Exhibit 10.1
Non-Exclusive Technology Agreement by and between U.S. Gold
Corporation and Newmont USA, d/b/a Newmont Mining Corporation
dated May 31, 2002
NON-EXCLUSIVE TECHNOLOGY LICENSE AGREEMENT
Preamble
This is an agreement (the "Agreement") between U.S. Gold
Corporation, a Colorado corporation having a business address
at 0000 Xxxxxxx Xx., Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000-0000
("USGC") and Newmont USA Limited, d/b/a Newmont Mining
Corporation, a Delaware Corporation having a business address
at 0000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000
("NMC"). This Agreement is to be effective as of complete
execution by both parties of the signature blocks provided
below ("Effective Date").
Recitals
A. USGC is the owner, through wholly-owned subsidiaries, of
mining claims located in Eureka County, Nevada, U.S.A.,
referred to as the Tonkin Springs Property, which contains
refractory sulfide gold ores that would be desirable to
concentrate following mining.
B. NMC has technology, and patents relating to the technology,
concerning preparation of flotation concentrates of
refractory sulfide gold ores using an oxygen-deficient gas
during comminution and/or flotation, known as the N2TEC
technology, and USGC desires to obtain a license to the
N2TEC technology for use to prepare flotation concentrates
of refractory sulfide gold ore mined from the Tonkin Springs
Property.
C. Newmont Technologies Limited ("NTL"), a wholly-owned
subsidiary of NMC, and USGC entered into an agreement titled
Technology Option Agreement on December 18, 2001 ("Option
Agreement"), under which USGC obtained an option to enter
into good faith negotiations with NTL to pursue agreement
on definitive terms for a non-exclusive license for use of
the N2TEC technology at the Tonkin Springs Property.
D. Pursuant to the Option Agreement, NMC, on behalf of NTL,
and USGC have agreed to definitive terms for a non-
exclusive technology license as set forth in this Agreement.
Agreement
In consideration of the mutual covenants and conditions set
forth herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged,
the parties agree to the terms and conditions set forth
below:
1. DEFINITIONS. For purposes of this Agreement and all
exhibits hereto, the following terms shall have the meanings
set forth below:
"Affiliate" of a party means (a) any Person directly or
indirectly owning, controlling, or holding with power to
vote, fifty percent (50%) or more of the outstanding voting
securities, membership interests, partnership interests or
other equity interests of a party; and (b) any Entity fifty
percent (50%) or more of whose outstanding voting securities,
membership interests, partnership interests or other equity
interests are directly or indirectly owned, controlled, or
held with power to vote by the party or a Person described
in (a). For purposes of the preceding sentence, "control"
means possession, directly or indirectly, of the power to
direct or cause direction of management and policies through
ownership of voting securities, contract, voting trust, or
otherwise.
"Aggrieved Party" is defined in section 9.2.
"Agreement" is defined in the preamble of this Agreement.
"Allowable Deductions" means costs incurred by a USGC Party
permitted as deductions in determining NSR, as provided in
Exhibit B.
"Breaching Party" is defined in section 9.2.
"Effective Date" is defined in the preamble of this
Agreement.
"Entity" means any Person other than a natural person.
"Facility" means a single flotation processing facility
located in Nevada, U.S.A., and processing ores mined only
from the Tonkin Springs Property.
"Improvement" means any development, enhancement,
modification or adaptation to or of any portion of the
NMC Flotation Technology conceived or first reduced to
practice during the term of this Agreement. USGC shall
ensure that appropriate agreements are put in place to
assign to USGC all right, title and interest in and to any
and all Improvements, or any portion thereof, made by any
and all employees of USGC, Affiliates of USGC, the Operator
and contractors and consultants while involved with any
portion of design (including any laboratory testing),
engineering, construction, start-up, maintenance or
operation of the Facility or the flotation process used at
the Facility.
"Indemnitee" is defined in section 7.3.
"Licensed Field" means processing at the Facility Precious
Metal Ores mined from the Tonkin Springs Property to
prepare Licensed Concentrate.
"Licensed Concentrate" means flotation concentrate prepared
with use of the NMC Flotation Technology from Precious Metal
Ore and that has a higher Precious Metal grade than the
Precious Metal Ore. All flotation concentrate prepared at
the Facility during the term of this Agreement shall be
deemed to be produced with use of the NMC Flotation
Technology if preparation of the flotation concentrate
involves use of a nitrogen-enriched or other oxygen-deficient
gas (oxygen-deficient as compared to air) as a flotation gas
during flotation and/or to blanket any process equipment
prior to or during flotation.
"Licensed Dore" means dore or other similar crude metallic
product prepared by a USGC Party from processing of Licensed
Concentrate.
"NMC" is defined in the Preamble of this Agreement.
"NMC Confidential Information" means all technical,
financial and business information relating to the NMC
Flotation Technology disclosed to or otherwise made
available by NMC, or by any Affiliate of NMC or any Third
Party as permitted by NMC, to USGC, any Affiliate of USGC,
the Operator or any Third Party for the benefit of USGC
(including any consultants and contractors involved with
any portion of design, engineering, construction, start-up,
maintenance or operation of the Facility during the term
of this Agreement).
"NMC Flotation Technology" means any and all information,
technology, know-how, trade secrets and software, including
any Improvements, owned or controlled by NMC concerning the
use of nitrogen or other oxygen-deficient gas in flotation
of gold-bearing sulfide minerals, including the use of such
nitrogen or other oxygen-deficient gas during preparation
(e.g., grinding, milling, conditioning) of a slurry of
particulate mineral feed for the flotation. As used in
this definition "controlled" means that NMC has an
independent legal right to grant, or to compel a wholly-
owned Affiliate of NMC to grant, a nonexclusive license to
USGC of a scope as provided in section 2.1 to the
information, technology, know-how, trade secrets or software,
as the case may be, without a royalty or other fee being due
by NMC or any Affiliate of NMC in relation to the grant.
"NMC Patents" means each and every United States patent
and United States patent application now or hereafter owned
or controlled during the term of this Agreement by NMC
claiming any portion of the NMC Technology. Existing NMC
patents are listed in Exhibit A. As used in this definition,
"controlled" means that NMC has the legal right to grant, or
to compel a wholly-owned Affiliate of NMC to grant, non-
exclusive rights to the full extent of the patent or patent
application, as the case may be, to USGC without a royalty or
other fee being due by NMC or any Affiliate of NMC in relation
to the grant.
"NSR" means net smelter returns, determined as set forth in
Exhibit B.
"NTL" is defined in the recitals of this Agreement.
"Operator" means, in the event that USGC does not itself
operate the Facility, a Person authorized, directly or
indirectly, by USGC to operate the Facility. The Operator may
be an Affiliate of USGC or a Third Party. At any given time,
there shall be no more than one Operator.
"Option Agreement" is defined in the recitals of this
Agreement.
"Option Fee" means the sum of $US10,000 (ten thousand
United States dollars) paid by USGC to NMC pursuant to The
Option Agreement.
"Person" means a natural person, corporation, joint venture,
partnership, limited partnership, limited liability company,
trust, estate, business trust, association, governmental
authority, or any other entity.
"Precious Metal" means gold and silver.
"Precious Metal Ore" means an ore in which Precious Metal
represents the primary metal value in the ore.
"Third Party" means any Person other than NMC, Affiliates of
NMC, USGC and Affiliates of USGC.
"Third Party Infringement Claim" means a legal claim for
patent infringement based on use during the term of this
Agreement of the NMC Flotation Technology at the Facility
within the scope of the right and license of section 2.1
asserted by a Third Party against a USGC Party, with the
legal claim premised on infringement of a U.S. patent claim
reciting a combination of the use of nitrogen flotation gas,
lead-containing activator and xanthate collector for
flotation processing of refractory sulfide gold ores. For
purposes of this definition, a legal claim is "asserted" by
a Third Party against a USGC Party when a legal action has
been filed in a U.S. court of competent jurisdiction and the
USGC Party has been named as a defendant in the action and
has been served with the complaint. It is not intended that
any patent infringement claim that might be brought based on
equipment at or operation of the Facility will constitute a
Third Party Infringement Claim; rather, it is intended that
only legal claims to infringement of a patent claim
specifically reciting the noted combination of processing
features shall be within the scope of Third Party
Infringement Claim.
"Tonkin Springs Property" means the mining claims located
along the Battle Mountain-Xxxxxx Trend in Eureka County,
Nevada, U.S.A., that are owned or controlled, directly or
indirectly, by USGC as of the Effective Date. USGC
represents that all mining claims within the scope of the
Tonkin Springs Property are as shown in Exhibit D.
"USGC" is defined in the Preamble of this Agreement.
"USGC Party" means each of USGC, an Affiliate of USGC
and an Operator.
2. LICENSE GRANT/FREEDOM FROM LIABILITY FOR PATENT
INFRINGEMENT.
2.1 License Grant. NMC hereby grants to USGC a non-
exclusive, royalty-bearing right and license to practice
within the Licensed Field the NMC Flotation Technology.
USGC shall have a right to sublicense the right and
license granted to USGC that is limited to sublicensing
the Operator for the sole purpose of the Operator
operating the Facility within the scope of the right and
license granted to USGC.
2.2 Freedom from Liability for Patent Infringement. USGC,
and permitted sublicensees of USGC, shall be free of
liability with respect to any infringement or other
violation of the NMC Patents on account of exercise by
USGC, or a permitted sublicense of USGC, of the right
and license granted to USGC by NMC under section 2.1.
3. LICENSE FEES
3.1 Initial License Fee. Upon execution of this Agreement,
an initial license fee of $US50,000 (Fifty Thousand United
States dollars) shall be due from USGC to NMC, with USGC
receiving a credit against such initial license fee for
prior payment to NTL of the Option Fee; provided that USGC
shall be permitted to pay the initial license fee to NMC
in installments to be paid as follows: (i) $US30,000
(thirty thousand United States dollars) to be paid on the
Effective Date (with the credit for prior payment to NTL
of the Option Fee being applied against this installment),
(ii) $US10,000 (ten thousand United States dollars) to be
paid no later than three months following the Effective
Date and (iii) $US10,000 (ten thousand United States
dollars) to be paid no later than six months following
the Effective Date.
3.2 Ongoing License Fees. USGC shall pay to NMC ongoing
license fees equal to two percent (2%) of NSR of Licensed
Concentrate. Payment to NMC of ongoing license fees for
any unit of Licensed Concentrate shall be an obligation of
USGC as of the date the unit of Licensed Concentrate is
prepared, with payment to be made to NMC as provided in
section 3.3. Beginning with calendar year 2003, the ongoing
license fees shall be subject to an annual minimum of
$US10,000 (ten thousand United States dollars) per calendar
year during the term of this Agreement, including the
Calendar Year during which this Agreement terminates.
Upon expiration of the last to expire of the NMC Patents,
the ongoing license fees shall thereafter be reduced by
one-half (1/2), to one percent (1%) of NSR, but the annual
minimum will continue to apply unchanged.
3.3 Payment of Ongoing license fees. Ongoing license fees
are to be paid to NMC on a calendar quarterly basis, with
ongoing license fees in relation to a calendar quarter to
be paid to NMC not later than one month following the end
of the respective calendar quarter (i.e., not later than
the end of April in relation to the first quarter, the end
of July in relation to the second quarter, the end of
October in relation to the third quarter and the end of
January of the following year in relation to the fourth
quarter). Ongoing license fees for a unit of Licensed
Concentrate are to be paid to NMC in relation to the
calendar quarter in which the Third Party purchaser of the
Licensed Concentrate or Licensed Dore makes payment on a
sale made pursuant to section 3.6.
3.4 Reporting of Ongoing license fees. Within one month
following the end of each calendar quarter, USGC shall
deliver to NMC the following:
(a) Written reports of a form as specified in Exhibit C.
(b) A written itemization of Allowable Deductions used to
determine NSR for the reported quarter, with the
itemization identifying the payee of each Allowable
Deduction (e.g., the relevant transportation company
or insurer), the nature of each Allowable Deduction
(e.g., transportation or insurance), and the amount of
each Allowable Deduction. Written documentation from
the payee shall be included to support each Allowable
Deduction
(c) In relation to all Licensed Concentrate prepared
during the reported quarter, copies of all production
reports from the Facility, all production assays
(including head, tail and concentrate assays) and all
metallurgical balance reports concerning gold and silver
content (and the content of other metal values to the
extent applicable).
(d) In relation to all Licensed Dore prepared during the
reported quarter, copies of all production reports from
processing operation(s) where the production took place,
all assays and all metallurgical balance reports
concerning gold and silver content (and the content of
other metal values to the extent applicable).
(e) Copies of all available settlement documentation
received during the quarter from Third Party purchasers
of Licensed Concentrate and Licensed Dore.
(f) Payment of Annual Minimum. For each calendar year
for which the annual minimum provided in section 3.2
applies, any deficiency in ongoing royalty payments for
the year relative to the annual minimum requirement shall
be made with the final quarterly report in relation to
that calendar year.
3.6 USGC Royalty Buy-Out Option. At any time prior to
expiration of two (2) years following the Effective Date,
USGC may, at USGC's sole option, buy-out a portion or all
ongoing license fees on further Licensed Concentrate in
increments of one percent (1%) of NSR, including buy-out
of a proportionate share of future annual minimums (i.e.,
$US5,000 reduction in future annual minimums for each 1%
NSR increment bought-out), by paying to NMC no later than
the two (2) years following the Effective Date $US500,000
(five hundred thousand United States dollars) for each
one percent (1%) NSR increment being bought-out
($US1,000,000 to buy-out entire 2% of NSR). In the event
of a buy-out, the ongoing license fees will be reduced by
the bought-out increment(s) of NSR for all Licensed
Concentrate prepared following the buy-out and the annual
minimum will be reduced beginning with the calendar year
during which the buy-out is made. USGC shall be permitted
to exercise its buy-out option up to two times during the
applicable two-year period.
3.7 Handling of Licensed Concentrate and Disposition of
Metal Values.
(a) All Precious Metals and other metals of value in
Licensed Concentrate shall be disposed of by sale of
Licensed Concentrate or Licensed Dore from a USGC Party
to a Third Party purchaser, with the sale being an arms
length sale transaction at fair market value only for money
paid by the Third Party purchaser to a USGC Party, with
payment being made on the sale by the Third Party purchaser
at least as quickly as normal industry practice for like
sales made in arms length transactions in relation to
other mining operations in Nevada, U.S.A.
(b) Promptly after preparation of a unit of Licensed
Concentrate, but in no event later than 30 calendar days
following preparation of the unit of Licensed Concentrate,
either (i) the unit of Licensed Concentrate shall be
delivered to a Third Party purchaser of the unit of
Licensed Concentrate pursuant to a sale transaction as
provided in subsection (a) or (ii) processing shall
commence on the unit of Licensed Concentrate in a
subsequent processing operation operated by a USGC Party
for preparation of Licensed Dore in a timely manner
according to the processing technology being used.
Processing of a unit of Licensed Concentrate into
Licensed Dore shall not be delayed relative to like
processing of any other ores or concentrates being
processed in the subsequent processing operation.
Promptly after preparation of a unit of Licensed Dore,
but in no event later than 30 days following preparation
of the unit of Licensed Dore, the Licensed Dore shall be
delivered to a Third Party purchaser of the Unit of
Licensed Dore pursuant to a sale transaction as provided
in subsection (a). USGC shall, and shall cause other
USGC Parties, to use best efforts to maximize monies
received from Third Party purchasers for sales of
Licensed Concentrate and Licensed Dore.
(c) Licensed Concentrate disposed of by sale to a
Third Party purchaser pursuant to subsection (a) shall
not have been commingled with other concentrates, ores or
other materials prior to the sale. Licensed Concentrate
processed to prepare Licensed Dore may be commingled with
other concentrates and/or ores for processing in the
subsequent processing operation so long as appropriate
metallurgical accounting procedures are followed to
permit accurate allocation in a miner-like fashion of
value due to the processing of the Licensed Concentrate
and due to the processing of the other concentrates
and/or ores. In the case of such commingling, the Licensed
Dore shall be an allocated portion of the dore or other
similar crude metallic product resulting from the
subsequent processing operation accurately determined based
on the metallurgical accounting procedures.
4. TECHNICAL SUPPORT
4.1 Technical Consultation. NMC shall provide to USGC
technical consultation as reasonably requested by USGC, to
the extent that NMC is reasonably capable, concerning USGC's
exercise of the right and license under section 2.1. NMC
shall be paid for technical consultation provided to USGC;
provided that up to the first five (5) man-days (8 hours per
man-day) of technical consultation provided by NMC during
each of the first two annual periods during the term of this
Agreement following the Effective Date shall be provided by
NMC without charge to USGC. Upon request of USGC, NMC will
provide to USGC a schedule of consulting fee rates for NMC
to provide technical consultation to USGC, such schedule of
consulting fee rates to be subject to change with at least
thirty (30) days advance written notice to USGC. In any
event, USGC shall reimburse NMC for any incidental expenses
incurred to provide the requested technical consultation,
including all incidental travel, lodging and meal expenses.
NMC's obligation to provide USGC with any technical
consultation shall end upon the earlier to occur of (i)
five (5) years after the Effective Date and (ii) two (2)
years after commencement of use of the NMC Flotation
Technology at the Facility.
4.2 Laboratory Testing. Upon request from USGC, NMC will
consider performing laboratory flotation testing to further
investigate application of the NMC Flotation Technology
for implementation at the Tonkin Springs Property. NMC
shall have no obligation to perform such testing. But if
NMC does agree to perform such testing, then USGC shall
pay for such testing based on personnel, laboratory facility
and other charges to be provided by NMC. NMC will provide
USGC only with factual data concerning test conditions and
results of the tests. USGC assumes all responsibility for
interpretation of such factual data.
5. RECORDS/AUDITING
5.1 Metallurgical Accounting and Maintenance of Records.
USGC, or the Operator, shall implement and follow appropriate
metallurgical accounting procedures, including appropriate
monitoring of weight and grade, to permit accurate
determination of Precious Metals content, and the content of
other metals of value (if any), in Licensed Concentrate and
Licensed Dore. USGC shall keep and maintain, and shall
cause the Operator to keep and maintain, accurate records
relating to exercise of the right and license under section
The records kept and maintained by USGC shall be
sufficient in detail to permit NMC to determine and verify
any and all amounts due to NMC hereunder, and the records
shall include documentation of appropriate sampling and
quantity measurements for determination of the content of
gold and silver (and other metal values to the extent
applicable) in Licensed Concentrate. Each record shall be
maintained in the United States at a normal business office
of USGC, or the Operator as the case may be, for a period of
at least two (2) years following the end of the calendar
year to which the record pertains.
5.2 Audit of Records. NMC shall have a right to audit
USGC's compliance with this Agreement, including an audit
of USGC's and/or the Operator's records and metallurgical
accounting procedures (including sampling and assaying
frequency and procedures) during normal business hours to
the extent deemed by NMC to be necessary to verify the
amount and accuracy of any and all amounts due to NMC
hereunder. NMC may exercise this right to audit no more
frequently than once during any calendar year and shall
provide USGC with at least thirty (30) days advance written
notice prior to conducting an audit of USGC's records. The
right to audit shall include the right to use professionals,
such as accountants and attorneys of NMC's choice, to perform
or assist in the performance of an audit. Prompt adjustment
shall be made by USGC to compensate NMC for any errors or
omissions disclosed by an audit. NMC's audit rights shall
also extend to any relevant records maintained by and
metallurgical accounting procedures performed by any
permitted sublicensee or contractor, and USGC shall ensure
that NMC has access to such records and metallurgical
accounting procedures for purposes of conducting audits.
If, based on an audit, it is determined that underpayments
to NMC are five percent (5%) or more of the payments due
during the period audited, then the reasonable costs of the
audit shall be borne by USGC, otherwise the cost of the
audit shall be borne by NMC.
5.3 Facility Visits. NMC shall have a right to visit the
Facility, with at least six (6) months between visits, to
witness the extent and nature of use of the NMC Flotation
Technology at the Facility, and USGC shall upon request of
NMC provide NMC with a complete description of operating
parameters and specifications concerning use of the NMC
Flotation Technology at the Facility.
6. INTELLECTUAL PROPERTY
6.1 Ownership. USGC acknowledges that, as between the
parties and as subject to the right and license to USGC
under section 2.1, all right, title and interest, including
all intellectual property rights, in and to the NMC Flotation
Technology shall be owned solely and exclusively by NMC.
USGC shall promptly disclose in writing to NMC any
Improvements. Furthermore, USGC hereby assigns, sells,
transfers and otherwise conveys unto NMC all right, title
and interest of USGC, including all patent and other
intellectual property rights, in and to the Improvements.
Neither party shall have any right in or to any technology
or intellectual property of the other party, now existing or
hereafter developed or acquired, except as expressly provided
herein.
6.2 Protection of NMC Flotation Technology. NMC shall have
complete discretion and control as to whether to seek patent
or other protection of any and all of the NMC Flotation
Technology, the manner in which protection is sought, and
whether and how to maintain any of the NMC Patents or other
intellectual property rights. At the request of NMC and at
NMC's expense, USGC shall cooperate with and assist NMC to
evidence, demonstrate or perfect NMC's right, title and
interest in and to the Improvements, including preparing,
filing and prosecuting relevant patent applications in the
United States and other countries and including signing such
documents and performing such acts, or having employees or
others sign such documents or perform such acts, as requested
by NMC. Furthermore, NMC shall have complete discretion and
control concerning whether and how to enforce any intellectual
property rights concerning the NMC Flotation Technology,
including any of the NMC Patents, against any Third Party, and
in the event that NMC pursues enforcement of any such
intellectual property right, then NMC shall bear all costs and
shall reap all rewards from such enforcement, including the
benefits of any settlement.
7. REPRESENTATIONS AND WARRANTIES/INDEMNIFICATIONS/NOTICE OF
CLAIMS
7.1 Representations and Warranties of NMC. NMC represents
and warrants that NMC has the right to grant the right and
license to USGC under section 2.1 and the freedom from
liability under section 2.2.
7.2 No Other Representations or Warranties. Other than as
expressly provided in section 7.1, NMC makes no
representations or warranties, either express or implied.
Without limiting the generality of the foregoing, NMC makes
no representations and disclaims all warranties relating to,
and assumes no responsibility for:
(a) the validity or enforceability of any of the NMC
Patents or any claims of the NMC Patents;
(b) the ability of USGC or any permitted sublicensee
of USGC to practice any of the NMC Flotation Technology
free from infringement or other violation of any Third
Party's patent or other rights; and
(c) the safety or suitability for any purpose of the NMC
Flotation Technology.
NMC HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, AS TO THE USEFULNESS OR
PERFORMANCE OF THE NMC FLOTATION TECHNOLOGY INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
7.3 Release/Indemnification. Except as otherwise
specifically provided elsewhere in this Agreement, USGC
shall indemnify, defend, and hold harmless NMC and NMC's
Affiliates and their respective directors, officers,
employees, and agents (each an "Indemnitee"), against and
from any and all losses, claims, actions, suits (including
costs and reasonable attorney fees), and damages to the
extent the same arise out of or are in any way connected
with USGC, USGC's Affiliates' or USGC's contractors', or
any of their respective employee's, agent's or
representative's, acts or omissions in any way related to
the subject matter of this Agreement. Furthermore, USGC
hereby completely releases each Indemnitee from any
responsibility for, and agrees to defend, indemnify and
otherwise hold harmless each Indemnitee from and against
any and all claims, liability, loss, damages, costs and
expenses, including reasonable attorney fees, arising in
any way from or relating in any way to exercise by USGC,
or any permitted sublicensee of USGC, of the right and
license under section 2.1.
7.4 Notice of Third Party Infringement. USGC shall
promptly notify NMC in writing of any actions by a Third
Party of which USGC becomes aware during the term of this
Agreement which USGC believes is infringing one or more
of the NMC Patents.
7.5 Notice of Third Party Infringement Claims. USGC shall
promptly notify NMC in writing of any claim, action or suit
for infringement of a patent or other intellectual property
right asserted or threatened to be asserted against USGC or
a permitted sublicensee of USGC during the term of this
Agreement based on use by USGC or the permitted sublicensee
of any portion of the NMC Flotation Technology.
7.6 Defense Costs for Third Party Infringement Claim. In
the event that during the term of this Agreement a Third
Party Infringement Claim is asserted against a USGC Party,
then NMC shall pay legal fees of the USGC Party for
defending against the Third Party Infringement Claim,
provided that NMC's obligation shall be capped at a
cumulative cost to NMC for all Third Party Infringement
Claims at the lesser of (i) $US250,000 (two hundred fifty
thousand United States dollars) or (ii) the total license
fees paid to NMC pursuant to Article 3 of this Agreement;
provided that in any event USGC shall provide NMC
supporting written documentation (including copies of
invoices for legal fees) for all legal costs for which
USGC seeks payment. In each event of a Third Party
Infringement Claim, the USGC Party shall keep NMC informed
concerning the progress of the proceeding, the USGC Party
shall at the request of NMC provide NMC with copies of all
documents filed in the proceeding for which dissemination
is not restricted by a secrecy order for the benefit of
another party in the proceeding, and the USGC Party shall
at the request of NMC consult with NMC concerning defense
against the Third Party Infringement Claim and consider
NMC's comments in relation to pursuing the defense. In the
case of the limitation on NMC's commitment in (ii) above,
when any or all of the license fees paid to NMC are paid
after commencement of a Third Party Infringement Claim,
then to the extent that USGC has a right to payment of legal
fees based on an increasing cap due to those license fees,
then USGC may obtain the payment from NMC by way of
adjustment to license fee payments when USGC reports and
pays the relevant license fees to NMC.
8. CONFIDENTIALITY
8.1 Obligations of Confidentiality. Without prior written
consent from NMC, USGC shall not disclose any portion of the
NMC Confidential Information to others, including Affiliates
of USGC, and shall not use the NMC Confidential Information
for any purpose other than the purpose of this Agreement,
except to the extent specifically provided in section 8.2.
8.2 Exceptions to Obligations. USGC shall be excepted from
the obligations of confidentiality of section 8.1 with
respect to NMC Confidential Information to the extent that
the NMC Confidential Information at issue:
(a) is within the public domain or enters the public domain
through no fault or wrongful act of USGC or any permitted
sublicense to USGC; or
(b) was in the unrestricted possession of USGC prior to
receipt of the information from NMC or any Affiliate of NMC
or any Third Party as permitted by NMC and such prior
possession is evidenced by a writing existing prior to such
receipt by USGC of the information; or
(c) is received by USGC from a Third Party not under an
obligation of confidentiality to NMC or an Affiliate of NMC,
but only to the extent rightfully permitted by the Third
Party; or
(d) is reasonably necessary to comply with a court order or
an order from another competent legal tribunal, but only to
the extent required to comply with the order and only after
informing NMC of the order and providing NMC with an
opportunity to obtain a protective order or other legal
protection for the NMC Confidential Information at issue; or
(e) is disclosed to a permitted assignee or proposed assignee
of USGC under section 10.2 and the assignee first agrees
in a writing delivered to the other party to be bound to the
provisions of this Article 8 to the same extent as required
of USGC.
(f) is disclosed by USGC to any of the following Persons
engaged by USGC, directly or indirectly, as reasonably
necessary to design, construct, start-up, maintain and
operate the Facility during the term of this Agreement,
but only after such Person has agreed in writing to be bound
to obligations of confidentiality at least to an extent as
required of USGC under this Article 8 except not including
the exceptions of subsections (e)-(g) of this section 8.2,
and NMC shall be an intended beneficiary of such obligations
with full right and authority to enforce such obligations:
Affiliates of USGC, the Operator, engineering contractors,
technical consultants and the like.
(g) is disclosed by USGC or a permitted sublicensee of
USGC to any regulatory authority for the purpose of
obtaining appropriate permits or like authorizations in
relation to the Facility, provided that the disclosure to
the regulating authority shall be only to the extent
required for the purpose of obtaining the necessary
permits or like authorizations.
8.3 Duration of Obligations. The obligations of USGC under
section 8.1 with respect to any portion of NMC Confidential
Information shall continue until one of the exceptions
identified in section 8.2 applies to that portion of the
NMC Confidential Information, provided that with respect to
exceptions 8.2(d)-(g), the obligations of confidentiality
shall be relieved only to the extent required for making
the limited disclosure pursuant to the exception.
8.4 Return of NMC Confidential Information. At any time
after termination of this Agreement for any reason and upon
request of NMC, USGC shall send to NMC all writings and
other physical embodiments of NMC Confidential Information;
provided that USGC legal counsel may retain one copy of the
physical embodiments solely for archival purposes.
8.5 Injunctive Relief. USGC acknowledges (i) that the
NMC Confidential Information is a valuable asset of NMC, (ii)
that NMC has no adequate remedy at law for a breach of
obligations of USGC under section 8.1, and (iii) that NMC
will suffer irreparable harm as a result of such a breach.
Therefore, USGC agrees that NMC shall be entitled to obtain
equitable relief, including temporary and permanent
injunctive relief, without the obligation of posting a bond
(cash or otherwise), in the event of actual or threatened
unauthorized disclosure of the NMC Confidential Information
by USGC or any permitted sublicensee of USGC.
9. TERM AND TERMINATION
9.1 Term. The term of this Agreement shall commence on the
Effective Date and shall continue, unless earlier terminated
as provided in section 9.2, until expiration of the
last-to-expire of the NMC Patents and so long thereafter as
any portion of the NMC Flotation Technology is practiced
within the Licensed Field pursuant to the right and license
of section 2.1.
9.2 Termination. This Agreement may be terminated prior to
expiration of the term set forth in section 9.1 as follows:
(a) In the event of a material breach of this Agreement
by a party ("Breaching Party"), the other party ("Aggrieved
Party") may terminate this Agreement; provided, however,
that prior to terminating this Agreement the Aggrieved Party
shall first provide written notice of the breach to the
Breaching Party, after which the Breaching Party shall have
a thirty (30) day period in which to cure the breach. If
the breach remains uncured after the 30 day cure period,
then the Aggrieved Party may for thirty (30) days following
expiration of such cure period terminate this Agreement
upon written notice of the termination to the Breaching Party.
In the event that the Aggrieved Party fails to provide the
written notice of termination within the thirty (30) day
period following the cure period, then the Aggrieved Party
must provide new notice of the breach to the Breaching Party
and allow a new cure period prior to thereafter terminating
the Agreement based on the same breach. Any and all statutes
of limitation concerning actions involving the material breach
at issue shall be tolled during the cure period. Failure of
USGC to timely pay to NMC any sums due to NMC hereunder shall
be deemed a material breach by USGC.
(b) Upon written notice by a party to the other party in the
event of any of (i) initiation of any bankruptcy or
insolvency proceeding by or against the other party that
is not dismissed within 90 days after the initiation, (ii)
appointment of a receiver for the assets of the other party,
or (iii) the sale of substantially all of the assets of the
other party in connection with either (i) or (ii); provided,
however, that prior to voluntary initiation by the other
party of a bankruptcy or insolvency proceeding, the other
party shall provide reasonable advance written notice of the
pending initiation to the party and the parties shall consult
with each other prior to the other party initiating the
proceeding.
(c) USGC may terminate this Agreement at any time with at
least three (3) months advance written notice of the
termination to NMC.
9.3 Effect of Termination. Upon termination of this
Agreement pursuant to either section 9.1 or 9.2, the
following shall apply:
(a) The right and license of section 2.1 and the freedom
from liability of section 2.2 shall end and all use of the
NMC Flotation Technology at the Facility shall cease.
(b) In any event, the following provisions shall survive
termination of this Agreement: (i) Articles 1, 6,7, 8 and
10 shall survive indefinitely, (ii) sections 3.1, 3.2, 3.3,
3.4, 3.5 and 3.7 shall survive until such time as NMC has
received full payment of the initial license fee and payment
for all ongoing royalties (including annual minimums) in
relation to Licensed Concentrate and (iii) sections 5.1 and
5.2 shall survive for two (2) years following the
termination.
(c) Termination of this Agreement shall in no way affect
the rights of the parties accruing prior to the termination
or the rights of a party to seek and recover damages or
other relief for any breach by the other party.
10. MISCELLANEOUS
10.1 Manner of Payment. Any amount due to NMC hereunder shall
be paid to NMC at the address provided for notices hereunder,
unless otherwise instructed by NMC. At the request of NMC,
the payments shall be made to NMC by electronic funds
transfer to an account as designated by NMC. All amounts due
to NMC shall be calculated and paid in United States dollars.
10.2 Assignability. The obligations of a party shall be
binding upon and the rights of the party shall inure to the
benefit of permitted successors and permitted assigns of the
party, provided that any purported assignment of this
Agreement or any portion thereof made in violation of this
section shall be void ab initio. This Agreement is not
assignable, in whole or in part, by either party without
the prior written consent of the other party except as
specifically set forth in (a) and (b) below:
(a) In the case of NMC, NMC shall be permitted to assign
to any Affiliate of NMC all or any part of this Agreement,
including assignment of any rights of NMC and delegation of
any obligations of NMC hereunder, without prior consent of
USGC.
(b) In the case of USGC, provided that USGC is not in
breach of this Agreement then USGC shall be permitted to
assign USGC's entire interest in this Agreement, including
all rights and obligations of USGC hereunder, to any Person
acquiring a majority equity interest, directly or
indirectly, in the Tonkin Springs Property, provided that
such assignment by USGC shall not be effective until the
assignee has agreed in a writing signed by the assignee and
delivered to NMC to be bound by the terms of this Agreement
in the place of USGC. USGC shall give NMC at least thirty
(30) days advance written notice prior to making such an
assignment. Following proper assignment, the assignee
shall be liable to NMC for all obligations of USGC, whether
accruing prior to or following the assignment, and USGC
shall have continuing liability to NMC to an extent as
provided in subsections (b) and (c) of section 9.2 as if
the Agreement had been terminated with respect to USGC as
of the date of the Assignment and this continuing liability
of USGC following the assignment shall be joint and several
with the assignee. Following a permitted assignment by USGC,
NMC shall have no further obligations under Article 4 and
shall have no further obligation to pay for legal defense
costs under section 7.6, unless NMC otherwise agrees in a
writing signed by NMC. Acquisition by a Third Party, directly
or indirectly, of a majority interest in USGC or a majority
equity interest in the Tonkin Springs Property, shall be
deemed an assignment of this Agreement by USGC.
10.3 Relationship of the Parties. Neither party shall be an
agent of the other party for any purpose and this Agreement
does not establish any type of agency, partnership or joint
venture relationship between the parties, and neither party
shall perform any acts to bind or to purport to bind the
other party in any way or to represent that the other party
is in any way responsible or liable for its acts, statements
or omissions.
10.4 Notices. All notices, payments, reports and other
communications provided for herein shall be in writing and
delivered to the other party at the respective address below,
or such other address in the United States as a party may
hereafter specify in writing:
If to NMC: Newmont Technical Facility
00000 Xxxx Xxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx/Xxxx XxXxxx
With copy to: Newmont Mining Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
If to USGC: U.S. Gold Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxx
A notice hereunder shall be effective as of delivery to the
receiving party at the specified address. In computing a
period of time following a notice under this Agreement, the
date on which the notice is delivered to the receiving party
shall not be counted.
10.5 Modification. The parties acknowledge and agree that
this Agreement may only be modified by an instrument in
writing of equal formality, signed by duly authorized
representatives of the respective parties hereto.
10.6 Non-Waiver. Each party agrees that any waiver by the
other party to enforce any right hereunder on any occasion
shall not establish a basis for claiming a waiver of any
right by the other party on any subsequent occasion.
10.7 Entire Agreement. This Agreement, together with the
exhibits attached hereto and which are incorporated herein
by this reference, constitutes the entire agreement and
understanding of the parties relating to the subject matter
hereof and this Agreement supersedes all previous
communications, proposals, representations and agreements,
whether oral or written, relating thereto, including the
Option Agreement.
10.8 Severability. Each party agrees that, should any
provision of this Agreement be determined by a court of
competent jurisdiction to violate or contravene any applicable
law or policy, such provision shall be severed from this
Agreement and the remainder of the provisions hereof shall
continue in full force and effect.
10.9 Controlling Law and Jurisdiction. This Agreement shall
be interpreted, construed and governed in accordance with
the laws of the State of Colorado, U.S.A., without reference
to conflict of laws principles. All disputes arising from
or relating to this Agreement shall be within the exclusive
jurisdiction of the state and/or federal courts located
within the State of Colorado and the parties hereby consent
to such exclusive jurisdiction and waive objections to venue
therein; provided, however, that to the extent necessary in
order to obtain an order or an injunction outside of the
United States, the parties hereby consent to jurisdiction for
such a proceeding of appropriate courts or other tribunals
located outside of the United States. To the extent that a
state and/or federal court located within the State of
Colorado refuses to exercise jurisdiction hereunder, the
parties agree that jurisdiction shall be proper in any court
in which jurisdiction may be obtained notwithstanding this
section.
10.10 Headings. The headings of the various articles and
sections of this Agreement have been inserted for convenience
only and shall not be deemed to be made a part of this
Agreement.
IN WITNESS WHEREOF, each party hereto acknowledges that the
representative named below has the authority to execute this
Agreement on behalf of the respective party to form a legally
binding contract and has caused this Agreement to be duly
executed on its behalf.
NEWMONT USA LIMITED U.S. GOLD CORPORATION
Name: Xxxxxxx Xxxxx Bare Name: Xxxxxxx X. Xxxx
Title: V.P., chief Technology Officer Title: President
Date: 5/28/02 Date: 5/31/02
EXHIBIT A
Current NMC Patents:
1. U.S. Xxx. No. 5,653,945, having a term expiring
April 18, 2015.
2. U.S. Xxx. No. 5,837,210, having a term expiring
April 18, 2015.
3. U.S. Xxx. No. 6,210,648, having a term expiring
April 18, 2015.
EXHIBIT B
Calculation of Net Smelter Returns (NSR)
NSR for Licensed Concentrate shall be a calculated amount
based on the value of all Precious Metals and other metals
of value in the Licensed Concentrate less applicable
Allowable Deductions. Determination of NSR for the
different situations involving sale of Licensed Concentrate
and sale of Licensed Dore are as follows:
(a) When Precious Metal from Licensed Concentrate is
produced in the form of a Licensed Dore sold to a Third
Party purchaser, the applicable value of Precious Metals
And other metals shall be the monies received from the sale,
and the following Allowable Deductions shall be permitted:
the cost of transporting and insuring the Licensed Dore
from the mill at which the Licensed Dore is produced to
the point of delivery of the Licensed Dore to the Third
Party purchaser.
(b) When Licensed Concentrate is sold to a Third
Party purchaser, then the applicable value of the Precious
Metals and other metals shall be the monies received from
the sale and the following Allowable Deductions shall be
permitted: the cost of transporting and insuring the
Licensed Concentrate from the Facility to the point of
delivery to the Third Party purchaser.
