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EXHIBIT 10.16
LOAN AGREEMENT
This Loan Agreement (the "Agreement") is made and entered into this 18th
day of June, 1996 by and between Uranium Resources, Inc. (the "Company" or
"Uranium Resources"), and Xxxxxxx Dividend Fund, a series of Xxxxxxx
Investments, a Massachusetts business trust ("Creditor"), whose address is 0000
Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xx. Xxxxx, Xxxxxxxx 00000.
RECITALS
A. On May 25, 1995, the Company, Xxxxxxx Dividend Fund, Inc., a
Missouri Corporation and Xxxxxxx Investments, a Massachusetts business trust
entered into a certain Note and Warrant Purchase Agreement (the "Note and
Warrant Purchase Agreement") pursuant to which the Purchaser, as defined
therein, purchased certain secured promissory notes to raise funds for the
Company.
B. The Company now seeks to borrow $4,000,000.00 from Creditor to
allow the Company to enter into a certain Uranium Solution Mining Lease with
Mestena Unproven, Ltd., et. al. as lessor, which lease has an effective date of
December 16, 1995 (the "Lease").
C. The Company has agreed to execute a promissory note in the
principal amount of $4,000,000.00 in favor of Creditor (the "Note"), and a
certain Deed of Trust of even date herewith granting Creditor a first lien as
to the Company's rights pursuant to the Lease (the "Second Deed of Trust").
D. The Company has agreed that in connection with this transaction,
it will be bound by certain of the representations, warranties and covenants
contained in the Note and Warrant Purchase Agreement.
E. The parties now memorialize in this Agreement the additional
agreements and covenants negotiated in connection with the Note and Second Deed
of Trust.
NOW, THEREFORE, in consideration of the covenants and agreements
contained in this Agreement, it is agreed by the parties as follows:
1. Defined Terms. Capitalized terms which are not defined herein
shall have the meanings assigned to such terms in the Note and Warrant Purchase
Agreement, except as otherwise specified herein.
2. The Loan. Subject to the terms and conditions hereof and in
reliance upon the representation and warranties
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set forth in this Agreement, the Creditor hereby agrees to loan to the Company
four million dollars ($4,000,000.00) to permit the Company to enter into the
Lease (the "Loan"). As security for the Loan, the Company shall grant to
Creditor a first Lien on the collateral which is the subject of the Second Deed
of Trust.
3. Representations and Warranties. The Company represents and
warrants that:
3.1 Note and Warrant Purchase Agreement. The following
representations and warranties of the Company contained in Section 5 of the
Note and Warrant Purchase are true and correct in all respects on the date
hereof: 5.1, 5.2, 5.4, 5.9, 5.11, 5.13, 5.15, 5.17, 5.18, 5.19, 5.20, 5.21 and
5.22. For purposes of the foregoing representations and warranties, capitalized
terms contained therein shall have the meaning assigned to them in the Note and
Warrant Purchase Agreement, except that (i) "Purchase Documents" shall include
the Note, the Second Deed of Trust, and this Agreement; and (ii) The "Texas
Real Property" shall include all of the Company's real property and leasehold
interests in the collateral more particularly described in the Second Deed of
Trust.
3.2 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 Note, Deed of Trust and this Agreement and to execute and deliver such
documents as contemplated therein and (d) is duly qualified or licensed and in
good standing in each state or jurisdiction in which the ownership or its
properties or the conduct of its, business requires said qualification or
licensing, except where failure to be so qualified, licensed and in good
standing could not reasonably be expected to have a Material Adverse Effect.
3.3 Authorization and Approvals. The execution, delivery and
performance of the Note, the Second Deed of Trust and this Agreement 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 the recording of the Deed of Trust in the
applicable office, or (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) do not result
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in or require the creation of any Lien (other than Liens created pursuant to
the Second Deed of Trust.
3.4 Company Collateral. The Company is the owner of the leasehold
interest covered by the Second Deed of Trust, including without limitation, all
of the Company's rights pursuant to the Lease. The collateral is not subject
to any Liens other than those in favor of Creditor, except as set forth in the
Mortgage Title Opinion referenced in section 10.6 hereof.
3.5 Actions, Suits or Proceedings. Except as set forth in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995,
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 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.
3.6 Financial Statements. Except as set forth in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995, the Financial
Statements, as hereinafter defined, 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, 1995, 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. "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, 1995 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, 1996.
3.7 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
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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, 1992.
3.8 Valid Liens. The Liens granted by the Company to Purchaser in or
on the collateral which is the subject of the Second Deed of Trust, including,
without limitation, the Company's rights pursuant to the Lease, are valid and
perfected Liens, securing the obligations of the Company to Creditor under the
Note, the Second Deed of Trust and this Agreement, and such collateral is
subject to no Liens that are prior to, on a parity with or junior to the Liens
in favor of the Creditor, except as set forth in the Mortgage Title Opinion
referenced in section 10.6 hereof.
3.9 Compliance with Agreement; No Default. The Company is in
compliance with all of the covenants contained in the Note, the Second Deed of
Trust and this Agreement, 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 the Note, the Second Deed of
Trust or this Agreement which are required to be performed or complied with by
the Company on or before the closing date.
4. Affirmative Covenants. So long as the indebtedness under the
Note is outstanding and unless the Creditor shall otherwise consent in writing,
the Company shall comply with the following affirmative covenants outlined in
Section 6 of the Note and Warrant Purchase Agreement: 6.1, 6.2, 6.3, 6.4, 6.5,
6.6, 6.7, 6.8, 6.9, 6.10. For purposes of the foregoing affirmative covenants,
capitalized terms contained in such affirmative covenant, or in the definition
of any capitalized term within such affirmative covenant, shall have the
meanings assigned to them in the Note and Warrant Purchase Agreement, except
that "Notes" shall include the Note; "Purchaser" shall mean the Creditor; an
"Event of Default" shall include an Event of Default pursuant to this Loan
Agreement; the "Collateral" and the "Texas Real Property" shall include all of
the Company's real property and leasehold interests in the collateral more
particularly described in the Second Deed of Trust; "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; and
"Purchase Documents" shall include the Note, the Second Deed of Trust, and this
Agreement.
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5. Negative Covenants. So long as the indebtedness under the Note
is outstanding and unless the Creditor shall otherwise consent in writing, the
Company shall be bound by each of the following negative covenants outlined in
section 7 of the Note and Warrant Purchase Agreement: 7.1, 7.2, 7.3, 7.4, 7.5,
7.6, 7.7 and 7.8. For purposes of the foregoing negative covenants, capitalized
terms contained in such negative covenant, or in the definition of any
capitalized term within such negative covenant, shall have the meanings
assigned to them in the Note and Warrant Purchase Agreement, except that
"Purchaser" shall mean the Creditor; an "Event of Default" shall include an
Event of Default pursuant to this Loan Agreement; the "Collateral" and the
"Texas Real Property" shall include all of the Company's real property and
leasehold interests in the collateral more particularly described in the
Second Deed of Trust; and "Purchase Documents" shall include the Note, the
Second Deed of Trust, and this Agreement.
6. Use of Loan Proceeds. The Company further agrees that it shall
not use the monies loaned by Creditor to the Company for any purpose other than
to acquire its interests pursuant to the Lease.
7. Events of Default. It shall be a default under this Agreement,
the Note and the Second Deed of Trust if any of the following events occurs:
7.1 The Company defaults in the payment of principal or interest on
the Note when the same becomes due and payable and the default continues for a
period of five (5) days;
7.2. The Company fails to comply with any term or covenant in this
Agreement, the Note or the Second Deed of Trust (other than payment terms of
the Note), and the failure continues for a period of thirty (30) days;
7.3. An event of default occurs under the Deed of Trust or the Note
and Warrant Purchase Agreement.
8. Acceleration. If an Event of Default (other than an Event of
Default specified in clauses (g) and (h) of Section 8.1 of the Note and Warrant
Purchase Agreement) occurs and is continuing, the Creditor, by written notice
to the Company may declare the unpaid principal of and accrued interest on the
Note 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 of the Note and Warrant Purchase Agreement
occurs, the unpaid principal of and accrued interest on the Note shall ipso
fact become and be immediately due and payable without any declaration or other
act on the part of Creditor. The Creditor
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may by notice to the Company rescind an acceleration and its consequences if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default under this Agreement have been cured or waived,
except for the nonpayment of principal or interest that has become due solely
because of the acceleration.
9. Other Remedies. If an Event of Default occurs and is continuing,
the Creditor may pursue any available remedy to collect the payment of
principal or interest on the Note or to enforce the performance of any
provision of the Note or this Agreement. Any failure of the Creditor to take
any steps to enforce, foreclose upon, or realize on any of the collateral which
is the subject of the Second Deed of Trust or to exercise any other right under
the Note, the Second Deed of Trust or this Agreement, shall not operate as a
waiver of any other right or remedy of the Creditor or as a defense to the
enforcement of the Note, the Second Deed of Trust or this Agreement. Moreover,
the Creditor's manner of disposing of any of its collateral or marshalling is
not a defense to the enforcement of the Creditor's rights under the Note, the
Second Deed of Trust or this Agreement.
10. Conditions of Loan. The obligation of Creditor to loan monies
under this Agreement is subject to receipt by Creditor of the following
documents, in form and substance satisfactory to the Creditor, on or prior to
the date of this Agreement, which the Company agrees to provide:
10.1 Certificates of recent date of the appropriate authority or
official of the Company's state of incorporation, listing all incorporation
documents of the Company on file in that office and certifying as to the good
standing and corporate existence of the Company, together with copies of such
incorporation documents of the Company, 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.
10.2 A copy of the Bylaws of the Company, together with all
authorizing resolutions and evidence of other corporate action taken by the
Company to authorize the execution, delivery and performance by the Company of
the Note, the Second Deed of Trust and this Agreement, and the consummation by
the Company of the transactions contemplated by such documents, certified as
true and correct as of the date of this Agreement by a duly authorized officer
of the Company.
10.3 Certificates of incumbency of the Company containing and
attesting to the genuineness of the signatures of those officers authorized to
act on behalf of the Company in connection with the loan, and the consummation
by the Company
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of the transactions contemplated by the Note, the Second Deed of Trust and this
Agreement, certified as true and correct as of the date hereof by a duly
authorized officer of the Company.
10.4 The Note duly executed by the Company;
10.5 The Second Deed of Trust duly executed by the Company;
10.6 Mortgage Title Opinion for the collateral outlined in the Second
Deed of Trust reflecting a first lien in favor of the Creditor and otherwise
satisfactory to the Creditor;
10.7 An opinion of counsel to the Company addressed to Creditor and
its counsel, dated as of the date hereof, substantially in a form acceptable to
Creditor;
10.9 Any and all such other documents as the Creditor may reasonably
request;
10.10 Payment of all administration expenses as
required by this Agreement, incurred by the Company up to the date of this
Agreement; and
10.11 A written consent by Xxxxxxx Investments and Xxxxxxx Dividend
Fund to the Loan.
11. Miscellaneous Provisions.
11.1 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.
000000 Xxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: President
With a copy to: Xxxxx & Xxxxxxxxx
000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
If to Creditor: c/x Xxxxxx Management Corporation
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
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With a Copy to: Xxxxxx Xxxxxxx PLLC
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx
11.2 Successor 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.
11.3 Severability. Should any part of this Agreement for any reason
be declared invalid, such decisions 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 the Agreement without including therein
any such part, parts, or portion which may, for any reason, by hereafter
declared invalid.
11.4 Captions. The descriptive headings of the various section or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
11.5 Payments Due on Saturdays, Sundays and Holidays. In any case
where the interest payment date on the Note or the date fixed for any other
payment of the 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.
11.6 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.
11.7 Governing Law. This Agreement and the Note shall be construed in
accordance with Missouri law.
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IN WITNESS WHEREOF, the parties have executed this agreement.
URANIUM RESOURCES, INC.
By: /s/ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx
Its: President
XXXXXXX DIVIDEND FUND, a series of
XXXXXXX INVESTMENTS
By: /s/ XXXX X. XXXXXX
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Xxxx X. Xxxxxx
Its: President
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