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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) MAY 25, 1995
URANIUM RESOURCES, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 0-17171 75-2212772
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
12750 MERIT DRIVE, SUITE 1020, DALLAS, TEXAS 75251
(Address of principal executive offices) Zip Code
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Registrant's telephone number, including area code: 214-387-7777
NO CHANGE
(Former name or former address, if changed since last report)
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Exhibit Index Begins on Sequentially Numbered Page 5
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On May 25, 1995, the Registrant increased the number of its directors
from three to five and appointed George R. Ireland and James B. Tompkins as new
directors pursuant to the transaction described in Item 2, below. See Item 2.
Acquisition or Disposition of Assets.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 25, 1995, the Registrant consummated a $6 million loan from
mutual funds managed by Ryback Management Corporation ("Ryback") of St. Louis,
Missouri. The loan is for a term of three years, bears interest at a rate of
6.5% per annum and is convertible into shares of common stock, $.001 per share
(the "Common Stock"), of the Registrant at an initial conversion price of $4.00
per share. The loan is secured by a mortgage on the Registrant's Rosita and
Kingsville Dome uranium properties in Texas. These properties are two of the
Registrant's four primary properties, in terms of value and current and future
anticipated production. In addition, the lenders received a three-year warrant
to purchase 1.5 million shares of Common Stock at an initial purchase price of
$4.00 per share. Ryback is an investment company adviser registered under the
Investment Advisers Act of 1940. As of March 31, 1995, Ryback effectively had
discretionary authority over 1,239,525 shares of Common Stock (including the
power to vote and dispose of such shares), constituting 15.4% of the shares of
Common Stock outstanding as of such date computed in accordance with Rule 13d-3
under the Securities Exchange Act of 1934. Based upon the initial conversion
price of the notes issued to the lenders in this transaction and the initial
purchase price of the warrants, the lenders have the right to acquire a total of
3,000,000 shares of Common Stock. As required by the documents governing the
transaction, the Registrant increased the number of its directors from three to
five on May 25, 1995, and appointed two new directors designated by the lenders.
The Registrant is required by the terms of the loan documents to obtain
stockholder approval of the issuance of the Common Stock issuable upon
conversion of the notes and upon exercise of the warrants. Failure to receive
stockholder approval by December 31, 1995, will constitute a default under the
loan documents which, upon notice of the lenders or holders of a majority in
principal amount of the notes, would result in acceleration of the maturity date
of the notes.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
(2.1) Plan of acquisition, reorganization, arrangement,
liquidation or succession.
2.1 - Note and Warrant Purchase Agreement, dated May 25, 1995,
by and among the Registrant, Lindner Investments, a Massachusetts business trust
(on behalf
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of its Lindner Bulwark Fund series), and Lindner Dividend Fund, Inc., a Missouri
corporation.
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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.
Date: June 9, 1995 /s/ William M. McKnight
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William M. McKnight, Jr.
Vice President of Operations
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EXHIBIT INDEX
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Exhibit No. Exhibit Description Page
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2.1 Note and Warrant Purchase Agreement, dated 6
May 25, 1995, by and among the Registrant,
Lindner Investments, a Massachusetts
business trust (on behalf of its Lindner
Bulwark Fund series), and Lindner Dividend
Fund, Inc., a Missouri corporation.
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EXHIBIT 2.1
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NOTE AND WARRANT PURCHASE AGREEMENT
This Agreement is made by and among Uranium Resources, Inc., a
Delaware corporation (the "Company"), Lindner Investments, a Massachusetts
business trust (on behalf of its Lindner Bulwark Fund series) and Lindner
Dividend Fund, Inc., a Missouri corporation (collectively, the "Purchaser"),
entered into this 25th day of May, 1995.
RECITALS
A. Lindner Fund, Inc., a Missouri corporation that is an affiliate of
the Purchaser, owns 720,525 shares of Common stock of the Company, par value
$0.001 per share.
B. The Company has experienced financial difficulties and has
determined to sell certain secured promissory notes to Purchaser to raise funds
for the Company.
C. Purchaser has agreed to purchase such notes on the terms and
conditions set forth herein.
Certain capitalized terms not otherwise defined herein shall have the
meanings set forth in Section 11 below.
SECTION 1. PROVISIONS PARTICULAR TO NOTES
1.1 Description of the Notes. The Company has authorized and proposes
to sell to the Purchaser the Notes. The Notes shall be in the form set forth as
Exhibit 1 attached hereto. Each Note originally issued shall be dated its date
of issue, and shall mature on May 31, 1998. The Notes shall bear interest on the
unpaid principal balance thereof from the date of issuance until maturity at the
rate of 6.5% per annum, payable quarterly in arrears.
1.2 Purchase and Sale of the Notes; Closing Date. Subject to the
terms and conditions hereof and in reliance upon the representations and
warranties set forth in this Agreement, Lindner Investments (on behalf of its
Lindner Bulwark Fund series) agrees to purchase from the Company, and the
Company agrees to issue and sell to Lindner Investments, Notes in the aggregate
principal amount of $1,500,000 on the Closing Date. Subject to the terms and
conditions hereof and in reliance upon the representations and warranties set
forth in this Agreement, Lindner Dividend Fund, Inc., agrees to purchase from
the Company, and the Company agrees to issue and sell to Lindner Dividend Fund,
Inc., Notes in the aggregate principal amount of $4,500,000 on the Closing Date.
At the Closing, the Purchaser shall pay for the Notes in current and immediately
available U.S. Legal Tender at a price of 100% of the principal amount thereof.
The Notes shall be issued in such denominations and registered in such name or
names as the Purchaser shall request.
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1.3 Representations and Agreements of the Purchaser.
(a) Purpose. The Purchaser represents that it (i) is purchasing
the Notes and Warrants for its own accounts, (ii) has authority to make the
statements contained in this Paragraph 1.3, (iii) is an "accredited investor" as
defined under the Securities Act and was not formed for the purpose of acquiring
the Notes, and (iv) is purchasing the Notes and Warrants for investment and not
with a view to any distribution thereof, provided, however, that the lawful
disposition of the Notes, Warrants, and Conversion Stock shall at all times be
and remain within such Purchaser's control.
(b) No Registration. Purchaser understands and acknowledges that
the offering of the Notes or Conversion Stock pursuant to this Agreement will
not be registered under the Securities Act on the grounds that the offering and
sale of securities contemplated by this Agreement are exempt from registration
pursuant to Section 4(2) of the Securities Act. Purchaser acknowledges and
understands that the Notes must be held by it indefinitely unless the Notes and
Conversion Stock are subsequently surrendered for conversion or the Notes or
Conversion Stock are registered under the Securities Act or an exemption from
such registration is available with respect to any proposed transfer of the
Notes or Conversion Stock. Purchaser further understands that under certain
circumstances the issuance of Conversion Stock and/or Warrant Stock must be
approved by stockholders of the Company in order for such shares to be eligible
for quotation in the Nasdaq Stock Market, and Purchaser agrees not to exercise
Warrants or convert Notes in such amounts as would require such stockholders
approval until such approval has been obtained.
(c) Access to Certain Information. In connection with
the representations made herein, Purchaser further represents that: (i)
Purchaser has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of Purchaser's prospective
investment in the Notes or Conversion Stock; (ii) Purchaser has the ability to
bear the economic risks of its prospective investment, including a complete
loss of the investment; (iii) Purchaser has been furnished with and has had
access to such information as Purchaser has considered necessary to make a
determination as to the purchase of the Notes or Conversion Stock; (iv)
Purchaser has had all questions which have been asked by Purchaser
satisfactorily answered by the Company; and (v) Purchaser has not been offered
the Notes or Conversion Stock by any form of general solicitation or general
advertising, including, but not limited to any advertisement, article, notice
or other communication published in any newspaper, magazine, or similar media
or broadcast over television or radio, or any seminar or meeting whose
attenders have been invited by any general solicitation or general advertising.
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(d) Authorization; No Conflict. The execution, delivery and
performance of this Agreement by the Purchaser (i) has been duly authorized by
all requisite corporate action, (ii) does not require any approval or consent on
the part of, or filing, registration or qualification with, any governmental
body, federal, state or local, that has not been obtained, (iii) will not
violate any provision of law, any order of any court or other agency of
government or the articles of incorporation or bylaws of Purchaser, and (iv)
will not be in conflict with, result in a breach of or constitute (with or
without notice or passage of time) a default under any provision of any
indenture, agreement or other instrument to which Purchaser is or any part of
its assets is bound.
(e) Purchaser agrees to release or subordinate its lien and
security interest on the Kingsville Dome mining facility if necessary in order
to permit further development of such facility, provided that, in the event of a
release, alternative collateral acceptable to Purchaser is provided by the
Company or a Subsidiary, and provided further that, in the event of a
subordination, Purchaser consents to such development plan, such consent not to
be unreasonably withheld.
1.4 Covenants of Purchaser. (a) Restrictions on Transfer. Purchaser
understands and agrees that, if in the future it decides to sell, pledge or
otherwise transfer the Notes or the Conversion Stock issuable upon conversion of
the Notes, such Notes or Conversion Stock may be sold, pledged or transferred
only (i) to the Company, or (ii) pursuant to an exemption from registration
under the Securities Act, including but not limited to those provided by Rules
144 or 145 or Regulation S.
(b) Restricted Sales. Purchaser agrees that prior to the making
of any sales permitted by Section 1.4(a) hereof, Purchaser will give written
notice to the Company of Purchaser's intention to make such sales. If Purchaser
shall then provide to the Company or its counsel such information concerning the
proposed sale as the Company may reasonably request, including an opinion of
counsel for Purchaser to the effect that, in the opinion of such counsel, the
proposed sale may be effected without registration under the Securities Act, and
if such opinion is reasonably satisfactory in substance to the counsel for the
Company, Purchaser shall thereupon be entitled to effect such restricted sales.
1.5 Provisions Governing the Notes and the Conversion Stock.
(a) Restrictive Legend. The Notes and the Conversion Stock shall
be stamped or otherwise imprinted with a legend in substantially the following
form:
The securities represented by this certificate have not
been registered under the Securities Act of 1933, as
amended (the "Securities Act"), or registered or
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qualified under the securities or blue sky laws of any
state and such securities may not be sold, pledged or
otherwise transferred in the absence of such registration
or qualification; provided, however, that such securities
may be sold, pledged or otherwise transferred pursuant to
an exemption from registration or qualification,
including, but not limited to those provided in Rule 144
or 145 or Regulation S under the Securities Act. The
transfer of such securities is subject to the
restrictions, terms and conditions set forth in that
certain Note and Warrant Purchase Agreement dated May
25, 1995 among Uranium Resources, Inc., Lindner Dividend
Fund, Inc. and Lindner Investments (on behalf of its
Lindner Bulwark Fund series), and such securities may be
transferred only in compliance with the terms and
conditions of such Note and Warrant Purchase Agreement, a
copy of which will be made available by Uranium
Resources, Inc. upon written request.
(b) Disposition of Notes and Conversion Stock. The Notes or the
Conversion Stock may be transferred in one or more transactions to an
"accredited investor" as defined in Rule 501 under the Securities Act, provided
that each such accredited investor shall represent and agree in writing that (i)
it is acquiring such Notes and will acquire the Conversion Stock for investment
and not with a view to the distribution thereof and (ii) it shall be bound by
all the restrictions on transfer of the Notes or any Conversion Stock contained
in Section 1.4 hereof. Prior to any such transfer, Purchaser, or any subsequent
Holder that is bound hereby, shall deliver to the Company an opinion of counsel
stating that such transfer may be effected without registration under the
Securities Act.
(c) Termination of Restrictions. The restrictions imposed by
Section 1.4 hereof upon the transferability of Notes and Conversion Stock shall
cease and terminate (a) when such securities shall have been effectively
registered under the Securities Act and disposed of in accordance with a
registration statement governing such securities or (b) when in the opinions of
both counsel for the Holder thereof and counsel for the Company such
restrictions are no longer required in order to ensure compliance with the
Securities Act. Whenever such restrictions shall terminate as to any Conversion
Stock, the Holder thereof shall be entitled to receive from the Company without
expense a new certificate or certificates representing such securities not
bearing the legend set forth in Section 1.5(a) hereof.
(d) Collateral Securing the Notes. The Mortgaging Subsidiary
shall guarantee the obligations of the Company under the Notes and this
Agreement pursuant to the Guaranty. The Guaranty will be collateralized with a
first Lien on, and an assignment of
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a security interest in the Texas Real Property and the Collateral, pursuant to
the Deed of Trust.
(e) Issuance of New Notes upon Exchange or Transfer. Subject to
Section 1.4, upon surrender of any Notes at the office of the Company designated
for notices in accordance with Section 12.3, the Company, at the request of the
Holder thereof, shall execute and deliver, at the Company's expense (except as
provided below), a new Note or Notes in exchange therefor, in an aggregate
principal amount equal to the unpaid principal amount of the surrendered Notes.
Every Note surrendered for transfer shall be duly endorsed, or be accompanied by
a written instrument of transfer duly executed, by the Holder of such Note or by
his attorney duly authorized in writing. Each new Note shall be payable to such
person as such Holder may request in writing. Each such new Note shall be dated
and bear interest from the date to which interest has been paid on the
surrendered Note or dated and bearing interest from the date of the surrendered
Note if no interest has been paid thereon. The Company may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect
of any transfer.
(f) Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Notes, and (i) in the case of loss, theft or
destruction of a bond of indemnity in such form and amount reasonably
satisfactory to it, or (ii) in the case of mutilation, upon surrender and
cancellation thereof, the Company at its expense will execute and deliver in
lieu thereof, a new Note of like tenor, dated and bearing interest from the date
to which interest has been paid on such lost, stolen, destroyed or mutilated
Note or dated and bearing interest from the date of such lost, stolen, destroyed
or mutilated Note if no interest has been paid thereon.
SECTION 2. PROVISIONS PARTICULAR TO WARRANTS
2.1 Issuance of Warrants; Warrant Certificates.
(a) At the Closing, the Company agrees to issue to Lindner
Dividend Fund, Inc., one or more Warrants entitling it to purchase 1,125,000
shares of Warrant Stock and the Company agrees to issue to Lindner Investments
(on behalf of its Lindner Bulwark Fund series) one or more Warrants entitling it
to purchase 375,000 shares of Warrant Stock. As evidence of the ownership of
the Warrants, the Company shall execute and deliver to the Holders of the
Warrants one or more Warrant Certificates, issued in such denominations and
registered in such name or names as the Purchaser shall request. The Warrant
Certificates shall be dated the date of issuance thereof (whether upon initial
issuance, transfer, exchange or in lieu of mutilated, lost, stolen, or destroyed
Warrant
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Certificates), and shall be numbered serially with the prefix "URIW-". From
time to time thereafter, the Company shall execute and deliver Warrant
Certificates in required whole number denominations to the persons entitled
thereto in connection with any transfer or exchange permitted under this
Agreement. No Warrant Certificates shall be issued except (i) those initially
issued hereunder, (ii) those issued upon the exercise of any Warrants pursuant
to Section 2.2, to evidence any unexercised Warrants held by the exercising
Holder of a Warrant and (iii) those issued upon any transfer or exchange
pursuant to Section 2.5. Warrant Certificates shall be executed on behalf of
the Company by its Chairman of the Board, Vice Chairman of the Board,
President, or any Senior Vice President and attested to by its Secretary or an
Assistant Secretary, by manual signatures, and shall have impressed or
imprinted thereon the Company's seal.
(b) Purchaser represents that it (i) is acquiring the Warrants
and will acquire the Warrant Stock for its own accounts, (ii) has authority to
make the statements contained in this Paragraph 2.1, (iii) is an "accredited
investor" as defined under the Securities Act and was not formed for the purpose
of acquiring the Warrants, and (iv) is acquiring the Warrants and will acquire
the Warrant Stock upon exercise of the Warrants for investment and not with a
view to any distribution thereof, provided, however, that the lawful disposition
of the Warrants and Warrant Stock shall at all times be and remain within such
Purchaser's control.
(c) Purchaser understands and acknowledges that the offering of
the Warrants and the Warrant Stock upon exercise of the Warrants pursuant to
this Agreement will not be registered under the Securities Act on the grounds
that the offering and sale of securities contemplated by this Agreement are
exempt from registration pursuant to Section 4(2) of the Securities Act.
Purchaser acknowledges and understands that the Warrants must be held by it
indefinitely unless the Warrants are subsequently exercised or the Warrants or
the Warrant Stock is registered under the Securities Act or an exemption from
such registration is available with respect to any proposed transfer of the
Warrants or Warrant Stock.
(d) On and as of the date hereof and on and as of the Closing,
the Company and Purchaser agree that the Warrants have only nominal value. The
Company and Purchaser further agree that neither of them take or assert any
position inconsistent with such valuation on any tax returns, reports or other
filings made by either of them from time to time with the Internal Revenue
Service or any other governmental authority.
2.2. Exercise of Warrants. Each Warrant may be exercised at any time
on or after its issuance, but not after the Warrant Expiration Date, upon the
terms and subject to the conditions set forth herein and in the applicable
Warrant Certificate. Warrants
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shall be deemed to have been exercised immediately prior to the close of
business on the Exercise Date and the person entitled to receive Warrant Stock
deliverable upon such exercise shall be treated for all purposes as the holder
thereof upon exercise of a Warrant as of the close of business on the Exercise
Date. Promptly following receipt of a Notice of Exercise and payment for the
Warrant Stock, as provided in the Warrant Certificate, the Company shall cause
to be issued and delivered to the person or persons entitled to receive the
same, a certificate or certificates for the Warrant Stock deliverable upon such
exercise.
2.3. Reservation of Warrant Stock; Listing; Payment of Taxes, etc. The
Company covenants that it will at all times reserve and keep available out of
its authorized Common Stock, solely for the purpose of issue upon exercise of
Warrants, such number of shares of Common Stock as shall then be issuable upon
exercise of all outstanding Warrants. The Company covenants that all shares of
Common Stock which shall be issuable upon exercise of the Warrants shall be duly
and validly issued, fully paid, nonassessable and free from all taxes, Liens and
charges with respect to the issue thereof, and that upon request by the
Purchaser the Company will use its best efforts to list such shares on each
national securities exchange, if any, or make such shares eligible for trading
on such other recognized securities market, if any, on which the other shares of
outstanding Common Stock of the Company are then listed or eligible for trading.
The Company shall pay all documentary, stamp, or similar taxes and any
other governmental charges that may be imposed with respect to the issuance of
Warrants, or the issuance or delivery of any Warrant Stock upon exercise of the
Warrants; provided, however, that if the shares of Warrant Stock are to be
delivered in a name other than the name of the Holder of a Warrant being
exercised, then no such delivery shall be made unless the person requesting the
same has paid to the Company the amount of transfer taxes or charges incident
thereto, if any.
2.4. Restrictions on Transfer. (a) Warrants and Warrant Stock shall not
be transferred, hypothecated or assigned before satisfaction of the conditions
specified in this Section 2.4, which conditions are intended to ensure
compliance with the provisions of the applicable federal and state securities
laws. Except as otherwise provided in this Section 2.4, each certificate for
Warrant Stock initially issued upon the exercise of a Warrant, and each
certificate for Warrant Stock issued to any subsequent transferee of any such
certificate, shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the securities or
blue sky laws of any state and may not be
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transferred in violation of such Act and laws, and the rules and
regulations thereunder."
(b) Except as otherwise provided in this Section 2.4, each
Warrant Certificate shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"This Warrant and the securities represented hereby have not been
registered under the Securities Act of 1933, as amended, or the
securities or blue sky laws of any state and may not be transferred in
violation of such Act and laws, and the rules and regulations
thereunder."
(c) Prior to any transfer of Warrants or any Warrant Stock, the
Holder of a Warrant or any Warrant Stock shall give a notice of the proposed
transfer to the Company, and shall obtain from counsel satisfactory to the
Company a written opinion addressed to the Company that the proposed transfer of
Warrants or Warrant Stock may be effected without registration under the
Securities Act and applicable state securities laws. After receipt of the such
notice and written opinion, the Company shall, within five (5) days thereof, so
notify the Holder of such Warrants or such Warrant Stock, and such Holder shall
thereupon be entitled to transfer such Warrants or Warrant Stock in accordance
with the terms of the such notice. Each certificate, if any, evidencing Warrant
Stock or Warrants issued upon such transfer shall bear the restrictive legend
set forth in paragraph (a) or (b) hereof, as applicable, unless in the written
opinion of such counsel, a legend is not required in order to ensure compliance
with such securities laws.
(d) Holders of Warrants and Warrant Stock shall have the right to
request registration of Warrant Stock under the Securities Act pursuant to
Section 10 hereof.
2.5. Exchange; Registration of Transfer; Loss or Mutilation.
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants, or may be
transferred in whole or in part, subject to Section 2.4. Warrant Certificates to
be exchanged shall be surrendered to the Company, and the Company shall execute,
issue and deliver in exchange therefor the Warrant Certificate or Certificates
which the Holder of the Warrant making the exchange shall be entitled to
receive.
(b) The Company shall keep at its office books in which it shall
register Warrant Certificates and the transfer thereof. Upon due presentment
for registration of transfer of any Warrant Certificate at such office, the
Company shall execute, issue and deliver to the transferee or transferees a new
Warrant Certificate or Certificates representing an equal aggregate number of
Warrants.
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With respect to all Warrant Certificates presented for assignment or transfer,
or for exchange or exercise, the Warrant assignment form on the reverse thereof
shall be duly endorsed, or be accompanied by a written instrument or
instruments of transfer, in form satisfactory to the Company, duly executed by
the registered holder or his attorney-in-fact duly authorized in writing. In
addition, the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection therewith.
(c) Prior to due presentment for registration of transfer
thereof, the Company may deem and treat the Holder of any Warrant Certificate as
the absolute owner thereof and of each Warrant Certificate represented thereby
(notwithstanding any notations of ownership or writing thereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary.
(d) Upon receipt by the Company of evidence satisfactory to it of
the ownership of and loss, theft, destruction or mutilation of any Warrant
Certificate and (in case of loss, theft or destruction) of indemnity
satisfactory to the Company, and (in the case of mutilation) upon surrender and
cancellation thereof, the Company shall execute and deliver in lieu thereof a
new Warrant Certificate representing an equal aggregate number of Warrants.
Applicants for a substitute Warrant Certificate shall comply with such other
reasonable regulations and pay such other reasonable charges as the Company may
prescribe.
2.6 Holder of Warrants Not Deemed a Shareholder. No Holder of
Warrants shall be entitled to vote or receive dividends or be deemed the holder
of shares of the Company for any purpose, nor shall anything contained in the
Warrant be construed to confer upon the Holder, any of the rights of a
shareholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise, prior to the
issuance of record to the Holder of the Warrant Stock which he is then entitled
to receive upon exercise of the Warrant.
SECTION 3. CONVERSION OF NOTES
3.1 Conversion Privilege. A Holder of a Note may convert the unpaid
principal balance of the Note into Common Stock of the Company at any time. To
determine the number of shares issuable upon conversion of a Note, divide the
principal amount to be converted by the conversion price in effect on the
conversion date and round the result to the nearest 1/100 of a share.
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The conversion price ("Conversion Price") shall initially be $4.00 per
share of Common Stock. A Holder may convert a portion of a Note. Provisions
of this Agreement that apply to conversion of all of a Note also apply to
conversion of a portion of it.
3.2. Conversion Procedure. To convert a Note, a Holder must (1)
complete and sign the conversion notice attached to the Note, (2) surrender the
Note to the Company at its office maintained for such purpose, (3) furnish
appropriate endorsements and transfer documents, if required, and (4) pay any
transfer or similar tax, if required by Section 3.4. The date on which the
Holder satisfies all of these requirements is the conversion date. As soon as
practical, the Company shall deliver or cause to be delivered a certificate for
the number of full shares of Common Stock issuable upon the conversion and a
check for any fractional share. The person in whose name the certificate is
registered shall be treated as a stockholder of record on and after the
conversion date.
Accrued interest is due on the conversion date and is payable in U.S.
Legal Tender. If a Holder converts more than one Note at the same time, the
number of full shares issuable upon the conversion shall be based on the total
principal amount of the Notes converted. Upon a surrender of a Note that is
converted in part, the Company shall issue and deliver to the Holder a new Note
equal in principal amount to the unconverted portion of the Note surrendered.
3.3 Fractional Shares. The Company will not issue a fractional share
of Common Stock upon conversion of a Note. Instead the Company will deliver its
check in an amount equal to the product of the Market Price for a share of
Common Stock on the conversion date multiplied by the fraction, if any, computed
under Section 3.1.
3.4 Taxes on Conversion. If a Holder of a Note converts it, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue or delivery of shares of Common Stock upon the conversion. However,
the Holder shall pay any such tax which is due on the issue or delivery of such
shares because the shares are issued in a name other than the Holder's name and
no such issue or delivery shall be made unless and until the person requesting
the delivery has paid to the Company the amount of the tax or has established to
the satisfaction of the Company that such tax has been paid.
3.5 Company to Provide Stock. The Company has reserved and shall
continue to reserve out of its authorized but unissued Common Stock or its
Common Stock held in treasury enough shares of Common Stock to permit the
conversion of the Notes in full. All shares of Common Stock which may be issued
upon conversion of the Notes shall be fully paid and non-assessable. Upon
request by the Purchaser, the Company will use its best efforts to comply with
all securities
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laws regulating the offer and delivery of shares of Common Stock upon
conversion of Notes and will use its best efforts to list such shares on each
national securities exchange, if any, on which the Common Stock is listed, or
any nationally recognized inter-dealer trading system in which the Common Stock
is eligible for listing or quotation.
SECTION 4. ANTIDILUTION PROVISIONS.
4.1 Adjustment for Change in Capital Stock. After the date hereof, if
the Company shall, prior to the Warrant Expiration Date or the exercise in full
of the Warrants or if the Company shall, prior to the conversion or payment of
the Notes in full, (a) declare a dividend or make a distribution on its Common
Stock payable in shares of its Capital Stock; (b) subdivide its outstanding
shares of Common Stock into a greater number of shares; (c) combine its
outstanding shares of Common Stock into a smaller number of shares; or (d) issue
any shares of capital stock of the Company by reclassification or capital
reorganization of its shares of Common Stock, then the conversion privilege and
Conversion Price and the Purchase Price in effect immediately prior to such
action shall be adjusted so that the Holder of a Note thereafter converted or a
Warrant thereafter exercised may receive the number and kind of shares of Common
Stock or other Capital Stock which the Holder would have owned or have been
entitled to receive immediately after such action had the Holder converted the
Note or exercised the Warrant immediately prior to the record date in the case
of (a) or the effective date in the case of (b), (c) or (d). Such adjustment
shall be made successively whenever more than one of the events listed above
shall occur, effective immediately after the record date in the case of (a) and
immediately after the effective date in the case of (b), (c) or (d). If after
such an adjustment, the Holder of a Note upon conversion, or the Holder of a
Warrant upon exercise, may receive shares of two or more classes of Capital
Stock of the Company, the Company shall determine the allocation of the adjusted
Conversion Price and Purchase Price, as the case may be, between the classes of
Capital Stock. After such allocation, the conversion privilege and the
Conversion Price and the Purchase Price of each class of Capital Stock shall
thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock in this Section 4.1.
4.2 Adjustment for Common Stock Issuance or Convertible Securities.
After the date hereof, if the Company shall, prior to the Warrant Expiration
Date or the exercise in full of the Warrants or if the Company shall, prior to
the conversion or payment of the Notes in full, (a) issue any Common Stock at a
price per share of Common Stock less than 98% of the Market Price per share of
Common Stock on the date of issuance of such Common Stock or (b) sell and/or
issue rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or
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purchase shares of Common Stock at a price per share of Common Stock
(determined by dividing (a) the aggregate consideration received for the
issuance of such securities by (b) the number of additional shares of Common
Stock which would be outstanding upon exercise or conversion of or in exchange
for such securities at the initial exercise, conversion or exchange rate) lower
than 98% of the Market Price per share of Common Stock in effect on the date of
such sale and/or issuance, then the Conversion Price and the Purchase Price
shall be adjusted so that they shall equal a price determined by multiplying
the Conversion Price and Purchase Price in effect immediately prior thereto by
the fraction of A divided by B. The numerator "A" shall be the sum of (i) the
number of shares of Common Stock outstanding immediately before such sale or
issuance plus (ii) in the case of an issuance of Common Stock, the number of
shares of Common Stock which the aggregate offering price of the total number
of shares so issued would purchase at the Market Price on the date of such
issuance, or, in the case of a sale of Convertible Securities, the number of
additional shares of Common Stock which would be determined by dividing the
aggregate consideration received for the issuance of such securities by the
Market Price per share of Common Stock on the date of such sale. The
denominator "B" shall be the sum of (i) the number of shares of Common Stock
outstanding immediately before such issuance plus (ii) in the case of an
issuance of Common Stock, the number of additional shares of Common Stock so
issued, or in the case of a sale of Convertible Securities, the number of
additional shares of Common Stock which would be outstanding upon exercise or
conversion of or in exchange for such securities at the initial exercise,
conversion or exchange rate.
Such adjustment shall be made successively whenever more than one such event
shall occur, effective immediately after such date of issuance or sale. The
"aggregate consideration received for the issuance of such securities" shall be
deemed to be the consideration received by the Company for the issuance of any
such rights, options, warrants or convertible or exchangeable securities plus
the additional consideration, if any, to be received by the Company upon the
exercise, conversion or exchange thereof.
This Section does not apply to Common Stock issued (a) in any of the
transactions described in Section 4.1, (b) upon the exercise of rights, options
or warrants issued pursuant to the Company's Stock Option Plans or pursuant to
the Congleton Options and Bettingen Warrants, (c) to acquire, or in the
acquisition of, all or any portion of a business in an arm's-length transaction
between the Company or a Subsidiary and an unaffiliated third party, whether
such acquisition shall be effected by purchase of assets, exchange of
securities, merger, consolidation or otherwise, (d) in a bona fide public
offering pursuant to a firm commitment underwriting, (e) pursuant to the
exercise of the Warrants or upon conversion of the Notes, or (f) to the
Company's officers, directors, employees or consultants pursuant to
compensation
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arrangements adopted by the Company's Board of Directors to the extent that the
aggregate number of shares of Common Stock so issued after the date of this
Agreement do not exceed 4.0% of the Common Stock then outstanding and into
which all securities convertible or exchangeable or exercisable for Common
Stock then outstanding may then be convertible or exchangeable into or
exercisable for.
4.3 Adjustment for Other Distributions. After the date hereof, if the
Company shall, prior to the Warrant Expiration Date or the exercise in full of
the Warrants or prior to the conversion or payment of the Notes in full,
distribute to all holders of Common Stock evidences of the Company's
indebtedness or assets or options, warrants or rights or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock (other than options, warrants or rights distributed in
connection with a bona fide public offering), then the Conversion Price and the
Purchase Price shall be adjusted so that they shall equal the price determined
by multiplying the Conversion Price or the Purchase Price in effect immediately
prior thereto by a fraction of which the numerator shall be such Market Price
per share of Common Stock on the record date for determination of stockholders
of the Company entitled to receive such distribution, less the fair market value
(as reasonably determined by the Board of Directors of the Company) of the cash,
portion of the assets or evidences of indebtedness or options, warrants or
rights or convertible or exchangeable securities containing the right to
subscribe for or purchase shares so distributed applicable to one share of
Common Stock, and of which the denominator shall be the Market Price per share
of Common Stock. Such adjustment shall be made successively whenever more than
one such distribution is made, effective immediately after the record date for
the determination of holders of Common Stock entitled to receive such
distribution.
In the event of a distribution by the Company to all holders of its
shares of Common Stock of stock of a Subsidiary or securities convertible into
or exercisable for such stock, then in lieu of giving effect to the adjustment
in the Conversion Price and Purchase Price, the Company may provide the Holder
with the right, upon the conversion of all or a part of the Note or upon
exercise of all or any of the Warrants, to receive from the Company, such
Subsidiary or both, as the Company shall determine, the stock or other
securities to which the Holder would have been entitled had the Holder
converted all or a portion of the Note or exercised all or any of the Warrants
immediately prior to such distribution, all subject to further adjustment as
provided in this Section 4, and the provisions of the first paragraph of this
Section 4.3 shall apply to such Subsidiary stock, as if it were Common Stock.
This Section does not apply to regular cash dividends or cash dividends or
distributions paid out of consolidated current or retained earnings as shown on
the books and records of the Company.
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4.4 Consideration Received. If the Company shall sell and issue
shares of Common Stock, or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock, for a consideration consisting, in whole or in part, of
property other than cash or its equivalent, then in calculating the "price per
share of Common Stock," the "aggregate consideration received for the issuance
of such securities" and the "aggregate offering price" for purposes of Sections
4.2 and 4.3 such property shall have a fair value as determined by the Company's
Board of Directors, and such determination, if made in good faith, shall be
binding upon the Holder.
4.5 When Adjustment May Be Deferred. No adjustment to the conversion
Price or Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least 1.0%; provided, however, that any
adjustments which by reason of this Section 4.5 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All computations made pursuant to the provisions of Section 4 shall be made to
the nearest cent ($0.01), or to the nearest 1/100 of a share, as the case may
be.
4.6 When No Adjustment Required. If the Company shall fix a record
date of the holders of shares of Common Stock for the purpose of entitling them
to receive any dividend or distribution as described in Section 4.1 and 4.3 and
shall, thereafter and before the dividend or distribution, legally abandon its
plan to pay or deliver such dividend or make such distribution, then no
adjustment of the Conversion Price or Purchase Price shall be required by reason
of the fixing of such record date. No adjustment need be made for rights to
purchase Common Stock pursuant to a Company plan for reinvestment of dividends
or interest. No adjustment need be made for a change in the par value or no par
value of the Common Stock. To the extent the Notes become convertible into, or
the Warrants become exercisable for, cash, no adjustment need be made thereafter
as to the cash. Interest will not accrue on the cash.
4.7 Notice of Adjustment. Whenever the Conversion Price or the
Purchase Price is adjusted pursuant to the provisions hereof, the Company shall
forthwith deliver to the Holders an Officers' Certificate describing in
reasonable detail the adjustment and the method of calculation used.
4.8 Readjustment. Upon the expiration of any rights, options,
warrants or convertible or exchangeable securities for which an adjustment has
been made, if any thereof shall not have been exercised, converted or exchanged,
the Conversion Price and the Purchase Price shall, upon such expiration, be
readjusted and shall thereafter be such as it would have been had it been
originally adjusted (or had the original adjustment not been
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<PAGE> 16
required, as the case may be) as if (a) the only shares of Common Stock so
issued were the shares of Common Stock, if any, actually issued or sold upon
the exercise, conversion or exchange of such rights, options, warrants or
convertible or exchangeable securities and (b) the "aggregate consideration
received for the issuance of such securities" was the consideration actually
received by the Company for the issuance of such rights, options, warrants or
convertible or exchangeable securities, whether or not exercised, converted or
exchanged, plus the additional consideration, if any actually received by the
Company upon the exercise, conversion or exchange thereof; provided, however,
that no such readjustment shall have the effect of increasing the Conversion
Price or the Purchase Price by an amount in excess of the amount of the
adjustment initially made in respect of the issuance, sale or grant of such
rights, options, warrants or convertible or exchangeable securities.
4.9 Reorganization of Company. If at any time prior to the earlier of
the conversion or payment of the Notes or prior to the earlier of the Warrant
Expiration Date or exercise of Warrants in full, the Company shall merge with an
entity other than one of its Subsidiaries, liquidate, or dissolve, then the
Company shall give the Holder of the Note and the Holder of the Warrants at
least 15 days written notice of such event and such Holder shall be entitled to
convert the Note (to the extent the Note has not been previously converted) and
to exercise the Warrants (to the extent the Warrants have not previously been
exercised) at any time prior to the effective date of such merger or the date of
approval of such liquidation or dissolution by the shareholders of the Company,
and to the extent the Note is not converted and the Warrants are not exercised
prior to such date, the right to convert the Note and to exercise the Warrants
(as the case may be) shall terminate.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
As an inducement to, and as part of the consideration for the purchase
of the Notes, the Company represents and warrants that:
5.1 Corporate Organization and Authority. Each of the Company and the
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware (except for Beltline Resources,
Inc., a Subsidiary of the Company which is a corporation duly organized and
validly existing, and in good standing under the laws of the State of Texas),
(b) has full corporate power and authority to carry on its business as now
conducted, (c) has full corporate power and authority to enter into the Purchase
Documents to which it is a party and to execute and deliver such Purchase
Documents as contemplated by this Agreement and (d) is duly qualified or
licensed and in good standing in each state or jurisdiction in which the
ownership of its properties or the conduct of its
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<PAGE> 17
business requires said qualification or licensing, except where the failure to
be so qualified, licensed and in good standing could not reasonably be expected
to have a Material Adverse Effect.
5.2 Subsidiaries. The Company owns directly or beneficially all of the
authorized and outstanding Capital Stock of each subsidiary. The Company has
good title to all such issued and outstanding stock of each Subsidiary, such
stock is subject to no lien, pledge, charge or encumbrance, and all such stock
has been duly authorized and validly issued and is fully paid and nonassessable.
5.3 Authorization and Approvals. The execution, delivery and
performance of the Purchase Documents do not (a) require any approval or consent
on the part of, or filing, registration or qualification with, any governmental
body, federal, state or local that has not been obtained or performed, except:
(i) as contemplated by Section 10 of this Agreement relating to the registration
of Common Stock underlying the Notes or issuable upon exercise of Warrants,,
(ii) the filing of the Financing Statements and the recording of the Deed of
Trust in the offices set forth on Schedule 5.3, or (iii) any reports or
schedules required to be filed with the SEC pursuant to the Exchange Act, and
(b) contravene (i) the charter or by-laws of the Company or any subsidiary, or
(ii) any applicable law or contractual restriction binding on or affecting the
Company or any Subsidiary, and (c) result in or require the creation of any Lien
other than the Permitted Liens.
5.4 Valid and Binding Agreement. Each of the Purchase Documents
constitutes the legal, valid and binding obligations of each of the Company and
Subsidiaries which are parties thereto, enforceable against them in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity.
5.5 Collateral. The Mortgaging Subsidiary is the owner of all of the
Collateral as set forth in the Deed of Trust. The Collateral is not subject to
any Liens other than those in favor of Purchaser, and the Permitted Liens.
5.6 Texas Real Property. Schedule 5.6 accurately identifies the
leases and the lessors thereof, which comprise the Texas Real Property. The
Texas Real Property is not subject to any Lien other than those in favor of the
Purchaser and the Permitted Liens.
5.7 Actions, Suits or Proceedings. Except as set forth in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994, there
are no actions, suits or proceedings, at law or in equity, and no proceedings
before any arbitrator or by or before any governmental commission, board, bureau
or other administrative agency, pending, or to the best knowledge of the
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Company threatened, against or affecting the Company, any Subsidiary, or any
properties or rights of the Company or any Subsidiary which, if adversely
determined, could materially impair the right of the Company or any Subsidiary
to carry on business substantially as now conducted or could have a Material
Adverse Effect upon the Company and the Subsidiaries individually, or taken as
a whole.
5.8 Financial Statements. Except as set forth in the Company's Annual
Report on Form 10-K for the year ended December 31, 1994, the Financial
Statements have been prepared in accordance with generally accepted accounting
principles consistently applied, except as otherwise indicated in such Financial
Statements or in an auditor's report with respect thereto, and present fairly
the financial condition of the Company and its Subsidiaries as of the dates
indicated therein, and the results of their operations and changes in their cash
flows for the periods then ended. To the best of the Company's knowledge,
except as set forth in the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, neither the Company nor any Subsidiary has any material
contingent obligations, liabilities for taxes, long-term leases or unusual
forward or long-term commitments not disclosed by, or reserved against, in the
Financial Statements.
5.9 No Adverse Change. There has been no material adverse change in
the business, properties or financial condition of either the Company or any
Subsidiary since the date of the latest Financial Statements.
5.10 Expiration of Certain Stock Options. There are no stock options
granted by the Company or any Subsidiary and, to the best knowledge of the
Company, there are no shareholders owning directly or beneficially, more than 5%
of the outstanding stock of the Company, which have granted stock options, or
agreed to transfer stock which options or agreements have not expired without
said stock options or agreements being exercised, other than Stock Option Plans,
and other than the agreement of each of William M. McKnight, Jr. and Raymond G.
Larson to grant a five year option to James Congleton to purchase 5,000 shares
(10,000 total) of Common Stock at an initial exercise price of $4.00 per share,
and the requested transfer of 20,000 shares of Common Stock from Oren L. Benton
to Raymond G. Larson.
5.11 SEC Reports and Financial Statements. Each of the Company and its
Subsidiaries have filed with the Commission all forms, reports, schedules,
statements and other documents required to be filed under the Exchange Act or
the Securities Act. Such documents of the Company and any of the Subsidiaries,
at the time filed, (a) did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading and (b)
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complied in all material respects with the applicable requirements of the
Exchange Act and the Securities Act, as the case may be, and the applicable
rules and regulations of the SEC thereunder. The Company is not aware of the
existence of any facts which have not been disclosed in the such documents of
the Company or any of its Subsidiaries which would be likely to have a Material
Adverse Effect on the Company and its Subsidiaries, individually or taken as a
whole.
5.12 Taxes. The Company has and each of its Subsidiaries has filed all
federal, state and foreign income tax returns which are required to be filed at
or prior to the date of this Agreement, and each has paid or caused to be paid
all taxes as shown on such returns or on any assessment received by it to the
extent that such taxes or assessments have become due at or prior to the date of
this Agreement. Federal income tax returns of the Company and its Subsidiaries
have been examined and reported on by the taxing authorities or closed by
applicable statutes and satisfied for all fiscal years prior to and including
the fiscal year ended on July 31, 1991.
5.13 Chief Executive Office and Location of Collateral. The chief
executive office and chief place of business of each of the Company and the
Mortgaging Subsidiary, and the office where the Company and the Mortgaging
Subsidiary each keep their respective records concerning the Collateral is in
the State of Texas at 12750 Merit Drive, Suite 1020, Dallas, Texas 75251. The
records concerning the Texas Real Property are located in the State of Texas at
Suite 250, 5656 Staples, Corpus Christi, Texas 78411.
5.14 Valid Liens. The Liens granted by the Company and the Mortgaging
Subsidiary to Purchaser in or on the Collateral and the Texas Real Property are
valid and perfected Liens, securing the obligations of the Company and the
Mortgaging subsidiary under the Purchase Documents to Purchaser, and the
Collateral and the Texas Real Property are subject to no Liens that are prior
to, on a parity with or junior to the Liens in favor of the Purchaser, except
for Permitted Liens.
5.15 Disclosure. None of the Purchase Documents (including the
Exhibits and Schedules thereto) , contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made.
5.16 Compliance with Agreement; No Default. The Company is in
compliance with all of the covenants contained in the Purchase Documents and no
Event of Default has occurred and is continuing. The Company has performed and
complied in all material respects with all agreements and conditions contained
in this Agreement which are required to be performed or complied with by the
Company on or before the Closing Date.
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5.17 Regulation U. The Company is not engaged in, the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System).
5.18 Compliance with Other Agreements. Neither the Company nor any
subsidiary is in default nor has any event or circumstance occurred which, but
for the passage of time or the giving of notice, or both, would constitute a
default (in any respect which would have a Material Adverse Effect) under any
loan or credit agreement, indenture, mortgage, deed of trust, security agreement
or other instrument or agreement evidencing or pertaining to any Indebtedness of
the Company or any Subsidiary. Neither the Company nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
restriction which could reasonably be expected to have a Material Adverse
Effect.
5.19 Compliance with Laws. Neither the Company nor any Subsidiary (i)
is in violation of any law, rule, order, regulation of any kind or any other
governmental requirement; or (ii) has failed to obtain any license, permit,
franchise or other governmental authorization necessary to the ownership of any
of its respective properties or the conduct of its respective business; except
such violations and failures which could not reasonably be expected to have in
the aggregate (in the event that such violation or failure was asserted by any
Person through appropriate action) a Material Adverse Effect.
5.20 Qualified Plans. Neither the Company nor any Affiliate is or has
been covered by, contributing to or required to contribute to any multiemployer
plan or multiple employer plan. At the date of this Agreement no such plan
exists in which the Company or any of its Affiliates is involved.
5.21 Investment or Holding Company. Neither the Company nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended. Neither the Company nor any Subsidiary is a "holding company" or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" as such terms are used in the Public Utility Holding Company Act of
1935, as amended, and neither the Company nor any Subsidiary is subject to any
obligations, duties or liabilities thereunder.
5.22 Environmental Matters. Except as described on Schedule 5.22 and
except where all of the matters referred to in any of clauses (i) through (v)
below in the aggregate could not reasonably be expected to have a Material
Adverse Effect:
(i) None of the real property or other property now or previously
owned or now or previously operated by the Company or any of its
present or former Subsidiaries" wherever
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located,, has, to the best of the Company's knowledge, ever been used
by previous owners or operators in the disposal of or to refine,
generate, manufacture, produce, store, handle, treat, transfer,
release, process, or transport any hazardous waste, hazardous
substance, radionuclides, radioactive materials or wastes in violation
of any environmental protection statute, or where any such activity
has created conditions or circumstances requiring environmental
remedial action which could reasonably be expected to have a Material
Adverse Effect, and the Company and its Subsidiaries do not now and
the Company and its present or former Subsidiaries have not in the
past used any such real property or other property for the purpose of
disposal of, refining, generating, manufacturing, producing, storing,
handling, treating, transferring, releasing, processing, or
transporting any hazardous waste, hazardous substance, radionuclides,
radioactive materials or wastes in violation of any environmental
protection statute, or where any such activity has created conditions
or circumstances requiring environmental remedial action which could
reasonably be expected to have a Material Adverse Effect;
(ii) To the best of the Company's knowledge and belief after due
inquiry, (A) none of the real property or other property now or
previously owned or now or previously operated by the Company or any of
its present or former Subsidiaries, wherever located, has been
investigated (other than routine inspections in the ordinary course of
business), designated, listed or identified in any manner by the
Environmental Protection Agency or any other United States federal or
state or foreign governmental agency charged with administering or
enforcing any environmental protection statute, or under or pursuant to
RCRA or CERCLA or any other environmental protection statute as a
potential hazardous waste or potential hazardous substance disposal,
release, threatened release or removal site,, Superfund clean-up site,
or candidate for removal or closure pursuant to RCRA, CERCLA or any
other environmental protection statute, and (B) it has received no
material notice that any of the real property or other property now or
previously owned or now or previously operated by the Company or any of
its present or former Subsidiaries, wherever located, or any property
to or at which the Company or any of its present or former Subsidiaries
may have transported, treated, stored or disposed, or arranged for the
transportation, treatment,, storage or disposal of, any hazardous
waste, hazardous substance, radioactive materials or wastes,
radionuclides, mining wastes or any pollutants or contaminants was so
(during the Company's or its present or former Subsidiary's ownership),
or is being so, investigated (other than routine inspections in the
ordinary course of business) , designated, listed, or identified by the
EPA or any other United States or foreign governmental agency, which
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could reasonably be expected to have a Material Adverse Effect;
(iii) Neither the Company nor any of its present or former
Subsidiaries has received notice of any Lien arising under or in
connection with any fund or any environmental protection statute that
attached to any revenues or to any property owned by the Company or any
of its present or former subsidiaries, wherever located;
(iv) Neither the Company nor any of its present or former
Subsidiaries has received any material summons, citation, notice,
directive, letter, or other communication, written or oral, from the
EPA or any other United States federal or state or foreign governmental
agency or instrumentality, authorized pursuant to an environmental
protection statute, concerning any intentional or unintentional action
or omission by the Company or any of its present or former Subsidiaries
resulting in the releasing, spilling, leaking, pumping, pouring,
emitting, emptying, dumping, or otherwise disposing of hazardous waste,
hazardous substance, radionuclides, radioactive materials or wastes or
mining wastes into the environment in violation of any environmental
protection statute, or where such activity has created conditions or
circumstances requiring environmental remedial action which could
reasonably be expected to have a Material Adverse Effect.
(v) To the best of the Company's knowledge, neither the Company
nor any present or former Subsidiary of the Company has violated any
environmental protection statute which could reasonably be expected to
have a Material Adverse Effect.
Notwithstanding any of the foregoing, the present liability and future
liability, to the best of the Company's knowledge, if any, of the Company and
its Subsidiaries, which could reasonably be expected to arise in connection
with environmental matters or environmental protection statutes will not have a
Material Adverse Effect.
5.23 Location of Plants and Reserves. The processing plants and all
material processing equipment, fixtures, and improvements used in connection
with the processing of minerals produced from the lands and/or leases subject to
the Deed of Trust are located on the lands covered by the leases described on
Schedule 5.23; and not less than 97% of all in place uranium reserves
attributable to the lands and/or leases subject to the Deed of Trust are located
on the lands covered by the leases described on Schedule 5.23.
5.24 Mortgaging Subsidiary to Receive Significant Proceeds of Notes.
The Company represents and warrants that a significant
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portion of the proceeds received from the sale of the Notes will be advanced or
expended on behalf of the Mortgaging Subsidiary.
SECTION 6. AFFIRMATIVE COVENANTS
6.1 Payment of Notes and Maintenance of Office. The Company will
punctually pay or cause to be paid the principal and interest to become due
under the Notes according to the terms thereof and will maintain an office where
notices, presentations and demands under this Agreement or the Notes may be made
upon it. Such office shall be maintained at the address of the chief executive
office of the Company set forth in Section 5.13 until such time as the Company
shall so notify the Holders of the Notes of any change of location of such
office.
6.2 Reporting Requirements.
(a) So long as the Notes remain outstanding, the Company shall
mail to each Holder (i) as soon as available and in any event within 90 days
after the end of each fiscal year of the Company, (x) a copy of the annual
report on Form 10-K for such year for the Company and its Subsidiaries, which
shall contain the consolidated balance sheet of the Company and its Subsidiaries
as of the end of such year and the related consolidated statements of operations
and cash flows of the Company and its Subsidiaries for such year, all audited
and certified by independent certified public accountants, (z) a forecast
prepared by responsible officers of the Company and certified by the chief
financial officer of the Company, in form and detail reasonably satisfactory to
Purchaser, of the consolidated balance sheet and the related consolidated
statements of operations and cash flows of the Company and its Subsidiaries on a
monthly basis for the next twelve months; and (b) within 15 days after the end
of each quarter, a certificate of compliance, certified by the chief financial
officer of the Company, in the form of Schedule 6.2, stating that no Event of
Default exists or would exist with the giving of notice or the passage of time,
or setting forth each Event of Default that does or would so exist, with the
action the Company proposes to take with respect to such Event of Default;
(b) As soon as possible and in any event within five days after
any officer of the Company acquires knowledge of the occurrence of any Event of
Default or any event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default, a statement of the chief financial officer
of the Company setting forth the details of such Event of Default or event and
the action which the Company has taken and proposes to take with respect
thereto;
(c) Promptly after the sending or filing thereof, copies of all
reports which the Company sends to its stockholders
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generally and copies of all reports and registration statements which the
Company or any Subsidiary or either of them files with the Securities and
Exchange Commission, any foreign securities regulatory authority or any
securities exchange (domestic or foreign), and
(d) Within thirty (30) days following the end of each month, a
report as to each producing property of the Company and its Subsidiaries, in
form and detail reasonably satisfactory to the Purchaser, setting forth for such
month gross and net production (including, without limitation, the average
gallons per minute rate, average parts per million of U3O8, pounds of U3O8
produced and estimated percentage recovery rate), sales revenues and prices of
minerals sold, taxes and royalties assessed and paid, reclamation costs incurred
and accrued, operating expenses, capital costs, all with respect to each such
property.
6.3 Maintenance of Insurance. The Company shall maintain, and cause
each of its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts (subject to reasonable
deductibles) and covering such risks as are usually carried by companies engaged
in similar businesses and owning similar properties in the same general areas in
which the Company or such Subsidiary operates, with Purchaser indicated as loss
payee on all insurance covering the Collateral or the Texas Real Property;
6.4. Inspection. The Company shall permit, and cause each of its
Subsidiaries to permit, the duly authorized representatives of the Purchaser at
all reasonable times during normal business hours to examine the assets, books
and records of the Company and its Subsidiaries and to make copies thereof and
to visit, inspect, evaluate and prepare engineering reports regarding the
properties of the Company and its Subsidiaries.
6.5. Maintenance of Properties. The Company shall maintain, preserve
and keep, and cause each of its Subsidiaries to maintain, preserve and keep, all
plant and equipment necessary or useful to the Company in the proper conduct of
their business, in good repair, working order and condition (ordinary wear and
tear excepted) and from time to time make all appropriate additions and
improvements thereto so that at all times the efficiency thereof is maintained
in all material respects, and operate all such plants and equipment, or cause
all such plants and equipment to be operated, in all material respects in
accordance with all applicable laws and customary industry practices.
6.6 Compliance with Laws. The Company and its Subsidiaries shall
comply with all statutes, laws, ordinances, or government rules and regulations
to which they are subject, the noncompliance with which would have a Material
Adverse Effect.
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6.7 Corporate Existence. The Company will do or cause to be done all
things reasonably necessary to preserve and keep in full force and effect its
corporate existence and the corporate existence of each of its Subsidiaries, in
accordance with the respective organizational documents of each and the rights
(charter and statutory), licenses and franchises of the Company and its
Subsidiaries.
6.8 Notice of Certain Corporate Actions. If at any time prior to the
maturity date of the Notes:
(a) the Company shall declare any stock dividend or distribution
on the Common Stock; subdivide its outstanding shares of Common Stock into a
greater number of shares; combine its outstanding shares of Common Stock into a
smaller number of shares; or issue any shares of Capital Stock of the Company by
reclassification or capital reorganization of its shares of Common Stock;
(b) the Company shall authorize the issuance of any options,
warrants or rights to all holders of Common Stock entitling them to subscribe
for or purchase any shares of any class of stock of the Company or to receive
any other rights; then the Company shall give written notice to Purchaser, as
promptly as practicable, but in any event at least ten days prior to the
applicable record date (or determination date) mentioned below containing a
brief description of the proposed action and stating, to the extent such
information is available, (A) the date on which a record is to be taken for the
purpose of such dividend, distribution or rights, or, if a record is not to be
taken, the date as of which the holders of Common Stock to be entitled to such
dividend, distribution or rights are to be determined, or (B) the date on which
such reclassification or consolidation is expected to become effective and the
date as of which it is expected that holders of Common Stock shall be entitled
to exchange their shares of Common Stock for shares of stock, securities or
other assets deliverable upon such reclassification or consolidation.
6.9 Administration Expenses.
(a) Reimbursement. The Company shall reimburse Purchaser, on the
Closing Date, and thereafter on demand, for the Administration Expenses. Until
paid, the Administration Expenses, together with interest at the highest rate
applicable, shall be added to and become a part of the Indebtedness of the
Company to Purchaser payable on demand and secured by the Collateral and the
Texas Real Property.
6.10 Environmental Permits and Certificates. Upon the request of
Purchaser, the Company will promptly furnish the Purchaser with environmental
certificates, reports, permits and studies received or obtained by the Company
as to any of the Texas Real Property.
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6.11 Actions of the Company upon Transfer of the Notes. Upon the
transfer of the Notes under Section 1.5(b) hereof, the Company shall take such
action as is reasonably necessary to ensure that all of the rights of the Holder
and the Purchaser, afforded by the Purchase Documents are transferred, conveyed
and shall inure to the benefit of the new Holder, including, without limitation,
the Holder's rights in the Collateral described in Section 1.5(d) hereof; the
Holder's right to exercise Warrants under Section 2.2 hereof; and the Holder's
right to convert the Notes into Common Stock under Section 3 hereof.
6.12 Appointment of Designees of the Purchaser to Board of Directors.
At the Closing, the Company shall appoint two designees of the Purchaser to the
Company's Board of Directors. In addition, while the Indebtedness under the
Notes shall remain unpaid, the Company shall nominate said designees for
re-election at each annual meeting of stockholders of the Company.
6.13 Stockholder Approval. The Company shall obtain stockholder
approval of the issuance of the Common Stock to the Purchaser as contemplated by
this Agreement on or before December 31, 1995.
SECTION 7. NEGATIVE COVENANTS.
So long as any Indebtedness of the Company under the Notes shall
remain unpaid, the Company shall not, unless the Purchaser shall otherwise
consent in writing:
7.1 Liens, Etc. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Lien upon or with respect to any
property of the Company or of any of its Subsidiaries, whether now owned or
hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any
right to receive income, other than the Liens in favor of Purchaser and the
Permitted Liens.
7.2 Indebtedness. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Indebtedness other than:
(a) Indebtedness to the Purchaser pursuant to the Purchase
Documents;
(b) Existing Debt described on Schedule 7.2(b) hereto, and any
extension, renewal or refinancing thereof which does not increase the
principal amount thereof outstanding at the time of such extension,
renewal or refinancing; provided that the other terms and conditions of
such extension, renewal or refinancing are not materially more onerous
than the existing terms and conditions of such Indebtedness;
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(c) Accounts payable incurred in the ordinary course of business;
(d) Indebtedness incurred for working capital purposes, not to
exceed at any one time $5,000,000 in the aggregate; and
(e) Inter-company Indebtedness between the Company and any of its
Subsidiaries or between any Subsidiaries.
7.3 Lease Obligations. The Company shall not create, incur or suffer
to exist, or permit any of its Subsidiaries to create, incur or suffer to exist,
any obligations for the payment of rental for any property or other amounts
under leases or agreements to lease (other than uranium and other mineral leases
and other mineral permits or similar agreements granting a right to minerals, in
each case entered into in the ordinary course of business), except for leases
entered into in the ordinary course of the Company's or any Subsidiary's
business so long as the aggregate amount of payments under all such leases does
not exceed $500,000 in any year.
7.4 Dividends, Etc. The Company shall not declare or make (or permit
any of its Subsidiaries to do so) any dividend payment or other distribution of
assets, properties, cash, rights, obligations or securities on account of any
shares of any class of Capital Stock of the Company or any of its Subsidiaries,
or purchase, redeem or otherwise acquire for value (or permit any of its
Subsidiaries to do so) any shares of any class of Capital Stock of the Company
or any of its Subsidiaries or any warrants, rights or options to acquire any
such shares, now or hereafter outstanding, except that any Subsidiary may
declare or pay dividends to its parent.
7.5 Mergers, Etc. The Company shall not merge or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets of, any Person, or permit any of its
Subsidiaries to do so, except: (a) any Subsidiary may merge into or consolidate
with the Company or any other Subsidiary; (b) any Subsidiary of the Company may
transfer all or substantially all of its assets to the Company; and (c) the
Company may transfer all or substantially all of its assets to a Subsidiary and
a Subsidiary may transfer all or substantially all of its assets to another
Subsidiary with the prior consent of the Purchaser, which consent will not be
unreasonably withheld; provided that, none of the above exceptions shall apply
unless, immediately after giving effect to such proposed transaction, no Event
of Default or event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default would exist and all Liens existing in favor
of the Purchaser shall continue unimpaired.
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7.6 Investment Company Act. The Company shall not be or become an
investment company subject to registration under the Investment Company Act of
1940, as amended.
7.7 Disposition of Assets. Other than in the ordinary course of
business, transfer, sell, assign, lease, or otherwise dispose of any of the
Company's or the Subsidiary's property or assets, including any Collateral or
the Texas Real Property, without the prior written consent of Purchaser.
7.8 Change of Name or Location. The Company and its Subsidiaries
shall not change their name or their principal place of business or chief
executive office from the offices listed in Section 5.13, or locate the
Collateral at locations other than those listed on Schedule 5.23.
7.9 Use of Proceeds. The Company shall not disburse any proceeds
received from the sale of the Notes in a manner inconsistent with the plan of
disbursement set forth on Schedule 7.9, without prior approval by the Company's
Board of Directors as constituted in accordance with Section 6.12.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES
8.1 Events of Default. An "Event of Default" occurs if:
(a) the Company defaults in the payment of principal of or
interest on any Note when the same becomes due and payable and the default
continues for a period of five (5) days;
(b) the Company or any Subsidiary fails to comply with any term
or covenants in any of the Purchase Documents (other than payment terms of the
Notes and the other terms the default of which is specifically set forth
herein), and the failure continues for a period of thirty (30) days.
(c) an event of default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness (other than the Notes) of the Company or any
Subsidiary whether such Indebtedness now exists or shall be created hereafter,
if as a result of such event of default the Indebtedness is due and payable in
full and the aggregate amount of such Indebtedness is greater than $500,000.
(d) the Company fails to obtain the shareholder approval
described in Section 6.13 hereof by December 31, 1995, provided that Lindner
Fund, Inc. affirmatively votes all of its shares.
(e) the Company uses any proceeds of the purchase of the Notes in
a manner not permitted by Section 7.9 hereof and the Purchaser does not consent
to such unpermitted use in writing within five business days after such use.
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(f) a final judgment for the payment of money in an amount of
$500,000 or more is entered by a court of competent jurisdiction, against the
Company or any Subsidiary which remains undischarged for a period (during which
period execution shall not be effectively stayed) of thirty (30) consecutive
days.
(g) the Company or Mortgaging Subsidiary files a petition in
voluntary bankruptcy or seeking relief under any provision of any bankruptcy,
reorganization, arrangement, insolvency or readjustment of debt law of any
jurisdiction, whether now or hereafter in effect, or consents to the filing of
any petition against it under any such law; or
(h) a petition is filed against the Company or Mortgaging
Subsidiary under any bankruptcy, reorganization, arrangement, insolvency or
readjustment of debt law of any jurisdiction, whether now or hereafter in
effect, and is not dismissed within sixty (60) days after such filing.
(i) the Company fails to appoint certain designees to the Board
of Directors as required by Section 6.12 and to otherwise comply with the
obligations set forth therein .
(j) the Company fails to comply with the obligations of Section
6.2(b).
8.2 Acceleration. If an Event of Default (other than an Event of
Default specified in clauses (g) and (h) of Section 8.1) occurs and is
continuing, the Purchaser, or the Holders of a majority in principal amount of
the Notes taken as a whole then outstanding, by written notice to the Company
may declare the unpaid principal of and accrued interest on all the Notes to be
due and payable. Upon such declaration the principal and interest shall be due
and payable immediately. If an Event of Default specified in clause (g) or (h)
of Section 8.1 occurs, the unpaid principal of and accrued interest on all of
the Notes shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of any Holder. The Purchaser by notice to
the Company may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default have been cured or waived, except for the nonpayment of principal or
interest that has become due solely because of the acceleration.
8.3 Other Remedies. If an Event of Default occurs and is continuing,
the Holders of the Notes may pursue any available remedy to collect the payment
of principal or interest on the Notes or to enforce the performance of any
provision of the Notes or this Agreement. Any failure of the Holders to take
any steps to enforce, foreclose upon, or realize on any of the Collateral and/or
Texas Real Property or to exercise any other right under the Notes or the other
Purchase Documents generally, shall not operate as a
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waiver of any other right or remedy of the Holders thereunder or as a defense
to the enforcement of the Notes and the other Purchase Documents. Moreover,
the Holders' manner of disposing of any of the Collateral and/or the Texas Real
Property or marshalling is not a defense to the enforcement of the Holders'
rights under the Notes and the other Purchase Documents.
8.4 Rights of Holders to Receive Payment. The right of any Holder of
a Note to receive payment of principal and interest on the Note, on or after the
respective due dates expressed in the Note, shall not be impaired or affected
without the consent of the Holder. Notwithstanding any other provision of this
Agreement, the right of any Holder of a Note to bring suit for the enforcement
of the right to convert the Note shall not be impaired or affected without the
consent of all Holders.
8.5 Waiver of Defaults. The Purchaser or the Holders of a majority in
principal amount of the Notes taken as a whole then outstanding, by notice to
the Company, may waive an existing Event of Default and its consequences
provided that all payments of principal and interest on the Notes have been
made, other than principal and interest that became due solely because of an
acceleration which has been rescinded as provided in Section 8.2.
SECTION 9. CONDITIONS OF PURCHASE
The obligation of the Purchaser to purchase the Notes under this
Agreement is subject to receipt by the Purchaser of the following documents, in
form and substance satisfactory to the Purchaser on the Closing Date, which the
Company agrees to provide:
(a) Certificates of recent date of the appropriate authority or
official of the Company's and each Subsidiary's state of incorporation,
listing all incorporation documents of the Company and each Subsidiary
on file in that office and certifying as to the good standing and
corporate existence of the Company and each Subsidiary, together with
copies of such incorporation documents of the Company and each
Subsidiary, certified as of a recent date by such authority or official
and certified as true and correct as of the Closing Date by a duly
authorized officer of the Company and each Subsidiary;
(b) A copy of the Bylaws of the Company and each Subsidiary,
together with all authorizing resolutions and evidence of other
corporate action taken by the Company and each Subsidiary to authorize
the execution, delivery and performance by the Company and each
Subsidiary of each of the Purchase Documents to which they are a party
and the consummation by them of the transactions contemplated by the
Purchase Documents, certified as true and correct as of the Closing
Date by a duly authorized officer of the Company and each Subsidiary;
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(c) Certificates of incumbency of the Company and each Subsidiary
containing, and attesting to the genuineness of, the signatures of
those officers authorized to act on behalf of the Company and each
Subsidiary in connection with the Purchase Documents, and the
consummation by the Company and each Subsidiary of the transactions
contemplated by the Purchase Documents, certified as true and correct
as of the Closing Date by a duly authorized officer of the Company and
each Subsidiary;
(d) The Notes duly executed by the Company;
(e) The Warrants, duly executed by the Company;
(f) The Guaranty, duly executed by the Mortgaging Subsidiary;
(g) The Deed of Trust duly executed by the Mortgaging Subsidiary;
(h) Mortgage Title Opinions for the Texas Real Property
reflecting a first lien, subject only to Permitted Liens, in favor of
the to Purchaser and otherwise satisfactory to the Purchaser;
(i) Copies of insurance certificates covering the Collateral,
including the Texas Real Property, naming the Purchaser as mortgagee
and lender loss payee, and otherwise meeting the requirements of
Section 6.3;
(j) An opinion of counsel to Company and the Mortgaging
Subsidiary addressed to the Purchaser and its counsel, dated on the
Closing Date, substantially in the form attached as Schedule 9;
(k) A certificate by Company certifying that the representations
and warranties contained in Section 5 of this Agreement are true and
correct as of the Closing Date;
(l) Any financing statements, continuation statements, extension
agreements, amendments and other documents, properly completed and
executed (and acknowledged when required) by the Company and each
Subsidiary in such form as required by the Purchaser or its counsel to
perfect or protect the Purchaser's security interest in the Collateral
and the Texas Real Property;
(m) Any and all such other documents as the Purchaser may
reasonably request.
(n) Payment of all Administration Expenses incurred by Purchaser
up to the Closing Date.
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(o) Certified copies of resolutions of the Board of Directors of
the Company appointing two designees of the Purchaser to the Board in
accordance with the bylaws of the Company.
(p) A duly executed copy of the Congleton Agreement in the form
of Exhibit 4.
(q) A duly executed copy of the Bettingen Agreement in the form
of Exhibit 5.
(r) The issuance of the Congleton Options and the Bettingen
Warrants contemplated by the respective Agreements described in
subparagraphs (p) and (q) of this Section 9.
SECTION 10. REGISTRATION RIGHTS RELATING TO CONVERSION STOCK AND WARRANT STOCK
10.1 Demand Registration Rights. If the Company shall receive from the
Holder of any Notes, Warrants, Conversion Stock or Warrant Stock a request to
effect the registration under the Securities Act of a number of shares of
Conversion Stock or Warrant Stock constituting at least 25% of all shares of
unregistered Conversion Stock and Warrant Stock (issued or issuable), the
Company shall promptly give notice to all other Holders of Notes, Warrants,
unregistered Conversion Stock and unregistered Warrant Stock of a proposed
registration and, subject to the provisions of Section 10.2, the Company shall
as expeditiously as possible use its best efforts to effect registration under
the Securities Act of the Conversion Stock and Warrant Stock which the Company
has been requested to register by such Holders who have requested registration
of Conversion Stock or Warrant Stock within 20 days following such notice from
the Company. The Company shall bear all Registration Expenses in connection
with any demand registration effected under this Section 10.1.
10.2 Limitation on Demand Registration Rights. The Company shall not
be obligated to effect any demand registration pursuant to Section 10.1:
(a) after the expiration of two years following the date on which the
last of the Notes are converted or the date on which the last of the
Warrants shall have been exercised, whichever is later;
(b) more than three times; provided the Registration Statement is
declared effective and remains effective for 90 days in accordance with
Section 10.4(b); or
(c) if the demand relates to any shares of Conversion Stock underlying
the Notes, or shares of Warrant Stock issuable upon
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exercise of the Warrants, unless the Notes are duly converted and the
Warrants are duly exercised, and such shares have been issued prior to
the effective date of the Registration Statement covering such shares
of Conversion Stock or Warrant Stock; or
(d) within 180 days after the effective date of a Registration
Statement the preparation of which the Company had initiated at the
time of the request for registration or in which the Holders of
Conversion Stock or Warrant Stock were entitled to participate in
accordance with Section 10.3; or
(e) on a date which, under the General Rules and Regulations of the
Commission, would require the inclusion in such Registration Statement
(to the extent such inclusion is required or permitted under such Rules
and Regulations) of historical financial statements of the Company
other than those contained in the most recently required report of the
Company on Forms 10-K and 10-Q, or financial statements of an acquired
business or businesses at a time prior to the time such financial
statements would be required to be filed by the Company pursuant to
Form 8-K; or
(f) if in the good faith judgment of the Board of Directors of the
Company, such registration would be materially detrimental to the
Company and the Board of Directors of the Company concludes, as a
result, that it is essential to defer the filing of such Registration
Statement and the Company furnishes to the requesting holder or holders
of Conversion Stock and Warrant Stock an Officers' Certificate to that
effect; provided that the Company may not defer the filing for a period
of more than 90 days after receipt of the initial request;
(g) if the amount of shares as to which registration under the
Securities Act has been requested by any one Holder may be sold at that
time without registration under the Securities Act pursuant to Rule 144
thereunder (or any successor rule thereto), then the Company shall not
be obligated to include such shares in any registration pursuant to
Section 10.1 and such amount of shares shall be disregarded for
purposes of satisfying the 25% requirement set forth above; or
(h) unless the Company is eligible to register such shares on a Form
S-3 Registration Statement under the Securities Act (or any successor
form thereto).
10.3. Piggyback Registration Rights. If, prior to the second
anniversary of the earlier to occur of (a) the exercise of the Warrants in full,
(b) the conversion of the Notes in full or (c)the Warrant Expiration Date, the
Company proposes to register any of its securities under the Securities Act for
sale by the
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Company solely for cash (other than pursuant to Section 10.1 hereof) (a
"Piggyback Registration"), the Company will give written notice to all Holders
of Notes, Warrants, Conversion Stock and Warrant Stock of its intention to
effect such a Piggyback Registration, not later than 20 days prior to the
anticipated filing date. The Company will include in such Piggyback
Registration all Conversion Stock and Warrant Stock with respect to which the
Company has received written request for inclusion therein within 10 days after
the receipt of the Company's notice by the Holders of Notes, Warrants,
Conversion Stock or Warrant Stock. Nothing in this Section 10.3 shall be
deemed to require the Company to proceed with any registration of its
securities after giving the notice herein provided. If a Piggyback
Registration is an underwritten offering, each Holder electing to sell
Conversion Stock or Warrant Stock shall be obligated to sell such Conversion
Stock or Warrant Stock on the same terms and conditions as apply to the
securities being issued and sold by the Company, and the Company shall have no
obligation to register Conversion Stock or Warrant Stock under this Section
10.3 unless the Holder electing to sell Conversion Stock or Warrant Stock
agrees to enter into underwriting agreements in respect of the Conversion Stock
or Warrant Stock being registered which are on the same terms as other
participants in the distribution. If the Holders electing to sell Conversion
Stock or Warrant Stock seek to exercise their piggyback rights in a
Registration Statement relating to an underwritten offering and the managing
underwriter advises the Company in writing that in its opinion the inclusion of
any or the total number of or dollar amount (based on the estimated offering
price) of the Conversion Stock or Warrant Stock for which piggyback rights have
been exercised would result in an offering which exceeds the number or dollar
amount of securities which may be offered and sold on reasonable terms and
price under prevailing conditions, then the number or dollar amount of the
securities covered by the Registration Statement shall consist of all
securities being registered on behalf of the Company and such number or dollar
amount of securities held by other persons with piggyback registration rights
who elected to include such securities in such offering, including the Holders
of the Conversion Stock or Warrant Stock, which the managing underwriter deems
it practicable to offer and sell as described above, shared on a proportionate
basis among such persons based upon the total number or dollar amount of
securities each such person elected to include in such offering.
Notwithstanding the foregoing, this Section 10.3 shall not apply to
the sale by the Company of any of its securities under the Securities Act
pursuant to the terms of warrants, rights or convertible securities which are
being registered in connection with the registration of such warrants, rights
or convertible securities or in connection with dividend reinvestment plans,
stock option plans, employee benefit plans or business acquisitions.
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The Company and, to the extent agreed by the Company, any holders of
the Company's securities of the same class as the Conversion Stock or Warrant
Stock shall be entitled to piggyback registration rights in demand
registrations initiated by the holders of Conversion Stock or Warrant Stock
under Section 10.1; provided, however, that if an underwritten offering of
Conversion Stock or Warrant Stock is being conducted in which the Company or
holders of its securities seek to exercise their piggyback rights and the
managing underwriter advises the Company and the other holders of the Company's
securities in writing that in its opinion the total number or dollar amount
(based on the estimated offering price) of securities requested to be included
in such registration exceeds the number or dollar amount of securities which
can be offered and sold on reasonable terms and price under prevailing market
conditions, the Company will include in such registration, first all of the
securities which the selling Holders of Conversion Stock or Warrant Stock
propose to sell, and then the number or dollar amount of securities the Company
and the other holders of the Company's securities propose to sell, on a basis
determined by the Company, which, in the opinion of the underwriters, may be
sold. The Company shall bear all Registration Expenses in connection with any
registration pursuant to this Section 10.3.
10.4 Registration Procedures. Whenever Holders of Notes, Warrants,
Conversion Stock or Warrant Stock have requested that any Conversion Stock or
Warrant Stock be registered pursuant to this Agreement, the Company will use its
best efforts to effect the registration and the sale of such Conversion Stock or
Warrant Stock in accordance with the intended method of disposition thereof and
pursuant thereto the Company will as expeditiously as possible:
(a) prepare and file with the Commission a Registration Statement
with respect to such Conversion Stock or Warrant Stock and use its best efforts
to cause such Registration Statement to become effective;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
a period of not less than 90 days (or such earlier date on which the
distribution is completed) after the Conversion Stock or Warrant Stock may first
be publicly sold pursuant thereto and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement during such period in accordance with the intended
methods of disposition by such Holders set forth in such Registration Statement;
(c) furnish to each such Holder such number of copies of such
Registration Statement, each amendment and supplement thereto, the prospectus
included in such Registration Statement (including each preliminary prospectus)
and such other documents as such
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Holder may reasonably request in order to facilitate the disposition of the
Conversion Stock or Warrant Stock owned by such Holder;
(d) use its best efforts to register or qualify such Conversion
Stock or Warrant Stock under such other securities or blue sky laws of such
jurisdictions in the United States as any Holder electing to sell Conversion
Stock or Warrant Stock reasonably requests and do any and all other acts and
things which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in such jurisdictions of the Conversion Stock or
Warrant Stock owned by such Holders (provided that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this subparagraph, (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to general
service of process in any such jurisdiction); and
(e) notify each Holder electing to sell Conversion Stock or
Warrant Stock, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a result of
which the prospectus included in such Registration Statement contains an untrue
statement of a material fact or omits to state any fact necessary to make the
statements therein not misleading, and the Company will prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Conversion Stock or Warrant Stock, such prospectus will not contain an
untrue statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading.
10.5 Indemnification by the Company. The Company shall indemnify and
hold harmless each Holder electing to sell Conversion Stock and the underwriter
(as defined in the Securities Act) for any such Holder, if any, and any person
who controls any such Holder or underwriter within the meaning of the Securities
Act against any losses, claims, damages or liabilities (or actions in respect
thereof), to which any such Holder or underwriter or such controlling person may
become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) are caused by any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement under which the Conversion Stock or Warrant Stock was
registered under the Securities Act, any prospectus contained therein, or any
amendment or supplement thereto, or arising out of or based upon the omission or
alleged omission to state therein, on the effective date thereof, a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the Holder of Conversion Stock or
Warrant Stock, agrees that he will furnish the Company in writing such
information as shall be reasonably requested by the Company for use in
connection with the preparation
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<PAGE> 37
of any such Registration Statement, prospectus, amendment or supplement and the
Company will not be liable in any such case to the extent that any such loss,
claim, damage, expense or liability (or actions in respect thereof) arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission so made in conformity with written information furnished by
such Holder or its underwriter in writing specifically for use in the
preparation of such document; and will reimburse each Holder, its underwriter
or such controlling person for any legal or other expenses reasonably incurred
by such Holder, its underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
The foregoing indemnification shall not inure to the benefit of any person (or
to the benefit of any person who controls such person) on account of any
losses, claims, damages, liabilities (or actions or proceedings in respect
thereof) arising from the sale of any Conversion Stock or Warrant Stock by such
person to any purchaser of Conversion Stock or Warrant Stock if such person or
the underwriter failed to send or give a copy of the prospectus required to be
furnished pursuant to the Securities Act to such purchaser with or prior to the
written confirmation of the sale involved.
10.6 Indemnification of the Company. Each Holder electing to sell
Conversion Stock or Warrant Stock shall indemnify and hold harmless the Company,
each of its directors, each of its officers and any underwriter (as defined in
the Securities Act) for the Company, if any, and any person who controls the
Company or underwriter within the meaning of the Securities Act, against any
losses, claims, damages or liabilities (or actions in respect thereof), to which
the Company, or any such director, officer, underwriter or controlling person
may become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) are
caused by (i) any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which the Conversion Stock or
Warrant Stock was registered under the Securities Act, any prospectus contained
therein, or any amendment or supplement thereto, or arising out of or based upon
the omission or alleged omission to state therein, on the effective date
thereof, a material fact required to be stated therein or necessary to make the
statements therein not misleading; in each case to the extent, but only to the
extent, that such untrue statement or omission was so made in reliance upon and
in conformity with written information furnished by such Holder for use in the
preparation thereof or (ii) the fact that a Holder or underwriter sold
Conversion Stock or Warrant Stock (as the case may be) to a Person to whom there
was not sent or given a copy of the prospectus as amended or supplemented to the
date of such sale at or prior to the confirmation of such sale; and will
reimburse any legal or other expenses reasonably incurred by the Company or any
such director, officer, underwriter or controlling person in connection
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<PAGE> 38
with investigating or defending any such loss, claim, damage, liability or
action.
10.7 Procedure for Indemnification Claim. Promptly after receipt by
any indemnified party pursuant hereto of notice of any claim to which indemnity
would apply hereunder or the commencement of any action to which indemnity would
apply hereunder, such indemnified party will, notify the indemnifying party
thereof; but the omission to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party otherwise and
hereunder unless the indemnifying party's rights are actually prejudiced by the
failure to provide such notice. If such an action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party and, after notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof and so long as
the indemnifying party continues to defend the matter, the indemnifying party
shall not be liable under this indemnity for any legal expenses subsequently
incurred by such indemnified party in connection with the defense thereof,
provided however, that the indemnified party shall have the right to employ
separate counsel at its expense in any such action and participate in the
defense thereof. No indemnifying party shall be liable for any settlement
entered into without its consent.
SECTION 11. INTERPRETATION OF THIS AGREEMENT
Terms Defined. As used in this Agreement, the following terms have
the respective meanings set forth below or in the Section indicated:
(a) "Affiliate" shall mean only a trade or business (whether or
not incorporated) which is a member of a group of which the Company or any
Subsidiary is a member or which is under common control within the meaning of
the regulations under Section 414 of the Internal Revenue Code, as amended.
(b) "Administration Expenses" shall mean all costs, fees, charges and
expenses incurred by Purchaser in connection with (i) protecting Purchaser's
Liens in the Collateral and Texas Real Property; (ii) the preparation, execution
and performance of the Purchase Documents (including the reasonable fees and
expenses of counsel to Purchaser); and (iii) any attempt to enforce any rights
of Purchaser to collect any of the Indebtedness of the Company to Purchaser; or
to commence, defend or intervene in any litigation; or to file a petition,
complaint, answer, motion or other pleadings; or take any other action in or
with respect to any suit or proceeding (including any bankruptcy or insolvency
proceeding);
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<PAGE> 39
or to protect, collect, lease, sell, take possession of or liquidate any of the
Collateral, the Texas Real Property or assets of the Company or its
Subsidiaries. Such fees, costs and expenses for which the Company shall be
obligated shall include all expenditures by Purchaser, including payments made
by Purchaser for taxes, insurance, assessments, costs or expenses which the
Company is required to pay under any of the Purchase Documents, but fails to
pay; reasonable inside and outside counsel fees and any reasonable expenses,
costs and charges relating to such expenditures (including, without limitation,
all reasonable fees of legal assistants and other staff employed by such
attorneys); and all other expenses of any kind whatsoever incurred by Purchaser
in connection with administration of the Indebtedness of the Company to
Purchaser.
(c) "Agreement" shall mean this Note and Warrant Purchase Agreement
between the Company and the Purchaser, dated as of May 25, 1995.
(d) "Bettingen Agreement" means that certain Investment Banking and
Sales Agent Agreement dated March 6, 1995, as amended, between Grant Bettingen,
Inc. and the Company.
(e) "Bettingen Warrant" means Grant Bettingen Inc.'s right, pursuant
to the Bettingen Agreement, to purchase shares of Common Stock of the Company.
(f) "Capital Stock" shall mean any and all shares, interests,
participation or other equivalents (however designated) of corporate stock and
any and all forms of partnership interests or other equity interests in a
person.
(g) "Closing" shall mean the closing of the transactions contemplated
by this Agreement, to be held at the offices of Baker & Hostetler, 303 East 17th
Street, Suite 1100, Denver, Colorado 80203.
(h) "Closing Date" shall mean the date which is simultaneous with the
execution and delivery of this Agreement, or such later date as mutually
agreeable to the parties.
(i) "Collateral" shall mean all of the Mortgaging Subsidiary's
interests in plant, machinery and equipment associated with the Texas Real
Property.
(j) "Common Stock" shall mean the common stock, par value $0.001 per
share, of the Company, as it exists on the date of this Agreement or as it may
be constituted from time to time.
(k) "Company" shall mean Uranium Resources, Inc., a Delaware
corporation.
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(l) "Congleton Agreement" means that certain Consulting Agreement
dated March 6, 1995, as amended, between James P. Congleton and the Company.
(m) "Congleton Option" means James P. Congleton's right, pursuant to
the Congleton Agreement, to purchase shares of Common Stock of the Company.
(n) "Conversion Stock" shall mean shares of Common Stock issued or
issuable upon conversion of the Notes; provided that Common Stock ceases to be
Conversion Stock when (i) it has been effectively registered under the
Securities Act and disposed of in accordance with the Registration Statement
covering it, (ii) it is distributed to the public pursuant to Rule 144 (or any
similar provisions then in force) under the Securities Act or (iii) it has
otherwise been transferred and a new certificate or other evidence of ownership
for it not bearing a restrictive legend and not subject to any stop transfer
order has been delivered by or on behalf of the Company and no other similar
restriction on transfer exists.
(o) "Deed of Trust" shall mean the agreement pursuant to which the
Mortgaging Subsidiary has granted a Lien in the Texas Real Property and the
Collateral.
(p) "Event of Default" shall have the meaning provided in Section 8.1.
(q) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
(r) "Exercise Date" shall mean the date of exercise of the Warrant by
the Holder thereof.
(s) "Financial Statements" shall mean the audited financial statements
of the Company and its Subsidiaries contained in the Company's Annual Report on
Form 10-K for the year ended December 31, 1994 and the unaudited consolidated
financial statements of the Company and its Subsidiaries contained in the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.
(t) "Guaranty" shall mean the agreement of even date herewith to
guarantee the Indebtedness of the Company under the Notes by the Mortgaging
Subsidiary, in favor of the Purchaser, in the form of Exhibit 3.
(u) "Holder" shall mean a person, in whose name a Note, Warrant,
Conversion Stock or Warrant Stock is registered or to whom a Note, Warrant,
Conversion Stock or Warrant Stock is transferred; provided that, neither the
Company nor any of its subsidiaries shall be a "Holder" for purposes of this
Agreement.
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<PAGE> 41
(v) "Indebtedness" of any person shall mean any indebtedness for
borrowed money (whether or not the recourse of the lender is to the whole of the
assets of such person or only to a portion thereof), including without
limitation indebtedness evidenced by bonds, notes, debentures or similar
instruments or letters of credit (including any obligation to reimburse drawings
under letters of credit).
(w) "Lien" shall mean, with respect to any property, any mortgage,
lien, pledge, assignment, charge, security interest, title retention agreement,
levy, execution, seizure, attachment, garnishment or other encumbrance of any
kind in respect of such property, whether or not choate, vested or perfected.
(x) "Market Price" per share of Common Stock on any date herein
specified shall mean the closing price per share of the Common Stock on the
trading day prior to the date of a determination as reported on the principal
domestic stock exchange on which Common Stock may then be listed or admitted to
trading, or, if the Common Stock is not then listed or admitted to trading on
any domestic stock exchange, in the Nasdaq Stock Market, or if the Common Stock
is not then quoted in the Nasdaq Stock Market, the average of the reported
closing bid and asked prices on such day in the over-the-counter market, as
furnished by Nasdaq or the National Quotation Bureau, Inc., or if such firm is
not engaged in the business of reporting such prices, as furnished by a similar
firm then engaged in such business and selected by the Company, or if there is
no such firm, as furnished by any member of the National Association of
Securities Dealers, Inc. selected by the Company.
(y) "Material Adverse Effect" shall mean any material and adverse
effect on (1) the condition (financial or otherwise), business, operations,
prospects, results of operations or properties of the Company and the
Subsidiaries, taken as a whole, or (ii) the ability of the Company or the
Mortgaging Subsidiary to perform their obligations under the Purchase Documents.
(z) "Mortgaging Subsidiary" shall mean URI, Inc., a Delaware
corporation.
(aa) "Note" or "Notes" shall mean the 6.5% Secured Convertible Notes
due May 31, 1998, in the original aggregate principal amount of $6,000,000 in
the form set forth in Exhibit 1 hereof, issued pursuant to this Agreement and
any notes delivered in exchange therefor or upon transfer or replacement thereof
pursuant to Section 1.5 of this Agreement.
(bb) "Officers' Certificate" shall mean a certificate signed by two
officers of the Company, one of whom must be the Chairman of the Board, the
President, the Secretary, the Treasurer, the Chief Financial Officer or a
Vice-President.
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(cc) "Permitted Liens" shall mean Liens created pursuant to the
Purchase Documents and the Liens described on Schedule 11, or created in
connection with Indebtedness incurred for working capital purposes provided that
such Lien attaches only to the Company's or a Subsidiary's inventory, accounts
and contract rights.
(dd) "Person" shall mean an individual, partnership, corporation,
business trust, limited liability company, joint stock company, trust,
unincorporated association, joint venture, governmental unit, trustee, receiver,
custodian or similar provision or any other entity.
(ee) "Purchase Documents" shall mean this Agreement, the Warrant, the
Notes, the Guaranty, the Deed of Trust and all other documents executed in
connection with or contemplated by this Agreement.
(ff) "Purchase Price" shall mean the exercise price for the Warrants,
which shall be initially $4.00 per share.
(gg) "Registration Expenses" shall mean all expenses incident to the
Company's performance or compliance with Sections 10.1 and 10.3 of this
Agreement, including all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, printing expenses, messenger and
delivery expenses, fees and disbursements of counsel for the Company and all
independent certified public accountants, and fees for listing the Conversion
Stock or the Warrant Stock on each securities exchange on which similar
securities issued by the Company are then registered, but not including fees,
commissions, discounts or expenses of underwriters or counsel to the Holders
electing to sell Conversion Stock or Warrant Stock.
(hh) "Registration Statement" shall mean a registration statement filed
by the Company under the Securities Act or any of Forms S-1, S-2 or S-3 (or any
successor to such forms).
(ii) "SEC" or "Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.
(jj) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
(kk) "Stock Option Plans" means the Company's employee stock option
plan and director stock option plan as set forth in the Company's Annual Report
on Form 10-K for the year ended December 31, 1994.
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<PAGE> 43
(ll) "Subsidiary" shall mean all operating subsidiaries of the Company
as set forth in the Company's Annual Report on Form 10-K for the year ended
December 31, 1994 or any other entity created whose equity interests are owned
by the Company.
(mm) "Texas Real Property" shall mean all of the Mortgaging
Subsidiary's real property and leasehold interests, in operating mining
properties located in Texas as more particularly described in the Deed of Trust.
(nn) "U.S. Legal Tender" shall mean money of the United States as at
the time of payment is legal tender for the payment of public and private debts.
(oo) "Warrant" means a right to purchase shares of Common Stock of the
Company which expires on May 31, 1998, as evidenced by a Warrant Certificate.
(pp) "Warrant Certificate" shall mean the certificate representing the
Warrant, (in the form of Exhibit 2), which may have such letters, numbers or
other marks of identification or designation and such legends, summaries or
endorsements printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any law or with any rule or regulation made
pursuant thereto.
(qq) "Warrant Expiration Date" shall mean May 31, 1998.
(rr) "Warrant Stock" shall mean shares of Common Stock that may be
purchased upon exercise of a Warrant in whole or in part; provided that Common
Stock ceases to be Warrant Stock when (i) it has been effectively registered
under the Securities Act and disposed of in accordance with the registration
statement covering it, (ii) it is distributed to the public pursuant to Rule 144
(or any similar provisions then in force) under the Securities Act or (iii) it
has otherwise been transferred and a new certificate or other evidence of
ownership for it not bearing a restrictive legend and not subject to any stop
transfer order has been delivered by or on behalf of the Company and no other
similar restriction on transfer exists.
SECTION 12 MISCELLANEOUS.
12.1 Amendment Without Consent of Holders. The Company may amend this
Agreement or the Notes without the consent of Purchaser (a) to cure any
ambiguity, defect or inconsistency; or (b) to make any change that does not
adversely affect the legal rights hereunder of any Holder. After an amendment
under this Section 12.1 becomes effective, the Company shall mail to all Holders
of Notes a notice briefly describing the amendment.
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12.2 Amendment With Consent of Holders. Subject to Section 12.1, the
Company may amend this Agreement or the Notes with the written consent of the
Holders of at least a majority in principal amount of the then outstanding Notes
taken as a whole. Subject to Sections 8.4 and 8.5, the Holders of a majority in
principal amount of the Notes taken as a whole then outstanding may also waive
compliance in a particular instance by the Company with any provision of this
Agreement. However, without the consent of each Holder affected, an amendment or
waiver under this Section may not:
(a) reduce the amount of Notes whose Holders must consent to an
amendment or waiver, or make a change in this Section 12.2;
(b) reduce the rate of or change the time for payment of interest
on any Note;
(c) reduce the principal of or change the fixed maturity of any
Note;
(d) make any change in the percentage of Holders of Notes
required to take action as described in Section 12.2;
(e) make any change that adversely affects the right to convert
any Note;
(f) make any change in Section 3 that adversely affects the
rights of any Holder; or
(g) waive a default in the payment of the principal of, or
interest on, any Note.
After an amendment or waiver under this Section 12.2 becomes
effective, the Company shall mail to Holders a notice briefly describing the
amendment or waiver.
12.3 Notices. All communications provided for hereunder shall be in
writing and delivered or mailed by registered or certified mail, at the address
appearing below, or such other address of which the parties hereto have been
given notice.
If to Company: Uranium Resources, Inc.
12750 Merit Drive, Suite 1020
Dallas, Texas 75251
Attention: President
With a copy to: Baker & Hostetler
303 East 17th Street, Suite 1100
Denver, Colorado 80203
Attention: Alfred C. Chidester
If to Purchaser: c/o Ryback Management Corporation
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<PAGE> 45
7711 Carondelet Avenue, Suite 700
St. Louis, Missouri 63105
Attention: Eric E. Ryback
With a copy to: Dykema Gossett PLLC
400 Renaissance Center
Detroit, Michigan 48243
Attention: Paul R. Rentenbach
12.4 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of, and be enforceable by, the parties hereto and their
respective successors and assigns.
12.5 Severability. Should any part of this Agreement for any reason be
declared invalid, such decision shall not affect the validity of any remaining
portion, which remaining portion shall remain in force and effect as if this
Agreement had been executed with the invalid portion thereof eliminated and it
is hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including therein any
such part, parts, or portion which may, for any reason, be hereafter declared
invalid.
12.6 Captions. The descriptive headings of the various Sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
12.7 Payments Due on Saturdays, Sundays and Holidays. In any case where
the interest payment date on the Notes or the date fixed for any other payment
of any Note or exchange of any Note shall be on a Saturday, Sunday or a legal
holiday or a day on which banking institutions are authorized by law to close in
St. Louis, Missouri, then such payment or exchange need not be made on such date
but may be made on the next succeeding business day not a Saturday, Sunday or a
legal holiday or a day upon which banking institutions are authorized by law to
close in St. Louis, Missouri, with the same force and effect as if made on the
due date.
12.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument. The execution and
delivery of this Agreement shall be deemed effective upon receipt by each party
hereto of a facsimile copy of this Agreement executed by the other party
hereto.
12.9 Governing Law. This Agreement and the Notes shall be construed in
accordance with Missouri law.
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<PAGE> 46
IN WITNESS WHEREOF, the parties have executed this agreement.
URANIUM RESOURCES, INC.
By: /s/ Paul Wilmott
-----------------------------
Its: President
-----------------------------
LINDNER DIVIDEND FUND, INC.
By: /s/ Eric E. Ryback
-----------------------------
Eric E. Ryback, President
LINDNER INVESTMENTS, on behalf
of its LINDNER BULWARK FUND series
By: /s/ Eric E. Ryback
-----------------------------
Eric E. Ryback, President
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EXHIBIT 1
URANIUM RESOURCES, INC.
6.5% SECURED CONVERTIBLE NOTE
$_______________ May 25, 1995
FOR VALUE RECEIVED, the undersigned URANIUM RESOURCES, INC., a Delaware
corporation (the "Obligor" or "Uranium Resources"), hereby promises to pay to
the order of _____ or its registered assigns (the "Purchaser") on May 31, 1998,
the principal sum of $____________ and 00/l00 Dollars and to pay interest on
the unpaid principal balance hereof from the date hereof at a rate of 6.5% per
annum, payable quarterly in arrears. This Note and any interest therein may be
transferred only as provided in the Note and Warrant Purchase Agreement dated as
of May ____, 1995 among Obligor and Purchaser (the "Note and Warrant Purchase
Agreement"). Certain capitalized terms not otherwise defined herein have the
meaning assigned such terms in the Note and Warrant Purchase Agreement.
This Note is issued pursuant to the Note and Warrant Purchase Agreement
and this Note and the holder hereof is entitled, equally and ratably with the
holders of all other Notes outstanding under the Note and Warrant Purchase
Agreement, to all of the benefits provided for thereby, including, but not
limited to the security granted to the Purchaser therein, and the benefits under
the Guaranty executed by the Mortgaging Subsidiary in connection therewith, and
shall be bound by all of the provisions set forth therein, to which Note
Purchase and Warrant Agreement reference is hereby made for a statement thereof.
This Note is supported by the Guaranty of the Mortgaging Subsidiary,
which Guaranty will be secured by a lien and security interest in and upon the
Mortgaging Subsidiary's interest in the Collateral and the Texas Real Property.
Subject to and upon compliance with the provisions of the Note and
Warrant Purchase Agreement, the Holder of this Note is entitled, at its option,
at any time, to convert this Note into fully paid and non-assessable shares of
Common Stock of the Obligor at the initial Conversion Price of $4.00 per share,
subject to such adjustment or adjustments, if any, of such Conversion Price and
the Common Stock issuable upon conversion, as may be required by the Note and
Warrant Purchase Agreement, upon surrender of this Note, duly endorsed or
assigned to the Obligor or in blank, to the Obligor, with the conversion notice
attached hereto, or accompanied by a separate written notice substantially in
the form of such conversion notice, duly executed by the Holder and stating that
the Holder hereof elects to convert this Note, or if less than the
<PAGE> 48
entire principal amount hereof is to be converted, the portion hereof to be
converted, all in accordance with the provisions of the Note and Warrant
Purchase Agreement. Except as otherwise provided in the Note and Warrant
Purchase Agreement, no payment or adjustment is to be made on conversion for
interest accrued hereon or for dividends issued on securities issued on
conversion. No fractional shares will be issued on conversion, but instead of
any fractional interest, the Obligor shall pay a cash adjustment as provided in
the Note and Warrant Purchase Agreement.
In the event any action is taken to collect or enforce the indebtedness
evidenced by this Note (the "Indebtedness") or any part thereof, the Obligor and
each endorser hereof agrees to pay, in addition to the principal and interest
due and payable hereon, all costs of collecting this Note, including reasonable
attorneys' fees and expenses. These costs shall include any expenses incurred by
the Purchaser in any bankruptcy, reorganization, or other insolvency proceeding.
Acceptance by the Purchaser of any payment in an amount less than the
amount then due and owing shall be deemed an acceptance on account only, and the
failure to pay the entire amount then due and owing shall cause the Purchaser
and endorsers to remain in default.
The liability of the Obligor and any endorsers hereof, shall be joint
and several, absolute and unconditional, without regard to the liability of any
other party hereunder or under any other document or instrument executed in
connection with this Note.
No delay or omission of any holder in exercising any right or rights,
shall operate as a waiver of such right or any other rights. Waiver on one
occasion shall not be construed as a bar to or waiver of any right or remedy
on any future occasion.
The liability of the Obligor under this Note (and the liability of
any endorsers and/or Guarantor of this Note) shall not be discharged,
diminished or in any way impaired by: (a) the release, impairment,
discharge, substitution, exchange, modification of or failure to obtain
foreclose or realize on any guaranty or any security granted Purchaser by any
party for the Indebtedness; (b) any waiver by Purchaser or failure to enforce or
exercise rights under any of the terms, covenants or conditions of this Note or
any guaranty; (c) the granting of any renewal, indulgence, extension of time to
Obligor, or any other obligors of the Indebtedness; or (d) the addition or
release of any person or entity primarily or secondarily liable for the
Indebtedness.
In no event shall the interest rate charged or received hereunder at
any time exceed the maximum interest rate permitted under applicable law.
Payments of interest received by Purchaser hereunder which would otherwise cause
the interest rate hereunder to exceed such maximum interest rate shall, to the
extent of such
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<PAGE> 49
excess, be deemed to be (and deemed to have been contracted as being)
prepayments of principal and applied as such.
Under certain circumstances, as specified in the Note and Warrant
Purchase Agreement, the principal of this Note may be declared due and payable
in the manner and with the effect provided in the Note and Warrant Purchase
Agreement.
This Note shall be binding upon the undersigned and its successors and
assigns and shall inure to the benefit of Purchaser, its successors and assigns.
Every person and entity at any time liable for the payment of this Note hereby
waives demand, presentment, protest, notice of protest, notice of nonpayment due
and all other requirements otherwise necessary to hold them immediately liable
for payment hereunder.
This Note and the Note and Warrant Purchase Agreement are governed by
and shall be construed and enforced in accordance with Missouri law.
URANIUM RESOURCES, INC.
By:
---------------------------
Its:
---------------------------
THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER THE
SECURITIES OR BLUE SKY LAWS OF ANY STATE, AND THIS NOTE MAY NOT BE SOLD, PLEDGED
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION;
PROVIDED, HOWEVER, THAT THIS NOTE MAY BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
PURSUANT TO AN EXEMPTION FROM REGISTRATION OR QUALIFICATION. THE TRANSFER OF
THIS NOTE IS SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS SET FORTH IN THAT
CERTAIN NOTE AND WARRANT PURCHASE AGREEMENT DATED MAY , 1995 AMONG URANIUM
RESOURCES, INC., LINDNER DIVIDEND FUND, INC. AND LINDNER INVESTMENTS (ON BEHALF
OF ITS LINDNER BULWARK FUND SERIES), AND THIS NOTE MAY BE TRANSFERRED ONLY IN
COMPLIANCE WITH THE TERMS AND CONDITIONS OF SUCH NOTE AND WARRANT PURCHASE
AGREEMENT, A COPY OF WHICH WILL BE MADE AVAILABLE BY URANIUM RESOURCES, INC.
UPON WRITTEN REQUEST.
3
<PAGE> 50
NOTICE OF CONVERSION
To Uranium Resources, Inc.:
The undersigned owner of this Secured Convertible Note hereby
irrevocably exercises the option to convert $________ principal amount of
this Secured Convertible Note, into shares of Common Stock of Uranium
Resources, Inc., in accordance with the terms and conditions of the Note and
Warrant Purchase Agreement, and directs that the shares of Common Stock
issuable and deliverable upon conversion be issued and delivered to the
undersigned unless a different name has been indicated below. If shares of
Common Stock are to be registered in the name of a person other than the
undersigned, the undersigned will pay any transfer taxes payable with
respect thereto.
Dated: __________________________
ATTEST: _________________________________
Signed:__________________________ Signed:__________________________
By: By:
Its: Its:
Fill in for registration of shares of Common Stock only if otherwise than in
name and address of _________________.
_________________________________ ___________________________________
(Name) (Address)
_________________________________ ___________________________________
(City and State) (Tax Identification Number)
(Please print name and address including zip code number)
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EXHIBIT 2
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE AND MAY NOT
BE TRANSFERRED IN VIOLATION OF SUCH ACT AND LAWS OR THE
RULES AND REGULATIONS THEREUNDER
VOID AFTER 5:00 P.M., DALLAS, TEXAS TIME,
ON MAY 31, 1998
URANIUM RESOURCES, INC.
URIW-001
WARRANT TO PURCHASE COMMON STOCK
This certifies that, FOR VALUE RECEIVED, LINDNER DIVIDEND FUND, INC. or
its registered assigns ("Holder"), is entitled, subject to the terms of this
Warrant, to purchase from URANIUM RESOURCES, INC., a Delaware corporation (the
"Company"), at any time after the date of issuance hereof and prior to 5:00
p.m., Dallas, Texas time, on May 31, l998 (the "Warrant Expiration Date"), up to
1,125,000 fully paid and nonassessable shares of the Common Stock, $0.001 par
value, of the Company (the "Common Stock"), at an initial purchase price of
$4.00 per share, payable in lawful money of the United States.
This Warrant may be exercised in whole or in part by presentation
hereof with the Notice of Exercise contained herein duly executed and with
simultaneous payment of the applicable aggregate Purchase Price (subject to
adjustment) at the office of the Company in Dallas, Texas. Payment of such
Purchase Price shall be made, at the option of the Holder hereof, by certified
check or bank draft payable in United States currency.
This Warrant is one of a duly authorized issue of common stock purchase
warrants issued under and in accordance with that certain Note and Warrant
Purchase Agreement (the "Purchase Agreement"), dated as of May ___, 1995, by and
among Uranium Resources, Inc., Lindner Investments (on behalf of its Lindner
Bulwark Fund series), and Lindner Dividend Fund, Inc., and is subject to the
terms and provisions contained in the Purchase Agreement, to all of which the
Holder hereof, by acceptance hereof, hereby consents. A copy of the Purchase
Agreement may be obtained for inspection upon written request to the Company by
a Holder of this Warrant.
This Warrant does not entitle any Holder to any rights of a shareholder
of the Company. The number of shares of Common Stock to be received upon the
exercise of this Warrant
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and the price to be paid for a share of Common Stock may be adjusted from time
to time as set forth in the Purchase Agreement. The shares of Common Stock
deliverable upon such exercise, as adjusted from time to time, are hereinafter
sometimes referred to as "Warrant Stock" and the exercise price of a share of
Common Stock in effect at any time and as adjusted from time to time is
hereinafter sometimes referred to as the "Purchase Price".
As soon as practicable after any exercise of this Warrant and payment
of the sum payable upon such exercise, and in any event within l0 days
thereafter, the Company, at its expense (including the payment by it of any
applicable taxes), will cause to be issued in the name of and delivered to the
holder hereof, or in the name of such other person as such holder may direct, a
certificate or certificates for the number of fully paid and nonassessable
shares of Warrant Stock, or other securities or property to which such holder
shall be entitled upon such exercise, plus, in lieu of any fractional share of
Warrant Stock to which such holder would otherwise be entitled, cash equal to
such fraction multiplied by the Market Price (as defined in the Purchase
Agreement). Issuance and delivery of Warrant Stock deliverable on the due
exercise of this Warrant may be postponed by the Company and its transfer agent
during any period, not exceeding thirty (30) days, for which the transfer books
of the Company for the Common Stock are closed between (1) the record date set
by the Board of Directors for the determination of shareholders entitled to vote
at or to receive notice of any shareholders meeting, or entitled to receive
payment of any dividends or to any allotment of rights or to exercise rights in
respect of any change, conversion or exchange of capital stock, and (2) the date
of such meeting of shareholders, the date for the payment of such dividends, the
date for such allotment of rights, or the date when any such change or
conversion or exchange of capital stock shall go into effect, as the case may
be.
Upon surrender for exchange of this Warrant (in negotiable form, if not
surrendered by the holder named on the face hereof) to the Company, the Company,
at its expense, will issue and deliver new Warrants of like tenor, calling in
the aggregate for the same amount of Warrant Stock, in the denomination or
denominations requested, to or on the order of such holder and in the name of
such holder as such holder may direct. Until this Warrant is transferred on the
books of the Company, the Company may treat the registered holder of this
Warrant as absolute owner for all purposes without being affected by any notice
to the contrary. Transfer of this Warrant is restricted as provided in the
Purchase Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name by the manual signatures of
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its Chairman or President or one of its Vice Presidents, thereunto duly
authorized, and its corporate seal to be impressed or imprinted hereon, attested
by the manual signature of its Secretary or an Assistant Secretary.
Dated: ______________________, l995 URANIUM RESOURCES, INC.
Attest: By: ______________
____________ Its: ______________
____________
By:_________________________
Secretary
[SEAL]
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NOTICE OF EXERCISE
The undersigned hereby exercises the right to purchase _____ shares of
Common Stock covered by this Warrant according to the conditions thereof and
herewith makes payment of the Purchase Price of such shares in full.
______________________________
________________________ Signature of
Warrantholder
Title:________________________
________________________
Dated: _______________, l99__
The Company is requested to issue certificates for the Warrant Stock acquired
upon exercise of this Warrant as follows:
__________________________________
Name
__________________________________
Address
__________________________________
SSN or EIN
ASSIGNMENT OF WARRANT
FOR VALUE RECEIVED, the undersigned hereby sell, assigns and
transfers the within Warrant, and irrevocably appoints ________________________
as attorney-in-fact to transfer such Warrant on the books of the Company,
with full power of substitution in the premises, to the following assignee(s):
___________________________________
Name
___________________________________
Address
___________________________________
SSN or EIN
_______________________________
Signature of Warrantholder
Title: ________________________
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EXHIBIT 3
GUARANTY
Guaranty dated May ___, 1995 by URI, Inc. a corporation organized and
existing under the laws of Delaware (the "Guarantor") and an operating
subsidiary of Uranium Resources, Inc., in favor of Lindner Investments, (on
behalf of its Lindner Bulwark Fund series) and Lindner Dividend Fund, Inc.
(collectively the "Purchaser").
RECITALS
A. The Purchaser has entered into a Note and Warrant Purchase Agreement
dated as of May ___, 1995 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Note and
Warrant Purchase Agreement", the terms defined therein and not herein
defined being used herein with the same meaning as used in the Note
and Warrant Purchase Agreement) with Uranium Resources, Inc., a
corporation organized and existing under the laws of Delaware (the
"Borrower").
B. The Borrower is the parent of the Guarantor. The Guarantor will receive
a portion of proceeds from the Notes sold to Purchaser under the Note
and Warrant Purchase Agreement, and as such, will directly benefit from
the transaction contemplated by the Note and Warrant Purchase
Agreement.
C. To induce Purchaser's purchase of the Notes under the Note and Warrant
Purchase Agreement, the Guarantor has agreed to execute and deliver
this Guaranty.
D. Certain capitalized terms have the meanings set forth in the Note and
Warrant Purchase Agreement unless otherwise defined herein.
NOW, THEREFORE, in consideration of the premises, the Guarantor hereby
agrees as follows:
Section 1. Guaranty. The Guarantor hereby unconditionally guarantees
the punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of all obligations under the Notes now or hereafter existing, whether
for principal, interest, fees, expenses or otherwise and agrees to pay any and
all reasonable expenses (including reasonable counsel fees and expenses)
incurred by the Purchaser in enforcing any rights under this Guaranty. Without
limiting the generality of the foregoing, the Guarantor's liability shall extend
to all amounts which constitute part of the obligations under the Notes and
would be owed under the Notes but for the fact that they are unenforceable
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or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Borrower.
Section 2. Collateral Securing Guaranty. This Guaranty is secured by a
first mortgage lien on, and an assignment of a security interest in certain of
the Guarantor's interest in the Collateral and Texas Real Property pursuant to
the Deed of Trust executed by Guarantor. Guarantor expressly agrees that
Purchaser's failure to take any steps to enforce, accept, or perfect the
Purchaser's interest in, foreclose upon, or realize on any of the Collateral and
the Texas Real Property is not a defense to Purchaser's enforcement of this
Guaranty.
Section 3. Guaranty Absolute. The Guarantor guarantees that the Notes
will be paid strictly in accordance with the terms of the Note and Warrant
Purchase Agreement and the Notes, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Purchaser with respect thereto. The obligations of the Guarantor
under this Guaranty are independent of the Borrower's obligations under the
Notes, and a separate action or actions may be brought and prosecuted against
the Guarantor to enforce this Guaranty, irrespective of whether any action is
brought against the Borrower or whether the Borrower is joined in any such
action or actions. The liability of the Guarantor under this Guaranty shall be
absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Note and Warrant
Purchase Agreement or any agreement or instrument relating
thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations under the
Notes, or any other amendment or waiver of or any consent to
departure from the Note and Warrant Purchase Agreement;
(iii) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver
of, or consent to departure from any other guaranty, for all
or any of the obligations under the Notes;
(iv) any manner of application of collateral, or proceeds
thereof, to all or any of the obligations under the Notes
and the Note and Warrant Purchase Agreement, or any manner
of sale or other disposition of any collateral for all or
any of the obligations under the Notes and the Note and
Warrant Purchase Agreement or any other assets of the
Borrower;
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(v) any change, restructuring or termination of the corporate
structure or existence of the Borrower; or
(vi) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower or a
guarantor.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Notes is rescinded or must
otherwise be returned by the Purchaser upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, all as though such payment had not
been made.
Section 4. Waiver. The Guarantor hereby waives promptness, diligence,
notice of acceptance and other notice with respect to the obligations under the
Notes and this Guaranty and any requirement that the Purchaser protect, secure,
perfect, realize upon or insure any security interest or Lien or any property
subject thereto or exhaust any right or take any action against the Borrower or
any other person or entity or any collateral. The Guarantor waives any defense
based upon any of the above as well as marshalling or the manner of disposition
of any property securing the indebtedness under the Notes.
Section 5. Consent to Jurisdiction; Waiver of Immunities. (a) The
Guarantor hereby irrevocably submits to the jurisdiction of any Missouri or
Federal court sitting in St. Louis, Missouri and any appellate court from any
such court in any action or proceeding arising out of or relating to this
Guaranty, and the Guarantor hereby irrevocably agrees that all claims in respect
of such action or proceeding may be heard and determined in such Missouri State
court or in such Federal court. The Guarantor hereby irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of such action or proceeding. The Guarantor hereby agrees that
service of copies of the summons and complaint and any other process which may
be served in any such action or proceeding may be made by mailing or delivering
a copy of such process to the Guarantor at its address specified in Section 8.
The Guarantor agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Section shall
affect the right of the Purchaser to serve legal process in any other manner
permitted by law or affect the right of the Purchaser to bring any action or
proceeding against the Guarantor or its property in the courts of any other
jurisdictions. To the extent that the Guarantor has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself
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or its property, the Guarantor hereby irrevocably waives such immunity in
respect of its obligations under this Guaranty.
Section 6. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
(a) The Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and
has all requisite corporate power and authority to own its
properties and to conduct its business. The Guarantor is duly
qualified to do business as a foreign corporation and in good
standing under the laws of the State of Texas and all other
jurisdictions in which the failure to be so qualified could
reasonably be expected to have a Material Adverse Effect on the
business operations of the Guarantor.
(b) The execution, delivery and performance by the Guarantor of this
Guaranty are within the Guarantor's corporate powers, have been
duly authorized by all necessary corporate action, do not
contravene (i) the Guarantor's charter or by-laws or (ii) any
applicable law or any contractual restriction binding on or
affecting the Guarantor, and do not result in or require the
creation of any Lien upon or with respect to any of its
properties, other than the Permitted Liens.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the
Guarantor of this Guaranty.
(d) This Guaranty has been duly executed and delivered by the
Guarantor and constitutes the legal, valid and binding obligation
of the Guarantor enforceable against the Guarantor in accordance
with the respective terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency or other similar laws of
general application relating to the enforcement of creditors'
rights generally, and (ii) principles governing the availability
of equitable remedies.
(e) The Guarantor has, independently and without reliance upon the
Purchaser and based on documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Guaranty.
(f) All balance sheets, profit and loss statements, and other
information furnished to the Purchaser are accurate and fairly
reflect the financial condition of the Guarantor, including
contingent liabilities of every type, which
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financial condition has not changed materially and adversely since
those dates.
Section 7. Amendments, Etc. No amendment or waiver of any provision
of this Guaranty, and no consent to any departure by the Guarantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Purchaser, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
Section 8. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied, telegraphed,
telexed, cabled or delivered, if to the Guarantor, at its address at 12750 Merit
Drive, Suite 1020, LB12, Dallas, Texas 75251, Attention: President, and if to
the Purchaser, at its address specified in the Note and Warranty Purchase
Agreement; or, as to either party, at such other address as shall be designated
by such party in a written notice to the other party. All such notices and other
communications shall, when mailed, telecopied, telegraphed, telexed or cabled,
be effective when deposited in the mails, telecopied, delivered to the telegraph
company, confirmed by telex answerback or delivered to the cable company,
respectively.
Section 9. No Waiver; Remedies. No failure on the part of the
Purchaser to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. Each right and each remedy provided herein, in the Note and
Warrant Purchase Agreement or in any other document or instrument or by law or
otherwise are cumulative of and in addition to each other right and each other
remedy provided herein, in the Note and Warrant Purchase Agreement in any other
document or instrument or by law or otherwise.
Section 10. Continuing Guaranty; Assignments under Note and Warrant
Purchase Agreement. This Guaranty is a continuing guaranty and shall (i) remain
in full force and effect until the payment in full of the Notes and all other
amounts payable under this Guaranty and (ii) be binding upon the Guarantor, its
successors and assigns, and (iii) inure to the benefit of, and be enforceable
by, the Purchaser and its successors, transferees and assigns, and all Holders.
Without limiting the generality of the foregoing clause (iii), the Purchaser may
assign or otherwise transfer all or any portion of its rights and obligations
under the Note and Warrant Purchase Agreement to any other person or entity,
including, without limitation all Holders, pursuant to the Note and Warrant
Purchase Agreement, and such other person or entity shall thereupon become
vested with all benefits in respect thereof granted to the Purchaser herein or
otherwise. In connection therewith, Guarantor
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shall take such actions as requested by Purchaser or any Holder to transfer or
convey to any of their transferees and assigns, the rights of Purchaser granted
herein or to provide that such Holder also obtains, together with the Purchaser,
all of the rights granted herein to Purchaser.
Section 11. Liability of Co-Guarantor. Guarantor's liability under this
Guaranty shall not be discharged, diminished or in any way impaired by the
addition or release of any person or entity primarily or secondarily liable for
the obligations owing under the Notes.
Section 12. Governing Law. This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of Missouri and applicable
laws of the United States of America.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
URI, INC.
By: _______________________________
Name: _______________________________
Title:_______________________________
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EXHIBIT 4
AMENDMENT NO. 1 TO CONSULTING AGREEMENT
THIS AMENDMENT NO. 1 TO CONSULTING AGREEMENT is made and entered into
this ______ day of May, 1995 (this "Amendment No. 1"), by and between Uranium
Resources, Inc., a Delaware corporation whose address is 12750 Merit Drive,
Suite 1020, Dallas, Texas 75251 (the "Corporation"), and James P. Congleton,
whose address is 25472 Coral Wood, Lake Forest, California 92630 (the
"Consultant").
RECITALS:
A. The parties have entered into that certain Consulting Agreement,
dated March 6, 1995 (the "Consulting Agreement"), by and between the Corporation
and Consultant.
B. Pursuant to Section 8 of the Consulting Agreement, the parties
have agreed to amend the Consulting Agreement as provided herein.
NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions contained herein and the sum of $10.00, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
1. The Consulting Agreement is hereby amended as follows:
1.1 Section 3(a) of the Consulting Agreement is hereby deleted in
its entirety and replaced with the following new Section 3(a):
(a) Consultant shall be paid the sum of $30,000 by the
Corporation. Payment shall be made promptly after the closing of the
transactions contemplated by that certain Note and Warrant Purchase
Agreement, dated of even date herewith, among the Corporation and
Lindner Investments, a Massachusetts business trust (on behalf of its
Lindner Bulwark Fund Series) and Lindner Dividend Fund, Inc., a
Missouri corporation.
1.2 Section 3(c) of the Consulting Agreement is hereby deleted in
its entirety and replaced with the following new Section 3(c):
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(c) Consultant shall be granted an option to purchase
50,000 shares of the Corporation's Common Stock at a price of $4.00 per
share pursuant to the terms set forth in that certain Stock Option
Agreement, dated March 6, 1995, by and between the Corporation and
Consultant, as amended by Amendment No. 1 to Stock Option Agreement of
even date herewith by and between the Corporation and Consultant.
2. Except as amended hereby, the Consulting Agreement shall not be
amended, changed, or modified by this Amendment No. 1 and shall remain in full
force and effect.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 1 to be duly executed and delivered as of the date first above
written.
URANIUM RESOURCES, INC.
By:____________________
__________________________
Paul K. Willmott
President
"CONSULTANT"
__________________________ _______________________
James P. Congleton
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AMENDMENT NO. 1 TO STOCK OPTION AGREEMENT
THIS AMENDMENT NO. 1 TO STOCK OPTION AGREEMENT is made and entered into
this _____ day of May, 1995 (this "Amendment No. 1 to Stock Option Agreement"),
between Uranium Resources, Inc., a Delaware corporation (the "Company"), and
James P. Congleton, an individual (the "Optionee").
RECITALS:
A. The parties hereto entered into that certain Stock Option
Agreement, dated March 6, 1995 (the "Stock Option Agreement"), between the
Company and the Optionee.
B. The Company and the Optionee have agreed to amend the Stock Option
Agreement and the options granted pursuant thereto as provided herein.
NOW, THEREFORE, in consideration of the sum of $10.00, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
1. The Stock Option Agreement and the options granted pursuant
thereto are hereby amended as follows:
1.1 Section 1 of the Stock Option Agreement is hereby deleted in
its entirety and replaced with the following Section 1:
1. Grant of Option. Company hereby grants to Optionee an
irrevocable option to purchase up to 50,000 shares of the Common Stock
of the Company (the "Shares") at a price of $4.00 per share. This
option shall expire on March 6, 2000.
2. Except as amended hereby, the Stock Option Agreement and the
options granted pursuant thereto, shall not be amended, changed, or modified by
this Amendment No. 1 to Stock Option Agreement and shall remain in full force
and effect.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 1 to Stock Option Agreement to be duly executed and delivered as
of the date first above written.
URANIUM RESOURCES, INC.
By:____________________
Paul K. Willmott
President
"OPTIONEE"
_______________________
James P. Congleton
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EXHIBIT 5
AMENDMENT NO. 1
TO
INVESTMENT BANKING AND SELLING AGENT AGREEMENT
THIS AMENDMENT NO. 1 TO INVESTMENT BANKING AND SELLING AGENT AGREEMENT
is made and entered into this ______ day of May, 1995 (the "Amendment No. 1"),
by and between Uranium Resources, Inc., a Delaware corporation (the
"Corporation") and Grant Bettingen, Inc., a California corporation ("GBI").
RECITALS:
A. The parties have entered into that certain Investment Banking and
Selling Agent Agreement, dated March 6, 1995 (the "Investment Banking and
Selling Agent Agreement"), by and between the Corporation and GBI.
B. Pursuant to Section 15 of the Investment Banking and Selling Agent
Agreement, the parties have agreed to amend the Investment Banking and Selling
Agent Agreement as provided herein.
NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions contained herein and the sum of $10.00, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
1. The Investment Banking and Selling Agent Agreement is hereby
amended as follows:
1.1 Section 4 of the Investment Banking and Selling Agent
Agreement is hereby deleted in its entirety and replaced with the following new
Section 4:
4. Compensation. Upon consummation of the closing (the
"Closing") of the transactions contemplated by that certain Note and
Warrant Purchase Agreement, dated of even date herewith, by and among
the Corporation, Lindner Investments, a Massachusetts business trust
(on behalf of its Lindner Bulwark Fund Series) and Lindner Dividend
Fund, Inc., a Missouri corporation, the Corporation will pay to GBI the
sum of $120,000 in cash. In addition, upon consummation of the
Closing, the Corporation will cause to be issued to GBI, or its
designees, 35,000 shares of Common Stock of the Corporation held in
treasury (the "Treasury Stock") and a warrant (the "Warrant") to
purchase 100,000 shares of
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Common Stock of the Corporation (the "Warrant Stock") at an exercise
price of $4.00 per share. Such Warrant shall expire three years after
the date of the Closing of the Offering. Upon consummation of the
Closing, the Corporation shall issue to GBI, or its designees, a
Warrant certificate substantially in the form attached hereto as
Exhibit A.
1.2 Section 5 is hereby amended by deleting the word "Option"
each place it appears in Section 5 and replacing it with the word "Warrant" and
by deleting the word "Optionee" in the first sentence of the second paragraph of
Section 5 and replacing it with the words "holder of the Warrant."
1.3 The clause "(including the value of shares of common stock in
excess of the option payment on the date of exercise of the option)" in Section
7(d) is hereby deleted in its entirety and replaced with the following clause:
"(including the value of shares of Common Stock in excess of the exercise price
of the Warrant on the date of exercise of the Warrant)."
1.4 Section 9 is hereby deleted in its entirety and
replaced with the following new Section 9:
9. Registration Rights.
(a) Demand Rights. Subject to the provisions set forth
below, at any time after the date hereof, but prior to the third
anniversary date hereof, the Corporation shall, upon the written demand of
the holder of the Treasury Stock or the holder of the Warrant or Warrant
Stock issuable upon exercise of the Warrant on no more than two (2)
occasions, prepare, file with the Securities and Exchange Commission (the
"Commission"), and use its best efforts to have declared effective a
registration statement with respect to the distribution of all of the
shares of Warrant Stock and all of the shares of Common Stock issuable
upon exercise of the Warrant, but not less than fifty percent (50%) of the
aggregate number of shares of Treasury Stock and Warrant Stock. Such
demand shall be made by written notice to the Corporation by the holder of
the Treasury Stock or the holder of the Warrant or Warrant Stock (as the
case may be), which notice shall request the preparation of a registration
statement pursuant to the terms of this Section 9(a) and include the
number of shares of Treasury Stock or Warrant Stock to be offered pursuant
to such registration statement and be sent to all other holders of the
Treasury Stock or the Warrant or Warrant Stock (as the case may be). The
Corporation may include in such registration any securities of the
Corporation for sale by the Corporation or persons other than the
Corporation,
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but the holder of the Treasury Stock or the Warrant or Warrant Stock shall
have priority with respect to inclusion in the registration statement of
the shares of Treasury Stock or Warrant Stock specified in the demand for
registration made pursuant to the provisions of this Section 9(a). All
expenses incident to the Corporation's performance of or compliance with
this Section 9(a), including, without limitation, all registration and
filing fees, fees and expenses of compliance with the securities or blue
sky laws, and reasonable printing expenses, messenger, delivery, and
mailing expenses, and fees and disbursements of counsel for the
Corporation and all independent and certified public accountants,
underwriters (excluding discounts and commissions) and other persons
retained by the Corporation shall be borne and paid by the person
requesting registration pursuant to this Section 9(a). The Corporation
shall not be obligated to effect any demand registration pursuant to this
Section 9(a): (a) more than two (2) times; (b) if the amount of shares as
to which registration has been requested may be sold at that time without
registration under the Securities Act of 1933, as amended, pursuant to
Rule 144 thereunder (or any successor rule thereto); (c) unless the
registration can be made on a Form S-3 (or any successor Form thereto);
(d) if in the good faith judgment of the Board of Directors of the
Corporation, such registration would be materially detrimental to the
Corporation and the Board Directors of the Corporation concludes, as a
result that it is in the best interests of the Corporation to defer the
filing of a registration statement in connection with such demand,
provided that the Corporation may not defer the filing for a period of
more than ninety (90) days after receipt of the initial request; (e) on a
date which, under the General Rules and Regulations of the Commission,
would require the inclusion in the registration statement covering such
demand of historical financial statements of the Corporation other than
those contained in the most recently required report of the Corporation on
Forms 10-K and 10-Q, or financial statements of an acquired business or
businesses at a time prior to the time such financial statements would be
required to be filed by the Corporation pursuant to Form 8-K; or (f) if
the demand relates to the shares of Warrant Stock issuable upon exercise
of the Warrants, unless the Warrant is duly exercised and the shares of
Warrant Stock have been issued prior to receipt by the Corporation of the
written demand for registration.
(b) Piggyback Registration. If the Corporation, at any
time commencing on the date of this Agreement and expiring on the third
anniversary date
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hereof, determines to register shares of its Common Stock under the Act,
the Corporation shall (to the extent permitted by law) include the
Treasury Stock and the Warrant Stock, at its own expenses, and shall use
its best efforts to effect such registration (including, without
limitation, filing post-effective amendments, appropriate qualifications
under applicable blue sky laws, and appropriate compliance with the Act)
as would permit or facilitate the sale or distribution of the Treasury
Stock and Warrant Stock.
1.5 The address for notice to the Corporation in Section 16 shall
be deleted in its entirety and replaced with the following:
Paul K. Willmott, President
Uranium Resources, Inc.
303 East 17th Avenue, Suite 700
Denver, Colorado 80203
2. Except as amended hereby, the Investment Banking and Selling Agent
Agreement shall not be amended, changed, or modified by this Amendment No. 1 and
shall remain in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
No. 1 to be duly executed and delivered as of the date first above written.
URANIUM RESOURCES, INC.
By:____________________
Paul K. Willmott
President
GRANT BETTINGEN, INC.
By:____________________
Grant Bettingen
President
4
<PAGE> 69
EXHIBIT A
FORM OF WARRANT
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE
AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT AND
LAWS OR THE RULES AND REGULATIONS THEREUNDER
VOID AFTER 5:00 P.M., DALLAS, TEXAS TIME,
ON MAY ____, 1998
URANIUM RESOURCES, INC.
WARRANT TO PURCHASE COMMON STOCK
This certifies that, FOR VALUE RECEIVED, Grant Bettingen, Inc., a
California corporation, or its registered assigns ("Holder"), is entitled,
subject to the terms of this Warrant, to purchase from URANIUM RESOURCES, INC.,
a Delaware corporation (the "Company"), at any time after the date of issuance
hereof and prior to 5:00 p.m., Dallas, Texas time, on May _____, 1998 (the
"Warrant Expiration Date"), up to 100,000 fully paid and nonassessable shares of
the Common Stock, $0.001 par value, of the Company (the "Common Stock"), at an
initial purchase price of $4.00 per share, payable in lawful money of the United
States.
This Warrant may be exercised in whole or in part by presentation
hereof with the Notice of Exercise contained herein duly executed and with
simultaneous payment of the applicable aggregate Purchase Price (subject to
adjustment) at the office of the Company in Dallas, Texas. Payment of such
Purchase Price shall be made, at the option of the Holder hereof, by certified
check or bank draft payable in United States currency.
This Warrant is one of a duly authorized issue of common stock
purchase warrants issued under and in accordance with that certain Investment
Banking and Selling Agent Agreement, dated March 6, 1995, by and between the
Company and Grant Bettingen, Inc., as amended by Amendment No. 1 thereto by and
between the Company and Grant Bettingen, Inc. (the "Amended Investment Banking
and Selling Agent Agreement"), and is subject to the terms and provisions
contained in the Amended Investment Banking and Selling Agent Agreement, to all
of which the Holder hereof, by acceptance hereof, hereby consents. A copy of
the Amended Investment Banking and Selling Agent Agreement may be obtained for
inspection upon written request to the Company by a Holder of this Warrant.
This Warrant does not entitle any Holder to any rights of a stockholder
of the Company. The number of shares of Common Stock to be received upon the
exercise of this Warrant and the price to
<PAGE> 70
be paid for a share of Common Stock may be adjusted from time to time as set
forth in the Amended Investment Banking and Selling Agent Agreement. The shares
of Common Stock deliverable upon such exercise, as adjusted from time to time,
are hereinafter sometimes referred to as "Warrant Stock" and the exercise price
of a share of Common Stock in effect at any time and as adjusted from time to
time is sometimes referred to herein as the "Purchase Price."
As soon as practicable after any exercise of this Warrant and payment
of the sum payable upon such exercise, and in any event within 10 days
thereafter, the Company, at its expense (including the payment by it of any
applicable taxes), will cause to be issued in the name of and delivered to the
holder hereof, or in the name of such other person as such holder may direct, a
certificate or certificates for the number of fully paid and nonassessable
shares of Warrant Stock, or other securities or property to which such holder
shall be entitled upon such exercise, plus, in lieu of any fractional share of
Warrant Stock to which such holder would otherwise be entitled, cash equal to
such fraction multiplied by the then current fair market value ("Market Value")
of one full share of Warrant Stock. The Market Value shall be the Closing Price
(as hereinafter defined) for one full share of Common Stock on the business day
next preceding the day of exercise. As used herein, the term "Closing Price"
shall mean the last sale price regular way or, in case no sale takes place on
such day, the average of the closing bid and asked prices regular way, in either
case on the principal national securities exchange on which the Common Stock of
the Company is listed or admitted to trading, or if not listed or admitted to
trading on any national securities exchange, the average of the closing bid and
asked prices on such day as reported on the NASDAQ Stock Market, or, if not
reported on such market, the average of the closing bid and asked prices as
furnished by National Quotation Bureau, Inc., or a similar reporting
organization. All calculations with respect to the Closing Price shall be made
to the nearest cent ($0.01). Issuance and delivery of Warrant Stock deliverable
on the due exercise of this Warrant may be postponed by the Company and its
transfer agent during any period, not exceeding thirty (30) days, for which the
transfer books of the Company for the Common Stock are closed between (1) the
record date set by the Board of Directors for the determination of stockholders
entitled to vote at or to receive notice of any stockholders meeting, or
entitled to receive payment of any dividends or to any allotment of rights or to
exercise rights in respect of any change, conversion or exchange of capital
stock, and (2) the date of such meeting of stockholders, the date for the
payment of such dividends, the date for such allotment of rights, or the date
when any such change or conversion or exchange of capital stock shall go into
effect, as the case may be.
Upon surrender for exchange of this Warrant (in negotiable form, if not
surrendered by the holder named on the face hereof) to the Company, the Company,
at its expense, will issue and deliver
2
<PAGE> 71
new Warrants of like tenor, calling in the aggregate for the same amount of
Warrant Stock, in the denomination or denominations requested, to or on the
order of such holder and in the name of such holder as such holder may direct.
Until this Warrant is transferred on the books of the Company, the Company may
treat the registered holder of this Warrant as absolute owner for all purposes
without being affected by any notice to the contrary. Transfer of this Warrant
is restricted as provided in the Amended Investment Banking and Selling Agent
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name by the manual signatures of its Chairman or President or one of its
Vice Presidents, thereunto duly authorized, and its corporate seal to be
impressed or imprinted hereon, attested by the manual signature of its Secretary
or an Assistant Secretary.
Dated: _______________, 1995 URANIUM RESOURCES, INC.
Attest: By: _______________________
Its: _______________________
By:_________________________
Secretary
[SEAL]
3
<PAGE> 72
NOTICE OF EXERCISE
The undersigned hereby exercises the right to purchase _______ shares
of Common Stock covered by this Warrant according to the conditions thereof and
herewith makes payment of the Purchase Price of such shares in full.
_____________________________________
Signature of Warrantholder
Title:_______________________________
Dated: _______________, 199__
The Company is requested to issue certificates for the Warrant Stock acquired
upon exercise of this Warrant as follows:
_________________________________________
Name
_________________________________________
Address
_________________________________________
SSN or EIN
ASSIGNMENT OF WARRANT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
the within Warrant, and irrevocably appoints __________________________ as
attorney-in-fact to transfer such Warrant on the books of the Company, with full
power of substitution in the premises, to the following assignee(s):
_________________________________________
Name
_________________________________________
Address
_________________________________________
SSN or EIN
______________________________
Signature of Warrantholder
Title:________________________
4
<PAGE> 73
SCHEDULE 5.3
Secretary of State
State of Texas
P.O. Box 12698
Austin, Texas 78711
Sam D. Deanda
Kleberg County Clerk
Kleberg County Courthouse
700 E. Kleberg Street
Kingsville, Texas 78363
Oscar Garcia, Jr.
Duval County Clerk
Duval County Courthouse
400 E. Gravis Street
San Diego, Texas 78384
5
<PAGE> 74
SCHEDULE 5.6
Page 1 of 2
KINGSVILLE
<TABLE>
<S> <C> <C>
Lease # Lessor
1. KD2A, B, C B. B. Braly, et al
2. KD6A, B J. Eugene Wukasch
3. KD9A, B, C Kenneth Huff, et al
4. KD10A, B Mary Miles Bosquet, et al
5. KD12A, B, C, C1 R. K. Cumberland, et al
6. KD13A, B Fred Radford
7. KD14A, B Fred Radford
8. KD15A, B Catherine Veselik, et al
1. KD01A, B, C Clyde M. Allen, et al
2. KD16A, B Charles W. Muil, Jr., et al
3. KD18A-AK Barbara J. Keltner, et al
4. KD19 Robert S. Sexauer Trust
5. KD20A-F Y. G. Garcia, et al
6. KD21A-F Arnoldo Adame, et al
7. KD22A-K Jo Ann Hansen, et al
8. KD23 URI (Lehma - Fee Ownership)
9. KD24A-I Jane F. Radford Estate Trust
</TABLE>
6
<PAGE> 75
SCHEDULE 5.6
Page 2 of 2
ROSITA
<TABLE>
<S> <C> <C>
Lease Lessor
----- ------
1. R001 Jose. A. Cardenas, et ux
2. R002A,B Guadalupe Garcia, et ux
Romeo Garcia, et ux
3. R003 Hugo Berlanga, et ux
4. R004 Julia Flores
5. R005A,B Roy Rogers
Ginger Rogers Villarreal
6. R006 Gertrudes R. Tanguma
7. R007 Concepcion R. Sendejo
8. R008 Herminia R. Gonzalez
9. R011 Homero Contreras, et ux
10. R012 Tom Crews, et ux
1. R013A,B Abel Rangel, et ux
Graciela Rangel Gard &
Rosalinda Rangel
</TABLE>
7
<PAGE> 76
SCHEDULE 5.22
None
1
<PAGE> 77
SCHEDULE 5.23
URI LEASES BY RESERVES AT
KINGSVILLE DOME AND ROSITA PROJECTS
04/25/95
<TABLE>
<S> <C> <C>
IN PLACE
PROJECT LEASE # RESERVES
- ------- ------- --------
ROSITA: R012* 3,114,546
R004 436,822
R006 286,466
R005A,B 206,984
R001 173,984
R007 ---
R013A,B ---
KVD: KD18A-AK 2,146,564
KD13A,B 1,027,881
KD14A,B*
KD09A,B,C 742,501
KD12A,B, 426,575
KD19 352,817
KD23(Fee) 173,784
KD21A-F 41,437
KD20A-F ---
KD24A-I ---
KD16A,B ---
KD10A,B ---
</TABLE>
* Plant and Equipment located on land covered by these leases.
2
<PAGE> 78
SCHEDULE 6.2
Page 1 of 2
CERTIFICATE OF COMPLIANCE
(NO EVENT OF DEFAULT)
THE UNDERSIGNED, Paul K. Willmott, the Chief Financial Officer of
Uranium Resources, Inc., a Delaware corporation (the "Company"), hereby
certifies that:
1. No Event of Default exists or would exist with the giving
of notice or passage of time under that certain Note and Warrant Purchase
Agreement, dated May 25, 1995 (the "Purchase Agreement"), by and among the
Company, Lindner Investments, a Massachusetts business trust (on behalf of its
Lindner Bulwark Fund Series) and Lindner Dividend Fund, Inc., a Missouri
corporation.
2. Terms used, but not otherwise defined, herein shall be used
herein as defined in the Purchase Agreement.
3. This Certificate of Compliance is the certificate required by
Section 6.2 of the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Compliance as of the ______ day of _________, 199____.
__________________________________
Paul K. Willmott
Chief Financial Officer
<PAGE> 79
SCHEDULE 6.2
Page 2 of 2
CERTIFICATE OF COMPLIANCE
(LISTING EVENTS OF DEFAULT)
THE UNDERSIGNED, Paul K. Willmott, the Chief Financial Officer of
Uranium Resources, Inc., a Delaware corporation (the "Company"), hereby
certifies that:
1. The following is a list of each Event of Default that exists or
would exist with the giving of notice or the passage of time under that certain
Note and Warrant Purchase Agreement, dated May 25, 1995 (the "Purchase
Agreement"), by and among the Company, Lindner Investments, a Massachusetts
business trust (on behalf of its Lindner Bulwark Fund Series) and Lindner
Dividend Fund, Inc., a Missouri corporation:
[LIST OF EVENTS OF DEFAULT]
2. The Company proposes to take the following actions with respect
to each such Event of Default:
[LIST OF PROPOSED ACTION]
3. Terms used, but not otherwise defined, herein shall be used herein
as defined in the Purchase Agreement.
4. This Certificate of Compliance is the certificate required by
Section 6.2 of the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Compliance as of the ______ day of _________, 199____.
_______________________________
Paul K. Willmott
Chief Financial Officer
<PAGE> 80
SCHEDULE 7.2(B)
EXISTING DEBT
OF URANIUM RESOURCES, INC.
<TABLE>
<S> <C>
Short-term notes $6,491,738
Borrowings from related parties 90,000
Accrued interest payable 163,248
Current portion of long-term debt 142,000
Royalties payable 509,606
Current portion of restoration reserve 65,000
Other accrued liabilities 603,290
Other long-term liabilities and deferred credits 2,341,910
Long-term debt, less current portion 1,345,507
</TABLE>
1
<PAGE> 81
Schedule 7.9
URANIUM RESOURCES, INC.
USE OF PROCEEDS
<TABLE>
<S> <C> <C>
Debenture Proceeds $6,000
Beginning Payables (See Detail) $1,527
Operating Expenses
(April, May, June, 1/3 July)
Payroll and Taxes
Key Employees
W. M. Mays $66
P. K. Willmott 48
W. M. McKnight 69
R. F. Clement 43
H. L. Anthony 43
J. H. Card 43
M. S. Pelizza 27
---
Total Key Employees 339
Other Payroll (28 Employees) 539
Benavides Restoration 76
Kingsville Dome --
Operations (Subject to Board Approval
Period August-December) 2,051
</TABLE>
1
<PAGE> 82
Schedule 7.9
URANIUM RESOURCES, INC.
USE OF PROCEEDS
<TABLE>
<S> <C> <C>
Rosita
Development:
Drilling 139
Supplies (Casing, Screens) 85
Other (Fuel & Repairs) 24
Operations:
Switchgear & Well Wiring for Start-up 60
Wellfield Piping 35
Chemicals 14
U3O8 Drying 4
Other (Fuel, Utilities) 119
Royalties 11
Churchrock
Legal and Permitting 93
Westinghouse/Crownpoint
Legal and Permitting 57
G & A Expenses
Employee Expense Accounts 54
Directors Expenses 22
D & O Insurance 43
Rent and Telephone 60
Legal 51
Congelton/Bettinger Fee 130
Other 21
---
TOTAL G & A 381
</TABLE>
2
<PAGE> 83
Schedule 7.9
URANIUM RESOURCES, INC.
USE OF PROCEEDS
<TABLE>
<S> <C>
W. M. Mays Note 90
Interest - Long-Term Debt - UBS 283
--------
Total Rosita Operating Expenses (April, May,
June, 1/3 July, 1995) Plus Kingsville Operating
Expenses (August - December, 1995) 4,400
TOTAL OUTFLOW $ 5,927
========
BALANCE 77
========
</TABLE>
3
<PAGE> 84
Schedule 7.9
URANIUM RESOURCES, INC.
DETAIL OF BEGINNING ACCOUNTS PAYABLE - M$
<TABLE>
<CAPTION>
THRU DEFERRED
APRIL 1, TO
1995 OCT 1995 PAYABLES
<S> <C> <C> <C>
KEY EMPLOYEES PAYROLL
(INCLUDES FICA, PICA, MED, 401K)
W. M. Mays 59 59 0
P. K. Willmott 14 14 0
W. M. McKnight 62 62 0
R. F. Clement 39 39 0
H. L. Anthony 39 39 0
J. H. Card 39 39 0
M. S. Pelizza 24 24 0
All Others 174 174 0
Total Payroll and Taxes 450 450 0
BENAVIDES RESTORATION
Enviromental/Safety 34 0 34
Legal 12 0 12
Other 6 0 6
</TABLE>
1
<PAGE> 85
Schedule 7.9
URANIUM RESOURCES, INC.
DETAIL OF BEGINNING ACCOUNTS PAYABLE - M$
<TABLE>
<CAPTION>
THRU DEFERRED
APRIL 1, TO
1995 OCT 1995 PAYABLES
<S> <C> <C> <C>
KINGSVILLE DOME
Leases 18 0 18
Operations:
Drilling - Cinco-E 2 0 2
Other (Inc Env/Safety, Fuel 71 0 71
Utilities, Repairs
ROSITA
Lease Payments 50 0 50
Development:
Drilling - Cinco-E 228 139 89
Drilling - Sullivan 212 0 212
Supplies (Casing, Screens, Cement, 201 0 201
Drilling Mud, Bits)
Other (Fuel, Repairs) 47 0 47
Operations:
Plant Repairs 148 0 148
(Repair of IX Columns, Pipelines,
Plant Tankage in Anticipation of
Start-Up)
Cinco-E 4 0 4
Other (Fuel, Utilities) 51 0 51
</TABLE>
2
<PAGE> 86
Schedule 7.9
URANIUM RESOURCES, INC.
DETAIL OF BEGINNING ACCOUNTS PAYABLE - M$
<TABLE>
<CAPTION>
THRU DEFERRED
APRIL 1, TO
1995 OCT 1995 PAYABLES
<S> <C> <C> <C>
VASQUEZ - LEASE 7 0 7
CHURCHROCK
Land 32 0 32
Permits/Water Rights:
License Fees 36 0 36
Legal 84 0 84
Miscellaneous 3 0 3
WESTINGHOUSE CROWNPOINT
Land 3 0 3
Permits/Water Rights:
License Fees 36 0 36
Miscellaneous 16 0 16
UNIT 1 CROWNPOINT
License Fees 36 0 36
</TABLE>
3
<PAGE> 87
Schedule 7.9
URANIUM RESOURCES, INC.
DETAIL OF BEGINNING ACCOUNTS PAYABLE - M$
<TABLE>
<CAPTION>
THRU DEFERRED
APRIL 1, TO
1995 OCT 1995 PAYABLES
<S> <C> <C> <C>
G & A EXPENSES
Employee Expense Accounts 102 102 0
Directors' Expenses 27 27 0
Other Employees Expenses 14 14 0
D & O Insurance 30 0 30
Arthur Anderson 60 0 60
Stock listing/Maint. Fees 46 0 46
TX License Fee 33 0 33
Rent 29 0 29
Phone 15 0 15
Legal 60 0 60
Miscellaneous 83 27 56
TOTAL 2,286 759 1,527
</TABLE>
4
<PAGE> 88
SCHEDULE 11
PERMITTED LIENS
1. Deed of Trust, Security Agreement and Financing Statement dated March
27, 1995 from URI, Inc. to Charlie George Mays as Trustee for the
benefit of Wallace M. Mays, recorded in Volume 186, Page 753, Official
Records of Duval County, Texas, to secure the payment of a February 24,
1995 note in the amount of $65,000, a March 27, 1995 note in the amount
of $25,000, and up to an additional $109,000 which may be advanced from
time to time.
2. Delinquent ad valorem taxes, penalties and interest for years 1975,
1976, and 1978 in the aggregate amount of $1,319.98 as of May, 1995,
assessed against the lands covered by the Flores lease (RO4) recorded
in Volume 411, Page 343, Oil & Gas Lease Records of Duval County,
Texas.
3. UCC-1 Financing Statements of record on the date hereof assigned to
Union Bank of Switzerland and covering certain Uranium inventory and
certain contracts and accounts, and general intangibles relating
thereto and products, profits, and proceeds thereof.
4. Certificate of Deposit held by Citibank, N.A. in the original amount
of $562,038.89 as collateral against a letter of credit in that
amount.
5. Mechanic's Lien evidenced by lien affidavit dated March 29, 1995,
filed by Frasier Mining & Industrial Supply against Uranium Resources,
Inc. in the amount of $38,612.04, recorded under Instrument File No.
52563 in the Official Records of Duval County, Texas. (To be removed
by December 31, 1995).
1
