Exhibit 10.2
SERVICES AND SECONDMENT
AGREEMENT
This Services and Secondment
Agreement (“Agreement”), dated as of March 26,
2007 (the “Effective Date”), is entered into between
CHENIERE LNG O&M SERVICES, L.P. (“O&M”), a
Delaware limited partnership, and CHENIERE ENERGY PARTNERS GP, LLC
(“MLP GP”), a Delaware limited liability company.
O&M and MLP GP are hereinafter each referred to as a
“Party” and collectively referred to as the
“Parties.”
RECITALS:
WHEREAS, Sabine Pass LNG, L.P., a
Delaware limited partnership (“Sabine Pass LNG”), is
developing a liquefied natural gas receiving terminal in Cameron
Parish, Louisiana (the “Project”);
WHEREAS, O&M and Sabine Pass LNG
are parties to an Operation and Maintenance Agreement dated as of
February 25, 2005 (the “O&M Agreement”) with
respect to the operation and maintenance of the Project;
WHEREAS, as of March 26, 2007,
O&M assigned to MLP GP and MLP GP assumed from O&M all of
O&M’s obligations under the O&M Agreement;
WHEREAS, O&M will provide to MLP
GP the operational and maintenance resources and services necessary
for MLP GP to meet its obligations under the O&M
Agreement;
WHEREAS, in connection with the
provision of the operational and maintenance resources and services
under this Agreement, O&M desires to second, or cause its
Affiliate to second, to MLP GP certain personnel employed by
O&M or its Affiliates in connection with the
Project.
NOW THEREFORE, in consideration of
the premises and the mutual covenants and agreements contained
herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, O&M and MLP GP
hereby agree as follows:
ARTICLE 1
DEFINITIONS; INTERPRETATION; USE
OF SECONDING AFFILIATES
As used in this Agreement,
(a) the terms defined in this Agreement will have the meanings
so specified, and (b) capitalized terms not defined in this
Agreement will have the meanings ascribed to those terms on
Exhibit A to this Agreement.
In this Agreement, unless a clear
contrary intention appears: (a) the singular includes the
plural and vice versa; (b) reference to any Person includes
such Person’s successors and assigns but, in the case of any
Party, only if such successors and assigns are permitted by this
Agreement, and reference to a Person in a particular capacity
excludes such Person in any other capacity; (c) reference to
any gender includes each other gender; (d) reference to any
agreement (including this Agreement), document or instrument means
such agreement, document or instrument as amended or modified and
in effect from time to time in accordance with the terms thereof
and, if applicable, the terms of this Agreement; (e) reference
to any Section means such Section of this Agreement, and references
in any Section or definition to any clause means such clause of
such Section or definition; (f) “hereunder,”
“hereof,” “hereto” and words of similar
import will be deemed references to this Agreement as a whole and
not to any particular Section or other provision hereof or thereof;
(g) “including” (and with correlative meaning
“include”) means including without limiting the
generality of any description preceding such term; and
(h) relative to the determination of any period of time,
“from” means “from and including,”
“to” means “to but excluding” and
“through” means “through and
including.”
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1.3
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Legal
Representation of Parties .
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This Agreement was negotiated by the
Parties with the benefit of legal representation, and any rule of
construction or interpretation requiring this Agreement to be
construed or interpreted against any Party merely because such
Party drafted all or a part of such Agreement will not apply to any
construction or interpretation hereof or thereof.
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1.4
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Titles and
Headings .
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Section titles and headings in this
Agreement are inserted for convenience of reference only and are
not intended to be a part of, or to affect the meaning or
interpretation of, this Agreement.
ARTICLE 2
OPERATIONAL AND MAINTENANCE
SERVICES
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2.1
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Operational
and Maintenance Services .
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O&M shall second, or cause its
applicable seconding Affiliate to second, the Provided Personnel to
MLP GP to provide the Services.
Each month, MLP GP will pay to
O&M, within a reasonable time following receipt thereof, all
payments that MLP GP receives from Sabine Pass LNG pursuant to
Articles VIII and IX of the O&M Agreement less any costs
incurred by MLP GP in hiring personnel provided by a third party to
provide Services pursuant to Section 3.6
hereof.
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2.2
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Suspension
of Services .
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In the event MLP GP fails to meet
its payment obligations under Section 2.2 hereof for
any reason other than a good faith Dispute and such failure
continues for 30 days after MLP GP’s receipt of written
notice of such failure, O&M may suspend the performance of its
obligations under Section 2.1 hereof until such time as
MLP GP cures such failure.
ARTICLE 3
SECONDMENT
Subject to the terms of this
Agreement, O&M agrees to second to MLP GP, and MLP GP agrees to
accept the Secondment of, those certain specifically identified
individuals listed in Exhibit B (the “Provided
Personnel Schedule”) for the purpose of performing job
functions related to the Project. The Provided Personnel will be
temporary employees of MLP GP during the Period of Secondment and
shall, at all times during the Period of Secondment, work under the
direction, supervision and control of MLP GP. Provided Personnel
shall have no authority or apparent authority to act on behalf of
O&M during the Period of Secondment. The Provided Personnel
Schedule sets forth the names of the Provided Personnel seconded by
O&M, the job functions of the Provided Personnel, and the
starting and ending dates for the Period of Secondment of the
Provided Personnel. Individuals may be added or removed from the
Provided Personnel Schedule from time to time by the execution by
the Parties of a completed “Addition/Removal/Change of
Responsibility of Provided Personnel” form, the form of which
shall be similar to the form attached to this Agreement as
Exhibit C , which will be fully binding on the Parties for
all purposes under this Agreement. Those rights and obligations of
the Parties under this Agreement that relate to individuals that
were on the Provided Personnel Schedule but then later removed from
the Provided Personnel Schedule, which rights and obligations
accrued before the removal of such individual, will survive the
removal of such individual from the Provided Personnel Schedule to
the extent necessary to enforce such rights and
obligations.
2
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3.2
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Period of
Secondment .
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O&M will second, or cause its
applicable seconding Affiliate to second, to MLP GP such Provided
Personnel on the start date set forth on the Provided Personnel
Schedule and continuing, during the period (and only during the
period) that the Provided Personnel are performing Services for MLP
GP, until the earlier of:
(a) the end of the term of this
Agreement;
(b) the end date set forth for the
Provided Personnel on the Provided Personnel Schedule (or another
end date for such Provided Personnel as mutually agreed in writing
by the Parties) (the “End Date”);
(c) a withdrawal, departure,
resignation or termination of such Provided Personnel under
Section 3.3 ; or
(d) a termination of Secondment of
such Provided Personnel under Section 3.4 .
The period of time that any Provided
Personnel is provided by O&M to MLP GP is referred to in this
Agreement as the “Period of Secondment.” At the end of
the Period of Secondment for any Provided Personnel, such Provided
Personnel will no longer be subject to the direction by MLP GP of
the Provided Personnel’s day-to-day activities. The Parties
acknowledge that certain of the Provided Personnel may also provide
services to Cheniere Energy, Inc. and its Affiliates in connection
with their respective operations, including other services provided
to MLP GP and its Affiliates (“Shared Provided
Personnel”), and the Parties intend that such Shared Provided
Personnel shall only be seconded to MLP GP during those times that
the Shared Provided Personnel are performing Services for MLP GP
hereunder.
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3.3
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Withdrawal,
Departure or Resignation .
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O&M will use reasonable efforts
to prevent any early withdrawal, departure or resignation of any
Provided Personnel prior to the End Date for such Provided
Personnel’s Period of Secondment. If any Provided Personnel
tenders his resignation to O&M as its employee, O&M will
promptly notify MLP GP. During the Period of Secondment of any
Provided Personnel, O&M will not voluntarily withdraw or
terminate any Provided Personnel except with the written consent of
MLP GP (which may be through the execution of a completed
“Addition/Removal/Change of Responsibility of Provided
Personnel” form, which shall be similar to the form set forth
on Exhibit C hereto), such consent not to be unreasonably
withheld. O&M will indemnify, defend and hold harmless MLP GP,
its directors, officers and employees against all Losses arising
out of or in any way connected with or related to the termination
of employment of the Provided Personnel by O&M EVEN THOUGH SUCH
LOSS MAY BE CAUSED BY THE NEGLIGENCE OF ONE OR MORE OF MLP GP AND
ITS DIRECTORS, OFFICERS AND EMPLOYEES, except to the extent that
such Losses arise out of or result from the sole negligence, gross
negligence or willful misconduct of any of MLP GP or its directors,
officers or employees. Upon the termination of employment, the
Provided Personnel will cease performing Services for MLP
GP.
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3.4
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Termination
of Secondment .
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MLP GP will have the right to
terminate the Secondment to MLP GP of any Provided Personnel for
any reason at any time. Upon the termination of any Provided
Personnel’s Period of Secondment, O&M will be solely
liable for any costs or expenses associated with the termination of
the Secondment, except as otherwise specifically set forth in this
Agreement. O&M will indemnify, defend and hold harmless MLP GP,
its directors, officers and employees against all Losses arising
out of or in any way connected with the termination of Secondment
of the Provided Personnel by O&M EVEN THOUGH SUCH LOSS MAY BE
CAUSED BY THE NEGLIGENCE OF ONE OR MORE OF MLP GP AND ITS
DIRECTORS, OFFICERS AND EMPLOYEES, except to the extent that such
Losses arise out of or result from the sole negligence, gross
negligence or willful misconduct of any of MLP GP or its directors,
officers or employees. Upon the termination of a Secondment, the
Provided Personnel will cease performing Services for MLP
GP.
3
During the Period of Secondment, MLP
GP shall:
(a) be ultimately and fully
responsible for the daily work assignments of the Provided
Personnel (and with respect to Shared Provided Personnel, during
those times that the Shared Provided Personnel are performing
Services for MLP GP hereunder), including supervision of their the
day-to-day work activities and performance consistent with the
purposes stated in Section 3.1 and the job functions
set forth in the Provided Personnel Schedule;
(b) set the hours of work and the
holidays and vacation schedules (other than with respect to Shared
Provided Personnel, as to which MLP GP and O&M shall jointly
determine) for Provided Personnel; and
(c) have the right to determine
training which will be received by the Provided
Personnel.
In the course and scope of
performing any Provided Personnel job functions, the Provided
Personnel will be integrated into the organization of MLP GP, will
report into MLP GP’s management structure, and will be under
the direct management and supervision of MLP GP employees or
Provided Personnel designated by MLP GP to be responsible for the
supervisory functions set forth in this Section 3.5 on
behalf of MLP GP.
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3.6
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Provided
Personnel Qualifications; Approval .
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O&M will provide such suitably
qualified and experienced Provided Personnel as O&M is able to
make available to MLP GP, and MLP GP will have the right to approve
such Provided Personnel. In the event that O&M is unable to
provide suitably qualified and experienced personnel, MLP GP may
hire personnel provided by a third party to provide
Services.
ARTICLE 4
TERM
The term of this Agreement will
commence on the Effective Date and, unless sooner terminated as
provided herein, will continue for the Initial Term and each
Extension Term of the O&M Agreement until the O&M Agreement
is terminated pursuant to the terms thereof. MLP GP shall have the
right to terminate this Agreement for convenience by giving O&M
30 days’ prior written notice of such termination.
ARTICLE 5
INDEMNIFICATION
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5.1
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Loss or
Damage to the Facility .
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O&M shall be responsible for any
physical loss or damage to the Facility resulting from
O&M’s gross negligence or willful misconduct in the
course of the performance of its obligations under this Agreement,
in an amount not to exceed the greater of (i) the applicable
deductible under MLP GP’s or its Affiliates’ physical
damage insurance policies that covers such loss or damage or
(ii) $400,000 for any such loss or damage caused during a
given calendar year.
O&M
SHALL DEFEND , INDEMNIFY AND HOLD HARMLESS THE MLP GP G ROUP FROM AND AGAINST ALL DAMAGES , LOSSES , COSTS AND EXPENSES ( INCLUDING ALL REASONABLE ATTORNEYS ’ FEES , AND LITIGATION OR ARBITRATION EXPENSES ) ARISING OUT OF OR RESULTING FROM OR RELATED TO ( I ) INJURY TO OR DEATH OF ANY MEMBER OF THE O&M G ROUP OR ( II ) DAMAGE TO OR DESTRUCTION OF PROPERTY OF ANY MEMBER OF THE O&M G ROUP OCCURRING IN CONNECTION WITH THE SERVICES , REGARDLESS OF THE CAUSE OF SUCH INJURY , DEATH , PHYSICAL DAMAGE OR DESTRUCTION , INCLUDING THE SOLE OR JOINT NEGLIGENCE , BREACH OF CONTRACT OR OTHER BASIS OF LIABILITY OF ANY MEMBER OF THE MLP GP G ROUP .
4
O&M shall indemnify, defend, and hold
harmless the MLP GP Group against any and all losses of whatever
kind and nature, including all related costs and expenses incurred
in connection therewith, in respect of personal injury to or death
of third parties and in respect of loss of or damage to any third
party property to the extent that the same arises out
of:
(a) any breach by O&M of its
obligations hereunder;
(b) any negligent act or omission on
the part of O&M; and
(c) any gross negligence or willful
misconduct of O&M.
Any indemnification payable by
O&M to MLP GP hereunder shall be net of any insurance proceeds
received by MLP GP under MLP GP’s, O&M’s or any of
their respective Affiliates’ insurance policies with respect
to the circumstances giving rise to O&M’s indemnification
of MLP GP hereunder, and shall be subject to the limitation set
forth in Section 6.1 .
MLP GP SHALL DEFEND , INDEMNIFY AND HOLD HARMLESS THE O&M G ROUP FROM AND AGAINST ALL DAMAGES , LOSSES , COSTS AND EXPENSES ( INCLUDING ALL REASONABLE ATTORNEYS ’ FEES , AND LITIGATION OR ARBITRATION EXPENSES ) ARISING OUT OF OR RESULTING FROM OR RELATED TO ( I ) INJURY TO OR DEATH OF ANY MEMBER OF THE MLP GP G ROUP OR ( II ) DAMAGE TO OR DESTRUCTION OF PROPERTY OF MLP GP G ROUP ( EXCLUDING THE FACILITY ) OCCURRING IN CONNECTION WITH THE SERVICES , REGARDLESS OF THE CAUSE OF SUCH INJURY , DEATH , PHYSICAL DAMAGE OR DESTRUCTION , INCLUDING THE SOLE OR JOINT NEGLIGENCE , BREACH OF CONTRACT OR OTHER BASIS OF LIABILITY OF ANY MEMBER OF THE O&M G ROUP .
MLP GP shall indemnify, defend, and
hold harmless O&M against any and all claims for Losses of
whatever kind and nature, including all related costs and expenses
incurred in connection therewith, in respect of personal injury to
or death of third parties and in respect of loss of or damage to
any third party property to the extent that the same arises out
of:
(a) any breach by MLP GP of its
obligations hereunder;
(b) any negligent act or omission on
the part of MLP GP; and
(c) any gross negligence or willful
misconduct of MLP GP.
Any indemnification payable by MLP
GP to O&M hereunder shall be net of any insurance proceeds
received by O&M under O&M’s, MLP GP’s or any of
their respective Affiliates’ insurance policies with respect
to the circumstances giving rise to MLP GP’s indemnification
of O&M hereunder.
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5.4
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Other
Indemnity Rules .
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If any Losses arise, directly or
indirectly, in whole or in part, out of the joint or concurrent
negligence of both Parties, each Party’s liability therefor
shall be limited to such Party’s proportionate degree of
fault. Payments required to be paid by O&M to MLP GP under this
Article 5 shall not constitute an Operating Expense or
otherwise be reimbursable to O&M from MLP GP, and shall be
subject to the limitation set forth in Section 6.1
.
ARTICLE 6
LIMITATION OF
LIABILITY
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6.1
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Limitation
of Liability .
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The aggregate amount of damages,
compensation, or other such liabilities (other than with respect to
the indem