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Exhibit 10.1
LEASE AGREEMENT
BETWEEN
THE UNITED STATES DEPARTMENT OF ENERGY
AND
THE UNITED STATES ENRICHMENT CORPORATION
DATED AS OF JULY 1, 1993
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.............................................
Section 1.1 Terms....................................
Section 1.2 Headings.................................
Section 1.3 Rules of Interpretation..................
ARTICLE II AUTHORITY OF THE PARTIES...............................
Section 2.1 Corporation..............................
Section 2.2 Department...............................
Section 2.3 Corporation Board of Directors...........
ARTICLE III GRANT OF LEASE........................................
Section 3.1 Lease of Real Property...................
Section 3.2 Lease of Personal Property...............
Section 3.3 Department's Personal Property
on the Leased Premises.................
Section 3.4 Option to Expand or Reduce Leasehold.....
Section 3.5 Option Procedures........................
Section 3.6 Quiet Enjoyment..........................
Section 3.7 Department Option........................
ARTICLE IV LEASED PREMISES AND LEASED PERSONALTY..................
Section 4.1 Use of Leased Premises and
Leased Personalty .....................
Section 4.2 Physical Condition of Leased
Premises and Leased Personalty.........
Section 4.3 Return of Leased Premises and
Leased Personalty......................
Section 4.4 Turnover Requirements....................
Section 4.5 Permissible Changes......................
Section 4.6 Decontamination and Decommissioning......
Section 4.7 Permits..................................
ARTICLE V ALLOCATION OF LIABILITIES...............................
Section 5.1 .........................................
Section 5.2 .........................................
Section 5.3 .........................................
Section 5.4 .........................................
ARTICLE VI SUPPORT................................................
Section 6.1 Electric Power Agreement.................
Section 6.2 Services Agreement.......................
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ARTICLE VII TERM..................................................
Section 7.1 Initial Term ............................
Section 7.2 Lease Renewal............................
ARTICLE VIII RENT.................................................
Section 8.1 Lease Payment............................
Section 8.2 Rent During Renewal Periods..............
ARTICLE IX INSURANCE AND DAMAGE...................................
Section 9.1 Corporation Insurance....................
Section 9.2 Partial Casualty to the
Leased Premises........................
Section 9.3 Total Destruction of Leased Premises.....
Section 9.4 Partial Casualty to Leased
Personalty.............................
Section 9.5 Total Loss of Leased Personalty..........
Section 9.6 Relationship to Indemnification..........
ARTICLE X XXXXX-XXXXXXXX INDEMNIFICATION..........................
Section 10.1 Xxxxx-Xxxxxxxx Nuclear Hazards
Indemnification by the Department......
ARTICLE XI REPRESENTATIVES........................................
Section 11.1 Site Representatives....................
ARTICLE XII TERMINATION...........................................
Section 12.1 Termination for Convenience.............
ARTICLE XIII MODIFICATIONS AND PRIVATIZATION......................
Section 13.1 Lease Amendments .......................
Section 13.2 Lease Modifications for
Privatization..........................
ARTICLE XIV ASSIGNMENTS AND SUBLEASES ............................
Section 14.1 No Assignment; Substitution
of Department..........................
Section 14.2 No Assignment; Substitution
of Corporation........................
Section 14.3 Subleases...............................
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ARTICLE XV MISCELLANEOUS..........................................
Section 15.1 Entire Lease............................
Section 15.2 Notices.................................
Section 15.3 Severability............................
Section 15.4 No Waiver...............................
Section 15.5 Applicable Law..........................
Section 15.6 Binding Nature of Lease.................
Section 15.7 Lease not Joint Venture.................
Section 15.8 Further Assistance......................
Section 15.9 Licenses................................
Section 15.10 Property Records and other
Information..........................
Section 15.11 Survival...............................
Section 15.12 No Rights in Others....................
Section 15.13 Department's Payment Obligations.......
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LIST OF EXHIBITS
Exhibit A Leased Premises
Exhibit B Leased Personalty
Exhibit C Environmental and Waste Management
Agreement
Exhibit D Regulatory Oversight Agreement
Exhibit E Electric Power Agreement
Exhibit F Services Agreement
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THIS LEASE AGREEMENT ("Lease") is entered into as of July 1, 1993,
between THE UNITED STATES DEPARTMENT OF ENERGY ("Department"), acting by and
through the Secretary of Energy ("Secretary"), and THE UNITED STATES ENRICHMENT
CORPORATION ("Corporation"), acting by and through its Transition Manager
("Transition Manager").
WITNESSETH:
WHEREAS, the Congress of the United States of America has enacted
the Energy Policy Act of 1992, Public Law 102-486, and pursuant to Title IX
thereof further amended the Atomic Energy Act of 1954, which as amended (the
"Act") established a new government corporation, the Corporation; and
WHEREAS, pursuant to Section 1403 of the Act, Congress has directed
the Corporation to lease the gaseous diffusion uranium enrichment plant owned by
the United States located at Paducah, Kentucky, and the gaseous diffusion
uranium enrichment plant owned by the United States located at Portsmouth, Ohio
and their related property, (as more fully described below, the "GDPs"), which
GDPs are presently controlled and operated by the Department; and
WHEREAS, pursuant to Section 1701 of the Act, the United States
Nuclear Regulatory Commission ("NRC") will develop for the GDPs such standards
by regulation as are necessary to protect public health and safety from
radiological hazard and to provide for the common defense and security, and
until the NRC certifies that the Corporation has complied with such standards,
or the NRC certifies a plan prepared by the Department for achieving such
compliance, the GDPs will be operated under the Department's regulatory
oversight and control; and
WHEREAS, in order to ensure that the Corporation achieves the
objectives of the Act with respect to uranium enrichment and otherwise, and to
prepare the Corporation for its eventual privatization, and consistent with the
Department's duties under the Act, Congress has directed that the Secretary
transfer to the Corporation certain property of the Department and that the
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Corporation lease certain property of the GDPs for an initial term commencing on
July 1, 1993;
NOW THEREFORE, under the authority of the Act and subject to its
provisions, and in order to carry out the mandates which Congress has given the
Department and the Corporation therein, the Department and the Corporation
hereby agree to this Lease as follows:
ARTICLE I
DEFINITIONS
Section 1.1 TERMS The following additional terms when capitalized
and used in this Lease (including the Exhibits hereto) shall have the meanings
indicated below. The meanings specified are applicable to both the singular and
the plural.
"Additional Rent" shall have the meaning ascribed to it in Section
8.1 hereof.
"Base Rent" shall have the meaning ascribed to it in Section 8.1
hereof.
"Capital Improvement" means any change, alteration, addition, or
other improvement made by the Corporation to the Leased Premises (as such term
is hereinafter defined) which does not constitute routine maintenance or repair
of such Leased Premises.
"Common Areas" shall have the meaning ascribed to it in Section
3.1(b) hereof.
"Corporation Site Manager" shall have the meaning ascribed to it in
Section 11.1(b) hereof.
"Corrective Actions" shall have the meaning given to such term in
the Solid Waste Disposal Act, as amended.
"Decontamination and Decommissioning" means those activities,
including Response Actions or Corrective Actions, undertaken to decontaminate
and decommission inactive uranium enrichment facilities and related property.
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"Department Site Manager" shall have the meaning ascribed to it in
Section 11.1(a) hereof.
"Determination Order" means the order effective July 1, 1993, issued
by the United States Office of Management and Budget with respect to the
transfer of certain property related to the GDPs, and any subsequent amendment
of such order.
"Electric Power Agreement" shall have the meaning ascribed to it in
Section 6.1 hereof.
"Environmental Claim" means any claim, action, cause of action,
investigation or notice by any person or entity alleging potential liability
(including potential liability for investigatory costs, cleanup costs,
governmental Response Actions, Corrective Actions, natural resource damages,
property damages, personal injuries, penalties, or fines) arising out of, based
on or resulting from (a) the presence, or release into the environment, of any
Material of Environmental Concern at any location or (b) circumstances forming
the basis of any violation, or alleged violation, of any Environmental Laws.
"Environmental Laws" means all laws, regulations and other
requirements established by any Government Authority relating to pollution or
protection of human health or the environment (including ambient air, surface
water, ground water, land surface or subsurface strata) or regulating the
handling of or exposure to radioactive materials, including the laws and
regulations relating to emissions, discharges, releases or threatened releases
of Material of Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Material of Environmental Concern.
"Environmental and Waste Management Agreement" shall have the
meaning ascribed to it in Section 3.3 hereof.
"Environmentally Non-Sensitive" means any action which does not
materially increase the risk of a violation of Environmental Laws and does not
materially increase the cost of Decontamination and Decommissioning.
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"Environmentally Sensitive" means any action which materially
increases the risk of a violation of Environmental Laws or materially increases
the cost of Decontamination and Decommissioning.
"GDPs" means the gaseous diffusion uranium enrichment plant owned by
the United States of America located at Paducah, Kentucky, and the gaseous
diffusion uranium enrichment plant owned by the United States at Portsmouth,
Ohio, including all the real property within the boundary of both such plants,
or any portion thereof, regardless of whether any such real property is leased
to the Corporation. Any reference in this Lease to a "GDP" shall mean either one
of such gaseous diffusion uranium enrichment plants.
"Government Authority" means any department, agency or
instrumentality of the federal government, of any state, or of any municipality
or of any political subdivision of any state or municipality.
"Initial Rent Period" shall have the meaning ascribed to it in
Section 8.1 hereof.
"Laws and Regulations" means all laws and regulations (including all
Environmental Laws), and other requirements of any Government Authority
(including any standards established by the NRC to protect public health and
safety from radiological hazard and to provide for the common defense and
security) which apply to the Department or the Corporation, as the case may be.
"Lease" means this Lease and all its Exhibits.
"Lease Administration" shall have the meaning ascribed to it in
Section 8.1 hereof.
"Lease Term" means the period of July 1, 1993, to June 30, 1999, and
any subsequent Renewal Periods.
"Leased Personalty" shall have the meaning ascribed to it in Section
3.2 hereof.
"Leased Premises" shall have the meaning ascribed to it in Section
3.1(a) hereof.
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"Material of Environmental Concern" means any material subject to
classification as a hazardous waste under the Solid Waste Disposal Act, as
amended, and any material such as pollutants, contaminants, wastes, toxic
substances, petroleum and refined petroleum products, hazardous substances,
radioactive materials and other like subject matter.
"Regulatory Agency" means any Government Authority which is
empowered to administer or enforce Laws and Regulations.
"Regulatory Oversight Agreement" shall have the meaning ascribed to
it in Section 5.1(b)(i) hereof.
"Regulatory Permits" means all licenses, permits, certificates,
approvals, authorizations and other requirements mandated by Laws and
Regulations for the occupation, use or operation of the Leased Premises.
"Renewal Period" shall have the meaning ascribed to it in Section
7.2 hereof.
"Rent" shall have the meaning ascribed to it in Section 8.1 hereof.
"Rent Period" shall have the meaning ascribed to it in Section 8.1
hereof.
"Response Actions" shall have the meaning given such term in the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended.
"Services Agreement" shall have the meaning ascribed to it in
Section 6.2 hereof.
"Transferred Contracts" means any and all contracts which are
transferred to the Corporation pursuant to the Determination Order.
"Turnover Requirements" shall have the meaning ascribed to it in
Section 4.4 hereof.
"Uranium Enrichment Enterprise" means the GDPs, their uranium
enrichment operations, processes and services, and all of the activities,
businesses and functions related thereto.
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Section 1.2 HEADINGS Article and Section headings in this Lease are
provided only for ease of reference and not interpretation.
Section 1.3 RULES OF INTERPRETATION
(a) The words "without limitation", whether stated or not, are
implied to follow the use of any words such as "including" or "excluding" that
are employed in this Lease. The words "hereof" or "herein" or "hereunder" when
used in this Lease shall mean pertaining to this Lease.
(b) All Exhibits to this Lease shall be incorporated into this
Lease by reference as appropriate and will be deemed to be an integral part of
this Lease. In the event of any inconsistency between an Exhibit and this Lease,
this Lease shall control.
ARTICLE II
AUTHORITY OF THE PARTIES
Section 2.1 CORPORATION The Corporation is authorized under the Act
to enter into this Lease and its Transition Manager has taken all the necessary
actions required of the Corporation to execute and deliver this Lease.
Section 2.2 DEPARTMENT The Department is authorized under the Act to
enter into this Lease and the Secretary has taken all the necessary actions
required of the Department to execute and deliver this Lease.
Section 2.3 CORPORATION BOARD OF DIRECTORS In accordance with
Section 1315 of the Act, the actions of the Transition Manager taken with
respect to this Lease shall be subject to ratification by the Board of Directors
of the Corporation, after a quorum of such Board of Directors has been appointed
by the President of the United States and confirmed by the United States Senate.
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ARTICLE III
GRANT OF LEASE
Section 3.1 LEASE OF REAL PROPERTY
(a) The Department hereby leases to the Corporation that
certain real property and improvements and fixtures located thereon, and
easements, rights of way and appurtenances related thereto of the GDP situated
in Paducah, Kentucky, and of the GDP situated in Portsmouth, Ohio, all of which
is more fully identified and described in the maps and attachments which form
Exhibit A to this Lease ("Leased Premises"). This Lease is subject to all
existing easements, rights of way and appurtenances over, across, in, and upon
the Leased Premises. The Department will not grant any additional easements,
rights of way or appurtenances with respect to the Leased Premises without the
approval of the Corporation, which approval shall not be unreasonably withheld.
(b) The occupation and use of the Leased Premises by the
Corporation shall include the use of all easements, rights of way,
appurtenances, utility lines, corridors, common walls, pipes, parking areas,
service roads, railway lines, loading facilities, sidewalks, avenues of ingress,
egress and access and all other similar items which appertain to the Leased
Premises ("Common Areas").
(c) The Department reserves the right to have access to the
Leased Premises and the Common Areas, and the Corporation shall be entitled to
have access to those parts of a GDP which are not part of the Leased Premises,
subject to notice and the procedures to be agreed upon by the Department and the
Corporation. Notwithstanding anything contained in this subsection (c), the
Department and the Corporation will each have such access as it requires to all
parts of a GDP reasonably necessary to respond to emergencies.
Section 3.2 LEASE OF PERSONAL PROPERTY The Department hereby leases
to the Corporation those certain items of personal property located on the
Leased Premises related to the production of enriched uranium by the GDPs,
including the converters, compressors, motors and
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spares associated thereto and the other items more fully described in Exhibit B
("Leased Personalty").
Section 3.3 DEPARTMENT'S PERSONAL PROPERTY ON THE LEASED PREMISES
(a) The Department's personal property (including any Material
of Environmental Concern) located on the Leased Premises on July 1, 1993, may
remain on the Leased Premises. The Department may not bring on to the Leased
Premises any Material of Environmental Concern (except refined petroleum
products incidental to the operation of vehicles, equipment or machinery)
without the consent of the Corporation and subject to any conditions upon which
the Department and the Corporation may agree; provided, however, that the
Department may store additional personal property which is Material of
Environmental Concern on the Leased Premises after July 1, 1993, pursuant to a
Memorandum of Agreement with respect to environmental matters and waste
management, effective July 1, 1993, between the Department and the Corporation
which is attached as Exhibit C to this Lease, and any amendment thereof
("Environmental and Waste Management Agreement").
(b) The Department shall be solely responsible for the care
and maintenance of the Department's personal property (including Material of
Environmental Concern) located on the Leased Premises, whether located thereon
on July 1, 1993, or brought onto the Leased Premises after July 1, 1993, and the
Corporation shall not be held liable for any Environmental Claim related
thereto, except to the extent such liability arises out of the Corporation's
negligence or wilful misconduct.
(c) The Department will be solely responsible for and shall
pay the cost of removing from the Leased Premises and disposing of all its
personal property located on the Leased Premises and for the Decontamination and
Decommissioning of such personal property.
Section 3.4 OPTION TO EXPAND OR REDUCE LEASEHOLD Subject to the
procedures described in Section 3.5 of this Lease, the Corporation shall have
the option to expand or reduce the scope of this Lease in the following manner:
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(a) The Corporation may amend Exhibit A to include within this
Lease additional real property, improvements and fixtures of the Department
located at a GDP along with its related easements and appurtenances. The
Department will not dispose of any real property of a GDP which is not part of
the Leased Premises without first offering the Corporation the opportunity to
include such real property within this Lease.
(b) The Corporation may amend Exhibit A to delete from this
Lease and return to the Department any of the facilities listed on Exhibit A or
any of the land identified as Leased Premises on the maps in Exhibit A. Such
right shall not include the right of the Corporation to terminate this Lease in
its entirety with respect to both GDPs, or to terminate this Lease partially
with respect to one of the GDPs, which right shall be permitted only in
accordance with Section 9.3 and Section 12.1 of this Lease.
(c) The Corporation may amend Exhibit B to include within this
Lease additional items of personal property related to a GDP whether located at
such GDP, or at another Department site. If such property is located at another
Department site, the Corporation will identify for the Department the relevant
item prior to November 1, 1993, and the Department will place an identification
tag on the item to indicate the Corporation's interest in such item. The
Department will not dispose of or otherwise utilize the identified item without
offering the Corporation the opportunity to include such item within this Lease.
The Department will have no responsibility for maintaining such identified item
and the Corporation shall be responsible for paying the cost of removing and
transporting the desired item to the Leased Premises.
(d) The Corporation may delete from Exhibit B to this Lease
and return to the Department any part of the Leased Personalty. The Corporation
will not be entitled to delete and return individual items of the Leased
Personalty, but may delete from this Lease and return to the Department only
entire categories of the Leased Personalty.
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Section 3.5 OPTION PROCEDURES
(a) If the Corporation seeks to exercise any option described
in Section 3.4 of this Lease the Corporation shall provide sixty (60) days
notice thereof to the Department. The Department will review the request and
upon the Department's consent, which shall not be unreasonably withheld,
Exhibits A and B, as the case may be, will be amended to reflect the change.
(b) If any item of property is returned to the Department
pursuant to subsections (b) or (d) of Section 3.4 of this Lease, such property
will be returned to the Department in the condition in which such property is
found on the date returned. The Corporation will have no obligation to place the
property in any better condition. Prior to returning any of the Leased Premises
to the Department, the Corporation will comply with the Turnover Requirements.
Section 3.6 QUIET ENJOYMENT The Department warrants that the
Corporation will have full possession, use and quiet enjoyment of the Leased
Premises and Leased Personalty throughout the Lease Term. The Department will
defend, at any time, at its expense, against any person or entity, the right of
the Corporation to such full possession, use and quiet enjoyment.
Section 3.7 DEPARTMENT OPTION The Department shall have the right to
request the return to the Department of up to ten (10) acres of the Leased
Premises at each GDP. The Corporation will not withhold its consent to such a
request if the real property being returned is not required for the
Corporation's planned business use. If any such real property is returned to the
Department, it shall be returned to the Department in the condition in which it
is found on that date. The Corporation shall have no obligation to put such real
property in any better condition and will have no obligation to comply with the
Turnover Requirements. Upon the return to the Department of any real property
pursuant to this Section, Exhibit A will be amended to reflect the change.
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ARTICLE IV
LEASED PREMISES
AND LEASED PERSONALTY
Section 4.1 USE OF LEASED PREMISES AND LEASED PERSONALTY The
Corporation will use the Leased Premises and the Leased Personalty for the
purpose of producing enriched uranium and for such other purposes as may be
authorized by the Act. The Corporation may engage in a use of the Leased
Premises or Leased Personalty at a GDP which is not for the purpose of producing
enriched uranium if the Department consents to such use, which consent shall not
be withheld if the use proposed by the Corporation is Environmentally
Non-Sensitive and does not significantly interfere with the Department's
activities at such GDP.
Section 4.2 PHYSICAL CONDITION OF LEASED PREMISES AND LEASED
PERSONALTY
(a) The physical condition of the Leased Premises and the
physical condition of the Leased Personalty is as the Leased Premises and Leased
Personalty are found on July 1, 1993. The foregoing description of the physical
condition of the Leased Premises and Leased Personalty shall not limit the
indemnification and reimbursement of the Corporation provided by the Department
in Article V of this Lease.
(b) The Corporation acknowledges that the Leased Premises and
the Leased Personalty are in good and serviceable condition for use by the
Corporation to produce enriched uranium.
(c) The Corporation will, at its expense, throughout the Lease
Term, maintain the Leased Premises in good and serviceable condition. The
Corporation shall repair any of the Leased Premises when in the Corporation's
business judgment it is necessary to do so in order to maintain them in such
condition or to meet the requirements of applicable Laws and Regulations. This
obligation of the Corporation shall not affect the Corporation's right to return
the Leased Premises and the Leased Personalty to the Department in the condition
in which such Leased Premises and Leased Personalty are found on the day they
are returned to the Department pursuant to other provisions of this Lease.
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Section 4.3 RETURN OF LEASED PREMISES AND LEASED PERSONALTY
(a) At the end of the Lease Term, the Corporation will return
the Leased Premises and Leased Personalty to the Department in the condition in
which the Leased Premises and Leased Personalty are found on that date. The
Corporation will have no obligation to place the Leased Premises and Leased
Personalty in any better condition. Prior to returning the Leased Premises and
Leased Personalty to the Department, the Corporation will comply with the
Turnover Requirements.
(b) At the end of the Lease Term, the Corporation may remove
any of its personal property from the Leased Premises. The Corporation shall be
entitled, should it choose, to leave any of its personal property (including
personal property contaminated by radioactive materials) on the Leased Premises
at the end of the Lease Term for Decontamination and Decommissioning by the
Department.
Section 4.4 TURNOVER REQUIREMENTS At the end of the Lease Term or at
any time the Corporation exercises its option in Section 3.4(b) hereof or
terminates this Lease pursuant to Section 12.1 hereof, or terminates this Lease
pursuant to Section 9.3 hereof (except that in the case of termination under
such Section 9.3, only with respect to facilities which are not destroyed), the
Corporation shall, prior to returning to the Department any facility which
constitutes the Leased Premises, take the following actions with respect to such
facility (collectively such actions being referred to as the "Turnover
Requirements"):
(a) Provide the Department with documentation of its plans to
place such facility into an acceptable condition for return to the Department
consistent with the requirements described in subsections (b) through (f) of
this Section.
(b) Terminate facility operations. Complete and document the
final deactivation/shutdown of the facility and document that no future use of
the facility is planned. Remove solid deposits of UO2F2/UF4 to the extent
necessary to prevent criticality, using an in-place removal process, such as the
chemical fluorination
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treatment; and ensure that nothing adversely affects the operability of the
purge cascade, the coolant, drainage, storage systems, HV/AC systems and air
filtration systems.
(c) Remove all waste generated by the Corporation in such
facility (including any material that is subject to classification as a
hazardous waste under the Solid Waste Disposal Act, as amended) and which is
subject to and authorized by Laws and Regulations for offsite disposal. The
Corporation will remain responsible for the ultimate treatment and disposal of
any waste generated by the Corporation, and for which the Department is not
responsible, except as may be otherwise provided in this Lease.
(d) For structures at the facility, provide the Department
with the Corporation's available radiological/hazardous materials records,
available documentation of the configuration of the facility and related
systems, available drawings, specifications, procedures, manuals, and available
unplanned occurrences records applicable to the facility. For soil, surface
water, and groundwater conditions at the facility, provide the Department with
the Corporation's available data and reports that describe those conditions and
the nature and extent of contamination therein.
(e) Place structures to be returned at the facility in a safe
secure condition, removing any immediate threats to human health and safety.
Existing radiation monitoring systems shall be in a physical condition adequate
to monitor the potential release of any radioactive contamination. The most
current radiation contamination/hazardous and toxic material survey done by the
Corporation for the facility and surrounding areas shall be provided to the
Department.
(f) Provide to the Department a status report of the
facility's compliance with environmental, health, and safety regulatory
requirements. If the facility is in noncompliance, a strategy for achieving
compliance will be developed by the Corporation and provided to the Department.
Section 4.5 PERMISSIBLE CHANGES
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(a) The Corporation will not demolish or destroy any of the
real property which constitutes Leased Premises at a GDP without first proposing
such course of action to the Department and obtaining the Department's consent.
Such proposal shall contain all the necessary information which the Department
may require. Failure of the Department to respond within seven (7) days of
receipt of the Corporation's proposal shall be deemed consent by the Department
to the proposal. The Department will not withhold its consent to such a proposal
if the demolition or destruction is Environmentally NonSensitive and does not
significantly interfere with the Department's activities at such GDP. If the
proposed demolition or destruction is Environmentally Sensitive and does not
significantly interfere with the Department's activities, the Corporation will
be permitted to carry out the action; provided, however, that the Corporation
will be solely responsible for and will pay all the costs related thereto except
that the Department shall be solely responsible for and will pay the cost of
transporting, storing and disposing of all the material resulting from such
demolition or destruction. The Department will attempt in good faith to store
and dispose of all such material at locations other than on the Leased Premises.
Any action taken pursuant to this Section by the Department or the Corporation
shall be done in accordance with all applicable Laws and Regulations.
(b) The Corporation may, at any time, at its expense, make a
Capital Improvement which the Corporation, in its business judgment deems
appropriate. The Corporation shall provide the Department with sixty (60) days
notice of any proposed Capital Improvement. If the Capital Improvement proposed
to be made on the Leased Premises of a GDP requires the expenditure of less than
$250,000, the Corporation will not be required to secure the Department's
approval to undertake such Capital Improvement. If the Capital Improvement
requires the expenditure of more than such amount, the making of such Capital
Improvement shall require the consent of the Department; provided, however, that
the Corporation shall be entitled to commence making such Capital Improvement,
and consent by the Department will be deemed provided, unless the Department
notifies the Corporation within the aforementioned sixty (60) days that the
making of such proposed Capital Improvement is Environmentally Sensitive
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or notifies the Corporation that such proposed Capital Improvement significantly
interferes with the Department's activities at the GDP. If the making of the
proposed Capital Improvement is Environmentally Sensitive and does not
significantly interfere with the Department's activities, the Corporation will
be permitted nonetheless to undertake the work; provided, however, that the
Department shall be solely responsible for and will pay the cost of
transporting, storing and disposing of any material resulting from such Capital
Improvement. Any action taken by the Department or the Corporation pursuant to
this Section shall be done in accordance with all applicable Laws and
Regulations.
(c) The Corporation shall become the owner of and shall take
title to each and every Capital Improvement. The Corporation will have the right
to remove any Capital Improvement; provided, however, that if such removal
increases the costs of the Department for the Decontamination and
Decommissioning of the Leased Premises to which any such Capital Improvement was
attached, the Corporation will pay any such increase in Decontamination and
Decommissioning costs. The Corporation and the Department shall agree on the
amount of such Decontamination and Decommissioning costs, if any exist, and the
time and method of their payment when such Capital Improvement is removed. Title
to any Capital Improvement which is not removed by the Corporation shall
transfer to the Department at the end of the Lease Term, without the need for
the Corporation to take any further action, whether under this Lease or
otherwise.
Section 4.6 DECONTAMINATION AND DECOMMISSIONING Except as provided
in Section 4.5(c) of this Lease, the Department will be responsible for and will
pay the costs of all Decontamination and Decommissioning, including the costs of
Decontamination and Decommissioning of the Leased Premises, the Leased
Personalty, any personal property found on the Leased Premises, regardless of
ownership, and any Capital Improvement. The Department may initiate action for
the Decontamination and Decommissioning of property any time property of any
kind is returned to the Department by the Corporation pursuant to a provision of
this Lease.
Section 4.7 PERMITS The Secretary will assign and transfer to the
Corporation as permitted by applica-
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ble Laws and Regulations, at the Corporation's request, those Regulatory Permits
held by the Department with respect to the operation of the Leased Premises,
including any Regulatory Permits relating to transportation. The Department will
use its best efforts to assist the Corporation before any Regulatory Agency in
order to effect such transfer. The Corporation will secure, at its expense, all
other Regulatory Permits it may require to operate the Leased Premises. The
Department will use its best efforts to assist the Corporation in procuring such
other Regulatory Permits it requires from any Regulatory Agency.
ARTICLE V
ALLOCATION OF LIABILITIES
Section 5.1 In satisfaction of the Department's obligations under
Section 1403(d) and Section 1406 of the Act, the Department shall:
(a) provide the Corporation $35 million in complete
satisfaction of all the Department's obligations for any and all modifications
to the Leased Premises and the Leased Personalty and other expenses that may be
or become necessary for compliance with OSHA standards in effect on and after
July 1, 1993;
(b) reimburse the Corporation for:
(i) any work required to bring the Leased Premises and Leased
Personalty into compliance with the Nuclear Safety and Safeguards and
Security Requirements as such term is defined in the Memorandum of
Agreement effective July 1, 1993, between the Department and the
Corporation with respect to nuclear safety, safeguards and security
("Regulatory Oversight Agreement") which is attached as Exhibit D, and any
amendment thereof, or to achieve any other safety improvements required or
directed by the Department; and
(ii) any work required to obtain an initial certificate of
compliance from the NRC or NRC approval of a Department plan for achieving
compliance pursuant to Section 1701
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of the Act, except to the extent such work is required by conditions
attributable to the Corporation's operation of the Leased Premises.
(c) indemnify, reimburse, defend, and hold harmless the
Corporation for, and against all costs and expenses related to claims, damages,
injunctions, orders, judgments, penalties, and reasonable attorney's fees
asserted against or incurred by the Corporation which are attributable to or
arising out of the ownership or operation of the Uranium Enrichment Enterprise
by the Department (or any contractor, subcontractor, or employee thereof) for:
(i) any pollution, contamination, or threat to human health or
the environment attributable to the operation of the Uranium Enrichment
Enterprise by the Department, in whole or in part, prior to July 1, 1993,
regardless of when the event or condition giving rise to liability is
discovered by the Corporation;
(ii) any Environmental Claim against any person or entity
whose liability for such Environmental Claim the Department has or may
have assumed or retained either contractually or by operation of law;
(iii) the Corporation's status as a permittee, holder,
signatory, owner, operator, assign, or successor in relation to any
permit, agreement, consent order, or other authorization issued by or
reached with any Government Authority, or any administrative or judicial
order, decree, or judgment, under authority of or to enforce any
Environmental Laws, whereby and to the extent the Corporation is held
responsible or liable in any manner for the Department's operation of the
Uranium Enrichment Enterprise prior to July 1, 1993 (or any act or failure
to act by the Department in transporting, storing, or disposing of any
material pursuant to Section 4.5);
(iv) the release, discharge, removal, disposal, change out, or
replacement of
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polychlorinated biphenyls, transuranics, chromates, trichloroethylene,
asbestos, or pentachlorophenol existing or present in the GDPs, or any
portion thereof, regardless of whether such portion is leased and
regardless of the time at which such existence or presence becomes known
to the Corporation, except as provided in Section 4.5; provided, however,
this subsection shall not apply to the extent any such material has been
introduced to the Leased Premises by the Corporation. The Department's
responsibility under this subsection (iv) shall be governed by the Laws
and Regulations in effect at the time the cost or liability for the
release, discharge, removal, disposal, change out or replacement, is
incurred by or imposed on the Corporation;
(v) employee pension, welfare and other benefits or
liabilities either incurred or accrued prior to July 1, 1993 (whether or
not a claim for such benefits or liabilities is asserted before July 1,
1993) under the Transferred Contracts to the extent the Department agreed
under such Transferred Contracts to reimburse the contractor for the
contractor's employee benefits or liabilities; and
(vi) costs or expenses attributable to or arising out of
actions taken or not taken under or pursuant to the Transferred Contracts
prior to July 1, 1993, whether based on contract, tort or otherwise, and
regardless of whether known or not known by the Corporation to exist on
July 1, 1993.
Section 5.2 The Department agrees to indemnify, reimburse, defend,
and hold harmless the Corporation for, and against all costs and expenses
related to claims, damages, injunctions, orders, judgments, penalties, and
reasonable attorney's fees asserted against or incurred by the Corporation which
are attributable to or arising out of the Department's operation, occupation or
use of the GDPs, or any portion thereof, after July 1, 1993.
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Section 5.3 The Corporation agrees to indemnify, reimburse, defend,
and hold harmless the Department for, and against all costs and expenses related
to claims, damages, injunctions, orders, judgments, penalties, and reasonable
attorney's fees asserted against or incurred by the Department which are
attributable to or arising out of the operation of the GDPs by the Corporation
after July 1, 1993.
Section 5.4 Promptly after receipt by a party entitled to
indemnification pursuant to this Article V of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Article V notify the indemnifying
party in writing of the commencement thereof. The indemnifying party shall pay
all the costs of such litigation, including the related attorney's fees incurred
by the indemnified party. The indemnifying party shall be entitled to
participate in, and assume, at its own expense, the defense of such litigation.
ARTICLE VI
SUPPORT
Section 6.1 ELECTRIC POWER AGREEMENT The Department will provide
electric power to the Leased Premises in accordance with the Memorandum of
Agreement effective July 1, 1993, between the Department and the Corporation
which is attached as Exhibit E to this Lease and any amendment thereof
("Electric Power Agreement").
Section 6.2 SERVICES AGREEMENT The Department and the Corporation
will provide services to each other in connection with their use of the GDPs in
the manner described in the Memorandum of Agreement effective July 1, 1993,
between the Department and the Corporation and which is attached as Exhibit F
and any amendment thereof ("Services Agreement").
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ARTICLE VII
TERM
Section 7.1 INITIAL TERM This Lease will commence on July 1, 1993,
and expire on June 30, 1999, unless renewed pursuant to Section 7.2 of this
Lease by the Corporation.
Section 7.2 LEASE RENEWAL The Corporation has the exclusive option
under Section 1403 of the Act to renew this Lease with respect to either GDP or
both GDPs on the same terms and conditions as are contained herein and shall
have the right to do so for successive periods beginning on and following July
1, 1999, each period of which may be, at the Corporation's option, for one (1)
to six (6) years in length (any such successive period referred to as a "Renewal
Period"). If the Corporation chooses to exercise its right to renew this Lease
with respect to a GDP, the Corporation will provide the Secretary with notice
thereof by July 1, 1997. If the Corporation chooses to exercise its right to
renew this Lease with respect to a GDP at the expiration of any Renewal Period,
the Corporation will provide the Secretary with notice thereof at least two (2)
years prior to the expiration of such Renewal Period.
ARTICLE VIII
RENT
Section 8.1 LEASE PAYMENT
(a) For the cost of administering this Lease (including the Electric
Power Agreement) and providing regulatory oversight of the GDPs pursuant to the
Regulatory Oversight Agreement (all such administration referred to as "Lease
Administration"), the Corporation will pay the Department, commencing on July 1,
1993, for each twelve (12) month period of July 1 to June 30 thereafter, until
the end of the Lease Term (each such twelve (12) month period of July 1 to June
30 being a "Rent Period" and the period of July 1, 1993 to June 30, 1994 being
the "Initial Rent Period") the sum of $5,195,000, which sum shall be composed of
a base rent of $980,000 ("Base Rent") representing the Department's costs in
administering this Lease (including the Electric Power Agreement) in the Initial
Rent Period and additional rent
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of $4,215,000 ("Additional Rent") representing the Department's costs in
providing regulatory oversight of the GDPs pursuant to the Regulatory Oversight
Agreement in the Initial Rent Period (The Base Rent and the Additional Rent
together being referred to as "Rent"). The Base Rent and the Additional Rent
shall be increased or decreased during any Rent Period, as the case may be, by
the Department to reflect its actual costs incurred in Lease Administration;
provided however that the Corporation shall not be required for any Rent Period
to pay the Department more than the Department's actual costs for such Rent
Period; and provided further that the Department shall not increase the Base
Rent to more than $1.5 million in any Rent Period without the consent of the
Corporation, which consent shall not be unreasonably withheld. The Additional
Rent shall be included as a component of the Rent, and be payable by the
Corporation, only for as long as the Regulatory Oversight Agreement is in
effect.
(b) Rent will be payable monthly in advance on the first day of the
month. By June 1 of each year the Department will submit an invoice to the
Corporation for its estimated costs of Lease Administration during the following
Rent Period. The Department shall determine the actual cost of Lease
Administration following the end of such Rental Period and issue an invoice by
August 1 of each year which shall reconcile any difference between the estimated
and actual costs of Lease Administration in such Rental Period. Such invoice
shall provide enough detail for the Corporation to calculate the difference
between its monthly payments to the Department and the Department's actual costs
in Lease Administration. The Department will grant the Corporation and its
accountants such access to the Department's books and records respecting Lease
Administration as the Corporation may reasonably require to verify the
Department's actual costs associated thereto.
(c) By September 1 of each year, the Corporation shall pay the
Department or the Department shall credit the Corporation an appropriate amount
which shall reconcile any difference between the amount of Rent paid by the
Corporation in the previous Rent Period and the actual costs incurred during the
previous Rent Period by the Department for Lease Administration.
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(d) Rent payments by the Corporation shall be made to the Department
by wire transfer to the Department's headquarters account No. 89-00-0001 at the
United States Department of Treasury. In the event any Rent payments are more
than ten (10) days late, the Corporation will, in addition to such Rent, pay
interest on the amount of Rent which is due and owing on that date at the rate
per annum equal to the prevailing prime rate of interest set by the Federal
Reserve for such day divided by the number of days in the year and for each day
thereafter at such rate until the Rent is paid.
Section 8.2 RENT DURING RENEWAL PERIODS The Rent payable by the
Corporation pursuant to Section 8.1 of this Lease shall be determined in
accordance with Section 8.1 hereof during any Renewal Period.
ARTICLE IX
INSURANCE AND DAMAGE
Section 9.1 CORPORATION INSURANCE Except for any insurance which the
Corporation is required to purchase pursuant to Section 10.1 hereof, the
Corporation will not be required to purchase insurance coverage for the Leased
Premises or Leased Personalty.
Section 9.2 PARTIAL CASUALTY TO THE LEASED PREMISES In the event a
part of the Leased Premises are significantly damaged as a result of any
foreseen or unforeseen cause or event, whether such cause or event results from
action by the Department or by the Corporation or by any other person or entity,
regardless of fault and whether insured against or not, then notwithstanding any
requirement in Section 4.2(c) in this Lease to maintain such property in good
and serviceable condition, the Corporation will have the option, but will not be
required, to repair such casualty if, in the Corporation's business judgment,
the economic value of repairing such casualty outweighs the cost of the
necessary repairs. If the Corporation chooses not to repair such casualty, the
Department may, at its expense, repair the casualty; provided, however, that if
insurance proceeds are available to the Corporation to pay the cost of repairing
such casualty, the Department shall be entitled to use such insurance proceeds
for such repair.
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Section 9.3 TOTAL DESTRUCTION OF LEASED PREMISES In the event the
Leased Premises pertaining to one of the GDPs are damaged as a result of any
foreseen or unforeseen cause or event, whether such cause or event results from
action by the Department or by the Corporation or by any other person or entity,
regardless of fault and whether insured against or not, to such an extent that,
in the business judgment of the Corporation, the damage makes such Leased
Premises of the GDP completely unusable by the Corporation, then notwithstanding
the requirement in Section 4.2(c) of this Lease to maintain such property in
good and serviceable condition, the Corporation will have the option, upon
thirty (30) days notice to the Department, to terminate this Lease with respect
to such GDP without the need to take any further action under this Lease or
otherwise. Upon such termination the Corporation will return the Leased Premises
and Leased Personalty with respect to that GDP to the Department in the
condition in which such Leased Premises and Leased Personalty are found on that
date. The Corporation will have no obligation to place such Leased Premises and
Leased Personalty in any better condition. The Corporation will have an
obligation to comply with the Turnover Requirements, but only with respect to
facilities which are not destroyed. In the event a termination of this Lease
with respect to the Leased Premises of a GDP occurs pursuant to this Section,
the Department shall be entitled to any insurance proceeds, if any are available
to the Corporation for such casualty, and the Corporation will have the
additional obligation, after the termination of this Lease, as a result of such
a casualty, to provide funds to the Department to place and maintain the former
Leased Premises and Leased Personalty of such GDP in a safe condition with all
necessary site surveillance and security until the earlier of either (i) two (2)
years following the date of termination under this Section or (ii) when the
Department is able to secure the necessary funding for site surveillance and
security. The Department will use its best efforts to secure such funding. In
the event a termination of this Lease occurs pursuant to this Section with
respect to a GDP, Exhibit A and Exhibit B will be amended accordingly to reflect
the change.
Section 9.4 PARTIAL CASUALTY TO LEASED PERSONALTY In the event
Leased Personalty is significantly damaged as a result of any foreseen or
unforeseen cause
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or event, whether such cause or event results from action by the Department or
the Corporation or by any other person or entity, regardless of fault and
whether insured against or not, then notwithstanding the requirement in Section
4.2(c) of this Lease to maintain such property in good and serviceable
condition, the Corporation shall have the option, but will not be required, to
repair the casualty if in the Corporation's business judgment the economic value
of repairing such damage outweighs the cost of the necessary repairs. If the
Corporation chooses not to repair such casualty, the Department may, at its
expense, repair the casualty; provided, however, that if insurance proceeds are
available to the Corporation to pay the cost of repairing such casualty, the
Department shall be entitled to use such insurance proceeds for such repair.
Section 9.5 TOTAL LOSS OF LEASED PERSONALTY In the event an item of
Leased Personalty is lost or destroyed as a result of any foreseen or unforeseen
cause or event, whether such cause or event results from action by the
Department or the Corporation or by any other person or entity, regardless of
fault and whether insured against or not, then notwithstanding any requirement
in Section 4.2(c) of this Lease to maintain such property in good and
serviceable condition, the Corporation shall have the option, but will not be
required, to replace the item of Leased Personalty which has been lost or
destroyed. If the Corporation chooses not to replace an item of Leased
Personalty which has become lost or destroyed, the Department may, at its
expense, replace such Leased Personalty; provided, however, that if insurance
proceeds are available to the Corporation to pay the cost of replacing such
Leased Personalty, the Department shall be entitled to use such insurance
proceeds for such replacement. In the event Leased Personalty is lost or
completely destroyed and not replaced, Exhibit B to this Lease will be amended,
if necessary, to reflect the change.
Section 9.6 RELATIONSHIP TO INDEMNIFICATION Nothing contained in
this Article IX shall affect the rights of either the Department or the
Corporation to indemnification or reimbursement under Article V of this Lease.
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ARTICLE X
XXXXX-XXXXXXXX INDEMNIFICATION
Section 10.1 XXXXX-XXXXXXXX NUCLEAR HAZARDS INDEMNIFICATION BY THE
DEPARTMENT
(a) AUTHORITY. This clause is incorporated into this lease
pursuant to the authority contained in subsection 170d. of the Act.
(b) DEFINITIONS. The definitions set out in the Act shall
apply to this clause.
(c) FINANCIAL PROTECTION. Except as hereafter permitted or
required in writing by the Department, the Corporation will not be required to
provide or maintain, and will not provide or maintain at Government expense, any
form of financial protection to cover public liability, as described in
paragraph (d)(2) below. The Department may, however, at any time require in
writing that the Corporation provide and maintain financial protection of such a
type and in such amount as the Department shall determine to be appropriate to
cover such public liability, provided that the costs of such financial
protection are reimbursed to the Corporation by the Department.
(d) INDEMNIFICATION. (1) To the extent that the Corporation
and other persons indemnified are not compensated by any financial protection
permitted or required by the Department, the Department will indemnify the
Corporation and other persons indemnified against (i) claims for public
liability as described in subparagraph (d)(2) of this clause; and (ii) such
legal costs of the Corporation and other persons indemnified as are approved by
the Department, provided that the Department's liability, including such legal
costs, shall not exceed the amount set forth in section 170e.(1)(B) of the Act
in the aggregate for each nuclear incident or precautionary evacuation occurring
within the United States or $100 million in the aggregate for each nuclear
incident occurring outside the United States, irrespective of the number of
persons indemnified in connection with this Lease.
(2) The public liability referred to in
subparagraph (d)(1) of this clause is public
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liability as defined in the Act which (i) arises out of or in connection with
the activities under this Lease, including transportation; and (ii) arises out
of or results from a nuclear incident or precautionary evacuation, as those
terms are defined in the Act.
(e) WAIVER OF DEFENSES. (1) In the event of a nuclear
incident, as defined in the Act, arising out of nuclear waste activities, as
defined in the Act, the Corporation, on behalf of itself and other persons
indemnified, agrees to waive any issue or defense as to charitable or
governmental immunity.
(2) In the event of an extraordinary nuclear
occurrence which:
(i) Arises out of, results from or occurs in the course of the
construction, possession or operation of a production or utilization
facility; or
(ii) arises out of, results from, or occurs in the course of
transportation of source material, by-product material, or special nuclear
material to or from a production or utilization facility; or
(iii) arises out of or results from the possession, operation,
or use by the Corporation or a subcontractor of a device utilizing special
nuclear material or by-product material, during the course of the Lease
activity; or
(iv) arises out of, results from, or occurs in the course of
nuclear waste activities, the Corporation, on behalf of itself and other
persons indemnified, agrees to waive:
(A) Any issue or defense as to the conduct
of the claimant (including the conduct of persons through whom the
claimant derives its cause of action) or the fault of persons
idemnified, including, but not limited to:
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1. Negligence;
2. Contributory negligence;
3. Assumption of risk; or
4. Unforeseen intervening causes, whether
involving the conduct of a third person or
an act of God;
(B) Any issue or defense as to charitable
or governmental immunity; and
(C) Any issue or defense based on any
statute of limitations, if suit is instituted within 3 years from
the date on which the claimant first knew, or reasonably could have
known, of his injury or change and the cause thereof. The waiver of
any such issue or defense shall be effective regardless of whether
such issue or defense may otherwise be deemed jurisdictional or
relating to an element in the cause of action. The waiver shall be
judicially enforceable in accordance with its terms by the claimant
against the person indemnified.
(v) The term extraordinary nuclear occurrence means an event
which the Department has determined to be an extraordinary nuclear
occurrence as defined in the Act. A determination of whether or not there
has been an extraordinary nuclear occurrence will be made in accordance
with the procedures in 10 CFR part 840.
(vi) For the purposes of that determination, "offsite" as that
term is used in 10 CFR part 840 means away from "the contract location"
which phrase means any Department facility, installation, or site at which
activity under this Lease is being carried on, and any Corporation-owned
or controlled facility, installation, or site at which the Corporation is
engaged in the performance of activity under this Lease.
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(3) The waivers set forth above:
(i) Shall be effective regardless of whether such issue or
defense may otherwise be deemed jurisdictional or relating to an element
in the cause of action;
(ii) Shall be judicially enforceable in accordance with its
terms by the claimant against the person indemnified;
(iii) Shall not preclude a defense based upon a failure to
take reasonable steps to mitigate damages;
(iv) Shall not apply to injury or damage to a claimant or to a
claimant's property which is intentionally sustained by the claimant or
which results from a nuclear incident intentionally and wrongfully caused
by the claimant;
(v) Shall not apply to injury to a claimant who is employed at
the site of and in connection with the activity where the nuclear incident
or extraordinary nuclear occurrence takes place, if benefits therefor are
either payable or required to be provided under any workmen's compensation
or occupation disease law;
(vi) Shall not apply to any claim resulting from a nuclear
incident occurring outside the United States;
(vii) Shall be effective only with respect to those
obligations set forth in this section and in insurance policies, contracts
or other proof of financial protection; and
(viii) Shall not apply to, or prejudice the prosecution or
defense of, any claim or portion of claim which is not within the
protection afforded under (A) the limit of liability provisions under
subsection 170e. of
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the Act, or (B) the terms of this agreement and the terms of insurance
policies, contracts, or other proof of financial protection.
(f) NOTIFICATION AND LITIGATION OF CLAIMS. The Corporation
shall give immediate written notice to the Department of any known action or
claim filed or made against the Corporation or other person indemnified for
public liability as defined in paragraph (d)(2). Except as otherwise directed by
the Department, the Corporation shall furnish promptly to the Department, copies
of all pertinent papers received by the Corporation or filed with respect to
such actions or claims. The Department shall have the right to, and may
collaborate with, the Corporation and any other person indemnified in the
settlement or defense of any action or claim and shall have the right to (1)
require the prior approval of the Department for the payment of any claim that
the Department may be required to indemnify hereunder; and (2) appear through
the Attorney General on behalf of the Corporation or other person indemnified in
any action brought upon any claim that the Department may be required to
indemnify hereunder, take charge of such action, and settle or defend any such
action. If the settlement or defense of any such action or claim is undertaken
by the Department, the Corporation or other person indemnified shall furnish all
reasonable assistance in effecting a settlement or asserting a defense.
(g) CONTINUITY OF THE DEPARTMENT'S OBLIGATIONS. The
obligations of the Department under this clause shall not be affected by any
failure on the part of the Corporation to fulfill its obligation under this
Lease and shall be unaffected by the death, disability, or termination of the
existence of the Corporation, or by the completion, termination or expiration of
this Lease.
(h) EFFECT OF OTHER CLAUSES. The provisions of this clause
shall not be limited in any way by, and shall be interpreted without reference
to, any other clause of this Lease provided, however, that this clause shall be
subject to any provisions that are later added to this Lease as required by
applicable Federal law, including statutes, executive orders and regulations, to
be included in Nuclear Hazards Indemnity Agreements.
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(i) INCLUSION IN CONTRACTS. The Corporation shall insert this
clause in any contract for the management, operation, design, repair,
maintenance, or modification of the GDP which may involve the risk of public
liability, as that term is defined in the Act and further described in paragraph
(d)(2) above. However, this clause shall not be included in contracts in which
the person or entity under contract with the Corporation is subject to NRC
financial protection requirements under section 170b. of the Act or NRC
agreements of indemnification under section 170c. or k. of the Act for the
activities under the contract.
(j) RELATIONSHIP TO GENERAL INDEMNITY. To the extent that the
Corporation is compensated by any financial protection, or is indemnified
pursuant to this clause, or is effectively relieved of public liability by an
order or orders limiting same, pursuant to 170e of the Act, the provisions of
Article V of this Lease with respect to indemnification of the Corporation shall
not apply, but only to such extent.
ARTICLE XI
REPRESENTATIVES
Section 11.1 SITE REPRESENTATIVES
(a) The Department appoints its Site Manager at each of the
GDPs as its representative ("Department Site Manager") with authority to act on
behalf of the Department with respect to such GDP in connection with matters
related to this Lease other than modifications of this Lease pursuant to Article
XIII hereof. The Department may designate a different Department Site Manager at
any time. Within thirty (30) days thereafter, the Department shall provide
notice thereof to the Corporation.
(b) The Corporation shall appoint a person at each of the GDPs
as its representative ("Corporation Site Manager") with authority to act on
behalf of the Corporation with respect to such GDP in connection with matters
related to this Lease other than modifications of this Lease pursuant to Article
XIII hereof. The Corporation may designate a different Corporation Site Manager
at any time. Within thirty (30) days thereafter,
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the Corporation shall provide notice thereof to the Department.
ARTICLE XII
TERMINATION
Section 12.1 TERMINATION FOR CONVENIENCE The Corporation shall have
the right to terminate this Lease, either in its entirety or with respect to one
of the GDPs, at its convenience, at any time during the Lease Term (including
during any Renewal Period), upon two years notice to the Department, without the
need to take any further action under this Lease or otherwise, if in the
Corporation's business judgment, such termination is economically necessary.
Upon such termination for convenience, the Corporation will return such Leased
Premises and Leased Personalty affected by such termination to the Department in
the condition in which such Leased Premises and Leased Personalty are found on
that date. The Corporation will have no obligation to place such Leased Premises
and Leased Personalty in any better condition. Prior to returning such Leased
Premises and Leased Personalty to the Department, the Corporation will comply
with the Turnover Requirements. In the event this Lease is terminated pursuant
to this Section with respect to only one of the GDPs, then Exhibits A and B will
be amended accordingly to reflect the change.
ARTICLE XIII
MODIFICATIONS AND PRIVATIZATION
Section 13.1 LEASE AMENDMENTS Except for the changes made pursuant
to Section 3.4, Section 3.7, Section 9.3, Section 9.5, Section 11.1, Section
12.1, Section 13.2 and Section 15.2 hereof and Appendixes A and B of the
Regulatory Oversight Agreement, no change, amendment or modification of this
Lease shall be valid or binding unless such change, amendment or modification is
described in a writing and is duly executed and consented to by the Secretary
and by the Board of Directors of the Corporation, or by any person authorized by
them to provide such consent.
Section 13.2 LEASE MODIFICATIONS FOR PRIVATIZATION
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(a) In the event, a resolution is adopted by the Board of
Directors of the Corporation to privatize the Corporation pursuant to the
provisions of Section 1502 of the Act, and the President of the United States
approves the privatization plan described in Section 1501 of the Act, and the
Congress of the United States has been notified of the Corporation's intent to
implement such privatization plan in accordance with the Act, this Lease, and
any memorandum of agreement between the Department and the Corporation related
thereto, will be changed, amended or modified in furtherance of such
privatization plan and the mandate which the Act provides for the privatization
of the Corporation. The Board of Directors of the Corporation will notify the
Secretary promptly after adopting a resolution to privatize the Corporation.
(b) In the event the Corporation is privatized pursuant to
Section 1502 of the Act, and all of the duties and obligations of the
Corporation are assumed by a private corporation pursuant to such privatization,
this Lease and each and every one of its rights and benefits shall survive such
privatization and be transferred to such private corporation without the need
for the Department or the Corporation to take any further action under this
Lease or otherwise. In such event, the name of such private corporation shall be
substituted for that of the Corporation in this Lease. In addition, the
Department and the Corporation shall take whatever further action is required to
transfer to such private corporation any memorandum of agreement or other
agreements, instruments or documents related to this Lease and entered into by
the Department and the Corporation on or after the date hereof which cannot be
transferred to such private corporation by the operation of their terms.
ARTICLE XIV
ASSIGNMENTS AND SUBLEASES
Section 14.1 NO ASSIGNMENT; SUBSTITUTION OF DEPARTMENT The
Department shall not have the right to assign this Lease and any such assignment
shall be void. The Department may be substituted under this Lease only by a
successor agency or department or instrumentality of
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the United States which assumes all of the duties and obligations of the
Department under this Lease.
Section 14.2 NO ASSIGNMENT; SUBSTITUTION OF CORPORATION The
Corporation shall not have the right to assign this Lease and any such
assignment shall be void. The Corporation may be substituted under this Lease
only by a successor in interest which assumes all of the duties and obligations
of the Corporation under this Lease.
Section 14.3 SUBLEASES
(a) The Corporation may sublease any part or all of the Lease
Premises or the Leased Personalty to any person or entity, whether affiliated
with the Corporation or otherwise if the Corporation receives the consent of the
Department to such a sublease. The Department shall not unreasonably withhold
its consent to any such sublease.
(b) The Corporation shall have the right to operate the Leased
Premises of either GDP under this Lease or to engage an operator for such Leased
Premises. No contract for the operation of such Leased Premises shall be deemed
a sublease.
ARTICLE XV
MISCELLANEOUS
Section 15.1 ENTIRE LEASE This Lease contains the entire
understanding of the Department and the Corporation with respect to its subject
matter. This Lease reflects all agreements and commitments made prior to the
date hereof with respect to this Lease by the Department and the Corporation.
There are no other oral or written understandings, terms or conditions and
neither the Department nor the Corporation has relied upon any representation or
statement, express or implied, which is not contained in this Lease.
Section 15.2 NOTICES In order to be effective, any notice, demand,
offer, response, request or other communication made with respect to this Lease
by either the Department or the Corporation must be in writing and signed by the
one initiating the communi-
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cation and must be hand-delivered or sent by registered letter, telefax or by a
recognized overnight delivery service that requires evidence of receipt at the
addresses for such communication given below:
For the Department: Xxxxx X. Xxxx
Assistant Manager for Enriching
Operations, Oak Ridge
Address: U.S. Department of Energy
000 Xxxxxxxxxxxxxx Xxxx
X.X. Xxx 0000
Xxx Xxxxx, Xxxxxxxxx 00000
Fax: 000-000-0000
For the Corporation: General Counsel
Address: United States Enrichment
Corporation
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Fax: 000-000-0000
The Department and the Corporation have the right to change the place to which
communications are sent or delivered by similar notice sent or delivered. The
effective date of any communication shall be the date of the receipt of such
communication by the addressee.
Section 15.3 SEVERABILITY The invalidity of one or more phrases,
sentences, clauses, subsections, sections or articles contained in this Lease
shall not affect the validity of the remaining portions of this Lease so long as
the material purposes of this Lease can be determined and effectuated. If such
invalidity alters the fundamental allocation of risks or benefits or the rights
and obligations of the Department or the Corporation contemplated in this Lease,
the Department and the Corporation will use their best efforts to negotiate in
good faith to restructure this Lease to reflect its original purposes.
Section 15.4 NO WAIVER The failure of either the Department or the
Corporation to rely upon any of the provisions of this Lease or to require
compliance with any of its terms at any time shall in no way affect the validity
of this Lease or any part thereof, and shall not be deemed a waiver of the right
of the Department or the Corporation, as the case may be, to rely upon or
require
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compliance with any and each such provision at a different time.
Section 15.5 APPLICABLE LAW This Lease will be governed and
construed in accordance with the federal laws of the United States of America.
Section 15.6 BINDING NATURE OF LEASE This Lease will be binding upon
the Department and the Corporation and their respective successors.
Section 15.7 LEASE NOT JOINT VENTURE Nothing contained in this Lease
will be construed as creating or establishing a joint venture or partnership
between the Department and the Corporation.
Section 15.8 FURTHER ASSISTANCE The Department and the Corporation
will provide such information, execute and deliver any agreements, instruments
and documents and take such other actions as may be reasonably necessary or
required, which are not inconsistent with the provisions in this Lease and which
do not involve the assumption of obligations other than those provided for in
this Lease, in order to give full effect to this Lease and to carry out its
intent and the intent of the Act.
Section 15.9 LICENSES
(a) The Department grants to the Corporation for the Lease
Term a fully paid, non-transferable, royalty-free sole license in intellectual
property which is owned or controlled by the Department or the Department has
the right to license in connection with the Uranium Enrichment Enterprise
related to the process for enriching uranium by the gaseous diffusion method.
Such license shall be for all the activities the Corporation may perform in
regard to the Uranium Enrichment Enterprise which are related to the process for
enriching uranium by the gaseous diffusion method. The Department's intellectual
property subject to such license by the Corporation shall include all patents,
unpatented inventions, copyrighted works (including software), and technical
data (including drawings, designs and specifications) in connection with the
Uranium Enrichment Enterprise that are related to the process for enriching
uranium by the gaseous diffusion method.
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(b) The Department reserves the right to practice or have
practiced for governmental purposes any of its intellectual property licensed to
the Corporation.
Section 15.10 PROPERTY RECORDS AND OTHER INFORMATION
(a) The Corporation will keep records of property which
constitute the Leased Premises, the Leased Personalty and any Capital
Improvement in accordance with the following procedures:
(i) The Corporation shall maintain records of the Leased
Premises and Leased Personalty and shall within thirty (30) days of each
September 30 prepare and submit to the Department an annual report thereof
with respect to the twelve (12) months prior to September 30. Such reports
shall consist of a summary description by asset type showing the beginning
balance, number of items acquired, fabricated or disposed of during such
twelve (12) months and the ending balance. This report will be supported
by a detailed listing by individual unit sorted by asset type and shall
identify location of the Leased Personalty. All such reports may be in
terms of gross book value only. Annual reports shall include a listing by
facility of all asset type designations, gross book value, net book value,
depreciation/amortization method used, service life, and remaining useful
life.
(ii) In the event the Corporation makes any Capital
Improvement, records shall be maintained by the Corporation for such
Capital Improvement such that at the end of the Lease Term property and
financial management information with respect thereto can be provided to
the Department.
(iii) Inventories of the Leased Premises and Leased Personalty
shall be conducted every ten years and at the end of the Lease Term.
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(b) Consistent with the Act, and subject to the procedures to
be developed by the Department and the Corporation, the Department will provide
the Corporation and the Corporation will provide the Department such access as
each of them reasonably requires to all technical data, records, papers,
documents, computer tapes, designs, drawings and all other information, however
stored, regarding the GDPs which is in their possession or control, whether or
not such information is classified, restricted or under security.
Section 15.11 SURVIVAL Notwithstanding any expiration or conclusion
of this Lease or the termination of this Lease, whether pursuant to the terms
hereof or otherwise by operation of law, Section 3.3, Section 3.5, Section 4.3,
Section 4.4, Section 4.5, Section 4.6, Article V, Section 8.1, Section 9.3,
Section 10.1, Section 12.1, Section 15.10, Section 15.13 as well as those
portions of any memorandum of agreement between the Department and the
Corporation which are related thereto, or by their terms are intended to
continue, shall survive any such expiration, conclusion or termination of this
Lease.
Section 15.12 NO RIGHTS IN OTHERS This Lease is intended only to
improve the internal management of the United States Government. It is not
intended to create any right or benefit, substantive or procedural, enforceable
by a party against the United States, its agencies or instrumentalities
(including the Department and the Corporation), officers or employees of the
United States Government, or any other person.
Sections 15.13 DEPARTMENT'S PAYMENT OBLIGATIONS The
Department's obligations to make payments under this Lease are subject to the
availability of appropriated funds. The Department will use its best efforts,
consistent with Laws and Regulations, to make payments from existing
appropriations (including by reprogramming funds). If payments cannot be made by
the Department from existing appropriations, the Department will use its best
efforts to request such additional appropriations as are needed from the
Congress of the United States in order to make such payments. This section does
not limit either party's rights as provided for in the Act.
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IN WITNESS WHEREOF, the Department and the Corporation have caused
this Lease to be executed and delivered as of July 1, 1993, and hereby affix the
signatures of their duly authorized representatives:
/s/ Xxxxx X. X'Xxxxx
--------------------------------------
XXXXX X. X'XXXXX
SECRETARY OF ENERGY
AND
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
XXXXXXX X. XXXXXXX
TRANSITION MANAGER
THE UNITED STATES ENRICHMENT CORPORATION
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June 5, 1997
Xx. Xxxxxx X. Xxxxx
Assistant Manager for Enrichment Facilities
U.S. Department of Energy
X.X. Xxx 0000
Xxx Xxxxx, XX 00000
Dear Xx. Xxxxx:
Pursuant to Section 7.2 of the Gaseous Diffusion Plant Lease Agreement
dated July 1, 1993 (Lease) between the United States Enrichment Corporation
(USEC) and the U.S. Department of Energy, USEC has the option to renew the Lease
for one or both plants upon written notice by July 1, 1997.
In accordance with Section 15.2 of the Lease, this letter serves as USEC's
official notice to renew the Lease for both the Portsmouth and Paducah plants
for a period of five years. Together with the notice period, this first Renewal
Period will expire on July 1, 2004.
Sincerely,
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
