USEC PROPRIETARY INFORMATION
CONTRACT NO. 723886
EXHIBIT 10.2
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE REDACTED
PORTIONS. THE CONFIDENTIAL REDACTED PORTIONS HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH REDACTIONS.
USEC Inc.
Centrifuge Commercial Plant Manufacturing

         
CONTRACT NUMBER:
    723886  
 
       
CONTRACTOR:
  BWXT Services Inc.
 
       
DATE:
  June 25, 2007

Contract Purchase Agreement
IN WITNESS WHEREOF, the Parties have caused this Contract to be signed by their
duly authorized officers as of the Effective Date.

     
UNITED STATES ENRICHMENT
  BWXT SERVICES, INC.
CORPORATION, INC.
   
 
   
By: /s/ J.E. Vogelsang
  By: /s/ Terry Chalker
Name: J.E. Vogelsang
  Name: Terry Chalker
Title: Director, ACP Procurement,
  Title: Director, Contracts
Contract & Material Management
   

USEC PROPRIETARY INFORMATION

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USEC PROPRIETARY INFORMATION
CONTRACT NO. 723886
CONTRACT
BETWEEN
USEC Inc.
AND
BWXT Services, Inc.
In consideration of the mutual promises hereinafter set forth, USEC Inc., a
Delaware Corporation, (“the Corporation”), and BWXT Services, Inc., a Delaware
corporation (“Contractor”) (the Corporation and Contractor being referred to
herein individually as a “Party” and together, as the “Parties”) hereby agree to
the following contract (which, including the General Terms and Conditions and
the Attachments attached hereto, is hereinafter referred to as the “Contract”).
It is understood that BWXT Clinch River, LLC, a Delaware Limited Liability
Company , a wholly owned subsidiary of BWXT Services, Inc. has applied for
Foreign Ownership, Control or Influence (FOCI) approval and that upon FOCI
approval, this contract will be assigned to BWXT Clinch River. After that time,
references to Contractor shall mean BWXT Clinch River, LLC.
THE CUMULATIVE VALUE OF THE TASK ORDERS UNDER THIS CONTRACT WILL NOT EXCEED
$***** (to be modified as additional scope is identified for issuance on task
orders) DURING THE PERIOD OF PERFORMANCE.
DEFINITIONS. (Applicable to all stages)
As used throughout this Contract, the following terms, whether in the singular
or plural, when used with initial capitalization, shall have the meanings set
forth below:
     (a) The term “Task Order Ceiling Price” means the maximum amount specified
in the Task Order to be paid by the Corporation to the Contractor for the
Services, Deliverables and Materials to be provided under that Task Order.
     (b) The term “Target cost” as used in this Contract, means the estimated
cost of Task Orders as initially negotiated or adjusted in accordance with
section X, XI or XII.
     (c) The term “Target fee” as used in this Contract, means percentage of the
target cost as specified in section XI or XII.
     (d) The term “Ceiling cost,” as used in this Contract, means the target
cost, as adjusted, multiplied by a factor of *****. Total payments during Stage
III will not be greater than the ceiling cost.
     (g) The term “Change” means. a modification to a Task Order that may be
issued unilaterally by a Buyer in accordance with the terms of Article 19 of the
General Terms and Conditions of the Contract. A Change does not include
Technical Direction.

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CONTRACT NO. 723886
I. PURPOSE and SCOPE. (Applicable to all stages)
This is a task order contract for services and materials which will be provided
to support the American Centrifuge Lead Cascade and Commercial Plant. Task
orders issued under this contract will provide funding for Centrifuge Assemblies
which includes labor, parts, and equipment (tooling, assembly fixtures, etc.),
and other associated support costs as necessary for Lead Cascade and development
of Commercial Plant manufacturing capability. Task orders will also be issued
under this contract for Commercial Plant Centrifuge Assemblies for installation
in the Commercial Plant. Anticipated components for manufacture include the
Upper Suspension Assemblies (USA), Lower Suspension Drive Assemblies (LSDA), Cap
Assemblies, Column Parts, and Motor Drive Units referred to hereafter as
“Centrifuge Assemblies”.
This is a long term agreement with three stages to support start up of the 3.8 M
SWU plant in Piketon, OH with the possibility of future contracts to supply
additional expansion of the plant or construction of other plants. USEC intends
to lease the current Boeing facility in Oak Ridge, TN and will make it available
to the contractor for performance of this work.
Stage I of this acquisition requires the contractor to take over the ACP work
scope previously performed by Boeing in Oak Ridge. Generally, the work scope
includes (Specific work will be defined in Task Orders to be provided):

  •   Facility modifications, buildup of the equipment, vendor base, staff,
organization and all other activities necessary to manufacture, deliver and
support 11,520 units of hardware plus spares, fully conforming to USEC provided
designs, to the ACP site in Piketon, OH,     •   Supporting USEC and other ACP
contractor efforts to incorporate cost reduction features and lean manufacturing
processes into the commercial plant design,     •   Development of Column
Assemblies for Lead Cascade,     •   Development of Lower Suspension and Drive
Assemblies for Lead Cascade,     •   Development of Upper Suspension Assemblies
for Lead Cascade,     •   Deliver Rotor Assemblies for Lead Cascade and
technology transfer to Piketon,     •   Development and qualification of rotor
balance stands and technology transfer of rotor balance stand efforts.

The Stage I effort is to be performed under cost-plus fixed fee task orders
under this contract. The first series of task orders is for time and materials
to perform from contract award through end of December, 2007. Additional task
orders will be issued through completion of development, staffing, organizing,
equipping facilities, manufacturing and supporting Lead Cascade Centrifuge
Assemblies.
The Stage II effort is for Commercial Plant machine production and delivery of
the first 610 Commercial Plant Centrifuge Assemblies to the ACP plant in
Piketon, OH. This effort is to be performed under cost plus incentive fee task
orders under this contract.
Stage III requires delivery of:

  •   10,910 Centrifuge Assemblies,

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CONTRACT NO. 723886

  •   Spares (TBD), and     •   Supply support (TBD) as necessary to support
reliable operation of the first ACP plant.

This effort is to be performed under target-price, incentive fee task orders
under this contract. The target price for Stage III will be negotiated after
manufacture of 350 units of hardware during Stage II.
USEC may unilaterally add services, spares and supply support line items to
support the first Piketon, OH plant to this contract at the time of Stage III
negotiations or anytime up through delivery of hardware for the last unit,
subject to equitable adjustment to the Contract pursuant to the terms of
Article 19 of the General Terms and Conditions of the Contract.. USEC may
require Contractor to provide a proposal for supplying hardware to subsequent
USEC centrifuge plants in the future.
For performance under all stages, the contractor shall:
a. Maintain a quality program consistent with and meeting applicable
requirements of USEC’s Quality Assurance Program and NRC license to build and
operate the Piketon, OH facility.
b. Establish and implement material resource planning and supply chain
management systems that timely support production of reliable Centrifuge
Assemblies.
c. Ensure a safety culture is in place that assures safety takes priority over
cost, schedule, manufacturing or any other considerations. The contractor shall
comply with all applicable state and federal occupational health and safety
requirements.
d. Maintain an effective security program that maintains compliance with all
applicable NRC and DOE security and classification requirements and regulations.
The NRC and/or the DOE will be the regulatory authority for security compliance
for machine manufacturing operations.
e. Maintain an effective regulatory compliance program that is responsive to all
regulatory requirements, questions and directions throughout the life of the
contract.
f. Propose, for USEC approval, maintain, use and report to USEC the results from
a project control system that accurately reflects the project status relative to
cost and schedule performance. Elements of the project control system shall
include:

  1.   A Work Breakdown Structure (WBS) that provides the basis for all project
control system components, including estimating, budgeting, scheduling,
performing, and management.     2.   Cost estimating methodologies that are
consistent with industry standards.

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CONTRACT NO. 723886

  3.   Project schedules that integrate with the WBS. Activity logic links shall
depict all work scope constraints and decision points and shall be integrated
into a total project network schedule. The project schedule shall clearly depict
critical path activities and milestones.     4.   A capability to process USEC
proposed or directed changes with minimum impact on technical, schedule, and
cost elements of the contract.     5.   Variance analysis, explanation and
justification for differences between planned and actual performance against the
cost and schedule baseline on a monthly basis.     6.   Commercially accepted
performance analysis techniques utilizing earned-value methods. Documentation of
performance metrics (i.e., quantities) are preferred for all technical work
scopes, however it is recognized that some small elements (e.g. Project
Management) may use a level of effort technique.

g. Coordinate with other contractors to assure centrifuge machines are assembled
and delivered in accordance with USEC’s schedule including appropriate storage
and inventory to assure such delivery, including insuring delivery during short
duration disruptions as agreed in task orders.
h. Implement a Qualification Test Program with support from USEC for:

  1)   Manufacturing Process Qualification     2)   Product Qualification     3)
  Product Acceptance

The contractor shall develop Qualification Test Plans for Centrifuge Assemblies
and submit the plans for USEC approval.
i. Establish and maintain a configuration control program for the design,
specifications, manufacturing processes, quality requirements and all other
attributes necessary to deliver Centrifuge Assemblies in accordance with USEC
drawings and specifications.
j. Establish and implement an effective risk management program that is designed
to identify potential cost and schedule issues and develop plans that will
mitigate or eliminate problems.
k. Establish and maintain a continuous improvement program using the latest
manufacturing techniques (lean manufacturing, 6 sigma, or equivalent)
l. Develop a transportation plan using USEC designed; contractor supplied
shipping containers that ensures timely delivery of all Centrifuge Assemblies to
Piketon, OH. Transportation risks and detailed planning will be developed in
Stage II and III.
m. Operate and maintain facility infrastructure, such as water, sewer,
electrical, and compressed air systems in compliance with all local, state, and
federal environmental regulations and building codes.

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CONTRACT NO. 723886
n. Perform make versus buy analysis. It is understood that the current ACP
manufacturing plan envisions that unclassified components manufactured during
the performance of this contract will be outsourced while classified components
will be manufactured by the Contractor. Contractor agrees to assess the validity
and effectiveness of this approach throughout the term of this contract through
the implementation and deployment of a comprehensive Make Versus Buy Program.
This program will ensure the consideration of all pertinent cost and non-cost
related factors resulting in the delivery of high quality components in the most
cost effective manner.
II. TASK ORDERS (Applicable to all Stages)
     a. The Contractor shall furnish personnel, facilities, equipment,
materials, supplies, and services (except those that are provided by the
Corporation) in accordance with the Statement of Work/Specification provided
with each Task Order Release. The Buyer will issue specific Task Orders within
the purpose of the Contract. A Task Order shall designate: (1) The scope of
work, (including but not limited to drawings, specifications, etc.) for the Task
to be performed; (2) Schedule of performance for the Task; (3) Estimate of the
dollar amount anticipated for all Services, Deliverables and Materials to be
provided; (4) The amount currently authorized for payment; (5) Authorized travel
for the Task; (6) Services, Deliverables and Materials to be provided and
required delivery dates for such Deliverables;(7) Applicable Quality
requirements. (8) Any Authorized Overtime; (9) Any agreed special Terms and
Conditions.
     b. Upon receipt of a proposed Task Order for cost reimbursable tasks the
Contractor will provide the Buyer a proposal or quote for each task, containing
at a minimum: (1) The labor hours by department to complete the task (see
Section VI (Direct Productive Labor Hour) and agreed rates; (2) cost of material
(if any); (3) Other Direct Costs (if any); and, (4) fee as specified in section
X, XI, or XII.
     c. Upon completion of the proposal or quote, Contractor and Corporation
will negotiate details to arrive at a mutually agreed scope, schedule, target
cost, fee and ceiling price as appropriate for each Task Order to be issued
under this contract.
     d. Labor costs for Task Orders shall be estimated using agreed straight
time labor rates, unless overtime is required to meet Task Order schedules. All
overtime shall be authorized by Task Order. Subsequent authorization of overtime
or additional overtime shall be by Task Order revision.
     e. Authorized overtime shall not be billed unless the personnel working the
overtime have already performed 40 hours of work under this Contract in the week
in which the overtime is being billed and the overtime is authorized by the Task
Order.

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CONTRACT NO. 723886
     f. Task Orders shall be numbered and incorporated into this Contract upon
acceptance by the Contractor. The Contactor shall perform the Task Order in
accordance with the negotiated schedule and Task Order Ceiling price specified
in the Task Order.
g. Contractor shall not expend any time or incur any expense which would result
in an obligation of the Corporation to pay or reimburse the Contractor for
Services, Deliverables or Materials which, when aggregated with all amounts
paid, or required to be paid, by the Corporation hereunder, would exceed a Task
Order Ceiling Price.
h. For cost reimbursable task orders, the Corporation shall not request or
require Contractor to perform work or incur costs which, when aggregated with
all amounts previously paid by the Corporation hereunder, and amounts obligated
to be paid by the Corporation under the termination provisions of this Contract
would exceed a Task Order Ceiling Price without first increasing the Task Order
Ceiling Price. Contractor shall promptly notify the Buyer in writing whenever it
expects that the costs chargeable to the Corporation in the next thirty
(30) days, when added to all such costs previously incurred and charged or
chargeable to the Corporation, will exceed seventy-five percent (75%) of a Task
Order Ceiling Price. Such notice shall set forth the estimated amount of
additional funds required to complete the Services hereunder. Except for an
equitable adjustment made in connection with a Contract modification under the
terms of this Contract, the Corporation shall not be obligated to increase the
Task Order Ceiling Price.
     i. TECHNICAL REPRESENTATIVE. The Corporation’s Technical Representative,
with overall responsibility for coordinating work under this Contract is *****.
In addition, the Corporation may designate a specific Technical Representative
in each Task Order.
III. PERIOD OF PERFORMANCE (Applicable to all Stages)
     This Contract shall be effective when fully executed by both parties and
shall remain in effect through December 31, 2012 or through completion of the
manufacture of Centrifuge Assemblies and Spares in Stage III.
IV. TERMS AND CONDITIONS (Applicable to all stages)
     This Contract constitutes the agreement between the Contractor and the
Corporation, subject to and including the terms set forth herein and in Terms
and Conditions (centrifuge) as modified hereby incorporated into this contract.
V. TRAVEL EXPENSES (Applicable to All stages)
     a. The Corporation shall reimburse the Contractor’s actual costs incurred
plus G&A and fee under this Contract for transportation, lodging, meals, and
incidental expenses in accordance with Attachment A and subject to other
limitations as provided in this Contract.

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VI. DIRECT PRODUCTIVE LABOR HOUR AND OTHER DIRECT COSTS. (Applicable to All
stages)
     a. Direct Productive Labor Hour (abbreviated “DPLH”) means the hours
expended by Contractor that are directly attributable to the performance of
Services by Contractor.
     b. The DPLH rates include all charges for Contractor’s direct labor,
overhead plus all applicable Federal, State and local taxes. General and
administrative expenses (G&A) and fee will be billed separately. All overtime
must be coordinated with the Technical Representative. The Corporation shall not
separately reimburse Contractor for any costs deemed to be included in the DPLH
rates. Contractor shall not receive a premium for any time spent traveling.
Salaried personnel who work in excess of eight hours per day or 40 hours per
week shall be charged their actual hours worked, and their hourly rate will be
adjusted downward to reflect the additional hours.
     c. Other Direct Costs (“ODCs”). Direct costs (other than those included in
the DPLH rates), approved in advance by the Technical Representative and
actually reasonably incurred by Contractor for equipment, materials, supplies,
travel, relocation costs and commercial courier services (e.g., Federal Express
or DHL) necessary for the performance of the Services or delivery of the
Deliverables and Materials (“Other Direct Costs” or “ODCs”) shall be reimbursed
by the Corporation at Contractor’s actual cost plus G&A and fee. Unless
otherwise agreed in writing in advance by the Corporation, ODCs shall be limited
to: (i) fees charged by a third party database services for searches of its
electronic databases; (ii) long-distance telephone calls placed by Contractor;
(iii) photocopying; (iv) employing subcontractors and consultants and
(v) purchasing equipment and materials (subject to any consent required under
the Task Orders), and (vi) costs of operating and maintaining facilities
provided by USEC under this agreement.
     d. Unless otherwise agreed in writing in advance by the Corporation, the
following costs are not within the definition of ODCs, and will not be
reimbursed as separate ODC line items, although such costs other than non-travel
related meals are allowable as part of overhead costs, by the Corporation
regardless of whether such costs are incurred in connection with the performance
of the Services: (i) secretarial, word-processing, library or other
administrative costs or services; (ii) local telephone charges; (iii) charges
for receipt by Contractor of faxes, documents or packages; and (iv) meals,
unless taken by an employee of Contractor in connection with travel away from
the office in which that employee normally works.
     e. Any reimbursement permitted under this Section for ODCs shall be
determined by the Corporation based upon supporting documentation submitted by
Contractor in accordance with Section IX.g., below and any reimbursement
policies provided to Contractor by the Corporation.
VII. EMPLOYEE PROTECTION
     a. Section 211 of the Energy Reorganization Act of 1974, as amended (the
“ERA”), or 10 CFR Section 70.7 of the NRC regulations (applicable to
item/services provided in support USEC Inc’s

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centrifuge lead cascade or production facility) or 10 CFR Part 708 of the DOE
regulations (applicable to item/services provided in support of USEC Inc’s
centrifuge demonstration project), implementing Section 211, as applicable
applies to the performance of Work under this Contract. Contractor acknowledges
its obligation to comply with the requirements of Section 211 of the Energy
Reorganization Act of 1974, as amended (the “ERA”), 10 CFR Section 10.7 of the
NRC regulations or 10 CFR Part 708 of the DOE regulations implementing
Section 211.
     b. In the event that an employee of Contractor, or an employee of any
subcontractor, files a complaint with the United States Department of Labor (the
“DOL”) alleging that Contractor, or any of its subcontractors, violated the
requirements of Section 211 with respect to such employee while he or she was
performing Services in connection with this Contract, Contractor shall promptly
notify the Buyer of the filing of such complaint, and shall keep the Buyer
apprised of the status of the complaint itself and all material developments in
any DOL or judicial proceedings related to the complaint.
     c. In the event that Contractor becomes aware of an allegation of
retaliation or safety raised to the NRC or DOE, Contractor shall promptly notify
the Buyer of the filing of such allegation, and shall keep the Buyer apprised of
the status of the allegation itself and all material developments in any NRC,
DOE or judicial proceedings related to the allegation.
     d. Contractor further agrees to indemnify and hold the Corporation harmless
against any and all costs, losses, claims, damages, liabilities, civil penalties
and expenses, including reasonable attorneys’ fees, imposed upon or incurred by
the Corporation in connection with (A) any DOL proceeding brought against the
Corporation by an employee or former employee of Contractor, or any
subcontractor of Contractor, based upon Contractor’s or its subcontractor’s
actual or alleged violation of Section 211 with respect to such employee or
former employee, (B) any investigation or enforcement action by the NRC based
upon such an actual or alleged violation of Section 211, 10 CFR Section 70.7 or
10 CFR Part 708; and (C) any civil action brought against the Corporation based
upon Contractor’s, or its Subcontractor’s, actual or alleged violation of
Section 211. Such costs, losses, claims, damages, liabilities, civil penalties
and expenses, including reasonable attorney’s fees, shall not be recoverable
from the Corporation under any other provisions of this Contract.
     e. Contractor shall notify the Buyer if any Contractor employee is subject
to an NRC or DOE Order or enforcement action. The Corporation reserves the right
to determine that the employee may not be used in the performance of this
Contract.
VIII. SUBCONTRACTS AND CONSULTANTS. (Applicable to Stages I and II)
     a. Major Purchases. The Contractor must receive written approval from the
Buyer, prior to: 1) issuing a solicitation if the purchase is estimated to
exceed $100,000; and commitment of USEC funds for purchases greater than
$100,000. The Contractor must provide the following to the USEC Buyer and
Technical Representative:
          (i) For solicitations:
          (A) An explanation of the need and purpose for the purchase, including
the estimated cost.
          (B) A copy of the solicitation, if requested by USEC.
          (ii) For commitments:

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          (A) A copy of the proposal for the selected source, including schedule
for delivery and contract terms and conditions governing the purchase.
          (B) A description of the source selection process, including bid
summaries, evaluation criteria and evaluation results, as applicable.
          (C) A schedule of Termination Liability by calendar quarter, from the
anticipated date of award through completion of delivery or performance.
          (D) A copy of the purchase order or contract, if requested by USEC.
     b. Contractor shall ensure that all subcontracts placed under the Contract
(and all lower-tier subcontracts) include at least (i) the same requirements as
to quality, performance and protection of information and property as are
imposed on Contractor by the Contract; (ii) any requirements imposed by
applicable law and regulation; (iii) the same requirements to maintain the
confidentiality of USEC Proprietary Information, and provide and protect the
intellectual property rights of the Corporation as are imposed on contractor by
the Contract; and (iii) any other provisions in this Contract required to be
included in such subcontracts including, but not limited to, the following
articles of the General Terms and Conditions if applicable: Article 6 (Key
Personnel), Article 34(Security of Classified Information and Controlled Areas),
Article 5(Standard of Performance), Article 32 (Confidentiality, Article 39
(Compliance With Nuclear Safety and Safeguards and Security Requirements.
     c. The Contractor further agrees to pass the requirements imposed by this
Section to its subcontractors by including a provision similar to this section
in all Subcontracts for the performance of Services in connection with the Task
Orders.
     d. Subcontractor Conflicts of Interest. Contractor shall ensure that
subcontracts include protection against Conflicts of Interest acceptable to the
Corporation. If required by the Corporation, Contractor shall cause
subcontractors to execute agreements with the Corporation for the protection of
USEC Proprietary Information, prior to engaging subcontractors in work under the
Task Orders.
IX. ALLOWABLE COST (Applicable to All stages)
     a. For the purpose of reimbursing allowable costs (except as provided in
subsection b of this Section, with respect to pension, deferred profit sharing,
and employee stock ownership plan contributions), the term “costs” includes only
–
          (i) Those recorded costs that, at the time of the request for
reimbursement, the Contractor has paid by cash, check, or other form of actual
payment for items or services purchased directly for the contract;
          (ii) When the Contractor is not delinquent in paying costs of contract
performance in the ordinary course of business, costs incurred, but not
necessarily paid, for —

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          (A) Supplies and services purchased directly for this Contract and
associated financing payments to subcontractors, provided payments determined
due will be made—
               (1) In accordance with the terms and conditions of a subcontract
or invoice; and
               (2) Ordinarily within 30 days of the submission of the
Contractor’s payment request to the Corporation;
          (B) Materials issued from the Contractor’s inventory and placed in the
production process for use on this Contract;
          (C) Direct labor based on actual hours worked at an effective hourly
rate;
          (D) Direct travel;
          (E) Other direct in-house costs; and
          (F) Properly allocable and allowable indirect costs according to the
contractor’s normally accepted practices, as shown in the records maintained by
the Contractor for purposes of obtaining reimbursement under this Contract; and
     b. Accrued costs of Contractor contributions under employee pension plans
shall be excluded until actually paid unless—
          (i) The Contractor’s practice is to make contributions to the
retirement fund quarterly or more frequently; and
          (ii) The contribution does not remain unpaid 30 days after the end of
the applicable quarter or shorter payment period (any contribution remaining
unpaid shall be excluded from the Contractor’s indirect costs for payment
purposes).
     c. Notwithstanding the audit and adjustment of invoices or vouchers under
subsection f of this Section, allowable indirect costs under this Contract shall
be obtained by applying indirect cost rates established in accordance with this
Section.
     d. Final indirect cost rates.
          (i) Final annual indirect cost rates and the appropriate bases for
each of the Contractor’s fiscal years during which Work was performed under this
Contract shall be established in accordance with the contractor’s normally
accepted practices.
          (ii) The Contractor and the Buyer shall execute a written
understanding setting forth the final indirect cost rates. The understanding
shall specify the agreed-upon final annual indirect cost rates, the bases to
which the rates apply, the periods for which the rates apply, and any

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specific indirect cost items treated as direct costs in the settlement. The
understanding shall not change any contract obligation, or specific cost
allowance or disallowance provided for in this Contract. The understanding is
incorporated into this Contract upon execution.
          (iii) Within 120 days after settlement of the final annual indirect
cost rates for the Contractor’s fiscal year in which is Contract is completed,
Contractor shall submit a completion invoice or voucher to reflect the settled
amounts and rates.
               e. Billing rates. If necessary, the Contractor shall invoice
using provisional rates, as may be amended from time-to-time by the Contractor.
Adjustment from provisional rates to final rates for costs other than overhead
and G&A shall be made on the first invoice following closing of Contractor books
for the prior fiscal year. Adjustment from provisional rates to final rates for
overhead shall be made on the first invoice after incurred costs are determined.
Adjustment from provisional rates to final rates for G&A shall be made on the
first invoice following negotiations of final rates with the BWXT Services, Inc.
cognizant government representative (i.e., “CACO”).
     f. Audit. At any time or times before final payment, the Buyer may have the
Contractor’s invoices or vouchers and statements of cost audited. Any payment
may be —
          (i) Reduced by amounts found by the Buyer not to constitute allowable
costs; or
          (ii) Adjusted for prior overpayments or underpayments.
Corporation’s audit rights shall be limited to BWXT Clinch River LLC.
Contractor’s G&A cost will be as finally determined by the CACO.
     g. Final payment.
          (i) Upon approval of a completion invoice or voucher submitted by the
Contractor in accordance with subsection d (iii) of this section, and upon the
Contractor’s compliance with all terms of this Contract, the Corporation shall
promptly pay any balance of allowable costs and that part of the fee (if any)
not previously paid.
          (ii) The Contractor shall pay to the Corporation any refunds, rebates,
credits, or other amounts (including interest, if any) accruing to or received
by the Contractor, to the extent that those amounts are properly allocable to
costs for which the Contractor has been reimbursed by the Corporation. Before
final payment under this Contract, the Contractor and each assignee whose
assignment is in effect at the time of final payment shall execute and deliver:
               (A) An assignment to the Corporation, in form and substance
satisfactory to the Buyer, of refunds, rebates, credits, or other amounts
(including interest, if any) properly allocable to costs for which the
Contractor has been reimbursed by the Corporation under this Contract; and

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               (B) A release discharging the Corporation, its officers, agents,
and employees from all liabilities, obligations, and claims arising out of or
under this Contract, except —
                    (1) Specified claims stated in exact amounts or in estimated
amounts when the exact amounts are not known;
                    (2) Claims (including reasonable incidental expenses) based
upon liabilities of the Contractor to third parties arising out of the
performance of this Contract; provided, that the claims are not known to the
Contractor on the date of the execution of the release, and that the Contractor
gives notice of the claims in writing to the Buyer within 1 year following the
release date or notice of final payment date, whichever is earlier.
X. COST PLUS FIXED FEE (Applicable to STAGE I)
     a. General. The Corporation shall pay the Contractor for performing Stage I
of this Contract its allowable costs plus a fixed fee. During Stage I,
Subcontractor shall receive a fixed fee determined for each Task Order. The fee
shall be *****% of the target cost determined as described in section II.(c).
The fixed fee will be provisionally billed with each invoice on the basis of
*****% of the total cost invoiced. Upon issuance of the final billing under the
contract, any remaining balance of the fixed fee will be billed.
     b. Equitable adjustments. When the work under Stage I of this Contract is
increased or decreased by a modification to Task Orders or when any equitable
adjustment in the cost is authorized under any other Section, equitable
adjustments in the cost and fixed fee as appropriate shall be stated in a
modification to the Task Order.
     c. Task Order modification. The total allowable cost and the adjusted fixed
fee determined as provided in this Section shall be evidenced by a modification
to the Task Order signed by the Contractor and Buyer.
XI. COST PLUS INCENTIVE FEE (Applicable to STAGE II)
     a. General. The Corporation shall pay the Contractor for performing this
Contract its allowable costs plus a fee determined as provided in this Contract.
During Stage II Subcontractor’s target fee shall be ***** percent (*****%) of
Subcontractor’s target cost. Fee will be provisionally billed with each invoice
on the basis of *****% of the total cost invoiced. Upon issuance of the final
billing under the contract and determination of the incentive fee earned,
provisional fee invoiced will be reconciled and an adjustment, positive or
negative, will be added to the final invoice. Subcontractor’s target cost for
Stage II shall be subject to adjustment as a result of changes to the
Subcontract pursuant to the changes clause.
     b. Target cost and target fee. The target cost and target fee under Stage
II of this Contract will be determined at the individual Task Order level and
are subject to adjustment in accordance with subsection d of this Section.

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     c. Equitable adjustments. When the work under Task Orders is increased or
decreased by a modification to the Task Order or when any equitable adjustment
in the target cost is authorized under any other Section, equitable adjustments
in the target cost, target fee, minimum fee, and maximum fee, as appropriate,
shall be stated in a modification to the Task Order.
     d. Fee payable.
          (i) The fee payable under this Contract shall be the target fee
increased: (i) by ***** for every dollar that the target cost is less than the
target cost; or decreased by ***** for every dollar that the target cost exceeds
the target cost. In no event shall the fee be greater than ***** percent or less
than ***** percent of the total target cost.
          (ii) If this Contract is terminated in its entirety, the portion of
the target fee payable shall not be subject to an increase or decrease as
provided in this Section. The termination shall be accomplished in accordance
with other applicable Sections of this Contract.
          (iii) For the purpose of fee adjustment, target cost may be adjusted
by mutual agreement between the Buyer and the Contractor based on agreed scope
changes or other negotiated changes.
          (iv) Fee will be provisionally billed with each invoice on the basis
of *****% of the total cost invoiced. Such provisional billing rate will be
reviewed quarterly and adjusted up or down based on projected target cost. Upon
issuance of the final billing under Stage II of this contract and determination
of the incentive fee earned, provisional fee invoiced will be reconciled and an
adjustment, positive or negative, will be added to the final invoice.
          (v) The Corporation and the Contractor agree to pursue development of
award fee incentives for items such as schedule, safety, regulatory performance,
etc. to be negotiated and mutually agreed for Stage II.
     e. Contract modification. The target cost and the adjusted fee determined
as provided in this Section shall be evidenced by a modification to the Task
Order signed by the Contractor and Buyer.
XII. TARGET PRICE WITH INCENTIVE FEE (Applicable to STAGE III)
     a. General. The Corporation shall pay the Contractor for performing Stage
III of this Contract its target costs plus a fee determined as provided in this
Contract; provided, that in no event shall the total final cost exceed the
ceiling cost as determined below. The target fee for Stage III will be *****% of
the target cost, as adjusted.
     b. Ceiling Cost, Target cost and target fee. The ceiling cost, target cost
and target fee for Stage III will be determined at the Task Order level and are
subject to adjustment in accordance with subsections d and e of this Section.

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     c. Equitable adjustments. When the work under Task Orders is increased or
decreased by a modification to the Task Order or when any equitable adjustment
in the target cost is authorized under any other Section, equitable adjustments
in the target cost, ceiling cost, target fee, minimum fee, and maximum fee, as
appropriate, shall be stated in a modification to the Task Order.
(d) The Ceiling cost will be the target cost, as adjusted, multiplied by a
factor of *****. Total payments during Stage III will not be greater than the
ceiling cost.
     e. Fee payable.
          (i) The fee payable under this Contract shall be the target fee
increased by ***** for every dollar that the total allowable cost is less than
the target cost or decreased by ***** for every dollar that the total allowable
cost exceeds the target cost. In no event shall the fee be greater than *****
percent of the target cost or less than *****.
          (ii) If this Contract is terminated in its entirety, the portion of
the target fee payable shall not be subject to an increase or decrease as
provided in this Section. The termination shall be accomplished in accordance
with other applicable Sections of this Contract.
          (iii) For the purpose of fee adjustment, target cost may be adjusted
by mutual agreement between the Buyer and the Contractor based on agreed scope
changes or other negotiated changes.
          (iv) Fee will be provisionally billed with each invoice on the basis
of *****% of the total cost invoiced. Such provisional billing rate will be
reviewed quarterly and adjusted up or down based on projected target cost. Upon
issuance of the final billing under Stage III of this contract and determination
of the incentive fee earned, provisional fee invoiced will be reconciled and an
adjustment, positive or negative, will be added to the final invoice.
          (v) The Corporation and the Contractor agree to pursue development of
award fee incentives for items such as schedule, safety, regulatory performance,
etc. to be negotiated and mutually agreed for Stage III.
     e. Contract modification. The target cost and the adjusted fee determined
as provided in this Section shall be evidenced by a modification to the Task
Order signed by the Contractor and Buyer.
XIII. LIQUIDATED DAMAGES (Applicable to Stage 3)
Provisions for Liquidated Damages are based on Contractor providing Deliverables
to the Piketon, OH facility in accordance with the mutually agreed upon
Production/Delivery Schedule. Damages assessed pursuant to this clause will
accrue commencing on the second consecutive business day that the Contractor
fails to provide Deliverables in accordance with the Production/Delivery
Schedule as follows:

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(i.)   In the event that the Contractor fails to deliver the required quantity
of Deliverables for between two and one-half and four consecutive business days,
the Contractor shall be assessed Liquidated Damages in the amount of $***** per
business day.

(ii.)   In the event that the Contractor fails to deliver the required quantity
of Deliverables for greater than four consecutive business days, the Contractor
shall be assessed Liquidated Damages in the amount of $***** per business day.

(iii.)   The total maximum Liquidated Damages that will be assessed to the
Contractor during the term of this contract shall be limited to $***** (*****
dollars).

(iv.)   For purposes of determining Liquidated Damages under this clause,
delivery shall be defined as delivery of Deliverables at the USEC facility in
Piketon, OH in accordance with the baseline component Production/Delivery
Schedule mutually agreed to between USEC and the Contractor prior to the
commencement of Stage 3.

(v.)   It is understood that the assessed value of Liquidated Damages will be
prorated based on the degree to which the Contractor fails to provide the
requisite number of Deliverables. (e.g. During full production, when the
Production/Delivery Schedule is established as 20 Deliverables per business day,
5 percent of the applicable daily penalty will be assessed for each Deliverable
not provided to the Piketon, OH facility in accordance with Production/Delivery
Schedule).

(vi.)   It is understood that the Contractor shall not be assessed Liquidated
Damages when the delay in delivery or performance is due to a Force Majuere,
design deficiencies, design changes, schedule changes not mutually agreed to
between USEC and the Contractor, delays in obtaining any required USEC
approvals, unavailability of suitable shipping containers, impacts emanating
from labor disputes not caused by the Contractors failure to act in good faith,
or transportation related delays that are beyond the reasonable responsibility
or control of the Contractor. In the course of meeting the Production/Delivery
Schedule, Contractor shall be permitted to use all reasonable approaches, such
as maintaining its own inventory at the Contractors facility.

XIV. NOTICES. (Applicable to ALL STAGES)
     Any notice, request, demand, claim or other communication related to this
Contract shall be in writing and delivered by hand or transmitted by telecopier,
registered mail (postage prepaid) or overnight courier to the other Party at the
following numbers and addresses:

     
Contractor:
  *****
 
  BWXT CR, LLC
 
  Care of:
 
  BWXT Technologies
 
  Lynchburg, VA, 24505
 
  Note: address to be updated when new office is established
 
   
USEC:
  *****

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  757 Boeing Road
 
  Oak Ridge, TN 37830

XV. Guarantees. (Applicable to ALL STAGES
Upon assignment of this contract to BWXT Clinch River, LLC pursuant to Article 3
of the General Terms and Conditions, BWXT Services, Inc. hereby guarantees the
performance of all of the obligations of its wholly owned subsidiary BWXT,
Clinch River, LLC under this Contract including any obligations under any task
orders issued under the Contract and any amendments or modifications of the
Contract. In the event, USEC Inc. assigns the Contract to an affiliate pursuant
to Article 3, USEC, Inc. hereby guarantees the performance of all of the
obligations of its affiliate under this Contract including any obligations under
any task orders issued under the Contract and any amendments or modifications of
the Contract.

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CONTRACT NO. 723886
Attachment A TRAVEL
A. Air Travel
Air travel is authorized only when a less expensive means of accomplishing the
business objective is unavailable (i.e., telephone, conference calls, video
conferencing, etc). Reservations must be made as far in advance as possible in
order to take advantage of any advance booking discounts which may be available.
The lowest cost air routing, consistent with reasonable time and cost
considerations, shall be used. As a minimum, the Lowest Logical Airfare (*as
defined below) which is offered by the Company’s designated travel agencies at
the time of the booking shall be used, without regard to the airline involved or
any airline-sponsored bonus/benefit programs to which the employee may belong.
The travel agent will offer the minimum Lowest Logical Airfare. *The minimum
Lowest Logical Airfare is the lowest available airfare within the following
parameters:
Departures and arrivals should be within two hours of the desired time.
There should be no more than one interim stop each way (domestic).
There should be no scheduled lay-over period which exceeds two hours for
domestic or four hours for international flights.
The cost of the round-trip airfare should provide savings of at least $100.
Employees are required to clearly identify to the travel agent any additional
parameters which may be used to identify the lowest available airfare(e.g., the
employee’s schedule may be flexible enough to allow him/her additional
considerations, such as, staying over a Saturday night; accepting the cheapest
airfare regardless of transit time or en route stops; accepting a non-refundable
ticket; etc.).
Employees shall be required to obtain written authorization from their
supervisors and/or higher management prior to making reservations for air travel
with costs exceeding the lowest logical airfare.
B. CLASS OF TRAVEL
All employees shall be required to use economy class travel for domestic and
business class (or economy class when business class is unavailable) for
international travel, except as follows:

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Elected Vice Presidents and above, including the Corporate Treasurer and
subsidiary heads, may use first class air travel accommodations for both
domestic and international travel.
Others designated by the CEO may use first class air travel accommodations for
international travel only.
When two employees must travel together on the same aircraft and only one of
them is eligible to fly first-class, the non-eligible employee may be eligible
to fly first class if such a seating arrangement is necessary to enable the two
employees to conduct business during the flight. A written request from the
employee who is eligible to fly first class must be issued to the travel agency
prior to booking the flight for the non-eligible employee. A copy of the request
must be attached to the employee’s expense account in order to receive
reimbursement for the upgrade in airfare.
An employee who is required to travel with a customer shall be eligible to fly
first class if the customer has arranged to fly first class and it is necessary
for the two to conduct business during the flight. The employee must obtain
written approval from his/her Division Head or higher management prior to making
any first-class air travel reservations for this reason. A copy of the written
approval must be attached to the employee’s expense account in order to receive
reimbursement for the first class airfare.
Hourly employees shall use only economy class air travel accommodations for both
domestic and international air travel.
C. AIR TRAVEL RESTRICTIONS
Not more than three (3) senior executives from within the corporate staff or any
operating unit, division or department within the Company shall travel on the
same aircraft at the same time.
Executive, managerial, or technical employees from within the corporate staff or
the same operating unit, division, or department of the Company shall not travel
on the same aircraft if the loss of such personnel would seriously affect or
hamper the operations of the Company.
D. COMMUNICATIONS
Business-related communication expenses that are substantiated by appropriate
receipts shall be reimbursed. All communications should be conducted by the most
efficient and least expensive means available. Company-supplied AVN voice
network phone cards or calling cards should be used when and where available.
Calls should not be billed to hotel rooms when a Company-supplied calling card
can be used. Hotel FAX facilities should be used only when essential. Special
discretion should be exercised in frequency and length of phone calls home.
Cellular phones are to be used when no other phones are available.
E. CHANGES IN TRAVEL ARRANGEMENTS

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When changes in travel planning require either cancellation or revision of
airline tickets, the Company’s designated travel agent must be notified
immediately so that the necessary changes can be made. (The Company’s designated
travel agent shall provide travelers with telephone numbers which can be used to
obtain the agency’s assistance on weekends and after hours.) Travel changes made
en route which do not require fare changes can normally be handled directly at
the airline ticket counter.
F. AIRCRAFT CHARTERING
Corporate policy and procedure 1222-003 shall be followed for all matters
relative to the use of aircraft charter services and the use of Company
aircraft, respectively.
Any aircraft charter shall be approved by the Corporation in advance of proposed
travel.
G. Reserved
H. INCIDENTAL/MISCELLANEOUS TRAVEL EXPENSES
The following are examples of incidental expenses which are reimbursable when
directly related to business travel:

  •   Tips for porters, bellhops, hotel maids, waiters, etc. (must be reasonable
for the services rendered) – in the Federal Travel Regulations, these are
reimbursed as part of Meals & Incidentals (M&I) rate     •   Tips for taxis are
not incidental expenses but are reimbursed as part of ground transportation
expenses.     •   Laundry/dry cleaning/valet for trips which exceed 7 days in
duration – in M&I rate     •   Parking     •   Toll fees     •   Currency
conversions     •   Traveler cheque fees     •   Telephone (See Statement I.D
above. Air and car phone usage is discouraged.)     •   Passport and visa
charges     •   Immunizations required for the trip

The Following are examples of incidental expenses which are not reimbursable:

  •   Baby-sitter fees     •   Personal toiletries and medicines     •  
Barber/hair stylist     •   Traffic fines     •   Luggage, briefcases, luggage
carriers, etc.     •   Personal injury insurance     •   Magazines, books,
newspapers     •   Lost or stolen personal property     •   Travel accident
insurance     •   Medical expenses/Prescriptions

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  •   Flowers and gifts     •   Contributions     •   Lawn Care Services while
on Business     •   Dog Kennel Fees

NOTE: The Company maintains travel accident insurance which provides coverage
for all employees traveling on Company business. Reimbursement shall not be made
for additional travel accident insurance purchased by the employee.
I. LODGING
All reservations for lodging during business travel must be made through the
Company’s designated travel agent. The Company’s travel agent has negotiated
preferred rates with certain hotels, and employees are required to use these
hotels whenever available. Accommodations should be reasonably priced (follow
the Federal Travel Regulations lodging rates wherever possible).
Employees shall be responsible to ensure that their hotel cancellations are
made. “No-show” charges are not reimbursable unless they are for reasons beyond
the traveler’s control.
J. MEETINGS AND GROUP TRAVEL
The Company’s designated travel agents are the sole authorized sources for
arrangements relative to group or meeting travel. Any department which is
planning to sponsor group or meeting travel involving ten (10) or more
participants should identify the event to the designated travel agency to ensure
that available discounts are obtained and applied.
K. MEALS AND ENTERTAINMENT
Meal expenses while traveling shall be reasonable and reflect a sense of equity
on the part of the employee. It is expected that meal costs will be consistent
with the geographic area and/or the occasion or event. Follow the Federal Travel
Regulations for maximum allowable M&I rates. Tips for meals are included in the
expense of meals and should not exceed 15%, unless charged because of size of
party. Any daily total of meals greater than the appropriate FTR rate will be
reported to the employee’s operating unit or cost center manager when determined
excessive. (Refer to your specific division procedure for details)
Business meals and entertainment at restaurants, night clubs, golf clubs and
courses, ball games, etc., shall be reimbursable only if they are directly
related to the active conduct of business, or if the meal or entertainment
precedes or follows a substantial, bona fide business discussion. The employee
must attend the business meal or entertainment with a customer(s) or vendor(s)
in order for the expenditure to be reimbursable.
No reimbursements shall be made for expenses relative to meals and entertainment
for local fellow employees, except as follows:

  •   Meals and entertainment which has been organized under an approved
employee relations activity.

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  •   Meals for local employees when work extends beyond normal work hours if
the business involved cannot be conducted during the course of the normal
working day.     •   Meals for employees at local Company-sponsored training
programs and seminars, at the discretion of local management.

Member of employee’s families are included as a Company expense only when a
customer has members of his family present, when the Company requests that a
family member be present, or when family members are included in a “Special
Event”.
L. USE OF PERSONAL CARS
Employees may wish to utilize their personal cars for business travel when other
transportation is unavailable or less economical. Mileage for the use of
personal cars for business purposes shall be reimbursed in accordance with the
rate which is periodically announced by the Director, Corporate Materials and
Transportation. Mileage to and from the airport is only permissible beyond
normal mileage to and from work.
M. RENTAL CARS
Cars shall be rented by employees only when other means of transportation are
unavailable, more costly, or impractical. The use of a rental car must be
justified as a business need and not as a matter of personal convenience. A
mid-size car is required, unless it will not meet the requirements of the task.
All car rentals shall be arranged through the Company’s designated travel agent
(see I.C. above). The Company’s preferred suppliers shall be used whenever
possible. In the event the preferred suppliers are unable to provide a car, the
employee may obtain a car from another available rental car agency (or rental
source), on a short-term basis. (See Corporate Policy 1222-001 for further
information on the Company’s Rental Car Program.)
The employee shall be responsible to refuel the rented vehicle before returning
it to the rental supplier in order to minimize the refueling cost. The use of
the “Fuel Purchase Option” offered by some rental car companies is generally
more expensive than refueling the vehicle prior to its return. This option
should not be selected.
The cost of Collision Damage Waiver and Loss Damage Waiver agreements may or may
not be reimbursable, dependent upon several variables (e.g., the country(ies)
where travel is to take place, the existence of any coverages which may be
provided via credit card programs, etc). The Company’s designated travel agent
is provided specific instructions relative to this subject by the Director,
Corporate Materials and Transportation, and employees should inquire as to
whether they will need to obtain these coverages prior to travel.
In the event of an accident, the employee shall be responsible to report the
event to both the rental car agency (in accordance with the rental agreement),
and either the Company’s designated travel agent, the employee’s Department
Head, or the Corporate Transportation Department.

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USEC PROPRIETARY INFORMATION
CONTRACT NO. 723886
N. TAXI AND OTHER LOCAL TRANSPORTATION
The cost of taxi service to and from places of business, hotels, airports or
railroad stations in connection with business activities is reimbursable. Taxi
use is authorized only when a more economical service (e.g., hotel vans,
shuttles, etc.) is not available. Employees are encouraged to utilize public
transportation whenever feasible.
O. COMBINED BUSINESS AND PERSONAL TRAVEL
When personal travel is combined with business travel, the employee shall be
reimbursed for the lowest logical fares for only the business portion of the
trip, with the amount determined as of the date ticketed. Details of personal
travel must be identified separately at the time of booking, as well as on the
employee’s expense account report.
All combined business and personal travel shall be approved by the Corporation
in advance of proposed travel.
P. SPOUSAL TRAVEL
Spousal travel shall be handled in accordance with Corporate Policy 1222-010.
The presence of an employee’s spouse may be appropriate or necessary at certain
meetings, conferences or other business-related functions. In such cases, the
Company will bear the travel and living expenses of the employee’s spouse.
Employee’s requesting spousal accompaniment on business travel must obtain
advance approvals from the appropriate Division Head as well as the President of
BWXT (use form ADM No. 827, Employee Spousal Travel Authorization which includes
each spouse who will traveled, their travel destination, the reason for the
trip, and the total cost associated with the spouse).
All spousal travel shall be approved by the Corporation in advance of proposed
travel.
Q. TRAVEL ARRANGER INCENTIVE PROGRAMS/SECRETARY CLUBS, ETC.
The Company’s designated travel agent shall be utilized for all business-related
travel arrangements. No employee shall accept cash, free or discounted airline
tickets, free or discounted hotel rooms, or any other offering of value in
exchange for their services in arranging Company-related travel.
R. TRAVEL CLUBS
Due to the nature of our business and the amount of travel incurred by
employees, we will allow the purchase of one airline club membership for
employees that are direct reports to the General Manager or travel greater than
50,000 air miles a year if approved by the Division Head. Any other expenses
associated with any form of travel airline club, or rental car expediting
service program (other than those arranged by the Company) shall not be
reimbursable.

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S. UPGRADES USING FREQUENT TRAVELERS AWARDS OR OTHER FORMS OF PAYMENT
Upgrades are prohibited when the upgrade results in a higher cost to the
Company, other than would have occurred in the absence of the upgrade.
T. WEEKEND TRAVEL
If the employee elects to achieve a lower overall trip cost through the use of
restricted, discounted airfares by extending the trip for a certain duration
(i.e., stay over a Saturday night or both nights of a weekend), the Company
shall reimburse hotel and reasonable meal expenses for the extended stay. These
expenses shall not exceed the amount of savings realized from the discounted
airfare.

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USEC PROPRIETARY INFORMATION
CONTRACT NO. 723886
TABLE OF CONTENTS

          Heading   Paragraph
Applicable Law
    22.  
Assignment
    3.  
Code of Conduct
    40.  
Compliance with Laws
    23.  
Compliance with Nuclear Safety and Safeguards and Security Requirements
    39.  
Confidentiality
    32.  
Conflict of Interest
    8.  
Contract Management
    18.  
Contract Modifications
    19.  
Contractor Representations
    4.  
Contractor Status
    28.  
Corporation Rules and Regulations
    38.  
Definitions
    1.  
Delivery
    7.  
Dispute Resolution
    20.  
Entire Agreement
    2.  
Furnished Property
    24.  
Hazardous Material and Asbestos
    13.  
Headings
    27.  
Indemnification
    15.  
Inspection and Rejection
    9.  
Insurance
    41.  
Intellectual Property
    33.  
Key Personnel; Workforce
    6.  
Limitation of Liability
    11.  
Materials and Heat Treatment
    14.  
Miscellaneous
    36.  
Non Waiver or Default
    25.  
Payment
    16.  
Precedence
    31.  
Preexisting Conditions
    42.  
Price-Anderson Indemnification
    37.  
Remedies for Breach of Warranty
    11.  
Security of Classified Information and Controlled Areas
    34.  
Severability
    30.  
Standards of Performance
    5.  
Survival
    26.  
Taxes
    17.  
Termination and Suspension of This Contract
    21.  
Third Party Beneficiaries
    29.  
Title and Risk of Loss
    12.  
Waiver for Claims Due to Nuclear Incidents
    35.  
Warranties
    10.  
Workforce
    6.  

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USEC PROPRIETARY INFORMATION
CONTRACT NO. 723886
1. DEFINITIONS.
As used throughout this Contract, the following terms, whether in the singular
or plural, when used with initial capitalization, shall have the meanings set
forth below:
     (a) The term “Buyer” means the Corporation’s Procurement Director or
his/her designated Procurement representative.
     (b) The term “Conflict Of Interest” means that, because of other activities
or relationships with other persons (including, without limitation, competitors
of the Corporation) Contractor is unable or potentially unable to render
impartial assistance or advice to the Corporation, or Contractor’s objectivity
in performing under this Contract is or might be otherwise impaired.
     (c) The term “Contract” means the contractual agreement between the
Corporation and Contractor which includes (i) the terms and conditions herein,
(ii) any supplements to the terms and conditions herein agreed by the Parties,
(iii) any item descriptions, Specifications or Drawings incorporated herein or
attached hereto, and (iv) any instructions submitted to Contractor by Buyer in
connection with this Contract.
     (d) The term “Contract Price” means the total price for the Supplies set
forth on the face of the Contract and includes all applicable Federal, State and
local taxes and duties except for those set forth in Paragraph 18(a).
     (e) The term “Contractor” means the individual or business entity that has
entered into this Contract with the Corporation.
     (f) The term “Corporation” means USEC Inc.
     (g) The term “Corporation Facility” means any property or facility owned or
leased by the Corporation.
     (h) The term “Default” shall have the meaning ascribed to it in the
Paragraph entitled “Termination and Suspension of This Contract.”
     (i) The term “Deliverables” means the tangible product or products of the
Services including but not limited to Centrifuge Assemblies as more fully
described in applicable task orders.
     (j) The term “Drawings” means all the drawings, sketches, or maps
referenced in this Contract and also such supplementary drawings, sketches or
maps as the Buyer may issue from time to time.
     (k) The term “Force Majeure” shall have the meaning ascribed to it in the
Paragraph entitled “Termination and Suspension of This Contract.”
     (l) The term “Furnished Property” shall have the meaning ascribed to it in
the Paragraph entitled “Furnished Property”.
     (m) The term “Party” refers to the Corporation or the Contractor
individually and the term “Parties” refers to both the Corporation and the
Contractor collectively.
     (n) The term “Services” means the services described in the Statement of
Work to be provided/performed by Contractor.
     (o) The term “Specifications” means all the terms and stipulations
contained in the document entitled “Specifications” and includes those portions
known as “specific contract requirements” and such amendments, revisions,
deductions or additions as may be issued in writing, from time to time, by the
Buyer, pertaining to the quantities and qualities of the Supplies to be
furnished under this Contract.
     (p) The term “Statement of Work” or “SOW” means the description of the Work
to be performed by Contractor pursuant to this Contract attached and hereby
incorporated into the Contract. The Statement of Work may be a separate document
labeled “Statement of Work” or incorporated in the terms herein, or both.

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     (q) The term “Supplies” means any materials, components or goods required
to be furnished by Contractor in the performance of Services under this
Contract.
     (r) The term “Work” means the Services, Deliverables and Supplies.
2. ENTIRE AGREEMENT.
The whole and entire agreement of the Parties with respect to the subject matter
hereto, is set forth in this Contract; and the Parties are not bound by any
prior agreements, understandings or conditions other than as expressly set forth
herein. THIS CONTRACT IS LIMITED TO THE TERMS AND CONDITIONS SPECIFIED HEREIN,
ON THE FACE OF THE CONTRACT AND IN ANY ATTACHMENTS THERETO PROVIDED BY THE
CORPORATION OR SPECIFICALLY AGREED TO BY THE CORPORATION IN WRITING. THE
CORPORATION DOES NOT AGREE TO ANY PROPOSED ADDITION, ALTERATION OR DELETION OF
THESE TERMS. THIS CONTRACT CAN ONLY BE VARIED BY WRITTEN AGREEMENT SIGNED BY
BOTH PARTIES. ANY ACKNOWLEDGEMENT OF THIS CONTRACT SIGNED OR SUBMITTED BY
CONTRACTOR OR ANY OTHER STATEMENT OR WRITING OF CONTRACTOR SHALL NOT BE DEEMED
TO ALTER, ADD TO, OR OTHERWISE AFFECT THESE TERMS ABSENT THE BUYER’S WRITTEN
AGREEMENT.
3. ASSIGNMENT
It is understood that the Contractor will assign this contract to BWXT Clinch
River, LLC upon approval of Foreign Ownership Influence or Control (FOCI) for
BWXT Clinch River. Beyond this assignment, contractor may not assign this
Contract. The rights and obligations of Contractor under this Contract are
personal to Contractor and may not be delegated or subcontracted to any other
entity, in whole or in part, without the prior written consent of the
Corporation. The Corporation shall have the right to assign this Contract
including all rights, benefits and obligations hereunder to any affiliate of the
Corporation without Contractor’s consent.
4. CONTRACTOR’S REPRESENTATIONS.
     (a) Contractor’s Representations. The Contractor, and the person signing
this Contract on the Contractor’s behalf, each hereby make the following
representations to the Corporation:

  (i)   The Contractor is a merchant in the business of providing the Work
called for by this Contract and is not acting as an agent for any other person
or entity in providing such Work;

          (ii) The Contractor has all power and authority required to execute,
deliver and perform this Contract, and the Contractor has sufficient staff and
other resources to carry out its duties hereunder in a prompt, efficient and
diligent manner;
          (iii) The execution, delivery and performance of this Contract by the
Contractor and by the person signing this Contract on behalf of the Contractor
have been duly authorized by all necessary corporate or partnership action;

  (iv)   This Contract constitutes a legal, valid and binding agreement of the
Contractor, enforceable against the Contractor in accordance with its terms,
except as limited by bankruptcy, insolvency, receivership or other similar laws
affecting or relating to the rights of creditors generally;

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          (v) The Contractor has or will obtain, maintain and comply with all
licenses and permits necessary to legally and validly execute, deliver and
perform this Contract;
          (vi) The representations and certificates made in, or submitted with,
the Contractor’s proposal, have been duly authorized, made and executed and are
true and correct as if made herein and as of the date hereof; and
          (vii) The Contractor has the right to make all disclosures to, and
assignments of intellectual property rights to, the Corporation as required
under this Contract.
          (viii) Except as disclosed in an attached schedule, Contractor has no
Conflict of Interest in performing this Contract.
     (b) Corporation’s Representations. The Corporation, and the person signing
this Contract on the Corporation‘s behalf, each hereby make the following
representations to the Contractor:
          (i) The Corporation has all power and authority required to execute,
deliver and perform this Contract;
          (ii) The execution, delivery and performance of this Contract by the
Corporation and by the person signing this Contract on behalf of the Corporation
have been duly authorized by all necessary corporate or partnership action;

  (iii)   This Contract constitutes a legal, valid and binding agreement of the
Corporation, enforceable against the Corporation in accordance with its terms,
except as limited by bankruptcy, insolvency, receivership or other similar laws
affecting or relating to the rights of creditors generally;

          (iv) The Corporation has the right to make all disclosures including
intellectual property to the Contractor as may be required under this Contract.
(c) Condition. Each Party acknowledges that the it has relied on the truth,
accuracy and completeness of the foregoing representations in entering into this
Contract and thus such truth, accuracy and completeness shall be deemed a
condition to any right of payment or performance by each Party under this
Contract.
5. STANDARDS OF PERFORMANCE.
Contractor shall be responsible for the professional quality, technical accuracy
and coordination of all Work furnished by Contractor under this Contract. In
connection with the foregoing, Contractor shall expend its reasonable
professional efforts to perform the Work at the locations set forth in this
Contract (or in a Release issued under this Contract, if applicable) with all
due diligence, economy and efficiency, in accordance with the Contract;
generally accepted techniques and practices in Contractor’s industry; sound
management and technical practices; and applicable law and regulations.
6. KEY PERSONNEL; WORK FORCE REASSIGNMENTS.
     (a) Key Personnel Identified. The following personnel are each considered
to be a “Key Person” and shall be assigned by Contractor to perform the
Services.
*****            President and General Manager
*****           Operations
*****           Program Management
*****           ES&H & Performance Assurance
*****           Integrated Manufacturing

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*****       Business Management
     (b) Key Personnel Replacement. Contractor shall not remove any Key Person
from performing the Services without the prior written consent of USEC, and such
consent shall not be unreasonable withheld. Contractor shall provide to USEC at
least sixty (60) days notice to any Key Person becoming unavailable for a period
of one (1) month or longer to perform the Services, unless the unavailability is
not under the control of the Contractor, in which case Contractor shall notify
USEC of such unavailability within three (3) Business Days of learning of same.
Whenever any Key Person is unavailable for performance of the Services,
Contractor agrees to replace such Key Person with an individual of substantially
equal abilities and qualification acceptable to USEC. Contractor shall make such
replacement not later than ten (10) Business Days prior to such Key Person
becoming unavailable; provided, however, that Contractor shall have not less
than twenty (20) Business Days from the day that Contractor learns of such
unavailability to make such replacement. Contractor agrees to promptly re-task
any employee (to include, without limitation, Key Persons) performing any of the
Services who is unacceptable to USEC with an employee acceptable to USEC subject
to the limitations of any applicable laws, regulations or collective bargaining
agreements.
     (c) Work Force Continuity. Contractor shall use its best efforts to
maintain the continuity of individual workers that perform the Services. As
such, Contractor shall not remove from performing the Services more that (a)
*****% of the work force in any one (1) month period or (b) *****% of the work
force in any three (3) month period, without first notifying USEC at least
fifteen (15) days in advance of such action.
7. DELIVERY.
     (a) The Contractor shall deliver the Supplies and perform all Work in
accordance with the terms specified elsewhere in this Contract.
     (b) UNLESS OTHERWISE STATED IN THIS CONTRACT, TIME SHALL BE DEEMED OF THE
ESSENCE FOR DELIVERY OF SUPPLIES AND PERFORMANCE OF THE WORK. If the Contractor
becomes aware of difficulty in providing the Supplies/Work, the Contractor shall
timely notify the Buyer, in writing, giving pertinent details of the difficulty.
This notification shall not change any delivery schedule.
     (c) In the event of a change or termination for convenience, no claim will
be allowed under the Paragraph entitled “Termination and Suspension of This
Contract” for any costs arising out of the Contractor’s manufacturing of
Supplies in advance of the Contractor’s normal production schedule unless there
has been prior written consent by the Buyer.
     (d) The Contractor shall wrap, pack, crate, load, enclose and brace the
Supplies on the carrier in a good, workmanlike manner and in accordance with
applicable law and regulation, and any specifications referred to in this
Contract (or in the absence of such specifications, applicable trade practices
in the U.S. industry).
8. CONFLICT OF INTEREST
(a) Prohibited Activities. Without the Corporation’s prior written consent,
during performance of this Contract and for a period of two (2) years after
expiration or termination hereof, Contractor shall not perform any work that is
the subject of specific authorized task orders under this Contract related to
centrifuge components used to enrich uranium for a competitor of the
Corporation.

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     (b) Disclosure of Conflicts of Interest. In the event that Contractor
discovers either a Conflict of Interest during the contract term or a material
change in a Conflict of Interest that existed as of the date this Contract was
awarded but that was waived by the Corporation, Contractor shall make an
immediate and full disclosure thereof in writing to the Corporation including a
description of the action that Contractor has taken or proposes to take to avoid
or mitigate such new conflict or material change in a pre-existing conflict.
Without limiting any other rights it may have under law or equity, the
Corporation reserves the right to terminate this contract for default if it
determines that the Contractor was aware of a Conflict of Interest prior to the
award of this Contract and did not disclose the conflict to the Corporation
prior to its award, or if the Contractor becomes aware of the Conflict of
Interest after the award of this Contract and failed to promptly disclose such
conflict to the Corporation.
     (c) Subcontracts. The Contractor shall ensure that all subcontracts include
protection against Conflicts of Interest acceptable to the Buyer.
9. INSPECTION AND REJECTION OF DELIVERABLES.
     (a) Technical Representative. The Technical Representative shall be
responsible for acceptance of all Deliverables submitted, and all Services
performed under, this Contract based on approved manufacturing processes and the
quality control plan. Acceptance of deliverables shall occur at Contractor’s
facility in Oak Ridge, TN.
     (b) Rejection. Within a reasonable period of time for the completion of
Services or shipment of Deliverables from Contractor’s facility, the Technical
Representative, by notice to Contractor, may reject a Deliverable of Service if
the Technical Representative determines that such Deliverable or Service does
not conform to the requirements of this Contract. Contractor shall have fifteen
(15) days after receiving written notice of rejection to provide a cure schedule
and, unless otherwise agreed, such cure shall be completed within a reasonable
time after Contractor’s receipt of such notice. If Contractor fails to cure, or
the cure is deemed unacceptable or impracticable by the Technical
representative, USEC shall have the right (i) if USEC has not yet paid for the
rejected Service or Deliverable, to disallow that portion of any invoice
covering such Service or Deliverable or (ii), if payment has already been made,
to require Contractor to refund such payment. USEC may also accept the defective
Service and Deliverable, subject to an equitable reduction in the amount due or
paid to Contractor for such Service or Deliverable.
10. WARRANTIES.
     (a) Basic Warranties. Contractor warrants to USEC that:

  (i)   Contractor shall expend its reasonable professional efforts to provide
Deliverables that conform with the specifications in the Contract.     (ii)  
Contractor shall perform all of the Services pursuant to this Contract in a
professional manner consistent with the standards of quality and care typical
within the industry at the time of performance for similar work.     (iii)  
Contractor will keep the Deliverables free of all liens, security interests or
encumbrances, other than those created or agreed to by USEC.

     (b) Warranty Term and Remedy.

  (i)   The warranties set forth herein shall be effective for a period of one
(1) year beginning upon Final Acceptance of the Deliverable.

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  (ii)   Any Deliverable which does not conform with the warranty set forth
herein, shall, within a reasonable period of time after notification to, or
discovery by, Contractor of the defect, be repaired or reworked by Contractor.  
  (iii)   Any Services which do not conform with warranty obligations set forth
herein shall be reperformed by Contractor at Contractor’s expense with a
reasonable time from date of the notice to Contractor of the applicable
deficiency.     (iv)   If Contractor disputes responsibility for correction,
Contractor shall nevertheless proceed in accordance with any reasonable written
request issued by USEC under this section to repair or rework the Deliverable or
perform the Services. In the event it is later determined that the Deliverable
or Services did conform to the terms of the warranty herein, the Contract shall
be equitably adjusted to pay Contractor for such additional costs incurred in
complying with USEC’s instructions, plus a mutually agreed upon fee.     (v)  
In order for the applicable warranty remedy to apply, written claim must be made
by USEC within ninety (90) days from the date the defect is detected by USEC and
in no event later than the expiration date of the applicable warranty period.

(c) Warranty Disclaimer and Exclusive Remedy for Breach of Warranty .
THE WARRANTIES AND REMEDIES FOR BREACH OF WARRANTY SET FORTH HEREIN ARE
EXCLUSIVE, AND NO OTHER WARRANTIES OR REMEDIES FOR BREACH OF WARRANTY OF ANY
KIND, WHERETHER STATUTORY, WRITTEN, ORAL, EXPRESS, OR IMPLIED, INLCUDING WITHOUT
LIMITATION, WARRANTIES OF PERFORMANCE, MERCHATABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, SHALL APPLY. THE SOLE LIABILITY OF CONTRACTOR AND
THE EXCLUSIVE REMEDY OF USEC WITH RESPECT TO ANY ALLEDGED BREACH OF WARRANTY,
WHETHER SUCH LIABILITY ARISES ON ACCOUNT OF CONTRACT, TORT (INCLUDING
NEGLIGENCE), STRICT LIABLITY, OR OTHERWISE, SHALL BE LIMITED TO THE REMEDIES
SPECIFIED IN THIS ARTICLE.
     (d) Other Warranties . In addition to the warranties provided herein,
Contractor shall assign to USEC all manufacturer’s warranties for equipment or
items purchased by Contractor or perform Services under the Contract provided
such things are USEC-funded and become the property of USEC pursuant to the
terms of this Contract.
11. LIMITATION OF LIABILITY.
     (a) Neither Party (including subcontractors of Contractor or customers and
subcontractors of USEC) shall be liable to the other Party whether arising under
contract, tort (including negligence), strict liability, or otherwise, for any
special, indirect, incidental, or consequential loss or damage of any nature
arising at any time from any cause whatsoever. Nothing herein shall be deemed to
limit the liability of the Department of Energy under the Price-Anderson Act
nuclear indemnity agreement extended to Contractor under Section 37 of this
Contract.
     (b) Except in regard to: (i) liabilities to USEC pursuant to Contractor’s
intentional violation of the provisions of Article 32; or (ii) liabilities to
USEC pursuant to Article 35; the total liability of Contractor and its
subcontractors, whether in contract, tort (negligence), strict liability or
otherwise shall not exceed *****.

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12. TITLE AND RISK OF LOSS.
     (a) Corporation to Take Title. (i) The Corporation shall hold title to all
Deliverables completed and title to materials, equipment, and other things
intended for incorporation into the Deliverable or for which the Corporation
paid or reimbursed the Contractor, risk of loss shall pass to the Corporation
upon acceptance of Deliverables at Contractor’s facility, and title shall pass
to the Corporation upon delivery at Corporation’s Facility. Contractor shall
retain title to all equipment and materials used by the Contractor but not
intended to be incorporated into the Deliverable.
          (ii) Unless this Contract specifically provides otherwise, title to
Supplies shall remain with the Contractor until, and shall pass to the
Corporation upon, delivery of the Supplies (i) to the carrier, if transportation
is other than F.O.B. Destination; or (ii) the designated destination, if
delivery is F.O.B. Destination. Risk of loss shall pass to the Corporation upon
delivery of the Supplies to the carrier. In the event that delivery is other
than F.O.B. Destination, the Contractor shall, upon the Buyer’s request, arrange
for delivery of the Supplies to the destination requested by the Corporation at
the Corporation’s cost. If the Supplies are subsequently rejected by the
Corporation, title to, and risk of loss of (other than any loss due to the gross
negligence of the Corporation), the Supplies shall revert to the Contractor on
the date of such rejection. Rejected Supplies shall be disposed of in accordance
with Subparagraph (f) of the Paragraph entitled “Remedies for Breach of
Warranty.”
     (b) Title to Property. In the event of termination and unless otherwise
provided explicitly in this Contract, the Corporation shall be deemed to acquire
title to all supplies and materials (collectively, “Property”) acquired by the
Contractor hereunder at the Corporation’s expense, upon the Corporation’s
payment therefore.
     (c) Contractor Risk of Loss. (i) Notwithstanding the foregoing and prior to
acceptance of the completed Deliverable by the Corporation, Contractor shall
bear the risk of loss of, or damage to, the Deliverable or any equipment or
materials used by the Contractor for the Deliverable.
          (ii) Title to and risk of loss of defective Deliverables that are
returned for replacement shall revert to the Contractor upon notice of the
defect. If the Contractor fails to furnish timely disposition instructions, the
Corporation may dispose of the defective Supplies for the Contractor’s account
in a reasonable manner.
     (c) Disclaimer. The fact that the Corporation takes title to the
Deliverable or to any equipment, materials or thing under this Paragraph, shall
not be considered acceptance of such Deliverable, equipment, materials, or thing
nor limit or affect the Corporation’s right to require correction or replacement
of defective or nonconforming Deliverable, equipment, material or thing or
relieve the Contractor of any obligation under this Contract.
13. HAZARDOUS MATERIAL AND ASBESTOS.
Unless otherwise authorized elsewhere in this Contract, all Supplies furnished
hereunder shall not contain asbestos or any other hazardous material.
14. MATERIALS AND HEAT TREATMENT.
In the event that the Contract includes material and heat treatment
requirements, the Contractor shall furnish a statement signed by an authorized
person within its quality organization stating that such requirements have been
met. When a choice of materials is authorized, the statement shall indicate
which materials were used in performance of this Contract.

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15. INDEMNIFICATION.
Except with respect to public liability for which USEC is indemnified pursuant
to the Price Anderson Act, as amended, (see Section 37), and any other damage to
or loss or impairment of the property equipment, facilities or business
(including the economic value of such property, equipment, facilities or
business) of USEC arising out of or resulting from, directly or indirectly, a
nuclear incident (as defined in Section 11 of the Atomic Energy Act of 1954, as
amended) in any way related to the manufacturing work and services being
performed by Contractor under this Agreement, Contractor shall indemnify, save
harmless and defend USEC and its directors, officers, employees, contractors or
agents from and against any and all liabilities, claims, penalties, forfeitures
or suits (collectively, “Claims”) and the costs and expenses incident thereto
(including cost of defense, settlement and reasonable attorneys’ fees)
(collective, “Costs”), which they or any of them may hereafter incur, become
responsible for or pay out as a result of death or bodily injuries to any
person, destruction or damage to any property, contamination of or adverse
effects on the environment, or any violation of laws, regulations or orders,
caused by or arising out of, in whole or in part, Contractor’s performance of or
failure to perform any services or other obligations assumed by Contractor under
this Contract. Notwithstanding the foregoing, the financial obligation of
Contractor under this Section shall be reduced to the extent such Claims or
costs arise from the negligence, strict liability or fault of USEC, its
directors, officers, employees, agents or contractors (other than Contractor or
Contractor’s subcontractors or suppliers), which negligence, strict liability or
fault shall be determined on a comparative negligence basis. For clarity, the
parties understand and agree that this indemnification, save harmless and
defense obligation does not extend to any Claims by USEC or its directors,
officers, employees, agents or contractors for damage to or loss or impairment
of the property equipment, facilities or business (including the economic value
of such property, equipment, facilities or business) of USEC or its directors,
officers, employees, agents or contractors that result either directly or
indirectly from a nuclear incident as that term is defined and understood in the
Atomic Energy Act of 1954, as amended, regardless of whether the Claims are
caused, in whole or in part, by the negligence, strict liability or other fault
of Contractor and that USEC hereby releases Contractor from and against any such
Claims.
16. PAYMENT.
     (a) Upon the submission of an acceptable invoice and subject to acceptance
by the Corporation of the Work covered thereby, the Corporation shall pay
Contractor the Contract Price for such Work, to the extent that Contractor has
not been previously paid therefore. Unless otherwise specifically provided
elsewhere in this Contract, Contractor shall submit invoices as the Work
progress, but not more often than once per month.
     (b) Invoices shall be submitted to the attention of the Corporation’s
Accounts Payable Group at the address shown on the face of the Contract.
     (c) Only invoices that are determined by the Corporation to be acceptable
will be processed for payment. Invoices must include:
(i) Contractor’s name and address;
(ii) Invoice date;
(iii) Contract number and line item number;
(iv) Description, quantity, unit of measure, unit price and extended price of
Work delivered;

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(v) Shipping number and date of shipment including the bill of lading number and
weight of shipment if shipped other than F.O.B. Destination;
(vi) Terms of any prompt payment discount offered;
(vii) Name, title and mailing address of the person or office to whom payment is
to be sent;
(viii) Name, title, phone number and mailing address of the person or office to
be notified in event of an unacceptable invoice; and
(ix) Any information or document required by the other requirements of this
Contract.
(x) All federal, state and local taxes which must be paid by Contractor (i.e.
those taxes that the Corporation does not pay directly to a State or
Commonwealth on its direct payment permits);
     (d) If any invoice is determined to be unacceptable, the Corporation shall
notify Contractor of the defect within a reasonable time after receipt of the
invoice by the Accounts Payable Group.
     (e) Payment shall be by wire transfer to:
          *****
     (f) Untimely payment of Contractor invoices or fee shall result in an *****
percent per annum (***** % per annum) late fee on any balance not paid within
thirty (30) days of the Corporation’s receipt of an acceptable invoice.
17. TAXES.
     (a) Sales and Use Tax. Unless separately stated elsewhere in this Contract,
any sales or use taxes applicable to Work performed or tangible personal
property provided in Ohio shall be paid, to the extent practicable, by the
Corporation directly to the State on a Direct Payment Permit. Contractor agrees
that the prices, fees, charges (including expenses for which Contractor seeks
reimbursement to or other consideration) to be paid by the Corporation under the
Contract shall not include any such Ohio sales and use taxes. All other sales or
use taxes shall be paid by Contractor and billed to the Corporation unless the
Corporation provides exemption certificates stating the statutory reason for
claiming the exemption.
(b) Prices and Charges Include Taxes. Except for sales and use taxes paid by the
Corporation pursuant to Subparagraph (a) of this Paragraph, Contractor agrees
that the price charged for fixed price Work, and the amounts charged for labor
and costs for time and materials Work includes all applicable federal, state and
local taxes, duties and governmental charges (“Taxes”) Contractor incurred under
this Contract other than those that Contractor is legally obliged to charge to,
and collect from, the Corporation. Those Taxes that Contractor is obliged to
charge to, and collect from, the Corporation shall be listed separately on any
invoice for the Work to which such Taxes are attributable. Contractor shall take
any steps reasonably requested by the Corporation to lawfully minimize the
Corporation’s liability for Taxes.
     (c) Exclusive Liability for Certain Taxes. The Contractor hereby assumes
sole and exclusive liability for income, franchise or other taxes associated
with the Contractor’s business operations and for all taxes and/or
contributions, however they may be designated, the payment of which may be
required under the Federal Social Security Act and under unemployment insurance
laws or unemployment compensation laws, however they may be designated, of the
several states, with respect to employees employed by the Contractor in the
performance of services subject to this Contract.
     (d) Disclosure. The Corporation (and each employee, representative, or
other agent of the Corporation) may disclose to any and all persons, without
limitation of any kind, the tax

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treatment and tax structure of the transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to the Corporation
relating to such tax treatment and tax structure.
18. CONTRACT MANAGEMENT.
     (a) Buyer. Unless otherwise stated in this Contract, any action that may be
taken by the Corporation in this Contract may only be taken by the Buyer (such
action shall bind the Corporation unless it violates applicable law or
governmental regulations). In addition to the foregoing authority, the Buyer may
also take any action expressly reserved for the Technical Representative (as
described in subparagraph (b) of this Paragraph), if any, and may override any
decision of the Technical Representative. All actions taken by the Buyer shall
bind the Corporation unless such actions violate applicable law or governmental
regulations. In such event, Contractor will not be obligated to comply with
Buyer’s direction and will provide corresponding notice to Corporation. The
Buyer may replace the Technical Representative and shall provide written notice
thereof to the Contractor.
     (b) Technical Representative. The Technical Representative, if one is
designated elsewhere in this Contract, shall be authorized to provide Technical
Direction (as defined in Subparagraph (c)) relating to the performance of the
Contractor’s obligations under this Contract. All actions taken by the Technical
Representative prior to his or her replacement hereunder shall bind the
Corporation unless such action violates applicable law or governmental
regulations. In such event, Contractor will not be obligated to comply with
Technical Representative’s direction and will provide corresponding notice to
Corporation. If no Technical Representative is designated in this Contract, all
actions shall be taken by the Buyer.
     (c) Technical Direction. (i) The Contractor’s performance of this Contract
shall be subject to the Technical Direction of the Technical Representative if
one is so designated or the Buyer if a Technical Representative is not
designated. “Technical Direction” includes, without limitation: (A) directions
to the Contractor that shift work emphasis between work areas of this Contract,
require pursuit of certain lines of inquiry, fill in details or otherwise serve
to accomplish performance of this Contract; (B) provision of written information
to the Contractor that assists in the interpretation of drawings, specifications
or technical portions of this Contract; and (C) review and acceptance, on the
Corporation’s behalf, of anything required to be provided by the Contractor
under this Contract; provided, however that none of the foregoing Technical
Direction shall be deemed to alter the status of the Contractor as an
independent contractor.
          (ii) All Technical Direction must be within the scope of this Contract
and significant Technical Direction shall be issued in writing by the Technical
Representative or the Buyer. Any Technical Direction issued pursuant to this
Subparagraph (c) shall not result in any additional payment to the Contractor.
The Technical Representative does not have the authority to, and may not, issue
any Technical Direction that: (A) requires additional services outside of the
scope of this Contract; (B) alters any written performance schedule included in
the Contract or agreed to by the Buyer; (C) changes the terms of this Contract;
or (D) interferes with the Contractor’s right to perform its obligations in
accordance with this Contract.
          (iii) The Contractor shall proceed promptly to perform any Technical
Direction issued by the Technical Representative in the manner prescribed by and
within the Technical Representative’s authority. If, in the opinion of the
Contractor, any Technical Direction violates Subparagraph (c)(ii) of this
Paragraph, the Contractor shall: (A) notify the Buyer in writing immediately
after receipt of any such Technical Direction; (B) request in writing that the
Buyer

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modify this Contract accordingly; and (C) unless otherwise directed by the
Buyer, continue performance of this Contract without complying with the
Technical Direction in question, pending a decision by the Buyer. Upon receiving
any such notification from the Contractor, the Buyer shall: (X) advise the
Contractor in writing as soon as possible after receipt of the Contractor’s
letter that the Technical Direction is within the scope of this Contract and
does not constitute a change; or (Y) advise the Contractor in writing within a
reasonable time that the Corporation shall modify this Contract in accordance
with the Paragraph entitled “Contract Modifications.” Any disagreement between
the Corporation and the Contractor regarding the Buyer’s determination of
whether a Technical Direction is within the scope of this Contract or whether,
or in what amount, to allow for an equitable adjustment, shall be resolved in
accordance with the Paragraph entitled “Dispute Resolution.”
19. CONTRACT MODIFICATIONS.
With or without additional consideration, the Buyer may at any time by written
order and without advance notice or notice to any sureties, make changes within
the general scope of this Contract. If any such modification results in a
material change in the cost of, or the time required for, performance of this
Contract, the Buyer shall make an equitable adjustment to the Contract Price,
delivery schedule or other affected Contract terms; provided, that the
Contractor has requested an equitable adjustment within thirty (30) days from
receipt of the written order and prior to final payment under this Contract. A
dispute involving any equitable adjustment shall not excuse the Contractor from
performing the Contract, as modified.
20. DISPUTE RESOLUTION.
     (a) Mutual Agreement. Any controversy or claim (a “Dispute”) between the
Parties arising out of or relating to this Contract, or the breach, termination
or validity hereof that is not resolved by mutual agreement shall be decided by
the Buyer. The Buyer shall, in writing, notify the Contractor of its final
decision (“Final Decision”) and designate such notice as the “Final Decision
Notice.” In the event the Contractor disagrees with the Buyer’s Final Decision,
the Contractor shall notify the Buyer of its disagreement within thirty
(30) days after receipt of the Final Decision Notice; otherwise, the Final
Decision shall be final and no action shall lie against the Corporation arising
out of said Dispute.
     (b) Disputes Subject to Arbitration. In the event the Contractor notifies
the Buyer of its disagreement with the Final Decision within the time period in
Subparagraph (a) of this Paragraph, the Dispute shall be finally settled by
binding arbitration in accordance with the CPR Non-Administered Arbitration
Rules (the “Rules”) as in effect on the effective date of this Contract, as
modified by this Paragraph, and by a single arbitrator appointed in accordance
with the Rules. The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. §1 et seq., (the “Act”) and shall be held at the
Corporation’s headquarters in Bethesda, Maryland.
     (c) Hearings and Award. To the extent feasible (as determined by the
arbitrator), all hearings shall be held within ninety (90) days following the
appointment of the arbitrator. At a time designated by the arbitrator, each
Party shall simultaneously submit to the arbitrator and exchange with the other
Party its final proposal for damages and/or any other applicable remedy. Either
Party may elect by notice given no later than ten (10) days after appointment of
the arbitrator to require that, in rendering the final award, the arbitrator
shall be limited to choosing the award proposed by a Party without modification.
In no event shall the arbitrator award damages inconsistent with any of the
terms and conditions of this Contract. Absent (i) a

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determination by the arbitrator that extraordinary circumstances require
additional time or (ii) agreement of the Parties, the arbitrator shall issue the
final award no later than thirty (30) days after completion of the hearings.
Judgment on any award may be entered in any court having jurisdiction thereof.
(d) Confidentiality. The fact that either Party has invoked the provisions of
this Paragraph, and the proceedings of, and award resulting from, an arbitration
hereunder shall be considered to be confidential information subject to the
confidentiality provisions of this Contract.
(e) Arbitration Award Binding Upon Successors. This agreement to arbitrate and
any award made hereunder shall be binding upon the successors and assigns and
any trustee or receiver of each Party.
21. TERMINATION AND SUSPENSION OF THIS CONTRACT.
(a) Termination or Suspension. The Corporation may terminate or suspend this
Contract, in whole or in part, (i) at the Corporation’s convenience, upon
written notice to Contractor or (ii) if Contractor Defaults (as defined in
Subparagraph (b)) of this Paragraph) and, where a right of cure is provided,
fails to cure such Default within the applicable cure period, if one is
provided, or if none is provided, thirty (30) days (unless extended in writing
by the Buyer) after receiving written notice from the Buyer specifying the
Default. The Contractor may terminate this Contract if Corporation Defaults (as
defined in Subparagraph (b)) of this Paragraph) provided that Corporation has
not cured such Default within thirty (30) days (unless extended in writing by
Contractor) after written notice of the breach from the Contractor.
(b) Definition of Default. “Default” includes: (i) Either Party is adjudged
bankrupt or insolvent; (ii) Either Party makes a general assignment for the
benefit of its creditors; (iii) a trustee or receiver is appointed for either
Party or any of its property; (iv) Either Party files a cure petition to take
advantage of any debtor’s act or to reorganize under the bankruptcy or similar
laws; (v) Contractor fails to make prompt payments to subcontractors or
suppliers for labor, materials or equipment; or (vi) except to the extent caused
by Force Majeure, Contractor fails to make progress in the work so as to
endanger performance of this Contract, (vii) Either Party fails to cure a defect
it Is required to cure under the provisions of this Contract, (viii) Either
Party breaches any warranty or representation made under this Contract; or
(ix) Either Party breaches any other term of this Contract and such breach has
or could reasonably have a material adverse effect on the performance of this
Contract. Force Majeure shall excuse a Default by Contractor under item (vi) if
Contractor gives notice to the Buyer promptly of the effect of such Force
Majeure on performance of this Contract and the likely duration thereof, if
reasonably known, and keeps the Buyer informed of any changes in such
circumstances, including when such Force Majeure ends; provided, Contractor uses
all reasonable efforts to continue to perform this Contract, to remedy the
circumstances constituting the Force Majeure and to mitigate the adverse effects
of such Force Majeure on performance of this Contract. “Force Maleure” means an
unforeseeable occurrence beyond the reasonable control of Contractor and without
its fault or negligence such as acts of God or the public enemy, acts of the
U.S. Government in its sovereign capacity, fires, floods, epidemics, quarantine
restrictions, strikes, unforeseeable delays of common carriers and unusually
severe weather.
(c) Contractor’s Obligations Upon Termination or Suspension. (i) Upon the
Corporation’s termination or suspension of this Contract, in whole or in part,
Contractor shall (A) cease work on the terminated or suspended portions of this
Contract on and as of the effective date of the termination or suspension, and
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or suspended portions of this Contract, until, in the event of suspension, the
Buyer notifies Contractor that the suspension has been lifted and that
Contractor may resume work; (B) continue to perform those portions of this
Contract that are not terminated or suspended; (C) terminate and/or assign to
the Corporation or to an affiliate (if so directed by the Buyer), contractor or
a supplier of the Corporation (at the Corporation’s discretion) all of
Contractor’s right, title and interest in subcontracts and purchase orders
relating to the terminated or suspended portion of this Contract; (D) take
actions necessary to protect, preserve and (in the case of a termination of this
Contract) promptly transfer title to and possession of all work, materials, and
information (regardless of form) acquired or produced for performance of this
Contract to the Corporation or an affiliate, contractor or a supplier of the
Corporation (as determined by the Buyer); and (E) in the case of termination for
convenience under Subparagraph (a)(i) above, provide supporting cost data as
requested by the Corporation and permit Corporation auditors access to all
records within Contractor’s custody or control or that of its subcontractors to
verify such cost data in order to facilitate the determination of the
appropriate compensation due to Contractor.
(ii) In the case of a termination of this Contract, Contractor shall also take
all other actions necessary to enable the Corporation or an affiliate,
contractor or supplier of the Corporation (as determined by the Buyer) to
complete performance of this Contract or, if requested by the Buyer, sell any
Work, Supplies, material or equipment related to this Contract to which the
Corporation has title, and pay the proceeds of such sale (less reasonable sales
expenses) to the Corporation. All such activities shall be at the Corporation’s
expense.
(d) The Corporation’s Obligations Upon Termination or Suspension. Upon the
Corporation’s termination or suspension of this Contract for convenience under
Subparagraph (a) of this Paragraph and Contractor’s fulfillment of its
obligations under Subparagraph (c), the Corporation shall pay Contractor all
incurred costs plus the percentage fee which is associated with the incurred
costs. If the Contract is terminated for default, Contractor shall be entitled
to all incurred costs-but only that fee which is associated with the percentage
of Work satisfactorily performed.
(e) Other Remedies. Nothing in this Section 21 shall be deemed to limit any
other remedy that either Party may have under this Contract or applicable law in
the event of termination or suspension of the Contract.
22. APPLICABLE LAW.
This Contract shall be governed by the laws of the laws of the State of
Delaware. In no event shall the U.N. Convention on the International Sale of
Goods apply to this Contract.
23. COMPLIANCE WITH LAWS.
     (a) The Contractor shall comply with all applicable federal, state and
local laws, rules, regulations, orders, codes and standards in performing this
Contract. The cost of such compliance shall be borne by the Contractor.
     (b) The Contractor shall provide to the Corporation with each delivery any
Material Safety Data Sheet applicable to the Supplies in conformance with and
containing such information as required by the Occupational Safety and Health
Act of 1970 and regulations promulgated thereunder, or its state approved
counterpart.

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24. FURNISHED PROPERTY.
     (a) The Corporation may provide to the Contractor property owned or
controlled by the Corporation (“Furnished Property”). Furnished Property shall
be used only for the performance of the Work.
     (b) Title to Furnished Property shall not pass to Contractor. The
Contractor shall clearly mark (if not so marked) all Furnished Property to show
that it is Furnished Property. The Contractor, as part of the Work, shall
(i) provide approved storage facilities for Furnished Property and (ii) unload,
provide receipts for, and store all such Furnished Property. If such items are
already in storage, the Contractor shall take custody of them when directed by
the Buyer or his designee. The Contractor shall check, account and care for, and
protect such items in accordance with good commercial practice and in the same
manner as if such items were to be furnished by the Contractor under this
Contract.
     (c) Except for reasonable wear and tear or expected consumption of the
Furnished Property in the performance of the Work, the Contractor shall be
responsible for, and shall promptly notify the Corporation of, any loss or
destruction of, or damage to, Furnished Property. The Contractor shall be liable
for loss or destruction of, or damage to, Furnished Property and for expenses
incidental to such loss, destruction or damage or replacement or repair of such
property.
     (d) At the Buyer’s request and/or upon completion or term of this Contract,
the Contractor shall submit in a form acceptable to the Buyer, inventory lists
of Furnished Property and shall deliver or make such other disposal of Furnished
Property as may be directed by the Buyer.
25. NON WAIVER OR DEFAULT.
Any failure by either Party at any time, or from time to time, to enforce or
require the strict keeping and performance of any of the terms or conditions of
this Contract shall not constitute a waiver of such terms or conditions and
shall not affect or impair such terms or conditions in any way nor the right of
such Party at any time to avail itself of such remedies as it may have for any
breach or breaches of such terms or conditions
26. SURVIVAL.
Upon expiration or termination (for any reason) of this Contract, all provisions
of this Contract dealing with conflicts of interest, intellectual property,
confidentiality, proprietary data and ownership rights, as well as the
provisions of the Paragraphs entitled “Contractor’s Representations,”
“Indemnification” and “Waiver for Claims Due to Nuclear Incidents” and any other
provision of this Contract that expressly states that it will survive expiration
or termination hereof, shall survive and remain binding upon the Parties hereto
and upon their successors and assigns.
27. HEADINGS.
The headings and subheadings of the Paragraphs contained in this Contract are
inserted for convenience only and shall not affect the meaning or interpretation
of this Contract or any provision hereof.
28. CONTRACTOR STATUS.
     (a) The Contractor is an independent Contractor.
     (b) Nothing herein contained or implied shall at any time be so construed
as to create the relationship of employer and employee, partnership, principal
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between the Corporation and Contractor or its subcontractors or between the
Corporation and any of Contractor’s personnel or its subcontractor’s personnel.
The Corporation shall not have any obligation under local, state or federal laws
regarding pay, benefits, taxes or other labor matters relating to personnel of
Contractor or its subcontractors and the total commitment and liability of the
Corporation in regard to payment for Work is to pay for Work accepted, pursuant
to the payment provisions of this Contract. Neither Party has any authority
whatsoever, express or implied, to assume or create any obligation on behalf of
or in the name of, the other Party with respect to third parties.
     (c) Without limiting (i) the Corporation’s right to provide Technical
Direction as set forth in the Paragraph entitled “Contract Management” or
(ii) any requirement in this Contract regarding subcontractors and consultants,
the Corporation shall have no right to control or direct the details, means or
methods by which the Contractor performs this Contract.
29. THIRD PARTY BENEFICIARIES.
Except as provided in the Paragraph entitled “Waiver for Claims Due to Nuclear
Incidents,” nothing in this Contract shall be interpreted as creating any right
of enforcement of any provision herein by any person or entity that is not a
Party to this Contract.
30. SEVERABILITY.
If any provision of this Contract is held invalid by a court of competent
jurisdiction, such provision shall be severed from this Contract and, to the
extent possible, this Contract shall continue without effect to the remaining
provisions.
31. PRECEDENCE.
Any inconsistencies in this Contract shall be resolved in accordance with the
following descending order of precedence: (a) face of the Contract or release
document, (b) any master-type agreement (such as corporate or blanket
agreements); (c) the terms and conditions herein, (d) the Statement(s) of Work,
(e) specifications and (f) Drawings.
32. CONFIDENTIALITY.
Any information exchanged between the Parties during the performance of this
Contract, including the terms of the Contract itself, shall be kept confidential
and protected in accordance with the terms of the Confidentiality Agreement
between USEC Inc. and BWXT Services, Inc. with an effective date of April 27,
2007 (the “Confidentiality Agreement”). Contractor understands that it may be
necessary for USEC to provide information, including this Contract, information
under this Contract and other information protected under the Confidentiality
Agreement to the U.S. Government, lenders, prospective investors and other
person in connection with solely for the purpose of obtaining financing and
funds for its American Centrifuge Program. Contractor agrees and consents to
such disclosure of information provided such persons have agreed to protect the
confidentiality of the information or are under statutory or legally enforceable
code of professional responsibility to protect such information. In any case
where additional disclosure of terms of this Contract are sought by a Party,
permission to do so shall not be unreasonably withheld provided the prospective
recipients have agreed to protect the confidentiality of the information or are
under statutory or legally enforceable code of professional responsibility to
protect such information.

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33. INTELLECTUAL PROPERTY.
     (a) All inventions, discoveries, improvements, documents, drawings,
designs, specifications, notebooks, tracings, photographs, negatives, reports,
findings, recommendations, data and memoranda of every description, including
material maintained in any form or medium, concepts, ideas, methods,
methodologies, procedures, processes, know-how and techniques (including without
limitation, function, process, system and data models); templates, the
generalized features of the structure, sequence and organization of software,
user interfaces and screen designs; general purpose consulting and software
tools, utilities and routines; and logic, coherence and methods of operation or
systems (whether or not patentable, or copyrightable that are conceived or first
actually reduced to practice or first prepared by Contractor, its personnel or
its subcontractor(s), in the performance of the Work related to design of
centrifuge components or the Deliverables (collectively, “Contractor Developed
Design Technology”) shall be the property of the Corporation and treated by
Contractor and its subcontractor as confidential USEC Proprietary Information.
Unless directed by the Corporation otherwise, Contractor may maintain a
reasonable number of copies of Contractor Developed Design Technology for
archival purposes only. All retained copies shall be marked as confidential and
protected from disclosure to third persons in accordance with the provisions of
the Paragraph of this Contract entitled “Confidentiality” for so long as
Contractor retains such copies.
     (b) The Corporation shall acquire all of Contractor’s right, title and
interest in and to all Contractor Developed Design Technology by written
assignment or as a work for hire. Contractor hereby assigns all its right, title
and interest in such Contractor Developed Design Technology to the Corporation,
and Contractor shall execute any documents and otherwise assist in obtaining,
maintaining, or enforcing the Corporation’s intellectual property rights in and
to Contractor’s Developed Design Technology, as the Corporation may reasonably
require to preserve the Corporation’s rights therein. No additional compensation
shall be paid to Contractor for, or as result of, providing such assistance. To
the extent Contractor Background Technology (as defined below) is incorporated
into Contractor Developed Design Technology, Contractor hereby grants to the
Corporation a fully-paid, world-wide, non-exclusive, irrevocable, transferable,
perpetual license to make, have made, use, sell, offer to sell, reproduce,
prepare derivative works, perform and/or display publicly, and sublicense such
Contractor Background Technology to the extent necessary for the Corporation to
exercise its rights of ownership in Contractor Developed Design Technology. No
additional compensation shall be paid to Contractor for, or as result of, such
license.
     (c) All inventions, discoveries, improvements, documents, drawings,
designs, specifications, notebooks, tracings, photographs, negatives, reports,
findings, recommendations, data and memoranda of every description, including
material maintained in any form or medium, concepts, ideas, methods,
methodologies, procedures, processes, know-how and techniques (including without
limitation, function, process, system and data models); templates, the
generalized features of the structure, sequence and organization of software,
user interfaces and screen designs; general purpose consulting and software
tools, utilities and routines; and logic, coherence and methods of operation or
systems (whether or not patentable, or copyrightable that are conceived or first
actually reduced to practice or first prepared by Contractor, its personnel or
its subcontractor(s), in the performance of the Work related to manufacturing of
centrifuge components or the Deliverables (collectively, “Contractor Developed
Manufacturing Technology”) shall be the property of the Contractor. Other than
as provided in sub-paragraph

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(g) below, nothing in this agreement shall be construed as expressly or
implicitly granting a license to Corporation of any Contractor Developed
Manufacturing Technology, including without limitation intellectual property
rights, except for the limited purpose of acceptance and use of Deliverables
under the Contract.
     (d) The Corporation acknowledges that Contractor may have created, acquired
or otherwise have rights in (and may, in connection with the performance of the
Work, employ, provide, modify, acquire or otherwise obtain rights in) various
inventions, discoveries, improvements, data, concepts, ideas, methods,
methodologies, procedures, processes, know-how and techniques (including without
limitation, function, process, system and data models); templates, the
generalized features of the structure, sequence and organization of software,
user interfaces and screen designs; general purpose consulting and software
tools, utilities and routines; and logic, coherence and methods of operation or
systems (collectively, the “Contractor Background Technology”). Contractor
Background Technology shall not include any Deliverable.
     (e) Even if used in connection with the performance of the Work, Contractor
Background Technology shall remain the property of Contractor and the
Corporation shall acquire no right or interest in such property, except for the
license provided in Subparagraph (b) above or Subparagraph (g) below. Similarly,
property of the Corporation (including, without limitation, the Corporation
Technology (as defined below) and any equipment, material, hardware and software
of the Corporation) shall remain the property of the Corporation and Contractor
shall acquire no right or interest in such property except as provided in
Subparagraph (f) below.
     (f) The term “Corporation Technology” means all inventions, discoveries,
improvements, documents, drawings, designs, specifications, notebooks, tracings,
photographs, negatives, reports, findings, recommendations, data and memoranda
of every description, including material maintained in any form or medium,
concepts, ideas, methods, methodologies, procedures, processes, know-how and
techniques (including without limitation, function, process, system and data
models); templates, the generalized features of the structure, sequence and
organization of software, user interfaces and screen designs; general purpose
consulting and software tools, utilities and routines; and logic, coherence and
methods of operation or systems (whether or not patentable, or copyrightable)
owned by, or licensed to the Corporation or to which the Corporation otherwise
has rights to use or possess.
     (f) Nothing in this agreement shall be construed as expressly or implicitly
granting a license to Contractor of any Corporation Technology, including
without limitation intellectual property rights, except for the limited purpose
of performing its Work under the Contract.
     (g) To the extent Contractor Developed Manufacturing Technology or
Contractor Background Technology is incorporated into the Deliverables or can be
useful for the Corporation’s objectives of manufacturing centrifuges, Contractor
hereby grants to the Corporation a fully-paid, world-wide, non-exclusive,
irrevocable, transferable, perpetual license to make, have made, use, reproduce,
prepare derivative works, perform and/or display publicly, and sublicense such
Contractor Developed Technology or Contractor Background Technology to the
extent necessary for the Corporation to exercise its rights to make the
Deliverables. No additional compensation shall be paid to Contractor for, or as
result of, such license.
34. SECURITY OF CLASSIFIED INFORMATION AND CONTROLLED AREAS.

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     (a) Classified Information Access. (i) “Classified Information” means any
information or material, regardless of its physical form or characteristics,
that has been determined pursuant to Executive Order 12356 or prior Executive
Orders to require protection against unauthorized disclosure, and which is so
designated; and all data concerning design, manufacture or utilization of atomic
weapons, the production of special nuclear material, or the use of special
nuclear material in the production of energy, but shall not include the data
declassified or removed from the Restricted Data category pursuant to
Section 142 of the Atomic Energy Act of 1954, as amended (the “AEA”) unless
protected under Section 142d of the AEA.
          (ii) Security Clearance. The Parties recognize that the Department of
Energy (“DOE”) or the Nuclear Regulatory Commission may determine security
classifications and issue security clearances required for performance of all or
part of this Contract. Contractor shall follow the applicable rules and
procedures of DOE, NRC and other responsible governmental authorities regarding
access to and safeguarding of Classified Information, security clearances and
other security matters, including the requirements of DOE Acquisition
Regulations (the “DEAR”) (see 48 C.F.R Chapter 9) 952.204-2, Security, DEAR
952.204-70 Classification/Declassification, 10 C.F.R. 95, and the procedures
with respect to Foreign Ownership Control and Interest (“FOCI”) in DEAR 904.7000
et seq. and DEAR 952.204-73, Facility Clearance. Contractor shall not permit any
individual to have access to any level or category of classified information,
except in accordance with applicable laws and procedures. Contractor shall not
be granted access to any classified information until the Buyer has notified
Contractor that such access has been approved by a DOE FOCI determination.
     (b) Site Access. Certain Corporation Facilities are each enclosed by a
perimeter fence establishing a controlled area. At the time of initial entrance
to the site, Contractor’s employees shall report to the applicable badge office
for security processing. Processing of Contractor’s employees will be done
without charge to Contractor. All Contractor employees performing hereunder must
be United States citizens. If naturalized, proper evidence must be furnished.
All employees must have picture identification with them upon arrival at the
applicable badge office. Unless informed by the Buyer of a different procedure,
Contractor shall ensure that, once issued, badges are worn by Contractor’s
employees at all times while on site. The continued presence of Contractor’s
employees on-site is subject to review by the Corporation, DOE and/or other
Corporation or DOE contractors based upon a check of appropriate records of law
enforcement agencies.
     (c) Technology Transfer Controls. Even if not classified, information
related to enrichment, an enrichment facility or a component of an enrichment
facility, are subject to U.S. Government restrictions on technology transfers,
including, but not limited to, those found in 10 C.F.R. parts 110, 810, or 1017
or 15 C.F.R. part 779. Accordingly, Contractor shall not disclose such
information in any manner inconsistent with any such U.S. Government
restriction. Further, Contractor shall not use, nor permit any subcontractor to
use, any non-U.S. national or non-U.S. owned entity in connection with
(i) delivery to, or work at, a controlled area or (ii) Work involving
information, Work or goods that are subject to U.S. government control, without
first ensuring that such activities fully comply with all applicable
restrictions.
     (d) Foreign Nationals. Foreign nationals are not permitted to perform work
at Corporation Facilities without prior written permission from the Buyer.
Written requests for use of foreign nationals must be submitted to the Buyer at
least ten (10) weeks prior to their anticipated work date. Failure of the Buyer
to approve the use of a foreign national shall not constitute excusable delay
nor entitle Contractor to an increase in the Contract Price.

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     (e)EXPORT CONTROLLED INFORMATION
          (i) Definition. “Export Controlled Information” or “ECI” means all
information and contract documents (purchase orders, drawings, specifications,
etc.) furnished by The Corporation to be used in connection with proposal/offer
preparation or performance under a contract, which are identified as ECI. The
ECI identification will be determined by an appropriate ECI review authority as
specified by the DOE Office Export Control Policy and Corporation (NA-242).
          (ii) Oral or Visual Disclosure. A Party that discloses Export
Controlled Information orally or visually shall identify it as Export Controlled
Information at the time of disclosure.
          (iii) Marking. All tangible objects, such as drawings, reports,
programs or documents, which constitute and/or contains or may contain Export
Controlled Information shall be Marked “Export Controlled information” or
“Information Contained Within May Contain Export Controlled Information” or such
other markings as required or permitted by DOE guidance. Markings inadvertently
omitted from Export Controlled Information when disclosed to a recipient shall
be applied by such recipient promptly when requested by the disclosing Party,
and such Export Controlled Information shall thereafter continue to be treated
as provided by this Agreement.
          (iv) Export Controlled Information shall be protected in accordance
with the DOE guidelines on Export Control and Nonproliferation and with U.S.
Government export control laws and regulations. Each recipient shall not
disclose the information to suppliers or contractors who are not U.S. owned and
managed or to employees who are not U.S. Citizens, except in accordance with the
DOE Guidelines on Export Control and Nonproliferation, and with U.S. Government
export control laws and regulations. This restriction applies to written and
oral guidance concerning performance, which may be provided by the Corporation
technical representatives.
          (v) Unless specifically and expressly approved in writing by the
Corporation, Contractor shall not disclose any ECI or information that may
contain ECI provided or furnished by the Corporation for any purpose to any
individual who is not a U.S. citizen or to any non-U.S. person or entity
(including any non-U.S. employee, supplier or contractor). For purposes of this
Section, a person or entity is considered to be non-U.S. if it is incorporated,
organized or created under the laws of a foreign country, or is foreign owned,
controlled or influenced as defined in applicable regulations and guidelines.
This restriction applies to written and oral information and guidance which may
be provided by the Corporation and applies to any information provided by any
contractor, or subcontractor to the Corporation or any other person acting on
behalf of the Corporation. Prior to disclosing any ECI to any person, Contractor
shall include this Section in a contract or agreement with the recipient.
     (f) UNCLASSIFIED CONTROLLED NUCLEAR INFORMATION.
          The specifications/drawings/Statement of Work referenced in this
Contract and attached hereto contains Unclassified Controlled Nuclear
Information (UCNI) as defined in Section 148 of the Atomic Energy Act of 1954,
as amended. Only authorized individuals can have access to UCNI documents. An
authorized individual is someone working for or with the United States
government, USEC, or its contractors requiring access to specific UCNI in the
performance of official duties. The information shall be controlled and handled
according to the instructions set forth below:
          (i) Handle UCNI material in such a way it will not be available to
anyone to whom you are not deliberately transmitting it. An authorized
individual shall maintain control over all

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UCNI to prevent unauthorized access. Physical control shall be maintained over
documents in use to prevent unauthorized disclosure. In a controlled or guarded
area, unlocked files, desks, or similar containers are adequate protection. In
an uncontrolled or unguarded area, a locked drawer or desk, a locked repository
or a locked room is adequate.
          (ii) UCNI may be transmitted to a person who needs to know the
information to do his/her job and is an employee of the Contractor. Refer to the
Department Of Energy (DOE) Manual 471.1-1 for criteria/authorization on
dissemination of UCNI to a wider audience.
          (iii) When transmitting UCNI, alert the recipient to the fact the
transmission includes UCNI. The sensitive content of the information shall also
be documented by the inclusion of markings on documentation and inclusion of an
UCNI cover sheet. Documents shall be packaged to prevent disclosure or presence
of UCNI. The information should be appropriately marked UCNI within the package
or envelope. The outside of the package or envelope shall be marked TO BE OPENED
BY ADDRESSEE ONLY. UCNI shall be transmitted by U.S. Mail (U.S. First class,
Express, certified or registered mail) or other commercial carrier who can
provide tracking of packages. Refer to DOE Manual 471.1 or 10 CFR 1017 for
additional criteria.
          (iv) When the specifications/drawings/Statement of Work is no longer
required by the Contractor, destroy it in a manner that will assure sufficient
complete destruction to prevent its retrieval. Refer to DOE Manual 471.1 or 10
CFR 1017 for additional criteria.
          (v) This subparagraph shall be included in all subcontracts for
performance of work under the Contract that require use of the above referenced
specifications/drawings/Statement of Work.
35. WAIVER FOR CLAIMS DUE TO NUCLEAR INCIDENTS.
Certain of the Corporation’s contracts with its customers require the
Corporation to seek from its suppliers a waiver of any claim against the
Corporation’s customers for loss, damage or loss of use of, property resulting
from a nuclear incident (as defined in Section 11 of the Atomic Energy Act of
1954, as amended) (the “AEA”) at the Corporation Facility. To facilitate the
Corporation’s compliance with the foregoing requirement, Contractor hereby
waives any such claims it may now or hereafter have against any and all of the
Corporation’s customers (but not against the Corporation) resulting from a
nuclear incident at the Corporation Facility to the extent such customers have
also waived such claims against Contractor. Contractor shall include this
Paragraph in any subcontract entered into by Contractor in connection with this
Contract and shall require that this Paragraph be included in all lower tier
subcontracts.
36. MISCELLANEOUS.
     (a) This Contract shall inure to the benefit of the Parties and their
respective successors and permitted assigns.
     (b) The remedies provided to a Party under this Contract in the event of a
default or breach of this Contract or any applicable warranty is not exclusive.
     (c) Contractor shall avoid damaging existing buildings, equipment and
vegetation on the Corporation’s facilities. If Contractor’s actions or omissions
cause damage to any Corporation property, Contractor shall replace or repair the
damage at no expense to the Corporation
37. PRICE-ANDERSON INDEMNIFICATION

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     (a) Authority. This Paragraph is incorporated into this Contract pursuant
to the Lease agreement (the “GCEP Lease”) between the Corporation and the
Department of Energy (the “Department”).
     (b) Definitions. The definitions set out in the Atomic Energy Act of 1954,
as amended (the “Act”) shall apply to this Paragraph.
     (c) Financial protection. The Corporation shall obtain and maintain, at its
expense, financial protection to cover public liability, as described in
paragraph (d)(2) below in such amount and of such type as is commercially
available at commercially reasonable rates, terms and conditions, provided that
in the event the Nuclear Regulatory Commission (NRC) grants a license for a
uranium enrichment facility not located on federally-owned property, the amount
is no more than the amount required by the NRC for the other facility.
     (d) Indemnification. The following indemnification from the Department is
included in the GCEP Lease: (1) To the extent that the Corporation and other
persons indemnified are not compensated by any financial protection required by
paragraph (c), the Department will indemnify the Corporation and other persons
indemnified up to the full amount authorized by Section 170 of the Act against
(i) claims for public liability as described in subparagraph (d)(2) of this
Paragraph; and (ii) such legal costs of the Corporation and other persons
indemnified as are approved by the Department. Nothing herein shall be deemed to
require the Corporation to indemnify the Contractor or any other person or
entity for any of the claims or costs described above.
     (2) The public liability referred to in subparagraph (d)(1) of this
Paragraph is public liability as defined in the Act which (i) arises out of or
in connection with the activities under the GCEP Lease, including
transportation; and (ii) arises out of or results from a nuclear incident or
precautionary evacuation, as those terms are defined in the Act.
     (e) Waiver of Defenses. (1) In the event of a nuclear incident, as defined
in the Act, arising out of nuclear waste activities, as defined in the Act, the
Contractor, on behalf of itself and other persons indemnified, agrees to waive
any issue or defense as to charitable or governmental immunity.
          (2) In the event of an extraordinary nuclear occurrence which:
               (i) arises out of, results from or occurs in the course of the
construction, possession or operation of a production or utilization facility;
or
               (ii) arises out of, results from, or occurs in the course of
transportation of source material, by-product material, or special nuclear
material to or from a production or utilization facility; or
               (iii) arises out of or results from the possession, operation, or
use by the Contractor or a subcontractor of a device utilizing special nuclear
material or by-product material, during the course of the GCEP Lease activity;
or
               (iv) arises out of, results from, or occurs in the course of
nuclear waste activities, the Contractor, on behalf of itself and other persons
indemnified, agrees to waive:
               (A) Any issue or defense as to the conduct of the claimant
(including the conduct of persons through whom the claimant derives its cause of
action) or the fault of persons indemnified, including, but not limited to:
          1. Negligence;
          2. Contributory negligence;
          3. Assumption of risk; or

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          4. Unforeseen intervening causes, whether involving the conduct of a
third person or an act of God;
               (B) Any issue or defense as to charitable or governmental
immunity; and
               (C) Any issue or defense based on any statute of limitations, if
suit is instituted within 3 years from the date on which the claimant first
knew, or reasonably could have known, of his injury or damage and the cause
thereof. The waiver of any such issue or defense shall be effective regardless
of whether such issue or defense may otherwise be deemed jurisdictional or
relating to an element in the cause of action. The waiver shall be judicially
enforceable in accordance with its terms by the claimant against the person
indemnified.
          (v) The term extraordinary nuclear occurrence means an event which the
Department has determined to be an extraordinary nuclear occurrence as defined
in the Act. A determination of whether or not there has been an extraordinary
nuclear occurrence will be made in accordance with the procedures in 10 CFR
Part 840.
          (vi) For the purposes of that determination, “offsite” as that term is
used in 10 CFR Part 840 means away from “the contract location” which phrase
means any Department facility, installation, or site at which activity under
this GCEP Lease is being carried on, and any Corporation-owned or -controlled
facility, installation, or site at which the Corporation is engaged in the
performance of activity under this GCEP Lease.
          (3) The waivers set forth above:
          (i) Shall be effective regardless of whether such issue or defense may
otherwise be deemed jurisdictional or relating to an element in the cause of
action;
          (ii) Shall be judicially enforceable in accordance with their terms by
the claimant against the person indemnified;
          (iii) Shall not preclude a defense based upon a failure to take
reasonable steps to mitigate damages;
          (iv) Shall not apply to injury or damage to a claimant or to a
claimant’s property which is intentionally sustained by the claimant or which
results from a nuclear incident intentionally and wrongfully caused by the
claimant;
          (v) Shall not apply to injury to a claimant who is employed at the
site of and in connection with the activity where the nuclear incident or
extraordinary nuclear occurrence takes place, if benefits therefore are either
payable or required to be provided under any workmen’s compensation or
occupation disease law;
          (vi) Shall not apply to any claim resulting from a nuclear incident
occurring outside the United States;
          (vii) Shall be effective only with respect to those obligations set
forth in this Section and in insurance policies, contracts or other proof of
financial protection; and
          (viii) Shall not apply to, or prejudice the prosecution or defense of,
any claim or portion of claim which is not within the protection afforded under
(A) the limit of liability provisions under subsection 170e. of the Act, or
(B) the terms of this Paragraph and the terms of insurance policies, contracts,
or other proof of financial protection.
     (f) Notification and Litigation of Claims. The Contractor shall give
immediate written notice to the Corporation and the Department of any known
action or claim filed or made against the Contractor or other person indemnified
for public liability as defined in paragraph (d)(2). Except as otherwise
directed by the Corporation or the Department, the Contractor shall furnish
promptly to the Corporation and the Department, copies of all pertinent papers
received by the Contractor or filed with respect to such actions or claims. The
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shall have the right to, and may collaborate with, the Contractor and any other
person indemnified in the settlement or defense of any action or claim and the
Department shall have the right to (1) require the prior approval of the
Department for the payment of any claim that the Department may be required to
indemnify hereunder; and (2) appear through the Attorney General on behalf of
the Contractor or other person indemnified in any action brought upon any claim
that the Department may be required to indemnify hereunder, take charge of such
action, and settle or defend any such action. If the settlement or defense of
any such action or claim is undertaken by the Department, the Contractor or
other person indemnified shall furnish all reasonable assistance in effecting a
settlement or asserting a defense.
     (g) Continuity of the Department’s Obligations. The obligations of the
Department under this Paragraph shall not be affected by any failure on the part
of the Corporation to fulfill its obligation under this GCEP Lease and shall be
unaffected by the death, disability, or termination of the existence of the
Corporation, or by the completion, termination or expiration of the GCEP Lease.
     (h) Effect of other Clauses. The provisions of this Paragraph shall not be
limited in any way by, and shall be interpreted without reference to, any other
clause of the GCEP Lease or this Contract provided, however, that this Paragraph
shall be subject to any provisions that are or have been added to the GCEP Lease
after its execution as required by applicable Federal law, including statutes,
executive orders and regulations, to be included in Nuclear Hazards Indemnity
Agreements.
     (i) Inclusion in Contracts. This Paragraph shall not be applicable to this
Contract if the Contractor is subject to Nuclear Regulatory Commission
(NRC) financial protection requirements under Section 170b. of the Act or NRC
agreements of indemnification under Sections 170c. or k. of the Act for the
activities under the contract.
38. CORPORATION RULES AND REGULATIONS
     (a) The Contractor and all Contractor employees shall comply with the
applicable rules and regulations in force at the Corporation Facility at which
the Work is being performed. Contractor and all Contractor employees shall
comply with all applicable Corporation and DOE rules and regulations when
performing Work at the East Tennessee Technology Park.
     (b) The Contractor shall include the substance of this Paragraph in all
subcontracts for work at or on a Corporation Facility.
39. COMPLIANCE WITH NUCLEAR SAFETY AND SAFEGUARDS AND SECURITY REQUIREMENTS.
     (a) Contractor shall comply with all nuclear safety, safeguards and
security requirements set forth in this Contract (including the Specifications,
Drawings, or Statement of Work) (each a “Nuclear Safety, Safeguards and Security
Requirement”). Contractor shall conduct self-assessments and cooperate with the
Corporation, DOE, the Nuclear Regulatory Commission (“NRC”) and the Corporation
in activities that address these requirements.
     (b) In the event that Contractor becomes aware of any failure to comply
with a Nuclear Safety, Safeguards and Security Requirement, Contractor shall
promptly notify the Buyer or, if applicable, the Corporation’s Site Regulatory
Compliance Manager and, in consultation with such person(s), take appropriate
preventive and/or corrective action to achieve compliance, and assure continued
compliance, with such requirements.

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     (c) In the event that DOE or NRC initiates an enforcement action against
the Corporation arising out of Contractor’s failure to comply with any such
Nuclear Safety, Safeguards and Security Requirement, Contractor agrees to
cooperate fully with the Corporation in responding to such enforcement actions
by providing all information, assistance, and documentation required by the
Corporation. The Parties agree to coordinate their legal and factual position in
a timely manner so that all submittals are made in a timely manner, as
determined by the Corporation to DOE or NRC, as the case may be.
     (d) All costs incurred by Contractor in connection with the Corporation’s
response to an enforcement action in accordance with subparagraph (c) above
shall be borne by Contractor and shall not be subject to reimbursement by the
Corporation under this Contract or otherwise. In addition, Contractor agrees to
indemnify and hold the Corporation harmless against any and all liabilities,
claims, penalties, fines, forfeitures, losses, costs and expenses (including
costs of defense, settlement and reasonable attorney’s fees) that they or either
of them may incur, become responsible for, or pay out, as a result of
Contractor’s failure to comply with any Nuclear Safety, Safeguards and Security
Requirement, in accordance with the Paragraph entitled “Indemnification” of this
Contract.
40. CODE OF CONDUCT.
     (a) The Contractor agrees that its employees performing services under this
Contract who represent the Corporation, or may be viewed as representing the
Corporation, abide by the Corporation’s Code of Conduct (the “Code”). The Code
can be accessed at:
www.usec.com/v2001_02/Content/AboutUSEC/USECCodeofBusinessConduct.pdf.
     (b) The Contractor further agrees that it will ensure that its employees
covered by this Paragraph are provided access to the Code and that they have
read and understand its requirements and prohibitions.
41. INSURANCE.
     (a) Required Insurance. During the term hereof, Contractor shall maintain,
at no direct cost to the Corporation, the following kinds and amounts of
insurance to cover bodily injury (including death) and property damage suffered
or (in the case of liability insurance) caused by Contractor or its employees,
if any, in connection with the performance of the Work:
(i) Workers Compensation. As required by applicable law.
(ii) Employers Liability $1 million per occurrence.
(iii) General Liability. $1 million per occurrence for both bodily injury and
property damage.
(iv) Automobile Liability. $1 million combined single limit.
(v) Excess Liability. $10 million covering items (ii), (iii) and (iv).
     (b) Contractor shall ensure that the insurance carrier provides the Buyer
thirty (30) days written notice prior to cancellation in coverage terms.
     (c) Contractor shall provide written evidence of all liability policies
required under this Paragraph by providing Certificates of Insurance. Contractor
shall upon award of this Contract, and prior to the commencement of any work at
or on a Corporation Facility, provide the Buyer Certificates of Insurance for
all liability policies required under this Paragraph or a written certification
that all required insurance has been obtained. This certification shall apply to
Contractor and all subcontractors working at or on a Corporation Facility.
Contractor and its

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subcontractors shall maintain copies of all required certificates of insurance
at the site of work when Work is being performed at or on a Corporation
Facility.
     (d) The Contract shall insert the substance of this Paragraph, in all
subcontracts for the performance of Work (in whole or in part) where (i) the
price to be paid under the subcontract is expected to exceed $100,000 (or, if an
indefinite quantity type contract, purchases under the subcontract could exceed
$100,000) or (ii) the Work are to be performed at or on a Corporation Facility.
Such provision shall require subcontractors to provide and maintain the
insurances required above.
     (e) Contractor may purchase at its own expense such additional or other
insurance protection as it may deem necessary. Maintenance of the required
insurance protection does not relieve Contractor of responsibility for any
losses covered by the above required policies, nor entitle Contractor to
reimbursement of insurance-related costs, except as specifically agreed by the
Buyer.
42. PREEXISTING CONDITIONS
The Corporation agrees to reimburse the Contractor, and the Contractor shall not
be held responsible, for any liability (including without limitation, a claim
involving strict or absolute liability and any civil fine or penalty), expense,
or remediation cost, but limited to those of a civil nature, which may be
incurred by, imposed on, or asserted against the Contractor arising out of any
condition, act, or failure to act related to performance of the work under this
contract which occurred before the Contractor assumed responsibility for such
work on August 1, 2007 (Effective Date). To the extent the acts or omissions of
the Contractor cause or add to any liability, expense or remediation cost
resulting from conditions in existence prior to the Effective Date, the
Contractor shall be responsible in accordance with the terms and conditions of
this Contract.

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