6-08 Natrium Project Procurement Terms and Conditions - Base with Option Cost Reimbursement or Fixed Price.docx

NATRIUM PROJECT

PROCUREMENT TERMS AND CONDITIONS

BY AND BETWEEN

TERRAPOWER, llc

AND

[insert contractor legal name]

DATED AS OF

[INSERT DATE]

Template Version: August 24, 2022

TABLE OF CONTENTS

Page

Exhibit A: Statement of Work

Exhibit B: Cost Reimbursement Requirements

Exhibit C: Agreed Provisional Rates

Exhibit D: US Government Flowdown Requirements

Exhibit E: Sample Invoice

Exhibit F: Marking Guidance

Natrium Project Procurement Terms and Conditions Base with Option; Cost Reimbursement or Fixed Price

This Natrium Project Procurement Terms and Conditions (this “Agreement”), effective as of Click here to enter a date. (“Effective Date”) is made and entered into by and between TerraPower, LLC, a Delaware limited liability company, (“TerraPower”), and Insert Contractor’s Legal Name, a Insert Contractor’s state of formation or incorporation, and business entity type (“Contractor”) (each a “Party” and collectively “the Parties”). The Parties agree as follows:

Definitions. For purposes of this Agreement, the following terms shall have the meanings assigned to them below:

“Acceptance” means the act of an authorized representative of TerraPower by which TerraPower assumes for itself, or as an agent of another, ownership of existing and identified Supplies or Equipment, or approves specific Services rendered or other Work performed, as partial or complete performance of the Agreement.

“Agreement” means these Natrium Contract Terms and Conditions and any schedules, attachments, annexes and exhibits hereto (including the Statement of Work and any attachments thereto), the Purchase Order(s) and any schedules, attachments, annexes and exhibits thereto and any modifications agreed to in writing by the Parties in accordance with the terms set forth herein.

“Applicable Laws” means all laws, ordinances, rules, regulations, orders, licenses, permits and other requirements, now or hereafter in effect, of any governmental or regulatory authority applicable to a Party.

“Background Intellectual Property” means any Intellectual Property of a Party existing as of the Effective Date or developed by a Party independently of this Agreement on or after the Effective Date.

“Base Line Item” means the Work so identified within a subsection of the Statement of Work and/or the Purchase Order as Base Line Item and subject to the terms of Section 2.2.

“Budget Period” has the meaning specified in 2 CFR § 200.1; provided, that for purposes of the Project, the Budget Periods are as follows (as may be modified pursuant to written notice delivered by TerraPower to Contractor following any applicable modification pursuant to the Cooperative Agreement): (1) Budget Period 1 is May 3, 2021 – March 31, 2022; (2) Budget Period 2 is April 1, 2022 – March 31, 2023; (3) Budget Period 3 is April 1, 2023 – March 31, 2024; (4) Budget Period 4 is April 1, 2024 – March 31, 2025; (5) Budget Period 5 is April 1, 2025 – March 31, 2026; (6) Budget Period 6 is April 1, 2026 – March 31, 2027; and (7) Budget Period 7 is April 1, 2027 – March 31, 2028.

“Change Condition” means any of the following circumstances:

(i) Any change required by TerraPower pursuant to Section 5.1, except to the extent such change arises from the acts or omissions of Contractor; provided, no Work performed on a Firm Fixed Price Basis shall be eligible for any adjustment to compensation due to any circumstances described in this clause (i) except to the extent TerraPower required such change pursuant to Section 5.1 materially modifies the schedule for performance of the Work or adds material Submittals, Deliverables, Supplies or Equipment to be provided hereunder that has not been at such time agreed in a Statement of Work;

(ii) Any change in Applicable Laws that was not foreseeable as of the Effective Date of this Agreement or the date of the relevant SOW that results, or is reasonably likely to result, in a material adverse effect on the Work, provided, that (a) Contractor has used its reasonably diligent efforts to identify and describe in reasonable detail such change in Applicable Laws and its effects on the Project or performance of Work hereunder as early as possible to TerraPower (including in advance of its effectiveness) and to mitigate any such adverse effects, and (b) no Work performed on a Firm Fixed Price Basis shall be eligible for any adjustment to compensation due to any circumstances described in this clause (ii); or

(iii) Any other circumstances expressly described in this Agreement (including Section 2.3) or a Statement of Work as enabling Contractor to submit an SCR for an adjustment; provided, that under no circumstances shall any changes in the cost or availability of underlying supplies, commodities, materials, labor or other inputs give rise to or be considered in connection with any Change Condition with respect to Work performed on a Firm Fixed Price Basis.

“Class Patent Waiver” means the class patent waiver adopted by DOE dated July 29, 2020 for nuclear energy funding opportunity announcements released during Fiscal Year 2020.

“Co-Employee” has the meaning given in Section 14.1 (Indemnification).

“Confidential Information” means all designs, drawings, diagrams, plans, reports, equipment, specifications, operations, products, services, research, prices, pricing policies, processes and inventions, samples, prototypes, software, source code, object code, passwords, customer lists, customer documents and requirements, financial information, employee lists, business strategies and business plans and information and marketing and advertising information made known to the Contractor by TerraPower or any of TerraPower's officers, managers, independent contractors or employees, or learned by the Contractor from TerraPower or any of TerraPower's officers, managers, independent contractors or employees while retained by TerraPower, or developed by Contractor for TerraPower pursuant to this Agreement, whether or not marked or identified as confidential or proprietary. Confidential Information includes written, graphic and electronically or magnetically recorded information furnished by TerraPower for the Contractor's use, as well as archival copies maintained by the Contractor under this Agreement. Unless otherwise identified in writing by TerraPower, Deliverables are considered Confidential Information.

“Continuation Application” means a non-competitive application for the next Budget Period within the previously approved term for the Project.

“Contract Administrator” or “CA” means TerraPower’s contract administrator and sole point-of-contact who will interface directly with the Contractor on commercial matters related to this Agreement. TerraPower may change the CA upon written notice delivered to Contractor.

“Cooperative Agreement” means that certain Cooperative Agreement #DE-NE0009054, entered into between DOE and USO on May 3, 2021, as amended from time to time.

“Correction” means the elimination of a defect.

“Cost Reimbursable Basis” means, for any Work under a line item so identified, that Contractor shall be paid its allowable incurred costs, to the extent prescribed in this Agreement. Cost Reimbursable Basis may be of two types under this Agreement, Cost Reimbursable (“CR”) or Cost Plus Fixed Fee (“CPFF”).

“Cost Reimbursable” or “CR” means Work performed under a line item on a Cost Reimbursable Basis for which Contractor receives no fee.

“Cost Plus Fixed Fee” or “CPFF” means Work performed under a line item on a Cost Reimbursable Basis that also provides for payment to Contractor of a negotiated fee that is fixed at the inception of this Agreement. The fixed fee does not vary with actual cost, but may be adjusted as a result of agreed changes in the Work to be performed under the Agreement.

“Deliverables” means products, designs, drawings, diagrams, plans, reports, specifications, components, research, results, processes, inventions, samples, prototypes, software, source code, object code, data, documents, calculations and other items, materials or information produced by the Contractor in the performance of the Work, or delivered by Contractor to TerraPower such as via posting to the designated collaboration site or “issued for use” (i.e., REV 0 or equivalent nomenclature), as may be subsequently modified from time to time by the Parties, as well as any Intellectual Property therein, conceived, created or obtained by the Contractor in the performance of the Work. “Deliverables” may be referred to as “products”, “Work Product” or “Submittals” in the applicable Purchase Order or Statement of Work.

“DOE” means the United States Department of Energy.

“EH&S Requirements” has the meaning given in Section 10 (Quality Assurance; EH&S).

“Equipment” has the meaning set forth in 2 C.F.R. 200.1 and also includes all auxiliary equipment, components, and materials necessary thereto, as further described in the Purchase Order and/or SOW.

“Estimated Budget Period Total Cost” has the meaning given in Section 6.1(b).

“Estimated PO Total Cost” has the meaning given in Section 2.4.

“Firm Fixed Price Basis” or “FFP” means for any line item so identified the Work shall be performed for a fixed price as identified in the Purchase Order, subject to adjustment only as provided in Section 5 (Changes) or as otherwise mutually agreed by the Parties in writing.

“Foreign National” means any person who is neither a U.S. citizen or U.S. national nor a “Lawful Permanent Resident” (Green Card holder, 8 U.S.C. § 1101(a)(20)) or other “Protected Individual” under the Immigration and Naturalization Act (8 U.S.C. §1324b(a)(3)) designated an asylee, refugee, or a temporary resident under amnesty provisions. A Foreign National also means any corporation, business association, partnership or any other entity or group that is not incorporated to do business in the US.

“Force Majeure Event” means an act or event, not reasonably foreseeable with the exercise of due diligence, that (a) prevents a Party (the “Nonperforming Party”) in whole or in part from performing its obligations under this Agreement or satisfying any conditions to the Performing Party obligations under this Agreement; (b) is beyond the reasonable control of and not the result of the fault (including negligence) of the Nonperforming Party, and (c) is not avoidable or able to be overcome by the Nonperforming Party by the exercise of due diligence. Despite the preceding definition of a Force Majeure Event, a Force Majeure Event excludes (i) economic hardship, changes in market conditions, or insufficiency of funds; (ii) changes in the cost or availability of underlying supplies, commodities, materials, labor or other inputs; (iii) facts, events or circumstances arising due to the COVID-19 pandemic and outbreaks, except (and subject to the other criteria in this definition of “Force Majeure Event”) to the extent any governmental order, law or action announced and promulgated after (and not reasonably foreseeable before) the Effective Date materially and adversely affects the performance of the Work. The “Performing Party” means the Party who is unaffected by a Force Majeure Event and whose performance is in accordance with this Agreement.

“Integrated Master Controls Plan” means the single, integrated time-based schedule containing the networked, resource loaded, detailed tasks necessary to ensure successful execution of the activities related to the Project. The schedule management for Project activities, including Contractor’s activities, will be through the Integrated Master Control Schedule.

“Intellectual Property” means all intellectual property rights of any kind, worldwide, including without limitation, utility patents, design patents, and all applications for the foregoing; registered and unregistered trademarks, service marks, trade dress, logos, domain names, and other source identifiers, and all applications and registrations for the foregoing, and all goodwill associated with the foregoing; published and unpublished works of authorship, registered and unregistered copyrights, database rights, moral rights, and all registrations and applications for the foregoing; software, firmware, computer programs, source code, object code, logic, models, diagrams, technology, and documentation; and trade secrets, know-how, ideas, inventions, improvements, data, and other confidential and proprietary information, in whatever form.

“NRC” means the United States Nuclear Regulatory Commission.

“Option Line Item” means the Work so identified within a subsection of the Statement of Work and/or the Purchase Order as an Option Line Item and subject to the terms of Section 2.2. The Statement of Work may contain more than one Option Line Item, to be further delineated by number (i.e. Option Line Item 1, Option Line Item 2, etc.)

“Price” means the total compensation to be paid to Contractor on a Firm Fixed Price Basis, or Cost Reimbursable Basis, as applicable, for the Work as set forth in the Statement of Work and the applicable Purchase Order.

“Price Ceiling” means the cumulative Price for all Work, whether Firm Fixed Price Basis or Cost Reimbursable, authorized under the applicable Purchase Order.

“Price Anderson Act” means PL 85-256, Section 170 of the Atomic Energy Act of 1954, as amended, 42 U.S.C. §§ 2210, as amended, and related provisions of Section 11 of the Atomic Energy Act.

“Project” means the demonstration facility that is in development by TerraPower in coordination with DOE utilizing the Natrium sodium reactor technology (together with all auxiliary equipment, ancillary and associated facilities and equipment, electrical transformers, interconnection and metering facilities and all other improvements and assets and rights related thereto).

“Project Controls Plan” means the detailed plan for project controls that describes specific processes, procedures, systems and tools to be used by the project controls teams throughout the development and construction of the Project. The Project Controls Plan will be created by TerraPower and issued for use by Contractor.

“Prudent Industry Practices” means that degree of skill and judgment and the utilization of practices, methods, and techniques and standards that are generally expected of skilled and experienced engineering firms by a significant portion of the nuclear power industry in the United States of America in light of the facts known or ought to have been known at the time the decision was made, could reasonably have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, safety, reliability, expedition, and Applicable Laws. Prudent Industry Practice is not limited to the optimum practice, method or act to the exclusion of all others, but rather to a spectrum of reasonable and prudent practices, methods, standards and procedures.

“Purchase Order” means the purchase order document included with these Natrium Contract Terms and Conditions, including the signature page, all parts referenced on the signature page and all attachments thereto, each of which is hereby incorporated herein, as may be amended from time to time.

“QA Requirements” has the meaning given in Section 10 (Quality Assurance; EH&S).

“Recordkeeping Period” has the meaning given in Section 18.1.

“Services” means the services to be provided by the Contractor to TerraPower under this Agreement, as authorized by the Purchase Order and detailed in the Statement of Work, including, as applicable, engineering, design, fabrication, construction, installation, demolition, testing, technical assistance, and documentation.

“Specification” means the formal applicable technical description, requirements and acceptance criteria as defined and/or referenced in a Statement of Work.

“Statement of Work” or “SOW” means the description of requirements pertaining to the Work, including Services, Supplies, and Submittals, based on the form and/or requirements attached hereto as Exhibit A, and including any documents incorporated therein by reference.

“Submittals” means the Work documentation and data, including Deliverables, furnished by the Contractor under this Agreement, as specifically identified in the applicable Statement of Work and/or Purchase Order.

“Supplier Coordination Request” or “SCR” means a Contractor coordination request submitted by Contractor to TerraPower for disposition and response. SCR may be used to request information or clarification, request deviation from a contract requirement and/or a technical requirement, or to disposition a Contractor non-conformance to technical requirements.

“Supplier Project Engineer” or “SPE” means TerraPower’s liaison between Contractor and TerraPower stakeholders. The SPE is Contractor’s main point of contact. The SPE role includes responsibility for the coordination and approvals of supplier documents, conducting regularly scheduled supplier progress meetings, overseeing supplier performance, as well as facilitating efforts to resolve technical issues. The SPE works in conjunction with the CA and TR throughout the Project. TerraPower may change the SPE upon written notice delivered to Contractor from time to time.

“Supplies” means the end items or products, including supporting related documentation and data, specified in the applicable Purchase Order(s) and Statement(s) of Work, and furnished by the Contractor under this Agreement. Supplies may be referred to as “products” in the applicable Purchase Order or Statement of Work.

“Suspension” has the meaning given in Section 6.5 (Suspension, Shipment to Storage).

“Suspension Notice” has the meaning given in Section 6.5 (Suspension, Shipment to Storage).

“Suspension Period” has the meaning given in Section 6.5 (Suspension, Shipment to Storage).

“Technical Representative” or “TR” means TerraPower’s point of contact who will interface with the Contractor on technical matters related to the Agreement. TerraPower may change the TR upon written notice delivered to Contractor from time to time.

“Term” means the period beginning from the Effective Date of this Agreement and expiring on the completion/delivery date(s) for all Deliverables as set forth in the Purchase Order or Statement of Work, unless extended or earlier terminated in accordance with this Agreement.

“TerraPower-Provided Equipment” means tools, dies, jigs, fixtures, patterns, or any other equipment used by the Contractor in meeting its obligations under this Agreement that is either furnished by TerraPower to Contractor or that Contractor charges directly to TerraPower.

“USO” has the meaning given in Section 11.4 (Warranty).

“Warranty Period” has the meaning given in Section 11.1 (Warranty).

“Work” means all obligations of Contractor under this Agreement, including without limitation the design, engineering (including all Deliverables and Submittals), procurement, delivery and supply of the Equipment, materials, and Supplies, and the provision of Services, including all technical advisory services in connection with the installation, start-up and testing of Equipment, and satisfaction of all warranty obligations, all in accordance with the requirements of this Agreement.

“Work Product” means all Deliverables, including any documents, reports, materials, techniques, ideas, algorithms, software, source code, object code, specifications, plans, drawings, designs, inventions, data, information and other items or materials that are authored, conceived, created, or developed, by or on behalf of Contractor for TerraPower in connection with the Work, together with any and all Intellectual Property rights (other than Contractor Background Intellectual Property) in the foregoing.

Work Authorization - Purchase Order; Base with Option Work shall be authorized only by issuance of the Purchase Order, which may be amended, and that shall be performed during the Term. The cumulative Price for all Work may not exceed the Price Ceiling without prior written approval from TerraPower. Contractor acknowledges and agrees that: (a) TerraPower is not obligated to issue any one or more Purchase Orders that together amount to the full amount of the Price Ceiling and (b) TerraPower will not be liable to pay any amounts in excess of the Price Ceiling unless the Price Ceiling has been increased pursuant to Section 5 (Changes).

The Purchase Order and Statement of Work identify Work that is delineated by line item as a Base Line Item and separately an Option Line Item(s). Issuance of the Purchase Order shall authorize Contractor to perform the Work identified as Base Line Item only.

TerraPower may require Contractor to perform Work that is identified as an Option Line Item(s), to be performed in the quantity and at the price stated in the Purchase Order and as specified in the Statement of Work, in accordance with the following:

TerraPower may at its sole discretion, provide a preliminary notice of intent to exercise its option for the Option Line Item from the CA to Contractor. Any such preliminary notice of intent must be provided to Contractor at least ninety (90) days prior to the end of the period of performance for the Base Line Item Work (or in the event of multiple Option Line Items, the then-current Option Line Item Work), or as specified in the SOW. Alternatively, TerraPower may at its discretion specify a date to provide said notice within the SOW. Failure to provide the preliminary notice within the timeframe established waives TerraPower’s right to unilaterally exercise the option and requires the negotiation of a bilateral contract modification in order to exercise the Option Line Item. Under no circumstance shall the issuance of the preliminary notice of intent to exercise Option Line Item be deemed an exercise of the Option Line Item by TerraPower, which exercise of said Option Line Item may only happen in accordance with Section 2.3(c) below.

Contractor shall have thirty (30) days from receipt of the preliminary notice of intent to exercise the Option Line Item as provided under Section 2.3(a)to either (a) submit to TerraPower a request for adjustment pursuant to Section 5 (Changes) for all changes to Work under the Option Line Item which are known or should be known by Contractor at the time of receipt of the preliminary notice of intent; or (b) notify TerraPower that it is not requesting an adjustment for the Option Line Item. If Contractor fails to provide any notice to TerraPower within thirty (30) days, Contractor will be conclusively deemed to not be requesting an adjustment of the Option Line Item.

Nothing in this section shall deem any requested adjustment under this Section as accepted by TerraPower, which requested adjustment shall be subject to negotiation in accordance with this Agreement.

Contractor waives the right to request an adjustment under this Section or Section 5 (Changes) for any changes to the Work under the Option Line Item which are known or should have been known to Contractor at the time of receipt of the preliminary notice of intent and not submitted within thirty (30) days by Contractor in its request for adjustment under this Section.

After receipt of a request for adjustment from Contractor or confirmation that Contractor is not seeking an adjustment as contemplated in Section 2.3(b)above, TerraPower may elect to exercise an Option Line Item by providing written notice to Contractor through the issuance of a unilateral modification to the Purchase Order to Contractor at least thirty (30) days prior to the end of the period of performance for the Base Line Item Work. Failure to provide the unilateral modification within the timeframe established waives TerraPower’s right to unilaterally exercise the Option Line Item and requires the negotiation of a bilateral contract modification in order to exercise the Option Line Item.

TerraPower shall have sole discretion whether to exercise an Option Line Item. TerraPower reserves the right to not exercise an Option Line Item for any reason and is not obligated to pay Contractor any anticipated monetary gains and/ or losses as a result of TerraPower’s decision to not exercise an Option Line Item.

Upon exercise of the Option Line Item, only thereafter shall the applicable Work be performed in accordance with the SOW and this Agreement. Nothing in this Section 2.3 shall preclude Contractor from seeking an adjustment under Section 5 (Changes) for changes to the Work under an Option Line Item which arise after TerraPower’s exercise of such Option Line Item.

The Purchase Order shall specify its Price basis for the Base Line Item and each Option Line Item, if any, as: FFP or Cost Reimbursable. If the line item is FFP, the Purchase Order shall state the Price. In any case, the Purchase Order shall state the Price Ceiling. For all Work that is Cost Reimbursable, for the purpose of obligating funds and establishing ceilings that Contractor may not exceed (except at its own risk) without the approval of the CA, as set forth in further detail pursuant to Exhibit B, Sections 7.3.2 and 7.3.3, the Parties shall establish and include in each Purchase Order (i) an estimate of total Reimbursable Costs expected to be invoiced pursuant to such Purchase Order (the “Estimated PO Total Cost”), and (ii) with respect to each Budget Period, an Estimated Budget Period Total Cost.

Performance of the Work The Statement of Work shall specify the Work, the CA, the TR, the SPE, technical requirements, QA Requirements, EH&S Requirements, Deliverables, Submittals, Supplies, Equipment, Services, schedule, and period of performance (including, as applicable, by identifying separate documents by number and description, which shall be deemed to be incorporated in their entirety within such Statement of Work as though set forth therein). Work identified in the SOW shall also be delineated between Base Line Item and any Option Line Item(s).

Contractor shall complete the Work in accordance with any deadlines and other scheduling requirements set forth in the applicable SOW. The Contractor shall devote the time, energy, interest, ability and skill that are necessary to satisfactorily perform the Work, including utilizing personnel of appropriate levels of skill, experience and qualifications (including, as applicable, any professional certifications, licenses and other credentials required by Applicable Laws or any applicable Statement of Work). With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence. Contractor shall perform the Work in accordance with Prudent Industry Practices and Applicable Law and in compliance with the material rules, regulations and policies of TerraPower (to the extent made known to Contractor).

The Contractor shall provide Work for TerraPower as authorized by the Purchase Order, including any amendments thereto, according to the terms of this Agreement and the SOW. The CA has the authority to provide written direction on behalf of TerraPower to the Contractor for matters of clarification, provided that, with the exception of any options exercised under Section 2.3, any such direction that increases or decreases the Work, schedule, or compensation shall be subject to Section 5 (Changes). The SPE and/or TR will interface with the Contractor concerning technical matters. TerraPower and the Contractor shall, on a regular basis, but not less than monthly, as specified by the CA, SPE, and TR, communicate to discuss the status of the Work (including any changes), cost (as appropriate), schedule and Work performance as outlined in the Statement of Work. Communication may be in the form of in-person meetings, teleconferences and/or written status reports.

The Contractor shall maintain and comply with all licenses and permits as may be required for it to provide the Work.

The Contractor shall not engage lower-tier Contractors to provide all or any portion of the Work without TerraPower’s written consent (which may be provided in the Purchase Order), except for the Contractor’s wholly owned subsidiaries. If the Contractor utilizes the services of permitted lower-tier contractors or acquires any products in order to provide the Work, (i) the Contractor will be solely responsible for the payment to such permitted lower-tier Contractors and for the compliance and conformity with this Agreement of any such services and products and (ii) Contractor shall bind any such lower-tier contractors, suppliers or vendors to the applicable terms and conditions of this Agreement to the portion of the Work subcontracted and to the contractual flowdown provisions set forth in Exhibit D.

The Contractor shall deliver Submittals to TerraPower for review, information or approval. Submittals shall be provided via secure electronic information transfer system in accordance with Section 19.3 (Communication and Protection of Data) and with a separate notification to submittals@terrapower.com, unless otherwise specified by TerraPower in the SOW. Administrative items (i.e., not Confidential Information) may be provided by email to submittals@terrapower.com only. The CA and SOW will provide any specific additional guidance and other submittal methods as required by this Agreement. Contractor shall appropriately mark (in accordance with TerraPower’s marking requirements) all Submittals to allow processing and control of the Submittals, in accordance with this Agreement. Unless otherwise specified in an SOW, Work delivered under this Agreement comprising software will include source code, object code and associated documentation.

The SOW will provide specific guidance regarding data/document Submittals and other Supplies and Equipment, and their Acceptance, as applicable. All Work performed under this Agreement shall be subject to Acceptance by TerraPower and inspection by TerraPower or its designee in connection therewith. Notwithstanding anything to the contrary herein, under no circumstances shall Acceptance by TerraPower or the performance of any inspection in connection therewith constitute or be deemed a waiver of any rights, remedies or interests of TerraPower in this Agreement, including those pursuant to Section 11 (Warranty).

The Contractor may request information or contractual direction from TerraPower using an SCR. The CA will make the SCR Form, with instructions, available to the Contractor. The SCR will formally document Contractor requests, and TerraPower’s responses. If the disposition of an SCR requires a change to this Agreement, or to a Purchase Order, then the CA will initiate the change in accordance with Section 5 (Changes).

Representations, Certifications The required contractual flowdown provisions set forth in Exhibit D (US Government Flowdown Requirements) to this Agreement are incorporated into and form an integral part of this Agreement and Contractor shall comply with the same in all respects.

Each Party represents and warrants to the other that it has the full right and authority to enter into and to perform its obligations under this Agreement and that its performance of its obligations under this Agreement will not conflict with any other obligation it may have to any third party.

The Contractor represents and warrants (or certifies, as applicable) to TerraPower, and agrees, that:

(i) Contractor is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (ii) Contractor is duly qualified to do business and is in good standing in each jurisdiction in which its respective ownership or lease of property or the conduct of its business requires such qualification, (iii) Contractor has all power and authority necessary to own or hold its properties and to conduct the business in which it is engaged; (iv) Contractor’s performance of the Work shall be in compliance with Applicable Law and all licenses and permits as may be required for such performance and (v) Contractor and its affiliates and sub-tier contractors, and their respective employees, agents, vendors, consultants or other representatives, maintain where required, and as specified in the Purchase Order and/or SOW, or otherwise required by Applicable Laws, any professional certifications, licenses, and other credentials qualifying them to perform all applicable Work;

Contractor (i) shall comply with all Applicable Laws in connection with the Work and the performance of Contractor's obligations under this Agreement and shall ensure that the Work and its permitted sub-tier subcontractors comply with all Applicable Laws; and (ii) is aware of, understands and shall comply with, and will ensure that any permitted sub-tier subcontractors are aware of, understand and shall comply with, all applicable U.S. and foreign anti-corruption laws, including the U.S. Foreign Corrupt Practices Act, as such laws may be amended from time to time.

Contractor, its affiliates, and their respective employees, agents, vendors, consultants or other representatives (i) have not been excluded, debarred, declared ineligible or suspended from (or proposed for debarment or suspension from) participation in, or is otherwise ineligible to participate in, any Federal program, any transaction with any Federal department or agency or any Federal procurement or non-procurement programs and (ii) are not the subject of any pending action, suit, claim, investigation or proceeding that could result in the foregoing. Contractor agrees to promptly inform TerraPower in writing of any debarment, exclusion, suspension, conviction, ineligibility or other event addressed by the above with respect to Contractor, its affiliates, and their respective employees, agents, vendors, consultants or other representatives. Should Contractor, its affiliates, or any of their respective employees, agents, vendors, consultants or other representatives become subject to any of the foregoing, upon receipt of such notification, such entity or individual shall immediately become ineligible to perform the services contemplated by this Agreement and TerraPower shall have the right to immediately terminate this Agreement;

Contractor is currently, and will remain, in compliance with the regulations of the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury, the Bureau of Industry and Security of the U.S. Department of Commerce (BIS), the Directorate of Defense Trade Controls of the U.S. Department of States (DDTC), NRC and DOE, and any other applicable governmental requirements administered by governmental authorities with jurisdiction over the Parties to this Agreement relating thereto;

Contractor and its principals are not designated on any lists of sanctioned individuals or entities maintained by the United Nations, the United Kingdom, the United States, the European Union, and any other relevant jurisdiction including but not limited to the following lists: the Specially Designated National and Blocked Persons (SDN) List, the Sectoral Sanctions Identifications (SSI) List, or the Foreign Sanctions Evaders (FSE) List, the Non-SDN Communist Chinese Military-Industrial Complex Companies List and any other lists administered by OFAC, as amended from time to time; the U.S. Denied Persons List, the U.S. Entity List, the U.S. Unverified List, and the Military End User List, administered by BIS; the consolidated list of Persons, Groups and Entities Subject to EU Financial Sanctions, as implemented by the EU Common Foreign & Security Policy; and similar lists of restricted parties maintained under applicable law;

Contractor and its principals are not organized under the laws of, located or ordinarily resident in, a country or territory subject to comprehensive sanctions (as of the date of this Agreement, Iran, Syria, Cuba, North Korea, the Crimea region of Ukraine, Donetsk and Luhansk)(“Embargoed Territory”);

Contractor is not directly or indirectly owned or controlled by any of the foregoing parties described in clauses (e) and (f) above, or otherwise the target of sanctions or export control restrictions (collectively “Restricted Parties”);

Contractor and its principals are not directly or indirectly acting or purporting to act on behalf of one or more Restricted Parties in performance of the Work under this Agreement;

Contractor will not provide to TerraPower any service, good, software or technology under this Agreement that has been sourced, procured, manufactured, produced or transported in or from an Embargoed Territory;

If the Price (including any adjustments): exceeds $100,000, Contractor expressly agrees to comply with all applicable standards, orders or regulations issued pursuant to the Contract Work Hours and Safety Standards Act (40 U.S.C. 3701-3708), as amended;

If the Price (including any adjustments) exceeds $150,000, Contractor expressly agrees to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401-7671q) and the Federal Water Pollution Control Act (33 U.S.C. 1251-1387), in each case as amended;

No federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress or an employee of a Member of Congress on its behalf in connection with the awarding of this Agreement. If the Price exceeds $100,000, Contractor shall provide the certification required pursuant to 31 U.S.C. 1352(b)(1)(A);

Contractor’s System for Award Management (SAM) registration (https://uscontractorregistration.com/) and certification in connection therewith is active and current;

Contractor shall ensure that the Work performed by sub-tier subcontractors comply with all requirements set forth in this Section 4, as applicable;

Contractor represents and warrants to TerraPower as of the Effective Date and (except as otherwise specified in this clause (o) below) at all times during the Term that:

as of the Effective Date, it has not received notice from any third party alleging that the use of its technology, services, products, Intellectual Property or components thereof as contemplated to be used in the performance of this Agreement infringes, misappropriates or otherwise violates, or requires a license to use, any Intellectual Property of any third party;

it has enforceable written agreements with all of its employees (and shall cause any contractors that are working for it on a contractor basis, as applicable) who receive Confidential Information and/or perform activities under this Agreement that contain confidentiality obligations no less restrictive than those in this Agreement and that assign ownership of all Intellectual Property rights created in the course of their employment to Contractor; and the use, commercialization or other exploitation of its technology, services, Work Product, Intellectual Property and components thereof as contemplated to be used, provided, commercialized, and/or otherwise exploited in connection with or as permitted by this Agreement does not infringe, misappropriate or otherwise violate any Intellectual Property right of any third party; and In the event of any noncompliance with, or breach of or inaccuracy in any representation and warranty in, any of Sections 4.3(d)–(i), TerraPower shall be entitled to immediately terminate the Agreement and take such other actions as are permitted or required to be taken under Applicable Law.

Changes TerraPower shall have the right from time to time, upon written notice to Contractor, to make changes to the scope or contents of this Agreement, including changes to: (i) the drawings, designs, specifications, and/or technical attachments; (ii) schedule; (iii) additions to or deletions from quantities ordered; (iv) the method of delivery, shipment or packing of Supplies or Equipment; or (v) the date or delivery destination specified in the SOW or Purchase Order (as applicable). Changes made by TerraPower shall not require any written consent or agreement (including any SCR) of Contractor for their effectiveness.

Subject to Section 2.3, if applicable, the Contractor shall notify the CA in writing within twenty (20) days of when Contractor first becomes aware of any Change Condition that could justify changes under this Agreement, and TerraPower shall not be obligated to pay the Contractor for any change to this Agreement unless the Contractor makes prompt written notification as required by this Section 5.2. Subject to the foregoing, if there has been a Change Condition, Contractor may make, via SCR, a change request or non-conformance request to TerraPower relating to the Agreement.

If any change made by TerraPower under Section 5.1 (to the extent it comprises a Change Condition), or Change Condition pursuant to Section 5.2, causes an increase or decrease in the cost or timing required to perform the Work or certain portions of the Work, then as Contractor’s sole and exclusive remedy, an equitable adjustment may be requested in (a) the Price Ceiling, Estimated Budget Period Total Cost, Estimated PO Total Cost or Price (as applicable) or (b) the schedule, or both, and, as applicable, this Agreement or the Purchase Order shall be modified by a written amendment to this Agreement or a revision to the Purchase Order executed by an authorized representative of each Party; provided, that (i) approval of any such changes shall be at the sole discretion of TerraPower, and (ii) Change Conditions shall not enable adjustments to the Price Ceiling, Estimated Budget Period Total Cost, Estimated PO Total Cost or Price where prohibited or otherwise limited in the definition of “Change Conditions”. Failure by Contractor to timely provide notice of an applicable Change Condition pursuant to Section 5.2 shall result in Contractor’s right to adjustment or modification being deemed conclusively waived.

With respect to any request for a change pursuant to Section 5.2, the Contractor shall provide the following information :

a description of the change;

a list of deliverables required for implementing the change;

a timetable for implementation;

any relevant Acceptance criteria;

options to mitigate the costs or delays associated with the change;

any required amendments to TerraPower’s policies, procedures and processes;

any required infrastructure requirements;

effect on subcontracts and other third party agreements, if any;

proposed amendments to the applicable Statement of Work;

proposed changes to the Price Ceiling, Estimated Budget Period Total Cost, Estimated PO Total Cost or Price (as applicable), if any;

proposed amendments to this Agreement, if any; and any other matter reasonably requested by TerraPower or reasonably considered by Contractor to be relevant.

Changes requested by Contractor shall not violate, conflict with or breach any terms or conditions in this Agreement, including any Statement of Work, and shall not become effective except if approved in writing by TerraPower. In the event that Contractor and TerraPower disagree on any equitable adjustment in connection with this Section 5, such disagreement shall not excuse Contractor from performing its obligations with respect to any authorized Work and the Work as changed under this Agreement.

Term and Termination; Suspension Term.

Subject to the terms of this Agreement, TerraPower hereby engages Contractor until the earlier of (i) the date on which all Work as identified in the applicable Purchase Order and SOW has been satisfactorily performed, delivered and Accepted within the period specified, (ii) the date that is the end of the then-applicable Budget Period (provided, that with respect to this clause (ii), the term of this Agreement shall automatically and without further action of the Parties be extended for the duration of any subsequent Budget Periods commenced or to be commenced pursuant to Continuation Applications approved by DOE (in each case pursuant to the Cooperative Agreement)), or (iii) the date on which the Agreement is terminated earlier pursuant to the terms of this Agreement or by written agreement of the Parties.

Continuation Applications. Contractor shall use its commercially reasonable efforts to facilitate the preparation, submission and negotiation of any Continuation Application by TerraPower or USO and the addition of any Budget Periods applicable to the Project through the Cooperative Agreement, including the entry into additional Statements of Work, in each case as requested by TerraPower in its sole discretion (the Parties acknowledging that the negotiation of such extensions as between themselves shall generally be limited to budgets, the Work to be performed during the period of such extension and relevant scheduling requirements and milestones). Without limiting the foregoing, Contractor shall provide to TerraPower any information reasonably requested by TerraPower as being subject to review by DOE in connection with such Continuation Application, including (not later than 135 days prior to the end of the preceding Budget Period) detailed budgets, on a line-item basis and including estimated total Reimbursable Costs expected to be invoiced by Contractor during such Budget Period (the “Estimated Budget Period Total Cost”). If the Parties are unable to agree upon such budgets or a Statement of Work applicable to any newly commenced Budget Period, Contractor shall, at the election of TerraPower, continue to perform such Work as is requested by TerraPower on a month-to-month basis, subject to payment hereunder as though such Work was performed during the immediately preceding Budget Period. Nothing in this Section 6.1(b) shall limit any right of TerraPower to terminate, or to not extend or renew, this Agreement or any Statement of Work or Purchase Order.

Breach; Default. TerraPower may terminate this Agreement, or any part thereof, by written notice: (a) in the event of any breach or default by Contractor of any of its obligations under this Agreement, (b) if, following request by TerraPower, Contractor fails to provide timely and acceptable assurance of Contractor’s ability to meet all applicable QA Requirements and EH&S Requirements or the delivery date(s) of this Agreement, (c) if Contractor fails to comply with Applicable Laws or (d) if Contractor becomes insolvent, does not pay its debts as due, or makes a general assignment for the benefit of creditors or reasonable grounds for insecurity arise with respect to Contractor’s ability to perform. Contractor shall immediately notify TerraPower of the occurrence of any of the events described in this sub-Section (d).

In the event of any occurrence of sub-Section (a) above, TerraPower will provide Contractor with written notice of the nature of the default and TerraPower’s intention to terminate for default. TerraPower may by written notice terminate this Agreement in the event Contractor does not correct the default within ten (10) days of such notice or such longer period of time if specified in such notice of default to Contractor.

Upon the occurrence of any of sub-Sections (b), (c) or (d), TerraPower may terminate this Agreement immediately upon written notice without any cure period.

TerraPower’s Convenience. TerraPower may terminate this Agreement, or any part thereof, at any time for its convenience by giving written notice to Contractor. Upon termination pursuant to this Section 6.3, Contractor may claim reasonable costs incurred for the Work completed prior to the effective date of such termination based on the percentage of Work complete, but not previously paid, and a reasonable amount for any Supplies and Equipment (and components thereof) then in production (other than for Supplies and Equipment (and components thereof) which are Contractor’s standard stock); provided, however, that the total sum payable to Contractor upon termination shall not exceed the Price had all Work been completed under this Agreement. The amounts to be paid to Contractor shall be set out in a written Purchase Order revision signed by TerraPower’s authorized representative. The payment will not include any consideration for loss of anticipated profits on the terminated Work, all claims for which Contractor agrees to waive. Furthermore, the total sum to be paid to Contractor for termination shall be subject to adjustment to the extent any Work contains defects as of the termination date. Contractor shall hold all partially completed Work or raw material in trust for TerraPower to be disposed of or transferred in accordance with TerraPower’s instructions.

Effect of Termination. Upon the completion, termination or cancellation of this Agreement pursuant to Sections 6.2 or 6.3 above, the Parties shall cooperate to execute an orderly, efficient, and expeditious termination of the Parties’ respective activities under this Agreement.

Upon receipt of any notice of termination, or any other expiration of the term of this Agreement, pursuant to this Section 6, Contractor shall, unless the notice requires otherwise:

immediately discontinue the Work on the date and to the extent specified in the notice, place no further orders for Supplies, Services, TerraPower-Provided Equipment or Equipment other than as may be…