ML20154A586

Provides Executed Payment Surety Bond & Standby Trust Agreement to NRC in Encl 1 & 2 Respectively,To Address Decommissioning Funding Liability for Us Enrichment Corp After Privatization

ML20154A586
Person / Time
Site:	Portsmouth Gaseous Diffusion Plant, Paducah Gaseous Diffusion Plant
Issue date:	07/27/1998
From:	Toelle S UNITED STATES ENRICHMENT CORP. (USEC)
To:	Pierson R NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM), NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS)
References
GDP-98-0151, GDP-98-151, NUDOCS 9810020351
Download: ML20154A586 (18)

Text

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j USEC

. A Global Energy compar>y i

July 27,1998 GDP 98-0151 Mr. Robert C. Pierson Chief, Special Projects Branch 1

Division of Fuel Cycle Safety and Safeguards, NMSS Attention: Document Control Desk U.S. Nuclear Regulatory Commission Washington, D.C. 20555-0001 Paducah Gascous Diffusion Plant (PGDP)

Portsmouth Gaseous Diffusion Plant (PORTS)

Docket Nos. 70-7001 and 70-7002

Dear Mr. Pierson:

The United States Enrichment Corporation (USEC) is providing to the Nuclear Regulatory Commission (NRC) a copy of the executed Payment Surety Bond and Standby Trust Agreement, in Enclosures 1 and 2 respectively, that have been executed to address the decommissioning funding liability for USEC after privatization. These instruments are effective July 28,1998. The amount of the bond funding is based on the revised Decommissioning Funding Programs (DFPs) for the Paducah and Portsmouth Gaseous Diffusion Plants which have been adjusted to reflect the agreement between USEC and the Department of Energy (DOE) regarding uranium tails that will be transferred to DOE. The revised DFPs will be provided to the NRC on July 28,1998. Originals of the funding instruments will be provided to the NRC after the privatization of USEC.

Any questions related to this subject should be directed to Mark Lombard at (301) 564-3248. The new commitment contained in this submittal is that originals of the decommissioning funding instruments will be provided to the NRC after the privatization of USEC.

Sincerely, 1

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1 Steven A. Toelle Nuclear Regulatory Assurance and Policy Manager

- () b 9810020351 980727/

k PDR ADOCK 07007001 C

PDR 6903 Rockledge Drive, Bethesda, MD 20817-1818 Telephone 301-564-3200 Fax 301-564-3201 http://www.usec.com Omces in Livermore, CA Paducah, KY Portsmouth, OH Washington, DC

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i GDP 98-0151 Payment Surety Bond 1

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PAYMENT SURETY BOND Date bond executed:

July 24,1998 Effective Date:

July 28,1998 Principal:

United States Enrichment Corporation 6903 Rockledge Drive Bethesda, MD 20817 Type of organization:

Publicly-held Corporation NRC certificate of compliance number:

GDPI and GDP2 Name and address of facility:

Portsmouth Gaseous Diffusion Plant Paducah Gaseous Diffusion Plant Amounts for decommissioning activity guaranteed by this bond:

$55,500,000.00 Sureties:

Liberty Mutual Insurance Company 1211 Avenue of the Americas New York, NY 10036 Type of Organization:

Corporation State of incorporation:

MA Liberty Mutual Insurance Company is Treasury Listed in all 50 States of the United States of America.

Liberty Mutual Bond Number:

M Safeco insurance Company of America 2 Iludson Place - 4* Floor lloboken, NJ 07030 Type of Organization:

Corporation State of Incorporation:

WA Safeco insurance Company of America is Treasury Listed in all 50 States of the United States of America.

Surety's Bond Number:

M Total Penal Sum of bond:

$55,500,000.00 l

Know all persons by these presents, That we, the Principal and Sureties hereto, are firmly bound to the U.S.

l Nuclear Regulatory Commission (herein called NRC), in the above penal sum for the payment of which we bind ourselves, our heirs, executors, administrators, successors, and assigns jointly and ses erally; provided that, where the Sureties are corporations acting as co-sureties, w e, the Sureties, bind ourselves in such sum l

" jointly and severally" only for the purpose of allowing a joint action or actions against any or all of us.

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and for all other purposes each Surety binds itself, jointly and severally with the Principal, for the payment of such sum only as is set forth opposite the name of such Surety; but if no limit ofliability is indicated, the limit of liability shall be the full amount of the penal sum.

1 WHEREAS, the NRC, an agency of the U.S. Govemment, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974, has promulgated regulations in Title 10, Chapter 1 of the Code of Federal Regulations, Part 76, applicable to the Principal, which require that the holder of a certificate of compliance for a gaseous diffusion plant, or an applicant for a certificate of compliance for such a facility provide financial assurance that funds will be available when needed for those aspects of the ultimate disposal of waste and disposition of depleted uranium, decontamination and decommissioning of such a facility which are the financial responsibility of such holder or applicant (collectively,

" decommissioning");

NOW, THEREFORE, the conditions of the obligation are such that if the Principal shall faithfully, before the beginning of decommissioning of each facility identified above, fund the standby trust fund in the amount (s) identified above for the facility; Or, if the Principal shall fund the standby trust fund in such amount (s) after an order to begin facility decommissioning is issued by the NRC or a U.S. district court or other court of competentjurisdiction; Or, if the Principal shall provide alternate financial assurance and obtain the written approval of the NRC of such assurance, within 30 days after the date a notice of cancellation from the Sureties is received by both the Principal and the NRC, then this obligation shall be null and void; otherwise it is to remain in full force and effect.

The Sureties shall become liable on this bond obligation only when the Principal has failed to fulfill the conditions described above. Upon notificanon by the NRC that the Principal has failed to perform as guaranteed by tha bond, the Sureties shall place funds in the amount guaranteed for the facilities into the standby trust ftmd established by the Principal with First Union National Bank pursuant to the Standby Trust Agreement d ted 7/28/98.

The liability of the Sureties shall not be discharged by any payment or succession of payments hereunder, unless and until such payment or payments shall amount in the aggregate to the penal sum of the bond, but in no event shall the obligation of the Sureties hereunder exceed the amount of said penal sum.

The Sureties may cancel the bond by sending notice of cancellation by certified mail to the Principal and to the NRC provided, however, that cancellation shall not occur during the 90 days beginning on the date of receipt of the notice of cancellation by both the Principal and the NRC, as evidenced by the return receipts.

The Principal may teiminate this bond by sending written notice to the NRC and to Sureties 90 days prior to the proposed date of termination, provided, however, that no such notice shall become effective until the Sureties receive written authorization for termination of the bond from the NRC.

The Principal and Sureties hereby agree to adjust the penal sum of the bond yearly so that the amounts guaranteed hereby, plus the value of the government securities deposited in an external sinking fund by the Principal, are sufficient to meet the Principal's fundi,g obligation with respect to decommissioning of the facility pursuant to the Decommissioning Funding Program established by the Principal; provided that the penal sum does not increase by more than 20 percent in any one year, and no decrease in the penal sum takes place without the written permission of the NRC, if any part of this agreement is invalid, it shall not affect the remaining provisions w hich will remain valid and enforceable.

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j In Witness Whereof, the Principal and Surety (ies) have executed this financial guarantee bond and have affixed their seals on the date set fonh above.

The persons whose signatures appear below hereby certify that they are authorized to execute this surety bond on behalf of the Principal and Surety (ies).

Principal:

United States Enrichment Cor ration Signature:

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Name:

Sarah A.

Van Lierde

Title:

Treasurer Corporate Seal:

Corporate Sureties Liberty Mutual Insurance Company 1

1211 Avenue of the Americas New York, NY 10036 i

State of incorporation:

MA Liability Limit:

$373,888,000 Signature:

s). k Nam and

Title:

Chad Anderson, Attorney-In-Fact Corporate Seal:

Safece Insurance Company of America 2 Hudson Place,4* Place Hoboken NJ 07030 State ofIncorporation:

WA Liability Limit:

$ 106,763,000 f/ f'i Signature:

Jf Name and

Title:

Glenn Pelletiere, Attorney-In-Fact Corpo at: Scal:

Bond Pramium:

$105,341

THl$ POWER OF ATTORNEY IS NOT VALID UNLESS IT IS PRINTED ON RED BACKGROUND.

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This P w:r of Att:rn:y limit 2 th) tct of th:se n med herrin and thIy haV3 no authority to bind tha CompIny excipt in tha manner and to the extent herein stated.

I LIBERTY MUTUAL INSURANCE COMPANY BOSTON, MASSACHUSETTS POWER OF A1TORNEY KNOW ALL PERSONS BY THESE PRESENTS: That Liberty Mutual Insurance Company (the " Company *), a Massachusetts mutual insurance company, pursuant to and by authority of the By-law and Authorization hereinatter set forth. does hereby name, constituto and appoint, DAVID PESCE, JOHN A. DUFFY, PAUL W. KRAUS, WASYL KRASNOBRYZYJ, CHAD ANDERSON, LORIANN FAY, SHIRLEY PERSAUD, MARGARET BAMBARA, INGRID MALCOLM, MATTHEW GALABURRI, CHEHAB CHEHAB, ALL OF THE CITY OF NEW YORK, STATE OF NEW YORK....................

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, each individually if tnere be more than one named, its true and lawful attomeyen-fact to make, execute, seal, acknowledge and deliver. for and on its behalf as surety and as sts act and deed, any and all undertasungs. bonos, recognizances and other surety ooligations. The execution of such bonds or undertakings, in pursuance of inese presents.

shtll bs as binding upon the Company as if they had been duly signed by the president and attested by the secretary of the Company in their own proper persons.

,Y ThIt this power is made and executed pursuant to and by authonty of the following By law and Authonzation-e k

ARTICLE XVI. Execution of Contracts: Section 5. Surety Bonds and Undertakings.

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Any officer or other official of the company authonzed for that purpose in wnting by the chairman or the president. and subject to such hmitations as the cha rman g

or the president may presenbe, shall appoint such attomeys-in-fact, as may be necessary to act in behalf of the company to mane, execute. seat, acknowledge and h

deliver as surety any and all undertakings. bonds, recognizances and other surety obligations. Such attomeys-in fact, subject to the limitations set forth in their

.O g rsspective powers of attomey shall have 'ull power to bind the Company by their signature and execution of any such instruments and to attach thereto the seal of 1

,d g the company When so executed such instruments shall be as bending as if signed by the president and attested by the secretary.

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c) By the following instrument the chairman or the pres dent has authonzed the officer or other official named therein to appoint attomeysun fact:

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$2 Pursuant to Article XVI. Section 5 of the By laws. Assistant Secretary Gamet W. Elliott is hereby authorized to appoint sucn attorneys-in-fact as may be necessary gh to act in behalf of the compar'y to make, execute, seal, acknowledge and deliver as surety any and all undertakings, bonds. recognizances and other surety g

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,V That the Dy-law and the Authonzation above set forth are true copies thereof and are now in full force and effect.

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IN WITNESS WHEREOF, this instrument has been subscnbed by its authonzed officer and the corporate seal of the said Liberty Mutual Insurance Company has been affixed c) t SI g

thereto in Plymouth Meeting, Pennsylvania this day of October 97 g

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C LIBERTY MUTUAL INSURANCE COMPANY

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Gamet W. Elliott. Assistant Secretary p{

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. before me, a Notary Pubhc, personally came the individual, known to me to be the therein E9 desenbed individual and officer

- rty Mutual Insurance Company who executed the preceding instrument, and he acknowledged that he executed the same and that the.hh O$

sest affixed to the said pr. ding,ipstrtirttent is the corporate seat of said company; and that said corporate seal and his signature subsenbed thereto was duty affixed and C9 subsenbed to the said i tfyn Dyhd direction of the said company.

Oh IU Z f %s Q oq IN TESTIMON' REOF,I nereun Istmy hand and affix my official sesl at Ptymouth Mee4ng PA. the day and ear firsi above wntten.

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CERTIFICATE Qhf?$

1, the uridersigned. Ass,

ary of Liberty Mutual Insurance Company, do hereby certify that the ongenal power of attorney of which the foregoing is a full, true and correct copy, is in full force and effect on the date of this certificate. and I do further certify that the officer who executed the said power of attomey wes one of the officers specialty authonzed by the chairman or the president to appoint any attomey in fact as provided in Article XVI. Section 5 of the By-laws of Liberty Mutual Insurance Company.

This certificate may be signed by facsimile under and t'/ authonty of the following vote of the board of directors of Liberty Mutualinsurance Company at a meeting duly called and held on the 12th day of March,1980, VOTED that the facsimile or mechant-Wy reproduced signature of any assistant secretary of the company wnerever appeanng upon a certified copy of any power of attomey issued by the company, shall be vahd and banding upon the company with the same force and ef'ect as though manually affixed said company. this _24th day y IN TESTIMONY WHEREOF I have hereunto subsCnbed my name and afftned. the corporate seal of the July as _9fL_

f SW /?Wm As#6 tant @etary Q 90 THl') POWER OF ATTORNEY MAY NOT BE USED TO EXECUTE ANY BOND WITH AN INCEPTid.NETd AFTER

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CITY OF NEWYORK )

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On this 24tday of july in the year 1998, before me personally came to me known, who, being by me duly sworn, did depose and say that Chad Anderson he/she resides at New York. New York. that he/she is the Attorney-In-Fact of _ Liberty Mutual Insurance company

. the corporation described in and which executed the above instrument; and that he/she signed his/her name thereto by order of the Board of Directors of said Corporation.

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NOTARY PUBUC OR COMMISSIONER OF DEEDS CAlllLLE IRAITLAND Notary Public, State of NewYork No. 01MA6006044 i

Certi file in N York Commiselon Empires April 20,20 o O

tue,,7 gre g taadernie c p^any staaetery salames sheet (dettans la thousande Assets D--knu_we IIAs9As asredend M 4.444,5c Real1^^^-

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COUN!YOFSurtCLK DennisLangweR,beingdidyseseni,says thatheisNFeeddestandOsmyeseneredthonynessedhussanonComyemy Wut

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POWER sAFECO INSURANCE COMPANY OF AMER CA cENERL IN3UNCE COMPANY oF AMERICA OF ATTORNEY HOME OFFICE: sAFECO PLAZA sE ATTLE. w ASHINoTON ee ts5 No.

7253 KNOW ALL BY THESE PRESENTS:

That SAFECO INSURANCE COMPANY OF AMERICA and GENERAL INSURANCE COMPANY OF AMERICA, each a Washington corporation. does each hereby appoint asVIVIAN CARTl; DEBRA A. DEMING: BARBARA GUZZARD0; GLENN PELLETIERE BETTY CALDERON, New York, Yorks***"******'''''''''''''''''''''''''''''''''''''''''''':

New its true and lawful attorney (s)-in-f act, with full authonty to execute on its behalf fidelity and surety bonds or undertakings and other doctments of a smlar character issued in the course of its business, and to bind the respective compary/ thereby.

IN WITNESS WHEREOF, SAFECO INSURANCE COMPANY OF AMERICA and OENERAL INSURANCE COMPANY OF AMERICA have each executed and attested these presents this 131h day of June

, ig 94 CERTIFICATE Extract frorn the By-Laws of SAFECO INSURANCE COMPANY OF AMERICA and of GENERAL INSURANCE COMPANY OF AMERICA:

" Article V. Section 13. - F0ELITY AND SURETY BONDS... the President. any Vice President, the Secretary. and ary Assistant Vice Pr:sident appointed for that purpose ty the officer in charge of surety operations, shall each have authority to appoint individuals as attorneys-in-f act or under other appropriate titles with authonty to execute on behalf of the compary fidelity and surety bonds and other documents of smlar character issued ty the Compary in the Course of its business... On any instrtmont making or evidencing such appointment, the signatures mau 5e affixed tr/ facsmle. On any instrtinent conferring such authority or on any bond or undertaking of the company, the seal, or a f acars e thereof may be impressed or affixed or in any other manner reproduced; provided, however, that the seal shall not be necessary tu the validly of any such instrument or undertaking."

Extract from a Resolution of the Board of Drectors of SAFECO INSURANCE COMPANY OF AMERICA and of GENERAL INSURANCE COMPANY OF AMERICA adopted JLAy 28. 1970.

"On any certificate executed by the Secretary or an assistant secretary of the Company setting out.

. (i) The provisions of Article V. Section 13 of the By-Laws, and (ii) A copy of the power-of-attorney appointment, executed pursuant thereto, and (iii) Certifying that said power-of-attorney appointment is in full force and ef fect.

the signature of the certifying officer may be by facsmie. and the seal of the Company map be a facsimile thereof.*

1, R A. Pierson. Secretary of SAFECO INSURANCE COMPAf.'Y OF AMERICA and of GENERAL INSURANCE COMPANY OF AMERICA, do n.orety certify that the foregoing extracts of the By-Lawt and of a Resolution of the Board of Directors of these corporations, and of a Power of Attorney issued pursuant thereto, are true ind correct, and that both the By-Laws, the Resolution and ths Power of Attorney are still in fuit f orce and ef f ect.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the facsutile seal of said corporation this 24th day of July

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s-EWE 7 1/03 R80'sterea traoemart of SAFECO Corporatiori.

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STATE OF NEWYORK )

CITY OF NEW YORK )

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COUNTY OF NEWYORK )

On this.24tday of July in the year 1998. before me personally came to me known, who, being by me duly sworn, did depose and say that Glenn Pelletier, he/she resides at New York. New York, that he/she is the Attornov-In-Fact of Safeco Insurance Company of America

. the corporation described in and which executed the above instrument; and that he/she signed his/her name thereto by order of the Board of Directors of said Corporation.

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S AFECO INSURANCE COMPANY OF AMERICA FINANCIAL STA TEMENT-DECEMBER 31,1997 SAFECO*

Assets Liabilities Cash and Bank Deposits _

(59,614,424)

Unearned Premiums.

$ 495.658.637

• Bonds - U.S. Government...

II1,496,033 Reserve for Claims and Claims Expense...

993,218,836 Funds Held Under Reinsurance Treaties

• Other Bonds.

1,519,901,291 4.850,453 i

Resen 3 for Dividends to Policyholders.

9,790.479

• 0tocks_

646,489,912 Additional Statutory Reserve Reserve for Commissions, Taxes and Real Estate.

46,949,745 Other Liabilities.

297.233.679 Agents' Balances or Uncollected Premiums.....

224.808,373 Total

$ 1.800,752,084 l

Accrued Interest and Rents e 36,410,732 Capital Stock -

$ 5,000.000 Other Admitted Assets 204,919,090 Paid in Surplus.-

11,139,941 Unassigned Surplus.......

914.468,727 Surplus to Policyholders 930,608,668 i

i Total Admitted Assets

$2,731,360,752 Total Liabilities and Surplus

$2,731,360,752

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• Bonds are stated at amortized or investment value; Stocks at Association Market Values. Secunties

!p SEAL 13 carried at $128,598,889 are deposited as required by law.

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1. MIC11 AEL C. PEll!RS, senior vice president of SAFECO Insuraace Company of America, do hereby certify that the foregoing is a correct statement of the Assets and Liabilities of said Corporation, as of December 31,1997, to the best of my knowledge and belief.

IN WITNESS WilEREOF. I have hereunto set my hand and affixed the seal of said Corporation at Seattle, Washington, this ist day of M 1998.

Senior Vice President

s. m sw e n.,sww woo mem a# smco carweien.

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l GDP 98-0151 i

Standby Trust Agreement l

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STANDBY TRUST AGREEMENT TRUST AGREEMENT, the Agreement entered into as ofToN M.1998 by and between the United States Enrichment Corporation, a Delaware chartend corporation, h'erein referred to as the " Grantor," and First Union National Bank, Corporate Trust Department,800 East Main Street, Lower Mezzanine, Richmond, VA 23219, the " Trustee."

WHEREAS, the U.S. Nuclear Regulatory Commission (NRC), an agency of the U.S. Government, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974, has promulgated j

regulations in Title 10, Chapter I of the Code of Federal Regulations, Part 76. Rese regulations, applicable to the Grantor, require that a holder of, or an applicant for, a Part 76, certificate of compliance provide assurance that funds will be available when needed for required decommissioning activities.

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WHEREAS, the Grantor has elected to use a surety bond to provide part of such financial assurance for the i

facilities identified herein; and WHEREAS, when payment is made under a surety bond this standby trust shall be used for the receipt of such payment; and WHEREAS, the Grantor, acting through its duly authorized officers, has selected the Trustee to be the trustee under this Agreement, and the Trustee is willing to act as trustee, l

NOW, THEREFORE, the Grantor and the Trustee agree as follows:

I Section 1. Definitions. As used in this Agreement:

(a) ne term " Decommissioning" means those aspects of the ultimate disposal of waste and disposition l

ofdepleted uranium, decontamination and decommissioning ofthe Paducah and Portsmouth Gaseous DifNsion Plant (GDPs) which are the financial responsibility of the Grantor.

(b)

. He term " Grantor" means the United States Enrichment Corporation and any successors or assigns thereof.

(c)

The term " Trustee" means the trustee who enters into this Agreement and any successor Trustee.

l Section2. CestsofDecomminsionino his Agreementpertainstothecostsofdecommissioningthematerials and activities identified in Certificate of Compliance Number GDP-1 and GDP-2 issued pursuant to 10 CFR Part 76.

Section 3. F=tahlichment of Fund. The Grantor and the Trustee hereby establish a standby trust fund (the Fund) for the benefit of the NRC. The Grantor and the Trustee intend that no third party have access to the Fund except as provided herein.

htinn 4. Pavmante Canatitutina the Fund Payments made to the Trustee for the Fund shall consist of cash, securities, or other liquid assets acceptable to the Trustee. The Fund is established initially as consisting of

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the property, which is acceptable to the Trustee, described in Schedule B attached hereto. Such property and any other property subsequently transferred to the Trustee are referred to as the " Fund," together with all earnings and profits thereca, less any payments or distributions made by the Trustee pursuant to this Agreement. De Fund shall be held by the Trustee, IN TRUST, as hereinafter provided. He Trustee shall not be responsible nor shall it undertake any responsibility for the amount of, or adequacy of the Fund, nor any

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duty to collect from the Grantor, any payments necessary to discharge any liabilities of the Grantor established by the NRC.

Section 5. Payment for Reauired Activities Snecified in the Plan. The Trustee shall make payments from the Fund to the Grantor upon presentation to the Trustee of the following:

a. A certificate duly executed by the Secretary of the Grantor attesting to the occurrence of the events, and in the form set forth in the attached Specimen Certificate, and

b. A certificate attesting to the following conditions:

(1)that decommissioning is proceeding pursuant to an NRC-approved plan.

(2)that the funds withdrawn will be expended for activities undertaken pursuant to that Plan, and (3)that the NRC has been given 30 days' prior notice of the Grantofs it.2nt to withdraw funds from the escrow fund.

i No withdrawal from the fund can exceed 10% percent of the outstanding balance of the Fund unless NRC approval is attached, in the event of the Grantors default or inability to direct decommissioning activities, the Trustee shall make payments from the Fund as the NRC shall direct, in writing, to provide for the payment of the costs ofrequired activities covered by this Agreement. He Trustee shall reimburse the Grantor, or other persons as specified by the NRC, from the Fund for expenditures for required activities in such amount as the NRC shall direct in writing. In addition, the Trustee shall refund to the Grantor such amounts as the NRC specifies in writing.

Upon refund, such funds shall no longer constitute part of the Fund as defined herein.

Section 6. Trust Manaaamant The Trustee shall invest and reinvest the principal and income of the Fund and keep the Fund invested as a single fund, without distinction between principal and income, in accordance with general investment policies and guidelines which the Grantor may communicate in writing to the Trustee from time to time, subject, however, to the provisions of this section. In investing, reinvesting, exchanging, selling, and managing the Fund, the Trustee shall discharge its duties with respect to the Fund solely in the interest of the beneficiary and with the care, skill, prudence, and diligence under the circumstances then prevailing which j

persons af prudence, acting in a like capacity and familiar with such matters, would use in the conduct of an enterpru e of a like character and with like aims; excent that-(a)

Securities or other obligations of the Grantor, or any other owner or operator of the facilities, or any of their affiliates as defined in the Investment Company Act of 1940, as amended (15 U.S.C. 80a-2(a)), shall not be acquired or held, unless they are securities or other obligations of the Federal or a State government; (b) ne Trustee is authorized to invest the Fund in time or demand deposits of the l

Trustee, to the extent insured by an agency of the Federal Government, and in obligations of L

the Federal Government such as GNMA, FNMA, and FHLM bonds and certificates or State and Municipal bont rated BBB or higher by Standard and Poor's or Baa or higher by l

l Moody's Investment Services; and i

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(c)

For a reasonable time, not to exceed 60 days, the Trustee is authorized to hold j

uninvested cash, awaiting investment or distribution, without liability for the payment of interest thereon.

Section 7. Commineline and Investment. The Trustee is expressly authorized in its discretion:

l (a)

To transfer from time to time any or all of the assets of the fund to any common, commingled, or collective trust fund created by the Trustee in which the Fund is eligible to i

l participate, subject to all of the provisions thereof, to be commingled with the assets of other trusts participating therein; and (b)

To purchase shares in any investment company registered under the Investment Company Act of 1940 (! S U.S.C. 80a-1 et seq.), including one that may be created, managed, underwritten, or to which investment advice is rendered, or the shares of which are sold by the Trustee. 'Ihe Trustee may vote such shares in its discretion.

Section 8. Fvnress Powers ofTreaa. Without in any way limiting the powers and discretion conferred upon the Trustee by the other provisions of this Agreement or by law, the Trustee is expressly authorized and j

empowered:

(a)

To sell, exchange, convey, transfer, or otherwise dispose of any property held by it, by public or private sale, rs necessary to allow duly authorized withdrawals at the joint request of the Grantor and the NRC or to reinvest in securities at the direction of the Grantor, (b)

To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted; (c)

To register any securities held in the Fund in its own name, or in the name of a nominee, and to hold any security in bearer form or in book entry, or to combine cenificates representing such securities with certificates of the same issue held by the Trustee in other fiduciary capacities, to reinvest interest payments and funds from matured and redeemed instruments, to file proper forms concerning securities held in the Fund in a timely fashion with appropriate government agencies, or to deposit or arrange for the deposit of such securities in a qualified central depository even though, where so deposited, such securities may be merged and held in bulk in the name of the nominee or such depository with other securities deposited therein by another person, or to deposit or arrange for the deposit of any securities issued by the U.S. Government, or any agency or instrumentality thereof, with a Federal Reserve bank, but the books and records of the Trustee shall at all times show that all such securities are pan of the Fund; (d)

To deposit any cash in the Fund in interestmg-beanng accounts maintained or savings certificates issued by the Trustee, in its separate corporate capacity, or in any other banking institution affiliated with the Trustee, to the extent insured by an agency of the Federal government; and (e)

To compromise or otherwise adjust all claims in favor of or against the Fund.

Section 9. T== and Fvnanca=- All taxes of any kind that may be assessed or levied against or in respect of the Fund and all brokerage commissions incurred by the Fund shall be paid from the Fund. All other expenses t

4

, - ~,...,. -.

incurred by the Trustee in connection with the administration of this Trust, including fees for legal services rendered to the Trustee, the compensation of the Trustee to the extent not paid directly by the Grantor, and all other proper charges and disbursements of the Trustee shall be paid from the Fund.

Section 10. Annual Valuation. After payment has been made into this standby trust fund, the Trustee shall annually, at least 30 days before the anniversary date of receipt of payment into the standby trust fund, furnish to the Grantor and to the NR.C a statement confirming the value of the Trust. Any securities in the Fund shall i

be valued at market value as of no more than 60 days before the anniversary date of the establishment of the Fund. De failure of the Grantor to object in writing to the Trustee within 90 days after the statement has been fumished to the Grantor and the NRC, shall constitute a conclusively binding assent by the Grantor, barring the Grantor from asserting any claim or liability against the Trustee with respect to the matters disclosed in the statement.

Section 11. Advice of Counsel. De Trustec may from time to time consult with counsel with respect to any question arising as to the construction of this Agreement or any action to be taken hereunder. He Trustee shall be fully protected, to the extent permitted by law, in acting on the advice of counsel.

Section 12. Tru=*~ Comnen==tian. De Trustee shall be entitled to reasonable compensation for its services as agreed upon in writing with the Grantor. (See Schedule C.)

)

i kgtion 13. Snecaccar Trud~. Upon 90 days notice to the NRC, the Trustee may resign; upon 90 days notice to WRC and the Trustee, the Grantor may replace the Trustee; but such resignation or replacement shall not be effective until the Grantor has appointed e successor Trustee and this successor accepts the appointment.

He successor Trustee shall have the same powers and duties as those conferred upon the Trustee hereunder.

Upon the successor Trustee's acceptance of the appointment, the Trustee shall assign, transfer, and pay over to the successor Trustee the funds and propeities then constituting the Fund. If for any reason the Grantor cannot or does not act in the event of the resignation of the Trustee, the Trustee may apply to a court of competentjurisdiction for the appointment of a successor Trustee or for instructions. The successor Tmstee shall specify the date on which it assumes administration of the trust in a writing sent to the Grantor, the NRC, and the present Trustee by certified mail 10 days before such charges becomes effective. Any expenses incurred by the Trustee as a result of any of the acts contemplated by this section shall be paid as provided in Section 9.

Section 14. In=tme* ions to the Trn**. All orders, requests, and instructions by the Grantor to the Trustee shall be in writing, signed by such persons as are signatories to this agreement or such other designees as the Grantor may designate in writing. De Trustee shall be fully protected in acting without inquiry in accordance with tha grantor's orders, requests, and instructions. If the NRC issues orders, requests, or instructions to the Trustee these shall be in writing, signed by the NRC, or its designees, and the Trustee shall act and shall be fully protected in acting in accordance with such orders, requests, and instructions. He Trustee shall have the right to assume, in the absence of written notice to the contrary, that no event constituting a change or a termination of the authority of any person to act on behalf of the Grantor, or the NRC, hereunder has occuned.

He Trustee shall have no duty to act in the absence of such orders, requests, and instruction from the Grantor and/or the NRC, except as provided for herein.

Section 15. AmanAmaat of Anreement nis Agreement may be amended by an instrument in writing executed by the Grantor, the Trustee and the NRC, or by the Trustee and the NRC, if the Grantor ceases to exist.

Section 16. Irrevocability and Termination. Subject to the right of the parties to amend this Agreement as provided in Section 15, this trust shall be irrevocable and shall continue until terminated at the written

agreement of the Grantor, the Trustee, and the NRC, or by the Trustee and the NRC, if the Grantor ceases to exist. Upon termination ofthe trust, all remaining trust property, less final trust administration expenses, shall be delivered to the Grantor or its successor.

Section 17. Immunity and Indemnification. The Trustee shall not incur personal liability of any nature in connection with any act or omission, made in good faith, in the administration of this trust, or in carrying out any directions by the Grantor, or the NRC, issued in accordance with this Agreement. The Trustee shall be indemnified and saved harmless by the Grantor or from the trust fund, or both, from and against any personal liability to which the Trustec may be subjected by reason of any act or conduct in its official capacity, including all expenses reasonably incurred in its defense in the event the Grantor fails to provide such defense.

Section 18. ~niis Agreement shall be administered, construed, and enforced according to the laws of the United States.

Section 19. Internretation and Severability. As used in this Agreement, words in the singular include the plural and words in the plural include the singular. The descriptive headings for each section of this Agreement shall not affect the interpretation or the legal efficacy of this Agreement. If any part of this agreement is invalid, it shall not affect the remaining provisions which will remain valid and enforceable.

l a

l IN WITNESS WHEREOF the parties have caused this Agreement to be executed by the respective officers l

e duly authorized and the incorporate seals to be hereunto afHxed and attested as of the date first written above.

ATTEST:

United States Enrichment Co ration 0n Nh hbdb

[ Jar Van L'icr'de M. &h(OffA{lMd,-

Treasurer NWA 0mefy C4q..

5 04\\Kh5M E)(pifE5 2lul2aD \\

ATTEST:

First U n National Bank By-1 Jo Edwards C

rate Trust OfUcer l

'Y I