MASTER LICENSE AGREEMENT FOR USE OF PROPRIETARY DATA
Exhibit
10.12
MASTER
LICENSE
AGREEMENT
FOR
USE OF PROPRIETARY DATA
This
Master License Agreement (the “Agreement”)
is
dated effective this the 15th
day of
June, 2005, between Millennium Seismic Ltd. with offices located at 0000,
000 -
0xx
Xxxxxx
X.X. Xxxxxxx, Xxxxxxx X0X 0X0 (hereinafter “Millennium”)
and
Elmworth Energy Corporation,1600, 000 - 0xx
Xxxxxx
X.X.., Xxxxxxx, Xxxxxxx X0X 0X0 (hereinafter “Licensee”).
WHEREAS,
Millennium owns or otherwise has the right to license to others the right
to use
certain geophysical data previously acquired or which is to be acquired by
or on
behalf of Millennium; and
WHEREAS,
Licensee has expressed an interest in obtaining a license to use certain
of the
data from Millennium and Millennium desires to license the use of such data
to
Licensee.
Accordingly,
Millennium does hereby grant to Licensee the non-exclusive right to use the
Data
in accordance with the terms and conditions set forth below:
1.
DEFINITIONS
1.1 “Consultants”
shall
mean a third party (whether individual, corporate or other entity) engaged
by
Licensee to interpret, reprocess or make other technical studies of the
Data.
1.2 “Data”
shall
mean the geophysical data within the geographical area described in the
applicable Supplemental Agreement attached hereto and made part hereof,
regardless of the form or medium on which it is displayed and which Millennium
either owns or will own or for which Millennium has or will have the right
to
grant use licenses. The data shall be delineated by line number and/or program
name and approximate mileage (or square mileage) and includes related supporting
documentation including survey data, surveyor's notes, driller's notes and
observer's notes.
1.3 “Disclose”
shall
mean to display or show the Data, by any means whatsoever including, without
limitation, by computer workstation.
1.4 “Partial
Third Party Asset Acquisition”
shall
mean any transaction or series of transactions entered into by Licensee whereby
any Third Party (other than a Related Entity) acquires all or any portion
of the
petroleum exploration assets, including owned or licensed geophysical data,
of
Licensee.
1.5 “Partners”
shall
mean those Third Parties which become contractually related to Licensee in
Third
Party Business Transactions (not necessarily “partners” in the legal
context).
1
1.6 “Prospective
Partners”
shall
mean those Third Parties with which Licensee is, or shall be, conducting
bona
fide negotiations in an endeavor to conclude a Third Party Business
Transaction.
1.7 “Prospective
Purchasers”
shall
mean those Third Parties with which Licensee is, or shall be conducting bona
fide negotiations in an endeavor to conclude a Third Party Acquisition or
a
Partial Third Party Asset Acquisition whereby the Licensee or all or a portion
of its petroleum exploration assets is acquired by a Third Party.
1.8 “Purchasers”
shall
mean Third Parties which consummate a Third Party Acquisition or a Partial
Third
Party Asset Acquisition with Licensee.
1.9 “Related
Entities”
shall
mean corporations, partnerships, trusts, or other entities which, as of the
date
of any Supplemental Agreement, are (i) at least 51% owned or controlled,
directly or indirectly, by Licensee or (ii) own or control at least 51%,
directly or indirectly, of Licensee as well as those which are at least 51%
owned or controlled, directly or indirectly, by the same entity which owns
or
controls Licensee as of the date of this License Agreement.
1.10 "Supplemental
Agreement" or "Supplement"
shall
mean those documents, numbered consecutively (Supplemental Agreement Xx.
0, Xx.
0, etc.) which shall cover each separate Data licensing transaction contemplated
herein. Each Supplement shall be incorporated herein by reference and made
a
part of this Agreement. In the event of any conflict between a term or provision
of any Supplement and a corresponding term or provision of this Agreement,
the
term or provision of this Agreement shall govern unless specifically stated
to
the contrary in the applicable Supplement.
1.11 “Third
Party”
shall
mean any corporation, individual, partnership, trust or other entity not
a party
to this Agreement (including Purchasers and Partners and Prospective Purchasers
and Partners) other than a Related Entity.
1.12 “Third
Party Acquisition”
shall
mean any transaction entered into by Licensee after the date hereof whereby
any
Third Party (other than a Related Entity) acquires (i) in excess of 50% of
the
outstanding voting securities or otherwise gains effective control of Licensee
or (ii) all of the petroleum exploration assets or business operations of
Licensee.
1.13 “Third
Party Business Transactions”
shall
mean farm-outs, operating agreements, acreage trades, areas of mutual interest,
joint bidding agreements and similar business transactions for the joint
exploration, development or production of a particular geographical
area(s).
1.14 “Transfer”
shall
mean the sale, assignment, transfer, exchange, trade, encumbrance, or other
disposition of the Data to Third Parties and Related Entities.
2.
OWNERSHIP
OF THE DATA
Licensee
acknowledges that the Data is a valuable copyright and trade secret of
Millennium and that title to and ownership rights in the Data at all times
shall
remain vested. Licensee agrees to take any and all action reasonably necessary
to insure that its employees, representatives or agents do not violate the
terms
and conditions of this Agreement including, but not limited to the limitations
on access to the Data set forth herein. Licensee recognizes that Millennium
may
enter into agreements with other parties to license the Data covered by a
Supplement hereto, and that Millennium is free to license, use, sell or in
any
other manner dispose of the Data upon such terms and conditions as Millennium
may elect.
2
3.
DATA
DELIVERY/PAYMENT
3.1 Data
delivered to Licensee under the terms of this Agreement shall be accompanied
by
a Supplemental Agreement which shall reference this Agreement and describe
in
detail the content and form of the Data, as well as the license fee payable
therefor. Acceptance of the Data and execution of the Supplement by the Licensee
shall subject Licensee and the Data to the terms and conditions hereof and
thereof.
3.2 Upon
the
execution of each Supplemental Agreement, Licensee will be invoiced for the
amount of the quoted license fee plus applicable, actual and reasonable,
tape
copying, handling, reproduction and splicing charges and shipping and insurance
costs and applicable taxes, if any. Such invoice, which shall reference this
Agreement and the applicable Supplemental Agreement, shall be payable as
specified therein.
3.3 All
past
due invoices (or portions thereof) shall bear interest at the rate of twelve
percent (12%) per annum (or such lesser, maximum amount allowed by applicable
law) until paid.
3.4 In
the
event any sales, use, gross receipts or similar tax is imposed on the licensing
of Data or is thereafter levied or assessed against Millennium as a consequence
of the licensing of Data by Millennium to Licensee hereunder, at any time
after
delivery of Data to Licensee, such taxes shall be for the sole account of
Licensee, which shall promptly reimburse Millennium in full for any taxes
so
paid by Millennium upon receipt by Licensee of a Millennium invoice, together
with a copy of Millennium’s check in payment thereof or a copy of the
assessment, therefor.
4.
TERM
4.1 As
for
Data delivered by Millennium to Licensee under the terms hereof, the term
of the
applicable Supplement shall terminate thirty (30) years after delivery of
such
Data to Licensee. The term of this Agreement shall remain in effect so long
as
any Supplement is in effect and thereafter until terminated by either party
giving thirty (30) days prior written notice thereof to the other party.
4.2 At
the
termination of each Supplement, all copies of the Data, and any physical
manifestation thereof which is then in the possession of Licensee shall be
promptly returned by Licensee to Millennium. In the event any such Data or
manifestations thereof are not then in the possession of Licensee, Licensee
shall provide to Millennium a full accounting of the disposition of same
by
Licensee.
4.3 In
the
event of the breach by Licensee of any condition or provision of this License
Agreement concerning prohibitions against or restrictions imposed on Disclosure
or Transfer of the Data, the applicable Supplemental Agreement thereupon
shall
terminate at the option of Millennium, exercisable in its sole discretion
and,
if such option is so exercised, the terms of paragraph 4.2 above shall
apply.
3
5.
RIGHTS
OF LICENSEE
5.1 Subject
to Licensee's obligation to make payment as specified in each Supplemental
Agreement, Millennium hereby grants to Licensee the paid-up, non-exclusive
right
to use the Data for internal purposes and Licensee shall not Disclose, Transfer
or otherwise dispose of the Data, except as specifically provided
below:
A. Related
Entities:
Licensee
may Disclose or Transfer the Data which is the subject of any Supplement
to a
Related Entity and with no additional license fee payable to Millennium;
provided, however, that:
(1) The
Related Entity shall be bound by the terms of this Agreement to the same
extent
as is Licensee and shall execute a document to that effect (which document
shall
be provided to and be reasonably acceptable to Millennium); and
(2) In
the
event that, after the date of any Supplemental Agreement, any Third Party
shall
acquire control of a Related Entity, the situation shall, at that time, be
considered as a Third Party Acquisition and all provisions herein concerning
Third Party Acquisitions set forth in Clause D. below shall apply.
B. Consultants:
Licensee
may make available, but may not Transfer, the Data to a Consultant retained
by
Licensee to reprocess and/or interpret the Data, provided that the Consultant
shall agree, in writing (a copy of which, upon request, will be provided
to
Millennium), to the following:
(1) That
the
reprocessing and/or interpretation of the Data performed by the Consultant
shall
be for the sole benefit of Licensee and that the Consultant shall not retain
any
copies of the Data or the results of the reprocessing and/or interpretation
thereof and, upon completion of same, shall deliver all copies thereof to
Licensee; and
(2) That
the
Data shall remain in the physical possession of Licensee and will not, except
in
those situations where so specifically permitted as provided herein, actually
be
surrendered to any Consultant without the prior written consent of Millennium;
and
(3) The
Consultant shall sign a confidentiality agreement with respect to the
Data.
C. Prospective
Partners/Purchasers:
Licensee
may Disclose, but may not Transfer, the Data to (i) Prospective Partners
in
Third Party Business Transactions now or hereafter in negotiation and (ii)
Prospective Purchasers in Third Party Acquisitions (including Partial Third
Party Asset Acquisition) now or hereafter in negotiation, provided that all
parties shall agree, in writing, to the following:
4
(1) Any
Disclosure to a Prospective Purchaser or Partner shall be limited to seismic
sections or portions thereof displaying only Data relevant to those geographical
areas subject to the negotiation; and
(2) Prospective
Purchasers or Partners shall not utilize the Data in making any interpretation
thereof; and
(3) The
Prospective Purchasers or Partners shall agree to maintain the confidentiality
of the Data as specified herein; and
(4) Such
Disclosure shall be made to such Prospective Purchasers or Partners individually
on the premises of Licensee, for a period of time not to exceed a total of
six
(6) hours, whether consecutively or not, in a secure environment whereby
said
Prospective Purchasers or Partners are unable to transcribe, photocopy, transmit
from such premises electronically or by other means or otherwise depart
Licensee’s premises with knowledge of the Data comparable to having a copy of
the Data.
D. Acquisitions/Purchasers:
Licensee
may Transfer the Data to Purchasers in Third Party Acquisitions or a Partial
Third Party Asset Acquisition consummated after delivery of the Data to Licensee
and provided that such Purchaser(s) shall (i) execute a Master License Agreement
with substantive terms as contained herein with respect to such Data and
(ii)
pay to Millennium a license transfer fee in an amount to be mutually agreed
upon.
E. Partners:
Licensee
may Transfer the Data to Partners in Third Party Business Transactions
consummated before or after delivery of the Data to Licensee provided that
such
Partner(s) shall (i) execute a Master License Agreement with substantive
terms
as contained herein with respect to such Data and (ii) pay to Millennium
a
license transfer fee in an amount equal to 50% of that paid or payable by
Licensee with respect to all such Data.
F. Government
Agencies:
The
Data may be disclosed by Licensee to government agencies only to the extent
such
disclosure is specifically required by law. Licensee agrees to immediately
inform Millennium upon the receipt of any request or demand for disclosure
made
upon Licensee by a government agency so that Millennium may seek a protective
order or other protection of confidentiality. Licensee shall limit the
disclosure to the greatest lawful extent.
5.2 Licensee
may make copies of any Data for the sole purpose of using such copies pursuant
to the rights granted herein; provided that all such copies shall bear notice
of
the restricted use of the Data as contained in the “Notice” section on the Data
or its container. Such “Notice” shall provide as follows:
“WARNING
This
data
is proprietary to and a trade secret of Millennium Seismic, Inc. The use
of this
data is restricted to companies holding a valid use license from Millennium
and
is subject to the confidentiality terms of that license. The data may be
disclosed or transferred only as expressly authorized in the license.
Unauthorized disclosure, use, reproduction, reprocessing or transfer of this
data to or by a third party is strictly prohibited.”
This
notice shall not be removed, obliterated, concealed or otherwise obscured
by
Licensee or those to whom the Data is Disclosed or Transferred, as permitted
in
this Agreement.
5
5.3 Licensee
shall not have access to Millennium’s original magnetic media, but may obtain a
copy of the original at the normal pricing in effect at the time Data is
ordered
by Licensee hereunder. Licensee’s use of the tape(s) so obtained and the
information contained on or derived from the tapes shall be restricted to
the
same rights as herein granted for the use of Data covered by this
Agreement.
6.
OBLIGATIONS/REPRESENTATIONS
OF MILLENNIUM
6.1 THE
DATA
DELIVERED TO LICENSEE HEREUNDER SHALL BE, TO THE BEST OF THE KNOWLEDGE,
INFORMATION AND BELIEF OF MILLENNIUM, ACCURATELY PREPARED IN ACCORDANCE WITH
ACCEPTED PRACTICES OF THE GEOPHYSICAL PROFESSION, BUT LICENSEE ACKNOWLEDGES
IT
IS ACCEPTING THE DATA “AS IS” AND MILLENNIUM MAKES NO REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND OR DESCRIPTION IN RESPECT TO THE
QUALITY OR ACCURACY OF THE DATA. SUCH DATA IS DELIVERED HEREUNDER WITH THE
EXPLICIT UNDERSTANDING AND AGREEMENT THAT ANY ACTION TAKEN OR EXPENDITURES
MADE
BY LICENSEE BASED ON ITS EXAMINATION, EVALUATION, INTERPRETATION OR USE OF
THE
DATA SHALL BE AT ITS OWN RISK AND RESPONSIBILITY AND LICENSEE SHALL HAVE
NO
CLAIM AGAINST MILLENNIUM AS A CONSEQUENCE THEREOF AND HEREBY RELEASES MILLENNIUM
FROM ANY AND ALL LIABILITY RELATIVE THERETO. IN THE EVENT THE DATA HAS YET
TO BE
RECORDED, MILLENNIUM REPRESENTS ONLY THAT IT WILL BE RECORDED BY THE USE
OF SUCH
INSTRUMENTATION, EQUIPMENT AND FIELD TECHNIQUES AS ARE CURRENTLY IN COMMON
USE
IN THE INDUSTRY.
6.2 Millennium
agrees to defend and hold Licensee harmless from any claims brought against
it
or Licensee by any Third Party (other than Licensee or a Related Entity)
claiming infringement of a patent by Millennium in its performance of its
obligations hereunder, and all liabilities arising therefrom, provided Licensee
notifies Millennium promptly in writing of any such infringement claims against
it and gives Millennium authority, information and assistance, at the expense
of
Millennium, in defense of such proceeding. Licensee may, at its sole cost,
be
represented by its own counsel, and may participate in any proceeding to
which
it and Millennium are defendants, provided, however, Millennium shall control
the defense thereof.
6.3 Millennium
will defend and hold Licensee harmless from any claims which may be made
against
Licensee by any Third Party (other than a Related Entity) or employees of
Millennium growing out of or related to the conduct of Millennium or its
operations in acquiring and processing the Data licensed to Licensee pursuant
hereto, provided Licensee notifies Millennium promptly in writing of any
such
claims against it and give Millennium authority, information and assistance
(at
Millennium’s expense) for the defense or assistance in defense of such
proceedings. Such defense will be provided by Millennium with counsel of
its
choosing; however, notwithstanding the foregoing, Licensee may, at its option
and its sole cost, be represented by counsel of its choosing, and participate
in
proceedings to which it and Millennium are defendants, provided, however,
Millennium shall control the defense thereof.
6.4 Millennium
makes no guarantee that leases for areas covered by the Data will be granted
to
Licensee or other exploration activity will be authorized for the area covered
by the Data by any government entity or other third party and any implied
representation to that effect is hereby expressly negated.
6
6.5 Notwithstanding
anything to the contrary contained hereinabove, in no event shall either
party
be liable for punitive, indirect, incidental or consequential damages resulting
from or arising out of this Agreement, including, without limitation, loss
of
profit or business interruption, however same may be caused.
6.6 Millennium
shall retain either original field tapes or summed tapes, at Millennium’s
choice, for a period of at least five (5) years from the date of the original
acquisition of the Data.
7.
DATA
ACQUISITION
7.1 In
the
event the Data has yet to be acquired, the following will apply:
7.1.1 The
Data
will be gathered and processed by Millennium and/or other reputable geophysical
contractors (and reputable sub-contractors) selected at Millennium's discretion,
under the direction of Millennium, using personnel, instrumentation, parameters
and techniques as set forth in the Millennium proposal regarding the acquisition
and processing of such Data. The standards of the industry will be followed
regarding testing and calibration of instruments for accuracy and performance
specifications.
7.1.2 Millennium
agrees to use its best efforts in locating the geophysical Data as indicated
on
the specific map attached to each Supplemental Agreement for any particular
line
or program. However, Millennium reserves the right to make program changes,
as
deemed necessary by Millennium, due to permit, terrain or other considerations
which may arise during field or processing operations.
7.1.3 If
Licensee is an original underwriter of the Data acquisition and/or processing,
further provisions, if any, concerning the obligations of the respective
parties
will be set forth in a separate definitive agreement covering such
matters.
8.
ASSIGNMENT
Neither
party may assign this Agreement, in whole or in part, or, sublet or transfer
its
rights or obligations hereunder, except as expressly authorized hereinabove,
without the prior written approval of the other party which approval shall
not
be reasonably withheld.
9.
NOTICES
9.1 All
notices permitted or required to be given under the terms of this Agreement
shall be in writing and shall be deemed effective upon receipt if sent by
air
mail, registered or certified and return receipt requested, post prepaid,
and
addressed to the respective parties hereto at their respective addresses
shown
below:
| Millennium | Licensee |
| Millennium Seismic Ltd. | Elmworth Energy Corporation |
| 1670, 000 - 0xx Xxxxxx X.X. | 1600, 144 - 4th Avenue S.W. |
| Calgary, Alberta T2P 2W1 | Xxxxxxx, Xxxxxxx X0X 0X0 |
| Attention: Xxx Xxxxxxxxx | Attention: |
| Telephone: 000-000-0000 | Telephone: (000) 000-0000 (ext 222) |
| Fax: 000-000-0000 | Fax: |
7
or
at
such other address as shall be designated in accordance with this Notice
provision. Notices may also be given by telex, telecopier, telefax, e-mail
or
other electronic means or by commercial courier/messenger service shall also
be
effective upon receipt.
9.2 Either
party may change its address for notices purposes at any time upon giving
written notice specifying such new address and the effective date of such
address change to the other party, as provided above.
10.
WAIVER
10.1 The
rights herein given to either party hereto may be exercised from time to
time,
singularly or in combination, and the waiver of one or more of such rights
shall
not be deemed to be a waiver of such right in the future or of any one or
more
of the other rights which the exercising party may have.
10.2 No
waiver
of any breach of a term, provision or condition of this Agreement by one
party
shall be deemed to have been made by the other party hereto unless such waiver
is expressed in writing and signed by an authorized representative of such
party, and the failure of either party to insist upon the strict performance
of
any term, provision or condition of this Agreement shall not be construed
as a
waiver or relinquishment in the future of the same or any other term, provision
or condition.
11.
GOVERNING
LAW/DISPUTES
11.1 All
questions arising out of or concerning this Agreement or its validity,
interpretation, performance or breach shall be governed and decided by
application of the appropriate laws (except for any rule of such laws which
would make the law of any other jurisdiction applicable hereto) of the Province
of Alberta.
11.2 The
parties agree to attempt to resolve all disputes between them concerning
this
Agreement in an amicable manner. However, any dispute between the parties
which
cannot be so resolved by mutual agreement shall be resolved and decided by
the
federal or Provincial courts of the Province of Alberta and the parties hereto
do hereby irrevocably submit themselves to the jurisdiction of such courts
for
such purposes.
8
12.
ENTIRE
AGREEMENT
There
are
no understandings or agreements relative to this Agreement that are not fully
expressed herein. This Master License Agreement, all Supplemental Agreements
hereto and any Exhibits and Schedules to either shall comprise the entire
agreement of the parties concerning the subject matter hereof. No modification,
amendment or addition to this Agreement or any Supplement may be effected
unless
the same are reduced to writing and signed by both parties.
IN
WITNESS WHEREOF,
the
parties have caused this Master License Agreement to be executed as of the
date
first above written.
| Licensee: | Millennium: |
| Elmworth Energy Corporation | Millennium Seismic Ltd. |
| 1600, 000 - 0xx Xxxxxx X.X. | 1670, 700 - 2nd Street S.W. |
| Calgary AB T2P 3N4 | Xxxxxxx XX X0X 0X0 |
| Attention: Xxx Xxxxxxx | Attention: Xxx Xxxxxxxxx |
| Telephone: (000) 000-0000 (ext 222) | Telephone: 000-000-0000 |
| Fax: | Fax: 000-000-0000 |
| By: /s/ XXX XXXXXXX | By: /s/ XXX XXXXXXXXX |
|
Xxx
Xxxxxxx, President
|
Xxx
Xxxxxxxxx, President
|
| Date: _______________________________ | Date: _______________________________ |
9
