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

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

THIS LEASE Agreement (hereinafter referred to as the "Lease"), is entered into this 25th day of September, 1970, by and between the UNITED STATES ATOMIC ENERGY COMMISSION (hereinafter called the "Commission") acting for and on behalf of the Government of the United States of America (hereinafter called the "Government"), and the Government of Japan (hereinafter called the "Lessee");

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

WHEREAS, this Lease is authorized and executed on the part of the Commission under the United States Atomic Energy Act of 1954, as amended, and the Agreement for Cooperation;

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 America and the Government of Japan Concerning Civil Uses of Atomic Energy, signed at Washington on February 26, 1968, as it may be amended or superseded.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 normal or depleted uranium or 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 "blending" means the altering of the isotopic composition of a quantity of am element by means other than through the irradiation of material in a nuclear reactor.

f. The term "Commission facility" means a laboratory, plant, office, or other establishment operated by or on behalf of the Commission.

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

h. The terms "consumed" or "consumption" mean the destruction, burnup, loss or disposition of material in such manner that it cannot be economically recovered for further use, material unaccounted for, or changes in the composition of material due to blending of different assays of material or other alteration of the isotopic ratio resulting in the reduction in value of such material.

i. The term "depleted uranium" means uranium having a weight fraction U-235 of less than 0.00711.

j. 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 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 furnished 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" includes employees and contractors of the Commission, and employees of such contractors. Who implement or participate in the implementation of this Lease pursuant to their employment or their contracts with the Commission.

m. The term "source material" means (1) uranium, thorium, or any other material which is determined by the Commission pursuant to the provisions of section 61 of the foregoing materials, in such concentration as the Commission may by regulation determine from time to time.

n. The term "special nuclear material" means (1) plutonium, uranium-233, uranium enrichad in the isotope 233 or in the isotope 235, and any other material which the Commission determines 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 foregoing, but does not include source material.

o. The term "standard form" means the chemical form of normal 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 States dollar amount determined 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 material is in standard form or meets the Commission's established specifications; provided, however, where uranium enriched in the isotope U-235 subject to this Lease has its isotopic ratio 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 periodical 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 subparagraph 3(a) of the United States Federal Register Notice entitled "Plutonium and Uranium Enriched in U-233; Guaranteed Purchase Price," 30 FR 3886, March 25, 1965, as the same may be amended from time to time.

ARTICLE II - SCOPE

a. 1. This Lease is subject to all of the terms, conditions, provisions, and guarantees contained in the Agreement for Cooperation.

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 furnished to the Lessee by the Commission on and after the date of execution of this Lease, and to the material, if any, subject to Special Nuclear Material Lease Agreement between the Government and the Lessee as of the date and hour this Lease Agreement enters into force. 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 nuclear material order form prescribed by the Commission. The Lessee shall specify in his order whether he desires the ordered material to be furnished (a) directly to the Lessee, (b) through a Commission-licensed United States firm who is a lessee of the Commission (hereinafter referred to as the "United States Contractor") engaged by the Lessee. For processing and/or fabrication, or other purpose, or (c) otherwise. In any case, actual delivery to the Lessee shall be affected at a United States port of export as provided for under Article XV, "Delivery," of this Lease.

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 terms 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 the Lessee, or to provide services for the Lessee with respect to material

ARTICLE III - TITDE

Except as otherwise provided herein or as may be agreed in writing 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; or until such later date as may be mutually agreed upon by 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 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 in effect at the

d. In the event that Lessee for any reason is unable to use any material leased hereunder for the purpose for which said material was leased, Lessee shall promptly notify the Commission and shall return the said material in accordance with the terms hereof except as may be otherwise hereafter agreed in writing by the Parties.

e. The Commission may terminate or suspend in whole or in part this 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 corrective action within thirty (30) days of the date of the written notice of such failure to perform as provided above, unless 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 CHARCES

a. Except as otherwise agreed to in writing by the Commission and the Lessee, special nuclear material subject to this Lease shall be furnished to the Lessee in standard form in accordance with the Commission's established specifications.

b. 1. The 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 subject to this Lease 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 in effect at the time such services are rendered. The Lessee shall also pay the equivalent of a use charge 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 such special services.

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

c. 1. 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, 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 to the carrier the transportation charges for returning any material which does not conform to applicable specifications, as well as the transportation charges for shipping conforming replacement material. 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 commence until thirty (30) days after date of shipment.

2. In the case of material ordered hereunder by the Lessee which is furnished to the Lessee's 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.

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 leased 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 material were special nuclear material; provided, that the Lessee's obligations for consumption of, and for use-charges with respect 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 facility 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, require the Lessee to pay the value of such material and transfer title to much 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 other 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 uranium 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 written 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 account with the value of such portion of the Lessee's share of the blended product as does not exceed the value of the Lessee's leased material used in the blending and credit the Lessee's account with the value of the Lessee's leased material used in the blending, (b) title to the blended product so debited to the Lessee's account shall be deemed to be vested in the Government and (c) the Lessee shall pay to the Commission the amount, if any, by which value of the credited material 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 blend, (a) the Commission shall debit the Lessee's account with the value of such portion of the Lessee's share of the blended product as has a feed component which does not exceed the feed component (assuming uranium having an assay of 0.711 weight percent U-235 was used as feed material) of the Lessee's leased material used in the blending and credit the Lessee's account with the value of the Lessee's leased material used in the blending, (b) title to the blended product so debited to the Lessee's account shall be deemed to be vested in the Government, and (c) the Lessee shall pay to the Commission the amount, if any, by which the value of the credited material 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 purchased the material on its lease account that was used in the blending and shall pay the Commission for the value of this material so purchased, and (2) title to such material shall pass from the Government to the Lessee upon payment 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 uranium 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 material may be blended or (B) to accept as conclusive and binding the Commission's determination in writing as to the consequence of any such blending including the 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 derived from the established Commission standard table of enriching services published from time to time by the Commission in the United States Federal Register and in effect as of the date of completion of blending.

(5) It is hereby agreed that the Lessee shall hold the Government, the Commission, and persons acting on behalf of the Commission, harmless from any claims of third parties on account of rights alleged in or in connection with the source material or special nuclear material used in blending.

f.

(1) The Lessee shall maintain and make available to the Commission for examination, upon reasonable notice, complete and adequate records pertaining to his receipt, possession, use, location, movement, and physical inventories of material subject to this Lease. Such records shall fully reflect physical measurements, consumption, actual inventories and the transactions relating thereto. The Lessee will submit such transfer documents and reports reflecting quantities of material received, physically present, consumed, and transferred, with respect to material subject to this Lease as the Commission may prescribe. Lessee will make at least one physical inventory of material subject to this Lease and in the custody of the Lessee during each 12 months' period of the Lease and will insure that such inventories are also made of material subject to this Lease but in the custody of others.

(2) The Lessee shall afford the Commission, at all reasonable times, such access as is necessary to observe the material subject to this Lease and shall Permit the Commission to perform such audit tests and inventory tests, in accordance with mutually accepted procedures, as the Commission deems necessary for verification of the accuracy of any reports as are required to be submitted by the Lessee to the Commission under this Lease. The Commission 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 physical or chemical analyses) so as to minimize interference to the Lessee's processing, delivery schedules, and third party commitments regarding the material. Nothing contained herein shall authorize the Commission to perform destructive testing of a fabricated article containing special nuclear material except with the consent of the Lessee. The Lessee agrees that no charges for costs or value of any material samples, or for services of equipment, should such be furnished by the Lessee or provided in connection with the performance of audit tests and inventory tests, shall be made against the Commission; however, the Commission will allowfull credit in the Lessee's account with the Commission for the value of the material included in the samples and the Commission will make no charge against the Lessee for re-conversion of the mater al samples to standard form. In the event the 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 COMMISSION SERVICES

a. Except as otherwise may be agreed in writing 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 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, after having been processed in facilities acceptable to the Commission, 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 jurisdiction of the Lessee with the consent of the Commission, if such transferee, the Commission, and the Lessee have executed an agreement covering the material so transferred.

d. The commission may in its discretion accept the material in a form an/or specification other than as provided in subparagraph b., above. In such cases, unless the Commission shall determine 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 Commission's charge for processing, as determined in accordance with 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 subject to processing charges under this subparagraph, the Lessee shall continue to pay the use-charge on such material until the expiration of the processing period as determined by the Commission at the time the material is accepted.

e. Unless the Commission accepts material as provided in subparagraph d., above, the Lessee shall pay the Commission for material returned in a form and/or specification other than as provided 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 Commission in the form of uranium hexafluoride shall be shipped only in containers 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 container used.

g.

1. All maternal 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 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 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 location 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 notify the Lessee promptly after receipt of the Lessee's notice of intent to return material as to the Commission facility or location designated for return of the material. The Lessee, at the time of shipment of the material, shall notify the Commission of the date and method of shipment of such material to the Commission facility or other location and expected date of arrival.

h. The Commission shall issue an appropriate written receipt which will evidence return of material hereunder.

ARTICLE VII - PAYMENT FOR MATERLAL CONSUMED

a. Except as otherwise provided herein, the Lessee shall be responsible for and shall reimburse the Commission for any consumption of material, whether or not such consumption is due to the fault or neglect of the Lessee, or any other cause occurring from the time the material is made available by the Commission pursuant to Article XV and until such material has been returned to a Commission facility as provided herein.

b. The Lessee shall make reports semi-annually by February I and August Ito the Commission, on forms as prescribed by the Commission, 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 reasonable effort to accurately fix the time of such consumption on the basis of a specific occurrence or in accordance with procedures and methods of calculating consumption which have been proposed by the Lessee and accepted by the Commission.

c. The Lessee may, and shall, when required by the Commission, pay on a periodic basis for material consumed. Except as otherwise provided herein, the amount due the Commission for material consumed shall be the value of such material computed in accordance with this Lease as of the time of such consumption. 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 the 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 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 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 material 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 computing 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 not returned or paid for. In the event material paid for periodically as having been consumed is later re-established 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 hereof, with the amount or amounts equal to the value of such material at the time of such re-establishment in the Lessee's account.

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, provided that in the case of leased material transferred directly from another lessee of the Commission, the debit will be made as of the effective date specified in the order executed by the Lessee, the other lessee, and the Commission for such material. Except as otherwise agreed to by the Commission, such affective date shall not precede the date of the Commission's execution of such order by more than thirty (30) days and such date shall also be set forth in the applicable transfer document.

c. The Lessee's account will be credited 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 location specified by the Commission pursuant to this Lease. Credit 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 material paid for will be made as of the date payment is received 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 charge, provided, that the value of material consumed as of the effective date of such change shall not be recomputed. Subsequent to the effective date of the change in the applicable base charge, the new base charge will be used in determining the value of material consumed and for computing the value of material 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 charges in the value of material in such account as result of changes in the applicable base charges. The Lessee will promptly notify the Commission of any disagreement with alleged discrepancies, or errors in such notices.

ARTICLE XI- CHANGES IN RATE OF USE-CHARGE, AND SPECIFICATION

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

b. Any increase in base charges or any changes in the standard form or in the Commission's established specifications shall require at least 180 days' notice to the lessee by publication or otherwise. Any increase in the rate of use-charge shall require 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 through the operator of any of its facilities. No such operator is authorized to modify the terms of this Lease, waive any requirement thereof, or settle any claim or dispute arising hereunder.

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 consumption of material.

c. All billings and payments made on a periodical basis are subject to adjustment to recognize actual or calculated amounts, enrichment, isotopic content, and specifications of material involved. Whenever the Lessee has periodically paid for material reported as having been consumed and such material is later re-established in the Lessee's account, the Commission shall 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 adjustments provided for in this paragraph will not subject the Lessee or the Commission to liability for interest.

d. All dills 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. The Lessee shall pay interest at the per annum rate (365-days basis) established from time to time by the Commission for general application to monies due the Commission on all amounts not received by the Commission within sixty (60) days from date of invoice, such interest to commence on the sixty-first (61st) day from date of invoice.

ARTICLE XIII- DISCLALMER; RESPONAIBILITY

a. Neither the Government, the Commission nor persons acting on-behalf of the Commission made any warranty or other representation, express, or implied, that materials furnished under this Lease (i) will not result in injury or damage when used for any purpose, (ii) are of merchantable quality, or (iii) are fit for any particular purpose.

b. With respect to the material leased hereunder, the Lessee shall indemnify and save harmless the Government of the united States of America against any and liability (including third party liability) for any cause whatsoever arising out of the production or fabrication, the transportation, the ownership, the lease, and the possession and use of such special nuclear material commencing with the time the material is made available by the Commission pursuant to Article XV except to the extent that such responsibilities are borne by a United States contractor of the Lessee under a Special Nuclear Material lease Agreement between the Commission and such contractor. Nothing in this paragraph shall deprive the Lessee or any other 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 this Lease, but neither the Government, the commission, nor persons 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 furnished the Lessee, the 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 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. All costs of domestic and overseas transportation and delivery (including costs of containers and packaging) and of storing such material in connection with such delivery shall be the responsibility of the Lessee and not the commission. 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 leased material.

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

(1) The commission shall make available to the said United States contractor, in board commercial conveyance at a facility of the Commission, the said material.

(2) Upon completion of the processing and preparation of the material by the said contractor, and receipt by the Commission of the written certificate of the said Contractor's determination of the isotopic content and quantity of special nuclear as required by paragraph c. of Article XVIII, of this Lease, the Lessee shall arrange 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 b designated by the Commission after consultation with the Lessee, The Commission shall thereupon perform those 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 storing such material, as well as all arrangements for physically handling such material in connection with such delivery shall be the responsibility of the Lessee and not the commission. 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 assume full and complete responsibility for the leased material.

ARTICLE XVI - CONTAINERS AND EQUIPMENT

a. All shipments of material from 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 reasonably available from commercial sources the Commission may furnish Commission-owned containers if such are available. Any Commission-owned containers to be used for shipment of material will be made available to the Lessee, f.o.b. the lessee's vehicle or commercial conveyance, at a Commission facility designated by the Commission within a reasonable time specified by the Commission prior to the scheduled delivery of materials to be shipped to the Lessee in such containers and for temporary storage of material shipped therein.

b. All containers and equipment, whether Commission-owned or Lessee-furnished, must meet Commission regulations, specifications and practices as to safety, design criteria, cleanliness and freedom from contamination in effect at the time furnished, utilized or returned, of which the Commission shall be the sole judge. In the event material is returned by the Lessee to the Commission in non-Commission-owned containers and other material is to be delivered to the lessee, the Commission shall utilize to the extent practicable such non-Commission-owned containers for shipments of material if so desired by the lessee, The commission will promptly return to the lessee non-Commission-owned containers an other equipment identified as "Returnable," but will not be responsible for any loss of or damage to such containers or equipment except as may result from its fault or negligence, Such return shipments by the Commission will be made f.o.b. lessee's vehicle or commercial conveyance at the Commission facility to which they were shipped.

c. Title to Commission-owned containers and equipment shall remain in the Government. The Lessee shall be responsible for the payment of such rental charge. for such containers and equipment, as shall be established by the Commission for general application to users of such Commission-owned property. The Lessee will promptly retune Commission-owned containers and equipment to the Commission facility from which received, f.o.b. Lessee's vehicle or commercial conveyance at the Commission facility. The lessee will not be responsible for any loss of or damage to Commission-owned containers or equipment except as may result from the fault or negligence of the lessee, its contractors, or agents. Commission-owned containers or equipment will be used only for shipment of material to and from the Commission and for temporary storage 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, 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 standards prescribed by the commission or any other Federal or State 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. Any residual quantities of material in containers or equipment returned to the Commission will be deemed to have been consumed by the Lessee, and the Lessee shall pay for such material in accordance with this Lease.

ARTICLE XVII - ASSIGNMENT

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

ARTICLE XVIII - DETERMINATION OF MATERIAL QUANTITIES AND PROPERTLES; RESOLUTION OF MEASUREMENT DIFFERENCES

a. The following provisions and procedures 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 subject to this Lease which is received by the Lessee from a Commission facility or returned directly to a Commission facility. For the purposes of this article, the term's "supplier" and "receiver" shall refer to the commission and the Lessee as the case may be. The supplier will promptly furnish the receiver a statement of the quantities and properties of the material transferred including a statement of the gross weight of the container plus material and the care weight of such container

(1) The Commission samples obtained at a Commission facility using the Commission's procedures will be the official samples and shall be binding upon 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 determination of the net weight of material transferred as determined by the gross weight of the container plus material less the care weight of such container. The net weight of material transferred shall be determined prior to delivery to the Lessee or acceptance of delivery by the Commission and the Lessee agrees upon other procedures or facilities. Upon written request submitted at the time of ordering or returning material, the Lessee shall be given and opportunity to observe, at the Lessee's expense, the we3ighing of the container and the container plus material and the taking of official samples by the Commission. The Commission shall mortify the Lessee of the dates and places for observance of such events. The net weight of material transferred shall be as determined by the results of such weightings and shall not be subject to the provisions of subparagraphs (3) and (4) below.

(3) If, after determination pursuant to (20 above of the net weight of the material transferred, the receiver does not accept the supplier's statement of the other quantities and properties of the material transferred, the receiver shall within sixty (60) days after the receipt of the material or the supplier's statement of quantities and properties, whichever is later, submit to the supplier a notice of disagreement in writing, The notice of disagreement shall include measurement and/or analysis date supporting the disagreement. If such notice of disagreement is not sub-mitted 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 specification limits, the receiver may use or dispose of the material prior to resolution of the disagreement. If the disagreement is with respect to whether the material is within specification limits, the receiver may handle the material as necessary for storage or protection against health and safety hazards; provided, however, should the rece3iver 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 from analysis of a sample which is not resolved by mutual agreement, and official sample shall be submitted to an umpire mutually agreed upon for analysis. The umpire's results shall be conclusive on both parties.

(i) In the care of a disagreement with respect to whether or not the material is within specification limits, the receiver will pay the umpire cost if the umpire's result is within specification limits, and the supplier will pay the umpire 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 whose result is furthest from the umpire's result will pay the umpire cost; provided that in the event the umpire's result is equidistant between the supplier's and the receiver's results, the parties will each bear one-half of the umpire coat.

(iii) As used in this subparagraph (4),the phrase "umpire cost" 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 determined 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 determined in accordance with the provisions and procedures agreed upon 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 determination of the quantity of special nuclear material contained in the converted or fabricated and prepared material, and of it 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 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 said contractor and the certificate shall be written accordingly. The quantity of special nuclear material contained in the converted or fabricated and prepared material shall be as determined by the United States contractor and set forth in such certificate as such quantity may be accepted by the Lessee and thereafter accepted or ravised 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 determinations 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 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 disagreement hereunder shall be adjusted as follows;

a. Where the disagreement is concerned solely with quantitative determination within specification limits (1) of material delivered 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 measurements 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 amount of material represented by the difference in measurements shall accrue between the date of receipt of the shipment and the date of resolution. Where the umpire's results are equidistant from those of the parties, no use-charge for the amount of material represented by the difference in measurements shall accrue for one-half of the aforementioned relevant period.

b. Where the disagreement is concerned with specification limits of (1) material delivered directly to the Lessee from a Commission 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 received 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 agreement the period of use-charge shall be included in and settle 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 expanses incurred, for infringement of any Letters Patent occurring in 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, of occurring in the utilization by the Lessee of any material procured hereunder.

ARTICLE XXI - RICHT 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 XXII - LAWS REGULATIONS AND ORDIMANCES

The Lessee shall procure any necessary permits and licenses in accordance with all applicable laws, regulations and ordinances of the United States and of any State, territory, or political subdivision.

ARTICLE XXIII - OFFICIALS NOT TO RENEFIT

It is understood that, in accordance with the laws of the United States of America no member of Congress or resident commissioner of the United States of America shall be admitted to any share or part of this lease or to any benefit that may arise therefrom.

ARTICLE XXIV - APPLICABLE LAW

This Lease shall be construed according to the laws Applicable in the federal courts of the United States of America for contracts in the United States of America to which the Government of the United States of America is a party.

ARTICLE XXV - ADDITIONAL PROVISIONS

Notwithstanding the provisions of Article II, paragraph a.2. of this Lease, this Lease shall not apply to or affect the lease of material under agreements of the Parties signed November 23. 1956, and May 8. 1957 referred to as JA/L/1 and JA/L/2, respectively.

ARTICLE XXVI - 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, D. C. 20545

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

Counselor

Embassy of Japan
2520 Massachusetts Avenue, N.W.
Washington, D.C. 20008

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement.

DONE, at Washington, in duplicate in the English and Japanese languages this 25th day of September, l970.

FOR THE GOVERNMENT OF JAPAN
(Signed) Mizuo Kuroda
Counselor Embassy of Japan

FOR THE UNITED STATES ATOMIC ENERGY COMMISSION ACTING FOR AND ON BEHALF OF THE GOVERNMENT OF THE UNITED STATES OF AMEROIA
(Signed) Myron B. Kratzer
Assistant General Manager for International Activities

(Japanese letter)

September 25,1970

Dear Mr. Kratzer:

I have the honour to refer to the Lease Agreement for Special Nuclear Material between the Government of Japan and the United States Atomic Energy Commission acting for and on behalf of the Government of the United States of America, signed today, and wish to state the following understandings on certain matters in respect to the Agreement:

1. With reference to Article IV, paragraph a. of the Lease Agreement l it is understood that any Commission decision to permit its foreign lessees to continue to possess and use) after December 31,1970, amounts of special nuclear material previously leased to them by the Commission would be applicable to the Lessee in a non-discriminatory manner. Furthermore, should the Commission decide not to permit continued leasing, we fully anticipate that its Lessees would be given a reasonable time after December 31,1970, either to make arrangements for the purchase of material held under the Lease Agreement, or for the orderly and economic recovery from existing uses, and return to tile Commission, of the leased material.

2. The responsibility and the liability of the Government of Japan referred to in Article V. e. (5), Article XIII b. and Article XX of the Lease Agreement falls within the extent of that described in Article VIII, I of the Agreement for Cooperation.

3. With reference to Article XIII, paragraph b. of the Lease Agreement, it is understood that if and when any amendment is made to sections 11 r. and 170 d. of the United States Atomic Energy Act of 1954, as amended, the Lessee and the Commission will consult with each other on problems which may, as a result of such amendment, arise out of the application of the said Article of the Lease Agreement.

4. With reference to Article XIII b., Article XXIII and Article XXIV of the Lease Agreement, it is understood that these articles are not intended to mean that the Government of Japan shall, without its consent, be subject to the jurisdiction of the courts of the Government of the United States of America. In no way, however, is the foregoing understanding intended to alter the general rules followed in the United States with respect to suits involving foreign Governments.

5. With respect to Article XIII, paragraph b. of the Lease Agreement, it is understood that the understanding between the parties expressed in the letter of October 30, 1964, from Joseph F. Hennessey, General Counsel of the U.S. Atomic Energy Commission to Kiyohiko Tsurumi, Counselor, Embassy of Japan, will apply, mutatis mutandis, to the present Lease Agreement.

It would be greatly appreciated if you would confirm the above understandings.

Sincerely yours,
(Signed) Mizuo Kuroda
Counselor

Mr. Myron B. Kratzer
Assistant General Manager for International activities U.S. Atomic Energy Commission
Washington, D. C. 20545

v

(U. S. letter)

September 25,1970

Dear Mr. Kuroda: This is to acknowledge receipt of your letter dated September 25,1970, which sets forth the following understandings on certain matters in respect to the Lease Agreement for Special Nuclear Material between the United States Atomic Energy Commission acting for and on behalf of the Government of the United States of America and the Government of Japan.

1. (Identical as paragraph 1 of Japanese letter)

2. (Identical as paragraph 2 of Japanese letter)

3. (Identical as paragraph 3 of Japanese letter)

4. (Identical as paragraph 4 of Japanese letter)

5. (Identical as paragraph 5 of Japanese letter)

I am glad to inform you that the United States Atomic Energy Commission acting for and on behalf of the Government of the United States of America confirms its understanding of the matters set forth above.

Sincerely,
(Signed) Myron B. Kratzer
Assistant General Manager for International Activities

Mr. Mizuo Kuroda
Counselor Embassy of Japan 2520 Massachusetts Avenue, N .W. Washington, D .C.20008