corporation,
a Subsidiary or an Outside Entity or the exercise by the Indemnified Party of
his powers or the performance of his duties as a director, or as an individual
acting in a similar capacity, of the Corporation, a Subsidiary or an Outside
Entity, provided that the indemnity provided for in this Section 2(a) will
only be available if:

 

(i)                                    the Indemnified Party was acting honestly
and in good faith with a view to the best interests of the Corporation, a
Subsidiary or Outside Entity, as the case may be, for which the Indemnified
Party acted as a director or in a similar capacity at the Corporation’s
request;

 

(ii)           in the case of a criminal or administrative action or
proceeding that is enforced by monetary penalty, in so acting, the Indemnified
Party had reasonable grounds for believing that his conduct was lawful; and

 

(iii)          in so acting, the Indemnified Party was not in breach
of his obligations hereunder.

 

(b)           Indemnity as of Right — The Indemnified Party is entitled to indemnity from
the Corporation in respect of all costs, charges and expenses reasonably
incurred by 

 

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him in
connection with the defence of any civil, criminal, administrative or
investigative action or other proceeding to which he is subject by reason of
being or having been a director of, or an individual acting in a similar
capacity for, the Corporation or a Subsidiary or, at the Corporation’s request,
is or has been a director or officer of, or an individual acting in a similar
capacity for, an Outside Entity, if the Indemnified Party:

 

(i)            was not judged by the court or other competent
authority to have committed any fault or omitted to do anything that the
Indemnified Party ought to have done; and

 

(ii)           fulfils the conditions set out in Section 2(a)(i) and
(ii) above.

 

(c)           Derivative Claims — In respect of any action by or on behalf of the
Corporation , a Subsidiary or Outside Entity to procure a judgment in its
favour against the Indemnified Party, in respect of which the Indemnified Party
is made a party by reason of being or having been a director, or an individual
acting in a similar capacity of the Corporation, a Subsidiary or Outside
Entity, the Corporation shall make application, at its expense, for the
approval of a court of competent jurisdiction to indemnify and save harmless
the Indemnified Party against such costs, charges and expenses reasonably
incurred by him in connection with such action provided the Indemnified Party
fulfils the conditions set out in Section 2(a)(i) and (ii) above.

 

3.             Specific Indemnity for Statutory Obligations

 

Without limiting the
generality of Section 2 hereof, the Corporation agrees, to the extent
permitted by law, to indemnify and save the Indemnified Party harmless from and
against any and all Loss arising by operation of statute and incurred by or
imposed upon the Indemnified Party in relation to the affairs of the
Corporation, a Subsidiary or Outside Entity in the Indemnified Party’s capacity
as a director, or as an individual acting in a similar capacity thereof,
including but not limited to, all statutory obligations to creditors,
employees, suppliers, 

 

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contractors,
subcontractors, and any government or any agency or division of any government,
whether federal, provincial, state, regional or municipal.

 

4.             Indemnity for Taxes and Duties

 

Without limiting the
generality of Section 2 hereof, the Corporation agrees that, to the extent
permitted by law, the payment of any indemnity to or reimbursement of the
Indemnified Party hereunder shall include any amount the Indemnified Party may
be required to pay on account of applicable income or goods or services taxes,
value added taxes, duties or levies arising out of the payment of such
indemnity or reimbursement such that the amount received by or on behalf of the
Indemnified Party, after payment of any such taxes, duties or levies, is equal
to the amount required to indemnify the Indemnified Party for his Loss,
provided however that any amount required to be paid with respect to such
taxes, duties or levies shall be payable by the Corporation only upon the
Indemnified Party remitting or being required to remit any amount payable on
account of such taxes or levies.

 

5.             Partial Indemnification

 

If the Indemnified Party
is determined to be entitled under any provisions of this Agreement to
indemnification by the Corporation for some or a portion of the Loss incurred
in respect of any Claim but not for the total amount thereof, the Corporation
shall nevertheless indemnify the Indemnified Party for the portion thereof to
which the Indemnified Party is determined by a court of competent jurisdiction
to be so entitled.

 

6.             Limitation
- Other Entities

 

Notwithstanding any other term of this Agreement, the
indemnification provided by the Corporation hereunder, with respect to the
Indemnified Party in his capacity as a director, or as an individual acting in
a similar capacity, of an Outside Entity shall not apply in respect of acts or
omissions occurring after the date the Indemnified Party ceased to be a
director or individual acting in a similar capacity of the Corporation or a
Subsidiary, or a director or individual acting in a similar capacity of an
Outside Entity where service by the Indemnified Party ceased to be at the
specific request of the Corporation or part of the duties regularly assigned to
the Indemnified Party, as the case may be.

 

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7.             Notices of
the Proceedings

 

The Indemnified Party shall, as a condition precedent to
his right to be indemnified under this Agreement, give notice in writing to the
Corporation as soon as practicable upon being served with any statement  of  claim, writ,
notice of motion, indictment, subpoena, investigation order or other document
commencing, threatening or continuing any Claim involving the Corporation, a
Subsidiary or Outside Entity or the Indemnified Party which may result in a
claim for indemnification under this Agreement, and the Corporation agrees to
give the Indemnified Party notice in writing as soon as practicable upon it or
any Subsidiary being served with any statement of claim, writ, notice of
motion, indictment, subpoena, investigation order or other document commencing
or continuing any Claim involving the Indemnified Party. Failure by either
party to so notify the other of any Claim shall not relieve the Corporation
from liability hereunder except to the extent that the failure materially
prejudices the Indemnified Party or the Corporation, as the case may be.

 

8.             Subrogation

 

(a)           Subrogation - The
Corporation:  Promptly after receiving written notice of any Claim or
threatened Claim from the Indemnified Party, the Corporation may, and upon the
written request of the Indemnified Party shall, promptly assume conduct of the
defence thereof and retain counsel on behalf of the Indemnified Party who is
reasonably satisfactory to the Indemnified Party, to represent the Indemnified
Party in respect of the Claim. If the Corporation assumes conduct of the
defence on behalf of the Indemnified Party, the Indemnified Party hereby
consents to the conduct thereof and of any action taken by the Corporation, in
good faith, in connection therewith and the Indemnified Party shall fully
cooperate in such defence including, without limitation, the provision of
documents, attending examinations for discovery, making affidavits, meeting
with counsel, testifying and divulging to the Corporation all information
reasonably required to defend or prosecute the Claim.

 

(b)           Subrogation — The Insurance
Company:  In the event of any payment under the
Policies, the Indemnified Party agrees that the insurance company making such 

 

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payment shall be subrogated to all of the
Indemnified Party’s rights of recovery and the Indemnified Party shall, upon
request of the subrogated insurance company or the Corporation, execute all
papers required and shall do everything necessary to secure and preserve such
rights of recovery, including the execution of such documents necessary to
enable the subrogated insurance company effectively to bring suit in the name
of the Indemnified Party.

 

9.             Separate
Counsel

 

In connection with any Claim or other matter for which
the Indemnified Party may be entitled to indemnity hereunder, the Indemnified
Party shall have the right to employ separate counsel of the Indemnified
Party’s choosing and to participate in the defence thereof but the fees and
disbursements of such counsel shall be at the Indemnified Party’s expense
unless employment of such other counsel has been authorized by the Corporation,
in which event, the fees and disbursements of such counsel shall be paid by the
Corporation, and the provisions of Section 13 shall apply to the payment
of any such fees and disbursements.

 

10.          No
Presumption as to Absence of Good Faith

 

Unless a court of competent jurisdiction otherwise has
held or decided that the Indemnified Party is not entitled to be fully or
partially indemnified hereunder, the determination of any Claim by judgment, order,
settlement or conviction, or upon a plea of nolo  contendere or its  equivalent,
shall not, of itself, create any presumption for the purposes of this Agreement
that the Indemnified Party is not entitled to indemnity hereunder.

 

11.          Settlement
of Claim

 

No admission of liability and no settlement of any Claim
in a manner adverse to the Indemnified Party shall be made without the consent
of the Indemnified Party.  No admission
of liability shall be made by the Indemnified Party without the consent of the
Corporation and the Corporation shall not be liable for any settlement of any
Claim made without its consent.

 

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12.          Determination
of Right to Indemnification

 

If the payment of an indemnity hereunder requires the
approval of a court, under the provisions of the Canada
Business Corporations Act or otherwise, any of the Corporation, a
Subsidiary or Outside Entity, may apply to a court of competent jurisdiction
for an order approving such indemnity by the Corporation of the Indemnified
Party pursuant to this Agreement. If the Corporation, a Subsidiary or Outside
Entity fail to make such application, then the Indemnified Party may apply to a
court of competent jurisdiction for an order approving such indemnity.

 

13.          Advance of
Expenses

 

(a)                                 The Corporation shall, at the request of the Indemnified
Party, advance to the Indemnified Party sufficient funds, or arrange to pay on
behalf of or reimburse the Indemnified Party for any costs, charges, expenses,
retainers or legal fees reasonably incurred or paid by the Indemnified Party in
respect of his involvement in any Claim or other matter for which the
Indemnified Party may be entitled to an indemnity or reimbursement hereunder
(including but not limited to investigating, defending, appealing, preparing
for, providing evidence in or instructing and receiving the advice of his
counsel or other professional advisors in respect of such Claim or other
matter), and such amounts shall be treated as an advance to the Indemnified
Party, pending approval of the Corporation and of the court (if required), to
the payment thereof as an indemnity.

 

(b)           In the event it is ultimately determined by a court of
competent jurisdiction that the Indemnified Party is not entitled to be indemnified
in respect of  any amount for which an advance
was made, or that the Indemnified Party was not  entitled
to be fully so indemnified, such advance, or the appropriate portion thereof
shall be repayable on demand.

 

14.          Other
Rights and Remedies Unaffected

 

The indemnification and payment provided in this
Agreement shall not derogate from or exclude any other rights to which the
Indemnified Party may be entitled under any provision of the Canada Business Corporations Act or otherwise at law, the
articles or by-laws of the

 

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Corporation, the constating documents of any Subsidiary
or Outside Entity, any applicable policy of insurance, guarantee or third-party
indemnity, any vote of shareholders of the Corporation, or otherwise, both as
to matters arising  out of his capacity as a
director, or as an individual acting in a similar capacity, of the Corporation,
a Subsidiary or Outside Entity, or as to matters arising out of any other
capacity in which the Indemnified Party may act for or on behalf of the
Corporation.

 

15.          Insurance

 

(a)           The Policies — The Corporation shall pay all premiums payable under
the Policies and take all reasonable steps necessary to maintain the coverage
provided under the Policies.

 

(b)           Currency of Policies — Upon the receipt of a written request from the Indemnified
Party at any time during the term of this Agreement, the Corporation shall
provide proof to the Indemnified Party that all premiums payable by the
Corporation in respect of the Policies have been paid.

 

(c)           Coverage - The Corporation shall purchase, maintain and administer,
or cause to be purchased, maintained and administered:

 

(i)            with respect to the Indemnified Party in his capacity as
a director, or as an individual acting in a similar capacity, of the
Corporation or a Subsidiary, for so long as the Indemnified Party remains a
director or an individual acting in a similar capacity, of the Corporation or a
Subsidiary and for a period of seven (7) years thereafter; or

 

(ii)           with respect to the Indemnified Party in his capacity as
a director, or as an individual acting in a similar capacity,  of an Outside Entity, for so long as the
Indemnified Party remains a director, or an individual acting in a similar
capacity, of the Corporation or a Subsidiary  and for a
period of seven (7) years thereafter;

 

insurance for the benefit of the Indemnified Party (the
“Extended Coverage”), on such terms as the Corporation then maintains in
existence for its directors, to the 

 

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extent permitted by law and in either case, provided
such insurance is, in the Corporation’s sole judgment, available on
commercially acceptable terms and premiums. The Extended Coverage shall be
coverage only in respect of events occurring:

 

(iii)          with respect to the Indemnified Party in his capacity as
a director, or as an individual acting in a similar capacity, of the
Corporation or a Subsidiary, before such Indemnified Party ceased to be a
director, or an individual acting in a similar capacity, of the Corporation or
a Subsidiary; and

 

(iv)          with respect to the Indemnified Party in his capacity as
a director, or as an individual acting in a similar capacity, of an Outside
Entity, before such Indemnified Party ceased to be a director or an individual
acting in a similar capacity of the Corporation or a Subsidiary or service by
such Indemnified Party ceased to be at the specific request of the Corporation
or part of the duties regularly assigned to the Indemnified Party.

 

Notwithstanding any other provision herein to the
contrary, the Corporation shall not be obligated to indemnify the Indemnified
Party under this Agreement for any costs, charges, expenses, fees, damages or
liabilities which have been paid to, or by or on behalf of, the Indemnified
Party under:

 

(v)           the Policies or any other applicable policy of insurance
maintained by the Corporation; or

 

(vi)          in respect of an Outside Entity, any applicable policy
of insurance or other arrangements maintained or made available by the Outside
Entity for the benefit of its respective directors or officers or individuals
acting in a similar capacity and for greater certainty, the indemnity provided
under this Agreement will only apply with respect to any costs, charges,
expenses, fees, damages or liabilities the Indemnified Party may suffer or
incur which would not otherwise be paid or satisfied under such insurance 

 

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or other arrangements maintained or made available
by such Outside Entity.

 

16.          Corporation
and Indemnified Party to Cooperate

 

The Corporation and the Indemnified Party shall, from
time to time, provide such information and cooperate with the other, as the
other may reasonably request, in respect of all matters hereunder.

 

17.          Legal Fees

 

In the event that any action is instituted by the
Indemnified Party under this Agreement to enforce or interpret any of the terms
hereof, the Indemnified Party shall be entitled to be paid all court costs and
expenses, including reasonable legal fees, incurred by the Indemnified Party
with respect to such action, unless as a part of such action, the court of
competent jurisdiction determines that other material assertions made by the
Indemnified Party as a basis for such action were not in good faith or were
frivolous.

 

18.          Effective
Time

 

This Agreement shall be deemed to have effect as and
from the first date that the Indemnified Party became a director, or an
individual acting in a similar capacity, of the Corporation, a Subsidiary or
Outside Entity.

 

19.          Extensions,
Modifications

 

This Agreement is absolute and unconditional and the
obligations of the Corporation shall not be affected, discharged, impaired,
mitigated or released by the extension of time, indulgence or modification
which the Indemnified Party may extend or make with any  person
regarding any Claim against the Indemnified Party or in respect of any
liability incurred by him in acting as a director, or as an individual acting
in a similar capacity, of the Corporation, a Subsidiary or Outside Entity.

 

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20.          Insolvency

 

The liability of the Corporation under this Agreement
shall not be affected, discharged, impaired, mitigated or released by reason of
the discharge or release of the Indemnified Party in any bankruptcy,
insolvency, receivership or other similar proceeding of creditors.

 

21.          Multiple
Proceedings

 

No action or proceeding brought or instituted under this
Agreement and no recovery pursuant thereto shall be a bar or defence to any
further action or proceeding which may be brought under this Agreement.

 

22.          Entire
Agreement

 

This Agreement, including Schedule “A”, constitutes the
entire agreement between the parties hereto relating to this subject matter and
supercedes all prior agreements, negotiations, discussions and understandings,
oral or written, by and between the parties with respect to the indemnification
of the Indemnified Party.  Except as
provided in this Agreement, there are no conditions, representations,
warranties, undertakings, promises, inducements or agreements whether direct or
indirect, collateral, express or implied by either of the parties with respect
to the indemnification of the Indemnified Party.

 

23.          Amendments

 

No supplement, modification or amendment to this
Agreement shall be valid or binding unless set forth in writing and duly
executed by the Corporation and the Indemnified Party.

 

24.          Termination

 

Subject to section 15  above,
the obligations of the Corporation shall not terminate or be released upon the
Indemnified Party ceasing to act as a director, or as an individual acting in a
similar capacity, of the Corporation, a Subsidiary or Outside Entity at any
time or times. The Corporation’s obligations hereunder may be terminated or
released only by a written instrument executed by the Indemnified Party.

 

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25.          Notices

 

Any notice to be given by one party to the other shall
be sufficient if delivered by hand, deposited in any post office in Canada or
the United States, registered, postage prepaid, or sent by means of electronic
transmission addressed, as the case may be:

 

(a)                                 To the Corporation:

 

NOVA Chemicals
Corporation

1000 — 7th Avenue SW

Calgary, Alberta,
Canada   T2P 5L5

Attention:         Jack
S. Mustoe

Fax:                   403-750-3942

 

(b)           To the Indemnified Party:

 

 

 

Fax:  

 

or at such other address of which notice is given by the
parties pursuant to the provisions of this Section. Such notice shall be deemed
to have been received when delivered, if delivered, and if mailed, on the fifth
business day (exclusive of Saturdays, Sundays and statutory holidays in the
Province of Alberta) after the date of mailing. Any notice sent by means of
electronic transmission shall be deemed to have been given and received on  the day it is transmitted, provided that if such day is not
a business day then the notice shall be deemed to have been given and received
on the next business day following. In case of an interruption of the postal
service, all notices or other communications shall be delivered or sent by
means of electronic transmission as provided above, except that it  shall not  be necessary
to confirm in writing and mail any notice  electronically
transmitted.

 

26.          Governing
Law

 

This Agreement shall be governed by and construed in
accordance with the laws of the Province of Alberta and the laws of Canada
applicable therein and shall be treated in all respects as an Alberta
contract.  The parties hereby irrevocably
submit and attorn to the jurisdiction of the courts of the Province of Alberta
with respect to all matters arising out of or relating to this 

 

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Agreement and all matters, agreements or documents
contemplated by this Agreement.  The
parties hereby waive any objections they may have to the venue being in such
courts including, without limitation, any claim that any such venue is an
inconvenient forum.

 

27.          Further
Assurances

 

The Corporation and the Indemnified Party agree that
they shall do all such further acts, deeds or things and execute and deliver
all such further  documents as may be necessary or
advisable for the purpose of assuring and conferring on the Indemnified Party
the rights hereby created or intended, and of giving effect to and carrying out
the intention or facilitating the performance of the terms of this Agreement or
to evidence any loan or advance made pursuant to Section 13 hereof.

 

28.          Interpretation

 

Wherever the singular or masculine are used in this
Agreement, the same shall be construed as meaning the plural or the feminine or
body corporate and whenever the plural is used in this Agreement the same shall
be construed as meaning the singular.

 

29.          Severability

 

If any term, clause or provision of this Agreement shall
be held to be invalid or contrary to law, the validity of any other term,
clause or provision shall not be affected and such invalid term, clause or
provision shall be considered severable and the remaining provisions of this
Agreement valid and enforceable to the fullest extent permitted by law.

 

30.          Successors
and Assigns

 

This Agreement shall be binding upon the Corporation and
its successors and assigns and shall enure to the benefit of and may be
enforced by the Indemnified Party and his heirs, executors, administrators and
other legal representatives.

 

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31.          Independent
Legal Advice

 

The Indemnified Party acknowledges that he has been
advised to obtain independent legal advice with respect to entering into this
Agreement, that he has obtained such independent legal advice or has expressly
deemed not to seek such advice, and that he is entering into this Agreement
with full knowledge of the contents hereof, of his own free will and with full
capacity  and authority to do so.

 

32.          Time of
Essence

 

Time shall be of the essence hereof.

 

33.          Deeming
Provision

 

The Indemnified Party shall  be
deemed to have acted or be acting at the specific request of the Corporation
upon his being appointed or elected as a director or officer or as an
individual acting in a similar capacity, of the Corporation, a Subsidiary or
Outside Entity.

 

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34.          Counterparts

 

This Agreement may be executed by the parties in
separate counterparts each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.

 

IN WITNESS OF WHICH the parties have duly executed this
Agreement.

 

 

NOVA CHEMICALS CORPORATION

 

 

	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:
  Jack S. Mustoe

  	
   

  	
   

  
	
   

  	
  Title: Senior Vice
  President, Legal, General Counsel and Corporate Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:
  Lawrence A. MacDonald

  	
   

  	
   

  
	
   

  	
  Title: Senior Vice President and Chief
  Financial Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  

 

17Exhibit 10.4

 

NOVA
CHEMICALS CORPORATION

INDEMNITY

 

TO:   
                              
(the “Director”)

 

WHEREAS the Director has consented to act as director of
NOVA Chemicals Corporation (the “Corporation”) and, from time to time,
certain affiliates of the Corporation (the “Affiliates”);

 

AND WHEREAS in accordance with the
by-laws of the Corporation, the Corporation has agreed to indemnify the
Director as hereinafter set out;

 

AND WHEREAS it is the desire of the
Corporation to indemnify and hold harmless, to the fullest extent permitted by
law, the Director from any and all debts, liabilities, losses, costs and
expenses of whatever nature, incurred by the Director in his capacity as a
director of the Corporation or any Affiliates and in the fulfillment of any
other duties or functions performed by the Director at the request or on behalf
of the Corporation or any of the Affiliates (severally and collectively, an “Indemnified
Capacity”);

 

NOW THEREFORE, in consideration of the
Director acting in an Indemnified Capacity and for other good and valuable
consideration, the Corporation hereby undertakes and agrees to indemnify the
Director upon and subject to the terms of this Indemnity and subject to the
provisions of the Business Corporations Act,
(New Brunswick), Chapt. B-9.1, as amended and the Corporation’s
By-Laws;

 

1.                                      The Corporation
shall indemnify and hold harmless the Director from and against any and all
liabilities, obligations, losses, damages, penalties, actions, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Director by reason of the Director
acting or having acted in an Indemnified Capacity, provided that (i) he
acted honestly and in good faith with a view to the best interests of the
Corporation, and (ii) in the case of a criminal or administrative action
or proceeding that is enforced by a monetary penalty, the Director had
reasonable grounds for believing that his conduct was lawful.

 

2.             Without
limiting the generality of the foregoing, the Corporation shall:

 

a)             indemnify and
save harmless the Director from and against all costs, charges, expenses,
judgments, fines and amounts paid in settlement of an action or in satisfaction
of a judgment, actually and reasonably incurred by the Director in connection
with any threatened, pending or completed action, suit or proceeding, . whether
civil, criminal, administrative, or investigative, and whether formal or
informal, domestic or foreign to which the Director is made a party by reason
of the Director acting or having acted in an Indemnified Capacity, and

b)             undertake to
obtain the approval of a court, if required, to indemnify and save harmless the
Director from and against all costs, charges, expenses, judgments, fines and
amounts paid in settlement of an action or in satisfaction of a judgment, 

 

 

c)     actually and reasonably
incurred by the Director in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative, and whether formal or informal, domestic or foreign in
respect of any action, suit or proceeding by or on behalf of the Corporation to
procure a judgment in its favour to which the Director is made a party by
reason of the Director acting or having acted in an Indemnified Capacity,

 

provided
that (i) he acted honestly and in good faith with a view to the best
interests of the Corporation, and (ii) in the case of a criminal or
administrative action or proceeding that is enforced by a monetary penalty, the
Director had reasonable grounds for believing that his conduct was lawful.

 

3.             Without
limiting the generality of the foregoing, the Corporation further undertakes
and agrees that if the Director is required to respond to or testify in
connection with or in any way arising from any civil, administrative or penal
proceedings involving the Corporation (including any future, present or former
officers, directors, affiliates or subsidiaries of the Corporation) the
Director shall be entitled to be reimbursed for the time spent by him at the
same daily rate of remuneration he would be entitled to receive for attending
meetings of the board of directors of the Corporation and the Director shall be
indemnified in respect of any disbursements (including reasonable legal fees of
counsel if required in the opinion of the Director) incurred in connection
therewith.

 

4.             The Corporation
further undertakes and agrees to indemnify and save the Director harmless, from
and against the full amount of any income taxes that the Director is required
to pay as a consequence of receiving any payment made by the Corporation
pursuant to the terms of this Indemnity, unless the Director is entitled to
deduct in computing his income for income tax purposes amounts paid by the
Director on account of costs, charges and expenses in respect of which such
payments have been made to the Director by the Corporation.

 

5.             The termination
of a proceeding by judgment, order, settlement, conviction, or upon a plea of
guilty or its equivalent is not, of itself, determinative that the Director did
not meet the standard of conduct described in sections 1 and 2 hereof.

 

6.             To the extent
permitted by law, all expenses incurred in defending a civil or criminal
action, suit or proceeding shall be paid promptly by the Corporation upon
receipt of evidence of expenses incurred by the Director provided that the
Director undertakes to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Corporation under the
provisions of this Indemnity. Without limiting the generality of the foregoing,
in calculating the amount of expenses incurred in defending any claim, the
Director shall be entitled to include as an expense time spent by him in
connection with the claim, which shall be calculated at the same rate of
remuneration he is entitled to receive for providing services to the
Corporation as well as disbursements incurred in connection therewith.

 

 

7.             The
indemnification provided by the Indemnity shall not be deemed exclusive of any
other rights to which the Director may be entitled under any statute, by-law,
agreement, vote of shareholders or otherwise, both as to actions in his
official capacity and as to actions in another capacity while holding such
office, and shall continue after he has ceased to act in an Indemnified
Capacity and shall inure to the benefit of the heirs, executors, administrators
and estate of the Director.

 

8.             To the extent
that the Director has any rights to indemnification, advancement of expenses
and/or insurance provided by any other entity, including any entity that may
have appointed him or on whose behalf he serves, (collectively, the “Third
Party Indemnitors”), the Corporation hereby agrees (i) that it is the
indemnitor of first resort (i.e., its obligations to the Director are primary
and any obligation of the Third Party Indemnitors to advance expenses or to
provide indemnification for the same expenses or liabilities incurred by the
Director are secondary), (ii) that it shall be required to advance the
full amount of expenses incurred by the Director and shall be liable for the
full amount of all expenses, judgments, penalties, fines and amounts paid in
settlement to the extent legally permitted and as required by the charter
documents of the Corporation (or any agreement between the Corporation and the
Director), without regard to any rights the Director may have against the Third
Party Indemnitors, and, (iii) that it irrevocably waives, relinquishes and
releases the Third Party Indemnitors from any and all claims against the Third
Party Indemnitors for contribution, subrogation or any other recovery of any
kind in respect thereof. The Corporation further agrees that no advancement or
payment by the Third Party Indemnitors on behalf of the Director with respect
to any claim for which the Director has sought indemnification from the
Corporation shall affect the foregoing and the Third Party Indemnitors shall
have a right of contribution and/or be subrogated to the extent of such
advancement or payment to all of the rights of recovery of the Director against
the Corporation. The Corporation and the Director agree that the Third Party
Indemnitors are express third party beneficiaries of the terms hereof.

 

9.             Any section, subsection
or subdivision or provision of this Indemnity which is or becomes illegal,
invalid or unenforceable shall be severed from this Agreement and be
ineffective to the extent of such illegality, invalidity or unenforceability
and shall not affect or impair the remaining provisions thereof.

 

10.                               The Corporation
hereby waives the right to set off any and all existing and future claims
(other than claims arising hereunder) against any amounts payable to the
Director hereunder, and agrees to pay such amounts payable hereunder regardless
of any claim which may be asserted by the Corporation or on his behalf against
the Director (other than claims arising hereunder).

 

11.                               This Indemnity
shall be effective from the date that the Director was duly appointed as a
director of the Corporation.

 

12.                               This Indemnity
shall be deemed to have been made in and shall be construed in accordance with
the laws of the Province of New Brunswick and the federal laws of Canada
applicable therein and the Corporation hereby unconditionally attorns to the
laws 

 

 

of such jurisdiction and to the courts of the
Province of New Brunswick.

 

<Remainder of Page Intentionally Left Blank>

 

 

DATED
as of the            day of
                                        ,
20

 

 

	
   

  	
  NOVA
  CHEMICALS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
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