EXHIBIT 10-3
_________
URANIUM MINING LEASE
AMONG:
URANIUM ENERGY CORP.
AND EACH OF:
▇▇▇▇ ▇. ▇▇▇▇▇▇
AND:
▇▇▇▇ ▇▇▇▇▇▇▇▇
URANIUM ENERGY CORP.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, ▇.▇.▇., ▇▇▇▇▇
_________
URANIUM MINING LEASE
THIS URANIUM MINING LEASE is made and dated for reference effective as
at May 1, 2006 (the "EFFECTIVE DATE") as fully executed on this _____ day of
June, 2006.
AMONG:
URANIUM ENERGY CORP., a company incorporated under the laws of the
State of Nevada, U.S.A., and having an executive office and an address
for notice and delivery located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇, ▇.▇.▇., ▇▇▇▇▇
(the "LESSEE");
OF THE FIRST PART
AND EACH OF:
▇▇▇▇ ▇. ▇▇▇▇▇▇, businessperson, having an address for notice and
delivery located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇.▇.▇.,
▇▇▇▇▇ as the owner of 75% of the AB 1-41 unpatented mining claims
("▇▇. ▇▇▇▇▇▇");
OF THE SECOND PART
AND:
▇▇▇▇ ▇▇▇▇▇▇▇▇, businessperson, having an address for notice and
delivery located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇.▇.
as the owner of 25% of the AB 1-41 unpatented mining claims
("▇▇. ▇▇▇▇▇▇▇▇");
OF THE THIRD PART
(▇▇. ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇ being hereinafter collectively referred to
as the "LESSOR" as the context so requires); and
(the Lessee and the Lessor being hereinafter singularly also referred
to as a "PARTY" and collectively referred to as the "PARTIES" as the
context so requires).
WHEREAS:
A. The Lessee is a reporting company incorporated under the laws of the
State of Nevada, U.S.A., has its common shares listed for trading on the
Over-the-counter Bulletin Board market in the United States and is in the
principal business of acquiring, exploring and developing various mineral
resource properties of merit;
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B. Messrs. Jebsen and ▇▇▇▇▇▇▇▇, as the joint Lessor hereunder, are the
legal and beneficial co-owners of each of those certain lode mining claims which
are located in Carbon County, Wyoming; and which are better know and described
as the "▇▇▇▇▇▇ ▇▇ Claim Group (collectively, the "LEASED LAND" hereunder); and
which mineral property interests comprising the Leased Land are more
particularly described in Exhibit "A" which is attached hereto and more
particularly described in Exhibit "C" which is attached hereto;
C. Since the introduction of the Parties hereto the Parties hereby
acknowledge and agree that there have been various discussions and negotiations
between them relating to the terms and conditions of the proposed granting by
the Lessor to the Lessee of a ten year lease in respect of the Leased Land for
the purposes of investigating, exploring, prospecting, drilling, solution
mining, producing, extracting, milling, treating, processing, upgrading,
removing, transporting, stockpiling and storing uranium, thorium and other
fissionable or spatially associated substances similar to and produced in
conjunction with those mentioned above (collectively, the "LEASE") and,
correspondingly, that it is their intention by the terms and conditions of this
Lease to hereby replace, in their entirety, all such prior discussions,
negotiations, understandings and agreements with respect to the proposed Lease;
and
D. The Parties hereto have agreed to enter into this Lease which replaces,
in its entirety, all such prior discussions, negotiations, understandings and
agreements, and, furthermore, which necessarily clarifies their respective
duties and obligations with respect to the within Lease to be provided
hereunder, all in accordance with the terms and conditions of this Lease;
NOW THEREFORE THIS LEASE WITNESSETH that in consideration of the mutual
covenants and provisos herein contained, THE PARTIES HERETO AGREE AS FOLLOWS:
1. GRANT OF THE LEASE. In consideration U.S. $50,000 and other good and
valuable consideration now paid by the Lessee to the order and the direction of
the Lessor; the receipt and sufficiency of which is hereby acknowledged by the
Lessor; and in future consideration of the proposed "Production Royalty" (as
hereinafter defined) herein provided for and the agreements of the Lessee herein
contained, the Lessor hereby grants, leases and lets unto the Lessee (the
"LEASE"), to the extent that the Lessor has said rights now or in the future,
the land covered hereby (hereinafter collectively referred to as the "LEASED
LAND") for the purposes hereinafter specified; and the Leased Land being more
particularly described in Schedule "A" which is attached hereto and which forms
a material part hereof; and which Leased Land consists of 41 unpatented lode
mining claims located in sections 5, 6 and 7, T27N, R77W and sections 31 and 32,
T28N, R77W 6th P.M. in Carbon Country, Wyoming, U.S.A.
2. PURPOSES OF THE LEASE. It is hereby acknowledged and agreed that the
Lease and the said Leased Land is being leased for the purposes of
investigating, exploring, prospecting, drilling, solution mining, producing,
extracting, milling, treating, processing, upgrading, removing, transporting,
stockpiling and storing uranium, thorium and other fissionable or spatially
associated substances similar to and produced in conjunction with those
mentioned above (hereinafter referred to individually or collectively as the
"LEASED SUBSTANCES") by methods deemed desirable by the Lessee; but excluding
sand, gravel and caliche unless produced in connection with those mentioned; and
specifically excluding oil, gas and associated hydrocarbon substances. In
addition, subject to any restrictions or requirements of federal or state laws,
rules and regulations, the Lessor hereby further grants, leases and lets unto
the Lessee the Leased Land for the purposes of: injection gas, water or other
fluids commonly associated with solution mining practices, air and any other
substance into the subsurface strata; conducting all types of solution mining
recovery operations for the Leased Substances; establishing and using facilities
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for the disposition of solution, tailings and other waste materials produced in
the extraction of the Leased Substances; laying pipeline, building roads,
bridges, tanks, power and telephone lines, electric and distribution lines and
other utilities and together with the maintenance and removal thereof; and ▇▇▇▇▇
or processing structures or facilities deemed reasonably necessary by the Lessee
to conduct solution mining, recovery and restoration operations granted under
this Lease.
Notwithstanding, however, the general provisions of the foregoing
paragraph, it is further agreed and stipulated that the facilities to be placed
on the Leased Land shall be confined to those facilities reasonably deemed
necessary or convenient by the Lessee for exploring, prospecting, mining,
stockpiling, storing, processing, treating upgrading, removing and transporting
the Leased Substances. In this regard the Lessee, to the extent allowed by
federal and state laws, rules and regulations, is hereby granted the right,
without any further consideration or payment, to use the Leased Land and other
improvements and facilities on, in or under the Leased Land for or in connection
with the mining, removing, transporting, preparation and treatment of minerals,
metals and materials (and disposal of waste materials into a waste water
disposal well at a site of the Lessee's choice), from adjacent lands and lands
in the areas of interest, and to construct and use additional facilities on the
Leased Premises for said purposes, and these rights shall survive termination of
this Lease for so long a period of time as the Lessee has need for all or any of
them.
3. PRIMARY TERM AND RENEWAL TERMS OF THE LEASE. Subject to the provisions
herein contained, this Lease shall remain in force for a term of 10 years from
the Effective Date first written above (hereinafter referred to as the "PRIMARY
TERM") and so long thereafter as uranium or any of the other Leased Substances
are produced in paying quantities from the said Leased Land or land with which
said Leased Land is pooled, and/or as long thereafter as this Lease may be
maintained in force and effect under any of the other provisions herein
contained; in this regard paying quantities being defined as production in
quantities sufficient to yield a profitable return to the Lessee in excess of
drilling, development and operational costs set solely at the discretion of the
Lessee (in each such instance being a "RENEWAL TERM" herein if applicable).
4. PRODUCTION ROYALTY. The Lessee shall pay to the Lessor a royalty (the
"PRODUCTION ROYALTY") for uranium or other Leased Substances mined by the Lessee
from the Leased Land or land pooled therewith and saved and removed therefrom
and sold, or processed and sold, by or for the Lessee. The total amount of the
Production Royalty shall be as follows:
(a) in the event that the actual sales price to the Lessee for
uranium or other Leased Substances mined by the Lessee from
the Leased Land or land pooled therewith is less than U.S. $50
per pound, then the Lessee shall pay to the Lessor a
Production Royalty in the amount of 5% of the net proceeds
received by the Lessee for such uranium-bearing solution,
yellowcake, U3O8, slurry or other Leased Substances after
deducting the cost, if any, of transporting such
uranium-bearing solution, yellowcake, U3O8, slurry or other
Leased Substances from the Leased Land or land pooled
therewith to the point of sale; and
(b) in the event that the actual sales price to the Lessee for
uranium or other Leased Substances mined by the Lessee from
the Leased Land or land pooled therewith is equal to or
greater than U.S. $50 per pound, then the Lessee shall pay to
the Lessor a Production Royalty in the amount of 6% of the net
proceeds received by the Lessee for such uranium-bearing
solution, yellowcake, U3O8, slurry or other Leased Substances
after deducting the cost, if any, of transporting such
uranium-bearing solution, yellowcake, U3O8, slurry or other
Leased Substances from the Leased Land or land pooled
therewith to the point of sale.
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All Production Royalties which are due and payable under the terms of
this Lease shall be paid within 30 calendar days after the end of the calendar
month within which the Lessee receives the proceeds of the sale of the uranium
or other Leased Substances; and which payment shall be subject to adjustment, by
addition to or deduction from the Production Royalty due, as a result of actual
sales assays. The Lessee's failure to pay or tender or timely pay or tender any
sum as a Production Royalty shall render the Lessee liable for the amount due
plus simple interest accrued thereon at the rate of 12% per annum, compounded
semi-annually.
The Lessee shall use reasonable diligence to sell the uranium or Leased
Substances and any of them, on which a Production Royalty is payable under the
terms of this Lease, but in the exercise of such diligence the Lessee shall not
be obligated to sell the same, or any of them, under terms, conditions or
circumstances which, in the Lessee's judgment, exercised in good faith, is not
in its best interests.
5. MINIMUM ADVANCE ROYALTIES AND SET-OFF FOR PRODUCTION ROYALTIES. In
addition to any other payments required by this Lease and until this Lease is
terminated by the Lessee or expires in accordance with its terms, the Lessee
shall pay to the order and direction of the Lessor the following minimum advance
royalties (each a "MINIMUM ADVANCE ROYALTY"):
(a) U.S. $30,000 on or before September 15, 2006;
(b) U.S. $30,000 on or before January 1, 2007;
(c) U.S. $50,000 on or before June 1, 2007;
(d) U.S. $500,000 on or before December 1, 2007;
(e) U.S. $500,000 on or before December 1, 2008; and
(f) U.S. $50,000 on or before December 1, 2009 and a further U.S.
$50,000 on or before December 1st of every year subsequent to
December 1, 2009 and as long thereafter as uranium or other
Leased Substances are being produced in commercial quantities
from the leased land or land pooled therewith.
The Minimum Advance Royalty Payments shall be paid as follows: 75% to
▇▇▇▇ ▇. ▇▇▇▇▇▇; 25% to ▇▇▇▇ ▇▇▇▇▇▇▇▇. Any Minimum Advance Royalty paid or
payable will be credited against up to 60% of a 5% Production Royalty or up to
66.67% of a 6% Production Royalty due as hereinafter provided for the uranium or
Leased Substances actually produced from the Leased Land or land pooled
therewith during the year for which such Minimum Advance Royalty was paid or
payable (in each instance being a "SET-OFF"). Lessee shall apply the Set-off
amount against such Minimum Advance Royalty until it has been fully recouped.
6. AREA OF INFLUENCE. The Parties hereby acknowledge and agree that,
subject to the following existing limitations respecting the Lessee, they have
hereby established an area of influence (the "AREA OF INFLUENCE") in respect of
the Leased Land for which the Production Royalty for any uranium-bearing
solution, yellowcake, U3O8, slurry or other Leased Substances mined from only
pre-Tertiary formations within the Area of Influence by the Lessee, or by its
respective partners, co-adventurers, assignees or affiliates, will also be due
and payable by the Lessee to the Lessor hereunder. The Area of Influence, while
generally applicable to a three mile boundary surrounding the Leased Land, is
hereby expressly limited to any existing contractual relationships having been
entered into by the Lessee within the Area of Influence; the particulars of
which having already been provided by the Lessee to the Lessor and accepted; and
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such area within the Area of Influence being so limited having been highlighted
in Exhibit "B" which is attached hereto.
The Lessee shall pay to the Lessor a Production Royalty in the amount
of 2% of the net proceeds received by the Lessee for such uranium-bearing
solution, yellowcake, U3O8, slurry or other Leased Substances mined or produced
from the Area of Influence. The Production Royalty shall be subject to cost of
transporting deduction set forth in paragraph 4.
7. LEASED LAND MAINTENANCE - INTENT TO HOLD AFFIDAVIT. The Lessee shall
be responsible for all fees and requirements to maintain the validity and
ownership of the claims making up the Leased Land. The Lessee agrees to pay the
annual Bureau of Land Management claim maintenance fees associated with the
Leased Land at least 60 calendar days prior to September 1st of each year during
the continuance of the Lease and to file Intent to Hold Affidavits with the
Carbon County Clerk within 30 calendar days prior to the required filing
deadline with a copy to be provided to the Lessor together with a copy of the
maintenance fee payments and Intent to Hold Affidavit in connection with the
same.
8. DEFAULT OF PAYMENTS UNDER THE LEASE. If at any time the Lessee is in
default in the performance of the terms and conditions of this Lease to be
performed by it, and if, within 45 calendar days after written notice of the
default is given by the Lessor to the Lessee, the Lessee has not commenced
activities which will cure the default if pursued diligently, then the Lessor
may terminate this Lease by written notice to the Lessee.
9. LACK OF PRODUCTION UNDER THE LEASE. If at the expiration of the Primary
Term or any Renewal Term uranium or other Leased Substances is not being
produced from said Leased Land or land pooled therewith, but the Lessee is
engaged in operations directed toward the establishment or reestablishment of
production therefrom, this Lease shall remain in force so long as such
operations are prosecuted with no cessation of more than 90 consecutive calendar
days; and if the operations result in production, so long thereafter as uranium
or other Leased Substances is produced from said Leased Land or land pooled
therewith. If production of uranium or other Leased Substances from said Leased
Land or land pooled therewith has been obtained, and such production shall cease
for any cause, whether on one or more occasions, this Lease shall not terminate
if the Lessee commences or resumes operations directed towards the
reestablishment of production from said Leased Land or land pooled therewith
within 90 calendar days after cessation of production and such operations
continue with no cessation of more than 90 calendar days until production is
reestablished, or if it be within the Primary Term or any Renewal Term
production commences or resumes the payment or tender of the Production Royalty
or commences operations directed towards the reestablishment of production on or
before the Production Royalty payment date next ensuing. In the event production
ceases, the Lessee shall within 45 days of such cessation of production notify
the Lessor of such cessation of production. Further, the Lessee shall within 45
days of resumption of production, notify the Lessor of resumption of production.
10. POOLED LAND. The Lessee is hereby granted the right to pool all or any
part of said Leased Land with any other land, lease or leases in the vicinity
thereof when in the Lessee's judgment it is necessary or advisable to do so for
the purpose of exploring or developing and operating the Leased Land for in situ
▇▇▇▇▇ or solution mining operations whether owned by the Lessor or a third party
at any time and from time to time to explore, drill, solution mine, operate for,
produce, extract, remove and transport uranium or other Leased Substances;
provided, however, that the area so pooled shall be determined by the ore body
delineated by exploration and development drilling at the economic cut-off
grade, and the pooled area shall cover only the delineated ore body from which
production attributable to the pooled area is concerned. For the purpose of
determining the Production Royalty hereunder, any uranium or other Leased
Substances produced from the land so pooled shall be allocated to said Leased
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Land on the basis that the surface acreage within the delineated ore body
contributed by said Leased Land relates to the total surface acreage within the
delineated ore body of the land so pooled. It shall be conclusively presumed
that the uranium or other Leased Substances produced from such pooled land is
produced uniformly within the boundaries of the pooled land both as to quantity
and quality, and the amount allocated to the Leased Land shall, for all purposes
hereunder, be presumed to have been produced from said Leased Land.
11. COMMINGLING URANIUM OR LEASED SUBSTANCES. The Lessee shall have the
right from time to time and at any time to mix or commingle uranium or other
Leased Substances from the Leased Land or land pooled therewith with like
substances produced from other land for transporting, treating, processing and
storing prior to or for the purpose of sale. Prior to such mixing or commingling
the uranium content or other Leased Substances content where such are being
processed for sale, of the raw ore or the amount thereof in solution (as the
case may be), shall be assayed or otherwise determined by periodic sampling,
using sound engineering principles, and the volume of all solutions produced
shall be determined by adequate metering devices. For Production Royalty
purposes, the uranium or other Leased Substances attributable to the said Leased
Land where such mixing or commingling has occurred, shall be a percentage of the
total uranium or other Leased Substances sold by the Lessee (including the
Lessor's share from pooled land in accordance with section 9 above), which
percentage shall be determined by the relationship of uranium or other Leased
Substances content in the production from said Leased Land, multiplied by the
volume thereof (including the Lessor's share from pooled land) bears to the
total uranium or other Leased Substances content, multiplied by the total volume
of the mixed or commingled production from all land for the applicable
production period.
12. RELEASE UPON TERMINATION. The Lessee, its successors and assigns, shall
execute and deliver to the Lessor, or to the depository Bank, or file for
record, a release or releases of this Lease within 90 calendar days of the date
of termination of that portion or interval affected, in whole or in part of the
Leased Land, Leased Substances, subsurface interval or any depth thereunder, and
the Lessee shall thereby be released from all future obligations owed to the
Lessor as to the released land, substances, horizon, zone or formation as of the
date of release.
13. RIGHT OF ENTRY AND ACCESS TO DATA AND INFORMATION.
(a) The Lessor, or its duly authorized representatives, shall have
the right at all reasonable times and at theirs own risk to
enter into and upon said premises and workings thereon for the
purposes of examining and inspecting the same and ascertaining
whether the terms and conditions of this Lease are being
carried out and performed by the Lessee, so long as such
access or inspection does not interfere with the operations of
the Lessee.
(b) The Lessee shall provide the Lessor, or its duly authorized
representatives, a copy of all data and information created by
or on behalf of the Lessee and including, but not limited to,
logs, cores, samples and analyses, (including operation
analyses) related to the Leased Lands and the Area of
Influence. Such information and data will include, but is not
limited to, logs, cores, samples, analyses, drill hole maps,
grade thickness maps and calculations, redox maps, geologic
maps (which include, but are not limited to, sand thickness
maps), reserve calculations, lab tests, hydrologic data,
environmental reports and all other factual and interpretative
data and information relating to any processing plant (and
including, but not limited to, lab and pilot plant studies).
The Lessee shall also provide the Lessor with information
pertaining to the reclamation of drill holes. The Lessor, or
its duly authorized representatives, shall also have access to
production records, assays and evaluations of ore records and
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to all other records pertinent and necessary for
substantiating the compliance of the Lessee with the
provisions of this Lease.
(c) The Lessor shall receive copies of the data and information at
not less than six month intervals during the pendency of this
Lease. In the event that this Lease is terminated, the Lessee
shall deliver to the Lessor a copy of all data and information
compiled relating to the Leased Lands and the Area of
Influence and not previously provided.
(d) The Lessor agrees to keep all data and information received by
the Lessor, or its duly authorized representatives,
confidential during the term of the Lease pursuant to the
requirements set forth in paragraph 28 of this Lease. The
Lessee shall not be deemed to have made any representations or
warranties, express or implied, regarding the accuracy of any
factual or interpretative data and information, and the Lessor
may rely on such data and information solely at the Lessor's
own risk.
(e) It is agreed and stipulated that neither the Lessee, nor any
of its agents, assignees, employees, contractors or
subcontractors, their agents or employees, shall at any time
▇▇▇▇ or fish on the premises, nor shall they, or any of them,
carry onto the premises firearms or other equipment designed
or adapted for such purpose. The Lessor, or its duly
authorized representatives, shall have the right at all times
to inspect vehicles entering upon or leaving said premises for
the purpose of ascertaining whether the provisions of this
section are being carried out.
14. MINING OPERATIONS. The Lessee agrees to conduct its operations
hereunder in a good and minerlike manner and in compliance with all applicable
laws and regulations of any governmental entity having jurisdiction over such
operations on the Leased Land and on the Area of Influence and including, but
not limited to, those federal, state and local laws, rules and regulations
pertaining to mine safety and health, environmental and operational permits and
consents.
15. COMPLIANCE WITH LAW. The Lessee's use of the Leased Lands, and any
exploration, development, mining or reclamation or other activities on, in or
under such lands, shall be undertaken by the Lessee in full compliance with all
applicable federal, state and local laws, rules and regulations applicable to
such use and activities and including, without limitation, those concerning
mining methods, environmental matters and reclamation. At a minimum the Lessee
shall fully reclaim all disturbances, occasioned by the Lessee, in accordance
with the reclamation and performance standards required by the State of Wyoming
and Bureau of Land Management, as well as in regulations adopted thereunder, or
under the federal Atomic Energy Act, Uranium Mill Tailings Radiation Control Act
or other applicable state, local or federal law and regulations. Any termination
of this Lease notwithstanding, and unless otherwise agreed in writing, the
Lessee agrees, during and after the term of this Lease, to take full
responsibility for such compliance and reclamation and for any legal liability
(whether related to environmental, reclamation or otherwise) or enforcement
proceedings arising from the Lessee's activities or conditions on, in or under
such lands to the extent such conditions were created or caused by the Lessee,
its employees, contractors, affiliates, venture partners, assignees, permittees,
agents or other representatives. In addition, all activities or work performed
or caused to be performed by the Lessee on such lands shall be performed in
accordance with the best practices in the mining and reclamation fields. In the
event the Lessee is released by any federal, state or local regulatory agency of
any mining, environmental or reclamation obligation, the Lessee shall be deemed
to have fully complied with that obligation under the Lease.
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16. DRILL HOLE LOCATION. The Lessee agrees to ▇▇▇▇ all drill holes on the
Leased Lands and Area of Influence in such a manner so that such drill holes can
be relocated with a metal detector.
17. INDEMNIFICATION.
(a) Except to the extent prohibited by law, the Lessee agrees to
indemnify, protect, defend and hold the Lessor harmless from
and against any and all environmental (including, without
limitation, environmental protection or reclamation-related)
or non-environmental claims, losses, demands, lawsuits,
citizen suits, proceedings, enforcement actions,
administrative orders, liabilities, costs, damages, injury and
litigation expenses (including, without limitation, attorneys'
and experts' fees), arising in any way and at any time for any
reason from the Lessee's use, exploitation or other activities
on, in or under the Leased Land and the Area of Influence, or
from conditions on, in or under such lands to the extent such
conditions were created or caused by the Lessee, its
employees, contractors, affiliates, successors, venture
partners, assignees, permittees, agents or other
representatives.
(b) This agreement to indemnify does not extend to liability,
claims, damages, losses or expenses, including attorney fees,
caused by or resulting from, in whole or in part, the
negligence, act or omission of the Lessor, or the agents or
employees of Lessor, in its performance as stated in Wyoming
Statutes 1977, ss. 30-1-131. This limitation on the Lessee's
agreement to indemnify is intended solely to ensure that the
agreement satisfies Wyoming's anti-indemnification provision,
W.S. 1977 ss. 30-1-131.
18. INSURANCE.
(a) The Lessee agrees to carry and maintain in full effect during
the term of this Mining Lease, and during any extension or
renewal thereto, adequate insurance coverage to prevent the
Lessor from suffering damages of any nature by virtue of the
Lessee's utilization of the Property.
(b) To meet its obligation to the Lessor, the Lessee agrees to
carry and maintain the following minimum insurance coverage:
(1) Worker's compensation coverage on all employees
engaged in operations on the Property; and
(2) General liability insurance covering bodily injury
and property damage liability in a recognized form
with a reputable insurance company with a reasonable
combined single limit per occurrence. The Lessee
shall cause the Lessor to be named as an
additional-named insured on such policy of insurance,
and shall deliver proof thereof to the Lessor.
(c) During the term of the Mining Lease or any extensions
or renewals thereto, the Lessee shall provide the
Lessor continuing evidence of ongoing insurance
coverage in the form of valid certificates of
insurance.
(d) The Lessee shall require any contractor employed by
the Lessee to perform any manner of work on, in, or
under the Property, to carry and maintain insurance
coverage as set forth above. The Lessee shall require
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any such contractor to obtain additional-named
insured coverage for the Lessor under its policy of
liability insurance prior to commencing work.
19. RIGHT TO REMOVE PROPERTY. The Lessee shall have the right at any time
during or within one year after the termination or expiration of this Lease to
remove all property and fixtures placed by the Lessee on said Leased Land. In
the event the Primary Term and any Renewal Term of said Lease have expired and
complete restoration has not been accomplished by the Lessee, the Lessee shall
have the right of ingress and egress over existing roads, to the acreage
containing plant, well field, monitor ▇▇▇▇▇ and other facilities associated with
the Lessee's operations, to complete the required restoration of said Leased
Land, without additional compensation, in accordance with federal and state
laws, rules and regulations.
20. ASSIGNMENT.
(a) The rights of the Lessor hereunder may be assigned in whole or
in part, and the provisions hereof shall extend to the heirs,
executors, administrators, successors and assigns, but no
change or division in ownership of the Leased Land or
Production Royalty, however accomplished, shall operate to
enlarge the obligation or diminish the rights of the Lessee or
be binding upon the Lessee for any purpose until 60 calendar
days after such person acquiring any interest has furnished
the Lessee with the instrument, instruments or certified
copies thereof, constituting their chain of title from the
original Lessor. In the event of the death of any person
entitled to any payment under the provision of this Lease,
including the Production Royalty, the Lessee may pay or tender
any such payment to the credit of the deceased, or the estate
of the deceased, until such time as the Lessee is furnished
with proper evidence of the appointment and qualification of
an executor or administrator of the estate, or if there be
none, then until the Lessee is furnished with evidence
satisfactory to it as to the heirs and devisees of the
deceased and that all debts, taxes, state inheritance taxes
and federal estate taxes of the estate have been paid.
(b) The Lessee may assign its rights hereunder in whole or in part
as to the Leased Land, or any Leased Substances or subsurface
interval or any depth thereunder, upon obtaining the written
consent of the Lessor. Such consent shall not be unreasonably
withheld. In the event of an assignment of this Lease as to a
segregated portion of said Leased Land or Production Royalty
due hereunder, it shall be proportioned among the several
leasehold owners ratable according to the surface areas of
each in the Leased Land, and default in payment of one shall
not affect the rights of the other leasehold owners hereunder.
The provisions of this Lease shall extend to such assignees,
however, an assignment by the Lessee shall relieve and
discharge the Lessee of any obligation hereunder accruing
after the date of such assignment. If the Lessee or assignee
or part or parts hereof shall fail or make default in payment
of the proportionate part of the Production Royalty payment
due from such Lessee or assignee, or fail to comply with any
other provision of the Lease, such default shall not affect
the entire Lease insofar as it covers a part of said Leased
Land upon which the Lessee or any assignee thereof shall make
payment of said Production Royalty.
21. FORCE MAJEURE. The Lessee shall not be liable for delays or defaults
in its performance of any agreement or covenant hereunder due to force majeure.
The term "FORCE MAJEURE," as employed herein, shall mean: any act of God,
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including but not limited to storms, floods, washouts, landslides and
lightening; acts of the public enemy; wars, blockades, insurrections or riots;
strikes or lockouts; epidemics or quarantine regulations; laws, acts, orders or
requests of federal, state, municipal or other governmental officers or agents
acting under color of authority; freight embargoes or failures; or exhaustion,
unavailability or delays of any product, labor, service or material. If the
Lessee is prevented from conducting or required to cease operations directed
toward establishment or reestablishment of production or producing operations by
any order, decree, direction, inaction or denial of permit by any federal, state
or municipal law, executive order, rule, regulation or request enacted or
promulgated under color of authority on said Leased Land or on land pooled
therewith, or if the Lessee by other types of force majeure is prevented from
conducting operations directed toward establishment or reestablishment of
production or producing operations, then until such time as law, order, rule,
regulations, request or other force majeure is terminated or the permit issued
and for a period of 90 calendar days after such termination of issuance, each
and every provision of this Lease that might operate to terminate it or the
estate conveyed by it shall be suspended and inoperative, and this Lease shall
continue in full force and effect. If any period of suspension occurs during the
Primary Term or any Renewal Term, the time thereof shall be added to such term
with continuing payment of the annual Minimum Advance Royalty or Production
Royalty consistent with the applicable term for such period of suspension, and
this Lease shall remain in full force
and effect in such term until force majeure is lifted or suspended.
22. TERMINATION BY THE LESSEE. The Lessee shall have the right to terminate
this Lease at any time or times during the term hereof, as to the subject
minerals underlying all or any one or more parts of the premises, by delivering
or mailing to the Lessor written notice stating such intention to terminate and
describing the parts of the premises, if less than all, as to which the
termination applies. The termination shall take effect upon the date specified
in the notice, or, if no date is specified upon the date on which the date is
given. Upon such termination, all right, title, interest and obligations of the
Lessee hereunder in and to the premises specified in the notice shall terminate,
except obligations which then have accrued under the express provisions of this
Lease and which the Lessee has not paid or performed. If the notice specifies
that this Lease is hereby being terminated as to the subject minerals underlying
a part, and less than all, of the premises, this Lease shall continue in effect
as to the subject minerals underlying all parts of the premises except the part
or parts so specified. Forthwith after delivery of the notice of termination,
the Lessee shall execute and record, or deliver to the Lessor for recording, a
formal release of this Lease as to the parts of the premises described in the
notice.
Upon termination of this Lease the Lessee shall provide the Lessor with
all data and including, but not limited to, drill logs, reserve information and
other information relating to the existence of uranium resources or other Leased
Substances on the Leased Lands developed by the Lessee during the term of the
Lease to the Lessor within 30 calendar days of the termination.
Termination of the Lease shall not extinguish any of the Lessee's
obligations for remediation or reclamation of the Lessee's activities on or
involving the Leased Lands. The Lessee shall comply with and satisfy all
remediation and reclamation requirements established by Federal or State law,
rules or regulations and shall indemnify and hold the Lessor harmless from any
and all environmental or other claims or actions arising from the Lessee's
activities during the term of the Lease.
23. ENCUMBRANCES. The Lessor hereby warrants, with special warranty
covenants having been provided to the Lessee respecting the status of title to
the Leased Land, the title of said Leased Land and agrees that the Lessee, at
its option, may discharge any tax, mortgage or other lien upon the Leased Land,
and in the event Lessee does so, it shall be subrogated to such liens with the
right to enforce the same and apply any Minimum Advance Royalty or Production
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Royalty payments accruing hereunder toward satisfying the same. Without
impairment of warranties contained in this Lease, it is agreed that if the
Lessor owns an interest in said Leased Land less than the amount claimed by the
Lessor, the Minimum Advance Royalty and the Production Royalty to be paid to the
Lessor shall be proportionately reduced accordingly.
24. TAXES. Any tax based on production of the herein named Leased
Substances shall be borne by the Lessor and the Lessee in the same proportion
that each Party shares in the ownership of such Leased Substances hereunder.
25. NO DEVELOPMENT WARRANTIES. The Lessee makes no implied covenant or
agreement relating to the exploration, development, mining or other operation of
or upon the Leased Land or the marketing or any Leased Substances therefrom, nor
as to the conduct or extent of any of the same. Whether or not any such
exploration, development, mining or other operations or marketing shall at any
time be conducted, and the nature, manner and extent thereof, shall be matters
to be determined within the sole discretion of the Lessee.
26. REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE LESSOR RESPECTING
THE LEASED LAND. The Lessor hereby, jointly and severally, represents to the
Lessee that, to the best of the knowledge, information and belief of the Lessor:
(a) the Lessor is the owner of the AB claims comprising the Leased
Land, subject to the royalty interest described in section 4
hereinabove, and has located and paid maintenance fees, up to
and including the 2005 maintenance year, for the unpatented AB
mining claims comprising the Leased Land which are more
particularly described in Schedule "A" which is attached
hereto;
(b) the Lessor, to the extent allowed by law, is authorized to
hold the right to explore and develop each of the unpatented
AB mining claims comprising the Leased Land;
(c) no other person, firm or corporation has any written or oral
agreement, option, understanding or commitment, or any right
or privilege capable of becoming an agreement, for the
purchase from the Lessor of any interest in and to any of the
mineral property interests comprising the Leased Land;
(d) the mineral property interests comprising the Leased Land were
validly located by Lessor and recorded in a good and minerlike
manner pursuant to applicable mining laws, and the Lessor has
never been notified by the Bureau of land Management that the
unpatented AB mining claims were not in good standing;
(e) there are no outstanding orders or directions relating to
environmental matters requiring any work, repairs,
construction or capital expenditures with respect to any of
the mineral property interests comprising the Leased Land and
the conduct of the operations related thereto, nor has the
Lessor received any notice of same;
(f) with the exception of certain overlaps with claims located by
or for Energy Metals Corporation and the AB Claims, which have
been disclosed to the Lessee, there is no adverse claim or
challenge against or to the ownership of or title to any of
the mineral property interests comprising the Leased Land or
which may impede the development of any of the mineral
property interests comprising the Leased Land; and
(g) the Lessor is not aware of any fact or circumstance which has
not been disclosed to the Lessee which should be disclosed in
order to prevent the representations and warranties contained
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in this section from being misleading or which would likely
affect the decision of the Lessee to enter into this Lease.
27. LESSEE REPRESENTATIONS. The Lessee hereby represents to the Lessor
that, to the best of the knowledge, information and belief of the Lessee:
(a) the Lessee is a corporation duly organized and existing under
the laws of Nevada and is in good standing with the Secretary
of State of the State of Nevada; and
(b) the Lessee has the necessary corporate power and authority to
execute this Lease and consummate the transaction contemplated
by this Lease.
28. CONFIDENTIAL INFORMATION. Th e Lessor hereby acknowledges and agrees
that any and all information which the Lessor may obtain from, or have disclosed
to it, by the Lessee, and about the Leased Land and the Area of Influence,
constitutes valuable trade secrets and proprietary confidential information of
the Lessee (collectively, the "CONFIDENTIAL INFORMATION"). Prior to the
termination of the Lessee, no such Confidential Information shall be published
by the Lessor without the prior written consent of the Lessee; provided,
however, that such consent in respect of the reporting of factual data shall not
be unreasonably withheld and shall not be withheld in respect of information
required to be publicly disclosed pursuant to applicable securities or
corporation laws. Furthermore, the Lessor undertakes not to disclose the
Confidential Information to any third party without the prior written approval
of the Lessee and to ensure that any third party to which the Confidential
Information is disclosed shall execute an agreement and undertaking on the same
terms as contained herein.
29. ARBITRATION. The Parties agree that all questions or matters in dispute
with respect to this Lease shall be submitted to arbitration pursuant to the
terms hereof. It shall be a condition precedent to the right of any Party to
submit any matter to arbitration pursuant to the provisions hereof that any
Party intending to refer any matter to arbitration shall have given not less
than 10 calendar days' prior written notice of its intention to do so to the
other Party together with particulars of the matter in dispute. On the
expiration of such ten days the Party who gave such notice may proceed to refer
the dispute to arbitration as provided hereinbelow. The Party desiring
arbitration shall appoint one arbitrator, and shall notify the other Party of
such appointment, and the other Party shall, within 15 calendar days after
receiving such notice, appoint an arbitrator, and the two arbitrators so named,
before proceeding to act, shall, within 15 calendar days of the appointment of
the last appointed arbitrator, unanimously agree on the appointment of a third
arbitrator to act with them and be chairman of the arbitration herein provided
for. If the other Party shall fail to appoint an arbitrator within 15 calendar
days after receiving notice of the appointment of the first arbitrator, and if
the two arbitrators appointed by the Parties shall be unable to agree on the
appointment of the chairman, the chairman shall be appointed under the
provisions of the Rules of the American Arbitration Association (the
"ARBITRATION RULES"). Except as specifically otherwise provided in this section,
the arbitration herein provided for shall be conducted in accordance with such
Arbitration Rules. The chairman, or in the case where only one arbitrator is
appointed, the single arbitrator, shall fix a time and place in Casper, Wyoming,
for the purpose of hearing the evidence and representations of the Parties, and
he shall preside over the arbitration and determine all questions of procedure
not provided for under such Arbitration Rules or this section. After hearing any
evidence and representations that the Parties may submit, the single arbitrator,
or the arbitrators, as the case may be, shall make an award and reduce the same
to writing, and deliver one copy thereof to each of the Parties. The expense of
the arbitration shall be paid as specified in the award. The Parties agree that
the award of a majority of the arbitrators, or in the case of a single
arbitrator, of such arbitrator, shall be final and binding upon each of them.
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30. NOTICE. Each notice,demand or other communication required or permitted
to be given under this Lease shall be in writing and shall be sent by prepaid
registered mail deposited in a Post Office addressed to the Party or Parties
entitled to receive the same, or delivered to such Party, at the address for
such Party or Parties specified above. The date of receipt of such notice,
demand or other communication shall be the date of delivery thereof if
delivered, or, if given by registered mail as aforesaid, shall be deemed
conclusively to be the third business day after the same shall have been so
mailed, except in the case of interruption of postal services for any reason
whatsoever, in which case the date of receipt shall be the date on which the
notice, demand or other communication is actually received by the addressee.
Either Party may at any time and from time to time notify the other Party in
writing of a change of address and the new address to which notice shall be
given to it thereafter until further change.
31. ENTIRE AGREEMENT. This Lease constitutes the entire agreement to date
between the Parties hereto and supersedes every previous agreement,
communication, expectation, negotiation, representation or understanding,
whether oral or written, express or implied, statutory or otherwise, between the
Parties with respect to the subject matter of this Lease.
32. ENUREMENT. This Lease will enure to the benefit of and will be binding
upon the Parties, their respective heirs, executors, administrators and assigns.
33. TIME OF THE ESSENCE. Time will be of the essence of this Lease.
34. REPRESENTATION AND COSTS. It is hereby acknowledged by each of the
Parties hereto that, as between the Parties herein, Lang ▇▇▇▇▇▇▇▇ LLP acts
solely for the Lessee, and that the Lessor has been advised by each of Lang
▇▇▇▇▇▇▇▇ LLP and the Lessee to obtain independent legal advice with respect to
the Lessor's review and execution of this Lease. In addition, it is hereby
further acknowledged and agreed by the Parties hereto that each Party to this
Lease will bear and pay its own costs, legal and otherwise, in connection with
its respective preparation, review and execution of this Lease and, in
particular, that the costs involved in the preparation of this Lease, and all
documentation necessarily incidental thereto, by Lang ▇▇▇▇▇▇▇▇ LLP shall be at
the cost of the Lessee.
35. APPLICABLE LAW. For all purposes this Lease will be governed
exclusively by and construed and enforced in accordance with the laws of the
State of Wyoming.
36. SEVERABILITY AND CONSTRUCTION. Each section, paragraph, term and
provision of this Lease, and any portion thereof, shall be considered severable,
and if, for any reason, any portion of this Lease is determined to be invalid,
contrary to or in conflict with any applicable present or future law, rule or
regulation in a final unappealable ruling issued by any Court, agency or
tribunal with valid jurisdiction in a proceeding to which either of the Parties
may be a party, that ruling shall not impair the operation of, or have any other
effect upon, such other portions of this Lease as may remain otherwise
intelligible (all of which shall remain binding on the Parties and continue to
be given full force and agreement as of the date upon which the ruling becomes
final).
37. COUNTERPARTS. This Lease may be signed by the Parties hereto in as
many counterparts as may be necessary, and via facsimile if necessary, each of
which so signed being deemed to be an original and such counterparts together
constituting one and the same instrument and, notwithstanding the date of
execution, will be deemed to bear the execution date as set forth on the front
page of this Lease.
38. CONSENTS AND WAIVERS. No consent or waiver expressed or implied by
either Party in respect of any breach or default by the other in the performance
by such other of its obligations hereunder shall:
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(a) be valid unless it is in writing and stated to be a consent or
waiver pursuant to this section;
(b) be relied upon as a consent to or waiver of any other breach
or default of the same or any other obligation;
(c) constitute a general waiver under this Lease; or
(d) eliminate or modify the need for a specific consent or waiver
pursuant to this section in any other or subsequent instance.
39. RECORDING. A memorandum of this Lease shall be executed by the Parties
to this Lease for the purpose of recording the same as required.
IN WITNESS WHEREOF the Parties hereto have hereunto set their
respective hands and seals in the presence of their duly authorized signatories
effective as of the Effective Date first above written.
URANIUM ENERGY CORP.
By
____________________________
Its
____________________________
_______________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇
_______________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
STATE OF )
) ss.
COUNTY OF )
SUBSCRIBED AND SWORN TO before me this __________ day of ____________,
2006 by _____________________ the ___________________ of Uranium Energy Corp.
_______________________________
Notary Public
My commission expires:
_______________________
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ )
) ss.
COUNTY OF SANTA FE )
SUBSCRIBED AND SWORN TO before me this __________ day of ____________,
2006 by ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇.
_______________________________
Notary Public
My commission expires:
_______________________
STATE OF CALIFORNIA )
) ss.
COUNTY OF _____________ )
SUBSCRIBED AND SWORN TO before me this __________ day of ____________,
2006 by ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
_______________________________
Notary Public
My commission expires:
________________________
EXHIBIT A
This is Exhibit "A" to that certain Uranium Mineral Lease as entered
into between the Lessee and the Lessor and respecting the Leased Land.
LEASED LAND
The mining claims comprising the Leased Land may be particularly
described as:
The AB Claim group located in Carbon County, Wyoming, and further
described as follows:
AB Claims Nos. 1-34, BLM WMC Nos. 268812 - 268845, located in Sections 5, 6 and
7, T27N, R77W, 6th P.M., Carbon County, Wyoming, and filed of record in Book
1089, page 21 - 54.
AB Claims No.s 35-41, BLM WMC Nos. 273088 - 273094, located in ▇▇▇▇▇▇▇ ▇, ▇▇▇▇,
▇▇▇▇, and Sections 31 and 32, T28N, R77W, 6th P.M., Carbon County, Wyoming, and
filed of record in Book 1096, page 21 - 27.
as further described in Exhibit "C" hereto
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END OF EXHIBIT A
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EXHIBIT B
This is Exhibit "B" to that certain Uranium Mineral Lease as entered
into between the Lessee and the Lessor and respecting the Leased Land.
MAP OF THE LEASED LAND AND AREA OF INFLUENCE
SEE THE MATERIALS WHICH ARE ATTACHED HERETO.
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END OF EXHIBIT B AND END OF THE LEASE
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