EXHIBIT 10.52
EXHIBIT "G"
CONTRACT
SERVICES AGREEMENT
for
THE SWEETWATER URANIUM MILL FACILITY
between
KENNECOTT URANIUM COMPANY,
as Manager and on behalf of
THE GREEN MOUNTAIN MINING VENTURE,
and
U. S. ENERGY CORP.,
and
CRESTED CORP.
d/b/a
USE/CC
as Contractor
EXHIBIT 10.52
RECITALS.....................................................................1
AGREEMENT....................................................................1
SECTION ONE..................................................................1
1.1 Definitions..............................................................1
1.2 Headings.................................................................1
1.3 References...............................................................2
1.4 Incorporation of Annexes and Appendices..................................2
1.5 Engagement of Contractor.................................................2
1.6 Payment to Contractor....................................................2
1.7 Independent Contractor...................................................2
1.8 Assignment...............................................................3
1.9 Controlling Law..........................................................3
1.10 Waiver of Jury Trial....................................................3
1.11 Entire Agreement; Severability..........................................3
SECTION TWO..................................................................4
2.1 Laws, Ordinances, Permits and Licenses...................................4
2.2 Qualification to do Business.............................................5
2.3 Performance of Work......................................................6
2.4 Insurance and Bonds......................................................6
2.5 Nonwaiver of Defaults....................................................7
2.6 Strikes or Lockouts......................................................7
2.7 Claims by Contractor.....................................................7
2.8 Site and Document Inspections............................................7
2.9 Contractor's Warranty....................................................8
2.10 Back Charges............................................................9
2.11 Indemnification........................................................10
2.12 Waiver and Release of Liens............................................10
2.13 Owner-Furnished Materials, Tools and Equipment.........................11
2.14 Contractor's Security Responsibilities.................................11
2.15 Inspection of Work.....................................................11
2.16 Cooperation............................................................12
2.17 Progress...............................................................12
2.18 Force Majeure..........................................................12
2.19 Suspension.............................................................13
2.20 Expiration or Termination..............................................14
2.21 Intentionally Omitted..................................................15
2.22 As-Built Drawings and Specifications...................................15
2.23 Pre-Operational Testing................................................15
2.24 Final Inspection and Acceptance........................................15
2.25 Accounting Audit.......................................................15
EXHIBIT 10.52
SECTION THREE...............................................................16
3.1 Notices.........................................................16
3.2 Insurance.......................................................17
3.3 Liability of Contractor.........................................17
3.4 Payment for Reimbursable Costs..................................18
3.5 Method and Time of Payment......................................18
3.6 Repayment by Contractor.........................................20
3.7 Commencement and Completion of the Work.........................20
ANNEX AND APPENDICES
Annex I: Definitions
Appendix A: Description of the Work
Appendix B: Permits and Bonds
Appendix C: Required Insurance
Appendix D: Reimbursable Costs
EXHIBIT 10.52
CONTRACT SERVICES AGREEMENT
THIS CONTRACT SERVICES AGREEMENT (the "Agreement"), made as of June 23,
1997 is by and between Kennecott Uranium Company, a Delaware corporation
("KUC"), as Manager and on behalf of the Green Mountain Mining Venture, a joint
venture between Kennecott Uranium Company, U.S. Energy Corp., a Wyoming
corporation ("USE"), and a joint venture between USE and Crested Corp., a
Colorado corporation ("Crested") (the joint venture between USE and Crested is
referred to as "USE/CC") ("Owner"), and USE/CC ("Contractor").
RECITALS
A. Owner owns an uranium ore processing plant and certain related
facilities in Sweetwater County, Wyoming, known as the Sweetwater Mill. The
Sweetwater Mill is currently on standby status.
B. Owner desires to make certain improvements to the Sweetwater Mill so
that the Sweetwater Mill can be placed on operational status in compliance with
the rules and regulations of the Nuclear Regulatory Commission (the "NRC") in
the event that the GMMV makes a decision in the future to operate the mill.
C. Contractor has the skill and expertise to advise Owner with respect
to the improvements and other activities necessary, including the associated
permitting activities, to place the mill on operational status and the skill and
expertise necessary to develop a strategy for, and to supervise and to perform
the design, engineering, permitting, procurement and other work necessary to
complete the improvements desired by Owner and to place the Sweetwater Mill on
operational status by performing the Work as described in Appendix A to this
Agreement. The Work will be performed in two phases. Phase I is the evaluation
phase, the components of which are set out in Appendix A to this Agreement.
Phase II will involve implementation of the detailed plan for placing the
Sweetwater Mill on operational status which will be developed as part of the
evaluations conducted in Phase I.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of
which are acknowledged by Owner and Contractor, the parties agree as follows:
SECTION ONE
1.1 Definitions.
Capitalized terms used in this Agreement are defined in Annex I.
1.2 Headings.
The Section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
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EXHIBIT 10.52
1.3 References.
Any reference to any federal, state, local, or foreign statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder unless the context requires otherwise.
The word "including" shall mean including without limitation.
1.4 Incorporation of Annexes and Appendices.
The Annexes and Appendices identified in this Agreement are incorporated
by reference and made a part of this Agreement.
1.5 Engagement of Contractor.
Owner engages Contractor to perform the Work at the Sweetwater Mill, and
Contractor agrees to complete the Work to the reasonable satisfaction of Owner,
all in accordance with this Agreement.
1.6 Payment to Contractor.
Owner shall pay Contractor the amount of Reimbursable Costs incurred by
Contractor in performing the Work as full consideration for the performance of
the Work as provided in Section 3.4 of this Agreement. Owner agrees that any
Reimbursable Costs incurred in connection with the Work after May 1, 1997 shall
be reimbursed by Owner.
1.7 Independent Contractor.
(a) Contractor shall perform all activities under this Agreement as an
independent contractor and shall in no way act, or purport to act, as Owner's
agent. Contractor shall be responsible for and shall withhold or pay, or both,
as may be required by law, all taxes pertaining to the employment of its
personnel and/or performance of the Work. All fines, penalties or other charges
imposed or assessed against Contractor by reason of its violation of, or failure
to comply with, any provision of any law, together with all expense of defending
litigation in respect thereto, shall be paid by Contractor and shall not be a
reimbursable cost.
(b) All personnel performing the Work shall be engaged by Contractor or
its subcontractors. Contractor may engage qualified subcontractors to perform
portions of the Work, however, Contractor shall be solely responsible for the
performance of the Work by its employees and the employees of its subcontractors
and shall provide adequate supervision of such employees so as to ensure
compliance with the terms and conditions of this Agreement. Contractor shall
remove any of its employees or any of its subcontractors, or shall cause its
subcontractors to remove their employees, from the Work if Owner considers such
a removal necessary in the interest of Owner and so advises Contractor in
writing.
(c) Except as otherwise expressly provided in this Agreement, Contractor
will provide all consultants, supervisors, tools, services, facilities,
equipment, labor, materials and supplies needed to accomplish and complete the
Work.
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EXHIBIT 10.52
1.8 Assignment.
Contractor may not assign this Agreement or any part thereof without the
prior written consent of Owner except that Contractor may engage subcontractors
with respect to the Work so long as Contractor guarantees the performance of
this Agreement in all respects by each such subcontractor and assumes full
responsibility for any and all of their acts or omissions. Contractor will
notify Owner of its intent to engage any subcontractor and the identity of such
subcontractor along with a description of the nature of the portion of the Work
to be performed by the subcontractor and evidence of the subcontractor's ability
to perform such work prior to engaging such subcontractor.
1.9 Controlling Law.
This Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Wyoming without giving effect to any choice or
conflict of law provision or rule (whether of the State of Wyoming or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Wyoming.
1.10 Waiver of Jury Trial.
Each of the parties hereto agrees that it shall not seek a jury trial in
any proceeding based upon or arising out of or otherwise related to this
Agreement or any of the other documents and instruments contemplated hereby and
EACH OF THE PARTIES HERETO HEREBY WAIVES ANY AND ALL RIGHT TO ANY SUCH JURY
TRIAL.
1.11 Entire Agreement; Severability.
(a) This Agreement contains the entire agreement between the parties and
shall supersede all other writings with respect to the engagement of the
Contractor to perform the Work. The parties shall not be bound by, or be liable
for any statement, representation, promise, inducement or understanding with
respect to performance of the Work not set forth in this Agreement. No
amendments or modifications of any of the terms or conditions shall be valid
unless reduced to writing and signed by both parties.
(b) Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.
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EXHIBIT 10.52
SECTION TWO
2.1 Laws, Ordinances, Permits and Licenses.
Contractor shall be aware of and fully informed with respect to, and
shall fully comply with, all present and future laws, ordinances, orders, rules,
regulations, safety plans, and requirements of every duly constituted
governmental authority, agency or instrumentality, shall obtain and pay for, and
take all actions necessary to maintain and renew all required permits and
licenses, certificates and approvals (collectively "permits") required to be
obtained by Contractor in connection with the Work, except as otherwise
expressly provided in this Agreement:
(a) Without limiting the generality of the foregoing, Contractor shall
be aware of and shall fully comply with all Environmental Laws, all employment
and equal opportunity laws (including, without limitation, the Fair Labor
Standards Act of 1938, as amended, the Immigration Reform and Control Act, the
Americans With Disabilities Act of 1990, the Veteran's Readjustment Act of 1974,
and the Rehabilitation Act of 1973 and all orders and regulations promulgated
pursuant to such acts) and all other acts, laws orders and regulations that may
be required of Owner or Contractor with respect to the Work;
(b) Without limiting the generality of the foregoing, Contractor shall
be aware of and fully informed with respect to Contractor's responsibilities
under, and shall fully comply with all MSHA/OSHA laws. Contractor shall apply
for and obtain a contractor identification number as required under the
MSHA/OSHA laws. Contractor shall be responsible for compliance by Contractor and
its subcontractors with all standards, rules, and regulations promulgated under
applicable MSHA/OSHA laws, and shall be responsible for any citations or orders
issued thereunder arising out of work to be performed pursuant to this Contract,
including any assessment levied in connection therewith;
(c) Contractor shall notify Owner immediately of any release or other
incident reportable under SARA Title III or other environmental law or
regulation. If such notice cannot be immediately provided to Owner, Contractor
shall make the requisite notification. Contractor further agrees to notify Owner
promptly upon the discovery of any hazardous substance or contaminant (as
defined by CERCLA), to advise Owner of any hazardous or toxic substance to be
used by Contractor in connection with the Work and to furnish Material Safety
Data Sheets for all such materials;
(d) Contractor agrees to comply with all stipulations, directives,
orders and requirements of any public body or officer having jurisdiction over
entry upon or use of any sites of the Work affecting land, water, air, and the
products thereof, which are now or may become applicable to operations covered
by this Agreement or arising out of performance of the Work. Contractor agrees
to report to Owner as soon as practicable, but not later than 12 hours after,
all accidents or occurrences resulting in actual or threatened damage to the
work site or to the environment;
(e) During the term of this Agreement, Owner will use commercially
reasonable efforts to maintain, or to cause to be maintained, the operating
permits and bonds set out in Appendix B to this Agreement; provided, however,
that Owner does not make any representation
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EXHIBIT 10.52
or warranty with respect to its ability to maintain or to cause to be maintained
such permits or bonds, or with respect to the ability of Contractor to conduct
any operations on or with respect to the Sweetwater Mill pursuant to such
permits and bonds nor does Owner represent or warrant that such permits and
bonds are the only permits and bonds required to conduct the Work. For all
permits and bonds that remain in the name of Owner, Owner will make all payments
and provide all notices required with respect to such permits and bonds.
Contractor shall develop and shall recommend to Owner a strategy for negotiation
of all amendments, renewals or other modifications to such permits or bonds as
may be necessary to allow Contractor to complete the Work. Owner will implement
such strategy in cooperation with Contractor unless such strategy is, in Owner's
reasonable judgment, inconsistent with applicable law, regulation or
administrative policy or the terms of this Agreement, such strategy jeopardizes
the continued existence of such permits or bonds, or such strategy will subject
Owner to penalties under such law, regulation, policy, permits or bonds. To the
extent permitted by applicable law, regulation and administrative policy and so
long as such direction is consistent with the preceding sentence, Contractor
will prepare all correspondence, drawings and other documents related to, and
will direct the course of all negotiations with such agencies and businesses
with respect to the terms, conditions, renewals, amendments, extensions,
replacement or transfer of such permits and bonds; provided, however, that Owner
will initiate all contacts with the agencies or businesses involved and will
participate in all meetings and telephone conferences or other conversations
with such agencies and businesses and will approve in advance the form and
content of all correspondence and other documents prepared by Contractor in
connection with such negotiations prior to submission to such agencies and
businesses.
(f) Contractor shall also promptly develop a strategy with respect to,
and advise Owner as to, any additional permit or bond or increase in the amount
of an existing bond that is or will be required with respect to the Work. Within
15 days of receiving notice from Contractor as to any such need, Owner will
determine if it desires to obtain such permit, bond or increase in the amount of
a bond in its own name, in which case the permit or bond will be treated in the
same manner as the permits and bonds set out in Appendix B, or if it desires for
Contractor to secure the permit or bond in its own name, in which case
Contractor shall be solely responsible for the costs, terms and conditions of
such permit, bond or increase in the amount of a bond provided that such permit
or bond cannot be binding on Owner or extend beyond the date of termination of
this Agreement. If requested by Contractor, Owner will participate in, and
cooperate with respect to, negotiation of such permits and bonds.
(g) All costs and expenses incurred by Owner in carrying out the
activities described in this Section 2.1 shall be included in the Transition
Costs as provided in the Acquisition Agreement.
2.2 Qualification to do Business.
Contractor is, and agrees to remain, qualified to do business in the
State of Wyoming and to insure that all subcontractors engaged by Contractor are
qualified to do business in the state.
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EXHIBIT 10.52
2.3 Performance of Work.
(a) Except as expressly provided in this Agreement, Contractor shall
perform all consulting, planning, design, engineering, procurement,
coordination, construction, reclamation, permitting and other activities
necessary to accomplish the Work in accordance with this Agreement and in
accordance with the best standard practices used in the industry and in a good
and workmanlike manner.
(b) Contractor shall at all times maintain a safe work place for the
performance of the Work and conduct all operations under this Agreement in a
manner to avoid the risk of bodily harm to persons or risk of damage to any
property. Contractor shall promptly take all precautions which are necessary and
adequate against any conditions which involve a risk of bodily harm to persons
or damage to any property. Contractor shall, at all times, ensure that all work
areas are kept neat, clean, and in safe condition.
(c) Contractor will comply with the highest standards of safety and
accident prevention found in (i) applicable laws, ordinances, building and
construction codes, orders, rules, and regulations, (ii) the latest edition of
the "Manual of Accident Prevention in Construction," as published by the
Associated General Contractors of America Inc. and (iii) the latest edition of
the "Accident Prevention Manual for Industrial Operations" as published by the
National Safety Council, Inc. Contractor shall ensure that hard hats, safety
glasses, steel-toed leather work boots and other appropriate protective
equipment shall be worn at all times by Contractor's and all subcontractors'
personnel while on Owner's property.
(d) Contractor shall ensure, by exercising all reasonable means, that
its agents and employees and those of its subcontractors are neither under the
influence of, nor do they use, possess, consume, transfer, manufacture, or sell
or attempt to sell any form of alcohol, intoxicant, narcotic, depressant,
stimulant, hallucinogen, or illegal drug or mind- or perception-altering
substance (except the taking of prescribed drugs under the direction of a
licensed, qualified physician so long as such drugs do not pose a risk to Owner,
Contractor, any subcontractor, their employees or the public) while on Owner's
property or while performing Work.
(e) Contractor shall provide and maintain adequate first aid facilities
at the job site and arrange for emergency treatment of injuries by doctors in
private practice. Owner will not assume any responsibility, financial or
otherwise, for any hospital, medical, or surgical care or treatment which
Contractor, subcontractors, or their employees may require during the course of
the Work or at any time thereafter.
2.4 Insurance and Bonds.
Contractor shall not commence work until all insurance and bonds to be
furnished by Contractor hereunder have been approved in writing by Owner.
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EXHIBIT 10.52
2.5 Nonwaiver of Defaults.
Failure of Owner or Contractor at any time or from time to time to
enforce or require strict observance and performance of any term or condition of
this Agreement will not constitute a waiver of, or affect, or impair such term
or condition in any way; nor will such failure affect the right of either party
to avail itself at any time of such remedies as it may have for any breach or
breaches of such terms or conditions by the other party.
2.6 Strikes or Lockouts.
Owner accepts no responsibility for any expense or delays caused to
Contractor by (a) strikes, slowdowns or other concerted employee
work-interrupting activities by any employee group, including employees of
Contractor, or others, or (b) lockouts by any employer, including Contractor.
2.7 Claims by Contractor.
All claims of Contractor, all questions concerning interpretation or
clarification of this Agreement or the acceptable fulfillment of this Agreement
on the part of Contractor, including drawings and specifications, and all
questions as to compensation and to extension of time shall be submitted in
writing to Owner for determination. All determinations, instructions and
clarifications of Owner shall be final. In particular:
(a) At all times, Contractor shall proceed with the Work in accordance
with the determinations, instructions and clarifications of Owner. Contractor
shall be solely responsible for requesting instructions or interpretations and
shall be solely liable for any cost and expenses arising from its failure to do
so; and
(b) It is specifically agreed by Contractor that any and all claims by
Contractor against Owner arising out of this Agreement or the performance of the
Work shall be waived unless presented in writing to the Owner within the time
limit specified in this Agreement but in no event in excess of 90 calendar days
after occurrence of the event or circumstances giving rise to such claim. All
such claims shall be supported by such information, costs and data in such
detail and specificity as may be required by Owner to justify and substantiate
such claims. It is agreed that under no circumstances shall the Contractor be
compensated or reimbursed for expenses incurred in claim preparation,
presentation, or prosecution unless directed by Owner.
2.8 Site and Document Inspections.
Contractor acknowledges that prior to entering into this Agreement:
(a) Contractor has received and reviewed all drawings, reports and other
documents referred to in this Agreement, including the Appendices, and that
Contractor understands the scope of Work contemplated by this Agreement.
(b) Contractor has visited the Sweetwater Mill and is in the process of
familiarizing itself with the site and the conditions under which Contractor
will perform the Work. Contractor
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EXHIBIT 10.52
further acknowledges that Contractor has familiarized itself with all laws and
regulations applicable to the performance of the Work, including in particular
all laws and regulations pertaining to the NRC that might be applicable to the
Sweetwater Mill and the Work. By execution of this Agreement, Contractor
acknowledges such visit and an understanding of all circumstances and conditions
under which the Work must be accomplished. Contractor shall have the sole
responsibility of satisfying itself concerning the nature and location of the
Work and the general and local conditions.
(c) Any prior work, investigations or studies made by Owner with respect
to the Sweetwater Mill or the Work which are made available to Contractor by
Owner were made by Owner solely with respect to its decision to proceed with the
Work and were made only for the purpose of study and design. The records of such
work, investigations or studies are not a part of this Agreement and are
furnished solely for the convenience of Contractor and Contractor acknowledges
that its agreement to enter into this Agreement is in no way premised upon the
scope, completeness or accuracy of such work, investigations or studies. Owner
makes no warranty, and assumes no responsibility whatsoever, in respect to the
sufficiency or accuracy of the work, investigations or studies thus made.
2.9 Contractor's Warranty.
(a) Contractor warrants and guarantees that the Work shall be performed
with that degree of skill and judgment which is normally exercised by recognized
professional consulting (including environmental consulting), engineering,
procurement and construction management firms performing services of a similar
nature taking into account the oversight responsibilities of the NRC and other
affected agencies with respect to portions of the Work, and shall be free of
faulty planning, consulting, engineering, design, procurement, construction
management and quality assurance, field engineering and other services of
Contractor, and that the Work shall be performed and shall conform to generally
accepted consulting, engineering and construction management standards and
practices.
(b) Contractor's liability for breach of the warranty and guarantee
given in this paragraph or the negligent performance of the Work to be performed
hereunder by Contractor, its subcontractors or their employees shall be as
follows:
(i) Contractor, upon receipt of notice from Owner, shall
promptly remedy the defect or damage identified by Owner
through reperformance of the work and/or repair or
replacement of the facility so identified;
(ii) If Contractor is unable to so remedy the defect or damage
to the satisfaction of Owner promptly, or if Contractor
elects not to perform such remedy, Owner shall have the
right to reperform the work and/or repair or replace the
facility; and
(iii) The cost of any work necessary to remedy the defect or
damage resulting from Contractor's breach of the warranty
and guarantee given in this section or the misconduct,
error or omission or negligent performance of the Work
shall be to Contractor's account, and Contractor shall not
be
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EXHIBIT 10.52
entitled to any fee, overhead expense, general or
administrative expense in connection with such remedy. For
purposes of calculating KUC's contributions to the Green
Mountain Mining Venture as provided in Section 3 of the
GMMV Amendment, each dollar contributed by KUC will count
against KUC's obligation pursuant to Subsection 3(a) and
each such dollar will be treated as a two dollar
contribution for purposes of Subsection 3(b) of the
amendment; or
(iv) Owner may exercise any of its other rights and remedies
as provided in this Agreement.
2.10 Back Charges.
In addition to the rights and obligations attendant to the Contractor's
warranty in Section 2.9 above, Owner shall have the following rights and
Contractor the following obligations:
(a) In the event any aspect of the Work performed by Contractor or its
subcontractors under this Agreement is found to be defective as to workmanship
or not to be in conformance with plans, specifications or NRC or other agency
requirements, it remains the responsibility of Contractor to promptly correct
any deficiency when so directed.
(b) If upon being notified by Owner of deficient Work and having been
directed to correct the deficient Work by a specific date consistent with the
current project schedule, Contractor states, or by its action indicates to
Owner, its inability or unwillingness to comply, then Owner shall have the right
to suspend further Work by Contractor pursuant to Section 2.19 of this Agreement
and to proceed to have the Work accomplished by the best and/or most expeditious
means available to Owner (as determined by it, in its sole discretion) and back
charge Contractor for the cost of the Work undertaken by Owner. For purposes of
calculating KUC's contributions to the Green Mountain Mining Venture as provided
in Section 3 of the GMMV Amendment, each back charged dollar will count against
KUC's obligation pursuant to Subsection 3(a) and each back charged dollar will
be treated as a two dollar contribution for purposes of Subsection 3(b) of the
amendment.
(c) Before proceeding on such back charge work, Owner will advise
Contractor and forward to Contractor an Authorization of Back Charge for
Contractor's signature. However, failure of Contractor to provide such written
authorization shall not impair Owner's right to proceed to have the work
performed and charge Contractor therefor. Contractor shall pay actual costs
incurred, computed as shown above, or Owner may withhold such sum from funds due
Contractor. The performance of back charge work shall not relieve Contractor of
any of its responsibilities under this Contract, including but not limited to,
express or implied warranties, guarantees, specified standards for quality,
liabilities and indemnification, and the Contract schedule.
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EXHIBIT 10.52
2.11 Indemnification.
Contractor agrees to indemnify, defend, release and hold harmless the
Indemnified Parties from and against the entirety of any and all Adverse
Consequences, whether arising during or after the term of this Agreement, any of
them shall suffer:
(a) As the result of any breach of any obligation, representation,
covenant or warranty of Contractor or its subcontractors as set forth in this
Agreement;
(b) As the result of (i) the release, threatened release, discharge,
storage, treatment, disposal or presence of Hazardous Materials at, upon, about
or beneath the Sweetwater Mill as a result of Contractor's operations; (ii) the
release, threatened release, or discharge of Hazardous Materials emanating or
migrating, or threatening to emanate or migrate to, from or across Owner's
properties arising out of Contractor's or its subcontractors' operations; (iii)
any violation of any Environmental Laws pertaining to the Sweetwater Mill and
the activities thereon; or (iv) the treatment, storage, disposal, arrangement
for disposal, or transportation of Hazardous Materials by Contractor at or to a
facility other than one at the Sweetwater Mill; and
(c) Contractor acknowledges and agrees that it has assumed the sole
obligation and duty to provide a safe place to work for its employees and the
employees of its subcontractors and agrees that Owner has no responsibility
therefor, and that any claim for damages by employees of Contractor or its
subcontractors against Owner alleging that Owner failed to furnish a safe place
to work, shall not be construed as relieving Contractor of its indemnity
obligations to Owner under the terms of this Agreement, except to the extent
such claims for damages arise from a non-apparent pre-existing site condition,
or from Owner's or its agents' (other than Contractor) negligence, willful
misconduct or violation of any representations hereunder.
2.12 Waiver and Release of Liens.
Contractor for itself and its subcontractors and for its and their
materialmen and employees and for all other persons performing any labor or
furnishing any labor or materials for any of the Work hereby waives to the full
extent permitted by law all mechanics', materialmen's or other liens, or payment
bond claims for or on account of the work done or materials furnished hereunder
so that the improvements of structures wherein the same may be incorporated and
the land to which they are appurtenant shall at all times be free and clear of
all such liens and claims. If such liens or claims are placed on Owner's
property by any person performing any labor or furnishing any labor or materials
for any of the Work, Contractor will promptly have such liens or claims removed
at Contractor's expense and Contractor shall indemnify Owner from any
liabilities associated with such lien.
2.13 Owner-Furnished Materials, Tools and Equipment.
In the event Owner furnishes materials or equipment for use on or with
respect to the Work, Contractor shall be solely responsible for inspecting and
using the same and for protection thereof from loss, damage of any kind and for
payment of any demurrage incurred.
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EXHIBIT 10.52
2.14 Contractor's Security Responsibilities.
Contractor shall at all times conduct all operations under this
Agreement in a manner to avoid the risk of loss, theft, or damage by vandalism,
sabotage, or other means to any property.
(a) Contractor shall promptly take all reasonable precautions which are
necessary and adequate against any conditions which involve a risk of a loss,
theft, or damage to property. Contractor shall continuously inspect all work,
materials, equipment, and facilities to discover and determine any such
conditions, and shall be solely responsible for discovery, determination, and
correction of any such conditions;
(b) Contractor shall ensure compliance by the employees of Contractor
and all subcontractors with Owner's security program for this site and all
applicable laws and regulations. Contractor shall cooperate with Owner on all
security matters and shall promptly comply with any project security
requirements established by Owner. In particular, Contractor agrees that all
vehicles that enter upon Owner's property, and all lunch, other containers, and
packages of Contractor, its subcontractors and their employees, shall be subject
to inspection by Owner's security personnel at any time while on Owner's
property;
(c) Owner will accept no responsibility for replacement of, protection
to, or policing of, Contractor's equipment, tools, or materials which are
furnished or used in its work at Owner's property; and
(d) Contractor shall, at its own expense, replace any lost or stolen
property, repair any damage to all property of whatever kind or character,
whether publicly or privately owned, including the property of Owner, which may
result from its operations under this Contract.
2.15 Inspection of Work.
(a) Owner shall at any and all times have access to the Work and to the
premises affected thereby and to all equipment and materials, and to related
books, records, correspondence, instruction plans, drawings, receipts,
facilities, and memoranda of Contractor for inspection purposes including the
utilization at Owner's expense of third-party inspectors; and Contractor shall
provide proper facilities for such access and inspection.
(b) Owner shall at all times remain the primary contact with any
regulatory agency for which Owner is the permittee or licensee and shall have
the sole responsibility for determining through inspection of the Work and
consultation with Contractor when, and under what circumstances, drawings,
specifications, correspondence and the like shall be submitted to such agencies.
Contractor shall not initiate any contact with such agencies except as expressly
provided in this Agreement.
2.16 Cooperation.
Owner may perform work, including the normal operations of Owner, in the
vicinity of or on the premises affected by the Work, and Contractor's work or
use of certain facilities may
11
EXHIBIT 10.52
be interfered with as a result of such concurrent activities. Owner will
cooperate with Contractor so that Contractor may perform the Work as required by
this Agreement and Contractor will cooperate in scheduling the Work in such a
manner as will minimize interference with any work being undertaken by Owner.
2.17 Progress.
(a) Contractor will provide to Owner a program, in reasonable detail, of
the operations and activities that Contractor expects to undertake in
progressing to accomplish Phase I of the Work in the ensuing calendar quarter.
The program will be submitted to Owner at least 15 days prior to the
commencement of any such operations or activities. Within 30 days after the end
of each calendar quarter, Contractor will submit to Owner a report, in
reasonable detail, that describes the operations and activities that were
actually undertaken in the calendar quarter and any activities described in the
program that were not undertaken and accomplished.
(b) Contractor will not undertake any operations or activities that
depart from Phase I of the Work or the operations and activities set out in the
program without submitting to Owner a proposed amendment to the program that
describes such amended operations and activities and, if such amendment would
require a modification of Phase I of the Work as described in Appendix A, a
proposed amendment to the Work. Within 20 days of any such proposal, Owner will
notify Contractor of its acceptance or rejection or the proposed amendment,
which acceptance will not be unreasonably withheld so long as the proposed
amendment does not depart from the overall scope of the Work and is consistent
with the other terms and provisions of this Agreement. With respect to any
proposal for modification of the program prepared by Contractor or any proposal
to modify Phase I of the Work that departs from the overall scope of Work as
described in Appendix A, Owner may accept or reject such proposal at Owner's
sole discretion.
(c) Contractor will not undertake any operations or activities with
respect to Phase II of the Work until Contractor has developed, and Owner has
approved, a detailed description of the Work to be accomplished in Phase II.
Upon receipt of Owner's approval, Contractor may commence operation and
activities with respect to Phase II by submitting a program as provided in
Subsection 2.17(a). Owners response to that proposal and any proposed amendments
to Phase II of the Work will be governed by the provisions of Subsections
2.17(a) and 2.17(b).
2.18 Force Majeure.
Except as provided in Subsections 2.18(b) or 2.18(c) below, the failure
to perform or to comply with any of the covenants or conditions contained in
this Agreement, either expressed or implied, on the part of either party shall
not be a ground for cancellation or termination or forfeiture of this Agreement,
and shall not create a liability for the party for failure to perform its
obligations during any period in which performance is prevented, in whole or
part, by causes herein termed "force majeure".
(a) For purposes of this Agreement, the term "force majeure" shall be
limited to substantial and unforeseeable events beyond the control of a party
that cannot be avoided through the diligent actions of a party, including
extreme weather conditions; earthquakes or cave-ins; unforeseeable
unavailability of labor, transportation, materials, machinery, equipment,
supplies,
12
EXHIBIT 10.52
utilities, or services even on premium terms; serious accidents; unavoidable
breakdown of major equipment, machinery, or facilities; injunctions issued by
any court; inability to obtain licenses, permits, or other authorizations in
spite of diligent efforts to do so; curtailment or suspension of activities to
remedy or avoid an actual, serious violation of environmental laws; acts of war
or conditions arising out of or attributable to war; riot; civil strife; fire;
explosion; or any similar cause beyond the reasonable control of the party
declaring force majeure.
(b) If either party desires to invoke the provisions of this Section
2.18, the invoking party shall give notice to the other party of the
commencement of the circumstances giving rise to such force majeure. The time
for discharging the party's obligations with respect to the prevented
performance shall be extended for the period of force majeure, provided that the
party invoking force majeure pursues diligent efforts to eliminate the event
that gave rise to the condition of force majeure. The existence of any event of
force majeure shall not relieve a party of the obligation to make any payments
required of a party with respect to maintenance of the Sweetwater Mill and the
permits and bonds associated with the properties in accordance with the terms of
this Agreement, making payments due under Section 3 of this Agreement and
carrying out the indemnities required by Section 2.11, nor shall an event of
force majeure extend the term of this Agreement. If an event of force majeure
prohibits performance by Contractor, but would not prohibit performance by the
Owner, for more than 120 days, Owner may terminate this Agreement for
convenience and will have no further obligation to Contractor hereunder.
(c) Notwithstanding the foregoing, neither party may invoke force
majeure with respect to any event that would otherwise constitute force majeure
if the duration of such event is less than 15 days.
2.19 Suspension.
Owner may, at its sole option, decide to suspend at any time the
performance of all or any portion of the Work if Owner determines that continued
performance by Contractor would or might violate any law or any rule, regulation
or order of any regulatory agency including, in particular, the NRC, would or
might threaten the continued existence of any permit or bond held by Owner, or
otherwise is not in compliance with the terms of this Agreement. In addition,
Owner may suspend the performance of the Work if Contractor has not performed
its obligations as set out in Subsections 2.1(e) and 2.1(f) of this Agreement.
Contractor will be notified of such decision by Owner in writing. During the
period of suspension, Contractor shall use its best efforts to utilize its
facilities, labor and equipment in such a manner as to minimize costs associated
with suspension and to continue to perform such portions of the Work as are not
subject to the suspension. Upon receipt of any such notice, Contractor shall,
unless the notice requires otherwise:
(a) Promptly discontinue the specified portion of the Work on the date
and to the extent specified in the notice;
(b) Place no further orders, contracts or subcontracts for material,
services, or facilities with respect to suspended Work other than to the extent
required in the notice;
13
EXHIBIT 10.52
(c) Promptly make every reasonable effort to obtain suspension, upon
terms satisfactory to Owner, of all orders, subcontracts, and rental agreements
to the extent they relate to performance of the Work suspended; and
(d) Continue to protect and maintain the Work including those portions
on which Work has been suspended.
Upon receipt of notice to resume suspended Work, Contractor shall immediately
resume performance of the suspended work to the extent required in the notice.
2.20 Expiration or Termination.
(a) This Agreement will expire on the earlier of (i) the completion of
the Work or (ii) the date that the Acquisition Agreement terminates or expires,
but in no case (notwithstanding Section 2.18 hereof) shall this Agreement extend
beyond October 30, 1998.
(b) In the event Owner determines that Contractor has not complied with
any obligation hereunder, Owner shall notify Contractor in writing setting out
specifically in what respect it is claimed that Contractor has failed to comply
with this Agreement. If the alleged failure is not cured to Owner's reasonable
satisfaction within ten (10) days after written notice is given, or if
Contractor has not within that time either commenced to cure the alleged breach
to the Owner's reasonable satisfaction and does not thereafter diligently
complete such cure, or fails successfully to challenge the legitimacy of the
allegation, Owner may terminate this Agreement by delivering to contractor
notice of such termination or Owner may seek such other remedies as it might
have in equity or at law.
(c) Contractor shall have the right to terminate this Agreement at any
time with respect to all but not less than all of the Work by giving written
notice to Owner. Upon such termination, all right, title, and interest of
Contractor under this Agreement shall terminate and Contractor shall be relieved
of all further obligations set forth in this Agreement which arise out of
Contractor's activities prior to the date of such termination except for the
obligations to correct defective work in Sections 2.9 and 2.10, the
indemnifications provided for in Section 2.11, any other obligation expressly
set forth in this Agreement as a post-expiration or post-termination obligation,
and any reclamation required by applicable law arising from Contractor's
operations.
(d) Upon termination or expiration of this Agreement, Contractor will
relinquish all occupancy of the Sweetwater Mill, free and clear of all
obligations, liens and encumbrances. Contractor will also relinquish possession
of all buildings, structures, facilities, improvements, machinery and equipment
that were acquired by, erected, placed, or became situated at the Sweetwater
Mill in connection with the Work and were paid for pursuant to this Agreement
(collectively, "Fixtures and Personalty"). In connection with the relinquishment
of the Fixtures and Personalty, Contractor will provide appropriate assignments
and bills of sale with respect to the Fixtures and Personalty in which
Contractor will represent that the Fixtures and Personalty are free and clear of
all obligations, liens or encumbrances created by, through or under Contractor.
14
EXHIBIT 10.52
(e) Contractor shall, within a period of three months from and after the
termination of this Agreement, remove from the Sweetwater Mill all personal
property that is owned solely by Contractor. If Contractor desires not to remove
any item of its personal property and Owner agrees in writing to allow such
property to remain at the Sweetwater Mill, such property shall become the
property of Owner.
2.21 Intentionally Omitted.
2.22 As-Built Drawings and Specifications.
During construction, Contractor shall maintain for Owner an accurate
record of the Work. Before final payment by Owner, Contractor shall revise any
drawings and specifications so that all such documents shall show the work as
actually installed.
2.23 Pre-Operational Testing.
Contractor will, in conjunction with Owner, conduct all necessary
pre-operational activities to ensure that the materials, equipment, controls and
systems have been tested, adjusted, and checked out to comply with the intent of
the design and to indicate satisfactory operation to Owner. Contractor will hand
over materials, equipment and systems to Owner after pre-operational checkout
for introduction of feed by Owner. Contractor will thereafter maintain adequate
personnel and facilities at the site until final acceptance of the work to
adjust, modify, repair, and otherwise service the facilities and equipment.
2.24 Final Inspection and Acceptance.
When Contractor considers that all Work is complete, Contractor shall so
inform Owner in writing. When the results of inspection and testing satisfy
Owner that all Work is completed and in accordance with the requirements of this
Agreement, Owner will notify Contractor in writing of final acceptance of the
Work.
2.25 Accounting Audit.
Contractor shall keep, and require any subcontractor to keep, a complete
set of records showing actual reimbursable costs in connection with the Work. In
compliance with the foregoing, Contractor will follow instructions which may be
given by Owner:
(a) Contractor shall keep full and accurate records and accounts of all
its activities in connection with this Contract, including without limitation,
reasonable substantiation of all expenses incurred based on actual costs and of
all property acquired or disposed of hereunder. Furthermore, Contractor shall
cause its agents and/or subcontractors to maintain reasonable controls, records
and accounts; and
(b) Owner shall have the right, at all reasonable times, through its own
representatives to examine, inspect, approve or disapprove the purchasing,
receiving, storing and issuance of materials, the auditing and paying of
invoices, timekeeping, preparation of payrolls, accumulation of cost records,
and other accounting functions pertaining to the Reimbursable Costs. Contractor
15
EXHIBIT 10.52
and all subcontractors shall preserve, for a period of three years unless Owner
requests additional time, the original documents of all pertinent records and
deliver to Owner those records which Owner may request, except that Owner may be
given a photocopy in lieu of the original of any document reasonably required by
Contractor, or its contractors or subcontractors.
SECTION THREE
3.1 Notices.
Any required notice, payment, or other communication contemplated by
this Agreement shall be in writing and shall be effective with respect to a
party (i) when personally delivered or delivered by courier at the party's
address as set out below; (ii) when delivered by electronic communication at the
party's fax number described below or at such other telecopy or fax number as
the party may designate in writing provided that such electronic communication
is followed by a delivery by mail or by personal service to the party's address;
or (iii) when delivered by mail deposited in the United States mail, postage
prepaid and registered or certified, with return receipt requested, and
addressed to the party at the party's address:
If to Owner: With Copy to:
Kennecott Uranium Company Kennecott Services Company
Attn: President Attn: Legal Department
Caller Box 3009 8315 West 3595 South
505 South Gillette Avenue P. O. Box 6001
Gillette, WY 82717-3009 Magna, UT 84044-6001
FAX (307) 687-6011 FAX (801) 252-3559
If to Contractor: With Copy to:
U.S. Energy Corp./Crested Corp. U.S. Energy Corp.
Attn: John L. Larsen Attn: Daniel P. Svilar
877 North 8th West 877 North 8th West
Riverton, Wyoming 82501 Riverton, Wyoming 82501
Fax: (307) 857-3050 Fax: (307) 857-3050
Either Owner or Contractor may change its address for future notices by
providing written notice to that effect to the other party.
3.2 Insurance.
(a) During the term of this Agreement and all times during performance,
and until completion of the Work, Contractor shall maintain in force the
insurance described in Appendix C to this Agreement, for the benefit of the
parties to this Agreement, all of their personnel and the personnel of all
subcontractors on site with companies satisfactory to Owner. Contractor shall be
responsible for compliance by all subcontractors with these insurance
requirements and shall furnish certificates as provided herein evidencing the
required insurance for the subcontractors.
16
EXHIBIT 10.52
(b) Certificates of such insurance shall be made out to Owner and shall
be furnished to Owner promptly and must reflect both the endorsement provisions
requiring 30 days prior written notice to be given before cancellation or
material change, and the additional interest where applicable. Each certificate
shall specify the date when such benefits and insurance expire. Contractor
agrees that such benefits and insurance, as specified above, shall be provided
and maintained until the entire work under this Agreement has been completed and
accepted by Owner. An original copy of each certificate shall be mailed or
delivered to:
Kennecott Uranium Company
Caller Box 3009
505 South Gillette Avenue
Gillette, Wyoming 82717-3009
FAX (307) 687-6011
Owner's approval or failure to disapprove insurance certificates furnished by
Contractor or subcontractors shall not release Contractor or subcontractors from
full responsibility for liability, damage, and accidents as set forth herein.
(c) It shall be a condition of approval that the required insurance must
be arranged with insurance companies authorized to do business in the State of
Wyoming.
(d) If at any time the Contractor-required insurance policies should be
canceled, terminated or modified so that the insurance is not in full force and
effect as required herein, Owner may terminate this Agreement for default or
obtain insurance coverage equal to that required herein and recover costs
therefor from Contractor.
3.3 Liability of Contractor.
(a) Contractor and subcontractors shall bear all risk of loss of or
damage to, and shall, as they deem necessary, carry fire, theft, physical
damage, or other insurance on their own and their employees' tools, equipment,
reusable materials (such as metal forms and metal scaffolding), trailers, any
property of their employees.
(b) The liability of Contractor assumed under this Agreement shall in no
manner be limited by the amount of insurance furnished by Owner or by the amount
of insurance which Contractor has or is required to provide by the terms
thereof.
(c) In addition to Contractor's liability for property damage as set
forth in this Agreement, Contractor shall also be responsible for any damage to
its vehicles and the vehicles of its subcontractors, employees, and agents or
representatives of Contractor or subcontractors while the vehicles are parked or
used on Owner's property.
(d) Contractor shall be responsible for and shall bear any and all risk
of loss or of damage to work in progress.
17
EXHIBIT 10.52
3.4 Payment for Reimbursable Costs.
(a) Contractor, as full compensation for the Work, shall be paid for all
Reimbursable Costs and such other costs as may be approved in writing by Owner
as are incurred by Contractor in performance of the Work to the extent and only
to the extent that (i) such costs are expressly authorized in Appendix D to this
Agreement and otherwise or incurred in compliance with this Agreement; and (ii)
the total of such costs, when taken together with the total costs spent by
Contractor pursuant to the Mineral Lease Agreement, amounts expended by the
Green Mountain Mining Venture after January 1, 1997 pursuant to Subsection 3(a)
of the GMMV Amendment, and all Transition Costs (as defined in the Acquisition
Agreement) is not more than $16,000,000.
(b) Contractor shall use all reasonable efforts to obtain any cash,
trade, quantity, freight or other discount or allowance available and refunds of
sales taxes and/or taxes and all such cash, quantity discounts or allowances,
refunds and rebates shall be for Owner's benefit and credited against
Reimbursable Costs or paid directly to Owner. Contractor will exercise its best
efforts to minimize excess materials purchases. Excess materials or scrap
generated by Contractor as a result of its work under this Agreement will remain
the property of Owner. Contractor will stockpile or dispose of such materials as
directed by Owner.
3.5 Method and Time of Payment.
(a) Owner has initially advanced $1,000,000 to the Green Mountain Mining
Venture pursuant to the provisions of Subsection 4(a) of the GMMV Amendment in
order to establish a working capital account (the "Working Capital Account")
which Contractor may draw upon to fund activities associated with the Work and
which will qualify as Reimbursable Costs.
(b) From time to time, but at least once per month, Contractor shall
submit an itemized invoice (the "Invoice") to Owner for all Reimbursable Costs
for Work performed accompanied by such supporting documentation as Owner may
from time to time reasonably request, together with evidence, including executed
lien waiver forms satisfactory to Owner, of the payment and release of all
subcontractor's, mechanics', materialmen's and other liens (collectively , the
"Supporting Documentation"). Supporting Documentation for the Reimbursable Costs
for which Contractor seeks reimbursement shall include, but not be limited to
the following:
(i) Labor costs shall be supported by payroll abstracts which will
identify each employee of Contractor or its subcontractors
engaged in performing the Work, the employee's title, the date
and hours worked, the pay rate and a description of the work
performed;
(ii) Costs for materials, supplies, equipment, tools and other
tangible property shall be supported by invoices and bills of
sale showing ownership of all such materials, supplies,
equipment, tools and other tangible property in Owner's name;
(iii) Billings by Contractor for Owner approved services, expenses and
other costs for outside commitments, of vendors, suppliers and
subcontractors shall be supported
18
EXHIBIT 10.52
by copy of such third parties' original invoice and related
supporting documentation and will be attached to an Owner
approved authorization;
(iv) Billings for travel and subsistence expenses shall be supported
by travel expense reports supported by, among other things,
copies of airline tickets and copies of auto rental invoices,
copies of hotel/motel bills and appropriate receipts. All expense
reports will show the business purpose of the travel; and
(v) Billings for all other items for which Contractor seeks
reimbursement shall be supported by documentation in a form
reasonably satisfactory to Owner.
(c) Within 20 days of presentation to and receipt by Owner of the
Invoice and the Supporting Documentation, Owner will (i) provide to Contractor
funds adequate to reimburse Contractor for Reimbursable Costs and to restore the
Working Capital Account to its initial balance; or (ii) Owner will advise
Contractor of any amounts with respect to any Invoice or Supporting
Documentation that Owner believes in good faith are not supported by adequate
explanation or were not spent in compliance with the terms of this Agreement,
together with an explanation, in reasonable detail, of the basis for Owner's
objection to such Invoice or Supporting Documentation, in which case Owner will
provide funds to the extent that it does not contest the Invoice or Supporting
Documentation. Each dollar paid by Owner pursuant to this Amendment shall go
toward satisfaction of Owner's obligation to provide up to $16,000,000 to the
Green Mountain Mining Venture as provided in Section 3 of the GMMV Amendment. At
such time as the balance of Owner's obligation to provide up to $16,000,000 to
the Green Mountain Mining Venture as provided in Section 3 of the GMMV Amendment
has been reduced to less than $1,000,000, its obligation to restore the Working
Capital Account balance shall be reduced to be no more than the amount of the
remaining obligation.
(d) Payment by Owner of Contractor's Invoices shall be without prejudice
to Owner's right to audit Contractor's invoices in accordance with provisions of
this Agreement, and to challenge the correctness of the invoice at any time
thereafter. Payments otherwise due Contractor may be withheld in an amount
sufficient to satisfy any claim which Owner may have against Contractor.
(e) Notwithstanding the foregoing, Owner shall be entitled to withhold
from amounts due Contractor pursuant to this Section 3.5, any amounts necessary
to correct nonconforming, faulty or defective Work.
3.6 Repayment by Contractor.
Contractor shall promptly repay to Owner, within 30 days after receipt
of Owner's request, any overpayment by Owner of any Reimbursable Costs, whether
such overpayment is disclosed by an audit conducted pursuant to Section 2.25 of
this Agreement or otherwise.
19
EXHIBIT 10.52
3.7 Commencement and Completion of the Work.
Time is of the essence. The dates listed in Appendix A are critical to
the project schedule and are contractual obligations to Contractor. Contractor
shall furnish sufficient forces, facilities and equipment and shall work such
hours, including extra days and shifts to achieve the milestone dates listed.
IN WITNESS WHEREOF, the parties have executed this Agreement the day,
month and year first above written.
KENNECOTT URANIUM COMPANY
By /s/ L. R. Cardey-Yates
-------------------------------------
Its Director/Assistant Secretary
---------------------------------
U.S. ENERGY CORP.
By /s/ John L. Larsen
-------------------------------------
Its President
---------------------------------
U.S. ENERGY CORP. and
CRESTED CORP. dba the
USE/CC JOINT VENTURE
By: U.S. ENERGY CORP.
By /s/ John L. Larsen
-------------------------------------
Its President
---------------------------------
By: CRESTED CORP.
By /s/ Max T. Evans
-------------------------------------
Its President
---------------------------------
20
EXHIBIT 10.52
ANNEX I: DEFINITIONS
(a) "Contractor" means USE in its individual capacity and not in its
capacity as a participant in, manager of, or a party to the Green
Mountain Mining Venture;
(b) "Reimbursable Costs" means the costs incurred by Contractor in
performing the Work in compliance with the terms of this Agreement as
more particularly provided for in Section 3 of this Agreement;
(c) "Indemnified Parties" means Owner, the Green Mountain Mining
Venture, and the respective officers, directors, employees, agents,
contractors and professional advisors of each of them.
(d) "Owner" means Kennecott Uranium Company, as Manager of the
Sweetwater Mill for and on behalf of the Green Mountain Mining Venture,
the owner of the Sweetwater Mill.
(e) "Work" means the work described in Appendix A to this Agreement.
(f) "GMMV Amendment" means the Amendment of Mining Venture Agreement
dated the same date as this Agreement among Kennecott Uranium Company
and USE and USE/CC.
(g) "Acquisition Agreement" means the Acquisition Agreement dated the
same date as this Agreement among Kennecott Uranium Company and USE and
USE/CC.
(h) "Mineral Lease Agreement" means the Mineral Lease Agreement dated
the same date as this Agreement among Kennecott Uranium Company and
USE.
(i) "MSHA/OSHA laws" shall mean the Federal Occupational Safety and
Health Act of 1970, and the Federal Mine Safety and Health Amendments
Act of 1977 and any similar state safety and health acts, and all
regulations promulgated under said acts.
(j) "Adverse Consequences" means any and all actions, suits,
proceedings, hearings, investigations, charges, complaints, claims,
demands, injunctions, judgments, orders, decrees, rulings, damages
(including natural resource damages), dues, penalties, fines,
encumbrances, liens, costs and expenses of defense of a claim (whether
or not such claim is ultimately defeated), good faith settlements of
claims, judgments and disputes, costs (including without limitation
costs of investigative, reporting, clean-up, response, removal,
remedial, corrective action and closure activities relating to
Hazardous Materials), liabilities (including strict liability),
obligations, taxes, liens, losses, expenses and fees, including
consultants' and attorneys' fees and court costs and expenses.
(k) "Environmental Laws" means all applicable statutes, treaties,
regulations, rules, ordinances, codes, licenses, permits, orders,
approvals, authorizations and similar items of all federal, state, and
local governmental branches, agencies, departments, commissions,
boards, bureaus or instrumentalities, whether domestic or foreign,
having
21
EXHIBIT 10.52
jurisdiction, and all applicable judicial and administrative and
regulatory decrees, judgments and orders and all covenants running with
the land that relate to the protection of health or the environment,
including without limitation those that relate to the existence,
handling, manufacture, treatment, storage, disposal, use, generation,
release, discharge, refining or recycling of Hazardous Materials or
reclaiming real property. Without limiting the foregoing, Environmental
Laws include the Hazardous Materials Transportation Act (49 U.S.C. "
1801 et seq.), the Resource Conservation and Recovery Act of 1976, (42
U.S.C. " 6901 et seq.), the Clean Air Act (42 U.S.C. " 7401 et seq.),
the Federal Water Pollution Control Act (33 U.S.C. ' 1251), the Safe
Drinking Water Act (42 U.S.C. " 300f et seq.), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. " 9601 et seq.), the Toxic Substances Control Act (15 U.S.C. "
2601 et seq.), the Emergency Planning and Community Right to Know Act
(42 U.S.C. "11001, et seq.), the Occupational Safety and Health Act (26
U.S.C. " 651 et seq.), the Pollution Prevention Act of 1990 (42 U.S.C "
13101 et seq.), the Atomic Energy Act of 1954, 68 Stat. 919, the Energy
Reorganization Act of 1974, the Mine Safety and Health Act of 1977, the
Uranium Mill Tailings Radiation Control Act (42 U.S.C " 7901 et seq.),
and all similar or additional federal, state, local or foreign
statutes, all as amended, and all regulations promulgated thereunder.
(l) "Hazardous Materials" means any substance: (A) the presence of
which requires reporting, investigation, removal or remediation under
any Environmental Laws; (B) that is defined as a "hazardous waste,"
"hazardous substance" or "pollutant" or "contaminant" under any
Environmental Laws; (C) that is toxic, explosive, corrosive, flammable,
ignitable, infectious, radioactive, reactive, carcinogenic, mutagenic
or otherwise hazardous and is regulated under any Environmental Laws;
(D) the presence of which on a property causes or threatens to cause a
nuisance upon the property or to adjacent properties or poses or
threatens to pose a hazard to the health or safety of persons on or
about the property; (E) that contains gasoline, diesel fuel or other
petroleum hydrocarbons; or (F) that contains PCBs, asbestos or urea
formaldehyde foam insulation.
22
EXHIBIT 10.52
Appendix A
to
Contract Services Agreement
Description of the Work
23
EXHIBIT 10.52
GREEN MOUNTAIN MINING VENTURE
SWEETWATER MILL
EVALUATION OF MILL
ASSUMPTIONS
Utilize in-house and contract labor to review and evaluate records and process
circuits.
Contract vendors for current equipment availability and prices to place mill in
operational status.
Evaluate holding costs so as to maintain most efficient use of funds.
Holding costs are taken from Kennecott 1997 budget.
Review current Kennecott contractors projects and costs.
24
EXHIBIT 10.52
GREEN MOUNTAIN MINING VENTURE
SWEETWATER MILL
EVALUATION OF MILL
OBJECTIVE AND ACTIVITIES
Objective:
Evaluate mill components and circuits so as to prepare detailed work plan.
Activities:
Review and expedite preparation of NRC License amendments and other permits and
licenses required to place mill into operational status.
Review milling records and process circuits.
Maintain current status of all permits and licenses while preparing to transfer
operator.
Prepare detailed plan for treating resin from the mine water treatment plant at
the Sweetwater Mill, by September 30, 1997.
Prepare a detailed work for Phase II of the Work, which plan will focus on
placing the Sweetwater Mill on operational status. This work plan will cover
activities after September 30,1997, and will focus on licensing and permitting
and preparation of the mill tailing cells, evaporation ponds, treatment of
resins, and old tailing facility for startup and continuation of current
activities.
No construction or reclamation activities shall be conducted unless:
1. A detailed work plan for Phase II of the Work is prepared and
approved pursuant and a program for its implementation is approved and
pursuant to the Agreement.
2. The work to be undertaken under the Mineral Lease Agreement is
interrupted by an event of force majeure as such term is defined in
Section 12 of the Mineral Lease Agreement; such construction or
reclamation activities is commenced during the existence of such an
event of force majeure, and the nature and scope of the work undertaken
can reasonably be expected to be accomplished during the time period
for which it appears that the condition of force majeure will continue.
After the event of force majeure ceases to exist, Contractor shall
complete the particular work commenced hereunder before resuming work
under the Mineral Lease Agreement, but shall not perform any other
construction or reclamation activities hereunder; and
3. Contractor or Owner has first obtained all governmental or other
permits and licenses needed in connection with performance of such
work.
25
EXHIBIT 10.52
Green Mountain Mining Venture
Jackpot
Project Schedules
1997 & 1998
This portion of Appendix A to Contract Services Agreement is not filed with this
Form 10-K for the year ended May 31, 1997.
26
EXHIBIT 10.52
Appendix B
to
Contract Services Agreement
Operating Permits and Bonds
Permits Agency
------- ------
1. Source Material License SUA-1350 NRC
2. Byproduct License No. 49-19005-01 NRC
3. Permit to Mine No. 481 DEQ, LQD
4. Drilling Notification DN-267 DEQ, LQD
5. Radio Station License No. WNRC873 FCC
6. NPDES Permit No. WY-0026689 DEQ, WQD
7. Generator ID No. WYO80372154086F EPA
8. Permit to Construct No. 86-198R DEQ, WQD
9. DOT License No. USDOT 545666 U.S. DOT
10. Large Scale License No. 1030 Wyoming Department of Agriculture
Bonds Amount Agency
----- ------ ------
1. Third Party Corporation Guarantee $5,321,000 NRC
2. Irrevocable Letter of Credit No.S-867737 $19,777,079 DEQ
27
EXHIBIT 10.52
APPENDIX C: Required Insurance
During the term of this Agreement and all times during performance, and
until completion of the Work, Contractor shall maintain in force the
following insurance for its personnel on site with companies
satisfactory to Owner:
a. Worker's Compensation and Occupational Disease insurance
in compliance with all state and federal regulations in
the jurisdiction where the work and services are to be
performed with the statutory limit required. Contractor
shall require each consultant and subcontractor to carry
Worker's Compensation and Employer's Liability insurance.
b. Commercial General Liability insurance covering all
operations of Contractor in the performance of work,
including contractual liability insurance covering the
liability assumed in this Contract. Said insurance policy
or policies shall provide $2,000,000 combined single
limits for all injuries or death to persons and damages to
property per occurrence.
c. Comprehensive Automobile Liability insurance including all
owned, non owned, and hired vehicles, with the following
limits:
Bodily Injury $1,000,000 each person
$1,000,000 each occurrence
Property Damage $1,000,000 each occurrence
d. All policies of insurance carried by Contractor pursuant
to this Section shall provide that they may not be
canceled or the protection afforded thereby substantially
changed without 30 days prior written notice to Owner.
Upon request, Contractor shall permit Owner to examine any
of the insurance policies specified herein.
e. All policies of insurance carried by Contractor pursuant
to this Section shall be endorsed to include Kennecott
Uranium Company and all subsidiary, associated, and
affiliated companies, as additional insured.
f. All policies of insurance carried by Contractor pursuant
to this Section shall contain endorsements stating that
Contractor's coverage is primary to any coverage Owner may
elect to carry for its own account, or for Contractor.
g. Any and all deductibles specified in the above described
Contractor insurance policies shall be assumed by, for the
account of, and at the sole risk of Contractor.
28
EXHIBIT 10.52
h. All insurances carried by Contractor pursuant to this
Section shall contain endorsements waiving the insurer's
right to subrogation against Owner, its subsidiaries,
agents, and affiliated companies, and their employees,
officers, and directors.
29
EXHIBIT 10.52
Appendix D
to
Contract Services Agreement
Reimbursable Cost
This Appendix D is not being filed with this Form 10-K for the year ended May
31, 1997.
30