EXHIBIT A TO ASSET PURCHASE AGREEMENT PRODUCTION PAYMENT ROYALTY AGREEMENT SHOOTARING CANYON MILL
EXHIBIT
A
TO
ASSET
PURCHASE AGREEMENT
SHOOTARING
CANYON MILL
THIS
PRODUCTION PAYMENT ROYALTY AGREEMENT (“Royalty Agreement”)
is made
and entered into effective _________, by and between Uranium
One Utah, Inc.,
a
Delaware corporation (“Uranium
One Utah”),
the
address of which is ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇, ▇▇▇▇▇▇
and
U.S.
Energy Corp.,
a
Wyoming corporation (“USE”),
the
address of which is ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Recitals
A. Uranium
One Utah acquired the Shootaring Canyon uranium mill located on State Highway
276, forty-eight miles south of Hanksville, Utah (“Shootaring
Canyon Mill”)
pursuant to an Asset Purchase Agreement dated effective as of [___] by and
among
sxr Uranium One Inc, Uranium One Utah, Uranium One Ventures U.S.A. Inc. and
Uranium One Exploration U.S.A. Inc., as buyers, and USE, Crested Corp., USECB
Joint Venture (a joint venture between U.S. Energy Corp. and Crested Corp.),
Plateau Resources Limited, Plateau Resources Limited, Inc. and U.S. Uranium
Ltd., as sellers (“Purchase
Agreement”).
B. This
Royalty Agreement is granted and delivered in furtherance of Uranium One
Utah’s
contractual obligations to USE under the Purchase Agreement.
Agreement
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, and intending to be legally bound, Uranium
One
Utah and USE agree as follows:
1.0 Definitions.
Unless
otherwise defined, all capitalized terms shall have the following meanings.
1.1 “ACH”
shall
have the meaning set forth in Section 5.2.
1.2 “Commercial
Production”
shall
occur when the Shootaring Canyon Mill has been operating at 60% or more of
its
design capacity of 750 short tons per day for sixty consecutive
days.
1.3 “Effective
Date”
shall
have the meaning set forth in the introductory paragraph.
1.4 “Gross
Value”
shall
have the meaning set forth in Section 3.0.
1
1.5 “Initial
Processing”
shall
have the meaning set forth in Section 8.0.
1.6 “Market
Value of U308”
shall
have the meaning set forth in Section 3.0.
1.7 “Market
Value of V205”
shall
have the meaning set forth in Section 3.0.
1.8 “Mill
Fee”
shall
have the meaning set forth in Section 4.0.
1.9 “Notices”
shall
have the meaning set forth in Section 13.5.
1.10 “Other
Mineral Products” shall
mean all minerals mined or extracted primarily for values derived from their
content of minerals other than for Products, in the form of ores, mine waters,
leachates, pregnant liquors, pregnant slurries, concentrated slurries,
precipitates, whether in dry or slurry state, concentrates, or products
beneficiated, upgraded or refined further than concentrates, and whether
occurring in intimate depositional relationship with uranium and recovered
as
secondary values during the mining, extraction, processing, or treatment
of
Products.
1.11 “Products” shall
mean (i) uranium concentrates in the form commonly known as “yellowcake” or
“U308
concentrates”
produced and processed either through an ion exchange or conventional processing
and (ii) vanadium concentrates in the form commonly known as “black flake” or
V205
produced
and processed through vanadium extraction circuit, in any form, each produced
and processed through the Shootaring Canyon Mill from metals, minerals, ores,
mine waters, leachates, pregnant liquors and slurries, precipitates and
concentrates in whatever form.
1.12 “Quarterly
Statement”
shall
have the meaning set forth in Section 5.1.
1.13 “Royalty”
shall
mean the Royalty as defined in Section 2.0.
1.14 “Sale”
shall
have the meaning set forth in Section 5.1.
1.15 “Shootaring
Canyon Mill”
shall
have the meaning set forth in the Recitals.
1.16 “Uranium
One Utah”
shall
mean Uranium One Utah Inc.
1.17 “Uranium
One Utah Parties”
shall
mean Uranium One Utah, its direct and indirect parents and the direct and
indirect subsidiaries of such parents.
1.18 “USE”
shall
mean U.S. Energy Corp.
2.0 Grant
of Production Payment Royalty.
2.1 Production
Payment Royalty.
From
and after Commercial Production, Uranium One Utah shall pay to USE a production
payment royalty in the amount of five percent (5%) of (i) the Gross Value
of the
Products produced at and sold from the Shootaring Canyon Mill and (ii) any
Mill
Fee paid and received for Products produced from the Shootaring Canyon Mill,
until such time as the total of all Uranium One Utah payments made pursuant
to
this
2
Royalty
Agreement to USE shall aggregate Twelve Million Five Hundred Thousand Dollars
($12,500,000) (“Royalty”).
The
Royalty shall automatically terminate at such time as Uranium One Utah has
paid
USE the sum of $12,500,000 in Royalty payments. The Royalty shall not apply
to
Other Mineral Products
2.2 No
Milling Obligation.
Uranium
One Utah may, but is not obligated to, beneficiate, mill, sort, concentrate,
refine, smelt, or otherwise process and upgrade any ores, concentrates and
other
mineral products at the Shootaring Canyon Mill. Uranium One Utah shall have
the
sole and exclusive right to determine the timing and the manner of any
production from or tolling and mill services provided by the Shootaring Canyon
Mill.
2.3 No
Burden on Ores; No Royalty in Kind.
The
Royalty is a grant to a share of the proceeds of production from the Shootaring
Canyon Mill. The Royalty is not intended, and nothing in this Royalty Agreement
shall be interpreted, to grant to USE any legal or beneficial ownership rights
to or a burden upon any ores, concentrates or products located or produced
at
the Shootaring Canyon Mill. USE shall have no right to take, or elect to
take,
the Royalty or value of the Royalty in kind by physical delivery of ores,
concentrates or Products.
3.0 Gross
Value.
3.1 Sale
of Products.
In the
event Uranium One Utah sells Products, “Gross
Value”
shall
mean the actual proceeds of sale of such Products received by Uranium One
Utah
3.2 Disposal
to Affiliate.
In the
event Uranium One Utah sells Products to a corporate affiliate, partner,
or
joint venturer; such Products shall be deemed to be disposed of without sale
and
Gross Value as hereinafter defined in this Section 3.2
shall
apply to such disposal without sale.
(a) In
the
event of disposal without sale of any Products, “Gross
Value”
shall
mean the Market Value of U308
or the
Market Value of V205
(as
hereinafter defined in this Section 3.2(a))
multiplied by the amount stated in pounds of uranium oxide (U308
) or
vanadium (V205)
contained in the particular Products so disposed of without sale. For purposes
of this Royalty Agreement, (A) “Market
Value of U308”
shall
mean the average “UxU308
Price”
as
quoted in U.S dollars in the Ux
Weekly
for the
calendar month immediately preceding the month of such disposal without sale
and
(B) “Market
Value of V205”
shall
mean the average “V205
Price”
as
quoted in U.S dollars in the Ryan’s
Notes
for the
calendar month immediately preceding the month of such disposal without sale.
In
the event that such prices or quotations, or their substantial equivalent,
are
not published therein or such publication ceases or is suspended, then
“Market
Value of U308”
and
the
“Market
Value of V205”
shall
mean the price or quotation for yellowcake or vanadium for immediate delivery
as
reported in such other publication or source as is generally recognized in
the
mining industry as reflecting the price or quotation at which yellowcake
is
being offered for sale and purchase.
(b) In
the
absence of any such publication referenced in Section 3.2(a)
above,
“Market
Value of U308”
or
the
“Market
Value of V205”
shall
be the mean of the domestic prices or quotations at which yellowcake or
vanadium, as the case may be, is or was being offered for sale and purchase
for
immediate and forward delivery from the uranium mill,
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vanadium
mill or processing facility nearest the Shootaring Canyon Mill or, in the
event
such prices or quotations are unavailable from said uranium mill or processing
facility, the “Market
Value of U308”
and
the
“Market
Value of V205”
shall
be determined by such other means as may establish such prices or quotations
at
the mean of the domestic prices or quotations at which yellowcake or vanadium
is
being offered for sale and purchase for immediate and forward
delivery.
3.3 Hedging
Profits and Losses Not Included in Gross Value.
Notwithstanding
any other provision of this Royalty Agreement, Uranium One Utah and USE intend
and agree that for purposes of determination of the Royalty due hereunder,
Gross
Value shall mean the proceeds received by Uranium One Utah from the sale
and
delivery of Product, including delivery made pursuant to a forward sales
contract; but shall not include any profits, losses or transaction costs
for any
futures trading or commodity options trading or any other price hedging,
price
protection, derivative or speculative arrangements which may involve the
possible delivery of Products produced from the Shootaring Canyon
Mill.
4.0 Mill
Fee.
In the
event Uranium One Utah processes and produces any Product at the Shootaring
Canyon Mill pursuant to a custom milling contract, tolling agreement or form
of
service contract whereby a fee is paid for mill services, “Mill
Fee”
shall
mean the actual cash mill fee or toll charge received by Uranium One Utah
for
the custom milling or tolling arrangement. Mill Fee shall exclude any sales,
excise, personal property or value-added tax, or any other tax imposed, levied
or assess by law on the milling or tolling services that are recoupable by
or
payable to a governmental entity.
5.0 Manner
of Payment.
5.1 Royalty
Payments.
Royalties shall accrue at the time of sale of Products from the Shootaring
Canyon Mill or receipt by Uranium One Utah of a Mill Fee, and in the amount
as
provided in Section 3.0
above.
For purposes of this Section 5.1,
“sale”
means
the date on which Uranium One Utah receives payment for the sale of Products.
Royalty payments shall become due and payable quarterly on the fifteenth
day of
the month following the last day of the calendar quarter in which the same
accrue. Royalty payments shall be by Uranium One Utah's check, ACH or wire
transfer, and shall be accompanied by a settlement sheet showing the quantities
and grades of Products produced at the Shootaring Canyon Mill for sale or
processing, proceeds of sale, costs, and other pertinent information in
sufficient detail to explain the calculation of the Royalty payment
(“Quarterly
Statement”).
5.2 Depository
Bank.
Upon
written request of Uranium One Utah, USE shall designate a bank to act as
USE's
agent to receive from Uranium One Utah all payments payable under the terms
hereof, and all such payments may be made by paying or tendering the same
to
USE, or to the bank for USE's credit, which bank shall continue as the
depository for all Royalty payments hereunder regardless of changes of ownership
of the Shootaring Canyon Mill, or rights to receive payments hereunder, subject
only to the subsequent provisions in this Section 5.2.
All
charges of such depository bank shall be for USE's account. A single payment
or
tender to said depository bank shall be made by (i) mailing or by delivering
a
check, (ii) electronic exchange of funds between accounts held at U.S. financial
institutions through the Automated Clearing House network (“ACH”),
or
(iii) wire transfer, and such a payment shall effectively and for all purposes
4
whatsoever
constitute full payment of the amount thereof to USE to the same extent as
if
made directly. In the event USE fails to name said bank upon the request
of
Uranium One Utah, or in the event such bank (or any successor bank) should
fail,
liquidate or be succeeded by another bank, or for any reason fail or refuse
to
accept royalties, or should USE desire to designate another depository bank,
then Uranium One Utah shall not be held in default for failure to make payment
or tender of payments until thirty (30) days after said persons shall deliver
to
Uranium One Utah a proper, recordable instrument naming a bank as agent to
receive such payments or tenders.
5.3 Objections
to Payments.
All
Royalty payments shall be considered final and in full satisfaction of all
obligations of Uranium One Utah with respect thereto unless USE gives Uranium
One Utah written notice describing and setting forth a specific objection
to the
calculation thereof within ninety (90) days after receipt by USE of the
Quarterly Statement herein provided for. If USE objects to a particular
Quarterly Statement as herein provided, USE shall, for a period of thirty
(30)
days after USE's receipt of notice of such objection, have the right to have
Uranium One Utah's accounts and records relating to calculation of the Quarterly
Statement in question audited by a certified public accountant acceptable
to USE
and to Uranium One Utah and subject to mutually acceptable confidentiality
protection. Uranium One Utah shall account for any deficits or excess in
the
payment made to USE pursuant to the Quarterly Statement in question which
may be
confirmed by such an audit by adjusting the next Quarterly Statement following
completion of such audit to account for such deficits or excess. If the
variation between the amount of a particular Royalty payment made to USE
hereunder as calculated by the audit provided for herein exceeds five percent
(5%), Uranium One Utah shall pay all costs of such audit. If such variation
is
five percent (5%) or less, USE shall pay all costs of such audit. For the
purpose of determining the amount of royalties payable hereunder, all figures,
accounts, and records used in connection with the calculation of royalties
shall
be determined in accordance with generally accepted accounting principles
and
from accounts maintained by Uranium One Utah in connection with its operations
at the Shootaring Canyon Mill. Failure on the part of USE to make claim on
Uranium One Utah for adjustment in such 90-day period shall establish the
correctness of the particular Quarterly Statement and preclude the filing
of
exceptions to such Quarterly Statement or making of claims for adjustment
to
such Quarterly Statement, and in the absence of fraud, USE expressly waives
any
claim or cause of action with respect to such Quarterly Statement.
6.0 Commingling
of Ores.
Uranium
One Utah shall have the right of mixing or commingling, either underground,
at
the surface, or at the Shootaring Canyon Mill, any ores, mine waters, leachates,
pregnant liquors, pregnant slurries, or other products or compounds containing
minerals mined or extracted from any sources or mining properties with any
similar substances derived from other sources, lands or properties; provided
that Uranium One Utah shall weigh and sample such ores, products or compounds
in
accordance with sound mining and metallurgical practice for moisture and
metal
content before the same are so mixed or commingled. In computing the Royalty,
ownership of the Product shall be allocated between Uranium One Party ore
and
other ore on the basis of the metal content and weight of the concentrate
from
each ore.
7.0 Sampling,
Assay, and Analysis.
Any
determination of weight, volume, moisture content, amenability, or pay metal
content, and any sampling and analysis shall be made in
5
accordance
with sound mining and metallurgical practices and standard sampling and analysis
procedures prevailing in the uranium mining and milling industry. USE shall
have
the right to have a representative present at the time samples are taken.
USE
shall be furnished at USE's request with a portion of all samples taken for
analysis of ore, leachates, pregnant liquors, or pregnant slurries or other
compounds or products owned by Uranium One Parties processed at the Shootaring
Canyon Mill. Split samples shall by retained by Uranium One Utah for later
analysis by an independent referee selected by mutual agreement of the parties
and, in the event of a dispute concerning Uranium One Utah's assay of samples,
Royalty payments shall be based on the assay results determined by the
independent referee. All statements or reports wherein Uranium One Utah's
assay
of samples are set forth shall be conclusively presumed to be true and correct,
unless, within sixty (60) days
after such statements or reports are delivered to USE, USE makes written
objection thereto and demands an assay by the independent referee; and unless
such objection and demand is made within such sixty-day period, Uranium One
Utah
shall have no duty to preserve the split samples after the end of such sixty-day
period. The cost of the independent referee shall be paid by the party whose
assay shows the greatest variance from that of the independent
referee.
8.0 Waste
Rock, Spoil and Tailings.
Except
for the Royalty payable on products provided here, USE
shall
have no rights, title or interest in all residue or tailings remaining after
Initial Processing (defined below) and minerals from the Shootaring Canyon
Mill,
or any subsequent processing of ores, such or other products or compounds
of
minerals. “Initial
Processing”
shall
mean all processing of ores, mine waters, leachates, pregnant liquors, pregnant
slurries, or other products or compounds of mineral prior to the time any
residue thereof shall be first deposited in a tailings containment facility.
Uranium One Utah shall not be liable for mineral values lost in mining or
processing pursuant to sound mining and metallurgical engineering practices.
The
Royalty shall be payable only on Products. All waste rock, spoil, tailings,
or
other mine wastes and residue shall be the sole property of the Uranium One
Utah. Uranium One Utah shall have the sole right to dump, deposit, sell,
dispose
of, or reprocess such waste rock, spoil, tailings, or other mine wastes and
residues.
9.0 Lesser
Interest; Third Party Claims.
9.1 Lesser
Interest.
The
Royalty
is based upon ownership by Uranium One Utah Parties of the full, 100% undivided
beneficial interest in the ores, mine waters, leachates, pregnant liquors,
pregnant slurries, or other products or compounds of minerals for processing
at
the Shootaring Canyon Mill or in the Products. In the event the Uranium One
Utah
Parties own less than the full, 100% undivided beneficial interest in such
ores,
mine waters, leachates, pregnant liquors, pregnant slurries, or other products
or compounds of minerals for processing at the Shootaring Canyon Mill or
in the
Products, the Royalty hereunder shall be applied to only that beneficial
interest of the Uranium One Utah Parties. (As an example, and for illustrative
purposes only, ore processed at the Shootaring Canyon Mill which is produced
from properties owned by a joint venture between Uranium One Utah and a third
party subject to a joint venture agreement that allocates 50% equitable
ownership to each of the venture parties, shall be deemed to be beneficially
owned 50% by Uranium One Utah and the Royalty applicable to all Products
produced from the joint venture ore shall be applied only to the 50%
beneficially-owned by the Uranium One Utah Parties, which equals a Royalty
of 5%
on 50% of the Value of the Products).
6
9.2 Third
Party Claims.
If any
person or entity not a party asserts a claim of ownership in Products or
a claim
to a share in any mine ores, minerals, waters, leachates, pregnant liquors,
pregnant slurries, or other products or compounds of minerals, or a claim
for
money on account of production of minerals, Uranium One Utah at its sole
discretion after written notice to USE, may suspend its obligation to pay
the
Royalty, and in lieu thereof may deposit in an interest-bearing account payments
equivalent to the Royalty which may otherwise become due USE. Such deposit
or
deposits shall remain in such interest-bearing account until the claim or
controversy is resolved or settled by final court decision, by arbitration,
negotiation, or otherwise.
10.0 Pooling
or Unitization.
Uranium
One Utah shall have the right to pool and combine acreage from any mining
properties with other property at any time and from time to time as a recurring
right, either before or after production, for exploratory, developmental
or
operating purposes for the purpose of conducting in situ solution mining
.
Uranium One Utah, or a designated operator for Uranium One Utah, shall have
the
sole discretion to determine the location, size and shape of any drilling
pattern. It shall be conclusively presumed that the minerals which are produced
from any such pooled acreage are homogeneous and are produced uniformly within
the boundaries of such drilling pattern, both as to quantity and
quality.
11.0 Access
to Shootaring Canyon Mill.
Subject
to the confidentiality provisions of this Royalty Agreement and all health
and
safety requirement imposed by Uranium One Utah, which shall be enforced at
Uranium One Utah’s sole discretion, USE and its representatives shall, at their
sole risk and expense, upon reasonable advance notice to and prior approval
from
Uranium One Utah have access to operations conducted by or on behalf of Uranium
One Utah at the Shootaring Canyon Mill for the purposes of viewing or inspecting
the same, provided that USE and its representatives shall indemnify Uranium
One
Utah for any claims, losses or damages that arise out of or result from USE’s
presence or activities at the Shootaring Canyon Mill.
12.0 Confidentiality.
All
information developed or acquired by USE under or pursuant to this Royalty
Agreement relating to without limitation mineral discoveries, ore reserves,
mining methods, plans and production schedules, terms of agreements, ownership
interests and all other information relating to the ownership and operation
of
the Shootaring Canyon Mill, as a result of USE’s exercise of its rights
hereunder, including its right to visit the Shootaring Canyon Mill or audit
Uranium One Utah records relating to preparation of Quarterly Statements,
shall
be treated and kept as confidential and shall not be released or made public
without Uranium One Utah’s express prior written consent, which consent may be
withheld at Uranium One Utah’s sole discretion, provided, however, that nothing
herein shall be construed to interfere with any responsibility of USE to
make
reasonable disclosures required under applicable securities or other laws.
USE
acknowledges and agrees that in the event of a breach of this covenant of
confidentiality the remedy at law may be inadequate and, without limiting
any
other remedy available at law or equity, Uranium One Utah shall may enforce
this
covenant through injunction, specific performance or other form of equitable
relief or money damages or any combination thereof. Uranium One Utah shall
be
entitled to recover the cost of enforcing this provision, including, without
limitation, reasonable attorneys’ fees and court costs.
13.0 General.
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13.1 Applicable
Law.
This
Royalty Agreement shall be governed by and interpreted in accordance with
the
laws of the State of Colorado without regard to the conflict of laws provisions
thereof.
13.2 Waiver.
The
failure of either Uranium One Utah or USE to insist on the strict performance
of
any provision of this Royalty Agreement or to exercise any right, power or
remedy upon a breach hereof shall not constitute a waiver of any provision
of
this Royalty Agreement or limit Uranium One Utah’s or USE’s right thereafter to
enforce any provision or exercise any right hereunder. A waiver of any provision
of this Royalty Agreement shall not be effective unless in writing and signed
by
the party against whom it is to be enforced.
13.3 Amendment.
No
modification or amendment of this Royalty Agreement shall be valid unless
made
in writing and duly executed by Uranium One Utah and USE.
13.4 Severability.
If any
term or other provision of this Royalty Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Royalty Agreement shall nevertheless remain
in
full force and effect so long as the economic and legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Royalty Agreement so as to effect
the
original intent of the parties as closely as possible in an acceptable manner
to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
13.5 Notices.
All
notices and other required communications (“Notices”)
to the
parties to this Royalty Agreement shall be in writing, and shall be addressed
respectively as follows:
If
to
Uranium One Utah:
Uranium
One Utah Inc.
Suite
1610 - ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
With
a
copy to:
sxr
Uranium One Inc.
Block
A,
Empire Park
▇▇
▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile:
011 27 11 482-3604
8
With
an
informational copy to:
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
If
to US
Energy:
U.S.
Energy Corp.
▇▇▇
▇.
▇▇▇
▇.
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
With
an
informational copy to:
U.S.
Energy Corp.
▇▇▇
▇.
▇▇▇
▇.
▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Facsimile
No. 307) 857-3234
With
a
copy to:
▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile
No. (▇▇▇) ▇▇▇-▇▇▇▇
All
Notices shall be given (a) by personal delivery to the another party, (b)
by
electronic communication, with a confirmation sent by registered or certified
mail, return receipt requested, or (c) by registered or certified mail, return
receipt requested. Notices shall be effective and shall be deemed delivered
on
receipt if delivered during normal business hours, and, if not delivered
during
normal business hours, on the next business day following delivery. A party
may
change its address by Notice to the other parties.
13.6 Entire
Agreement.
This
Royalty Agreement contains the entire understanding of Uranium One Utah and
USE
and supersedes all prior agreements and understandings between Uranium One
Utah
and USE relating to the subject matter hereof.
13.7 Assignment
and Binding Effect.
(a) The
Royalty shall be assignable by USE. No change or division in the ownership
of
the Royalty or payment of proceeds attributable to the Royalty shall enlarge
the
obligations or diminish the rights of Uranium One Utah. USE covenants that
any
change in
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ownership
shall be accomplished in such a manner that Uranium One Utah shall be required
to make payments and to give notices to a single party or entity representing,
and with the agency to act for, the owner or owners of the Royalty. Upon
breach
of this covenant, Uranium One Utah may retain all payments of Royalty otherwise
due to USE, its successors and assigns, until the breach has been cured.
No
change or division in ownership shall be binding on Uranium One Utah until
thirty (30) days after USE has given Uranium One Utah a certified copy of
the
recorded instrument evidencing the change or division together with an
enforceable agreement among the royalty owners appointing a single party
as
agent with the authority to act for all owners.
(b) Uranium
One Utah may assign all of its obligations and duties under this Royalty
Agreement (i) upon transfer of fifty percent (50%) or greater of Uranium
One
Utah’s interest in the Shootaring Canyon Mill, or (ii) with the prior written
consent of USE, which consent shall not be unreasonably withheld, and in
each
case upon a written assumption by the assignee of Uranium One Utah’s obligations
and duties hereunder.
(c) This
Royalty Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of Uranium One Utah and USE.
13.8 Further
Assurances.
Each
party hereto shall take such actions and sign such documents reasonably
requested by any other party hereto to enable such requesting party to enjoy
the
intended rights and benefits hereof.
13.9 Third
Parties.
Nothing
herein expressed or implied is intended or shall be construed to confer upon
or
give to any person or entity other than the parties and their successors
or
assigns, any rights or remedies under or by reason of this Royalty
Agreement
13.10 Counterparts.
This
Royalty Agreement may be executed in two or more counterparts, each of which
shall be considered one and the same agreement and shall become effective
when
counterparts have been signed by each of the parties and delivered to the
other
parties, it being understood that all parties need not sign the same
counterpart.
[REMAINDER
OF PAGE INTENTIONALLY BLANK]
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IN
WITNESS WHEREOF, the parties hereto have executed this Royalty Agreement
as of
the Effective Date.
URANIUM
ONE UTAH INC.
By:______________________________________________
Title:_____________________________________________
U.S.
ENERGY CORP.
By:______________________________________________
Title:_____________________________________________
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