EXHIBIT 10.13
JOINT VENTURE AGREEMENT DATED APRIL 30, 2002
ATHABASCA
and FIREBAG PROSPECTS
THIS AGREEMENT is made effective the 30th day of April, 2002.
AMONG:
|
Anhydride Oil Corporation, a corporation incorporated under the laws of
Alberta with an office located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇
OT5
(“AOC”) |
AND:
|
Anhydride Petroleum (Canada) Inc., a corporation under the laws of
Alberta with an office at ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
(“API”) |
AND:
|
C. ▇▇▇▇▇▇ ▇▇▇▇, an individual residing at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇.▇.,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ OT5
(“▇▇▇▇”) |
AND:
|
Industrial Coal and Minerals Ltd., a corporation incorporated under the
laws of Alberta with an office located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇.▇., ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ OT5
(“Industrial”) |
AND:
| |
October
Sun, a Nevada Corporation, a corporation incorporated under the laws of the
State of Nevada and having an office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
(“OS”) |
AND:
|
Uranium Power Corporation, a corporation incorporated under the laws of
the State of Colorado and having an office located at ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(“URMP”) |
WHEREAS:
| A. |
All parties to this Agreement acknowledge that this Agreement replaces all prior
agreements including but not limited to a Letter Agreement between AOC and OS
dated April 10, 2001, and Addendums dated May 8, 2001, July 10, 2001, July 26,
2001 and September 12, 2001 among one or more of the parties in respect of all
or a portion of the Lands and Licenses; |
| B. |
The parties hereto combine efforts and resources in their joint objective to
explore for petroleum substances on each of the Athabasca and Firebag
Prospects; |
| C. |
API is entitled to earn an interest in P&NG License no. 5494040101 (the
“AOC License”) and the AOC Granite 7-32-89-10 W4M well, (the
“Initial Well”), which are properties of AOC; |
| D. |
AOC is entitled to earn an interest in P & NG License numbers 5401070160,
5401070162, 5401070163, 5401090094 and 5401100080, which are properties of API
(the “API Licenses”); |
| E. |
API and AOC intend to sign and deliver to the other, a CAPL Agreement covering
all interests contained within the Area of Mutual Interest including the Initial
Well, and P & NG license numbers 5494040101, 5401070160, 5401070162,
5401070163, 5401090094 and 5401100080 (the “Licenses”). |
| F. |
API and AOC are desirous of determining the producibility of the Initial Well; |
| G. |
API and AOC are desirous of determining the producibility of a target formation
at a depth of 2,150 meters at or adjacent to the Initial Well; |
| ▇. |
▇▇▇▇ is the principal shareholder and interest holder in AOC and Industrial; |
| I. |
URMP is the indirect parent corporation of API and intends to grant a stock
option by way of warrants to AOC to acquire shares of URMP; and |
THEREFORE AOC, API,
▇▇▇▇, Industrial, OS and URMP, for consideration the sufficiency of which is
hereby acknowledged enter this agreement on the following terms and conditions;
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ARTICLE I
INTERPRETATION
1.1 Definitions.
In this Agreement, including the recitals to this Agreement:
| “Abandon”
or “Abandoning” |
means the proper plugging and abandoning of a Well
and the restoration of the well site to the satisfaction of any government body
having jurisdiction with respect thereto. |
“AMI”
or “Area of
Mutual Interest” |
means all lands within townships 86-102, ranges 5-13 W4M. |
| “AOC
▇▇▇▇” |
means a 5% gross overriding royalty on production of any and all
Petroleum Substances upon the Lands and the Licenses, to the beneficial holders
identified in Schedule “E”. |
| “AOC
License” |
Means Petroleum and Natural Gas License No. 5494040101. |
| “AOC
Working Interest Holders” |
means the beneficial holders identified in
Schedule “F” of the 27.5% after payout working interest held by AOC in
the Initial Well, the 18.25% interest in the AOC License and the 18.25% interest
assigned to AOC by API in the API Licenses and section 3.9 of this agreement,
all of which are subject to a 9.5% gross overriding royalty on production of any
and all Petroleum Substances. |
| “API
▇▇▇▇” |
means a 4.5% gross overriding royalty on production of any and
all Petroleum Substances upon the Lands and the Licenses, to the beneficial
holders identified in Schedule “G”. |
| “API
Licenses” |
means Petroleum and Natural Gas License Nos. 5401070160, 5401070162, 5401070163,
5401090094 and 5401100080. |
| “API
Working Interest Holders” |
means the beneficial holders of the 100%
working interest before payout and 72.75% after payout in the Initial Well, the
100% before payout working interest and 81.25% after payout working interest in
additional ▇▇▇▇▇ drilled on the AOC License and the 81.25% interest retained by
API in the API licenses, all of which are subject to the 9.5% gross overriding
royalty on production of any and all Petroleum Substances. |
| “Athabasca
Prospect” |
means Petroleum and Natural Gas License Nos. 5494040101, 5401070160, 5401070162
and, 5401070163. |
3
| “CAPL
Agreement” |
means the 1990 operating procedure established by the
Canadian Association of Petroleum Landmen as set out in Schedule “C”. |
| “Capping
” |
means the capping of a Well. |
| “Capping
Costs” |
means all expenses incurred in or incidental to the Capping of
any Well. |
| “Complete
” or any derivative of the
word Complete including “Completion” |
means: |
(i) |
the installation of all casing left in the hole except surface and intermediate
casing, all tubing and wellhead equipment and all other equipment and material
necessary for the permanent preparation of any Well for the taking of Petroleum
Substances up to and including the outlet valve on the wellhead and the pump if
initially required to establish production; |
|
|
(ii) |
if necessary, the perforating, stimulating, treating, fracing and swabbing of
any Well, running adequate back pressure tests in the case of a gas well and the
conduct of production tests as are required by this agreement and the
installation of equipment as may be necessary to conduct the tests; |
|
|
(iii) |
if any Well indicates that Petroleum Substances are present in Paying Quantities
in any formation, then the Well shall be subject to one or both of the following
production tests as appropriate:
|
|
|
|
A. |
if any Well indicates production of Petroleum Substances composed predominately
of gas, an absolute open flow test of sufficient duration to establish the
initial producibility of the Well; or |
|
|
|
B. |
if any Well indicates production of Petroleum Substances not composed
predominantly of gas, a sustained production test of thirty (30) consecutive
days to establish the initial producibility of the Well; and, |
4
|
|
(iv) |
the supply of sufficient tankage and other equipment initially required for the
taking of production. |
| “Completion
Costs” |
means all expenses incurred in or incidental to the Completion
of any Well. |
“Crown”
or
“Government Royalty” |
means the share of production payable to
the representative of the Government of the Province of Alberta from the
production of Petroleum Substances. |
| “Drilling
Costs” |
means (exclusive of Completion Costs and Equipping Costs: |
|
|
(i) |
the costs incurred in or incidental to the Drilling and Capping of the Well
including the costs of acquiring surface rights, constructing access roadways,
coring if applicable, testing, obtaining all Well logs, acquiring and installing
all surface and intermediate casing and obtaining material and services in
respect thereof; and, |
|
|
(ii) |
includes the cost of Abandoning any Well. |
“Equip”
or any
derivative of the
word
Equip including
“Equipping” |
means the installation of equipment required to produce Petroleum Substances
from any Well including, without restricting the generality of the foregoing, a
pump or other artificial lift equipment if not initially required to take
production, the installation of flow lines and production tankage serving any
Well and, if necessary, a heater, dehydrator or other wellsite facilities for
the initial treatment of Petroleum Substances produced from any Well to prepare
the production for transport to market but specifically excludes (i) Completion
Costs and costs incurred beyond the point of entry into a gathering system,
plant or other common facility, that shall be constructed and operated pursuant
to a separate agreement and (ii) any such equipment, installation or facility
that is (or is intended to be a production facility. |
| “Equipping
Costs” |
means all expenses incurred in or incidental to the Equipping of
any Well. |
| “Firebag
Prospect” |
means Petroleum and Natural Gas License Nos. 5401090094 and 5401100080. |
5
| “▇▇▇▇”
|
means a gross overriding royalty on production of any and all Petroleum
Substances in the amount of 9.5%, comprised of 5% to AOC and its holders
disclosed on Schedule “E” and 4.5% to the API holders disclosed on
Schedule “G”, applicable to all the lands and Licenses, including the
Initial Well. |
| “Initial
Well” |
means the AOC Granite 7-32-89-10 W4M well drilled during 1994 to
a depth of 1,650 meters or if deepened to a depth of 2,150 meters to test the
original target seismic feature located on Petroleum and Natural Gas License No.
5494040101. |
| “Lands” |
means each parcel or tract of land within the AMI including the Licenses. |
| “Licenses” |
means the AOC License and the API Licenses. |
| “Operating
Costs” |
means all expenses incurred in or incidental to the operating of
any Well, exclusive of Drilling Costs, Completion Costs and Equipping Costs. |
“Operating
Procedure”
and “Accounting
Procedure” |
means 1990 CAPL Operating Procedure and the 1988 PASC Accounting Procedure
utilizing the elections as set out in Schedules “C” and
“D”. |
| “Parties”
|
means AOC, API ▇▇▇▇, , Industrial, OS and URMP, and “Party” means any
one of them. |
| “PASC
Agreement” |
means in accordance with the 1988 operating procedure established by the
Petroleum Accountants Society as set out in Schedule “D” |
| “Paying
Quantities” |
means: |
(i) |
in the case of any Well which has not been Completed and Equipped, the
anticipated output from the Well of that quantity of Petroleum Substances that
would warrant incurring the Completion Costs and Equipping costs respecting the
Well, having regard to the anticipated Completion Costs, Equipping Costs, and
Operating Costs, the kind and quality of production, the availability of
markets, the price to be received, the royalties applicable to the production
pursuant to the relevant title documents and the other economic burdens
applicable to the production; and, |
6
|
|
(ii) |
in the case of any Well that has been completed and Equipped, the output from
the Well of that quantity of Petroleum Substances that would warrant the
continued taking of production from the Well, having regard to the same factors
as in subclause (i) of this definition, except Completion Costs and Equipping
costs. |
| “Payout
” |
means the point in time when: |
|
|
(i) |
the gross proceeds from the sale of Petroleum Substances from any Well and from
the sale of Petroleum Substances allocated to a Well pursuant to a pooling or
scheme of unitization; plus |
|
|
(ii) |
the gross proceeds received from the sale of any permanent equipment installed
up to the point of sale of Petroleum Substances produced from any Well; plus |
|
|
(iii) |
any payment received in respect of an adjustment of investment resulting from
unitization of the Lands; |
|
|
(iv) |
the Drilling Costs, Capping Costs, Completion Costs, Equipping Costs and
Operating Costs applicable to any Well; plus |
|
|
(v) |
the payments made with respect to the ▇▇▇▇ and Crown Royalty on the production
of Petroleum Substances from a Well; plus |
|
|
(vi) |
the payments made for acquisition of Licenses in the AMI, including the API
Licenses; plus |
|
|
(vii) |
any payments made in respect of adjustment of investment resulting from
unitization of the Lands on which a Well is located; plus |
|
|
(viii) |
any taxes imposed by the regulations with respect to the production or sale of
Petroleum Substances from a Well other than income taxes; |
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|
|
|
all of which are determined in accordance with the Operating Procedure. |
| “Petroleum
Substances” |
means condensate, crude oil, natural gas liquids, raw gas,
sulphur and every other mineral or substance, and interest in the right to
explore for, that is granted or acquired pursuant to the Licenses. |
| “Testing
Phase” |
has the meaning set out in section 3.1. |
| “Well” |
means the well or ▇▇▇▇▇ drilled pursuant to or subject to the provisions of this
Agreement. |
| 1.2 |
Included Words. This Agreement shall be read with such changes in
gender or number as the context shall require. |
| 1.3 |
Headings. The headings to the articles, sections, subsections,
paragraphs, parts or clauses of this Agreement are inserted for convenience only
and shall not affect the construction hereof. |
| 1.4 |
References. Unless otherwise stated, a reference herein to a
numbered or lettered article, section, subsection, paragraph, clause or schedule
refers to the article, section, subsection, paragraph, clause or schedule
bearing that number or letter in this Agreement. A reference to “this”
article, section, subsection, paragraph, clause or schedule means the article,
section, subsection, paragraph, clause or schedule in which the reference
appears. A reference to “this Agreement”, “hereof”,
“hereunder”, “herein” or words of similar meaning, means
this agreement including the schedules hereto, together with any amendments
thereof. |
| 1.5 |
Schedules. The following schedules are incorporated into this
Agreement by reference: |
|
Schedule
“A” |
Geologic Program For Servicing |
|
Schedule
“B” |
Completion Cost Estimate |
|
Schedule
“C” |
CAPL Elections |
|
Schedule
“D” |
PASC Elections |
|
Schedule
“E” |
AOC’s Royalty Interest Holders |
|
Schedule
“F” |
AOC’s Working Interest Holders |
8
|
Schedule
“G” |
API’s Royalty Interest Holders |
|
Schedule
“H” |
API’s Working Interest Holders |
|
Schedule
“I” |
Form of ▇▇▇▇▇▇ Certificate |
|
Schedule
“J” |
API - AOC License Assignments |
|
Schedule
“K” |
AOC - API License Assignment |
|
Schedule
“L” |
URMP - AOC Warrant Certificate |
ARTICLE II
OPERATIONS
AND ROYALTIES
| 2.1 |
Joint Operations - The Lands and the Licenses as they relate
thereto shall become subject to the Operating Procedure (Schedules “C”
and “D”), which shall govern all future operations of the Parties with
respect to the exploration, development and maintenance of the Lands and
Licenses. In the event there is a conflict between the CAPL Agreement (Schedule
“C”) and this Agreement, the Parties agree this Agreement shall
prevail. |
| 2.2 |
Operator - AOC shall be the “Operator” under the Operating
Procedure during and until the completion of the Testing Phase, provided that in
the event of the death of ▇▇▇▇ prior to completion of the Testing Phase as set
out in section 3.1 of this agreement, API will immediately become and remain the
Operator. On the completion of the Testing Phase, API shall immediately become
the “Operator” under the Operating Procedure in respect of all
operations on the Lands and the Licenses as they relate thereto. |
| 2.3 |
Joint Operations Bank Account - Prior to commencement of operations
in connection with the Testing Phase, API and AOC shall jointly establish a
joint-controlled bank account at Canadian Western Bank, located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the “Joint Account”). |
| |
Each
of ▇▇▇▇, AOC and Industrial acknowledge they have no interest whatsoever in any
of the monies deposited into the Joint Account and that the Joint Account is
established for the purpose of redirecting funds from the Anhydride Petroleum
Limited Partnership to approved expenditures in connection with the Testing
Phase and as contained in Schedule “B” hereto. |
| |
The
joint AOC-API account will require a signatory from each of AOC and API for all
amounts drawn on the account. Each of AOC and API will appoint a primary and
alternative signatory for the Joint Account. |
9
| |
For
AOC the primary representative shall be ▇▇▇▇ and the secondary representative
shall be ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (“▇▇▇▇▇▇”), the Superintendent of
Operations appointed by AOC during the Testing Phase. |
| |
For
API the primary representative shall be ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (“▇▇▇▇▇▇▇▇”),
President of URMP and API and the secondary representative shall be F. ▇▇▇▇▇▇
▇▇▇. |
| |
The
chequebook for the Joint Account shall be retained by ▇▇▇▇▇▇▇▇ and maintained at
the office of API. |
| |
Immediately
upon opening of the Joint Account, prior to any money being deposited into the
Joint Account, ▇▇▇▇ shall pre-sign one cheque to be retained by ▇▇▇▇▇▇▇▇ on
behalf of API. It is agreed and understood the cheque shall be dated the date
$250,000 is deposited into the Joint Account and that on September 6, 2002,
▇▇▇▇▇▇▇▇ shall determine the amount of funds remaining in the Joint Account and
shall record that amount on the cheque pre-signed by ▇▇▇▇ which cheque shall be
deposited into the account of API thus effectively closing the Joint Account. |
| 2.4 |
Recordable Assignments, CAPL Agreement - On signing this
agreement: |
|
(a) |
API shall deliver to AOC’s lawyer, ▇▇▇ ▇. Buglas (“Buglas”),
Suite 610, 2424 – ▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, recordable
assignments (the “API Assignments”) in favor of AOC for an 18.75%
ownership interest in the API Licenses in the form attached as Schedule
“J”; and |
|
(b) |
AOC shall deliver to: |
| |
|
(i) |
Buglas, a recordable assignment (the “AOC Assignment”) in favor of API
for 81.25% in the AOC License in the form attached as Schedule “K” to
be held by Buglas for delivery to API in accordance with section 3.4 of this
Agreement; and |
| |
|
(ii) |
API a signed original CAPL Agreement in the form attached as schedule
“C” which shall govern the Parties’ Operating Procedures as
provided in section 2.1. |
| |
Upon
API’s receipt of Buglas’ written confirmation that Buglas has in his
custody the original signed AOC Assignment (in the form attached as Schedule
“K”), subject to this agreement, Buglas is authorized to deliver to
AOC the API Assignments (in the form attached as Schedule “J”). |
| 2.5 |
Area of Mutual Interest - The Parties hereby establish the
Area of Mutual Interest. In the event additional lands, licenses, leases, and/or
oil and gas rights that fall within the AMI are acquired by any Party, such
Party shall offer to the other Parties the opportunity to participate in such
interests or rights in accordance with the terms of this agreement or the CAPL
Agreement in proportion to their respective ownership interests. |
10
| 2.6 |
AOC ▇▇▇▇ – AOC and API hereby grant and do hereby acknowledge
and recognize the AOC ▇▇▇▇ and holders in Schedule “E”. The Parties
acknowledge that the AOC ▇▇▇▇ extends to any and all additional lands or
licenses acquired within the AMI. |
| 2.7 |
AOC Working Interest Holders – AOC and API do hereby
acknowledge and recognize the AOC Working Interest Holders disclosed on Schedule
“F”. |
| 2.8 |
API ▇▇▇▇ - AOC and API hereby grant and do hereby
acknowledge and recognize the API ▇▇▇▇ and holders in Schedule “G”.
The Parties acknowledge that the API ▇▇▇▇ extends to any and all additional
lands or licenses acquired within the AMI. |
| 2.9 |
API Working Interest Holders – AOC and API do and
hereby acknowledge and recognize the API Working Interest Holders disclosed on
Schedule “H”. |
| 2.10 |
Government Royalty – The Parties hereby acknowledge and
recognize a government or crown royalty by the Government of the Province of
Alberta shall be in effect against the Initial Well, Licenses and AMI. |
ARTICLE III
TESTING PHASE
| 3.1 |
Testing Phase - The testing phase (the “Testing Phase”) is
comprised of the steps and procedures set out in Schedule “A”
described as the Geological Program For Servicing of the AOC Granite 7-32-89-10
W4M Well. The Testing Phase has been prepared by AOC and ▇▇▇▇. During the
Testing Phase, AOC, as “Operator” shall engage the services of Burnish
Enterprises Ltd. (“Burnish”) to carry out Operations. Burnish has
agreed to provide the services of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P. Eng. to act as
superintendent of Operations. If ▇▇▇▇▇▇ is unable to perform the services on
behalf of Burnish, the replacement for ▇▇▇▇▇▇ shall be approved by AOC and API
in writing. |
| 3.2 |
Conclusion of Testing Phase . The Testing Phase shall conclude
on the earlier to occur of (a) the performance of such of the steps and
procedures described in Schedule “A”; or (b) the Completion of the
Initial Well. |
| 3.3 |
▇▇▇▇▇▇ Certificate – Without regard or consequence to the
result, at such time as the Testing Phase is concluded or the Initial Well
completed, ▇▇▇▇▇▇, or his replacement, shall deliver to API and AOC a
certificate (the “▇▇▇▇▇▇ Certificate”), in the Form attached as
Schedule “I”, declaring the conclusion of the Testing Phase. |
| 3.4 |
Interest Earned in AOC License – On the issuance of the
▇▇▇▇▇▇ Certificate in accordance with section 3.3, API shall have earned in the
Initial Well its entitled 100% working interest before payout and 72.75% working
interest after payout and 81.25% interest in the AOC License, subject to the
terms of this Agreement. Forthwith upon receipt by Buglas of a copy of the
▇▇▇▇▇▇ Certificate from AOC or API, Buglas shall, and AOC shall cause Buglas to,
immediately deliver to API the AOC Assignment. |
11
| 3.5 |
Funding of Testing Phase – API, on its own behalf and on
behalf of its working interest partners, undertakes to fund all costs connected
with the Testing Phase and, at its election, complete, deepen or abandon such
well. |
| 3.6 |
Commencement of Operations – API will cause to be deposited
Cdn $250,000 into the Joint Account, sufficient to cover expenditures connected
with the Testing Phase as contained in Schedule “B”. Immediately
thereafter, AOC shall commence Operations to give effect to the Testing Phase.
In the event API does not fund the Joint Account prior to 5:00 p.m. September
15, 2002, AOC is at liberty to make other arrangements to finance the Initial
Well and should API not fund the Testing Phase, API shall not have earned any
interest in the AOC License or the Initial Well. |
| 3.7 |
Insurance – Prior to commencement of operations at the well
site of the Initial Well, AOC shall obtain Comprehensive General Liability
Insurance including Operators’ Extra Expense Insurance coverage protecting
the following entities: |
|
(a) |
Anhydride Oil Corporation, |
|
(b) |
Anhydride Petroleum (Canada) Inc.; and, |
|
(c) |
Burnish Enterprises Ltd. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. |
| |
At
the conclusion of the Testing Phase, should it decide to do so, API is hereby
authorized to cancel insurance coverage for each of AOC and Burnish. |
| 3.8 |
API To Recover Costs - In accordance with but notwithstanding
provisions of the CAPL Agreement, API is entitled to recover costs incurred,
including for the Testing Phase, drilling, completion and equipping and other
operations out of 100% of net working interest in production from the Initial
Well and the AOC License until Payout. |
| 3.9 |
Additional Drilling - Following conclusion of the Testing
Phase and completion, deepening or abandonment of the Initial Well, API shall,
at no expense to AOC and at locations on the Lands or Licenses as determined by
API, conduct such additional drilling as to comprise at least two further ▇▇▇▇▇
or 5,500 meters of drilling, whichever is greater and API shall be operator for
all subsequent drilling operations. AOC’s working interest in the Initial
Well is 27.25% after payout, but on future ▇▇▇▇▇, whether on License 5494040101
or other ▇▇▇▇▇ in the AMI, is at 18.75%, subject to a 9.5%▇▇▇▇ plus government
royalty. |
| |
Following
the additional drilling, AOC shall pay its share of costs for all operations
under this Agreement in accordance with provisions of the CAPL Agreement. |
12
| 3.10 |
Payment of Rentals – API is responsible for payment of
all rentals on the Licenses on behalf of itself (excluding third party interest
holders) and AOC until concluding the drilling of the additional drilling
provided for in section 3.8. At such time as API has fulfilled its additional
drilling obligation in section 3.8 AOC shall pay its share of costs for all
rentals under this Agreement as provided for in accordance with the CAPL
Agreement. |
ARTICLE IV
COVENANTS
AND ACKNOWLEDGEMENTS
| 4.1 |
Payment to AOC – Upon the first well completed on the Lands
or Licenses under this Agreement to continuously produce commercial quantities
of Petroleum Substances for a period of not less than 30 consecutive days, API
shall pay to AOC $100,000 (Cdn.). AOC acknowledges said payment would be a
one-time payment. |
| 4.2 |
Cancellation of October Sun Warrant – OS hereby acknowledged
that URMP Warrant Certificate No. 3 pursuant to which OS had the right to
acquire 500,000 URMP shares at US $.01 after the successful testing of the
Initial Well is hereby cancelled. |
| 4.3 |
Grant of URMP Warrant - URMP hereby grants to AOC a warrant (the
“Warrant”) to purchase 600,000 restricted shares of URMP at a price of
US $0.01 per share in the form attached as Schedule “L”. The Warrant
shall be exercisable for a period of one year commencing on the date any well
completed on the Lands under this Agreement continuously produces commercial
quantities of Petroleum Substances for a period of not less than 30 consecutive
days but in any event shall expire effective August 30, 2004. AOC acknowledges
that in the event no well completed on the Lands under this Agreement
continuously produces commercial quantities of Petroleum Substances for a period
of not less than 30 consecutive days, the Warrant will not be exercisable nor
have effect. |
| 4.4 |
Right of Refusal - The Parties agree that before making any
sale or transfer of any part of their interests to any third party not
identified in this agreement, they will offer the interest on the same terms to
the other party and leave their offer open for sixty days as outlined in the
CAPL Agreement. |
| 4.5 |
▇▇▇▇ Consulting - AOC shall provide the geological
consultation of ▇▇▇▇ for the benefit of AOC and API in carrying out operations
under this Agreement, always endeavoring to provide services to the satisfaction
of API. On signing this Agreement, API shall pay the current arrears of its
previous retainer with AOC, which stands at $12,305.00 at July 31, 2002, and
thereafter shall pay to AOC $5,000 each month in arrears starting August 1, 2002
for its services. Either AOC or API may terminate this consulting arrangement on
thirty days notice. |
| 4.6 |
Data – The parties recognize that AOC, ▇▇▇▇ and/or Industrial
have accumulated and compiled a considerable amount of documentation and other
data in connection with the AMI, the Licenses, the Athabasca Prospect and the
Initial Well including but without limitation, land maps, aerial photographs,
seismic related materials, geologic mapping, logs, analysis and interpretative
records, testing and other reporting or information including daily reports (the
“data”). Up to and during the Testing Phase AOC, ▇▇▇▇ and Industrial
agree to unconditionally make available to API or its representative all data
for inspection and copying. |
13
| |
Any
and all data created or otherwise obtained in connection with these matters
after August 1, 2001 is owned exclusively by API. Data prior to August 1, 2001
is and shall continue to be owned by AOC. |
| |
AOC
does hereby agree to keep all data strictly confidential and shall not sell nor
disclose any of the data to any third party (nor permit copying) without first
obtaining written consent of API which may reasonably be withheld. It is noted
that URMP is a public company and is required under existing laws and
legislation to make certain disclosures which, are hereby authorized and
acknowledged by the parties. |
| 4.7 |
Legal Interests – AOC does hereby warrant that AOC holds
legal, valid, enforceable and clear (unencumbered) title to the AOC License and
undertakes to hold API, OS and URMP harmless from any and all claims prior to
this agreement that might affect rights under this Agreement. |
| 4.8 |
Claims Against AOC, ▇▇▇▇ and/or Industrial - Should a claim arise
against AOC, ▇▇▇▇ and/or Industrial affecting any matter contained within this
agreement, in the event AOC, ▇▇▇▇ and/or Industrial fail to resolve said claim
within 90 days of commencement of said claim, each of AOC, ▇▇▇▇ and Industrial
hereby unconditionally authorize API, OS and/or URMP to settle and fully resolve
said claim on behalf of AOC, ▇▇▇▇ and/or Industrial; and, should a claim against
AOC, ▇▇▇▇ and/or Industrial be successful then API is hereby unconditionally
authorized to reduce AOC’s interest in an amount sufficient to resolve the
successful claim and should AOC’s interest not be sufficient to satisfy the
claim then AOC and Industrial shall jointly and severally be liable to API, OS
and/or URMP for any unresolved or unpaid damages, including but not limited to
legal and administrative expenses, including those of API. |
| 4.9 |
Hold Harmless – AOC does hereby unconditionally
guarantee and agree to remain liable for any and all obligations and
undertakings of AOC hereunder and to hold API, OS and URMP harmless against any
and all claims arising prior to the date of this agreement, including as set out
in section 4.7. |
ARTICLE V
NOTICE
| 5.1 |
Notice - Any notice or other writing required or permitted to be
given hereunder or for the purposes hereof shall be sufficiently given if
delivered or telecopied to the party to whom it is given at: |
14
(a)
if to AOC:
| |
Anhydride Oil Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ OT5
Attention: C. ▇▇▇▇▇▇ ▇▇▇▇, President
Telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇ |
(b)
if to API:
| |
Anhydride Petroleum (Canada) Inc.
▇▇▇▇▇ ▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
Telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇ |
(c)
if to ▇▇▇▇:
| |
C. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ OT5
Attention: C. ▇▇▇▇▇▇ ▇▇▇▇
Telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇ |
(d)
if to Industrial:
| |
Industrial Coal and Minerals Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ OT5
Attention: C. ▇▇▇▇▇▇ ▇▇▇▇
Telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇ |
(e)
if to OS:
| |
October Sun, a Nevada Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier no. (▇▇▇) ▇▇▇-▇▇▇▇ |
15
(f)
if to URMP:
| |
Uranium Power Corporation
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
Telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇ |
Any notice given as
aforesaid shall be deemed to have been given or made on, if delivered, the date
on which it was delivered or, if telecopied, on the next business day after it
was telecopied. Any Party may change its address for notice from time to time by
notice given to the other Parties in accordance with the foregoing.
ARTICLE VI
GENERAL
PROVISIONS
| 6.1 |
Entire Agreement. This Agreement constitutes the entire agreement
between the Parties and replaces and supersedes all prior agreements, memoranda,
correspondence, communications, negotiations and representations, whether oral
or written, express or implied, statutory or otherwise between the Parties with
respect to the subject matter herein. This Agreement may not be amended or
modified except by an instrument in writing signed by each of the Parties. |
| 6.2 |
Waiver. No consent or waiver, express or implied, by any Party to
or of any breach or default by any other Party of any or all of its obligations
under this Agreement will: |
|
(a) |
be valid unless it is in writing and stated to be a consent or waiver
hereunder; |
|
(b) |
be relied upon as a consent or waiver to or of any other breach or default of
the same or any other obligation; |
|
(c) |
constitute a general waiver under this Agreement; or |
|
(d) |
eliminate or modify the need for a specific consent or waiver in any other or
subsequent instance. |
| 6.3 |
Further Assurances. The Parties will execute such further and
other documents and do such further and other things as may be necessary or
convenient to carry out and give effect to the intent of this
Agreement. |
| 6.4 |
Time of the Essence. Time shall be of the essence in the
performance of this Agreement. |
| 6.5 |
Enurement. This Agreement shall enure to the benefit of and be
binding upon the Parties and their respective successors and
assigns. |
16
| 6.6 |
Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Province of Alberta and the laws of Canada
applicable therein. |
| 6.7 |
Arbitration – In the event of any dispute affecting
matters in any way connected with or affected by this agreement by and/or on
behalf of any of the Parties, the Parties agree such dispute shall be resolved
by arbitration conducted in the City of Calgary, Province of Alberta. The cost
of such arbitration shall be shared equally by AOC and Industrial as to one-half
and the remainder one-half by API. An arbitration proceeding shall determine,
with finality, any dispute. In the event AOC fails or is unable to pay its share
of any costs under this clause, API is hereby authorized by AOC to deduct
AOC’s share of costs from production. |
| 6.8 |
Fax and Counterpart. This Agreement may be executed by fax and in
counterparts. |
IN WITNESS WHEREOF
the parties hereto have executed this Agreement as of the day and year first
above written.
Anhydride Oil Corporation |
Anhydride Petroleum (Canada) Inc. |
C. ▇▇▇▇▇▇ ▇▇▇▇ |
Witness to C. ▇▇▇▇▇▇ ▇▇▇▇ |
Industrial Coal & Minerals Ltd. |
October Sun, a Nevada Corporation |
17
SCHEDULE
“A”
GEOLOGICAL PROGRAM FOR SERVICING OF THEAOC GRANITE 7-32-89-lO W4M WELL
| 1. |
Rig up for swabbing oil into a tank. |
| 2. |
Drill out plug at base of casing and clean hole to bottom using 2-1/2" tubing.
Collect oil sample from below plug, if possible. |
| 3. |
Run in with 2-1/2” tubing and dual packers of size appropriate for sett1ng
in 8-3 4” (222mm) open bole, tubing empty. |
| 4. |
Straddle the interval 1407 - 1437m, test and, if appropriate, swab |
| 5. |
Straddle the interval 870 - 900m, test and, if appropriate, swab |
| 6. |
Set single packer at 1635m and tailpipe to bottom, test and, if appropriable,
swab |
| 7. |
Straddle the interval 774 - 804m, test and, if appropriate, swab |
| 8. |
Straddle the interval 1455 - 1485m, test and, if appropriate, swab |
| 9. |
If apparently flowing production is found at any stage, put well on extended
production test, if possible, leaving packers set as is. |
| 10. |
If apparently commercial production requiring a pump is found at any stage,
continue with remaining swab tests and plan to install pump for extended
production test after swab testing is done. |
18
SCHEDULE
“B”
COMPLETION COST ESTIMATE FOR THE INITIAL WELL
Well:
AOC Granite 7-32-89-10 W4M
Intangible Completion Costs |
Date: July 25,
2002
Tangible Equipment |
| 501
Production Casing & Liner |
|
601
Wellhead |
5,000 |
| 502
Production Casing Attachments |
|
▇▇▇
▇▇▇▇ ▇▇▇▇▇ & Accessories |
0 |
| 503
Production Casing Cementing |
|
603
Tubing & Accessories |
37,000 |
| 504
Power Tongs & Casing Tools |
|
604
Sucker Rods & Accessories |
0 |
| 505
Drilling - Daywork |
|
605
Valves, Fittings & Misc. Equip. |
0 |
| 509
Service Rig |
70,000 |
606
Retrievable Downhole Equip. |
0 |
| 512
Wireline |
|
607
Bottom-hole Pump |
0 |
| 513
Perforating & Logging |
|
608
Contingency |
2,100 |
| 514
Formation Stimulation |
|
609
Overhead |
1,260 |
| 518
Cement Squeeze & Plugs |
|
|
|
| 520
Snubbing |
|
Tangible Completion - TOTAL |
$ 45,360 |
| 521
Coiled Tubing/Nitrogen Services |
|
Intangible Completion |
$201,782 |
| 522
Special Services - Fishing, etc. |
|
Completion - GRAND TOTAL |
$247,142 |
| 523
Permanent Downhole Equipment |
|
|
|
| 526
Production Testing |
21,500 |
|
|
| 528
Completion Fluids |
1,000 |
|
|
| 531
Disposal Costs - Waste & Fluids |
5,000 |
|
|
| 534
Hauling & Transportation |
15,000 |
|
|
| 540
Other Material & Supplies |
1,000 |
|
|
| 544
Anchors (Purchase & Rentals) |
|
|
|
| 548
Lease & Road Construction |
1,000 |
|
|
| 549
Lease Clean-up & Restoration |
2,500 |
|
|
| 550
Environmental Services |
500 |
|
|
| 551
Engineering/Project Mgmt. |
5,000 |
|
|
| 552
Engineering/Reservoir |
|
|
|
| 553
Completion Supervision |
14,000 |
|
|
| 555
Restoration Supervision |
|
|
|
| 559
Safety Equipment & Services |
|
|
|
|
Intangible Completion - TOTAL |
$201,782 |
|
|
NOTE:
based on 12 days service rig time. Extra days will increase intangible costs
proportionally.
19
SCHEDULE
“C”
1990 CAPL
AGREEMENT
OPTIONAL CHOICES IN 1990 CAPL
|
903 |
Casing point Election |
A |
|
1007 |
Development ▇▇▇▇▇ |
300% |
|
1007 |
Exploratory ▇▇▇▇▇ |
600% |
|
1010 |
Title Preservation |
180 Days |
|
2202 |
Addresses for Notices |
As contained in the Joint Venture Agreement dated effective April 30, 2002
between Anhydride Oil Corporation and Anhydride Petroleum (Canada) Inc. et
al. |
|
2401 |
Disposition of Interest |
B |
|
2404 |
Recognition upon Assignment |
B |
20
SCHEDULE “D”
1988 PASC
ACCOUNTING SCHEDULE
OPTIONAL CHOICES IN 1988 PASC
|
105 (a) Operating advances |
25% |
|
110 Approvals |
2 or more parties totalling 80% |
|
217 (a) (1) |
Warehouse handling, 2.5% for tubular goods 2” and over and other
items with new prices over $5,000.00; 5% of cost on all other material |
|
302 (a) for each exploration project |
(1) 6% of first $50,000
(2) 4% of next $100,000
(3) 2% of costs exceeding (1) + (2) |
|
302 (b) for each drilling well |
(1) 5% of first $50,000
(2) 3% of next $100,000
(3) 2% of costs exceeding (1) + (2) |
|
302 (c) for each construction project |
(1) 5% of first $50,000
(2) 3% of next $100,000
(3) 2% of costs exceeding (1) + (2) |
|
302 (d) for each operations and maintenance |
(1) 10% of the costs
(2) $300 per producing well per month
(3) Flat rate of $500 per month |
|
302 (d) (2) & (3) |
Will not |
|
Pricing of Joint Material Purchases, Transfers, and Dispositions |
$15,000 where requiring approval |
|
501 Periodic Inventory |
Taken by operator on 2-year intervals |
21
SCHEDULE
“E”
AOC ROYALTY
INTEREST HOLDERS
AOC
22
SCHEDULE
“F”
AOC Working
Interest Holders
AOC
Burnish Enterprises Ltd.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Ltd.
595433 Saskatchewan Ltd.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
23
SCHEDULE
“G”
API ROYALTY
INTEREST HOLDERS
Oct. Sun funding group
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
Singer Associates Holdings Ltd.
858642 Alberta Ltd.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
F. ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
24
SCHEDULE
“H”
API WORKING
INTEREST HOLDERS
Anhydride Petroleum
Limited Partnership
Oct. Sun funding group
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
Singer Associates Holdings Ltd.
858642 Alberta Ltd.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
F. ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
25
SCHEDULE
“I”
FORM OF
BHODAN CERTIFICATE
To:
Anhydride Petroleum (Canada) Inc.
And to:
Anhydride Oil Corporation
We refer to the joint
venture agreement (the “Agreement”) among Anhydride Petroleum (Canada)
Inc., Anhydride Oil Corporation, C. ▇▇▇▇▇▇ ▇▇▇▇, Industrial Coal and Minerals
Ltd., Uranium Power Corporation and October Sun, a Nevada Corporation dated
effective the 30th day of April, 2002.
Capitalized terms used but
not defined in this certificate shall have the meaning ascribed to them in the
Agreement.
The under signed hereby
certifies that the Testing Phase has concluded as a result of:
|
|
all of the steps and procedures described in Schedule “A” to the
Agreement have been performed; |
|
|
the Initial Well has been Completed. |
Dated the _______
day of ______________________________, 2002.
_________________________________
26
SCHEDULE
“J”
License
Assignment AOC – API
27
SCHEDULE
“K”
5 License
Assignments API – AOC
28
SCHEDULE
“L”
THE WARRANTS AND UNDERLYING
SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), AND ARE “RESTRICTED
SECURITIES” AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE
SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
Warrant
Certificate No. 5
WARRANT TO
PURCHASE 600,000 SHARES
VOID AFTER 5:00 P.M., MOUNTAIN TIME, ON THE TERMINATION DATE
URANIUM
POWER CORPORATION
WARRANT AGREEMENT AND CERTIFICATE
April 30, 2002
This
certifies that, for value received, Anhydride Oil Corporation, a
corporation incorporated in the Province of Alberta with an address at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇. ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, the registered holder
hereof (the “Warrantholder”) is entitled to purchase from Uranium
Power Corporation, a Colorado corporation (the “Company”) with its
principal office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇-▇▇▇, ▇▇▇▇▇▇, at
any time before on or before the Termination Date (as defined below), but only
after successful completion of any well on the Lands specified in the Joint
Venture Agreement dated April 30, 2002 among Anhydride Oil Corporation,
Anhydride Petroleum (Canada) Inc., C. Wa▇▇▇▇ ▇▇▇▇, Industrial Coal and Minerals
Ltd., October Sun, a Nevada Corporation and the Company, at the purchase price
of $0.01 per share (the “Exercise Price”), the number of shares of the
Company’s Common Stock (the “Shares”) set forth above. A
successful completion requires that a well continuously produce commercial
quantities of Petroleum Substances for a period of not less than 30 consecutive
days. The number of Shares purchasable upon exercise of this Warrant and the
Exercise Price per Share shall be subject to adjustment from time to time as set
forth in Section 3 below. The Termination Date is 5:00 P.M., Mountain Time, on
August 30, 2004. A person or entity holding the Shares issued upon exercise of
this Warrant may be referred to herein as a “Holder of Warrant
Shares.”
Section 1.
Transfer or Exchange of Warrant.
1.1 The Company shall be
entitled to treat the registered owner of any Warrant as the owner in fact
thereof for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in such Warrant on the part of any other person, and
shall not be liable for any registration of transfer of Warrants which are
registered or to be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration of transfer, or
with such knowledge of such facts that its participation therein amounts to
gross negligence or bad faith.
1.2 This Warrant may not be
sold, transferred, assigned or hypothecated except pursuant to all applicable
federal and state securities laws.
29
1.3 A Warrant shall be
transferable only on the books of the Company upon delivery of this Warrant
Certificate duly endorsed by the Warrantholder or by its duly authorized
attorney or representative, or accompanied by proper evidence of succession,
assignment or authority to transfer. Upon any registration of transfer, the
Company shall deliver a new Warrant Certificate to the persons or entities
entitled thereto.
Section 2.
Term of Warrants; Exercise of Warrants.
2.1 Subject to the terms of
this Agreement and Certificate, the Warrantholder shall have the right, which
may be exercised commencing upon issuance and ending at 5:00 p.m. Mountain Time
on the Termination Date, to purchase from the Company the number of Shares which
the Warrantholder may at that time be entitled to purchase on exercise of this
Warrant.
2.2 A Warrant shall be
exercised by surrender to the Company, at its principal office, of this
Certificate evidencing the Warrant to be exercised, together with the form of
election to purchase attached hereto duly filled in and signed, and payment to
the Company of the Exercise Price for the number of Shares in respect of which
such Warrant is then exercised. Payment of the aggregate Exercise Price shall be
made in cash or certified funds.
2.3 Subject to Section 3
hereof, upon surrender of a Warrant Certificate and payment of the Exercise
Price as aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch, to or upon the written order of the Warrantholder
exercising such Warrant and in such name or names as such Warrantholder may
designate, certificates for the number of Shares so purchased upon the exercise
of such Warrant. Such certificate or certificates shall be deemed to have been
issued and any person so designated to be named therein shall be deemed to have
become a holder of record of such Shares as of the date of receipt by the
Company of such Warrant Certificate and payment of the Exercise Price. The
rights of purchase represented by the Warrants shall be exercisable, at the
election of the Warrantholders thereof, either in full or from time to time in
part and, in the event that a Warrant Certificate is exercised to purchase less
than all of the Shares purchasable on such exercise at any time prior to the
Termination Date, a new Warrant Certificate evidencing the remaining Warrant or
Warrants will be issued.
2.4 The Warrantholder will
pay all documentary stamp taxes, if any, attributable to the initial issuance of
the Shares upon the exercise of Warrants.
Section 3.
Adjustment of Exercise Price and Shares.
3.1 If there is any change
in the number of shares of outstanding Common Stock through the declaration of
stock dividends, or through a recapitalization resulting in stock splits or
combinations or exchanges of such shares, the number of shares of Common Stock
underlying the Warrants, and the exercise price per share of the outstanding
Warrants, shall be proportionately adjusted by the Board to reflect any increase
or decrease in the number of issued shares of Common Stock; provided, however,
that any fractional shares resulting from such adjustment shall be eliminated.
30
3.2 In the event of the
proposed dissolution or liquidation of the Company, or any corporate separation
or division, including, but not limited to, split-up, split-off or spin-off, or
a merger or consolidation of the Company with another corporation, the Board may
provide that each Warrantholder shall have the right to exercise such Warrant
(at its then current Exercise Price) solely for the kind and amount of shares of
stock and other securities, property, cash or any combination thereof receivable
upon such dissolution, liquidation, corporate separation or division, or merger
or consolidation by a holder of the number of shares of Common Stock for which
such Warrant might have been exercised immediately prior to such dissolution,
liquidation, corporate separation or division, or merger or consolidation; or,
in the alternative the Board may provide that the Warrants shall terminate as of
a date fixed by the Board; provided, however, that not less than 30 days’
written notice of the date so fixed shall be given to each Warrantholder, who
shall have the right, during the period of 30 days preceding such termination,
to exercise the Warrant as to all or any part of the shares of Common Stock
covered thereby.
3.3 The preceding paragraph
shall not apply to a merger or consolidation in which the Company is the
surviving corporation and shares of Common Stock are not converted into or
exchanged for stock, securities of any other corporation, cash or any other
thing of value. Notwithstanding the preceding sentence, in case of any
consolidation or merger of another corporation into the Company in which the
Company is the surviving corporation and in which there is a reclassification or
change (including a change to the right to receive cash or other property) of
the shares of Common Stock (excluding a change in par value, or from no par
value to par value, or any change as a result of a subdivision or combination,
but including any change in such shares into two or more classes or series of
shares), the Board may provide that the holder of this Warrant shall have the
right to exercise such Warrant solely for the kind and amount of shares of stock
and other securities (including those of any new direct or indirect Parent of
the Company), property, cash or any combination thereof receivable upon such
reclassification, change, consolidation or merger by the holder of the number of
shares of Common Stock for which such Warrant might have been exercised.
3.4 In the event of a
change in the Common Stock of the Company as presently constituted into the same
number of shares with a par value, the shares resulting from any such change
shall be deemed to be the Common Stock of the Company within the meaning of this
agreement.
3.5 To the extent that the
foregoing adjustments relate to stock or securities of the Company, such
adjustments shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive.
3.6 Except as expressly
provided herein, the Warrantholder shall have no rights by reason of any
subdivision or consolidation of shares of stock of any class, or the payment of
any stock dividend or any other increase or decrease in the number of shares of
stock of any class, or by reason of any dissolution, liquidation, merger, or
consolidation or spin-off of assets or stock of another corporation; and any
issue by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common
Stock subject to this Warrant. The grant of this Warrant shall not affect in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structures, or to merge or
consolidate, or to dissolve, liquidate, or sell or transfer all or any part of
its business or assets.
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Section 4.
Mutilated or Missing Warrant Certificates. In case any
Warrant Certificate shall be mutilated, lost, stolen or destroyed, the Company
shall, at the request of the holder of such Certificate, issue and deliver, in
exchange and substitution for and upon cancellation of the mutilated
Certificate, or in lieu of and substitution for the Certificate, lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent right or interest; but only upon receipt of evidence satisfactory to
the Company of such loss, theft or destruction of such Warrant Certificate and
indemnity, if requested, also satisfactory to the Company. An applicant for such
a substitute Warrant Certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
Section 5.
Reservation of Shares of Common Stock. There has been reserved,
and the Company shall at all times keep reserved so long as any of the Warrants
remain outstanding, out of its authorized Common Stock a number of shares of
Common Stock sufficient to provide for the exercise of the rights of purchase
represented by the outstanding Warrants and the underlying securities.
Section 6. No
Fractional Shares. The Company shall not be required to issue
fractional shares or scrip representing fractional shares upon the exercise of
the Warrants. As to any final fraction of a Share which the Warrantholder would
otherwise be entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to the same
fraction of the market price of a share of Common Stock on the business day
preceding the day of exercise.
Section 7.
Transfer and Exercise to Comply With the Securities Act of 1933.
The Warrants may not be exercised except in a transaction exempt from
registration under the Act.
Section 8.
Notices. Any notice pursuant to this Agreement by the
Company or by the Warrantholders shall be in writing and shall be deemed to have
been duly given if delivered or mailed certified mail, return receipt requested
to the Company or the Warrantholder at the addresses set forth above. Each party
hereto may from time to time change the address to which notices to it are to be
delivered or mailed hereunder by notice in accordance herewith to the other
party.
Section 9.
Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrantholders shall bind and inure to
the benefit of their respective successors and assigns.
Section 10.
Applicable Law. This Warrant Agreement and Certificate and any
replacement Certificate issued hereunder shall be governed by the laws of the
State of Colorado.
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PURCHASE
FORM
Dated
_______________, ____
The
undersigned hereby irrevocably elects to exercise the Warrant represented by
this Warrant Certificate to the extent of purchasing __________ Shares of
URANIUM POWER CORPORATION and hereby makes payment of $0.01 per Share in payment
of the exercise price thereof.
INSTRUCTIONS
FOR REGISTRATION OF STOCK
Name:
____________________________________________________________________________________
(please type or
print in block letters)
Address:
____________________________________________________________________________________
Signature______________________________________________________
Dated:
___________________,______
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - -
ASSIGNMENT
FORM
FOR
VALUE RECEIVED, __________________________, hereby sells, assigns and transfers
unto
Name:
____________________________________________________________________________________
(Please type
or print in block letters)
Address:
____________________________________________________________________________________
the right to purchase
Shares of URANIUM POWER CORPORATION represented by this Warrant Certificate to
the extent of _________ Shares as to which such right is exercisable and does
hereby irrevocably constitute and appoint URANIUM POWER CORPORATION to transfer
the same on the books of the Company with full power of substitution in the
premises.
______________________________________________________
Signature
Dated:
___________________,______
| |
Notice:
The signature of this assignment must correspond with the name as it appears
upon the face of this Warrant Certificate in every particular, without
alteration or enlargement or any change whatever. |
33
