Document:

EXHIBIT
      10.7.2

     

    e.Digital
      Corporation

    SPECIAL
      STOCK OPTION GRANT NOTICE

    

    e.Digital
      Corporation (the “Company”) hereby grants to the Optionee named below, an
      employee of the Company, as an inducement material to the Optionee’s continuing
      employment with the Company, a stock option to purchase the number of shares
      of
      the Company’s common stock set forth below. This option is subject to all of the
      terms and conditions as set forth herein and the Stock Option Agreement
      (attached hereto), which is incorporated herein in its entirety.

    

    
      	
              Optionee:
                

            	
              William
                Blakeley

            
	
              Grant
                No: 

            	
              S-02

            
	
              Date
                of Grant: 

            	
              3/30/2006

            
	
              Shares
                Subject to Option: 

            	
              250,000
                common shares

            
	
              Exercise
                Price Per Share: 

            	
              $0.145

            
	
              Expiration
                Date: 

            	
              3/30/2010

            
	
              Intended
                to be Incentive Stock Option: 

            	
              Yes
                (Subject to limit)

            

    

     

    VESTING
      SCHEDULE:

    

    
      	
              Vesting
                Start Date

            	 	
              Vesting
                Schedule

            
	
              (83,334
                shares vest on grant)

            	 	
              Subject
                to continuing Service (as defined in the Stock Option Agreement)
                this
                option becomes exercisable with respect to the Shares Subject to
                Option
                with 83,334 on the date of grant and the balance in equal annual
                installments of 83,333 shares on each of the first and second annual
                anniversary of the date of grant. Accordingly, subject to continuing
                service 100% of the shares shall be vested on
                3/30/2008.

            

    

     

    ADDITIONAL
      TERMS/ACKNOWLEDGMENTS: The undersigned Optionee acknowledges receipt of, and
      represents that the Optionee has read, understands, accepts and agrees to the
      terms of this Grant Notice and the Stock Option Agreement. Optionee hereby
      accepts the Option subject to all of its terms and conditions and further
      acknowledges that as of the Date of Grant, this Grant Notice and the Stock
      Option Agreement set forth the entire understanding between Optionee and the
      Company regarding the acquisition of stock in the Company and supersede all
      prior oral and written agreements pertaining to this particular
      option.

    

    NOTE:
      THE
      OPTIONEE IS SOLELY RESPONSIBLE FOR ANY ELECTION TO EXERCISE THE OPTION, AND
      THE
      COMPANY SHALL HAVE NO OBLIGATION WHATSOEVER TO PROVIDE NOTICE TO THE OPTIONEE
      OF
      ANY MATTER, INCLUDING, BUT NOT LIMITED TO, THE DATE THE OPTION
      TERMINATES.

     

    
      	
              e.Digital
                Corporation:

            	
              Optionee:

            
	 	 
	 	 
	
              /s/
                ROBERT PUTNAM

            	
              /s/
                WILLIAM BLAKELEY

            
	
              
                

              

              By:
                Robert Putnam

            	
              
                

              

              William
                Blakeley

            
	
              Senior
                Vice President

            	 

    

     

    
      
         

      

      
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    e.Digital
      Corporation

    SPECIAL
      STOCK OPTION AGREEMENT

    

    Pursuant
      to the Grant Notice and this Stock Option Agreement (“Agreement”), e.Digital
      Corporation (the “Company”) has granted to the Optionee named in the Grant
      Notice (“you” or the “Optionee”) an Option to purchase the number of shares of
      the Company’s common stock (“Stock”) indicated in the Grant Notice at the
      exercise price indicated in the Grant Notice.

    

    The
      details of this Option are as follows:

    

    1.
      Definitions
      And Construction.

    

    1.1
      Definitions. Whenever used herein, the following terms shall have their
      respective meanings set forth below:

    

    (a)
      “Affiliate”
means
      (i) an entity, other than a Parent Corporation, that directly, or indirectly
      through one or more intermediary entities, controls the Company or (ii) an
      entity, other than a Subsidiary Corporation, that is controlled by the Company
      directly, or indirectly through one or more intermediary entities, or (iii)
      an
      entity which the Board designates as an Affiliate. For this purpose, the term
      “control” (including the term “controlled by”) means the possession, direct or
      indirect, of the power to direct or cause the direction of the management and
      policies of the relevant entity, whether through the ownership of voting
      securities, by contract or otherwise; or shall have such other meaning assigned
      such term for the purposes of registration on Form S-8 under the Securities
      Act.

    

    (b)
      “Board”
means
      the Board of Directors of the Company. If one or more Committees have been
      appointed by the Board to administer outstanding stock options, “Board” also
      means such Committee(s).

    

    (c)
      A
“Change
      In Control”
means
      the occurrence of any of the following events:

     

    (i)  The
      agreement to acquire or a tender offer that is accepted for beneficial ownership
      (within the meaning of Rule 13d-3 promulgated under the Exchange Act) by any
      individual, entity or group (within the meaning of section 13(d)(3) or 14(d)(2)
      of the Exchange Act) (a “Person”), of 50% or more of either (x) the then
      outstanding shares of Stock (the “Outstanding Stock”) or (y) the combined voting
      power of the then outstanding voting securities of the Company entitled to
      vote
      generally in the election of directors (the “Outstanding Company Voting
      Securities”); provided, however, that for purposes of this subsection (i), the
      following acquisitions shall not constitute a Change in Control: (A)
      any
      acquisition directly from the Company, (B)
      any
      acquisition by the Company, (C)
      any
      acquisition by any employee benefit plan (or related trust) sponsored or
      maintained by the Company or any corporation controlled by the Company,
(D)
      any
      acquisition by any corporation pursuant to a transaction which complies with
      clauses (A), (B) and (C) of paragraph (iii) below; or

     

    (ii)  Individuals
      who constitute the Incumbent Board cease for any reason to constitute at least
      a
      majority of the Board; or

     

    
      
         

      

      
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    (iii)  Consummation
      of a reorganization, merger or consolidation or sale or other disposition of
      all
      or substantially all of the assets of the Company or an acquisition of assets
      of
      another corporation (a “Business Combination”), in each case, unless, following
      such Business Combination, (A)
      the
      Outstanding Stock and Outstanding Company Voting Securities immediately prior
      to
      such Business Combination represent or are converted into or exchanged for
      securities which represent or are convertible into more than 50% of,
      respectively, the then outstanding shares of common stock and the combined
      voting power of the then outstanding voting securities entitled to vote
      generally in the election of directors, as the case may be, of the corporation
      resulting from such Business Combination (including, without limitation, a
      corporation which as a result of such transaction owns the Company, or all
      or
      substantially all of the Company’s assets either directly or through one or more
      subsidiaries), (B)
      no
      Person (excluding any employee benefit plan (or related trust) of the Company
      or
      the corporation resulting from such Business Combination) beneficially owns,
      directly or indirectly, 20% or more of, respectively, the then outstanding
      shares of common stock of the corporation resulting from such Business
      Combination or the combined voting power of the then outstanding voting
      securities of such corporation except to the extent that such ownership of
      the
      Company existed prior to the Business Combination and (C)
      at least
      a majority of the members of the board of directors of the corporation resulting
      from such Business Combination were members of the Incumbent Board at the time
      of the execution of the initial agreement, or of the action of the Board,
      providing for such Business Combination; or

     

    (iv)  Consummation
      of a reorganization, merger or consolidation or sale or other disposition of
      all
      or substantially all of the assets of the Company (a “Business Combination”),
      unless, following such Business Combination, the Outstanding Stock and
      Outstanding Company Voting Securities immediately prior to such Business
      Combination represent or are converted into or exchanged for securities which
      represent or are convertible into more than 50% of, respectively, the then
      outstanding shares of common stock and the combined voting power of the then
      outstanding voting securities entitled to vote generally in the election of
      directors, as the case may be, of the corporation resulting from such Business
      Combination (including, without limitation, a corporation which as a result
      of
      such transaction owns the Company, or all or substantially all of the Company’s
      assets either directly or through one or more subsidiaries); or

     

    (v)  Approval
      by the stockholders of the Company of a complete liquidation or dissolution
      of
      the Company.

    

    (d)
      “Code”
means
      the Internal Revenue Code of 1986, as amended, and any applicable regulations
      promulgated thereunder.

    

    (e)
      “Committee”
means
      the Compensation Committee or other committee of the Board duly appointed to
      administer this Agreement and having such powers as shall be specified by the
      Board. Unless the powers of the Committee have been specifically limited, the
      Committee shall have all of the powers of the Board granted herein.

    

    (f)
      “Company”
means
      e.Digital Corporation, a Delaware corporation, or any Successor.

     

    
      
         

      

      
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    (g)
      “Consultant”
means
      a
      person engaged to provide consulting or advisory services (other than as an
      Employee or a Director) to a Participating Company.

    

    (h)
      “Director”
means
      a
      member of the Board or of the board of directors of any other Participating
      Company.

    

    (i)
      “Disability”
means
      the Optionee has been determined by the long-term disability insurer of the
      Participating Company Group as eligible for disability benefits under the
      long-term disability plan of the Participating Company Group or the Optionee
      has
      been determined eligible for Supplemental Security Income benefits by the Social
      Security Administration of the United States of America.

    

    (j)
      “Employee”
means
      any person treated as an employee (including an Officer or a Director who is
      also treated as an employee) in the records of a Participating Company. The
      Company shall determine in good faith and in the exercise of its discretion
      whether the Optionee has become or has ceased to be an Employee and the
      effective date of the Optionee’s employment or termination of employment, as the
      case may be.

    

    (k)
      “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

    

    (l)
      “Fair
      Market Value”
means,
      as of any date, the value of the Stock determined as follows:

    

    (vi)  if
      shares
      of Stock of the same class are listed or admitted to unlisted trading privileges
      on any national or regional securities exchange at the date of determining
      the
      Fair Market Value, then the last reported sale price, regular way, on the
      composite tape of that exchange on that business day or, if no such sale takes
      place on that business day, the average of the closing bid and asked prices,
      regular way, in either case as reported in the principal consolidated
      transaction reporting system with respect to securities listed or admitted
      to
      unlisted trading privileges on that securities exchange or, if no such closing
      prices are available for that day, the last reported sale price, regular way,
      on
      the composite tape of that exchange on the last business day before the date
      in
      question; or

     

    (vii)  if
      shares
      of Stock of the same class are not listed or admitted to unlisted trading
      privileges as provided in subparagraph (i) and if sales prices for shares of
      Stock of the same class in the over-the-counter market are reported by the
      OTC
      Bulletin Board (“OTCBB”) as of the date of determining the Fair Market Value,
      then the last reported sales price so reported on that business day or, if
      no
      such sale takes place on that business day, the average of the high bid and
      low
      asked prices so reported or, if no such prices are available for that day,
      the
      last reported sale price so reported on the last business day before the date
      in
      question; or

     

    (viii)  if
      shares
      of Stock of the same class are not listed or admitted to unlisted trading
      privileges as provided in subparagraph (i) and sales prices for shares of Stock
      of the same class are not reported by the OTCBB (or
      a
      similar system then in use) as provided in subparagraph (ii), and if bid and
      asked prices for shares of Stock of the same class in the over-the-counter
      market are reported by OTCBB (or, if not so reported, by the National Quotation
      Bureau Incorporated) as of the date of determining the Fair Market Value, then
      the average of the high bid and low asked prices on that business day or, if
      no
      such prices are available for that day, the average of the high bid and low
      asked prices on the last business day before the date in question;
      or

     

    
      
         

      

      
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    (ix)  if
      shares
      of Stock of the same class are not listed or admitted to unlisted trading
      privileges as provided in subparagraph (i) and sales prices or bid and asked
      prices therefor are not reported by OTCBB (or the National Quotation Bureau
      Incorporated) as provided in subparagraph (ii) or subparagraph (iii) as of
      the
      date of determining the Fair Market Value, then the value determined in good
      faith by the Committee, which determination shall be conclusive for all
      purposes; orif shares of Stock of the same class are listed or admitted to
      unlisted trading privileges as provided in subparagraph (i) or sales prices
      or
      bid and asked prices therefor are reported by OTCBB (or the National Quotation
      Bureau Incorporated) as provided in subparagraph (ii) or subparagraph (iii)
      as
      of the date of determining the Fair Market Value, but the volume of trading
      is
      so low that the Board of Directors determines in good faith that such prices
      are
      not indicative of the fair value of the Stock, then the value determined in
      good
      faith by the Committee, which determination shall be conclusive for all purposes
      notwithstanding the provisions of subparagraphs (i), (ii) or (iii).

     

    (m)
      “Incentive
      Stock Option”
means
      an Option intended to be (as set forth in the Option Agreement) and which
      qualifies as an incentive stock option within the meaning of Section 422(b)
      of
      the Code.

    

    (n)
      “Insider”
means
      an Officer, a Director of the Company or other person whose transactions in
      Stock are subject to Section 16 of the Exchange Act.

    

    (o)
      “Non-Control
      Affiliate”
means
      any entity in which any Participating Company has an ownership interest and
      which the Board shall designate as a Non-Control Affiliate.

    

    (p)
      “Officer”
means
      any person designated by the Board as an officer of the Company.

    

    (q)
      An
“Ownership
      Change Event”
shall
      be deemed to have occurred if any of the following occurs with respect to the
      Company: (i) the direct or indirect sale or exchange in a single or series
      of
      related transactions by the stockholders of the Company of more than fifty
      percent (50%) of the voting stock of the Company; (ii) a merger or consolidation
      in which the Company is a party; (iii) the sale, exchange, or transfer of all
      or
      substantially all, as determined by the Board in its discretion, of the assets
      of the Company; or (iv) a liquidation or dissolution of the
      Company.

    

    (r)
      “Parent
      Corporation”
means
      any present or future “parent corporation” of the Company, as defined in Section
      424(e) of the Code.

    

    (s)
      “Participating
      Company”
means
      the Company or any Parent Corporation or Subsidiary Corporation or
      Affiliate.

    

    (t)
      “Participating
      Company Group”
means,
      at any point in time, all entities collectively which are then Participating
      Companies.

     

    
      
         

      

      
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    (u)
      “Rule
      16b-3”
means
      Rule 16b-3 under the Exchange Act, as amended from time to time, or any
      successor rule or regulation.

    

    (v)
      “Securities
      Act”
means
      the Securities Act of 1933, as amended.

    

    (w)
      “Service”
      means

    

    (i)
      the
      Optionee’s employment or service with the Participating Company Group, whether
      in the capacity of an Employee, a Director or a Consultant. The Optionee’s
      Service shall not be deemed to have terminated merely because of a change in
      the
      capacity in which the Optionee renders Service to the Participating Company
      Group or a change in the Participating Company for which the Optionee renders
      such Service, provided that there is no interruption or termination of the
      Optionee’s Service. Furthermore, only to such extent as may be provided by the
      Company’s leave policy, the Optionee’s Service with the Participating Company
      Group shall not be deemed to have terminated if the Optionee takes any military
      leave, sick leave, or other leave of absence approved by the Company.
      Notwithstanding the foregoing, a leave of absence shall be treated as Service
      for purposes of vesting only to such extent as may be provided by the Company’s
      leave policy. The Optionee’s Service shall be deemed to have terminated either
      upon an actual termination of Service or upon the entity for which the Optionee
      performs Service ceasing to be a Participating Company; except that if the
      entity for which Optionee performs Service is a Subsidiary Corporation and
      ceases to be a Participating Company as a result of the distribution of the
      voting stock of such Subsidiary Corporation to the stockholders of the Company,
      Service shall not be deemed to have terminated as a result of such distribution.
      Subject to the foregoing, the Company, in its discretion, shall determine
      whether the Optionee’s Service has terminated and the effective date of such
      termination.

    

    (ii)
      Notwithstanding any other provision of this Section, an Optionee’s Service shall
      not be deemed to have terminated merely because the Participating Company for
      which the Optionee renders Service ceases to be a member of the Participating
      Company Group by reason of a Spinoff Transaction, nor shall Service be deemed
      to
      have terminated upon resumption of Service from the Spinoff Company to a
      Participating Company. For all purposes under this Agreement, the Optionee’s
      Service shall include Service, whether in the capacity of an Employee, Director
      or a Consultant, for the Spinoff Company provided the Optionee was employed
      by
      the Participating Company Group immediately prior to the Spinoff Transaction.
      Notwithstanding the foregoing, if the Company’s auditors determine that the
      provisions or operation of the preceding two sentences would cause the Company
      to incur a compensation expense and provided further that in the absence of
      the
      preceding two sentences no such compensation expense would be incurred, then
      the
      two preceding sentences shall be without force or effect, and the vesting and
      exercisability of each outstanding Option and any shares acquired upon the
      exercise thereof shall be determined under any other applicable provision of
      this Agreement.

    

    (x)
      “Spinoff
      Company”
means
      a
      Participating Company which ceases to be such as a result of a Spinoff
      Transaction.

    

    (y)
      “Spinoff
      Transaction”
means
      a
      transaction in which the voting stock of an entity in the Participating Company
      Group is distributed to the shareholders of a parent corporation as defined
      by
      Section 424(e) of the Code, of such entity.

     

    
      
         

      

      
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    (z)
      “Stock”
means
      the common stock of the Company, as adjusted from time to time in accordance
      with Section 9.

    

    (aa)
      “Subsidiary
      Corporation”
means
      any present or future “subsidiary corporation” of the Company, as defined in
      Section 424(f) of the Code.

    

    (bb)
      “Successor”
means
      a
      corporation into or with which the Company is merged or consolidated or which
      acquires all or substantially all of the assets of the Company and which is
      designated by the Board as a Successor for purposes of this
      Agreement.

    

    1.2
      Construction.
      Captions and titles contained herein are for convenience only and shall not
      affect the meaning or interpretation of any provision of this Agreement. Except
      when otherwise indicated by the context, the singular shall include the plural
      and the plural shall include the singular. Use of the term “or” is not intended
      to be exclusive, unless the context clearly requires otherwise.

    

    2.
      Vesting.
      Except
      as otherwise provided in this Agreement, this option will vest as provided
      in
      the Grant Notice.

    

    3.
      Exercise
      Of The Option.

    

    3.1
      Method
      Of Exercise.
      You may
      exercise the vested portion of this Option at any time prior to the expiration
      of the Option by delivering a notice of exercise in such form as may be
      designated by the Company from time to time together with the exercise price
      to
      the Secretary of the Company, or to such other person as the Company may
      designate, during regular business hours and prior to the expiration of the
      Option, together with such additional documents as the Company may then
      require.

    

    3.2
      Method
      Of Payment.
      Payment
      of the exercise price may be by cash (or check), or pursuant to a program
      developed under Regulation T as promulgated by the Federal Reserve Board which,
      prior to the issuance of Stock, results in either the receipt of cash (or check)
      by the Company or the receipt of irrevocable instructions to a broker which
      provides for the payment of the aggregate exercise price to the Company, or
      a
      combination of the above methods, as the Company may designate from time to
      time. The Company reserves, at any and all times, the right, in the Company’s
      sole and absolute discretion, to establish, decline to approve or terminate
      any
      program or procedures for the exercise of Options by means of a Cashless
      Exercise.

    

    3.3
      Tax
      Withholding.
      By
      exercising this Option you agree that as a condition to any exercise of this
      Option, the Company may withhold from your pay and any other amounts payable
      to
      you, or require you to enter an arrangement providing for the payment by you
      to
      the Company of any tax withholding obligation of the Company arising by reason
      of (1) the exercise of this Option; or (2) the disposition of Stock acquired
      upon such exercise.

    

    3.4
      Responsibility
      For Exercise.
      You are
      responsible for taking any and all actions as may be required to exercise this
      Option in a timely manner and for properly executing any such documents as
      may
      be required for exercise in accordance with such rules and procedures as may
      be
      established from time to time. By signing this Agreement you acknowledge that
      information regarding the procedures and requirements for this exercise of
      the
      Option is available to you on request. The Company shall have no duty or
      obligation to notify you of the expiration date of this Option.

     

    
      
         

      

      
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    4.
      Securities
      Law Compliance.
      Notwithstanding anything to the contrary contained herein, this Option may
      not
      be exercised unless the Stock issuable upon exercise of this Option is then
      registered under the Securities Act or, if such Stock is not then so registered,
      the Company has determined that such exercise and issuance would be exempt
      from
      the registration requirements of the Securities Act.

    

    5.
      Termination
      Of The Option.
      The
      term of this Option commences on the Date of Grant (as specified in the Grant
      Notice) and expires and shall no longer be exercisable upon the earliest
      of:

    

    5.1
      the
      Expiration Date indicated in the Grant Notice;

    

    5.2
      the
      last day for exercising the Option following termination of your Service as
      described in Section 6 below; or

    

    5.3
      a
      Change of Control, to the extent provided in Section 7 below.

    

    6.
      Effect
      Of Termination Of Service.

    

    6.1
      Option
      Exercisability.
      Subject
      to earlier termination of the Option as otherwise provided herein, the Option
      shall be exercisable after the Optionee’s termination of Service only during the
      applicable time period determined in accordance with this Section 6 and
      thereafter shall terminate.

    

    (a)
      Disability.
      If the
      Optionee’s Service terminates because of the Disability of the Optionee, the
      Option shall continue for a period of one year from termination of employment
      resulting from such Disability and may be exercised by the Optionee at any
      time
      during the one year period but in any event no later than the Expiration
      Date.

    

    (b)
      Death.
      If the
      Optionee’s Service terminates because of the death or because of the Disability
      of the Optionee and such termination is subsequently followed by the death
      of
      the Optionee, (A) the exercisability and vesting of the Option shall be
      accelerated effective upon the Optionee’s death, and (B) the Option, to the
      extent unexercised and exercisable on the date of the Optionee’s death, may be
      exercised by the Optionee’s legal representative or other person who acquired
      the right to exercise the Option by reason of the Optionee’s death at any time
      prior to the expiration of twelve (12) months after the date of the Optionee’s
      death, but in any event no later than the Expiration Date.

    

    (c)
      Termination
      After Change In Control.
      If the
      Optionee’s Service ceases as a result of Termination After Change in Control (as
      defined below), then (A) the exercisability and vesting of the Option shall
      be
      accelerated effective as of the date on which the Optionee’s Service terminated,
      and (B) the Option, to the extent unexercised and exercisable on the date on
      which the Optionee’s Service terminated, may be exercised by the Optionee (or
      the Optionee’s guardian or legal representative) at any time prior to the
      expiration of six (6) months after the date on which the Optionee’s Service
      terminated, but in any event no later than the Expiration Date.

     

    
      
         

      

      
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    (e)
      Other
      Termination Of Service.
      If the
      Optionee’s Service with the Participating Company Group terminates for any
      reason except Disability, death, Transfer to a Non-Control Affiliate, or
      Termination after Change in Control, the Option, to the extent unexercised
      and
      exercisable by the Optionee on the date on which the Optionee’s Service
      terminates, may be exercised by the Optionee at any time prior to the expiration
      of one month after the date on which the Optionee’s Service terminates, but in
      any event no later than the Expiration Date.

    

    6.2
      Extension
      If Exercise Prevented By Law.
      Notwithstanding the foregoing, other than termination for Cause, if the exercise
      of an Option within the applicable time periods set forth in Section 6.1 is
      prevented by the provisions of Section 4 above, the Option shall remain
      exercisable until three (3) months after the date the Optionee is notified
      by
      the Company that the Option is exercisable, but in any event no later than
      the
      Expiration Date.

    

    6.3
      Extension
      If Optionee Subject To Section 16(b).
      Notwithstanding the foregoing, other than termination for Cause, if a sale
      within the applicable time periods set forth in Section 6.1 of shares acquired
      upon the exercise of the Option would subject the Optionee to suit under Section
      16(b) of the Exchange Act, the Option shall remain exercisable until the
      earliest to occur of (i) the tenth (10th) day following the date on which a
      sale
      of such shares by the Optionee would no longer be subject to such suit, (ii)
      the
      one hundred and ninetieth (190th) day after the Optionee’s termination of
      Service, or (iii) the Expiration Date.

    

    6.4
      Certain
      Definitions.

    

    (a)
      “Cause”
shall
      mean any of the following: (1) the Optionee’s theft, dishonesty, or
      falsification of any Participating Company documents or records; (2) the
      Optionee’s improper use or disclosure of a Participating Company’s confidential
      or proprietary information; (3) any action by the Optionee which has a
      detrimental effect on a Participating Company’s reputation or business; (4) the
      Optionee’s failure or inability to perform any reasonable assigned duties after
      written notice from a Participating Company of, and a reasonable opportunity
      to
      cure, such failure or inability; (5) any material breach by the Optionee of
      any
      employment or service agreement between the Optionee and a Participating
      Company, which breach is not cured pursuant to the terms of such agreement;
      (6)
      the Optionee’s conviction (including any plea of guilty or nolo contendere) of
      any criminal act which impairs the Optionee’s ability to perform his duties with
      a Participating Company; or (7) violation of a material Company
      policy.

    

    (b)
      “Good
      Reason”
shall
      mean any one or more of the following:

    

    (i)
      without the Optionee’s express written consent, the assignment to the Optionee
      of any duties, or any limitation of the Optionee’s responsibilities,
      substantially inconsistent with the Optionee’s positions, duties,
      responsibilities and status with the Participating Company Group immediately
      prior to the date of the Change in Control;

    

    (ii)
      without the Optionee’s express written consent, the relocation of the principal
      place of the Optionee’s employment or service to a location that is more than
      fifty (50) miles from the Optionee’s principal place of employment or service
      immediately prior to the date of the Change in Control, or the imposition of
      travel requirements substantially more demanding of the Optionee than such
      travel requirements existing immediately prior to the date of the Change in
      Control;

     

    
      
         

      

      
        Page
          9 of
          13

        
          

        

      

      
         

      

    

     

    (iii)
      any
      failure by the Participating Company Group to pay, or any material reduction
      by
      the Participating Company Group of, (A) the Optionee’s base salary in effect
      immediately prior to the date of the Change in Control (unless reductions
      comparable in amount and duration are concurrently made for all other employees
      of the Participating Company Group with responsibilities, organizational level
      and title comparable to the Optionee’s), or (B) the Optionee’s bonus
      compensation, if any, in effect immediately prior to the date of the Change
      in
      Control (subject to applicable performance requirements with respect to the
      actual amount of bonus compensation earned by the Optionee);

    

    (iv)
      any
      failure by the Participating Company Group to (A) continue to provide the
      Optionee with the opportunity to participate, on terms no less favorable than
      those in effect for the benefit of any employee or service provider group which
      customarily includes a person holding the employment or service provider
      position or a comparable position with the Participating Company Group then
      held
      by the Optionee, in any benefit or compensation plans and programs, including,
      but not limited to, the Participating Company Group’s life, disability, health,
      dental, medical, savings, profit sharing, stock purchase and retirement plans,
      if any, in which the Optionee was participating immediately prior to the date
      of
      the Change in Control, or their equivalent, or (B) provide the Optionee with
      all
      other fringe benefits (or their equivalent) from time to time in effect for
      the
      benefit of any employee group which customarily includes a person holding the
      employment or service provider position or a comparable position with the
      Participating Company Group then held by the Optionee;

    

    (v)
      any
      breach by the Participating Company Group of any material agreement between
      the
      Optionee and a Participating Company concerning Optionee’s employment;
      or

    

    (vi)
      any
      failure by the Company to obtain the assumption of any material agreement
      between the Optionee and the Company concerning the Optionee’s employment by a
      successor or assign of the Company.

    

    (c)
      “Termination
      After Change In Control”
shall
      mean either of the following events occurring within twenty-four (24) months
      after a Change in Control:

    

    (i)
      termination by the Participating Company Group of the Optionee’s Service with
      the Participating Company Group for any reason other than for Cause;
      or

    

    (ii)
      the
      Optionee’s resignation for Good Reason from all capacities in which the Optionee
      is then rendering Service to the Participating Company Group within a reasonable
      period of time following the event constituting Good Reason.

    

    Notwithstanding
      any provision herein to the contrary, Termination After Change in Control shall
      not include any termination of the Optionee’s Service with the Participating
      Company Group which (1) is for Cause; (2) is a result of the Optionee’s death or
      Disability; (3) is a result of the Optionee’s voluntary termination of Service
      other than for Good Reason; or (4) occurs prior to the effectiveness of a Change
      in Control.

     

    
      
         

      

      
        Page
          10
          of 13

        
          

        

      

      
         

      

    

     

    7.
      Change
      In Control.
      In the
      event of a Change in Control, the surviving, continuing, successor, or
      purchasing corporation or other business entity or parent thereof, as the case
      may be (the “Acquiring Corporation”), may, without the consent of the Optionee,
      either assume the Company’s rights and obligations the Option or substitute for
      the Option substantially equivalent options for the Acquiring Corporation’s
      stock. In the event the Acquiring Corporation elects not to assume or substitute
      for the Option in connection with a Change in Control, the exercisability and
      vesting of the Option shall be accelerated, effective as of the date ten (10)
      days prior to the date of the Change in Control. The exercise or vesting of
      this
      Option that was permissible solely by reason of this Section shall be
      conditioned upon the consummation of the Change in Control. To the extent this
      Option is neither assumed or substituted for by the Acquiring Corporation in
      connection with the Change in Control nor exercised as of the date of the Change
      in Control, it shall terminate and cease to be outstanding effective as of
      the
      date of the Change in Control. Notwithstanding the foregoing, shares acquired
      upon exercise of the Option prior to the Change in Control and any consideration
      received pursuant to the Change in Control with respect to such shares shall
      continue to be subject to all applicable provisions of the Agreement.
      Furthermore, notwithstanding the foregoing, if the corporation the stock of
      which is subject to the Option immediately prior to an Ownership Change Event
      described in Section 1.1(q)(i) constituting a Change in Control is the surviving
      or continuing corporation and immediately after such Ownership Change Event
      less
      than fifty percent (50%) of the total combined voting power of its voting stock
      is held by another corporation or by other corporations that are members of
      an
      affiliated group within the meaning of Section 1504(a) of the Code without
      regard to the provisions of Section 1504(b) of the Code, the Option shall not
      terminate unless the Board otherwise provides in its discretion.

    

    8.
      Option
      Not A Service Contract.
      This
      Option is not an employment or service contract and nothing in this Agreement
      or
      the Grant Notice shall be deemed to create in any way whatsoever any obligation
      on your part to continue in the service of the Company, or of the Company to
      continue your service with the Company. In addition, nothing in your Option
      shall obligate the Company, its stockholders, Board, Officers or Employees
      to
      continue any relationship which you might have as a Director or Consultant
      for
      the Company.

    

    9.
      Adjustments
      For Changes In Capital Structure.
      In the
      event of any stock dividend, stock split, reverse stock split, recapitalization,
      combination, reclassification or similar change in the capital structure of
      the
      Company, appropriate adjustments shall be made in the number and class of shares
      subject to the Option and in the exercise price per share of the Option. If
      a
      majority of the shares of Stock are exchanged for, converted into, or otherwise
      become (whether or not pursuant to an Ownership Change Event) shares of another
      corporation (the “New Shares”), the Board may unilaterally amend this Agreement
      to provide that the Option is exercisable for New Shares. In the event of any
      such amendment, the number of shares subject to, and the exercise price per
      share of, the Option shall be adjusted in a fair and equitable manner as
      determined by the Board, in its discretion. Notwithstanding the foregoing,
      any
      fractional share resulting from an adjustment pursuant to this Section shall
      be
      rounded down to the nearest whole number, and in no event may the exercise
      price
      of the Option be decreased to an amount less than the par value, if any, of
      the
      Stock subject to the Option.

     

    
      
         

      

      
        Page
          11
          of 13

        
          

        

      

      
         

      

    

     

    10.
      Representations.
      By
      executing this Agreement, you hereby warrant and represent that you are
      acquiring this Option for your own account and that you have no intention of
      distributing, transferring or selling all or any part of this Option except
      in
      accordance with the terms of this Agreement and Section 25102(f) of the
      California Corporations Code. You also hereby warrant and represent that you
      have either (i) preexisting personal or business relationships with the Company
      or any of its officers, directors or controlling persons, or (ii) the capacity
      to protect your own interests in connection with the grant of this Option by
      virtue of the business or financial expertise of you or any of your professional
      advisors who are unaffiliated with and who are not compensated by the Company
      or
      any of its affiliates, directly or indirectly.

    

    11.
      Notices.
      Any
      notices provided for in this Agreement or the Grant Notice shall be given in
      writing and shall be deemed effectively given upon receipt or, in the case
      of
      notices delivered by the Company to you, five (5) days after deposit in the
      United States mail, postage prepaid, addressed to you at the last address you
      provided to the Company.

    

    12.
      Transferability.
      This
      Option shall not be transferable in any manner (including without limitation,
      sale, alienation, anticipation, pledge, encumbrance, or assignment) other than,
      (i) by will or by the laws of descent and distribution, (ii) by written
      designation of a beneficiary, in a form acceptable to the Company, with such
      designation taking effect upon the death of the Optionee, (iii) by delivering
      written notice to the Company, in a form acceptable to the Company (including
      such representations, warranties and indemnifications as the Company shall
      require the Optionee to make to protect the Company’s interests and ensure that
      this Option has been transferred under the circumstances approved by the
      Company), by gift to the Optionee’s spouse, former spouse, children,
      stepchildren, grandchildren, parent, stepparent, grandparent, sibling, niece,
      nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
      brother-in-law, or sister-in-law, persons having one of the foregoing types
      of
      relationship with the Optionee due to adoption, any person sharing the
      Optionee’s household (other than a tenant or employee), a foundation in which
      these persons or the Optionee control the management of assets, and any other
      entity in which these persons (or the Optionee) own more than fifty percent
      of
      the voting interests. A transfer to an entity in which more than fifty percent
      of the voting interests are owned by these persons (or the Optionee) in exchange
      for an interest in that entity is specifically included as a permissible type
      of
      transfer. In addition, a transfer to a trust created solely for the benefit
      (i.e., the Optionee and/or any or all of the foregoing persons hold more than
      50
      percent of the beneficial interest in the trust) of the Optionee and/or any
      or
      all of the foregoing persons is also a permissible transferee, or (iv) such
      other transferees as may be authorized by the Board in its sole and absolute
      discretion. During the Optionee’s life this Option is exercisable only by the
      Optionee or a transferee satisfying the above conditions. Except in the event
      of
      the Optionee’s death, upon transfer of this Option to any or all of the
      foregoing persons, the Optionee is liable for any and all taxes due upon
      exercise of this transferred Option. At no time will a transferee who is
      considered an affiliate under Rule 144(a)(1) be able to sell any or all such
      Stock without complying with Rule 144. The right of a transferee to exercise
      the
      transferred portion of this Option shall terminate in accordance with the
      Optionee’s right of exercise under this Option and is further subject to such
      representations, warranties and indemnifications from the transferee that the
      Company requires the transferee to make to protect the Company’s interests and
      ensure that this Option has been transferred under the circumstances approved
      by
      the Company. Once a portion of this Option is transferred, no further transfer
      may be made of that portion of this Option.

     

    
      
         

      

      
        Page
          12
          of 13

        
          

        

      

      
         

      

    

     

    13.
      Arbitration.
      Any
      dispute or claim concerning the Option, the Grant Notice or this Agreement
      shall
      be fully, finally and exclusively resolved by binding arbitration conducted
      by
      the American Arbitration Association pursuant to the commercial arbitration
      rules in San Diego, California. By accepting the Option, the Optionee and the
      Company waive their respective rights to have any such disputes or claims tried
      by a judge or jury.

    

    14.
      Amendment.
      The
      Board may amend your Option at any time, provided no such amendment may
      adversely affect the Option or any unexercised portion of your Option, without
      your consent unless such amendment is necessary to comply with any applicable
      law or government regulation. No amendment or addition to this Agreement shall
      be effective unless in writing or, in such electronic form as may be designated
      by the Company.

     

    
      
         

      

      
        Page
          13
          of 13CHRISTENSEN
      RANCH AGREEMENT

    

    THIS
      AGREEMENT made and entered into as of the 30 day of October, 2006.

    

    BETWEEN: George
      Hartman, of 1220 Elkhorn Valley Drive, Casper, Wyoming, 82609,

    U.S.A.

    

    
      	
              (herein
                called “Hartman”)

            	 
	 	
              OF
                THE FIRST PART

            

    

    

    AND: Uranerz
      Energy Corporation, a company having an office at Suite 1410, 800 West Pender
      Street, Vancouver, B.C., V6C 2V6

    

    
      	
              (herein
                called “Uranerz”)

            	 
	 	
              OF
                THE SECOND PART

            

    

    

    

    Whereas,
      Hartman has certain geological reports including uranium deposit maps and
      mineralization front locations, together with written data including project
      summary charts of ore grade quantity and quality data, similar to that data
      used
      to acquire West North Butte and Reno Creek project areas which Uranerz now
      holds
      title to, amounting to a total of some five million pounds U3O8;
      And

    

    Whereas,
      this latest area is known as the Christensen Ranch area which competent,
      experienced geologists have estimated could hold up to 53.7 million pounds
      U3O8
      in all categories covering in excess of some 10,000 acres and an estimated
      85
      miles of chemical redox fronts as explained and delineated in the report;
      And

    

    Whereas,
      It is recognized that Areva holds approximately 212 claims in this area and
      has
      ownership to a portion of this stated resource; And

    

    Whereas,
      Joe Hubert’s data file contains drill hole information on much of the area of
      interest; And

    

    Whereas,
      Uranerz desires to increase its uranium resource position;

    

    NOW
      THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises,
      the
      mutual covenants herein set forth and the sum of One Dollar ($1.00) of lawful
      money of U.S. currency now paid by Uranerz to Hartman (the receipt whereof
      is
      hereby acknowledged), the Parties hereto do hereby mutually covenant and agree
      as follows:

    

    Hartman
      will submit the report, tables and maps to Uranerz and Uranerz will immediately
      begin an aggressive land acquisition program to stake the areas of interest
      that
      are not now held by Areva or others. (A recent search of the records reveals
      no
      other participants in this area at this time.) 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    As
      staking is completed Uranerz will:

    

    (A)
      determine the measured and indicated uranium content by usual geological
      procedures of planimetering the ore outline and applying the chart average
      data
      contained in the report. This task will be completed by a competent experienced
      geologist (Kurt Brown, Al Burgland or equivalent). This was the method used
      at
      the Reno Creek area. Any mineralization held by third parties(Areva or others)
      by using the same planimeter method will be deducted from the total figure.
      Hartman reserves the right to have his own independent competent consultant
      perform the same study and the two totals will be averaged.

    

    (B)
      in
      the case of front-only information, a flat fee will be paid to Hartman (as
      explained below) for each claim staked and registered which is not included
      in
      the claims included in the calculations in Item A above, and historical
      information indicates Reox front within these claims.

    

    In
      exchange for the historic uranium mineralization information Uranerz agrees
      to
      pay Hartman and Hartman agrees to accept:

    

    (A)Planimeter
      method: a sum of $0.40 (forty cents) for each measured and indicated pound
      staked, and ultimately owned by Uranerz, payable in shares of common stock
      of
      Uranerz Energy Corporation (the “URZ Shares”) as explained below; or

    

    (B)
      Reox
      Front method: A fee of $750 for each claim registered with the Bureau of Land
      management (the “BLM”) which is not included in the calculations in Item A
      above, and historical information indicates the Reox front within the
      claims.

    

    Payment
      for this geologic information and data (Items A and B above) will be made by
      Uranerz in the form of URZ
      Shares. For the calculation of URZ Shares payable, the value of the URZ Shares
      will be set at US$2.50 per URZ Share.

    

    The
      URZ
      Shares will be issued to Hartman after confirmation by Uranerz that after
      staking of the claims, subject to the paramount title of the United States
      (but
      excepting those portions that may overlap adjacent fee lands), Uranerz is the
      sole and only owner of the claims; that each of the unpatented claims included
      in the staking has been validly located, filed and recorded in compliance with
      the laws of the State of Wyoming and of the United States as they relate to
      location and recordation of such claims including recording Affidavits and
      Notices of Intent to Hold with the appropriate County Recorder’s Office; that
      Uranerz has timely complied with all of the filing provisions of the Federal
      Land Policy and Management Act as they pertain to the unpatented claims included
      within the staked claims and that said claims are valid and subsisting mining
      claims. 

    

    The
      URZ
      Shares issued to Hartman shall have a registration right, such that the URZ
      Shares issued to Hartman shall be included in the next registration statement
      or
      next amendment to a registration statement that is being conducted by Uranerz.
      If the URZ Shares have not been registered and become eligible for re-sale
      by
      six months after the date that the URZ Shares were issued to Hartman, then
      Uranerz shall pay a penalty of an additional 10% of the number of URZ Shares
      issued to Hartman.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    As
      part
      of determining the amount of measured and indicated resource under provision
      (A)
      and the amount of redox trend to claim stake under provision (B), Uranerz will
      do an assessment as to the recoverability of uranium of these areas as
      related to the water table of the mineralized sandstone aquifer and the
      surface topography during the initial 30 day NOITL period.  Subject to
      a confidentiality agreement, consultants may be utilized to aide with the
      aforementioned assessment.  At Uranerz' discretion, those areas where
      the mineralized aquifer is not water saturated, or the
      topography deemed too steep for economic and practical ISR mining will be
      excluded from this Agreement.

    

    Notwithstanding
      the calculation of the number of shares payable to Hartman based on items A
      and
      B above, the maximum number of URZ Shares that shall be issued pursuant to
      this
      Agreement shall be 5,000,000 URZ Shares.

    

    The
      issuing of any URZ Shares may be subject to regulatory approval, including
      the
      approval of the American Stock Exchange.

    

    Each
      of
      the parties to this Agreement shall from time to time and at all times do all
      such further acts and execute and deliver all further deeds and documents as
      shall be reasonably required in order to fully perform and carry out the terms
      and intent of this Agreement.

    

    IN
      WITNESS WHEREOF
      the
      Parties hereto have duly executed this Agreement effective as of the day and
      year first above written.

    

    

    Agreed
      _____________________________________

    George
      Hartman

    

    Agreed_____________________________________

    Uranerz
      Energy Corporation

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