Nuclear Regulatory
Consulting and Strategic Advisory
Agreement

by and between

The Federal Authority for
Nuclear Regulation

and

THORIUM POWER, LTD.

August 1, 2008
 

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TABLE OF CONTENTS
 
1
CONSULTING AND STRATEGIC ADVISORY SERVICES
7
     
1.1
Thorium Power Services
7
     
1.2
Thorium Power Resources
7
     
1.3
FANR Resources and Support
8
     
1.4
Compensation
8
     
1.5
Quarterly Reviews
8
     
2
STAFF MANAGEMENT
9
     
2.1
Objective
9
     
2.2
Recruiting of personnel
9
     
2.3
Transfer of Personnel
9
     
2.4
Non-Solicitation
10
     
3
TERM AND TERMINATION
10
     
3.1
Term
10
     
3.2
Termination for Default
10
     
3.3
Termination for Convenience
11
     
4
CONFIDENTIALITY
11
     
4.1
Definition of Confidential Information
11
     
4.2
Obligation of Confidentiality and Non-Use
11
     
4.3
Obligation to Inform
12
     
4.4
Exceptions to Confidential Information
12
     
4.5
Disclosure to Governmental Authorities
12
     
4.6
Return or Destruction of Confidential Information
12

 
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5
INTELLECTUAL PROPERTY
13
     
5.1
Ownership of Intellectual Property
13
     
5.2
Further Assurances
13
     
6
LIMITED WARRANTY AND DISCLAIMER
13
     
7
DISCLAIMERS AND LIMITATIONS OF LIABILITY
14
     
7.1
Disclaimer of Consequential Damages
14
     
7.2
Liability Cap
14
     
7.3
Applicability
14
     
7.4
Acknowledgement
14
     
8
INDEMNIFICATION
15
     
9
INDEPENDENT CONTRACTOR STATUS
15
     
10
COMPLIANCE WITH LAWS
16
     
11
NOTICES
16
     
12
CHOICE OF LAW AND DISPUTE RESOLUTION
17
     
12.1
Governing Law.
17
     
12.2
Mediation of Disputes.
17
     
12.3
Resolution of Disputes.
17
     
12.4
Decision.
18
     
12.5
Discovery.
18
     
12.6
Submission to Jurisdiction.
18
     
12.7
Fees; Expenses.
18
     
12.8
Amendment to LCIA Rules
18
     
12.9
Agents for Service of Process
19

 
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13
NATURE OF AGREEMENT
19
     
14
FORCE MAJEURE
19
     
15
INSURANCE
20
     
16
LICENSES AND TAXES
20
     
17
QUALITY ASSURANCE PROCEDURES
20
     
17.1
Subcontractor Quality Assurance Procedures
21
     
17.2
Non-conformances
21
     
17.3
Adequacy of Methods and Equipment
21
     
18
LABOR AND IMMIGRATION LAWS
21
     
19
TRAINING OF EMPLOYEES
21
     
20
SAFETY CULTURE
22
     
21
CODE OF ETHICS
22
     
22
SAFEGUARDS INFORMATION
23
     
23
NUCLEAR LIABILITY PROTECTION
23
     
24
MISCELLANEOUS
23
     
24.1
Assignment
23
     
24.2
No Third Party Beneficiaries
24
     
24.3
Survival
24
     
24.4
Headings
24
     
24.5
Amendments or Modifications
24
     
24.6
Reproduction of Documents
24
     
24.7
Severability
24

 
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24.8
Contract Construction
25
     
24.9
Entire Agreement
25
     
24.10
Counterparts
25
ATTACHMENT A - STATEMENT OF WORK
27
ATTACHMENT B - THORIUM POWER RESOURCES
28
ATTACHMENT C – FANR SUPPORT
29
ATTACHMENT D – COMPENSATION
30

 
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CONSULTING AND STRATEGIC ADVISORY AGREEMENT

WITH

The Federal Authority for Nuclear Regulation

THIS CONSULTING AND STRATEGIC ADVISORY AGREEMENT, including ATTACHMENTS A
through D, that are incorporated by reference, (this “Agreement”) is made as of
August 1, 2008 (the “Effective Date”), by and between Thorium Power, Ltd., a
Nevada corporation, having its principal offices at 8300 Greensboro Drive, Suite
800, McLean, VA 22102, USA (“Thorium Power”), and the Federal Authority for
Nuclear Regulation, an entity of the United Arab Emirates (“FANR”). The parties
are individually referred to as the “Party” and collectively as the “Parties.”

RECITALS

A.
FANR is in the process of being formed to establish and manage nuclear
regulatory activities in the UAE;

B.
Thorium Power has been providing consulting and strategic advisory services to
the Executive Affairs Authority of Abu Dhabi for the evaluation and development
of a nuclear energy program in the United Arab Emirates (“UAE”) and
corresponding establishment of a nuclear regulatory authority in the UAE under
two previous agreements (listed in Recitals C and D below), entered into with
the Executive Affairs Authority of Abu Dhabi (“EAA”);

C.
FANR wishes to implement the “Roadmap” that was provided under the Professional
Services Agreement of 30 November 2007 with the EAA and prepare for the
continued evaluation of, and, if such evaluation is successful, the
establishment of a nuclear regulatory authority in the UAE;

D.
On 17 March 2008, EAA and Thorium Power entered into Amendment Number 1 to the
Professional Services Agreement of 30 November, 2007, to provide for early start
of implementation of certain high-priority activities that were identified in
the Roadmap (“Quick-Start Amendment”);

E.
Thorium Power maintains access to specialized expertise for providing consulting
and strategic advisory services to FANR for the purpose of evaluating and, if
relevant, the establishment of a nuclear regulatory authority in the UAE; and

F.
FANR desires to obtain Thorium Power’s services as an advisor in the design,
implementation and management of the regulatory authority, and to support
certain project management and execution activities related to developing the
program as described in the Roadmap, where FANR forms a key part of the UAE
Nuclear Energy Program Implementation Organization (“NEPIO”).

NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and intending to be legally bound hereby, Thorium Power and FANR agree as
follows:
 
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1 Consulting and Strategic Advisory Services
 

1.1
Thorium Power Services 

 
Thorium Power shall provide the following services to FANR:
 

 
·
Act as strategic advisor to FANR and other UAE Government entities designated by
FANR on civilian nuclear regulatory and energy matters, based on priorities set
by FANR from time to time.

 

 
·
Support the creation of FANR and its ongoing project management & project
execution activities in relation to the evaluation and, if relevant development
of the nuclear energy program of the UAE, where FANR has the responsibility to
oversee nuclear regulatory activities in the UAE and is a key part of NEPIO. The
services will generally be guided by the Roadmap with subsequent modifications
of implementation objectives as agreed from time to time between the Parties.

 
A detailed description of the services (‘Services”) is provided in ATTACHMENT A
- STATEMENT OF WORK, which may be modified from time to time by agreement
between the Parties as described below.
 
Thorium Power shall determine, in its best judgment and in consultation with
FANR, the method and manner of providing its Services towards meeting the
program objectives of FANR and plans outlined in the Roadmap.
 

1.2
Thorium Power Resources

 
In order to provide the Services, Thorium Power shall provide the resources as
described in ATTACHMENT B-THORIUM POWER RESOURCES,, which may be amended from
time to time by agreement between the Parties as described in Section 1.5
(Quarterly Reviews).
 
In the case FANR wishes to increase the amount of Services and corresponding
resources provided by Thorium Power, the Parties will agree on the time plan for
such changes, and Thorium Power will use its best efforts to provide the
resources according to the plan.
 
In the case FANR wishes to reduce the amount of Services and corresponding
resources provided by Thorium, FANR shall give Thorium Power four (4) weeks
notice to this effect, and shall pay Thorium Power at the prevailing rate for
Services and corresponding expenses during such notice period. In the case such
reduction of resources during any consecutive three (3) month period exceeds
fifty percent (50%) of the prevailing total resource billings for Thorium Power
Resources at the beginning of the period, FANR shall compensate Thorium Power
for the group of resources corresponding to such reduction in the same manner as
described in Section 3.3 (Termination for Convenience); provided however, that
no such “Termination for Convenience” compensation will be required in the case
that Thorium Power’s resources providing Services do not exceed five (5)
full-time equivalents.
 
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1.3
FANR Resources and Support 

 
FANR will use its reasonable endeavours to provide the resources, facilitate the
provision of resources from other UAE Government entities, perform the tasks and
provide the support to Thorium Power as described in ATTACHMENT C—FANR SUPPORT,
which may be amended from time to time by agreement between the Parties as
described in Section 1.5 (Quarterly Reviews). Provided that breach of this
obligation shall only entitle Thorium Power to relief from its obligations to
perform the Services to the extent such obligations cannot be performed as a
result of such breach and it shall not be entitled to any other remedies or
compensation.
 

1.4
Compensation

 
Thorium Power shall receive compensation and invoice FANR in accordance
with ATTACHMENT D- COMPENSATION
 

1.5
Quarterly Reviews

 
Thorium Power will plan and facilitate quarterly reviews of the activities of
the Parties under this Agreement, where the Parties will:
 

 
·
Meet at a location agreed by the Parties (in Abu Dhabi unless agreed otherwise
by the Parties).

 

 
·
Review the performance of FANR departments, Thorium Power, other key vendors and
other entities as relevant to the activities of the Parties under this
Agreement, in relation to the program schedule, budget and other program
objectives & policies; and Thorium Power shall prepare a written report in
advance of the review on these topics.

 

 
·
Modify, as appropriate and as agreed between, the Parties, the program schedule,
budget or other objectives, and correspondingly agree on updates to the
Services.

 

 
·
Review the staffing needs for the activities of the Parties under this Agreement
(including Thorium Power’s resources) and agree on staffing changes as described
in Article 2 (Staff Management).

 

 
·
Review proposals for new or modified 3rd party service providers and equipment
vendors.

 

 
·
Update, as appropriate and as agreed between the Parties, the information
included in Attachments A through D, as well as the names of individuals
excluded from transfer to ENEC under the provisions of Clause 2.3 of this
Agreement.

8

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2 Staff Management 
 
2.1 Objective
 
The overall objective of this Agreement is the development of an exemplary
nuclear regulatory authority in the UAE according to the plans outlined in the
Roadmap. Thorium Power and FANR will cooperate to balance the need for speed of
implementing the nuclear energy program in the UAE, the need for experienced
experts, the need to develop a cadre of domestic nuclear regulatory experts over
time, and the need to manage resource costs.
 
2.2 Recruiting of personnel 
 
Thorium Power will support FANR in direct hiring of nuclear related personnel by
FANR.
 
2.3 Transfer of Personnel
 
As part of managing the staffing for the nuclear regulatory activities in the
UAE, Thorium Power shall, if and to the extent directed by FANR, over time,
provide for a structured transfer of certain Thorium Power staff from its
payroll into a direct contractual relationship with FANR. The Parties shall
discuss and agree on the need for such transfers during the regular program
reviews described in Section 1.5 (Quarterly Reviews).
 
If, from time to time, FANR directs that there is to be the transfer of any
staff in accordance with this Section 2.3, the provisions for the transfer of
such staff from Thorium Power’s payroll to FANR’s payroll shall be as follows:
 

·
Thorium Power shall cooperate in the transfer of eligible staff.

 

·
Employment or consulting agreements between Thorium Power and transferring
personnel shall be modified to the extent agreed between FANR and the relevant
personnel immediately prior to transfer and Thorium Power shall waive applicable
portions of non-compete provisions to facilitate the provisions of this
Agreement.

 

·
No Thorium Power employees shall be eligible for transfer within twelve (12)
months of the Effective Date. For the avoidance of doubt this does not apply to
consultants to or agents of Thorium Power.

 

·
Any employees of Thorium Power or its subsidiaries as set out in the side letter
dated July 7, 2008 and signed by the President of Thorium Power shall only be
eligible for transfer with the approval of Thorium Power.

 

·
FANR shall provide three (3) months notice (“Transfer Notice Period”) to Thorium
Power of the intention to hire Thorium Power staff directly.

 

·
Following the transfer notice, FANR shall continue to pay Thorium Power for the
resource during the Transfer Notice Period at the prevailing rate at the time of
notice.

 
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·
Upon the effective transfer from Thorium Power’s payroll, FANR shall pay Thorium
Power a transfer fee of thirty three percent (33%) of the individual’s new first
twelve (12) months cash compensation (including salary and bonus target), plus
reasonable costs as agreed to by the Parties to cover Thorium Power’s
recruiting, training, administrative and overhead expenses.

 

·
No more than twenty five percent (25%) of Thorium Power’s employees as committed
to FANR under this Agreement during any 12 month period can be transferred over
the subsequent twelve (12) month period. For the avoidance of doubt, this
paragraph does not apply to consultants to or agents of Thorium Power.

 

·
In order to maintain stability in the project, FANR shall not discuss offers of
employment, directly or indirectly, with Thorium Power employees without prior
consultation with Thorium Power.

 

2.4
Non-Solicitation 

 
Except as provided in this Article 2 (Staff Management), during the period
commencing on the date hereof and ending one (1) year after the termination of
Thorium Power’s engagement under this Agreement or any extension thereof (the
“Restricted Period”), FANR and its affiliates shall not directly or indirectly
induce, solicit, persuade or entice or attempt to induce, solicit, persuade or
entice any of the employees, of Thorium Power that were directly engaged in the
provision of the Services to FANR to leave the employment of Thorium Power. For
the avoidance of doubt, this provision does not apply in relation to any
consultants to or agents of Thorium Power.
 
3 Term and Termination
 

3.1
Term 

 
The term of this Agreement shall be five (5) years after the Effective Date
unless earlier terminated as described below. Provided, however, that absent a
termination notice from either Party, this Agreement shall be extended for one
(1) year on the fourth (4th) anniversary of the Effective Date and every
anniversary date thereafter such that the term of the Agreement will always have
at least one (1) full year to run.

3.2
Termination for Default 

 
Subject to Section 1.2, this Agreement may be terminated (i) by either Party for
the other Party’s default in materially complying with the provisions of this
Agreement, and (ii) by FANR for Thorium Power’s default in materially complying
with the provisions of the Nuclear Energy Program Consulting and Strategic
Advisory Agreement between Thorium Power and the Emirates Nuclear Energy
Corporation (“ENEC”) of even date hereto, by giving written notice of the
default to the other Party and by allowing the other Party thirty (30) calendar
days to cure any such default, if curable. If the default has not been cured
within the period allowed for curing the default, this Agreement may be
terminated with thirty (30) calendar days written notice. Upon termination of
this Agreement for cause by either Party, FANR shall only be required to pay
Thorium Power for Services performed and expenses incurred before the effective
date of such termination.
 
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3.3
Termination for Convenience 

 
Subject to Article 14, this Agreement may be terminated by FANR for its
convenience by giving ninety (90) calendar days’ prior written notice to Thorium
Power. During that period Thorium Power shall work with FANR to make an orderly
exit. Notwithstanding any limitation on consequential damages in Section 7.1
(Disclaimer of Consequential Damages), upon such termination, FANR shall
compensate Thorium Power for (i) all Services performed and expenses before the
effective date of such termination and (ii) an additional wind-down fee which
shall be the sum of the compensation for a period of four (4) weeks for all
Thorium Power full time equivalent resources working under this Agreement on the
date of termination, as compensation for Thorium Power’s expenses in connection
with the termination of infrastructure contracts and other contracts benefiting
the Services which may not be immediately cancellable. Such compensation shall
be an exclusive remedy and shall be in full and final settlement of all claims
arising from such termination and shall exclude all other liability of whatever
nature arising in connection with the termination.
 
4 Confidentiality
 
4.1   Definition of Confidential Information
 
The term “Confidential Information” shall mean this Agreement and all trade
secrets, data, know-how, data or other information and materials, business
strategies, plans and procedures, business information, proprietary information,
of a Party, the UAE, any Emirate of the UAE or any sub-division or governmental
entity (including any regulator even where independent) of any of the foregoing,
as well as any other information and materials that are deemed confidential or
proprietary to or by a Party and are appropriately identified and designated as
such by that Party. All information and documents of any nature provided to
Thorium Power (whether before or after the Effective Date) by or on behalf of
the EAA, FANR, ENEC, any other governmental entity, agency, regulator or
corporation of the UAE or Abu Dhabi or any person owned or controlled by any of
the foregoing (including all information, documents and advice provided to any
of those entities by any legal adviser to any of those entities which is also
received by Thorium Power) is hereby designated as Confidential Information by
FANR.
 
4.2   Obligation of Confidentiality and Non-Use
 
Thorium Power acknowledges and agrees that it owes a duty to FANR maintain in
strict confidence all Confidential Information (as defined above) it has
received or learned, or, which it has developed for FANR, during the term of
this Agreement. Thorium Power shall take all steps reasonably necessary to
prevent the unauthorized disclosure or dissemination of such Confidential
Information for any reason and to any person or entity, except with the prior
written consent of FANR. In addition, Thorium Power shall not use or copy any
such Confidential Information, or authorize or permit others to use any such
Confidential Information, for any purposes other than in connection with
performance of the Services. Notwithstanding the foregoing, Thorium Power may
disclose such Confidential Information to those of its officers, employees, and
consultants of Thorium Power (each, a “Representative,” and collectively,
“Representatives”) who have a need to know such information in connection with
performance of the Services under this Agreement provided that each
Representative, prior to such disclosure, is informed by Thorium Power of the
confidential nature of such information and of the confidentiality obligations
imposed on Thorium Power under this Agreement. Thorium Power shall be
responsible for any and all breaches of the provisions of this Article 4
(Confidentiality) by its Representatives. As used herein, “steps reasonably
necessary” means the steps that a Party takes to protect its own, similarly
confidential or proprietary information, which steps shall not be less than a
reasonable standard of care.
 
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4.3          Obligation to Inform
 
Upon learning of any actual or threatened unauthorized disclosure or use of
Confidential Information, Thorium Power shall provide FANR with notice thereof
and cooperate with FANR in efforts to prevent or remediate such disclosure.
 
4.4          Exceptions to Confidential Information 
 
Notwithstanding the foregoing paragraph, “Confidential Information” shall not
include any information that: (i) at the time of disclosure is in the public
domain, or after disclosure becomes, through no fault of the receiving Party,
part of the public domain as evidenced by generally available documents or
publications; (ii) was or is supplied to the receiving Party by a third party as
a matter of right and which is not subject to any restriction as to confidential
treatment on the part of said third party; (iii) was available to the receiving
Party on a non-confidential basis prior to its disclosure to the receiving Party
by the disclosing Party; or (iv) was or is independently developed by the
receiving Party or its Representatives without use of Confidential Information.
 
4.5          Disclosure to Governmental Authorities 
 
Thorium Power shall immediately notify FANR of any request by any third person,
court, governmental or administrative body that Confidential Information be
disclosed. The Parties shall cooperate in all efforts to protect the
Confidential Information from disclosure and lessen the effects of such
disclosure, consistent with applicable laws.
 
4.6         Return or Destruction of Confidential Information 
 
Upon the termination or expiration of this Agreement, or at any other time upon
the written request of FANR, Thorium Power shall promptly return to FANR (or if
FANR so request destroy) all Confidential Information (or, where the request is
limited to specific information, such of it as may be specified in the request)
in Thorium Power's or its staff's possession or control, together with all
copies, summaries and analyses thereof, regardless of the format in which such
information exists or is stored and shall procure the return or destruction of
such information from any person to whom it has disclosed that confidential
information. Within five (5) business days following the expiration or earlier
termination of this Agreement, or any written request as set forth above,
Thorium Power shall provide the other with a written certification of its
compliance with the provisions of this Section 4.6 (Return or Destruction of
Confidential Information).
 
4.7          No waiver
 
Thorium Power acknowledges that information and documents provided to it by any
entity which contains advice from legal advisers to the EAA, ENEC, FANR, any
other governmental entity, agency, regulator or corporation of the UAE or Abu
Dhabi or any person owned or controlled by any of the foregoing is subject to
legal professional privilege and the benefit of that privileged advice belongs
to the relevant entity and no disclosure to Thorium Power or by Thorium Power
shall be considered to be a waiver by the EAA, ENEC, FANR, any other
governmental entity, agency, regulator or corporation of the UAE or Abu Dhabi or
any person owned or controlled by any of the foregoing of such legal
professional privilege or any other right of privilege which it may have or be
able to assert in respect of that information.
 
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5 Intellectual Property
 
5.1          Ownership of Intellectual Property 
 
All inventions, original works of authorship, findings, conclusions, data,
discoveries, developments, concepts, improvements, trade secrets, techniques,
processes, methodologies and know-how, whether or not patentable or registerable
under copyright or similar laws, which the Parties may solely or jointly
conceive or develop or reduce to practice, or cause to be conceived or developed
or reduced to practice, in the performance of the Services under this Agreement
(collectively, the “Inventions”) as well as any and all intellectual property
rights inherent in the Inventions and appurtenant thereto including, without
limitation, all patent rights, copyrights, trademarks, know-how and trade
secrets (collectively, “Intellectual Property Rights”), shall become the sole
property of FANR.
 
5.2          Further Assurances 
 
Upon the request and at the expense of the other Party, any and all instruments
and documents shall be executed and delivered and any other acts shall be taken
as may be necessary or desirable to ensure that the Inventions and the
Intellectual Property Rights are the sole property of FANR or to enable FANR to
secure its rights in the Inventions and the Intellectual Property Rights in any
and all jurisdictions.
 
6 Limited Warranty and Disclaimer 
 
THORIUM POWER WARRANTS TO FANR THAT (A) THE SERVICES WILL BE PERFORMED BY
SUITABLY QUALIFIED AND EXPERIENCED PERSONNEL AS SPECIFIED IN THIS AGREEMENT TO
RECOGNIZED NUCLEAR INDUSTRY STANDARDS AND WITH ALL REASONABLE SKILL AND CARE;
(B) IN CONDUCTING THE SERVICES AND CREATING THE DELIVERABLES THORIUM POWER WILL
NOT INFRINGE THE COPYRIGHT OR OTHER INTELLECTUAL PROPERTY RIGHTS OR
MISAPPROPRIATE OR MISUSE THE CONFIDENTIAL INFORMATION OF ANY THIRD PARTY.
THORIUM POWER WARRANTS TO USE ITS BEST EFFORTS TO ENSURE THAT ANY RESULTS,
DELIVERABLES OR TECHNICAL DATA PROVIDED WILL BE ERROR FREE, CONFORM TO ANY
RELIABILITY OR PERFORMANCE STANDARDS AND WILL MEET FANR’S NEEDS AND OBJECTIVES.
THESE WARRANTIES ARE THE ONLY WARRANTIES GIVEN BY THORIUM POWER. THORIUM POWER
HEREBY EXPRESSLY EXCLUDES AND DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS,
IMPLIED OR STATUTORY, REGARDING THE SERVICES OR THE DELIVERABLES, INCLUDING,
WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY, OF FITNESS FOR A
PARTICULAR PURPOSE, AND ANY WARRANTY OR GUARANTY OF ABSENCE OF HIDDEN DEFECTS,
ANY OTHER WARRANTY OF NON-INFRINGEMENT, AND ANY WARRANTY THAT MAY ARISE BY
REASON OF USAGE OF TRADE, CUSTOM OR COURSE OF DEALING.
 
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The compensation for any rework shall be as stated in ATTACHMENT D-
COMPENSATION.
 
7 Disclaimers and Limitations of Liability
 
7.1          Disclaimer of Consequential Damages 
 
Neither Party shall be liable to the other Party hereto for any consequential,
incidental, indirect, special, punitive or exemplary damages suffered or
incurred by such other Party in connection with a breach or alleged breach of
this Agreement, even if such other Party has been advised of the possibility of
such damages. Consequential damages shall include, without limitation,
opportunity costs, loss of use of facilities or other assets, claims of
subcontractors, lost profits, lost savings, lost business or lost goodwill.
 
7.2          Liability Cap 
 
In no event shall either Party’s aggregate cumulative liability to the other
Party arising out of or relating to this Agreement, the Services of the
Deliverable exceed 2.5 times the cumulative Professional Fees payable to and
Expenses incurred by Thorium Power for the Services, as specified in ATTACHMENT
D-COMPENSATION .
 
7.3         Applicability 
 
The provisions of this Article 7 (Disclaimers and Limitations of Liability)
shall apply to the full extent permitted by law whether such a claim is based on
tort (regardless of the degree of fault or negligence), warranty, breach of
contract, strict liability or otherwise, and shall survive the cancellation,
expiration or termination of this Agreement, as well as the fulfilment of the
obligations of the parties hereunder and shall apply notwithstanding any other
provisions of this Agreement.
 
7.4          Acknowledgement 
 
The Parties, having been advised by legal counsel on all matters relating to
this Agreement, acknowledge and agree that they are sophisticated parties in all
matters relating to this Agreement and that the foregoing disclaimer and
limitation of liability represent bargained-for allocations of risk, and that
the economics, terms and conditions of this Agreement reflect such allocations.
 
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8 Indemnification
 
FANR agrees to indemnify, defend, and hold harmless Thorium Power and its
officers, directors, employees and agents (hereinafter collectively
“Indemnitees”) against and from any and all claims, demands, suits, costs and
damages of every kind and description including reasonable attorneys' fees
and/or litigation expenses in any jurisdiction, brought or made against any of
the Indemnitees by third parties resulting from Thorium Power’s proper
performance of this Agreement or Thorium Power entering into this Agreement,
FANR or UAE’s future nuclear energy program provided that this indemnity:
 

 
(a)
shall not apply to any claims, demands, suits, costs or damages which arise
directly or indirectly out of the gross negligence of any Indemnitee, the wilful
default of any Indemnitee or the breach of this Agreement by Thorium Power;

 

 
(b)
shall not apply to any claims, demands, suits, costs or damages which arise
directly or indirectly out of any Nuclear Damage caused by a nuclear reactor
outside of the UAE;

 

 
(c)
shall not apply to any claims, demands, suits, costs or damages to the extent
that Thorium Power is insured to cover the costs to it of such claims, demands,
suits, costs or damages, even in circumstances when the relevant insurance
policy is taken out by FANR or a third party without the knowledge of Thorium
Power; and

 

 
(d)
notwithstanding Section 24.3, shall cease to apply upon any termination of this
Agreement arising as a result of a breach of this Agreement by Thorium Power.

 
9 Independent Contractor Status
 
This Agreement does not create a joint venture, partnership or any other type of
legal entity among the Parties and in no event shall the Parties represent to
other persons that a joint venture, partnership, or other type of business
entity has been formed. In making and performing this Agreement, the Parties
hereto are acting and shall act as independent contractors. Neither Party is,
nor shall be deemed to be, an agent, legal representative, joint venturer or
partner of the other Party for any purpose. Neither Party has the authority
under this Agreement to represent itself as having authority to obligate the
other Party to act or refrain from acting and accordingly undetakes not to
represent that it has such authority.
 
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10 Compliance with Laws
 
Thorium Power shall comply, and shall be responsible for ensuring that their
Representatives (as defined in Section 4.1 (Definition of Confidential
Information) comply, with all applicable laws including the laws of Abu Dhabi
and the UAE pursuant to this Agreement. Without limiting the generality of the
foregoing, Thorium Power shall not take any action, and it will ensure that its
Representatives take no action, that would violate any anti-bribery and related
prohibitions implemented under the Organization for Economic Cooperation and
Development Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions, the Organization of American States
Inter-American Convention Against Corruption, Council of Europe Criminal Law
Convention on Corruption, the United Nations Convention Against Corruption, the
African Union Convention on Preventing and Combating Corruption, the United
States Foreign Corrupt Practices Act of 1977, as amended, or any other similar
United States or foreign law, statute, rule or regulation, or any other similar
laws of any country that would create any liability for Thorium Power or FANR
under any such law. The Parties further understand that materials and
information resulting from the performance of this Agreement may be subject to
United States and UAE export control laws and regulations and that Thorium Power
is responsible for its compliance with such laws in its activities.
 
11 Notices
 
Any notices required or permitted to be sent hereunder shall be delivered
personally or mailed, certified mail, return receipt requested, or delivered by
courier service to the following addresses, or such other address as any Party
hereto designates by written notice to the other Party. Provided, however, a
transmission per telefax or email shall be sufficient and shall be deemed to be
properly served when the telefax or email is received if the signed original
notice is received by the recipient within seven (7) calendar days thereafter.
 
IF TO THORIUM POWER:

Thorium Power, Ltd.
8300 Greensboro Drive, Suite 800
McLean, VA 22102 USA
United States of America
Attention: Erik Hällström
Chief Operating Officer
Thorium Power, Ltd.
Tel: +1.703.918.4923
Fax +1.703.935.1490
Email: ehallstrom@thoriumpower.com

IF TO FANR:

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[Address]
Attention: [name, title]

Telephone:
Fax:
E-Mail: 

12 Choice of Law and Dispute Resolution
 
12.1 Governing Law. 
 
This Agreement shall be governed by, and construed in accordance with the laws
of England and Wales.
 
12.2 Mediation of Disputes. 
 
With respect to any disputes and controversies of any kind or nature arising
under or in connection with this Agreement, the Parties agree to submit such
dispute or controversy to mediation for a sixty (60) calendar day period (such
period commencing on the date the mediator is appointed), and agree to make good
faith efforts to resolve such dispute or controversy in meditation. If the
dispute or controversy is not resolved in the above-described sixty (60)
calendar day period, neither Party shall be obligated to continue in mediation.
Such mediation shall be held with an experienced mediator, who shall be selected
by agreement of the Parties. In the event the Parties are unable to agree upon
the mediator, within thirty (30) calendar days of a written request by either
Party to do so, then at the request of either Party, the London Court of
International Arbitration shall appoint the mediator. In the event that the
Parties are unable to resolve any dispute or controversy in mediation, then upon
the expiration of the sixty (60) calendar day period, from the date of agreement
or appointment of the mediator (as appropriate) either Party may submit any such
dispute or controversy to arbitration in accordance with the provisions of this
Article 12 (Choice of Law and Dispute Resolution).
 
12.3 Resolution of Disputes.
 
Any dispute arising out of or in connection with this Agreement including any
question regarding its existence, validity or termination, shall be referred to
and finally resolved by arbitration under the London Court of International
Arbitration (LCIA) Rules, which are deemed to be incorporated by reference into
this Article 12 (Choice of Law and Dispute Resolution). The number of
arbitrators shall be three (3).The claimant shall nominate one arbitrator. The
respondent shall nominate one arbitrator. The third arbitrator who shall be the
chairman of the tribunal shall be selected by the LCIA Court. The seat, or legal
place, of arbitration shall be London, United Kingdom. The language to be used
in the arbitral proceedings shall be English. The arbitrators shall not alter,
amend or modify the terms and conditions of this Agreement but shall consider
the pertinent facts and circumstances and be guided by the terms and conditions
of this Agreement and applicable law which shall be binding upon them in
resolving any dispute or controversy hereunder. In no event may the arbitrators
award punitive or consequential damages. If a solution is not found in the terms
of this Agreement, the arbitrators shall be guided by the substantive law of
England and Wales, excluding all conflicts of law rules. The decision by the
arbitrators shall be final and binding upon the Parties, their successors, and
assigns and the Parties shall comply with such decision in good faith. Each
Party hereby submits itself to the jurisdiction of the courts of the place where
the arbitration is held, but only for the entry of judgment with respect to the
decision of the arbitrator hereunder. Notwithstanding the foregoing, judgment
upon the award may be entered in any court where the arbitration takes place, or
any court of competent jurisdiction.
 
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12.4 Decision. 
 
The arbitrators’ award shall include a reasoned basis for the award. The
arbitrators will not have power to award damages in connection with any dispute
in excess of actual compensatory damages and will not multiply actual damages or
award consequential or punitive damages or award any other damages that are
excluded under the provisions of Article 7 (Disclaimer and Limitations of
Liability).
 
12.5 Discovery. 
 
In addition to discovery that may be permitted under the LCIA Rules of
Arbitration, the Parties shall be permitted limited discovery of facts,
documents, testimony and other evidence. Once the Parties have provided notice
to one another of the claims, matters and issues in dispute, the Parties may
take discovery in the following manner:
 
(1) The Parties may request discovery as provided in the International Bar
Association Rules for the Taking of Evidence in International Arbitration.
Discovery requests may be made after the three-arbitrator panel has been
appointed.
 
(2) The arbitration panel shall resolve any disputes relating to discovery.
 
12.6 Submission to Jurisdiction. 
 
For purposes of (i) compelling arbitration under this Agreement or (ii) entering
judgment on any arbitration award under this Agreement or for any other
proceeding relating to the arbitration, each of the Parties hereby: (A)
irrevocably submits to the non-exclusive jurisdiction of the English Courts and
(B) irrevocably waives, to the fullest extent permitted by applicable law, any
objection it may now or hereafter have to such jurisdiction.
 
12.7 Fees; Expenses. 
 
The Parties shall equally advance the fees and expenses of the LCIA and the
arbitrators. The arbitrators in their award shall apportion such fees and
expense between the Parties in such amounts as the arbitrators determine is
appropriate.
 
12.8 Amendment to LCIA Rules
 
The LCIA Rules shall be amended as follows:
 
(1) the Request for Arbitration under Article 1 of the Rules shall also contain
the Statement of Case provided for by Article 15.2 of the Rules; the Request
shall be accompanied by the documents required by Article 15.6 of the Rules;
 
(2) the tribunal shall conduct proceedings on the basis of documents and other
materials only, unless the Tribunal, in its absolute discretion, decides that it
is necessary to hold an oral hearing, and Article 19(1) of the Rules shall be
amended accordingly;
 
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(3) if at any point in the proceedings any party fails for any reason to avail
itself of the opportunity to present its case in accordance with the Rules (as
amended by this clause) or as directed by the tribunal, the tribunal shall
proceed with the arbitration and make an award.
 
12.9 Agents for Service of Process
 
Without prejudice to any other method of service allowed by law, Thorium Power
appoints Pillsbury Winthrop Shaw Pittman LLP, Tower 42, Level 23, 25 Old Broad
Street London, EC2N 1HQ, United Kingdom and FANR appoints [ ] as their
respective agents for service or process in any proceedings before the English
Courts. If any person appointed as process agents is unable for any reason to
act, the party which appointed the process agent, must immediately appoint
another agent and failing such appointment within fourteen (14) days of the
event taking place, the other party may appoint the agent. Failure by a process
agent to notify a party of any process will not invalidate the relevant
proceedings.
 
13 Nature of Agreement
 
Cognizant of the fact that this Agreement is subject to civil and commercial law
with respect to its obligations hereunder, and the execution, delivery and
performance of this Agreement constitute private and commercial acts rather than
public or governmental acts. The Parties hereby explicitly accept the
jurisdiction of the LCIA to resolve any dispute.
 
14 Force Majeure
 
Neither Party shall be liable to the other for delays or failures in performing
its obligations under this Agreement due directly or indirectly to any act
(“Force Majeure”), comprising (i) acts of God; (ii) acts, including failures to
act or delays in acting, of any governmental authority (de jure or de facto),
(iii) accidents or disruptions such as wars (declared or undeclared), riots,
revolutions, acts of terrorism, world disturbances, fires, floods, earthquakes,
storms, sabotage, nuclear incidents, epidemics; (iv) strikes, labor disputes,
labor difficulties or (v) any event not related to the performance of the
Services which is beyond its reasonable control. The foregoing shall apply even
though any of such causes exists at the time of this Agreement or occurs after a
Party’s performance is delayed or otherwise hindered for other causes. In the
event of any delay or failure excused by this Article 14 (Force Majeure), the
Party whose performance is delayed shall as soon as practical (1) notify the
other Party, (2) continue to perform the Services to the extent it is able to do
so; (3) take all reasonable steps to minimize the impact of the event of force
majeure on the FANR including the impact of any delay and rectify any failure to
perform and (4) specify the revised performance date. In the event of such
delay, the time of performance shall be extended for a period equal to the time
lost by reason of the delay. If the delay exists for more than ninety (90)
calendar days and Thorium Power is the affected party, FANR shall be entitled to
terminate this Agreement for convenience in accordance with Section 3.3
(Termination for Convenience) provided that, for these purposes, the reference
to "ninety (90) calendar days'" in Section 3.3 shall be consider to be a
reference to "one (1) days'".
 
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15 Insurance
 
Thorium Power shall, in respect of its liabilities under this Agreement, take
out and maintain on and from the Effective Date until the date which is 12
months after the expiry or termination of this Agreement professional indemnity
insurance with first class insurers of sound repute and financial standing, on
an each and every claim basis, for an amount equal to US$5,000,000 per claim.
Thorium Power shall ensure that FANR is named as a co-insured on each policy of
professional indemnity insurance referred to above and shall ensure that each
such policy contains endorsements which ensure that: (a) FANR's interest in any
such policy shall not be terminated, vitiated, abrogated or otherwise adversely
affected as a result of any action or inaction (including any non-disclosure) by
any other insured; (b) FANR is the loss payee in respect of any claims made by
FANR on such policies; and (c) there is a waiver of subrogation provision
benefiting FANR. Thorium Power will on each renewal or replacement of any policy
referred to above provide evidence (in form and substance reasonably
satisfactory to FANR) of its compliance with this Article 15.
 
16 Licenses and Taxes
 
As part of the Services, Thorium Power shall (a) pay all taxes, duties and fees,
and obtain all permits, licences and approvals associated with the Services. Any
payment of taxes on income levied by the US or its political subdivisions or any
other country shall not be part of the Services and FANR shall not compensate
Thorium Power for such costs. FANR, as requested by Thorium Power, shall provide
assistance and services as are described in ATTACHMENT B- - THORIUM POWER
RESOURCES with respect to such licenses and authorizations. The Parties shall
assist each other in every manner reasonably possible in securing such
authorizations and tax exemptions as may be required.
 
17 Quality Assurance Procedures 
 
Thorium Power shall establish and implement written procedures (“Quality
Assurance Procedures”) covering the delivery of the Services that meets IAEA
standards and is suitable for the work with FANR. The Quality Assurance
Procedures shall be made available for review and approval by FANR. Thorium
Power shall amend the Quality Assurance Procedures in order to obtain FANR's
approval. Review and approval by FANR of Thorium Power’s Quality Assurance
Procedures shall not relieve Thorium Power of its responsibility to perform all
Services in accordance with the Quality Assurance Procedures and the other
provisions of this Agreement.
 
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17.1
Subcontractor Quality Assurance Procedures

 
In accordance with Thorium Power’s Quality Assurance Procedures, Thorium Power
shall require its Subcontractors to establish, implement and maintain
appropriate quality assurance procedures which shall meet the requirements of
Thorium Power’s Quality Assurance Procedures.
 

17.2
Non-conformances 

 
Thorium Power shall provide FANR with an opportunity to audit any reports of a
non-conformance under the Quality Assurance Procedures or any Subcontractor’s
quality assurance procedures, or any non-conformance of a Service.
 

17.3
Adequacy of Methods and Equipment 

 
If at any time FANR determines that Thorium Power's or a subcontractor’s
methods, performance or any other aspect or element of the Services are
inadequate for ensuring the requisite quality, FANR may order Thorium Power to
improve its performance and/or change its procedures or staff, and Thorium Power
shall take all actions necessary so as to ensure the quality of the Services and
compliance with the requirements of this Agreement.
 
18 Labor and Immigration Laws 
 
Thorium Power shall comply with the applicable labor and immigration laws that
may impact the Services under this Agreement. Thorium Power shall perform
employment eligibility and verification checks and maintain employment records,
as required by applicable laws.
 
19 Training of Employees 
 
Thorium Power and Subcontractor personnel shall be trained on environmental and
occupational safety and health, as well as nuclear safety requirements before
they are assigned to the Thorium Power team for duties that require knowledge
regarding such matters.
 
No person that is employed or engaged by Thorium Power or its Subcontractors
shall be physically and/or mentally unfit for the performance of the Services.
 
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20 Safety Culture
 
The International Atomic Energy Agency’s (IAEA) International Nuclear Safety
Advisory Group’s (INSAG) INSAG-4 publication, defines safety culture as “that
assembly of characteristics and attitudes in organizations and individuals which
establishes that, as an overriding priority, nuclear plant safety issues receive
the attention warranted by their significance. Thorium Power shall conform to
all IAEA standards in establishing a safety culture. As part of that culture,
Thorium Power shall comply with all applicable Abu Dhabi and UAE laws and
regulations which prohibit Discrimination against workers for engaging in
certain Protected Activities. “Discrimination” includes discharge or any other
adverse actions that relate to compensation, terms, conditions, and privileges
of employment. The term “Protected Activities” includes, among other things,
workers raising nuclear safety or quality control complaints either internally
to their employer or to a regulatory agency. Thorium Power shall fully
investigate, and ensure that its Subcontractors investigate, any allegation of
Discrimination for engaging in Protected Activities with respect to Work under
this Agreement.
 
Within two (2) business days after the receipt by Thorium Power or any of its
Subcontractors of (i) an allegation associated with Services under this
Agreement by a worker or former worker of Thorium Power or any of its
Subcontractors of Discrimination because of engagement in Protected Activities
or (ii) notice of the filing of a complaint to any competent authority by any
such worker or former worker, Thorium Power shall cooperate fully with any
investigation of any such allegations.
 
Thorium Power shall ensure that no agreement affecting the compensation, terms,
conditions and privileges of employment, including, but not limited to, any
agreement to settle a complaint filed by a worker or former worker of Thorium
Power or a Subcontractor under applicable law shall contain any provision which
prohibit, restrict, or otherwise discourages a worker or former worker from
participating in any Protected Activity, including, but not limited to,
providing information to FANR or any other competent regulatory authority.
 
Thorium Power shall ensure that its employees understand that they can raise
safety related concerns and directly contact the competent regulatory agencies
without fear of employer reprisals or job related discrimination.
 
21 Code of Ethics 
 
Thorium Power shall maintain and comply with a “Code of Ethics.” Subcontractors
shall comply with a code of ethics that is consistent with Thorium Power’s Code
of Ethics. FANR shall have the right to review Thorium Power’s Code of Ethics
and be informed of any change in the code be such change comes into force.
 
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22 Safeguards Information 
 
Thorium Power and its Subcontractors may have access to “Safeguards Information”
provided by the International Atomic Energy Agency (IAEA), the UAE, foreign
governments, or industry participants during performance of the Services.
Safeguards Information is information not otherwise classified or restricted
that identifies (1) security measures for the physical protection of special
nuclear material or (2) security measures for the physical protection and
location of certain plant equipment vital to the safety of nuclear production or
utilization facilities. Without prejudice and in addition to Article 4, Thorium
Power agrees that Safeguards Information shall be handled and protected from
unauthorized disclosure in accordance with the requirements of the applicable
Abu Dhabi and UAE authorities.
 
23 Nuclear Liability Protection
 
Thorium Power shall not be the owner or operator of any nuclear facility in the
UAE. The Services provided by Thorium Power shall be advisory. Thorium Power
shall not be required to supply any services that could result in a claim for
nuclear damages against either Party and that the public is properly protected,
the Parties shall take the following actions.
 
24 Miscellaneous
 

24.1
Assignment 

 
The Parties recognize that, for the reasons stated in the Recitals above, this
Agreement is personal as to the Parties. Therefore, a Party may not assign or
transfer this Agreement or any of its rights or obligations created hereunder,
by operation of law or otherwise, without the prior written consent of the other
Party. Provided however, FANR may transfer all or any rights and/or obligations
in this agreement to any governmental entity (including without limitation any
regulator whether or not indepemdent) of the UAE or any Emirate of the UAE or
any entity which is owned or controlled by one or more such governmental
entities and Thorium Power with the prior written consent of FANR (such consent
not to be unreasonably withheld or delayed) may assign its rights in this
Agreement to a person who is and at all times remains a Controlled Affiliate. A
Controlled Affiliate is an entity that is controlled by, that controls or is
under common control with, Thorium Power; and, for this purpose, “control” with
respect to any entity shall mean the ability to effectively control, directly,
the operations and business decisions of such Person by the voting of shares or
other securities
 
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24.2
No Third Party Beneficiaries 

 
This Agreement is solely for the benefit of, and shall inure to the benefit of,
the Parties and their respective successors and permitted assigns, and this
Agreement shall not otherwise be deemed to confer upon or give to any third
party any right, claim, cause of action or other interest herein.
 

24.3
Survival 

 
The provisions of Article 4 (Confidentiality), Article 5 (Intellectual
Property), Article 6 (Limited Warranty and Disclaimer), Article 7 (Disclaimers
and Limitations of Liability), Article 8 (Indemnification), Article 10
(Compliance with Laws), Article 12 (Choice of Law and Dispute Resolution),
Article 15 (Insurance) and Article 23 (Nuclear Liability Protection) shall
remain in full force and effect notwithstanding the termination or expiry of
this Agreement.
 

24.4
Headings 

 
The headings used in this Agreement are included for convenience only and are
not to be used in construing or interpreting this Agreement.
 

24.5
Amendments or Modifications 

 
This Agreement may not be released, discharged, amended or modified in any
manner except by an instrument in writing signed by the Party or Parties to be
bound.
 

24.6
Reproduction of Documents 

 
This Agreement and all documents relating hereto, including, but not limited to,
(i) consents, waivers, amendments and modifications which may hereafter be
executed and (ii) certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
optical disk, micro-card, miniature photographic or other similar process. The
Parties agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
Party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
 

24.7
Severability 

 
Any provisions of this Agreement which are determined to be invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability in such jurisdiction, without rendering invalid
or unenforceable the remaining provisions of this Agreement or affecting the
validity or enforceability of such provisions in any other jurisdiction. If an
arbitral panel or a court of competent jurisdiction declares any provision of
this Agreement to be invalid or unenforceable, the Parties shall request that
such arbitral panel or court reduce the scope, duration, or area of the
provision, delete specific words or phrases from the provision, or replace the
provision with a provision that is valid and enforceable and that comes closest
to expressing the original intention of the Parties, and this Agreement shall be
enforceable as so modified in the jurisdiction in which the provision was
declared invalid or unenforceable.
 
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24.8
Contract Construction 

 
For purposes of contract construction, or otherwise, this Agreement is the
product of negotiation and neither Party to it shall be deemed to be the drafter
of this Agreement or any part thereof.
 

24.9
Entire Agreement 

 
Except as otherwise expressly set forth in this Agreement, those documents
expressly referred to herein and other documents of even date herewith embody
the complete agreement and understanding among the Parties, written or oral,
which may have related to the subject matter hereof in any way.
 

24.10
Counterparts 

 
This Agreement may be executed in any number of counterparts, each of which
shall be an original as against any Party whose signature appears thereon, but
all of which together constitute but one and the same instrument.
 
[Signature page follows]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and
delivered as of the Effective Date by their duly authorized representatives:

THORIUM POWER, LTD.
 
EMIRATES NUCLEAR ENERGY CORPORATION
     
By:
/s/ Seth Grae  
By:
/s/ Khaldoon Al Mubarak          
Name: 
Seth Grae  
Name: 
Khaldoon Al Mubarak          
Title:
President and CEO  
Title:
Chairman, Executive Affairs Authority

 
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ATTACHMENT A - STATEMENT OF WORK
 
From 23 June through 31 December 2008, Thorium Power will provide the following
Services:

1.
Design and Launch of FANR Organization:

 
·
Provide direction on FANR organizational structure, position definitions and
operating procedures, utilizing international industry best practices.

 
·
Act as surrogate for key nuclear & regulatory related management positions
(pending permanent hires) to quickly establish operational policies and initiate
productive work.

 
·
Act as mentor: transfer expert knowledge from the Thorium Power team to
personnel in the permanent FANR organization and provide operational support to
assure successful transition.

 
·
Support recruiting strategy and execution for nuclear & regulatory specific
permanent positions in FANR, and help establish network of nuclear & regulatory
recruiting sources for the new HR functions.

 

2.
Development and Execution of FANR’s Operational and Administrative Plans:

 
·
Provide strategic advice to FANR organization and department heads on nuclear &
regulatory matters.

 
·
Provide project management expertise to enable meeting key FANR development
objectives.

 
·
Execute, under direction of incoming FANR department heads, nuclear & regulatory
related projects across the new organization.

 
Thorium Power will propose and the Parties will agree on more detailed work
plans for Q3 and Q4 of 2008 outlining specific FANR objectives and Thorium
Power’s corresponding role and deliverables.

In providing Services herein, Thorium Power shall operate at all times under the
direction of FANR; however, Thorium Power will also comply with reasonable
requests of other competent governmental organizations that are (i) consistent
with this Agreement and (ii) in accordance with directions or instructions
received from FANR.

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ATTACHMENT B - THORIUM POWER RESOURCES
 
For the period from 23 June through 31 December 2008, Thorium Power will provide
a project team organized into three functional teams, corresponding to the main
work-streams to build the new FANR organization and execute key operational and
development activities:

 
1.
FANR Development & Management

 
·
Supporting FANR Director General, Board and its support functions.

 
2.
FANR Administration

 
·
Supporting FANR administrative department, including finance and budgeting.

 
3.
FANR Operations

 
·
Supporting departments within FANR responsible for e.g., security & safeguards,
licensing, regulations and rad safety.

The Thorium Power team will be managed as follows:

 
·
Thorium Power will form and manage the functional teams consisting of qualified
and experienced personnel with appropriate expertise including management of
nuclear regulatory authorities, IAEA related matters, nuclear technology,
licensing, security & safeguards, regulations, rad safety, fee structure design
and budgeting for regulatory authorities, regulatory staff management and
recruiting.

 

 
·
Each functional team will have a project leader who will interface with the
corresponding FANR department heads. Thorium Power will designate such project
leaders in consultation with FANR. The leader of the functional team FANR
Development and Management will act as head of the Thorium Power team and will
interface with FANR’s Director General.

Thorium Power shall provide FANR with descriptions of the team members, their
background and their roles, and shall keep FANR reasonably informed of changes.

While taking into account the need to keep FANR adequately informed of its
activities, Thorium Power shall determine the composition of its project team,
which may vary over time. Except as otherwise provided in this Agreement,
Thorium Power shall furnish all supervision, labor, equipment, and materials,
and shall obtain all licenses and permits required for the performance of the
Services. Thorium Power shall also be solely responsible for the selection of
the means, methods, and procedures of performing the Services.

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ATTACHMENT C – FANR SUPPORT
 
For the period from 23 June through 31 December 2008, until permanent staff has
been hired into the various FANR departments, FANR will provide:

 
·
Temporary interfaces for Thorium Power’s project leaders in order to adequately
review and approve work product, and make decisions related to the Services, as
outlined in ATTACHMENT A- STATEMENT OF WORK

 
·
Working resources available to be embedded into Thorium Power’s functional
teams.

 
·
Facilitate Thorium Power’s interactions with UAE government authorities.

 
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ATTACHMENT D – COMPENSATION

1.
Professional Fees

 
For the period from 23 June through 31 December 2008, FANR shall pay Thorium
Power an amount of Professional Fees (“2008 Q3/Q4 FANR Project Professional
Fees”) for the Services outlined in ATTACHMENT A- STATEMENT OF WORK equal to USD
8,540,000 (eight million five hundred forty thousand U.S. dollars). FANR shall
make a pre-payment to Thorium Power equal to the 2008 Q3/Q4 FANR Project
Professional Fees within 10 (ten) business days of the Effective Date of this
Agreement.

Thorium Power shall invoice FANR monthly for Professional Fees. The invoice
shall include a description of the resources agreed between the Parties for the
corresponding period, a summary of work performed and the corresponding amounts.
If FANR and Thorium Power agree to reduce or increase the staff provided by
Thorium Power (in accordance with Article 2 (Staff Management), the amount of
this monthly compensation will be reduced or increased to reflect the then
current cost of the staff, adjusted according to the previously agreed rates by
the Parties for corresponding levels of staff. If the cumulative invoiced
amounts are less than the 2008 Q3/Q4 FANR Project Professional Fees, invoiced
amounts shall be credited against the 2008 Q3/Q4 FANR Project Professional Fees
pre-paid by FANR until the 2008 Q3/Q4 FANR Project Professional Fees are reached
with no further payment obligation by FANR. When the cumulative invoiced amounts
exceed the 2008 Q3/Q4 FANR Project Professional Fees, payment shall be handled
in accordance with Section 3 of this ATTACHMENT D-COMPENSATION.
 
2.
Expenses

 
FANR shall reimburse Thorium Power for reasonable out of pocket expenses
properly incurred by Thorium Power or its agents or subcontractors and directly
attributable to the provision of the Services provided hereunder, including,
without limitation, travel, subsistence and other expenses directly attributable
to the provision of Services, provided however that such expenses shall not
exceed twenty percent (20%) of the Professional Fees earned by Thorium Power on
a rolling, cumulative basis without the prior written approval of FANR. For the
avoidance of doubt, expenses shall not include general overhead of Thorium Power
or any professional fees paid to agents or subcontractors of Thorium Power. The
expenses shall be billed to FANR at cost without any administrative charge.
Business-class travel shall be authorized for international travel.

For avoidance of doubt, Thorium Power shall, unless explicitly agreed by the
Parties, not be responsible for costs related to FANR staff or FANR’s
subcontractors, including corresponding recruiting expenses (including
recruiting costs paid to search firms). Moreover, it is assumed that Thorium
Power staff will work out of out of office space provided or paid by FANR when
in the UAE.

3.
Invoices

 
Except as stated in Section 1 of this ATTACHMENT D-COMPENSATION, FANR will pay
invoices for Professional Fees and Expenses under this Agreement within thirty
(30) calendar days of receipt of an invoice.

All payments due to Thorium Power hereunder shall be made in U.S. dollars by
wire transfer of immediately available funds to the following account:

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Beneficiary Name: Thorium Power, Ltd.
Bank Name: Bank of America
State in which bank account was opened: Virginia
Bank’s SWIFT Code: BOFAUS3N
Beneficiary’s Account #: 004131870642

4.
Offsets

 
FANR may offset invoice payments to reflect amounts owing from Thorium Power
pursuant to this Agreement.

5.
Taxes

 
Thorium Power shall follow the direction FANR concerning the payment of taxes in
the UAE. The Professional Fees and Expenses to be paid by FANR to Thorium Power
as stated in this ATTACHMENT D COMPENSATION shall include compensation for all
taxes, other than income taxes paid in the United States, that are borne by
Thorium Power as a result of its performance hereunder including, without
limitation, sales, use, and value-added taxes. State and local sales and use
taxes shall be stated separately and shown on all invoices as a separate line
item. Upon request of FANR, Thorium Power shall promptly provide to FANR
evidence of payment of all state and local sales, use, and value-added taxes.

6.
Record Keeping

 
Thorium Power shall keep accurate and complete accounting records in support of
reimbursable Expenses payable by the FANR in accordance with generally accepted
accounting principles governing Thorium Power’s operations.
 
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