CONTRACT NO. AT-(40-1)-1032

THIS CONTRACT, entered into this 5th day of June, 1950, by
the UNITED STATES OF AMERICA (hereinafter called the "Government"), acting
through the UNITED STATES ATOMIC ENERGY COMMISSION (hereinafter called the
"Commission"), and the CONSOLIDATED UNIVERSITY OF NORTH CAROLINA, Chapel Hill,
North Carolina (hereinafter called the "Contractor"),

WITNESSETH THAT, the parties hereto do mutually agree as follows:

ARTICLE I - PURPOSE AND SCOPE

1. The Commission, in furtherance of its policy of assisting and
fostering private research relating to atomic energy, desires to encourage the
Contractor's research in the field of atomic energy, and the Contractor's plans
for the development and construction of a low-powered nuclear reactor suitable
for research operations on a university campus. It is recognized by the parties,
however, that certrain aspects of such a project will require further study and
consideration before construction of such a reactor or allocation of fissionable
materials for use in connection therewith can be approved by the Commission.

2. The immediate work hereunder shall consist of research directed
toward the preparation of the following for presentation to the Commission:

a. A detailed design of a low-powered nuclear reactor suitable
for on-campus use in university research operations primarily on an unclassi-
fied and/or declassified basis.

b. An analysis of the health and safety hazards involved in the
operation of such a reactor.

c. A suggested detailed plan of operations, including operational
procedures for the reactor, a security plan, and possible administrative pro-
cedures governing the production and distribution of isotopes.

3. The Contractor shall furnish, without cost to the Commission, all
services, facilities, equipment, supplies and materials (except such items as
may be furnished by the Government hereunder, at its election) required for the
performance of the research program described in section 2 above.

4. The work will be carried out by the Contractor under the scientific
direction of Dr. Clifford K. Beck.

ARTICLE II - TERM OF CONTRACT

The initial period of performance for the research project covered
by this contract will commence on June 15, 1950 and will end on June 14, 1951.
It is recognized that completion of the research work under this contract may
involve a longer period of time and that the term of this contract may be extended
by mutual agreement.

CERTIFIED A TRUE COPY
BY Jenks Nicholson

ARTICLE III - INFORMATION TO BE MADE AVAILABLE BY THE GOVERNMENT

In consideration of the performance of the research activities
described in Article I, the Government agrees to cooperate with the Contractor
and to make available to the Contractor such technical data (including advice
on technical and security matters by personnel of the Commission and its other
contractors) as the Commission, in its discretion, and consistent with the
requirements of national security, deems pertinent. With the Commission's
approval, arrangements may also be made for authorized personnel of the Con-
tractor to visit and inspect appropriate installations and activities of the
Commission and its other contractors.

ARTICLE IV - REPORTS, RECORDS and INSPECTION

1. The Commission shall have the right to inspect in such manner
and at such times as it deems appropriate all activities of the Contractor
arising in the course of the work under this contract.

2. Upon completion of the work described in Article I, the Contractor
shall furnish to the Commission's Office of Research and Medicine, Post Office
Box E, Oak Ridge, Tennessee, ten (10) copies of a complete report, including
the reactor design, hazard analysis, and suggested plan of operations. At such
intervals as it deems advisable, the Contractor may also furnish to the Commission
brief interim reports covering significant results or developments during the
progress of the work. Such interim reports should be made in duplicate, one
copy being sent to the Commission's Division of Research, 1901 Constitution
Avenue, N.W., Washington, D. C., the other copy being sent to the Commission's
Office of Research and Medicine at the Oak Ridge address listed above.

3. The Commission shall at all times be afforded access to the
premises and to all technical reports, correspondence, instructions, drawings,
and memoranda of record value of the Contractor pertaining to said work.

ARTICLE V - TITLE TO PROPERTY

It is the intention of the parties that the Contractor shall be and
remain the exclusive owner of all equipment, supplies, and material which it
purchases for use in connection with the performance of this contract. In the
event that the Contractor is furnished any items of equipment, supplies, or
material (including reports on technical data) by the Government for use in
connection with activities described in Article I, the Contractor shall use
same only for such purposes, and, unless otherwise directed in writing by the
Commission, shall return same to the Commission upon termination of this con-
tract. It is understood and agreed that, except as provided in Article VII,
the Contractor shall not be responsible for any loss or destruction of or damage
to any of said items of Government property except to the extent that such loss,
destruction or damage is due to the gross negligence or willful misconduct of
the corporate officers of the Contractor.

ARTICLE VI - PUBLICATIONS

The Contractor shall have full freedom of publication of the results
of the research under this contract and the Contractor is urged to disseminate
the results of the work through customary scientific publication channels,
except that "restricted data" as defined in Article VII hereof shall be governed
by the provisions of that article. All publications shall include references,
in accordance with current scientific practice, to those results which were
developed under Commission sponsored projects.

ARTICLE VII - SECURITY AND DISCLOSURE OF INFORMATION

1. While it is intended that the Contractor will, so far as possi-
ble, perform the work under this contract as unclassified work, it is understood
that performance hereunder will, in part, involve restricted data, and that in
such performance the Contractor shall, in accordance with the Commission's
security regulations and requirements, be responsible for safeguarding restricted
data and other classified matter and protecting against sabotage, espionage and
theft, the classified documents, materials, equipment, processes, etc. as well
as such other material of highly intrinsic or strategic value as may be in the
Contractor's possession in connection with the performance of work under this
contract. Disclosure of information relating to any restricted data to any
person not entitled to receive it, or failure to safeguard any restricted data
or any top secret, secret, confidential, or restricted matter that may come to
the Contractor or any person under the Contractor's control in connection with
the work under this contract, may subject the Contractor, its agents, employees,
and Subcontractors to the criminal liability under the laws of the United States.
(See the Atomic Energy Act of 1946, 60 Stat. 755, as amended, Title 42 U.S.C.
Sec. 1801 et seq. See also Title 18 U.S.C. Sec. 791 - 797 and Executive Order
No. 10,104 of Feb. 1, 1950, 15 F.R. 597.)

2. The Contractor agrees to conform to all security regulations and
requirements of the Commission. Except as the Commission may authorize, in
accordance with the Atomic Energy Act of 1946, as amended, the Contractor shall
not permit any individual to have access to restricted data until the Federal
Bureau of Investigation shall have made an investigation and report to the
Commission on the character, associations, and loyalty of such individual and
the Commission shall have determined that permitting such person to have access
to restricted data will not endanger the common defense or security. Whenever
in the course of the work hereunder any discoveries are made or any data developed
that constitute restricted data, the Contractor shall promptly inform the Commis-
sion and shall classify and safeguard all discoveries and data in accordance with
the requirements of the Commission. If doubt exists as to whether any discovery
or data developed constitute restricted data, prior to the release of these data
and before permitting any individual who has not received clearance from the
Commission to have access to such data, the Contractor shall seek guidance from
the Commission. Furthermore, the Commission reserves the right to require the

classification of work whenever in its opinion restricted data are involved.
The term "restricted data", as used in this article, means all data concerning
the manufacture or utilization of atomic weapons, the production of fissionable
material, or the use of fissionable material in the production of power, but
shall not include any data which the Commission from time to time determined
may be published without adversely affecting the common defense and security.

3. Except as approved in writing by the Commission, the Contractor
shall insert the provisions of Sections 1 and 2 of this article in all sub-
contracts, agreements with its employees, and agreements for borrowed personnel
under this contract.

ARTICLE VIII - TERMINATION

The Commission may at any time upon 120 days written notice terminate
this contract in whole or in part without liability to the Contractor.

ARTICLE IX - PATENTS

1. Whenever any patentable invention or discovery is made or con-
ceived by the Contractor or its employees in the course of any of the work
under this contract, the Contractor shall furnish the Commission with complete
information thereon; and the Commission shall have the sole power to determine
whether or not and where a patent application shall be filed, and to the determine
the disposition of the title to and rights under any application or patent that
may result. The judgement of the Commission on these matters shall be accepted
as final; and the Contractor, for itself and for its employees, agrees that the
inventor or inventors will execute all documents and do all things necessary or
proper to carry out the judgment of the Commission.

2. No claim for pecuniary award under the provisions of the Atomic
Energy Act of 1946 shall be asserted by the Contractor or its employees with
respect to any invention or discovery made or conceived in the course of any of
the work under this contract.

3. Except as otherwise authorized in writing by the Commission, the
Contractor will obtain patent agreements to effectuate the purposes of Sections
1 and 2 of the Article from all persons who perform any part of the work under
this contract, except clerical and manual labor personnel who will not have
access to technical data.

4. Except as otherwise authorized in writing by the Commission, the
Contractor will insert all subcontracts provisions making Sections 1, 2,
and 3 of this Article applicable to the subcontractor and its employees.

ARTICLE X - DISPUTES

Except as otherwise specifically provided in this contract, all
disputes which may arise under this contract and which are not disposed of by
mutual agreement shall be decided by a representative of the Commission duly
authorized to supervise and administer performance under this contract, who
shall reduce his decision to writing and cause a copy thereof to be mailed to
the Contractor; said decision is final and conclusive, subject to the
provisions of the sentence next following. Within thirty (30) days from the
date of such mailing, the Contractor may appeal in writing to the Commission,
whose written decision thereon, or that of its duly authorized representative,
representatives, or board, not including the representative mentioned in the
preceding sentence, shall be final and conclusive. Pending decision of a
dispute hereunder, the Contractor shall proceed with the performance of its
undertakings under this contract.

ARTICLE XI - SAFETY AND ACCIDENT PREVENTION - INSPECTIONS

The Contractor will comply with health and safety regulations of the
Commission required for work of this nature, and permit the Commission and its
designees to inspect the work conducted under this agreement.

ARTICLE XII - 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 XIII - COVENANT AGAINST CONTINGENT FEES

The Contractor warrants that it has not employed any person to
solicit or secure this contract upon any agreement for a commission, percentage,
brokerage, or contingent fee. Breach of this warranty shall give the Government
the right to annul the contract, or, in its discretion, to deduct from the con-
tract price or consideration the amount of such commission, percentage, broker-
age, or contingent fees. This warranty shall not apply to commissions payable
by contractors upon contracts or sales secured or made through bona fide estab-
lished commercial or selling agencies maintained by the Contractor for the
purpose of securing business.

ARTICLE XIV - ANTI-DISCRIMINATION

The Contractor, in performing the work required by this contract,
shall not discriminate against any employee or applicant for employment because
of race, creed, color, or national origin.

ARTICLE XV - CONVICT LABOR

The Contractor shall not, in the performance of this contract, employ
any person undergoing sentence or imprisionment at hard labor.

ARTICLE XVI - EIGHT-HOUR LAW

The Contractor agrees to insert the following clause in all subcon-
tracts hereunder with private persons or firms:

No laborer or mechanic doing any part of the work contemplated by
this contract in the employ of the Contractor or any subcontractor contracting
for any part of said work contemplated, shall be required or permitted to work
more than eight (8) hours in any one calendar day upon such work at the site
thereof, except upon the condition that compensation is paid to such laborer
or mechanic in accordance with the provisions of this Article. The wages of
every laborer and mechanic employed by the Contractor or any subcontractor
engaged in the performance of this contract shall be computed on a basic day
rate of eight (8) hours per day and work in excess of eight (8) hours per day
is permitted only upon the condition that every such laborer and mechanic shall
be compensated for all hours worked in excess of eight (8) hours per day at not
less than one and one-half (1 1/2) times the basic rate of pay. For each violation
of the requirements of this Article a penalty of Five Dollars ($5.00) shall be
imposed upon the Contractor for each laborer or mechanic for every calendar day
in which such employee is required or permitted to labor more than eight (8)
hours upon said work without receiving compensation computed in accordance with
this Article, and all penalties thus imposed shall be withheld for the use and
benefit of the Government; provided, that this stipulation shall be subject in
all respects to the exceptions and provisions of U. S. Code, Title 40, Sections
321, 324, 325, and 326, relating to hours of labor, as modified by the provisions
of Section 303 of Public Act No. 781, 76th Congress, approved September 9, 1940,
relating to compensation for overtime.

ARTICLE XVII - ASSIGNMENT OF CLAIMS

Neither this contract, nor any interest therein, or claim thereunder,
shall be assigned or transferred by the Contractor to any party or parties,
except as may be approved in writing by the Commission.

ARTICLE XVIII - AUTHORIZATION

This contract is authorized by and has been executed under the
Atomic Energy Act of 1946.

ARTICLE XIX - DEFINITIONS

As used in this contract the terms "United States Atomic Energy
Commission", "Atomic Energy Commission" and "Commission" shall mean the
United States Atomic Energy Commission or its duly authorized representative
or representatives.