(The material referred to follows:)

CONTRACT NO. AT (05-1)-735

(This Document Consists of 21 Pages. No. 16 of 17 Copies, Series A.)

Contractor: Cotter Corporation, Santa Fe, New Mexico.

Payment to be made by: Regional Disbursing Officer, United States Treasury Department, Denver, Colorado.

Submit Invoices to: U. S. Atomic Energy Commission, Grand Junction Operations Office, Grand Junction, Colorado.

This Contract, entered into and effective this 23rd day of May 1957, by and between the United States of America (hereinafter called the "Government"), represented by the United States Atomic Energy Commission (hereinafter called the "Commission"), and the Cotter Corporation (No Stockholders' Liability), a corporation organized and existing under the laws of the State of New Mexico, with offices at Santa Fe, New Mexico (hereinafter called the "Contractor"); Witnesseth that:

Whereas the Commission (1) recognizes the need for research to improve metallurgy methods for the recovery of uranium concentrates, (2) desires to increase the domestic production of source material by providing a limited market for uranium-bearing ores produced on the eastern slope of Colorado, and (3) contemplates affording an opportunity for development of additional ore reserves adequate to support a plant having substantial production capacity; and

Whereas the Contractor desires to construct and operate in the vicinity of Canon City, Colorado, a pilot plant and related facilities (hereinafter called the "pilot plant,") having a daily capacity of approximately fifty (50) tons of uranium-bearing ore for the production of uranium concentrate from ore to be produced in the Canon City or Front Range or eastern slope areas of Colorado, to treat such ore and sell uranium concentrate produced, to the Commission; and

Whereas this contract is authorized by and executed under the Atomic Energy Act of 1954, in the interest of the common defense and security; Now, therefore, the parties hereto do agree as follows:

ARTICLE I-SCOPE AND TERM OF CONTRACT

1. The Contractor agrees to construct, as promptly as possible, a pilot plant having a capacity to process approximately fifty (50) tons of uranium-bearing ore daily in the vicinity of Canon City, Colorado, for the conducting of research to improve metallurgy methods for the recovery of uranium concentrates, and for the processing of uranium-bearing ore available in the Canon City or Front Range or eastern slope areas of Colorado. The Contractor agrees to operate the pilot plant for the production of uranium concentrate meeting the specifications set forth in Article XX hereof, and to deliver, for sale to the Commission, the uranium concentrate meeting said specifications produced during the term of the contract which the Commission hereby agrees to purchase in accordance with the provisions of this contract; provided, the Commission shall not be obligated to purchase under this contract more than three hundred sixty thousand (360,000) pounds of UзO, in uranium concentrate for any twelve months period (fractions of a year pro rata) during which this contract may be in force and effect.

2. The contract shall be in force and effect for the purpose of the Contractor selling to the Commission and the Commission purchasing from the Contractor uranium concentrate as provided in this contract, from the 1st day of December 1957 to and including November 30, 1958. The Contractor has the option, upon written notice to the Commission, not later than November 15, 1958, to extend the term of the contract for an additional term of twelve months, from December 1, 1958, to November 30, 1959, provided, Contractor's pilot plant is in operation and has been in operation under this contract not less than six months prior to the giving of such notice.

23671-58-12

ARTICLE II-WEIGHING, SAMPLING, AND ASSAYING

1. Subject to the provisions of Article XVI hereof, all uranium concentrate delivered under this contract shall be weighed, sampled, and the moisture content thereof determined by the Commission at Grand Junction, Colorado, in accordance with Commission practice. The total weights, samples, and moisture content of each lot delivered hereunder, when arrived at in accordance with the provisions of this Article, shall be final and binding upon the parties hereto. 2. One sample shall be taken from each lot of uranium concentrate delivered under this contract and divided into four equal parts. The Contractor shall receive one part thereof and the remaining parts shall be retained by the Commission.

3. The Commission and the Contractor, each at its own expense, shall make, or cause to be made, independent assays of UзO, content of samples of each lot of uranium concentrate. The results of the U.O. assays shall be exchanged by crossing registered mail promptly after completion of assays. If the difference in the determination of the U.Os content between the assay of the Commission and the assay of the Contractor does not exceed three-tenths of one percent (0.3%), the average of the two results shall be final and binding on both parties. If such difference exceeds three-tenths of one percent (0.3%), one of the parts of the sample retained by the Commission shall be submitted to the National Bureau of Standards or any other mutually acceptable laboratory for umpire assay of the UзOs content thereof and the result of such assay shall be final if within the limits of the assays of the two parties; if not, the assay which is nearer to that of the umpire shall prevail. The cost of such assay shall be borne by the party whose original determination of the UзO, content is further from the determination of the umpire. In the event the umpire's assay is equally distant from the assay of each party, such cost will be split equally.

4. The Commission shall, in addition to making an assay for U.Os make or cause to be made, assays for each impurity listed in b. to k., inclusive, of paragraph 3 of Article XX hereof, which may be contained in concentrate delivered hereunder. The Contractor, in addition to making an assay for U3O8, may, at its option, make or cause to be made, assays for each impurity listed in b. to k., inclusive, of paragraph 3 of Article XX hereof, which may be contained in concentrate delivered hereunder. Assays for all such constituents will be exchanged simultaneously with the assays for U3O8. In the event that the assays with respect to such constituents differ, the Commission's assay shall govern unless the Contractor or the Commission shall, within five days of receipt of the other's assay, make a written request for umpire assay of any such impurity in dispute, provided, that the Contractor shall waive his right to umpire assay and shall accept the Commission's assay for any such constituent for which assay results were not exchanged by crossing registered mail simultaneously with UзOs assays. In the event that umpire assay is requested, one of the parts of the sample retained by the Commission shall be transmitted to the National Bureau of Standards or any other mutually acceptable laboratory for umpire assay and the results thereof shall be final if within the limits of the assays of the two parties; if not, the assay which is nearer to that of the umpire shall prevail. The cost of umpire assay for each such impurity in dispute shall be borne by the party whose original determination of such impurity is further from the determination of the umpire. In the event that the umpire's assay is equally distant from the assay of each party, such cost will be split equally. 5. All costs incurred by the Commission in connection with weighing and sampling of uranium concentrate delivered to the Commission shall be borne by the Commission; provided, however, that if the Contractor elects to have its representative present at such weighing and sampling, the cost incurred by the Contractor in having such representative present shall be borne by the Contractor exclusively.

ARTICLE III-DELIVERY AND ACCEPTANCE

1. Subject to the provisions of Article XVI hereof, deliveries of uranium concentrate hereunder shall be made f. o. b. railroad cars or trucks at the Commission's warehouse at Grand Junction, Colorado. Such deliveries may be made at any time within normal Commission working days and hours on and after September 1, 1957, and may continue thereafter until the expiration of this contract, in accordance with the terms hereof.

2. Each calendar month's production of uranium concentrate from the pilot plant, except for normal pilot plant inventories, shall be delivered to the Commission by the fifteenth day of the succeeding calendar month, unless otherwise authorized in writing by the Commission.

3. The Commission reserves the right, in its discretion, to waive deviations from the specifications established in Article XX hereof, and by notice in writing to the Contractor to accept or reject any uranium concentrate delivered hereunder which, in accordance with Article II hereof, it is determined does not meet such specifications. As a condition to its acceptance of concentrate which does not meet specifications, payment for the UsOs contained in such concentrate will be reduced in accordance with the provisions of Appendix A attached hereto and made a part hereof to the extent applicable.

4. In the event of rejection of concentrate which does not meet specifications, the Contractor shall, within ten (10) days after receiving notice thereof from the Commission, remove the rejected concentrate at its own expense, and shall re-treat it and redeliver it to the Commission, subject to the provisions of this contract. Any moneys paid to the Contractor for concentrate which is thus rejected shall be refunded to the Commission by the Contractor or applied by the Commission in reduction of amounts otherwise due to the Contractor, as the Commission may direct. The Contractor shall not be liable for loss of or damage to uranium concentrate delivered hereunder as provided in paragraph 1 of this Article, except that the Contractor shall become liable for loss or damage to such concentrate occurring after removal by the Contractor of rejected concentrate or after ten (10) days from the date of receipt by the Contractor of notice of final rejection by the Commission of the concentrate in accordance with paragraph 3 above, whichever date first occurs.

ARTICLE IV-PACKAGING

1. Uranium concentrate delivered under this contract shall be packaged by the Contractor as provided in Appendix B hereof.

2. Containers in which the concentrate is delivered hereunder shall be supplied by the Contractor and shall become the property of the Commission upon delivery to and acceptance of the concentrate by the Commission.

ARTICLE V-PAYMENTS

1. For all uranium concentrate produced in the Contractor's pilot plant and delivered to and accepted by the Commission, in accordance with Article III hereof, the Commission shall pay to the Contractor (subject to the provisions of paragraph 2 of this Article relating to interim and final payments) a price of Eight Dollars ($8.00) per pound of contained U2O..

2. An interim payment equivalent to ninety percent (90%) of the price per pound, as provided in paragraph 1 of this Article, shall be made promptly by the Commission to the Contractor upon the delivery of each lot of uranium concentrate and upon receipt by the Commission of the Contractor's properly certified invoice. This payment shall be based upon the Contractor's own statement of the weight of the contained U2O, in uranium concentrate delivered. The balance due the Contractor for each lot of uranium concentrate delivered to and accepted by the Commission shall thereafter be determined by the Commission upon receipt of the Contractor's properly certified invoices, together with such substantiating evidence as may be satisfactory to the Commission, after completion of the weighing, sampling, and analysis of the uranium concentrate as provided for in Article II of this contract. Final payment of the amount thus determined to be due to the Contractor for each lot of uranium concentrate shall thereupon be made promptly by the Commission; provided, that if as a result of such weighing, sampling, and analysis it is determined that the interim payment made to the Contractor by the Commission exceeds the total amount due, the amount of such overpayment shall be refunded by the Contractor to the Commission or applied in the reduction of amounts otherwise due the Contractor, as the Commission may direct.

ARTICLE VI-CONTRACTOR'S ORE RESERVE DATA

The Contractor agrees to make available to the Commission upon the Commission's request during the term of this contract, all uranium ore reserve data on lands in the United States and its territories which are or may be owned or controlled by the Contractor.

ARTICLE VII-NONDISCRIMINATION

In connection with the performance of work under this contract, the Contractor agrees not to discriminate against any employee or applicant for employment because of race, religion, color, or national origin. The aforesaid provision shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Contractor agrees to post hereafter in conspicuous places, available for employees and applicants for employment, notices to be provided by the Contracting Officer setting forth the provisions of the nondiscrimination clause.

The Contractor further agrees to insert the foregoing provision in all subcontracts hereunder, except subcontracts for standard commercial supplies or raw materials.

ARTICLE VIII-COVENANT AGAINST CONTINGENT FEES

The Contractor warrants that no person or selling agency has been employed or retained to solicit or secure this contract upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by the Contractor for the purpose of securing business. For breach or violation of this warranty, the Government shall have the right to annul this contract without liability or, in its discretion, to deduct from the contract price or consideration the full amount of such commission, percentage, brokerage, or contingent fee.

ARTICLE IX-TAXES

1. Except as otherwise expressly provided herein, the contract price is deemed to include all Federal, State, and local taxes (including fees and charges), which would be payable in respect of this contract if no interest of the Federal Government were involved. The Contractor agrees to furnish the Commission with such information as to its payment or nonpayment of any such taxes as the Commission may request.

2. The Contractor agrees to credit toward payment of the contract price or to pay to the Commission the amount of any such Federal, State, or local tax which, in consequence of a constitutional or statutory immunity or exemption under Federal, State, or local law based upon the direct or indirect relationship of the subject matter of this contract to the Atomic Energy Commission or the United States of America (hereinafter referred to as a "precluded tax"), is either not paid or, if paid, is refunded, rebated, or credited for the benefit of the Contractor. Credits or payments of such amounts shall include any interest paid or credited to the Contractor but shall be reduced by all reasonable expenses, including attorneys' fees, incurred by the Contractor with the approval of the Commission in connection with the taxes exempted, refunded, rebated, or credited.

3. The Commission reserves the right to direct that exemption shall be sought with respect to any tax which it may designate as a precluded tax. In such case, the Contractor shall—

a. assert exemption from the tax to the appropriate taxing authority and submit to such taxing authority any tax exemption certificate or similar evidence of exemption with respect to the tax in question furnished by the Commission;

b. in the event of the refusal of the taxing authority to grant the exemption, promptly notify the Commission of such refusal and if authorized by the Commission, pay the tax, taking all necessary action to preserve rights to refund thereof;

c. in the event of such payment, take all necessary action to secure refund of the tax for the benefit of the Commission or, at the Commission's request, to permit the Commission to join with the Contractor in any proceedings for the recovery of the tax or to sue for the recovery in the Contractor's name (it being understood that the Commission will reimburse the Contractor for all reasonable expenses, including attorneys' fees, incurred by the Contractor with the approval of the Commission in seeking recovery of the tax.)

ARTICLE X-CONVICT LABOR

In connection with the performance of work under this contract, the Contractor shall not employ any person undergoing sentence of imprisonment at hard labor.

ARTICLE XI-OFFICIALS NOT TO BENEFIT

No member of or delegate to Congress or resident commissioner shall be admitted to any share or part of this contract or to any benefit that may arise therefrom, but this provision shall not be construed to extend to this contract if made with a corporation for its general benefit.

ARTICLE XII-DISPUTES

Except as otherwise provided in this contract, any dispute concerning a question of fact arising under this contract which is not disposed of by agreement shall be decided by the Contracting Officer, who shall reduce his decision to writing and mail or otherwise furnish a copy thereof to the Contractor. Within thirty (30) days from the date of receipt of such copy, the Contractor may appeal by mailing or otherwise furnishing to the Contracting Officer a written appeal addressed to the Commission, and the decision of the Commission shall, unless determined by a court of competent jurisdiction to have been fraudulent, arbitrary, capricious, or so grossly erroneous as necessarily to imply bad faith, or is not supported by substantial evidence, be final and conclusive; provided, that if no such appeal to the Commission is taken, the decision of the Contracting Officer shall be final and conclusive. In connection with any appeal proceeding under this clause, the Contractor shall be afforded an opportunity to be heard and to offer evidence in support of its appeal. Pending final decision of a dispute hereunder, the Contractor shall proceed diligently with the performance of the contract and in accordance with the Contracting Officer's decision.

ARTICLE XIII-BUY AMERICAN ACT

The Contractor agrees that there will be delivered under this contract only such unmanufactured articles, materials, and supplies (which term "articles, materials, and supplies" is hereinafter referred to in this clause as "supplies") as have been mined or produced in the United States, and only such manufactured supplies as have been manufactured in the United States substantially all from supplies mined, produced, or manufactured, as the case may be, in the United States. The foregoing provisions shall not apply (i) with respect to supplies exempted by the Commission from the application of the Buy American Act (41 U. S. C. 10a-d), (ii) with respect to supplies for use outside the United States, or (iii) with respect to the supplies to be delivered under this contract which are of a class or kind determined by the Commission not to be mined, produced, or manufactured, as the case may be, in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality, or (iv) with respect to such supplies from which the supplies to be delivered under this contract are manufactured, as are of a class or kind determined by the Commission not to be mined, produced, or manufactured, as the case may be, in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality, provided, that this exception (iv) shall not permit delivery of supplies manufactured outside the United States if such supplies are manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality.

ARTICLE XIV-EXAMINATION OF RECORDS

1. The Contractor agrees that the Commission and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to and the right to examine any directly pertinent books, documents, papers, and records of the Contractor involving transactions related to this contract until the expiration of three years after final payment under this contract.

2. The Contractor further agrees to include in all his subcontracts hereunder a provision to the effect that the subcontractor agrees that the Comptroller General of the United States or any of his duly authorized representatives shall