exv10w66



 





EXHIBIT 10.66




Agreement between the U.S. Department of Energy and

the United States Enrichment Corporation

Concerning the Temporary Lease of Certain Facilities

In Support of the American Centrifuge Program




     THIS AGREEMENT between the U.S. Department of Energy and the United States
Enrichment Corporation Concerning the Temporary Lease of Certain Facilities in
Support of the American Centrifuge Program (Agreement) is made and entered into
by and between the U.S. Department of Energy (“DOE”) and the United States
Enrichment Corporation (“USEC”), a Delaware corporation.



     WHEREAS, USEC leases portions of the Portsmouth Gaseous Diffusion Plant
located in Piketon, Ohio (“PORTS”) and portions of the Paducah Gaseous
Diffusion Plant located in Paducah, Kentucky (“PGDP”) from DOE pursuant to a
Lease Agreement dated July 1, 1993 (the “GDP Lease”);



     WHEREAS, DOE and USEC entered into an Agreement dated June 17, 2002, (“the
DOE-USEC Agreement”) to, inter alia, “[f]acilitate the deployment
of new, cost-effective advanced enrichment technology in the U.S. on a rapid
schedule” (the DOE-USEC Agreement”);



     WHEREAS, the DOE-USEC Agreement establishes agreed upon milestones for the
demonstration and deployment of advanced enrichment technology by USEC; and



     WHEREAS, in order to meet the DOE-USEC Agreement milestones, USEC has
requested that the leasehold under the GDP Lease be expanded.



     NOW, THEREFORE, DOE and USEC hereby agree as follows:



   1. In accordance with Section 3.4 of the GDP Lease, DOE hereby consents,
subject to the conditions set forth in this Agreement, to expand the GDP Lease
to include the following buildings as more fully defined in Attachment 1 hereto
(collectively referred to as the “Lead Cascade Facilities”):



	 	 	 
	X-3001

	 	Process Building #1
	 
	 	 
	X-3012

	 	Process Support Building
	 
	 	 
	X-7725 (Partial)

	 	Recycle/Assembly Building
	

	 	Areas needed include Buffer Storage and IPT/IPTT
	

	 	Maintenance area and battery room, container wash,
	

	 	container dry, rotor balance, level IV control Room,
	

	 	and all of the Level V area








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	X-7726 (Partial)

	 	Centrifuge Training and Test Facility
	

	 	(Does not include the Gas Test Stand Area)
	X-7727H

	 	Transfer Corridor








Activities in the Lead Cascade Facilities shall be conducted in
compliance with applicable requirements under the National Environmental
Policy Act (NEPA), the Price-Anderson Amendments Act of 1988, and any
other applicable statutory or regulatory requirements.




USEC hereby withdraws its previous request, dated January 24, 2003, to
lease Building X-7745R (Attachment 2).



   2. Exhibit A of the GDP Lease is amended to include the Lead Cascade Facilities
as more fully described in Attachment 1 to this Agreement which shall be
effective for each facility or portion of a facility as of the date agreed to
by USEC and the DOE Lease Administrator for the transition of the facilities to
USEC. Upon the effective date of the lease of Building X-3001 at PORTS, the
temporary lease of portions of Building X-3001 at PORTS pursuant to DOE’s
letter to USEC, dated September 12, 2003 (Attachment 3), shall expire. The
temporary lease of Building X-3002 at PORTS shall remain in effect until
Building X-3002 is returned to DOE in accordance with DOE’s letter to USEC
dated September 12, 2003. Except as provided in paragraph 3 below, the
temporary lease of the Lead Cascade Facilities shall expire upon the execution
of a commercial plant lease or other instrument that incorporates the Lead
Cascade Facilities; the expiration of the license granted by the NRC for the
operation of the Lead Cascade ; or June 30, 2009, whichever event occurs first.
Unless a commercial plant lease or other instrument that incorporates the Lead
Cascade Facilities has been executed, all Turnover Requirements are expected to
be completed no later than the expiration of the Temporary lease. This
temporary lease of the Lead Cascade Facilities may be renewed or extended by
mutual agreement of DOE and USEC.



   3. In accordance with the terms and conditions of the DOE-USEC Agreement,
in the event it is determined that USEC fails to meet a milestone and that a
delay in meeting the milestone has a material impact on USEC’s ability to begin
commercial operations at the new plant on schedule and that the cause of the
delay was not beyond the control or without the fault or negligence of USEC,
then USEC, at DOE’s request, will return the Lead Cascade Facilities in
accordance with the GDP Lease and regulatory requirements on a schedule
proposed by USEC and approved by DOE. Notwithstanding any expiration,
conclusion or termination of this Agreement or the GDP Lease, paragraphs 7 and
8 and Attachment 4 of this Agreement (“Lead Cascade Capital Improvement and
Personal Property to be Removed by USEC”) shall survive any such termination,



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expiration, revocation or relinquishment of this lease Agreement or the GDP
Lease. In the event of termination, expiration, revocation or relinquishment
of this temporary lease, USEC shall promptly commence the return of all Lead
Cascade Facilities to DOE in accordance with paragraphs 7 and 8. In the event
USEC fails to return all the Lead Cascade Facilities in accordance with
paragraphs 7 and 8 below, USEC shall reimburse DOE for DOE’s costs, including,
but not limited to, costs related to the removal of Capital Improvements
(provided such Capital Improvements are removed) and contaminated personal
property (including any Material of Environmental Concern) and any incremental
decontamination and decommissioning costs incurred by DOE in performing any obligation that was to be performed by USEC under paragraphs 7 and 8
of this Agreement as permitted under paragraph 9.



   4. Except for the material that USEC agreed to relocate in accordance with
DOE’s September 12, 2003, letter at USEC’s expense, DOE will remove DOE
equipment and wastes currently located in the Lead Cascade Facilities (“GCEP
Clean up Work”), at DOE’s expense, subject to the availability of appropriated
funds. USEC will perform such portion of this work for DOE under the
Memorandum of Agreement between DOE and USEC for Services, Exhibit F to the
Lease (“Services MOA”), or other appropriate contractual vehicle, without fee
or profit with DOE reimbursing USEC’s reasonable and allocable direct and
indirect costs. USEC’s work under the Services MOA will be performed in
accordance with separate Work Authorization(s) agreed to by DOE and USEC, or
other appropriate contractual vehicle. USEC may request to retain equipment,
parts or materials located in the Lead Cascade Facilities for use in connection
with USEC’s American Centrifuge Program; upon DOE’s consent this personal
property shall be included under the requirements of Attachment 4 and be
subject to paragraphs 7 and 8 below. All other equipment and material will be
dispositioned in accordance with DOE direction at DOE’s expense, or, in the
absence of DOE direction, DOE’s personal property (including any Material of
Environmental Concern) may remain in the Lead Cascade Facilities in accordance
with Section 3.3 of the GDP Lease. The parties recognize that DOE may not
bring on to the Lead Cascade Facilities any additional DOE personal property,
including Material of Environmental Concern, after the GDP Lease has been
expanded to include the Lead Cascade Facilities unless USEC has expressly and
specifically consented to such storage and such storage is in full compliance
with applicable regulatory requirements and with the other requirements of
Article IX A. of the Memorandum of Agreement between DOE and USEC for
Environmental and Waste Management, Exhibit C to the GDP Lease, for the storage
of additional material after July 1, 1993. In the event the Lead Cascade
Facility becomes subject to International Atomic Energy Agency (“IAEA”)
safeguards inspections, all the costs associated with the IAEA requirements
will be the responsibility of USEC and shall not be subject to reimbursement by
DOE under the Services MOA or any other contractual vehicle.





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   5. In accordance with the Regulatory Approach for Post Nuclear Regulatory
Commission Certification at Gaseous Diffusion Plants, dated October 10, 1995,
the Regulatory Oversight Agreement between DOE and USEC (including its
Appendices) and applicable nuclear safety regulations as promulgated under, and
amended as necessary to fully conform with, the Price-Anderson Amendments Act
of 1988, as amended, shall apply to activities conducted by USEC in the Lead
Cascade Facilities, and to any other facilities subsequently leased to USEC
which are not regulated by the Nuclear Regulatory Commission.



   6. USEC has informed DOE that USEC Inc. currently plans to make Capital
Improvements to the Lead Cascade Facility under a proposed Sublease.
Attachment 5 lists the Capital Improvements currently planned. In accordance
with Section 4.5(b) of the GDP Lease, DOE hereby consents to the making of
Capital Improvements listed in Attachment 5.


   7. As a condition to DOE’s consent to expand the GDP leasehold to include
the Lead Cascade Facilities, USEC agrees that, unless otherwise directed by
DOE, and notwithstanding Section 4.3 of the GDP Lease, prior to returning any
portion of the Lead Cascade Facilities to DOE, USEC shall at no cost to DOE remove or shall
cause to be removed the centrifuge machines, Capital Improvements and other
personal property listed in Attachment 4, and any other Capital Improvements
subsequently approved by DOE. In addition, in accordance with Section 4.5(c)
of the GDP Lease, if the removal of the Capital Improvements pursuant to this
Section 7 increases DOE’s Decontamination and Decommissioning costs of the Lead
Cascade Facilities beyond those costs extant at the execution of this lease,
USEC agrees to pay any such increase in Decontamination and Decommissioning
costs. In addition, USEC shall be responsible for and will pay any costs
associated with the removal of any contamination that is attributable to or
arises out of USEC or USEC Inc.’s occupation or operation of the Lead Cascade
Facilities. The parties agree that all costs associated with the performance
of USEC activities under the lease related to the Lead Cascade Facilities,
including, but not limited to associated infrastructure costs until all
Turnover Requirements are met, shall be the responsibility of USEC.



USEC will establish and furnish to DOE a radiological baseline survey
(“baseline survey”) within the Lead Cascade Facilities from which DOE will be
able to determine whether USEC has incrementally contaminated the Lead Cascade
Facilities. The baseline survey plan will be developed by USEC and approved by
DOE. The baseline survey shall be performed by USEC or its contractors, at
USEC’s expense and under DOE oversight. It is agreed that existing DOE data
may be utilized and relied upon by USEC in preparing the baseline survey. A
baseline survey plan will be submitted to DOE within the first 30 days of the
effective date of the Agreement, and shall be completed within ninety (90) days
after USEC’s receipt of DOE’s approval of the survey plan. Any changes to the
condition of the Lead Cascade Facilities above that established by the baseline

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survey as the result of the GCEP Clean up Work shall be documented by USEC and
provided to DOE as a Supplement to the baseline survey.



At the termination, expiration, revocation or relinquishment of this lease of
the Lead Cascade Facilities, an additional radiological survey shall be
performed by USEC which is of the same scope as the baseline survey prior to
turnover and a final inventory and survey report shall be prepared and
submitted to DOE. When agreed to by DOE, said report shall constitute the
basis for ensuring that all leased property is returned to DOE in the same or
as good a condition as was documented in the baseline survey (as modified by
the latest GCEP Clean up Work Supplement). It is agreed that the facility is
in “as good a condition” if it does not increase the total cost to
decontaminate and decommission the Lead Cascade Facility. In the event of a
dispute, DOE and USEC agree to jointly engage (on a shared cost basis) an
independent engineering firm mutually agreed to by DOE and USEC to determine
whether and how much the total cost to decontaminate and decommission the Lead
Cascade Facility has been increased.




   8. USEC agrees that, unless otherwise directed by DOE, prior to returning
any portion of the Lead Cascade Facilities to DOE, USEC will, at no cost to
DOE, remove or will cause to be removed all personal property in addition to
the property identified in paragraph 7 (including any Material of Environmental
Concern) located in the portion to be returned to DOE other than personal
property owned by DOE or its contractors (including property permitted to
remain pursuant to paragraph 4).




   9. In the event DOE believes that the facilities were not returned in the
condition required in paragraphs 7 and 8, DOE shall provide notice to USEC
within ninety (90) days of the return of the facilities to DOE identifying any
deficiencies with specificity (DOE Deficiency Notice) and USEC shall be
afforded a reasonable opportunity to cure all or any part of such deficiencies.
Failure to provide such DOE Deficiency Notice shall be deemed to be acceptance
of the facilities. Within thirty (30) days of receipt of the DOE Deficiency
Notice, USEC shall inform DOE if it agrees with DOE and whether it elects to
cure any of the deficiencies identified (USEC’s Election Notice). DOE and USEC
shall attempt to resolve any disputes through negotiation within thirty (30)
days of USEC’s Election Notice. If USEC elects to cure all or any part of the
deficiencies identified by DOE in its notice, DOE will permit USEC, at its
expense, to perform such work as is necessary to cure all or any part of the
deficiencies. In the event USEC fails to cure a deficiency within sixty (60)
days of, or if greater than sixty (60) days are required to cure then fails to
commence actions necessary to cure the deficiency within sixty (60) days of,
the date DOE permits USEC to commence work to cure the deficiency, then DOE may
undertake to cure the deficiency and USEC shall reimburse DOE for DOE’s
reasonable and allocable costs incurred to cure any failure by USEC to comply
with the requirements of paragraphs 7 and 8 identified in the DOE Deficiency
Notice.




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   10. DOE acknowledges USEC’s commitment to developing the advanced gas
centrifuge that is demonstrated by USEC entering into this temporary lease of
the Lead Cascade Facilities, and commits to use its best efforts to conclude
negotiations for the lease or transfer of the facilities for USEC’s future
Commercial Plant in a timely manner.



   11. With respect to any sublease entered into between USEC and USEC Inc.,
USEC represents to DOE that:




a. The Sublease between USEC and USEC Inc. shall require assumption of
and shall be subject to, and consistent with, all terms, conditions,
covenants, provisions, and agreements contained in this Agreement and the
GDP Lease.




b. USEC expressly agrees that any such Sublease will impose no new
obligations, liabilities, and costs on DOE.




c. USEC acknowledges that the making of any assignment, transfer, or
subletting, in whole, or in part, other than to USEC Inc for construction
and operation of the Lead Cascade Facilities requires DOE’s express
consent.




d. The Sublease between USEC and USEC Inc. shall not operate to relieve
USEC from its obligations under this Agreement and the GDP Lease, and
notwithstanding any such assignment, transfer, or subletting, USEC shall
be liable for the payment of all Rent and other charges and for the due
performance of all the covenants, agreements, terms and provisions of
this Agreement and the GDP Lease.


Based upon these representations, consent to sublease the Lead Cascade
Facilities, or any portion thereof, to USEC Inc. for the purpose of
constructing and operating the Lead Cascade Facilities is hereby granted to
USEC. Failure to comply with this paragraph 11 voids DOE’s consent to the
sublease and in such an event, USEC agrees to terminate any sublease between USEC and USEC Inc. Possession of specific areas or portions of areas within
the Lead Cascade Facility by USEC may be turned over to USEC Inc. upon the
completion of GCEP Clean up Work within the area or portion of the area and
written notification to DOE of the turn-over of the areas or portions of areas
to USEC Inc.




   12. LEASE NOT A JOINT VENTURE — Nothing contained in this Lease
shall be construed as creating or establishing a joint venture or partnership
between DOE and USEC.



   13. USE OF PREMISES — The sole purposes for which the USEC or USEC
Inc. shall use the Lead Cascade Facilities are to refurbish, test, evaluate and
demonstrate gas centrifuges to enrich natural (and not reprocessed)



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uranium.
USEC must obtain the written approval from DOE prior to using the Lead Cascade
Facilities for any purpose or use other than that specified above.



   14. Except as specifically and expressly provided in this Agreement,
nothing in this Agreement shall be deemed to amend or modify the terms and
conditions of the GDP Lease.



     IN WITNESS WHEREOF, DOE and USEC, in consideration of the mutual
promises, commitments and obligations set forth herein, have caused this
Agreement to be executed, and effective as of the later of the dates of the
signatures below and hereby affix the signatures of their duly authorized
representatives.



	 	 	 
	U.S. DEPARTMENT OF ENERGY
	 
	 	 
	By:
	 	/s/ J. Dale Jackson
	Name:
	 	J. Dale Jackson
	Title:
	 	GDP Lease Administrator
	Date:
	 	February 17, 2004
	 
	 	 
	UNITED STATES ENRICHMENT CORPORATION
	 
	 	 
	By:
	 	/s/ Ron Green
	Name:
	 	Ron Green
	Title:
	 	Senior Vice President
	Date:
	 	February 14, 2004





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