[Title] SPECIAL NUCLEAR MATERIAL LEASE AGREEMENT BETWEEN THE GOVERNMENT OF JAPAN AND THE UNITDE STATES ATOMIC ENERGY COMMISSION ACTING ON BEHALF OF THE GOVERNMENT OF THE UNITED STATES OF AMERICA

SPECIAL NUCLEAR MATERIAL LEASE AGREEMENT BETWEEN THE GOVERNMENT OF JAPAN AND THE UNITDE STATES ATOMIC ENERGY COMMISSION ACTING ON BEHALF OF THE GOVERNMENT OF THE UNITED STATES OF AMERICA

SNM Lease Agreement No. JA/L/6

THIS LEASE AGREEMENT (hereinafter referred to as the "Lease") is entered into this 19th day of May, 1961, by and between the Government of JAPAN (hereinafter called the "Lessee") and the UNITED STATES ATOMIC ENERGY COMMISSION (hereinafter called the "Commission") acting for and on behalf of the Government of THE UNITED STATES OF AMERICA.

WHEREAS, the Parties hereto desire to establish the terms and conditions applicable to the lease of special nuclear material from the Commission to the Lessee pursuant to the Agreement for Cooperation;

WHEREAS, this Lease is authorized by and executed under the Agreement for Cooperation;

NOW, THEREFORE, the Parties hereto do mutually agree as follows:

ARTICLE 1-DEFINITIONS

As used in this Lease:

A. The term "Act" means the United States Atomic Energy Act of 1954, as amended.

B. The term "Agreement for Cooperation" means the Agreement for Cooperation between the Government of Japan and the Government of the United States of America Concerning Civil Uses of Atomic Energy. signed at Washington on June 16, 1958, as amended by the Protocol Amending the Agreement for Cooperation between the Government of Japan and the Government of the United States of America Concerning Civil Uses of Atomic Energy, signed at Washington on October 9, 1958, and as the said Agreement for Cooperation, as amended, may be amended or superseded.

C. The terms "Atomic Energy Commission", "Commission" or "AEC" mean the United States Atomic Energy Commission or any duly authorized representative thereof.

D. The term "Base charge" means the United States dollar amount per unit of special nuclear material 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 "Commission facility" means a laboratory, plant, office, or other establishment operated by or on behalf of the Commission.

F. The term "Commission's established specifications" means the specifications for purity and other physical or chemical properties of special nuclear material, as published by the Commission in the United States Federal Register from time to time.

G. The terms "consumed" or "consumption" include the reduction in value of material due to blending of different assays of special nuclear material, or other alteration of the isotopic ratio, and the disposition of material in such manner that it cannot be economically recovered for further use.

H. The term "persons acting on behalf of the Commission" includes employees and contractors of the Commission. and employees of such contractors, who participate in the implementing of this Lease pursuant to their employment or their contracts with the Commission.

I. The term "source material" means source material as defined in the Agreement for Cooperation.

J. The term "special nuclear material" means special nuclear material as defined in the Agreement for Cooperation.

K. The term "value" means the United States dollar amount determined by multiplying the applicable Commission base charge by the number of units, or fractions thereof, of special nuclear material involved. whether or not such material is in standard form and specification.

L. The term "worth" means the United States dollar amount determined by multiplying the applicable Com mission unit price for normal or depleted uranium as uranium hexafluoride by the number of units, or fractions thereof, of normal or depleted uranium involved. Tne Commission's applicable unit price for normal or depleted uranium will be fixed in accordance with established Commission pricing policy then in effect.

M. The term "established Commission pricing policy" means any applicable price or charge in United States dollars in effect at the time any particular transaction under this Lease takes place (i) published by the Com-mission 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 furnished the Lessee upon request. The Commission's published prices and charges, as well as its pricing policies. may be amended from time to time.

ARTICLE 2-SCOPE

A. This Lease is subject to all of the terms, conditions, provisions, and guarantees contained in the Agreement for Cooperation.

B. Unless otherwise provided herein, or in a written agreement between the Lessee and the Commission, the terms and conditions contained herein shall apply to material and related services delivered to the Lessee pursuant to his order by the Commission on and after the date of execution of this Lease, and to the material listed in Appendix A attached hereto and made a part hereof.

C. The Lessee shall order material pursuant to this Lease through the execution and submission of a special nuclear material order form prescribed by the Commission. At the time of submission of said form, the Lessee shall specify whether he has engaged or arranged for the engagement of a United States contractor to process and/or fabricate and prepare the ordered material in the United States or whether the said material should be furnished him directly. In either case, the material ordered by the Lessee shall be delivered to him by the Commission at a United States port of export as provided for in Article 6 of this Lease

D. Acceptance of the Lessee's order for material by or on behalf of the Commission shall constitute the Com mission's commitment to lease the material specified in such order subject to the terms of the said order and of this Lease.

E. Nothing herein shall be deemed to obligate the Lessee to order material or to obligate the Commission to lease material to the Lessee, or to provide services for the Lessee with respect to material.

F. With the exception of the two Agreements of Lease of special Nuclear Material between the Lessee and the commission signed November 23. 1956 and May 8. 1957 respectively, all existing agreements and arrangements between the Lessee and the Commission pursuant to which the Lessee possesses or is responsible for the material listed in Appendix A are hereby cancelled. except as to accrued amounts due thereunder.

ARTICLE 3-TITLE

Except as otherwise may be agreed by the Parties hereto, title to all material furnished to or received by the Lessee subject to this Lease shall at all times be and remain in the United States.

ARTICLE 4-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 June 30, 1963; provided this Lease be extended by mutual agreement of the Parties.

B. The expiration, suspension or termination of the Agreement for Cooperation shall automatically result in the termination of this Lease and any orders for material shall be of no further force or effect.

C. The Lessee may cancel any order for material under this Lease by notice in writing to the Commission at any time prior to delivery of the material; provided, the Lessee shall pay a cancellation charge for the costs incurred by the Commission in connection with such order, as determined in accordance with established Commission pricing policy then in effect

D. Either Party may cancel this Lease at any time if the other Party fails or neglects to fulfill its obligations hereunder or under the Agreement for Cooperation.

ARTICLE 5- MATERIAL TO BE FURNISHED BY THE COMMISSION; SERVICE CHARGES

A. Except as otherwise provided herein, special nuclear material subject to this Lease shall be furnished to the Lessee or its designated United States contractor in standard form in accordance with the Commission's established specifications. The current standard forms for the materials listed below are:

Standard Forms

Enriched uranium (U-235) -As uranium hexafluoride

Plutonium -As plutonium metal

Uranium-233 -As uranyl nitrate

B. Lessee shall pay the Commission's service charges, if any, for withdrawal and packaging, and for any other special service rendered pursuant to the Lessee's order, with respect to material ordered hereunder which is to be furnished the Lessee directly. Unless such charge or charges are agreed to in the order executed by the Lessee and the Commission for material, the Lessee shall pay the Commission its charges for the services rendered pursuant to the Lessee's order as determined in accordance with established Commission pricing policy then in effect. The Lessee shall also pay the use-charge, as hereinafter provided, for the period covered by such services, and the value of material consumed in the rendering of such services.

C. In the case of material ordered hereunder by the Lessee which is to be furnished a United States contractor engaged or arranged for by the Lessee, arrangements for payment of the Commission's service charges, if any, for withdrawal and packaging, and for any other special service rendered pursuant to the Lessee's order shall be made with such contractor.　Arrangements for the payment of the use-charge, as hereinafter provided, for the period covered by such services, and the value of the material consumed in rendering such services shall also be made with the said contractor.

D. If the material ordered hereunder is furnished directly to the Lessee and does not conform to the Commission's established specifications or to the specifications set forth in an order executed by the Lessee and the Commission, the responsibility and liability of the Government of the United States of America, the Commission. and persons acting on behalf of the Commission shall be limited solely to correcting such discrepancies by delivery of material which does conform to the applicable specifications. The Commission will pay the transportation charges for returning any material obtained directly from the Commission which does not conform to applicable specifications, as well as the transportation charges for shipping conforming replacement material.

E. In the case of material ordered hereunder by the Lessee which is furnished the Lessees designated United States contractor prior to delivery to the Lessee by the Commission, the liabilities and responsibilities of the Commission concerning non-conformity to the specifications of said material shall be governed by the arrangements between the Commission and the said contractor.

F. 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 leased material is no longer special nuclear material as defined herein. The resulting normal or depleted uranium will be and remain subject to the provisions of this Lease as if the material were special nuclear material; provided, that the Lessee's obligations for loss or consumption of and for use charges with respect to, such material, shall be computed using the worth of the normal or depleted uranium.

G. The Lessee shall not blend special nuclear material subject to this Lease without the prior written consent of the Commission.

ARTICLE 6- DELIVERY

A. With respect to material ordered hereunder which is to be furnished the Lessee directly, the Commission shall provide the material ordered, f.o.b. commercial conveyance at a facility of the Commission, to a transporter arranged for by the Lessee. Subject to such terms, charges, conditions, and licenses as the Commission may require, the transporter shall transport and deliver the material to a port of export in the United States of America to be designated by the commission after consultation with the Lessee. The commission shall thereupon perform those actions required to effect the delivery and authorize the export of the material to the Lessee at such designated port. The Lessee shall be responsible for all costs of transportation and delivery (including costs of containers and packaging) and of storing such material, as well as all arrangements for physically handling such material in connection with such delivery. The Lessee or its duly 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 material.

B. With respect to material ordered hereunder which is to be furnished a United States contractor engaged or arranged by the Lessee for purposes of processing and/or fabrication and preparation.

(1) The Commission shall make available to the said United States contractor, f.o.b. commercial conveyance at a facility of the Commission, the said material, subject to such terms. charges conditions, and licenses as the Commission may require.

(2) Upon completion of the processing and/or fabrication and preparation of the material by the contractor, and receipt by the Commission of the written certificate of the contractor's determination of the isotopic content and quantity of special nuclear material as required by paragraph D of Article 17 of this Lease, the Lessee shall arrange for a transporter who, after thirty (30) days' written notice by the Lessee to the Commission and subject to such terms, charges, conditions, and licenses as the Commission may require, shall transport and deliver such processed and/or fabricated and prepared material to a port of export in the United States of America to be designated by the Commission after consultation with the Lessee. The Commission shall thereupon perform those actions required to effect the delivery and authorize the export of such material to the Lessee at such designated port. The Lessee shall be responsible for all costs of transportation and delivery (including costs of containers and packaging) and of storing such material, as well as all arrangements for. physically handling such material in connection with such delivery. The Lessee or its duly authorized agent shall accept delivery of such 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 special nuclear material contained therein.

ARTICLE 7-RETURN OF MATERIAL. TO THE COMMISSION; SPECIAL CHARGES FOR COMMISSION SERVICES

A. Except as otherwise may be agreed by the Parties hereto, the Lessee will return all material subject to this Lease upon the expiration or earlier termination of this Lease, provided. however, that the Lessee shall have the right to return all or part of such material at any time prior to such date.

B. Except as otherwise provided herein. or as may be mutually agreed. material subject to this Lease which is returned directly to the Commission shall be in one of the following standard forms after having been processed in facilities acceptable to the Commission A.

Enriched uranium (U-235) --As uranium hexafluoride

Plutonium --As plutonium metal

Uranium-233 --As uranyl nitrate

and shall meet the Commission's established specifications for return of material in effect as of the date of this Lease.

C. Material transferred to another nation or international organization with the consent of the Commission. regardless of the form and/or specification of such material, shall be deemed to have been returned to the Commission.

D. In the event that no reprocessing facilities other than the Commission's are available to the Lessee and acceptable to the Commission, or in the event the Lessee established to the satisfaction of the Commission that the charge for processing in acceptable non-Com mission facilities would exceed the value of special nuclear material recoverable, the Commission will accept the return of material in a form and/or specification other than those provided in B, above. In such event. the Lessee shall have the option to (i) pay a service charge for processing such returned material so as to enable it to satisfy the Commission's established specifications in effect as of the date of this Lease. or (ii) pay a sum equal to the value or worth of such material plus a special service charge, determined in accordance with Commission pricing policy then in effect for handling, storage and/or disposal of the material. The service charge for processing referred to in this paragraph, shall include the Commission's charge for processing. as determined in accordance with the established Commission pricing policy then in effect. and an amount, as determined by the Commission, for the value or worth of the material consumed during processing. Whenever material returned by the Lessee is subject to processing charges under this paragraph. the Lessee shall continue to pay the use-charge on such material until expiration of a normal processing period as determined by the Commission.

E. It is understood by the Parties hereto that in the event described in paragraph D above, the Lessee may request chemical processing for material leased hereunder. It is further understood by the Parties that upon such request of the Lessee. the Commission will make a determination as to whether it can undertake to perform such service, and, if determined affirmatively, under what terms and conditions such service is performed. taking into consideration such factors as the availability of: a) acceptable commercial facilities to perform the service, b) Commission facilities, and c) comparable services by the Commission to United States reactor licensees.

F. Material subject to this Lease returned directly to the Commission in the form of uranium hexafluoride shall be shipped only in cylinders of appropriate size as specified by the Commission. The quantity of such material shipped in a container shall not be less than the Commission established minimum loading for the type of cylinder used.

G. All material to be returned to the Commission shall be transported under appropriate safeguards prescribed by the Commission against hazards to health and safety to a port of entry in the United States of America to be designated by the Commission after consultation with the Lessee. The Commission shall thereupon perform those actions required to authorize the import of such material. Unless otherwise mutually agreed by the Parties. the Lessee shall thereafter arrange for a transporter, subject to such terms, charges. conditions, and licenses as the Commission may require, to transport such material to the Commission facility or location specified by the Commission, f. o. b. commercial conveyance at Such facility or location. and shall be responsible for the costs of such transportation. Unless waived by the Commission, the Lessee shall give the Commission at least sixty (60) days' written notice of intent to return material to the Commission. and the form and specifications of such material. The Commission will notify the Lessee as soon as practicable after receipt of the Lessee's notice of intent to return material, as to the acceptability of such material pursuant to the terms of this Lease, and if appropriate, as to the Commission facility or location designated for return of this material. The Lessee, at the time of shipment of material, shall notify the Commission facility or location to which shipment is made of the date and method of shipment, and expected date of arrival, and upon delivery of such material to the above mentioned facility or location. the Commission shall accept the return of such material, and shall sign an appropriate written receipt which will evidence such acceptance and the date of return of material hereunder.

ARTICLE 8-PAYMENT FOR MATERIAL LOST AND CONSUMED

A. Except as otherwise provided herein, the Lessee shall be responsible for and shall reimburse the Commission for any loss or consumption of material, whether or not such loss or consumption is due to the fault or neglect of the Lessee, or any other cause occurring from the time of delivery of such material to the Lessee and until such material has been returned to the Commission as provided herein.

B. The amount due the Commission for material lost or consumed shall be the value or worth of such material computed in accordance with this Lease; provided, that where material is consumed by reduction of value due to blending with special nuclear material or other alteration of the isotopic ratio, the amount due shall be determined by subtracting the value or worth of the blended or altered material from the value or worth of such material prior to such blending or alteration, as shown in Lessee's account, established under Article 11 below. The Lessee shall, when required by the Commission, make periodical payments for material lost or consumed based on the date reflected in the Lessee's reports of loss or consumption. The forms for reporting loss or consumption of material shall be prescribed by the Commission.

ARTICLE 9-USE-CHARGE PAYMENT

Except as otherwise provided herein, the Lessee agrees to pay the Commission a use-charge for material subject to this Lease, as provided in Article 11 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 10-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 services subject to this Lease, or to observe other specific provisions of this Lease, if the Commission, in accordance with statutory or other authority available to it, determines. after consultation with the Lessee, that such charges or other provisions, are not applicable.

ARTICLE 11-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 or worth of the material subject to this Lease. Such account will be credited as provided herein with the amount or amounts equal to the value or worth of the material returned or paid for, in accordance with this Lease. The daily balance of this account shall be used for computing the amount due to the commission for use-charges. The value or worth of material reflected in this account after credit for the value or worth of material returned and for payments for material lost or consumed shall represent the amount due to the Commission for material not returned or paid for.

B. Except as otherwise provided in this Lease, the Lessee's account will be debited for material furnished as of the date material is delivered to the Lessee.

C. The Lessee's account will be credited for material returned directly to the Commission or transferred to another nation or international organization only when the material is returned or transferred in accordance with Article 7. 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 the Commission facility or location pursuant to Article 7 G. Credit for material transferred to another nation or international organization win be made as of the date to be mutually agreed. Credit for material paid for will be made as of the date such payment is received by the Commission.

D. Whenever the Commission changes any applicable base charge as provided in Article 12 below, the value or worth of material recorded in the Lessee's account will be recomputed at the new base charge; provided, that the value or worth of material lost or consumed as of the date of such change shall not be recomputed. The new base charge will be used in determining the value or worth of material lost or consumed, and for computing the value or worth of material subject to use-charges, subsequent to the effective date of the change in the applicable base charge.

E. The Lessee will be notified of the debits and credits made to his account as the result of shipments and transfers of material, and of any changes in the value or worth of material in such account as the result of changes in the applicable base charges. The Lessee will promptly notify the Commission of any disagreement with, or discrepancies or errors in, such notices.

F. The Lessee will submit such transfer documents covering receipts and shipments, and reports of loss or consumption, and inventory, with respect to material subject to this Lease, as the Commission may prescribe, and shall maintain and make available to the Com-mission for inspection, upon reasonable notice, adequate records pertaining to the receipt, possession, transfer, or use of material subject to this Lease.

ARTICLE 12-CHANGES IN RATE OF USE-CHARGE, BASE CHARGES, AND SPECIFICATIONS

A. The rate of use-charge, the base charges and the specifications for material furnished pursuant to this Lease are subject to change by the Commission in accordance with the Act.

B. Any changes in the rate of use-charge, the base charges and/or the specifications shall be effective on either July 1 or January 1 as stated in a notice of change published by the Commission, provided at least thirty (30) days' prior notice of such changes is given the Lessee, by publication or otherwise.

ARTICLE 13-PERFORMANCE OF AEC OBLIGATIONS; BILLING

A. The Commission may fulfill its obligations under the Lease through the operator of any of its facilities.

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-charge and for loss or consumption of material.

C. All billings made periodically as prescribed in Article 8 B are subject to adjustment to recognize actual amounts, enrichment, isotopic content, and specifications of material involved; provided that, except as stated in paragraph D, below, such adjustments 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. Payment received after sixty (60) days from date of invoice shall entitle the Commission to an additional charge at six (6) per cent per annum on such amount.

ARTICLE 14-TIME OF DELIVERY

The Commission will make reasonable efforts to deliver material at the time or times stated in orders for material subject to this Lease, but neither the Government of the United States of America, the Commission, nor persons acting on behalf of the Comission shall be subject to any liability for any failure to do so.

ARTICLE 15-CYLINDERS AND EQUIPMENT

A. Except as otherwise may be agreed by the Parties hereto, all shipments of enriched uranium (U-235) in the form of uranium hexafluoride (UF6) from the Commission to the Lessee directly, and from the Lessee directly to the Commission, will be made in cylinders purchased from the Commission. If requested by the Lessee, cylinders for return of uranium hexafluoride (UF6) directly to the Commission will be made available to the Lessee f.o.b. commercial conveyance at the Commission facility.

B. Except as provided in Paragraph A above, shipments of material subject to this Lease to the Lessee, and the return shipment of such materials to the Com-mission, shall be made only in containers and/or equipment acceptable to the Commission. The Com-mission may, but shall not be required to, furnish containers and equipment for shipping such material.

C. Any non-AEC-owned cylinders, containers and equipment furnished or utilized by the Lessee will meet current Commission specifications and practices as to safety, design criteria, cleanliness and freedom from contamination, of which the Commission shall be the sole judge. The Commission will endeavor to return non-AEC-owned cylinders, containers and other equipment to the Lessee in a reasonable time, but will not be responsible for any loss of or damage to such cylinders, containers or equipment except as may result from its fault or negligence. Such return shipments of non-AEC-owned cylinders, containers and other equipment by the Commission will be made f.o.b. commercial conveyance at the Commission facility.

D. Whenever material is shipped to the Commission, and the Commission elects to decontaminate the containers, railroad cars, trucks or other shipping vehicles or the Commission's unloading area and machinery, because the containers, or the material or the method of shipment failed to meet the health and safety standard prescribed by the Commission or any other United States Government agencies having jurisdiction over such matters, the Lessee shall be responsible to the Commission for the full cost of such decontamination as determined by the Commission in accordance with established Commission pricing policy.

ARTICLE 16-ASSIGNMENT

The Lessee may not assign this Lease, or any order for material subject to this Lease, without the express written approval of the Commission.

ARTICLE 17-DETERMINATION OF MATERIAL QUANTITIES AND PROPERTIES; SETTLEMENT OF MEASUREMENT DIFFERENCES; ADJUST-MENTS OF USE-CHARGES

A. The provisions and procedures contained in paragraphs A through C of this Article 17 shall apply to the determination of quantities and properties of material, and the resolution of measurement differences resulting from such determination, with respect to material leased hereunder which is to be furnished the Lessee directly, and with respect to material subject to this Lease which is returned directly to a Commission facility. For the purposes of this paragraph, the terms "receiver" and "shipper" shall refer to the Lessee and the Commission, as the case may be.

(1) The Commission samples obtained using the Com-mission's procedures will be the official samples and shall be binding upon the Lessee, the Com-mission and the umpire unless the Lessee and Commission agree upon the use of other samples.

(2) If the receiver does not accept the shipper's quantities and/or properties stated on the AEC transfer form for such material, the receiver shall within sixty (60) days after the receipt of the material or the AEC transfer form. whichever is later, submit a notice of disagreement in writing to the shipper. The notice of disagreement shall include measurement data supporting the disagreement. If such notice of disagreement is not submitted within such sixty (60) days, the shipper's measurements will be final and binding upon both Parties. The receiver shall not use or dispose of the material in any manner until the difference is resolved unless such use or disposition is mutually agreed to by the Lessee and the Commission, provided that nothing herein shall prevent the receiver from handling the material as necessary for storage or protection against health and safety hazards.

(3) If the disagreement is not resolved by mutual agreement, the following procedures shall apply:

(a) If the disagreement concerns bulk measurement (i. e., total volume, gross and net weight, total piece count or any other measurement made on the entire quantity of material involued), repeat measurements shall be performed by an umpire mutually agreed to by both Parties at a mutually agreed upon site. The umpire's result will be conclusive on both Parties. The Party whose original measurement result is furthest from the umpire's result will bear the umpire's charges; provided, in the event the umpire's result is equidistant between the shipper's and the receiver's results, the Parties will each bear one-half of the umpire's charges.

(b) If the disagreement concerns results obtained from analysis of a sample. an official sample will be submitted to an umpire mutually agreed upon for analysis. The umpire's result will be conclusive on both Parties.

(i) In the case of a disagreement with respect to specification limits based on an official sample, the receive will bear the umpire's charges if the umpire's result is within specification limits, and the shipper will pay the umpire's charges if the umpires result is not within specification limits.

(ii) In the case of a disagreement concerning quantitative determinations on an official sample, the umpire's result will be used and the Party whose result is furthest from the umpire's result will pay the umpire's charges; provided, in the event the umpire's result is equidistant between the shipper's and the receiver's results, the Parties will each bear one-half of the umpire's charges.

B. The period of time during which use-charges shall accrue under this Lease with respect to material subject to a measurement disagreement hereunder shall be adjusted as follows:

(1) Where the disagreement pertains to material delivered to the Lessee and is resolved by the umpire in favor of the Lessee, no use-charge shall accrue between the date of receipt of notice of disagreement and the date of resolution or the date of use or disposition of material by the Lessee when such use or disposition is mutually agreed to by the Parties as provided in Article 17 A (2), whichever occurs first. Provided, however, that where the disagreement pertains to specifications of the material and is resolved by the umpire in favor of the Lessee, no use-charge shall accrue unless the Lessee elects to retain the material, uses or disposes of the material when such use or disposition is mutually agreed to by the Parties as provided in Article 17 A (2). or fails to return it within a reasonable time after resolution of the disagreement.

(2) Where the disagreement pertains to material returned directly to the Commission. no use-charge shall accrue between the date of receipt of the shipment and the Lessee's receipt of notice of disagreement. Use-charges shall accrue between the Lessee's receipt of notice of disagreement and the date of resolution or the date of use or disposition of the material by the Commission when such use or disposition is mutually agreed to by the Parties as provided in Article 17 A (2). whichever occurs first, unless the disagreement is resolved in favor of the Lessee.

(3) Where an umpire is used and the umpire's result is equidistant from those of the Parties, no use-charge shall accrue for onehalf of the period between the date of receipt of notice of disagreement and the date of resolution or the date of use or disposition of the material by the Lessee or the Commission when such use or disposition is mutually agreed to by the Parties as provided in Article 17 A (2). whichever occurs first.

(4) Where the disagreement is resolved by mutual agreement, the period of use-charge shall be included in and settled by mutual agreement.

The above use-charges shall apply to the total of the material whose quantity or other characteristics is involved, and not to the amount represented by any difference of the measurements.

C. The quantity and/or properties of irradiated material subject to this Lease and returned directly to a Commission facility for processing will be determined in accordance with the provisions and procedures agreed upon in the contract between the Lessee and the Commission for the processing of such material.

D. With respect to material ordered hereunder which is furnished a United States contractor engaged or arranged by the Lessee for purposes of processing and/or fabrication, and preparation the following shall apply:

(1) The Lessee shall cause the said contractor to submit to the Commission a written certificate of the contractor's determination of the quantity of special nuclear material contained in the processed and/or fabricated and prepared material, and of its isotopic content. Unless otherwise agreed by the Parties hereto, the per cent of the isotope uranium-235 in any enriched uranium either processed and/or fabricated and prepared by the Lessee's United States contractor shall be deemed to be the same as the uranium-235 isotopic enrichment of the uranium made available by the Commission to the contractor and the contractor's certificate shall be written accordingly. The quantity of special nuclear material contained in the processed and/or fabricated and prepared material shall be as determined and certified in writing by the United States contractor and as may be concurred in or revised by the Commission after any reviews or analyses which the Commission may deem appropriate.

(2) The provisions and procedures governing, as between the Commission and the said contractor, the determination of quantities and properties of said material, and the resolution of measurement differences resulting from such determination shall be those established by the arrangement between the Commission and the said contractor.

ARTICLE 18-PATENT INDEMNIFICATION

Unless expressly waived in writing by the Commission. the Lessee agrees to indemnify the Government of the United States of America, the Commission, and persons acting on behalf of the Commission against liability, including costs and expenses incurred, for infringement of any Letters Patents occurring in the course of the performance of any service, analysis or test performed for the Lessee as a result of following specific instructions of the Lessee in connection therewith.

ARTICLE 19-RIGHT TO USE AND PUBLISH INFORMATION

The Commission shall have the right to publish and use any information 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 20-OTHER CONTRACTS AND AGREEMENTS

This Lease contemplates the possibility of separate contracts between the Lessee and the Commission for processing services of irradiated materials which are subject to this Lease, and/or agreements between the Lessee and the Commission under which material subject to this Lease is made available to the Commission for its benefit, and which may provide for suspension or termination of use-charges and suspension, termination or revision of other obligations hereunder, and/or for measurement of amounts of material which the Lessee is returning. Except for such suspension or termination or revision or the use of measurement data in determining amounts of material returned for which the Lessee will be allowed credit hereunder, the Lessee's obligations under this Lease for material subject to this Lease shall continue notwithstanding the existence of such separate contract or contracts.

ARTICLE 21-OFFICIALS NOT TO BENEFIT

It is understood that, in accordance with the laws of the Government of the United States of America, no Member of Congress of the United States of America. or Resident Commissioner of the United States of America shall be admitted to or share any part of this Lease or any benefit that may arise therefrom.

ARTICLE 22-NOTICES

A. Any notices required by this Lease of the Lessee shall be submitted in writing to the Commission addressed to:

Director

Division of International Affairs

United States Atomic Energy Commission

Washington 25, D. C.

B. Any notices required by this Lease of the Commission shall be submitted in writing to the Lessee addressed to:

Counselor

Embassy of Japan

2514 Massachusetts Avenue, N. W.

Washington 8, D. C.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed pursuant to duly constituted authority.

DONE, at Washington, in duplicate, in the Japanese and English languages this 19th day of May, 1961.

FOR THE GOVERNMENT OF JAPAN

Tadao Kato

FOR THE UNITED STATES ATOMIC ENERGY COMMISSION ACTING ON BEHALF OF THE GOVERNMENT OF THE UNITED STATES OF AMERICA

A.A. Wells

SNM Lease Agreement No.JA/L/6

APPENDIX "A"

Appendix to Special Nuclear Material Lease Agreement between the Government of Japan and the United States Atomic Energy Commission Acting on Behalf of the Government of the United States of America, for use in the operation of:

Facility A. Semi-Homogenous Critical Facility

Facility B. Aqueous-Homogenous Critical Facility

Facility C. Fast Neutron Converter of the Fast Breeder Exponential Experiment Facility

The above 3 facilities to be located at the Japan Atomic Energy Research Institute. Tokai-mura, Naka-gun, Ibaragi-Ken, Japan.

May 19, 1961

My dear Mr. Wells:

I refer to the Special Nuclear Material Lease Agreement between the Government of Japan and the United States Atomic Energy Commission Acting on Behalf of the Government of the United States of America, which was signed today, and wish to state the following understandings which have been reached during our negotiations leading to the conclusion of the Agreement:

1. With reference to Article 6 A and B (2), and to Article 7 G, of the Lease Agreement, it is understood that, with respect to special nuclear material subject to the Lease Agreement distributed, or to be distributed, to an authorized user in Japan, such authorized user will engage the transporter of such material and pay the costs of such transporter. It is further understood, however, that the Government of Japan (hereinafter referred to as the Lessee) will continue to be responsible, under the Lease Agreement, to the United States Atomic Energy Commission (hereinafter referred to as the Commission) for assuring that transportation arrangements in connection with delivery and return of such material are adequately provided for and that the costs thereof are paid.

2. At such time as the Lessee may be in a position to exercise the option provided for in Article 7 D (ii) of the Lease Agreement, the Parties will consider, if the Lessee so requests. purchase by the Lessee of such special nuclear material as may be involved. This is to con arm that Article 3 and Article 7 A of the Lease Agreement specifically provide for consideration by the Parties of possible purchase by the Lessee of special nuclear material that might be subject to the provisions of Article 7 D (ii). Further, since the Agreement for Co operation between the Government of Japan and the Government of the United States of America Concerning Civil Uses of Atomic Energy, signed June 16, 1958, as amended, provides that the Commission will sell or lease, as may be agreed, enriched uranium for reactors constructed in Japan pursuant to the aforementioned Agreement for Cooperation, and assuming that the Commission's current policy of selling enriched uranium for use in reactors remains unchanged, no difficulty is foreseen in reaching an understanding, consistent with the Agreement for Cooperation, for the sale at some future date of special nuclear material transferred to the Lessee under the Lease Agreement.

3. With reference to Article 18 of the Lease Agreement, it is understood that, should special nuclear material be leased pursuant to the Lease Agreement at some future time for use in other than research and material test reactors, the Parties shall consider the advisability of the user's providing the Government of the United States of America with an explicit indemnification against any liability for infringement of any Letters Patent which might arise out of the use of such material.

4. With respect to Article 21 of the Lease Agreement, it is understood that this Article is not intended to mean that the Lessee shall, without its consent, be subject to the jurisdiction of the courts of the Government of the United States of America.

It would be greatly appreciated, if you would be good enough to confirm the above understandings.

Sincerely yours,

Tadao Kato

Counselor

Mr. A.A. Wells,

Director Division of International Affairs

United States Atomic Energy Commission Washington 25, D.C.

May 19. 1961

Mr. Tadao Kato

Counselor, Embassy of Japan

2514 Massachusetts Avenue, N. W.

Washington 8, D. C.

My Dear Mr. Kato:

I refer to your letter dated today, in connection with the Special Nuclear Material Lease Agreement between the United States Atomic Energy Commission Acting on Behalf of the Government of the United States of America and the Government of Japan, which was signed today in which you set forth your understandings on certain matters, as follows:

1. With reference to Article 6 A and B (2). and to Article 7 G, of the Lease Agreement, it is understood that, with respect to special nuclear material subject to the Lease Agreement distributed, or to be distributed, to an authorized user in Japan, such authorized user will engage the transporter of such material and pay the costs of such transporter. It is further understood, however, that the Government of Japan (hereinafter referred to as the Lessee) will continue to be responsible, under the Lease Agreement, to the United States Atomic Energy Commission (hereinafter referred to as the Commission) for assuring that transportation arrangements in connection with delivery and return of such material are adequately provided for and that the costs thereof are paid.

2. At such time as the Lessee maybe in a position to exercise the option provided for in Article 7 D (ii) of the Lease Agreement, the Parties will consider, if the Lessee so requests, purchase by the Lessee of such special nuclear material as may be involved. This is to con arm that Article 3 and Article 7 A of the Lease Agreement specifically provide for consideration by the Parties of possible purchase by the Lessee of special nuclear material that might be subject to the provisions of Article 7 D･(ii). Further, since the Agreement for Cooperation between the Government of Japan and the Government of the United States of America Concerning Civil Uses of Atomic Energy, signed June 16, 1958, as amended, provides that the Commission will sell or lease, as may be agreed, enriched uranium for reactors constructed in Japan pursuant to the aforementioned Agreement for Cooperation, and assuming that the Commission's current policy of selling enriched uranium for use in reactors remains unchanged, no difficulty is fore seen in reaching an understanding, consistent with the Agreement ･for Cooperation, for the sale at some future date of special nuclear material transferred to the Lessee under the Lease Agreement.

3. With reference to Article 18 of the Lease Agreement. it is understood that, should special nuclear material be leased pursuant to the Lease Agreement at some future time for use in other than research and material test reactors, the Parties shall consider the advisability of the user's providing the Government of the United States of America with an explicit indemnification against any liability for infringement of any Letters Patent which might arise out of the use of such material.

4. With respect to Article 21 of the Lease Agreement, it is understood that this Article is not intended to mean that the Lessee shall, without its consent be subject to the jurisdiction of the courts of the Government of the United States of America.

I would like to take this opportunity to confirm our understanding of the matters set forth above.

Sincerely yours,

A.A. Wells, Director

Division of International Affairs