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EXHIBIT 10.32
NOTE EXCHANGE AGREEMENT
This Note Exchange Agreement (the "Note Exchange Agreement") is made
and entered into this 30th day of June 1999 between Uranium Resources, Inc., a
Delaware corporation (the "Company"), and Xxxxxxx Investments, a Massachusetts
business trust ("Investments"), on behalf of its series known as "Xxxxxxx Asset
Allocation Fund" (formerly known as "Xxxxxxx Dividend Fund") ("hereinafter
"Asset Allocation Fund") and "Xxxxxxx Market Neutral Fund" (formerly known as
"Xxxxxxx Bulwark Fund") (hereinafter "Market Neutral Fund") (Investments, Asset
Allocation Fund and Market Neutral Fund being hereinafter collectively referred
to as "Xxxxxxx").
RECITALS:
1. The Company and Xxxxxxx have previously entered into a Note and
Warrant Purchase Agreement dated May 25, 1995 (the "Purchase Agreement").
2. Under the Purchase, Agreement Asset Allocation Fund loaned the
Company $4.5 million, evidenced by the Company's promissory note in that amount;
and Market Neutral Fund loaned the Company $1.5 million, evidenced by the
Company's promissory note in that amount. Each such note was dated May 25, 1995
and had a maturity date of May 31, 1998.
3. Pursuant to the Purchase Agreement and in connection with the
foregoing loans, the Company issued a warrant to Asset Allocation Fund to
purchase 1,125,000 shares of the Company's common stock, $.001 par value per
share (the "Common Stock"), and a warrant to Market Neutral Fund to purchase
375,000 shares of Common Stock, each at $4.00 per share. Prior to Xxxxx 00, 0000
Xxxxx Allocation Fund had exercised the right to purchase 500,000 shares of
Common Stock under its warrant and Market Neutral Fund had not exercised the
right to purchase any shares of Common stock under its warrant.
4. On March 23, 1998 the Company and Xxxxxxx entered into a note and
warrant exchange agreement pursuant to which the maturity date of the notes and
the expiration date of the warrants were changed to May 31, 2000; and the
conversion price of the notes and the exercise price of the unexercised portion
of the warrants were changed to $3 per share. The notes were exchanged for new
promissory notes dated March 23, 1998 (the "March 23, 1998 Notes"); and the
warrants were exchanged for new warrants dated March 24, 1999 (the "Outstanding
Warrants"). Such March 23, 1998 Notes and the Outstanding Warrants are currently
outstanding.
5. The Company has requested that Xxxxxxx amend the terms of the March
23, 1998 Notes by (i) extending the maturity date thereof, (ii) providing for
the mandatory conversion of such notes to Common Stock upon the happening of
certain events, (iii) providing for the accrual but non-payment of interest,
(iv) providing for the optional conversion of such accrued interest into Common
Stock and (v) providing for certain other changes. Xxxxxxx has agreed to such
amendments upon the terms and conditions set forth in this Note Exchange
Agreement.
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NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises hereinafter set forth 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. Outstanding Warrants. The Outstanding Warrants shall remain
outstanding, and nothing contained in this Note Exchange Agreement shall in any
way alter, modify or change any of the provisions of the Outstanding Warrants.
2. March 23, 1998 Notes. The March 23, 1998 Notes have been cancelled
and surrendered simultaneously with the execution and delivery of this Note
Exchange Agreement in exchange for new notes dated June 30, 1999 (the "Notes")
issued by the Company, which are issued under the terms and provisions of, and
shall be governed in all respects by, this Note Exchange Agreement. All
references to the Notes in this Note Exchange Agreement and the Purchase
Agreement shall refer to the new notes dated June 30, 1999 issued pursuant to
this Note Exchange Agreement
3. Amendment to the Purchase Agreement. The following provisions of the
Purchase Agreement are amended as follows:
(a) Section 1.1 of the Purchase Agreement is hereby amended by
deleting said section in its entirety and substituting the following in
its place:
"1.1 Description of the Notes. The Notes shall be
substantially in the form set forth in Exhibit 1 attached
hereto. Each of the Notes shall be dated June 30, 1999 and
shall mature on December 31, 2000. The Notes shall bear
interest on the unpaid principal balance thereof from March
30, 1999 until the earlier of the maturity date or the date of
the Mandatory Conversion Event at the rate of 6.5% per annum,
due at the earlier of the maturity date or the date of the
Mandatory Conversion Event, subject to conversion or payment
as provided in Section 3.7."
(b) Sections 3 of the Purchase Agreement (consisting of
Sections 3.1 through 3.5) is hereby amended by adding the following new
Sections 3.6 and 3.7:
"3.6 Mandatory Conversion. The entire unpaid
principal balance of all outstanding Notes shall be converted,
automatically and without further action of the Company or a
Holder, into 6 million shares of Common Stock upon the
occurrence of the Mandatory Conversion Event (as hereinafter
defined). The number of shares is not subject to adjustment
under the antidilution provisions of Section 4.2. Upon such
automatic conversion, whether or not the Notes are surrendered
to the Corporation, the Notes shall cease to be outstanding,
and each Holder shall be treated as the record holder of
Common Stock into which the Notes have been converted, as of
the date of the Mandatory Conversion Event.
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3.7 Optional Payment or Conversion of Accrued
Interest to Common Stock. On the earlier of the maturity date
or the date of the Mandatory Conversion Event, the Holder
shall have the option either to (a) convert all accrued but
unpaid interest into shares of Common Stock into that number
of shares of Common Stock determined by dividing the aggregate
amount of the accrued but unpaid interest by the lesser of (i)
Market Price or (ii) $1, or (b) receive payment of the accrued
but unpaid interest in 18 equal monthly installments together
with interest on the unpaid balance at the rate of 6.5% per
annum. The Holder shall elect either option (a) or (b) by
written notice to the Company within 15 days after the earlier
to occur of the maturity date or the Mandatory Conversion
Date. The number of shares is not subject to adjustment under
the antidilution provisions of Section 4.2."
(c) Section 11 of the Purchase Agreement is hereby amended by
adding thereto a new subsection (ss) to read as follows:
"(ss) "Mandatory Conversion Event" shall mean the
occurrence of both of the following: (i) The Company's
obtaining a long-term contract (duration of 24 months or more)
for the sale of uranium at not less than $12 per pound), and
(ii) consummation by the Company of an infusion of capital, by
the issuance of debt or equity (an "Infusion of Capital"), for
the purpose of financing the costs of commencing the
production of uranium from the Company's Xxxxxxx property or
another suitable property, whether or not the Company
currently has the leasehold or fee interests in such other
property (Xxxxxxx or such other property being hereinafter
referred to as "Suitable Property"). The term "Suitable
Property" would include the Company's Kingsville Dome property
with respect to which the Company currently has the leasehold
and other rights to operate and from which the Company has
produced significant amounts of uranium but which requires
significant drilling of delineation, injector and extraction
xxxxx before commercial production can be commenced."
5. Rights of Company Upon Sale of Notes or Common Stock.
(a) Transfer of Note. No Holder shall transfer any Note or
shares of Common Stock into which the Note may be converted (the Notes
or any such shares of Common Stock being hereinafter referred to as
"Securities") or any interest therein except to one of its Affiliates
or in accordance with the following subsections (b) and (c). For
purposes of this Section 5, the term "Affiliate" shall mean Investments
or any of its series of mutual funds.
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(b) Notice of Proposed transfer. Before making any transfer of
any Securities (other than to an Affiliate), a transferring Holder (a
"transferring Holder") will deliver a written notice (the "Offer
Notice") to the Company. The Offer Notice will disclose in reasonable
detail the Securities proposed to be transferred (the "Offered
Securities"), the price at which the transferring Holder is willing to
sell the Offered Securities (the "Offer Price") and the other principal
terms and conditions on which the transferring Holder is willing to
consummate the transfer. Such Offer Notice will constitute an
irrevocable offer to sell to the Company or its assigns the Offered
Securities for the Offer Price and on the other terms and conditions
set forth in the Offer Notice, subject to the provisions of this
Section.
(c) Option to Purchase.
(i) The Company or its assigns may elect to purchase
all, but not less than all, of the Offered Securities for the
Offer Price and on the other terms and conditions set forth in
the Offer Notice by delivering written notice (an "Acceptance
Notice") of such election to the transferring Holder within 30
days after the delivery of the Offer Notice.
(ii) If the Acceptance Notice with respect to all
Offered Securities is given within the time periods described
above, the Offer Notice, together with the Acceptance Notice
related thereto, will constitute a binding agreement between
the parties thereto to buy and to sell the Offered Securities
for the Offer Price and on the other terms and conditions set
forth in the Offer Notice. All transfers of Offered Securities
pursuant to the foregoing provisions of this Section will be
consummated as soon as practicable, but in any event within 45
days after delivery of the Offer Notice.
(iii) If the Acceptance Notice with respect to all
Offered Securities is not given within the 30 day time period
described in (i) above, the transferring Holder may, within
180 days after the end of such 30-day time period, transfer
all (but not less than all) of the Offered Securities to one
or more third parties at a price no less than the Offer Price
and on other terms no more favorable to the transferees than
the terms and conditions contained in the Offer Notice. Any
such transferee shall be bound by the restrictions on transfer
contained in this section 5 with respect to all subsequent
transfers.
(iv) The parties will maintain in confidence and will
not disclose or permit to be disclosed to any third party
(other than legal counsel, accountants or other agents) the
Offer Price and the other terms and conditions contained in
the Offer Notice and, if the parties fail to comply with the
foregoing sentence, then such party will not be entitled to
exercise such rights with respect to the transaction
contemplated by the Offer Notice or by any succeeding Offer
Notice which may be given by a Holder (other than such party)
hereunder.
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6. Reaffirmation of the Purchase Agreement. Except as expressly
modified by this Note Exchange Agreement, the Purchase Agreement shall remain in
full force and effect.
7. Miscellaneous.
(a) Successors and Assigns. This Note Exchange Agreement shall
be binding upon and inure to the benefit of, and be enforceable by, the
parties hereto and their respective successors and assigns.
(b) Severability. Should any part of this Note Exchange
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 Note Exchange 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 Note Exchange Agreement
without including therein any such part, parts, or portion which may,
for any reason, be hereafter declared invalid.
(c) Captions. The descriptive headings of the various Sections
or parts of this Note Exchange Agreement are for convenience only and
shall not affect the meaning or construction of any of the provisions
hereof.
(d) Counterparts. This Note Exchange 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 Note Exchange Agreement
shall be deemed effective upon receipt by each party hereto of a
facsimile copy of this Note Exchange Agreement executed by the other
party hereto.
(e) Governing Law. This Note Exchange Agreement shall be
construed in accordance with Missouri law.
IN WITNESS WHEREOF, the parties have executed this Note Exchange
Agreement.
URANIUM RESOURCES, INC.
By:
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Its:
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XXXXXXX INVESTMENTS, on behalf of its
series XXXXXXX ASSET ALLOCATION FUND
and XXXXXXX MARKET NEUTRAL FUND
By:
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Its:
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