SNM Lease No:CI/ML/3
THIS LEASE (sometimes hereinafter referred to as the "Lease"),
entered into this 7th day of February, 1969, by and between the
UNITED STATES ATOMIC ENERGY COMMISSION (hereinafter called the
"Commission") acting for and on behalf of the Government of t-
he UNited States of America (hereinafter sometimes called the "
Government"), and the Government of the Republic of China (here-
inafter called the "Lessee");
WHEREAS, the Parties hereto desire to establish the terms and c-
onditions applicable to the distribution of special nuclear mat-
erial to the Lessee pursuant to the Agreement for Cooperation;
and
WHEREAS, this Lease is authorized and executed on the part of t-
he Commission under the United States Atomic Energy Act of 1954,
as amended, and the Agreement for Cooperation undertaken pursua-
nt thereto;
NOW, THEREFORE, the Parties hereto do mutually agree as follows:
ARTICLE Ⅰ
DEFINITIONS
As used in this Lease:
a The term "Act" means the Atomic Energy Act of 1954, as amended
.
b The term "Agreement for Cooperation" means the Agreement for
Cooperation between the Government of the United States of Am-
erica and the Government of the Republic of China signed at W-
ashington on July 18,1955, as amended.
c The terms "Atomic Energy Commission", "Commission" or "AEC"me-
an the United States Atomic Energy Commission or any duly aut-
horized representative thereof.
d The term "base charge" means the United States dollar amount
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per unit of normal or depleted uranium or special nuclear mat-
erial in standard form and specification in effect as of the
time any particular transaction under this Lease takes place,
as set forth in schedules published by the Commission in the
United States Federal Register from time to time.
e The term "blending" means the altering of the isotopic compo-
sition of a quantity of an element by means other than through
the irradiation of material in a nuclear reactor.
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f The term "Commission facility" means a laboratory, plant, off
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ice, or other establishment operated by or on behalf of the C-
ommission.
g The term "Commission's established specifications" means the
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specifications for purity and other physical or chemical prop-
erties of normal or depleted uranium or special nuclear mater-
ial, as published by the Commission in the United States Fede-
ral Register from time to time.
h The terms "consumed" or "consumption" mean the destruction,
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burnup, loss or disposition of material in such manner that it
cannot be economically recovered for further use, material un-
accounted for, or changes in the composition of material due
to blending of different assays of material or other alterati-
on of the isotopic ratio resulting in the reduction in value
of such material.
i The term "depleted uranium" means uranium having a weight f-
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raction U-235 of less than 0.00711.
j The term "established Commission pricing policy" means any
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applicable price or charge in United States dollars in effec-
t at the time any particular transaction under this lease tak-
es place (i) published by the Commission in the United States
Federal Register, or (ii) in the absence of such a published
figure, determined in accordance with the Commission's Pricing
Policies. A statement of such Pricing Policies will be furnis-
hed Lessee upon request. The Commission's published prices and
charges, as well as its Pricing Policies, may be amended from
time to time.
k The term "normal uranium" means uranium having 0.00711 weight
fraction U-235.
l The term "persons acting on behalf of the Commission" inclu-
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des employees and contractors of the Commission, and employees
of such contractors, who implement or participate in the impl-
ementation of this Lease pursuant to their employment or their
contracts with the Commission.
m The term "source material" means (l) uranium, thorium, or a-
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ny other material which is determined by the Commission pursu-
ant to the provisions of section 61 of the Act to be source m-
aterial; or (2) ores containing one or more of the foregoing
materials, in such concentration as the Commission may by reg-
ulation determine from time to time.
n The term "special nuclear material" means (l) plutonium, ur-
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anium-233, uranium enriched in the isotope 233 or in the isot-
ope 235, and any other material which the Commission determin-
es pursuant to the provisions of section 51 of the Act to be
special nuclear material, but does not include source material
;or (2) any material artificially enriched by any of the fore-
going, but does not include source material.
o The term "standard form" means the chemical form of normal
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or depleted uranium or special nuclear material, as published
by the Commission in the United States Federal Register from
time to time.
p The term "value" means the United Stated dollar amount dete-
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rmined by multiplying the applicable base charge by the number
of units, or fractions thereof, of normal or depleted uranium
or special nuclear material involved, whether or not such mat-
erial is in standard form or meets the Commission's establish-
ed specifications; provided, however, where uranium enriched
in the isotope U-235 subject to this Lease has its isotopic r-
atio altered by the generation of uranium isotopes U-232 and
U-233 during irradiation of the material in a nuclear reactor,
the term "value, " for the purpose of determining provision-
al payments for consumption of such material, means the dollar
amount determined by multiplying the number of grams of U-235
by the base charge per gram of U-235 calculated from subparag-
raph 3(a) of the United States Federal Register Notice entitl-
ed "Plutonium and Uranium Enriched in U-233; Guaranteed Purc-
hase Price," 30 FR 3886, March 25,1965, as the same may be a-
mended from time to time.
ARTICLE Ⅱ
a 1 This Lease is subject to all of the terms, conditions, prov-
isions, and guarantees contained in the Agreement for Coope-
ration.
2 Unless otherwise provided herein, or in a written agreement
between the Government, acting through the Commission, and
the Lessee, the terms and conditions contained herein shall
apply to special nuclear material and related services furn-
ished to the Lessee by the Commission on and after the date
of execution of this Lease, and to the material, if any, su-
bject to Special Nuclear Material Lease Agreement(s) between
the Government and the Lessee as of midnight December 31,196
8. The Lessee may be relieved of his obligations under this
Lease for such material only in accordance with the terms of
this Lease.
b The Lessee shall order material pursuant to this Lease through
the execution and submission of a special unclear material or-
der form prescribed by the Commission. The Lessee shall speci-
fy in his order whether he desires the ordered material to be
furnished (a) directly to the Lessee, (b) through a Commissio-
nlicensed United States firm who is a Lessee of the Commission
(hereinafter referred to as the "United States Contractor")
engaged by the Lessor for processing and/or fabrication, or o-
ther purpose, or (c) otherwise. In any case, actual delivery
to the Lessee shall be effected at a United States port of ex-
port as provided for under Article XV, "Delivery," of this Le-
ase.
c Acceptance of Lessee's order for material by or on behalf of
the Commission shall constitute the Commission's commitment to
lease the material specified in such order subject to the ter-
ms of this Lease.
d Nothing herein shall be deemed to obligate the Lessee to order
material or to obligate the Commission to lease material to t-
he Lessee, or to provide services for the Lessee with respect
to material.
ARTICLE Ⅲ
TITLE
Except as otherwise provided herein or as may be agreed in writ-
ing by the Parties hereto, title to all material furnished to or
received by the Lessee subject to or held under this Lease shall
at all times be and remain in the Government.
ARTICLE Ⅳ
TERM OF LEASE, TERMINATION AND CANCELLATION
a Except as otherwise provided herein, the Lessee shall have the
right to possess and use material covered by this Lease until
December 31,1970; provided this Lease may be extended by mutu-
al agreement of the Parties.
b The expiration or termination of the Agreement for Cooperation
shall automatically result in the expiration of this Lease and
any orders for material shall be of no further force or effect
as to the affected material.
c The Lessee may cancel any order for material under this Lease
by notice in writing to the Commission at any time prior to d-
elivery of the material; provided the Lessee shall pay a canc-
ellation charge for the costs incurred by the Commission in c-
onnection with such order, as determined in accordance with e-
stablished Commission pricing policy in effect at the time su-
ch costs are incurred.
d In the event that Lessee for any reason is unable to use any
material leased hereunder for the purpose for which said mate-
rial was leased, Lessee shall promptly notify the Commission
and shall return the said material in accordance with the ter-
ms hereof except as may be otherwise hereafter agreed in writ-
ing by the Parties.
e The Commission may terminate or suspend in whole or in part t-
his Lease at no cost to the Government at any time by written
notice to the Lessee in the event that the Lessee shall fail
to perform its obligations hereunder and shall fail to take c-
orrective action within thirty (30) days of the date of the w-
ritten notice of such failure to perform as provided above, u-
nless such failure arises out of causes beyond the control and
without fault or negligence of the Lessee.
ARTICLE Ⅴ
MATERIAL TO BE FURNISHED BY THE COMMISSION; SERVICE CHARGES
a Except as otherwise agreed to in writing by the Commission and
the Lessee, special nuclear material subject to this Lease sh-
all be furnished to the Lessee in standard form in accordance
with the Commission's established specifications.
b The Lessee shall pay the Commission's service charges, if any,
for withdrawal and packaging, and for any other special servi-
ce rendered pursuant to the Lessee's order. Unless such charge
or charges are agreed to in the order executed by the Lessee
and Commission for material, the Lessee shall pay the Commiss-
ion its charges for the services rendered pursuant to the Les-
see's order as determined in accordance with established Comm-
ission pricing policy in effect at the time such services are
rendered. The Lessee shall also pay the equivalent of a use c-
harge for the period covered by such services and until actual
delivery of the leased special nuclear material to the lessee
as herein provided, and for the value of material consumed in
the rendering of any special services.
c If the material delivered by the Commission pursuant to an or-
der executed by the lessee and the Commission does not conform
to the Commission's established specifications (or to the spe-
cifications set forth in an order executed by the Lessee and
the Commission), the responsibility and liability of the Gove-
rnment, the Commission, and persons acting on behalf of the C-
ommission shall be limited solely to correcting such discrepa-
ncies by delivery of material which does conform to the appli-
cable specifications. The Commission will pay to the carrier
the transportation charges for returning any material which d-
oes not conform to applicable specifications, as well as the
transportation charges for shipping conforming replacement ma-
terial. No service charges will be made with respect to such
replacement material, and rental charges for Commission-owned
containers in which such material shall be shipped will not c-
ommence until thirty (30) days after date of shipment.
d It is recognized that material furnished under this Lease as
enriched uranium (U-235) may be consumed in such manner as to
reduce the isotopic ratio thereof to the extent that the leas-
ed material is no longer special nuclear material as defined
herein. Except as provided in this paragraph or in paragraph e
. below, the resulting normal or depleted uranium will be, and
remain, subject to the provisions of this Lease as if the mat-
erial were special nuclear material; provided, that the Lessee
's obligations for consumption of, and for use-charges with r-
espect to, such material, shall be computed using the value of
the normal or depleted uranium, and provided further, that if
in lieu of returning such material directly to a Commission f-
acility as provided in this Lease, Lessee desires to transfer
such material to another person authorized and approved by the
Commission for this purpose, and to terminate his obligations
with respect thereto, the Commission may, at its option, requ-
ire the Lessee to pay the value of such material and transfer
title to such material to the Lessee.
e
(1) The Commission, upon delivery to the Lessee of plutonium, U
233, or uranium enriched in the isotope 233 subject to this
Lease, may direct that such plutonium not be blended with o-
ther plutonium or that such U-233 or uranium enriched in the
isotope 233 not be blended with other uranium.
(2) In the case of blending of normal, depleted or enriched ura-
nium subject to this Lease with uranium not subject to this
lease other than U-233 or uranium enriched in the isotope U-
233:
(A) If, within one hundred twenty (120) days from the date of
completion of the blending, the Commission receives the w-
ritten agreement of all such parties thereto, and
1 The assay (weight percent U-235) of the blended product
is higher than that of the leased material used in the
blending, (a) the Commission shall debit the Lessee's a-
ccount with the value of such portion of the Lessee's s-
hare of the blended product as does not exceed the value
of the Lessee's leased material use in the blending and
credit the Lessee's account with the value of the Lesse-
e's leased material used in the blending, (b) title to
the blended product so debited to the Lessee's account
Government and (c) the Lessee shall pay to the Commissi-
on the amount, if any, by which value of the credited m-
aterial exceeds the value of the debited material, or
2 the assay (weight percent U-235) of the blended product
is lower than that of the leased material used in the b-
lend, (a) the Commission shall debit the Lessee's accou-
nt with the value of such portion of the Lessee's share
of the blended product as has a feed component which do-
es not exceed the feed component (assuming uranium havi-
ng an assay of 0.711 weight percent U-235 was used as f-
eed material) of the Lessee's leased material used in t-
he blending and credit the Lessee's account with the va-
lue of the Lessee's leased material used in the blending
, (b) title to the blended product so debited to the Le-
ssee's account shall be deemed to be vested in the Gove-
rnment and (c) the Lessee shall pay to the Commission t-
he amount, if any, by which the value of the credited m-
aterial exceeds the value of the debited material.
(B) If such written agreement has not been so received by the
Commission, unless otherwise agreed to in writing by the
Commission, lessees, and owners of uranium not subject to
this Lease, (1.) the Lessee shall be deemed to have purch-
ased the material on its lease account that was used in t-
he blending and shall pay the Commission for the value of
this material so purchased, and (2.) title to such materi-
al shall pass from the Government to the Lessee upon paym-
ent to the Commission of the amount due.
(3) In the case of blending of plutonium subject to this Lease
with plutonium not subject to this Lease or of blending ura-
nium subject to this Lease with U-233 or uranium enriched in
the isotope 233 not subject to this Lease, the Lessee agrees
either (A) to secure the Commission's written agreement in
advance as to the terms and conditions under which such mat-
erial may be blended or (B) to accept as conclusive and bin-
ding the Commission's determination in writing as to the co-
nsequence of any such disposition of any blended product and
amounts due the Commission and the Lessee.
(4) As used in subparagraph e (2) the term "value" refers to
value as of the date of completion of the blending. The feed
components specified in subparagraph e(2)(A)2. shall be der-
ived from the established Commission standard table of enri-
ching services published from time to time by the Commission
in the United States Federal Register and in effect as of t-
he date of completion of blending.
(5) It is hereby agreed that the Lessee shall hold the Governme-
nt, the Commission, and persons acting on behalf of the Com-
mission, harmless from any claims of third parties on accou-
nt of rights alleged in or in connection with the source ma-
terial or special nuclear material used in blending, however
, this provision shall not be applicable to the extent that
the Lessee is prohibited by law from entering into such agr-
eement.
f
(1) The Lessee shall maintain and make available to Commission
for examination, upon reasonable notice, complete and adequ-
ate records pertaining to his receipt, possession, use, loc-
ation, movement, and physical inventories of material subje-
ct to this Lease. Such records shall fully reflect physical
measurements, consumption, actual inventories and the trans-
actions relating thereto. The Lessee will submit such trans-
fer documents and reports reflecting quantities of material
received, physically present, consumed, and transferred, wi-
th respect to material subject to this Lease as the Commiss-
ion may prescribe. Lessee will make at least one physical i-
nventory of material subject to this Lease will make at lea-
st one physical inventory of material subject to this Lease
and in the custody of the Lessee during each 12 months' per-
iod of the Lease and will insure that such inventories are
also made of material subject to this Lease but in the cust-
ody of others.
(2) The Lessee shall afford to the Commission, at all reasonable
times, opportunity to inspect the material subject to this
Lease and the premises and facilities where such material is
used or stored. The Lessee shall permit the Commission to p-
erform such audit tests and inventory tests as the Commissi-
on deems necessary for verification of the accuracy of any
reports submitted by the Lessee to the Commission. The Comm-
ission agrees to perform any inventory tests with respect to
material subject to this Lease (which the Lessee agrees may
include the taking of a reasonable number of samples for ph-
ysical or chemical analyses) so as to minimize interference
to the Lessee's processing, delivery schedules, and third p-
arty commitments regarding the material. Nothing contained
herein shall authorize the Commission to perform destructive
testing of a fabricated article containing special unclear
material except with the consent of the Lessee. The Lessee
agrees that no charges for costs or value of any material s-
amples, or for services or equipment, should such be furnis-
hed by the Lessee or provided in connection with the perfor-
mance of audit tests and inventory test, shall be made agai-
nst the Commission, however, the Commission will allow full
credit in the Lessee's account with the Commission for the
value of the material included in the samples and the Commi-
ssion will make no charge against the Lessee for reconversi-
on of the material samples to standard form. In the event t-
he Lessee should ship material subject to this Lease to any
other person, or cause such shipment of such material, the
Lessee shall assure that the rights and privileges granted
to the Commission under this paragraph shall not be affected
by such shipment.
ARTICLE Ⅵ
RETURN OF MATERIAL TO THE COMMISSION; SPECIAL CHARGES FOR COMMI-
SSION SERVICES
a Except as otherwise may be agreed in writing by the parties h-
ereto, the Lessee will return all material subject to this Le-
ase upon the expiration or earlier termination of this Lease,
provided, however, that the Lessee shall have the right to re-
urn such material at any time prior to such date.
b Except as otherwise provided herein, material subject to this
Lease which is returned directly to the Commission shall, aft-
er having been processed in facilities acceptable to the comm-
ission, be in the standard form, and shall meet the Commission
's established specifications for return of material in effect
as of the date the material is returned.
c Material subject to this lease transferred beyond the jurisdi-
ction of the Lessee with the consent of the commission regard-
less of the form and/or specification of such material, shall
be deemed to have been returned to the Commission if such tra-
nsferee, the Commission, and the Lessee have executed an agre-
ement covering the material so transferred.
d The Commission may in its discretion accept the material in a
form and/or specification other than as provided in subparagr-
aph b., above, In such cases, unless the Commission shall det-
ermine that acceptance of the material in its existing form is
in the best interests of the U.S. Government, the Lessee shall
pay a service charge for processing such returned material so
as to enable it to meet the standard form and to satisfy the
Commission's established specifications in effect at the time
the material is returned. Such charge shall include the Commi-
ssion's charge for processing, as determined in accordance wi-
th the established Commission pricing policy in effect at the
time the material is returned and an amount as determined by
the Commission, for the value of the material consumed during
processing. Whenever material returned by the Lessee is subje-
ct to processing charges under this subparagraph, the Lessee
shall continue to pay the use-charge on such material until t-
he expiration of the processing period as determined by the C-
ommission at the time the material is accepted.
e Unless the Commission accepts material as provided in subpara-
graph d., above, the Lessee shall pay the Commission for mate-
rial returned in a form and/or specification other than as pr-
ovided in subparagraph b., above, a sum equal to the value of
the material. In addition, the Lessee shall also pay a special
service charge, as determined in accordance with established
Commission pricing policy in effect at the time the material
is returned for the handling, storage and/or disposal of such
material.
f Material subject to this Lease returned directly to the Commi-
ssion in the form of uranium hexafluoride shall be shipped on-
ly in containers of appropriate size as specified by the Comm-
ission. The quantity of such material shipped in a container
shall not be less than the Commission-established minimum loa-
ding for the type of container used.
g 1 All material returned to the United States of America shall
be transported to a port of entry into the United States of
America to be designated by the Commission after consultati-
on with the Lessee. The Commission shall thereupon perform
those actions required to authorize the import of such mate-
rial. Unless otherwise mutually agreed by the Parties, the
Lessee shall thereafter arrange at the Lessee's expense for
a carrier, subject to such terms, charges, conditions, and
licenses as may be required, to transport such material by
commercial conveyance to the Commission facility or locatio-
n specified by the Commission.
2 Unless waived by the Commission, the Lessee shall give the
Commission at least fifteen (15) days' notice of intent to
return material to the United States. The Commission will n-
otify the Lessee promptly after receipt of the Lessee's not-
ice of intent to return material as to the Commission facil-
ity or location designated for return of the material. The
Lessee, at the time of shipment of the material, shall noti-
fy the Commission of the date and method of shipment of such
material to the Commission facility or other location and e-
xpected date of arrival.
h The Commission shall issue an appropriate written receipt whi-
ch will evidence return of material hereunder.
ARTICLE Ⅶ
PAYMENT FOR MATERIAL CONSUMED
a Except as otherwise provided herein, the Lessee shall be resp-
onsible for and shall reimburse the Commission for any consum-
ption of material, whether or not such consumption is due to
the fault or neglect of the Lessee, or any other cause occurr-
ing from the time the material is made available by the Commi-
ssion pursuant to Article XV and until such material has been
returned to a Commission facility as provided herein.
b The Lessee shall make reports semiannually by February 1 and
August 1 to the Commission, on forms as prescribed by the Com-
mission, to accurately reflect all consumption of material as
known to the Lessee as of the preceding December 31 and June
30. In reporting material as consumed, Lessee shall make reas-
onable effort to accurately fix the time of such consumption
on the basis of a specific occurrence or in accordance with p-
rocedures and methods of calculating consumption accepted by
the Commission.
c The Lessee may, and shall, when required by the Commission, p-
ay on a provisional basis for material consumed. Except as ot-
herwise provided herein, the amount due the Commission for ma-
terial consumed shall be the value of such material computed
in accordance with this Lease as of the time of such consumpt-
ion. Title to all consumed material, other than material the
value of which has been reduced by alteration of its isotopic
ratio, shall pass from the Commission to the Lessee upon final
payment to the Commission of the amount due.
ARTICLE Ⅷ
USE-CHARGE PAYMENT
Except as otherwise provided herein, the Lessee agrees to pay t-
he Commission a use-charge for material subject to this Lease,
as provided in article X below. The rate of use-charge shall be
the Commission's published rate of annual (365 days) use-charge
in effect for the period covered by the Commission's invoice.
ARTICLE Ⅸ
OTHER AUTHORITY
Nothing in this Lease shall be deemed to obligate the Lessee to
pay the Commission's charges with respect to materials and/or s-
ervices subject to this Lease, or to observe other specific pro-
visions of this Lease, if the Commission, in accordance with st-
atutory or other authority available to it, determines that such
charges or other provisions are not applicable.
ARTICLE Ⅹ
ESTABLISHMENT OF SPECIAL NUCLEAR MATERIAL LEASE ACCOUNT
a The Commission will establish a special nuclear material lease
account for the Lessee to which will be debited, as provided
herein, the amount or amounts equal to the value of the mater-
ial subject to this Lease. Such account will be credited, as
provided herein, with the amount or amounts equal to the value
of the material returned or paid for in accordance with this
Lease. The daily balance of this account shall be used for co-
nputing the amount due to the Commission for use-charges. The
value of material reflected in this account after credit for
the value of material returned and for payments for material
consumed shall represent the amount due to the Commission for
material not returned or paid for. In the event material paid
for provisionally as having been consumed is later re-establi-
shed in the Lessee's account, said account shall be debited as
of the date of refund (or appropriate setoff) of such payment
to the Lessee as provided in paragraph c of Article ＸⅡ here-
of, with the amount or amounts equal to the value of such mat-
erial at the time of such reestablishment in the Lessee's acc-
ount.
b Except as otherwise provided in this Lease, the Lessee's acco-
unt will be debited for material furnished as of the date mat-
erial is delivered to the Lessee, provided that in the case of
leased material transferred directly from another lessee of t-
he Commission, the debit will be made as of the effective date
specified in the order executed by the Lessee, the other less-
ee, and the Commission for such material. Except as otherwise
agreed to by the Commission, such effective date shall not pr-
ecede the date of the Commission's execution of such order by
more than thirty (30) days and such date shall also be set fo-
rth in the applicable transfer document.
c The Lessee's account will be credit for material returned to
the Commission or transferred to another lessee only when the
material is returned or transferred in accordance with Article
VI. Except as otherwise provided in this Lease, the Lessee's
account will be credited for material returned directly to the
Commission as of the date the material is delivered to a loca-
tion specified by the Commission pursuant to this Lease. Cred-
it for material transferred to another Lessee will be made as
of the effective date specified in the order executed by the
receiving lessee, the Commission and the Lessee. Credit for m-
aterial paid for will be made as of the date payment is recei-
ved by the Commission.
d Whenever the Commission changes any applicable base charge as
provided in Article XI below, the value of material recorded
in the Lessee's account will be recomputed at the new base ch-
arge, provided, that the value of material consumed as of the
effective date of such change shall not be recomputed. Subseq-
uent to the effective date of the change in the applicable ba-
se charge, the new base charge will be used in determining the
value of material consumed and for computing the value of mat-
erial subject to use-charges.
e The Lessee will be promptly notified of the debits and credits
made to his account as the result of shipments, consumption,
or transfers of material, and of any changes in the value of
material in such account as a result of changes in the applic-
able base charges. The Lessee will promptly notify the Commis-
sion of any disagreement with alleged discrepancies, or errors
in such notices.
ARTICLE ＸⅠ
CHANGES IN RATE OF USE-CHARGE, BASE CHARGES, AND SPECIFICATIONS
a The rate of use-charge, the base charges, standard form, and
specification for material furnished pursuant to this Lease a-
re subject to change by the Commission in accordance with the
Act.
b Any increase in base charges or any changes in the standard f-
orm or in the Commission's established specifications shall r-
equire at least 180 days' notice to the lessee by publication
or otherwise. Any increase in the rate of use-charge shall re-
quire at least 30 days' notice to the lessee by publication or
otherwise.
ARTICLE ＸⅡ
PERFORMANCE OF AEC OBLIGATIONS; BILLING
a The Commission may fulfill its obligations under the Lease th-
rough the operator of any of its facilities. No such operator
is authorized to modify the terms of this Lease, waive any re-
quirement thereof, or settle any claim or dispute arising her-
eunder.
b Billings for amounts due the Commission under the Lease will
ordinarily be made
(1) following the performance of any service, and
(2) semi-annually for use-charges and for charges for consumpti-
on of material.
c All billings and payments made on a provisional basis are sub-
ject to adjustment to recognize actual or calculated amounts,
enrichment, isotopic content, and specifications of material
involved. Whenever the Lessee has provisionally paid for mate-
rial reported as having been consumed and such material is la-
ter reestablished in the Lessee's account, the Commission sha-
ll refund to the Lessee (or appropriately set off against any
amounts due the Commission) the amount paid by the Lessee for
such material. Except as stated in paragraph d. below, the ad-
justments provided for in this paragraph will not subject the
Lessee or the Commission to liability for interest.
d All bills rendered by or on behalf of the Commission are due
sixty (60) days from the date of invoice and shall be paid in
currency of the United States of America. Failure to receive
payment within sixty (60) days after date of invoice shall en-
title the Commission to an additional charge at six percent p-
er annum on such amount, such charge to commence on the sixty
first (61st) day from the date of invoice.
ARTICLE ＸⅢ
DISCLAIMER; RESPONSIBILITY
a Neither the Government, the Commission nor persons acting on
behalf of the Commission make any warranty or other represent-
ation, express, or implied, that materials furnished under th-
is Lease (i) will not result in injury or damage when used for
any purpose, (ii) are of merchantable quality, or (iii) are f-
it for any particular purpose.
b With respect to the material leased hereunder, the Lessee sha-
ll indemnify and save harmless the Government of the United S-
tates of America against any and all liability (including thi-
rd party liability) for any cause whatsoever arising out of t-
he production or fabrication, the transportation, the ownersh-
ip, the lease, and the possession and use of such special nuc-
lear material commencing with the time the material is made a-
vailable by the Commission pursuant to Article ＸＶ except to
the extent that such responsibilities are borne by a United S-
tates contractor of the Lessee under a Special Nuclear Materi-
al Lease Agreement between the Commission and such contractor.
Nothing in this paragraph shall deprive the Lessee or any oth-
er person of any rights under Section 170 of the United States
Atomic Energy Act of 1954, as amended.
ARTICLE XIV
TIME OF DELIVERY
The Commission will make reasonable efforts to deliver material
at the time or times stated in orders for material subject to t-
his Lease, but neither the Government, the Commission, nor pers-
ons acting on behalf of the Commission shall be subject to any
liability for any failure to do so.
ARTICLE XV
DELIVERY
a With respect to material ordered hereunder which is to be fu-
rnished the Lessee, the Commission shall make available the m-
aterial ordered, on board commercial conveyance at a facility
of the Commission, to a transporter arranged for by the Lessee
. The transporter shall transport and deliver the material to
a port of export in the United States of America to be design-
ated by the Commission after consultation with the Lessee. The
Comission shall thereupon perform those actions required to e-
ffect the delivery and authorize the export of the material to
the Lessee at such designated port. All costs of domestic and
overseas transportation and delivery (including costs of cont-
ainers and packaging) and of storing such material in connect-
ion with such delivery shall be the responsibility of and bor-
ne by the Lessee and not the Commission. The Lessee or its du-
ly authorized agent shall accept delivery of the material at
the designated port of export, and shall sign an appropriate
written receipt therefor, whereupon the lease of such material
shall commence and the Lessee shall assume full and complete
responsibility for the leased material.
b With respect to material ordered hereunder which is to be fur-
nished a United States contractor engaged by the Lessee for p-
urposes of processing and/or fabrication:
(1) The Commission shall make available to the said United Stat-
es contractor, on board commercial conveyance at a facility
of the Commission, the said material.
(2) Upon completion of the processing and preparation of the ma-
terial by the said contractor, and receipt by the Commission
of the written certificate of the said Contractor's determi-
nation of the isotopic content and quantity of special nucl-
ear material as required by paragraph c. of Article ＸＶⅢ,
"Determination……", of this Lease, the Lessee shall arra-
nge for a transporter who, after thirty (30) days' written
notice by the Lessee to the Commission shall transport and
deliver such converted or fabricated material to a port of
export in the United States of America to be designated by
the Commission after consultation with the Lessee. The Comm-
ission shall thereupon perform those actions required to ef-
fect the delivery and authorize the export of such material
to the Lessee at such designated port. All costs of domestic
and overseas transportation and delivery (including costs of
containers and packaging) and of containers and packaging)
and of storing such material, as well as all arrangements f-
or physically handing such material in connection with such
delivery shall be the responsibility of and borne by the Le-
ssee and not the Commission. The Lessee or its duly authori-
zed agent shall accept delery of such material at-the desig-
nated port of export, and shall sign and appropriate written
receipt therefor, whereupon the lease of such material shall
commence and the Lessee shall assume full and complete resp-
onsibility for the leased material.
ARTICLE XVI
CONTAINERS AND EQUIPMENT
a All shipments of material form the Commission to the lessee,
and from the Lessee to the Commission, will be made in Lessee-
furnished containers; provided, however, that in the event the
Commission determines that the required containers are not re-
asonably available from commercial sources the Commission may
furnish Commission-owned containers if such are available. Any
commissionowned containers to be used for shipment of material
will be made available to the Lessee, f. o. b. the Lessee's v-
ahicle or commercial conveyance, at a Commission facility des-
ignated by the commission, unless otherwise agreed. Lessee-fu-
rnished containers and equipment shall be delivered to a Comm-
ission facility designated by the Commission within a reasona-
ble time specified by the Commission prior to the scheduled d-
elivery of materials to be shipped to the Lessee in such cont-
ainers and equipment. Lessee furnished containers or equipment
will be used by the Commission only for the shipment of mater-
ial from the Commission to the Lessee and for temporary stora-
ge of material shipped therein.
b All containers and equipment, whether Commission-owned or Les-
sec-furnished, must meet Commission regulations, specificatio-
ns and practices as to safety, design criteria, cleanliness a-
nd freedom from contamination in effect at the time furnished,
utilized or returned, of which the Commission shall be the so-
le judge. In the event material is returned by the Lessee to
the Commission in non-Commission-owned containers and other m-
aterial is to be delivered to the Lessee, the Commission shall
utilize to the extent practicable such non-Commission-owned c-
ontainers for shipments of material if so desired by the Less-
ee. The Commission will promptly return to the Lessee non-Com-
mission-owned containers and other equipment identified as "R-
eturnable," but will not be responsible for any loss of or da-
mage to such containers or equipment except as may result from
its fault or negligence. Such return shipments by the Commiss-
ion will be made f.o.b. Lessee's vehicle or commercial convey-
ance at the Commission facility to which they were shipped.
c Title to Commission-owned containers and equipment shall rema-
in in the Government. The Lessee shall pay such rental charge,
for such containers and equipment, as shall be established by
the Commission for general application to users of such Commi-
ssion-owned property. The Lessee will promptly return Commiss-
ionowned containers and equipment to the Commission facility
from which received, f.o.b. Lessee's vehicle or commercial co-
nveyance at the Commission facility. The Lessee will not be r-
esponsible for any loss of or damage to Commission-owned cont-
ainers or equipment except as may result from the fault or ne-
gligence of the Lessee, its contractors, or agents. Commissio-
nowned containers or equipment will be used only for shipment
of material to and from the Commission and for temporary stor-
age of material shipped therein.
d Whenever material or containers are shipped to the Commission
or Commission-owned containers are returned to the Commission,
and the Commission elects to decontaminate the containers, ra-
ilroad cars, trucks or other shipping vehicles or the Commiss-
ion's unloading area and machinery, because the containers, or
the material or the method of shipment failed to meet the hea-
lth and safety standards prescribed by the Commission or any
other Federal or State agencies having jurisdiction over such
matters, the Lessee shall pay the Commission the full cost of
such decontamination as determined by the Commission in accor-
dance with established Commission pricing policy. Any residual
quantities of material in containers or equipment returned to
the Commission will be deemed to have been consumed by the Le-
ssee, and the Lessee shall pay for such material in accordance
with this Lease.
ARTICLE ＸＶⅡ
ASSIGNMENT
a Lessee may not assign this Lease, or any order for material s-
ubject to this Lease, without the express written approval of
the commission.
ARTICLE ＸＶⅢ
DETERMINATION OF MATERIAL QUANTITIES AND PROPERTIES; RESOLUTION
OF MEASUREMENT
DIFFERENCES
a The following provisions and procedures shall apply to the de-
termination of quantities and properties of material, and the
resolution of measurement differences resulting from such det-
ermination, with respect to material subject to this Lease wh-
ich is received by the Lessee from a Commission facility or r-
eturned directly to a Commission facility. For the purposes of
this article, the terms "supplier" and "receiver" shall refer
to the Commission and the Lessee as the case may be. The supp-
lier will promptly furnish the receiver a statement of the qu-
antities and properties of the material transferred including
a statement of the gross weight of the container plus material
and the tare weight of such container.
(1) The Commission samples obtained at a Commission facility us-
ing the Commission's procedures will be the official samples
and shall be binding upon the Commission, the Lessee and the
umpire unless the Commission and the Lessee agree upon the
use of other samples, procedures or sampling locations.
(2) The following provisions and procedures apply to the determ-
ination of the net weight of material transferred as determ-
ined by the gross weight of the container plus material less
the tare weight of such container. The net weight of materi-
al transferred shall be determined prior to delivery to the
Lessee or acceptance of delivery by the Commission, as the
case may be, at a Commission facility using the Commission's
procedures and facilities unless the Commission and the Les-
see agree upon other procedures or facilities. Upon written
request submitted at the time of ordering or returning mate-
rial, the Lessee shall be given an opportunity to observe,
at the Lessee's expense, the weighing of the container and
the container plus material and the taking of official samp-
les by the Commission. The Commission shall notify the Less-
ee of the dates and places for observance of such events. T-
he net weight of material transferred shall be as determined
by the results of such weighings and shall not be subject to
the provisions of subparagraphs (3) and (4) below.
(3) If, after determination pursuant to (2) above of the net we-
ight of the material transferred, the receiver does not acc-
ept the supplier's statement of the other quantities and pr-
operties of the material transferred, the receiver shall wi-
thin sixty (60) days after the receipt of the material or t-
he supplier's statement of quantities and properties, which-
ever is later, submit to the supplier a notice of disagreem-
ent in writing The notice of disagreement shall include mea-
surement and/or analysis data supporting the disagreement.
If such notice of disagreement is not submitted within such
sixty (60) days, the supplier's measurements will be final
and binding upon both parties. If the disagreement is solely
with respect to quantitative determinations within specific-
ation limits, the receiver may use or dispose of the materi-
al prior to resolution of the disagreement. If the disagree-
ment is with respect to whether the material is within spec-
ification limits, the receiver may handle the material as n-
ecessary for storage or protection against health and safety
hazards provided, however, should the receiver further use
or dispose of the material, the supplier's measurements will
be final and binding on both parties.
(4) In the case of a disagreement concerning results obtained f-
rom analysis of a sample which is not resolved by mutual ag-
reement, an official sample shall be submitted to an umpire
mutually agree upon for analysis.
The umpire's results shall be conclusive on both parties.
(i) In the case of a disagreement with respect to whether or n-
ot the material is within specification limits, the receiv-
er will pay the umpire cost if the umpire's result is with-
in specification limits, and the supplier will pay the ump-
ire cost if the umpire's result is not within specification
limits.
(ii) In the case of a disagreement with respect to quantitative
determinations within specification limits, the party who-
se result is furthest from the umpire's result will pay t-
he umpire cost; provided that in the event the umpire's r-
esult is equidistant between the supplier's and the recei-
ver's results, the parties will each bear one-half of the
umpire cost.
(iii) As used in this subparagraph (4), the phrase "umpire co-
st" means the umpire's charges plus the additional cost,
if any, of the packaging, handling and transporting of
the official sample to and from the umpire. In the event
that the umpire is to employ an official sample for more
than one determination, the foregoing umpire cost shall
be allocated to such determinations as mutually agreed by
the parties prior to the furnishing of the sample to the
umpire, or in the absence of such agreement, as determin-
ed by the umpire.
b The quantity and properties of material subject to this Lease
and returned directly to the Commission under a contract for
chemical processing and financial settlement will be determin-
ed in accordance with the provisions and procedures agreed up-
on in such contract.
c With respect to material ordered hereunder which is furnished
a United States contractor engaged by the Lessee for purposes
of processing and/or fabrication, the following shall apply:
(1) The lessee shall cause the said contractor to submit to the
Commission a written certificate of said Contractor's deter-
mination of the quantity of special nuclear material contai-
ned in the converted or fabricated and prepared material, a-
nd of its isotopic content. Unless otherwise agreed by the
parties hereto, the per cent of the isotope uranium-235 in
any enriched uranium either converted or fabricated and pre-
pared by the Lessee's United States contractor shall be dee-
med to be the same as the uranium-235 isotopic enrichment of
the uranium made available by the Commission to said contra-
ctor and the certificate shall be written accordingly. The
quantity of special nuclear material contained in the conve-
rted or fabricated and prepared material shall be as determ-
ined by the United States contractor and set forth in such
certificate as such quantity may be accepted by the Lessee
and thereafter accepted or revised by the Commission after
any reviews or analyses which the Commission may deem appro-
priate.
(2) The provisions and procedures governing, as between the Com-
mission and the said contractor, the determinations of quan-
tities and properties of said material, and the resolution
of measurement differences resulting from such determination
shall be those established by the arrangement between the C-
ommission and the said contractor.
ARTICLE ＸＩＸ
ADJUSTMENT OF USE-CHARGES;
RESOLUTION OF DIFFERENCES
The period of time during which use-charges shall accrue under
this Lease with respect to material subject to a measurement di-
sagreement hereunder shall be adjusted as follows:
a Where the disagreement is concerned solely with quantitative
determinations within specification limits (1) of material de-
livered directly to Lessee from a Commission facility and is
resolved by the umpire in favor of the Lessee, no use-charge
for the amount of material represented by the difference in m-
easurements shall accrue between the date of delivery of the
material to the Lessee and the date of resolution, or (2) of
material returned directly to the Commission and is resolved
by the umpire in favor of the Lessee, no use-charge for the a-
mount of material represented by the difference in measuremen-
ts shall accrue between the date of receipt of the shipment a-
nd the date of resolution. Where the umpire's results are equ-
idistant from those of the parties, no use-charge for the amo-
unt of material represented by the difference in measurements
shall accrue for one-half of the aforementioned relevant peri-
od.
b Where the disagreement is concerned with specification limits
of (1) material delivered directly to the Lessee from a Commi-
ssion facility and is resolved by the umpire in favor of the
Lessee, unless the Lessee accepts the material, no use-charge
for the material shall accrue between the date of delivery of
the material to the Lessee and the date the material is recei-
ved by the Commission or (2) of material returned directly to
the Commission and is resolved by the umpire in favor of the
Lessee, no use-charge for the material shall accrue after the
date the material is received by the Commission.
c Where any measurement disagreement is resolved by mutual agre-
ement, the period of use-charge shall be included in and sett-
le by mutual agreement.
ARTICLE ＸＸ
PATENT INDEMNIFICATION
The Lessee agrees to indemnify the Government, the Commission,
and persons acting on behalf of the Commission against liability
, including costs and expenses incurred, for infringement of any
Letters Patent occuring in the performance of any service, anal-
ysis, or test performed for the Lessee as a result of following
specific instructions of the Lessee in connection therewith, or
occurring in the utilization by the Lessee of any material proc-
ured hereunder; provided, that insofar as such materials are us-
ed or services utilized in the performance of a Government cont-
ract, this indemnity agreement shall not apply unless such Gove-
rnment contract contains provisions indemnifying the Government
against patent infringement, and provided further that this ind-
emnity agreement shall not be applicable to the extent that the
Lessee is prohibited by law from entering into such agreement.
ARTICLE ＸＸＩ
RIGHT TO USE AND PUBLISH
INFORMATION
The Commission shall have the right to publish and use any info-
rmation or data developed by the Commission or persons acting on
behalf of the Commission as the result of any service, analysis
or test performed hereunder for the Lessee.
ARTICLE ＸＸⅡ
LAWS, REGULATIONS AND ORDINANCES
The Lessee shall procure any necessary permits and licenses and
comply with all applicable laws, regulations and ordinances of
the United States and of any State, territory, or political sub-
ivision.
ARTICLE ＸＸⅢ
OFFICIALS NOT TO BENEFIT
No member of congress or resident commissioner of the United St-
ates of America shall be admitted to any share or part of this
Lease or to any benefit that may arise therefrom.
ARTICLE ＸＸＩＶ
COVENANT AGAINST CONTINGENT FEES
The Lessee warrants that no person or selling agency has beenem-
ployed or retained to solicit or secure this Lease upon an agre-
ement or understanding for a commission, percentage, brokerage,
or contingent fee, excepting bona fide employees or bona fide e-
stablished commercial or selling agencies maintained by the Les-
see for the purpose of securing business. For breach or violati-
on of this warranty the government of the United States of Amer-
ica shall have the right to annul this Lease without liability.
ARTICLE ＸＸＶ
APPLICABLE LAW
This Lease shall be construed according to the laws applicable
in the federal courts of the United States of America for contr-
acts in the United States of America to which the Government of
the United States of America is a party.
ARTICLE ＸＸＶＩ
NOTICES
a Any notices required by this Lease of the Lessee shall be sub-
mitted in writing to the Commission addressed to:
Director
Division of International Affairs
United States Atomic Energy
Commission
Washington, D.C. 20545
b Any notices required by this Lease of the Commission shall be
submitted in writing to the Lessee addressed to:
(Remain Blank)
IN WITNESS WHEREOF, the parties have executed this Lease the day
and year first above written.
THE UNITED STATES ATOMIC ENERGY COMMISSION ACTING FOR AND ON BE-
HALF OF THE GOVERNMENT OF THE UNITED STATES OF AMERICA:
(Signed)
A.S. Friedman,
Deputy Director Divison of
International Affairs
THE GOVERNMENT OF THE REPUBLIC OF CHINA:
(Signed)
Martin Wong
Minister, Chinese Embassy