The

B. The turnaround charge shall be correspondingly adjusted. component of all other amounts payable by the Commission during such period which corresponds to Processing Charges (exclusive of incremental charges) for specification material shall also be correspondingly adjusted. All adjusted charges subject to escalation shall thereafter be further adjusted as provided in Article XIV. The Contractor will repay to the Commission amounts due by reason of any adjustment provided for in this Article promptly after the close of the period in question.

ARTICLE XXVII - INTERNATIONAL SAFEGUARDS

The parties recognize that the Government may enter into international agreements with the International Atomic Energy Agency, EURATOM, or others which may provide for safeguards inspections, inventories and other procedures (hereinafter in this Article XXVII referred to as "safeguards") applying to certain source and special nuclear material in the United States. In the event such international agreements are consummated, and the Contractor processes such materials, the Contractor agrees that it will comply with the safeguards. To the extent such safeguards are no more stringent than those which would be required under the Commission's nuclear materials management control system, as set forth in or referred to in Article XXX, then the Contractor will not make any extra charge to the Commission or others with whom it may execute contracts pursuant to Article XIII, on account of such safeguards.

The amount of funds currently obligated by the Government for payments under this contract is $6,950,000. This Article shall not in any way limit the amounts due the Contractor under this contract.

ARTICLE XXIX INSURANCE

A. The Contractor will maintain such insurance as is required by law, and insurance coverage for property damage (including coverage for damage to property of others located at the Plant and, if and to the extent available at reasonable costs, for loss of use and occupancy) and for third party liability arising out or resulting from the operation of the Plant, of the character and in the amounts specified below:

B. The Contractor will use its best efforts to ensure that the NELIAMAELU and NEPIA-MAERP insurance policies carried will be the standard forms in effect as of the date irradiated reactor material is first introduced into the Plant as the same may be amended from time to time.

ARTICLE XXX

A.

ACCOUNTABILITY AND CONTROL OF MATERIAL; RESPONSIBILITY OF

CONTRACTOR FOR LOSS OR CONSUMPTION OF MATERIAL

Except as otherwise provided in Article IX, title to all irradiated reactor material delivered to the Contractor by the Commission shall at all times be and remain in the Government.

B. The Contractor shall comply with all reasonable requirements and instructions of the Commission relative to the control of and accounting for source and special nuclear material delivered to the Contractor by any customer (including the Commission) and will permit the Commission to make such reasonable inspections, and to take such reasonable inventories, of any such material as the Commission may require. The Contractor will submit such transfer documents covering receipts and shipments, reports of loss or consumption, and inventory, with respect to such source and special nuclear material as the Commission may reasonably prescribe, and shall maintain and make available to the Commission for inspection, upon reasonable notice, adequate records pertaining to the receipt, possession, transfer, or use of such material.

C. Whenever this contract has expired or been terminated by the Commission and the Contractor shall have failed, within 120 days of the date the Contractor is notified in writing of the expiration or termination of this contract (such notification containing a request to return material in the Contractor's possession), to return, f.o.b. commercial conveyance at the Plant, or pay for any uranium and/or plutonium contained in irradiated reactor material delivered by the Commission to the Contractor hereunder (hereinafter in this Article XXX referred to as "Government-delivered uranium and/or plutonium"), as provided herein, the Contractor shall afford the Commission access to the Contractor's premises to repossess the material subject to this contract. The Contractor shall pay to the Commission the Commission's full cost of such repossession, as determined in accordance with established Commission pricing policy in effect at the time of such repossession.

Do

The Contractor shall physically segregate Government-delivered uranium and/or plutonium from other uranium and/or plutonium in the Contractor's possession, prior to the commencement of mechanical or chemical treatment (whichever occurs first) of such Government-delivered uranium and/or plutonium. The Contractor shall physically segregate material resulting from the chemical processing of Government-delivered uranium and/or plutonium from other uranium and/or plutonium in the Contractor's possession. The Contractor shall not blend uranium or plutonium other than uranium or plutonium delivered by other customers for chemical processing, with Government-delivered uranium and/or plutonium. As used in this Article XXX D., the term "physically segregate" shall mean to segregate in a manner which will permit the ready identification and removal from storage of Governmentdelivered uranium and/or plutonium.

E. Subject to the provisions of paragraph H. of this Article, the Contractor shall be responsible to the Commission for any loss or consumption of Government-delivered uranium and/or plutonium, from the time of delivery of such material to the Contractor by the Commission until it has been re-delivered to the Commission by the Contractor, but only if such loss or consumption (i) was a proximate result of an act or acts of the Contractor, or of the Contractor's negligent failure to act; or (ii) was actually covered by insurance, or any self-insurance reserve, or would have been covered by the insurance which the Contractor is required under Article XXIX to maintain.

F. In reporting uranium and/or plutonium lost or consumed, the Contractor shall make reasonable efforts to fix accurately the time of the loss or consumption on the basis of a specific occurrence, provided that the Contractor need not fix the time of loss or consumption in the course of mechanical or chemical treatment in accordance with this contract, The Contractor's reports to the Commission shall reflect all losses or consumption of uranium and/or plutonium then known to the Contractor. Subject to the provisions of Article XXXI, disagreement between the Commission and the Contractor as to whether Government-delivered uranium and/or plutonium has in fact been lost or consumed, or as to the time any such loss or consumption occurred, shall be subject to the provisions of Article XLVIII. The Contractor shall promptly pay the Commission for any loss or consumption of Governmentdelivered uranium and/or plutonium for which it is responsible under this Article XXX, subject to the provisions of paragraph H. hereof.

G. Subject to the provisions of paragraph H. of this Article XXX, the amount due the Commission for Government-delivered uranium and/or plutonium lost or consumed, shall be the value of such material at the time of the loss or consumption. In computing the value of Government-delivered uranium and/or plutonium prior to completion of input measurements, the quantities shown on the Commission's transfer form accompanying delivery of the material to the Contractor shall govern, provided that in the event of loss or consumption prior to completion of input measurements the estimated charges for chemical processing of such material, as provided in this contract, shall be deducted from the value so computed, In estimating the chemical processing charges it shall be assumed that the material could have been included in a processing lot in which W/P, as defined in Article VI, equaled 24 or more, unless the Commission has already designated such material as part of a processing lot in which W/P is less than 24. After completion of the input measurements such measurements shall be used in computing the value of Government-delivered uranium and/or plutonium until completion of measurement of the recovered product in which case the recovered product measurements will govern.

H. Until two years after completion by the Contractor of chemical processing of the first lot of irradiated reactor material for any customer (including the Commission), the Contractor shall be responsible for any loss or consumption of Government-delivered uranium and/or plutonium (whether or not caused by the fault or negligence of the Contractor) resulting from the chemical processing of such material but only to the extent that the value of such material lost or consumed exceeds either:

(1). 14% of the measured input value, as determined by the difference between the measured input value and the recovered product value; or

(ii) 1% of the measured input value, as determined by measured losses;

or, if both are exceeded, whichever is greater. After such two-year period, the Contractor's responsibility for the losses and consumption resulting from chemical processing will be redetermined in accordance with paragraphs M. and N. of this Article XXX. In the event of any change in the applicable base charge or the Commission's price between the time of determination of the measured input value and the time of determination of the recovered product value of any processing lot, the measured input value, recovered product value and measured losses for such processing lot shall be determined on the basis of the base charge and the Commission's price in effect at the time of determination of the measured input value of such processing lot.

I. Notwithstanding any other provisions in this contract, the amount due the Commission, and the method of payment, for loss or consumption arising out of chemical processing of Government-delivered uranium and/or plutonium in each processing lot during the two-year period referred to in paragraph H. shall be determined in accordance with the following provisions, examples of the operation of which are set forth in Appendix E:

(1). In those instances in which the value of the material lost or consumed does not exceed (i) 11⁄2% of the measured input value, as determined by the difference between measured input value and recovered product value, and does not exceed (ii) 1% of the measured input value, as determined by measured losses, the Commission's account with the Contractor shall be debited an amount equivalent to the smaller of (i) the difference between 1% of the measured input value and the measured losses or (ii) the difference between the recovered product value and 98.5% of the measured input value, except that when the recovered product value is greater than 99.0% of the measured input value and the difference between the recovered product value and 99.0% of the measured input value is greater than the difference between 1% of the measured input value and the measured losses,