C. If the Contractor determines that irradiated reactor material delivered by the Commission is non-specification material after commencement of mechanical or chemical treatment of such material by the Contractor and prior to the time specified in Article VIII A., the Contractor shall promptly notify the Commission and shall as soon as practicable furnish an estimate of (1) the additional costs which will be incurred by the Contractor to complete chemical processing of the material and to provide for storage, disposal and perpetual care of any waste, and (2) the cost of such other disposition as the Commission may request. The Commission shall thereupon direct the Contractor either to complete chemical processing or otherwise dispose of the material, under such other terms and conditions as the parties may agree upon, and an equitable adjustment will be made in the charges otherwise payable hereunder. Failure to agree on such an equitable adjustment shall be subject to the provisions of Article XLVIII. The Contractor may, if it determines in its sole discretion such disposition is necessary for reasons of health and safety, discharge any material determined by the Contractor to be non-specification material into the Contractor's waste tanks, provided that if such material is subsequently determined to be specification material in accordance with the provisions of Article XXXI or XLVIII the Contractor shall be responsible to the Commission for the value of the uranium and plutonium contained in such material as determined in accordance with Article XXX.

The

D. The Commission represents that all material delivered by it for chemical processing shall be specification material and agrees to indemnify and hold the Contractor harmless against any and all losses, damages, and expenses suffered or incurred by the Contractor as a proximate result of such material being non-specification material. Commission's maximum liability under the indemnity contained in the preceding sentence shall be limited to $500,000 for any one incident, provided that nothing in the foregoing provisions of this Article VIII D. shall be deemed to limit the Contractor's rights, if any, in the event of negligence by the Commission. The Commission shall have no liability

to the Contractor for any loss or damage arising out of the delivery of non-specification material to the extent that the Contractor possesses insurance to cover such loss or damage, or any self-insurance reserve, or if such loss or damage would have been covered by such insurance as is set forth in Article XXIX, if the Contractor had maintained such insurance in force and effect, or insurance which the Contractor is required to maintain by law. Nothing contained in this contract shall in any way affect or limit the Contractor's rights under any indemnity agreement executed by the Commission pursuant to section 170 of the Act. ARTICLE IX

WASTE; DISCLAIMER BY COMMISSION; PERPETUAL MAINTENANCE

A. The Contractor shall provide, as part of its services under this contract for the Commission and others, for the storage, disposal and perpetual maintenance of all waste generated by the Contractor during

the term of any contract executed pursuant to Article XIII, as well as under this contract. Title to all materials contained in waste which was previously Government-owned (except material which is required by section 52 of the Act to be owned by the Government) shall be deemed to be vested in the Contractor. The Government shall have no right to the recovery of any materials contained in waste nor any credit for their potential value. The amounts payable to the Contractor under this contract include all charges for storage, disposal and perpetual maintenance of waste generated from the chemical processing of specification material delivered to the Contractor by the Commission under this contract.

B. It is recognized by the parties that certain waste could constitute a hazard to the health and safety of the public for the indefinite future, unless such waste is perpetually maintained in accordance with applicable federal and state laws and regulations, including regulations of the Commission. Accordingly, and in recognition of the inherent limitations on the Contractor's ability to assure perpetual maintenance of waste, the Contractor has executed an agreement with the New York State Atomic Research and Development Authority, a public corporation of the State of New York, dated as of May 15, 1963, a copy of which has been furnished to the Commission, which provides for the perpetual maintenance of such waste in accordance with applicable federal and state laws and regulations, including regulations of the Commission. In the event the agreement between the Contractor and the New York State Atomic Research and Development Authority shall terminate, expire or otherwise cease to be in full force and effect, the Commission may, in addition to any other rights it may possess, terminate this contract without liability of the Commission to the Contractor, unless the Contractor otherwise adequately provides for the perpetual maintenance of such waste in a manner satisfactory to the Contracting Officer; provided, however, that if said agreement shall terminate, expire or otherwise cease through no fault of the Contractor, the Commission's sole remedy shall be the right to terminate this contract without liability of the Commission to the Contractor.

ARTICLE X CONTAINERS

A, All containers in which material is delivered by the Commission to the Contractor hereunder shall meet the requirements of Appendix B hereof and all applicable federal laws and regulations. Unless otherwise agreed, Commission-furnished containers in which material is delivered to the Contractor shall be returned to the Commission, f.o.b. commercial conveyance at the Plant, within 4 days after delivery to the Contractor (exclusive of a reasonable time required for repairs), provided that such containers are delivered in accordance with the delivery schedule established hereunder. In the event that Commission-furnished containers are not delivered in accordance with the delivery schedule established

hereunder the Contractor shall return such containers within a reasonable time. The Contractor shall perform routine decontamination (as defined in Appendix B) and repair of containers without charge to the Commission, and shall repair, or reimburse the Commission for damage to Commissionfurnished containers caused by the Contractor. It is the understanding of the parties that instances of contamination outside the limits set forth in Appendix B, shall be subject to the provisions of Article XVII, provided that "equitable adjustment" as used in Article XVII shall not exceed the Contractor's direct labor and material costs involved. The Contractor may agree to perform major repair of containers upon mutually agreeable terms and conditions.

B. Delivery of all materials by the Contractor to the Commission shall be made in Contractor-furnished containers meeting the approval of the Contracting Officer and the requirements of all applicable federal and state laws and regulations, including regulations of the Commission. The Commission shall have the right not to accept delivery of material in any container which does not meet the requirements set forth in this Article X B. Unless otherwise agreed, Contractor-furnished containers of the bird-cage type shall be returned to the Contractor, f.o.b. commercial conveyance at the Plant, within 45 days after delivery to the Commission (exclusive of a reasonable time required for repairs). Unless otherwise agreed, Contractor-furnished containers of the tank type designed for transporting by motor vehicle shall be returned to the Contractor, f.o.b. commercial conveyance at the Plant, within 20 days after delivery to the Commission (exclusive of a reasonable time required for repairs). The Commission shall repair, or reimburse the Contractor for, damage to Contractor-furnished containers caused by the Commission.

SPECIAL PROVISIONS APPLICABLE TO CHEMICAL PROCESSING OF
SMALL PROCESSING LOTS; COMBINED PROCESSING LOTS -

A. Notwithstanding any provision to the contrary in this contract, the Contractor agrees to chemically process each small processing lot under the special provisions set forth in this Article XI. Except in the case of conflict with this Article XI, all other terms and conditions of this contract shall apply to the chemical processing of small processing lots.

B. As used in this Article XI, the term "small processing lot" means a processing lot with respect to which W/P is less than 8.

C. In addition to the charges set forth in Article VI A.(2), VI A. (3), VI A.(4) and VI A.(5), if any or all are applicable, the Commission shall pay the following Processing Charge in lieu of that set forth in Article VI A.(1), for work performed by the Contractor hereunder for each small processing lot: (i) (W/P) (C plus I) plus (W/P) (T:), where W/P is more than 2 but no more than 8; and (ii) [(W/P) (Ĉ plus I)] plus 2 T1, where W/P is 2 or less. The terms W, P,

C, and I as used in this Article XI shall have the same meanings as given them in Article VI and Appendix A. The term T1, as used herein, shall mean $23,500. The terms W, P and (W/P) shall be carried to the nearest hundredth of an integer. The term T1 shall be determined to the nearest dollar. Uniform rounding practice shall be followed.

D. The Contractor shall not be obligated to chemically process small processing lots in accordance with this Article XI, in any one processing year after the aggregate reduction in the revenue of the Contractor during such processing year, resulting from the application of the special charge provided in this Article XI to small processing lots chemically processed for the Commission, and equivalent batches chemically processed for licensees of the Commission and others, as compared with the application of the charge set forth in Article VI, equals $587,500, excluding any adjustments under Articles XIV and XXVI. The Contractor's aggregate reduction in revenue shall be determined independently for each processing year.

E. Delivery of recovered product from each small processing lot shall be made within the time periods set forth in Article IV, but only if the Contractor has time available to perform this work either because of unscheduled periods in the Plant or because some customer of the Contractor (including the Commission) agrees to defer the chemical processing of its irradiated reactor material. In any event, delivery of recovered product from each small processing lot shall be made within three years from its designation as a processing lot, or by the expiration of this contract, whichever is earlier. The Contractor shall notify the Commission at least 72 hours in advance of commencement of the initial mechanical or chemical treatment of each small processing lot.

F.. The Contractor may, without affecting the charges payable in respect of such small processing lot and unless notified to the contrary by the Commission in accordance with Article XI G., combine any small processing lot with any irradiated reactor material delivered by any customer of the Contractor (including the Commission), provided that the Contractor shall:

(1) furnish the Commission with input measurements with respect to the small processing lot exclusive of other material combined by the Contractor with such small processing lot; and

(2) remain fully responsible in accordance with Article XXX with respect to the small processing lot so combined.

G. If the Commission notifies the Contractor not to combine a small processing lot with other irradiated reactor material, such small processing lot shall no longer be subject to the provisions of

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:

(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

I. 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..

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;