Exhibit 10.1

 

Execution Version

 

 

BRIDGE LOAN AGREEMENT

 

Among

 

URANIUM RESOURCES, INC.

 

as the Borrower,

 

THE SUBSIDIARIES OF THE BORROWER FROM TIME TO TIME PARTY HERETO

 

as the Guarantors,

 

and

 

RESOURCE CAPITAL FUND V L.P.

 

as the Lender

 

Dated as of December 17, 2012

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE 1

CERTAIN DEFINITIONS AND ACCOUNTING PRINCIPLES

1

1.1

Certain Defined Terms

1

1.2

Accounting Principles

11

1.3

Other Definitional Provisions; Date and Time References

12

1.4

Currency Conversions

12

 

 

 

ARTICLE 2

COMMITMENT; USE OF PROCEEDS; FEES; FUTURE EQUITY FINANCINGS

12

2.1

Commitment

12

2.2

Borrowing Procedure and Funding

12

2.3

Loan Amount

13

2.4

Repayment

13

2.5

Use of Proceeds

13

2.6

Establishment Fee

13

2.7

Lender Participation in Equity Financings

13

2.8

Private Placement of Shares

14

2.9

No Fees or Commissions

14

2.10

NASDAQ Compliance

14

2.11

Legend on Share Certificates

14

2.12

Anti-Dilution Rights

15

 

 

 

ARTICLE 3

PROCEDURE AND PAYMENT

15

3.1

Interest

15

3.2

Repayment of the Loan

16

3.3

Priority of Prepayments

17

3.4

Payments and Computations

17

3.5

Increased Costs

18

3.6

Taxes

19

3.7

Usury

20

 

 

 

ARTICLE 4

COLLATERAL SECURITY

20

4.1

Security Documents

20

4.2

Recordings and Filings of Security Documents

20

4.3

Protection of Security Document Liens

21

4.4

Security Documents

21

4.5

Right of Set-off

21

4.6

Subordination of Certain Liens

21

 

 

 

ARTICLE 5

CONDITIONS PRECEDENT

22

5.1

Conditions Precedent to the Loan

22

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

ARTICLE 6

REPRESENTATIONS AND WARRANTIES

24

6.1

Representations and Warranties of the Credit Parties

24

6.2

Representations and Warranties of the Lender

31

 

 

 

ARTICLE 7

AFFIRMATIVE COVENANTS OF THE CREDIT PARTIES

33

7.1

Compliance with Laws, Etc.

33

7.2

Project Permits

33

7.3

Reporting Requirements

33

7.4

Inspection

35

7.5

Maintenance of Insurance

35

7.6

Keeping of Records and Books of Account

35

7.7

Preservation of Existence, Etc.

35

7.8

Conduct of Business

36

7.9

Notice of Default

36

7.10

Defense of Title and Rights

36

7.11

Material Agreements

36

7.12

Maintenance of Unissued Shares

36

7.13

Participation on the Borrower’s Board of Directors

36

7.14

Authorized Disclosure of Confidential Information; Restrictions

37

7.15

Public Announcements

38

7.16

Additional Guarantors

38

7.17

Shares Delivered to the Lender

39

7.18

Amendment of Investor Agreements

39

7.19

Shareholder Meeting; NASDAQ Compliance

39

 

 

 

ARTICLE 8

NEGATIVE COVENANTS OF THE CREDIT PARTIES

40

8.1

Indebtedness

40

8.2

Liens, Etc.

40

8.3

Assumptions, Guarantees, Etc. of Indebtedness of Other Persons

42

8.4

Liquidation; Merger; Change in Ownership

42

8.5

Restrictive and Inconsistent Agreements

42

8.6

Burdens on Production

42

8.7

Investments in Other Persons

42

8.8

Sale of Project Assets

42

8.9

Acquisitions

43

8.10

Dividends

43

8.11

Work Program and Budget

43

8.12

Material Agreements

43

8.13

Limitation on Hedging

43

8.14

Transactions with Affiliates

43

8.15

New Subsidiaries

43

8.16

Use of Loan Proceeds

44

 

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TABLE OF CONTENTS

(continued)

 

 

Page

 

 

 

ARTICLE 9

EVENTS OF DEFAULT

44

9.1

Event of Default

44

9.2

Remedies Upon Event of Default

46

 

 

 

ARTICLE 10

MISCELLANEOUS

47

10.1

Amendments, Etc.

47

10.2

Notices; Etc.

47

10.3

No Waiver; Remedies

48

10.4

Costs, Expenses and Taxes

49

10.5

Indemnification

49

10.6

Binding Effect; Assignment

50

10.7

Governing Law

50

10.8

Dispute Resolution; Arbitration

50

10.9

Execution in Counterparts; Facsimile Signatures

50

10.10

Inconsistent Provisions

50

10.11

Severability

50

10.12

Governing Language

50

10.13

Survival of Representations and Warranties

51

10.14

Entire Agreement; Schedules and Exhibits

51

10.15

Further Assurances

51

10.16

Credit Party Joint and Several Liability

51

10.17

Acknowledgements

52

 

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SCHEDULES

 

Schedule 1.1(a)

Borrower’s Account

 

 

Schedule 1.1(b)

Lender’s Account

 

 

Schedule 1.1(c)

Projects

 

 

Schedule 1.1(d)

Material Agreements

 

 

Schedule 1.1(f)

Properties

 

 

Schedule 1.1(g)

Work Program and Budget

 

 

Schedule 2.12

Anti-Dilution Provisions

 

 

Schedule 6.1(b)

Subsidiaries

 

 

Schedule 6.1(c)

Authorizations and Consents

 

 

Schedule 6.1(d)

Governmental and Other Consents

 

 

Schedule 6.1(f)

Litigation

 

 

Schedule 6.1(g)

Financial Statements

 

 

Schedule 6.1(i)

Information Accurate

 

 

Schedule 6.1(j)

Permitted Liens

 

 

Schedule 6.1(k)

Capital Structure

 

 

Schedule 6.1(n)

Environmental Disclosures

 

 

Schedule 6.1(o)

Indebtedness

 

 

Schedule 6.1(p)

Legal Compliance

 

 

Schedule 6.1(q)

Operation of Projects

 

 

Schedule 6.1(s)

Project Permits

 

 

Schedule 7.1

Compliance with Laws

 

 

Schedule 7.2

Project Permits Exceptions

 

 

Schedule 9.1(j)

Events of Default — Project Permits

 

 

Schedule 10.8

Dispute Resolution; Arbitration

 

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EXHIBITS

 

Exhibit A

Form of Omnibus Certificate

 

 

Exhibit B

Form of Notice of Borrowing

 

 

Exhibit C

Form of Security Agreement

 

 

Exhibit D

Form of Guarantee

 

 

Exhibit E

Form of Promissory Note

 

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BRIDGE LOAN AGREEMENT

 

This BRIDGE LOAN AGREEMENT dated as of December 17, 2012 (the “Closing Date”) is
by and among URANIUM RESOURCES, INC., a corporation organized and existing under
the laws of the State of Delaware, as the borrower (the “Borrower”), those
Subsidiaries of the Borrower from time to time party hereto, as guarantors (the
“Guarantors”), and RESOURCE CAPITAL FUND V L.P., a Cayman Islands exempt limited
partnership, as the lender (together with its successors and assigns, the
“Lender”).

 

Recitals

 

A.                                    The Borrower desires to borrow, and the
Lender is prepared to lend to the Borrower, Five Million United States Dollars
(US$5,000,000) as a bridge loan to be advanced in a single advance (the “Loan”),
subject to the terms and conditions set forth herein.

 

B.                                    The obligations of the Borrower under this
Agreement, including repayment of the Loan provided hereby, shall be guaranteed
by the Guarantors.

 

C.                                    This Agreement and all amounts due
hereunder will be secured by all personal property of the Borrower and the
Guarantors as further described herein and in the Security Documents.

 

D.                                    The Credit Parties and the Lender desire
hereby to provide for the Loan and the collateral security therefor on the terms
and conditions set forth herein.

 

Agreement

 

NOW, THEREFORE, in consideration of the following mutual covenants and
agreements, the parties hereby agree as follows:

 

ARTICLE 1

 

CERTAIN DEFINITIONS AND ACCOUNTING PRINCIPLES

 

1.1                               Certain Defined Terms.  As used in this
Agreement and unless otherwise expressly indicated, the following terms shall
have the following meanings:

 

“Affiliate” means, with respect to a Person, (i) any partner, director, ten
percent (10%) or more shareholder, manager, member, managing agent, director or
employee of that Person or that Person’s Affiliates; and (ii) any other Person
(A) that directly or indirectly through one or more intermediaries, controls or
is controlled by, or is under common control with, that Person; (B) that
directly or indirectly owns or holds (legally or beneficially) ten percent (10%)
or more of any class of voting stock or partnership, membership or other voting
interest of that Person; or (C) ten percent (10%) or more of the voting stock or
partnership, membership or other voting interest of which is directly or
indirectly owned or held (legally or beneficially) by that Person.  For purposes
of clarification, the Affiliates of the Lender shall include RCF Management
L.L.C. and its Affiliates.  Affiliates of the Borrower or any other Credit Party
shall not include the

 

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Lender or any Affiliates of the Lender or any third party joint venture parties
to the Projects that are not Subsidiaries of a Credit Party.

 

“Agreed Priority” means, with respect to a Security Document and a Lien made in
favour of the Lender, except as otherwise expressly provided herein, a senior
first priority Lien in favour of the Lender, meaning that such Security Document
and Lien are prior in right to any other Lien in, on or to the Collateral which
is purported to be covered thereby, subject only, in each case, to Permitted
Liens.  For the avoidance of doubt, the Obligations shall be secured by a first
ranking perfected encumbrance over all personal property of the Borrower and the
other Credit Parties, including all personal property at, on or associated with
the Projects, subject, in each case, to Permitted Liens.

 

“Agreement” means this Bridge Loan Agreement, as it may be amended, restated,
supplemented, extended or otherwise modified in accordance with its terms and in
effect from time to time, together with all Schedules and Exhibits hereto, each
of which is incorporated herein by reference.

 

“Applicable Interest Rate” means the Interest Rate or the Default Rate, as
applicable.

 

“Bankruptcy Code” shall mean the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.

 

“Bankruptcy Laws” shall mean the Bankruptcy Code and all other Governmental
Requirements pertaining or applicable to bankruptcy, insolvency, debtor relief,
debtor protection, liquidation, reorganization, winding up, arrangement,
receivership, administration, moratorium, assignment for the benefit of
creditors or other similar laws applicable in the United States or other
applicable jurisdictions as in effect from time to time.

 

“Borrower” has the meaning specified in the Preamble to this Agreement.

 

“Borrower’s Account” means the account of the Borrower described in
Schedule 1.1(a).

 

“Borrowing Date” has the meaning specified in Section 2.2.

 

“Business Day” means a day on which banks in Denver, Colorado are open for
business.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty or (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority.

 

“Change of Control” means the occurrence of any of the following events, without
the prior written consent of the Lender:  (a) any person or persons “acting
jointly or in concert” as defined under applicable Securities Laws, other than
the Lender and/or its Affiliates, becomes the registered or beneficial owner of
more than twenty-five percent (25%) of the then outstanding voting Equity
Interests of the Borrower or any Credit Party, measured by voting power rather
than the number of shares; or (b) Continuing Directors shall cease for any
reason to constitute a majority of the members of the Board of Directors of the
Borrower then in office.

 

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“Closing Date” has the meaning set forth in the Preamble to this Agreement.

 

“Collateral” means all real and personal property, assets, rights, titles and
interests subject to the Security Documents, whether tangible or intangible,
presently held or hereafter acquired, and all products and proceeds of the
foregoing, including insurance proceeds related to the foregoing.

 

“Confidential Information” has the meaning specified in Section 7.14.

 

“Contingent Liability” means, for any Person, without duplication, all
contingent liabilities of such Person determined in accordance with GAAP.

 

“Continuing Directors” means during any period of twenty four (24) consecutive
months commencing after the Closing Date, individuals who at the beginning of
such twenty four (24) month period were directors of such Person (together with
any new director whose election by such Person’s Board of Directors was approved
by, or whose nomination for election by such Person’s shareholders was
recommended by, a vote of at least a majority of the directors then still in
office who either were directors at the beginning of such period or whose
election or nomination for election was previously approved or recommended as
described in this parenthetical).

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, the ability to appoint or remove
directors, senior officers, managers or other equivalent persons of such a
Person, by contract or otherwise.

 

“Credit Party” means the Borrower and each Guarantor.

 

“Date of Default” has the meaning specified in Section 9.2(a).

 

“Debt Financing” means borrowing money, whether by selling bonds, bills,
debentures, preferred Equity Interests or other similar Instruments, issuing
promissory notes, indentures or other similar Instruments, entering into a loan
or credit agreement or other similar Instrument or otherwise incurring or
agreeing to enter into any Instrument or arrangement relating to or consisting
of borrowed money Indebtedness.

 

“Default” means any Event of Default or any condition or event which, after
notice or lapse of time or both, would constitute an Event of Default.

 

“Default Rate” means the interest rate applicable to the Loan during periods
when any amounts payable by the Borrower, whether as principal repayments,
interest payments, expenses payments or other amounts, are due and payable but
unpaid by the Borrower, which interest rate shall be at a rate per annum equal
to the Interest Rate plus five percent (5%).

 

“Environmental Laws” means Governmental Requirements relating to pollution or
protection of the environment, including, without limitation, Governmental
Requirements relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment (including,

 

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without limitation, ambient air, surface water, ground water, land surface or
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or wastes which are applicable to any Credit Party, any Project or the other
activities of and properties or assets owned, controlled or managed by a Credit
Party.

 

“Equity Financing” means the sale or placement by the Borrower of Shares or
other Equity Interests of the Borrower.

 

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options, rights, interests or other securities for the purchase or
acquisition from such Person of shares of capital stock of (or other ownership
or profit interests in) such Person; all of the warrants, options, Indebtedness,
rights, interests or other securities exercisable for or convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares of capital stock (or such other
interests); and all of the other ownership or profit interests in such Person
(including, without limitation, partnership, member, limited liability company
or trust interests therein), whether voting or nonvoting, whether or not such
shares, warrants, options, rights or other interests are outstanding on any date
of determination, and whether or not such shares, warrants, options, rights or
other interests are certificated or uncertificated.

 

“Establishment Fee” has the meaning specified in Section 2.6.

 

“Event of Default” has the meaning set forth in Section 9.1.

 

“Exchange Rate” means the currency exchange rate for any relevant currency as
reported by Bloomberg using the “Price History” function on any date of
determination, or, in the event that such “Price History” is not available on
such date, on the preceding date on which a “Price History” is available, or, if
either Bloomberg or the “Price History” is no longer available, then such
currency exchange rate reasonably identified by the Lender.

 

“Excluded Taxes” means, with respect to the Lender or any other recipient of any
payment to be made by or on account of any obligation of the Borrower hereunder,
income or franchise Taxes imposed on (or measured by) the taxable income of the
Lender or such recipient, as the case may be, or capital Taxes imposed on (or
measured by) the taxable capital of the Lender or such recipient, in each case
by the jurisdiction under the applicable law of which such recipient is
organized or in which its principal office is located or which exercises valid
taxation jurisdiction over such recipient, but for greater certainty, Excluded
Taxes do not include withholding taxes imposed on the Lender or any such
recipient in respect of payments or deliveries hereunder.

 

“Expropriation Event” means the appropriation, confiscation, expropriation,
cancellation, seizure or nationalization (by Governmental Requirement,
intervention, court order, condemnation, exercise of eminent domain or other
action or form of taking) of ownership or control of a Credit Party or any of
its Subsidiaries or of any Project or Properties or any substantial portion
thereof, or any substantial portion of the rights related thereto, or any

 

4

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substantial portion of the economic value thereof, or which prevents or
materially interferes with the ability of a Person to own or operate the
property or business subject to such action, including by the imposition of any
Tax, fee, charge or royalty.

 

“GAAP” means generally accepted accounting principles in the United States,
consistently applied.

 

“Governmental Authority” means the government of any nation and any state,
provincial, territorial, divisional, county, regional, city and other political
subdivision thereof, any tribal, aboriginal or native government or corporation,
and any union or commonwealth of multiple countries, such as the European Union,
in each case in which any property of a Credit Party is located or which
exercises valid jurisdiction over any such property or any Credit Party, or in
which a Credit Party conducts business or is otherwise present, and any entity,
court, arbitrator or board of arbitrators, agency, department, commission,
board, bureau, regulatory authority or instrumentality of any of them exercising
executive, legislative, judicial, regulatory or administrative functions that
exercises jurisdiction over any Credit Party or its properties or assets,
including any Project, and any securities exchange or securities regulatory
authority to which a Credit Party is subject.

 

“Governmental Requirement” means any law, statute, code, ordinance, treaty,
order, rule, regulation, judgment, ruling, decree, injunction, franchise,
permit, certificate, license, authorization, approval or other direction or
requirement (including Environmental Laws, the Project Permits, energy
regulations, occupational, safety and health standards or controls, taxation
laws and Securities Laws) of any Governmental Authority.

 

“Guarantee” means a guarantee, substantially in the form of Exhibit D, executed
by each Guarantor, together with any amendments, modifications, supplements,
extensions, revisions and restatements thereof made in accordance with its
terms.

 

“Guarantor” has the meaning specified in the Preamble to this Agreement, and, as
of the Closing Date, the Guarantors include: (i) URI, Inc.; (ii) Hydro
Resources, Inc.; (iii) URI Minerals, Inc.; (iv) Belt Line Resources, Inc.;
(v) Uranco Inc.; (vi) HRI-Churchrock, Inc.; (vii) URI Neutron Holdings I, Inc.;
(viii) URI Neutron Holdings II, Inc.; (ix) Hydro Restoration Corporation;
(x) Neutron Energy, Inc.; and (xi) Cibola Resources LLC.

 

“Hedge Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any Master Agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any Master Agreement, including any such
obligations or liabilities under any Master Agreement.

 

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“Indebtedness” means, for any Person, without duplication, all indebtedness and
liabilities of such Person determined in accordance with GAAP.

 

“Indemnified Party” has the meaning specified in Section 10.5.

 

“Instrument” means any contract, agreement, undertaking, indenture, mortgage,
certificate, document or writing (whether formal agreement, letter or otherwise)
under which any obligation, duty, covenant, agreement, affirmation, undertaking
or liability is evidenced, assumed or undertaken, or any right or Lien (or right
or interest therein) is granted, authenticated, notarized, authorized or
perfected, and any notice, registration, recordation, or filing associated with
or required by any of the foregoing.

 

“Interest Payment Date” means (i) each January 10th, April 10th, July 10th, and
October 10th of each Year and (ii) the Maturity Date.

 

“Interest Rate” means ten percent (10%) per annum.

 

“Interest Shares” has the meaning specified in Section 3.1(c).

 

“Investor Agreements” means the Stockholders’ Agreement and the Registration
Rights Agreement.

 

“Lender” has the meaning set forth in the Preamble to this Agreement.

 

“Lender’s Account” means the account or accounts designated from time to time by
the Lender for receipt of funds paid by the Borrower or any other Credit Party,
with the Lender’s Account as of the Closing Date set forth on Schedule 1.1(b).

 

“Lender Nominee” has the meaning set forth in Section 7.13.

 

“Lien” means, as to any Person, any mortgage, deed of trust, debenture, lien,
pledge, charge, security interest, hypothecation, indenture, preferential right,
assignment, option, production payment or other lien, encumbrance or collateral
security Instrument in, on or to, or any right or interest, or the title of any
vendor, lessor, lender or other secured party to, or interest or title of any
Person under any conditional sale or other title retention agreement or capital
lease with respect to, any property or asset owned or held by such Person, the
signing of any mortgage, deed of trust, pledge, charge, security agreement,
hypothecation, indenture, assignment or similar instrument, or the signing or
filing of a financing statement, personal property security act filing or other
similar Instrument, which names such Person as debtor, or the signing of any
security agreement or other similar Instrument authorizing any other party as
the secured party thereunder to file any financing statement, personal property
security act filing or other similar Instrument.  A Person shall be deemed to be
the owner of any assets that it has placed in trust for the benefit of the
holders of its indebtedness, which indebtedness is deemed to be extinguished
under GAAP but for which such Person remains legally liable, and such trust
shall be deemed to be a Lien.

 

“Loan” means the bridge loan in the amount of Five Million United States Dollars
(US$5,000,000) from the Lender to the Borrower, as specified in the Recitals to
this Agreement.

 

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“Loan Documents” means this Agreement, the Promissory Note, the Security
Documents, the Notice of Borrowing, each Omnibus Certificate, and each other
Instrument executed by the Borrower, a Credit Party or a Subsidiary of the
Borrower or a Credit Party, and delivered to the Lender in connection with this
Agreement or any of the foregoing Instruments, whether or not specifically
identified in this clause, as any of the foregoing may be amended, modified,
supplemented, extended, revised or restated from time to time in accordance with
their respective terms.

 

“Losses” has the meaning specified in Section 10.5.

 

“Market Price” means an amount equal to the VWAP for the Shares for the twenty
(20) Trading Days immediately preceding any date of determination.

 

“Master Agreement” means any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement, together with any
related schedules.

 

“Material Adverse Effect” means, with respect to any Person, an effect,
resulting from any event or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), which:

 

(a)                                 is materially adverse to the consolidated
business, assets, revenues, financial condition, operations or prospects of such
Person;

 

(b)                                 is materially adverse to the ability of such
Person to make any payment or perform any other material obligation required
under any Material Agreement, this Agreement, or any other Loan Document;

 

(c)                                  is materially adverse to any Material
Project; or

 

(d)                                 in the case of any Credit Party, results in
a liability or obligation (other than Permitted Liens or performing or entering
into contractual commitments in the ordinary course of business which are not in
default) of Six Hundred Thousand Dollars ($600,000) or more.

 

“Material Agreements” means the contracts, agreements, leases, Instruments and
other binding commitments and undertakings of any Credit Party or any Subsidiary
thereof which are identified in Schedule 1.1(d), and all other contracts,
agreements, leases, Instruments and other binding commitments and undertakings
of any Credit Party or any Subsidiary thereof the performance or breach of which
could reasonably be expected to have a Material Adverse Effect on a Credit
Party, including all agreements and Instruments for the sale, transfer or other
disposition minerals produced from any Project.

 

“Material Projects” means the following Projects: (i) Kingsville Dome;
(ii) Rosita; (iii) Churchrock Section 8; (iv) Churchrock Section 17;
(v) Churchrock Mancos; (vi) Crownpoint; (viii) Roca Honda; (ix) West Largo; and
(x) Cibola.

 

“Maturity Date” means the first to occur of (a) the Scheduled Maturity Date, or
(b) the date on which the Lender elects to accelerate the due date of the Loan
based upon the occurrence

 

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of a Repayment Event, as provided in Section 3.2(c), or (c) any date on which
the Lender accelerates the due date of the Loan by reason of an Event of Default
pursuant to Section 9.2.

 

“Metals” means uranium (U308), uranium loaded resins, yellowcake, uranium
concentrate, and other uranium products and derivatives as well as all gold,
silver, copper, lead, zinc, nickel, molybdenum, and other metals, minerals, ores
and similar substances.

 

“Month” means a calendar month.

 

“NASDAQ” means The NASDAQ Capital Market and its successors.

 

“Notice of Borrowing” means a request by the Borrower for a Loan pursuant to
Section 2.2, which shall include the information referenced in Section 2.2
together with such other information requested by the Lender, substantially in
the form of Exhibit B hereto.

 

“Obligations” means all duties, covenants, agreements, liabilities, indebtedness
and obligations of the Borrower and each Guarantor with respect to the
repayment, payment or performance of all Indebtedness, liabilities and
obligations (monetary or otherwise) of the Borrower, each Guarantor and each
Subsidiary of a Guarantor, whenever arising, whether primary, secondary, direct,
contingent, fixed or otherwise, and whether joint, several, or joint and
several, established by or arising under or in connection with this Agreement or
any other Loan Document, including, in each case, the payment of principal,
interest, fees, expenses, reimbursements and indemnification obligations.

 

“Other Taxes” has the meaning specified in Section 3.6(b).

 

“Party” or “party” means each party to this Agreement.

 

“Permitted Liens” means the Liens identified in Schedule 6.1(j) and the Liens
permitted by Section 8.2.

 

“Permitted Third Party” has the meaning specified in Section 7.13.

 

“Person” means an individual, partnership, corporation (including a business
trust), joint venture, limited liability company or other entity, or a
Governmental Authority.

 

“Prepayment Date” has the meaning specified in Section 3.2(d).

 

“Private Placement Shares” has the meaning specified in Section 2.8.

 

“Projects” means, collectively, each of the following Projects: (i) Kingsville
Dome; (ii) Rosita; (iii) Vasquez; (iv) Los Finados; (v) Churchrock Section 8;
(vi) Churchrock Section 17; (vii) Churchrock Mancos; (viii) Crownpoint;
(ix) Unit 1; (x) Nose Rock; (xi) Roca Honda; (xii) West Largo; (xiii) Cebolleta;
(xiv) Juan Tafoya; (xv) Elizabeth; (xvi) Deep Rock; (xvii) West Endy;
(xviii) West Ranch; (xix) Mesa Redonda; (xx) Hogan and Rio Puerco; (xxi) Dewey
Burdock; (xxii) Edgemont; (xxiii) Copper Mountain; and (xxiv) Breccia Pipes, as
each such Project is further described in Schedule 1.1(c) hereto, together with
all Properties associated with or forming part of such Project.

 

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“Project Permits” has the meaning specified in Section 6.1(s).

 

“Promissory Note” means the senior, secured promissory note made by the Borrower
payable to the order of the Lender in the principal amount of Five Million
United States Dollars (US$5,000,000), substantially in the form of Exhibit E
hereto, as such promissory note may be amended, modified, supplemented,
extended, renewed, restated or replaced from time to time.

 

“Properties” means all real property rights, titles and interests, whether
surface, subsurface, mineral, water or otherwise, and all fee interests,
patented mining claims, unpatented mining claims, state leases, provincial
leases, federal leases, private leases, other mineral or surface leases, rights
of use, access rights, concessions, licenses, claims, rights, titles or
interests, and all related, associated or appurtenant rights, in each case
howsoever characterized or designated, that are owned, leased, held, or
controlled, directly or indirectly by a Credit Party or by a Subsidiary of a
Credit Party, with such rights, titles and interests described with respect to
each Project in Schedule 1.1(f), together with all right, title and interest
hereafter acquired by any Credit Party or Subsidiary of a Credit Party in or
adjacent to the interests described in Schedule 1.1(f) and the lands subject to
any Instrument identified in Schedule 1.1(f).

 

“Quarterly Date” means each December 31, March 31, June 30 and September 30 of
each Year.

 

“Registration Rights Agreements” means that certain Registration Rights
Agreement dated as of March 1, 2012 between the Borrower and the Lender, as the
foregoing may be amended, modified, supplemented, extended or restated.

 

“Repayment Event” means the occurrence of any one of the following at any time
prior to the Maturity Date, which has not been approved in advance by the
Lender: (a) the sale, assignment, transfer or other disposition by a Credit
Party, directly or indirectly, in one or more transactions, of any interest in
any Material Project, which is greater than twenty-five percent (25%) of such
Credit Party’s aggregate right, title or interest therein as of the Closing
Date; (b) the entry by any Credit Party into a partnership, limited liability
company, joint venture or other cooperative arrangement with one or more third
Persons, which has the effect or is intended to have the effect of granting to
any such Person or Persons, directly or indirectly, the right to own, or right
to acquire, more than twenty-five percent (25%) of a Credit Party’s right to
manage and operate any Material Project or of a Credit Party’s aggregate right,
title or interest in any Material Project; (c) the sale, assignment, transfer or
other disposition by a Credit Party, directly or indirectly, of the right to
manage and operate any Material Project; (d) the entry into or grant of any
Royalty, Streaming Transaction, offtake agreement, supply agreement, sales
agreement or other Instrument relating to the sale, conveyance, transfer or
grant of an interest in Metals produced at or from any Material Project; or
(e) the agreement by a Credit Party to enter into or undertake any of the
foregoing or to enter into an agreement with respect to the foregoing.

 

“Representative” means any director, officer, partner, manager, employee, agent,
consultant, advisor, accountant, financial advisor, legal counsel or other
representative of a Person.

 

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“Rights Offering” means the Equity Financing scheduled to be completed within
sixty (60) calendar days of the Shareholder Approval referenced in
Section 7.19(c), and in any event by no later than March 31, 2013, with gross
proceeds of not more than Thirteen Million Dollars ($13,000,000).

 

“Royalty” means any share of mineral production, including a gross smelter
return royalty, net smelter return royalty, overriding royalty,
non-participating royalty, production payment, net profit interest, gross
proceeds royalty and all other mineral royalties of every type and
characterization.

 

“Scheduled Maturity Date” means the earlier of (i) the date of the closing of
the Rights Offering and (ii) June 28, 2013.

 

“Securities Laws” means all Governmental Requirements applicable to Equity
Interests and the issuance of Equity Interests and the respective rules and
regulations applicable thereto together with all binding policy statements,
national instruments, orders, blanket rulings, mandatory guidelines and other
applicable regulatory acts and instruments, together with all regulations,
policies, rules or requirements imposed by any applicable securities exchange,
trading platform or other similar Person.

 

“Security Agreements” means (i) a security agreement given by a Credit Party for
the benefit of the Lender, substantially in the form of Exhibit C hereto,
(ii) each other Instrument whereby a Credit Party subordinates its rights to
receive payment of any amounts from any other Credit Party to the complete
payment in full of the Obligations, and (iii) any other security agreement or
other Instrument by which the Lender obtains a Lien in or on any personal
property or assets of a Credit Party to secure the Obligations, together with
all amendments, modifications, supplements, extensions, revisions and
restatements thereof in accordance with its terms.

 

“Security Documents” means, initially, each Guarantee and each Security
Agreement, together, in each case, with all amendments, modifications,
supplements, extensions, revisions and restatements thereto or thereof in
accordance with their respective terms, all schedules and exhibits attached
thereto and all financing statements, personal property security act filings and
other Instruments required to be filed or recorded or notices required to be
given in order to authenticate and perfect the Liens created by the foregoing
and all other Instruments now or hereafter delivered by any Credit Party to the
Lender in connection with this Agreement or any transaction contemplated hereby
to secure the payment or performance of the Obligations.

 

“Shareholder Approval” means approval by the shareholders of the Borrower
obtained in accordance with applicable Securities Laws.

 

“Shareholder Meeting” means a general or special meeting of the holders of
Shares.

 

“Shares” means the common shares of the Borrower with a par value of $0.001.

 

“Stockholders’ Agreement” means that certain Stockholders’ Agreement dated as of
March 1, 2012 between the Borrower and the Lender, as the foregoing may be
amended, modified, supplemented, extended or restated.

 

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“Streaming Transaction” means a contractual right to purchase Metals (whether
all or any portion thereof) produced at or from one or more Projects.

 

“Subsidiary” means, in respect of any Person at any date, (i) any corporation,
company, limited liability company, association, joint venture or other business
entity of which securities, membership interests or other ownership interests
representing fifty percent (50%) or more of the voting power of all equity
interests are owned or held, directly or indirectly, by such Person, (ii) any
partnership, limited liability company or joint venture wherein the general
partner, managing partner or operator is, directly or indirectly, such Person,
or (iii) any other Person that is otherwise directly or indirectly Controlled by
such Person.

 

“Taxes” has the meaning specified in Section 3.6(a).

 

“Tradable Shares” means Shares that are fully paid, duly issued and
non-assessable; shall be evidenced by original certificates issued by the
Borrower reflecting the Lender as the owner thereof; shall be free of Liens or
other claims of rights or interests by third Persons therein; shall be free of
contractual restrictions or obligations; shall be covered by and subject to the
Registration Rights Agreement; and upon registration in accordance with the
Registration Rights Agreement, such Shares shall be freely transferrable in
accordance with Securities Laws on a public stock exchange of recognized
standing.

 

“Trading Day” means a day on which the public stock exchange on which the Shares
are principally traded is open and on which Shares are traded.

 

“United States Dollars” and the symbol “US$” or the symbol “$” each mean dollars
in lawful currency of the United States of America.

 

“VWAP” means Volume-Weighted Average Price, being the price per Share calculated
by dividing (x) an amount equal to the total value of Shares traded during a
particular time period, by (y) an amount equal to the total volume of Shares
traded over that particular time period, which shall be based on the price and
volume quotes provided by NASDAQ or such other applicable public stock exchange
and published by Bloomberg, which amount shall be calculated by the Lender and
deemed to be accurate absent manifest error.

 

“Work Program and Budget” means the detailed twelve-month work program for the
exploration, development, management and operation of the Projects scheduled to
be undertaken by the Credit Parties using the proceeds of the Loan, and the
detailed budget relating to such activities as well as to all other general,
administrative and others costs and expenses of the Credit Parties, as such work
program and budget is updated, revised and amended from time to time with the
consent of the Lender; the Work Program and Budget in effect as of the date
hereof, which has been duly adopted by board of directors of each of the Credit
Parties and approved by the Lender, is attached as Schedule 1.1(g) hereto.

 

“Year” means a calendar year.

 

1.2                               Accounting Principles.  All accounting terms
not otherwise defined herein shall be construed, all financial computations
required under this Agreement shall be made, and all financial information
required under this Agreement shall be prepared, in accordance with

 

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GAAP applied on a basis consistent with the financial statements referred to in
Section 6.1(g) except as specifically provided herein.

 

1.3                               Other Definitional Provisions; Date and Time
References.

 

(a)                                 Unless otherwise specified therein, all
terms defined in this Agreement shall have the defined meanings when used in the
Schedules, the other Loan Documents and any certificate or other document made
or delivered pursuant hereto.

 

(b)                                 The words “hereof”, “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section, subsection, Schedule and Exhibit references are to this Agreement
unless otherwise specified.

 

(c)                                  The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms.

 

(d)                                 The word “including” means “including
without limitation” or “including, but not limited to,” and does not create or
denote a limitation.

 

(e)                                  Unless otherwise expressly indicated, each
reference to a time or date in any Loan Document shall be to the date and time
in Denver, Colorado, United States of America.

 

1.4                               Currency Conversions.  For purposes of
application of the provisions of this Agreement and the other Loan Documents,
United States Dollars, Canadian Dollars and any other relevant currency amounts
will be calculated and converted by the Lender, acting in good faith, by
reference to the Exchange Rate.

 

ARTICLE 2

 

COMMITMENT; USE OF PROCEEDS; FEES; FUTURE EQUITY FINANCINGS

 

2.1                               Commitment.  Subject to all of the terms and
conditions of this Agreement and subject to the satisfaction of the conditions
precedent set forth herein, the Lender agrees to advance the Loan to the
Borrower in one advance.  Any part of the Loan that has been repaid by the
Borrower may not be re-borrowed and shall not be re-advanced to the Borrower.

 

2.2                               Borrowing Procedure and Funding.

 

(a)                                 The Borrower shall request the Loan by
delivering to the Lender a written Notice of Borrowing signed by the Borrower,
which shall be delivered to the Lender by no later than ten (10) Business Days
(or such shorter period as may be agreed by the Lender) prior to the date of the
requested borrowing (the “Borrowing Date”).  The Notice of Borrowing shall be
irrevocable and shall specify: (i) that the Loan is requested by the Borrower,
(ii) the Borrowing Date (which shall be a Business Day not less than ten
(10) Business Days after delivery, or such shorter period as may be agreed by
the Lender), and (iii) such other information and certifications as set forth in
the form of Notice of Borrowing and as the Lender shall otherwise have
reasonably requested.

 

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(b)                                 Subject to the satisfaction of the
conditions precedent set forth in Article 5, the Lender shall disburse the
proceeds of the Loan to the Borrower by the deposit of funds directly to the
Borrower’s Account.

 

2.3                               Loan Amount.  The Loan shall be advanced in a
single advance of Five Million United States Dollars (US$5,000,000).  No Loan
shall be advanced if a Default or Event of Default has occurred and is
continuing (unless the Lender, in its sole discretion, has waived the relevant
Default or Event of Default for the purpose of advancing the Loan).

 

2.4                               Repayment.  The principal amount of the Loan,
together with interest thereon and all fees, costs and other amounts then owing,
shall be due and payable in full on the Maturity Date.  The Borrower covenants
and agrees to repay the Loan, together with interest thereon, in accordance with
the terms of this Agreement.

 

2.5                               Use of Proceeds.  The Borrower will utilize
the Loan solely for general working capital purposes in accordance with the Work
Program and Budget, and the Borrower agrees to cause the other Credit Parties to
utilize the Loan proceeds solely for the foregoing purpose.

 

2.6                               Establishment Fee.  The Borrower agrees to pay
the Lender a fee for the establishment of the credit facility (the
“Establishment Fee”) in the amount of One Hundred Sixty Thousand United States
Dollars (US$160,000) payable in immediately available funds, or, at the option
of the Lender, in Tradable Shares, which shall be delivered to the Lender by no
later than the tenth (10th) Business Day following the Closing Date.  The number
of Tradable Shares which are required to be delivered by the Borrower to the
Lender in satisfaction of payment of the Establishment Fee shall be determined
by the Lender by dividing (i) the Dollar amount of the Establishment Fee, by
(ii) the Market Price on November 30, 2012.  The entire Establishment Fee is
earned in full as of the Closing Date.  No portion of the Establishment Fee is
refundable to the Borrower, in whole or in part, under any circumstance.

 

2.7                               Lender Participation in Equity Financings.  In
consideration of the commitment of the Lender to make the Loan, the Credit
Parties hereby irrevocably grant to the Lender the option and right, at any time
and from time to time in the Lender’s sole discretion, so long as the Lender or
any of Lender’s Affiliates, successors or related investment funds managed by
RCF Management LLC holds any Shares or is a creditor of any Credit Party, to
participate or to nominate any of the Lender’s Affiliates, successors or related
investment funds managed by RCF Management LLC to participate in any Equity
Financing, at the same price and on the same terms and conditions as offered to
other investors in such Equity Financing, such participation to be on a pro rata
basis as determined on a partially-diluted basis by reference to the Lender’s
percentage interest in the Shares that the Lender holds or shall be deemed to
hold at the time when an offer of participation is made, such that the Lender
may maintain its partially-diluted percentage interest in the Shares, such right
to be open for acceptance by the Lender for a period of twenty (20) Business
Days from the date upon which Lender receives notice of the Equity Financing. 
The Lender shall have the option and right, but no obligation or requirement, to
participate in any such Equity Financing.  If the Lender elects to participate
in such Equity Financing, the Lender shall participate in such Equity Financing
on the same terms and conditions as other participants in such Equity Financing.
Each Credit Party agrees to take any and all action and to obtain any and all
approvals and consents, or to cause such action to be

 

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taken and such approvals and consents to be obtained, as is necessary or
appropriate to allow the Lender to fully participate in any Equity Financing in
accordance with the provisions of this paragraph.

 

2.8                               Private Placement of Shares.  Solely in the
event that there are insufficient subscription rights available to the Lender
(whether by exercise of its basic subscription right or its over-subscription
privilege) to purchase $5,000,000 of Shares in the Rights Offering, immediately
following the closing of the Rights Offering, the Borrower shall issue in a
private placement to Lender, and the Lender shall subscribe for, that number of
Shares equal to (i) (a) $5,000,000, minus (b) the aggregate subscription price
paid by the Lender in the Rights Offering for Shares purchased therein, divided
by (ii) the subscription price per whole Share set forth in the Rights Offering
(such Shares, the “Private Placement Shares”). The Private Placement Shares
shall be issued at a price per Share equal to the subscription price per whole
Share set forth in the Rights Offering.

 

2.9                               No Fees or Commissions.  Neither the Borrower
nor any other Credit Party has incurred, nor will they incur, directly or
indirectly any liability for brokerage or finder’s fees or agent’s commissions
or any similar charges or fees in connection with this Agreement or the issuance
of any Shares to the Lender contemplated hereby.

 

2.10                        NASDAQ Compliance.  Notwithstanding any other
provision of this Agreement, the Parties hereto agree that the number of Shares
issued to the Lender with respect to payment of the Establishment Fee by the
delivery of Shares, payment of interest on the Loan by the delivery of Interest
Shares, the exercise by the Lender of its Equity Interest participation rights
granted and set forth in Section 2.7 or the issuance of the Private Placement
Shares shall not exceed, and shall be capped at, 19.99% of the total number of
Shares outstanding prior to giving effect to any such issuance of Shares, unless
or until Shareholder Approval has been obtained.  If the issuance of Shares to
the Lender pursuant to any of the foregoing would result in the issuance of a
number of Shares equal to or greater than 20% of the total number of Shares
outstanding prior to giving effect to any such issuance of Shares, then: (a) the
Borrower shall first issue that number of Shares to the Lender which will result
in the aggregate number of Shares being issued to the Lender being equal to
19.99% of the total number of Shares outstanding prior to giving effect to such
issuance of Shares; and (b) the Lender shall, at its sole discretion, notify the
Borrower that the Borrower shall either (i) satisfy any remaining and unpaid
Obligation by the payment to the Lender of sufficient immediately available
funds in accordance with Section 3.4, or (ii) promptly call and hold a
Shareholder Meeting to obtain Shareholder Approval for the issuance of Shares to
the Lender in excess of 19.99% of the total number of Shares outstanding prior
to giving effect to such issuance of Shares, which Shareholder Meeting shall be
called and held in accordance with Section 7.19(e).

 

2.11                        Legend on Share Certificates.  The Lender consents
to the placement of a legend on any certificate or other document evidencing the
Shares issued pursuant to this Agreement substantially as set forth below, that
such Shares have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”) or any state securities or “blue sky” laws and
setting forth or referring to the restrictions on transferability and sale
thereof contained in this Agreement.  The Lender is aware that the Borrower will
make a notation in its appropriate records with respect to the restrictions on
the transferability of the Shares.

 

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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”) OR UNDER ANY BLUE SKY” OR STATE SECURITIES
LAWS, AND THE SECURITIES MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

 

2.12                        Anti-Dilution Rights.  The Market Price and all
Shares to be delivered to the Lender hereunder, whether as Interest Shares or
otherwise, shall be adjusted to prevent dilution and to reflect changes in the
Borrower’s capital structure, as further described in Schedule 2.10.

 

ARTICLE 3

 

PROCEDURE AND PAYMENT

 

3.1                               Interest.

 

(a)                                 General.  Interest on the Loan shall accrue
and shall be payable by the Borrower at the Applicable Interest Rate.  On each
Interest Payment Date, the Borrower shall pay interest on the Loan with respect
to each quarterly period ending on the Quarterly Date immediately prior to such
Interest Payment Date at a rate of interest per annum equal to the Applicable
Interest Rate based on a 360-day year.  Interest accruing at the Default Rate
shall be payable on demand.  Accrued but unpaid interest shall be payable in
full on the Maturity Date.

 

(b)                                 Default Interest.  Interest on the Loan
shall accrue and shall be payable by the Borrower at the Default Rate during all
periods when any amounts payable by the Borrower as principal repayments,
interest payments, expense payments or other amounts are due and payable
hereunder, whether by acceleration or otherwise, but remain unpaid by the
Borrower.  Without prejudice to the rights of the Lender under the preceding
sentence, the Borrower shall indemnify the Lender against any direct loss or
expense which the Lender may sustain or incur as a result of the failure by the
Borrower to pay the Loan when due.  A certificate or other notice of the Lender
submitted to the Borrower setting forth the basis for the determination of
Default Rate interest due and of the amounts necessary to indemnify the Lender
in respect of such loss or expense, shall constitute evidence of the accuracy of
the information contained therein in the absence of error and, absent notice
from the Borrower of such error, shall be conclusive and binding for all
purposes.  Interest accruing at the Default Rate shall be payable on demand in
immediately available funds in United States Dollars.

 

(c)                                  Payment of Interest by Delivery of Shares. 
Provided that no Default or Event of Default has occurred and remains
outstanding, the Borrower shall pay interest on the Loan by delivery of Tradable
Shares (the “Interest Shares”) to the Lender on each Interest Payment Date.  At
the option of the Lender in its sole discretion, as evidenced by a written
notice

 

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thereof delivered to the Borrower within three (3) Business Days prior to each
Quarterly Date immediately prior to such Interest Payment Date, the Borrower
shall pay interest on the Loan in United States Dollars.  The number of Interest
Shares which are required to be delivered by the Borrower to the Lender in
satisfaction of any interest payment payable by the delivery of Interest Shares
shall be determined by the Lender by dividing (i) the Dollar amount of the
interest on the Loan which is due as of the Quarterly Date immediately prior to
such Interest Payment Date, by (ii) the Market Price on such Quarterly Date
immediately prior to such Interest Payment Date.  Payment of interest shall be
deemed satisfied upon delivery to the Lender of the interest then due: (x) in
Dollars or (y) by the applicable number of Interest Shares, as directed by the
Lender, in either case, on or prior to the applicable Interest Payment Date.

 

(d)                                 Fractional Interests.  The Borrower shall
not be required to issue fractional Interest Shares upon payment of interest on
the Loan in Interest Shares.  If any fraction of a Share would, except for the
provisions of this Section 3.1(d), be issuable upon payment of interest on the
Loan in Interest Shares (or specified portion thereof), the Borrower shall issue
to the Lender one (1) share for a fraction of a Interest Share greater than or
equal to 0.50 and shall issue zero (0) shares for a fraction of a Interest Share
less than 0.50.

 

3.2                               Repayment of the Loan.

 

(a)                                 Principal Repayment.  The Loan shall be due
and payable in full on the Maturity Date.

 

(b)                                 Voluntary Prepayment.  Upon not less than
five (5) Business Days’ prior written notice to the Lender, the Borrower may at
any time prepay all or any portion of the Loan without penalty.  Upon the giving
of notice of prepayment, which shall be irrevocable, the prepayment, together
with all interest accrued through the prepayment date, shall be due and payable
on the date set forth therein.  Any such voluntary prepayment of the Loan shall
be in a minimum amount of One Million United States Dollars (US$1,000,000) or
(if lower) the full amount of the Loan then outstanding.  Amounts prepaid by the
Borrower may not be re-borrowed by the Borrower.

 

(c)                                  Mandatory Prepayment.

 

(i)                                     The Borrower will prepay the Loan or a
portion thereof as provided in this Section 3.2(c)(i) together with accrued
interest on such prepaid amount (A) in full upon acceleration of the due date
thereof pursuant to Section 9.2; and (B) in full on the repayment date specified
in a written notice received by the Borrower from the Lender stating that the
Lender requires the Loan to be repaid as a result of the occurrence of a
Repayment Event.

 

(ii)                                  Amounts prepaid by the Borrower may not be
re-borrowed by the Borrower.

 

(d)                                 Payment of Interest by Delivery of Shares. 
Provided that no Default or Event of Default has occurred and remains
outstanding, the Borrower shall pay interest accrued through such prepayment
date in Interest Shares.  At the option of the Lender in its sole discretion, as
evidenced by a written notice thereof delivered to the Borrower within three
(3) 

 

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Business Days prior to the date for prepayment set forth in Sections 3.2(b) or
3.2(c) above (the “Prepayment Date”), the Borrower shall pay interest associated
with such prepayment in Dollars.  The number of Interest Shares which are
required to be delivered by the Borrower to the Lender in satisfaction of any
interest payment payable by the delivery of Interest Shares shall be determined
by the Lender by dividing (i) the Dollar amount of the interest on the portion
of the Loan which is to be prepaid, by (ii) the Market Price as of the date
immediately prior to the Prepayment Date.  Payment of interest shall be deemed
satisfied upon delivery to the Lender of the interest then due: (x) in Dollars
on or prior to the Prepayment Date or (y) by the applicable number of Interest
Shares on or prior to the Prepayment Date, in each case in the form directed by
the Lender.

 

(e)                                  Illegality.  If the Lender shall notify the
Borrower that a Change in Law makes it unlawful, or that any central bank or
other Governmental Authority asserts that it is unlawful for the Lender to
perform its obligations under this Agreement to maintain any Loan of the Lender
then outstanding hereunder, the Borrower shall, no later than 11:00 a.m.
(Denver, Colorado time) on or before the date that is the earlier of (i) the
date that is thirty (30) days after such notice is provided, or (ii) the
earliest date required by applicable Governmental Requirements or Change in Law,
prepay all of the Loan made by the Lender then outstanding, together with
accrued interest on the principal amount prepaid to the date of such prepayment
and breakage fees, if any, required to be paid by the Lender as a result of such
prepayment being made on such date.

 

3.3                               Priority of Prepayments.  All prepayments made
by the Borrower shall be applied first to any amounts (other than principal or
interest) then payable by any Credit Party hereunder or under any other Loan
Documents, then to accrued and unpaid interest on the Loan so prepaid, then to
the principal amount of the Loan.

 

3.4                               Payments and Computations.  Except as
otherwise expressly provided in this Agreement, payments by the Borrower
pursuant to this Agreement or any other Loan Document, whether in respect of the
Loan, interest or otherwise (other than interest or fee payments made by
delivery of Shares), shall be made by the Borrower to the Lender not later than
12:00 noon (Denver, Colorado time) on the date due by delivery of United States
Dollars in immediately available funds to the Lender’s Account, or such other
account designated from time to time by notice from the Lender to the Borrower
in writing at least two (2) Business Days before any such due date.  Except as
otherwise expressly provided in this Agreement, payments by the Borrower
pursuant to this Agreement or any other Loan Document of interest, fees or other
amounts in Shares shall be made by the Borrower to the Lender not later than
12:00 noon (Denver, Colorado time) on the date due by delivery of one or more
duly authorized and issued Share certificates evidencing the number of Shares
then due, issued in the name of the Lender or such Affiliate of the Lender as
designated by the Lender in writing.  All payments under this Agreement to be
made by the delivery of Shares shall be made by the delivery of Tradable
Shares.  All decisions with respect to the payment of interest, fees or other
amounts under this Agreement by either (i) the delivery of Tradable Shares, or
(ii) the payment of immediately available funds, shall be made by the Lender in
its sole discretion.  For the purposes of converting any amount from or into
United States Dollars or any other currency, the parties shall use the Exchange
Rate.  All payments hereunder, whether by delivery of Shares or of United States
Dollars, shall be made by the Borrower without set off, deduction, withholding
or counterclaim not later than on the date

 

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when due.  Any payments received hereunder after the time and date specified in
this Section 3.4 shall be deemed to have been received by the Lender on the next
following Business Day.  All interest shall be computed on the basis of the
actual number of days (including the first day but excluding the last day)
occurring during the period for which such interest is payable over a year
comprised of three hundred sixty (360) days.  Whenever any payment to be made
hereunder shall otherwise be due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall be included in computing interest, if any, in connection with such
payment.

 

3.5                               Increased Costs.

 

(a)                                 Increased Costs Generally.  If any Change in
Law shall:

 

(i)                                     impose, modify or deem applicable any
reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, the Lender;

 

(ii)                                  subject the Lender to any Taxes and Other
Taxes payable by the Lender (other than Excluded Taxes) with respect to this
Agreement or any Loan made by it, or change the basis of taxation of payments to
the Lender or the Issuing Lender in respect thereof; or

 

(iii)                               impose on the Lender any other condition,
cost or expense affecting this Agreement or Loan made by the Lender;

 

and the result of any of the foregoing shall be to increase the cost to the
Lender of making or maintaining any Loan (or of maintaining its obligation to
make any such Loan), or to reduce the amount of any sum received or receivable
by the Lender hereunder (whether of principal, interest or any other amount)
then, upon request of the Lender, the Borrower will pay to the Lender such
additional amount or amounts as will compensate the Lender for such additional
costs incurred or reduction suffered. The Lender agrees to use reasonable
efforts to avoid or to minimize any amounts which might otherwise be payable
pursuant to this Section 3.5, at the cost and expense of the Borrower.

 

(b)                                 Certificates for Reimbursement.  A
certificate of an authorized officer of the Lender setting forth the amount or
amounts necessary to compensate the Lender or the Lender’s Affiliate, as the
case may be, as specified in paragraph (a) of this Section 3.5 and delivered to
the Borrower shall be conclusive absent manifest error.  The Borrower shall pay
the Lender the amount shown as due on any such certificate within ten
(10) Business Days after receipt thereof.  Contemporaneously with such
certificate the Lender shall provide the Borrower with reasonable supporting
evidence of the amounts claimed to be due from the Borrower to the Lender and
the steps Lender took to minimize such amounts.

 

(c)                                  Delay in Requests.  Failure or delay on the
part of the Lender to demand compensation pursuant to this Section 3.5 shall not
constitute a waiver of the Lender’s right to demand such compensation; provided
that the Borrower shall not be required to compensate the Lender pursuant to the
foregoing provisions of this Section 3.5 for any increased costs incurred or
reductions suffered more than six months prior to the date that the Lender
notifies the

 

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Borrower of the Change in Law giving rise to such increased costs or reductions
and of the Lender’s intention to claim compensation therefor (except that, if
the Change in Law giving rise to such increased costs or reductions is
retroactive, then the six-month period referred to above shall be extended to
include the period of retroactive effect thereof).

 

3.6                               Taxes.

 

(a)                                 General.  Any and all payments and the
delivery of any and all certificates, Shares, securities or other property or
consideration by the Borrower or any other Credit Party hereunder shall be made
in full, free and clear of and without deduction or withholding for any and all
present or future taxes, levies, duties, imposts, assessments, deductions,
charges, withholdings or other similar amounts, and all liabilities with respect
thereto imposed on the Borrower or any Credit Party, other than Excluded Taxes
(all such non-excluded taxes, levies, duties, imposts, assessments, deductions,
charges, withholdings and liabilities being hereinafter referred to as
“Taxes”).  If the Borrower or any other Credit Party shall be required by law to
deduct or withhold any Taxes from or in respect of any such payment,
certificate, Share, security or other property or consideration payable or
deliverable hereunder to the Lender, (i) the sum payable and the certificates,
Shares, securities and other property or consideration so deliverable shall,
subject to applicable law, be increased as may be necessary so that after making
all required deductions and withholdings (including deductions and withholdings
applicable to additional sums, certificates, Shares, securities and other
property or consideration payable or deliverable under this Section 3.6) the
Lender receives an amount and certificates, Shares, securities and other
property or consideration as the case may be equal to the amount and
certificates, Shares, securities and other property or consideration it would
have received had no such deductions or withholdings been made, (ii) the
Borrower or the Credit Party shall make such deductions or withholdings and
(iii) the Borrower or other Credit Party shall pay the full amount required to
be deducted or withheld to the relevant taxation authority or other authority in
accordance with applicable law and within the time for payment prescribed by
applicable law.  If the Lender receives a credit against Excluded Taxes for any
amounts deducted or withheld, the Lender shall deliver to the Borrower the
amount of such credit.

 

(b)                                 Other Taxes.  In addition, the Borrower
agrees to pay any present or future stamp, sales, use or documentary taxes or
any other excise or property taxes, charges, duties or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, any of the Loan
Documents, or any Instrument contemplated thereby (hereinafter referred to as
“Other Taxes”), other than Excluded Taxes.

 

(c)                                  Tax Indemnity.  The Borrower hereby
indemnifies the Lender for, and agrees to hold the Lender harmless from, the
full amount of all Taxes and Other Taxes payable by the Lender (other than
Excluded Taxes) and any liability, cost or amount (including penalties, interest
and expenses) arising therefrom or with respect thereto.

 

(d)                                 Payment of Taxes.  Within thirty (30) days
after the date required for payment of any Taxes or Other Taxes required to be
deducted or withheld by the Borrower in respect of any payment or delivery to
the Lender, the Borrower will furnish to the Lender a form of evidence of
payment thereof acceptable to the Lender in its sole discretion, acting
reasonably.

 

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(e)                                  Survival.  Without prejudice to the
survival of any other agreement hereunder, the agreements and obligations
contained in this Section 3.6 shall survive the payment in full of the Loan,
interest thereon and any other amounts due hereunder.

 

(f)                                   Further Assurances.  After receipt from
the Borrower of each payment made pursuant to this Section 3.6, the Lender
shall, if reasonably requested by the Borrower and at the Borrower’s cost and
expense, submit and pursue any necessary applications to obtain any refund,
credit, allowance, remission or deduction from income otherwise determined or
tax otherwise payable, to which the Lender may be entitled from the taxation
authorities of any relevant taxing jurisdictions in respect of any payment of
Taxes or Other Taxes referred to in this Section 3.6.  If any such refund shall
be received or due payment of tax reduced by reason of such refund, credit,
allowance, remission or deduction, the Lender shall, to the extent that it can
do so without prejudice to its ability to retain the amount of such refund,
credit, allowance, remission or deduction, promptly notify the Borrower thereof
and account to the Borrower for an amount equal to the refund received or
credit, allowance, remission or deduction given.

 

3.7                               Usury.  If any provision of this Agreement
would oblige the Borrower to make any payment of interest or other amount
payable to the Lender in an amount or calculated at a rate which would be
prohibited by law or would result in a receipt by that Lender of “interest” at a
“criminal rate” or a “usurious rate”, then, notwithstanding such provision, such
amount or rate shall be deemed to have been adjusted with retroactive effect to
the maximum amount or rate of interest, as the case may be, as would not be so
prohibited by law or so result in a receipt by the Lender of “interest” at a
“criminal rate” or a “usurious rate”, such adjustment to be effected, to the
extent necessary (but only to the extent necessary), as follows:

 

(a)                                 first, by reducing the amount or rate of
interest; and

 

(b)                                 thereafter, by reducing any fees,
commissions, costs, expenses, premiums and other amounts required to be paid to
the Lender which would constitute interest under applicable Governmental
Requirements.

 

ARTICLE 4

 

COLLATERAL SECURITY

 

4.1                               Security Documents.  As security for the due,
prompt and complete repayment of the Loan and the payment of all other amounts
due hereunder, and for the prompt and complete performance of all other
Obligations, the Credit Parties shall execute and deliver to the Lender the
Security Documents to which each of them is a party, in each case as and when
contemplated by this Agreement or any other Loan Document.

 

4.2                               Recordings and Filings of Security Documents. 
The Lender will record, register or file with or deliver to appropriate
Governmental Authorities, account debtors or other Persons, the Security
Documents, as necessary or appropriate, at the Borrower’s expense, together with
all other Instruments necessary to establish, attach, protect or perfect the
Liens of the Lender, each with the Agreed Priority over all other security
interest holders and mortgages.

 

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4.3                               Protection of Security Document Liens.  Each
Credit Party hereby authorizes the Lender to file such financing statements and
other agreements, documents, registrations, filings or Instruments with such
Governmental Authorities in such jurisdictions as it reasonably determines to be
desirable and to take such other actions as the Lender determines to be
necessary or desirable to legalize, authenticate, protect, perfect and maintain
the perfection of the Liens in the Collateral identified in the Security
Documents.  The Credit Parties agree to cooperate with the Lender in delivering
all share certificates and other certificates, if any, of Equity Interests
pledged pursuant to a Security Document and in undertaking and completing all
recordings, filings, registrations and other actions required in connection with
the Security Documents, and the Credit Parties further agree to promptly take
all such other actions as the Lender may reasonably determine to be necessary or
appropriate to confirm, perfect, maintain and protect the perfection of the
Liens granted by the Security Documents.

 

4.4                               Security Documents.  Each Credit Party hereby
agrees that notwithstanding any provision of any other Loan Document to the
contrary, the Liens created pursuant to the Security Documents shall secure all
Obligations.  The Security Documents create valid security interests in, and
Liens on, the Collateral purported to be covered thereby, which security
interests and Liens are currently perfected security interests and Liens, or
will be perfected security interests and Liens in accordance with the
requirements specified in such Security Documents or elsewhere in this
Agreement, each with the Agreed Priority.

 

4.5                               Right of Set-off.  Upon the occurrence and
during the continuance of any Event of Default, the Lender is hereby authorized
at any time and from time to time, without notice to the Borrower or any other
Credit Party (any such notice being expressly waived by the Borrower and the
other Credit Parties), to set off and apply any and all deposits (general or
special, time or demand, provisional or final), at any time held and other
indebtedness at any time owing by the Lender to or for the credit or the account
of any Credit Party against any and all of the Obligations of any Credit Party
now or hereafter existing, although such Obligations may be contingent and
unmatured.  The Lender agrees promptly to notify the Borrower and the
appropriate Credit Party after any such set-off and application, provided that
the failure to give such notice shall not affect the validity of such set-off
and application.  The rights of the Lender under this Section 4.5 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Lender may have.

 

4.6                               Subordination of Certain Liens.  The Lender
agrees to subordinate its Liens on the Collateral on terms and conditions
acceptable to the Lender to be contained in a written subordination agreement
reasonably acceptable to the Lender, and which terms will specifically not
include any agreement on the part of the Lender to forego, delay or postpone
payments due to the Lender (whether for principal, interest or other amounts),
to Liens in favor of a third Person or Persons providing bona fide Debt
Financing to a Credit Party to the extent reasonably necessary for the
development and operation of a Project.  The provisions of this
Section 4.6(b) pertain only to subordination by the Lender of its Liens with
respect to the Collateral pertaining to a Project and the priority thereof and
do not obligate the Lender to subordinate its rights to receive payments of
principal, interest, fees and other amounts due hereunder as and when such
amounts are or become due or to otherwise demand and obtain full performance of
the Obligations.

 

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ARTICLE 5

 

CONDITIONS PRECEDENT

 

5.1                               Conditions Precedent to the Loan.  The
obligation of the Lender to advance the Loan is subject to satisfaction (or
waiver by the Lender in its sole discretion) of each of the following conditions
precedent.

 

(a)                                 The Lender or its counsel shall have
received the following, with each Instrument dated on or no more than three
(3) days prior to the date of the proposed Loan (or as otherwise agreed by the
Lender), and in form and substance as shall be satisfactory to the Lender:

 

(i)                                     this Agreement, duly executed by the
Borrower and the applicable Credit Parties;

 

(ii)                                  the Promissory Note, duly executed by the
Borrower, payable to the order of the Lender;

 

(iii)                               each of the Security Documents, each duly
executed by the applicable Credit Party, together with any financing statements,
filings or other Instruments for filing or registration, notarizations thereof,
notices with respect thereto or other Instruments, including applicable estoppel
letters, determined by the Lender, acting reasonably, to be necessary or
desirable to establish, maintain and perfect the Liens established pursuant to
the Security Documents;

 

(iv)                              to the extent not specifically referenced,
each other Loan Document, duly executed by the applicable Credit Party or its
Subsidiaries, as appropriate;

 

(v)                                 an Omnibus Certificate for each Credit
Party, duly executed by an officer thereof, substantially in the form of
Exhibit A hereto;

 

(vi)                              a Notice of Borrowing, duly executed by an
officer of the Borrower, substantially in the form of Exhibit B hereto;

 

(vii)                           a certificate for each Credit Party from its
jurisdiction of incorporation or organization confirming the due organization
and good standing of such Credit Party in such jurisdiction, as applicable;

 

(viii)                        an opinion of legal counsel to the Credit Parties,
in form and substance acceptable to the Lender, acting reasonably;

 

(ix)                              security legal opinions from legal counsel to
each Credit Party, in form and substance acceptable to the Lender, pertaining to
the validity of the Security Documents and the security interests granted
thereby and the perfection of such security interests;

 

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(x)                                 accurate and complete copies of the
financial statements of the Credit Parties referred to in Section 6.1(g);

 

(xi)                              evidence satisfactory to the Lender that all
Shares issuable pursuant to this Agreement have been authorized for issuance and
all provisions pertaining to the issuance of Shares to the Lender contained in
this Agreement comply with applicable Governmental Requirements, including
applicable Securities Laws and that such issuance of Shares shall comply with
applicable Governmental Requirements, including applicable Securities Laws; and

 

(xii)                           all such other approvals, opinions, documents or
Instruments as the Lender may reasonably request.

 

(b)                                 all representations and warranties made by
the Credit Parties herein and in any other Loan Document shall be true and
correct;

 

(c)                                  all approvals, consents and authorizations
of Governmental Authorities or other Persons required in connection with this
Agreement and the other Loan Documents, if any, shall have been obtained and
remain in effect;

 

(d)                                 there shall be no pending or threatened (in
writing) action or proceeding before any Governmental Authority against or
affecting any Credit Party or any Project which could reasonably be expected to
have a Material Adverse Effect on any Credit Party;

 

(e)                                  the Borrower shall have delivered to the
Lender a copy of the current Work Program and Budget, which has been approved by
the Board of Directors of the Borrower and is in form and substance satisfactory
to the Lender;

 

(f)                                   since December 31, 2011, there shall have
been no change, event or occurrence that has had, or could reasonably be
expected to have, a Material Adverse Effect on any Credit Party or on any
Material Project;

 

(g)                                  the Lender shall have received, in form and
substance satisfactory to the Lender, search results from all relevant
jurisdictions wherein a Credit Party conducts business or owns property,
pertaining to all Lien filings, registrations and records appearing in such
jurisdiction, together with copies of any documents, filings and Instruments on
file in such jurisdictions;

 

(h)                                 all data, reports, maps, surveys, financial
statements, Instruments and other information requested by the Lender for its
due diligence shall have been provided, and the Lender shall have completed its
due diligence investigation of the Credit Parties and the Projects in scope, and
with results, satisfactory to the Lender;

 

(i)                                     the Lender shall have received all
internal investment committee approvals necessary to consummate the transactions
contemplated by this Agreement;

 

(j)                                    the Lender shall be satisfied with the
form of the Loan Documents;

 

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(k)                                 the Credit Parties shall have made all
public disclosures and submitted all applications, reports and information, and
taken all other actions necessary, to comply fully with applicable Securities
Laws, and the Lender shall have confirmed such compliance to its satisfaction;

 

(l)                                     each Credit Party has performed and
complied with all agreements and conditions herein and in the other Loan
Documents required to be performed and complied with on or prior to the date of
the proposed Loan, except those agreements and conditions waived by the Lender;

 

(m)                             no Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to such Loan;

 

(n)                                 there shall not exist any litigation,
investigation, bankruptcy or insolvency, injunction, order or claim affecting or
relating to any Credit Party or its Subsidiaries, or any Project, which has had,
or could reasonably be expected to have, a Material Adverse Effect, or which
could reasonably be expected to affect the legality, validity or enforceability
of this Agreement or any other Loan Document, that has not been settled,
dismissed, vacated, discharged or terminated; and

 

(o)                                 all such other approvals, opinions,
certificates, documents or Instruments as the Lender may reasonably request.

 

The Borrower’s tender of a Notice of Borrowing shall be deemed to constitute a
representation and warranty by the Borrower as of the date of the Loan that the
conditions precedent in paragraphs (a) through (o) of this Section 5.1 have
been, and remain, satisfied.

 

ARTICLE 6

 

REPRESENTATIONS AND WARRANTIES

 

6.1                               Representations and Warranties of the Credit
Parties.  Each of the Credit Parties, for itself and on behalf of each of its
Subsidiaries, hereby represents and warrants to the Lender as follows:

 

(a)                                 Qualification and Organization.  It has all
requisite corporate, partnership or limited liability company power and
authority to enter into this Agreement and the other Loan Documents to which it
is a party and to carry out the transactions contemplated hereby and thereby. 
It is otherwise duly qualified to do business as a foreign corporation or other
applicable entity in each jurisdiction where the nature of its business or
properties requires such qualification, except where the failure to obtain such
qualification could not reasonably be expected to result in a Material Adverse
Effect. It is a corporation, partnership or a limited liability company, duly
incorporated or organized (respectively), validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, as
applicable.

 

(b)                                 Subsidiaries.  Except as disclosed in
Schedule 6.1(b), the Credit Parties do not have any direct or indirect
Subsidiaries.  Schedule 6.1(b) sets forth a true and complete description of the
capital structure of each direct or indirect Subsidiary of the Borrower.

 

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(c)                                  Authorization; No Conflict.  The execution,
delivery and performance by it of this Agreement and of the other Loan Documents
to which it is a party have been duly authorized by all necessary shareholder,
manager, partner, member and corporate action on the part of such Credit Party
or Subsidiary thereof and do not and will not (i) contravene the articles of
incorporation, articles, charter or by-laws, operating agreement, notice of
articles or similar constituent documents of such Credit Party or Subsidiary
thereof; (ii) violate any provision of any Governmental Requirement, order,
writ, judgment, injunction, decree, determination or award presently in effect
having applicability to such Credit Party or Subsidiary thereof; (iii) result in
a breach of or constitute a default under, or, except as set forth on
Schedule 6.1(c), require the consent of any Person pursuant to, any Material
Agreement to which any Credit Party or Subsidiary thereof is a party or by which
any such Credit Party, any Subsidiary thereof or any of their respective
properties may be bound or affected; or (iv) result in, or require, the creation
or imposition of any Lien (other than Liens arising under the Security
Documents) upon or with respect to any of the properties now owned by any Credit
Party or any Subsidiary thereof and, to the knowledge of each Credit Party, no
Credit Party or Subsidiary thereof is in default in any material respect under
any such Governmental Requirement, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease or instrument.

 

(d)                                 Governmental and Other Consents and
Approvals.  Except as set forth on Schedule 6.1(d), no authorization or approval
or other action by or consent of, and no notice to or filing or registration
with, any Governmental Authority or any other Person is required (i) for the due
execution and delivery of the Loan Documents, and the incurrence and due
performance of, the financial obligations of the Credit Parties or any
Subsidiary thereof under this Agreement or any other Loan Document, or
(ii) except for ongoing filings obtained in the ordinary course of the Credit
Parties’ business, for the due performance of all other Obligations of the
Credit Parties or any Subsidiary thereof under this Agreement or any other Loan
Document, except for such authorizations, approvals or other actions as have
been obtained or notices or filings as have been made.

 

(e)                                  Binding Obligations.  This Agreement and
each of the other Loan Documents constitutes a legal, valid and binding
obligation of each of the Credit Parties and/or each Subsidiary thereof that is
a party thereto, enforceable against such Credit Party or Subsidiary thereof
that is a party thereto in accordance with their respective terms (except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws or equitable principles affecting enforcement of creditors’ rights
generally at the time in effect).

 

(f)                                   Litigation.  Except as set forth on
Schedule 6.1(f), there is no claim, action, lawsuit, proceeding, arbitration or
investigation pending or, to the knowledge of the Credit Parties, threatened in
writing against or involving any Credit Party or any Subsidiary thereof or any
Project or any portion thereof, which alleges the violation of any Governmental
Requirement, or which questions the validity of this Agreement or any of the
other Loan Documents or any action taken or to be taken pursuant to this
Agreement or any of the Loan Documents, which involves any Material Agreement,
or which could reasonably be expected to result, either in any case or in the
aggregate, in a Material Adverse Effect on a Credit Party.

 

(g)                                  Financial Statements; No Material Adverse
Change.  The audited consolidated balance sheet of the Borrower as of
December 31, 2011, and the related unaudited

 

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consolidated statements of operations and deficits of the Borrower for the
period then ended, and the unaudited consolidated balance sheet of the Borrower
as of September 30, 2012 and the related unaudited statement of operations and
deficits of the Borrower for the period then ended, copies of which have been
furnished to the Lender and are attached hereto as Schedule 6.1(g), fairly
present the consolidated financial condition in all material respects of the
Borrower and the other Credit Parties as of such dates and the consolidated
results of the operations of the Borrower and the other Credit Parties for the
period ended on such dates, all in accordance with GAAP consistently applied. 
Neither the Borrower nor any other Credit Party has any material Contingent
Liability or liability for taxes, long-term leases or unusual forward or
long-term commitments which are not reflected in such financial statements. 
Since December 31, 2011, except as previously disclosed in writing to the
Lender, neither the business, operations or prospects of the Borrower or any
other Credit Party, nor any of its properties or assets, have been affected by
any occurrence or development (whether or not insured against) which could
reasonably be expected to result, either in any case or in the aggregate, in a
Material Adverse Effect on such Borrower or any Credit Party.

 

(h)                                 Other Agreements.  No Credit Party nor any
Subsidiary thereof is a party to any indenture, loan or credit agreement or any
lease or other agreement or Instrument (other than the Material Agreements) or
subject to any charter or other corporate restriction which could reasonably be
expected, upon a default thereunder or otherwise, to result in a Material
Adverse Effect on a Credit Party.

 

(i)                                     Information Accurate.  All reports,
certificates, status updates and other information delivered to the Lender are
true, accurate and complete in all material respects.  None of the written
information delivered to the Lender by any Credit Party or Subsidiary thereof in
connection with this Agreement or the transactions contemplated hereby or in
connection with the business of the Credit Parties or the Projects contains any
material misstatement of fact or omits to state a material fact, and all
projections contained in any such information, exhibits or reports, were based
on information which, when delivered, was, to the knowledge of the Credit
Parties, true and correct in all material respects as of the date thereof, and
to the knowledge of the Credit Parties all calculations contained in such
projections were accurate in all material respects, and such projections
presented the then-current estimate of the future business, operations and
affairs of such Credit Party or Subsidiary thereof and, since the date of the
delivery of such projections, to the knowledge of the Credit Parties, except as
disclosed in the financial statements delivered pursuant to Section 6.1(g) or as
set forth on Schedule 6.1(i), there has been no change in the assumptions
underlying such projections, or the basis therefor or the accuracy thereof which
has had or could reasonably be expected to result in a Material Adverse Effect;
provided, that with respect to projected financial information, the Credit
Parties represent only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time.  With respect to any
information delivered to the Lender which was prepared by a third party, the
Credit Parties only represent that the Credit Parties do not have knowledge that
such information is inaccurate or incomplete in any material respect.

 

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(j)                                    Title; Liens.

 

(i)                                     Each Credit Party and each Subsidiary
thereof has good and marketable title to its owned real property and has valid
rights to its leased property, including, in each case, the Properties, free and
clear of Liens, except for Permitted Liens and except as disclosed on
Schedule 6.1(j).  Schedule 1.1(f) describes each Credit Party’s ownership in, to
and of each Property and identifies any joint venturers, partners or other
Persons that own an interest in any Property.  Except as described in
Schedule 6.1(j), a Credit Party owns an undivided one hundred percent (100%) of
the beneficial and legal interest in each Property, free and clear of all Liens
(subject only to Permitted Liens), royalties, production payments and other
rights and interests of third parties, except as disclosed in Schedule 6.1(j),
and the Credit Parties have good and marketable title thereto;

 

(ii)                                  Except as set forth on Schedule 6.1(j),
there are no Royalties (of any kind or nature whatsoever, howsoever designated),
production payments or other non-cost bearing interests in or to any Property or
any Project;

 

(iii)                               All taxes, charges, rates, levies and
assessments that, if unpaid, would create a Lien or charge on any Project or any
other property of the Borrower, have been paid in full and will be paid in full,
in each case prior to delinquency;

 

(iv)                              All contractors, subcontractors, agents and
other Persons providing services, materials or labor on or for the benefit of
any Project have been paid in a timely manner for all work performed or
services, goods or labor provided, on or with respect thereto, except where such
payments are subject to a bona fide dispute, which is being diligently pursued
by a Credit Party pursuant to appropriate procedures;

 

(v)                                 Each Credit Party and each Subsidiary
thereof has delivered or made available to the Lender all requested surveys,
reports, core sample information, data and other information concerning the
Projects and all assets, property and interests associated therewith, including
the nature of the rights and interests thereto and therein owned by each Credit
Party and each Subsidiary thereof, which is in the possession or control of any
Credit Party or Subsidiary thereof or to which a Credit Party or Subsidiary
thereof has access; and

 

(vi)                              The Security Documents create valid and
effective Liens in and on the Collateral purported to be covered thereby, which
Liens are currently (or will be upon the filing of appropriate Instruments with
appropriate Governmental Authorities) perfected Liens with the Agreed Priority.

 

(k)                                 Capital Structure.  Each Credit Party and
each Subsidiary thereof has the number of Equity Interests specified in
Schedule 6.1(k).  All Equity Interests identified in such Schedule are duly and
validly issued and are fully paid and non-assessable other than the Shares
issuable upon the exercise of the options and warrants set forth on
Schedule 6.1(k).  The Borrower has duly authorized sufficient Shares to permit
the satisfaction of any obligation to issue Shares to the Lender as described
herein (including with respect to the issuance of Shares

 

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with respect to the Interest Shares).  Except for such Shares, and as indicated
in Schedule 6.1(k), neither the Borrower nor any Credit Party has any
outstanding warrants, options, preferential rights or other obligations to issue
additional shares or other Equity Interests, including any stock or securities
convertible into or exercisable or exchangeable for any shares of its capital
stock or any rights or options to purchase any of the foregoing, or to convert
any existing Indebtedness to Equity Interests in a Credit Party.  Except as set
forth on Schedule 6.1(k), no Credit Party or Subsidiary is a party to or subject
to a shareholders agreement, voting agreement, proxy agreement, lock-up or other
similar agreement with respect to the ownership or control of Equity Interests
of a Credit Party or a Subsidiary of a Credit Party.

 

(l)                                     Material Agreements; Absence of
Default.  The Material Agreements identified in Schedule 1.1(d) hereto include
all of the contracts, agreements, leases, Instruments and other binding
commitments and undertakings of each Credit Party and each Subsidiary thereof,
the performance or breach of which could reasonably be expected to have a
Material Adverse Effect on a Credit Party or any Subsidiary thereof, and the
Borrower has provided the Lender with copies of each such Material Agreement. 
No Credit Party nor any Subsidiary thereof is in material default under any of
the Material Agreements, none of them has received any written notice of an
asserted default thereunder from any other Person, and none of them has
knowledge of a material breach by any counterparty thereto or the inability of
any counterparty thereto to perform its obligations thereunder.

 

(m)                             Taxes and Other Payments.  Except for matters
which could not reasonably be expected to have a Material Adverse Effect, each
Credit Party and each Subsidiary thereof has filed all Tax returns and reports
required by law to have been filed by it and has paid all Taxes and governmental
charges thereby shown to be owing and all claims for sums due for labor,
material, supplies, personal property and services of every kind and character
provided with respect to, or used in connection with its respective properties
and no claim for the same exists except as permitted hereunder, except any such
Taxes, charges or amounts which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
have been set aside on the books of such Credit Party or such Subsidiary, as
applicable.

 

(n)                                 Environmental Laws.  Except as set forth in
Schedule 6.1(n) hereto:

 

(i)                                     to the knowledge of each Credit Party,
each Project has been owned, operated, leased and utilized in material
compliance with all applicable Governmental Requirements, including
Environmental Laws;

 

(ii)                                  there are no currently outstanding or, to
the knowledge of each Credit Party pending, consent decrees, clean-up orders,
mitigation orders, compliance orders, remediation orders or other material
orders, decrees, judgments or other administrative or judicial requirements
outstanding under any Environmental Law with respect to any Project or any other
property owned or held by the Borrower;

 

(iii)                               no Credit Party or any Subsidiary thereof
has received any written notice of material violation, alleged material
violation, material non-compliance, material notice of investigation, liability
or potential material liability or request for information

 

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with respect to Environmental Laws or other environmental matters with regard to
any Project or any other property owned or held by a Credit Party, nor does any
Credit Party have knowledge or reason to believe that any such notice will be
received or is being threatened; and

 

(iv)                              to the knowledge of each Credit Party, with
respect to each Project or any other property owned or held by the Borrower,
there have been no past (which have been adversely determined), and there are no
pending or threatened, lawsuits, claims, complaints or governmental or judicial
proceedings with respect to any alleged material violation of any Governmental
Requirements, including Environmental Law.

 

(o)                                 Indebtedness.  Except as disclosed in
Schedule 6.1(o) hereto or specifically identified in the financial statements
identified in Section 6.1(g),  no Credit Party or any Subsidiary thereof has any
existing intercompany Indebtedness in excess of $100,000, any Indebtedness for
borrowed money, or any other Indebtedness.

 

(p)                                 Compliance with Laws, Etc.  Except as
disclosed in Schedule 6.1(p), each Credit Party and each Subsidiary thereof is
in compliance in all material respects with all Governmental Requirements,
including Environmental Laws and Securities Laws, as applicable.  Except as
disclosed in Schedule 6.1(p), each Project is in compliance in all material
respect with all Governmental Requirements.

 

(q)                                 Operation of Projects.  The Credit Parties
have heretofore made available to the Lender all feasibility studies and
geological, reserve, resource, metallurgical, engineering and financial data and
evaluations of the Projects prepared by or for the benefit of any Credit Party
or otherwise in the possession of any Credit Party.  Except as set forth on
Schedule 6.1(q), the Credit Parties are not aware of any inaccuracy or omission
in such information which has had or could reasonably be expected to result in a
Material Adverse Effect.  The Work Program and Budget has been developed by the
Credit Parties in a prudent manner in accordance with standard industry
practice, and the Credit Parties have no knowledge of any fact or state of
affairs related thereto, or any defect or deficiency therein, which would cause
it to be unable to undertake and complete the Work Program and Budget during the
period and at the costs specified therein.

 

(r)                                    Foreign Corrupt Practices.  No Credit
Party or, to the knowledge of any Credit Party, any Affiliate of a Credit Party
or any Representative acting on behalf of a Credit Party or any of its
Subsidiaries has: (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
governmental official or employee from corporate funds; (iii) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended or other similar Governmental Requirements applicable to any Credit
Party; or (iv) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.

 

(s)                                   Project Permits.  Except for permits,
licenses, approvals, authorizations and consents which are to be obtained by a
Credit Party or Subsidiary thereof from time to time in the ordinary course of
business and the absence or delay of which has not had and could not

 

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reasonably be expected to have a Material Adverse Effect on the development or
operation of any Material Project, all permits, licenses, approvals,
authorizations and consents of Governmental Authorities which are necessary to
undertake and conduct the business of the Credit Parties or any Subsidiary
thereof as it is currently being conducted are identified in
Schedule 6.1(s) hereto (collectively, the “Project Permits”).  All Project
Permits necessary to undertake and conduct the activities contemplated by the
Work Program and Budget have been obtained and are in full force and effect in
accordance with their terms, free of material defaults, and no written notice
alleging a breach or default under any of the Project Permits or challenging or
questioning the validity of such Project Permit has been delivered, except to
the extent disclosed to the Lender in Schedule 6.1(s).

 

(t)                                    Shares and Securities Representations.

 

(i)                                     The Shares to be issued to the Lender
pursuant hereto and the issuance thereof have been duly authorized and, when
issued and delivered in accordance with the terms of this Agreement, will have
been validly issued and will be fully paid and nonassessable.  The Shares are
issued free and clear of any Lien, and the issuance of the Shares will not be
subject to any preemptive or other similar right.

 

(ii)                                  The Borrower and its Affiliates have not
taken, and will not take, directly or indirectly, any action designed to, or
that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Shares or affect the price at which the Shares may be issued or resold.

 

(iii)                               The Shares are being offered and sold
pursuant to the registration exemption provided by Section 4(2) of the
Securities Act as a transaction not involving a public offering and the
requirements of any other applicable state securities laws and the respective
rules and regulations thereunder.  The Borrower and its Affiliates have not
taken nor will it take any action that conflicts with the conditions and
requirements of, or that would make unavailable with respect to the offerings
hereunder, the exemption(s) from registration available pursuant to Regulation D
or Section 4(2) of the Securities Act and knows of no reason why any such
exemption would be otherwise unavailable to it. Neither the Borrower, nor any of
its Affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would cause the offer of the Shares
pursuant to this Agreement to be integrated with prior offerings by the Borrower
for purposes of the Securities Act or any applicable stockholder approval
provisions, including, without limitation, under any applicable listing
rules and regulations which would impair the exemptions relied upon in the
offerings hereunder or the Borrower’s ability to timely comply with its
obligations hereunder, nor will the Borrower nor any of its Affiliates take any
action or steps that would cause the offer or issuance of the Shares to be
integrated with other offerings which would impair the exemptions relied upon in
the offerings hereunder or the Borrower’s ability to timely comply with its
obligations hereunder.  The Borrower will not conduct any offering other than
the transactions contemplated hereby that will be integrated with the offer or
issuance of the Shares, which would impair the exemptions relied upon in the
offerings hereunder or the

 

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Borrower’s ability to timely comply with its obligations hereunder.  The
Borrower’s executive officers and directors understand the nature of the Shares
being sold hereby and recognize that the issuance of the Shares will have a
potential dilutive effect on the equity holdings of other holders of the
Borrower’s equity or rights to receive equity of the Borrower.  The board of
directors of the Borrower has concluded in its good faith business judgment that
the issuance of the Shares is in the best interests of the Borrower.  The
Borrower specifically acknowledges that its obligation to issue the Shares, is
binding upon the Borrower and enforceable regardless of the dilution such
issuance may have on the ownership interests of other shareholders of the
Borrower or parties entitled to receive equity of the Borrower.

 

(iv)                              There are no material disagreements of any
kind presently existing, or reasonably anticipated by the Borrower to arise
between the Borrower and the accountants and lawyers presently employed by the
Borrower, including but not limited to disputes or conflicts over payment owed
to such accountants and lawyers, nor have there been any such disagreements
during the two years prior to the closing of the offerings hereunder.

 

(v)                                 All Shares issued to the Lender pursuant to
this Agreement and the transactions contemplated hereby will be subject to the
Registration Rights Agreement and such Shares constitute “Registrable
Securities” as defined therein.

 

(vi)                              Neither the Borrower nor any other Credit
Party has incurred, nor will they incur, directly or indirectly, any liability
for brokerage or finder’s fees or agent’s commissions or any similar charges or
fees in connection with this Agreement or the issuance of any Shares
contemplated hereby.  Neither the Borrower nor any other Credit Party believe
that the Borrower will be liable for any brokerage or finder’s fees or agent’s
commissions or any similar charges or fees with respect to the Lender’s
participation in the Rights Offering.

 

(u)                                 Solvency.  As of the Closing Date, and after
giving effect to the transactions contemplated hereby, the Credit Parties and
their Subsidiaries: (i) are and will be solvent, (ii) have sufficient capital to
carry on their business and transactions, and all business and transaction in
which they are about to engage, and to pay their debts as they become due,
(iii) do not believe that they will incur debts or liabilities beyond their
ability to pay such debts or liabilities as they mature, and (iv) own property
having a value, both at fair valuation and at present fair saleable value,
greater than the amount required to pay their probable liabilities (including
contingent liabilities).

 

6.2                               Representations and Warranties of the Lender. 
The Lender hereby represents and warrants to the Borrower that the following are
true and correct as of the date of this Agreement and will be true and correct
as of the date of the issuance of any Shares as provided hereunder as though
made as of such date, except to the extent such representations and warranties
are specifically made as of a particular date (in which case such
representations and warranties will be true and correct as of such date):

 

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(a)                                 Risk of Loss.  The Lender recognizes that:
(i) the acquisition of the Shares involves a high degree of risk, is speculative
and only investors who can afford the loss of their entire investment should
consider investing in the Borrower and/or the Shares; (ii) the Lender may not be
able to liquidate its investment; (iii) transferability of the Shares is
limited; and (iv) in the event of a disposition of the Shares, the Lender could
sustain the loss of its entire investment.

 

(b)                                 Accredited Investor. The Lender is an
“accredited investor” as defined in Rule 501(a) under the Securities Act. The
Lender agrees to furnish any additional information requested by the Borrower to
assure compliance with applicable U.S. federal and state securities laws in
connection with the purchase and sale of the Shares.

 

(c)                                  Evaluation.

 

(i)                                     The Lender has such knowledge, skill and
experience in business, financial and investment matters that the Lender is
capable of evaluating the merits and risks of an investment in the Shares. With
the assistance of the Lender’s own professional advisors, to the extent that the
Lender has deemed appropriate, the Lender has made its own legal, tax,
accounting and financial evaluation of the merits and risks of an investment in
the Shares and the consequences of this Agreement. The Lender has considered the
suitability of the Shares as an investment in light of its own circumstances and
financial condition and the Lender is able to bear the risks associated with an
investment in the Shares.

 

(ii)                                  The Lender represents and warrants that
the Lender has been furnished by the Borrower with all information regarding the
Borrower and its Subsidiaries which the Lender, as well as its investment
advisor, attorney and/or accountant, has requested or desired to know, and has
been afforded the opportunity to ask questions of and receive answers from duly
authorized officers or other representatives of the Borrower concerning the
terms and conditions of the offering of the Shares hereunder, and has received
any additional information which the Lender has requested concerning the terms
and conditions of the offerings, the Borrower and its Subsidiaries.

 

(iii)                               The Lender has relied solely upon the
information provided by the Borrower in making its decision to invest in the
Shares and has not relied upon any other representation or other information
(whether oral or written) from any other third party.

 

(d)                                 No General Solicitation. The Lender
represents that no Shares were offered or sold to it by means of any form of
general solicitation or general advertising, and in connection therewith the
Lender did not:  (A) receive or review any advertisement, article, notice or
other communication published in a newspaper or magazine or similar media or
broadcast over television or radio whether closed circuit, or generally
available; or (B) attend any seminar meeting or industry investor conference
whose attendees were invited by any general solicitation or general advertising.

 

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(e)                                  Shares Not Registered. The Lender
understands that the Shares have not been registered under the Securities Act by
reason of a claimed exemption under the provisions of the Securities Act which
depends, in part, upon the Lender’s investment intention.  In this connection,
the Lender hereby represents that the Lender is acquiring the Shares for its own
account for investment purposes only and not with a view toward the resale or
distribution to others and has no contract, undertaking, agreement or other
arrangement, in existence or contemplated, to sell, pledge, assign or otherwise
transfer the Shares to any other Person.

 

ARTICLE 7

 

AFFIRMATIVE COVENANTS OF THE CREDIT PARTIES

 

Until full and final payment and performance of the Obligations (other than
contingent indemnification Obligations for which no claim has been made), each
of the Credit Parties shall, unless the Lender otherwise consents in writing
(which consent the Lender may grant or withhold in its sole discretion), perform
all covenants in this Article 7.

 

7.1                               Compliance with Laws, Etc.  Each Credit Party
shall comply, and shall cause each of its Subsidiaries to comply, in all
material respects, with all applicable Governmental Requirements, including
Environmental Laws, and each Credit Party shall own, operate and manage, and
shall cause each of its Subsidiaries to own, operate and manage, the Projects in
compliance in all material respects with all applicable Governmental
Requirements, including Environmental Laws, other than, in either case, the
Governmental Requirements identified on Schedule 7.1 and solely to the extent
the applicable Credit Party or Subsidiary diligently disputes such Governmental
Requirements in good faith and pursuant to appropriate procedures.  Each Credit
Party shall pay, and shall cause each Credit Party and each Subsidiary thereof
to pay, all Taxes, assessments, and governmental charges imposed upon them or
their respective property before the same become delinquent, except to the
extent contested in good faith and adequately reserved for in accordance with
GAAP to such Credit Party or Subsidiary thereof.

 

7.2                               Project Permits.  Each Credit Party shall
comply, and shall cause each of its Subsidiaries to comply, in all material
respects with all Project Permits.  Each Credit Party shall own, operate and
use, and shall cause each of its Subsidiaries to own, operate and use, each
Material Project in compliance with the Project Permits in all material
respects.  Each Credit Party shall use commercially reasonable efforts, and
shall cause each of its Subsidiaries to use commercially reasonable efforts, to
obtain all Project Permits, and the Credit Parties shall maintain, and shall
cause each of its Subsidiaries to maintain, all Project Permits in full force
and effect, except as identified in Schedule 7.2.

 

7.3                               Reporting Requirements.  The Credit Parties
shall deliver to the Lender the reports, information, notices and certificates
set forth below:

 

(a)                                 Monthly Reports.  As soon as practicable,
but in any event no later than thirty (30) days after the end of each Month, the
Credit Parties shall submit to the Lender a report concerning the Credit Parties
and the Projects during the preceding Month, in form and content

 

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satisfactory to the Lender, to include a summary description of actions taken
with respect to the Projects during the prior Month, a description of actual
expenditures (as compared to the Work Program and Budget) and such other data
and information reasonably requested by the Lender.

 

(b)                                 Quarterly Financial Information.  As soon as
available and in any event within forty five (45) days after the end of each
fiscal quarter of the Borrower (other than the fourth fiscal quarter in any
fiscal year), the Borrower shall deliver to the Lender a consolidated unaudited
balance sheet of the Borrower, each as of the end of such quarter and unaudited
statements of consolidated income, cash flow and retained earnings of the
Borrower for such quarter and for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter.

 

(c)                                  Annual Financial Information.  As soon as
available and in any event within ninety (90) days after the end of each fiscal
year, a consolidated balance sheet of the Borrower as of the end of such year
and consolidated statements of income, cash flow and retained earnings of the
Borrower for such year audited by Hein & Associates LLP or other independent
registered accountants reasonably acceptable to the Lender, acting reasonably.

 

(d)                                 Litigation; Claims.  Promptly after
initiation thereof or receipt of notice with respect thereto, notice of any
claims, proceedings, litigation or material disputes by, against, or otherwise
involving any Credit Party or any Subsidiary thereof, or any Project, or other
litigation which could reasonably be expected to have a Material Adverse Effect
on any Credit Party or any Subsidiary thereof, together with copies of the court
filings or other documents associated therewith.

 

(e)                                  Securities Law and Exchange Filings.  All
annual information forms, proxy circulars, material change reports, prospectuses
and other filings by the Borrower or any other Credit Party with Governmental
Authorities in respect of securities matters and compliance with Securities
Laws, and all material filings with any public stock exchange upon which the
Shares are traded.

 

(f)                                   Material Agreements.  Promptly after
receipt thereof, copies of any notices of default or claims of material breach
received or sent by any Credit Party or any Subsidiary thereof, pertaining to
any of the Material Agreements or any Project, and, promptly after receipt
thereof, copies of all Material Agreements entered into by the Borrower after
the date of this Agreement.

 

(g)                                  Environmental Matters.  Promptly after the
filing or receipt thereof, copies of (i) all new Project Permits, together with
a description thereof and (ii) all claims by and notices with or from any
Governmental Authority or any other Person alleging material noncompliance with
or violation of Environmental Laws or Project Permits and any correspondence in
response thereto.

 

(h)                                 Changes in Capital Structure.  The Credit
Parties shall promptly provide the Lender with prior written notice of any
change in the number and ownership of Equity Interests of each Credit Party
(other than the Borrower), including an updated Schedule 6.1(k) to replace the
Schedule 6.1(k) provided to the Lender on the date of this Agreement.

 

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(i)                                     Other Information; Updated Schedules. 
Such other certificates, reports, data, and information respecting the condition
or operations, financial or otherwise, of any Credit Party or any Subsidiary
thereof or the Projects as the Lender may from time to time reasonably request.

 

7.4                               Inspection.  At any reasonable time during
normal business hours and from time to time, on reasonable notice, each Credit
Party shall permit, and shall cause each of its Subsidiaries to permit, the
Lender and its Representatives to examine and make copies of and abstracts from
the records and books of account of, and to visit the properties of, each Credit
Party and each Subsidiary thereof (including the Projects) and to discuss the
affairs, finances and accounts of each Credit Party or any Subsidiary thereof
with any Representative of a Credit Party or any Subsidiary thereof.  If no
Default or Event of Default has occurred and is continuing, the Lender may visit
and inspect the Projects once per year at the expense of the Credit Parties.  If
no Default or Event of Default has occurred and is continuing, the cost and
expense of visits and inspections by the Lender and its Representatives, other
than as stated herein, shall be for the account of the Lender.  At any time when
a Default or Event of Default has occurred and is continuing, the cost and
expense of all site visits and inspections by the Lender or its Representatives
shall be for the account of the Credit Parties.  No Credit Party will be
responsible for injuries to or damages suffered by Representatives of the Lender
while visiting the properties of a Credit Party or a Subsidiary thereof
(including the Projects) if such injuries or damages are caused by or directly
result from the gross negligence or willful misconduct of the Lender or its
Representatives.

 

7.5                               Maintenance of Insurance.  Each Credit Party
shall maintain, and shall cause each of its Subsidiaries to maintain, with
respect to its assets and business generally and with respect to the Projects,
insurance with responsible and reputable insurance companies or associations
that covers liabilities, property damage or loss and other risks in such
amounts, with such deductibles, covering such risks and otherwise on such terms
and conditions as shall be customary for corporations engaged in the same or
similar businesses.  By no later than January 17, 2013, each of the Borrower’s
insurance policies, excluding the Borrower’s director and officer insurance
policies, shall name the Lender as loss payee or additional insured, as
appropriate, and shall contain an endorsement providing that such insurance
cannot be terminated or amended without at least thirty (30) days prior notice
to the Lender, and the Borrower shall have provided certificates of issuing
insurance companies or brokers, confirming compliance by the Credit Parties with
the insurance requirements set forth in this Section 7.5.

 

7.6                               Keeping of Records and Books of Account.  Each
Credit Party shall keep, and shall cause each of its Subsidiaries to keep,
adequate records and books of account, in which complete entries shall be made
reflecting all financial transactions of each Credit Party and each Subsidiary
thereof, and with respect to each Credit Party and each Subsidiary thereof on a
consolidated basis, the foregoing shall be in accordance with GAAP to each
Credit Party and each Subsidiary thereof at such point in time, and in each
case, consistently applied.

 

7.7                               Preservation of Existence, Etc.  Each Credit
Party shall preserve and maintain, and shall cause each of its Subsidiaries to
preserve and maintain, its respective corporate existence, rights, franchises
and privileges in the jurisdiction of their incorporation or formation; and,
each Credit Party will qualify and remain qualified, and will cause each of its
Subsidiaries

 

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to qualify and remain qualified, as a foreign entity in each jurisdiction in
which such qualification is necessary in view of their business and operations
or the ownership of their properties.  Each Credit Party will comply, and will
cause each of its Subsidiaries to comply, with all applicable material
Governmental Requirements and all material Securities Laws, concerning
disclosure of matters relevant to such Persons and their properties; and, each
Credit Party will timely file, and will cause each of its Subsidiaries to timely
file, full and complete reports concerning their business and operations as
required by such Governmental Requirements and Securities Laws.

 

7.8                               Conduct of Business.  Each Credit Party shall
engage solely, and will cause each Credit Party and each of its Subsidiaries to
engage solely, in the business of developing and operating the Projects, and
other activities incident thereto, in accordance with generally accepted
industry practices.  Each Credit Party shall use commercially reasonable
efforts, and shall cause each of its Subsidiaries to use commercially reasonable
efforts, to develop, manage, operate and use the Projects in accordance with
prudent industry practices and with the Work Program and Budget.

 

7.9                               Notice of Default.  The Borrower shall furnish
to the Lender as soon as possible and in any event within three (3) Business
Days after the occurrence of each Event of Default or Default continuing on the
date of such statement, a statement of the president or chief financial officer
of the Borrower, setting forth the details of such Event of Default or Default,
and the action which the Borrower proposes to take with respect thereto.

 

7.10                        Defense of Title and Rights.  Each Credit Party
shall preserve and defend, and shall cause each of its Subsidiaries to preserve
and defend, its respective ownership of all right, title and interest in and to
the Properties and the Projects, and its other material assets, property and
rights as such title is represented and warranted in Section 6.1(j).  Each
Credit Party shall defend, and shall cause each other Credit Party and each
Subsidiary thereof to defend, the Liens in favor of the Lender under the
Security Documents, and the Credit Parties shall maintain and preserve, and
shall cause the other Credit Parties and each Subsidiary thereof to maintain and
preserve, such Liens as perfected Liens with their Agreed Priority.

 

7.11                        Material Agreements.  Each Credit Party shall comply
with, and shall cause each other Credit Party and each Subsidiary thereof to
comply with, the terms and conditions of each of the Material Agreements except
where any non-compliance could not reasonably be expected to cause a material
default under such Material Agreement or to have a Material Adverse Effect.

 

7.12                        Maintenance of Unissued Shares.  The Borrower will
at all times maintain sufficient authorized but unissued Shares to meet its
obligations hereunder, and all Shares issued to the Lender hereunder shall be
Tradable Shares.

 

7.13                        Participation on the Borrower’s Board of Directors. 
At all times (i) while any Obligation (other than contingent indemnification
Obligations for which no claim has been made) remains outstanding and this
Agreement remains in effect or (ii) while the Lender and its Affiliates hold
Shares, which in the aggregate on a partially diluted basis (as described below)
exceed ten percent (10%) of all Shares issued and outstanding, the Lender will
be entitled to nominate qualified individuals to serve on the Board of Directors
of the Borrower as follows:

 

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(A) so long as any Obligation (other than contingent indemnification Obligations
for which no claim has been made) remains outstanding and this Agreement remains
in effect, the Lender will be entitled to nominate one (1) qualified individual
to serve on the Board of Directors of the Borrower, (B) so long as the Lender
and its Affiliates hold Shares, which in the aggregate on a partially diluted
basis (as described below) exceed ten percent (10%) of all Shares issued and
outstanding, the Lender will be entitled to nominate one (1) qualified
individual to serve on the Board of Directors of the Borrower, and (C)  so long
as the Lender and its Affiliates hold Shares, which in the aggregate on a
partially diluted basis (as described below) exceed twenty five percent (25%) of
all Shares issued and outstanding, the Lender will be entitled to nominate a
total of two (2) qualified individuals to serve on the Board of Directors of the
Borrower.  For the avoidance of doubt, all qualified individuals nominated by
the Lender to serve on the Board of Directors (each, a “Lender Nominee”) shall
be selected exclusively by the Lender without consultation with or approval by
the Borrower.  The Borrower, the other Credit Parties, and the management and
directors of the Borrower will, subject to Governmental Requirements and
Securities Laws, use best efforts to cause each Lender Nominee to be elected to
the Board of Directors as soon as practicable after such nomination is received
by the Borrower, including recommending such nominee to fill any vacancy and
having such nominee be part of the management’s or the governance committee’s
recommended slate of directors for election to the Board of Directors of the
Borrower.  The right of the Lender to have representation on the Board of
Directors of the Borrower may be exercised at any time and from time to time.
For any determination made under this Section 7.13(a) of the Lender’s percentage
ownership of issued and outstanding Shares, the parties shall assume (x) the
full application of the Loan for the issuance of Shares, and (y) the payment of
all interest and fees due hereunder in Shares.

 

7.14                        Authorized Disclosure of Confidential Information;
Restrictions.  The Lender will keep all Confidential Information confidential
and not disclose it to any third Person, except that Confidential Information
may be disclosed (i) to an individual nominated by the Lender to serve on the
Board of Directors (each, a “Lender Nominee”) or any Representatives or
Affiliate of the Lender (each, a “Permitted Third Party”) (it being understood
that the Permitted Third Party to whom such disclosure is made will first be
informed of the confidential nature of such Confidential Information and
instructed to keep such Confidential Information confidential); (ii) to the
extent required by any Governmental Authority or any Governmental Requirement;
(iii) in connection with the exercise of any rights or remedies hereunder or
under any other Loan Document or any suit, action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder; (iv) subject to an agreement containing provisions substantially the
same as those of this Section 7.14, to any assignee or any prospective assignee
of the Lender to which the Lender may assign any of its rights or obligations
under this Agreement; or (v) with the prior written consent of the Borrower. 
“Confidential Information” means all information received from any Credit Party
(regardless of whether such information was received before or after the Closing
Date), relating to any Credit Party or its business, whether disclosed verbally
or in writing, learned thereby, including confidential, proprietary and material
non-public information. “Confidential Information” shall not include any
information that (x) is in the possession of the Lender or a Permitted Third
Party prior to disclosure by a Credit Party; (y) is in the public domain prior
to disclosure to the Lender or a Permitted Third Party; or (z) lawfully enters
the public domain through no violation of this Section 7.13 after disclosure to
the Lender or any Permitted Third Party.  The Lender acknowledges and agrees
that it is aware, and it shall advise each Permitted Third Party who is

 

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informed as to the matters which are the subject of this Agreement, that it is
receiving information of the Credit Parties that may include material non-public
information and that applicable Securities Laws may impose restrictions on
trading securities when in possession of such information and on communicating
such information to any other person. Any Lender Nominee or any Representative
of the Lender who attends a meeting of the Board of Directors of the Borrower or
any other Credit Party shall be permitted, and each Credit Party hereby
acknowledges its authorization, to disclose any Confidential Information to the
Lender and any other Permitted Third Party for the purposes of managing the
Lender’s investment.

 

7.15                        Public Announcements.  The Credit Parties will
consult with the Lender prior to issuing any press release or other public
announcement regarding this Agreement, the Lender (or any of its Affiliates) or
the transactions contemplated hereby.  The Credit Parties shall not make or
issue any public announcement, press release, public statement or other public
filing or issuance with respect to this Agreement, the transactions contemplated
hereby, or the Lender (or any of its Affiliates), without the prior review,
comment and approval of the Lender; provided, that if such public announcement,
press release, public statement or other public filing or issuance is required
by applicable Governmental Requirements, then the Lender shall not unreasonably
withhold or delay its consent.  The party proposing to make an announcement,
press release, public statement or other public filing shall provide a copy of
any such proposed public announcement, press release, public statement or other
public filing or issuance to the Lender for review and comment, and the party
proposing to issue any of the foregoing shall use its commercially reasonable
efforts to provide such document to the Lender at least two (2) Business Days
prior to release.  The Credit Parties agree to incorporate any reasonable
comments or changes proposed by the Lender.  Any comments provided by the Lender
shall not be considered certification by such party as to the accuracy, veracity
or completeness of the information contained in such public announcement, press
release, public statement or other public filing or issuance, or a confirmation
or certification by the Lender that the content of such document complies with
Securities Laws or other applicable Governmental Requirements.

 

7.16                        Additional Guarantors.  Each Credit Party shall
ensure that on or prior to any Person becoming a Subsidiary of a Credit Party:

 

(i)                                     each such Person shall execute and
deliver a Guarantee in favour of the Lender and shall join this Agreement as a
Credit Party;

 

(ii)                                  each such Person shall execute and deliver
a Security Agreement;

 

(iii)                               each such Person shall execute and deliver
such other Security Documents in favour of the Lender and grant such other
security interests in favour of the Lender as the Lender may require;

 

(iv)                              the Lender shall have received evidence of
registration or other perfection of all Security Documents in such jurisdictions
as may be necessary or appropriate to ensure that such Security Documents create
legal, valid, binding, enforceable security interests with the Agreed Priority;

 

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(v)                                 the Lender shall have received all
discharges, subordination agreements, waivers, confirmations and estoppels as
the Lender may require to ensure that all Obligations are secured by Liens with
the Agreed Priority on the property and assets of such Person; and

 

(vi)                              the Lender shall have received such other
documents, certificates and Instruments as the Lender may request;

 

with each of the foregoing in form and substance satisfactory to the Lender.

 

7.17                        Shares Delivered to the Lender.  All Shares issued
and delivered to the Lender, whether as Interest Shares or otherwise, shall be
(a) fully paid, duly issued and non-assessable; (b) issued by the Borrower in
original certificates reflecting the Lender (or its designee) as the owner
thereof; (c) free and clear of all Liens and other claims of right or interest
by any third Person and shall be free and clear of other contractual
restrictions or obligations (other than those agreed to and entered into by the
Lender); (d) covered by and subject to the Registration Rights Agreement; and
(e) upon registration in accordance with the Registration Rights Agreement, such
Shares shall be freely transferrable in accordance with Securities Laws on a
public stock exchange of recognized standing.

 

7.18                        Amendment of Investor Agreements.  The Borrower and
the other Credit Parties agree to amend the Investor Agreements, in form and
substance reasonably acceptable to the Lender, in order to address and
incorporate the provisions of this Agreement that will survive the repayment of
the Loan and to cooperate with the Lender in undertaking and completing such
amendments.

 

7.19                        Shareholder Meeting; NASDAQ Compliance.

 

(a)                                 The Borrower shall, and shall cause the
other Credit Parties to, comply with all applicable Securities Laws.

 

(b)                                 The Borrower shall, and shall cause the
other Credit Parties to, comply with all applicable NASDAQ rules and policies,
including NASDAQ quantitative and qualitative continued listing requirements,
and the Borrower shall maintain its listing on NASDAQ in good standing.

 

(c)                                  The Borrower shall use its best efforts to
call and hold a Shareholder Meeting by no later than January 18, 2013, in order
to approve a reverse stock split in a proportion necessary to meet the NASDAQ
financial requirements listing standards and to maintain its listing on NASDAQ
in good standing.

 

(d)                                 The Borrower shall, and the other Credit
Parties shall cause the Borrower to: (i) do all things that may be required in
order to obtain all consents and approvals that are necessary to perform the
Borrower’s obligations under this Agreement, including the issuance of Shares to
the Lender, and (ii) use its best efforts to pursue and obtain Shareholder
Approval, if required by Securities Laws, for the issuance of Tradable Shares to
the Lender pursuant to this Agreement and the transactions contemplated hereby.

 

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(e)                                  In the case of any Shareholder Approval,
such best efforts shall include the following: (i) preparing and dispatching a
proxy, notice of meeting and explanatory information or similar communication to
shareholders in accordance with Securities Laws (collectively, the “Meeting
Materials”) and using its best efforts to ensure that the Borrower’s Board of
Directors (other than any director nominated by the Lender) unanimously
recommends the approval and adoption of the Shareholder Approval and that such
recommendation is included in the Meeting Materials; (ii) including in the
Meeting Materials for the Shareholder Approval an approval for the issuance of
Shares to the Lender; (iii) giving the Lender a reasonable opportunity to review
and comment on an advanced draft of the Meeting Materials and consult in good
faith with the Lender in relation to any comments the Lender may have on the
Meeting Materials, provided that all information relating solely to the Lender
included in the Meeting Materials must be in a form satisfactory to the Lender;
(iv) taking all lawful actions to solicit and encourage Shareholder Approval;
(v) pursuing and obtaining voting agreements, proxies or other similar
Instruments from the management and directors of the Borrower (other than any
director nominated by the Lender) with respect to supporting the adoption and
approval of the Shareholder Approval and voting their Shares (and all Shares
owned or controlled by an Affiliate of such director) in favour of the
resolution for the Shareholder Approval; (vi) including a statement in the
Meeting Materials stating that the directors (other than any director nominated
by the Lender) intend to vote their Shares (and all Shares owned or controlled
by an Affiliate of such director) in favour of the resolution for the
Shareholder Approval; and (vii) calling and holding a Shareholder Meeting,
including Shareholder Approval on the agenda for the Shareholder Meeting, and
taking all lawful actions to encourage adoption of the Shareholder Approval at
such Shareholder Meeting.

 

ARTICLE 8

 

NEGATIVE COVENANTS OF THE CREDIT PARTIES

 

Until the full and final payment and performance of the Obligations (other than
contingent indemnification Obligations for which no claim has been made), each
of the Credit Parties shall, unless the Lender otherwise consents in writing
(which consent the Lender may grant or withhold in its sole discretion), perform
all covenants in this Article 8.

 

8.1                               Indebtedness.  No Credit Party shall, and each
Credit Party shall cause its Subsidiaries to not, directly or indirectly,
create, incur, assume, agree to or suffer to exist, any Indebtedness, except
(a) Indebtedness hereunder; (b) Indebtedness secured by Liens permitted by
Section 8.2, so long as the principal amount of such Indebtedness shall not
increase from the amount in existence on the Closing Date; (c) Indebtedness
existing on the date hereof disclosed to the Lender on Schedule 6.1(o) hereto,
so long as the principal amount of such Indebtedness shall not increase from the
amount in existence on the Closing Date; (d) unsecured account trade payables,
bank overdrafts and other similar unsecured Indebtedness incurred in the
ordinary course of business, so long as such amounts are not overdue or
delinquent; and (e) unsecured Indebtedness of a Credit Party owing to any other
Credit Party.

 

8.2                               Liens, Etc.  No Credit Party shall, and each
Credit Party shall cause its Subsidiaries to not, directly or indirectly,
create, grant, incur, assume, agree to or suffer to exist any Lien upon or with
respect to any of its properties or assets, including any portion of the

 

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Properties or its interest in the Projects or any other real or personal
property or assets of any Credit Party or any Subsidiary of a Credit Party, now
owned or hereafter acquired, or assign or otherwise convey any right to receive
the production, proceeds or income therefrom (other than with respect to the
sale of mineral production from the Projects), except:

 

(a)                                 Liens for taxes, assessments or governmental
charges or levies if the same shall not at the time be delinquent or thereafter
can be paid without penalty, or are being contested in good faith and by
appropriate proceedings;

 

(b)                                 Liens imposed by law, such as carriers,
warehousemen and mechanics’ liens and other similar liens arising in the
ordinary course of business associated with amounts not yet due and payable, or
which are being diligently disputed by any Credit Party in good faith and
pursuant to appropriate procedures;

 

(c)                                  Liens of purchase money mortgages and other
security interests on equipment acquired, leased or held by any Credit Party
(including equipment held by any such Person as lessee under leveraged leases)
in the ordinary course of business to secure the purchase price of or rental
payments with respect to such equipment or to secure indebtedness incurred
solely for the purpose of financing the acquisition (including acquisition as
lessee under leveraged leases), construction or improvement of any such
equipment to be subject to such mortgages or security interests, or mortgages or
other security interests existing on any such equipment at the time of such
acquisition, or extensions, renewals or replacements of any of the foregoing for
the same or a lesser amount, provided that no such mortgage or other security
interest shall extend to or cover any equipment other than the equipment being
acquired, constructed or improved, and no such extension, renewal or replacement
shall extend to or cover any property not theretofore subject to the mortgage or
security interest being extended, renewed or replaced;

 

(d)                                 Liens outstanding on the date hereof and
described in Schedule 6.1(j) hereto;

 

(e)                                  Liens arising under the Security Documents;

 

(f)                                   cash or governmental obligations deposited
in the ordinary course of business in connection with contracts, bids, tenders
or to secure workmen’s compensation, unemployment insurance, surety or appeal
bonds, reclamation bonds, costs of litigation (when required by law), public and
statutory obligations, Liens or claims incidental to current construction,
mechanics’, warehousemen’s, carriers’ and other similar Liens where such amounts
are not yet due and payable or which are being diligently disputed by any Credit
Party in good faith and pursuant to appropriate procedures; and

 

(g)                                  Liens given in the ordinary course of
business to a public utility or any municipality or governmental or other public
authority when required by such utility or municipality or governmental or other
authority in connection with the operations of the Borrower.

 

Notwithstanding the foregoing, if a Credit Party shall grant or allow a Lien on
any of its properties or assets in violation of this Section 8.2, then it shall
be deemed to have

 

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simultaneously granted an equal and ratable Lien on any such properties or
assets to and in favor of the Lender, to the extent that such a Lien has not
already been granted to the Lender.

 

8.3                               Assumptions, Guarantees, Etc. of Indebtedness
of Other Persons.  No Credit Party shall, and each Credit Party shall cause its
Subsidiaries to not, directly or indirectly, assume, guarantee, endorse or
otherwise become directly or contingently liable (including, without limitation,
liable by way of agreement, contingent or otherwise, to purchase, to provide
funds for payment, to supply funds to or otherwise invest in the debtor or
otherwise to assure the creditor against loss) in connection with any
Indebtedness of any other Person, except (a) guarantees by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business or (b) in connection with Indebtedness contemplated
by Section 8.1(e).

 

8.4                               Liquidation; Merger; Change in Ownership.  No
Credit Party shall, and each Credit Party shall cause its Subsidiaries to not,
liquidate or dissolve, or enter into any consolidation or merger, or enter into
any partnership, joint venture or other combination where such combination
involves a contribution by such Credit Party or Subsidiary thereof of all or
substantially all of its assets, or sell, lease or dispose of its business or
assets as a whole or in an amount which constitutes substantially all of such
assets, or enter into any agreement with respect to the foregoing or agree to do
or undertake any of the foregoing.

 

8.5                               Restrictive and Inconsistent Agreements.  No
Credit Party shall, and each Credit Party shall cause its Subsidiaries to not,
enter into any agreement or undertaking or incur or suffer any obligation
prohibiting or inconsistent with the performance by any Credit Party of its
Obligations under the Loan Documents or any Material Agreement.

 

8.6                               Burdens on Production.  No Credit Party shall,
and each Credit Party shall cause its Subsidiaries to not, grant, sell,
transfer, assign or convey, directly or indirectly, to any Person any Royalty
(of any kind or nature whatsoever, howsoever designated), production payment or
other non-cost bearing interests in or to any Property or any Project, other
than the Royalties listed in Schedule 6.1(j).

 

8.7                               Investments in Other Persons.  No Credit Party
shall, and each Credit Party shall cause its Subsidiaries to not, directly or
indirectly: (a) make any loan or advance of credit (other than as contemplated
by the Work Program and Budget, or approved capital expenditures and exploration
expenses, or from the Borrower to a Credit Party) to any Person utilizing the
Loan proceeds or (b) purchase or otherwise acquire the capital stock,
indebtedness, obligations of, or any interest in, any Person (other than readily
marketable direct obligations of the United States of America and certificates
of time deposit issued by a commercial bank of recognized standing operating in
the United States of America, or other investment grade instruments reasonably
approved by the Lender).

 

8.8                               Sale of Project Assets.  No Credit Party
shall, and each Credit Party shall cause its Subsidiaries to not, directly or
indirectly, sell, transfer, assign or otherwise dispose of any of their
respective material assets or properties (or any material portion thereof),
including any assets or properties related to any Project.  No Credit Party
shall, and each Credit Party shall cause its Subsidiaries to not, directly or
indirectly, enter into or agree to any Streaming

 

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Transaction, offtake agreement, supply agreement, sales agreement or other
Instrument relating to the sale, conveyance, transfer or grant of an interest in
Metals produced at or from any Project, without the prior written approval of
the Lender.

 

8.9                               Acquisitions.  No Credit Party shall, and each
Credit Party shall cause its Subsidiaries to not, purchase or acquire any Equity
Interests of any Person, or purchase or acquire all or substantially all the
assets of any Person, or purchase or acquire a division or business of any
Person.

 

8.10                        Dividends.  Other than subscription rights
distributed in connection with the Rights Offering, no Credit Party shall
declare, accrue or pay any dividends, whether in cash or in Equity Interests,
while any Loan or any other amount hereunder remains outstanding and unpaid.

 

8.11                        Work Program and Budget.  No Credit Party shall, and
each Credit Party shall cause its Subsidiaries to not, materially amend, modify,
supplement or revise the Work Program and Budget without the prior consent of
the Lender.  No Credit Party shall, and each Credit Party shall cause its
Subsidiaries to not, make, agree to make, accrue or incur any expenditure of any
nature whatsoever, or any commitment therefor, in excess of US$50,000
individually, or $250,000 in the aggregate, unless such expenditure is included
and described in the Work Program and Budget.

 

8.12                        Material Agreements.  No Credit Party shall, and
each Credit Party shall cause its Subsidiaries to not, (a) enter into or agree
to enter into any Material Agreement, or (b) modify, amend or knowingly waive
any material rights with respect to any Material Agreement to which any such
Person is a party, in each case without the prior written consent of the Lender,
not to be unreasonably withheld, conditioned or delayed.

 

8.13                        Limitation on Hedging.  No Credit Party shall, and
each Credit Party shall cause its Subsidiaries to not, enter into any Hedge
Contract without the prior written consent of the Lender, not to be unreasonably
withheld.

 

8.14                        Transactions with Affiliates.  No Credit Party
shall, and each Credit Party shall cause its Subsidiaries to not, sell, lease,
assign or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any other
transactions with or make any payments to, any Affiliate or any officer or
employee of a Credit Party or a Subsidiary of a Credit Party; provided, however
that a Credit Party or Subsidiary may engage in such a transaction so long as
(a) it is entered into and completed in the ordinary course of business at
prices and on terms and conditions not less favorable to such Credit Party or
Subsidiary than could be obtained on an arm’s-length basis from unrelated
parties, (b) it does not remove any property or asset from the coverage of any
Security Document in favour of the Lender or otherwise have a material adverse
effect on any Collateral or any Security Document, and (c) the Credit Parties
have provided written notice thereof to the Lender.

 

8.15                        New Subsidiaries.  No Credit Party shall, and each
Credit Party shall cause its Subsidiaries to not, organize or acquire any
Subsidiary.  In the event the Lender consents to the organization or acquisition
of a Subsidiary by a Credit Party, (a) the Borrower shall provide the Lender
with written notice thereof and an updated Schedule 6.1(b) to replace the
Schedule 6.1(b) 

 

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provided to the Lender on the date of this Agreement; and (b) each Credit Party
and each new Subsidiary of a Credit Party shall execute and deliver such
Security Documents and other Instruments reasonably requested by the Lender.

 

8.16                        Use of Loan Proceeds.  No Credit Party shall, and
each Credit Party shall cause its Subsidiaries to not, use the proceeds of any
Loan, or any portion thereof, for any purpose other than as expressly set forth
in Section 2.5 hereof.

 

ARTICLE 9

 

EVENTS OF DEFAULT

 

9.1                               Event of Default.  Each of the following
events shall be an “Event of Default” hereunder:

 

(a)                                 Nonpayment.  The Borrower shall fail to
repay the Loan as and when due hereunder (whether at stated maturity, by
prepayment, on demand or otherwise), or shall fail to pay interest hereunder
when due (whether on a payment date, by prepayment, on demand or otherwise), or
shall fail to pay any other amount due hereunder when due (whether on the date
when due, by prepayment, on demand or otherwise).

 

(b)                                 Specific Defaults.  The Borrower or any
other Credit Party shall fail to observe or perform any of its covenants
contained in Sections 7.13, 7.15, 7.16, 7.17, 7.18 or 7.19 or Article 8 of this
Agreement.

 

(c)                                  Other Defaults.  The Borrower or any other
Credit Party shall fail to observe or perform any of its covenants contained in
this Agreement or any other Loan Document, other than the covenants referred to
in clauses (a) and (b) above, and such Borrower or Credit Party has not remedied
such default within ten (10) days after written notice of default has been given
by the Lender to the Borrower.

 

(d)                                 Representation or Warranty.  Any
representations or warranty made by any Credit Party under or in connection with
this Agreement, or the other Loan Documents shall prove to have been incorrect
in any material respect when made.

 

(e)                                  Cross-Default.  A default shall occur under
(i) any Loan Document, (ii) any Material Agreement (subject to applicable cure
periods thereunder, if any), or (iii) any agreement or Instrument pertaining to
Indebtedness permitted by Section 8.1 in excess of One Hundred Thousand United
States Dollars (US$100,000); or any Credit Party shall fail to pay any
Indebtedness in excess of One Hundred Thousand United States Dollars
(US$100,000) (or equivalent in other currencies) in principal amount (but
excluding Indebtedness included in the Obligations), or any interest or premium
thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such default or failure to pay is not
being contested by such Credit Party in good faith;  or, any other default under
any agreement or Instrument relating to any such Indebtedness or any other
event, shall occur and shall continue after the applicable grace period, if any,
specified in such agreement or Instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of, the maturity of such
Indebtedness, unless such default or event shall be waived by the holders or
trustees of such

 

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Indebtedness; or any such Indebtedness shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof.

 

(f)                                   Bankruptcy; Insolvency.  (i) Any Credit
Party shall initiate or commence any case, proceeding or other action (A) under
any existing or future Bankruptcy Law, or otherwise seeking to have it judged
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, administrator, conservator or other similar official for it or for
all or any substantial part of its assets, or any Credit Party shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against any Credit Party any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of sixty (60) days; or
(iii) there shall be commenced against any Credit Party any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of their assets which
results in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within sixty (60) days
from the entry thereof; or (iv) any Credit Party shall take any action in
furtherance of, or indicating its consent to, approval of, authorization of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) any Credit Party generally shall not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due.

 

(g)                                  Judgments.  A final judgment or order for
the payment of money in excess of US$100,000 (or equivalent in other currencies)
shall be rendered against any Credit Party and either; (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order; or (ii) a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect for any period of twenty
(20) consecutive days.

 

(h)                                 Security Interest.  Any Security Document
after delivery thereof shall for any reason, except to the extent permitted by
the terms thereof or the terms hereof, cease to create a valid and perfected
Lien having the Agreed Priority with respect to any of the Collateral purported
to be covered thereby, or a Credit Party shall so state or claim in writing.

 

(i)                                     Expropriation/Condemnation.  An
Expropriation Event shall have occurred.

 

(j)                                    Regulatory Action.  Any Governmental
Authority shall take any action with respect to a Credit Party, or with respect
to any Material Project or any Collateral subject to the Security Documents,
which could reasonably be expected to have a Material Adverse Effect on a Credit
Party or a Material Project or the ability of the Borrower to repay the Loan or
to meet its other Obligations in a timely manner unless such action is set
aside, dismissed or withdrawn within twenty (20) days of its institution or such
action is being contested in good faith, its effect is stayed during such
contest and the Credit Parties are allowed to continue development of such
Material Project during such period in accordance with the Work Program and
Budget.  A

 

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material breach or default under any Project Permit shall occur, or, other than
as set forth on Schedule 9.1(j), any such Project Permit is voided, rescinded,
cancelled, terminated or not reissued, and as a result thereof, the Credit Party
is required to cease or delay a material operation in the Material Project
affected by such action or such action otherwise has a Material Adverse Effect
on such Material Project.

 

(k)                                 Cessation of Project Operations.  Any
Material Project, or any material portion thereof, shall be abandoned or
terminated, or development or operation of any Material Project shall be
terminated or reduced materially from the level of exploration, development,
operation and use contemplated by the Work Program and Budget.

 

(l)                                     Material Adverse Change.  A change in
the business, financial condition or prospects of any Credit Party or any
Material Project occurs, which has had, or could be reasonably expected to have,
a Material Adverse Effect.

 

(m)                             Change of Control.  A Change of Control shall
have occurred.

 

(n)                                 Delisting; Suspension.  The Borrower’s
Shares shall be suspended or delisted from NASDAQ.

 

(o)                                 Event of Default Under Investor Agreements. 
A default, event of default or breach on the part of the Borrower or any Credit
Party shall have occurred under any Investor Agreement.

 

9.2                               Remedies Upon Event of Default.

 

(a)                                 Termination of Obligations.  Upon the
occurrence of an Event of Default specified in Section 9.1(f) of this Agreement,
all obligations of the Lender hereunder shall terminate, but such termination
shall not limit any rights or remedies of the Lender hereunder.   In the case of
any Event of Default specified in Section 9.1 (other than Section 9.1(f)), upon
notice by the Lender to the Borrower of the Lender’s election to declare the
Borrower in default, then the obligations of the Lender hereunder shall
terminate, but such termination shall not limit any rights or remedies of the
Lender hereunder.  The date on which such notice is sent or, in the case of an
Event of Default specified in Section 9.1(f) of this Agreement, the date of such
Event of Default, shall be the “Date of Default.”

 

(b)                                 Acceleration upon Notice.  Upon the Date of
Default and upon notice from the Lender of an Event of Default specified in
Section 9.1 (other than Section 9.1(f)), the Loan, together with all interest
thereon and all other amounts owed by the Borrower hereunder to the Lender,
shall be accelerated and become immediately due and payable in full.

 

(c)                                  Acceleration without Notice.  Immediately
and automatically upon the occurrence of an Event of Default specified in
Section 9.1(f), without delivery of any notice by the Lender, the Loan and all
amounts owed by the Borrower hereunder shall be automatically accelerated and
immediately due and payable on the Date of Default.

 

(d)                                 Availability of Rights and Remedies.  Upon
the occurrence of an Event of Default, all of the rights and remedies provided
to the Lender in this Agreement, each of the

 

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Security Documents, and each other Loan Document shall immediately become
available to the Lender, and the Lender shall have all other rights and remedies
available at law or in equity.

 

(e)                                  Cumulative Rights and Remedies.  All rights
and remedies of the Lender set out in this Agreement, the Security Documents,
the other Loan Documents and otherwise available at law or in equity are
cumulative, and no right or remedy contained herein or therein is intended to be
exclusive; each such right or remedy is in addition to every other right and
remedy contained in this Agreement, the Security Documents and the other Loan
Documents, or in any existing or future agreement, or now or in the future
existing at law, in equity, by statute or otherwise.

 

(f)                                   Waiver of Presentment.  Except as
expressly provided above in this Section 9.2, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.  From and after the
Date of Default, interest on the Loan shall accrue at the Default Rate and shall
be payable on demand.

 

(g)                                  Specific Performance; Special Remedies. 
The Credit Parties acknowledge and agree that any failure of the Credit Parties
to comply with this Agreement will cause irreparable harm and injury and that
the remedy at law for any breach or threatened breach of any such provision will
be inadequate and, accordingly, the Lender shall, in addition to all other
rights and remedies that the Lender may have, be entitled, with or without
notice to the Credit Parties, to seek an injunction or temporary restraining
order to prevent such breach or threatened breach and to enforce specifically
the terms and provisions of this Agreement.  Injunctive relief, temporary
restraining orders and specific performance may be imposed and enforced
judicially or by arbitrators.  Such remedies are cumulative and not exclusive
and are in addition to all other remedies available to the Lender under this
Agreement, the other Loan Documents or otherwise.

 

ARTICLE 10

 

MISCELLANEOUS

 

10.1                        Amendments, Etc.  Except as otherwise expressly
provided in this Agreement, no amendment or waiver of any provision of this
Agreement, nor consent to any departure by any Credit Party or the Lender
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the other party, and, in the case of any amendment, by the Credit
Parties and the Lender and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.

 

10.2                        Notices; Etc.  All notices, requests, demands and
other communications provided for hereunder shall be in writing (including
facsimile communication) and transmitted to the following address or facsimile:

 

47

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if to the Borrower or Guarantors:

 

Uranium Resources, Inc.

405 State Highway Bypass 121

Building A, Suite 110

Lewisville, Texas 75067

Attention:                 Thomas H. Ehrlich

Phone:                                  (972) 219-3330

Facsimile:                 (972) 219-3311

E-Mail:                               thehrlich@uraniumresources.com

 

and if to the Lender:

 

Resource Capital Fund V L.P.

1400 Sixteenth Street, Suite 200

Denver, Colorado 80202

Attention:                 Cassie Boggs

Facsimile:                 (720) 946-1450

E-Mail:                               cjb@rcflp.com

 

or, as to each Party, at such other address or number as shall be designated by
such Party in a written notice to the other.  All notices, requests, demands or
other communications to or upon the respective Parties hereto shall be in
writing (including by facsimile or e-mail), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made: (a) when
delivered by hand, upon receipt; (b) when transmitted via telecopy (or other
facsimile device) to the number set out herein, upon transmission; (c) the
Business Day immediately following the day on which the same has been delivered
prepaid (or pursuant to an invoice arrangement) to a reputable national
overnight air courier service; (d) the third Business Day following the day on
which the same is sent by certified or registered mail, postage prepaid; or
(e) when delivered by e-mail, upon the sender’s receipt of an acknowledgment
from the intended recipient (such as by the “return receipt requested” function,
as available, return e-mail or other written acknowledgment), provided that if
such notice, request, demand or communication transmitted by e-mail is not sent
during the normal business hours of the recipient, such notice, request or
demand shall be deemed to have been sent at the opening of business on the next
Business Day for the recipient.  Notices delivered to the Lender pursuant to
Articles 2 or 3 hereof shall not be effective until actually received by the
Lender.  Each Credit Party agrees that any notice, request, demand or
communication delivered to the Borrower in accordance with the terms of this
Section 10.2 shall constitute and be deemed delivery of such notice, request,
demand or communication to each Credit Party.

 

10.3                        No Waiver; Remedies.  No failure on the part of the
Lender to exercise, and no delay in exercising, any right hereunder, or under
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder, or under any other Loan Document
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

 

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10.4                        Costs, Expenses and Taxes.  The Borrower and the
other Credit Parties agree to pay on demand all reasonable costs and expenses of
the Lender in connection with the negotiation, preparation, execution, and
delivery of this Agreement, the other Loan Documents and the other documents and
Instruments to be delivered hereunder, including, without limitation the
reasonable fees and expenses of all legal counsel and independent consultants to
the Lender and all other out-of-pocket expenses of the Lender up to US$100,000. 
The Borrower and the other Credit Parties agree to pay on demand all actual, out
of pocket reasonable costs and expenses of the Lender in connection with the
administration of this Agreement and the other Loan Documents,  including the
reasonable costs and expenses incurred by the Lender in connection with one
(1) annual site visit by the Lender to the Projects per year, and all reasonable
costs and expenses, if any, in connection with the protection of the Lender’s
rights with respect to and the enforcement of this Agreement, the other Loan
Documents and the other documents to be delivered hereunder (whether incurred
before, during or after commencement of any bankruptcy, reorganization or
insolvency actions pertaining to a Credit Party).  All such expenses will be
itemized in reasonable detail.  In addition, the Borrower and the other Credit
Parties agree to pay any and all stamp, mortgage recording and other Taxes,
filing fees, duties or charges payable or determined to be payable in connection
with the execution and delivery of this Agreement, the other Loan Documents and
the other documents to be delivered hereunder, and the Borrower and the other
Credit Parties agree to indemnify and save the Lender harmless from and against
any and all liabilities with respect to or resulting from any delay in paying or
omission to pay such Taxes, filing fees or charges.  The Borrower and the other
Credit Parties acknowledge that they shall pay all aforementioned costs,
expenses and taxes regardless of whether any Loan is advanced.

 

10.5                        Indemnification.  The Borrower and each other Credit
Party agree to indemnify the Lender and each of the Lender’s Affiliates and
their respective directors, partners, managers, members, owners, principals,
shareholders, officers, employees, agents, consultants and Representatives
(each, an “Indemnified Party” and collectively, the “Indemnified Parties”), from
and against, and to defend and hold each of the Indemnified Parties harmless
from, any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, fines, suits, costs, assessments, charges, claims, Taxes and Other
Taxes (other than Excluded Taxes), expenses, payments or disbursements of any
kind whatsoever, including attorneys’ fees and expenses (collectively “Losses”)
which may at any time (including, without limitation, at any time following the
payment of the Obligations) be imposed on, incurred or suffered by or asserted
against any Indemnified Party in any way relating to or arising out of (a) this
Agreement or any other Loan Document or any Instrument contemplated by or
referred to herein or therein, or the transactions contemplated hereby or
thereby, or (b) a breach or default (whether or not constituting a Default or
Event of Default) by any Credit Party, or (c) any action or proceeding brought
by or against an Indemnified Person due to its entering into or being a party to
any Loan Document or by reason of its exercising or performing, or causing the
exercise or performance of, any right, power, obligation or action under any
Loan Document, whether or not related to the enforcement of any Loan Document,
or (d) any act or omission of a Credit Party, or (e) the business or operations
of any Credit Party or the ownership, management, administration or operation of
the Projects, any Property or any other property of any Credit Party, except, in
each case, with respect to Losses arising entirely out of the gross negligence
or willful misconduct of the Lender or such Indemnified Party.  This
Section 10.5 shall survive the repayment of the Obligations, the repayment of
the Promissory Note and the termination of this Agreement.

 

49

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10.6        Binding Effect; Assignment.  This Agreement shall be binding upon
and inure to the benefit of the Borrower, the Credit Parties, the Lender and
their respective permitted successors and assigns.  The Borrower shall not have
the right to assign any of its rights or obligations hereunder or any interest
herein or in any other Loan Document without the prior written consent of the
Lender.  The Lender shall not have the right to assign any of its rights or
obligations hereunder or any interest herein or in any other Loan Document
without the prior written consent of the Borrower, except that, subject to
Governmental Requirements, the Lender may, at any time, without the consent of
the Borrower, assign to its respective successors and Affiliates all or any part
of this Agreement, the other Loan Documents and its Loan, and, to the extent of
such assignment, such assignee shall have the same obligations, rights and
benefits with respect to the Borrower as it would have had if it were the Lender
hereunder.

 

10.7        Governing Law.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
COLORADO, NOT INCLUDING THE CONFLICTS OF LAW AND CHOICE OF LAW PROVISIONS
THEREOF.

 

10.8        Dispute Resolution; Arbitration.  Each Party hereby waives the right
to trial by jury with respect to any Dispute between or among the Parties or
their Subsidiaries with respect to this Agreement, the other Loan Documents or
the transactions contemplated hereby or thereby, and each Party agrees to pursue
and resolve any such Dispute in accordance with the terms and provisions set
forth in Schedule 10.8, including resolution by binding arbitration as described
in Schedule 10.8.  Interim, provisional and other judicial measures and remedies
shall be available to the Parties as described in Schedule 10.8.

 

10.9        Execution in Counterparts; Facsimile Signatures.  This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.  This Agreement may be validly executed and delivered by facsimile,
portable document format (.pdf) or other electronic transmission, and a
signature by facsimile, portable document format (.pdf) or other electronic
transmission shall be as effective and binding as delivery of a manually
executed original signature.

 

10.10      Inconsistent Provisions.  In the event of any conflict between this
Agreement and any of the other Loan Documents, the provisions of this Agreement
shall govern and be controlling.

 

10.11      Severability.  If any provision hereof is determined to be
ineffective or unenforceable for any reason, the remaining provisions hereof
shall remain in effect, binding on the parties and enforceable at the election
of the Lender in its sole discretion.

 

10.12      Governing Language.  For all purposes, this English language version
of this Agreement shall be the original, governing instrument and understanding
of the parties.  In the event of any conflict between this English language
version of the Agreement and any subsequent translation into any other language,
this English language version shall govern and control.

 

50

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10.13      Survival of Representations and Warranties.  All representations and
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the making of any Loan.

 

10.14      Entire Agreement; Schedules and Exhibits.  The Schedules to this
Agreement and the Exhibits to this Agreement form an integral part of this
Agreement and are incorporated herein by reference and expressly made a part
hereof.  This Agreement constitutes the entire agreement among the Parties with
respect to the subject matter hereof, superseding all prior statements,
representations, discussions, agreements and understandings, oral or written,
relating to such subject matter, including all term sheets and commitment
letters.

 

10.15      Further Assurances.  Each Credit Party shall execute, acknowledge and
deliver to the Lender such other and further documents, certificates and
Instruments and do or cause to be done such other acts as the Lender reasonably
determines to be necessary or desirable to effect the intent of the parties to
this Agreement or otherwise to protect and preserve the interests of the Lender
hereunder, promptly upon request of the Lender, including the execution and
delivery of any and all documents, certificates and Instruments which are
necessary or advisable to create, protect, maintain or perfect in favor of the
Lender, Liens on all Collateral of the Credit Parties.

 

10.16      Credit Party Joint and Several Liability.

 

(a)           The Borrower and the other Credit Parties are engaged in related
businesses and are integrated to such an extent that the financial strength and
flexibility of each Credit Party has a direct, tangible and immediate impact on
the success of the other Credit Parties.  Each Guarantor will derive substantial
direct and indirect benefit from the extension of the Loan to the Borrower
hereunder.  Each Guarantor waives any right to revoke, terminate or suspend its
Guarantee and acknowledges that it entered into such Guarantee in contemplation
of the benefits that it would receive by this Agreement.

 

(b)           Each of the Credit Parties is accepting joint and several
liability hereunder in consideration of the financial accommodation to be
provided by the Lender under this Agreement, for the mutual benefit, directly
and indirectly, of each of the Credit Parties and in consideration of the
undertakings of each of the Credit Parties to accept joint and several liability
for the obligations of each of them.  Each of the Credit Parties jointly and
severally hereby irrevocably and unconditionally accepts joint, several and
primary liability with the other Credit Parties with respect to the payment and
performance of all of the Obligations.  To the extent that any of the Credit
Parties shall fail to make any payment or performance with respect to any of the
Obligations, then the other Credit Parties will do so, when and as due.

 

(c)           Each Guarantor agrees that its obligation with respect to the
full, prompt and complete payment and performance when due of the Loan and the
Obligations is as a primary obligor and not merely as a surety.  In furtherance
of the foregoing, each Guarantor hereby irrevocably and unconditionally agrees
to pay, indemnify, save and hold harmless, and defend the Lender, its successors
and assigns, and each of its respective directors, officers, partners, managers,
members, shareholders, owners, employees, affiliates, representatives and
advisors from and against any and all claims, damages, losses, penalties,
liabilities, judgments,

 

51

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suits, proceedings, taxes, costs and expenses (including, without limitation,
fees and disbursements of counsel) which may at any time (including, without
limitation, at any time following the payment of the Obligations or any Loan
Document) be imposed on, incurred by or asserted against any such indemnified
person, in any way relating to, in connection with or arising out of this
Agreement, any other Loan Document and the transactions contemplated hereby and
thereby and any claim, investigation, subpoena, litigation, proceeding or
otherwise related to or arising out of this Agreement or any other Loan Document
or any transaction contemplated hereby or thereby (but in any case excluding any
such claims, damages, losses, liabilities, costs or expenses incurred by reason
of the gross negligence or willful misconduct of any indemnitee), including with
respect to the repayment of the Loan, all interest thereon, all fees associated
therewith and all other amounts due under this Agreement and the Promissory
Note, in each case in compliance with the terms and conditions of this Agreement
and the Promissory Note.  The indemnification obligations of each Guarantor
under this paragraph shall survive the payment in full of the Agreement and the
other Loan Documents and the termination and release of its Guarantee and this
Agreement.

 

10.17      Acknowledgements.  Each of the parties hereto hereby acknowledges
that:

 

(a)           it has been advised by its own legal counsel in the negotiation,
preparation, execution and delivery of this Agreement and each other Loan
Document;

 

(b)           this Agreement and the other Loan Documents shall not be construed
against any party or more favourably in favor of any party based upon which
party drafted the same, it being agreed and acknowledged that all parties
contributed substantially to the negotiation and preparation of this Agreement
and the other Loan Documents;

 

(c)           the Lender has no fiduciary relationship with or duty to the
Borrower or any other Credit Party arising out of or in connection with this
Agreement or any other agreement, arrangement, Instrument or investment, and the
relationship between the Lender, on one hand, and the Borrower and the other
Credit Parties, on the other hand, in connection herewith is solely that of
debtor and creditor;

 

(d)           neither this Agreement nor any other Loan Document to which any
Credit Party and the Lender is a party creates a joint venture, partnership,
agency relationship or fiduciary duty, and no joint venture, partnership, agency
relationship or fiduciary duty shall be deemed to exist, between the Lender and
the Borrower or between the Lender and any other Credit Party;

 

(e)           the Lender is and has been acting solely as a principal and the
Lender has not been, is not, and will not be, acting as an advisor, agent or
fiduciary for the Borrower or any Credit Party;

 

(f)            the Lender may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrower, the Credit Parties and
their Affiliates, and the Lender has no obligation to disclose any of such
interests to the Borrower, the Credit Parties or their Affiliates; and

 

52

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(g)           no Credit Party will claim that any Lender has rendered advisory
services of any nature or with respect to, or owes a fiduciary or similar duty
to, any Credit Party in connection with this Agreement, the other Loan
Documents, the transactions contemplated hereby or thereby, or the process
leading thereto.

 

remainder of this page intentionally blank

 

53

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date first
above written.

 

 

BORROWER:

 

 

 

URANIUM RESOURCES, INC.

 

 

 

 

 

By:

/s/ Thomas H. Ehrlich

 

Name:

Thomas H. Ehrlich

 

Title:

Vice President, Secretary, Treasurer and Chief Financial Officer

 

 

 

 

GUARANTORS:

 

 

 

 

URI, INC.

 

 

 

 

 

 

 

By:

/s/ Thomas H. Ehrlich

 

Name:

Thomas H. Ehrlich

 

Title:

Vice President, Secretary, Treasurer and Chief Financial Officer

 

 

 

 

HYDRO RESOURCES, INC.

 

 

 

 

 

 

 

By:

/s/ Thomas H. Ehrlich

 

Name:

Thomas H. Ehrlich

 

Title:

Vice President, Secretary, Treasurer and Chief Financial Officer

 

 

 

 

URI MINERALS, INC.

 

 

 

 

 

 

 

By:

/s/ Thomas H. Ehrlich

 

Name:

Thomas H. Ehrlich

 

Title:

Vice President, Secretary, Treasurer and Chief Financial Officer

 

 

 

 

BELT LINE RESOURCES, INC.

 

 

 

 

 

 

 

By:

/s/ Thomas H. Ehrlich

 

Name:

Thomas H. Ehrlich

 

Title:

Vice President, Secretary, Treasurer and Chief Financial Officer

 

Signature Page to Bridge Loan Agreement

 

--------------------------------------------------------------------------------

 

 

URANCO INC.

 

 

 

 

 

 

 

By:

/s/ Thomas H. Ehrlich

 

Name:

Thomas H. Ehrlich

 

Title:

Vice President, Secretary, Treasurer and Chief Financial Officer

 

 

 

 

HRI-CHURCHROCK, INC.

 

 

 

 

 

 

 

By:

/s/ Thomas H. Ehrlich

 

Name:

Thomas H. Ehrlich

 

Title:

Vice President, Secretary, Treasurer and Chief Financial Officer

 

 

 

 

URI NEUTRON HOLDINGS I, INC.

 

 

 

 

 

 

 

By:

/s/ Thomas H. Ehrlich

 

Name:

Thomas H. Ehrlich

 

Title:

Vice President, Secretary, Treasurer and Chief Financial Officer

 

 

 

 

URI NEUTRON HOLDINGS II, INC.

 

 

 

 

 

 

 

By:

/s/ Thomas H. Ehrlich

 

Name:

Thomas H. Ehrlich

 

Title:

Vice President, Secretary, Treasurer and Chief Financial Officer

 

 

 

 

HYDRO RESTORATION CORPORATION

 

 

 

 

 

 

 

By:

/s/ Thomas H. Ehrlich

 

Name:

Thomas H. Ehrlich

 

Title:

Vice President, Secretary, Treasurer and Chief Financial Officer

 

Signature Page to Bridge Loan Agreement

 

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NEUTRON ENERGY, INC.

 

 

 

 

 

 

 

By:

/s/ Thomas H. Ehrlich

 

Name:

Thomas H. Ehrlich

 

Title:

Vice President, Secretary, Treasurer and Chief Financial Officer

 

 

 

 

CIBOLA RESOURCES LLC

 

 

 

 

 

 

 

By:

/s/ Thomas H. Ehrlich

 

Name:

Thomas H. Ehrlich

 

Title:

Vice President, Secretary, Treasurer and Chief Financial Officer

 

Signature Page to Bridge Loan Agreement

 

--------------------------------------------------------------------------------

 

 

LENDER:

 

 

 

 

RESOURCE CAPITAL FUND V L.P.

 

 

 

 

By:

Resource Capital Associates V L.P.,

 

 

General Partner

 

 

 

 

 

 

By:

RCA V GP Ltd.,

 

 

 

General Partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ Catherine J. Boggs

 

 

 

Catherine J. Boggs,

 

 

 

General Counsel

 

Signature Page to Bridge Loan Agreement

 

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EXHIBIT A

 

FORM OF OMNIBUS CERTIFICATE

 

I, Thomas H. Ehrlich, Vice President, Secretary, Treasurer and Chief Financial
Officer of each of Uranium Resources, Inc., a Delaware corporation (the
“Borrower”), URI, Inc., a Delaware corporation (“URI”), Hydro Resources, Inc., a
Delaware corporation (“Hydro Resources”), URI Minerals, Inc., a Delaware
corporation (“URI Minerals”), Hydro Restoration Corporation, a Delaware
corporation (“Hydro Restoration”), Belt Line Resources, Inc., a Texas
corporation (“Belt Line”), Uranco, Inc., a Delaware corporation (“Uranco”),
HRI-Churchrock, Inc., a Delaware corporation (“HRI”), URI Neutron Holdings
I, Inc., a Delaware corporation (“Neutron Holdings I”), URI Neutron Holdings
II, Inc., a Delaware corporation (“Neutron Holdings II”), Neutron Energy, Inc.,
a Nevada corporation (“Neutron”), and Cibola Resources LLC, a Delaware limited
liability company (“Cibola” and together with the Borrower, URI, Hydro
Resources, URI Minerals, Hydro Restoration, Belt Line, Uranco, HRI, Neutron
Holdings I, Neutron Holdings II and Neutron, the “Credit Parties”), for and on
behalf of each Credit Party and without personal liability, DO HEREBY CERTIFY to
Resource Capital Fund V L.P. (the “Lender”), in the undersigned’s capacity as
Vice President, Secretary, Treasurer and Chief Financial Officer of each Credit
Party, that:

 

1.              This Certificate is furnished pursuant to the Bridge Loan
Agreement (the “Loan Agreement”) dated December 17, 2012, among the Borrower, as
the borrower, those Subsidiaries from time to time party thereto, as the
guarantors, and the Lender, as the lender.  Unless otherwise defined herein,
capitalized terms used in this Certificate have the meanings assigned to such
terms in the Loan Agreement.

 

2.              I have made or caused to be made such examinations or
investigations as are, in my opinion, necessary to fully inform myself of the
matters addressed in this Certificate and to make the statements below, and I
have furnished this Certificate with the intent that it may be relied upon by
the Lender as a basis for the consummation of the transactions contemplated by
the Loan Agreement.

 

3.              A true and complete copy of the Certificate of Incorporation,
Articles of Incorporation or Certificate of Formation, as applicable, of each
Credit Party (the “Articles”) are attached to this Certificate and marked as
Attachments I-A through I-L.  The Articles are in full force and effect and have
not been further amended as of or prior to the date hereof and no proceedings
have been taken to amend, supplement, surrender or cancel the Articles.

 

4.              A true and complete copy of the By-laws of each Credit Party
other than Cibola (collectively, the “By-laws”) is attached to this Certificate
as Attachments II-A through II-K. The By-laws are in full force and effect and
have not been further amended as of or prior to the date hereof and no
proceedings have been taken or are pending to amend, supplement, revoke or
repeal any of the By-laws.

 

5.              Attached hereto as Attachments III-A through III-E is a true,
correct and complete copy of resolutions duly adopted by the Board of Directors
or the Sole Member and Manager, as applicable, of the Borrower dated
November 26, 2012 and each other Credit Party on December 17, 2012, which
resolutions have not been revoked, modified, amended or rescinded and are still
in full force and effect, and the Loan Agreement and the other

 

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Loan Documents to be executed by the Credit Parties are in substantially the
form of such documents submitted to and approved by the Board of Directors or
Sole Member and Manager, as applicable, of each Credit Party in such
resolutions.

 

6.              Attached hereto as Attachments IV-A through IV-L is a copy of a
certificate of good standing or existence, as applicable, of each Credit Party
as of a recent date by the Secretary of State of its jurisdiction of
incorporation or organization, as applicable. No Credit Party has taken any
action to terminate its corporate or limited liability existence, as applicable,
since the date hereof.

 

7.              The persons named in Attachment V attached hereto are duly
elected officers of each Credit Party holding the respective offices set forth
therein opposite their names, and the signatures set forth therein opposite
their names are their genuine signatures.

 

8.              No steps or proceedings have been taken by any Credit Party or,
to the undersigned’s knowledge, any other person in respect of the dissolution
of such Credit Party. As at the date hereof, no Credit Party has taken any steps
to terminate its existence or to change its existence in any way (including,
without limitation, by way of reorganization, amalgamation, merger, arrangement
or continuation in another jurisdiction) and no such steps are contemplated by
any Credit Party or, to the best of the undersigned’s knowledge, any other
person.

 

9.              No Credit Party is insolvent and no acts or proceedings have
been taken by or against any Credit Party in connection with, no Credit Party
has received any notice in respect of, no Credit Party is in the course of, and
no proceedings have been taken by any Credit Party or, to the undersigned’s
knowledge, any other person in respect of, the liquidation, winding-up,
dissolution, bankruptcy, insolvency, reorganization or receivership of such
Credit Party or the cancellation, termination or revocation of its articles, and
no such acts or proceedings are contemplated by any Credit Party or, to the best
of the undersigned’s knowledge, any other person.

 

10.       All approvals, consents and authorizations of Governmental
Authorities, the shareholders or members of each Credit Party, as applicable, or
other Persons required in connection with the Loan Agreement and the other Loan
Documents have been obtained and are in effect.

 

11.       Each Credit Party’s principal place of business and its chief
executive office and principal place of residence is located in the State of
Texas.

 

12.       Each Credit Party has performed and complied with all agreements and
conditions in the Loan Agreement and the other Loan Documents required to be
performed and complied with on or prior to the date hereof, except those
agreements and conditions waived by Lender.

 

13.       No Default or Event of Default exists under the Loan Agreement or any
other Loan Document or will exist under the Loan Agreement or any other Loan
Document upon the advance of the Loan to the Company thereunder and the
consummation of the transactions contemplated thereby.

 

14.       The representations and warranties of the Credit Parties set forth in
the Loan Agreement and the other Loan Documents are true and correct as of the
date hereof.

 

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15.       There is no pending or, to the knowledge of the undersigned,
threatened action or proceeding before any Governmental Authority against or
affecting any Credit Party or any Project which could reasonably be expected to
have a Material Adverse Effect on any Credit Party.

 

16.       Since December 31, 2011, there has been no change, event or occurrence
that has had, or could reasonably be expected to have, a Material Adverse Effect
on any Credit Party.

 

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EXHIBIT B

 

FORM OF NOTICE OF BORROWING

 

TO:                         Resource Capital Funds V L.P.

1400 Sixteenth Street, Suite 200

Denver, CO 80202

 

DATE:  December 17, 2012

 

This Notice of Borrowing is delivered pursuant to that certain Bridge Loan
Agreement (as it may be amended, restated, replaced, supplemented or otherwise
modified from time to time, the “Loan Agreement”) dated December 17, 2012 by and
among Uranium Resources, Inc., a corporation organized and existing under the
laws of the State of Delaware, as the borrower (“Borrower”), those Subsidiaries
of the Borrower from time to time party thereto, as guarantors, and Resource
Capital Fund V L.P., as the lender (“Lender”).

 

Unless otherwise defined herein, capitalized terms used in this Notice of
Borrowing have the meanings assigned to such terms in the Loan Agreement.

 

This Notice of Borrowing is irrevocable and represents the Borrower’s request to
borrow the Loan, and the following information is provided pursuant to
Section 2.2(a) of the Loan Agreement.

 

1. Date of Requested Borrowing:

December 18, 2012

 

 

2. Amount of Requested Loan:

$5,000,000.00

 

 

3. Proposed Use of Borrowing:

General working capital purposes in accordance with the Work Program and Budget

 

The distribution of the Loan requested hereby may be made for the credit of the
Borrower to the Borrower’s Account by wire transfer of the funds to:

 

Name of Bank:

Address of Bank:

Account Name:

Account Number:

ABA Number:

 

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The Borrower and the undersigned officer to the best of his knowledge in his
capacity as an officer of the Borrower, each certifies that:

 

(a)                                 the representations and warranties made by
the Credit Parties in the Loan Agreement, in the Security Documents or which are
contained in any certificate furnished at any time under or in connection with
the Loan Agreement are true and correct on and as of the date set forth above as
if made on and as of such date, except for representations and warranties
expressly stated to relate to a specific earlier date;

 

(b)                                 no Default or Event of Default has occurred
and is continuing on the date set forth above or will occur after giving effect
to the Loan;

 

(c)                                  there does not exist any litigation,
investigation, bankruptcy or insolvency, injunction, order or claim affecting or
relating to any Credit Party or any of its Subsidiaries, or any Project, which
has had, or could reasonably be expected to have, a Material Adverse Effect, or
which could reasonably be expected to affect the legality, validity or
enforceability of the Loan Agreement or any other Loan Document, that has not
been settled, dismissed, vacated, discharged or terminated;

 

(d)                                 no Borrower, Guarantor or any Project has
incurred or suffered a Material Adverse Effect; and

 

(e)                                  all conditions set forth in Section 2.2 and
Section 5.1 of the Loan Agreement have been, and shall remain, satisfied; the
Borrower hereby certifies the satisfaction of all such conditions precedent
(that have not been waived by the Lender in its sole discretion) by its delivery
of this Notice of Borrowing.

 

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EXHIBIT C

 

FORM OF SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (as amended, modified, supplemented, restated or
replaced from time to time, the “Agreement”) is made as of December 17, 2012 by
URANIUM RESOURCES, INC., a corporation organized and existing under the laws of
the State of Delaware (the “Borrower”) and the Guarantor Debtors (defined below)
from time to time party hereto (with the Borrower and the Guarantor Debtors
being collectively and individually referred to as the “Debtor”)  in favor and
for the benefit of RESOURCE CAPITAL FUND V L.P. (with its successors and
assigns, the “Secured Party”).

 

Recitals

 

A.                                    Pursuant to that certain Bridge Loan
Agreement of even date herewith (as amended, modified, supplemented, extended or
restated from time to time, the “Loan Agreement”), by and among the Borrower, as
the borrower, those Subsidiaries of the Borrower from time to time party
thereto, as guarantors, and the Secured Party, as the lender, the Secured Party
has agreed to make a loan to the Borrower (the “Loan”) to be used by the
Borrower as set forth in the Loan Agreement.  Unless otherwise defined herein,
capitalized terms used in this Agreement have the meanings assigned to such
terms in the Loan Agreement.

 

B.                                    Pursuant to that certain Guarantee of even
date herewith (as amended, modified, supplemented, extended or restated from
time to time, the “Guarantee”) each Guarantor Debtor unconditionally and
irrevocably guaranteed the repayment and performance of the Loan Agreement and
the other Loan Documents, as more particularly described therein.

 

C.                                    Each Guarantee Debtor is a direct or
indirect wholly-owned Subsidiary of the Borrower.  Each Guarantee Debtor expects
to derive substantial direct and indirect benefit from the Loan Agreement, the
amounts made available under the Loan Agreement and from such financial and
other support as the Borrower may in the future provide to such Guarantor
Debtor.  The Guarantor Debtors and the Borrower are engaged in related
businesses and are integrated to such an extent that the financial strength and
flexibility of each of them has a direct, tangible and immediate impact on the
success of the other.  Each Guarantee Debtor is interest in and will be
financially benefited by the business success of the Borrower and has entered
into this Agreement and the other Loan Documents for legitimate business
purposes.

 

D.                                    It is a condition precedent to the Secured
Party entering into and maintaining the Loan Agreement and to making the Loan
thereunder that each Debtor shall have executed and delivered this Agreement to
secure the payment and performance of the Loan Agreement and the other Loan
Documents, all as more fully described herein.

 

E.                                     In order to secure the prompt and
complete payment and performance of all indebtedness, guaranties, duties,
covenants, agreements and obligations owing or to be owed by each Debtor to the
Secured Party, and as a condition to the Secured Party entering into the Loan

 

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Agreement and making the Loan to the Borrower, each Debtor has agreed to execute
and deliver this Agreement to the Secured Party.

 

Agreement

 

NOW THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Debtor and the Secured Party hereby agree as follows:

 

ARTICLE I
DEFINITIONS AND INTERPRETATION

 

1.1                               Definitions.

 

(a)                                 Unless otherwise defined herein or in the
Loan Agreement, capitalized terms used herein that are defined in the UCC shall
have the meanings assigned to them in the UCC.

 

(b)                                 The following terms shall have the following
meanings:

 

“Agreed Priority”  means with respect to this Agreement and each Lien made in
favour of the Secured Party, a senior, perfected, first priority Lien in favour
of the Secured Party, meaning that such Agreement and Lien are prior in right to
any other Lien (other than Permitted Liens) in, on, or to the Collateral which
is purported to be covered thereby.

 

“Agreement” shall have the meaning assigned to such term in the Preamble hereof.

 

“Collateral” means all of the personal property of each Debtor, including,
without limitation, all right, title and interest of each Debtor, whether now
owned or existing or hereafter acquired or arising, and wheresoever located, in,
to and under (with each of the following capitalized terms having the meaning
given thereto in the UCC):

 

(i)                                     all Accounts;

 

(ii)                                  all As-Extracted Collateral;

 

(iii)                               all Chattel Paper;

 

(iv)                              all Commercial Tort Claims;

 

(v)                                 all Commodity Accounts;

 

(vi)                              all Commodity Contracts;

 

(vii)                           all Deposit Accounts;

 

(viii)                        all Documents;

 

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(ix)                              all Equipment;

 

(x)                                 all Fixtures;

 

(xi)                              all General Intangibles;

 

(xii)                           all Goods and all Accessions thereto, and Goods
with which the Goods are commingled;

 

(xiii)                        all Instruments;

 

(xiv)                       all Intellectual Property;

 

(xv)                          all Inventory;

 

(xvi)                       all Investment Property;

 

(xvii)                    all Letter-of-Credit Rights;

 

(xviii)                 all Promissory Notes;

 

(xix)                       all Software;

 

(xx)                          all other personal property not otherwise
described above;

 

(xxi)                       all books and records pertaining to the Collateral;
and

 

(xxii)                    to the extent not otherwise included, all Proceeds,
products, income and profits of the foregoing, and all accessions thereto and
all collateral security and guarantees given by any Person with respect to any
of the foregoing.

 

Notwithstanding the foregoing, “Collateral” shall not include “Excluded Assets”
(as defined below) until such time as the prohibitions causing such property to
be Excluded Assets have terminated (howsoever occurring); upon the termination
of such prohibitions, the Secured Party will be deemed to automatically have and
at all times from and after the date hereof to have had, without the taking of
any action or delivery of any instrument, a security interest in such Excluded
Assets, and each Debtor agrees to take all actions necessary in the reasonable
judgment of the Secured Party, if any, to perfect such security interest.

 

“Debtor” means, collectively, the Borrower and the Guarantor Debtors.

 

“Event of Default” means any of the events described in Article VI hereof.

 

“Excluded Assets” means any contract, agreement, permit or license (together
with the Equipment, Fixtures or Goods subject to any such contract, agreement,
permit or license) to the extent that such Debtor is validly prohibited from
granting a security interest in

 

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such contract, agreement, permit or license (and the Equipment, Fixtures or
Goods subject thereto) pursuant to the terms thereof, but only to the extent
that such prohibition is not invalidated under the UCC.

 

“Governmental Requirement” means any law, statute, code, ordinance, treaty,
order, rule, regulation, judgment, ruling, decree, injunction, franchise,
permit, certificate, license, authorization, approval or other direction or
requirement (including Environmental Laws, the Project Permits, energy
regulations, occupational, safety and health standards or controls, taxation
laws and Applicable Securities Legislation) of any Governmental Entity.

 

“Guarantee” shall have the meaning assigned to such term in the Recitals.

 

“Guarantor Debtors” means, collectively, each Guarantor that is a party to this
Agreement from time to time, including, without limitation, URI, Inc., a
Delaware corporation, Hydro Resources, Inc., a Delaware corporation, URI
Minerals, Inc., a Delaware corporation, Hydro Restoration Corporation, a
Delaware corporation, Belt Line Resources, Inc., a Texas corporation,
Uranco, Inc., a Delaware corporation, HRI-Churchrock, Inc., a Delaware
corporation, URI Neutron Holdings I, Inc., a Delaware corporation, URI Neutron
Holdings II, Inc., a Delaware corporation, Neutron Energy, Inc., a Nevada
corporation, Cibola Resources LLC, a Delaware limited liability company.

 

“Indemnified Party” shall have the meaning assigned to such term in
Section 8.11.

 

“Lien” means, as to any Person, any mortgage, deed of trust, debenture, lien,
pledge, charge, security interest, hypothecation, indenture, preferential right,
assignment, option, production payment or other lien, encumbrance or collateral
security Instrument in, on or to, or any right or interest, or the title of any
vendor, lessor, lender or other secured party to, or interest or title of any
Person under any conditional sale or other title retention agreement or capital
lease with respect to, any property or asset owned or held by such Person, the
signing of any mortgage, deed of trust, pledge, charge, security agreement,
hypothecation, indenture, assignment or similar instrument, or the signing or
filing of a financing statement, personal property security act filing or other
similar Instrument, which names such Person as debtor, or the signing of any
security agreement or other similar Instrument authorizing any other party as
the secured party thereunder to file any financing statement, personal property
security act filing or other similar Instrument.  A Person shall be deemed to be
the owner of any assets that it has placed in trust for the benefit of the
holders of its indebtedness, which indebtedness is deemed to be extinguished
under GAAP but for which such Person remains legally liable, and such trust
shall be deemed to be a Lien.

 

“Loan Agreement” shall have the meaning assigned to such term in the Recitals.

 

“Losses” shall have the meaning assigned to such term in Section 8.11.

 

“Necessary Endorsement” means undated stock powers endorsed in blank or other
proper instruments of assignment duly executed and such other instruments or
documents as the Secured Party may reasonably request.

 

“Obligations” shall mean the full, punctual and complete observance and
performance of all present and future duties, covenants, indebtedness,
indemnifications,

 

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responsibilities and obligations, monetary and otherwise, due to Secured Party
under the Loan Agreement, this Agreement or any other Loan Document (extending
to all principal amounts, interest, late charges, fees, prepayment fees, early
termination fees, costs and all other charges, sums and amounts, as well as all
costs and expenses payable by the Credit Parties under the Loan Agreement, this
Agreement and any other Loan Document), whether direct or indirect, contingent
or noncontingent, matured or unmatured, accrued or not accrued, joint or
several, arising as principal, guarantor, surety, accommodation party or
otherwise, whether or not now contemplated, whether or not any instrument or
agreement relating thereto specifically refers to this Agreement, as well as all
renewals, refinancings, consolidations, re-castings and extensions of any of the
foregoing.

 

“Obligor” shall mean individually and collectively, each Debtor and each
endorser, guarantor and surety of the Obligations; any person who is primarily
or secondarily liable for the repayment of the Obligations, or any portion
thereof; and any person who has granted security for the repayment of any of the
Obligations.

 

“Repayment Account” shall have the meaning assigned to such term in
Section 7.1(g).

 

“Secured Party” shall have the meaning assigned to such term in the Preamble
hereof.

 

“Subsidiary” means, in respect of any Person at any date, (i) any corporation,
company, limited liability company, association or other business entity of
which securities, membership interests or other ownership interests representing
fifty percent (50%) or more of the voting power of all equity interests are
owned or held, directly or indirectly, by such Person, (ii) any partnership,
limited liability company or joint venture wherein the general partner, managing
partner or operator is, directly or indirectly, such Person, or (iii) any other
Person that is otherwise directly or indirectly Controlled by such Person.

 

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
such United States jurisdiction that governs the perfection or priority of the
Secured Party’s security interest in any item or portion of the Collateral.

 

(c)                                  The rules of interpretation specified in
the Loan Agreement shall be applicable to this Agreement. Capitalized terms used
but not otherwise defined herein that are defined in the Loan Agreement shall
have the meanings given to them in the Loan Agreement.

 

(d)                                 The Secured Party and each Debtor agree that
the Schedules hereof and all descriptions of the Collateral contained in the
Schedules and all amendments and supplements thereto are and shall at all times
remain a part of this Agreement.

 

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ARTICLE II
GRANT OF SECURITY INTEREST AND OBLIGATIONS

 

2.1                               Security Interest.

 

(a)                                 As collateral security for the prompt and
complete payment and performance in full of all of the Obligations, each Debtor
hereby assigns, pledges and grants to the Secured Party a Lien on and continuing
security interest in and to, and pledge and assignment of, all of the right,
title and interest of such Debtor in, to and under the Collateral.

 

(b)                                 From and after the Closing Date, each Debtor
shall not permit to become effective in any document creating, governing or
providing for any permit, lease, license, contract, instrument, General
Intangible or other agreement, a provision that would prohibit the creation of a
Lien on such permit, lease, license, contract, instrument, General Intangible or
other agreement in favor of the Secured Party without the prior written consent
of the Secured Party.

 

(c)                                  The Secured Party’s security interest shall
continually exist until all Obligations have been paid and performed in full.

 

2.2                               Filings.  Each Debtor hereby irrevocably
authorizes the Secured Party at any time and from time to time to file in any
relevant jurisdiction any financing statements or other similar filings and
amendments thereto covering the Collateral that contain the information
required, with respect to each applicable jurisdiction, whether pursuant
Article 9 of the UCC or other Governmental Requirements, including (a) whether
such Debtor is an organization, the type of organization and any organizational
identification number issued to such Debtor, and (b) any financing or
continuation statements or other documents or instruments, without the signature
of such Debtor where permitted by law.  Each Debtor agrees to provide all
information described in the immediately preceding sentence to the Secured Party
promptly upon request by the Secured Party. Each Debtor agrees to pay all taxes,
fees and costs (including reasonable attorneys’ fees) paid or incurred by the
Secured Party in connection with the preparation, filing or recordation thereof.
 Each Debtor waives receipt of any such financing statements that are registered
by the Secured Party and any confirmation of registration.

 

ARTICLE III
Perfection; further assurances

 

3.1                               Further Assurances and Corrective
Instruments.  Each Debtor shall promptly make, execute, acknowledge and deliver,
or cause to be made, executed, acknowledged and delivered, all such additional
things, deeds, assurances, documents, acknowledgments, certificates and
instruments and to take such further acts as the Secured Party may in its
judgment deem necessary or appropriate to (a) protect, maintain and preserve the
Collateral; (b) protect, maintain and preserve the Secured Party’s security
interest in the Collateral; and (c) protect, vest in and assure to the Secured
Party its rights or remedies hereunder or in any of the Collateral and the
perfection and priority of its rights therein, including, without limitation,
placing legends on Collateral or on books and records pertaining to Collateral
stating that the Secured Party has a security interest therein.

 

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES

 

Each Debtor hereby makes the representations and warranties set forth in the
Loan Agreement as they relate to the Debtors, the Collateral or to the Loan
Documents to which such Debtor is a party, each of which is incorporated herein
as if set forth herein, and each Debtor further represents and warrants as
follows:

 

4.1                               State of Incorporation, Legal Name and
Identification Number.  Each Debtor’s name as it appears in official filings in
the state of organization, all prior names of such Debtor during the past five
years, as they appeared from time to time in official filings in the state of
its incorporation or organization, the type of entity of such Debtor (including
corporation, partnership, limited partnership or limited liability company),
organizational identification number issued by such Debtor’s state of
organization or a statement that no such number has been issued, such Debtor’s
state of organization, the location of such Debtor’s chief executive office,
principal place of business, all warehouses, consignees and processors with whom
Inventory or other Collateral is stored or located and other premises where
Collateral is stored or located (except with respect to Collateral in transit),
and the locations of its books and records concerning the Collateral are set
forth on Schedule 1 hereto.

 

4.2                               Filings.  No consent or authorization of,
filing with, notice to or other act by, or in respect of, any Governmental
Authority or any other Person is required in connection with the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the Loan Documents or, with respect to personal property described herein which
can be perfected under Article 9 of the UCC by filing a financing statement, the
perfection of the security interests granted hereby, except the filings referred
to in Schedule 2.

 

4.3                               No Contravention.  The execution, delivery and
performance of this Agreement and the granting of a Lien in favor of the Secured
Party pursuant hereto will not violate any requirement of Law or any contractual
obligation of any Debtor and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or assets pursuant
to any requirement of Law or any such contractual obligation (other than the
Liens created by the Loan Documents).

 

4.4                               Ownership of Property and No Other Liens. 
Each Debtor has good title to, or a valid leasehold interest in, all the
Collateral, and none of such property is subject to any Lien, claim, option or
right of others, except for Permitted Liens. No person other than the Secured
Party has control or possession of all or any part of the Collateral, except as
permitted by the Loan Agreement.

 

4.5                               Valid Security Interest.  This Agreement
creates, in favor of the Secured Party, a valid security interest in the
Collateral, subject only to Permitted Liens, securing the payment and
performance of the Obligations.  Upon the making of the filings described in
Section 2.2 and the filing of any continuation statements required by the UCC,
the Secured Party will have and will continue to have as security for the
Obligations a valid and perfected Lien, with the Agreed Priority, on all the
Collateral which may be perfected by filing UCC financing statements, free of
all other Liens, claims and rights of third parties whatsoever, except for
Permitted Liens.  Except

 

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for the filing of UCC financing statements and the delivery of the certificates
and other instruments provided in Section 3.1 and Section 5.5, and the execution
of any control agreement, no action is necessary to create, perfect or protect
the security interests created in the Collateral.  Without limiting the
generality of the foregoing, except for the filing of said financing statements,
no consent of any third parties and no authorization, approval or other action
by, and no notice to or filing with, any Governmental Authority or regulatory
body is required for (a) the execution, delivery and performance of this
Agreement, (b) the creation or perfection of the Security Interests created
hereunder in the Collateral or (c) the enforcement of the rights of the Secured
Party hereunder.  If any, all required consents (including, without limitation,
from stockholders or creditors of any Debtor) necessary for such Debtor to enter
into and perform its obligations hereunder have been obtained.

 

4.6                               No Transfer of Collateral.  Except as
permitted by the Loan Agreement, each Debtor shall not sell, offer to sell,
dispose of, convey, assign or otherwise transfer, or grant any option with
respect to, restrict, or grant, create, permit or suffer to exist any Lien on,
any of the Collateral pledged by it hereunder or any interest therein except for
the Permitted Liens.

 

4.7                               Commercial Purpose.  This Agreement and the
transactions contemplated by the Loan Documents do not constitute a “consumer
transaction” as defined in the UCC. None of the Collateral was or will be
purchased or held primarily for personal, family or household purposes and no
Deposit Account is used primarily for personal, family or household purposes.

 

4.8                               Patents, Trademarks, etc.  Each Debtor owns,
possesses or has the right to use all necessary patents, patent rights,
licenses, trademarks, trade names, trade name rights, copyrights and franchises
to conduct its business, without any known conflict with any patent, patent
right, license, trademark, trademark rights, trade name right, trade name,
copyright or franchise right of any other person.  As of the date hereof, each
Debtor does not have any interest in, or title to, any patent, trademark or
registered copyright.

 

4.9                               Consents, etc.  During the occurrence and
continuation of an Event of Default, in the event that the Secured Party desires
to exercise any remedies, voting or consensual rights or attorney-in-fact powers
set forth in this Agreement and determines it necessary to obtain any approvals
or consents of any Governmental Entity or any other person therefor, then, upon
the reasonable request of the Secured Party, each Debtor agrees to use its best
efforts to assist and aid the Secured Party to obtain as soon as practicable any
necessary approvals or consents for the exercise of any such remedies, rights
and powers.

 

4.10                        Financing Statements and Other Filings; Maintenance
of Perfected Security Interest.  Each Debtor represents and warrants that all
financing statements, agreements, instruments and other documents necessary to
perfect the pledge and security interest granted by it to the Secured Party in
respect of the Collateral, which may be perfected by filing a UCC financing
statement, have been delivered to the Secured Party in completed and, to the
extent necessary or appropriate, duly executed form for filing in each
governmental, municipal or other office necessary for the perfection of such
interest.  Each Debtor agrees that at the sole cost and expense of such Debtor,
such Debtor will take all actions necessary and otherwise cooperate with Secured
Party to maintain the security interest created by this Agreement in the
Collateral as a perfected security interest, with the Agreed Priority, to the
extent required hereunder.

 

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4.11                        Recitals.  The Recitals are true and correct in all
respects.

 

ARTICLE V
COVENANTS

 

Each Debtor covenants and agrees with the Secured Party that, until the security
interest created herein is discharged, each Debtor will perform and fulfill each
of the affirmative and negative covenants in the Loan Agreement applicable to
the Borrower and each Debtor and each of the following:

 

5.1                               Conferences with Officers and Others.  At all
times, each Debtor will permit the Secured Party, its agents, advisors and
representatives to (a) access all of such Debtor’s properties and facilities,
(b) discuss such Debtor’s business, affairs, finances and accounts with any
officers, managers and employees of such Debtor, and (c) review, inspect and
audit the Collateral, wherever located, and each Debtor shall pay all reasonable
costs of such activities described in (a), (b) and (c), in each case in
accordance with the procedures for inspection set forth in the Loan Agreement.

 

5.2                               Defend Collateral.  Except for Permitted
Liens, each Debtor will maintain the Liens and security interests provided for
hereunder as valid and perfected Liens, each with the Agreed Priority, and
security interests in the Collateral in favor of the Secured Party until this
Agreement and the security interests hereunder shall be terminated pursuant
hereto.  Each Debtor hereby agrees to (a) promptly pay when due all
transportation, storage, warehousing, mechanics, materialmen, construction,
maintenance and other such charges, fees, expenses or amounts affecting or
arising out of or relating to the Collateral; and (b) use commercially
reasonable efforts to defend the Collateral against the claims of any and all
Persons and entities; and (c) safeguard and protect all Collateral for the
account of the Secured Party.

 

5.3                               Maintain Name and Jurisdiction.  Each Debtor
shall not: (a) change its legal name, identity, type of organization or
organizational structure without the prior written consent of the Secured Party,
which consent will not be unreasonably withheld; (b) change the location of its
chief executive office or its principal place of business; (c) change its
federal taxpayer identification number or organizational identification number
(if any); or (d) change its jurisdiction of organization (including by merger,
reorganization, dissolving, liquidating, reincorporating or incorporating in any
other jurisdiction).

 

5.4                               Insurance.  Each Debtor will maintain
comprehensive casualty insurance on the Collateral as required pursuant to
Section 8.1(m) of the Loan Agreement. Each Debtor hereby assigns to the Secured
Party and grants to the Secured Party a security interest in any and all
proceeds of such policies and authorizes and empowers the Secured Party, after
the occurrence and during the continuance of an Event of Default, to adjust or
compromise any loss under such policies and to collect and receive all such
proceeds.  Each Debtor hereby authorizes and directs each insurance company to
pay all such proceeds directly and solely to the Secured Party and not to such
Debtor and the Secured Party jointly, effective upon the occurrence and during
the continuance of an Event of Default.  Effective upon the occurrence and
during the continuance of an Event of Default, each Debtor authorizes and
empowers the Secured Party to execute and endorse in such Debtor’s name all
proofs of loss, drafts, checks and any other documents or

 

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instruments necessary to accomplish such collection, and any persons making
payments to the Secured Party under the terms of this paragraph are hereby
relieved absolutely from any obligation or responsibility to see to the
application of any sums so paid.  After deduction from any such proceeds of all
costs and expenses (including attorneys’ fees) incurred by the Secured Party in
the collection and handling of such proceeds, the net proceeds shall be applied
as follows.  If no Event of Default shall have occurred and be continuing, such
net proceeds may be applied either toward replacing or restoring the Collateral
(at such Debtor’s option), in a manner and on terms satisfactory to the Secured
Party, or as a credit against such of the Obligations, whether matured or
unmatured, as the Secured Party shall determine in the Secured Party’s sole (but
reasonable) discretion.  In the event that such Debtor may and does elect to
replace or restore as aforesaid, then such net proceeds shall be deposited in a
segregated account of such Debtor at a bank acceptable to such Debtor and the
Secured Party subject to the sole order of the Secured Party and shall be
disbursed therefrom by the Secured Party in such manner and at such times as the
Secured Party deems appropriate to complete such replacement or restoration;
provided, however, that if an Event of Default shall occur and continue at any
time before or after replacement or restoration has commenced, then thereupon
the Secured Party shall have the option to apply all remaining net proceeds
either toward replacing or restoring the Collateral, in a manner and on terms
satisfactory to the Secured Party, or as a credit against such of the
Obligations, whether matured or unmatured, as the Secured Party shall determine
in the Secured Party’s sole discretion.  If an Event of Default shall have
occurred prior to such deposit of the net proceeds and so long as an Event of
Default is continuing, then the Secured Party may, in its sole discretion, apply
such net proceeds either toward replacing or restoring the Collateral, in a
manner and on terms satisfactory to the Secured Party, or as a credit against
such of the Obligations, whether matured or unmatured, as the Secured Party
shall determine in the Secured Party’s sole discretion.

 

5.5                               Provision of Documents; Additional Collateral
Security.  Whenever required by the Secured Party, each Debtor shall, and shall
cause the other Credit Parties to: (a) cooperate with the Secured Party to
promptly obtain and keep in effect one or more control agreements in Deposit
Account, Electronic Chattel Paper, Investment Property and Letter-of-Credit
Rights Collateral; (b) deliver or cause to be delivered to the Secured Party any
and all certificates and other instruments representing or evidencing any
Collateral that is Investment Property, together with all Necessary
Endorsements; (c) identify and inform the Secured Party with respect to each
Deposit Account of such Debtor and each other Credit Party and enter into a
control agreement with respect thereto; and (d) promptly deliver to the Secured
Party, with all endorsements and/or assignments required by the Secured Party,
all Instruments, Chattel Paper, guaranties and the like held received by such
Debtor constituting, evidencing or relating to any of the Collateral or proceeds
of any of the Collateral.  In the event that the Secured Party requires a
control account agreement with respect to a Deposit Account to be obtained, each
Debtor shall use its best effort to obtain such agreements within 30 days of the
Secured Party’s request.  In the event that any consent, authorization or other
form of approval is required to be obtained in connection with the granting of
any additional security, each Debtor shall, and shall cause each other
applicable Credit Party, to use its commercially reasonable efforts to obtain,
or cause to be obtained, any such consent, authorization or approval.

 

5.6                               Notice of Event of Default.  Immediately
notify the Secured Party in writing of the occurrence of any Event of Default or
any event or existing condition which, with the giving

 

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of notice and/or the lapse of time, could constitute an Event of Default or
which might materially and adversely affect the financial conditions or
operations of any Debtor and the facts with respect thereto.

 

5.7                               Loan Document Covenants. Each Debtor will
perform and fulfill each of the covenants in the Loan Documents that is
applicable to such Debtor.

 

ARTICLE VI
EVENTS OF DEFAULT

 

The occurrence of any one or more of the following events shall constitute an
“Event of Default”:

 

6.1                               Occurrence of an Event of Default.  An “event
of default” (howsoever defined) shall occur under the Loan Agreement, the
Guarantee or any other Loan Document.

 

6.2                               Security Interest.  This Agreement, the
Guarantee or any other security agreement, pledge, mortgage or other similar
document, agreement or instrument granting a security interest in, pledge of or
charge over the assets of any Debtor in favor of the Secured Party, after
delivery thereof shall, for any reason except to the extent permitted by the
terms thereof, cease to create a valid and perfected Lien on any of the assets
and collateral purported to be covered thereby, or any Debtor shall so state in
writing or any Debtor or any other Person shall take or agree to take any action
threatening the validity, perfection or priority of any such security interest
or guarantee.

 

ARTICLE VII
RIGHTS AND REMEDIES

 

7.1                               Rights and Remedies of the Secured Party. 
Upon and after the occurrence and during the continuance of an Event of Default,
the Secured Party may, without notice or demand, exercise in any jurisdiction in
which enforcement hereof is sought, the following rights and remedies, in
addition to the rights and remedies available to the Secured Party under the
other Loan Documents, the rights and remedies of a secured party under the UCC
and all other rights and remedies available to the Secured Party under
applicable Governmental Requirements, whether at law or in equity, all such
rights and remedies being available to the Secured Party and being cumulative
and enforceable alternatively, successively or concurrently:

 

(a)                                 Declare all Obligations to be immediately
due and payable and the same shall thereupon become immediately due and payable
without presentment, demand for payment, protest or notice of any kind, all of
which are hereby expressly waived.

 

(b)                                 Institute any proceeding or proceedings to
exercise any remedy and to enforce the Obligations and any Liens of the Secured
Party.

 

(c)                                  Take possession of the Collateral, and for
that purpose, so far as such Debtor may give authority therefor, enter upon any
premises on which the Collateral or any part thereof may be situated and remove
the same therefrom without any liability for suit, action or other proceeding,
each Debtor HEREBY WAIVING ANY AND ALL RIGHTS TO PRIOR

 

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NOTICE AND TO JUDICIAL HEARING WITH RESPECT TO REPOSSESSION OF COLLATERAL, and
require each Debtor, at such Debtor’s expense, to assemble and deliver the
Collateral to such place or places as the Secured Party may designate.

 

(d)                                 Without notice, except as specified below,
sell, resell, assign and deliver or grant a license to use or otherwise dispose
of the Collateral or any part thereof, in one or more parcels, at one or more
sales, at public or private sale, at the Secured Party’s office or such other
place or places, for cash, on credit, for future delivery, or any other
consideration, and upon such other terms and conditions, as the Secured Party
may deem commercially reasonable.  The Secured Party’s compliance with any
applicable state or federal law in the conduct of such sale, its disclaimer of
any warranties relating to any Collateral, and its compliance with the terms and
conditions for sale of Collateral set forth herein shall not, in any event, be
considered to adversely affect the commercial reasonableness of such sale.

 

(e)                                  If the Secured Party in good faith believes
that any Governmental Requirement prohibits or restricts the customary manner of
sale or distribution of any of the Collateral, or if the Secured Party
determines that there is any other restraint, restriction or limitation limiting
the sale or distribution of any such property, the Secured Party may sell such
property privately or in any other manner that it deems advisable at such price
or prices as it determines in its sole discretion and without liability
whatsoever to the Debtors in connection therewith.  Each Debtor recognizes and
agrees that such prohibition or restriction may cause such property to have less
value that it otherwise would have and that, consequently, such sale or
disposition by the Secured Party may result in a lower sales price than if the
sale were otherwise held.

 

(f)                                   Occupy any premises owned or leased by any
Debtor where the Collateral or any part thereof is located or assembled for a
reasonable period in order to effectuate its rights and remedies hereunder or
under applicable law, without obligation to such Debtor in respect of such
occupation, including, without limitation, without obligation to pay rent.

 

(g)                                  Operate, manage and control the Collateral
(including use of the Collateral and any other property or assets of any Debtor
in order to continue or complete performance of such Debtor’s obligations under
any contracts or agreements of such Debtor), or permit the Collateral or any
portion thereof to remain idle or store the same, and collect all rents and
revenues therefrom.

 

(h)                                 Without notice to any Debtor, any such
notice being expressly waived by each Debtor, to set-off and appropriate and
apply any and all deposits, in any currency or form, and any other credits,
indebtedness or claims, in any currency or form, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Secured Party to or for the credit or the account of any Debtor, or
any part thereof, against and on account of the obligations and liabilities of
each Debtor to the Secured Party hereunder, whether arising hereunder, under the
Loan Agreement, any other Loan Document or otherwise, as the Secured Party may
elect in its sole discretion, whether or not the Secured Party has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured.  The Secured Party shall notify such Debtor of any such
set-off and application, provided that the failure to give such notice shall not
affect the validity of such set-off and

 

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application.  The rights of the Secured Party to set-off and appropriate are in
addition to the other rights and remedies which the Secured Party may have
hereunder, under any other Loan Document, or at law or in equity.

 

(i)                                     To enforce each Debtor’s rights against
account debtors and other parties obligated on Collateral, including, but not
limited to, the right to: (i) notify and/or require each Debtor to notify any or
all account debtors and other parties obligated on Collateral to make payments
directly to the Secured Party or in care of a post office lock box under the
sole control of the Secured Party established at such Debtor’s expense subject
to the Secured Party’s customary arrangements and charges therefor, and to take
any or all action with respect to Collateral as the Secured Party shall
determine in its sole discretion, including, without limitation, the right to
demand, collect, sue for and receive any money or property at any time due,
payable or receivable on account thereof, compromise and settle with any Person
liable thereon, and extend the time of payment or otherwise change the terms
thereof, without incurring liability or responsibility to such Debtor;
(ii) require each Debtor to segregate and hold in trust for the Secured Party
and, on the day of such Debtor’s receipt thereof, transmit to the Secured Party
in the exact form received by such Debtor (except for such assignments and
endorsements as may be required by the Secured Party), all cash, checks, drafts,
money orders and other items of payment constituting Collateral or proceeds of
Collateral; and/or (iii) establish and maintain at the Secured Party a
“Repayment Account,” which shall be under the exclusive control of and subject
to the sole order of the Secured Party and which shall be subject to the
imposition of such customary charges as are imposed by the Secured Party from
time to time upon such accounts, for the deposit of cash, checks, drafts, money
orders and other items of payments constituting Collateral or proceeds of
Collateral from which the Secured Party may, in its sole discretion, at any time
and from time to time, withdraw all or any part and apply the same to the
payment of the Obligations.  The Secured Party’s collection and enforcement of
Collateral against account debtors and other persons obligated thereon shall be
deemed to be commercially reasonable if the Secured Party exercises the care and
follows the procedures that the Secured Party generally applies to the
collection of obligations owed to the Secured Party.  All cash and non-cash
proceeds of the Collateral shall be applied by the Secured Party upon the
Secured Party’s actual receipt of cash proceeds against the Obligations, matured
or unmatured, in such order as the Secured Party shall determine in the Secured
Party’s sole discretion.

 

(j)                                    It shall not be necessary for the Secured
Party to have physically present or constructively in its possession any of the
Collateral at any foreclosure sale, and the Secured Party shall deliver to the
purchasers at such sale on the date of sale the Collateral purchased by such
purchasers at such sale, and if it should be impossible or impracticable for any
of such purchasers to take actual delivery of the Collateral, then the title and
right of possession to the Collateral shall pass to the purchaser at such sale
as completely as if the same had been actually present and delivered.

 

(k)                                 Recitals contained in any conveyance to any
purchaser at any sale made pursuant to this Agreement will conclusively
establish the truth and accuracy of the matters stated therein, including,
without limitation, nonpayment of unpaid sums, the amount of unpaid sums, that
the written instruments constituting part or all of the Obligations have become
due and payable, nonpayment of any Obligation, or advertisement and conduct of
the sale in the manner

 

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provided herein.  Each Debtor ratifies and confirms all legal acts that the
Secured Party may do in carrying out the provisions of this Agreement.

 

7.2                               Notice of Disposition of Collateral and
Disclaimer of Warranties.  It is mutually agreed that commercial reasonableness
and good faith require the Secured Party to give any Debtor no more than ten
(10) days prior written notice of the time and place of any public disposition
of Collateral or of the time after which any private disposition or any other
intended disposition is to be made.  It is mutually agreed that it is
commercially reasonable for the Secured Party to disclaim all warranties which
arise with respect to the disposition of the Collateral.

 

7.3                               Secured Party as Purchaser.  The Secured Party
will have the right to become the purchaser at any foreclosure sale, and it will
have the right to credit upon the amount of the bid the amount payable to it out
of the net proceeds of sale.  Upon compliance with the terms of any sale, the
Secured Party may receive, hold, retain, possess and dispose of such property in
its own absolute right without further accountability.

 

7.4                               Retention of Collateral.  In addition to the
rights and remedies hereunder, the Secured Party may retain all or a portion of
the Collateral in satisfaction of the Obligations but only after providing the
notices required by Sections 9-620 and 9-621 (or similar provision) of the UCC
(or any successor sections of the UCC) and otherwise complying with the
requirements of applicable law of the relevant jurisdiction.  Unless and until
the Secured Party shall have provided such notices and complied with all
applicable legal requirements, however, the Secured Party shall not be deemed to
have retained any Collateral in satisfaction of any Obligations for any reason.

 

7.5                               Postponement; Restoration of Rights.  In the
event that the Secured Party shall have instituted any sale or any other
proceeding to enforce any right, power, privilege or remedy under this Agreement
or any other Loan Document, whether by judicial or non-judicial foreclosure,
sale, entry or otherwise, the Secured Party may postpone, delay, reschedule,
adjourn, discontinue or abandon such sale or proceeding at any time for any
reason, in which case all rights and remedies of the Secured Party are
maintained and preserved, and in every such case, each Debtor and the Secured
Party shall be restored to their respective former positions and rights with
respect to the Collateral, and all rights, remedies, privileges and powers of
the Secured Party shall continue in full force and effect.  The Secured Party
shall not be obligated to make any sale of Collateral regardless of notice of
sale having been given.  No postponement, delay, rescheduling, adjournment,
discontinuance or abandonment, or other act, delay, forbearance, omission or
course of dealing with respect to any Debtor or the Collateral, will constitute,
or shall be deemed to constitute, a waiver of, or a limitation on, Secured
Party’s rights or remedies hereunder or under applicable law.

 

7.6                               Deficiency.  Subject to applicable law, each
Debtor will remain liable for any deficiency owing to the Secured Party after
application of the net proceeds of any foreclosure sale.

 

7.7                               Waiver.  To the extent permitted by applicable
law, each Debtor waives all claims, damages and demands it may acquire against
Secured Party arising out of the exercise by

 

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it of any rights or remedies under this Agreement or any other Loan Document. 
Each Debtor hereby waives and releases to the fullest extent permitted by
applicable law any right or equity of redemption with respect to the Collateral,
whether before or after sale pursuant to this Agreement.

 

7.8                               Reinstatement.  To the extent that any payment
made or received with respect to the Obligations is subsequently invalidated,
determined to be fraudulent or preferential, set aside, defeased or required to
be repaid to a trustee, debtor in possession, receiver, custodian or any other
Person under any debtor relief law, common law or equitable cause or any other
Governmental Requirement, then the Obligations intended to be satisfied by such
payment shall be revived and shall continue as if such payment had not been
received by the Secured Party and the Liens created by this Agreement shall be
revived automatically without any action on the part of any party hereto and
shall continue as if such payment had not been received by the Secured Party.

 

ARTICLE VIII
MISCELLANEOUS

 

8.1                               Care of Collateral.  Each Debtor shall have
all risk of loss of the Collateral.  The Secured Party shall have no liability
or duty, either before or after the occurrence of an Event of Default, on
account of loss of or damage to, to collect or enforce any of its rights
against, the Collateral, to collect any income accruing on the Collateral, or to
preserve rights against account debtors or other parties with prior interests in
the Collateral.  The Secured Party shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if it
accords such Collateral treatment substantially equal to the safekeeping that it
accords its own property of like kind. If the Secured Party actually receives
any notices requiring action with respect to Collateral in the Secured Party’s
possession, the Secured Party shall take reasonable steps to forward such
notices to the Debtors.  Each Debtor is responsible for responding to notices
concerning the Collateral, voting the Collateral, and exercising rights and
options, calls and conversions of the Collateral; the Secured Party’s sole
responsibility with respect thereto is to take such action as is reasonably
requested by such Debtor in writing; provided, however, the Secured Party is not
responsible to take any action that, in the Secured Party’s sole judgment, would
adversely affect the value of the Collateral as security for the Obligations. 
While the Secured Party is not required to take any actions with respect to the
Collateral, if action is needed, in the Secured Party’s sole discretion, to
preserve and maintain the Collateral, each Debtor authorizes the Secured Party
to take such actions, but the Secured Party is not obligated to do so.

 

8.2                               Secured Party May Perform; Secured Party
Appointed Attorney-in-Fact.

 

(a)                                 If any Debtor shall fail to perform any
covenants contained in this Agreement or any other Loan Document (including such
Debtor’s covenants to (i) pay the premiums in respect of all required insurance
policies, (ii) pay and discharge any taxes, assessments and special assessments,
levies, fees and governmental charges imposed upon or assessed against, and
landlords’, carriers’, mechanics’, workmen’s, repairmen’s, laborers’,
materialmen’s, suppliers’ and warehousemen’s Liens and other claims arising by
operation of law against, all or any portion of the Collateral, (iii) make
repairs, (iv) discharge Liens or (v) pay

 

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or perform any obligations of any Debtor under any Collateral) or if any
representation or warranty on the part of any Debtor contained herein shall be
breached, the Secured Party may (but shall not be obligated to) advance funds on
behalf of such Debtor in order to insure such Debtor’s compliance with any
covenant in this Agreement or any other Loan Document; provided, however, that,
the Secured Party shall in no event be bound to inquire into the validity of any
tax, Lien, imposition or other obligation which any Debtor fails to pay or
perform as and when required hereby and which such Debtor does not contest in
good faith.  Any and all amounts so expended by the Secured Party shall be paid
by each Debtor and shall become part of the Obligations.  Neither the provisions
of this Section 8.2 nor any action taken by the Secured Party pursuant to the
provisions of this Section 8.2 shall prevent any such failure to observe any
covenant contained in this Agreement nor any breach of representation or
warranty from constituting an Event of Default.

 

(b)                                 Each Debtor hereby appoints the Secured
Party as its attorney-in-fact, with full power and authority in the place and
stead of each Debtor and in the name of such Debtor, or otherwise, from time to
time during the continuation of an Event of Default, in the Secured Party’s
discretion, to take any action and to execute any instrument, document or
agreement consistent with the terms of the Loan Agreement, this Agreement and
the other Loan Documents which the Secured Party may deem necessary or advisable
to accomplish the purposes hereof (but the Secured Party shall not be obligated
to and shall have no liability to any Debtor or any third party for failure to
so do or take action).  The foregoing grant of authority is a power of attorney
coupled with an interest and such appointment shall be irrevocable for the term
hereof.  Each Debtor hereby ratifies all that such attorney shall lawfully do or
cause to be done by virtue hereof.

 

8.3                               Applications of Payments and Collateral. 
Except as may be otherwise specifically provided in the Loan Agreement, all
Collateral and proceeds of Collateral coming into the Secured Party’s possession
after the occurrence and during the continuance of an Event of Default and all
payments made by any Debtor may be applied by the Secured Party to any of the
Obligations, whether matured or unmatured, as the Secured Party shall determine
in its sole but reasonable discretion in accordance with the terms of the other
Loan Documents.  The Secured Party may defer the application of non-cash
proceeds of Collateral, including, but not limited to, non-cash proceeds
collected pursuant hereto, to the Obligations until cash proceeds are actually
received by the Secured Party.

 

8.4                               Termination; Release.  Upon (a) the complete
payment in full in cash and performance in full of the Obligations (other than
contingent Obligations for which no claim has been made), and (b) such time as
there exists no commitment by the Secured Party which could give rise to any
Obligations (other than contingent Obligations for which no claim has been
made), this Agreement shall be terminated, the security interest in the
Collateral shall be released, and the Secured Party shall execute and deliver
such releases and discharges of the security interests created hereby as any
Debtor may reasonably request in writing, the cost and expense of which shall be
paid by each Debtor.

 

8.5                               Modification in Writing.  No amendment,
modification, supplement, termination or waiver of or to any provision hereof,
nor consent to any departure by any Debtor therefrom, shall be effective unless
the same shall be made in accordance with the terms of the Loan

 

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Agreement and unless in writing and signed by the Secured Party.  Any amendment,
modification or supplement of or to any provision hereof, any waiver of any
provision hereof and any consent to any departure by any Debtor from the terms
of any provision hereof in each case shall be effective only in the specific
instance and for the specific purpose for which made or given.  Except where
notice is specifically required by this Agreement or the Loan Documents, no
notice to or demand on any Debtor in any case shall entitle such Debtor to any
other or further notice or demand in similar or other circumstances.

 

8.6                               Notices.  All notices, demands, and other
communications to be given or delivered under or by reason of the provisions of
this Agreement will be in writing and will be deemed to have been given (i) when
delivered if personally delivered by hand, (ii) when received if sent by a
nationally recognized overnight courier service (receipt requested), (iii) three
(3) Business Days after being mailed, if sent by first class mail, return
receipt requested, or (iv) on the Business Day following transmission, if sent
by facsimile, telecopy, electronic mail or other electronic transmission
device.  Notices, demands, and communications to the parties will, unless
another address is specified in writing, be sent to the address indicated below:

 

If to any Debtor:

 

Uranium Resources, Inc.

405 State Highway Bypass 121

Building A, Suite 110

Lewisville, Texas  75067

Attention:  Thomas H. Ehrlich

Facsimile:  (972) 219-3311

E-Mail:  thehrlich@uraniumresources.com

 

If to the Secured Party:

 

Resource Capital Fund V L.P.

1400 Sixteenth Street, Suite 200

Denver, Colorado 80202

Attention:  Cassie Boggs

Facsimile:  (720) 946-1450

E-Mail: cjb@rcflp.com

 

8.7                               Merger and Integration.  This Agreement and
the other Loan Documents contain the entire agreement of the parties hereto with
respect to the matters covered and the transactions contemplated hereby, and no
other agreement, statement or promise made by any party hereto, or by any
employee, officer, agent or attorney of any party hereto, which is not contained
herein or in the other Loan Documents shall be valid or binding.

 

8.8                               No Waiver; Cumulative Remedies.

 

(a)                                 No failure on the part of the Secured Party
to exercise, no course of dealing with respect to, and no delay on the part of
the Secured Party in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial

 

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exercise of any such right, power, privilege or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power,
privilege or remedy.  All rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies provided by law or otherwise
available.

 

(b)                                 In the event that the Secured Party shall
have instituted any proceeding to enforce any right, power, privilege or remedy
under this Agreement or any other Loan Document by foreclosure, sale, entry or
otherwise, and such proceeding shall have been discontinued, adjourned,
postponed or abandoned for any reason, then and in every such case, each Debtor
and Secured Party shall be restored to its respective former positions and
rights hereunder with respect to the Collateral, and all rights, remedies,
privileges and powers of the Secured Party shall continue as if no such
proceeding had been instituted.

 

8.9                               Waivers by each Debtor. Each Debtor hereby
waives, to the extent the same may be waived under applicable law: (a) notice of
acceptance of this Agreement; (b) all claims, causes of action and rights of any
Debtor against the Secured Party on account of actions taken or not taken by the
Secured Party in the exercise of the Secured Party’s rights or remedies
hereunder, under the Loan Documents or under applicable law; (c) all claims of
any Debtor for failure of the Secured Party to comply with any requirement of
applicable law relating to enforcement of the Secured Party’s rights or remedies
hereunder, under the Loan Documents or under applicable law; (d) all rights of
redemption of any Debtor with respect to the Collateral; (e) in the event the
Secured Party seeks to repossess any or all of the Collateral by judicial
proceedings, any bond(s) or demand(s) for possession which otherwise may be
necessary or required; (f) presentment, demand for payment, protest and notice
of non-payment and all exemptions; (g) any and all other notices or demands
which by applicable law must be given to or made upon any Debtor by the Secured
Party; (h) settlement, compromise or release of the obligations of any one or
more Persons primarily or secondarily liable upon any of the Obligations;
(i) all rights of any Debtor to demand that the Secured Party release account
debtors from further obligation to the Secured Party; and (j) substitution,
impairment, exchange or release of any Collateral for any of the Obligations. 
Each Debtor agrees that the Secured Party may exercise any or all of its rights
and/or remedies hereunder, under the Loan Documents and under applicable
Governmental Requirements, from time to time, in any order, against any Debtor,
alternatively, successively or concurrently, without resorting to and without
regard to any Collateral or sources of liability with respect to any of the
Obligations.

 

8.10                        Expenses. Whether or not any of the transactions
contemplated hereby shall be consummated, each Debtor agrees to pay to the
Secured Party on demand the amount of all costs and expenses paid or incurred by
the Secured Party (including the reasonable fees and expenses of its counsel) in
connection with the negotiation, preparation, delivery, amendment, modification,
waiver, enforcement or administration of this Agreement and the Loan Documents
and all documents and instruments referred to herein and all costs and expenses
paid or incurred by the Secured Party in connection with the filing or
recordation of all financing statements and instruments as may be required by
the Secured Party at the time of, or subsequent to, the execution of this
Agreement, including, without limitation, all documentary stamps, recordation
and transfer taxes and other costs and taxes incident to recordation of any
document or instrument in connection herewith, together with interest on all
such amounts at the rate and calculated in the manner provided in the Loan
Agreement, provided that the aggregate amount of

 

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costs and expenses of the Secured Party to be paid by each Debtor with respect
to the negotiation, preparation and delivery of this Agreement and the other
Loan Documents shall be limited to US$100,000.  Each Debtor agrees to save
harmless and indemnify the Secured Party from and against any liability
resulting from the failure to pay any required documentary stamps, recordation
and transfer taxes, recording costs or any other costs or expenses incurred or
paid by the Secured Party in connection with this Agreement and the other Loan
Documents.  The provisions of this Section 8.10 shall survive the termination of
this Agreement and the Secured Party’s security interest hereunder and the
payment of all other Obligations.

 

8.11                        Indemnification.  Each Debtor agrees to indemnify
the Secured Party, and the Secured Party’s Affiliates, and their respective
directors, partners, managers, members, owners, principals, shareholders,
officers, employees, agents, consultants and representatives (each, an
“Indemnified Party” and collectively, the “Indemnified Parties”), from and
against, and to defend and hold each of the Indemnified Parties harmless from,
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, fines, suits, costs, assessments, charges, claims, and taxes,
expenses, payments or disbursements of any kind whatsoever, including attorneys’
fees and expenses (collectively “Losses”) which may at any time (including,
without limitation, at any time following the payment of the Obligations) be
imposed on, incurred or suffered by or asserted against any Indemnified Party in
any way relating to or arising out of this Agreement, the other Loan Documents
and the transactions contemplated hereby and thereby and any claim,
investigation, subpoena, litigation, proceeding or otherwise related to or
arising out of this Agreement or any other Loan Document or any transaction
contemplated hereby or thereby or the pursuit or enforcement of any rights or
remedies under this Agreement or any other Loan Document (but in any case
excluding any such claims, damages, losses, liabilities, costs or expenses
incurred by reason of the gross negligence or willful misconduct of any
Indemnified Party).  The obligations of each Debtor under this paragraph shall
survive the payment in full of the Loan Agreement and the other Loan Documents
and the termination or release of this Agreement.

 

8.12                        Obligations Absolute.  All obligations of each
Debtor hereunder shall be absolute and unconditional irrespective of:

 

(a)                                 any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of any other
Credit Party;

 

(b)                                 any lack of validity or enforceability of
any Loan Document or any other agreement or instrument relating thereto;

 

(c)                                  any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of, supplement to or any consent to any departure from the
Loan Agreement or any other Loan Document, or any renewal or restatement of the
Loan Agreement or any other Loan Document or any amount owing thereunder, or any
other agreement or instrument relating thereto, including, without limitation,
any increase in the Obligations.

 

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(d)                                 any taking, exchange, release or
non-perfection of any other collateral, or any taking, release, amendment or
waiver of or consent to departure from any guarantee, surety or support
agreement for all or any of the Obligations;

 

(e)                                  any manner of application of collateral or
proceeds thereof, to all or any of the Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Obligations or any
other assets of any principal, guarantor or surety;

 

(f)                                   any change, restructuring or termination
of the corporate or company structure or existence of any Debtor or any
affiliate thereof;

 

(g)                                  whether such Debtor’s liability is joint,
several, or joint and several, it being the intention of the parties hereto that
all the Obligations shall be the joint and several obligations of each of the
Credit Parties, without preference or distinction among them;

 

(h)                                 whether such Debtor’s liability is as a
borrower, maker, acceptor, guarantor, surety, accommodation party or otherwise,
it being the intention of the parties hereto that each Credit Party is liable
for the Obligations as a primary obligor, independent of the liability or
obligations of any other Credit Party;

 

(i)                                     any exercise, non-exercise or waiver of
any right, remedy, power or privilege under or in respect hereof, the Loan
Agreement or any other Loan Document, with respect to such Debtor or any other
Credit Party, except as specifically set forth in a waiver granted pursuant to
the provisions of Section 8.5 hereof; or

 

(j)                                    any other circumstance that might
otherwise constitute a defense available to, or a discharge of, such Debtor or
any affiliate of such Debtor, any other Person liable for the Obligations or a
third party guarantor or grantor of a security interest.

 

8.13                        Binding Effect; Assignment.  This Agreement shall be
binding upon and inure to the benefit of each Debtor, the Secured Party and
their respective successors and assigns.  Each Debtor shall not have the right
to assign any of its rights or obligations hereunder or any interest herein or
in any other Loan Document without the prior written consent of the Secured
Party. The Secured Party shall not have the right to assign any of its rights or
obligations hereunder or any interest herein or in any other Loan Document
without the prior written consent of the Borrower, not to be unreasonably
withheld or conditioned, except that, subject to Governmental Requirements, the
Secured Party may, at any time, without the consent of the Borrower, assign to
its respective successors and Affiliates all or any part of this Agreement, and,
to the extent of such assignment, such assignee shall have the same obligations,
rights and benefits with respect to each Debtor as it would have had if it were
the Secured Party hereunder.

 

8.14                        Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF COLORADO, NOT
INCLUDING THE CONFLICTS OF LAW AND CHOICE OF LAW PROVISIONS THEREOF.

 

8.15                        Waiver of Jury Trial.  EACH DEBTOR HEREBY
(a) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY A

 

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JURY, AND (b) WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE
SECURED PARTY AND ANY DEBTOR MAY BE PARTIES, ARISING OUT OF, IN CONNECTION WITH
OR IN ANY WAY PERTAINING TO THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS
AND/OR ANY TRANSACTIONS, OCCURRENCES, COMMUNICATIONS, OR UNDERSTANDINGS (OR THE
LACK OF ANY OF THE FOREGOING) RELATING IN ANY WAY TO THE DEBTOR-CREDITOR
RELATIONSHIP BETWEEN THE PARTIES.  IT IS UNDERSTOOD AND AGREED THAT THIS WAIVER
CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH
ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO
THIS AGREEMENT.  THIS WAIVER OF JURY TRIAL IS SEPARATELY GIVEN, KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY EACH DEBTOR AND EACH DEBTOR HEREBY AGREES THAT
NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.  THE
SECURED PARTY IS HEREBY AUTHORIZED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING
JURISDICTION OVER THE SUBJECT MATTER AND ANY DEBTOR AND THE SECURED PARTY, SO AS
TO SERVE AS CONCLUSIVE EVIDENCE OF SUCH WAIVER OF RIGHT TO TRIAL BY JURY.  EACH
DEBTOR REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
SELECTED OF ITS OWN FREE WILL, AND/OR THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL.

 

8.16                        Execution in Counterparts; Facsimile Signatures. 
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.  This Agreement may be validly executed and delivered by
facsimile, portable document format (.pdf) or other electronic transmission, and
a signature by facsimile, portable document format (.pdf) or other electronic
transmission shall be as effective and binding as delivery of a manually
executed original signature.

 

8.17                        Severability of Provisions.  If any provision hereof
is determined to be ineffective or unenforceable for any reason, the remaining
provisions hereof shall remain in effect, binding on the parties and enforceable
at the election of the Secured Party in its sole discretion.

 

8.18                        Survival.  All covenants, agreements,
representations and warranties made hereunder or made in connection with this
Agreement and the other Loan Documents shall survive the execution and delivery
of this Agreement, and shall continue in full force and effect until the
security interest created herein is discharged.

 

8.19                        Further Assurances.  Each Debtor shall execute,
acknowledge and deliver to the Secured Party such other and further documents,
agreements, certificates and instruments and do or cause to be done such other
acts and things as the Secured Party reasonably determines to be necessary or
desirable to effect the intent of the parties to this Agreement or otherwise to
protect and preserve the rights and interests of the Secured Party hereunder,
promptly upon request by the Secured Party, including the execution and delivery
of any and all documents, agreements,

 

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certificates and instruments which are necessary or advisable to create,
protect, preserve, maintain or perfect the Liens on the Collateral, with the
Agreed Priority.

 

8.20                        Joint and Several Liability.  The Borrower and the
Guarantor Debtors are engaged in related businesses and are integrated to such
an extent that the financial strength and flexibility of each such party has a
direct, tangible and immediate impact on the success of the other parties.  The
Borrower and the Guarantor Debtors will derive substantial and immediate direct
and indirect benefit from the Loan Agreement, the Loan Documents and the
transactions entered into in connection therewith, and each Debtor will receive
reasonably equivalent value in return for providing its Guarantee and this
Agreement.  Each Debtor expressly waives any right to revoke, terminate or
suspend this Agreement and acknowledges that it entered into such Agreement in
contemplation of the benefits that it would receive from the Loan Agreement and
the other Loan Documents.

 

8.21                        Acknowledgments.  Each Debtor hereby represents,
warrants, confirms and acknowledges that:

 

(a)                                 such Debtor and each Credit Party have
consulted and been advised by its own legal counsel in the negotiation,
preparation, execution and delivery of this Agreement and the other Loan
Documents, and such Debtor and each Credit Party are each responsible for making
its own independent judgment with respect to such transactions and the process
leading thereto;

 

(b)                                 this Agreement and the other Loan Documents
shall not be construed against any party or more favourably in favour of any
party based upon which party drafted the same, it being agreed and acknowledged
that all parties contributed substantially to the negotiation and preparation of
this Agreement and the other Loan Documents;

 

(c)                                  the Secured Party has no fiduciary
relationship with or duty to any Debtor or any other Credit Party arising out
of, as a result of, or in connection with this Agreement or any other Loan
Document, and the relationship between the Secured Party, on one hand, and each
Debtor and the other Credit Parties, on the other hand, in connection with this
Agreement, the Loan Documents and the transactions contemplated hereby and
thereby is solely that of creditor and debtor;

 

(d)                                 neither this Agreement nor any other Loan
Document to which any Credit Party and the Secured Party is a party creates a
joint venture, partnership, agency relationship or fiduciary duty, and no joint
venture, partnership, agency relationship or fiduciary duty shall be deemed to
exist; and

 

(e)                                  neither any Debtor nor any other Credit
Party will claim that the Secured Party has rendered advisory services of any
nature or respect to, or owes a fiduciary or similar duty to, any Debtor or any
Credit Party in connection with this Agreement, the other Loan Documents or the
process leading thereto.

 

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EXHIBIT D

 

FORM OF GUARANTEE

 

This GUARANTEE (as amended, modified, supplemented, extended or restated, the
“Guarantee”), dated as of December 17, 2012, is made by each of URI, INC., a
Delaware corporation, HYDRO RESOURCES, INC., a Delaware corporation, URI
MINERALS, INC., a Delaware corporation, HYDRO RESTORATION CORPORATION, a
Delaware corporation, BELT LINE RESOURCES, INC., a Texas corporation,
URANCO, INC., a Delaware corporation, HRI-CHURCHROCK, INC., a Delaware
corporation, URI NEUTRON HOLDINGS I, INC., a Delaware corporation, URI NEUTRON
HOLDINGS II, INC., a Delaware corporation, NEUTRON ENERGY, INC., a Nevada
corporation, and CIBOLA RESOURCES LLC, a Delaware limited liability company
(each a “Guarantor,” and collectively the “Guarantors”), in favor and for the
benefit of RESOURCE CAPITAL FUND V L.P. (with its successors and assigns, the
“Beneficiary”).

 

Recitals

 

A.  Pursuant to that certain Bridge Loan Agreement of even date herewith (as
amended, modified, supplemented, extended or restated from time to time, the
“Loan Agreement”), by and among Uranium Resources, Inc., a corporation organized
and existing under the laws of the State of Delaware, as the borrower (the
“Borrower”), those Subsidiaries of the Borrower from time to time party hereto,
as guarantors, and the Beneficiary, as the lender, the Beneficiary has agreed to
make a loan to the Borrower (the “Loan”) to be used by the Borrower as set forth
in the Loan Agreement.  Unless otherwise defined herein, capitalized terms used
in this Guarantee have the meanings assigned to such terms in the Loan
Agreement.

 

B.  It is a condition precedent to the obligation of the Beneficiary to enter
into the Loan Agreement and to make and maintain the Loan thereunder that each
Guarantor shall have executed and delivered this Guarantee and that this
Guarantee shall be in full force and effect.

 

C.  This Guarantee is given by each Guarantor to and in favour of the
Beneficiary to guarantee the due and punctual payment and performance of all the
obligations of the Borrower to the Beneficiary arising under the Loan Agreement
and the other Loan Documents.

 

D.  Each Guarantor is a direct or indirect wholly-owned subsidiary of the
Borrower, and each Guarantor will derive substantial direct and indirect benefit
from the amounts made available under the Loan Agreement and from such financial
and other support as the Borrower may in the future provide to such Guarantor. 
The Borrower and the Guarantors are engaged in related businesses and integrated
to such an extent that the financial strength and flexibility of the Borrower
has a direct, tangible and immediate impact on the success of each Guarantor,
and each Guarantor will derive other significant benefit from the Loan Agreement
and the Loan made to the Borrower thereunder.

 

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E.  In order to induce the Beneficiary to enter into the Loan Agreement and to
make and maintain the Loan with the Borrower, and as a condition thereto, each
Guarantor is willing and has agreed to enter into this Guarantee.

 

Agreement

 

NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, each Guarantor hereby agrees as follows:

 

1.                                      Guarantee.

 

a.                                      Each Guarantor hereby:

 

i.                                          guarantees, absolutely,
unconditionally and irrevocably, the full prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration, on demand
or otherwise) and at all times thereafter of all present and future obligations,
conditions, covenants, liabilities, indemnifications and indebtedness of all
kinds of the Borrower under or related to the Loan Agreement or any other Loan
Document, whether present or future, absolute or contingent, liquidated or
unliquidated, as principal or as surety, alone or with others, of whatsoever
nature or kind, whether for the payment of money or the performance of
obligations, in any currency, arising out of, under, in respect of or in
connection with the Loan Agreement and each other Loan Document and howsoever
and whensoever otherwise created or characterized (extending to all principal
amounts, interest, fees, costs, late charges, prepayment fees, early termination
fees, sums and amounts as well as all costs and expenses of enforcement and
collection), whether or not now contemplated, as the Loan Agreement or any other
Loan Document may be amended, modified, supplemented, restated or extended in
accordance with their respective terms (collectively, the “Obligations”), and

 

ii.                                       agrees to pay any and all costs and
expenses (including reasonable attorneys’ fees and disbursements) which may be
paid or incurred by the Beneficiary in enforcing any rights or remedies with
respect to, or collecting, any or all of the Obligations of the Borrower and/or
enforcing any rights with respect to, or collecting against such Guarantor under
this Guarantee (collectively, the Obligations described in Section 1(a)(i) and
in this Section 1(a)(ii) are referred to herein as the “Guaranteed
Obligations”).

 

b.                                      Each Guarantor agrees that this
Guarantee constitutes a guarantee of payment and not of collection, and the
Beneficiary shall not be obligated to initiate, pursue or exhaust any form of
remedy or recourse or to obtain any judgment against any Borrower or others
(including other guarantors) or to realize upon or exhaust any collateral
security held by or available to the Beneficiary before being entitled to
payment from such Guarantor.  The liability of each Guarantor shall not be
limited, diminished or affected by:

 

i.                                          any failure by the Beneficiary to
file or enforce any claim against the assets or estate (in administration,
bankruptcy or otherwise) of the Borrower, any other guarantor or others,

 

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ii.                                       the fact that recovery from the
Borrower or any other person is barred by any statute of limitations or for any
other reason,

 

iii.                                    any amendment, modification, supplement,
increase, extension, restatement, replacement or change of any kind or nature to
the Loan Agreement or any other Loan Document, with or without notice thereof to
such Guarantor, including any increase in the Guaranteed Obligations resulting
from any extension of additional credit or otherwise,

 

iv.                                   any adjustment, indulgence, waiver,
forbearance or compromise granted by the Beneficiary to the Borrower or any
Guarantor, or

 

v.                                      any other circumstance which might
otherwise constitute a legal or equitable discharge of a guarantor or surety.

 

Each Guarantor hereby renounces all benefits of marshaling, discussion and
division and waives diligence, promptness, notice of acceptance, presentment,
protest, notice of dishonor or protest or default, demand for payment upon the
Borrower, such Guarantor or any other Person, notice of acceptance of this
Guarantee, notice of any addition to or increase or decrease in the Obligations
and all other notices and demands whatsoever.  Each Guarantor waives all other
acts or omissions to act or delay of any kind by the Beneficiary or any other
Person or any other circumstance whatsoever that might, but for the provisions
of this paragraph, constitute a legal or equitable discharge of the obligations
of a guarantor, and each Guarantor waives all other defenses available to a
guarantor or surety, whether at law or in equity, in each case, other than
discharge by irrevocable payment in full of the Guaranteed Obligations.  Each
Guarantor waives any and all rights it has under Colorado Revised Statutes §§
13-50-102 and 13-50-103, or any corresponding future statute or rule of law, by
reason of release of fewer than all Guarantors.  All amounts payable by each
Guarantor shall be paid without set-off or counterclaim and without deduction or
withholding of any kind whatsoever.

 

c.                                       This Guarantee is a continuing
guarantee, and it will not be discharged until irrevocable payment in full of
all of the Guaranteed Obligations and cancellation of this Guarantee by the
Beneficiary (“Termination”) and will remain in full force and effect
notwithstanding any interruption in the business relations between the Borrower
and the Beneficiary or any increase or decrease from time to time in the amount
of the Obligations.  No payment or payments made by any other Person other than
the Borrower or a Guarantor in payment of the Guaranteed Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability or
obligations of any Guarantor hereunder until Termination.

 

d.                                      Without limiting the generality of the
foregoing, each Guarantor’s liability shall extend to all amounts that
constitute part of the Obligations and would be owed by the Borrower or any
other guarantor to the Beneficiary under or in respect of the Loan Documents but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving the Borrower or
any other guarantor.

 

2.                                      Limitation of Liability.

 

a.                                      Notwithstanding anything contained
herein to the contrary, the Guaranteed Obligations of each Guarantor hereunder
at any time shall be limited to the maximum amount as

 

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will result in the Guaranteed Obligations of such Guarantor under this Guarantee
not constituting a fraudulent transfer or conveyance for purposes of any debtor
relief law to the extent applicable to this Guarantee and the Guaranteed
Obligations of such Guarantor hereunder.

 

b.                                      If any payment shall be required to be
made to the Beneficiary under this Guarantee, each Guarantor hereby
unconditionally and irrevocably agrees it will contribute, to the maximum extent
permitted by law, such amounts to the Borrower and any other guarantor so as to
maximize the aggregate amount paid to the Beneficiary under or in connection
with the Loan Documents.

 

3.                                      Guarantee Absolute and Unconditional; No
Waiver of Obligations.  Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order of any Governmental Entity
now or hereafter in effect.  The Guaranteed Obligations of each Guarantor
hereunder are independent of the Obligations of the Borrower or any other
guarantor under any Loan Document.  A separate action may be brought against
each Guarantor to enforce this Guarantee, whether or not any action is brought
against the Borrower or any other guarantor or whether or not the Borrower or
any other guarantor is joined in any such action. The liability of each
Guarantor hereunder is irrevocable, continuing, absolute and unconditional and
the Guaranteed Obligations of any Guarantor hereunder shall not be discharged or
impaired or otherwise effected by, and each Guarantor hereby irrevocably waives
any defenses to enforcement it may have (now or in the future) by reason of:

 

a.                                      any illegality or lack of validity or
enforceability of any Guaranteed Obligation or any Loan Document or any related
agreement or instrument;

 

b.                                      any change in the time, place or manner
of payment of, or in any other term of, the Guaranteed Obligations or any other
obligation of the Borrower or any other guarantor under any Loan Document;

 

c.                                       any taking, exchange, substitution,
release, impairment or non-perfection of any collateral, or any taking, release,
impairment, amendment, waiver or other modification of any guaranty, for the
Guaranteed Obligations;

 

d.                                      any manner of sale, disposition or
application of proceeds of any collateral or other assets to all or part of the
Guaranteed Obligations;

 

e.                                       any default, failure or delay, willful
or otherwise, in the performance of the Guaranteed Obligations;

 

f.                                        any change, restructuring or
termination of the corporate structure, ownership or existence of any Credit
Party or any of its Subsidiaries or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting the Borrower or its assets or any
resulting release or discharge of any Obligation;

 

g.                                       the failure of the Beneficiary to
assert any claim or demand or to exercise or enforce any right or remedy under
the provisions of any Loan Document or otherwise;

 

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h.                                      any defense, set-off or counterclaim
(other than a defense of payment or performance) that may at any time be
available to, or be asserted by, the Borrower against the Beneficiary; or

 

i.                                          any other circumstance (including,
without limitation, any statute of limitations) or manner of administering the
Loan or any existence of or reliance on any representation by the Beneficiary
that might vary the risk of such Guarantor or otherwise operate as a defense
available to, or a legal or equitable discharge of, any Credit Party or any
other guarantor or surety.

 

4.                                      Beneficiary’s Rights.  Each Guarantor
authorizes the Beneficiary, without notice or demand and without affecting such
Guarantor’s liability hereunder, to take and hold security from any other Person
for the payment of this Guarantee and/or any of the Guaranteed Obligations, and
exchange, enforce, waive and release any such security; to apply such security
and direct the order or manner of sale thereof, as the Beneficiary, in its sole
discretion, may determine; and to obtain a guarantee of the Guaranteed
Obligations from any one or more Persons and at any time or times to enforce,
waive, rearrange, modify, limit or release any of such other Persons from their
obligations under such guaranties.

 

5.                                      Effectiveness; Reinstatement.  This
Guarantee shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Guaranteed
Obligations is rescinded or must otherwise be restored or returned by the
Beneficiary upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any substantial part of its property, or otherwise, all as though
such payments had not been made.  The Beneficiary and the Borrower may increase,
modify, rearrange, extend for any period and/or renew from time to time the
Obligations without notice to any Guarantor, and in such event the obligations
of each Guarantor with respect to the Obligations shall not be released,
discharged or reduced and each Guarantor will remain fully bound hereunder on
such Obligations.  This Guarantee may be enforced by the Beneficiary and any
subsequent holder of the Guaranteed Obligations, to the extent that any such
subsequent holder obtained its interest therein in accordance with the Loan
Agreement, and shall not be discharged by the assignment or negotiation of all
or a part of the Guaranteed Obligations.

 

6.                                      Default.  If an Event of Default
(however defined) under the Loan Agreement or any other Loan Document has
occurred, then all of the Guaranteed Obligations shall be immediately due and
payable by each Guarantor, regardless of whether the payment of the Guaranteed
Obligations has been accelerated or the Borrower is in default with respect to
the Guaranteed Obligations.

 

7.                                      Merger.  This Guarantee shall not be
affected by any change in the name of the Borrower or any Guarantor, or by the
acquisition of the Borrower’s or any Guarantor’s business by any person, firm or
corporation, or by any change whatsoever in the objects, capital structure or
constitution of the Borrower or any Guarantor, or by any merger, amalgamation or
consolidation of the Borrower or any Guarantor with any corporation or other
Person, or by any dissolution or liquidation of the Borrower or any Guarantor,
but shall, notwithstanding the happening of any such event, continue to apply to
all the Obligations whether theretofore or

 

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thereafter incurred, and in this instrument the word “Borrower” and the word
“Guarantor” shall each include every such person, firm, partner and corporation
and all successors.  Nothing in this Section 7 shall be construed as
authorization or approval of any such transaction except as permitted by and in
accordance with the Loan Agreement.  Each Guarantor shall promptly notify the
Beneficiary of any change or event described in this Section 7.

 

8.                                      No Waiver by the Beneficiary.  The
Beneficiary shall not be obligated to exercise any right, power or privilege
hereunder, and no failure to exercise and no delay in exercising, on the part of
the Beneficiary, any such right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.  No notice to or demand on any Guarantor shall be deemed to be a
waiver of the right of the Beneficiary to take further action without notice or
demand as provided herein.  No waiver shall be applicable except in the specific
instance and for the specific purpose for which given, nor in any event shall
any amendment, modification or waiver of any provision of this Guarantee be
effective unless in writing and signed on behalf of the Beneficiary.

 

9.                                      Waiver of Subrogation.  Each Guarantor
hereby agrees to waive its rights to be subrogated, exonerated, reimbursed,
indemnified or its rights to contribution to any claims of the Beneficiary
against the Borrower until the Guaranteed Obligations have been indefeasibly and
irrevocably paid in full.

 

10.                               Representations and Warranties of Guarantor. 
In addition to the representations and warranties in any other Loan Document,
each of which is incorporated herein by reference as fully as if set forth
herein, each Guarantor represents and warrants (which representations and
warranties will survive the creation of the Guaranteed Obligations and any
extension of the term under the Loan Agreement) that:

 

a.                                      No Conditions Precedent.  There are no
conditions precedent to the effectiveness of this Guarantee that have not been
satisfied or waived;

 

b.                                      Benefit to Guarantor.  The guarantee by
such Guarantor pursuant to this Guarantee reasonably may be expected to benefit,
directly or indirectly, such Guarantor;

 

c.                                       Familiarity and Reliance.  Such
Guarantor has independently reviewed the books and records regarding the
financial condition of the Borrower and is familiar with the value of any and
all collateral intended to be created as security for the Guaranteed
Obligations.  Notwithstanding the foregoing, such Guarantor is not relying on
such financial condition or the collateral as an inducement to enter into this
Guarantee;

 

d.                                      No Representation.  Neither the
Beneficiary nor any other Person has made any representation, warranty or
statement to such Guarantor with regard to the Borrower or the Borrower’s
financial condition in order to induce such Guarantor to execute this Guarantee;

 

e.                                       Guarantor’s Financial Condition.  As of
the date hereof and after giving effect to this Guarantee and the contingent
liability evidenced hereby, such Guarantor is and will be solvent, and has
assets which, fairly valued, exceed its obligations, liabilities and debts; and

 

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f.                                        Recitals.  The Recitals set forth
above are true and correct in all respects

 

11.                               Guarantors’ Covenants.  Each Guarantor hereby
confirms, and shall perform, each of the covenants relating to such Guarantor
set forth in each Loan Document to which it is a party or by which it is bound.
No Guarantor may assign this Guarantee without the prior written consent of the
Beneficiary, which may be withheld in the Beneficiary’s sole discretion.

 

12.                               Notices.  All notices, demands, and other
communications to be given or delivered under or by reason of the provisions of
this Guarantee will be in writing and will be deemed to have been given (i) when
delivered if personally delivered by hand, (ii) when received if sent by a
nationally recognized overnight courier service (receipt requested), (iii) three
(3) Business Days after being mailed, if sent by first class mail, return
receipt requested, or (iv) on the Business Day following transmission, if sent
by facsimile, telecopy, electronic mail or other electronic transmission
device.  Notices, demands, and communications to the parties will, unless
another address is specified in writing, be sent to the address indicated below:

 

If to any Guarantor:

 

c/o Uranium Resources, Inc.

405 State Highway Bypass 121

Building A, Suite 110

Lewisville, Texas  75067

Attention:  Thomas H. Ehrlich

Facsimile:  (972) 219-3311

E-Mail:  thehrlich@uraniumresources.com

 

If to Beneficiary:

 

Resource Capital Fund V L.P.

1400 Sixteenth Street, Suite 200

Denver, Colorado 80202

Attention:  Cassie Boggs

Facsimile:  (720) 946-1450

E-Mail: cjb@rcflp.com

 

13.                               Successors and Assigns.  This Guarantee shall
extend to and inure to the benefit of the Beneficiary and its successors and
assigns, and every reference herein to a Guarantor is a reference to, and shall
be construed as including, each Guarantor and the successors and assigns of such
Guarantor, to and upon all of whom this Guarantee and agreement shall extend and
be binding.

 

14.                               Further Assurances.  Each Guarantor agrees to
execute and deliver to the Beneficiary all such certificates, documents,
agreements and instruments and to take all such other action as may be
reasonably requested by the Beneficiary to more fully vest in and assure the
Beneficiary of all of the rights, powers, privileges and remedies herein
intended to be granted to or conferred upon the Beneficiary.

 

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15.                               GOVERNING LAW.  THIS GUARANTEE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
COLORADO, NOT INCLUDING THE CONFLICTS OF LAW AND CHOICE OF LAW PROVISIONS
THEREOF.

 

16.                               WAIVER OF JURY TRIAL.  EACH GUARANTOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS GUARANTEE, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE BENEFICIARY
OR SUCH GUARANTOR.  EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION
OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN AGREEMENT AND EACH
OTHER LOAN DOCUMENT (AS DEFINED IN THE LOAN AGREEMENT).

 

17.                               Benefit to the Guarantors.  The Borrower and
the Guarantors are engaged in related businesses and are integrated to such an
extent that the financial strength and flexibility of the Borrower has a direct,
tangible and immediate impact on the success of the Guarantors.  Each Guarantor
will derive substantial direct and indirect benefit from the extension of credit
to the Borrower under the Loan Agreement, and each Guarantor will receive
reasonably equivalent value in return for providing this Guarantee and the
collateral security to be provided by such Guarantor.  Each Guarantor hereby
waives any right to revoke this Guarantee, and acknowledges that this Guarantee
is continuing in nature and applies to all Guaranteed Obligations, whether
existing now or in the future.  Each Guarantor knowingly waives certain rights
and defenses as set forth in this Loan Agreement in contemplation of the
benefits that it will receive.

 

18.                               Indemnification.  Each Guarantor agrees to
pay, indemnify, save and hold harmless, and defend, the Beneficiary, its
Affiliates, their successors and assigns, and each of their respective
directors, officers, partners, managers, members, shareholders, owners,
employees, affiliates, representatives and advisors from and against any and all
claims, damages, losses, penalties, liabilities, judgments, suits, proceedings,
taxes, costs and expenses (including, without limitation, fees and disbursements
of counsel) which may at any time (including, without limitation, at any time
following the payment of the Guaranteed Obligations or any Loan Document) be
imposed on, incurred by or asserted against any such indemnified person, in any
way relating to, in connection with or arising out of this Guarantee, the Loan
Agreement, any other Loan Document and the transactions contemplated hereby and
thereby and any claim, investigation, subpoena, litigation, proceeding or
otherwise related to or arising out of this Guarantee or any other Loan Document
or any transaction contemplated hereby or thereby (but in any case excluding any
such claims, damages, losses, liabilities, costs or expenses incurred by reason
of the gross negligence or willful misconduct of any indemnitee).  The
indemnification obligations of each Guarantor under this paragraph shall survive
the payment in full of the Loan Agreement and the other Loan Documents and the
termination and release of this Guarantee.

 

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19.                               Right of Set-off.  Upon the occurrence and
during the continuance of any Event of Default, the Beneficiary is hereby
authorized at any time and from time to time, without notice to any Guarantor,
the Borrower, or any other guarantor or person (any such notice being expressly
waived by each Guarantor and the other Credit Parties), to set off and apply any
and all deposits (general or special, time or demand, provisional or final), at
any time held and other indebtedness at any time owing by the Beneficiary to or
for the credit or the account of any Credit Party against any and all of the
Guaranteed Obligations of any Credit Party now or hereafter existing, although
such Guaranteed Obligations may be contingent and unmatured.  The Beneficiary
agrees promptly to notify each Guarantor and the appropriate Credit Party after
any such set-off and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application.  The rights of
the Beneficiary under this Section 19 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Beneficiary may have.

 

20.                               Amendments.  Except as otherwise expressly
provided in this Guarantee, no amendment or waiver of any provision of this
Guarantee, nor consent to any departure by any Guarantor therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Beneficiary, and, in the case of any amendment, by each Guarantor and the
Beneficiary and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

 

21.                               Entire Agreement.  This written Guarantee
represents the final agreement by the undersigned with respect to the matters
set forth herein and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements by the undersigned.  There are no
unwritten oral agreements relating to this Guarantee or the matters set forth
herein.

 

22.                               Facsimile and Electronic Signature.  This
Guarantee may be validly executed and delivered by facsimile, portable document
format (.pdf) or other electronic transmission, and a signature by facsimile,
portable document format (.pdf) or other electronic transmission shall be as
effective and binding as an original signature.

 

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EXHIBIT E

 

FORM OF PROMISSORY NOTE

 

US$5,000,000

December 17, 2012

 

FOR VALUE RECEIVED, the undersigned, URANIUM RESOURCES, INC., a corporation
organized and existing under the laws of the State of Delaware (“URI” or
“Maker”), hereby promises to pay to the order of RESOURCE CAPITAL FUND V L.P.
(“RCF”) or other holder hereof (with RCF and any other holder hereof sometimes
referred to herein as “Holder”), at the place and times provided in the Bridge
Loan Agreement, dated as of December 17, 2012, by and among Maker, as the
borrower, those Subsidiaries of Maker from time to time party thereto, as
guarantors, and RCF, as the lender (together with all amendments, restatements,
amendments and restatements, modifications, revisions, increases, supplements,
extensions, continuations, replacements or refinancings from time to time in
accordance with the terms thereof, the “Loan Agreement”) the principal sum of
FIVE MILLION DOLLARS (US$5,000,000.00) or, if less, the aggregate unpaid
principal amount of the Loan under the Loan Agreement.  Subject to the Loan
Agreement, the Maker may voluntarily repay the Loan made by RCF to the Maker
pursuant to the Loan Agreement at any time prior to the Maturity Date. 
Capitalized terms used in this Note and not defined herein shall have the
meanings assigned thereto in the Loan Agreement.

 

This Note evidences the obligation of the Maker to repay the Loan made by RCF to
the Maker pursuant to the Loan Agreement.

 

Maker further agrees to pay and deliver to Holder, when and as provided in the
Loan Agreement, interest on the outstanding principal amount hereof at the rate
and at the times specified in the Loan Agreement.  The unpaid principal amount
of this Note from time to time outstanding is subject to mandatory repayment
from time to time as provided in the Loan Agreement.  All payments of principal
and interest on this Note shall be payable in lawful currency of the United
States of America in immediately available funds as specified in the Loan
Agreement.

 

This Note is made by the Maker pursuant to, and is subject to, all of the terms
and conditions of the Loan Agreement.  Reference is hereby made to the Loan
Agreement and the documents delivered in connection therewith for a statement of
the prepayment rights and obligations of the Maker, a description of the
collateral in which Liens have been granted by the Maker to secure the payment
and performance of the Maker hereunder, the nature and extent of such Liens, and
for a statement of the terms and conditions under which the due date of this
Note may be accelerated.

 

In addition to, and not in limitation of, the foregoing, the Maker further
agrees, subject only to any limitation imposed by applicable law and the
provisions of the Loan Agreement, to pay all expenses, including reasonable
attorneys’ fees and legal expenses, incurred by any Holder hereof in endeavoring
to collect any amounts due and payable hereunder which are not paid and
delivered or otherwise satisfied when due, whether by acceleration or otherwise.

 

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The Maker, for itself and for all endorsers hereof, hereby waives all
requirements as to diligence, notice, demand, presentment for payment, protest,
notice of intent to accelerate, notice of acceleration and notice of dishonor. 
No failure on the part of the Holder hereof to exercise, and no delay in
exercising, any right, power or privilege hereunder shall operate as a waiver
thereof or a consent thereto; nor shall a single or partial exercise of any such
right, power or privilege preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.

 

This Note and the rights of Maker and any Holder hereof are governed by the laws
of the State of Colorado.  All disputes and claims arising out of or relating to
this Note shall be decided by arbitration in accordance with the provisions for
arbitration set forth in Section 10.8 of the Loan Agreement.

 

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