Exhibit 10.18
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Non-Exclusive Technology Agreement by and between
U.S. Gold Corporation and Newmont USA,
d/b/a Newmont Mining Corporation dated May 31, 2002
NON-EXCLUSIVE TECHNOLOGY LICENSE AGREEMENT
PREAMBLE
This is an agreement (the "Agreement") between U.S. Gold Corporation, a Colorado
corporation having a business address at 0000 Xxxxxxx Xx., Xxxxx 000, Xxxxxxxx,
Xxxxxxxx 00000-0000 ("USGC") and Newmont USA Limited, d/b/a Newmont Mining
Corporation, a Delaware Corporation having a business address at 0000 Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 ("NMC"). This Agreement is to be
effective as of complete execution by both parties of the signature blocks
provided below ("Effective Date").
RECITALS
A. USGC is the owner, through wholly-owned subsidiaries, of mining claims
located in Eureka County, Nevada, U.S.A., referred to as the Tonkin Springs
Property, which contains refractory sulfide gold ores that would be
desirable to concentrate following mining.
B. NMC has technology, and patents relating to the technology, concerning
preparation of flotation concentrates of refractory sulfide gold ores using
an oxygen-deficient gas during comminution and/or flotation, known as the
N2TEC technology, and USGC desires to obtain a license to the N2TEC
technology for use to prepare flotation concentrates of refractory sulfide
gold ore mined from the Tonkin Springs Property.
C. Newmont Technologies Limited ("NTL"), a wholly-owned subsidiary of NMC, and
USGC entered into an agreement titled Technology Option Agreement on
December 18, 2001 ("Option Agreement"), under which USGC obtained an option
to enter into good faith negotiations with NTL to pursue agreement on
definitive terms for a non-exclusive license for use of the N2TEC
technology at the Tonkin Springs Property.
D. Pursuant to the Option Agreement, NMC, on behalf of NTL, and USGC have
agreed to definitive terms for a non-exclusive technology license as set
forth in this Agreement.
AGREEMENT
In consideration of the mutual covenants and conditions set forth herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree to the terms and conditions set forth
below:
1. DEFINITIONS. For purposes of this Agreement and all exhibits hereto, the
following terms shall have the meanings set forth below:
"Affiliate" of a party means (a) any Person directly or indirectly owning,
controlling, or holding with power to vote, fifty percent (50%) or more of the
outstanding voting securities, membership interests, partnership interests or
other equity interests of a party; and (b) any Entity fifty percent (50%) or
more of whose outstanding voting securities, membership interests, partnership
interests or other equity interests are directly or indirectly owned,
controlled, or held with power to vote by the party or a Person described in
(a). For purposes of the preceding sentence, "control" means possession,
directly or indirectly, of the power to direct or cause direction of management
and policies through ownership of voting securities, contract, voting trust, or
otherwise.
"Aggrieved Party" is defined in section 9.2.
"Agreement" is defined in the preamble of this Agreement.
"Allowable Deductions" means costs incurred by a USGC Party permitted as
deductions in determining NSR, as provided in Exhibit B.
"Breaching Party" is defined in section 9.2.
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"Effective Date" is defined in the preamble of this Agreement.
"Entity" means any Person other than a natural person.
"Facility" means a single flotation processing facility located in Nevada,
U.S.A., and processing ores mined only from the Tonkin Springs Property.
"Improvement" means any development, enhancement, modification or adaptation to
or of any portion of the NMC Flotation Technology conceived or first reduced to
practice during the term of this Agreement. USGC shall ensure that appropriate
agreements are put in place to assign to USGC all right, title and interest in
and to any and all Improvements, or any portion thereof, made by any and all
employees of USGC, Affiliates of USGC, the operator and contractors and
consultants while involved with any portion of design (including any laboratory
testing), engineering, construction, start-up, maintenance or operation of the
Facility or the flotation process used at the Facility.
"Indemnitee" is defined in section 7.3.
"Licensed Field" means processing at the Facility Precious Metal Ores mined from
the Tonkin Springs Property to prepare Licensed Concentrate.
"Licensed Concentrate" means flotation concentrate prepared with use of the NMC
Flotation Technology from Precious Metal Ore and that has a higher Precious
Metal grade than the Precious Metal Ore. All flotation concentrate prepared at
the Facility during the term of this Agreement shall be deemed to be produced
with use of the NMC Flotation Technology if preparation of the flotation
concentrate involves use of a nitrogen-enriched or other oxygen-deficient gas
(oxygen-deficient as compared to air) as a flotation gas during flotation and/or
to blanket any process equipment prior to or during flotation.
"Licensed Dore" means dore or other similar crude metallic product prepared by a
USGC Party from processing of Licensed Concentrate.
"NMC" is defined in the Preamble of this Agreement.
"NMC Confidential Information" means all technical, financial and business
information relating to the NMC Flotation Technology disclosed to or otherwise
made available by NMC, or by any Affiliate of NMC or any Third Party as
permitted by NMC, to USGC, any Affiliate of USGC, the Operator or any Third
Party for the benefit of USGC (including any consultants and contractors
involved with any portion of design, engineering, construction, start-up,
maintenance or operation of the Facility during the term of this Agreement).
"NMC Flotation Technology" means any and all information, technology, know-how,
trade secrets and software, including any Improvements, owned or controlled by
NMC concerning the use of nitrogen or other oxygen-deficient gas in flotation of
gold-bearing sulfide minerals, including the use of such nitrogen or other
oxygen-deficient gas during preparation (e.g., grinding, milling, conditioning)
of a slurry of particulate mineral feed for the flotation. As used in this
definition "controlled" means that NMC has an independent legal right to grant,
or to compel a wholly-owned Affiliate of NMC to grant, a nonexclusive license to
USGC of a scope as provided in section 2.1 to the information, technology,
know-how, trade secrets or software, as the case may be, without a royalty or
other fee being due by NMC or any Affiliate of NMC in relation to the grant.
"NMC Patents" means each and every United States patent and United States patent
application now or hereafter owned or controlled during the term of this
Agreement by NMC claiming any portion of the NMC Technology. Existing NMC
patents are listed in Exhibit A. As used in this definition, "controlled" means
that NMC has the legal right to grant, or to compel a wholly-owned Affiliate of
NMC to grant, non-exclusive rights to the full extent of the patent or patent
application, as the case may be, to USGC without a royalty or other fee being
due by NMC or any Affiliate of NMC in relation to the grant.
"NSR" means net smelter returns, determined as set forth in Exhibit B.
"NTL" is defined in the recitals of this Agreement.
"Operator" means, in the event that USGC does not itself operate the Facility, a
Person authorized, directly or indirectly, by USGC to operate the Facility. The
Operator may be an Affiliate of USGC or a Third Party. At any given time, there
shall be no more than one Operator.
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"Option Agreement" is defined in the recitals of this Agreement.
"Option Fee" means the sum of $US10,000 (ten thousand United States dollars)
paid by USGC to NMC pursuant to The Option Agreement.
"Person" means a natural person, corporation, joint venture, partnership,
limited partnership, limited liability company, trust, estate, business trust,
association, governmental authority, or any other entity.
"Precious Metal" means gold and silver.
"Precious Metal Ore" means an ore in which Precious Metal represents the primary
metal value in the ore.
"Third Party" means any Person other than NMC, Affiliates of NMC, USGC and
Affiliates of USGC.
"Third Party Infringement Claim" means a legal claim for patent infringement
based on use during the term of this Agreement of the NMC Flotation Technology
at the Facility within the scope of the right and license of section 2.1
asserted by a Third Party against a USGC Party, with the legal claim premised on
infringement of a U.S. patent claim reciting a combination of the use of
nitrogen flotation gas, lead-containing activator and xanthate collector for
flotation processing of refractory sulfide gold ores. For purposes of this
definition, a legal claim is "asserted" by a Third Party against a USGC Party
when a legal action has been filed in a U.S. court of competent jurisdiction and
the USGC Party has been named as a defendant in the action and has been served
with the complaint. It is not intended that any patent infringement claim that
might be brought based on equipment at or operation of the Facility will
constitute a Third Party Infringement Claim; rather, it is intended that only
legal claims to infringement of a patent claim specifically reciting the noted
combination of processing features shall be within the scope of Third Party
Infringement Claim.
"Tonkin Springs Property" means the mining claims located along the Battle
Mountain-Xxxxxx Trend in Eureka County, Nevada, U.S.A., that are owned or
controlled, directly or indirectly, by USGC as of the Effective Date. USGC
represents that all mining claims within the scope of the Tonkin Springs
Property are as shown in Exhibit D.
"USGC" is defined in the Preamble of this Agreement.
"USGC Party" means each of USGC, an Affiliate of USGC and an Operator.
2. LICENSE GRANT/FREEDOM FROM LIABILITY FOR PATENT INFRINGEMENT.
2.1 License Grant. NMC hereby grants to USGC a non-exclusive, royalty-bearing
right and license to practice within the Licensed Field the NMC Flotation
Technology. USGC shall have a right to sublicense the right and license granted
to USGC that is limited to sublicensing the Operator for the sole purpose of the
Operator operating the Facility within the scope of the right and license
granted to USGC.
2.2 Freedom from Liability for Patent infringement. USGC, and permitted
sublicensees of USGC, shall be free of liability with respect to any
infringement or other violation of the NMC Patents on account of exercise by
USGC, or a permitted sublicense of USGC, of the right and license granted to
USGC by NMC under section 2.1.
3. LICENSE FEES
3.1 Initial License Fee. Upon execution of this Agreement, an initial license
fee of $US50,000 (Fifty Thousand United States dollars) shall be due from USGC
to NMC, with USGC receiving a credit against such initial license fee for prior
payment to NTL of the Option Fee; provided that USGC shall be permitted to pay
the initial license fee to NMC in installments to be paid as follows: (i)
$US30,000 (thirty thousand United States dollars) to be paid on the Effective
Date (with the credit for prior payment to NTL of the Option Fee being applied
against this installment), (ii) $US10,000 (ten thousand United States dollars)
to be paid no later than three months following the Effective Date and (iii)
$US10,000 (ten thousand United States dollars) to be paid no later than six
months following the Effective Date.
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3.2 Ongoing License Fees. USGC shall pay to NMC ongoing license fees equal to
two percent (2%) of NSR of Licensed Concentrate. Payment to NMC of ongoing
license fees for any unit of Licensed Concentrate shall be an obligation of USGC
as of the date the unit of Licensed Concentrate is prepared, with payment to be
made to NMC as provided in section 3.3. Beginning with calendar year 2003, the
ongoing license fees shall be subject to an annual minimum of $US10,000 (ten
thousand United States dollars) per calendar year during the term of this
Agreement, including the Calendar Year during which this Agreement terminates.
Upon expiration of the last to expire of the NMC Patents, the ongoing license
fees shall thereafter be reduced by one-half (1/2), to one percent (1%) of NSR,
but the annual minimum will continue to apply unchanged.
3.3 Payment of Ongoing license fees. Ongoing license fees are to be paid to NMC
on a calendar quarterly basis, with ongoing license fees in relation to a
calendar quarter to be paid to NMC not later than one month following the end of
the respective calendar quarter (i.e., not later than the end of April in
relation to the first quarter, the end of July in relation to the second
quarter, the end of October in relation to the third quarter and the end of
January of the following year in relation to the fourth quarter). Ongoing
license fees for a unit of Licensed Concentrate are to be paid to NMC in
relation to the calendar quarter in which the Third Party purchaser of the
Licensed Concentrate or Licensed Dore makes payment on a sale made pursuant to
section 3.6.
3.4 Reporting of Ongoing license fees. Within one month following the end of
each calendar quarter, USGC shall deliver to NMC the following:
(a) Written reports of a form as specified in Exhibit C.
(b) A written itemization of Allowable Deductions used to determine NSR for
the reported quarter, with the itemization identifying the payee of each
Allowable Deduction (e.g., the relevant transportation company or insurer),
the nature of each Allowable Deduction (e.g., transportation or insurance),
and the amount of each Allowable Deduction. Written documentation from the
payee shall be included to support each Allowable Deduction
(c) In relation to all Licensed Concentrate prepared during the reported
quarter, copies of all production reports from the Facility, all production
assays (including head, tail and concentrate assays) and all metallurgical
balance reports concerning gold and silver content (and the content of
other metal values to the extent applicable).
(d) In relation to all Licensed Dore prepared during the reported quarter,
copies of all production reports from processing operation(s) where the
production took place, all assays and all metallurgical balance reports
concerning gold and silver content (and the content of other metal values
to the extent applicable).
(e) Copies of all available settlement documentation received during the
quarter from Third Party purchasers of Licensed Concentrate and Licensed
Dore.
(f) Payment of Annual Minimum. For each calendar year for which the annual
minimum provided in section 3.2 applies, any deficiency in ongoing royalty
payments for the year relative to the annual minimum requirement shall be
made with the final quarterly report in relation to that calendar year.
3.6 USGC Royalty Buy-Out Option. At any time prior to expiration of two (2)
years following the Effective Date, USGC may, at USGC's sole option, buy-out a
portion or all ongoing license fees on further Licensed Concentrate in
increments of one percent (1%) of NSR, including buy-out of a proportionate
share of future annual minimums (i.e., $US5,000 reduction in future annual
minimums for each 1% NSR increment bought-out), by paying to NMC no later than
the two (2) years following the Effective Date $US500,000(five hundred thousand
United States dollars) for each one percent (1%) NSR increment being bought-out
($US1,000,000 to buy-out entire 2% of NSR). In the event of a buy-out, the
ongoing license fees will be reduced by the bought-out increment(s) of NSR for
all Licensed Concentrate prepared following the buy-out and the annual minimum
will be reduced beginning with the calendar year during which the buy-out is
made. USGC shall be permitted to exercise its buy-out option up to two times
during the applicable two-year period.
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3.7 Handling of Licensed Concentrate and Disposition of Metal Values.
(a) All Precious Metals and other metals of value in Licensed Concentrate
shall be disposed of by sale of Licensed Concentrate or Licensed Dore from
a USGC Party to a Third Party purchaser, with the sale being an arms length
sale transaction at fair market value only for money paid by the Third
Party purchaser to a USGC Party, with payment being made on the sale by the
Third Party purchaser at least as quickly as normal industry practice for
like sales made in arms length transactions in relation to other mining
operations in Nevada, U.S.A.
(b) Promptly after preparation of a unit of Licensed Concentrate, but in no
event later than 30 calendar days following preparation of the unit of
Licensed Concentrate, either (i) the unit of Licensed Concentrate shall be
delivered to a Third Party purchaser of the unit of Licensed Concentrate
pursuant to a sale transaction as provided in subsection (a) or (ii)
processing shall commence on the unit of Licensed Concentrate in a
subsequent processing operation operated by a USGC Party for preparation of
Licensed Dore in a timely manner according to the processing technology
being used. Processing of a unit of Licensed Concentrate into Licensed Dore
shall not be delayed relative to like processing of any other ores or
concentrates being processed in the subsequent processing operation.
Promptly after preparation of a unit of Licensed Dore, but in no event
later than 30 days following preparation of the unit of Licensed Dore, the
Licensed Dore shall be delivered to a Third Party purchaser of the Unit of
Licensed Dore pursuant to a sale transaction as provided in subsection (a).
USGC shall, and shall cause other USGC Parties, to use best efforts to
maximize monies received from Third Party purchasers for sales of Licensed
Concentrate and Licensed Dore.
(c) Licensed Concentrate disposed of by sale to a Third Party purchaser
pursuant to subsection (a) shall not have been commingled with other
concentrates, ores or other materials prior to the sale. Licensed
Concentrate processed to prepare Licensed Dore may be commingled with other
concentrates and/or ores for processing in the subsequent processing
operation so long as appropriate metallurgical accounting procedures are
followed to permit accurate allocation in a miner-like fashion of value due
to the processing of the Licensed Concentrate and due to the processing of
the other concentrates and/or ores. In the case of such commingling, the
Licensed Dore shall be an allocated portion of the dore or other similar
crude metallic product resulting from the subsequent processing operation
accurately determined based on the metallurgical accounting procedures.
4. TECHNICAL SUPPORT
4.1 Technical Consultation. NMC shall provide to UFSGC technical consultation as
reasonably requested by USGC, to the extent that NMC is reasonably capable,
concerning USGC's exercise of the right and license under section 2.1. NMC shall
be paid for technical consultation provided to USGC; provided that up to the
first five (5) man-days (8 hours per man-day) of technical consultation provided
by NMC during each of the first two annual periods during the term of this
Agreement following the Effective Date shall be provided by NMC without charge
to USGC. Upon request of USGC, NMC will provide to USGC a schedule of consulting
fee rates for NMC to provide technical consultation to USGC, such schedule of
consulting fee rates to be subject to change with at least thirty (30) days
advance written notice to USGC. In any event, USGC shall reimburse NMC for any
incidental expenses incurred to provide the requested technical consultation,
including all incidental travel, lodging and meal expenses. NMC's obligation to
provide USGC with any technical consultation shall end upon the earlier to occur
of (i) five (5) years after the Effective Date and (ii) two (2) years after
commencement of use of the NMC Flotation Technology at the Facility.
4.2 Laboratory Testing. Upon request from USGC, NMC will consider performing
laboratory flotation testing to further investigate application of the NMC
Flotation Technology for implementation at the Tonkin Springs Property. NMC
shall have no obligation to perform such testing. But if NMC does agree to
perform such testing, then USGC shall pay for such testing based on personnel,
laboratory facility and other charges to be provided by NMC. NMC will provide
USGC only with factual data concerning test conditions and results of the tests.
USGC assumes all responsibility for interpretation of such factual data.
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5. RECORDS/AUDITING
5.1 Metallurgical Accounting and Maintenance of Records. USGC, or the Operator,
shall implement and follow appropriate metallurgical accounting procedures,
including appropriate monitoring of weight and grade, to permit accurate
determination of Precious Metals content, and the content of other metals of
value (if any), in Licensed Concentrate and Licensed Dore. USGC shall keep and
maintain, and shall cause the Operator to keep and maintain, accurate records
relating to exercise of the right and license under section The records kept and
maintained by USGC shall be sufficient in detail to permit NMC to determine and
verify any and all amounts due to NMC hereunder, and the records shall include
documentation of appropriate sampling and quantity measurements for
determination of the content of gold and silver (and other metal values to the
extent applicable) in Licensed Concentrate. Each record shall be maintained in
the United States at a normal business office of USGC, or the Operator as the
case may be, for a period of at least two (2) years following the end of the
calendar year to which the record pertains.
5.2 Audit of Records. NMC shall have a right to audit USGC's compliance with
this Agreement, including an audit of USGC's and/or the Operator's records and
metallurgical accounting procedures (including sampling and assaying frequency
and procedures) during normal business hours to the extent deemed by NMC to be
necessary to verify the amount and accuracy of any and all amounts due to NMC
hereunder. NMC may exercise this right to audit no more frequently than once
during any calendar year and shall provide USGC with at least thirty (30) days
advance written notice prior to conducting an audit of USGC's records. The right
to audit shall include the right to use professionals, such as accountants and
attorneys of NMC's choice, to perform or assist in the performance of an audit.
Prompt adjustment shall be made by USGC to compensate NMC for any errors or
omissions disclosed by an audit. NMC's audit rights shall also extend to any
relevant records maintained by and metallurgical accounting procedures performed
by any permitted sublicensee or contractor, and USGC shall ensure that NMC has
access to such records and metallurgical accounting procedures for purposes of
conducting audits. If, based on an audit, it is determined that underpayments to
NMC are five percent (5%) or more of the payments due during the period audited,
then the reasonable costs of the audit shall be borne by USGC, otherwise the
cost of the audit shall be borne by NMC.
5.3 Facility Visits. NMC shall have a right to visit the Facility, with at least
six (6) months between visits, to witness the extent and nature of use of the
NMC Flotation Technology at the Facility, and USGC shall upon request of NMC
provide NMC with a complete description of operating parameters and
specifications concerning use of the NMC Flotation Technology at the Facility.
6. INTELLECTUAL PROPERTY
6.1 Ownership. USGC acknowledges that, as between the parties and as subject to
the right and license to USGC under section 2.1, all right, title and interest,
including all intellectual property rights, in and to the NMC Flotation
Technology shall be owned solely and exclusively by NMC. USGC shall promptly
disclose in writing to NMC any Improvements. Furthermore, USGC hereby assigns,
sells, transfers and otherwise conveys unto NMC all right, title and interest of
USGC, including all patent and other intellectual property rights, in and to the
Improvements. Neither party shall have any right in or to any technology or
intellectual property of the other party, now existing or hereafter developed or
acquired, except as expressly provided herein.
6.2 Protection of NMC Flotation Technology. NMC shall have complete discretion
and control as to whether to seek patent or other protection of any and all of
the NMC Flotation Technology, the manner in which protection is sought, and
whether and how to maintain any of the NMC Patents or other intellectual
property rights. At the request of NMC and at NMC's expense, USGC shall
cooperate with and assist NMC to evidence, demonstrate or perfect NMC's right,
title and interest in and to the Improvements, including preparing, filing and
prosecuting relevant patent applications in the United States and other
countries and including signing such documents and performing such acts, or
having employees or others sign such documents or perform such acts, as
requested by NMC. Furthermore, NMC shall have complete discretion and control
concerning whether and how to enforce any intellectual property rights
concerning the NMC Flotation Technology, including any of the NMC Patents,
against any Third Party, and in the event that NMC pursues enforcement of any
such intellectual property right, then NMC shall bear all costs and shall reap
all rewards from such enforcement, including the benefits of any settlement.
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7. REPRESENTATIONS AND WARRANTIES/INDEMNIFICATIONS/NOTICE OF CLAIMS
7.1 Representations and Warranties of NMC. NMC represents and warrants that NMC
has the right to grant the right and license to USGC under section 2.1 and the
freedom from liability under section 2.2. 7.2 No Other Representations or
Warranties. Other than as expressly provided in section 7.1, NMC makes no
representations or warranties, either express or implied. Without limiting the
generality of the foregoing, NMC makes no representations and disclaims all
warranties relating to, and assumes no responsibility for:
(a) the validity or enforceability of any of the NMC Patents or any claims
of the NMC Patents;
(b) the ability of USGC or any permitted sublicensee of USGC to practice
any of the NMC Flotation Technology free from infringement or other
violation of any Third Party's patent or other rights; and (c) the safety
or suitability for any purpose of the NMC Flotation Technology.
NMC HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, AS TO THE USEFULNESS OR PERFORMANCE OF THE NMC FLOTATION TECHNOLOGY
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
7.3 Release/Indemnification. Except as otherwise specifically provided elsewhere
in this Agreement, USGC shall indemnify, defend, and hold harmless NMC and NMC's
Affiliates and their respective directors, officers, employees, and agents (each
an "Indemnitee"), against and from any and all losses, claims, actions, suits
(including costs and reasonable attorney fees), and damages to the extent the
same arise out of or are in any way connected with USGC, USGC's Affiliates' or
USGC's contractors', or any of their respective employee's, agent's or
representative's, acts or omissions in any way related to the subject matter of
this Agreement. Furthermore, USGC hereby completely releases each Indemnitee
from any responsibility for, and agrees to defend, indemnify and otherwise hold
harmless each Indemnitee from and against any and all claims, liability, loss,
damages, costs and expenses, including reasonable attorney fees, arising in any
way from or relating in any way to exercise by USGC, or any permitted
sublicensee of USGC, of the right and license under section 2.1.
7.4 Notice of Third Party Infringement. USGC shall promptly notify NMC in
writing of any actions by a Third Party of which USGC becomes aware during the
term of this Agreement which USGC believes is infringing one or more of the NMC
Patents.
7.5 Notice of Third Party Infringement Claims. USGC shall promptly notify NMC in
writing of any claim, action or suit for infringement of a patent or other
intellectual property right asserted or threatened to be asserted against USGC
or a permitted sublicensee of USGC during the term of this Agreement based on
use by USGC or the permitted sublicensee of any portion of the NMC Flotation
Technology.
7.6 Defense Costs for Third Party Infringement Claim. In the event that during
the term of this Agreement a Third Party Infringement Claim is asserted against
a USGC Party, then NMC shall pay legal fees of the USGC Party for defending
against the Third Party Infringement Claim, provided that NMC's obligation shall
be capped at a cumulative cost to NMC for all Third Party Infringement Claims at
the lesser of (i) $US250,000 (two hundred fifty thousand United States dollars)
or (ii) the total license fees paid to NMC pursuant to Article 3 of this
Agreement; provided that in any event USGC shall provide NMC supporting written
documentation (including copies of invoices for legal fees) for all legal costs
for which USGC seeks payment. In each event of a Third Party Infringement Claim,
the USGC Party shall keep NMC informed concerning the progress of the
proceeding, the USG Party shall at the request of NMC provide NMC with copies of
all documents filed in the proceeding for which dissemination is not restricted
by a secrecy order for the benefit of another party in the proceeding, and the
USGC Party shall at the request of NMC consult with NMC concerning defense
against the Third Party Infringement Claim and consider NMC's comments in
relation to pursuing the defense. In the case of the limitation on NMC's
commitment in (ii) above, when any or all of the license fees aid to NMC are
paid after commencement of a Third Party Infringement Claim, then to the extent
that USGC has a right to payment of legal fees based on an increasing cap due to
those license fees, then USGC may obtain the payment from NMC by way of
adjustment to license fee payments when USGC reports and pays the relevant
license fees to NMC.
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8. CONFIDENTIALITY
8.1 Obligations of Confidentiality. Without prior written consent from NMC, USGC
shall not disclose any portion of the NMC Confidential Information to others,
including Affiliates of USGC, and shall not use the NMC Confidential Information
for any purpose other than the purpose of this Agreement, except to the extent
specifically provided in section 8.2.
8.2 Exceptions to Obligations. USGC shall be excepted from the obligations of
confidentiality of section 8.1 with respect to NMC Confidential Information to
the extent that the NMC Confidential Information at issue: (a) is within the
public domain or enters the public domain through no fault or wrongful act of
USGC or any permitted sublicense to USGC; or (b) was in the unrestricted
possession of USGC prior to receipt of the information from NMC or any Affiliate
of NMC or any Third Party as permitted by NMC and such prior possession is
evidenced by a writing existing prior to such receipt by USGC of the
information; or (c) is received by USGC from a Third Party not under an
obligation of confidentiality to NMC or an Affiliate of NMC, but only to the
extent rightfully permitted by the Third Party; or (d) is reasonably necessary
to comply with a court order or an order from another competent legal tribunal,
but only to the extent required to comply with the order and only after
informing NMC of the order and providing NMC with an opportunity to obtain a
protective order or other legal protection for the NMC Confidential Information
at issue; or (e) is disclosed to a permitted assignee or proposed assignee of
USGC under section 10.2 and the assignee first agrees in a writing delivered to
the other party to be bound to the provisions of this Article 8 to the same
extent as required of USGC. (f) is disclosed by USGC to any of the following
Persons engaged by USGC, directly or indirectly, as reasonably necessary to
design, construct, start-up, maintain and operate the Facility during the term
of this Agreement, but only after such Person has agreed in writing to be bound
to obligations of confidentiality at least to an extent as required of USGC
under this Article 8 except not including the exceptions of subsections (e)-(g)
of this section 8.2, and NMC shall be an intended beneficiary of such
obligations with full right and authority to enforce such obligations:
Affiliates of USGC, the Operator, engineering contractors, technical consultants
and the like. (g) is disclosed by USGC or a permitted sublicensee of USGC to any
regulatory authority for the purpose of obtaining appropriate permits or like
authorizations in relation to the Facility, provided that the disclosure to the
regulating authority shall be only to the extent required for the purpose of
obtaining the necessary permits or like authorizations.
8.3 Duration of Obligations. The obligations of USGC under section 8.1 with
respect to any portion of NMC Confidential Information shall continue until one
of the exceptions identified in section 8.2 applies to that portion of the NMC
Confidential Information, provided that with respect to exceptions 8.2(d)-(g),
the obligations of confidentiality shall be relieved only to the extent required
for making the limited disclosure pursuant to the exception.
8.4 Return of NMC Confidential Information. At any time after termination of
this Agreement for any reason and upon request of NMC, USGC shall send to NMC
all writings and other physical embodiments of NMC Confidential Information;
provided that USGC legal counsel may retain one copy of the physical embodiments
solely for archival purposes.
8.5 Injunctive Relief. USGC acknowledges (i) that the NMC Confidential
Information is a valuable asset of NMC, (ii) that NMC has no adequate remedy at
law for a breach of obligations of USGC under section 8.1, and (iii) that NMC
will suffer irreparable harm as a result of such a breach. Therefore, USGC
agrees that NMC shall be entitled to obtain equitable relief, including
temporary and permanent injunctive relief, without the obligation of posting a
bond (cash or otherwise), in the event of actual or threatened unauthorized
disclosure of the NMC Confidential Information by USGC or any permitted
sublicensee of USGC.
9. TERM AND TERMINATION
9.1 Term. The term of this Agreement shall commence on the Effective Date and
shall continue, unless earlier terminated as provided in section 9.2, until
expiration of the last-to-expire of the NMC Patents and so long thereafter as
any portion of the NMC Flotation Technology is practiced within the Licensed
Field pursuant to the right and license of section 2.1.
8
9.2 Termination. This Agreement may be terminated prior to expiration of the
term set forth in section 9.1 as follows:
(a) In the event of a material breach of this Agreement by a party
("Breaching Party"), the other party ("Aggrieved Party") may terminate this
Agreement; provided, however, that prior to terminating this Agreement the
Aggrieved Party shall first provide written notice of the breach to the
Breaching Party, after which the Breaching Party shall have a thirty (30)
day period in which to cure the breach. If the breach remains uncured after
the 30 day cure period, then the Aggrieved Party may for thirty (30) days
following expiration of such cure period terminate this Agreement upon
written notice of the termination to the Breaching Party. In the event that
the Aggrieved Party fails to provide the written notice of termination
within the thirty (30) day period following the cure period, then the
Aggrieved Party must provide new notice of the breach to the Breaching
Party and allow a new cure period prior to thereafter terminating the
Agreement based on the same breach. Any and all statutes of limitation
concerning actions involving the material breach at issue shall be tolled
during the cure period. Failure of USGC to timely pay to NMC any sums due
to NMC hereunder shall be deemed a material breach by USGC.
(b) Upon written notice by a party to the other party in the event of any
of (i) initiation of any bankruptcy or insolvency proceeding by or against
the other party that is not dismissed within 90 days after the initiation,
(ii) appointment of a receiver for the assets of the other party, or (iii)
the sale of substantially all of the assets of the other party in
connection with either (i) or (ii); provided, however, that prior to
voluntary initiation by the other party of a bankruptcy or insolvency
proceeding, the other party shall provide reasonable advance written notice
of the pending initiation to the party and the parties shall consult with
each other prior to the other party initiating the proceeding.
(c) USGC may terminate this Agreement at any time with at least three (3)
months advance written notice of the termination to NMC.
9.3 Effect of Termination. Upon termination of this Agreement pursuant to either
section 9.1 or 9.2, the following shall apply:
(a) The right and license of section 2.1 and the freedom from liability of
section 2.2 shall end and all use of the NMC Flotation Technology at the
Facility shall cease.
(b) In any event, the following provisions shall survive termination of
this Agreement: (i) Articles 1, 6,7, 8 and 10 shall survive indefinitely,
(ii) sections 3.1, 3.2, 3.3, 3.4, 3.5 and 3.7 shall survive until such time
as NMC has received full payment of the initial license fee and payment for
all ongoing royalties (including annual minimums) in relation to Licensed
Concentrate and (iii) sections 5.1 and 5.2 shall survive for two (2) years
following the termination.
(c) Termination of this Agreement shall in no way affect the rights of the
parties accruing prior to the termination or the rights of a party to seek
and recover damages or other relief for any breach by the other party.
10. MISCELLANEOUS
10.1 Manner of Payment. Any amount due to NMC hereunder shall be paid to NMC at
the address provided for notices hereunder, unless otherwise instructed by NMC.
At the request of NMC, the payments shall be made to NMC by electronic funds
transfer to an account as designated by NMC. All amounts due to NMC shall be
calculated and paid in United States dollars.
10.2 Assignability. The obligations of a party shall be binding upon and the
rights of the party shall inure to the benefit of permitted successors and
permitted assigns of the party, provided that any purported assignment of this
Agreement or any portion thereof made in violation of this section shall be void
ab initio. This Agreement is not assignable, in whole or in part, by either
party without the prior written consent of the other party except as
specifically set forth in (a) and (b) below: (a) In the case of NMC, NMC shall
be permitted to assign to any Affiliate of NMC all or any part of this
Agreement, including assignment of any rights of NMC and delegation of any
obligations of NMC hereunder, without prior consent of USGC. (b) In the case of
USGC, provided that USGC is not in breach of this Agreement then USGC shall be
9
permitted to assign USGC's entire interest in this Agreement, including all
rights and obligations of USGC hereunder, to any Person acquiring a majority
equity interest, directly or indirectly, in the Tonkin Springs Property,
provided that such assignment by USGC shall not be effective until the assignee
has agreed in a writing signed by the assignee and delivered to NMC to be bound
by the terms of this Agreement in the place of USGC. USGC shall give NMC at
least thirty (30) days advance written notice prior to making such an
assignment. Following proper assignment, the assignee shall be liable to NMC for
all obligations of USGC, whether accruing prior to or following the assignment,
and USGC shall have continuing liability to NMC to an extent as provided in
subsections (b) and (c) of section 9.2 as if the Agreement had been terminated
with respect to USGC as of the date of the Assignment and this continuing
liability of USGC following the assignment shall be joint and several with the
assignee. Following a permitted assignment by USGC, NMC shall have no further
obligations under Article 4 and shall have no further obligation to pay for
legal defense costs under section 7.6, unless NMC otherwise agrees in a writing
signed by NMC. Acquisition by a Third Party, directly or indirectly, of a
majority interest in USGC or a majority equity interest in the Tonkin Springs
Property, shall be deemed an assignment of this Agreement by USGC.
10.3 Relationship of the Parties. Neither party shall be an agent of the other
party for any purpose and this Agreement does not establish any type of agency,
partnership or joint venture relationship between the parties, and neither party
shall perform any acts to bind or to purport to bind the other party in any way
or to represent that the other party is in any way responsible or liable for its
acts, statements or omissions.
10.4 Notices. All notices, payments, reports and other communications provided
for herein shall be in writing and delivered to the other party at the
respective address below, or such other address in the United States as a party
may hereafter specify in writing:
If to NMC: Newmont Technical Facility
00000 Xxxx Xxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx/Xxxx XxXxxx
With copy to: Newmont Mining Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
If to USGC: U.S. Gold Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxx
A notice hereunder shall be effective as of delivery to the receiving party at
the specified address. In computing a period of time following a notice under
this Agreement, the date on which the notice is delivered to the receiving party
shall not be counted.
10.5 Modification. The parties acknowledge and agree that this Agreement may
only be modified by an instrument in writing of equal formality, signed by duly
authorized representatives of the respective parties hereto.
10.6 Non-Waiver. Each party agrees that any waiver by the other party to enforce
any right hereunder on any occasion shall not establish a basis for claiming a
waiver of any right by the other party on any subsequent occasion.
10.7 Entire Agreement. This Agreement, together with the exhibits attached
hereto and which are incorporated herein by this reference, constitutes the
entire agreement and understanding of the parties relating to the subject matter
hereof and this Agreement supersedes all previous communications, proposals,
representations and agreements, whether oral or written, relating thereto,
including the Option Agreement.
10.8 Severability. Each party agrees that, should any provision of this
Agreement be determined by a court of competent jurisdiction to violate or
contravene any applicable law or policy, such provision shall be severed from
this Agreement and the remainder of the provisions hereof shall continue in full
force and effect.
10
10.9 Controlling Law and Jurisdiction. This Agreement shall be interpreted,
construed and governed in accordance with the laws of the State of Colorado,
U.S.A., without reference to conflict of laws principles. All disputes arising
from or relating to this Agreement shall be within the exclusive jurisdiction of
the state and/or federal courts located within the State of Colorado and the
parties hereby consent to such exclusive jurisdiction and waive objections to
venue therein; provided, however, that to the extent necessary in order to
obtain an order or an injunction outside of the United States, the parties
hereby consent to jurisdiction for such a proceeding of appropriate courts or
other tribunals located outside of the United States. To the extent that a state
and/or federal court located within the State of Colorado refuses to exercise
jurisdiction hereunder, the parties agree that jurisdiction shall be proper in
any court in which jurisdiction may be obtained notwithstanding this section.
10.10 Headings. The headings of the various articles and sections of this
Agreement have been inserted for convenience only and shall not be deemed to be
made a part of this Agreement.
IN WITNESS WHEREOF, each party hereto acknowledges that the representative named
below has the authority to execute this Agreement on behalf of the respective
party to form a legally binding contract and has caused this Agreement to be
duly executed on its behalf.
NEWMONT USA LIMITED U.S. GOLD CORPORATION
Name: /s/ Xxxxxxx Xxxxx Bare Name: /s/ Xxxxxxx X. Xxxx
Title: V.P., Chief Title: President
Technology Officer Date: 5/31/02
Date: 5/28/02
11
EXHIBIT A
Current NMC Patents:
1. U.S. Xxx. No. 5,653,945, having a term expiring April 18, 2015.
2. U.S. Xxx. No. 5,837,210, having a term expiring April 18, 2015.
3. U.S. Xxx. No. 6,210,648, having a term expiring April 18, 2015.
EXHIBIT B
Calculation of Net Smelter Returns (NSR)
NSR for Licensed Concentrate shall be a calculated amount based on the value of
all Precious Metals and other metals of value in the Licensed Concentrate less
applicable Allowable Deductions. Determination of NSR for the different
situations involving sale of Licensed Concentrate and sale of Licensed Dore are
as follows:
(a) When Precious Metal from Licensed Concentrate is produced in the form of a
Licensed Dore sold to a Third Party purchaser, the applicable value of
Precious Metals And other metals shall be the monies received from the
sale, and the following Allowable Deductions shall be permitted: the cost
of transporting and insuring the Licensed Dore from the mill at which the
Licensed Dore is produced to the point of delivery of the Licensed Dore to
the Third Party purchaser.
(b) When Licensed Concentrate is sold to a Third Party purchaser, then the
applicable value of the Precious Metals and other metals shall be the
monies received from the sale and the following Allowable Deductions shall
be permitted: the cost of transporting and insuring the Licensed
Concentrate from the Facility to the point of delivery to the Third Party
purchaser.
