Document:

EXHIBIT 10.3

EXHIBIT 10.3

Confidential information has been omitted in places marked “*****” and has been filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to this omitted information.

EXHIBIT A
CONFIDENTIAL TREATMENT
DE-NE0000530
Amendment 005

AMENDMENT NO. 005
TO
COOPERATIVE AGREEMENT DE-NE0000530 BETWEEN
DEPARTMENT OF ENERGY (“DOE”),
USEC INC. (“USEC”), 
AND 
AMERICAN CENTRIFUGE DEMONSTRATION, LLC (“ACD”) 
(collectively, the “Agreement”)

		
	1.
	Line 9 of the Opening Page is deleted in its entirety and replaced with the following:

Funds Obligated This Action: $20,000,000

		
	2.
	Line 10 of the Opening Page is deleted in its entirety and replaced with the following:

Funds Obligated Prior Actions: $133,390,184 (comprised of $87,670,184 equal to up to 39,200 MT DUF6 accepted by DOE (original agreement), plus $45,720,000 funding provided by DOE under GFY 2013 continuing resolution (Amendment No. 001) plus $44,378,055 in agreed to value equal to ***** SWU transferred to USEC Inc. as the SWU Component of ***** KgU Enriched Uranium Product (EUP) via EUP Transfer*** EUP Transfer is defined in Attachment H - EUP Transfer Provisions.* (Amendment 003)).

**EUP Transfer is defined in Attachment H - EUP Transfer Provisions.

		
	3.
	Line 11 of the Opening Page is deleted in its entirety and replaced with the following:

Total Government Funds Obligated: $197,768,239 (comprised of $87,670,184 equal to up to 39,200 MT DUF6 accepted by DOE (original agreement), plus $45,720,000 funding provided by DOE under GFY 2013 continuing resolution (Amendment No. 001), plus $44,378,055 equal to ***** SWU as the SWU Component of ***** KgU EUP transferred to USEC Inc. (Amendment No. 003), plus $20,000,000 (Amendment 005).

		
	4.
	Section 8.01 of the Agreement is deleted in its entirety and replaced with the following:

8.01:  The maximum amount of liability assumed from the Recipient by DOE, which is made available through DOE assumption of Depleted Uranium Hexafluoride (DUF6) title and liability, shall be as set forth in the table below.  For each of the periods set forth below, the Recipient is prohibited from incurring costs for which DOE reimbursement will be sought in excess of the following amounts; provided, however, that unutilized funds made available in any period may be made available to reimburse costs incurred in any subsequent period at DOE's discretion.

	
			
	Award Period
	DOE Method of Cost Share
	Maximum DOE Incremental Amount of Cost Share Dollars

	Budget Period 1 Funding Period 1 6/1/12-7/31/12
	DOE assumption of 11,813 MT of DUF6 liability -
	$26,410,272 
(in the form of DUF6 liability assumed by DOE)

	Budget Period 1 Funding Period 2 8/1/12-11/30/12
	DOE assumption of up to 27,387 MT of DUF6 liability
	$61,259,912
(in the form of DUF6 liability assumed by DOE)

	Total for Budget Period 1
	DOE assumption of up to 39,200 MT of DUF6 liability
	$87,670,184
(in the form of DUF6 liability assumed by DOE)

	Budget Period 2
Funding Period 1
12/1/12-3/12/13
	Appropriated Funding
	$45,720,000

	Budget Period 2
Funding Period 2
3/13/13-6/15/13 
	DOE transfer to USEC Inc. of ***** KgU EUP containing ***** SWU as the SWU Component and approximately 408,833.614 KgU as the Feed Component with Recipient to return approximately 408,833.614 KgU Feed Component to DOE as set forth in Attachment H.
	$44,378,055 (agreed value of ***** SWU transferred as a component of the EUP transferred to USEC Inc.)

	Budget Period 2
Funding Period 3
6/16/13-7/31/13 Estimated Government Cost Share
	Appropriated Funding
	$20,000,000

	Budget Period 2
Funding Period 4
8/1/13-9/30/13 Estimated Government Cost Share
	To be determined by DOE based upon the availability of appropriations or other sources of consideration
	TBD

	Budget Period 2
Funding Period 5
10/1/13-12/31/13 Estimated Government Cost Share
	To be determined by DOE based upon the availability of appropriations or other sources of consideration
	TBD

	Total Estimated Government Cost Share for Budget Period 2
	 
	$192,329,816

Budget Period 1 is divided into two funding periods.  DOE will accept title to DUF6 for the initial period (6/1/12-7/31/12) after award of this Agreement to allow the Recipient to begin work on approved activities.  Upon satisfying the conditions set forth in this Article 8.01 below, the Contracting Officer will issue written authorization allowing the Recipient to incur costs during the remainder of Budget Period 1 and DOE shall assume the remainder of the DUF6 liability to be assumed for Budget Period 1.  As of the execution date of Amendment No. 001, the Parties acknowledge and agree that the Contracting Officer 

issued the necessary written authorization required by the preceding sentence on 7/31/12.  DOE cost share for Budget Period 1 will be fulfilled through DOE's assuming title and liability for up to 39,200 MT of Depleted Uranium Hexafluoride (DUF6), which the parties agree will be treated as the Government providing $87,670,184 in cost share contributions (80% of the total estimated cost of the agreement for Budget Period 1).  

Among other requirements set forth elsewhere in this Agreement, DOE will not assume liability from the Recipient incurred beyond 7/31/12 unless (a) the Equipment Contract (Contract No. DE-NE0000488) has been executed and title to the Transferred Property (as defined therein) has been transferred to DOE and (b) the Recipient provides a revised application for financial assistance under this award to DOE no later than 7/24/12 that includes: (1) cost, schedule, Performance Indicator/Milestone detailed estimate (to Work Breakdown Structure level 3) for the Project; (2) a report detailing ACD's efforts to implement a governance structure demonstrating capability to provide overall management of the project (see Article 6.02) and demonstrating that the ACD has submitted to the Nuclear Regulatory Commission (NRC) a complete package requesting a Foreign Ownership, Control or Influence (FOCI) determination in a form acceptable to the NRC; and (3) a revised Attachment B that includes proposed Technical Milestone dates.  As of the execution date of Amendment No. 001, the Parties acknowledge and agree that Recipient has met the requirement in the preceding sentence.  

DOE will not issue written authorization permitting incurrence of costs under this Agreement during Budget Period 2 unless the Recipient submits the following to DOE no later than 9/21/12: (1) documentation evidencing the existence of ACD with, subject to obtaining necessary regulatory approvals, the governance structure referenced in Article 6.02; and (2) revised cost, schedule, Performance Indicator/Milestone detailed estimate (to Work Breakdown Structure level 3) for the American Centrifuge Cascade Demonstration Test Program.  Execution of this Amendment No. 001 acknowledges that the requirements of the preceding sentence have been met and written authorization to incur costs under this Agreement during Budget Period 2 was provided by the Contracting Officer.  

Budget Period 2 is divided into multiple funding periods.  For Budget Period 2, Funding Period 1, DOE has provided up to $45,720,000 for the Government Cost Share.  For Budget Period 2, Funding Period 2 (3/13/13-6/15/13), DOE has provided $44,378,055 in Government Cost Share (80% of the total estimated cost of the agreement for Budget Period 2, Funding Period 2).  This Cost Share was met via the agreed upon value of the SWU Component (***** SWU) of the EUP transferred to USEC Inc. in accordance with the provisions of Attachment H. For Budget Period 2, Funding Period 3, DOE will provide up to $20,000,000 for the Government Cost Share.  

At DOE's discretion, and subject to requirements elsewhere in this agreement and the availability of appropriations or other sources of consideration, DOE may provide funding for future funding periods through further amendment(s) of this Agreement.  DOE will not authorize continuation of the Project or provide Cost Share funding to reimburse costs incurred by the Recipient under this Agreement for future funding periods unless the Recipient has successfully met all milestones and provided to DOE all deliverables scheduled for performance or delivery before the end of Budget Period 2 Funding Period 3 as set forth in Attachment B Project Scope - Amendment #2 and demonstrates to DOE's satisfaction evidence of sufficient progress toward Recipient's ability to successfully meet the milestones scheduled to be completed during future funding periods.  In the event DOE provides Additional Funding (above the “Current Funding” provided by Amendment NO. 005 to this Agreement), DOE and Recipient shall amend this Agreement to reflect such Additional Funding.  

DOE will not assume liability or otherwise reimburse costs incurred by the Recipient under this Agreement above the Current Funding without first issuing written authorization permitting the Recipient to incur costs under this Agreement above the Current Funding.  Notwithstanding the above, there is no requirement for written authorization permitting the Recipient to incur costs under this Agreement constituting the Government Cost Share up to the Total Government Funds Obligated.  

In addition to other available remedies, in the event the conditions in this Section 8.01 for the continued funding of the program are not met, the Contracting Officer may suspend or terminate this award without recourse through corrective action by Recipient.  In the case of such a suspension or termination, costs shall be addressed as set forth in 10 CFR § 600.24.

		
	5.
	In accordance with Section 8.01 of the Agreement, the Recipient is authorized to expend unutilized funds from the previous Funding Period during Funding Period 3.

		
	6.
	All other terms and conditions of the Agreement remain the same.

	
			
	/s/ Karen S. Shears
Karen S. Shears
Contracting Officer
U.S. Department of Energy

6/13/13
Date
	 
	/s/ Philip G. Sewell
Philip G. Sewell
Senior Vice President
USEC Inc.

6-12-13
Date

/s/ Paul Sullivan            
Paul Sullivan
Project Manager
American Centrifuge Demonstration, LLC

6/12/2013                
DateEXHIBIT 10.4

EXHIBIT 10.4

Confidential information has been omitted in places marked “*****” and has been filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to this omitted information.

    
AMENDATORY AGREEMENT
Between
TENNESSEE VALLEY AUTHORITY
And
UNITED STATES ENRICHMENT CORPORATION

Date: May 20, 2013    TV‐05356W, Supp. No. 10

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 (USEC), a corporation created and existing under the laws of the State of Delaware;

W I T N E S S E T H:

WHEREAS, USEC has been purchasing power from TVA under Power Contract TV‐05356W, dated July 11, 2000, as amended (Power Contract), for the operation of the USEC uranium enrichment facilities near Paducah, Kentucky that USEC leases from the United States Department of Energy (DOE); and

WHEREAS, USEC and TVA wish to extend the term of the Power Contract in order to facilitate potential additional power supply which will be used to enrich nuclear material for non‐TVA consumers of nuclear fuel; and

WHEREAS, the parties also wish to provide a one-time option to replace USEC's Letter of Credit with a cash deposit to fulfill its performance assurance obligations during the remaining term of the Power Contract; 

NOW, THEREFORE, for and in consideration of the premises, the mutual agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and subject to the provisions of the TVA Act, the parties mutually agree as follows:

SECTION 1 - DEFINITIONS 

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

SECTION 2 - EXTENSION OF THE POWER CONTRACT

Effective as of the date first written above (Effective Date), section 2.1 of the Power Contract is hereby replaced with the following:

“This Contract shall become effective as of the date first above written and shall continue in effect through December 31, 2013; provided, however, that:

    
(a)    Subject to subsection (b) below, this Contract may be terminated by either Party upon completion of all transactions for Additional Energy entered into pursuant to section 2.2(e) of this Contract.  It is expressly recognized and agreed that a Party seeking to terminate this Contract in accordance with the preceding sentence, prior to December 31, 2013, shall provide 30 days' written notice prior to termination and that this Contract shall not terminate prior to September 30, 2013.

(b)    Furthermore, the provisions of sections 2.5(f), 2.9, and 2.10 of this Contract shall continue in effect until USEC ceases to lease or operate the 161-kV switchyard facilities at the DOE-owned uranium enrichment facilities leased by USEC.”

SECTION 3 - PERFORMANCE ASSURANCE OBLIGATIONS

It is recognized that (1) in accordance with the provisions of the Power Contract, TVA has determined that USEC presently has a CRR equal to a Below Investment Grade Rating, and (2) pursuant to Contract No. TV-05356W, Supp. No. 9, USEC has been providing Performance Assurance in the form of Weekly Prepayments and a Letter of Credit.  From and after the Effective Date, the parties agree that USEC shall provide and maintain Performance Assurance as set out in this section 3.

3.1  Performance Assurance.  It is understood and agreed that USEC is required to provide Performance Assurance as described in this section 3 until such time, if any, that USEC's CRR and corresponding Collateral Threshold are such that no Performance Assurance is due.  Currently USEC provides such Performance Assurance in the form of Weekly Prepayments and a Letter of Credit.  During the term of the Power Contract, USEC shall have the one time option, upon five (5) days notice to TVA, to replace the Letter of Credit with a cash deposit (Deposit).  If exercised, it is acknowledged and understood that such replacement of the Letter of Credit with a Deposit is and shall be a contemporaneous exchange for new value given.  Accordingly, from and after the Effective Date, USEC shall, subject to section 3.4, provide Performance Assurance in the form of Weekly Prepayments and either (i) a Letter of Credit or (ii) a Deposit.  If USEC is providing a Letter of Credit, the following section 3.1.1 shall apply.  If USEC is providing a Deposit in lieu of a Letter of Credit, section 3.1.2 shall apply, but in all cases USEC shall make the Weekly Prepayments described in section 3.3 in addition to the Letter of Credit or Deposit. 

3.1.1  Letter of Credit. Unless and until USEC elects to provide a Deposit under section 3.1.2, USEC shall provide TVA an irrevocable Letter of Credit, in a form acceptable to TVA.  It is recognized that as of the Effective Date, USEC has provided a Letter of Credit in the amount of *****, and this amount may be adjusted as determined by TVA in accordance with section 3.4 below to reflect changes in the price and usage of power.  USEC 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 USEC, including, but not limited to, minimum bill obligations.  Notwithstanding such Letter of Credit, USEC will remain obligated to make all payments as they become due under the Power Contract, together with all required Weekly Prepayments.  

3.1.2  Deposit.  By providing notice to TVA as set out in section 3.1 above, in lieu of the Letter of Credit under section 3.1.1, USEC may provide a Deposit to TVA in the amount of ***** or such different amount as determined by TVA in accordance with section 3.4 below to reflect changes in the price and usage of power.  The Deposit may be utilized by TVA to cover any amount arising from TVA's supply of power after the Effective Date for which the Power Contract provides and for which payments are not made by USEC.  Notwithstanding such Deposit, USEC shall remain obligated to make all payments as they become due under the Power Contract.  Moreover, should there be any use of the Deposit by TVA, USEC shall, upon notice from TVA, pay the amount necessary to fully replenish the Deposit at the time of its next Weekly Prepayment.

3.2  Interest.  If USEC provides a Deposit in lieu of a Letter of Credit, 
(a) effective with the date of the Deposit, simple interest shall accrue on any Deposit held by TVA on USEC's account at TVA's long-term cost of borrowing and shall be added to the Deposit every six (6) months (April 30 and October 31).
(b) At any such time that USEC's CRR and corresponding Collateral Threshold are such that no Performance Assurance is due under Article IV of the Power Contract or at the end of the term of the Power Contract, or any extension thereof, and after receipt from USEC of any remaining payments due under the Power Contract, TVA shall return to USEC an amount equal to:
(i)   the Deposit plus simple interest on the Deposit, at TVA's average long‐term interest rate, less 
(ii)   any amounts for which the Power Contract provides and for which payments have not been made by USEC.

3.3  Weekly Prepayments.  Notwithstanding the provisions of section 2.6 of the Power Contract, USEC shall pay TVA a designated sum of money per week in advance for power and energy used under the Power Contract (Weekly Prepayment).  As of the Effective Date, USEC shall pay TVA a Weekly Prepayment in the amount of *****.  Furthermore, notwithstanding any notice provided by TVA to the contrary prior to the Effective Date of this agreement, the Weekly Prepayment in the amount set forth above shall remain in effect until further notice is provided that an adjustment is needed in Performance Assurance as outlined in section 3.4 below.  

Such Weekly Prepayments shall be received by TVA no later than 12 noon CST or CDT, whichever is currently effective, on each Friday and shall be made electronically through Federal Reserve Fedwire Funds Service to TVA's account with the U.S. Treasury ***** or through Automated 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.  USEC 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 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 USEC of the overpayment and credit such amount to USEC's next Weekly Prepayment(s) until the overpayment is exhausted.

3.4  Adjustments to Performance Assurance.  The Performance Assurance provided for in this agreement is based on the price and usage of power and energy taken by USEC and may be adjusted by TVA as provided in the Power Contract.  If TVA determines that any adjustment is necessary, TVA will provide USEC with written notice of any increased or decreased amount of Performance Assurance required under the Power Contract.  For so long as USEC is providing a Letter of Credit, when an adjustment is required in the amount of the Letter of Credit, by no later than the date specified by TVA in such written notice, which in no case shall be less than ten (10) days after such notice is given, USEC shall modify the Letter of Credit to reflect the adjusted amount stated in the notice. If USEC is providing a Deposit in lieu of Letter of Credit, then when an adjustment is required in the amount of the Deposit, by no later than 

the date specified by TVA in such written notice, which in no case shall be less than five (5) days after such notice is given, USEC shall increase or decrease the Deposit to reflect the adjusted amount stated in the notice.  Furthermore, when an adjustment is required in the amount of Weekly Prepayments, by no later than the date specified by TVA in such written notice, which in no case shall be less than five (5) days after such notice is given, USEC shall provide TVA with the amount of the adjusted Weekly Prepayment.

If at a point in the future USEC notifies TVA that no further usage of power and energy is anticipated, or will be taken by USEC under the Power Contract, then, upon completion of all transactions for Additional Energy, no further Weekly Prepayments will be required by USEC and TVA will be obligated to release the Letter of Credit or return the Deposit to USEC, as applicable, in each case within fifteen (15) days, less any amounts withheld, including but not limited to any amounts that may be owing or due under the Power Contract and any amounts deemed necessary to true-up the Fuel Cost Adjustment as outlined in Supp. No. 4, to the Power Contract, as amended by Supp. No. 6.  It is recognized that in accordance with section 4.5 of the Power Contract, for so long as the Credit Risk, as determined by TVA, remains zero, no Performance Assurance would be required.  

3.5  Early Payment Credits.  Notwithstanding Section 2 of the Terms and Conditions set forth in Attachment 4 of the Power Contract, provided that USEC makes all Weekly Prepayments in full falling within that Billing Month on or before the Weekly Prepayment Due Dates, and USEC is not otherwise delinquent or in default under the Power Contract, then USEC 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.

3.6  Default.  Failure to comply with any of the above provisions shall constitute an immediate default under this contract.  Upon such default, TVA shall have the right to immediately discontinue the supply of power, upon five (5) days' written notice, to USEC.  

3.7  Performance Assurance Obligation.  It is acknowledged and understood that USEC's issuance to TVA of a Letter of Credit, the cash Deposit or other Performance Assurance in any form is a contemporaneous exchange for new value given, and among other things, is necessary to allow USEC to receive current and future power deliveries under the terms of the Power Contract.  

Discontinuance of supply under this section 3 shall not relieve USEC of its liability for minimum monthly charges or payment of past due amounts.  It is expressly recognized that in determining whether either party shall be entitled to terminate the Power Contract as provided in section 2 of this agreement, a discontinuance of supply in accordance with this section 3 shall not be considered a completion of any transaction for Additional Energy that has been entered into pursuant to section 2.2(e) of the Power Contract.  It is further expressly recognized that the terms set out in this section 3 shall apply to any power made available to USEC as Additional Energy in accordance with section 2.2(e) of the Power Contract.  TVA's election of any remedies under this agreement shall be without waiver of any other rights, including, without limitation, the right to damages for such default.  

SECTION 4 - TERMINATION OF AGREEMENT

As of the Effective Date of this agreement, Supp. No. 9 to the Power Contract is hereby terminated.  

SECTION 5 - 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/ Robert Van Namen_
Robert Van Namen
Senior Vice President and Chief Operating Officer 

TENNESSEE VALLEY AUTHORITY

By    _/s/ William D. Johnson_
William D. Johnson
President and Chief Executive Officer

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