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EXHIBIT 10.26
MEMORANDUM OF AGREEMENT BETWEEN THE
UNITED STATES DEPARTMENT OF ENERGY
AND THE UNITED STATES ENRICHMENT
CORPORATION RELATING TO
DEPLETED URANIUM
THIS MEMORANDUM OF AGREEMENT is entered into as of June 30,
1998, by and between the UNITED STATES DEPARTMENT OF ENERGY ("DOE") and the
UNITED STATES ENRICHMENT CORPORATION ("USEC" or the "Corporation").
WHEREAS, both DOE and USEC have or will have a substantial
inventory of depleted uranium;
WHEREAS, therefore both DOE and USEC have an interest in
managing the depleted uranium responsibly;
WHEREAS, DOE is currently preparing a programmatic
environmental impact statement evaluating alternatives for the management and
disposition of depleted uranium;
WHEREAS, sections 161v, and 1311 of the Atomic Energy Act
provide that the Department may provide services in support of USEC;
NOW, THEREFORE, under the authority of the USEC Privatization
Act, the Energy Policy Act, the Atomic Energy Act and other law, DOE and USEC
hereby agree as follows:
ARTICLE 1 DEFINITIONS
The following terms when capitalized and used in this Agreement shall have the
meanings indicated below:
"Atomic Energy Act" means the Atomic Energy Act of 1954, as amended, 42 U.S.C.
Sections 2011 et. seq.
"Energy Policy Act" means the Energy Policy Act of 1992, Title IX of Public Law
102-486.
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"Gaseous Diffusion Plants" or "GDPs" means the gaseous diffusion plants at
Paducah, Kentucky and Piketon, Ohio owned by DOE, portions of which are leased
to USEC.
"Lease Agreement" means the Lease Agreement Between the United States
Department of Energy and the United States Enrichment Corporation, dated July
1, 1993, as amended.
"Privatization Date" means the date on which 100 percent of the ownership of
the Corporation has been transferred to private investors pursuant to the USEC
Privatization Act.
"Secretary" means the Secretary of Energy.
"USEC Privatization Act" means Title III of Public Law 104-134.
ARTICLE 2 TRANSFER OF DEPLETED URANIUM
(a) Schedule for Transfer. USEC will transfer title to and
possession of 2026 48-G cylinders containing approximately 16,673,980 kgU of
depleted uranium to DOE as follows:
Government Fiscal Year Amount Up to:
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1999 1.6 million kgU
2000 2.4 million kgU
2001 2.4 million kgU
2002 2.4 million kgU
2003 3.8 million kgU
2004 All remaining depleted uranium not
previously transferred up to the
2026 cylinders
Unless otherwise agreed, the transfers will occur on a semi-annual basis, with
the allocation divided into approximately equivalent amounts of depleted
uranium.
(b) Notification of Transfer, Right of Inspection, and Acceptance.
USEC shall notify DOE of its intent to transfer title and possession at least
forty-five (45) days in advance of that transfer, with a list of which
cylinders it intends to transfer. Prior to the transfer, DOE shall have the
right to inspect the cylinders. USEC shall configure the cylinders as required
by NRC. Within thirty (30) days of receiving
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USEC's notice of intent to transfer, DOE may reject any cylinder of depleted
uranium if the cylinder does not meet the regulatory standards listed in
Attachment A, and such cylinder shall be replaced by USEC with one that meets
such standards. Failure to reject a cylinder within such thirty-day period
shall be deemed to be acceptance of the cylinder by DOE, unless the parties
agree to extend this period to accommodate DOE inspection.
(c) Delivery. Upon transfer of title to DOE, USEC, at USEC's
option, shall: (1) permit DOE to continue to store the depleted uranium in the
portions of the GDP's leased to USEC where the cylinders are located as of the
date title is transferred (and continue to use the cylinder saddles); or (2)
delease the area (and transfer title to the cylinder saddles to DOE) where the
cylinders are stored.
(d) Records. Also upon transfer of title to DOE, USEC shall
provide copies of all USEC records associated with inspection, storage, and
management of the depleted uranium and the cylinders, including, but not
limited to, all manufacturers' records in its possession and the "Change
Cylinder Check Sheet (Form A-3931)" for each cylinder.
(e) Effective date of transfer of title and possession. The
effective date of transfer of title and possession for any cylinder will be the
later date of: (i) the date of transfer specified in USEC's notice provided in
accordance with Article 2(b); or (ii) in the event a cylinder is rejected, the
date of acceptance of the replacement cylinder by DOE in accordance with
Article 2(b).
ARTICLE 3 WORK-FOR-OTHERS
On or before the Privatization Date, USEC shall pay to DOE
$50,021,940 for storage, management and disposition of the transferred depleted
uranium, research and development into the beneficial use of depleted uranium,
and related activities and support services for depleted uranium-related
activities.
ARTICLE 4 HIRING PREFERENCE BY DOE
Pursuant to section 3110 of the USEC Privatization Act, and,
in a manner consistent with the Department's implementation of section 3161 of
the National Defense Authorization Act of Fiscal Year 1993, DOE shall, where
practicable, extend a preference in the hiring for work conducted under this
Agreement to any eligible adversely affected employee of an operating
contractor at either plant.
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ARTICLE 4 EXPIRATION OF AGREEMENT
In the event that the Privatization Date does not occur by
June 30, 1999, either party shall have the option to terminate this Agreement
upon providing thirty (30) days notice.
ARTICLE 5 MODIFICATIONS AND PRIVATIZATION
(a) Amendments. Except for changes made pursuant to
Article 5(b) hereof, no change to this Agreement shall be valid or binding
unless such change is agreed to in writing by the parties.
(b) 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 memorandum of agreement or other documents related to this
Agreement and entered into by DOE and USEC on or after the date hereof which
cannot be transferred to such private corporation by the operation of their
terms.
ARTICLE 6 MISCELLANEOUS
(a) Force Majeure. A Party shall not be liable for any
delay in, or prevention of, performance of its obligations under this Agreement
to the extent due to a "Force Majeure." A Force Majeure shall mean any event
arising from causes beyond the control of a Party that causes a delay in or
prevents the performance of any obligation by that Party under this Agreement,
including, acts of God; fire; war; insurrection; civil disturbance; explosion;
acts or a failure to act by the other Party; unanticipated breakage or accident
to machinery, equipment or lines of pipe despite reasonably diligent
maintenance; other circumstances that represent an imminent danger to human
health, safety or the environment; adverse weather conditions that could not be
reasonably anticipated; unusual delay in transportation; and restraint by court
order or order of public authority. Force Majeure shall not include increased
costs or expenses.
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(b) Entire Agreement. This Agreement contains the entire
understanding of DOE and USEC with respect to the subject matter of this
Agreement.
(c) Notices. Unless otherwise agreed by the parties,
communications concerning this Agreement shall be made to the following:
For DOE:
▇▇▇ ▇▇▇▇▇
Assistant Manager for Enrichment Facilities
U.S. Department of Energy
Oak Ridge Operations ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
For USEC:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President, Operations
United States Enrichment Corporation
2 Democracy Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The effective date of any communication shall be the date of the receipt of
such communication by the addressee.
(d) Applicable Law. This Agreement shall be governed and
construed in accordance with the laws of the United States of America.
(e) Further Assistance. DOE and USEC shall provide such
information, execute and deliver any agreements, instruments and documents and
take such other actions as may be reasonably necessary or required, which are
not inconsistent with the provisions in this Agreement and which do not involve
the assumption of obligations other than those provided for in this Agreement,
in order to give full effect to this Agreement and to carry out its intent and
the intent of the Act.
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IN WITNESS WHEREOF, DOE and USEC have caused this Agreement to
be executed and delivered as of the date first above written and hereby affix
the signatures of their duly authorized representatives:
UNITED STATES DEPARTMENT OF ENERGY
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇
Secretary
Date: June 30, 1998
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AND
UNITED STATES ENRICHMENT CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Date: June 30, 1998
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