EXHIBIT 10.01
URANIUM ENERGY CORPORATION
__________________________
09/16/05
Mr. T. H. Xxxx, Xx.
Xxxxx X. Xxxxx Trust
0000 XX 000xx Xx
Xxxxxx, XX 00000-0000
RE: Option to Acquire Drill Data currently owned by the Xxxxx X. Xxxxx Trust
Dear Xx. Xxxx:
I received the executed Option Agreement in Friday evening's mail (9/16/05) and
am, by return mail, enclosing a check in the amount of five thousand ($5,000.00)
dollars as the initial payment required by the Option Agreement.
Additionally, As per our phone conversation of September 13, 2005, It is
mutually agreed, that as no Production Royalties are possible on prospects
(leases) covered by drill data owned by the Trust, and subject to the above
referenced executed Option Agreement between the Xxxxx X. Xxxxx Trust and
Uranium Energy Corp., that upon final execution of the Option Agreement, Uranium
Energy Corp. will issue fifty thousand (50,000) shares of Uranium Energy Corp.
stock to the Xxxxx X. Xxxxx Trust as additional compensation.
I will contact you in the next few days to make arrangements to review the data.
The due diligence period set forth in the Option Agreement is for a period of
sixty days (60) from the execution date (9/13/05).
Thank you for your kind assistance in completing the Option Agreement. I look
forward to meeting you and reviewing the Trust's drill information.
Sincerely,
/s/ X. XXXXXX
Xxxxxxx X. Xxxxxx
Chief Geologist / Director
(Fax CC: Xxxx Xxxxxx, CEO)
0000 XXXXXX XXXX XXXXX, XXXXXX, XXXXX 00000
PH. 000-000-0000, FX. 000-000-0000
EMAIL: XXXXXX@XXXXXXXXX.XXX
URANIUM ENERGY CORP.
____________________
000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0
Phone: (000) 000-0000 and Fax: (000) 000-0000
_______________________________________________________
September 12, 2005
XXXXX X. XXXXX TRUST
0000 XX 000xx Xx., Xxxxxx, Xxxxxxxx, X.X.X., 73013
ATTENTION: MR. XXX XXXX
Dear Sir:
Re: OPTION TO ACQUIRE A 100% INTEREST IN CERTAIN ASSETS OF THE OPTIONOR
It has been represented to Uranium Energy Corp. (the "Optionee") by Xx.
Xxxx X. Xxxxx that the "Xxxxx X. Xxxxx Trust" (collectively, the "Optionor"),
owns certain drill and assay data respecting certain prospective tracts located
in Goliad, Xxxxxx, Xxxxx and XxXxxxxx Counties, Texas, which were previously
drilled and/or leased by the Optionor (collectively, the "Assets").
The purpose of this letter is to summarize the mutual intentions and
understandings of the Optionor and the Optionee regarding, among other things,
the proposed granting by the Optionor to the Optionee of an option to acquire an
undivided 100% legal, beneficial and registerable interest in and to the Assets
herein (the "Option"). This letter is a "letter of intent" which summarizes the
basis upon which the parties are prepared to negotiate with a view to entering
into a binding Option or other form of agreement. This letter, however, does not
create a contract or impose obligations on the parties other than as set forth
in sections 4, 5 and 6 below provided that it is acknowledged that this letter
supersedes and replaces all prior agreements or understandings between the
parties hereto.
It is acknowledged that the Optionee has been provided with certain
information which describes the business, assets, financial and operating
history and condition and prospects of the Optionor and its Assets (such
information is herein referred to, collectively, as the "Disclosure
Information"). The transaction summarized in this letter assumes that the
Disclosure Information is accurate and complete in all material respects and
that the Optionee is relying on such Disclosure Information as a condition of
its providing and entering into this letter with the Optionor with respect to
its proposed Option.
1. SUMMARY OF THE OPTION AND TRANSACTION
1.1 OPTION AND PURCHASE PRICE: In order to keep the right and Option granted to
the Optionee in respect of the Assets in good standing and in force and effect
during the Option period hereof (the "Option Period"); the Option Period being a
period of 90 calendar days from the Effective Date (as hereinafter defined and
determined) hereof; the Optionee shall be obligated to provide the following
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non-refundable cash payments (each a "Non-Refundable Payment") and the following
final purchase price cash payment (the "Final Purchase Price Payment"; the
Non-Refundable Payments and the Final Purchase Price Payment being,
collectively, the "Purchase Price" herein) to the Optionor in the following
manner prior to the end of the Option Period in this instance:
(a) Non-Refundable Payments: pay to the order and direction of the
Optionor the following Non-Refundable Payments in the aggregate of
U.S. $15,000.00 during the Option Period and in the following manner:
(i) an initial Non-Refundable Payment of U.S. $5,000.00 within two
calendar days of the execution date of this letter by the
Optionor (the "Effective Date"); and
(ii) the final Non-Refundable Cash Payment of U.S. $10,000.00 on or
before the end of the Optionee's Due Diligence Period (as
hereinafter defined and determined); and
(b) Final Purchase Price Payment: pay to the order and direction of the
Optionor a Final Purchase Price Payment in the amount of U.S.
$135,000.00 on or before the end of the Option Period.
1.2 TERMINATION OF OPTION: The Option shall terminate upon 10-calendar days'
prior written notice being first being provided by the Optionor to the Optionee:
(a) if the Optionee fails to make any of the required Non-Refundable
Payments to the order and direction of the Optionor in accordance with
paragraph 1.1(a) hereinabove within the time periods specified in
paragraph 1.1(a); or
(b) if the Optionee fails to make the required Final Purchase Price
Payment to the order and direction of the Optionor in accordance with
paragraph 1.1(b) hereinabove within the time period specified in
paragraph 1.1(b).
1.3 RIGHT OF OPTIONEE TO TERMINATE OPTION: Prior to the exercise of the Option
the Optionee may terminate the Option by providing a notice of termination to
the Optionor in writing of its desire to do so at least five calendar days prior
to its decision to do so. After such five-calendar days' period the Optionee
shall have no further obligations, financial or otherwise, under this letter,
except that the provisions of section 1.5 hereinbelow shall become immediately
applicable to the Optionee upon providing such notice of termination to the
Optionor.
1.4 TERMINATION OF OPTION AND NO INTEREST ACQUIRED IN THE ASSETS: If the Option
is so terminated in accordance with either of sections 1.2 or 1.3 hereinabove
then the Optionee shall have no right, entitlement or interest, legally or
equitably, in and to any of the Assets, and the Non-Refundable Payment(s)
theretofore made to the Optionor by the Optionee shall continue to be
non-refundable for which the Optionee shall have no recourse whatsoever.
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1.5 OBLIGATIONS UPON TERMINATION OF THE OPTION: If the Option is terminated
otherwise than upon the exercise thereof, then the Optionee shall deliver at no
cost to the Optionor within 30 calendar days of such termination copies of all
reports, maps, assay results and other relevant technical data compiled by or in
the possession of the Optionee with respect to the interests comprising the
Assets and not theretofore already furnished to the Optionor.
1.6 DEEMED EXERCISE OF OPTION: At such time as the Optionee has made each of the
required Purchase Price payments in accordance with section 1.1 hereinabove,
within the Option Period and the time periods as specified in section 1.1, then
the Option shall be deemed to have been exercised by the Optionee, and the
Optionee shall have thereby, in accordance with the terms and conditions of this
letter and without any further act required on its behalf, acquired an undivided
100% legal, beneficial and registerable interest in and to the interests
comprising the Assets.
2. DUE DILIGENCE INVESTIGATIONS
2.1 From the Effective Date hereof and for a period of 60 calendar days
thereafter the Optionee may conduct due diligence investigations in respect of
the Optionor and its Assets (such period in time being the "Optionee's Due
Diligence Period" herein). For purposes of such investigations the Optionor will
give to the Optionee and its agents and representatives as soon as reasonably
practicable after the Effective Date hereof full access to its Assets and all
books, records, financial and operating data and other information concerning
the Assets as the Optionee and its agents and representatives may reasonably
request. If, at any time during the Optionee's Due Diligence Period, the
Optionee determines that it is not satisfied, in its sole discretion, with the
results of such investigations, it may elect not to proceed with the
transactions contemplated hereby. In such instance the Optionee will notify the
Optionor of such fact and thereupon this letter will terminate and the parties
hereto will have not further obligations hereunder except the obligations set
forth in section 4 below.
3. NEGOTIATION AND EXECUTION OF DEFINITIVE AGREEMENT
3.1 While the Optionee is conducting the due diligence investigations described
in section 2 above the Optionor and the Optionee will negotiate in good faith to
complete and execute a definitive agreement and related documentation
(collectively, the "Agreement") setting out in detail the terms and conditions
of the Option arising herefrom. The Agreement will incorporate the terms and
conditions set out in this letter together with all other terms and conditions
as the parties or their legal advisors consider necessary or desirable,
including standard representations, warranties and covenants, indemnities from
the parties relating to such representations, warrants and covenants, and
conditions to closing. In particular, and without limiting the generality of the
foregoing, the parties shall structure the Option and negotiate the Agreement in
a manner which is tax advantageous to each of the parties hereto. If each of the
Optionor and the Optionee are satisfied with the results of their due diligence
investigations, it is intended that negotiations of the terms of the Agreement
and execution of the Agreement will be effective within 60 calendar days of the
Effective Date hereof; provided, however, that it is hereby acknowledged that
the Agreement may be subject to the prior acceptance of the respective
shareholders of parties hereto and such regulatory authorities as may have
jurisdiction over the affairs of the parties hereto.
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4. TRANSACTION COSTS
4.1 Each of the parties will be responsible for all costs (including, but not
limited to, legal fees and expenses) incurred by it in connection with the
transactions contemplated hereby. The obligations of the parties under this
section 4 will survive the termination of this letter.
5. CONFIDENTIALITY AGREEMENTS
5.1 As soon as reasonably practicable after the Effective Date and prior to the
end of the Option Period the Optionor and the Optionee will use their best
efforts to prevent public disclosure or knowledge of the transaction
contemplated hereby, without the prior approval of the other, and will maintain
the confidentiality of the negotiations regarding such transaction. The
foregoing will not restrict or otherwise affect the right of any such party to
make or permit any disclosure:
(a) which, in its opinion, is reasonably necessary or desirable for it to
carry out and give full effect to the terms, provisions and intent
hereof and the transaction contemplated hereby;
(b) to consultants, legal advisors, financial institutions, business
associates and others provided such disclosure is not intended for
broad dissemination to the public;
(c) in the case of the Optionee, which the legal advisors for the Optionee
advise is required or advisable to ensure compliance with applicable
securities laws and regulations; or
(d) as may be required by law.
6. EXCLUSIVE DEALING
6.1 As an inducement to the Optionee to proceed with the due diligence
investigations and the Non-Refundable Cash Payments described in sections 1 and
2 above and to proceed with the preparation of the Agreement, the Optionor
hereby agrees with the Optionee to deal exclusively and in confidence with the
Optionee in respect of the matters set out herein and to take no action,
directly or indirectly, which would impair the ability of the Optionor to
complete the transactions contemplated hereby and, without limitation, hereby
agrees and undertakes that, unless consented to in writing by the Optionee, it
will not at any time prior to the earlier of the end of the Option Period or the
termination of the Option, if applicable, enter into, negotiate, solicit or
knowingly encourage or participate in, any negotiations or discussions relating
to any disposition of all or any interest in and to any of its Assets.
7. ASSIGNMENT
7.1 Notwithstanding anything else contained herein, it is acknowledged that the
Optionee may assign its rights and obligations herein with respect to the Option
or any portion thereof to any other entity, by way of any arrangement including,
without limitation, an additional option or joint venture in respect of the
development of the Assets, and in such instance the Agreement contemplated by
section 3 herein would be negotiated and entered into between the Optionee and
such entity.
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8. GENERAL
8.1 OBLIGATIONS: Other than the obligations set forth in sections 4, 5 and 6
above, the parties will not be obligated in any manner with respect to the
transaction contemplated hereby (including obligations to negotiate in good
faith) unless and until the Agreement is executed by the parties.
8.2 PROPER LAW: This letter of intent will be governed by and construed in
accordance with the laws of the State of Nevada. The parties submit to the
jurisdiction of the courts of the State of Nevada with respect to any matters
arising out of this letter of intent.
8.3 COUNTERPARTS: This letter of intent may be executed in any number of
counterparts, by facsimile or otherwise, each of which shall be deemed to be an
original and all of which together shall be deemed to be one and the same
document.
Please confirm that this letter accurately sets forth your
understanding of the terms of the proposed transaction and the other matters
discussed herein, by signing a copy of this letter below and returning it to us.
Upon our receipt we confirm that we will immediately seek Board approval to the
general terms of this letter and move forward with our due diligence
investigations respecting the Optionor and its Assets. As the terms and
conditions respecting our proposed offer to acquire an Option as set forth in
this letter are extremely sensitive and confidential, we confirm that the
contents of this letter should not be disclosed to any third party without our
prior written approval. In addition, and as we are now ready, willing and able
to perform upon the terms contained herein, we confirm that the offer contained
in this letter is open for acceptance by the Optionor only until 5:00 p.m.
(Vancouver time) on Friday, August 26, 2005, failing the Optionor's acceptance
of which our offer and the contents of this letter will be deemed null and void
and of no further force and effect whatsoever. In the interim, and while we
await the Optionor's response, we remain,
Yours very truly,
URANIUM ENERGY INC.
Per: /s/ X. XXXXXX
___________________________
Authorized Signatory
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ACCEPTED on this 13 day of September 2005, by the Optionor:
____
Xxxxx X. Xxxxx Trust
Per: __________________________________
Xxxxxxx Xxxxxx, Co-Trustee
__________________________________
T. H. Xxxx, Xx., Co-Trustee
