EXHIBIT 10.2
------------
[Certain portions of this exhibit have been omitted pursuant to Rule
24b-2 and are subject to a confidential treatment request. Copies of
this exhibit containing the omitted information have been filed
separately with the Securities and Exchange Commission. The omitted
portions of this document are marked with a ***.]
TECHNOLOGY LICENSE AGREEMENT
THIS TECHNOLOGY LICENSE AGREEMENT (this "Agreement") is made and
entered into effective as of September 29, 2003 (the "Effective Date") by and
between Fine Gold Recovery Systems, Inc., a Nevada corporation ("FGRS") and
Xxxxxxx Luxembourg SA., a Luxemburg corporation ("Xxxxxxx"). Each of FGRS and
Xxxxxxx are sometimes referred to herein as a "Party" and collectively as the
"Parties."
RECITALS
WHEREAS, FGRS owns or has the right to license certain Intellectual
Property Rights in and to the Technology and the ACJ; and
WHEREAS, FGRS desires to grant to Xxxxxxx a non-exclusive license to
make and use the ACJ and to otherwise use the Technology in connection therewith
all in accordance with and subject to the terms and conditions hereinafter set
forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. DEFINITIONS. Capitalized terms used but not otherwise defined herein shall
have the respective meanings set forth in this Section 1. Defined terms may be
used in the singular and the plural.
1.1 "ACJ" means the Altair Centifugal Jig described in Exhibit A
attached hereto and by this reference incorporated herein.
1.2 "Affiliate," with respect to a Party hereto, means an entity which
directly or indirectly controls, is controlled by or is under common control
with such Party.
1.3 "Business Day" means any day other than a Saturday, Sunday or U.S.
federal holiday. Any reference to "days" (unless Business Days are specified)
shall mean calendar days. For purposes of this Agreement, there shall be eight
"Business Hours" in each Business Day.
1.4 "Confidentiality Agreement" means the Mutual Disclosure and
Confidentiality Agreement between the Parties and dated on or about October 22,
2002.
1.5 "Intellectual Property Rights" means patent rights, copyrights,
trade secret rights and all other intellectual and industrial property rights of
any sort.
1.6 "Licensed Territory" shall have the meaning given in Exhibit B
attached hereto and by this reference incorporated herein.
1
1.7 "Technology" means the technology, inventions (whether or not
patentable), ideas, processes, formulas and know-how used or owned by or
licensed or otherwise properly available to FGRS as of the Effective Date that
relate to the design, manufacturing, production, use or operation of the ACJ.
2. LICENSE
2.1 License Grant. Subject to the terms and conditions of this
Agreement, FGRS hereby grants to Xxxxxxx a non-exclusive, non-transferable,
non-sublicensable (except as expressly provided in this Section 2) right and
license, under FGRS's applicable Intellectual Property Rights in the Technology,
to make, use, import and export the ACJ.
2.2 License Scope. The foregoing license is limited to, and may be
exercised only in connection with, the manufacture, installation and operation
of the ACJ as a part of Xxxxxxx mineral processing projects done in the Licensed
Territory ("Xxxxxxx Projects"); provided, however, that ACJs may be manufactured
by Xxxxxxx in the United States or the Licensed Territory. The ACJ may only be
used by or under the authority of Xxxxxxx (i) within the Licensed Territory, and
(ii) as part of or in connection with a Xxxxxxx Project.
2.3 License to Affiliates. The license set forth in this Section 2
shall also extend to Xxxxxxx'x Affiliates and manufacturing sub-licensees, but
only to the extent that (i) such Affiliates and manufacturing sub-licensees are
bound by a writing (that names FGRS as an express third-party beneficiary) to
Xxxxxxx'x obligations under this Agreement, (ii) Xxxxxxx assumes full
responsibility for compliance by such Affiliates and manufacturing sub-licensees
with such obligations, and (iii) all payments and reports from Xxxxxxx'x
Affiliates are made through Xxxxxxx, together with Xxxxxxx'x payments and
reports.
2.4 Manufacture of ACJ. Xxxxxxx shall be responsible to manufacture (or
to contract for the manufacture of) all ACJs used in connection with Xxxxxxx
Projects.
2.5 Patent Markings. Xxxxxxx agrees to place on all ACJs used in
connection with, or incorporated into, a Xxxxxxx Project all reasonable patent
and patent application markings in a proper manner, as requested by FGRS.
2.6 Ownership. Xxxxxxx acknowledges and agrees that, as between the
Parties hereto, FGRS owns and shall retain all Intellectual Property Rights in
and to the Technology and that, except as expressly set forth herein, Xxxxxxx
shall have no right or license in or to the Technology.
3. EVALUATION PERIOD
3.1 Pre-Evaluation Trip. As soon as is reasonably practicable following
the execution of this Agreement, at Xxxxxxx'x sole cost and expense, Xxxxxxx
will send at least one technical representative to FGRS's facility in Reno,
Nevada (the "Pre-Evaluation Trip") to (i) receive technical information related
to the ACJ, (ii) observe the operation of the ACJ, and (iii) confer with FGRS
regarding Xxxxxxx'x anticipated installation and use of the ACJ during the
Evaluation Period (as defined below).
2
3.2 Evaluation Period. The evaluation period (the "Evaluation Period")
shall commence on the date the first ACJ arrives at a Xxxxxxx test site and
shall continue for a period of six months, unless extended by the mutual
agreement of the Parties. During the Evaluation Period, Xxxxxxx shall have the
right to test and evaluate the ACJ. FGRS may provide two sample ACJs to Xxxxxxx
for such purposes (the "Sample ACJs"). One of the Sample ACJs will be a skid
mounted Model 12-8 ACJ which includes an ACJ, ACJ controls, a pulse water pump,
a pulse water tank, and a pulse water distribution system (the electrical motors
and controls of the ACJ, ACJ controls and the pulse water pump are manufactured
for use in the United States). The Parties shall mutually agree upon the model
of the other Sample ACJ to be shipped to Xxxxxxx for evaluation purposes and the
timing of such shipment(s). Upon the expiration or termination of this
Agreement, Xxxxxxx shall return to FGRS, at Xxxxxxx'x sole cost and expense, the
Sample ACJs and any other ACJs or equipment provided to Xxxxxxx by FGRS.
3.3 Availability of ACJ Engineer.
(a) FGRS will make an ACJ engineer (an "ACJ Engineer") available to
Xxxxxxx during the Evaluation Period in accordance with the terms of this
Section 3.3. An ACJ Engineer (as selected by FGRS) will be available to Xxxxxxx
for (i) up to 50% of the Business Hours in each month during the first three
months of the Evaluation Period, and (ii) for up to 30% of the Business Hours in
each month during the final three months of the Evaluation Period. Upon the
reasonable request of Xxxxxxx, but subject to the availability of FGRS's ACJ
Engineers, an ACJ Engineer shall travel to such domestic or foreign locations as
Xxxxxxx shall direct; provided, however, that the timing of such travel shall be
mutually agreeable to Xxxxxxx and FGRS. All costs and expenses associated with
such travel shall be the sole responsibility of Xxxxxxx.
(b) If the Evaluation Period is extended for a period beyond six
months, the Parties shall mutually determine whether ACJ Engineers shall
continue to be made available to Xxxxxxx and, if so, the terms and conditions
pursuant to which such ACJ Engineers shall be made available.
3.4 Evaluation Period Expenses. Xxxxxxx shall be solely responsible for
all
costs and expenses associated with (i) the shipping and transportation of the
ACJs and other equipment as contemplated hereby, (ii) with the design,
installation and operation of Xxxxxxx'x evaluation and test facilities, and
(iii) all travel expenses incurred by ACJ Engineers while traveling at the
request or on behalf of Xxxxxxx.
3.5 Obligations After Expiration of Evaluation Period. After the
expiration of the Evaluation Period, FGRS shall have no further obligation to
support or train Xxxxxxx personnel and FGRS shall be under no obligation to hire
any additional ACJ Engineers. FGRS, within its sole discretion, may maintain an
ACJ test facility in Reno, Nevada, which may be moved to FGRS's Edison facility,
at FGRS's discretion.
4. OWNERSHIP OF INVENTIONS
4.1 Ownership of ACJ Improvements. Any technology, discovery,
improvement, modification or invention (whether patentable or not) specifically
related to the ACJ or the Technology developed, conceived or made by either
Party during the term of this Agreement, and all know-how, designs, formulae,
processes, manufacturing techniques, trade secrets, ideas, artwork, software or
3
other copyrightable or patentable works related thereto (collectively, the "ACJ
Improvements"), shall be solely owned by FGRS and FGRS shall have the exclusive
right to obtain patents and such other protection worldwide as it deems
appropriate to secure any Intellectual Property Rights in such ACJ Improvements
at its own expense.
4.2 Assignment of Rights in ACJ Improvements. Xxxxxxx shall promptly
notify FGRS of each ACJ Improvement conceived, developed or first reduced to
practice by Xxxxxxx (whether independently of or jointly with FGRS). In the
event that all of the Intellectual Property Rights in any ACJ Improvement are
not deemed to be solely and exclusively owned by FGRS for any reason, Xxxxxxx
hereby assigns, transfers and conveys to FGRS all of its right, title and
interest in and to such ACJ Improvement, including, but not limited to, all
related Intellectual Property Rights. Xxxxxxx further agrees to assist FGRS, at
FGRS's expense, to further evidence, record and perfect such assignment, and to
perfect, obtain, maintain, enforce, and defend any rights so assigned. Xxxxxxx
shall also cooperate with FGRS in connection with FGRS's efforts to obtain
patent or other intellectual property protection for any such ACJ Improvement
and Xxxxxxx and its employees and representatives shall, at FGRS's request,
execute and deliver any documents, including, without limitation, any patent or
other Intellectual Property Right assignments or applications, to permit FGRS to
exercise its rights under this Section 4. In the event that Xxxxxxx fails or
refuses to execute and deliver any such document, Xxxxxxx hereby appoints FGRS
as Xxxxxxx'x attorney-in-fact (this appointment to be irrevocable and a power
coupled with an interest) to act on Xxxxxxx'x behalf and to execute such
documents.
4.3 License of ACJ Improvements. For purposes of this Agreement, any
ACJ Improvement shall be deemed to be a part of the Technology or the ACJ (as
applicable) and licensed to Xxxxxxx, without additional charge, in accordance
with the terms and conditions of this Agreement.
4.4 Ownership of Project Improvements. Any technology, discovery,
improvement, modification or invention (whether patentable or not) specifically
related to the equipment or processes used in connection with a Xxxxxxx Project
(but not specifically related to the ACJ or the Technology) developed, conceived
or made by either Party during the term of this Agreement, and all know-how,
designs, formulae, processes, manufacturing techniques, trade secrets, ideas,
artwork, software or other copyrightable or patentable works related thereto
(collectively, the "Project Improvements"), shall be solely owned by Xxxxxxx and
Xxxxxxx shall have the exclusive right to obtain patents and such other
protection worldwide as it deems appropriate to secure any Intellectual Property
Rights in such Project Improvements at its own expense.
4.5 Assignment of Rights in Project Improvements. FGRS shall promptly
notify Xxxxxxx of each Project Improvement conceived, developed or first reduced
to practice by FGRS (whether independently of or jointly with Xxxxxxx). In the
event that all of the Intellectual Property Rights in any Project Improvement
are not deemed to be solely and exclusively owned by Xxxxxxx for any reason,
FGRS hereby assigns, transfers and conveys to Xxxxxxx all of its right, title
and interest in and to such Project Improvement, including, but not limited to,
all related Intellectual Property Rights. FGRS further agrees to assist Xxxxxxx,
at Xxxxxxx'x expense, to further evidence, record and perfect such assignment,
and to perfect, obtain, maintain, enforce, and defend any rights so assigned.
4
FGRS shall also cooperate with Xxxxxxx in connection with Xxxxxxx'x efforts to
obtain patent or other intellectual property protection for any such Project
Improvement and FGRS and its employees and representatives shall, at Xxxxxxx'x
request, execute and deliver any documents, including, without limitation, any
patent or other Intellectual Property Right assignments or applications, to
permit Xxxxxxx to exercise its rights under this Section 4. In the event that
FGRS fails or refuses to execute and deliver any such document, FGRS hereby
appoints Xxxxxxx as FGRS's attorney-in-fact (this appointment to be irrevocable
and a power coupled with an interest) to act on FGRS's behalf and to execute
such documents.
4.6 License of Project Improvements. Xxxxxxx hereby grants to FGRS a
perpetual, irrevocable, worldwide, royalty-free, non-exclusive, fully
sublicensable license to make, use, sell, offer to sell, import, export and
otherwise fully exploit any Project Improvement.
5. UTILIZATION OF ACJs
Xxxxxxx shall use its best efforts to include the ACJ in Xxxxxxx
Projects, which efforts shall include the testing of new feedstocks and the
demonstration of process capabilities. Xxxxxxx will incorporate the ACJ into
Xxxxxxx Projects and will install and operate ACJs where appropriate. In
addition, Xxxxxxx shall use reasonable efforts to develop new design
applications utilizing the unique characteristics of the ACJ.
6. LICENSE FEES
6.1 License Fees. In consideration of the rights and licenses granted
to Xxxxxxx hereunder, Xxxxxxx shall pay to FGRS license fees (the "License
Fees"), which License Fees shall be based upon the value added by the ACJ to
each Xxxxxxx Project, as determined in accordance with the terms of this Section
6.
6.2 Proposed Project Budget. Prior to the commencement of any Xxxxxxx
Project in which an ACJ will be used, sold or incorporated, Xxxxxxx will provide
a proposed project budget (a "Proposed Project Budget") to FGRS for its review
and approval. Each Proposed Project Budget shall include (i) a description of
the value of the products processed by the ACJ (the "ACJ Processed Products"),
(ii) the value of the products not processed by the ACJ ("Other Products"),
(iii) the Relative Value (as defined in Section 6.3 below), (iv) the amount of
budgeted profit ("Budgeted Profit"), (v) the amount of the License Fees
(calculated in accordance with the terms of Section 6.6 below), (vi) a proposed
schedule for the payment of the License Fees (the "Payment Schedule"), and (vii)
such other details about the proposed Xxxxxxx Project as FGRS reasonably
requests. The Budgeted Profit contained in each Proposed Project Budget shall be
made on a pre-tax basis and shall not carry corporate overhead allocations.
6.3 Relative Value. The "Relative Value" shall be calculated by
dividing the value of the ACJ Processed Products by the sum of the value of the
ACJ Processed Products and the value of the Other Products.
6.4 Payment Schedule. Unless the Parties otherwise agree in writing,
the Payment Schedule shall be structured such that it is similar to the schedule
of the payments to be made to Xxxxxxx in connection with the applicable Xxxxxxx
5
Project. By way of example only, if the amounts payable to Xxxxxxx in connection
with a Xxxxxxx Project are to be paid in twelve equal monthly payments over a
one-year period, the License Fees shall be paid to FGRS in twelve equal monthly
payments over a one-year period.
6.5 Review and Approval of Project Budget. As provided in Section 6.2,
Xxxxxxx shall provide a Proposed Project Budget to FGRS for its review and
approval prior to the commencement of any Xxxxxxx Project. FGRS, within its sole
discretion, shall have the right to accept or reject any Proposed Project Budget
and, notwithstanding any other provision of this Agreement, Xxxxxxx shall have
no right to use any ACJ in connection with, or incorporate an ACJ in, any
Xxxxxxx Project unless and until FGRS has accepted the applicable Proposed
Project Budget in writing.
6.6 Calculation of License Fees. The License Fees payable to FGRS in
connection with each Xxxxxxx Project shall equal the *** multiplied by the
Relative Value multiplied by ***. For convenience and by way of illustration
only, two examples of the License Fee calculation are provided below.
(a) Example #1 (Annual Operating Contract). Assuming that Xxxxxxx
enters into an annual operating contract for $3 million per
year with a *** of 20% ($600,000) and that the Relative Value
of the ACJ Processed Products is 50% of the total product
value, the License Fee payable to FGRS would be $*** per year
and calculated as follows:
------------------------------------------------- ---------------------- ---------------------------------------------
*** Relative Value License Fee
--- -------------- -----------
------------------------------------------------- ---------------------- ---------------------------------------------
*** *** ***
------------------------------------------------- ---------------------- ---------------------------------------------
(b) Example #2 (Lump-Sum Contract). Assuming that Xxxxxxx enters
into a lump-sum contract for $50 million with a *** of 15%
($7,500,000) and that the Relative Value of the ACJ Processed
Products is 25% of the total product value, the License Fee
payable to FGRS would be $*** and calculated as follows:
------------------------------------------------- ---------------------- ---------------------------------------------
*** Relative Value License Fee
--- -------------- -----------
------------------------------------------------- ---------------------- ---------------------------------------------
*** *** ***
------------------------------------------------- ---------------------- ---------------------------------------------
7. XXXXXXX COVENANTS
7.1 FGRS's Intellectual Property Rights. Xxxxxxx acknowledges and
agrees that neither it nor any of its Affiliates are currently in the business
of producing ACJs or any products similar thereto. Accordingly, Xxxxxxx
acknowledges and agrees that any activity in that area by Xxxxxxx or its
Affiliates after Xxxxxxx has had access to FGRS's Technology and other
Confidential Information would almost certainly rely on, be built on or include
FGRS's Technology or other Confidential Information. Xxxxxxx therefore agrees
that, except as specifically authorized under this Agreement, during the term of
6
this Agreement and during the five-year period thereafter, neither Xxxxxxx nor
any of its Affiliates will directly or indirectly engage in the business of
producing products similar to the ACJ.
7.2 Competitive Products. Xxxxxxx further agrees that, during the term
of this Agreement, it shall not manufacture, offer to sell, or sell any product
competitive with and similar to the ACJ on Xxxxxxx Projects.
7.3 Reports. Xxxxxxx shall submit periodic reports to FGRS with the
content and pursuant to such schedule as FGRS reasonably requests.
7.4 Infringement. If Xxxxxxx becomes aware of any product or activity
of any third party that may involve the infringement or violation of any FGRS
Intellectual Property Right, then Xxxxxxx shall promptly notify FGRS in writing
of such suspected infringement or violation. FGRS may in its discretion take or
not take whatever action it believes is appropriate; provided, however, if FGRS
elects to take action, Xxxxxxx will fully cooperate with such action at FGRS's
expense.
8. CONFIDENTIALITY
8.1 Confidential Information. The term "Confidential Information" shall
mean all information, in whatever form, disclosed by one Party (the "Disclosing
Party") to the other (the "Receiving Party") pertaining to the Technology, the
ACJ, or to the properties, composition or structure thereof or to the design,
manufacturing or processing thereof, regardless of whether such information is
identified in any manner as being confidential or proprietary. The Confidential
Information shall further include information pertaining to the Disclosing
Party's business, finances, technology, ideas, inventions (whether patentable or
not), marketing strategies and/or product offerings that is identified, or would
reasonably be understood by the Receiving Party, as being proprietary or
confidential. Confidential Information shall not include information that: (i)
was in the possession of the Receiving Party without confidentiality restriction
prior to disclosure by the Disclosing Party; (ii) at or after the time of
disclosure by the Disclosing Party becomes generally available to the public
through no act or omission on the part of the Receiving Party that is not
expressly authorized hereunder; (iii) has come into the possession of the
Receiving Party without confidentiality restriction from a third party and such
third party is under no obligation to maintain the confidentiality of such
information; or (iv) was independently developed by or for the Receiving Party
without the use of any Confidential Information received from the Disclosing
Party.
8.2 Restrictions on Use and Disclosure. The Receiving Party
acknowledges the confidential and proprietary nature of the Disclosing Party's
Confidential Information and agrees, except as expressly authorized or permitted
under this Agreement, (i) to hold the Disclosing Party's Confidential
Information in confidence and to take all reasonable precautions to protect such
Confidential Information (including, without limitation, all precautions the
Receiving Party employs with respect to its own confidential materials), (ii)
not to divulge any such Confidential Information to any third person, and (iii)
not to make any use whatsoever of such Confidential Information.
7
8.3 Employees and Others. The Receiving Party agrees to require its
employees, representatives and agents, and others who have access to the
Confidential Information, to agree in writing to safeguard the Confidential
Information according to the terms of this Section 8. Any breach of the
provisions of this Section 8 by any such person shall be deemed a breach
hereunder by the Receiving Party, and the Receiving Party shall be liable
therefor.
8.4 Judicial Order. In the event that the Receiving Party is ordered to
disclose the Disclosing Party's Confidential Information pursuant to a judicial
or government request, requirement or order, the Receiving Party will promptly
notify the Disclosing Party and take reasonable steps to assist the Disclosing
Party, at the Disclosing Party's expense, in contesting such request,
requirement or order or in otherwise protecting the Disclosing Party's rights
prior to disclosure.
8.5 Confidentiality of Agreement. Each Party agrees not to disclose any
of the terms and conditions of this Agreement except as and to the extent that
it may be mutually agreed by the Parties in writing or as may be required by
law. Notwithstanding the foregoing, either Party may disclose the terms of this
Agreement to potential investors or acquisition partners in connection with such
party's due diligence in connection with a proposed financing or acquisition,
provided that such third party has executed an agreement prohibiting
unauthorized use or disclosure of the terms of this Agreement and agrees to be
bound by the confidentiality terms of this Agreement.
8.6 Return of Confidential Information. Upon the termination or
expiration of this Agreement, at the request of the Disclosing Party, the
Receiving Party shall destroy or return to the Disclosing Party all originals,
copies and summaries of documents, materials and other tangible manifestations
of Confidential Information in the possession or control of the Receiving Party
or its Affiliates or sublicensees.
8.7 Remedies. The Receiving Party acknowledges and agrees that due to
the unique nature of the Disclosing Party's Confidential Information, there can
be no adequate remedy at law for any breach of its obligations hereunder, that
any such breach may allow the Receiving Party or third parties to unfairly
compete with the Disclosing Party resulting in irreparable harm to the
Disclosing Party, and therefore, that upon any such breach or any threat
thereof, the Disclosing Party shall be entitled to appropriate equitable relief
(without the posting of any bond) in addition to whatever remedies it might have
at law and to be indemnified by the Receiving Party from any loss or harm,
including, without limitation, lost profits and attorneys' fees, in connection
with any breach or enforcement of the Receiving Party's obligations hereunder or
the unauthorized use or release of any such Confidential Information. The
Receiving Party will notify the Disclosing Party in writing immediately upon the
occurrence of any such unauthorized release or other breach. Any breach of this
Section 8 will constitute a material breach of this Agreement.
9. REPRESENTATIONS AND WARRANTIES
9.1 Right to License. FGRS hereby represents and warrants that it has
the right to grant the rights and licenses to the Technology and the ACJ granted
under this Agreement.
8
9.2 Disclaimer of Warranties. EXCEPT AS PROVIDED IN SECTION 9.1 ABOVE,
FGRS MAKES NO WARRANTY WITH RESPECT TO THE ACJ OR THE TECHNOLOGY OR TO ANY OTHER
GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY
EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY,
NON-INFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE. MOREOVER, FGRS MAKES NO
WARRANTY OF ANY KIND AS TO THE RESULTS THAT MAY BE OBTAINED FROM THE OPERATION
OR USE OF THE ACJ.
10. INDEMNIFICATION
10.1 Indemnification by FGRS. FGRS shall defend, indemnify and hold
Xxxxxxx and its directors, officers, employees, shareholders and agents (the
"FGRS Indemnified Parties") harmless, from and against any and all claims, suits
or actions (i) alleging that Xxxxxxx'x manufacture or use of the ACJ in
accordance with the term of the license granted hereunder infringes the
intellectual property rights of a third party; or (ii) otherwise arising out of
this Agreement to the extent such claim, suit or action is a result of the
negligent, wrongful or intentional act of FGRS (collectively, the "FGRS
Indemnified Claims"). FGRS agrees to pay all costs, expenses, liabilities and
damages (including reasonable attorneys' fees) incurred or paid in settlement by
the FGRS Indemnified Parties in connection with any FGRS Indemnified Claim.
10.2 Exceptions. In no event will FGRS have any obligations under this
Section 10 or any liability for any FGRS Indemnified Claim if the FGRS
Indemnified Claim is caused by, or results from: (a) Xxxxxxx'x combination or
use of the Technology or the ACJ with other technologies or products, (b) any
modification of the Technology or the ACJ by anyone other than FGRS or someone
authorized to do so by FGRS in writing, (c) Xxxxxxx'x continued allegedly
infringing activity after being notified thereof or after being provided
modifications that would have avoided the alleged infringement, (d) Xxxxxxx'x
use of the Technology or the ACJ in a manner not strictly in accordance with
this Agreement, or (e) any modification of the Technology or the ACJ in
compliance with Xxxxxxx'x specifications.
10.3 Indemnification by Xxxxxxx. Xxxxxxx shall defend, indemnify and
hold FGRS and its directors, officers, employees, shareholders and agents (the
"Xxxxxxx Indemnified Parties") harmless, from and against any and all claims,
suits or actions arising out of this Agreement to the extent such claim, suit or
action is a result of the negligent, wrongful or intentional act of Xxxxxxx
(collectively, the "Xxxxxxx Indemnified Claim"). Xxxxxxx agrees to pay all
costs, expenses, liabilities and damages (including reasonable attorneys' fees)
incurred or paid in settlement by the Xxxxxxx Indemnified Parties in connection
with any Xxxxxxx Indemnified Claim.
10.4 Indemnification Procedure. The Party making a claim for
indemnification (the "Indemnified Party") shall notify the indemnifying Party of
any such claim or suit, and the indemnifying Party shall have the right to
defend itself and, if the Indemnified Party consents, also defend the
Indemnified Party through counsel of the indemnifying Party's choice provided
such counsel is acceptable to the Indemnified Party. The Indemnified Party shall
9
also be free to retain the Indemnified Party's own counsel, in which case the
Indemnified Party's reasonable attorneys' fees and expenses shall be covered by
the indemnity set forth in this Section 10.
11. LIMITATION OF LIABILITY
11.1 No Consequential Damages. EXCEPT FOR ANY OBLIGATIONS ARISING UNDER
SECTION 10 (INDEMNIFICATION) OR ACTIONS OF XXXXXXX OR ITS AFFILIATES OR
SUBLICENSEES BEYOND THE SCOPE OF THE LICENSE GRANTED HEREUNDER, UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT,
INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES ARISING OUT OF OR
RELATING IN ANY WAY TO THIS AGREEMENT, THE TECHNOLOGY, AND/OR THE ACJ, EVEN IF
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
11.2 Limitation of Liability. EXCEPT FOR ANY OBLIGATIONS ARISING UNDER
SECTION 10 (INDEMNIFICATION) OR ACTIONS OF XXXXXXX OR ITS AFFILIATES OR
SUBLICENSEES BEYOND THE SCOPE OF THE LICENSE GRANTED HEREUNDER, IN NO EVENT
SHALL EITHER PARTY'S AGGREGATE LIABILITY UNDER THIS AGREEMENT EXCEED AN AMOUNT
EQUAL TO THE TOTAL AMOUNT OF LICENSE FEES PAID BY XXXXXXX TO FGRS UNDER THIS
AGREEMENT. THIS SECTION 11 SHALL NOT LIMIT EITHER PARTY'S LIABILITY FOR THE
DEATH OR BODILY INJURY OF A PERSON.
12. TERM AND TERMINATION
12.1 Term. The term of this Agreement shall commence on the Effective
Date and, unless sooner terminated in accordance with the terms of this Section
12, shall continue for a period of three years. Thereafter, this Agreement shall
automatically renew for successive periods of one year each unless a Party
furnishes the other Party with written notice of non-renewal at least 30 days
prior to the expiration of the then-current term.
12.2 Termination With Cause. Either Party may terminate this Agreement
upon the material breach of the other Party, if such breach remains uncured for
30 days following written notice to the other Party specifying the breach in
reasonable detail and demanding its cure.
12.3 Payment Default. Notwithstanding any other provision of this
Agreement, FGRS shall have the right to immediately terminate this Agreement if
Xxxxxxx fails to make any payment within 30 days of the date such payment is due
under the applicable Payment Schedule agreed to by the Parties in accordance
with the terms of Section 6.
12.4 Termination During Evaluation Period. Xxxxxxx shall have the right
to terminate this Agreement at any time and for any reason during the Evaluation
Period upon 30 days written notice to FGRS.
12.5 License Fee Targets. The Parties have established the License Fee
targets (the "License Fee Targets") set forth in the following table. Each
License Fee Target is for a particular two-year period during the term of this
10
Agreement (each, a "License Fee Target Period"). Each such License Fee Target
Period begins on the termination of the Evaluation Period or the applicable
anniversary thereof.
------------------------------------------------------------- ------------------
License Fee Target Period License Fee Target
------------------------------------------------------------- ------------------
Years 1-2 (following termination of Evaluation Period) $50,000
------------------------------------------------------------- ------------------
Years 3-4 (following termination of Evaluation Period) $50,000
------------------------------------------------------------- ------------------
Years 5-6 (following termination of Evaluation Period) $50,000
------------------------------------------------------------- ------------------
All Subsequent License Fee Target Periods $50,000
------------------------------------------------------------- ------------------
In the event that Xxxxxxx fails to meet the License Fee Target for any
given License Fee Target Period, FGRS shall have the right to immediately
terminate this Agreement upon written notice to Xxxxxxx.
12.6 Immediate Termination. FGRS may terminate this Agreement
immediately, with or without notice, upon (i) the institution by or against
Xxxxxxx of insolvency, receivership or bankruptcy or liquidation proceedings or
any other proceedings for the settlement of Xxxxxxx'x debts, (ii) Xxxxxxx'x
making of an assignment for the benefit of creditors, (iii) Xxxxxxx'x
dissolution or ceasing to do business, or (iv) any failure by Xxxxxxx to comply
with all applicable laws of the United States and the Licensed Territory.
12.7 Effects of Termination. Upon the termination or expiration of this
Agreement: (i) Xxxxxxx shall have the right to complete any binding commitments
it may have in connection with any Xxxxxxx Project, provided that all license
fees are paid to FGRS in connection therewith in accordance with the terms of
this Agreement, (ii) except as set forth in clause (i) above, the license
granted hereunder to Xxxxxxx shall immediately terminate and Xxxxxxx shall
discontinue all manufacture and use of the ACJ and the Technology and any other
property belonging to FGRS, and (iii) Xxxxxxx shall make all payments to FGRS
due and owing as of the effective date of termination.
12.8 Survival. The provisions of Sections 1, 4.1, 4.2, 4.4, 4.5, 4.6,
7.1, 8, 10, 11, 12 and 13 shall survive any termination or expiration of this
Agreement.
12.9 Termination Liability. Neither Party shall incur any liability
whatsoever for any damages, losses or expenses of any kind suffered or incurred
by the other Party arising from or incident to any termination of this Agreement
(or any part thereof) which complies with the terms of this Agreement, whether
or not the terminating Party is aware of any such damages, losses or expenses.
12.10 Termination Not Sole Remedy. Termination is not the sole remedy
under this Agreement and, whether or not termination is effected, all other
remedies will remain available.
11
13. GENERAL PROVISIONS
13.1 Independent Contractors. The Parties are independent contractors
and not partners, joint venturers or otherwise affiliated and neither has any
right or authority to bind the other in any way.
13.2 Assignment. Neither Party may assign its rights or delegate its
obligations under this Agreement without the prior written consent of the other
Party, which shall not be unreasonably withheld, conditioned or delayed;
provided, however, that either Party shall have the right to assign its rights
and obligations under this Agreement to an Affiliate or to any successor to its
business or assets to which this Agreement relates, whether by merger, sale of
assets, sale of stock, reorganization or otherwise. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto, their successors and assigns.
13.3 Waiver or Modification. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver. Any
waiver, modification or amendment of any provision of this Agreement shall be
effective only if in writing in a document that specifically refers to this
Agreement and such document is signed by both of the Parties hereto.
13.4 Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of Nevada, without
reference to conflict of law principles. All disputes hereunder shall be
resolved in the applicable state or federal courts of the State of Nevada. The
Parties consent to the jurisdiction of such courts, agree to accept service of
process by mail, and waive any jurisdictional or venue defenses otherwise
available. In the event of any litigation arising out of this Agreement, the
prevailing Party shall be entitled to be reimbursed for all reasonable costs and
expenses, including reasonable attorneys' fees incurred in connection with such
litigation.
13.5 Notices. Any notices or other communications required or permitted
to be given or delivered hereunder shall, unless otherwise permitted, be in
writing and shall be delivered personally, by courier service, by facsimile
machine or by registered or certified mail, return receipt requested, postage
pre-paid, to the Parties as follows:
If to Xxxxxxx:
Xxxxxxx Engineering Inc.
00000 Xxxx Xxxxx Xxx., Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xx. Xxxxx Xxxxx
12
If to FGRS:
Fine Gold Recovery Systems, Inc.
000 Xxxxxx Xxx
Xxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xx. Xxxxxx Xxxxxxxxx
With a copy to:
Xxxxx X. Xxxxx
Xxxxx Xxxxx LLP
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other addresses as a Party may designate pursuant to this notice
provision. Any notice given shall be deemed to have been received on the date on
which it is delivered personally, by courier service or by facsimile, or, if
mailed, on the third business day following the mailing thereof.
13.6 Entire Agreement. This Agreement constitutes the full and complete
understanding and agreement of the Parties with respect to the subject matter
covered herein and supersedes all prior oral or written understandings and
agreements with respect thereto.
13.7 Force Majeure. Except for obligations to make payment or the
Parties' obligations under Section 8 hereof (Confidentiality), nonperformance by
either Party shall be excused to the extent that performance is rendered
impossible by war, strike, revolution, fire, flood, lack or failure of
transportation facilities, governmental acts, orders or restrictions, or any
other reason where failure to perform is beyond the control and not caused by
the negligence of the non-performing Party. The Party facing an event of force
majeure shall use commercially reasonable efforts to remedy the situation as
well as to minimize its effects.
13.8 Export Control. Each Party shall comply with all applicable export
laws, restrictions, and regulations of any United States or foreign agency or
authority and will not export or re-export, or authorize the export or re-export
of any product, technology or information it obtains or learns pursuant to this
Agreement (or any direct product thereof) in violation of any such laws,
restrictions or regulations.
13.9 Severability. If any provision of this Agreement is held illegal,
invalid or unenforceable by a court of competent jurisdiction, that provision
will be limited or eliminated to the minimum extent necessary so that this
Agreement shall otherwise remain in full force and effect and enforceable.
13.10 Counterparts. This Agreement may be executed in several
counterparts, each of which shall constitute an original, but all of which
together shall constitute one and the same instrument.
13
13.11 Facsimile Signatures. The Parties hereto agree that transmission
to the other Party of this Agreement with its facsimile signature shall bind the
Party transmitting this by facsimile in the same manner as if such Party's
original signature had been delivered. Without limiting the foregoing, each
Party who transmits this Agreement to the other Party with its facsimile
signature covenants to deliver the original thereof to the other Party as soon
as practicable thereafter.
13.12 Headings. The headings contained in this Agreement have been
inserted for convenience of reference only and shall not modify, define, expand
or limit any of the provisions of this Agreement.
[Signature Page Follows]
14
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the Effective Date.
FINE GOLD RECOVERY SYSTEMS, INC. XXXXXXX LUXEMBOURG SA .
By: /s/ C . Xxxxxxx Xxxxxx By: /s/ X.X. Xxxxxxx
----------------------------- --------------------------
Name: C . Xxxxxxx Xxxxxx Name: X.X. Xxxxxxx
Title: President Title: Attorney-in-Fact
15
Exhibit A
Altair Centrifugal Jig
Conventional Jigs
A conventional jig separates a slurry of mineral particles as it flows
across the top of a screen. Water is periodically pulsed up through the screen
to eliminate interparticle friction and allow differential settling according to
the variations in the net specific gravities of the ore. Heavier minerals are
allowed to pass downward through the screen while lighter materials flow across
the screen to a discharge point.
The ACJ
The Altair Centrifugal Jig or ACJ is the jig produced by FGRS using the
Technology. The ACJ operates according to conventional jig principles except
that the screen surface is cylindrical and is rotated to subject the particles
to centrifugal forces. As currently designed, materials to be processed by the
ACJ are introduced into the top of the ACJ in a slurry mix with water. The
slurry is diffused across the top of the interior of a vertical cylindrical
screen which is rotating. Water is pulsed through the screen allowing
differential separation in the slurry material. Heavy particles pass through the
screen, are collected, and exit the machine in a "concentrate" stream. Lighter
particles flow down the screen interior, are collected and exit out the bottom
of the machine in a separate "tails" stream. Use of the ACJ requires no chemical
additives. In operation, the ACJ utilizes a combination of standard mechanical
jig and centrifugal technologies.
Exhibit B
Licensed Territory
The "Licensed Territory" is determined by reference to the following
table. The Licensed Territory for a given application (the relevant applications
are listed along the top row of the table) shall include each region with
respect to which there is a "B" included in the box representing such region. By
way of example, for use of the ACJ with coal, the Licensed Territory would
include Africa, the former Soviet Union and Australia.
ACJ Geographical Areas and Applications
------------------------------------------------------------------------------------------------------------------------------------
Region *** *** *** *** *** *** ***
------------------------------------------------------------------------------------------------------------------------------------
Africa B B B B B B B
Former Soviet Union B B B B B A B
Australia B A A A A A B
North America B A A A A A A
South America B A A A A A A
China B A A A A A A
India B A A B A A A
Middle East B A A A A A A
Rest of the World B A A A A A A
------------------------------------------------------------------------------------------------------------------------------------
A = FGRS
B = Xxxxxxx
