__________

 

TARGET DISCLOSURE LETTER

Pursuant to

ARRANGEMENT AGREEMENT

 

 

From

:

 

CUE RESOURCES LTD.

 

To

:

 

URANIUM ENERGY CORP.

 

 

 

Uranium Energy Corp.

500 North Shoreline, Ste. 800N, Corpus Christi, Texas, U.S.A., 78401

__________

--------------------------------------------------------------------------------

January 20, 2012

Uranium Energy Corp.

Suite 320, 1111 West Pender Street
Vancouver, British Columbia
Canada, V6E 2J3

Attention:     Amir Adnani, Chief Executive Officer

Dear Sirs/Mesdames:

Re:     Arrangement Agreement dated January 20, 2012 between Uranium Energy
Corp. and Cue Resources Ltd. - Disclosure Letter

This letter, together with the attached schedules, constitutes the Target
Disclosure Letter referred to and defined in the Arrangement Agreement (the
"Arrangement Agreement") between Uranium Energy Corp. ("UEC" or "Purchaser") and
Cue Resources Ltd. ("Cue" or "Target") dated as of the date hereof.

The purpose of the Target Disclosure Letter is to disclose to UEC in the
attached schedules the qualifications, modifications or exceptions to certain
representations, warranties and covenants of Cue contained in the Arrangement
Agreement. The Target Disclosure Letter constitutes an integral part of the
Arrangement Agreement.

The numbering of the attached schedules corresponds to the articles, sections or
other portions of the Arrangement Agreement. For greater clarity, any
introductory language and headings in the Target Disclosure Letter are inserted
for convenience of reference only and will not create or be deemed to create a
different standard for disclosure than the language set forth in the Arrangement
Agreement. Information disclosed in any schedule of the Target Disclosure Letter
shall be deemed disclosed with respect to such other article, sections or other
portions of the Arrangement Agreement or the Target Disclosure Letter to which
such written information, on its face, would obviously pertain in light of the
form and substance of the disclosure made.

No item in the Target Disclosure Letter relating to any possible breach or
violation of any agreement, law or regulation shall be construed as an admission
or indication that any such breach or violation exists or has actually occurred,
and nothing in the Target Disclosure Letter constitutes an admission of any
liability or obligation of Cue to any third party or shall confer or give to any
third party any remedy, claim, liability, reimbursement, cause of action, or
other right. The Target Disclosure Letter is qualified in its entirety by
reference to the provisions of the Arrangement Agreement, and is not intended to
constitute, and shall not be construed as constituting, any representation,
warranty, undertaking, assurance, covenant, indemnity, guarantee or other
commitment of any nature whatsoever not expressly given in the Arrangement
Agreement. The inclusion of any item in the Target Disclosure Letter shall not
be construed as an admission or opinion by Cue of the materiality of such item.

--------------------------------------------------------------------------------

The Target Disclosure Letter is deemed to include the following, all of which
are to be regarded as having been disclosed to UEC:

1.     all matters contained or referred to in the Target Disclosure Letter and
in any document annexed to or referred to in the Target Disclosure Letter and
all matters apparent from the information disclosed in the Target Disclosure
Letter or in any document annexed to or referred to herein; and

2.     all matters and documents contained or referred to in the Arrangement
Agreement (including the schedules attached thereto) or any document which may
be entered into or executed and delivered between the parties pursuant to the
Arrangement Agreement and the transactions contemplated therein.

UEC acknowledges that the information in the Target Disclosure Letter is
confidential, proprietary information of Cue and, if disclosed would be
seriously prejudicial to the interests of Cue. UEC shall not, without the prior
written consent of Cue (such consent not to be unreasonably delayed, conditioned
or withheld), disclose all or any portion of the Target Disclosure Letter.

All capitalized terms used in the Target Disclosure Letter shall have the
meanings attributed thereto in the Arrangement Agreement, unless otherwise
stated, and all references to dollars, unless otherwise specifically indicated,
are to Canadian dollars. The Target Disclosure Letter shall be governed by, and
be construed in accordance with, the laws of the Province of British Columbia
and the laws of Canada applicable therein but the reference to such laws shall
not, by conflict of laws rules or otherwise, require the application of the law
of any jurisdiction other than the Province of British Columbia.

Yours truly,

Cue Resources Ltd.

Per:     /s/ Robert Tyson
          Robert Tyson
          Chief Executive Officer

We hereby acknowledge receipt and accept the contents of this letter this 20th
day of January, 2012.

Uranium Energy Corp.

Per:     /s/ Amir Adnani
           Amir Adnani
           Chief Executive Officer

--------------------------------------------------------------------------------

 

Schedule (B)

CAPITALIZATION

1.     Cue has an authorized share capital consisting of an unlimited number of
Target Shares without par value;

2.     As of the close of business on January 20, 2012, Cue has an aggregate
119,808,067 Target Shares issued and outstanding; and

3.     Reference is made to the summary of issued and outstanding Target Options
and Target Warrants entitling the holders thereof to purchase additional Target
Shares in the attached Appendix 1 hereto.

--------------------------------------------------------------------------------

 

Appendix 1
To Schedule (B)

Summary of Target Options and Target Warrants

I. Target Options

As at January 20, 2012, the following Target Options are outstanding:

Year Issued

Number of Options

Exercise Price

Expiry Date

2007

125,000

$0.45

March 5, 2012

2008

200,000
200,000
300,000

$0.45
$0.20
$0.22

July 15, 2013
Oct. 30, 2013
Nov. 10, 2013

2009

100,000
250,000
25,000

$0.10
$0.10
$0.10

June 19, 2014
June 19, 2014
Dec. 8, 2014

2010

500,000
125,000
300,000
100,000
50,000
200,000
100,000

$0.10
$0.10
$0.10
$0.10
$0.10
$0.10
$0.115

May 1, 2015
May 12, 2015
May 12, 2015
May 12, 2015
May 12, 2015
May 12, 2015
Nov. 23, 2015

2011

250,000
25,000
50,000
75,000
150,000

$0.10
$0.10
$0.10
$0.10
$0.10

Aug. 3, 2016
Aug. 3, 2016
Aug. 3, 2016
Aug. 3, 2016

Aug. 3, 2016

Total Target Options

3,125,000

   

The aggregate Target Options outstanding as at January 20, 2012 is 3,125,000 as
summarized above and detailed below.

--------------------------------------------------------------------------------

Name and Address of Optionholder

Number of Purchase Options

Option No.

Date Granted

Exercise Price

Expiry Date

Christopher Healey

125,000

n/a

March 5, 2007

$0.45

March 5, 2012

John Icke

200,000

n/a

July 15, 2008

$0.45

July 15, 2013

Robert Tyson

200,000

n/a

October 30, 2008

$0.20

October 30, 2013

John Icke (JRI Strategy Consultants Inc.)

300,000

n/a

November 10, 2008

$0.22

November 10, 2013

Esteban Burt

100,000

n/a

June 19, 2009

$0.10

June 19, 2014

Peter Leighton

250,000

n/a

June 19, 2009

$0.10

June 19, 2014

Jane-Marie Glynn

25,000

n/a

December 8, 2009

$0.10

December 8, 2014

Robert Tyson

500,000

01-2010

May 1, 2010

$0.10

May 1, 2015

Peter Leighton

125,000

06-2010

May 12, 2010

$0.10

May 12, 2015

John Icke (JRI Strategy Consultants Inc.)

300,000

02-2010

May 12, 2010

$0.10

May 12, 2015

Esteban Burt

100,000

07-2010

May 12, 2010

$0.10

May 12, 2015

Jane-Marie Glynn

50,000

10-2010

May 12, 2010

$0.10

May 12, 2015

Christopher Healey

200,000

05-5010

May 12, 2010

$0.10

May 12, 2015

Esteban Burt

100,000

14-2010

November 23, 2010

$0.115

November 23, 2015

Andrew Bell

250,000

02-2011

August 3, 2011

$0.10

August 3, 2016

Karoline Monkvik

25,000

07-2011

August 3, 2011

$0.10

August 3, 2016

Jasmine Currington

50,000

05-2011

August 3, 2011

$0.10

August 3, 2016

Christina Boddy

75,000

04-2011

August 3, 2011

$0.10

August 3, 2016

David McAdam

150,000

03-2011

August 3, 2011

$0.10

August 3, 2016

Total Target Options

3,125,000

       

II. Target Warrants

As at January 20, 2012, the following Target Warrants are outstanding:

Description

Number of Warrants

Exercise Price ($)

Expiry Date

Series "H" Target Warrants from March 2010 debt conversion (each, a "Debt
Conversion Target Warrant" and collectively, the "Debt Conversion Target
Warrants")

9,456,020

0.15

April 19, 2012

Series "H" Target Warrants from November 2010 private placements (each, a
"Private Placement Target Warrant" and collectively, the "Private Placement
Target Warrants")

34,732,744

0.12

November 10, 2012

Series "I" Target Warrants under agent options from November 2010 private
placement (1) (each, a "Agent Target Warrant" and collectively, the "Agent
Target Warrants")

1,988,423 (1)

0.12

November 10, 2012

Total Target Warrants

46,177,187

(1)     The Agent Target Warrants are exercisable under options which are
exercisable, at an exercise price of $0.07, into "Units" (as more particularly
described below) consisting of one Target Share and Target Warrant with an
exercise price of $0.12, exercisable for 2 years.

--------------------------------------------------------------------------------

The aggregate Target Options outstanding as at January 20, 2012 is 46,177,187 as
summarized above and detailed below.

(a) Debt Conversion Target Warrants

As at January 20, 2012, the following Debt Conversion Target Warrants are
outstanding:

Name and Address of Warrant Holder

Number of Series "H" Share Purchase Warrants

Warrant No.

Notes

Environment Consulting S.A.

c/o Dr. Cesar Lopez Moreira No. 493
Asuncion, Paraguay

569,420

1

United Logistical S.A.

c/o Dr. Cesar Lopez Moreira No. 493
Asuncion, Paraguay

2,608,120

2

Empire Drilling S.A.

c/o Dr. Cesar Lopez Moreira No. 493
Asuncion, Paraguay

2,896,850

3

Canaccord Genuity Corp.

2200-609 Granville Street
Vancouver, BC
V7Y 1H2

1,000,000

4

Uranium Power Corp.

Suite 100-2100 Airport Drive
Saskatoon, Saskatchewan
S7L 6M6

2,381,630

5

Total Debt Conversion Target Warrants

9,456,020

Notes:

Close date:                          April 19, 2010
Expiry date:                        April 19, 2012
Hold period expiry date:    August 20, 2010
Exercise price:                    $0.15
Each Debt Conversion Target Warrant is exercisable to purchase one Target
Option.

--------------------------------------------------------------------------------

(b) Private Placement Target Warrants

As at January 20, 2012, the following Private Placement Target Warrants are
outstanding:

Name and Address of Warrant Holder

Number of Series "H" Share Purchase Warrants

Warrant No.

Notes

CANARY CAPITAL CORP.

#150-666 Burrard Street
Vancouver, BC
V6C 2X8

245,000

1

HAYWOOD SECURITIES INC.

2000-400 Burrard Street
Vancouver, BC
V6C 3A6

1,200,000

2

GLOBAL SECURITIES CORPORATION ITF NICK SEGOUNIS
A/C 155-7974

11th Floor, Three Bentall Centre
595 Burrard Street
Vancouver, BC
V7X 1C4

200,000

3

PI FINANCIAL CORP. ITF STEFAN STUPARU
A/C 048-0153-6

1900-666 Burrard Street
Vancouver, BC
V6C 3N1

90,000

4

PI FINANCIAL CORP. ITF DAVE ACHTEMICHUK
A/C 025-4400-5

1900-666 Burrard Street
Vancouver, BC
V6C 3N1

85,000

5

PI FINANCIAL CORP. ITF JACEK JASTRZEBSKI
A/C 048-0152-1

1900-666 Burrard Street
Vancouver, BC
V6C 3N1

100,000

6

Re-registered as warrant #72

PI FINANCIAL CORP. ITF PERRY MEIKLE
A/C 048-0175-3

1900-666 Burrard Street
Vancouver, BC
V6C 3N1

90,000

7

PI FINANCIAL CORP. ITF LEADER RESOURCES
A/C 025-4482-3

1900-666 Burrard Street
Vancouver, BC
V6C 3N1

130,000

8

PI FINANCIAL CORP. ITF SPIKE HOLDINGS
A/C 024-1175-9

1900-666 Burrard Street
Vancouver, BC
V6C 3N1

140,000

9

PI FINANCIAL CORP. ITF TIM CAMPBELL
A/C 025-4541-6

1900-666 Burrard Street
Vancouver, BC
V6C 3N1

80,000

10

PENTOR CAPITAL CORP.

First Canadian Place, Suite 350
Toronto, Ontario
M5X 1C1

214,285

11

JAYCO HOLDINGS INC.

13011 Crescent Road
Surrey, BC
V4P 1J6

350,000

12

BRIAN K.S. ROSS

750 Balliol Street
Toronto, ON
M4S 1E7

70,000

13

DIG MEDIA INC.

1430-800 West Pender Street
Vancouver, BC
V6C 2V6

300,000

14

UNION SECURITIES LTD. IN TRUST FOR MALCOLM GRAVE
TSFA ACCOUNT 8A1-9559-3

4529 McKee St.
Burnaby, BC
V5J 2S9

100,000

15

BRIAN KASK

5063 Whiskey Cove Lane
Belcarra, BC
V3H 4N7

300,000

16

BRIAN D. KASK

119 Hemlock Dr.
Anmore, BC
V3H 4W9

125,000

17

BOON SIM

7145 Maureen Crescent
Burnaby, BC
V5A 1H2

75,000

18

HAYWOOD SECURITIES INC.
A/C XC1-6869-C

200-400 Burrard Street
Vancouver, BC
V6C 3A6

200,000

19

HAYWOOD SECURITIES INC.
A/C XC1-5762-C

200-400 Burrard Street
Vancouver, BC
V6C 3A6

200,000

20

HAYWOOD SECURITIES INC.
A/C XR2-1230-C

200-400 Burrard Street
Vancouver, BC
V6C 3A6

150,000

21

SCOTIA CAPITAL ITF ALPHA NORTH OFFSHORE INC.
A/C 40300733

40 King St. West Sub Basement
Toronto, ON
M5W 2X6

3,200,000

22

SCOTIA CAPITAL ITF value preservation fund in respect of cell b
A/C 40300836

40 King St. West Sub Basement
Toronto, ON
M5W 2X6

800,000

23

UNION SECURITIES LTD. ITF 1242564 ONTARIO INC.
A/C 0IT-84790

PO Box 10341, Pacific Centre
900-700 W. Georgia Street
Vancouver, BC
V7Y 1H4

200,000

24

INVESTOR COMPANY C/O PARKWOOD
A/C 5J5093

77 Bloor St. W, 3rd Floor
Toronto, ON
M4Y 2T1

900,000

25

INVESTOR COMPANY
A/C EJ5004

77 Bloor St. W, 3rd Floor
Toronto, ON
M4Y 2T1

600,000

26

NBCN Inc. ITF Pasquale Di Capo RRSP Account 118H21S

1010 de la Gauchetiere Ouest
Montreal, QC
H3B 5J2

3,000,000

27

NBCN INC. ITF PINETREE RESOURCE PARTNERSHIP - 26TS03V

130 King Street West, 30th Floor
Toronto, Ontario
M5X 1J9

4,000,000

28

Re-registered as warrant #73

Luciano Fiorini

10-11, 830 Rowntree Dairy Rd.
Woodbridge, ON
L4L 5V2

400,000

29

Re-registered - See Cert #71

MACQUARIE PRIVATE WEALTH INC. IN TRUST FOR MIKE MANSFIELD
A/C #012-908E-1

Suite 2200, 440 - 2nd Avenue SW
Calgary, AB
T2P 5E9

200,000

30

RICHARD PATRICIO

1216 White Oaks Ave
Mississauga, ON
L5J 3B7

500,000

31

Re-registered - See Cert #60

DAVID D'OROFRIO

90 Ellerslie Ave
North York, ON
M2N 1X8

200,000

32

Re-registered - See Cert #66

ALBERT CONTARDI

100 Yorkville Avenue, Suite 201
Toronto, ON
M5R 2C3

200,000

33

Re-registered - See Cert #63

JENNIFER GOLDMAN

64 Old Forest Hill Rd
Toronto, ON
M5P 2R2

200,000

34

GMP SECURITIES LP

145 King St West, #300
Toronto, ON
M5H 1J8

400,000

35

DAVID SCHMIDT

402-905 W. Pender St.
Vancouver, BC

V6C 1LG

200,000

36

PENSON FINANCIAL ITF A/C 6YA 610A

360, St. Jacques St. West, 11th Floor
Montreal, QC
H2Y 1P5

200,000

37

Re-registered as warrant #74

JAMIE LEVY

491 Melrose Ave
Toronto, ON
M5M 2A1

200,000

38

Re-registered - See Cert #68

MICHAEL GESUALDI
A/C 7X8608E

2402 Falkland Cres.
Oakville, ON
L5M 4V1

200,000

39

Re-registered - See Cert #62

VITO RUZZUTO
A/C 7X0467E

25 Watline Ave, 6th Floor
Mississauga, ON
L4Z 2Z1

200,000

40

Re-registered - See Cert #64

RICCARDI FAMILY TRUST
A/C 8D4057

1887 Roselawn Drive
Woodbridge, ON
L4H 1A5

200,000

41

Re-registered - See Cert #65

DINA RICCARDI
A/C 8T-5605E

1887 Roselawn Drive
Woodbridge, ON
L4H 1A5

500,000

42

Re-registered - See Cert #61

JOHN ICKE

3433 Marpole Avenue
Vancouver, BC
V6J 2S3

1,000,000

43

Re-registered - See Cert #69

RED ROCK RESOURCES PLC

115, Eastbourne Mews
London W2 6LQ, U.K.

397,934

44 (2)

RED ROCK RESOURCES PLC

115, Eastbourne Mews
London W2 6LQ, U.K.

1,700,000

45

RED ROCK RESOURCES PLC

115, Eastbourne Mews
London W2 6LQ, U.K.

1,200,000

46

B2B TRUST ITF MOHAMMED ELSAGHIR

130 Adelaide Street W.
Toronto, ON
M5H 3P5

500,000

47

MENG GAN

1704-1616 Bayshore Drive
Vancouver, BC
V6G 3L1

250,000

48

DAVID O'BRIEN

10484 137th St.
Surrey, BC
V3T 4H5

150,000

49

GESTION MARC BLAIS INC.

429 Mortlake
St. Lambert, QC
J4P 3C7

142,857

50

Re-registered - See Cert #70

JAYVE & CO.

P.O. Box, 199 Bay Street
Toronto, ON
M5H 4A6

600,000

51

GENDER TRUST REG.

Aeulestrasse 5, Fl-990 Vadue
Liechtenstein

1,000,000

52

Re-registered - See Cert #67

MACQUARIE PRIVATE WEALTH INC. ITF ARNI JOHANNSON
A/C 280-514K-1

3200-181 Bay Street
Toronto, ON
M5J 2T3

150,000

53

RESINCO CAPITAL PARTNERS INC.

Suite 1430-800 West Pender Street
Vancouver, BC
V6C 2V6

2,202,382

54 (1)

CANACCORD GENUITY CORP.

2200-609 Granville Street
Vancouver, BC
V4Y 1H2

2,931,000

55

B2B TRUST IFT TARIK ELSAGHIR
A/C #B042616
130 Adelaide St., West
Toronto, ON
M5H 3P5

700,000

56

CANACCORD GENUITY CORP IN TRUST FOR MATT KUHN
A/C #267-259S-8

609 Granville St, Suite 2200
Vancouver, BC
V7Y 1H2

100,000

57

CANACCORD GENUITY CORP IN TRUST FOR DELORES TAM

609 Granville St, Suite 2200
Vancouver, BC
V7Y 1H2

50,000

58

CANACCORD GENUITY CORP IN TRUST FOR DIANE ALEXANDER
A/C #17F-761S-3

2200-609 Granville St.
Vancouver, BC
V7Y 1H2

714,286

59

INVESTOR COMPANY ITF RICHARD PATRICIO, A/C 7H1204E

C/O TD WATERHOUSE CANADA INC.
77 Bloor St. West, 3rd Floor
P O Box 5999, Station "F"
Toronto, ON, M4Y 2T1

500,000

60

INVESTOR COMPANY ITF DINA RICCARDI, A/C 8T5641E

C/O TD WATERHOUSE CANADA INC.
|77 Bloor St. West, 3rd Floor
P O Box 5999, Station "F"
Toronto, ON, M4Y 2T1

500,000

61

INVESTOR COMPANY ITF MICHAEL GESUALDI, A/C 7X8608E

C/O TD WATERHOUSE CANADA INC.
77 Bloor St. West, 3rd Floor
P O Box 5999, Station "F"
Toronto, ON, M4Y 2T1

200,000

62

INVESTOR COMPANY ITF ALBERT CONTARDI, A/C 8F2630E

C/O TD WATERHOUSE CANADA INC.
77 Bloor St. West, 3rd Floor
P O Box 5999, Station "F"
Toronto, ON, M4Y 2T1

200,000

63

INVESTOR COMPANY ITF VITO RIZZUTO, A/C 7X0467E

C/O TD WATERHOUSE CANADA INC.
77 Bloor St. West, 3rd Floor
P O Box 5999, Station "F"
Toronto, ON, M4Y 2T1

200,000

64

INVESTOR COMPANY ITF RICCARDI FAMILY TRUST, A/C 8D4057A

C/O TD WATERHOUSE CANADA INC., 77 Bloor St. West, 3rd Floor, P O Box 5999,
Station "F", Toronto, ON, M4Y 2T1

200,000

65

VALEURS MOBILIERES DESJARDINS INC. ITF DAVID D'OROFRIO, A/C 7APK334

1060 University, Suite 101, Montreal, Quebec H3B 5L7

200,000

66

ROYTOR & CO. for GENDER TRUST REG.

RBC Dexia Investor Services Trust, Securities Cage, 155 Wellington Street West,
2nd Floor, Toronto, ON M5V 3L3

1,000,000

67

INVESTOR COMPANY ITF JAMIE LEVY, A/C 17J852E

c/o TD Waterhouse Canada Inc.,
77 Bloor St. West, 3rd Floor
P O Box 5999, Station "F"
Toronto, ON, M4Y 2T1

200,000

68

MACQUARIE PRIVATE WEALTH INC ITF JOHN ICKE

1818 Bay Street, Suite 3200
Toronto, ON
M5J 2T3

1,000,000

69

INVESTOR COMPANY ITF GESTION MARC BLAIS INC., A/C 33RM95A

c/o TD Waterhouse Canada Inc.
77 Bloor St. West, 3rd Floor
PO Box 5999, Station "F"
Toronto, ON, M4Y 2T1

142,857

70

INVESTOR COMPANY ITF LUCIANO FIORINI, A/C 7U1273E

C/O TD WATERHOUSE CANADA INC.
77 BLOOR STREET WEST, 3RD FLOOR, PO BOX 5999 STATION "F"
TORONTO, ON, M4Y 2T1

400,000

71

Dundee Securities Corp. ITF Jacek

Jastrzebski, A/C 14M-F33SN
1 Adelaide St. E, Suite 2700, Toronto, ON, M5C 2V9

100,000

72

NESBITT BURNS ITF PINETREE RESOURE PARTNERSHIP A/C 402-20952-20

B1 Level, 1 First Canadian Place, Toronto, ON, M5X 1H3

4,000,000

73

Dundee Securities Ltd. ITF Donato Sferra A/C 125689EN

1 Adelaide Street, Suite 2700
Toronto, ON, M5C 2V9

200,000

74

Total Private Placement Target Warrants

34,732,744

Notes

:

Close date:                            November 10, 2010
Expiry date:                          November 10, 2012
Hold period expiry date:      March 11, 2011
Exercise price:                      $0.12
Each Private Placement Target Warrant entitles the holder thereof to purchase
one Target Option.

(1)     Resinco Capital Partners ("Resinco") has advanced to Target an aggregate
of CDN $250,000 (the "Resinco Advance") pursuant to three letter agreements from
Resinco to Target dated March 29, 2011, April 12, 2011 and May 17, 2011, all as
more particularly detailed under Schedule (P) of this Target Disclosure Letter,
constituting an advance and non-interest-bearing loan which was offset against
the sum due and payable upon exercise by Resinco on January 12, 2012 of
2,083,333 Target Warrants under Target Warrant certificate number 54.

(2)     Red Rock Resources PLC ("Red Rock") has advanced to Target an aggregate
of CDN $312,248 (the "Red Rock Advance") pursuant to three letter agreements
from Red Rock to Target dated March 23, 2011, April 27, 2011 and June 17, 2011,
all as more particularly detailed under Schedule (P) of this Target Disclosure
Letter, constituting an advance and non-interest-bearing loan which was offset
against the sum due and payable upon exercise by Resinco on January 12, 2012 of
2,602,066 Target Warrants under Target Warrant certificate number 44.

--------------------------------------------------------------------------------

 

(c) Agent Target Warrants

As at January 20, 2012, the following Agent Target Warrants are outstanding:

Name and Address of Warrant Holder

Number of Series "I" Share Purchase Warrants

Warrant No.

Notes

Canaccord Genuity Corp.
2200-609 Granville Street
Vancouver, BC
V7Y 1H2

359,623

1

Haywood Securities Inc.
2000-400 Burrard Street
Vancouver, BC
V6C 3A6

140,000

2

PowerOne Capital Markets Limited
The Exchange Tower
130 King Street West, Suite 2500
Toronto, ON  M5X 1A9

1,320,000

3

Re-registered - See Cert #10

PI Financial Corp.
1900-666 Burrard Street
Vancouver, BC
V6C 3N1

57,200

4

Wolverton Securities Ltd.
17th Floor, 777 Dunsmuir Street
Vancouver, BC
V7Y 1J5

40,000

5

Global Securities Corp.
1100-595 Burrard Street
Vancouver, BC
V7X 1C4

16,000

6

Union Securities Ltd.
900-700 West Georgia Street
Vancouver, BC
V7Y 1H4

8,000

7

Capital Street Group
1641 Lonsdale Ave, Suite 869
North Vancouver, BC V7M 2J5

19,600

8

Capital Street Group
1641 Lonsdale Ave, Suite 869
North Vancouver, BC V7M 2J5

28,000

9

Fab Carella
7235 Bayview Drive
Burnaby, BC
V5A 4T3

N/A

N/A

Received cash commission only.

NBCN INC. ITF A/C 111QKYE
POWERONE CAPITAL MARKETS Ltd.
M100-1010, de la Gauchetiere St West, Montreal, Quebec H3B 5J2

1,320,000

10

Total Agent Target Warrants

1,988,423

Note:

Close date:                         November 10, 2010
Expiry date:                       November 10, 2012
Hold period expiry date:   Not applicable.
Exercise price:                  $0.12
Each Agent Target Warrant Holder named above holds a corresponding number of
options exercisable, at an exercise price of $0.07, into "Units" of Cue. Each
Unit consists of one Target Share and one transferrable Target Warrant
exercisable at a price of $0.12 if exercised on or before November 10, 2012.

--------------------------------------------------------------------------------

SCHEDULE (D)(iii)

PERMITS AND LICENSES

Prospecting Permits

The Yuty Project consists of four large mineral concessions covering a total
area of 230,992 ha in southeastern Paraguay. They consist of:

1.     Central Block (Block 1), covering 100,842 ha. The Prospecting Permit
("PP") was issued by Ministério de Obras Públicas y Comunicaciones ("MOPC")
(MOPC File No. 16835/2006) by Resolution No. 382 dated July 7, 2006, and
corrected by MOPC Resolution No. 870 dated November 17, 2006 (Burt, 2007);

2.     Block No. 2, situated east of the Central Block, covering 48,200 ha. This
is a PP issued by MOPC (File No. 13197/2006) Resolution No. 849 dated November
15, 2006 (Burt, 2007); and

3.     Yuty Blocks No. 3 and 4, referred to earlier as Northern Block: Blocks
N1, N2 and N3, and Southern Block (Block S), together covering 81,950 ha. These
are PPs issued by MOPC (File Nos. 18704/2006, 18777/2006, 19141/2006, and
24574/2006). MOPC issued these PPs by Resolution No. 322 dated April 30, 2007
(Burt, 2007).

Environmental Licenses

Transandes Paraguay S.A., a wholly owned subsidiary of Cue ("Transandes"),
received environmental licenses to conduct exploration for minerals issued by
the Secretaria del Ambiente ("SEAM") on the Yuty Project, as follows:

1.     for Yuty Block 1: SEAM Resolution DGCCARN No. 1510/2009 dated August 21,
2009 for a two year period. Renewal for another two year period was filed July
14, 2011 pending approval February 2012. Under terms of Decree No. 4066/2010,
environmental licenses are considered renewed with the filing until SEAM issues
the definitive licenses;

2.     for Yuty Block 2: SEAM Resolution DGCCARN No. 1500/2009 dated August 20,
2009 for a two year period. Renewal for another two year period was filed July
14, 2011. License is valid as of filing date per Decree 4066/10; and

3.     for Yuty Blocks 3 and 4: SEAM Resolution DGCCARN No. 71509/2009 dated
August 21, 2009 for a two year period. Renewal for another two year period was
filed July 14, 2011. License is valid as of filing date per Decree 4066/10.

Exploration Permits

Transandes received exploration permits to carry out mineral exploration on the
Yuty Project grounds issued by the MOPC Resolution No. 356 dated May 16, 2007,
which authorized Transandes to initiate the exploration phase in the areas
granted for mineral prospecting by MOPC Resolutions No. 382/2006, No. 849/2006,
and No. 322/2007 for the Yuty 1, 2, 3 and 4 Blocks. Subsequently, Resolution No.
356/07 determined that the effective date of the exploration period was May 16,
2007.

--------------------------------------------------------------------------------

The exploration period under the Mineral Concession Contract approved by Law
3575/08 was extended for a one year period until March 10, 2012 by MOPC
Resolution No. 2645 dated December 1, 2011.

Transandes must comply with Mining Law 3180/07 and environmental laws, as well
as pay the corresponding land fees and post the required bonds and insurance
policies.

--------------------------------------------------------------------------------

 

Schedule (E)

TARGET SUBSIDIARY

The capital of Transandes consists of Gs. 200,000,000 (two hundred million
guaranies, a guarani being the national currency unit of Paraguay). The capital
is represented by two hundred shares of Gs. 1,000,000 (one million guaranies)
each (each, a "Transandes Share"), numbered from 1 to 200. As at January 20,
2012, Cue is the registered owner of 198 Transandes Shares, with the remaining 2
Transandes Shares registered to Longview Capital Partners.

--------------------------------------------------------------------------------

 

Schedule (F)

NO VIOLATION

Cue's representation in paragraph (f) of Schedule 2 of the Arrangement Agreement
is subject to the following agreements and, without limiting the foregoing, the
respective provisions therein:

1.     Consulting Agreement, dated effective May 1, 2010, between Cue and JRI
Strategy Consultants Inc. ("JRI") a company that is wholly owned and controlled
by John Icke and John Icke ("Icke") to provide the services of Icke as Cue's
Executive Chairman, and Schedule B thereto, which provides, in part, that JRI is
entitled to the following compensation in the event of a change of control:

"Change of Control

Should a Change of Control of the Company take place as defined in [the
Agreement] then the Consultant will be compensated for twelve (12) months of
base salary (12 x CDN$5,000) should the Consultant not be offered a position of
similar accountability, authority and responsibility in the new entity with
similar compensation within 30 days of the merger. The Consultant has the sole
right to not accept the offer and claim compensation. Options not vested at the
point in time of the transaction will become 100% vested on the closure of the
deal."; and

2.     Consulting Agreement dated effective May 1, 2010 between Cue and
Transpacific Capital (Hong Kong) Limited ("Transpacific") a company that is
wholly owned and controlled by Robert Tyson and Robert Tyson ("Tyson") to
provide the services of Tyson as Cue's President and CEO, which provides, in
part, that Transpacific is entitled to the following compensation in the event
of a change of control:

"Change of Control

Should a Change of Control of the Company take place as defined in [the
Agreement] then the Consultant will be compensated for twelve (12) months of
base salary (12 x CDN$15,000) should the Consultant not be offered a position of
similar accountability, authority and responsibility in the new entity with
similar compensation within 30 days of the merger. The Consultant has the sole
right to not accept the offer and claim compensation. Options not vested at the
point in time of the transaction will become 100% vested on the closure of the
deal.".

--------------------------------------------------------------------------------

 

Schedule (O)

NO UNDISCLOSED LIABILITIES

Nil.

--------------------------------------------------------------------------------

 

Schedule (p)

ABSENCE OF CHANGES

Cue's representation in paragraph (p) of Schedule 2 of the Arrangement Agreement
is subject to the following:

1.     Confidentiality Agreement, dated December 1, 2011, between Cue and UEC;

2.     Letter Agreement, dated effective December 21, 2011, between Cue and UEC;

3.     Secured Loan Agreement, and its related Schedule A - General Security
Agreement, dated January 20, 2012, between Cue and UEC;

4.     Loan Agreement, dated August 3, 2011, between Cue and Resinco (the "Loan
Agreement"), pursuant to which Resinco has loaned to Cue up to $400,000 bearing
interest at a rate of prime plus 4% per annum with a one time administrative fee
of $25,000 and the issuance by Cue of 1,000,000 Target Shares as a loan bonus,
which 1,000,000 Target Shares were issued at a deemed price of $0.05 per Target
Share effective January 12, 2012;

5.     on January 12, 2012, the following Target Shares were issued by Cue:

a.     2,083,333 Target Shares issued to Resinco pursuant to the exercise by
Resinco of 2,083,333 Target Warrants at an exercise price of $0.12 per Target
Share in connection with the Resinco Advance; and

b.     2,606,066 Target Share issued to Red Rock pursuant to the exercise by Red
Rock of 2,606,066 Target Warrants at an exercise price of $0.12 per Target Share
in connection with the Red Rock Advance; and

6.     reference is made to the Material Contracts of Cue as set out in Schedule
(Q) of this Target Disclosure Letter and dated as effective on or after April
30, 2011.

--------------------------------------------------------------------------------

 

Schedule (Q)

MATERIAL CONTRACTS

Reference is made to the following documents and agreements:

1.     the Director and Officer Indemnification Agreements referred to in
Schedule (O);

2.     Earn-In Agreement and Option to Participate in Transandes Paraguay S.A.,
and supplement thereto, dated November 3, 2006, as amended on January 31, 2007,
among Transandes, Sebastian Reidl and Alex Hirtz ("R&H"), and Cue pursuant to
which Cue earned a 70% interest in Transandes upon satisfaction of the final
conditions therein in September 2008;

3.     Shareholders Agreement, dated November 3, 2006, between Transandes,
Sebastian Reidl and Alex Hirtz, and Cue;

4.     Operator's Agreement, dated November 3, 2006, between Transandes and Cue;

5.     Share Purchase Agreement, dated August 17, 2007, among Transandes, R&H
and Cue (the "Share Purchase Agreement") pursuant to which Cue acquired 30% of
the issued and outstanding shares of Transandes from R&H.

6.     Letter Agreement, dated effective December 21, 2011, between Cue and UEC;

7.     Letter Agreement, dated March 29, 2011, between Cue and Resinco
confirming that Resinco has provided Cue with CDN$100,000;

8.     Letter Agreement, dated April 12, 2011, between Cue and Resinco
confirming that Resinco has provided Cue with CDN$100,000;

9.     Letter Agreement, dated May 17, 2011, between Cue and Resinco confirming
that Resinco has provided Cue with CDN$50,000;

10.   Letter Agreement, dated March 23, 2011, between Cue and Red Rock
confirming that Red Rock has provided Cue with US$200,000;

11.   Letter Agreement, dated April 27, 2011, between Cue and Red Rock
confirming that Red Rock has provided Cue with US$70,000;

12.   Letter Agreement, dated June 17, 2011, between Cue and Red Rock confirming
that Red Rock has provided Cue with US$50,000;

13.   Loan Agreement, dated August 3, 2011, between Cue and Resinco (the "Loan
Payment"); and

14.   the following consulting agreements (collectively the "Management
Contracts"):

--------------------------------------------------------------------------------

a.     Consulting Agreement, dated May 1, 2010, between Cue and JRI Strategy
Consultants Inc.;

b.     Consulting Agreement, dated May 1, 2010, between Cue and TransPacific
Capital (Hong Kong) Limited; and

c.     Consulting Agreement, dated August 1, 2010, between Cue and Resinco.

Accrued Fees and Expenses

Target and the party or parties, as applicable, to certain Material Contracts of
Cue have agreed to the accrual of certain fees and expenses payable by Cue under
the applicable Material Contracts, which Material Contracts and the accrued fees
and expenses payable thereunder are more particularly set out below:

Party to Material Contract

Accrued Fees & Expenses as at January 31, 2012

JRI Strategy Consultants Inc.

$ 50,400

Resinco Capital Partners Inc.

$153,440

Resinco Capital Partners Inc. (reimbursables)

$50,666

TransPacific Capital (HK) Ltd.

$120,000

TransPacific Capital (HK) Ltd. - to options

$ 55,000

Tyson, Robert (expenses)

$4,483

Resinco Capital Partners Inc. (loan payment pursuant to Loan Agreement)

$ 260,000

Resinco Capital Partners Inc. (loan interest pursuant to Loan Agreement)

$9,610

Resinco Capital Partners Inc. (loan premium pursuant to Loan Agreement)

$25,000

Total

$728,599

--------------------------------------------------------------------------------

 

Schedule (V)

PROPERTY

Target Property and Target Mineral Rights

Yuty Property Concessions

Cue owns a 100% interest in the Yuty Project, a concession contract covering a
uranium exploration property in southern Paraguay. The concession contract for
exploration and exploitation was issued to Transandes in August 2008 by the
government of Paraguay, in the form of an Act of Congress, under Legislative
Branch Law #3575, valid for 20 years with subsequent five-year extensions.

The Yuty Project consists of four large mineral concessions covering a total
area of 230,992 ha in southeastern Paraguay. The Yuty Project is located
approximately 200 km southeast and east of Asunción, the Capital of Paraguay,
and is near the town of Yuty. It is situated within the Districts of Fulgencio
Yegros, Yuty and Leandro Oviedo, Departments of Cazaapá and Itapua. The four
Yuty Project Concessions consist of:

1.         Central Block (Block 1), covering 100,842 ha, the coordinates of
which are more particularly set out below:

Universal Transverse Mercator ("UTM") Coordinates

Corner

East

North

A

540,373

7,070,126

B

581,108

7,070,126

C

581,108

7,045,456

D

540,373

7,045,456

Topographic charts: Mbuyapey 5568; Caazapa 5668; Santa Rosa de Misiones 5667 and
General Artigas 5667.

2.         Block No. 2, situated east of the Central Block, covering 48,200 ha,
the coordinates of which are more particularly set out below:

--------------------------------------------------------------------------------

UTM Coordinates

Corner

East

North

A

576,000

7,070,126

B

576,000

7,086,000

C

596,000

7,086,000

D

596,000

7,070,126

E

590,000

7,070,126

F

590,000

7,052,000

G

581,108

7,052,000

H

581,108

7,070,126

Topographic charts: Caazapa 5568; General Artigas 5667.

3.         Block No. 3, covering 53,050 ha, the coordinates of which are more
particularly set out below:

UTM Coordinates

Corner

East

North

A

588,000

7,038,000

B

585,000

7,024,000

C

575,000

7,024,000

-

-

-

E

572,000

7,034,000

F

572,000

7,040,000

G

567,000

7,040,000

H

567,000

7,045,456

I

581,108

7,045,456

J

581,108

7,038,000

Topographic charts: Caazapa 5568; General Artigas 5667.

4.         Block No. 4, covering 28,900 ha, the coordinates of which are more
particularly set out below:

UTM Coordinates

Corner

East

North

A

581,000

7,086,000

B

576,000

7,086,000

C

576,000

7,082,000

-

-

-

E

553,000

7,124,000

F

563,000

7,124,000

G

563,000

7,095,500

H

566,000

7,095,500

I

566,000

7,088,000

J

581,000

7,088,000

Topographic charts: Caazapa 5568; General Artigas 5667.

--------------------------------------------------------------------------------

 

Schedule (V)(ii)

PERMITTED ENCUMBRANCES

1.     The Republic of Paraguay is entitled to receive a 2.5% royalty on any
future proceeds from production in the Yuty Project.

2.     Pursuant to the Share Purchase Agreement, R&H are entitled to each of the
following:

a.     a one-time payment of U.S.$0.15 per pound of uranium determined in a
pre-feasibility study on the Yuty Project, as more particularly set out in
Section 1.1.4 of the Share Purchase Agreement;

b.     a one-time payment of U.S.$0.06 per pound of uranium determined in one or
more feasibility studies on the Yuty Project payable on the commencement of
commercial production on the Yuty Project, as more particularly set out in
Section 1.1.4 of the Share Purchase Agreement; and

c.     a 2.5% royalty on any future proceeds from production in the Yuty Project
less any royalties or taxes payable to the Republic of Paraguay, as more
particularly set out in Schedule "A" to the Share Purchase Agreement.

 

--------------------------------------------------------------------------------

Schedule (AA)

ENVIRONMENTAL MATTERS

Nil.

--------------------------------------------------------------------------------

 

Schedule (BB)

INSURANCE

Reference is made the following insurance policy of Cue:

1.     Directors and Officers Liability Insurance Policy provided by Great
American Insurance Group for the term of November 3, 2010 until February 3,
2012.

--------------------------------------------------------------------------------

 

Schedule (GG)

BROKERS

As at January 20, 2012, Cue is in the process of engaging the Financial Advisor
and fees are expected to be approximately $22,000.

-- End of Target Disclosure Letter --

__________