Exhibit 10.1
The Board of Directors
Lifespan Inc
0000 Xxxxxxxxx Xxx,
Xxx Xxxxx, Xx. 00000 September 7th, 2007
Dear Sirs PROPOSED JOINT VENTURE AGREEMENT
We refer to the recent discussions between Lifespan Inc (Lifespan) and USA
Uranium Corp. (USA) regarding the formation of a joint venture to explore,
develop and, if warranted, mine 111 U.S. Federal Lode Mining Claims within the
JV Area (as defined below) for all minerals (Joint Venture).
As set out in Schedule 2 the JV is an area of approximately 2200 square miles
allocated by Lifespan to the Joint Venture (JV Area) as follows the unpatented
lode mining claims, (the "mining claims") situated in San Xxxx County, State of
Utah, which are more particularly described in the copy of the Notice of
Location for each claim which is recorded in the Recorder's Office of San Xxxx
County, State of Utah, as follows and with respect to which the Bureau of Land
Management Utah Mining Claim Number (UMC#) for each claim is as follows:
Name of Claim Book Page UMC#
------------- ---- ---- ----
Stew 1-10 845 251-260 380109-380118
Stew 11-97 859 794-880 386643-386729
Stew 98-100 861 553-555 386730-386732
Laikele 1-8 845 261-268 380099=380106
Laikele 9-10 847 687-688 380107-380108
Laikele 11 848 679 381060
The purpose of this letter is to record the intent and agreement of the parties
in respect of the Joint Venture between them (Agreement).
1. JOINT VENTURE
1.1 USA agrees to pay Lifespan a cash payment of US$3,000,000 or issue 4,000,000
shares (the "Payment") at their discretion upon completion of the phase one
program agreed, in return for the right to acquire a 75% interest in the Joint
Venture. As the Phase one program has been completed, the Payment will be paid
by USA to Lifespan within 21 days of the date of this Agreement and will only be
refundable to USA in the event this Agreement is terminated as a result of the
default of Lifespan. USA will have no interest in any property or in a Joint
Venture until it has completed full Payment.
1.2 Immediately following execution of this Agreement and Payment, the parties
agree to set up a bank account to hold funds on behalf of the Joint Venture (JV
Bank Account). The JV Bank Account will require two signatories, one from each
of USA and Lifespan for all disbursements. The parties will contribute to the JV
Bank Account as determined by the operating committee on a 75% USA and 25%
Lifespan basis (the "Funding Amount")
1.3 Lifespan grants to USA the sole and exclusive right to earn an undivided 75%
Joint Venture interest from Lifespan in return for USA making the payment set
out above. For the avoidance of doubt, USA will immediately earn a 75% interest
in the Joint Venture upon paying the Payment.
1.4 The commencement date of the Joint Venture (Commencement Date) shall be the
date that all of the conditions precedent in clause 1.1 are either satisfied, or
waived, by the parties in accordance with the terms of this Agreement.
1.5 On and from the Commencement Date, the Joint Venture will be deemed to have
been formed.
1.6 The parties agree that the Funding Amount will be expended by the Joint
Venture on exploration activities in accordance with the programs and budgets
established by the operating committee.
1.7 The joint operating committee that will be established under the Joint
Venture may elect to cease further exploration work in relation to the Property
if the initial exploration that is undertaken does not warrant further follow up
work.
1.8 The parties agree that a decision to proceed to development (and
production) on the JV Property during the Funding Period requires their mutual
consent but that consent shall not be unreasonably withheld by either party. In
the event of a dispute, the decision shall be dealt with in accordance with the
dispute resolution clause in the formal agreement referred to in clause 9.
1.9 Upon completion of spending the primary Funding Amount, each party must
contribute to expenditure made or incurred in respect of the Joint Venture in
proportion to their then Joint Venture interest (i.e. 75/25). Although it shall
be open to one partner to make expenditures on behalf of the other partner with
the non paying partner agreeing to reimburse the other.
1.10 Lifespan shall do everything necessary to confirm and effect the transfer
to USA of any beneficial interest in the Property to which USA is entitled
pursuant to this Agreement and to transfer the corresponding legal interest to
USA. Pending any required transfer, Lifespan shall hold that interest in trust
for USA.
1.11 Each party shall be the beneficial owner as tenant in common of an
undivided share of the Joint Venture property in proportion to their Joint
Venture interest.
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1.12 Each party shall be entitled to take in kind and separately dispose of, in
proportion to their Joint Venture interest, all minerals produced by the Joint
Venture.
1.13 Subject to the expenditure obligations of USA under this Agreement, the
liability of the parties in each case is several in proportion to their
respective Joint Venture interests and shall not be either joint or joint and
several.
1.14 The Joint Venture must ensure that sufficient expenditure is incurred in
relation to the JV Property to meet the minimum expenditure commitments, if any,
set out by regulatory authorities having jurisdiction.
2. MANAGER
2.1 USA will be the sole manager of the Joint Venture.
2.2 The manager will (by itself or through its employees, agents or contractors)
have the conduct of all the operations of the Joint Venture on behalf of the
parties, subject at all times to the directions of the management committee
established under clause 3.3, and for this purpose shall have the right of
access to the Joint Venture property. USA will contract with Lifespan to carry
out certain work on the JV Property in compliance with the Plan determined by
the operating committee.
2.3 The manager shall conduct Joint Venture operations in accordance with
programs and budgets and decisions made by a management committee immediately
after the Commencement Date. The management committee shall be established from
the Commencement Date and each of the parties shall appoint one representative
to the management committee. The management committee will meet every week while
exploration or development is being conducted on the JV Property. Decisions of
the management committee shall be made by a simple majority vote with the votes
attributable to a Joint Venture party equal to that party's then Joint Venture
interest. In the event of a deadlock, a dispute resolution process shall be
followed. The dispute resolution process shall be detailed in the formal
agreement to be negotiated as set out in clause 9.
2.4 The manager shall conduct Joint Venture operations in accordance with
accepted mining and exploration methods and practices.
3. DILUTION
3.1 Following completion of the initial Funding Period, if a party fails to duly
make a contribution to expenditure that it is obliged to make then the Joint
Venture interest of that party in the Joint Venture shall dilute proportionally.
Alternatively one party may elect to advance funds on behalf of the other party
with repayment terms to be negotiated.
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3.2 If the Joint Venture interest of any party dilutes to 5% or less, that party
will be deemed to have withdrawn from the Joint Venture and must immediately
assign their remaining Joint Venture interest to the continuing party.
4. INFORMATION AND DATA
4.1 Prior to the Commencement Date, Lifespan will provide USA with all technical
information and data it has regarding the JV Property.
4.2 Each party will provide to the other at management committee meetings all
exploration data generated in relation to the JV Property since the last
meeting.
5. REPRESENTATIONS AND WARRANTIES
5.1 Both parties represent and warrant to the other party that they have the
right, power and authority to enter into this Agreement.
5.2 Lifespan represents and warrants to USA that:
(i) Lifespan has entered into a binding agreement to become the legal and
beneficial holder of the U.S. Federal Lode Mining Claims identified in the JV
Area (Claims) and is entitled to transfer an interest in those Claims to USA in
accordance with the terms of this Agreement;
(ii) the Claims are free from all mortgages, charges, liens and other
encumbrances of whatsoever nature; and
(iii) Lifespan has not entered into any other agreements or dealings in respect
of the Claims other than this Agreement.
6. RELATIONSHIP BETWEEN THE PARTIES
6.1 The relationship of the parties is that of joint venturers and nothing
contained in this Agreement constitutes either of them as agent or partner of
the other, or creates any agency or partnership for any purpose whatsoever.
7. FORMAL AGREEMENT
The parties agree that they will negotiate in good faith and use best endeavors
to execute a detailed joint venture agreement on normal terms (including a
dispute resolution clause, first right of refusal clause, dilution clause, force
majeure rights and clauses that are usually contained in such joint venture
agreements) embodying the terms and conditions contained in this Agreement. In
the meantime, this Agreement is intended to be legally binding on the parties
until it is replaced by the detailed joint venture agreement or otherwise
terminated.
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8. ASSIGNMENT
8.1 Other than the right of either party to assign all or part of its rights
under this Agreement to a related body corporate, if a party wishes to assign
part or all of its rights under the formal agreement to a third party, then it
shall first advise the non-assigning party. The non-assigning party shall have a
right of first refusal over the relevant interest on terms equal to those
proposed by any third party. Any assignment shall be subject to the assignee
entering into a deed where it covenants to be bound by the terms of this
Agreement on terms acceptable to the non-assigning party.
9. TERMINATION
9.1 A party is not entitled to terminate this Agreement for non-performance by
the other party without first giving the party in default a written notice to
the other at the address specified in this Agreement specifying the default.
This notice shall require that the default be remedied within 21 days of the
delivery of the notice to the party in default and the party in default must
then fail to remedy the default within that 21 day period.
10. MISCELLANEOUS
10.1 Each party shall sign, execute and perform all deeds, acts, documents and
things as may reasonably be required by the other party to effectively carry out
and give effect to the terms and intentions of this Agreement.
10.2 Each party shall be liable for their own costs relating to the preparation,
negotiation and execution of this Agreement and any document executed under it.
10.3 No modification or alteration of the terms of this Agreement shall be
binding unless made in writing dated subsequent to the date of this Agreement
and duly executed by the parties.
10.4 If any provision of this Agreement is invalid and not enforceable in
accordance with its terms, all other provisions that are self-sustaining and
separately enforceable without regard to the invalid provision shall be, and
continue to be, valid and forceful in accordance with their terms.
10.5 Time shall be of the essence in this Agreement in all respects.
10.6 This Agreement shall be governed by and construed in accordance with the
law from time to time applicable in Nevada and the parties agree to submit to
the non-exclusive jurisdiction of the courts of Nevada.
10.7 A reference to dollars or currency is a reference to United States dollars,
unless otherwise indicated.
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If Lifespan agrees to the above terms and conditions could you please sign the
execution paragraph set out below and return this Agreement to USA's registered
office.
Yours faithfully
/s/ Xx Xxxxx
--------------------------
Xx Xxxxx CEO
USA Uranium Corp.
By execution of this Agreement, Lifespan acknowledges and agrees to the terms
and conditions set out above dated this 7th day of September 2007
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx, CEO
Lifespan Inc.
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