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Orbit Technologies, Inc. 5950 La Place Court Suite 140 Carlsbad, CA 92008

To: James A. Giansiracusa Phone: (760) 918-9168 Fax No.: (760) 918-9213

1. STATEMENT OF WORK

PURCHASE ORDER NO. K99-181662 LOCKHEED MARTIN IDAHO TECHNOLOGIES COMPANY
(LMITCO) 2525 Fremont Avenue
P. O. Box 1625, Idaho Falls, ID 83415-3521
OPERATING UNDER U. S. GOVERNMENT CONTRACT NO. I>E-AC07-94ID13223

Effective Date: 05/26/15

Completion Date: 09/15/1!

1.1.  The Subcontractor shall furnish the services as detailed in the Statement
of Work entitled, "Polysiloxane Encapsulation of Calcined Waste", dated
05/06/1999, Rev. 1, and in accordance with the requirements, terms and
conditions specified or referenced in this Purchase Order.

1.2.  This is a fixed-rate, ceiling.priced, level-of-effort Purchase Order for
the period of 05/26/1999 through 09/15/1999. The quantity of hours shown is an
estimate to be used during the specified period of this Purchase Order. The
estimated quantity does not obligate, guarantee, or imply that this quantity
will be purchased. Payment will be made for services rendered and accepted by
LMITCO. Pricing (i.e., fixed labor rates) is firm for the specified period of
this Purchase Order.

2.   RESOURCES

2.1.  The Subcontractor shall provide all resources, e.g., materials, labor,
tooling, equipment and facilities, necessary to fulfill the requirements of this
Purchase Order, except as otherwise specified.

3.   APPLICABLE DOCUMENTS

The Statement of Work entitled, "Polysiloxane Encapsulation of Calcined Waste",
dated 05/06/1999, Rev. 1 is incorporated into and becomes a part of this
Purchase Order:

4.   TERMS AND CONDITIONS

General Provisions: The following document is incorporated by reference and
hereby forms a part of this action: Lockheed Martin Idaho Technologies Company
General Provisions for Non-Construction Purchase Orders and Subcontracts, Form
PROC-183, Rev. August 1996. Note: LMITCO's General Provisions are available at
the following Internet address:    http://www.inelgov/procurementnitco/forma.

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Procurement Agent: C. F. Cloud, Telephone: (208) 526-5596, Ceiling Price.
$60,000.00

Ship via: N/A             F.O.B./Trans.: N/A              Cash Terms: Net 10
Days

Article A.16, Disputes: Add the following paragraph: "The parties agree that
Alternate Dispute Resolution (ADR) is an option for resolving disputes
pertaining to this Subcontract and upon the mutual agreement of the parties, ADR
will be utilized. The particular ADR process to be used must also be mutually
agreed upon and set forth in a written agreement signed by the parties. Possible
ADR procedures include, but are not limited to: (a) a neutral party to preside
over the resolution process; (b) mediation; and (c) binding arbitration".

4.3.  Certification of Eligibility: Subcontractor, by entering into this
Purchase Order, certifies that it is not debarred, or proposed for debarment, or
suspended or has not otherwise been declared ineligible from receiving Federal
contracts. Disclosure that Subcontractor was ineligible for Federal contracts on
or before the effective date of this Purchase Order shall constitute an
additional basis for termination under the Default Article of the General
Provisions.

4.4.  Sales Tax: LMITCO has been granted Direct Pay Authority for Idaho Sales
Tax by the Idaho Tax Commission Utilization of Former Employees: Except as
approved by LMITCO in advance, Subcontractor shall not utilize former LMITCO or
Coleman employees who participated in the early retirement program of 1995. This
restriction also applies to any lower-tier Order(s) awarded by the
Subcontractor.

Anti-Kickback Act: By acceptance of this Purchase Order, Subcontractor certifies
that it has not and shall not make or solicit kickbacks in violation of the
Anti-Kickback Act of 1986.

5.   PRICE

5.1.  The ceiling price of this Purchase Order is $60,000.00.

5.2.  LMITCO shall not be obligated to pay the Subcontractor any amount in
excess of the ceiling price established in the Purchase Order, and the
Subcontractor shall not be obligated to continue performance, if to do so, would
exceed that price ceiling, unless and until LMITCO shall have notified the
Subcontractor, in writing, that such price ceiling has been increased and shall
have specified in such notice a revised price ceiling, which shall thereupon
constitute the price ceiling for performance under this Purchase Order.

5.3   Labor: The ceding price for labor is $50,000.00. The Subcontractor shall
be paid at the hourly labor rates established herein up to 1016 hours for
services rendered in performing the statement of work. The hourly labor rates
are fully burdened, i.e., they include all elements of direct and indirect cost.
The Subcontractor shall maintain suitable

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records showing time actually expended by employees by name and applicable label
category; these records must be furnished to LMITCO, upon LMITCO's request.

5.4   Materials: The Subcontractor shall support all material costs claimed by
submitting paid invoices or storeroom requisitions. Except as otherwise provided
in the schedule, materials as referenced by this clause are defined as those
materials which enter directly into the work product or which are used or
consumed directly in connection with the work. The Subcontractor shall, to the
extent of its ability, procure materials at the most advantageous prices
available, with due regard to securing prompt delivery of compliant materials,
taking all cash and trade discounts, rebates, allowances, credits, salvage,
commissions, and, when unable to take advantage of such benefits, notifying
LMITCO promptly to that effect and the reason therefore. Credit shall be given
LMITCO for the aforementioned allowances et al. and the value of resulting scrap
accrued to the benefit of the Subcontractor or would have accrued except for the
fault or neglect of the Subcontractor. Such benefits lost through no fault or
neglect of the Subcontractor shall not be deducted from gross costs.

5.5   Miscellaneous Expenses: The Subcontractor shall be reimbursed for
miscellaneous expenses (e.g., copy charges, telephone and fax charges, computer
time).

5.6   Billing and Payment: Subcontractor shall be paid upon the submission of
itemized monthly invoices for services rendered during the preceding calendar
month, less deductions, if any, as herein provided. Invoices must be
substantiated a breakdown or list of personnel, labor category, hourly rate and
dates of service covered by the invoice. Labor costs will be computed by
multiplying the appropriate hourly rate set forth above by the number of direct
labor hours actually expended in performance of work. Fractional parts of an
hour shall be payable to the nearest half hour. Subcontractor personnel will be
paid for travel time when travel is required during the normal working day (8:00
a.m. to 5:00 p.m weekdays, excluding holidays and weekend travel). The hourly
rates shown are applicable to all services, regardless of whether they were
performed at straight time or overtime work.

6.   COMPLETION DATE

6.1.  This Purchase Order shall be in effect through 09/15/1999.

7.   INSPECTION/ACCEPTANCE

7.1.  Final inspection of material, equipment or services under this Purchase
Order will be performed at the MEEL and acceptance occurs at the time LMITCO
authorizes final payment

8.   ADMINISTRATION

8.1.  Subcontractor Administration: The Subcontractor responsibilities shall be
administered by James A. Giansiracusa.

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Administrative and Legal Jurisdiction Unless the Subcontractor is otherwise
notified in writing LMITCO's responsibilities under this action shall be
administered by C. F. Cloud, or an authorized Procurement Agent/Subcontract
Administrator (terms considered interchangeable) named herein, Procurement
Supervisor, or Procurement Manager.

8.3.  Technical Jurisdiction and Occurrence Rewriting Representative. All work
performed under this Purchase Order shall be under the technical jurisdiction of
Guy G. Loomis. Such jurisdiction is to extend only to the assignment and
coordination of work within the work under this Purchase Order. 8.4.  Notices:
Any notice provided for this action shall be considered as having been given: To
LMITCO, if mailed electronically via e-mail ("cfc@inel.gov") or fax, or if
delivered personally to C. F. Cloud, or if mailed by U. S. Mail addressed to
3521, Procurement LhaCO, P. O. Box 1625, Idaho Falls, Idaho 83415 - 3521; or To
the Subcontractor, if delivered personally to its duly authorized representative
at the site of work,

Statement of Work Polysiloxane Encapsulation of Calcined Waste May 6, 1999
Rev. 1

1.0   Introduction

Methods for the final disposition of reprocessed nuclear fuel are being examined
by the Department of Energy DOE). The DOE would like to avoid the high cost
of building a glass melter, which would melt the material into a glass waste
form for shipment to a Federal permanent disposal site, by either temporarily
stabilizing the waste for shipment to an off-site melter, or by using a non-
thermal encapsulation process that would satisfy waste shipping and acceptance
criteria at the proposed disposal site. Polysiloxane encapsulation is a
potential candidate technology that could achieve these goals.

Nuclear fuel was reprocessed at the Idaho Nuclear Technology and Engineering
Center (INTEC) at the Idaho National Engineering and Environmental Laboratory
ONEEL) in a process that resulted in a dry granular high level waste called
Calcined waste. Lockheed Martin Idaho Technologies Company (LMITCO) is tasked
with determining whether or not polysiloxane encapsulation is a viable
technology for disposing of this waste.

The polysiloxane encapsulation process is a simple room temperature mixing
process of the base material (including proprietary fillers) with any dry
granular waste material and then adding a catalyst to stimulate a silicon
polymerization process. LMITCO requires the assistance of a subcontractor in
determining the viability of this process as a waste disposal method.

2.0   Scope/Technical Tasks

Stored at the MEEL INTEC is a variety of "pilot scale" non-radioactive
surrogates of the calcined waste. This waste consists of salts and a variety of
heavy metal constituents and is, therefore, considered hazardous material. The
material is expected to be similar to that

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formulated during the INEEL low level calcined waste study performed by the
subcontractor in 1998.

LMITCO shall ship to the subcontractor approximately 5gal. of the pilot scale
material for encapsulation with polysiloxane. The subcontractor shall subject
the resultant waste forms to a variety of testing protocols.

The subcontractor shall use the most promising mixture of waste and polysiloxane
(the mixture that gives the highest waste loading and still passes TCLP and
compressive strength tests), to form a monolith, which the subcontractor shall
test using the testing protocol defined by the Materials Characterization Center
MCC-1P Static Leach Test Method. The subcontractor shall subject the sample to
the Department of Transportation DOT) oxidizer testing and corrosive testing.

The subcontractor shall form a sample of the material and subject it to melting
in a crucible to determine the melting temperature of the mixture (a possible
subcontractor for this work is Corning Environmental Laboratory Services).

The subcontractor shall summarize the results of these studies in a letter
report, which LMITCO will incorporate into an INEEL publication.

Finally, the subcontractor shall properly dispose of the resultant material
accumulated during the study according to State and facility requirements. The
subcontractor may perform the above-described tasks in any logical order
following the approval of the test and waste management plan submittals and
performance of the mixing study.

The subcontractor shall permanently dispose of all residual materials as part of
this project, and shall provide all notifications to state and facility
authorities as required.

3.0   Deliverables/Schedule

 .  The subcontractor shall submit a Waste Management Plan including the method
for final disposition of the approximately 5 gal. of pilot scale material. This
plan will take the form of a letter report transmittal. Due date May 31, 1999.

 .  The subcontractor shall submit a Test Plan that shall include all procedures
to be followed, all analytical techniques to be used in the evaluation of the
encapsulation process and final waste form, and a complete list of equipment to
be used. The subcontractor shall send this Plan to the INEEL as hard copy and
Word disc. Due date June 7, 1999.

Testing Phase

 .  The subcontractor shall prepare a mixing study starting with the scavenger
addition techniques used during EY-98 testing (low level calcined waste fiction
work). Prior to performing the TCLP, the subcontractor shall evaluate the waste
form for heavy metal

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assay and shall determine the ppm for heavy metals. The subcontractor shall
formulate the waste form with the highest possible waste loading that will still
pass the TCLP.

 .  Using the most favorable mix, the subcontractor shall perform a specially
designed "drop" test to determine the resultant size distribution of the waste
form following a drop that simulates dropping a stainless steel cylinder
containing waste from a height of 9m onto a pad simulating a standard cement
roadbed. The subcontractor may perform an acceptable substitute test by
subjecting the actual waste form to the same forces that would be transmitted to
the waste form inside the canister. The subcontractor shall provide a CAMCORDER
record of this drop test and submit it with the other collected data. In
addition, the subcontractor shall provide to LMITCO a still photographic record
of the before impact and after impact. The subcontractor shall obtain the size
distribution of the waste by using standard geological soil sieves.

 .  Using the most favorable mix obtained in the Mixing Study, the subcontractor
shall subject the waste form to "in house" DOT oxidizer testing and shall
perform an industry standard corrosiveness test.

 .  Using the most favorable mix obtained in the Mixing Study, the subcontractor
shall heat a small sample in a crucible test to determine the melting
temperature. This work can be done "in house" or by an outside contractor such
as Coming Environmental Laboratories Services. The subcontractor shall
photograph the resultant "glass" material against a high contrast background for
visual display.

The subcontractor shall complete all of the required testing by September 1,
1999, and shall provide a final submittal with useable tabularized data, in
hardcopy form as well as a WORD disc, along with negatives of any photographs
such that report quality figures can be generated. Due date September 15, 1999.

LMITCO Supplied items:

 . LMITCO will ship to the subcontractor the approximately 5gal. of pilot scale
waste for testing by June 15, 1999. A one-for-one schedule slippage will be
allowed to the subcontractor in the event that there are unforeseen delays in
shipment of the material.
 . LMITCO will publish the final report. In this report, all past work on
polysiloxane encapsulation studies will be included along with the subject
results. In addition, LMITCO will include the radiation effects results based on
the Kurchakov Institute work sponsored by the subcontractor. The subcontractor
will be consulted for verification of these test results before publication.

 . LMITCO will ensure that the 1997 environmental audit of the subcontractor
facility is still valid. It is noted here that the environmental audit performed
by Ken Gilbert of MEEL covered a much more restrictive case of mixed waste pad-A
salts and the WERF ash). It is assumed that shipment of essentially the same
material used in the EY-98 study, namely hazardous waste only, will be
considered covered under the prior audit.

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