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Exhibit 10.4
MEMORANDUM OF AGREEMENT RELATING TO THE TRANSFER
OF FUNCTIONS AND ACTIVITIES FROM THE
UNITED STATES DEPARTMENT OF ENERGY TO THE
UNITED STATES ENRICHMENT CORPORATION
This Memorandum of Agreement is entered into as of the 15th day of December,
1994, by and between the UNITED STATES DEPARTMENT OF ENERGY ("DOE" or "the
Department") acting by and through the Secretary of Energy, and the UNITED
STATES ENRICHMENT CORPORATION ("USEC" or "the Corporation"), acting by and
through its Chief Executive Officer ("CEO").
RECITALS
WHEREAS, Title IX of the Energy Policy Act of 1992, Public Law 102-486
("Energy Policy Act"), established USEC by amending the Atomic Energy Act of
1954 ("Atomic Energy Act") to add a new Title II - United States Enrichment
Corporation;
WHEREAS, Section 1308(b) of the Atomic Energy Act provides for the
transfer of the unexpended balances of appropriations and other monies available
to DOE and accounts receivable related to functions and activities acquired by
USEC from DOE under Title IX of the Energy Policy Act;
WHEREAS, to effectuate the transfer required by Section 1308(b) of the
Atomic Energy Act, the Office of Management and Budget issued a June 30, 1993,
Interim Determination Order authorizing DOE to transfer to USEC a total of
approximately $106.5 million in appropriated balances, which DOE transferred to
USEC; as well as approximately $143 million in net accounts receivable;
WHEREAS, to further resolve matters relating to the transfer of functions
and activities, the Office of Management and Budget issued a second Interim
Determination Order on November 29, 1993, authorizing DOE to transfer to USEC
an additional $106.5 million of unexpended balances not authorized or
transferred under the June 30, 1993 Interim Determination Order;
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WHEREAS, DOE subsequently paid USEC approximately $52.6 million of the
$106.5 million in unexpended balances leaving $53.9 million still unpaid;
WHEREAS, pursuant to Section 1403 of the Atomic Energy Act, USEC and the
Department entered into an agreement, dated July 1, 1993, (the "Lease") for the
lease of portions of two gaseous diffusion plants ("GDP's") owned by DOE and
located in Piketon, Ohio ("PORTS") and Paducah, Kentucky ("PGDP");
WHEREAS, the Lease provided that the Department shall reimburse USEC for
certain costs incurred by the Corporation in connection with bringing the GDP's
into compliance with certain laws and regulations that are or will be applicable
to the GDP's;
WHEREAS, by letter dated September 30, 1993, DOE requested the approval of
the Congress to reprogram funds needed to correct identified Occupational Safety
and Health Act deficiencies at the two leased facilities and to cover certain
costs related to nuclear safety over sight and compliance requirements;
WHEREAS, Section 5.1(b)(ii) of the Lease required the Department to
reimburse the Corporation for work required to obtain an initial certificate of
compliance from the Nuclear Regulatory Commission ("NRC") or NRC approval of a
Department plan for achieving compliance;
WHEREAS, on July 12, 1994, the Board of Directors of USEC decided to
proceed with the commercialization of AVLIS;
WHEREAS, Sections 1601(b) and 1602(b) of the Atomic Energy Act authorize
the transfer from DOE to USEC of certain rights and property relating to AVLIS;
WHEREAS, Section 1401 of the Atomic Energy Act establishes USEC as the
exclusive marketing agent on behalf of the United States Government for entering
into contracts for providing enriched uranium and uranium enrichment and related
services after July 1, 1993; and
WHEREAS, Section 161j. of the Atomic Energy Act authorizes the Department
to make such disposition as it deems desirable of radioactive material, the
special
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disposition of which is, in the Department's opinion, in the interest of the
national security.
NOW, THEREFORE, under authority of the Energy Policy Act and the Atomic
Energy Act, and subject to their provisions, and in order to carry out the
mandate Congress has given DOE and USEC, to fully satisfy DOE's obligations
under Section 1308(b) of the Atomic Energy Act, and to resolve certain other
issues relating to the transfer of functions and activities from DOE to USEC,
the parties hereto agree as follows:
I. AVLIS
A. Termination Costs
(i) USEC shall be solely responsible for all costs, exclusive of
internal DOE overhead costs and the cost of work performed by DOE
employees, that are associated with the termination and close-out
of the atomic vapor laser isotope separation ("AVLIS") program up to
a maximum of $40 million. These costs are limited solely to the
termination of AVLIS activities at the Xxxxxxxx Livermore National
Laboratory ("LLNL") site and relocation costs of Xxxxxx Xxxxxxxx
Energy Systems, Inc. employees from LLNL back to Oak Ridge for which
DOE is obligated to pay. Except as provided in Section I.A.(ii)
below, DOE shall remain responsible for all other costs associated
with the termination and close-out of the AVLIS program.
(ii) In addition to the costs specified in Section I.A.(i), if
USEC's use or operation of AVLIS after July 12, 1994 increases the
cost, exclusive of internal DOE overhead costs and the costs of work
performed by DOE employees, associated with the termination and
close-out of the AVLIS program over that which would have been
incurred in the absence of such use or operation, USEC shall be
responsible for such increased costs.
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B. Decontamination and Decommissioning Costs
Except as provided in this paragraph, the Department shall remain
responsible for all costs associated with the decontamination and
decommissioning, as defined in Section 1201 of the Atomic Energy Act, of
AVLIS facilities. If USEC's use or operation of AVLIS facilities increases
the costs paid by the Department, exclusive of internal DOE overhead costs
and the cost of work performed by DOE employees, for the decontamination
and decommissioning of the AVLIS facilities over that which the Department
would have incurred in the absence of such use or operation, then USEC
shall reimburse the Department for such increased costs incurred.
II. REPROGRAMMING
The Department agrees to use its best efforts to obtain Congressional
authorization for the pending request to reprogram funds necessary to
accomplish this Agreement. USEC will actively assist the Department's efforts to
obtain Congressional authorization to reprogram funds necessary to accomplish
the purposes of this Agreement.
III. DETERMINATION ORDER
The Department agrees to satisfy its remaining $53.9 million obligation to
USEC under the OMB Interim Determination Orders dated June 30, 1993 and
November 29, 1993 as follows:
A. AVLIS Termination Funds
Within 30 days of the execution of this Agreement, the Department
shall transfer the remaining funds reserved for AVLIS termination
activities in the amount of $34.3 million.
B. Remaining Commitment
The remaining amount due under the Interim Determination Orders,
$19.6 million, shall be provided through direct transfers of uranium or
by assignment of the accounts receivable from sales of uranium inventories
held by DOE in accordance with
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the terms specified in Sections VI.E. (i) - (iii) below. If the amount
received by USEC from the accounts receivable from the sales of uranium
inventories exceed the remaining amount due under the Interim
Determination Orders then USEC shall credit the excess toward the
Department's obligations for the reimbursable costs as defined in Section
VI.A. below.
IV. COSTS TO BRING GDP'S INTO COMPLIANCE WITH OSHA STANDARDS
Section 5.1(a) of the Lease requires the Department to provide to USEC $35
million in complete satisfaction of all the Department's obligation for any and
all modifications to bring the GDP's into compliance with applicable OSHA
standards. The Department has paid to USEC $5.63 million, leaving $29.37 million
unpaid. In satisfaction of that obligation, the Department shall pay to USEC
$29.37 million immediately upon receiving Congressional authorization for
reprogramming of funds for that purpose.
V. PORTSMOUTH HIGHLY ENRICHED URANIUM
The Department agrees to provide to USEC 13.198 metric tons of highly
enriched uranium, in the form of UF6 which can be introduced into the uranium
enrichment stream to produce a product that will meet the current ASTM
specification for UF6 enriched to less than five percent (5%) from natural
uranium feed (C-996-90), (the "13 MTU") located at PORTS in accordance with the
following terms:
A. Upon execution of this Agreement, DOE will transfer rights to the 13
MTU to USEC, but DOE will retain title and control of it until it
enters the uranium enrichment process stream through the feed
station at PORTS and is blended to below 10 percent U-235. USEC
shall accept, take delivery of and title to the 13 MTU at the time
the material enters the uranium enrichment process stream through
the feed station at PORTS and is blended to below 10 percent U-235.
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Once USEC takes title to the 13 MTU, it assumes all responsibility
for that material, including for the quality of the resulting
product.
B. Until September 30, 1994 the Department shall bear the costs of
complying with all nuclear safety, safeguards and security controls
for any and all uranium enriched to concentrations of 10 percent
U-235 or greater ("Nuclear Safe guards Requirements"). Subject to
the reductions provided in Section V.E., USEC shall reimburse the
Department for the costs incurred in complying with the Nuclear
Safeguards Requirements with respect to the 13 MTU covered by this
Agreement beginning on October 1, 1994 up to a maximum of $9.9
million per fiscal year. The Department shall be responsible for the
costs incurred in complying with the Nuclear Safeguards
Requirements with respect to any highly enriched uranium other than
the 13 MTU. Notwithstanding this allocation of financial
responsibility, the Department agrees that it will be solely
responsible for providing for, establishing and maintaining Nuclear
Safeguards Requirements for all uranium enriched to concentrations
of 10 percent U-235 or greater. USEC shall assume physical
responsibility for nuclear safety, safeguards and security for
uranium covered by this Agreement only after such material is
processed, as necessary, to concentrations of less than 10 percent
U-235.
C. USEC will compensate DOE for the 13 MTU in the following amounts:
(i) $82.8 million for the separative work unit ("SWU") value, and
(ii) $36 million for the natural uranium component of the same
material, for a total of $118.8 million.
D. The $118.8 million compensation by USEC shall be paid as follows:
(i) a credit of $12.5 million for the additional costs to USEC of
processing and handling the 13 MTU, which credit includes all costs
associated with transporting the material from X-345 to X-326,
sampling and analyzing the material, installing and operating
chemical traps for contaminant
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treatment, feeding the material into the uranium enrichment
processing stream, removing heels material from all (approximately
1,322) cylinders currently stored in X-345, cleaning and
decontaminating such cylinders, and any safe guards costs associated
with storage of such cylinders prior to cleaning, (ii) a credit of
$9.9 million per year for fiscal years 1995 through 1999, totalling
$49.5 million, for Nuclear Safeguards Requirements costs associated
with maintaining the 13 MTU at PORTS (except as that number may be
affected by Sections V.E. and V.F. below), and (iii) the balance to
reimburse USEC for its costs to bring the GDP's into compliance
with standards in accordance with Section VI of this Agreement.
After cleaning and decontamination, DOE shall be responsible for the
cost of storage and eventual disposal of the cylinders and the
resulting waste and other product.
E. The $49.5 million credit for Nuclear Safeguards Requirements costs
shall be reduced pro rata by weight for each month for any amount of
highly enriched uranium (other than the remaining portion of the 13
MTU) DOE retains at PORTS based on the actual inventories at PORTS
during the prior month. Appendix A reflects DOE's current projection
of highly enriched inventories at PORTS through September 1995 and
includes the formula for calculating the reduction in credit, if
any.
F. A ratable portion of the credits of $9.9 million for fiscal years
1998 and 1999 shall be reduced for any months after USEC has
completed feeding the 13 MTU into the uranium enrichment processing
stream and the amount shall be rebated to the Department in
accordance with Section VI.D. Except as provided in Section V.E., no
reduction shall be made for fiscal years 1995 through 1997.
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VI. COSTS TO BRING DOE GDP'S INTO COMPLIANCE WITH NRC CERTIFICATION STANDARDS
AND THE REGULATORY OVERSIGHT AGREEMENT
A. Reimbursable Costs
(i) Except as provided below, the Department and USEC agree that the
costs reimbursable pursuant to Section 5.1(b) of the Lease
(hereinafter "reimbursable costs") include all costs, exclusive of
internal USEC overhead costs and the cost of USEC employees not
fully dedicated to this effort, reasonably incurred by USEC for all
work necessary either (1) to bring the Leased Premises and Leased
Personality into compliance with the Regulatory Over sight Agreement
(Exhibit D to the Lease) and any amendment thereof, or to achieve
any other safety improvements required or directed by DOE; or (2) to
obtain initial NRC certification or NRC approval of a plan to
achieve compliance (including all work related to preparing,
submitting, gaining NRC approval, and achieving initial compliance
with NRC standards). Such work includes, but is not limited to,
physical work, architectural and engineering services, preparation
and revision of procedures, preparation of the application,
application fees, and training of personnel. The reimbursable costs
shall exclude fifty percent (50%) of the costs of outside
consultants providing training services and fifty percent (50%) of
the costs of outside legal services.
(ii) Any request by USEC for reimbursement of reimbursable costs
pursuant to this Agreement shall include adequate documentation of
the basis for the request, including the amount and nature of the
cost by category, along with supporting third party invoices. Upon
request, USEC shall permit DOE access to any records maintained by
USEC that support USEC's request for payment of reimbursable costs.
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B. Safety Analysis Reports
(i) If USEC requests any work on the Safety Analysis Reports for the
GDP's, after November 30, 1994 USEC shall fully reimburse DOE for
all costs, exclusive of internal DOE overhead costs, and the cost of
DOE employees not fully dedicated to this effort, incurred in
providing such assistance. Upon request, DOE shall provide a
written cost estimate to USEC prior to commencing any work.
(ii) Any request by DOE for reimbursement of costs for any work on
the Safety Analysis Reports requested by USEC pursuant to this
Agreement shall include adequate documentation of the basis for the
request, including the amount and nature of the cost by category,
along with supporting third party invoices. Upon request, DOE shall
permit USEC access to any records maintained by DOE that support
DOE's request for payment of reimbursable costs.
C. Reprogramming Funds
Upon receiving Congressional authorization for the reprogramming of
funds, the Department shall transfer $11 million to USEC.
X. XXX Credit
Upon receipt of the rights to the 13 MTU described in Section V.
above, USEC shall credit the Department with $56.8 million toward the
reimbursable costs as defined in Section VI.A. ($118.8 million less $49.5
million Nuclear Safe guards Requirements costs and less $12.5 million
processing and handling costs). Should any of the credits for the cost of
Nuclear Safeguards Requirements be reduced pursuant to Sections V.E. or
V.F., USEC shall credit the Department in the amount of the reduction
toward the reimbursable costs as defined in VI.A., or toward other amounts
owed to USEC by the Department. If no such obligations are outstanding,
USEC shall rebate those amounts in cash.
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E. Sales, Transfers and Valuation of Inventories
To the extent USEC's reimbursable costs exceed the amount provided
for in Sections VI.C. and D., the Department shall reimburse USEC through
direct transfers of uranium or by assignment of the accounts receivable
resulting from sales of uranium inventories held by DOE as follows:
(i) DOE shall have the right to elect in the first instance
whether to provide USEC with uranium or to sell uranium to a
third party, subject to the provisions of Section 1401 of the
Atomic Energy Act, and transfer the accounts receivable from
such sale to USEC in full or partial satisfaction of the DOE
obligation. DOE shall notify USEC of its election within 30
days of its receipt of USEC's request for reimbursement of
reimbursable costs. Except as provided in Section VI.E(iii)
below, DOE shall arrange for and be solely responsible for any
and all costs associated with the transfer of inventory
including the costs of processing before the material enters
the uranium enrichment process stream (and waste disposal and
decontamination associated with such pre-enrichment stream
processing), packaging, handling, and transportation. DOE may
elect to satisfy its obligation to pay for such transfer
costs by transferring to USEC additional uranium to compensate
USEC for such costs.
(ii) In the event DOE elects to provide USEC with uranium, USEC may
request it in the form it can best utilize at that time, and
DOE shall make reasonable efforts to make the requested form
available. It shall be delivered by DOE as soon as possible to
either PORTS or PGDP as designated by USEC and in accordance
with a schedule for delivery agreed upon by USEC and DOE. If
DOE
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does not have available for transfer uranium in the form
USEC requests or meeting the specifications required by
USEC, DOE agrees to sell uranium to a third party, subject
to Section 1401 of the Atomic Energy Act, and transfer the
accounts receivable to USEC.
(iii) In the event DOE provides USEC with natural uranium in the
form of UF6, the UF6 shall be valued at $15 per Kg unless
otherwise agreed by the parties. In the event that such
natural uranium is located at PORTS or PGDP, delivery shall
occur at the GDP where the material is located and USEC shall
arrange for and be solely responsible for any and all costs
associated with the transfer of the inventory.
VII. ADDITIONAL TERMS
A. The Secretary and the CEO shall each designate a representative to
make best efforts to develop a resolution by December 31, 1994
within the Administration, for any compensation due USEC with
respect to the purchase of the Russian enriched uranium.
X. XXX and USEC agree that the terms under which USEC will act as DOE's
exclusive marketing agent for future sales of enriched uranium and
related services shall be the subject of a future Memorandum of
Agreement between DOE and USEC, which the parties will make best
efforts to enter into by November 30, 1994.
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IN WITNESS WHEREOF, the Department and USEC have caused this
Agreement to be executed and delivered, as of the date first written above, and
hereby affix the signatures of their duly authorized representatives:
/s/ Xxxxx X. X'Xxxxx
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Xxxxx X. X'Xxxxx
Secretary of Energy
AND
/s/ Xxxxxxx X. Xxxxxxx, Xx.
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Xxxxxxx X. Xxxxxxx, Xx.
President and Chief Executive Officer
United States Enrichment Corporation
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AMENDMENT FY98-1
TO THE
MEMORANDUM OF AGREEMENT RELATING TO
THE TRANSFER OF FUNCTIONS AND ACTIVITIES FROM THE
UNITED STATES DEPARTMENT OF ENERGY TO THE
UNITED STATES ENRICHMENT CORPORATION
This AMENDMENT FY 98-1 to the MEMORANDUM OF AGREEMENT RELATING TO THE TRANSFER
OF FUNCTIONS AND ACTIVITIES FROM THE UNITED STATES DEPARTMENT OF ENERGY TO THE
UNITED STATES ENRICHMENT CORPORATION ("MOA") that was entered into on December
15th 1994 between the UNITED STATES DEPARTMENT OF ENERGY ("DOE") and the UNITED
STATES ENRICHMENT CORPORATION ("USEC"), is entered into as of May 18, 1998.
WITNESSETH:
WHEREAS, the Congress of the United States of America has enacted the USEC
Privatization Act, Title III of Public Law 104-134 (the "USEC Privatization
Act"), which authorizes the Board of Directors, with the approval of the
Secretary of the Treasury, to privatize USEC; and
WHEREAS, the Nuclear Regulatory Commission has issued certificates of
compliance, approved compliance plans and, on March 3, 1997, assumed regulatory
oversight for the operation of the gaseous diffusion plants;
WHEREAS, it is desirable to update the MOA and finally resolve certain issues
addressed in the MOA;
NOW THEREFORE, under the authority of the Atomic Energy Act of 1954, the Energy
Policy Act of 1992, Public Law 102-486 (the "Act"), the USEC Privatization Act,
and other law, and in order to carry out the mandates which Congress has given
DOE and USEC in those acts, DOE and USEC hereby agree to modify the MOA as
follows:
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1. After Section VII the following new Section VIII is added:
VIII. Transfer of Uranium and Settlement of Liabilities
X. XXX Transfers to USEC
Subject to Section VIII.B., DOE shall
transfer title to, risk of loss and possession of approximately 45
metric tons of low enriched uranium, 3,803,610 kgU of natural
uranium and the cylinders in which the uranium is contained to USEC
on the date on which the Secretarial Determination described in
Section VIII.B. is signed. The low enriched uranium shall be
uranium hexafluoride as described in Attachment 1 and shall not be
subject to any restriction or limitation on its sale or use within
the United States to or by persons authorized to own or possess low
enriched uranium including any restrictions or limitations arising
from federal law or regulations or suspension agreements governing
the importation or use of foreign origin uranium. The low enriched
uranium shall be delivered to USEC at the Portsmouth gaseous
diffusion plant. The natural uranium shall be uranium hexafluoride
meeting the current ASTM specification for commercial natural
UF(6) (C-787-90) and shall be of U.S. origin. The natural uranium
shall be delivered to USEC at the Paducah gaseous diffusion plant.
The cylinders shall meet the current regulatory requirements and
industry standards. USEC has the right to reject particular
cylinders of natural or low enriched uranium that USEC determines
fail to conform to the requirements of this Section VIII.A. or are
otherwise defective in some manner. In the event USEC rejects one
or more cylinders, DOE shall replace the rejected cylinders with
conforming material of equal value to the rejected material within
60 days of receiving written notice from USEC of the rejection.
B. Secretarial Determination
The transfer of the uranium pursuant to Section VIII.A. is
subject to a Determination by the Secretary of Energy, pursuant to
Section 3112(d) of the USEC Privatization Act, that it will not
have an adverse material impact on the domestic uranium mining,
conversion or enrichment industry. USEC agrees that the uranium
transferred pursuant to Section VIII.A. will not be placed into
the market over less than a four-year period and that no more than
thirty-five percent of the uranium will be delivered to a person
other than the Department, an affiliate of USEC, USEC's successor
or an affiliate of USEC's successor, in any calendar year.
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DOE agrees to use its best efforts to complete the Secretarial
Determination and to transfer the uranium to USEC by May 22, 1998.
In the event that on June 12, 1998, the Secretarial Determination
required under Section 3112(d) to permit the transfer to take
place is not signed, or that the Secretary determines that
additional restrictions on the transfer are required, USEC shall
have the option of renegotiating the provisions of this Section
VIII with DOE. In the event that the parties fail to reach
agreement during such renegotiation, then USEC shall have the
option of terminating the provisions of this Section VIII.
C. Settlement of Liabilities
Upon receipt and acceptance by USEC of the
low enriched uranium and natural uranium pursuant to Section
VIII.A., it is agreed by the Parties that the uranium transferred,
together with the amounts previously transferred by DOE pursuant to
the MOA and the remaining portion of the 13 metric tons of HEU to
be transferred under Section V of the MOA, fully satisfies DOE's
obligations under Sections III.B. and VI of the MOA, the final OMB
Determination Order (No.3), and Section 5.1(b) of the Lease
Agreement for the Gaseous Diffusion Plants ("Lease"). This includes
the costs incurred by USEC to bring the Leased Premises and Leased
Personality (as defined in the Lease) into compliance with the NRC
approved plans for achieving compliance with NRC regulations
(DOE/ORO-2027/R3 and DOE/ORO2026/R4) and other NRC requirements.
2. Section I. AVLIS is deleted.
3. Add the following new Section IX after Section VIII:
IX. Privatization.
If USEC is privatized and its duties and obligations are
assumed by a private corporation pursuant to such privatization,
this Agreement shall survive and shall be transferred to such
private corporation without the need for DOE or USEC to take any
further action. In such event, the name of such private corporation
shall be substituted for that of USEC in this Agreement. In
addition, DOE and USEC shall take whatever further action is
required to transfer to such private corporation any memoranda of
agreement or other documents related to this Agreement and entered
into by DOE and USEC, on
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or after the date hereof, which cannot be transferred to such
private corporation by the operation of their terms.
IN WITNESS WHEREOF, and intending to be legally bound, DOE and USEC have caused
this Amendment to the MOA to be executed and delivered upon the latter date of
the signature of the two parties, and hereby affix the signatures of their duly
authorized representatives.
/s/ Xxxxxxx X. Xxxxxx 5/15/98 /s/ Xxxxx X Xxxxxxx, Xx. 5/18/98
------------------------------- ------------------------------------
Xxxxxxx X. Xxxxxx Date Xxxxx X Xxxxxxx, Xx. Date
Chief Financial Officer Chief Financial Officer
U.S. Department of Energy U.S. Enrichment Corporation
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AMENDMENT FY98-2
TO THE
MEMORANDUM OF AGREEMENT
RELATING TO THE TRANSFER OF FUNCTIONS
FROM THE UNITED STATES DEPARTMENT OF ENERGY
TO THE UNITED STATES ENRICHMENT CORPORATION
THIS AMENDMENT, dated as of May 18, 1998 between the
UNITED STATES DEPARTMENT OF ENERGY ("DOE") and the UNITED STATES ENRICHMENT
CORPORATION ("USEC"). modifies the MEMORANDUM OF AGREEMENT RELATING TO THE
TRANSFER of FUNCTIONS FROM THE UNITED STATES DEPARTMENT OF ENERGY TO THE UNITED
STATES ENRICHMENT CORPORATION (the "Agreement") entered into by DOE and USEC on
December 15, 1994.
WHEREAS, pursuant to Section V. of the Agreement DOE
agreed to transfer to USEC 13.198 metric tons (MTU) of highly enriched uranium
in the form of UF6 contained in certain cylinders; and
WHEREAS, pursuant to Section V.C. of the Agreement, USEC
agreed to provide DOE with $118.8 million in compensation for the SWU and
natural uranium components of the transferred HEU material; and
WHEREAS, pursuant to Section V.D. of the Agreement, the
parties further agreed that the $118.8 million in compensation paid to DOE would
be used by DOE to credit USEC for its additional costs of handling this HEU
material, credit USEC for its costs associated with the Nuclear Safeguard
Requirements with respect to this HEU material and reimburse USEC for certain
costs related to upgrading the two gaseous diffusion plants leased by USEC from
DOE (the "GDPs") to achieve compliance with NRC's certification standards and
the Regulatory Oversight Agreement; and
WHEREAS, the parties have now determined that through a
mutual mistake they underestimated the amount of HEU material recoverable from
the cylinders transferred to USEC under the Agreement and that these cylinders
contain approximately 14 MTU of recoverable HEU; and
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WHEREAS, the parties now desire to reform the
Agreement to provide for the transfer by DOE to USEC of the entire
amount of HEU recoverable from the cylinders and to provide for a credit by
USEC to DOE for a portion of the value of the SWU and uranium components of
such HEU that has been and will be received by USEC as the HEU is blended into
the process stream at the Portsmouth gaseous diffusion plant.
NOW THEREFORE, under the authority of the Atomic Energy
Act, the Energy Policy Act, and the USEC Privatization Act, and other law, and
in order to carry out the mandates that Congress has given DOE and USEC therein,
DOE and USEC hereby agree to modify the Agreement as follows:
1. In the first line of Section V, change "13.198" to "approximately 14".
2. In Section V.C, change "$82.8 million" in subsection (i) thereof to "$111
million"; change "$36 million" in subsection (ii) to "$42.5 million"; and
change "$118.8 million" in the last line thereof to "$153.5 million".
3. In Section V.D, change "$118.8 million" in first line thereof to "$153.5";
renumber subsection (iii) thereof to subsection (iv) and add the following
subsection (iii):
"(iii) a credit of up to $34.7 million against amounts
owned by DOE for services at the GDPs performed by USEC pursuant to the
Memorandum of Agreement Between DOE and USEC for Services, dated July l, 1993
(Exhibit F to the Lease), on or prior to June 30, 1998."
4. In Section VI.D, replace the first sentence with the following:
Upon receipt of the rights to the approximately 14 MTU described in
Section V above, USEC shall credit the Department with $56.8 million toward the
reimbursable costs as defined in Section VI.A ($153.5 million less $49.5
million Nuclear Safeguards Requirements costs, less $12.5 million processing and
handling costs, and less $34.7 million credit for services performed at GDPs).
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IN WITNESS WHEREOF, DOE and USEC have cause this Agreement to be
executed and delivered as of the date first above written and hereby affix the
signatures of their duty authorized representatives:
U.S. DEPARTMENT OF ENERGY UNITED STATES ENRICHMENT CORP.
By: /s/Xxxxxxx X. Xxxxxx By: /s/Xxxxx X. Xxxxxxx, Xx.
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Xxxxxxx X. Xxxxxx Xxxxx X. Xxxxxxx, Xx.
Chief Financial Officer Vice President and Chief
Financial Officer
Date: 5/15/98 Date: 5/18/98
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