EXHIBIT 10.28
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
MASTER LICENSE AGREEMENT
AGREEMENT dated the 9th of June 1999 between Fairfield Industries Incorporated,
a Delaware corporation ("Data Owner"), with offices at 14100 Southwest Freeway,
Suite 600, Sugar Land, Texas 77478, Fax: (281) 275-7550, and CHENIERE ENERGY
INCORPORATED, a Delaware corporation ("Licensee"), with offices at Two Allen
Center, 1200 Smith Street, Suite 1740, Houston, Texas 77002-4312, Fax: (713)
659-5459.
WITNESSETH:
WHEREAS, Licensee wishes to license from time to time from Data Owner
geophysical seismic data owned by Data Owner (the "Data"), the content and form
of which will be identified by supplements to this Agreement ("Supplements"),
and Data Owner is willing to license the Data to Licensee, all on the terms
hereinafter set forth;
NOW, THEREFORE, Data Owner and Licensee hereby agree as follows:
1. Definitions.
The term "Data Products" means any result or product derived from any
processing, interpretation or other use by or for the Licensee of any Data or
Data Product.
References to "this Agreement" include the Supplements.
2. Ownership of the Data.
Licensee acknowledges that Data Owner owns or will own all rights in and to
the Data, that the Data is and will be a valuable asset and trade secret of Data
Owner, and that title to and all other rights in the Data will at all times
remain in Data Owner - Licensee is acquiring only the non-exclusive right to use
the Data as provided in this Agreement. Licensee may use, disclose, and show
the Data and Data Products only as expressly permitted by this Agreement.
Licensee may not, except as expressly provided in this Agreement, sell,
sublicense, transfer, assign, encumber or otherwise dispose of or exploit any of
the Data or any Data Product; but Licensee may at any time destroy any Data or
Data Product. Licensee's merging or consolidating with one or more entities,
regardless of whether Licensee is the surviving entity, will constitute a
transfer.
3. License of the Data.
(a) Data Owner grants Licensee the non-exclusive right to use Data
identified in any Supplement for a period of twenty-five (25) years from the
date of that Supplement, but for Licensee's internal use only. Licensee may
produce Data Products and copies of Data and Data Products, but Licensee will
use the Data and Data Products and copies thereof only for its internal
purposes, will not permit any other use of any Data or Data Product, and will
not disclose or permit the disclosure of, transmit or permit or provide access
to, or show any Data or Data Product except as expressly permitted by this
Agreement.
Licensee will store the Data and Data Products in a safe place to secure
them from loss and theft and from any disclosure that is not permitted by this
Agreement. Licensee will maintain records of the location at all times of all
Data and Data Products. Data Owner may, on request and during Licensee's normal
business hours, inspect Licensee's storage facility and records of the location
for the Data and Data Products.
(b) (i) Any copy of a Data Product (other than any Data Product, including
working drafts, which Licensee will not disclose to anyone else and which
Licensee will destroy within fourteen (14) days after Licensee produces it) must
state conspicuously on each page of the hard copy retained in storage files, and
the outside of each tape copy or other copy or version of a Data Product must
state conspicuously on a label to that copy or version, the following:
The data disclosed or contained herein is a valuable asset and trade
secret of Fairfield Industries Incorporated and is subject to the
terms of a license agreement which, among other things, restricts the
use and disclosure of any of the data.
(ii) Each Data Product (other than any Data Product, including working
drafts, which Licensee will not disclose to anyone else and which Licensee will
destroy within fourteen (14) days after Licensee produces it) must contain the
following notice in the data description portion of a seismic data set
definition:
*WARNING: DATA BELONGS TO FAIRFIELD INDUSTRIES
SUBJECT TO LICENSE RESTRICTIONS*
For SEG-Y formatted Data, the notice should be the first 80 byte card image
in the EBCDIC card image block.
(c) Licensee may disclose Data and Data Products to a consultant or a third
party in the business of processing or interpreting geophysical seismic data (a
"Consultant") solely to enable the Consultant to advise on the Data or Data
Products, interpret the Data, or to otherwise produce a Data Product, but only
if prior to viewing any Data or Data Product and commencing any work, the
Consultant executes and delivers to Licensee a written agreement whereby the
Consultant agrees (i) to maintain the Data in the strictest confidence and not
to disclose the Data and Data Products to any other person and not to use them
for any purpose other than its work for Licensee, (ii) except for the purpose of
processing Data and Data Products to produce Data Products for Licensee, Data
and Data Products shall not be removed from Licensee's premises, and (iii) not
to show or transmit any Data or Data Products to any person in any form or via
electronic transmission from any location. Licensee will furnish Data Owner
copies of these agreements upon Data Owner's request. Each Consultant must be a
bona fide consultant within the oil and gas industry or a bona fide processor of
geophysical seismic data. Licensee will not permit the Consultant to remove any
Data or Data Products from Licensee's premises except for the purpose of
processing them to produce Data Products solely for Licensee, and in this case
the removal may only be to the Consultant's premises; and Licensee will cause
the Consultant to return or deliver to Licensee all copies of the Data and Data
Products when the Consultant completes its work.
In addition, in the case of a Consultant which will process Data and Data
Products, the agreement described above must also contain covenants by the
Consultant (i) not to remove any Data or Data Products from Licensee's premises
except to transport them to Consultant's premises for the purpose of producing
Data Products solely for Licensee, and not to permit any Data or Data Products
to be removed from the Consultant's premises except for delivery to Licensee,
and (ii) to return to Licensee all copies of Data and Data Products when the
Consultant completes its work.
(d) Licensee may permit third parties to view-and only to view-the Data and
Data Products, but only in an environment whereby such third parties are not
able to make copies or otherwise acquire a knowledge of the Data comparable to
having a copy of the Data, and only for the purpose of the third party
determining whether to enter into a farmout, operating agreement, acreage trade,
joint bidding agreement, exploration agreement, participation agreement, or
other arrangement with Licensee for the joint exploration or development of
particular geographical areas, or whether to purchase or provide financing with
respect to any of those areas or verifying the hydrocarbon reserves of any of
those areas, and only if prior to viewing any Data or Data Product the third
party executes an agreement pursuant to which that third party agrees not to use
any of the Data and/or Data Product for any other purpose and to maintain the
Data and/or Data Product in the strictest confidence and not to disclose any of
the Data or Data Product to anyone else. Licensee will furnish Data Owner with
copies of these agreements upon request. Licensee will not permit any third
party to view the Data and Data Products, whether in a single viewing session or
in more than one viewing session, for more than 6 hours in the aggregate for all
viewing sessions in respect of any one geophysical prospect. Licensee will not,
without Data Owner's prior written consent, give the third party a copy of any
of the Data or a copy of any Data Product or any portion thereof. In addition
to the foregoing, Licensee will prevent third parties to which it discloses any
Data or Data Product from confirming a prospect by independently working the
Data or Data Product unless such third party has a license to the Data covering
the prospect. The provisions of this Section 3(d) do not affect the provisions
of Section 3(c). Licensee's Consultants may participate in the viewing sessions
under this Section 3(d) subject to their compliance with the confidentiality
provisions of this Agreement as if they were the Licensee.
(e) Licensee may disclose Data Products to the Minerals Management Service,
an agency of the United States government ("MMS"), if required by applicable
law; provided that Licensee discloses no more of the Data Products than required
and gives Data Owner written notice before delivering the Data Products to the
MMS. The written notice must contain a detailed description of Data Products
disclosed, exact coordinates of the data volume, and date of disclosure. Data
Owner, not Licensee, will disclose any Data required to be disclosed to the MMS.
Pursuant to regulations (30 CFR Parts 250 and 251) effective January 23,
1998 issued by MMS, Data Owner notifies Licensee - and Licensee acknowledges -
that by the license of geological and/or geophysical data from Data Owner,
Licensee assumes the obligations under 30 CFR Section 251.11 and/or 251.12, as
the case may be, as the same may from time to time be amended. The provisions
of this paragraph do not limit or supersede the provisions of the foregoing
paragraph.
4. Remedies.
(a) Licensee acknowledges that Data Owner's business is the licensing or
other exploitation of the very Data licensed to Licensee under this Agreement.
Thus, upon the occurrence of any breach of Section 2 or Section 3 of this
Agreement by Licensee or anyone to whom Licensee discloses any of the Data,
Licensee
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shall pay Data Owner, as liquidated damages and not as a penalty, a fee of (1)
Data Owner's then highest current license fee for each block of Data involved in
such breach times (2) the greater of 1 or the number of third parties which had
access prohibited by this Agreement to each such block of Data. Further, if the
breach is a failure to affix labels or include a notice as required by Section
3(b) or a failure to obtain a written agreement from a Consultant as required by
Section 3(c), and if Licensee cures that breach by affixing the required labels
or adding the required notice or obtaining the required agreement within ten
(10) days after the breach occurs, then Licensee will not be required to pay the
fee under the foregoing sentence with respect to that breach. The provisions of
this Section 4(a) are without prejudice to, and are in addition to, any other
remedies that Data Owner has, including, without limitation, the right to
injunctive relief.
However, notwithstanding the foregoing, if Licensee merges or consolidates
with another company and if the common shareholders of Licensee own more than
50% of the outstanding common shares of the surviving company immediately after
the merger or consolidation and if they control the surviving company, then such
merger or consolidation shall not prevent the Data or any Data Product from
being transferred to the surviving company and no transfer fee shall be payable
to the Licensor for the transfer of Data to the surviving company. For purposes
of determining the outstanding shares of the surviving company, any shares which
may be acquired under any option, conversion privilege or other right will be
deemed to be outstanding. Control means the ability to control or determine the
management of the surviving company whether by election of those members who can
determine the decisions of the board of directors or by any other means. The
surviving company shall succeed to all rights and assume all obligations of
Licensee under this Agreement.
If a merger or consolidation does not satisfy the requirements of the
foregoing provisions for a permitted transfer of the Data or any Data Product
without payment of a transfer fee, then Licensee (and the surviving company as
successor to all rights and obligations of Licensee) will pay Data Owner, within
thirty (30) days after the effective date of the merger or consolidation, a fee
of [*], and the surviving company will be entitled to all rights and will be
responsible for all obligations of Licensee under this Agreement.
If in a single transaction or a series of transactions a person or a group
of persons acting in concert acquires shares of the common stock of the Licensee
resulting in that person or group owning and/or controlling more than 50% of the
outstanding common stock of Licensee, Licensee will pay Data Owner, within
thirty (30) days after that person or group owns and/or controls more than 50%
of the outstanding common stock of Licensee, a fee of [*]. For purposes of
determining the outstanding shares of the Licensee, shares which may be acquired
under any option, conversion privilege or other right will be disregarded. The
term "person" includes an individual, corporation, partnership, limited
liability company or other entity. A group of persons shall be deemed to be
"acting in concert" if such persons act together in accordance with an agreement
with each other.
If either of the two preceding paragraphs applies and if at the time of the
merger or consolidation or, as the case may be, at the time the person or group
acquires ownership and/or control of more that 50% of Licensee's outstanding
stock, Licensee has licensed fewer than 1,000 blocks of Reprocessed Data under
Supplement Agreement No. 1 to this Master License Agreement, then the fee under
the applicable paragraph will be [*], the product of [*] and the greater of (i)
the number of blocks of Reprocessed Data that Licensee has licensed at that
time, or (ii) the number of blocks of Reprocessed Data that Licensee should have
licensed at that time to the extent that a sufficient number of blocks of
Reprocessed Data was available for Licensee to license.
(b) The license and rights of the Licensee under this Agreement will (i)
automatically terminate without notice of any kind by Data Owner or any other
person on the occurrence of the second breach of any of the terms of Section 2
or Section 3 of this Agreement by Licensee or anyone to whom Licensee discloses
any of the Data or any Data Product and (ii) terminate 10 business days after
written notice is sent by Data Owner to Licensee of the breach of any other term
of this Agreement if Licensee shall not have cured such breach during such ten
business day period. The termination of the license and the rights of Licensee
shall not affect Licensee's obligations under this Agreement, including any
obligations under a Supplement to pay for Data ordered or provide additional
consideration, and all such obligations shall survive any termination of the
license and rights of the Licensee under this Agreement. The provisions of item
(i) of the first sentence of this paragraph will not apply to affixing labels,
including notices, or obtaining agreements as described in the first paragraph
of Section 4(a) provided the breach is cured immediately upon discovery thereof
by Licensee or within ten (10) business days after written notice of such breach
is given by Data Owner to Licensee, whichever is the earlier.
(c) On termination of the license, Licensee will return to Data Owner all
copies of the Data and will destroy all Data Products, and will verify such
destruction to Data Owner in writing; but Licensee is not required to destroy
copies of Data Products which, pursuant to the provisions of this Agreement, are
in the possession of MMS or which Licensee has given to third parties with the
written permission of Data Owner; and on termination of the license on
expiration of its 25-year term, Licensee may retain all of its Data Products.
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(d) In addition to any other remedies that Data Owner has, Data Owner will
be entitled, without posting bond or other security, to injunctive and other
equitable relief to enforce the provisions of Section 2 or Section 3; and it
will not be a defense to any request for such relief that Data Owner has an
adequate remedy at law. If Data Owner is successful in any application for
injunctive or other equitable relief, Licensee will pay Data Owner the expenses
Data Owner incurs in obtaining such relief including, without limitation,
reasonable legal fees and disbursements, court costs and the cost of appellate
proceedings.
(e) The rights and remedies of Data Owner are cumulative.
5. License Fee; Taxes.
Licensee will pay Data Owner a fee for Data licensed under this Agreement
as specified in the Supplement pertaining to that Data. If any government unit
should levy a sales, use, or other tax of any nature relating to licensing or
transfer for the Data covered by this Agreement, Licensee shall pay all such
taxes and reimburse Data Owner for any such taxes paid by Data Owner.
6. Disclaimer of Warranties; Limitation of Liability.
(a) DATA OWNER MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND OR
DESCRIPTION, EXPRESS OR IMPLIED, WITH RESPECT TO THE DATA EXCEPT THAT IT OWNS OR
WILL OWN THE DATA AND MAY LICENSE IT TO LICENSEE PURSUANT TO THIS AGREEMENT
WITHOUT VIOLATING THE RIGHTS OF ANY THIRD PARTY. ALL DATA IS DELIVERED TO
LICENSEE, "AS IS WHERE IS". ANY USE WHICH THE LICENSEE MAKES OF THE DATA AND
ANY ACTION WHICH THE LICENSEE TAKES BASED ON THE DATA WILL BE AT THE LICENSEE'S
SOLE RISK, EXPENSE AND LIABILITY, AND LICENSEE WILL NOT HAVE ANY CLAIM AGAINST
DATA OWNER BY REASON OF ANY SUCH USE OR ACTION.
(b) Data Owner will have and incur no liability to Licensee with respect to
the Data, and Licensee will have no remedies against Data Owner, except for (i)
any liability that Licensee incurs to a third party by reason of a claim against
Licensee by that third party because of a breach of Data Owner's warranties
under Section 6(a) with respect to the ownership of and the right to license the
Data, and (ii) the costs to defend any such claim (including, without
limitation, reasonable legal fees and disbursements, court costs and the cost of
appellate proceedings). Licensee will promptly notify Data Owner of any claim
that might result in liability by Data Owner under this Section 6(b) with the
details of the claim. Data Owner may elect to defend the claim, in which case
Data Owner will not be liable to Licensee for legal fees and disbursements after
Data Owner notifies Licensee that it will assume the defense. Licensee will not
settle any such claim without Data Owner's written consent unless Licensee
releases Data Owner from its obligations under this Section 6(b).
Under no circumstance will Data Owner be liable for any other damages of
the Licensee.
7. Confidentiality.
Licensee agrees that the terms of this Agreement (including any
Supplements) are confidential and may not be disclosed to any individual or
entity without the Data Owner's prior written consent, except (a) this Agreement
and its terms may be disclosed (1) to Licensee's employees as required in the
performance of their duties, (2) to outside auditors and counsel to the extent
necessary to perform their respective duties to the Licensee, and (3) as
required by law or by any governmental rule, regulation or order or by any
judicial order and (b) the terms of Section 3(d) may be disclosed to any
consultant used to interpret the Data as permitted by this Agreement.
In addition, the provisions of this Section will not apply to the recording
of any overriding royalty pursuant to any Supplement or to the disclosure that
Data Owner is entitled to an overriding royalty in the amount specified in that
Supplement.
8. Severability.
If any provision of this Agreement or the application of any such provision
to any person or circumstance is held invalid, the remainder of this Agreement,
and the application of such provision other than to the extent it is held
invalid, will not be invalidated or affected thereby.
9. Entire Agreement.
This Agreement contains the entire understanding of the parties with
respect to the subject matter of this Agreement, and it supersedes all prior
understandings and agreements, whether written or oral, and all prior dealings
of the parties with respect to the subject matter hereof.
10. Amendment.
This Agreement may be amended only by an instrument in writing signed by
the parties.
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11. Assignment.
Except as otherwise expressly provided in this Agreement, Licensee may not
transfer, assign, or grant a security interest in any of its rights or
obligations under this Agreement without the prior written consent of Data
Owner.
12. Notice.
Notices and other communications under this Agreement must be in writing
and sent to each party at its address or fax number set forth above or, in the
event of a change in any such address or fax number, then to such other address
or fax number as to which notice is given. Notice will be deemed given on
receipt thereof.
13. Governing Law.
This Agreement will be governed by and construed in accordance with the law
of the State of Texas.
14. Section Headings.
Section headings are for reference purposes only and will not in any way
affect the meaning or interpretation of any provision of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
FAIRFIELD INDUSTRIES INCORPORATED CHENIERE ENERGY INCORPORATED
SIGNATURE: /s/ Marc A. Lawrence SIGNATURE: /s/ Walter L. Williams
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NAME: MARC A. LAWRENCE NAME: WALTER L. WILLIAMS
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TITLE: SR. VICE PRESIDENT TITLE: VICE CHAIRMAN
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