<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 1995 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ______ to _______
Commission file number 0-17171
URANIUM RESOURCES, INC.
(exact name of Registrant as specified in its Charter)
<TABLE>
<S> <C>
DELAWARE 75-2212772
(State of Incorporation) (I.R.S. Employer Identification No.)
</TABLE>
12750 MERIT DRIVE, SUITE 1210, DALLAS, TEXAS 75251
(Address of principal executive offices, including zip code)
(214) 387-7777
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X ] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<S> <C>
Title of Each Class of Common Stock Number of Shares Outstanding
- ----------------------------------- ----------------------------
Common Stock, $.001 par value 8,049,307 as of May 19, 1995
</TABLE>
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<PAGE> 2
URANIUM RESOURCES, INC.
1995 FIRST QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
<TABLE>
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 1995 (Unaudited) and
December 31, 1994 3
Consolidated Statements of Operations -
Three Months Ended March 31, 1995 and 1994
(Unaudited) 5
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1995
and 1994 (Unaudited) 6
Notes to Consolidated Financial
Statements - March 31, 1995 (Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II -- OTHER INFORMATION 11
SIGNATURES 12
Index to Exhibits E-1
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
URANIUM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1995 AND DECEMBER 31, 1994 (NOTE 1)
ASSETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
------------ ------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 43,468 $ 2,527,600
Short-term investments:
Certificate of Deposit, restricted 562,341 562,211
Receivables 80,368 52,740
Uranium inventory 3,426,067 4,031,611
Materials and supplies inventory 162,365 162,417
Prepaid and other current assets 186,070 96,751
------------ ------------
Total current assets 4,460,679 7,433,330
------------ ------------
Property, plant and equipment, at cost:
Uranium properties 53,707,527 53,210,132
Other property, plant and equipment 461,918 461,918
Less - accumulated depreciation and depletion (16,420,512) (16,345,645)
------------ ------------
Net property, plant and equipment 37,748,933 37,326,405
Other Assets 90,491 90,491
------------ ------------
$ 42,300,103 $ 44,850,226
------------ ------------
</TABLE>
The accompanying notes to financial statements are an integral part of these
consolidated balance sheets.
3
<PAGE> 4
URANIUM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1995 AND DECEMBER 31, 1994 (NOTE 1)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
------------- -------------
(Unaudited)
<S> <C> <C>
Current Liabilities:
Accounts payable $ 1,621,517 $ 1,283,265
Short-term notes 6,491,738 7,739,225
Borrowings from related parties 90,000 -
Accrued interest payable 163,248 27,744
Current portion of long-term debt 142,000 82,000
Royalties payable 509,606 509,606
Current portion of restoration reserve 65,000 90,000
Other accrued liabilities 603,290 246,790
------------ ------------
Total current liabilities 9,686,399 9,978,630
------------ ------------
Other long-term liabilities and deferred credits 2,341,910 2,337,624
Long-term debt, less current portion 1,345,507 1,405,507
Deferred federal income taxes 2,415,000 2,910,000
Shareholders' equity:
Common stock, $.001 par value, 12,500,000
shares authorized; shares issued and
outstanding (net of treasury shares):
1995 - 8,049,307; 1994 - 7,954,683 8,237 8,142
Paid-in capital 15,317,234 15,040,064
Retained earnings 11,197,396 13,181,839
------------ ------------
26,522,867 28,230,045
Less: Treasury stock (187,500 shares), at cost (11,580) (11,580)
------------ ------------
Total shareholders' equity 26,511,287 28,218,465
------------ ------------
$ 42,300,103 $ 44,850,226
------------ ------------
</TABLE>
The accompanying notes to financial statements are an integral part of these
consolidated balance sheets.
4
<PAGE> 5
URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994 (NOTE 1)
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
1995 1994
------------ -----------
<S> <C> <C>
Revenues:
Uranium Sales -
Produced uranium $ - $ 33,465
Purchased uranium 1,251,013 878,664
----------- -----------
Uranium sales 1,251,013 912,129
Costs and expenses:
Cost of uranium sales -
Direct cost of purchased uranium 612,813 530,686
Royalties and brokers' fees - 1,077
Operating expenses 245,584 337,351
Provision for restoration and reclamation costs - 1,312
Depreciation and depletion 40,465 71,929
Loss on termination of joint venture 1,000,953 -
Loss on transfer to stockholder (Note 2) 1,080,000 -
Corporate expenses -
General and administrative 636,575 459,122
Depreciation 7,319 8,023
----------- -----------
Total costs and expenses 3,623,709 1,409,500
----------- -----------
Loss from operations (2,372,696) (497,371)
Other income (expense):
Interest expense, net of capitalized interest (154,980) (1,880)
Interest and other income, net 48,233 54,443
----------- -----------
Loss before income tax benefit (2,479,443) (444,808)
Federal income tax benefit:
Current - (155)
Deferred (495,000) (89,000)
----------- -----------
Net loss $(1,984,443) $ (355,653)
----------- -----------
Net loss per common and common equivalent share $ (0. 25) $ (0.05)
----------- -----------
Weighted average common shares and common equivalent
shares per share data 8,024,607 6,643,142
----------- -----------
</TABLE>
The accompanying notes to financial statements are an integral part of these
consolidated statements.
5
<PAGE> 6
URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994 (NOTE 1)
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
1995 1994
------------ ------------
<S> <C> <C>
Cash flows from operations:
Net loss $(1,984,443) $ (355,653)
Reconciliation of net income to cash provided by
operations-
Provision for restoration and reclamation costs - 1,312
Depreciation and depletion 47,784 79,952
Amortization of other assets - 56,257
Credit for deferred income taxes (495,000) (89,000)
Decrease in restoration and reclamation accrual (22,243) (5,029)
Other non-cash items, net 46,480 70,194
----------- -----------
Cash flow used in operations, before changes in
operating working capital items (2,407,422) (241,967)
Effect of changes in operating working capital items -
(Increase) decrease in receivables (27,628) 564,632
Decrease in inventories 612,221 40,119
(Increase) decrease in prepaid and other
current assets (122,416) 8,352
Increase (decrease) in payables and accrued
liabilities 830,256 (2,592,901)
----------- -----------
Net cash used in operations (1,114,989) (2,221,765)
----------- -----------
Investing activities:
Increase in investments (130) (170)
Additions to property, plant and equipment -
Kingsville Dome (29,893) (52,616)
Rosita (215,994) (22,647)
Churchrock (166,473) (232,061)
Crownpoint (54,186) (156,795)
Other property (22,245) (24,619)
Increase in other assets - (733)
----------- -----------
Net cash used in investing activities (488,921) (489,641)
----------- -----------
Financing activities:
Proceeds from borrowings from related parties 90,000 -
Proceeds from other borrowings - 1,125,000
Payments and refinancings of principal (1,247,487) (656,517)
Issuance of common stock 277,265 17,640
----------- -----------
Net cash provided by (used in) financing activities (880,222) 486,123
----------- -----------
Net decrease in cash and cash equivalents (2,484,132) (2,225,283)
Cash and cash equivalents, beginning of period 2,527,600 2,529,741
----------- -----------
Cash and cash equivalents, end of period $ 43,468 $ 304,458
----------- -----------
</TABLE>
The accompanying notes to financial statements are an integral part of these
consolidated statements.
6
<PAGE> 7
URANIUM RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. The accompanying statements should be read
in conjunction with the audited financial statements included in the Company's
1994 Annual Report on Form 10-K. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months ended
March 31, 1995 are not necessarily indicative of the results that may be
expected for the full calendar year ending December 31, 1995.
2. LIQUIDITY ISSUES
During January 1995, when Oren L. Benton was Chairman of the Company's
Board of Directors, the Company transferred $1.0 million to certain companies
controlled by Mr. Benton, in connection with a planned joint venture to process
uranium. Because Mr. Benton and certain companies controlled by him (the
"Benton Companies") filed for bankruptcy in February, it is doubtful that the
Company will recover its investment. Also in January, Mr. Benton and the then
Chief Financial Officer of the Company transferred $1.08 million out of the
Company without the authorization of the Company's Board of Directors. The
$1.08 million has not been recovered and it is uncertain whether the Company's
efforts to pursue remedies for both transfers will be successful. The Company
has recorded losses for these transactions in the first quarter of 1995 of
$2.08 million.
The bankruptcy could also cause a review of the transactions entered into
by the Company with the Benton Companies that could potentially result in
claims against the Company. The Company is unable to assess what adverse
consequences, if any, might result from such review.
On May 10, 1995, the Company reached an agreement with Ryback Management
Company ("Ryback") on the principal terms of a proposed $6 million loan to the
Company by two mutual funds managed by Ryback. Proceeds will be used to pay
down existing payables and fund the reopening of the Company's Rosita and
Kingsville Dome production facilities. See "Proposed Convertible Debt
Financing" on page 8 herein.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY
For the quarter ended March 31, 1995, the Company's cash and cash
equivalents decreased $2,484,000 as compared to a decrease of $2,225,000 for
1994. The Company's uranium operations generated negative cash flow from
operations of $1,115,000 for the quarter ended March 31, 1995, in comparison to
negative cash flow from operations in the same period in 1994 of $2,222,000.
The increase in 1995 cash flow from operations resulted primarily from the
Company's inability to pay down existing payables.
7
<PAGE> 8
The Company's net working capital at March 31, 1995, was a negative
$5,226,000. This negative working capital includes $6,491,738 in a current
note payable to Union Bank of Switzerland (the "UBS Note"). Under the terms of
the note, the Company anticipates that it will within the next six months
completely repay the UBS Note by applying substantially all the proceeds from
its long-term sales contracts against this obligation. As a result of the
Company applying the proceeds from these contracts in satisfaction of the UBS
Note, the Company's only current source of cash flow will be from the proposed
convertible debt financing. See Note 2 - Liquidity Issues. The Company
defaulted on an interest payment of approximately $132,000 due on March 31,
1995 on the UBS Note. The Company cured the default on April 14, 1995.
The Company has begun certain development activities at its Rosita site in
anticipation of resuming production at this location in June, 1995. During the
first quarter of 1995, $216,000 in development expenditures were incurred at
Rosita. Capital expenditures to be incurred for the remainder of 1995 at Rosita
are expected to be $2,218,000. Pre-production capital expenditures of
$1,486,000 are anticipated to be expended at Kingsville Dome starting in
August, 1995 with anticipation of production commencing in January, 1996.
Additional capital expenditures including permitting, land acquisition and land
holding costs at Churchrock, Crownpoint and Vasquez are expected to amount to
approximately $542,000. Approximately $243,000 in capital expenditures were
incurred on these properties in the first quarter of 1995.
In mid-1994, the Company received notice from its largest uranium customer
of a reduction in the 1995 deliveries to be made under the sales contract with
that customer. The reduction was made due to reduced uranium requirements for
the customer's nuclear reactors. Deliveries under this contract will be
reduced to 55,000 pounds instead of the 240,000 pounds originally expected to
be delivered under the terms of the contract. This change in scheduled
deliveries under the contract will reduce the net income and cash flow
originally expected in 1995 by approximately $3,400,000 when compared to the
original base deliveries scheduled for the year. The 1995 deliveries represent
the final year of sales to this customer under this contract.
The Company continues actively to pursue obtaining new long-term matched
sales contracts. The Company has contracted to deliver amounts in the future
which are equal to its 1994 matched sales quota and has sales, pending contract
finalization, which would meet a majority of the Company's 1995 quota. The
Company must get at least one of its properties into production to take
advantage of the matched sales program. However, the Company is unable to
predict its liquidity situation on a long-term basis. Its future earnings and
cash flow are dependent upon its ability to enter into additional long-term
sales contracts at prices above its production costs.
PROPOSED CONVERTIBLE DEBT FINANCING
On May 10, 1995, the Company reached an agreement with Ryback on the
principal terms of a $6 million loan to the Company by two mutual funds managed
by Ryback. The loan will be for a term of three years, bear interest at an
annual rate of 6.5% per annum and will be convertible into shares of the
Company's common stock at an initial conversion price of $4.00 per share. The
loan will be non-callable and secured by a mortgage on the Company's Rosita and
Kingsville Dome uranium properties in Texas. In addition, the lender will
receive a three-year warrant to purchase 1.5 million shares of the Company's
common stock at an initial price of $4.00 per share. Following closing, the
Company will seek ratification of the loan by its shareholders. Failure to
receive shareholder ratification will constitute a default under the loan.
Consummation of the loan is subject to satisfaction of certain conditions,
including execution of mutually agreeable definitive documentation. If the
conditions are met, the parties expect to consummate the transaction within 30
days. The proceeds of the loan would be used to pay down existing payables and
fund the reopening of uranium production at the Company's Rosita and Kingsville
Dome production facilities.
ENVIRONMENTAL ASPECTS
The Company utilizes ISL solution mining technology as its only mining
method. Unlike conventional uranium mining companies, the Company's mining
technology does not create "tailings". Nevertheless, the Company is highly
regulated. Its primary environmental costs to date have been related to
obtaining and complying with environmental mining permits and, once mining is
completed, the reclamation and restoration of the surface areas and underground
8
<PAGE> 9
water quality to a condition consistent with applicable requirements. Accruals
for the estimated future cost of such activities are made on a per-pound basis
as part of production costs. See the Consolidated Statements of Operations for
the applicable provisions for such future costs. See also Note 1 -
"Restoration and Reclamation Costs" of Notes to Consolidated Financial
Statements in the Company's Form 10-K as of December 31, 1994.
RESULTS OF OPERATIONS
Revenues, earnings from operations and net income for the Company can
fluctuate significantly on a quarter to quarter basis during the year because
of the timing of deliveries requested by its utility customers. The Company's
customers have generally elected, where possible, to take delivery of the bulk
of the annual deliveries under their long term sales contracts later in each
year. Accordingly, operating results for any quarter or year-to-date period are
not necessarily comparable and may not be indicative of the results which may
be expected for future quarters or the entire year.
Three Months Ended March 31, 1995 and 1994
The following is a summary of the key operational and financial statistics
related to the Results of Operations:
<TABLE>
<CAPTION>
Three Months Ended
-------------------
1995 1994
-------- --------
(In Thousands)
<S> <C> <C>
Uranium Sales Revenue $ 1,251 $ 912
Total Pounds Delivered 66.3 48.8
Average Sales Price/Pound $ 18.88 $ 18.71
Pounds Produced -- --
Pounds Purchased/Borrowed -- 50
Average Production Cost of Produced Pounds $ -- $ --
Average Cost of Purchased/Borrowed Pounds $ -- $ 9.49
Average Cost of Produced Pounds Sold $ -- $ 14.11
Average Cost of Purchased Pounds Sold $ 9.25 $ 11.29
</TABLE>
Uranium sales revenues in 1995 increased by $339,000 from 1994 levels.
Deliveries in 1995 were higher than those in 1994 (66,250 pounds in 1995 versus
48,750 pounds in 1994).
Details of the cost of uranium sales were as follows:
<TABLE>
<CAPTION>
Three Months Ended
------------------
1995 1994
---- ----
(In Thousands)
<S> <C> <C>
Cost of purchased uranium $613 $531
Royalties and brokers' fees -- 1
Operating expenses 246 337
Provision for restoration and reclamation costs -- 1
Depreciation and depletion of uranium properties 40 72
---- ----
Total cost of uranium sales $899 $942
---- ----
</TABLE>
9
<PAGE> 10
The Company has had significant production from its Kingsville Dome and
Rosita properties since the startup of Kingsville Dome in 1988 and Rosita in
1990. Due to declines in the spot price of uranium to levels at or below the
Company's production costs, both of these facilities were placed on standby
since September 1990 for Kingsville Dome and March 1992 for Rosita. The
decline in production, and ultimately the shutdown of these two locations was
done to enable the Company to take advantage of the low spot market prices
available in order to purchase material to meet its long-term sales contract
delivery commitments. Since January 1995, spot market prices have increased
almost 30%. The Company has decided to commence production at Rosita in 1995
and commence pre-production development at Kingsville Dome towards production
in early 1996 because of the increase in the spot market prices and in order to
meet future deliveries under the Company's anticipated matched sales contracts.
Deliveries in the first quarter of 1995 consisted of 66,250 purchased
pounds, at an average cost per pound of $9.25. No uranium was purchased in
1995. Purchases of uranium in the first quarter of 1994 were made at an average
price of $9.49 per pound. Deliveries in 1994 consisted of 47,001 purchased
pounds, at an average cost per pound of $11.29 and 1,749 previously produced
pounds at $14.11 per pound. Operating expenses attributable to the sale of the
Company's produced pounds totaled approximately $13,000 for the first quarter
of 1994. Operating expenses and depreciation and depletion in the first
quarter of 1995 and 1994 include standby costs for Kingsville Dome and Rosita.
These costs have been recorded as direct charges to operations. Standby costs
for the first quarters of 1995 and 1994 where $286,000 and $394,000,
respectively.
The provision for restoration and reclamation in the first quarter of 1994
consists entirely of the $0.75 per pound provision for Rosita production sold
during the year of $1,300.
The first quarter 1995 provision for depreciation and depletion is
comprised entirely of Rosita and Kingsville Dome depreciation while on standby
of $40,000. The provision for depreciation and depletion in the first quarter
of 1994 was comprised of the $5.70 rate per pound ($10,000) for Rosita
production sold and Rosita and Kingsville Dome depreciation while on standby of
$62,000.
Corporate expenses consisting of general and administrative ("G & A")
expenses and depreciation of G & A fixed assets increased to $644,000 in the
first quarter of 1995 from $467,000 in the first quarter of 1994. This increase
resulted primarily from legal and accounting fees and other non-recurring
expenses relating to the bankruptcy proceedings of certain of the Benton
Companies and the Company's liquidity issues.
Loss from operations in the first quarter of 1995 was $2,373,000 compared
to a loss in the first quarter of 1994 of $497,000. This reduction was
attributable to a loss on the termination of a proposed joint venture of $1.0
million and a loss on a transfer to the Benton Companies of $1.08 million. See
Note 2 - Liquidity Issues for a further discussion.
Total interest costs in 1995, including capitalized amounts, decreased by
$24,000 when compared to 1994. This decrease from $182,000 in 1994 to $158,000
in 1995, was a result of a lower average outstanding debt balance in the
current year. Of the total interest costs, $3,000, and $180,000 were
capitalized in the 1995 and 1994 periods, respectively.
10
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
The Company defaulted on an interest payment of approximately $132,000
due on March 31, 1995 on the UBS Note. The Company cured the default
on April 14, 1995.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
<TABLE>
<S> <C>
10.1 Promissory Note in the amount of $65,000 dated
February 24, 1995 between URI, Inc. and the Company all
as the maker and Wallace M. Mays as lender
10.2 Promissory Note in the amount of $25,000 dated
March 27, 1995 between URI, Inc. and the Company all as
the maker and Wallace M. Mays as lender
10.3 Deed of Trust, Security Agreement and Financing
Statement dated March 27, 1995 between URI, Inc. as the
debtor and Wallace M. Mays as the secured party
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K.
None
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
URANIUM RESOURCES, INC.
Dated: May 19, 1995 By: /s/ WALLACE M. MAYS
Wallace M. Mays,
Director and Chief Executive Officer
(Principal Executive Officer)
Dated: May 19, 1995 By: /s/ PAUL K. WILLMOTT
Paul K. Willmott,
President, Director and Principal
Financial and Accounting Officer
12
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBITS DESCRIPTION PAGE
- -------- ----------- ------------
<S> <C> <C>
10.1 Promissory Note in the amount of $65,000 dated
February 24, 1995 between URI, Inc. and the Company all
as the maker and Wallace M. Mays as lender
10.2 Promissory Note in the amount of $25,000 dated
March 27, 1995 between URI, Inc. and the Company all as
the maker and Wallace M. Mays as lender
10.3 Deed of Trust, Security Agreement and Financing
Statement dated March 27, 1995 between URI, Inc. as the
debtor and Wallace M. Mays as the secured party
27 Financial Data Schedule
</TABLE>
E-1
<PAGE> 1
EXHIBIT 10.1
<PAGE> 2
PROMISSORY NOTE
(SECURED)
$65,000.00 February 24, 1995
Denver, Colorado
FOR VALUE RECEIVED, URANIUM RESOURCES, INC., a Delaware corporation and
URI, Inc., a Delaware corporation which is a wholly owned subsidiary of Uranium
Resources, Inc. (collectively referred to hereinafter as "Maker"), promises to
pay to the order of WALLACE M. MAYS, an individual resident of Denver, Colorado
("Lender"), at 490 Williams Street Parkway, Denver, Colorado, or at such other
place as Lender may designate from time to time, the principal amount of
Sixty-Five Thousand and No/100 Dollars ($65,000.00)(the "Principal Balance"),
together with interest thereon as hereinafter provided, in lawful money of the
United States of America. The Principal Balance hereof together with interest
is payable on demand ("Maturity Date"); provided, however, that the Lender
shall refrain from making demand until the earlier to occur of June 27, 1995 or
the raising of capital of not less than $1 million by Maker. This Note shall
be secured by certain mining properties owned by Maker in the State of Texas
which shall be subject to a deed of trust and security agreement (the "Deed of
Trust") dated March 27, 1995. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned thereto in the Deed of Trust.
INTEREST RATE:
The entire outstanding Principal Balance of this Note shall accrue
interest at a fluctuating rate per annum equal to the rate of interest
announced publicly by Citibank, N.A. in New York from time to time as its prime
rate (the "Prime Rate"), plus three percent (3%). Interest on the indebtedness
evidenced by this Note shall be calculated on the basis of a year of 365 days
and interest shall be computed at all times upon the unpaid Principal Balance.
PREPAYMENT:
All or any portion of the Principal Balance may be prepaid at any time and
from time to time, without premium or penalty but with accrued and unpaid
interest to the date of prepayment on the amount so prepaid.
GENERAL TERMS:
If the Principal Balance of this Note, accrued and unpaid interest and/or
other charges due hereunder are not paid when due either on demand, the
Maturity Date or such earlier date as herein provided or as a result of
acceleration, such sums will bear interest from the due date at a rate
("Default Rate") equal to five percent (5%) per annum in excess of the Prime
Rate, provided, however, that in no event shall the Default Rate be greater
than that allowed by law. The failure to timely pay any amount due and owing
under the terms of this Note shall be an Event of Default.
2
<PAGE> 3
If an Event of Default shall occur, the entire unpaid Principal Balance
hereof, together with any accrued interest, shall, at the option of Lender,
become immediately due and payable upon five (5) days prior written notice to
Maker and whether or not such option has been exercised, the outstanding
Principal Balance shall thereafter bear interest at the Default Rate. The
failure of Lender to exercise its rights hereunder upon the occurrence of one
or more Events of Default shall not constitute a waiver of its rights in the
event of any subsequent or continuing default. The remedies of Lender provided
herein, or in any instrument securing or guaranteeing payment hereof, at law or
in equity, shall be cumulative and concurrent, and may be pursued singly,
successively, or together at the sole discretion of Lender, and may be
exercised as often as occasion for such exercise shall occur, and the failure
to exercise any such right or remedy shall in no event be construed as a waiver
or release thereof. Maker agrees that if, and as often as, this Note is placed
in the hands of an attorney for collection or to defend or enforce any of
Lender's rights hereunder or under any instrument securing or guaranteeing
payment of this Note or to protect or foreclose upon the security for this
Note, Maker will pay to Lender its reasonable costs of collection or
enforcement, including without limitation, attorneys' fees and all court costs
and reasonable expenses incurred in connection therewith including those costs,
expenses and attorneys' fees incurred after the filing by or against the Maker
of any proceeding under any chapter of the Bankruptcy Code, Title 11 of the
Unites States Code, or similar federal or state statute, and whether incurred
in connection with the involvement of the Lender or any holder hereof as
creditor in such proceedings or otherwise.
For so long as Maker is not in default hereunder, all payments received by
Lender on this Note shall be applied as follows, regardless of any designation
elsewhere herein of such payments as principal, interest or other charges:
first, to the repayment of sums advanced by Lender pursuant to the terms of the
Deed of Trust for the payment of taxes, assessments, insurance premiums or
other charges against the collateral (together with interest thereon from the
date of advance until the date repaid), then the payment of any outstanding
costs of collection or enforcement, attorneys' fees, court costs and other
charges due hereunder, then to the payment of accrued but unpaid interest which
is then due and payable, and finally, to reduction of the outstanding Principal
Balance of this Note. From and after the occurrence of an Event of Default,
all payments received by Lender on this Note shall be applied by Lender to
attorneys' fees, court costs, costs of collection or enforcement, principal,
interest and/or other charges due hereunder or under the Deed of Trust in such
order as Lender shall determine in its sole discretion.
If the Maker shall sell, exchange, convey, alienate, lease, encumber or
otherwise dispose of (including without limitation a sale under contract) the
property which is the security for this Note, or any part thereof, or any
interest therein, or shall be divested of his title or any interest therein in
any manner whatsoever, either voluntarily or involuntarily, without the express
prior written consent of the Lender, then the entire unpaid balance of this
Note, irrespective of the maturity date otherwise expressly hereinabove, at the
option of the Lender and without demand or notice shall immediately become due
and payable.
All notices, demands, requests or other communications to be sent by one
party to the other hereunder or required by law shall be in writing and shall
be deemed to have been validly given or served by delivery of the same in
person to the intended addressee, or by depositing the same within Federal
Express or another reputable private courier service for next business day
delivery, or by depositing the same in
3
<PAGE> 4
the United States mail, postage prepaid, certified, return receipt requested,
addressed as follow:
Maker's Address: Uranium Resources, Inc.
URI, Inc.
Three Park Central, Suite 1100
1515 Arapahoe Street
Denver, Colorado 80202
Attn: Paul K. Willmott, President of
Uranium Resources, Inc.
Lender's Address: Wallace M. Mays
490 Williams Street Parkway
Denver, Colorado 80218
With a Copy to: Leonard N. Waldbaum, Esq.
Waldbaum, Corn, Koff, Berger & Cohen, P.C.
303 East Seventeenth Avenue
Suite 940
Denver, Colorado 80203
All notices, demands and requests shall be effective upon such personal
delivery, or one(1) business day after being deposited with the private courier
service, or two (2) business days after being deposited in the United States
mail as required above. Rejection or other refusal to accept or the inability
to deliver because of changed address to which notice was sent as herein
required shall be deemed to be receipt of the notice, demand or request sent.
By giving to the other party hereto at least five (5) business days' prior
written notice thereof in accordance with the provisions hereof, the parties
hereto shall have the right from time to time to change their respective
addresses and each shall have the right to specify as its address any other
address within the United States of America.
All agreements between Maker and Lender expressly are limited so that in
no event whatsoever, whether by reason of disbursement of the proceeds hereof
or otherwise, shall the amount paid or agreed to be paid by Maker to Lender for
the use, detention or forbearance of the amounts to be disbursed hereunder
exceed the highest lawful contractual rate of interest permissible under the
law which a court of competent jurisdiction, by a final, nonappealable order,
determines is applicable hereto. If fulfillment of any provision herein
contained at the time performance of such provisions becomes due involves
exceeding such highest lawful contractual rate, then IPSO FACTO, the obligation
to fulfill the same shall be reduced to such highest lawful contractual rate.
In determining whether the amount of interest contracted for, charged or
received with respect to this Note or the Deed of Trust exceeds the amount
permitted by applicable law, all sums paid or agreed to be paid to the Lender
for the use, forbearance, or detention of the indebtedness of the Maker to the
Lender shall, to the extent permitted by applicable law, be amortized, pro
rated, allocated and spread throughout the full term of this Note until payment
in full so that the rate of interest is uniform throughout its term. If by any
circumstance the Lender shall ever receive as interest, an amount which would
exceed such highest lawful contractual rate, the amount which may be deemed
excessive interest shall be applied to the principal of the indebtedness
evidenced hereby as of the day such payment was received and not to interest.
The terms and provisions of this paragraph shall control all other terms and
provisions contained herein, and in any document or instrument securing or
guaranteeing
4
<PAGE> 5
the indebtedness evidenced by this Note. If any provision of this Note or the
application thereof to any party or encumbrance is held invalid or
unenforceable, the remainder of this Note and the application of such provision
to other parties or circumstances shall not be affected thereby, the provisions
of this Note being severable in any such instance.
Time is of the essence of this Note. Any waiver of any payment hereunder
or under the Deed or Trust securing this Note at any time, shall not, at any
other time, be taken to be a waiver of the terms of this Note, or the Deed of
Trust securing it. On failure of the Maker in the performance of any agreement
contained in the Deed of Trust or upon insolvency, appointment of a Receiver of
any part of the property of, assignment for benefit of creditors by, or the
commencement of any such proceedings by or against the Maker, all sums
hereunder may become due and payable at once at the option of the Lender or
holder(s) of this Note. Failure to exercise the option to accelerate shall not
constitute a waiver of the right to exercise the same in the event of any
subsequent default.
Maker, endorsers, sureties, guarantors and all persons who may become
liable for all or any part of this obligation, severally expressly waive
demand, protest, presentment and notice of dishonor and consent to any
extension of time (whether one or more) of the payment hereof, release of all
or any part of the security for the payment hereof and the taking or release of
other or additional security. Such extensions or release of any party liable
may be made at any time and from time to time without notice to any such party
and without discharging such party's liability hereunder or under any guaranty
hereof.
Whenever used herein, the words "Maker" and "Lender" shall be deemed to
include the respective successors and assigns of Maker and Lender. This Note
is issued by Maker and accepted by Lender pursuant to a lending transaction
negotiated and consummated in Denver, Colorado and this Note is to be governed
by and construed according to the laws of the State of Colorado. Exclusive
venue for any action arising out of this Note shall be in Denver County,
Colorado, and venue in any other jurisdiction is hereby waived by the parties.
The captions and headings of the various sections of this Note are for
convenience only, and are not to be construed as confining or limiting in any
way the scope or intent of the provisions hereof.
IN WITNESS WHEREOF, Maker has executed this instrument on the date first
above written.
MAKER:
URI, INC., a Delaware corporation URANIUM RESOURCES, INC., a Delaware
corporation
BY: Paul K. Willmott BY: Paul K. Willmott
NAME: Paul K. Willmott NAME: Paul K. Willmott
TITLE: President TITLE: President
5
<PAGE> 1
EXHIBIT 10.2
<PAGE> 2
PROMISSORY NOTE
(SECURED)
$25,000.00 March 27, 1995
Denver, Colorado
FOR VALUE RECEIVED, URANIUM RESOURCES, INC., a Delaware corporation and
URI, Inc., a Delaware corporation which is a wholly owned subsidiary of Uranium
Resources, Inc. (collectively referred to hereinafter as "Maker"), promises to
pay to the order of WALLACE M. MAYS, an individual resident of Denver, Colorado
("Lender"), at 490 Williams Street Parkway, Denver, Colorado, or at such other
place as Lender may designate from time to time, the principal amount of
Twenty-Five Thousand and No/100 Dollars ($25,000.00)(the "Principal Balance"),
together with interest thereon as hereinafter provided, in lawful money of the
United States of America. The Principal Balance hereof together with interest
is payable on demand ("Maturity Date"); provided, however, that the Lender
shall refrain from making demand until the earlier to occur of June 27, 1995 or
the raising of capital of not less than $1 million by Maker. This Note shall
be secured by certain mining properties owned by Maker in the State of Texas
which shall be subject to a deed of trust and security agreement (the "Deed of
Trust") dated March 27, 1995. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned thereto in the Deed of Trust.
INTEREST RATE:
The entire outstanding Principal Balance of this Note shall accrue
interest at a fluctuating rate per annum equal to the rate of interest
announced publicly by Citibank, N.A. in New York from time to time as its prime
rate (the "Prime Rate"), plus three percent (3%). Interest on the indebtedness
evidenced by this Note shall be calculated on the basis of a year of 365 days
and interest shall be computed at all times upon the unpaid Principal Balance.
PREPAYMENT:
All or any portion of the Principal Balance may be prepaid at any time and
from time to time, without premium or penalty but with accrued and unpaid
interest to the date of prepayment on the amount so prepaid.
GENERAL TERMS:
If the Principal Balance of this Note, accrued and unpaid interest and/or
other charges due hereunder are not paid when due either on demand, the
Maturity Date or such earlier date as herein provided or as a result of
acceleration, such sums will bear interest from the due date at a rate
("Default Rate") equal to five percent (5%) per annum in excess of the Prime
Rate, provided, however, that in no event shall the Default Rate be greater
than that allowed by law. The failure to timely pay any amount due and owing
under the terms of this Note shall be an Event of Default.
2
<PAGE> 3
If an Event of Default shall occur, the entire unpaid Principal Balance
hereof, together with any accrued interest, shall, at the option of Lender,
become immediately due and payable upon five (5) days prior written notice to
Maker and whether or not such option has been exercised, the outstanding
Principal Balance shall thereafter bear interest at the Default Rate. The
failure of Lender to exercise its rights hereunder upon the occurrence of one
or more Events of Default shall not constitute a waiver of its rights in the
event of any subsequent or continuing default. The remedies of Lender provided
herein, or in any instrument securing or guaranteeing payment hereof, at law or
in equity, shall be cumulative and concurrent, and may be pursued singly,
successively, or together at the sole discretion of Lender, and may be
exercised as often as occasion for such exercise shall occur, and the failure
to exercise any such right or remedy shall in no event be construed as a waiver
or release thereof. Maker agrees that if, and as often as, this Note is placed
in the hands of an attorney for collection or to defend or enforce any of
Lender's rights hereunder or under any instrument securing or guaranteeing
payment of this Note or to protect or foreclose upon the security for this
Note, Maker will pay to Lender its reasonable costs of collection or
enforcement, including without limitation, attorneys' fees and all court costs
and reasonable expenses incurred in connection therewith including those costs,
expenses and attorneys' fees incurred after the filing by or against the Maker
of any proceeding under any chapter of the Bankruptcy Code, Title 11 of the
Unites States Code, or similar federal or state statute, and whether incurred
in connection with the involvement of the Lender or any holder hereof as
creditor in such proceedings or otherwise.
For so long as Maker is not in default hereunder, all payments received by
Lender on this Note shall be applied as follows, regardless of any designation
elsewhere herein of such payments as principal, interest or other charges:
first, to the repayment of sums advanced by Lender pursuant to the terms of the
Deed of Trust for the payment of taxes, assessments, insurance premiums or
other charges against the collateral (together with interest thereon from the
date of advance until the date repaid), then the payment of any outstanding
costs of collection or enforcement, attorneys' fees, court costs and other
charges due hereunder, then to the payment of accrued but unpaid interest which
is then due and payable, and finally, to reduction of the outstanding Principal
Balance of this Note. From and after the occurrence of an Event of Default,
all payments received by Lender on this Note shall be applied by Lender to
attorneys' fees, court costs, costs of collection or enforcement, principal,
interest and/or other charges due hereunder or under the Deed of Trust in such
order as Lender shall determine in its sole discretion.
If the Maker shall sell, exchange, convey, alienate, lease, encumber or
otherwise dispose of (including without limitation a sale under contract) the
property which is the security for this Note, or any part thereof, or any
interest therein, or shall be divested of his title or any interest therein in
any manner whatsoever, either voluntarily or involuntarily, without the express
prior written consent of the Lender, then the entire unpaid balance of this
Note, irrespective of the maturity date otherwise expressly hereinabove, at the
option of the Lender and without demand or notice shall immediately become due
and payable.
All notices, demands, requests or other communications to be sent by one
party to the other hereunder or required by law shall be in writing and shall
be deemed to have been validly given or served by delivery of the same in
person to the intended addressee, or by depositing the same within Federal
Express or another reputable private courier service for next business day
delivery, or by depositing the same in
3
<PAGE> 4
the United States mail, postage prepaid, certified, return receipt requested,
addressed as follow:
Maker's Address: Uranium Resources, Inc.
URI, Inc.
Three Park Central, Suite 1100
1515 Arapahoe Street
Denver, Colorado 80202
Attn: Paul K. Willmott, President of
Uranium Resources, Inc.
Lender's Address: Wallace M. Mays
490 Williams Street Parkway
Denver, Colorado 80218
With a Copy to: Leonard N. Waldbaum, Esq.
Waldbaum, Corn, Koff, Berger & Cohen, P.C.
303 East Seventeenth Avenue
Suite 940
Denver, Colorado 80203
All notices, demands and requests shall be effective upon such personal
delivery, or one(1) business day after being deposited with the private courier
service, or two (2) business days after being deposited in the United States
mail as required above. Rejection or other refusal to accept or the inability
to deliver because of changed address to which notice was sent as herein
required shall be deemed to be receipt of the notice, demand or request sent.
By giving to the other party hereto at least five (5) business days' prior
written notice thereof in accordance with the provisions hereof, the parties
hereto shall have the right from time to time to change their respective
addresses and each shall have the right to specify as its address any other
address within the United States of America.
All agreements between Maker and Lender expressly are limited so that in
no event whatsoever, whether by reason of disbursement of the proceeds hereof
or otherwise, shall the amount paid or agreed to be paid by Maker to Lender for
the use, detention or forbearance of the amounts to be disbursed hereunder
exceed the highest lawful contractual rate of interest permissible under the
law which a court of competent jurisdiction, by a final, nonappealable order,
determines is applicable hereto. If fulfillment of any provision herein
contained at the time performance of such provisions becomes due involves
exceeding such highest lawful contractual rate, then IPSO FACTO, the obligation
to fulfill the same shall be reduced to such highest lawful contractual rate.
In determining whether the amount of interest contracted for, charged or
received with respect to this Note or the Deed of Trust exceeds the amount
permitted by applicable law, all sums paid or agreed to be paid to the Lender
for the use, forbearance, or detention of the indebtedness of the Maker to the
Lender shall, to the extent permitted by applicable law, be amortized, pro
rated, allocated and spread throughout the full term of this Note until payment
in full so that the rate of interest is uniform throughout its term. If by any
circumstance the Lender shall ever receive as interest, an amount which would
exceed such highest lawful contractual rate, the amount which may be deemed
excessive interest shall be applied to the principal of the indebtedness
evidenced hereby as of the day such payment was received and not to interest.
The terms and provisions of this paragraph shall control all other terms and
provisions contained herein, and in any document or instrument securing or
guaranteeing
4
<PAGE> 5
the indebtedness evidenced by this Note. If any provision of this Note or the
application thereof to any party or encumbrance is held invalid or
unenforceable, the remainder of this Note and the application of such provision
to other parties or circumstances shall not be affected thereby, the provisions
of this Note being severable in any such instance.
Time is of the essence of this Note. Any waiver of any payment hereunder
or under the Deed or Trust securing this Note at any time, shall not, at any
other time, be taken to be a waiver of the terms of this Note, or the Deed of
Trust securing it. On failure of the Maker in the performance of any agreement
contained in the Deed of Trust or upon insolvency, appointment of a Receiver of
any part of the property of, assignment for benefit of creditors by, or the
commencement of any such proceedings by or against the Maker, all sums
hereunder may become due and payable at once at the option of the Lender or
holder(s) of this Note. Failure to exercise the option to accelerate shall not
constitute a waiver of the right to exercise the same in the event of any
subsequent default.
Maker, endorsers, sureties, guarantors and all persons who may become
liable for all or any part of this obligation, severally expressly waive
demand, protest, presentment and notice of dishonor and consent to any
extension of time (whether one or more) of the payment hereof, release of all
or any part of the security for the payment hereof and the taking or release of
other or additional security. Such extensions or release of any party liable
may be made at any time and from time to time without notice to any such party
and without discharging such party's liability hereunder or under any guaranty
hereof.
Whenever used herein, the words "Maker" and "Lender" shall be deemed to
include the respective successors and assigns of Maker and Lender. This Note
is issued by Maker and accepted by Lender pursuant to a lending transaction
negotiated and consummated in Denver, Colorado and this Note is to be governed
by and construed according to the laws of the State of Colorado. Exclusive
venue for any action arising out of this Note shall be in Denver County,
Colorado, and venue in any other jurisdiction is hereby waived by the parties.
The captions and headings of the various sections of this Note are for
convenience only, and are not to be construed as confining or limiting in any
way the scope or intent of the provisions hereof.
IN WITNESS WHEREOF, Maker has executed this instrument on the date first
above written.
MAKER:
URI, INC., a Delaware corporation URANIUM RESOURCES, INC., a Delaware
corporation
BY: Paul K. Willmott BY: Paul K. Willmott
NAME: Paul K. Willmott NAME: Paul K. Willmott
TITLE: President TITLE: President
5
<PAGE> 1
EXHIBIT 10.3
<PAGE> 2
DEED OF TRUST, SECURITY AGREEMENT
AND FINANCING STATEMENT
THIS INSTRUMENT COVERS THE INTEREST OF DEBTOR IN MINERALS OR THE LIKE BEFORE
EXTRACTION AND THE SECURITY INTEREST CREATED BY THIS INSTRUMENT ATTACHES TO
SUCH MINERALS AS EXTRACTED AND TO THE ACCOUNTS RESULTING FROM THE SALE THEREOF
AT THE MINEHEAD. THIS INSTRUMENT COVERS THE INTEREST OF DEBTOR IN FIXTURES.
THIS FINANCING STATEMENT IS TO BE FILED FOR RECORD, AMONG OTHER PLACES, IN THE
REAL ESTATE RECORDS. PRODUCTS OF THE COLLATERAL ARE ALSO COVERED.
THE STATE OF TEXAS
COUNTIES OF DUVAL
AND KLEBERG
This instrument is executed and delivered by URI, Inc. ("Debtor") whose
address is 1515 Arapahoe Street, Denver, Colorado 80202, to Charley George
Mays, Trustee, whose address is 5310 Windy Hill, Greenville, Texas 75401, for
the benefit of Wallace M. Mays ("Secured Party") whose address is 490 Williams
Street Parkway, Denver, Colorado 80218.
ARTICLE I
DEFINITIONS
1.1 "COLLATERAL" means the Realty Collateral, Personalty Collateral
and Fixture Collateral.
1.2 "EVENT OF DEFAULT" shall have the meaning set forth in paragraph
4.1.
1.3 "FIXTURE COLLATERAL" means all of Debtor's interest now owned or
hereafter acquired in and to all Fixture Operating Equipment and all proceeds,
products, renewals, increases, profits, substitutions, replacements, additions,
amendments and accessions thereof, thereto or therefor.
1.4 "FIXTURE OPERATING EQUIPMENT" means any of the items described in
the first sentence of paragraph 1.9 which as a result of being incorporated
into realty or structures or improvements located therein or thereon, with the
intent that they remain there permanently, constitute fixtures under the laws
of the state in which such equipment is located.
1.5 "MINERALS" means uranium in whatever form (including, without
limitation, uranium ore and triuranium octoxide) and all other metallic and
non-metallic minerals in and under or attributable to and that may be
<PAGE> 3
produced, obtained or secured from, the lands covered and affected by the
Mineral Properties, and all products produced therefrom.
1.6 "OBLIGATIONS" means (a) all indebtedness and obligations of
Debtor under the Notes; and (b) all renewals, extensions, amendments, and
substitutions of the above whether or not Debtor executes any renewal or
extension agreement.
<PAGE> 4
1.7 "MINERAL PROPERTY OR PROPERTIES" means (a) the fee lands,
unpatented and patented mining claims, mining leases and other mineral
interests described in Exhibit "A" attached hereto (b) any other interest in,
to or relating to (i) all or any part of the land described either in Exhibit
"A" or in the documents described in Exhibit "A" or (ii) any of the estates,
property rights or other interests referred to above, and (c) any instrument
executed in amendment, correction, modification, confirmation, renewal or
extension of the same.
1.8 "NOTES" means collectively, (a) that certain promissory note dated
February 24, 1995, executed by Debtor and Uranium Resources, Inc. and payable
to the order of Secured Party in the original principal amount of $65,000.00;
(b) that certain promissory note dated March 27, 1995, executed by Debtor and
Uranium Resources, Inc. and payable to the order of Secured Party in the
original principal amount of $25,000.00, and all renewals, extensions,
substitutions and replacements thereof; and (c) up to an additional $109,000
which may be advanced from time to time by Secured Party to Debtor and/or
Uranium Resources, Inc.
1.9 "OPERATING EQUIPMENT" means all surface or subsurface machinery,
equipment, facilities, supplies or other property of whatsoever kind or nature
(excluding drilling rigs, trucks, automotive equipment or other property taken
to the premises for temporary uses) now or hereafter located on any of the
property affected by the Mineral Properties which are required for the
production, treatment, storage or transportation of Minerals, including,
without limitation, the in situ solution leach mining facilities now existing
or hereafter acquired or constructed, consisting of processing plants, process
machinery, and equipment used in connection with such processing plants.
1.10 "PERMITTED LIENS" shall mean the liens and encumbrances described
on Exhibit "B" attached hereto.
1.11 "PERSONALTY COLLATERAL" means all of Debtor's interest now owned
or hereafter acquired in and to (i) all Operating Equipment, (ii) all proceeds
and products of the Realty Collateral, and (iii) all proceeds, products,
renewals, increases, profits, substitutions, replacements, additions,
amendments and accessions of, to or for all of the property described in this
subparagraph.
1.12 "REALTY COLLATERAL" means all of Debtor's interest now owned or
hereafter acquired in and to (i) the Mineral Properties; (ii) water rights,
ditch and ditch rights, reservoir and reservoir rights, and (iii) all unsevered
and unextracted Minerals (even though Debtor's interest therein be incorrectly
described in, or a description of a part or all of such interest be omitted
from, Exhibit "A").
<PAGE> 5
ARTICLE II
CREATION OF SECURITY
2.1 CONVEYANCE AND GRANT OF LIEN. To secure the payment of the
Obligations, Debtor, by this instrument hereby grants, bargains, sells and
conveys unto Trustee in trust for the benefit of Secured Party, the Realty
Collateral and the Fixture Collateral.
To have and to hold the Realty Collateral and Fixture Collateral unto the
Trustee and his successors or substitutes in trust and to his and their assigns
forever, together with all and singular the rights and appurtenances thereto in
anywise belonging, to secure payment of the Obligations and the performance of
the covenants of Debtor contained in this instrument, subject to all of the
terms and conditions of this instrument and to the Permitted Liens. Debtor
does hereby bind itself, its successors and permitted assigns, to warrant and
forever defend all and singular the Realty Collateral and the Fixture
Collateral unto the Trustee and his successors or substitutes in this Trust,
against every person whomsoever, lawfully claiming or to claim the same, or any
part thereof, by, through or under Debtor, provided, however, that if Debtor
shall pay or cause to be paid the Obligations, as and when the same shall
become due and payable, then the liens, security interests, estates and rights
granted hereby shall terminate, in accordance with the provisions hereof,
otherwise same shall remain in full force and effect.
2.2 SECURITY INTEREST. For the same consideration and to further
secure the Obligations, Debtor hereby grants to Secured Party a security
interest in and to the Personalty Collateral and the Fixture Collateral.
ARTICLE III
DEBTOR'S WARRANTIES AND COVENANTS
3.1 PAYMENT OF OBLIGATIONS. Debtor covenants that Debtor shall timely
pay and perform the obligations secured by this instrument.
3.2 WARRANTIES. Debtor warrants as follows:
(a) Title to Collateral. Debtor has good and marketable title
to the Collateral free from all liens, security interests or other encumbrances
except as specifically set forth in Exhibit "A", or as permitted by the
provisions of Article 3.4(h) below. The representations of Debtor as to
quantum and nature of the interest of Debtor in and to the Mineral Properties
set forth on Exhibit "A" includes the entire interest of Debtor in the Mineral
Properties and are complete and accurate in all respects. All patented and
unpatented mining claims included in the Mineral Properties have been properly
located and maintained.
(b) Production Burdens, Taxes, Expenses and Revenues. All
rentals, royalties, overriding royalty interests and other payments due under
or with respect to the Mineral Properties have been properly and timely paid
except for any such payments that are being contested in good faith by
<PAGE> 6
appropriate proceedings and for which adequate reserves have been established.
All ad valorem, property, production, severence and other taxes based on or
measured by the ownership of the Properties or the production of Minerals
therefrom have been properly and timely paid except for any such payments that
are being contested in good faith by appropriate proceedings and for which
adequate reserves have been established. All of the proceeds from the sale of
Minerals are being properly and timely paid to Debtor by the purchasers thereof
without suspense.
(c) Production Balances. No person is entitled to receive
deliveries of Minerals at any time after the date hereof without paying at such
time the full contract price therefor.
3.3 FURTHER ASSURANCES. Debtor covenants that Debtor shall execute
and deliver such other and further instruments, and shall do such other and
further acts as in the reasonable opinion of Secured Party may be necessary or
desirable to carry out more effectively the purposes of this instrument,
including, without limiting the generality of the foregoing, (i) prompt
correction of any defect in the execution or acknowledgment of this instrument,
any written instrument comprising part or all of the Obligations, or any other
document used in connection herewith; (ii) prompt correction of any defect
which may hereafter be discovered in the title to the Collateral; and (iii)
prompt payment when due and owing of all taxes, assessments and governmental
charges imposed on this instrument, upon the interest of Secured Party or the
Trustee, except those that are being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established.
3.4 OPERATION OF MINERAL PROPERTIES. As long as any of the
Obligations remain unpaid or unsatisfied and whether or not Debtor is the
operator of the Mineral Properties, Debtor shall (at Debtor's own expense)
(a) not enter into any contract or agreement which
materially adversely affects the Collateral;
(b) cause each of the leases and mining claims and any
water rights, rights-of-way, easements and privileges comprising any part of
the Collateral to be kept in full force and effect by the payment of whatever
sums may become payable and by the fulfillment of other obligations that may be
required to prevent forfeiture or termination except for forfeitures and
terminations in the ordinary course of business when no Event of Default is
continuing of those water rights, rights-of-way, easements, privileges, leases
and mining claims which are no longer necessary or desirable in the conduct of
Debtor's business;
(c) cause the Mineral Properties to be maintained,
developed, and continuously operated for the production, processing and
marketing of Minerals in a good and minerlike manner as a prudent operator
would in accordance with (i) generally accepted practices, (ii) applicable
leases and contracts, and (iii) all applicable Federal, state and local laws,
rules and regulations; except where failure to do any of the foregoing would
not have a material advance effect on Debtor's business, operations, financial
condition or properties ("Material Adverse Effect") and would not cause any
forfeiture of any part of the Collateral;
<PAGE> 7
(d) promptly pay of cause to be paid when due and owing
(i) all rentals and royalties payable in respect of the Collateral; (ii) all
expenses incurred in or arising from the operation or development of the
Collateral; (iii) all taxes, assessments and governmental charges imposed upon
the Collateral, upon the income and profits from any of the Collateral, or upon
Secured Party because of its interest therein; and (iv) all local, state and
federal taxes, payments and contributions for which Debtor may be liable;
except where failure to do any of the foregoing would not have a Material
Adverse Effect and would not cause any forfeiture or termination of any part of
the Collateral;
(e) promptly take all action necessary to enforce or
secure the observance or performance of any term, covenant, agreement or
condition to be observed or performed by third parties under any material
contract other than sales contracts, or any part thereof, or to exercise any of
its rights, remedies, powers and privileges under any material contract, all in
accordance with the respective terms thereof;
(f) obtain and maintain in full force and effect all
licenses, permits, franchises and other governmental and private authorizations
and rights necessary in the operation of Debtor's business;
(g) permit, and do all things necessary to enable, the
Trustee and Secured Party (through its agents and employees) to enter upon the
Mineral Properties at any reasonable time for the purpose of investigating and
inspecting the condition and operations of the Collateral;
(h) cause the Collateral to be kept from and clear of
liens, charges, security interests and encumbrances of every character other
than Permitted Liens; and
(i) properly and timely perform all assessment work
required to maintain any mining claims constituting any part of the Mineral
Properties and properly and timely file and record all reports of such
assessment work.
3.5 RECORDING. Debtor shall promptly (at Debtor's own expense)
record, register, deposit and file this and every other instrument in addition
or supplement hereto, including applicable financing statements, in such
offices and places within the state where the Collateral is located and at such
times and as often as may be reasonably necessary to create, perfect, maintain
and preserve the lien and security interest herein created as a first lien or
prior security interest on real or personal property as the case may be, and
otherwise shall do and perform all matters or things necessary to be done or
observed by reason of any applicable law or regulation or any state or of the
United States or any other competent authority for the purpose of effectively
creating, perfecting, maintaining and preserving the lien and security interest
created hereby in and on the Collateral.
<PAGE> 8
ARTICLE IV
DEFAULT
4.1 EVENTS OF DEFAULT. Debtor will be in default under this
instrument upon the occurrence of any of the following events (each such event,
an "Event of Default"):
(a) Debtor shall fail to pay when due the Obligations and
such failure shall continue for a period of sixty (60) days after written
notice thereof is delivered to Debtor.
(b) The Debtor shall fail to perform, observe, or comply
with any covenant, agreement, or term contained in this Agreement (other than
covenants to pay the Obligations) and such failure shall continue for a period
of sixty (60) days after notice thereof to Borrower.
(c) The Debtor shall commence a voluntary proceeding
seeking liquidation, reorganization, or other relief with respect to itself or
its debts under any bankruptcy, insolvency, or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or a substantial part of
its property or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment for the
benefit of creditors or shall generally fail to pay its debts as they become
due or shall take any corporate action to authorize any of the foregoing.
(d) An involuntary proceeding shall be commenced against
the Debtor seeking liquidation, reorganization, or other relief with respect to
it or its debts under any bankruptcy, insolvency, or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official for it or a substantial part
of its property, and such involuntary proceeding shall remain undismissed and
unstayed for a period of ninety (90) days.
4.2 RIGHTS UPON DEFAULT. If any Event of Default has occurred and is
continuing, Secured Party may, at its option, declare the entire unpaid
principal of and accrued and unpaid interest on the obligations to be forthwith
due and payable, without (except as provided in the Notes) any protest,
presentment, demand, notice of intent to accelerate, notice of acceleration or
further notice of any kind, all of which are hereby expressly waived by Debtor,
and/or exercise any other rights and remedies available to Secured Party.
ARTICLE V
SECURED PARTY'S RIGHTS
5.1 RIGHTS TO REALTY COLLATERAL UPON DEFAULT
(a) Operation of property by Secured Party. Upon the occurrence
and during the continuance of an Event of Default, and in addition to all other
rights of Secured Party, Secured Party shall have the following rights and
powers (but no obligation), at the Debtor's expense:
<PAGE> 9
(i) To enter upon and take possession of any of
the Realty Collateral, to exclude Debtor therefrom, and to hold, use,
administer, manage and operate the same to the extent that Debtor could do so;
(ii) To operate the Realty Collateral, without any
liability to Debtor in connection with such operations, except for failure to
use ordinary care in such operations; and
(iii) To the extent that Debtor could do so, to
collect, receive and receipt for all Minerals produced and sold from the Realty
Collateral, to make repairs, to purchase machinery and equipment, to conduct
workover operations, to drill additional wells, and to exercise every power,
right and privilege of Debtor with respect to the Realty Collateral.
When and if the reasonable expenses of such operation and
development (including costs of unsuccessful workover operations or additional
wells) and the other Obligations have been paid, the Realty Collateral shall be
returned to Debtor (providing there has been no foreclosure sale).
(b) Judicial Proceedings. Upon the occurrence and during the
continuance of an Event of Default, the Trustee, in lieu of or in addition to
exercising the power of sale hereafter given, may proceed by a suit or suits,
in equity or at law (i) for the specific performance of any covenant or
agreement herein contained or in aid of the execution of any power herein
granted, (ii) for the appointment of a receiver pending any foreclosure
hereunder or the sale of the Realty Collateral, or (iii) for the enforcement of
any other appropriate legal or equitable remedy; and further, in lieu of the
non-judicial power of sale hereafter given for Collateral located in the State
of Texas, the Trustee may proceed by suit for a sale of the Realty Collateral.
(c) Foreclosure by Private Power of Sale of Collateral. Upon
the occurrence and during the continuance of an Event of Default, the Trustee
shall have the right and power to sell, as the Trustee may elect, all or a
portion of the Collateral at one or more sales as an entirety or in parcels, in
accordance with Section 51.002 of the Texas Property Code. Debtor hereby
designates as Debtor's address for the purpose of notice the address set out at
the end of this instrument. Any purchaser or purchasers will be provided with
a general warranty conveyance, subject to Permitted Liens, binding Debtor and
Debtor's successors and assigns. Sale of a part of the Realty Collateral will
not exhaust the power of sale, and sales may be made from time to time until
all of the Realty Collateral is sold or all of the Obligations are paid in
full. The Trustee will have the authority to appoint an attorney- in-fact to
act as trustee in conducting the foreclosure sale and executing a deed to the
purchaser or purchasers.
(d) Certain Aspects of Sale. Secured Party will have the right
to become the purchaser at any foreclosure sale and to credit the then
outstanding balance of the Obligations against the amount payable by Secured
Party as purchaser at such sale. Recitals contained in any conveyance to any
purchaser or purchasers at any sale made hereunder will constitute prima facie
evidence of the failure of Debtor to pay the Obligations or perform its
covenants under this instrument, advertisement and conduct of such sale in the
manner provided herein, appointment of any successor-Trustee hereunder and the
<PAGE> 10
truth and accuracy of all other matters stated therein. Debtor hereby
irrevocably appoints Trustee to be the attorney of Debtor and in the name and
on behalf of Debtor to execute and deliver upon the occurrence and during the
continuance of an Event of Default any deeds, transfers, conveyances,
assignments, assurances and notices which Debtor is required to execute and
deliver and do and perform any and all such acts and things which Debtor is
required to do and perform under the covenants herein contained and generally
to use the name of Debtor in the exercise of all or any of the powers hereby
conferred on Trustee. Upon any sale, whether under the power of sale hereby
given or by virtue of judicial proceedings, it shall not be necessary for
Trustee or any public officer acting under execution or by order of court, to
have physically present or constructively in his possession any of the
Collateral, and Debtor hereby agrees to deliver all of such personal property
to the purchaser or purchasers at such sale at the date of sale and if it
should be impossible or impracticable to make actual delivery of such property,
then the title and right of possession to such property shall pass to the
purchaser or purchasers at such sale as completely as if the same had been
actually present and delivered.
(e) Receipt to Purchaser. Upon any sale made under the power
of sale herein granted, the receipt of the Trustee will be sufficient discharge
to the purchaser or purchasers at any sale for its purchase money, and such
purchaser or purchasers, will not, after paying such purchase money and
receiving such receipt of the Trustee, be obligated to see to the application
of such purchase money or to be responsible for any loss, misapplication or
non-application thereof.
(f) Effect of Sale. Any sale or sales of the Realty
Collateral will operate to divest all right, title, interest, claim and demand
whatsoever, either at law or in equity, of Debtor, in and to the premises and
the Realty Collateral sold, and will be a perpetual bar both at law and in
equity, against Debtor, Debtor's successors or assigns, and against any and all
persons claiming or who shall thereafter claim, all or any of the Realty
Collateral sold by, through or under Debtor, or Debtor's successors or assigns.
Nevertheless, if requested by the Trustee so to do, Debtor shall join in the
execution and delivery of all proper conveyances, assignments and transfers of
the property so sold. The purchaser or purchasers at the foreclosure sale will
receive as incident to his, its or their own ownership, immediate possession of
the Realty Collateral purchased and the Debtor agrees that if Debtor retains
possession of the Realty Collateral or any part thereof subsequent to such
sale, Debtor will be considered a tenant at sufferance of the purchaser or
purchasers and will be subject to eviction and removal by any lawful means,
with or without judicial intervention, and all damages by reason thereof are
hereby expressly waived.
(g) Application of Proceeds. The proceeds of any sale of the
Realty Collateral or any part thereof, whether under the power of sale herein
granted and conferred or by virtue of judicial proceedings, will be applied (A)
first, to the payment of all reasonable out-of-pocket expenses incurred by the
Trustee in the performance of his duties including, without limiting the
generality of the foregoing, court costs, compensation of agents and employees,
and legal fees, plus expenses of any entry or taking of possession, sale,
advertising or conveyance thereof; (B) second, to the payment of the
Obligations; and (C) third, the balance, if any, thereafter
<PAGE> 11
remaining will be paid to Debtor or Debtor's successors or assigns as their
interests may appear. Debtor shall remain liable for any deficiency remaining
after the sale.
5.2 RIGHTS TO PERSONALTY COLLATERAL UPON DEFAULT. Upon the occurrence
and during the continuance of an Event of Default, Secured Party may proceed
against the Personalty Collateral in accordance with the rights and remedies
granted herein with respect to the Realty Collateral, or will have all rights
and remedies granted by the Uniform Commercial Code and this instrument. If an
Event of Default has occurred and is continuing, Secured Party shall have the
right to take possession of the Personalty Collateral, and for this purpose
Secured Party may enter upon any premises on which any or all of the Personalty
Collateral is situated and, to the extent that Debtor could do so, take
possession of and operate the Personalty Collateral or remove it therefrom.
Secured Party may require Debtor to assemble the Personalty Collateral and make
it available to Secured Party at a place to be designated by Secured Party
which is reasonably convenient to both parties. Unless the Personalty
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, Secured Party will send Debtor 10
days prior written notice of the time and place of any public sale or of the
time after which any private sale or other disposition of the Personalty
Collateral is to be made. This requirement of sending reasonable notice will
be met if such notice is mailed, postage prepaid, to Debtor at the address
designated in Section 6.12 hereof (or such other address as has been designated
as provided herein) at least ten days before the time of the sale or
disposition. In addition to the reasonable expenses of retaking, holding,
preparing for sale, selling and the like, Secured Party will be entitled to
recover reasonable attorney's fees and legal expenses as provided for in this
instrument and in writings evidencing said obligations before applying the
balance of the proceeds from the sale or other disposition toward satisfaction
of the obligations. Debtor will remain liable for any deficiency remaining
after the sale or other disposition.
5.3 RIGHTS TO FIXTURE COLLATERAL UPON DEFAULT. Upon the occurrence
and during the continuance of an Event of Default, Secured Party may elect to
treat the Fixture Collateral as either Realty Collateral or as Personalty
Collateral (but not both) and proceed to exercise such rights as apply to the
type of Collateral selected.
ARTICLE VI
MISCELLANEOUS
6.1 SUCCESSOR TRUSTEES. The Trustee may resign in writing addressed
to Secured Party or be removed at any time with or without cause by an
instrument in writing duly executed by Secured Party. In case of the death,
resignation or removal of the Trustee, a successor Trustee may be appointed by
the Secured Party by instrument of substitution complying with any applicable
requirements of law, and in the absence of any requirement, without other
formality other than an appointment and designation in writing. The
appointment and designation will vest in the named successor Trustee all the
estate and title of the Trustee in all of the Collateral and all of the rights,
powers, privileges, immunities and duties hereby conferred upon the
<PAGE> 12
Trustee. All references herein to the Trustee will be deemed to refer to the
successor Trustee from time to time acting hereunder.
6.2 ADVANCES BY SECURED PARTY OR THE TRUSTEE. Each and every covenant
of Debtor herein contained shall be performed and kept by Debtor solely at
Debtor's expense. If Debtor fails to perform or keep any of the covenants of
whatsoever kind or nature contained in this instrument, Secured Party (either
by it directly or on its behalf by the Trustee or any receiver appointed
hereunder) may, but will not be obligated to, make advances to perform the same
on Debtor's behalf (after written notice to Debtor if an Event of Default has
not occurred), and Debtor hereby agrees to repay such sums and any reasonable
attorneys' fees incurred in connection therewith on demand. In addition,
Debtor hereby agrees to repay on demand any reasonable out-of-pocket costs,
expenses and attorney's fees incurred by Secured Party or the Trustee which are
to be obligations of Debtor pursuant to, or allowed by, the terms of this
instrument. Such amounts will be in addition to any sum of money which may,
pursuant to the terms and conditions of the written instruments comprising part
of the Obligations, be due and owing. No such advance will be deemed to
relieve Debtor from any default hereunder.
6.3 TERMINATION. If all the Obligations are paid in full, then all of
the Collateral will revert to Debtor and the entire estate, right, title and
interest of the Trustee and Secured Party will thereupon cease; and the Secured
Party in such case shall, upon the request of Debtor and the payment by Debtor
of all reasonable out-of-pocket attorneys' fees and other expenses, deliver to
Debtor proper instruments acknowledging the release of this instrument and
advising purchasers of production who are making payment on the Collateral to
Secured Party of the termination of this instrument.
6.4 RENEWALS, AMENDMENTS AND OTHER SECURITY. Secured Party may take
or hold other security for the Obligations without notice to or consent of
Debtor. The acceptance of this instrument by Secured Party shall not waive or
impair any other security Secured Party may have or hereafter acquire to secure
the payment of the Obligations nor shall the taking of any such additional
security waive or impair the lien and security interests herein granted. The
Trustee or Secured Party may resort first to such other security or any part
thereof, or first to the security herein given or any part thereof, or from
time to time to either or both, even to the partial or complete abandonment of
either security, and such action will not be a waiver of any rights conferred
by this instrument. This instrument may not be amended, waived or modified
except in a written instrument executed by both Debtor and Secured Party.
6.5 ASSIGNMENT AND FINANCING STATEMENT. This instrument will be
deemed to be and may be enforced from time to time as an assignment, chattel
mortgage, contract, deed of trust, financing statement, real estate mortgage,
or security agreement, and from time to time as any one or more thereof if
appropriate under applicable state law. As a financing statement this
instrument is intended to cover all Personalty Collateral including, but not
limited to, Fixture Collateral. This instrument shall be filed in the
appropriate records of the county or counties and the state in which the Realty
Collateral is located as well as the Uniform Commercial Code records of the
Secretary of State or other appropriate office of the state in which any
Personalty Collateral or any Realty Collateral is located. At Secured Party's
<PAGE> 13
request Debtor shall execute financing statements covering the Personalty
Collateral, including but not limited to all Fixture Collateral, which
financing statements may be filed in the Uniform Commercial Code records of the
Secretary of State or other appropriate office of the state in which any of the
Collateral is located.
6,6 UNENFORCEABLE OR INAPPLICABLE PROVISIONS. If any provisions
hereof is invalid or unenforceable, the other provisions hereof will remain in
full force and effect in order to carry out the provisions hereof.
6.7 RIGHTS COMULATIVE. Each and every right, power and remedy herein
given to the Trustee or Secured Party will be cumulative and not exclusive, and
each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time and as often and in such
order as may be deemed expedient by the Trustee, or the Secured Party, as the
case may be, and the exercise, or the beginning of the exercise, of any such
right, power or remedy will not be deemed a waiver of the right to exercise, at
the same time of thereafter, any other right, power or remedy. No delay or
omission by the Trustee or by Secured Party in the exercise of any right, power
or remedy will impair any such right, power or remedy or operate as a waiver
thereof or of any other right, power or remedy then or thereafter existing.
6.8 WAIVER BY SECURED PARTY. Any and all covenants in this instrument
may from time to time by instrument in writing by the Secured Party, be waived
to such extent and in such manner as the Trustee or Secured Party may desire,
but no such waiver will ever affect or impair either the Trustee's or Secured
Party's rights hereunder, except to the extent specifically stated in such
written instrument.
6.9 TERMS. This instrument is binding upon Debtor, Debtor's
successors and assigns, and will inure to the benefit of the Trustee and the
Trustee's successors and Secured Party and its successors and permitted
assigns. Unless the context otherwise requires, terms used in this instrument
which are defined in the Uniform Commercial Code of Texas are used with the
meanings therein defined.
6.10 COUNTERPARTS. This instrument may be executed in any number of
counterparts, each of which will for all purposes be deemed to be an original,
and all of which are identical except that, to facilitate recordation, in any
particular counterpart portions of Exhibit "A" hereto which describe properties
situated in Counties other than the County in which such counterpart is to be
recorded may have been omitted.
6.11 GOVERNING LAW. This instrument shall be governed by, and
construed in accordance with, the law of the State of Texas (except that Tex.
Rev. Civ. Stat. Ann. art. 5069, Ch. 15 (which regulates certain revolving
credit loan accounts and revolving triparty accounts is hereby waived and shall
not apply to this instrument) subject, however, to the effect of applicable
federal law.
6.12 NOTICE. All notices required or permitted to be given by Debtor,
Secured Party or the Trustee shall be made in accordance with the
<PAGE> 14
Notes. Any notices to be given to the Trustee shall be delivered to Secured
Party.
6.13 DUTIES OF TRUSTEE. It shall be no part of the duty of the
Trustee to see to any recording, filing or registration of this Deed of Trust
or any other instrument in addition or supplemental hereto, or to see to the
payment of or be under any duty with respect to any tax or assessment or other
governmental charge which may be levied or assessed on the Collateral, any part
thereof, or against the Debtor, or to see to the performance or observance by
the Debtor of any of the covenants and agreements contained herein. Trustee
shall not be responsible for the execution, acknowledgment or validity of this
Deed of Trust or of any instrument in addition or supplemental hereto or for
the sufficiency of the security purported to be created hereby, and makes no
representation in respect thereof or in respect of the rights of the Secured
Party. Trustee shall have the right to consult with counsel regarding any
matters arising hereunder and shall be fully protected in relying as to legal
matters on the advice of counsel. Trustee shall not incur any personal
liability hereunder except for his own negligence or willful misconduct; and
the Trustee shall have the right to rely on the authenticity any instrument,
document or signature authorizing or supporting any action taken or proposed to
be taken by him hereunder, believed by him in good faith to be genuine.
EXECUTED this 27th day of March, 1995.
DEBTOR:
URI, INC.
By: Paul K. Willmott
Name: Paul K. Willmott
Title: President
THE STATE OF COLORADO
COUNTY OF DENVER
This instrument was acknowledged before me on March 27, 1995, by Paul K.
Willmott, President, of URI, Inc., a corporation on behalf of said corporation.
(seal) Jennie Davis
Notary Public - State of Colorado
My Commission Expires: Jennie Davis
My Commission Expires January 9, 1998 Printed Name of Notary Public
<PAGE> 15
EXHIBIT A
TO THE
DEED OF TRUST, SECURITY AGREEMENT
AND FINANCING STATEMENT
FROM URI, INC. TO CHARLEY GEORGE MAYS,
TRUSTEE, FOR THE BENEFIT OF
WALLACE M. MAYS
MINING LEASES - KLEBERG COUNTY, TEXAS
1. KD-1A, B & C - In Situ Mining Leases between Clyde M. Allen, Jr., Joyce
Allen Baker, Jane Allen Lamb and URI, dated 5-28-89, covering 40 acres of land,
more or less, being Farm Lot 1, Block 47 of the Kleberg Town and Improvement
Company Subdivision, Kleberg County, Texas. Received by Warranty Deed from O.
G. Pirie recorded in Vol. 12, Page 164 in the Kleberg County Courthouse,
Kleberg County, Texas, said Lease being recorded in the Kleberg County, Texas
Clerk and Recorder's Office at Volume 22, Page 983.
2. KD-2A - Solution Mining Lease between B. B. Braly and Exxon Corp., dated
5-29-79, covering 40 acres of land, more or less, being Farm Lot 13 in Block 50
of The Kleberg Town and Improvement Company Subdivision, as per map or plat
thereof recorded in Vol. 1, Page 34, Plat Records of Kleberg County, Texas,
said Lease being recorded in the Kleberg County, Texas Clerk and Recorder's
Office at Vol. 362, Page 281. Partial release being recorded at Vol. 23, Page
330.
3. KD-2B - Solution Mining Lease between Iva Juanita Cumberland Burris,
individually and as independent executrix of the estate of William Arthur
Cumberland, and Exxon Corp., dated 5-29-79, covering 120 acres of land, more or
less, being Farm Lots No. 13 in Block 50, and Farm Lots Nos. 7 and 8 in Block
54 of The Kleberg Town and Improvement Company Subdivision, as per map or plat
thereof recorded in Vol. 1, page 34, Plat Records of Kleberg County, Texas,
said Lease being recorded in the Kleberg County, Texas Clerk and Recorder's
Office at Vol. 362, Page 294. Partial release being recorded at Vol. 23, Page
332.
4. KD-2C - In Situ Mining Lease between Sharon C. and Johnny Lee Robertson
and URI, dated 11-23-83, covering 5 acres of land, more or less, being 466.67
feet square located in the SW corner of Farm Lot 13, Block 50 of The Kleberg
Town and Improvement Company Subdivision, Kleberg County, Texas. Recorded in
Vol. 336, Page 62, Deed Records of Kleberg County, Texas, said Lease being
recorded in the Kleberg County, Texas Clerk and Recorder's Office at Volume
442, Page 235.
5. KD-5 - 40 acre Lease dropped September 8, 1988.
6. KD-6A - Mining Lease between J. Eugene Wukasch, Earl O. Wukasch and
Exxon Corp., dated 7-22-81, covering 34.30 acres, more or less, being the South
34.30 acres of Farm Lot No. 7 in Block 48 of the Kleberg Town and Improvement
Company Subdivision, as per map or plat thereof recorded in Vol. 1, Page 34,
Plat Records of Kleberg County, Texas, said Lease being recorded in the Kleberg
County, Texas Clerk and Recorder's Office at Vol. 403, Page 230.
<PAGE> 16
7. KD-6B - Mining Lease between Clara Kissman and Exxon Corp., dated
3-5-81, covering 34.30 acres, more or less, being the South 34.30 acres of Farm
Lot No. 7 in Block 48 of the Kleberg Town and Improvement Company Subdivision,
as per map or plat thereof recorded in Vol. 1, Page 34, Plat Records of Kleberg
County, Texas, said Lease being recorded in the Kleberg County, Texas Clerk and
Recorder's Office at Vol. 395, Page 246.
8. KD-8 - Solution Mining Lease between George L. Chamberlin and Exxon
Corp., dated 6-5-79, covering 40 acres of land, more or less, being Farm Lot 2
in Block 54 of The Kleberg Town and Improvement Company subdivision, as per map
or plat thereof recorded in Vol. 1, Page 34, Plat Records of Kleberg County,
Texas, said Lease being recorded in the Kleberg County, Texas Clerk and
Recorder's Office at Vol. 362, Page 300.
9. KD-9 - Uranium Mineral Lease between Kenneth A. Huff, et al. and URI,
dated 8-2-83, covering approximately 120 acres of land being Farm Lots 9, 10,
and 11, of Block 49 of The Kleberg Town and Improvement Company Subdivision as
per map or plat thereof recorded in Volume 1, Page 34, Plat Records of Kleberg
County, Texas, said Lease being recorded in the Kleberg County, Texas Clerk and
Recorder's Office at Vol. 439, Page 103.
10. KD-10 - Mining Lease between Blanch C. Daughters, individually and as
independent executrix of the estate of Harley L. Daughters and Exxon Corp.,
dated 12-10-80, covering 160.0 acres of land, more or less, being Farm Lots
Nos. 3, 4, 5 and 6 in Block 54 of The Kleberg Town and Improvement Company
Subdivision, as per map or plat thereof recorded in Vol. 1, Page 34, Plat
Records of Kleberg County, Texas, said Lease being recorded in the Kleberg
County, Texas Clerk and Recorder's Office at Vol. 390, Page 156.
11. KD-11 - Solution Mining Lease between Melvin E. and Zeffie L. Burris
and Exxon Corp., dated 4-26-79, covering 40 acres of land, more or less, being
Farm Lot No. 1 in Block 54 of The Kleberg Town and Improvement Company
Subdivision, as per map or plat thereof recorded in Vol. 1, Page 34, Plat
Records of Kleberg County, Texas, said Lease being recorded in the Kleberg
County, Texas Clerk and Recorder's Office at Vol. 362, Page 287.
12. KD-12 - Mining Lease between R. K. Cumberland, et al. and Exxon Corp.,
dated 12-9-80, covering 160.0 acres of land, more or less, being Farm Lots 3,
4, 5, 6, of Block 48 of The Kleberg Town and Improvement Company Subdivision,
as per map or plat thereof recorded in Vol. 1, page 34, Plat Records of Kleberg
County, Texas, said Lease being recorded in the Kleberg County, Texas Clerk and
Recorder's Office at Vol. 390, Page 153.
13. KD-13A, B, & C - Solution Mining Lease between William F. Radford, Jane
Frances Radford and Exxon Corp., dated 5-16-79, covering 674 acres of land,
more or less, and being Farm Lots Nos. 1 through 17 in Block 55, and Farm Lot
No. 13 in Block 49 of The Kleberg Town and Improvement Company Subdivision, as
per map or plat thereof recorded in Vol. 1, Page 34, Plat Records of Kleberg
County, Texas, said Lease being recorded in the Kleberg County, Texas Clerk and
Recorder's Office at Vol. 362, Page 307.
14. KD-14 - Solution Mining Lease between William F. Radford, Jane Frances
Radford and Exxon Corp., dated 5-16-79, covering 240 acres of land, more or
<PAGE> 17
less, and being Farm Lots Nos. 9 and 10 in Block 48, and Farm Lots Nos. 12, 14,
15 and 16 in Block 49 of The Kleberg Town and Improvement Company Subdivision,
as per map or plat thereof recorded in Vol. 1, Page 34, Plat Records of Kleberg
County, Texas, said Lease being recorded in the Kleberg County, Texas Clerk and
Recorder's Office at Vol. 362, Page 313.
15. KD-15 A & B - Mining Leases between Eleanor Davis, Catherine Veselik,
Bonaventure H. Veselik and Exxon Corp., dated 12-11- 80, covering 40.0 acres,
more or less, being Farm Lot 5 in Block 49 of The Kleberg Town and Improvement
Company Subdivision, as per map or plat thereof recorded in Vol 1, Page 34,
Plat Records of Kleberg County, Texas, said Leases being recorded in the
Kleberg County, Texas Clerk and Recorder's Office at Vol. 390, Page 236 (15B)
and Vol. 436, Page 238 (15A).
16. KD 16A & B - In-Situ Uranium Mining Lease dated 12-26-89 between
Charles W. Muil, Jr. and Robert D. Muil and URI, Inc. covering 840.0 acres,
being Farm Lots 9 through 16, Blk. 53, Lots 9, 13 thru 16, Blk. 54, Lots 1 thru
4, Blk. 63 and Lots 1 thru 4, Blk. 64, Kleberg Town and Improvement Company
Subdivision as per map or plat thereof recorded in Vol. 1, Page 34, Plat
Records of Kleberg County, Texas and which lease is recorded in Vol. 31, at
Page 611 of the Official Records of Kleberg County, Texas.
17. KD-17 - In-Situ Uranium Mining Lease between Harold J. and Era Mae
Bareis and URI dated 12-9-86, covering the South 8 acres of Farm Lot 4, Block
26; the north 8 acres of Farm Lot 2, Block 27; Farm Lot 13, Block 27; Farm Lots
8 and 16, Block 28; Farm Lots 4, 5 and the North Half of 6, Block 38 comprising
236.0 acres of land, more or less, all located in The Kleberg Town and
Improvement Company Subdivision, as per map or plat thereof recorded in Vol. 1,
Page 34, Plat Records, Kleberg County, Texas, said Lease being recorded in the
Kleberg County, Texas Clerk and Recorder's Office at Vol. 508, Page 286.
18. 18-A-AK - Solution Mining Leases between the following listed lessors:
<TABLE>
<CAPTION>
LSE_# LESSOR LSE DATE VOL/BOOK PAGE
<S> <C> <C> <C> <C>
KD18A Barbara J. Keltner 01/18/88 12 355
KD18AA Ruby Steward 01/18/88 12 605
KD18AB Robert Giese 01/18/88 12 615
KD18AC Kenneth Giese 01/18/88 12 625
KD18AD Victor E. Henry 01/18/88 12 635
KD18AE Mary M. Golden 01/18/88 12 645
KD18AF Lera C. Hosmer 01/18/88 12 655
KD18AG Edna Stewart 01/18/88 12 665
KD18AH James C. Golden 01/18/88 12 675
KD18AI Vera Betty Damon 09/20/89 28 300
KD18AJ William T. Henry 10/10/89 29 300
KD18AK Eugene W. Henry 10/12/89 29 581
KD18B Ada Fischer Estate 01/18/88 12 365
KD18C Ada Fischer Life Est. 01/18/88 12 375
KD18D Patricia Fischer 01/18/88 12 385
KD18E Jeanette Odom 01/18/88 12 345
KD18F Jean Greeson 01/18/88 12 395
KD18G Freda Marks 01/18/88 12 405
KD18H Gerald Fischer 01/18/88 12 415
</TABLE>
<PAGE> 18
<TABLE>
<S> <C> <C> <C> <C>
KD18I Mary Waters 01/18/88 12 425
KD18J Herman Hollingsworth 01/18/88 12 435
KD18K Catherine Veselik 01/18/88 12 445
KD18L Betty Lou Fisher 01/18/88 12 455
KD18M Frank Fisher 01/18/88 12 465
KD18N Bernard Wallace 01/18/88 12 475
KD18O Alice Tiberio 01/18/88 12 485
KD18P Louise Sparks 01/18/88 12 495
KD18Q Helen G. McKinney 01/18/88 12 505
KD18R William H. White 01/18/88 12 515
KD18S Virginia J. Henry 01/18/88 12 525
KD18T Delores Wright 01/18/88 12 535
KD18U Earl Hollingsworth 01/18/88 12 545
KD18V Helen Reeder 01/18/88 12 555
KD18W Lewis W. Maples Estate, 01/18/88 12 565
KD18X Voncille Hering 01/18/88 12 575
KD18Y Virginia H. Hopper 01/18/88 12 585
KD18Z Eleanor M. Davis 01/18/88 12 595
</TABLE>
and URI, Inc. dated as shown above, covering 200 acres of land, more or less,
being Farm Lots 3, 4, 6, 7, & 8, Blk. 49 of the Kleberg Town and Improvement
Company Subdivision, as per map or plat thereof recorded in Vol. 1, Page 34,
Plat Records of Kleberg County, Texas, said leases being recorded in the
Kleberg County, Texas Clerk and Recorder's office at the Volumes and Pages
listed above.
19. KD-19 - Solution Mining Lease between Robert S. Sexauer and wife
Jacqualine N. Sexauer Trust and URI, Inc. dated March 17, 1989, covering 160
acres of land, more or less, being Farm Lots 11-14 inclusive, Blk. 41 of the
Kleberg Town and Improvement Company Subdivision, as per map or plat thereof
recorded in Vol. 1, Page 34, Plat Records of Kleberg County, Texas, said lease
being recorded in the Kleberg County, Texas Clerk and Recorder's office at Vol.
21, Page 443.
20. KD-20A-F - Solution Mining Lease between the following listed lessors:
<TABLE>
<CAPTION>
LSE # LESSOR LSE DATE VOL/BOOK PAGE
<S> <C> <C> <C> <C>
KD20A & B Y. G. Garcia 02/15/89 20 389
KD20C Zulema G. Martinez 02/15/89 20 389
KD20D Fidel Garcia, etux 02/15/89 20 389
KD20E Ofelia Garcia 02/15/89 20 389
KD20F Hermila Garcia 02/15/89 20 389
</TABLE>
and URI, Inc. dated as shown above, covering 200 acres of land, more or less,
being Farm Lots 2, 6, 7, 8 & 10, Block 42 of the Kleberg Town and Improvement
Company Subdivision, as per map or plat thereof recorded in Vol. 1, Page 34,
Plat Records of Kleberg County, Texas, said leases being recorded in the
Kleberg County, Texas Clerk and Recorder's office at the Volumes and Pages
listed above.
<PAGE> 19
21. KD-21A-F - Solution Mining Leases between the following listed lessors:
<TABLE>
<CAPTION>
LSE # LESSOR LSE DATE VOL/BOOK PAGE
<S> <C> <C> <C> <C>
KD21A Arnoldo A. Adame, etux 02/15/89 21 454
KD21B Edna A. Rios, a widow 02/15/89 21 454
KD21C Santana L. Adame, Jr. 02/15/89 21 454
KD21D Eliza A. Lopez, a widow 02/15/89 21 454
KD21E Elvira A. Leyba, etvir 02/15/89 21 454
KD21F Arnoldo A. Adame, Admin. 02/15/89 21 454
</TABLE>
and URI, Inc. dated as shown above, covering 40 acres of land, more or less,
being Farm Lot 16, Block 42 of the Kleberg Town and Improvement Company
Subdivision, as per map or plat thereof recorded in Vol. 1, Page 34, Plat
Records of Kleberg County, Texas, said leases being recorded in the Kleberg
County, Texas Clerk and Recorder's office at the Volumes and Pages listed
above.
22. KD22-A-K - Solution Mining Leases between the following listed lessors:
<TABLE>
<CAPTION>
LSE # LESSOR LSE DATE VOL/BOOK PAGE
<S> <C> <C> <C> <C>
KD22A Jo Ann Hansen 04/10/89 21 919
KD22B Marqueeta Seagraves 04/10/89 22 30
KD22C Mary L. Simms Trust 04/10/89 23 83
KD22D Ruth Brown 04/01/89 23 93
KD22E Mark Hansen 04/10/89 23 106
KD22F Cara Sims 04/20/89 23 400
KD22G George C. Darr, Est. 04/20/89 23 390
KD22H Elouise McLaughlin 04/10/89 23 344
KD22I Mary Lou Olson 04/15/89 23 334
KD22J Wilelyn Stapper 04/15/89 23 617
KD22K Winifred Kellogg 04/09/89 23 769
</TABLE>
and URI, Inc. dated as shown above, covering 120 acres of land, more or less,
being Farm Lot 11, 14 and 15, Block 42 of the Kleberg Town and Improvement
Company Subdivision, as per map or plat thereof recorded in Vol. 1, Page 34,
Plat Records of Kleberg County, Texas, said leases being recorded in the
Kleberg County, Texas Clerk and Recorder's office at the Volumes and Pages
listed above.
23. KD-23 FEE Ownership - Surface and 165/168ths mineral ownership in 50
acres, and 100% mineral ownership in 110.0 acres covering Farm lots 9, 10, 15,
16, Blk. 41, and 100% mineral ownership in 125.7 acres covering Farm Lots 1, 2,
8 and the North 5.7 acres of Farm Lot 7 all in Blk. 48, of the Kleberg Town and
Improvement Company Subdivision, as per map or plat thereof recorded in Vol. 1,
Page 34, Plat Records of Kleberg County, Texas, said Warranty Deed being
recorded in Vol. 35 at Page 665 of the Official Records, Kleberg County, Texas
being 285.7 acres, more or less, all total, dated April 4, 1990.
MINING LEASES - DUVAL COUNTY, TEXAS
1. RO-1 - In-Situ Uranium Mining Lease between Jose and Laura T. Cardenas
and URI, dated 9-5-85, covering 372.00 acres of land, more or less, and being
described as Tract (a) of First Tract containing 138.0 acres, more or less,
situated in the Tiburcio Perez Survey, Abstract No. 1541, Survey No. 16 and
Tract (b) of First Tract containing 234.0 acres, more or less, situated in the
H & G N R.R. Survey No. 15, Abstract No. 316, in that certain Partition Deed
<PAGE> 20
between William L. Rogers, Jr., et al., said deed dated July ___, 1944 and
recorded in Volume 57, Page 315 et seq., Deed Records, Duval County, Texas,
said Lease being recorded in the Duval County, Texas Clerk and Recorder's
Office at Book 405, Page 317.
2. RO-2 - In-Situ Uranium Mining Lease between Guadalupe Garcia, et al. and
URI, dated 9-5-85, covering 150.00 acres of land, more or less, out of and part
of the Julia Rogers Survey No. 16, Abstract No. 1541 and being the same land as
is described in Deed dated February 5, 1976, from Consuelo Garcia to Guadalupe
Garcia and Romeo Garcia, recorded in Volume 203, Page 86, Deed Records, Duval
County, Texas, said Lease being recorded in the Duval County, Texas Clerk and
Recorder's Office at Book 406, page 431.
3. RO-3 - In-Situ Uranium Mining Lease between Hugo and Laura G. Berlanga
and URI, dated 11-27-85, covering Tract No. 1, 18.44 acres of land, more or
less, being known as Share No. 4, set aside to Martin Rangel; and Tract No. 2,
18.44 acres of land, more or less, being known as Share No. 9, set aside to
Jose Rangel, both Tracts being out of the Ursino Rangel Homestead Survey 6,
Abstract No. 486, patent No. 500, containing 165.95 acres of land, divided as
set forth in Partition Deed dated December 9, 1929, recorded in Volume 38, Page
494, Deed Records, Duval County, Texas, and more particularly described by
metes and bounds in Warranty Deed dated May 20, 1977 recorded in Volume 213,
Page 31, Duval County, Texas, said Lease being recorded in the Duval County,
Texas Clerk and Recorder's Office at Book 410, Page 337.
4. RO-4 - In-Situ Mining Lease between Julia R. Flores and URI, dated
12-16-85, covering 502.00 acres of land, more or less, being Tract (a) 366.0
acres being a part of the H & G N R.R. Co. Survey No. 15, Abstract No. 316 and
Tract (b) 136.0 acres being part of the J. Poitevent Survey No. 21, Abstract
No. 467 and being Share 6(b) set aside to Julia R. Flores in that certain
Partition Deed dated July ____, 1944, recorded in Volume 57, Page 315, Deed
Records, Duval County, Texas, said Lease being recorded in the Duval County,
Texas Clerk and Recorder's Office at Book 411, Page 343.
5. RO-5 - In-Situ Uranium Mining Lease between Manuel G. and Francisca R.
Rogers and URI, dated 1-15-86, covering 202.00 acres, more or less, a part of
Tiburcio Perez Survey Abst. 1541 and being all of "Third Tract" containing 502
acres, more or less, between William L. Rogers, et al., and awarded to Manual
G. Rogers, dated July ___, 1944 and recorded in Vol 57, Page 315, Deed Records,
Duval County, Texas SAVE & EXCEPT from said 502 acres, the south 200 acres,
more or less, deeded from Manuel G. Rogers, et ux to Alfredo Garcia, et al.
dated March 23, 1946, recorded in Vol 63, page 534, Deed Records, Duval County,
Texas, and ALSO SAVE AND EXCEPT the west 100 acres, more or less, of the north
302 acres of said 502 acre tract, deeded from Manuel G. Rogers, et ux to
Alfredo Garcia, et al., dated October 15, 1946, recorded in Vol 65, Page 248,
Deed Records, Duval County, Texas, said Lease being recorded in the Duval
County, Texas Clerk and Recorder's Office at Book 1, Page 214.
6. RO-6 - In-Situ Uranium Mining Lease between Gertrudes R. Tanguma and
URI, dated 6-25-86, covering Share No. 7, containing 70.05 acres of land out of
the 409.30 acres of land and out of the J. Poitevent Survey 529, Abst. 474, and
the Gabriel Rangel Homestead Survey No. 5, Abst. 487, in the "Los Reyes" area
in Duval County, Texas, and also being out of Shares 5 and 6 of the Partition
of the Macedonio Rangel Lands, recorded in Vol 8, Pages 331/335,
<PAGE> 21
said Share No. 7 is more particularly described by metes and bounds in
Partition Deed dated April 29, 1973 recorded in Vol. 176, Pages 327/337, Deed
Records of Duval County, Texas, said Lease being recorded in the Duval County,
Texas Clerk and Recorder's Office at Book 11, Page 699.
7. RO-7 - In-Situ Uranium Mining Lease between Concepcion R. Sendejo and
URI, dated 10-26-86, covering Share No. 6, containing 60.05 acres of land out
of the 409.30 acres of land and out of the J. Poitevent Survey 529, Abst. 474,
and the Gabriel Rangel Homestead Survey No. 5, Abst. 487, in the "Los Reyes"
area in Duval County, Texas, and also being out of Share No. 5 and 6 of the
Partition of the Macedonio Rangel Lands, recorded in Vol. 8, Pages 331/335,
said Share No. 6 is more particularly described by metes and bounds in
Partition Deed dated April 29, 1973 recorded in Vol. 176, Pages 327/337, Deed
Records, Duval County, Texas, said Lease being recorded in the Duval County,
Texas Clerk and Recorder's Office at Book 19, Page 220.
8. RO-8 - In-Situ Uranium Mining Lease between Herminia R. Gonzales and
URI, dated 10-30-86, covering Share No. 5, containing 60.05 acres of land, more
or less, out of 409.30 acres of land and out of the J. Poitevent Survey 529,
Abst. 474, and the Gabriel Rangel Homestead Survey No. 5, Abst. 487, in the
"Los Reyes" area in Duval County, Texas, and also being out of Share No. 5 and
6 of the Partition of the Macedonio Rangel Lands, recorded in Vol. 8, Pages
331/335, said Share No. 6 is more particularly described by metes and bounds in
Partition Deed dated April 29, 1973 recorded in Vol. 76, Pages 327/337, Deed
Records, Duval County, Texas, said Lease being recorded in the Duval County,
Texas Clerk and Recorder's Office at Book 19, page 404.
9. RO-9 - In-Situ Uranium Mining Lease between Trinidad B. and Reymundo R.
Rangel and URI, dated 12-4-86 covering Share No. 2, containing 62.05 acres of
land, more or less, allotted and set aside to Reymundo R. Rangel, and the West
35.0 acres of land, more or less, out of Share No. 4, containing 70.05 acres,
allotted and set aside to Maria R. Serna, et vir, out of the 409.30 acres of
land out of the J. Poitevent Survey No. 5, Abst. 474 and the Gabriel Rangel
Homestead Survey No. 5, Abst. 487, in the "Los Reyes" area in Duval County,
Texas, and more particularly described by metes and bounds in Partition Deed
made by and between Candelario R. Rangel, et al., the 29th day of April, 1973
recorded in Vol. 176, Pages 327/341, Deed Records, Duval County, Texas, and
also being out of Shares 5 and 6 of the Partition of the Macedonio Rangel Lands
recorded in Vol. 8, Pages 331/333, Deed Records of Duval County, Texas, said
Lease being recorded in the Duval County, Texas Clerk and Recorder's Office at
Book 23, Page 200.
10. RO-10 - In-Situ Uranuim Mining Lease between Lucila S. Sanchez, et al.,
and URI, dated 12-8-86, covering Share No. 4, containing 70.05 acres of land,
more or less, allotted and set aside to Maria R. Serna, et vir, out of the
409.30 acres of land out of the J. Poitevent Survey 529, Abst. 474 and the
Gabriel Rangel Homestead Survey No. 5, Abst. 487, in the "Los Reyes" area in
Duval County, Texas, and also being out of Share No. 5 and 6 of the Partition
of the Macedonio Rangel Lands recorded in Vol 8, Pages 331/335, Deed Records of
Duval County, Texas, more particularly described by metes and bounds in
Partition Deed made by and between Candelario R. Rangel, et al., the 29th day
of April, 1973, recorded in Vol 176, Pages 327/341, Deed Records, Duval County,
Texas, said Lease being recorded in the Duval County, Texas Clerk and
Recorder's Office at Book 23, Page 190.
<PAGE> 22
11. RO-11 - In-Situ Uranium Mining Lease between Homero and Clemencia
Contreras and URI, dated 1-19-87, covering Sixteen acres of land, more or less,
out of a 160 acre tract, originally patented to Antonio Rangel on July 19,
1877, Patent No. 162, Vol. 6, of the State of Texas, and being the same
property conveyed to Donaciano Contreras by Felix Trejo dated March 31, 1920,
of record in Vol. 18, Page 129, Deed Records, Duval County, Texas, and two
acres of land, more or less, out of a 160 acres tract, known as Survey No. 7,
originally a Homestead Certificate issued to Antonio Rangel, patented by the
State of Texas on September 24, 1877, Patent No. 162, Vol. 6 of Record in Vol.
B, Page 126, Deed Records, Duval County, Texas, and being the same property
conveyed to Donaciano Contreras by Antonio Cantu de Perez, dated November 28,
1922, of Record in Vol. 21, Page 591, Deed Records, Duval County, Texas, said
Lease being recorded in the Duval County, Texas Clerk and Recorder's Office at
Book 29, Page 741.
12. RO-12 - In-Situ Uranium Mining Lease between, Thomas W. Crews, et ux
and URI, Inc., dated August 27, 1987, covering 1,965.7 acres of land, more or
less, out of Survey 17, Abstr. 314, Survey 18, Abstr. 1781 and Survey 274,
Abstr. 1780, which lease is covered by a Memorandum of Uranium Mining Lease and
Letter Agreement dated September 24, 1987 in Vol. 38, Page 3, and by Memorandum
of Amendment to Mining Lease and Letter Agreement dated December 15, 1988 in
Vol. 65 at Page 669 of the Official Records, Duval County, Texas.
<PAGE> 23
MINING LEASES - VASQUEZ - DUVAL COUNTY, TEXAS
1. VA-1A, B, C - In-Situ Uranium Mining Lease between Romeo J. Vasquez, et
al and URI, Inc. dated February 12, 1990, covering 341.66 acres of land, more
or less, described as Share 4, set apart to Margarita T. De Vella Cuellar and
husband, Juan Vela Cuellar in Partition Deed between Aristeo Trevino, et al,
dated 11-07-23 of record in Vol. 24, pp. 15-19, Deed Records of Duval County,
Texas, and which lease is recorded in Vol. 46, at Page 156 of the Official
records of Duval County, Texas.
2. VA-2A, B, C - In-Situ Uranium Mining Lease between Romeo J. Vasquez, et
al, and URI, Inc., dated January 15, 1988, covering 500.0 acres of land, more
or less, described as 500 acres of land out of Share No. 2 of the original
partition of Santa Maria de los Angeles de Abajo Grant of record in Vol. 46 at
Page 156 of the Official Records of Duval County, Texas.
<PAGE> 24
EXHIBIT "B"
PERMITTED LIENS
1. Liens in favor of Secured Party.
2. Encumbrances consisting of minor easements, zoning restrictions, or
other restrictions on the use of real property that do not (individually or in
the aggregate) materially affect the value of the assets encumbered thereby or
materially impair the ability of Debtor to use such assets in its businesses,
and none of which is violated in any material respect by existing or proposed
structures or land use.
3. Liens for taxes, assessments, or other governmental charges which are
not delinquent or which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established.
4. Liens of mechanics, materialmen, warehousemen, carriers, or other
similar statutory liens that are incurred in the ordinary course of business
which are not delinquent or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established.
5. Liens resulting from good faith deposits (including certificates of
deposit) to secure payments of workmen's compensation or other social security
programs.
6. Encumbrances disclosed in the title policy covering the Property.
7. Any interest or title of a lessor in property which is the subject of
any mineral lease entered into in the ordinary course of business by the
Debtor, as lessee, and not prohibited by this Agreement other than any right of
such lessor to prohibit the assignment, encumbrance or other disposition of
such property.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 43,468
<SECURITIES> 562,341
<RECEIVABLES> 80,368
<ALLOWANCES> 0
<INVENTORY> 3,426,067
<CURRENT-ASSETS> 4,460,679
<PP&E> 54,169,445
<DEPRECIATION> 16,420,512
<TOTAL-ASSETS> 42,300,103
<CURRENT-LIABILITIES> 9,686,399
<BONDS> 1,345,507
<COMMON> 8,237
0
0
<OTHER-SE> 26,603,050
<TOTAL-LIABILITY-AND-EQUITY> 42,300,103
<SALES> 1,251,013
<TOTAL-REVENUES> 1,251,013
<CGS> 2,979,815
<TOTAL-COSTS> 3,623,709
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 154,980
<INCOME-PRETAX> (2,479,443)
<INCOME-TAX> (495,000)
<INCOME-CONTINUING> (1,984,443)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,984,443)
<EPS-PRIMARY> (.25)
<EPS-DILUTED> (.25)
</TABLE>
