6. a. In addition to payments of the base price per pound of U308 in uranium concentrate as provided in paragraph 1 of this Article, the Commission shall pay to the Contractor for each pound of such U308 in concentrate delivered to and accepted by the Commission hereunder, the sum of eighty-two cents ($0.82); provided, that the total aggregate amount of such payments as of each anniversary date of the effective plant date shall not exceed One Million Nine Hundred Ten Thousand Dollars ($1,910,000.00) for each year and pro rata for parts of a year subsequent to the effective plant date, and provided further, that the total aggregate sum of all such payments for U308 in concentrate delivered by the Contractor prior to April 1, 1962, and purchased by the Commission hereunder, shall not exceed an amount determined by dividing the amount of the Contractor's applicable investment in plant and equipment, as determined in accordance with subparagraphs 6.b. and 6.d. of this Article or Nine Million Five Hundred Forty-five Thousand Dollars ($9,545,000.00), whichever is less, by sixty (60) and multiplying the quotient thus obtained by the number of months contained in that period from the effective plant date to and including March 31, 1962. Should the eighty-two cents ($0.82) multiplied by the number of pounds of U30g delivered and paid for hereunder equal the amount thus determined at any time prior to April 1, 1962, the payment of eighty-two cents ($0.82) for each such pound of contained U308 provided for in this paragraph shall no longer be payable by the Commission to the Contractor unless the Commission should fail to exercise its option to limit the number of pounds of U308 to be delivered under the provisions of this contract after March 31, 1962, to the maximum quantity provided for in paragraph 3 of Article I of this contract, in which case such payments of eightytwo cents ($0.82) per pound of contained U308 in uranium concentrate purchased hereunder shall be made for U308 delivered and accepted

hereunder and paid for under the provisions of paragraph 1 of this Article, on which such payments have not been made, provided, that should the total amount of all such payments at any time equal the Contractor's applicable investment in plant and equipment as determined in accordance with subparagraphs 6.b. and 6.d. of this Article, or Nine Million Five Hundred Forty-five Thousand Dollars ($9,545,000.00), whichever is less, such payment of eighty-two cents ($0.82) per pound of contained U308 shall no longer be payable by the Commission hereunder.

b. For the purposes of this contract, the amount of Contractor's applicable investment in plant and equipment shall consist of (1) a fixed and agreed-upon sum of Two Hundred and Twenty-five Thousand Dollars ($225,000.00) as an agreed amount in lieu of actual expenditures by the Contractor for those items listed in Appendix "E" to this contract, (2) all allowable direct and indirect costs incurred by the Contractor for all labor, material, supplies, and equipment incorporated in the plant and (3) all costs of construction of facilities to supply water, electric power at the plant, gas, and other related and auxiliary facilities installed prior to a date six months subsequent to the effective plant date, provided, that the total of the sums of (1), (2), and (3) above shall not, for purposes of this contract, exceed Nine Million Five Hundred and Forty-five Thousand Dollars ($9,545,000.00). The Contractor's applicable investment in plant and equipment shall not include (1) any amount for land, (2) any amount for plant facilities installed principally for handling and storage, treatment, or recovery of any constituent of the ore fed to process in the plant other than uranium, (3) cost incurred for facilities installed after the date six months subsequent to the effective plant date, (4) employee housing, (5) any amount in excess of Sixty-five Thousand Dollars ($65,000.00) for electric power supply to the plant, including transmission lines and substation but excluding plant distribution system and (6) any of the unallowable costs as provided in Appendix "A" which is attached hereto and made a part hereof.

C. Should the Contractor fail to complete construction work for the plant, including engineering, plant water system, and designing, in the amount of not less than Nine Hundred Fifty Thousand Dollars ($950,000.00), by December 31, 1957, the Commission may, by notice in writing to the Contractor, terminate this contract without cost or obligation on the part of either the Contractor or the Commission. During the period of plant construction, the Contractor shall submit to the Commission a monthly report of construction work in progress by major plant components or, in lieu thereof, a copy of the construction contractor's monthly progress report together with the costs incurred to date.

d. Within nine months subsequent to the effective plant date, the Contractor shall submit to the Commission a certified statement setting forth in reasonable detail by major plant components and as determined by use of generally accepted accounting principles acceptable to the Commission and consistently applied, the cost incurred by the Contractor as of the period ending six months subsequent to the effective plant date for the applicable investment in plant and equipment. After receipt of the Contractor's certified statement by the Commission, the Commission shall audit the Contractor's records pertaining to investment in plant and equipment for purposes of determining the sufficiency and accuracy of the Contractor's certified statement, making such corrections or adjustments as may be appropriate. In the event of disagreement between the Contractor's statement and the Commission's audit and the parties are not otherwise able to reach agreement thereon, the matter shall be determined in accordance with the provisions of Article XIV of the contract entitled "Disputes." The Contractor's certified statement of applicable investment in plant and equipment as adjusted or corrected as a result of the Commission's audit will be the dollar value of the Contractor's applicable investment in plant and equipment for purposes of subparagraphs a. and b. of this paragraph. Prior to the submission to the Commission of its statement of applicable investment, the Contractor and the Commission shall as a matter of fact agree upon the fair market value of all surplus and excess property originated in the construction of the plant and such fair market value shall be applied in reducing the said applicable investment to be amortized hereunder.

7. An interim payment equivalent to ninety-five percent (95%) of the total price per pound, as computed in accordance with paragraphs 1, 3, and 6.a., or in accordance with paragraph 2 of this Article, as the case may be, 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 U308 in uranium concentrate delivered as derived from the Contractor's own preliminary assay and upon the Contractor's own estimate of the quarterly weighted average percent of contained U308 in ore fed to process in the plant for the calendar quarter during which the uranium concentrate was produced. 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, and after determination of the quarterly weighted average percent of contained U308 in ore fed to process as provided for in Article VI 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, analysis, and determination of the quarterly weighted average percent of contained U308 in ore fed to process, 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.

8. The base price per pound of U308 specified in paragraph 1 of this Article V for U308 in concentrate delivered to and accepted by the Commission hereunder prior to April 1, 1962, was arrived at upon the assumption that the prices for the U308 content of ore, together with premiums and allowances established by the Commission in its Domestic Uranium Program Circular 5, Revised, effective March 1, 1951, would continue in effect during the period ending March 31, 1962. In the event that during such period the Commission increases such prices, premiums, or allowances for uranium ore delivered under the Commission's Domestic Uranium Program Circular 5, Revised, it is agreed that on all uranium ore which the Contractor feeds to process in the plant prior to April 1, 1962, the Commission (a) will reimburse the Contractor for actual increase in the cost of such uranium ore delivered by other producers to the plant up to the amount of such increase; and (b) will pay to the Contractor with respect to such uranium ore produced from Contractor-controlled properties, an amount per ton which represents the difference between the value of such ore calculated on the basis of prices and allowances in the Commission's Domestic Uranium Program Circular 5, Revised, and payment for such ore calculated on the basis of the increased payment provisions. Such reimbursements or payments shall be applicable only to ore delivered to the plant on or after the effective date of any such increase and shall continue in effect during the term of such increase or until March 31, 1962, whichever occurs first. Amounts payable by the Commission under this provision shall be paid monthly upon receipt by the Commission of a certified statement giving by separate entries the tonnage and assays of all such ore from independent producers and from Contractor-controlled properties fed to process in the plant and the dates upon which such ore is received at and fed to process in the plant, together with a calculation of the amounts due the Contractor under this Article. As a basis for verification of amounts claimed under this paragraph, the Commission shall have the right to audit the Contractor's records relating to receipts of ore, assays, and payment to producers. Should the Contractor dispose of uranium concentrate produced from ore on which it has received payments under this paragraph to persons not a party to this contract, the amount of such payments shall be refunded to the Government or applied in the reduction of amounts otherwise due the Contractor, as the Commission may direct.

9. The base price per pound for contained U308 in uranium concentrate, as specified in paragraph 1. of this Article V, is based on a maximum haulage distance of ten (10) road miles for ore fed to process in the plant.

In the event that prior to April 1, 1962, the Contractor treats ore in the plant produced from properties located at a distance in excess of ten (10) road miles from the plant, or ores acquired from Commissionowned stockpiles located more than ten (10) road miles from the plant, the Commission will reimburse the Contractor, as follows:

a. If such ores are fed directly to process when received and sampled at the plant, the Commission will, upon receipt of certified invoices, pay to the Contractor six cents ($0.06) per ton mile for the distance such ore was transported from the mine, or Commissionowned stockpiles, to the plant, which is in excess of ten (10) road miles but not in excess of one hundred (100) road miles from the mine or stockpile to the plant.

b. If such ores are not fed directly to process in the plant, it is agreed that such ores will be stockpiled separately from ores acquired by the Contractor from within a distance of ten (10) road miles of the plant. Such ores shall not be removed from any stockpile for processing in the plant until such stockpile is closed. At such time as the ores are fed to process in the plant, the Commission shall, upon receipt of certified invoices, reimburse the Contractor, as provided in subparagraph a. above, on the basis of the average excess haulage per ton of ore in the stockpile from which removed, subject to adjustment at such time as all the ore in each such stockpile has been fed to process to reflect the actual amount of such excess haulage costs computed on the basis of delivered natural weights as provided in subparagraph a. above.

Amounts payable by the Commission under this provision shall be paid monthly upon receipt of the Contractor's properly certified invoices, together with such substantiating evidence as the Commission may require as to (1) the number of tons of such ores subject to excess haulage that were fed directly to process, and the excess haulage costs thereof calculated on the basis as set forth in subparagraph a. above; and (2) the number of tons of ore subject to excess haulage fed to process from separate stockpiles of ore and the average haulage cost per ton of ore in each such separate stockpile calculated on the basis of subparagraph b. above, and the amount of the reimbursement requested hereunder.

As a basis for verification of amounts due under this paragraph, the Commission reserves the right 1) to audit the Contractor's records pertaining to receipts of ore and the payment and calculation of haulage allowances, 2) to check distances from the plant site to mining properties or Commission-owned stockpiles located at a distance in excess of ten (10) road miles from the plant site, and 3) to make such corrections or adjustments as may be appropriate.

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