EXHIBIT 10.58
OUT SOURCING & LEASE AGREEMENT
This Agreement is entered into between Yellow Stone Fuels, Inc., (YFI) and US
Energy Corp. and Crested Corp. d/b/a USECC, consistent with the Ratification of
Understanding executed by the parties on December 1, 1996. This Agreement sets
forth the terms, conditions, responsibilities and consideration for specific out
sourcing arrangements, cost sharing, and service exchanges.
RECITALS
WHEREAS, YFI and USECC have entered into a Ratification Of Understanding
wherein USECC, for valuable consideration, including the opportunity to obtain
equity interest in YFI for minimal contribution and for other future business
opportunities through YFI, and;
WHEREAS, USECC desires in consideration of the benefits set forth in the
Ratification of Understanding has agreed to enter into specific out service
arrangements with YFI by providing access to various company managerial services
and expertise, and YFI desires to have access to and pay for the costs of such
services, and;
WHEREAS, USECC desires to lease to YFI office space, furnishings and
general office equipment and YFI desires to lease from USECC certain office
space, furnishings and office equipment and compensate USECC for the same, and;
WHEREAS, USECC desires to make available to YFI certain employees to
perform various accounting, insurance, payroll, secretarial services and other
consulting work, and YFI desires to make available to USECC its employees to
perform certain consulting work, and other expertise, and each party desires to
reimburse the other at a reasonable hourly rate for the costs associated with
any exchange, consulting, services or employee work, and;
WHEREAS, each party believes it will benefit from such reciprocal
exchanges, out sourcing, consultation and reasonable compensation;
NOW, THEREFORE, YFI and USECC, for the mutual benefits and consideration
set forth herein and in the Ratification of Understanding, hereby agrees as
follows:
I. ACCOUNTING
1.1 USECC shall, consistent with its own practices, maintain for YFI detailed
and comprehensive accounting records, all in accordance with generally accepted
accounting practices.
1.2 USECC shall provide the following services and submit an accounting of the
same consistent with the procedures set forth below:
EXHIBIT 10.58
a. Assume responsibility to maintain all records for payroll for YFI and
make payroll on behalf of YFI employees consistent with and as directed by YFI,
from time to time and consistent with USECC's current practice for its own
employees.
b. Perform all necessary bookkeeping, as directed by YFI and consistent
with USECC's methods, and generally accepted bookkeeping practices.
c. Take all necessary steps to admit any YFI employees so requested to
USECC's health insurance plan and thereafter administer all health insurance
related functions consistent with such program and to accurately record and
document all labor and costs associated with the same for reimbursement by YFI.
d. Provide all necessary secretarial services, data processing, and
expertise necessary to complete all such accounting services and keep accurate
records of all time and costs consumed by such duties.
e. Charge YFI a reasonable fee (not to exceed 10% over actual costs) for
all services performed by USECC employees consistent with this agreement, and
for any and all work required and assigned to them by YFI and maintain a
comprehensive accounting of the same
1.3 YFI shall reimburse USECC for all actual costs relating to all
services and other work performed by USECC employees plus an additional overage
amount to be negotiated by the parties, but not to exceed 10% of the actual
costs. Payment of such charges shall be from time to time, as agreed to by the
parties but, in any event, no less than on a quarterly basis.
1.4 USECC shall prepare and present, on a monthly basis, a full
accounting of all costs associated with the services performed by its employees
for YFI along with similar accounting for services and consulting performed by
YFI employees for USECC.
II. PERSONNEL
2.1 USECC agrees it shall register and otherwise provide coverage for
all YFI employees designated by YFI within the health insurance policies
maintained by USECC.
2.2 USECC shall administer all aspects of the health insurance program
for all YFI employees covered by its policies.
2.3 USECC shall maintain all general personnel records, employee files,
and other related documentation as directed by YFI from time to time.
2.4 YFI shall reimburse USECC for all costs associated with the services
provided pursuant to this section, at a rate not to exceed USECC actual costs
for the same.
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EXHIBIT 10.58
III. LEASE
3.1 USECC agrees to lease to YFI approximately 1,000 sq. ft. of office
space located at its headquarters at Riverton, Wyoming..
3.2 USECC agrees to provide furnishings, office equipment, telephones
and telephone services, general secretarial services, janitorial services, and
other office related matters.
3.3 YFI shall pay USECC a lease payment of $800.00 per month for the
office space and furnishings, and $200.00 per month for all costs associated
with telephone services, janitorial work, and office overhead.
3.4 Such lease arrangements shall be modified from time to time as
agreed to by the parties.
IV. TERM
4.1 This Out Sourcing Agreement shall remain in effect for 3 years from the date
set out below, and thereafter continue from year to year until otherwise
terminated by the parties. After 1 year, each party may terminate this agreement
upon 90 days written notice to the other party.
4.2 Upon termination, a full accounting shall be made and the indebted party
shall have 90 days to balance all outstanding amounts due.
V. RESPONSIBILITIES
5.1 Each party shall use good faith efforts to perform the tasks and obligations
set forth in this Agreement, including taking all necessary steps to make
personnel available in a timely fashion to assist the other party as such needs
arise in the daily operation of the respective businesses, and shall in no way
interfere with or impair the ability of the other party to conduct its business
affairs.
5.2 Neither party or its employees shall disclose information about the business
or business practices of the other without the express written consent of the
other. Each party shall take all reasonable steps to insure the confidentiality
the respective business practices of the other party.
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EXHIBIT 10.58
Dated December 1, 1996.
YELLOW STONE FUELS, INC.
/s/ XXXX XXXXXX
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By: Xxxx Xxxxxx,
President
U.S. ENERGY CORP. CRESTED CORP.
/s/ XXXX X. XXXXXX /s/ XXX X. XXXXX
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By: Xxxx X. Xxxxxx, By: Xxx X. Xxxxx,
President President
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