Exhibit 10.3
 
 
SETTLEMENT AGREEMENT
 

 
This Settlement Agreement (this “Agreement”) is made by and between Nuclear Fuel
Cycle Consulting, LLC (“Releasor”), Neutron Energy, Inc., a Nevada corporation
(“Neutron”), and Uranium Resources, Inc., a Delaware limited liability company
(“URI”), as of March 1, 2012 (the “Effective Date”).  Each of Releasor, Neutron
and URI is referred to in this Agreement as a “Party” and collectively as the
“Parties.”
 
Recitals:
 
Whereas, URI, URI Merger Corporation, a Nevada corporation and an indirect
wholly owned subsidiary of URI (“Merger Sub”), and Neutron are, concurrently
with the execution of this Agreement, entering into an Agreement and Plan of
Merger (the “Merger Agreement”) providing for, among other things, a merger of
Merger Sub with and into Neutron (the “Merger”).
 
Whereas, as a condition to the willingness of URI and Merger Sub to enter into
the Merger Agreement, URI has required that Releasor agree, and in order to
induce URI and Merger Sub to enter into the Merger Agreement, Releasor has
agreed, to enter into this Agreement;
 
Whereas, Releasor desires waive any and all rights that it may have to any
severance, change of control or similar payments in connection with the Merger;
and
 
Whereas, any capitalized but undefined terms used herein will have the meanings
ascribed to such terms in the Merger Agreement.
 
Now, Therefore, for and in consideration of the mutual agreements of the Parties
contained herein 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.
Representations and Warranties of the Parties.  Each Party represents and
warrants, as to itself only, that (a) it has taken all requisite action and
obtained all requisite consents in connection with its entering into this
Agreement and the instruments and documents referenced herein; (b) this
Agreement and all instruments and documents executed by it pursuant to this
Agreement are and will be duly executed and valid and legally binding upon it
and enforceable in accordance with their respective terms; (c) neither the
execution of this Agreement or any other instrument or document referenced
herein, nor the consummation of any transaction contemplated hereby, shall
result in a breach of, constitute a default under, or contravene any agreement,
document, instrument or any other obligation to which it is a party or to which
it may be bound or affected, or any law, statute, ordinance, rule, governmental
regulation, or any writ, injunction, judgment, order or decree of any court or
governmental body applicable to it; and (d) there are no actions, suits,
arbitrations, investigations, other proceedings, orders, judgments or decrees
pending or threatened against it which could, individually or in the aggregate,
interfere with the consummation of the transactions contemplated by this
Agreement.

 
 
 

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2.
Releasor Release.

 
 
a.
In the event of a Closing and subject to the limitations contained in
Section 2(b), below, Releasor, for itself and on behalf of its present, former
or future representatives, heirs, executors, administrators, trustees, agents,
insurers, reinsurers, attorneys, successors and assigns (collectively, the
“Claim Releasors”), effective on the Closing Date, absolutely, unconditionally,
and irrevocably waives, releases and discharges, to the fullest extent permitted
by law, Neutron and any of its present, former or future representatives,
predecessors, heirs, executors, administrators, trustees, members, partners,
managers, directors, officers, shareholders, parent companies, subsidiaries,
affiliates, agents, employees, insurers, reinsurers, attorneys, consultants,
advisers, successors and assigns (collectively, the “Neutron Releasees”), from
any and all severance, change of control or similar payments that are or may
become due or payable by any Neutron Releasee to any Claim Releasor as a result
of the execution and delivery of the Merger Agreement or the consummation of the
Merger and the other transactions contemplated thereby (the “Severance Rights”),
including but not limited to any Severance Rights arising under that certain
Consulting Agreement, dated as of February 11, 2011, by and between Neutron and
Releasor, as amended by oral agreement, which amendment provides for a $240,000
lump-sum payment to Releaseor in the event such Consulting Agreement is
terminated on a change of control of Neutron.

 
In connection herewith, Releasor represents that there has not been, and as of
the Closing Date there will not have been, any assignment or other transfer of
any interest in the Severance Rights and Releasor agrees to indemnify and hold
the Neutron Releasees harmless from any liability, claims, demands, damages,
costs, expenses, and attorney’s fees incurred as a result of any person validly
asserting any such assignment or transfer of any Severance Rights.
 
 
b.
It is expressly understood, agreed and stipulated that the releases set forth in
Section 2(a) of this Agreement are limited as follows:

 
 
i.
the Neutron Releasees are not released from any obligations, responsibilities or
conditions under or pursuant to this Agreement; and

 
 
ii.
the Neutron Releasees are not released from any obligations, responsibilities of
conditions under or pursuant to the Merger Agreement and the Transaction
Documents.

 
3.
Covenants Not to Sue.  Releasor, on behalf of itself and each of the Claim
Releasors, covenants to refrain from, directly or indirectly, asserting any
claim, or commencing, instituting or causing to be commenced, any proceeding of
any kind against the Neutron Releasees relating to the Severance Rights.

 
[Signature Page to Settlement Agreement]
 
 
 

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4.
Confidentiality.

 
 
a.
Releasor acknowledges that, as contemplated hereunder, it has or likely will
receive Confidential Information (defined below) of Neutron or its
subsidiaries.  Unless otherwise consented to in advance and in writing by
Neutron, Releasor agrees that for a period of two years it and its agents and
representatives will: (i) hold all Confidential Information in strict trust and
confidence and (ii) not directly or indirectly disseminate any Confidential
Information to any third-party.  The furnishing of any Confidential Information
by Neutron or any of its subsidiaries shall not constitute or be construed as
granting, either expressly or by implication, estoppel or otherwise, any license
to or rights in and to any Confidential Information.

 
 
b.
For purposes of the foregoing, “Confidential Information” means this Agreement
and all non-public confidential and proprietary information of Neutron and any
of its subsidiaries and includes technical, trade secret or
competition-sensitive information which Neutron or any of its subsidiaries has
developed and/or acquired and in good faith considers to be competitively
valuable or sensitive, or holds in confidence from others.  Notwithstanding the
foregoing, the term “Confidential Information” does not include information that
is public or that is obtained at any time lawfully from a third-party under
circumstances permitting its lawful use or disclosure to others, or to
information that is developed independently without reference to or receipt or
disclosure of Confidential Information of a similar type developed by Neutron or
any of its subsidiaries, in each case as proven by documentary evidence supplied
by Releasor.

 
 
c.
If Releasor is required by law to make any disclosure that is prohibited or
otherwise constrained by this Section, Releasor will provide Neutron with prompt
notice of the compulsion or request so that Neutron may seek an appropriate
protective order or other appropriate remedy or waive compliance with this
Section.  In the absence of a protective order, Releasor may disclose that
portion (and only that portion) of the Confidential Information that Releasor is
legally compelled to disclose; provided, however, that Releasor uses reasonable
efforts to attempt to obtain reliable assurance that any person to whom
Confidential Information is so disclosed will undertake the same confidentiality
obligations as in this Section.

 
 
d.
Releasor acknowledges that in the event of any material breach of this Section,
Neutron would be irreparably and immediately harmed and could not be made whole
by monetary damages alone.  Accordingly, in addition to any other remedy to
which it may be entitled at law or in equity, Neutron shall be entitled to an
injunction or injunctions (without the posting of any bond and without proof of
actual damages) to prevent breaches or threatened breaches of this Section
and/or to compel specific performance with this Section, and neither Releasor
nor any of its representatives will oppose granting of such relief.  The
prevailing party as specifically determined by a court of competent jurisdiction
shall be awarded all costs and expenses, including attorneys’ fees, incurred in
connection with any proceeding concerning this Section.

 
[Signature Page to Settlement Agreement]
 
 
 

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5.
Severability.  If any provision of this Agreement is declared by any court of
competent jurisdiction to be invalid, void or unenforceable for any reason, that
finding shall in no way effect any other provision of this Agreement or the
validity or enforceability of this Agreement.  Such remaining provisions shall
be fully severable, and this Agreement shall be construed and enforced as if
such invalid provision had never been inserted in the Agreement.

 
6.
Further Assurances; Further Cooperation.  Each Party agrees to do such things as
may be reasonably requested by any other Party to consummate or document the
transactions contemplated by this Agreement, but the reasonable cost thereof
shall be paid by the requesting Party.

 
7.
Binding Effect; Captions.  This Agreement is binding upon, and shall inure to
the benefit of, the Parties and their respective legal representatives, heirs,
devisees, legatees, successors and assigns.  Titles, captions and the Recitals
set forth in the Agreement are inserted only as a matter of convenience and for
reference and are not contractual and in no way affect the scope of this
Agreement or the intent of its provisions.

 
8.
Entire Agreement.  This Agreement constitutes the entire agreement of the
Parties with respect to the subject matter hereof, supersedes all prior
agreements of any of the Parties with respect to its subject matter, and may not
be modified or amended except by a written instrument signed by all Parties.

 
9.
Governing Law.  This agreement shall be governed, construed and enforced in
accordance with the laws of the State of Colorado without giving effect to
conflict of law principles.

 
10.
Counterparts; Signatures.  This Agreement may be executed in two or more
counterparts, each of which shall be an original for all purposes, but all of
which taken together shall constitute but one and the same instrument.  The
Parties agree that fax and electronic signatures shall be sufficient evidence to
enforce this Agreement.

 
11.
Parties’ Understanding.  RELEASOR HAS BEEN ADVISED THAT THIS AGREEMENT HAS BEEN
DRAFTED BY COUNSEL TO NEUTRON OR URI, NOT COUNSEL TO IT INDIVIDUALLY, AND IT IS
HEREBY ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY.  RELEASOR FULLY
UNDERSTANDS ITS RIGHT TO DISCUSS AND REVIEW ALL ASPECTS OF THIS AGREEMENT WITH
ITS ATTORNEY OR ANY OTHER ADVISOR AND HAS HAD ADEQUATE TIME AND OPPORTUNITY TO
DO SO.  RELEASOR IS NOT RELYING ON ANY REPRESENTATIONS OR STATEMENTS BY NEUTRON
OR URI OR ANY OF NEUTRON OR URI’S AGENTS, REPRESENTATIVES OR ATTORNEYS WITH
REGARD TO THE SUBJECT MATTER, BASIS OR EFFECT OF THIS AGREEMENT.

 
[Signature Page to Settlement Agreement]
 
 
 

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12.
Non Disparagement. Releasor agrees not to disparage Neutron or URI and their
officers, directors, employees, shareholders, agents, or affiliates in any
manner likely to be harmful to them or their business, business reputation or
personal reputation; provided that, subject to Section 4, Releasor may respond
accurately and fully to any question, inquiry or request for information when
required by legal process.

 
13.
NO RECOVERY OF CONSEQUENTIAL DAMAGES.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS AGREEMENT OR OTHERWISE, EXCEPT IN THE CASE OF A BREACH OF
SECTIONS 4 OR 12, NO PARTY WILL HAVE ANY RIGHT OR REMEDY TO RECOVER LOST
PROFITS, LOSS OF BUSINESS, LOSS OF BUSINESS OPPORTUNITY, DIMINUTION IN VALUE, OR
OTHER CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, STATUTORY, SPECIAL AND
INDIRECT DAMAGES FROM ANY OTHER PARTY, UNDER THIS AGREEMENT OR RELATING TO ANY
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, UNDER ANY THEORY WHATSOEVER
(INCLUDING BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR
A STATUTORY CAUSE OF ACTION, OR OTHERWISE), EVEN IF THE PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES, AND EACH PARTY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER ANY SUCH DAMAGES FROM ANY OTHER PARTY.

 
14.
Notice.  All notices, requests and other communications to a Party under this
Agreement must be in writing (including email or fax transmission so long as a
receipt of such fax or email transmission is requested and received) and will be
given to the addresses set forth on the signature page hereto.  All notices,
requests, demands, waivers and other communications must be delivered by
(a) personal delivery, (b) reputable overnight delivery service (including
Federal Express, UPS and DHL), (c) fax (with acknowledgment of receipt), or
(d) email, in each case to the respective address or number indicated above or
later provided by a party pursuant to this Section (with acknowledgement of
receipt).  A notice will be deemed to have been made on the date (i) of delivery
or first refusal of delivery with respect to (a), (ii) of delivery or the date
on which delivery was first refused as indicated on the delivery service's
record of delivery with respect to (b), and (iii) indicated in the confirmation
of transmission or receipt if transmitted during business hours, or the next
business day if transmitted after business hours, with respect to (c) and (d).

 
15.
Consent to Service.  Each Party consents to process being served by any Party in
any suit, action or proceeding relating to this Agreement by the delivery of a
copy of the process in accordance with the provisions of Section 14(a) or first
class certified mail to the last known address of the party served, return
receipt requested, postage prepaid.

 
16.
Waiver of Jury Trial.  EACH PARTY WAIVES ITS RIGHT TO A JURY TRIAL ON ANY ACTION
OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY
RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT OR THE PERFORMANCE OF ANY OF THOSE
RIGHTS AND OBLIGATIONS.  EACH PARTY (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OR ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT HE,
SHE OR IT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FORGOING
WAIVER AND (b) ACKNOWLEDGES THAT SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE WAIVER AND CERTIFICATIONS IN THIS
AGREEMENT.

 
[Signature Page to Settlement Agreement]
 
 
 

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17.
Interpretation.  Wherever the context will so require, the singular will include
the plural, the masculine gender will include the feminine gender and the
neuter, and vice versa.  Unless the context of this Agreement otherwise
requires, (i) words of any gender include each other gender; (ii) words using
the singular or plural number also include the plural or singular number,
respectively; (iii) the terms “Section” refer to the specified Section of this
Agreement; (iv) the term “including” means including without limitation; and (v)
the term “or” is not exclusive.  Whenever this Agreement requires the consent,
agreement or approval of a party or other person, the party or other person from
whom the consent, agreement or approval is required will be entitled to withhold
the consent or approval in the party’s or person’s sole and absolute discretion.

 
18.
Releasor’s Further Understanding.  Releasor represents and agrees as follows:

 
 
a.
Releasor has carefully read and fully understands all of the provisions of this
Agreement.

 
 
b.
Releasor is voluntarily entering into this Agreement.

 
 
c.
Releasor is not relying on any representations or statements by Neutron or URI,
or any of their agents, representatives, or attorneys with regard to the subject
matter, basis or effect of this Agreement or otherwise which are not contained
in this Agreement.

 
19.
Third Party Beneficiaries.  None of the provisions of this Agreement are
intended to be, nor shall they be construed to be, for the benefit of any third
party.

 
[Signature pages follow.]
 
 
 
 
[Signature Page to Settlement Agreement]
 
 
 
 

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In Witness Whereof, this Agreement is executed to be effective as of the
Effective Date.
 
 

 
Nuclear Fuel Cycle Consulting, LLC
         
By:  ___________________________
 
Name: James J Graham
 
Its:  Principal

 
[Signature Page to Settlement Agreement]
 
 
 

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NEUTRON ENERGY, INC.
     
By:______________________
 
Name:____________________
 
Its: ______________________
     
Neutron Energy Inc.
 
9000 E. Nichols Avenue
 
Suite 225
 
Englewood, Colorado 80112
 
Attn.: Chief Executive Officer
 
Fax: (303) 531-0519
             
URANIUM RESOURCES, INC.
     
By: _______________________
 
Name: _____________________
 
Its: _______________________
     
405 State Highway 121 Bypass,
 
Building A, Suite 110
 
Lewisville, Texas 75067
 
Attn.: Treasurer
 
Fax: (303) 861-7805

 
 
 
 
 
 
 
[Signature Page to Settlement Agreement]