Announcement and Publication of Guidance on Agreements With Prospective Purchasers of Contaminated Property and Model Prospective Purchaser Agreement
[Federal Register: July 3, 1995 (Volume 60, Number 127)]
[Notices ]
[Page 34792-34798]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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ENVIRONMENTAL PROTECTION AGENCY
[FRL-5252-1]
Announcement and Publication of Guidance on Agreements With
Prospective Purchasers of Contaminated Property and Model Prospective
Purchaser Agreement
SUMMARY: The new prospective purchaser guidance supersedes previous
Agency policy on when the Agency will provide a covenant not to sue a
prospective purchaser of contaminated property under CERCLA. Previous
guidance, issued in June 1989, entitled ''Guidance on Landowner
Liability under Section 107(a) of CERCLA, De Minimis Settlements under
Section 122(g)(1)(B) of CERCLA, and Settlements with Prospective
Purchasers of Contaminated Property'' (OSWER Directive No. 9835.9 and
54 FR 34235 (Aug. 18, 1989), had two separate parts, including a model
administrative order and a model consent decree for de minimis
landowner settlements. The first part of the previous guidance,
landowner liability/the innocent landowner defense and the Agency's use
of de minimis landowner settlements including model agreements to use
in such settlements remains Agency Policy. The section of the guidance
dealing with prospective purchasers is changed by new guidance approved
May 24, 1995.
In an effort to promote cleanup for the beneficial reuse and
development of contaminated properties, EPA is expanding the criteria
by which it will consider entering into prospective purchaser
agreements. EPA will consider such agreements if the agreement results
in either (1) a substantial direct benefit to the Agency in terms of
cleanup or funds for cleanup or (2) a substantial indirect benefit to
the community coupled with a lesser direct benefit to the Agency.
Additionally, the new guidance should enable the Agency to enter into
more prospective purchaser agreements by expanding the universe of
eligible sites. A model prospective purchaser agreement has also been
developed and is part of the new guidance.
FOR FURTHER INFORMATION CONTACT: Additional information on the
prospective purchaser policy is available from Lori Boughton ((703)
603-8959) or Elisabeth Freed ((703) 603-8936) in the Office of Site
Remediation Enforcement, 402 M St., S.W., 2273-G, Washington, D.C.
20460. Information regarding the model prospective purchaser agreement
and site specific prospective purchaser inquiries should be directed to
Helen Keplinger ((202) 260-7116) in the Office of Site Remediation
Enforcement, 401 M St. S.W., 2272, Washington, D.C. 20460.
Dated: June 21, 1995.
Bruce M. Diamond,
Director, Office of Site Remediation Enforcement.
Memorandum
Subject: Guidance on Agreements with Prospective Purchasers of
Contaminated Property
From: Steven A. Herman, Assistant Administrator, Office of
Enforcement and Compliance Assurance
To: Regional Administrators, Regions I-X; Regional Counsel, Region
I-X; Waste Management Division Directors, Regions I-X
This memorandum transmits the guidance and model agreement
concerning prospective purchasers of contaminated Superfund
property. The attached guidance supersedes the Agency policy issued
in June 1989, entitled ''Guidance on Landowner Liability under
Section 107(a) of CERCLA, De Minimis Settlements under Section
122(g)(1)(B) of CERCLA, and Settlements with Prospective Purchasers
of Contaminated Property'' (OSWER Directive No. 9835.9 and 54 FR
34235 (Aug. 18, 1989). The 1989 guidance limited the use of these
covenants to situations where the Agency planned to take an
enforcement action, and where the Agency received a substantial
benefit for cleanup of the site by the purchaser, not otherwise
available. In an effort to promote cleanup for the beneficial reuse
and development of these properties, EPA is expanding the
circumstances under which it will consider entering into prospective
purchaser agreements.
Additional information on this policy is available from Lori
Boughton ((703) 603-8959) or Elisabeth Freed ((703) 603-8936) in the
Office of Site Remediation Enforcement. Information regarding the
model agreement and site specific inquiries should be directed to
Helen Keplinger ((202) 260-7116) in the Office of Site Remediation
Enforcement.
GUIDANCE ON SETTLEMENTS WITH PROSPECTIVE PURCHASERS OF CONTAMINATED
PROPERTY
I. Purpose
This document supersedes EPA's policy on agreements with
prospective purchasers of contaminated property as set forth in the
June 6, 1989, policy document entitled ''Guidance on
[[Page 34793]]
Landowner Liability under Section 107(a) of CERCLA, De Minimis
Settlements under Section 122(g)(1)(B) of CERCLA, and Settlements with
Prospective Purchasers of Contaminated Property'' 1 (''the 1989
guidance''). This revised guidance reflects both Agency experience in
implementing the 1989 guidance and changes to that guidance that EPA
believes are needed.
\1\ OSWER Directive No. 9835.9 and 54 FR 34235 (Aug. 18, 1989).
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During the past several years, EPA has entered into a number of
prospective purchaser agreements to enable purchasers to buy
contaminated property for cleanup, redevelopment or reuse. The 1989
guidance required EPA to receive substantial benefits in terms of work
or reimbursement of response costs that otherwise would not have been
available. While some agreements required performance of cleanup work
on contaminated parcels prior to their redevelopment, others provided
covenants not to sue for purchase of uncontaminated portions of larger
Superfund sites. EPA's experience has demonstrated that prospective
purchaser agreements might be both appropriate and beneficial in more
circumstances than contemplated by the 1989 guidance. The Agency now
believes that it may be appropriate to enter into agreements resulting
in somewhat reduced benefits to the Agency through cleanup or response
costs or in benefits that also may be available from other parties.
These agreements in turn should provide substantial benefits to the
community through the creation or retention of jobs, productive use of
abandoned property, or revitalization of blighted areas.
While this new guidance restates much of the 1989 guidance, it
revises two of the original criteria used to determine whether a
prospective purchaser agreement is appropriate. The revised criteria
allow the Agency greater flexibility to consider agreements with
covenants not to sue to encourage reuse or development of contaminated
property that would have substantial benefits to the community (e.g.,
through job creation or productive use of abandoned property), but also
would be safe, consistent with site remediation, and have direct
benefits to the Agency. A ''model'' prospective purchaser agreement,
which should be used as a starting point for negotiation of agreements,
is attached.
II. Statement of Policy
Because of the clear liability which attaches to landowners who
acquire property with knowledge of contamination, the Agency has
received numerous requests for covenants not to sue from prospective
purchasers of contaminated property.2 It is the Agency's policy
not to become involved in private real estate transactions. However, an
agreement with a covenant not to sue a prospective purchaser might
appropriately be considered if it will have substantial benefits for
the government and if the prospective purchaser satisfies other
criteria.3
\2\ Since settlements with typical prospective purchasers
(i.e., those who do not currently own the property, are not
otherwise involved with the site, and are, therefore, not yet liable
under Section 107) will not be reached under Section 122, the
procedures and restrictions in that section, such as those relating
to covenants not to sue, will not apply.
\3\ This guidance is also applicable to persons seeking
prospectively to operate or lease contaminated property. Agreements
with prospective lessees/operators will be evaluated using the
criteria set forth in this guidance, and will require the current
owner's signature.
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The Agency recognizes that entering into an agreement containing a
covenant not to sue with a prospective purchaser of contaminated
property, given appropriate safeguards, may result in an environmental
benefit through a payment for cleanup or a commitment to perform a
response action. EPA's experience has shown that prospective purchaser
agreements have also benefitted the community where the site is located
by encouraging the reuse or redevelopment of property at which the fear
of Superfund liability may have been a barrier. The Agency believes
that it is necessary to provide greater flexibility in offering
covenants not to sue. Through this guidance, the Agency adopts a policy
which expands the circumstances under which prospective purchaser
agreements may be considered.
III. Criteria for Entering Into Covenants Not To Sue With Prospective
Purchasers of Contaminated Property
The following criteria should be met before the Agency considers
entering into agreements with prospective purchasers. These criteria
are intended to reflect EPA's commitment to removing the barriers
imposed by potential CERCLA liability while ensuring protection of
human health and the environment. The Agency may also reject any offer
if it determines that entering into an agreement with a prospective
purchaser is not sufficiently in the public interest to warrant
expending the resources necessary to reach an agreement. Regions should
consider the following criteria when evaluating prospective purchaser
agreements.
- An EPA Action at the Facility Has Been Taken, Is Ongoing, or Is
Anticipated To Be Undertaken by the Agency
This criterion is meant to ensure that EPA does not become
unnecessarily involved in purely private real estate transactions or
expend its limited resources in negotiations which are unlikely to
produce a sufficient benefit to the public. EPA, however, recognizes
the potential gains in terms of clean up and public benefit that may be
realized with broader application of prospective purchaser agreements.
Therefore, this criterion has been expanded beyond the limitation in
the 1989 guidance to sites where enforcement action is anticipated, to
now include sites where federal involvement has occurred or is expected
to occur.
Accordingly, when requested, the Agency may consider entering into
prospective purchaser agreements at sites listed or proposed for
listing on the National Priorities List (NPL), or sites where EPA has
undertaken, is undertaking, or plans to conduct a response action. If
the Agency receives a request for a prospective purchaser agreement at
a site where EPA has not yet become involved, Regions should first
evaluate the realistic possibility that a prospective purchaser may
incur Superfund liability when determining the appropriateness of
entering into a prospective purchaser agreement. This evaluation should
clearly show that EPA's covenant not to sue is essential to remove
Superfund liability barriers and allow the private party cleanup and
productive use, reuse, or redevelopment of the site.
The Agency should consider the following factors when evaluating
the appropriateness of entering into an agreement with a prospective
purchaser at any site:
a. Whether information regarding releases or potential releases of
hazardous substances at the site indicates that there is a substantial
likelihood of federal response or enforcement action at the site that
would justify EPA's involvement in entering into the prospective
purchaser agreement. EPA should consider information that is available
through EPA's data systems, such as the Comprehensive Environmental
Response, Compensation, and Liability Information System (''CERCLIS''),
a state agency, or through submissions from the prospective purchaser,
such as the results of an environmental audit or site assessment.
b. Whether other available avenues (e.g., private indemnification
[[Page 34794]]
agreements) may exist to sufficiently alleviate the threat of Superfund
liability at the site without the need for EPA involvement. In most
cases EPA will decline to consider an agreement at a site that is
currently undergoing cleanup through a state program, since future EPA
activity at such a site is extremely unlikely.
Prospective purchaser agreements generally will not be appropriate
at sites screened out using the above criteria. For example, sites
designated by EPA as No Further Response Action Planned (NFRAP) and
removed from CERCLIS will rarely be deemed appropriate for a
prospective purchaser agreement. Even at such sites, however, EPA may,
in extremely unusual circumstances, consider a prospective purchaser
agreement if it is in the public interest and the agreement is
essential to achieve a very significant public benefit.
2. The Agency Should Receive a Substantial Benefit Either in the Form
of a Direct Benefit for Cleanup, or as an Indirect Public Benefit in
Combination With a Reduced Direct Benefit to EPA
A cornerstone of the Agency's evaluation process under this policy
is the measurement of environmental benefit, in the form of direct
funding, or cleanup, or a combination of reduced direct funding or
cleanup and an indirect public benefit. The Agency believes that its
past practice of limiting prospective purchaser agreements to those
situations where substantial benefit was measured only in terms of cost
reimbursement or work performed may have decreased the effectiveness of
this tool.
This guidance encourages a more balanced evaluation of both the
direct and indirect benefits of a prospective purchaser agreement to
the government and the public. EPA recognizes that indirect benefits to
a community is an important consideration and may justify the
commitment of the Agency's resources necessary to negotiate a
prospective purchaser agreement, even where there are reduced direct
benefits to the Agency in terms of cleanup and cost reimbursement.
Therefore, EPA may continue to consider entering into prospective
purchaser agreements where there is a substantial direct benefit to EPA
in terms of a commitment to conduct the cleanup or to reimburse EPA's
cost of cleanup. Furthermore, Regions may now consider negotiating
prospective purchaser agreements that will result in substantial
indirect benefits to the community as long as there is still some
direct benefit to the Agency. Both direct and indirect benefits should
be measurable to enable EPA to evaluate them effectively and to ensure
they are substantial. Examples of indirect benefits to the community
include measures that serve to reduce substantially the risk posed by
the site, creation or retention of jobs, development of abandoned or
blighted property, creation of conservation or recreation areas, or
provision of community services (such as improved public transportation
and infrastructure.) Examples of reduced but measurable benefits to EPA
include partial cleanup or compensation.
While this policy is intended to provide greater flexibility in
providing prospective purchaser agreements, EPA is not reducing its
commitment to environmental protection or environmental justice. The
Agency intends to carefully weigh the public interest considerations of
creating jobs in the inner city, where older contaminated industrial
properties are often located, against the possibility of further
environmental degradation of industrial property in mixed industrial/
residential areas. EPA is committed to working with purchasers of such
property, to the extent possible, to ensure proper cleanup and promote
responsible land use.
3. The Continued Operation of the Facility or New Site Development,
With the Exercise of Due Care, Will Not Aggravate or Contribute to the
Existing Contamination or Interfere With EPA's Response Action
Information which should be considered by the Agency to evaluate
the effect of new site development or continued operation of the
facility could include site assessment data and the Engineering
Evaluation Cost Analysis (EE/CA) or remedial investigation/feasibility
study (RI/FS), if available, and all other information relevant to the
condition of the facility. If the prospective purchaser intends to
continue the operations of an existing facility, the prospective
purchaser should submit information sufficient to allow the Agency to
determine whether the continued operations are likely to aggravate or
contribute to the existing contamination or interfere with the remedy.
If the prospective purchaser plans to undertake new operations or
development of the property, comprehensive information regarding these
plans should be provided to EPA. If the planned activities of the
prospective purchaser are likely to aggravate or contribute to the
existing contamination or generate new contamination, EPA generally
will not enter into an agreement, or will include restrictions in the
agreement which prohibit those operations or portions of those
operations which are likely to aggravate or contribute to the existing
contamination or interfere with the remedy.
The Agency will determine on a case-by-case basis whether the
available information is sufficient for purposes of this evaluation.
One key factor to be considered is whether the remedial investigation
or other site evaluation has been completed and the extent of
information which has been generated in that process. EPA may not enter
into an agreement if the available information is insufficient for
purposes of evaluating the impact of the proposed activities.
4. The Continued Operation or New Development of the Property Will Not
Pose Health Risks to the Community and Those Persons Likely To Be
Present at the Site
EPA believes it is important to consider the environmental
implications of site operations on the surrounding community and to
those likely to be present or have access to the site.
5. The Prospective Purchaser Is Financially Viable
A settling party, including a prospective purchaser of contaminated
property, should demonstrate that it is financially viable and capable
of fulfilling any obligation under the agreement. In appropriate
circumstances, EPA may structure payment or work to be performed to
avoid or minimize an undue financial burden on the purchaser.
IV. Consideration
As a matter of law, it is necessary for EPA to obtain adequate
consideration when entering into a prospective purchaser agreement. In
determining what constitutes adequate consideration, Regions should
consider a number of factors. Initially, Regions should examine the
amount of past and future response costs expected to be incurred at the
site, whether there are other potentially responsible parties who can
perform the work or reimburse EPA's costs, and whether there is likely
to be a shortfall in recovery of costs at the site. Regions should then
consider the purchase price to be paid by the prospective purchaser,
the market value of the property, the value of any lien on the property
under Section 107(1) of CERCLA, whether the purchaser is paying a
reduced price due to the condition of the property, and if so, the
likely increase in the value of the
[[Page 34795]]
property attributable to the cleanup (e.g. compare purchase price or
market price with the estimated value of the property following
completion of the response action). Finally, Regions should consider
the size and nature of the prospective purchaser and the proposed use
of the site (e.g. whether the purchaser is a large commercial or
industrial venture, a small business, a non-profit or community-based
activity). The analysis of any benefits received by the Agency also
should contemplate any projected ''windfall'' profit to the purchaser
when the government has unreimbursed response costs, and whether it is
appropriate to include in the agreement some provision to recoup such
costs. This analysis should be coupled with an examination of any
indirect benefit that the Agency may receive (e.g., demolition of
structures, implementation of institutional controls) in determining
whether a prospective purchaser agreement provides a substantial
benefit.
V. Public Participation
In light of EPA's new policy of accepting indirect public benefit
as partial consideration, and the fact that the prospective purchaser
agreements will provide contribution protection to the purchaser, the
surrounding community and other members of the public should be
afforded opportunity to comment on the settlement, wherever feasible.
Because settlements with prospective purchasers are not expressly
governed by CERCLA Section 122, there is no legal requirement for
public notice and comment. Whenever practicable, however, Regions
should publish notices in the Federal Register to ensure adequate
notification of the agreement to all interested parties. Notice of a
proposed settlement, in the Federal Register alone, however, will
rarely be sufficient to appropriately involve a community in the
process concerning an agreement with a prospective purchaser.
Particularly in urban communities and at facilities where environmental
justice is an issue, Regions should provide sufficient opportunities
for public information dissemination and facilitate public input.
Seeking cooperation with state and local government may also facilitate
public awareness and involvement. Additionally, Regions should make a
case-by-case determination of the need and level of additional measures
to ensure meaningful community involvement with respect to the
agreement. Because of business considerations some prospective
purchaser agreements may be subject to relatively short deadlines. In
these circumstances, Regions should allow sufficient time for
appropriate approvals and public comment prior to the deadline.
VI. Process
A mandatory consultation with the Director of the Regional Support
Division, Office of Site Remediation Enforcement, is required for any
agreement entered with a prospective purchaser of contaminated
property. Any prospective purchaser agreement can only be entered into
with the express concurrence of the Assistant Attorney General. It is
important that Regions involve EPA Headquarters and the Department of
Justice at an early point in the process, and keep them involved
throughout the negotiations. In particular, any draft settlement
document should be forwarded to Headquarters and the Department of
Justice prior to being sent to a prospective purchaser. When seeking
approval for a settlement, it is important to explain the consideration
for the covenant not to sue, whether direct or a combination of direct
and indirect benefits, how it was determined, and why the Region
considers it to be adequate.
This guidance and any internal procedures adopted for its
implementation are intended solely as guidance for employees of the
U.S. Environmental Protection Agency and creates no substantive rights
in any persons. Case specific inquiry should be directed to the
Regional Support Division. Additional information on this policy is
available from Lori Boughton ((703) 603-8959), Elisabeth Freed ((703)
603-8936) in the Policy and Program Evaluation Division, and Helen
Keplinger ((202) 260-7116) in the Regional Support Division.
Region ______
In the matter of: [name] [Docket Number] under the authority of
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. 9601, et seq., as amended. [state
law, if appropriate] Agreement and Covenant Not To Sue [Insert
Settling Respondent's Name]
I. Introduction
This Agreement and Covenant Not to Sue (''Agreement'') is made and
entered into by and between the United States Environmental Protection
Agency (''EPA'') [state of ______] and __________ [insert name of
Settling Respondent] (collectively the ''Parties'').
EPA enters into this Agreement pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended (''CERCLA''), 42 U.S.C. Sec. 9601, et seq. [If the state is a
party, insert ''The State of __________, enters into this Agreement
pursuant to [cite relevant state authority.]'' and make appropriate
reference to state with respect to affected provisions, including
payment or work to be performed].
[Provide introductory information, consistent with Definitions and
Statement of Facts, about the party purchasing the contaminated
property including, name (''Settling Respondent''), address, corporate
status if applicable and include proposed use of the property by
prospective purchaser. Provide name, location and description of Site.]
The Parties agree to undertake all actions required by the terms
and conditions of this Agreement. The purpose of this Agreement is to
settle and resolve, subject to reservations and limitations contained
in Sections VII, VIII, IX, and X [If this Agreement contains a separate
section for Settling Respondent's reservations, add section number],
the potential liability of the Settling Respondent for the Existing
Contamination at the Property which would otherwise result from
Settling Respondent becoming the owner of the property.
The Parties agree that the Settling Respondent's entry into this
Agreement, and the actions undertaken by the Settling Respondent in
accordance with the Agreement, do not constitute an admission of any
liability by the Settling Respondent.
The resolution of this potential liability, in exchange for
provision by the Settling Respondent to EPA [and the state] of a
substantial benefit, is in the public interest.
II. Definitions
Unless otherwise expressly provided herein, terms used in this
Agreement which are defined in CERCLA or in regulations promulgated
under CERCLA shall have the meaning assigned to them in CERCLA or in
such regulations, including any amendments thereto.
- ''EPA'' shall mean the United States Environmental Protection
Agency and any successor departments or agencies of the United States.
- ''Existing Contamination'' shall mean any hazardous substances,
pollutants or contaminants, present or existing on or under the Site as
of the effective date of this Agreement.
- ''Parties'' shall mean EPA, [State of __________], and the
Settling Respondent.
- ''Property'' shall mean that portion of the Site which is
described in Exhibit 1 of this Agreement.
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5. ''Settling Respondent'' shall mean __________.
6. ''Site'' shall mean the [Superfund] Site, encompassing
approximately __________ acres, located at [address or description of
location] in [name of city, county, and State], and depicted generally
on the map attached as Exhibit 2. The Site shall include the Property,
and all areas to which hazardous substances and/or pollutants or
contaminants, have come to be located [provide a more specific
definition of the Site where possible; may also wish to include within
Site description structures, USTs, etc].
7. ''United States'' shall mean the United States of America, its
departments, agencies, and instrumentalities.
III. Statement of Facts
8. [Include only those facts relating to the Site that are relevant
to the covenant being provided the prospective purchaser. Avoid adding
information that relates only to actions or parties that are outside of
this Agreement.]
9. The Settling Respondent represents, and for the purposes of this
Agreement EPA [and the state] relies on those representations, that
Settling Respondent's involvement with the Property and the Site has
been limited to the following: [Provide facts of any involvement by
Settling Respondent with the Site, for example performing an
environmental audit, or if Settling Respondent has had no involvement
with the Site so state.].
IV. Payment
10. In consideration of and in exchange for the United States'
Covenant Not to Sue in Section VIII herein [and Removal of Lien in
Section XXI herein if that is part of the consideration for the
agreement], Settling Respondent agrees to pay to EPA the sum of
$__________, within ______ days of the effective date of this
Agreement. [A separate section should be added if the consideration is
work to be performed.] The Settling Respondent shall make all payments
required by this Agreement in the form of a certified check or checks
made payable to ''EPA Hazardous Substance Superfund,'' referencing the
EPA Region, EPA Docket number, and Site/Spill ID#________ [insert 4-
digit no.; first 2 numbers represent Region, second 2 numbers are
Region's Site/Spill ID no.], [DOJ case number ______, if applicable]
and name and address of Settling Respondent. [insert Regional Superfund
Lockbox address where payment should be sent]. Notice of payment shall
be sent to those persons listed in Section XV (Notices and Submissions)
and to EPA Region ______ Financial Management Officer [insert address].
11. Amounts due and owing pursuant to the terms of this Agreement
but not paid in accordance with the terms of this Agreement shall
accrue interest at the rate established pursuant to Section 107(a) of
CERCLA, 42 U.S.C. 9607(a), compounded on an annual basis.
[______.] [Work To Be Performed]
[Include this section and other appropriate provisions relating to
performance of the work, such as financial assurance, agency approvals,
reporting, etc., where work to be performed is the consideration for
the Agreement.
______. Statement of Work attached as Exhibit 3.]
V. Access/Notice to Successors in Interest
12. Commencing upon the date that it acquires title to the
Property, Settling Respondent agrees to provide to EPA [and the state]
its authorized officers, employees, representatives, and all other
persons performing response actions under EPA [or state] oversight, an
irrevocable right of access at all reasonable times to the Property and
to any other property to which access is required for the
implementation of response actions at the Site, to the extent access to
such other property is controlled by the Settling Respondent, for the
purposes of performing and overseeing response actions at the Site
under federal [and state] law. EPA agrees to provide reasonable notice
to the Settling Respondent of the timing of response actions to be
undertaken at the Property. Notwithstanding any provision of this
Agreement, EPA retains all of its authorities and rights, including
enforcement authorities related thereto, under CERCLA, the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act,
42 U.S.C. 6901, (''RCRA'') et seq., and any other applicable statute or
regulation, including any amendments thereto.
13. Within 30 days after the effective date of this Agreement, the
Settling Respondent shall record a certified copy of this Agreement
with the Recorder's Office [or Registry of Deeds or other appropriate
office], __________ County, State of __________. Thereafter, each deed,
title, or other instrument conveying an interest in the Property shall
contain a notice stating that the Property is subject to this
Agreement. A copy of these documents should be sent to the persons
listed in Section XV (Notices and Submissions).
14. The Settling Respondent shall ensure that assignees, successors
in interest, lessees, and sublessees, of the Property shall provide the
same access and cooperation. The Settling Respondent shall ensure that
a copy of this Agreement is provided to any current lessee or sublessee
on the Property as of the effective date of this Agreement and shall
ensure that any subsequent leases, subleases, assignments or transfers
of the Property or an interest in the Property are consistent with this
Section, and Section XI (Parties Bound/Transfer of Covenant), of the
Agreement [and where appropriate, Section ______ (Work to be
Performed)].
VI. Due Care/Cooperation
15. The Settling Respondent shall exercise due care at the Site
with respect to the Existing Contamination and shall comply with all
applicable local, State, and federal laws and regulations. The Settling
Respondent recognizes that the implementation of response actions at
the Site may interfere with the Settling Respondent's use of the
Property, and may require closure of its operations or a part thereof.
The Settling Respondent agrees to cooperate fully with EPA in the
implementation of response actions at the Site and further agrees not
to interfere with such response actions. EPA agrees, consistent with
its responsibilities under applicable law, to use reasonable efforts to
minimize any interference with the Settling Respondent's operations by
such entry and response. In the event the Settling Respondent becomes
aware of any action or occurrence which causes or threatens a release
of hazardous substances, pollutants or contaminants at or from the Site
that constitutes an emergency situation or may present an immediate
threat to public health or welfare or the environment, Settling
Respondent shall immediately take all appropriate action to prevent,
abate, or minimize such release or threat of release, and shall, in
addition to complying with any applicable notification requirements
under Section 103 of CERCLA, 42 U.S.C. 9603, or any other law,
immediately notify EPA of such release or threatened release.
VII. Certification
16. By entering into this agreement, the Settling Respondent
certifies that to the best of its knowledge and belief it has fully and
accurately disclosed to EPA [and the state] all information known to
Settling Respondent and all information in the possession or control of
its officers, directors, employees,
[[Page 34797]]
contractors and agents which relates in any way to any Existing
Contamination or any past or potential future release of hazardous
substances, pollutants or contaminants at or from the Site and to its
qualification for this Agreement. The Settling Respondent also
certifies that to the best of its knowledge and belief it has not
caused or contributed to a release or threat of release of hazardous
substances or pollutants or contaminants at the Site. If the United
States [and the state] determines that information provided by Settling
Respondent is not materially accurate and complete, the Agreement,
within the sole discretion of the United States, shall be null and void
and the United States [and the state] reserves all rights it [they] may
have.
VIII. United States' Covenant Not To Sue 4
17. Subject to the Reservation of Rights in Section IX of this
Agreement, upon payment of the amount specified in Section IV
(Payment), of this Agreement [if consideration for Agreement is work to
be performed, insert, as appropriate, ''and upon completion of the work
specified in Section ______ (Work to Be Performed) to the satisfaction
of EPA''], the United States [and the state] covenants not to sue or
take any other civil or administrative action against Settling
Respondent for any and all civil liability for injunctive relief or
reimbursement of response costs pursuant to Sections 106 or 107(a) of
CERCLA, 42 U.S.C. 9606 or 9607(a) [and state law cite] with respect to
the Existing Contamination.
\4\ Since the covenant not to sue is from the United States,
Regions negotiating these Agreements should advise the Department of
Justice of any other federal agency involved with the Site, or which
may have a claim under CERCLA with respect to the Site and use best
efforts to advise such federal agency of the proposed settlement.
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IX. Reservation of Rights
18. The covenant not to sue set forth in Section VIII above does
not pertain to any matters other than those expressly specified in
Section VIII (United States' Covenant Not to Sue). The United States
[and the State] reserves and the Agreement is without prejudice to all
rights against Settling Respondent with respect to all other matters,
including but not limited to, the following:
(a) claims based on a failure by Settling Respondent to meet a
requirement of this Agreement, including but not limited to Section IV
(Payment), Section V (Access/Notice to Successors in Interest), Section
VI (Due Care/Cooperation), Section XIV (Payment of Costs, [and, if
appropriate, Section ______ (Work to be Performed)];
(b) any liability resulting from past or future releases of
hazardous substances, pollutants or contaminants, at or from the Site
caused or contributed to by Settling Respondent, its successors,
assignees, lessees or sublessees;
(c) any liability resulting from exacerbation by Settling
Respondent, its successors, assignees, lessees or sublessees, of
Existing Contamination;
(d) any liability resulting from the release or threat of release
of hazardous substances, pollutants or contaminants, at the Site after
the effective date of this Agreement, not within the definition of
Existing Contamination;
(e) criminal liability;
(f) liability for damages for injury to, destruction of, or loss of
natural resources, and for the costs of any natural resource damage
assessment incurred by federal agencies other than EPA; and
(g) liability for violations of local, State or federal law or
regulations.
19. With respect to any claim or cause of action asserted by the
United States [or the state], the Settling Respondent shall bear the
burden of proving that the claim or cause of action, or any part
thereof, is attributable solely to Existing Contamination.
20. Nothing in this Agreement is intended as a release or covenant
not to sue for any claim or cause of action, administrative or
judicial, civil or criminal, past or future, in law or in equity, which
the United States [or the state] may have against any person, firm,
corporation or other entity not a party to this Agreement.
21. Nothing in this Agreement is intended to limit the right of EPA
[or the state] to undertake future response actions at the Site or to
seek to compel parties other than the Settling Respondent to perform or
pay for response actions at the Site. Nothing in this Agreement shall
in any way restrict or limit the nature or scope of response actions
which may be taken or be required by EPA [or the state] in exercising
its authority under federal [or state] law. Settling Respondent
acknowledges that it is purchasing property where response actions may
be required.
X. Settling Respondent's Covenant Not To Sue
22. In consideration of the United States' Covenant Not To Sue in
Section VIII of this Agreement, the Settling Respondent hereby
covenants not to sue and not to assert any claims or causes of action
against the United States [or the state], its authorized officers,
employees, or representatives with respect to the Site or this
Agreement, including but not limited to, any direct or indirect claims
for reimbursement from the Hazardous Substance Superfund established
pursuant to the Internal Revenue Code, 26 U.S.C. Sec. 9507, through
CERCLA Sections 106(b)(2), 111, 112, 113, or any other provision of
law, any claim against the United States, including any department,
agency or instrumentality of the United States under CERCLA Sections
107 or 113 related to the Site, or any claims arising out of response
activities at the Site, including claims based on EPA's oversight of
such activities or approval of plans for such activities.
23. The Settling Respondent reserves, and this Agreement is without
prejudice to, actions against the United States based on negligent
actions taken directly by the United States, not including oversight or
approval of the Settling Respondent's plans or activities, that are
brought pursuant to any statute other than CERCLA or RCRA and for which
the waiver of sovereign immunity is found in a statute other than
CERCLA or RCRA. Nothing herein shall be deemed to constitute
preauthorization of a claim within the meaning of Section 111 of
CERCLA, 42 U.S.C. 9611, or 40 CFR 300.700(d).
XI. Parties Bound/Transfer of Covenant
24. This Agreement shall apply to and be binding upon the United
States, [and the state], and shall apply to and be binding on the
Settling Respondent, its officers, directors, employees, and agents.
Each signatory of a Party to this Agreement represents that he or she
is fully authorized to enter into the terms and conditions of this
Agreement and to legally bind such Party.
25. Notwithstanding any other provisions of this Agreement, all of
the rights, benefits and obligations conferred upon Settling Respondent
under this Agreement may be assigned or transferred to any person with
the prior written consent of EPA [and the state] in its sole
discretion.
26. The Settling Respondent agrees to pay the reasonable costs
incurred by EPA [and the state] to review any subsequent requests for
consent to assign or transfer the Property.
27. In the event of an assignment or transfer of the Property or an
assignment or transfer of an interest in the Property, the assignor or
transferor shall continue to be bound by all the terms and conditions,
and subject to all the benefits, of this Agreement except as EPA [the
state] and the assignor or transferor agree otherwise and modify
[[Page 34798]]
this Agreement, in writing, accordingly. Moreover, prior to or
simultaneous with any assignment or transfer of the Property, the
assignee or transferee must consent in writing to be bound by the terms
of this Agreement including but not limited to the certification
requirement in Section VII of this Agreement in order for the Covenant
Not to Sue in Section VIII to be available to that party. The Covenant
Not To Sue in Section VIII shall not be effective with respect to any
assignees or transferees who fail to provide such written consent to
EPA [and the state].
XII. Disclaimer
28. This Agreement in no way constitutes a finding by EPA [or the
state] as to the risks to human health and the environment which may be
posed by contamination at the Property or the Site nor constitutes any
representation by EPA [or the state] that the Property or the Site is
fit for any particular purpose.
XIII. Document Retention
29. The Settling Respondent agrees to retain and make available to
EPA [and the state] all business and operating records, contracts, site
studies and investigations, and documents relating to operations at the
Property, for at least ten years, following the effective date of this
Agreement unless otherwise agreed to in writing by the Parties. At the
end of ten years, the Settling Respondent shall notify EPA [and the
state] of the location of such documents and shall provide EPA [and the
state] with an opportunity to copy any documents at the expense of EPA
[or the state]. [Where work is to be performed, consider providing for
document retention for ten years or until completion of work to the
satisfaction of EPA, whichever is longer.]
XIV. Payment of Costs
30. If the Settling Respondent fails to comply with the terms of
this Agreement, including, but not limited to, the provisions of
Section IV (Payment), [or Section______ (Work to be Performed)] of this
Agreement, it shall be liable for all litigation and other enforcement
costs incurred by the United States [and the state] to enforce this
Agreement or otherwise obtain compliance.
XV. Notices and Submissions
31. [Insert names, titles, and addresses of those to whom notices
and submissions are due, specifying which submissions are required.]
XVI. Effective Date
32. The effective date of this Agreement shall be the date upon
which EPA issues written notice to the Settling Respondent that EPA
[and the state] has fully executed the Agreement after review of and
response to any public comments received.
XVII. Attorney General Approval
33. The Attorney General of the United States or her designee has
issued prior written approval of the settlement embodied in this
Agreement.
XVIII. Termination
34. If any Party believes that any or all of the obligations under
Section V (Access/Notice to Successors in Interest) are no longer
necessary to ensure compliance with the requirements of the Agreement,
that Party may request in writing that the other Party agree to
terminate the provision(s) establishing such obligations; provided,
however, that the provision(s) in question shall continue in force
unless and until the party requesting such termination receives written
agreement from the other party to terminate such provision(s).
XIX. Contribution Protection
35. With regard to claims for contribution against Settling
Respondent, the Parties hereto agree that the Settling Respondent is
entitled to protection from contribution actions or claims as provided
by CERCLA Section 113(f)(2), 42 U.S.C. 9613(f)(2) for matters addressed
in this Agreement. The matters addressed in this Agreement are [all
response actions taken or to be taken and response costs incurred or to
be incurred by the United States or any other person for the Site with
respect to the Existing Contamination].
36. The Settling Respondent agrees that with respect to any suit or
claim for contribution brought by it for matters related to this
Agreement it will notify the United States [and the state] in writing
no later than 60 days prior to the initiation of such suit or claim.
37. The Settling Respondent also agrees that with respect to any
suit or claim for contribution brought against it for matters related
to this Agreement it will notify in writing the United States [and the
state] within 10 days of service of the complaint on them.
XX. Exhibits
38. Exhibit 1 shall mean the description of the Property which is
the subject of this Agreement.
39. Exhibit 2 shall mean the map depicting the Site.
[______. Exhibit 3 shall mean the Statement of Work.]
XXI. Removal of Lien
40. [Use this provision only when appropriate.] Subject to the
Reservation of Rights in Section IX of this Agreement, upon payment of
the amount specified in Section IV (Payment) [or upon satisfactory
completion of work to be performed specified in Section ______ (Work to
be Performed)], EPA agrees to remove any lien it may have on the
Property under Section 107(l) of CERCLA, 42 U.S.C. 9607(l), as a result
of response action conducted by EPA at the Property.
XXII. Public Comment
41. This Agreement shall be subject to a thirty-day public comment
period, after which EPA may modify or withdraw its consent to this
Agreement if comments received disclose facts or considerations which
indicate that this Agreement is inappropriate, improper or inadequate.
It is So Agreed:
United States Environmental Protection Agency
By:
.----------------------------------------------------------------------
Regional Administrator, Region ______ Date
It is So Agreed:
By:
.----------------------------------------------------------------------
Name Date
[FR Doc. 95-16282 Filed 6-30-95; 8:45 am]
BILLING CODE 6560-50-P
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