this Article XI, and shall be subject in all respects to the other provisions of this contract, provided, however, that for the purposes of determining the aggregate reduction in the Contractor's revenue, referred to in Article XI D., such small processing lot shall be deemed to have been chemically processed under the special provisions of this Article XI.

H. Each small processing lot shall be equivalent to a number of revenue units determined by the following formulae:

I.

(W/P) (2), where W/P is more than 2 but no more than 8

W/P plus 2, where W/P is 2 or less

The Commission and other parties, whether or not such parties have executed contracts with the Contractor, may agree to combine specification material into a combined processing lot to be delivered under this contract, or under any other contract executed by the Contractor, provided that all the specification material in the combined processing lot falls into the same Material Category as defined in Appendix A, and provided further that the amount of any other single party's material included in such combined processing lot shall be less than 8 processing units in any processing year. Such combined processing lot shall be subject in all respects to the terms of the contract under which it is delivered. In the event of delivery to the Contractor of such a combined processing lot, the Commission and the Contractor shall agree on the amount of the Commission's specification material contained in the combined processing lot, expressed as a number of revenue units, which amount of specification material shall be deemed to have been delivered to the Contractor in accordance with Article II A. Except as expressly provided in this Article XI, the Commission may not include in a combined processing lot material of the Commission required to be delivered under Article II hereof with material of any other party.

J. Nothing in paragraphs A through H of this Article XI shall apply to the chemical processing of irradiated reactor material which falls into Material Category 3.

ARTICLE XII SERVICES OTHER THAN CHEMICAL PROCESSING

It is the intention of the parties hereto that, in lieu of the services provided for in Article II hereof, the Commission may request that the Contractor perform at the Plant other services, including but not limited to the following:

Recovery of material other than uranium and plutonium,
including fission products;

(i)

(ii)

Laboratory work involving radioactive materials;

In such event the parties hereto agree to negotiate in good faith to arrive at a separate agreement for the performance of such services. It is the intention of the parties that included in such agreement shall be an equitable reduction in the amount of specification material, expressed as a number of revenue units, which the Commission is obligated to deliver to the Contractor, and the Contractor is obligated to chemically process, under Article II A. (1) hereof. Such agreement shall also establish the amount, if any, of the charges payable under this Article XII to be included in the amounts payable to the Contractor for the purposes of Article XXVI. Any such agreement shall equate the charges for chemical processing of an amount of specification material with the charges for the service to be performed in accordance with this Article.

ARTICLE XIII

PROVISIONS APPLICABLE TO CHEMICAL PROCESSING FOR PERSONS OTHER
THAN THE COMMISSION

A. The Contractor agrees to offer, during the term of this contract, chemical processing services which are within the capability of the Plant, to financially responsible licensees of the Commission and others, at charges and upon terms and conditions which, taken as a whole, are no less favorable than those contained in any contract in effect as of the date of the offer between the Contractor and any of its customers other than the Commission.

B. The Contractor agrees to include in any offer made pursuant to Article XIII A, charges and other terms and conditions no less favorable than the Commission possesses under Article XI.

C. The Contractor shall not make any charge for storage of irradiated reactor material delivered by any customer for chemical processing during the term of the customer's contract with the Contractor to the extent such customer does not require storage at any one time of more than 8 processing units of irradiated reactor material.

D. For breach by the Contractor of any of the provisions of this Article XIII, the Commission may, in addition to any other rights it may possess under this contract, elect not to designate for chemical processing under this contract an amount of specification material, expressed as a number of revenue units, equivalent to the quantity of irradiated reactor material with respect to which the Contractor has breached this Article.

E. The Commission shall have no obligation to pay any of the charges or perform any of the other obligations called for under any of the contracts for chemical processing which the Contractor may execute with Commission licensees, or others, and such contracts shall not in any way bind the Government.

A. The Contractor represents that the charges set forth in this contract do not include any contingency allowance to cover the possibility of increased costs of performance resulting from increases in either (i) the Contractor's rates of pay for labor employed by him or (ii) the prices which the Contractor is required to pay for material.

B. As used herein the following terms shall have the following

meanings:

(1) The term "labor index" shall mean the hourly straight-
time rate of production workers in manufacturing
industries in the Buffalo, New York, area, derived
from the average "gross hours and earnings of
production workers on manufacturing payroll, by
State and selected areas" in the Buffalo, New York,
area, as published by the Bureau of Labor Statistics,
U. S. Department of Labor, in "Employment and
Earnings".

(2) The term "commodity index" shall mean the wholesale
price index for "All Commodities other than Farm and
Foods", determined by reference to "Wholesale Prices
and Price Indexes" published by the U. S. Department
of Labor.

C. Beginning on the first day of the month following six full months after the date of commencement of mechanical or chemical treatment (whichever occurs first) of the first processing lot delivered by the Commission to the Contractor hereunder, and every 6 months thereafter, the basic charge for chemical processing (C) and the turn-around charges (T) and (T1) referred to in Article VI and Article XI (but not the other charges referred to in Article VI and Article XI) in effect on the date of this contract shall be adjusted prospectively as follows:

(1) Each of such charges shall be increased or decreased
by $14.06 for each full cent by which the arithmetic
average of the labor indices for the preceding six
months exceeds or is less than the labor index for
June, 1963.

(2) Each of such charges shall be increased or decreased by $46.63 for each full point (1.0) by which the arithmetic

average of the commodity indices for the preceding six
months exceeds or is less than the commodity index for
June, 1965.

Each such semiannual adjustment shall be independent of prior adjustments.

D. Any average of the above indices shall be determined to the same number of significant figures as stated in the appropriate index for the monthly values. Uniform rounding practice shall be followed. It is expressly understood by the parties that the U. S. Department of Labor issues preliminary price indices subject to later or final revised figures. To simplify accounting and obviate adjustment of billings, the parties shall accept as final the appropriate price index as published for the first time following its original publication.

E. No more than one-half of any increase in any charge resulting from the foregoing escalation provisions shall be payable by the Commission at any time unless the Contractor shall have delivered to the Commission a certificate of the independent certified public accountants regularly retained by the Contractor showing in reasonable detail that the net income of the Contractor after taxes for the period from the date of the beginning of commercial operations to the end of the Contractor's preceding fiscal year, from the Plant, averaged less than $900,000 annually, or, if the equity portion of the capitalization of the Contractor was less than one-third of such capitalization during any part of such period, then such amount as would have resulted in net income after taxes averaging $900,000 annually had such equity portion been increased to one-third of such capitalization. In that event, the foregoing escalation provisions shall be applied to the extent necessary to reach the average annual level of $900,000.

F. The adjusted charges will be rounded to the nearest dollar using uniform rounding practice.

G. The Contractor will advise the Commission in writing not later than 30 days following the publication of the appropriate index of any adjustments in the charges determined upon the basis of this Article XIV, and the computation thereof.

H. The basic charge for chemical processing (C) and the turnaround charge (T and T1) in effect at the time of commencement of mechanical or chemical treatment of any processing lot shall govern with respect to such processing lot notwithstanding any adjustment as provided in this Article XIV.

I. The accumulated increases in any charge made under this contract shall not exceed 20 per cent of the corresponding original charge set forth in Article VI and Article XI.

J. Failure of the parties to agree upon a charge adjustment pursuant to the provisions of this Article XIV shall be subject to the provisions of Article XLVIII. Pending a determination under such Article of any charge adjustment under this Article XIV the Contractor shall continue performance hereunder.