Exhibit 10.19
Second Kingsville Dome and Xxxxxx Xxxxx Agreement
This Agreement is entered into by the Texas Natural Resource Conservation
Commission ("TNRCC"), the Texas Department of Health ("TDH"), URI, Inc. ("URI")
and the United States Fidelity & Guaranty Company ("USF&G") on January 1, 2002
and shall run until April 30, 2002.
Recitals
A. URI is the owner and operator of the Kingsville Dome and Xxxxxx Xxxxx
located in Kleberg and Xxxxx Counties, Texas, respectively.
B. The following are the outstanding Bonds issued by USF&G on behalf of the
Kingsville Dome and Xxxxxx Xxxxx to provide assurance that funds will be
available when needed for groundwater restoration, decommissioning, and, if
applicable, for the long term care of the facility. By this Agreement, the
Agencies agree that they cannot enforce in excess of the amounts set forth below
against USF&G:
On June 23, 2000, USF&G issued to TDH on behalf of the Kingsville Dome Mine
the Surety Bond Rider to Performance Guarantee Bond (Bond No.41-0130-40028-96-6)
that has been in effect since December 2, 1996, in the penal sum of One Million
Seven Hundred Forty One Thousand Five Hundred Forty Two Dollars ($1,741,542.00).
The agencies acknowledge their continued obligations under the prior Kingsville
Dome and Xxxxxx Xxxxx Agreement with respect to the reduction of bond amounts
for the final quarter of the prior Agreement.
On June 23, 2000, USF&G issued to TDH on behalf of the Xxxxxx Mine the
Surety Bond Rider to Performance Guarantee Bond (Bond No. 41-0130-40040-96-6)
that has been in effect since November 26, 1996, in the penal sum of One Million
Nine Hundred Nine Thousand Six Hundred Forty Three Dollars ($1,909,643.00). The
agencies acknowledge their continued obligations under the prior Kingsville Dome
and Xxxxxx Xxxxx Agreement with respect to the reduction of bond amounts for the
final quarter of the prior Agreement.
C. URI, to induce USF&G, as Surety, to execute the Bonds on behalf of URI,
executed and delivered a Master Surety Agreement for the benefit of Surety,
dated November 25, 1996, pursuant to which URI, agreed to exonerate, hold
harmless, indemnify and keep indemnified USF&G from and against any and all
demands, claims, liabilities, losses and expenses of whatsoever kind or nature
(including but not limited to, interest, court costs and counsel fees) imposed
upon, sustained, or incurred by USF&G by reason of: (1) USF&G having executed,
provided or procured Bonds in behalf of URI, Inc., or (2) URI, Inc.'s failure to
perform or comply with any of the provisions of the Master Surety Agreement. By
this document, URI, Inc. reaffirms its indemnity obligations under the Master
Surety Agreement.
D. This Agreement is entered by USF&G and the Agencies at the request of URI,
which has acknowledged that it is financially unable to meet its obligations to
continue groundwater restoration of the Kingsville Dome and Xxxxxx Xxxxx without
this Agreement. This Agreement does not replace or supersede any licenses,
permits, or regulatory requirements already in place. It is not intended that
the terms of this Agreement affect or change the responsibilities of TDH and
TNRCC as set forth in the Memorandum of Understanding between the agencies found
at 25 TAC Sec. 289.101(f).
E. USF&G may have certain defenses to claims made under the Bonds, and it
expressly reserves any and all defenses it may have or hereinafter acquire.
F. The purpose of this Agreement is, variously, to (1) protect the public
health and environment by facilitating the implementation and continuation of
groundwater restoration of the Mines; (2) provide a mechanism for USF&G to
receive an equivalent reduction in the penal sum of its liability under the
Bonds in consideration of USF&G's funding of groundwater restoration costs of
the Mines.
Page 1 of Exhibit 10.19
Now, therefore, the parties agree as follows:
1. Incorporation. The above Recitals are hereby incorporated into this
Agreement.
2. Definitions. The following terms shall have the meanings defined below:
1.1 "Agencies" means collectively TNRCC and TDH.
1.2 "Bonds" means the Bonds described in Recital B.
1.3 "Restoration Costs" means any reasonable costs directly associated
with or necessary for groundwater restoration activities at the Mines.
Costs that would not be allowed for bond reduction include, but are not
limited to: salaries of personnel for time not directly relating to
groundwater restoration at the Kingsville Dome and Xxxxxx xxxxx; travel to
or activities regarding other URI sites; general and administrative costs;
bond premiums, property taxes, byproduct disposal costs, license fees,
insurance and other holding costs; legal costs; costs of contesting TNRCC
or TDH actions; and/or costs for the resumption of production operations.
1.4 "Effective Date" means the date on which this Agreement has been
executed by all of the parties.
1.5 "Mines" means the Kingsville Dome Mine and the Xxxxxx Mine.
1.6 "Surety" means United States Fidelity & Guaranty Company.
1.7 "TDH" means the Texas Department of Health.
1.8 "TNRCC" means the Texas Natural Resource Conservation Commission.
1.9 "URI" means URI, Inc.
1.10 "USF&G" means the United States Fidelity & Guaranty Company.
3. Funding of Operations. USF&G agrees, subject to the provisions contained
herein, to fund reasonable restoration costs at the Kingsville Dome Mine and
Xxxxxx Mine as enumerated in Appendix A attached to and by this reference
incorporated in this Agreement. In the event that URI is able to secure funds
outside of USF&G, other than funds provided by URI's investor group that are
specifically designated for general and administrative costs, other holding
costs and/or for the resumption of production operations, URI will notify the
TDH and TNRCC for a determination if these funds should be used to substitute or
supplement funding by USF&G. In the event URI secures investor group funding
during the term of this Agreement, URI shall provide the TDH and the TNRCC with
a summary of the expenditures made from such investor group funding.
4. Period of Funding/Term of Agreement. This Agreement shall remain in force
and effect from its effective date until April 30, 2002. In the event URI fails
to meet the performance Criteria set forth in Appendix B for a specific month
and such Performance Criteria are not waived by the Agencies, the Agencies may
terminate the Agreement with 10 days notice to URI. If the Agencies terminate
the Agreement they shall notify USF&G of such action. This notification shall
occur within 24 hours upon termination of the Agreement, and will be effective
upon receipt by USF&G.
5. Force Majeure. URI shall not be deemed as failing to meet the Performance
Criteria for a specific month due to any Act of God, war, strike, riot,
electrical outage, accident, fire, explosion, flood, blockade, or other
catastrophe hereafter "force majeure," beyond URI's reasonable-control. In the
event of such force majeure, URI shall notify the Agencies of the event within
24 hours. Should such force majeure prevent or
Page 2 of Exhibit 10.19
reduce groundwater restoration activities for the subsequent month, then the
Agencies may terminate the Agreement with 10 days notice to URI.
6. Record Keeping. URI shall include a summary of all reasonable restoration
costs incurred during a month in the monthly performance reports to the
Agencies. URI will maintain complete records of reasonable expenditures made
during the term of this Agreement and will make those records available upon
request from the Agencies for auditing purposes.
URI shall maintain and make available to the Agencies upon request, records
of its groundwater restoration activities at the Mines. These records shall
include: 1) accurate and legible maps of well fields and well locations; and 2)
accurate and up to date well completion and maintenance information.
7. Capital Allowance. USF&G agrees, subject to the provisions contained
herein, to fund $45,000 as reasonable restoration costs, for additional reverse
osmosis water treatment equipment to be installed on the remote ion exchange
equipment located in Production Area 3 at the Kingsville Dome location ("PAA3")
as enumerated in Appendix A attached to and by this reference incorporated in
this Agreement. Once functional, this equipment shall be used to conduct
restoration in PAA3 over the term of this Agreement. PAA3 restoration shall be
concurrent with the restoration operations at the remainder of the Kingsville
Dome mine. The restoration operation cost of PAA3 equipment shall be included in
the amounts enumerated in Appendix A and shall only be allowed in any month if
the Reverse Osmosis unit at PAA3 is operational in that month.
8. Security and Electricity Advance Payment. URI shall make a payment to the
Texas Department of Health Bureau of Radiation Control in the amount of $37,500
to provide for site security and electrical power requirements for three months
of groundwater restoration operations in the event that groundwater restoration
operations cease at the mines before groundwater restoration is completed. This
advance payment shall be made by URI within 10 days of receipt from USF&G. This
advanced security and electrical payment shall be included in the amounts
enumerated in Appendix A and be subject to appropriate bond reduction for each
location. URI stipulates that this advance payment is not, and shall not be,
assets of URI, Inc.'s bankruptcy estate.
9. Progress Reports, Bond Reduction and Future Payments to URI, Inc. On
January 31, 2002 and each month thereafter as set forth in Appendix C, TDH will
provide USF&G with a written bond reduction notice ("bond reduction notice") in
the format attached hereto as Appendix D. It is agreed by TDH that it will issue
the bond notice reduction within 10 working days following the end of the month
contingent upon receiving USF&G's certification of monthly advances to URI. The
failure to do so shall constitute a material breach of this Agreement for which
USF&G would thereafter have no further obligation to provide any further funding
pursuant to this Agreement
The bond reduction notice will reduce the penal amount of the bonds on a
dollar for dollar basis for restoration costs paid during the previous period.
Penal sum reductions will be allocated to the appropriate bonds for the
appropriate projects. Under no circumstance will the bond reduction for a
preceding month exceed the reasonable restoration cost projections in Appendix
A. URI shall provide a monthly groundwater restoration progress report in
accordance with Appendix B, to the Agencies for each month no later than the
10th working day of the following month. The TDH shall notify URI and USF&G of
the appropriate monthly bond adjustment. Failure to perform on the part of URI
shall mean the failure to operate within agreed upon reasonable restoration cost
projections within Appendix A or the failure to meet the Performance Criteria in
Appendix B. If the Agencies, with good cause, disapprove URI's performance, or
reasonable restoration costs, the TDH may adjust the next month's bond reduction
amount. At the conclusion of the last month, the Agencies shall not reduce the
bond amount until they have completed the performance and financial reviews of
the last month's data.
10. Reconciliation of Expenses. Upon receipt of a monthly performance or
progress report, the Agencies may review all costs and expenditures. The
Agencies may require additional information from URI regarding expenses. No
expenses in excess of those detailed in Appendix A shall be eligible for
Page 3 of Exhibit 10.19
reimbursement under this Agreement unless they have been authorized in advance,
in writing, for a specific amount, by the TNRCC prior to the expenditure being
made by URI. Upon the advance approval in writing of such costs by TNRCC, such
costs will be eligible for inclusion of funding to URI by USF&G. If approval is
not obtained such costs are not eligible for inclusion of funding to URI by
USF&G. Upon funding by USF&G such costs would be treated comparably to all other
costs shown on Appendix A regarding their eligibility for bond reductions by
USF&G.
11. Periodic Reporting by USF&G. Contemporaneously with funding, USF&G will
provide to TNRCC and TDH a certification of monthly advances under this
Agreement to URI by the end of each month.
12. Surety Not an Owner or Operator. USF&G shall not be an "owner" or
"operator" of the Mines by virtue of execution and delivery of and performance
of its obligations under this Agreement. The parties' execution and delivery of
this Agreement is not intended to make USF&G an "owner" or "operator." USF&G's
role as Surety will not in any way make it responsible for any operation of the
Mines, nor will it own any part of the Mines.
12.a. Agencies not an Owner or Operator. TNRCC or TDH shall not be an " owner"
or "operator" of the Mines by virtue of execution and delivery of and
performance of their obligations under this Agreement. The parties' execution
and delivery of this Agreement is not intended to make TNRCC or TDH an "owner"
or "operator." TNRCC's or TDH's role in approving bond reductions will not in
any way make it responsible for any operation. of the Mines, nor will it own any
part of the Mines.
13. Reservation of Defenses. USF&G's execution, delivery and performance under
this Agreement shall not constitute, nor be deemed to constitute, an admission
of liability or a waiver of any claims or defenses which USF&G may assert or
have against URI, Inc., any indemnitors, or against claims made against USF&G
under the Bond. The Agencies' execution, delivery or performance under this
Agreement shall not constitute, nor be deemed to constitute, an admission of
liability or waiver of any claims or defenses which the Agencies may assert or
have against URI, Inc. relative to the Kingsville Dome and/or Xxxxxx Xxxxx, or
USF&G.
14. Bankruptcy of URI.
14.1 It is the express desire, intent, and agreement of the parties
(TNRCC/TDH, URI and USF&G) that in the event URI shall become a Debtor in
a bankruptcy proceeding (by virtue of either the commencement of a
voluntary or an involuntary petition) the rights of TNRCC/TDH and USF&G
shall remain as unaffected as possible with respect to their mutual
obligations under these Bonds. Accordingly, as a material element of this
Agreement, the parties expressly agree and covenant as follows:
14.2. URI will enter into a Stipulation satisfactory to TNRCC/TDH and
USF&G setting forth sufficient facts to demonstrate its acknowledgment
that the parties would not have entered into this Agreement absent such
stipulation. The Stipulation shall further recite that, should URI become
a Debtor in a Chapter 11 bankruptcy proceeding, it shall elect at the
earliest of (1) sixty (60) days from the Petition date or (2) thirty (30)
days from the entry of the Order for Relief in the instance where an
involuntary petition is commenced to assume or reject this Agreement as an
executory contract.
14.3 URI and USF&G further agree that they shall take no action directly
or indirectly to prevent the Bankruptcy Court from ordering URI to make
such an accelerated election regarding assumption or rejection of this
Agreement in accordance with the time frame set forth above in paragraph
14.2.
14.4. In the event URI elects to assume this executory contract, URI shall
cure any pending defaults within 30 days of the date it makes said
election to assume (irrespective of the date of the
Page 4 of Exhibit 10.19
entry of the Order approving assumption). In the event the Bonds are
called, USF&G shall be entitled to a full credit against the face amount of
the Bonds for any partial payments distributed previously to URI in
accordance with this Agreement.
14.5. In the event URI elects to reject this executory contract, the
parties agree that each will have whatever rights and obligations they have
under this Agreement, the Bonds, and applicable law.
14.6. All parties further acknowledge that the obligation of USF&G under
these Bonds constitutes an independent obligation of USF&G as a surety in
favor of TNRCC/TDH. URI further covenants that in its legal opinion, should
URI become a debtor in a bankruptcy proceeding, that these Bonds constitute
independent obligations of USF&G and would not constitute assets of URI's
bankruptcy estate. URI further covenants that it shall take no action
either directly or indirectly to controvert any position taken in the
Bankruptcy Court by TNRCC/TDH that these Bonds are not property of URI's
bankruptcy estate.
14.7. URI and USF&G acknowledge that there have been extensive
confidential settlement communications, privileged under Federal Rule of
Evidence 408, leading up to the execution of this Agreement. URI, USF&G,
and TNRCC/TDH further covenant that they shall never seek to introduce
evidence of any prior negotiations that led up to this Agreement (by way of
example but not by limitation, introduction of previous drafts of this
settlement agreement as parole evidence).
14.8 In the event of the bankruptcy of URI, the parties to this Agreement
stipulate that the groundwater restoration equipment located at the
Kingsville Dome and Xxxxxx xxxxx may continue to be used for groundwater
restoration activities until the groundwater restoration is completed.
15. Notices. Any notices required or authorized to be given by this Agreement
shall be in written form. Any notices required or authorized to be given by this
Agreement must be sent by: (a) registered or certified delivery mail, postage
prepaid and return receipt requested, addressed to the proper party at the
following address or such address as the party shall have designated to the
other parties in accordance with this Section; or (b) personal delivery. Mailed
notice shall be effective on the third (3rd) day following the date of mailing.
Personal delivery shall be effective on the date of receipt. Notices shall be
mailed to the following:
Xx. Xxxxxxx X. Xxxxxx
Executive Director
Texas Natural Resource Conservation Commission
XX Xxx 00000
Xxxxxx, XX 00000-0000
Xx. Xxxxxxx Xxxxxxx, P.E.
Texas Department of Health
Chief Bureau of Radiation Control
0000 Xxxx 00xx Xxxxxx
Xxxxxx, XX 00000
Xxxxxx Xxxxxx Fidelity & Guaranty Company
c/o St. Xxxx Surety-Claim (MC41)
Xxxxxxx X. Xxxxxxxxxxx, Esquire
0000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Page 5 of Exhibit 10.19
Xxxx X. Xxxxxxx
URI, Inc.
000 X. Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000
Xxxxxx X. Xxxxxxxxx-Corporate Counsel
C/o Baker & Xxxxxxxxx
000 X. 00xx Xxx., Xxx. 0000
Xxxxxx, Xxxxxxxx 00000-0000
and copy to: X. Xxxxxx Xxxxxxx
Xxxxx XxXxxxxxx, L.L.P.
000 Xxxxxxxx Xxx., Xxx. 0000
Xxxxxx, Xxxxx 00000-0000
16. Binding Effect of Obligations. This Agreement shall be binding upon and
inure to the benefit of the respective parties and their successors and assigns.
17. Whole Agreement. There are no terms or conditions of this Agreement,
express or implied, other than expressly stated in this Agreement. This
Agreement may be amended or modified only by an instrument in writing, signed by
the parties with the same formality as this Agreement. This Agreement shall not
be construed or interpreted to be for the benefit of any third party, and no
third party shall have the right to enforce this Agreement without the consent
of all of the parties.
18. Multiple Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute the same Agreement. Delivery of an executed copy of this
Agreement via facsimile or other electronic transmission shall be deemed
effective delivery.
19. Severability. If any part, term or provision of this Agreement is held by a
court of competent jurisdiction to be illegal or in conflict with any law of the
United States or the State of Texas, the validity of the remaining portions or
provisions shall not be affected, and the rights and obligations of the parties
shall be construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be invalid.
20. Governing Law. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the United States and the State of Texas to the
extent that such laws do not conflict with the laws of the United States.
Nothing in this Agreement shall relieve URI of its obligations under the rules
and regulations of TNRCC or TDH or from the requirements of TNRCC Permits
UR02827, XXX 000, XX00000, XXX 000, xx XXX License L03653.
21. Dates. Any date that falls on a weekend or a State of Texas holiday shall
mean the next regular State of Texas business day following that date.
The parties have executed this Agreement effective as of January 1, 2002.
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxx Xxxxxxx
------------------------------------------------ ----------------------------
Xxxxxxx X. Xxxxxx, P.E., Executive Director Xxxxxxx Xxxxxxx, P.E., Chief
Texas Natural Resource Conservation Commission Bureau of Radiation Control
Texas Department of Health
Page 6 of Exhibit 10.19
/s/ Xxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxxxxxxxx
------------------------------------- ---------------------------------------
Xxxx X. Xxxxxxxx, President and Xxxxxxx X. Xxxxxxxxxxx, Surety Attorney
Chief Executive Officer, URI, Inc. United States Fidelity and Guaranty
Page 7 of Exhibit 10.19
APPENDIX A
Restoration Expenditures
January 1, 2002 to April 30, 2002
-----------------------------------------------------------------
Jan-02 Feb-02 Mar-02 Apr-02 2002 TOTAL
-----------------------------------------------------------------
Kingsville Dome Direct Restoration $ 61,511 $ 61,511 $ 61,511 $ 61,511 $246,044
PAA3 R.O. operating costs (not to be allowed $ 5,000 $ 5,000 $ 5,000 $ 15,000
if R.O. unit not operational in month)
KVD PAA3 Capital 30,000 15,000 $ 45,000
Allotment for Power & Security 18,750 $ 18,750
Accounting and Environmental Salaries 2,810 2,810 2,810 2,810 $ 11,240
Engineering Salaries 2,900 2,900 2,900 2,900 $ 11,600
Allocated Salaries (7,552) (7,552) (7,552) (7,552) ($30,208)
------------------------------------------------------------------------------------------------------------------
Subtotal Kingsville 108,419 79,669 64,669 64,669 $317,426
==================================================
Cumulative KVD 2002 $108,419 $188,088 $252,757 $317,426
==================================================
Xxxxxx Direct Restoration 47,591 47,591 47,591 47,591 190,364
Xxxxxx Restoration Capital
Allotment for Power & Security 18,750 18,750
Accounting and Environmental Salaries 2,810 2,810 2,810 2,810 11,240
Engineering Salaries 5,800 5,800 5,800 5,800 23,200
Allocated Salaries 7,552 7,552 7,552 7,552 30,208
------------------------------------------------------------------------------------------------------------------
Subtotal Rosita 82,503 63,753 63,753 63,753 273,762
Cumulative Xxxxxx $ 82,503 $146,256 $210,009 $273,762
==================================================
------------------------------------------------------------------------------------------------------------------
Cumulative Expenditures $190,922 $334,344 $462,766 $591,188 $591,188
------------------------------------------------------------------------------------------------------------------
Page 8 of Exhibit 10.19
Appendix B (cont.)
Performance Criteria
Appendix B
Performance Criteria
B-1. Kingsville Dome Mine
.. QUANTITY PERFORMANCE. Prior to April 1, 2002, URI shall perform at a rate
--------------------
of at least 80% of the instantaneous design rate for the installed
equipment at Kingsville Dome based on the calculations outlined below. The
rate at which water is treated is calculated by adding the waste disposal
well flow to the RO feed flow and subtracting the RO brine:
WDW 248 maximum average permitted flow: 200 gal/min
RO feed rate design maximum: 585 gal/min
Less RO brine contribution to WDW 248 flow: 146 gal/min
[WDW max + RO max - brine amount =maximum water treated: 639 gal/min]
(639 gal/min x 1440 min/day x 30 days/mth) x 0.80 =
22.1 million gallons per month)
Starting April 1, 2002, URI shall perform at a rate of at least 80% of the
instantaneous design rate for the installed equipment at Kingsville Dome
based on the calculations outlined below.
WDW 248 maximum average permitted flow: 200 gal/min
RO feed rate, design maximum: 785 gal/min
Less RO brine contribution to WDW 248 flow: 196 gal/min
[WDW max + RO max - brine amount -- maximum water treated: 789 gal/min]
(789 gal/min x 1440 min/day x 30 days/mth) x 0.80 =
27.3 million gallons per month)
.. QUALITY PERFORMANCE. Quality performance shall be assessed on a PAA by PAA
-------------------
basis using groundwater analysis to gauge restoration progress. To allow
the state staffs to evaluate restoration progress in terms of improvements
in water quality, URI shall do the following:
Collect water quality data at least once every two weeks from each
extractor well in the areas currently under active restoration; data
shall at a minimum include Conductivity, (or TDS), uranium (as
U\\3\\O\\8\\), Ca, pH, and SO\\4\\.
At least one time during the term of this Agreement, collect water
quality data as described above from all production area baseline
xxxxx in areas previously considered restored. In addition, other
xxxxx, as selected by the Commission, shall be sampled for Radium-226.
Submit water quality sampling data in both tabular and graphic form to
facilitate comparison to past restoration progress reports,
Submit restoration water quality progress reports monthly.
Determination of final restoration shall be done in accordance with
standard state procedures, as found in 30 TAC 331.107. Before final
restoration is confirmed, URI shall obtain stability samples from all
production area baseline xxxxx and analyze for those parameters listed in
the restoration table
B-2. Xxxxxx Mine
.. QUANTITY PERFORMANCE. URI shall perform at a rate of at least 80% of the
--------------------
instantaneous design rate for the installed equipment at Xxxxxx. The rate
at which water is treated is calculated by adding the waste disposal well
flow to the RO feed flow and subtracting the RO brine:
WDW 250 maximum average capacity: 150 gal/min
RO feed rate, design maximum: 585 gal/min
Less RO brine contribution to WDW 250 flow: 146 gal/min
[WDW max + RO max - brine amount = maximum water treated : 589 gal/min]
Page 9 of Exhibit 10.19
Appendix B (cont.)
Performance Criteria
Therefore, the calculated minimum rate per month is:
Page 10 of Exhibit 10.19
Appendix B (cont.)
Performance Criteria
(589 gal/min x 1440 min/day x 30 days/mth) x 0.80 =
20.4 million gallons per month)
.. QUALITY PERFORMANCE. Quality performance shall be measured on a PAA by PAA
-------------------
basis using groundwater analysis to gauge restoration progress. To allow
the state staffs to evaluate restoration progress in terms of improvements
in water quality, URI shall do the following:
Collect water quality data at least once every two weeks from each
extractor well in the areas currently under active restoration data
shall at a minimum include Conductivity, (or TDS), uranium (as
U\\3\\O\\8\\) Ca, pH, and SO\\4\\.
At least one time during the term of this Agreement, collect water
quality data as described above from all production area baseline
xxxxx in areas previously considered restored. In addition, other
xxxxx, as selected by the Commission, shall be sampled for Radium-226.
Submit water quality sampling data in both tabular and graphic form to
facilitate comparison to past restoration progress reports.
Submit restoration water quality progress reports monthly.
Determination of final restoration shall be done in accordance with
standard state procedures, as found in 30 TAC 331.107. Before final
restoration is confirmed, URI shall obtain stability samples from all
production area baseline xxxxx and analyze for those parameters listed in
the restoration table.
Page 11 of Exhibit 10.19
Appendix C
Reimbursement and Bond Reduction Schedule
For Groundwater Restoration Activities
URI Expenditures URI Reimbursement Bond Penal
Incurred By USF&G Date Reduction Date
-------- ------------- --------------
01/01/02-01/31/02 12/31/01 02/14/02
02/01/02-02/28/02 01/31/02 03/14/02
03/01/02-03/31/02 02/28/02 04/12/02
04/01/02-04/31/02 03/31/02 After final review
Page 12 of Exhibit 10.19
Appendix D
Texas Department of Health
Xxxxxxx X Xxxxxx III, M.D. 0000 Xxxx 00xx Xxxxxx Xxxxxxx X. Xxxx, XX.
Commissioner Xxxxxx, Xxxxx 00000-0000 Executive Deputy Commissioner
(000) 000-0000
Bureau of Radiation Control
(000) 000-0000
Date
United States Fidelity & Guaranty Company
c/o St. Xxxx Surety-Claim (MC41)
Xxxxxxx X. Xxxxxxxxxxx, Esquire
0000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
CERTIFIED MAIL: _____________
Re: Uranium Resources, Inc. (TDH License L03653)
Reduction of Financial Security Bonds:
Performance Guarantee Bond No. 41-0130-40028-96-6
Performance Guarantee Bond No. 41-0130-40040-96-6
Dear Sirs:
The Texas Department of Health hereby authorizes the reduction of financial
security bonds issued by USF&G on behalf of Uranium Resources, Inc. (URI) and
held by the Texas Department of Health for groundwater restoration and
decommissioning of the Kingsville Dome and Xxxxxx xxxxx by the following:
1) Reduce Performance Guarantee Bond (Bond No. 41-0130-40028-96-6 for the
Kingsville Dome site) that has been in effect since December 2, 1996, in the
current penal sum of One Million Seven Hundred Forty-One Thousand Five
Hundred Forty-Two Dollars ($1,741,542.00) by XYZ Dollars and XYZ Cents
($XXXXXXXXXX) to the reduced penal sum of xxxxxxxxxxxxxxxxxx Dollars and XYZ
Cents ($XXXXXXXXXX); and
2) Reduce Performance Guarantee Bond (Bond No. 41-0130-40040-96-6 for the Xxxxxx
site) that has been in effect since November 26, 1996, in the current penal
sum of One Million Nine Hundred Nine Thousand Six Hundred Forty-Three Dollars
($1,909,643.00) by XYZ Dollars and XYZ Cents ($XXXXXXXX) to the reduced penal
sum of xxxxxxxxxxxxxxxxx Dollars and XYZ Cents ($XXXXXXXX).
Page 13 of Exhibit 10.19
United States Fidelity & Guaranty Company
c/o St. Xxxx Surety-Claim (MC41)
Xxxxxxx X. Xxxxxxxxxxx, Esquire
Date
Page Two
The approved bond reductions are based on USF&G's certification of the amounts
advanced to URI for groundwater restoration and decommissioning work performed
by URI at the Kingsville Dome and Xxxxxx xxxxx under the Second Kingsville Dome
and Xxxxxx Xxxxx Agreement dated xxxxxx. The TDH issues these bond reductions
with the understanding that TDH and USF&G make no representations, express or
implied, as to the restoration work performed by URI, and that these bond
reductions are final as of this date for all purposes.
Sincerely,
Xxxxxxx X. Xxxxxxx, P.E., Chief
Bureau of Radiation Control
cc: Xxxx Xxxxxx, TNRCC
Xxxxxx Xxxxxxx
Xxxx Xxxxxxx, URI
Xxx Xxxxxx, TDH
Page 14 of Exhibit 10.19
STIPULATION OF URI, INC., THE TEXAS DEPARTMENT
OF HEALTH, AND THE TEXAS NATURAL RESOURCE CONSERVATION
COMMISSION REGARDING CERTAIN FACTS
URI, Inc., ("URI"); the Texas Department of Health, ("TDH"); and the Texas
Natural Resource Conservation Commission, ("TNRCC") by and through their
respective counsel, stipulate as follows:
1. URI holds TDH Radioactive Material License L03653 and TNRCC Underground
Injection Control Permits UR02827 (Kingsville Dome Mine) and UR02890 (Xxxxxx
Mine) authorizing its in situ uranium mining operations in Kleberg and Xxxxx
Counties, Texas.
2. Nothing in this stipulation changes, modifies, or amends any license,
permit, or production area authorization requirement.
3. Because URI was financially unable to continue ground water restoration at
the Kingsville Dome and Xxxxxx Xxxxx, the Kingsville Dome and Xxxxxx Xxxxx
Agreement and subsequent Second Kingsville Dome and Xxxxxx Xxxxx Agreement was
executed by URI, TDH, TNRCC, and United States Fidelity and Guaranty Company
("USF&G").
4. Under the terms of the Kingsville Dome and Xxxxxx Xxxxx Agreement and
Second Kingsville Dome and Xxxxxx Xxxxx Agreement, URI received funding from
USF&G to pay for reasonable restoration costs at the Kingsville Dome and Xxxxxx
Xxxxx. The financial assurance bonds (Performance Guarantee Bond No.
41-0130-40028-96-6 and Performance Guarantee Bond No. 41-0130-40040-96-6,
hereinafter "Bonds") for groundwater restoration issued to TDH by USF&G on
behalf of URI have been reduced according to the terms of the Kingsville Dome
and Xxxxxx Xxxxx Agreement and Second Kingsville Dome and Xxxxxx Xxxxx
Agreement.
5. As a material element of the Second Kingsville Dome and Xxxxxx Xxxxx
Agreement, URI agreed to enter this stipulation.
6. The TDH and TNRCC would not have executed the Second Kingsville Dome and
Xxxxxx Xxxxx Agreement without this stipulation.
7. URI shall elect at the earliest of (1) sixty days from the Petition date or
(2) thirty days from the entry of the Order for Relief in the instance where an
involuntary petition is commenced to assume or reject the Second Kingsville Dome
and Xxxxxx Xxxxx Agreement as an executory contract.
8. URI shall take no action directly or indirectly to prevent the Bankruptcy
Court from ordering URI to make such an accelerated election regarding
assumption or rejection of the Second Kingsville Dome and Xxxxxx Xxxxx Agreement
in accordance with the time frame set forth above in paragraph 7.
9. Should URI elect to reject the Second Kingsville Dome and Xxxxxx Xxxxx
Agreement as an executory contract, the TDH/TNRCC will retain whatever rights
and obligations they have under the Bonds, including the right to call in the
bonds for performance or payment.
10. All parties acknowledge that the obligations of USF&G under the Bonds
constitutes an independent obligation of USF&G as a surety in favor of
TDH/TNRCC.
11. URI covenants that in its legal opinion the Bonds constitute an independent
obligation of USF&G and do not constitute assets of URI's bankruptcy estate.
12. URI covenants that it shall take no action either directly or indirectly to
controvert any position taken in the Bankruptcy Court by TNRCC/TDH that these
Bonds are not property of URI's bankruptcy estate.
Page 15 of Exhibit 10.19
Dated this 8th day of January, 2002.
/s/ Xxxx X. Xxxxxxxx
--------------------------------------------------
Xxxx X. Xxxxxxxx
Chairman, President, and CEO
URI, Inc.
/s/ Xxxxxxx Xxxxxx
--------------------------------------------------
Xxxxxxx Xxxxxx ,Executive Director
Texas Natural Resource Conservation Commission
/s/ Xxxxxxx Xxxxxxx
--------------------------------------------------
Xxxxxxx Xxxxxxx, Chief
Bureau of Radiation Control
Texas Department of Health
Page 16 of Exhibit 10.19
