exv10w1



 





EXHIBIT 10.1




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.




AMENDATORY AGREEMENT

Between

TENNESSEE VALLEY AUTHORITY

And

UNITED STATES ENRICHMENT CORPORATION




	 	 	 
	Date: June 1, 2007
	 	TV-05356W, Supp. No. 4






          THIS AGREEMENT, made and entered into by and between TENNESSEE VALLEY AUTHORITY (TVA), a
corporation created and existing under and by virtue of the Tennessee Valley Authority Act of 1933,
as amended (TVA Act), and UNITED STATES ENRICHMENT CORPORATION (Company), a corporation created and
existing under the laws of the State of Delaware;




W I T N E S S E T H:




          WHEREAS, Company has been purchasing power from TVA under Power Contract TV-05356W, dated July
11, 2000, as amended (Power Contract), for the operation of Company’s uranium enrichment facilities
near Paducah, Kentucky; and




          WHEREAS, the parties wish to (a) extend the term of the Power Contract for two years and (b)
amend the Power Contract to provide for the pricing and quantity of power and energy for the time
period commencing on June 1, 2007, and ending on May 31, 2012;




          NOW, THEREFORE, for and in consideration of the premises and of the mutual agreements
hereinafter set forth, and subject to the provisions of the TVA Act, the parties mutually agree as
follows:




SECTION 1 – DEFINITIONS





Initial capped terms used in this agreement which are defined in Article I of the Power
Contract shall have the meaning there defined.



 









 





SECTION 2 – EXTENSION OF THE POWER CONTRACT





Effective as of the date first above written (Effective Date), section 2.1 of the Power
Contract is amended in the respects necessary to provide that the Power Contract shall
continue in effect through the Billing Month of May 2012.



SECTION 3 – QUANTITY AND PRICING OF BASELINE ENERGY





Section 2.4 of the Power Contract, which had previously been effective to provide for the
quantity and pricing of Baseline Energy during Period Two of the Power Contract, shall be of
no force and effect to provide for quantity and pricing from and after the Effective Date of
this agreement. In lieu thereof, the following provisions shall apply.




	 	3.1	 	Quantity of Energy. Subject to the terms and conditions of the Power
Contract, Baseline Energy, in the monthly MW amounts set forth in Exhibit A, shall be
made available to Company for the period from June 1, 2007, through May 31, 2012. Of
each monthly amount, 300 MW will continue to be Firm Baseline Energy and any remaining
amount will be Interruptible Baseline Energy, as provided in the Power Contract.
	 
	 	3.2	 	Base Energy Price. Subject to the provisions of section 4 below, the
price for Baseline Energy during the period from June 1, 2007, through May 31, 2012,
shall be as follows:






	 	(i)	 	$***** from June 1, 2007, through August 31, 2007,
	 
	 	(ii)	 	$***** from September 1, 2007, through May 31, 2008,
	 
	 	(iii)	 	$***** from June 1, 2008, through May 31, 2009,
	 
	 	(iv)	 	$***** from June 1, 2009, through May 31, 2010,
	 
	 	(v)	 	$***** from June 1, 2010, through May 31, 2011, and

	 
	 	(vi)	 	$***** from June 1, 2011, through May 31, 2012.





SECTION 4 – FUEL COST ADJUSTMENT





The Baseline Energy Prices as set forth in section 3.2 above of this agreement shall be
subject to the TVA Fuel Cost Adjustment (FCA) as calculated under Exhibit B to TV-05356W,
Supp. No. 3, dated April, 3, 2006; provided, however, that from and after the Effective Date
of this agreement, the table in said Exhibit B setting forth the values of B (the monthly
per MWh Base Fuel Rates as defined in Exhibit B) shall be deemed to be deleted and replaced
with the following:



	 	 	 	 	 
	June
	 	$	17.13	 
	July
	 	$	22.22	 
	August
	 	$	18.92	 
	September
	 	$	17.09	 
	October
	 	$	16.22	 
	November
	 	$	17.09	 






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	December
	 	$	16.53	 
	January
	 	$	16.96	 
	February
	 	$	18.26	 
	March
	 	$	18.80	 
	April
	 	$	16.09	 
	May
	 	$	14.57	 







It is recognized that the FCA shall mean the per-MWh amount by which the Baseline Energy
Prices under section 3.2 above of this agreement are increased or decreased from time to
time in accordance with the formula designed to reflect changes in TVA’s fuel costs,
purchased power costs, and related costs as shown on said Exhibit B. It is further
recognized and agreed that TUm (as defined in Exhibit B) has a lag integrated into the
formula and that unless otherwise agreed between the parties, any such amount shall remain
an obligation even though the payment of the bill for power taken during May of 2012 has
been made.



SECTION 5 – PERFORMANCE ASSURANCE





Sections 1, 2, and 4 of Supplement 2 of the Power Contract are hereby deleted and replaced
with the following:




	 	“1.	 	 Letter of Credit. Company shall continue to provide TVA an
Irrevocable Letter of Credit, in a form acceptable to TVA, in the amount of $***** not
later than June 15, 2007. Not later than September 1, 2007, the amount of such Letter
of Credit shall be increased to $***** and on or before October 1, 2007, the amount of
such Letter of Credit shall be increased to $*****. Company shall at all times keep
such Letter of Credit in full force and effect. The Letter of Credit may be utilized
by TVA to cover any obligations for which the Power Contract provides and for which
payments are not made by Company, including, but not limited to, minimum bill
obligations. Notwithstanding hereunder, Company will remain obligated to make all
payments as they become due under the Power Contract.
	 
	 	2.	 	Weekly Prepayments. Notwithstanding the provisions of section 2.6 of
the Power Contract, Company shall pay TVA a designated sum of money per week in advance
for power and energy used under the Power Contract (Weekly Prepayment). Beginning on
June 1, 2007, and going through August 24, 2007, Company shall pay TVA a Weekly
Prepayment in the amount of $*****. Beginning on September 7, 2007, Company shall pay
TVA a Weekly Prepayment in the amount of $***** and beginning on October 5, 2007,
Company shall pay TVA a Weekly Prepayment in the amount of $*****. Such Weekly
Prepayments shall be made no later than 3 p.m. CST or CDT, whichever is currently
effective, on the first four (4) Fridays of each calendar month and shall be made
electronically through Automatic Clearing House to TVA’s account. TVA’s monthly bill
for power and energy shall reflect the cumulative Weekly Prepayments for that month as
a credit to be applied against that monthly bill. Company shall have seven (7) days
from the date of the monthly bill, or until the next Weekly Prepayment (whichever comes
later) to pay any amount that is




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	 	 	 	not covered by the cumulative Weekly Prepayments for that month. In the event that the
cumulative Weekly Prepayments for any month exceed the amount of that monthly bill, TVA
shall notify Company of the overpayment and credit such amount to Company’s next Weekly
Prepayment.
	 
	 	4.	 	Early Payment Credits. Notwithstanding Section 2 of the Terms and
Conditions set forth in Attachment 4 of the Power Contract, provided that Company makes
all Weekly Prepayments in full falling within that Billing Month on or before
the Weekly Prepayment Due Dates, and Company is not otherwise delinquent or in default
under the Power Contract, the Company shall be entitled to early payment credits. Such
early payment credits shall be calculated as follows:






	 	(a)	 	TVA shall determine the aggregate amount of all Weekly
Prepayments due under the Power Contract and received during the
Billing Month;
	 
	 	(b)	 	TVA shall provide a flat ten (10) days of such credit
by applying TVA’s Average Short-Term Interest Rate (as defined in the Terms
and Conditions to the Power Contract) to such aggregate amount.”






The parties expressly agree that this procedure for figuring Early Payment Credits was the
appropriate method used from June 1, 2006 to May 31, 2007.



SECTION 6 – RATIFICATION OF THE POWER CONTRACT





The Power Contract is ratified and confirmed as the continuing obligation of the parties.



          IN WITNESS WHEREOF, the parties to this agreement have caused it to be executed by their duly
authorized representatives, as of the day and year first above written.




	 	 	 	 	 
	 	UNITED STATES ENRICHMENT CORPORATION

 	 
	 	By  	/s/ John K. Welch
 	 
	 	 	Title:  President and CEO 	 
	 	 	 	 
	 
	 	TENNESSEE VALLEY AUTHORITY

 	 
	 	By  	/s/ Bruce S. Schofield
 	 
	 	for  	Executive Vice President 	 
	 	 	Customer Resources 	 
	 




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EXHIBIT A



BASELINE ENERGY

JUNE 1, 2007, THROUGH MAY 31, 2012

(TOTAL OF FIRM AND INTERRUPTIBLE BASELINE ENERGY IN MW)*




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2007	 	2008	 	2009	 	2010	 	2011	 	2012
	January
	 	 	 	 	 	 	2,000	 	 	 	2,000	 	 	 	2,000	 	 	 	1,650	 	 	 	1,650	 
	February
	 	 	 	 	 	 	2,000	 	 	 	2,000	 	 	 	2,000	 	 	 	1,650	 	 	 	1,650	 
	March
	 	 	 	 	 	 	2,000	 	 	 	2,000	 	 	 	2,000	 	 	 	1,650	 	 	 	1,650	 
	April
	 	 	 	 	 	 	2,000	 	 	 	2,000	 	 	 	2,000	 	 	 	1,650	 	 	 	1,650	 
	May
	 	 	 	 	 	 	1,700	 	 	 	1,700	 	 	 	1,700	 	 	 	1,400	 	 	 	1,400	 
	June
	 	 	300	 	 	 	300	 	 	 	300	 	 	 	300	 	 	 	300	 	 	 	 	 
	July
	 	 	300	 	 	 	300	 	 	 	300	 	 	 	300	 	 	 	300	 	 	 	 	 
	August
	 	 	300	 	 	 	300	 	 	 	300	 	 	 	300	 	 	 	300	 	 	 	 	 
	September
	 	 	1,700	 	 	 	1,700	 	 	 	1,700	 	 	 	1,400	 	 	 	1,400	 	 	 	 	 
	October
	 	 	2,000	 	 	 	2,000	 	 	 	2,000	 	 	 	1,650	 	 	 	1,650	 	 	 	 	 
	November
	 	 	2,000	 	 	 	2,000	 	 	 	2,000	 	 	 	1,650	 	 	 	1,650	 	 	 	 	 
	December
	 	 	2,000	 	 	 	2,000	 	 	 	2,000	 	 	 	1,650	 	 	 	1,650	 	 	 	 	 





It is recognized that, beginning in September 2010, the amounts of power provided for in the table
above decline in a manner (“Ramp-Down”) that is designed to produce benefits for the TVA power
system. It is further recognized that TVA and Company are planning to begin discussions about
possible arrangements for continued TVA power supply to the Paducah facility after May 2012. If
agreement is reached for such continued TVA supply by no later than May 31, 2009, and if such
agreed-upon arrangements contain a later Ramp-Down that is acceptable to TVA, TVA will agree to a
amend the Power Contract such that the last 3 columns of the table above would be revised to read
as follows:




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2010	 	2011	 	2012
	January
	 	 	2,000	 	 	 	2,000	 	 	 	2,000	 
	February
	 	 	2,000	 	 	 	2,000	 	 	 	2,000	 
	March
	 	 	2,000	 	 	 	2,000	 	 	 	2,000	 
	April
	 	 	2,000	 	 	 	2,000	 	 	 	2,000	 
	May
	 	 	1,700	 	 	 	1,700	 	 	 	1,700	 
	June
	 	 	300	 	 	 	300	 	 	 	 	 
	July
	 	 	300	 	 	 	300	 	 	 	 	 
	August
	 	 	300	 	 	 	300	 	 	 	 	 
	September
	 	 	1,700	 	 	 	1,700	 	 	 	 	 
	October
	 	 	2,000	 	 	 	2,000	 	 	 	 	 
	November
	 	 	2,000	 	 	 	2,000	 	 	 	 	 
	December
	 	 	2,000	 	 	 	2,000	 	 	 	 	 








 




			
	*	 	The monthly MW amounts shall be multiplied by the number of hours in that month to determine the
required quantities of Baseline Energy. The actual hourly MW amounts shall be essentially constant
except during ramp up/ramp down periods and will be scheduled in accordance with operating
procedures jointly developed under section 2.2(f) of the Power Contract.




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