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Exhibit
10.3
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U.S.
Silver
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[LOGO]
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X.X.
Xxx 000
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0000
Xxxx Xxxxx Xxxx
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Xxxxxxx,
XX 00000
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208.752.1116
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This
PROFESSIONAL SERVICES AGREEMENT, entered into as of the 12 day of
February ,
2008 is between Coeur D'Alene Contract Mining hereinafter called
“Contractor,” is Xxx 0000, Xxxxxxxxx, Xxxxx 00000 and U.S. Silver - Idaho, Inc.,
hereinafter called "U.S. Silver.", whose address is X.X. Xxx 000, Xxxxxxx, XX
00000-0000,
X.X.
Silver desires the services of Contractor to provide mining labor and services
as described in the Letter of Authorization
Contractor
represents that entity is qualified and desires to perform the services
requested by U.S. Silver.
NOW
THEREFORE, for and in consideration of the mutual promises and covenants herein
contained to be kept and performed by the parties hereto, the parties agree as
follows:
I.
U.S. SILVER'S
REPRESENTATIVE
1.
U.S. Silver's representative for the project shall be designated in the
individual letter(s) of Authorization which are contemplated by this
agreement.
2.
U.S. Silver may, by a Notice in writing signed by U.S. Silver's authorized
agent, appoint additional or substitute representatives.
II.
CONTRACTOR'S
REPRESENTATIVE
1.
Contractor's Representative for the project shall be designated in the
individual letter(s) of Authorization which are contemplated by this
agreement.
2.
Contractor may, by a Notice in writing signed by Contractor's authorized agent,
appoint additional or substitute representatives.
III.
SCOPE OF
SERVICES
1. Contractor shall perform
the services pursuant to the terms and conditions of this Agreement as set forth
in a separate Letter of Authorization to be delivered by U.S. Silver. The
individual Letter(s) of Authorization are incorporated into this Agreement by
this reference. Each individual Letter of Authorization shall refer to this
Agreement. If Contractor believes that any Letter of Authorization or any
written instructions is not clear with regard to any particular, it shall
promptly notify U.S. Silver to such effect and seek clarification.
S.I.
2.
All services performed by Contractor under this Agreement shall be in accordance
with the Letter of Authorization and written instructions to Contractor from
U.S. Silver's representative. The letter of Authorization and written
instructions shall more particularly describe the services to be performed, and
shall specify the place of performance, the date of performance, and the date of
completion of the services.
3.
From time to time, Contractor shall engage in discussions with authorized U.S.
Silver personnel, especially with regard to interpretation of data or findings
developed or made while performing services under this agreement, to the end
that U.S. Silver is kept closely and timely advised.
4.
Contractor shall not contact any third parties in connection with performance of
the contracting services without prior authorization from U.S.
Silver.
5.
Upon the written request of the U.S. Silver's Representative, Contractor shall
prepare and deliver to U.S. Silver written progress reports or other pertinent
information as U.S. Silver may from time to time request.
6.
Contractor agrees that it is responsible for and will pay promptly all costs and
charges incurred by itself for labor, machinery, tools, supplies, and expenses
used in completing the work as agreed, and to take such steps as are necessary
to ensure that no lien or other such charge related to the Contractor's work
shall be registered against the Company or the property. The Contractor further
agrees that it shall be responsible for the payment of all assessments for
Workers' Compensation, insurances, statutory burdens, Sales Taxes, and other
such applicable charges relating to its own labor and supplies purchased, and
the Contractor further covenants and agrees to keep all accounts
current.
7.
The Contractor agrees that if any employee is unqualified to perform the jobs
assigned or is otherwise objectionable, that he shall be replaced.
IV.
COMPENSATION AND
EXPENSES
1.
Compensation for services performed under this Agreement shall be according to
the schedule set forth in Exhibit A - Fee Schedule, attached hereto. Except as
otherwise provided in Exhibit A, all amounts shall be in United States
dollars.
2.
At the discretion of U.S. Silver, Contractor shall be subject to audit of
records, costs, and expenses billed to U.S. Silver using generally accepted
accounting and auditing procedures.
3.
Except as otherwise provided in Exhibit A or Letter of Authorization, Contractor
shall prepare and submit to U.S. Silver on two week basis, or as otherwise
agreed, a detailed statement of charges. The statement shall set forth the dates
and locations of services and shall show the advanced footage and payment
requested for the work performed. Statements shall be directed to the attention
of the Xxxxx Xxxx, U.S. Silver - Idaho, Inc., X.X. Xxx 000, Xxxxxxx, XX
00000-0000. Subject to verification by U.S. Silver, payments of amounts due less
than existing set-offs, shall be made by U.S. Silver within twenty days after
receipt of such statements.
4.
A daily work sheet showing the location, names, and work activity of all
employees charged to the U.S. Silver account shall be approved by the U.S.
Silver representative no
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later
than two work days after the work was performed. A copy of this work sheet shall
accompany the request for payment.
V.
AGREEMENT
DURATION
1.
This Agreement shall commence on the date hereof and shall be in effect through
the completion of work, unless sooner terminated, or unless the work described
the Letter of Authorization is completed, or until the services of the
Contractor are no longer needed.
2.
Either party may terminate this Agreement upon ten days written notice to the
other party at the addresses listed above, sent by certified mail with return
receipt requested. After such termination, Contractor may be instructed to
prepare and deliver to U.S. Silver a final report.
VI.
COMPLIANCE WITH STATE
AND FEDERAL LAWS
1.
Contractor shall comply with all requirements of any applicable State, Federal,
International, or Local laws, rules, or regulations. Contractor represents that
he has all licenses or other authorizations required to enable him to perform
services hereunder in the state or country where the services are to be
performed.
2.
Contractor shall be fully and solely responsible for conducting all operations
under this Agreement at all times in such a manner as to avoid the risk of
bodily harm to persons and damage to property. Contractor shall obtain a
contractor's identity number from the Mine Safety and Health Administration
(MSHA) if so required by MSHA. Contractor must abide by U.S. Silver's safety
policies and best practices while working on any U.S. Silver
property.
VII.
INDEPENDENT
CONTRACTOR
Contractor
is and shall be in the performance of all work, services, and activities under
this Agreement an Independent Contractor. The parties acknowledge that U.S.
Silver has no right to control the details of Contractor's services. Contractor
shall not in any way or at any time be an employee or agent of U.S. Silver, and
shall not indicate or represent to any third xxxxx that Contractor is an
employee or agent of U.S. Silver. Contractor shall have no power to commit U.S.
Silver to any third party.
VIII.
PROFESSIONAL
RESPONSIBILITY
Contractor
agrees to perform the services under this Agreement, in accordance with the
standards of care, skill, and diligence normally provided by competent
professionals in the performance of services in respect to work similar to that
contemplated by this Agreement.
IX.
HOLD
HARMLESS
Contractor
agrees to defend, indemnify, and hold U.S. Silver and affiliated and subsidiary
companies and their employees, agents, officers, and directors harmless against
all costs, loss, or damage (including attorneys fees) arising from Contractor's
breach of this agreement or negligence in the performance of the services
hereunder, except only claims arising out of accidents resulting from the sole
negligence of U.S. Silver.
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X.
NONDISCLOSURE AND
OWNERSHIP OF WORK PRODUCT
1.
Contractor shall not, without the prior consent of U.S. Silver, disclose the fad
that U.S. Silver and Contractor have entered into this Agreement.
2.
All reports, publications, exhibits, films, data, conclusions, maps, and other
work product furnished by U.S. Silver to Contractor or obtained or developed by
Contractor under this Agreement and all information regarding U.S. Silver's
business plans, operations, properties, practices, methods, inventions, and
discoveries shall be and remain the property of U.S. Silver, and the same shall
be kept confidential by Contractor, who shall not disclose the same to any third
person directly or indirectly except upon the prior written consent of U.S.
Silver. Upon termination of this Agreement or upon the prior request of U.S.
Silver, Contractor will deliver such work product and information to U.S.
Silver.
3.
Contractor shall not, within two years of the termination of this Agreement,
acquire any interest, whether direct or indirect, in any mining claims, leases,
mining rights, or fee lands in the area within one mile of the mining claims in
the Coeur/Galena mining area without U.S. Silver's prior written consent. Any
interest acquired in violation of this paragraph shall, at U.S. Silver's request
and at no cost to U.S. Silver be conveyed to U.S. Silver by
contractor.
XI.
AMENDMENT-ENTIRE
AGREEMENT
This
Agreement may only be amended in writing, signed by each party hereto. There
shall be no oral amendment of this written contract. This instrument, together
with any Letter of Authorization and written instructions, constitutes the
entire agreement between parties with respect to its subject matter and
supersedes any negotiations and discussions between the parties. There shall be
no implied terms or covenants.
XII.
INSURANCE
COVERAGE
Contractor
agrees to obtain the following insurance:
1.
Workmen's Compensation Insurance; in full compliance with all applicable federal
and state laws, rules and regulations, covering all employees of Contractor
engaged in operation.
2.
Comprehensive General Liability Insurance, including coverage for owned,
non-owned and hired vehicles, under which U.S. Silver shall also be named as an
additional insured, covering bodily injury and property damage arising from
operations and premises involved in the work to be performed, including
contractual liability, covering the obligation assumed in this Agreement, with
limits of not less than $1,000,000 for the injury or death of one person, and
with limits of not less than $2,000,000 for the injuries or death of more than
one person as a result of one accident or occurrence.
3.
Professional Liability insurance having a limit of not less than $1,000,000 per
claim and in the aggregate.
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4.
Contractor agrees to provide, within 10 days of the execution of this Agreement,
a certificate of Contractor's insurance coverage pursuant with the requirements
of this provision.
XIV.
ASSIGNMENT
Neither
this Agreement nor any payments due to Contractor hereunder shall be assigned,
nor shall any services provided for herein be subcontracted by Contractor
without first obtaining U.S. Silver's written consent.
XV.
BINDING
EFFECT
The
terms of this Agreement shall apply to and be binding upon the successors and
permitted assigns of the respective parties hereto.
XVI.
APPLICABLE
LAW
Any
disputes between the parties relating in any way to this Agreement shall be
governed by the substantive law of the State of Idaho without regard for any
conflict of laws or choice of laws rules or principles that would permit or
require the application of the laws of any other jurisdiction.
XVII.
ENTIRE AGREEMENT
This
Agreement constitutes the entire Agreement between the parties with respect to
the subject matter hereof.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
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U.S.
SILVER - IDAHO, INC.
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CONTRACTOR:
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COUER D’ALENE CONTRACT
MINING
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By:
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XXXX X
XXXXXXXX
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By:
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XXXXX
XXXX
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Name,
Title
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Name,
Title
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Xxxx
X. Xxxxxxxx - President
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Xxxxx
Xxxx / owner
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U.S.
Silver
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[LOGO]
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X.X.
Xxx 000
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0000
Xxxx Xxxxx Xxxx
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Xxxxxxx,
XX 00000
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208.752.1116
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EXHIBIT
A
Mob/demob
and approved standby shall be charged at a rate of $65/hr per man.
All
prices for the Contractor will be two times (2X) the rate listed
below
With
a minimum of four miners and up to 6 miners, 4 hours of supervisor time will be
allowed per day at a rate of $85/hr. Supervision for more than six miners will
be agreed between the parties.
Monthly
rental payment for jacklegs provided by Coeur d'Alene Mining Contractors shall
be $50/mo for each drill machine
Breastdown
stopes 9' cut:
Mining
width determined by the company based on vein width.
Up
to a 7' mining width - $41.14/ft
+7'-
8' mining width - $44.77/ft
+8'
- 10' mining width - $52.03/ft
+l0'
mining width - $56.86/ft
Cleanout
will be paid at $7.26/ft when the cleanout is complete - including
finhoed
Breast
up stopes 9' cut:
Payment
will be the same as breastdown stopes, with the cleanout being paid as the stope
is mined. As an example, a stope up to a 7' mining width will pay
$48.40/ft
Backstoping
6' cut:
Up
to 7' mining width - $15.12/ft for drilling, $3.63/ft when blasting and ground
support is completed, and $11.49/ft when cleanout is completed.
I
drifts 8' cut
Up
to 7' mining width - $60.50/ft
Track
mucking - $6.05/ft
Track
drift with jumbo
$75.02/ft
$7.26/ft
for ditch
Jackleg
drift
$92.56/ft
$6.66/R
for ditch
3
cap raise prep
$3872
for breaking to track + 23'
$3872
for mucking and bolting
$3872
for timber and complete services
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Bunker
style prep
Two
chutes and one manway
$2500
for each complete chute to track + 38
$6616
for the completed crib rnanway to track +38'
5
cap raise prep
$4840
for breaking to tk + 23'
$4840
for mucking and bolting
$4840
for complete timber and services
3
Cap raise
$12l/ft
when drilling complete
$121/ft
when bolted and mucked
$12l/ft
for complete timber and services
Raise
Crib
$27.22/ft
includes armor and seal
Sandwall
$53.85/ft
high ready for sand
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Dear
Xx. Xxxxxxx and Xx. Xxxx
RE:
Letter of Authorization
In
accordance with the terms and conditions of that certain Professional Services
Agreement dated _
between Coeur D' Alene Contract Mining and U.S. Silver - Idaho, Inc., your
professional services as a Mining Contractor will be required until U.S. Silver
determines the job has been completed.
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I.
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U.S. SILVER'S
REPRESENTATIVE
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U.S. Silver's representatives shall be:
Xxxxx Xxxx and Xxxx Xxxxxxxx
II. CONTRACTOR'S
REPRESENTATIVE
Coeur d’Alene Contract Mining's
representative shall be: Xxxx Xxxxxxx or Xxxxx Xxxx
III. SCOPE OF
SERVICES
1.
The specific mining contracting services to be performed are as
follows:
a. Stope prep on the
3700 and 4600 levels.
b. I drifts on the
3700 level
2. Other conditions:
a.
MSHA training is required for all Contractor personnel prior to work performed
on any U.S. Silver property.
b. No illegal drugs, alcohol, or
firearms are permitted on site.
c.
A pre-employment drug screen at a facility approved by U.S. Silver will be
required for all Contractor employees that work within this agreement. Drug
screen costs will be a responsibility of the Contractor.
d. A post accident drug screen will be
required under the U.S Silver policy.
e.
Contractor employees will be approved by U.S. Silver prior to the start of work
by that employee.
f.
Materials and equipment provided by U.S. Silver to the Contractor shall
bereturned promptly to the Company at the request of the Company or within one
day of the termination of any or all employees working within this agreement.
Contractor shall reimburse U.S. Silver for the replacement cost of the materials
and equipment not returned.
g.
Personal safety equipment and supplies shall be the responsibility of the
Contractor. U.S. Silver will provide self rescuers if necessary.
h.
Equipment, tools, supplies, and other costs required for the mining or repair
activities will be the responsibility of U.S. Silver.
i.
Any employee working for the contractor must have ATF clearance prior to working
underground.
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IV.
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COMPENSATION AND
EXPENSES
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The
compensation for such mining contracting services is as stated in Exhibit A of
the above referenced Agreement.
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V.
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WORK
SCHEDULE
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U.S.
Silver will notify the Contractor of the weekly work schedule by Thursday of the
preceding week.
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VI.
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NON-DISCLOSURE AND
OWNERSHIP OF WORK PROJECT
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Pursuant
to subparagraph 3 of Section X of the Professional Services Agreement,
Contractor shall not within two years from the date of the Letter of
Authorization acquire, without prior written consent, any interest, direct or
indirect, in any mining claims, leases, mining rights, or fee lands within the
U.S. Silver claim block areas or within a one mile radius surrounding the
existing claim peripheries, unless approved in writing by U.S. Silver's
representative.
Should
you have any questions or wish to discuss this Letter of Authorization please
contact the U.S. Silver representative at the following address:
U.S. Silver - Idaho, Inc.
0000 Xxxx Xxxxx
X.X. Xxx 000
Xxxxxxx, XX 00000-0000
I
have enclosed two complete copies of this Letter of Authorization and the
associated Professional Services Agreement. Please sign and return one copy of
each to acknowledge your receipt of both and your agreement to perform the
consulting services authorized hereby. Also append a copy of the insurance
certificate as specified in Paragraph XI1 of the Professional Services
Agreement.
U.S.
Silver-Idaho, Inc.
Xxxx
X. Xxxxxxxx
President
XXXX
XXXXXXXX
Signature
and date
Agreed
to this 12
day of
February, 20 08
.
Coeur
d'Alene Contract Mining
XXXXX
XXXX
Print
name and title
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XXXXX
XXXX 2-12-08
Signature
and date
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