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EXHIBIT 10.25
CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
MEMORANDUM OF AGREEMENT BETWEEN
THE UNITED STATES ACTING BY AND THROUGH
THE UNITED STATES DEPARTMENT OF STATE, AND
THE UNITED STATES DEPARTMENT OF ENERGY
AND
THE UNITED STATES ENRICHMENT CORPORATION,
FOR USEC TO SERVE AS THE UNITED STATES GOVERNMENT'S
EXECUTIVE AGENT UNDER THE AGREEMENT BETWEEN THE UNITED
STATES AND THE RUSSIAN FEDERATION CONCERNING THE
DISPOSITION OF HIGHLY ENRICHED URANIUM EXTRACTED FROM
NUCLEAR WEAPONS
This Memorandum of Agreement (Agreement) is entered into as of April 18, 1997,
by and among the UNITED STATES acting by and through the UNITED STATES
DEPARTMENT OF STATE (DOS), and the UNITED STATES DEPARTMENT OF ENERGY (DOE) and
the UNITED STATES ENRICHMENT CORPORATION (USEC) to define USEC's role as the
Executive Agent for the United States under the Agreement Between the
Government of the United States and the Government of the Russian Federation
Concerning the Disposition of Highly Enriched Uranium Extracted from Nuclear
Weapons (Russian HEU Agreement).
WHEREAS, the Government of the United States and the Government of the
Russian Federation, on February 18, 1993, entered into an agreement (the
Russian HEU Agreement) to arrange for the Russian Federation's safe and prompt
disposition for peaceful purposes of highly enriched uranium extracted from
nuclear weapons resulting from the reduction of nuclear weapons in accordance
with existing agreements related to arms control and disarmament;
WHEREAS, in 1993 USEC was designated as the Executive Agent for the
United States for implementing the Russian HEU Agreement, replacing the
Department of Energy (DOE);
WHEREAS, USEC, as Executive Agent for the United States, entered into an
agreement with Techsnabexport Co. Ltd. Executive Agent of the Ministry of
Atomic Energy, Executive Agent for the Russian Federation to purchase
low-enriched uranium derived from 500 metric tons of highly enriched uranium
(Implementing Contract);
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WHEREAS, the United States and USEC agree that the following common
objectives shall guide USEC's performance as the U.S. Executive Agent:
(a) to work with the Russian Executive Agent to ensure that the Russian
HEU Agreement and the Implementing Contract are fully implemented;
(b) to arrange with the Russian Executive Agent for delivery of
low-enriched uranium derived from 18 metric tons of HEU in calendar year 1997;
24 metric tons of HEU in calendar year 1998; and at least 30 metric tons of HEU
per year thereafter, until low-enriched uranium derived from at least 500
metric tons of HEU is converted and delivered;
(c) to agree with the Russian Executive Agent on price and volumes for
each year; and
(d) to agree with the Russian Executive Agent, as necessary, on
technical specifications for material delivered under the Implementing
Contract; and
WHEREAS, the Russian HEU Agreement provides that either party may change
its executive agent by providing thirty (30) days prior written notice.
NOW THEREFORE, the United States and USEC hereby agree as follows:
ARTICLE 1. DEFINITIONS
"Agreement" means this Memorandum of Agreement governing the terms under
which USEC serves as the U.S. Executive Agent, unless context otherwise
indicates.
"Implementing Contract" means the initial Implementing Contract for the
Agreement Between the Government of the United States of America and the
Government of the Russian Federation Concerning the Disposition of Highly
Enriched Uranium Extracted from Nuclear Weapons, Contract No. DE-AC01-
93NE50067, to purchase uranium derived from 500 metric tons of highly enriched
uranium, signed January 14, 1994 by USEC, as U.S. Executive Agent, and the
Russian Executive Agent; it includes any duly adopted amendment to that
contract and any subsequent contract(s) implementing the Russian HEU Agreement.
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"Privatization Date" means the date on which one hundred percent (100%)
of the ownership of the United States Enrichment Corporation is transferred to
private investors pursuant to the Energy Policy Act of 1992, Pub. L. 102-486
and the USEC Privatization Act, Pub. L. 104-134.
"Russian Executive Agent" means an entity designated by the Government of
the Russian Federation to serve as its executive agent for purposes of
implementing the Russian HEU Agreement and its agents or representatives.
"Russian HEU Agreement" means the Agreement Between the Government of the
United States of America and the Government of the Russian Federation
Concerning the Disposition of Highly Enriched Uranium Extracted from Nuclear
Weapons, signed February 18, 1993.
"SWU" means separative work unit.
"U.S. Executive Agent" or "Executive Agent for the United States" means
an entity designated by the Government of the United States to serve as its
executive agent for purposes of implementing the Russian HEU Agreement and its
agents or representatives.
"USEC" means the United States Enrichment Corporation, a wholly-owned
government corporation and its successors and assigns, including the
corporation created pursuant to Section 3105 of the USEC Privatization Act, or
an entity that succeeds to substantially all of USEC's assets or uranium
enrichment business, and affiliates thereof.
"USEC Privatization Act" means the USEC Privatization Act, Title III of
Pub. L. 104-134, enacted April 26, 1996.
ARTICLE 2. RELATIONSHIP OF THIS AGREEMENT TO THE RUSSIAN
HEU AGREEMENT AND THE IMPLEMENTING CONTRACT
Section 2.1 Interpretation. This Agreement defines USEC's role as U.S.
Executive Agent under the Russian HEU Agreement and is therefore intended to
guide USEC's implementation of the Implementing Contract. This Agreement shall
be interpreted consistent with the language and purposes of the Russian HEU
Agreement and the Implementing Contract and any amendments thereto.
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Section 2.2 Notice of Modifications to the Russian HEU Agreement. * * * In
the event that the Russian HEU Agreement is modified, DOS shall provide to USEC
the agreements, instruments, or documents related to said modification
necessary for USEC as U.S. Executive Agent to negotiate changes to the
Implementing Contract consistent with the changes made to the Russian HEU
Agreement. Nothing in this Agreement shall be construed as limiting the rights
of the United States to modify the Russian HEU Agreement or to exercise any
rights under the Russian HEU Agreement or any modification thereto. Nothing in
this Agreement shall be construed as limiting the rights of the United States
and the Russian Federation to agree to the appointment of multiple U.S.
Executive Agents or as limiting the right of the United States to appoint
multiple executive agents.
ARTICLE 3. DUTIES OF USEC AS EXECUTIVE AGENT
Section 3.1 Implementation of the Russian HEU Agreement and the Implementing
Contract.
(a) USEC shall use its best efforts to work with the Russian Executive
Agent to successfully implement the Russian HEU Agreement and the Implementing
Contract. * * *
(b) USEC agrees to continue to serve as U.S. Executive Agent under the
Russian HEU Agreement and the Implementing Contract until this Agreement is
terminated pursuant to Article 8. USEC shall fulfill all of the obligations
and exercise all rights of U.S. Executive Agent under the Implementing
Contract. It is not the responsibility of the United States to pay for
low-enriched uranium, or the SWU component or natural uranium component thereof
that has been ordered by USEC.
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Section 3.2 Consultation and Information to be Provided to the United States.
(a) USEC shall provide to DOS and DOE an annual report by March 1 of
each year, beginning after the Privatization Date, on its activities and
performance as U.S. Executive Agent in the preceding calendar year.
* * *
Section 3.3 * * * Reports Concerning Negotiations.
* * *
(b) USEC shall fully inform DOS following the conclusion of each of the
Annual Reviews with the Russian Executive Agent concerning the matters
discussed in those negotiations.
(c) USEC shall promptly inform DOS of the schedule for delivery and
price of the SWU and natural uranium components of the low-enriched uranium
agreed to be purchased from the Russian Executive Agent, * * *
Section 3.4 Cooperation on Implementation of Transparency Measures. USEC shall
cooperate with DOE and DOS on implementation of transparency measures at USEC's
facilities in the United States. Transparency measures are those established
pursuant to Article V.10 of the Russian HEU Agreement.
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ARTICLE 4. POWERS OF USEC AS EXECUTIVE AGENT
Section 4.1 Authority of USEC.
(a) Except as provided in Article 8, USEC is authorized to implement the
Russian HEU Agreement and the Implementing Contract as Executive Agent for the
United States.
(b) USEC shall obtain prior approval of the United States, through the
procedure described in Article 7, for any modifications to the Implementing
Contract, that (i) are inconsistent with the common objectives of the parties to
arrange with the Russian Executive Agent for delivery of low-enriched uranium
derived from at least 18 metric tons of HEU in calendar year 1997; 24 metric
tons of HEU in calendar year 1998; and at least 30 metric tons of HEU per year
thereafter, until low-enriched uranium derived from at least 500 metric tons of
HEU is converted and delivered; or (ii) could materially affect the rights,
interests or obligations of the United States or the Russian Federation.
Section 4.2 Limitation on Authority. Except as provided in Section 4.1, USEC
cannot obligate the United States without prior approval of the United States
through the procedure described in Article 7.
ARTICLE 5. RIGHTS OF USEC AS EXECUTIVE AGENT
Section 5.1 Proprietary and Commercial Information. DOE and DOS shall keep
proprietary and commercial information provided by USEC confidential,
consistent with and subject to applicable law, including the Freedom of
Information Act, 5 U.S.C. Section 552 (FOIA), and shall withhold such
information from release or disclosure to the extent permitted under applicable
law, including FOIA. DOE and DOS will not make a determination under FOIA to
release any information designated by USEC as proprietary, restricted
proprietary, confidential commercial, or entitled to a privilege, without
considering the views of USEC pursuant to Executive Order 12600. DOE and DOS
may share such information with other departments and agencies of the United
States when necessary or appropriate, subject to the foregoing confidentiality
restrictions.
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Section 5.2 Acquisition of Russian Low-Enriched Uranium.
(a) In its capacity as U.S. Executive Agent, USEC shall have the right
to acquire low-enriched uranium, or the SWU or natural uranium component of the
low-enriched uranium, delivered under the Implementing Contract and hold, use
and distribute such low-enriched uranium, SWU or natural uranium, consistent
with applicable laws and regulations.
(b) Except as provided in Article 8 and the USEC Privatization Act, an
agreement between USEC and the Russian Executive Agent on a price and schedule
for delivery imposes no liability on and conveys no interest to the United
States for such low-enriched uranium, or the SWU or natural uranium component
thereof, as applicable.
(c) Title to the low-enriched uranium, SWU or natural uranium, as
applicable, shall transfer to USEC upon delivery to USEC as provided under the
Implementing Contract.
ARTICLE 6. OWNERSHIP OF AND ACCESS TO DOCUMENTS; ADEQUATE AND PROPER
DOCUMENTATION
Section 6.1 Definitions. "Records" means books, papers, maps, photographs,
electronic or machine readable materials, or other documentary materials,
regardless of physical form or characteristics.
Section 6.2 USEC's Records. Subject to Section 6.3, all records acquired or
generated by USEC in connection with its performance as U.S. Executive Agent
shall be considered property of USEC.
Section 6.3 Inspection, Copying, and Audit of Records. All records acquired or
generated by USEC in connection with its performance as U.S. Executive Agent
shall be retained by USEC for a period of no less than seven (7) years after
they are created. All records acquired or generated by USEC in connection with
its performance as U.S. Executive Agent, in the possession of USEC, except
attorney-client or attorney work product privileged records, shall be subject
to inspection, copying, and audit by DOE or DOS at all reasonable times, and
USEC shall afford DOE or DOS reasonable facilities for such inspection,
copying, and audit; provided, however, that upon request by DOE or DOS, USEC
shall deliver such records to a location specified by DOE or DOS for
inspection, copying and audit.
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Section 6.4 Applicability. The provisions of Section 6.3 apply to all records
described therein without regard to the date or origination of such records.
ARTICLE 7. APPROVAL PROCEDURE
Section 7.l Procedure. Unless the Parties otherwise agree, the following
procedures shall apply for obtaining approval of items covered by Section
4.1(b):
(a) USEC shall submit the proposed action to DOS in writing. USEC
shall inform DOS of any time requirements for obtaining the necessary approval.
* * *
ARTICLE 8. CHANGE OR TERMINATION OF AGENCY
Section 8.1 Process.
(a) Change or Termination by the United States.
(1) Decisions by the United States to change the U.S.
Executive Agent (including the appointment of additional agents), or to
terminate this Agreement shall be made pursuant to this Section.
(2) DOS shall promptly notify USEC if a formal
recommendation to change the U.S. Executive Agent has been presented. In
that event, USEC shall be afforded reasonable opportunity to meet with and
present its position and any information it deems relevant to the United
States.
(3) In the event the United States decides to change the
U.S. Executive Agent, DOS shall provide no less than thirty (30) days
written notice to USEC.
(4) USEC shall have no right of review of a decision
pursuant to this Section to terminate this Agreement for USEC to serve as
the
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U.S. Executive Agent or to change the U.S. Executive Agent (including the
appointment of additional agents).
(b) Termination by USEC.
(l) USEC shall notify DOS and DOE in writing if it wishes
to terminate this Agreement to serve as the U.S. Executive Agent at least
thirty (30) days prior to USEC's proposed termination date.
(2) Termination by USEC shall be effective on the date
specified in the written notice by USEC to DOS and DOE unless otherwise
agreed by USEC and DOS and DOE.
Section 8.2 Transition Process. To assist in the transition process, the
following shall apply in the event there is a change in the U.S. Executive
Agent or this Agreement is terminated:
(a) Within forty-five (45) days after the change or termination, USEC
shall provide to the new executive agent(s) copies of all records acquired or
generated by USEC under this Agreement in the possession of USEC except those
records or portions of records that contain or reflect information that is (i)
privileged; or (ii) proprietary or commercial to USEC and could be withheld
from disclosure or release, consistent with and subject to applicable law,
including FOIA, 5 U.S.C. Section 552(b)(4). USEC, on a cost reimbursable
basis, shall use reasonable efforts to comply with any reasonable requests from
the new executive agent(s) for assistance in accomplishing the change in
executive agency.
(b) USEC shall obtain the concurrence of DOS and DOE for any agreements
between USEC and any new executive agent(s) concerning the transition process,
and during the transition period (including any agreements concerning uranium
received under the Russian HEU Agreement).
(c) After USEC has been informed by DOS that this Agreement will be
terminated, USEC shall immediately inform the Russian Executive Agent of the
effective date after which USEC will no longer be U.S. Executive Agent.
(d) Except as provided in Section 8.2(e), upon termination of USEC as the
U.S. Executive Agent, future rights and obligations under the Implementing
Contract shall be transferred to any new U.S. Executive Agent designated by the
United
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States, and USEC shall be released from any future liability accruing from that
date forward including liability to the Russian Executive Agent.
(e) USEC shall have the right and obligation to pay for and take delivery
of low-enriched uranium or the SWU component or natural uranium component
thereof, as applicable, that is to be delivered in the calendar year of the
date of termination and the following calendar year, if USEC and the Russian
Executive Agent have agreed upon a price and quantity or a price is applicable
pursuant to Sections B.06 and H.08 of the Implementing Contract.
* * *
* * *
ARTICLE 9. ALLOCATION OF LIABILITIES
Section 9.1 USEC's Liabilities. Subject to Article 8, USEC shall be liable for
fulfilling its obligations as U.S. Executive Agent as provided in the Russian
HEU Agreement and the Implementing Contract.
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Section 9.2 Liabilities of the United States.
(a) Except as provided in Sections 31l2(b)(3) and (4) of the USEC
Privatization Act concerning the natural uranium component, the United States
shall not be liable for USEC's obligations under the Implementing Contract and
this Agreement.
(b) If this Agreement is terminated, the United States shall reimburse
USEC for any outstanding balance of advance payments made by USEC to the
Russian Executive Agent, subject to Section 8.2(e), provided the advance
payments were approved by DOS and DOE before they were made.
Section 9.3 Force Majeure. Neither the United States nor USEC shall be liable
for any delay in, or prevention of, performance of its obligations under this
Agreement to the extent due to a "Force Majeure." A Force Majeure shall mean
any event arising from or related to causes beyond the control of a party that
causes a delay in or prevents the performance of such party's obligation under
this Agreement, including, acts of God, war, insurrection, civil disturbance,
acts or omissions of the other party or acts or omissions by any governmental
authority.
ARTICLE 10. ADMINISTRATIVE PROVISIONS
Section l0.l Notices. Unless otherwise agreed by the parties, communications
concerning this Agreement shall be made to the following:
FOR THE UNITED STATES:
DOE:
* * *
U.S. Department of Energy
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
DOS:
* * *
U.S. Department of State
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
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FOR USEC:
United States Enrichment Corporation
* * *
2 Democracy Center
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The effective date of any communication shall be the date of the receipt of
such communication by the addressee.
Section 10.2 Applicable Law. This Agreement shall be governed and construed in
accordance with the laws of the United States of America.
Section 10.3 Further Assistance. DOE and DOS, and USEC shall provide such
information, execute and deliver any agreements, instruments and documents and
take such other actions as may be reasonably necessary or required, which are
not inconsistent with the provisions in this Agreement and which do not involve
the assumption of obligations other than those provided for in this Agreement,
in order to give full effect to this Agreement and to carry out its intent.
DOE and DOS will also use best efforts to obtain from other agencies
cooperation necessary to facilitate implementation of this Agreement.
ARTICLE 11. MODIFICATIONS AND TERM
Section 11.1 Modifications. This represents the total understanding of the
Parties, and no change to this Agreement shall be valid or binding unless such
change is agreed to in writing by the Parties.
Section 11.2 Term. This Agreement shall become effective on the Privatization
Date and, unless otherwise agreed to by the Parties, shall remain in effect
until the earlier of the date this Agreement is terminated pursuant to Article
8 or the Implementing Contract is terminated pursuant to the terms thereof.
ARTICLE 12. MISCELLANEOUS
Section 12.1 Survival. The provisions set forth in Articles 8, 9, 10, and 12
shall survive termination of this Agreement.
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IN WITNESS WHEREOF, the UNITED STATES and USEC have caused this
Agreement to be executed and delivered as of the date first written and hereby
affix the signatures of their duly authorized representatives:
THE UNITED STATES
UNITED STATES DEPARTMENT OF STATE
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ 28 April 1997
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▇▇▇▇ ▇. ▇▇▇▇▇
Under Secretary of State
for Arms Control and International Security Affairs
AND
UNITED STATES DEPARTMENT OF ENERGY
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Deputy Secretary of Energy
AND
UNITED STATES ENRICHMENT CORPORATION
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
President and Chief Executive Officer
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