HYPERSPECTRAL TECHNOLOGY
LICENSE AGREEMENT
BETWEEN
EARTH SEARCH SCIENCES, INC.
- and -
NORANDA MINING AND EXPLORATION INC.
MADE AS OF
DECEMBER 16, 1997
HYPERSPECTRAL TECHNOLOGY
LICENSE AGREEMENT
THIS AGREEMENT is made as of the 16th day of December, 1997.
B E T W E E N:
EARTH SEARCH SCIENCES, INC.
(hereinafter referred to as the "Licensor"),
- and -
NORANDA MINING AND EXPLORATION INC.
(hereinafter referred to as the "Licensee").
WHEREAS:
A. The Licensor is in the business of designing,
developing and marketing certain hyperspectral technology used for, among other
purposes, the exploration and development of commercial mining properties;
B. The Licensor and Licensee have, concurrently with the execution and
delivery of this Agreement entered into a services agreement dated as of
December 16, 1997 (the "Services Agreement") pursuant to which the Licensor has
agreed to provide certain hyperspectral services in exchange for the
consideration set forth therein; and
C. The Licensor has agreed to grant to the Licensee
certain licenses to use for Mining Activities (as defined herein) the
hyperspectral technology owned or used by the Licensor and has agreed to
provide certain related materials on the terms set forth herein;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the
premises and mutual covenants contained herein and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
ARTICLE 1 - INTERPRETATION
1.1 In this Agreement, including the recitals, exhibits and schedules hereto,
the following terms shall have the meanings ascribed to them below:
"Acquired Hyperspectral Data" has the meaning given thereto in Section 3.1;
"Acquisition Notice" has the meaning ascribed thereto in Section 4.1(a);
"Affiliate" means, with respect to any person, any other person directly or
indirectly controlling, controlled by, or under common control with such first
person and, in the case of the Licensee or Sub-Licensee (within the meaning of a
Royalty Agreement) includes Falconbridge Limited and each Affiliate thereof.
"Control" shall mean having the power to direct the affairs of a person by
reason of the ownership of or controlling the right to vote sufficient numbers
of shares of voting stock, or to direct the general management of the affairs of
such person by contract or otherwise;
"Affiliate Sub-License Agreement" means an agreement in the form attached
hereto as Exhibit A;
"Agreement" means this agreement and all schedules and exhibits and all
amendments made hereto by written agreement by the parties hereto;
"Authorized Sub-Licensee" has the meaning ascribed thereto in Section 2.6;
"Business Day" means, any day on which banks are open for business in
Xxxxxxx, Xxxxxxx, Xxxxxx;
"Claim" has the meaning ascribed thereto in Section 6.1;
"Commencement of Commercial Operations" means that date on which Commercial
Operations commence;
"Commercial Operations" means, in respect of any Eligible Property, the
mining and treating of ore from such Eligible Property with a view to selling
the eventual product. The mining and treating of ore for the primary purposes of
testing the ore to determine the metallurgical process which should be used in
respect of such ore shall be deemed not to be Commercial Operations;
"Commercially Exploit" or "Commercial Exploitation" includes use, copy,
produce, gather, make Improvements to, sell, license, rent, distribute, import,
export and otherwise commercially exploit and authorize others to do any or all
of the foregoing;
"Confidential Information" means the confidential, secret or proprietary
information of one party (the "Disclosing Party"), including, without
limitation, Hyperspectral Data acquired by the Licensee or an Authorized
Sub-Licensee, as applicable, technical, financial, and business information and
computer programs of the Disclosing Party which has been or may hereafter be
disclosed, directly or indirectly to the other party (the "Recipient"), either
orally, in writing or in any other material form, or delivered to the Recipient
including, without limitation, any such information disclosed pursuant to a
Royalty Agreement;
"Designated Area" has the meaning ascribed thereto in Section 3.1;
"Designated Property" has the meaning ascribed thereto in Section 3.1;
"Disclosing Party" has the meaning ascribed thereto in the definition of
Confidential Information in Section 1.1;
"Documentation" means all existing user documentation, however recorded,
including, without limitation, user manuals, training materials and product
specifications listed in Schedule 1 and all user documentation relating to
Improvements in the Technology designed or created by or for the Licensor after
the Effective Date;
"Effective Date" means the date of this Agreement;
"Eligible Property" means a Property any part of which is within an area
surveyed by the Technology in which neither the Licensee nor any Affiliate of
the Licensee has any interest in the ownership or control of such Property prior
to the date on which such Property is surveyed by the Technology but in which
the Licensee or such Affiliate subsequently acquires an interest in the
ownership or control of such Property after the date on which such Property is
surveyed by the Technology; and Eligible Property includes a Designated Property
acquired by the Licensee or any Licensed Affiliate of the Licensee pursuant to
the provisions of Article 3; provided, however, that the following categories of
Properties shall be deemed to be specifically excluded and shall not constitute
an Eligible Property:
(a) any Property in which the Licensee or any Affiliate of the
Licensee has an interest in the ownership or control thereof on the day before
such Property is surveyed by the Technology; provided that, no Property which is
greater than one thousand five hundred square kilometres (1,500 sq. km.) in area
shall be excluded pursuant to this sub-paragraph (a);
(b) (i) any Property surveyed by the Technology which, at the date of
acquisition thereof, contains an existing Mineral Resource constituting a
Probable Reserve and which is equal to or less than one hundred square
kilometres (100 sq. km.) in area, and (ii) any part of any Property surveyed
by the Technology which is greater than one hundred square kilometres
(100 sq. km.) in area and which, at the date of acquisition thereof, contains
an existing Mineral Resource constituting a Probable Reserve provided that such
part (A) has been designated in writing by the Licensee in a Pre-Acquisition
Notice, and (B) is equal to or less than one hundred square kilometres
(100 sq. km.) in area;
(c) any Property surveyed by the Technology in which an interest in
the ownership or control of such Property is acquired by the Licensee or any
Affiliate of the Licensee on a date which is:
(i) in the case of any such Property to which Hyperspectral Data
acquired by the Licensee pursuant to the Services Agreement relates,
more than two (2) years following the date on which the Licensee or
such Affiliate received the Hyperspectral Data pursuant to the Services
Agreement; or
(ii) in the case of any such Property to which Acquired
Hyperspectral Data relates, more than two (2) years following the date
on which the Licensee received a Hyperspectral Data Notice in respect
of the Designated Area in which such Property is located;
(d) any Property surveyed by the Technology in respect of which:
(i) the Licensee or any Affiliate of the Licensee on the date
such Property was surveyed by the Technology (A) had entered into a
written commitment to acquire an interest in the ownership or control
of such Property, or (B) was actively engaged in negotiations to
acquire an interest in the ownership or control of such Property; or
(ii) the Licensee or any Affiliate of the Licensee acquired such
Property principally for one or more reasons unrelated to the results
of the survey of such Property by the Technology, including, without
limitation, geology, geophysics and geochemistry; and
(e) any Property surveyed by the Technology and located within an area
to which Non-Acquired Hyperspectral Data relates and in which an interest in the
ownership or control of such Property is acquired by the Licensee or any
Affiliate of the Licensee on or after the date which is the earlier of:
(i) thirty (30) days following the last day of the applicable
Exercise Period; and
(ii) thirty (30) days following the date on which the Licensor
receives written notice (a "Non-Acquisition Notice") from the Licensee
that the Licensee does not intend to exercise the Hyperspectral Data
Acquisition Right in respect of all or a portion of the Subject
Hyperspectral Data to which such Property relates;
"Excluded Data Notice" has the meaning ascribed thereto in Section 4.5;
"Exercise Period" has the meaning given thereto in Section 3.1;
"Governmental Body" means any multinational, national, federal, state,
provincial, municipal or other government, any subdivision, department, agency,
board, court, entity, commission or authority thereof, or any quasi-governmental
or private body exercising any regulatory, taxing, importing or other
governmental authority;
"Hyperspectral" means the acquisition of images in more than one hundred
(100) spectral bands, such that the spectral reflectance signature can be
derived from the radiance signal collected for each pixel;
"Hyperspectral Data" means all data collected by use of the Technology,
including, without limitation, all processed data and other information
resulting from the analysis of such data;
"Hyperspectral Data Acquisition Right" has the meaning ascribed thereto in
Section 3.1;
"Hyperspectral Data Notice" has the meaning ascribed thereto in
Section 3.1;
"Implementation Schedule" has the meaning given thereto in Section 2.5
"Improvements" in relation to the Technology, the Software, or the
Documentation and includes any correction, modification, fix, upgrade,
enhancement, improvement, revision, adaptation, translation, conversion, or
derivative work;
"Initial Term" has the meaning given thereto in Section 8.1;
"Insolvent Party" has the meaning ascribed thereto in Section 8.4;
"Interest Charges" means, in respect of a Royalty Account, an amount
obtained by applying LIBOR at the time the calculation is made plus one percent
(1%) in addition thereto to the month-end debit balance in the Royalty Account.
The amount so obtained shall be debited to the Royalty Account at the time of
calculation;
"LIBOR" means, for any period in respect of any sum, the rate of interest
determined by the Licensee or a Sub-Licensee, as the case may be, to be the
arithmetic mean (rounded upwards, if necessary, to a maximum of four decimal
places) of the rates displayed on the Reuters screen page LIBOR01 for a term
equivalent to such period for the value date which is the first day of such
period;
"License" means the license granted to the Licensee pursuant to this
Agreement;
"Licensed Affiliate" means Falconbridge Limited, an Affiliate of the
Licensee or an Affiliate of Falconbridge Limited whose business is primarily
Mining Activities;
"Licensee Exercise Notice" has the meaning ascribed thereto in Section 3.1
"Licensee Improvements" means any Improvements to the Technology developed
or created with the permission or authorization of the Licensor, by or on behalf
of the Licensee or a Licensed Affiliate after the Effective Date;
"Licensee NPI Royalty Agreement" means an agreement in the form attached
as Exhibit B;
"Licensee NSR Royalty Agreement" means an agreement in the form attached
hereto as Exhibit C;
"Licensee Objection Notice" has the meaning ascribed thereto in
Section 4.5;
"Licensor Improvements" means any Improvements to the Technology developed
or created by or for the Licensor or an Affiliate of the Licensor after the
Effective Date;
"Licensor Objection Notice" has the meaning ascribed thereto in
Section 4.3;
"Mineral" means any naturally occurring metallic or non-metallic mineral,
including gold, silver and all base, rare and precious metals, but does not
include and specifically excludes natural gas, petroleum, coal, salt, quarry and
pit material, sand, gravel and peat;
"Mineral Resource" means a naturally occurring aggregate of one or more
Minerals;
"Mining Activities" means any activity associated with the exploration for,
or development of, Minerals for commercial purposes, but does not include and
specifically excludes environmental monitoring of operating mines and
metallurgical complexes (including tailings dams) or rehabilitation of formerly
operating mines and metallurgical complexes (including tailings dams);
"Net Profits" means, in respect of any Eligible Property, in any month
after Commencement of Commercial Operations, the amount by which Revenue exceeds
Operating Costs;
"NPI Royalty" has the meaning ascribed thereto in Exhibit B hereto;
"NSR Eligible Interest" has the meaning ascribed thereto in Section 4.2(i);
"Non-Acquired Hyperspectral Data" has the meaning given thereto in
Section 3.4;
"Non-Acquisition Notice" has the meaning given thereto in the definition
of Eligible Property in Section 1.1;
"Operating Costs" means, in respect of any Eligible Property, all costs of
Commercial Operations categorized as "Operating" costs by generally accepted
accounting practice including all taxes, royalties (including any underlying
royalties) and other levies except for federal, provincial and state corporate
income taxes, but not including any charges for depreciation, depletion or
amortization. Operating Costs shall also include a reasonable charge for
overhead not to exceed 2.5% of all other Operating Costs;
"Operating Losses" means, in any month after Commencement of Commercial
Operations, the amount by which Operating Costs exceed Revenue;
"Permanent Ownership Interest" means an interest in a Property which
entitles the holder thereof to extract and produce Minerals;
"Post Production Capital Expenditures" means, in respect of any Eligible
Property, all expenditures made after the Commencement of Commercial Operations
to acquire or construct assets having a useful life of more than one year or on
development or expansion of a mine or other production facilities the cost of
which would be charged on a unit of production basis in accordance with
generally accepted accounting principles;
"Pre-Acquisition Notice" has the meaning ascribed thereto in Section 4.3;
"Preproduction Expenditures" means, in respect of any Eligible Property,
(i) all expenses incurred in respect of such Eligible Property prior to
Commencement of Commercial Operations, including, without limitation, all
expenses incurred exploring, developing and equipping such Eligible Property for
production, completing feasibility studies, maintaining such Eligible Property
in good standing, constructing all facilities necessary to commence Commercial
Operations on such Eligible Property, constructing or acquiring infrastructure
or facilities off of such Eligible Property but required for Commercial
Operations, and to otherwise achieve Commercial Operations, and (ii) a
reasonable charge for overhead which shall be computed quarterly and charged to
the Royalty Account at the end of each calendar quarter. Prior to a production
decision, the charge for overhead shall be an amount equal to 1.5% of all other
expenditures;
"Probable Reserve" means the estimated quantity and grade of a Mineral
Resource based on drill samples for which the potential for economic viability
has been demonstrated by engineering, operating, economic, and legal factors at
a level that will allow decisions on major expenditures;
"Property" means any Mining Activities interest in real property, including
without limitation, a mineral claim, a mineral concession, a license of
occupation for mining purposes or a mining lease or any other interest derived
from or into which any such claim, concession, license of occupation or lease
may have been or may become converted;
"Recipient" has the meaning ascribed thereto in the definition of
Confidential Information in Section 1.1;
"Reserve Charges" means, in respect of any Eligible Property, an amount to
be established by estimating the cost of mine closure that will have to be
incurred after Commercial Operations in respect of such Eligible Property have
terminated and charging a portion of that cost on a monthly basis to the Royalty
Account in a reasonable manner, provided however, that any monies which have
been set aside for the satisfaction of mine closure costs prior to the
establishment of the Royalty Account shall be deducted;
"Revenue" means, in respect of any Eligible Property, the proceeds received
for the sale of product or any assets produced from such Eligible Property and
received by the parties entitled thereto, the cost of which has been previously
charged to the Royalty Account;
"Royalty Account" means, in respect of any NPI Royalty granted pursuant to
a Licensee NPI Royalty Agreement or Sub-Licensee NPI Royalty Agreement, as the
case may be, the account to be established by the Licensee or Sub-Licensee, as
the case may be, for purposes of calculating the amount of such NPI Royalty;
"Royalty Agreement" means a Licensee NSR Royalty Agreement, Licensee NPI
Royalty Agreement, Sub-Licensee NPI Royalty Agreement or Sub-Licensee NSR
Royalty Agreement;
"Software" means the software known as "Prospectre" and all computer
programs and Documentation therefor and versions thereof and all the Licensor
Improvements thereto, however recorded;
"Subject Hyperspectral Data" has the meaning ascribed thereto in
Section 3.1;
"Sub-Licensee NPI Royalty Agreement" means the agreement in the form
attached hereto as Exhibit D;
"Sub-Licensee NSR Royalty Agreement" means the agreement in the form
attached hereto as Exhibit E;
"Subsequent Acquisition Notice" has the meaning ascribed thereto in
Section 4.1(b);
"Technology" means the remote sensing and airborne Hyperspectral scanning
and imaging technologies utilized by the Licensor or an Affiliate thereof,
whether (i) developed by or for the Licensor or an Affiliate thereof or in
collaboration with the Licensor or an Affiliate thereof and Integrated
Spectronics Pty Ltd., (ii) assigned to the Licensor or an Affiliate thereof by
the inventors thereof, or (iii) licensed for use and sublicensing by the
Licensor or an Affiliate thereof, including, without limitation, the ESSI Probe
1 and other Hyperspectral imaging equipment used by the Licensor or an Affiliate
thereof, the Software, Documentation and Licensor Improvements. The Technology
shall also include all Improvements thereto designed or created by or for the
Licensor or an Affiliate of the Licensor after the Effective Date;
"Technology Agreements" has the meaning ascribed thereto in Section 5.1(e);
"Working Capital" means, in respect of any Eligible Property, all expenses
incurred by the Licensee or Sub-Licensee, as the case may be, for working
capital prior to the date when Commercial Operations on such Eligible Property,
generate sufficient revenue to satisfy working capital requirements.
1.2 HEADINGS
The division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement. The terms "this
Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular Article or Section or other portion hereof
and include any agreement supplemental hereto. Unless something in the subject
matter or context is inconsistent therewith, references herein to Articles or
Sections are to Articles or Sections of this Agreement.
1.3 EXTENDED MEANINGS
In this Agreement words importing the singular number only shall
include the plural and vice versa, and words importing persons shall include
individuals, partnerships, associations, trusts, unincorporated organizations
and corporations. The terms "provision" and "provisions" refer to terms,
conditions, provisions, covenants, obligations, undertakings, warranties and
representations in this Agreement.
1.4 AMBIGUITIES
The parties hereto agree that each of them has participated in the
drafting of this Agreement and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not apply to the
interpretation of this Agreement.
1.5 OWNERSHIP OR CONTROL
For the purposes of this Agreement, a person shall be deemed to own or
control, or to have, or to have acquired, an interest in the ownership and/or
control of a Property if such person has a contractual right to conduct
geotechnical exploration, including, without limitation, ground geological
prospecting, on the Property under an option, permit, claim, concession, lease,
license, or other grant from the registered or recorded owner of the Property
for which such person has paid material consideration. In this Agreement, all
references to ownership or control of an interest in a Property by a person
shall refer to the equitable or beneficial ownership of the undivided interest
or aliquot share of such person in the Property, rather than to the legal
ownership, or registered or recorded title, to the Property.
1.6 ACCOUNTING PRINCIPLES
Wherever in this Agreement reference is made to a calculation to be
made in accordance with generally accepted accounting principles, such reference
shall be deemed to be to the generally accepted accounting principles from time
to time approved by the Canadian Institute of Chartered Accountants, or any
successor institute, applicable as at the date on which such calculation is made
or required to be made in accordance with generally accepted accounting
principles.
1.7 SCHEDULES
The following are the Schedules annexed hereto and incorporated by
reference and deemed to be part hereof:
Schedule 1 - Documentation
Schedule 2 - Implementation Schedule
Schedule 3 - Third Party Rights
Exhibit A - Affiliate Sub-License Agreement
Exhibit B - Licensee NPI Royalty Agreement
Exhibit C - Licensee NSR Royalty Agreement
Exhibit D - Sub-Licensee NPI Royalty Agreement
Exhibit E - Sub-Licensee NSR Royalty Agreement
Exhibit F - Licensee Exercise Notice
ARTICLE 2 - LICENSE
2.1 CERTAIN RIGHTS OF LICENSOR
Notwithstanding the provisions of Section 2.2 but subject to Section
3.1, the Licensor shall have the following rights to Commercially Exploit the
Technology:
(i) the right to Commercially Exploit the Technology for Mining
Activities in respect of any Property in which the Licensor or any of its
Affiliates has an interest in the ownership or control of such Property on the
day before the Property is surveyed by the Technology; and
(ii) the right to Commercially Exploit the Technology for Mining
Activities in respect of any Property in respect of which the Licensor, on the
date such Property was surveyed by the Technology:
A. had entered into a written commitment to acquire an
interest in the ownership or control of such Property, or
B. was actively engaged in negotiations to acquire an
interest in the ownership or control of such Property;
(iii) the right to Commercially Exploit the Technology for Mining
Activities in the Republic of Kazakstan; and
(iv) the right to Commercially Exploit Non-Acquired Hyperspectral
Data.
2.2 GRANT OF LICENSE
Subject to the provisions of this Agreement, the Licensor hereby grants
to the Licensee, and the Licensee hereby accepts from the Licensor, an exclusive
worldwide right and license, during the term of this Agreement and any renewals
hereof, to use the Technology for any Mining Activities.
2.3 COVENANTS OF THE LICENSEE
The Licensee covenants and agrees that:
(i) it will not, without the prior written consent of the Licensor
(which consent will not be unreasonably withheld or delayed), during the term of
this Agreement or any renewal hereof, either directly or indirectly, alone or in
connection with Licensed Affiliates or any third party or in any other manner
use, engage, exploit or otherwise take advantage of any technology involving
airborne Hyperspectral imaging for Mining Activities other than the Technology;
(ii) subject to the terms and conditions of any arrangement between the
Licensee and Applied Signal and Image Technology, Inc. or Integrated Spectronics
Pty Ltd., it will not, during the term of this Agreement or any renewal hereof,
challenge or contest the Licensor's ownership or control of, or right to
Commercially Exploit, the Technology; and
(iii) prior to the expiry of this Agreement (including any renewal
hereof) at least seventy-five percent (75%) of the geographic areas (as
established by the corners designated by UTM or latitude and longitude
coordinates) in respect of which the Licensee or Licensed Affiliates shall have
requested to be surveyed by the Licensor pursuant to the provisions of the
Services Agreement shall not have included Properties, which on the date of the
applicable survey, were of a type described in items (a) or (d) (i) of the
definition of Eligible Property.
2.4 Covenant of the Licensor not to authorize others to Commercially
Exploit the Technology for Mining Activities
Subject to the provisions of Section 2.1, the Licensor covenants and
agrees that it will not, without the prior written consent of the Licensee,
during the term of this Agreement or any renewal hereof, either directly or
indirectly, alone or in connection with any Affiliate of the Licensor or any
third party authorize or permit any other person to Commercially Exploit the
Technology for Mining Activities.
2.5 DELIVERY AND DISCLOSURE OF DOCUMENTATION
The Licensor agrees, within the time period set out in Schedule 2, (the
"Implementation Schedule"), to make complete and full disclosure to and provide
copies to the Licensee, however recorded, of the Documentation.
2.6 SUB-LICENSE ARRANGEMENTS
The License conferred hereunder upon the Licensee includes permission
to grant sub-licenses to Licensed Affiliates (each an "Authorized Sub-Licensee")
to use the Technology for any Mining Activities. The Licensee shall be entitled
to grant sub-licenses hereunder by delivering to the Licensor a written notice
specifying the name of the Authorized Sub-Licensee together with six (6) copies
of an Affiliate Sub-Licensee Agreement duly executed by the Licensee and the
Authorized Sub-Licensee and, in the event that such Authorized Sub-Licensee is
an Affiliate of Falconbridge Limited, by Falconbridge Limited, whereupon the
Licensor shall deliver fully executed copies of such agreement to each of the
Licensee and the Authorized Sub-Licensee and, if applicable, Falconbridge
Limited. Each Authorized Sub-Licensee shall not have any right to grant any
further sub-licenses without the prior written consent of the Licensor.
2.7 IMPROVEMENTS
(a) Subject to the terms and conditions of this Agreement, the Licensor
will at all times and from time to time make complete and full disclosure, and
provide copies, of all the Licensor Improvements (including providing full
access to Improvements in the Technology and Documentation related thereto) to
the Licensee, at Licensor's own expense.
(b) The Licensee will at all times and from time to time make complete
and full disclosure, and provide copies of, all the Licensee Improvements to the
Licensor, at Licensee's expense. Subject to any duties owed by the Licensee to
third parties, the Licensee covenants and agrees that the Licensor shall have
the non-exclusive right and royalty-free license to Commercially Exploit
Licensee Improvements.
ARTICLE 3 HYPERSPECTRAL DATA ACQUIRED BY LICENSOR
3.1 RIGHT OF FIRST OFFER IN RESPECT OF CERTAIN HYPERSPECTRAL DATA
Subject to the provisions of Sections 2.1 and 3.2, in the event that
the Licensor or any Affiliate of the Licensor obtains, directly or indirectly,
any Hyperspectral Data (the "Subject Hyperspectral Data"):
(a) pursuant to the Commercial Exploitation of the Technology with
respect to either:
(i) a Property in which the Licensor or any Affiliate of the
Licensor does not own or control an interest on the day before such
Property is surveyed by the Technology; or
(ii) a Property in respect of which the Licensor or any Affiliate
of the Licensor, on the date such Property was surveyed by the Technology:
A had not entered into a written commitment to acquire an
interest in the ownership or control of such Property, or
B was not actively engaged in negotiations to acquire an
interest in the ownership or control of such Property, or
(b) as a result of Commercial Exploitation of the Technology by the
Licensor or any Affiliate of the Licensor for or pursuant to a contractual or
other arrangement between the Licensor or any Affiliate of the Licensor and a
third party,
then, the Licensor shall, within thirty (30) consecutive days of the date on
which the Licensor or its Affiliate first obtained the Subject Hyperspectral
Data, give written notice thereof (the "Hyperspectral Data Notice") to the
Licensee, which notice shall include the Subject Hyperspectral Data, the area
covered by the survey expressed in terms of longitude and latitude or UTM
coordinates and, if applicable, an acknowledgement of the applicable Affiliate
of the Licensor pursuant to which such Affiliate agrees to be bound by the
provisions of Article 3 hereof. The Licensee shall have the right (the
"Hyperspectral Data Acquisition Right"), at its option, for a period (the
"Exercise Period") of sixty (60) consecutive days from the date on which the
Licensee receives the Hyperspectral Data Notice, to acquire all or any portion
of the Subject Hyperspectral Data (such Subject Hyperspectral Data so acquired
being referred to herein as the "Acquired Hyperspectral Data"). All Property
which is located within the geographic limits of the relevant survey is
hereinafter referred to as the "Designated Area" and any interest in the
ownership or control of a Property located within the Designated Area which is
subsequently acquired by the Licensee or any Licensed Affiliate is hereinafter
referred to as a "Designated Property". The Licensee shall be entitled to
exercise the Hyperspectral Data Acquisition Right by delivery to the Licensor of
a notice (the "Licensee Exercise Notice") substantially in the form annexed
hereto as Exhibit F. In the event the Licensee delivers a Licensee Exercise
Notice to acquire Hyperspectral Data, any interest in the ownership or control
of any Designated Property subsequently acquired by the Licensee or any Licensed
Affiliate within the Designated Area shall be deemed to be an Eligible Property,
subject only to the exclusions therefrom set forth in the definition of Eligible
Property.
3.2 HYPERSPECTRAL SURVEYS FOR GOVERNMENTAL BODIES
In the event the Licensor enters into a binding contractual arrangement
with a Governmental Body to complete a Hyperspectral survey pursuant to which
such Governmental Body (i) requires that the Hyperspectral Data collected in
connection with such survey be kept secret and confidential and the Licensor is
prohibited from using such Hyperspectral Data for such reason, and (ii)
covenants and agrees with the Licensor that it will not, directly or indirectly,
disclose such Hyperspectral Data to any person engaged in Mining Activities,
then the Licensor shall have no obligation to the Licensee pursuant to the
provisions of Section 3.1 to give a Hyperspectral Data Notice to the Licensee in
respect of such Hyperspectral Data; provided, however, that such Hyperspectral
Data shall only be excluded from the provisions of Section 3.1 until the date on
which the Licensor is no longer prohibited from using such Hyperspectral Data by
such Governmental Body, then the Hyperspectral Data from such survey shall be
subject to the provisions of Section 3.1.
3.3 CONFIDENTIALITY OF HYPERSPECTRAL DATA ACQUIRED BY LICENSOR
During the period commencing on the initial date of the survey relating
to any Subject Hyperspectral Data and ending on the last day of the Exercise
Period related thereto, the Licensor and each of the directors, officers, and
employees of the Licensor shall not reveal, disclose, transfer, sell or
otherwise dispose of or make available to any person (except as may be required
by applicable law and only after compliance with the provisions of this
paragraph), the Subject Hyperspectral Data or use the Subject Hyperspectral Data
for any purpose whatsoever, including, without limitation, to acquire, directly
or indirectly, any interest in the ownership or control of any Property surveyed
in connection with the production of such Subject Hyperspectral Data. In the
event that the Licensor or any of its directors, officers or employees is
required by applicable law to disclose or otherwise make available the Subject
Hyperspectral Data during the Exercise Period, the Licensor shall notify the
Licensee promptly so that the Licensee may seek a protective order or other
appropriate remedy or, in the Licensee's sole discretion, waive compliance with
the terms of this paragraph. In the event that no such protective order or other
remedy is obtained, the Licensor shall only disclose that portion of the Subject
Hyperspectral Data as the Licensor is advised by counsel is legally required and
will exercise all reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded the Subject Hyperspectral Data.
3.4 HYPERSPECTRAL DATA NOT ACQUIRED BY THE LICENSEE
In the event that the Licensee does not, within the applicable Exercise
Period, deliver a Licensee Exercise Notice to the Licensor, or if the Licensee
delivers a Licensee Exercise Notice in respect of a portion of the applicable
Subject Hyperspectral Data only, or if the Licensee delivers to the Licensor a
Non-Acquisition Notice in respect of all or a portion of the applicable Subject
Hyperspectral Data, then:
(i) the Licensor shall thereafter be entitled to (A) reveal,
disclose, transfer, sell or otherwise dispose of or make
available to any person the Hyperspectral Mineral Data not so
acquired by the Licensee (the "Non-Acquired Hyperspectral
Data"), and (B) to use the Non-Acquired Hyperspectral Data for
any purpose whatsoever, including, without limitation, to
acquire, directly or indirectly, any interest in the ownership
or control of any Property which is not a Designated Property,
and
(ii) upon the earlier of (A) thirty (30) days following the last
day of the applicable Exercise Period, and (B) thirty (30)
days following the date on which the Licensor receives the
applicable Non-Acquisition Notice, the Licensee shall
thereafter be entitled to acquire an interest in the ownership
or control of any Property surveyed in connection with the
production of such Non-Acquired Hyperspectral Data and the
Licensee shall have no obligation whatsoever to grant to the
Licensor any interest in any such Property and the Licensee
shall owe no fiduciary obligation, duty of confidence or other
obligation to the Licensor in respect of such Non-Acquired
Hyperspectral Mineral Data or any interest in any such
Property thereafter acquired by the Licensee or any of its
Affiliates.
3.5 RIGHTS CUMULATIVE
The rights of the Licensee under this Section shall be cumulative. The
Licensee may, upon receipt of a Hyperspectral Data Notice, assign its rights
under this Section, upon notice to the Licensor, to a Licensed Affiliate
provided that such Licensed Affiliate agrees to be bound by the terms of this
Agreement.
ARTICLE 4 - ACQUISITION OF AN ELIGIBLE PROPERTY
4.1 NOTIFICATION OF ACQUISITION BY LICENSEE
(a) The Licensee shall give written notice (an "Acquisition Notice") to
the Licensor of the acquisition by the Licensee of an interest in the ownership
and control of an Eligible Property within thirty (30) consecutive days of such
acquisition, which notice shall describe in reasonable detail such Eligible
Property, the date of acquisition thereof by the Licensee and the interest of
the Licensee therein acquired.
(b) Without limiting the generality of Section 4.1(a), in the event
that the Licensee has delivered to the Licensor an Acquisition Notice relating
to the acquisition by the Licensee of an interest in the ownership and control
of an Eligible Property which, at the date of such Acquisition Notice was not an
NSR Eligible Interest in such Eligible Property, and the Licensee subsequently
acquires an NSR Eligible Interest therein, then the Licensee shall deliver to
the Licensor a notice (a "Subsequent Acquisition Notice") of the acquisition of
such NSR Eligible Interest within thirty (30) consecutive days of such
acquisition, which notice shall describe in reasonable detail such Eligible
Property, the date of acquisition of such interest therein by the Licensee and
the interest of the Licensee therein acquired.
4.2 LICENSEE ROYALTY AGREEMENT
The Licensor and the Licensee hereby mutually covenant and agree as
follows:
(i) if an Acquisition Notice or Subsequent Acquisition Notice
delivered hereunder relates to the acquisition by the Licensee
of an interest (an "NSR Eligible Interest") in an Eligible
Property:
(I) which is a 100% undivided Permanent Ownership
Interest therein; and
(II) in respect of which there are, as at the date of
acquisition, no existing royalties or similar
encumbrances in favour of third parties thereon,
the Licensor and the Licensee shall execute and deliver a
Licensee NSR Royalty Agreement within ten (10) consecutive
Business Days of the date on which such Acquisition Notice or
Subsequent Acquisition Notice, as the case may be, is
delivered hereunder; and
(ii) if an Acquisition Notice delivered hereunder relates to the
acquisition of an interest in an Eligible Property which, on
the date of such Acquisition Notice, is not an NSR Eligible
Interest, the Licensor and Licensee shall execute and deliver
a Licensee NPI Royalty Agreement within ten (10) consecutive
Business Days of the date on which the Licensee acquires a
Permanent Ownership Interest in the Eligible Property in
respect of which such Acquisition Notice is delivered
hereunder.
In each case, such Royalty Agreement shall be binding on the parties thereto
upon the execution and delivery thereof by each party thereto.
4.3 NOTIFICATION OF PROPOSED ACQUISITION
Without limiting the generality of Section 4.1, the Licensee shall give
written notice (the "Pre-Acquisition Notice") to the Licensor of any proposed
acquisition of a Property which the Licensee has determined is of a type
described in item (b) or item (d) of the definition of "Eligible Property",
which notice shall specify the basis for such determination. The Licensor shall
be entitled to challenge such determination by delivery to the Licensee of a
written notice (the "Licensor Objection Notice") to that effect within thirty
(30) consecutive days of receipt of the Pre-Acquisition Notice by the Licensor.
If the Licensor delivers a Licensor Objection Notice and the parties are not
able to resolve such dispute within a period of thirty (30) consecutive days
commencing on the date of receipt by the Licensee of the Licensor Objection
Notice, the parties shall submit the dispute to arbitration pursuant to Section
9.1. If the Licensor does not deliver a Licensor Objection Notice within such
thirty (30) day period, the Licensor shall be deemed to have accepted the
Licensee's determination as to whether the Property described in such
Pre-Acquisition Notice constitutes an Eligible Property for the purposes hereof
and such determination shall thereupon be final and binding on the Licensor and
the Licensee.
4.4 TITLE TO HYPERSPECTRAL DATA ACQUIRED PURSUANT TO THIS AGREEMENT OR THE
SERVICES AGREEMENT
The Licensee will own all right, title and interest in and to all
Hyperspectral Data acquired by the Licensee pursuant to the Services Agreement
or this Agreement free and clear of all liens, charges and encumbrances. The
Licensee agrees to transfer and assign to the Licensor all of the Licensee's
right, title and interest in and to such Hyperspectral Data which is not
associated with any Eligible Property on the day immediately following the last
day of the period which is two (2) consecutive years from the date on which the
applicable Hyperspectral Data was received by the Licensee pursuant to the
Services Agreement or this Agreement, as the case may be; provided that the
Licensee shall be entitled to retain a copy of, and to use, such Hyperspectral
Data. During such two (2) year period, such Hyperspectral Data shall constitute
Confidential Information for the purposes Article 7 hereof.
4.5 NOTIFICATION OF EXCLUDED HYPERSPECTRAL DATA
The Licensor shall give written notice (the "Excluded Data Notice") to
the Licensee forthwith upon any determination by the Licensor to not deliver to
the Licensee a Hyperspectral Data Notice in respect of any Hyperspectral Data
which relates to a Property described in paragraphs 3.1(a)(i) or 3.1(a)(ii),
which notice shall specify the basis for such determination. The Licensee shall
be entitled to challenge such determination by delivery to the Licensor of a
written notice (the "Licensee Objection Notice") to that effect within thirty
(30) consecutive days of receipt of the Excluded Data Notice by the Licensor. If
the Licensee delivers a Licensee Objection Notice and the parties are not able
to resolve such dispute within a period of thirty (30) consecutive days
commencing on the date of receipt by the Licensee of the Licensee Objection
Notice, the parties shall submit the dispute to arbitration pursuant to Section
9.1. If the Licensee does not deliver a Licensee Objection Notice within such
thirty (30) day period, the Licensee shall be deemed to have accepted the
Licensor's determination as to whether the Subject Hyperspectral Data is subject
to delivery to the Licensee pursuant to Section 3.1 and such determination shall
thereupon be final and binding on the Licensor and the Licensee.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING CORPORATE CAPACITY
OF LICENSOR
The Licensor represents, warrants and covenants to the Licensee as
follows:
(a) the Licensor is a corporation duly incorporated and validly
existing under the laws of State of Utah;
(b) the Licensor has full power and authority to enter into this
Agreement and the Services Agreement, to grant the License and
deliver the License to the Licensee free from all liens,
charges and encumbrances and to perform each and every
covenant and agreement herein contained and contained in the
Services Agreement to be observed or performed by it;
(c) the Licensor has taken all necessary corporate action to
authorize the execution, delivery and performance of this
Agreement and the Services Agreement, and each of this
Agreement and the Services Agreement constitutes a valid and
legally binding obligation of the Licensor enforceable against
it in accordance with its terms, subject to applicable
bankruptcy, insolvency and other laws of general application
limiting the enforceability of creditors' rights and to
general principles of equity;
(d) the execution and delivery of this Agreement and the Services
Agreement, the grant of the License and the performance of the
covenants and agreements herein contained and contained in the
Services Agreement, including, without limitation, the
obligations of the Licensor under Section 3.1, are not limited
or restricted by, and are not in conflict with, and will not
result in a breach of, the constating documents or by-laws of
the Licensor, or any applicable law, rule or regulation or any
contract, agreement or other instrument to which the Licensor
is a party or is bound;
(e) the Licensor shall give written notice to the Licensee
forthwith (and in any event within 48 hours) upon the breach
by the Licensor or any Affiliate of the Licensor of any
contract, agreement or other instrument to which the Licensor
or any Affiliate thereof is bound and which relates to, or
may restrict, (i) the use by the Licensor or any Affiliate
thereof of the Technology, or (ii) the performance by the
Licensor of its obligations hereunder or under the Services
Agreement (such contracts, agreements and instruments being
collectively referred to herein as the "Technology
Agreements"). Such notice shall include a full description of
the applicable contract, agreement or instrument and of the
actions being taken by the Licensor or its Affiliate, as
applicable, to remedy such breach. The Licensee may, at its
option (but shall be under no obligation to do so) and at the
expense of the Licensee, take such actions for and on behalf
of the Licensor or its Affiliate, as applicable, to remedy
such breach;
(f) neither the Licensor nor any Affiliate of the Licensor is in
breach of its respective obligations under any Technology
Agreement and each such Technology Agreement is in full force
and effect; and
(g) the Licensor hereby acknowledges and agrees that the Licensee
or one or more of its Affiliates has or may enter into one or
more arrangements with, or receive the benefit of certain
covenants from, Applied Signal and Image Technology, Inc. and
Integrated Spectronics Pty Ltd. with respect to the use of the
Technology and Hyperspectral Data. The Licensor agrees that
the Licensee shall be entitled to rely upon and enforce its
rights under such arrangements and covenants and that neither
the Licensor nor any Affiliate thereof shall challenge or
contest such rights.
5.2 REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING THE TECHNOLOGY
The Licensor represents, warrants and covenants to the Licensee as
follows:
(a) the Licensor is the legal and beneficial owner of the
Commercial Exploitation rights to the Technology, and subject to the rights
reserved to Integrated Spectronics Pty. Ltd. and Applied Signal and Image
Technology Inc., as described in Schedule 3, to the best of the knowledge and
belief of the Licensor no person other than the Licensor has any right, title or
interest in or to the Commercial Exploitation rights to the Technology;
(b) to the best of the knowledge and belief of the Licensor, the
Technology does not infringe any existing intellectual property right or
proprietary right of any third party;
(c) to the best of the knowledge and belief of the Licensor, there
are no proprietary rights registrations for or in respect of the Technology;
(d) no notice has been received by the Licensor nor is any notice
anticipated, that any rights being licensed to the Licensee in the Technology
are invalid or unenforceable or that any infringement or misappropriation
thereof, in whole or in part, by any third person has occurred;
(e) no person has been authorized by the Licensor or any of its
affiliates to use, distribute or Commercially Exploit the Technology for Mining
Activities, and the Licensor is not aware of any person who is using or
Commercially Exploiting the Technology for Mining Activities other than the
parties described in Schedule 3;
(f) the Licensor will not disclose or furnish to the Licensee any
information or data which is owned by or proprietary to any third person,
without the prior written consent of the Licensee; and
(g) the Technology will conform to and operate in accordance with
the product specifications in the Documentation.
5.3 REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING CORPORATE CAPACITY
OF LICENSEE
The Licensee represents, warrants and covenants to the Licensor as
follows:
(a) the Licensee is a corporation duly incorporated and validly
existing under the laws of Ontario;
(b) the Licensee has full power and authority to enter into this
Agreement and to perform each and every covenant and agreement herein contained
to be observed or performed by it;
(c) the Licensee has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement, and this Agreement
constitutes a valid and legally binding obligation of the Licensee enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency and other laws of general application limiting the enforceability of
creditors' rights and to general principles of equity; and
(d) the execution and delivery of this Agreement and the performance of
the covenants and agreements herein contained are not limited or restricted by,
and are not in conflict with, and will not result in a breach of, the constating
documents or by-laws of the Licensee, or any applicable law, rule or regulation
or any contract, agreement or other instrument to which the Licensee is a party
or is bound, or will give rise to any duty of confidence on the part of the
Licensee.
5.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations, warranties and covenants of the Licensor and the
Licensee, respectively, contained in this Agreement shall survive the execution
and delivery of this Agreement, notwithstanding any investigations or
examinations which may be made by the Licensor or the Licensee, as the case may
be, or their respective representatives. Each of the Licensor and the Licensee
shall ensure that its respective representations and warranties set out in this
Agreement are true and correct in all material respects throughout the term of
this Agreement and any renewal hereof.
ARTICLE 6 - INFRINGEMENT
6.1 DEFENCE OF INFRINGEMENT CLAIMS
During the term of this Agreement, the Licensor shall indemnify and
hold harmless the Licensee and will defend at its own expense any action brought
against the Licensee which is based on a claim that the Technology infringes,
misappropriates or violates any intellectual property right or proprietary right
(a "Claim") and the Licensor will pay any costs, settlements, damages and legal
fees finally awarded against the Licensee with respect to such Claim, provided
that the Licensee notifies the Licensor promptly in writing of the Claim,
permits the Licensor fully to control the defense of the Claim, and does not
agree to any settlement of the Claim without the Licensor's written consent.
Licensor's obligations under this section shall apply to Claims based solely on
the infringement of the Technology and shall not extend to any Licensee
Improvements made thereto. The Licensee shall not consent to any judgement or
enter into any settlement of a Claim or do anything in connection therewith
which could affect the validity of, or Licensor's title to or interest in the
Technology, without the Licensor's prior written consent. The Licensee agrees to
assist the Licensor in defending all Claims. In the event that any Claims arise
as a result of any Licensee Improvement, the Licensee shall indemnify and hold
harmless the Licensor against any and all damages, settlement costs and expenses
(including reasonable legal fees) suffered or incurred by the Licensor in
respect thereof. This section 6.1 states the entire obligations of the Licensor
and the sole remedies of the Licensee with respect to any claim pertaining to
the infringement, misappropriation or violation of an intellectual property
right or proprietary right related to the Technology.
ARTICLE 7 - CONFIDENTIALITY
7.1 CONFIDENTIALITY OBLIGATION
(a) Each party acknowledges that Confidential Information will be
exchanged between the parties pursuant to this Agreement. Each party shall use
no less than the same means it uses to protect its similar confidential and
proprietary information, but in any event not less than reasonable means, to
prevent the disclosure and to protect the confidentiality of the Confidential
Information of the other party. Each party agrees that it will not disclose any
Confidential Information of the other party to any other person or use any
Confidential Information of the other party except for the purposes of this
Agreement and as authorized herein.
(b) Notwithstanding section 7.1(a) but without limiting the provisions
of Section 3.1 the Recipient of Confidential Information may use or disclose the
Confidential Information to the extent that the Recipient can show that such
Confidential Information is (i) already known by the Recipient without an
obligation of confidentiality, (ii) publicly known or becomes publicly known
through no unauthorized act of the Recipient, (iii) rightfully received from a
third party, (iv) independently developed by the Recipient without use of the
information of the Disclosing Party, (v) approved by the Disclosing Party for
disclosure, or (vi) required to be disclosed pursuant to a requirement of a
Governmental Body or law so long as the Recipient provides the other party with
notice of such requirement prior to any such disclosure and takes all reasonable
steps available to maintain the information in confidence.
7.2 THIRD PARTY INFORMATION
Neither the Licensor nor the Licensee shall disclose to the other any
proprietary, confidential, secret, or private information of any third person
which it is under a duty not to disclose
7.3 LOSS OF CONFIDENTIAL INFORMATION
In the event of any unauthorized disclosure or loss of, or inability to
account for, Confidential Information of the Disclosing Party, the Recipient
will notify the Disclosing Party immediately.
7.4 ENFORCEMENT OF CONFIDENTIALITY OBLIGATION
Each party hereto acknowledges and agrees that irreparable injury may
result to the other party if such party breaches the provisions of this
Agreement relating to Confidential Information and that damages may be an
inadequate remedy in respect of such breach. Each party hereby agrees in advance
that, in the event of such breach, the other party shall be entitled, in
addition to such other remedies, damages and relief as may be available under
applicable law, to the granting of injunctive relief in such party's favour.
ARTICLE 8 - TERM AND TERMINATION
8.1 TERM
Subject to earlier termination as provided for herein, this Agreement
shall be effective upon the Effective Date and shall continue in full force and
effect for an initial term (the "Initial Term") of three (3) years; provided
that either party may terminate this Agreement at the end of the Initial Term
upon giving written notice to the other party not less than one hundred and
eighty (180) days prior to the end of the Initial Term. If not terminated by
either party at the expiry of the Initial Term, this Agreement will
automatically renew for an additional term of three (3) years; provided that
either party may terminate this Agreement after the Initial Term upon giving
written notice to the other party not less than one hundred and eighty (180)
days prior to the date set forth therein for termination.
8.2 TERMINATION BY THE LICENSOR
(a) The Licensor may at its option terminate this Agreement with
immediate effect by giving the Licensee written notice of termination upon the
happening of any of the following events:
(i) if any material breach or default under any provision of this
Agreement by the Licensee occurs and continues in effect for thirty (30)
consecutive days following the giving of written notice of same specifically
referring to this Section 8.2(a) to the Licensee by the Licensor or such longer
period as may reasonably be necessary to remedy such breach or default, provided
that the Licensee proceeds diligently to remedy such breach or default
throughout such period; or
(ii) any amount which has accrued due to the Licensor under the
Services Agreement remains unpaid for a period of thirty (30) consecutive days
following the date on which such amount was due and payable; provided that the
Licensee shall not be in default of its obligations under this Section 8.2 (b)
as a result of a failure or delay by the Licensor to provide such services as
are contemplated by the Services Agreement or to invoice the Licensee for
services rendered or as a result of the Licensee or any Authorized Sub-Licensee
having determined to contest any such invoice in good faith.
(b) This Agreement will terminate on the tenth day following the date
on which the Licensee or the Authorized Sub-Licensees fail to retain the
services of the Licensor under the Services Agreement for an aggregate amount
equal to or greater than:
(A) US $750,000 prior to the first anniversary of the Effective
Date,
(B) US $2,750,000 prior to the second anniversary of the
Effective Date,
(C) US $5,750,000 prior to the end of the Initial Term, or
(D) US $3,000,000 in each twelve (12) month period following the
end of the Initial Term;
provided that the respective amounts referred to in items (A), (B), (C) and (D)
above shall be reduced by an amount equal to the gross proceeds realized by the
Licensor or an Affiliate thereof during the respective periods referred to in
such items from the provision by the Licensor or any Affiliate thereof of
Hyperspectral survey services to any person (other than the Licensor or any
Affiliate thereof) which has retained such services as a result of the sole and
exclusive efforts of the Licensee or an Affiliate thereof. The Licensor shall,
prior to the last Business Day of each period referred to in such items, notify
the Licensee of the aggregate amount so realized during such period.
8.3 TERMINATION BY THE LICENSEE
(a) The Licensee may at its option terminate this Agreement with
immediate effect by giving the Licensor written notice of termination upon the
happening of any of the following events:
(i) if any material breach or default under any provision of this
Agreement by the Licensor occurs which continues in effect for thirty (30)
consecutive days following the giving of written notice of same specifically
referring to this Section 8.3(a)(i) to the Licensor by the Licensee or such
longer period as may reasonably be necessary to remedy such breach or default,
provided that the Licensor proceeds diligently to remedy such breach or default
throughout such period;
(ii) if any material breach or default under any provision of the
Services Agreement by the Licensor occurs which continues in effect for thirty
(30) consecutive days following the giving of written notice of same
specifically referring to this Section 8.3(a)(ii) and the applicable section of
the Services Agreement to the Licensor by the Licensee or such longer period as
may reasonably be necessary to remedy such breach or default, provided that the
Licensor proceeds diligently to do so throughout such period; or
(iii) if any representation or warranty made by the Licensor in or in
connection with this Agreement is false or inaccurate in any material respect
and continues to be so for a period of not less than thirty (30) consecutive
days following the giving of written notice of same specifically referring to
this Section 8.3(a)(iii) to the Licensor by the Licensee.
(b) In addition, the Licensee may, at its option, terminate this
Agreement if the Licensee is:
(i) dissatisfied with the performance of the Technology; or
(ii) concludes that the Technology has become obsolete,
which failure is capable of being cured and which remains uncured after the
Licensee provides to the Licensor prior written notice describing such failure
of not less than 180 days and during such time the failure remains uncured.
8.4 TERMINATION FOR INSOLVENCY
This Agreement may be terminated by either party by notice to the other
party (the "Insolvent Party") in the event the Insolvent Party shall dissolve,
cease active business operations or liquidate and not continue business in
another entity or form, or in the event that the Insolvent Party shall have been
determined to be insolvent by a court of competent jurisdiction, or voluntary
bankruptcy, insolvency, winding up or reorganization proceedings shall have been
commenced by the Insolvent Party, or such proceedings shall have been brought
against the Insolvent Party, or the Insolvent Party shall have made a general
assignment for the benefit of creditors, or a receiver of all or any substantial
part of the Insolvent Party's assets shall have been appointed, or the Insolvent
Party shall have suffered or incurred any similar action in consequence of debt.
8.5 WAIVER OF RIGHTS
The failure of a party to terminate this Agreement for any of the
reasons specified in this Article 8 shall not in any way be deemed a waiver of
such party's rights in respect thereof or otherwise limit its rights to enforce
the obligations of the other party hereunder.
ARTICLE 9 - GENERAL
9.1 ARBITRATION
Without limiting the provisions of Article 9, each party hereto agrees
to negotiate the successful resolution of any controversy, claim or other
dispute arising out of or relating to this Agreement for a period of thirty (30)
consecutive days following receipt of a written request to that effect from the
other party. Upon the expiry of such thirty (30) day period, any outstanding
controversy, claim or other dispute arising out of or relating to this
Agreement, or the breach thereof, shall be conclusively settled by arbitration
in accordance with the rules of the Model Law Schedule of the International
Commercial Arbitration Act (Ontario), and judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction. Any such
arbitration shall be held at Xxxxxxx, Xxxxxxx, Xxxxxx, unless otherwise agreed.
The arbitration will be conducted by a panel of three (3) arbitrators with
suitable expertise in Mining Activities and remote sensing. Each party shall be
entitled to appoint one (1) arbitrator and those arbitrators shall appoint a
third arbitrator. The decision of the arbitrators shall be final and binding on
the parties and neither party shall appeal the decision on any basis to any
court. Nothing in this Section shall prevent either party from applying for or
obtaining any interim, interlocutory or preliminary injunctive relief related to
the infringement or misappropriation of any intellectual property right in any
court of competent jurisdiction or from bringing any claim for contribution or
indemnity in the same court as the court in which the suit is brought by any
third person.
9.2 INDEPENDENT CONTRACTORS
This Agreement does not constitute and shall not be construed as
constituting a partnership or joint venture between the parties. Save as
otherwise provided for expressly in this Agreement, neither party shall have any
right to obligate or bind the other in any manner whatsoever and nothing
contained in this Agreement shall give or is intended to give any rights of any
kind to persons not a party to this Agreement. Each party shall ensure that
neither it nor any of its employees or representatives represent to any third
party that it or they are servants or agents of the other.
9.3 SET-OFF
In addition to all other rights and remedies of the parties pursuant to
this Agreement or otherwise, the parties shall be entitled to set-off the amount
of any claim that it has against the other party pursuant to the provisions of
this Agreement or otherwise arising in connection with the transactions
contemplated hereby and a reasonable estimate of the amount of any claim,
liability or damages for which one party is or may be liable against any amounts
payable by the other party, provided that, in the event that subsequent to the
time of set-off made by one party, the liability of the other party is
determined to be less than the amount set-off by the first party, the first
party shall pay to the other party the excess amount of such set-off forthwith
following such determination.
9.4 FURTHER ASSURANCES
Each of the parties hereto shall from time to time execute and deliver
all such further documents and instruments and do all acts and things as the
other party may reasonably require to effectively carry out or better evidence
or perfect the full intent and meaning of this Agreement. Where the Licensor or
the Licensee is required by the other under this Section to do anything
including executing and delivering any documents, such party shall comply with
such request with seven (7) Business Days of the request.
9.5 BENEFIT OF THE AGREEMENT
This Agreement shall enure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties.
9.6 AMENDMENTS AND WAIVER
No modification of or amendment to this Agreement shall be valid or
binding unless set out in writing and duly executed by both of the parties and
no waiver of any breach of any term or provision of this Agreement shall be
effective or binding unless made in writing and signed by the party purporting
to give the same and, unless otherwise provided, shall be limited to the
specific breach waived.
9.7 ASSIGNMENT BY THE LICENSOR
The Licensor may sell, transfer, assign or in any other way dispose of
this Agreement or any of its rights or obligations hereunder at any time without
the consent of the Licensee to an Affiliate of the Licensor or in connection
with a merger, amalgamation or other re-organization of the Licensor provided
that the successor, Affiliate or assignee, as the case may be (i) is immediately
after the assignment or other applicable transaction the owner of all right,
title and interest in the Technology and is the person who will continue the
development and Commercial Exploitation thereof, and (ii) thereupon undertakes
to the Licensee in writing to be bound by the provisions of this Agreement in
all respects and to the same extent as the Licensor is bound.
9.8 ASSIGNMENT BY THE LICENSEE
The Licensee may sell, transfer, assign or in any other way dispose of
this Agreement or any of its rights and obligations hereunder at any time
without the consent of the Licensor to an Affiliate of the Licensee or in
connection with a merger, amalgamation or other re-organization of the Licensee
provided that the successor, Affiliate or assignee, as the case may be,
undertakes to the Licensor in writing to be bound by the provisions of this
Agreement in all respects and to the same extent as the Licensee is bound.
9.9 NOTICES
Any demand, notice or other communication to be given in connection
with this Agreement may be given in writing and may be given by personal
delivery, registered mail, courier or facsimile addressed to the recipient as
follows:
To the Licensor:
Earth Search Sciences, Inc.
000 Xxxxx 0xx Xxxxxx, Xxxxx #0
XxXxxx, Xxxxx 00000
U.S.A.
Attention: President
Fax No.: (000) 000-0000
To the Licensee:
Noranda Mining and Exploration Inc.
Xxxxx 0000
0 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Secretary
Fax No.: (000) 000-0000
or to such other address, facsimile number or individual as may be designated by
notice by either party to the other. Any demand, notice or other communication
given by personal delivery shall be conclusively deemed to have been given on
the day of actual delivery thereof and, if given by registered mail, on the
tenth (10th) business day following the deposit thereof in the mail and, if
given by courier, on the third (3rd) business day following the sending thereof
and, if given by facsimile, on the day of transmittal thereof if given during
the normal business hours of the recipient and on the next business day if not
given during such hours on any day. If the party giving any demand, notice or
other communication knows or ought reasonably to know of any difficulties with
the postal system which might affect the delivery of mail, such demand, notice
or other communication shall not be mailed but shall be given by personal
delivery, courier or facsimile.
9.10 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein
without reference to its conflict-of-law rules. The Licensor hereby submits to
the non-exclusive jurisdiction of the courts of the Province of Ontario for any
legal action arising out of this Agreement or the performance of the obligations
hereunder or thereunder.
9.11 RIGHTS AND REMEDIES
All rights and remedies of either party under this Agreement shall be
cumulative and may be exercised singularly or concurrently.
9.12 FORCE MAJEURE
If the performance of this Agreement, or of any obligation hereunder,
is interfered with, hindered or prevented by any cause or event which is beyond
the reasonable control of one of the parties, including, without limitation, an
act of God, strike, lockout, act of public enemy, war declared or undeclared,
blockade, revolution, riot, insurrection, civil commotion, lightning, fire,
storm, earthquake, explosion, governmental restraint, embargoes, inability to
obtain or delay in obtaining governmental approvals, permits, licenses or
allocations, acts of any groups asserting aboriginal rights or any environmental
agencies or pressure groups, and any other cause whether of the kind
specifically enumerated above or otherwise, which is beyond the reasonable
control of a party, notwithstanding anything to the contrary contained herein,
the failure or delay in performance by either party shall be excused on a day to
day basis to the extent of such interference, and the other party will likewise
be excused from performance of its obligations on a day to day basis to the
extent such party's obligations relate to the performance so interfered with,
provided that the party so affected uses its reasonable efforts to remove such
causes of non-performance.
9.13 SEVERABILITY
If a court or other lawful authority of competent jurisdiction declares
any provision, Article or Section of this Agreement invalid, illegal or
unenforceable, this Agreement will continue in full force and effect with
respect to all other provisions, Articles and Sections and all rights and
remedies accrued under such other provisions, Articles and Sections will survive
any such declaration.
9.14 PUBLIC ANNOUNCEMENTS
Except as required by applicable law, regulatory requirement, or the
rules or by-laws of any stock exchange, no public announcement or press release
concerning the transactions contemplated by this Agreement shall be made except
with the prior consent and approval of both parties.
9.15 ENTIRE AGREEMENT
This Agreement and the Schedules and Exhibits hereto constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof and cancels and supersedes any prior understandings and agreements
between the parties hereto with respect hereto.
IN WITNESS WHEREOF the parties have executed this Agreement as of the
date first above written.
NORANDA MINING AND EXPLORATION INC.
By: /s/ Xxxxx X. Xxxxxxx
Name: X.X. Xxxxxxx
Title: V.P.
EARTH SEARCH SCIENCES, INC.
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Chairman
SERVICES AGREEMENT
BETWEEN
EARTH SEARCH SCIENCES, INC.
- and -
NORANDA MINING AND EXPLORATION INC.
MADE AS OF
DECEMBER 16, 1997
SERVICES AGREEMENT
THIS AGREEMENT is made as of the 16th day of December, 1997.
B E T W E E N:
EARTH SEARCH SCIENCES, INC.
(hereinafter referred to as "ESSI"),
- and -
NORANDA MINING AND EXPLORATION INC.
(hereinafter referred to as "Noranda"),
WHEREAS the parties hereto entered into the hyperspectral
technology license agreement (the "License Agreement") dated as of December 16,
1997 pursuant to which ESSI granted certain rights and licenses to Noranda
thereunder;
AND WHEREAS pursuant to the terms of the License Agreement,
Noranda may sub-license its rights under the License Agreement to Affiliates of
Noranda;
AND WHEREAS, as a condition to Noranda entering into the
License Agreement, ESSI agreed to provide Noranda and Authorized Sub-licensees
with certain services;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration
of the premises and mutual covenants contained herein and other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties agree as follows:
ARTICLE 1 - INTERPRETATION
1.1 In this Agreement, including the recitals, exhibits and schedules hereto,
all capitalized terms used, but not otherwise defined, herein shall have the
meanings ascribed thereto in the License Agreement and:
"Agreement" means this agreement and all schedules and exhibits and all
amendments made hereto by written agreement by the parties hereto;
"Defect" means any defect or error in the Software which causes the Software, or
any part thereof, to fail to perform in accordance with its related
Documentation;
"Effective Date" means the date of this Agreement;
"Force Majeure Event" has the meaning ascribed thereto in Section 7.18;
"Overflight and Analysis Services" means the Survey services to be provided by
ESSI to Noranda hereunder;
"Requirements of Environmental Law" means all requirements of the common law,
civil law or of statutes, regulations, by-laws, ordinances, treaties, judgments
and decrees, and (to the extent that they have the force of law) rules,
policies, guidelines, orders, approvals, notices, permits, directives, and the
like, of any federal, territorial, provincial, state, regional, municipal or
local judicial, regulatory or administrative agency, board or governmental
authority in Canada, the United States and any other jurisdiction in which the
ESSI or any of its Affiliates carries on business (including, without
limitation, the conduct of a Survey) or has assets relating to environmental or
occupational health and safety matters and the assets and undertaking of ESSI or
its Affiliates and the intended uses thereof;
"SWIR" means short wave infrared;
"Support Services" shall have the meaning ascribed to such term in Section 3.1;
"Services" means, collectively, the Overflight and Analysis Services and the
Support Services;
"Surveys" means the airborne Hyperspectral surveys using the Technology to be
performed by ESSI hereunder; and
"Work Plan" has the meaning ascribed thereto in Section 2.2.
1.2 HEADINGS
The division of this Agreement into Articles and Sections and
the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement. The terms "this
Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular Article or Section or other portion hereof
and include any agreement supplemental hereto. Unless something in the subject
matter or context is inconsistent therewith, references herein to Articles or
Sections are to Articles or Sections of this Agreement.
1.3 EXTENDED MEANINGS
In this Agreement words importing the singular number only
shall include the plural and vice versa, and words importing persons shall
include individuals, partnerships, associations, trusts, unincorporated
organizations and corporations. The terms "provision" and "provisions" refer to
terms, conditions, provisions, covenants, obligations, undertakings, warranties
and representations in this Agreement.
1.4 AMBIGUITIES
The parties hereto agree that each of them has participated in
the drafting of this Agreement and that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not apply
to the interpretation of this Agreement.
1.5 CURRENCY
Unless otherwise provided herein, all references to currency
herein are to lawful money of the United States of America.
1.6 SCHEDULES AND APPENDIXES
The following are the Schedules and Appendixes annexed hereto
and incorporated by reference and deemed to be part hereof:
Schedule A - Form of Work Plan
Appendix 1 - Guidelines
ARTICLE 2 - OVERFLIGHT AND ANALYSIS SERVICES
2.1 SURVEYS
Upon the terms and subject to the conditions herein set forth,
ESSI agrees to undertake and perform Surveys as directed by Noranda over such
lands as Noranda may from time to time in writing direct.
2.2 WORK PLANS
During the term of this Agreement ESSI will provide to Noranda
the Overflight and Analysis Services to be described in work plans to be
separately executed by ESSI and Noranda (a "Work Plan"). Each Work Plan shall
automatically incorporate the provisions of this Agreement, shall be in
substantially the form of Schedule A and shall describe in detail the
particulars regarding the Overflight and Analysis Services to be provided, the
equipment to be provided by ESSI, third party services to be sub-contracted for
by ESSI, the price to be paid by Noranda, the implementation schedule for such
services and such additional provisions as the parties may agree upon.
2.3 DELIVERY AND ACCEPTANCE OF WORK PLANS
Unless otherwise agreed to in writing by the parties, orders
for Overflight and Analysis Services shall be governed by the terms of this
Agreement and the applicable Work Plans and nothing contained in any purchase
order, letter or other instrument shall in any way modify, vary, change or add
any term or condition hereto. Upon delivery of a Work Plan to ESSI, ESSI shall
use its best efforts to comment on and propose revisions, if necessary, to such
Work Plan by notice to the Customer within ten (10) Business Days (but shall, in
any event, do so within fifteen (15) Business Days unless the parties otherwise
agree in writing).
2.4 HYPERSPECTRAL DATA
Unless otherwise specified in a Work Plan, upon completion of
the Work Plan, ESSI shall deliver to the Customer to which such Work Plan
relates all Hyperspectral Data created during the course of the Overflight and
Analysis Services conducted pursuant to the Work Plan. Subject to the terms of
the License Agreement, the Customer will own all right, title and interest in
and to all Hyperspectral Data created as a result of the Overflight and Analysis
Services performed pursuant to a Work Plan.
2.5 SCOPE OF THE SURVEYS
(a) A Survey will consist of areas designated by Noranda in a Work
Plan. The flying areas will be submitted to ESSI with the corners designated by
UTM or latitude and longitude coordinates. The survey area description shall be
specifically as described in Schedule 1.
(b) Subject to Section 2.15, all equipment, materials, fuel, personnel,
and any other expenses required for the successful completion of the Survey will
be provided by ESSI at its own cost and expense.
(c) Where required by law, or as agreed by Noranda to be clearly in the
interest of a successful completion of the Survey, Noranda will participate in
permit applications and/or presentations to the appropriate authorities having
jurisdiction.
2.6 PERSONNEL
ESSI will provide an experienced and skilled crew to complete
the requested Survey. Unless otherwise designated in writing, the crew will
consist of the following personnel:
(i) flight crew or crews as required to successfully
complete the Survey, including pilot, co-pilot and
navigator;
(ii) 1 remote sensing specialist/data processor; (iii) 1
electronic technician/instrument operator; and (iv) 1 aircraft
maintenance engineer.
2.7 FIELD PROCESSING AND FIELD PRODUCTS
(a) ESSI will ensure that experienced data processor will selectively
review the Hyperspectral Data produced by a Survey on a flight-by-flight basis
to ensure that such data is of an acceptable quality and will produce the
following field products:
(i) flight path;
(ii) image data; and
(iii) hyperspectral image identification.
(b) Hyperspectral Data will be made available to Noranda at the Survey
base site of operations. If requested by Noranda, ESSI shall provide an
electronic copy (or such media as requested by Noranda) and a hard copy of
Hyperspectral Data on a site (target) by site basis.
2.8 EQUIPMENT AND INSTRUMENTATION PROVIDED BY ESSI
(a) The aircraft provided for the Survey will be identified by ESSI at
least fifteen (15) days prior to mobilizing to the Survey site and prior to
commencing the Survey. ESSI shall use its best efforts to ensure that the
selection of the aircraft will be based on achieving the lowest cost without
compromising safety and survey quality. Noranda, in consultation with ESSI,
shall have the option to select an alternative aircraft platform and instrument
configuration without compromising safety and survey quality, provided however
that in such event Noranda shall assume all additional costs, if any, of
reinstallation and survey delay.
(b) The airborne Technology operated by ESSI shall be an ESSI Probe
Hyperspectral system. The following related equipment shall also be installed in
the aircraft:
(i) a probe series system;
(ii) precision altimeter;
(iii) a GPS real-time navigation/recording system; and
(iv) a digital data acquisition system.
(c) The following equipment shall, at the option of Noranda, be
installed at the base of operations or shall be accessible to Noranda from the
base operations of the applicable Survey:
(i) XXXX Prospectre software or other type of
software acceptable to Noranda; and
(ii) a computer with a colour printer.
2.9 FLYING SPECIFICATIONS
(a) In conducting a Survey, the aircraft will fly traverse lines in
such a manner as to ensure the survey area is completely covered. The flight
pattern will also depend on the resolution requested by Noranda (which shall be
5 to 10 meter data unless the parties otherwise agree in writing). Prior to
undertaking the Survey, ESSI will submit to Noranda the proposed flight pattern
with at least 25% planned imagery overlap between lines, except (i) as may be
otherwise agreed to pursuant to a Work Plan, or (ii) where prohibited by
obstacles, hazards or act of God in which case Noranda may elect not to proceed
with the Survey.
(b) The traverse line spacing and direction will be determined in
consultation with Noranda to ensure adequate coverage and resolution.
(c) ESSI shall discuss with Noranda changes in the layout of flight
lines and any increase or decrease in the Survey size as requested by Noranda,
and to accommodate such changes provided there is (1) adequate lead time in
which to plan for efficient data collection, and (2) aircraft availability.
(d) The mean terrain clearance of the aircraft used in connection with
the Survey will be maintained at the mean terrain clearance as designated in the
Survey specifications, or as close as possible to such altitude, with regard to
topographic relief, built-up areas, flying regulations, and commensurate with
the safety of the aircraft. The pilot's decision regarding minimum safe terrain
clearance will be conclusive and binding.
(e) Navigation will be by electronic means using GPS.
2.10 DATA RECORDED IN THE FIELD
(a) Hyperspectral data will be recorded digitally with all channels of
raw data recorded to the computer's hard disk. An on-line sampling of the data
will be done to image the data to monitor data quality.
(b) The noise level of the ESSI Probe will be maintained at such a
level so as to ensure a signal to noise ratio of no worse than 10:1 over a
period of five (5) minutes in the full SWIR portion of the electromagnetic
spectrum so as to ensure adequate separation of Mineral spectral signatures from
background signatures.
(c) The terrain clearance will be recorded in meters.
(d) The flight path shall be obtained from GPS coordinates as
recorded digitally.
2.11 REFLIGHT SPECIFICATIONS
Reflights of any Survey area will be flown under any of the
following conditions and shall be at ESSI's sole expense:
(a) The noise level of the ESSI Probe degrades the signal to noise
ratio in the SWIR to less than 10:1 over an area exceeding 60 km2;
(b) The terrain clearance of the aircraft exceeds specifications by 50%
for a distance of 5.0 kilometres or more, except where flying regulations
dictate otherwise and/or the safety of the aircraft is in jeopardy;
(c) The line spacing exceeds the line spacing set out in the
specifications such that the survey loss exceeds three percent (3%) of the total
work area;
(d) The Survey area as designated in the applicable Work Plan is
obscured by the amount (expressed as a percentage) specified in the applicable
Work Plan due to poor atmospheric conditions.
2.12 HYPERSPECTRAL DATA PRODUCTION
(a) ESSI shall restore all field Hyperspectral Data to the office
system maintained at the base of operations of the Survey and re-verify such
data for validity and continuity.
(b) ESSI shall produce a geocoded radiance data cube which will be
delivered to Noranda on the media specified by Noranda.
2.13 DATA PRESENTATION AND DELIVERABLES
(a) The target Hyperspectral data file will be presented as flight
strip images showing UTM coordinates and latitudes and longitudes at the
corners. An image mosaic will be provided to illustrate the area covered by the
Survey.
(b) ESSI shall ensure that digital archives of raw data are maintained
in a secure location. For greater certainty, such digital archives shall
constitute Confidential Information for the purposes hereof.
(c) ESSI shall provide to Noranda two copies of a logistics and
processing report with respect to all Hyperspectral Data produced pursuant to a
Survey.
2.14 SCHEDULE
(a) Unless otherwise specified, ESSI shall commence operations within
thirty (30) days of the date of an executed Work Plan. The anticipated base of
operations in respect of a Survey shall be local to the Survey area and ESSI
shall give Noranda written notice as to the exact location of such base of
operations. ESSI will use its best efforts to complete the Survey within the
time period specified in the applicable Work Plan. ESSI shall give written
notice to Noranda of any delays greater than fourteen (14) days from the
completion date of any Survey set forth in the applicable Work Plan.
(b) Preliminary field images will be completed not later than three (3)
weeks after completion of flying a Survey area. Final Hyperspectral Data and a
logistics report will be delivered not later than six (6) weeks after receipt of
all Hyperspectral Data in ESSI's head office.
2.15 CHARGES
(a) Upon receipt of a Work Plan from Noranda hereunder, ESSI shall
provide to Noranda a written estimate of all charges with respect to the Survey
contemplated in such Work Plan. The following charges will apply for Surveys
performed hereunder:
(i) reasonable mobilization-demobilization charges will be
charged at ESSI's cost plus fifteen percent (15%);
(ii) all reasonable costs directly related to Overflight and
Analysis Services incurred by ESSI to carry out a
requested Survey will be billed to the program at a
rate of ESSI's cost plus twenty-five percent (25%).
These costs will include, but will not be limited to,
reasonable field expenses, hotel, travel, fuel, the
applicable portion of leases and insurance premiums
which are incurred as a direct result of the Survey;
provided that these costs will exclude ESSI employee
costs, maintenance costs related to the ESSI Probe or
aircraft and such other obligations of ESSI and/or
related sub-contractors;
(iii) a flat rate in respect of the ESSI Probe engaged in the
Survey of US $6,000 per production day of a Survey;
(iv) the salary and related burden costs of ESSI employees
directly engaged in a Survey for so long as such
employees are so engaged, provided that such burden
costs shall not in any event exceed fifty percent (50%)
of such employee's salary;
(v) ESSI will be entitled to charge a standby charge in
the amount of US $2,000 per day for each day of a
Survey on which ESSI is not able to collect data as a
result of weather conditions; provided, however, that
for greater certainty ESSI shall not be entitled to
charge any standby fee in respect of any day on which
ESSI is not able to collect data due to the disrepair
of the Technology;
(vi) any reasonable costs of third parties (including,
without limitation, any subcontractor retained in
connection with the conduct of a Survey) will be
charged at the same rate charged by such third party
plus ten percent (10%); and
(vii) fees shall be paid as follows:
A twenty percent (20%) of the estimated total cost
of a Survey will be payable upon execution of a
Work Plan in respect thereof;
B twenty percent (20%) of the estimated total cost
of a Survey will be invoiced at the time of
commencement of flying the applicable Survey;
C thirty-five percent (35%) of the estimated cost of
a Survey will be invoiced at completion of flying
the applicable Survey; and
D the balance of the actual costs of a Survey (to
the extent the same have not been invoiced or paid
pursuant to paragraphs A, B or C above) will be
invoiced when the final deliverables are received
by Noranda or the applicable Survey has been
terminated by Noranda in accordance with the terms
hereof.
(b) ESSI will be responsible for all costs related to the period in
which production cannot occur due to mechanical or technical problems related to
the Technology.
(c) If any government taxes or charges (such as general service, value
added or withholding taxes) are levied against ESSI pursuant to the production
of a Survey, then ESSI will be entitled to invoice such costs to Noranda but
there shall be no overhead cost applied to these costs.
(d) For each US$1,000,000 payable by Noranda for work performed under
this Agreement, ESSI shall provide a credit of US$70,000 to be applied against
the fees payable to Noranda for future Services provided hereunder.
(e) For all Overflight and Analysis Services any payments due ESSI from
Noranda will be invoiced in accordance with the terms of this Agreement, or if
this Agreement does not so specify, once a month in arrears, and will be due and
payable upon receipt by Noranda of the invoice from ESSI. Each such invoice
delivered to Noranda will provide details of the charges to Noranda and will be
supported by proper invoices and vouchers in respect of all charges.
ARTICLE 3 - SUPPORT SERVICES
3.1 SUPPORT SERVICES
During the term of this Agreement, ESSI shall provide Noranda
with the following services (collectively, the "Support Services"):
(i) ESSI shall provide assistance in answering any
questions or solving problems identified by Noranda
regarding the use of the Technology and all other
equipment, software and hardware necessary to use the
Technology;
(ii) ESSI shall render technical training of and assistance
to Noranda's personnel of the customers at a price and
location to be mutually determined by the parties; and
(iii) ESSI shall perform all necessary preventative
maintenance and test routines on the Technology and
related equipment. Such maintenance shall include at
least inspecting the Technology and related hardware,
equipment and software and ensuring such Technology
and related hardware, equipment and software is in
proper working order and report to Noranda any
problems and correcting same.
ARTICLE 4 - CONFIDENTIALITY
4.1 CONFIDENTIALITY OBLIGATION
(a) Each party hereto acknowledges that Confidential Information will
be exchanged between the parties pursuant to this Agreement. Each party shall
use no less than the same means it uses to protect its similar confidential and
proprietary information, but in any event not less than reasonable means, to
prevent the disclosure and to protect the confidentiality of the Confidential
Information of the other party. Each party agrees that it will not disclose any
Confidential Information of the other party to any other person or use the
Confidential Information of the other party except for the purposes of this
Agreement and as authorized herein.
(b) Notwithstanding section 5.1(a), the Recipient of Confidential
Information may use or disclose the Confidential Information to the extent that
the Recipient can show that such Confidential Information is (i) already known
by the Recipient without an obligation of confidentiality, (ii) publicly known
or becomes publicly known through no unauthorized act of the Recipient, (iii)
rightfully received from a third party, (iv) independently developed by the
Recipient without use of the information of the Disclosing Party, (v) approved
by the Disclosing Party for disclosure, or (vi) required to be disclosed
pursuant to a requirement of a Governmental Body or law so long as the Recipient
provides the other party with notice of such requirement prior to any such
disclosure and takes all reasonable steps available to maintain the information
in confidence.
4.2 THIRD PARTY INFORMATION
Neither ESSI nor Noranda shall disclose to the other any
proprietary, confidential, secret, or private information of any third person
which it is under a duty not to disclose.
4.3 LOSS OF CONFIDENTIAL INFORMATION
In the event of any unauthorized disclosure or loss of, or
inability to account for, Confidential Information of the Disclosing Party, the
Recipient will notify the Disclosing Party immediately.
4.4 ENFORCEMENT OF CONFIDENTIALITY OBLIGATION
Each party hereto acknowledges and agrees that irreparable
injury may result to the other party if such party breaches the provisions of
this Agreement relating to Confidential Information and that damages may be an
inadequate remedy in respect of such breach. Each party hereby agrees in advance
that, in the event of such breach, the other party shall be entitled, in
addition to such other remedies, damages and relief as may be available under
applicable law, to the granting of injunctive relief in such party's favour.
ARTICLE 5 - COVENANTS OF LICENSEE
5.1 ACCESS TO THE TECHNOLOGY
ESSI shall ensure that the Technology, including without
limitation all probes, equipment, software, hardware and supporting aircraft, is
made available to Noranda on such a basis that during the term of this Agreement
neither ESSI nor Noranda is unfairly prejudiced or benefitted; provided,
however, that nothing contained herein shall limit Noranda's rights under the
License Agreement. Without limiting the generality of the immediately preceding
sentence, Noranda shall have unrestricted and unfettered access to the
equivalent of one ESSI Probe 1 and all related equipment, software, hardware and
support aircraft for not less than an aggregate of 187 days during any twelve
(12) consecutive month period during the term of this Agreement.
5.2 REASONABLE CARE AND COMPLIANCE WITH LAWS AND POLICIES
ESSI covenants that all Services rendered by it and all
sub-contractors pursuant to this Agreement will be performed with reasonable
skill, care and diligence. ESSI covenants that in the performance of the
Services, it will not violate any applicable federal, state, provincial,
municipal or foreign law or regulation.
5.3 INSURANCE
(a) ESSI shall carry and maintain while performing the Services
hereunder insurance policies in a company or companies satisfactory to Noranda
of the following types of and not less than the following amounts:
(i) Automobile Public Liability Insurance covering all
automotive equipment used by ESSI in connection with
the performance of work hereunder with a combined
single limit of CAD$5,000,000.00 covering bodily
injury, death, and property damage as to any one
accident.
(ii) Aircraft Liability Insurance covering all owned and
non-owned aircraft used by ESSI in connection with
the performance of work hereunder with a combined
single limit of CAD$5,000,000.00 covering public
liability, passenger liability and property damage
liability.
(iii) Comprehensive General Liability Insurance covering
all operations with combined single limit liability
for bodily injury, death, and property damage of
CAD$5,000,000.00 as to any one occurrence.
(b) Each such policy of insurance shall:
(i) be in an amount acceptable to Noranda and in any
event, not less than CAD$5,000,000.00 inclusive of
any one occurrence;
and the Comprehensive General Liability policy shall:
(ii) include a standard form of cross-liability clause;
(iii) contain a clause waiving the insurer's right of
subrogation against Noranda; and
(iv) indicate that the insurer will give Noranda thirty
days prior notice of cancellation or termination of
the coverage.
(c) The requirement for insurance as stated in this section shall not
be construed as being a representation that the insurance is adequate or
limiting the liability of ESSI to Noranda as contemplated in this Agreement.
ESSI will, at its expense, obtain insurance in such greater amounts and for such
greater coverage as it deems prudent to protect itself and Noranda hereunder.
5.4 PATENTS
ESSI warrants that it will not use or incorporate in the
Surveys to be performed under this Agreement, any patented invention belonging
to a third party to this Agreement, under which ESSI or Noranda does not have
rights, and that it will not use or incorporate in the Surveys to be performed
under this Agreement any confidential or proprietary information belonging to a
third party to this Agreement under which ESSI or Noranda does not have rights.
5.5 MECHANICS' OR OTHER LIENS
ESSI shall promptly pay all costs and charges incurred by it in
connection with the performance of its obligations hereunder and shall not
suffer nor permit any mechanics' or other liens to attach to any property of
Noranda.
5.6 ENVIRONMENTAL COMPLIANCE
(a) ESSI agrees to comply, and to cause its employees, servants and
agents to comply, with Requirements of Environmental Law. ESSI shall require any
such person who is unwilling or unable to comply with Requirements of
Environmental Law to leave any site from which a Survey is being conducted. ESSI
shall notify Noranda forthwith in the event that any Requirements of
Environmental Law are not complied with or are likely not to be complied with.
(b) ESSI shall indemnify and save Noranda harmless from and against any
actions, causes of action, suits, claims or proceedings arising out of or
resulting from the failure of ESSI, its employees, agents or servants to comply
with Requirements of Environmental Law. In the event that there is a discharge
into the natural environment, Noranda may require ESSI to do everything
practicable or take such action as may be required to prevent, eliminate or
ameliorate the adverse effects of such discharge and to restore the natural
environment at the expense of ESSI. In particular, and without limiting the
generality of the foregoing, ESSI shall indemnify and save Noranda harmless from
and against all costs and expenses of complying with any Requirements of
Environmental Law or with any court or governmental order or guideline and
against all fines or penalties as may be levied or assessed by any court of law
or other statutory authority.
5.7 ENFORCEMENT OF DISCIPLINE
ESSI shall at all times enforce discipline and maintain good
order among its employees, and shall not retain on the job any person not
skilled in the task assigned to him. ESSI shall forthwith remove from the
performance of the Services any employee of ESSI who is objectionable to
Noranda.
5.8 LIMITED LIABILITY
The Services will be undertaken in accordance with generally
accepted standards of the geophysical survey profession and the terms and
specifications of this Agreement. Noranda shall be solely responsible for the
use, interpretation, and application of all data, information or reports
provided hereunder.
ARTICLE 6 - TERM AND TERMINATION
6.1 TERM
Subject to earlier termination as provided for herein, this
Agreement shall be effective upon the Effective Date and shall continue in full
force and effect for an initial term (the "Initial Term") of three (3) years and
following the Initial Term this Agreement will automatically renew for an
additional term of three (3) years, provided that either party may terminate
this Agreement at the end of the Initial Term upon giving written notice to the
other party not less than one hundred and eighty days (180) prior to the end of
the Initial Term.
6.2 TERMINATION BY ESSI
(a) ESSI may at its option terminate this Agreement with immediate effect by
giving Noranda written notice of termination in the event that any amount which
has accrued due to ESSI hereunder remains unpaid for a period of thirty (30)
consecutive days following the date on which such amount was due and payable;
provided that Noranda shall not be in default of its obligations under this
section as a result of a failure or delay by ESSI to provide such services as
are contemplated by this Agreement or to invoice Noranda for services rendered
or as a result of Noranda or any Authorized Sub-Licensee having determined to
contest any such invoice in good faith.
(b) This Agreement will terminate on the tenth day following the date on which
Noranda or the Authorized Sub-Licensees fail to retain the services of the
Licensor hereunder for an aggregate amount equal to or greater than:
(A) US $750,000 prior to the first anniversary of the Effective
Date,
(B) US $2,750,000 prior to the second anniversary of the
Effective Date,
(C) US $5,750,000 prior to the end of the Initial Term, or
(D) US $3,000,000 in each year following the end of the Initial
Term.
provided that the respective amounts referred to in items (A), (B), (C) and (D)
above shall be reduced by an amount equal to the gross proceeds realized by ESSI
or an Affiliate thereof during the respective periods referred to in such items
from the provision by ESSI or any Affiliate thereof of Hyperspectral survey
services to any entity (other than ESSI or any Affiliate thereof) which has
retained such services as a result of the sole and exclusive efforts of Noranda
or an Affiliate thereof. ESSI shall, prior to the last Business Day of each
period referred to in such items, notify Noranda of the aggregate amount so
realized during such period.
6.3 TERMINATION BY NORANDA
(a) Noranda may at its option terminate this Agreement with immediate effect by
giving ESSI written notice of termination upon the happening of any of the
following events:
(i) if any material breach or default under any provision
of this Agreement by ESSI occurs which continues in
effect for thirty (30) consecutive days following the
giving of written notice of same specifically
referring to this Section 6.3(i) to ESSI by Noranda
or such longer period as may reasonably be necessary
to remedy such breach or default, provided that ESSI
proceeds diligently to do so throughout such period;
(ii) if ESSI fails to provide access to the Technology to
the extent required under Section 5.1, and for ten
(10) consecutive days following the giving of written
notice of same specifically referring to this Section
8.3(ii) to ESSI by Noranda; or
(iii) if any material breach or default under any provision
of the License Agreement by ESSI occurs which
continues in effect for thirty (30) consecutive days
following the giving of written notice of same
specifically referring to this Section 8.3(iii) to
ESSI by Noranda for such longer period as Noranda may
determine, at its discretion, is reasonable to remedy
such breach or default, provided that ESSI proceeds
diligently to do so throughout such period.
(iv) if any representation or warranty made by ESSI in or
in connection with this Agreement is false or
inaccurate in any material respect and continues to
be so for a period of not less than thirty (30)
consecutive days following the giving of written
notice of same specifically referring to this section
to ESSI by Noranda.
(b) In addition, Noranda may, at its option, terminate this
Agreement if Noranda is:
(i) dissatisfied with the performance of the Technology; or
(ii) concludes that the Technology has become obsolete,
which failure is capable of being cured and which remains uncured after Noranda
provides to ESSI prior written notice describing such failure of not less than
180 days and during such time the failure remains uncured.
6.4 TERMINATION FOR INSOLVENCY
This Agreement may be terminated by either party by notice to
the other party (the "Insolvent Party") in the event the Insolvent Party shall
dissolve, cease active business operations or liquidate and not continue
business in another entity or form, or in the event that the Insolvent Party
shall have been determined to be insolvent by a court of competent jurisdiction,
or voluntary bankruptcy, insolvency, winding up or reorganization proceedings
shall have been commenced by the Insolvent Party, or such proceedings shall have
been brought against the Insolvent Party, or the Insolvent Party shall have made
a general assignment for the benefit of creditors, or a receiver of all or any
substantial part of the Insolvent Party's assets shall have been appointed, or
the Insolvent Party shall have suffered or incurred any similar action in
consequence of debt.
6.5 FORCE MAJEURE EVENT
Should any Force Majeure Event continue for a period of five
(5) consecutive days either party shall immediately have the right to terminate
this Agreement by notice to the other party provided that termination pursuant
to this provision shall not prejudice any pre-existing claims which either party
may have had against the other party.
6.6 WAIVER OF RIGHTS
The failure of a party to terminate this Agreement for any of
the reasons specified in this Article 6 shall not in any way be deemed a waiver
of such party's rights in respect thereof or otherwise limit its rights to
enforce the obligations of the other party hereunder.
6.7 TERMINATION OF A SURVEY
Noranda may at its option terminate any Survey after the
commencement thereof upon not less than twenty-four hours prior notice. In such
event, Noranda shall be responsible for all reasonable costs directly related to
such Survey incurred by ESSI prior to the date of termination in accordance with
Section 2.15(a).
ARTICLE 7 - GENERAL
7.1 ARBITRATION
Without limiting the provisions of Article 9, each party
agrees to negotiate the successful resolution of any controversy, claim or other
dispute arising out of or relating to this Agreement for a period of thirty (30)
consecutive days following receipt of a written request to that effect from the
other party. Upon the expiry of such thirty (30) day period, any outstanding
controversy, claim or other dispute arising out of or relating to this
Agreement, or the breach thereof, shall be conclusively settled by arbitration
in accordance with the rules of the Model Law Schedule of the International
Commercial Arbitration Act (Ontario), and judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction. Any such
arbitration shall be held at Xxxxxxx, Xxxxxxx, Xxxxxx, unless otherwise agreed.
The arbitration will be conducted by a panel of three (3) arbitrators with
suitable expertise in Mining Activities. Each party shall be entitled to appoint
one (1) arbitrator and those arbitrators shall appoint a third arbitrator. The
decision of the arbitrators shall be final and binding on the parties and
neither party shall appeal the decision on any basis to any court. Nothing in
this Section shall prevent either party from applying for or obtaining any
interim, interlocutory or preliminary injunctive relief related to the
infringement or misappropriation of any Intellectual Property Right in any court
of competent jurisdiction or from bringing any claim for contribution or
indemnity in the same court as the court in which the suit is brought by any
third person.
7.2 INDEPENDENT CONTRACTORS
This Agreement does not constitute and shall not be construed
as constituting a partnership or joint venture between the parties. Save as
otherwise provided for expressly in this Agreement, neither party shall have any
right to obligate or bind the other in any manner whatsoever and nothing
contained in this Agreement shall give or is intended to give any rights of any
kind to persons not a party to this Agreement. Each party shall ensure that
neither it nor any of its employees or representatives represent to any third
party that it or they are servants or agents of the other.
7.3 INDEMNITY
(a) ESSI agrees to indemnify, defend and hold Noranda, its subsidiaries
and the directors, officers, agents and employees of each of them harmless from
and against any and all claims, demands, expenses and causes of action of every
kind and character, including attorney fees, arising in favour of any person or
entity on account of any personal or bodily injuries or death or damage to or
destruction of any property arising out of or resulting from ESSI's performance
of its obligations under this Agreement, including the failure of ESSI to comply
with the requirements hereof or to fulfill any of its obligations hereunder.
(b) Noranda agrees and shall defend, indemnify and hold harmless ESSI,
its officers, agents, and employees from and against third party claims, losses,
damages, causes of action and liability of every kind including all expenses of
litigation, court costs and reasonable attorney's fees, which do not result from
and are not attributable to any negligent act or omission or willful misconduct
of ESSI, its officers, employees or agents.
(c) Notwithstanding any provision herein which may be to the contrary,
Noranda shall indemnify, defend and hold harmless ESSI, its officers, agents and
employees from and against all claims, losses, damages, causes of action and
liability of every kind including all expenses of litigation, court costs and
reasonable attorney's fees predicated on the theory ESSI's operations on or over
lands designated by Noranda have depreciated the mineral value thereof.
7.4 SET-OFF
In addition to all other rights and remedies of the parties
pursuant to this Agreement or otherwise, the parties shall be entitled to
set-off the amount of any claim that it has against the other party pursuant to
the provisions of this Agreement or otherwise arising in connection with the
transactions contemplated hereby and a reasonable estimate of the amount of any
claim, liability or damages for which one party is or may be liable against any
amounts payable by the other party; without limiting the generality of the
foregoing, Noranda shall be entitled to set off the amount of any claim by ESSI
for services rendered by ESSI to Noranda hereunder by the amount of any claim
which Noranda has against ESSI in respect of any mandatory redemption provision
of any shares of preferred stock of ESSI (or securities issued in substitution
therefor from time to time) held by Noranda. In the event that subsequent to the
time of set-off made by one party, the liability of the other party is
determined to be less than the amount set-off by the first party, the first
party shall pay to the other party the excess amount of such set-off forthwith
following such determination.
7.5 FURTHER ASSURANCES
Each of the parties hereto shall from time to time execute and
deliver all such further documents and instruments and do all acts and things as
the other party may reasonably require to effectively carry out or better
evidence or perfect the full intent and meaning of this Agreement. Where ESSI or
Noranda is required by the other under this Section to do anything including
executing and delivering any documents, such party shall comply with such
request with seven (7) business days of the request.
7.6 BENEFIT OF THE AGREEMENT
This Agreement shall enure to the benefit of and be binding
upon the respective successors and permitted assigns of the parties.
7.7 AMENDMENTS AND WAIVER
No modification of or amendment to this Agreement shall be
valid or binding unless set out in writing and duly executed by both of the
parties and no waiver of any breach of any term or provision of this Agreement
shall be effective or binding unless made in writing and signed by the party
purporting to give the same and, unless otherwise provided, shall be limited to
the specific breach waived.
7.8 ASSIGNMENT BY XXXX
XXXX may sell, transfer, assign or in any other way dispose of
this Agreement or any of its rights or obligations hereunder at any time without
the consent of Noranda to an Affiliate of ESSI or in connection with a joint
venture relationship or in connection with a merger, amalgamation or other
re-organization of ESSI provided that the successor, Affiliate, or assignee, as
the case may be (i) is immediately after the assignment the owner of all right,
title and interest in the Licensed Property and is the person who will continue
the development and Commercial Exploitation thereof as provided for in the
License Agreement, and (ii) thereupon undertakes to each Customer in writing to
be bound by the provisions of this Agreement in all respects and to the same
extent as ESSI is bound.
7.9 ASSIGNMENT BY NORANDA
Noranda may assign this Agreement or any of its rights and
obligations hereunder, without the consent of ESSI, to an Affiliate of Noranda.
7.10 NOTICES
Any demand, notice or other communication to be given in
connection with this Agreement may be given in writing and may be given by
personal delivery, registered mail, courier or facsimile addressed to the
recipient as follows:
To ESSI:
000 Xxxxx 0xx Xxxxxx, Xxxxx #0 XxXxxx, Xxxxx 00000
U.S.A.
Attention: President
Fax No.: (000) 000-0000
To NORANDA:
Xxxxx 0000
0 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Secretary
Fax No.: (000) 000-0000
or to such other address, facsimile number or individual as may be designated by
notice by either party to the other. Any demand, notice or other communication
given by personal delivery shall be conclusively deemed to have been given on
the day of actual delivery thereof and, if given by registered mail, on the
tenth (10th) business day following the deposit thereof in the mail and, if
given by courier, on the third (3rd) business day following the sending thereof
and, if given by facsimile, on the day of transmittal thereof if given during
the normal business hours of the recipient and on the next business day if not
given during such hours on any day. If the party giving any demand, notice or
other communication knows or ought reasonably to know of any difficulties with
the postal system which might affect the delivery of mail, such demand, notice
or other communication shall not be mailed but shall be given by personal
delivery, courier or facsimile.
7.11 GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein without reference to its conflict-of-law rules. Licensor
hereby submits to the non-exclusive jurisdiction of the courts of the Province
of Ontario for any legal action arising out of this Agreement or the performance
of the obligations hereunder or thereunder. This Agreement shall be deemed to be
made in the Province of Ontario and Licensor agrees not to commence any action,
suit or proceeding against Licensee or any Affiliate or Associate of the
Licensee or any of their employees, officers or directors in any jurisdiction
other than the Province of Ontario.
7.12 RIGHTS AND REMEDIES
All rights and remedies of either party under this Agreement
shall be cumulative and may be exercised singularly or concurrently.
7.13 FORCE MAJEURE
If the performance of this Agreement, or of any obligation
hereunder, is interfered with by fire, explosion, an act of God, war,
revolution, labour strife, civil commotion or an act of public enemies (each a
"Force Majeure Event"), notwithstanding anything to the contrary contained
herein, the failure or delay in performance by either party shall be excused on
a day to day basis to the extent of such inference and the other party will
likewise be excused from performance of its obligations on a day to day basis to
the extent such party's obligations relate to the performance so interfered
with, provided that the party so affected uses its reasonable efforts to remove
such causes of non-performance.
7.14 SEVERABILITY
If a court or other lawful authority of competent jurisdiction
declares any provision, Article or Section of this Agreement invalid, illegal or
unenforceable, this Agreement will continue in full force and effect with
respect to all other provisions, Articles and Sections and all rights and
remedies accrued under such other provisions, Articles and Sections will survive
any such declaration.
7.15 PUBLIC ANNOUNCEMENTS PUBLIC ANNOUNCEMENTS
No public announcement or press release concerning the
transactions contemplated by this Agreement shall be made except with the prior
consent and approval of both parties.
7.16 Entire Agreement
This Agreement and the Schedules and Appendixes hereto
constitute the entire agreement between the parties hereto with respect to the
subject matter hereof and cancels and supersedes any prior understandings and
agreements between the parties hereto with respect hereto.
IN WITNESS WHEREOF the parties have executed this Agreement.
NORANDA MINING AND EXPLORATION INC.
By: /s/ Xxxxx X. Xxxxxxx
Name: X. X. Xxxxxxx
Title: V.P.
EARTH SEARCH SCIENCES, INC.
By:/s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Chairman
